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SUNPLUS Annual Report 2020

Jun 29, 2020

52056_rns_2020-06-29_1c9e7c22-1554-44f7-bc73-8d7506ca8c44.pdf

Annual Report

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LSE ： SUPD

Stock code: 2401

2019 Annual Report

Sunplus Technology Co., Ltd. Prepared by Search the annual website: http://mops.tse.com.tw Date of publication: May 15th, 2020

PLEASE READ FOLLOWING NOTICE

BEFORE USING THIS REPORT

Readers are advised that the original version of the report is in Chinese. If there is any conflict between these financial statements and the Chinese version or any difference in the interpretation of the two versions, the Chinese-language report shall prevail.

In addition, certain of our financial information have been published in accordance with requirements of the Republic of China Securities and Futures Commission and are presented in conformity with accounting principles generally accepted in the Republic of China. Readers should be cautioned that these accounting principles differ in many material respects from accounting principles generally accepted in other countries.

Except as required by law, we undertake no obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise.

The materials and information provided on this report have been issued by Sunplus and are posted solely for informational purposes and is not an offer to buy or sell or a solicitation of an offer to buy or sell any securities issued by us or otherwise.

SPOKESPERSON

Name: Wayne Shen Title: Vice President Tel: +886-3-5786005 E-mail: [email protected]

DEPUTY SPOKESPERSON

Name: Ji-An Zhuang Title: Investor Relations Manager Tel: +886-3-5786005 E-mail: [email protected]

SUNPLUS LOCATION

Address: 19, Innovation 1st Road, Hsinchu Science Park, Hsinchu 300, Taiwan Tel: +886-3-5786005 Fax: +886-3-5786006 http://www.sunplus.com

COMMON SHARES TRANSFER AGENT

Company: China Trust Commercial Bank Corporate Trust Operation and service Department Address: 5F, 83, Sec. 1, Chung-Ching S. Rd. Taipei 100, Taiwan Tel: +886-2-21811911 http://www.chinatrust.com.tw

AUDITORS

Name: Cheng-Chi Lin, SuJai Huang Company: Deloitte & Touche Tohmatsu Limited Address: 6F, 2, Prosperity Road 1, Hsinchu Science Park, Hsinchu 300, Taiwan Tel: +886-3-5780899 http://www.tw.deloitte.com

GDR DEPOSITARY BANK

Company: The Bank of New York Address: 101 Barclay Street New York, N.Y. 10286 Tel: +1-212-815-2476 http://www.adrbnymellon.com Please refer to London Stock Exchange official website for Sunplus’ Market Price. http://www.londonstockexchange.com

SUNPLUS WEBSITE

http://www.sunplus.com

TABLE OF CONTENT

TABLE OF CONTENT
I. LETTER TO SHAREHOLDERS ..................................................................................................................................... 1
II. COMPANY PROFILE.................................................................................................................................................. 4
2.1 Foundation of Sunplus ........................................................................................................................................... 4
2.2 Milestones ............................................................................................................................................................. 4
III. CORPORATE GOVERNANCE ..................................................................................................................................... 6
3.1 Organization........................................................................................................................................................... 6
3.2 Director, general manager, deputy general manager, associate, department and branch office in charge of
information ............................................................................................................................................................ 8
3.3 Corporate Governance Implementation .............................................................................................................. 20
3.4 Audit Fees ............................................................................................................................................................ 48
3.5 Replacement of Auditors ..................................................................................................................................... 48
3.6 Chairman, Presidents, and Managers in Charge of Finance and Accounting Who Held a Position in Sunplus’
Independent Audit Firm or Its Affiliates during the Recent Year ......................................................................... 49
3.7 Net Change in Shareholding and Net Changes in Shares Pledged by Director, Manager, and Shareholders with
10% Shareholding or More .................................................................................................................................. 50
3.8 Top 10 Shareholders & Related Parties ............................................................................................................... 52
3.9 Long-term Investment Ownership ....................................................................................................................... 53
IV. CAPITAL & SHARES ................................................................................................................................................ 54
4.1 Capitalization ....................................................................................................................................................... 54
4.2 Issuance of Corporate Bonds ............................................................................................................................... 61
4.3 Preferred Shares .................................................................................................................................................. 61
4.4 Issuance of GDR ................................................................................................................................................... 62
4.5 Employee Stock Options Plan .............................................................................................................................. 63
4.6 Restricted Employees Stock ................................................................................................................................. 63
4.7 Mergers and Acquisitions .................................................................................................................................... 63
V. FINANCIAL PLAN & IMPLEMENTATION .................................................................................................................. 64
VI. BUSINESS HIGHLIGHT ............................................................................................................................................ 65
6.1 Business Activities ................................................................................................................................................ 65
6.2 Market Status ...................................................................................................................................................... 73
6.3 Personnel Structure ............................................................................................................................................. 80
6.4 Environmental Protection & Expenditures .......................................................................................................... 80
6.5 Employees ............................................................................................................................................................ 82
6.6 Important Contracts ............................................................................................................................................ 83
VII. FINANCIAL STATEMENTS ....................................................................................................................................... 84
7.1 Condensed Financial Statement and Auditors’ Opinions by adopting IFRSs ....................................................... 84
7.2 Financial Analysis for recent 5 years .................................................................................................................... 89
7.3 Report by Audit Commitee .................................................................................................................................. 94
7.4 Consolidated Financial Statements ...................................................................................................................... 95
7.5 Financial Statements-Standalone ...................................................................................................................... 197
7.6 Financial Difficulties ........................................................................................................................................... 288
VIII. FINANCIAL ANALYSIS ........................................................................................................................................... 274
8.1 Financial Status .................................................................................................................................................. 274
8.2 Operational Results............................................................................................................................................ 275
8.3 Cash Flow ........................................................................................................................................................... 276
8.4 Major Capital Expenditure ................................................................................................................................. 277
8.5 Long-Term Investment ....................................................................................................................................... 277
8.6 Risk Management .............................................................................................................................................. 278
8.7 Other Remarks ................................................................................................................................................... 280
IX. SPECIAL NOTES .................................................................................................................................................... 281
9.1 Affiliates ............................................................................................................................................................. 281
9.2 Private Placement Securities ............................................................................................................................. 293
9.3 Status of Sunplus Common Shares/GDRs Acquired, Disposed of, or Held by Subsidiaries ............................... 294
9.4 Special Notes ..................................................................................................................................................... 295
9.5 Any Events Impact to Shareholders’ Equity and Share Price ............................................................................. 295

I. LETTER TO SHAREHOLDERS

BUSINESS REPORT

2019 Business Results

Sunplus consolidated net operating revenue totaled NT$5,512 million and the gross profit were NT$2,375 million in 2019. While R&D expense totaled NT$1,481 million and the G&A expenses were NT$498 million, marketing expense were NT$263 million, Operating profit was NT$132 million in 2019. Including total non-operating net income NT$112million, the profit before tax were NT$244 million. Excluding the income tax expense NT$69 million, the net profit of the year totaled NT$175 million, attributable to owner of the Company were NT$15 million which the earning per share after tax for 2019 was NT$0.03.

The net sales from continuing operations in 2019 decline 9.30% compared to the same period last year. The gross profit margin is about 43% compared with the previous year ’s 40%, a slight increase. 2019 operating net profit increased by 246.72% compared to 2018.

Off-line income decreased from 294 million yuan in 2018 to 112 million yuan in 2019, mainly due to the recognition of profits of 171 million yuan by the company in 2018.

The IFRS Consolidated Statement exposes other comprehensive gains and losses in 2019, Including the difference between the conversion of financial statements of foreign operating institutions, Unrealized gains and losses on equity instrument investments measured at fair value through other comprehensive income, determine the number of reassessments of the welfare plan, the shareholding of related enterprises recognized by equity method, the total net profit and loss for other consolidated losses in 2019 is NT$102 million. Total after 2019 net profit, the total consolidated profit and loss in 2018 was NT$73 million, the consolidated profit and loss was attributed to the loss of NT$77 million by the owner of the company.

PRODUCTS R&D, TECHNOLOGIES AND OUTLOOK

Sunplus technology mergers and acquisitions of major individuals, including Sunplus Technology, Generplus Technology, SunplusIT Technology, Jumplux Technology, and mainland subsidiary.

Sunplus is currently focuses on the development, in addition to Automotive Infotainment System (Display Audio), advanced driver assistance system (ADAS) automotive chip products and systems platform, has been launched with advanced driving support system function (ADAS) of the wafer platform products, and car information entertainment system (Display Audio), BoomBox, SoundBar, portable entertainment systems and other products. It also introduces the intelligent computing chip Plus1 for AioT applications, and also provides IP authorization such as high-speed interface, data converter and analog. With the popularity of smart phones, the convenience of getting on the car and the car infotainment system, the system has quickly become the standard equipment for the new car. It is expected that the COVID-19 epidemic will drag down global consumption, and the growth momentum of the system may be slightly affected. It is still the main source of growth and revenue for Lingyang Technology. The revolutionary breakthrough of the intelligent computing chip Plus1 greatly reduces the research and development threshold of Edge Computing. It will be the best solution for a small number of diverse AIoT new applications, and related applications will become increasingly popular in the future.

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Generalplus Technology focuses on consumer electronics chips, product line includes voice, multimedia, and MCU chips, Product development market leadership. The main application products include interactive toys, education and learning, driving Recorder, Sports DV, Gaming Keyboard and Wireless Charging. In 2019, a 16-bit DSP high-sound quality sound synthesis platform integrating a touch unit and a high-resolution PWM broadcasting device will be launched. In terms of multimedia products, we developed a 32-bit SoC handheld open application platform, including image processing, visual processing, and voice processing, combined with deep learning algorithms, which can be used for educational learning, driving records, sports photography, aerial photography and other applications. For MCU, develop 32-bit Cortex-M0 sine wave drive motor control chip. In terms of wireless charging, launched a 15W solution, integrated high and low voltage components and passed WPC EPP certification.

Sunplus Innovation Technology focuses on computer peripheral application chip development, including human-machine interface device chips, network camera chips, optical sensors, RF wireless transmission chips, remote control ICs, and more. About 70% of the sales in 2019 will come from PC-related cameras, mouse keyboards, and storage chips, and about 30% will come from high-speed cameras, rear-drive lenses, new retail and remote control chips. 2020 will continue the application of machine vision intelligent imaging applications and expand applications in non-PC applications.

In response to the growing demand for automotive electronics and high-speed storage, Jumplux Technology has developed ASICs with system customers. In 2019, the RISC-V is adopted as the core car regulation USB Media Hub IC SPD126, and UFS Bridge IC SPD215, the former supports USB Type-C PD2.0 and WPC wireless charging, and the latter can be used for large-capacity USB flash drives or solid state drives.

Subsidiaries in China include Shanghai Sunplus, Sunplus prof-tek, Sunmedia, Sunplus-EHUE and Sunplus APP. Mainly to support the company's mainland customers in the company's engineering services and business promotion.

External competition, regulations, and overall economic environment

Sunplus Technology focuses on the development of niche-type automotive wafers and intelligent computing chips, continuing its leading position in the audio-visual market, and is beneficial to the competitiveness of automotive audio-visual systems, vehicle-adaptive driving assistance systems, and AIoT Edge Computing.

Generplus Technology 2019 due to the closure of the US Toys R Us, the change in sales channels, affecting the number of new products; and the Sino-US trade war, weakening the mainland market demand; resulting in a decline in revenue and profits. Looking ahead to 2020, we will continue to bet on more R & D resources, develop new products, and respond to market changes .

In addition to continuing to develop in a more integrated direction, Sunplus Innovation Technology is also Actively develop non-PC smart imaging products to establish a foundation for growth and profitability.

Jumplux Technology continues to invest in the development of automotive USB Media Hub and UFS bridge IC, and will build a RISC-V 64-bit development platform and IP.

Looking ahead to 2020, the haze of the US-China trade war is still going on, and a COVID-19 epidemic will be added in the first quarter, which will drag down international economic growth. The company will pay close attention to changes in the international economic environment, adjust the pace of product research and development in a timely manner, and meet market demands.

Future company development strategy

Sunplus Technology includes all of the merged individuals of the Group, will continue to deepen the core competitiveness of various fields, efforts to expand the market, Improve product value and observe market trends, adjust and optimize product lines and investments,

Improve industry and industry performance, at the same time actively investing in advanced technology, open up

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new products and markets, reserve a new wave of growth momentum. Expect to continue to increase profits, return the long-term support of shareholders.

All the best, Chairman & CEO,

==> picture [100 x 36] intentionally omitted <==

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II. COMPANY PROFILE

2.1 Foundation of Sunplus

Sunplus was founded in August 3[rd] 1990 in Hsinchu, Taiwan.

2.2 Milestones

For the formation of the Company's share capital, please refer to pages 63-66 of this annual report. Please refer to pages 284 to 295 of this annual report on the relationship between the Company and the investment enterprises.

August 1990 Sunplus Technology was founded May 1993 Obtained approval from the SIPA to move into Hsinchu Science Park October 1993 Moved into Hsinchu Science Park September 1994 Company started in-house wafer circuit probe testing December 1995 Groundbreaking for the construction of Sunplus’ office building, located in 19, Innovation First Road, Hsinchu Science Park April 1996 Evaluated as “The most productive IC design company” by Hsinchu SIPA January 1997 Grand opening of Sunplus’ office building September 1997 Sunplus Technology was IPO on the Over-The-Counter stock market January 2000 Sunplus was listed on the main board of the Taiwan Stock Exchange (TSE) Jun 2000 Received certificate of ISO 9001 Quality Assessment by RWTUV September 2000 Reorganized into three new business unit, Consumer center, Multimedia center, and production center; and the BOD appointed Mr. Yarn-Chen Chen as the president December 2000 Received the “Distinguished Achieved Award” from Hsinchu SIPA March 2001 Launched Global Depositary Receipts on the London Stock Exchange December 2001 Completed the Grandtech merger and announced the company’s reorganization January 2002 Established a subsidiary in Shanghai, China to provide better service to customers in Mainland. February 2002 Implemented ERP system successfully to enhance company‘s operating efficiency and competence Jun 2002 Purchased a new office building (B-building) at Science Park July 2002 Sponsored the new Innovation Park and Parking Lot at Science Park, Hsinchu February 2003 Licensed 32-bit core IP from MIPS Technology for next-generation consumer electronic products April 2003 Completed acquisition of Oak Optical Storage Business and spin-off a new venture, Sunext Technology to focus on next generation Blue Ray ODD controller May 2003 Licensed MPEG-4 video compression technology from DivX Networks to create DivX certified IC solution for consumer electronic products Jun 2003 Announced reorganization by altering the Product Business Unit Systems to Functional Business Unit Systems August 2003 Established a new milestone for monthly sales over NT$1 billion December 2003 Won “Innovation Product Award 2003” and “R&D Performance Award 2003” from Hsinchu SIPA March 2004 Established a new subsidiary, Generalplus Technology to focus on consumer IC design September 2004 Received certificate of ISO 14000 Quality Assessment December 2004 MFP SoC with 4800dpi image quality won “Innovation Product Award 2004” from Hsinchu SIPA December 2004 Won “R&D Performance Award 2004” from Hsinchu SIPA Jun 2005 Announced the first 32-bit processor core S+core® with Sunplus-owned instruction set architecture Jun 2005 Launched USB2.0-to-Serial ATA bridge solution August 2005 Applied MPEG-4 image controlling technology to the first IP cam with resolution up to 1M pixel in the worldwide August 2005 Completed the merger with the 3G team of information & communication research lab ITRI and started the development of 3G cellular communication ICs September 2005 Established a new milestone of monthly sales up to NT$1.899 billion as record high October 2005 Mass-produced the PHS mobile baseband processor November 2005 Announced the worldwide first DVD ICs certificated by DivX Ultra December 2005 Announced reorganization by altering the Functional Business Unit System to Product Business Unit System and the resolved to spin off the LCD IC business. Mr. Chou-Chye Huang was appointed to CEO of Sunplus

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  • March 2006 Completed the spin-off of the LCD IC business into Orise Technology Co., Ltd.

  • December 2006 Completed the spin-off of Controller & Peripheral Business Unit into Sunplus Innovation Technology Inc.

  • December 2006 Completed the spin-off of the Personal Entertainment Business Unit and Advanced Business Unit into Sunplus mMobile Inc.

  • December 2006 Established a new record high with 2006 profit after tax, NT$2.97 billion February 2007 Licensed digital TV SoC IP to Silicon Image, Inc. with US$40 million for license fee. March 2007 Completed the return of capital with outstanding shares afterward 512,953,665 shares April 2007 The spin-off LCD driver IC design company Orise Technology was IPO April 2007 Sunplus mMobile spun-off Sunplus mMedia Inc.

  • December 2007 Highly integrated SoC SPG290 with interactive game and education function won the “Innovation Product Award 2007” from Hsinchu SIPA

  • December 2007 Received certificate of IECQ 080000 for hazardous substance process management. December 2007 Established a new subsidiary, Sunplus Prof-tek Technology, in Shenzhen January 2008 Established a new subsidiary, Sunmedia Technology, in Chengdu March 2008 Sunext licensed optical storage technology to Broadcom Corporation with license income up to US$38 million

  • March 2008 Launched first DTMB demodulator for China digital broadcasting TV system among Taiwanese IC design companies

  • April 2008 Established new subsidiary Sunplus APP Technology in Beijing, to follow up Sunplus University Program in China

  • March 2009 Joint-promoted with DTS next generation DVD SoC delivering the ultimate audio entertainment experience.

  • October 2009 Spun off Sunplus mMedia’s product lines: PC-Cam to Sunplus Innovation Technology Inc.; PMP/MP3/DPF to Generalplus Technology Inc.; DSC to new start-up

  • December 2009 Started up iCatch Technology Inc. to take over the DSC business from Sunplus mMedia Inc. August 2010 Celebrated Sunplus’ 20th Anniversary and Kept Going for “Technology for Easy Living” May 2011 Announced reorganization by altering the IC design Unit and System design Unit to “DVD Product Center”, “STB Product Center”, “TV Product Center” and “IP Product Center”. Appointed Dr. Archie Yeh as President of Home Entertainment Business Unit

  • November 2011 The subsidiary, Generalplus Technology Co., Ltd., focused on consumer IC design listing on Taiwan Stock Exchange under the code “4952”

  • May 2012 Updated the company vision from “Technology for Easy Living” to “Customers Win we win” June 2012 Elected the 9th Board of Directors and Supervisors in AGM2012, the BOD re-elected Unanimously Mr. Chou-Chye Huang as Chairman

  • December 2012 Joint-invest Sunplus Core Technology (renamed: S2-tek Inc.) for TV IC design January 2013 Reorganization to “DVD Product Center”, “STB Product Center” and “IP Product Center”.

  • November 2013 “DVD Product Center” renamed to “Automotive Product Center”. January 2014 Established new subsidiary Beijing Sunplus-Ehue Tech Co., Ltd. October 2014 Sunplus mMedia spun-off Jumplux for USB Multi-Screen Display SoC and IP Design

  • December 2014 The consolidated net sales reached NT$8.71 billion January 2015 Orise Technology merged with Focal Tech January 2015 Disposed STB product Center

  • February 2015 Reorganization due to disposal of STB center, Chariman & CEO Mr. Chou-Chye Huang is acting as President of HE BU

  • June 2015 Elected the 10th Board of Directors and Supervisors in AGM2015, the BOD re-elected Unanimously Mr. Chou-Chye Huang as Chairman

  • December 2016 Completed TSMC 28nm HPC + IP development and verification June 2017 The first release of the Corporate Social Responsibility Report (CSR Report) actively implements corporate social responsibility to meet the international trends of balanced

  • environmental, social and corporate governance development, contribute to economic

  • development, and improve employees, their families, and the local community as a whole. Social quality of life

  • March 2018 Home Entertainment BU has set up a "Smart Computing Project"

  • August 2018 Update Slogan to "Make difference". Simple and powerful, easy to understand, the larger version of Make declares that you want to "do something" and create valuable differentiation

  • February 2019 Passed ISO45001 and TOHSMS environmental safety and health management system certification

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III. Corporate Governance 3.1 Organization

3.1.1 Organization Chart

==> picture [497 x 375] intentionally omitted <==

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3.1.2 Major Corporate Functions

March 31st, 2020

March 31st,2020
Department Job Description
Chairman Office (1)
Engaging the strategic alliances
(2)
Planning and executing investment plans
(3)
Arranging Board of Directors Meetings
(4)
The planning, promotion and implementation of the Company's integrity
management
CEO Office (1)
Establishing company’s operational strategies, and goals
(2)
Auditing and improving the operating performances
(3)
Communicating with investors, public and media
(4)
Executing and managing the strategic alliances
(5)
Managingstrategic investments
Internal Auditor (1)
Executing internal auditing plan as routine
(2)
Auditing subsidiaries regularly
(3)
Auditing special cases
(4)
Re-certification auditing of self-examination
(5)
Establishingthe internal control system
Home Entertainment Business Unit (1)
Developing world-class audio and video solutions
(2)
Managing sales channels and distributors and providing customer services
(3)
Marketing and expanding business worldwide
(4)
Conducting production, material control, International trading affairs
(5)
Developing and handling quality assurance system
(6)
Planning new products and engaging cutting-edge technologies
(7)
Maintainingtestingsoftware and facility
Administration Unit (1)
Total Management, Plant Management, Procurement, Occupational safety,
Environmental Protection and Administrative Services
(2)
Managing human resources and personnel
(3)
Establishing corporate information service to upgrade the productivity
(4)
Automating of business process to be more competitive
(5)
Consultingfor management to makingbusiness decisions
Finance & Accounting Division (1)
Managing finance & accounting affairs
(2)
Arrangingannual shareholders’ meeting
Legal & IP Department (1)
Coordinating the legal and IP affairs
(2)
Controlling the project procedures and design documents
(3)
Conserving company confidential documents
(4)
Purchasing, maintaining librarianship
(5)
Conductingcontracts & IP management

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3.2 Directors, and Management

3.2.1 Directors& Supervisors

3.2
Directors, and Management
3.2.1 Directors& Supervisors		 3.2
Directors, and Management
3.2.1 Directors& Supervisors		 3.2
Directors, and Management
3.2.1 Directors& Supervisors		 3.2
Directors, and Management
3.2.1 Directors& Supervisors		 3.2
Directors, and Management
3.2.1 Directors& Supervisors
April 14th,2020/Unit: shares
Title Name Date
Elected		 Initial Date
Elected		 Term of
Office		 Share holding
When Elected		 Current
Shareholding		 Spouse & Minor
Shareholding		 Educational
Background		 Positions Currently held in Other Companies (Note 2)
Amount % Amount % Amount %
Chairman & CEO Chou-Chye Huang 2018.06.11 1990.07.09 3 years 92,737,817 15.67 92,737,817 15.67 1,370,993 0.23 M.S., Electrical Engineering,
National Tsing Hua
University,Taiwan		 Note 1
Director Wen-Shiung Jan 2018.06.11 2009.04.30 3 years 0 0.00 0 0.00 0 0.00 MBA, International Business,
National Taiwan University,
Taiwan		 Supervisor: Mildex Optical Inc., Hi-Yes Group., E-Pin Optical Inc.
Director: Ability Enterprise, Panjit, GenkiTek, OPALS
Independent Director: Ko Ja (Cayman), Biostar
Chairman: iCatch
Chairman: ECSC Inc.
Director Global View Co., Ltd., 2018.06.11 1990.07.09 3 years 10,038,049 1.70 10,038,049 1.70 0 0.00 - Chairman: RADIANT INNOVATION INC.
Chairman: British Cayman Islands GLOBAL VIEW CO.,LTD
Director: NVTEK
Director Wen-Ren Su(Global
View Co., Ltd.,
Representative of Legal
Entity)		 2018.06.11 1990.07.09 3 years 0 0.00 0 0.00 0 0.00 B.S., Accounting, Chinese
Culture University		 Director & President:Global View,
Director:Beijing Global View,
Independent Director: Well Shin Technology Co., Ltd.
Supervisor:NVTEK
Director Wei-Min Lin 2018.06.11 2009.04.30 3 years 0 0.00 0 0.00 0 0.00 M.S., Accountancy, Jinan
University,China		 CPA Auditorof Wei-Min Lin Accounting Firm
Independent Director: Fu-Shin holdingCayman
Independent Director Che-Ho Wei 2018.06.11 2009.04.30 3 years 0 0.00 0 0.00 0 0.00 Ph.D., Electronic Engineering,
University of Washington,
Seattle, USA		 Independent Director & Compensation Committee: Genesis
Photonics Inc.,
Director: Unizyx Holding Corporation, Arcadyan Technology, MXIC
Chairman :NIIEPA
NCTU, Department of Electronic Engineering, Adjunct Professor
Independent Director Tse-Jen Huang 2018.06.11 2015.06.12 3 years 0 0.00 0 0.00 0 0.00 EMBA, National Taiwan
University of Science and
Technology		 CPA and Headof Shengxin CO., CPAs
Independent Director & Compensation Committee:GenMont,
Sunfon
Independent Director Yao-Ching Hsu 2018.06.11 2015.06.12 3 years 0 0.00 0 0.00 0 0.00 M.S., Laws, Cornell University,
USA		 Charged lawyerof Yuan Qing Patent and Trademark Office
Supervisor:Xiyinlina Prevention Foundation

Note1:

Chairman: Generalplus, Russell Holdings Co., Ltd.,Venturplus Group Inc., Venturplus Mauritius Inc., Venturplus Cayman Inc., Shanghai Sunplus, Sunplus Technology (HK), Sunplus Venture Capital, Lin Shih Investment, Weiying Investment, Sunplus Management Consulting, Generalplus International (SAMOA)Inc., Sunplus Innovation Technology, Sunplus mMobile, Generalplus (MAURITIUS) Inc., Generalplus (Shenzhen), , Sunplus Prof-tek, Sunmedia, Sunplus APP, Ytrip Technology , Magic Sky Limited, , Award Glory Ltd., Sunny Fancy Ltd., Giant Rock Inc., Giant Kingdom Ltd., Zhu Ming Teaching Foundation, Zhu Ming Academic Foundation, Jumplux, Chongqing Shuangxin Technology, NVTEK, GlintMed.

Chairman & President : Sunext, Sunplus mMedia, Beijing Sunplus-Ehue Tech Co., Ltd.

President : Worldplus Holdings L.L.C

Director : Pan Wen Yuan Foundation, Sinocon Industrial standards Foundation, SIPP Technology, Inc., iCatch, Global View Co., Ltd., Zhu Ming Foundation.

Note 2: The chairman of the company and the general manager or equivalent (the top manager) are the same person, are relatives of each other, such as spouse or one parent, should explain the reasons, rationality, necessity and corresponding measures (such as increasing the number of independent directors and should (More than half of the directors have not served as employees or managers, etc.):

The chairman of the company also serves as the chief executive officer. To improve business efficiency and decision-making execution, the company has the following specific measures.

  1. Of the seven members of the board of directors, except for the chairman, the remaining six directors are not part-time employees or managers.

  2. Independent directors can fully discuss and make recommendations for the board of directors in each functional committee to implement corporate governance.

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3.2.2 Directors and Supervisors' Qualifications and Independence Analysis

April 14th, 2020

Criteria
Name (Note 1)		 With over 5 years of working experience and
one of the following professional
requirements		 With over 5 years of working experience and
one of the following professional
requirements		 With over 5 years of working experience and
one of the following professional
requirements		 Independent Status (Note 2) Independent Status (Note 2) Independent Status (Note 2) Independent Status (Note 2) Independent Status (Note 2) Independent Status (Note 2) Independent Status (Note 2) Independent Status (Note 2) Independent Status (Note 2) Independent Status (Note 2) Numbers of other public
companies concurrently
serving as an independent
director
An instructor
of higher
position in a
department
of commerce,
law, finance,
accounting,
or other
departments
related to the
Company’s
business in a
public or
private
college or
university		 A judge,
public
prosecutor,
attorney,
certified
public
accountant,
or other
professional
or technical
specialist who
has passed a
national
examination
and been
awarded a
certificate in
a profession
necessary for
the
Company’s
business		 With an
experience in
commerce,
law, finance,
accounting or
other
specialties
necessary to
the
Company’s
business		 1 2 3 4 5 6 7 8 9 10 11 12
Chou-Chye
Huang		 0
Wen-Shiung
Jan		 2
Wen-Ren Su
(Global View
Co., Ltd.,
Representative
of Legal Entity)		 1
Wei-Min Lin 1
Che-Ho Wei 1
Tse-Jen Huang 2
Yao-Ching Hsu 0

Note 1: The amount of columns depends on the actual circumstance.

  • Note 2: “  ” indicates the directors and supervisors meeting any of the following criteria during the term of office and two years before being elected.

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

  • (2) Not a director or supervisor of the company or its affiliates. (However, if the independent directors established by the company and its parent company, subsidiary company or subsidiary of the same parent company in accordance with this law or local national laws and regulations are concurrently held by each other, it is not limited.)

  • (3) Not the shareholder (with its relatives or under others’ names) who holds more than 1% shareholding of the total issued shares or ranked as the Top 10 shareholders.

  • (4) Not a manager listed in (1) or a spouse, relative within the second parent, or direct blood relative within the third parent, etc.

  • (5) Directors who do not directly hold more than 5% of the total issued shares of the company, the top five shareholders, or a legal person shareholder who appoints a representative as a company director or supervisor according to Article 27, paragraph 1 or 2, of the company law, Supervisor or Employee (However, if the independent directors established by the company and its parent company, subsidiary company or subsidiary of the same parent company in accordance with this law or local national laws and regulations are concurrently held by each other, it is not limited to this).

  • (6) More than half of the shares that are not on the board of directors of the company or have voting rights are the directors, supervisors or employees of other companies controlled by the same person (but if it is a company or its parent company, subsidiary or a child of the same parent company) (The independent directors established by the company in accordance with

9

this law or local national laws shall not be limited to this).

  • (7) Directors (directors), supervisors (supervisors) or employees (but in the case of the company and its parent company) of other companies or organizations that are not the same person or spouse with the company ’s chairman, general manager or equivalent. Independent directors set up by a subsidiary company or a subsidiary of the same parent company in accordance with this law or local national laws shall not be limited to this).

  • (8) Directors (directors), supervisors (supervisors), managers or shareholders holding more than 5% of shares in specific companies or institutions that do not have financial or business dealings with the company (but specific companies or institutions that hold issued shares in the company) If the total number is more than 20% but not more than 50%, and the independent directors established by the company and its parent company, subsidiary company or subsidiary of the same parent company in accordance with this law or local national laws and regulations are concurrently held by each other, it is not limited to this).

  • (9) Professionals, sole proprietorships, partnerships, companies or institutions that do not provide audits for companies or related companies or have business, legal, financial, accounting and other related services whose cumulative amount of remuneration in recent two years has not exceeded NT $ 500,000 Business owners, partners, directors (directors), supervisors (supervisors), managers and their spouses. However, members of the Remuneration and Compensation Committee, Public Takeover Review Committee, or M & A Special Committee that perform their duties in accordance with the relevant laws and regulations of the Securities Exchange Act or the Corporate M & A Act are not limited.

  • (10) There is no kinship relationship with other directors within the scope of spouse or second parent.

  • (11) There is no one of the circumstances in Article 30 of the Company Law.

  • (12) There is no Article 27 of the Company Law which stipulates that the government, legal person or its representative shall be elected.

10

3.2.3 Major Shareholders of Sunplus’ Shareholders as Legal Entities

a) Global View’s Top 10 Shareholders

Major Shareholders of Sunplus’ Shareholders as Legal Entities
a) Global View’s Top 10 Shareholders		 Major Shareholders of Sunplus’ Shareholders as Legal Entities
a) Global View’s Top 10 Shareholders
April 14th,2020
Shareholder Holding
SunplusTechnology 13.06%
HSBC as trusteefor BankofSingapore 9.20%
Jhih-YuanChou 5.61%
Kai Tian Investment Co.,Ltd 5.07%
Citibankas trusteefor First Securities (HK) 3.31%
China Trust Commercial Bank is entrusted to keep the investment account of Baofu
Investment Consultant (HongKong) Co.,Ltd.-Customer Account
2.58%
Meng-Huei Lin 2.47%
ShuhuiChen 2.47%
YunlongHuang 2.09%
Yi JiangNan Co.,Ltd. 2.04%

b) Remark if the above Major Shareholders as Legal Entities:

Shareholder Major Shareholders Holding
HSBC as trustee forBank of Singapore Not Applicable -
Kai Tian Investment Co., Ltd BingHuangShi 50%
Yi Ye Wu 50%
Citi bank as trustee for First Securities
(HK)		 Not Applicable -
China Trust Commercial Bank is
entrusted to keep the investment account
of Baofu Investment Consultant (Hong
Kong) Co., Ltd. - Customer Account		 Not Applicable -
Yi Jiang Nan Co., Ltd. Jiaxi Huang 27%
Jiaqi Huang 26%

11

3.2.4 Management Team

3.2.4 Management Team 3.2.4 Management Team 3.2.4 Management Team 3.2.4 Management Team 3.2.4 Management Team
April 12th,2019/Unit: shares
Title Country of
Citizenship		 Name Gender Effective Date Current
Shareholding		 Spouse’s & Minor’s
Shareholding		 Use the Name of
Others to Hold
Shares		 Educational Background Positions Currently
held in Other
Companies (Note 5)		 With Spouse or Two Parents
Relationship Manager		 Remarks
Amount % Amount % Amount % Job Title Name Relationship
Chairman
& CEO		 Republic of
China		 Chou-Chye
Huang		 male 1990.07.09 92,737,817 15.67 1,370,993 0.23 0 0.00 M.S., Electrical Engineering, National
TsingHua University,Taiwan		 Note:1 - - - Note:6
Vice
President		 Republic of
China		 Wayne Shen male 2005.12.01 969,558 0.16 0 0.00 0 0.00 EMBA, Technology Management,
National Chiao-Tung University,
Taiwan		 Note:2 - - -
Assistant
VP		 Republic of
China		 Alex Chang male 2013.07.01 0 0.00 0 0.00 0 0.00 Master, Industrial Engineering,
National Chiao-Tung University,
Taiwan		 Note:3 - - -
Assistant
VP		 Republic of
China		 Jason Lin male 2013.11.01 146,111 0.02 8,637 0.00 0 0.00 Master, Industrial Engineering,
National Chiao-Tung University,
Taiwan		 Note:4 - - -
Assistant
VP		 Republic of
China		 Michael Su male 2018.03.15 0 0.00 0 0.00 Master of Electrical Engineering,
University of Southern California,
USA		 -
Director of
Finance &
Accounting
Division		 Republic of
China		 Shu-Chen
Cheng		 female 2013.03.01 36,067 0.01 0 0.00 0 0.00 Bachelor, Accounting, Tunghai
University, Taiwan		 Note:5 - - -

Note 1

Chairman: Generalplus, Russell Holdings Co., Ltd.,Venturplus Group Inc., Venturplus Mauritius Inc., Venturplus Cayman Inc., Shanghai Sunplus, Sunplus Technology (HK), Sunplus Venture Capital, Lin Shih Investment, Weiying Investment, Sunplus Management Consulting, Generalplus International (SAMOA)Inc., Sunplus Innovation Technology, Sunplus mMobile, Generalplus (MAURITIUS) Inc., Generalplus (Shenzhen), , Sunplus Prof-tek, Sunmedia, Sunplus APP, Ytrip Technology , Magic Sky Limited, , Award Glory Ltd., Sunny Fancy Ltd., Giant Rock Inc., Giant Kingdom Ltd., Zhu Ming Teaching Foundation, Zhu Ming Academic Foundation, Jumplux, Chongqing Shuangxin Technology, GenkiTek, GlintMed Innovation.

Chairman & President : Sunext, Sunplus mMedia, Beijing Sunplus-Ehue Tech Co., Ltd.

Director : Pan Wen Yuan Foundation, Sinocon Industrial standards Foundation, SIPP Technology, Inc., iCatch, Global View Co., Ltd., Zhu Ming Foundation.

President : Worldplus Holdings L.L.C

Note 2

Director : Sunplus mMobile, Sunplus Innovation Technology, Beijing Sunplus-Ehue Tech Co., Ltd., Sunplus mMedia, Supervisor : Jumplux, Sunext.

Note 3

AVP : iCatch, Sunext, Jumplux, , Shanghai Sunplus, Chongqing Shuangxin Technology. Director : Rudong Core Electronic Technology.

Note 4

Director : Advanced Vehicle Systems Co., Ltd. AutoSys Co., Ltd.

Note 5 Manager : Sunext, Jumplux. Supervisor : Rudong Core Electronic Technology. Director : GenkiTek.

Note 6

When the general manager or equivalent (the top manager) and the chairman are the same person, are relatives such as spouse or one parent, they should disclose the reasons, rationality, necessity and corresponding measures (such as increasing the number of independent directors More than half of the directors have not served as employees or managers, etc.) related information:

The chairman of the company also serves as the chief executive officer. To improve operational efficiency and decision-making execution, the company currently has the following specific measures:

  1. Among the seven members of the board of directors, except for the chairman, the remaining six directors are not part-time employees or managers.

  2. Independent directors can fully discuss and make recommendations for the board of directors in each functional committee to implement corporate governance.

12

3.2.5 Remuneration to Directors, Presidents, and Vice Presidents

a) Remuneration to Directors

Units: NT$,shares Units: NT$,shares Units: NT$,shares Units: NT$,shares Units: NT$,shares Units: NT$,shares Units: NT$,shares Units: NT$,shares Units: NT$,shares Units: NT$,shares Units: NT$,shares Units: NT$,shares Units: NT$,shares
Title Name
(Note 1)		 Remuneration to Directors (A)+(B)+(C)+
(D) %of Net
Income
(Note10)		 Remuneration to Directors who hold a Concurrent Post in the Company (A)+(B)+(C)+(
D)
+(E)+(F)+(G)
% of Net
Income
(Note10)		 Receive
remuneratio
n from
non-subsidia
ry
reinvestment
business or
parent
company
(Note11)
Salary (A)
(Note 2)		 Pension
(B)		 Bonus from Profit
Distribution (C)
(Note 3)		 Allowance (D)
(Note 4)		 Salary, Bonus, etc.
(E)
(Note 5)		 Pension (F) Employee Bonus from Profit Distribution (G)
(Note 6)
Sunplus Consolidated
Subsidiaries (Note 7)		 Sunplus Consolidated
Subsidiaries (Note 7)		 Sunplus Consolidated
Subsidiaries (Note 7)		 Sunplus Consolidated
Subsidiaries (Note 7)		 Sun
plu
s		 Cons
olidat
ed
Subsi
diarie
s
(Note
7)		 Sunplus Consolid
ated
Subsidia
ries
(Note 7)		 Sunplus Consolida
ted
Subsidiari
es (Note 7)		 Sunplus Consolidated
Subsidiaries
(Note7)		 Sunplus Consolidated
Subsidiaries
Cash
Bonus		 Stock
Bonus		 Cash
Bonus		 Stock
Bonus
Chairman Chou-Chye Huang - - - - 868,000 924,000 5.67 6.04 5,625,126 5,625,126 91,848 91,848 - - - - 43.01 43.38 4,242,507
Director Wen-ShiungJan
Director Global View
Wen-Ren Su
Representative of Legal
Entity
Director Wei-Min Lin
Independent Director Che-Ho Wei 1,314,000 1,314,000 8.58 8.58 - - - - - - - - 8.58 8.58 -
Independent Director Tse-Jen Huang
Independent Director Yao-Ching Hsu
1. Please state the policy, system, standards and structure of independent directors' remuneration payment, and describe the relevance to the amount of remuneration according to the responsibilities, risks, time invested, etc.
According to one of Article 18 of the company's articles of association, "when the directors of the company perform the duties of the company, the company may pay remuneration regardless of the company's business profits and losses. The remuneration is authorized by the
board of directors to negotiate with the industry's usual level. Remuneration is distributed in accordance with the provisions of Article 29 of this Constitution. "
To measure the company's current operating scale and to consider the company's current operating conditions, the company's policies and regulations for the payment of independent directors' remuneration have a positive relationship with operating performance and future risks
assumed. The payment of the sole director's remuneration shall be reported to the board of directors for resolution after the approval of the remuneration committee.
2. In addition to the disclosures in the above table,the directors of the companyin the most recentyear have received remuneration forprovidingservices to all companies in the financial report(such as servingas consultants for non-employees): none.
Remuneration Class
Remuneration to Directors Names of Directors
The total amount of the first four remuneration (A)+(B)+(C)+(D) The total amount of the first seven remuneration (A)+(B)+(C)+(D)+(E)+(F)+(G)
Sunplus (Note 8) Consolidated Subsidiaries (Note 9) H Sunplus (Note 8) All companies in the financial report (I) (Note 9)
Under NT$1,000,000 Chou-Chye Huang, Wen-Shiung Jan, Global View,
Wen-Ren Su, Wei-Min Lin, Che-Ho Wei, Tse-Jen
Huang,Yao-ChingHsu		 Chou-Chye Huang, Wen-Shiung Jan, Global View,
Wen-Ren Su, Wei-Min Lin, Che-Ho Wei, Tse-Jen
Huang,Yao-ChingHsu		 Wen-Shiung Jan, Global View, Wen-Ren Su, Wei-Min
Lin, Che-Ho Wei, Tse-Jen Huang, Yao-Ching Hsu		 Global View, Wei-Min Lin, Che-Ho Wei, Tse-Jen
Huang, Yao-Ching Hsu
NT$1,000,000~NT$2,000,000(Not included) Wen-Ren Su
NT$2,000,000~NT$3,500,000(Not included) Wen-ShiungJan
NT$3,500,000~NT$5,000,000(Not included)
NT$5,000,000~NT$10,000,000(Not included) Chou-Chye Huang Chou-Chye Huang
NT$10,000,000~NT$15,000,000(Not included)
NT$15,000,000~NT$30,000,000(Not included)
NT$30,000,000~NT$50,000,000(Not included)
NT$50,000,000~NT$100,000,000(Not included)
More than 100,000,000
Total 8 8 8 8

Note 1: The names of directors should be listed separately (legal shareholders should separately list the names and representatives of legal shareholders), and the general directors and independent directors should be listed separately, and the amount of each payment should be disclosed in a summary manner. If the director also serves as the general manager or deputy general manager, this table and the following table (3-1), or the following tables (3-2-1) and (3-2-2).

Note 2: It indicates the remuneration to directors (including salary, allowance, pension, bonus, rewards, and etc.) in the most recent fiscal year.

Note 3: It indicates the remuneration to directors from profit distribution in the most recent fiscal year according to the proposal submitted by BOD to shareholders’ meeting for approval.

13

  • Note 4: It indicates the expenses generated from directors’ business (including transportation fees, social activity fees, allowances, dormitories, company cars, and etc.) in the most recent fiscal year. If the Company provides a house, car/other transportation, or other allowances to directors, the relevant payments, calculated at actual cost or fair value, shall be disclosed. The remuneration paid to the company drivers shall be disclosed but not included in the remuneration to directors.

  • Note 5: It indicates the salaries, allowances, pensions, severance pay, bonuses, rewards, transportation fees, social activity fees, dormitories, cars, and etc., to directors who hold concurrently posts in the Company (including presidents, vice presidents, managers, or other employees). If the Company provides a house, car/other transportation, or other allowances to directors, the relevant payments, calculated at actual cost or fair value, shall be disclosed. The remuneration paid to the company drivers shall be disclosed but not included in the remuneration to directors.

  • And the salary fee recognized by IFRS 2 "Share Fundamental Contribution", including obtaining employee stock vouchers, restrictions on employee rights of new shares and participation in cash replenishment of shares and so on, should also be included in the remuneration. The company's Chairman Huang and the chief executive officer are equipped with official car, and are provided with drivers to pay the relevant remuneration of NT$462,000.

  • Note 6: It indicates the employee bonuses (including cash and stock) paid to directors who hold concurrently posts in the Company (including presidents, vice presidents, managers, or other employees). The amount of employee bonus according to the proposal of profit distribution submitted by BOD to shareholders’ meeting for approval in the most recent fiscal year shall be disclosed. If there is no such proposal yet, the stock bonus may be calculated according to the stock bonus last year.

  • Note 7: The total amount remuneration paid to the Company’s directors by all the companies in the consolidated financial statements (including Sunplus) shall be disclosed.

  • Note 8: It indicates the numbers of directors classified by the amount of their remuneration paid by Sunplus. The amount of remuneration paid to juridical-person shareholders shall be distributed equally to each representative, and then they shall also be classified according to the amount. If the Company is willing to disclose the names of directors in each classification, the title of column shall be changed to “Names of Directors”.

  • Note 9: It indicates the numbers of directors classified by the amount of their remuneration paid by all the companies in the consolidated financial statements (including Sunplus). If the Company is willing to disclose the names of directors in each classification, the title of column shall be changed to “Names of Directors”.

  • Note 10: Net profit after tax refers to net profit after tax in the most recent individual or individual financial report.

  • Note 11: a. This column should clearly list the amount of remuneration received by the company's directors from reinvested businesses other than subsidiaries or the parent company (if not, please fill in "none").

  • b. If the directors of the company receive remuneration from a subsidiary's reinvestment business or parent company, the remuneration received by the company's directors from a subsidiary's reinvestment business or parent company shall be included in column I of the remuneration scale and The field name is changed to "Parent company and all reinvestment businesses".

  • c. Remuneration refers to the remuneration, remuneration (including remuneration of employees, directors and supervisors) and business execution fees received by the directors of the company as directors, supervisors or managers of non-subsidiary investment companies or parent companies. ※The remuneration disclosed here shall not be applied for taxation purpose because those are calculated on a different basis.

b) Remuneration to Management Team

Unit: NT$,shares
Bonus from Profit Distribution (D)
(Note 4)
(A)+(B)+(C) +(D)
% on Net Income
(Note 8)
Receive remuneration from
non-subsidiary reinvestment
business or parent company
(Note 9)
Sunplus
Consolidated Subsidiaries
(Note 5)
Sunplus
Consolidated
Subsidiaries
(Note 5)
Cash
Bonus
Stock Bonus
Cash
Bonus
Stock Bonus
0
0
0
0
63.93
63.93
25,000		 Unit: NT$,shares
Bonus from Profit Distribution (D)
(Note 4)
(A)+(B)+(C) +(D)
% on Net Income
(Note 8)
Receive remuneration from
non-subsidiary reinvestment
business or parent company
(Note 9)
Sunplus
Consolidated Subsidiaries
(Note 5)
Sunplus
Consolidated
Subsidiaries
(Note 5)
Cash
Bonus
Stock Bonus
Cash
Bonus
Stock Bonus
0
0
0
0
63.93
63.93
25,000		 Unit: NT$,shares
Bonus from Profit Distribution (D)
(Note 4)
(A)+(B)+(C) +(D)
% on Net Income
(Note 8)
Receive remuneration from
non-subsidiary reinvestment
business or parent company
(Note 9)
Sunplus
Consolidated Subsidiaries
(Note 5)
Sunplus
Consolidated
Subsidiaries
(Note 5)
Cash
Bonus
Stock Bonus
Cash
Bonus
Stock Bonus
0
0
0
0
63.93
63.93
25,000		 Unit: NT$,shares
Bonus from Profit Distribution (D)
(Note 4)
(A)+(B)+(C) +(D)
% on Net Income
(Note 8)
Receive remuneration from
non-subsidiary reinvestment
business or parent company
(Note 9)
Sunplus
Consolidated Subsidiaries
(Note 5)
Sunplus
Consolidated
Subsidiaries
(Note 5)
Cash
Bonus
Stock Bonus
Cash
Bonus
Stock Bonus
0
0
0
0
63.93
63.93
25,000		 Unit: NT$,shares
Bonus from Profit Distribution (D)
(Note 4)
(A)+(B)+(C) +(D)
% on Net Income
(Note 8)
Receive remuneration from
non-subsidiary reinvestment
business or parent company
(Note 9)
Sunplus
Consolidated Subsidiaries
(Note 5)
Sunplus
Consolidated
Subsidiaries
(Note 5)
Cash
Bonus
Stock Bonus
Cash
Bonus
Stock Bonus
0
0
0
0
63.93
63.93
25,000		 Unit: NT$,shares
Bonus from Profit Distribution (D)
(Note 4)
(A)+(B)+(C) +(D)
% on Net Income
(Note 8)
Receive remuneration from
non-subsidiary reinvestment
business or parent company
(Note 9)
Sunplus
Consolidated Subsidiaries
(Note 5)
Sunplus
Consolidated
Subsidiaries
(Note 5)
Cash
Bonus
Stock Bonus
Cash
Bonus
Stock Bonus
0
0
0
0
63.93
63.93
25,000		 Unit: NT$,shares
Bonus from Profit Distribution (D)
(Note 4)
(A)+(B)+(C) +(D)
% on Net Income
(Note 8)
Receive remuneration from
non-subsidiary reinvestment
business or parent company
(Note 9)
Sunplus
Consolidated Subsidiaries
(Note 5)
Sunplus
Consolidated
Subsidiaries
(Note 5)
Cash
Bonus
Stock Bonus
Cash
Bonus
Stock Bonus
0
0
0
0
63.93
63.93
25,000
Title Name
(Note 1)		 Salary (A)
(Note 2)		 Pension (B) Reward, Allowance, etc.
(C)
(Note 3)		 Bonus from Profit Distribution (D)
(Note 4)		 (A)+(B)+(C) +(D)
% on Net Income
(Note 8)		 Receive remuneration from
non-subsidiary reinvestment
business or parent company
(Note 9)
Sunplus Consolidated
Subsidiaries
(Note 5)		 Sunplus Consolidated
Subsidiaries
(Note 5)		 Sunplus Consolidated
Subsidiaries
(Note 5)		 Sunplus Consolidated Subsidiaries
(Note 5)		 Sunplus Consolidated
Subsidiaries
(Note 5)
Cash
Bonus		 Stock Bonus Cash
Bonus		 Stock Bonus
CEO Chou-Chye Huang 8,030,554 8,030,554 268,608 268,608 1,488,772 1,488,772 0 0 0 0 63.93 63.93 25,000
VP Wayne Shen
  • Regardless of title, where the job is equivalent to the general manager, deputy general manager (such as: president, chief executive, director ... etc.), should be exposed.
Remuneration to Management Names of Presidents and Vice Presidents Names of Presidents and Vice Presidents
Sunplus
(Note 6)		 All companies in the financial report (E)
(Note 7)
Under NT$1,000,000
NT$1,000,000~NT$2,000,000
NT$2,000,000~NT$3,500,000
NT$3,500,000~NT$5,000,000 Wayne Shen Wayne Shen
NT$5,000,000~NT$10,000,000 Chou-Chye Huang Chou-Chye Huang
NT$10,000,000~NT$15,000,000
NT$15,000,000~NT$30,000,000
NT$30,000,000~NT$50,000,000
NT$50,000,000~NT$100,000,000
More than NT$100,000,000
Total 2 2
  • Note 1: Names of presidents and vice presidents shall be disclosed separately, and the remuneration shall be disclosed in total amount. If the director concurrently serves as the general manager or deputy general manager, this table and the above table (1-1), or (1-2-1) and (1-2-2).

Note 2: It indicates the remuneration to presidents and vice presidents, including salary, allowance, pension, and severance pay) in the most recent fiscal year.

Note 3: It indicates the bonuses, rewards, transportation fees, social activity fees, dormitories, cars, and etc., to presidents and vice presidents. If the Company provides a house, car/other transportation, or other allowances to presidents and vice presidents, the relevant payments, calculated at actual cost or fair value, shall be disclosed. The remuneration paid to the company drivers shall be disclosed but not included in the remuneration to directors. And the salary fee recognized by IFRS 2 "Share Fundamental Contribution", including obtaining employee stock vouchers, restrictions on employee rights of new shares and participation in cash replenishment of shares and so on, should also be included in the remuneration.

Note 4: It is to fill in the amount of employee compensation (including stocks and cash) approved by the board of directors for the distribution of the general manager and deputy general manager in the most recent year. And should also fill in table 1-3.

Note 5: The total amount remuneration paid to the Company’s presidents and vice presidents by all the companies in the consolidated financial statements (including Sunplus) shall be disclosed.

Note 6: It indicates the numbers of presidents and vice presidents classified by the amount of their remuneration paid by Sunplus. If the Company is willing to disclose the names of presidents and vice presidents in each classification, the title of column shall be changed to “Names of Presidents and Vice Presidents”.

Note 7: It indicates the numbers of presidents and vice presidents classified by the amount of their remuneration paid by all the companies in the consolidated financial statements (including Sunplus). If the Company is willing to disclose the names of presidents and vice presidents in each classification,

14

the title of column shall be changed to “Names of Presidents and Vice Presidents”.

  • Note 8: Net profit after tax refers to net profit after tax in the most recent individual or individual financial report.

Note 9: a. This column should clearly list the amount of remuneration received by the general manager and deputy general manager of the company from the investment company outside the subsidiary or the parent company (if not, please fill in "none").

  • b. If the general manager and deputy general manager of the company receive relevant remuneration from a subsidiary's out-of-investment business or parent company, the remuneration received by the general manager and deputy general manager of the company's out-of-subsidiary investment business or parent company shall be incorporated into Remuneration level from column E of the table and change the name of the column to "Parent company and all reinvested businesses".

  • c. Remuneration refers to the remuneration, remuneration (including employees, directors and supervisors) and business execution received by the general manager and deputy general manager of the company as directors, supervisors or managers of non-subsidiary companies or parent companies Fees and related remuneration.

※The remuneration disclosed here shall not be applied for taxation purpose because those are calculated on a different basis.

15

c) Employee Bonus Granted to Management Team April 14th, 2020

Title Name Shares Bonus Cash Bonus Sum up % on Net
Income
Chairman & CEO Chou-Chye
Huang		 - - - -
Vice President Wayne Shen
Assistant VP Jason Lin
Assistant VP Alex Chang
Assistant VP Michael Su
Director of
Finance &
Accounting
Division		 Shu-Chen Cheng
  • 3.2.6 Analysis for remuneration paid by all the companies in the consolidated financial statements (including Sunplus) to directors, presidents and vice presidents as % net income in the most recent two years. Also, the relevant policy, standards and procedures, and the relation between remuneration and performance shall be stated. 1. Analysis for remuneration paid as % net income

1.Analysis for r
emuneration paid as % net income
emuneration paid as % net income
Remuneration 2017 2018
Amount % of Net
income(Loss)		 Amount % of Net income
(Loss)
Director 12,296,000 218.93% 12,235,000 79.92%
Supervisor
Management
  1. The remuneration is fair compared to peers and the compensations are based on the operation performance of company and individuals.

16

3.3 Corporate Governance Implementation 3.3.1 BOD Meeting Status

8 meetings were held in 2019 (8 meetings by 11[th] BOD) (A), and the attendance of directors is as follow:

Title Name (Note 1) Attendance in
Person (B)		 By Proxy Attendance
Rate B/A (%)
(Note 2)		 Remarks
Chairman Chou-Chye Huang 8 0 100
Director Wen-ShiungJan 6 2 75
Director Representative of Legal Entity ,
Global View
Wen-Ren Su		 8 0 100
Director Wei-Min Lin 7 1 87.5
Independent
Director		 Che-Ho Wei 8 0 100
Independent
Director		 Tse-Jen Huang 8 0 100
Independent
Director		 Yao-Ching Hsu 8 0 100
Other information required to be disclosed:
1.The operation of the board if one of the following circumstances, should specify the date of the board,
period, the contents of the motion, the opinions of all independent directors and the handling of opinions of
independent directors:
(1)matters listed in Article 14-3 of the Securities Exchange Act
Board of
Directors
The contents of the motion and
follow-up
Article 14-3 of
the Securities
Exchange Act
Independence
or objection
The Sixth
Board of
Directors of
the Eleventh
Session
108.01.22
1. The company's "Disposal
Procedures for Obtaining or Disposing
of Assets" revision discussion.
v
None
Opinion of independent directors：None.
The Company's handling of the opinions of independent directors：None.
Resolution results: After the chairman asked all the attendees to pass the
casewithout objection.
The Seventh
Session of the
Eleventh
Board of
Directors
108.03.20
1. The company's "Endorsement
Guarantee Operation Procedure"
revision discussion.
2. The company's "Disbursement of
Funds and Others' Operation
Methods" revised discussion
proposal.
v
Note
Opinion of independent directors：None.
The Company's handling of the opinions of independent directors：None.
Resolution results: After the chairman asked all the attendees to pass the
casewithout objection.
The Tenth
Board of
Directors of
the Eleventh
Session
108.08.13
1. The discussion of directors'
remunerationdistribution in 2018.
v
None
Opinion of independent directors：None.
The Company's handling of the opinions of independent directors：None.
Resolution results:
(1) On the instruction of the chairman, Wei Zhe and the independent
director shall act as the acting chairman. In addition to avoiding the
general directors who did not participate in the discussion and voting
according to law, the acting chairman shall consult all the independent
directors present and pass the proposal on the remuneration of the
general director without objection.

17

(2) In addition to evading independent directors who did not participate in
the discussion and voting according to law, the chairman consulted all
the general directors present, and passed the proposal of the
independent directorswithout objection.
The eleventh
board of
directors of the
eleventh
session
108.11.13
1. The discussion on the revision of the
company's management measures.
v
None
Opinion of independent directors：None.
The Company's handling of the opinions of independent directors：None.
Resolution results: After the chairman asked all the attendees to pass the
casewithout objection.
The 13th
Board of
Directors of
the 11th
Session
108.12.25
1. 2020 accountant appointment and
independence assessment discussion.
v
None
Opinion of independent directors：None.
The Company's handling of the opinions of independent directors：None.
Resolution results: After the chairman asked all the attendees to pass the
casewithout objection.
(2) Except for the foregoing, other board of directors who oppose or retain opinions and have a record
or written statement by an independent director: None.
2. The implementation of the directors ’avoidance of the proposal of interest shall state the name of the
director, the content of the proposal, the reason for the avoidance of interests and the situation of
participation in voting—
A. On August 13, 2008, the board of directors discussed the "Discussion on the Distribution of Directors'
Remuneration in 2007":
1. On the instruction of the chairman, Wei Zhe and the independent director shall act as the acting
chairman. In addition to avoiding the general directors who did not participate in the discussion and voting
according to law, the acting chairman consulted all the independent directors present and passed the
proposal of the general director's remuneration without objection.
2. In addition to evading independent directors who did not participate in the discussion and voting
according to law, the general directors who were consulted by the chairman in consultation with all the
directors passed the proposal without objection on the remuneration of independent directors.
3. The listed OTC company should disclose information such as the evaluation cycle and period,
evaluation scope, method, and evaluation content of the board ’s self (or peer) evaluation—
The company has passed the resolution of the board of directors on March 30, 109 to formulate the "board
performance evaluation method", the relevant content of the method is as follows:
Evaluation
cycle
During
evaluation
Assessmen
t scope
Evaluation
method
Evaluation content
The board of
directors of
the company
shall perform
the internal
board
performance
evaluation in
accordance
with the
evaluation
procedures
and
evaluation
indicators of
these
measures
every year.
Completed
before the
end of the
first quarter
of the
following
year.
Performance
evaluation of
the overall
board of
directors,
individual
board
members
and
functional
committees.
Including
internal
self-evaluation
of the board of
directors,
self-evaluation
of board
members,
peer
evaluation,
appointment
of external
professional
institutions,
experts or
other
appropriate
methods for
performance
The company should consider the
company's situation and needs to determine
the measurement items for board
performance evaluation, and should include
at least the following five aspects:
1. The level of participation in the company's
operations.
Second, improve the quality of board
decision-making.
3. The composition and structure of the
board of directors.
4. Selection and continuous training of
directors.
5. Internal control.
Directors (self or peers) performance
evaluation measures should include at least
the following six aspects:
1. Master the company's goals and tasks.
2. Cognition of directors'responsibilities.		 (2) In addition to evading independent directors who did not participate in
the discussion and voting according to law, the chairman consulted all
the general directors present, and passed the proposal of the
independent directorswithout objection.
The eleventh
board of
directors of the
eleventh
session
108.11.13
1. The discussion on the revision of the
company's management measures.
v
None
Opinion of independent directors：None.
The Company's handling of the opinions of independent directors：None.
Resolution results: After the chairman asked all the attendees to pass the
casewithout objection.
The 13th
Board of
Directors of
the 11th
Session
108.12.25
1. 2020 accountant appointment and
independence assessment discussion.
v
None
Opinion of independent directors：None.
The Company's handling of the opinions of independent directors：None.
Resolution results: After the chairman asked all the attendees to pass the
casewithout objection.
(2) Except for the foregoing, other board of directors who oppose or retain opinions and have a record
or written statement by an independent director: None.
2. The implementation of the directors ’avoidance of the proposal of interest shall state the name of the
director, the content of the proposal, the reason for the avoidance of interests and the situation of
participation in voting—
A. On August 13, 2008, the board of directors discussed the "Discussion on the Distribution of Directors'
Remuneration in 2007":
1. On the instruction of the chairman, Wei Zhe and the independent director shall act as the acting
chairman. In addition to avoiding the general directors who did not participate in the discussion and voting
according to law, the acting chairman consulted all the independent directors present and passed the
proposal of the general director's remuneration without objection.
2. In addition to evading independent directors who did not participate in the discussion and voting
according to law, the general directors who were consulted by the chairman in consultation with all the
directors passed the proposal without objection on the remuneration of independent directors.
3. The listed OTC company should disclose information such as the evaluation cycle and period,
evaluation scope, method, and evaluation content of the board ’s self (or peer) evaluation—
The company has passed the resolution of the board of directors on March 30, 109 to formulate the "board
performance evaluation method", the relevant content of the method is as follows:
Evaluation
cycle
During
evaluation
Assessmen
t scope
Evaluation
method
Evaluation content
The board of
directors of
the company
shall perform
the internal
board
performance
evaluation in
accordance
with the
evaluation
procedures
and
evaluation
indicators of
these
measures
every year.
Completed
before the
end of the
first quarter
of the
following
year.
Performance
evaluation of
the overall
board of
directors,
individual
board
members
and
functional
committees.
Including
internal
self-evaluation
of the board of
directors,
self-evaluation
of board
members,
peer
evaluation,
appointment
of external
professional
institutions,
experts or
other
appropriate
methods for
performance
The company should consider the
company's situation and needs to determine
the measurement items for board
performance evaluation, and should include
at least the following five aspects:
1. The level of participation in the company's
operations.
Second, improve the quality of board
decision-making.
3. The composition and structure of the
board of directors.
4. Selection and continuous training of
directors.
5. Internal control.
Directors (self or peers) performance
evaluation measures should include at least
the following six aspects:
1. Master the company's goals and tasks.
2. Cognition of directors'responsibilities.		 (2) In addition to evading independent directors who did not participate in
the discussion and voting according to law, the chairman consulted all
the general directors present, and passed the proposal of the
independent directorswithout objection.
The eleventh
board of
directors of the
eleventh
session
108.11.13
1. The discussion on the revision of the
company's management measures.
v
None
Opinion of independent directors：None.
The Company's handling of the opinions of independent directors：None.
Resolution results: After the chairman asked all the attendees to pass the
casewithout objection.
The 13th
Board of
Directors of
the 11th
Session
108.12.25
1. 2020 accountant appointment and
independence assessment discussion.
v
None
Opinion of independent directors：None.
The Company's handling of the opinions of independent directors：None.
Resolution results: After the chairman asked all the attendees to pass the
casewithout objection.
(2) Except for the foregoing, other board of directors who oppose or retain opinions and have a record
or written statement by an independent director: None.
2. The implementation of the directors ’avoidance of the proposal of interest shall state the name of the
director, the content of the proposal, the reason for the avoidance of interests and the situation of
participation in voting—
A. On August 13, 2008, the board of directors discussed the "Discussion on the Distribution of Directors'
Remuneration in 2007":
1. On the instruction of the chairman, Wei Zhe and the independent director shall act as the acting
chairman. In addition to avoiding the general directors who did not participate in the discussion and voting
according to law, the acting chairman consulted all the independent directors present and passed the
proposal of the general director's remuneration without objection.
2. In addition to evading independent directors who did not participate in the discussion and voting
according to law, the general directors who were consulted by the chairman in consultation with all the
directors passed the proposal without objection on the remuneration of independent directors.
3. The listed OTC company should disclose information such as the evaluation cycle and period,
evaluation scope, method, and evaluation content of the board ’s self (or peer) evaluation—
The company has passed the resolution of the board of directors on March 30, 109 to formulate the "board
performance evaluation method", the relevant content of the method is as follows:
Evaluation
cycle
During
evaluation
Assessmen
t scope
Evaluation
method
Evaluation content
The board of
directors of
the company
shall perform
the internal
board
performance
evaluation in
accordance
with the
evaluation
procedures
and
evaluation
indicators of
these
measures
every year.
Completed
before the
end of the
first quarter
of the
following
year.
Performance
evaluation of
the overall
board of
directors,
individual
board
members
and
functional
committees.
Including
internal
self-evaluation
of the board of
directors,
self-evaluation
of board
members,
peer
evaluation,
appointment
of external
professional
institutions,
experts or
other
appropriate
methods for
performance
The company should consider the
company's situation and needs to determine
the measurement items for board
performance evaluation, and should include
at least the following five aspects:
1. The level of participation in the company's
operations.
Second, improve the quality of board
decision-making.
3. The composition and structure of the
board of directors.
4. Selection and continuous training of
directors.
5. Internal control.
Directors (self or peers) performance
evaluation measures should include at least
the following six aspects:
1. Master the company's goals and tasks.
2. Cognition of directors'responsibilities.		 (2) In addition to evading independent directors who did not participate in
the discussion and voting according to law, the chairman consulted all
the general directors present, and passed the proposal of the
independent directorswithout objection.
The eleventh
board of
directors of the
eleventh
session
108.11.13
1. The discussion on the revision of the
company's management measures.
v
None
Opinion of independent directors：None.
The Company's handling of the opinions of independent directors：None.
Resolution results: After the chairman asked all the attendees to pass the
casewithout objection.
The 13th
Board of
Directors of
the 11th
Session
108.12.25
1. 2020 accountant appointment and
independence assessment discussion.
v
None
Opinion of independent directors：None.
The Company's handling of the opinions of independent directors：None.
Resolution results: After the chairman asked all the attendees to pass the
casewithout objection.
(2) Except for the foregoing, other board of directors who oppose or retain opinions and have a record
or written statement by an independent director: None.
2. The implementation of the directors ’avoidance of the proposal of interest shall state the name of the
director, the content of the proposal, the reason for the avoidance of interests and the situation of
participation in voting—
A. On August 13, 2008, the board of directors discussed the "Discussion on the Distribution of Directors'
Remuneration in 2007":
1. On the instruction of the chairman, Wei Zhe and the independent director shall act as the acting
chairman. In addition to avoiding the general directors who did not participate in the discussion and voting
according to law, the acting chairman consulted all the independent directors present and passed the
proposal of the general director's remuneration without objection.
2. In addition to evading independent directors who did not participate in the discussion and voting
according to law, the general directors who were consulted by the chairman in consultation with all the
directors passed the proposal without objection on the remuneration of independent directors.
3. The listed OTC company should disclose information such as the evaluation cycle and period,
evaluation scope, method, and evaluation content of the board ’s self (or peer) evaluation—
The company has passed the resolution of the board of directors on March 30, 109 to formulate the "board
performance evaluation method", the relevant content of the method is as follows:
Evaluation
cycle
During
evaluation
Assessmen
t scope
Evaluation
method
Evaluation content
The board of
directors of
the company
shall perform
the internal
board
performance
evaluation in
accordance
with the
evaluation
procedures
and
evaluation
indicators of
these
measures
every year.
Completed
before the
end of the
first quarter
of the
following
year.
Performance
evaluation of
the overall
board of
directors,
individual
board
members
and
functional
committees.
Including
internal
self-evaluation
of the board of
directors,
self-evaluation
of board
members,
peer
evaluation,
appointment
of external
professional
institutions,
experts or
other
appropriate
methods for
performance
The company should consider the
company's situation and needs to determine
the measurement items for board
performance evaluation, and should include
at least the following five aspects:
1. The level of participation in the company's
operations.
Second, improve the quality of board
decision-making.
3. The composition and structure of the
board of directors.
4. Selection and continuous training of
directors.
5. Internal control.
Directors (self or peers) performance
evaluation measures should include at least
the following six aspects:
1. Master the company's goals and tasks.
2. Cognition of directors'responsibilities.		 (2) In addition to evading independent directors who did not participate in
the discussion and voting according to law, the chairman consulted all
the general directors present, and passed the proposal of the
independent directorswithout objection.
The eleventh
board of
directors of the
eleventh
session
108.11.13
1. The discussion on the revision of the
company's management measures.
v
None
Opinion of independent directors：None.
The Company's handling of the opinions of independent directors：None.
Resolution results: After the chairman asked all the attendees to pass the
casewithout objection.
The 13th
Board of
Directors of
the 11th
Session
108.12.25
1. 2020 accountant appointment and
independence assessment discussion.
v
None
Opinion of independent directors：None.
The Company's handling of the opinions of independent directors：None.
Resolution results: After the chairman asked all the attendees to pass the
casewithout objection.
(2) Except for the foregoing, other board of directors who oppose or retain opinions and have a record
or written statement by an independent director: None.
2. The implementation of the directors ’avoidance of the proposal of interest shall state the name of the
director, the content of the proposal, the reason for the avoidance of interests and the situation of
participation in voting—
A. On August 13, 2008, the board of directors discussed the "Discussion on the Distribution of Directors'
Remuneration in 2007":
1. On the instruction of the chairman, Wei Zhe and the independent director shall act as the acting
chairman. In addition to avoiding the general directors who did not participate in the discussion and voting
according to law, the acting chairman consulted all the independent directors present and passed the
proposal of the general director's remuneration without objection.
2. In addition to evading independent directors who did not participate in the discussion and voting
according to law, the general directors who were consulted by the chairman in consultation with all the
directors passed the proposal without objection on the remuneration of independent directors.
3. The listed OTC company should disclose information such as the evaluation cycle and period,
evaluation scope, method, and evaluation content of the board ’s self (or peer) evaluation—
The company has passed the resolution of the board of directors on March 30, 109 to formulate the "board
performance evaluation method", the relevant content of the method is as follows:
Evaluation
cycle
During
evaluation
Assessmen
t scope
Evaluation
method
Evaluation content
The board of
directors of
the company
shall perform
the internal
board
performance
evaluation in
accordance
with the
evaluation
procedures
and
evaluation
indicators of
these
measures
every year.
Completed
before the
end of the
first quarter
of the
following
year.
Performance
evaluation of
the overall
board of
directors,
individual
board
members
and
functional
committees.
Including
internal
self-evaluation
of the board of
directors,
self-evaluation
of board
members,
peer
evaluation,
appointment
of external
professional
institutions,
experts or
other
appropriate
methods for
performance
The company should consider the
company's situation and needs to determine
the measurement items for board
performance evaluation, and should include
at least the following five aspects:
1. The level of participation in the company's
operations.
Second, improve the quality of board
decision-making.
3. The composition and structure of the
board of directors.
4. Selection and continuous training of
directors.
5. Internal control.
Directors (self or peers) performance
evaluation measures should include at least
the following six aspects:
1. Master the company's goals and tasks.
2. Cognition of directors'responsibilities.		 (2) In addition to evading independent directors who did not participate in
the discussion and voting according to law, the chairman consulted all
the general directors present, and passed the proposal of the
independent directorswithout objection.
The eleventh
board of
directors of the
eleventh
session
108.11.13
1. The discussion on the revision of the
company's management measures.
v
None
Opinion of independent directors：None.
The Company's handling of the opinions of independent directors：None.
Resolution results: After the chairman asked all the attendees to pass the
casewithout objection.
The 13th
Board of
Directors of
the 11th
Session
108.12.25
1. 2020 accountant appointment and
independence assessment discussion.
v
None
Opinion of independent directors：None.
The Company's handling of the opinions of independent directors：None.
Resolution results: After the chairman asked all the attendees to pass the
casewithout objection.
(2) Except for the foregoing, other board of directors who oppose or retain opinions and have a record
or written statement by an independent director: None.
2. The implementation of the directors ’avoidance of the proposal of interest shall state the name of the
director, the content of the proposal, the reason for the avoidance of interests and the situation of
participation in voting—
A. On August 13, 2008, the board of directors discussed the "Discussion on the Distribution of Directors'
Remuneration in 2007":
1. On the instruction of the chairman, Wei Zhe and the independent director shall act as the acting
chairman. In addition to avoiding the general directors who did not participate in the discussion and voting
according to law, the acting chairman consulted all the independent directors present and passed the
proposal of the general director's remuneration without objection.
2. In addition to evading independent directors who did not participate in the discussion and voting
according to law, the general directors who were consulted by the chairman in consultation with all the
directors passed the proposal without objection on the remuneration of independent directors.
3. The listed OTC company should disclose information such as the evaluation cycle and period,
evaluation scope, method, and evaluation content of the board ’s self (or peer) evaluation—
The company has passed the resolution of the board of directors on March 30, 109 to formulate the "board
performance evaluation method", the relevant content of the method is as follows:
Evaluation
cycle
During
evaluation
Assessmen
t scope
Evaluation
method
Evaluation content
The board of
directors of
the company
shall perform
the internal
board
performance
evaluation in
accordance
with the
evaluation
procedures
and
evaluation
indicators of
these
measures
every year.
Completed
before the
end of the
first quarter
of the
following
year.
Performance
evaluation of
the overall
board of
directors,
individual
board
members
and
functional
committees.
Including
internal
self-evaluation
of the board of
directors,
self-evaluation
of board
members,
peer
evaluation,
appointment
of external
professional
institutions,
experts or
other
appropriate
methods for
performance
The company should consider the
company's situation and needs to determine
the measurement items for board
performance evaluation, and should include
at least the following five aspects:
1. The level of participation in the company's
operations.
Second, improve the quality of board
decision-making.
3. The composition and structure of the
board of directors.
4. Selection and continuous training of
directors.
5. Internal control.
Directors (self or peers) performance
evaluation measures should include at least
the following six aspects:
1. Master the company's goals and tasks.
2. Cognition of directors'responsibilities.
Evaluation
cycle		 During
**evaluation **		 Assessmen
t scope		 Evaluation
method		 Evaluation content
The board of
directors of
the company
shall perform
the internal
board
performance
evaluation in
accordance
with the
evaluation
procedures
and
evaluation
indicators of
these
measures
every year.		 Completed
before the
end of the
first quarter
of the
following
year.		 Performance
evaluation of
the overall
board of
directors,
individual
board
members
and
functional
committees.		 Including
internal
self-evaluation
of the board of
directors,
self-evaluation
of board
members,
peer
evaluation,
appointment
of external
professional
institutions,
experts or
other
appropriate
methods for
performance		 The company should consider the
company's situation and needs to determine
the measurement items for board
performance evaluation, and should include
at least the following five aspects:
1. The level of participation in the company's
operations.
Second, improve the quality of board
decision-making.
3. The composition and structure of the
board of directors.
4. Selection and continuous training of
directors.
5. Internal control.
Directors (self or peers) performance
evaluation measures should include at least
the following six aspects:
1. Master the company's goals and tasks.
2. Cognition of directors'responsibilities.

18

evaluation. 3. The level of participation in the company's
operations.
4. Internal relationship management and
communication.
5. Professional and continuous education of
directors.
6. Internal control.
The measurement items of the performance
evaluation of the functional committee
should include at least the following five
aspects:
1. The level of participation in the company's
operations.
2. Cognition of functional committee
responsibilities.
3. Improve the quality of functional
committee decision-making.
4. Composition of functional committees and
selection of members.
5. Internal control.
The indicators for the performance
evaluation of the board of directors and
functional committees should be based on
the company's operations and needs to
determine the content that is suitable for the
company's performance evaluation, and the
remuneration committee should periodically
review and make recommendations.
The scoring standard is revised and
adjusted according to the company's needs,
and it can also be scored according to the
weightingmethod of each measurement.
  1. The objectives of strengthening the functions of the board of directors in the current year and the most recent year (for example, the establishment of an audit committee, the enhancement of information transparency, etc.) and the assessment of implementation status

The company has set up functional committees such as auditing and remuneration to review relevant proposals in accordance with its powers and submit them to the board of directors for resolution to improve its supervisory functions and strengthen management functions. Board members continue to participate in refresher courses related to corporate governance topics, enrich new knowledge and enhance communication to continuously enhance board functions.

Note 1: The name of a legal entity shareholder and its representative shall be disclosed.

Note 2: (a) If a director or supervisor being relieved of office before year end, it shall be notified as a remark. The actual rate of attendance shall be calculated according to the meetings held when he/she is at the post.

(b) If there is a re-election before year-end, the new directors and supervisors along with the original ones shall be disclosed, and the date of directors and supervisors being elected shall be stated. The actual rate of attendance shall be calculated according to the meetings held when they are at posts.

3.3.2 Audit Committee

The second session of the Audit Committee met for 8 times in 2019 (A), Independent directors are present as follows:

Title Name Attendance in
Person (B)		 By Proxy Attendance
Rate B/A (%)
(Note)		 Remarks
Independent
director		 Che-Ho Wei 8 0 100.00
Independent
director		 Tse-Jen Huang 8 0 100.00
Independent
director		 Yao-Ching Hsu 8 0 100.00

19

Other information required to be disclosed:
1.The operation of the Audit Committee is one of the following circumstances, should specify the date of the board,
period, the contents of the motion, the results of the resolutions of the Audit Committee and the handling of the
opinions of the Audit Committee.
(1) The matters listed in Article 14.5 of the Securities Exchange Act.
(2) Except for the foregoing, other unapproved by the Audit Committee, and more than two-thirds of all directors
agreed to the matter.
The Audit
Committee
The contents of the motion and follow-up
The matters
listed in Article
14.5 of the
Securities
Exchange Act
unapproved by the
Audit Committee,
and more than
two-thirds of all
directors agreed to
the matter
The 5th Audit
Committee of the
2nd Session
108.01.22
1. The Company's "Procedure for
Obtaining or Disposing of Assets"
revision discussion.
v
None
Audit committee resolution results: All members of the Audit Committee
agreed to adopt.
The Company's handling of the opinions of the Audit Committee：
All attendees agree topass.
The 6th Audit
Committee of the
2nd Session
108.03.20
1. 2018 the report on the results of the
internal control self-assessment report
and the statement of the internal control
system.
v
None
2. Discussion on the revision of the
company's "Endorsement Guarantee
Procedure"
v
None
3. The Company's "Discussion on the
Operation of Fund Loan and Others"
Discussion.
v
None
4. Report on the status of budget
implementation in the fourth quarter of
2018 and discussion of the 2018 financial
statements.
V
None
5. The discussion of consolidated
financial statements in 2018.
v
None
Audit committee resolution results: All members of the Audit Committee
agreed to adopt.
The Company's handling of the opinions of the Audit Committee：
All attendees agree topass.
The 10th Audit
Committee of the
Second Session
108.11.12
1. Discussion on the revision of the
company's management measures.
v
None
Audit committee resolution results: All members of the Audit Committee
agreed to adopt.
The Company's handling of the opinions of the Audit Committee：
All attendees agree topass.
The Second
Session of the
Twelfth Audit
Committee
108.12.25
1. 2020 Accountant Appointment and
Independence Assessment Discussion.
v
None
Audit committee resolution results: All members of the Audit Committee
agreed to adopt.
The Company's handling of the opinions of the Audit Committee：		 Other information required to be disclosed:
1.The operation of the Audit Committee is one of the following circumstances, should specify the date of the board,
period, the contents of the motion, the results of the resolutions of the Audit Committee and the handling of the
opinions of the Audit Committee.
(1) The matters listed in Article 14.5 of the Securities Exchange Act.
(2) Except for the foregoing, other unapproved by the Audit Committee, and more than two-thirds of all directors
agreed to the matter.
The Audit
Committee
The contents of the motion and follow-up
The matters
listed in Article
14.5 of the
Securities
Exchange Act
unapproved by the
Audit Committee,
and more than
two-thirds of all
directors agreed to
the matter
The 5th Audit
Committee of the
2nd Session
108.01.22
1. The Company's "Procedure for
Obtaining or Disposing of Assets"
revision discussion.
v
None
Audit committee resolution results: All members of the Audit Committee
agreed to adopt.
The Company's handling of the opinions of the Audit Committee：
All attendees agree topass.
The 6th Audit
Committee of the
2nd Session
108.03.20
1. 2018 the report on the results of the
internal control self-assessment report
and the statement of the internal control
system.
v
None
2. Discussion on the revision of the
company's "Endorsement Guarantee
Procedure"
v
None
3. The Company's "Discussion on the
Operation of Fund Loan and Others"
Discussion.
v
None
4. Report on the status of budget
implementation in the fourth quarter of
2018 and discussion of the 2018 financial
statements.
V
None
5. The discussion of consolidated
financial statements in 2018.
v
None
Audit committee resolution results: All members of the Audit Committee
agreed to adopt.
The Company's handling of the opinions of the Audit Committee：
All attendees agree topass.
The 10th Audit
Committee of the
Second Session
108.11.12
1. Discussion on the revision of the
company's management measures.
v
None
Audit committee resolution results: All members of the Audit Committee
agreed to adopt.
The Company's handling of the opinions of the Audit Committee：
All attendees agree topass.
The Second
Session of the
Twelfth Audit
Committee
108.12.25
1. 2020 Accountant Appointment and
Independence Assessment Discussion.
v
None
Audit committee resolution results: All members of the Audit Committee
agreed to adopt.
The Company's handling of the opinions of the Audit Committee：		 Other information required to be disclosed:
1.The operation of the Audit Committee is one of the following circumstances, should specify the date of the board,
period, the contents of the motion, the results of the resolutions of the Audit Committee and the handling of the
opinions of the Audit Committee.
(1) The matters listed in Article 14.5 of the Securities Exchange Act.
(2) Except for the foregoing, other unapproved by the Audit Committee, and more than two-thirds of all directors
agreed to the matter.
The Audit
Committee
The contents of the motion and follow-up
The matters
listed in Article
14.5 of the
Securities
Exchange Act
unapproved by the
Audit Committee,
and more than
two-thirds of all
directors agreed to
the matter
The 5th Audit
Committee of the
2nd Session
108.01.22
1. The Company's "Procedure for
Obtaining or Disposing of Assets"
revision discussion.
v
None
Audit committee resolution results: All members of the Audit Committee
agreed to adopt.
The Company's handling of the opinions of the Audit Committee：
All attendees agree topass.
The 6th Audit
Committee of the
2nd Session
108.03.20
1. 2018 the report on the results of the
internal control self-assessment report
and the statement of the internal control
system.
v
None
2. Discussion on the revision of the
company's "Endorsement Guarantee
Procedure"
v
None
3. The Company's "Discussion on the
Operation of Fund Loan and Others"
Discussion.
v
None
4. Report on the status of budget
implementation in the fourth quarter of
2018 and discussion of the 2018 financial
statements.
V
None
5. The discussion of consolidated
financial statements in 2018.
v
None
Audit committee resolution results: All members of the Audit Committee
agreed to adopt.
The Company's handling of the opinions of the Audit Committee：
All attendees agree topass.
The 10th Audit
Committee of the
Second Session
108.11.12
1. Discussion on the revision of the
company's management measures.
v
None
Audit committee resolution results: All members of the Audit Committee
agreed to adopt.
The Company's handling of the opinions of the Audit Committee：
All attendees agree topass.
The Second
Session of the
Twelfth Audit
Committee
108.12.25
1. 2020 Accountant Appointment and
Independence Assessment Discussion.
v
None
Audit committee resolution results: All members of the Audit Committee
agreed to adopt.
The Company's handling of the opinions of the Audit Committee：		 Other information required to be disclosed:
1.The operation of the Audit Committee is one of the following circumstances, should specify the date of the board,
period, the contents of the motion, the results of the resolutions of the Audit Committee and the handling of the
opinions of the Audit Committee.
(1) The matters listed in Article 14.5 of the Securities Exchange Act.
(2) Except for the foregoing, other unapproved by the Audit Committee, and more than two-thirds of all directors
agreed to the matter.
The Audit
Committee
The contents of the motion and follow-up
The matters
listed in Article
14.5 of the
Securities
Exchange Act
unapproved by the
Audit Committee,
and more than
two-thirds of all
directors agreed to
the matter
The 5th Audit
Committee of the
2nd Session
108.01.22
1. The Company's "Procedure for
Obtaining or Disposing of Assets"
revision discussion.
v
None
Audit committee resolution results: All members of the Audit Committee
agreed to adopt.
The Company's handling of the opinions of the Audit Committee：
All attendees agree topass.
The 6th Audit
Committee of the
2nd Session
108.03.20
1. 2018 the report on the results of the
internal control self-assessment report
and the statement of the internal control
system.
v
None
2. Discussion on the revision of the
company's "Endorsement Guarantee
Procedure"
v
None
3. The Company's "Discussion on the
Operation of Fund Loan and Others"
Discussion.
v
None
4. Report on the status of budget
implementation in the fourth quarter of
2018 and discussion of the 2018 financial
statements.
V
None
5. The discussion of consolidated
financial statements in 2018.
v
None
Audit committee resolution results: All members of the Audit Committee
agreed to adopt.
The Company's handling of the opinions of the Audit Committee：
All attendees agree topass.
The 10th Audit
Committee of the
Second Session
108.11.12
1. Discussion on the revision of the
company's management measures.
v
None
Audit committee resolution results: All members of the Audit Committee
agreed to adopt.
The Company's handling of the opinions of the Audit Committee：
All attendees agree topass.
The Second
Session of the
Twelfth Audit
Committee
108.12.25
1. 2020 Accountant Appointment and
Independence Assessment Discussion.
v
None
Audit committee resolution results: All members of the Audit Committee
agreed to adopt.
The Company's handling of the opinions of the Audit Committee：
The Audit
Committee		 The contents of the motion and follow-up
The matters
listed in Article
14.5 of the
Securities
Exchange Act		 unapproved by the
Audit Committee,
and more than
two-thirds of all
directors agreed to
the matter
The 5th Audit
Committee of the
2nd Session
108.01.22		 1. The Company's "Procedure for
Obtaining or Disposing of Assets"
revision discussion.		 v None
Audit committee resolution results: All members of the Audit Committee
agreed to adopt.
The Company's handling of the opinions of the Audit Committee：
All attendees agree topass.
The 6th Audit
Committee of the
2nd Session
108.03.20		 1. 2018 the report on the results of the
internal control self-assessment report
and the statement of the internal control
system.		 v None
2. Discussion on the revision of the
company's "Endorsement Guarantee
Procedure"		 v None
3. The Company's "Discussion on the
Operation of Fund Loan and Others"
Discussion.		 v None
4. Report on the status of budget
implementation in the fourth quarter of
2018 and discussion of the 2018 financial
statements.
V		 None
5. The discussion of consolidated
financial statements in 2018.		 v None
Audit committee resolution results: All members of the Audit Committee
agreed to adopt.
The Company's handling of the opinions of the Audit Committee：
All attendees agree topass.
The 10th Audit
Committee of the
Second Session
108.11.12		 1. Discussion on the revision of the
company's management measures.		 v None
Audit committee resolution results: All members of the Audit Committee
agreed to adopt.
The Company's handling of the opinions of the Audit Committee：
All attendees agree topass.
The Second
Session of the
Twelfth Audit
Committee
108.12.25		 1. 2020 Accountant Appointment and
Independence Assessment Discussion.		 v None
Audit committee resolution results: All members of the Audit Committee
agreed to adopt.
The Company's handling of the opinions of the Audit Committee：

20

All attendees agree to pass.

  1. If there is any avoidance of motions in conflict of interest by Independent Director, the Independent Directors’ names, contents of motions, causes for avoidance and voting should be specified: None. 3. The communication between the independent director and the internal audit manager and the accountant (should include the company's financial, business conditions to communicate matters, methods and results): (1) The accountants of the Company made an assessment of the year 2019 on March 20, 2019, May 13, 2019, August 13, 2019, and November 12, 2019. Fourth quarter and the first to third quarters of 2019, the results of the combined financial report review or review will be communicated. (2) The internal audit supervisors of the Company regularly report with the independent directors on the implementation of the internal audit plan and the implementation of the tracking report, for the implementation of the audit business and the results are fully communicated. (3) The independent directors of the Company may at any time require the visa accountants to examine the financial statements (including the consolidated financial statements) and other relevant laws and regulations, report and communicate to independent directors.

Note:

*If an independent director resigns before the end of the year, the resignation date should be indicated in the remarks column. The actual attendance rate (%) is calculated based on the number of audit committee meetings and the actual number of attendances during his tenure.

  • Before the end of the year, if an independent director is reelected, the new and old independent directors should be filled in, and the remarks column indicates that the independent director is old, new or re-elected and the date of re-election. The actual attendance rate (%) is calculated based on the number of audit committee meetings during his tenure and his actual number of attendance.

21

3.3.3 Corporate Governance Implementation as Required by Taiwan Financial Supervisory Commission

Item Implementation Status (Note 1) Implementation Status (Note 1) Implementation Status (Note 1) Difference to “Corporate
Governance Best Practice
Principles for TWSE/GTSM
Listed Companies”
Y N Summary
1. Formulation of its own corporate governance principles V Sunplus and its subsidiaries Generalplus for the establishment of a good corporate governance system, participate in the "Code of Practice for
Corporate Governance of Listed OTC", the Company's Code of Corporate Governance Practices, and has been disclosed at the Public Information
Observatory and the company's website.
The rest of the subsidiaries has not formulated the related principles, however all of our rules and procedures are based on laws and regulations
stipulated byauthorities in charge.		 No major Difference
2. Shareholding Structure and Shareholders’ Rights
1) The way handling shareholders’ suggestions or
disputes
2) The Company’s possession of major shareholders list
and the list of ultimate owners of these major
shareholders
3) Risk management mechanism and fire wall between
the Company and its affiliates
4) Disclosure agreement to prohibit that those insiders
may not take advantage of undisclosed information of
which they have learned to engage in insider trading.		 V
V
V
V		 (1) Sunplus and its subsidiaries Generalplus, Sunext and Sunplus Innovation Commission by the stock agency on behalf of the relevant business,
and according to the law to establish a complete spokesman system. The Company and Generalplus and set up Investor Relations Responsible
Personnel responsible for handling shareholder recommendations and disputes related matters.
Unlisted Subsidiaries are responsible for handling shareholders' opinions, doubts and disputes.
(2) The Company and its subsidiaries Generalplus, and Sunplus Innovation through the shares of the agency, master and understand the structure
of major shareholders, and regularly declare the directors and managers of equity changes, to master the ultimate controlling shareholder of the
major shareholders and major shareholders. Other subsidiaries shares regularly view the register of members at the end of each month, to
master the ultimate controlling shareholder of the major shareholders and major shareholders.
(3) The Company and Sunplus Innovation have a " Relational transaction processing", Generalplus has a "Group Business and Related
Transactions", the remaining subsidiaries also have various management methods, for the relationship between the business transactions are
clearly defined, to achieve risk control and firewall mechanisms.
(4) The Company and its subsidiaries, Generalplus have formulated the "Internal Significant Information Disclosure and Prevention of Insider
Trading Management Procedures" and "Integrity Management Procedures and Behavior Guide”, and told the company insiders to strictly
follow, it is forbidden for insiders to use the unlisted information on the market to buy and sell securities.
Other subsidiaries advertise relevant laws and regulations to insiders from time to time.		 No major Difference
No major Difference
No major Difference
No major Difference
3. Composition and Responsibilities of the BOD
1)Boarddiversity policy
2) Other Functional Committees than Audit committee and
Compensation Committee
3)Whether the company has formulated the board
performance evaluation method and its evaluation
method, and conducts performance evaluation
annually and regularly, and reports the results of the
performance evaluation to the board of directors, and
applies it to individual directors ’salary and
nomination renewal.
4) Regular evaluation of external auditors’ independency		 V
V		 V
V		 (1)
A. Article 20 of the Company's Code of Practice on Corporate Governance (the ability of the board of directors as a whole) has clearly defined the
composition of the board of directors. In addition to being a director of a company manager, it is not appropriate to exceed one-third of the
board of directors. Operational, operational and development needs to develop an appropriate diversification approach. The nomination and
selection of the board of directors of the Company follows the requirements of the Articles of Association and adopts the nomination system
for candidates. In addition to assessing the eligibility of each candidate's academic experience, it also complies with the "Director's Election
Method" and the "Code of Corporate Governance" to ensure the directors. Diversity and independence of members.
B. The current board of directors of the company has seven seats:
(1) General directors: He holds a master's degree from the Institute of Electrical Engineering of Tsinghua University, a master's degree from
the Institute of International Enterprise Management of the Taiwan University, a bachelor's degree in accounting from the Cultural University,
and a Ph.D. in economics and taxation from Jinan University.
(2) Independent directors: composed of members such as Dr. Motor of the University of Washington in Seattle, EMBA of the Institute of
Finance and Finance of the Taiwan University of Science and Technology, and Master of Laws of Cornell University.
(3) Those who are longer than leaders, operational judgment, management, crisis management, and have industrial knowledge and
international market views include Huang Zhoujie, Zhan Wenxiong, and Shu Weiren; those who served as the chairman of the National
Science Council are Wei Zhehe; those who are longer than financial accounting tax have Huang Zeren And Lin Weimin; who is longer than
legal affairs, Xu Zhaoqing.
C. The company has 14% of employees with employee status and 43% of independent directors. An independent director has a term of office of
more than nine years, and the other two independent directors are appointed for a term of three to five years. One director is over 70 years old,
one is 60 to 69 years old, and five are under 60 years old.
The directors of each subsidiary also have different expertise in various fields, and indeed implement the policy of diversity of board
members.
(2) Sunplus and Genealplus have set up audit committee and compensation committee. The company shall set up other functional committee if
needed anytime.
(3) In the first quarter of 2009, the Company has passed the resolution of the Board of Directors and the Board of Directors to approve the “Board
Performance Evaluation Method”.
Subsidiaries have not yet formulated a board performance evaluation method, but they do not regularly review the functions of the board. In
the future, they will assess the feasibility of setting a board performance evaluation method based on the legal environment, company
operating conditions and management needs.
(4) The company’s accounting department conducts self-assessment of the independence of visa accountants once a year, and the assessed visa
accountants meet the company’s independence assessment standards(Note 2),andpassed the resolution of the Audit Committee and the		 No major Difference
No major Difference
No major Difference
No major Difference

22

Board of Directors on December 25, 2019.
Each subsidiary will assess the independence of the visa accountant at the end of the year, and the appointment of the accountant in the
resolution of the board of directors.
4. Whether the listed OTC company is equipped with
qualified and appropriate number of corporate
governance personnel, and designated corporate
governance directors, responsible for corporate
governance related matters (including but not limited to
providing directors and supervisors with the necessary
information to perform business, assisting directors and
supervisors to comply with laws and (According to the
law, handle matters related to the meetings of the board
of directors and shareholders 'meetings, produce the
minutes of the board of directors and shareholders'
meetings, etc.)?		 V The company's business execution focus in 2019:
(1) To consolidate the agenda of the meeting for the board of directors and the committee, specify the convening matters, and send the convening
notice to the directors or members seven days before the meeting, and provide sufficient meeting materials so that the participants can truly
understand the relevant information of the proposal; When directors or committee members or the legal persons of their representatives are
interested, they should also be reminded that their interests should be avoided.
(2) Responsible for issuing major messages or announcements of important resolutions after the day of the board meeting and the shareholders'
meeting to ensure the legality and correctness of the disclosed information, so as to protect the investor's transaction information parity
(3) Change registration of various operations of the company.
(4) Evaluate and purchase the "Director and Manager Liability Insurance" of the appropriate insurance amount and complete the insurance coverage,
and report the underwriting content to the board of directors.
(5) Irregularly provide relevant training information for directors, reminding them to complete the relevant hours of training and completing the
relevant declarations in accordance with the "Key Points for the Implementation of Director and Supervisor Training for Listed OTC Companies".
(6) Irregularly provide members of the board of directors with information on new ordinances or amendments related to directors' execution of
businesses, corporate governance or business operations.
(7) Review the compliance status of corporate governance evaluation indicators item by item each year, and propose improvement plans and
corresponding measures for the unscored indicators.
(8) According to the needs of directors, provide company business or financial and other operational information to maintain smooth communication
and communication between directors and business executives.		 No major Difference
5. Communication channel with Stakeholders (Including but
not limited to shareholders, employees, customers and
suppliers)		 V Sunplus and its subsidiaries maintain good relations with stakeholders including banks, suppliers, and other relevant parties. Sunplus, with a
principle of honesty, provides sufficient information about the Company’s operations and defends the Company’s lawful rights and interests.
The interests of the company's stakeholders are concerned about issues and communication methods (Note 3)
The Company and Lingtong Technology have set up stakeholder areas on the company's website. The remaining subsidiaries also provide detailed
contact information on the company's website. Interestedparties can contact thephone,letter,fax and email at anytime if necessary.		 No major Difference
6. Engaging professional shareholder services agent to
handle shareholders meetingmatters		 V Sunplus, Generalplus, Sunplus Innovation Technology : China Trust Commercial Bank Corporate Trust Operation and service Department
Sunext: SinoPac Securities Corporate Trust Operation and service Department		 No major Difference
7. Information Disclosure
1) Establishment of corporate website to disclose
information regarding the Company’s financials,
business, and corporate governance status
2) Other information disclosure channels (ex. English
website, appointing responsible people to handle
information collection and disclosure, appointing
spokesman, webcasting investors conference)
3) Whether the company announces and declares the
annual financial report within two months after the
end of the fiscal year, and announces and declares the
first, second, and third quarter financial reports and
the monthly operating situation within the prescribed
period.		 V
V		 V (1) Sunplus and Genealplus have established bilingual corporate website, managed by relevant departments to disclose Company’s financials,
business, and corporate governance status. Sunplus Innovation also have established bilingual corporate website to disclose the business and
product information.
(2) Sunplus and its subsidiaries have established English website.
Sunplus, Generalplus, and Sunplus Innovation Technology have assigned spokesperson, acting spokesperson and designated specialists to
disclose and collect the company’s information.
Other subsidiaries are responsible for the collection and disclosure of company information, there is currently no speaker yet.
(3) Although the company and its subsidiaries did not announce and declare the annual financial report within two months after the end of the fiscal
year, they still announced and declared the annual financial report and the first, second, and third quarter financial reports and the monthly
operating situation before the deadline specified by the decree.		 No major Difference
No major Difference
8. Other important information to facilitate better
understanding of the Company’s corporate governance
(such as human rights, employee rights, employee
wellness, community participation, social contribution,
community service, investor relations, supplier
relations, shareholders’ rights, customer relations, the
implementation of risk management policies and risk
evaluation measures, the implementation of
consumers/customers protection policies, and
purchasing insurance for directors and supervisors. ):		 V (1) Employee rights: Sunplus and its subsidiaries have made and followed the internal management procedures regarding employee rights under the
regulations of the Labor Standards Act and Gender Equality in Employment Act.
(2) Employee wellness: Sunplus and its subsidiaries have made and followed the internal management procedures regarding employee wellness.
(3) Investor relations: Sunplus and its subsidiaries have set a investor relations professionals to communicate with investors and disclose the
operations and financials.
(4) Supplier relations: Sunplus and its subsidiaries have good relationship with suppliers and manage the supply chains efficiently.
(5) Stakeholders: Sunplus and its subsidiaries respect all stakeholders and have established the channels to communicate with stakeholders.
(6) Directors and supervisors' training: The company and its subsidiaries encourage directors and supervisors to participate in continuing education
courses. The company announces the status of directors' training at the public information observatory.
(7) Implementation of risk management policies and risk evaluation measures: Internal rules and procedures are based on laws and regulations
stipulated by authorities in charge
(8) Customer: Sunplus and its subsidiaries provide best service to Customers based on internal rules and procedures
(9) Sunplus and Generalplus have taken liability insurance for directors and supervisors with respect to liabilities resulting from exercising their
duties in Sunplus and subsidiaries.		 No major Difference

23

  1. Please review the results of the corporate governance evaluation issued by the Corporate Governance Center of the Taiwan Stock Exchange Co., Ltd. in recent years, and to give priority to matters and measures that have not yet been improved: The improvement of 2019 years is as follows:

(1) The company has disclosed in the annual report the handling of the implementation of the integrity management policy for the year.

(2) The independent directors of the company have completed the training in accordance with the hours specified in the "Implementation Points for Directors and Supervisors of Listed OTC Companies. (3) The company has disclosed on the company's website and annual report the protection measures for employees' personal safety and working environment and their implementation. The other part has not been improved, and will be actively studied for improvement.

Note 1: Whether or not "yes" or "no" is checked, it should be stated in the summary description field.

24

Note 2: The evaluation criteria for the independence of the Company's accountants are as follows:

Sunplus Technology Accountant Independence Assessment Criteria

Sunplus Technology
Accountant Independence Assessment Criteria
Evaluation items Evaluation
result		 Whether it is
independent
1.Whether the accountant has a direct or significant indirect financial interest
relationship with the Company		 No Yes
2.Whether the accountant has a financing or guaranteeing action with the
Company or the directors of the Company		 No Yes
3.Whether the accountant has a close business relationship or potential
employment relationship with the Company		 No Yes
4.Whether the accountants and their members of the audit team are currently
directors or managers in the current or the last two years or have a significant
impact on the audit work
No		 Yes
5.Whether the accountant has provided non-audit services to the Company
that may directly affect the audit		 No Yes
6.Whether the accountant has any stock or other securities issued by the
Company		 No Yes
7.Whether the accountant has a conflict with the defendant of the Company or
on behalf of the Company in coordination with other third parties		 No Yes
8.Whether the accountant has a kinship with the directors, managers or
persons who have a significant impact on the audit		 No Yes

Note 3: The company's stakeholders pay attention to issues and communication methods:

Stakeholder Concerns Communication route Communication frequen Related records
Staff Salary, benefits, education, occupationa~~l~~
health and safety		 Staffcommunication meeting Once every six months Meetingrecord
High-levelsupervisor mailbox Irregular E-mail
Employeewelfare committee Irregular announcement
Labor RetirementReserves SupervisionCommittee Once perseason Meetingrecord
Internal promotion: E-mail, posters, electronic bulletin
board
Irregular		 E-mail, posters, announcements
Employee performanceinterview 2times a year Performance andFutureDevelopmentAnalysis
client Customerappeal Customercomplaints Customercomplaint case Notes / QualityAssurance / Customer AppealSystem
Customer satisfaction customer satisfaction survey 2 times a year Notes/Quality Insurance/Customer Satisfaction Survey System
Foreigndocument control
Product quality and hazardous substance
requirements
mail		 Irregular Notes / Quality Assurance / Customer Appeal System
Agent Bad quartersinventory Bad quartersinventory Quarterly GPMsystem
Outsourcing factory Green product requirements GPM system Report deadlines, new product releases, new
specification requirements
Notes / Quality Assurance / Audit Management System

Supplier management approach		 Outsourcing factory audit: For the new outsourcing
factory,itwilljointhe company before joining
When the new outsourcing factory joins the
company's supply chain
Notes / Quality Assurance / Audit Management System
Supplier management approach Outsourcing factory assessment: for the quality /
environmental assessment of existing outsourcing
plants

1 time a year		 Notes / Quality Assurance Department / Instrument Calibration
supplier Instrument calibration Annualcalibrationplan Monthly schedule Management System
Government
agencies		 Compliance Document round trip Irregular Official document
Green environmental compliance Official website announcement Irregular Website download
TechnologyExchange Meeting,E-mail Irregular E-mail, poster

25

3.3.4 Disclosure of Operations of the Company’s Compensation Committee:

1. Qualifications and Independence Analysis

Status(Not
e 1)		 Name With over 5 years of working experience and one of the following professional requirements With over 5 years of working experience and one of the following professional requirements With over 5 years of working experience and one of the following professional requirements Independent Status (Note 2) Independent Status (Note 2) Independent Status (Note 2) Independent Status (Note 2) Independent Status (Note 2) Independent Status (Note 2) Independent Status (Note 2) Independent Status (Note 2) Independent Status (Note 2) Independent Status (Note 2) Numbers of other public companies
concurrently serving on compensation
committee		 Remark
An instructor of higher position in a
department of commerce, law, finance,
accounting, or other departments related to the
Company’s business in a public or private
college or university		 A judge, public prosecutor, attorney, certified public
accountant, or other professional or technical specialist who
has passed a national examination and been awarded a
certificate in a profession necessary for the Company’s
business		 With an experience in commerce,
law, finance, accounting or other
specialties necessary to the
Company’s business		 1 2 3 4 5 6 7 8 9 10
Independent
Director		 Che-Ho Wei 1
Independent
Director		 Tse-Jen
Huang		 2
Independent
Director		 Yao-Ching
Hsu		 0

Note 1: The Status is identified by director, independent director and other.

  • Note 2: “  ” indicates the directors and supervisors meeting any of the following criteria during the term of office and two years before being elected.

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

  • (2) Directors and supervisors of non-company or related companies (but if the company and its parent company, subsidiary or subsidiary of the same parent company are independent directors established by this law or local state laws and regulations, they are not limited to this).

  • (3) Not the shareholder (with its relatives or under others’ names) who holds more than 1% shareholding of the total issued shares or ranked as the Top 10 shareholders.

  • (4) Not a manager listed in (1) or a spouse, relative within the second parent, or direct blood relative within the third parent, etc.

  • (5) Directors, supervisors or directors of corporate shareholders who do not directly hold more than 5% of the company's total issued shares, hold the top five shares, or appoint representatives to act as company directors or supervisors in accordance with Article 27, paragraph 1 or 2, of the Company Law Employee (but if the independent directors established by the company and its parent company, subsidiary company or subsidiary of the same parent company in accordance with this law or local national laws and regulations are concurrently held by each other, it is not limited to this).

  • (6) More than half of the shares that are not on the board of directors of the company or have voting rights are the directors, supervisors or employees of other companies controlled by the same person (but if it is the company or its parent company, subsidiary or subsidiary of the same parent company according to this (The independent directors established by the law or local national laws and regulations are mutually concurrent, not limited to this).

  • (7) Directors (directors), supervisors (supervisors) or employees of other companies or institutions that are not the same person or spouse with the company's chairman, general manager or equivalent, but if the company and its parent company, subsidiary Or independent directors set up by subsidiaries of the same parent company in accordance with this law or local national laws shall not be limited to this).

  • (8) Directors (directors), supervisors (supervisors), managers or shareholders holding more than 5% of a particular company or institution that does not have financial or business dealings with the company The above does not exceed 50%, and the independent directors established by the company and its parent company, subsidiary company or subsidiary of the same parent company in accordance with this law or local national laws and regulations concurrently serve each other.

(9) Professionals, sole proprietorships, partnerships, companies or institutions that do not provide audits for companies or related companies or business, legal, financial, accounting and other related services that do not exceed NT $ 500,000 in cumulative compensation in the past two years Business owners, partners, directors (directors), supervisors (supervisors), managers and their spouses. However, members of the Salary and Compensation Committee, Public Acquisition Review Committee, or M & A Special Committee that perform their duties in accordance with the relevant laws and regulations of the Securities Exchange Act or the Corporate M & A Act are not limited to this.

  • (10) There is not one of the circumstances in Article 30 of the Company Law.

2. Operation

  1. BOD appointed three independent director to be members of compensation committee.

  2. The term of office is 3 years from June 11th 2018. The fourth salary remuneration committee of the 2019th meeting meets four times(A), membership qualifications and attendance are as follows:

Title Name Attendance in Person(B) By Proxy Attendance Rate(B/A) (%) (Note) Remarks
Convener Che-Ho Weii 4 0 100
Member Tse-Jen Huang 4 0 100
Member Yao-Ching Hsu 4 0 100
Other information required to be disclosed:
1. The BOD has adopted the proposal by compensation committee without dissent
2. Theparticipated members have approved the resolutions bycompensation committee. without dissent

  • Note 3: (a) If the member being relieved of office before year end, it shall be notified as a remark. The actual rate of attendance shall be calculated according to the meetings held when he/she is at the post.

  • (b) If there is a re-appointment before year-end, the new member along with the original ones shall be disclosed, and the date of member being appointed shall be stated. The actual rate of attendance shall be calculated according to the meetings held when he/she is at the post.

26

3.3.5 Social Responsibilities Implementation Status (such as environment protection, community participation, contribution to community, social service, charity, consumer rights, human rights and other social responsibilities):


responsibilities):
Item Implementation Status (Note 1) Deviations from “Corporate Social Responsibility Best
Practice Principles for TWSE/GTSM Listed Companies”
and reasons
Y N Summary (Note 2)
1. Does the company conduct risk assessments on
environmental, social and corporate governance issues
related to the company's operations and formulate relevant
risk management policies or strategies based on the principle
of materiality?(Note 3).		 V The company and its subsidiaries conduct risk assessments on environmental, social and corporate governance issues related to
operations through the operation of various management systems. The latest risk assessment date of the company was June 28,
2019.		 No major Difference
2.
Does the company set up a full-time (part-time) unit that
promotes corporate social responsibility, and the board of
directors authorizes the senior management to handle it, and
reports the handling situation to the board of directors.		 V In order to improve the management of corporate social responsibility, the company sets up a part-time unit that promotes
corporate social responsibility. It is responsible for the proposal and implementation of corporate social responsibility policies,
systems, or related management policies and specific promotion plans, and regularly reports to the board of directors. The last
time the company reported to the board of directors was on December 25, 2019.
Although each subsidiary has not set up a full-time (part-time) unit to promote social responsibility, it has spared no effort in
environmentalprotection and related social responsibilityactivities.		 No major Difference
3. Environmental issues
(1) Whether the company establishes an appropriate
environmental management system according to its
industrial characteristics.
(2) Whether the company is committed to improving the
utilization efficiency of various resources and using recycled
materials with low impact on environmental load.
(3) Whether the company assesses the potential risks and
opportunities of climate change to the company now and in
the future, and adopts measures to deal with climate-related
issues.
(4) Does the company count greenhouse gas emissions,
water consumption and total weight of waste in the past two
years, and formulate policies for energy conservation and
carbon reduction, greenhouse gas reduction, water and other
waste management.		 V (1) The company and its subsidiaries attach great importance to environmental management. At present, the company has
passed ISO14001, ISO45001 and TOSHMS environmental protection and occupational safety and health management
system certification, and the system operation is performed by the chief auditor of each management system at a standard
that is superior to the management system. management. The company and Generalplus Technology have set up
occupational safety and health special units and management personnel in accordance with the provisions of the
Occupational Safety and Health Law to implement statutory occupational safety and health management.
(2) The company and its subsidiaries have announced paperless operations and the use of power-saving lamps and
water-saving appliances, and at the same time implementing the policy of turning off lights and saving water. And
through the optimization of factory facilities operating system and actively promote various waste reduction activities,
increase the operational efficiency of the factory affairs system and reduce the impact on the environment; the company
and its subsidiaries comply with relevant environmental protection laws, actively respond to resource recovery and
classification, and promote Use various recycled materials and packaging materials for reuse to reduce the impact on the
environment.
(3) The IC design industry is located in the upstream of the semiconductor industry. The company and its subsidiaries have no
relevant manufacturing procedures. If the substantial risks caused by climate change should be caused only by the
increase in electricity and water demand for air conditioning and office lighting Increased costs, but through the
optimization of factory facilities and operating systems to reduce energy consumption and environmental impact; the
company and its subsidiaries continue to promote semiconductor high-end process technology and practice Moore's Law
in order to save chip The consumption of energy, in turn, drives the use of electrical energy in downstream consumer
electronics terminal products. In product design, provide more energy-saving solutions to increase product adoption.
(4) According to the ISO14064 standard, the company uses the 100th year of the Republic of China as the base year for
inventory, and conducts self-inspection of greenhouse gas emissions every year. The environmental safety and health
management policies formulated by the company include the contents of "controlling risks, preventing disasters" and
"energy saving, waste reduction and sustainable environment".		 No major Difference
No major Difference
No major Difference
No major Difference
4. Social issues
(1) Has the company formulated relevant management
policies and procedures in accordance with relevant
regulations and international human rights conventions?
(2) Whether the company has formulated and implemented
reasonable employee welfare measures (including salary,
vacation and other benefits), and appropriately reflected the
operating performance or results in employee compensation.		 V
V		 (1) The company and its subsidiaries abide by labor-related laws and regulations and formulate relevant work rules to protect
employees ’rights and provide information for employees to understand their rights and interests.
(2) The company's compensation and benefits are positioned to be better than the market average, to provide competitive salary
and compensation to attract talents, and to encourage existing employees and stabilize excellent talents.
The company and its subsidiaries provide a leave-giving system that is superior to the law, such as special days off the law, 10
days of paid sick leave per year, and 19 national holidays and anniversaries.
In accordance with the "Organization Guidelines for Employee Welfare Committees" promulgated by the Labor Commission,
the Company invites various departments to appoint members to form Employee Welfare Committees to coordinate the
company's welfare committee funds and promote various welfare measures. The provision ratio has always been 0.15% of
revenue (the highest statutory ratio), so that the Fu Committee can plan more diverse and interesting welfare projects.
The overall rewards paid by the company and its subsidiaries each year will be determined based on the company's overall
operating goals,annualprofitability,and employeeperformance and investment levels. Before Julyof eachyear,the company		 No major Difference
No major Difference

27

(3) Whether the company provides a safe and healthy
working environment for employees, and regularly
implement safety and health education for employees.
(4) Whether the company has established an effective career
development training program for employees.
(5) Whether the company complies with relevant
regulations and international standards on customer health
and safety, customer privacy, marketing and labeling of
products and services, and formulates relevant consumer
protection policies and appeal procedures.
(6) Whether the company has formulated supplier
management policies, requiring suppliers to follow relevant
regulations on environmental protection, occupational
safety and health or labor human rights, and their
implementation.		 V
V
V
V		 will measure the overall salary level of the same industry in the market and the employees' personal performance, future
development and other relevant principles, and appropriately adjust the salary for colleagues.
Annual employee compensation must be approved by the board of directors and reported at the shareholders ’meeting, and
disclosed in the company ’s annual report.
(3) The company and its subsidiaries provide facilities and environments that are superior to occupational safety and health laws
and regulations. Set up special organizations and personnel in accordance with the law, implement environmental safety and
health management related matters, and pass ISO14001, ISO45001 and TOSHMS environmental and occupational safety and
health management systems. The workplace is automatically inspected regularly to ensure the safety of employees, the
environment and equipment. And provide regular health checks that are better than the legal requirements. Provide a good
environment for employee career development, provide a variety of education and training programs.
(4) The human resources department of the company and its subsidiaries has a complete training plan for the development of
colleagues ’careers, so as to ensure that colleagues can perform their duties in existing positions and learn the necessary skills
for promotion.
(5) The marketing and labeling of products and services by the company and its subsidiaries follow the local regulations and
international standards of the company's customers and suppliers.
(6) The company and its subsidiaries have long been aware of the environmental and social responsibility of the supply chain,
and the requirements for suppliers are not limited to performance and quality. Colleagues in relevant departments regularly
audit and liaise with suppliers to ensure that suppliers' environmental protection, occupational safety and health or labor human
rights and other issues comply with relevant standards and maintain their due standards. If the supplier does not meet the
regulations, it needs to improve and meet the standard within the specified time. If it cannot be improved, it will find other
supplierswho can meet the expectations of the ethical and environmental standards of the companyand its subsidiaries.		 No major Difference
No major Difference
No major Difference
No major Difference
5. Does the company make reference to internationally-used
report preparation standards or guidelines to prepare
corporate social responsibility reports and other reports that
disclose the company's non-financial information? Whether
the pre-report report obtained the confidence or assurance
opinion of the third-party verification unit.		 V The company compiles and publishes the "Corporate Social Responsibility Report" in accordance with the Global Reporting
Initiative 2017 new version of the GRI Standards (GRI Sustainability Reporting Standards, GRI Standards) to disclose to
stakeholders the operating performance outside of finance, including corporate governance, green processes With
environmentally friendly management measures, employee occupational safety software and hardware equipment updates,
employee education and training, welfare policies and social welfare implementation results, it demonstrates the corporate
vision and mission of sustainable operation. The publication media is the official website and the Taiwan Stock Exchange Open
Information Observatory, where both shareholders and stakeholders can conveniently and quickly obtain transparent
non-financial performance information. The previous report has not obtained the confidence or assurance opinions of the
third-party verification unit.
Although each subsidiary has not prepared a corporate social responsibility report, it has spared no effort in environmental
protection and related social responsibilityactivities in the company's senior managementpolicies.		 No major Difference
6. If the company has its own corporate social responsibility code based on the "Code of Practice for Corporate Social Responsibility of Listed Companies", please state the difference between its operation and the established code:
The company has formulated the "Corporate Social Responsibility Code", which has internal regulations governing related issues such as sustainable management, environmental protection, employee rights, social welfare and related information disclosure.
Each subsidiary has not clearly formulated a corporate social responsibility policy, but related issues such as sustainable management, environmental protection, employee rights, social welfare, and related information disclosure are all regulated by internal systems.
In order to fulfill corporate social responsibilities, the company and its subsidiaries will make occasional contributions to environmental protection, social contribution, social services, social welfare, consumer rights, human rights, safety and health and other social
responsibilityactivities.
9. Other important information to facilitate better understanding of the Company’s corporate social responsibility practices
(1) Sunplus and the subsidiaries for the professional IC design company, IC research and development and design based, department of non-polluting industries, there is no environmental pollution situation.
(2) Sunplus and its subsidiaries are actively involved in relevant activities related to social welfare from time to time.
(3) Based on the concept of professional services, the Company and its subsidiaries have formulated the relevant guidelines for the implementation of the relevant customers, in order to seek the fastest solution to customer questions.
(4) Sunplus and its subsidiaries are responsible for the management of the Company's employees in accordance with the Labor Standards Act, and by hand to deal with the work of employees, to protect its basic rights and interests.
(5) The company and its subsidiaries refer to occupational safety and health related laws and regulations to handle safety and health work to ensure workers' health and safety.
(6)The companyimplements workplace and worker health and safetycare through ISO45001 international occupational safetyand health management system and TOSHMS Taiwan occupational safetyand health management system.

Note 1: If the operation is checked "Yes", please explain the important policies, strategies, measures and implementations adopted; if the operation is checked "No", please explain the reasons and explain the plan for the future adoption of relevant policies, strategies and measures painting. Note 2: The company has prepared corporate social responsibility report, the abstract statement can be used to indicate the way in which the corporate social responsibility report is reviewed and the index page is replaced. Note 3: The principle of materiality refers to those who have a significant influence on the company's investors and other stakeholders in relation to environmental, social and corporate governance issues.

3.3.6 Implementation of Ethical Corporate Management

Sunplus discloses financial reports according to the regulations of the government.

In order to enhance transparency and protect shareholders’ rights and interests, Sunplus announces financial results and business information on TSE and Sunplus’ websites regularly.

28

The situation and reasons for the implementation of integrity management and the difference with the listed company's code of integrity management

Item Implementation Status (Note 1) Implementation Status (Note 1) Implementation Status (Note 1) Deviations from “Ethical
Corporate Management Best
Practice Principles for
TWSE/GTSM-Listed
Companies” and reasons
Y N Summary
1. Promulgation ethical corporate management principles
1) Has the company formulated the integrity management policy approved
by the board of directors, and stated in the regulations and external
documents the policies and practices of integrity management, and the
board and senior management's commitment to actively implement the
management policy.
2) Whether the company has established an assessment mechanism for the
risk of dishonesty, regularly analyzes and evaluates business activities
with a high risk of dishonesty in the business scope, and formulates a
plan to prevent dishonesty, and at least covers the "good faith
management of listed companies "Code" Article 7, Paragraph 2,
Prevention Measures.
3) Does the company clearly specify the operating procedures, behavior
guidelines, disciplinary punishment and grievance system in the plan to
prevent dishonesty, and implement it, and regularly review and revise
the pre-disclosure plan.		 V
V
V		 (1) The Company and Generalplus Technology have established the "Integrity Management Operation Procedures and Behavior
Guidelines" approved by the Board of Directors as a policy and practice for expressing integrity management, and the commitment
of the Board and management to actively implement the operation policies. The company and Lingtong Technology will also
publicly disclose the "Integrity Management Operation Procedures and Behavior Guide" and its related specifications at public
information observatories and the company's website.
The remaining subsidiaries uphold the business philosophy of "integrity", "creative", "quality", and "service", formulate various
management systems and methods within the company, and implement and review them from time to time.
(2) The company and Generalplus Technology have set up "integrity business operation procedures and behavior guidelines",
which clearly prohibits the provision or acceptance of improper benefits. The company also has a "whistleblowing system", and
Generalplus's official website has an online "whistleblowing system" to encourage the reporting of any illegal or violations of the
Code of Ethical Conduct or Code of Integrity. In addition, the company still requires colleagues with highly sensitive job
management, production centers, business and information units to sign a "corruption commitment"; when signing an annual dealer
contract with customers, they also sign a "declaration of integrity behavior"; According to the annual transaction amount, the
relevant suppliers shall sign the "Certificate of Integrity".
The rest of the subsidiaries have specified the reporting and punishment system for employees ’integrity behaviors in the“ Work
Rules ”, and through the effective implementation of internal control system to reduce the risk of dishonesty behaviors and take
preventive effect.
(3) The company and Generalplus Technology have respectively set up a "whistleblowing system", "employee ethical code of
conduct", "director and manager's code of ethical behavior", "handling methods for reporting illegal and unethical or dishonest
conduct" and "Integrity Management Operation Procedures and Conduct Guidelines", clearly stipulate the relevant operation
procedures and behavior guidelines for preventing dishonest behaviors. For colleagues to inquire at any time, we will also provide
relevant promotion for new employees through education courses.
For any suspected violations of business ethics and confirmed cases, the violators will be subject to severe disciplinary measures
including termination of employment or business relationships, and appropriate legal action will be taken in due course.
Subsidiary's "Work Rules" set out toprohibit dishonesty, punishment and appeal system forviolations of regulations.		 No major Difference
No major Difference
No major Difference
2. Implement integrity management
(1) Whether the company evaluates the integrity records of the
counterparties, and specifies the terms of integrity behavior in the
contract signed with the counterparties.
(2) Does the company set up a special unit under the board of directors to
promote corporate integrity management, and regularly (at least once a
year) report to the board of directors on its integrity management policies
and plans to prevent dishonest behaviors and supervision and
implementation.
(3) Does the company formulate a policy to prevent conflicts of interest,
provide appropriate reporting channels, and implement them.
(4) Whether the company has established an effective accounting system
and internal control system for the implementation of integrity
management, and the internal audit unit formulates the relevant audit plan
based on the assessment results of the risk of dishonesty, and checks the
compliance with the plan to prevent dishonesty, Or entrust an accountant
to perform the audit.
(5) Does the company regularly organize internal and external education
and training on integrity management.		 V
V
V
V
V		 (1) The "Integrity Operation Procedures and Behavior Guide" of the company and Generalplus Technology clearly states that
when signing a contract, it should fully understand the other party's integrity management status and incorporate the company's
integrity management policy into the contract terms. In addition, when the company signed an annual distributor contract with
customers since 2006, it also signed a "Certificate of Integrity"; the relevant suppliers, who defined the annual transaction
amount, also signed a "Certificate of Integrity".
The remaining subsidiaries carefully evaluate the legality of the counterparties through customer credit evaluation and supplier
management operations to avoid dishonest business activities.
(2) To improve the management of integrity management, the company and Generalplus Technology have appointed the
chairman's office as the special unit for promoting enterprise integrity management, responsible for formulating and promoting
integrity management policies and prevention plans. The dedicated unit regularly reports to the board of directors on the
implementation status in December. The last time the company reported to the board of directors was on December 25, 2008.
The remaining subsidiaries actively promote the corporate integrity management concept from top to bottom. In the future, they
will set up promotion units according to the actual situation of the company and report to the board of directors regularly.
In 2008, the company's integrity management policies and plans to prevent dishonesty and supervision and implementation:
1. Promote integrity policy
The company has set up an honesty policy advocacy zone to promote honesty management policies to employees and
implement core values and business philosophy based on honesty.
Newcomer training promotes the company ’s integrity policy and conducts tests to ensure that the newcomer understands the
company ’s integrity policy. A total of 32 people visited in 2008, about 14 hours and 40 minutes.
2. The contract stipulates the integrity management clause
When the company signed a distributor agreement in 2008 with its customers, it signed a "Certificate of Integrity" together with
its suppliers. According to the definition of annual transaction amount, the relevant suppliers also signed a "Certificate of
Integrity".
3. Sign a declaration of integrity		 No major Difference
No major Difference

29

The company requires colleagues in the management, production center, business and information units with high sensitivity in
their duties to sign the "Corruption Commitment Letter". A total of 11 copies were signed in 2019.
4. Establish a convenient reporting channel
The company has a "whistleblowing system" that clearly defines the reporting procedures and confidentiality mechanism, and
encourages internal and external personnel to report any illegal or violation of the Code of Ethical Conduct or Code of Integrity
Management. " As of the end of 2008, no letter of report was received.
(3) The communication channel between the employees of the company and its subsidiaries and the management level is
unblocked, and if any problems are found, they can be reported to the management level. In addition, the departments
responsible for the integrity of business-related matters are responsible for handling related matters in accordance with their
duties and laws to prevent conflicts of interest and provide appropriate statements about pipeline operations.
(4) The company, Generalplus Technology and Sunplus Innovation Technology have established an effective accounting system
and internal control system for the implementation of integrity management. Internal auditors regularly check the
implementation of the internal control system and implement the self-inspection system to ensure The effectiveness of the
internal control system shall serve as the basis for issuing the internal control system statement and shall be reported to the
board of directors for approval.
The parent company has prepared and implemented an annual audit plan for its subsidiaries based on risk analysis.
The company and Generalplus Technology have set up "integrity management operation procedures and behavior guidelines".
The built-in integrity management is in the corporate culture and is advertised at various meetings from time to time. In the
internal announcement, it also promotes the integrity management operation procedures and behavior guidelines to the
company's employees, and implements the company's core values and management philosophy based on integrity.
In 2008, the company proclaimed the company's integrity policy to new employees and conducted tests.
The remaining subsidiaries implement opportunity education in their daily business, and will organize education and training in
the future according to the company's practical situation.
(5) The company and Generalplus Technology have set up "integrity management operation procedures and behavior guidelines".
The built-in integrity management is in the corporate culture and is advertised at various meetings from time to time. In the
internal announcement, it also promotes the integrity management operation procedures and behavior guidelines to the
company's employees, and implements the company's core values and management philosophy based on integrity.
In 2008, the company proclaimed the company's integrity policy to new employees and conducted tests.
The remaining subsidiaries implement opportunity education in their daily business, and will organize education and training in
the future accordingto the company'spractical situation.		 No major Difference
No major Difference
No major Difference
3. Operation of the company's whistleblowing system
(1) Whether the company has set a specific reporting and reward system,
and established a convenient reporting channel, and assigned appropriate
personnel for the acceptance of the reported object.
(2)Has the company established the standard operating procedures for the
investigation of the complaint, follow-up measures to be taken after the
investigation is completed, and the relevant confidentiality mechanism?
(3) Whether the company has taken measures to protect the
whistleblowers from improper disposal due to the whistleblowing.		 V
V
V		 (1) The company has a "whistleblowing system", Generalplus Technology has "handling methods for reporting cases of illegal and
unethical or dishonesty", and the remaining subsidiaries have "employee complaint methods". The company and its subsidiaries
Appropriate persons in charge will be assigned to deal with them, as a convenient reporting channel for employees to report.
(2) The company and its subsidiaries all have relevant methods for reporting and appealing, which specify the procedures for
reporting, the follow-up measures to be taken after the investigation is completed, and the relevant confidentiality principles.
(3) The procedures for the protection of whistleblowers are clearly stipulated in the relevant reporting and appeal measures of the
company and its subsidiaries.		 No major Difference
No major Difference
No major Difference
4. Strengthen information disclosure
(1) Whether the company disclosed the content of its integrity
management code and promoted its effectiveness on its website and public
information observatory.		 V The company and Generalplus Technology have placed relevant regulations on integrity management on the company's internal website
for colleagues to inquire at any time. The company's external websites and public information observatories place annual reports and
corporate social responsibility reports, which also fully disclose relevant policy requirements and information on honest operation.		 No major Difference
5. If the company has its own code of integrity management in accordance with the "Code of Integrity Management of Listed OTC Companies", please state the difference between its operation and the code:
The companyand its subsidiaries and various manufacturers and organizations cooperate in accordance with theprinciple of integritymanagement.
6. Other important information that helps to understand the company's integrity management and operation situation: (such as the company reviewing and revising its integrity management code and other situations)
The company and its subsidiaries take honesty as the foundation, and strive for the integrity of all employees and are responsible to investors, customers and the society. The company has a mailbox for complaints and reports. If employees find any violation of the
principle of good faith or harm to the reputation of the company, they can complain or report through the Internet. In addition, the company and its subsidiaries and the relevant manufacturers and partners are mostly long-term cooperation, and clearly set a contract,
set uprelevant full-timepersonnel toparticipate,and maintain a long-term stable cooperative relationship.

Note 1: Whether the operation is checked "Yes" or "No", it should be stated in the summary description field.

3.3.7

Formulate Corporate Governance Rules and Regulations: (If the company has established corporate governance rules and related regulations, it should disclose its search methods)

The Company has a Code of Corporate Governance Practices, to protect the interests of shareholders, strengthen the functions of the board of directors, respect for the interests of stakeholders, to enhance the transparency of information, etc. are relevant norms, also for the Taiwan Stock Exchange Co., Ltd. for corporate governance review one by one to review the actual implementation of the assessment indicators, hoping to help companies gradually build a good corporate governance system, to enhance the effectiveness of corporate governance. The Company's corporate governance operation, please refer to this Annual Report, Corporate Governance Report III, Corporate Governance Operations (pages 21-51), for the Code of Corporate Governance Practices, please

30

contact our website.

3.3.8 Other Matters Needed to Improve the Company’s Implementation of Corporate Governance:

None

31

3.3.9 Internal Control System Execution Status and Information

a) Statement of Internal Control System

Sunplus Technology Co., Ltd. Statement of Internal Control System

Date: March 30th, 2020

Based on the findings of a self-assessment, Sunplus states the following with regard to our internal control system during January 1st – December 31st, 2019 :

Sunplus is fully aware that establishing, operating, and maintaining an internal control system are the responsibility of Board of Directors and management team. Sunplus has established such a system aimed at providing reasonable assurance regarding achievement of objectives in the following categories: (a) effectiveness and efficiency of operations (including profitability, performance, and protection of assets), (b) reliability of financial reporting, and (c) compliance with applicable laws and regulations.

An internal control system has inherent limitations. No matter how perfectly designed, an effective internal control system can only reasonable assurance of accomplishment for the three objectives mentioned above. Moreover, the effectiveness of an internal control system may be subject to changes of environment and circumstances. Nevertheless, Sunplus’ internal control system contains self-monitoring mechanisms, and Sunplus takes corrective actions whenever a deficiency is identified.

Sunplus evaluates the design and operating effectiveness of our internal control system based on “Regulations Governing the Establishment of Internal Control Systems by Public Companies” (herein below, the “Regulations”). The criteria adopted by the Regulations identify five components of internal control based on the process of management control: (a) control environment, (b) risk assessment, (c) control activities, (d) information and communication, and (e) monitoring. Each component further contains several items. Please refer to the Regulations for details.

Sunplus has evaluated the design and operating effectiveness of our internal control system according to the aforesaid criteria.

Based on the findings of the evaluation mentioned in the preceding paragraph, Sunplus believe that, during the year 2019 , our internal control system (including the supervision and management of subsidiaries), as well as our internal control to monitor the achievement of our objectives concerning operational effectiveness and efficiency, reliability of financial reporting, and compliance with applicable laws and regulations, were effective in design and operation, and reasonably assured the achievement of the above-stated objectives. This statement is an integral part of Sunplus’ annual report for the year 2019 and prospectus, and would be made public. Any falsehood, concealment, or other illegality in the content made public will entail legal liability under Article 20, 32, 171, and 174 of the “Securities and Exchange Law”.

This statement has been passed by the Board of Directors Meeting held on March 30th, 2020 , with all six attending directors expressing dissenting opinions, and the remainder all affirming the content of this statement.

Sunplus Technology Co., Ltd.

==> picture [106 x 39] intentionally omitted <==

Chou-Chye Huang Chairman& CEO

32

3.3.10 The Company’s Internal Control System Audit Report by External Auditors: Not applicable

3.3.11 Regulatory Authorities’ Legal Penalties to the Company, and the Company’s Resulting Punishment on Its Employees: None

3.3.12 Major Resolutions by the Shareholders’ Meetings and the Board of Directors Meetings

3.3.12 Major Resolutions by the Shareholders’ Meetings and the Board of Directors
Meetings		 3.3.12 Major Resolutions by the Shareholders’ Meetings and the Board of Directors
Meetings		 3.3.12 Major Resolutions by the Shareholders’ Meetings and the Board of Directors
Meetings		 3.3.12 Major Resolutions by the Shareholders’ Meetings and the Board of Directors
Meetings
2019 The implementation of the resolution of the shareholders' meeting
Date Decision
Maker		 Resolution matters and implementation
2019.06.10 Shareholders’
Meeting		 1. To recognize the Company's 2018 annual business report and financial
statements.
Implementation of the situation: The relevant bibliography has been filed with the
competent authority for filing and announcement in accordance with the relevant
laws and regulations.
2. To recognize the Company's 2018 earnings distribution case.
Implementation of the situation: No dividends allotted this year.
3. Through capital accumulation and cash.
Implementation of the situation: Proposed on July 21, 2019 for distributing base
date, August 09, 2019 is the date of payment (Distributary capital reserve of $.36
per share).
4. Approved the revision of the company's "procurement procedures for acquiring
or disposing of assets".
Implementation: Effective after the resolution of the shareholders' meeting.
5. Approved the revision of the company's "Endorsement Guarantee Procedure".
Implementation: Effective after the resolution of the shareholders' meeting.
6. Approved the revision of the company's "Measures for Fund Loan and Others'
Operation".
Implementation: Effective after the resolution of the shareholders' meeting.
7. Approved the case of lifting the restriction on competition of directors of the
company.
Implementation: Effective after the resolution of the shareholders' meeting.
2019 and as of the date of publication of the annual report of the board of directors important matters
Date Decision
Maker		 Case Result
2019.05.13 Board Meeting 1. Discussion on the consolidated financial
statements for the first quarter of 2019.		 After the chairman's consultation, all
the attending directors passed the case
without objection.
2019.08.13 Board Meeting 1. Discussion of the consolidated financial
statements in the second quarter of 2019.
2. Discussion on the distribution of
directors' remuneration in 2018.		 After the chairman consulted all the
directors present without objection,
they passed the case.
1. On the instruction of the chairman,
Wei Zhe and the independent director
shall act as the acting chairman. In
addition to avoiding the general
directors who did not participate in the
discussion and voting according to
law, the acting chairman consulted all
the independent directors present and
passed the proposal of the general
director's compensation without
objection.
2. In addition to evading independent
directors who did not participate in the
discussion and votingaccordingto

33

law, the general directors who were
consulted by the chairman in
consultation with all the directors
passed the proposal without objection
on the remuneration of independent
directors.
2019.11.13 Board Meeting 1. Discussion of the consolidated financial
statements for the third quarter of 2019.		 After the chairman consulted all the
attending directors without objection,
they passed the case.
2020.02.19 Board Meeting 1. The discussion on lifting the restriction
on competition of managers of the
company.
2. The 2009 general shareholders meeting
and the acceptance of the shareholders'
proposal discussion.		 After the chairman consulted all the
attending directors without objection,
they passed the case.
2020.03.30 Board Meeting 1. The company's 2008 employee
compensation and director compensation
distribution discussion.
2. Discussion of the consolidated financial
statements for 2008.
3. Discussion of the 2008 business report.
4. The discussion of the 2008 loss
allocation.
5. Handle the discussion of the capital
reserve allocation cash.
6. Discussion on lifting the restriction on
the competition of directors of the
company.
7. Discussion on the revision of the 2009
regular meetingof shareholders.		 In this case, the employee
compensation and director
compensation are determined by the
total compensation, but not the
individual compensation, so there is
no need to avoid interest. The case was
approved by the chairman after
consulting all the directors present
without objection.
After the chairman asked all the
attendees to pass the case without
objection.
2020.04.22 Board Meeting 1. Discussion on the adjustment of
employees 'compensation and directors'
compensation distribution in 2019.
2. Discussion on the revision of the 2009
regular meeting of shareholders.		 In this case, the employee
compensation and director
compensation are determined by the
total compensation, but not the
individual compensation, so there is
no need to avoid interest. The case was
approved by the chairman after
consulting all the directors present
without objection.
After the chairman consulted all the
attending directors without objection,
they passed the case.

3.3.13 The most recent year and as of the date of report publication the directors have different opinions and record or written statements by the board of directors through important resolutions, its main content:

None

34

  • 3.3.14 The most recent year and as of the date of report publication, the person related with financial report that resignation of summary of the situation. None

3.4 Audit Fees

Audit Firm Name of Auditor Name of Auditor Duration of auditing Remarks
Deloitte & Touche Zheng-Zhi Lin Yu-Feng Huang 2019.01.01~2019.12.31
Item
Amount		 Item
Amount		 Audit fee Non-audit fee Total
1. Under NT$2,000,000
2. NT$2,000,000~ NT$4,000,000
3. NT$4,000,000 ~ NT$6,000,000
4. NT$6,000,000 ~ NT$8,000,000
5. NT$8,000,000 ~ NT$10,000,000
6. Over NT$10,000,000

  • 3.4.1 Payment of visa accountants, visa accountants and their relationship between the firm's non-audit fees accounted for the proportion of the audit fee of more than one-fourth per cent, should disclose the amount of audit and non-audit fees and non-audit services: Not applicable.

  • 3.4.2 Replacement of accounting firms and replacement of annual audit fees paid to replace the previous year's audit fee reductions, should disclose the reduction, proportion and reason of the audit public expense: Not applicable.

  • 3.4.3 The audit fee is reduced by more than 15% over the previous year, should reduce the amount of audit fees, the proportion and reason: Not applicable.

3.5 Replacement of Auditors

3.5.1 About the former accountant

Change date Approved by the board of directors on December 25, 2019 Approved by the board of directors on December 25, 2019 Approved by the board of directors on December 25, 2019
Replace reason and
explanation		 Deloitte & Touche internal business transfer,since the from 2020 Zheng-Zhi
Lin and Yu-Feng Huang accountants replaced Zheng-Zhi Lin and Mei-Zhen
Cai accountants
The description was
terminated or not accepted
by the appointor or
accountant		 litigant
situation		 Accountant Appointed person
Proactively terminate the
appointment		 Not applicable
No longer accept (continue)
appointment

35

Opinions and Reasons for
Examining Check Reports
Other than Unqualified
Opinions within the Latest
Two Years		 The 2019 and 2018 annual review reports of the central bank issued
reservations. The relevant information of the investee companies whose main
series was included in the financial statements and equity methods of the some
non-substantial subsidiaries in the consolidated financial statements were based
on the financial reports unaudited by the accountants during the same period.
Recognize and expose.		 The 2019 and 2018 annual review reports of the central bank issued
reservations. The relevant information of the investee companies whose main
series was included in the financial statements and equity methods of the some
non-substantial subsidiaries in the consolidated financial statements were based
on the financial reports unaudited by the accountants during the same period.
Recognize and expose.		 The 2019 and 2018 annual review reports of the central bank issued
reservations. The relevant information of the investee companies whose main
series was included in the financial statements and equity methods of the some
non-substantial subsidiaries in the consolidated financial statements were based
on the financial reports unaudited by the accountants during the same period.
Recognize and expose.
Is there any disagreement
with the issuer		 Yes Accounting principles or practices
Financial report disclosure
Check the scope or steps
Others
No
Instructions
Other disclosures
(The first to fourth heads of
Article 10, paragraphs 6 to
7 should be disclosed)
No

36

3.5.2 About Succession Accountant

Office name Deloitte & Touche
Accountant's name Zheng-Zhi Lin、Mei-Zhen Cai
Date of appointment Approved by the board of directors on December 25, 2019
Pre-appointment accounting for specific
transactions
Treatment methods or accounting
principles and
Financial report may issue opinions
Consultation and results		 No
Successor Accountant to Former
Accountant
Written opinions on different opinions		 No
  • 3.5.3 Reply from former accountants to the first and second items of Article 10, paragraph 5 of this standard: None.

3.6 Chairman, Presidents, and Managers in Charge of Finance and

Accounting Who Held a Position in Sunplus’ Independent Audit Firm or Its Affiliates during the Recent Year:

Not applicable.

37

3.7 Net Change in Shareholding and Net Changes in Shares Pledged by Directors, Management, and Shareholders with 10% Shareholding or More

3.7.1 Net Change in Shareholding and Net Changes in Shares Pledged by Directors, Management, and Shareholders with 10% Shareholding or More

Unit: Shares


Unit: Shares
Unit: Shares
Title Name 2019 Ended of April 14th, 2020
Shareholding
Increased
(decreased)		 Shares
Pledged
(Released)		 Shareholding
Increased
(decreased)		 Shares
Pledged
(Released)
Chairman& CEO Chou-Chye Huang 0 0 0 0
Director Global View Co.,Ltd. 0 0 0 0
Director Wen-ShiungJan 0 0 0 0
Director Wei-Min Lin 0 0 0 0
Independent Director Che-Ho Wei 0 0 0 0
Independent Director Tse-Jen Huang 0 0 0 0
Independent Director Yao-ChingHsu 0 0 0 0
VP Wayne Shen 0 0 0 0
Director of Finance &
AccountingDivision		 Shu-Chen Cheng 0 0 0 0
AVP Alex Chang 0 0 0 0
AVP Jason Lin 0 0 0 0
AVP Michael Su 0 0 0 0

3.7.2 Stock Trade

Name
(Note 1)		 Name
(Note 1)		 Transfer
Reason		 Transfer
Reason		 Transaction
Date		 Transaction
Date		 Transaction
Date		 Name of
Counter Party		 Name of
Counter Party		 Nature of
Relationship		 Nature of
Relationship		 Amount of
Shares		 Amount of
Shares		 Transaction
Price		 Transaction
Price
- - - - - - -
3.7.3 Shares Pledge with Related Parties
Ended of April 14th,2020
Name
(Note 1)		 Reason of
Pledge
(Note 2)
Date of
Change		 Name of
Counter
Party		 Nature of
Relationship
Amount
of Shares		 Percentage
of
Shareholding		 Percentage
of Shares
Pledge		 Transaction
Price
- - - - - - - - -

Note 1: Including Directors, mangers and shareholders holding more than 10%

Note 2: Reasons for shares pledged or released

38

3.8 Top 10 Shareholders & Related Parties

Name Current
Shareholding		 Current
Shareholding		 Shareholding under
Spouse & Minor		 Shareholding under
Spouse & Minor		 Shareholding
under
Others’ Name		 Shareholding
under
Others’ Name		 Relationship with
related-parties		 Relationship with
related-parties
Amount
of Shares		 Holding
%		 Amount of
Shares		 Holding
%		 Amount
of
Shares		 Holding
%		 Name Relationship
Chou-Chye Huang 92,737,817 15.67% 1,370,993 0.23% - - Global
View		 Corporate
Director
De-ZhongLiu 13,045,795 2.20% 2,006,943 0.34% - - - -
Citi (Taiwan)
Commercial Bank
is entrusted with the
custody of the
investment account
of the Norwegian
Central Bank		 11,466,000 1.94%
Global View Co.,
Ltd.
Zhi-yuan Zhou
(Representative of Legal
Entity)		 10,038,049
0		 1.70%
0.00%		 -
0		 -
0.00%		 -
-		 -
-		 Chou-Chye
Huang
-		 Corporate
Director of
Global View
Co., Ltd.
-
Chih-Hao Gong 8,333,160 1.41% 771,433 0.13% - - - -
Polunin Emerging
Markets Small Cap
Fund,LLC		 7,732,825 1.31% - - - - - -
Wen-Qin Lee 7,000,000 1.18% 1,647,542 0.28% - - - -
Chase Managed
Advanced Starlight
Advanced General
International Stock
Index		 6,244,752 1.05% - - - - - -
The American
branch of JPMorgan
Chase Bank Taipei
is entrusted with the
custody of
Vanguard's
emerging market
stock index fund
investment account		 5,292,000 0.89% - - - - - -
Citigroup (Taiwan)
Commercial Bank
is entrusted with the
DFA Investment
Diversified Group's
Emerging Markets
Core Portfolio
Investment Account		 5,086,153 0.86% - - - - - -

39

3.9 Long-term Investment Ownership

December 31st,2018/Unit: thousand shares,% December 31st,2018/Unit: thousand shares,% December 31st,2018/Unit: thousand shares,% December 31st,2018/Unit: thousand shares,% December 31st,2018/Unit: thousand shares,% December 31st,2018/Unit: thousand shares,%
Long-term
Investments (Note)		 Sunplus Investment Shareholding of Director,
Supervisor, Management or
Subsidiary		 Synthetic Shareholding
Amount of
Shares		 Holding % Amount of
Shares		 Holding% Amount of
Shares		 Holding %
Generalplus Technology 37,324 34 14,892 14 52,216 48
Sunplus Innovation
Technology		 31,450 61 3,979 8 35,429 69
iCatch TechnologyInc. 20,735 29 5,326 8 26,061 37
Sunplus mMedia Inc. 22,441 90 2,559 10 25,000 100
Jumplux Technology 13,200 55 10,100 42 23,300 97
Global View Co.,Ltd. 8,229 13 173 - 8,402 13
EVERGREEN STEEL
CORP.		 1500 - 1000 - 2500 -
Broadcom Inc. - - - - - -

Note: Except companies listed above, all other long-term investments are held by the parent company.

40

IV. Capital & Shares 4.1 Capitalization

April 14th,2020 April 14th,2020 April 14th,2020 April 14th,2020 April 14th,2020 April 14th,2020 April 14th,2020
Month/Year Price
(NT$)		 Authorized capital Issued capital Remark
Shares
(thousand
shares)		 Amount
(NT$K)		 Shares
(thousand
shares)		 Amount
(NT$K)		 Funding
(NT$K)		 Funding
Except
Cash		 Note
08/1990 10 2,300 23,000 620 6,200 Cash
Offering
6,200		 None Not IPO yet
08/1990 10 2,300 23,000 1,150 11,500 Cash
Offering
5,300		 None Not IPO yet
03/1992 10 2,300 23,000 2,300 23,000 Cash
Offering
11,500		 None Not IPO yet
12/1993 10 6,000 60,000 6,000 60,000 Cash
Offering
20,900
Capitalization
of Profits
16,100		 None Not IPO yet
09/1994 10 19,800 198,000 19,800 198,000 Cash
Offering
60,000
Capitalization
of Profits
78,000		 None Not IPO yet
06/1995 10 39,600 396,000 39,600 396,000 Capitalization
of Profits
198,000		 None 06/28/1995 SFC
No. 37335
06/1996 10 64,360 643,600 64,360 643,600 Capitalization
of Profits
247,600		 None 06/26/1996 SFC
No. 40155
06/1997 10 105,500 1,055,000 105,500 1,055,000 Capitalization
of Profits
411,400		 None 06/10/1997 SFC
No.46641
06/1998 10 184,000 1,840,000 184,000 1,840,000 Capitalization
of Profits
785,000		 None 06/08/1998 SFC
No.49408
06/1999 10 269,120 2,691,200 269,120 2,691,200 Capitalization
of Profits
851,200		 None 06/23/1999 SFC
No.57760
06/2000 10 600,000 6,000,000 370,000 3,700,000 Capitalization
of Profits
1,008,800		 None 06/03/2000 SFC
No.48003
09/2000 10 600,000 6,000,000 390,000 3,900,000 Cash
Offering for
GDR 200,000		 None 09/18/2000 SFC
No 72620
06/2001 10 700,000 7,000,000 534,000 5,340,000 Capitalization
of Profits
1,440,000		 None 06/27/2001 SFC
No 140791
12/2001 10 700,000 7,000,000 544,742 5,447,424 Merger from
Grandtech
10,742		 None 12/12/2001 SFC
No 173137
06/2002 10 1,000,000 10,000,000 694,950 6,949,500 Capitalization None 05/30/2002 SFC

41

of Profits
957,334
And Capital
Surplus
544,742		 No.129546
07/2003 10 1,000,000 10,000,000 777,504 7,775,040 Capitalization
of Profits
130,590
And Capital
Surplus
694,950		 None 05/22/2003 SFC
No.0920122560
06/2004 10 1,000,000 10,000,000 875,254 8,752,544 Capitalization
of Profits
355,500
And Capital
Surplus
622,004		 None 06/15/2004 SFC
No.0930126644
07/2005 10 1,050,000 10,500,000 945,570 9,455,700 Capitalization
of Profits
487,576
And Capital
Surplus
175,051
Employee
Stock Option
40,529		 None 07/11/2005 FSC
No. 0940127940
TSE
No.09400288741
11/2005 10 1,050,000 10,500,000 948,147 9,481,472 Employee
Stock Option
25,772		 None TSE
No.09400340711
03/2006 10 1,050,000 10,500,000 948,730 9,487,297 Employee
Stock Option
5,825		 None TSE
No.09500052761
06/2006 10 1,050,000 10,500,000 949,784 9,497,844 Employee
Stock Option
10,547		 None TSE
No.09500116511
06/2006 10 1,200,000 12,000,000 1,021,358 10,213,578 Capitalization
of Profits
508,844
And Capital
Surplus
189,230
Employee
Stock Option
17,660		 None FSC
No.0950126238
11/2006 10 1,200,000 12,000,000 1,022,777 10,227,773 Employee
Stock Option
14,195		 None TSE
No.0950030505
01/2007 10 1,200,000 12,000,000 512,212 5,122,119 Capital
Reduction
5,114,358
Employee
Stock Option
8,703		 None FSC
No.0950159014
03/2007 10 1,200,000 12,000,000 512,954 5,129,537 Employee
Stock Option
7,418		 None TSE
No.0960005441
09/2007 10 1,200,000 12,000,000 554,240 5,542,399 Capitalization
of Profits
288,622
And Capital		 None FSC
No.0960038299

42

Surplus
102,415
Employee
Stock Option
21,825
11/2007 10 1,200,000 12,000,000 556,051 5,560,514 Employee
Stock Option
18,115		 None TSE
No.0960037136
03/2008 10 1,200,000 12,000,000 556,750 5,567,504 Employee
Stock Option
6,990		 None TSE
No.09700075761
05/2008 10 1,200,000 12,000,000 556,893 5,568,931 Employee
Stock Option
1,427		 None TSE
No.09700142371
09/2008 10 1,200,000 12,000,000 598,203 5,982,028 Capitalization
of Profits
301,637
And Capital
Surplus
111,092
Employee
Stock Option
368		 None FSC
No.0970036239
02/2009 10 1,200,000 12,000,000 596,910 5,969,099 Treasury
Stock
write-off
12,929		 None TSE
No.0980003591
03/2014 10 1,200,000 12,000,000 591,995 5,919,949 Treasury
Stock
write-off
4,915		 None TSE
No.10300058351
April 14th,2020/Unit: shares April 14th,2020/Unit: shares April 14th,2020/Unit: shares April 14th,2020/Unit: shares April 14th,2020/Unit: shares
Type Authorized Capital Remark
Issued Shares Treasury Stock
Shares		 Un-issued
Shares		 Total
Common
Share		 591,994,919 0 608,005,081 1,200,000,000

43

SHELF REGISTRATION

Type Shares
Expected to Issue		 Shares
Expected to Issue		 Issued Shares Issued Shares Objective and
Expected Benefit
of Issued Shares		 Expected time
of Un-issued
Shares		 Remark
Total
Shares		 Amount Amount Price
N/A N/A N/A N/A N/A N/A N/A N/A

4.1.1 Composition of Shareholders

April 14th, 2020/Unit: share

Shareholder
Amount		 Governmen
t		 Financial
Institutions		 Others
Juridical
Person		 Foreign
Institutions
and natural
Person		 Domestic
Retail
investors		 Treasury
Stock		 Total
Persons 0 3 263 134 69,174 0 69,574
Shares 0 67,048 24,041,542 71,776,505 496,109,824 0 591,994,919
Shareholding 0.0% 0.01% 4.06% 12.12% 83.81% 0.0% 100.00%

Note: The first-listed companies and cabinet companies should disclose their shareholdings in land-based capital; land-based capital refers to the people, legal persons, organizations, and other organizations in mainland China as stipulated in Article 3 of the People's Republic of China to Taiwan Investment Permit Measures, or its investment in a third region.

4.1.2 Distribution Profile of Shareholder Ownership – Common Share

4.1.2 Distribution Profile of Shareholder Ownership – Common Share 4.1.2 Distribution Profile of Shareholder Ownership – Common Share 4.1.2 Distribution Profile of Shareholder Ownership – Common Share 4.1.2 Distribution Profile of Shareholder Ownership – Common Share
April 14th,2020/Par valueper share: NT$10
Shareholding Ownership Number of Shareholders
(persons)		 Shares Owned
(shares)		 Holding
(%)
1~999 33,668 2,377,045 0.40%
1,000~5,000 23,984 55,520,345 9.38%
5,001~10,000 5,823 47,205,974 7.97%
10,001~15,000 1,693 21,434,491 3.62%
15,001~20,000 1,343 25,248,348 4.26%
20,001~30,000 1,083 28,153,634 4.76%
30,001~40,000 501 18,269,353 3.09%
40,001~50,000 394 18,463,084 3.12%
50,001~100,000 590 42,545,354 7.19%
100,001~200,000 287 40,358,979 6.82%
200,001~400,000 111 31,545,791 5.33%
400,001~600,000 30 14,885,266 2.51%
600,001~800,000 17 12,097,453 2.04%
800,001~1,000,000 13 12,069,096 2.04%
Over 1,000,001 37 221,820,706 37.47%
Total 69,574 591,994,919 100.00%

4.1.3 Distribution Profile of Shareholder Ownership – Preferred Shares

Not Applicable

44

April 14th, 2020

4.1.4 Major Shareholders

Shareholding
Name		 Shares Owned Holding %
Chou-Chye Huang 92,737,817 15.67%
De-ZhongLiu 13,045,795 2.20%
Norges Bank 11,466,000 1.94%
Global View Co.,Ltd. 10,038,049 1.70%
Chih-Hao Gong 8,333,160 1.41%
Polunin EmergingMarkets Small CapFund,LLC 7,732,825 1.31%
Wen-qin Li 7,000,000 1.18%
Chase Managed Advanced Starlight Advanced
General International Stock Index		 6,244,752 1.05%
The American branch of JPMorgan Chase Bank Taipei
is entrusted with the custody of Vanguard's emerging
market stock index fund investment account		 5,292,000 0.89%
Citibank (Taiwan) Commercial Bank is entrusted with
the custody of the DFA Investment Diversity Group's
emergingmarket coreportfolio investment account		 5,086,153 0.86%

4.1.5 Net Worth, Earnings, Dividends, and Market Price per Share

Item Year Year 2018 2019 Ended of
March 31st,
2020
Market Price Highest 19.00 14.85 13.90
Lowest 9.66 10.85 7.42
Average 14.24 12.97 11.20
Net Worth Before Distribution 14.30 13.82 13.52
After Distribution 13.94 (Note1) (Note1)
Earnings Per Share Weighted Average Shares 588,434,923 588,434,923 588,434,923
EPS (Note 2) Before Adjustment 0.01 0.03 (0.21)
After Adjustment 0.01 (Note1) -
Dividends Per Share Cash Dividends 0.36(Note6) (Note1) -
Stock
Dividends		 From Profits - (Note1) -
From Surplus - (Note1) -
Accumulated Undistributed Dividends - (Note1) -
Return on Investment Price/Earnings Ratio(Note 3) 1,424.00 432.33 (Note7)
Price/Dividend Ratio(Note 4) 39.56 (Note1) -
Cash Dividends Yield Rate(Note 5) 0.03 (Note1) -

Note 1: Pending shareholders’ approval

Note 2: Retroactively adjusted for stock dividends and stock remuneration to employees

Note 3: Price/Earnings ratio=average market price/earnings per share

Note 4: Price/dividends ratio=Average market price/cash dividends per share

Note 5: Cash dividends yield rate=cash dividend per share/average market price per share

Note 6: Capital reserve cash is NT$ 0.36 per share, and the surplus is calculated as surplus NT$ 0 per share, totaling NT$ 0.36 in cash per share

4.1.6 Dividend Policy

a) Dividend policy in the “Article of Incorporation”

Our dividend policy is made according to regulations set forth in the “Company Act” and the “Article of Incorporation”. The dividends can be in the form of cash or stock, which depends on the status of company’s capital, financial structure, operational needs, retained earnings and industrial environment. The dividend policy for this year will follow the aforementioned rules and maintain the policy of cash dividend with stock dividend, while cash part shall not be less than 10% of the total dividend.

b) Stock dividends for 2019

The company's 2019 loss appropriation plan was approved by the board of directors on March 30, 2020. There is no dividend to be distributed in the 2019 resolution. (Not yet approved by the shareholders' meeting).

c) The proposed capital reserve of the shareholders' meeting is cashed out

45

The Company's capital reserve for the year 2019 was cashed out, was approved by the board of directors on March 30, 2020 (not yet passed by the shareholders' meeting), it is proposed to allocate more than NT$177,598,476 of the capital reserve of the excess amount of the issued amount of the issued shares to the shareholders, shareholding of the cash register on the basis of the capital reserve, NT$0.3 in cash per share.

d) Expected Variation: None

4.1.7 Impact to Profits and EPS Resulting from Dividend Distribution

Due to no official financial guidance there is no related information to disclose.

4.1.8 Profits Distributed as Employee Rewards and Directors and Supervisors’ Compensation

  • a) Regulations Concerning Rewards to Employees, Directors, and Supervisors in the “Article of Incorporation”

If the Company has a profit for the year, should be raised not less than one percent for the staff and not more than one percent. Five for the directors reward. But the company still has accumulated losses (including the adjustment of undistributed surplus amount), should be kept in advance to make up the amount.

The former employee is remunerated by stock or cash, which shall be made to include the employees of the subsidiary who meet the conditions set by the Board. The remuneration of the former directors is only in cash.

The first two items should be resolved by the board of directors, and report to the shareholders' meeting.

When allocating the net profits of each fiscal year, the Company should pay the taxes and make up the losses in previous years; and then shall set aside 10% of the rest after paying tax and making up loss as a legal capital reserve until the accumulated legal capital reserve has equaled the total capital of the Company; In accordance with the law or the competent authorities, to allocate or rotate the special surplus reserve, the surplus, together with the previous accumulated unallocated surplus, is the shareholder's dividend, the board of directors is proposing to assign a motion, to be circulated after the resolution of the shareholders' meeting. But the ratio of the distributions offered by the surplus and the cash dividends of the shareholders, depending on the actual profit and the state of the funds, adjusted by the shareholders' meeting. The above cash dividend shall not be less than 10% of the total dividend of the shareholders to be distributed, but the cash dividend per share is lower than NT$0.5 will not be issued.

In the event that the previous year's accrued or current year occurred but the annual after-tax surplus was not included in the shareholders', accrual of the same amount of surplus reserve due from the previous year's accumulated unallocated surplus, and deducted before being allocated for distribution.

  • b) No information such as employee compensation and directors' compensation for 2019 was allotted this year

  • c) Bonus to Employees, Directors, and Supervisors for last fiscal year

Approval by shareholders’ meeting on June 10th, 2019, the company decided to distribute the profits of 2018

Cash rewards to Employee NT$79,590 Cash bonus to Directors NT$119,384

The above distributions are not different from those of the Board of Directors of the Company dated 14 March 2018.

4.1.9 Buyback of Common Shares

None

4.2 Issuance of Corporate Bonds

None

4.3 Preferred Shares

None

46

March 31st, 2020

4.4 Issuance of GDR

4.4 Issuance of GDR 4.4 Issuance of GDR March 31st,2020 March 31st,2020
Issuing Date
Item		 March 16, 2001
IssuingDate March 16,2001
Issuance & Listing London Stock Exchange Listed
Total Amount US$191,400,000
OfferingPriceper Unit US$9.57
Issued Units 14,737,222.5
Underlying Securities Offering 20,000,000 new shares of common stock of par
value NT$10
Common Shares Represented 29,474,455 Common Shares
Rights and Obligations of GDR holders Same as common share holders
Trustee N/A
DepositaryBank The Bank of New York
Custodian Bank Mega International Commercial Bank
GDRs Outstanding 176,225 units
Apportionment of the expenses for the issuance and
maintenance		 All fees and expenses related to issuance of GDRs were
borne to the selling shareholders and Sunplus, while the
maintenance expenses such as annual listing fees,
information disclosure fees and other expenses were
borne bySunplus
Terms and Conditions in the Deposit Agreement and
CustodyAgreement		 -
Closing price
per GDRs		 2019 Highest US$0.95
Lowest US$0.71
Average US$0.84
January 1 to March 31, 2020 Highest US$0.91
Lowest US$0.49
Average US$0.76

4.5 Employee Stock Options Plan

4.5.1 Issuance of Employee Stock Options and Its Impact to Shareholders Equity

4.5.2 Stock Option to Management Team and Top 10 Individual

4.6 Restricted Employees Stock

Not applicable

4.7 Mergers and Acquisitions

Not Applicable

V. Financial Plan & Implementation

Not Applicable

47

VI. Business Highlight 6.1 Business Activities

6.1.1 Business Scope

a) Major Business

CC01080 Manufacturing of electronic component

I501010 Product Designing

F401010 International Trading

I301010 Software Design Services

I301020 Data Processing Services

R&D, Manufacturing, Testing, Selling of

  • (1) ICs

  • (2) modules

  • (3) Application software

  • (4) IPs

  • (5) Trading and Agency Business of ICs

4 Product Segments and Sales Amount

Unit: NT$K, %

Segments and Sales Amount Unit: NT$K,% Unit: NT$K,%
Product Categories 2019
Amount Percentage %
IC income 5,110,744 92.71
Other 401,586 7.29
Total 5,512,330 100.00

6.1.2 Plan to develop new products (services)

Company Plans to develop new products
Sunplus Technology (1) Car entertainment system chip
(2) Vehicle smart cockpit system chip
(3) Vehicle navigation and driving assistance
system flat
(4) Medium and high-order Soundbar system
chip
(5) High-speed interface IP
(6) High - performance data converter
(7) Analog IP
(8) Industrial control system chip based on
sunplus Plus1 architecture
Generalplus Technology (1) A new generation of speech synthesis
control chip
(a) High sound quality and high volume PWM
driver
(b) OTP / Flash memory, can quickly update
the code
(2) Digital audio and voice recognition control
IC:
(a) High-resolution Sigma-Delta ADC
recording device
(b) High sound quality Class-D broadcast
drive device
(c) Flash memory, can quickly update the code
(3) LCD control IC:
(a) Low-power platform capable of single
battery operation
(b) OTP memory, can quickly update the code
(4) Multimedia application control IC:
(a) High-performance Cortex-A series 32-bit
platform
(b)More displaytechnologies and interfaces

48

(CVBS, HDMI, MIPI)
(c) Advanced image processing (ISP, GPU,
H.264, computer vision and AI deep learning)
(d) DDR2/DDR3 DRAM interface
(5) Microcontroller:
(a) Cortex-M0 motor drive control IC
(b) Highly integrated wireless charging IC
(c) High-sensitivity touch IC
(6) Other ICs:
(a) Various peripheral chips supporting the
main control IC
(b) More complete power control IC
(c)Higherqualityaudio amplifier IC
Sunplus Innovation Technology (1) Very low power USB image processing IC
(2) USB3.0 4K image processing IC
(3) Image processing IC with intelligent image
detection function
Jumplux Technology (1) Front loading regulation Automotive USB
TYPEC PD3.0 Charger IC.
(2) MCU chip and subsystem based on
RISC-V instruction set
(3) Endpoint deep learning software and
hardware accelerator and its AIOT application
chip

6.1.3 Industry Overview

a) Industry Status and Exhibition

2019 global IC design industry share to the highest in the United States, Taiwan second, China has grown fast and has risen to third place. According to the Institute of Industry Intelligence Research (MIC) estimates, Taiwan IC design industry in 2019 outstanding performance, 2020 will originally maintain growth momentum, and because of the strong demand for high-end process, Taiwan wafer foundry output will grow. And driven by high-end packaging needs, Taiwan IC packaging and testing industry to restore growth momentum. In the IC design industry, ITRI IEK industry analyst Zhehao Fan pointed out, at present, the international semiconductor manufacturers emphasize life applications and user experience, technology layout direction will also be its own advantages of technology as the core, locking the wisdom of computing, wisdom, sensory transmission and other things required for the development of the three major technical direction, build a more open industrial ecology, more interoperable platform.

b) Supply Chain

In the product development flow, Sunplus focuses on IC design, system design, wafer testing and sales services but out-sources most of the manufacturing including mask making, wafer fabrication, wafer sawing, packaging and final testing. The infrastructure of semiconductor industry in Taiwan is very efficient; we have foundries like TSMC, UMC, etc., and backend assembly and testing houses such ASE, SPIL and KYEC. Since those factories are located in Hsinchu Science Park or nearby, the “Cluster” effect could enable high production efficiency.

c) Market Trend and Competition

Company Main Product Product development trends and competitive
situation
Sunplus IC products are used in automotive
infotainment systems, advanced
driver assistance systems (ADAS),
home audio Soundbar and DVD
players, and authorized high-speed
interface IP, high-performance data
converter IP and analog IP		 In recent years, Lingyang has focused on the
development of automotive chip products and
system platforms, and has successively
launched advanced driver assistance system
(ADAS) chip platform products, as well as
automotive information entertainment systems
(IVI). In the IVI product line, Sunplus
continues to develop a single chip that
supports the interconnection functions of

49

mobile phones such as Apple CarPlay and
Google Android Auto. It is currently the
industry's most optimized system cost
solution. The follow-up strategy is to increase
the computing power of the chip and invest in
a higher-order process to build AI functions
into the system to enhance its competitive
advantage.
In the home audio-visual entertainment
segment, the SoundBar product line continues
to be developed based on the DVD player
technology and customer base. The 3D
surround sound field (such as Dolby Atmos,
DTS: X and other technologies) has been
generally accepted by consumers. Lingyang
has a deep cooperation foundation with Dolby
and DTS, and has successively launched
products that support 3D sound field. The
development strategy is to optimize the system
Introducing a more integrated SoC, it is
expected to reduce the price of terminal
products and expand the penetration rate of 3D
sound field products.
Lingyang also provides high-speed interfaces,
data converters and analog IP licenses.
In addition, Lingyang also launched the Plus1
architecture. The C + P architecture developed
by it solves the problem that the advanced
process of the semiconductor industry cannot
match the market volume. The C + P
architecture is a Computing Unit plus a
Peripheral Unit. The process and the
computing power can keep up with the trend of
the times, and the peripheral units of the
Peripheral Unit use mature processes to
achieve reasonable development costs. Based
on this architecture, the industrial Linux SoC
development platform SP7021 has been
launched on the market.
Generalplus A. Educational learning platform
B. Smart interactive toy market
C. Wireless charging market
D. Driving recorder market		 A. Educational learning platform
The highly integrated ARM9 SoC up to
513MHz, in addition to full HD 1080P full HD
H.264 image compression and decompression,
also has the flexibility of CPU and DSP
(Digital Signal Processor) powerful
computing capabilities.
Provide a competitive hardware platform,
provide customers with complete solutions in
the development tools and libraries to quickly
and effectively serve customers.
B. Smart interactive toy market
In the field of interactive toys, injecting AI
technology concepts into the toy market is
expected to lead the market trend and create
new and different interactive toys. The model
of product innovation is divided into
technology-driven market and market
feedback to drive the company's technological
innovation.
C. Wireless charging market
In theproduct development,15Wproducts are

50

launched, which can be applied to mobile
phones, mobile power supplies, charging back
clips and other various devices suitable for
wireless charging. It also successfully
introduced into the automotive pre-installation
market and mass production.
D. Driving recorder market
Will continue to develop on the development
of multi-channel cameras and intelligent
driving assistance systems, with a view to
diversifying product applications.
Sunplus
Innovation
Technology		 Micro-control product line, used in
computer and home appliances
such as keyboard, mouse, and
remote control; Image product line,
used in external network camera,
NB laptop built-in network camera		 The main supplier of optical mouse image
sensors is mainly the original phase
technology. The company launched a highly
integrated single-chip wired optical gaming
mouse to provide customers with total
solutions.
The products built by our company in external
Webcam and NB have obtained the quality
recognition of major international
manufacturers including Logitech HP DELL
Lenovo Acer and other brands, and become
their long-term cooperative supplier.
Jumplux
Technology		 Front loading regulations USB
MediaHub IC
Front loading regulations USB
TYPEC PD3.0 Charger IC
UFS high-speed storage bridge IC
MCU chip and subsystem based on
RISC-V instruction set
Endpoint deep learning software
and hardware accelerator and its
AIOT application chip		 Front-loading regulation product line: With
the continuous shipment of front-loading
customers, we continue to work on the
peripheral chips of the relevant front-loading
regulation.The current main competitors are
Microchip, ST, Ti, NXP.
Storage product line: Cooperate with strategic
customers to develop UFS-related high-speed
storage ICs, and make product differentiation
with main rivals Huirong and Qunlian.
Endpoint deep learning software and hardware
accelerators and their AIOT application chips:
In the market where AIOT has erupted, we are
actively developing customized and
diversified neural network acceleration ICs
with high computing power and low power
consumption.

6.1.4 Technology and Development

a) R&D expenditure

hnology and Development
R&D expenditure		 hnology and Development
R&D expenditure		 hnology and Development
R&D expenditure
Unit: NT$K,%
Year
Item		 2019 Ended March 31st, 2020
Expense 1,481,269 363,100
Percentage to Revenue 27% 35%

b) R&D Accomplishment

Company Accomplishment Applications
Sunplus (1) H.264 decoder
(2) MPEG2/4 decoder
(3) Servo Control
(4) HDMI DVD
(5) JPEG decoder
(6) Video encoder
(7)CarPlay/ Android Autod single chipand system		 (1) High-end car
infotainment system chip
(2) Smart cockpit platform
products for high-end
vehicles
(5) Medium and high-end
Soundbar system chip

51

platform
(8) ADAS system platform
(9) 3D surround sound field DSP and system
platform
(10) Plus1 architecture		 (6) High-speed interface IP
(7) High-performance data
converter IP
(8) Analog IP
(9) Industrial standard
Linux openplatform SoC
Generalplus (1) Development and completion of GPC74B full
series of voice / music synthesis controller chips
(2) Development of Cortex-M0 voice recording
platform with 81MHz operating frequency
(3) Develop a new generation of 32-bit SoC high-end
handheld open application platform
(4) Development of 32-bit Cortex-M0 sine wave
drive control IC GPM32F0118B
(5) GPMQ series product development		 (1) Integrate CPU, OTP,
RAM, I / O, timer and high
resolution digital audio
amplifier drive circuit.
(2) In addition to
integrating high-resolution
Sigma-Delta ADC
recording devices and
integrating high-quality
performance Class-D
broadcasting devices.
(3) Built-in image
processing unit, computer
vision processing unit,
voice processing unit,
cooperate with
self-developed deep
learning and audio and
video processing
algorithms, develop
various types of ELA
education and learning,
STEAM scientific toys,
driving recorder, sports
camera, aerial camera
application.
(4) Integrate Flash ROM,
RAM, DMA,
Programmable PWM,
1Msps 12-bit ADC and
high-speed OPA to provide
peripheral circuits and
efficient DC brushless
motor solutions.
(5) Newly developed 15W
IC solution, integrated high
and low voltage
components and passed
WPC EPP certification.
Sunplus
Innovation
Technology		 (1) Mouse, keyboard, smart remote control
(2) Low power consumption and high integration
NB Camera control IC
(3) Machine vision intelligent image
(4) ISP technology-TNR HDR WDR		 (1) Very low power USB
image processing IC
(2) USB3.0 4K image
processing IC
(3) Image processing IC
with intelligent image
detection function
(4) Gaming mouse control
IC
Jumplux (1) USB Display IC
(2) Automotive Mediahub IC
(3) USB3.1 to UFS2.1 Bridge IC		 (1) USB TYPEC PD3.0
Charger IC
(2) MCU chip and
subsystem based on
RISC-V instruction set
(3) Endpoint deep learning
software and hardware

52

accelerator and its AIOT application chip

6.1.5 Business Plan

Short-term business plan:

In terms of automotive chip products and system platforms, Sunplus Technology has successfully developed CarPlay / Android Auto (DA, Display Audio) audio and video systems for vehicles and successfully introduced to Japan, South Korea and China before and after installation customers. At present, the terminal product sales area is mainly Japan , North America, South America, Southeast Asia, etc. In the past year, the total sales volume of the global auto market has declined, and automakers and first-tier suppliers have sought to increase the demand for DA products, so these products have shown better cost performance. Following this trend, Lingyang will invest more business resources to expand the pre-installation channels, especially in the Chinese market. In terms of household Soundbar and audio products, we continue to work closely with major audio and audio codec manufacturers to integrate advanced audio processing technology on Sunplus ’system platform and promote it to international brand customers, which have been imported into Japan, South Korea and North America Mass production of international brand customers, follow-up will continue to improve the product line, complement low-end and middle-high-end product blocks, to provide customers with a more comprehensive product portfolio.

Generalplus focuses on consumer electronics chips, product lines include voice, multimedia, and microcontroller chips, and product development ranks the market leader. The main applications include multimedia interactive toys, educational learning, voice and LCD control, MP3, consumer digital camcorders and MCU and other related applications. In the consumer product line, it is expected to maintain stable growth and profitability. In the multimedia product line, focusing on intelligent interactive robots, wearable devices, IoT start-up products, driving recorders, aerial recorders, sports DVs, etc., is expected to continue to grow in product development and market expansion. In the MCU product line, more emphasis will be placed on the planning and development of new product lines and the establishment of new customers, investing more resources and accelerating the expansion of product lines.

Sunplus Innovation Technology focuses on the development of computer peripheral application chips. Products include PC man-machine interface device chips, network camera chips, optical sensors, remote control ICs, etc. The sales in 2019 will mainly come from PC-related camera control chip solutions, consumer image processing solutions, computer mouse controller chips and remote control chips. Continue to deepen the image processing technology, and at the same time invest in the field of machine vision, add more value to the image product program, and can continue to grow steadily in the future.

Jumplux Technology focuses on the development of peripheral chips and high-speed storage chips for front-loading. Currently, the top ten customers account for approximately 100% of the total revenue. The customer structure is sound and the risk is low. The main sales areas are Taiwan, Hong Kong and the mainland. At present, Tier1 customers' pre-loaded products are introduced into mass production, and they are still mainly based on Sino-foreign joint venture brands in North America and Europe on the mainland. Starting in 2020, the domestic domestic brand car manufacturers will also be introduced into mass production. In addition, in 2019, the USB Media Hub SPD10X series will also be redesigned to meet the needs of Tier1 customers ’various brand models. Several related ICs currently designed have also been tested and related certifications on the client side. It is expected that 2020 will bring new Camp sports.

53

Long-term development:

Sunplus Technology includes all of the Group's consolidated entities, will continue to deepen its core competitiveness in all areas, strive to expand the market to increase market share, develop high value-added products to improve gross margin, observe the boom and market trends, adjust and optimize the product line Reinvestment to improve the performance of industry and industry investment, at the same time, it actively invests in the development of advanced technologies and products, expands the scale of operations, enriches the operating team and enhances the company’s visibility and image, in the hope of creating more profit for all shareholders.

6.2 Market Status

6.2.1 Market Analysis

a) Market Analysis by Region

Unit: NT$K, %

ket Status
rket Analysis
Market Analysis by Region		 Unit: NT$K,% Unit: NT$K,%
Area 2019
Amount (NT$K) Percentage (%)
Asia 3,499,818 63.49
Taiwan 1,956,236 35.49
Others 56,276 1.02
Total 5,512,330 100.00

b) Market Share

The Industrial Economics and Trends Research Center (IEK) of the Industrial Technology Research Institute calculates the output value of Taiwan ’s IC industry in 2019 to be 266.6 billion yuan, a 1.7% increase from 2018. Among them, the output value of the IC design industry was 692.8 billion yuan, an increase of 8.0% from 2018; the IC manufacturing industry was 1.47 trillion yuan, a decline of 0.9% from 2018. Among them, the wafer foundry was 1.131 trillion yuan, a growth from 2018 2.1%, memory and other manufacturing was 159.6 billion yuan, a 20.4% decline from 2018; IC packaging industry was 346.3 billion yuan, a 0.5% increase from 2018; IC testing industry was 154.4 billion yuan, a 4.0% increase from 2018.

The company's 2019 consolidated revenue is NT $ 5.51 billion, with a market share of approximately 0.8%.

c) Demand and Growth

The MIC pointed out that demand for special application chips (ASICs) is expected to increase in 2020, and Taiwan ’s IC design related companies are expected to benefit. Senior industry analyst Ye Zhenxiu pointed out that the demand for ASIC chips has always existed, but the rising demand has been observed since 2019. In the past, mainstream demand focused on 3C, but with the development of the Internet of Things, it has driven product categories toward diversified development, including AI Development has also opened up the market demand for customized chips in the cloud and terminals. Under this wave of demand, Taiwanese manufacturers are expected to benefit simultaneously. In addition to existing IC design service providers, traditional IC design manufacturers can also use the accumulated bottom layer in the past. IP is the basis for developing ASIC services, with advanced process development experience to provide services.

Ye Zhenxiu, senior industry analyst at MIC, said that Taiwan ’s IC design service revenue has maintained a growth rate of approximately 10% year-on-year. From this, it can be seen that demand is still growing steadily. Although ASIC accounts for a small proportion of the overall, customized services The high gross profit also attracts many traditional IC design companies to invest in it. Taking the dynamics of Taiwanese manufacturers as an example, in the past, IC design service providers such as Creative and Chihara provided ASIC design services. Now MediaTek and Lingyang have also established ASIC departments to develop their own IP and high-end process chip development through long-term accumulation Ability to assist customers to develop unique application chips and further expand applications to markets other than 3C. In the process part, the package integrates chips of different processes such as sensors, memory, and processing cores through the type of SiP module to improve chip computing efficiency and bring chip diversity. In view of this, Lingyang has invested a relatively large amount of resources in the IC development of the Smart Computing Project (Plus1) in the past few years, which can be applied to AI. As customers gradually understand acceptance and

54

market demand increases, sales will have the opportunity to grow year by year.

Company Product Demands
Sunplus Car infotainment &ADAS With advanced ADAS related
systems gradually listed in the
legislation implementation
regulations of various countries,
first-line depots have also
introduced ADAS applications,
the market adjustment agency
estimates that ADAS' compound
annual growth rate can reach
35%, and Barclays expects ADAS
penetration rate will exceed 25%
by 2021, future related
applications will become more
popular, Strategy Analytics
predicts ADAS output will exceed
26 billion U.S. dollars by2026.
Generalplus Education and learning toys Electronic education toys have
been more than ten years of
history, because of its excellent
interaction and sound and light
effects, can help children to learn
from the shape, name, number to
text and so on, through fun games
and interactive processes, due to
the prevalence of smart phones
and tablet PCs, for school age
children and adolescents, in the
electronic trend, manufacturers
have also begun to launch such as
Tablet PC learning platform,
children in the subtle, but also
because the learning effect is
better than traditional books
development of fast learning, so
the market continues to grow
rapidly.
Intelligent interactive toys The field of smart interactive toys
is the company's key development
direction and is the IC design
company with the highest market
share. In addition, in high-end
products, 16 / 32-bit SoC control
chips are also used in countless
products every year, such as
karaoke, electronic pianos,
children's cameras, TV interactive
entertainment platforms and
wearable devices. In addition,
intelligent photorealistic pets and
robots are currently the hottest
topics. Under the trend of aging,
more products have been
designed to be used by older
ethnicgroups.
Wireless charging At present, the top five mobile
phone brands (Apple, Samsung,
Huawei,Xiaomi,Oppo)officially

55

support wireless charging,
showing that the market is
constantly following this trend.
The most representative is Apple's
Bluetooth wireless headset
AirPods charging box also
launched wireless charging
Version, allowing this application
to quickly spread to a variety of
products, and even in the newly
launched AirPods Pro, the
original wireless charging was
changed from optional to standard
equipment. The volume will
continue to increase.
Driving recorder market The global overall driving
recorder market has a growth rate
of about 15%. The latest
electronic rearview mirror and
voice control are popular products
this year. In 2019, Lingtong still
steadily occupies China's overall
domestic and foreign sales in the
driving recorder market. 4 ~ More
than 50% of the market share. In
addition, the market share of
children's cameras is estimated to
exceed 60%.
Sunplus Innovation Mouse keyboard controller
PC / NB cam		 The market for PC-based cameras
and mouse keyboards is flat. The
demand for cameras has great
potential opportunities in smart
home appliances and new retail.
The company has invested in
research and development of
high-end imaging products to
create new products and
applications suitable for machine
vision. In addition, it also actively
increases non-PC related product
lines such as high-speed wireless
cameras and car cameras,etc.
Jumplux Front-loading peripheral market
AIOT market		 The automobile is hailed as the
fourth C after the 3C market in the
electronics industry. Especially
with the joint investment of the
automobile and electronics
industries, the market has begun
to accelerate development, and
the industry, government, and
academia are also optimistic about
its future potential. According to
the international management
consulting company Bain &
Company ’s report pointed out
that the ADAS ecological supply
chain includes inter-vendor
technology, software, hardware
and services. The output value in
2025 is $ 26 billion. In addition to
the MediaHub that has been

56

shipped, the current scene is also actively invested Development with related peripheral chips, such as the USB charging chip of the front loading machine, and the class AB amplifier chip of the front loading car audio.

d) Advantages and disadvantages of competitive advantages and development prospects

  • (1) Competition Analysis

  • (a) Accumulation and impartation of the experience of the R&D team

    • The company since its inception in 1990 that is positioned as IC design company, management team has established a complete product development, technology management, marketing and other systems, and passed on to the backward employees , s o that technology without fault, customers less complain, the staff personal growth achievements. In addition, Sunplus and actively establish a patent layout, so that the core IP research and development can create more value.

  • (b) Focus on high-level consumer IC market, enlarge the distance from competitors Since the IC market is extremely competitive and stagnation is an ever-present trap, we keep on bringing in a large number of R&D resources to develop new high-level consumer products and widening the distance between us and other competitors. Meanwhile, Sunplus’ numerous product lines give us a tremendous advantage over our competitors. We are the kind of customer that prized by most wafer foundries because our wafer demand does not fluctuate when a few products are eliminated. Due to our steady stream orders to our wafer suppliers, we enjoy more consistent wafer supply during peak seasons over our competitors. This also allows us to keep our wafer costs at a competitive rate.

  • (c) Strategic cooperation with upper stream and down- stream factories In recent years, Sunplus has increased cooperation between our upper stream and down-stream factories. We believe that this new strategic and more dynamic cooperation relationship will bring positive contributions to our production and marketing in the long term.

  • (d) Maintain long-term and stable cooperative relationship with customers Consumer electronic products rely on IC to raise their added-on value; consequently the manufacturers and brand-names choose their IC suppliers with extreme caution by evaluating their product specification, features, delivery term, yield rate, and sales service. IC design houses have to work in coordination with customers to build up long-term relationship and facilitate the cooperation.

Sunplus is always devoted itself to cutting-edge technology development and have accumulated IC design expertise. We also adopted distributors as expanding sales channels to reach more customers with strongly support and best service. Till today, we have sustained a strong relationship with a lot of end-product manufacturers worldwide.

  • (2) Advantages

  • (a) Sunplus offers high value-added products to enable customer to win the market.

  • (b) The growing demand for SoC complicates IC product development and raises the entry barrier, which benefits IC design companies with rich resources like Sunplus.

  • (c) Sunplus has strong IC design capability to meet customers’ requirements for time to market and costs reduction.

  • (d) Sunplus has built up long-term relationship with wafer foundries due to our steady demand for wafers, and therefore we can get stable supply and lower prices from wafer foundries.

  • (e) Sunplus have developed a strong technology and customer base on car entertainment IC that makes Sunplus easier to get into automotive ADAS applications

  • (3) Disadvantages

  • (a) The competitors are mainly international and big IC design companies.

  • (b) Revenue and growth are slowing down due to poor PC demands.

57

  • (c) SoC design and integration of features and functions, which developing products costs are a lot more than before, has become the trend of IC design.

  • (d) Consumer application demands link to world economics.

  • (e) There is high entry-barrier to get into automotive market.

  • (4) Business Strategy

  • (a) Developing new and high value-added products.

  • (b) Process migration to make per wafer productivity higher and drive cost down.

  • (c) Expanding strategic partnership with clients to create win-win situation.

  • (d) Collaboration with partners to broaden IP licensing sources.

58

6.2.2 Product Applications and Development Flow

a) IC Development Flow

==> picture [395 x 191] intentionally omitted <==

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

Product Spec.
Product Spec.
Mask Making Packaging
IC DesignIC Design System DesignSystem Design Wafer Foundry Final Testing
& Layout & Coding
& Layout & Coding
Wafer After Sales
Tape Out Wafer After Sales
Tape Out C.P. TestingC.P. Testing ServiceService
----- End of picture text -----

In the product development flow, Sunplus focuses on IC design, system design, wafer testing and sales services but out-sources most aspects of the manufacturing including mask making, wafer fabrication, wafer sawing, packaging, and final testing.

6.2.3 Major Suppliers

The major materials are wafers, at present the main suppliers for domestic and foreign wafer foundry manufacturers, whose wafer supplements are sufficient and stable.

Main raw material name Major suppliers Supply status
Wafer A, B, C Quality and supply stability,
long-term cooperation, the supply
situation isgood.

59

6.2.4 Major Customers and Suppliers in the Recent Two Years

a) Major Customers

Unit: NT$K

2018 2018 2018 2018 2019 2019 2019 2019 End of March, 31, 2020 End of March, 31, 2020 End of March, 31, 2020 End of March, 31, 2020
Customer Sales
Amount		 % of
Total
Sales		 Relation
with
Sunplus		 Customer Sales
Amount		 % of
Total
Sales		 Relation
with
Sunplus		 Customer Sales
Amount		 % of
Total
Sales		 Relation
with
Sunplus
A 763,906 12.57 No A 844,237 15.32 No A 128,071 12.29 No
B 652,318 10.73 No B 651,715 11.82 No B 117,605 11.28 No
C 622,701 10.25 No D 468,794 8.50 No E 104,217 10.00 No
Others 4,038,808 66.45 Others 3,547,584 64.36 Others 692,563 66.43
Net sales 6,077,733 100.00 Net sales 5,512,330 100.00 Net sales 1,042,456 100.00

b) Major Supplier

Unit: NT$K

2018 2018 2019 2019 2019 2019 End of March, 31, 2020 End of March, 31, 2020 End of March, 31, 2020 End of March, 31, 2020
Supplier Purchasing
Value		 % of Total
Purchasing		 Relation with
Sunplus		 Supplier Purchasing
Value		 % of Total
Purchasing		 Relation
with Sunplus		 Supplier Purchasing
Value		 % of Total
Purchasing		 Relation
with
Sunplus
A 953,504 38.84
No		 A 762,121
39.81		 No A 244,451 47.32 No
B 233,065 9.49 No C 188,444
9.84		 No C 30,987 6.00 No
C 192,493 7.84
No		 B 145,227
7.59		 No B 25,614 4.96 No
Others 1,075,991 43.83 Others 818,577
42.76		 Others 215,534 41.72
Netpurchase 2,455,053 100.00 Netpurchase 1,914,369
100.00		 Netpurchase 516,586 100.00

60

6.2.5 Production

Unit: thousand pcs, NT$K

6.2.5 Production Unit: thousandpcs,NT$K Unit: thousandpcs,NT$K Unit: thousandpcs,NT$K
Year
Product
2018		 2019
Capacity Output Value Capacity Output Value
Multimedia ICs - 643,298 3,670,886 - 547,812 3,041,599
IC income - 17 23,111 - 17 22,248
Total - 643,315 3,693,997 - 547,829 3,063,847

Note: Sunplus out-sourced production to wafer foundries, so there is no capacity limitation.

6.2.6 Sales

Unit: thousand pcs, NT$K

Year
Product		 2018 2018 2018 2018 2019 2019 2019 2019
Local Export Local Export
Quantity Sales Quantity Sales Quantity Sales Quantity Sales
IC income 189,206 1,894,980 386,708 3,768,079 189,589 1,940,267 363,463 3,170,477
Other ICs - 13,490 52 401,184 - 15,969 - 385,617
Total 189,206 1,908,470 386,760 4,169,263 189,589 1,956,236 363,463 3,556,094

6.3 Personnel Structure

6.3 Personnel Structure 6.3 Personnel Structure
Year 2018 2019 End of
March 31, 2020
Workforce Structure by Job Function R&D 757 710 704
Production 72 72 71
Administration 333 284 276
Total 1,162 1,066 1,051
Average Age 32.7 36.9 37.8
Average Years Served 5.14 6.88 7.95
Workforce Structure by Education Degree Ph.D. 1% 1% 1%
Master 38% 40% 40%
Bachelor 50% 49% 49%
Other Higher Education 7% 6% 6%
High School 4% 4% 4%
Total 100% 100% 100%

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6.4 Environmental Protection & Expenditures

6.4.1 Environmental Protection

The company is a high-tech integrated circuit professional IC design firms, in the Hsinchu Science and Technology Industrial Park in the semiconductor research and development, all products commissioned at home and abroad well-known integrated circuit manufacturers manufacturing wafer, relevant aspects of the environmental pollution regulations and the losses caused by non-violation of environmental regulations.

The vast majority of the company's office operations, no facilities and equipment to produce harmful pollution sources, no expenditure on environmental protection operations. On the product, the foundry, package, and test foundry with the best combination of quality, cost, and production efficiency are entrusted to reduce the consumption of defective products and effectively reduce environmental expenditure directly and indirectly. If defective products are produced, they are currently qualified manufacturers. Unpaid cleaning, no clean-up costs.

Sunplus does not violate any EPA regulation regarding pollutants and environmental protection.

To adhere to the conception of Earth Vision, Sunplus has established the environment protection system for fulfilling policies, social responsibilities and obligations, and been ISO-14001 certified.

To reduce the environmental impact of E-Waste, Sunplus supplies customers with hazardous substances free (HSF) and satisfying products, and has been IECQ QC080000 certified.

In order to reduce the impact of the greenhouse effect on the climate, Sunplus Technology conducts independent investigation of greenhouse gas emissions in accordance with the ISO14064 standard and 100 years as the base year of inspections in the Republic of China, and exposes it in the Corporate Social Responsibility Report (CSR Report), according to the results of the self-examination, the annual greenhouse gas emissions in the past three years (2017-2019) were 4284.82, 4585.41, and 4471.34 (tons of CO2 equivalent), of these, those that belonged to [Scope 1] and those

directly emitting emissions (such as official vehicle fuel consumption and generator oil) accounted for only about 0.001% (2019 category 1 was 2.89 tons of CO2 equivalent). Yu Jun is an Scope II, and the indirect emission of energy such as purchased electricity.

Sunplus is an IC design industry. More than 99.9% of greenhouse gas emissions are indirect emissions. The emission sources mainly come from the water and electricity required by air-conditioning and office lighting. They have passed the plant monitoring system, making air-conditioning equipment more efficient. , At the same time, to promote energy-saving concepts and actions to colleagues, with a goal of reducing the amount by more than 2% annually, reducing unnecessary waste, and the comparison has reached the standard in the past two years. (Greenhouse gas emissions reduced by 2.49%).

In addition, it also actively strengthens employees’ awareness of environmental protection, promotes waste reduction, recycling, energy conservation and water saving, and saves energy resource consumption in order to reduce the impact on the environment.

6.4.2 Working Environment

As the leading company in IC design, it is the company's primary responsibility to care for and care for the company's workers. We provide facilities and environments that are better than the Occupational Safety and Health Act, and set up dedicated organizations and personnel to implement environmental safety and health management related matters. The employees' workplaces are automatically checked regularly, and the labor operating environment is monitored every six months (April and October each year) to ensure the safety of employees, the environment, and equipment. In order to protect the physical and mental health of every colleague, the company conducts annual health checks for general employees and senior executives that are better than the legal requirements to ensure that each employee can master their own health status. There is also a medical room, and there are professional doctors resident every two months, providing staff health consultation services, and even scheduling health promotion activities from time to time. More

importantly, we provide good breastfeeding rooms for women in the workplace, equipped with refrigerators and electric milk collection equipment, and passed the Hsinchu County Workplace Friendly Breastfeeding Room Certification in 2015, so that every mother in need Can work at ease.

In addition, since April 2018, the company has promoted the establishment of occupational safety and health management systems. It has also obtained ISO45001: 2018 Occupational Health and Safety Management Systems (Occupational Health and Safety Management Systems) and CNS15506: 2011 (TOSHMS, Taiwan) in 2019. Occupational Safety and Health Management System) Taiwan Occupational Safety and Health Management System, two certifications of occupational safety and health management system; in response to the revision of TOSHMS to CNS45001, the new version has been applied for conversion on December 26, 2019 and has been verified.

Management system International standard code and
version		 Valid from Valid until
Environmental
Management System		 ISO14001:2015 2017/02/10 2020/02/09
Occupational safety and
health management system		 ISO45001:2018 2019/02/25 2022/02/24
TOSHMS
(CNS15506:2011)註		 2019/03/12 2021/03/11
TOSHMS
(CNS45001:2018)		 2020/02/07 2022/02/24

Note: Sunplus Technology's TOSHMS (CNS15506:2011) certification has been applied for a new version of the verification on December 26, 2019, and the standard code is CNS45001:2018.

6.5 Employees

6.5.1 Employee Welfare

We strive to provide a clean and supportive environment for our employees. We established an Employee Welfare Committee to operate welfare activities including emergency aid, educational grants, book purchase subsidies, social club activities and overseas trips. We also comply with the Labor Standards Law to conduct labor insurance and retirement system programs, and participation with the National Health Insurance plan according to the National Health Insurance Act. Moreover, we also handle group insurance and insurance for employees’ family to ensure security for our employees.

6.5.2 Pension Plan

Sunplus has a pension plan for all regular employees, which provides benefits according to the Labor Standard Law. The Company makes monthly contributions, equal to 2% of salaries, to the pension fund, which is administered by a pension fund monitoring committee. The contributions are deposited in the committee’s name in the Central Trust of China. Since July 1, 2005, employees who choose Labor Pension Act Implementation Rules of the Labor Pension, the Company makes monthly contributions, equal to 6% of salaries to the personal pension fund of Bureau of Labor Insurance.

6.5.3 Other Affairs

Sunplus have smooth commutation channels with employees. Employees could address their opinions to management team directly. All operations are based on the Labor Standard Law. Sunplus’ labor relations are outstanding. We are proud to say that there has not been a single loss resulting from a labor dispute since the establishment of the company.

6.5.4 Training

The Company provides various kinds of external professional training courses & internal training regarding management, professional skills, general skills, special skills, and self-development.

6.5.5 Loss from Controversy between Labor and Management None

6.6 Important Contracts

Contract Counter Party Term Content Restriction
Lease of Land Hsinchu Science Park
Administration		 1995/8/01-2034/12/31 Lease of Land Self-use
Lease of office Hsinchu Science Park
Administration		 2019/01/01~2023.12.31 Lease of office -
Licensing ARM Limited 2007.12.27 ~ ARM7 TDMI-Score Only license
Generalplus
Licensing ARM Limited 2010.06.01 ~ CORETEX-A8 Score Only license
Generalplus
Licensing ARM Limited 2008.03.09 ~ ARM926EJ-Score Only license
Generalplus
Licensing ARM Limited 2016.03.09~ ARM CORTEX –M0 Only license
Generalplus

VII. Financial Statements

7.1Condensed Financial Statement and Auditors’ Opinions by adopting IFRSs 7.1.1 Condensed Balance Sheet by adopting IFRSs-Consolidated

Unit: NT$K

Year
Item		 Year
Item		 Recent 5 Years (Note 1) Recent 5 Years (Note 1) Recent 5 Years (Note 1) Recent 5 Years (Note 1) Recent 5 Years (Note 1) End of
March 31,
2020
(Note 3)
2015 2016 2017 2018 2019
Current Assets 8,705,229 8,792,142 8,561,910 6,638,302 5,940,147 5,660,889
Fixed Assets 3,563,095 2,265,910 2,164,154 2,052,359 1,968,803 1,981,737
Intangible Assets 193,481 191,024 196,131 178,521 176,233 165,533
Other Assets 3,137,202 3,379,946 2,557,784 3,057,802 3,404,584 3,330,087
Total Assets 15,599,007 14,629,022 13,479,979 11,926,984 11,489,767 11,138,246
Current
Liabilities		 Before Distribution 2,740,858 3,045,403 2,190,116 1,684,729 1,342,416 1,140,035
After Distribution 3,267,733 3,134,084 2,517,667 1,684,729 (Note 2) (Note 2)
Non-Current Liabilities 1,632,909 895,442 646,578 374,649 574,660 573,249
Total
Liabilities		 Before Distribution 4,373,767 3,940,845 2,836,694 2,059,378 1,917,076 1,713,284
After Distribution 4,900,642 4,029,526 3,164,245 2,059,378 (Note 2) (Note 2)
Equity Attributed to Shareholder of
theparent		 9,530,012 9,024,254 8,966,236 8,465,942 8,178,533 8,002,761
Capital Stock Capital Stock Capital Stock 5,919,949 5,919,949 5,919,949 5,919,949 5,919,949 5,919,949
Capital Surplus 897,317 911,110 835,241 801,398 594,432 599,862
Retain
Earnings		 Before Distribution 2,444,655 2,012,196 2,336,709 2,250,839 1,988,579 1,863,942
After Distribution 1,917,780 1,923,515 2,009,158 2,250,839 (Note 2) (Note 2)
Unrealized Gain (Loss) on Financial
Merchandise		 331,492 244,400 (62,262) (442,843) (261,026) (317,591)
Cumulative translation adjustments (63,401) (63,401) (63,401) (63,401) (63,401) (63,401)
Unrealized Net Loss on the Costs of
Pensions		 1,695,228 1,663,923 1,677,049 1,401,664 1,394,158 1,422,201
Total
Equity		 Before Distribution 11,225,240 10,688,177 10,643,285 9,867,606 9,572,691 9,424,962
After Distribution 10,698,365 10,599,496 10,315,734 9,867,606 (Note 2) (Note 2)

Note 1: Figures are audited by adopting IFRSs Note 2: The 2019 loss appropriation plan is yet to be approved by the shareholders' meeting Note 3: Figures are reviewed by CPA adopting IFRSs

7.1.2 Balance Sheet by adopting IFRSs- Standalone

Unit: NT$K


Unit: NT$K
Unit: NT$K
Unit: NT$K
Unit: NT$K
Unit: NT$K
Year
Item		 Recent 5 Years (Note 1)
2015 2016 2017 2018 2019
Current Assets 3,273,115 3,267,397 2,942,735 1,909,420 1,292,316
Fixed Assets 744,937 722,145 682,943 687,187 688,706
Intangible Assets 67,742 68,497 62,141 86,495 86,258
Other Assets 7,279,247 6,465,991 6,055,212 6,268,285 6,663,491
Total Assets 11,365,041 10,524,030 9,743,031 8,951,387 8,730,771
Current
Liabilities		 Before Distribution 836,984 898,923 604,818 413,663 312,929
After Distribution 1,363,859 987,604 932,369 413,663 （Note 2）
Non-Current Liabilities 998,045 600,853 171,977 71,782 239,309
Total
Liabilities		 Before Distribution 1,835,029 1,499,776 776,795 485,445 552,238
After Distribution 2,361,904 1,588,457 1,104,346 485,445 （Note 2）
Equity Attributed to Shareholder of
theparent
Capital Stock 5,919,949 5,919,949 5,919,949 5,919,949 5,919,949
Capital Surplus 897,317 911,110 835,241 801,398 594,432
Retain Before Distribution 2,444,655 2,012,196 2,336,709 2,250,839 1,988,579
Earnings After Distribution 1,917,780 1,923,515 2,009,158 2,250,839 （Note 2）
Unrealized Gain (Loss) on Financial
Merchandise		 331,492 244,400 (62,262) (442,843) (261,026)
Cumulative translation adjustments (63,401) (63,401) (63,401) (63,401) (63,401)
Unrealized Net Loss on the Costs of
Pensions		 - - - - -
Total Equity Before Distribution 9,530,012 9,024,254 8,966,236 8,465,942 8,178,533
After Distribution 9,003,137 8,935,573 8,638,685 8,465,942 （Note 2）
  • If the company has prepared individual financial reports, it should prepare a separate condensed balance sheet and consolidated profit and loss statement for the individual in the last five years. * If the financial information using IFRS is less than 5 years, the following table (2) Financial information using my country’s financial accounting standards should be prepared separately. Note 1: Figures are audited by adopting IFRSs Note 2: The 2019 loss appropriation plan is yet to be approved by the shareholders' meeting.

7.1.3 Condensed Income Statement adopting IFRSs -Consolidated

Unit: NT$K

Unit: NT$K
Year
Item		 Recent 5 Years (Note 1) End of
March 31,
2020
(Note 2)
2015 2016 2017 2018 2019
Net Sales 8,465,833 7,556,045 6,820,237 6,077,733 5,512,330 1,042,456
Gross Profit(Loss) 3,522,625 3,202,488 2,736,766 2,429,384 2,374,575 488,522
Income from Operation(Loss) 566,540 236,391 47,185 (89,790) 131,741 (48,166)
Non-operatingIncome(Expense) 371,467 129,776 587,470 293,780 112,479 (43,633)
Income(Loss)Before Tax 938,007 366,167 634,655 203,990 244,220 (91,799)
Income (Loss) From Operations of
Continued Segments(Loss)		 856,125 272,506 551,228 142,323 174,752 (105,754)
Income (Loss) From Operations of
Discontinued Segments		 (27,845) - - - - -
Consolidated Net Income(Loss) 828,280 272,506 551,228 142,323 174,752 (105,754)
Other comprehensive income (Loss)
for theperiod,net of income tax		 18,282 (113,556) (320,167) (131,361) (102,073) (59,405)
Total Comprehensive Income (Loss)
for the Period		 846,562 158,950 231,061 10,962 72,679 (165,159)
Net Profit (Loss) Attributable to:
Owner of the Company		 589,348 120,187 421,458 5,616 15,309 (124,637)
Net Profit (Loss) Attributable to:
Non-controllinginterests		 238,932 152,319 129,770 136,707 159,443 18,883
Total Comprehensive Income (Loss)
Attributable to:
Owner of the Company		 609,203 26,577 109,174 (120,733) (77,049) (181,202)
Total Comprehensive Income (Loss)
Attributable to:
Non-controllinginterests		 237,359 132,373 121,887 131,695 149,728 16,043
Earningsper share(Loss) 1.00 0.20 0.72 0.01 0.03 (0.21)

Note 1: Figures are audited for the past-5 years by CPA adopting IFRSs Note 2: Figures are audited by adopting IFRSs.

7.1.4 Condensed Income Statement adopting IFRSs -Standalone

Unit: NT$K


Unit: NT$K
Unit: NT$K
Unit: NT$K
Unit: NT$K
Unit: NT$K
Year
Item		 Recent 5 Years (Note 1)
2015 2016 2017 2018 2019
Net Sales 2,671,392 1,904,224 1,365,802 1,238,780 1,235,269
Gross Profit(Loss) 1,011,207 767,713 473,255 429,308 499,903
Income from Operation(Loss) 167,996 (79,166) (273,494) (239,614) (269,444)
Non-operatingIncome(Expense) 453,504 200,242 694,952 247,374 289,540
Income(Loss)Before Tax 621,500 121,076 421,458 7,760 20,096
Income(Loss) From Operations of
Continued Segments(Loss)		 617,193 120,187 421,458 5,616 15,309
Income(Loss) From Operations of
Discontinued Segments		 (27,845) - - - -
Net Income(Loss) 589,348 120,187 421,458 5,616 15,309
Other comprehensive income (Loss)
for theperiod,net of income tax		 19,855 (93,610) (312,284) (126,349) (92,358)
Total Comprehensive Income(Loss)
for the Period		 609,203 26,577 109,174 (120,733) (77,049)
Net Profit(Loss)Attributable to: 589,348 120,187 421,458 5,616 15,309
Owner of the Company
Net Profit (Loss)Attributable to:
Non-controllinginterests		 - - - - -
Total Comprehensive Income
(Loss)Attributable to:
Owner of the Company		 609,203 26,577 109,174 (120,733) (77,049)
Total Comprehensive Income
(Loss)Attributable to:
Non-controllinginterests		 - - - - -
Earningsper share(Loss) 1.00 0.20 0.72 0.01 0.03
  • If the company has prepared individual financial reports, it should prepare a separate condensed balance sheet and consolidated profit and loss statement for the individual in the last five years. * If the financial information using IFRS is less than 5 years, the following table (2) financial information using my country’s financial accounting standards should be prepared separately. Note 1: Figures are audited for the past-5 years by CPA adopting IFRSs

7.1.5 Auditors’ Opinions

7.1.5 Auditors’ Opinions
Year CPA Audit Opinion
2015 Tung-Hui Yeh,Shu-JayHuang An unqualified opinion
2016 Zheng-Zhi Lin,Shu-JayHuang An unqualified opinion
2017 Zheng-Zhi Lin,Shu-JayHuang An unqualified opinion
2018 Zheng-Zhi Lin,Yu-FengHuang An unqualified opinion
2019 Zheng-Zhi Lin,Yu-FengHuang An unqualified opinion

7.2 Financial Analysis for recent 5 years

7.2.1 Financial Analysis (consolidated by IFRSs) Unit: NT$K

Year
Analysis Item		 Year
Analysis Item		 Recent 5 years (Note 1) Recent 5 years (Note 1) Recent 5 years (Note 1) Recent 5 years (Note 1) Recent 5 years (Note 1) End of
March
31, 2020
(Note 2)
2015 2016 2017 2018 2019
Capital
Structure		 Debts ratio(%) 28.03 26.93 21.04 17.26 16.68 15.38
Long-term fund to Property, plant and
equipment(%)		 350.30 495.04 503.31 480.79 486.21 475.59
Liquidity Current ratio(%) 317.60 288.70 390.93 394.02 442.49 496.55
Quick ratio(%) 257.15 251.00 319.47 326.66 368.28 394.03
Times interest earned(times) 2,518.77 1,020.20 2,519.94 956.27 1,082.81 Note 6
Operating
Performance		 Average collection turnover(times) 5.13 5.29 5.49 5.64 6.17 5.26
Average collection days 71 69 66 65 59 69
Inventoryturnover(times) 3.84 4.18 4.37 3.99 3.97 2.63
Payment turnover(times) 7.09 6.23 5.60 6.03 7.49 5.98
Average inventoryturnover days 95 87 83 91 92 138
Fixed assets turnover(times) 2.40 2.59 3.07 2.88 2.74 2.11
Property, plant and equipment turnover(times) 0.56 0.50 0.48 0.47 0.47 0.36
Profitability Return on total assets(%) 5.65 2.02 4.07 1.27 1.66 (0.90)
Return on stockholders’ equity (%) 7.47 2.48 5.16 1.38 1.79 (1.11)
Profit before tax to paid-in capital (%)
(Note 8)		 15.37 6.19 10.72 3.44 4.12 (1.55)
Profit after tax to net sales(%) 9.78 3.60 8.08 2.34 3.17 (10.14)
Earningsper share(NT$) 1.00 0.20 0.72 0.01 0.03 (0.21)
Cash Flow Cash flow ratio(%) 36.73 40.69 14.37 16.85 48.54 Note 7
Cash flow adequacyratio(%) (Note3) 46.54 54.36 77.50 56.71 81.59 65.91
Cash flow reinvestment ratio(%) 3.64 4.08 Note 4 Note 4 2.44 Note 7
Leverage Operatingleverage 5.55 11.54 49.66 Note 5 15.98 Note 5
Financial leverage 1.07 1.20 2.25 Note 5 1.23 Note 5
Variation Analysis 2019 vs. 2018
1. The reduction in interest protection multiples is mainly due to the decrease in net profit before interest expenses for the current
year.
2. The decrease in return on assets and return on equity was mainly due to the decrease in net profit after tax after the disposal of
investment benefits decreased during the year.
3. The decrease in the net profit ratio and the ratio of net profit before tax to paid-in capital is mainly due to the decrease in the
disposition of investment benefits during the year.
4. The decrease in basic earnings per share is mainly due to the decrease in net profit after tax for the year.
5. The decrease in the cash flow allowance ratio is mainly due to the decrease in net cash inflow from operating activities in the last
fiveyears.

Note 1: Figures have been audited by adopting IFRSs. Note 2: Figures 1Q’20ave been audited by adopting IFRSs. Note 3: Cash flow adequacy ratio of 2015~2016 is calculated based on the data by Taiwan GAAP. Note 4: Figures not listed due to cash flow from operating less than cash dividends.

Note 5: Figures not listed due to operating loss.

Note 6: The profit and loss before income tax and interest expenses are pure losses, so they are not shown. Note 7: Operating activities are net cash outflows, so they are not shown.

Note 8: for those stock without par value or par value not equal to NT$10, the ratio of Operating income to paid-in capital (%) is calculated by ratio to attributable to Owner of the Company.

7.2.2 Financial Analysis (Standalone) by IFRSs Unit: NT$K

Analysis Item Year Recent 5 years (Note 1) Recent 5 years (Note 1) Recent 5 years (Note 1) Recent 5 years (Note 1) Recent 5 years (Note 1)
2015 2016 2017 2018 2019
Capital
Structure		 Debts ratio(%) 16.14 14.25 7.97 5.42 6.32
Long-term fund to Property, plant and
equipment(%)		 1,400.06 1,322.92 1,327.52 1,231.97 1,187.52
Liquidity Current ratio(%) 391.06 363.47 486.54 461.58 412.97
Quick ratio(%) 334.88 319.86 426.00 393.47 315.12
Times interest earned(times) 2,662.46 687.97 5,155.27 259.53 396.35
Operating
Performance		 Average collection turnover(times) 4.00 4.26 4.95 6.65 7.88
Average collection days 91 86 74 55 46
Inventoryturnover(times) 2.86 3.23 3.34 3.03 2.77
Payment turnover(times) 7.26 8.57 6.33 6.61 8.61
Average inventoryturnover days 128 113 109 120 132
Fixed assets turnover(times) 3.51 2.59 1.94 1.80 1.79
Property, plant and equipment turnover(times) 0.23 0.17 0.13 0.13 0.13
Profitability Return on total assets(%) 5.39 1.25 4.22 0.10 0.23
Return on stockholders’ equity (%) 6.25 1.29 4.68 0.06 0.18
Profit before tax to paid-in capital (%)
(Note 4)		 10.02 2.04 7.11 0.13 0.33
Profit after tax to net sales(%) 22.06 6.31 30.85 0.45 1.23
Earningsper share(NT$) 1.00 0.20 0.72 0.01 0.03
Cash Flow Cash flow ratio(%) (Note2) 70.01 86.72 51.41 54.00 36.66
Cash flow adequacyratio(%) 97.84 84.41 137.53 92.68 88.14
Cash flow reinvestment ratio(%) 2.10 2.49 0.15 Note 5 Note 5
Leverage Operatingleverage 5.42 Note 3 Note 3 Note 3 Note 3
Financial leverage 1.17 Note 3 Note 3 Note 3 Note 3
Variation Analysis 2017 vs. 2016
1. The increase in interest protection multiples was mainly due to the increase in net profit before tax this year.
2. The increase in the payables turnover rate was mainly due to the decrease in accounts payable during the year.
3. The increase in return on assets and return on equity was mainly attributable to the increase in the profit and loss after taxation
of subsidiaries, related companies and joint ventures that adopted the equity method during the year.
4. The increase in net profit before tax to paid-in capital ratio, net profit ratio and earnings per share was mainly due to the
increase in the profit and loss after taxation of the subsidiaries, affiliates and joint ventures that adopted the equity method in
thisyear.

  1. The decrease in cash flow ratio is mainly due to the decrease in net cash inflow from operating activities.

  2. If the company has prepared individual financial reports, it should separately prepare an analysis of the company's individual financial ratios.

  3. If the financial information adopting IFRS is less than 5 years, the following table (2) financial information adopting my country’s financial accounting standards should be prepared separately.

1. Capital Structure Analysis

  • (1) Debts ratio = Total Liabilities/Total Assets (2) Long term fund to Property, plant and = (Total Equity + Non-Current Liabilities)/ Property, plant and equipment equipment

    1. Liquidity Analysis (1) Current Ratio = Current Assets/Current Liabilities (2) Quick Ratio = (Current Assets – Inventories – Prepaid Expenses)/Current Liabilities (3) Times Interest Earned = Earnings before Interest and Taxes/Interest Expenses
    1. Operating Performance Analysis (1) Average Collection Turnover = Net Sales/Average Trade Receivables (2) Average Collection Days = 365/Receivables Turnover Rate (3) Average Inventory Turnover = Cost of Sales/Average Inventory (4) Average Payment Turnover = Cost of Sales/Average Trade Payables (5) Average Inventory Turnover Days = 365/Average Inventory Turnover (6) Property, plant and equipment Turnover = Net Sales/ Average Property, plant and equipment

  • (7) Total Assets Turnover

= Net Sales/Average Total Assets

  1. Profitability Analysis

  2. (1) Return on Total Assets

  3. (2) Return Ratio on Stockholders’ Equity (3) Profit after Tax to Net Sales (4) Earnings Per Shares

    • = {Net Income + Interest Expense × (1 – Effective tax rate)}/Average Total Assets

    • = Net Income/Average Total Equity

    • = Net Income/Net Sales

    • = (Net Profit Attributable to Owner of the Company – Preferred Stock Dividend)/ Weighted Average Number of Shares Outstanding

  4. Cash Flow (1) Cash Flow Rate (2) Cash Flow Adequacy Ratio

  5. (3) Cash flow reinvestment ratio

  6. = Net Cash Provided by Operating Activities/Current Liabilities

  7. = Five-Year Cash from Sum of Operations /(Five-Year Capital Expenditure + Inventory Increase + Cash Dividend)

  8. = (Net Cash Provided by Operating Activities – Cash Dividend)/( Property, plant and equipment + Long-term Investment + Other Non-current Assets + Working Capital) (Note3)

  9. Leverage (1) Operating Leverage = (Net Sales – Operating Expenses & Cost)/Operating Income (Note4) (2) Financial Leverage = Operating Income/(Operating Income – Interest Expenses)

Note 1: Figures have been audited by adopting IFRSs.

Note 2: The calculation of the cash flow tonnage ratio from 2015 to 2016 is calculated using the previous year's ROC information.

Note 3: Net operating loss, it is not listed Note 4: for those stock without par value or par value not equal to NT$10, the ratio of Operating income to paid-in capital (%) is calculated by ratio to attributable to Owner of the Company Note 5: The net cash flow from operating activities is less than the number of cash dividends issued, so it is not listed.

7.3 Audit Committee’s Report

Sunplus Technology Co., Ltd. Audit Committee’s Report

Sunplus’ Board has submitted the 2019 business report, financial statements and loss appropriation proposals, etc. The Deloitte & Touche CPA firm has audited the financial statements, and issued an audit report. The Audit Committee has reviewed the 2017 business report, financial statements and loss appropriation proposals, and verified that they comply with the Company Law and relevant regulations. According to Article14-4of Securities Exchange Law and Article 219 of the Company Law, I hereby submit this report.

To Sunplus 2020 Annual General Shareholders’ Meeting

Sunplus Technology Co., Ltd. Audit Committee Convener, Che-Ho Wei

March 30th, 2020

7.4 Consolidated Financial Statements and Auditors' Audit Report

Sunplus Technology Company Limited and Subsidiaries

Consolidated Financial Statements for the Years Ended December 31, 2019 and 2018 and Independent Auditors’ Report

DECLARATION OF CONSOLIDATION OF FINANCIAL STATEMENTS OF AFFILIATES

The companies required to be included in the consolidated financial statements of affiliates in accordance with the “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises” for the year ended December 31, 2019 are all the same as the companies required to be included in the consolidated financial statements of parent and subsidiary companies as provided in International Financial Reporting Standard No. 10 “Consolidated Financial Statements”. Relevant information that should be disclosed in the consolidated financial statements of affiliates has all been disclosed in the consolidated financial statements of parent and subsidiary companies. Hence, we do not prepare a separate set of consolidated financial statements of affiliates.

Very truly yours,

Sunplus Technology Company Limited

By

CHOU-CHYE HUANG Chairman

March 30, 2020

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders Sunplus Technology Company Limited

Opinion

We have audited the accompanying consolidated financial statements of Sunplus Technology Company Limited and its subsidiaries (collectively referred to as the “Group”) as of December 31, 2019 and 2018, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies (collectively referred to as the “consolidated financial statements”).

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2019 and 2018, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

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 Consolidated Financial Statements section of our report. We are independent of the Group in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. 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 the consolidated financial statements for the year ended December 31, 2019. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Validity of Specific Customer's Revenue

Integrated circuit chip sales accounted for 93% of the Group’s total revenue. Operating income declined in 2019, but sales to some customers increased significantly. Therefore, we deem revenue recognition as a key audit matter. For detailed explanation of revenue, refer to Notes 4 and 23 to the accompanying consolidated financial statements.

  1. We understood the related internal control and operating procedures in the sales transaction cycle, and we evaluated and confirmed the operating effectiveness of the internal control and operating procedures.

  2. We selected samples from the sales details, and we examined customers’ original orders, sales electronic orders, delivery orders, logistics receipt documents or export declaration, and sales invoices for any abnormal situations and confirmed the validity of the revenue.

Other Matter

We have also audited the parent company only financial statements of Sunplus Technology Company Limited as of and for the years ended December 31, 2019 and 2018 on which we have issued an unmodified opinion.

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

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

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

Those charged with governance, including the audit committee, are responsible for overseeing the Group’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ 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 the auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

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

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

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

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

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

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

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

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2019 and are therefore the key audit matters. We describe these matters in our auditors’ 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.

The engagement partners on the audit resulting in this independent auditors’ report are Cheng-Chih Lin and Yu-Feng Huang.

Deloitte & Touche Taipei, Taiwan Republic of China

March 30, 2020

Notice to Readers

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

For the convenience of readers, the independent auditors’ report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and consolidated financial statements shall prevail.

SUNPLUS TECHNOLOGY COMPANY LIMITED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

ASSETS
CURRENT ASSETS
Cash and cash equivalents (Notes 4 and 6)

Financial assets at fair value through profit or loss - current (Notes 4 and 7)
Notes and accounts receivable, net (Notes 4, 5, 9, 23 and 33)
Other receivables (Notes 4 and 33)
Inventories (Notes 4 and 10)
Other financial assets - current (Notes 17 and 34)
Other current assets (Note 17)

Total current assets

NON-CURRENT ASSETS
Financial assets at fair value through profit or loss - non-current (Notes 4 and 7)
Financial assets at fair value through other comprehensive income - non-current (Notes 4 and 8)
Investments accounted for using the equity method (Notes 4 and 12)
Property, plant and equipment (Notes 4, 5 and 13)
Right-of-use assets (Notes 3, 4, 5 and 14)
Investment properties (Notes 4 and 15)
Intangible assets (Notes 4, 5 and 16)
Deferred tax assets (Notes 4 and 25)
Net defined benefit assets - non-current (Notes 4 and 21)
Other financial assets - non-current (Notes 17 and 34)
Other non-current assets (Notes 17 and 33)

Total non-current assets

TOTAL

LIABILITIES AND EQUITY
CURRENT LIABILITIES
Short-term borrowings (Notes 18 and 34)

Contract liabilities - current (Note 23)
Accounts payable (Note 19)
Current tax liabilities (Notes 4 and 25)
Lease liabilities - current (Notes 3, 4, 5 and 14)
Deferred revenue - current (Notes 4, 20 and 27)
Current portion of long-term bank borrowings (Notes 18 and 34)
Other current liabilities (Note 20)

Total current liabilities

NON-CURRENT LIABILITIES
Lease liabilities - non-current (Notes 3, 4, 5 and 14)
Deferred revenue - non-current (Notes 4, 20 and 27)
Net defined benefit liabilities - non-current (Notes 4 and 21)
Guarantee deposits (Note 33)
Other liabilities (Note 20)

Total non-current liabilities

Total liabilities

EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY (Notes 4, 22 and 30)
Share capital
Ordinary shares

Capital surplus

Retained earnings
Legal reserve
Special reserve
(Deficits not yet compensated) unappropriated earnings

Total retained earnings

Other equity

Treasury shares

Total equity attributable to owners of the Company
NON-CONTROLLING INTERESTS (Notes 4, 11, 22 and 30)

Total equity

TOTAL
 2019
Amount
%
$ 3,020,628 26
1,090,679 10
832,633
7
28,159
-
759,211
7
119,920
1

88,917

1


5,940,147
52

1,027,445
9
189,387
2
695,028
6
1,968,803 17
241,914
2
1,066,797
9
176,233
2
28,754
-
1,163
-
140,049
1

14,047

-


5,549,620
48

$ 11,489,767
100

$ 323,626
3
24,912
-
352,155
3
52,169
1
11,885
-
1,568
-
-
-

576,101

5


1,342,416
12

230,251
2
58,015
-
64,258
1
213,579
2

8,557

-


574,660

5


1,917,076
17


5,919,949
52


594,432

5

1,942,388 17
308,452
2

(262,261)

(2)


1,988,579
17


(261,026)

(2)


(63,401)

(1)

8,178,533 71

1,394,158
12


9,572,691
83

$ 11,489,767
100
 2018




































































Amount
%
$ 3,235,721 27

1,313,747 11

954,030
8

70,960
1

818,948
7

153,575
1

91,321

1

6,638,302
56

737,867
6

246,208
2

729,219
6

2,052,359 17

-
-

1,039,314
9

178,521
2

30,254
-

-
-

127,215
1

147,725

1

5,288,682
44
$ 11,926,984
100
$ 311,215
3

7,511
-

484,810
4

56,972
-

-
-

1,629
-

250,046
2

572,546

5

1,684,729
14

-
-

61,894
-

79,313
1

230,177
2

3,265

-

374,649

3

2,059,378
17

5,919,949
50

801,398

7

1,941,826 16

67,279
1

241,734

2

2,250,839
19

(442,843)

(4)

(63,401)

(1)

8,465,942 71

1,401,664
12

9,867,606
83
$ 11,926,984
100

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

SUNPLUS TECHNOLOGY COMPANY LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

NET OPERATING REVENUE (Notes 4, 23, and 33)

OPERATING COSTS (Notes 10 and 24)

GROSS PROFIT

OPERATING EXPENSES (Notes 24 and 33)
Selling and marketing expenses
General and administrative expenses
Research and development expenses
Expected credit gain (Note 9)

Total operating expenses

OTHER OPERATING INCOME AND EXPENSES

PROFIT (LOSS) FROM OPERATIONS

NON-OPERATING INCOME AND EXPENSES (Notes 4,
14, 24, 27 and 33)
Other income
Other gains and losses
Finance costs
Share of loss of associates

Total non-operating income and expenses

PROFIT BEFORE INCOME TAX
INCOME TAX EXPENSE (Notes 4 and 25)

NET PROFIT FOR THE YEAR

OTHER COMPREHENSIVE INCOME (LOSS)
Items that will not be reclassified subsequently to profit or
loss (Notes 4 and 22):
Remeasurement of defined benefit plans
Unrealized gain (loss) on investments in equity
instruments at fair value through other
comprehensive income		 2019
Amount
%
$ 5,512,330
100

3,137,755
57


2,374,575
43

263,373
5
498,466
9
1,481,269
27

(73)

-


2,243,035
41


201

-


131,741

2

156,116
3
1,127
-
(24,849)
(1)

(19,915)

-


112,479

2

244,220
4

69,468

1


174,752

3

4,864
-
(21,444)
-		 2018





























Amount
%
$ 6,077,733
100

3,648,349
60

2,429,384
40

286,562
5

532,943
9

1,699,345
28

-

-

2,518,850
42

(324)

-

(89,790)

(2)

116,463
2

246,002
4

(23,823)
-

(44,862)

(1)

293,780

5

203,990
3

61,667

1

142,323

2

1,845
-

(103,685)
(2)
(Continued)

SUNPLUS TECHNOLOGY COMPANY LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Share of the other comprehensive income (loss) of
associates accounted for using the equity method
Items that may be reclassified subsequently to profit or loss
(Notes 4 and 22):
Exchange differences on translating the financial
statements of foreign operations
Share of other comprehensive loss of associates
accounted for using the equity method

Other comprehensive loss for the year, net of income
tax

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

NET PROFIT ATTRIBUTABLE TO:
Owners of the Company

Non-controlling interests


TOTAL COMPREHENSIVE INCOME (LOSS)
ATTRIBUTABLE TO:
Owners of the Company

Non-controlling interests


EARNINGS PER SHARE (Note 26)
Basic

Diluted
 2019
Amount
%
3,789
-
(84,888)
(2)

(4,394)

-


(102,073)

(2)

$ 72,679

1

$ 15,309
-

159,443

3

$ 174,752

3

$ (77,049)
(2)

149,728

3

$ 72,679

1

$ 0.03

$ 0.03
 2018






















Amount
%

(8,556)
-

(18,061)
-

(2,904)

-

(131,361)

(2)
$ 10,962

-
$ 5,616
-

136,707

2
$ 142,323

2
$ (120,733)
(2)

131,695

2
$ 10,962

-
$ 0.01
$ 0.01

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

(Concluded)

(In Thousands of New Taiwan Dollars)

SUNPLUS TECHNOLOGY COMPANY LIMITED AND SUBSIDIARIES

STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018

BALANCE AT JANUARY 1, 2018
Appropriation of 2017 earnings
Legal reserve
Special reserve
Cash dividends to shareholders
Changes in capital surplus from investments in associates accounted for using the
equity method
Issuance of share dividends from capital surplus
Difference between share price and carrying amount from disposal of subsidiaries
Changes of equity of subsidiaries
Net profit for the year ended December 31, 2018
Other comprehensive income (loss) for the year ended December 31, 2018, net of
income tax

Total comprehensive income (loss) for the year ended December 31, 2018

Adjustment of capital surplus for the Company
Cash dividends received by subsidiaries
Disposals of investments in equity instruments designated as at fair value through other
comprehensive income

Decrease in non-controlling interests

BALANCE AT DECEMBER 31, 2018
Appropriation of 2018 earnings
Legal reserve
Special reserve
Cash dividends to sharesholders
Changes in capital surplus from investments in associates accounted for using the
equity method
Issuance of share dividends from capital surplus		 Equity Attributable to Ow Equity Attributable to Ow ners of the Company Total
$ 8,970,675


-
-
(327,551 )
50,782
(86,846 )
(271 )
(22,606 )
5,616

(126,349)


(120,733)

2,492

-


-


8,465,942
-
-
-
4,709
(213,118 )		 Non-controlling
Interests
$ 1,678,527


-
-

-
-

-

-

-
136,707

(5,012)


131,695

-

-


(408,558)

1,401,664
-
-
-
-

-		 Total Equity
$ 10,649,202
-
-
(327,551 )
50,782
(86,846 )
(271 )
(22,606 )
142,323

(131,361)

10,962
2,492

-

(408,558)
9,867,606
-
-
-
4,709
(213,118 )
Share Capital Issued and
Outstanding
Share
(Thousands)
Amount
591,995
$ 5,919,949

-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-

-

-


-

-

-
-

-

-


-

-

591,995
5,919,949
-
-
-
-
-
-
-
-
-
-		 Capital Surplus
$ 835,241

-
-
-
50,782
(86,846 )
(271 )
-
-

-


-

2,492

-


-

801,398
-
-
-
4,709
(213,118 )		 Retained Earnings Unappropriated
Earnings
(Deficits not yet
Compensated)

$ 707,497

(41,321 )
(44,284 )

(327,551 )
-
-
-
(22,606 )
5,616

1,453


7,069

-

(37,070)


-

241,734
(562 )
(241,173 )
-
-
-		 Other Equity
Unrealized Gain
Exchange
(Loss) on
Differences on
Financial Assets
Translating the
at Fair Value
Financial
Through Other
Statements of
Comprehensive
Foreign Operations
Income
$ (122,100 ) $ (230,011 )

-
-

-
-

-
-
-
-
-
-
-
-

-
-
-
-

(16,775)

(111,027)


(16,775)

(111,027)

-
-

-

37,070


-

-

(138,875 )
(303,968 )


-
-

-
-
-
-
-
-
-
-		 Treasury Shares
$ (63,401 )
-
-
-
-
-
-
-
-

-


-

-

-


-


(63,401 )
-
-
-
-
-
Exchange
Differences on
Translating the
Financial
Statements of
Foreign Operations
$ (122,100 )

-

-

-
-
-
-

-
-

(16,775)


(16,775)

-

-


-

(138,875 )


-

-
-
-
-







Legal Reserve
$ 1,900,505

41,321
-
-
-

-

-
-
-

-


-

-

-


-

1,941,826
562
-
-
-

-		 Special Reserve
$ 22,995

-
44,284
-

-
-
-
-
-

-


-

-

-


-

67,279
-
241,173
-
-
-



Share
(Thousands)
591,995

-
-
-
-
-
-
-
-

-


-

-

-


-

591,995
-
-
-
-
-
Difference between share price and carrying amount from disposal of subsidiaries
Changes of equity of subsidiaries
Net profit for the year ended December 31, 2019
Other comprehensive income (loss) for the year ended December 31, 2019, net of
income tax

Total comprehensive income (loss) for the year ended December 31, 2019

Adjustment of capital surplus for the Company
Cash dividends received by subsidiaries
Decrease in non-controlling interests
Disposals of investments in equity instruments designated as at fair value through other
comprehensive income

BALANCE AT DECEMBER 31, 2019
 -
-
-

-


-

-
-

-


591,995
 -
-
-

-


-

-
-

-

$ 5,919,949
 162
-
-

-


-

1,281
-

-

$ 594,432
 -
-
-

-


-

-
-

-

$ 1,942,388
 -
-
-

-


-

-
-

-

$ 308,452
 -
(3,394 )
15,309

5,339


20,648

-
-

(279,514)

$ (262,261)
 -

-
-

(79,905)


(79,905)

-
-

-

$ (218,780)
 -
-
-

(17,792)


(17,792)

-
-

279,514

$ (42,246)
 -
-
-

-


-

-
-

-

$ (63,401)
 162
(3,394 )
15,309

(92,358)


(77,049)

1,281
-

-

$ 8,178,533
 -

-
159,443

(9,715)


149,728

-
(157,234 )

-

$ 1,394,158
 162
(3,394 )
174,752

(102,073)

72,679
1,281

(157,234 )

-
$ 9,572,691

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

SUNPLUS TECHNOLOGY COMPANY LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax

Adjustments for:
Depreciation expenses
Amortization expenses
Expected credit loss reversed on trade receivables
Net gain on fair value change of financial assets designated as of fair value
through profit or loss
Finance costs
Interest income
Dividend income
Compensation costs of employee share options
Share of profits of associates
(Gain) loss on disposal of property, plant and equipment
Gain on disposal of intangible assets
(Gain) loss on disposal of subsidiaries
Gain on disposal of investments
Net loss on foreign currency exchange
Gain on lease modification
Amortization of prepaid lease payments
Changes in operating assets and liabilities:
Decrease in trade receivables
Decrease in other receivables
Decrease (increase) in inventories
Increase in other current assets
Increase in net defined benefits assets - non-current
Decrease in trade payables
Increase in contract liabilities
Decrease in deferred revenue
Increase (decrease) in other current liabilities
Decrease in defined benefits liabilities - non-current

Cash generated from operations
Interest received
Dividends received
Interest paid
Income tax paid

Net cash generated from operating activities

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of financial assets at FVTOCI
Purchase of financial assets at FVTPL
Proceeds from the sale of financial assets at FVTPL
Proceeds from the sale of financial assets at FVTOCI
Acquisition of associates
Net cash outflow on acquisition of subsidiaries (Note 28)
Proceeds from disposal of subsidiaries
Payments for property, plant and equipment
Proceeds of the disposal of property, plant and equipment
Increase in refundable deposits		 2019
$ 244,220
282,554
77,812
(73)
(17,879)
24,849
(24,578)
(28,815)
-
19,915
(161)
(39)
43
-
8,984
(1)
-
114,248
41,197
59,737
(132)
(1,163)
(130,606)
17,401
(1,629)
4,465

(10,191)

680,158
26,584
45,274
(27,923)

(72,440)


651,653

-
(1,588,698)
1,572,327
25,990
-
(48,215)
(744)
(138,970)
4,239
(459)		 2018
$ 203,990

275,786

82,237

-

(67,736)

23,823

(22,896)

(26,982)

37

44,862

324

-

(170,897)

(11,724)

34,248

-

2,810

114,488

11,333

(17,157)

(6,368)

-

(89,495)

27,331

(3,659)

(153,224)

(4,309)

246,822

21,707

101,047

(20,370)

(65,287)

283,919

(105,213)

(1,764,316)

2,060,690

4,930

(110,368)

-

(159,571)

(173,729)

568

(2,039)

(Continued)

SUNPLUS TECHNOLOGY COMPANY LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

Decrease in refundable deposits
Payments for intangible assets
Proceeds of disposal of intangible assets
Payments for investment properties
Decrease in investment properties
Decrease on other financial assets - non-current
Decrease in other assets - non-current

Net cash (used in) generated from investing activities

CASH FLOWS FROM FINANCING ACTIVITIES
Repayments of short-term borrowings
Repayments of long-term borrowings
Proceeds of guarantee deposits received
Refunds of guarantee deposits received
Repayment of principal portion of lease liabilities
Increase in other liabilities
Cash dividends paid
Dividends paid to non-controlling interests
Decrease in non-controlling interests

Net cash used in financing activities

EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH
HELD IN FOREIGN CURRENCIES

NET DECREASE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR

CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR
 2019
1,871
(78,623)
484
(1,488)
-
10,909

-


(241,377)

15,000
(248,544)
22,168
(33,729)
(11,303)
4,758
(211,837)
(157,520)

(2,184)


(623,191)


(2,178)

(215,093)

3,235,721

$ 3,020,628
 2018

62

(84,655)

-

(3,891)

10,016

10,635

3,570

(313,311)

(132,566)

(179,088)

47,914

(18,331)

-

-

(411,905)

(169,798)

(31,266)

(895,040)

3,876

(920,556)

4,156,277
$ 3,235,721

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

(Concluded)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

SUNPLUS TECHNOLOGY COMPANY LIMITED AND SUBSIDIARIES

1. GENERAL INFORMATION

Sunplus Technology Company Limited (“Sunplus” or the “Company”) was established in August 1990. It researches, develops, designs, tests and sells high quality, high value-added consumer integrated circuits (ICs). Its products are based on core technologies in such areas as multimedia audio/video, single-chip microcontrollers and digital signal processors. These technologies are used to develop hundreds of products including various ICs: liquid crystal display, microcontroller, multimedia, voice/music, and application-specific. Sunplus’ shares have been listed on the Taiwan Stock Exchange since January 2000. Some of its shares have been issued in the form of global depositary receipts (GDRs), which have been listed on the London Stock Exchange since March 2001 (refer to Note 22).

Following is a diagram of the relationship and ownership percentages between Sunplus and its subsidiaries (collectively, the “Group”) as of December 31, 2019:

==> picture [490 x 275] intentionally omitted <==

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Sunplus Technology
92.55% 100% 100%
Award Sunplus Sunplus HK Ventureplus Sunplus Lin Shih Sunplus Jumplux Sunext Sunplus
Sunny Ventureplus Generalplus
Sunplus
Worldplus Giant Giant Ventureplus Generalplus
Lingyao
Technology
(Shenzhen) Co., Ltd. Ytrip Sunplus App Sunplus Sunplus Sunplus SunMedia Generalplus Generalplus
1culture Shuangxin Jsilicon
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The consolidated financial statements are presented in the Company’s functional currency, the New Taiwan dollar.

2. APPROVAL OF FINANCIAL STATEMENTS

The consolidated financial statements were approved by the Company’s board of directors and authorized for issue on March 30, 2020.

3. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERPRETATIONS

  • a. Initial application of the amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), Interpretations of IFRS (IFRIC), and Interpretations of IAS (SIC) endorsed and issued into effect by the Financial Supervisory Commission (FSC)

Except for the following, the initial application of the amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRSs endorsed and issued into effect by the FSC did not have any material impact on the Company’s accounting policies:

1) IFRS 16 “Leases”

IFRS 16 provides a comprehensive model for the identification of lease arrangements and their treatment in the financial statements of both lessee and lessor. It supersedes IAS 17 “Leases”, IFRIC 4 “Determining whether an Arrangement contains a Lease”, and a number of related interpretations. Refer to Note 4 for information relating to the relevant accounting policies.

Definition of a lease

The Group elects to apply the guidance of IFRS 16 in determining whether contracts are, or contain, a lease only to contracts entered into (or changed) on or after January 1, 2019. Contracts identified as containing a lease under IAS 17 and IFRIC 4 are not reassessed and are accounted for in accordance with the transitional provisions under IFRS 16.

The Group as lessee

The Group recognizes right-of-use assets or investment properties if the right-of-use assets meet the definition of investment properties, and lease liabilities for all leases on the consolidated balance sheets except for those whose payments under low-value asset and short-term leases are recognized as expenses on a straight-line basis. On the consolidated statements of comprehensive income, the Group presents the depreciation expense charged on right-of-use assets separately from the interest expense accrued on lease liabilities; interest is computed using the effective interest method. On the consolidated statements of cash flows, cash payments for the principal portion of lease liabilities are classified within financing activities; cash payments for the interest portion are classified within operating activities. Prior to the application of IFRS 16, payments under operating lease contracts were recognized as expenses on a straight-line basis. Cash flows for operating leases were classified within operating activities on the consolidated statements of cash flows.

Lease liabilities were recognized on January 1, 2019 for leases previously classified as operating leases under IAS 17. Lease liabilities were measured at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate on January 1, 2019. Right-of-use assets are measured at an amount equal to the lease liabilities. The Group applies IAS 36 to all right-of-use assets.

The lessee’s weighted average incremental borrowing rate applied to lease liabilities recognized on January 1, 2019 is 1.58%-2.39%. The difference between the (i) lease liabilities recognized and (ii) operating lease commitments disclosed under IAS 17 on December 31, 2018 is explained as follows:

The future minimum lease payments of non-cancellable operating lease commitments on
December 31, 2018


Less: Recognition exemption for short-term leases and leases of low-value assets



Undiscounted amounts on January 1, 2019



Discounted amounts using the incremental borrowing rate on January 1, 2019


Add: Adjustments as a result of a different treatment of extension and termination options

Lease liabilities recognized on January 1, 2019
 $ 99,174

-
$ 99,174
$ 88,507

161,220
$ 249,727

The Group as lessor

The Group does not make any adjustments for leases in which it is a lessor, and it accounts for those leases with the application of IFRS 16 starting from January 1, 2019.

The impact on assets, liabilities and equity as of January 1, 2019 from the initial application of IFRS 16 is set out as follows:

As Originally
Stated on
January 1, 2019
Prepayments for leases - current
$ 2,756

Prepayments for leases - non-current

102,175
Right-of-use assets

-
Investment properties

1,039,314


Total effect on assets
$ 1,144,245


Lease liabilities - current
$ -

Lease liabilities - non-current

-

Total effect on liabilities
$ -
 Adjustments
Arising from
Initial
Application
Restated on
January 1, 2019
$ (2,756) $ -
(102,175)
-
251,956
251,956

102,702

1,142,016
$ 249,727
$ 1,393,972
$ 10,907
$ 10,907

238,820

238,820
$ 249,727
$ 249,727
  • 2) IFRIC 23 “Uncertainty over Income Tax Treatments”

IFRIC 23 clarifies that when there is uncertainty over income tax treatments, the Company should assume that the taxation authority will have full knowledge of all related information when making related examinations. If the Company concludes that it is probable that the taxation authority will accept an uncertain tax treatment, the Company should determine the taxable profit, tax bases, unused tax losses, unused tax credits or tax rates consistently with the tax treatments used or planned to be used in its income tax filings. If it is not probable that the taxation authority will accept an uncertain tax treatment, the Company should make estimates using either the most likely amount or the expected value of the tax treatment, depending on which method the entity expects to better predict the resolution of the uncertainty. The Company has to reassess its judgments and estimates if facts and circumstances change.

  • 3) Amendments to IAS 28 “Long-term Interests in Associates and Joint Ventures”

The amendments clarified that IFRS 9 “Financial Instruments” shall be applied to account for other financial instruments in an associate or joint venture to which the equity method is not applied. These included long-term interests that, in substance, form part of the Group’s net investment in an associate or joint venture.

  • 4) Amendments to IAS 19 “Plan Amendment, Curtailment or Settlement”

The amendments stipulate that, if a plan amendment, curtailment or settlement occurs, the current service cost and the net interest for the remainder of the annual reporting period are determined using the actuarial assumptions used for the remeasurement of the net defined benefit liabilities (assets). In addition, the amendments clarify the effect of a plan amendment, curtailment or settlement on the requirements regarding the asset ceiling. The Group applied the above amendments prospectively.

  • b. The IFRSs endorsed by the Financial Supervisory Commission (FSC) for application starting from 2020
New IFRSs
Amendments to IFRS 3 “Definition of a Business”

Amendments to IFRS 9, IAS 39 and IFRS 7 “Interest Rate Benchmark
Reform”

Amendments to IAS 1 and IAS 8 “Definition of Material”
 Effective Date
Announced by IASB
January 1, 2020 (Note 1)
January 1, 2020 (Note 2)
January 1, 2020 (Note 3)

  • Note 1: The Group shall apply these amendments to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after January 1, 2020 and to asset acquisitions that occur on or after the beginning of that period.

  • Note 2: The Group shall apply these amendments retrospectively for annual reporting periods beginning on or after January 1, 2020.

  • Note 3: The Group shall apply these amendments prospectively for annual reporting periods beginning on or after January 1, 2020.

As of the date the consolidated financial statements were authorized for issue, the Group is continuously assessing the possible impact that the application of other standards and interpretations will have on the Group’s financial position and financial performance and will disclose the relevant impact when the assessment is completed.

  • c. New IFRSs in issue but not yet endorsed and issued into effect by the FSC
New IFRSs
Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between
an Investor and its Associate or Joint Venture”

IFRS 17 “Insurance Contracts”

Amendments to IAS 1 “Classification of Liabilities as Current or Non-current”		 Effective Date
Announced by IASB (Note 1)
To be determined by IASB
January 1, 2021
January 1, 2022

Note 1: Unless stated otherwise, the above New IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.

  • 1) Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture”

The amendments stipulate that, when the Group sells or contributes assets that constitute a business (as defined in IFRS 3) to an associate or joint venture, the gain or loss resulting from the transaction is recognized in full. Also, when the Group loses control of a subsidiary that contains a business but retains significant influence or joint control, the gain or loss resulting from the transaction is recognized in full.

Conversely, when the Group sells or contributes assets that do not constitute a business to an associate or joint venture, the gain or loss resulting from the transaction is recognized only to the extent of the Group’s interest as an unrelated investor in the associate or joint venture, i.e., the Group’s share of the gain or loss is eliminated. Also, when the Group loses control of a subsidiary that does not contain a business but retains significant influence or joint control over an associate or a joint venture, the gain or loss resulting from the transaction is recognized only to the extent of the Group’s interest as an unrelated investor in the associate or joint venture, i.e., the Group’s share of the gain or loss is eliminated.

  • 2) Amendments to IAS 1 “Classification of Liabilities as Current or Non-current”

The amendments clarify that for a liability to be classified as non-current, the Group shall assess whether it has the right at the end of the reporting period to defer settlement of the liability for at least twelve months after the reporting period. If such rights are in existence at the end of the reporting period, the liability is classified as non-current regardless of whether the Group will exercise that right. The amendments also clarify that, if the right to defer settlement is subject to compliance with specified conditions, the Group must comply with those conditions at the end of the reporting period even if the lender does not test compliance until a later date.

The amendments stipulate that, for the purpose of liability classification, the aforementioned settlement refers to a transfer of cash, other economic resources or the Group’s own equity instruments to the counterparty that results in the extinguishment of the liability. However, if the terms of a liability that could, at the option of the counterparty, result in its settlement by a transfer of the Group’s own equity instruments, and if such option is recognized separately as equity in accordance with IAS 32: Financial Instruments: Presentation, the aforementioned terms would not affect the classification of the liability.

Except for the above impact, as of the date the consolidated financial statements were authorized for issue, the Group is continuously assessing the possible impact that the application of other standards and interpretations will have on the Group’s financial position and financial performance and will disclose the relevant impact when the assessment is completed.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  • a. Statement of Compliance

The consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and IFRSs as endorsed and issued into effect by the FSC.

b. Basis of preparation

The consolidated financial statements have been prepared on the historical cost basis except for financial instruments that are measured at fair values, and net defined benefit liabilities which are measured at the present value of the defined benefit obligation less the fair value of plan assets.

The fair value measurements are grouped into Levels 1 to 3 based on the degree to which the fair value measurement inputs are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

  • 1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;

  • 2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and

  • 3) Level 3 inputs are unobservable inputs for the asset or liability.

  • c. Classification of current and non-current assets and liabilities

Current assets include:

  • 1) Assets held primarily for the purpose of trading;

  • 2) Assets expected to be realized within 12 months after the reporting period; and

  • 3) Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period.

Current liabilities include:

  • 1) Liabilities held primarily for the purpose of trading;

  • 2) Liabilities due to be settled within 12 months after the reporting period, and

  • 3) Liabilities for which the Group does not have an unconditional right to defer settlement for at least 12 months after the reporting period.

Assets and liabilities that are not classified as current are classified as non-current.

  • d. Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and the entities controlled by the Company (i.e., its subsidiaries).

Income and expenses of subsidiaries acquired or disposed of during the period are included in the consolidated statement of profit or loss and other comprehensive income from the effective date of acquisition up to the effective date of disposal, as appropriate.

When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the Company.

All intra-group transactions, balances, income and expenses are eliminated in full upon consolidation. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the no controlling interests even if this results in the no controlling interests having a deficit balance.

Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group’s interests and the no controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the no controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to the owners of the Company.

When the Group loses control of a subsidiary, a gain or loss is recognized in profit or loss and is calculated as the difference between (i) the aggregate of the fair value of the consideration received and any investment retained in the former subsidiary at its fair value at the date when control is lost and (ii) the assets (including any goodwill) and liabilities and any no controlling interests of the former subsidiary at their carrying amounts at the date when control is lost. The Group accounts for all amounts recognized in other comprehensive income in relation to that subsidiary on the same basis as would be

required if the Group had directly disposed of the related assets or liabilities.

The fair value of investment retained in subsidiaries at the date when control is lost is regarded as the fair value on the initial recognition of the investment in an associate.

See Note 11 and Tables 6 and 7 for detailed information on subsidiaries (including percentages of ownership and main businesses).

e. Foreign currencies

In preparing the financial statements of each individual entity, transactions in currencies other than the entity’s functional currency (i.e., foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions.

At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Exchange differences on monetary items arising from settlement or translation are recognized in profit or loss in the period.

Non-monetary items measured at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Exchange differences arising on the retranslation of nonmonetary items are included in profit or loss for the period except for exchange differences arising from the retranslation of nonmonetary items in respect of which gains and losses are recognized directly in other comprehensive income, in which case, the exchange differences are also recognized directly in other comprehensive income.

Non-monetary items that are measured at historical cost in a foreign currency are not retranslated.

For the purposes of presenting consolidated financial statements, the assets and liabilities of the Group’s foreign operations (including of the subsidiaries, associates, joint ventures or branches operations in other countries or currencies used different with the Company) are translated into New Taiwan dollars using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period. Exchange differences arising are recognized in other comprehensive income (attributed to the owners of the Company and no controlling interests as appropriate).

On the disposal of a foreign operation (i.e., a disposal of the Group’s entire interest in a foreign operation, or a disposal involving loss of control over a subsidiary that includes a foreign operation, a disposal involving loss of joint control over a jointly controlled entity that includes a foreign operation, or a disposal involving loss of significant influence over an associate that includes a foreign operation), all of the exchange differences accumulated in equity in respect of that operation attributable to the owners of the Group are reclassified to profit or loss.

f. Inventories

Inventories consist of raw materials, supplies, finished goods and work in progress and are stated at the lower of cost or net realizable value. Inventory write-downs are made by item, except where it may be appropriate to group similar or related items. The net realizable value is the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale. The inventories of Sunplus Technology Company Limited, Generalplus Technology Inc., Sunplus Innovation Technology Inc., Sunplus mMobile Inc., iCatch Technology Inc., Sunplus mMedia Inc., Jumplux Technology and Sunext Technology Co., Ltd. are generally recorded at standard cost. On the balance sheet date, the cost is adjusted to approximate weighted-average cost method. Other subsidiaries’ inventories are recorded at the weighted-average cost.

  • g. Investments in associates

An associate is an entity over which the Group has significant influence and that is not a subsidiary.

The Group uses the equity method to account for its investments in associates.

Under the equity method, investments in an associate is initially recognized at cost and adjusted thereafter to recognize the Group’s share of the profit or loss and other comprehensive income of the associate. The Group also recognizes the changes in the Group’s share of the equity of associates.

Any excess of the cost of acquisition over the Group’s share of the net fair value of the identifiable assets and liabilities of an associate at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment and is not amortized. Any excess of the Group’s share of the net fair value of the identifiable assets and liabilities over the cost of acquisition, after reassessment, is recognized immediately in profit or loss.

When the Company subscribes for additional new shares of an associate at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment differs from the amount of the Group’s proportionate interest in the associate. The Group records such a difference as an adjustment to investments with the corresponding amount charged or credited to capital surplus - changes in capital surplus from investments in associates and joint ventures accounted for using the equity method. If the Group’s ownership interest is reduced due to its additional subscription of the new shares of the associate, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that associate is reclassified to profit or loss on the same basis as would be required had the investee directly disposed of the related assets or liabilities. When the adjustment should be debited to capital surplus, but the capital surplus recognized from investments accounted for using the equity method is insufficient, the shortage is debited to retained earnings.

When the Group’s share of losses of an associate equals or exceeds its interest in that associate (which includes any carrying amount of the investment accounted for using the equity method and long-term interests that, in substance, form part of the Group’s net investment in the associate), the Group discontinues recognizing its share of further loss, if any. Additional losses and liabilities are recognized only to the extent that the Group has incurred legal obligations, or constructive obligations, or made payments on behalf of that associate.

The entire carrying amount of an investment (including goodwill) is tested for impairment as a single asset by comparing its recoverable amount with its carrying amount. Any impairment loss recognized is not allocated to any asset, including goodwill, that forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognized to the extent that the recoverable amount of the investment subsequently increases.

The Group discontinues the use of the equity method from the date on which its investment ceases to be an associate. Any retained investment is measured at fair value at that date, and the fair value is regarded as the investment’s fair value on initial recognition as a financial asset. The difference between the previous carrying amount of the associate attributable to the retained interest and its fair value is included in the determination of the gain or loss on disposal of the associate. The Group accounts for all amounts previously recognized in other comprehensive income in relation to that associate on the same basis as would be required had that associate directly disposed of the related assets or liabilities.

When the Group transacts with its associate, profits and losses resulting from the transactions with the associate are recognized in the Group’s consolidated financial statements only to the extent of interests in the associate that are not related to the Group.

  • h. Property, plant and equipment

Property, plant and equipment are stated at cost, less accumulated depreciation and accumulated impairment loss.

Depreciation is recognized using the straight-line method. Each significant part is depreciated separately. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

On derecognition of an item of property, plant and equipment, the difference between the sales proceeds and the carrying amount of the asset is recognized in profit or loss.

i. Investment properties

Investment properties are properties held to earn rentals or for capital appreciation. (It includes right-of-use assets that meet the definition of investment properties in 2019)

Investment properties are initially measured at cost, including transaction costs. Subsequent to initial recognition, investment properties are measured at cost less accumulated depreciation and accumulated impairment loss. Depreciation is recognized using the straight-line method.

On derecognition of an investment property, the difference between the net disposal proceeds and the carrying amount of the asset is included in profit or loss.

j. Goodwill

Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business less accumulated impairment loss.

For the purposes of impairment testing, goodwill is allocated to each of the Group’s cash-generating units (or groups of cash-generating units) that is expected to benefit from the synergies of the combination.

A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired, by comparing its carrying amount, including the attributable goodwill, with its recoverable amount. However, if the goodwill allocated to a cash-generating unit was acquired in a business combination during the current annual period, that unit shall be tested for impairment before the end of the current annual period. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated at first to reduce the carrying amount of any goodwill allocated to the unit, and then to the other assets of the unit pro rata based on the carrying amount of each asset in the unit. Any impairment loss is recognized directly in profit or loss. The impairment loss recognized for goodwill is not reversible in subsequent periods.

k. Intangible assets

1) Intangible assets acquired separately

Intangible assets with finite useful lives that are acquired separately are initially measured at cost and subsequently measured at cost less accumulated amortization and accumulated impairment loss. Amortization is recognized on a straight-line basis. The estimated useful life, residual value, and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis. The residual value of an intangible asset with a finite useful life shall be assumed to be zero unless the Group expects to dispose of the intangible asset before the end of its economic life. Intangible assets with indefinite useful lives that are acquired separately are measured at cost less accumulated impairment loss.

  • 2) Derecognition of intangible assets

On derecognition of an intangible asset, the difference between the net disposal proceeds and the

carrying amount of the asset is recognized in profit or loss.

  • l. Impairment of tangible and intangible assets other than goodwill

At the end of each reporting period, the Group reviews the carrying amounts of its tangible and intangible assets, excluding goodwill, to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Corporate assets are allocated to the individual cash-generating units on a reasonable and consistent basis of allocation.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired.

The recoverable amount is the higher of fair value less costs to sell and value in use. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount, with the resulting impairment loss recognized in profit or loss.

When an impairment loss is subsequently reversed, the carrying amount of the asset or cash-generating unit is increased to the revised estimate of its recoverable amount, but only to the extent of the carrying amount that would have been determined had no impairment loss been recognized for the asset or cash-generating unit in prior years. A reversal of an impairment loss is recognized in profit or loss.

  • m. Financial instruments

Financial assets and financial liabilities are recognized when a group entity becomes a party to the contractual provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at FVTPL) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognized immediately in profit or loss.

1) Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis.

a) Measurement category

Financial assets are classified into the following categories: Financial assets at FVTPL, financial assets at amortized cost and investments in equity instruments at FVTOCI.

  • i. Financial assets at FVTPL

A financial asset is classified as at FVTPL when such a financial asset is mandatorily classified or it is designated as at FVTPL. Financial assets mandatorily classified as at FVTPL include investments in equity instruments which are not designated as at FVTOCI and debt instruments that do not meet the amortized cost criteria or the FVTOCI criteria.

Financial assets at FVTPL are subsequently measured at fair value, and any dividends or interest earned on such financial assets are recognized in other income; any remeasurement gains or losses on such financial assets are recognized in other gains or losses. Fair value is determined in the manner described in Note 32: Financial Instruments.

  • ii. Financial assets at amortized cost

Financial assets that meet the following conditions are subsequently measured at amortized cost:

  • i) The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and

  • ii) 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.

Subsequent to initial recognition, financial assets at amortized cost, including cash and cash equivalents, other financial assets, notes and accounts receivable, other receivables and refundable deposits, are measured at amortized cost, which equals the gross carrying amount determined using the effective interest method less any impairment loss. Exchange differences are recognized in profit or loss.

Interest income 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 which interest income is calculated by applying the credit-adjusted effective interest rate to the amortized cost of such financial assets; and

  • ii) Financial assets that have subsequently become credit impaired, for which interest income is calculated by applying the effective interest rate to the amortized cost of such financial assets.

Cash equivalents include time deposits, which are highly liquid, readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These cash equivalents are held for the purpose of meeting short-term cash commitments.

  • iii. Investments in equity instruments at FVTOCI

On initial recognition, the Group may make an irrevocable election to designate investments in equity instruments as at FVTOCI. Designation at FVTOCI is not permitted if the equity investment is held for trading or if it is contingent consideration recognized by an acquirer in a business combination.

Investments in equity instruments at FVTOCI are subsequently measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in other equity. The cumulative gain or loss will not be reclassified to profit or loss on disposal of the equity investments; instead, they will be transferred to retained earnings.

Dividends on these investments in equity instruments are recognized in profit or loss when the Group’s right to receive the dividends is established, unless the dividends clearly represent a recovery of part of the cost of the investment.

  • b) Impairment of financial assets

The Group recognizes a loss allowance for expected credit losses on financial assets at amortized cost (including trade receivables).

The Group always recognizes lifetime expected credit losses (ECLs) for trade receivables. For all other financial instruments, the Group recognizes lifetime ECLs when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on a financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECLs.

Expected credit losses reflect the weighted average of credit losses with the respective risks of a default occurring as the weights. Lifetime ECLs represent the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECLs represent the portion of lifetime ECLs that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.

The impairment loss of all financial assets is recognized in profit or loss by a reduction in their carrying amounts through a loss allowance account.

  • c) Derecognition of financial assets

The Group derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.

On derecognition of a financial asset at amortized cost in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss. On derecognition of an investment in an equity instrument at FVTOCI, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss, and the cumulative gain or loss that had been recognized in other comprehensive income is transferred directly to retained earnings, without recycling through profit or loss.

2) Financial liabilities

  • a) Subsequent measurement

All financial liabilities are measured at amortized cost using the effective interest method.

  • b) Derecognition of financial liabilities

The difference between the carrying amount of a financial liability derecognized and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

n. Provisions

For the best estimate of provisions, the discounted cash flows need to consider the risk and uncertainties of obligations. Provisions are measured by the discounted value of the estimated cash flows for the liquidation of the obligation.

  • o. Revenue recognition

The Group identifies a contract with a customer, allocates the transaction price to the performance obligations, and recognizes revenue when performance obligations are satisfied.

Unearned receipts for merchandise sales would be recognized as contract liabilities before the Group fulfills its performance obligations.

Revenue from the sale of goods

Revenue from the sale of goods comes from the sale of ICs. Sales of ICs are recognized as revenue when the goods are shipped because it is the time when the customer has full discretion over the manner of distribution and the price to sell the goods, has the primary responsibility for sales to future customers, and bears the risks of obsolescence. Trade receivables are recognized concurrently.

The Group does not recognize revenue on materials delivered to subcontractors because this delivery does not involve a transfer of control.

Other

Other mainly comes from software development.

p. Lease

2019

At the inception of a contract, the Group assesses whether the contract is, or contains, a lease.

1) The Group as lessor

Leases are classified as finance leases whenever the terms of a lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

When the Group subleases a right-of-use asset, the sublease is classified by reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. However, if the head lease is a short-term lease that the Group, as a lessee, has accounted for applying recognition exemption, the sublease is classified as an operating lease.

Lease payments less any lease incentives payable from operating leases are recognized as income on a straight-line basis over the terms of the relevant leases. Initial direct costs incurred in obtaining operating leases are added to the carrying amounts of the underlying assets and recognized as expenses on a straight-line basis over the lease terms.

  • 2) The Group as lessee

The Group recognizes right-of-use assets and lease liabilities for all leases at the commencement date of a lease, except for short-term leases and low-value asset leases accounted for applying a recognition exemption where lease payments are recognized as expenses on a straight-line basis over the lease terms.

Right-of-use assets are initially measured at cost, which comprises the initial measurement of lease liabilities adjusted for lease payments made at or before the commencement date, plus any initial direct costs incurred and

an estimate of costs needed to restore the underlying assets, and less any lease incentives received. Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any remeasurement of the lease liabilities. Right-of-use assets are presented on a separate line in the consolidated balance sheets, except for those that meet the definition of investment properties. With respect to the recognition and measurement of right-of-use assets that meet the definition of investment properties, refer to Note 4(9) for the accounting policies for investment properties.

Right-of-use assets are depreciated using the straight-line method from the commencement dates to the earlier of the end of the useful lives of the right-of-use assets or the end of the lease terms.

Lease liabilities are initially measured at the present value of the lease payments, which comprise fixed payments and variable lease payments which depend on an index or a rate. The lease payments are discounted using the interest rate implicit in a lease, if that rate can be readily determined. If that rate cannot be readily determined, the Group uses the lessee’s incremental borrowing rate.

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. When there is a change in a lease term or a change in future lease payments resulting from a change in an index or a rate used to determine those payments, the Group remeasures the lease liabilities with a corresponding adjustment to the right-of-use-assets. However, if the carrying amount of the right-of-use assets is reduced to zero, any remaining amount of the remeasurement is recognized in profit or loss. Lease liabilities are presented on a separate line in the consolidated balance sheets.

2018

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

  • 1) The Group as lessor

Rental income from operating leases is recognized on a straight-line basis over the term of the relevant lease.

  • 2) The Group as lessee

Contingent rents arising under operating leases are recognized as an expense in the year in which they are incurred.

  • q. Government grants

Government grants are not recognized until there is reasonable assurance that the Group will comply with the conditions attached to the grants and that the grants will be received.

Government grants are recognized in profit or loss on a systematic basis over the periods in which the Group recognizes as expenses the related costs for which the grants are intended to compensate. Specifically, government grants whose primary condition is that the Group should purchase, construct or otherwise acquire non-current assets are recognized as a deduction from the carrying amount of the relevant asset and recognized in profit or loss over the useful lives of the related assets.

Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Group with no future related costs are recognized in profit or loss in the period in which they become receivable.

  • r. Employee benefits

  • 1) Short-term employee benefits

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related services.

  • 2) Retirement benefits

Payments to defined contribution retirement benefit plans are recognized as expenses when employees have rendered service entitling them to the contributions.

Defined benefit costs (including service cost, net interest and remeasurement) under the defined benefit retirement benefit plans are determined using the projected unit credit method. Service cost (including current service cost and past service cost) and net interest on the net defined benefit liabilities (assets) are recognized as employee benefits expense in the period in which they occur, and the return on plan assets (excluding interest), is recognized in other comprehensive income in the period in which it occurs. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss.

Net defined benefit liabilities (assets) represent the actual deficit (surplus) in the Group’s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any refunds from the plans or reductions in future contributions to the plans.

  • s. Share-based payment arrangements

Equity-settled share-based payments to employees are measured at the fair value of the equity instruments at the grant date.

The fair value determined at the grant date of the employee share options is expensed on a straight-line basis over the vesting period, based on the Group's estimate of employee share options that will eventually vest, with a corresponding increase in capital surplus - employee share options. The fair value determined at the grant date of the employee share options is recognized as an expense in full at the grant date when the share options granted vest immediately.

When restricted shares for employees are issued, other equity - unearned employee benefits is recognized on the grant date, with a corresponding increase in capital surplus - restricted shares for employees. If restricted shares for employees are granted for consideration and should be returned, they are recognized as payables. Dividends paid to employees on restricted shares that do not need to be returned if employees resign in the vesting period are recognized as expenses when the dividends are declared with a corresponding adjustment in capital surplus - restricted shares for employees.

At the end of each reporting period, The Group revises its estimate of the number of employee share options expected to vest. The impact of the revision of the original estimates is recognized in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the capital surplus - employee share options.

  • t. Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

  • 1) Current tax

According to the Income Tax Law, an additional tax of inappropriate earnings is provided for as income tax in the year the shareholders approve to retain the earnings.

Adjustments of prior years’ tax liabilities are added to or deducted from the current year’s tax provision.

  • 2) Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities and the corresponding tax bases used in the computation of taxable profit.

Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences and unused loss carryforwards to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. A previously unrecognized deferred tax asset is also reviewed at the end of each reporting period and recognized to the to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liabilities are settled or the assets are realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which The Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

3) Current and deferred tax for the period

Current and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity respectively.

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Group’s accounting policies, management is required to make judgments, estimations, and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised if the revisions affect only that period or in the period of the revisions and future periods if the revisions affect both current and future periods.

Critical Accounting Judgements

  • a. Lease terms - 2019

In determining a lease term, the Group considers all facts and circumstances that create an economic incentive to exercise or not to exercise an option, including any expected changes in facts and circumstances from the commencement date until the exercise date of the option. Main factors considered include contractual terms and conditions for the optional periods, significant leasehold improvements undertaken over the contract term, the importance of the underlying asset to the lessee’s operations, etc. The lease term is reassessed if a significant change in circumstances that are within control of the Group occur.

Key Sources of Estimation Uncertainty

a. Estimated impairment of financial assets

The provision for impairment of trade receivables, investments in debt instruments, and financial guarantee contracts is based on assumptions about risk of default and expected loss rates. The Group uses judgment in making these assumptions and in selecting the inputs to the impairment calculation, based on the Group’s historical experience, existing market conditions as well as forward looking estimates as of the end of each reporting period. Where the actual future cash inflows are less than expected, a material impairment loss may arise.

b. Estimated impairment of tangible assets and intangible assets (excluding goodwill)

The Group relies on subjective judgments and depends on industry usage patterns and related characteristics to determine cash flows, asset useful lives, and future revenues and expenses. Any change in the operating environment and corporate strategy may cause significant impairment loss.

c. Lessees’ incremental borrowing rates- 2019

In determining a lessee’s incremental borrowing rate used in discounting lease payments, a risk-free rate for the same currency and relevant duration is selected as a reference rate, and the lessee’s credit spread adjustments and lease specific adjustments are also taken into account.

6. CASH AND CASH EQUIVALENTS

Cash on hand

Checking accounts and demand deposits
Cash equivalent
Time deposits in banks
Repurchase agreements collateralized by bonds

 December 31
2019
2018
$ 6,065
$ 7,521
769,510
1,338,553
2,245,053
1,881,214

-

8,433
$ 3,020,628
$ 3,235,721

The market rate intervals of cash in bank and bank overdrafts at the end of the reporting period were as follows:

Bank balance
Repurchase agreement collateralized by bonds		 December 31
2019
2018
0.01%-2.25%
0.01%-1.55%
-
1.00%

7. FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets at FVTPL-current
Financial assets classified as at FVTPL
Non-derivative financial assets
- Mutual funds

- Unlisted securities in the ROC
- Listed securities in the ROC
Financial assets held for trading
Non-derivative financial assets
- Securities listed in the ROC and other countries - CB


Financial liabilities at FVTPL–non-current
Financial assets classified as at FVTPL
Non-derivative financial assets
- Securities unlisted in the ROC

- Private funds
- Mutual funds
- Securities listed in the ROC and other countries

 December 31 December 31





2019
$ 987,692

45,904
41,960

15,123

$ 1,090,679

$ 658,431

260,140
75,119

33,755

$ 1,027,445
 2018
$ 1,280,668
4,361
-

28,718
$ 1,313,747
$ 462,387
160,226
75,432

39,822
$ 737,867

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

Non-current
Domestic and foreign investments
Unlisted shares and emerging market shares
Listed shares and emerging market shares
Private funds		 December 31


2019
$ 98,915

90,472

-

$ 189,387
 2018
$ 127,991
78,246

39,971
$ 246,208

9. NOTES AND ACCOUNTS RECEIVABLE, NET

NOTES AND ACCOUNTS RECEIVABLE, NET
Notes receivable
Notes receivable - operating

Trade receivables
At amortized cost
Gross carrying amount
Less: Allowance for impairment loss


 December 31



2019
$ 300

832,662

(329)


832,333

$ 832,633
 2018
$ 16
954,518

(504)

954,014
$ 954,030

Trade receivable

The average credit period on sales of goods was 30 to 60 days without interest. The Group's exposure to credit risk and external credit ratings are continuously monitored. In order to minimize credit risk, the management of the Group has delegated a team responsible for determining credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. In addition, the Group reviews the recoverable amount of each individual trade debt at the end of the reporting period to ensure that adequate allowance is made for possible irrecoverable amounts. In this regard, the management believes the Group’s credit risk was significantly reduced.

The Group measures the loss allowance for trade receivables at an amount equal to lifetime ECLs. The expected credit losses on trade receivables are estimated using a provision matrix by reference to the past default experience of the debtor and an analysis of the debtor’s current financial position, adjusted for general economic conditions of the industry in which the debtors operate and an assessment of both the current as well as the forecasted direction of economic conditions at the reporting date. As the Group’s historical credit loss experience does not show significantly different loss patterns for different customer segments, the provision for loss allowance based on past due status is not further distinguished according to the Group’s different customer base.

The Group writes off a trade receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery. Where recoveries are made, these are recognized in profit or loss.

The Group’s current credit risk grading framework is shown in the following table:

December 31, 2019

Not Overdue
Gross carrying amount
$ 832,233

Expected credit losses

-


Amortized cost at December 31, 2019
$ 832,233
 Overdue
1- 60 days
$ 90


-

$ 90
 Overdue
61-90 days
$ -


-

$ -
 Overdue
91-120 days
Overdue 121
days or More
$ -
$ 339


-

(329)

$ -
$ 10
 Total
$ 832,662

(329)
$ 832,333

December 31, 2018

Not Overdue
Gross carrying amount
$ 953,258

Expected credit losses

-


Amortized cost at December 31, 2018
$ 953,258
 Overdue
1- 60 days
$ 691


-

$ 691
 Overdue
61-90 days
$ -


-

$ -
 Overdue
91-120 days
Overdue 121
days or More
$ -
$ 569


-

(504)

$ -
$ 65
 Total
$ 954,518

(504)
$ 954,014

The movements of the loss allowance of trade receivables were as follows:

Balance at January 1
Less: Amounts written off (Note)
Less: Net remeasurement of loss allowance
Exchange differences
Balance at December 31		 December 31


2019
$ 504

(76)
(73)

(26)

$ 329
 2018
$ 107,744
(107,257)
-

17
$ 504

Note: The accounts receivable from one customer that were overdue for 2 years and determined to be uncollectible and the accounts receivable from another customer that was declared bankrupt by court ruling were both written off. The written-off receivables and allowance were both $107,257.

10. INVENTORIES

Finished goods

Work in progress
Raw materials

 December 31 December 31


2019
$ 307,179

281,042

170,990

$ 759,211
 2018
$ 321,099
290,973

206,876
$ 818,948

The costs of inventories recognized as cost of goods sold for the years ended December 31, 2019 and 2018 were $3,050,138 thousand and $3,563,885 thousand, respectively.

The costs of inventories recognized as costs of goods sold for the years ended December 31, 2019 and 2018 were as follows:

Inventory write - downs
Income from scrap sales		 Years Ended December 31 Years Ended December 31


2019
$ (16,192)


103

$ (16,089)
 2018
$ (35,411)

361
$ (35,050)

11. SUBSIDIARIES

  • a. The subsidiaries included in the consolidated financial statements

The information of the subsidiaries at the end of reporting period was as follows:

Name of Investor
Name of Investee
Main Businesses and Products
Sunplus
Sunplus Management Consulting Management
Ventureplus Group Inc.
(“Ventureplus Group”)
Investment
Sunplus Technology (H.K.)
International trade
Sunplus Venture
Investment
Lin Shih Investment (“Lin Shih”) Investment
Sunplus mMobile Inc.
Design of ICs
Sunext Technology Co., Ltd.
(“Sunext”)
Design of ICs
Sunplus Innovation Technology Design of ICs
Generalplus Technology Inc.
(“Generalplus”)
Design of ICs
Wei-Young Investment Inc.
Investment
Russell Holdings Limited
Investment
Magic Sky Limited
Investment
Sunplus mMedia Inc.
Design of ICs
Award Glory
Investment
Jumplux Technology
Design of ICs
Ventureplus Group
Ventureplus Mauritius
Investment
Ventureplus Mauritius
Ventureplus Cayman
Investment
Ventureplus Cayman
Ytrip Technology
Web research and development
Sunplus App Technology
Manufacturing and sale of
computer software; system
integration services and
information management and
education.
Sunplus Prof-tek Technology
(Shenzhen)
Development of computer
software, system integration
services, building rental
services and property
management
Sunplus Technology (Shanghai) Development of computer
software, system integration
services and building rental
services
SunMedia Technology
Development of computer
software, system integration
services and building rental
services
Sunplus Technology (Beijing)
Development of computer
software, system integration
services and building rental
services		 Percentage of Ownership
December 31
2019
2018
Note
100.00
100.00
-
100.00
100.00
-
100.00
100.00
-
100.00
100.00
-
100.00
100.00
-
100.00
100.00
-
92.55
91.40
-
61.13
61.13
-
34.30
34.30
Sunplus and its subsidiaries owned
47.99% of the equity in
Generalplus Technology, Inc. and
the Group had controlling interest
over Generalplus Technology, Inc.;
the investee is included in the
consolidated financial statements
100.00
100.00
-
100.00
100.00
-
100.00
100.00
-
89.76
89.76
-
100.00
100.00
-
55.00
55.00
-
100.00
100.00
-
100.00
100.00
-
38.47
38.47
Sunplus and its subsidiaries owned
90.71% of the equity in Ytrip.
53.85
93.33
-
100.00
100.00
-
100.00
100.00
-
100.00
100.00
-
100.00
100.00
-
Sunplus Technology (Shanghai) Ytrip Technology Web research and development 44.08 44.08 Sunplus and its subsidiaries owned
90.71% of the equity in Ytrip.
Jsilicon Technology Software Development and IC 100.00 - Registration of establishment
Design completed on February 26, 2019.
Shuangxin Technology Software Development and IC 55.00 - -
Design
Sunplus Prof-tek (Shenzhen) Shuangxin Technology Software Development and IC 45.00 - Sunplus and its subsidiaries owned
Design 100% of the equity in Chongqing
Shuangxin Co., Ltd.
Ytrip Technology Cculture Communication Development and sale 100.00 100.00 -
Sunplus Venture Jumplux Technology Design of ICs 42.08 42.08 Sunplus and its subsidiaries owned
97.08% of the equity in Jumplux
Technology.
Han Young Technology Design of ICs - 70.00 The liquidation of Han Young
Technology was completed on
November 15, 2019, refer to Note
29.
Sunext Technology Co., Ltd. Design of ICs - - Due to organizational reorganization,
it transferred its equity to Sunplus
on 2018 and 2019.
Sunplus mMedia Design of ICs 7.64 7.64 Sunplus and its subsidiaries owned
100% of the equity in Sunplus
mMedia.
Sunplus Innovation Design of ICs 5.64 5.64 Sunplus and its subsidiaries owned
100% of the equity in Sunplus
Innovation
Lin Shih Generalplus Technology Inc. Design of ICs 13.69 13.69 Sunplus and its subsidiaries had
47.99% stake in Generalplus
Technology, Inc. and the Group
had controlling interest over
Generalplus Technology, Inc.; the
investee is included in the
consolidated financial statements
(Continued)
Name of Investor
Name of Investee
Main Businesses and Products
Lin Shih
Sunplus mMedia
Design of ICs
Sunplus Innovation
Design of ICs
Generalplus
Generalplus Samoa
Investment
Generalplus Samoa
Generalplus Mauritius
Investment
Generalplus Mauritius
Generalplus Shenzhen
IC product development, after
sales service and market
research
Generalplus HK
Marketing
Award Glory
Sunny Fancy
Investment
Sunny Fancy
Giant Kingdom
Investment
Giant Rock
Investment
WORLDPLUS HOLDINGS
L.L.C. (Worldplus)
Investment
Giant Kingdom
Ytrip Technology
Web research and development
Giank Rock
Sunplus App Technology
Manufacturing and sale of
computer software; system
integration services and
information management and
education
Worldplus
Lingyao Technology
Software development and rental
sales		 Percentage of Ownership
December 31
2019
2018
Note
2.60
2.60
Sunplus and its subsidiaries owned
100% of the equity in Sunplus
mMedia.
2.09
2.09
Sunplus and its subsidiaries owned
68.86% of the equity in Sunplus
Innovation.
100.00
100.00
-
100.00
100.00
-
100.00
100.00
-
100.00
100.00
-
100.00
100.00
-
100.00
100.00
-
100.00
100.00
-
100.00
100.00
-
8.16
8.16
Sunplus's subsidiaries owned 90.71%
of the equity in Ytrip.
42.31
-
Sunplus and its subsidiaries owned
96.16% of the equity in Sunplus
App.
100.00
-
Obtained control on September 2,
2019, so it was included in the
consolidated financial statements.
(Concluded)

The financial statements as of and for the years ended December 31, 2019 of the above subsidiaries except Sunplus Management Consulting and Generalplus HK, were audited by the auditors. The management of the Company believes that the financial statements of Sunplus Management Consulting and Generalplus HK will not be subject to major adjustments if it were audited.

  • b. Subsidiary excluded from the consolidated financial statements
Subsidiary excluded from the consolidated financial statements
Company name
Generalplus Technology Inc.
Sunplus Innovation Technology		 The Voting Ratio of Non-controlling
Equity
December 31
2019
2018
52.01%
52.01%
31.14%
31.14%

Refer to attachment 6 for registered countries and company information:

Company Name Profits Attributed to
Non-controlling Interests
Years Ended December 31
2019
2018		 Non-controlling Interests
**December 31 **
2019
2018
Generalplus Technology Inc. $ 116,295 $ 147,898 $ 1,075,166 $ 1,109,947
Sunplus Innovation Technology 42,244 18,906 308,951 283,063
iCatch Technology - (20,889) - -

The summarized financial information below represents amounts before intragroup eliminations.

Current assets

Non-current assets
Current liabilities
Non-current liabilities

Equity

Equity attributable to:
Owners of the Company

Non-controlling interests


Operating revenue

Net income

Other comprehensive income

Total other comprehensive income

Equity attributable to:
Owners of the Company

Non-controlling interests


Total other comprehensive attributable to:
Owners of the Company

Non-controlling interests


Cash flows
Cash flows from operating activities

Cash flows from (used in) investing activities
Cash flows used in financing activities
Effect of exchange rate changes on the balance of cash held in foreign
currencies

Net cash outflow

Dividend paid to non-controlling interests
 December 31 December 31
2019
2018
$ 3,190,003
$ 3,201,689
790,554
760,401
792,198
828,965

214,644

175,669
$ 2,973,715
$ 2,957,456
$ 1,589,598
$ 1,564,446

1,384,117

1,393,010
$ 2,973,715
$ 2,957,456
For the Years Ended December 31













2019
$ 3,606,544

$ 359,235


(19,486)

$ 339,749

$ 200,697


158,538

$ 359,235

$ 191,123


148,626

$ 339,749

$ 512,043

57,697
(304,255)

1,452

$ 266,937

$ (157,520)
 2018
$ 4,223,670
$ 306,710

(10,077)
$ 296,633
$ 160,795

145,915
$ 306,710
$ 156,526

140,107
$ 296,633
$ 414,702
(146,496)

(296,520)

(1,649)
$ (29,963)
$ (169,798)

12. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Investments in associates
a. Investments in associates
Listed companies
iCatch Technology
Global View Co., Ltd.
Autsys Co., Ltd.		 December 31
2019
$ 695,028

December		 2018
$ 729,219
31


2019
$ 320,180

297,640

77,208

$ 695,028
 2018
$ 350,859
307,106

71,254
$ 729,219

As the end of the reporting period, the proportion of ownership and voting rights in associates held by the Group were as follows:

Name of Associate
iCatch Technology
Global View Co., Ltd.
Autsys Co., Ltd.		 December 31
2019
2018
36%
36%
13%
13%
16%
19%

Refer to Table 6 following these Notes to Consolidated Financial Statements for information on the associates’ business types, main operating locations and registered countries, and Table 7 following these Notes for the information on investments in mainland China.

The fair values of publicly traded investments accounted for using the equity method were based on the closing prices of those investments at the balance sheet date, as follows:

Name of Associate
Global View, Co., Ltd.		 December 31
2019
$ 239,889
 2018
$ 248,530

Investments in the above jointly controlled entities are accounted for using the equity method.

The summarized financial information of the Group’s associates is set out below:

Total assets

Total liabilities
 December 31 December 31

2019
$ 2,438,751

$ 313,348
 2018
$ 2,569,477
$ 369,039
Revenue

Profit for the period

Comprehensive income

Group’s share of profits of associates
 Years Ended December 31 Years Ended December 31



2019
$ 1,088,383

$ (5,711)

$ (14,131)

$ (19,915)
 2018
$ 1,005,661
$ (45,428)
$ (103,126)
$ (44,862)

The investments accounted for by the equity method and the share of profit or loss and other comprehensive income of those investments for the year ended December 31, 2019 and 2018 was based on the associates’ financial statements audited by the auditors for the same years.

13. PROPERTY, PLANT AND EQUIPMENT

a. Assets used by the Group - 2019

Cost
Balance at January 1, 2019

Additions
Disposals
Reclassified to investment
property
Consolidated changes
Effect of exchange rate
changes

Balance at December 31, 2019
Accumulated depreciation
Balance at January 1, 2019

Depreciation expense
Disposals
Consolidated changes
Effect of exchange rate
changes

Balance at December 31, 2019
Accumulated impairment
Balance at December 31, 2019
Carrying amounts at
December, 2019

2018
Build		 Buildings
$ 2,383,245
-
-
-
-

(44,726)

$ 2,338,519

$ 507,818
53,530
-
-

(6,105)

$ 555,243

$ -

$ 1,783,276

ings
Auxilia
Equipm		 Auxiliary
Equipment

$ 193,874

442

(5,408 )
-

-

(1,618)

$ 187,290

$ 126,857

19,626

(5,408 )

-

2,147

$ 143,222

$ -

$ 44,068

ry
ent
Machine
and		 Machinery and
Equipment
$ 13,729

5,446

(6,486 )
-
-

(2,261)

$ 10,428

$ 12,759

2,322

(6,375 )
-

(1,477)

$ 7,229

$ -

$ 3,199

ry
Testing
Equipme		 Testing
Equipment

$ 616,529

102,304

(198,512 )
-

-

(2,904)

$ 517,417

$ 540,595

95,336

(195,243 )

-

(3,534)

$ 437,154

$ 11,498

$ 68,765


nt
Transportati
Equipmen		 Transportation
Equipment

$ 5,904


773

(1,076 )
-
-

272

$ 5,873

$ 3,633

1,145

(1,052 )
-

292

$ 4,018

$ -

$ 1,855

on
t
Furniture an
Fixtures		 Furniture and
Fixtures
$ 266,331

17,700

(40,489 )
10,493

2,501

(6,517)

$ 250,019

$ 231,996

16,945

(39,515 )

2,273

(5,975)

$ 205,424

$ -

$ 44,595

d
Leasehold
Improvements		 Leasehold
Improvements
$ 2,782

457

(1,716 )
-

-

(43)

$ 1,480

$ 2,331

5,288

(1,716 )

-

(4,664)

$ 1,239

$ -

$ 241


Other
Equipment		 Other
Equipment

f

$ 23,959

234

(39 )
-

205

(512)

$ 23,847

$ 19,447

601

(39 )

85

151

$ 20,245

$ -

$ 3,602

Construction
in Progress		 Prepayments
or Equipment
and
Construction
in Progress
$ 2,940

9,900

-
(10,720 )

17,088
(6)

$ 19,202

$ -

-

-

-
-

$ -

$ -

$ 19,202

Payable for
purchases of		 Total
$ 3,509,393

137,256

(253,726 )
(227 )
19,794

(58,315)
$ 3,354,075
$ 1,445,436

194,793

(249,648 )
2,358

(19,165)
$ 1,373,774
$ 11,498
$ 1,968,803
Total

b. 2018

C ost
alance at January 1,
2018

dditions
isposals
eclassified to
investment property
onsolidated changes
ffect of exchange rate
changes

alance at December
31, 2018

ccumulated
depreciation
alance at January 1,
2018

epreciation expense
isposals
eclassified to
investment property
onsolidated charges
ffect of exchange rate
changes

alance at December
31, 2018
 $ 2,407,349

-
-
-

-

(24,104)

$ 2,383,245

$ 456,802

53,993
-
-
-

(2,977)

$ 507,818
 $ 184,489

882
(9,476 )
23,676
-

(5,697)

$ 193,874

$ 109,497

21,608
(9,476 )
2,762
-

2,466

$ 126,857
 Equipment
$ 15,131

1,576
(1,836 )
-
-

(1,142)

$ 13,729

$ 13,500

3,612
(1,115 )
-
-

(3,238)

$ 12,759
 $ 566,450

133,708
(5,908 )
-
(77,014 )

(707)

$ 616,529

$ 478,413

101,194
(6,389 )
-
(34,174 )

1,551

$ 540,595
 $ 7,846

-
(1,790 )
-
-

(152)

$ 5,904

$ 3,556

1,348
(22 )
-
-

(1,249)

$ 3,633
 $ 257,883

19,426
(6,625 )
45
(1,224 )

(3,174)

$ 266,331

$ 226,324

15,746
(7,741 )
-
(505 )

(1,828)

$ 231,996
 $ 26,352

125
-
(23,676 )
(516 )

497

$ 2,782

$ 4,695

5,272
-
(2,762 )

(473 )

(4,401)

$ 2,331
 $ 21,772

253
(1,237 )
-

-

3,171

$ 23,959

$ 18,833

773
(1,237 )
-

-

1,078

$ 19,447
 $ -

45
-
(45 )
-

-

$ -

$ -

-
-
-
-

-

$ -
 Equipment
$ -
$ 3,487,272
2,940
158,955
-
(26,872 )
-
-
-
(78,754 )

-

(31,308)
$ 2,940
$ 3,509,293
$ -
$ 1,311,620
-
203,546
-
(25,980 )
-
-
-
(35,152 )

-

(8,598)
$ -
$ 1,445,436
(Continued)
B
A
D
R
C
E
B
A
B
D
D
R
C
E
B

==> picture [463 x 185] intentionally omitted <==

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

Machinery Payable for
Auxiliary and Testing Transportation Furniture and Leasehold Other Construction purchases of
Buildings Equipment Equipment Equipment Equipment Fixtures Improvements Equipment in Progress Equipment Total
Accumulated
impairment
Balance at December
31, 2018 $ - $ - $ - $ 11,498 $ - $ - $ - $ - $ - $ - $ 11,498
Balance at December
31, 2017 and
January 1, 2018 $ 1,950,547 $ 74,992 $ 1,631 $ 76,539 $ 4,290 $ 31,559 $ 21,657 $ 2,939 $ - $ - $ 2,164,154
Carrying amounts at
December, 2018 $ 1,875,427 $ 67,017 $ 970 $ 64,436 $ 2,271 $ 34,335 $ 451 $ 4,512 $ - $ 2,940 $ 2,052,359
(Concluded)
----- End of picture text -----

The above items of property, plant and equipment are depreciated on a straight-line basis over the following estimated useful lives as follows:

Buildings 10-56 years
Auxiliary equipment 3-11 years
Machinery and equipment 3-10 years
Testing equipment 1-5 years
Transportation equipment 4-10 years
Furniture and fixtures 1-6 years
Leasehold improvements 5 years
Other equipment 3-10 years

Refer to Note 34 for the carrying amounts of property, plant and equipment that had been pledged by the Group to secure borrowings.

14. LEASE ARRANGEMENTS

  • a. Right-of-use assets - 2019
December 31, December 31,
2019
Carrying amounts
Land $ 215,922
Buildings 25,098
Transportation equipment 894
$ 241,914
2019
Additions to right-of-use assets $ 3,989
Depreciation charge for right-of-use assets
Land $ 6,859
Buildings 6,454
Transportation equipment 361
$ 13,674

$ (1,093)

Income from the subleasing of right-of-use assets (presented in other income)

The other part of right-of-use assets-land in China is subleased by operating leases, and the relevant right-of-use assets are classified as investment properties. Please refer to Note 15.

  • b. Lease liabilities - 2019
December 31, December 31,
2019
Carrying amounts
Current $ 11,885
Non-current $ 230,251

Range of discount rate for lease liabilities was as follows:

December 31,
2019
Land 2.39%
Buildings 1.575%-4.75%
Transportation equipment 1.575%
  • c. Material lease-in activities and terms

The Group leases land and buildings for the use of plants, offices and dormitory, also leases transportation equipment for the use of business travel with lease terms of 2 to 50 years. Lease terms of land in the ROC is 20 years, the lease contract for land located in the ROC specifies that lease payments will be adjusted on the basis of changes in announced land value prices. Lease terms of land in China is 45-50 years. The Group does not have bargain purchase options to acquire the leasehold land, buildings and transportation equipment at the end of the lease terms.

d. Subleases

Sublease of right-of-use assets - 2019

The Group subleases its right-of-use assets for buildings under operating leases with lease terms for 2 years

The maturity analysis of lease payments receivable under operating subleases was as follows:

e. December 31,
2019
Year 1
$ 1,153
Other lease information
2019
2019
Expenses relating to short-term leases
$ 11,343
Expenses relating to low-value asset leases
$ 2,282
Total cash outflow for leases
$ 30,995

The Group leases parking spaces and other leases which qualify as short-term leases. The Group has elected to apply the recognition exemption and thus, did not recognize right-of-use assets and lease liabilities for these leases.

2018

The future minimum lease payments of non-cancellable operating lease commitments are as follows:

December 31, December 31,
2018
Not later than 1 year $ 16,561
Later than 1 year and not later than 5 years 46,037
Later than 5 years 36,576
$ 99,174

15. INVESTMENT PROPERTIES

Cost
Balance at January 1, 2019

Adjustments on initial application of IFRS 16

Balance at January 1, 2019 as restated

Additions

Effect of acquisition of subsidiary

Effect of exchange rate differences


Balance at December 31, 2019


Accumulated depreciation


Balance at January 1, 2019

Depreciation expense

Effect of acquisition of subsidiary

Effect of exchange rate differences


Balance at December 31, 2019


Balance at December 31, 2019, net


Cost

Balance at January 1, 2018

Additions

Disposals

Effect of exchange rate differences


Balance at December 31, 2018
 Completed
Investment
Properties
$ 1,400,135


-

1,400,135

1,488

52,074


(52,690)


$ 1,401,007




$ (360,821)
(71, 513)
(14,691)


16,424


$ (430,601)


$ 970,406




$ 1,435,061

3,891

(10,016)


(28,801)


$ 1,400,135
 Right-of-use
Assets
$ -


102,702

102,702

-

-


(3,835)


$ 98,867




$ -

(2,574)
-


98


$ (2,476)


$ 96,391




$ -


-


-


$ -
 Total
$ 1,400,135

102,702
1,502,837
1,488
52,074

(56,525)
$ 1,499,874
$ (360,821)
(74,087)
(14,691)

16,522
$ (433,077)
$ 1,066,797
$ 1,435,061
3,891
(10,016)

(28,801)
$ 1,400,135
(Continued)

Accumulated depreciation


Balance at January 1, 2018

Depreciation expense

Effect of exchange rate differences


Balance at December 31, 2018


Balance at December 31, 2018
 Completed
Investment
Properties



$ (296,010)
(72,240)

7,429


$ (360,821)


$ 1,039,314
 Right-of-use
Assets



$ -

-


-


$ -


$ -
 Total
$ (296,010)
(72,240)

7,429
$ (360,821)
$ 1,039,314
(Concluded)

The right-of-use assets in the investment properties are the use right of land signed by the Group and is subleased under operating lease. The lease terms of the investment properties are from 1 to 15 years, with extension option according to the original contract when exercising the renewal right. The lessee does not have the right of first refusal at the end of the lease period.

The maturity analysis of lease payments receivable under operating leases of investment properties as of December 31, 2019 was as follows:

December 31, December 31,
2019
Year 1 $ 142,060
Year 2 61,643
Year 3 22,066
$ 225,769

The above items of investment properties are depreciated on a straight-line basis over their estimated useful lives as follows:

Completed investment properties 5-26 years
Right-of-use assets 35-39 years

The future minimum lease payments of non-cancellable operating lease commitments as of December 31, 2018 are as follows:

Not later than 1 year

Later than 1 year and not later than 5 years
Later than 5 years

 December 31,
2018
$ 226,650
568,499

581,826
$ 1,376,975

The newly added investment properties of Lingyao Technology Co., Ltd. in Shenzhen, China were due to the merger of enterprises. The fair value of the investment properties is appraised by an independent valuation agency of non-related parties. Innolux Technology Co., Ltd. conducted a valuation by using income approach on September 2, 2019, and the important unobservable inputs used included discounted values. The fair value of the valuation is as follows:

December 31,
2019
Fair value $ 37,900

The fair value of the investment properties of SunMedia Technology had been determined on the basis of valuations carried out on December 31, 2018 and 2017 by Sichuan Zongli Real Estate Land Assets Evaluation Co., Ltd. The evaluation adopted the income approach, and the important unobservable input values used included the discounted value. The evaluated fair value is as follows:

Fair value
 December 31
2019
2018
$ 1,182,963
$ 1,267,909

The fair value of the investment properties of Sunplus Technology (Shanghai) Co., Ltd. had been determined on the basis of valuations carried out at the reporting dates by Suzhou Feng-Zheng valuation firm. The evaluation adopted the income approach, and the important unobservable input values used included the discounted value. The evaluated fair value is as follows:

Fair value
 December 31
2019
2018
$ 2,295,816
$ 2,471,410

16. INTANGIBLE ASSETS

Cost
Balance at January 1

Additions
Decrease
Reclassified
Effect of exchange rate differences

Balance at December 31

Accumulated amortization
Balance at January 1

Amortization expense
Decrease
Reclassified
Effect of exchange rate differences

Balance at December 31
 Year Ended December 31, 2019 Year Ended December 31, 2019 Year Ended December 31, 2019
Technology
License Fees
$ 778,507
55,525
(23,509)
(350)

(924)

$ 809,249

$ 556,915
51,139
(23,509)
(175)

(512)

$ 583,858
 Software
$ 298,609

20,069

(6,026)

-

(52)

$ 312,600

$ 270,852

25,302

(5,581)

-

(1,020)

$ 289,553
 Patents
$ 114,504


-

-
-

(10)

$ 114,494

$ 83,215

1,371

-
-

4

$ 84,582
 Goodwill
$ 30,596


-

-
-

-

$ 30,596

$ -

-

-
-

-

$ -
 Total
$ 1,222,216
75,594
(29,535)
(350)

(986)
$ 1,266,939
$ 910,982
77,812
(29,090)
(175)

(1,536)
$ 957,993
(Continued)

Year Ended December 31, 2019

Year Ended December 31, 2019 Year Ended December 31, 2019 Year Ended December 31, 2019
Accumulated deficit
Balance at January 1 and
December 31
Carrying amounts at
December 31, 2018
Cost
Balance at January 1

Additions
Decrease
Effect of exchange rate differences
Consolidated changes

Balance at December 31

Accumulated amortization
Balance at January 1

Amortization expense
Decrease
Effect of exchange rate differences
Consolidated changes

Balance at December 31

Accumulated deficit
Balance at January 1

Consolidated changes

Balance at December 31

Carrying amounts at
December 31, 2018		 Technology
License Fees
$ 111,136

$ 114,255
 Software
Patents
Goodwill
$ -
$ 21,577
$ -

$ 23,047
$ 8,335
$ 30,596

Year Ended December 31, 2018		 Total
$ 132,713
$ 176,233
(Concluded)
Technology
License Fees
$ 762,432
66,784
(20,568)
(500)

(29,641)

$ 778,507

$ 528,672
54,526
(20,568)
(181)

(5,534)

$ 556,915

$ 114,749


(3,613)

$ 111,136

$ 110,456
 Software
$ 310,734

24,736

(22,271)

(3,439)

(11,151)

$ 298,609

$ 275,297

26,340

(22,271)

(375)

(8,139)

$ 270,852

$ -


-

$ -

$ 27,757
 Patents
$ 114,510

-

-

(6)

-

$ 114,504

$ 81,846

1,371

-

(2)

-

$ 83,215

$ 21,577


-

$ 21,577

$ 9,712
 Goodwill
$ 30,596


-

-

-

-

$ 30,596

$ -

-

-

-

-

$ -

$ -


-

$ -

$ 30,596
 Total
$ 1,218,272
91,520
(42,839)
(3,945)

(40,792)
$ 1,222,216
$ 885,815
82,237
(42,839)
(558)

(13,673)
$ 910,982
$ 136,326

(3,613)
$ 132,713
$ 178,521

Other intangible assets are amortized on a straight-line basis over their estimated useful lives as follows:

Technology license fees 1-10 years Software 1-10 years Patents 8-18 years

An analysis of depreciation by function”

Operating costs
Selling and marketing expenses
General and administrative expenses
Research and development expenses		 For the Year Ended December 31 For the Year Ended December 31 For the Year Ended December 31


2019
$ -

106
5,894

71,812

$ 77,812
 2018
$ 228
110
6,743

75,156
$ 82,237

17. OTHER ASSETS

Current
Other financial assets

Pledged time deposits (a)
Other assets

Prepayments for EDA tools
Finance lease payables (c)
Others
Non-current
Other financial assets

Pledged time deposits (a)
Time deposits (b)
Other assets

Refundable deposits
Finance lease payables (c)
Prepaid long-term investment
Others		 December 31













2019
$ 119,920


$ 16,787

-

72,130

$ 88,917

$ 10,899


129,150

$ 140,049


$ 6,247

-
-

7,800

$ 14,047
 2018
$ 153,575
$ 17,194
2,756

71,371
$ 91,321
$ 10,943

116,272
$ 127,215
$ 7,749
102,175
30,001

7,800
$ 147,725

  • a. Refer to Note 34 for information on pledged time deposits.

  • b. Generalplus Shenzhen invested RMB30,000 thousand and RMB26,0000 thousand in long-term certificates of deposit with the bank in December 31, 2019 and December 31, 2018 (for durations of three years). The interest rates for such certificates of deposit are at fixed rates.

  • c. The amounts of the Group’s finance lease payables for right of use assets - Land in China as of December 31, 2018 was $104,931 thousand, respectively.

18. LOANS

Short-term borrowings

Secured borrowings
Bank loans
Unsecured borrowings
Bank loans		 December 31


2019
$ 120,130



203,496

$ 323,626
 2018
$ 122,769

188,446
$ 311,215

The weighted average effective interest rates for bank loans from January 1, 2019 to December 31, 2019 and from January 1, 2018 to December 31, 2018 were 1.745%-3.000% and 2.500%-3.594% per annum, respectively.

- Long term borrowings

The borrowings of the Group were as follows:

Maturity Date
Significant Covenant
Floating rate borrowings
Unsecured bank borrowings
2019.10.14
Originally repaid in July 2016, extended to
October 2019. The loan was settled in
advance on September 10, 2019.
Unsecured bank borrowings
2019.11.10
Repayable semiannually from November 2016,
the loan was repaid on maturity
Unsecured bank borrowings
2019.2.14
Repayable quarterly from February 2014, the
loan was repaid on maturity
Less: Current portion
Long-term borrowings		 **December ** **31 **



2019
$ -
-

-
-

-
$ -		 2018
$ 135,046
100,000

15,000
250,046

250,046
$ -

The effective borrowing rates as of December 31, 2018 were 1.545%-3.959%.

According to the loan contract, the consolidated financial statements of the company for 107 are limited by current ratio, debt ratio, interest guarantee multiple. However, the Company’s inability to meet the ratio requirements would not be deemed as a violation of the contracts. As of 2018, the Company was in compliance with these financial ratio requirements.

19. TRADE PAYABLES

TRADE PAYABLES
Accounts payable


Payable - operating		 December 31


2019


$ 352,155
 2018
$ 484,810

The average credit period on purchases of certain goods was 30-60 days. The Group has financial risk management policies in place to ensure that all payables are paid within the pre-agreed credit terms.

20. OTHER LIABILITIES

Current
Other payables
Salaries or bonuses
Payable for royalties
Compensation due to directors
Commissions payable
Labor/health insurance
Refund liabilities
Payables for labor
Payables for purchases of equipment
Receipt in advance
Others
Deferred revenue
Deferred revenue
Arising from government grants (Note 27)
Non-current
Other payable
Long-term payables
Payables for purchases of equipment
Decommissioning liabilities
Deferred revenue
Arising from government grants (Note 27)		 December 31







2019
$ 299,871

46,676
46,467
31,540
26,629
21,971
6,105
5,552
3,028

88,262

$ 576,101

$ 1,568

$ 4,470

3,198

889

$ 8,557

$ 58,015
 2018
$ 299,445
42,261
59,190
39,772
29,424
14,796
6,403
8,088
3,767

69,400
$ 572,546
$ 1,629
$ -
2,376

889
$ 3,265
$ 61,894

21. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

Sunplus, Generalplus, Sunext, Sunplus Innovation, Sunplus mMedia and Jumplux Technology of the Group adopted a pension plan under the Labor Pension Act (LPA), which is a state-managed defined contribution plan. Under the LPA, the Group makes monthly contributions to employees’ individual pension accounts at 6% of monthly salaries and wages.

b. Defined benefit plans

Before the promulgation of the LPA, Sunplus, Generalplus, Sunext, Sunplus Innovation and Jumplux Technology of the Group had a defined benefit pension plan under the Labor Standards Law. Under this plan, employees should receive either a series of pension payments with a defined annuity or a lump sum that is payable immediately on retirement and is equivalent to 2 base units for each of the first 15 years of service and 1 base unit for each year of service thereafter. The total retirement benefit is subject to a maximum of 45 units. The pension benefits are calculated on the basis of the length of service and average monthly salaries of the six month before retirement. In addition, the Group makes monthly contributions, equal to 2% of salaries, to a pension fund, which is administered by a fund monitoring committee. Pension contributions are deposited in the Bank of Taiwan in the committee’s name and are managed by the Bureau of Labor Funds, Ministry of Labor (the “Bureau”); the company has no right to influence the investment policy and strategy. According to the letter of Zhuhuanzi No. 1090003642 issued by the Hsinchu Science Park Administration of the Ministry of Science and Technology, the Company ceased its retirement fund contribution temporarily from January 1, 2020 to December 31, 2020.

The actuarial valuations of plan assets and the present value of the defined benefit obligation were carried out by qualifying actuaries. The principal assumptions used for the purposes of the actuarial valuations were as follows:

Present value of funded defined benefit obligation
Fair value of plan assets
Net liabilities arising from defined benefit obligation		 December 31


2019
$ 267,360


(204,475)

$ 62,885
 2018
$ 268,025

(188,770)
$ 79,255

Movements in net defined benefit liabilities were as follows:

Present Value of Present Value of
Funded Defined Net Defined
Benefit Fair Value of Benefit Liabilities
Obligation Plan Assets (Assets)

Balance at January 1, 2018
$
290,833		 $ 191,869 $
98,964
Service cost
Current service cost 789 - 789
Net interest expense (income) 3,587 2,513 1,074
Recognized gain and loss 4,376 2,513 1,863
Remeasurement
Return on plan assets - 4,596 (4,596)
Actuarial (gain) loss-experience adjustment (4,068) - (4,068)
Actuarial (gain) loss-changes in demographic
assumptions (53) - (53)
Actuarial loss-changes in financial assumptions
5,222 - 5,222
Recognized in other comprehensive income 1,101 4,596 (3,495)
Contributions from the employer - 5,932 (5,932)
Consolidated changes (24,373) (8,609) (15,764)
Liabilities extinguished on settlement (3,912) (7,531) 3,619
Balance at December 31, 2018 $
268,025		 $ 188,770 $
79,255
(Continued)
Present Value of Present Value of
Funded Defined Net Defined
Benefit Fair Value of Benefit Liabilities
Obligation Plan Assets (Assets)
Balance at January 1, 2019 $
268,025		 $ 188,770 $
79,255
Service cost
Current service cost 805 - 805
Net interest expense (income) 3,051 2,212 839
Recognized gain and loss 3,856 2,212 1,644
Remeasurement
Return on plan assets - 6,223 (6,223)
Actuarial (gain) loss-experience adjustment (2,387) - (2,387)
Actuarial (gain) loss-changes in demographic
assumptions 47 - 47
Actuarial loss-changes in financial assumptions
3,602 - 3,602
Recognized in other comprehensive income 1,262 6,223 (4,961)
Contributions from the employer - 13,053 (13,053)
Benefit paid (5,783) (5,783) -
Balance at December 31, 2019 $
267,360		 $ 204,475 $
62,885
(Concluded)

An analysis by function of the amounts recognized in profit or loss in respect of the benefit plans is as follows:

Operating costs
Selling and marketing expenses
General and administrative expenses
Research and development expenses
Net liability arising from defined benefit obligation		 For the Year Ended December 31 For the Year Ended December 31 For the Year Ended December 31


2019
$ 155

176
431

936

$ 1,698
 2018
$ 215
234
453

904
$ 1,806

Through the defined benefit plans under the Labor Standards Law, the Group is exposed to the following risks:

  • 1) Investment risk: The plan assets are invested in domestic and foreign equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the Bureau or under the mandated management. However, in accordance with relevant regulations, the return generated by plan assets should not be below the interest rate for a 2-year time deposit with local banks.

  • 2) Interest risk: A decrease in the government bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the plan’s debt investments.

  • 3) Salary risk: The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the present value of the defined benefit obligation.

The actuarial valuations of the present value of the defined benefit obligation were carried out by qualified actuaries. The significant assumptions used for the purposes of the actuarial valuations were as follows:

Discount rate(s)
Expected rate(s) of salary increase
Resignation rate		 December 31
2019
2018
0.80%-1.00%
1.10%-1.20%
4.00%-5.00%
4.00%-5.00%
0%-28%
0%-28%

If possible reasonable change in each of the significant actuarial assumptions will occur and all other assumptions will remain constant, the present value of the defined benefit obligation would increase (decrease) as follows:


(decrease) as follows:
December 31, December 31,
2019 2018
Discount rate(s)
0.25% increase $ (7,703) $ (8,405)
0.25% decrease $ 8,014 $ 8,761
Expected rate(s) of salary increase
1% increase $ 32,682 $ 35,932
1% decrease $ (28,567) $ (31,147)

The sensitivity analysis presented above may not be representative of the actual change in the present value of the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Expected contributions to the plan for the next year
Average duration of the defined benefit obligation		 December 31
2019
2018
$ 4,024
$ 9,106
13-16 years
14-17 years

22. EQUITY

  • a. Share capital

  • 1) Ordinary shares:

Number of shares authorized (in thousands)

Shares authorized

Number of shares issued and fully paid (in thousands)

Shares issued
 December 31 December 31



2019

1,200,000

$ 12,000,000


591,995

$ 5,919,949
 2018

1,200,000
$ 12,000,000

591,995
$ 5,919,949

Fully paid ordinary shares, which have a par value of $10, carry one vote per share and carry a right to dividends.

Of the Group’s authorized shares, 80,000 thousand shares had been reserved for the issuance of convertible bonds and employee share options.

2) Global depositary receipts

In March 2001, Sunplus issued 20,000 thousand units of global depositary receipts (GDRs), representing 40,000 thousand ordinary shares that consisted of newly issued and originally outstanding shares. The GDRs are listed on the London Stock Exchange (code: SUPD) with an issuance price of US$9.57 per unit. As of December 31, 2019, the outstanding 175 thousand units of GDRs represented 350 thousand ordinary shares.

b. Capital surplus

Capital surplus
May be used to offset a deficit, distributed as cash dividends, or
transferred to share capital (a)
Arising from the issuance of ordinary shares
Arising from the acquisition of a subsidiary
The difference between consideration received or paid and the carrying
amount of the subsidiaries’ net assets during actual disposal or
acquisition
May be used to offset a deficit only
From treasury share transactions
Changes in net equity of associates or joint ventures accounted for using
the equity method		 December 31


2019
$ 196,095

157,423
140,184
45,239

55,491

$ 594,432
 2018
$ 409,213
157,423
140,022
43,958

50,782
$ 801,398
  • a) When the Company has no deficit, such capital surplus may be distributed as cash dividends, or may be transferred to share capital once a year and within a certain percentage of the Company’s capital surplus.

c. Retained earnings and dividend policy

Under the dividend policy as set forth in the amended Articles, Sunplus shall appropriate from annual net income less any accumulated deficit: (a) 10% as legal reserve; and (b) special reserve equivalent to the debit balance of any accounts shown in the shareholders’ equity section of the balance sheet, other than deficit.

Under the approved shareholders’ resolution, the current year’s net income less all the foregoing appropriations and distributions, plus the prior years’ unappropriated earnings may be distributed as additional dividends. Sunplus’ policy is that cash dividends should be at least 10% of total dividends distributed. However, cash dividends will not be distributed if these dividends are less than NT$0.5 per share.

Under the regulations promulgated, a special reserve equivalent to the debit balance of any account shown in the shareholders’ equity section of the balance sheet (for example, unrealized loss on financial assets and cumulative translation adjustments) should be allocated from unappropriated retained earnings. For the policies on distribution of employees’ compensation and remuneration to directors before and after amendment, refer to Note 24-g.

Appropriation of earnings to legal reserve shall be made until the legal reserve equals the Company’s paid-in capital. Legal reserve may be used to offset deficit. If the Company has no deficit and the legal reserve has exceeded 25% of the Company’s paid-in capital, the excess may be transferred to capital or distributed in cash.

The Company appropriates or reverses a special reserve in accordance with Rule No. 1010012865 and Rule No. 1010047490 issued by the FSC and the directive entitled “Questions and Answers on Special Reserves Appropriated Following the Adoption of IFRSs”. Distributions can be made out of any subsequent reversal of the debit to other equity items.

The appropriations from the 2019 and 2018 earnings were approved at the shareholders’ meetings in June 10, 2019 and on June 11, 2018, respectively. The appropriations, including dividends, were as follows:

Legal reserve
Special reserve
Cash dividend
Cash dividend per share (NT$)		 Appropriation of Earnings
For Year 2018
For Year 2017
$ 562
$ 41,321
$ 241,173
$ 44,284
$ -
$ 327,551
$ -
$ 0.5533

The Company’s shareholders also proposed in the shareholders’ meeting on June 10, 2019 and June 11, 2018 to issue cash dividends from capital surplus of $213,118 and $86,846 thousand, respectively.

The appropriation of earnings for 2019 is subject to resolution in the shareholders’ meeting to be held on June 12, 2020.

d. Special reserve

Beginning at January 1
Appropriations to the special reserve
Balance at December 31		 For the Year Ended December 31 For the Year Ended December 31 For the Year Ended December 31
2019
$ 62,279
241,173
$ 308,452		 2018
$ 22,995

44,284
$ 67,279

e. Other equity items

1) Foreign currency translation reserve:

Balance at January 1
Exchange differences on translating foreign operations
Share of exchange differences of associates accounted for using
equity method
Balance at December 31		 For the Year Ended December 31 For the Year Ended December 31 For the Year Ended December 31


2019
$ (138,875)

(75,511)

(4,394)

$ (218,780)
 2018
$ (122,100)
(13,871)

(2,904)
$ (138,875)
  • 2) Unrealized gain (loss) from investments in equity instruments measured at fair value through other comprehensive income:
Unrealized gain (loss) from investments in equity instruments
comprehensive income:		 measured at fair value through other measured at fair value through other measured at fair value through other
Balance at January 1
Current
Unrealized gain (loss)
Cumulative unrealized gain (loss) of equity instruments
transferred to retained earnings due to disposal
Share of unrealized gain (loss) on associates accounted for using the
equity method
Balance at December 31		 For the Year Ended December 31


2019
$ (303,968)

(20,881)
279,514

3,089

$ (42,246)
 2018
$ (230,011)
(104,028)
37,070

(6,999)
$ (303,968)

f. Non-controlling interests

Balance at January 1

Attributable to no controlling interests:
Share of profit for the year
Exchange difference on translation foreign operations
Unrealized gain (loss) on financial assets at FVTOCI
Actuarial gains on defined benefit plans
Distribution of dividends by subsidiaries
Non-controlling interests related to outstanding vested share options
held by the employees of subsidiaries
Disposal of subsidiaries (Note 29)
Others

Balance at December 31
 For the Year Ended December 31 For the Year Ended December 31


2019
$ 1,401,664

159,443
(9,377)
(563)
225
(157,520)
-
-

286

$ 1,394,158
 2018
$ 1,677,049
136,707
(4,190)
343
(1,165)
(169,798)
37
(229,844)

(8,953)
$ 1,401,664

g. Treasury shares

Shares
Transferred to Shares Held by
Employees (In Its Subsidiaries Total (In
Thousands of (In Thousands of Thousands of
Purpose of Buyback Shares) Shares) Shares)
Number of shares as of January 1, 2018 - 3,560 3,560
Decrease -
-		 -
Number of shares as December 31, 2018 -
3,560
3,560
Number of shares as of January 1, 2019 - 3,560 3,560
Decrease -
-		 -
Number of shares as December 31, 2019 -
3,560
3,560

The Group’s shares held by its subsidiaries at the end of the reporting periods were as follows:

Shares
Transferred to Shares Held by
Employees (in Its Subsidiaries Total (in
Thousands of (in Thousands of Thousands of
Name of Subsidiary Shares) Shares) Shares)
December 31, 2019
Lin Shin Investment Co., Ltd 3,560 $ 63,401 $ 48,238
December 31, 2018
Lin Shin Investment Co., Ltd 3,560 $ 63,401 $ 40,050

Under the Securities and Exchange Act, Sunplus should neither pledge treasury shares nor exercise shareholders’ rights on these shares, such as rights to dividends and to vote.

23. REVENUE

REVENUE
Revenue from contracts with customers

Rental income from property
Other

 For the Year Ended December 31


2019
$ 5,110,744
265,330

136,256

$ 5,512,330
 2018
$ 5,663,059

199,184

215,490
$ 6,077,733
  • a. Contract information

Revenue from the sale of goods

IC products are sold to agents and customers. The Company determines the sales price of products based on orders. It takes into consideration the past purchases of agents and customers in order to estimate the most likely discount amount and return rate. Based on the determination of revenue, the Company recognizes the amount and the liabilities for refunds (accounted for as other current liabilities).

Other

Other mainly come from software development.

  • b. Contract balances
Trade receivables (Note 9)

Contract liabilities - current
 December 31,
2019
$ 832,633

$ 24,912
 December 31,
2018

$ 954,030


$ 7,511
 January 1,
2018
$ 1,197,626
$ -

The changes in the balance of contract liabilities primarily result from the timing difference between the Company’s performance and the respective customer’s payment.

  • c. Disaggregation of revenue

For the Year Ended December 31, 2018

Primary geographical markets
Asia

Taiwan
Others


Timing of revenue recognition
Satisfied at a point in time

Satisfied over time

 Reportable Segments Reportable Segments
Direct Sales





2018
$ 3,499,818

1,956,236

59,276

$ 5,512,330

$ 5,236,136


276,194

$ 5,512,330
 2018
$ 4,065,798
1,909,863

102,072
$ 6,077,733
$ 5,860,179

217,554
$ 6,077,733

24. NET PROFIT

Net profit included the following items:

a. Other income

Interest income
Dividend income
Subsidy income
Others		 For the Year Ended December 31 For the Year Ended December 31 For the Year Ended December 31


2019
$ 24,578

28,815
19,294

83,429

$ 156,116
 2018
$ 22,896
26,982
1,661

64,924
$ 116,463

b. Other gains and losses

Net gain (loss) on financial assets and liabilities
Net gain (loss) on financial assets designated as at FVTPL (Note 7)
Net foreign exchange loss
Gain on disposal of subsidiary/associates
Others		 For the Year Ended December 31 For the Year Ended December 31 For the Year Ended December 31


2019
$ 17,879

(27,640)
(43)

10,931

$ 1,127
 2018
$ 67,736
(15,895)
182,621

11,540
$ 246,002

c. Finance costs

Interest on bank loans
Interest on lease liabilities
Other finance costs
d. Depreciation and amortization
An analysis of depreciation by function
Operating costs
Operating expenses
An analysis of amortization by function
Operating costs
Operating expenses
e. Operating expenses directly related to investment properties
Direct operating expenses from investment property that generated rental
income
f.
Employee benefit expense
Short-term benefits

Post-employment benefits
Defined contribution plans
Defined benefit plans (Note 21)

Other employee benefits

Share-based payments
Equity-settled

Other employee benefits

Total employee benefit expense

An analysis of employee benefit expense by function
Operating costs

Operating expenses

 For the Year Ended December 31 For the Year Ended December 31
2019
2018
$ 15,721
$ 21,239
5,674
-

3,454

2,584
$ 24,849
$ 23,823
For the Year Ended December 31
2019
2018
$ 81,393
$ 79,758

201,161

196,028
$ 282,554
$ 275,786
$ -
$ 228

77,812

82,009
$ 77,812
$ 82,237
For the Year Ended December 31
2019
2018
$ 77,547
$ 76,191
For the Year Ended December 31








2019
$ 1,494,942

45,278

1,698


46,976


-


28,171

$ 1,570,089

$ 97,707

1,472,382

$ 1,570,089
 2018
$ 1,716,303
56,066

1,806

57,872

37

28,418
$ 1,802,630
$ 136,269

1,666,361
$ 1,802,630

g. Employees’ compensation and remuneration of directors

The Company resolved amendments to its Articles of Incorporation to distribute employees’ compensation and remuneration directors at rates of no less than 1% and no higher than 1.5%, respectively, of net profit before income tax, employees’ compensation, and remuneration of directors. The employees’ compensation and remuneration of directors for the years ended December 31, 2019 and 2018, which have been approved by the Company’s board of directors on March 30, 2020 and March 20, 2018, respectively, were as follows:

Accrual rate
Employees’ compensation
Remuneration of directors
Amount
Employees’ compensation
Remuneration of directors		 For the Year Ended December 31
2019
2018
1.00%
1.00%
1.50%
1.50%
For the Year Ended December 31		 For the Year Ended December 31 For the Year Ended December 31
2019
Cash
Shares
$ 206
$ -
309
-		 2018
Cash
Shares
$ 80
$ -
119
-

If there is a change in the proposed amounts after the annual consolidated financial statements are authorized for issue, the differences are recorded as a change in accounting estimate.

There was no difference between the actual amounts of employees’ compensation and remuneration of directors paid and the amounts recognized in the consolidated financial statements for the years ended December 31, 2019 and 2018.

Information on the employees’ compensation and remuneration of directors resolved by the Company’s board of directors in 2020 and 2019 is available at the Market Observation Post System website of the Taiwan Stock Exchange.

h. Gain or loss on exchange rate changes

Exchange rate gains
Exchange rate losses		 For the Year Ended December 31 For the Year Ended December 31 For the Year Ended December 31


2019
$ 87,093


(114,733)

$ (27,640)
 2018
$ 140,569

(156,464)
$ (15,895)

25. INCOME TAXES

a. Income tax recognized in profit or loss

The major components of tax expense were as follows:

Current tax
In respect of the current year
Adjustments for prior periods
Consolidated changes
Deferred tax
In respect of the current year
Income tax expense recognized in profit or loss		 For the Year Ended December 31 For the Year Ended December 31 For the Year Ended December 31
2019
$ 90,323
(22,355)

-
67,968

1,500
$ 69,468		 2018
$ 86,720
(24,496)

(1,518)
60,706

961
$ 61,667

A reconciliation of accounting profit and current income tax expenses is as follows:

Profit before tax
Income tax expense at the 17% statutory rate
Different statutory rate in other jurisdictions
Tax effect of adjusting items:
Nondeductible expenses in determining taxable income
Temporary differences
Unrecognized temporary differences
Current investment credit
Effects of consolidated income tax filing
Current income tax expense
Deferred income tax expense
Temporary differences
Unrecognized loss carryforwards
Adjustments for prior years’ tax
Foreign income tax expense
Consolidated changes
Income tax expense recognized in profit or loss		 Years Ended December 31 Years Ended December 31



2019
$ 244,220

$ 48,844

2,344
3,163
(11,475)
(419)
(6,650)

(42)

35,765
1,500
49,771
(22,355)
4,787
-
$ 69,468
 2018
$ 203,990
$ 40,798
1,710
(11,962)
(22,380)
(885)
-

(47)
7,234
961
77,806
(24,496)
1,680
(1,518)
$ 61,667

The Income Tax Act in the ROC was amended in 2018, and the corporate income tax rate was adjusted from 17% to 20%. In addition, the rate of the corporate surtax applicable to the 2018 unappropriated earnings was reduced from 10% to 5%.

In July 2019, the President of the ROC announced the amendments to the Statute for Industrial Innovation, which stipulate that the amounts of unappropriated earnings in 2018 and thereafter that are reinvested in the construction or purchase of certain assets or technologies are allowed as deduction when computing the income tax on unappropriated earnings.

b. Current tax assets and liabilities

Current tax assets
Tax refund receivable (classified as other receivable)
Prepaid income tax (classified as other current assets)
Current tax liabilities
Income tax payable		 December 31 December 31
2019
$ 516

24
$ 540
$ 52,169		 2018
$ 871

-
$ 871
$ 56,972

c. Deferred tax assets and liabilities

The Group offset certain deferred tax assets and deferred tax liabilities that met the offset criteria.

The movements of deferred tax assets and deferred tax liabilities were as follows:

For the year ended December 31, 2019

Recognized in Recognized in
Deferred Tax Assets Opening Balance Profit or Loss Closing Balance
Temporary differences
Unrealized loss on inventories $ 12,102 $ 18 $ 12,120
Fixed assets 4,063 884 4,947
Unrealized sales 675 208 883
Exchange (gains) losses (1,003) 777 (226)
Other 14,417 (3,387) 11,030
$ 30,254 $ (1,500) $ 28,754

For the year ended December 31, 2018

Recognized in Recognized in
Deferred Tax Assets Opening Balance Profit or Loss Closing Balance
Temporary differences
Unrealized loss on inventories $ 19,913 $ (7,811) $ 12,102
Fixed assets 864 3,199 4,063
Unrealized sales 658 17 675
Exchange (gains) losses (924) (79) (1,003)
Other 10,704 3,713 14,417
$ 31,215 $ (961) $ 30,254
  • d. Deductible temporary differences, unused loss carryforwards and unused investment credits for which no deferred tax assets have been recognized in the consolidated balance sheets
e. December 31
2019
2018
Loss Carryforwards
Expiry in 2019
$ - $ 257,108
Expiry in 2020
251,700
251,700
Expiry in 2021
535,328
551,637
Expiry in 2022
536,364
536,364
Expiry in 2023
1,467,084
1,467,084
Expiry in 2024
65,199
65,199
Expiry in 2025
49,489
49,489
Expiry in 2026
55,551
55,551
Expiry in 2027
88,194
88,194
Expiry in 2028
130,320
130,320
Expiry in 2029

75,674

-
$ 3,254,903
$ 3,452,646
Deductible temporary differences
$ 113,956
$ 177,411
Unused loss carryforwards and tax-exemptions
Loss carryforwards as of December 31, 2019 pertaining to Sunplus:
Unused Amount
Expiry Year
$ 211,457
2020
322,509
2021
394,894
2022
1,144,831
2023
24,228
2027

19,642
2029
$ 2,117,561
Loss carryforwards as of December 31, 2019 pertaining to Sunplus Venture:
Unused Amount
Expiry Year
$ 17,891
2020
4,863
2022

92,197
2023
$ 114,951
Loss carryforwards as of December 31, 2019 pertaining to Lin Shin:
Unused Amount
Expiry Year
$ 39,908
2023
Loss carryforwards as of December 31, 2019 pertaining to Sunext:
Unused Amount
Expiry Year		 December 31 December 31
2018
$ 257,108

251,700

551,637

536,364

1,467,084

65,199

49,489

55,551

88,194

130,320

-
$ 3,452,646
$ 177,411
Expiry Year
2020
2021
2022
2023
2027
2029
Expiry Year
2020
2022
2023
Expiry Year
2023
Expiry Year


$ 103,779
2021
100,760
2022
159,490
2023
31,147
2024

975
2025
$ 396,151

Loss carryforwards as of December 31, 2019 pertaining to Sunplus mMedia:

Unused Amount Expiry Year
$ 22,352 2020
109,040 2021
35,847 2022
30,658 2023
29,360 2024
27,164 2025
11,155 2026
9,369 2027
57,427 2028
25,066 2029
$ 357,438

Loss carryforwards as of December 31, 2019 pertaining to Jumplux:

Unused Amount Expiry Year
$ 4,692 2024
21,350 2025
44,396 2026
54,597 2027
72,893 2028
30,966 2029
$ 228,894

The income from the following projects is exempt from income tax for five years. The related tax-exemption periods are as follows:

Project Tax Exemption Period

Sunplus

Fourteenth expansion Fifteenth expansion

January 1, 2015 to December 31, 2019 January 1, 2015 to December 31, 2019

  • f. Income tax assessments

The income tax returns of Sunplus, Sunplus mMobile, Generalplus, Sunplus Innovation, Sunext, Sunplus mMedia, Sunplus management Consulting, Wei-Yough, Lin Shih, Sunplus Venture and Jumplus through 2017 had been assessed by the tax authorities.

26. EARNINGS PER SHARE

Unit: NT$ Per Share

EARNINGS PER SHARE Unit: NT$ Per Share Unit: NT$ Per Share Unit: NT$ Per Share

Basic gain per share
Diluted earnings per share		 For the Year Ended December 31

2019
$ 0.03

$ 0.03
 2018
$ 0.01
$ 0.01

The earnings and weighted average number of ordinary shares outstanding in the computation of earnings per share were as follows:

Net profit for the year

Profit for the year attributable to owners of the Company
Effect of potentially dilutive ordinary shares
Bonuses for employees
Earnings used in the computation of diluted EPS from continuing operations		 Years Ended December 31 Years Ended December 31



2019
$ 15,309


-

$ 15,309
 2018
$ 5,616

-
$ 5,616

The weighted average number of ordinary shares outstanding (in thousand shares) is as follows:


Weighted average number of ordinary shares used in the computation of
basic earnings per shares
Effect of dilutive potential ordinary shares:
Bonuses issued to employees
Weighted average number of ordinary shares used in the computation of
diluted earnings per share		 For the Year Ended December 31 For the Year Ended December 31 For the Year Ended December 31

2019
588,435

16


588,451
 2018
588,435

60

588,495

If the Company offered to settle bonus or remuneration to employees in cash or shares. If the Company decides to use shares in settling the entire amount of the bonus or remuneration the resulting potential shares will be included in the weighted average number of shares outstanding to be used in computation of diluted earnings per share, if the effect is dilutive. This dilutive effect of the potential shares will be included in the computation of diluted earnings per share until the number of shares to be distributed to employees is determined in the following year.

27. GOVERNMENT GRANTS

In August 2013, Sun Media Technology Co., Ltd. received a government grant amounting to RMB16,390 thousand ($79,213 thousand) for the purchase of land on which to build a plant. The amount was recognized as deferred revenue and subsequently transferred to profit or loss over the useful life of the related asset.

The total revenue recognized as profit for the years ended December 31, 2019 and 2018 was $1,629 and $1,661 thousand, respectively.

28. CONSOLIDATION OF SUBSIDIARR

  • a. Subsidiaries acquired
Proportion of
Voting Equity
Interests Consideration
Subsidiary Principal Activity
 Date of Acquisition
Acquired (%)
Transferred
Worldplus and its Investment, development September 2, 2019 100 $ 112,669
subsidiaries of computer software,
system integration
services and building
rental
Consideration transferred
Worldplus and
Its Subsidiaries
Cash $
112,669
Assets acquired and liabilities assumed at the date of acquisition
Worldplus and
Its Subsidiaries
Current assets
Cash and cash equivalents $
64,454
Trade and other receivables 428
Non-current assets
Property, plant and equipment 377
Construction in progress 17,088
Investment properties 37,383
Current liabilities
Trade and other payables (2,303)
Long-term payables (4,758)
$
112,669
  • b. Consideration transferred

c. Assets acquired and liabilities assumed at the date of acquisition

  • d. Net cash outflow on the acquisition of subsidiaries

Worldplus and Its Subsidiaries

Consideration paid in cash

Less: Cash and cash equivalent balances acquired

 $ 112,669

(64,454)
$ 48,215
  • e. Impact of acquisitions on the results of the Group

The results of Worldplus and its subsidiary since the acquisition date included in the consolidated statements of comprehensive income were as follows:

Worldplus and
Its Subsidiaries
Net revenue $ 2,053
Net profit $ (2,582)

If the merger of Worldplus and its subsidiaries occurred on January 1, 2019, the Japanese company’s proposed operating income and proposed operating net loss were $5,516,431 and $728,250, respectively, from January 1 to December 31, 2019. It is reflected that the actual revenue and operating results of the Company should not be used as a predictor of future operating results. The original accounting treatment of Worldplus and its subsidiaries is only tentative on the balance sheet date. For the purpose of taxation, the tax base of Worldplus and its subsidiaries’ assets is subject to re-determination based on the market value of such assets and the taxable value of the company’s management.

In determining the pro-forma revenue and profit of the Group had Worldplus and its subsidiaries been acquired at the beginning of the financial year, the management considered the following:

  • 1) The fair values of property, plant and equipment, rather than their carrying amounts recognized in the respective pre-acquisition financial statements at the initial accounting for the business combination, were used as a basis for the depreciation of property, plant and equipment.

29. DISPOSAL OF SUBSIDIARIES

2019

The Group completed the liquidation on its subsidiary, Han Young Technology Co., Ltd. on November 15, 2019.

a. Analysis of assets amd liabilities from liquidation

Hanyang Hanyang
Technology Co.,
Ltd.
Current assets
Cash and cash equivalents $ 2,481
Other receivables 7
Non-current assets
Property, plant and equipment 29
Refundable deposits 55
Current liabilities
Others (29)
Net assets disposed of $ (2,543)
Loss on liquidation of subsidiaries
Hanyang
Technology Co.,
Ltd.
Collection price of investments accounted $ 1,737
Net assets disposed of (2,543)
Non-controlling interests 763
Loss on disposal $ 43
Net cash inflow on liquidation of subsidiaries
Hanyang
Technology Co.,
Ltd.
Consideration received in cash and cash equivalents $ 1,737
Less: Cash and cash equivalent balances disposed of (2,481)
$ (744)

  • b. Loss on liquidation of subsidiaries

  • c. Net cash inflow on liquidation of subsidiaries

2018

In March 2018, the Company did not participate in the capital increase in cash of Sunplus Technology Xiamen Xm-plus in accordance with the shareholding ratio, resulting in the company’s shareholding ratio decreasing from 100% to 45%, and the number of directors was less than half the usual number, hence the control of Sunplus Technology Xiamen Xm-plus was lost. In addition, iCatch Technology has independently operated its financial activities on July 31, 2018, so the Company assessed it has lost control.

a. Analysis of assets and liabilities on the date control was lost

Sunplus
Technology
Xiamen Xm-plus
Current assets
Cash and cash equivalents
$ 187

Accounts receivables
-
Inventories
971
Other receivables
63
Other current assets
1,009
Non-current assets
Property, plant and equipment
595
Intangible assets
77
Refundable deposits
-
Deferred income tax - non-current
-
Current liabilities
Trade payables
(170)
Accrued expenses
-
Other current liabilities
(20,710)
Accrued pension liabilities
-
Deposits received
-
Contract liabilities

-

Net liabilities disposed of
$ (17,978)

b. Gain on disposal of subsidiaries
Sunplus
Technology
Xiamen Xm-plus
Collection price of investments accounted for using the equity method
$ 9,294

Disposed of net liabilities (assets)
17,978
Reclassification of net assets and related hedging instruments to
accumulated exchange differences on profit (loss) due to loss of
control of subsidiaries
(211)
Non-controlling interests

-

Gain on disposals
$ 27,061
 iCatch
Technology
$ 159,384
130,898
205,200
5,686
94,941
43,007
25,427
1,674
1,518
(148,922)
(28,812)
(606)
(15,533)
(33,053)

(19,637)
$ 421,172
iCatch
Technology
$ 335,164
(421,172)
-

229,844
$ 143,836

30. EQUITY TRANSACTIONS WITH NON-CONTROLLING INTERESTS

Sunplus purchased Jumplux Technology's issuance of ordinary shares for cash on July, 2018, resulting in an increase in the overall shareholding ratio from 95.00% to 97.08%.

Sunplus Shanghai Company purchased Yrip Technology’s issuance of ordinary shares for cash on August, 2018, resulting in an increase in the overall shareholding ratio from 83.40% to 90.71%.

Lingyang Company repurchased its equity from the external shareholders of Sunext Company from October to December, 2018, resulting in an increase in the overall shareholding ratio from 74.15% to 91.40%.

From January to March, April and September, 2019, Sunplus purchased the equity from the external shareholders of Sunext Technology Co., Ltd. increasing its controlling interest from 91.40% to 91.47%, 91.47% to 91.53% and 91.53% to 92.55%, respectively.

In February, May and December, 2019, Giant Rock subscribed for the capital increase in cash of Sunplus App Technology, increasing its controlling interest from 93.33% to 95.00%, 95.00% to 95.65% and 95.65% to 96.16%.

The above transactions were accounted for as equity transactions since the Group did not cease to have control over these subsidiaries.

2019

Sunext
Technology Co., Sunplus App
Ltd. Technology
Cash consideration paid $
(2,184)
$		 -
The proportionate share of the carrying amount of the net assets of the
subsidiary transferred to non-controlling interests 2,346 (3,394)
Differences recognized from equity transactions $
162
$
(3,394)
Sunext
Technology Co., Sunplus App
Ltd. Technology Total
Line items adjusted for equity transactions
Unappropriated earnings $ -
 $ (3,394)
$ (3,394)
Capital surplus - difference between consideration
received or paid and the carrying amount of the
subsidiaries’ net assets during actual disposal or
acquisition
Retained earnings 162
 - 162
$ 162
 $ (3,394) $ (3,232)
2018
Sunext
Jumplux
Ytrip Technology		 Technology Co.,
Technology Co., Ltd. Ltd.
Cash consideration paid
$		 -
 $
-		 $
(31,571)
The proportionate share of the carrying amount of the
net assets of the subsidiary transferred to
non-controlling interests (3,667) (18,747) 31,300
Reattribution of other equity to (from) non-controlling
interests
Exchange differences on translating the financial
statements of foreign operations - 212 -
Differences recognized from equity transactions $
(3,667)
 $
(18,535)		 $
(271)
Ytrip Sunext
Jumplux Technology Co.,
Technology Co.,
Technology
 Ltd. Ltd. Total

Line items adjusted for equity
transactions
Capital surplus - changes in percentage
of ownership interests in subsidiaries $
(3,667)		 $ (18,535) $ - $ (22,202)
Capital surplus - difference between
consideration received or paid and
the carrying amount of the
subsidiaries’ net assets during actual -
 - (271) (271)

disposal or acquisition

$ (3,667) $ (18,535) $ (271) $ (22,473)

31. CAPITAL MANAGEMENT

The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximizing the return to stakeholders through the optimization of the debt and equity balance.

The capital structure of the Group consists of net debt (borrowings offset by cash and cash equivalents) and equity of the Group (comprising issued capital, reserves, retained earnings and other equity) attributable to owners of the Group.

The Group is not subject to any externally imposed capital requirements.

32. FINANCIAL INSTRUMENTS

  • a. Fair value of financial instruments that are not measured at fair value

The management of the Company considers that the fair values of financial assets and financial liabilities that are not measured at fair value approximate their fair values.

  • b. Fair value of financial instruments that are measured at fair value on recurring basis.

  • 1) Fair value hierarchy

December 31, 2019

Level 1 Level 2 Level 3 Total
Financial assets at FVTPL
Mutual funds
 $ 1,062,811 $ - $ - $ 1,062,811
Listed shares and emerging
market shares in the ROC
and other countries 75,715 - - 75,715
(Continued)
Unlisted shares and
emerging market shares
in the ROC and other
countries

Securities listed in the ROC
and other countries - CB
Private funds


Financial assets at FVTOCI
Listed shares and emerging
market shares in the ROC
Unlisted shares and
emerging market shares
in the ROC and other
countries


December 31, 2018
Financial assets at FVTPL
Mutual funds

Listed shares and emerging
market shares in the ROC
and other countries
Unlisted shares and
emerging market shares
in the ROC and other
countries
Securities listed in the ROC
- CB
Private funds


Financial assets at FVTOCI
Listed shares and emerging
market shares in the ROC
Unlisted shares and
emerging market shares
in the ROC and other
countries
Private funds

 Level 1
$ 7,864

15,123

-

$ 1,161,513

$ 90,472

18,680

$ 109,152

Level 1
$ 1,356,100
44,183
-
28,718

-

$ 1,429,001

$ 78,246
17,320

-

$ 95,566
 Level 2
$ -

-

-

$ -

$ -

-

$ -

Level 2
$ -

-

-

-

-

$ -

$ -

-

-

$ -
 Level 3
$ 696,471

-

260,140

$ 956,611

$ -

80,235

$ 80,235

Level 3
$ -

-

462,387

-

160,226

$ 622,613

$ -

110,671

39,971

$ 150,642
 Total
$ 74,335

15,123

260,140
$ 2,118,124
$ 90,472

98,915
$ 189,387
(Concluded)
Total
$ 1,356,100

44,183

462,387

28,718

160,226
$ 2,051,614
$ 78,246

127,991

39,971
$ 246,208

There were no transfers between Levels 1 and 2 in the current and prior periods.

2) Reconciliation of Level 3 fair value measurements of financial instruments

For the Year Ended December 31, 2019

Financial Assets
Financial Assets
at FVTPL
Financial Assets
at FVTOCI
Balance at January 1, 2019
$ 662,584
$ 110,671

Recognized in profit or loss
(25,062)
-
Recognized in other comprehensive income
-
(35,402)
Purchases
328,054
-
Disposals and proceeds from return of capital
of investments
(5,963)
(24,604)
Reclassified
-
30,001
Effect of exchange rate changes

(3,002)

(431)

Balance at December 31, 2019
$ 956,611
$ 80,235

For the Year Ended December 31, 2018
Financial Assets
Financial Assets
at FVTPL
Financial Assets
at FVTOCI
Balance at January 1, 2018
$ 442,888
$ 171,568

Recognized in profit or loss
16,345
-
Recognized in other comprehensive income
-
(78,319)
Purchases
315,443
35,894
Disposals
(111,996)
(4,930)
Transfers out of Level 3
-
(13,593)
Effect of exchange rate changes

(96)

51

Balance at December 31, 2018
$ 622,584
$ 110,671
 Total
$ 773,255
(25,062)
(35,402)
328,054
(30,567)
30,001

(3,433)
$ 1,036,846
Total
$ 614,456
16,345
(78,319)
351,337
(116,926)
(13,593)

(45)
$ 773,255

  • 3) Valuation techniques and inputs applied for Level 3 fair value measurement

  • a) The fair values of unlisted shares and emerging market shares were determined using the market approach. The significant unobservable inputs used are listed in the table below. An increase in the price-to-book ratio or price-sales ratio or a decrease in the discount for lack of marketability used in isolation would result in increases in fair value.

Price-to-book ratio
Price-to-sales ratio
Discount for lack of marketability		 December 31
2019
2018
1.85-4.42
0.66-4.16
2.27-6.37
0.69-7.52
10%-20%
10%-30%

  • b) The fair values of unlisted shares and emerging market shares were determined using the asset-based approach. The Group assesses that the amount of its net assets attributable to its investment approaches the fair value of the equity investment. The Group assesses the total value of the individual assets and liabilities covered by the target to reflect the overall value of the business.

  • c) The fair values of unlisted shares and emerging market shares were determined using the income approach. In this approach, the discounted cash flow method was used to capture the present value of the expected future economic benefits to be derived from the ownership of these investees. The significant unobservable inputs used are listed in the table below. An increase in long-term revenue growth rates or a decrease in the weighted average cost of capital (WACC) or discount for lack of marketability used in isolation would result in increases in fair value.

  • c. Categories of financial instruments

Financial assets
Fair value through profit or loss (FVTPL)

Financial assets at amortized cost (i)
Financial assets at fair value through other comprehensive income
Equity instruments
Financial liabilities
Measured at amortized cost (ii)		 December 31
2019
2018
$ 2,118,124
$ 2,051,614
4,147,636
4,549,250
189,387
246,208
889,360
1,276,248

  • i) The balances included loans and receivables measured at amortized cost, which comprise cash and cash equivalents, note and trade receivables, other financial assets and refundable deposit.

  • ii) The balances included financial liabilities measured at amortized cost, which comprised short-term and long-term loans, note and trade payables, long-term liabilities -current portion and guarantee deposits.

d. Financial risk management objectives and policies

The Group's major financial instruments included equity and debt investments, convertible notes, trade receivable, trade payables, bonds payable and borrowings. The Group's corporate treasury function provides services to the business, coordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Group through internal risk reports which analyze exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

The Corporate Treasury function reported quarterly to the Group's risk management committee.

1) Market risk

The Group's activities exposed it primarily to the financial risks of changes in foreign currency exchange rates (see (a) below) and interest rates (see (b) below). The Group entered into a variety of derivative financial instruments to manage its exposure to foreign currency risk and interest rate risk, including:

  • a) Foreign currency risk

A part of the Group’s cash flows is in foreign currency, and the use by management of derivative financial instruments is for hedging adverse changes in exchange rates, not for profit.

For exchange risk management, each foreign-currency item of net assets and liabilities is reviewed regularly. In addition, before obtaining foreign loans, the Group considers the cost of the hedging instrument and the hedging period.

The carrying amounts of the Group's foreign currency-denominated monetary assets and monetary liabilities (including those eliminated on consolidation) at the end of the reporting period were refer to Note 35.

Sensitivity analysis

The Group was mainly exposed to the USD and RMB.

The following table details the Company sensitivity to a US$1.00 and RMB1.00 increase and decrease in the New Taiwan dollar (the functional currency) against the relevant foreign currencies. The sensitivity analysis considers the currencies of USD and RMB in circulation, and adjusts the end-of-term conversion to exchange rate change of $1.00. The sensitivity analysis covers cash and cash equivalents, notes and

accounts receivable, other receivables, other financial assets, long-term and short-term loans, accounts payable, other accounts payable and deposit margins. A negative number below indicates a decrease in post-tax profit associated with the New Taiwan dollar strengthening $1.00 against USD and RMB. For a $1.00 weakening of the New Taiwan dollar against the relevant currency, there would be an equal and opposite impact on post-tax profit, and the balances below would be positive.

Profit or loss
Profit or loss		 USD Impact
Years Ended December 31
2019
2018
$ (18,017)
$ (9,525)
RMB Impact
Years Ended December 31
2019
2018
$ 244
$ (107)
  • b) Interest rate risk

The Group was exposed to interest rate risk because entities in the Group borrowed funds at both fixed and floating interest rates. The risk is managed by the Group by maintaining an appropriate mix of fixed and floating rate borrowings, and using interest rate swap contracts and forward interest rate contracts. Hedging activities are evaluated regularly to align with interest rate views and defined risk appetite, ensuring the most cost-effective hedging strategies are applied.

The carrying amounts of the Group’s financial assets and financial liabilities with exposure to interest rates at the end of the reporting period were as follows:

Fair value interest rate risk
Financial assets
Financial liabilities
Cash flow interest rate risk
Financial assets
Financial liabilities
Sensitivity analysis		 December 31
2019
2018
$ 2,505,022 $ 2,025,410
565,762
311,215
769,506
1,367,150
-
250,046

The sensitivity analyses below were determined based on the Group’s exposure to interest rates for both derivatives and non-derivative instruments at the end of the reporting period. For floating rate liabilities, the analysis was prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. Basis points of 0.125% increase or decrease was used when reporting interest rate risk internally to key management personnel and represents management's assessment of the reasonably possible change in interest rates.

Had interest rates increased/decreased by 0.125% and all other variables held constant, the Group’s post-tax profit for the years ended December 31, 2019 and 2018 would increase/decrease by $962 thousand and $1,396 thousand, respectively.

c) Other price risk

The Group was exposed to equity price risk through its investments in listed equity securities. Equity investments are held for strategic rather than trading purposes. The Group does not actively trade these investments.

The sensitivity analyses below were determined based on the exposure to equity price risks at the end of the reporting period.

Had the prices of financial assets at FVTPL been 1% higher/lower, post-tax profit for the year ended December 31, 2019 and 2018 would have increased/decreased by $21,181 and $20,516 thousand, respectively.

Had the prices of financial assets at FVTOCI been 1% higher/lower, post-tax profit for the year ended December 31, 2019 and 2018 would have increased/decreased by $1,894 and $2,462 thousand, respectively.

  • 2) Credit risk

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Group. As at the end of the reporting period, the Group’s maximum exposure to credit risk which will cause a financial loss to the Group due to failure to discharge an obligation by the counterparties and financial guarantees provided by the Group is arising from the carrying amount of the respective recognized financial assets as stated in the balance sheets.

In order to minimize credit risk, the management of the Group has delegated a team responsible for determination of credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. In addition, the Group reviews the recoverable amount of each individual trade debt at the end of the reporting period to ensure that adequate impairment losses are made for irrecoverable amounts. In this regard, the directors of the Group consider that the Group’s credit risk was significantly reduced.

The credit risk on liquid funds and derivatives was limited because the counterparties are banks with high credit ratings assigned by international credit-rating agencies.

Trade receivables consisted of a large number of customers, spread across diverse industries and geographical areas. Ongoing credit evaluation is performed on the financial condition of trade receivables and, where appropriate, credit guarantee insurance cover is purchased.

The Group’s concentration of credit risk of 75% and 59% in total trade receivables as of December 31, 2019 and 2018, respectively, was related to the five largest customers within the property construction business segment.

  • 3) Liquidity risk

The Group manages liquidity risk by monitoring and maintaining a level of cash and cash equivalents deemed adequate to finance the Group’s operations and mitigate the effects of fluctuations in cash flows. In addition, management monitors the utilization of bank borrowings and ensures compliance with loan covenants.

The Group relies on bank borrowings as a significant source of liquidity. As of December 31, 2019 and 2018, the Group had available unutilized overdraft and financing facilities refer to the following instruction.

  • a) Liquidity and interest risk rate tables

The following table details the Group's remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables had been drawn up based on the undiscounted cash flows of financial liabilities from the earliest date on which the Group can be required to pay. The tables included both interest and principal cash flows.

December 31, 2019

On Demand More than 3
or Less than Months to 1 Over 1 Year
1 Month
 1-3 Months
Year		 to 5 Years 5+ Years
Nonderivative financial
liabilities
Non-interest bearing
$ 271,434 $ 172,191 $ - $ -
Lease liabilities
1,414
3,109
13,074
58,541
Fixed interest rate liabilities

179,756

23,984

120,130

4,922

$ 452,604
$ 199,284
$ 133,204
$ 63,463

Additional information about the maturity analysis for lease liabilities:
Less than
1 Year
1-5 Years
5-10 Years 10-15 Years 15-20 Years
Lease liabilities
$ 17,597
$ 60,032
$ 49,046
$ 49,046
$ 43,896

December 31, 2018
On Demand
or Less than
1 Month
1-3 Months
More than 3
Months to 1
Year
Over 1 Year
to 5 Years
Nonderivative financial
liabilities
Non-interest bearing
$ 274,169 $ 85,001 $ 561,988 $ 38,504
Lease liabilities
105
15,000
235,046
-
Fixed interest rate liabilities

117,896

-

193,361

7,685

$ 392,170
$ 100,001
$ 990,395
$ 46,189
 $ -

266,450

142,928
$ 409,378
20+ Years
$ 122,971
5+ Years
$ 63,523

-

152,292
$ 215,815

b) Financing facilities

Unsecured bank overdraft facility, review annually and payable
on demand
Amount used

Amount unused

 December 31 December 31


2019
$ 323,416

4,515,381

$ 4,838,797
 2018
$ 561,504

4,479,716
$ 5,041,220

33. TRANSACTIONS WITH RELATED PARTIES

Balances and transactions between the Company and its subsidiaries had been eliminated on consolidation and are not disclosed in this note. Details of transactions between the Group and other related parties are disclosed below.

  • a. Name and relationship of related parties
Name
Global View Co., Ltd.

Beijing Golden Global View Co., Ltd.

iCatch Technology, Inc.

AutoSys Co., Ltd.
 Relationship with the Group
Associate
Associate (Note 1)
Associate (Note 2)
Associate (Note 3)

Note 1 ： It is an associate of the Company; subsidiary of Global View Co., Ltd.

Note 2 ： On July 31, 2018, the Company assessed that it had lost control of iCatch Technology, Inc.; therefore, it is classified as an associate.

Note 3 ： It is an associate of the company; subsidiary of AutoSys Co., Ltd.

  • b. Sales of goods
Line Items
Related Party Categories
Sales
Associates		 For the Year Ended December 31 For the Year Ended December 31 For the Year Ended December 31
2019
$ 54,712
 2018
$ 51,833

Sales price to related parties is based on cost and market price. The sales terms to related parties were similar to those with external customers.

  • c. Receivables from related parties (excluding loans to related parties)
Account Item
Related Party
Trade receivables
Associates
Other trade receivable
Associates		 December 31 December 31
2019
$ 11,645
$ 280		 2018
$ 17,941
$ 1,358

There were no guarantees on outstanding receivables from related parties. For the years ended December 31, 2019 and 2018, no impairment loss was recognized for trade receivables from related parties.

  • d. Other transactions with related parties

December 31

Account Item
Related Parties Types

Refundable deposits
Associates
Deposits received
Associates
Operating expenses
Associates

Non-operating income and
expenses
Associates		 2019
$ -
$ -
$ 139
$ 10,228		 2018
$ 871
$ 393
$ 4,539
$ 9,009

Administrative support services price between the Company and the related parties were negotiated and were thus not comparable with those in the market.

The pricing and the payment terms of the lease contract between the Company and the related parties were similar to those with external customers.

  • e. Compensation of key management personnel
Short-term employee benefits
Post-employment benefits		 For the Years Ended For the Years Ended December 31


2019
$ 50,100


1,297

$ 51,397
 2018
$ 61,183

1,562
$ 62,745

The remuneration of directors and other key management personnel was determined by the Compensation Committee in accordance with individual performance and market trends.

34. PLEDGED OR MORTGAGED ASSETS

The following assets of the Company have been pledged or mortgaged as guarantees for endorsement, loan, purchase quota, leased land and customs clearance:

Buildings, net
Pledged time deposits (classified as other financial assets, including current
and non-current)		 December 31


2019
$ 595,735


130,819

$ 726,554
 2018
$ 615,136

164,518
$ 779,654

35. EXCHANGE RATE OF FINANCIAL ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The Group’s group entities’ significant financial assets and liabilities denominated in foreign currencies aggregated by the foreign currencies other than functional currencies and the related exchange rates between foreign currencies and respective functional currencies were as follows:

December 31, 2019

Foreign
Currencies Exchange Carrying
(In Thousands) Rate Amount
Financial assets
Monetary items
USD $ 44,893 29.980 $
1,345,892
CNY 1,399
4.305		 6,023
JPY 391
0.276		 108
HKD 173
3.849		 666
GBP 3
39.360		 118
EUR 1
33.590		 34
Nonmonetary items
USD 28 30.620 848
CHF 734
30.925		 22,705
Financial liabilities
Monetary items
USD 26,876 29.980 805,742
CNY 1,643
4.305		 7,073
JPY 241
0.276		 67
December 31, 2018
Foreign
Currencies Exchange Carrying
(In Thousands) Rate Amount
Financial assets
Monetary items
USD $ 42,724 30.715 $
1,312,268
CNY 2,388
4.472		 10,679
JPY 352
0.278		 98
HKD 152
3.921		 596
GBP 3
38.880		 117
EUR 1
35.200		 35
Nonmonetary items
USD 28 30.715 848
CHF 786
31.190		 24,513
Financial liabilities
Monetary items
USD 33,199 30.715 1,019,707
CNY 2,281
4.472		 10,201

The foreign currency exchange loss and gain (realized and unrealized) were amounted to $27,640 thousand and $15,895 thousand for the ended December 31, 2019 and 2018, respectively. Due to the diversity of the functional currencies of the Group, it is unable to disclose foreign currency with significant influence.

36. ADDITIONAL DISCLOSURES

  • a. Following are the additional disclosures required for the Group and its investees by the Securities and Futures Bureau:

  • 1) Financings provided: Table 1 (attached)

  • 2) Endorsement/guarantee provided: Table 2 (attached)

  • 3) Marketable securities held: Table 3 (attached)

  • 4) Marketable securities acquired and disposed of at costs or prices of at least NT$300 million or 20% of the paid-in capital: Tables4 (attached)

  • 5) Acquisition of individual real estate at costs of at least NT$300 million or 20% of the paid-in capital: No.

  • 6) Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital: No.

  • 7) Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital: No.

  • 8) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital: No.

  • 9) Trading in derivative instruments: No.

  • 10) Intercompany relationships and significant intercompany transactions: Table 5 (attached)

  • 11) Information on investee: Table 6 (attached)

  • b. Information on investments in mainland China

  • 1) Information on any investee company in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, net income of investees, investment income or loss, carrying amount of the investment at the end of the period, repatriations of investment income, and limit on the amount of investment in the mainland China area. (Table 7)

  • 2) Any of the following significant transactions with investee companies in mainland China, either directly or indirectly through a third party, and their prices, payment terms, and unrealized gains or losses: (Table 8)

    • a) The amount and percentage of purchases and the balance and percentage of the related payables at the end of the period.

    • b) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the period.

    • c) The amount of property transactions and the amount of the resultant gains or losses.

    • d) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the period and the purposes.

  • e) The highest balance, the end of period balance, the interest rate range, and total current period interest with respect to financing of funds.

  • f) Other transactions that have a material effect on the profit or loss for the period or on the financial position, such as the rendering or receiving of services.

Except for Table 1 to Table 8, there’s no further information about other significant transactions.

37. SEGMENT INFORMATION

Information reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance focuses on types of goods provided. Since all products have similar economic characteristics and product selling is centralized, the Group reports information as referring to one segment. Thus, the information of the operating segment is the same as that presented in the accompanying financial statements. That is, the revenue by sub segment and operating results for the years ended December 31, 2019 and 2018 are shown in the accompanying consolidated income statements, and the assets by segment as of December 31, 2019 and 2018 are shown in the accompanying consolidated balance sheets.

  • a. Segment revenues and results

The following was an analysis of the Group’s operating revenue and results by reportable segment.

IC design

Income from lease of property, plant, and equipment
Other income

 Segment Revenue Segment Revenue
For the Year Ended December 31


2019
$ 5,111,744

265,330

136,256

$ 5,512,330
 2018
$ 5,663,059

199,184

215,490
$ 6,077,733
  • b. Geographical information

The Group operates in two principal geographical areas - the Asia and Taiwan.

The Group’s revenue from external customers by location of operations and information about its non-current assets by location of assets is detailed below.


Asia

Taiwan
Others

 Revenue from External Customers
For the Year Ended
December 31
2019
2018

$ 3,499,818
$ 4,067,191

1,956,236
1,908,470

56,276

102,072

$ 5,512,330
$ 6,077,733
 Revenue from External Customers
For the Year Ended
December 31
2019
2018

$ 3,499,818
$ 4,067,191

1,956,236
1,908,470

56,276

102,072

$ 5,512,330
$ 6,077,733
 Non-current Assets Non-current Assets
For the Year Ended
December 31


2019
$ 3,499,818

1,956,236
56,276

$ 5,512,330


2019
$ 2,159,216

1,294,531
-

$ 3,453,747
 2018
$ 2,192,346

1,077,848
-
$ 3,270,194

Non-current assets exclude non-current assets held for sale, financial instruments, deferred tax assets, post-employment benefits assets, and assets result from insurance contracts.

  • c. Information about major customers

Single customers contributing 10% or more to the Group’s revenue were as follows:

Customer A

Customer B
Customer C		 For the Year Ended December 31
2019
2018
$ 844,237 $ 763,906
651,715
652,318
Note
622,701

Note: The amount of revenue does not reach 10% of the company’s net revenue.

TABLE 1

SUNPLUS TECHNOLOGY COMPANY LIMITED AND SUBSIDIARIES

FINANCINGS PROVIDED

FOR THE YEAR ENDED DECEMBER 31, 2019

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

No. Lender Borrower Financial Statement
Account		 Related
Party		 Highest Balance for
the Period
Ending Balance		 Actual Borrowing
Amount		 Interest Rate Nature of
Financing		 Business
Transaction
Amounts		 Reasons for
Short-term
Financing		 Allowance for Bad
Debt		 **Collateral ** **Collateral ** Financing Limit
for Each
**Borrower **		 Aggregate
Financing Limit
Item Value
2
2
3
4
5
5		 Sunplus Technology (Shanghai)
Co., Ltd.
Sunplus Technology (Shanghai)
Co., Ltd.
Russell Holdings Ltd.
Sunplus Venture Capital Co.,
Ltd.
Sunplus Prof-tek Technology
(Shenzhen)
Lin Shih Investment Co., Ltd.
Sun Media Technology
Co., Ltd.

Sunplus APP
Technology
Sun Media Technology
Co., Ltd.
Sun Media Technology
Co., Ltd.
Sunplus APP
Technology
Sun Media Technology
Co., Ltd.		 Receivables from
related parties
Receivables from
related parties
Receivables from
related parties
Receivables from
related parties
Receivables from
related parties
Receivables from
related parties		 Yes
Yes
Yes
Yes
Yes
Yes		 $ 91,300
25,108
335,477
293,926
41,086
135,170		 $ -
12,522
261,077
232,426
39,354
121,645		 $ -
12,522
261,077

232,426
39,354
121,164		 1.8%
1.8%
2.05%
2.05%
1.8%
2.05%		 Note 1
Note 1
Note 1
Note 1
Note 1
Note 1		 $ -
-
-
-
-
-		 Note 2
Note 3
Note 4
Note 5
Note 6
Note 7		 $ -
12,522
-
-
39,354
-		 -
-
-
-
-
-		 $ -
-
-
-
-
-		 $ 256,983
(Note 8 )
21,415
(Note 9 )
455,427
(Note 10 )
419,740
(Note 11 )
37,851
(Note 12 )
317,228
(Note 13 )		 $ 256,983
(Note 8 )
42,830
(Note 9 )
455,427
(Note 10 )
419,740
(Note 11 )
75.703
(Note 12 )
317,228
(Note 13 )

Note 1: Short-term financing.

Note 2: Sunplus Technology (Shanghai) Co., Ltd. provided funds for the operating needs of Sun Media Technology Co., Ltd.

Note 3: Sunplus Technology (Shanghai) Co., Ltd. provided funds for the operating needs of Sunplus APP Technology.

  • Note 4: Russell Holdings Ltd. provided funds for the operating needs of Sun Media Technology Co., Ltd.

  • Note 5: Sunplus Venture Capital provided funds for the operating needs of Sun Media Technology Co., Ltd.

  • Note 6: Sunplus Prof-tek Technology (Shenzhen) provided funds for the operating needs of Sunplus APP Technology.

  • Note 7: Lin Shih Investment Co., Ltd. Provided funds for the operating needs of Sun Media Technology Co., Ltd.

  • Note 8: The foreign company has voting shares that are directly and indirectly wholly owned by the Company’s parent company. The total amount of all guarantees issued and the individual amount of each guarantee should not exceed 60% of Sunplus Technology (Shanghai) Co., Ltd.’s net equity as of its latest financial statements; in addition, each guarantee period should not exceed two years.

Note 9: The aggregate amount of all guarantees issued should not exceed 10% of the net equity of Sunplus Technology (Shanghai) Co., Ltd. (“Sunplus Shanghai”), and the individual amount of each guarantee should not exceed 5% of Sunplus Shanghai’s net equity, with net equity based on its latest financial statements.

Note 10: The foreign company has voting shares that are directly and indirectly wholly owned by the Company’s parent company. The total amount of all guarantees issued and the individual amount of each guarantee should not exceed 80% of Russell Holdings Ltd.’s net equity as of its latest financial statements; in addition, each guarantee period should not exceed two years.

Note 11: The total amount of all guarantees issued and the individual amount of each guarantee should not exceed 40% of Sunplus Venture Capital Co., Ltd.’s net equity as of its latest financial statements.

Note 12: The total amount of all guarantees issued and the individual amount of each guarantee should not exceed 10% of the net equity of Sunplus Prof-tek Technology (Shenzhen); and the individual amount of each guarantee should not exceed 5% of Sunplus Shanghai’s net equity.

Note 13: The total amount of all guarantees issued and the individual amount of each guarantee should not exceed 40% of Lin Shih Investment Co., Ltd.’s net equity as of its latest financial statements.

TABLE 2

SUNPLUS TECHNOLOGY COMPANY LIMITED AND SUBSIDIARIES

ENDORSEMENTS/GUARANTEES PROVIDED FOR THE YEAR ENDED DECEMBER 31, 2019 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

No. Endorser/
Guarantor		 Endorsee/Guarantee Limits on
Endorsement/
Guarantee Given
on Behalf of
Each Party
Maximum
Balance for the
Period		 Ending Balance Actual
Borrowing
Amount		 Value of
Collateral
(Property, Plant,
or Equipment)
Percentage of
Accumulated
Amount of
Collateral to
Net Equity as of
the Latest
Financial
Statements
Maximum
Collateral/Guara
ntee Amounts
Allowable		 Provided by the
Company
Guarantee
Provided by
the Subsidiary		 Guarantee
Provided to
a Subsidiary
Located in
Mainland
China
Name Nature of
Relationship
0
(Note 1)
1
(Note 2)		 Sunplus Technology
Company Limited
(“Sunplus”)
Russell Holdings Ltd.		 Sun Media Technology Co., Ltd.
Sunext Technology Co., Ltd.
Sun Media Technology Co., Ltd.		 3 (Note 4)
2 (Note 3)
3 (Note 4)		 $ 817,853
(Note 5)
817,853
(Note 5)
341,570
(Note 7)		 $ 428,573
10,000
279,585		 $ 169,365
-
122,860		 $ 107,625
-
122,860		 $ -
-
122,860		 2.07
-
21.58		 $ 1,635,707
(Note 6)
1,635,707
(Note 6)
341,570
(Note 7)		 Yes
Yes
No		 No
No
No		 Yes
No
Yes

Note 1: Issuer.

Note 2: Investee.

Note 3: The endorser directly holds more than 50% of the ordinary shares of the endorsee.

Note 4: Sunplus and its subsidiaries jointly hold more than 50% of the ordinary shares of the endorsee.

Note 5: For each transaction entity, the guarantee amount should not exceed 10% of the endorsement/guarantee provider’s net equity based on the provider’s latest financial statements.

Note 6: The guarantee amount should not exceed 20% of the endorsement/guarantee provider’s net equity based on the provider’s latest financial statements.

  • Note 7: Russell Holdings Ltd. and the endorsement guaranty object are the parent company which holds 100% voting rights directly or indirectly. For each transaction entity, the guarantee amount should not exceed 60% of the endorsement/guarantee provider’s net equity, i.e., Russell Holdings Ltd. provider’s latest financial statements.

TABLE 3

SUNPLUS TECHNOLOGY COMPANY LIMITED AND SUBSIDIARIES

MARKETABLE SECURITIES HELD FOR THE YEAR ENDED DECEMBER 31, 2019

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise, U.S. Dollars and Renminbi in Thousands)

Holding Company Name Type and Name of Marketable Security Relationship with the Holding
Company		 Financial Statement Account December 31, 2019 December 31, 2019 Note
Shares or Units
(In Thousands)		 Carrying Amount Percentage of
Ownership (%)		 Market Value or
Net Asset Value
Sunplus Technology Company Limited
(the “Company”)		 Nomura Taiwan Money Market Fund
Mega RMB Money Market Fund
FSITC RMB Money Market Fund TWD
FSITC US Top 100 bond fund A
Taishin 1699 Money Market Fund
Mega Diamond Money Market Fund
UPAMC James Bond Money Market Fund
Yuanta USD Money Market Fund USD
PineBridge Muliti - Income Fund
Prudential Financial RMB Money Market Fund
TWD
Yuanta RMB Money Market TWD
Harvest Series 1 Fund
Yuanta Emerging Indonesia and India 4 years
Bond Fund
Broadcom Inc.
Triknight Capital Corporation
EVERGREEN STEEL Co., Ltd.
Network Capital Global		 -
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-		 Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through other
comprehensive income - non-current		 616
466
5,387
2,000
2,216
13,197
1,851
239
95
5,810
1,702
2
1,500
-
29,625
1,500

380		 $ 10,096
24,146
52,658
20,100
30,100
166,162
31,058
75,886
30,516
57,349
17,918
59,960
15,159
815
285,289
52,500
2,586		 -
-
-
-
-
-
-
-
-
-
-
-
-
-
5
-
7		 $ 10,096
24,146
52,658
20,100
30,100
166,162
31,058
75,886
30,516
57,349
17,918
59,960
15,159
815
285,289
52,500
2,586		 Note 3
Note 3
Note 3
Note 3
Note 3
Note 3
Note 3
Note 3
Note 3
Note 3
Note 3
Note 3
Note 3
Note 2
Note 1
Note 1
Note 1
(Continued)
Holding Company Name Type and Name of Marketable Security Relationship with the Holding
Company		 Financial Statement Account December 31, 2019 December 31, 2019 Note
Shares or Units
(In Thousands)		 Carrying Amount Percentage of
Ownership (%)		 Market Value or
Net Asset Value
Lin Shih Investment Co., Ltd.
Russell Holdings Limited		 UPI Semiconductor Corp.
A-Spine Asia Co., Ltd.
Taiwan Mask Corp.
Enterex International Limited - CB
Kee Song Bio - Technology Holdings Limited
Everlight Electronics Co., Ltd. - CB
Genius Vision Digital Co., Ltd.
Ortery Technologies, Inc.
Chain Sea Information Integration Co., Ltd.
AIII Co., Ltd.
GEMFOR Leading Financial Solution Provider
fund
Sanjet Technology Corporation
Minton Optic Industry Co., Ltd.
Lead Sun Corporation
Ability Enterprise Co., Ltd.
Sunplus Technology Co., Ltd.
Prine Rich International Co., Ltd.
Synerchip Inc.
OZ Optics Limited
Innobrige International Inc.		 -
~~-~~
~~-~~
-
-
-
-
-
-
-
-
-
-
-
-
Parent company
-
-
-
-		 Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss – non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss – non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through other
comprehensive income - non-current
Financial assets at fair value through other
comprehensive income - non-current
Financial assets at fair value through other
comprehensive income - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current		 300
220
101
30
50
80
300
103
43
26
13
8
4,272
-

5,434

3,560

33
6,452
1,000
4,000		 $ 18,420
19,620
3,479
2,700
4,423
8,000
-
-
474
431
216
-
-
27,934
90,472
48,238
4,600
-
-
-		 -
-
-
-
-
-
4
1
-
-
-
-
7
12
2
1
-
12
8
15		 $ 18,420
19,620
3,479
2,700
4,423
8,000
-
-
474
431
216
-
-
27,934
90,472
48,238
4,600
-
-
-		 Note 1
Note 1
Note 2
Note 2
Note 2
Note 2
Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 2
Note 2
Note 1
Note 1
Note 1
Note 1
(Continued)
Holding Company Name Type and Name of Marketable Security Relationship with the Holding
Company		 Financial Statement Account December 31, 2019 December 31, 2019 Note
Shares or Units
(In Thousands)		 Carrying Amount Percentage of
Ownership (%)		 Market Value or
Net Asset Value
Russell Holdings Limited
Sunplus Venture Capital Co., Ltd.		 Ether Precision Inc.
Asia Tech Taiwan Venture, L.P.
Asia B2B on Line Inc.
AMED Ventures I, L.P.
Intudo Ventures II, L.P.
GeneOne Diagnostics Corporation
Taiwan Mask Corp.
Charles Schwab - Money Fund
Cyberon Corporation
Grand Fortune Venture Capital Co., Ltd.
Ortery Technologies, Inc.
Funyou Venture Capital Limited Partnersh
Book4u Company Limited
Sanjet Technology Corp.
Simple Act Inc.
Minton Optic Industry Co., Ltd.
Raynergy Tek Inc.
Genius Vision Digital
CDIB Capital Growth Partners L.P.
VenGlobal International Fund
TIEF Fund LP
San Neng Group Holding Co., Ltd.		 -
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-		 Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through other
comprehensive income - non-current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current		 1,250
-
1,000
-
-

1,710
108
-
786
5,000
68
-
9
49
1,900
5,000
4,500
375
-
1
-
900		 $ -
-
-
5,563
24,411
20,386
3,721
2,032
27,530
54,950
-
19,877
-
-
-
-
81,630
-
54,379
-
40,721
32,940		 1
5
3
3
6
13
-
-
8
7
1
10
-
-
10
8
16
5
2
-
7
1		 $ -
-
-
5,563
24,411
20,386
3,721
2,032
27,530
54,950
-
19,877
-
-
-
-
81,630
-
54,379
-
40,721
32,940		 Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 2
Note 2
Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 2

(Continued)

Holding Company Name Type and Name of Marketable Security Relationship with the Holding
Company		 Financial Statement Account December 31, 2019 December 31, 2019 Note
Shares or Units
(In Thousands)		 Carrying Amount Percentage of
Ownership (%)		 Market Value or
Net Asset Value
Sunplus Venture Capital Co., Ltd.
Wei-Young Investment Inc.
Sunplus Technology (Shanghai) Co., Ltd.
Generalplus Technology Inc.
Sunplus Innovation Technology Inc.		 Huijia Health Life Technology
Intudo Ventures I, L.P.
eWave System, Inc.
Feature Integration Technology Inc.
Qun-Kin Venture Capital
Protect Life International Biomedical Inc.
Shiny Brands Group Co., Ltd.
Cheng Mei Materials Technology Corporation
Chipbond Technology Corporation
GF Every Day The Red Haired Type Money
Market Fund B
GF Live Treasury Currency B
Chongqing CYIT Communication Technology
Co., Ltd.
Ready Sun Investment Group Fund
Xiamen Xm-plus Technology Ltd.
Franklin Templeton SinoAm Money Market
Fund
Mega Diamond Money Market Fund
Yuanta Wan Tai Money Market Fund
Fuh Hwa You Li Money Market Fund
Yuanta De-Li Money Market Fund
Taishin 1699 Money Market Fund
Advanced Silicon SA		 -
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-		 Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through other
comprehensive income - non-current
Financial assets at fair value through other
comprehensive income - non-current
Financial assets at fair value through other
comprehensive income - non-current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through other
comprehensive income - non-current		 1,000
-
1,833

1,247

3,000

1,364
105
2,000
300
13,100
13,550
-
-
-
7,869
810
3,963
2,235
4,333
2,212

1,000		 $ 30,000
45,630
-
18,680
24,000
5,110
7,864
14,600
20,160
56,579
58,493
-
41,625
11,520
81,669
10,199
60,241
30,226
70,939
30,042
22,705		 6
8
22
4
6
4
-
-
-
-
-
3
16
3
-
-
-
-
-
-
10		 $ 30,000
45,630
-
18,680
24,000
5,110
7,864
14,600
20,160
56,579
58,493
-
41,625
11,520
81,669
10,199
60,241
30,226
70,939
30,042
22,705		 Note 1
Note 1
Note 1
Note 2
Note 1
Note 1
Note 2
Note 2
Note 2
Note 3
Note 3
Note 1
Note 1
Note 1
Note 3
Note 3
Note 3
Note 3
Note 3
Note 3
Note 1
(Continued)
Holding Company Name Type and Name of Marketable Security Relationship with the Holding
Company		 Financial Statement Account December 31, 2019 December 31, 2019 Note
Shares or Units
(In Thousands)		 Carrying Amount Percentage of
Ownership (%)		 Market Value or
Net Asset Value
Sunplus Innovation Technology Inc.
Magic Sky Limited
Giant Rock Inc.
Sunext Technology Co., Ltd.
Jsilicon Technology Co., Ltd.		 Advanced NuMicro System, Inc.
Point Grab Ltd.
GTA Co., Ltd. - CB
Xiamen Xm-plus Technology Ltd.
Yunata Taiwan Dividend + ETF Feeder Fund
Yunata Taiwan Top 50 ETF Feeder Fund
EVERGREEN STEEL Co.,Ltd.
GF Live Treasure Currency B		 -
-
-
-
-
-		 Financial assets at fair value through other
comprehensive income - non-current
Financial assets at fair value through other
comprehensive income - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
2,000

182
-
-
2,843
467
1,000
7,888		 $ 848
-
32,079
46,813
31,609
5,715
35,000
33,959		 8
1
-
15
-
-
-
-		 $ 848
-
32,079
46,813
31,609
5,715
35,000
33,959		 Note 1
Note 1
Note 1
Note 1
Note 3
Note 3
Note 1
Note 3

Note 1: The market value was based on the carrying amount as of December 31, 2019.

Note 2: The market value was based on the closing price as of December 31, 2019.

Note 3: The market value was based on the net asset value of the fund as of December 31, 2019.

(Concluded)

TABLE 4

SUNPLUS TECHNOLOGY COMPANY LIMITED AND SUBSIDIARIES

MARKETABLE SECURITIES ACQUIRED OR DISPOSED OF AT COSTS OR PRICES OF AT LEAST NT$300 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2019

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Company Name Type and Name of
Marketable
Securities		 Financial Statement
Account		 Counterparty Relationship Beginning Balance Beginning Balance Acquisition(Note 1) Acquisition(Note 1) Disposal(Note 1) Disposal(Note 1) Ending Balance(Note 3) Ending Balance(Note 3)
Number of
Shares		 Amount Number of
Shares		 Amount Number of
Shares		 Amount Carrying
Amount		 Gain (Loss) on
Disposal		 Shares Amount
Generalplus
Technology Inc.		 Franklin Templeton
SinoAm Money
Market Fund		 Financial assets at fair
value through profit or
loss - current		 - - 5,721 $ 59,048 29,017 $ 300,000 26,869 $ 278,000 $ 277,539 $ 461 7,869 $ 81,669

Note 1: The cumulative purchase and sale amount shall be calculated separately at the market price to determine whether it has reached NT$300 million or 20% of the paid-up capital.

Note 2: The paid-in capital refers to the paid-in capital of the parent company.

Note 3: The amount on the end of the period is the amount of unrealized profit or loss.

TABLE 5

SUNPLUS TECHNOLOGY COMPANY LIMITED AND SUBSIDIARIES

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 2019

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Company Name Counterparty Flow of
Transaction
(Note 5)		 Intercompany Transactions Intercompany Transactions
Financial Statement Account Item Amount Terms Percentage of Consolidated Total
Gross Sales or Total Assets
Sunplus Technology Co., Ltd.
(the “Company”)		 Generalplus Technology Inc. 1 Sales
Non-operating income and gains
Notes and trade receivables		 $ 2,562
145
407		 Note 1
Note 2
Note 1		 0.05%
-
-
Sunext Technology Co., Ltd. 1 Sales
Non-operating income and gains
Notes and trade receivables
Other receivables		 196
4,361
5
295		 Note 1
Notes 2
Note 1
Note 3		 -
0.08%
-
-
Sunplus Innovation Technology Inc. 1 Sales
Non-operating income and gains
Notes and trade receivables
Other receivables		 424
3,805
74
337		 Note 1
Note 2
Note 1
Note 3		 0.01%
0.07%
-
-
Sunplus mMedia Inc. 1 Non-operatingincome andgains 3,956 Notes 2 and 4 0.07%
Jumplux Technology Co., Ltd. 1 Sales
Non-operating income and gains
Notes and trade receivables
Other receivables		 4,508
14,291
111
1,091		 Note 1
Notes 2 and 4
Note 1
Note 3		 0.08%
0.26%
-
0.01%
Sunplus Innovation Technology Inc. Sun Media Technology Co., Ltd. 2 Accrued expenses
Marketingexpenses		 1,114
3,151		 Note 3
Note 2		 0.01%
0.06%
Sunplus Prof-tek (Shenzhen) Co., Ltd. 2 Accrued expenses
Marketingexpenses		 5,503
23,208		 Note 3
Note 1		 0.05%
0.42%
Generalplus Technology Inc. Sunplus Innovation TechnologyInc. 2 Sales 513 Note 1 0.01%
Generalplus Technology (Hong Kong) Inc. 2 Marketing expenses
Accrued expenses		 11,081
2,048		 Note 1
Note 3		 0.20%
0.02%
Generalplus Technology (Shenzhen) Inc. 2 Sales
Research and development expenses
Notes and trade receivables
Accrued expenses		 13,422
84,656
1,752
28,838		 Note 2
Note 2
Note 3
Note 3		 0.24%
1.54%
0.02%
0.25%
Sunplus Technology (Shanghai) Co., Ltd. SunMedia Technology Co., Ltd. 2 Accrued expenses
Interest income
Research and development expenses		 710
1,441
5,358		 Note 3
Note 1
Note 1		 0.01%
0.03%
0.10%
Sunplus AppTechnology 2 Interest income 251 Note 2 -
Sunplus Technology (Beijing) 2 Research and development expenses 150 Note 2 -
Jumplux Technology Co., Ltd. 2 Sales
Notes and trade receivables		 969
427		 Note 1
Note 1		 0.02%
-
(Continued)
Company Name Counterparty Flow of
Transaction
(Note 5)		 Intercompany Transactions Intercompany Transactions
Financial Statement Account Item Amount Terms Percentage of Consolidated Total
Gross Sales or Total Assets
Jumplux Technology Co., Ltd. Sunplus Technology (Beijing) 2 Research and development expenses $ 2,867 Note 2 0.05%
Jsilicon Technology 2 Sales 8,987 Note 1 0.16%
Notes and trade receivables 5,645 Note 1 0.05%
Lin Shih Investment Co., Ltd. Sun Media Technology Co., Ltd. 2 Interest income 992 Note 2 0.02%
Other receivables 117,008 Note 3 1.02%
Sunplus Venture Co., Ltd. Sun Media Technology Co., Ltd. 2 Interest income
Other receivables		 5,309
228,029		 Note 2
Note 3		 0.10%
1.98%
Russell Holdings Ltd. Sun Media Technology Co., Ltd. 2 Other receivables
Interest income		 255,277
5,412		 Note 3
Note 2		 2.22%
0.10%
Sunplus Technology (Beijing) 2 Management expenses
Sales		 38
585		 Note 2
Note 1		 -
0.01%
Sun Media Technology Co., Ltd. Sunplus Technology (Beijing) 2 Management expenses
Sales		 38
585		 Note 2
Note 1		 -
0.01%
Sunplus Prof-tek(Shenzhen)Co.,Ltd. Sunplus AppTechnology 2 Interest income 553 Note 2 0.01%
Sunplus Technology (Beijing) Jsilicon Technology 2 Sales 2,057 Note 1 0.04%
Notes and trade receivables 45 Note 1 -
Shuangxin Technology 2 Sales 3,663 Note 1 0.07%
Notes and trade receivables 1,421 Note 1 0.01%
Sunplus App Technology Sunplus Technology (Beijing) 2 Research and development expenses 10 Note 2 -

Note 1: The transactions were based on normal commercial prices and terms.

Note 2: The prices were based on negotiations, and the payment period and related terms were not comparable to market terms.

Note 3: The transaction payment terms were at normal commercial terms.

Note 4: Lease transaction terms were based on negotiations and, thus, were not comparable to market terms. The transactions between the Company and the counterparty were at normal terms.

Note 5: The directional flow of the transactions are indicated by the following numerals: 1 - From parent company to subsidiary.

2 - Between subsidiaries.

(Concluded)

TABLE 6

SUNPLUS TECHNOLOGY COMPANY LIMITED AND SUBSIDIARIES

NAMES, LOCATIONS, AND RELATED INFORMATION OF INVESTEES ON WHICH THE COMPANY EXERCISES SIGNIFICANT INFLUENCES DECEMBER 31, 2019

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investor Investee Location Main Businesses and Products Investment Amount Investment Amount Balance as of December 31, 2019 Balance as of December 31, 2019 Balance as of December 31, 2019 Net Income
(Loss) of the
Investee		 Investment
Gain (Loss)		 Note
December 31,
2019		 December 31,
2018		 Shares
(Thousands)		 Percentage of
Ownership (%)		 Carrying
Amount
Sunplus Technology Company Limited
Lin Shih Investment Co., Ltd.
Sunplus Venture Capital Co., Ltd.
Russell Holdings Limited
Ventureplus Group Inc.		 Ventureplus Group Inc.
Award Glory Ltd.
GLOBAL VIEW CO., LTD.
Lin Shih Investment Co., Ltd.
Generalplus Technology Inc.
Sunplus Venture Capital Co., Ltd.
Sunplus Innovation Technology Inc.
Russell Holdings Limited
iCatch Technology, Inc.
Sunext Technology Co., Ltd.
Sunplus mMedia Inc.
Sunplus Management Consulting Inc.
Sunplus Technology (H.K.) Co., Ltd.
Magic Sky Limited
Sunplus mMobile Inc.
Wei-Young Investment Inc.
Jumplux Technology Co., Ltd.
Generalplus Technology Inc.
Sunplus Innovation Technology Inc.
iCatch Technology, Inc.
Sunplus mMedia Inc.
Jumplux Technology Co., Ltd.
Sunplus Innovation Technology Inc.
iCatch Technology, Inc.
Sunplus mMedia Inc.
Han Young Technology Co., Ltd.
Autosys Co., Ltd.
Ventureplus Mauritius Inc.		 Belize
Belize
Hsinchu, Taiwan
Hsinchu, Taiwan
Hsinchu, Taiwan
Hsinchu, Taiwan
Hsinchu, Taiwan
Cayman Islands, British West Indies
Hsinchu, Taiwan
Hsinchu, Taiwan
Hsinchu, Taiwan
Hsinchu, Taiwan
Kowloon Bay, Hong Kong
Samoa
Hsinchu, Taiwan
Hsinchu, Taiwan
Hsinchu, Taiwan
Hsinchu, Taiwan
Hsinchu, Taiwan
Hsinchu, Taiwan
Hsinchu, Taiwan
Hsinchu, Taiwan
Hsinchu, Taiwan
Hsinchu, Taiwan
Hsinchu, Taiwan
Taipei, Taiwan
Cayman Islands, British west Indies
Mauritius		 Investment
Investment
Consumer electronics, components and rental
of buildings
Investment
Design of ICs
Investment
Design of ICs
Investment
Design of ICs
Design of ICs
Design of ICs
Management
International trade
Investment
Design of ICs
Investment
Design of ICs
Design of ICs
Design of ICs
Design of ICs
Design of ICs
Design of ICs
Design of ICs
Design of ICs
Design of ICs
Design of ICs
Investment
Investment		 $ 2,399,817
( US$ 74,605
RMB
37,900 )
226,834
( US$ 5,642
RMB
13,400 )

315,658
699,988
281,001
999,982
414,663
739,307
( US$ 24,660 )
207,345
983,237
407,565
5,000
42,628
( HK$ 11,075 )
304,597
( US$ 10,160 )
2,596,792
70,157
132,000
86,256
15,701
9,645
19,408
101,000
57,388
33,439
44,878
-
74,950
( US$ 2,500 )
2,399,817
( US$ 74,605
RMB
37,900 )		 $ 2,399,817
( US$ 74,605
RMB
37,900 )
61,219
( US$ 2,042 )

315,658

699,988

281,001

999,982

414,663
721,319
( US$ 24,060 )

207,345

981,053

407,565

5,000
42,628
( HK$ 11,075 )
302,049
( US$ 10,075 )

2,596,792

70,157

132,000

86,256

15,701

9,645

19,408

101,000

57,388

33,439

44,878

4,200
74,950
( US$ 2,500 )
2,399,817
( US$ 74,605
RMB
37,900 )		 -
-

8,229

70,000

37,324

100,000

31,450
24,660

20,735

58,778

22,441

500
11,075
-

16,240

5,400

13,200

14,892

1,075

965

650

10,100

2,904

3,332

1,909

-
-
-		 100
100
13
100
34
100
61
100
29
93
90
100
100
100
100
100
55
14
2
1
3
42
6
5
8
-
16
100		 $ 1,373,861
160,186
297,640
744,832
681,743
1,049,350
573,897
569,284
263,237
194,234
23,627
3,768
35
32,282
29,576
49,602
2,785
273,385
17,399
12,784
5,348
2,130
53,990
44,159
457
-
77,208
1,373,859		 $ 21,479

8,497

85,934

43,053

223,584

43,973

135,651

5,887

(79,931 )

19,076

(25,068 )

(142 )

(3 )

(53,190 )

(209 )

(5,239 )

(26,527 )

223,584

135,651

(79,931 )

(25,068 )

(26,527 )

135,651

(79,931 )

(25,068 )

-

(1,845 )

21,496		 $ 21,479

8,497

11,165

41,771

76,690

43,973

82,919

5,887

(27,997 )

17,497

(22,501 )

(142 )

(3 )

(53,190 )

(209 )

(5,239 )

(14,590 )

30,599

2,834

(1,094 )

(652 )

(11,163 )

7,655

(3,779 )

(1,914 )

-

(1,793 )

21,496		 Subsidiary
Subsidiary
Investee
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Investee
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Investee
Investee
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
(Note 2)
Investee
Subsidiary
Ventureplus Mauritius Inc.
Generalplus Technology Inc.
Generalplus International (Samoa) Inc.		 Ventureplus Cayman Inc.
Generalplus International (Samoa) Inc.
Generalplus (Mauritius) Inc.		 Cayman Islands, British West Indies
Samoa
Mauritius		 Investment
Investment
Investment		 2,399,817
( US$ 74,605
RMB
37,900 )
572,318
( US$ 19,090 )
572,318
( US$ 19,090 )		 2,399,817
( US$ 74,605
RMB
37,900 )
572,318
( US$ 19,090 )
572,318
( US$ 19,090 )		 -
19,090
19,090		 100
100
100		 1,373,837
475,396
475,394
21,497

13,484

13,484
21,497

13,484

13,484		 Subsidiary
Subsidiary
Subsidiary
(Continued)
Investor Investee Location Main Businesses and Products Investment Amount Investment Amount Balance as of December 31, 2019 Balance as of December 31, 2019 Balance as of December 31, 2019 Net Income
(Loss) of the
Investee		 Investment
Gain (Loss)		 Note
December 31,
2019		 December 31,
2018		 Shares
(Thousands)		 Percentage of
Ownership (%)		 Carrying
Amount
Generalplus (Mauritius) Inc.
Award Glory Ltd.
Sunny Fancy Ltd.		 Generalplus Technology (Hong Kong) Inc.
Sunny Fancy Ltd.
Giant Kingdom Ltd.
Giant Rock Inc.
WORLDPLUS HOLDINGS L.L.C.		 Hong Kong
Seychelles
Seychelles
Anguilla
America		 Sales
Investment
Investment
Investment
Investment		 $ 11,692
(US$ 390 )
226,834
(US$ 5,642
RMB
13,400 )
23,145
(US$ 772 )
95,762
(US$ 1,270
RMB
13,400 )
107,928
(US$ 3,600 )		 $ 11,692
(US$ 390 )
61,212
(US$ 2,042 )
23,145
(US$ 772 )
38,075
(US$ 1,270 )
-		 -
-
-
-

-		 100
100
100
100
100		 $ 4,691
160,186
558
50,758
108,870		 $ (456 )

8,497

(240 )

11,319

(2,138 )		 $ (456 )

8,497

(240 )

11,319

(2,582 )		 Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary

Note 1: The initial exchange rate was based on the exchange rate as of December 31, 2018.

Note 2: Han Young Technology Co., Ltd. was liquidated in November 2019.

(Concluded)

TABLE 7

SUNPLUS TECHNOLOGY COMPANY LIMITED AND SUBSIDIARIES

INFORMATION ON INVESTMENTS IN MAINLAND CHINA FOR THE YEAR ENDED DECEMBER 31, 2019 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investee Company Name Main Businesses and Products Main Businesses and Products Total Amount of
Paid-in Capital		 Investment Type Accumulated
Outflow of
Investment from
Taiwan as of
January 1, 2019		 Investment Flows Investment Flows Investment Flows Accumulated
Outflow of
Investment from
Taiwan as of
December 31,
2019		 % Ownership of
Direct or Indirect
Investment
Net Income
(Loss) of the
investee		 Investment Loss Carrying
Amount as of
December 31,
2019		 Accumulated
Inward
Remittance of
Earnings as of
December 31,
2019
Outflow Inflow
Sunplus Technology
(Shanghai) Co., Ltd.
Sunplus Prof-tek (Shenzhen)
Co., Ltd.
Sun Media Technology Co.,
Ltd.
Sunplus App Technology Co.,
Ltd.
Ytrip Technology Co., Ltd.
Sunplus Technology (Beijing)
1culture Communication Co.,
Ltd.
JSilicon Technology Co., Ltd.
(Ru Domg)
Lingyao Technology Co., Ltd.
(Shenzhen)
Shuangxin Technology Co.,
Ltd. (Chongqing)		 Development of computer software, system
integration services and building rental services
Development of computer software, system
integration services, building rental services and
property management
Development of computer software, system
integration services and building rental services
Manufacturing and sale of computer software, system
integration services and information management
and education
Computer system integration services, supply of
general advertising and other information services
Development of computer software, system
integration services and building rental services
System development
Development of computer software, system
integration services
Development of computer software, system
integration services and building rental
Development of computer software, system
integration services		 $ 515,656
(US$ 17,200)
966,855
(US$ 32,250)
599,600
(US$ 20,000)
111,930
(RMB
26,000)
263,681
(RMB
61,250)
116,235
(RMB
27,000)
13,991
(RMB
3,250)
43,050
(RMB
10,000)
81,963
(RMB
19,039)
8,610
(RMB
2,000)		 Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 3
Note 4
Note 6
Note 5		 $ 529,297
(US$ 17,655)
966,855
(US$ 32,250)
599,600
(US$ 20,000)
60,618
(US$ 586
RMB
10,000)
135,240
(US$ 4,511)
116,235
(RMB
27,000)
-
-
-
-		 $ -
-
-
47,355
(RMB
11,000)
-
-

-

-
107,928
(US$ 3,600)

-		 $ -

-

-
-

-

-

-

-
-

-		 $ 529,297
(US$ 17,655)

966,855
(US$ 32,250)

599,600
(US$ 20,000)

107,973
(US$ 586
RMB
21,000)

135,240
(US$ 4,511)

116,235
(RMB
27,000)


-

107,928
(US$ 3,600)

-		 100
100
100
96
91
100
100
100
100
100		 $ 13,082

(29,577)

31,538

(10,628)

(2,566)

3,096

(29)

(15,033)

(2,138)

(10,973)		 $ 13,082

(29,577)

31,538

(10,290)

(2,327)

3,096

(29)

(15,033)

(2,582)

(10,973)		 $ 428,305

757,026

131,080

4,071

1,861

49,237

65

28,209

108,870

75,218		 $ -

-

-

-

-

-

-

-

-

-
Accumulated Investment in Mainland China as of
December 31, 2019		 Investment Amounts Authorized by Investment Commission, MOEA Limit on Investment
$ 2,597,759
( US$ 79,872 and
RMB
49,900 )		 $ 2,623,398
( US$ 78,602 and
RMB
62,000 )		 $ 4,907,120
Sunplus Venture Capital Co., Ltd.
Accumulated Investment in Mainland China as of
December 31, 2019 (Note 7)		 Investment Amounts Authorized by Investment Commission, MOEA Limit on Investment
$ 37,775
( US$ 1,260 )		 $ 37,775
( US$ 1,260 )		 $ 629,610

(Continued)

Generalplus Technology Inc. (Nature of Relationship: 1)

Investee
Company Name		 Main Businesses and Products Main Businesses and Products Total Amount of
Paid-in Capital		 Investment Type
(e.g., Direct or
Indirect)		 Accumulated
Outflow of
Investment from
Taiwan as of
January 1, 2019		 Investment Flows Investment Flows Investment Flows Accumulated
Outflow of
Investment from
Taiwan as of
December 31,
2019		 % Ownership of
Direct or Indirect
Investment
Net Loss of the
investee		 Investment Loss
(Note 2)		 Carrying
Amount as of
December 31,
2019		 Accumulated
Inward
Remittance of
Earnings as of
December 31,
2019
Outflow Inflow
Generalplus Shenzhen IC product development, after sales service and market
research
$ 560,626
(US$ 18,700)		 Note 1 $ 560,626
(US$ 18,700)		 $ - $ - $ 560,626
(US$ 18,700)		 100% $ 13,940 $ 13,940 $ 471,173 $ -
Accumulated Investment in Mainland China as of
December 31, 2019		 Investment Amount Authorized by Investment Commission, MOEA Limit on Investment
$ 560,626
( US$ 18,700 )		 $ 560,626
( US$ 18,700 )		 $ 1,210,358

Note 1: Indirect investment in a company located in mainland China through investment in a company located in a third country.

Note 2: Based on the investee’s reviewed financial statements for the same period.

Note 3: Ytrip Technology Co., Ltd. indirectly invested in a company located in mainland China.

Note 4: Sunplus Technology (Shanghai) Co., Ltd.’s indirect investment in a company located in mainland China.

Note 5: Sunplus Technology (Shanghai) Co., Ltd. and Sunplus Prof-tek (Shenzhen) Co., Ltd.’s indirect investments in a company located in mainland China.

Note 6: It is a company located in mainland China that acquired the investment of the third regional investment company on September 2, 2019.

Note 7: The Ministry of Economic Affairs approved an investment in the shares of San Neng Group Holding Co., Ltd., which is accounted for under the financial assets at fair value through profit or loss- non-current.

Note 8: The original foreign currency was derived from the exchange rate on December 31, 2019.

(Concluded)

TABLE 8

SUNPLUS TECHNOLOGY COMPANY LIMITED AND SUBSIDIARIES

SIGNIFICANT TRANSACTIONS WITH INVESTEE COMPANIES IN MAINLAND CHINA, EITHER DIRECTLY OR INDIRECTLY THROUGH A THIRD PARTY, AND THEIR PRICES, PAYMENT TERMS, AND UNREALIZED GAINS OR LOSSES FOR THE YEAR ENDED DECEMBER 31, 2019

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investee Company Transaction Type Research and Development
Expense		 Research and Development
Expense		 Price Transaction Details Transaction Details Other Payable To Related
Parties		 Other Payable To Related
Parties		 Unrealized
(Gain) Loss		 Note
Amount % Payment Term Comparison with Market
Transactions		 Ending Balance %
Generalplus Technology (Shenzhen)
Corp.		 Development and
processing services
Sales		 $ 84,656
13,422		 18.06
0.51		 Based on contract
Based on contract		 Based on contract
Based on contract		 Not comparable with market
transactions
Not comparable with market
transactions		 $ 28,838
1,752		 93.05
100		 $ -
490		 NA
NA

7.5 The Company's individual financial report for the past year has been audited by the accountant Sunplus Technology Company Limited

Financial Statements for the Years Ended December 31, 2019 and 2018 and Independent Auditors’ Report

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders Sunplus Technology Company Limited

Opinion

We have audited the accompanying financial statements of Sunplus Technology Company Limited (the “Company”), which comprise the balance sheets as of December 31, 2019 and 2018, and the statements of comprehensive income, statements of changes in equity and statements of cash flows for the years then ended, and the notes to the financial statements, including a summary of significant accounting policies (collectively referred to as the “financial statements”).

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and its financial performance and its cash flows for the years then ended in accordance with 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 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, and we have fulfilled our other ethical responsibilities in accordance with these requirements. 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 the financial statements for the year ended December 31, 2019. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Validity of Specific Customer’s Revenue

Integrated circuit chip sales accounted for 93% of the Company’s total revenue. Operating income declined in 2019, but sales to some customers increased significantly. Therefore, we deem revenue recognition as a key audit matter. For detailed explanation of revenue, refer to Notes 4 and 21 to the accompanying consolidated financial statements.

  1. We understood the related internal control and operating procedures in the sales transaction cycle, and we evaluated and confirmed the operating effectiveness of the internal control and operating procedures.

  2. We selected samples from the sales details, and we examined customers’ original orders, sales electronic orders, delivery orders, logistics receipt documents or export declaration, and sales invoices for any abnormal situations and confirmed the validity of the revenue.

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

Management is responsible for the preparation and fair presentation of the financial statements in accordance with 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 financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, 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 Company’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ 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 the 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 financial statements.

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

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

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

  4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the 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 auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.

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

  6. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the 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 the financial statements for the year ended December 31, 2019 and are therefore the key audit matters. We describe these matters in our auditors’ 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.

The engagement partners on the audit resulting in this independent auditors’ report are Cheng-Chih Lin and Yu-Feng Huang.

Deloitte & Touche Taipei, Taiwan Republic of China

March 30, 2020

Notice to Readers

The accompanying financial statements are intended only to present the financial position, financial performance 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 financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and the financial statements shall prevail.

SUNPLUS TECHNOLOGY COMPANY LIMITED

BALANCE SHEETS DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars, Except Par Value)

ASSETS
CURRENT ASSETS
Cash and cash equivalents (Notes 4 and 6)

Financial assets at fair value through profit or loss - current (Notes 4 and 7)
Accounts receivable, net (Notes 4, 5, 9, 21 and 29)
Other receivables (Notes 4, 23 and 29)
Inventories (Notes 4 and 10)
Other current assets (Note 15)

Total current assets

NON-CURRENT ASSETS
Financial assets at fair value through profit or loss - non-current (Notes 4 and 7)
Financial assets at fair value through other comprehensive income - non-current (Notes 4 and 8)
Investments accounted for using the equity method (Notes 4, 11 and 29)
Property, plant and equipment (Notes 4, 5, 12 and 30)
Right-of-use assets (Notes 3, 4, 5 and 13)
Intangible assets (Notes 4, 5 and 14)
Deferred tax assets (Notes 4 and 23)
Net defined benefit assets - non-current (Notes 4 and 19)
Other financial assets (Notes 15 and 30)
Other non-current assets (Note 15)

Total non-current assets

TOTAL

LIABILITIES AND EQUITY
CURRENT LIABILITIES
Short-term bank borrowings (Note 16)

Contract liabilities - current (Note 21)
Account payable (Note 17)
Lease liabilities - current (Notes 3, 4, 5 and 13)
Current portion of long-term bank borrowings (Notes 16 and 30)
Other current liabilities (Note 18)

Total current liabilities

NON-CURRENT LIABILITIES
Lease liabilities - non-current (Notes 3, 4, 5 and 13)
Net defined benefit liabilities (Notes 4 and 19)
Guarantee deposits
Other non-current liabilities (Note 18)

Total non-current liabilities

Total liabilities

EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY
Share capital (Notes 4 and 20)
Ordinary shares

Capital surplus

Retained earnings
Legal reserve
Special reserve
(Deficits not yet compensated) Unappropriated earnings

Total retained earnings

Other equity

Treasury shares

Total equity

TOTAL
 2019
Amount
%
$ 321,084
4
515,989
6
141,845
2
7,209
-
273,764
3

32,425

-


1,292,316
15

413,723
5
2,586
-
6,049,939 69
688,706
8
179,559
2
86,258
1
2,485
-
1,163
-
6,100
-

7,936

-


7,438,455
85

$ 8,730,771
100

$ 53,964
-
3,373
-
62,566
1
4,007
-
-
-

189,019

2


312,929

3

177,424
2
-
-
58,687
1

3,198

-


239,309

3


552,238

6


5,919,949
68


594,432

7

1,942,388 22
308,452
4

(262,261)

(3)


1,988,579
23


(261,026)

(3)


(63,401)

(1)


8,178,533
94

$ 8,730,771
100
 2018




























































Amount
%
$ 780,555
9

661,494
7

171,387
2

14,226
-

256,907
3

24,851

-

1,909,420
21

266,154
3

4,337
-

5,981,209 67

687,187
8

-
-

86,495
1

2,485
-

-
-

6,100
-

8,000

-

7,041,967
79
$ 8,951,387
100
$ -
-

2,547
-

108,075
1

-
-

115,000
1

188,041

2

413,663

4

-
-

5,275
-

64,131
1

2,376

-

71,782

1

485,445

5

5,919,949
66

801,398

9

1,941,826 21

67,279
1

241,734

3

2,250,839
25

(442,843)

(5)

(63,401)

-

8,465,942
95
$ 8,951,387
100

The accompanying notes are an integral part of the financial statements.

SUNPLUS TECHNOLOGY COMPANY LIMITED

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

NET OPERATING REVENUE (Notes 4, 21 and 29)

OPERATING COSTS (Notes 10 and 22)

GROSS PROFIT

OPERATING EXPENSES (Notes 22 and 29)
Selling and marketing expenses
General and administrative expenses
Research and development expenses

Total operating expenses

LOSS FROM OPERATIONS

NON-OPERATING INCOME AND EXPENSES (Notes 4,
11, 22, 25 and 29)
Other income
Other gains and losses
Finance costs
Share of profit of associates and joint ventures

Total non-operating income and expenses

PROFIT BEFORE INCOME TAX
INCOME TAX EXPENSE (Notes 4 and 23)

NET PROFIT FOR THE YEAR

OTHER COMPREHENSIVE INCOME (LOSS)
Items that will not be reclassified subsequently to profit or
loss (Notes 4 and 19):
Remeasurement of defined benefit plans
Unrealized losses on investments in equity instruments
at fair value through other comprehensive income
Share of other comprehensive loss of subsidiaries and
associates accounted for using equity method		 2019
Amount
%
$ 1,235,269
100

735,366
60


499,903
40

46,290
4
179,275
14

543,782
44


769,347
62


(269,444)
(22)

61,933
5
48,381
4
(6,781)
-

186,007
15


289,540
24

20,096
2

4,787

1


15,309

1

4,309
-
(1,203)
-
(15,559)
(1)		 2018



























Amount
%
$ 1,238,780
100

809,472
66

429,308
34

31,670
3

176,445
14

460,807
37

668,922
54

(239,614)
(20)

52,856
4

152,227
12

(4,864)
-

47,155

4

247,374
20

7,760
-

2,144

-

5,616

-

3,443
-

(94,350)
(8)

(18,667)
(1)
(Continued)

SUNPLUS TECHNOLOGY COMPANY LIMITED

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Items that may be reclassified subsequently to profit or loss
(Notes 4 and 20):
Exchange differences on translating the financial
statements of foreign operations
Share of other comprehensive loss of subsidiaries and
associates accounted for using equity method

Other comprehensive loss for the year, net of income
tax

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

EARNINGS PER SHARE (Note 24)
Basic

Diluted
 2019
Amount
%
(13,842)
(1)

(66,063)

(5)


(92,358)

(7)

$ (77,049)

(6)

$ 0.03

$ 0.03
 2018









Amount
%

19,736
2

(36,511)

(3)

(126,349)
(10)
$ (120,733)
(10)
$ 0.01
$ 0.01

The accompanying notes are an integral part of the financial statements.

(Concluded)

SUNPLUS TECHNOLOGY COMPANY LIMITED

STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

BALANCE AT JANUARY 1, 2018
Appropriation of the 2017 earnings
Legal reserve
Special reserve
Cash dividends to shareholders
Changes in capital surplus from investments in associates and joint ventures accounted
for using the equity method
Issuance of share dividends from capital surplus
Difference between share price and carrying amount from disposal of subsidiaries
Changes of equity of subsidiaries
Net profit for the year ended December 31, 2018
Other comprehensive income (loss) for the year ended December 31, 2018, net of
income tax
Total comprehensive income (loss) for the year ended December 31, 2018
Adjustments to capital surplus due to the distribution of cash dividends to subsidiaries
Disposals of investments in equity instruments designated as at fair value through other
comprehensive income
BALANCE AT DECEMBER 31, 2018
Appropriation of the 2018 earnings
Legal reserve
Special reserve
Cash dividends to shareholders
Changes in capital surplus from investments in associates and joint ventures accounted
for using the equity method
Issuance of share dividends from capital surplus
Difference between share price and carrying amount from disposal of subsidiaries
Changes of equity of subsidiaries
Net profit for the year ended December 31, 2019		 Share Capital Issued an d Outstanding
Amount
$ 5,919,949

-
-
-
-
-
-
-
-

-


-

-

-

5,919,949
-
-
-
-
-
-
-
-		 Capital Surplus
$ 835,241
-
-
-
50,782
(86,846 )
(271 )
-
-

-

-
2,492

-
801,398
-
-
-
4,709
(213,118 )
162
-
-		 Retained Earnings Unappropriated
Earnings

(Deficits not yet
Compensated)
$ 707,497
(41,321 )
(44,284 )
(327,551 )
-
-
-
(22,606 )
5,616

1,453

7,069
-

(37,070)
241,734
(562 )
(241,173 )
-
-
-
-
(3,394 )
15,309		 Other Equity
Exchange
Differences on
Unrealized Losses
Translating the Financial
from Investments
Statements of
in Equity Instruments
Foreign Operations
Measured at FVTOCI
$ (122,100 )
$ (230,011 )

-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-

(16,775)

(111,027)


(16,775)

(111,027)

-
-

-

37,070

(138,875 )
(303,968 )
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-		 Treasury Shares
$ (63,401 )

-
-
-
-
-
-
-
-

-


-

-

-

(63,401 )
-
-
-
-
-
-
-
-		 Total Equity
$ 8,970,675
-
-
(327,551 )
50,782
(86,846 )
(271 )
(22,606 )
5,616

(126,349)

(120,733)
2,492

-
8,465,942
-
-
-
4,709
(213,118 )
162
(3,394 )
15,309
Exchange
Differences on
Translating the Financial
Statements of
in
Foreign Operations
M
$ (122,100 )

-
-
-
-
-
-
-
-

(16,775)


(16,775)

-

-

(138,875 )
-
-
-
-
-
-
-
-



Legal Reserve
$ 1,900,505

41,321
-
-
-
-
-
-
-

-


-

-

-

1,941,826
562
-
-
-
-
-
-
-		 Special Reserve
$ 22,995

-
44,284
-
-
-
-
-
-

-


-

-

-

67,279
-
241,173
-
-
-
-
-
-



Share
(Thousands)
591,995

-
-
-
-
-
-
-
-

-


-

-

-

591,995
-
-
-
-
-
-
-
-
Other comprehensive income (loss) for the year ended December 31, 2019, net of
income tax

Total comprehensive income (loss) for the year ended December 31, 2019

Adjustments to capital surplus due to the distribution of cash dividends to subsidiaries
Disposals of investments in equity instruments designated as at fair value through other
comprehensive income

BALANCE AT DECEMBER 31, 2019
-


-

-

-


591,995
-


-

-

-

$ 5,919,949
-


-

1,281

-

$ 594,432
-


-

-

-

$ 1,942,388
-


-

-

-

$ 308,452
5,339


20,648

-

(279,514)

$ (262,261)
(79,905)


(79,905)

-

-

$ (218,780)
(17,792)


(17,792)

-

279,514

$ (42,246)
-


-

-

-

$ (63,401)
(92,358)

(77,049)
1,281

-
$ 8,178,533

The accompanying notes are an integral part of the financial statements.

SUNPLUS TECHNOLOGY COMPANY LIMITED

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax

Adjustments for:
Depreciation expenses
Amortization expenses
Net gain on the fair value change of financial assets at fair value through
profit or loss
Financial costs
Interest income
Dividend income
Share of profit of subsidiaries, associates and joint ventures
Gain on disposal of subsidiaries
Realized gain on the transactions with subsidiaries
Net loss on foreign currency exchange
Changes in operating assets and liabilities:
Decrease in other receivables
Decrease in trade receivables
Decrease (increase) in inventories
Decrease (increase) in other current assets
Increase in net defined benefit assets - non-current
Increase (decrease) in contract liabilities
decrease in trade payables
Increase (decrease) in other current liabilities
Decrease in defined benefit liabilities

Cash used in operations
Interest received
Dividends received
Interest paid
Income tax paid

Net cash generated from operating activities

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from financial assets at FVTOCI
Purchase of financial assets at FVTPL
Proceeds from the sale of financial assets at FVTPL
Purchase of investments accounted for using the equity method
Payments for property, plant and equipment
Payments for intangible assets
Decrease in other assets - non-current
Decrease in refundable deposits

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES		 2019
$ 20,096

86,185
42,652
(17,428)
6,781
(2,490)
(3,702)
(186,007)
-
(131)
1,062
6,870
27,310
(16,857)
(7,347)
(1,163)
826
(44,951)
6,979

(966)

(82,281)
2,633
206,037
(6,862)

(4,787)


114,740

548
(293,720)
309,084
(177,633)
(83,624)
(45,662)
-

64


(290,943)
 2018
$ 7,760
45,232
42,802

13,218
4,864

(3,467)

(7,986)

(47,155)
(119,154)

(2,287)
203
22,170
29,387

20,001

4,883

-
(996)

(28,717)
(34,475)

(2,146)

(55,863)
3,980
281,986

(5,018)

(1,680)

223,405
-

(454,704)
313,976

(346,554)

(41,358)

(65,360)
59,520

-

(534,480)

(Continued)

SUNPLUS TECHNOLOGY COMPANY LIMITED

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

Proceeds from short-term borrowings
Repayments of short-term borrowings
Repayments of long-term borrowings
Proceeds from guarantee deposits received
Refunds of guarantee deposits received
Repayment of the principal portion of lease liabilities
Dividends paid to owners of the Company

Net cash used in financing activities

EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH
HELD IN FOREIGN CURRENCIES

NET DECREASE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR

CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR
 2019
54,658
-
(115,000)
1,406
(5,483)
(3,913)

(213,118)


(281,450)


(1,818)

(459,471)

780,555

$ 321,084
 2018
-
(59,520)

(160,000)
1,860

(752)

-

(414,397)

(632,809)

1,870

(942,014)

1,722,569
$ 780,555

The accompanying notes are an integral part of the financial statements.

(Concluded)

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

SUNPLUS TECHNOLOGY COMPANY LIMITED

1. GENERAL INFORMATION

Sunplus Technology Company Limited (“Sunplus” or the “Company”) was established in August 1990. It researches, develops, designs, tests and sells high quality, high value-added consumer integrated circuits (ICs). Its products are based on core technologies in such areas as multimedia audio/video, single-chip microcontrollers and digital signal processors. These technologies are used to develop hundreds of products including various ICs: liquid crystal display, microcontroller, multimedia, voice/music, and application-specific devices. Sunplus’ shares have been listed on the Taiwan Stock Exchange since January 2000. Some of its shares have been issued in the form of global depositary receipts (GDRs), which have been listed on the London Stock Exchange since March 2001 (refer to Note 20).

The parent financial statements are presented in the Company’s functional currency, the New Taiwan dollar.

2. APPROVAL OF FINANCIAL STATEMENTS

The parent company only financial statements were approved by the board of directors and authorized for issue on March 30, 2020.

3. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERPRETATIONS

  • a. Initial application of the amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), Interpretations of IFRS (IFRIC), and Interpretations of IAS (SIC) endorsed and issued into effect by the Financial Supervisory Commission (FSC)

Except for the following, the initial application of the amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRSs endorsed and issued into effect by the FSC did not have any material impact on the Company’s accounting policies:

1) IFRS 16 “Leases”

IFRS 16 provides a comprehensive model for the identification of lease arrangements and their treatment in the financial statements of both lessee and lessor. It supersedes IAS 17 “Leases”, IFRIC 4 “Determining whether an Arrangement contains a Lease”, and a number of related interpretations. Refer to Note 4 for information relating to the relevant accounting policies.

Definition of a lease

The Company elects to apply the guidance of IFRS 16 in determining whether contracts are, or contain, a lease only to contracts entered into (or changed) on or after January 1, 2019. Contracts identified as containing a lease under IAS 17 and IFRIC 4 are not reassessed and are accounted for in accordance with the transitional provisions under IFRS 16.

The Company as lessee

The Company recognizes right-of-use assets or investment properties if the right-of-use assets meet the definition of investment properties, and lease liabilities for all leases on the consolidated balance sheets except for those whose payments under low-value asset and short-term leases are recognized as expenses on a straight-line basis. On the statements of comprehensive income, the Company

presents the depreciation expense charged on right-of-use assets separately from the interest expense accrued on lease liabilities; interest is computed using the effective interest method. On the consolidated statements of cash flows, cash payments for the principal portion of lease liabilities are classified within financing activities; cash payments for the interest portion are classified within operating activities. Prior to the application of IFRS 16, payments under operating lease contracts, were recognized as expenses on a straight-line basis. Cash flows for operating leases were classified within operating activities on the statements of cash flows.

Lease liabilities were recognized on January 1, 2019 for leases previously classified as operating leases under IAS 17. Lease liabilities were measured at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate on January 1, 2019. Right-of-use assets are measured at an amount equal to the lease liabilities. The Company applies IAS 36 to all right-of-use assets.

The lessee’s weighted average incremental borrowing rate applied to lease liabilities recognized on January 1, 2019 is 2.39%. The difference between the (i) lease liabilities recognized and (ii) operating lease commitments disclosed under IAS 17 on December 31, 2018 is explained as follows:

The future minimum lease payments of non-cancellable operating lease commitments on
December 31, 2018


Less: Recognition exemption for short-term leases and leases of low-value assets



Undiscounted amounts on January 1, 2019



Discounted amounts using the incremental borrowing rate on January 1, 2019


Add: Adjustments as a result of a different treatment of extension and termination options

Lease liabilities recognized on January 1, 2019
 $ 65,973

-
$ 65,973
$ 56,503

128,841
$ 185,344

The Company as lessor

The Company does not make any adjustments for leases in which it is a lessor, and it accounts for those leases with the application of IFRS 16 starting from January 1, 2019.

The impact on assets, liabilities and equity as of January 1, 2019 from the initial application of IFRS 16 is set out as follows:

Adjustments Adjustments
As Originally Arising from
Stated on Initial Restated on
January 1, 2019 Application January 1, 2019
Right-of-use assets
$		 - $ 185,344 $ 185,344
Total effect on assets

$		 - $ 185,344 $ 185,344
Lease liabilities - current

$		 - $ 3,913 $ 3,913
Lease liabilities - non-current
- 181,431 181,431
Total effect on liabilities $ - $ 185,344 $ 185,344
  • 2) IFRIC 23 “Uncertainty over Income Tax Treatments”

IFRIC 23 clarifies that when there is uncertainty over income tax treatments, the Company should assume that the taxation authority will have full knowledge of all related information when making related examinations. If the Company concludes that it is probable that the taxation authority will accept an uncertain tax treatment, the Company should determine the taxable profit, tax bases, unused tax losses, unused tax credits or tax rates consistently with the tax treatments used or planned to be used in its income tax filings. If it is not probable that the taxation authority will accept an uncertain tax treatment, the Company should make estimates using either the most likely amount or the expected value of the tax treatment, depending on which method the entity expects to better predict the resolution of the uncertainty. The Company has to reassess its judgments and estimates if facts and circumstances change.

  • 3) Amendments to IAS 28 “Long-term Interests in Associates and Joint Ventures”

The amendments clarified that IFRS 9 “Financial Instruments” shall be applied to account for other financial instruments in an associate or joint venture to which the equity method is not applied. These included long-term interests that, in substance, form part of the Company’s net investment in an associate or joint venture.

  • 4) Amendments to IAS 19 “Plan Amendment, Curtailment or Settlement”

The amendments stipulate that, if a plan amendment, curtailment or settlement occurs, the current service cost and the net interest for the remainder of the annual reporting period are determined using the actuarial assumptions used for the remeasurement of the net defined benefit liabilities (assets). In addition, the amendments clarify the effect of a plan amendment, curtailment or settlement on the requirements regarding the asset ceiling. The Company applied the above amendments prospectively.

  • b. The IFRSs endorsed by the FSC for application starting from 2020
New IFRSs
Amendments to IFRS 3 “Definition of a Business”

Amendments to IFRS 9, IAS 39 and IFRS 7 “Interest Rate Benchmark
Reform”

Amendments to IAS 1 and IAS 8 “Definition of Material”
 Effective Date
Announced by IASB
January 1, 2020 (Note 1)
January 1, 2020 (Note 2)
January 1, 2020 (Note 3)

  • Note 1: The Company shall apply these amendments to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after January 1, 2020 and to asset acquisitions that occur on or after the beginning of that period.

  • Note 2: The Company shall apply these amendments retrospectively for annual reporting periods beginning on or after January 1, 2020.

  • Note 3: The Company shall apply these amendments prospectively for annual reporting periods beginning on or after January 1, 2020.

As of the date the consolidated financial statements were authorized for issue, the Company is continuously assessing the possible impact that the application of other standards and interpretations will have on the Company’s financial position and financial performance and will disclose the relevant impact when the assessment is completed.

  • c. New IFRSs in issue but not yet endorsed and issued into effect by the FSC

Effective Date New IFRSs Announced by IASB (Note 1) Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between To be determined by IASB an Investor and its Associate or Joint Venture” IFRS 17 “Insurance Contracts” January 1, 2021 Amendments to IAS 1 “Classification of Liabilities as Current or Non-current” January 1, 2022

Note 1: Unless stated otherwise, the above New IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.

  • 1) Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture”

The amendments stipulate that, when the Company sells or contributes assets that constitute a business (as defined in IFRS 3) to an associate or joint venture, the gain or loss resulting from the transaction is recognized in full. Also, when the Company loses control of a subsidiary that contains a business but retains significant influence or joint control, the gain or loss resulting from the transaction is recognized in full.

Conversely, when the Company sells or contributes assets that do not constitute a business to an associate or joint venture, the gain or loss resulting from the transaction is recognized only to the extent of the Company’s interest as an unrelated investor in the associate or joint venture, i.e., the Company’s share of the gain or loss is eliminated. Also, when the Company loses control of a subsidiary that does not contain a business but retains significant influence or joint control over an associate or a joint venture, the gain or loss resulting from the transaction is recognized only to the extent of the Company’s interest as an unrelated investor in the associate or joint venture, i.e., the Company’s share of the gain or loss is eliminated.

  • 2) Amendments to IAS 1 “Classification of Liabilities as Current or Non-current”

The amendments clarify that for a liability to be classified as non-current, the Company shall assess whether it has the right at the end of the reporting period to defer settlement of the liability for at least twelve months after the reporting period. If such rights are in existence at the end of the reporting period, the liability is classified as non-current regardless of whether the Company will exercise that right. The amendments also clarify that, if the right to defer settlement is subject to compliance with specified conditions, the Company must comply with those conditions at the end of the reporting period even if the lender does not test compliance until a later date.

The amendments stipulate that, for the purpose of liability classification, the aforementioned settlement refers to a transfer of cash, other economic resources or the Company’s own equity instruments to the counterparty that results in the extinguishment of the liability. However, if the terms of a liability that could, at the option of the counterparty, result in its settlement by a transfer of the Company’s own equity instruments, and if such option is recognized separately as equity in accordance with IAS 32: Financial Instruments: Presentation, the aforementioned terms would not affect the classification of the liability.

Except for the above impact, as of the date the consolidated financial statements were authorized for issue, the Company is continuously assessing the possible impact that the application of other standards and interpretations will have on the Company’s financial position and financial performance and will disclose the relevant impact when the assessment is completed.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  • a. Statement of Compliance

The parent company only financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

  • b. Basis for Preparation

The Company financial statements have been prepared on the historical cost basis except for financial instruments that are measured at fair values, and net defined benefit liabilities which are measured at the present value of the defined benefit obligation less the fair value of plan assets.

The fair value measurements are grouped into Levels 1 to 3 based on the degree to which the fair value measurement inputs are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

  • 1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;

  • 2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and

  • 3) Level 3 inputs are unobservable inputs for the asset or liability.

When preparing these parent company only financial statements, the Company used the equity method to account for its investments in subsidiaries, associates and joint ventures. In order for the amounts of the net profit for the year, other comprehensive income for the year and total equity in the parent company only financial statements to be the same with the amounts attributable to the owners of the Company in its financial statements, adjustments arising from the differences in accounting treatments between the parent company only basis and the basis were made to investments accounted for using the equity method, the share of profit or loss of subsidiaries, associates and joint ventures, the share of other comprehensive income of subsidiaries, associates and joint ventures and the related equity items, as appropriate, in these parent company only financial statements.

  • c. Classification of current and non-current assets and liabilities

Current assets include:

  • 1) Assets held primarily for the purpose of trading;

  • 2) Assets expected to be realized within twelve months after the reporting period; and

  • 3) Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a

Current liabilities include:

  • 1) Liabilities held primarily for the purpose of trading;

  • 2) Liabilities due to be settled within twelve months after the reporting period, even if an agreement to refinance, or to reschedule payments, on a long-term basis is completed after the reporting period and before the parent company only financial statements are authorized for issue; and

  • 3) Liabilities for which the Company does not have an unconditional right to defer settlement 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.

Assets and liabilities that are not classified as current are classified as non-current.

  • d. Foreign currencies

In preparing the financial statements of the Company, transactions in currencies other than the Company’s functional currency (i.e., foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions.

At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Exchange differences on monetary items arising from settlement or translation are recognized in profit or loss in the period.

Nonmonetary items measured at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Exchange differences arising on the retranslation of nonmonetary items are included in profit or loss for the period except for exchange differences arising from the retranslation of nonmonetary items in respect of which gains and losses are recognized directly in other comprehensive income, in which case, the exchange differences are also recognized directly in other comprehensive income.

Nonmonetary items that are measured at historical cost in a foreign currency are not retranslated.

For the purposes of presenting parent company only financial statements, the assets and liabilities of the Company’s foreign operations (including of the subsidiaries, associates, joint ventures or branches operations in other countries or currencies used different with the Company) are translated into New Taiwan dollars using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period. Exchange differences arising are recognized in other comprehensive income.

  • e. Inventories

Inventory write-downs are made by item, except where it may be appropriate to group similar or related items. Net realizable value is the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale. Inventories are recorded at weighted-average cost on the balance sheet date.

  • f. Investments accounted for using the equity method

The Company uses the equity method to account for investments in subsidiaries, associates and joint ventures.

  • 1) Investment in subsidiaries

Subsidiaries are the entities controlled by the Company.

Under the equity method, the investment is initially recognized at cost and the carrying amount is increased or decreased to recognize the Company's share of the profit or loss and other comprehensive income of the subsidiary after the date of acquisition. Besides, the Company also recognizes the Company’s share of the change in other equity of the subsidiary.

Changes in the Company’s ownership interests in subsidiaries that do not result in the Company’s loss of control over the subsidiaries are accounted for as equity transactions. Any difference

between the carrying amounts of the investment and the fair value of the consideration paid or received is recognized directly in equity.

When the Company’s share of losses of a subsidiary equals or exceeds its interest in that subsidiary (which includes any carrying amount of the investment in subsidiary accounted for by the equity method and long-term interests that, in substance, form part of the Company’s net investment in the subsidiary), the Company continues recognizing its share of further losses.

The acquisition cost in excess of the acquisition-date fair value of the identifiable net assets acquired is recognized as goodwill. Goodwill is not amortized. The acquisition-date fair value of the net identifiable assets acquired in excess of the acquisition cost is recognized immediately in profit or loss.

When testing for impairment, the cash-generating unit is determined based on the financial statements as a whole by comparing its recoverable amount with its carrying amount. If the recoverable amount of the asset subsequently increases, the reversal of the impairment loss is recognized as a gain, but the increased carrying amount of an asset after a reversal of an impairment loss shall not exceed the carrying amount that would have been determined (net of amortization or depreciation) had no impairment loss been recognized on the asset in prior years. An impairment loss recognized for goodwill shall not be reversed in a subsequent period.

When the Company ceases to have control over a subsidiary, any retained investment is measured at fair value at that date and the difference between the previous carrying amount of the subsidiary attributable to the retained interest and its fair value is included in the determination of the gain or loss. Furthermore, the Company accounts for all amounts previously recognized in other comprehensive income in relation to that subsidiary on the same basis as would be required if the Company had directly disposed of the related assets or liabilities.

Profits and losses from downstream transactions with a subsidiary are eliminated in full. Profits and losses from upstream with subsidiary and side stream transactions between subsidiaries are recognized in the Company’s financial statements only to the extent of interests in the subsidiary that are not related to the Company.

2) Investments in associates

An associate is an entity over which the Company has significant influence and that is neither a subsidiary nor an interest in a joint venture.

The results and assets and liabilities of associates are incorporated in these parent company only financial statements using the equity method of accounting. Under the equity method, an investment in an associate is initially recognized at cost and adjusted thereafter to recognize the Company’s share of the profit or loss and other comprehensive income of the associate. The Company also recognizes the changes in the Company’s share of equity of associates.

When the Company subscribes for additional new shares of the associate at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment differs from the amount of the Company’s proportionate interest in the associate. The Company records such a difference as an adjustment to investments with the corresponding amount charged or credited to capital surplus. If the Company’s ownership interest is reduced due to the additional subscription of the new shares of associate, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that associate is reclassified to profit or loss on the same basis as would be required if the investee had directly disposed of the related assets or liabilities. When the adjustment should be debited to capital surplus, but the capital surplus recognized from investments accounted for by the equity method is insufficient, the shortage is debited to retained earnings.

When the Company’s share of losses of an associate equals or exceeds its interest in that associate (which includes any carrying amount of the investment accounted for by the equity method and long-term interests that, in substance, form part of the Company’s net investment in the associate), the Company discontinues recognizing its share of further losses. Additional losses and liabilities are recognized only to the extent that the Company has incurred legal obligations, or constructive obligations, or made payments on behalf of that associate and jointly controlled entity.

Any excess of the cost of acquisition over the Company’s share of the net fair value of the identifiable assets and liabilities of an associate recognized at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment and is not amortized. Any excess of the Company’s share of the net fair value of the identifiable assets and liabilities over the cost of acquisition, after reassessment, is recognized immediately in profit or loss.

The entire carrying amount of the investment (including goodwill) is tested for impairment as a single asset by comparing its recoverable amount with its carrying amount. Any impairment loss recognized forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognized to the extent that the recoverable amount of the investment subsequently increases.

The Company discontinues the use of the equity method from the date on which it ceases to have significant influence. Any retained investment is measured at fair value at that date and the fair value is regarded as its fair value on initial recognition as a financial asset. The difference between the previous carrying amount of the associate (attributable to the retained interest and its fair value is included in the determination of the gain or loss on disposal of the associate. The Company accounts for all amounts previously recognized in other comprehensive income in relation to that associate on the same basis as would be required if that associate had directly disposed of the related assets or liabilities.

When the Company transacts with its associate (profits and losses resulting from the transactions with the associate are recognized in the Company’s parent company only financial statements only to the extent of interests in the associate and the jointly controlled entity that are not related to the Company.

  • g. Property, plant and equipment

Property, plant and equipment are stated at cost, less subsequent accumulated depreciation and subsequent accumulated impairment loss.

Depreciation is recognized using the straight-line method. Each significant part is depreciated separately. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss.

h. Intangible assets

  • 1) Intangible assets acquired separately

Intangible assets with finite useful lives that are acquired separately are initially measured at cost and subsequently measured at cost less accumulated amortization and accumulated impairment loss. Amortization is recognized on a straight-line basis. The estimated useful life, residual value, and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis. The residual value of an intangible asset

with a finite useful life shall be assumed to be zero unless the Company expects to dispose of the intangible asset before the end of its economic life. Intangible assets with indefinite useful lives that are acquired separately are measured at cost less accumulated impairment loss.

  • 2) Derecognition of intangible assets

On derecognition of an intangible asset, the difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss.

  • i. Impairment of tangible and intangible assets

At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets, excluding goodwill, to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually.

Recoverable amount is the higher of fair value less costs to sell and value in use. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount.

When an impairment loss is subsequently reversed, the carrying amount of the asset or cash-generating unit is increased to the revised estimate of its recoverable amount, but only to the extent of the carrying amount that would have been determined had no impairment loss been recognized for the asset or cash-generating unit in prior years. A reversal of an impairment loss is recognized in profit or loss.

j. Financial instruments

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

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.

  • 1) Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis.

  • a) Measurement category

2018

Financial assets are classified into the following categories: Financial assets at FVTPL, financial assets at amortized cost and investments in equity instruments at FVTOCI.

i. Financial assets at FVTPL

A financial asset is classified as at FVTPL when such a financial asset is mandatorily classified or it is designated as at FVTPL. Financial assets mandatorily classified as at FVTPL include investments in equity instruments which are not designated as at FVTOCI and debt instruments that do not meet the amortized cost criteria or the FVTOCI criteria.

Financial assets at FVTPL are subsequently measured at fair value, with any gains or losses arising on remeasurement recognized in profit or loss. The net gain or loss recognized in profit or loss incorporates any dividends or interest earned on the financial assets. Fair value is determined in the manner described in Note 28.

ii. Financial assets at amortized cost

Financial assets that meet the following conditions are subsequently measured at amortized cost:

  • i) The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and

  • ii) 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.

Subsequent to initial recognition, financial assets at amortized cost, including cash and cash equivalents, other financial assets, notes and accounts receivable and other receivables, are measured at amortized cost, which equals the gross carrying amount determined using the effective interest method less any impairment loss. Exchange differences are recognized in profit or loss.

Interest income 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 which interest income is calculated by applying the credit-adjusted effective interest rate to the amortized cost of such financial assets; and

  • ii) Financial assets that are not credit impaired on purchase or origination but have subsequently become credit impaired, for which interest income is calculated by applying the effective interest rate to the amortized cost of such financial assets in subsequent reporting periods.

Cash equivalents include time deposits, which are highly liquid, readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These cash equivalents are held for the purpose of meeting short-term cash commitments.

  • iii. Investments in equity instruments at FVTOCI

On initial recognition, the Company may make an irrevocable election to designate investments in equity instruments as at FVTOCI. Designation at FVTOCI is not permitted if the equity investment is held for trading or if it is contingent consideration recognized by an acquirer in a business combination.

Investments in equity instruments at FVTOCI are subsequently measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in other equity. The cumulative gain or loss will not be reclassified to profit or loss on disposal of the equity investments; instead, they will be transferred to retained earnings.

Dividends on these investments in equity instruments are recognized in profit or loss when the Company’s right to receive the dividends is established, unless the dividends clearly represent a recovery of part of the cost of the investment.

b) Impairment of financial assets

The Company recognizes a loss allowance for expected credit losses on financial assets at amortized cost (including trade receivables).

The Company always recognizes lifetime expected credit losses (ECLs) for trade receivables. For all other financial instruments, the Company recognizes lifetime ECLs when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on a financial instrument has not increased significantly since initial recognition, the Company measures the loss allowance for that financial instrument at an amount equal to 12-month ECLs.

Expected credit losses reflect the weighted average of credit losses with the respective risks of a default occurring as the weights. Lifetime ECLs represent the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECLs represent the portion of lifetime ECLs that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.

The Company recognizes an impairment gain or loss in profit or loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account.

  • c) Derecognition of financial assets

The Company derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.

On derecognition of a financial asset at amortized cost in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss. On derecognition of an investment in a debt instrument at FVTOCI, the difference between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognized in other comprehensive income is recognized in profit or loss. However, on derecognition of an investment in an equity instrument at FVTOCI, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss, and the cumulative gain or loss that had been recognized in other comprehensive income is transferred directly to retained earnings, without recycling through profit or loss.

2) Financial liabilities

  • a) Subsequent measurement

All the financial liabilities are measured at amortized cost using the effective interest method:

  • b) Derecognition of financial liabilities

The difference between the carrying amount of the financial liability derecognized and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

  • k. Revenue recognition

The Company identifies a contract with a customer, allocates the transaction price to the performance obligations, and recognizes revenue when performance obligations are satisfied.

Unearned receipts for merchandise sales would be recognized as contract liabilities before the company fulfills its performance obligations.

Revenue from the sale of goods

Revenue from the sale of goods comes from the sale of ICs. Sales of ICs are recognized as revenue when the goods are shipped because it is the time when the customer has full discretion over the manner of distribution and the price to sell the goods, has the primary responsibility for sales to future customers, and bears the risks of obsolescence. Trade receivables are recognized concurrently.

The Company does not recognize revenue on materials delivered to subcontractors because this delivery does not involve a transfer of control.

Other

Other mainly comes from software development and royalties.

  • l. Leases

2019

At the inception of a contract, the Company assesses whether the contract is, or contains, a lease.

  • 1) The Company as lessor

Leases are classified as finance leases whenever the terms of a lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

When the Company subleases a right-of-use asset, the sublease is classified by reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. However, if the head lease is a short-term lease that the Company, as a lessee, has accounted for applying recognition exemption, the sublease is classified as an operating lease.

Lease payments less any lease incentives payable from operating leases are recognized as income on a straight-line basis over the terms of the relevant leases. Initial direct costs incurred in obtaining operating leases are added to the carrying amounts of the underlying assets and recognized as expenses on a straight-line basis over the lease terms.

  • 2) The Company as lessee

The Company recognizes right-of-use assets and lease liabilities for all leases at the commencement date of a lease, except for short-term leases and low-value asset leases accounted for applying a recognition exemption where lease payments are recognized as expenses on a straight-line basis over the lease terms.

Right-of-use assets are initially measured at cost, which comprises the initial measurement of lease liabilities. Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any remeasurement of the lease liabilities. Right-of-use assets are presented on a separate line in the balance sheets.

Right-of-use assets are depreciated using the straight-line method from the commencement dates to the earlier of the end of the useful lives of the right-of-use assets or the end of the lease terms.

Lease liabilities are initially measured at the present value of the lease payments, which comprise fixed payments and variable lease payments which depend on an index or a rate. The lease payments are discounted using the interest rate implicit in a lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses the lessee’s incremental borrowing rate.

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. When there is a change in a lease term or a change in future lease payments resulting from a change in an index or a rate used to determine those payments, the Company remeasures the lease liabilities with a corresponding adjustment to the right-of-use-assets. However, if the carrying amount of the right-of-use assets is reduced to zero, any remaining amount of the remeasurement is recognized in profit or loss. Lease liabilities are presented on a separate line in the balance sheets.

2018

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

  • 1) The Company as lessor

Rental income from operating leases is recognized on a straight-line basis over the term of the relevant lease.

  • 2) The Company as lessee

Contingent rents arising under operating leases are recognized as an expense in the year in which they are incurred.

m. Employee benefits

  • 1) Short-term employee benefits

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related services.

2) Retirement benefits

Payments to defined contribution retirement benefit plans are recognized as expenses when employees have rendered service entitling them to the contributions.

Defined benefit costs (including service cost, net interest and remeasurement) under the defined benefit retirement benefit plans are determined using the projected unit credit method. Service cost (including current service cost and past service cost) and net interest on the net defined benefit liabilities (assets) are recognized as employee benefits expense in the period in which they occur, or when the plan amendment or curtailment occurs. Remeasurement, comprising actuarial gains and losses, and the return on plan assets (excluding interest), is recognized in other comprehensive income in the period in which it occurs. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss.

Net defined benefit liabilities (assets) represent the actual deficit (surplus) in the Company’s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any refunds from the plans or reductions in future contributions to the plans.

n. Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

1) Current tax

According to the Income Tax Law, an additional tax of inappropriate earnings is provided for as income tax in the year the shareholders approve to retain the earnings.

Adjustments of prior years’ tax liabilities are added to or deducted from the current year’s tax provision.

  • 2) Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities and the corresponding tax bases used in the computation of taxable profit.

Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences and unused loss carryforwards to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and associates, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. A previously unrecognized deferred tax asset is also reviewed at the end of each reporting period and recognized to the to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liabilities are settled or the assets are realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets 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.

  • 3) Current and deferred tax for the period

Current and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity respectively.

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In application of the Company’s accounting policies, management is required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

Critical Accounting Judgements

  • a. Lease terms - 2019

In determining a lease term, the Company considers all facts and circumstances that create an economic incentive to exercise or not to exercise an option, including any expected changes in facts and circumstances from the commencement date until the exercise date of the option. Main factors considered include contractual terms and conditions for the optional periods, significant leasehold improvements undertaken over the contract term, the importance of the underlying asset to the lessee’s operations, etc. The lease term is reassessed if a significant change in circumstances that are within control of the Company occur.

Key Sources of Estimation Uncertainty

  • a. Estimated impairment of financial assets

The provision for impairment of trade receivables is based on assumptions about the risk of default and expected loss rates. The Company uses judgment in making these assumptions and in selecting the inputs to the impairment calculation, based on the Company’s past history, existing market conditions as well as forward-looking estimates as at the end of each reporting period. Where the actual future cash inflows are less than expected, a material impairment loss may arise.

  • b. Estimated impairment of tangible assets and intangible assets (excluding goodwill)

The Company relies on subjective judgments and depends on industry usage patterns and related characteristics to determine cash flows, asset useful lives, and future revenues and expenses. Any change in the operating environment and corporate strategy may cause significant impairment loss.

  • c.

  • Lessees’ incremental borrowing rates - 2019

In determining a lessee’s incremental borrowing rate used in discounting lease payments, a risk-free rate for the same currency and relevant duration is selected as a reference rate, and the lessee’s credit spread adjustments and lease specific adjustments are also taken into account.

6. CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS
Cash on hand
Checking accounts and demand deposits
Cash equivalents
Time deposits		 December 31


2019
$ 447

271,637

49,000

$ 321,084
 2018
$ 424
522,131

258,000
$ 780,555

The market rate intervals of cash in bank and bank overdrafts at the end of the reporting period were as follows:

Bank balance December 31
2019
2018
0.01%-1.70%
0.01%-0.65%

7. FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets at FVTPL-current
Financial assets classified as at FVTPL
Non-derivative financial assets
- Mutual funds
Financial liabilities at FVTPL-non-current
Financial assets classified as at FVTPL
Non-derivative financial assets
- Securities unlisted in the ROC
- Mutual funds
- Securities listed in other countries		 December 31



2019
$ 515,989

$ 337,789

75,119

815

$ 413,723
 2018
$ 661,494
$ 190,050
75,432

672
$ 266,154

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME - 2018

Non-current
Domestic and foreign investments
- Unlisted shares and emerging market shares		 December 31 December 31
2019
$ 2,586		 2018
$ 4,337

9. ACCOUNTS RECEIVABLE, NET

Trade receivables
At amortized cost
Gross carrying amount		 December 31
2019
$ 141,845
 2018
$ 171,387

Trade receivables

The average credit period on sales of goods was 30 to 60 days without interest. The Company's exposure to credit risk and external credit ratings are continuously monitored. In order to minimize credit risk, the management of the Company has delegated a team responsible for determining credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. In addition, the Company reviews the recoverable amount of each individual trade debt at the end of the reporting period to ensure that adequate allowance is made for possible irrecoverable amounts. In this regard, the management believes the Company’s credit risk was significantly reduced.

The Company applies the simplified approach to providing for expected credit losses prescribed by IFRS 9, which permits the use of lifetime expected loss provision for all trade receivables. The expected credit losses on trade receivables are estimated using a provision matrix by reference to past default experience of the debtor and an analysis of the debtor’s current financial position, the forecast direction of economic conditions at the reporting date. As the Company’s historical credit loss experience does not show significantly different loss patterns for different customer segments, the provision for loss allowance based on past due status is not further distinguished according to the Company’s different customer base.

The Company writes off a trade receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery. Where recoveries are made, these are recognized in profit or loss.

The Company’s current credit risk grading framework is shown in the following table:

December 31, 2019

Not Overdue
Gross carrying amount at September 30,
2019
$ 141,845

Expected credit losses

-


Amortized cost at September 30, 2019
$ 141,845

December 31, 2018
Not Overdue
Gross carrying amount
$ 171,387

Expected credit losses

-


Amortized cost at December 31, 2018
$ 171,387
 Overdue
1- 60 days
$ -


-

$ -

Overdue
1- 60 days
$ -


-

$ -
 Overdue
61-90 days
$ -


-

$ -

Overdue
61-90 days
$ -


-

$ -
 Overdue
91-120 days
Overdue 121
days or More
$ -
$ -


-

-

$ -
$ -

Overdue
91-120 days
Overdue 121
days or More
$ -
$ -


-

-

$ -
$ -
 Total
$ 141,845

-
$ 141,845
Total
$ 171,387

-
$ 171,387

The movements of the loss allowance of trade receivables were as follows:

Balance at January 1
Less: Amounts written off (Note)
Balance at December 31		 December 31


2019
$ -

-
$ -		 2018
$ 107,257

(107,257)
$ -

Note: The trade receivable from one customer that were overdue for 2 years and determined to be uncollectible and the accounts receivable from another customer that was declared bankrupt by court ruling were both written off. The written-off receivables and allowance were both $107,257.

10. INVENTORIES

Finished goods
Work in progress
Raw materials		 December 31


2019
$ 126,606
125,054

22,104
$ 273,764		 2018
$ 98,872
129,316

28,719
$ 256,907

The costs of inventories recognized as cost of goods sold for the years ended December 31, 2019 and 2018 were $735,366 thousand and $809,472 thousand, respectively.

The costs of inventories recognized as costs of goods sold for the years ended December 31, 2019 and 2018 were as follows:

Inventory write-downs (reversed)
Income from scrap sales		 Years Ended December 31 Years Ended December 31


2019
$ 3,047


103

$ 3,150
 2018
$ (17,880)

87
$ (17,793)

The reversals of previous write-downs for the year ended December 31, 2019 resulted from reduced inventories.

11. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Investments in subsidiaries

Investments in associates

 December 31 December 31


2019
$ 5,489,062


560,877

$ 6,049,939
$		 2018
$ 5,384,684
596,525

5,981,209

a. Investments in subsidiaries


Listed companies

Generalplus Technology Corp.

Non-listed Company
Ventureplus Group Inc.

Sunplus Venture Capital Co., Ltd.

Lin Shih Investment Co., Ltd.

Russell Holdings Limited

Sunplus Innovation Technology

Sunext Technology Co., Ltd.

Award Glory Ltd.

Wei-Young Investment Inc.

Magic Sky Limited

Sunplus mMobile Inc.

Sunplus mMedia Inc.

Sunplus Management Consulting

Jumplux Technology Co., Ltd.

Sunplus Technology (H.K.)


 December 31 December 31


















2019
$ 681,743


1,373,861
1,049,350
744,832
569,284
573,897
194,234
160,186
49,602
32,282
29,576
23,627
3,768
2,785

35

$ 5,489,062
 2018
$ 704,549
1,354,351
1,028,567
750,558
579,038
523,083
174,391
33,116
56,947
82,747
29,785
46,128
3,910
17,475

39
$ 5,384,684

Except for Sunplus Management Consulting, investments were accounted for using the equity method and the share of profit or loss and other comprehensive income of those investments were calculated based on financial statements which have been audited. Management believes there is no material impact on the equity method of accounting or the calculation of the share of profit or loss and other comprehensive income from the financial statements of Sunplus Management Consulting which have not been audited.

Refer to Note 32 for the detail list of investments in subsidiaries.

The percentage subsidiaries’ ownerships and voting right held by the Company:

Listed companies
Generalplus Technology Corp.
Non-listed Company
Ventureplus Group Inc.
Sunplus Venture Capital Co., Ltd.
Lin Shih Investment Co., Ltd.
Russell Holdings Limited
Sunplus Innovation Technology
Sunext Technology Co., Ltd.
Award Glory Ltd.
Wei-Young Investment Inc.
Magic Sky Limited
Sunplus mMobile Inc.
Sunplus mMedia Inc.
Sunplus Management Consulting
Jumplux Technology
Sunplus Technology (H.K.)		 December 31
2019
2018
34%
34%
100%
100%
100%
100%
100%
100%
100%
100%
61%
61%
93%
91%
100%
100%
100%
100%
100%
100%
100%
100%
90%
90%
100%
100%
55%
55%
100%
100%

b. Investments in associates

Associates
Global View Co., Ltd.
iCatch Technology Inc.
Name of Associate
Global View Co., Ltd.
iCatch Technology Inc.		 December 31
2019
2018
$ 297,640
$ 307,106

263,237

289,419
$ 560,877
$ 596,525
Proportion of Ownership and Voting
Rights
December 31
2019
2018
13%
13%
29%
30%

Refer to Table 5 and Table 6 “Information on Investees” “Information on Investments in Mainland China” for the nature of activities, principal places of business and countries of incorporation of the associates.

iCatch Technology Inc. has independently operated its financial activities since July 31, 2018 due to operational needs; thus, the Company assessed that the control of iCatch Technology Inc. was lost. On July 31, 2018 the equity investment was remeasured at fair value, and a disposal gain of $119,154 thousand was recognized.

The fair values of publicly traded investments accounted for using the equity method, which were based on the closing prices of those investments at the balance sheet date, are summarized as follows:

Global View Co., Ltd.
All the associates are accounted for using the equity method.		 December 31
2019
$ 239,889
 2018
$ 248,530

The summarized financial information of the Company’s associates is set out below:

Total assets

Total liabilities

Revenue

Loss for the period

Comprehensive income

Share of profits of associates accounted for using the equity method
 December 31 December 31

2019
2018
$ 2,150,913
$ 2,346,302
$ 307,922
$ 365,599
Years Ended December 31



2019
$ 1,088,352

$ (8,509)

$ (6,310)

$ (16,832)
 2018
$ 1,005,661
$ (35,177)
$ (95,076)
$ (18,098)

The amounts of share of profits of associates are based on the associates’ financial statements audited by the auditors.

12. PROPERTY, PLANT AND EQUIPMENT

a. Assets used by the Company - 2019

Cost
Balance at beginning of year
Additions
Disposals
Reclassified

Balance at end of year

Accumulated depreciation
and impairment
Balance at beginning of year
Depreciation expense
Disposals

Balance at end of year

Net, end of year
 Buildings
$ 969,205

-
-

-

$ 969,205

$ 342,662

19,721

-

$ 362,383

$ 606,822
 Auxiliary
Equipment
$ 32,191

290
(5,408 )

-

$ 27,073

$ 19,654

3,277

(5,408)

$ 17,523

$ 9,550
 Machinery
and
Equipment
$ 1,770

3,500

(626 )

-

$ 4,644

$ 1,085

1,008

(626)

$ 1,467

$ 3,177
 Testing
Equipment
F
$ 198,906

59,453

(162,640 )

113

$ 95,832

$ 169,575

47,796

(162,640)

$ 54,731

$ 41,101
 urniture and
Fixtures
Prepayments
for Equipment
and
Construction
in Process
$ 35,002
$ 2,940

10,154
8,749

(18,766 )
-

10,380

(10,720)

$ 36,770
$ 969

$ 19,851
$ -

8,598
-

(18,766)

-

$ 9,683
$ -

$ 27,087
$ 969
 Total
$ 1,240,014
82,146
(187,440 )

(227)
$ 1,134,493
$ 552,827
80,400

(187,440)
$ 445,787
$ 688,706

b. 2018

Cost
Balance at beginning of year
Additions
Disposals

Balance at end of year

Accumulated depreciation
and impairment
Balance at beginning of year
Depreciation expense
Disposals

Balance at end of year

Net, end of year
 Buildings
$ 969,205

-

-

$ 969,205

$ 322,941

19,721

-

$ 342,662

$ 626,543
 Auxiliary
Equipment
$ 41,392

275

(9,476)

$ 32,191

$ 25,176

3,954

(9,476)

$ 19,654

$ 12,537
 Machinery
and
Equipment
$ 2,225

-

(455)

$ 1,770

$ 1,003

537

(455)

$ 1,085

$ 685
 Testing
Equipment
F
$ 164,145

36,552

(1,791)

$ 198,906

$ 156,667

14,699

(1,791)

$ 169,575

$ 29,331
 urniture and
Fixtures
Prepayments
for Equipment
and
Construction
in Process
$ 28,080
$ -

9,709
2,940

(2,787)

-

$ 35,002
$ 2,940

$ 16,317
$ -

6,321
-

(2,787)

-

$ 19,851
$ -

$ 15,151
$ 2,940
 Total
$ 1,205,047
49,476

(14,509)
$ 1,240,014
$ 522,104
45,232

(14,509)
$ 552,827
$ 687,187

The above items of property, plant and equipment are depreciated on a straight-line basis over the following estimated useful lives as follows:

Buildings Auxiliary equipment Machinery and equipment

35-56 years 4-11 years 4 years

Testing equipment 1-5 years Furniture and fixtures 4-5 years

Refer to Note 30 for the carrying amounts of property, plant and equipment that had been pledged by the Company to secure borrowings.

13. LEASE ARRANGEMENTS

  • a. Right-of-use assets - 2019
Right-of-use assets - 2019
December 31,
2019
Carrying amounts
Land $ 179,559
Depreciation charge for right-of-use assets
Land $ 5,785
Lease liabilities - 2019
December 31,
2019
Carrying amounts
Current $ 4,007
Non-current $ 177,424
Range of discount rate for lease liabilities was as follows:
December 31,
2019
Land 2.39%

  • b. Lease liabilities - 2019

  • c. Material lease-in activities and terms

The Company leases land and buildings for the use of plants and offices with lease terms of 20 years, and the lease contract for land located in the ROC specifies that lease payments will be adjusted on the basis of changes in the announced land value prices. The Company does not have bargain purchase options to acquire the leasehold land and buildings at the end of the lease terms.

d. Other lease information

2019
Expenses relating to short-term leases

Expenses relating to low-value asset leases

Total cash outflow for leases
 2019
$ 1,265
$ 448
$ 10,080

The Company leases certain transportation equipment and other leases which qualify as short-term leases. The Company has elected to apply the recognition exemption and, thus, did not recognize right-of-use assets and lease liabilities for these leases.

2018

The future minimum lease payments of non-cancellable operating lease commitments are as follows:

December 31, December 31,
2018
Not later than 1 year $ 8,318
Later than 1 year and not later than 5 years 21,079
Later than 5 years 36,576
$ 65,973

14. INTANGIBLE ASSETS

Cost
Balance at January 1

Additions
Disposals
Reclassified

Balance at December 31

Accumulated amortization
Balance at January 1

Amortization expense
Disposals
Reclassified

Balance at December 31

Accumulated deficit
Balance at December 31
Carrying amounts at December 31,
2019		 Year Ended December 31, 2019 Year Ended December 31, 2019







Technology
License Fees
$ 314,894
41,125
(23,509)

(350)

$ 332,160

$ 122,383
38,721
(23,509)

(175)

$ 137,420

$ 111,136

$ 83,604
 Software
$ 11,120

1,465

(4,379)

-

$ 8,206

$ 6,000

3,931

(4,379)

-

$ 5,552

$ -

$ 2,654
 Patents
$ 97,099

-

-

-

$ 97,099

$ 75,522

-

-

-

$ 75,522

$ 21,577

$ -
 Total
$ 423,113

42,590

(27,888)

(350)
$ 437,465
$ 203,905

42,652

(27,888)

(175)
$ 218,494
$ 132,713
$ 86,258
Technology
License Fees
Cost
Balance at January 1
$ 271,582
Additions
63,880
Disposals

(20,568)

Balance at December 31
$ 314,894

Accumulated amortization
Balance at January 1
$ 104,915
Amortization expense
38,036
Disposals

(20,568)

Balance at December 31
$ 122,383

Accumulated deficit
Balance at January 1 and
December 31
$ 111,136

Carrying amounts at December 31,
2018
$ 81,375

Other intangible assets are amortized on a straight-line basis ov
Technology license fees
Software
Patents
An analysis of the amortization by function:		 Year Ended December 31, 2018
Software
Patents
Total
$ 16,382 $ 97,099 $ 385,063

3,276
-
67,156

(8,538)

-

(29,106)
$ 11,120
$ 97,099
$ 423,113
$ 9,772 $ 75,522 $ 190,209

4,766
-
42,802

(8,538)

-

(29,106)
$ 6,000
$ 75,522
$ 203,905
$ -
$ 21,577
$ 132,713
$ 5,120
$ -
$ 86,495
er their estimated useful lives as follows:
1-10 years
1-5 years
18 years
Operating costs
Selling and marketing expenses
General and administrative expenses
Research and development expenses
 December 31 December 31



2019
$ -

-
3,430

39,222


$ 42,652
 2018
$ 191
3
3,933

38,675
$ 42,802

15. OTHER ASSETS

OTHER ASSETS
Current
Other assets
Prepayments for EDA tools
Prepaid technical licensing fee
Prepaid royalty
Others
Non-current
Other financial assets
Pledged time deposits (a)
Other assets
Refundable deposits
Others		 December 31






2019
$ 15,570

9,103
4,691

3,061


$ 32,425


$ 6,100


$ 136


7,800


$ 7,936
 2018
$ 16,019
-
5,170

3,662
$ 24,851
$ 6,100
$ 200

7,800
$ 8,000

a. Refer to Note 30 for information on pledged time deposits.

16. LOANS

  • a. Short-term borrowings
Unsecured borrowings
Bank loans		 December 31 December 31
2019
$ 53,964
 2018
$ -

The weighted average effective interest rate on the bank loans as of December 31, 2019 were 2.402%-2.537%.

  • b. Long-term borrowings

The borrowings of the Company were as follows:

Loans on credit
Less: Current portion
Long-term borrowings - non-current		 December 31


2019
$ -

-

$ -
 2018
$ 115,000
115,000
$ -

The effective rate borrowings as of December 31 2018 were 1.545%-1.600%.

According to the loan contract, the financial statements of the company for 107 years are limited by current ratio, debt ratio and interest guarantee multiple. However, the Company’s inability to meet the ratio requirements would not be deemed as a violation of the contracts. As of 2018, the Company was in compliance with these financial ratio

requirements.

17. ACCOUNTS AND NOTES PAYABLE

ACCOUNTS AND NOTES PAYABLE
Accounts payable
Payable - operating		 December 31
2019
$ 62,566
 2018
$ 108,075

The average credit period on purchases of certain goods was 30-60 days. The Company has financial risk management policies in place to ensure that all payables are paid within the pre-agreed credit terms.

18. OTHER LIABILITIES

Current
Other liabilities
Salaries or bonuses
Payable for royalties
Refund liabilities (Note 21)
Labor/health insurance
Payable on machinery and equipment
Compensation due to directors
Others
Non-current
Payable on machinery and equipment		 December 31



2019
$ 96,390

36,862
8,806
7,897
5,470
515

33,079

$ 189,019

$ 3,198
 2018
$ 102,634
19,459
9,014
7,491
7,770
199

41,474
$ 188,041
$ 2,376

19. RETIREMENT BENEFIT PLANS

Defined contribution plans

The Company adopted a pension plan under the Labor Pension Act (LPA), which is a state-managed defined contribution plan. Under the LPA, the Company makes monthly contributions to employees’ individual pension accounts at 6% of monthly salaries and wages.

Defined benefit plans

Before the promulgation of the LPA, Sunplus, Generalplus, Sunext, Sunplus Innovation, Jumplux Technology, Sunplus mMedia and iCatch of the Company had a defined benefit pension plan under the Labor Standards Law. Under this plan, employees should receive either a series of pension payments with a defined annuity or a lump sum that is payable immediately on retirement and is equivalent to 2 base units for each of the first 15 years of service and 1 base unit for each year of service thereafter. The total retirement benefit is subject to a maximum of 45 units. The pension benefits are calculated on the basis of the length of service and average monthly salaries of the six month before retirement. In addition, the Company makes monthly contributions, equal to 2% of salaries, to a pension fund, which is administered by a fund monitoring committee. Pension contributions are deposited in the Bank of Taiwan in the committee’s name and are managed by the Bureau of Labor Funds, Ministry of Labor (the “Bureau”); the Company has no right to influence the investment policy and strategy. According to the letter of Zhuhuanzi No. 1090003642 issued by the Hsinchu Science Park Administration of the Ministry of Science and Technology, the Company ceased its retirement fund contribution temporarily from January 1, 2020 to December 31, 2020.

The amounts included in the balance sheets in respect of the Company’s defined benefit plans were as follows:

Present value of funded defined benefit obligation
Fair value of plan assets
Net defined benefit (assets) liabilities		 **December ** **31 **


2019
$ 173,083


(174,246)

$ (1,163)
 2018
$ 169,342

(164,067)
$ 5,275

Movements in net defined benefit liabilities (assets) were as follows:

Net Liabilities Net Liabilities
Present Value of (Assets) Arising
Funded Defined from Defined
Benefit Fair Value of Benefit
Obligation Plan Assets Obligation
Balance at January 1, 2018 $
165,832		 $ 154,968 $
10,864
Service cost
Current service cost 587 - 587
Interest expense 2,322 2,190 132
Recognized in profit or loss 2,909 2,190 719
Remeasurement
Return on plan assets - 4,044 (4,044)
Actuarial (gain) loss-changes in financial
assumptions 5,484 - 5,484
Adjustment on actuarial (gain) loss-experience
adjustment (4,883) - (4,883)
Recognized in other comprehensive income 601 4,044 (3,443)
Contributions from employer - 2,865 (2,865)
Balance at December 31, 2018 $
169,342		 $ 164,067 $
5,275
(Continued)
Net Liabilities Net Liabilities
Present Value of (Assets) Arising
Funded Defined from Defined
Benefit Fair Value of Benefit
Obligation Plan Assets Obligation
Balance at January 1, 2019 $
169,342		 $ 164,067 $
5,275
Service cost
Current service cost 605 - 605
Interest expense 1,947 1,903 44
Recognized in profit or loss 2,552 1,903 649
Remeasurement
Return on plan assets - 5,498 (5,498)
Actuarial (gain) loss-changes in financial
assumptions 3,042 - 3,042
Adjustment on actuarial (gain) loss-experience
adjustment (1,853) - (1,853)
Recognized in other comprehensive income 1,189 5,498 (4,309)
Contributions from employer - 2,778 (2,778)
Balance at December 31, 2019 $
173,083		 $ 174,246 $
(1,163)

(Concluded)

An analysis by function of the amounts recognized in profit or loss in respect of the benefit plans is as follows:

Operating costs
Selling and marketing expenses
General and administrative expenses
Research and development expenses		 For the Year Ended December 31 For the Year Ended December 31 For the Year Ended December 31


2019
$ 105

6
215
323

$ 649
 2018
$ 153
6
232

328
$ 719

Through the defined benefit plans under the Labor Standards Law, the Company is exposed to the following risks:

  • a. Investment risk: The plan assets are invested in domestic and foreign equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the Bureau or under the mandated management. However, in accordance with relevant regulations, the return generated by plan assets should not be below the interest rate for a 2-year time deposit with local banks.

  • b. Interest risk: A decrease in the government bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the plan’s debt investments.

  • c. Salary risk: The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the present value of the defined benefit obligation.

The actuarial valuations of the present value of the defined benefit obligation were carried out by qualified actuaries. The significant assumptions used for the purposes of the actuarial valuations were as follows:

Discount rate(s)
Expected rate(s) of salary increase
Resignation rate		 December 31
2019
2018
1.00%
1.15%
4.00%
4.00%
0%-28%
0%-28%

If possible reasonable change in each of the significant actuarial assumptions will occur and all other assumptions will remain constant, the present value of the defined benefit obligation would increase (decrease) as follows:

Discount rate(s)
0.25% increase
0.25% decrease
Expected rate(s) of salary increase
1% increase
1% decrease		 December 31 December 31



2019
$ (5,029)

$ 5,237

$ 21,475

$ (18,693)
 2018
$ (5,484)
$ 5,726
$ 23,638
$ (20,348)

The sensitivity analysis presented above may not be representative of the actual change in the present value of the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

The expected contributions to the plan for the next year
The average duration of the defined benefit obligation		 December 31 December 31
2019
$ 2,778

14 years		 2018
$ 2,866
15 years

20. EQUITY

a. Share capital

1) Ordinary shares:

Numbers of shares authorized (in thousands)

Shares authorized

Number of shares issued and fully paid (in thousands)

Shares issued
 December 31 December 31



2019

1,200,000

$ 12,000,000


591,995

$ 5,919,949
 2018

1,200,000
$ 12,000,000

591,995
$ 5,919,949

Fully paid ordinary shares, which have a par value of $10.00, carry one vote per share and a right to dividends. Of the Company’s authorized shares, 80,000 thousand shares had been reserved for the issuance of convertible bonds and employee share options.

  • 2) Global depositary receipts

In March 2001, Sunplus issued 20,000 thousand units of global depositary receipts (GDRs), representing 40,000 thousand ordinary shares that consisted of newly issued and originally outstanding shares. The GDRs are listed on the London Stock Exchange (code: SUPD) with an issuance price of US$9.57 per unit. As of December 31, 2019, the outstanding 175 thousand units of GDRs represented 350 thousand ordinary shares.

b. Capital surplus

A reconciliation of the carrying amount at the beginning and at the end of 2019 and 2018 for each component of capital surplus was as follows:

May be used to offset a deficit, distributed as cash dividends, or
transferred to share capital (1)
From the issuance of ordinary shares
From the acquisition of a subsidiary
The difference between consideration received or paid and the carrying
amount of the subsidiaries’ net assets during actual disposal or
acquisition
May be used to offset a deficit only
From treasury share transactions
Changes in net equity of associates or joint ventures accounted for using
the equity method		 December 31


2019
$ 196,095

157,423
140,184
45,239

55,491

$ 594,432
 2018
$ 409,213
157,423
140,022
43,958

50,782
$ 801,398

  • 1) Such capital surplus may be used to offset a deficit; in addition, when the Company has no deficit, such capital surplus may be distributed as cash dividends or transferred to share capital (limited to a certain percentage of the Company’s capital surplus and once a year).

  • c. Retained earnings and dividend policy

Under the dividend policy as set forth in the amended Articles, Sunplus shall appropriate from the annual net income less any accumulated deficit: (a) 10% as legal reserve; and (b) special reserve equivalent to the debit balance of any accounts shown in the shareholders’ equity section of the balance sheet, other than deficit.

Under the approved shareholders’ resolution, the current year’s net income less all the foregoing appropriations and distributions, plus the prior years’ unappropriated earnings may be distributed as additional dividends. Sunplus’ policy is that cash dividends should be at least 10% of total dividends distributed. However, cash dividends will not be distributed if these dividends are less than NT$0.5 per share.

Under the regulations promulgated, a special reserve equivalent to the debit balance of any account shown in the shareholders’ equity section of the balance sheet (for example, unrealized loss on financial assets and cumulative translation adjustments) should be allocated from unappropriated retained earnings. For the policies on the distribution of employees’ compensation and remuneration to directors and supervisors before and after amendment, refer to Note 22-f.

Appropriation of earnings to the legal reserve shall be made until the legal reserve equals the Company’s paid-in capital. The legal reserve may be used to offset deficit. If the Company has no deficit and the legal reserve has exceeded 25% of the Company’s paid-in capital, the excess may be transferred to capital or distributed in cash.

The Company appropriates or reverses a special reserve in accordance with Rule No. 1010012865 and Rule No. 1010047490 issued by the FSC and the directive entitled “Questions and Answers on Special Reserves Appropriated Following the Adoption of IFRSs”. Distributions can be made out of any subsequent reversal of the debit to other equity items.

The appropriations from the 2018 and 2017 earnings were approved at the shareholders’ meetings in June 10, 2019 and on June 11, 2018, respectively. The appropriations, including dividends, were as follows:

Legal reserve
Special reserve
Cash dividend
Dividends per share (NT$)		 Appropriation of Earnings
For Year 2018
For Year 2017
$ 562
$ 41,321
$ 241,173
$ 44,284
$ -
$ 327,551
$ -
$ 0.5533

The Company’s shareholders also proposed in the shareholders’ meeting on June 10, 2019 and June 11, 2018 to issue cash dividends from capital surplus of $213,118 thousand and $86,846 thousand, respectively.

The appropriation of earnings for 2019 are subject to resolution in the shareholders’ meeting to be held on June 12, 2020.

  • d. Special reserve
Beginning at January 1
Appropriations to the special reserve
Balance at December 31		 For the Year Ended December 31 For the Year Ended December 31 For the Year Ended December 31


2019
$ 67,279


241,173

$ 308,452
 2018
$ 22,995

44,284
$ 67,279

  • e. Other equity items

  • 1) Exchange differences or translating the financial statements of foreign operations

Balance at January 1
Exchange differences on translating the financial statements of
foreign operations
Share of exchange differences of associates accounted for using the
equity method
Balance at December 31		 Years Ended December 31 Years Ended December 31


2019
$ (138,875)

(13,842)

(66,063)

$ (218,780)
 2018
$ (122,100)
19,736

(36,511)
$ (138,875)

2) Unrealized gain (loss) from investments in equity instruments measured at fair value through other comprehensive income:

Balance at January 1
Current
Unrealized gain (loss)
Cumulative unrealized gain (loss) of equity instruments
transferred to retained earnings due to disposal
Share of unrealized gain (loss) on associates accounted for using
the equity method
Balance at December 31		 For the Year Ended December 31 For the Year Ended December 31 For the Year Ended December 31


2019
$ (303,968)

(1,203)
279,514

(16,589)

$ (42,246)
 2018
$ (230,011)
(94,350)
37,070
(16,677)
$ (303,968)

f. Non-controlling interests

Shares
Transferred to Shares Held by
Employees (in Its Subsidiaries Total (in
Thousands of (in Thousands of Thousands of
Purpose of Buyback Shares) Shares) Shares)
Number of shares as of January 1, 2018 - 3,560 3,560
Decrease
-
-		 -
Number of shares as December 31, 2018
-
3,560
3,560
Number of shares as of January 1, 2019 - 3,560 3,560
Decrease
-
-		 -
Number of shares as December 31, 2019
-
3,560
3,560

The Company’s shares held by its subsidiaries at the end of the reporting periods were as follows:

Number of
Shares Held (In
Thousand)
December 31, 2019
Lin Shin Investment Co., Ltd
3,560
December 31, 2018
Lin Shin Investment Co., Ltd
3,560		 Carrying
Amount
Market Price
$ 63,401
$ 48,238
$ 63,401
$ 40,050

Under the Securities and Exchange Act, Sunplus shall neither pledge treasury shares nor exercise shareholders’ rights on these shares, such as rights to dividends and to vote.

21. REVENUE

Revenue from the sale of goods

Other

 Years Ended December 31 Years Ended December 31


2019
$ 1,143,333


91,936

$ 1,235,269
 2018
$ 1,114,399

124,381
$ 1,238,780

a. Contract information

Revenue from the sale of goods

IC products are sold to agents and customers. The Company determines the sales price of products based on orders. It takes into consideration the past purchases of agents and customers in order to estimate the most likely discount amount and return rate. Based on the determination of revenue, the Company recognizes the amount and the liabilities for refunds (accounted for as other current liabilities).

Other

Other mainly comes from software development and royalties.

  • b. Contract balances
December 31,
2019
December 31,
2018

Trade receivables (Note 9)
$ 141,845

$ 171,387



Contract liabilities - current
$ 3,373

$ 2,547

 January 1,
2018
$ 200,733
$ -

The changes in the balance of contract liabilities primarily result from the timing difference between the Company’s performance and the respective customer’s payment

c. Disaggregation of revenue

Disaggregation of revenue
Primary geographical markets
Asia

Taiwan
Others


Timing of revenue recognition
Satisfied at a point in time

Satisfied over time

 Reportable Segments
Direct Sales





2019
$ 984,862

208,641

41,766

$ 1,235,269

$ 1,224,955


10,314

$ 1,235,269
 2018
$ 962,788
225,802

50,190
$ 1,238,780
$ 1,216,620

22,160
$ 1,238,780

22. NET PROFIT

Net profit included the following items:

a. Other income

Rent income
Dividend income
Interest income
Others		 Years Ended December 31 Years Ended December 31


2019
$ 29,932

3,702
2,490

25,809

$ 61,933
 2018
$ 29,740
7,986
3,467

11,663
$ 52,856
  • b. Other gains and losses
Service income of management support
Net loss on financial assets and liabilities
Net loss on financial assets designated as at FVTPL (Note 7)
Net foreign exchange gain (loss)
Gain on disposal of subsidiaries		 Years Ended December 31 Years Ended December 31


2019
$ 34,023

17,428
(3,070)

-

$ 48,381
 2018
$ 44,542
(13,218)
1,749

119,154
$ 152,227
  • c. Finance costs
Interest on lease liabilites
Interest on bank loans
Other financial costs		 Years Ended December 31 Years Ended December 31
2019
$ 4,405
1,132

1,244
$ 6,781		 2018
$ -
3,887

977
$ 4,864
  • d. Depreciation and amortization
An analysis of depreciation by function
Operating costs
Operating expenses
An analysis of amortization by function
Operating costs
Operating expenses		 Years Ended December 31 Years Ended December 31





2019
$ 3,789


82,396

$ 86,185

$ -


42,652

$ 42,652
 2018
$ 4,044

41,188
$ 45,232
$ 191

42,611
$ 42,802
  • e. Employee benefit expense
Short-term benefits Years Ended December 31 Years Ended December 31
2019
$ 448,979
 2018
$ 422,759
Post-employment benefits
Defined contribution plans
Defined benefit plans (Note 19)


Other employee benefits

Total employee benefit expense

An analysis of employee benefit expense by function
Operating costs

Operating expenses

 19,742

649


20,391


10,874

$ 480,154

$ 40,642


439,512

$ 480,154
 18,402

719

19,121

10,314
$ 452,194
$ 61,245

390,949
$ 452,194
  • f. Employees’ compensation and remuneration of directors

The Company accrued employees’ compensation and remuneration of directors and supervisors at rates of no less than 1% and no higher than 1.5%, respectively, of net profit before income tax, employees’ compensation, and remuneration of directors. The employees’ compensation and remuneration of directors for the years ended December 31, 2019 and 2018, which have been approved by the Company’s board of directors on March 30, 2020 and March 20, 2019, respectively, were as follows:

Accrual rate

Employees’ compensation
Remuneration of directors		 For the Year Ended December 31
2019
2018
1.0%
1.0%
1.5%
1.5%

Amount

Employees’ compensation
Remuneration of directors		 For the Year Ended December 31 For the Year Ended December 31
2019
Cash
Shares

$ 206
$ -
309
-		 2018
Cash
Shares
$ 80
$ -
119
-

If there is a change in the proposed amounts after the annual financial statements are authorized for issue, the differences are recorded as a change in the accounting estimate.

There is no difference between the actual amounts of employees’ compensation and remuneration of directors paid and the amounts recognized in the financial statements for the years ended December 31, 2018 and 2017.

Information on the employees’ compensation and remuneration of directors resolved by the Company’s board of directors in 2020 and 2019 is available at the Market Observation Post System website of the Taiwan Stock Exchange.

  • g. Gain or loss on exchange rate changes
Exchange rate gains
Exchange rate losses		 Years Ended December 31 Years Ended December 31

2019
$ 22,155


(25,225)
 2018
$ 21,272

(19,523)

$ (3,070)

$ 1,749

23. INCOME TAXES

  • a. Income tax recognized in profit or loss

The major components of tax expense were as follows:

Current tax
In respect of the current year
Adjustments for prior periods
Deferred tax
In respect of the current year
Changes in tax rates
Income tax expense recognized in profit or loss		 Years Ended December 31 Years Ended December 31
2019
$ 4,787
-
-

-
$ 4,787		 2018
$ 1,680
464
(373)

373
$ 2,144

A reconciliation of accounting profit and current income tax expenses is as follows:

Profit before tax
Income tax expense calculated at the statutory rate
Tax effect of adjusting items:
Nondeductible expenses
Temporary differences
Tax-exempt income
Current income tax expense
Unrecognized investment credit
Foreign income tax expense
Adjustments for prior years’ tax
Income tax expense recognized in profit or loss		 Years Ended December 31 Years Ended December 31



2019
$ 20,096

$ 4,019

(37,633)
(8,659)

(42)

(42,315)
42,315
4,787
-
$ 4,787
 2018
$ 7,760
$ 1,552
(31,528)
(21,414)

(47)
(51,437)
51,437
1,680
464
$ 2,144

The Income Tax Act in the ROC was amended in 2018, and the corporate income tax rate was adjusted from 17% to 20%. In addition, the rate of the corporate surtax applicable to the 2018 unappropriated earnings was reduced from 10% to 5%.

In July 2019, the President of the ROC announced the amendments to the Statute for Industrial Innovation, which stipulate that the amounts of unappropriated earnings in 2018 and thereafter that are reinvested in the construction or purchase of certain assets or technologies are allowed as deduction when computing the income tax on unappropriated earnings.

b. Current tax assets and liabilities

Current tax assets Tax refund receivable (classified as other receivables)

December 31 December 31
2019
$ 486		 2018
$ 508
  • c. Deferred tax assets and liabilities

The movements of deferred tax assets and deferred tax liabilities were as follows:

For the year ended December 31, 2019

Recognized in Recognized in
Deferred Tax Assets Opening Balance Profit or Loss Closing Balance
Temporary differences
Depreciation expense $ 763 $ 3,029 $ 3,792
Exchange (gains) losses (297) 195 (102)
Others 2,019 (3,224) (1,205)
$ 2,485 $ - $ 2,485
For the year ended December 31, 2018
Recognized in Recognized in
Deferred Tax Assets Opening Balance Profit or Loss Closing Balance
Temporary differences
Depreciation expense $ 791 $ (28) $ 763
Exchange (gains) losses (468) 171 (297)
Others 2,162 (143) 2,019
$ 2,485 $ - $ 2,485

d. Deductible temporary differences, unused loss carryforwards and unused investment credits for which no deferred tax assets have been recognized in the parent company only balance sheets

Loss carryforwards
Expiry in 2019

Expiry in 2020
Expiry in 2021
Expiry in 2022
Expiry in 2023
Expiry in 2027
Expiry in 2029


Deductible temporary differences
 December 31 December 31



2019
$ -

211,457
322,509
394,894
1,144,831
24,228

19,642

$ 2,117,561

$ 69,427
 2018
$ 190,618
211,457
322,509
394,894
1,144,831
24,228

-
$ 2,288,537
$ 124,021
  • e. Unused loss carryforwards and tax exemptions

Loss carryforwards as of December 31, 2019:

Unused Amount Unused Amount Expiry Year
$ 211,457 2020
322,509 2021
394,894 2022
1,144,831 2023
24,228 2027
19,642 2029
$ 2,117,561

The income from the following projects is exempt from income tax for five years. The related tax-exemption periods are as follows:

Project
Sunplus
Fourteenth expansion
Fifteenth expansion		 Tax Exemption Period
January 1, 2015 to December 31, 2019
January 1, 2015 to December 31, 2019
  • f. Income tax assessments

The income tax returns of the Company before 2017 had been assessed by the tax authorities.

24. EARNINGS PER SHARE

EARNINGS PER SHARE
Basic gain per share
Diluted earnings per share		 Unit: NT$ Per Share
Years Ended December 31

2019
$ 0.03

$ 0.03
 2018
$ 0.01
$ 0.01

The earnings and weighted average number of ordinary shares outstanding in the computation of earnings per share were as follows:

Net profit for the year

Profit for the year attributable to owners of the Company
Effect of potentially dilutive ordinary shares
Bonuses for employees
Earnings used in the computation of diluted EPS from continuing operations		 Years Ended December 31 Years Ended December 31



2019
$ 15,309


-

$ 15,309
 2018
$ 5,616

-
$ 5,616

Weighted average number of ordinary shares outstanding (in thousand shares):

Weighted average number of ordinary shares used in the computation of
basic earnings per shares
Effect of dilutive potential ordinary shares:
Employee bonuses
Weighted average number of ordinary shares used in the computation of
diluted earnings per share		 Years Ended December 31 Years Ended December 31


2019
$ 588,435


16

$ 588,451
 2018
$ 588,435

60
$ 588,495

The Company can settle bonus or remuneration to employees in cash or shares. If the Company decides to use shares in settling the entire amount of the bonus or remuneration the resulting potential shares will be included in the weighted average number of shares outstanding to be used in computation of diluted earnings per share, if the effect is dilutive. This dilutive effect of the potential shares will be included in the computation of diluted earnings per share until the number of shares to be distributed to employees is determined in the following year.

25. DISPOSAL OF SUBSIDIARIES

iCatch Technology Inc. has independently operated its financial activities since July 31, 2018 due to operational needs; thus, the Company assessed that the control of iCatch Technology Inc. was lost. For details about the partial disposal of iCatch Technology Inc., refer to Note 29 to the Company’s consolidated financial statements for the year ended December 31, 2018.

26. EQUITY TRANSACTIONS WITH NON-CONTROLLING INTEREST

For details about the partial disposal of Sunext Technology Co., Ltd. and Jumplux Technology, refer to Note 30 to the Company’s consolidated financial statements for the year ended December 31, 2018.

27. CAPITAL MANAGEMENT

The Company manages its capital to ensure that entities in the Company will be able to continue as going concerns while maximizing the return to stakeholders through the optimization of the debt and equity balance.

The capital structure of the Company consists of [net debt (borrowings offset by cash and cash equivalents) and equity of the Company (comprising issued capital, reserves, retained earnings and other equity) attributable to owners of the Company.

The Company is not subject to any externally imposed capital requirements.

28. FINANCIAL INSTRUMENTS

The management of the Company considers that the fair values of financial assets and financial liabilities that are not measured at fair value approximate their fair values.

  • a. Fair value of financial instruments that are not measured at fair value

The management of the Company considers that the fair values of financial assets and financial liabilities that are not measured at fair value approximate their fair values.

  • b. Fair value of financial instruments that are measured at fair value on a recurring basis

  • 1) Fair value hierarchy

December 31, 2019

Financial assets at FVTPL
Mutual funds

Unlisted shares - ROC
Listed shares in other
countries


Financial assets at FVTOCI
Unlisted shares - ROC

December 31, 2018
Financial assets at FVTPL
Mutual funds

Unlisted shares - ROC
Listed shares in other
countries


Financial assets at FVTOCI
Unlisted shares in ROC and
other countries
 Level 1
$ 591,108
-

815

$ 591,923

$ -

Level 1
$ 736,926
-

672

$ 737,598

$ -
 Level 2
$ -

-

-

$ -

$ -

Level 2
$ -

-

-

$ -

$ -
 Level 3
$ -

337,789

-

$ 337,789

$ 2,586

Level 3
$ -

190,050

-

$ 190,050

$ 4,337
 Total
$ 591,108

337,789

815
$ 929,712
$ 2,586
Total
$ 736,926

190,050

672
$ 927,648
$ 4,337

There were no transfers between Levels 1 and 2 in the current and prior periods.

  • 2) Reconciliation of Level 3 fair value measurements of financial instruments

For the year ended December 31, 2019

Financial Assets
Financial Assets
at FVTPL
Financial Assets
at FVTOCI
Balance at January 1, 2018
$ 190,050
$ 4,337

Recognized in profit or loss
8,989
-
Recognized in other comprehensive income
-
(1,203)
Purchases
142,500
-
Disposals and proceeds from return of capital
of investments

(3,750)

(548)

Balance at December 31, 2018
$ 337,789
$ 2,586

For the year ended December 31, 2018
Financial Assets
Financial Assets
at FVTPL
Financial Assets
at FVTOCI
Balance at January 1, 2018
$ 111,851
$ 98,687

Recognized in profit or loss
(26,801)
-
Recognized in other comprehensive income
-
(94,350)
Purchases
201,000
-
Disposal

(96,000)

-

Balance at December 31, 2018
$ 190,050
$ 4,337
 Total
$ 194,387
8,989
(1,203)
142,500

(4,298)
$ 340,375
Total
$ 210,538
(26,801)
(94,350)
201,000

(96,000)
$ 194,387
  • c. Categories of financial instruments
Financial assets
Financial assets at FVTPL
Financial assets at amortized cost (i)
Financial assets at fair value through other comprehensive income
Equity instruments
Financial liabilities
Measured at amortized cost (ii)		 December 31
2019
2018
$ 929,712
$ 927,648
476,374
927,468
2,586
4,337
175,217
287,206

i) The balances include loans and receivables measured at amortized cost, which comprise cash and cash equivalents, accounts receivable, refundable deposits, trade and other receivables and other financial assets. Those reclassified to held-for-sale disposal groups are also included.

ii) The balances include available-for-sale financial assets carried at cost.

d. Financial risk management objectives and policies

The Company’s major financial instruments included equity and debt investments, trade receivable, trade payables, bonds payable, borrowings and convertible notes. The Company’s corporate treasury function provides services to the business, coordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Company through internal risk reports which analyze exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

The Corporate Treasury function reported quarterly to the Company's risk management committee.

1) Market risk

The Company's activities exposed it primarily to the financial risks of changes in foreign currency exchange rates (see (a) below) and interest rates (see (b) below). The Company entered into a variety of derivative financial instruments to manage its exposure to foreign currency risk and interest rate risk, including:

a) Foreign currency risk

A part of the Company’s cash flows is in foreign currency, and the use by management of derivative financial instruments is for hedging adverse changes in exchange rates, not for profit.

For exchange risk management, each foreign-currency item of net assets and liabilities is reviewed regularly. In addition, before obtaining foreign loans, the Company considers the cost of the hedging instrument and the hedging period.

The carrying amounts of the Company’s foreign currency-denominated monetary assets and monetary liabilities at the end of the reporting period, please refers to Note 31.

Sensitivity analysis

The Company was mainly exposed to the USD and RMB.

The following table details the Company sensitivity to a US$1.00 and RMB1.00 increase and decrease in the New Taiwan dollar (the functional currency) against the relevant foreign currencies. The sensitivity analysis considers the currencies of USD and RMB in circulation, and adjusts the end-of-term conversion to exchange rate change of $1.00. The sensitivity analysis covers cash and cash equivalents, notes and accounts receivable, other receivables, other financial assets, long-term and short-term loans, accounts payable, other accounts payable and deposit margins. A negative number below indicates a decrease in post-tax profit associated with the New Taiwan dollar strengthening $1.00 against USD and RMB. For a $1.00 weakening of the New Taiwan dollar against the relevant currency, there would be an equal and opposite impact on post-tax profit, and the balances below would be positive.

Profit or loss
Profit or loss
b) Interest rate risk		 USD Impact
Years Ended December 31
2019
2018
$ (1,783)
$ (3,163)
RMB Impact
Years Ended December 31
2019
2018
$ (11)
$ (1,007)

The Company was exposed to interest rate risk because entities in the Company borrowed funds at both fixed and floating interest rates. The risk is managed by the Company by maintaining an appropriate mix of

fixed and floating rate borrowings, and using interest rate swap contracts and forward interest rate contracts. Hedging activities are evaluated regularly to align with interest rate views and defined risk appetite, ensuring the most cost-effective hedging strategies are applied.

The carrying amounts of the Company’s financial assets and financial liabilities with exposure to interest rates at the end of the reporting period were as follows.

Fair value interest rate risk
Financial assets

Financial liabilities
Cash flow interest rate risk
Financial assets
Financial liabilities
Sensitivity analysis		 December 31
2019
2018
$ 55,100
$ 264,100
235,395
-
271,637
521,977
-
115,000

The sensitivity analyses below were determined based on the Company’s exposure to interest rates for both derivatives and non-derivative instruments at the end of the reporting period. For floating rate liabilities, the analysis was prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. Basis points of 0.125% increase or decrease was used when reporting interest rate risk internally to key management personnel and represents management's assessment of the reasonably possible change in interest rates.

Had interest rates increased/decreased by 0.125% and all other variables held constant, the Company’s post-tax profit for the years ended December 31, 2019 and 2018 would decrease/increase by $340 thousand and $509 thousand, respectively.

  • c) Other price risk

The Company was exposed to equity price risk through its investments in listed equity securities. Equity investments are held for strategic rather than trading purposes. The Company does not actively trade these investments.

The sensitivity analyses below were determined based on the exposure to equity price risks at the end of the reporting period.

Had the prices of financial assets at FVTPL been 1% higher/lower, post-tax profit for the year ended December 31, 2019 and 2018 would have increased/decreased by $9,297 and $9,276 thousand, respectively.

Had the prices of financial assets at FVTOCI been 1% higher/lower, post-tax profit for the year ended December 31, 2019 and 2018 would have increased/decreased by $26 and $43 thousand, respectively.

2) Credit risk

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Company. As at the end of the reporting period, the Company’s maximum exposure to credit risk which will cause a financial loss to the Company due to failure to discharge an obligation by the counterparties and financial guarantees provided by the Company is arising from the carrying amount of the respective recognized financial assets as stated in the balance sheets.

In order to minimize credit risk, the management of the Company has delegated a team responsible for determination of credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. In addition, the Company reviews the recoverable amount of each individual trade debt at the end of the reporting period to ensure that adequate impairment losses are made for irrecoverable amounts. In this regard, the directors of the Company consider that the Company’s credit risk was significantly reduced.

The credit risk on liquid funds and derivatives was limited because the counterparties are banks with high credit ratings assigned by international credit-rating agencies.

Trade receivables consisted of a large number of customers, spread across diverse industries and geographical areas. Ongoing credit evaluation is performed on the financial condition of trade receivables and, where appropriate, credit guarantee insurance cover is purchased.

The Company’s concentration of credit risk of 92% and 91% in total trade receivables as of December 31, 2019 and 2018, respectively, was related to the five largest customers within the property construction business segment.

3) Liquidity risk

The Company manages liquidity risk by monitoring and maintaining a level of cash and cash equivalents deemed adequate to finance the Company’s operations and mitigate the effects of fluctuations in cash flows. In addition, management monitors the utilization of bank borrowings and ensures compliance with loan covenants.

The Company relies on bank borrowings as a significant source of liquidity. As of December 31, 2019 and 2018, the Company had available unutilized overdraft and financing facilities refer to the following instruction.

  • a) Liquidity and interest rate risk tables

The following table details the Company’s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables had been drawn up based on the undiscounted cash flows of financial liabilities from the earliest date on which the Company can be required to pay. The tables included both interest and principal cash flows.

December 31, 2019

b) On Demand
or Less than
1 Month
1-3 Months
More than 3
Months to 1
Year
Over 1 Year
to 5 Years
Non-derivative financial
liabilities







Non-interest bearing
$ 47,708 $ 46,288 $ - $ -
Lease liabilities

693
1,386
6,239
33,271
Fixed interest rate liabilities
30,004

23,984

-

2,401


$ 78,405
$ 71,658
$ 6,239
$ 35,672

Additional information about the maturity analysis for lease liabilities:
Less than 1 Year
1-5 Years
5-10 Years
10-15 Years 15-20 Years
Lease liabilities
$ 8,318
$ 33,271
$ 41,589
$ 41,589
$ 36,439

December 31, 2018
On Demand
or Less than
1 Month
1-3 Months
More than 3
Months to 1
Year
Over 1 Year
to 5 Years
Non-derivative financial
liabilities







Non-interest bearing
$ 109,063 $ 38,642 $ - $ -
Variable interest rate
liabilities
105
15,000 100,000
-
Fixed interest rate liabilities
-

-

-

2,633


$ 109,168
$ 53,642
$ 100,000
$ 2,633

Financing facilities
December 31
2019
Unsecured bank overdraft facility, reviewed annually and
payable on demand:
Amount used
$ 53,964
$ Amount unused

2,545,436

$ 2,599,400
$		 On Demand
or Less than
1 Month
1-3 Months
More than 3
Months to 1
Year
Over 1 Year
to 5 Years
Non-derivative financial
liabilities







Non-interest bearing
$ 47,708 $ 46,288 $ - $ -
Lease liabilities

693
1,386
6,239
33,271
Fixed interest rate liabilities
30,004

23,984

-

2,401


$ 78,405
$ 71,658
$ 6,239
$ 35,672

Additional information about the maturity analysis for lease liabilities:
Less than 1 Year
1-5 Years
5-10 Years
10-15 Years 15-20 Years
Lease liabilities
$ 8,318
$ 33,271
$ 41,589
$ 41,589
$ 36,439

December 31, 2018
On Demand
or Less than
1 Month
1-3 Months
More than 3
Months to 1
Year
Over 1 Year
to 5 Years
Non-derivative financial
liabilities







Non-interest bearing
$ 109,063 $ 38,642 $ - $ -
Variable interest rate
liabilities
105
15,000 100,000
-
Fixed interest rate liabilities
-

-

-

2,633


$ 109,168
$ 53,642
$ 100,000
$ 2,633

Financing facilities
December 31
2019
Unsecured bank overdraft facility, reviewed annually and
payable on demand:
Amount used
$ 53,964
$ Amount unused

2,545,436

$ 2,599,400
$		 On Demand
or Less than
1 Month
1-3 Months
More than 3
Months to 1
Year
Over 1 Year
to 5 Years
Non-derivative financial
liabilities







Non-interest bearing
$ 47,708 $ 46,288 $ - $ -
Lease liabilities

693
1,386
6,239
33,271
Fixed interest rate liabilities
30,004

23,984

-

2,401


$ 78,405
$ 71,658
$ 6,239
$ 35,672

Additional information about the maturity analysis for lease liabilities:
Less than 1 Year
1-5 Years
5-10 Years
10-15 Years 15-20 Years
Lease liabilities
$ 8,318
$ 33,271
$ 41,589
$ 41,589
$ 36,439

December 31, 2018
On Demand
or Less than
1 Month
1-3 Months
More than 3
Months to 1
Year
Over 1 Year
to 5 Years
Non-derivative financial
liabilities







Non-interest bearing
$ 109,063 $ 38,642 $ - $ -
Variable interest rate
liabilities
105
15,000 100,000
-
Fixed interest rate liabilities
-

-

-

2,633


$ 109,168
$ 53,642
$ 100,000
$ 2,633

Financing facilities
December 31
2019
Unsecured bank overdraft facility, reviewed annually and
payable on demand:
Amount used
$ 53,964
$ Amount unused

2,545,436

$ 2,599,400
$		 On Demand
or Less than
1 Month
1-3 Months
More than 3
Months to 1
Year
Over 1 Year
to 5 Years
Non-derivative financial
liabilities







Non-interest bearing
$ 47,708 $ 46,288 $ - $ -
Lease liabilities

693
1,386
6,239
33,271
Fixed interest rate liabilities
30,004

23,984

-

2,401


$ 78,405
$ 71,658
$ 6,239
$ 35,672

Additional information about the maturity analysis for lease liabilities:
Less than 1 Year
1-5 Years
5-10 Years
10-15 Years 15-20 Years
Lease liabilities
$ 8,318
$ 33,271
$ 41,589
$ 41,589
$ 36,439

December 31, 2018
On Demand
or Less than
1 Month
1-3 Months
More than 3
Months to 1
Year
Over 1 Year
to 5 Years
Non-derivative financial
liabilities







Non-interest bearing
$ 109,063 $ 38,642 $ - $ -
Variable interest rate
liabilities
105
15,000 100,000
-
Fixed interest rate liabilities
-

-

-

2,633


$ 109,168
$ 53,642
$ 100,000
$ 2,633

Financing facilities
December 31
2019
Unsecured bank overdraft facility, reviewed annually and
payable on demand:
Amount used
$ 53,964
$ Amount unused

2,545,436

$ 2,599,400
$		 On Demand
or Less than
1 Month
1-3 Months
More than 3
Months to 1
Year
Over 1 Year
to 5 Years
Non-derivative financial
liabilities







Non-interest bearing
$ 47,708 $ 46,288 $ - $ -
Lease liabilities

693
1,386
6,239
33,271
Fixed interest rate liabilities
30,004

23,984

-

2,401


$ 78,405
$ 71,658
$ 6,239
$ 35,672

Additional information about the maturity analysis for lease liabilities:
Less than 1 Year
1-5 Years
5-10 Years
10-15 Years 15-20 Years
Lease liabilities
$ 8,318
$ 33,271
$ 41,589
$ 41,589
$ 36,439

December 31, 2018
On Demand
or Less than
1 Month
1-3 Months
More than 3
Months to 1
Year
Over 1 Year
to 5 Years
Non-derivative financial
liabilities







Non-interest bearing
$ 109,063 $ 38,642 $ - $ -
Variable interest rate
liabilities
105
15,000 100,000
-
Fixed interest rate liabilities
-

-

-

2,633


$ 109,168
$ 53,642
$ 100,000
$ 2,633

Financing facilities
December 31
2019
Unsecured bank overdraft facility, reviewed annually and
payable on demand:
Amount used
$ 53,964
$ Amount unused

2,545,436

$ 2,599,400
$		 5+ Years
$ -
223,324

56,286
$ 279,610
20+ Years
$ 103,707
5+ Years
$ -

-

61,427
$ 61,427
$





2019
$ 53,964


2,545,436

$ 2,599,400
 $ 2018
115,000
3,121,450
3,236,450
$

29. TRANSACTIONS WITH RELATED PARTIES

  • a. Name and relationship of related parties
Name and relationship of related parties
Related Party Name
Xiamen Xm-plus Technology Ltd.

AutoSys Co., Ltd.

Jumplux Technology Co., Ltd.

Generalplus Technology Inc.

Sunext Technology Co., Ltd.

Sunplus Innovation Technology Inc.

Sunplus mMedia Inc.

Sunplus Venture Capital Co., Ltd.

Lin Shih Investment Co., Ltd.

Wei-Young Investment Inc.

Russell Holdings Limited
 Related Party Category
Associate (Note 1)
Associate (Note 2)
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary

Note 1: The board of directors of Xiamen Xm-plus Technology Ltd. was re-elected on December 19, 2018. The company judged that it had lost significant influence on Xiamen Xm-plus Technology Ltd.

Note 2: It is an associate of the company; subsidiary of AutoSys Co., Ltd.

  • b. Sales of goods
Account Items
Related Parties Types
Sales of goods
Subsidiaries
Associates		 For the Year Ended December 31 For the Year Ended December 31 For the Year Ended December 31


2019
$ 7,690


10,065

$ 17,755
 2018
$ 19,460

28,058
$ 47,518

Sales price to related parties is based on cost and market price. The sales terms to related parties were similar to those with external customers.

  • c. Receivables from related parties (excluding loans to related parties)
Account Item
Related Party
Trade receivables
Subsidiaries
Associates
Other receivable
Subsidiaries
Associates		 December 31





2019
$ 597


1,258

$ 1,855

$ 1,723


280

$ 2,003
 2018
$ 2,047

2,400
$ 4,447
$ 5,339

1,358
$ 6,697

There were no guarantees on outstanding receivables from related parties. For the years ended December 31, 2019 and 2018, no impairment loss was recognized for trade receivables from related parties.

  • d. Other transactions with related parties
Account Item
Related Parties Types		 For the Year Ended December 31
2019
2018
Operating expenses
Subsidiaries

Non-operating income
Subsidiaries

and expenses
Associates

 $ 161

$ 26,558


10,228

$ 36,786
 $ -
$ 44,508

8,072
$ 52,580

Administrative support services price and support services price between the Company and the related parties were negotiated and were thus not comparable with those in the market.

The pricing and the payment terms of the lease contract between the Company and the related parties were similar to those with external customers.

e. Acquisitions of investments accounted for using the equity method

For the year ended December 31, 2019

Related Party Number of
Category/Name Line Item Shares Underlying Assets
 Purchase Price
Subsidiary
 Investments accounted for -
 Sunext Technology Co., $ -
using the equity method Ltd.
For the year ended December 31, 2018
Related Party Number of
Category/Name Line Item Shares Underlying Assets Purchase Price
Subsidiary Investments accounted 3,200 Jumplux $ 32,000
for using the equity Technology Co.,
method Ltd.
Subsidiary Investments accounted 8,251 Sunext Technology 24,752
for using the equity Co., Ltd.
method

The Company acquired shares of Sunext Technology Co., Ltd. from Sunplus Venture Capital Co., Ltd., in June, 2019.

The Company acquired shares of Jumplux Technology Co., Ltd. from Sunplus mMedia Inc. in August 2018 and acquired Sunext Technology Co., Ltd. from Sunplus Venture Capital Co., Ltd., Lin Shih Investment Co., Ltd., Wei-Young Investment Inc. and Russell Holdings Limited from October to December 2018.

  • f. Compensation of key management personnel
Short-term employee benefits
Post-employment benefits		 For the Year Ended December 31 For the Year Ended December 31 For the Year Ended December 31
2019
$ 11,721

269
$ 11,990		 2018
$ 18,100

269
$ 18,369

Compensation of directors and other key management personnel was decided by the Compensation Committee in accordance with individual performance and market trends.

30. PLEDGED OR MORTGAGED ASSETS

The following assets were mortgaged or pledged as collateral for bank borrowings and leased land:

Buildings, net
Pledged time deposits (classified to other financial assets, including current
and non-current)		 December 31


2019
$ 595,735


6,100

$ 601,835
 2018
$ 615,136

6,100
$ 621,236

31. EXCHANGE RATE OF FINANCIAL ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The following information is summarized and expressed in foreign currencies other than the functional currency. The disclosed exchange rate refers to the rate at which such foreign currencies are converted into the functional currency. The significant financial assets and liabilities denominated in foreign currencies are as follows:

December 31, 2019

Foreign
Currencies
(In Thousands) Exchange Rate Carrying Amount
Financial assets
Monetary items
USD
$
7,103
29.980		 $ 212,948
JPY 208
0.276		 57
CNY 117
4.305		 504
HKD 15
3.849		 58
GBP 3
39.360		 118
Nonmonetary items subsidiaries accounted for using
equity method
USD 20,066
29.980		 601,579
HKD 9
3.849		 35
(Continued)
Foreign
Currencies
(In Thousands) Exchange Rate Carrying Amount
Financial liabilities
Monetary items
USD
$
5,320
29.980		 $ 159,494
CNY 106
4.305		 456
(Concluded)
December 31, 2018
Foreign
Currencies
(In Thousands) Exchange Rate Carrying Amount
Financial assets
Monetary items
USD
$
7,594
30.715		 $ 233,250
JPY 279
0.278		 78
CNY 1,012
4.472		 4,526
HKD 34
3.921		 133
GBP 3
38.880		 117
Nonmonetary items subsidiaries accounted for using
equity method
USD 21,546
30.715		 661,785
HKD 10
3.921		 39
Financial liabilities
Monetary items
USD 4,431
30.715		 136,098
CNY 5
4.472		 22

The significant unrealized foreign exchange gains (losses) were as follows:

Foreign
Currencies
USD

CNY		 2019
Exchange Rate
Net Foreign
Exchange (Loss)
Gain
29.980 (USD:NTD)
$ (537)

4.305 (CNY:NTD)

25
$ (512)		 2018
Exchange Rate
Net Foreign
Exchange (Loss)
Gain
30.715 (USD:NTD)
$ (1,234)
4.472 (CNY:NTD)

(32)
$ (1,266)

32. ADDITIONAL DISCLOSURES

  • a. Following are the additional disclosures required for the Company and its investees by the Securities and Futures Bureau:

  • 1) Financings provided: Table 1 (attached)

  • 2) Endorsement/guarantee provided: Table 2 (attached)

  • 3) Marketable securities held: Table 3 (attached)

  • 4) Marketable securities acquired and disposed of at costs or prices of at least $100 million or 20% of the paid-in capital: Table 4 (attached)

  • 5) Information on investee: Table 5 (attached)

  • b. Information on investments in mainland China

  • 1) Information on any investee company in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, net income of investees, investment income or loss, carrying amount of the investment at the end of the period, repatriations of investment income, and limit on the amount of investment in the mainland China area. (Table 6)

Except for Table 1 to Table 6, there’s no further information about other significant transactions.

TABLE 1

SUNPLUS TECHNOLOGY COMPANY LIMITED

FINANCINGS PROVIDED

FOR THE YEAR ENDED DECEMBER 31, 2019 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

No. Lender Borrower Financial Statement
Account		 Related
Party		 Highest Balance for
the Period
Ending Balance		 Actual Borrowing
Amount		 Interest Rate Nature of
Financing		 Business
Transaction
Amounts		 Reasons for
Short-term
Financing		 Allowance for Bad
Debt		 **Collateral ** **Collateral ** Financing Limit
for Each
**Borrower **		 Aggregate
Financing Limit
Item Value
2
2
3
4
5
5		 Sunplus Technology (Shanghai)
Co., Ltd.
Sunplus Technology (Shanghai)
Co., Ltd.
Russell Holdings Ltd.
Sunplus Venture Capital Co.,
Ltd.
Sunplus Prof-tek Technology
(Shenzhen)
Lin Shih Investment Co., Ltd.
Sun Media Technology
Co., Ltd.

Sunplus APP
Technology
Sun Media Technology
Co., Ltd.
Sun Media Technology
Co., Ltd.
Sunplus APP
Technology
Sun Media Technology
Co., Ltd.		 Receivables from
related parties
Receivables from
related parties
Receivables from
related parties
Receivables from
related parties
Receivables from
related parties
Receivables from
related parties		 Yes
Yes
Yes
Yes
Yes
Yes		 $ 91,300
25,108
335,477
293,926
41,086
135,170		 $ -
12,522
261,077
232,426
39,354
121,645		 $ -
12,522
261,077

232,426
39,354
121,164		 1.8%
1.8%
2.05%
2.05%
1.8%
2.05%		 Note 1
Note 1
Note 1
Note 1
Note 1
Note 1		 $ -
-
-
-
-
-		 Note 2
Note 3
Note 4
Note 5
Note 6
Note 7		 $ -
12,522
-
-
39,354
-		 -
-
-
-
-
-		 $ -
-
-
-
-
-		 $ 256,983
(Note 8 )
21,415
(Note 9 )
455,427
(Note 10 )
419,740
(Note 11 )
37,851
(Note 12 )
317,228
(Note 13 )		 $ 256,983
(Note 8 )
42,830
(Note 9 )
455,427
(Note 10 )
419,740
(Note 11 )
75.703
(Note 12 )
317,228
(Note 13 )

Note 1: Short-term financing.

  • Note 2: Sunplus Technology (Shanghai) Co., Ltd. provided funds for the operating needs of Sun Media Technology Co., Ltd.

  • Note 3: Sunplus Technology (Shanghai) Co., Ltd. provided funds for the operating needs of Sunplus APP Technology.

  • Note 4: Russell Holdings Ltd. provided funds for the operating needs of Sun Media Technology Co., Ltd.

  • Note 5: Sunplus Venture Capital provided funds for the operating needs of Sun Media Technology Co., Ltd.

  • Note 6: Sunplus Prof-tek Technology (Shenzhen) provided funds for the operating needs of Sunplus APP Technology.

  • Note 7: Lin Shih Investment Co., Ltd. Provided funds for the operating needs of Sun Media Technology Co., Ltd.

  • Note 8: The foreign company has voting shares that are directly and indirectly wholly owned by the Company’s parent company. The total amount of all guarantees issued and the individual amount of each guarantee should not exceed 60% of Sunplus Technology (Shanghai) Co., Ltd.’s net equity as of its latest financial statements; in addition, each guarantee period should not exceed two years.

Note 9: The aggregate amount of all guarantees issued should not exceed 10% of the net equity of Sunplus Technology (Shanghai) Co., Ltd. (“Sunplus Shanghai”), and the individual amount of each guarantee should not exceed 5% of Sunplus Shanghai’s net equity, with net equity based on its latest financial statements.

  • Note 10: The foreign company has voting shares that are directly and indirectly wholly owned by the Company’s parent company. The total amount of all guarantees issued and the individual amount of each guarantee should not exceed 80% of Russell Holdings Ltd.’s net equity as of its latest financial statements; in addition, each guarantee period should not exceed two years.

Note 11: The total amount of all guarantees issued and the individual amount of each guarantee should not exceed 40% of Sunplus Venture Capital Co., Ltd.’s net equity as of its latest financial statements.

Note 12: The total amount of all guarantees issued and the individual amount of each guarantee should not exceed 10% of the net equity of Sunplus Prof-tek Technology (Shenzhen); and the individual amount of each guarantee should not exceed 5% of Sunplus Shanghai’s net equity.

Note 13: The total amount of all guarantees issued and the individual amount of each guarantee should not exceed 40% of Lin Shih Investment Co., Ltd.’s net equity as of its latest financial statements.

TABLE 2

SUNPLUS TECHNOLOGY COMPANY LIMITED

ENDORSEMENTS/GUARANTEES PROVIDED FOR THE YEAR ENDED DECEMBER 31, 2019 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

No. Endorser/
Guarantor		 Endorsee/Guarantee Limits on
Endorsement/
Guarantee Given
on Behalf of
Each Party
Maximum
Balance for the
Period		 Ending Balance Actual
Borrowing
Amount		 Value of
Collateral
(Property, Plant,
or Equipment)
Percentage of
Accumulated
Amount of
Collateral to
Net Equity as of
the Latest
Financial
Statements
Maximum
Collateral/Guara
ntee Amounts
Allowable		 Provided by the
Company
Guarantee
Provided by
the Subsidiary		 Guarantee
Provided to
a Subsidiary
Located in
Mainland
China
Name Nature of
Relationship
0
(Note 1)
1
(Note 2)		 Sunplus Technology
Company Limited
(“Sunplus”)
Russell Holdings Ltd.		 Sun Media Technology Co., Ltd.
Sunext Technology Co., Ltd.
Sun Media Technology Co., Ltd.		 3 (Note 4)
2 (Note 3)
3 (Note 4)		 $ 817,853
(Note 5)
817,853
(Note 5)
341,570
(Note 7)		 $ 428,573
10,000
279,585		 $ 169,365
-
122,860		 $ 107,625
-
122,860		 $ -
-
122,860		 2.07
-
21.58		 $ 1,635,707
(Note 6)
1,635,707
(Note 6)
341,570
(Note 7)		 Yes
Yes
No		 No
No
No		 Yes
No
Yes

Note 1: Issuer.

Note 2: Investee.

Note 3: The endorser directly holds more than 50% of the ordinary shares of the endorsee.

  • Note 4: Sunplus and its subsidiaries jointly hold more than 50% of the ordinary shares of the endorsee.

Note 5: For each transaction entity, the guarantee amount should not exceed 10% of the endorsement/guarantee provider’s net equity based on the provider’s latest financial statements.

  • Note 6: The guarantee amount should not exceed 20% of the endorsement/guarantee provider’s net equity based on the provider’s latest financial statements.

  • Note 7: Russell Holdings Ltd. and the endorsement guaranty object are the parent company which holds 100% voting rights directly or indirectly. For each transaction entity, the guarantee amount should not exceed 60% of the endorsement/guarantee provider’s net equity, i.e., Russell Holdings Ltd. provider’s latest financial statements.

TABLE 3

SUNPLUS TECHNOLOGY COMPANY LIMITED

MARKETABLE SECURITIES HELD FOR THE YEAR ENDED DECEMBER 31, 2019 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Holding Company Name Type and Name of Marketable Security Relationship with the Holding
Company		 Financial Statement Account December 31, 2019 December 31, 2019 Note
Shares or Units
(In Thousands)		 Carrying Amount Percentage of
Ownership (%)		 Market Value or
Net Asset Value
Sunplus Technology Company Limited
(the “Company”)		 Nomura Taiwan Money Market Fund
Mega RMB Money Market Fund
FSITC RMB Money Market Fund TWD
FSITC US Top 100 bond fund A
Taishin 1699 Money Market Fund
Mega Diamond Money Market Fund
UPAMC James Bond Money Market Fund
Yuanta USD Money Market Fund USD
PineBridge Muliti - Income Fund
Prudential Financial RMB Money Market Fund
TWD
Yuanta RMB Money Market TWD
Harvest Series 1 Fund
Yuanta Emerging Indonesia and India 4 years
Bond Fund
Broadcom Inc.
Triknight Capital Corporation
EVERGREEN STEEL Co., Ltd.
Network Capital Global		 -
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-		 Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through other
comprehensive income - non-current		 616
466
5,387
2,000
2,216
13,197
1,851
239
95
5,810
1,702
2
1,500
-
29,625
1,500

380		 $ 10,096
24,146
52,658
20,100
30,100
166,162
31,058
75,886
30,516
57,349
17,918
59,960
15,159
815
285,289
52,500
2,586		 -
-
-
-
-
-
-
-
-
-
-
-
-
-
5
-
7		 $ 10,096
24,146
52,658
20,100
30,100
166,162
31,058
75,886
30,516
57,349
17,918
59,960
15,159
815
285,289
52,500
2,586		 Note 3
Note 3
Note 3
Note 3
Note 3
Note 3
Note 3
Note 3
Note 3
Note 3
Note 3
Note 3
Note 3
Note 2
Note 1
Note 1
Note 1
(Continued)
Holding Company Name Type and Name of Marketable Security Relationship with the Holding
Company		 Financial Statement Account December 31, 2019 December 31, 2019 Note
Shares or Units
(In Thousands)		 Carrying Amount Percentage of
Ownership (%)		 Market Value or
Net Asset Value
Lin Shih Investment Co., Ltd.
Russell Holdings Limited		 UPI Semiconductor Corp.
A-Spine Asia Co., Ltd.
Taiwan Mask Corp.
Enterex International Limited - CB
Kee Song Bio - Technology Holdings Limited
Everlight Electronics Co., Ltd. - CB
Genius Vision Digital Co., Ltd.
Ortery Technologies, Inc.
Chain Sea Information Integration Co., Ltd.
AIII Co., Ltd.
GEMFOR Leading Financial Solution Provider
fund
Sanjet Technology Corporation
Minton Optic Industry Co., Ltd.
Lead Sun Corporation
Ability Enterprise Co., Ltd.
Sunplus Technology Co., Ltd.
Prine Rich International Co., Ltd.
Synerchip Inc.
OZ Optics Limited
Innobrige International Inc.		 -
~~-~~
~~-~~
-
-
-
-
-
-
-
-
-
-
-
-
Parent company
-
-
-
-		 Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss – non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss – non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through other
comprehensive income - non-current
Financial assets at fair value through other
comprehensive income - non-current
Financial assets at fair value through other
comprehensive income - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current		 300
220
101
30
50
80
300
103
43
26
13
8
4,272
-

5,434

3,560

33
6,452
1,000
4,000		 $ 18,420
19,620
3,479
2,700
4,423
8,000
-
-
474
431
216
-
-
27,934
90,472
48,238
4,600
-
-
-		 -
-
-
-
-
-
4
1
-
-
-
-
7
12
2
1
-
12
8
15		 $ 18,420
19,620
3,479
2,700
4,423
8,000
-
-
474
431
216
-
-
27,934
90,472
48,238
4,600
-
-
-		 Note 1
Note 1
Note 2
Note 2
Note 2
Note 2
Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 2
Note 2
Note 1
Note 1
Note 1
Note 1
(Continued)
Holding Company Name Type and Name of Marketable Security Relationship with the Holding
Company		 Financial Statement Account December 31, 2019 December 31, 2019 Note
Shares or Units
(In Thousands)		 Carrying Amount Percentage of
Ownership (%)		 Market Value or
Net Asset Value
Russell Holdings Limited
Sunplus Venture Capital Co., Ltd.		 Ether Precision Inc.
Asia Tech Taiwan Venture, L.P.
Asia B2B on Line Inc.
AMED Ventures I, L.P.
Intudo Ventures II, L.P.
GeneOne Diagnostics Corporation
Taiwan Mask Corp.
Charles Schwab - Money Fund
Cyberon Corporation
Grand Fortune Venture Capital Co., Ltd.
Ortery Technologies, Inc.
Funyou Venture Capital Limited Partnersh
Book4u Company Limited
Sanjet Technology Corp.
Simple Act Inc.
Minton Optic Industry Co., Ltd.
Raynergy Tek Inc.
Genius Vision Digital
CDIB Capital Growth Partners L.P.
VenGlobal International Fund
TIEF Fund LP
San Neng Group Holding Co., Ltd.		 -
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-		 Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through other
comprehensive income - non-current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current		 1,250
-
1,000
-
-

1,710
108
-
786
5,000
68
-
9
49
1,900
5,000
4,500
375
-
1
-
900		 $ -
-
-
5,563
24,411
20,386
3,721
2,032
27,530
54,950
-
19,877
-
-
-
-
81,630
-
54,379
-
40,721
32,940		 1
5
3
3
6
13
-
-
8
7
1
10
-
-
10
8
16
5
2
-
7
1		 $ -
-
-
5,563
24,411
20,386
3,721
2,032
27,530
54,950
-
19,877
-
-
-
-
81,630
-
54,379
-
40,721
32,940		 Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 2
Note 2
Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 2

(Continued)

Holding Company Name Type and Name of Marketable Security Relationship with the Holding
Company		 Financial Statement Account December 31, 2019 December 31, 2019 Note
Shares or Units
(In Thousands)		 Carrying Amount Percentage of
Ownership (%)		 Market Value or
Net Asset Value
Sunplus Venture Capital Co., Ltd.
Wei-Young Investment Inc.
Sunplus Technology (Shanghai) Co., Ltd.
Generalplus Technology Inc.
Sunplus Innovation Technology Inc.		 Huijia Health Life Technology
Intudo Ventures I, L.P.
eWave System, Inc.
Feature Integration Technology Inc.
Qun-Kin Venture Capital
Protect Life International Biomedical Inc.
Shiny Brands Group Co., Ltd.
Cheng Mei Materials Technology Corporation
Chipbond Technology Corporation
GF Every Day The Red Haired Type Money
Market Fund B
GF Live Treasury Currency B
Chongqing CYIT Communication Technology
Co., Ltd.
Ready Sun Investment Group Fund
Xiamen Xm-plus Technology Ltd.
Franklin Templeton SinoAm Money Market
Fund
Mega Diamond Money Market Fund
Yuanta Wan Tai Money Market Fund
Fuh Hwa You Li Money Market Fund
Yuanta De-Li Money Market Fund
Taishin 1699 Money Market Fund
Advanced Silicon SA		 -
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-		 Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through other
comprehensive income - non-current
Financial assets at fair value through other
comprehensive income - non-current
Financial assets at fair value through other
comprehensive income - non-current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through other
comprehensive income - non-current		 1,000
-
1,833

1,247

3,000

1,364
105
2,000
300
13,100
13,550
-
-
-
7,869
810
3,963
2,235
4,333
2,212

1,000		 $ 30,000
45,630
-
18,680
24,000
5,110
7,864
14,600
20,160
56,579
58,493
-
41,625
11,520
81,669
10,199
60,241
30,226
70,939
30,042
22,705		 6
8
22
4
6
4
-
-
-
-
-
3
16
3
-
-
-
-
-
-
10		 $ 30,000
45,630
-
18,680
24,000
5,110
7,864
14,600
20,160
56,579
58,493
-
41,625
11,520
81,669
10,199
60,241
30,226
70,939
30,042
22,705		 Note 1
Note 1
Note 1
Note 2
Note 1
Note 1
Note 2
Note 2
Note 2
Note 3
Note 3
Note 1
Note 1
Note 1
Note 3
Note 3
Note 3
Note 3
Note 3
Note 3
Note 1
(Continued)
Holding Company Name Type and Name of Marketable Security Relationship with the Holding
Company		 Financial Statement Account December 31, 2019 December 31, 2019 Note
Shares or Units
(In Thousands)		 Carrying Amount Percentage of
Ownership (%)		 Market Value or
Net Asset Value
Sunplus Innovation Technology Inc.
Magic Sky Limited
Giant Rock Inc.
Sunext Technology Co., Ltd.
Jsilicon Technology Co., Ltd.		 Advanced NuMicro System, Inc.
Point Grab Ltd.
GTA Co., Ltd. - CB
Xiamen Xm-plus Technology Ltd.
Yunata Taiwan Dividend + ETF Feeder Fund
Yunata Taiwan Top 50 ETF Feeder Fund
EVERGREEN STEEL Co.,Ltd.
GF Live Treasure Currency B		 -
-
-
-
-
-		 Financial assets at fair value through other
comprehensive income - non-current
Financial assets at fair value through other
comprehensive income - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - non-current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
Financial assets at fair value through
profit or loss - current
2,000

182
-
-
2,843
467
1,000
7,888		 $ 848
-
32,079
46,813
31,609
5,715
35,000
33,959		 8
1
-
15
-
-
-
-		 $ 848
-
32,079
46,813
31,609
5,715
35,000
33,959		 Note 1
Note 1
Note 1
Note 1
Note 3
Note 3
Note 1
Note 3

Note 1: The market value was based on the carrying amount as of December 31, 2019.

Note 2: The market value was based on the closing price as of December 31, 2019.

Note 3: The market value was based on the net asset value of the fund as of December 31, 2019.

(Concluded)

TABLE 4

SUNPLUS TECHNOLOGY COMPANY LIMITED

MARKETABLE SECURITIES ACQUIRED OR DISPOSED OF AT COSTS OR PRICES OF AT LEAST NT$300 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2019

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Company Name Type and Name of
Marketable
Securities		 Financial Statement
Account		 Counterparty Relationship Beginning Balance Beginning Balance Acquisition(Note 1) Acquisition(Note 1) Disposal(Note 1) Disposal(Note 1) Ending Balance(Note 3) Ending Balance(Note 3)
Number of
Shares		 Amount Number of
Shares		 Amount Number of
Shares		 Amount Carrying
Amount		 Gain (Loss) on
Disposal		 Shares Amount
Generalplus
Technology Inc.		 Franklin Templeton
SinoAm Money
Market Fund		 Financial assets at fair
value through profit or
loss - current		 - - 5,721 $ 59,048 29,017 $ 300,000 26,869 $ 278,000 $ 277,539 $ 461 7,869 $ 81,669

Note 1: The cumulative purchase and sale amount shall be calculated separately at the market price to determine whether it has reached NT$300 million or 20% of the paid-up capital.

Note 2: The paid-in capital refers to the paid-in capital of the parent company.

Note 3: The amount on the end of the period is the amount of unrealized profit or loss.

TABLE 5

SUNPLUS TECHNOLOGY COMPANY LIMITED

NAMES, LOCATIONS, AND RELATED INFORMATION OF INVESTEES ON WHICH THE COMPANY EXERCISES SIGNIFICANT INFLUENCES DECEMBER 31, 2019

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investor Investee Location Main Businesses and Products Investment Amount Investment Amount Balance as of December 31, 2019 Balance as of December 31, 2019 Balance as of December 31, 2019 Net Income
(Loss) of the
Investee		 Investment
Gain (Loss)		 Note
December 31,
2019		 December 31,
2018		 Shares
(Thousands)		 Percentage of
Ownership (%)		 Carrying
Amount
Sunplus Technology Company Limited
Lin Shih Investment Co., Ltd.
Sunplus Venture Capital Co., Ltd.
Russell Holdings Limited
Ventureplus Group Inc.		 Ventureplus Group Inc.
Award Glory Ltd.
GLOBAL VIEW CO., LTD.
Lin Shih Investment Co., Ltd.
Generalplus Technology Inc.
Sunplus Venture Capital Co., Ltd.
Sunplus Innovation Technology Inc.
Russell Holdings Limited
iCatch Technology, Inc.
Sunext Technology Co., Ltd.
Sunplus mMedia Inc.
Sunplus Management Consulting Inc.
Sunplus Technology (H.K.) Co., Ltd.
Magic Sky Limited
Sunplus mMobile Inc.
Wei-Young Investment Inc.
Jumplux Technology Co., Ltd.
Generalplus Technology Inc.
Sunplus Innovation Technology Inc.
iCatch Technology, Inc.
Sunplus mMedia Inc.
Jumplux Technology Co., Ltd.
Sunplus Innovation Technology Inc.
iCatch Technology, Inc.
Sunplus mMedia Inc.
Han Young Technology Co., Ltd.
Autosys Co., Ltd.
Ventureplus Mauritius Inc.		 Belize
Belize
Hsinchu, Taiwan
Hsinchu, Taiwan
Hsinchu, Taiwan
Hsinchu, Taiwan
Hsinchu, Taiwan
Cayman Islands, British West Indies
Hsinchu, Taiwan
Hsinchu, Taiwan
Hsinchu, Taiwan
Hsinchu, Taiwan
Kowloon Bay, Hong Kong
Samoa
Hsinchu, Taiwan
Hsinchu, Taiwan
Hsinchu, Taiwan
Hsinchu, Taiwan
Hsinchu, Taiwan
Hsinchu, Taiwan
Hsinchu, Taiwan
Hsinchu, Taiwan
Hsinchu, Taiwan
Hsinchu, Taiwan
Hsinchu, Taiwan
Taipei, Taiwan
Cayman Islands, British west Indies
Mauritius		 Investment
Investment
Consumer electronics, components and rental
of buildings
Investment
Design of ICs
Investment
Design of ICs
Investment
Design of ICs
Design of ICs
Design of ICs
Management
International trade
Investment
Design of ICs
Investment
Design of ICs
Design of ICs
Design of ICs
Design of ICs
Design of ICs
Design of ICs
Design of ICs
Design of ICs
Design of ICs
Design of ICs
Investment
Investment		 $ 2,399,817
( US$ 74,605
RMB
37,900 )
226,834
( US$ 5,642
RMB
13,400 )

315,658
699,988
281,001
999,982
414,663
739,307
( US$ 24,660 )
207,345
983,237
407,565
5,000
42,628
( HK$ 11,075 )
304,597
( US$ 10,160 )
2,596,792
70,157
132,000
86,256
15,701
9,645
19,408
101,000
57,388
33,439
44,878
-
74,950
( US$ 2,500 )
2,399,817
( US$ 74,605
RMB
37,900 )		 $ 2,399,817
( US$ 74,605
RMB
37,900 )
61,219
( US$ 2,042 )

315,658

699,988

281,001

999,982

414,663
721,319
( US$ 24,060 )

207,345

981,053

407,565

5,000
42,628
( HK$ 11,075 )
302,049
( US$ 10,075 )

2,596,792

70,157

132,000

86,256

15,701

9,645

19,408

101,000

57,388

33,439

44,878

4,200
74,950
( US$ 2,500 )
2,399,817
( US$ 74,605
RMB
37,900 )		 -
-

8,229

70,000

37,324

100,000

31,450
24,660

20,735

58,778

22,441

500
11,075
-

16,240

5,400

13,200

14,892

1,075

965

650

10,100

2,904

3,332

1,909

-
-
-		 100
100
13
100
34
100
61
100
29
93
90
100
100
100
100
100
55
14
2
1
3
42
6
5
8
-
16
100		 $ 1,373,861
160,186
297,640
744,832
681,743
1,049,350
573,897
569,284
263,237
194,234
23,627
3,768
35
32,282
29,576
49,602
2,785
273,385
17,399
12,784
5,348
2,130
53,990
44,159
457
-
77,208
1,373,859		 $ 21,479

8,497

85,934

43,053

223,584

43,973

135,651

5,887

(79,931 )

19,076

(25,068 )

(142 )

(3 )

(53,190 )

(209 )

(5,239 )

(26,527 )

223,584

135,651

(79,931 )

(25,068 )

(26,527 )

135,651

(79,931 )

(25,068 )

-

(1,845 )

21,496		 $ 21,479

8,497

11,165

41,771

76,690

43,973

82,919

5,887

(27,997 )

17,497

(22,501 )

(142 )

(3 )

(53,190 )

(209 )

(5,239 )

(14,590 )

30,599

2,834

(1,094 )

(652 )

(11,163 )

7,655

(3,779 )

(1,914 )

-

(1,793 )

21,496		 Subsidiary
Subsidiary
Investee
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Investee
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Investee
Investee
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
(Note 2)
Investee
Subsidiary
Ventureplus Mauritius Inc.
Generalplus Technology Inc.
Generalplus International (Samoa) Inc.		 Ventureplus Cayman Inc.
Generalplus International (Samoa) Inc.
Generalplus (Mauritius) Inc.		 Cayman Islands, British West Indies
Samoa
Mauritius		 Investment
Investment
Investment		 2,399,817
( US$ 74,605
RMB
37,900 )
572,318
( US$ 19,090 )
572,318
( US$ 19,090 )		 2,399,817
( US$ 74,605
RMB
37,900 )
572,318
( US$ 19,090 )
572,318
( US$ 19,090 )		 -
19,090
19,090		 100
100
100		 1,373,837
475,396
475,394
21,497

13,484

13,484
21,497

13,484

13,484		 Subsidiary
Subsidiary
Subsidiary

(Continued)

Investor Investee Location Main Businesses and Products Investment Amount Investment Amount Balance as of December 31, 2019 Balance as of December 31, 2019 Balance as of December 31, 2019 Net Income
(Loss) of the
Investee		 Investment
Gain (Loss)		 Note
December 31,
2019		 December 31,
2018		 Shares
(Thousands)		 Percentage of
Ownership (%)		 Carrying
Amount
Generalplus (Mauritius) Inc.
Award Glory Ltd.
Sunny Fancy Ltd.		 Generalplus Technology (Hong Kong) Inc.
Sunny Fancy Ltd.
Giant Kingdom Ltd.
Giant Rock Inc.
WORLDPLUS HOLDINGS L.L.C.		 Hong Kong
Seychelles
Seychelles
Anguilla
America		 Sales
Investment
Investment
Investment
Investment		 $ 11,692
(US$ 390 )
226,834
(US$ 5,642
RMB
13,400 )
23,145
(US$ 772 )
95,762
(US$ 1,270
RMB
13,400 )
107,928
(US$ 3,600 )		 $ 11,692
(US$ 390 )
61,212
(US$ 2,042 )
23,145
(US$ 772 )
38,075
(US$ 1,270 )
-		 -
-
-
-

-		 100
100
100
100
100		 $ 4,691
160,186
558
50,758
108,870		 $ (456 )

8,497

(240 )

11,319

(2,138 )		 $ (456 )

8,497

(240 )

11,319

(2,582 )		 Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary

Note 1: The initial exchange rate was based on the exchange rate as of December 31, 2018.

Note 2: Han Young Technology Co., Ltd. was liquidated in November 2019.

(Concluded)

TABLE 6

SUNPLUS TECHNOLOGY COMPANY LIMITED

INFORMATION ON INVESTMENTS IN MAINLAND CHINA FOR THE YEAR ENDED DECEMBER 31, 2019 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investee Company Name Main Businesses and Products Main Businesses and Products Total Amount of
Paid-in Capital		 Investment Type Accumulated
Outflow of
Investment from
Taiwan as of
January 1, 2019		 Investment Flows Investment Flows Investment Flows Accumulated
Outflow of
Investment from
Taiwan as of
December 31,
2019		 % Ownership of
Direct or Indirect
Investment
Net Income
(Loss) of the
investee		 Investment Loss Carrying
Amount as of
December 31,
2019		 Accumulated
Inward
Remittance of
Earnings as of
December 31,
2019
Outflow Inflow
Sunplus Technology
(Shanghai) Co., Ltd.
Sunplus Prof-tek (Shenzhen)
Co., Ltd.
Sun Media Technology Co.,
Ltd.
Sunplus App Technology Co.,
Ltd.
Ytrip Technology Co., Ltd.
Sunplus Technology (Beijing)
1culture Communication Co.,
Ltd.
JSilicon Technology Co., Ltd.
(Ru Domg)
Lingyao Technology Co., Ltd.
(Shenzhen)
Shuangxin Technology Co.,
Ltd. (Chongqing)		 Development of computer software, system
integration services and building rental services
Development of computer software, system
integration services, building rental services and
property management
Development of computer software, system
integration services and building rental services
Manufacturing and sale of computer software, system
integration services and information management
and education
Computer system integration services, supply of
general advertising and other information services
Development of computer software, system
integration services and building rental services
System development
Development of computer software, system
integration services
Development of computer software, system
integration services and building rental
Development of computer software, system
integration services		 $ 515,656
(US$ 17,200)
966,855
(US$ 32,250)
599,600
(US$ 20,000)
111,930
(RMB
26,000)
263,681
(RMB
61,250)
116,235
(RMB
27,000)
13,991
(RMB
3,250)
43,050
(RMB
10,000)
81,963
(RMB
19,039)
8,610
(RMB
2,000)		 Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 3
Note 4
Note 6
Note 5		 $ 529,297
(US$ 17,655)
966,855
(US$ 32,250)
599,600
(US$ 20,000)
60,618
(US$ 586
RMB
10,000)
135,240
(US$ 4,511)
116,235
(RMB
27,000)
-
-
-
-		 $ -
-
-
47,355
(RMB
11,000)
-
-

-

-
107,928
(US$ 3,600)

-		 $ -

-

-
-

-

-

-

-
-

-		 $ 529,297
(US$ 17,655)

966,855
(US$ 32,250)

599,600
(US$ 20,000)

107,973
(US$ 586
RMB
21,000)

135,240
(US$ 4,511)

116,235
(RMB
27,000)


-

107,928
(US$ 3,600)

-		 100
100
100
96
91
100
100
100
100
100		 $ 13,082

(29,577)

31,538

(10,628)

(2,566)

3,096

(29)

(15,033)

(2,138)

(10,973)		 $ 13,082

(29,577)

31,538

(10,290)

(2,327)

3,096

(29)

(15,033)

(2,582)

(10,973)		 $ 428,305

757,026

131,080

4,071

1,861

49,237

65

28,209

108,870

75,218		 $ -

-

-

-

-

-

-

-

-

-
Accumulated Investment in Mainland China as of
December 31, 2019		 Investment Amounts Authorized by Investment Commission, MOEA Limit on Investment
$ 2,597,759
( US$ 79,872 and
RMB
49,900 )		 $ 2,623,398
( US$ 78,602 and
RMB
62,000 )		 $ 4,907,120
Sunplus Venture Capital Co., Ltd.
Accumulated Investment in Mainland China as of
December 31, 2019 (Note 7)		 Investment Amounts Authorized by Investment Commission, MOEA Limit on Investment
$ 37,775
( US$ 1,260 )		 $ 37,775
( US$ 1,260 )		 $ 629,610

(Continued)

Generalplus Technology Inc. (Nature of Relationship: 1)

Investee
Company Name		 Main Businesses and Products Main Businesses and Products Total Amount of
Paid-in Capital		 Investment Type
(e.g., Direct or
Indirect)		 Accumulated
Outflow of
Investment from
Taiwan as of
January 1, 2019		 Investment Flows Investment Flows Investment Flows Accumulated
Outflow of
Investment from
Taiwan as of
December 31,
2019		 % Ownership of
Direct or Indirect
Investment
Net Loss of the
investee		 Investment Loss
(Note 2)		 Carrying
Amount as of
December 31,
2019		 Accumulated
Inward
Remittance of
Earnings as of
December 31,
2019
Outflow Inflow
Generalplus Shenzhen IC product development, after sales service and market
research
$ 560,626
(US$ 18,700)		 Note 1 $ 560,626
(US$ 18,700)		 $ - $ - $ 560,626
(US$ 18,700)		 100% $ 13,940 $ 13,940 $ 471,173 $ -
Accumulated Investment in Mainland China as of
December 31, 2019		 Investment Amount Authorized by Investment Commission, MOEA Limit on Investment
$ 560,626
( US$ 18,700 )		 $ 560,626
( US$ 18,700 )		 $ 1,210,358

Note 1: Indirect investment in a company located in mainland China through investment in a company located in a third country.

Note 2: Based on the investee’s reviewed financial statements for the same period.

Note 3: Ytrip Technology Co., Ltd. indirectly invested in a company located in mainland China.

Note 4: Sunplus Technology (Shanghai) Co., Ltd.’s indirect investment in a company located in mainland China.

Note 5: Sunplus Technology (Shanghai) Co., Ltd. and Sunplus Prof-tek (Shenzhen) Co., Ltd.’s indirect investments in a company located in mainland China.

Note 6: It is a company located in mainland China that acquired the investment of the third regional investment company on September 2, 2019.

Note 7: The Ministry of Economic Affairs approved an investment in the shares of San Neng Group Holding Co., Ltd., which is accounted for under the financial assets at fair value through profit or loss- non-current.

Note 8: The original foreign currency was derived from the exchange rate on December 31, 2019.

(Concluded)

7.6 Financial Difficulties

Impact to the Company or subsidiaries if any turnover problems: None

156

VIII. Financial Analysis 8.1 Financial Status 8.1.1 Financial Analysis Comparison 2018 vs. 2019

Unit: NT$K

Unit: NT$K Unit: NT$K
Year
Item		 2018 2019 Variation
Increase (Decrease) YoY %
Current Assets 6,638,302 5,940,147 (698,155) (11)
Property,Plant & Equipment 2,052,359 1,968,803 (83,556) (4)
Intangible Assets 178,521 176,233 (2,288) (1)
Other Assets 3,057,802 3,404,584 346,782 11
Total Assets 11,926,984 11,489,767 (437,217) (4)
Current Liabilities 1,684,729 1,342,416 (342,313) (20)
Non-Current Liabilities 374,649 574,660 200,011 53
Total Liabilities 2,059,378 1,917,076 (142,302) (7)
Equity Attributed to Shareholder
of theparent		 8,465,942 8,178,533 (287,409) (3)
Capital Stock 5,919,949 5,919,949 - -
Capital Surplus 801,398 594,432 (206,966) (26)
Retained Earnings 2,250,839 1,988,579 (262,260) (12)
Equity: Others (442,843) (261,026) 181,817 (41)
TreasuryStock (63,401) (63,401) - -
Minor interest 1,401,664 1,394,158 (7,506) (1)
Total Shareholder’s Equities 9,867,606 9,572,691 (294,915) (3)
Remark:
1. The decrease in current liabilities is mainly due to the decrease in long-term loans due within one year.
2. The increase in non-current liabilities was mainly due to the increase in lease liabilities recognized by IFRS16.
3. The decrease in capital reserves is mainly due to the distribution of dividends from capital reserves.
4. The increase in other equity is mainly due to the disposal of unrealized loss of financial commodities of equity
instruments measured at fair value through other comprehensiveprofit and loss.

157

8.2 Operational Results

8.2.1 Operation Results Comparison 2018 vs. 2019

Unit: NT$K

Unit: NT$K Unit: NT$K
Year
Item		 2018 2019 Variation
Increase (decrease) YoY %
Net Sales 6,077,733 5,512,330 (565,403) (9)
Gross Profit 2,429,384 2,374,575 (54,809) (2)
Income(Loss)From Operating (89,790) 131,741 221,531 (247)
Non-Operating Income
(Expense)		 293,780 112,479 (181,301) (62)
Income(Loss)Before Tax 203,990 244,220 40,230 20
Income (Loss) From Operations
of Continued Segments		 142,323 174,752 32,429 23
Net Revenue (Loss) for the
period		 142,323 174,752 32,429 23
Other Comprehensive Income
(Loss)for theperiod		 (131,361) (102,073) 29,288 (22)
Total Comprehensive Profit
(Loss)for theperiod		 10,962 72,679 61,717 563
Remarks:
1. The increase in operating net profit was mainly due to the decrease in operating expenses for the current year.
2. The decrease in non-operating income and expenses was mainly due to the decrease in the interests of the handling
company in this year.
3. The increase in profit and loss before tax and net profit after tax for the current period was mainly due to the increase in
operating profit for the year.
4. The increase in other comprehensive profits and losses for the current period was mainly due to the decrease in unrealized
losses of financial assets measured at fair value through other comprehensive gains and losses during the year.
5. The increase in total profit and loss for the current period is mainly due to the increase in net profit for the year.

158

8.3 Cash Flow

8.3.1 Cash Flow Analysis

8.3 Cash Flow
8.3.1 Cash Flow Analysis		 8.3 Cash Flow
8.3.1 Cash Flow Analysis		 8.3 Cash Flow
8.3.1 Cash Flow Analysis		 8.3 Cash Flow
8.3.1 Cash Flow Analysis
**a) Cash Flow Analysis 2018 vs. 2019 **
Year
Item		 2018 2019 YoY %
Cash flow ratio 16.85 48.54 188
Cash flow adequacyratio 56.71 81.59 44
Cash flow reinvestment ratio Note 1 2.44 -
1. The increase in cash flow ratio is mainly due to the increase in net cash flow from operating activities.
2. The increase in the allowable cash flow ratio is mainly due to the increase in net cash flow from operating a
ctivities in the past five years.
3. The increase in cash reinvestment ratio is mainly due to the increase in net cash flow from operating activitie
s.

Note 1: The net cash flow of operating activities is less than the cash dividend payment. It is not listed.

b) Cash Flow Forecast

b) Cash Flow Forecast b) Cash Flow Forecast b) Cash Flow Forecast b) Cash Flow Forecast
Unit: NT$K
Cash Balance,
beginning of the
year (1)		 Net Cash Flow
from Operating
Activities
(2)		 Estimated net cash
inflow (outflow)
from investment and
financing activities
throughout the year
(3)		 Net Cash Balance
(1)+(2)+(3)		 Remedial Measure
if cash not enough
Investment
plan		 Financial
leverage plan
$3,020,628 544,355 (485,933) 3,079,050 - -
1. Analysis of Cash Flow:
(1) From Operating: Cash flow in for predicting making profits in 2020.
(2) From Investing: Cash flow in for purchasing properties, IPs and R&D tools.
(3) From Financing: Cash flow in forexpected to repay bank loans and distribute dividends, etc.
2. Remedies and LiquidityAnalysis of Inadequate Cash: None.

8.4 Major Capital Expenditure

8.4.1 Major Capital Expenditure and Sources: None.

8.4.2 Benefits from the Capital Expenditure : None.

8.5 Long-Term Investment

Not applicable

8.6 Risk Management

8.6.1 The Impact of Inflation, Foreign Exchange and Interest Rate Fluctuation and Measures to Cope With

  1. Interest Rate: The Company will get more interest expenses when the interest rate rises. The finance division will collect information and evaluate the variation for hedge. Vice versa, the low interest rate will impact interest income. The company will put more cash on highly- returned short-term investment.

  2. Exchange Rate: The selling products are quoted in US dollars. Most of the costs are quoted in US dollars but still some in NT dollars. So the New Taiwan Dollars appreciation will impact the company sales and gross margin. Our major foreign-currency assets are account receivable and time deposits. The company already utilizes mainly forward currency and option contracts to hedge its foreign exchange exposure, so the impact from floating exchange rate will be minimized.

  3. Inflation: The material costs vary timely. The higher manufacture cost and selling pricing which would impact the consumers’ budget for the high-end consumer electronic products. But Sunplus is working hard to develop new products for add-on value and cost-down, and expand the market shares in the emerging markets to relief the slow-down from developed countries.

8.6.2 Internal Policies and Procedure Exist with Respect to High Risk/High Leveraged

159

Investment, Lending/Endorsements and Guarantees for Other Parties, Financial Derivatives Transaction

  1. There is no high risk/high leveraged investment.

  2. The company has made and followed “Sub-procedure of Extension of Monetary Loans to Others”, The loans are made with risk evaluation which follows the procedures. After the loan is granted, the Company follows and traces financial status, business and credit status of the borrower and guarantor frequently, and asks equal collaterals or takes proper actions to secure.

  3. The company has made and followed “Procedure of Endorsement and Guarantees”, and the Endorsement and Guarantees will only be made under well evaluation before granted.

  4. The company has made and followed “Procedure of Engaging in Derivatives Trading “ . The financial transactions of a derivatives nature that Sunplus enters into are strictly for hedging purposes and not for any trading or speculative purposes and under well evaluation.

8.6.3 R&D Plan and Execution

Sunplus Group will keep investing in research and development, therefore, the consolidated R&D costs will account for 25% ~ 35% of consolidated revenues.

Company New Products
Sunplus Technology (1) Automotive entertainment system chip
(2) Smart Cockpit System Chip for Vehicle
(3) Vehicle navigation and driving assistance system platform
(4) Medium and high-end Soundbar system chip
(5) High-speed interface IP
(6) High-performance data converter IP
(7) Analog IP
(8) Industrialcontrolsystemchip based onSunplusPlus1architecture
Generalplus Technology (1) A new generation of speech synthesis control chip
(a) High sound quality and high volume PWM driver
(b) OTP /Flash memory, can quickly update the code
(2) Digital audio and voice recognition control IC:
(a) High-resolution Sigma-Delta ADC recording device
(b) High sound quality Class-D broadcast drive device
(c) Flash memory, can quickly update the code
(3) LCD control IC:
(a) Low-power platform capable of single battery operation
(b) OTP memory, can quickly update the code
(4) Multimedia application control IC:
(a) High-performance Cortex-A series 32-bit platform
(b) More display technologies and interfaces (CVBS, HDMI, MIPI)
(c) Advanced image processing (ISP, GPU, H.264, computer vision and AI
deep learning)
(d) DDR2/DDR3 DRAM interface
(5) Microcontroller:
(a) Cortex-M0 motor drive control IC
(b) Highly integrated wireless charging IC
(c) High-sensitivity touch IC
(6) Other ICs:
(a) Various peripheral chips supporting the main control IC
(b) More complete power control IC
(c)Higherquality audio amplifier IC
Sunplus Innovation Technology (1) Very low power USB image processing IC
(2) USB3.0 4K image processing IC
(3) Image processingIC with intelligentimage detection function
Jumplux Technology (1) Front loading regulation Automotive USB TYPEC PD3.0 Charger IC.
(2) MCU chip and subsystem based on RISC-V instruction set
(3) Endpoint deep learning software and hardware accelerator and its AIOT
application chip

160

8.6.4 Political and Regulatory Environment:

We will keep watch for any further updates and take actions to reduce the impacts on the company.

8.6.5 Advanced Technology

The wafer process technology is moving to smaller geometry. The migrated process technology could keep the chip production cost down but R&D cost up. The company tries to develop higher add-on value and mainstream multimedia products, which mainstream means to produce in huge volume and to share the research and development cost.

8.6.6 Corporate Identify and Image Change

The company takes corporate image seriously. Being people-oriented and having integrity are our top priorities when running our business. We disclose our operation and financial statements to public periodically and transparently in order to save the rights of our shareholders.

8.6.7 Mergers & Acquisitions

None

8.6.8 Expansion of Facilities

None

8.6.9 Suppliers & Customers

The Company separately purchases raw materials from several different suppliers, encapsulation and testing of the foundry is also adopted scattered strategy, to ensure that the output is no problem. The Company's largest sales customers in 2018 and 2019 accounted for 13% and 15% of the total net revenue for the year, no sales focus on the risk of a single customer.

8.6.10 Major Shareholding Change

None

8.6.11 Ownership Change

None

8.6.12 Litigation Proceedings

None

8.6.13 Other Risks

None

8.7 Other Remarks

None

161

==> picture [30452 x 60352] intentionally omitted <==

IX. SPECIAL NOTES 9.1 Affiliates

9.1.1 Affiliated Chart

==> picture [494 x 273] intentionally omitted <==

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

Sunpl us Technology Company
0.03%
0.70%
6.05%
13.69%
6.98%
3.95%
2.09% 1.75%
100% 100% 100% 100% 100% 100% 61.15% 61.13% 34.30% 37.64% 100% 100% 100%
Award Glary Management ConsultingSunplus Ventureplus Sunplus HK Sunplus Venture Lin Shih Sunplus mMobile Sunext InnovationSunplus Generalplus iCatch Wei Young Russell Magic Sky
5.29% -
100% 100% 5.64% 100% 0.10%
Sunny Fancy Ventureplus Mauritius 70 % Generalplus Samoa
Han Yuang 9.55% Sunplus mMedia 72.14% 100%
100% 100% 100 % 3.25% Generalplus
Mauritius
Giant Kingdom Giant Rock Ventureplus Cayman 22.86%
Jumplex
Technology
100% 100%
14.6% 68.8% 100% 93.33% 100% 100% 100% Generalplus Shenzhen Generalplus HK
Technology Co. Ltd.Ytrip Technology ( Beijing)Sunplus Technology Co., Ltd.Sunplus App Sunplus Prof-( Shenzhen) tek Sunplus Shanghai TechnologySunMedia
100%
100 %
Xiamen Xm-
1 culture Co mmunication plus
Co,.Ltd
----- End of picture text -----

162

9.1.2 Affiliated Companies

December 31, 2019 Unit: NT$K, unless other specified

Company Date of
Incorporation		 Place of Registration Paid-in Capital Business
Activities
Sunplus Technology (HK) Co.,
Ltd.		 August 31, 1993 Kowloon, HK HK$11,075,000 (Note) International
Trading
Lin Shih Investment Co.,Ltd. July2,1998 Hsinchu,Taiwan 700,000 Investment
Russell Holdings Ltd. March 11,1998 Cayman US$24,660,000(Note) Investment
Sunplus Venture Capital Co., Ltd. November 20,
1999		 Hsinchu, Taiwan 1,000,000 Investment
Ventureplus GroupInc. July27,2001 Belize 2,526,650 Investment
Ventureplus Mauritius Inc. August 2,2001 Mauritius 2,526,656 Investment
Ventureplus Cayman Inc. September 14,
2001		 Cayman 2,526,661 Investment
Shanghai Sunplus Technology
Co., Ltd.		 December 7,
2001		 Shanghai, China US$17,200,000 (Note) Software
development,
customer
technical
services and
rental business
Sunplus Prof-tek Technology
(Shenzhen) Co., Ltd.		 October 22, 2007 Shenzhen, China US$32,250,000 (Note) Software
development,
customer
technical
services and
rental business
Sunmedia Technology Co., Ltd. January 8, 2008 Chengdu, China US$20,000,000 (Note) IC Sales and
After Service,
Software and
System Design
Sunplus App Technology Co.,
Ltd.		 October 6, 2008 Beijing, China RMB26,000,000
(Note)		 IC Sales and
After Service,
Software and
System Design
Ytrip Technology Co., Ltd. February
18,
2011		 Chengdu, China RMB61,250,000(Note) System and Web
Service
1culture
Communication
Co.,
Ltd.		 February
18,
2013		 Chengdu, China RMB3,250,000(Note) Web Service
Beijing Sunplus-Ehue Tech Co.,
Ltd.		 December11,
2013		 Beijing RMB27,000,000(Note) Software
development,
customer
technical
services and
rental business
Magic Sky Limited September 22,
2010		 Samoa US$10,160,000 Investment
Sunext TechnologyCo.,Ltd. March 13,2003 Hsinchu,Taiwan 635,091 IC Design
Sunplus Management Consulting
Inc.		 October 2, 2003 Hsinchu, Taiwan 5,000 Consulting
WeiYing Investment Co., Ltd. February 13,
2004		 Hsinchu, Taiwan 54,000 Investment
Generalplus TechnologyInc. March 30,2004 Hsinchu,Taiwan 1,088,158 IC Design
Generalplus International
(Samoa)Inc.		 November 12,
2004		 Samoa US$19,090,000 (Note) Investment
Generalplus (Mauritius) Inc. November 25,
2004		 Mauritius US$19,090,000 (Note) Investment
Generalplus Technology
(Shenzhen)Inc.		 March 24, 2005 Shenzhen, China US$18,700,000 (Note) Sales Service

163

Generalplus Technology (HK)
Inc.		 March 21, 2007 Hong Kong US$390,000 (Note) Sales Service
Sunplus mMobile Inc. December 20,
2006		 Hsinchu, Taiwan 162,400 IC Design
Sunplus Innovation Technology
Inc.		 December 14,
2006		 Hsinchu, Taiwan 514,501 IC Design
Sunplus mMedia Inc. April 18,2007 Hsinchu,Taiwan 250,000 IC Design
Jumplux Technology Inc, October 27,2014 Hsinchu, Taiwan 240,000 Design &
Trading
Award GloryLtd. January04,2016 Belize 235,105 Investment
Sunny Fancy Ltd. October 29, 2014 Mahe , Republic of
Seychelles		 235,105 Investment
Giant Kingdom Ltd. January21,2016 Mahé,Seychelles 25,157 Investment
Giant Rock Inc. July 3, 2014 The Mason Complex,
Suites 19 & 20, The
Valley,Anguilla.		 97,279 Investment
Rudong Jiexin Electronic
Technology Co., Ltd.		 February 06,
2019		 Rudong County, Nantong
City, China		 RMB10,000,000(Note) Software
development and
integrated circuit
design
Chongqing Shuangxin
Technology Co., Ltd.		 July 26, 2019 Chongqing, China RMB20,000,000(Note) Software
development and
integrated circuit
design
Worldplus Holdings L.L.C. September 7,
1999		 3500 South Dupont
Highway,Dover,Delaware
19901,U.S.A.		 US$3,600,000(Note) Investment
Business
Lingyao Technology (Shenzhen)
Co., Ltd.		 January 18, 2000 Shenzhen, China RMB19,039,000(Note) Software
development,
rental business
and property
management

Note: End of 2019, exchange rate as ref.: HK$1=NT$3.849 US$1=NT$29.98 RMB$1=NT$4.305

164

9.1.3 Business Scope of Affiliated Companies

Company Business Activities Business Relationship
Sunplus Technology (HK)Co.,Ltd. Trading N/A
Lin Shih Investment Co.,Ltd. Investment N/A
Russell Holdings Ltd. Investment N/A
Sunplus Venture Capital Co.,Ltd. Investment N/A
Ventureplus GroupInc. Investment N/A
Ventureplus Mauritius Inc. Investment N/A
Ventureplus Cayman Inc. Investment N/A
Shanghai Sunplus TechnologyCo.,Ltd. Manufacture and Sales Service China branch
Sunplus Prof-tek Technology (Shenzhen) Co., Ltd. Manufacture, Sales Service and
propertymanagement.		 China branch
Sunmedia TechnologyCo.,Ltd. Manufacture and Sales Service China branch
Sunplus AppTechnologyCo.,Ltd. Sales and IT Education Service China branch
YtripTechnologyCo.,Ltd. System and Web Service China branch
1culture Communication Co.,Ltd. Web Service N/A
BeijingSunplus-Ehue Tech Co.,Ltd. Manufacture and Sales Service China branch
Magic SkyLimited Investment N/A
Sunext TechnologyCo.,Ltd. IC Design Subsidiary
Sunplus Management ConsultingInc. Management Consulting N/A
WeiYingInvestment Co.,Ltd. Investment N/A
Generalplus TechnologyInc. IC Design Subsidiary
Generalplus International(Samoa)Inc. Investment N/A
Generalplus(Mauritius)Inc. Investment N/A
Generalplus Technology (Shenzhen)Inc. Sales Service N/A
Generalplus Technology (HK)Inc. Sales Service N/A
Sunplus mMobile Inc. IC Design Subsidiary
Sunplus mMobile SAS IC Design N/A
Sunplus Innovation TechnologyInc. IC Design Subsidiary
Sunplus mMedia Inc. IC Design Subsidiary
Jumplux TechnologyInc. Software design7 trading Grandson- Subsidiary
Award GloryLtd. Investment N/A
SunnyFancyLtd. Investment N/A
Giant Kingdom Ltd. Investment N/A
Giant Rock Inc. Investment N/A
Rudong Jiexin Electronic Technology Co., Ltd. Software development and
integrated circuit design		 China branch
Chongqing Shuangxin Technology Co., Ltd. Software development and
integrated circuit design		 China branch
Worldplus Holdings L.L.C. Investment Business N/A
Lingyao Technology (Shenzhen) Co., Ltd. Software development, rental
business and property
management		 China branch
December 31,2019 December 31,2019
Company Title Name Shareholding
Amount
(shares)		 Ratio
(%)
Sunplus Technology (HK) Co., Ltd. Chairman
Director		 Sunplus Technology
Chou-Chye Huang (repr.)
Ming-ChengHsieh		 *HK$11,075,000
-
-		 100%
-
-
Lin Shih Investment Co., Ltd. Chairman & President Sunplus Technology
Chou-Chye Huang (repr.)		 70,000,000
-
-
-
-		 100%
-
-
-
-

165

Russell Holdings Ltd. Director Sunplus Technology
Chou-Chye Huang (repr.)		 *US$24,060,000
-		 100%
-
Sunplus Venture Capital Co., Ltd. Chairman & President Sunplus Technology
Chou-Chye Huang (repr.)		 100,000,000
-
-
-
-		 100%
-
-
-
-
Ventureplus Group Inc. Director Sunplus Technology
Chou-Chye Huang (repr.)		 RMB37,900,000
&
US74,605,000
(Note1)		 100%
-
Ventureplus Mauritius Inc. Director Ventureplus Group
Chou-Chye Huang (repr.)		 RMB37,900,000
&
US74,605,000
(Note1)		 100%
-
Ventureplus Cayman Inc. Director Ventureplus Mauritius
Chou-Chye Huang (repr.)		 RMB37,900,000
&
US74,605,000
(Note1)		 100%
-
Shanghai Sunplus Technology Co.,
Ltd.		 Chairman
Director &President
Director
Supervisor		 Ventureplus Cayman
Chou-Chye Huang (repr.)
Zai-De Wang
Tang-Yi Huang
Shu-Lan Wang		 US$17,655,000
(Note1)
-
-
-
-		 100%
Sunplus Prof-tek Technology
(Shenzhen) Co., Ltd.		 Chairman
President
Supervisor		 Ventureplus Cayman
Chou-Chye Huang (repr.)
Tang-Yi Huang
Shu-Lan Wang		 *US$32,250,000
-		 100%
-
Sunmedia Technology Co., Ltd. Chairman
President
Supervisor		 Ventureplus Cayman
Chou-Chye Huang (repr.)
Cheng-Cai Chang
Shu-Lan Wang		 *US$20,000,000 100%
Sunplus App Technology Co., Ltd. Chairman
Supervisor
Director
Director		 Ventureplus Cayman
Chou-Chye Huang (repr.)
Yu-Lun Liu
Shu-Lan Wang
Ya-Fei Luo		 RMB10,000,000
&
USD586,000
(Note1)
-
-
-
RMB438,000		 93.33%
-
1.68%
Ytrip Technology Co., Ltd. Chairman
Director & President
Director
Supervisor		 Ventureplus Cayman
Chou-Chye Huang (repr.)
Cheng-Cai Chang
Yu-Lun Liu
Shu-Lan Wang		 USD3,750,000
(Note1)
-
-
-
-		 38.47%
-
17.5
-
1culture Communication Co., Ltd. E-Director& President
Supervisor		 Ytrip Technology Co., Ltd.
Chen-Tsai Chang
Shao-LingChan		 *RMB$3,250,000
-
-		 100%
-

166

Beijing Sunplus-Ehue Tech Co., Ltd. Chairman
Director
Director
Supervisor		 Ventureplus Cayman Inc.
Chou-Chye Huang (repr.)
Wayne Shen
Shu-Lan Wang
Yin-Chi Chu		 *RMB$27,000,000 100%
Magic Sky Limited Director Sunplus Technology
Chou-Chye Huang (repr.)		 US$10,160,000 100%
Sunext Technology Co., Ltd. Chairman
Director
Director
Supervisor		 Sunplus Technology
Chou-Chye Huang (repr.)
Shu-Lan Wang
Mei-Juan Chen
Wayne Shen		 58,778,442
-
-
-
-
-
-		 100%
-
-
-
-
-
-
-
Sunplus Management Consulting Inc. Chairman Sunplus Technology
Chou-Chye Huang (repr.)		 500,000
-
-
-
-		 100%
-
-
-
-
WeiYing Investment Co., Ltd. Chairman Sunplus Technology
Chou-Chye Huang (repr.)		 5,400,000
-
-
-
-		 100%
-
-
-
-
Generalplus Technology Inc. Chairman
Vice Chairman
Director
Director
Independent Director
Independent Director
Independent Director		 Sunplus Technology
Chou-Chye Huang (repr.)
Shi-Rong Wang (Repr.)
Hou-Shien Chu
Shi-Hao Liu
Chia-Ming Chai
Nai-Shin Lai
Jing-Min Chen		 37,324,304
-
500,000
1,266,752
-
-
-
-
-		 34.30%
-
0.46%
1.16%
-
-
-
-
-
Generalplus International (Samoa) Inc.
Chairman		 Generalplus Technology
Chou-Chye Huang (repr.)		 *US$19,090,000
-		 100%
-
Generalplus (Mauritius) Inc. Chairman Generalplus International
(Samoa)
Chou-Chye Huang (repr.)		 *US$19,090,000
-		 100%
-

(Continued)

167

Company Title Name Shareholding Shareholding
Amount
(shares)		 Ratio
(%)
Lingjia Technology (Shenzhen) Inc. Chairman
Director and General
Manager
Director		 Generalplus International
(Mauritius)
Chou-Chye Huang (repr.)
Zhi-yi Yang
Jian-yi Liu		 *US$18,700,000
-		 100%
-
Generalplus Technology (HK) Inc. Director Generalplus (Mauritius)
Inc.
Yi-XingJia(repr.)		 *US$390,000
-		 100%
-
Sunplus mMobile Inc. Chairman Sunplus Technology
Chou-Chye Huang (repr.)		 16,240,000
-
-		 100%
-
-
Sunplus Innovation Technology Inc. Chairman
Director
Director
Director & President
Director
Supervisor
Supervisor		 Sunplus Technology
Chou-Chye Huang (repr.)
Shu-Lan Wang (repr.)
Wayne Shen (repr.)
Chih-Hao Kung
Lin-Shih Investment
Chi-Ying Chiu
Wen-Chin Li		 31,449,751
-
-
-
2,476,473
1,074,664
527,880
-		 61.13%
-
-
-
4.81%
2.09%
1.03%
-
Sunplus mMedia Inc. Chairman& President
Director
Director
Supervisor		 Sunplus Technology
Chou-Chye Huang (repr.)
Wayne Shen (repr.)
Shu-Lan Wang (repr.)
Lin-Shih Investment		 22,440,723
-
-
-
650,185		 89.76%
-
-
-
2.60%
Jumplux Technology Chairman
Director
Director
Supervisor		 Sunplus mMedia
Chou-Chye Huang (repr.)
Shu-Lan Wang
Mei-Juan Chen
Sunplus Venture Capital		 13,200,000
10,100,000		 55.00%
42.08%
Award Glory Ltd. Chairman Sunplus Technology
Chou-Chye Huang (repr.)		 US$5,642,000
RMB13,400,000
(Note1)
-		 100%
(Note1)
-
Sunny Fancy Ltd. Chairman Award Glory Ltd.
Chou-Chye Huang (repr.)		 US$5,642,000
RMB13,400,000
(Note1)
-		 100%
(Note1)
-
Giant Kingdom Ltd. Chairman Sunny Fancy Ltd.
Chou-Chye Huang (repr.)		 US$772,000
(Note1)
-		 100%
(Note1)
-
Giant Rock Inc.. Chairman Sunny Fancy Ltd.
Chou-Chye Huang (repr.)		 US$1,270,000
RMB13,400,000
(Note1)
-		 100%
(Note1)
Rudong Jiexin Electronic Technology
Co., Ltd.		 Chairman and General
Manager
Director
Director
Supervisor		 Shanghai Sunplus
Technology Co., Ltd.
Zai-De Wang
He-xing Yang
YangZhang		 RM10,000,000
(Note1)		 100%
(Note1)

168

Shu-zhen Zheng
Chongqing Shuangxin Technology
Co., Ltd.		 Chairman
Chairman and General
Manager
Director
Supervisor		 Shanghai Sunplus
Technology Co., Ltd.
Chou-Chye Huang (repr.)
Cheng-cai Zhang
Tang-yi Huang
Shu-lan Wang		 RM11,000,000
(Note1)		 55%
(Note1)
Worldplus Holdings L.L.C. Chairman Sunny Fancy Ltd.
Chou-Chye Huang (repr.)		 US$3,600,000
(Note1)		 100%
(Note1)
Lingyao Technology (Shenzhen) Co.,
Ltd.		 Chairman
General manager		 Worldplus Holdings
L.L.C.
Cheng-cai Zhang
Tang-yi Huang		 RM19,039,000
(Note1)		 100%

*Note: the invested companies are listed the capital paid-in amount of investment

169

9.1.5 Common Shareholders of Sunplus and Its Subsidiaries or Its Affiliates with Actual of Deemed Control

Not Applicable

9.1.6 Operation Highlights of Sunplus Affiliates

December 31st, 2019 Unit: NT$K, except EPS (NT$)

Company Capital Assets Liabilities Net Worth Net Sales Operation
Income		 Net Income
(After Tax)		 EPS
(After Tax)
Sunplus Technology (HK)Co.,Ltd. 42,628 35 0 35 0 (3) (3) N/A
Lin Shih Investment Co.,Ltd. 700,000 793,825 755 793,070 47,621 46,805 43,053 0.62
Russell Holdings Ltd. 739,307 569,284 0 569,284 1,793 (1,665) 5,887 N/A
Sunplus Venture Capital Co., Ltd. 1,000,000 1,049,64
5		 295 1,049,35
0		 53,108 43,421 43,973 0.44
Ventureplus Group Inc. 2,526,650 1,373,86
1		 0 1,373,86
1		 21,496 21,479 21,479 N/A
Ventureplus Mauritius Inc. 2,526,656 1,373,85
9		 0 1,373,85
9		 21,497 21,497 21,496 N/A
Ventureplus Cayman Inc. 2,526,661 1,373,83
7		 0 1,373,83
7		 21,890 21,602 21,497 N/A
Shanghai Sunplus Technology Co.,
Ltd.		 515,656 476,637 48,332 428,305 159,408 53,856 13,082 N/A
Sunplus Prof-tek Technology
(Shenzhen)Co.,Ltd.		 966,855 776,037 19,011 757,026 150,675 (7,009) (29,577) N/A
Sunmedia TechnologyCo.,Ltd. 599,600 979,962 848,882 131,080 279,443 64,475 31,538 N/A
Sunplus AppTechnologyCo.,Ltd. 111,930 8,579 4,345 4,234 16,304 (39,645) 10,628 N/A
YtripTechnologyCo.,Ltd. 263,681 4,066 76 3,990 2,586 (2,544) (2,566) N/A
1culture Communication Co.,Ltd. 13,991 65 0 65 0 (121) (63) N/A
Beijing Sunplus-Ehue Tech Co.,
Ltd.		 116,235 54,806 5,569 49,237 18,225 (2,816) 3,096 N/A
Magic SkyLimited 304,597 32,282 0 32,282 0 (53,193) (53,190) N/A
Sunext TechnologyCo.,Ltd. 635,091 212,646 2,779 209,867 39,236 16,224 19,076 0.30
Sunplus Management ConsultingInc. 5,000 3,768 0 3,768 0 (161) (142) (0.28)
WeiYingInvestment Co.,Ltd. 54,000 49,622 20 49,602 0 (5,258) (5,239) (0.97)
Generalplus Technology Inc. 1,088,158 2,727,76
2		 710,499 2,017,26
3		 2,610,09
9		 218,875 223,584 2.05
Generalplus International(Samoa)Inc. 572,318 475,396 0 475,396 13,484 13,484 13,484 N/A
Generalplus(Mauritius)Inc. 572,318 475,394 0 475,394 13,484 13,484 13,484 N/A
Generalplus Technology (Shenzhen)
Inc.		 560,626 487,507 16,334 471,173 122,634 4,801 13,940 N/A
Generalplus Technology (HK)Inc. 11,692 6,166 1,475 4,691 11,056 (494) (456) N/A
Sunplus mMobile Inc. 162,400 29,686 110 29,576 0 (209) (209) (0.01)
Sunplus Innovation Technology Inc. 514,501 1,267,62
5		 311,173 956,452 972,123 155,851 135,651 2.64
Sunplus mMedia Inc. 250,000 6,369 217 6,152 0 (25,085) (25,068) (1.00)
Jumplux TechnologyInc. 240,000 28,933 23,870 5,063 61,787 (26,632) (26,527) (1.11)
Award GloryLtd. 211,767 160,186 0 160,186 8,497 8,497 8,497 N/A
SunnyFancyLtd. 211,767 160,186 0 160,186 8,497 8,497 8,497 N/A
Giant Kingdom Ltd. 23,145 558 0 558 0 (240) (240) N/A
Giant Rock Inc. 80,694 50,758 0 50,758 11,371 11,371 11,319 N/A
Rudong Jiexin Electronic
TechnologyCo.,Ltd.		 43,050 35,505 7,296 28,209 0 (15,931) (15,033) N/A
Chongqing Shuangxin
TechnologyCo.,Ltd.		 86,100 82,660 7,442 75,218 0 (11,057) (10,973) N/A

170

Worldplus Holdings L.L.C. 107,928 108,870 0 108,870 0 (2,582) (2,582) N/A
Lingyao Technology
(Shenzhen)Co.,Ltd.		 81,963 64,800 7,109 57,691 2,053 (2,572) (2,138) N/A

Note: The financial information of the above business relationship is prepared using the International Financial Reporting Standards.

171

9.1.7 Consolidated Financial Statement of Sunplus Affiliates

Relationship Statement of Consolidated Financial Statements

The Company's 2019(as of January 1, 2019 to December 31, 2019) shall be included in the preparation of the Company's consolidated financial report in accordance with the Guidelines for the preparation of the consolidated financial report and relational report on the relationship between the business combination business report. In accordance with the International Financial Reporting Standards No. 10 should be included in the preparation of parent company consolidated financial report of the company are the same, and the relationship between the consolidated financial statements should be disclosed in the relevant information in the parent company's consolidated financial statements have been exposed, there is no further preparation of the relationship between the consolidated financial report.

Company Name: Sunplus Technology Co., Ltd Person in charge: Chou-Chye Huang

March 30, 2020

331

9.2 Private Placement Securities

Not Applicable

9.3 Status of Sunplus Common Shares/GDRs Acquired, Disposed of, or Held by Subsidiaries

Unit: NT$K, shares

Company Capital Source of
Fund		 %
Owned
by
Sunplus		 Transaction
Date		 Amount of
Acquisition		 Amount
of
Disposal		 Investment
Income		 Balance
(by the
Date of
this
Report
Printed)		 Balance
of
Pledged
Shares		 Balance of
Guarantee
Provided
by
Sunplus		 Balance
of
Financing
Provided
by
Sunplus
Lin Shih
Investment
Co., Ltd.		 $700,000 Self-owned
reserves		 100% 2001.12.25 3,870,196
shares &
$95,605		 - - - None None None
2002.07.02 967,549
shares
Capital
increase
from profits
and capital
surplus		 - - - None None None
2003.07.13 483,774
shares
Capital
increase from
profits and
capital
surplus		 - - - None None None
2004.08.23 532,151
shares
Capital
increase from
profits and
capital
surplus		 - - - None None None
2005.08.23 290,614
shares
Capital
increase from
profits and
capital
surplus		 - - - 2,503,705
shares
Pledged		 None None
2006.08.05 306,132
shares
Capital
increase from
profits and
capital
surplus		 - - - 500,741
shares
Pledged		 None None
2007.03.26 -3,220,429
shares
decreased for
capital
reduction &
32,204		 - - - None None None
2007.09.05 160,538
shares		 - - - 380,000
shares		 None None

331

Capital
increase from
profits and
capital
surplus		 Pledged
2008.09.08 169,471
shares
Capital
increase from
profits and
capital
surplus		 - - - 3,384,446
shares
Solution		 None None
By the date
of this report
printed		 - - - 3,559,996
shares
$63,401		 None None None

332

9.4 Special Notes

None

9.5 Any Events Impact to Shareholders’ Equity and Share Price None

333

Sunplus Technology Co., Ltd. Person in charge: Chou-Chye Huang Published on May 15, 2020

334

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