Stock code: 2401
LSE：SUPD
2018 Annual Report
Sunplus Technology Co., Ltd. Prepared by
Search the annual website: http://mops.tse.com.tw
Date of publication: May 15th, 2019
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: IR@sunplus.com
DEPUTY SPOKESPERSON
Name: Ji-An Zhuang
Title: Investor Relations Manager
Tel: +886-3-5786005
E-mail: IR@sunplus.com
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
I.
II.
III.
LETTER TO SHAREHOLDERS ..................................................................................................................................... 1
COMPANY PROFILE.................................................................................................................................................. 4
2.1 Foundation of Sunplus ........................................................................................................................................... 4
2.2 Milestones ............................................................................................................................................................. 4
CORPORATE GOVERNANCE ..................................................................................................................................... 5
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
IV.
10% Shareholding or More .................................................................................................................................. 50
3.8 Top 10 Shareholders & Related Parties ............................................................................................................... 52
3.9 Long-term Investment Ownership ....................................................................................................................... 53
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
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
IX.
I.
LETTER TO SHAREHOLDERS
BUSINESS REPORT
2018 Business Results
Sunplus consolidated net operating revenue totaled NT$6,078 million and the gross profit were NT$2,429
million in 2018. While R&D expense totaled NT$1,699 million and the G&A expenses were NT$533 million,
marketing expense were NT$287 million, Operating net loss was NT$90 million in 2018. Including total
non-operating net income NT$294million, the profit before tax were NT$204 million. Excluding the income tax
expense NT$62 million, the net profit of the year totaled NT$142 million, attributable to owner of the
Company were NT$6 million which the earning per share after tax for 2017 was NT$0.01.
The net sales from continuing operations in 2018 decline 10.89% compared to the same period last year. Gross
profit margin maintained at approximately 40% comparable to the previous year. The net income outside the
industry was mainly due to the interests of the molecular companies in 2018, which recognized NT$171
million.
The IFRS Consolidated Statement exposes other comprehensive gains and losses in 2018, Including the
difference between the conversion of financial statements of foreign operating institutions, reserve for the
sale of financial assets unrealized gains and losses, determine the number of reassessments of the welfare
plan, the shareholding of related enterprises and joint ventures recognized by equity method, the total net
profit and loss for other consolidated losses in 2018 is NT$131 million. Total after 2018 net profit, the total
consolidated profit and loss in 2017 was NT$11 million, the consolidated profit and loss was attributed to the
loss of NT$121 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 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. Even if the global new car market
grows slower, it will not affect the growth of the system. Will become the main growth driver of Sunplus
Technology's revenue and profit.
The revolutionary breakthrough of the intelligent computing chip Plus1, which greatly reduces the research
and development threshold of high-speed computing, will be the best solution for a small number of different
AIOT new applications, and the popularity of related applications in the future can be expected.
1
Generalplus Technology focuses on consumer electronics chips, the product line includes voice, multimedia,
and microcontrollers, Product development market leadership. The main application products include
interactive toys, education and learning, driving Recorder, Sports DV, Gaming Keyboard and Wireless Charging.
In 2018, the company introduced a new high-end voice controller with built-in 96KB flash memory, 8-channel
12-bit ADC, 8-channel audio synthesis unit and integrated high-power push-pull audio amplifier. In the aspect
of driving recorder, the image recognition hardware acceleration module is strengthened to achieve the
high-speed operation requirement of artificial intelligence for learning and identification. In terms of MCU, the
development and mass production of 32-bit dual-motor control chips was completed. In terms of wireless
charging, the company is compatible with the Apple 7.5W solution, and the QI 15W has also passed the
certification. Currently, the development of the power RX SoC is in the hands.
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. Most of the sales in 2018 came from PC-related mouse keyboard and camera
chip solutions, and a small part came from high-stakes, set-top boxes, rear pull and remote control chips. Will
continue to invest in non-PC applications and maintain PC market share in 2019.
In response to the growing demand for automotive electronics and high-speed storage, Jumplux Technology
has developed ASICs with system customers. In 2018, it focused on the application of Apple CarPlay and Baidu
CarLife and passed the AECQ100 certification to obtain the certification of the car manufacturer.
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.
Generplus Technology's consumer product line has been leading the market for many years, and will launch
new product series such as smart interactive robots and computer vision applications.
In addition to continuing to develop in a more integrated direction, Sunplus Innovation Technology is also
actively developing non-PC related products to establish a foundation for growth and profitability.
Jumplux Technology actively participates in the automotive USB Media Hub to support Apple CarPlay and
Baidu CarLife to meet the needs of the Chinese automotive market. And committed to the development of
UFS bridge chip.
Looking forward to 2019, the haze of the US-China trade war is gradually dissipating, and the unfavorable
factors dragging down the international economy are expected to decrease. However, Trump’s trade
barrierism is still huge, and the uncertainty of the future of the international economy is very high. It will also
affect the overall competition of the technology industry. The company will pay close attention to the changes
in the international economic environment.
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.
2
Improve industry and industry performance, at the same time actively investing in advanced technology, open
up 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,
3
II. COMPANY PROFILE
2.1 Foundation of Sunplus
Sunplus was founded in August 3rd 1990 in Hsinchu, Taiwan.
2.2 Milestones
For the formation of the Company's share capital, please refer to pages 54-57 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
May 2003
Technology to focus on next generation Blue Ray ODD controller
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
Jun 2005
architecture
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
4
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
March 2008
to US$38 million
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
March 2009
Program in China
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
December 2012
Unanimously Mr. Chou-Chye Huang as Chairman
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
June 2015
December 2016
June 2017
March 2018
August 2018
as President of HE BU
Elected the 10th Board of Directors and Supervisors in AGM2015, the BOD re-elected
Unanimously Mr. Chou-Chye Huang as Chairman
Completed TSMC 28nm HPC + IP development and verification
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
Home Entertainment BU has set up a "Smart Computing Project"
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
5
December 2014 The consolidated net sales reached NT$8.71 billion
III. Corporate Governance
3.1 Organization
3.1.1 Organization Chart
6
3.1.2 Major Corporate Functions
Department
Job Description
March 31st, 2019
Chairman Office
CEO Office
Internal Auditor
Home Entertainment Business Unit
Engaging the strategic alliances
(1)
(2) Planning and executing investment plans
(3) Arranging Board of Directors Meetings
(4)
Executing internal auditing plan as routine
Executing and managing the strategic alliances
The planning, promotion and implementation of the Company's integrity
management
Establishing company’s operational strategies, and goals
(1)
(2) Auditing and improving the operating performances
(3) Communicating with investors, public and media
(4)
(5) Managing strategic investments
(1)
(2) Auditing subsidiaries regularly
(3) Auditing special cases
(4) Re-certification auditing of self-examination
(5)
Establishing the internal control system
(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) Maintaining testing software and facility
(1)
Total Management, Plant Management, Procurement, Occupational safety,
Environmental Protection and Administrative Services
Administration Unit
Finance & Accounting Division
Legal & IP Department
Establishing corporate information service to upgrade the productivity
(2) Managing human resources and personnel
(3)
(4) Automating of business process to be more competitive
(5) Consulting for management to making business decisions
(1) Managing finance & accounting affairs
(2) Arranging annual shareholders’ meeting
(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) Conducting contracts & IP management
7
3.2 Directors, and Management
3.2.1 Directors& Supervisors
Title
Name
Date
Elected
Initial Date
Elected
Term of
Office
Chairman & CEO
Chou-Chye Huang
2018.06.11
1990.07.09
3 years
Share holding
When Elected
Amount
92,737,817 15.67
%
Current
Shareholding
Amount
92,737,817 15.67
%
Spouse & Minor
Shareholding
Amount
1,370,993
Educational
Background
%
0.23 M.S., Electrical Engineering,
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
National Tsing Hua
University, Taiwan
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 -
2018.06.11
1990.07.09
3 years
0
0.00
0
0.00
Director
Director
Wen-Ren Su (Global
View Co., Ltd.,
Representative of Legal
Entity)
Wei-Min Lin
Independent Director
Che-Ho Wei
2018.06.11
2009.04.30
3 years
2018.06.11
2009.04.30
3 years
0
0
0.00
0.00
0
0
0.00
0.00
0
0.00 B.S., Accounting, Chinese
Culture University
0
0
0.00 M.S., Accountancy, Jinan
University, China
0.00 Ph.D., Electronic Engineering,
University of Washington,
Seattle, USA
April 12th, 2019/Unit: shares
Positions Currently held in Other Companies (Note 2)
Note 1
Supervisor: Mildex Optical Inc., Hi-Yes Group., E-Pin Optical Inc.
Director: Ability Enterprise, Sunext, Panjit
Independent Director: Ko Ja (Cayman), Biostar
Chairman & General Manager: iCatch
Chairman: ECSC Inc.
Chairman: RADIANT INNOVATION INC.
Chairman: Samoa GLOBAL VIEW HOLDINGS LTD.
Chairman: British Cayman Islands GLOBAL VIEW CO.,LTD
Director: FidoDarts
Director & President: Global View,
Director: Beijing Global View,
Independent Director: Well Shin Technology Co., Ltd.
Supervisor: BEIJING HANDHELD ELECTRONIC TECHNOLOGY
CPA Auditor of Wei-Min Lin Accounting Firm
Independent Director: Fu-Shin holding Cayman
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
CPA and Head of Shengxin CO., CPAs
Independent Director
Yao-Ching Hsu
2018.06.11
2015.06.12
3 years
0
0.00
0
0.00
University of Science and
Independent Director & Compensation Committee: GenMont,
Technology
Sunfon
0
0.00 M.S., Laws, Cornell University,
USA
Charged lawyer of Yuan Qing Patent and Trademark Office
Director: 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.
Chairman & President: Sunext, Sunplus mMedia, Jumplux, Beijing Sunplus-Ehue Tech Co., Ltd.
Director: Pan Wen Yuan Foundation, Sinocon Industrial standards Foundation, SIPP Technology, Inc., iCatch, Global View Co., Ltd., Radiant.
Note 2: None of the Company’s directors is within second-degree of consanguinity, such as a spouse or relative, to each other.
8
3.2.2 Directors and Supervisors' Qualifications and Independence Analysis
Criteria
With over 5 years of working experience and one of the
following professional requirements
Independent Status (Note 2)
April 12th, 2019
Numbers of
other public
companies
concurrently
serving as an
independent
director
1
2
3
4
5
6
7
8
9
10
With an
experience in
commerce, law,
finance,
accounting or
other specialties
necessary to the
Company’s
business
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
Name (Note 1)
Chou-Chye Huang
Wen-Shiung Jan
Wen-Ren Su
(Global View Co.,
Ltd., Representative
of Legal Entity)
Wei-Min Lin
Che-Ho Wei
Tse-Jen Huang
Yao-Ching Hsu
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
2
1
1
1
2
being elected.
(1) Not an employee of the company or its affiliates.
(2) Not a director or supervisor of the company or its affiliates. (This does not apply, however, in case where the position is an
independent director of the company, its parent company, or a subsidiary in which the company holds, directly or indirectly,
more than 50% of shares.)
(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 spouse, relative within the second-degree of consanguinity, or the lineal relative within the fifth-degree of
consanguinity of any of the persons in the preceding three paragraphs.
(5) Not a director, supervisor, or employee of a corporate shareholder that directly holds 5% or more of the total number of the
company’s issued shares or that holds shares ranked as Top 5 in holdings.
(6) Not a director, supervisor, officer, or shareholder holding 5% or more of the shares, of a specified company or institution,
which has financial or business relationship with the Company.
(7) Not a professional individual, owner, partner, director, supervisor, or officer (and a spouse thereof) of a sole proprietorship,
partnership, company, or institution which provides commercial, legal, financial, accounting, and so on, services or
consultation to the company or to its affiliates.
(8) Not a spouse or a relative within the second-degree of consanguinity to other directors of the company.
(9) Not been a person of any condition as defined in Article 30 of the Company Law.
(10) Not a governmental, juridical person or its representative as defined in Article 27 of the Company Law.
9
3.2.3 Major Shareholders of Sunplus’ Shareholders as Legal Entities
a) Global View’s Top 10 Shareholders
Shareholder
Sunplus Technology
HSBC as trustee for Bank of Singapore
Jhih-Yuan Chou
Kai Tian Investment Co., Ltd
Citi bank as trustee for First Securities (HK)
China Trust Commercial Bank is entrusted to keep the investment account of Baofu
Investment Consultant (Hong Kong) Co., Ltd. - Customer Account
Meng-Huei Lin
Shuhui Chen
Yunlong Huang
Yi Jiang Nan Co., Ltd.
b) Remark if the above Major Shareholders as Legal Entities:
Shareholder
HSBC as trustee for Bank of Singapore
Kai Tian Investment Co., Ltd
Citi bank as trustee for First Securities
(HK)
China Trust Commercial Bank is
entrusted to keep the investment account
of Baofu Investment Consultant (Hong
Kong) Co., Ltd. - Customer Account
Yi Jiang Nan Co., Ltd.
Major Shareholders
Not Applicable
Bing Huang Shi
Yi Ye Wu
Not Applicable
Not Applicable
Jiaxi Huang
Jiaqi Huang
April 12th, 2019
Holding
13.06%
9.20%
5.42%
4.9%
3.31%
2.58%
2.47%
2.47%
2.09%
1.75%
Holding
-
50%
50%
-
-
27%
26%
10
3.2.4 Management Team
Title
Country of
Citizenship
Name
Gender Effective Date
Current Shareholding
Spouse’s & Minor’s
Shareholding
Use the Name of
Others to Hold
Shares
Amount
%
Amount
% Amount
%
Educational Background
Positions Currently
held in Other
Companies (Note 5)
Chairman &
CEO
Vice
President
Assistant VP Republic of
Republic of
China
Republic of
China
China
Assistant VP Republic of
China
Chou-Chy
e Huang
Wayne
Shen
Alex
Chang
Jason Lin
Assistant VP Republic of
Michael Su
China
male
male
male
male
male
1990.07.09
92,737,817 15.67
1,370,993 0.23 0
0.00 M.S., Electrical Engineering, National Tsing
Note:1
2005.12.01
2013.07.01
2013.11.01
2018.03.15
969,558
0.16
0
0.00
146,111
0.02
0 0.00 0
0 0.00 0
0 0.00 0
0 0.00 0
Hua University, Taiwan
0.00 EMBA, Technology Management, National
Note:2
Chiao-Tung University, Taiwan
0.00 Master, Industrial Engineering, National
Note:3
Chiao-Tung University, Taiwan
0.00 Master, Industrial Engineering, National
Note:4
Chiao-Tung University, Taiwan
0.00 Master of Electrical Engineering,
-
April 12th, 2019/Unit: shares
With Spouse or Two Parents
Relationship Manager
Job Title
Name
Relationship
-
-
-
-
-
-
-
-
-
-
-
-
2013.03.01
Shu-Chen
Cheng
Republic of
China
Director of
Finance &
Accounting
Division
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.
0 0.00 0
Taiwan
Note:5
36,067
female
0.01
-
-
-
University of Southern California, USA
0.00 Bachelor, Accounting, Tunghai University,
Chairman & President: Sunext, Sunplus mMedia, Jumplux, Beijing Sunplus-Ehue Tech Co., Ltd.
Director: Pan Wen Yuan Foundation, Sinocon Industrial standards Foundation, SIPP Technology, Inc., iCatch, Global View Co., Ltd., Radiant.
Note 2
Director: Sunplus mMobile, Sunplus Innovation Technology, Beijing Sunplus-Ehue Tech Co., Ltd., Jumplux, Sunplus mMedia, Sunext
Supervisor: Lin Shih Investment, Weiying Investment, Sunplus Management Consulting, Sunplus Venture Capital.
Note 3
AVP: iCatch, Sunext, Jumplux, , Shanghai Sunplus.
Director: Rudong Core Electronic Technology.
Note 4
Director: Advanced Vehicle Systems Co., Ltd.
Note 5
Manager: Sunext, Jumplux.
Supervisor: Rudong Core Electronic Technology.
11
3.2.5 Remuneration to Directors, Presidents, and Vice Presidents
a) Remuneration to Directors
Title
Name
(Note 1)
Remuneration to Directors
Remuneration to Directors who hold a Concurrent Post in the Company
Salary (A)
(Note 2)
Pension
(B)
Bonus from Profit
Distribution (C)
(Note 3)
Allowance (D)
(Note 4)
(A)+(B)+(C)+
(D) %of Net
Income
(Note 10)
Salary, Bonus, etc.
(E)
(Note 5)
Pension (F)
Employee Bonus from Profit Distribution (G)
(Note 6)
(A)+(B)+(C)+(
D)
+(E)+(F)+(G)
% of Net
Income
(Note 10)
S
u
n
p
l
u
s
S
u
n
p
l
u
s
S
u
n
p
l
u
s
C
o
n
s
o
l
i
d
a
t
e
d
S
u
b
s
i
d
i
a
r
i
e
s
(
N
o
t
e
7
)
C
o
n
s
o
l
i
d
a
t
e
d
S
u
b
s
i
d
i
a
r
i
e
s
(
N
o
t
e
7
)
C
o
n
s
o
l
i
d
a
t
e
d
S
u
b
s
i
d
i
a
r
i
e
s
(
N
o
t
e
7
)
S
u
n
p
l
u
s
C
o
n
s
o
l
i
d
a
t
e
d
S
u
b
s
i
d
i
a
r
i
e
s
(
N
o
t
e
7
)
Sun
plu
s
Cons
olidat
ed
Subsi
diarie
s
(Note
7)
Sunplus Consolid
Sunplus
ated
Subsidia
ries
(Note 7)
Sunplus
Consolida
ted
Subsidiari
es (Note 7)
Consolidated
Subsidiaries
(Note 7)
S
u
n
p
l
u
s
Cash
Bonus
Stock
Bonus
Cash
Bonus
Stock
Bonus
C
o
n
s
o
l
i
d
a
t
e
d
S
u
b
s
i
d
i
a
r
i
e
s
(
N
o
t
e
7
)
Remuneration
from
Long-term
Investments
Except
Subsidiaries
(Note 11)
Units: NT$, shares
Chairman
Director
Director
Chou-Chye Huang
Wen-Shiung Jan
Global View
Wen-Ren Su
Representative of Legal
Entity
Wei-Min Lin
Che-Ho Wei
Tse-Jen Huang
Yao-Ching Hsu
-
-
-
-
119,384
119,384
2,255,500
2,547,500
42.29
47.48
5,446,316
6,293,072
91,848
91,848
-
-
-
-
140.89
161.17
5,982,829
Director
Independent Director
Independent Director
Independent Director
* In addition to the above table revealed, in the last year, the directors of the Company provided remuneration for the services provided by all the companies in the financial report (such as advisers who are not employees): None.
Remuneration to Directors
Under NT$2,000,000
NT$2,000,000~NT$5,000,000 (Not included)
NT$5,000,000~NT$10,000,000 (Not included)
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)
Total
Remuneration Class
Names of Directors
The total amount of the first four remuneration (A)+(B)+(C)+(D)
Sunplus (Note 8)
Chou-Chye Huang, Wen-Shiung Jan, Global View,
Wen-Ren Su, Wei-Min Lin, Che-Ho Wei, Tse-Jen
Huang, Yao-Ching Hsu
Consolidated Subsidiaries (Note 9) H
Chou-Chye Huang, Wen-Shiung Jan, Global View,
Wen-Ren Su, Wei-Min Lin, Che-Ho Wei, Tse-Jen
Huang, Yao-Ching Hsu
The total amount of the first seven remuneration (A)+(B)+(C)+(D)+(E)+(F)+(G)
Sunplus (Note 8)
Wen-Shiung Jan, Global View, Wen-Ren Su, Wei-Min
Lin, Che-Ho Wei, Tse-Jen Huang, Yao-Ching Hsu
Consolidated Subsidiaries (J) (Note 10)
Global View, Wei-Min Lin, Che-Ho Wei, Tse-Jen
Huang, Yao-Ching Hsu
Chou-Chye Huang
Wen-Shiung Jan, Wen-Ren Su
Chou-Chye Huang
8
8
8
8
Note 1: Names of directors shall be disclosed separately (name of juridical-person shareholders and their representatives shall be disclosed separately), and the remuneration shall be disclosed in total amount. If a director concurrently serves as a president or vice president, his/her remuneration shall be
disclosed accordingly in this table and table c) Remuneration to Management Team.
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.
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.
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.
12
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: It indicates the net income in the most recent fiscal year.
Note 11: a. Whether the Company’s directors receive remuneration from other long-term investments except subsidiaries shall be disclosed as “Yes” or “No”.
b. If “Yes”, the amount of remuneration may be disclosed voluntarily and be included into column I; also, the title of the column shall be change to “All the Long-term Investments”.
c. The remuneration indicated here means the salaries, allowances, bonuses, and other relevant rewards paid by from other long-term investments except subsidiaries.
※The remuneration disclosed here shall not be applied for taxation purpose because those are calculated on a different basis.
b) Remuneration to Management Team
Title
Name
(Note 1)
Salary (A)
(Note 2)
Pension (B)
Reward, Allowance, etc.
(C)
(Note 3)
Sunplus
Consolidated
Subsidiaries
(Note 5)
Sunplus
Consolidated
Subsidiaries
(Note 5)
Sunplus
Consolidated
Subsidiaries
(Note 5)
Bonus from Profit Distribution (D)
(Note 4)
Sunplus
Consolidated Subsidiaries
(Note 5)
Cash
Bonus
Stock Bonus
Cash
Bonus
Stock Bonus
(A)+(B)+(C) +(D)
% on Net Income
(Note 8)
Sunplus
Consolidated
Subsidiaries
(Note 5)
Unit: NT$, shares
Remuneration from Long-term
Investments Except Subsidiaries
(Note 9)
CEO
VP
* 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.
Chou-Chye Huang
Wayne Shen
7,982,800
7,982,800
1,377,716
1,377,716
268,608
268,608
0
0
0
0
171.45
171.45
30,000
Remuneration to Management
Sunplus
(Note 6)
All companies in the financial report (E)
(Note 7)
Names of Presidents and Vice Presidents
Under NT$2,000,000
NT$2,000,000~NT$5,000,000
NT$5,000,000~NT$10,000,000
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
Note 1: Names of presidents and vice presidents shall be disclosed separately, and the remuneration shall be disclosed in total amount. If a director concurrently serves as a president or vice president, his/her remuneration shall be disclosed accordingly in this table and table a) Remuneration to
Wayne Shen
Chou-Chye Huang
Wayne Shen
Chou-Chye Huang
2
2
Directors.
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 indicates the employee bonuses (including cash and stock) paid to presidents and vice presidents according to the proposal of profit distribution submitted by BOD to shareholders’ meeting for approval in the most recent fiscal year. If there is no such proposal yet, the stock bonus may be
calculated according to the stock bonus last year. The amount of stock bonus for public companies shall be calculated at fair value, which means the closing price on the balance sheet date. For private companies, the amount of stock bonus shall be calculated based on the net value on the last
day in the fiscal year when the profit distributed. The term “Net Income” indicates the net income in the most recent fiscal year.
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,
the title of column shall be changed to “Names of Presidents and Vice Presidents”.
Note 8: It indicates the net income in the most recent fiscal year.
Note 9: a. Whether the Company’s presidents and vice presidents receive remuneration from other long-term investments except subsidiaries shall be disclosed as “Yes” or “No”.
b. If “Yes”, the amount of remuneration paid by other long-term investments except subsidiaries may be disclosed voluntarily and included into column E; also, the title of the column shall be changed to “All the Long-term Investments”.
c. The remuneration indicated here means the salaries, allowances, bonuses, and other relevant rewards paid to presidents and vice presidents who concurrently hold posts in other long-term investments except subsidiaries.
※The remuneration disclosed here shall not be applied for taxation purpose because those are calculated on a different basis.
13
c) Employee Bonus Granted to Management Team April 12th, 2019
Title
Name
Shares Bonus Cash Bonus
Sum up
% on Net
Income
Chairman & CEO Chou-Chye
Huang
Wayne Shen
Jason Lin
Alex Chang
Michael Su
Shu-Chen Cheng
Vice President
Assistant VP
Assistant VP
Assistant VP
Director of
Finance &
Accounting
Division
-
-
-
-
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
Remuneration
Director
Supervisor
Management
2017
2018
Amount
% of Net
income(Loss)
Amount
% of Net income
(Loss)
19,254,000
4.57%
12,296,000
218.93%
2. The remuneration is fair compared to peers and the compensations are based on the operation
performance of company and individuals.
14
3.3 Corporate Governance Implementation
3.3.1 BOD Meeting Status
5 meetings were held in 2018 (5 meetings by 10th BOD), 5 meetings by 11th BOD, 10 times in total BOD(A),
and the attendance of directors is as follow:
Title
Name (Note 1)
Chairman
Director
Director
Chou-Chye Huang
Wen-Shiung Jan
Representative of Legal Entity ,
Global View
Wen-Ren Su
Wei-Min Lin
Attendance in
Person (B)
By Proxy
Attendance
Rate B/A (%)
(Note 2)
Remarks
10
9
10
0
1
0
100 Re-election
90 Re-election
Re-election
100
0
10
10
Che-Ho Wei
Tse-Jen Huang
Director
Independent
Director
Independent
Director
Independent
Director
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
100 Re-election
100 Re-election
100 Re-election
100 Re-election
Yao-Ching Hsu
10
10
0
0
0
Board of
Directors
The contents of the motion and
follow-up
Article 14-3 of
the Securities
Exchange Act
Independence
or objection
1. Deloitte United Certified Public
Accountants Internal Adjustment and
Change of Visa Accountant
Discussion.
Opinion of independent directors：None.
v
None
The Company's handling of the opinions of independent directors：None.
Tenth 27th
Board of
Directors
2018.01.31
Resolution results: After the chairman asked all the attendees to pass the
case without objection.
1. Review of the qualifications of
candidates for directors (including
independent directors).
Opinion of independent directors：None.
Note
v
The Company's handling of the opinions of independent directors：None.
Resolution results: (1) In this case, due to their own interests with the
directors, they voted individually and invited the directors under review to
evade participation in the discussion and voting.
(2) Examining the qualifications of Mr. Huang Zhoujie, a candidate for
directorship, because he has a stake in the relationship with Mr. Huang
Zhoujie, the chairman has avoided refusing to participate in the
discussion and voting. Upon the direction of the chairman, Wei Zhe and
the independent director were appointed as the acting chairman.
(3) Except for the directors who refused to participate in the discussion
and voting according to law, the case was approved by the chairman or
the acting chairman after consultation with the remaining attending
directors without objection.
1. The fourth session of the company's
"payroll committee members"
appointed discussion.
Opinion of independent directors：None.
None
v
Tenth 30th
Board of
Directors
2018.04.27
Eleventh 1th
Board of
Directors
15
2018.06.11
The Company's handling of the opinions of independent directors：None.
Resolution results:
(1) The case has its own interests with independent directors and evades
participation in discussions and voting.
(2) Except for independent directors who did not participate in the
discussion and voting according to law, the case was approved by the
chairman after consultation with the remaining attending directors without
objection.
1. The Company transferred the
shareholding of the shares of the
subsidiary icatch and the cash
increase of the share options to all
shareholders of the company for
discussion.
2. Discussion of the company's
directors and functional committees.
3. Discussion on the distribution of
directors' compensation in 2017.
Opinion of independent directors：None.
None
v
The Company's handling of the opinions of independent directors：None.
Resolution results:
1. After the chairman has consulted all the attending directors, they will
pass the case without objection.
2. (1) Except for the general directors who did not participate in the
discussion and voting according to law, the chairman of the agency
consulted all the attending independent directors and passed the
no-objection on the general director's car and horse fees.
(2) Except for the independent directors who did not participate in the
discussion and voting in accordance with the law, the chairman of the
general committee was consulted by the chairman and the car and horse
fees of the independent directors were passed without objection.
3. (1) Except for the general directors who did not participate in the
discussion and voting according to law, the Acting Chairman consulted
all the attending independent directors and passed the nomination of the
general director's remuneration without a dissent.
(2) Except for the independent directors who have not participated in the
discussion and voting in accordance with the law, the chairman of the
general committee is consulted by the chairman, and the remuneration of
the independent directors is passed without objection.
1. Deloitte internal adjustment
exchange visa accountant 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
case without objection.
1. 2019 Accountant Appointment and
Independence Assessment
Discussion.
Opinion of independent directors：None.
None
v
The Company's handling of the opinions of independent directors：None.
Resolution results: After the chairman asked all the attendees to pass the
case without objection.
16
Eleventh 2th
Board of
Directors
2018.07.26
Eleventh 4th
Board of
Directors
2018.11.12
Eleventh 5th
Board of
Directors
2018.12.26
(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. A. On April 27, 2018, the Board of Directors discussed "Review of Candidates for Directors (including
Independent Directors)":
(1). In this case, due to their own interests with the directors, they will vote individually and invite the
directors under review to evade participation in the discussion and voting.
(2). Examine the qualifications of Mr. Huang Zhoujie, a candidate for directorship. Because he has a stake
in the relationship with Mr. Huang Zhoujie, he is not allowed to participate in the discussion and voting
according to law. Upon the direction of the chairman, Wei Zhe and the independent director were
appointed as the acting chairman.
(3). In addition to legally evading directors who did not participate in the discussion and voting, the case
was approved by the chairman or the acting chairman after consultation with the remaining attending
directors without objection.
B. The Board of Directors discussed on June 11, 2007, "The appointment of the fourth member of the
"Wage Remuneration Committee" of the Company":
(1). This case has its own interests with independent directors and evades participation in discussions and
voting.
(2). Except for independent directors who did not participate in the discussion and voting according to law,
the case was approved by the chairman after consultation with the remaining attending directors without
objection.
C. The Board of Directors discussed on July 26, 2007, "The Company's Directors and Functional
Committee Cars and Horses":
(1). In addition to legally evading the general directors who did not participate in the discussion and voting,
the Acting Chairman consulted all the attending independent directors and passed the no-objection on the
general director's car and horse fees.
(2). Except for the independent directors who did not participate in the discussion and voting in accordance
with the law, the chairman of the general committee was consulted by the chairman and the car and horse
fees of the independent directors were passed without objection.
D. The Board of Directors discussed the "2006 Remuneration Distribution of Directors" on July 26, 2007:
(1). In addition to legally evading the general directors who did not participate in the discussion and voting,
the chairman of the agency consulted all the attending independent directors and passed the nomination
of the general director's remuneration.
(2). Except for the independent directors who did not participate in the discussion and voting in accordance
with the law, the general directors of all the attending members were consulted by the chairman, and the
remuneration of the independent directors was passed without objection.
3. The objectives of strengthening the functions of the board of directors in the current and most recent
years (such as setting up an audit committee, improving information transparency, etc.) and performance
assessment.
The company has set up functional committees such as auditing and remuneration, reviewing relevant
proposals in accordance with its authority and submitting resolutions to the board of directors to improve
supervision functions and strengthen management functions. Board members continue to participate in
refresher courses related to corporate governance topics, enriching new knowledge and enhancing
communication to continuously improve 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
2018 First Annual Audit Committee Meeting 5 times, Second Annual Audit Committee Meeting 4
times, 9 times in total (A), the independent directors are listed below:
Title
Name
Attendance in
Person (B)
By Proxy
Attendance
Rate B/A (%)
(Note)
Remarks
Independent
director
Che-Ho Wei
8
1
88.89
17
0
9
Tse-Jen Huang
Yao-Ching Hsu
Independent
director
Independent
director
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.
100.00
100.00
0
9
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 25th Audit
Committee of the
First Session
2018.01.31
1. Deloitte internal adjustment exchange
visa accountant 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 to pass.
1. 2017 the report on the results of the
internal control self-assessment report
and the statement of the internal control
system.
None
v
The 26th Audit
Committee of the
First Session
2018.03.14
2. The fourth quarter of 2017 the
implementation of the budget report and
the 2017 annual financial statements to
discuss the case.
v
3. 2017 consolidated financial statements
discussion
v
None
None
Audit committee resolution results: All members of the Audit Committee
agreed to adopt.
The 1th Audit
Committee of the
Second Session
2018.07.26
The 2th Audit
Committee of the
Second Session
2018.08.08
The Company's handling of the opinions of the Audit Committee：
All attendees agree to pass.
1. The Company transferred the
shareholding of the shares and the cash
increase of the shareholding of the
subsidiary icatch to all shareholders of
the company for discussion.
None
v
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 to pass.
1. The second quarter of 2018 budget
implementation report and the discussion
of consolidated financial statements.
None
v
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 to pass.
18
The 3th Audit
Committee of the
Second Session
2018.11.12
The 4th Audit
Committee of the
Second Session
2018.12.26
1. Deloitte internal adjustment exchange
visa accountant 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 to pass.
1. 2019 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：
All attendees agree to pass.
2. 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 Company's accountant discussed with the independent directors on January 31, 2018, the review of the 2017
financial report before the review of the risk assessment. And for the combined financial report for the fourth quarter
of 2017 and the first to third quarter of 2018 on March 14, 2018, May 14, 2018, August 8, 2018 and November 12,
2018, respectively Check or check results to communicate.
(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.
19
3.3.3 Corporate Governance Implementation as Required by Taiwan Financial Supervisory Commission
Item
1. Formulation of its own corporate governance principles
2. Shareholding Structure and Shareholders’ Rights
1) The way handling shareholders’ suggestions or
disputes
Y
V
V
N
Summary
Implementation Status (Note 1)
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 by authorities in charge.
Difference to “Corporate
Governance Best Practice
Principles for TWSE/GTSM
Listed Companies”
No major Difference
(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.
No major Difference
2) The Company’s possession of major shareholders list
V
(2) The Company and its subsidiaries Generalplus, and Sunplus Innovation through the shares of the agency, master and understand the structure
No major Difference
and the list of ultimate owners of these major
shareholders
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) Risk management mechanism and fire wall between
V
(3) The Company and Sunplus Innovation have a " Relational transaction processing", Generalplus has a "Group Business and Related
No major Difference
the Company and its affiliates
4) Disclosure agreement to prohibit that those insiders
V
may not take advantage of undisclosed information of
which they have learned to engage in insider trading.
3. Composition and Responsibilities of the BOD
1) Board diversity policy
2) Other Functional Committees than Audit committee and
Compensation Committee
3) Regulations governing the board performance evaluation
and implementation
4) Regular evaluation of external auditors’ independency
V
V
V
V
No major Difference
No major Difference
No major Difference
No major Difference
No major Difference
Transactions", the remaining subsidiaries also have various management methods, for the relationship between the business transactions are
clearly defined, to achieve risk control 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.
(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) The Company and its subsidiaries have not yet established a performance appraisal method for the Board of Directors, but not regularly review
the board function, the future will look at the law environment, company operating conditions and management needs, assess the feasibility of
assessing the performance of the board of directors.
(4) The accounting department of the company evaluates the independence of the visa accountant once a year. The company's accounting
department evaluates the visa accountant's diligence. The company's accounting firm Huang Yufeng and Lin political accountant are in line
with the company's independence evaluation criteria (Note 2). Adopted by the Audit Committee and the Board of Directors on December 26,
2018.
Each subsidiary will assess the independence of the visa accountant at the end of the year, and the appointment of the accountant in the
20
4. Is the OTC Company listed in the Corporate Governance
V
Full-time (Part-time) unit or person responsible for
corporate governance related matters (Including but not
limited to providing information required by directors
and supervisors to perform their business, to handle
matters related to the meetings of the Board of Directors
and the Shareholders' Meeting in accordance with the
law, for company registration and change registration,
production of Board of Directors and Shareholders'
Meeting)?
5. Communication channel with Stakeholders (Including but
not limited to shareholders, employees, customers and
suppliers)
6. Engaging professional shareholder services agent to
handle shareholders meeting matters
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)
V
V
V
V
resolution of the board of directors.
The Company and its subsidiaries appoint the Chairman's Office to be responsible for corporate governance matters, to handle matters relating to the
meetings of the Board of Directors and the Shareholders' Meeting, and assist the Company in complying with the relevant laws and regulations of
the Board of Directors and the Shareholders' Association, provide information necessary for the directors to carry out their business, with the latest
laws and regulations related to the development of the company, to assist the directors in following the decree
No major Difference
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. Interested parties can contact the phone, letter, fax and email at any time if necessary.
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
No major Difference
(1) Sunplus and Genealplus have established bilingual corporate website, managed by relevant departments to disclose Company’s financials,
No major Difference
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.
No major Difference
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.
8. Other important information to facilitate better
V
(1) Employee rights: Sunplus and its subsidiaries have made and followed the internal management procedures regarding employee rights under the
No major Difference
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. ):
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) Continuing education record of directors and supervisors: Please refer to Market Observation Post System
(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.
9. 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 2018 years is as follows:
(1) The Company has established a policy of diversification of board members and disclosed the implementation of the diversification policy on the annual report and the company website.
(2) The Company has set up special (part-time) units for promoting corporate social responsibility and corporate integrity management, and explains the operation and implementation of the set-up units in the annual report and
company website, and reports to the board of directors regularly every December.
(3) The company's annual report and website have disclosed the protection measures and implementation of employees' work environment and personal safety.
The other part has not yet been improved and will actively research improvement.
Note 1: Whether or not "yes" or "no" is checked, it should be stated in the summary description field.
21
Note 2: The evaluation criteria for the independence of the Company's accountants are as follows:
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
2. Whether the accountant has a financing or guaranteeing action with the
Company or the directors of the Company
3. Whether the accountant has a close business relationship or potential
employment relationship with the Company
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
5. Whether the accountant has provided non-audit services to the Company
that may directly affect the audit
6. Whether the accountant has any stock or other securities issued by the
No
No
No
No
No
No
Company
7. Whether the accountant has a conflict with the defendant of the Company or
No
on behalf of the Company in coordination with other third parties
8. Whether the accountant has a kinship with the directors, managers or
No
persons who have a significant impact on the audit
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Note 3: The company's stakeholders pay attention to issues and communication methods:
Stakeholder
Concerns
Communication route
Communication frequen
Related records
Staff
client
Agent
Salary, benefits, education, occupational
health and safety
Customer appeal
Staff communication meeting
High-level supervisor mailbox
Employee welfare committee
Labor Retirement Reserves Supervision Committee Once per season
Internal promotion: E-mail, posters, electronic bulletin
board
Employee performance interview
Customer complaints
Once every six months
Irregular
Irregular
2 times a year
Customer complaint case
Irregular
Customer satisfaction
customer satisfaction survey
2 times a year
Meeting record
E-mail
announcement
Meeting record
E-mail, posters, announcements
Performance and Future Development Analysis
Notes / Quality Assurance / Customer Appeal System
Notes/Quality Insurance/Customer Satisfaction Survey System
Foreign document control
Product quality and hazardous substance
requirements
Bad quarters inventory
mail
Bad quarters inventory
Green product requirements
GPM system
Outsourcing factory
Supplier management approach
Supplier management approach
supplier
Government
agencies
Instrument calibration
Compliance
Green environmental compliance
Technology Exchange
Outsourcing factory audit: For the new outsourcing
factory, it will join the company before joining
Outsourcing factory assessment: for the quality /
environmental assessment of existing outsourcing
plants
Annual calibration plan
Document round trip
Official website announcement
Meeting, E-mail
1 time a year
Monthly schedule
Irregular
Irregular
Irregular
Irregular
Notes / Quality Assurance / Customer Appeal System
Quarterly
Report deadlines, new product releases, new
specification requirements
When
company's supply chain
the new outsourcing
factory
joins
the
GPM system
Notes / Quality Assurance / Audit Management System
Notes / Quality Assurance / Audit Management System
Notes / Quality Assurance Department / Instrument Calibration
Management System
Official document
Website download
E-mail, poster
22
3.3.4 Disclosure of Operations of the Company’s Compensation Committee:
1. Qualifications and Independence Analysis
Status(Note 1) Name
Independent
Director
Independent
Director
Che-Ho Wei
Tse-Jen Huang
Yao-Ching Hsu
Independent
Director
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.
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
With over 5 years of working experience and one of the following professional requirements
Independent Status (Note 2)
1
2
3
4
5
6
7
8
Numbers of other public
companies concurrently serving
on compensation committee
Remark
1
2
0
(1) Not an employee of the company or its affiliates.
(2) Not a director or supervisor of the company or its affiliates. (But as a company or its parent company, An independent director who is a subsidiary of the law or local law, not in this limit.)
(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 spouse, relative within the second-degree of consanguinity, or the lineal relative within the fifth-degree of consanguinity of any of the persons in the preceding three paragraphs.
(5) Not a director, supervisor, or employee of a corporate shareholder that directly holds 5% or more of the total number of the company’s issued shares or that holds shares ranked as Top 5 in holdings.
(6) Not a director, supervisor, officer, or shareholder holding 5% or more of the shares, of a specified company or institution, which has financial or business relationship with the Company.
(7) Not a professional individual, owner, partner, director, supervisor, or officer (and a spouse thereof) of a sole proprietorship, partnership, company, or institution which provides commercial, legal, financial, accounting, and so on, services or consultation to the company or to its affiliates.
(8) Not been a person of any condition as defined 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 third salary remuneration committee of the 2018th meeting meets twice, and the fourth salary remuneration committee meets once, for a total of three times (A), membership qualifications and attendance are
as follows:
Title
Name
Convener
Member
Member
Other information required to be disclosed:
Che-Ho Wei i
Tse-Jen Huang
Yao-Ching Hsu
Attendance in Person(B)
3
3
3
By Proxy
0
0
0
Attendance Rate(B/A) (%) (Note)
100
100
100
Remarks
1. The BOD has adopted the proposal by compensation committee without dissent
2. The participated members have approved the resolutions by compensation committee. without dissent
Note 1:
(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.
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):
Item
Y
N
1. Exercising Corporate Governance
1) The company declares its corporate social responsibility
V
policy and examines the results of the implementation.
2) The Company organizes education and training on the
implementation of corporate social responsibility
V
Implementation Status (Note 1)
Summary (Note 2)
Deviations from “Corporate Social Responsibility Best
Practice Principles for TWSE/GTSM Listed Companies”
and reasons
(1) The Company has established a Code of Practice for Corporate Social Responsibility to review its implementation
effectiveness and continuous improvement at any time, and regularly publish corporate social responsibility reports and report
the results of the year to the Board of Directors at the last annual board meeting. Although the subsidiaries have not established
corporate social responsibility policies, they still continue to practice corporate social responsibility. In the future, relevant
policies will be formulated as appropriate.
No major Difference
No major Difference
23
initiatives on a regular basis
3) The company establishes exclusively (or concurrently)
dedicated units to be in charge of proposing and
enforcing the corporate social responsibility policies,
and reporting the BOD
4) The company adopts employee performance evaluation system
combined with corporate social responsibility policies, and that
a clear and effective incentive and discipline system be
established.
2. Fostering a Sustainable Environment
1) The company endeavors to utilize all resources more
efficiently and uses renewable materials which have a
low impact on the environment.
2) The company establishes proper environmental
management systems based on the characteristics of their
industries.
V
V
V
V
3) The company monitors the impact of climate change on
V
its operations and should establish company strategies
for energy conservation and carbon and greenhouse gas
reduction.
3. Preserving Public Welfare
1) The company adopts relevant management policies and
processes complying with relevant laws and regulations and
the International Bill of Human Rights
2) The company provides an effective and appropriate grievance
mechanism and channels with response to any employee's
grievance in an appropriate manner.
3) The company provides safe and healthful work environments
for their employees, and organizes training on safety and
health for their employees on a regular basis.
V
V
V
4) The company establishes a platform to facilitate regular
V
two-way communication between the management and the
employees, and informs employees of operation changes that
might have material impacts by reasonable means.
5) The company establishes effective training programs to
V
foster career skills of their employees' careers
6) In the process of research and development, procurement,
V
(2) The Company conducts regular education and training on corporate social responsibility, the subsidiaries do not have
regular staff social responsibility education and training, but by the promotion of corporate social responsibility related to the
core staff arrangements for external social responsibility education and training, training frequency in accordance with the
staff changes, professional division of labor and standard revision frequency, in the day-to-day business, employees are also
required to comply with the relevant regulations and ethical standards, with a view to achieving the goal of corporate social
responsibility.
(3) The Company for the sound management of corporate social responsibility, the company set up part-time units to promote
corporate social responsibility, responsible for corporate social responsibility policy, system or related management policy
and the specific promotion of the proposed and implemented, and report to the Board on a regular basis. The company's latest
report to the board of directors was on December 26, 2018.
Although the subsidiaries did not set up to promote social responsibility full-time(pare-time) units, but in environmental
protection and related social responsibility activities are spare no effort.
(4) The Company and its subsidiaries have formulated a reasonable remuneration policy, with the staff performance appraisal
system to clear and effective implementation of incentives and disciplinary system.
(1) The Company and its subsidiaries comply with the relevant environmental laws and regulations, actively respond to
resource recovery and classification, and procurement of various high-performance equipment to enhance the energy,
resource efficiency, the other to promote the use of renewable materials, to reduce the impact on the environment. But also to
convey to employees the concept of energy saving and carbon reduction, and the implementation of education and training to
achieve full environmental goals.
(2) The company and its subsidiaries pay attention to environmental management. At present, the company has passed
ISO14001, ISO45001 and TOSHMS environmental protection and occupational safety and health management system
certification, and employs qualified management personnel with higher standards than the laws and regulations. The company
and Lingtong Technology each have a qualified occupational safety and health business executive, a qualified occupational
safety manager and occupational safety and health administrator. The company and its subsidiaries have promoted paperless
operations and the use of energy-saving lamps and water-saving appliances, and actively promoted waste reduction activities,
reduced environmental impact, and used environmentally friendly new refrigerants to avoid ozone layer damage and
simultaneously implement Policy to turn off the lights and save water.
(3) The Company conducts annual greenhouse gas inventory, the Company and the central air-conditioning of the subsidiaries
are controlled by hand, in the temperature does not reach a certain high temperature before the use of reduction, and the use of
intelligent control systems and frequency conversion devices to effectively control the amount of air conditioning, can
immediately detect the environmental needs and automatically adjust the amount of air conditioning, avoid unnecessary
waste. Equipped with electric power automatic control equipment, monitor the use of electricity at any time , to enhance the
efficiency of energy use, reduce power consumption, to achieve energy conservation and carbon reduction and greenhouse
gas reduction of the strategic objectives.
No major Difference
No major Difference
No major Difference
No major Difference
No major Difference
(1) The Company and its subsidiaries comply with the labor laws and regulations, and set relevant working rules, safeguard
employees' rights and interests, and provide information to enable employees to understand their rights and interests.
No major Difference
(2) Sunplus, Generalplus, and Sunplus Innovation have a "Employee Appeals Scheme" setting out the complaint and
handling procedures, construction of employee complaints mechanism and communication channels, to protect
employees' rights. The remaining subsidiaries were held through a labor conference, staff communication will be
coordinated, and set up online views exchange channels, understand the idea of both employers and employees, create a
win-win situation.
(3) The company and its subsidiaries provide facilities and environments that are better than the Occupational Safety and
Health Act. Set up special organizations and personnel according to 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. It also provides regular health checks that are better than the laws and regulations. Provide a
good environment for employees to develop their careers and provide a variety of educational training and training
programs.
(4) The Company and its subsidiaries regularly handle the employee satisfaction survey and staff communication meeting,
understand your colleagues' recognition and understanding of corporate policy.
No major Difference
No major Difference
No major Difference
No major Difference
(5) The Company and the subsidiaries of the Ministry of Human Resources for the development of peer development of a
complete training program, so that colleagues can perform their duties in the existing posts, at the same time, the
No major Difference
24
production, operations, and services, the company establishes
policies and grievance mechanism to protect on consumer
rights and interests
7) The company follows relevant laws, regulations and
international guidelines when marketing or labeling their
products and services
8) Prior to engaging in commercial dealings, The company
assess whether there is any record of a supplier's impact on
the environment and society
V
V
necessary skills for promotion.
(6) The Company and its subsidiaries have customer service management procedures and customer complaints related
treatment, effectively handle customer complaints and provide timely services.
No major Difference
(7) The Company and its subsidiaries are responsible for the marketing and labeling of products and services, comply with
the relevant laws and regulations and international standards of our customers and suppliers.
No major Difference
(8) The Company and its subsidiaries preferred suppliers with environmental responsibility, And have relevant management
9) When The company enters into a contract with any of their
V
methods and conduct regular audits.
No major Difference
major suppliers, the content should include terms stipulating
mutual compliance with corporate social responsibility
policy, and that the contract may be terminated or rescinded
any time if the supplier has violated such policy and has
caused significant negative impact on the environment and
society of the community of the supply source.
4. Enhancing Information Disclosure
1) The company discloses the relevant and reliable
information relating to their corporate social
responsibility on company website and Market
Observation Post System.
(9) All suppliers of the Company are subject to the Company's honest policies, do not receive gifts, rebates, and prohibit
irregular transactions, if there is a breach of the break, in order to the most reasonable offer, the best quality, and the best
service, to achieve the company and suppliers work together to enhance the purpose of corporate responsibility.
Generalplus and suppliers signed by the contract, it is not clear if there is a breach of social responsibility, or other
circumstances that have a significant adverse effect on society, the Company may terminate or terminate the terms of the
Contract, but when the company has a need, the supplier shall cooperate with the terms of the Environmental and Social
Responsibility Letter.
Sunplus Innovation and Jumplux future contract with major suppliers, depending on the actual needs of the content will
include compliance with both sides of the corporate social responsibility policy, and if the supplier is involved in a policy
violation, and have a significant impact on the environment and society of the source community, may terminate or
terminate the terms of the contract at any time.
Sunplus, Generalplus and Sunplus Innovation in the annual report of shareholders to disclose the implementation of social
responsibility information, upload annual report to public information station, You can also contact the public information
station at the company's website.
No major Difference
5. If the Company has its own Corporate Social Responsibility Code in accordance with the Code of Practice for Corporate Social Responsibility of Listed Companies, Please describe the difference between the operation and the code:
The Company has established the Corporate Social Responsibility Code, for related issues such as sustainable management, environmental protection, employee rights, social welfare and related information, Are the internal system of norms.
The subsidiaries have not yet defined the corporate social responsibility policy, but related issues such as sustainable management, environmental protection, employee rights, social welfare and related information, are the internal system of norms.
To fulfill corporate social responsibility, the Company and its subsidiaries will from time to time contribute to environmental protection, social contribution, social services, social welfare, consumer rights, human rights, safety and health and other social responsibility
activities.
6. 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 company implements workplace and worker health and safety care through ISO45001 international occupational safety and health management system and TOSHMS Taiwan occupational safety and health management system.
Note 1: Operation Check whether "Yes" or "No" is checked, should be described in the summary description field.
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.
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.
Item
Y
N
Summary
Implementation Status (Note 1)
1. Promulgation ethical corporate management principles
1) The company shall clearly specify in their rules and external documents
V
the ethical corporate management policies and the commitment by the
board of directors and the management on rigorous and thorough
implementation of such policies
2) The company shall adopt programs to prevent unethical conduct and
V
setting out in each program the standard operating procedures, conduct
(1) The Company and Generalplus have established the “Integrity Operation Procedures and Behavior Guidelines” as a policy and
practice for expressly operating in good faith and a commitment by the Board of Directors and management to actively
implement the operating policies. The Company and Lingtong Technology also publicly disclosed the "Integrity Operation
Procedures and Behavior Guidelines" and related regulations on the public information observatory and the company's website.
The rest of the subsidiaries uphold the "integrity", "creative", "quality", "service" business philosophy, the development of
the company's internal management system and methods, implementation of the implementation of the review.
25
Deviations from “Ethical
Corporate Management Best
Practice Principles for
TWSE/GTSM-Listed
Companies” and reasons
No major Difference
No major Difference
guidelines, penalties, and complaints with respect to the company's
operations and business
3) The company shall establish the prevention programs which business
V
activities within their business scope which are possibly at a higher risk
of being involved in an unethical conduct, and strengthen the preventive
measures
2. Implementation of ethical corporate management
1) The Company shall gain a thorough knowledge of the status of the other
party's ethical management, and shall make observance of the ethical
management policy of this Company part of the terms and conditions of
the contract
2) The Company shall designate the responsible unit with respect to
ethical corporate management of implementation. The BOD shall
monitor the implementation regularly.
3) The Company shall promulgate policies for preventing conflicts of
interests and offer appropriate means to voluntarily explain whether
their interests would potentially conflict with those of the companies.
4) The companies shall establish effective accounting systems and
internal control systems and Internal auditors shall periodically
examine the compliance
5) The company shall periodically organize or engage out-sourcing
training programs of ethical corporate management
3. Whistle-blowing System
(1) The Company shall have in place a formal channel for receiving
reports on unethical conduct, and establish a well-defined
disciplinary and complaint system to handle violation of the ethical
corporate management rules.
(2) The Company
to handle with
Whistle-blowing System and Confidentiality of the identity of
whistle-blowers
set up procedures
shall
(3) The Company shall have measures for protecting whistle-blowers
from inappropriate disciplinary actions due to their whistle-blowing.
4. Disclose of its implementation of ethical corporate management
1) The company shall disclose the status of the enforcement of their own
V
V
V
V
V
V
V
V
(2) Sunplus and Generalplus have separate "Reporting System", "Employees' Code of Ethics", "Director's and Managers' Code of
Ethics", "Reports on Cases of Reporting Illegal and Unethical or Integrity" and "Integrity Management" "Operation Procedures
and Behavior Guide", which clearly defines the relevant operational procedures and behavioral guidelines for preventing
dishonesty, so that in order to keep colleagues aware of the integrity behaviors, the company publishes the regulatory
documents on the ethics of the industry on the company's internal website for colleagues. In addition to the enquiries, the new
colleagues will be promoted through educational courses.
For any suspected violation of professional ethics, if it is confirmed to be true, the offender will take severe disciplinary
measures including termination of employment or business relationship, and take legal action in due course.
The "rules of work" of the subsidiaries are prohibited from breaches of dishonesty, for violation of the provisions of the
punishment and appeals system.
(3) Sunplus and Generalplus have a "Business Operation Procedures and Conduct Guide", it is forbidden to provide or receive
improper benefits. Sunplus have a "prosecution system", Generalplus official website set up online "reporting system",
encourage reporting of any unlawful or breaches of ethical code of conduct or code of conduct. In addition, the company also
requires the employees of the line of management, production centers, business and information units with higher sensitivity to
sign the “Integrity Commitment Letter”; when signing the annual dealer contract with the customer, they sign the “Declaration
of Integrity Act” together; Define the “Integrity Statement” by the relevant supplier based on the annual transaction amount.
The remaining subsidiaries are in the "working rules", the report of the integrity of employees and the disciplinary system,
and through the internal control system effective implementation, to reduce the risk of dishonesty, to guard against the effect.
No major Difference
(1) Sunplus and Generalplus "Integrity Operation Procedures and Behavior Guide" clearly stipulate that the contract should fully
understand the other party's integrity management status when necessary, and incorporate the company's integrity management
policy into the contract terms. In addition, the company has signed an "Declaration of Integrity Act" when signing an annual
distributor contract with a customer since 2006; the relevant supplier has also signed a "Declaration of Integrity" based on the
annual transaction amount.
The remaining subsidiaries use the customer credit line assessment and supplier management operations to carefully assess the
legality of the parties to avoid untrustworthy business activities.
(2) Sunplus and Generalplus for the sound management of the integrity of management, designated chairman of the room to
promote business integrity management unit, responsible for the development and promotion of integrity management
policies and preventive programs. The dedicated unit reports to the board of directors on a regular basis every year in
December.
(3) The communication channels between the Company and its subsidiaries and the management department are smooth, if any
problems are found, can respond to management. In addition to that, responsible for the integrity of the business-related
departments are in accordance with their duties according to the law related matters, to prevent conflicts of interest and to
provide appropriate statements on the operation of the pipeline.
No major Difference
No major Difference
No major Difference
No major Difference
(4) Sunplus, Generalplus and Sunplus Innovation have established an effective accounting system and internal control system for
No major Difference
the implementation of credit management, internal auditors regularly check the implementation of the internal control
system, and through the implementation of self-inspection system, to ensure the effectiveness of the internal control system,
as the basis for the declaration of internal control system, and reported to the board of directors.
(5) Sunplus and Generalplus have a "Business Operation Procedures and Conduct Guide", built-in integrity business in the
corporate culture, and from time to time in the meeting in the publicity. Also in the internal announcement to the company
employees to guide the integrity of operating procedures and conduct guidelines, the implementation of the company in good
faith based on the core values and business philosophy.
In 2018, the company announced the company's integrity policy and conducted tests on its new colleagues, with a total of 46
training records. The remaining subsidiaries implement opportunity education in their daily business, and will organize
educational training in the future according to the company's actual situation.
(1) Sunplus have a "prosecution system", Generalplus has a "report on the handling of cases of unlawful and unethical or
No major Difference
dishonesty", the remaining subsidiaries have a "Employee Appeals Scheme", the Company and its subsidiaries are assigned
to the appropriate admissibility of the person in charge, as a convenient report of the staff when the report.
(2) The Company and its subsidiaries have the relevant reporting and appeals, the contents of the clear report of the operating
No major Difference
procedures and related confidentiality principles.
(3) The procedures for the protection of the prosecutor in the relevant reporting and appeals of the Company and its subsidiaries
No major Difference
Sunplus and Generalplus have placed relevant specifications for integrity management on the company's internal website for the peers to
inquire at any time. The company's external website and the public information observatory's annual report and corporate social
No major Difference
26
ethical corporate management best practice principles on their
company websites
responsibility report also disclose the relevant policy requirements and information of integrity management.
5. If the Company has its own Code of Practice on the basis of the Code of Practice for the Listing of Goodwill Company on Listing, please describe the difference between the operation and the code:
The Company and the subsidiaries and the manufacturers and organizations are uphold the principle of operating integrity.
6. Other important information that helps to understand the operation of the company's integrity: (Such as the company to review and amend the integrity of the business rules and regulations)
The Company and the subsidiaries in good faith as a fundamental, to all employees uphold the spirit of good faith, responsible for investors, customers and society. The company has a complaint, the report letter box, employees who find any violation of the principle of
good faith or harm the company's reputation, can be reported or reported through the Internet. In addition, the Company and the subsidiaries and related manufacturers and partners for long-term cooperation, and express contract, set up relevant full-time staff involved,
Maintain long-term stable cooperative relations.
Note 1: Operation Check whether "Yes" or "No" is checked, should be described 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 14-31), for the Code of Corporate Governance Practices, please
contact our website.
3.3.8 Other Matters Needed to Improve the Company’s Implementation of Corporate Governance:
None
27
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 20th, 2019
Based on the findings of a self-assessment, Sunplus states the following with regard to our internal
control system during January 1st – December 31st, 2018:
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 2018, 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 2018 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 20th, 2019, with all six
attending directors expressing dissenting opinions, and the remainder all affirming the content of this
statement.
Sunplus Technology Co., Ltd.
Chou-Chye Huang
Chairman& CEO
28
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
2018 The implementation of the resolution of the shareholders' meeting
Date
2018.06.11
Decision
Maker
Shareholders’
Meeting
2018.09.12
First
shareholder
temporary
meeting
Resolution matters and implementation
1. To recognize the Company's 2017 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 2017 earnings distribution case.
Implementation of the situation: Proposed on July 19, 2018 for the ex-dividend
basis, August 09, 2018 is the date of payment (Cash dividend of $.5533 per share)
3. Through capital accumulation and cash.
Implementation of the situation: Proposed on July 19, 2018 for distributing base
date, August 09, 2018 is the date of payment (Distributary capital reserve of
$.1467 per share).
4. Election of the 11th Board of Directors.
Implementation of the situation:
Director elected: Chou-Chye Huang, Wen-Shiung Jan, Global View Co., Ltd.,
Wei-Min Lin
Independent director elected: Che-Ho Wei, Tse-Jen Huang, Yao-Ching Hsu
The list was elected and announced on June 11, 107 at the public information
observatory.
5. By lifting the restrictions on the new directors of the company.
Implementation of the situation: Effective from the resolution of the shareholders'
meeting.
1. Through the Company's shareholding of the subsidiary icatch, the shareholding
and cash increase of the shareholding transfer to all shareholders of the company
for discussion.
Implementation of the situation: Effective from the resolution of the shareholders'
meeting.
2018 and as of the date of publication of the annual report of the board of directors important matters
Date
Decision
Maker
Case
Result
2018.05.14 Board Meeting 1. Discussion on the consolidated financial
statements for the first quarter of 2018.
2018.06.11 Board Meeting 1. Chairman's selection.
2. The fourth session of the company's
"payroll committee members" appointed
discussion.
29
After the chairman's consultation, all
the attending directors passed the case
without objection.
Mr. Wen-Shiung Jan, the director of
the case, nominated Mr. Chou-Chye
Huang as the chairman of the board of
directors of the company. All the
attending directors unanimously
agreed that Mr. Chou-Chye Huang is
the chairman of the company.
1. This case has its own interests with
independent directors, and evades
participation in discussions and voting
according to law.
2. In addition to legally evading
independent directors who did not
participate in the discussion and
voting, the case was approved by the
chairman after consultation with the
remaining attending directors without
objection.
After the chairman's consultation, all
the attending directors passed the case
without objection.
1. Upon the direction of the Chairman,
Che-Ho Wei and the acting director of
the independent directors, in addition
to legally evading the general directors
who did not participate in the
discussion and voting, were consulted
by the acting chairman to attend all the
independent directors, and the general
director’s remuneration was passed
without objection.
2. Except for the independent directors
who did not participate in the
discussion and voting in accordance
with the law, the chairman of the
general committee was consulted by
the chairman, and the remuneration of
the independent directors was passed
without objection.
After the chairman asked all the
attendees to pass the case without
objection.
After the chairman asked all the
attendees to pass the case without
objection.
In this case, the remuneration of
directors were determined as the total
amount of compensation, there is no
decision on the amount of personal
compensation, so there is no need to
avoid the benefits. After the chairman
asked all the attendees to pass the
case without objection.
After the chairman asked all the
attendees to pass the case without
objection.
2018.07.26 Board Meeting 1. The Company transferred the
shareholding of the shares and the cash
increase of the shareholding of the
subsidiary icatch to all shareholders of the
company for discussion.
2. The company’s first shareholder
temporary meeting in 2018 was discussed.
3. Discussion on the distribution of
directors' compensation in 2017.
2018.08.08 Board Meeting 1. Consolidated financial statements for the
second quarter of 2017.
2018.11.12 Board Meeting 1. Summary of financial statements for the
third quarter of 2017.
2019.03.20 Board Meeting 1. Discussions on the remuneration of
employees and the distribution of directors'
remuneration in the year of 2018.
2. Discussion case of summary of
consolidated financial statements for 2018.
3. Discussion case of Business Report for
2018.
4. Discussion case of Surplus distribution
for 2018.
5. Deal with the capital reserve distribution
cash discussion case.
6. Discussion on "Restrictions on
Canceling the Competition of Directors of
the Company".
7. Dissolution of the restrictions on the
competition of managers of the company.
8. The convening of the ordinary
shareholders 'meeting in 2019 and the
discussion of the shareholders' proposal.
30
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
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
Deloitte & Touche
Zheng-Zhi Lin
Zheng-Zhi Lin
Yi-Xin Gao
Yu-Feng Huang
Duration of auditing
2018.01.01~2018.09.30
2018.10.01~2018.12.31
Remarks
Amount
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
Item
Audit fee
Non-audit fee
Total
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
November 12, 2018
Replace reason and
explanation
Deloitte & Touche internal business transfer
The description was
litigant
terminated or not accepted
situation
by the appointor or
Proactively terminate the
accountant
appointment
Accountant
Appointed person
Not applicable
No longer accept (continue)
appointment
31
Opinions and Reasons for
Examining Check Reports
Other than Unqualified
Opinions within the Latest
Two Years
The 2018 and 2017 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.
Accounting principles or practices
Financial report disclosure
Yes
Check the scope or steps
Is there any disagreement
with the issuer
Others
Other disclosures
(The first to fourth heads of
Article 10, paragraphs 6 to
7 should be disclosed)
No
Instructions
No
32
3.5.2 About Succession Accountant
Office name
Deloitte & Touche
Accountant's name
Zheng-Zhi Lin、Yu-Feng Huang
Date of appointment
November 12, 2018
Pre-appointment accounting for specific
transactions
Treatment methods or accounting
principles and
No
Financial report may issue opinions
Consultation and results
Successor Accountant to Former
Accountant
No
Written opinions on different opinions
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.
33
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
2018
Ended of April 12th, 2019
Unit: Shares
Title
Name
Shareholding
Increased
(decreased)
Shares
Pledged
(Released)
Chou-Chye Huang
Chairman& CEO
Global View Co., Ltd.
Director
Wen-Shiung Jan
Director
Wei-Min Lin
Director
Independent Director Che-Ho Wei
Independent Director Tse-Jen Huang
Independent Director Yao-Ching Hsu
VP
Director of Finance &
Accounting Division
AVP
AVP
AVP
Wayne Shen
Shu-Chen Cheng
Alex Chang
Jason Lin
Michael Su (Date of appointment:
March 15, 2018)
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Shareholding
Increased
(decreased)
0
0
0
0
0
0
0
0
0
0
0
0
Shares
Pledged
(Released)
0
0
0
0
0
0
0
0
0
0
0
0
3.7.2 Stock Trade
Name
(Note 1)
-
Transfer
Reason
-
Transaction
Date
-
Name of
Counter Party
-
Nature of
Relationship
-
Amount of
Shares
-
Transaction
Price
-
Ended of April 12th, 2019
Percentage
of Shares
Pledge
-
Transaction
Price
-
3.7.3 Shares Pledge with Related Parties
Name
(Note 1)
-
Reason of
Pledge
(Note 2)
-
Date of
Change
-
Name of
Counter
Party
-
Nature of
Relationship
Amount
of Shares
-
-
Percentage
of
Shareholding
-
Note 1: Including Directors, mangers and shareholders holding more than 10%
Note 2: Reasons for shares pledged or released
34
3.8 Top 10 Shareholders & Related Parties
Name
Current
Shareholding
Shareholding under
Spouse & Minor
Amount
of Shares
Holding
%
Amount of
Shares
Holding
%
Shareholding
under
Others’ Name
Amount
of
Shares
Holding
%
Chou-Chye Huang
De-Zhong Liu
Global View Co.,
Ltd.
92,737,817 15.67%
1,370,993
0.23%
13,045,795
2.20%
2,006,943
0.34%
10,038,049
1.70%
-
-
0
8,083,160
0.00%
1.37%
0
771,433
0.00%
0.13%
7,732,825
1.31%
-
-
7,000,000
1.18%
1,647,542
0.28%
6,588,620
1.11%
6,073,153
1.03%
-
-
-
-
Zhi-yuan Zhou
(Representative of Legal
Entity)
Chih-Hao Gong
Polunin Emerging
Markets Small Cap
Fund, LLC
Wen-Qin Lee
Dimensional
Emerging Markets
Value Fund
Citigroup (Taiwan)
Commercial Bank
is entrusted with the
DFA Investment
Diversified Group's
Emerging Markets
Core Portfolio
Investment Account
Chase Managed
Advanced Starlight
Advanced General
International Stock
Index
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Relationship with
related-parties
Name
Relationship
Global
View
-
Chou-Chye
Huang
Corporate
Director
-
Corporate
Director of
Global View
Co., Ltd.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,294,000
0.89%
-
-
-
-
35
3.9 Long-term Investment Ownership
Long-term
Investments (Note)
December 31st, 2018/Unit: thousand shares, %
Sunplus Investment
Shareholding of Director,
Supervisor, Management or
Subsidiary
Synthetic Shareholding
Amount of
Shares
Holding %
Amount of
Shares
Holding%
Amount of
Shares
Holding %
91
34
31,450
58,050
37,324
-
14,892
3,979
Sunext Technology
Generalplus Technology
Sunplus Innovation
Technology
iCatch Technology Inc.
Sunplus mMedia Inc.
Jumplux Technology
Global View Co., Ltd.
Broadcom Inc.
Note: Except companies listed above, all other long-term investments are held by the parent company.
20,735
22,441
13,200
8,229
-
5,354
2,559
10,100
30
90
55
13
-
8
10
42
-
-
173
-
-
14
8
61
58,050
52,216
35,429
26,089
25,000
23,300
8,402
-
91
48
69
38
100
97
13
-
36
IV. Capital & Shares
4.1 Capitalization
Month/Year
Price
(NT$)
Authorized capital
Shares
(thousand
shares)
Amount
(NT$K)
Issued capital
Shares
(thousand
shares)
Amount
(NT$K)
Funding
(NT$K)
08/1990
10
2,300
23,000
620
6,200 Cash
08/1990
10
2,300
23,000
1,150
03/1992
10
2,300
23,000
2,300
Offering
6,200
11,500 Cash
Offering
5,300
23,000 Cash
Offering
11,500
April 12th, 2019
Remark
Funding
Except
Cash
None Not IPO yet
Note
None Not IPO yet
None Not IPO yet
12/1993
10
6,000
60,000
6,000
60,000 Cash
None Not IPO yet
Offering
20,900
Capitalization
of Profits
16,100
09/1994
10
19,800
198,000
19,800
198,000 Cash
None Not IPO yet
06/1995
10
39,600
396,000
39,600
Offering
60,000
Capitalization
of Profits
78,000
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
None
of Profits
247,600
06/1997
10
105,500 1,055,000
105,500 1,055,000 Capitalization
None
of Profits
411,400
06/1998
10
184,000 1,840,000
184,000 1,840,000 Capitalization
None
of Profits
785,000
06/1999
10
269,120 2,691,200
269,120 2,691,200 Capitalization
None
of Profits
851,200
06/2000
10
600,000 6,000,000
370,000 3,700,000 Capitalization
None
of Profits
1,008,800
09/2000
10
600,000 6,000,000
390,000 3,900,000 Cash
None
06/2001
10
700,000 7,000,000
Offering for
GDR 200,000
534,000 5,340,000 Capitalization
of Profits
1,440,000
06/26/1996 SFC
No. 40155
06/10/1997 SFC
No.46641
06/08/1998 SFC
No.49408
06/23/1999 SFC
No.57760
06/03/2000 SFC
No.48003
09/18/2000 SFC
No 72620
None
06/27/2001 SFC
No 140791
12/2001
10
700,000 7,000,000
544,742 5,447,424 Merger from
None
Grandtech
10,742
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
37
of Profits
957,334
And Capital
Surplus
544,742
07/2003
10
1,000,000 10,000,000
777,504 7,775,040 Capitalization
None
of Profits
130,590
And Capital
Surplus
694,950
06/2004
10
1,000,000 10,000,000
875,254 8,752,544 Capitalization
None
of Profits
355,500
And Capital
Surplus
622,004
07/2005
10
1,050,000 10,500,000
945,570 9,455,700 Capitalization
None
of Profits
487,576
And Capital
Surplus
175,051
Employee
Stock Option
40,529
11/2005
10
1,050,000 10,500,000
948,147 9,481,472 Employee
None
Stock Option
25,772
03/2006
10
1,050,000 10,500,000
948,730 9,487,297 Employee
None
Stock Option
5,825
06/2006
10
1,050,000 10,500,000
949,784 9,497,844 Employee
None
Stock Option
10,547
06/2006
10
1,200,000 12,000,000 1,021,358 10,213,578 Capitalization
None
of Profits
508,844
And Capital
Surplus
189,230
Employee
Stock Option
17,660
11/2006
10
1,200,000 12,000,000 1,022,777 10,227,773 Employee
None
01/2007
10
1,200,000 12,000,000
Stock Option
14,195
512,212 5,122,119 Capital
Reduction
5,114,358
Employee
Stock Option
8,703
No.129546
05/22/2003 SFC
No.0920122560
06/15/2004 SFC
No.0930126644
07/11/2005 FSC
No. 0940127940
TSE
No.09400288741
TSE
No.09400340711
TSE
No.09500052761
TSE
No.09500116511
FSC
No.0950126238
TSE
No.0950030505
None
FSC
No.0950159014
03/2007
10
1,200,000 12,000,000
512,954 5,129,537 Employee
None
Stock Option
7,418
09/2007
10
1,200,000 12,000,000
554,240 5,542,399 Capitalization
None
of Profits
288,622
And Capital
38
TSE
No.0960005441
FSC
No.0960038299
Surplus
102,415
Employee
Stock Option
21,825
11/2007
10
1,200,000 12,000,000
556,051 5,560,514 Employee
None
Stock Option
18,115
03/2008
10
1,200,000 12,000,000
556,750 5,567,504 Employee
None
Stock Option
6,990
05/2008
10
1,200,000 12,000,000
556,893 5,568,931 Employee
None
Stock Option
1,427
09/2008
10
1,200,000 12,000,000
598,203 5,982,028 Capitalization
None
of Profits
301,637
And Capital
Surplus
111,092
Employee
Stock Option
368
02/2009
10
1,200,000 12,000,000
596,910 5,969,099 Treasury
None
03/2014
10
1,200,000 12,000,000
591,995 5,919,949
Stock
write-off
12,929
Treasury
Stock
write-off
4,915
TSE
No.0960037136
TSE
No.09700075761
TSE
No.09700142371
FSC
No.0970036239
TSE
No.0980003591
None
TSE
No.13000058351
Issued Shares
Authorized Capital
Treasury Stock
Shares
Un-issued
Shares
April 12th, 2019/Unit: shares
Total
Remark
591,994,919
0
608,005,081
1,200,000,000
Type
Common
Share
39
SHELF REGISTRATION
Shares
Expected to Issue
Total
Shares
N/A
N/A
Type
N/A
Amount Amount
Price
N/A
N/A
Issued Shares
Objective and
Expected Benefit
of Issued Shares
Expected time
of Un-issued
Shares
Remark
N/A
N/A
N/A
4.1.1 Composition of Shareholders
Shareholder
Amount
Governmen
t
Financial
Institutions
Others
Juridical
Person
Foreign
Institutions
and natural
Person
Domestic
Retail
investors
April 12th, 2019/Unit: share
Treasury
Stock
Total
243
4
0
0
0.0%
69,414
101,048 23,290,373 72,748,075 495,855,423
83.76%
Persons
Shares
Shareholding
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.
69,795
0
0 591,994,919
100.00%
12.29%
3.93%
0.02%
0.0%
134
4.1.2 Distribution Profile of Shareholder Ownership – Common Share
April 12th, 2019/Par value per share: NT$10
Shareholding Ownership
Number of Shareholders
(persons)
Shares Owned
(shares)
Holding
(%)
1~999
1,000~5,000
5,001~10,000
10,001~15,000
15,001~20,000
20,001~30,000
30,001~40,000
40,001~50,000
50,001~100,000
100,001~200,000
200,001~400,000
400,001~600,000
600,001~800,000
800,001~1,000,000
Over 1,000,001
Total
32,496
25,386
5,977
1,645
1,392
1,032
460
370
555
277
111
27
15
15
37
69,795
2,482,505
58,349,509
48,679,201
20,822,296
26,275,357
26,761,174
16,637,635
17,286,584
41,028,198
38,843,864
31,828,781
13,434,860
10,649,780
13,902,221
225,012,954
591,994,919
0.42%
9.86%
8.22%
3.52%
4.44%
4.52%
2.81%
2.92%
6.93%
6.56%
5.38%
2.27%
1.80%
2.35%
38.00%
100.00%
4.1.3 Distribution Profile of Shareholder Ownership – Preferred Shares
Not Applicable
40
4.1.4 Major Shareholders
Shareholding
Name
Chou-Chye Huang
De-Zhong Liu
Norges Bank
Global View Co., Ltd.
Chih-Hao Gong
Polunin Emerging Markets Small Cap Fund, LLC
Wen-Qin Lee
Dimensional Emerging Markets Value Fund
Citigroup (Taiwan) Commercial Bank is entrusted
with the DFA Investment Diversified Group's
Emerging Markets Core Portfolio Investment Account
Chase Managed Advanced Starlight Advanced
General International Stock Index
Shares Owned
Holding %
April 12th, 2019
92,737,817
13,045,795
11,426,000
10,038,049
8,253,160
7,732,825
7,000,000
6,588,620
6,073,153
15.67%
2.20%
1.93%
1.70%
1.39%
1.31%
1.18%
1.11%
1.03%
5,294,000
0.89%
4.1.5 Net Worth, Earnings, Dividends, and Market Price per Share
Year
2017
2018
Item
Market Price
Net Worth
Highest
Lowest
Average
Before Distribution
After Distribution
Weighted Average Shares
Earnings Per Share
Dividends Per Share
Return on Investment
EPS (Note 2)
Before Adjustment
After Adjustment
From Profits
From Surplus
Cash Dividends
Stock
Dividends
Accumulated Undistributed Dividends
Price/Earnings Ratio (Note 3)
Price/Dividend Ratio (Note 4)
Cash Dividends Yield Rate (Note 5)
20.20
11.00
14.52
15.15
14.45
588,434,923
0.72
0.72
0.70(Note6)
-
-
-
20.17
20.74
0.05
19.00
9.66
14.24
14.30
(Note1)
588,434,923
0.01
(Note1)
(Note1)
(Note1)
(Note1)
(Note1)
1,424.00
(Note1)
(Note1)
Ended of
March 31st,
2019
14.10
10.85
12.38
14.42
(Note1)
588,434,923
0.01
-
-
-
-
-
1,238.00
-
-
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$ 0.1467 per share, and the surplus is calculated as surplus NT$ 0.5533 per share, totaling NT$
0.70 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 2018
Board’ proposal waiting for shareholders’ approval :(1).legal reserve NT$561,634 (2)Special reserve
N$241,172,672 (3) No dividends are available for distribution this year
c) The proposed capital reserve of the shareholders' meeting is cashed out
The Company's capital reserve for the year 2018 was cashed out, was approved by the board of
directors on March 20, 2019 (not yet passed by the shareholders' meeting), it is proposed to allocate
more than NT$213,118,171 of the capital reserve of the excess amount of the issued amount of the
41
issued shares to the shareholders, shareholding of the cash register on the basis of the capital reserve,
NT$0.36 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) BOD Proposal to Distribute Profits as Bonus to Employees, Directors, and Supervisors
The BOD meeting proposed to distribute the profits in 2018
Cash bonus to Employee NT$79,590
Cash bonus to Directors NT$119,384
c) Bonus to Employees, Directors, and Supervisors for last fiscal year
Approval by shareholders’ meeting on June 11th, 2018, the company decided to distribute the profits
of 2016
Cash rewards to Employee NT$4,322,651
Cash bonus to Directors NT$6,483,975
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
42
4.4 Issuance of GDR
Item
Issuing Date
Issuance & Listing
Total Amount
Offering Price per Unit
Issued Units
Underlying Securities
Common Shares Represented
Rights and Obligations of GDR holders
Trustee
Depositary Bank
Custodian Bank
GDRs Outstanding
Issuing Date
March 16, 2001
March 31st, 2018
March 16, 2001
London Stock Exchange Listed
US$191,400,000
US$9.57
14,737,222.5
Offering 20,000,000 new shares of common stock of par
value NT$10
29,474,455 Common Shares
Same as common share holders
N/A
The Bank of New York
Mega International Commercial Bank
176,225 units
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 by Sunplus
Apportionment of the expenses for the issuance and
maintenance
Terms and Conditions in the Deposit Agreement and
Custody Agreement
-
Closing price
per GDRs
2018
January 1 to March 31, 2019
Highest
Lowest
Average
Highest
Lowest
Average
US$1.27
US$0.64
US$0.952
US$0.91
US$0.71
US$0.798
4.5 Employee Stock Options Plan
4.5.1 Issuance of Employee Stock Options and Its Impact to Shareholders Equity
4.5.2 Stock Option to Management Team and Top 10 Individual
4.6 Restricted Employees Stock
Not applicable
4.7 Mergers and Acquisitions
Not Applicable
V. Financial Plan & Implementation
Not Applicable
43
VI. Business Highlight
6.1 Business Activities
6.1.1 Business Scope
a) Major Business
CC01080 Manufacturing of electronic component
I501010 Product Designing
F401010 International Trading
I301010 Software Design Services
I301020 Data Processing Services
R&D, Manufacturing, Testing, Selling of
(1) ICs
(2) modules
(3) Application software
(4) IPs
(5) Trading and Agency Business of ICs
4 Product Segments and Sales Amount
Product Categories
Amount
Percentage %
2018
Unit: NT$K, %
IC income
Other
Total
5,663,059
414,674
6,077,733
93.18
6.82
100.00
6.1.2 Plan to develop new products (services)
Company
Plans to develop new products
(1) Car entertainment system chip
(2) Vehicle smart cockpit system chip
(3) Vehicle navigation and driving assistance
system flat
Sunplus Technology
(4) Medium and high-order Soundbar system
Generalplus Technology
chip
(5) High-speed interface IP
(6) High - performance data converter
(7) Analog IP
(1) Consumer product line
More audio channel / voice and image
output higher resolution / support higher
data compression rate / built-in more
standard interface (standard interface) /
low operating voltage and low power
(low power) of the product
(2) Multimedia product line
Provides high, medium and low order
multimedia IC solutions, focusing on
high-speed CPU / DSP performance,
high-resolution image compression,
playback and storage technology
(3) MCU product line
Home appliances, handheld devices, PC
and other peripheral applications related
to the microcontroller, charging
microcontrollers, high-performance
brushless motor microcontrollers and
other related products
(1) High integration, multi-function
Sunplus Innovation Technology
micro-controller
(2) High-integration, multi-functional optical
44
mouse system integrated chip
(3) Wireless mouse, wireless keyboard and
intelligent remote control overall solution
(4) USB3.0 Advanced 8Mp NB/Web Cam
Controller IC
(5) USB3.0 3D NB/Web Cam Controller IC
(6) USB2.0 Low Power NB Cam Controller
IC
(1) H.265 UHD (4K) / SHV (8K) SoC chip
products: used in ultra-high quality, high
compression, high performance, low
power image processing products
(2) High-speed interface IC: to provide
high-speed, high-quality transmission
interface, to connect multiple video
recorders. Used in 360-degree panoramic
video car and monitor the market demand
(1) Advanced high - end process ultra - high
quality Blu-ray read - only storage
control chip
(2) Multi-channel optical storage servo
motor drive control chip
iCatch Technology
Sunext Technology
6.1.3 Industry Overview
a) Industry Status and Exhibition
2018 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 2018 outstanding performance, 2019 will remain
growing 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
Sunplus
IC products used in DVD players,
automotive information and
entertainment systems, and
authorized high-speed interface IP,
high-performance data converter IP
and analog IP
45
Product development trends and competitive
situation
Sunplus is currently focuses on the
development of 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 (IVI),
BoomBox, SoundBar, portable entertainment
systems and other products. There is also a
high-speed interface, data converters and
analog IP licenses. As depots gradually
introduce ADAS applications, Goldman Sachs
Research Department pointed out, the current
ADAS penetration rate in Europe, America
and Japan is only 8-12%, and estimated
2015~2025 ADAS annual compound growth
rate up to 42%, Barclays Securities estimates
that ADAS penetration will exceed 25% by
2020, future related applications will be more
popular, Sunplus will become the main
revenue and profit growth momentum.
Foreign European and Japanese
semiconductor manufacturers and domestic
MediaTek as the main competitor. In the
product development of car infotainment
systems, it focuses on the application of
mobile internet, such as Apple CarPlay and
Google Android Auto. This application, as
shown on Apple's official website, is currently
available on more than 500 models, showing
its growth trend. Extending Sunplus's IVI
system advantages and customer channels, we
are also developing smart cockpit applications
to meet the trend of automotive integration and
intelligent architecture design. In addition, we
have also found that AI technology is
maturing. It is expected that AI will be widely
used on various devices, including consumer
products and automotive products. So now
Sunplus has also invested resources to explore
the possibility of AI applications, so that future
products can use AI. The introduction of
technology provides consumers with a better
experience.
In the intelligent interactive toys and
educational learning platform products and
competitors compared, the company's special
wisdom interactive technology and complete
the total solution favored by customers, and
technology leadership and response quickly
known, will raise the threshold of
competition, and leading the industry to
launch 16/32 bit platform, and provide
customers with complete development tools
and libraries, it is easy to develop content , to
achieve the competitor is not easy to achieve
interactive features, the leading position in the
industry.
Optical mouse image sensor main suppliers to
the original phase technology-based, MCU
major suppliers to Holtek, Sonix, Elan and the
company mainly. The company's leading
industry has introduced a high-integrated
wired optical mouse single chip, provide
Total solution for customers with wired and
wireless handsets, and become a major
supplier of optical mouse optical chips. NB
Camera IC leading manufacturers for the
domestic Sonix Technology and Realtek, the
company in the plug-in Webcam product
competition, has been the major international
manufacturers, including Logitech (Logitech)
and other quality recognition, as its long-term
Generalplus
A.Consumer IC :
1. 8/16-bit LCD control IC
2. 8/16/32-bit voice / music control
IC
3.16-bit SMS / caller ID
B. Multimedia IC
1. 16/32-bit MCU/DSP
JPEG/MPEG/H.263/H.264
Decoder/Encoder
C. MCU IC
1.Remote control IC
2. Motor Control IC
3. Industrial Control IC
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
46
iCatch
1. H.264 FHD SoC chip products:
Used in H.264 video compression,
high resolution digital camera with
high resolution and high frame rate
(FHD DSC), wearable carriage,
carriage recorder (Car Cameras), IP
and Sport
Security Cameras
Cameras.
2. Mjpeg HD SoC chip products:
For
low-cost HD DSC, Sport
Cameras, Car Cameras, IP Security
Cameras,
3. ISP SoC chip products: Used in
Tablet PC, Smart Phone required
video recording function.
Sunext
Light storage control chip
Multi-channel digital motor driven
chip
the public
trend. But
cooperation with the supplier.
Medium and low order digital cameras are
driven by mobile devices, resulting in global
digital camera sales continue to show a
downward
for
high-performance video and video products
demand continues to introduce new, equipped
with H.264 / H.265 video compression, high
resolution and high frame rate of high-end
digital camera, wearable camera, sports video
recorder, driving recorder and IP camera
growth of five applications can be expected.
Digital video and imaging system single chip
core technology threshold high, the main
competitor is only Ambarella.
and
gradually
With the Ultra HD Blu-ray (Ultra HD BD)
standard specification, with 4K TV strong
promotion
popular,
ultra-high-definition Blu-ray player will be
4K film and television content broadcast the
main medium. Ultra-high-definition Blu-ray
player servo control chip has been officially
mass production, Sunext will become the
opportunity to grow revenue. In addition,
develop
Hong Yang
and
chip
multi-channel digital motor-driven
final
is
products,
integration and
commercialization system
core
customer
the
technology will be
the
development of Sunext, and hope to become
the automation industry integration program
of the best supply partners.
stage,
the basis
recognition
entering
actively
the
for
6.1.4 Technology and Development
a) R&D expenditure
Year
2018
Ended March 31st, 2019
Unit: NT$K, %
1,699,345
28%
357,494
30%
Item
Expense
Percentage to Revenue
b) R&D Accomplishment
Company
Sunplus
Accomplishment
H.264 decoder
MPEG2/4 decoder
Servo Control
HDMI DVD
JPEG decoder
Video encoder
47
Applications
1. Automotive information
and entertainment system
chip
2. Car Play / Android Auto
platform products
3. Automotive smart
cockpit platform products
4. ADAS system platform
5. Medium and high-order
Soundbar system chip
6. High-speed interface IP
7. High - performance data
converter
4-ch Voice/Music IC
LCD Controller
8-ch Voice synthesizer
USB audio controller
SoC for dash cam supporting HD 720p
SoC for dash cam supporting HD 1080p
Remote controller with LCD controller integrated
High anti - interference touch IC
Wireless charging controller
1.MCU for mouse/KB controller, remote controller
2.ISP for PC camera, NB cam, web cam, etc
3..Low power
microcontrollers
4.Wireless transmission technology with voice input
and 3D navigation
5. USB2.0 to SATAII bridge
6. Face and gesture identification IC
JPEG encoding
MPEG4 encoding
H.264 encoding
H.265 encoding
USB DVD-RW SoC
Optical servo controller for CD/DVD/BD
consumption high
integration
8. Analog IP
RISC CPU
ARM Coretex-M4 32bits
CPU
MCU for home appliance,
wireless charger, etc.
MCU, highly integrated
optical mouse controller,
wireless mouse/KB
controller, USB3.0 Web
cam controller , USB 2.0
low power NB cam
controller, etc.
H.265 UHD SoC
high speed interface
control
UBD
motor driver
Generalplus
Sunplus
Innovation
Technology
iCatch
Sunext
6.1.5 Business Plan
Short-term business plan:
Sunplus is focusing on developing automotive wafer products and system platforms, Has
launched advanced driver assistance system (ADAS) wafer platform products. Successfully
developed single-chip products and system solutions for audio products such as CarPlay/Android
Auto AV system, Boombox, and Soundbar, and portable audio/video entertainment systems. It
also provides IP authorization such as high-speed interface, data converter and analogy. As
ADAS related systems have been successively included in the implementation of legislation in
various countries, front-line depots have also introduced ADAS applications. Market adjustment
agencies estimate that ADAS's annual compound growth rate can reach 35%. Barclays Securities
further predicts ADAS penetration rate by 2020. Will exceed 25%, future related applications
will become more popular, and will become the main growth driver for Sunplus's revenue and
profit. In the product development of car infotainment systems, it focuses on the application of
mobile internet, such as Apple CarPlay and Google Android Auto. Such applications, such as
Apple's official website, have been carried by more than 500 models, showing its growth trend.
Sunplus will successively launch its successor products to meet the needs of customers after
loading and front loading. In addition, in the home market, Sunplus also supplies global
well-known brand customers Soundbar and audio products system single chip, and continues to
work closely with audio and audio codec manufacturers to integrate advanced audio processing
technology into Sunplus' system platform. To provide a good experience for end consumers.
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
48
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 computer peripheral application development,
products include PC man-machine interface chip, webcam chip, optical sensor, RF wireless
transmission chip, remote control IC, etc. Most of the 2017 sales amount came from PC-related
mouse keyboard and camera chip solutions, and a small percentage of it came from
high-calibration and remote control chips. Because the PC and notebook market has shrunk and
the competition in the industry is fierce, Sunplus Innovation Technology's 2017 earnings decline.
After resource adjustment and expansion of new product lines, we hope to increase the
proportion of non-PC-related products such as Gao Paiyi wireless remote control and on-vehicle
cameras, and return to a stable growth track after 2018.
Inc. product research and development focuses on
low-power,
iCatch Technology
high-efficiency, superior HD video compression and image quality, combined with low-cost
structure. R&D chips are widely used in smart phones, tablet PCs, wearable cameras, driving
recorders, drones, digital cameras and IP cameras. Currently actively researching and developing
OpenCV with 28nm low-power advanced process, 4K UHD ultra-high resolution, H.265 video
compression and instant computer vision. Consumer demand for high-performance video and
imaging products is constantly being improved, and the high-resolution and high-frame-rate
related image processing chip market will have very large room for growth. This is also the main
focus of the iCatch Technology Inc. future market and operational growth. And aiming to
become a world-class leader in digital video and imaging system chip solutions.
Sunext Technology has gradually adjusted its product lines, committed to the development of
new technologies and new products, and strived to improve operational efficiency. In recent
years, the company has been operating near profit and loss. Ultra-high-definition Blu-ray player
servo control chip has been officially mass production, with the Ultra HD BD standard
specification confirmed, consumer demand for 4K ultra-high-definition content, will become the
growth of Sunext revenue opportunities. In addition, Sunext actively develops multi-channel
digital motor drive chip products and is entering the stage of final commercialization system
integration and customer recognition. This core technology will be the basis for the development
of Hongyang, and it is expected to become the best supplier of automation industry integration
solutions.
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
Area
Asia
Taiwan
Unit: NT$K, %
Amount (NT$K)
Percentage (%)
2018
4,067,191
1,908,470
66.92
31.40
49
Others
Total
b) Market Share
102,072
6,077,733
1.68
100
In the 2018 Taiwan IC design industry, the value of innovation in output value reached NT$625.1 billion,
a 10.2% increase from the previous year. Digitimes Research analyst Chai Huanxin said that Taiwan's IC
design output value is expected to continue in 2019, but the largest application of smart phone market
shipments may not be easy to pick up, in contrast, panel driver IC and AI, 5G and other new applications
will be relatively growth. The company's 2018 consolidated revenue was NT$6.08 billion, with a market
share of approximately 9.7%.
c) Demand and Growth
According to the MIC, the demand for special application chips (ASIC) is rising in 2019, and Taiwan IC
design related companies are expected to benefit. Senior industry analyst Ye Junxiu pointed out that
ASIC chip demand has always existed, but from 2018, the demand increase has been observed. In the
past, mainstream demand was centered on 3C, but with the development of the Internet of Things, the
product category is moving towards diversified development, including AI. Development has also
opened up the market demand for cloud and terminal inference of customized chips. Under this wave of
demand, Taiwanese companies are expected to benefit from the simultaneous benefits. In addition to the
existing IC design service providers, traditional IC design vendors can also accumulate the bottom layer
in the past. IP provides the foundation for the development of ASIC services, with advanced process
development experience to provide services.
According to Ye Xixiu, senior industry analyst at MIC, the IC design service revenue in Taiwan has
maintained a growth of about 10% year-on-year. This shows that demand is still growing steadily,
although ASIC is not a high overall proportion, but customized services. Maori is also attracting many
traditional IC design companies. Take Taiwanese factory dynamics as an example. In the past, IC design
service providers such as Creative and Zhiyuan provided ASIC design services. Now, MediaTek and
Sunplus have established ASIC departments to develop their own IP and high-end process chips through
long-term accumulation. The ability to assist customers in the development of unique application chips,
and further expansion of applications beyond the 3C market. In the process part, the package is
transmitted through the SiP module type, integrating sensors of different processes such as sensors,
memory, and processing cores to improve the efficiency of the wafer and bring about wafer diversity. In
view of this, Lingyang has invested a relatively large amount of resources in the intelligent computing
project (Plus1) IC development in the past few years, which can be applied to AI. As customers
gradually understand acceptance and market demand increases, sales will have an opportunity to grow
year by year.
Company
Product
Demands
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 2020, future related
applications will become more
popular, Strategy Analytics
predicts ADAS output will exceed
26 billion U.S. dollars by 2020.
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
Sunplus
Car infotainment &ADAS
Generalplus
Education and learning toys
50
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.
In recent years, the rapid
development of electronic chips
and a large number of various
sensors used, so that toys are no
longer just dull and passive
amusement equipment, but with a
lot of sound and light effects and
interactive features of interesting
products, at the same time in the
smart phone, flat on the Apps
game popular, toy manufacturers
also follow the trend of the
launch of interactive toys with
Apps, but also caused another
wave. At present, toy
manufacturers are striving to
develop the interactive electronic
toys, at the same time with a
variety of strong movies, TV
animation, so that each year has a
high degree of electronic toys
growth, At present, the annual
turnover of intelligent interactive
toys of the Company can reach
hundreds of millions of pieces,
for the highest market share of IC
design company.
The development of wireless
charging technology, has now
gradually become standardized.
According to the market regulator
IHS iSuppli forecast 2015 will
exceed 100 million units of
electronic devices equipped with
wireless charging function. IHS
also statistics, Global Wireless
Receiver and Transmitter Market,
Is expected to grow from 25
million in 2013 to 1.7 billion in
2023, a number of mobile phone
manufacturers have been
imported wireless charging, the
market will continue to be
optimistic.
Driving record total 720P market
size in 2014 has exceeded 10
million units, while the 1080P
Intelligent interactive toys
Wireless charging
Driving recorder market
51
part of the show doubled growth,
2014 has exceeded 8 million
units, coupled with the demand
for dual photographic lens
gradually rise, it is expected that
there will still be a lot of room for
growth in the market in the next
few years.
PC laptop market shrunk by
nearly 10%, Competition in the
same industry is more intense,
resulting in PC peripheral
applications based HID
man-machine interface device
market, declining state. In the
Tablet PC with smart home
appliances will be very promising
market direction. 5Mp and 8Mp
Tablet PC with Internet Camera
is a new demand and technical
ability to upgrade, the company
has been in this direction of
high-end video products into
research and development, create
new products and applications for
tablets. Also actively increase the
non-PC-related product lines
such as high-shot wireless remote
control and car camera, reduce
the dependence on the PC
market.
The public for high-performance
video and video products to
improve demand, equipped with
H.264 / H.265 video
compression, high resolution and
high frame rate of high-end
digital cameras, wearable
cameras, driving recorders and IP
camera growth of the four
applications can be expected, the
four major application market
from 2013 to 2017 annual growth
rate will be more than 35%.
Major TV manufacturers strongly
promote of 4K TV, in order to
maintain the 4K video content
playback quality and consumer
viewing effect,
Ultra-high-definition Blu-ray
player (UHD BD Player) will be
4K film and television content
broadcast the main media. So
ultra-high-definition Blu-ray
servo control chip will have the
opportunity to gradually grow in
the future.
Sunplus Innovation
Keyboard, mouse, and remote
control
PC / NB cam
iCatch
High - order digital camera
Wearable camera
Driving recorder
IP camera
Sunext
Ultra HD Blu-ray player
52
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, so 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.
(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.
53
6.2.2 Product Applications and Development Flow
a) IC Development Flow
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
Quality and supply stability,
long-term cooperation, the supply
situation is good.
Wafer
A, B, D
54
Product Spec.Product Spec.IC Design& LayoutIC Design& LayoutSystem Design& CodingSystem Design& CodingTape OutTape OutMask MakingWafer FoundryWaferC.P. TestingWaferC.P. TestingPackagingFinal TestingAfter SalesServiceAfter SalesServiceProduct Spec.Product Spec.IC Design& LayoutIC Design& LayoutSystem Design& CodingSystem Design& CodingTape OutTape OutMask MakingWafer FoundryWaferC.P. TestingWaferC.P. TestingPackagingFinal TestingAfter SalesServiceAfter SalesService
6.2.4 Major Customers and Suppliers in the Recent Two Years
a) Major Customers
2017
2018
End of March, 31, 2019
Unit: NT$K
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
B
C
Others
Net sales
1,083,925
798,635
658,358
4,279,319
6,820,237
15.89
11.71
9.65
62.75
100.00
No
No
No
B
C
A
Others
Net sales
763,906
652,318
622,701
4,038,808
6,077,733
12.57
10.73
10.25
66.45
100.00
No
No
No
C
B
D
Others
Net sales
176,974
141,158
116,392
745,076
1,179,600
15.00
11.97
9.87
63.16
100.00
No
No
No
b) Major Supplier
2017
2018
End of March, 31, 2018
Supplier
Purchasing
Value
% of Total
Purchasing
Relation with
Sunplus
Supplier
Purchasing
Value
% of Total
Purchasing
Relation
with Sunplus
Supplier
Purchasing
Value
% of Total
Purchasing
A
B
C
Others
Net purchase
1,098,986
324,802
222,943
1,116,224
2,762,955
39.78
11.76
8.07
40.39
100.00
No
No
No
A
B
C
Others
Net purchase
953,504
233,065
192,493
1,075,991
2,455,053
No
No
No
38.84
9.49
7.84
43.83
100.00
A
C
B
Others
Net purchase
150,156
35,312
34,234
161,984
381,686
39.34
9.25
8.97
42.44
100.00
Unit: NT$K
Relation
with
Sunplus
No
No
No
55
6.2.5 Production
Year
Capacity
Product
Multimedia ICs
IC income
Total
Note: Sunplus out-sourced production to wafer foundries, so there is no capacity limitation.
714,121
18
714,139
-
-
-
2017
Output
Value
Capacity
4,134,661
20,307
4,154,968
Unit: thousand pcs, NT$K
2018
Output
643,298
17
643,315
-
-
-
Value
3,670,886
23,111
3,693,997
6.2.6 Sales
Product
IC income
Other ICs
Total
Year
2017
Unit: thousand pcs, NT$K
2018
Local
Export
Local
Export
Quantity
Sales
Quantity
Sales
Quantity
Sales
Quantity
Sales
227,505
-
227,505
2,104,660
49,630
2,154,290
477,832
-
477,832
4,049,749
616,198
4,665,947
189,206
-
189,206
1,894,980
13,490
1,908,470
386,708
52
386,760
3,768,079
401,184
4,169,263
6.3 Personnel Structure
Workforce Structure by Job Function
Year
R&D
Production
Administration
Total
Average Age
Average Years Served
Workforce Structure by Education Degree
Ph.D.
Master
Bachelor
Other Higher Education
High School
Total
2017
911
115
392
1,418
32.7
5.14
1%
40%
48%
7%
4%
100%
56
2018
757
72
333
1,162
36.9
6.88
1%
38%
50%
7%
4%
100%
End of
March 31, 2019
746
73
328
1,147
37.6
7.86
1%
38%
47%
10%
4%
100%
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 (2015-2017) were 4957.23, 4681.77, and
4283.61 (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 0.06% (2017 category 1 was 2.94 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.
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.
Employee's workplace is automatically checked and monitored on a regular basis to ensure the safety
of employees, the environment and equipment.
In addition, new employees are free of physical examination, and work related to labor health check
according to Article 20 of the Occupational Safety and Health Act and the Labor Health Protection
Rules, providing employees with comprehensive health checks to ensure that each employee can
master their own health.
Since April 2018, the occupational safety and health management system has been promoted, and the
management system verification audit has been completed. At the same time, ISO 45001:2018
(Occupational Health and Safety Management Systems) and CNS15506:2011 (TOSHMS, Taiwan
Occupational Safety and Health Management System) Taiwan Occupational Safety and Health
Management System, two occupational safety and health management systems certification.
57
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
Lease of Land
Lease of office
Counter Party
Hsinchu Science Park
Administration
Hsinchu Science Park
Administration
Term
Content
Restriction
1995/8/01-2034/12/31
Lease of Land
Self-use
2012/01/01~2018.12.31
Lease of office
-
Licensing
KPENV
2006.Feb ~
IP Licensing
Licensing
Broadcom International
2008.Feb ~
IP Licensing
Licensing
ARM Limited
2007.12.27 ~
ARM7 TDMI-Score
Licensing
ARM Limited
2010.06.01 ~
CORETEX-A8 Score
Licensing
ARM Limited
2008.03.09 ~
ARM926EJ-Score
Subject to
agreement
Subject to
agreement
Only
license
Generalplus
Only
license
Generalplus
Only
license
Generalplus
58
VII. Financial Statements
7.1 Condensed Financial Statement and Auditors’ Opinions by adopting
IFRSs
7.1.1 Condensed Balance Sheet by adopting IFRSs-Consolidated
Year
Recent 5 Years (Note 1)
2014
(Note 3)
2015
2016
2017
2018
Unit: NT$K
End of
March 31,
2019
(Note 4)
278,188
196,131
191,024
193,481
8,037,727 8,705,229 8,792,142 8,561,910 6,638,302 6,362,687
3,490,672 3,563,095 2,265,910 2,164,154 2,052,359 2,059,763
169,359
3,012,857 3,137,202 3,379,946 2,557,784 3,057,802 3,380,721
14,819,444 15,599,007 14,629,022 13,479,979 11,926,984 11,972,530
2,709,677 2,740,858 3,045,403 2,190,116 1,684,729 1,399,863
(Note 2)
2,709,677 3,267,733 3,134,084 2,517,667
1,070,564 1,632,909
603,710
646,578
3,836,100 4,373,767 3,940,845 2,836,694 2,059,378 2,003,573
(Note 2)
3,836,100 4,900,642 4,029,526 3,164,245
(Note 2)
374,649
(Note 2)
178,521
895,442
Item
Current Assets
Fixed Assets
Intangible Assets
Other Assets
Total Assets
Current
Liabilities
Non-Current Liabilities
Total
Liabilities
Equity Attributed to
Before Distribution
After Distribution
Before Distribution
After Distribution
Shareholder of the parent
Before Distribution
After Distribution
Capital Stock
Capital Surplus
Retain
Earnings
Unrealized Gain (Loss) on
Financial Merchandise
Cumulative translation
adjustments
Unrealized Net Loss on the
Costs of Pensions
Total
Equity
Before Distribution
After Distribution
9,324,318 9,530,012 9,024,254 8,966,236 8,465,942 8,538,080
5,919,949 5,919,949 5,919,949 5,919,949 5,919,949 5,919,949
805,187
1,813,177 2,444,655 2,012,196 2,336,709 2,250,839 2,255,899
(Note 2)
1,813,177 1,917,780 1,923,515 2,009,158
(Note 2)
801,398
897,317
911,110
936,051
835,241
309,932
331,492
244,400
(62,262)
(442,843)
(379,554)
(63,401)
(63,401)
(63,401)
(63,401)
(63,401)
(63,401)
1,598,388 1,695,228 1,663,923 1,677,049 1,401,664 1,430,877
10,365,512 11,225,240 10,688,177 10,643,285 9,867,606 9,968,957
(Note 2)
10,365,512 10,698,365 10,599,496 10,315,734
(Note 2)
Note 1: Figures are audited by adopting IFRSs
Note 2: Distribution is waiting to be approved in Shareholders’ Meeting
Note 3: Figures are audited and adjusted by adopting IAS19
Note 4: Figures are reviewed by CPA adopting IFRSs
59
7.1.2 Balance Sheet by adopting IFRSs- Standalone
Year
Recent 5 Years (Note 1)
Unit: NT$K
Item
Current Assets
Fixed Assets
Intangible Assets
Other Assets
Total Assets
Current
Liabilities
Before
Distribution
After Distribution
Non-Current Liabilities
Total
Liabilities
Before
Distribution
After Distribution
Equity Attributed to
Shareholder of the parent
Capital Stock
Capital Surplus
Retain
Earnings
Before
Distribution
After Distribution
Unrealized Gain (Loss) on
Financial Merchandise
Cumulative translation
adjustments
Unrealized Net Loss on the
Costs of Pensions
2014
(Note 3)
3,213,839
775,098
200,631
7,055,589
11,245,157
1,154,078
2015
2016
2017
2018
3,273,115
744,937
67,742
7,279,247
11,365,041
836,984
3,267,397
722,145
68,497
6,465,991
10,524,030
898,923
2,942,735
682,943
62,141
6,055,212
9,743,031
604,818
1,909,420
687,187
86,495
6,268,285
8,951,387
413,663
1,509,276
766,761
1,920,839
1,363,859
998,045
1,835,029
987,604
600,853
1,499,776
932,369 （Note 2）
71,782
171,977
485,445
776,795
2,276,037
2,361,904
1,588,457
1,104,346 （Note 2）
5,919,949
936,051
2,221,787
5,919,949
897,317
2,444,655
5,919,949
911,110
2,012,196
5,919,949
835,241
2,336,709
5,919,949
801,398
2,250,839
1,866,589
309,932
1,917,780
331,492
1,923,515
244,400
2,009,158 （Note 2）
(442,843)
(62,262)
(63,401)
(63,401)
(63,401)
(63,401)
(63,401)
-
-
-
-
-
9,324,318
Total
Equity
Before
Distribution
After Distribution
Note 1: Figures are audited by adopting IFRSs
Note 2: Distribution is waiting to be approved in Shareholders’ Meeting
Note 3: Figures are reviewed and adjusted by adopting IAS19
9,003,137
9,530,012
8,969,120
9,024,254
8,935,573
8,966,236
8,465,942
8,638,685 （Note 2）
60
Unit: NT$K
End of
March 31,
2019
(Note 4)
7.1.3 Condensed Income Statement adopting IFRSs -Consolidated
Year
Recent 5 Years (Note 1)
2014
(Note
2&3)
2015
2016
2017
2018
7,871,515 8,465,833 7,556,045 6,820,237 6,077,733 1,179,600
504,577
3,314,401 3,522,625 3,202,488 2,736,766 2,429,384
236,391
(43,558)
(89,790)
-
-
-
47,185
272,506
551,228
886,956
552,876
856,125
566,540
272,506
554,115
551,228
828,280
142,323
(27,845)
(332,841)
587,470
634,655
129,776
366,167
390,694
943,570
371,467
938,007
293,780
203,990
Item
Net Sales
Gross Profit (Loss)
Income from Operation (Loss)
Non-operating Income
(Expense)
Income (Loss)Before Tax
Income (Loss) From
Operations of Continued
Segments (Loss)
Income (Loss) From
Operations of Discontinued
Segments
Consolidated Net Income
(Loss)
Other comprehensive income
(Loss) for the period, net of
income tax
Total Comprehensive Income
(Loss) for the Period
Net Profit (Loss) Attributable
to:
Owner of the Company
Net Profit (Loss) Attributable
to:
Non-controlling interests
Total Comprehensive Income
(Loss) Attributable to:
Owner of the Company
Total Comprehensive Income
(Loss) Attributable to:
Non-controlling interests
Earnings per share (Loss)
Note 1: Figures are audited for the past-5 years by CPA adopting IFRSs
Note 2: Figures are reviewed and adjusted by adopting IAS19
Note 3: Figures are adjusted because Sunplus decided to dispose STB center to Availink Inc.by Board Meeting on
2015/1/20
Note4: Figures are audited by adopting IFRSs.
131,695
0.01
237,359
1.00
132,373
0.20
142,367
0.72
121,887
0.72
(131,361)
(120,733)
(113,556)
(320,167)
136,707
142,323
609,203
238,932
846,562
589,348
678,986
422,852
120,187
129,770
158,950
131,263
109,174
421,458
536,619
231,061
152,319
124,871
18,282
10,962
26,577
5,616
79,891
36,333
28,349
-
28,349
69,343
97,692
7,103
21,246
70,392
27,300
0.01
61
7.1.4 Condensed Income Statement adopting IFRSs -Standalone
Year
Recent 5 Years (Note 1)
Unit: NT$K
2014
(Note 2&3)
2015
2016
2017
2018
-
-
(27,845)
(332,841)
121,076
120,187
760,808
755,693
422,852
113,767
589,348
19,855
621,500
617,193
421,458
421,458
120,187
(93,610)
421,458
(312,284)
2,577,171
944,754
178,340
582,468
1,904,224
767,713
(79,166)
200,242
2,671,392
1,011,207
167,996
453,504
1,365,802
473,255
(273,494)
694,952
Item
Net Sales
Gross Profit(Loss)
Income from Operation(Loss)
Non-operating Income
(Expense)
Income (Loss)Before Tax
Income(Loss) From Operations
of Continued Segments(Loss)
Income(Loss) From Operations
of Discontinued Segments
Net Income (Loss)
Other comprehensive income
(Loss) for the period, net of
income tax
Total Comprehensive
Income(Loss) for the Period
Net Profit(Loss) Attributable
to:
Owner of the Company
Net Profit (Loss)Attributable
to:
Non-controlling interests
Total Comprehensive Income
(Loss)Attributable to:
Owner of the Company
Total Comprehensive Income
(Loss)Attributable to:
Non-controlling interests
Earnings per share (Loss)
1.00
Note 1: Figures are audited for the past-5 years by CPA adopting IFRSs
Note 2: Figures are reviewed and adjusted by adopting IAS19
Note 3: Figures are adjusted because Sunplus decided to dispose STB center to Availink Inc.by Board Meeting on
2015/1/20
109,174
609,203
421,458
109,174
589,348
609,203
536,619
536,619
422,852
120,187
26,577
26,577
0.20
0.72
0.72
-
-
-
-
-
-
-
-
1,238,780
429,308
(239,614)
247,374
7,760
5,616
-
5,616
(126,349)
(120,733)
5,616
-
(120,733)
-
0.01
62
7.1.5 Auditors’ Opinions
Year
2014
2015
2016
2017
2018
CPA
Audit Opinion
Tung-Hui Yeh, Hung-Peng Lin
Tung-Hui Yeh, Shu-Jay Huang
Zheng-Zhi Lin, Shu-Jay Huang
Zheng-Zhi Lin, Shu-Jay Huang
Zheng-Zhi Lin, Yu-Feng Huang
An unqualified opinion
An unqualified opinion
An unqualified opinion
An unqualified opinion
An unqualified opinion
63
7.2 Financial Analysis for recent 5 years
7.2.1 Financial Analysis (consolidated by IFRSs) Unit: NT$K
End of
March
31,
2019
(Note 2)
16.73
Recent 5 years (Note 1)
2014
(Note
7&8)
Analysis Item
2017
26.29
21.04
17.26
26.93
28.03
Year
2015
2018
2016
Capital
Structure
Liquidity
Operating
Performan
ce
Profitabilit
y
Cash Flow
Leverage
Debts ratio (%)
Long-term fund to Property, plant and
equipment (%)
Current ratio (%)
Quick ratio (%)
Times interest earned (times)
Average collection turnover (times)
Average collection days
Inventory turnover (times)
Payment turnover (times)
Average inventory turnover days
Fixed assets turnover (times)
Property, plant and equipment turnover
(times)
Return on total assets (%)
Return on stockholders’ equity (%)
Profit before tax to paid-in capital (%)
(Note 6)
Profit after tax to net sales (%)
Earnings per share (NT$)
Cash flow ratio (%)
Cash flow adequacy ratio (%) (Note3)
Cash flow reinvestment ratio (%)
Operating leverage
Financial leverage
331.73 350.30 495.04 503.31 480.79 483.98
284.40 317.60 288.70 390.93 394.02 454.52
228.76 257.15 251.00 319.47 326.66 378.13
1,853.7
0
4.82
76
4.02
5.87
91
2.79
2,519.9
4
5.49
66
4.37
5.60
83
3.07
1,020.2
0
5.29
69
4.18
6.23
87
2.59
2,518.7
7
5.13
71
3.84
7.09
95
2.40
5.64
65
3.99
6.03
91
2.88
5.17
71
3.36
5.57
108
2.29
956.27 707.88
0.54
4.01
5.20
0.56
5.65
7.47
0.50
2.02
2.48
0.48
4.07
5.16
0.47
1.27
1.38
10.32 15.37
6.19
10.72
3.44
0.39
0.27
0.28
0.61
7.03
0.72
10.64
49.41
1.30
6.07
1.07
9.78
1.00
36.73
46.54
3.64
5.55
1.07
2.34
8.08
3.60
0.01
0.72
0.20
16.85
14.37
40.69
54.36
56.71
77.50
4.08 Note 4 Note 4
11.54
1.20
2.40
0.01
2.12
76.47
0.24
49.66 Note 5 Note 5
2.25 Note 5 Note 5
Variation Analysis 2018 vs. 2017
1. The decrease in interest coverage ratio is mainly due to the decrease in net profit before interest expense for
the year.
2. The decrease in the rate of return on assets and the rate of return on equity was mainly due to the decrease in
net profit after tax reduction for the disposal of investment interests during the year.
3. The decrease in the ratio of net profit and pre-tax net profit to the amount of paid-in capital was mainly due to
the decrease in investment interests during the year.
4. The decrease in basic earnings per share was mainly due to the decrease in net profit after tax for the year.
5. The decrease in the cash flow rate is mainly due to the decrease in net cash inflows from operating activities
in the last five years.
Note 1: Figures have been audited by adopting IFRSs.
Note 2: Figures 1Q’19ave been audited by adopting IFRSs.
Note 3: Cash flow adequacy ratio of 2014o 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: for those stock without par value or par value not equal to NT$10, the ratio of Operating income to paid-in capital
(%) is calculated by ratio to attributable to Owner of the Company.
Note 7: Figures are reviewed and adjusted by adopting IAS19.
64
Note 8: Figures are adjusted because Sunplus decided to dispose STB center to Availink Inc.by Board
Meeting on 2015/1/20.
7.2.2 Financial Analysis (Standalone) by IFRSs Unit: NT$K
Analysis Item
Year
2014
(Note
5&6)
Recent 5 years (Note 1)
2015
2016
2017
2018
7.97
17.08
14.25
16.14
Liquidity
Profitability
278.47
212.16
4.01
4.67
7.22
1.25
1.29
2.04
Capital
Structure
5.39
6.25
10.02
Operating
Performance
3.30
111
2.84
4.54
129
3.23
0.23
4.26
86
3.23
8.57
113
2.59
0.17
461.58
393.47
259.53
6.65
55
3.03
6.61
120
1.80
0.13
5.42
1,287.75 1,400.06 1,322.92 1,327.52 1,231.97
486.54
363.47
319.86
426.00
687.97 5,155.27
4.95
74
3.34
6.33
109
1.94
0.13
391.06
334.88
3,120.87 2,662.46
4.00
91
2.86
7.26
128
3.51
0.23
Debts ratio (%)
Long-term fund to Property, plant and
equipment (%)
Current ratio (%)
Quick ratio (%)
Times interest earned (times)
Average collection turnover (times)
Average collection days
Inventory turnover (times)
Payment turnover (times)
Average inventory turnover days
Fixed assets turnover (times)
Property, plant and equipment turnover
(times)
Return on total assets (%)
Return on stockholders’ equity (%)
Profit before tax to paid-in capital (%)
(Note 4)
Profit after tax to net sales (%)
Earnings per share (NT$)
Cash flow ratio (%) (Note2)
Cash flow adequacy ratio (%)
Cash flow reinvestment ratio (%)
Operating leverage
Financial leverage
Variation Analysis 2017 vs. 2016
1. The decrease in debt-to-asset ratio due to the decrease in borrowings during the year.
2. The decrease in the interest protection ratio was mainly due to the decrease in net profit before tax for the
current year.
3. The increase in accounts receivable turnover and the decrease in average collection days were mainly due
to the decrease in accounts receivable during the year.
4. The decrease in return on assets and return on equity was mainly due to the decrease in net profit after
taxation as a result of the decrease in investment interest during the year and the decrease in the share of
profits of subsidiaries, affiliates, and joint ventures using the equity method.
5. Pre-tax net profit as a percentage of paid-in capital ratio, net income ratio, and earnings per share was
mainly attributable to the decrease in net profit after taxation as a result of the decrease in the disposal of
investment interests during the year and the decrease in the share of subsidiaries, affiliates, and joint ventures
using the equity method.
6. The decrease in the cash flow allowance rate was mainly due to the decrease in net cash inflows from
operating activities in the last five years.
1. Capital Structure Analysis
0.45
22.06
0.01
1.00
54.00
70.01
92.68
97.84
Note 7
2.10
5.42 Note 3 Note 3 Note 3
1.17 Note 3 Note 3 Note 3
16.40
0.72
24.04
100.10
2.63
4.48
1.16
30.85
0.72
51.41
137.53
0.15
6.31
0.20
86.72
84.41
2.49
0.10
0.06
0.13
4.22
4.68
7.11
Cash Flow
Leverage
(1) Debts ratio
(2) Long term fund to Property,
plant and equipment
= Total Liabilities/Total Assets
= (Total Equity + Non-Current Liabilities)/ Property, plant and equipment
65
2. Liquidity Analysis
(1) Current Ratio
(2) Quick Ratio
(3) Times Interest Earned
3. Operating Performance Analysis
(1) Average Collection Turnover
(2) Average Collection Days
(3) Average Inventory Turnover
(4) Average Payment Turnover
(5) Average Inventory Turnover
Days
(6) Property, plant and equipment
Turnover
(7) Total Assets Turnover
4. Profitability Analysis
(1) Return on Total Assets
(2) Return Ratio on Stockholders’
Equity
(3) Profit after Tax to Net Sales
(4) Earnings Per Shares
5. Cash Flow
(1) Cash Flow Rate
(2) Cash Flow Adequacy Ratio
(3) Cash flow reinvestment ratio
= Current Assets/Current Liabilities
= (Current Assets – Inventories – Prepaid Expenses)/Current Liabilities
= Earnings before Interest and Taxes/Interest Expenses
= Net Sales/Average Trade Receivables
= 365/Receivables Turnover Rate
= Cost of Sales/Average Inventory
= Cost of Sales/Average Trade Payables
= 365/Average Inventory Turnover
= Net Sales/ Average Property, plant and equipment
= Net Sales/Average Total Assets
= {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
= Net Cash Provided by Operating Activities/Current Liabilities
= Five-Year Cash from Sum of Operations /(Five-Year Capital Expenditure +
Inventory Increase + Cash Dividend)
= (Net Cash Provided by Operating Activities – Cash Dividend)/( Property,
plant and equipment + Long-term Investment + Other Non-current Assets +
Working Capital) (Note3)
6. Leverage
(1) Operating Leverage
(2) Financial Leverage
= (Net Sales – Operating Expenses & Cost)/Operating Income (Note4)
= 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 2014 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: Figures are reviewed and adjusted by adopting IAS19
Note 6: Figures are adjusted because Sunplus decided to dispose STB center to Availink Inc.by Board Meeting on
2015/1/20
Note 7: The net cash flow from operating activities is less than the number of cash dividends issued, so it is not listed.
66
7.3 Audit Committee’s Report
Sunplus Technology Co., Ltd.
Audit Committee’s Report
Sunplus’ Board has submitted the 2018 business report, financial statements and distribution of 2017 earnings.
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 distribution of 2017 earnings, 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 2019 Annual General Shareholders’ Meeting
Sunplus Technology Co., Ltd.
Audit Committee
Convener,
Che-Ho Wei
March 20th, 2019
67
7.4 Consolidated Financial Statements and Auditors' Audit Report
Sunplus Technology Company Limited and Subsidiaries
Consolidated Financial Statements for the
Years Ended December 31, 2018 and 2017 and
Independent Auditors’ Report
68
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, 2018 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 20, 2019
69
INDEPENDENT AUDITORS’ REPORT
The Board of Directors and Shareholders
Sunplus Technology Company Limited
Opinion
We have audited the accompanying consolidated balance sheets of Sunplus Technology Company Limited (the “Company”)
and its subsidiaries (collectively referred to as the “Group”) as of December 31, 2018 and 2017 and the related 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.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated
financial position of the Group as of December 31, 2018 and 2017, and its consolidated financial performance and its
consolidated cash flows for the years then ended, in conformity 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 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, 2018. 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.
Revenue recognition
Integrated circuit chip sales accounted for 94% of the Group’s total revenue. Operating income declined in 2018, but sales to
some customers increased significantly. Therefore, we deem revenue recognition as a key audit matters. For a detailed
explanation of revenue, refer to Notes 4 and 25 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 operatung 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
70
We have also audited the parent company only financial statements of Sunplus Technology Company Limited as of and for
the years ended December 31, 2018 and 2017 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.
71
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, 2018 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 20, 2019
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.
72
SUNPLUS TECHNOLOGY COMPANY LIMITED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2018 AND 2017
(In Thousands of New Taiwan Dollars)
ASSETS
CURRENT ASSETS
Cash and cash equivalents (Notes 3, 4 and 6)
Financial assets at fair value through profit or loss - current (Notes 3, 4, 7 and 35)
Available-for-sale financial assets - current (Notes 3, 4 and 9)
Notes and accounts receivable, net (Notes 3, 4, 5, 11, 25 and 36)
Other receivables (Notes 3, 4 and 6)
Inventories (Notes 4 and 12)
Other financial assets - current (Notes 3, 18 and 37)
Other current assets (Note 18)
Total current assets
NON-CURRENT ASSETS
Financial assets at fair value through profit or loss - non-current (Notes 3, 4, 7 and 35)
Financial assets at fair value through other comprehensive income - non-current (Notes 3,
4, 8 and 35)
Available-for-sale financial assets - non-current (Notes 3, 4, 9 and 35)
Financial assets carried at cost (Notes 3, 4 and 10)
Investments accounted for using the equity method (Notes 4 and 14)
Property, plant and equipment (Notes 4, 5, 15 and 37)
Investment properties (Notes 4 and 16)
Intangible assets (Notes 4, 5 and 17)
Deferred tax assets (Notes 4 and 27)
Other financial assets - non-current (Notes 3, 18 and 37)
Other non-current assets (Notes 18 and 36)
Total non-current assets
TOTAL
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Short-term borrowings (Notes 19 and 37)
Contract liabilities - current (Notes 3 and 25)
Accounts payable (Note 20)
Current tax liabilities (Notes 4 and 27)
Provisions - current (Notes 4 and 21)
Deferred revenue - current (Notes 4, 22 and 30)
Current portion of long-term loans bank (Notes 19 and 37)
Other current liabilities (Notes 3 and 22)
Total current liabilities
NON-CURRENT LIABILITIES
Long-term borrowings (Notes 19 and 37)
Deferred revenue - non-current, net of current portion (Notes 4, 22 and 30)
Net defined benefit liabilities - non-current (Notes 4 and 23)
Guarantee deposits received (Notes 33 and 36)
Other liabilities
Total non-current liabilities
Total liabilities
EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY (Notes 4, 24 and 29)
Share capital
Common shares
Capital surplus
Retained earnings
Legal reserve
Special reserve
Unappropriated earnings
Total retained earnings
Other equity
Treasury shares (Note 37)
2018
2017
Amount
%
Amount
%
$
$
3,235,721
1,313,747
-
954,030
70,960
818,948
153,575
91,321
27
11
-
8
1
7
1
1
4,156,277
9,468
1,633,531
1,197,626
164,712
1,007,962
291,373
100,961
31
-
12
9
1
8
2
1
6,638,302
56
8,561,910
64
737,867
6
89,280
1
246,208
-
-
729,219
2,052,359
1,039,314
178,521
30,254
127,215
147,725
2
-
-
6
17
9
2
-
1
1
-
189,263
519,259
379,351
2,164,154
1,139,051
196,131
31,215
84,426
125,939
-
1
4
3
16
8
1
-
1
1
5,288,682
44
4,918,069
36
$ 11,926,984
100
$ 13,479,979
100
$
311,215
7,511
484,810
56,972
-
1,629
250,046
572,546
$
3
-
4
-
-
-
2
5
444,111
-
723,983
60,946
11,555
1,663
175,000
772,858
3
-
5
1
-
-
1
6
1,684,729
14
2,190,116
16
-
61,894
79,313
230,177
3,265
374,649
-
-
1
2
-
3
249,143
64,844
101,000
230,702
889
646,578
2
-
1
2
-
5
2,059,378
17
2,836,694
21
5,919,949
801,398
50
7
5,919,949
835,241
44
6
16
1
2
19
1,941,826
67,279
241,734
2,250,839
(442,843)
(63,401)
(4)
1
1,900,505
22,995
413,209
2,336,709
(62,262)
(63,401)
14
-
3
17
-
-
Total equity attributable to owners of the Company
8,465,942
71
8,966,236
67
NON-CONTROLLING INTERESTS (Notes 4, 13, 24 and 32)
1,401,664
12
1,677,049
12
Total equity
TOTAL
9,867,606
83
10,643,285
79
$ 11,926,984
100
$ 13,479,979
100
The accompanying notes are an integral part of the consolidated financial statements.
73
SUNPLUS TECHNOLOGY COMPANY LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017
(In Thousands of New Taiwan Dollars, Except Earnings Per Share)
2018
2017
Amount
%
Amount
%
NET OPERATING REVENUE (Notes 4, 25, and 36)
$ 6,077,733
100
$ 6,820,237
100
OPERATING COSTS (Notes 12 and 26)
3,648,349
60
4,083,471
60
GROSS PROFIT
2,429,384
40
2,736,766
40
OPERATING EXPENSES (Notes 26 and 36)
Selling and marketing expenses
General and administrative expenses
Research and development expenses
286,562
532,943
1,699,345
5
9
28
308,054
599,899
1,779,383
4
9
26
Total operating expenses
2,518,850
42
2,687,336
39
OTHER OPERATING INCOME AND EXPENSES
(324)
-
(2,245)
(LOSS) PROFIT FROM OPERATIONS
(89,790)
(2)
47,185
-
1
1
6
-
1
8
9
1
8
116,463
246,002
(23,823)
(44,862)
293,780
203,990
61,667
142,323
2
4
-
(1)
5
3
1
2
97,685
424,967
(26,226)
91,044
587,470
634,655
83,427
551,228
1,845
-
(5,947)
-
(103,685)
(2)
-
(Continued)
-
NON-OPERATING INCOME AND EXPENSES (Notes 4,
14, 26, 30 and 36)
Other income
Other gains and losses
Finance costs
Share of profit of associates
Total non-operating income and expenses
PROFIT BEFORE INCOME TAX
INCOME TAX EXPENSE (Notes 4 and 27)
NET PROFIT FOR THE YEAR
OTHER COMPREHENSIVE INCOME (LOSS)
Items that will not be reclassified subsequently to profit or
loss (Notes 4 and 24):
Remeasurement of defined benefit plans
Unrealized gain (loss) on investments in equity
instruments at fair value through other
comprehensive income
74
SUNPLUS TECHNOLOGY COMPANY LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017
(In Thousands of New Taiwan Dollars, Except Earnings Per Share)
2018
2017
Amount
%
Amount
%
Share of the other comprehensive loss of associates
accounted for using the equity method
Items that may be reclassified subsequently to profit or loss
(Notes 4 and 24):
Exchange differences on translating foreign operations
Unrealized (loss) gain on available-for-sale financial
assets
(8,556)
(18,061)
-
Share of other comprehensive income (loss) of
associates accounted for using the equity method
(2,904)
-
-
-
-
(75)
-
(62,931)
(256,849)
5,635
(1)
(4)
-
Other comprehensive loss income for the year, net of
income tax
(131,361)
(2)
(320,167)
(5)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
$
10,962
-
$
231,061
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 28)
Basic
Diluted
$
5,616
136,707
$
-
2
421,458
129,770
$
142,323
2
$
551,228
$
(120,733)
131,695
(2) $
2
109,174
121,887
$
10,962
-
$
231,061
$
$
0.01
0.01
$
$
0.72
0.72
3
6
2
8
1
2
3
The accompanying notes are an integral part of the consolidated financial statements.
(Concluded)
75
SUNPLUS TECHNOLOGY COMPANY LIMITED AND SUBSIDIARIES
STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017
(In Thousands of New Taiwan Dollars)
Equity Attributable to Owners of the Company
Other Equity
Unrealized Gain
(Loss) on
Financial Assets
Share Capital Issued and
Outstanding
Share
Retained Earnings
Differences on
Gain (Loss) on
Through Other
Exchange
Unrealized
at Fair Value
Unappropriated
Translating
Available-for-sale
Comprehensive
Noncontrolling
(Thousands)
Amount
Capital Surplus
Legal Reserve
Special Reserve
Earnings
Foreign Operations Financial Assets
Income
Treasury Shares
Total
Interests
Total Equity
BALANCE, JANUARY 1, 2017
591,995
$
5,919,949
$
911,110
$
1,890,531
$
21,927
$
99,738
$
(62,062 )
$
306,462
$
-
$
(63,401 )
$
9,024,254
$
1,663,923
$
10,688,177
Offset of the 2016 deficit
Legal reserve
Special reserve
Cash dividends for common shares
Difference between stock price and book value from disposal of subsidiaries,
associates and joint ventures accounted for using the equity method
Issuance of share dividends from capital surplus
Difference between share price and book value from disposal of subsidiaries
Net profit for the year ended December 31, 2017
Other comprehensive loss for the year ended December 31, 2017, net of
income tax
Total comprehensive income (loss) for the year ended December 31, 2017
Changes of equity of subsidiaries
Adjustment of capital surplus for the Company
Cash dividends received by subsidiaries
Decrease in non-controlling interests
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(207,317 )
129,668
-
-
-
-
1,780
-
9,974
-
-
-
-
-
-
-
-
-
-
-
-
1,068
-
-
-
-
-
-
-
-
-
-
(9,974 )
(1,068 )
(88,681 )
(18 )
-
-
421,458
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(5,622 )
(60,038 )
(246,624 )
415,836
(60,038 )
(246,624 )
(2,624 )
-
-
-
-
-
-
-
-
BALANCE, DECEMBER 31, 2017
591,995
5,919,949
835,241
1,900,505
22,995
413,209
(122,100 )
59,838
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(88,681 )
(18 )
(207,317 )
129,668
-
-
-
-
-
-
-
-
(88,681 )
(18 )
(207,317 )
129,668
421,458
129,770
551,228
(312,284 )
(7,883 )
(320,167 )
109,174
121,887
231,061
(2,624 )
1,780
-
-
(2,624 )
1,780
-
(108,761 )
(108,761 )
(63,401 )
8,966,236
1,677,049
10,643,285
Effect of retrospective application and retrospective restatement
-
-
-
-
-
294,288
-
(59,838 )
(230,011 )
-
4,439
1,478
5,917
BALANCE, JANUARY 1, 2018 AS RESTATED
591,995
5,919,949
835,241
1,900,505
22,995
707,497
(122,100 )
Offset of the 2017 deficit
Legal reserve
Special reserve
Cash dividends for common shares
Changes in capital surplus from investments in associates accounted for
using the equity method
-
-
-
-
-
-
-
-
-
-
-
50,782
41,321
-
-
-
(41,321 )
(44,284 )
(327,551 )
-
-
-
-
-
-
44,284
-
-
76
-
-
-
-
-
(230,011 )
(63,401 )
8,970,675
1,678,527
10,649,202
-
-
-
-
-
-
-
-
-
-
(327,551 )
50,782
-
-
-
-
-
-
(327,551 )
50,782
Issuance of share dividends from capital surplus
Difference between share price and book value 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 noncontrolling interests
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(86,846 )
(271 )
-
-
-
-
2,492
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(22,606 )
5,616
1,453
7,069
-
(37,070 )
-
-
-
-
-
(16,775 )
(16,775 )
-
-
-
BALANCE, DECEMBER 31, 2018
591,995
$
5,919,949
$
801,398
$
1,941,826
$
67,279
$
241,734
$
(138,875 )
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(111,027 )
(111,027 )
-
37,070
-
-
-
-
-
-
-
-
-
-
(86,846 )
(271 )
(22,606 )
-
-
-
(86,846 )
(271 )
(22,606 )
5,616
136,707
142,323
(126,349 )
(5,012 )
(131,361 )
(120,733 )
131,695
10,962
2,492
-
-
-
-
2,492
-
(408,558 )
(408,558 )
$
(303,968 )
$
(63,401 )
$
8,465,942
$
1,401,664
$
9,867,606
The accompanying notes are an integral part of the consolidated financial statements.
77
SUNPLUS TECHNOLOGY COMPANY LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017
(In Thousands of New Taiwan Dollars)
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax
Adjustments for:
Depreciation expenses
Amortization expenses
Bad-debt expenses
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
Loss on disposal of property, plant and equipment
Gain on disposal of subsidiaries
Gain on disposal of investments
Impairment loss recognized on financial assets
Impairment loss recognized non-financial assets
Net loss on foreign currency exchange
Amortization of prepaid lease payments
Changes in operating assets and liabilities:
Decrease in financial assets held for trading
Decrease in trade receivables
Decrease (increase) in other receivables
Increase in inventories
(Increase) decrease in other current assets
Decrease in trade payables
Increase in contract liabilities
Decrease in provisions
Decrease in deferred revenue
Decrease in other current liabilities
Decrease in accrued pension liabilities
Cash generated from operations
Interest received
Dividends received
Interest paid
Income tax paid
2018
2017
$
203,990
$
634,655
275,786
82,237
-
(67,736)
23,823
(26,314)
(23,564)
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)
(151,849)
(4,309)
248,197
25,125
97,629
(21,745)
(65,287)
259,983
97,645
29,376
(4,901)
26,226
(22,111)
(23,230)
220
(91,044)
2,245
-
(642,140)
203,363
25,190
9,184
2,778
15,053
48,582
(90,911)
(149,572)
41,058
(6,586)
-
(779)
(1,641)
(38,882)
(3,213)
320,548
24,445
64,377
(27,065)
(67,373)
Net cash generated from operating activities
283,919
314,932
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of available-for-sale financial assets
Proceeds of the sale of available-for-sale financial assets
Purchases of financial assets measured at cost
Proceeds of the disposal of financial assets measured at cost
Returned capital to the Company - financial assets measured at cost
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
78
-
-
-
-
-
(105,213)
(1,764,316)
2,060,690
4,930
(1,921,210)
2,745,491
(89,341)
54,099
3,183
-
-
-
-
(Continued)
79
SUNPLUS TECHNOLOGY COMPANY LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017
(In Thousands of New Taiwan Dollars)
Acquisition of associates
Proceeds from disposal of subsidiaries
Payments for property, plant and equipment
Proceeds of the disposal of property, plant and equipment
Increase in refundable deposits
Decrease in refundable deposits
Payments for intangible assets
Payments for investment properties
Decrease in investment properties
Decrease (increase) on other non-current assets
Decrease in other assets - non-current
2018
2017
(110,368)
(159,571)
(173,729)
568
(2,039)
62
(84,655)
(3,891)
10,016
10,635
3,570
-
219,242
(99,960)
162
-
748
(124,521)
(6,592)
-
(143,170)
1,476
Net cash (used in) generated from investing activities
(313,311)
639,607
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
Dividends paid to interests
Dividends paid to non-controlling interests
Decrease in non-controlling interests
Net cash used in financing activities
(132,566)
(179,088)
47,914
(18,331)
(411,905)
(169,798)
(31,266)
(105,832)
(1,021,586)
107,187
(77,857)
(294,218)
(200,179)
(1,000)
(895,040)
(1,593,485)
EFFECT OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH
HELD IN FOREIGN CURRENCIES
3,876
(8,272)
NET DECREASE IN CASH AND CASH EQUIVALENTS
(920,556)
(647,218)
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR
4,156,277
4,803,495
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR
$
3,235,721
$
4,156,277
The accompanying notes are an integral part of the consolidated financial statements.
(Concluded)
80
SUNPLUS TECHNOLOGY COMPANY LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017
(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)
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 24).
Following is a diagram of the relationship and ownership percentages between Sunplus and its subsidiaries (collectively,
the “Group”) as of December 31, 2018:
Sunplus Technology
Company
0.00%
55%
13.69%
2.09%
100%
100%
100%
100%
100%
100%
100%
91.40%
61.13%
34.30%
100%
100%
100%
Award
Sunplus
Ventureplus
Sunplus HK
Glory
Management
100%
Consulting
100%
Sunplus
Venture
Sunny
Fancy
Ventureplus
Mauritius
70%
100%
Han Yuang
100%
100%
Ventureplus
Giant
Giant
Cayman
Kingdom
Rock
8.16%
68.80%
100%
93.33%
100%
100%
100%
Ytrip
Sunplus
Sunplus App
Sunplus
Technology
Technology
Technology
Prof-tek
Sunplus
SunMedia
Shanghai
Technology
Co., Ltd.
100%
(Beijing)
Co., Ltd.
44.08%
(Shenzhen)
1culture
Sunplus
Jumplux
Sunplus
Russell
Magic Sky
Lin Shih
mMobile
Technology
Sunext
Innovation
Generalplus
Wei-Young
42.08%
5.64%
100%
7.64%
Sunplus
mMedia
2.60%
Generalplus
Samoa
100%
Generalplus
Mauritius
100%
100%
Generalplus
Shenzhen
Generalplus
HK
89.76%
The consolidated financial statements are presented in the Company’s functional currency, the New Taiwan dollar.
Communication
Co., Ltd
2. APPROVAL OF FINANCIAL STATEMENTS
The consolidated financial statements were approved by the Company’s board of directors and authorized for issue on
March 20, 2019.
81
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 Group’s accounting policies:
1) Amendment to IFRS 2 “Classification and Measurement of Share-based Payment Transactions”
The amendment requires that market conditions and non-vesting conditions should be taken into
account and vesting conditions, other than market conditions, should not be taken into account
when estimating the fair value of the cash-settled share-based payments at the measurement date.
Instead, they should be taken into account by adjusting the number of awards included in the
measurement of the liability arising from the transaction. The amendment should be applied to
cash-settled share-based payment transactions that are unvested at January 1, 2018.
2) IFRS 9 “Financial Instruments” and related amendments
IFRS 9 supersedes IAS 39 “Financial Instruments: Recognition and Measurement”, with
consequential amendments to IFRS 7 “Financial Instruments: Disclosures” and other standards.
IFRS 9 sets out the requirements for the classification, measurement and impairment of financial
assets and hedge accounting. Refer to Note 4 for information relating to the relevant accounting
policies.
The requirements for the classification, measurement and impairment of financial assets and
hedging cost have been applied retrospectively starting from January 1, 2018, and the other
requirements for hedge accounting have been applied prospectively. IFRS 9 is not applicable to
items that have already been derecognized as of December 31, 2017.
Classification, measurement and impairment of financial assets
On the basis of the facts and circumstances that existed as at January 1, 2018, the Group has
performed an assessment of the classification of recognized financial assets and has elected not to
restate prior reporting periods.
The following table shows the original measurement categories and carrying amounts under IAS 39
and the new measurement categories and carrying amounts under IFRS 9 for each class of the
Group’s financial assets and financial liabilities as at January 1, 2018.
Financial Assets
IAS 39
IFRS 9
IAS 39
IFRS 9
Remark
Measurement Category
Carrying Amount
Cash and cash equivalents Loans and receivables
Equity securities
Available‑for‑sale
Mutual funds
Available‑for‑sale
Amortized cost
Fair value through profit or
loss - equity instruments
Fair value through other
comprehensive income -
equity instruments
Fair value through profit or
loss - current
$ 4,156,277 $ 4,156,277
708,522
533,487
(a)
(b)
-
279,700
(b)
1,633,531
1,633,531
(c)
(Continued)
82
Financial Assets
IAS 39
IFRS 9
IAS 39
IFRS 9
Remark
Measurement Category
Carrying Amount
Time deposits with
Loans and receivables
Amortized cost
$
73,040
$
73,040
(a)
original maturities of
more than 3 months
Notes receivable, trade
receivables and other
receivables
Restricted assets
Loans and receivables
Amortized cost
1,362,338
1,362,338
(a)
Loans and receivables
Amortized cost
302,759
302,759
(a)
(Concluded)
IAS 39
Carrying
Amount as of
IFRS 9
Carrying
Retained
Earnings
Other
Equity
Amount as of
Effect on
Effect on
Financial Assets
2018
cations
surements
2018
2018
2018
Remark
January 1,
Reclassifi-
Remea-
January 1,
January 1,
January 1,
FVTPL
$
98,748
$
-
$
-
$
98,748
$
-
$
-
Add: Reclassification from
-
2,053,783
14,487
2,068,270
67,898
(53,412 )
(b), (c)
available-for-sale (IAS
39)
FVTOCI
Add: Reclassification from
available-for-sale (IAS
39)
98,748
2,053,783
14,487
2,167,018
67,898
(53,412 )
-
-
-
-
-
-
-
-
288,270
(8,570)
279,700
226,390
(236,437 )
(b), (c)
288,270
(8,570)
279,700
226,390
(236,437 )
$
98,748
$ 2,342,053
$
5,917
$ 2,446,718
$ 294,288
$ (289,849 )
a) Cash and cash equivalents, time deposits with original maturities of more than 3 months, trade
receivables (including related parties), other receivables and restricted assets that were
previously classified as loans and receivables under IAS 39 were classified as at amortized cost
with an assessment of expected credit losses under IFRS 9.
b) The Group elected to classify all of listed company and unlisted company investments
previously classified as available-for-sale under IAS 39 as at FVTPL under IFRS 9. As a result,
the related other equity - unrealized gain (loss) on available-for-sale financial assets was
reclassified to retained earnings in the amount of $6,416 thousand and to other equity -
unrealized gain (loss) on financial assets at FVTOCI in the amount of $(6,146) thousand.
Investments in unlisted shares previously measured at cost under IAS 39 have been classified at
FVTPL and at FVTOCI under IFRS 9 and were remeasured at fair value. Consequently, an
increase of $352,224 and $278,613 thousand was recognized in financial assets at FVTPL and
retained earnings, respectively, on January 1, 2018; consequently, an increase of $171,568 and a
decrease of $275,558 thousand was recognized in financial assets at FVTOCI and other equity -
unrealized gain (loss) on financial assets at FVTOCI, respectively, on January 1, 2018.
c) Mutual funds previously classified as available-for-sale under IAS 39 were classified
mandatorily as at FVTPL under IFRS 9, because the contractual cash flows are not solely
payments of principal and interest on the principal outstanding and they are not equity
instruments. The retrospective adjustment resulted in a decrease of $8,145 thousand in other
equity - unrealized gain (loss) on available-for-sale financial assets and an increase of $8,145
83
thousand in retained earnings on January 1, 2018.
3) IFRS 15 “Revenue from Contracts with Customers” and related amendments
IFRS 15 establishes principles for recognizing revenue that apply to all contracts with customers
and supersedes IAS 18 “Revenue”, IAS 11 “Construction Contracts” and a number of
revenue-related interpretations. Refer to Note 4 for the related accounting policies.
Currently, the estimate of allowances for sales returns which may occur in the year are recognized
as provisions. Under IFRS 15, such provisions are recognized as other current liabilities.
Impact on assets, liabilities and equity for the current period
Contract liabilities - current
Provisions - current
Other current liabilities
December 31,
2017
Carrying
Amount
$
-
11,555
772,858
Adjustments
Arising from
Initial
Application
$
37,384
(11,555)
(25,829)
January 1, 2018
Adjusted
Carrying
Amount
$
37,384
-
747,029
Total effect on liabilities
$ 784,413
$
-
$ 784,413
4) Amendments to IAS 12 “Recognition of Deferred Tax Assets for Unrealized Losses”
The amendments clarify that the difference between the carrying amount of a debt instrument
measured at fair value and its tax base gives rise to a temporary difference, even though there are
unrealized losses on that asset, irrespective of whether the Group expects to recover the carrying
amount of the debt instrument by sale or by holding it and collecting contractual cash flows.
In addition, in determining whether to recognize a deferred tax asset, the Group should assess a
deductible temporary difference in combination with all of its other deductible temporary
differences, unless the tax law restricts the utilization of losses as a deduction against income of a
specific type, in which case, a deductible temporary difference is assessed in combination only with
other deductible temporary differences of the appropriate type. The amendments also stipulate that,
when determining whether to recognize a deferred tax asset, the estimate of probable future taxable
profit may include some of the Group’s assets for more than their carrying amount if there is
sufficient evidence that it is probable that the Group will achieve the higher amount and that the
estimate for future taxable profit should exclude tax deductions resulting from the reversal of
deductible temporary differences.
5) Amendments to IAS 40 “Transfers of Investment Property”
The amendments clarify that the Group should transfer to, or from, investment property when, and
only when, the property meets, or ceases to meet, the definition of investment property and there is
evidence of a change in use. In isolation, a change in management’s intentions for the use of a
property does not provide evidence of a change in use. The amendments also clarify that evidence
of a change in use is not limited to those illustrated in IAS 40.
6) IFRIC 22 “Foreign Currency Transactions and Advance Consideration”
IAS 21 stipulates that a foreign currency transaction shall be recorded on initial recognition in the
functional currency by applying to the foreign currency amount the spot exchange rate between the
functional currency and the foreign currency at the date of the transaction. IFRIC 22 further
explains that the date of the transaction is the date on which an entity recognizes a non-monetary
84
asset or non-monetary liability from payment or receipt of advance consideration. If there are
multiple payments or receipts in advance, the entity shall determine the date of the transaction for
each payment or receipt of advance consideration.
The Group applied IFRIC 22 prospectively to all assets, expenses and income recognized on or after
January 1, 2018 within the scope of the interpretation.
b. New IFRSs in issue but not yet endorsed and issued into effect by the FSC
New IFRSs
Effective Date
Announced by IASB (Note 1)
Annual Improvements to IFRSs 2015-2017 Cycle
Amendments to IFRS 9 “Prepayment Features with Negative Compensation” January 1, 2019 (Note 2)
IFRS 16 “Leases”
Amendments to IAS 19 “Plan Amendment, Curtailment or Settlement”
Amendments to IAS 28 “Long-term Interests in Associates and Joint
January 1, 2019
January 1, 2019 (Note 3)
January 1, 2019
January 1, 2019
Ventures”
IFRIC 23 “Uncertainty over Income Tax Treatments”
January 1, 2019
Note 1: Unless stated otherwise, the above New IFRSs are effective for annual periods beginning on or after their
respective effective dates.
Note 2: The FSC permits the election for early adoption of the amendments starting from 2018.
Note 3: The Group shall apply these amendments to plan amendments, curtailments or settlements occurring on
or after January 1, 2019.
1) IFRS 16 “Leases”
IFRS 16 sets out the accounting standards for leases that will supersede IAS 17 and a number of
related interpretations.
Definition of a lease
Upon initial application of IFRS 16, the Group will elect 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 will
not be reassessed and will be accounted for in accordance with the transitional provisions under
IFRS 16.
The Group as lessee
Upon initial application of IFRS 16, lease assets and liabilities are recognized for all leases on the
consolidated balance sheets except for those whose payments under low-value and short-term leases
will be recognized as expenses on a straight-line basis. On the consolidated statements of
comprehensive income, the Group will present 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 will be classified within financing activities; cash payments for
the interest portion will be classified within operating activities.
Currently, payments under operating lease contracts are recognized as expenses on a straight-line
basis. Cash flows for operating leases are classified within operating activities on the consolidated
statements of cash flows.
The Group anticipates applying IFRS 16 retrospectively with the cumulative effect of the initial
85
application of this standard recognized on January 1, 2019. Comparative information will not be
restated.
86
Anticipated impact on assets, liabilities and equity
Carrying
Amount as of
December 31,
2018
Adjustments
Arising from
Initial
Application
Adjusted
Carrying
Amount as of
January 1, 2019
$
$
$
$
-
-
-
-
-
$ 249,727
$ 249,727
$ 249,727
$ 249,727
$
10,907
238,820
$
10,907
238,820
$ 249,727
$ 249,727
Right-of-use assets
Total effect on assets
Lease liabilities - current
Lease liabilities – non-current
Total effect on liabilities
The Group as lessor
Except for sublease transactions, the Group will not make any adjustments for leases in which it is a
lessor and will account for those leases with the application of IFRS 16 starting from January 1,
2019.
2) IFRIC 23 “Uncertainty over Income Tax Treatments”
IFRIC 23 clarifies that when there is uncertainty over income tax treatments, the Group should
assume that the taxation authority will have full knowledge of all related information when making
related examinations. If the Group concludes that it is probable that the taxation authority will
accept an uncertain tax treatment, the Group 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 Group 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 Group 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 clarify that IFRS 9 shall be applied to account for other financial instruments in an
associate or joint venture to which the equity method is not applied. These include long-term
interests that, in substance, form part of the entity’s net investment in an associate or joint venture.
4) Amendments to IFRS 9 “Prepayment Features with Negative Compensation”
IFRS 9 stipulates that if a contractual term of a financial asset permits the issuer (i.e. the debtor) to
prepay a debt instrument or permits the holder (i.e. the creditor) to put a debt instrument back to the
issuer before maturity and the prepayment amount substantially represents unpaid amounts of
principal and interest on the principal amount outstanding, which may include reasonable
compensation for early termination, the financial asset has contractual cash flows that are solely
payments of principal and interest on the principal amount outstanding. The amendments further
explain that reasonable compensation may be paid or received by either of the parties, i.e. a party
may receive reasonable compensation when it chooses to terminate the contract early.
87
When the amendments become effective, the Group shall apply the amendments retrospectively.
However, the Group may elect to recognize the cumulative effect of the initial application of the
amendments in the opening carrying amount at the date of initial application, or to restate prior
periods if, and only if, it is possible without the use of hindsight.
5) 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 amendment shall be applied
prospectively.
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.
c. New IFRSs in issue but not yet endorsed and issued into effect by the FSC
New IFRSs
Effective Date
Announced by IASB (Note 1)
Amendments to IFRS 3 “Definition of a Business”
Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between
January 1, 2020 (Note 2)
To be determined by IASB
an Investor and its Associate or Joint Venture”
IFRS 17 “Insurance Contracts”
Amendments to IAS 1 and IAS 8 “Definition of Materiality”
January 1, 2021
January 1, 2020 (Note 3)
Note 1: Unless stated otherwise, the above New IFRSs are effective for annual periods beginning on
or after their respective effective dates.
Note 2: 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 the period.
Note 3: The Group shall apply these amendments prospectively for annual reporting periods
beginning on or after January 1, 2020.
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
88
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.
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, or other regulations and IFRSs as
endorsed by the FSC.
b. Basis of preparation
The Group 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 noncurrent 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 noncurrent.
89
d. Basis of consolidation
1) Principles for preparing consolidated financial statements
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.
Starting from 2018, the fair value of investment retained in a former subsidiary at the date when control is lost is
regarded as the fair value on the initial recognition of the investment in an associate. Before 2018, the fair value
of investment retained in the former subsidiary at the date when control was lost was regarded as the cost on
initial recognition of an investment in an associate or a joint venture.
See Note 13 and Tables 5 and 6 for detailed information on subsidiaries (including percentages of ownership
and main businesses).
e. Foreign currencies
In preparing the financial statements of each group entity, transactions in currencies other than the
entity’s functional currency (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.
90
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
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. 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 and jointly controlled entities
An associate is an entity over which the Group has significant influence and that is neither a subsidiary
nor an interest in a joint venture. Joint venture arrangements that involve the establishment of a separate
entity in which ventures have joint control over the economic activity of the entity are referred to as
jointly controlled entities.
The results and assets and liabilities of associates and jointly controlled entities are incorporated in
these consolidated financial statements using the equity method of accounting. Under the equity
method, an investment in an associate and jointly controlled entity 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 and jointly controlled entity. The Group also recognizes the changes in the Group’s
share of equity of associates and jointly controlled entity.
When the Group subscribes for additional new shares of the associate and jointly controlled entity 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 and jointly
controlled entity. The Group records such a difference as an adjustment to investments with the
corresponding amount charged or credited to capital surplus. If the Group’s ownership interest is
reduced due to the additional subscription of the new shares of associate and jointly controlled entity,
the proportionate amount of the gains or losses previously recognized in other comprehensive income in
relation to that associate and jointly controlled entity 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 Group’s share of losses of an associate and jointly controlled entity equals or exceeds its
interest in that associate and jointly controlled entity (which includes any carrying amount of the
investment accounted for by the equity method and long-term interests that, in substance, form part of
91
the Group’s net investment in the associate and jointly controlled entity), the Group discontinues
recognizing its share of further losses. 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 and jointly controlled entity.
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 and jointly controlled entity 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 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.
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 Group discontinues the use of the equity method from the date on which it ceases to have
significant influence and joint control. 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 (and the jointly controlled entity attributable to
the retained interest and its fair value is included in the determination of the gain or loss on disposal of
the associate and the jointly controlled entity. The Group accounts for all amounts previously
recognized in other comprehensive income in relation to that associate and the jointly controlled entity
on the same basis as would be required if that associate had directly disposed of the related assets or
liabilities.
When a group entity transacts with its associate (and jointly controlled entity, profits and losses
resulting from the transactions with the associate are recognized in the Group’ consolidated financial
statements only to the extent of interests in the associate and the jointly controlled entity 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.
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.
i.
Investment properties
Investment properties are properties held to earn rentals or for capital appreciation.
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Investment properties are measured initially 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.
Any gain or loss arising on derecognition of the property is calculated as the difference between the net
disposal proceeds and the carrying amount of the asset and is included in profit or loss in the period in
which the property is derecognized.
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
Gains or losses arising from derecognition of an intangible asset, measured as the difference
between the net disposal proceeds and the carrying amount of the asset, and are recognized in profit
or loss when the asset is derecognized.
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.
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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.
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.
m. Financial instruments
1) 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.
a) Financial assets
All regular way purchases or sales of financial assets are recognized and derecognized on a
trade date basis.
i. 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 35.
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ii) Financial assets at amortized cost
Financial assets that meet the following conditions are subsequently measured at
amortized cost:
The financial asset is held within a business model whose objective is to hold financial assets
in order to collect contractual cash flows; and
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:
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
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.
2017
Financial assets are classified into the following categories: Financial assets at fair value
through profit or loss, available-for-sale financial assets and loans and receivables.
95
i) Financial assets at fair value through profit or loss
Financial assets are classified as at fair value through profit or loss when such financial
assets are either held for trading or designated as at fair value through profit or loss.
A financial asset may be designated as at fair value through profit or loss upon initial
recognition if:
Such designation eliminates or significantly reduces a measurement or recognition
inconsistency that would otherwise arise; or
The financial asset forms part of a group of financial assets or financial liabilities or both,
which is managed and has performance evaluated on a fair value basis in accordance with the
Group’s documented risk management or investment strategy, and information about the
Group is provided internally on that basis; or
The financial asset is a contract which contains one or more embedded derivatives so that the
entire hybrid (combined) contract can be designated as at fair value through profit or loss.
Financial assets at fair value through profit or loss are stated 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.
ii) Available-for-sale financial assets
Available-for-sale financial assets are non-derivatives that are either designated as
available-for-sale or are not classified as loans and receivables, held-to-maturity
investments or financial assets at fair value through profit or loss.
Available-for-sale financial assets are measured at fair value. Changes in the carrying
amounts of available-for-sale monetary financial assets (relating to changes in foreign
currency exchange rates, interest income calculated using the effective interest method
and dividends on available-for-sale equity investments) are recognized in profit or loss.
Other changes in the carrying amount of available-for-sale financial assets are
recognized in other comprehensive income and will be reclassified to profit or loss when
such investments are disposed of or are determined to be impaired.
Dividends on available-for-sale equity instruments are recognized in profit or loss when
the Group’s right to receive the dividends is established.
Available-for-sale equity investments that do not have a quoted market price in an active
market and whose fair value cannot be reliably measured and derivatives that are linked
to and must be settled by delivery of such unquoted equity investments are measured at
cost less any identified impairment loss at the end of each reporting period and
presented as a separate line item as financial assets carried at cost. If, in a subsequent
period, the fair value of the financial assets can be reliably measured, the financial assets
are remeasured at fair value. The difference between the carrying amount and the fair
value is recognized in other comprehensive income on financial assets. Any impairment
loss is recognized in profit and loss.
iii) Loans and receivables
Loans and receivables (including notes and accounts receivable, other receivables and
cash and cash equivalents) are measured using the effective interest method at amortized
96
cost less any impairment, except for short-term receivables when the effect of
discounting is immaterial.
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.
ii. Impairment of financial assets
2018
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 (i.e. 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 Group 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.
2017
Financial assets, other than those at fair value through profit or loss, are assessed for
indicators of impairment at the end of each reporting period. Financial assets are considered
to be impaired when there is objective evidence, as a result of one or more events that
occurred after the initial recognition of the financial assets, that the estimated future cash
flows of the investment have been affected.
For financial assets at amortized cost, such as trade receivables and other receivables, such
assets are assessed for impairment on a collective basis even if they were assessed not to be
impaired individually. Objective evidence of impairment for a portfolio of receivables could
include the Group’s past experience with collecting payments, an increase in the number of
delayed payments in the portfolio past the average credit period of 60 days, as well as
observable changes in national or local economic conditions that correlate with defaults on
receivables.
For a financial asset at amortized cost, the amount of the impairment loss recognized is the
difference between such an asset’s carrying amount and the present value of its estimated
future cash flows, discounted at the financial asset’s original effective interest rate.
For financial assets at amortized cost, if, in a subsequent period, the amount of the
impairment loss decreases and the decrease can be related objectively to an event occurring
after the impairment was recognized, the previously recognized impairment loss is reversed
through profit or loss to the extent that the carrying amount of the investment (at the date the
97
impairment is reversed) does not exceed what the amortized cost would have been had the
impairment not been recognized.
For available-for-sale equity investments, a significant or prolonged decline in the fair value
of a security below its cost is considered to be objective evidence of impairment.
For all other financial assets, objective evidence of impairment could include significant
financial difficulty of the issuer or counterparty, breach of contract such as a default or
delinquency in interest or principal payments, it becoming probable that the borrower will
enter bankruptcy or financial re-organization, or the disappearance of an active market for
those financial assets because of financial difficulties.
When an available-for-sale financial asset is considered to be impaired, cumulative gains or
losses previously recognized in other comprehensive income are reclassified to profit or loss
in the period.
In respect of available-for-sale equity securities, impairment loss previously recognized in
profit or loss is not reversed through profit or loss. Any increase in fair value subsequent to
an impairment loss is recognized in other comprehensive income. In respect of
available-for-sale debt securities, impairment loss is subsequently reversed through profit or
loss if an increase in the fair value of the investment can be objectively related to an event
occurring after the recognition of the impairment loss.
For financial assets carried at cost, the amount of the impairment loss is measured as the
difference between such an asset’s carrying amount and the present value of its estimated
future cash flows discounted at the current market rate of return for a similar financial asset.
Such impairment loss will not be reversed in subsequent periods.
The carrying amount of a financial asset is reduced by the impairment loss directly for all
financial assets, with the exception of trade receivables and other receivables, where the
carrying amount is reduced through the use of an allowance account. When trade
receivables and other receivables are considered uncollectible, they are written off against
the allowance account. Subsequent recoveries of amounts previously written off are credited
against the allowance account. Changes in the carrying amount of the allowance account are
recognized in profit or loss except for uncollectible trade receivables and other receivables
that are written off against the allowance account.
iii. 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.
Before 2018, on derecognition of a financial asset in its entirety, 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. Starting from 2018, 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
98
gain or loss that had been recognized in other comprehensive income is transferred directly
to retained earnings, without recycling through profit or loss.
c) Financial liabilities
i. Subsequent measurement
All financial liabilities are measured at amortized cost using the effective interest method.
ii. 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
2018
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.
2017
Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced
for estimated customer returns, rebates and other similar provisions. Provisions for sales returns and
liabilities for returns are recognized at the time of sale based on the seller’s reliable estimate of future
returns and based on past experience and other relevant factors.
99
1) Sale of goods
Revenue from the sale of goods is recognized when all the following conditions are satisfied:
a) The Group has transferred to the buyer the significant risks and rewards of ownership of the
goods;
b) The Group retains neither continuing managerial involvement to the degree usually associated
with ownership nor effective control over the goods sold;
c) The amount of revenue can be measured reliably;
d) It is probable that the economic benefits associated with the transaction will flow to the Group;
and
e) The costs incurred or to be incurred in respect of the transaction can be measured reliably.
The Group does not recognize sales revenue on materials delivered to subcontractors because this
delivery does not involve a transfer of risks and rewards of the materials’ ownership.
2) Dividend and interest income
Dividend income from investments is recognized when the shareholder’s right to receive payment
has been established provided that it is probable that the economic benefits will flow to the Group
and the amount of income can be measured reliably.
Interest income from a financial asset is recognized when it is probable that the economic benefits
will flow to the Group and the amount of income can be measured reliably. Interest income is
accrued on a time basis, by reference to the principal outstanding and at the effective interest rate
applicable.
p. Leasing
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. Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets,
which are assets that necessarily take a substantial period of time to get ready for their intended use or
sale, are added to the cost of those assets, until such time as the assets are substantially ready for their
intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their
expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.
100
Except the circumstances stated above, all the other borrowing costs are recognized in profit or loss in
the period in which the borrowing costs are incurred.
r. 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 noncurrent 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.
s. 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.
t. 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
101
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.
u. 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 in the consolidated financial statements 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, unused loss carry forward and unused tax credits for purchases of machinery,
equipment and technology, research and development expenditures, and personnel training
expenditures to the extent that it is probable that taxable profits will be available against which
those deductible temporary differences can be utilized. Such deferred tax assets and liabilities are
not recognized if the temporary difference arises from goodwill or from the initial recognition
(other than in a business combination) of other assets and liabilities in a transaction that affects
neither the taxable profit nor the accounting profit.
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.
102
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.
Where current tax or deferred tax arises from the initial accounting for a business combination, the
tax effect is included in the accounting for the business combination.
5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
a. Estimated impairment of financial assets - 2018
The provision for impairment of trade receivables is based on assumptions about the 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 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 trade receivables - 2017
When there is objective evidence of impairment loss of receivables, the Group takes into consideration
the estimation of the future cash flows of such assets. The amount of impairment loss is measured as the
difference between such an asset’s carrying amount and the present value of its estimated future cash
flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s
original effective interest rate. Where the actual future cash flows are less than expected, a material
impairment loss may arise.
c. 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.
For the year ended December 31, 2018 and 2017, the Group recognized impairment losses on intangible assets of $0
and $25,190 thousand, respectively.
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
2018
2017
$
7,521
1,338,553
$
10,220
1,535,059
1,881,214
8,433
2,602,835
8,163
$ 3,235,721
$ 4,156,277
103
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
2018
2017
0.01%-1.55%
1.00%
0.01%-3.60%
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
- Securities listed in the ROC - CB
- Securities listed in the ROC
Financial assets held for trading
Non-derivative financial assets
- Securities listed in the ROC - CB
Financial liabilities at FVTPL – non-current
Financial assets classified as at FVTPL
Non-derivative financial assets
- Unlisted shares and emerging market shares
- Private funds
- Mutual funds
- Listed shares and emerging market shares
Financial assets held for trading
Non-derivative financial assets
December 31
2018
2017
$ 1,280,668
28,718
4,361
$
-
-
-
-
9,468
$ 1,313,747
$
9,468
$
$
462,387
160,226
75,432
39,822
-
-
-
-
- Unlisted debt securities in other countries - CB
-
89,280
$
737,867
$
89,280
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8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME -
2018
Non-current
Domestic and foreign investments
Listed shares and emerging market shares
Unlisted shares and emerging market shares
Private funds
9. AVAILABLE-FOR-SALE FINANCIAL ASSETS - 2017
Current
Domestic and foreign investments
- Mutual funds
- Listed shares and emerging market shares
Non-current
Domestic investments
- Listed shares and emerging market shares
- Mutual funds
10. FINANCIAL ASSETS MEASURED AT COST - 2017
Non-current
Unlisted shares and emerging market shares
Private funds
Classification according to financial asset measurement categories
Classified as available for sale
December 31,
2018
$
78,246
127,991
39,971
$ 246,208
December 31,
2017
$ 1,321,681
311,850
$ 1,633,531
$
114,828
74,435
$
189,263
December 31,
2017
$ 382,170
137,089
$ 519,259
$ 519,259
Management believed that the above unlisted equity investments held by the Group, whose fair value cannot be reliably
measured due to the range of reasonable fair value estimates was so significant; therefore they were measured at cost less
impairment at the end of reporting period.
The Group recognized impairment losses of $203,363 thousand for the above financial assets carried at cost for
December 31, 2017.
105
11. NOTES AND ACCOUNTS RECEIVABLE, NET
Notes receivable
Notes receivable - operating
$
16
$
57
December 31
2018
2017
Trade receivables
At amortized cost
Gross carrying amount
Less: Allowance for impairment loss
Accounts receivable
2018
954,518
(504)
954,014
1,305,313
(107,744)
1,197,569
$
954,030
$ 1,197,626
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 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 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, 2018
Not Overdue
Overdue
1- 60 days
Overdue
61-90 days
Overdue
91-120 days
Overdue 121
days or More
Total
Gross carrying amount
Expected credit losses
$ 953,258
-
$
$
691
-
$
-
-
$
-
-
569
(504 )
$ 954,518
(504 )
Amortized cost at December 31, 201
$ 953,258
$
691
$
-
$
-
$
65
$ 954,014
The movements of the loss allowance of trade receivables were as follows:
Balance at January 1, 2018 per IAS 39
106
December 31,
2018
$ 107,744
Adjustment on initial application of IFRS 9
Balance at January 1, 2018 per IFRS 9
Less: Amounts written off (Note)
Exchange differences
Balance at December 31, 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.
December 31, 2017
The average credit period on sales of goods was the same as 2018. In determining the recoverability of a trade receivable,
the Group considered any change in the credit quality of the trade receivable since the date on which credit was initially
granted until the end of the reporting period. An allowance for impairment loss was recognized against trade receivables
based on the estimated irrecoverable amounts determined by reference to past default experience with the counterparties
and an analysis of their respective current financial positions.
For some trade receivables balances that were past due at the end of the reporting period, the Group did not recognize an
allowance for the impairment for notes and trade receivables as of December 31, 2017, because there had been no
significant change in credit quality and the amounts were still considered recoverable. The Group did not hold any
collateral or other credit enhancements over these balances nor did it have a legal right to make offsets against any
amounts owed by the Group to any respective counterparty.
The aging of receivables was as follows:
0-60 days
61-90 days
91-120 days
121-360 days
More than and including 361 days
Total
The above aging schedule was based on the invoice date.
December 31,
2017
$ 1,008,766
102,429
86,891
-
107,257
$ 1,305,313
107
The aging of the receivables that are past due but not impaired was as follows:
Less than and including 60 days
More than and including 91 days
Total
December 31,
2017
$
$
636
-
636
The above aging schedule was based on the past due date from end of credit term.
Movements of the allowance for impairment loss recognized on notes receivable and trade receivables were as follows:
Individually
Impaired
Collectively
Impaired
Balance at January 1, 2017
Add: Impairment losses recognized on receivable
Foreign exchange translation gains
$
78,394
29,376
(26)
$
Balance at December 31, 2017
$ 107,744
$
-
-
-
-
Total
$
78,394
29,376
(26)
$ 107,744
12. INVENTORIES
Finished goods
Work in progress
Raw materials
December 31
2018
2017
$
$
321,099
290,973
206,876
401,352
302,298
304,312
$
818,948
$ 1,007,962
The costs of inventories recognized as cost of goods sold for the years ended December 31, 2018 and 2017 were
$3,563,885 thousand and $3,563,885 thousand, respectively.
The costs of inventories recognized as costs of goods sold for the years ended December 31, 2018 and 2017 were as follows:
Inventory write - downs (reversed)
Income from scrap sales
Years Ended December 31
2017
2018
$ (35,411)
361
$ (11,426)
94
$ (35,050)
$ (11,332)
108
13. 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
2018
2017
Note
Percentage of Ownership
December 31
Sunplus
Sunplus Management Consulting
Management
Ventureplus Group Inc.
Investment
Sunplus Technology (H.K.)
International trade
Sunplus Venture
Lin Shih Investment
Investment
Investment
Sunplus mMobile Inc.
Design of ICs
Sunext Technology Co., Ltd.
Design of ICs
Sunplus Innovation Technology
Design of ICs
Generalplus Technology Inc.
Design of ICs
(“Generalplus”)
100.00
100.00
100.00
100.00
100.00
100.00
91.40
61.13
34.30
100.00
100.00
100.00
100.00
100.00
100.00
61.15
61.13
34.30
-
-
-
-
-
-
-
-
Sunplus and its subsidiaries had a
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
iCatch Technology Inc.
Design of ICs
-
37.64
The Group lost controlling interest
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
Ventureplus Mauritius
Ventureplus Mauritius
Ventureplus Cayman
Investment
Investment
Ventureplus Cayman
Ytrip Technology
Web research and development
over iCatch as of July 31, 2018;
thus the investee is no longer
included in the consolidated
financial statements; refer to Note
14 for the details.
100.00
100.00
100.00
87.20
100.00
-
-
-
-
-
-
Sunplus and its subsidiaries owned
97.08% of the equity in Jumplux
Technology.
100.00
100.00
-
-
68.80
Sunplus's subsidiaries had a 90.71%
stake in Ytrip.
100.00
100.00
100.00
89.76
100.00
55.00
100.00
100.00
38.47
Sunplus App Technology
Manufacturing and sale of
93.33
93.33
computer software; system
integration services and
information management and
education.
Sunplus Prof-tek Technology
Development of computer
100.00
100.00
(Shenzhen)
software, system integration
services, building rental
services and property
management
Sunplus Technology (Shanghai)
Development of computer
100.00
100.00
software, system integration
services and building rental
services
SunMedia Technology
Development of computer
100.00
100.00
software, system integration
109
-
-
-
-
services and building rental
services
Sunplus Technology (Beijing)
Development of computer
100.00
100.00
-
software, system integration
services and building rental
services
Sunplus Technology (Shanghai)
Xiamen Xm-plus
Manufacturing and sale of
-
100.00
The Group lost controlling interest
computer software and system
integration services
over Xiamen Xm-plus as of March
31, 2018; thus, the investee was not
included in the consolidated
financial statements; refer to Note
14 for the details.
Ytrip Technology
Web research and development
44.08
-
Sunplus's subsidiaries had a 90.71%
Ytrip Technology
1culture Communication
Development and sale
Sunplus Venture
Jumplux Technology
Design of ICs
Han Young Technology
Design of ICs
Sunext Technology Co., Ltd.
Design of ICs
(“Sunext”)
100.00
42.08
70.00
-
stake in Ytrip.
100.00
-
72.14
Sunplus and its subsidiaries owned
97.08% of the equity in Jumplux
70.00
Technology.
-
6.98
Sunplus and its subsidiaries had
91.40% equity in Sunext.
Sunplus mMedia
Design of ICs
7.64
9.55
Sunplus and its subsidiaries had 100%
Sunplus Innovation
Design of ICs
5.64
5.64
Sunplus and its subsidiaries had
equity in Sunplus mMedia.
iCatch Technology, Inc.
Design of ICs
-
6.05
The Group lost controlling interest
68.86% equity in Sunplus
Innovation
over iCatch as of July 31, 2018;
thus the investee is no longer
included in the consolidated
financial statements; refer to Note
14 for the details.
(Continued)
110
Percentage of Ownership
December 31
Name of Investor
Name of Investee
Main Businesses and Products
2018
2017
Note
Lin Shih
Generalplus Technology Inc.
Design of ICs
13.69
13.69
Sunplus and its subsidiaries had
Sunext Technology
Design of ICs
-
5.29
Due to organizational restructuring,
47.99% equity in Generalplus.
Sunplus mMedia
Design of ICs
2.60
3.25
Sunplus and its subsidiaries had 100%
Sunplus Innovation
Design of ICs
2.09
2.09
Sunplus and its subsidiaries had
equity in Sunplus mMedia.
the company transferred its equity
to Sunplus in 2018.
iCatch Technology
Design of ICs
-
1.75
The Group lost controlling interest
68.86% equity in Sunplus
Innovation
over iCatch as of July 31, 2018;
thus the investee is no longer
included in the consolidated
financial statements; refer to Note
14 for the details.
Generalplus
Generalplus Samoa
Generalplus Samoa
Generalplus Mauritius
Investment
Investment
Generalplus Mauritius
Generalplus Shenzhen
IC product development, after
100.00
100.00
100.00
100.00
100.00
100.00
sales service and market
research
Generalplus HK
Sales
100.00
100.00
-
-
-
-
Wei-Young
Sunext Technology Co., Ltd.
Design of ICs
Russell
Sunext Technology Co., Ltd.
Design of ICs
Sunplus mMedia Inc.
Jumplux Technology
Design of ICs
Award Glory
Sunny Fancy
Sunny Fancy
Giant Kingdom
Giant Rock
Investment
Investment
Investment
Giant Kingdom
Ytrip Technology
Web research and development
-
-
-
100.00
100.00
100.00
8.16
0.03
Due to organizational restructuring,
the company transferred its equity
to Sunplus in 2018.
0.70
Due to organizational restructuring,
the company transferred its equity
to Sunplus in 2018.
22.86
Due to organizational restructuring,
the company transferred its equity
to Sunplus in 2018.
100.00
100.00
100.00
-
-
-
14.60
Sunplus's subsidiaries had a 90.71%
stake in Ytrip.
(Concluded)
The financial statements as of and for the years ended December 31, 2017 of the above subsidiaries
except Sunplus Management Consulting had been audited by the auditors. The management of the
Company believes that the financial statements of Sunplus Management Consulting will not be subject
to major adjustments if it were audited.
b. Subsidiary excluded from the consolidated financial statements
The Voting Ratio of Noncontrolling
Equity
December 31
2018
2017
Company name
Generalplus Technology Inc.
52.01%
52.01%
111
Sunplus Innovation Technology
iCatch Technology
31.14%
-
31.14%
54.56%
Refer to attachment 6 for registered countries and company information:
Company Name
Profits Attributed to
Noncontrolling Interests
Years Ended December 31
2018
2017
Noncontrolling Interests
December 31
2018
2017
Generalplus Technology Inc.
Sunplus Innovation Technology
iCatch Technology
$
$
147,898
18,906
(20,889)
176,445
(635)
(38,445)
$ 1,109,947
283,063
-
$ 1,138,500
261,835
250,584
The summarized financial information below represents amounts before intragroup eliminations.
Current assets
Noncurrent assets
Current liabilities
Noncurrent liabilities
Equity
Equity attributable to:
Owners of the Company
Noncontrolling interests
Operating revenue
Net income
Other comprehensive income
December 31
2018
2017
$ 3,201,689
760,401
828,965
175,669
$ 3,959,132
783,624
1,137,685
201,562
$ 2,957,456
$ 3,403,509
$ 1,564,446
1,393,010
$ 1,752,590
1,650,919
$ 2,957,456
$ 3,403,509
For the Years Ended December 31
2018
2017
$ 4,223,670
$ 4,756,231
$
306,710
(10,077)
$
286,739
(18,398)
Total other comprehensive income
$
296,633
$
268,341
Equity attributable to:
Owners of the Company
Noncontrolling interests
Total other comprehensive attributable to:
Owners of the Company
Noncontrolling interests
Cash flows
Cash flows from operating activities
Cash flows used in investing activities
Cash flows used in financing activities
112
$
160,795
145,915
$
149,374
137,365
$
306,710
$
286,739
$
156,526
140,107
$
138,712
129,629
$
296,633
$
268,341
$
$
414,702
(146,496)
(296,520)
241,873
(52,177)
(340,361)
Effect of exchange rate changes on the balance of cash held in foreign
currencies
Net cash outflow
Dividend paid to noncontrolling interests
Generalplus Technology Inc.
(1,649)
3,970
$
(29,963)
$
146,695
$
(169,798)
$
(200,179)
113
14. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD
Investments in associates
a.
Investments in associates
Listed companies
Global View Co., Ltd.
iCatch Technology
Autsys Co., Ltd.
December 31
2018
2017
$ 729,219
$ 379,351
December 31
2018
2017
$ 307,106
350,859
71,254
$ 379,351
-
-
$ 729,219
$ 379,351
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
Global View Co., Ltd.
iCatch Technology
Autsys Co., Ltd.
December 31
2018
2017
13%
36%
19%
13%
-
-
Refer to Table 5 following these Notes to Consolidated Financial Statements for information on the associates’
business types, main operating locations and registered countries, and Table 6 following these Notes for the
information on investments in mainland China.
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 they lost control of Sunplus
Technology Xiamen Xm-plus. As a result, the Company's equity investment in Xiamen Xm-plus was reclassified to
“investments accounted for using the equity method” on March 31, 2018 and the equity investment was re-measured
at fair value, and a disposal gain of $27,061 thousand was recognized.
In July 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
45% to 19%.
The board of directors of Xiamen Xm-plus Technology Ltd. was re-elected on December 19, 2018. The Company
had lost significant influence on Xiamen Xm-plus Technology Ltd. As a result, the “investments accounted for
using the equity method” is classified as “financial assets at fair value through profit or loss”.
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. As a result, the Company
reclassified its equity in iCatch Technology Inc. as “investments accounted for using the equity method” on July 31,
2018 and the equity investment was re-measured at fair value, and a disposal gain of $143,836 thousand was
recognized.
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
December 31
2018
2017
114
Global View, Co., Ltd.
$ 248,530
$ 392,134
The summarized financial information of the Group’s associates is set out below:
Total assets
Total liabilities
Revenue
Profit for the period
Comprehensive income
Group’s share of profits of associates
December 31
2018
2017
$ 2,569,477
369,039
$
$ 2,062,675
129,672
$
Years Ended December 31
2017
2018
$ 1,005,661
(45,428)
$
(103,126)
$
(44,862)
$
$
$
$
$
188,461
53,596
739,555
91,044
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, 2018 and 2017 was based on the associates’ financial
statements audited by the auditors for the same years.
15. PROPERTY, PLANT AND EQUIPMENT
Machinery
Prepayments
Auxiliary
and
Testing
Transportation
Furniture and
Leasehold
Other
Construction
for
Year Ended December 31, 2017
Buildings
Equipment
Equipment
Equipment
Equipment
Fixtures
Improvements
Equipment
in Progress
Equipment
Total
Cost
Balance at January 1, 2017
$ 2,420,928
$ 202,883
$
16,161
$ 581,209
$
7,020
$ 260,976
$
3,284
$
21,278
$
25
$
-
$ 3,513,764
Additions
Disposals
Reclassified to investment
-
-
14,060
1,144
74,072
1,612
10,862
640
(8,772 )
(2,430 )
(53,855 )
(221 )
(12,586 )
(506 )
698
(62 )
property
-
(23,676 )
-
25
-
-
23,676
-
Effect of exchange rate changes
(13,579 )
(6 )
256
(35,001 )
(565 )
(1,369 )
(742 )
(142 )
-
-
(25 )
-
-
103,086
-
-
-
(78,432 )
-
(51,148 )
Balance at December 31, 2017
$ 2,407,349
$ 184,489
$
15,131
$ 566,450
$
7,846
$ 257,883
$
26,352
$
21,772
$
-
$
-
$ 3,487,272
Accumulated depreciation
Balance at January 1, 2017
$ 404,240
$
95,601
$
15,329
$ 480,895
$
3,282
$ 216,976
$
2,269
$
17,764
$
-
$
-
$ 1,236,356
Depreciation expense
53,059
25,593
702
84,445
977
22,113
453
1,099
Disposals
-
(8,772 )
(2,353 )
(53,190 )
(216 )
(10,926 )
(506 )
(62 )
Reclassified to investment
property
-
(2,762 )
-
-
-
-
2,762
Effect of exchange rate changes
(497 )
(163 )
(178 )
(33,737 )
(487 )
(1,839 )
(283 )
-
32
-
-
-
-
-
188,441
-
(76,025 )
-
-
-
(37,152 )
Balance at December 31, 2017
$ 456,802
$ 107,497
$
13,500
$ 478,413
$
3,556
$ 226,324
$
4,695
$
18,833
$
-
$
-
$ 1,311,620
Accumulated impairment
Balance at December 31, 2017
$
-
$
-
$
-
$
11,498
$
-
$
-
$
-
$
-
$
-
$
-
$
11,498
Carrying amounts at
December, 2017
$ 1,950,547
$
74,992
$
1,631
$
76,539
$
4,290
$
31,559
$
21,657
$
2,939
$
-
$
-
$ 2,164,154
115
116
Machinery
Payable for
Auxiliary
and
Testing
Transportation
Furniture and
Leasehold
Other
Construction
purchases of
Year Ended December 31, 2018
Buildings
Equipment
Equipment
Equipment
Equipment
Fixtures
Improvements
Equipment
in Progress
Equipment
Total
Cost
Balance at January 1, 2018
Additions
Disposals
Reclassified to investment
property
Consolidated changes
Effect of exchange rate changes
$ 2,407,349
-
-
$ 184,489
882
(9,476 )
$
15,131
1,576
(1,836 )
$ 566,450
133,708
(5,908 )
$
7,846
-
(1,790 )
$ 257,883
19,426
(6,625 )
$
-
-
(24,104 )
23,676
-
(5,697 )
-
-
(1,142 )
-
(77,014 )
(707 )
-
-
(152 )
45
(1,224 )
(3,174 )
26,352
125
-
(23,676 )
(516 )
497
$
$
21,772
253
(1,237 )
-
-
3,171
-
45
-
(45 )
-
-
$
-
2,940
-
$ 3,487,272
158,955
(26,872 )
-
-
-
-
(78,754 )
(31,308 )
Balance at December 31, 2018
$ 2,383,245
$ 193,874
$
13,729
$ 616,529
$
5,904
$ 266,331
$
2,782
$
23,959
$
-
$
2,940
$ 3,509,293
Accumulated depreciation
Balance at January 1, 2018
Depreciation expense
Disposals
Reclassified to investment
property
Consolidated charges
Effect of exchange rate changes
$ 456,802
53,993
-
$ 109,497
21,608
(9,476 )
$
13,500
3,612
(1,115 )
$ 478,413
101,194
(6,389 )
$
$
3,556
1,348
(22 )
$ 226,324
15,746
(7,741 )
-
-
(2,977 )
2,762
-
2,466
-
-
(3,238 )
-
(34,174 )
1,551
-
-
(1,249 )
-
(505 )
(1,828 )
4,695
5,272
-
(2,762 )
(473 )
(4,401 )
$
$
18,833
773
(1,237 )
-
-
1,078
$
-
-
-
-
-
-
-
-
-
-
-
-
$ 1,311,620
203,546
(25,980 )
-
(35,152 )
(8,598 )
Balance at December 31, 2018
$ 507,818
$ 126,857
$
12,759
$ 540,595
$
3,633
$ 231,996
$
2,331
$
19,447
$
-
$
-
$ 1,445,436
Accumulated impairment
Balance at December 31, 2018
$
-
$
-
$
-
$
11,498
$
-
$
-
$
-
$
-
$
-
$
-
$
11,498
Balance at December 31, 2017
and January 1, 2018
Carrying amounts at
December, 2018
$ 1,950,547
$
74,992
$
1,631
$
76,539
$
4,290
$
31,559
$
21,657
$
2,939
$
$ 1,875,427
$
67,017
$
970
$
64,436
$
2,271
$
34,335
$
451
$
4,512
$
-
-
$
$
-
$ 2,164,154
2,940
$ 2,052,359
The above items of property, plant and equipment are depreciated on a straight-line basis over the following estimated
useful lives:
Buildings
Auxiliary equipment
Machinery and equipment
Testing equipment
Transportation equipment
Furniture and fixtures
Leasehold improvements
Other equipment
10-56 years
3-11 years
3-10 years
1-5 years
4-10 years
3-5 years
5-11 years
3-10 years
Refer to Note 35 for the carrying amounts of property, plant and equipment that had been pledged by the Group to secure
borrowings.
16. INVESTMENT PROPERTIES
Investment
Properties
117
Cost
Balance at January 1, 2017
Additions
Reclassified
Effect of exchange rate differences
Balance at December 31, 2017
Accumulated depreciation
Balance at January 1, 2017
Depreciation expense
Effect of exchange rate differences
Balance at December 31, 2017
$ 1,444,993
6,592
(268)
(16,256)
1,435,061
(226,089)
(71,542)
1,621
(296,010)
$ 1,139,051
(Continued)
118
Cost
Balance at January 1, 2018
Additions
Reclassified
Effect of exchange rate differences
Balance at December 31, 2018
Accumulated depreciation
Balance at January 1, 2018
Depreciation expense
Effect of exchange rate differences
Balance at December 31, 2018
Investment
Properties
$ 1,435,061
3,891
(10,016)
(28,801)
1,400,135
$
(296,010)
(72,240)
7,429
(360,821)
$ 1,039,314
(Concluded)
The investment properties held by the Group are depreciated over their useful lives of 5 to 20 years, using the
straight-line method.
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. and Beijing
Great Wall Joint Property Assessment LLC. The fair value was measured by using Level 3 inputs. The evaluation
adopted the income method, and the important unobservable input values used include the discounted value. The
evaluated fair value is as follows:
December 31
2018
2017
Fair value
$ 1,267,909
$ 1,755,274
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 method, and the important unobservable input values used include the discounted value. The evaluated fair value
is as follows:
Fair value
$ 2,471,410
$ 2,310,166
December 31
2018
2017
119
17. INTANGIBLE ASSETS
Technology
License Fees
Software
Patents
Goodwill
Technological
Know-how
Total
Year Ended December 31, 2017
Cost
Balance at January 1
Additions
Decrease
Reclassified
Effect of exchange rate
differences
$ 716,741 $ 393,456 $ 114,229 $
30,596 $
99,512
(99,113)
44,922
29,101
(65,129)
(45,695)
370
(999)
-
-
271
10
-
-
-
2,460 $ 1,257,482
128,613
(168,124)
(502)
-
(3,882)
-
-
1,422
803
Balance at December 31
$ 762,432 $ 310,734 $ 114,510 $
30,596 $
- $ 1,218,272
Accumulated amortization
Balance at January 1
Amortization expense
Decrease
Reclassified
Effect of exchange rate
differences
$ 527,506 $ 346,256 $
63,947
(99,113)
36,268
30,978
(65,129)
(36,302)
64
(515)
79,091 $
2,720
-
34
1
- $
-
-
-
2,460 $ 955,322
97,645
(168,124)
-
-
(3,882)
-
-
1,422
972
Balance at December 31
$ 528,672 $ 275,297 $
81,846 $
- $
- $ 885,815
Accumulated deficit
Balance at January 1
Addition
$ 111,136
$
3,613
$
-
-
$
-
21,577
$
-
-
-
-
$ 111,136
25,190
Balance at December 31
$ 114,749 $
- $
21,577 $
- $
- $ 136,326
Carrying amounts at
December 31, 2017
$ 119,011
$
35,437
$
11,087
$
30,596
$
-
$ 196,131
Technology
License Fees
Software
Patents
Goodwill
Technological
Know-how
Total
Year Ended December 31, 2018
Cost
Balance at January 1
Additions
Decrease
Effect of exchange rate
differences
Consolidated changes
$ 762,432 $ 310,734 $ 114,510 $
30,596 $
66,784
(20,568)
24,736
(22,271)
-
-
-
-
(500)
(29,641)
(3,439)
(11,151)
(6)
-
-
-
- $ 1,218,272
91,520
-
(42,839)
-
-
-
(3,945)
(40,792)
Balance at December 31
$ 778,507 $ 298,609 $ 114,504 $
30,596 $
- $ 1,222,216
Accumulated amortization
Balance at January 1
Amortization expense
Decrease
Effect of exchange rate
differences
$ 528,672 $ 275,297 $
54,526
(20,568)
26,340
(22,271)
81,846 $
1,371
-
- $
-
-
- $ 885,815
82,237
-
(42,839)
-
(181)
(375)
(2)
-
-
(558)
120
Consolidated changes
(5,534)
(8,139)
-
-
-
(13,673)
Balance at December 31
$ 556,915 $ 270,852 $
83,215 $
- $
- $ 910,982
(Continued)
121
Technology
License Fees
Software
Patents
Goodwill
Technological
Know-how
Total
Year Ended December 31, 2018
Accumulated deficit
Balance at January 1
Consolidated changes
$ 114,749
$
(3,613)
$
-
-
21,577
$
-
$
-
-
-
-
$ 136,326
(3,613)
Balance at December 31
$ 111,136
$
- $
21,577 $
- $
- $ 132,713
Carrying amounts at
December 31, 2018
$ 110,456
$
27,757
$
9,712
$
30,596
$
-
$ 178,521
(Concluded)
Impairment loss recognized on the above intangible assets was $25,190 thousand for the year ended December 31, 2017.
These intangible assets are amortized on a straight-line basis over the useful lives of the assets, estimated as follows:
Technology license fees
Software
Patents
Technological know-how
An analysis of depreciation by function
Operating costs
Selling and marketing expenses
General and administrative expenses
Research and development expenses
18. OTHER ASSETS
Current
Other financial assets
Pledged time deposits (a)
Other assets
Pledged for EDA tools
Finance lease payables (c)
Others
1-10 years
1-10 years
8-18 years
5 years
For the Year Ended December 31
2018
2017
$
228
110
6,743
75,156
$
629
100
7,067
89,849
$
82,237
$
97,645
December 31
2018
2017
$ 153,575
$ 291,373
$
17,194
2,756
71,371
$
25,929
2,814
72,218
$
91,321
$ 100,961
(Continued)
December 31
2018
2017
122
Noncurrent
Other financial assets
Pledged time deposits (a)
Time deposits (b)
Other assets
Finance lease payables (c)
Refundable deposits
Prepaid long-term investment
Others
$
10,943
116,272
$
11,386
73,040
$ 127,215
$
84,426
$ 102,175
7,749
30,001
7,800
$ 107,113
7,456
-
11,370
$ 147,725
$ 125,939
(Concluded)
a. Refer to Notes 33 and 37 for information on pledged time deposits.
b. Generalplus Shenzhen invested RMB26,000 thousand and RMB16,0000 thousand in long-term certificates of
deposit with the bank in August 2016 and July 2018 (for durations of two to 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 land grants in China as of December 31, 2018 and 2017 were
$104,931 thousand and $109,927 thousand, respectively.
19. LOANS
Short-term borrowings
Secured borrowings
Bank loans
Unsecured borrowings
Bank loans
December 31
2018
2017
$ 122,769
$ 208,800
188,446
235,311
$ 311,215
$ 444,111
The weighted average effective interest rates for bank loans from January 1, 2018 to December 31, 2018 and from
January 1, 2017 to December 31, 2017 were 2.500%-3.594% and 1.800%-2.650% per annum, respectively.
123
Long-term borrowings
The borrowings of the Group were as follows:
Maturity Date
Significant Covenant
2018
2017
December 31
Floating rate borrowings
Unsecured bank borrowings
Unsecured bank borrowings
Unsecured bank borrowings
2019.10.14
2019.11.10
2019.2.14
Repayable in October 2019
Repayable semiannually from November 2016
Repayable quarterly from February 2014
$
135,046
100,000
15,000
250,046
250,046
$
149,143
200,000
75,000
424,143
175,000
$
-
$
249,143
Less: Current portion
Long-term borrowings
The effective borrowing rates as of December 31, 2018 and 2017 were 1.545%-3.959% and 1.545%-2.655%.
According to the loan contract, the consolidated financial statements of the company for 107 and 106 years are limited
by current ratio, debt ratio, interest guarantee multiple and current ratio, debt ratio and a restriction on net tangible assets.
However, the Company’s inability to meet the ratio requirements would not be deemed as a violation of the contracts. As
of 2018 and 2017, the Company was in compliance with these financial ratio requirements.
20. TRADE PAYABLES
Accounts payable
Payable - operating
December 31
2018
2017
$ 484,810
$ 723,983
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.
21. PROVISIONS
Customer returns and rebates
December 31,
2017
$ 11,555
The provision for customer returns and rebates was based on historical experience, management’s judgments and other
known reasons estimated product returns and rebates may occur in the year. The provision was recognized as a reduction
of operating income in the periods of the related goods sold.
124
22. OTHER LIABILITIES
Current
Other payables
Salaries or bonuses
Compensation due to directors
Payable for royalties
Commissions payable
Labor/health insurance
Refund liabilities (Note 25)
Payables for purchases of equipment
Payables for labor
Receipt in advance
Others
Deferred revenue
Deferred revenue
December 31
2018
2017
$ 299,445
59,190
42,261
39,772
29,424
14,796
8,670
6,403
3,767
68,818
$ 347,067
85,979
38,743
36,667
28,702
-
23,444
8,615
51,096
152,545
$ 572,546
$ 772,858
Arising from government grants (Note 30)
$
1,629
$
1,663
Non-current
Other payable
Payables for purchases of equipment
Decommissioning liabilities
$
2,376
889
$
3,265
$
$
-
889
889
Deferred revenue
Arising from government grants (Note 30)
$
61,894
$
64,844
23. 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
125
managed by the Bureau of Labor Funds, Ministry of Labor (“the Bureau”); the company has no right to
influence the investment policy and strategy.
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:
December 31
2018
2017
Present value of funded defined benefit obligation
Fair value of plan assets
$ 268,025
(188,770)
$ 290,833
(191,869)
Net liabilities arising from defined benefit obligation
$
79,255
$
98,964
Movements in net defined benefit liabilities were as follows:
Present Value of
Funded Defined
Benefit
Obligation
Fair Value of
Plan Assets
Net Defined
Benefit Liabilities
(Assets)
$ 278,239
$ 185,639
$
92,600
Balance at January 1, 2017
Service cost
Current service cost
Net interest expense (income)
Recognized gain and loss
Remeasurement
Return on plan assets
Actuarial (gain) loss-experience adjustment
Actuarial (gain) loss-changes in demographic
assumptions
Actuarial loss-changes in financial assumptions
Recognized in other comprehensive income
Benefit paid
771
4,357
5,128
-
64
2,530
4,872
7,466
-
-
2,993
2,993
(1,589)
-
-
-
(1,589)
4,826
771
1,364
2,135
1,589
64
2,530
4,872
9,055
(4,826)
Balance at December 31, 2017
$ 290,833
$ 191,869
$
98,964
Balance at January 1, 2018
Service cost
Current service cost
Net interest expense (income)
Recognized gain and loss
Remeasurement
Return on plan assets
Actuarial (gain) loss-experience adjustment
Actuarial (gain) loss-changes in demographic
assumptions
Actuarial loss-changes in financial assumptions
Recognized in other comprehensive income
$ 290,833
$ 191,869
$
98,964
789
3,587
4,376
-
(4,068)
(53)
5,222
1,101
-
2,513
2,513
4,596
-
-
-
4,596
789
1,074
1,863
(4,596)
(4,068)
(53)
5,222
(3,495)
(Continued)
126
Contributions from the employer
Consolidated changes
Liabilities extinguished on settlement
Present Value of
Funded Defined
Benefit
Obligation
$
-
(24,373)
(3,912)
Fair Value of
Plan Assets
$
5,932
(8,609)
(7,531)
Balance at December 31, 2018
$ 268,025
$ 188,770
Net Defined
Benefit Liabilities
(Assets)
$
(5,932)
(15,764)
3,619
$
79,255
(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
2018
2017
$
215
234
453
904
$
273
251
522
1,147
Net liability arising from defined benefit obligation
$
1,806
$
2,193
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
2018
2017
1.10%-1.20%
4.00%-5.00%
0%-28%
1.25%-1.50%
3.50%-6.25%
0%-29%
127
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,
2018
December 31,
2017
$
$
$
$
(8,405)
8,761
35,932
(31,147)
$
$
$
$
(9,901)
10,306
40,268
(35,114)
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
$
9,106
$
4,829
Average duration of the defined benefit obligation
14-17 years
14-18 years
December 31
2018
2017
24. EQUITY
a. Share capital
1) Common shares:
December 31
2018
2017
Number of shares authorized (in thousands)
Shares authorized
Number of shares issued and fully paid (in thousands)
Shares issued
1,200,000
$ 12,000,000
591,995
5,919,949
$
1,200,000
$ 12,000,000
591,995
5,919,949
$
Fully paid common 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 common 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, 2018, the outstanding 175 thousand units of
GDRs represented 350 thousand common shares.
128
b. Capital surplus
December 31
2018
2017
May be used to offset a deficit, distributed as cash dividends, or
transferred to share capital (a)
Arising from the issuance of common 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
$ 409,213
157,423
$ 496,059
157,423
140,022
140,293
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
43,958
50,782
41,466
-
$ 801,398
$ 835,241
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$0.5 per share.
Under the regulations promulgated, a special reserve equivalent to the debit balance of any account shown in the
shareholders’ equity section of the balance sheet (for example, unrealized loss on financial assets and cumulative
translation adjustments) should be allocated from unappropriated retained earnings. For the policies on distribution
of employees’ compensation and remuneration to directors before and after amendment, refer to Note 26-g.
Appropriation of earnings to legal reserve shall be made until the legal reserve equals the Company’s paid-in capital.
Legal reserve may be used to offset deficit. If the Company has no deficit and the legal reserve has exceeded 25% of
the Company’s paid-in capital, the excess may be transferred to capital or distributed in cash.
129
The Company appropriates or reverses a special reserve in accordance with Rule No. 1010012865 and Rule No.
1010047490 issued by the FSC and the directive entitled “Questions and Answers on Special Reserves
Appropriated Following the Adoption of IFRSs”. Distributions can be made out of any subsequent reversal of the
debit to other equity items.
The appropriations from the 2017 and 2016 earnings were approved at the shareholders’ meetings in June 11, 2018
and on June 13, 2017, respectively. The appropriations, including dividends, were as follows:
Appropriation of Earnings
Dividends Per Share (NT$)
For Year 2017
For Year 2016
For Year 2017
For Year 2016
Legal reserve
Special reserve
Cash dividend
$
41,321
44,284
327,551
$
9,974
1,068
88,681
$
0.5333
$
0.1498
The Company’s shareholders also proposed in the shareholders’ meeting on June 11, 2018 to issue cash dividends
from capital surplus of $86,846 thousand.
The Company’s shareholders also proposed in the shareholders’ meeting on June 13, 2017 to issue cash dividends
from capital surplus of $207,317 thousand.
The appropriations of earnings, the bonuses for employees, and the remuneration of directors for 2018 are subject to
resolution in the shareholders’ meeting to be held on March 20, 2016.
Legal reserve
Special reserve
Appropriation of
Earnings
Dividends Per
Share (NT$)
561
$
241,173
$
-
-
The Company’s board of directors also proposed in the shareholders’ meeting on March 20, 2019 to issue cash
dividends from capital surplus of $213,118 thousand.
The appropriation of earnings for 2018 is subject to resolution in the shareholders’ meeting to be held on June 10,
2019.
d. Special reserve
Beginning at January 1
Appropriations to the special reserve
Balance at December 31
For the Year Ended December 31
2018
2017
$ 22,995
44,284
$ 21,927
1,068
$ 67,279
$ 22,995
130
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
2) Unrealized gain (loss) from available-for-sale financial assets:
For the Year Ended December 31
2018
2017
$ (122,100)
(13,871)
$
(62,062)
(59,220)
(2,904)
(818)
$ (138,875)
$ (122,100)
For the Year
Ended December
31, 2017
Balance at January 1, 2017
Changes in fair value of available-for-sale financial assets
Cumulative (gain)/loss reclassified to profit or loss on sale of available-for-sale financial
$ 306,462
356,999
assets
Share of unrealized gain on revaluation of available-for-sale financial assets of associates
accounted for using the equity method
Balance at December 31, 2018
Effect of retrospective application and retrospective restatement - IFRS 9
Balance at January 1, 2018 (IFRS 9)
(610,076)
6,453
59,838
(59,838)
$
-
3) Unrealized gain (loss) from investments in equity instruments measured at fair value through other
comprehensive income:
Balance at January 1 (IAS 39)
Effect of retrospective application and retrospective restatement - IFRS 9
Balance at January 1 (IFRS 9)
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, 2018
$
-
(230,011)
(230,011)
(104,028)
37,070
(6,999)
$ (303,968)
131
f. Non-controlling interests
For the Year Ended December 31
2018
2017
Balance at January 1
Effect of retrospective application and retrospective restatement - IFRS
$ 1,677,049
$ 1,663,923
9
Attributable to no controlling interests:
Share of profit for the year
Exchange difference on translation foreign operations
Unrealized losses on available-for-sale financial assets
Unrealized gain (loss) on financial assets at FVTOCI
Actuarial gains on defined benefit plans
Distribution of dividends by associates
Partial disposal of subsidiaries
Noncontrolling interests - restricted shares options held by subsidiaries’
employees
Noncontrolling interests related to outstanding vested share options
held by the employees of subsidiaries
Disposal of subsidiaries (Note 31)
Others
1,478
136,707
(4,190)
-
343
(1,165)
(169,798)
-
-
37
(229,844)
(8,953)
-
129,770
(3,711)
(3,772)
-
(400)
(200,179)
88,842
142
78
-
2,356
Balance at December 31
$ 1,401,664
$ 1,677,049
g. Treasury shares
Purpose of Buyback
Number of shares as of January 1, 2017
Decrease
Number of shares as December 31, 2017
Number of shares as of January 1, 2018
Decrease
Number of shares as December 31, 2018
Shares
Transferred to
Employees (In
Thousands of
Shares)
Shares Held by
Its Subsidiaries
(In Thousands of
Shares)
Total (In
Thousands of
Shares)
-
-
-
-
-
-
3,560
-
3,560
3,560
-
3,560
3,560
-
3,560
3,560
-
3,560
The Group’s shares held by its subsidiaries at the end of the reporting periods were as follows:
Purpose of Buyback
December 31, 2018
Shares
Transferred to
Employees (in
Thousands of
Shares)
Shares Held by
Its Subsidiaries
(in Thousands of
Shares)
Total (in
Thousands of
Shares)
Lin Shin Investment Co., Ltd
3,560
$ 63,401
$ 40,050
(Continued)
132
Purpose of Buyback
December 31, 2017
Shares
Transferred to
Employees (in
Thousands of
Shares)
Shares Held by
Its Subsidiaries
(in Thousands of
Shares)
Total (in
Thousands of
Shares)
Lin Shin Investment Co., Ltd
3,560
$ 63,401
$ 58,384
(Concluded)
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.
25. REVENUE
Revenue from contracts with customers
Rental income from property
Other
a. Contract information
Revenue from the sale of goods
For the Year Ended December 31
2018
2017
$ 5,663,059
199,184
215,490
$ 6,419,659
216,055
184,523
$ 6,077,733
$ 6,820,237
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. Disaggregation of revenue
For the Year Ended December 31, 2018
Primary geographical markets
Asia
Taiwan
Others
133
Reportable
Segments
Direct Sales
$ 4,067,191
1,908,470
102,072
$ 6,077,733
(Continued)
Reportable
Segments
Direct Sales
Timing of revenue recognition
Satisfied at a point in time
Satisfied over time
c. Contract balances
Note and trade receivables (Note 11)
Contract liabilities - current
$ 5,812,317
265,416
$ 6,077,733
(Concluded)
December 31,
2018
$ 954,030
7,511
$
The variation of contract liabilities is mainly due to the difference between the time when the performance
obligation is met and the payment schedule of the customer.
26. NET PROFIT
Net profit included the following items:
a. Other income
Dividend income
Interest income
Others
b. Other gains and losses
Gain on disposal of investment
Gain on disposal of subsidiary/associates
Net gain (loss) on financial assets and liabilities
Net gain (loss) on financial assets designated as at FVTPL (Note 7)
Net foreign exchange loss
Loss on reversal of impairment loss on financial assets
Loss on non-financial assets
Others
c. Finance costs
Interest on bank loans
Other finance costs
134
For the Year Ended December 31
2018
2017
$
23,564
26,314
66,585
$
23,230
22,111
52,344
$ 116,463
$
97,685
For the Year Ended December 31
2018
2017
$
-
182,621
$ 642,140
-
67,736
(15,895)
-
-
11,540
4,901
(64)
(25,190)
(203,363)
6,543
$ 246,002
$ 424,967
For the Year Ended December 31
2018
2017
$ 21,239
2,584
$ 24,530
1,696
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
$ 23,823
$ 26,226
For the Year Ended December 31
2018
2017
$
79,758
196,028
$
79,327
180,656
$ 275,786
$ 259,983
$
228
82,009
$
629
97,016
$
82,237
$
97,645
For the Year Ended December 31
2018
2017
Direct operating expenses from investment property that generated rental
income
$ 76,191
$ 77,210
f. Employee benefit expense
Short-term benefits
Post-employment benefits
Defined contribution plans
Defined benefit plans (Note 23)
Other employee benefits
Share-based payments
Equity-settled
Other employee benefits
For the Year Ended December 31
2018
2017
$ 1,716,303
$ 1,833,142
56,066
1,806
57,872
37
28,418
54,695
2,193
56,888
220
27,157
Total employee benefit expense
$ 1,802,630
$ 1,917,407
An analysis of employee benefit expense by function
Operating costs
Operating expenses
$
136,269
1,666,361
$
157,293
1,760,114
$ 1,802,630
$ 1,917,407
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, 2018 and 2017, which have been approved by the Company’s board of
directors on March 20, 2019 and March 14, 2018, respectively, were as follows:
Accrual rate
135
Employees’ compensation
Remuneration of directors
Amount
For the Year Ended December 31
2018
1.00%
1.50%
2017
1.00%
1.50%
For the Year Ended December 31
2018
2017
Cash
Shares
Cash
Shares
Employees’ compensation
Remuneration of directors
$
$
80
119
$
-
-
4,323
6,484
$
-
-
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, 2017
and 2016.
Information on the employees’ compensation and remuneration of directors resolved by the Company’s board of
directors in 2019 and 2018 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
2018
2017
$ 140,569
(156,464)
$ 181,405
(181,469)
$
(15,895)
$
(64)
136
27. 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
For the Year Ended December 31
2018
2017
$ 86,720
(24,496)
(1,518)
60,706
$ 92,937
(7,310)
-
85,627
961
(2,200)
Income tax expense recognized in profit or loss
$ 61,667
$ 83,427
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
Additional income tax under the Alternative Minimum Tax Act
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
Years Ended December 31
2017
2018
$ 203,990
$ 634,655
$
40,798
1,710
$ 107,891
3,258
(11,962)
(22,380)
(885)
-
-
(47)
7,234
961
77,806
(24,496)
1,680
(1,518)
(125,363)
37,484
(876)
9,471
(3,306)
(40)
28,519
(2,200)
64,418
(7,310)
-
-
Income tax expense recognized in profit or loss
$
61,667
$
83,427
Based on the Income Tax Act in the ROC, the applicable corporate tax rate used by the Group in 2017 was 17%. In
February 2018, the Income Tax Act in the ROC was amended and, starting from 2018, the corporate income tax rate
has been adjusted from 17% to 20%. In addition, the rate of the corporate surtax applicable to the 2018
unappropriated earnings has been reduced from 10% to 5%.
As the status of the appropriation of earnings in 2019 is uncertain, the potential income tax consequences of the
2018 unappropriated earnings are not reliably determinable.
137
b. Current tax assets and liabilities
December 31
2018
2017
Current tax assets
Tax refund receivable (classified as other receivable)
$
871
$
3,431
Current tax liabilities
Income tax payable
c. Deferred tax assets and liabilities
$ 56,972
$ 60,946
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, 2018
Deferred Tax Assets
Opening Balance
Recognized in
Profit or Loss
Closing Balance
Temporary differences
Unrealized loss on inventories
Fixed assets
Unrealized sales
Exchange (gains) losses
Other
For the year ended December 31, 2017
$
19,913
864
658
(924)
10,704
$
(7,811)
3,199
17
(79)
3,713
$
12,102
4,063
675
(1,003)
14,417
$
31,215
$
(961)
$
30,254
Deferred Tax Assets
Opening Balance
Recognized in
Profit or Loss
Closing Balance
Temporary differences
Unrealized loss on inventories
Fixed assets
Unrealized sales
Exchange (gains) losses
Other
$
18,669
2,992
622
(1,326)
8,058
$
1,244
(2,128)
36
402
2,646
$
19,913
864
658
(924)
10,704
$
29,015
$
2,200
$
31,215
138
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
Loss Carryforwards
Expiry in 2018
Expiry in 2019
Expiry in 2020
Expiry in 2021
Expiry in 2022
Expiry in 2023
Expiry in 2024
Expiry in 2025
Expiry in 2026
Expiry in 2027
Expiry in 2027
Expiry in 2028
December 31
2018
2017
$
$
-
257,108
251,700
551,637
536,364
1,467,084
65,199
49,489
55,551
88,194
132,947
200,391
257,108
251,700
551,637
536,364
1,486,011
65,199
49,489
139,632
130,842
-
$ 3,455,273
$ 3,668,373
Deductible temporary differences
$
177,411
$
510,560
e. Unused loss carryforwards and tax-exemptions
Loss carryforwards as of December 31, 2018 pertaining to Sunplus:
Unused Amount
$
190,618
211,457
322,509
394,894
1,144,831
24,228
$ 2,288,537
Loss carryforwards as of December 31, 2018 pertaining to Sunplus Venture:
Unused Amount
$
30,907
17,891
4,863
92,197
$
145,858
Expiry Year
2019
2020
2021
2022
2023
2027
Expiry Year
2019
2020
2022
2023
139
Loss carryforwards as of December 31, 2018 pertaining to Lin Shin:
Unused Amount
$
9,864
39,908
$
49,772
Loss carryforwards as of December 31, 2018 pertaining to Sunext:
Unused Amount
$
120,088
100,760
159,490
31,147
975
2,618
$
415,078
Expiry Year
2019
2023
Expiry Year
2021
2022
2023
2024
2025
2028
Loss carryforwards as of December 31, 2018 pertaining to Sunplus mMedia:
Unused Amount
Expiry Year
$
25,719
22,352
109,040
35,847
30,658
29,360
27,164
11,155
9,369
57,436
$
358,100
Loss carryforwards as of December 31, 2018 pertaining to Jumplux:
Unused Amount
$
4,692
21,350
44,396
54,597
72,893
$
197,928
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
Expiry Year
2024
2025
2026
2027
2028
140
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
Income tax assessments
January 1, 2015 to December 31, 2019
January 1, 2015 to December 31, 2019
The income tax returns of Sunplus and Sunplus mMobile through 2015 and Generalplus, Sunplus Innovation,
Sunext, Sunplus mMedia, Sunplus management Consulting, Wei-Yough, Lin Shih, Sunplus Venture and Jumplus
through 2016 had been assessed by the tax authorities.
28. EARNINGS PER SHARE
Basic gain per share
Diluted earnings per share
Unit: NT$ Per Share
For the Year Ended December 31
2018
2017
$
$
0.01
0.01
$
$
0.72
0.72
The earnings and weighted average number of common 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 common shares
Bonuses for employees
Years Ended December 31
2017
2018
$
5,616
$ 421,458
-
-
Earnings used in the computation of diluted EPS from continuing operations
$
5,616
$ 421,458
The weighted average number of common shares outstanding (in thousand shares) is as follows:
For the Year Ended December 31
2018
2017
Weighted average number of common shares used in the computation of
basic earnings per shares
Effect of dilutive potential common shares:
Bonuses issued to employees
588,435
588,435
60
284
Weighted average number of common shares used in the computation of
diluted earnings per share
588,495
588,719
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.
141
29. SHARE-BASED PAYMENT ARRANGEMENTS
Employee share option plan
In their meeting on June 28, 2012, the shareholders of Sunplus Innovation Technology Inc. (SITI) approved a plan on a restricted employee share option
plan (ESOP), through which employees would receive 2,400 thousand shares amounting to $24,000 thousand, with no up-front cost and at a par value of
$10.00; the Financial Supervisory Commission approved this plan on June 28, 2013.
On August 7, 2013, under the board of directors’ approval, SITI executed the restricted ESOP, through which employees received 1,000 thousand shares
at a par value of $10.00 with no up-front cost. The shares were issued and granted on August 15, 2013, with the fair value of $8.7699.
In their meeting on April 18, 2014, the shareholders of Sunplus Innovation Technology Inc. (SITI) approved the second plan of the restricted employee
share option plan (ESOP), through which employees would receive 1,400 thousand shares amounting to $14,000 thousand, with no up-front cost and at a
par value of $10.00. The shares were issued and granted on April 19, 2014, with the fair value of $6.0599.
Under the restricted ESOP, employees who are still employed by SITI and pass the annual performance appraisal are eligible for a certain percentage of
shareholding, as stated below.
a. 50% shareholding ratio after the second anniversary from the grant date;
b. 50% of the shareholding ratio after the third anniversary from the grant date.
The restrictions under the ESOP are as follows:
a. During the duration of the restricted ESOP, the employee may not sell, discount, transfer, grant, enact, or by any
other method dispose of the shares.
b. During the duration of the restricted ESOP, employees will still receive share and/or cash dividends, and also have
rights to join the capital increase by cash plan (if any).
c. Shares must be handed over to the trustees after the publication of the ESOP, and the Company may not request a
return of the ESOP before the realization of the vesting conditions. If employees fail to meet the vesting conditions,
SITI has the right to take back and cancel the limited employee share options, but the Company will still grant
employees share and cash dividends generated during the vesting period.
142
Information about the Sunplus Innovation’s restricted share option plan for the year ended December 31, 2018 and 2017
was as follows:
Balance at January 1
Vested
Balance at December 31
30. GOVERNMENT GRANTS
Number of Restricted Shares
(In Thousands)
2018
2017
-
-
-
234
(234)
-
In August 2013, Sun Media Technology Co., Ltd. received a government grant amounting to RMB 16,390 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, 2018 and 2017 was $1,661 and $1,641
thousand, respectively.
31. DISPOSAL OF SUBSIDIARIES
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
Current assets
Cash and cash equivalents
Accounts receivables
Inventories
Other receivables
Other current assets
Noncurrent assets
Property, plant and equipment
Intangible assets
Refundable deposits
Deferred income tax - noncurrent
Sunplus
Technology
Xiamen Xm-plus
iCatch
Technology
$
187
-
971
63
1,009
595
77
-
-
$ 159,384
130,898
205,200
5,686
94,941
43,007
25,427
1,674
1,518
(Continued)
143
Current liabilities
Trade payables
Accrued expenses
Other current liabilities
Accrued pension liabilities
Deposits received
Contract liabilities
Net liabilities disposed of
b. Gain on disposal of subsidiaries
Collection price of investments accounted for using the equity method
Disposed of net liabilities (assets)
Reclassification of net assets and related hedging instruments to
accumulated exchange differences on profit (loss) due to loss of
control of subsidiaries
Non-controlling interests
Sunplus
Technology
Xiamen Xm-plus
iCatch
Technology
$
(170)
-
(20,710)
-
-
-
$ (148,922)
(28,812)
(606)
(15,533)
(33,053)
(19,637)
$
(17,978)
$ 421,172
(Concluded)
Sunplus
Technology
Xiamen Xm-plus
iCatch
Technology
$
9,294
17,978
$ 335,164
(421,172)
(211)
-
-
229,844
Gain on disposals
$
27,061
$ 143,836
32. EQUITY TRANSACTIONS WITH NON-CONTROLLING INTERESTS
In June 2017, Sunplus Venture purchased equity from employees of Jumplux Technology Co., Ltd., increasing its
controlling interest from 94.29% to 95.00%.
In October 2017, Sunplus Venture disposed of 3.66% of its interest in Generalplus Technology Inc., reducing its
controlling interest from 51.65% to 47.99%.
In July 2018, Sunplus subscribed for the capital increase in cash of Jumplux Technology Co., Ltd., increasing its
controlling interest from 95.00% to 97.08%.
In August 2018, Sunplus Technology (Shanghai) subscribed for the capital increase in cash of Ytrip Technology Co.,
Ltd., increasing its controlling interest from 83.40% to 90.71%.
From October to December, 2018, Sunplus purchased the equity from the external shareholders of Sunext Technology
Co., Ltd. increasing its controlling interest from 74.15% to 91.40%.
144
The above transactions were accounted for as equity transactions since the Group did not cease to have control over these subsidiaries.
2018
Cash consideration paid
The proportionate share of the carrying amount of the
net assets of the subsidiary transferred to
non-controlling interests
Reattribution of other equity to (from) non-controlling
interests
-Exchange differences on translating the financial
statements of foreign operations
Jumplux
Technology Co.,
Ltd.
Ytrip Technology
Co., Ltd.
Sunext
Technology Co.,
Ltd.
$ (100,000)
$ (120,150)
$
(31,571)
96,333
101,403
31,300
-
212
-
Differences recognized from equity transactions
$
(3,667)
$
(18,535)
$
(271)
Jumplux
Technology Co.,
Ltd.
Ytrip
Technology Co.,
Ltd.
Sunext
Technology Co.,
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
disposal or acquisition
Retained earnings
-
-
(271)
(271)
$
(3,667) $
(18,535) $
(271) $
(22,473)
33. OPERATING LEASE ARRANGEMENTS
The Group as lessee
Operating leases relate to leases of land with lease terms between 2 and 20 years. The Group does not have a bargain
purchase option to acquire the leased land at the expiry of the lease periods.
Sunplus
The Company leases lands from Science-Based Industrial Park Administration (SBIPA) under renewable agreements
expiring in December 2020, December 2021 and December 2034. The SBIPA has the right to adjust the annual lease
amount. The amount was $8,318 thousand for the period ended. The Company had pledged $6,100 thousand time
deposits (classified as other noncurrent financial assets) as collateral for the land lease agreements.
145
Future annual minimum rentals under the leases are as follows:
Up to 1 year
Over 1 year to 5 years
Over 5 years
Sunplus Innovation
December 31
2018
2017
$
8,318
21,079
36,576
$
8,259
23,855
39,901
$ 65,973
$ 72,015
Sunplus Innovation leases office from Science-Based Industrial Park Administration (SBIPA) under renewable
agreements expiring in December 2018. The SBIPA has the right to adjust the annual lease amount of $5,459 thousand.
The future lease payables are as follows:
Up to 1 year
Over 1 year to 5 years
Refundable deposits
Generalplus Technology Inc.
December 31
2018
2017
$
5,549
22,196
$
5,489
-
$ 27,745
$
5,489
$
910
$
910
Generalplus leases land from Science-Based Industrial Park Administration under renewable agreements expiring in
December 2020. The SBIPA has the right to adjust the annual lease amount of $1,532 thousand. Generalplus deposited
$3,000 thousand (classified as other noncurrent financial assets) as collateral for the land lease agreements.
Future annual minimum rentals under the leases are as follows:
Up to 1 year
Over 1 year to 5 year
The Group as lessor
Sunplus Technology (Shanghai)
December 31
2018
2017
$
1,491
1,491
$
1,458
2,916
$
2,982
$
4,374
Operating leases relate to the investment property owned by the Group with lease terms between 1 and 5 years. All
operating lease contracts contain market review clauses in the event that the lessee exercises its option to renew. The
lessee does not have a bargain purchase option to acquire the property at the expiry of the lease period.
As of December 31, 2018 and 2017, deposits received under operating leases amounted to $39,899 thousand and
$37,439 thousand, respectively.
The future minimum lease payments for non-cancellable operating lease are as follows:
December 31
2018
2017
146
Up to 1 year
Over 1 year to 5 years
SunMedia Technology
$ 142,129
133,209
$
97,784
37,218
$ 275,338
$ 135,002
Operating leases relate to the investment property owned by the Group with lease terms 15 years. All operating lease
contracts contain market review clauses in the event that the lessee exercises its option to renew. The lessee does not
have a bargain purchase option to acquire the property at the expiry of the lease period.
As of December 31, 2018 and 2017, deposits received under operating leases amounted to $7,379 thousand and $6,848
thousand, respectively.
The future minimum lease payments of non-cancellable operating lease were as follows:
Up to 1 year
Over 1 to 5 years
Over 5 years
34. CAPITAL MANAGEMENT
December 31
2018
2017
$
$
84,521
435,290
581,826
83,978
440,026
684,521
$ 1,101,637
$ 1,208,525
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.
35. 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.
147
b. Fair value of financial instruments that are measured at fair value on recurring basis.
1) Fair value hierarchy
December 31, 2018
Financial assets at FVTPL
Mutual funds
Listed shares and emerging
market shares
Unlisted shares and
emerging market shares
Securities listed in the ROC
- CB
Private funds
Financial assets at FVTOCI
Listed shares and emerging
market shares
Unlisted shares and
emerging market shares
Private funds
December 31, 2017
Financial assets at FVTPL
Unlisted debt securities
Level 1
Level 2
Level 3
Total
$ 1,356,100
$
-
$
-
$ 1,356,100
44,183
-
28,718
-
-
-
-
-
-
44,183
462,387
462,387
-
160,226
28,718
160,226
$ 1,429,001
$
-
$
622,613
$ 2,051,614
$
78,246
$
-
$
-
$
78,246
17,320
-
-
-
110,671
39,971
127,991
39,971
$
95,566
$
-
$
150,642
$
246,208
Level 1
Level 2
Level 3
Total
other countries
$
Securities listed in ROC
9,468
-
-
89,280
$
-
-
9,468
89,280
$
9,468
$
89,280
$
-
$
98,748
Available-for-sale financial
assets
Mutual funds
Quoted shares
$ 1,396,116
426,678
$
$
-
-
-
-
$ 1,396,116
426,678
$ 1,822,794
$
-
$
-
$ 1,822,794
There were no transfers between Levels 1 and 2 in the current and prior periods.
148
2) Reconciliation of Level 3 fair value measurements of financial instruments
For the Year Ended December 31, 2018
Financial Assets
Financial Assets
at FVTPL
Financial Assets
at FVTOCI
Balance at January 1, 2018
Recognized in profit or loss
Recognized in other comprehensive income
Purchases
Sales
Transfers out of Level 3
Effect of exchange rate changes
$ 442,888
15,589
-
276,125
(111,996)
-
7
$ 171,568
-
(77,563)
75,212
(4,930)
(13,593)
(52)
Total
$ 614,456
15,589
(77,563)
351,337
(116,926)
(13,593)
(45)
Balance at December 31, 2018
$ 622,613
$ 150,642
$ 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
2018
2017
0.66-4.16
0.69-7.52
10%-30%
0.94-3.37
1.25-1.38
10%-50%
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.
149
c. Categories of financial instruments
Financial assets
Fair value through profit or loss (FVTPL)
Held for trading
Fair value through profit or loss (FVTPL)
Loans and receivables (i)
Available-for-sale financial assets (ii)
Financial assets at amortized cost (iii)
Financial assets at fair value through other comprehensive income
Equity instruments
Financial liabilities
December 31
2018
2017
$
$
-
2,051,614
-
-
4,549,250
246,208
98,748
-
5,901,870
2,342,053
-
-
Measured at amortized cost (iv)
1,276,248
1,822,939
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 balance included available - for - sale financial assets carried at cost.
iii) The balances include financial assets measured at amortized cost, which comprise cash and cash
equivalents, refundable deposits, trade and other receivables and other financial assets. Those
reclassified to held-for-sale disposal groups are also included.
iv) 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:
150
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
38.
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
$
(9,525)
$ (17,986)
USD Impact
Years Ended December 31
2017
2018
Profit or loss
b) Interest rate risk
RMB Impact
Years Ended December 31
2017
2018
$
(107)
$
(1,159)
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.
151
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
2018
2017
$ 2,025,410
311,215
$ 2,878,159
191,761
1,367,150
250,046
1,566,070
676,493
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, 2018 and 2017 would increase/decrease by $1,396 thousand and
$1,122 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, 2018 would have increased/decreased by $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, 2018 would have increased/decreased by $2,462 thousand, respectively.
Had equity prices been 1% higher/lower, post-tax profit for the year ended December 31, 2017 would have
increased/decreased by $18,228 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.
152
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 59% and 61% in total trade receivables as of December 31, 2018 and
2017, 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, 2018 and 2017,
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, 2018
Nonderivative financial
liabilities
On Demand
or Less than
1 Month
1-3 Months
More than 3
Months to 1
Year
Over 1 Year
to 5 Years
5+ Years
Noninterest bearing
Variable interest rate liabilities
Fixed interest rate liabilities
$ 274,169 $
105
117,896
85,001 $ 561,988 $
15,000
-
235,046
193,361
38,504 $
-
7,685
63,523
-
152,292
$ 392,170 $ 100,001 $ 990,395 $
46,189 $ 215,815
153
December 31, 2017
Nonderivative financial
liabilities
On Demand
or Less than
1 Month
1-3 Months
More than 3
Months to 1
Year
Over 1 Year
to 5 Years
5+ Years
Noninterest bearing
Variable interest rate liabilities
Fixed interest rate liabilities
$ 497,278 $ 383,305 $
752 $
39,605 $
246
59,533
-
-
175,000
-
100,000
11,090
-
-
153,723
$ 557,057 $ 383,305 $ 175,752 $ 150,695 $ 153,723
b) Financing facilities
Unsecured bank overdraft facility
Amount used
Amount unused
December 31
2018
2017
$
561,504
4,479,716
$
710,776
4,829,399
$ 5,041,220
$ 5,540,175
36. 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
Relationship with the Group
Beijing Golden Global View Co., Ltd.
Xiamen Xm-plus Technology Ltd.
iCatch Technology, Inc.
Advanced Vehicle Systems Co., Ltd.
Associate (Note 1)
Associate (Note 2)
Associate (Note 3)
Associate (Note 4)
Note 1：
It is an associate of the Company; subsidiary of Global View Co., Ltd.
Note 2： 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 3： On July 31, 2018, the Company assessed that it had lost control of iCatch Technology, Inc.; therefore, it
is classified as an associate.
Note 4：
It is an associate of the company; subsidiary of AutoSys Co., Ltd.
154
b. Sales of goods
Line Items
Related Party Categories
2018
2017
For the Year Ended December 31
Sales
Associates
$
51,833
$
296
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
2018
2017
$ 17,941
$
1,358
$
$
-
-
There were no guarantees on outstanding receivables from related parties. For the years ended December 31, 2018
and 2017, no impairment loss was recognized for trade receivables from related parties.
d. Other transactions with related parties
Account Item
Related Parties Types
2018
2017
December 31
Refundable deposits
Associates
Deposits received
Associates
$
$
871
393
$
$
888
-
Operating expenses
Associates
$
4,539
$
5,017
Non-operating income and
Associates
$
9,009
$
-
expenses
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 December 31
2018
2017
$
61,183
1,562
$
59,185
1,515
$
62,745
$
60,700
The remuneration of directors and other key management personnel was determined by the Compensation
Committee in accordance with individual performance and market trends.
37. PLEDGED OR MORTGAGED ASSETS
155
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
2018
2017
$ 615,136
$ 634,538
164,518
302,759
$ 779,654
$ 937,297
38. 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, 2018
Financial assets
Monetary items
USD
CNY
JPY
HKD
GBP
EUR
Nonmonetary items
USD
CHF
Financial liabilities
Monetary items
USD
CNY
Foreign
Currencies
(In Thousands)
Exchange
Rate
Carrying
Amount
$
42,724
2,388
352
152
3
1
28
786
30.715
4.472
0.278
3.921
38.880
35.200
30.715
31.190
$ 1,312,268
10,679
98
596
117
35
848
24,513
33,199
2,281
30.715
4.472
1,019,707
10,201
156
December 31, 2017
Financial assets
Monetary items
USD
HKD
CNY
JPY
GBP
EUR
Nonmonetary items
USD
USD
CHF
Financial liabilities
Monetary items
USD
CNY
EUR
Foreign
Currencies
(In Thousands)
Exchange
Rate
Carrying
Amount
$
47,338
13,832
5,011
607
3
1
3,000
501
510
29.760
3.807
4.565
0.264
40.110
35.570
29.760
30.571
30.179
$ 1,408,779
52,658
22,875
160
120
36
89,280
15,316
15,391
29,352
3,852
29.760
4.565
873,516
17,584
The foreign currency exchange loss and gain (realized and unrealized) were amounted to $15,895 thousand and $64
thousand for the ended December 31, 2018 and 2017, respectively. Due to the diversity of the functional currencies of
the Group, it is unable to disclose foreign currency with significant influence.
39. 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.
5) Intercompany relationships and significant intercompany transactions: Table 4 (attached)
6) Information on investee: Table 5 (attached)
157
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)
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 7)
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 6, there’s no further information about other significant transactions.
40. 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, 2018 and 2017 are shown in the accompanying
consolidated income statements, and the assets by segment as of December 31, 2018 and 2017 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.
Segment Revenue
For the Year Ended December 31
2018
2017
$ 5,663,059
199,184
215,490
$ 6,419,659
216,055
184,523
$ 6,077,733
$ 6,820,237
IC design
Income from lease of property, plant, and equipment
Other income
b. Geographical information
158
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.
Revenue from External Customers
For the Year Ended
December 31
Noncurrent Assets
For the Year Ended
December 31
2018
2017
2018
2017
Asia
Taiwan
Others
$ 4,067,191
1,908,470
102,072
$ 4,594,885
2,154,290
71,062
$ 2,192,346
1,077,848
$ 2,356,138
1,143,198
-
-
$ 6,077,733
$ 6,820,237
$ 3,270,194
$ 3,499,336
Noncurrent assets exclude noncurrent 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
2018
2017
$
$
763,906
652,318
622,701
798,635
658,358
1,083,925
159
SUNPLUS TECHNOLOGY COMPANY LIMITED AND SUBSIDIARIES
FINANCINGS PROVIDED
FOR THE YEAR ENDED DECEMBER 31, 2018
(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
Item
Value
Financing Limit
for Each
Borrower
Aggregate
Financing Limit
TABLE 1
1 Ventureplus Cayman Inc.
Sun Media Technology
Other receivables
Yes
$
40,027
$
-
$
6,900
-
-
-
3.1971%
Note 1
$
1.8%
Note 1
Co., Ltd.
2 Sunplus Technology (Shanghai)
Sunplus Technology
Co., Ltd.
2 Sunplus Technology (Shanghai)
Co., Ltd.
(Beijing)
Sunplus APP
Technology
2 Sunplus Technology (Shanghai)
Sun Media Technology
Co., Ltd.
Co., Ltd.
3 Russell Holdings Ltd.
Sun Media Technology
Co., Ltd.
4 Sunplus Venture Capital Co.,
Sun Media Technology
Ltd.
Co., Ltd.
5 Sunplus Prof-tek Technology
Ytrip Technology Co.,
(Shenzhen)
Ltd.
5 Sunplus Prof-tek Technology
Sunplus APP
(Shenzhen)
Technology
Receivables from
related parties
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
Yes
29,959
25,108
25,108
1.8%
Note 1
219,120
91,300
91,300
1.8%
Note 1
381,320
256,923
256,923
2.35%
Note 1
321,321
230,061
168,561
2.2%
Note 1
1,963
-
-
1.8%
Note 1
41,086
29,673
29,673
1.8%
Note 1
-
-
-
-
-
-
-
-
Note 2
$
Note 3
Note 4
Note 5
Note 6
Note 7
Note 8
Note 9
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
-
$
-
-
-
-
-
-
-
$
135,431
(Note 10 )
259,645
(Note 12 )
21,637
(Note 11 )
259,645
(Note 12 )
463,230
(Note 13 )
411,427
(Note 14 )
40,850
(Note 15 )
40,850
(Note 15 )
270,862
(Note 10 )
259,645
(Note 12 )
43,274
(Note 11 )
259,645
(Note 12 )
463,230
(Note 13 )
411,427
(Note 14 )
81,700
(Note 15 )
81,700
(Note 15 )
Note 1:
Short-term financing.
Note 2: Ventureplus Cayman Inc. 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 Technology (Beijing).
Note 4:
Sunplus Technology (Shanghai) Co., Ltd. provided funds for the operating needs of Sunplus APP Technology.
Note 5:
Sunplus Technology (Shanghai) Co., Ltd. provided funds for the operating needs of Sun Media Technology Co., Ltd.
Note 6:
Russell Holdings Ltd. provided funds for the operating needs of Sun Media Technology Co., Ltd.
Note 7:
Sunplus Venture Capital provided funds for the operating needs of Sun Media Technology Co., Ltd.
Note 8:
Sunplus Prof-tek Technology (Shenzhen) provided funds for the operating needs of Ytrip Technology Co., Ltd.
Note 9:
Sunplus Prof-tek Technology (Shenzhen) provided funds for the operating needs of Sunplus APP Technology.
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 should not exceed 20% of Ventureplus Cayman Inc.’s net equity based on its latest financial statements, and the individual amount of each guarantee should not exceed
10% of Ventureplus Cayman Inc.’s net equity based on its latest financial statements; in addition, each guarantee period should not exceed two years.
Note 11: 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 12: 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 13: 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 14: 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 15: 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.
160
SUNPLUS TECHNOLOGY COMPANY LIMITED AND SUBSIDIARIES
ENDORSEMENT/GUARANTEE PROVIDED
FOR THE YEAR ENDED DECEMBER 31, 2018
(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)
Endorsee/Guarantee
No.
Endorser/
Guarantor
Name
Nature of
Relationship
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)
TABLE 2
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
0
(Note 1)
Sunplus Technology
Company Limited
(“Sunplus”)
Ventureplus Cayman Inc.
3 (Note 4)
Sun Media Technology Co., Ltd.
3 (Note 4)
Ytrip Technology Co., Ltd.
3 (Note 4)
Sunext Technology Co., Ltd.
2 (Note 3)
1
(Note 2)
Russell Holdings Ltd. Sun Media Technology Co., Ltd.
3 (Note 4)
$ 846,594
(Note 5)
846,594
(Note 5)
846,594
(Note 5)
846,594
(Note 5)
347,423
(Note 7)
$ 160,075
$
-
$
-
$
417,528
417,528
219,960
121,780
-
-
20,000
10,000
10,000
-
-
-
-
-
4.93
-
0.12
316,025
156,725
125,380
156,725
27.07
$ 1,693,188
(Note 6)
1,693,188
(Note 6)
1,693,188
(Note 6)
1,693,188
(Note 6)
347,423
(Note 7)
Yes
Yes
Yes
Yes
No
No
No
No
No
No
No
Yes
Yes
No
Yes
Note 1:
Issuer.
Note 2:
Investee.
Note 3: The endorser directly holds more than 50% of the common shares of the endorsee.
Note 4: Sunplus and its subsidiaries jointly hold more than 50% of the common 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.
161
SUNPLUS TECHNOLOGY COMPANY LIMITED AND SUBSIDIARIES
MARKETABLE SECURITIES HELD
FOR THE YEAR ENDED DECEMBER 31, 2018
(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
Shares or Units
(In Thousands)
Carrying Amount
Percentage of
Ownership (%)
Market Value or
Net Asset Value
Note
December 31, 2018
TABLE 3
Sunplus Technology Company Limited
Nomura Taiwan Money Market
(the “Company”)
Mega RMB Money Market RMB
FSITC RMB Money Market TWD
Yuanta AUD Money Market
Taishin China-US Money Market
Yuanta USD Money Market TWD
Yuanta RMB Money Market CNY
Mega Diamond Money Market
PineBridge Preferred Securities
UPAMC James Bond Money Market
Yuanta USD Money Market USD
PineBridge Multi-Income
Jih Sun Money Market
Prudential Financial RMB Money Market TWD
Yuanta RMB Money Market TWD
Pictet-Security RI
Yuanta Emerging Indonesia and India 4 years
Bond Fund
Broadcom Inc.
Triknight Capital Corporation
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Financial assets at fair value through
616
$
10,043
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
466
5,387
2,000
3,000
4,396
470
24,408
53,267
18,518
30,287
42,367
24,253
Financial assets at fair value through
13,197
165,249
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
2,946
1,851
247
3,000
3,420
5,810
1,702
2
1,500
-
28,431
30,887
78,532
28,955
50,589
57,669
18,039
61,430
14,002
672
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
10,043 Note 3
24,408 Note 3
53,267 Note 3
18,518 Note 3
30,287 Note 3
42,367 Note 3
24,253 Note 3
165,249 Note 3
28,431 Note 3
30,887 Note 3
78,532 Note 3
28,955 Note 3
50,589 Note 3
57,669 Note 3
18,039 Note 3
61,430 Note 3
14,002 Note 3
672 Note 2
Financial assets at fair value through
21,000
190,050
5
190,050 Note 1
profit or loss - non-current
(Continued)
162
Holding Company Name
Type and Name of Marketable Security
Relationship with the Holding
Company
Financial Statement Account
Shares or Units
(In Thousands)
Carrying Amount
Percentage of
Ownership (%)
Market Value or
Net Asset Value
Note
December 31, 2018
Sunplus Technology Company Limited
Availink Inc.
(the “Company”)
Network Capital Global Fund
Lin Shih Investment Co., Ltd.
CTBC Global iSport Fund
Yuanta Multi-Income
Paradigm Pion Money Market Fund
Ruentex Material Co., Ltd.
Taiwan Mask Corp.
Global Pmx Co., Ltd. - CB
Laster Tech Corporation Ltd. - CB
Everlight Electronics Co., Ltd. - CB
Genius Vision Digital Co., Ltd.
Ortery Technologies, Inc.
Chain Sea Information Integration Co., Ltd.
Sanjet Technology Corporation
Minton Optic Industry Co., Ltd.
Ability Enterprise Co., Ltd.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Sunplus Technology Co., Ltd.
Parent company
Lead Sun Corporation
Prine Rich International Co., Ltd.
Russell Holdings Limited
Synerchip Inc.
OZ Optics Limited
-
-
-
-
9,039
$
590
380
1,000
3,000
870
20
101
200
15
80
600
103
69
8
4,272
5,434
3,560
1,000
33
6,452
1,000
3,747
9,410
25,680
10,042
526
1,853
19,300
1,466
7,952
-
-
1,121
-
-
78,246
40,050
30,756
3,380
-
-
-
7
-
-
-
-
-
-
-
-
4
1
-
-
7
2
1
-
-
12
8
$
590 Note 1
3,747 Note 1
9,410 Note 3
25,680 Note 3
10,042 Note 3
526 Note 2
1,853 Note 2
19,300 Note 2
1,466 Note 2
7,952 Note 2
- Note 1
- Note 1
1,121 Note 1
- Note 1
- Note 1
78,246 Note 2
40,050 Note 2
30,756 Note 1
3,380 Note 1
- Note 1
- Note 1
(Continued)
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 - 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
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
163
Holding Company Name
Type and Name of Marketable Security
Relationship with the Holding
Company
Financial Statement Account
Shares or Units
(In Thousands)
Carrying Amount
Percentage of
Ownership (%)
Market Value or
Net Asset Value
Note
December 31, 2018
Russell Holdings Limited
Ortega InfoSystem, Inc.
Innobrige International Inc.
Ether Precision Inc.
Asia Tech Taiwan Venture, L.P.
Asia B2B on Line Inc.
AMED Ventures I, L.P.
Availink Inc.
GeneOne Diagnostics Corporation
Intudo Ventures II, L.P.
Sunplus Venture Capital Co., Ltd.
Taiwan Mask Corp.
Fubon Financial Holding Co., Ltd.
Cathay China A50
Cyberon Corporation
Grand Fortune Venture Capital Co., Ltd.
Ortery Technologies, Inc.
Book4u Company Limited
Sanjet Technology Corp.
Simple Act Inc.
Information Technology Total Services
Minton Optic Industry Co., Ltd.
Raynergy Tek Inc.
Genius Vision Digital
CDIB Capital Growth Partners L.P.
2,557
$
4,000
1,250
-
1,000
-
9,920
1,710
-
108
1,900
2,900
786
5,000
68
9
49
1,900
51
5,000
4,500
750
-
-
-
-
-
-
6,143
31,280
21,113
9,215
1,982
47,937
47,995
28,820
54,500
-
-
-
-
-
-
64,890
-
36,970
-
15
1
5
3
-
8
-
-
-
-
-
8
7
1
-
-
10
-
8
16
5
2
$
- Note 1
- Note 1
- Note 1
- Note 1
- Note 1
6,143 Note 1
31,280 Note 1
21,113 Note 1
9,215 Note 1
1,982 Note 2
47,937 Note 2
47,995 Note 2
28,820 Note 1
54,500 Note 1
- Note 1
- Note 1
- Note 1
- Note 1
- Note 1
- Note 1
64,890 Note 1
- Note 1
36,970 Note 1
(Continued)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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
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 - 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
164
Holding Company Name
Type and Name of Marketable Security
Relationship with the Holding
Company
Financial Statement Account
Shares or Units
(In Thousands)
Carrying Amount
Percentage of
Ownership (%)
Market Value or
Net Asset Value
Note
December 31, 2018
Sunplus Venture Capital Co., Ltd.
VenGlobal International Fund
TIEF Fund LP
San Neng Group Holding Co., Ltd.
Intudo Ventures I, L.P.
eWave System, Inc.
Feature Integration Technology Inc.
Qun-Kin Venture Capital
Sunplus Technology (Shanghai) Co., Ltd. GF B Type Money Market Fund
GF Every Day The Red Haired Type Money
Market Fund B
Chongqing CYIT Communication Technology
Co., Ltd.
Ready Sun Investment Group Fund
Xiamen Xm-plus Technology Ltd.
Generalplus Technology Inc.
Franklin Templeton SinoAm Money Market
Sunplus Innovation Technology Inc.
Mega Diamond Money Market
Yuanta De-Li Money Market Fund
Yuanta USD Money Market USD
Yuanta RMB Money Market
Yuanta USD Money Market TWD
Fuh Hwa You Li Money Market
Yuanta De-Li Money Market
Yuanta De-Bao Money Market
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
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
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
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
165
-
900
-
1,833
1,386
3,000
6,400
5,700
-
-
-
5,721
2,601
810
150
3,679
6,712
2,235
4,333
5,000
1,000
1
$
-
43,742
39,150
29,663
-
7
2
8
$
- Note 1
43,742 Note 1
39,150 Note 2
29,663 Note 1
-
22
- Note 1
17,320
25,200
29,162
25,587
-
43,708
8,076
59,048
42,347
10,143
47,512
38,982
64,694
30,072
70,553
60,010
24,513
4
6
-
-
3
16
4
-
-
-
-
-
-
-
-
-
17,320 Note 2
25,200 Note 1
29,162 Note 3
25,587 Note 3
- Note 1
43,708 Note 1
8,076 Note 1
59,048 Note 3
42,347 Note 3
10,143 Note 3
47,512 Note 3
38,982 Note 3
64,694 Note 3
30,072 Note 3
70,553 Note 3
60,010 Note 3
10
24,513 Note 1
(Continued)
Holding Company Name
Type and Name of Marketable Security
Relationship with the Holding
Company
Financial Statement Account
Sunplus Innovation Technology Inc.
Advanced NuMicro System, Inc.
Point Grab Ltd.
Magic Sky Limited
GTA Co., Ltd. - CB
Giant Rock Inc.
Xiamen Xm-plus Technology Ltd.
-
-
-
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
Shares or Units
(In Thousands)
2,000
182
-
-
December 31, 2018
Carrying Amount
Percentage of
Ownership (%)
Market Value or
Net Asset Value
Note
$
848
-
82,623
32,306
8
1
-
15
$
848 Note 1
- Note 1
82,623 Note 1
32,306 Note 1
Note 1: The market value was based on the carrying amount as of December 31, 2018.
Note 2: The market value was based on the closing price as of December 31, 2018.
Note 3: The market value was based on the net asset value of the fund as of December 31, 2018.
Note 4: The exchange rate was based on the exchange rate as of December 31, 2018.
(Concluded)
166
SUNPLUS TECHNOLOGY COMPANY LIMITED AND SUBSIDIARIES
INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 2018
(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)
Company Name
Counterparty
Sunplus Technology Co., Ltd.
(the “Company”)
Generalplus Technology Inc.
Sunext Technology Co., Ltd.
Sunplus Innovation Technology Inc.
iCatch Technology, Inc.
Jumplux Technology Co., Ltd.
Sunplus mMedia Inc.
Sunplus Innovation Technology Inc.
Sun Media Technology Co., Ltd.
Sunplus Prof-tek (Shenzhen) Co., Ltd.
Generalplus Technology Inc.
Generalplus Technology (Hong Kong) Inc.
Generalplus Technology (Shenzhen) Inc.
iCatch Technology, Inc.
Sunext Technology Co., Ltd.
Sunplus Innovation Technology Inc.
Sunplus Prof-tek (Shenzhen) Co., Ltd.
Sun Media Technology Co., Ltd.
Sunplus Technology (Beijing)
TABLE 4
Flow of
Transaction
(Note 5)
Financial Statement Account Item
Amount
Terms
Percentage of Consolidated Total
Gross Sales or Total Assets
Intercompany Transactions
1
1
1
1
1
1
2
2
2
2
2
2
2
2
Sales
Nonoperating income and gains
Notes and trade receivables
Sales
Nonoperating income and gains
Notes and trade receivables
Other receivables
Sales
Nonoperating income and gains
Notes and trade receivables
Other receivables
Sales
Nonoperating income and gains
Sales
Nonoperating income and gains
Notes and trade receivables
Other receivables
Nonoperating income and gains
Other receivables
Sales
Accrued expenses
Marketing expenses
Accrued expenses
Marketing expenses
Marketing expenses
Other accrued expenses
Sales
Research and development expenses
Notes and trade receivables
Other accrued expenses
Sales
Marketing expenses
Marketing expenses
Accrued expenses
Research and development expenses
167
$
3,105 Note 1
137 Note 2
375 Note 1
1,500 Note 1
10,580 Notes 2 and 4
187 Note 1
1,226 Note 3
427 Note 1
3,828 Note 2
78 Note 1
642 Note 3
4,843 Note 1
8,601 Notes 2 and 4
6,857 Note 1
13,111 Notes 2 and 4
1,407 Note 1
2,084 Note 3
8,250 Notes 2 and 4
1,388 Note 3
2,728 Note 1
608 Note 3
2,688 Note 2
5,370 Note 3
23,271 Note 2
11,087 Note 2
2,322 Note 3
2,211 Note 2
94,261 Note 2
1,505 Note 3
43,030 Note 3
80 Note 1
7,821 Note 2
17,597 Note 2
25 Note 3
26 Note 2
0.05%
-
-
0.02%
0.17%
-
0.01%
0.01%
0.06%
-
0.01%
0.08%
0.14%
0.11%
0.22%
0.01%
0.02%
0.14%
0.01%
0.04%
0.01%
0.04%
0.05%
0.38%
0.18%
0.01%
0.03%
1.55%
0.01%
0.36%
-
0.13%
0.29%
-
-
(Continued)
Company Name
Counterparty
Sunplus Technology (Shanghai) Co., Ltd.
SunMedia Technology Co., Ltd.
Sunplus App Technology
Sunplus Technology (Beijing)
Jumplux Technology Co., Ltd.
Jumplux Technology Co., Ltd.
Sunplus Technology (Beijing)
Sunplus Venture
Sun Media Technology Co., Ltd.
Ventureplus Cayman Inc.
Russell Holdings Ltd.
Sun Media Technology Co., Ltd.
Sun Media Technology Co., Ltd.
SunMedia Technology Co., Ltd.
Sunplus App Technology
Sunplus Technology (Beijing)
Ytrip Technology Co., Ltd.
1culture Communication Co., Ltd.
Sunplus Technology (Beijing)
Sunplus Prof-tek (Shenzhen) Co., Ltd.
Xinamen Xm-plus Technology Ltd.
Ytrip Technology Co., Ltd.
Sunplus App Technology
Flow of
Transaction
(Note 5)
Financial Statement Account Item
Amount
Terms
Percentage of Consolidated Total
Gross Sales or Total Assets
Intercompany Transactions
2
2
2
2
2
2
2
2
2
2
2
2
2
2
Other receivables
Other payable
Nonoperating income and gains
Research and development expenses
Nonoperating income and gains
Other receivables
Research and development expenses
Nonoperating income and gains
Account receivables
Sales
Other accrued expenses
Research and development expenses
Nonoperating income and gains
Other receivables
Nonoperating income and gains
Other receivables
Nonoperating income and gains
Research and development expenses
Management expenses
Accounts payable
Sales
Management expenses
Sales
Nonoperating income and gains
Other receivables
Nonoperating income and gains
$
89,440 Note 3
345 Note 3
2,161 Note 2
319 Note 3
399 Note 2
24,596 Note 3
477 Note 2
33 Note 2
125 Note 2
320 Note 1
4,084 Note 3
5,323 Note 2
3,816 Note 2
172,133 Note 3
307 Note 2
261,358 Note 3
5,180 Note 2
210 Note 2
65 Note 2
64 Note 1
510 Note 1
31 Note 2
427 Note 2
3 Note 2
29,068 Note 3
272 Note 2
0.75%
-
0.04%
0.01%
0.01%
0.21%
0.01%
-
-
0.01%
0.03%
0.09%
0.06%
1.44%
0.01%
2.19%
0.09%
-
-
-
0.01%
-
0.01%
-
0.24%
-
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)
168
SUNPLUS TECHNOLOGY COMPANY LIMITED AND SUBSIDIARIES
NAMES, LOCATIONS, AND RELATED INFORMATION OF INVESTEES ON WHICH THE COMPANY EXERCISES SIGNIFICANT INFLUENCES
DECEMBER 31, 2018
(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)
Investor
Investee
Location
Main Businesses and Products
Investment Amount
Balance as of December 31, 2018
December 31,
2018
December 31,
2017
Shares
(Thousands)
Percentage of
Ownership (%)
Carrying
Amount
Net Income
(Loss) of the
Investee
Investment
Gain (Loss)
Note
TABLE 5
Sunplus Technology Company Limited
Ventureplus Group Inc.
Award Glory Ltd.
Belize
Belize
Investment
Investment
GLOBAL VIEW CO., LTD.
Hsinchu, Taiwan
Consumer electronics, components and rental
2,460,981
$
( US$
74,605
RMB 37,900 )
62,720
2,042 )
315,658
( US$
2,451,767
$
( US$
74,305
RMB 37,900 )
23,712
772 )
315,658
( US$
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.
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
Magic Sky Limited
Samoa
Sunplus mMobile Inc.
Wei-Young Investment Inc.
Jumplux Technology Co., Ltd.
Generalplus Technology Inc.
Sunext Technology Co., Ltd.
Sunplus Innovation Technology Inc.
iCatch Technology, Inc.
Sunplus mMedia Inc.
Jumplux Technology Co., Ltd.
Sunplus Innovation Technology Inc.
iCatch Technology, Inc.
Sunext Technology Co., Ltd.
Sunplus mMedia Inc.
Han Young Technology Co., Ltd.
Hsinchu, Taiwan
Hsinchu, Taiwan
Hsinchu, Taiwan
Hsinchu, Taiwan
Hsinchu, Taiwan
Hsinchu, Taiwan
Hsinchu, Taiwan
Hsinchu, Taiwan
Hsinchu, Taiwan
Hsinchu, Taiwan
Hsinchu, Taiwan
Hsinchu, Taiwan
Hsinchu, Taiwan
Taipei, Taiwan
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
Design of ICs
Design of ICs
Lin Shih Investment Co., Ltd.
Sunplus Venture Capital Co., Ltd.
Russell Holdings Limited
Sunext Technology Co., Ltd.
Hsinchu, Taiwan
Design of ICs
Autosys Co., Ltd.
Cayman Islands, British west Indies
Investment
( US$
( US$
699,988
281,001
999,982
414,663
757,432
24,660 )
207,345
924,730
357,565
5,000
43,425
11,075 )
308,133
10,032 )
2,596,792
70,157
132,000
699,988
281,001
999,982
414,663
739,003
24,060 )
207,345
924,730
357,565
5,000
43,425
11,075 )
305,921
9,960 )
2,596,792
30,157
-
( HK$
( HK$
( US$
( US$
86,256
-
15,701
9,645
19,408
101,000
57,388
33,439
-
44,878
4,200
-
- )
( US$
76,788
2,500 )
( US$
( US$
86,256
369,316
15,701
9,645
19,408
101,000
57,388
33,439
385,709
44,878
4,200
65,085
2,119 )
-
-
-
100
$
1,354,351
$
(79,793 ) $
(79,793 ) Subsidiary
100
33,116
(7,932 )
(7,932 ) Subsidiary
8,229
13
307,106
82,960
10,837 Investee
70,000
37,324
100,000
31,450
24,660
20,735
58,050
22,441
500
11,075
100
34
100
61
100
30
91
90
100
100
750,558
704,549
1,028,567
523,083
579,038
289,419
174,391
46,128
3,910
39
64,080
284,344
55,005
60,709
1,965
(103,184 )
1,808
(1,647 )
(41 )
-
61,556 Subsidiary
97,531 Subsidiary
55,005 Subsidiary
37,109 Subsidiary
1,965 Subsidiary
(28,936 ) Investee
2,746 Subsidiary
(58,822 ) Subsidiary
(41 ) Subsidiary
- Subsidiary
-
100
82,747
(14,459 )
(14,459 ) Subsidiary
16,240
5,400
13,200
14,892
-
1,075
965
650
10,100
2,904
3,332
-
1,909
420
-
5,000
100
100
55
14
-
2
1
3
42
6
5
-
8
70
-
19
29,785
56,947
17,475
282,537
-
15,662
13,793
6,000
13,370
49,298
47,647
-
2,371
1,780
(417 )
2,338
(73,126 )
(417 ) Subsidiary
2,339 Subsidiary
(17,085 ) Subsidiary
284,344
1,808
60,709
(103,184 )
(1,647 )
(73,126 )
60,709
(103,184 )
1,808
(1,647 )
-
38,915 Subsidiary
54 Subsidiary
1,268 Subsidiary
(1,016 ) Investee
(2,186 ) Investee
(43,067 ) Subsidiary
3,426 Subsidiary
(3,510 ) Investee
128 Subsidiary
(6,419 ) Subsidiary
- Subsidiary
-
1,808
( US$
Subsidiary
11
- )
71,254
(14,214 )
(4,738 ) Investee
Wei-Young Investment Inc.
Sunext Technology Co., Ltd.
Hsinchu, Taiwan
Design of ICs
-
350
-
-
-
1,808
2 Subsidiary
169
Ventureplus Group Inc.
Ventureplus Mauritius Inc.
Mauritius
Investment
Ventureplus Mauritius Inc.
Ventureplus Cayman Inc.
Cayman Islands, British West Indies
Investment
Generalplus Technology Inc.
Generalplus International (Samoa) Inc.
Samoa
Investment
Generalplus International (Samoa) Inc.
Generalplus (Mauritius) Inc.
Mauritius
Investment
2,460,981
( US$
74,605
RMB 37,900 )
2,451,767
( US$
74,305
RMB 37,900 )
2,460,981
( US$
74,605
RMB 37,900 )
2,460,981
( US$
74,305
RMB 37,900 )
586,349
19,090 )
( US$
586,349
19,090 )
( US$
586,349
19,090 )
( US$
586,349
19,090 )
( US$
-
-
100
1,354,332
(79,794 )
(79,794 ) Subsidiary
100
1,354,309
(79,795 )
(79,795 ) Subsidiary
19,090
100
480,817
14,211
14,211 Subsidiary
19,090
100
480,815
14,211
14,211 Subsidiary
(Continued)
170
Investor
Investee
Location
Main Businesses and Products
Generalplus (Mauritius) Inc.
Generalplus Technology (Hong Kong) Inc.
Hong Kong
Sales
Investment Amount
Balance as of December 31, 2018
December 31,
2018
December 31,
2017
Shares
(Thousands)
Percentage of
Ownership (%)
Carrying
Amount
Net Income
(Loss) of the
Investee
Investment
Gain (Loss)
Note
$
(US$
11,979
390 )
$
(US$
11,979
390 )
390
100
$
5,253
$
(462 ) $
(462 ) Subsidiary
Sunplus mMedia Inc.
Jumplux Technology Co., Ltd.
Hsinchu, Taiwan
Design of ICs
-
32,000
Award Glory Ltd.
Sunny Fancy Ltd.
Seychelles
Investment
Sunny Fancy Ltd.
Giant Kingdom Ltd.
Giant Rock Inc.
Seychelles
Anguilla
Investment
Investment
62,720
2,042 )
(US$
23,712
772 )
(US$
23,712
772 )
39,008
1,270 )
(US$
(US$
23,712
772 )
-
- )
(US$
(US$
-
-
-
-
-
100
100
100
-
(48,781 )
(10,034 ) Subsidiary
33,116
(7,932 )
(7,932 ) Subsidiary
811
(3,121 )
(3,121 ) Subsidiary
32,306
(4,812 )
(4,812 ) Subsidiary
Note 1:
The initial exchange rate was based on the exchange rate as of December 31, 2018.
(Concluded)
171
SUNPLUS TECHNOLOGY COMPANY LIMITED AND SUBSIDIARIES
INFORMATION ON INVESTMENTS IN MAINLAND CHINA
FOR THE YEAR ENDED DECEMBER 31, 2018
(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)
Investee Company Name
Main Businesses and Products
Total Amount of
Paid-in Capital
Investment Type
Sunplus Technology
Development of computer software, system
(Shanghai) Co., Ltd.
Sunplus Prof-tek (Shenzhen)
integration services and building rental services
Development of computer software, system
Co., Ltd.
integration services, building rental services and
property management
$
(US$
(US$
528,298
17,200)
990,559
32,250)
Sun Media Technology Co.,
Development of computer software, system
Ltd.
Sunplus App Technology Co.,
Ltd.
integration services and building rental services
Manufacturing and sale of computer software, system
integration services and information management
and education
(US$
(RMB
Ytrip Technology Co., Ltd.
Computer system integration services, supply of
general advertising and other information services
(RMB
Sunplus Technology (Beijing) Development of computer software, system
integration services and building rental services
(RMB
1culture Communication Co.,
System development
Ltd.
(RMB
Xiamen Xm-plus Technology
Development of computer software, system
Ltd.
integration services and building rental services
(RMB
614,300
20,000)
67,080
15,000)
273,910
61,250)
120,744
27,000)
14,534
3,250)
232,544
52,000)
Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 3
Note 1
Accumulated
Outflow of
Investment from
Taiwan as of
January 1, 2018
$
(US$
(US$
542,273
17,665)
990,559
32,250)
(US$
(US$
RMB
(US$
(RMB
614,300
20,000)
62,719
586
10,000)
138,555
4,511)
120,744
27,000)
-
Investment Flows
Outflow
Inflow
$
-
$
-
-
-
-
-
-
-
(US$
39,008
1,270)
Accumulated
Outflow of
Investment from
Taiwan as of
December 31,
2018
$
(US$
(US$
542,273
17,655)
990,559
32,250)
(US$
(US$
RMB
(US$
(RMB
614,300
20,000)
62,719
586
10,000)
138,555
4,511)
120,744
27,000)
-
(US$
39,008
1,270)
-
-
-
-
-
-
-
-
Accumulated Investment in Mainland China as of
December 31, 2018
Investment Amounts Authorized by Investment Commission, MOEA
Limit on Investment
2,508,158
$
( US$ 76,272 and
37,000 )
RMB
2,580,950
$
( US$ 75,002 and
RMB
62,000 )
$
5,079,565
Sunplus Venture Capital Co., Ltd.
Accumulated Investment in Mainland China as of
December 31, 2018
Investment Amounts Authorized by Investment Commission, MOEA
Limit on Investment
$
( US$
38,701
1,260 )
$
( US$
38,701
1,260 )
$
617,140
172
TABLE 6
% Ownership of
Direct or Indirect
Investment
Net Income
(Loss) of the
investee
Investment Loss
Carrying
Amount as of
December 31,
2018
Accumulated
Inward
Remittance of
Earnings as of
December 31,
2018
100%
$
39,671
$
39,671
$
432,741
$
100%
(3,070)
(3,070)
817,000
100%
(80,976)
(80,976)
102,178
93%
(23,514)
(21,947)
(53,034)
91%
(25,374)
(21,852)
(1,026)
100%
100%
1,041
1,041
48,076
18
11
19%
(65,610)
(32,089)
112
-
-
-
-
-
-
-
-
-
(Continued)
Generalplus Technology Inc. (Nature of Relationship: 1)
Investee
Company Name
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, 2018
Investment Flows
Outflow
Inflow
Accumulated
Outflow of
Investment from
Taiwan as of
December 31,
2018
% Ownership of
Direct or Indirect
Investment
Net Loss of the
investee
Investment Loss
(Note 2)
Carrying
Amount as of
December 31,
2018
Accumulated
Inward
Remittance of
Earnings as of
December 31,
2018
Generalplus Shenzhen
IC product development, after sales service and market
research
$
(US$
574,371
18,700)
Note 1
$
(US$
574,371
18,700)
$
-
$
-
$
(US$
574,371
18,700)
100%
$
14,673
$
14,673
$
475,542
$
-
Accumulated Investment in Mainland China as of
December 31, 2018
Investment Amount Authorized by Investment Commission, MOEA
$
( US$
574,371
18,700 )
$
( US$
574,371
18,700 )
Limit on Investment
$
1,250,480
Note 1:
Indirect investment in a company located in mainland China through 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: The initial exchange rate was based on the exchange rate as of December 31, 2018.
(Concluded)
173
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, 2018
(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)
Investee Company
Transaction Type
Research and Development
Expense
Amount
%
Price
Transaction Details
Payment Term
Comparison with Market
Transactions
Other Payable To Related
Parties
Ending Balance
%
Unrealized
(Gain) Loss
Note
Generalplus Technology (Shenzhen)
Development and
$ 94,261
19.18% Based on contract
Based on contract
Not comparable with market
$ 43,030
94.88
$
-
NA
Corp.
processing services
transactions
TABLE 7
174
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, 2018 and 2017 and
Independent Auditors’ Report
175
INDEPENDENT AUDITORS’ REPORT
The Board of Directors and Shareholders
Sunplus Technology Company Limited
Opinion
We have audited the accompanying parent company only financial statements of Sunplus Technology Company Limited (the
“Company”), which comprise the parent company only balance sheets as of December 31, 2018 and 2017, and the parent
company only statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes
to the parent company only financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the parent
company only financial position of the Company as of December 31, 2018 and 2017, and the parent company only financial
performance and the parent company only 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 Parent Company Only Financial
Statements section of our report. We are independent of the Company in accordance with The Norm of Professional Ethics
for Certified Public Accountant of the Republic of China, 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 parent
company only financial statements for the year ended December 31, 2018. These matters were addressed in the context of our
audit of the parent company only financial statements as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
Revenue recognition
Integrated circuit chip sales accounted for 90% of the Company’s total revenue. Operating income declined in 2018, but sales
to some customers increased significantly. Therefore, we deem revenue recognition as a key audit matter. For a 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 operatung effectiveness of the internal control and operating procedures.
176
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 Parent Company Only Financial
Statements
Management is responsible for the preparation and fair presentation of the parent company only financial statements in
accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and for such internal
control as management determines is necessary to enable the preparation of parent company only financial statements that are
free from material misstatement, whether due to fraud or error.
In preparing the parent company only financial statements, management is responsible for assessing the 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 Parent Company Only Financial Statements
Our objectives are to obtain reasonable assurance about whether the parent company only financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an 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 parent company only 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 parent company only financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
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
parent company only financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our 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 parent company only financial statements,
including the disclosures, and whether the parent company only financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
177
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 parent company only 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 parent company only financial statements for the year ended December 31, 2018 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 20, 2019
Notice to Readers
The accompanying financial statements are intended only to present the parent company only 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 parent company only
financial statements are those generally applied in the Republic of China.
For the convenience of readers, the independent auditors’ report and the accompanying parent company only 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 parent company only financial statements shall
prevail.
178
SUNPLUS TECHNOLOGY COMPANY LIMITED
BALANCE SHEETS
DECEMBER 31, 2018 AND 2017
(In Thousands of New Taiwan Dollars, Except Par Value)
ASSETS
CURRENT ASSETS
Cash and cash equivalents (Notes 3, 4 and 6)
Financial assets at fair value through profit or loss (FVTPL) - current (Notes 3, 4, 7
and 31)
Available-for-sale financial assets - current (Notes 3, 4, 5 and 9)
Accounts receivable, net (Notes 3, 4, 5, 11 and 32)
Other receivables (Notes 3, 4, 25 and 32)
Inventories (Notes 4 and 12)
Other financial assets (Notes 3, 16 and 33)
Other current assets (Note 16)
Total current assets
NON-CURRENT ASSETS
Financial assets at fair value through profit or loss (FVTPL) - non-current (Notes 3, 4,
7 and 31)
Financial assets at fair value through other comprehensive income (FVTOCI) - non-current
(Notes 3, 4, 8 and 31)
Available-for-sale financial assets - non-current (Notes 3, 4, 9 and 31)
Financial assets carried at cost (Notes 3, 4, 5 and 10)
Investments accounted for using the equity method (Notes 4, 13 and 32)
Property, plant and equipment (Notes 3, 4, 5, 14 and 33)
Intangible assets (Notes 4, 5 and 15)
Deferred tax assets (Notes 4, 5 and 25)
Other financial assets (Notes 3, 16 and 33)
Other non-current assets (Note 16)
Total non-current assets
TOTAL
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Short-term bank borrowings (Note 17)
Contract liabilities - current (Note 23)
Account payable (Note 18)
Provisions - current (Notes 3, 4 and 19)
Current portion of long-term bank loans (Notes 17 and 33)
Other current liabilities (Notes 3 and 20)
Total current liabilities
NON-CURRENT LIABILITIES
Long-term bank loans, net of current portion (Notes 17 and 33)
Net defined benefit liabilities (Notes 4 and 21)
Guarantee deposits
Other non-current liabilities, net of current portion (Note 23)
Total non-current liabilities
Total liabilities
EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY
Share capital (Notes 4 and 22)
Common shares
Capital surplus
Retained earnings
Legal reserve
Special reserve
Unappropriated earnings
Total retained earnings
Other equity
Treasury shares (Note 22)
Total equity
TOTAL
The accompanying notes are an integral part of the financial statements.
179
2018
2017
Amount
%
Amount
%
$
780,555
9
$
1,722,569
18
661,494
-
171,387
14,226
256,907
-
24,851
7
-
2
-
3
-
-
-
602,003
200,733
51,268
276,908
59,520
29,734
-
6
2
-
3
1
-
1,909,420
21
2,942,735
30
266,154
3
-
-
4,337
-
-
5,981,209
687,187
86,495
2,485
6,100
8,000
-
-
-
67
8
1
-
-
-
-
74,435
201,923
5,762,269
682,943
62,141
2,485
6,100
8,000
-
1
2
59
7
1
-
-
-
7,041,967
79
6,800,296
70
$
8,951,387
100
$
9,743,031
100
$
-
2,547
108,075
-
115,000
188,041
413,663
-
5,275
64,131
2,376
71,782
485,445
$
-
-
1
-
1
2
4
-
-
1
-
1
5
59,520
-
136,811
7,300
175,000
226,187
604,818
100,000
10,864
61,113
-
171,977
776,795
1
-
1
-
2
2
6
1
-
1
-
2
8
5,919,949
801,398
66
9
5,919,949
835,241
61
9
21
1
3
25
1,941,826
67,279
241,734
2,250,839
(442,843)
(63,401)
(5)
-
1,900,505
22,995
413,209
2,336,709
(62,262)
(63,401)
20
-
4
24
(1)
(1)
8,465,942
95
8,966,236
92
$
8,951,387
100
$
9,743,031
100
SUNPLUS TECHNOLOGY COMPANY LIMITED
STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017
(In Thousands of New Taiwan Dollars, Except Earnings Per Share)
2018
2017
Amount
%
Amount
%
NET OPERATING REVENUE (Notes 4, 23 and 32)
$ 1,238,780
100
$ 1,365,802
100
OPERATING COSTS (Notes 12, 21 and 24)
809,472
66
892,547
65
GROSS PROFIT
429,308
34
473,255
35
OPERATING EXPENSES (Notes 21, 24 and 32)
Selling and marketing expenses
General and administrative expenses
Research and development expenses
31,670
176,445
460,807
3
14
37
43,754
220,785
482,210
3
16
36
Total operating expenses
668,922
54
746,749
55
LOSS FROM OPERATIONS
(239,614)
(20)
(273,494)
(20)
NONOPERATING INCOME AND EXPENSES (Notes 4,
13, 24, 27 and 32)
Other income
Other gains and losses
Finance costs
Share of profit of associates and joint ventures
52,856
152,227
(4,864)
47,155
4
12
-
4
39,506
424,700
(8,337)
239,083
3
31
(1)
18
Total nonoperating income and expenses
247,374
20
694,952
51
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 losses from investments in equity
instruments at FVTOCI
Share of other comprehensive loss of subsidiaries,
associates and joint ventures accounted for using
equity method
Items that may be reclassified subsequently to profit or loss
(Notes 4 and 22)
421,458
31
-
-
421,458
31
7,760
2,144
5,616
3,443
-
-
-
-
(4,088)
(94,350)
(8)
-
(18,667)
(1)
(1,534)
-
-
-
(Continued)
180
SUNPLUS TECHNOLOGY COMPANY LIMITED
STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017
(In Thousands of New Taiwan Dollars, Except Earnings Per Share)
Exchange differences on translating foreign operations
Unrealized loss on available-for-sale financial assets
Share of other comprehensive (loss) income of
associates and joint ventures accounted for using
equity method
Other comprehensive loss for the year, net of income
2018
2017
Amount
%
Amount
%
18,919
-
2
-
(42,119)
(278,167)
(3)
(21)
(35,694)
(3)
13,624
1
tax
(126,349)
(10)
(312,284)
(23)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
$
(120,733)
(10) $
109,174
8
EARNINGS PER SHARE (Note 26)
Basic
Diluted
$
$
0.01
0.01
$
$
0.72
0.72
The accompanying notes are an integral part of the financial statements.
(Concluded)
181
SUNPLUS TECHNOLOGY COMPANY LIMITED
STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017
(In Thousands of New Taiwan Dollars)
Share Capital Issued and Outstanding
Retained Earnings
Translating
Gain (Loss) on
from Investments
Share
Unappropriated
Foreign
Available-for-sale
in Equity Instruments
(Thousands)
Amount
Capital Surplus
Legal Reserve
Special Reserve
Earnings
Operations
Financial Assets
Measured at FVTOCI
Treasury Shares
Total Equity
Other Equity
Exchange
Differences on
Unrealized
Unrealized Losses
BALANCE, JANUARY 1, 2017
591,995
$
5,919,949
$
911,110
$
1,890,531
$
21,927
$
99,738
$
(62,062 )
$
306,462
$
-
$
(63,401 )
$
9,024,254
Appropriation of the 2016 earnings
Legal reserve
Special reserve
Cash dividends for common shares
Difference between share price and book value from disposal of subsidiaries, associates
and joint ventures accounted for using the equity method
Issuance of share dividends from capital surplus
Difference between share price and book value from disposal of subsidiaries
Changes of equity of subsidiaries
Net profit for the year ended December 31, 2017
Other comprehensive loss for the year ended December 31, 2017, net of income tax
Total comprehensive income (loss) for the year ended December 31, 2017
Disposal of treasury shares
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(207,317 )
129,668
-
-
-
-
1,780
9,974
-
-
-
-
-
-
-
-
-
-
-
1,068
-
-
-
-
-
-
-
-
-
(9,974 )
(1,068 )
(88,681 )
(18 )
-
-
(2,624 )
421,458
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(5,622 )
(60,038 )
(246,624 )
415,836
(60,038 )
(246,624 )
-
-
-
BALANCE, DECEMBER 31, 2017
591,995
5,919,949
835,241
1,900,505
22,995
413,209
(122,100 )
59,838
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(88,681 )
(18 )
(207,317 )
129,668
(2,624 )
421,458
(312,284 )
109,174
1,780
(63,401 )
8,966,236
Effect of retrospective application and retrospective restatement
-
-
-
-
-
294,288
-
(59,838 )
(230,011 )
-
4,439
BALANCE, JANUARY 1, 2018 AS RESTATED
591,995
5,919,949
835,241
1,900,505
22,995
707,497
(122,100 )
Appropriation of the 2017 earnings
Legal reserve
Special reserve
Cash dividends for common shares
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 book value from disposal of subsidiaries
Changes of equity of subsidiaries
Net profit for the year ended December 31, 2018
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
50,782
(86,846 )
(271 )
-
-
41,321
-
-
-
-
-
-
-
182
-
44,284
-
-
-
-
-
-
(41,321 )
(44,284 )
(327,551 )
-
-
-
(22,606 )
5,616
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(230,011 )
(63,401 )
8,970,675
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(327,551 )
50,782
(86,846 )
(271 )
(22,606 )
5,616
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
-
-
-
-
-
-
-
-
-
-
2,492
-
-
-
-
-
-
-
-
-
1,453
7,069
-
(37,070 )
(16,775 )
(16,775 )
-
-
BALANCE, DECEMBER 31, 2018
591,995
$
5,919,949
$
801,398
$
1,941,826
$
67,279
$
241,734
$
(138,875 )
$
-
-
-
-
-
(111,027 )
(111,027 )
-
37,070
-
-
-
-
(126,349 )
(120,733 )
2,492
-
$
(303,968 )
$
(63,401 )
$
8,465,942
The accompanying notes are an integral part of the financial statements.
183
SUNPLUS TECHNOLOGY COMPANY LIMITED
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017
(In Thousands of New Taiwan Dollars)
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax
Adjustments for:
Depreciation expenses
Amortization expenses
Bad-debt expense
Net gain on the fair value change of financial assets designated as 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 investments
Gain on disposal of subsidiaries
Impairment loss recognized on financial assets
Impairment loss recognized on non-financial assets
Realized gain on the transactions with subsidiaries
Net loss on foreign currency exchange
Changes in operating assets and liabilities:
Decrease (increase) in other receivables
Decrease in trade receivables
Decrease (increase) in inventories
Decrease in other current assets
Decrease in contract liabilities
Decrease in trade payables
Decrease in provisions
Decrease in other current liabilities
Decrease in defined benefit liabilities
Cash generated from operations
Interest received
Dividends received
Interest paid
Income tax paid
2018
2017
$
7,760
$
421,458
45,232
42,802
-
13,218
4,864
(6,885)
(4,568)
(47,155)
-
(119,154)
-
-
(2,287)
203
22,170
29,387
20,001
4,883
(996)
(28,717)
-
(34,475)
(2,146)
(55,863)
7,398
278,568
(5,018)
(1,680)
45,365
32,582
30,558
-
8,337
(5,379)
(6,559)
(239,083)
(516,435)
-
96,567
21,577
(404)
6,494
(3,563)
117,072
(19,678)
40,071
-
(7,993)
(1,854)
(55,517)
(2,229)
(38,613)
5,422
353,024
(8,888)
-
Net cash generated from operating activities
223,405
310,945
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of financial assets at FVTPL
Proceeds from the sale of financial assets at FVTPL
Purchases of available-for-sale financial assets
Proceeds of the sale of available-for-sale financial assets
Capital returned to the Company - financial assets carried at cost
Purchase of investments accounted for using the equity method
Payments for property, plant and equipment
Payments for intangible assets
(454,704)
313,976
-
-
-
(346,554)
(41,358)
(65,360)
-
-
(275,420)
1,128,917
3,183
(393,281)
(14,568)
(48,365)
(Continued)
184
SUNPLUS TECHNOLOGY COMPANY LIMITED
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017
(In Thousands of New Taiwan Dollars)
Decrease in other assets - non-current
Decrease in refundable deposits
2018
2017
59,520
-
4,980
58
Net cash (used in) generated from investing activities
(534,480)
405,504
CASH FLOWS FROM FINANCING ACTIVITIES
(Repayments) proceeds of short-term borrowings
Repayments of long-term borrowings
Proceeds from guarantee deposits received
Refunds of guarantee deposits received
Dividends paid to owners of the Company
(59,520)
(160,000)
1,860
(752)
(414,397)
22,020
(670,832)
48,146
(48,249)
(295,998)
Net cash used in financing activities
(632,809)
(944,913)
EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH
HELD IN FOREIGN CURRENCIES
1,870
(6,712)
NET DECREASE IN CASH AND CASH EQUIVALENTS
(942,014)
(235,176)
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR
1,722,569
1,957,745
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR
$
780,555
$ 1,722,569
The accompanying notes are an integral part of the financial statements.
(Concluded)
185
SUNPLUS TECHNOLOGY COMPANY LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017
(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)
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 22).
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 20, 2019.
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 9 “Financial Instruments” and related amendments
IFRS 9 supersedes IAS 39 “Financial Instruments: Recognition and Measurement”, with
consequential amendments to IFRS 7 “Financial Instruments: Disclosures” and other standards.
IFRS 9 sets out the requirements for the classification, measurement and impairment of financial
assets and hedge accounting. Refer to Note 4 for information relating to the relevant accounting
policies.
The requirements for the classification, measurement and impairment of financial assets and
hedging cost have been applied retrospectively starting from January 1, 2018, and the other
requirements for hedge accounting have been applied prospectively. IFRS 9 is not applicable to
items that have already been derecognized as of December 31, 2017.
186
Classification, measurement and impairment of financial assets
On the basis of the facts and circumstances that existed as at January 1, 2018, the Company has
performed an assessment of the classification of recognized financial assets and has elected not to
restate prior reporting periods.
The following table shows the original measurement categories and carrying amounts under IAS 39
and the new measurement categories and carrying amounts under IFRS 9 for each class of the
Company’s financial assets and financial liabilities as at January 1, 2018.
Financial Assets
IAS 39
IFRS 9
IAS 39
IFRS 9
Remark
Measurement Category
Carrying Amount
Cash and cash equivalents Loans and receivables
Equity securities
Available‑for‑sale
Mutual funds
Available‑for‑sale
Loans and receivables
Notes receivable, trade
receivables and other
receivables
Restricted assets
Amortized cost
Mandatorily at FVTPL
Fair value through other
comprehensive income -
equity instruments
Mandatorily at FVTPL -
current
Amortized cost
$ 1,722,569 $ 1,722,569
(a)
201,923
-
186,286
98,687
(b)
676,438
602,003
(c)
252,001
252,001
(a)
Loans and receivables
Amortized cost
65,620
65,620
(a)
IAS 39
Carrying
Amount as of
IFRS 9
Carrying
Retained
Earnings
Other
Equity
Amount as of
Effect on
Effect on
Financial Assets
2018
cations
surements
2018
2018
2018
Remark
January 1,
Reclassifi-
Remea-
January 1,
January 1,
January 1,
FVTPL
$
Add: Reclassification from
available-for-sale (IAS 39)
FVTOCI
Add: Reclassification from
available-for-sale (IAS 39)
$
-
-
-
-
-
-
-
$
-
$
-
$
-
$
-
$
-
781,438
6,851
788,289
10,841
(3,990 )
(b), (c)
781,438
-
6,851
-
788,289
10,841
(3,990 )
-
-
-
96,923
1,764
98,687
201,877
(200,113 )
(b), (c)
96,923
1,764
98,687
201,877
(200,113 )
$ 878,361
$
8,615
$ 886,976
$ 212,718
$ (204,103 )
IAS 39
Adjustments
IFRS 9
Carrying
Arising from
Carrying
Retained
Earnings
Effect on
Other
Equity
Effect on
Amount as of
Initial
Amount as of
January 1,
January 1,
January 1, 2018
Application
January 1, 2018
2018
2018
Remark
Investments accounted for using the
$ 5,762,269
$
(4,176 )
$ 5,758,093
$
81,570
$
(85,746 )
(d)
equity method
a) Cash and cash equivalents, time deposits with original maturities of more than 3 months, trade
receivables (including related parties), other receivables and restricted assets that were
previously classified as loans and receivables under IAS 39 were classified as at amortized cost
with an assessment of expected credit losses under IFRS 9.
187
b) Investments in unlisted shares previously measured at cost under IAS 39 have been classified at
FVTPL and at FVTOCI under IFRS 9 and were remeasured at fair value. Consequently, an
increase of $111,851 and $6,851 thousand was recognized in financial assets at FVTPL and
retained earnings, respectively, on January 1, 2018; consequently, an increase of $98,687 and
$1,764 thousand was recognized in financial assets at FVTOCI and other equity - unrealized
gain (loss) on financial assets at FVTOCI, respectively, on January 1, 2018.
The Company recognized under IAS 39 impairment loss on certain investments in equity
securities previously measured at cost and the loss was accumulated in retained earnings.
Since those investments were designated as at FVTOCI under IFRS 9 and no impairment
assessment is required, an adjustment was made that resulted in a decrease of $201,877
thousand in other equity - unrealized gain (loss) on financial assets at FVTOCI and an increase
of $201,877 thousand in retained earnings on January 1, 2018.
c) Mutual funds previously classified as available-for-sale under IAS 39 were classified
mandatorily as at FVTPL under IFRS 9, because the contractual cash flows are not solely
payments of principal and interest on the principal outstanding and they are not equity
instruments. The retrospective adjustment resulted in a decrease of $3,990 thousand in other
equity - unrealized gain (loss) on available-for-sale financial assets and an increase of $3,990
thousand in retained earnings on January 1, 2018.
d) As a result of the retrospective application of IFRS 9 by Investments accounted for using the
equity method, there was a decrease in investments accounted for using the equity method of
$4,176 thousand, a decrease in other equity - unrealized gain (loss) on available-for-sale
financial assets of $55,848 thousand, a decrease in other equity - unrealized gain (loss) on
financial assets at FVTOCI of $85,746 thousand and an increase in retained earnings of $81,570
thousand on January 1, 2018.
2) IFRS 15 “Revenue from Contracts with Customers” and related amendments
IFRS 15 establishes principles for recognizing revenue that apply to all contracts with customers
and supersedes IAS 18 “Revenue”, IAS 11 “Construction Contracts” and a number of
revenue-related interpretations. Refer to Note 4 for the related accounting policies.
Currently, the estimate of allowances for sales returns which may occur in the year are recognized
as provisions. Under IFRS 15, such provisions are recognized as other current liabilities.
Impact on assets, liabilities and equity for the current period
Contract liabilities - current
Provisions - current
Other current liabilities
January 1, 2018
Carrying
Amount
$
-
7,300
226,187
Adjustments
Arising from
Initial
Application
$
3,543
(7,300)
3,757
January 1, 2018
Adjusted
Carrying
Amount
$
3,543
-
229,944
Total effect on liabilities
$ 233,487
$
-
$ 233,487
3) Amendments to IAS 12 “Recognition of Deferred Tax Assets for Unrealized Losses”
The amendments clarify that the difference between the carrying amount of a debt instrument
measured at fair value and its tax base gives rise to a temporary difference, even though there are
unrealized losses on that asset, irrespective of whether the Company expects to recover the carrying
amount of the debt instrument by sale or by holding it and collecting contractual cash flows.
188
In addition, in determining whether to recognize a deferred tax asset, the Company should assess a
deductible temporary difference in combination with all of its other deductible temporary
differences, unless the tax law restricts the utilization of losses as a deduction against income of a
specific type, in which case, a deductible temporary difference is assessed in combination only with
other deductible temporary differences of the appropriate type. The amendments also stipulate that,
when determining whether to recognize a deferred tax asset, the estimate of probable future taxable
profit may include some of the Company’s assets for more than their carrying amount if there is
sufficient evidence that it is probable that the Company will achieve the higher amount and that the
estimate for future taxable profit should exclude tax deductions resulting from the reversal of
deductible temporary differences.
4) IFRIC 22 “Foreign Currency Transactions and Advance Consideration”
IAS 21 stipulates that a foreign currency transaction shall be recorded on initial recognition in the
functional currency by applying to the foreign currency amount the spot exchange rate between the
functional currency and the foreign currency at the date of the transaction. IFRIC 22 further
explains that the date of the transaction is the date on which an entity recognizes a non-monetary
asset or non-monetary liability from payment or receipt of advance consideration. If there are
multiple payments or receipts in advance, the entity shall determine the date of the transaction for
each payment or receipt of advance consideration.
The Company applied IFRIC 22 prospectively to all assets, expenses and income recognized on or
after January 1, 2018 within the scope of the interpretation.
b. 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) (collectively, the “IFRSs”) endorsed by the FSC for application
starting from 2019
New IFRSs
Effective Date
Announced by IASB (Note 1)
Annual Improvements to IFRSs 2015-2017 Cycle
Amendments to IFRS 9 “Prepayment Features with Negative Compensation” January 1, 2019 (Note 2)
IFRS 16 “Leases”
Amendments to IAS 19 “Plan Amendment, Curtailment or Settlement”
Amendments to IAS 28 “Long-term Interests in Associates and Joint
January 1, 2019
January 1, 2019 (Note 3)
January 1, 2019
January 1, 2019
Ventures”
IFRIC 23 “Uncertainty Over Income Tax Treatments”
January 1, 2019
Note 1: Unless stated otherwise, the above New IFRSs are effective for annual periods beginning on
or after their respective effective dates.
Note 2: The FSC permits the election for early adoption of the amendments starting from 2018.
Note 3: The Company shall apply these amendments to plan amendments, curtailments or settlements
occurring on or after January 1, 2019.
1) IFRS 16 “Leases”
IFRS 16 sets out the accounting standards for leases that will supersede IAS 17 and a number of
related interpretations.
Definition of a lease
Upon initial application of IFRS 16, the Company will elect to apply the guidance of IFRS 16 in
determining whether contracts are, or contain, a lease only to contracts entered into (or changed) on
189
or after January 1, 2019. Contracts identified as containing a lease under IAS 17 and IFRIC 4 will
not be reassessed and will be accounted for in accordance with the transitional provisions under
IFRS 16.
190
The Company as lessee
Upon initial application of IFRS 16, lease liabilities for all leases on the parent company only
balance sheets except for those whose payments under low-value and short-term leases will be
recognized as expenses on a straight-line basis. On the parent company only statements of
comprehensive income, the Company will present 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 parent company only statements of cash flows, cash payments
for the principal portion of lease liabilities will be classified within financing activities; cash
payments for the interest portion will be classified within operating activities.
Currently, payments under operating lease contracts are recognized as expenses on a straight-line
basis. Cash flows for operating leases are classified within operating activities on the statements of
cash flows.
The Company anticipates applying IFRS 16 retrospectively with the cumulative effect of the initial
application of this standard recognized on January 1, 2019. Comparative information will not be
restated.
Anticipated impact on assets, liabilities and equity
Carrying
Amount as of
December 31,
2018
Adjustments
Arising from
Initial
Application
Adjusted
Carrying
Amount as of
January 1, 2019
$
$
$
$
-
-
-
-
-
$ 185,344
$ 185,344
$ 185,344
$ 185,344
$
3,913
181,431
$
3,913
181,431
$ 185,344
$ 185,344
Right-of-use assets
Total effect on assets
Lease liabilities - current
Lease liabilities – non-current
Total effect on liabilities
The Company as lessor
Except for sublease transactions, the Company will not make any adjustments for leases in which it
is a lessor and will account for those leases with the application of IFRS 16 starting from January 1,
2019.
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.
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3) Amendments to IFRS 9 “Prepayment Features with Negative Compensation”
IFRS 9 stipulated that if a contractual term of a financial asset permits the issuer (i.e. the debtor) to
prepay a debt instrument or permits the holder (i.e. the creditor) to put a debt instrument back to the
issuer before maturity and the prepayment amount substantially represents unpaid amounts of
principal and interest on the principal amount outstanding, which may include reasonable
compensation for early termination, the financial asset has contractual cash flows that are solely
payments of principal and interest on the principal amount outstanding. The amendments further
explained that reasonable compensation may be paid or received by either of the parties, i.e. a party
may receive reasonable compensation when it chooses to terminate the contract early.
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 amendment shall be applied
prospectively.
Except for the above impact, as of the date the 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
New IFRSs
Effective Date
Announced by IASB (Note 1)
Amendments to IFRS 3 “Definition of a Business”
Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between
January 1, 2020 (Note 2)
To be determined by IASB
an Investor and its Associate or Joint Venture”
IFRS 17 “Insurance Contracts”
Amendments to IAS 1 and IAS 8 “Definition of Materiality”
January 1, 2021
January 1, 2020 (Note 3)
Note 1: Unless stated otherwise, the above New IFRSs are effective for annual periods beginning on
or after their respective effective dates.
Note 2: 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 the
period.
Note 3: The Company shall apply these amendments prospectively for annual reporting periods
beginning on or after January 1, 2020.
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.
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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.
Except for the above impact, as of the date the 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 accompanying parent company only financial statements have been prepared in accordance with
the Regulations Governing the Preparation of Financial Reports by Securities Issuers, or other
regulations and IFRSs as endorsed by the FSC.
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
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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 (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.
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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.
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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.
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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.
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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 31.
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
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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.
2017
Financial assets are classified into the following categories: Available-for-sale financial assets
and loans and receivables.
i. Available-for-sale financial assets
Available-for-sale financial assets are non-derivatives that are either designated as
available-for-sale or are not classified as loans and receivables, held-to-maturity investments
or financial assets at fair value through profit or loss.
Available-for-sale financial assets are measured at fair value. Changes in the carrying
amount of available-for-sale monetary financial assets relating to changes in foreign
currency exchange rates, interest income calculated using the effective interest method and
dividends on available-for-sale equity investments are recognized in profit or loss. Other
changes in the carrying amount of available-for-sale financial assets are recognized in other
comprehensive income and will be reclassified to profit or loss when the investment is
disposed of or is determined to be impaired.
Dividends on available-for-sale equity instruments are recognized in profit or loss when the
Company’s right to receive the dividends is established.
Available-for-sale equity investments that do not have a quoted market price in an active
market and whose fair value cannot be reliably measured and derivatives that are linked to
and must be settled by delivery of such unquoted equity investments are measured at cost
less any identified impairment loss at the end of each reporting period and are presented in a
separate line item as financial assets carried at cost. If, in a subsequent period, the fair value
of the financial assets can be reliably measured, the financial assets are remeasured at fair
value. The difference between carrying amount and fair value is recognized in profit or loss
or other comprehensive income on financial assets. Any impairment losses are recognized in
profit and loss.
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ii. Loans and receivables
Loans and receivables (including notes and trade receivables, other receivables, cash and
cash equivalents, debt investments with no active market, and other receivables) are
measured using the effective interest method at amortized cost less any impairment, except
for short-term receivables when the effect of discounting is immaterial.
Cash equivalents includes time deposits and bonds with repurchase agreements with original
maturities from the date of acquisition, 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.
b) Impairment of financial assets
2018
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 (i.e. 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.
2017
Financial assets, other than those at fair value through profit or loss, are assessed for indicators
of impairment at the end of each reporting period. Financial assets are considered to be impaired
when there is objective evidence, as a result of one or more events that occurred after the initial
recognition of the financial assets, that the estimated future cash flows of the investment have
been affected.
For financial assets at amortized cost, such as trade receivables and other receivables, such
assets are assessed for impairment on a collective basis even if they were assessed not to be
impaired individually. Objective evidence of impairment for a portfolio of receivables could
include the Company’s past experience with collecting payments, an increase in the number of
delayed payments in the portfolio past the average credit period of 60 days, as well as
observable changes in national or local economic conditions that correlate with defaults on
receivables.
For a financial asset at amortized cost, the amount of the impairment loss recognized is the
difference between such an asset’s carrying amount and the present value of its estimated future
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cash flows, discounted at the financial asset’s original effective interest rate.
For financial assets at amortized cost, if, in a subsequent period, the amount of the impairment
loss decreases and the decrease can be related objectively to an event occurring after the
impairment was recognized, the previously recognized impairment loss is reversed through
profit or loss to the extent that the carrying amount of the investment (at the date the impairment
is reversed) does not exceed what the amortized cost would have been had the impairment not
been recognized.
For available-for-sale equity investments, a significant or prolonged decline in the fair value of
a security below its cost is considered to be objective evidence of impairment.
For all other financial assets, objective evidence of impairment could include significant
financial difficulty of the issuer or counterparty, breach of contract such as a default or
delinquency in interest or principal payments, it becoming probable that the borrower will enter
bankruptcy or financial re-organization, or the disappearance of an active market for those
financial assets because of financial difficulties.
When an available-for-sale financial asset is considered to be impaired, cumulative gains or
losses previously recognized in other comprehensive income are reclassified to profit or loss in
the period.
In respect of available-for-sale equity securities, impairment loss previously recognized in profit
or loss is not reversed through profit or loss. Any increase in fair value subsequent to an
impairment loss is recognized in other comprehensive income. In respect of available-for-sale
debt securities, impairment loss is subsequently reversed through profit or loss if an increase in
the fair value of the investment can be objectively related to an event occurring after the
recognition of the impairment loss.
For financial assets carried at cost, the amount of the impairment loss is measured as the
difference between such an asset’s carrying amount and the present value of its estimated future
cash flows discounted at the current market rate of return for a similar financial asset. Such
impairment loss will not be reversed in subsequent periods.
The carrying amount of a financial asset is reduced by the impairment loss directly for all
financial assets, with the exception of trade receivables and other receivables, where the
carrying amount is reduced through the use of an allowance account. When trade receivables
and other receivables are considered uncollectible, they are written off against the allowance
account. Subsequent recoveries of amounts previously written off are credited against the
allowance account. Changes in the carrying amount of the allowance account are recognized in
profit or loss except for uncollectible trade receivables and other receivables that are written off
against the 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.
Before 2018, on derecognition of a financial asset in its entirety, 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. Starting from 2018, 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
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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. 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.
l. Revenue recognition
2018
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.
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2017
Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced
for estimated customer returns, rebates and other similar provisions. Provisions for sales returns and
liabilities for returns are recognized at the time of sale based on the seller’s reliable estimate of future
returns and based on past experience and other relevant factors.
1) Sale of goods
Revenue from the sale of goods is recognized when the goods are delivered and titles have passed,
at which time all the following conditions are satisfied:
a) The Company has transferred to the buyer the significant risks and rewards of ownership of the
goods;
b) The Company retains neither continuing managerial involvement to the degree usually
associated with ownership nor effective control over the goods sold;
c) The amount of revenue can be measured reliably;
d) It is probable that the economic benefits associated with the transaction will flow to the
Company; and
e) The costs incurred or to be incurred in respect of the transaction can be measured reliably.
The Company does not recognize sales revenue on materials delivered to subcontractors because
this delivery does not involve a transfer of risks and rewards of materials ownership.
2) Dividend and interest income
Dividend income from investments is recognized when the shareholder’s right to receive payment
has been established provided that it is probable that the economic benefits will flow to the
Company and the amount of income can be measured reliably.
Interest income from a financial asset is recognized when it is probable that the economic benefits
will flow to the Company and the amount of income can be measured reliably. Interest income is
accrued on a time basis, by reference to the principal outstanding and at the effective interest rate
applicable.
m. Leasing
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.
203
n. 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.
p. 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, unused loss carry forward and unused
tax credits for purchases of machinery, equipment and technology, research and development
expenditures, and personnel training expenditures to the extent that it is probable that taxable profits
will be available against which those deductible temporary differences can be utilized. Such
deferred tax assets and liabilities are not recognized if the temporary difference arises from goodwill
or from the initial recognition (other than in a business combination) of other assets and liabilities in
a transaction that affects neither the taxable profit nor the accounting profit.
204
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.
Where current tax or deferred tax arises from the initial accounting for a business combination, the
tax effect is included in the accounting for the business combination.
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.
a. Estimated impairment of financial assets - 2018
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.
205
b. Estimated impairment of receivable - 2017
When there is objective evidence of impairment loss of receivables, the Company takes into consideration the
estimation of the future cash flows of such assets. The amount of impairment loss is measured as the difference
between such an asset’s carrying amount and the present value of its estimated future cash flows (excluding future
credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate. Where the
actual future cash flows are less than expected, a material impairment loss may arise.
c. 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.
For the year ended December 31, 2018 and 2017, the Company recognized impairment losses on intangible assets of
$0 and $21,577 thousand, respectively.
6. CASH AND CASH EQUIVALENTS
Cash on hand
Checking accounts and demand deposits
Cash equivalents
Time deposits
December 31
2018
2017
$
$
424
522,131
258,000
479
724,090
998,000
$
780,555
$ 1,722,569
The market rate intervals of cash in bank and bank overdrafts at the end of the reporting period were as follows:
December 31
2018
2017
Bank balance
0.01%-0.65%
0.01%-0.63%
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
December 31
2018
2017
$ 661,494
$
-
(Continued)
206
Financial liabilities at FVTPL - non-current
Financial assets classified as at FVTPL
Non-derivative financial assets
- Unlisted debt securities - ROC
- Mutual funds
- Securities listed in other countries
December 31
2018
2017
$ 190,050
75,432
672
$
$ 266,154
$
-
-
-
-
(Concluded)
8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME - 2018
Non-current
Domestic and foreign investments
- Unlisted shares and emerging market shares
9. AVAILABLE-FOR-SALE FINANCIAL ASSETS - 2017
Current
Domestic investments
- Mutual funds
Non-current
Domestic investments
- Mutual funds
10. FINANCIAL ASSETS MEASURED AT COST - 2017
Non-current
Unlisted shares and emerging market shares
Classified according to financial asset measurement categories
Classified as available for sale
December 31,
2018
$
4,337
December 31,
2017
$ 602,003
$
74,435
December 31,
2017
$ 201,923
$ 201,923
Management believed that the above unlisted equity investments held by the Company, whose fair value cannot be
reliably measured due to the range of reasonable fair value estimates was so significant; therefore they were measured at
cost less impairment at the end of reporting period.
207
The Company believed that the above financial asset carried at cost had impairment losses of $96,567 as of December 31,
2017.
11. ACCOUNTS RECEIVABLE, NET
Trade receivables
At amortized cost
Gross carrying amount
Less: Allowance for impairment loss
2018
December 31
2018
2017
$ 171,387
-
$ 307,990
(107,257)
$ 171,387
$
$ 200,733
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, 2018
Not Overdue
Overdue
1- 60 days
Overdue
61-90 days
Overdue
91-120 days
Overdue 121
days or More
Total
Gross carrying amount
Expected credit losses
$ 171,387
-
$
$
-
-
$
-
-
$
-
-
-
-
$ 171,387
-
Amortized cost at December 31, 2018
$ 171,387
$
-
$
-
$
-
$
-
$ 171,387
208
The movements of the loss allowance of trade receivables were as follows:
Balance at January 1, 2018 per IAS 39
Adjustment on initial application of IFRS 9
Balance at January 1, 2018 per IFRS 9
Less: Amounts written off (Note)
Balance at December 31, 2018
December 31,
2018
$ 107,257
-
107,257
(107,257)
$
-
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.
December 31, 2017
The average credit period on sales of goods was the same as 2018. In determining the recoverability of a trade receivable,
the Company considered any change in the credit quality of the trade receivable since the date on which credit was
initially granted until the end of the reporting period. An allowance for impairment loss was recognized against trade
receivables based on the estimated irrecoverable amounts determined by reference to past default experience with the
counterparties and an analysis of their respective current financial positions.
Of the trade receivables balance that were past due at the end of the reporting period, the Company did not recognize an
allowance for the impairment for notes and trade receivables as of December 31, 2017, because there had been no
significant change in credit quality and the amounts were still considered recoverable. The Company did not hold any
collateral or other credit enhancements over these balances nor did it have a legal right to make offsets against any
amounts owed by the Company to any respective counterparty.
The aging of receivables is as follows:
0-60 days
61-90 days
91-120 days
121-360 days
More than 361 days
Total
The above aging schedule was based on the invoice date.
December 31,
2017
$ 184,337
16,396
-
-
107,257
$ 307,990
209
Movements of the allowance for impairment loss recognized on notes receivable and trade receivables are as follows:
Balance at January 1, 2017
Add: Impairment losses recognized on receivables
Balance at December 31, 2017
Individually
Impaired
Collectively
Impaired
$
76,699
30,558
$ 107,257
$
$
-
-
-
Total
$
76,699
30,558
$ 107,257
12. INVENTORIES
Finished goods
Work in progress
Raw materials
December 31
2018
2017
$
98,872
129,316
28,719
$ 126,860
130,703
19,345
$ 256,907
$ 276,908
The costs of inventories recognized as cost of goods sold for the years ended December 31, 2018 and 2017 were
$809,472 thousand and $892,547 thousand, respectively.
The costs of inventories recognized as costs of goods sold for the years ended December 31, 2018 and 2017 were as follows:
(Loss) gains on inventory value recoveries
Income from scrap sales
13. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD
Years Ended December 31
2017
2018
$
(17,880)
87
$
14,308
69
$
(17,793)
$
14,377
Investments in subsidiaries
Investments in associates
December 31
2018
2017
$ 5,384,684
596,525
$ 5,382,918
379,351
$
5,981,209
$
5,762,269
210
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.
Magic Sky Limited
Wei-Young Investment Inc.
Sunplus mMedia Inc.
Award Glory Ltd.
Sunplus mMobile Inc.
Jumplux Technology Co., Ltd.
Sunplus Management Consulting
Sunplus Technology (H.K.)
iCatch Technology Inc.
December 31
2018
2017
$
704,549
$
723,246
1,354,351
1,028,567
750,558
579,038
523,083
174,391
82,747
56,947
46,128
33,116
29,785
17,475
3,910
39
-
1,489,741
915,693
799,259
520,859
481,414
115,593
89,418
17,870
24,886
-
30,202
-
3,951
38
170,748
$ 5,384,684
$ 5,382,918
Credit balances on the carrying values of long-term investments
(recorded as other current liabilities)
Award Glory Ltd.
$
-
$
12,990
Except for Sunplus Management Consulting, the investments accounted for using equity method and
the share of profit or loss and other comprehensive income of those investments for the years ended
December 31, 2018 and 2017 were based on the subsidiaries’ financial statements audited by the
Company’s auditors for the same reporting periods as those of the Company. Refer to Note 35 for the
detail list of investments in subsidiaries.
The percentage subsidiaries’ ownerships and voting right held by the Company:
December 31
2018
34%
100%
100%
100%
100%
61%
-
91%
100%
100%
2017
34%
100%
100%
100%
100%
61%
38%
61%
100%
100%
(Continued)
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
iCatch Technology Inc.
Sunext Technology Co., Ltd.
Magic Sky Limited
Sunplus mMobile Inc.
211
Sunplus mMedia Inc.
Wei-Young Investment Inc.
Sunplus Management Consulting
Sunplus Technology (H.K.)
Jumplux Technology
Award Glory Ltd.
b.
Investments in associates
Associates
Global View Co., Ltd.
iCatch Technology Inc.
Name of Associate
Global View Co., Ltd.
iCatch Technology Inc.
December 31
2018
90%
100%
100%
100%
55%
100%
2017
87%
100%
100%
100%
-
100%
(Concluded)
December 31
2018
2017
$ 307,106
289,419
$ 379,351
-
$ 596,525
$ 379,351
Proportion of Ownership and Voting
Rights
December 31
2018
13%
30%
2017
13%
-
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.
$ 248,530
$ 392,134
All the associates are accounted for using the equity method.
The summarized financial information of the Company’s associates is set out below:
December 31
2018
2017
Total assets
Total liabilities
Revenue
December 31
2018
2017
$ 2,346,302
365,599
$
$ 2,062,675
129,672
$
Years Ended December 31
2017
2018
$ 1,005,661
$ 188,461
212
Profit for the period
Comprehensive income
Share of profits of associates accounted for using the equity method
$
$
$
(35,177)
(95,076)
(18,098)
53,596
$
$ 739,555
91,044
$
The amounts of share of profits of associates are based on the associates’ financial statements audited by the
auditors.
14. PROPERTY, PLANT AND EQUIPMENT
Year Ended December 31, 2017
Machinery
Auxiliary
and
Testing
Furniture and
Prepayments
Buildings
Equipment
Equipment
Equipment
Fixtures
for Equipment
Total
Cost
Balance, beginning of year
$ 969,205
$
47,321
$
1,168
$ 171,272
$
27,551
$
Additions
Disposals
-
-
2,843
(8,772 )
1,144
(87 )
100
(7,227)
2,076
(1,547 )
Balance, end of year
$ 969,205
$
41,392
$
2,225
$ 164,145
$
28,080
$
Accumulated depreciation and
impairment
Balance, beginning of year
$ 303,220
$
29,533
$
Depreciation expense
Disposals
19,721
-
4,415
(8,772 )
570
520
(87 )
$ 149,504
$
11,545
$
14,390
(7,227)
6,319
(1,547 )
Balance, end of year
$ 322,941
$
25,176
$
1,003
$ 156,667
$
16,317
$
Net, end of year
$ 646,264
$
16,216
$
1,222
$
7,478
$
11,763
$
-
-
-
-
-
-
-
-
-
$ 1,216,517
6,163
(17,633 )
$ 1,205,047
$ 494,372
45,365
(17,633 )
$ 522,104
$ 682,943
Year Ended December 31, 2018
Machinery
Auxiliary
and
Testing
Furniture and
Prepayments
Buildings
Equipment
Equipment
Equipment
Fixtures
for Equipment
Total
Cost
Balance, beginning of year
$ 969,205
$
41,392
$
2,225
$ 164,145
$
28,080
$
-
$ 1,205,047
Additions
Disposals
-
-
275
(9,476 )
-
(455 )
36,552
(1,791 )
9,709
(2,787 )
2,940
-
49,476
(14,509 )
Balance, end of year
$ 969,205
$
32,191
$
1,770
$ 198,906
$
35,002
$
2,940
$ 1,240,014
Accumulated depreciation and
impairment
Balance, beginning of year
$ 322,941
$
25,176
$
1,003
$ 156,667
$
16,317
$
Depreciation expense
Disposals
19,721
-
3,954
(9,476 )
537
(455 )
14,699
(1,791 )
6,321
(2,787 )
Balance, end of year
$ 342,662
$
19,654
$
1,085
$ 169,575
$
19,851
$
-
-
-
-
$ 522,104
45,232
(14,509 )
$ 552,827
Net, end of year
$ 626,543
$
12,537
$
685
$
29,331
$
15,151
$
2,940
$ 687,187
The above items of property, plant and equipment were depreciated on a straight-line basis over the following estimated
213
useful lives:
Buildings
Auxiliary equipment
Machinery and equipment
Testing equipment
Furniture and fixtures
35-56 years
4-11 years
4 years
1-5 years
4-5 years
Refer to Note 33 for the carrying amounts of property, plant and equipment that had been pledged by the Company to
secure borrowings.
15. INTANGIBLE ASSETS
Cost
Balance at January 1
Additions
Disposals
Year Ended December 31, 2017
Technology
License Fees
Software
Patents
Total
$
$
235,447
43,398
(7,263)
$
19,759
4,405
(7,782)
97,099
-
-
$
352,305
47,803
(15,045)
Balance at December 31
$
271,582
$
16,382
$
97,099
$
385,063
Accumulated amortization
Balance at January 1
Amortization expense
Disposals
$
$
86,429
25,749
(7,263)
$
12,070
5,484
(7,782)
74,173
1,349
-
$
172,672
32,582
(15,045)
Balance at December 31
$
104,915
$
9,772
$
75,522
$
190,209
Accumulated deficit
Balance at January 1
Additions
$
111,136
-
$
$
-
-
-
21,577
$
111,136
21,577
Balance at December 31
$
111,136
$
-
$
21,577
$
132,713
Carrying amounts at December 31,
2017
$
55,531
$
6,610
$
-
$
62,141
Year Ended December 31, 2018
Technology
License Fees
Software
Patents
Total
Cost
Balance at January 1
Additions
Disposals
$
$
271,582
63,880
(20,568)
$
16,382
3,276
(8,538)
97,099
-
-
$
385,063
67,156
(29,106)
Balance at December 31
$
314,894
$
11,120
$
97,099
$
423,113
(Continued)
214
Year Ended December 31, 2018
Technology
License Fees
Software
Patents
Total
Accumulated amortization
Balance at January 1
Amortization expense
Disposals
$
$
104,915
38,036
(20,568)
$
9,772
4,766
(8,538)
75,522
-
-
$
190,209
42,802
(29,106)
Balance at December 31
$
122,383
$
6,000
$
75,522
$
203,905
Accumulated deficit
Balance at January 1
Additions
$
111,136
-
$
$
-
-
21,577
-
$
132,713
-
Balance at December 31
$
111,136
$
-
$
21,577
$
132,713
Carrying amounts at December 31,
2018
$
81,375
$
5,120
$
-
$
86,495
(Concluded)
The company recognized impairment loss on above intangible assets $21,577 thousand as of December 31, 2017,
respectively.
These intangible assets were depreciated on a straight-line basis at the following rates per annum:
Technology license fees
Software
Patents
An analysis of the amortization by function:
Operating costs
Selling and marketing expenses
General and administrative expenses
Research and development expenses
1-10 years
1-5 years
18 years
December 31
2018
2017
$
191
3
3,933
38,675
$
483
6
4,392
27,701
$ 42,802
$ 32,582
215
16. OTHER ASSETS
Current
Other financial assets
Pledged time deposits (a)
Other assets
Prepayments for EDA tools
Prepaid royalty
Others
Non-current
Other financial assets
Pledged time deposits (a)
Other assets
Refundable deposits
Others
a. Refer to Notes 29 and 33 for information on pledged time deposits.
17. LOANS
a. Short-term borrowings
Unsecured borrowings
Bank loans
December 31
2018
2017
$
-
$ 59,520
$ 16,019
5,170
3,662
$ 18,986
5,627
5,121
$ 24,851
$ 29,734
$
6,100
$
6,100
$
200
7,800
$
200
7,800
$
8,000
$
8,000
December 31
2018
2017
$
-
$ 59,520
The weighted average effective interest rate on the bank loans as of December 31, 2017 were 2.65%.
b. Long-term borrowings
The borrowings of the Company were as follows:
Loans on credit
Less: Current portion
December 31
2018
2017
$ 115,000
115,000
$ 275,000
175,000
Long-term borrowings - non-current
$
-
$ 100,000
The effective rate borrowings as of December 31 2018 and 2017 were 1.545%-1.600%, and 1.545%-1.925%.
According to the loan contract, the financial statements of the company for 107 and 106 years are limited by current
216
ratio, debt ratio, interest guarantee multiple and current ratio, debt ratio and a restriction on net tangible assets.
However, the Company’s inability to meet the ratio requirements would not be deemed as a violation of the
contracts. As of 2018 and 2017, the Company was in compliance with these financial ratio requirements.
18. ACCOUNTS AND NOTES PAYABLE
Accounts payable
Payable - operating
December 31
2018
2017
$ 108,075
$ 136,811
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.
19. PROVISIONS
Customer returns and rebates
December 31,
2017
$
7,300
The provision for customer returns and rebates was based on historical experience, management’s judgments and other
known reasons such as estimated product returns and rebates that may occur in the following year. The provision is
recognized as a reduction of operating income in the period the related goods are sold.
20. OTHER LIABILITIES
Current
Other liabilities
Salaries or bonuses
Payable for royalties
Payable on machinery and equipment
Refund liabilities (Note 23)
Labor/health insurance
Compensation due to directors
Credit balances on the carrying values of long-term investments
Others
December 31
2018
2017
$ 102,634
19,459
7,770
9,014
7,491
199
-
41,474
$ 112,458
38,501
2,028
-
7,302
10,807
12,990
42,101
$ 188,041
$ 226,187
Non-current
Payable on machinery and equipment
$
2,376
$
-
21. 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
217
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.
The amounts included in the balance sheets in respect of the Company’s defined benefit plans were as follows:
December 31
2018
2017
Present value of funded defined benefit obligation
Fair value of plan assets
$ 169,342
(164,067)
$ 165,832
(154,968)
Net defined benefit liabilities
$
5,275
$
10,864
Amounts recognized in profit or loss in respect of these defined benefit plans are as follows:
Balance at January 1, 2017
Service cost
Current service cost
Interest expense
Recognized in profit or loss
Remeasurement
Return on plan assets
Actuarial (gain) loss-changes in financial
assumptions
Adjustment on actuarial (gain) loss-experience
adjustment
Recognized in other comprehensive income
Contributions from employer
Present Value of
Funded Defined
Benefit
Obligation
Fair Value of
Plan Assets
Net Liabilities
(Assets) Arising
from Defined
Benefit
Obligation
$ 159,999
$ 150,994
$
9,005
573
2,560
3,133
-
4,553
(1,853)
2,700
-
-
2,438
2,438
(1,388)
-
-
(1,388)
2,924
573
122
695
(1,388)
4,553
(1,853)
4,088
(2,924)
Balance at December 31, 2017
$ 165,832
$ 154,968
Present Value of
Funded Defined
Benefit
Obligation
Fair Value of
Plan Assets
$
10,864
(Continued)
Net Liabilities
(Assets) Arising
from Defined
Benefit
Obligation
Balance at January 1, 2018
Service cost
Current service cost
Interest expense
Recognized in profit or loss
Remeasurement
Return on plan assets
$ 165,832
$ 154,968
$
10,864
587
2,322
2,909
-
-
2,190
2,190
4,044
587
132
719
(4,044)
218
Actuarial (gain) loss-changes in financial
assumptions
Adjustment on actuarial (gain) loss-experience
adjustment
Recognized in other comprehensive income
Contributions from employer
5,484
(4,883)
601
-
-
-
4,044
2,865
Balance at December 31, 2018
$ 169,342
$ 164,067
5,484
(4,883)
(3,443)
(2,865)
$
5,275
(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
2018
2017
$
153
6
232
328
$
186
5
221
283
$
719
$
695
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.
219
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
2018
2017
1.15%
4.00%
0%-28%
1.40%
4.00%
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
2018
2017
$
$
(5,484)
5,726
$ 23,638
$ (20,348)
$
$
(5,666)
5,924
$ 24,545
$ (21,012)
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
$
2,866
$
2,923
The average duration of the defined benefit obligation
15 years
16 years
December 31
2018
2017
22. EQUITY
a. Share capital
1) Common shares:
December 31
2018
2017
Numbers of shares authorized (in thousands)
Shares authorized
1,200,000
$ 12,000,000
1,200,000
$ 12,000,000
Number of shares issued and fully paid (in thousands)
Shares issued
591,995
5,919,949
$
591,995
5,919,949
$
Fully paid common 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
220
In March 2001, Sunplus issued 20,000 thousand units of global depositary receipts (GDRs), representing
40,000 thousand common 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, 2018, the outstanding 175 thousand units of GDRs represented 350 thousand common shares.
b. Capital surplus
A reconciliation of the carrying amount at the beginning and at the end of 2018 and 2017 for each component of
capital surplus was as follows:
December 31
2018
2017
May be used to offset a deficit, distributed as cash dividends, or
transferred to share capital (1)
From the issuance of common 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
$ 409,213
157,423
$ 496,059
157,423
140,022
140,293
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
43,958
50,782
41,466
-
$ 801,398
$ 835,241
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$0.5 per share.
221
Under the regulations promulgated, a special reserve equivalent to the debit balance of any account shown in the
shareholders’ equity section of the balance sheet (for example, unrealized loss on financial assets and cumulative
translation adjustments) should be allocated from unappropriated retained earnings. For the policies on the
distribution of employees’ compensation and remuneration to directors and supervisors before and after
amendment, refer to Note 24-6.
Appropriation of earnings to the legal reserve shall be made until the legal reserve equals the Company’s paid-in
capital. The legal reserve may be used to offset deficit. If the Company has no deficit and the legal reserve has
exceeded 25% of the Company’s paid-in capital, the excess may be transferred to capital or distributed in cash.
The Company appropriates or reverses a special reserve in accordance with Rule No. 1010012865 and Rule No.
1010047490 issued by the FSC and the directive entitled “Questions and Answers on Special Reserves
Appropriated Following the Adoption of IFRSs”. Distributions can be made out of any subsequent reversal of the
debit to other equity items.
The appropriations from the 2017 and 2016 earnings were approved at the shareholders’ meetings in June 11, 2018
and on June 13, 2017, respectively. The appropriations, including dividends, were as follows:
Appropriation of Earnings
Dividends Per Share (NT$)
For Year 2017
For Year 2016
For Year 2017
For Year 2016
Legal reserve
Special reserve
Cash dividend
$
41,321
44,284
327,551
$
9,974
1,068
88,681
$
0.5533
$
0.1498
The Company’s shareholders also proposed in the shareholders’ meeting on June 11, 2018 to issue cash dividends
from capital surplus of $86,846 thousand.
The Company’s shareholders also proposed in the shareholders’ meeting on June 13, 2017 to issue cash dividends
from capital surplus of $207,317 thousand.
The appropriations of earnings, the bonuses for employees, and the remuneration of directors for 2018 are subject to
resolution in the shareholders’ meeting to be held on March 20, 2019.
Legal reserve
Special reserve
Appropriation of
Earnings
Dividends Per
Share (NT$)
561
$
241,173
$
-
-
The Company’s board of directors also proposed in the shareholders’ meeting on March 20, 2019 to issue cash
dividends from capital surplus of $213,118 thousand.
The appropriation of earnings for 2018 are subject to resolution in the shareholders’ meeting to be held on June 10,
2019.
d. Special reserve
Beginning at January 1
Appropriations to the special reserve
Balance at December 31
e. Other equity items
For the Year Ended December 31
2018
2017
$ 22,995
44,284
$ 21,927
1,068
$ 67,279
$ 22,995
1) Exchange differences or translating the financial statements of foreign operations
222
Years Ended December 31
2017
2018
Balance at January 1
Share of exchange differences of associates accounted for using the
$ (122,100)
$
(62,062)
equity method
Balance at December 31
(16,775)
(60,038)
$ (138,875)
$ (122,100)
2) Unrealized gain (loss) on available-for-sale financial assets:
Balance at January 1, 2017
Changes in fair value of available-for-sale financial assets
Cumulative loss reclassified to profit or loss upon disposal of
available-for-sale financial assets
Reclassification adjustments to profit or loss on impairment of
available-for-sale financial assets
Share of unrealized gain on revaluation of jointly controlled entities
accounted for using the equity method
Balance at December 31, 2017
Effect of retrospective application and retrospective restatement -
IFRS 9
Balance at January 1, 2018 (IFRS 9)
$ 306,462
262,308
(515,385)
-
6,453
59,838
(59,838)
$
-
3) Unrealized gain (loss) from investments in equity instruments measured at fair value through other
comprehensive income:
Balance at January 1 (IAS 39)
Effect of retrospective application and retrospective restatement -
IFRS 9
Balance at January 1 (IFRS 9)
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, 2018
$
-
(230,011)
(230,011)
(94,350)
37,070
(16,677)
$ (303,968)
223
f. Noncontrolling interests
Purpose of Buyback
Number of shares as of January 1, 2017
Decrease
Number of shares as December 31, 2017
Number of shares as of January 1, 2018
Decrease
Number of shares as December 31, 2018
Shares
Transferred to
Employees (in
Thousands of
Shares)
Shares Held by
Its Subsidiaries
(in Thousands of
Shares)
Total (in
Thousands of
Shares)
-
-
-
-
-
-
3,560
-
3,560
3,560
-
3,560
3,560
-
3,560
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)
Carrying
Amount
Market Price
December 31, 2018
Lin Shin Investment Co., Ltd
3,560
$ 63,401
$ 40,050
December 31, 2017
Lin Shin Investment Co., Ltd
3,560
$ 63,401
$ 58,384
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.
23. REVENUE
Revenue from the sale of goods
Other
a. Contract information
Revenue from the sale of goods
Years Ended December 31
2017
2018
$ 1,114,399
124,381
$ 1,272,853
92,949
$ 1,238,780
$ 1,365,802
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.
224
b. 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
c. Contract balances
Trade receivables (Note 11)
Contract liabilities - current
Reportable
Segments
Direct Sales
$
964,181
224,409
50,190
$ 1,238,780
$ 1,173,618
65,162
$ 1,238,780
December 31,
2018
$ 171,387
2,547
$
The variation of contract liabilities is mainly due to the difference between the time when the performance
obligation is met and the payment schedule of the customer.
24. NET PROFIT
Net profit included the following items:
a. Other income
Rent income
Dividend income
Interest income
Others
Years Ended December 31
2017
2018
$
29,740
4,568
6,885
11,663
$
18,543
6,559
5,379
9,025
$
52,856
$
39,506
225
b. Other gains and losses
Gain on disposal of associates
Service income of management support
Net foreign exchange gain (loss)
Net loss on financial assets and liabilities
Net loss on financial assets designated as at FVTPL (Note 7)
Gain on disposal of investment
Impairment loss on financial assets carried at cost
Net loss on non-financial assets
c. Finance costs
Interest on bank loans
Other financial 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
Years Ended December 31
2017
2018
$ 119,154
44,542
1,749
$
-
38,649
(12,240)
(13,218)
-
-
-
-
516,435
(96,567)
(21,577)
$ 152,227
$ 424,700
Years Ended December 31
2017
2018
$
3,887
977
$
7,558
779
$
4,864
$
8,337
Years Ended December 31
2017
2018
$
4,044
41,188
$
4,858
40,507
$
45,232
$
45,365
$
191
42,611
$
483
32,099
$
42,802
$
35,582
226
e. Employee benefit expense
Short-term benefits
Post-employment benefits
Defined contribution plans
Defined benefit plans (Note 21)
Other employee benefits
Years Ended December 31
2017
2018
$ 422,759
$ 475,467
18,402
719
19,121
10,314
18,959
695
19,654
10,868
Total employee benefit expense
$ 452,194
$ 505,989
An analysis of employee benefit expense by function
Operating costs
Operating expenses
$
61,245
390,949
$
79,790
426,199
$ 452,194
$ 505,989
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, 2018 and 2017, which have been approved by the
Company’s board of directors on March 20, 2019 and March 14, 2018, respectively, were as follows:
Accrual rate
Employees’ compensation
Remuneration of directors
Amount
For the Year Ended December 31
2018
1.0%
1.5%
2017
1.0%
1.5%
For the Year Ended December 31
2018
2017
Cash
Shares
Cash
Shares
Employees’ compensation
Remuneration of directors
$
$
80
119
$
-
-
4,323
6,484
$
-
-
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,
2017 and 2016.
Information on the employees’ compensation and remuneration of directors resolved by the Company’s
board of directors in 2019 and 2018 is available at the Market Observation Post System website of the
Taiwan Stock Exchange.
g. Gain or loss on exchange rate changes
227
Years Ended December 31
2017
2018
$
21,272
(19,523)
$
23,910
(36,150)
$
1,749
$
(12,240)
Exchange rate gains
Exchange rate losses
25. INCOME TAXES
a.
Income tax recognized in profit or loss
The major components of tax expense (income) 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
Years Ended December 31
2017
2018
$
1,680
464
$
(373)
373
Income tax expense recognized in profit or loss
$
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
Years Ended December 31
2017
2018
$
$
7,760
$ 421,458
1,552
$
71,648
(31,528)
(21,414)
(47)
(51,437)
51,437
1,680
464
(130,105)
18,802
(40)
(39,695)
39,695
-
-
Income tax benefit (expense) recognized in profit or loss
$
2,144
$
-
Based on the Income Tax Act in the ROC, the applicable corporate tax rate used by the Company in 2017 was 17%.
In February 2018, the Income Tax Act in the ROC was amended and, starting from 2018, the corporate income tax
rate has been adjusted from 17% to 20%. In addition, the rate of the corporate surtax applicable to the 2018
unappropriated earnings has been reduced from 10% to 5%.
As the status of the 2019 appropriation of earnings is uncertain, the potential income tax consequences of the 2018
unappropriated earnings are not reliably determinable.
228
b. Current tax assets and liabilities
Current tax assets
Tax refund receivable (classified as other receivables)
December 31
2018
2017
$
508
$
3,073
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, 2018
Deferred Tax Assets
Opening Balance
Recognized in
Profit or Loss
Closing Balance
Temporary differences
Depreciation expense
Exchange (gains) losses
Others
For the year ended December 31, 2017
$
791
(468)
2,162
$
(28)
171
(143)
$
763
(297)
2,019
$
2,485
$
-
$
2,485
Deferred Tax Assets
Opening Balance
Recognized in
Profit or Loss
Closing Balance
Temporary differences
Depreciation expense
Exchange (gains) losses
Others
$
2,893
(13)
(395)
$
(2,102)
(455)
2,557
$
791
(468)
2,162
$
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
December 31
2018
2017
$
190,618
211,457
322,509
394,894
1,144,831
24,228
$
190,618
211,457
322,509
394,894
1,163,758
-
$ 2,288,537
$ 2,283,236
Deductible temporary differences
$
124,021
$
432,827
229
e. Unused loss carryforwards and tax exemptions
Loss carryforwards as of December 31, 2018:
Unused Amount
$
190,618
211,457
322,509
394,894
1,144,831
24,228
$ 2,288,537
Expiry Year
2019
2020
2021
2022
2023
2027
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
f.
Income tax assessments
January 1, 2015 to December 31, 2019
January 1, 2015 to December 31, 2019
The income tax returns of the Company before 2015 had been assessed by the tax authorities.
26. EARNINGS PER SHARE
Basic gain per share
Diluted earnings per share
Unit: NT$ Per Share
Years Ended December 31
2017
2018
$
$
0.01
0.01
$
$
0.72
0.72
The earnings and weighted average number of common 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 common shares
Bonuses for employees
Years Ended December 31
2017
2018
$
5,616
$ 421,458
-
-
Earnings used in the computation of diluted EPS from continuing operations
$
5,616
$ 421,458
230
Weighted average number of common shares outstanding (in thousand shares):
Weighted average number of common shares used in the computation of
basic earnings per shares
Effect of dilutive potential common shares:
Employee bonuses
Years Ended December 31
2017
2018
$ 588,435
$ 588,435
60
284
Weighted average number of common shares used in the computation of
diluted earnings per share
$ 588,495
$ 588,719
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.
27. 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 31 to the Company’s consolidated financial statements for the year ended
December 31, 2018.
28. EQUITY TRANSACTIONS WITH NON-CONTROLLING INTEREST
For details about the partial disposal of Sunext Technology Co., Ltd. and Jumplux Technology, refer to Note 32 to the
Company’s consolidated financial statements for the year ended December 31, 2018.
29. OPERATING LEASE ARRANGEMENTS
The Company as lessee
Operating leases relate to leases of land with lease terms between 20 years. The Company does not have a bargain
purchase option to acquire the leased land at the expiry of the lease periods.
The Company leases lands from Science-Based Industrial Park Administration (SBIPA) under renewable agreements
expiring in December 2020, December 2021 and December 2034. The SBIPA has the right to adjust the annual lease
amount. The amount was $8,318 thousand for the period ended. The Company had pledged $6,100 thousand time
deposits (classified as other non-current financial assets) as collateral for the land lease agreements.
231
Future annual minimum rentals under the leases are as follows:
Up to 1 year
Over 1 year to 5 years
Over 5 years
30. CAPITAL MANAGEMENT
December 31
2018
2017
$
8,318
21,079
36,576
$
8,259
23,855
39,901
$ 65,973
$ 72,015
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.
31. 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, 2018
Financial assets at FVTPL
Mutual funds
Unlisted debt securities -
ROC
Securities listed in other
countries
Financial assets at FVTOCI
Unlisted shares and
Level 1
Level 2
Level 3
Total
$
736,926
$
-
$
-
$
736,926
-
672
-
-
190,050
190,050
-
672
$
737,598
$
-
$
190,050
$
927,648
emerging market shares
$
-
$
-
$
4,337
$
4,337
December 31, 2017
Level 1
Level 2
Level 3
Total
232
Available-for-sale financial
assets
Mutual funds
$
676,438
$
-
$
-
$
676,438
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, 2018
Financial Assets
Financial Assets
at FVTPL
Financial Assets
at FVTOCI
Balance at January 1, 2018
Recognized in profit or loss
Recognized in other comprehensive income
Purchases
Sales
$ 111,851
(26,801)
-
201,000
(96,000)
$
98,687
-
(94,350)
-
-
Total
$ 210,538
(26,801)
(94,350)
201,000
(96,000)
Balance at December 31, 2018
$ 190,050
$
4,337
$ 194,387
c. Categories of financial instruments
Financial assets
Financial assets at FVTPL
Loans and receivables (i)
Available-for-sale financial assets (ii)
Financial assets at amortized cost (iii)
Financial assets at fair value through other comprehensive income
$
Equity instruments
Financial liabilities
December 31
2018
2017
927,648
-
-
927,468
4,337
-
2,040,390
878,361
-
-
Measured at amortized cost (iv)
287,206
532,444
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.
iii) The balances include financial assets 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.
iv) The balances include financial liabilities measured at amortized cost, which comprise short-term and long-term
loans, guarantee deposits, trade and other payables and long-term liabilities - current portion.
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.
233
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 32.
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
$
(3,163)
$
(4,955)
USD Impact
Years Ended December 31
2017
2018
Profit or loss
b) Interest rate risk
RMB Impact
Years Ended December 31
2017
2018
$
(1,007)
$
(1,069)
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.
December 31
234
Fair value interest rate risk
Financial assets
Financial liabilities
Cash flow interest rate risk
Financial assets
Financial liabilities
Sensitivity analysis
2018
2017
$
264,100
-
$ 1,063,620
59,520
521,977
115,000
723,936
275,000
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, 2018 and 2017 would decrease/increase by $509 thousand
and $561 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, 2018 would have increased/decreased by $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, 2018 would have increased/decreased by $43 thousand, respectively.
Had equity prices been 1% higher/lower, post-tax profit for the year ended December 31, 2017 would have
increased/decreased by $6,764 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
235
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 91% and 87% in total trade receivables as of December 31, 2018
and 2017, 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, 2018 and 2017,
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.
236
Fixed interest rate liabilities
105
-
15,000
-
100,000
-
-
2,633
-
61,427
December 31, 2018
Non-derivative financial
liabilities
Noninterest bearing
Variable interest rate
liabilities
December 31, 2017
Non-derivative financial
liabilities
Noninterest bearing
Variable interest rate
liabilities
On Demand
or Less than
1 Month
1-3 Months
More than 3
Months to 1
Year
Over 1 Year
to 5 Years
5+ Years
$
-
$ 147,657
$
-
$
-
$
-
$
105
$ 162,657
$ 100,000
$
2,633
$ 61,427
On Demand
or Less than
1 Month
1-3 Months
More than 3
Months to 1
Year
Over 1 Year
to 5 Years
5+ Years
$
-
$ 156,523
$
-
$
-
$
-
Fixed interest rate liabilities
246
59,533
-
-
175,000
-
100,000
-
-
61,746
$ 59,779
$ 156,523
$ 175,000
$ 100,000
$ 61,746
b) Financing facilities
Unsecured bank overdraft facility
Amount used
Amount unused
December 31
2018
2017
$
115,000
3,121,450
$
334,520
2,733,280
$ 3,236,450
$ 3,067,800
32. TRANSACTIONS WITH RELATED PARTIES
a. Name and relationship of related parties
Related Party Name
Related Party Category
Xiamen Xm-plus Technology Ltd.
iCatch Technology, Inc.
Advanced Vehicle Systems Co., Ltd.
Jumplux Technology Co., Ltd.
Generalplus Technology Inc.
Associate (Note 1)
Associate (Note 2)
Associate (Note 3)
Subsidiary
Subsidiary
(Continued)
237
Related Party Name
Related Party Category
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
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: On July 31, 2018, the company assessed that it had lost control of iCatch Technology, Inc.; therefore, it is
classified as an associate.
(Concluded)
Note 3:
It is an associate of the company; subsidiary of AutoSys Co., Ltd.
b. Sales of goods
Account Items
Related Parties Types
2018
2017
For the Year Ended December 31
Sales of goods
Subsidiaries
Associates
$
19,460
28,058
$
29,031
-
$
47,518
$
29,031
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
2018
2017
December 31
Trade receivables
Other receivable
Subsidiaries
Associates
Subsidiaries
Associates
$
$
$
2,047
2,400
4,447
5,339
1,358
$
$
$
4,747
-
4,747
7,844
-
$
6,697
$
7,844
There were no guarantees on outstanding receivables from related parties. For the years ended December 31, 2018
and 2017, no impairment loss was recognized for trade receivables from related parties.
238
d. Other transactions with related parties
Account Item
Related Parties Types
2018
2017
For the Year Ended December 31
Nonoperating income
and expenses
Subsidiaries
Associates
$ 44,508
8,072
$ 43,542
-
$ 52,580
$ 43,542
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, 2018
Related Party
Category/Name
Line Item
Number of
Shares
Underlying Assets Purchase Price
Subsidiary
Subsidiary
Investments accounted
for using the equity
method
Investments accounted
for using the equity
method
3,200
Jumplux
$ 32,000
Technology Co.,
Ltd.
8,251
Sunext Technology
24,752
Co., Ltd.
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 in October to December 2018.
f. Compensation of key management personnel
Short-term employee benefits
Post-employment benefits
For the Year Ended December 31
2018
2017
$ 18,100
269
$ 14,072
269
$ 18,369
$ 14,341
Compensation of directors and other key management personnel was decided by the Compensation Committee in
accordance with individual performance and market trends.
239
33. 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
$ 615,136
$ 634,538
and non-current)
6,100
65,620
$ 621,236
$ 700,158
December 31
2018
2017
34. 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, 2018
Financial assets
Monetary items
USD
CNY
JPY
HKD
GBP
Nonmonetary items subsidiaries accounted for using
equity method
USD
HKD
Financial liabilities
Monetary items
USD
CNY
Foreign
Currencies
(In Thousands)
Exchange Rate
Carrying Amount
$
7,594
1,012
279
34
3
21,546
10
30.715
4.472
0.278
3.921
38.880
30.715
3.921
$ 233,250
4,526
78
133
117
661,785
39
4,431
5
30.715
4.472
136,098
22
240
December 31, 2017
Financial assets
Monetary items
HKD
USD
CNY
JPY
GBP
Nonmonetary items subsidiaries accounted for using
equity method
USD
HKD
Financial liabilities
Monetary items
USD
CNY
GBP
Foreign
Currencies
(In Thousands)
Exchange Rate
Carrying Amount
$
13,650
9,924
1,075
360
3
20,507
10
4,969
6
1
3.807
29.760
4.565
0.264
40.110
29.760
3.807
29.760
4.565
40.110
$
51,966
295,338
4,907
95
120
610,288
38
147,877
27
40
The significant unrealized foreign exchange gains (losses) were as follows:
Foreign
Currencies
Exchange Rate
Net Foreign
Exchange (Loss)
Gain
Exchange Rate
2018
2017
USD
HKD
CNY
30.715 (USD:NTD)
3.921 (HKD:NTD)
4.472 (CNY:NTD)
$
(1,234)
-
(32)
29.760 (USD:NTD)
3.807 (HKD:NTD)
4.565 (CNY:NTD)
$
(1,266)
Net Foreign
Exchange (Loss)
Gain
$
(1,831)
(1,039)
-
$
(2,870)
35. 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.
5) Information on investee: Table 4 (attached)
b. Information on investments in mainland China
241
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 5)
Except for Table 1 to Table 5, there’s no further information about other significant transactions.
242
SUNPLUS TECHNOLOGY COMPANY LIMITED
FINANCINGS PROVIDED
FOR THE YEAR ENDED DECEMBER 31, 2018
(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
Item
Value
Financing Limit
for Each
Borrower
Aggregate
Financing Limit
TABLE 1
1 Ventureplus Cayman Inc.
Sun Media Technology
Other receivables
Yes
$
40,027
$
-
$
6,900
-
-
-
3.1971%
Note 1
$
1.8%
Note 1
Co., Ltd.
2 Sunplus Technology (Shanghai)
Sunplus Technology
Co., Ltd.
2 Sunplus Technology (Shanghai)
Co., Ltd.
(Beijing)
Sunplus APP
Technology
2 Sunplus Technology (Shanghai)
Sun Media Technology
Co., Ltd.
Co., Ltd.
3 Russell Holdings Ltd.
Sun Media Technology
Co., Ltd.
4 Sunplus Venture Capital Co.,
Sun Media Technology
Ltd.
Co., Ltd.
5 Sunplus Prof-tek Technology
Ytrip Technology Co.,
(Shenzhen)
Ltd.
5 Sunplus Prof-tek Technology
Sunplus APP
(Shenzhen)
Technology
Receivables from
related parties
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
Yes
29,959
25,108
25,108
1.8%
Note 1
219,120
91,300
91,300
1.8%
Note 1
381,320
256,923
256,923
2.35%
Note 1
321,321
230,061
168,561
2.2%
Note 1
1,963
-
-
1.8%
Note 1
41,086
29,673
29,673
1.8%
Note 1
-
-
-
-
-
-
-
-
Note 2
$
Note 3
Note 4
Note 5
Note 6
Note 7
Note 8
Note 9
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
-
$
-
-
-
-
-
-
-
$
135,431
(Note 10 )
259,645
(Note 12 )
21,637
(Note 11 )
259,645
(Note 12 )
463,230
(Note 13 )
411,427
(Note 14 )
40,850
(Note 15 )
40,850
(Note 15 )
270,862
(Note 10 )
259,645
(Note 12 )
43,274
(Note 11 )
259,645
(Note 12 )
463,230
(Note 13 )
411,427
(Note 14 )
81,700
(Note 15 )
81,700
(Note 15 )
Note 1:
Short-term financing.
Note 2: Ventureplus Cayman Inc. 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 Technology (Beijing).
Note 4:
Sunplus Technology (Shanghai) Co., Ltd. provided funds for the operating needs of Sunplus APP Technology.
Note 5:
Sunplus Technology (Shanghai) Co., Ltd. provided funds for the operating needs of Sun Media Technology Co., Ltd.
Note 6:
Russell Holdings Ltd. provided funds for the operating needs of Sun Media Technology Co., Ltd.
Note 7:
Sunplus Venture Capital provided funds for the operating needs of Sun Media Technology Co., Ltd.
Note 8:
Sunplus Prof-tek Technology (Shenzhen) provided funds for the operating needs of Ytrip Technology Co., Ltd.
Note 9:
Sunplus Prof-tek Technology (Shenzhen) provided funds for the operating needs of Sunplus APP Technology.
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 should not exceed 20% of Ventureplus Cayman Inc.’s net equity based on its latest financial statements, and the individual amount of each guarantee should not exceed
10% of Ventureplus Cayman Inc.’s net equity based on its latest financial statements; in addition, each guarantee period should not exceed two years.
Note 11: 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 12: 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 13: 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 14: 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 15: 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.
243
SUNPLUS TECHNOLOGY COMPANY LIMITED
ENDORSEMENTS/GUARANTEES PROVIDED
FOR THE YEAR ENDED DECEMBER 31, 2018
(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)
Endorsee/Guarantee
No.
Endorser/
Guarantor
Name
Nature of
Relationship
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)
TABLE 2
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
0
(Note 1)
Sunplus Technology
Company Limited
(“Sunplus”)
Ventureplus Cayman Inc.
3 (Note 4)
Sun Media Technology Co., Ltd.
3 (Note 4)
Ytrip Technology Co., Ltd.
3 (Note 4)
Sunext Technology Co., Ltd.
2 (Note 3)
1
(Note 2)
Russell Holdings Ltd. Sun Media Technology Co., Ltd.
3 (Note 4)
$ 846,594
(Note 5)
846,594
(Note 5)
846,594
(Note 5)
846,594
(Note 5)
347,423
(Note 7)
$ 160,075
$
-
$
-
$
417,528
417,528
219,960
121,780
-
-
20,000
10,000
10,000
-
-
-
-
-
4.93
-
0.12
316,025
156,725
125,380
156,725
27.07
$ 1,693,188
(Note 6)
1,693,188
(Note 6)
1,693,188
(Note 6)
1,693,188
(Note 6)
347,423
(Note 7)
Yes
Yes
Yes
Yes
No
No
No
No
No
No
No
Yes
Yes
No
Yes
Note 1:
Issuer.
Note 2:
Investee.
Note 3: The endorser directly holds more than 50% of the common shares of the endorsee.
Note 4: Sunplus and its subsidiaries jointly hold more than 50% of the common 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.
244
SUNPLUS TECHNOLOGY COMPANY LIMITED
MARKETABLE SECURITIES HELD
FOR THE YEAR ENDED DECEMBER 31, 2018
(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
Shares or Units
(In Thousands)
Carrying Amount
Percentage of
Ownership (%)
Market Value or
Net Asset Value
Note
December 31, 2018
TABLE 3
Sunplus Technology Company Limited
Nomura Taiwan Money Market
(the “Company”)
Mega RMB Money Market RMB
FSITC RMB Money Market TWD
Yuanta AUD Money Market
Taishin China-US Money Market
Yuanta USD Money Market TWD
Yuanta RMB Money Market CNY
Mega Diamond Money Market
PineBridge Preferred Securities
UPAMC James Bond Money Market
Yuanta USD Money Market USD
PineBridge Multi-Income
Jih Sun Money Market
Prudential Financial RMB Money Market TWD
Yuanta RMB Money Market TWD
Pictet-Security RI
Yuanta Emerging Indonesia and India 4 years
Bond Fund
Broadcom Inc.
Triknight Capital Corporation
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Financial assets at fair value through
616
$
10,043
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
466
5,387
2,000
3,000
4,396
470
24,408
53,267
18,518
30,287
42,367
24,253
Financial assets at fair value through
13,197
165,249
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
2,946
1,851
247
3,000
3,420
5,810
1,702
2
1,500
-
28,431
30,887
78,532
28,955
50,589
57,669
18,039
61,430
14,002
672
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
10,043 Note 3
24,408 Note 3
53,267 Note 3
18,518 Note 3
30,287 Note 3
42,367 Note 3
24,253 Note 3
165,249 Note 3
28,431 Note 3
30,887 Note 3
78,532 Note 3
28,955 Note 3
50,589 Note 3
57,669 Note 3
18,039 Note 3
61,430 Note 3
14,002 Note 3
672 Note 2
Financial assets at fair value through
21,000
190,050
5
190,050 Note 1
profit or loss - non-current
(Continued)
245
Holding Company Name
Type and Name of Marketable Security
Relationship with the Holding
Company
Financial Statement Account
Shares or Units
(In Thousands)
Carrying Amount
Percentage of
Ownership (%)
Market Value or
Net Asset Value
Note
December 31, 2018
Sunplus Technology Company Limited
Availink Inc.
(the “Company”)
Network Capital Global Fund
Lin Shih Investment Co., Ltd.
CTBC Global iSport Fund
Yuanta Multi-Income
Paradigm Pion Money Market Fund
Ruentex Material Co., Ltd.
Taiwan Mask Corp.
Global Pmx Co., Ltd. - CB
Laster Tech Corporation Ltd. - CB
Everlight Electronics Co., Ltd. - CB
Genius Vision Digital Co., Ltd.
Ortery Technologies, Inc.
Chain Sea Information Integration Co., Ltd.
Sanjet Technology Corporation
Minton Optic Industry Co., Ltd.
Ability Enterprise Co., Ltd.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Sunplus Technology Co., Ltd.
Parent company
Lead Sun Corporation
Prine Rich International Co., Ltd.
Russell Holdings Limited
Synerchip Inc.
OZ Optics Limited
-
-
-
-
9,039
$
590
380
1,000
3,000
870
20
101
200
15
80
600
103
69
8
4,272
5,434
3,560
1,000
33
6,452
1,000
3,747
9,410
25,680
10,042
526
1,853
19,300
1,466
7,952
-
-
1,121
-
-
78,246
40,050
30,756
3,380
-
-
-
7
-
-
-
-
-
-
-
-
4
1
-
-
7
2
1
-
-
12
8
$
590 Note 1
3,747 Note 1
9,410 Note 3
25,680 Note 3
10,042 Note 3
526 Note 2
1,853 Note 2
19,300 Note 2
1,466 Note 2
7,952 Note 2
- Note 1
- Note 1
1,121 Note 1
- Note 1
- Note 1
78,246 Note 2
40,050 Note 2
30,756 Note 1
3,380 Note 1
- Note 1
- Note 1
(Continued)
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 - 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
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
246
Holding Company Name
Type and Name of Marketable Security
Relationship with the Holding
Company
Financial Statement Account
Shares or Units
(In Thousands)
Carrying Amount
Percentage of
Ownership (%)
Market Value or
Net Asset Value
Note
December 31, 2018
Russell Holdings Limited
Ortega InfoSystem, Inc.
Innobrige International Inc.
Ether Precision Inc.
Asia Tech Taiwan Venture, L.P.
Asia B2B on Line Inc.
AMED Ventures I, L.P.
Availink Inc.
GeneOne Diagnostics Corporation
Intudo Ventures II, L.P.
Sunplus Venture Capital Co., Ltd.
Taiwan Mask Corp.
Fubon Financial Holding Co., Ltd.
Cathay China A50
Cyberon Corporation
Grand Fortune Venture Capital Co., Ltd.
Ortery Technologies, Inc.
Book4u Company Limited
Sanjet Technology Corp.
Simple Act Inc.
Information Technology Total Services
Minton Optic Industry Co., Ltd.
Raynergy Tek Inc.
Genius Vision Digital
CDIB Capital Growth Partners L.P.
2,557
$
4,000
1,250
-
1,000
-
9,920
1,710
-
108
1,900
2,900
786
5,000
68
9
49
1,900
51
5,000
4,500
750
-
-
-
-
-
-
6,143
31,280
21,113
9,215
1,982
47,937
47,995
28,820
54,500
-
-
-
-
-
-
64,890
-
36,970
-
15
1
5
3
-
8
-
-
-
-
-
8
7
1
-
-
10
-
8
16
5
2
$
- Note 1
- Note 1
- Note 1
- Note 1
- Note 1
6,143 Note 1
31,280 Note 1
21,113 Note 1
9,215 Note 1
1,982 Note 2
47,937 Note 2
47,995 Note 2
28,820 Note 1
54,500 Note 1
- Note 1
- Note 1
- Note 1
- Note 1
- Note 1
- Note 1
64,890 Note 1
- Note 1
36,970 Note 1
(Continued)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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
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 - 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
247
Holding Company Name
Type and Name of Marketable Security
Relationship with the Holding
Company
Financial Statement Account
Shares or Units
(In Thousands)
Carrying Amount
Percentage of
Ownership (%)
Market Value or
Net Asset Value
Note
December 31, 2018
Sunplus Venture Capital Co., Ltd.
VenGlobal International Fund
TIEF Fund LP
San Neng Group Holding Co., Ltd.
Intudo Ventures I, L.P.
eWave System, Inc.
Feature Integration Technology Inc.
Qun-Kin Venture Capital
Sunplus Technology (Shanghai) Co., Ltd. GF B Type Money Market Fund
GF Every Day The Red Haired Type Money
Market Fund B
Chongqing CYIT Communication Technology
Co., Ltd.
Ready Sun Investment Group Fund
Xiamen Xm-plus Technology Ltd.
Generalplus Technology Inc.
Franklin Templeton SinoAm Money Market
Sunplus Innovation Technology Inc.
Mega Diamond Money Market
Yuanta De-Li Money Market Fund
Yuanta USD Money Market USD
Yuanta RMB Money Market
Yuanta USD Money Market TWD
Fuh Hwa You Li Money Market
Yuanta De-Li Money Market
Yuanta De-Bao Money Market
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
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
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
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
248
-
900
-
1,833
1,386
3,000
6,400
5,700
-
-
-
5,721
2,601
810
150
3,679
6,712
2,235
4,333
5,000
1,000
1
$
-
43,742
39,150
29,663
-
7
2
8
$
- Note 1
43,742 Note 1
39,150 Note 2
29,663 Note 1
-
22
- Note 1
17,320
25,200
29,162
25,587
-
43,708
8,076
59,048
42,347
10,143
47,512
38,982
64,694
30,072
70,553
60,010
24,513
4
6
-
-
3
16
4
-
-
-
-
-
-
-
-
-
17,320 Note 2
25,200 Note 1
29,162 Note 3
25,587 Note 3
- Note 1
43,708 Note 1
8,076 Note 1
59,048 Note 3
42,347 Note 3
10,143 Note 3
47,512 Note 3
38,982 Note 3
64,694 Note 3
30,072 Note 3
70,553 Note 3
60,010 Note 3
10
24,513 Note 1
(Continued)
Holding Company Name
Type and Name of Marketable Security
Relationship with the Holding
Company
Financial Statement Account
Sunplus Innovation Technology Inc.
Advanced NuMicro System, Inc.
Point Grab Ltd.
Magic Sky Limited
GTA Co., Ltd. - CB
Giant Rock Inc.
Xiamen Xm-plus Technology Ltd.
-
-
-
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
Shares or Units
(In Thousands)
2,000
182
-
-
December 31, 2018
Carrying Amount
Percentage of
Ownership (%)
Market Value or
Net Asset Value
Note
$
848
-
82,623
32,306
8
1
-
15
$
848 Note 1
- Note 1
82,623 Note 1
32,306 Note 1
Note 1: The market value was based on the carrying amount as of December 31, 2018.
Note 2: The market value was based on the closing price as of December 31, 2018.
Note 3: The market value was based on the net asset value of the fund as of December 31, 2018.
Note 4: The exchange rate was based on the exchange rate as of December 31, 2018.
(Concluded)
249
SUNPLUS TECHNOLOGY COMPANY LIMITED
NAMES, LOCATIONS, AND RELATED INFORMATION OF INVESTEES ON WHICH THE COMPANY EXERCISES SIGNIFICANT INFLUENCES
DECEMBER 31, 2018
(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)
Investor
Investee
Location
Main Businesses and Products
Investment Amount
Balance as of December 31, 2018
December 31,
2018
December 31,
2017
Shares
(Thousands)
Percentage of
Ownership (%)
Carrying
Amount
Net Income
(Loss) of the
Investee
Investment
Gain (Loss)
Note
TABLE 4
Sunplus Technology Company Limited
Ventureplus Group Inc.
Award Glory Ltd.
Belize
Belize
Investment
Investment
GLOBAL VIEW CO., LTD.
Hsinchu, Taiwan
Consumer electronics, components and rental
2,460,981
$
( US$
74,605
RMB 37,900 )
62,720
2,042 )
315,658
( US$
2,451,767
$
( US$
74,305
RMB 37,900 )
23,712
772 )
315,658
( US$
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.
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
Magic Sky Limited
Samoa
Sunplus mMobile Inc.
Wei-Young Investment Inc.
Jumplux Technology Co., Ltd.
Generalplus Technology Inc.
Sunext Technology Co., Ltd.
Sunplus Innovation Technology Inc.
iCatch Technology, Inc.
Sunplus mMedia Inc.
Jumplux Technology Co., Ltd.
Sunplus Innovation Technology Inc.
iCatch Technology, Inc.
Sunext Technology Co., Ltd.
Sunplus mMedia Inc.
Han Young Technology Co., Ltd.
Hsinchu, Taiwan
Hsinchu, Taiwan
Hsinchu, Taiwan
Hsinchu, Taiwan
Hsinchu, Taiwan
Hsinchu, Taiwan
Hsinchu, Taiwan
Hsinchu, Taiwan
Hsinchu, Taiwan
Hsinchu, Taiwan
Hsinchu, Taiwan
Hsinchu, Taiwan
Hsinchu, Taiwan
Taipei, Taiwan
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
Design of ICs
Design of ICs
Lin Shih Investment Co., Ltd.
Sunplus Venture Capital Co., Ltd.
Russell Holdings Limited
Sunext Technology Co., Ltd.
Hsinchu, Taiwan
Design of ICs
Autosys Co., Ltd.
Cayman Islands, British west Indies
Investment
( US$
( US$
699,988
281,001
999,982
414,663
757,432
24,660 )
207,345
924,730
357,565
5,000
43,425
11,075 )
308,133
10,032 )
2,596,792
70,157
132,000
699,988
281,001
999,982
414,663
739,003
24,060 )
207,345
924,730
357,565
5,000
43,425
11,075 )
305,921
9,960 )
2,596,792
30,157
-
( HK$
( HK$
( US$
( US$
86,256
-
15,701
9,645
19,408
101,000
57,388
33,439
-
44,878
4,200
-
- )
( US$
76,788
2,500 )
( US$
( US$
86,256
369,316
15,701
9,645
19,408
101,000
57,388
33,439
385,709
44,878
4,200
65,085
2,119 )
-
-
-
100
$
1,354,351
$
(79,793 ) $
(79,793 ) Subsidiary
100
33,116
(7,932 )
(7,932 ) Subsidiary
8,229
13
307,106
82,960
10,837 Investee
70,000
37,324
100,000
31,450
24,660
20,735
58,050
22,441
500
11,075
100
34
100
61
100
30
91
90
100
100
750,558
704,549
1,028,567
523,083
579,038
289,419
174,391
46,128
3,910
39
64,080
284,344
55,005
60,709
1,965
(103,184 )
1,808
(1,647 )
(41 )
-
61,556 Subsidiary
97,531 Subsidiary
55,005 Subsidiary
37,109 Subsidiary
1,965 Subsidiary
(28,936 ) Investee
2,746 Subsidiary
(58,822 ) Subsidiary
(41 ) Subsidiary
- Subsidiary
-
100
82,747
(14,459 )
(14,459 ) Subsidiary
16,240
5,400
13,200
14,892
-
1,075
965
650
10,100
2,904
3,332
-
1,909
420
-
5,000
100
100
55
14
-
2
1
3
42
6
5
-
8
70
-
19
29,785
56,947
17,475
282,537
-
15,662
13,793
6,000
13,370
49,298
47,647
-
2,371
1,780
(417 )
2,338
(73,126 )
(417 ) Subsidiary
2,339 Subsidiary
(17,085 ) Subsidiary
284,344
1,808
60,709
(103,184 )
(1,647 )
(73,126 )
60,709
(103,184 )
1,808
(1,647 )
-
38,915 Subsidiary
54 Subsidiary
1,268 Subsidiary
(1,016 ) Investee
(2,186 ) Investee
(43,067 ) Subsidiary
3,426 Subsidiary
(3,510 ) Investee
128 Subsidiary
(6,419 ) Subsidiary
- Subsidiary
-
1,808
( US$
Subsidiary
11
- )
71,254
(14,214 )
(4,738 ) Investee
Wei-Young Investment Inc.
Sunext Technology Co., Ltd.
Hsinchu, Taiwan
Design of ICs
-
350
-
-
-
1,808
2 Subsidiary
Ventureplus Group Inc.
Ventureplus Mauritius Inc.
Mauritius
Investment
Ventureplus Mauritius Inc.
Ventureplus Cayman Inc.
Cayman Islands, British West Indies
Investment
Generalplus Technology Inc.
Generalplus International (Samoa) Inc.
Samoa
Investment
Generalplus International (Samoa) Inc.
Generalplus (Mauritius) Inc.
Mauritius
Investment
2,460,981
74,605
( US$
RMB 37,900 )
2,451,767
74,305
( US$
RMB 37,900 )
2,460,981
( US$
74,605
RMB 37,900 )
2,460,981
( US$
74,305
RMB 37,900 )
586,349
19,090 )
( US$
586,349
19,090 )
( US$
586,349
19,090 )
( US$
586,349
19,090 )
( US$
-
-
100
1,354,332
(79,794 )
(79,794 ) Subsidiary
100
1,354,309
(79,795 )
(79,795 ) Subsidiary
19,090
100
480,817
14,211
14,211 Subsidiary
19,090
100
480,815
14,211
14,211 Subsidiary
(Continued)
Investor
Investee
Location
Main Businesses and Products
Generalplus (Mauritius) Inc.
Generalplus Technology (Hong Kong) Inc.
Hong Kong
Sales
Investment Amount
Balance as of December 31, 2018
December 31,
2018
December 31,
2017
Shares
(Thousands)
Percentage of
Ownership (%)
Carrying
Amount
Net Income
(Loss) of the
Investee
Investment
Gain (Loss)
Note
$
(US$
11,979
390 )
$
(US$
11,979
390 )
390
100
$
5,253
$
(462 ) $
(462 ) Subsidiary
Sunplus mMedia Inc.
Jumplux Technology Co., Ltd.
Hsinchu, Taiwan
Design of ICs
-
32,000
Award Glory Ltd.
Sunny Fancy Ltd.
Seychelles
Investment
Sunny Fancy Ltd.
Giant Kingdom Ltd.
Giant Rock Inc.
Seychelles
Anguilla
Investment
Investment
62,720
2,042 )
(US$
23,712
772 )
(US$
23,712
772 )
39,008
1,270 )
(US$
(US$
23,712
772 )
-
- )
(US$
(US$
-
-
-
-
-
100
100
100
-
(48,781 )
(10,034 ) Subsidiary
33,116
(7,932 )
(7,932 ) Subsidiary
811
(3,121 )
(3,121 ) Subsidiary
32,306
(4,812 )
(4,812 ) Subsidiary
Note 1:
The initial exchange rate was based on the exchange rate as of December 31, 2018.
(Concluded)
SUNPLUS TECHNOLOGY COMPANY LIMITED
INFORMATION ON INVESTMENTS IN MAINLAND CHINA
FOR THE YEAR ENDED DECEMBER 31, 2018
(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)
Investee Company Name
Main Businesses and Products
Total Amount of
Paid-in Capital
Investment Type
Sunplus Technology
Development of computer software, system
(Shanghai) Co., Ltd.
Sunplus Prof-tek (Shenzhen)
integration services and building rental services
Development of computer software, system
Co., Ltd.
integration services, building rental services and
property management
$
(US$
(US$
528,298
17,200)
990,559
32,250)
Sun Media Technology Co.,
Development of computer software, system
Ltd.
Sunplus App Technology Co.,
Ltd.
integration services and building rental services
Manufacturing and sale of computer software, system
integration services and information management
and education
(US$
(RMB
Ytrip Technology Co., Ltd.
Computer system integration services, supply of
general advertising and other information services
(RMB
Sunplus Technology (Beijing) Development of computer software, system
integration services and building rental services
(RMB
1culture Communication Co.,
System development
Ltd.
(RMB
Xiamen Xm-plus Technology
Development of computer software, system
Ltd.
integration services and building rental services
(RMB
614,300
20,000)
67,080
15,000)
273,910
61,250)
120,744
27,000)
14,534
3,250)
232,544
52,000)
Note 1
Note 1
Note 1
Note 1
Note 1
Note 1
Note 3
Note 1
Accumulated
Outflow of
Investment from
Taiwan as of
January 1, 2018
$
(US$
(US$
542,273
17,665)
990,559
32,250)
(US$
(US$
RMB
(US$
(RMB
614,300
20,000)
62,719
586
10,000)
138,555
4,511)
120,744
27,000)
-
Investment Flows
Outflow
Inflow
$
-
$
-
-
-
-
-
-
-
(US$
39,008
1,270)
Accumulated
Outflow of
Investment from
Taiwan as of
December 31,
2018
$
(US$
(US$
542,273
17,655)
990,559
32,250)
(US$
(US$
RMB
(US$
(RMB
614,300
20,000)
62,719
586
10,000)
138,555
4,511)
120,744
27,000)
-
(US$
39,008
1,270)
-
-
-
-
-
-
-
-
Accumulated Investment in Mainland China as of
December 31, 2018
Investment Amounts Authorized by Investment Commission, MOEA
Limit on Investment
2,508,158
$
( US$ 76,272 and
37,000 )
RMB
$
2,580,950
( US$ 75,002 and
RMB
62,000 )
$
5,079,565
Sunplus Venture Capital Co., Ltd.
Accumulated Investment in Mainland China as of
December 31, 2018
Investment Amounts Authorized by Investment Commission, MOEA
Limit on Investment
$
( US$
38,701
1,260 )
$
( US$
38,701
1,260 )
$
617,140
TABLE 5
% Ownership of
Direct or Indirect
Investment
Net Income
(Loss) of the
investee
Investment Loss
Carrying
Amount as of
December 31,
2018
Accumulated
Inward
Remittance of
Earnings as of
December 31,
2018
-
-
-
-
-
-
-
-
100%
$
39,671
$
39,671
$
432,741
$
100%
(3,070)
(3,070)
817,000
100%
(80,976)
(80,976)
102,178
93%
(23,514)
(21,947)
(53,034)
91%
(25,374)
(21,852)
(1,026)
100%
100%
1,041
1,041
48,076
18
11
19%
(65,610)
(32,089)
112
-
(Continued)
Generalplus Technology Inc. (Nature of Relationship: 1)
Investee
Company Name
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, 2018
Investment Flows
Outflow
Inflow
Accumulated
Outflow of
Investment from
Taiwan as of
December 31,
2018
% Ownership of
Direct or Indirect
Investment
Net Loss of the
investee
Investment Loss
(Note 2)
Carrying
Amount as of
December 31,
2018
Accumulated
Inward
Remittance of
Earnings as of
December 31,
2018
Generalplus Shenzhen
IC product development, after sales service and market
research
$
(US$
574,371
18,700)
Note 1
$
(US$
574,371
18,700)
$
-
$
-
$
(US$
574,371
18,700)
100%
$
14,673
$
14,673
$
475,542
$
-
Accumulated Investment in Mainland China as of
December 31, 2018
Investment Amount Authorized by Investment Commission, MOEA
$
( US$
574,371
18,700 )
$
( US$
574,371
18,700 )
Limit on Investment
$
1,250,480
Note 1:
Indirect investment in a company located in mainland China through 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: The initial exchange rate was based on the exchange rate as of December 31, 2018.
(Concluded)
7.6 Financial Difficulties
Impact to the Company or subsidiaries if any turnover problems: None
155
VIII. Financial Analysis
8.1 Financial Status
8.1.1 Financial Analysis Comparison 2017 vs. 2016
Unit: NT$K
Variation
Year
2017
2018
YoY %
8,465,942
8,966,236
6,638,302
2,052,359
178,521
3,057,802
11,926,984
1,684,729
374,649
2,059,378
8,561,910
2,164,154
196,131
2,557,784
13,479,979
2,190,116
646,578
2,836,694
Increase (Decrease)
(1,923,608)
(111,795)
(17,610)
500,018
(1,552,995)
(505,387)
(271,929)
(777,316)
Item
Current Assets
Property, Plant & Equipment
Intangible Assets
Other Assets
Total Assets
Current Liabilities
Non-Current Liabilities
Total Liabilities
Equity Attributed to Shareholder
of the parent
Capital Stock
Capital Surplus
Retained Earnings
Equity : Others
Treasury Stock
Minor interest
Total Shareholder’s Equities
Remark:
1. The decrease in current assets was mainly due to the decrease in the number of individuals merged into the merger
compared to the 106 years, resulting in a decrease in related current assets.
2. The decrease in current liabilities was mainly due to the decrease in the number of individuals incorporated into the
merger compared to the 106 years.
3. The decrease in non-current liabilities was mainly due to the repayment of long-term borrowings due.
4. The decrease in total liabilities was mainly attributable to the decrease in the number of individuals merged into the
merger and the repayment of long-term borrowings.
5. The decrease in other equity was mainly attributable to the decrease in profit or loss of financial products measured at
fair value through other comprehensive gains and losses.
5,919,949
835,241
2,336,709
(62,262)
(63,401)
1,677,049
10,643,285
5,919,949
801,398
2,250,839
(442,843)
(63,401)
1,401,664
9,867,606
-
(33,843)
(85,870)
(380,581)
-
(275,385)
(775,679)
(500,294)
(22)
(5)
(9)
20
(12)
(23)
(42)
(27)
(6)
-
(4)
(4)
611
-
(16)
(7)
156
8.2 Operational Results
8.2.1 Operation Results Comparison 2017 vs. 2016
Unit: NT$K
Variation
Year
2017
2018
YoY %
293,780
587,470
6,077,733
2,429,384
(89,790)
6,820,237
2,736,766
47,185
Increase (decrease)
(742,504)
(307,382)
(136,975)
Item
Net Sales
Gross Profit
Income (Loss) From Operating
Non-Operating Income
(Expense)
Income (Loss) Before Tax
Income (Loss) From Operations
of Continued Segments
Net Revenue (Loss) for the
period
Other Comprehensive Income
(Loss) for the period
Total Comprehensive Profit
(Loss) for the period
Remarks:
1. Reduced operating profit, mainly due to the decrease in operating income during the year.
2. The decrease in non-operating income and expenses was mainly due to the decrease in the investment interest in
(430,665)
(293,690)
(408,905)
(220,099)
(408,905)
(320,167)
(131,361)
231,061
634,655
551,228
551,228
142,323
203,990
142,323
188,806
10,962
(11)
(11)
(290)
(50)
(68)
(74)
(74)
(59)
(95)
financial assets during the year.
3. Pre-tax profit and loss, net profit of continuing business units and net profit after tax for the period, mainly due to the
decrease in investment interests during the year.
4. The decrease in other comprehensive gains and losses during the period was mainly attributable to the decrease in the
estimated loss of financial assets measured by fair value through other comprehensive gains and losses during the year.
5. The decrease in total comprehensive profit and loss for the current period was mainly due to the decrease in net profit
for the year.
157
8.3 Cash Flow
8.3.1 Cash Flow Analysis
a) Cash Flow Analysis 2018 vs. 2017
Year
2017
2018
YoY %
Item
Cash flow ratio
Cash flow adequacy ratio
Cash flow reinvestment ratio
1. The increase in cash flow ratio was mainly due to the decrease in current liabilities.
2. The decrease in the cash flow rate is mainly due to the decrease in net cash inflows from operating activities
in the last five years.
Note 1: The net cash flow of operating activities is less than the cash dividend payment. It is not listed.
14.37
77.50
Note 1
16.85
56.71
Note 1
17
(27)
-
b) Cash Flow Forecast
Cash Balance,
beginning of the
year (1)
Net Cash Flow
from Operating
Activities
(2)
$3,235,721
1. Analysis of Cash Flow:
643,408
Net Cash in-flow
(3)
Net Cash Balance
(1)+(2)+(3)
Unit: NT$K
Remedial Measure
if cash not enough
Investment
plan
Financial
leverage plan
(717,063)
3,162,066
-
-
(1) From Operating: Cash flow in for predicting making profits in 2019.
(2) From Investing: Cash flow in for purchasing properties, IPs and R&D tools.
(3) From Financing: Cash flow in for expected to repay bank loans and distribute dividends, etc.
2. Remedies and Liquidity Analysis 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.
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.
3.
8.6.2 Internal Policies and Procedure Exist with Respect to High Risk/High Leveraged
Investment, Lending/Endorsements and Guarantees for Other Parties, Financial
Derivatives Transaction
1. There is no high risk/high leveraged investment.
158
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
Sunplus Technology
Generalplus Technology
Sunplus Innovation Technology
iCatch Technology
Sunext Technology
New Products
(1) Vehicle entertainment system chip
(2) Android Platform
(3) Vehicle navigation and driving assistance system platform
(4) High-Speed I/O IP
(5) High performance data conversion IP (ADC/DAC/AFE)
(6) Analog IP
1. Consumer product line
More audio channel / voice and image output higher resolution / support
higher data compression rate / built-in more standard interface (standard
interface) / low operating voltage and low power (low power) of the product.
2. Multimedia product line
Provides high, medium and low order multimedia IC solutions, focusing on
high-speed CPU / DSP performance, high-resolution image compression,
playback and storage technology.
3. MCU product line
Home appliances, handheld devices, PC and other peripheral applications
related to the microcontroller, charging microcontrollers, high-performance
brushless motor microcontrollers and other related products.
(1) Highly-integrated, Multi-function MCU
(2) Highly-integrated, Multi-function Optical Mouse SoC
(3) Total Solutions for Wireless Mouse/Keyboard/Remote Control
(4) USB3.0 Advanced 8Mp NB/Web Cam Controller IC
(5) USB3.0 3D NB/Web Cam Controller IC
(6) USB2.0 Low Power NB Cam Controller IC
(1) H.265 UHD SoC for image processing in high resolution, high
compression, high performance and low power consumption
(2) High Speed JPEG Encoder for the demand of 360 degree view in car
black box and digital surveillance system
(1) Serial-ATA Blu-ray Controller Chipset
(1) Multichannel Motor driver controller
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.
159
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 2017 and 2018 accounted for 16% and 13% 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
160
IX. SPECIAL NOTES
9.1 Affiliates
9.1.1 Affiliated Chart
161
JumplexTechnology0.70%100%9.55%VentureplusHan YuangVentureplus CaymanVentureplus MauritiusSunextGeneralplusMauritiusGeneralplus Shenzhen GeneralplusiCatchWei-Young Generalplus Samoa100%Sunplus Technology CompanySunplus mMobileSunplus InnovationSunplus Management ConsultingSunplus HK Generalplus HKSunplus mMedia100%100%100%100%100%70%100%61.15%5.29%100%3.25%100%5.64%34.30%37.64%61.13%100%100%100%100%3.95%2.09%6.98%13.69%RussellLin Shih1.75%6.05%Sunplus Venture0.10%0.03%Magic SkySunplus Shanghai93.33%Sunplus App Technology Co., Ltd.100%100%SunMedia Technology100%Sunplus Prof-tek (Shenzhen)1culture Communication Co,.Ltd100%Sunplus Technology (Beijing)100%100%72.14%22.86%Sunny Fancy100%Award GlaryGiant KingdomGiant Rock100%100%Ytrip Technology Co. Ltd.14.6%68.8%Xiamen Xm-plus100%
9.1.2 Affiliated Companies
December 31, 2018 Unit: NT$K, unless other specified
Company
Date of
Incorporation
Place of
Registration
Paid-in Capital
Sunplus Technology (HK) Co., Ltd. August 31, 1993 Kowloon, HK
HK$11,075,000 (Note)
Lin Shih Investment Co., Ltd.
Russell Holdings Ltd.
Sunplus Venture Capital Co., Ltd. November 20,
July 2, 1998
March 11, 1998
Hsinchu, Taiwan
Cayman
Hsinchu, Taiwan
700,000
US$24,660,000 (Note)
1,000,000
Business
Activities
International
Trading
Investment
Investment
Investment
Ventureplus Group Inc.
Ventureplus Mauritius Inc.
Ventureplus Cayman Inc.
Shanghai Sunplus Technology Co.,
Ltd.
Sunplus Prof-tek Technology
(Shenzhen) Co., Ltd.
1999
July 27, 2001
August 2, 2001
September 14,
2001
December 7, 2001 Shanghai, China US$17,200,000 (Note) Software
2,526,650
2,526,656
2,526,661
Belize
Mauritius
Cayman
Investment
Investment
Investment
development,
customer technical
services and rental
business
October 22, 2007 Shenzhen, China US$32,250,000 (Note) Software
US$20,000,000 (Note)
development,
customer technical
services and rental
business
IC Sales and After
Service, Software
and System Design
RMB15,000,000 (Note) IC Sales and After
Service, Software
and System Design
Service
RMB3,250,000(Note) Web Service
RMB27,000,000(Note) Software
Sunmedia Technology Co., Ltd.
January 8, 2008
Chengdu, China
Sunplus App Technology Co., Ltd. October 6, 2008
Beijing, China
Ytrip Technology Co., Ltd.
February 18, 2011 Chengdu, China
RMB61,250,000(Note) System and Web
1culture Communication Co., Ltd. February 18, 2013 Chengdu, China
December11, 2013 Beijing
Beijing Sunplus-Ehue Tech Co.,
Ltd.
Magic Sky Limited
Sunext Technology Co., Ltd.
Sunplus Management Consulting
Inc.
WeiYing Investment Co., Ltd.
Generalplus Technology Inc.
Generalplus International (Samoa)
Inc.
Generalplus (Mauritius) Inc.
Samoa
US$10,032,000
development,
customer technical
services and rental
business
Investment
Hsinchu, Taiwan
Hsinchu, Taiwan
635,091
5,000
IC Design
Consulting
September 22,
2010
March 13, 2003
October 2, 2003
February 13, 2004 Hsinchu, Taiwan
Hsinchu, Taiwan
March 30, 2004
Samoa
November 12,
2004
November 25,
2004
March 24, 2005
Mauritius
54,000
1,088,158
US$19,090,000 (Note)
Investment
IC Design
Investment
US$19,090,000 (Note)
Investment
Shenzhen, China US$18,700,000 (Note) Sales Service
Generalplus Technology
(Shenzhen) Inc.
Generalplus Technology (HK) Inc. March 21, 2007
Sunplus mMobile Inc.
Sunplus Innovation Technology
Inc.
Sunplus mMedia Inc.
Jumplux Technology Inc,
Hong Kong
Hsinchu, Taiwan
December 20,
2006
December 14,
2006
April 18, 2007
Hsinchu, Taiwan
October 27,2014 Hsinchu, Taiwan
Hsinchu, Taiwan
US$390,000 (Note)
162,400
Sales Service
IC Design
514,501
250,000
240,000
IC Design
IC Design
Design & Trading
162
Award Glory Ltd.
Sunny Fancy Ltd.
Giant Kingdom Ltd.
Giant Rock Inc.
Note: End of 2018, exchange rate as ref.:
HK$1=NT$3.921
US$1=NT$30.715
RMB$1=NT$4.472
January 04, 2016 Belize
October 29, 2014 Mahe , Republic of
Seychelles
January 21, 2016 Mahé, Seychelles
July 3, 2014
The Mason
Complex, Suites
19 & 20, The
Valley, Anguilla.
62,275 Investment
62,275 Investment
25,157 Investment
37117 Investment
163
9.1.3 Business Scope of Affiliated Companies
Company
Business Activities
Business Relationship
Sunplus Technology (HK) Co., Ltd.
Lin Shih Investment Co., Ltd.
Russell Holdings Ltd.
Sunplus Venture Capital Co., Ltd.
Ventureplus Group Inc.
Ventureplus Mauritius Inc.
Ventureplus Cayman Inc.
Shanghai Sunplus Technology Co., Ltd.
Sunplus Prof-tek Technology (Shenzhen) Co., Ltd.
Sunmedia Technology Co., Ltd.
Sunplus App Technology Co., Ltd.
Ytrip Technology Co., Ltd.
1culture Communication Co., Ltd.
Beijing Sunplus-Ehue Tech Co., Ltd.
Magic Sky Limited
Sunext Technology Co., Ltd.
Sunplus Management Consulting Inc.
WeiYing Investment Co., Ltd.
Generalplus Technology Inc.
Generalplus International (Samoa) Inc.
Generalplus (Mauritius) Inc.
Generalplus Technology (Shenzhen) Inc.
Generalplus Technology (HK) Inc.
Sunplus mMobile Inc.
Sunplus mMobile SAS
Sunplus Innovation Technology Inc.
Sunplus mMedia Inc.
Jumplux Technology Inc.
Award Glory Ltd.
Sunny Fancy Ltd.
Giant Kingdom Ltd.
Giant Rock Inc.
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Trading
Investment
Investment
Investment
Investment
Investment
Investment
Manufacture and Sales Service China branch
China branch
Manufacture, Sales Service and
property management.
Manufacture and Sales Service China branch
Sales and IT Education Service China branch
China branch
System and Web Service
Web Service
N/A
Manufacture and Sales Service China branch
Investment
IC Design
Management Consulting
Investment
IC Design
Investment
Investment
Sales Service
Sales Service
IC Design
IC Design
IC Design
IC Design
Software design7 trading
Investment
Investment
Investment
Investment
N/A
Subsidiary
N/A
N/A
Subsidiary
N/A
N/A
N/A
N/A
Subsidiary
N/A
Subsidiary
Subsidiary
Grandson- Subsidiary
N/A
N/A
N/A
N/A
9.1.4 Directors, Supervisors, and Presidents of Affiliated Companies
Company
Title
Name
Sunplus Technology (HK) Co., Ltd.
Lin Shih Investment Co., Ltd.
Chairman
Director
Sunplus Technology
Chou-Chye Huang (repr.)
Ming-Cheng Hsieh
Sunplus Technology
Chairman & President Chou-Chye Huang (repr.)
Director
Director
Supervisor
Shu-Lan Wang
Yu-Lun Liu
Wayne Shen
Sunplus Technology
Chou-Chye Huang (repr.)
Russell Holdings Ltd.
Director
164
December 31, 2018
Shareholding
Amount
(shares)
*HK$11,075,000
-
-
70,000,000
-
-
-
-
*US$24,060,000
-
Ratio
(%)
100%
-
-
100%
-
-
-
-
100%
-
Sunplus Venture Capital Co., Ltd.
Sunplus Technology
Ventureplus Group Inc.
Ventureplus Mauritius Inc.
Ventureplus Cayman Inc.
Shanghai Sunplus Technology Co.,
Ltd.
Sunplus Prof-tek Technology
(Shenzhen) Co., Ltd.
Sunmedia Technology Co., Ltd.
Sunplus App Technology Co., Ltd.
Ytrip Technology Co., Ltd.
Chairman & President Chou-Chye Huang (repr.)
Director
Director
Supervisor
Shu-Lan Wang
Yu-Lun Liu
Wayne Shen
Sunplus Technology
Director
Director
Director
Chou-Chye Huang (repr.)
Ventureplus Group
Chou-Chye Huang (repr.)
Ventureplus Mauritius
Chou-Chye Huang (repr.)
Ventureplus Cayman
Chairman
Director &President
Chou-Chye Huang (repr.)
Zai-De Wang
Director
Supervisor
Chairman
President
Supervisor
Chairman
President
Supervisor
Chairman
Supervisor
Director
Director
President
Tang-Yi Huang
Shu-Lan Wang
Ventureplus Cayman
Chou-Chye Huang (repr.)
Tang-Yi Huang
Shu-Lan Wang
Ventureplus Cayman
Chou-Chye Huang (repr.)
Cheng-Cai Chang
Shu-Lan Wang
Ventureplus Cayman
Chou-Chye Huang (repr.)
Yu-Lun Liu
Shu-Lan Wang
Ya-Fei Luo
Xi-Chuan Lin
Ventureplus Cayman
Chairman
Director & President Cheng-Cai Chang
Director
Yu-Lun Liu
Chou-Chye Huang (repr.)
1culture Communication Co., Ltd.
Supervisor
Shu-Lan Wang
Ytrip Technology Co., Ltd.
E-Director& President Chen-Tsai Chang
Supervisor
Shao-Ling Chan
165
100%
-
-
-
-
100%
-
100%
-
100%
-
100%
100,000,000
-
-
-
-
RMB37,900,000
&
US74,605,000
(Note1)
RMB37,900,000
&
US74,605,000
(Note1)
RMB37,900,000
&
US74,605,000
(Note1)
US$17,655,000
(Note1)
-
-
-
-
*US$32,250,000
-
100%
-
*US$20,000,000
100%
RMB10,000,000
&
USD586,000
(Note1)
-
-
-
RMB438,000
USD3,750,000
(Note1)
-
-
-
-
*RMB$3,250,000
-
-
93.33%
-
2.92%
38.47%
-
17.5
-
100%
-
*RMB$27,000,000
100%
US$10,032,000
100%
58,050,129 91.40%
-
-
-
-
-
-
-
-
-
1
-
-
650,000
500,000
-
-
-
-
5,400,000
-
-
-
-
-
1.02%
100%
-
-
-
-
100%
-
-
-
-
-
-
37,324,304 34.30%
-
-
0.46%
500,000
1.16%
1,266,752
-
-
-
-
-
-
-
-
-
-
100%
*US$19,090,000
-
-
100%
*US$19,090,000
-
-
(Continued)
Beijing Sunplus-Ehue Tech Co., Ltd.
Magic Sky Limited
Sunext Technology Co., Ltd.
Sunplus Management Consulting Inc.
WeiYing Investment Co., Ltd.
Chairman
Director
Director
Supervisor
Director
Chairman
Director
Director
Supervisor
Supervisor
Chairman
Director
Director
Supervisor
Chairman
Director
Director
Supervisor
Ventureplus Cayman Inc.
Chou-Chye Huang (repr.)
Wayne Shen
Shu-Lan Wang
Yin-Chi Chu
Sunplus Technology
Chou-Chye Huang (repr.)
Sunplus Technology
Chou-Chye Huang (repr.)
Wen-Shiung Jan (repr.)
Sunplus Venture Capital
Technology
Mei-Juan Chen
Wen-Hui Lu
Sunplus Technology
Chou-Chye Huang (repr.)
Shu-Lan Wang
Yu-Lun Liu
Wayne Shen
Sunplus Technology
Chou-Chye Huang (repr.)
Shu-Lan Wang
Yu-Lun Liu
Wayne Shen
Generalplus Technology Inc.
Chairman
Director& VP
Sunplus Technology
Chou-Chye Huang (repr.)
Shi-Rong Wang (Repr.)
Hou-Shien Chu
Shi-Hao Liu
Chia-Ming Chai
Director
Director
Independent Director Nai-Shin Lai
Independent Director
Independent Director
Jing-Min Chen
Generalplus International (Samoa) Inc.
Generalplus (Mauritius) Inc.
Chairman
Chairman
Generalplus Technology
Chou-Chye Huang (repr.)
Generalplus International
(Samoa)
Chou-Chye Huang (repr.)
166
Shareholding
Amount
(shares)
*US$18,700,000
Ratio
(%)
100%
-
*US$390,000
-
100%
-
16,240,000
-
-
-
100%
-
-
31,449,751 61.13%
-
-
-
-
-
-
4.81%
2,476,473
2.09%
1,074,664
1.03%
527,880
-
-
22,440,723 89.76%
-
-
-
-
-
-
2.60%
650,185
55.00%
13,200,000
10,100,000
US$2,042,000
(Note1)
-
US$2,042,000
(Note1)
-
US$772,000
(Note1)
-
US$1,270,000
(Note1)
-
42.08%
100%
(Note1)
-
100%
(Note1)
-
100%
(Note1)
-
100%
(Note1)
Company
Title
Name
Generalplus Technology (Shenzhen)
Inc.
Generalplus Technology (HK) Inc.
Sunplus mMobile Inc.
Sunplus Innovation Technology Inc.
Sunplus mMedia Inc.
Jumplux Technology
Award Glory Ltd.
Chairman
Director
Chairman
Director
Director
Supervisor
Chairman
Director
Director
Director & President
Director
Supervisor
Supervisor
Generalplus International
(Mauritius)
Chou-Chye Huang (repr.)
Generalplus (Mauritius)
Inc.
Yi-Xing Jia (repr.)
Sunplus Technology
Chou-Chye Huang (repr.)
Wayne Shen
Shu-Lan Wang
Yu-Lun Liu
Sunplus Technology
Chou-Chye Huang (repr.)
Shu-Lan Wang (repr.)
Wayne Shen (repr.)
Chih-Hao Kung
Lin-Shih Investment
Chi-Ying Chiu
Wen-Chin Li
Sunplus Technology
Chairman& President Chou-Chye Huang (repr.)
Director
Director
Supervisor
Wayne Shen (repr.)
Shu-Lan Wang (repr.)
Lin-Shih Investment
Sunplus mMedia
Chou-Chye Huang (repr.)
Shu-Lan Wang
Mei-Juan Chen
Sunplus Venture Capital
Sunplus Technology
Chou-Chye Huang (repr.)
Chairman&President
Director
Director
Supervisor
Chairman
Sunny Fancy Ltd.
Chairman
Giant Kingdom Ltd.
Chairman
Giant Rock Inc..
Chairman
Award Glory Ltd.
Chou-Chye Huang (repr.)
Sunny Fancy Ltd.
Chou-Chye Huang (repr.)
Sunny Fancy Ltd.
Chou-Chye Huang (repr.)
*Note: the invested companies are listed the capital paid-in amount of investment
167
9.1.5 Common Shareholders of Sunplus and Its Subsidiaries or Its Affiliates with Actual of
Deemed Control
Not Applicable
9.1.6 Operation Highlights of Sunplus Affiliates
December 31st, 2018
Unit: NT$K, except EPS (NT$)
Company
Capital
Assets
Liabilities Net Worth Net Sales
Operation
Income
Net Income
(After Tax)
Sunplus Technology (HK) Co., Ltd.
Lin Shih Investment Co., Ltd.
Russell Holdings Ltd.
43,425
700,000
757,432
39
792,484
579,088
0
39
1,877 790,607
579,038
50
0
65,325
74
0
63,334
(4,539)
0
63,637
2,035
EPS
(After Tax)
N/A
0.91
N/A
Sunplus Venture Capital Co., Ltd.
Ventureplus Group Inc.
Ventureplus Mauritius Inc.
Ventureplus Cayman Inc.
Shanghai Sunplus Technology Co.,
Ltd.
Sunplus Prof-tek Technology
(Shenzhen) Co., Ltd.
Sunmedia Technology Co., Ltd.
Sunplus App Technology Co., Ltd.
Ytrip Technology Co., Ltd.
1culture Communication Co., Ltd.
Beijing Sunplus-Ehue Tech Co.,
Ltd.
Han-Yuang
Magic Sky Limited
Sunext Technology Co., Ltd.
Sunplus Management Consulting Inc.
WeiYing Investment Co., Ltd.
Generalplus Technology Inc.
Generalplus International (Samoa) Inc.
Generalplus (Mauritius) Inc.
Generalplus Technology (Shenzhen)
Inc.
Generalplus Technology (HK) Inc.
Sunplus mMobile Inc.
Sunplus Innovation Technology Inc.
Sunplus mMedia Inc.
Jumplux Technology Inc.
Award Glory Ltd.
Sunny Fancy Ltd.
Giant Kingdom Ltd.
Giant Rock Inc.
1,000,000
2,526,650
2,526,656
2,526,661
1,028,66
7
1,354,35
1
1,354,33
2
1,354,30
9
1,028,56
7
100
1,354,35
1
0
1,354,33
95,621
43,491
54,913
0 (79,794)
(79,793)
0
2
0
(79,795)
(79,794)
1,354,30
9
0
0
(79,921)
(79,795)
528,298
489,052
56,311
432,741
162,247
36,438
39,671
990,559
836,976
19,976
817,000
141,392
(24,389)
(3,070)
614,300
67,080
273,910
14,534
1,053,92
5
12,269
10,867
132
53,131
120,744
2,544
6,000
308,133
82,747
635,091 200,949
3,910
57,627
5,000
54,000
2,845,03
951,747
69,090
4,156
2
102,178
(56,821)
6,711
130
171,470
66,274
7,414
160
(26,286)
(23,680)
(18,554)
(441)
(80,976)
(23,514)
(25,374)
18
5,056
0
0
17,770
48,075
0
2,544
0
82,747
10,158 190,791 110,154
0
3,910
2,980
56,946
2,844,69
4
14,211
14,211
4
0 480,817
0 480,815
0
681
2,084,13
(4,591)
0
(14,460)
(677)
(65)
2,267
1,041
0
(14,459)
1,808
(41)
2,338
297,274
14,211
14,211
284,345
14,211
14,211
1,088,158
586,349
586,349
480,817
480,815
3 760,899
574,371
11,979
162,400
488,440
7,159
29,905
12,898 475,542
5,253
29,785
1,906
120
96,797
11,042
0
5,239
(544)
(442)
14,673
(462)
(417)
1,149,18
514,501
250,000
240,000
62,275
62,275
25,157
37,117
3 275,861 873,322 863,642
0
17,000
0
0
0
9,151
7,164
37,625
0
0
0
0
31,220
31,772
33,116
33,116
811
32
38,384
69,397
33,116
33,116
811
32
60,760
(57,190)
(72,931)
(7,932)
(7,932)
(3,130)
(4,812)
60,709
(1,647)
(73,126)
(7,932)
(7,932)
(3,121)
(4,812)
Note: The financial information of the above business relationship is prepared using the International Financial Reporting Standards.
168
0.55
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
0.03
(0.08)
0.43
2.61
N/A
N/A
N/A
N/A
(0.03)
1.18
(0.07)
(3.05)
N/A
N/A
N/A
N/A
9.1.7 Consolidated Financial Statement of Sunplus Affiliates
Relationship Statement of Consolidated Financial Statements
The Company's 2018(as of January 1, 2018 to December 31, 2018) 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 20, 2019
331
9.2 Private Placement Securities
Not Applicable
9.3 Status of Sunplus Common Shares/GDRs Acquired, Disposed of, or Held by
Subsidiaries
Company
Capital
Source of
Fund
%
Owned
by
Sunplus
Transaction
Date
Amount of
Acquisition
Amount
of
Disposal
Investment
Income
Unit: NT$K, shares
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
2002.07.02
2003.07.13
2004.08.23
2005.08.23
2006.08.05
2007.03.26
2007.09.05
3,870,196
shares &
$95,605
967,549
shares
Capital
increase
from profits
and capital
surplus
483,774
shares
Capital
increase from
profits and
capital
surplus
532,151
shares
Capital
increase from
profits and
capital
surplus
290,614
shares
Capital
increase from
profits and
capital
surplus
306,132
shares
Capital
increase from
profits and
capital
surplus
-3,220,429
shares
decreased for
capital
reduction &
32,204
160,538
shares
331
-
-
-
-
-
-
None
None
None
None
None
None
-
-
-
None
None
None
-
-
-
None
None
None
-
-
-
2,503,705
shares
Pledged
None
None
-
-
-
500,741
shares
Pledged
None
None
-
-
-
-
-
-
None
None
None
380,000
shares
None
None
Capital
increase from
profits and
capital
surplus
169,471
shares
Capital
increase from
profits and
capital
surplus
2008.09.08
Pledged
-
-
-
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, 2019
334