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Stock Code: 2362
Annual Report Website: http://mops.twse.com.tw/
Company Website: http://www.clevo.com.tw
CLEVO CO.
2018
Annual Report
Publication Date: May 27, 2019
1. Company’s Spokesperson:
Name: Yu, Tien-Jung
Title: Senior Vice President of Management Center
Tel.: 886(2) 2278-9696
Company’s Spokesperson E-mail: [email protected]
Company’s Deputy Spokesperson:
Name: Wu, Mai
Title: Vice President of Finance Division
Tel.: 886(2) 2278-9696
2. Address and Telephone Number of Company’s Headquarters, Branches and Plant
(1) Headquarters:
Add: No. 129, Xingde Rd., Sanchong Dist., New Taipei City 241, Taiwan, R.O.C.
Tel: 886(2) 2278-9696
(2) Branch: (None)
(3) Plant:
Add: No. 200, Second Avenue, Kunshan Comprehensive Bonded Zone, Jiangsu,China
Tel: 886(2) 2278-9696
3. Common Share Transfer Agent And Registrar
Name: Agency Department of Chinatrust Commercial Bank
Add: 5F., No. 83, Sec. 1, Chongqing S. Rd., Zhongzheng Dist., Taipei City 100, Taiwan, R.O.C.
Tel. : 886(2) 6636-5566
Website: http: //ecorp.chinatrust.com.tw/cts/index.jsp
4. Information of the Certified Public Accountants for the Latest Financial Repot
Name of CPA: Feng, Min-Chuan and Wu, Han-Chi CPA
Firm: PwC Taiwan
Add : 27F., No. 333, Sec. 1, Keelung Rd., Songshan Dist., Taipei City 105, Taiwan, R.O.C.
Tel : 886(2) 2729-6666
Website: https: //www.pwc.com/tw
5. Overseas Trade Places for Listed Negotiable Securities
None
6. Corporate Website
http://www.clevo.com.tw
Clevo CO.
Table of Contents
I. Letter to Shareholders .................................................................................................................................... 1
1. 2018 Operation Results ................................................................................................................................ 1
2. 2019 Business Plan Summary ....................................................................................................................... 2
II. Company Profile ............................................................................................................................................ 5
1. Date of Incorporation ..................................................................................................................................... 5
2. Company history and development ............................................................................................................ 5
III. Corporate Governance Report .................................................................................................................. 11
1. Organization System ...................................................................................................................................... 11
2. Information for Directors, Supervisors, Presidents, Vice Presidents, Assistant Vice Presidents, Chiefs
of Each Department and Branches .............................................................................................................. 13
3. Remuneration of Directors, Supervisors, President, and Vice President in the Most Recent Year .... 19
4. Implementation of Corporate Governance ................................................................................................ 26
5. Information about Certification Fees for CPAs ......................................................................................... 69
6. Information about Replacement of CPAs .................................................................................................... 70
7. The Company’s Chairman, General Manager, or any Managerial Officer in Charge of Finance or
Accounting Matters has in the Most Recent Year Held a Position at the Accounting Firm of its CPA
or at an Affiliated Enterprise's Situation .................................................................................................... 71
8. Information about the shares transferred by and changes to the shares pledged by the directors,
supervisors, managers and the shareholders holding more than 10% of shares in the most recent
year and up to the date of publication of the annual report ................................................................ 72
9. Information about the Relationships among Top Ten Shareholders, Such as Related Parties,
Spouses or Relatives within the Second-degree of Kinship .................................................................... 74
10. Investment by Directors, Supervisors, Managers, Groups of Direct or Indirect Control in the
Investment Business, and to Calculate the Combined Shareholding Percentage ................................ 74
IV. Capital overview ......................................................................................................................................... 75
1. Capital and Shares ........................................................................................................................................ 75
2. Information on Corporate Bonds .................................................................................................................. 83
3. Information on Preferred Shares.................................................................................................................. 84
4. Information on Overseas Depository Receipts .......................................................................................... 84
5. Information on Employee Stock Options and Restricted Stocks ............................................................. 84
6. Status of New Share Issuance in Connection with Mergers and Acquisitions or Transferred
Company Shares ............................................................................................................................................. 84
7. The implementation of the fund utilization plan ........................................................................................ 84
V. Operational Highlights ................................................................................................................................ 85
1. Business Overview ........................................................................................................................................... 85
2. Overview of the Market and Production and Sales................................................................................. 94
3. Information on Employees .......................................................................................................................... 102
4. Environmental Protection Spending ........................................................................................................... 102
5. Labor Relations .............................................................................................................................................. 103
6. Important Contracts ...................................................................................................................................... 105
VI. Financial Highlights .................................................................................................................................. 106
1. Concise Balance Sheet, Statement of Comprehensive Income of the Recent 5 Years ..................... 106
2. Financial Analysis of the Recent 5 Years .................................................................................................. 110
3. The Audit Committee Audit Report in the Financial Report in 2018 ................................................... 113
4. 2018 Consolidated Financial Statements with Subsidiaries Audited by the CPA ............................ 114
5. 2018 Individual Financial Statements Audited by the CPA .................................................................. 114
6. Whether Financial Difficulty of the Company and Affiliated Enterprises Occurred, and the
Impact on the Company's Financial Position for the Most Recent Year and up to the Date of
Publication of the Annual Report ................................................................................................................ 114
VII. Review and Analysis of FinancialPosition, Performance and Risks .......................................... 115
1. Analysis of Financial Position ...................................................................................................................... 115
2. Analysis of Financial performance ............................................................................................................. 116
3. Analysis of Cash flows ................................................................................................................................. 117
4. Effect of Major Capital Expenditures in the most recent year on Financial Operations ................. 118
5. Investment Policy, Main Causes for Profits or Losses, Improvement Plans and the Investment Plans
for the Coming Year .................................................................................................................................... 118
6. Analysis and Assessment of Risk Issues ...................................................................................................... 119
7. Other significant matters ............................................................................................................................. 122
VIII. Additional Information .......................................................................................................................... 123
1. Summary of Affiliated Companies ............................................................................................................ 123
2. Private Placement of Securities in the most recent year and up to the Date of Publication of the
Annual Report ................................................................................................................................................ 146
3. The Shares in the Company Held or Disposed by Subsidiaries in the most recent year and up to
the Date of Publication of the Annual Report .......................................................................................... 147
4. Other Supplementary Information ............................................................................................................. 147
IX.Matters According to Article 36.3.2 of the Securities and Exchange Act of Taiwan in the Most
Recent Year and up to the Date of Printing of this Annual ReportWhich Have Significant
Impact on the Shareholders’ Equity or Stock Price .............................................................................. 147
Annexes .............................................................................................................................................................. 148
1. 2018 Consolidated Financial Statements ................................................................................................. 148
2. 2018 Individual Financial Statements ........................................................................................................ 332
I. Letter to Shareholders
Dear Shareholders:
I. 2018 Operation Results
(I) Results of the implementation of operation plan for 2018
Notebook Business Group
In 2018, the global economy was affected by the wave of America First andprotectionism launched by US President Trump. The trade war between the United States and China began. Due to 4 rises of interest rates by the FED, the tight circulation of the US dollar, and the sharp fluctuation of oil prices, the emerging market currencies rapidly depreciated, which seriously attacked the emerging market economy. According to the International Monetary Fund (IMF), the growth rate of the global economy in 2018 changed from stable to 3.7%, the same as that in 2017. In the global notebook market, due to shortages and rising prices of DRAM, VRAM, SSD, MLCC, and CPUs, the costs of materials increased and the number of orders reduced. In 2018, the global sales volume of notebooks was 163 million, decreasing by 0.5% annually. Our company's annual sales volume of notebooks was 1.282 million, increasing by 0.8% annually. The turnover was NTD14.56 billion, increasing by 3% annually. Benefiting from the optimization of sales product mix, the proportion of electronic sports computers and new products increased, and the annual increase of ASP was 4.3% annually. Due to proper control of material costs and general costs, the business profit rate of the notebook business was 3.2%, increasing by 155% for the year. There is an opportunity to rebound.
China Distribution Business Group
At present, Buynow Mall has become the only scientific and technologicalintelligent plaza in the local market.
Since the impact of e-commerce in 2013, Buynow Shopping Mall of ChinaDistribution Business Group positively transformed in the past years. In addition to the original IT income, catering income, electronic sports income, Lezhi Intelligent Mall and coffee operation income are added. The intelligent malls of science and technology are diversified and rich. From the original 25 stores to 19 stores after consolidation, it is the only "Intelligent Plaza of Science and Technology" in the local market. It aims to develop into a shopping mall of "science and technology, intelligence, life and fashion". Comparing 19 stores in the same period, the revenue was CNY670 million, increasing by 1% YoY. EBITDA was CNY322 million, increasing by 2% YoY. The operation of shopping malls has seen a steady rebound.
Continuous asset activation, continuous increase of cash flow
The operating benefits of China's asset projects are continuously calculated, the operating benefits and opportunity costs of different stores are prudently evaluated, and transformation and improvement are continuously made, so as to maximize the interests of the group. Buynow Wuhan Store was sold in 2018. Our company recovered its investment real estate funds, cash flowed in, debt reduced and interest was saved. After the store was merged into Part 2 of Wuhan Store of CHICONY Square, the growth rate of revenue of Qunbai Wuhan Store increased from 7% to 10.8%, and the revenue reached CNY2.88 billion, which was the best for the overall operating benefit of the group in the future.
The total revenue of China Distribution Business Group in 2018 was NTD5.233 billion (the revenue from selling buildings was NTD920 million), which was lower than NTD6.745 billion (the revenue from selling buildings was NTD2.263 billion) last year. Due to the factors of closing stores and selling in the same period, as mentioned above, the operation performance of 19 stores in the same period had been improved.
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(II) Financial analysis
In 2018, the combined revenue of the group was NTD19.796 billion, decreasing by 5%. The gross operating profit was NTD5.28 billion, and the gross interest rate was 27%, increasing by 11% annually. The operating profit was NTD1.467 billion, and the profit rate was 7%, increasing by 113%. The net profit before tax was NTD2.356 billion, and the current net profit was NTD1.456 billion, increasing by 102%, and the earnings per share was NTD2.32, increasing by 107% from last year per share of NTD1.12.
(III) Review of research and development
In 2018, Our Company continuously developed a number of types of computers to meet the needs of customers, and has mass-produced and developed 78 series of big computers. Among them, the dark blue and light blue series of big computers accounted for 54% of the sales volume, the revenue accounted for 70%, and the marginal contribution profit accounted for 73%, which was the main source of Our Company's profit from notebooks. This year, Our Company's computers were sent to NotebookCheck.net, a world-renowned professional evaluation media organization in Europe, for evaluation. The tests and comments were made on 12 items. Several kinds of computers became TOP10 in the evaluation. In this period, the dark blue models P775TM1-G, PB50ED-G, PA7ES-G, P960EP6 and P950EP6 were unique and expensive. The differentiated and customized products allow customers to enjoy honors. Our company has more than 100 customer groups. In response to customized product demands, Our Company has highly satisfied customer needs in product research and development speed, mass production quality of factory and delivery speed. Over the years, it has established supply chains with hundreds of large and small distributors around the world. This is a production and marketing strategy that cannot be provided by ordinary OEM factories. It is also a way for CLEVO Notebook Business Group to join hands with customers to create win-win business.
II. 2019 Business Plan Summary
(I)Operating policies, expected sales quantity, and its basis, and important productionand marketing policies
Notebook Business Group
According to data from MIC, a research organization, in 2018, global brandmanufacturers of notebooks faced the pressure of shortage and price increases of key components, which restrained the overall sales momentum. In 2019, INTEL will shift the focus of CPU supply to 14nm. The forecast sales volume of notebooks in 2019 will increase slightly to 164 million, increasing by 0.3% annually. Our company's operating target is to focus both on sales volume and profit. The target of sales volume is 1.52 million. Compared with 1.28 million in 2018, the target of sales volume will increase by 240,000, with an average monthly increase of 20,000.
This year, the sales volume in the American region will increase by 7,000 per month. We expect to increase the proportion of sales volume in America region from 9% to 13%, and increase the YoY decrease of sales volume last year. According to the demands of new customers in China, the proportion of 37% will increase by 6%. The Asia-Pacific region and European region will achieve this year's sales target if they keep steady and upward.
In response to the differentiated needs of customers in different regions, this year Our Company is also fully engaged in the power of products. CLEVO launched
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a series of 15.6-inch, 16.1-inch, and 17.3-inch narrow-frame computers this year, together with a series of computers with the ninth generation of INTEL processor one after another. It is estimated that the average unit price of products will further increase driven by the new series of products and new platform products. Q1 of this year is a traditional off-season. Due to the continuous shortage of CPUs, the sales volume of notebooks of Our Company was 300,000 in Q1, and the revenue was NTD3.36 billion, decreasing by 8.7% annually. In Q2, more computer replacement demands can be attracted with the easing of the CPU shortage and the arrival of the new generation of GeForce RTX, GTX, and mid-level video cards. Especially the sales volume in the electronic sports industry was 8.5 million in 2018. It is expected to reach 9.8 million in 2019, increasing by 15% annually. With the peak season demands and the forthcoming launch of new models, the benefits and prices of CLEVO Notebook Blue Sea Market increased steadily.
China Distribution Business Group
China's GDP growth rate in 2018 was 6.6%, in which consumption was thedriving force of economic growth. The contribution of final consumption expenditure to GDP growth was 76.2%. From the perspective of demand structure, consumption and investment both supported China's economic development. In March, Chinese Premier Keqiang Li proposed to reduce the tax burden on enterprises and social security contribution by NTD9 trillion and increase the tax reduction by 50% compared with last year. He said that the GDP growth target for 2019 was 6% to 6.5%. He also announced that the current tax rate of 16% for the manufacturing industry and other industries would be reduced to 13%, and the current tax rate of 10% for transportation industry, construction industry, and other industries would be reduced to 9%. He adopted measures to improve production and livelihood. Supporting measures such as increasing tax credits in production and life service industries will ensure that tax burdens in all industries will only be reduced but not increased. This year, the scale of the fiscal policy of tax reduction and fee reduction in China will help SMEs revive their business vitality, stimulate consumption, and stabilize the economy, so as to mitigate the economic impact of the Sino-US trade war.
In recent years, Buynow has been continuously adjusting its business structure, actively creating an innovative shopping mall environment and atmosphere, emphasizing the supply of content and services, increasing entertainment and catering industries, combining with e-commerce businesses, integrating online and offline business, and being engaged in the new retail market. In 2018, China's online retail sales reached CNY9.0 trillion, increasing by 23.9% annually. After years of innovation and change, this year 19 Buynow Science and Technology Intelligent Plazas turned around gorgeously to increase revenue and interests, so as to closely keep pace with the rapid growth of China's service consumption.
(II)Influence of the Company’s development strategy by external competitiveenvironment, regulatory environment, and overall operating environment in thefuture
Because China has upgraded "Internet+" to the national strategic action plan, people's food, clothing, housing, transportation, child raising, and entertainment have basically been Internet-based, leading to the rapid development of various APP software development and intelligent product research and development. Therefore, the demands for intelligent technology distribution are increasing. At present, there are about 500 brands and nearly 7000 commodities in Lezhi Science and Technology Intelligence Exhibition Hall of Buynow, which is the most professional and largest entity
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distributor in the field of intelligent science and technology and Internet of Things in China. The shopping mall contains seven categories of commodities: high and new technology, smart clothing, video and audio, intelligent life, creative digital products, electronic sports notebooks and peripheral industries and intelligent toys. In the future, it will continue to work in this direction, make products more refined, and become the best connecting platform between smart technology and consumers.
Looking forward to the future, with the completion of construction projects, accounting of sales volume of office buildings each quarter, accelerated activation of assets, optimization of recovered funds, improvement of financial structure, and active adjustment of operating strategies, profits will steadily increase, and the group's finance will be better. RMB is continuously and stably upward with the development of China's economy, and has gone through three years of depreciation. Morgan Stanley pointed out that this year RMB had a good start. It is expected that the exchange rate of RMB to US dollars will continue to increase, and the trend of RMB will be noticeable. Morgan Stanley stated that it was optimistic about the RMB at present, with the target of 6.55 in 2019 and 6.3 in 2020. The RMB began to rise slowly, which was good for the group. The Company’s total assets continuously increased. At the same time, it also led to the recovery of shareholders' rights and interests. At present, shareholders' rights and interests per share have reached CNY68. With the process of asset activation, the accumulated corporate value of these long-term efforts will be returned to long-term supportive shareholders in the future.
At the same time, all employees of CLEVO Group will work harder for the growth and prosperity of Our Company, create better profits for Our Company, share with shareholders, benefit mankind and give back to society. Finally, I wish you
good health
and all the best.
Chairman: Hsu, Kun-Tai
General Manager: Tsai, Ming-Hsien Chief Accounting Officer: Yu, Tien-Jung
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II. Company Profile I. Date of Incorporation: October 4, 1983 II. Company History
1983 . The Company was founded and named as Clevo Computer Ltd., that was located at Section 3, Zhongxiao East
Road.It was engaged in the business of computer's power converter and keyboard.And its approved capital and paid-in capital was NT$1,000,000.
1984 . The approved and paid-in capital was increased to NT$5,000,000 and the Company was moved to Section 5,
Nanjing East Road.
1985 . Moved to No.17, Yongji Road, Taipei City
1986 . Established the keyboard business division, and built up keyboard factory at Yongji Road.Annual sales increased
greatly to NT$101,313,069.
. Completed the development of large-scale IBM compatible XT/AT keyboard, and mass-produced for sales.
1987 . The approved and paid-in capital was increased to NT$35,000,000, and the company type was changed from
limited company to incorporated company.Annual sales was NT$274,352,582.
. Successfully developed small-scale IBM compatible XT/AT keyboard, and mass-produced for sales.
1988 . The approved and paid-in capital was increased to NT$70,000,000.
. Led in the industry to complete the development and design of 286 laptop.
1989 . Established the personal computer business division, and built up personal computer factory in Xizhi.
. Keyboard factory was moved from Yongji Road to Xizhi.
. Established president office and general administration office.
. Annal sales increased greatly to NT$657,836,467.
. Successfully developed keyboard for the use of laptop.
. Led in the industry to complete the design of VGA laptop.
. Took the lead in completing the mass-production of VGA laptop, and successfully developed 386SX laptop.
1990 . The approved and paid-in capital was increased to NT$198,000,000.
. Officially invested in Malaysia Clevo Computer Private Service Ltd.with 100% of shareholding to build up
overseas production base for keyboard.
. Personal computer factory was moved from Xizhi to Wugu, and expanded the production capacity for portable
personal computer.
. Annual sales increased greatly to NT$1,751,257,424.
. Developed the first 386DX laptop in domestic industry.
. Led in the domestic industry to complete the first 286 and 386SX of notebook's development and design, and it
was the first domestic manufacturer to pass the FCC's accreditation.
1991 . Established the Clevo Computer U.S.Co., Ltd.in the U.S. and the European office in Germany respectively in
order to build up complete sales network in overseas market.
. For the long-term demand of sound development, the Company purchased the lands to build up factory and office
building at home.
. Annual sales increased to NT$1,888,874,127.
. First manufacturer in the domestic industry to complete 386DX of notebook's design and passed the FCC's
accreditation.
. First manufacturer in the domestic industry to complete 486DX of notebook's design and passed the FCC's
accreditation.
1992 . The Securities Management Commission of Ministry of Finance approved the Company's stock public offering.
. The approved and paid-in capital was increased to 42,000,000 shares and NT$420,000,000.
. Annual sales increased to NT$3,303,410,169.
. Reinvested in the Zhengda Technology Co., Ltd. to mainly produce the monitor.
. In order to build up complete sales network in overseas market, the European office in Germany established the
German Clevo Ltd..
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. The export sales' growth in Europe was ranked the third for the Awards of Excellent Trading Businesses.
1993 . The approved and paid-in capital was increased to 54,600,000 shares and NT$546,000,000.
. 486DX-2 series of color notebook was mass-produced and passed the FCC's accreditation.
. Reinvested in domestics trade-type of subsidiary with the name of Kapok Computer Co., Ltd. who was the second
brand and mainly focused on professional marketing company to expand the market share.
. Established the U.K.Clevo Ltd.in U.K. in order to build up complete sales network in overseas market.
. Researched/developed the PENTIUM 80586 series of color notebook and conducted the pilot production
. Clevo building was completed at the end of the year at No.35, Wugong 6th Rd., Wugu Industrial Park and
started to officially launch in order to increase production volume and efficiency.
1994 . The approved and paid-in capital was increased to 68,250,000 shares and NT$682,500,000.
. 586 series of color notebook was mass-produced and passed the FCC's accreditation.
. Established the France Clevo Ltd.in France in order to build up complete sales network in overseas market.
. Passed the certification of ISO-9002 international quality.
. Annual sales increased to NT$ 5,973,247,006.
1995 . The paid-in capital was increased to 81,900,000 shares and NT$819,000,000.
. The stock was approved to be traded in the Securities Brokerage.
. Research/developed 586 high-end multimedia notebook and mass-produced.
1996 . The paid-in capital was increased to 99,918,000 shares and NT$999,180,000.
. The stock was publicly traded at OTC on March 4.
1997 . The stock was listed and traded in Taiwan Stock Exchange on April 2.
. The approved capital was increased to 500,000,000 shares and NT$5,000,000,000.
. Conducted the capital increased by cash to issue 27,228 thousand shares of new stock. Each share had a
premium of NT$76.Total raised fund was NT$2,069,328,000.
. The paid-in capital was NT$2,500,000,000.
. Spent NT$700 million to purchase the original Makro's land for building the Clevo second phase of factory in Wu-
gu.
1998 . Passed the certification of ISO-9001 international quality and strictly ask for the product's quality starting from
research and development.
. Handled the increase of capital from the earnings and the capital surplus; each share was distributed by NT$2
from earnings and NT$2 from surplus; the paid-in capital was NT$3,570,000,000.
. In June, the Clevo Computer Singapore Pte Ltd.was established to engage in the business of consultant relating to computer; through this company, the Clevo reinvested in the establishment of the Clevo (Sichuan) Computer Ltd.and the Clevo Computer (Beijing) Ltd., that were engaged in production and sales of computer related industries in China.
. In August, established the Clevo Investment Co., Ltd.with the capital of NT$190,000,000.
. In October, the Sanchong factory was constructed completely and officially launched.
1999 . In January, Vice President, Tsai, Ming-Hsien, was promoted as President.
. In February, the headquarter was transferred from Wugu factory to Sanchong factory.
. In July, the earnings and the capital surplus were transferred to increase capital; each share was distributed by
NT$0.5 from earnings and NT$0.5 from surplus; the paid-in capital was NT$3,942,700,000.
. In September, reinvested in the establishment of the Clevo (Nanking) Computer Ltd. through Clevo Computer
Singapore Pte Ltd.
. In December, invested in Xubang Venture Capital Co., Ltd.with NT$50,000,000.
. Developed the 5101 largest-scale of 3-SPINDLE notebook in the world.
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2000 . In February, invested in Avita Corporation with NT$80,700,000.
. In March, all employees in Wugu factory were moved to Sanchong factory.
. In April, the sales volume of notebook broke through 50,000 units to reach 50,106 units.
. In April, the Wugu factory was leased to the Desheng Enterprise Co., Ltd.
2000 . In May, invested in Taiwan Fixed Network Co., Ltd.with NT$400,000,000.
. In September, handled the increase of capital from the capital surplus; each share was distributed by NT$1 from
surplus; the paid-in capital was NT$4,336,970,000.
. In September, invested in Chicony Software Inc. with US$1,500,000.
2001 . In September, established the Clevo (Cayman Islands) Holding Company; through this company, the Clevo
reinvested in the establishment of the Buynow Electronic Information (Wuhan) Ltd.
. In October, established the Kapok Computer (Samoa) Corporation; through this company, the Clevo reinvested in
the establishment of the Kapok Computer (Kunshan) Ltd.that was engaged in production and sales of the computer related industries in China.
. In October, the Buynow Plaza of the Clevo (Nanking) Computer Ltd.was inaugurated.
. Successfully developed the first 8880 model in support of P4 WILLAMETTE 2G CPU and 5 SPINDLE in the world.
2002 . In January, increased capital to the Chicony Software Inc. with US$1,500,000.The accumulated investment to this
company reached to US$3,000,000 and accounted for 50% of its shareholding.
. In January, invested in the establishment of the First Choice Logistics Limited with US$1,000,000, that was engaged
in the trading of computer and its peripherals.
. In July, handled the increase of capital. The original shareholders were distributed by NT$0.5 per share from
surplus and NT$0.5 per share from earnings.The paid-in capital was NT$4,819,757,000.
. In Septemer, invested in the establishment of the Buynow Electronic Information (Hangzhou) Ltd. with
US$2,000,000.
2003 . In March, increased capital to the Buynow Electronic Information (Hangzhou) Ltd. with US$3,000,000.
. In March, invested in the Shanghai Buynow Electronic Information Ltd.with US$1,500,000.
. In March, sold out the Avita Corporation to Chicony Power.
. In July, sold out the Wugu factory to the Prodisc Technology Inc.
. In August, handled the increase of capital. The original shareholders were distributed by NT$0.3 per share from
surplus.The paid-in capital was NT$4,982,093,010.
. In September, the Jinan Store of the Buynow Plaza was inaugurated.
. In October, the Kunshan factory completed the assembly production line and began to mass-produce the machinery
and ship out.
. In December, the whole building of the factory located at Wuquan Road, Wugu Industrial Park was leased to the
HANNspree Co., Ltd. with monthly rental of NT$6,384,000.
2004 . In July, the Changsha Store of the Buynow Plaza was inaugurated.
. In July, handled the increase of capital. The original shareholders were distributed by NT$0.5 per share of cash
dividend and NT$0.5 per share of stock dividend (NT$0.2 from earnings and NT$0.3 from capital surplus).After capital increased, the paid-in capital was NT$5,296,950,000.
. In September, the Zhengzhou Store of the Buynow Plaza was inaugurated.
. In December, the Tianjin Store of the Buynow Plaza was inaugurated.
2005 . In January, the Hefei Store of the Buynow Plaza was inaugurated.
. In January, the Clevo M38EW multimedia luxury video/audio series models of notebook was honored the 13th term
of Taiwan Excellence Awards.
. In March, the Kapok Computer (Samoa) Corporation finished the contract's signature for US$30,000,000 of the
bank syndicated loan program with five year of term.
. In June, the Hangzhou Store of the Buynow Plaza was inaugurated.
. In August, handled the increase of capital. The original shareholders were distributed by NT$0.5 per share of cash
dividend and NT$0.5 per share of stock dividend (NT$0.3 from earnings and NT$0.2 from capital surplus).After capital increased, the paid-in capital was NT$5,582,273 thousand.
. In August, the Sanchong factory's production line was transferred to the Kunshan factory.
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2006 . In March, the outbound volume of the Kapok Computer (Kunshan) Ltd. reached new high record to 60,063 units on
a single month since transfer of factory. Its production efficiency was gradually enhanced.
. In July, the Guangzhou Store of the Buynow Plaza was inaugurated. Its measurements was 38,539.89 square
meters which was the biggest Buynow plaza at the moment. 2007 . In March, the Changchun Store of the Buynow Plaza was inaugurated. It was the tenth store.
. In April, the outbound volume of the Kapok Computer (Kunshan) Ltd.reached a new high record to 80,000 units on
a single month.Its production efficiency was greatly enhanced.
2007 . In April, sold out 28,000,000 shares of the Taiwan Fixed Network Co., Ltd.'s shareholding.After selling out, the
shareholding was zero.
. In June, the outbound volume of the Kapok Computer (Kunshan) Ltd.reached new high record to 100,000 units on
a single month.
. In August, handled the increase of capital. The original shareholders were distributed by NT$0.4 of stock dividend
per share (NT$0.2 from earnings and NT$0.2 from capital surplus).After capital increased, the paid-in capital was NT$5,825,204 thousands.
. In September, the Shanghai (Pudong) Store of the Buynow Plaza was inaugurated.It was the eleventh store. . In November, the sales amount of notebook reached to new high record of NT$1.5 billion. . In December, the Xi'an Store of the Buynow Plaza was inaugurated.It was the twelfth store. 2008 . In March, the Harbin Store of the Buynow Plaza was inaugurated.It was the thirteenth store.
. In March, the flow of people for the Buynow Plaza's Guangzhou Store broke through 100,000 person-time on a
single day.The total flow of people for the Buynow Plaza's 13 stores broke through 500,000 person-time that set a new high record.
. In June, the Xiamen Store of the Buynow Plaza was inaugurated. It was the fourteenth store.
. In August, handled the increase of capital. The original shareholders were distributed NT$0.5 of stock dividend
per share and NT$0.5 of cash dividend per share.After capital increased, the paid-in capital was increased to NT$6,246,000 thousand.
. In September, the sales amount of notebook reached a new high record of NT$1.76 billion. 2009 . In January, the Wuxi Store of the Buynow Plaza was inaugurated.It was the fifteenth store. . In April, the Beijing Store of the Buynow Plaza was inaugurated.It was the sixteenth store.
. In July, handled the increase of capital. The original shareholders were distributed by NT$0.5043 of stock
dividend per share. After capital increased, the paid-in capital was NT$6,556,000 thousand.
. In August, the Xuhui Store of the Buynow Plaza was inaugurated.It was the seventeenth store. . In September, the Qingdao Store of the Buynow Plaza was inaugurated. It was the eighteenth store. 2010 . In February, the Changhzhou Store of the Buynow Plaza was inaugurated. It was the nineteenth store.
. In April, the Chongqing Store of the Buynow Plaza was inaugurated.It was the twentieth store.
. In June, handled the cancellation of treasury shares to reduce the capital.After reduction of capital, the paid-in
capital was NT$6,384,670 thousand. . In July, the original shareholders were distributed by NT$1.5 of cash dividend per share. . In October, the Chengdu Store in the Chicony Plaza Department Store was officially inaugurated. . In December, the Daqing Store of the Buynow Plaza was inaugurated.It was the twenty-first store. . In October, obtained the land in Shantou. 2011 . In February, obtained the land used for Buynow in Yancheng.
. In April, the Taiwan Excellence Pavilion was inaugurated in Buynow. . In June, the Zibo Store of the Buynow Plaza was inaugurated.
. In June, obtained land in Yingkou and Anshan. . In June, the Buynow's headquarter was transferred to the Hongwell Building in Shanghai.
. In July, the original shareholders were distributed by NT$1 of cash dividend per share. . In August, obtained the land in Guiyang. . In November, obtained the real estate in Taizhou.
2012
. In January, signed the letter of intent for industry-academia collaboration with Taipei University of Technology. . In July, the original shareholders were distributed by NT$1.5 of cash dividend per share. . In July, obtained land used for Buynow in the Dezhou. . In September, obtained land used for Buynow in the Louyang. . In November, the Company's board of director resolved the capital increased by cash in 2012; every share was
issued at a price of NT$ 32; and this program was declared to the Financial Supervisory Commission in this month with the Letter November 20 2012 No.1020048919 to take effect on record. The increase of capital by cash issued 62,500,000 shares with the total amount of NT$2 billion that was fully received on December 26, 2012.
. In December, the Taizhou Store of the Buynow Plaza was inaugurated.
-8-
2013
‧ In January, handled the increase of capital by cash to the Ministry of Economic Affairs for the issuance of 62,500,000 shares. After capital increased, the capital was NT$7,009,670,000.
‧ In January, disposed the Company's factory located at the Wugu Industrial Park and the disposed price was NT$2.67 billion.
‧ In March, obtained the land used for Buynow in Quanzhou. ‧ In July, the original shareholders were distributed by NT$2 of cash dividend per share. ‧ In August, obtained the land used for Buynow in Jinzhou. ‧ In December, cancelled 11,804,000 shares of the treasury shares to reduce the capital. After change, the capital
was NT$6,891,630,000.
2014
‧ In March, obtained the land No. 850, 851 and 852, Dingkan Section, Sanchong District, New Taipei City. ‧ In May, cancelled 6,000,000 shares of the treasury shares to reduce the capital. After change, the capital was
NT$6,831,630,000. ‧ In June, completed the Clevo's syndicated loan program of NT$6 billion with five year of term. ‧ In June, the chairperson, Hsu, Kun-Tai was awarded the honorary doctorate of the Engineering Institute, Taipei
University of Technology. ‧ In July, the original shareholders were distributed NT$3.15 of cash dividend per share. ‧ In November, obtained three property buildings in Tokyo, Japan. The total measurements was 4,000 pings. ‧ The Wuhan Store of the Buynow Plaza was officially opened on October 18, 2014. ‧ The Suzhou Store of the Buynow Plaza was officially opened on November 22, 2014.
2015
‧ In March, according to evaluation and testing from the European Notebook Check.Net on the category of Lightweight Goming and Workstation, the Clevo's notebooks, P651SG and P750ZM, were dazzlingly ascended to the top one respectively; it was in the lead of other global brands of machine.
‧ In April, the Company was evaluated as A-grade in the 12th term of the Information Disclosure Evaluation for TWSE/TPEX Listed Companies.
‧ In May, completed the five-year term of the syndicated loan program for Clevo (Cayman Islands) Holding Company with US$120 million.
‧ In July, the original shareholders were distributed by NT$2.5 of cash dividend per share. ‧ In July, the resolution of the board of director passed to issue the Company's first secured ordinary corporate
bond in 2015 with NT$5 billion. This program was declared to the Financial Supervisory Commission on August 12, 2015 with the letter No. 1040030770 to take effect on record; and the fund was raised completely on August 28, 2015; the predetermined programs for fund application were all finished on September 30, 2015.
‧ In August, the board of director passed the program for the first buy-back the Company's shares in 2015 to transfer to the employees; it bought back a total of 3,400 shares on October 12 with the average price of NT$32.75 per share.
‧ In November, terminated the assignment agreement for the right-of-use land of the national construction with the National Land Resources Bureau in Yancheng City to end the land development project in the Yancheng.
‧ In December, the board of director passed the program for the second buy-back the Company's shares with 10,000 shares in 2015 to transfer to the employees.
2016
‧ In February, finished the treasury shares' buy-back with 10,000 shares; the average buy-back price was NT$31.22.
‧ In April, according to the announcement of the Harvard Business Review for the investigation of top 50 Taiwanese CEO in 2016, Hsu, Kun-Tai, the chairperson of the affiliate, the Chicony Electronics (2385), was selected as one of top 50 to be ranked 24th in the overall ranking; furthermore, he was ranked the top one in the ranking of the electronics components.
‧ In May, the Hyatt Place Luoyang was officially inaugurated. ‧ In May, disposed the Company's land No. 848, 850, 851 and 85, Dingkan Section, Sanchong District, New Taipei
City. ‧ In July, the original shareholder was distributed by NT$1.1 of cash dividend per share. ‧ On July 16, the Chengdu Grand Hyatt in the Chicony Plaza Department Store was officially inaugurated. ‧ In October, the Xuhui Store in Shanghai was re-opened and upgraded as the first technological and intelligent
plaza in China to render the consumers more comprehensive services.
2017
‧ In July, the original shareholders were distributed by NT$0.7 of cash dividend per share. ‧ In August, completed the first issuance of 2016 CSR Report. ‧ On November 11, the Xi'an Store of the Chicony Plaza Department Store was officially inaugurated. ‧ In December, the board of director passed to dispose the Wuhan Store of the Buynow Plaza to the Chicony Plaza
Department Store in order to enhance the group's overall business performance. After disposing, the Company still held 30% of the shareholding indirectly.
-9-
2018
‧ In February, the board of director passed the program of the first buy-back the Company's shares in 2018 totransfer to the employees. It bought back a total of 10,000 shares on April 8 with the average price ofNT$29.42.
‧ In March, the shareholding and the management power of the Buynow Plaza's Wuhan Store were handed over tothe Chicony Plaza Department Store.
‧ For the 4th term of the corporate governance evaluation, the Company made a leap from 6th range to the first 3range by the well improvement of performance.
‧ In April, the board of director passed the program of the second buy-back the Company's shares in 2018 totransfer to the employee. It bought back a total of 10,000 shares on June 8 with the average price of NT$31.38.
‧ In July, the capital surplus was distributed to the original shareholders by NT$0.8 of cash dividend per share.‧ In October, cancelled 3,400 shares of treasury stock to reduce capital. After change, the capital was
NT$6,797,630,000.‧ In November, the board of director passed the program of the third buy-back the Company's 10,000 shares in
2018 to transfer to the employee.‧ In October, the Dezhou Store of the Chicony Plaza Department Store was officially inaugurated.‧ In December, the Shantou Store of the Chicony Plaza Department Store was officially inaugurated.
2019
‧ For the program of the third buy-back the Company's shares in 2018 to transfer to the employee, it bought backa total of 7,500 shares on January 14 with the average price of NT$30.08.
‧ In February, cancelled 10,000 shares of the treasury stock to reduce the capital. After change, the capital wasNT$6,697,630,000.
‧ Kept in the third range for the 5th term of the corporate governance evaluation.
-10-
III. Corporate Governance Report I. Organization System
(I) Organization Structure Date Prepared: April 30, 2019
Remuneration
Committee
CLEVO CO.
Organization chart
Research and Development Center
Vice President
Wen‐Bin Zheng
Management CenterSenior Vice President
Tianrong You
Shareholder’s Meeting
Information Technology
Executive Vice President
Yilong Jian
Product Strategy Office
Senior Assistant Vice President
Wen‐Qin Zhong
Business and Procurement CenterSenior Vice President
Fu‐Ming Zhang
Kapok Computer (Kunshan) Ltd.Assistant Vice President
Guan‐Yan Lin
CSR work group
Audit Office
President Office
The Audit
Committee
Board of Directors
Executive Vice President
Yilong Jian
General Manager
Mingxian Cai
Chairman
(II) Main Departments' Business
Name of Department Responsible Business
Audit Office Examine and review the internal control system of the Company and the subsidiaries, and audit all rules and systems.
President Office Establish the Company's business targets and policies, operate each business and supervise / execute the affiliates' management.
Management Center
1. Handle the accounting and tax affairs, set up the budget, analyze the business, prepare the financial statement, plan the funds as well as contact with banks and stock affairs. 2. Be responsible for the human resource management and general administration management for whole enterprise. 3. Be responsible for the legal and intellectual property management for whole enterprise.
Research and Development Center
Be responsible for product's research, development, design and technological application.
Business and Procurement Center
1. Plan the global marketing, promote the business and sales; push the global deployment as well as deepen the regions and channel market. 2. Strengthen the after-sales services, meet the customers' demand, intensify the relationships with customers, reduce the risk of the bad debt and take charge of materials' support. 3. Strategic purchase, price negotiation and enquiry for the market price of the components of electrons and mechanisms. 4. Enhance the Company's image, participate in exhibition, advertise, plan and implement.
Kapok Computer (Kunshan) Ltd.
1. Be responsible for planning and coordination of orders received from Taiwan as well as production and manufacture in China. 2. Analyze the production capacity and set up the plans of production and manpower according to the plans of production and sales. 3. Prepare the material plans according to production plans, and control the issuance of material orders to maintain the lowest inventory volume.
-11-
4. Establish the production system with high-flexibility, high-efficiency, high-quality and low-cost to meet the customers' demand.5. Implement the on-site real time service to enhance the service quality for thecustomers.
Product Strategy Office Be responsible for new products' development and market development's planning.
Information Technology
1. Plan and Implement the IT operation and e-operation, integrate the IT andcommunication.
2. Application of systemic plans and design as well as information security andmanagement.
-12-
II. Information for Directors, Supervisors, Presidents, Vice Presidents, Assistant Vice Presidents, Chiefs of Each Department and Branches (I) Information for Directors and Supervisors
1. Name of Directors and Supervisors, Their Main Experiences (Education), Current Other Positions for the Company and Other Companies Concurrently, And Other Relevant Information
April 20, 2019
Title Nationality / Place of
Registration Name Sex Date Elected
(Assumed) Term Date First
Elected
Shareholding When Elected
Current Shareholding Current Shareholding of
Representatives, Spouses and Minor Children
Shareholding Under Other Persons' Names
Main Experience (Education)
Current Other Positions for the Company and
Other Companies Concurrently
Executives, Directors or Supervisors Who Are Spouses or Within Second-Degrees of Kinship
Number of Shares
Shareholding ratio
Number of Shares
Shareholding ratio
Number of Shares
Shareholding ratio
Number of Shares
Shareholding ratio Title
Full name Relationship
Chairman Taiwan Hsu, Kun-Tai Male June 15, 2018
3 Years
October 4, 1983
51,701,335 7.57% 51,701,335 7.72% 16,371,784 2.44% 0 0.00%
Honorary doctorate of the Engineering Institute, National Taipei University of Technology. Department of Electronic Engineering, National Taipei Institute of Technology Chairman of Clevo Co. Chairman of Chicony Electronics CO., Ltd Chairman of the Group of Buynow and the Group of the Chicony Plaza Department Store
Chairman of the Company Chairman of Chicony Electronics CO., Ltd(2385) Chairman of Chuangri Technology Co., Ltd. Chairman of the Group of Buynow Chairman of Chicony Plaza Department Store Chairman of Hongwell Group
- - -
Vice Chairperson
and President Taiwan Tsai, Ming-Hsien Male
June 15, 2018
3 Years
May 27, 1993 10,149,224 1.49% 10,084,224 1.51% 3,054,593 0.46% 0 0.00%
MBA program, National Cheng-Chi University Department of Electronic Engineering, National Taipei Institute of Technology Vice Chairman and General Manager of Clevo Co. President of the Buynow Group
General Manager of Clevo Co Director of Clevo Investment Co., Ltd. Director and General Manager of Kapok Computer Co., Ltd. Chairman of Kapok Computer (Kunshan) Ltd. President of the Buynow Group Vice Chairman of Chicony Plaza Department Store
- - -
Director Taiwan Chien,Yih-Long Male June 15, 2018
3 Years
June 15, 2012
1,673,376 0.24% 1,673,376 0.25% 0 0.00% 0 0.00%
MBA, Phillips University, USA Director of Clevo Co. Executive Vice President of Notebook Business Group of Clevo Co.
Executive Vice President, Notebook Business Group of the Company General Manager of Kapok Computer (Kunshan) Ltd.
- - -
Independent Director
Taiwan Chou, Po-Chiao Male June 15, 2018
3 Years
June 15, 2018
0 0.00% 0 0.00% 0 0.00% 0 0.00%
Department of Accountancy, NCKU Qualified Senior Examination of Accounting and Auditing Personnel Executive Director and General Manager of First Commercial Bank Director and Vice President of First Financial Holding Co., Ltd. Chairman of US First Commercial Bank Chairman of First Venture Capital Co., Ltd.and First Consulting Co.,Ltd. Vice Chairman of Waterland Financial Holding Co., Ltd Director of Taipei Financial Center Corporation
Independent Director of Clevo Co. Independent Director of ITEQ Corporation
- - -
Independent Director
Taiwan Chen,Tsung-Ming
Male June 15, 2018
3 Years
June 16, 2015
0 0.00% 0 0.00% 0 0.00% 0 0.00%
Tamsui Vocational High School Director of Zippy Materials Science Inc. Chairman of Betterment Co., Ltd.
Director of Zippy Materials Science Inc. Chairman of Betterment Co., Ltd.
- - -
Independent Director
Taiwan Fan, Kuang-SUNG
Male June 15, 2018
3 Years
June 16, 2015
0 0.00% 0 0.00% 0 0.00% 0 0.00%
Department of Japanese, Tamkang University Director of Kentec Inc. Chairman of Win-House Co., Ltd.
Chairman of Win-House Co., Ltd.
- - -
-13-
1.2 Major Shareholders of the Corporate Shareholders (the Company has no director who is the representative of the corporate shareholders)
1.3 Whether the Directors or Supervisors Have at Least Five Years of Work Experience in the Areas of Commerce, Law, Finance, or Accounting, or Otherwise Necessary for the Business of the Company, and Meet the Following Circumstances Listed
Criteria
Full name (Note 1)
Have at Least Five Years Work Experience and Meet the Following Professional Qualification Independence Criteria (Note 2)
Number of Other Public Companies in Which the Individual is Concurrently Serving as an Independent Director
An Instructor or Higher Position in a Department of Commerce, Law, Finance, Accounting, or Other Academic Department Required by the business of the Company in a Public or Private Junior College, College or University
A Judge, Public Prosecutor, Attorney, CPA, or Other Professional or Technical Specialist Who Has Passed a National Examination and Has Been Awarded a Certificate in a Profession Necessary for the Business of the Company
Have Work Experience in the Areas of Commerce, Law, Finance, or Accounting, or Otherwise Necessary for the Business of the Company
1 2 3 4 5 6 7 8 9 10
Hsu, Kun-Tai V V V V V V None
Tsai, Ming-Hsien V V V V V V V V None
Chien,Yih-Long V V V V V V V V V None
Chou, Po-Chiao V V V V V V V V V V V 1
Chen,Tsung-Ming V V V V V V V V V V V None
Fan, Kuang-SUNG V V V V V V V V V V V None
Note 1: The number of column shall be adjusted upon the actual number. Note 2: Please tick “” on the following blank space of the corresponding criteria that apply to the directors or supervisors during two
years prior to being elected or during the term of office. (1) Not an employee of the Company or any of its affiliates.(2) Not a director or supervisor of the Company or any of its affiliates (however, it is not applicable if the person is an independent
director of the Company, its parent company, or any subsidiary, that is established according to the Laws or the local laws of thecountry).
(3) Not a natural-person shareholder who holds shares, together with those held by the person’s spouse, minor children, or held by theperson under others’ names, in an aggregate amount of 1% or more of the total number of outstanding shares of the Company orranking in the top 10 in holdings.
(4) Not a spouse, relative within the second degree of kinship, or lineal relative within the fifth degree of kinship, of any of the personsin the preceding three subparagraphs.
(5) Not a director, supervisor, or employee of a corporate shareholder who directly holds 5% or more of the total number ofoutstanding shares of the Company or who holds shares ranking in the top five holdings.
(6) Not a director, supervisor, manager, or shareholder holding 5% or more of the shareholding, of a specified company or institutionwhich has a financial or business relationship with the Company.
(7) Not a professional individual who, or an owner, partner, director, supervisor, or manager of a sole proprietorship, partnership,company, or institution that, provides commercial, legal, financial, accounting services or consultation to the Company or to itsaffiliates, or a spouse thereof. These restrictions do not apply to any member of the Remuneration Committee who exercises powerspursuant to Article 7 of the “Regulations Governing the Establishment and Exercise of Powers of Remuneration Committees ofCompanies whose Stock is Listed on the TWSE or Traded on the Securities Brokerage“.
(8) Not having a marital relationship, or a relative within the second degree of kinship to any other director of the Company.(9) Not having one of the circumstances stated 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.
V
-14-
(II) Information for Presidents, Vice Presidents, Assistant Vice Presidents, Chiefs of Each Department and BranchesApril 20, 2019
Title Nationality Name Sex
Date Elected (Assume
d)
Shareholding Shareholding of
Spouse & Minor Children Shareholding Under
Other Persons' Names Main Experience
(Education) Current Other Position
Concurrently
Managers Who are Spouses or Within
Second-Degrees of Kinship
Number of Share
Shareholding %
Number of Share
Shareholding %
Number of Share
Shareholding %
Title
Full nam
e
Relationship
Vice Chairperson and President
Taiwan Tsai, Ming-Hsien Male January 1999
10,149,224 1.49% 10,084,224 1.51% 3,054,593 0.46%
MBA program, National Cheng-Chi University Department of Electronic Engineering, National Taipei Institute of Technology Vice Chairman and General Manager of Clevo Co. President of the Buynow Group
Director of Clevo Investment Co., Ltd. Director and General Manager of Kapok Computer Co., Ltd. Chairman of Kapok Computer (Kunshan) Ltd. President of the Buynow Group Vice Chairman of Chicony Plaza Department Store
- - -
Executive Vice President Taiwan Chien,Yih-Long Male
August 2003 1,673,376 0.24% 1,673,376 0.25% 0 0.00%
MBA, Phillips University, USA Director of Clevo Co. Executive Vice President of Notebook Business Group of Clevo Co.
General Manager of Kapok Computer (Kunshan) Ltd. - - -
Senior Vice President
Taiwan Zhang, Fu-Ming Male August 2003
640,226 0.10% 0 0.00% 0 0.00%
Department of Computer Science & Information Engineering, National Taiwan University Assistant manager, Chaplet Vice President of Research and Development Center, Clevo Co.
None - - -
Senior Vice President and Chief of Finance/Accounting
Taiwan Yu, Tien-Jung Male September 2004
895,590 0.13% 3,882 0.001% 0 0.00%
EMBA, National Cheng-Chi University Assistant Vice President, Clevo Co. Vice President of Avita Corporation
Supervisor of Clevo Investment Co., Ltd. General Manager of Buynow Management Center
- - -
Vice President Taiwan Fan, Guang-Hui Male March 2003
419,060 0.06% 0 0.00% 0 0.00%
Department of Electronics Engineering, Tamkang University Vice President, U.S. Chicony CEO, Action Electronics President, U.S. GVC
None - - -
-15-
Title Nationality Name Sex
Date Elected (Assume
d)
Shareholding Shareholding of
Spouse & Minor Children Shareholding Under
Other Persons' Names Main Experience
(Education) Current Other Position
Concurrently
Managers Who are Spouses or Within
Second-Degrees of Kinship
Number of Share
Shareholding %
Number of Share
Shareholding %
Number of Share
Shareholding %
Title
Full nam
e
Relationship
Vice President Taiwan Li, Wen-Hua Male Decemb
er 2004 232,538 0.03% 0 0.00% 0 0.00%
Department of Industrial Design, Tatung Institute of Technology Section Head, Yuanxing Technology Corp Director of Planning Office, Buynow
None - - -
Vice President Taiwan Chen, Hsueh-
Wen Male April
2010 238,040 0.04% 0 0.00% 0 0.00%
Master, School of Management, National Central University Sales Engineer, Jinyi Co., Ltd. Sales Assistant Manager, Xusheng Technology President of Business Division, Synnex Technology International Corporation
None - - -
Vice President Taiwan Zheng, Wen-Bin Male August 2014 205,311 0.04% 0 0.00% 0 0.00%
Department of Electronic Engineering, Two-Year of Lien Ho Industrial and Technological Junior College Fu Shifa Technology Section Manager, Fair Friend Enterprise Co., Ltd. Senior Assistant Vice President of Research and Development Center, Clevo Co.
None - - -
Vice President Taiwan Wu, Mai Female November 2007
118,809 0.02% 0 0.00% 0 0.00%
Department of Business Administration, Chung Yuan Christian University MBA Program Curriculums, Finance, National Taiwan University Guang-Nan Enterprise Agit Global, Inc. Senior Assistant Vice President of Finance Division of Clevo Co.
None - - -
-16-
Title Nationalit
y Name Sex Date
Elected (Assumed)
S h a r e h o l d i n g Shareholding of Spouse & M i n o r C h i l d r e n
Shareholding Under Other Persons'
Names Main Experience (Education)
Current Other Position Concurrently
Managers Who are Spouses or Within Second-Degrees of
Kinship
Number of Share
Shareholding %
Number of Share
Shareholding % Number of
Share Title Title
Full nam
e
Relationship
Senior Assistant Vice President
Taiwan Wang, Feng-Zhu Female May 2005
264,311 0.04% 184,324 0.03% 0 0.00%
EMBA, National Cheng-Chi University Section Manager of Sales, Acer Section Manager of Sales, Ligitek Assistant Vice President of Sales Center, Clevo Co.
None - - -
Senior Assistant Vice President
Taiwan Zhang, Wen-Song Male September 2003
261,236 0.04% 0 0.00% 0 0.00%
Department of Electrical Engineering, National Taiwan Ocean College Supervisor, Wei-Lu Assistant Vice President of Procurement Office, Clevo Co.
None - - -
Senior Assistant Vice President
Taiwan Zhong, Wen-Qin Male October 2009 0 0.00% 0 0.00% 0 0.00%
Department of Industrial Engineering, Feng Chia University Assistant Vice President, Clevo Co. Director, Quanta Computer
None - - -
Senior Assistant Vice President
Taiwan Lin, Nan-Sheng Male September
2013 94,000 0.01% 0 0.00% 0 0.00%
Master of Computer Science and Information Engineering, Fu Jen Catholic University Formal Engineer, Chaplet Manager, Zhi-Sheng Computer Senior Manager, Elitegroup Computer Assistant Vice President of Sales Center, Clevo Co.
None - - -
Senior Assistant Vice President
Taiwan Zheng, Yu-Ming Male August 2003
30,639 0.005% 0 0.00% 0 0.00%
Master of Industrial Management, National Taiwan University of Science and Technology Senior Manager, Getac Senior Manager, American Megatrends Incorporated Director of Research and Development Center, Clevo Co.
None - - -
Senior Assistant Vice President
Taiwan Lin, Sheng-Xiang Male November
2007 248,716 0.04% 18,790 0.003% 0 0.00%
Two-Year of Nanya Industrial and Technological Junior College Deai Enterprise Ltd. Zhanxin Electric Ltd. Director of Research and Development Center, Clevo Co.
None - - -
-17-
Title Nationalit
y Name Sex Date
Elected (Assumed)
S h a r e h o l d i n g Shareholding of Spouse & M i n o r C h i l d r e n
Shareholding Under Other Persons'
Names Main Experience (Education)
Current Other Position Concurrently
Managers Who are Spouses or Within Second-Degrees of
Kinship
Number of Share
Shareholding %
Number of Share
Shareholding % Number of
Share Title Title
Full nam
e
Relationship
Assistant Vice President
Taiwan Chen, Zong-Zhi Male October 2009
139,965 0.02% 0 0.00% 0 0.00%
Department of Electrical Engineering, Chinese Culture University Assistant Manager, Hexing Technology Manager, HTC Corporation Director of Research and Development Center, Clevo Co.
None - - -
Assistant Vice President
Taiwan Lin, Guan-Yan Male September
2011 184,338 0.03% 50 0.000% 0 0.00%
Department of Mass Communications, Private Chinese Culture University Engineer, Phihong Technology Director of the Kunshan factory, Clevo Co.
None
- - -
Assistant Vice President Taiwan Lin, Liang-Shi Male
September 2012 75,825 0.01% 0 0.00% 0 0.00%
Department of Electronic Engineering, Lien Ho Industrial and Technological Junior College Senior Engineer, First International Computer Yuan Yi Technology Taiteng Company Jixin Computer Director of Research and Development Center, Clevo Co.
None - - -
Assistant Vice President Taiwan Wang, Zhen-Xiong Male
September 2013 84,023 0.01% 0 0.00% 0 0.00%
Department of Electronic Engineering, National Taipei Institute of Technology Development Team Leader, King Ultrasonic Co., Ltd. Director of Research and Development Center, Clevo Co.
None - - -
-18-
III. Remuneration of Directors, Supervisors, President, and Vice President in the Most Recent Year (I) Remuneration of Directors (Including Independent Directors) (names are disclosed by the way of gathering the amount together and tie-in with the range of remuneration)
Unit: NT$ thousand
Title Full name
Remuneration of Directors Ratio of Total Remuneration (A+B+C+D) to
Net Income (Note 10) Base Compensation (A)(Note 2) Severance Pay (B) Bonus to Directors
(C)(Note 3) Business Allowances
(C)(Note 4)
The Company
All companies in the consolidated
financial statements (Note 7)
The Company
All companies in the consolidated
financial statements (Note 7)
The Company
All companies in the consolidated
financial statements (Note 7)
The Company
All companies in the consolidated
financial statements (Note 7)
The Company
All companies in the consolidated
financial statements (Note 7)
Chairman Hsu, Kun-Tai
0 0 0 12,300 12,300 1,520 1,520 0.95% 0.95%
Vice Chairperson
and President Tsai, Ming-Hsien
Director Lin,Mao-Kuei Director and
Executive Vice President
Chien,Yih-Long
Independent Director
Chou, Po-Chiao
Independent Director
Chen,Tsung-Ming
Independent Director
Fan, Kuang-SUNG
Title Full name
Relevant Remuneration Received by Directors Who are Also Employees Ratio of Total Compensation (A+B+C+D+E+F+G) to Net Income
(%) (Note 10)
Compensation from an Invested
Company Other than the Company’s Subsidiaries (Note 11)
Salary, Bonuses, and Special Allowances (E) (Note 5)
Severance Pay (F) Profit Sharing- Employee Bonus (G)(Note 6)
The Company
All companies in the consolidated
financial statements (Note 7)
The Company
All companies in the consolidated
financial statements (Note 7)
The Company
All companies in the consolidated financial
statements (Note 7) The Company
All companies in the consolidated
financial statements (Note 7) Amount of
Cash Amount of
Stock Amount of
Cash Amount of
Stock Chairman Hsu, Kun-Tai
10,775 43,613 201 201 3,296 0 3,296 0 1.93% 4.19% None
Vice Chairperson
and President Tsai, Ming-Hsien
Director Lin, Mao-Kuei Director and
Executive Vice President
Chien,Yih-Long
Independent Director
Chou, Po-Chiao
Independent Director
Chen,Tsung-Ming
Independent Director
Fan, Kuang-SUNG
*Except for the disclosure of the above table, any remuneration of the directors of the Company is derived from the service for companies in the consolidated financial statements (e.g. non-employee's consultant etc.) in the most recent year: None.
-19-
Range Table for Remuneration:
Note 1: The names of the directors shall be listed individually (the corporate shareholders shall list the names of the corporate shareholders and their representatives individually) and shall disclose each item's amount gathered
together. If a director is also a president or vice president, this table and the following table (3-1) or (3-2) shall be filled in. Note 2: Refer to the remuneration of the directors (including the directors' salary, position allowances, severance pay, various bonus and rewards etc.) in the most recent year. Note 3: Fill in the remuneration of the directors which was passed by the board of director in the most recent year. Note 4: Refers to the directors' related business allowances (including transportation allowances, special allowances, various allowances, dormitory and equipping car etc.) in the most recent year. If a house, a car and other
transportation tool or other expenditure that is dedicated for personal use are provided, such assets' nature, cost, real rental or rental calculated by fair market price, gasoline expenses or other payments shall be disclosed. Besides, if a driver is equipped, such driver's related compensation paid by the Company shall be annotated without counting into remuneration.
Note 5: Refers to relevant remuneration received by directors who are also employees (including concurrently serves as a president, vice president, other manager or employee), including salary, position allowances, severance pay, various bonus, rewards, transportation allowances, special allowances, various allowances, dormitory and equipping car etc. in the most recent year. If a house, a car and other transportation tool or other expenditure that is dedicated for personal use are provided, such assets' nature, cost, real rental or rental calculated by fair market price, gasoline expenses or other payments shall be disclosed. Besides, if a driver is equipped, such driver's related compensation paid by the Company shall be annotated without counting into remuneration. In addition, the salary expenses which were recognized according to the IFRS 2 "Share-Based Payment", including exercisable employee stock options, new restricted employee shares and participating in subscribing shares for capital increased by cash etc., shall be counted into remuneration.
Note 6: Refers to a director who is also an employee (including concurrently serves as a president, vice president, other manager or employee) received the employee's compensation (including stock bonus and cash bonus) in the most recent year, the amount of such employee's compensation passed by the board of director in the most recent year shall be disclosed. If it is unable to estimate, the amount to which will be proposed to distribute this year shall be calculated upon the percentage of last year's actual distributed amount, and shall fill in Appendix 1-3 additionally.
Note 7: The total remuneration paid by the companies in the consolidated financial statements (including the Company) to the Company's directors shall be disclosed. Note 8: Upon each item's total remuneration paid by the Company to directors, the names of the directors shall be disclosed in the corresponding range. Note 9: Each item's total remuneration paid by companies in the consolidated financial statements (including the Company) to the Company's directors shall be disclosed, the names of the directors shall be
disclosed in the corresponding range. Note 10: Net income refers to the net income in the most recent year; for those adopted the IFRS, the net income shall refer to the net income stated in the parent or individual financial statement in the most recent
year. Note 11: a. This column shall specifically fill in the related compensation of directors of the Company which was received from an invested company other than the Company’s subsidiary.
b. If the compensation of the Company's director was received from an invested company other than the Company’s subsidiary, such compensation received by the Company's directors from an invested company other than the Company's subsidiary shall be combined into I column of the range table of remuneration, and the name of column shall be renamed as "All Investees".
c. Remuneration refers to the compensation, remuneration (including employee, director and supervisor) and business allowances received by the Company's directors who serve as directors, supervisors or managers of an invested company other than the Company's subsidiary.
* The concept of income from the remuneration disclosed in this table is different from the Income Tax Act. So the purpose of this table shall be the purpose of disclosure only without using for tax.
Range of Remuneration Paid to The Company's Directors
Name of Directors
Total of (A+B+C+D) Total of (A+B+C+D+E+F+G) (Explanation 3)
The Company (Note 8) All companies in the consolidated financial
statements (Note 9) H
The Company (Note 8) Companies in the consolidated financial
statements (Note 9) I
Under NT$ 2,000,000 Lin, Mao-Kuei/Chen,Tsung-Ming/Fan, Kuang-
SUNG/Chou, Po-Chiao
Lin, Mao-Kuei/Chen,Tsung-Ming/Fan, Kuang-
SUNG/Chou, Po-Chiao
Lin, Mao-Kuei/Chen,Tsung-Ming/Fan, Kuang-
SUNG/Chou, Po-Chiao
Lin, Mao-Kuei/Chen,Tsung-Ming/Fan, Kuang-
SUNG/Chou, Po-Chiao NT$2,000,001 ~ NT$5,000,000 Hsu, Kun-Tai/Tsai, Ming-Hsien/Chien,Yih-Long Hsu, Kun-Tai/Tsai, Ming-Hsien/Chien,Yih-Long NT$5,000,001 ~ NT$10,000,000 Hsu, Kun-Tai/Tsai, Ming-Hsien/Chien,Yih-Long Hsu, Kun-Tai NT$10,000,001 ~ NT$15,000,000 Chien,Yih-Long NT$15,000,001 ~ NT$30,000,000 NT$30,000,001~ NT$50,000,000 Tsai, Ming-Hsien NT$50,000,001 ~ NT$100,000,000 Over NT$100,000,000 Total 7 Persons 7 Persons 7 Persons 7 Persons
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(II) Remuneration of Supervisor (The Company has established the audit committee in 2018, so this is not applicable.)
(III) Remuneration of Presidents and Vice Presidents (names are disclosed by the way of gathering the amount together and tie-in with the range of remuneration)
Unit: NT$ thousand
Title Full name
Salary (A) (Note 3) Severance Pay (B)
Bonus and Special Allowances (C)
(Note 3)
Total Employee Remuneration (Note 4)
Ratio of Total (A+B+C+D) to Net Income (%) (Note 8)
Compensation from an Invested Company Other than
the Company’s Subsidiaries
(Note 9)
The Compa
ny
All companies
in the consolidat
ed financial
statements (Note 5)
The Company
All companies
in the consolidated financial statements (Note 5)
The Company
All companies
in the consolidated
financial statements (Note 5)
The Company
All companies in the consolidated
financial statements (Note 5)
The Company
All companies in
the consolidated
financial statements (Note 5)
Amount of Cash
Amount of
Stock
Amount of Cash
Amount of
Stock Vice Chairperson and President Tsai, Ming-Hsien
16,432 32,019 1,427 1,427 6,132 44,109 8,286 0 8,286 0 2.21% 5.90% None
Executive Vice President Chien,Yih-Long
Senior Vice President Zhang, Fu-Ming
Senior Vice President and Chief of Finance/Accounting
Yu, Tien-Jung
Vice President Fan, Guang-Hui Vice President Li, Wen-Hua
Vice President Chen, Hsueh-
Wen Vice President Zheng, Wen-Bin Vice President Wu, Mai
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Range Table of Remuneration:
Range of Remuneration Paid to the Company's Presidents and Vice President
Name of President and Vice Presidents
The Company (Note 6) Companies in the consolidated financial statements (Note 7) E
Under NT$ 2,000,000
NT$2,000,001 ~ NT$5,000,000 Zhang, Fu-Ming/Yu, Tien-Jung/Fan, Guang-Hui/Li, Wen-Hua/Chen, Hsueh-Wen/Zheng, Wen-Bin/Wu, Mai
Yu, Tien-Jung/Li, Wen-Hua /Wu, Mai
NT$5,000,001 ~ NT$10,000,000 Tsai, Ming-Hsien/Chien,Yih-Long Chien,Yih-Long/Zhang, Fu-Ming/Fan, Guang-Hui/Chen, Hsueh-
Wen/Zheng, Wen-Bin NT$10,000,001 ~ NT$15,000,000 NT$15,000,001 ~ NT$30,000,000 NT$30,000,001 ~ NT$50,000,000 Tsai, Ming-Hsien NT$50,000,001 ~ NT$100,000,000 Over NT$100,000,000 Total 9 Persons 9 Persons
Note 1: The names of the presidents and vice presidents shall be listed individually and shall disclose each item's amount gathered together. If a director is also a president or vice president, this table and the above table (1-1) or (1-2) shall be filled in.
Note 2: Fill in president's and vice presidents' salary, position allowances, severance pay in the most recent year. Note 3: Fill in the president's and vice presidents' various bonus, rewards, transportation allowances, special allowances, various allowances, dormitory, equipping car etc. and
other compensation amount in the most recent year. If a house, a car and other transportation tool or other expenditure that is dedicated for personal use are provided, such assets' nature, cost, real rental or rental calculated by fair market price, gasoline expenses or other payments shall be disclosed. Besides, if a driver is equipped, such driver's related compensation paid by the Company shall be annotated without counting into remuneration. In addition, the salary expenses which were recognized according to the IFRS 2 "Share-Based Payment", including exercisable employee stock options, new restricted employee shares and participating in subscribing shares for capital increased by cash etc., shall be counted into remuneration.
Note 4: Fill in the amount of the employee's compensation of presidents and vice presidents passed by the board of director in the most recent year. If it is unable to estimate, the amount to which will be proposed to distribute this year shall be calculated upon the percentage of last year's actual distributed amount, and shall fill in Appendix 1-3 additionally. Net income refers to the net income in the most recent year; for those adopted the IFRS, the net income shall refer to the net income stated in the parentor individual financial statement in the most recent year.
Note 5: The total remuneration paid by the companies in the consolidated financial statements (including the Company) to the Company's presidents and vice presidents shall be disclosed.
Note 6: Upon each item's total remuneration paid by the Company to presidents and vice presidents, the names of the presidents and vice presidents shall be disclosed in the corresponding range.
Note 7: Each item's total remuneration paid by companies in the consolidated financial statements (including the Company) to the Company's presidents and vice presidents shall be disclosed, and the names of the presidents and vice presidents shall be disclosed in the corresponding range.
Note 8: Net income refers to the net income in the most recent year; for those adopted the IFRS, the net income shall refer to the net income stated in the parent or individual financial statement in the most recent year.
Note 9: a. This column shall specifically fill in the related compensation of presidents and vice presidents of the Company which was received from an invested company other than the Company’s subsidiary.
b. If the related compensation of the Company's presidents and vice presidents was received from an invested company other than the Company’s subsidiary, suchcompensation received by the Company's presidents and vice presidents from an invested company other than the Company's subsidiary shall be combined into E columnof the range table of remuneration, and the name of column shall be renamed as "All Investees".
c. Remuneration refers to the compensation, remuneration (including employee, director and supervisor) and business allowances received by the Company's presidents andvice presidents who serve as directors, supervisors or managers of an invested company other than the Company's subsidiary.
* The concept of income from the remuneration disclosed in this table is different from the Income Tax Act. So the purpose of this table shall be the purpose of disclosure only withoutusing for tax.
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(IV) Names of Managers Who are Distributed the Employees' Compensation and ItsDistribution Status
Unit: NT$ Thousand December 31, 2018
Title (Note 1)
Full name (Note 1)
Amount of Stock Amount of Cash Total Ratio of Total Amount to Net
Income (%)
Mana
gers
Vice Chairperson and President
Tsai, Ming-Hsien
0 13,614 13,614 0.93%
Executive Vice President
Chien,Yih-Long
Senior Vice President
Zhang, Fu-Ming Yu, Tien-Jung
Vice President
Fan, Guang-Hui Li, Wen-Hua
Chen, Hsueh-Wen Zheng, Wen-Bin
Wu, Mai
Senior Assistant Vice President
Zhang, Wen-Song Wang, Feng-Zhu Lin, Nan-Sheng
Zhong, Wen-Qin Lin, Sheng Xiang Zheng, Yu-Ming
Assistant Vice President
Chen, Zong-Zhi Lin, Guan-Yan Lin, Liang-Shi
Wang, Zhen-Xiong
Note 1: The individual name and title shall be disclosed, but appropriation of earnings shall be disclosed with the amount gathered.
Note 2: Fill in the amount of the employee's compensation of the managers (including stock and cash) passed by the board of director in the most recent year. If it is unable to estimate, the amount to which will be proposed to distribute this year shall be calculated upon the percentage of last year's actual distributed amount. Net income refers to the net income in the most recent year; for those adopted the IFRS, the net income shall refer to the net income stated in the parent or individual financial statement in the most recent year.
Note 3: According to the Letter No. 0920001301 released by the Institute on March 27, 2003, the applicable scope of the manager is as follows:
(1) president and the equivalent grade, (2) vice president and the equivalent grade, (3) assistant vice president and theequivalent grade, (4) chief of finance department, (5) chief of accounting department, (6) other persons who manage theCompany's affairs and have the authority of signature.
Note 4: If the directors, presidents and vice presidents received the employees' compensation (including stock and cash), except for filling in the Appendix 1-2, this table shall be filled in additionally.
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(V) Analyze the ratio of total remuneration paid by the Company and by all companies included in the consolidated financial statements for the latest two years to directors, supervisors, presidents and vice presidents of the Company, to the netincome in the parent or individual financial statement; and explain the policies, standards and portfolios for the paymentof remuneration, the procedures for determining remuneration, and the correlation with business performance and futurerisk:
1. The ratio of total remuneration paid by the Company and by all companies included in the consolidatedfinancial statements for the latest two years to directors, supervisors, presidents and vice presidents of theCompany, to the net income in the parent or individual financial statement is analyzed as follows:
Title
2017 2018
Total Remuneration (NT$ Thousand)
Ratio to Net Income (%) Total Remuneration (NT$ Thousand)
Ratio to Net Income (%)
The Company
Companies in the consolidated
financial statements
The Company
Companies in the consolidated
financial statements
The Company
Companies in the consolidated
financial statements
The Company
Companies in the consolidated
financial statements
Director (Note 1) 8,900 8,900 1.24% 1.24% 13,820 13,820 0.95% 0.95%
Supervisor 1,480 1,480 0.21% 0.21% 0 0 0% 0%
Presidents and Vice Presidents (Note 3)
33,094 100,616 4.61% 14.02% 36,330 92,083 2.50% 6.33%
Total 43,474 110,996 6.06% 15.46% 50,150 105,903 3.45% 7.28%
Expense of Share-Based
Payment (Note 3)
0 0 0% 0% 0 0 0% 0%
Note 1: The remuneration of directors has deducted the related compensation received by the directors for serving as the Company's internal managers concurrently.
Note 2: The compensation of presidents and vice presidents has deducted the related remuneration received for serving as the Company's directors concurrently.
Note 3: Refers to the compensation cost transferred from treasury shares which is recognized based on No. 39: Accounting Standards for Stock-based Payments in the Republic of China Financial Accounting Standards.
2. The policies, standards, and portfolios for the payment of remuneration,the procedures for determining remuneration, and the correlation withbusiness performance and future risk:(1)The remuneration of the directors and supervisors of the Company shall
be paid according to Article 23 and Article 26 of the Company's Articleof Incorporation.The Company's earnings, based on annual final accounts, shall reservethe payable income tax upon the laws and offset the losses fromprevious years first; the remaining amount shall set aside 10% for legalreserve, and reserve or reverse the special reserve as required by lawor the competent authority. The remaining earnings, if any, shall reserveno more than 1% as remuneration to the directors and supervisors”.
(2)The remuneration of the chairperson, vice chairperson, directors andsupervisors shall be evaluated upon the Company's "RegulationsGoverning the Board Performance Evaluation". In addition to referring tothe overall business performance of the Company, future business risksand the tendency of the development in the industry, the directors' andsupervisors' contribution to the Company's performance shall also bereferred in order to provide the appropriate remuneration. The relatedevaluation of performance and the appropriation of the remunerationshall be reviewed by the Remuneration Committee and the Board ofDirector. And the remuneration system shall be timely reviewed upon thereal business conditions and the relevant laws in order to seek the balancebetween the Company's sustainable business and risk control.
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(3)The compensation of the president shall be paid upon Article 29 of theCompany Act and Article 24 of the Company's Article of Incorporation.
(4)The compensation of the vice presidents shall be paid upon theCompany's personnel rule, employment rule and the rule of performanceevaluation as well as taking into account the overall contribution to theCompany.
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IV. Implementation of Corporate Governance
(I) Information of the Board of Director's OperationThe Board of Director held a total of 9 (A) meetings in 2018. The attendanceof director and supervisor were as follows:
Title Name (Note 1) Attendance in
Person (B) By Proxy
Attendance Rate (%)
【B/A】
(Note 2)
Remark
Chairman Hsu, Kun-Tai 9 9 100% Re-elected on June 15, 2018
Director Tsai, Ming-Hsien 9 9 100% Re-elected on June 15, 2018
Director Chien,Yih-Long 9 9 100% Re-elected on June 15, 2018
Independent
Director Chen,Tsung-Ming 9 9 100% Re-elected on June 15, 2018
Independent
Director Fan, Kuang-SUNG 9 8 89% Re-elected on June 15, 2018
Independent
Director Chou, Po-Chiao 5 5 100%
New Assumed in June, 2018
Director Maogui Lin 7 7 100%Dismissed on September 13,
2018
Director Tianrong You 4 4 100% Dismissed on June 15, 2018
Other mentionable items:
I. If the operation of the board of director has one of the following circumstances, the dates of the board's meetings, sessions, contents of
motion, all independent directors' opinions and the actions taken by the Company for the opinions of independent directors shall be
specified:(I) The circumstances listed in Article 14-3 of the Securities and Exchange Act: The Company has established the audit committee in 2018.
Pursuant to Article 14-5 of the Securities and Exchange Act, the Article 14-3 shall not be applicable.
(II)Except for the aforesaid circumstances, any resolution of the board of director was objected by or subject to a qualified opinion from
any of independent directors with record or written statement: No such circumstance in this year.
II. If there are directors' avoidance of motions in conflict of interest, the names of directors, contents of motion, causes for avoidance and voting
shall be specified:
Date of Board: August 13, 2018
Name of Director: Tsai, Ming-Hsien
Contents of Motion: Proposal for president's continuous serving is reported for resolution.
Causes for Avoidance: Director, Tsai, Ming-Hsien, had relations to the person involved in this proposal and avoided in discussing
and voting because of conflict of interest.
Participation in Voting: Except Tsai, Ming-Hsien, vice president, did not participate in or represent the discussion and voting
because of avoidance of conflict of interest, all other directors agreed with the proposal without any
objection.
Date of Board: September 21, 2018
Name of Director: Hsu, Kun-Tai
Contents of Motion: The Company and Hongwell Co., Ltd evaluated the joint development plan of land in Taipei City
together, and both companies prepared the bidding with half of shareholding each to contribute the funds
jointly.
Causes for Avoidance: President, Hsu, Kun-Tai, served as the chairperson of Honeywell Co., Ltd. concurrently and avoided because
of conflict of interest. The vice president, Tsai, Ming-Hsien, was recommended as the chairperson of this
proposal.
Participation in Voting: Except directors (including president) did not participate in discussing and voting because of avoidance of
conflict of interest, all other directors agreed with the proposal without any objection.
III. Measures taken to strengthen the functionality of the board in the year and the most recent year (e.g. establishment of the audit committee
and enhancement of information transparency etc.) and its implementation status:
(I) The Company's board of director has passed the establishment of the Company's "Audit Committee Charter" on March 27, 2018. And
after the general meeting of the shareholders elected three independent directors on June 15, 2018, the audit committee has been
established. As of June 30, 2019, it totally held 6 meetings.
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(II) The Company has completed 2018 performance evaluation for the board of director, and the evaluation report of the board's
performance was submitted to the board of director on March 27, 2019 to enhance the functionality of the board. Its evaluation
results are as follows:
2018 Result of the Board Performance Evaluation
The Company has passed the "Regulations Governing the Board Performance Evaluation" on November 14, 2017, and it stipulates that
the board of director shall conduct the performance evaluation for the board of director and members of directors at least once a year.
The internal evaluation of the board of director shall be conducted at the end of each year to proceed the performance evaluation in the
year upon this regulation. The Company has completed 2018 performance evaluation for the board of director, and the evaluation result
was reported to the board of director on March 27, 2019. The measured items of the performance evaluation for the Company's board
and its members includes the following five dimensions:
(1) Participating level for the Company's business.
(2) Enhancing the decision quality for the board.
(3) Composition and structure of the board.
(4) Directors' election and continuous education.
(5) Internal control.
This evaluation was proceeded by the internal self-evaluation of the board of director. According to the result of 2018 performance
evaluation for the board of director, the whole operation of the Company's board were performed well.
Note 1: If a director or a supervisor is a juridical person, the name of corporate shareholder and its representatives shall be disclosed.
Note 2: (1) If a director or a supervisor resigns before the end of year, the date of resignation shall be noted in the column of remark. The ratio of the attendance in person (%) shall be counted by the number of the board's meeting in the period of service and such person's actual number of attendance in person.
(2) If a director or supervisor is re-elected before the end of year, both new and olddirectors or supervisors shall be filled in, and the information that such person is an oldor a new director or supervisor as well as the date of renewal or re-election shall benoted in the column of remark. The ratio of the attendance in person (%) shall be countedby the number of the board's meeting in the period of service and such person's actualnumber of attendance in person.
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(II) Operation of the Audit Committee or Supervisors' Participation in the Boardof Director:3. Operation of the Audit Committee:The audit committee held a total of 5(A) meetings in 2018. The attendance ofthe independent directors was as follows:
Title Full name Attendance in Person (B) Attendance Rate (%)
(B/A) (Note)
Remark
Independent Director
(Convener of the Audit
Committee)
Chou, Po-Chiao 5 100% New Assumed on June 15, 2018
Independent Director
(Member of the Audit
Committee)
Chen,Tsung-Ming 5 100% New Assumed on June 15, 2018
Independent Director
(Member of the Audit
Committee)
Fan, Kuang-SUNG 4 80% New Assumed on June 15, 2018
Other mentionable items: I. If the operation of the audit committee has one of the following circumstances, the dates of the board's meetings, sessions, contents of motion, the
resolution of the audit committee and the actions taken by the Company for the opinions of the audit committee shall be specified: (I) The circumstances listed in Article 14-5 of the Securities and Exchange Act: Please refer to page 29 for the resolutions of the audit committee.(II) Except for the aforesaid circumstances, any resolution was not approved by the Audit Committee but was approved by two-thirds or more of alldirectors: None
II. If there is any independent director’s avoidance of motion in conflict of interest, such director’s name, contents of motion, causes for avoidance andvoting should be specified: None.
III. Communications between the independent directors, the chief internal auditor and CPAs (including communications of the significant items for theCompany's finance and operation, and its methods and results etc.):
(I) Communications between the independent directors and chief internal auditor:Date of Meeting Subject of Communication Result of Execution
November 14, 2018
The Audit Committee
Passed the Company's 2018 audit plan.
The auditor sat in the left-listed meetings of the audit committee to explain the audit operation, as well as discuss and communicate the contents of motion with the directors; such motion was reviewed and passed by all independent directors without objection, then reported to the board of director afterward.
March 27, 2019 The Audit Committee
Passed the Company's 2018 internal control system, and the statement of internal control system issued upon the result of self-evaluation.
(II) Communication between independent directors and CPAs:Date of Meeting Subject of Communication Result of Execution August 13, 2018
The Audit Committee
Passed the Company's financial statements for the second quarter of 2018. The CPAs sat in the left-listed
meetings of the audit committee to explain the auditing situation for yearly and quarterly financial
statements, as well as discuss and communicate the contents raised by
the directors; such financial statements were reviewed and
passed by the independent directors without objection, then reported to the board of director afterward.
November 14, 2018
The Audit Committee
Passed the Company's financial statements for the third quarter of 2018.
March 27, 2019 The Audit Committee
Passed the Company's financial statements and business report for the year of 2018.
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Summary Table of the Meetings Record for the Audit Committee:
Number of
Meetings
Number of
Meetings This Term
Date of Notification
Date of Meeting
Explanation of Subject
Independent Director
Remark Chou, Po-Chiao
Chen, Tsung-Ming
Fan, Kuang-SUNG
1 1 June 15, 2018
June 15, 2018
1. Election for the convener of the audit committee. V V V Yu, Tien-Jung Wu, Mai
2 2 June 15, 2018
June 25, 2018
1. Passed the establishment of the Company's "Procedure for the Meeting of the Audit Committee". V V V Yu, Tien-Jung Wu, Mai
3 3 July 31, 2018
August 13, 2018
1. Resolutions from the 1st and 2nd meetings of the first audit committee of the Company.2. Passed the Company's financial statements for the second quarter of 2018.3. Passed the base date for the capital reduction by the cancellation of treasury shares.4. Passed the Company's proposal of endorsements and guarantees.5. Passed the amendment to the procedure of the Company's relevant internal control operation in order to tiein with the establishment of the Company's audit committee.
V V V
Yu, Tien-Jung Wu, Mai
Tsai, Qiu-Ling Feng, Min-Juan
4 4 September 13,
2018 September 21,
2018 1. Resolutions from the 3rd meeting of the first audit committee of the Company.2. The Company's proposal of endorsements and guarantees.
V V Yu, Tien-Jung Wu, Mai
5 5 October 30, 2018
November 14, 2018
1. Resolutions from the 4th meeting of the first audit committee of the Company.2. Passed the Company's financial statements for the third quarter of 2018.3. Passed the proposal for benefit evaluation of the Group's asset activation.4. Passed the Company's proposal of endorsements and guarantees.5. Passed the Company's 2018 audit plan.
V V V
Yu, Tien-Jung Wu, Mai
Tsai, Qiu-Ling i Liu, Yi-Mei
Feng, Min-Juan
6 6 March 18, 2019
March 27, 2019
1. Resolutions from the 5th meeting of the first audit committee of the Company.2. Passed the Company's financial statements and business report for the year of 2018.3. Passed the appropriation of the Company's 2018 earnings.4. Passed the evaluation for the independence and professional qualifications of CPAs according to Article 29of the "Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies".
5. Passed the amendment to the Company's "Procedure for the Acquisition or Disposal of Assets".6. Passed the amendment to the Company's "Procedure for the Engagement of the Derivatives".7. Passed the amendment to the Company's "Procedure for the Lending Funds to Others".8. Passed the amendment to the Company's "Procedure for the Endorsements and Guarantees".9. Passed the Company's 2018 internal control system, and the statement of internal control system issued upon the result of self-evaluation.
10.Passed the Company's proposal of endorsements and guarantees.
V V V Yu, Tien-Jung Wu, Mai
Feng, Min-Juan
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4. Attendance of Supervisors at Board MeetingsThe board of director held 9 (A) meetings in 2018. The attendance of supervisorswas as follows:
Title Full name Attendance in Person (B) Attendance Rate (%)
(B/A) (Note)
Remark
Supervisor Tong Ling Machinery Co., Ltd.
Representative – Li, Zhu-Xin 4 100% Dismissed on June 15, 2018
Supervisor Lu, Jin-zong 3 75% Dismissed on June 15, 2018
Other mentionable items:
I. Composition and Responsibilities of Supervisors:
(I) Communications between the supervisors, the Company's employees and the shareholders:
The Company's supervisors have considerably understanding of the Company's business development and operation position. In addition
to understanding through various statements and reports submitted by the financial persons and auditors ordinarily, they also contact with
e-mail or phone at any time. The communication channels are fast and certainty.
(II) Communications between the supervisors, the chief internal auditor and CPAs:
The Company's supervisors and chief auditor regularly sit in the board meeting. Except for the documentary audit report, there are many
chances for the face-to-face communications. Because the supervisors deeply grasps and understands the finance and the business, they
can comprehend the financial statements issued by the CPAs. The communication channels are also fast and certainty; the major ways of
communication are as follows:
(1) Periodical Reports:
When the chief auditor completes the audit items, the audit report and worksheets shall be submitted in written form to
every supervisor before the end of the next month.
The chief auditor sits in the board of director to report the execution of the auditing.
CPAs reports to the supervisors periodically.
(2) Irregular Reports: In case of business requirement, the chief auditor and CPAs will raise the written reports or explanation orally to
the supervisors.
II. If the supervisors sit in the board and express the opinions, the dates of board, sessions, the contents of motion, resolutions of the board
and the actions taken by the Company for the opinions expressed by the supervisors: None.
III. The company established the audit committee on June 15, 2018, and the term of office for supervisors expired at the same time. The board
of director held 4 meetings during the period of the term of office.
Note: *If a supervisor resigns before the end of year, the date of resignation shall be noted in the column of remark. The ratio of
the attendance in person (%) shall be counted by such person's actual number of attendance in person in the period of
service.
*If a supervisor is re-elected before the end of year, both new and old supervisors shall be filled in, and the information that
such person is an old or a new supervisor as well as the date of renewal or re-election shall be noted in the column of
remark. The ratio of the attendance in person (%) shall be counted by such person's actual number of attendance in person
in the period of service.
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(III) Corporate Governance Implementation Status and Deviations from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies andIts Reasons:
Evaluation Item
Implementation Status (Note 1) Deviations from the Corporate Governance Best Practice
Principles for TWSE/TPEx Listed Companies and Reasons
Yes No Abstract Illustration
I. Does the company establish and disclose the Corporate GovernanceBest-Practice Principles based on “Corporate Governance Best PracticePrinciples for TWSE/TPEx Listed Companies”?
V The Company has established the "Corporate Governance Best-Practice Principles". Please refer to http://www.clevo.com.tw/.
The Company has established and disclosed based on “Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” without any deviation.
II. The Company's shareholding structure & shareholders’ rights/benefits(I) Does the Company establish an internal operating procedure to deal with
shareholders’ suggestions, doubts, disputes and litigations, and implementbased on the procedure?
(II) Does the Company possess the list of its major shareholders who control theCompany in reality as well as the ultimate owners of those shares?
(III) Does the Company establish and execute the risk control/management andfirewall system with its affiliates?
(IV) Does the company establish internal rules against the Company's insiderstrading of the securities with undisclosed information in the market ?
V
V
V
V
(I) The Company has designated a professional agency to handle the stock affairs andhas established the spokesperson, deputy spokesperson and dedicated persons totake charge of the shareholders' suggestions or disputes etc.
(II) Most of the Company's major shareholders are the management team and theshareholders with long-term of shareholding. The stock office will obtain the list of theshareholders from the Taiwan Depository & Clearing Corporation through the stock agency designated by the Company within next two days from book closure date forthe shareholders' meeting and dividend distribution upon the regulations, then will summarize the shareholding information of the major shareholders immediately and report to the senior management team. The Company can grasp the list of the majorshareholders at any time to assure the stability of the management rights.
(III) Each affiliate operates independently, and establishes various rules according to theregulations of the competent authority. The transactions with affiliates shall beconducted according to the relevant rules.
(IV) In order to let the acts of the Company's directors, supervisors and managers complywith the ethical standards and let the Company's stakeholders understand theCompany's ethical standards, the Company has established the "Codes of EthicalConduct" and "Ethical Corporate Management Best Practice Principles" to follow up.The Company has established the "Procedures for Handling Material InsideInformation and Preventing Insider Trading" to prevent the occurrence of insidertrading.
The Company has currently executed according to “Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” without any deviation.
III. Composition and Responsibilities of the Board of Director(I) Does the Board develop and implement a diversified policy for the
composition of its members?
(II) Does the Company voluntarily establish other functional committees inaddition to the Remuneration Committee and the Audit Committee pursuantto the laws?
(III) Does the Company establish the rule for the performance evaluation of theBoard and its methods of evaluation, and conduct the regular performanceevaluation annually?
V
V
(I) The members of the Company's board are set up according to the Company's"Corporate Governance Best-Practice Principles". In addition to consideration ofbasic conditions of sex, age, nationality and culture etc., the members of the boardshall have the qualifications of knowledge, capabilities and disciplines that arerequired to perform the duties.The nomination and election for the members of the Company's board shall complywith the regulations of the Article of Incorporation and adopt the candidatenomination system. In addition to evaluation of every candidate's qualifications ofeducation and experiences, it shall refer to the opinions of the stakeholders,comply with the "Rules for Director and Supervisor Elections" and the "CorporateGovernance Best-Practice Principles" in order to ensure the diversification andindependence of the board's members.Please refer to page 36 (Note 2) of the annual report for the fulfillment of thediversification for the board's members.
(II) Except for the establishment of the remuneration committee and the auditcommittee required by laws, the Company has established the "CSR WorkingTeam" to drive its corporate social responsibilities related affairs.
(III) The Company reports the business conditions at the board of director quarterly,and prepares the written information of the actual conditions and estimates for theCompany's filing and reference. The Company has established the "RegulationsGoverning the Board Performance Evaluation", and executes the board'sperformance evaluation once a year. Every three year, the Company will appoint
No deviation.
V
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Evaluation Item
Implementation Status (Note 1) Deviations from the Corporate Governance Best Practice
Principles for TWSE/TPEx Listed Companies and Reasons
Yes No Abstract Illustration
(IV) Does the Company evaluate the independence of the CPAs regularly? V
an external professional independent institution or a team of expert or scholar to perform the evaluation. 2018 evaluation result has been reported to the board of director on March 27, 2019. The evaluation's methods, standards and results are disclosed on the Company's website. Please refer to the Company's website: http://www.clevo.com.tw.
(IV) The Company has appointed the PWC Taiwan as the certificated accounting firm,who has its professionalism and independence for its certification. The Companyalso change the CPAs regularly according to laws to strengthen its independence.The Company evaluates the CPAs' independence annually, which will be reviewedand passed by the audit committee and then submitted to the board of director todiscuss/review the CPAs' independence, including assessing whether there is anyevent in violation of the Bulletin No. 10 of Professional Ethics Norm and Article 47of Certified Public Accountant Act, affirming that the Company has no otherfinancial benefits and business relationships with CPAs other than the fee of auditand tax, examining whether the CPAs are the Company's directors, managers,shareholders or have any salary received from the Company, and confirming thatthe CPAs are not the stakeholders. Upon the examination on the CPAs'independence evaluated by the Company, the CPA's independence is confirmed.The Company's board of director periodically evaluates (once a year) the CPAs'professional qualifications and independence (please refer to note 1 for thestandards of evaluation). The result of evaluation has been reviewed and passedby the board of director on March 27, 2019 to confirm the CPAs' professionalqualifications and independence.
IV. Does the TWSE/TPEx Company establish the exclusively (concurrently)dedicated department or persons to take charge of the corporategovernance related affairs (including but not limited to providing the information required by the directors and supervisors to perform their duties, conducting the board and shareholders' meeting related matters according to laws, handling the Company's registration and change of registration as well as preparing the meeting minutes for the board and the shareholders' meeting etc.)?
V The Company's finance office is responsible for handling the corporate governance related affairs. The chief of finance office serves as the person of the corporate governance concurrently. The main responsibilities and 2018 implementation are as follows:
Main Responsibilities 2018 Implementation Handled the Company's registration and change of registration.
The changes were approved in October 2018.
Handled the board and the shareholders' meeting related affairs, and assist in the Company's compliance with related regulations for the board and the shareholders' meeting.
Convened the board and the shareholders' meeting according to laws.
Prepared the meeting minutes for the board and the shareholders' meeting.
Prepared the meeting minutes according to laws.
Provided the information required by the directors and supervisors to perform their duties, as well as the latest development of laws relating to the Company's business to assist in the directors' and supervisors' compliance with laws.
Assisted in the independent directors and general directors to perform their duties, provided the necessary information as well as arranged the trainings of the corporate governance.
Handled the investor relations' related matters.
Held the investor conferences twice a year.
Other matters stipulated in the Article of Incorporation or the contract.
Performed completely.
No deviation.
V. Does the Company establish a communication channel and build adedicated section on its website for stakeholders, as well as handle allthe issues they care for in terms of corporate social responsibilities?
V Both the Company and the stakeholders have dedicated department to take charge of collecting the relevant information and communicate to each other. The Company has set up its website with the address of http://www.clevo.com.tw/ and has built the dedicated sections for investor relation and stakeholder respectively, which includes the Company's
No deviation.
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Evaluation Item
Implementation Status (Note 1) Deviations from the Corporate Governance Best Practice
Principles for TWSE/TPEx Listed Companies and Reasons
Yes No Abstract Illustration
related news and activities, corporate governance (including the Company's Corporate Social Responsibility Best Practice Principles), information of finance and stock affairs as well as the Company's contact methods. The investor relation department has dedicated person to respond the related issues.
VI. Does the Company appoint a professional stock agency to deal withshareholders' meeting affairs?
V The Company's stock affairs have appointed a professional stock agency, Transfer Agency Department of CTBC Bank, to handle the Company's shareholders' meeting affairs.
No deviation.
VII. Information Disclosure(I) Does the Company have a corporate website to disclose the financial
activities and the information of corporate governance?
(II) Does the company adopt other ways of information disclosure (e.g. buildingan English website, appointing dedicated person to collect and disclose the Company's information, implementing the spokesperson system and putting the course of investor conferences on the Company's website etc.)?
V
V
(I) The Company has set up its website with the address of http://www.clevo.com.tw/and has built a dedicated section for investor relation, which includes theCompany's related news and activities, information of corporate governance, theCompany's relevant rules as well as information of finance and stock affairs.
(II) The Company has not only implemented the system of spokesperson and deputyspokesperson, but also designated the dedicated person to collect and disclose theCompany's information, as well as has disclosed the information of the Company'sfinancial activities to the public investors through the Market Observation PostSystem, the investor conferences, the Company's website andnewspapers/magazines etc.. Please refer to the Company's website for details:http://www.clevo.com.tw/.
No deviation.
VIII. Is there any other important information to facilitate a betterunderstanding of the Company’s corporate governance practices(including but not limited to employee rights/benefits, employee caring, investor relations, supplier relations, rights of stakeholders, training of directors and supervisors, the implementation of risk management policies and risk measurement standards, the implementation of customer policies, and purchasing liabilities insurance for directors and supervisors)?
V (I) Employee Rights/Benefits: Upon the governmental laws and the Company's humanresources management rules, the Company provides various labor's basicconditions, including working hours mechanism and comprehensive leaves system,and also renders a stable and safe working environment, as well as reserves thebasic welfares of labor insurance, health insurance and pension fund. Besides, theemployees also possesses the regular health examination, group insurance andcomplete employee retirement measures.
(II) Employee Caring: The Company has established the Occupational Safety andHealth Committee according to laws, and studied the relevant regulations of safetyand health. In order to ensure the employees' safety and health, the Company hasestablished the "Occupational Safety and Health Policies", arranged the regularlectures and courses with various subjects, provided the doctors' consultation,opened the diversified channels for employees to express the opinions and toconsult as well as created a better participating feelings and a smooth two-waycommunications.
(III) Investor Relations: Protecting the shareholders' rights/benefits is the Company'sbiggest target. The Company gives equal treatment to all shareholders. Upon therelevant regulations, the Company's important messages, including finances,business and changes of the insiders' shareholding will be announced on theMarket Observation Post System immediately.
(IV) Suppliers Relations: In addition to the establishment of the "Codes of EthicalConduct", the new suppliers of the Company shall possess a well goodwill andmeet the Company's ethical demand upon the requirement of the internal controlsystem. Before tradng, it is required to sign the "Supplier Honesty Commitment" toforbid other beneficial acts other than normal transactions. The Company expectsto set a good example to lead more our supply partners to jointly enhance theawareness of environmental protection and aptly fulfill the corporate socialresponsibilities.
(V) Rights of Stakeholder: The Company complies with the “Corporate GovernanceBest-Practice Principles" to implement and set up a dedicated section on its websitefor stakeholders.
(VI) Implementation of Risk Management Policies and Risk Measurement Standards:Through the audit office and internal control system, the Company hasappropriately identified, assessed and reduced various business risks. In additionto controlling the day-to-day operational procedure, the audit office andmanagement team always supervise the risk control's implementation. Besides, the
No deviation.
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Evaluation Item
Implementation Status (Note 1) Deviations from the Corporate Governance Best Practice
Principles for TWSE/TPEx Listed Companies and Reasons
Yes No Abstract Illustration
Company has established the internal and external reporting system to reduce the unfavorable influences on the Company's business.
(VII) Implementation of Customer Policies: The Company has established the appropriate customer policies and business targets, and will timely adjust the business strategiesto achieve the targets.
(VIII) Purchasing Liabilities Insurance for Directors: The Company has purchased therelevant liabilities insurance for directors with the due date of June 15, 2020, andthe directors' liabilities insurance amount, the scope of coverage and insurancepremium have been reported to the board of director.
(IX) Directors' Attendance of the Board: The board has been held regularly and alldirectors actively participated in the meeting; the Company has declared theattendance of the directors timely on the websites.
(X) Trainings of the Directors and Managers:The Company's directors and independent directors have considerably understoodthe directors' power and functions, and they have plentiful background ofeducation and experiences as well as understanding of the industry to sufficientlyundertake the directors' responsibilities. The Company's directors and independentdirectors join the external trainings annually in relation to corporate governance,securities regulations and taxes. In addition, the Company sets up the dedicatedpersons to collect the relevant regulations and information, and then summarize tothe directors and the audit committee. Please refer to page 37 of the annualreport for the detail trainings of the Company's directors and managers in 2018.The directors' attendance and independent directors' sitting in the Company'sboard as well as the directors' trainings were disclosed on the Market ObservationPost System with the website of http://mops.twse.com.tw/mops/web/indexaccording to the regulations. with the website ofhttp://mops.twse.com.tw/mops/web/index according to the regulations.
IX. For the result of the corporate governance evaluation announced by the Corporate Governance Center of the Taiwan Stock Exchange Corporation in the most recent year, please explain the circumstances of theimprovement; and if the items have not yet been improved, please provide those items that shall be strengthened first and its measures.Upon the result of the corporate governance in 2018, the Company has specifically improved the following items:1. The Company has established the audit committee this year. (2.10)2. The Company has established a chief of corporate governance to take charge of the corporate governance related affairs, and has explained the operation of such department and its implementation status in theannual report and the Company's website. (2.21)3. The amendment of the "Regulations Governing the Board Performance Evaluation" which has been passed by the Company's board of director stipulates to perform the external evaluation at least every three year.(2.23)4. The Company's annual report voluntarily disclosed the non-audit fee amount and its natures. (3.15)5. Does the Company establish the policies to protect the human rights according to International Bill of Human Rights? (4.6)
(II) For those items that have not yet been improved, the items that shall be strengthened first and its measures are provided as follows:1. The English version of the meeting notification shall be uploaded synchronously before 30 days of the general meeting of the shareholders. (1.9)2. The English version of the meeting handbook and supplementaries shall be uploaded before 21 days of the general meeting of the shareholders. (1.10)3. The English version of the annual report shall be uploaded before 7 days of the general meeting of the shareholders. (1.11)4. Disclose the annual financial reports (including the financial statements and notes) in English. (3.5)5. Disclose the midterm financial reports (including the financial statements and notes) in English. (3.6)6. Does the Company's website or annual report disclose its ethical management policies and specify the methods and programs to prevent the unethical acts? (4.15)The Company continues to enhance the disclosure of its website's information and fulfill its corporate social responsibilities as well as speed up to reinforce the optimization of the relevant operations.
Note: Regardless of ticking "Yes" or "No", the implementation status shall be explained in the column of the abstract illustration.
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Note 1: Evaluation items for CPAs' professional qualifications and the independence:
Evaluation Item Yes No
1. Not an employee of the Company or its related party. V
2. Not a director or supervisor of the Company or its affiliates (however, it is not applicable in case the person is an independent director of the Company, its parent company, or subsidiaries in
which the Company holds more than 50% of the voting shares directly or indirectly).
V
3. Not a director, supervisor, or employee of a corporate shareholder who directly holds 5% or more of the total number of outstanding shares of the Company, or who holds shares ranking in
the top five holdings.
V
4. Not having a marital relationship, or a relative within the second degree of kinship to any other director of the Company. V
5. Not having one of the circumstances stated in Article 30 of the Company Law. V
6. Not a governmental, juridical person or its representative as defined in Article 27 of the Company Law. V
7. Not a person who should not serve as the Company's director, manager or a position that has significant influences on the auditing project within the latest two years. V
8. Not a person who should not involve in the Company's management functions for making decisions. V
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Note 2: Evaluation items for the diversification of the board's members
Dimension I: Experiences Background 2018.12.31
Name of Director Sex Professional
Background
Professional
Techniques
Industrial
Experiences
Hsu, Kun-Tai Male V V V
Tsai, Ming-Hsien Male V V V
Chien,Yih-Long Male V V V
Chou, Po-Chiao
(Independent Director) Male V V V
Chen,Tsung-Ming
(Independent Director) Male V V V
Fan, Kuang-SUNG
(Independent Director) Male V V V
Dimension I: Overall Capability 2018.12.31
Name of Director Sex
Capability for
judging the
business.
Capability for
analyzing the
accounting and
finance.
Capability for
business
management.
Capability for
dealing with
risks.
Industrial
knowledge.
International
market
viewpoint.
Capability of
leadership.
Capability for
making decision.
A Judge, Public Prosecutor,
Attorney, CPA, or Other
Professional or Technical
Specialist Who Has
Passed a National
Examination and Has Been
Awarded a Certificate in
a Profession Necessary for
the Business of the
Company
Hsu, Kun-Tai Male V V V V V V V V
Tsai, Ming-Hsien Male V V V V V V V V
Chien,Yih-Long Male V V V V V V V V
Chou, Po-Chiao
(Independent Director) Male V V V V V V V V V
Chen,Tsung-Ming
(Independent Director) Male V V V V V V V V
Fan, Kuang-SUNG
(Independent Director) Male V V V V V V V V
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Note 3: The directors' and supervisors' trainings as well as managers' participation in the education and trainings of corporate governance are as follows:
Title Full name
Date of Education
Host Institution Name of Course
Number of Hours
of Education From To
Chairman Hsu, Kun-Tai November 14, 2018 November 14, 2018 Taiwan Corporate Governance Association
Strategy for Enterprise Management and News Risk Management 3
How Directors Make Decisions to Avoid Breach of Trust and Irregular Transactions
3
Vice Chairperson and President
Tsai, Ming-Hsien November 14, 2018 November 14, 2018 Taiwan Corporate Governance Association
Strategy for Enterprise Management and News Risk Management 3
How Directors Make Decisions to Avoid Breach of Trust and Irregular Transactions
3
Director and Executive Vice President
Chien,Yih-Long November 14, 2018 November 14, 2018 Taiwan Corporate Governance Association
Strategy for Enterprise Management and News Risk Management 3
How Directors Make Decisions to Avoid Breach of Trust and Irregular Transactions
3
Independent Director Chou, Po-Chiao
July 20, 2018 July 20, 2018 Securities & Futures Institute
Seminar to Propagate the Compliance with Laws for Insiders
Shareholding Trading of Public Companies and Non-Public
Companies
3
July 27, 2018 July 27, 2018 Taiwan Corporate Governance Association Tax Issue Before and After Enterprise's Merger 3
September 27, 2018 September 27, 2018 Taiwan Academy of Banking and Finance Seminar for Corporate Governance and Enterprise Sustainable Operation
3
November 14, 2018 November 14, 2018 Taiwan Corporate Governance Association
Strategy for Enterprise Management and News Risk Management 3
How Directors Make Decisions to Avoid Breach of Trust and Irregular Transactions
3
Independent Director Fan,
Kuang-SUNG November 14, 2018 November 14, 2018 Taiwan Corporate Governance Association
Strategy for Enterprise Management and News Risk Management 3
How Directors Make Decisions to Avoid Breach of Trust and Irregular Transactions
3
Independent Director Chen,Tsung-Ming November 14, 2018 November 14, 2018 Taiwan Corporate Governance Association
Strategy for Enterprise Management and News Risk Management 3
How Directors Make Decisions to Avoid Breach of Trust and Irregular Transactions
3
Senior Vice President and Chief of Accounting
Yu, Tien-Jung November 14, 2018 November 14, 2018 Taiwan Corporate Governance Association
Strategy for Enterprise Management and News Risk Management 3
How Directors Make Decisions to Avoid Breach of Trust and Irregular Transactions
3
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(IV) If the Company has established the remuneration committee, its composition,responsibilities and operations shall be disclosed:
1. Information for Members of Remuneration Committee:
Type of Identity
(Note 1)
Criteria
Full name
Have at Least Five Years Work Experience
and Meet the Following Professional Qualification
Independence Criteria (Note 2)
Number of Other Public Companies in
Which the Individual is Concurrently Serving as an Remuneration
Committee Member
Remark
An Instructor or Higher Position in a Department of Commerce, Law, Finance, Accounting, or Other Academic Department Needed by the Business of the Company in a Public or Private Junior College, College or University
A Judge, Public Prosecutor, Attorney, CPA, or Other Professional or Technical Specialist Who Has Passed a National Examination and Been Awarded a Certificate in a Profession Needed for the Business of the Company
Have Work Experience in the Areas of Commerce, Law, Finance, or Accounting, or Otherwise Needed for the Business of the Company
1 2 3 4 5 6 7 8
Other- Convener of Remuneration Committee
Chou, Po-Chiao V V V V V V V V V 1 None
Other- Member of Remuneration Committee
Chen,Tsung-Ming V V V V V V V V V 0 None
Other- Member of Remuneration Committee
Fan, Kuang-SUNG
V V V V V V V V V 0 None
Note 1: For type of identity, please fill in the director, independent director or other.
Note 2: Please tick “” on the following blank space of the corresponding criteria that apply to the members during the two years prior to being
elected or during the term of office.
(1) Not an employee of the Company or any of its affiliates.
(2) Not a director or supervisor of the Company or its affiliates. However, it is not applicable in cases where the person is an independent
director of the Company, its parent company, or any subsidiary, which is established according to the Laws or the local laws of the country.
(3) Not a natural-person shareholder who holds shares, together with those held by the person’s spouse, minor children, or held by the person
under others’ names, in an aggregate amount of 1% or more of the total number of outstanding shares of the Company or ranking in the
top 10 in holdings.
(4) Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship, of any of the persons in the
preceding three subparagraphs.
(5) Not a director, supervisor, or employee of a corporate shareholder who directly holds 5% or more of the total number of outstanding shares
of the Company or who holds shares ranking in the top five holdings.
(6) Not a director, supervisor, manager, or shareholder holding 5% or more of the shareholding, of a specified company or institution which has
a financial or business relationship with the Company.
(7) Not a professional individual who, or an owner, partner, director, supervisor, or manager of a sole proprietorship, partnership, company, or
institution that, provides commercial, legal, financial, accounting services or consultation to the Company or to its affiliate, or a spouse thereof.
(8) Not having one of the circumstances stated in Article 30 of the Company Law.
V
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2. Responsibilities of Remuneration Committee
I. The Committee shall be based on the care of a prudent administrator to faithfully fulfill thefollowing duties, and shall submit its suggestions to the board of director for discussion;however, if the suggestion for the remuneration of supervisors is submitted to the board ofdirector for discussion, it shall be limited to where the supervisors' remuneration has beenspecified in the Article of Incorporation, or where the resolution of the shareholders' meetingdelegated the board of director to conduct:(I) Regularly review the "Remuneration Committee Charter" and provide the
recommendation of the amendment.(II) Establish and regularly review the annual and long-term performance goals of the
Company's directors, supervisors and managers, as well as the policies, systems,standards and structure of the remuneration.
(III) Regularly evaluate the achievement status for the performance goals of theCompany's directors, supervisors and managers, and set up its individual contentsand amounts of the remuneration.
II. While fulfilling the duties stated in the preceding paragraph, the Committee shall complywith the following principles:(I) Ensure the arrangement of the Company's remuneration comply with the relevant
laws and it is sufficient to attract the excellent talents.(II) The performance evaluation and remuneration of the directors, supervisors and
managers shall refer to the normal standards of remuneration in the same industry,and consider the person's time involved, duties taken, achievement of personal goal,expression of other positions taken, the same positions' remuneration paid by theCompany in the recent years, as well as the achievement of the Company's short-term and long-term goals and financial conditions etc., to evaluate the correlativereasonableness for the personal expression, the Company's business performanceand future risks.
(III) The Committee shall not lead the directors and managers to pursue the remunerationby engaging the acts which have the risks that the Company is unable to bear.
(IV) The ratio of bonus for the short-term performance of the directors and seniormanagers and the time to pay for partial variable remuneration shall bedetermined upon the characteristics of the industry and the nature of the Company'sbusiness.
(V) The members of the Committee shall not be involved in the discussing and voting thedetermination of their personal remuneration.
III. The remuneration stated in the preceding two paragraphs includes cash remuneration, stockoptions, profit sharing and stock ownership, retirement benefits or severance pay, varianceallowances and other substantive incentive measures; its scope shall be consistent with theregulations for the remunerations of the directors, supervisors and managers stipulated inRegulations Governing Information to be Published in Annual Reports of Public Companies.
IV. If the decision-making and handling of the remuneration for the directors and managers ofthe Company's subsidiaries are delegated to the subsidiary but required the ratification ofthe Company's board, the Committee shall be asked to provide the suggestion first, and thensubmit to the board for discussion.
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3. Operation of the Remuneration Committee(1) There are 3 members in the Company's remuneration committee.(2) The term of office for the members: from June 25, 2018 to June 14, 2021. The
remuneration committee held 2 meetings (A) in the most recent year. Thequalification and attendance of the members are as follows:
Title Full nameAttendanc
e in Person (B)
By Proxy
Attendance Rate (%)
(B/A) (Note)
Remark
Convener Chou, Po-Chiao 1 0 100% New Assumed on June 25, 2018
Member Chen,Tsung-Ming 2 0 100% Re-elected on June 25, 2018
Member Fan, Kuang-SUNG 2 0 100% Re-elected on June 25, 2018
Member You, Chao-Tang 1 0 100% Dismissed on June 15, 2018
Other mentionable items: I. If the board of director declines to adopt or modifies the suggestions of the remuneration
committee, it should specify the date of the board, session, contents of motion, resolution ofthe board of director, and actions taken by the Company for the remuneration committee’sopinions (e.g. the remuneration passed by the Board of Director is better than the suggestionsof the remuneration committee, the circumstances and causes for the difference shall bespecified): No such circumstance in the year.
II. If any resolution of the remuneration committee was objected by or subject to a qualifiedopinion from any member with record or written statement, the date of the meeting of theremuneration committee, session, contents of motion, all members’ opinions and actions takenfor the members’ opinions shall be specified: No such circumstance in the year.
III. The Company's board of director has passed the establishment of the "RemunerationCommittee Charter" on December 13, 2011 and passed the Company's 4th term of the"employment of the members of the remuneration committee" on June 25, 2018.
IV. The content of the Charter has been put on the Company's website and the MarketObservation Post System for reference. The Company's website is https://www.clevo.com.tw/Upload/InfoFile/Remuneration Committee Charter-1070327.pdf
Note: (1) If a member of the remuneration committee resigns before the end of year, the date of resignation
shall be noted in the column of remark. The ratio of the attendance in person (%) shall be countedby the number of the meeting of the remuneration committee in the period of service and suchmember's actual number of attendance in person.
(2) If the remuneration committee is re-elected before the end of year, both new and old members ofthe remuneration committee shall be filled in, and the information that such member is an old or anew member as well as the date of re-election shall be noted in the column of remark. The ratio ofthe attendance in person (%) shall be counted by the number of the meeting of the remunerationcommittee in the period of service and such member's actual number of attendance in person.
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Summary Table of the Meetings Record for the Remuneration Committee:
Number of Meetings
Number of Meetings This
Term
Date of Notification Date of Meeting Explanation of Subject
Chao-Tang You (Dismissed on
June 15, 2018) Chen,Tsung-Ming
Fan, Kuang-SUNG
Chou, Po-Chiao
(New Assumed on June 15,
2018)
AttendANCE Without Voting
Rights
1 9 January 18, 2018 February 11,
2018 Review the Company's year-end bonuses of the managers for the year of 2018. V V V Yu, Tien-Jung Lan, Bo-Yu
2 1 March 13, 2019 March 27, 2019 Review the Company's appropriated amount for the remuneration of the directors and supervisors as well as compensation of the employees for the year of 2018. V V V
Yu, Tien-Jung Lan, Bo-Yu
Number of Meetings
Number of Meetings This
Term
Date of Notification
Date of Meeting Explanation of Subject Chou, Po-Chiao Chen,Tsung-Ming
Fan, Kuang-SUNG
AttendANCE Without Voting
Rights
1 2 January 8, 2019 January 18, 2019
Review the Company's year-end bonuses of the managers for the year of 2018. V V V Yu, Tien-Jung Lan, Bo-Yu
2 3 March 13, 2019 March 27, 2019 Review the Company's appropriated amount for the remuneration of the directors and supervisors as well as compensation of the employees for the year of 2018.
V V V Yu, Tien-Jung Lan, Bo-Yu
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(V) Fulfillment Status of the Social Responsibilities:
Evaluation Item
Implementation Status (Note 1) Deviations from the Corporate Social Responsibility Best
Practice Principles for TWSE/GTSM Listed Companies
and Reasons
Yes No Abstract Illustration (Note 2)
I. Implementation of Corporate Governance(I) Does the Company establish the corporate social
responsibilities policies or system, and review its effectiveness of implementation?
(II) Does the Company arrange the regular education ortraining for the social responsibilities?
(III)Does the Company set up the exclusively (concurrently)dedicated department to drive its corporate socialresponsibilities, and the board of director delegate thesenior management level for handling, as well asreport to the board of director its implementation status?
V
V
V
(I) In order to fulfill the corporate social responsibilitiesand help forward the progress of the economics,environment and society to achieve the goal of thesustainable development, the Company has establishedthe "Corporate Social Responsibilities Best PracticePrinciples" for compliance.Please refer to page 42 to page 51 for the specificimplementation effectiveness.
(II) The Company's training department arranges variouscourses of education or training regularly and sets upthe credit system. The certain credit points shall beobtained for the promotion of the position.
(III) In order to fulfill the concepts of the sustainablebusiness, in 2016, we began to aim at the managementof sustainability subjects to set up a concurrently"Corporate Social Responsibilities (CSR) Working Team"and the president is the convener. The managementcenter is responsible for driving the related operation'sexecution. And the board of director has delegated thesenior management level to deal with the relevantmatters and the senior management level shall reportthe execution status to the board of director annually.The working team is divided into 5 fields according tothe subjects and is constructed by the suitable functionalmanagerial staffs and employees from eachdepartment, as well as hold the meeting regularly fordiscussion. The CSR working team is responsible formanaging and executing the CSR policies and activitiesfor Clevo Co., as well as preparing annual CSR reportand publishing related matters.
(1) Corporate Governance Team: Take charge of the
No deviation.
-42-
Evaluation Item
Implementation Status (Note 1) Deviations from the Corporate Social Responsibility Best
Practice Principles for TWSE/GTSM Listed Companies
and Reasons
Yes No Abstract Illustration (Note 2)
(IV) Does the Company establish thereasonablecompensation policies, integrate the system ofthe employees' performance evaluation and the policiesof its corporate social responsibilities, as well as set upexplicit and effective systems of reward and punishment?
Company's operation governance and finance related matters, including corporate governance, ethical management and compliance with laws etc.
(2) Employee Care Team: Take charge of theemployees' rights/benefits, education/trainings andcompliance with labor laws.
(3) Social Caring Team: Take charge of the corporateimages, community participation and dealing withappeal.
(4) Product Environment Team: Take charge of productlash, research/develop the green products and planthe policies and activities relating to environmentalmanagement for Clevo Co.
(5) Customer Caring Team: Take charge of productresponsibilities, maintaining the customer relationshipand protecting the consumers' rights/benefit.
(IV) Established according to Article 26 of the Article ofIncorporationContinue to arrange the training and propagationrelating to corporate social responsibilities for theCompany's senior managerial staffs and employees,including labors, environment, health and safety,energy-saving and ethical norms, to enhance theirawareness of social responsibilities.
II. Develop the Sustainable Environment(I) Does the Company endeavor to utilize all resources more
efficiency, and use the renewable materials that have less impact on the environment?
V (I) Upon the requirement of environmental protection fromenergy-savings, for research and development of thenew computers, the Company continually innovates newtechnology to reach the purpose of energy-saving, andhas passed the certification of Energy Star 5.0. TheEnergy Star 5.0 has taken effect since July 1, 2009.Besides, the Company has also complied with variousinternational standards for environmental protection,
No deviation.
V
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Evaluation Item
Implementation Status (Note 1) Deviations from the Corporate Social Responsibility Best
Practice Principles for TWSE/GTSM Listed Companies
and Reasons
Yes No Abstract Illustration (Note 2)
(II) Does the Company establish the suitable environmentalmanagement systems upon its industrial characteristics?
(III) Does the Company pay attention to the influences ofclimate changes on the business activities, and perform the examination of the greenhouse gases, as well as establish its policies for saving the energy and reducing the greenhouse gases?
V
V
such as Restriction on Hazardous Substances (RoHS) and Waste Electrical and Electronic Equipment (WEEE). Also, it has effectively reduced the production and emission of the toxic materials in the process of production to fulfill the environmental protection and advocate the green technology.
(II) The Company has classified the wastes according tolaws. The management department collects thehazardous wastes, and then appoints the qualifiedwaste handlers to process. The recyclable wastes areclassified and recycled by every factory, and then aresold out or reused. The recyclable food wastes arerecycled and processed by the certificated handlers. For the industrial waste water, the waste water recycling hasbeen set up to save the water resources. Other rubbishfrom general life is handled by the environmentalprotection institution of the local government to utilizevarious resources more efficiently and reduce the impacton the environment step by step.
(III) 1. Make the posters in elevators and proclaim the
environmental related issues with the electronic ticker.2. Encourage the colleagues to take the public
transportation system to go to work.3. Stick large-scale poster in the gallery of the ground
floor of the building, and plant the vegetationinternally and externally to beautify the environment.
4. The Company has examined the Taipei headquarter'sgreenhouse gases annually since 2015.The Electricity is the major energy consumption for theCompany, so saving in the electricity consumption isan important link of the energy management forClevo Co. In 2017, the Taipei headquarter buildinghas been completely set up the smart meters at the
-44-
Evaluation Item
Implementation Status (Note 1) Deviations from the Corporate Social Responsibility Best
Practice Principles for TWSE/GTSM Listed Companies
and Reasons
Yes No Abstract Illustration (Note 2)
main transformer room, central air conditioning room, pumping station and each floor's distribution board. Through accurate digital indication, any unusual circumstance of electricity consumption from every electricity meter will be reported back immediately by the network system so as to control and monitor the consumption of electricity. Besides, we usually conduct the energy-savings and carbon-reduction in details through the following management measures: (1) After turning on the electrical equipments, it is
better to avoid leaving idle. After completing thejobs, the power shall be turned off.
(2) When leaving the working places, the variouslightings shall be turned off in order to save theelectricity.
(3) The temperature of the air conditioner shall becontrolled within 26℃ in the summer and 20℃ inthe winter, and it is forbidden to use airconditioner and open window simultaneously.
(4) When the persons do not proceed the productionactivities in the suspended (disconnected)production places, the lighting shall be turned off.
(5) New expansion project shall try its best to use theenergy-saving equipment.
(6) After getting off duty, the office supplies, such aspersonal computer, shall be turned off.
(7) Execute the requirement for recycling theequipments' lubricants and waste oil strictly, andfulfill the saving in oil used reasonably.
(8) The generator can only be used in the situation ofpower failure or insufficient supply of the mainselectricity to reduce the use of diesel fuel.
(9) Propagate the concept of petrol-saving to the
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Evaluation Item
Implementation Status (Note 1) Deviations from the Corporate Social Responsibility Best
Practice Principles for TWSE/GTSM Listed Companies
and Reasons
Yes No Abstract Illustration (Note 2)
drivers of the official vehicles. (10) Install the solar panels on the roof. The
aggregated electricity generation from the solarpanels installed was 156,134 kWh as the end ofthe year (end of 2018). The emission of thegreenhouse gases was reduced 104,423kgCO2e.
III. Safeguard the Society's Public Welfare(I) Does the Company establish the relevant management
policies and procedures according to relevant regulations and International Bill of Human Rights?
(II) Does the Company establish the appealing mechanismsand channels for employees, and deal with them properly?
(III) Does the Company provide the employees a safe andhealthy working environment, and arrange the regular trainings relating to safety and health?
V
V
V
(I) The Company complies with relevant labor laws toprotect the employees' legal rights/interests, andrespects the basic labor human rights principlesacknowledged internationally, including freedom offorming associations, rights of group negotiation,caring disadvantaged, prohibition of child labor,eliminating various type of unfree labor and theemployment discrimination etc., without thecircumstances to hurt the labors' basic rights. Theemployment policies of the Company have nodiscrimination against sex, race, marriage and familyconditions to fulfill the equality on compensation,employment conditions, training and promotionopportunities.
(II) The dedicated department for employees' appealingis the human resource department.
(III) 1. Arrange the health promotion activities to increasethe colleagues' healthiness and prevent thediseases.
2. Arrange the courses of the health lectures regularlyto enhance the colleagues' healthy awareness andhealthy behaviors.
3. Arrange the safety and health trainings for newand existing labors to teach the colleagues toprevent the occupational diseases and have the
No deviation; The relevant activities are continually moving the progress.
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Evaluation Item
Implementation Status (Note 1) Deviations from the Corporate Social Responsibility Best Practice Principles for
TWSE/GTSM Listed Companies and Reasons
Yes No Abstract Illustration (Note 2)
(IV) Does the Company establish the regular communicationmechanisms with employees, and notify the probable significant influences of the operational changes on employees in an appropriate way?
(V) Does the Company establish the effective trainingprograms of the career capability development for its employees?
(VI) Does the Company establish the related policies andcomplaint procedures to protect the consumers' rights/interests upon the flow of research/development, procurement, production, operation and service?
(VII) For the marketing and signs of the products and services, does the Company comply with the relevant
V
V
V
V
awareness of safety. 4. Arrange the trainings for fire fighting and first aid
regularly to enhance the general sense of thefire-fighting and the ability to deal with emergency.
5. Enhance the quality of working environment for employees, carry out 5S training, arrange the factory's self-evaluation and auditing activities for 5S.
6. Arrange the propagation to inform the injury andpromote the safety for the contractor, maintain thequality of construction and enhance the safety ofthe operational places for colleagues.
(IV) The Company holds the operational meeting regularlyto publicize the Company's operational conditions andbuild up better channels of communication withemployees.
(V) According to business strategy and policies as well asfunctional development maps, the Companyestablishes the annual training programs that aresuitable for each level and continually arrange varioustrainings and propagations.
(VI) The Company sets up the dedicated after-salesdepartment to strengthen the relationship withcustomers and satisfy the customers' demands.The Company comprehensively implements andcomplies with the regulations for the protection of theconsumers' rights/interests, and satisfaction of thecustomers is one of the Company's important strategies.
(VII) The Company complies with the relevant regulationsand international standards for handling.
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Evaluation Item
Implementation Status (Note 1) Deviations from the Corporate Social Responsibility Best Practice Principles for
TWSE/GTSM Listed Companies and Reasons
Yes No Abstract Illustration (Note 2)
regulations and international standards? (VIII) Before trading with a supplier, does the Company
evaluate if such supplier has any historical record ofinfluences on environment and society?
(IX) Do the contracts between the Company and its majorsuppliers contain the clauses to terminate at any timeor dissolve the the contract in case the suppliersviolate its corporate social responsibilities policies,and have significant influences on the environmentand society?
V
V
(VIII) The Company has good cooperative relationship withthe suppliers. In the future, we will be able tocooperate to promote the corporate socialresponsibilities jointly.
(IX) The Company's external contracts are negotiated bythe Company's legal office. The Company has absolute rights of negotiation.
IV. Enhancing Information Disclosure(I) Does the Company disclosure the relevant and reliable
information relating to its corporate social responsibilities on its website and the Market Observation Post System?
V The Company continually cares about its disclosure for the information relating to its corporate social responsibilities, and specify its policies and norms relating to its corporate social responsibilities according to relevant regulations of the competent authority. And its policies of the corporate social responsibilities are announced on its website to disclose to the public. The Company's website: http://www.clevo.com
The Company will comply with relevant laws and principles for handling.
V. If the Company established its corporate social responsibilities principles upon the "Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies", please specify its implementation and deviation from its principles established:The Company has established the "Corporate Social Responsibilities Best Practice Principles" and the board of director has passed it on March 27, 2015. According to the relevant regulations of its principles, all chiefs of departments and colleagues are actively complying with this principles to drive the corporate governance, develop the sustainable environment and safeguard the society's public welfare. There is not deviation from its principles established.VI. Other important information to facilitate a better understanding of its corporate social responsibilities practices:
1. Material Natural Disasters and Other Donations:
Year Note Amount Put In (Unit: NT$)
2016 Sponsored the advertisement to the Alumni Association of National Taipei University of Technology
30,000
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Evaluation Item
Implementation Status (Note 1) Deviations from the Corporate Social Responsibility Best Practice Principles for
TWSE/GTSM Listed Companies and Reasons
Yes No Abstract Illustration (Note 2)
Donated to the Management Institute in Taipei to print the essence of the public welfare lecture for "Hua Tuo" health anti-cancer
200,000
Bureau of Social Affairs, Taiwan City Government - Tainan Earthquake
3,000,000
Donated the Jia-yi Charitable Group in Chiayi City to construct infrastructure - building up the bridges and paving the roads
20,000
2017 Donated the Taiwan cHancer New Life Association 10,000
Donated the Caring Disadvantaged Individuals Association 10,000
Donated the Jia-yi Charitable Group in Chiayi City to construct infrastructure - building up the bridges and paving the roads
20,000
Donated the Xianse Temple in Sanchong District, New Taipei City 100,000
Donated the Liver Disease & Treatment Research Foundation 199,000
2018 Sanchong District Office, New Taipei City 49,500
Fire Department, New Taipei City Government 150,000
Hualien Social Assistance Account 3,000,000
Management Institute in Taipei 100,000
Jia-yi Charitable Group in Chiayi City 20,000
Genesis Social Welfare Foundation 10,000
Decorated and Designed the Daxian Library, NCCU 1,000,000
Liver Disease & Treatment Research Foundation 391,500
Total 8,310,000
2. Upon the spirit of put itself in other's position, the Company cooperated with the Land Bank of Taiwan to sign a Public Welfare Trust Account with NT$10 million to give an impetus to the social public welfare activities, which is paid in installments for five years.
3. Society Co-Prosperity
(1) Open up the employee canteen: There were 10,874 person-time from community's neighbors and nearby office building's persons in 2018 to have mealat the Clevo's employee canteen
(2) Philanthropies are free to set up stalls: Up to now, there are "Children Are Us Foundation", "Down syndrome Foundation", "Foundation for AutisticChildren and Adults in Taiwan" and "Gofe Sheltered Workshop" etc. to set up stalls for selling. Up to the end of 2018, the Company has set up 5
-49-
Evaluation Item
Implementation Status (Note 1) Deviations from the Corporate Social Responsibility Best Practice Principles for
TWSE/GTSM Listed Companies and Reasons
Yes No Abstract Illustration (Note 2)
sessions of the stall activities.
(3) Clevo Building Ubike Operation Station: 2018 statistics: the number of times used was 41,564, which reduced the carbon dioxide emissions by 4,156kg/CO2 and was equivalent to plant 4,618 trees.
(4) Blood Donations:Come With Clevo to Help Others: In 2018, the Clevo cooperated with the Taiwan Blood Services Foundation to jointly arrange theactivity of "Healthy Blood Donations, Unlimited Enthusiasms" in the square of front side of the Clevo Building Hall, and invited its employees, nearbycompanies (Hongwell Group, DHL Supply Chain and IBASE Technology Inc.) as well as neighbors to participate. In 2017, there were 92 person-times tojoin the blood donation activities; total blood donated was 122 bags and total blood volume was 30,500 cc. In 2018, there were 2 blood donationactivities; total blood raised was 222 bags.
(5) Execution the Environmental Protection Day-to-Day: the computers, monitors and keyboards which are written off by employees will be sorted out theones with normal appearance and usable functions to donate to the Green Miracle Public Welfare Platform. The total donations in 2018 were 5 units of computer mainframe, 84 units of notebook, 17 units of LCD monitor and 1 set of keyboard and mouse.
(6) Love Earth By Using Eco-Friendly Tableware: Since December 2017, every employee has received the eco-friendly tableware set and 333 exercisemug. Since 2018, every new employee has received the eco-friendly tableware set and 333 exercise mug when they were on board.
(7) Recycling Rubbish: In response to the government's spirit for classifying rubbish, the Clevo usually uses the slogans and bulletins to remind the colleaguesto classify the rubbish. Every floor of Taipei headquarter sets up the dedicated area for recycling the resources. The Buddhist Compassion Relief Tzu Chi Foundation will bi-weekly collect the papers, plastics containers, waste batteries and packaging materials for recycling in order to reduce the rubbish.And the Tzu Chi will transform the recycled rubbish into resources. The Clevo's income from selling the recycled resources will be fully donated to the Tzu Chi for the purpose of charitable public welfare. In the latest 3 years, the incomes from selling the recycled resources are NT$89,100, NT$90,000 andNT$90,000 in 2016, 2017 and 2018 respectively.
4. 2018 Highlight Projects and Performances:
(1) Disaster Prevention Cooperated by Private Enterprise and Government - The Clevo has signed the cooperation memorandum of enterprise disaster preventionwith the Sanchong District Office. In view of the pubic welfare and social responsibilities, the Clevo shows its administrative organization and enterprise energyto assist the neighbor communities in promoting the sustainable efficiency of self-help and mutual-help, enhance its enterprise images and aptly fulfill its socialduties in a better manner, that can be an example for governments, enterprises and the partners of disaster prevention in the communities. The cooperated items include:A. Supported the Backup Center of the Emergency Operation Center in Sanchong District.B. Supported the hardware facilities to the Disaster Forward Command Post in Sanchong District.C. Supported the staple merchandises for Disaster Prevention Park in Sanchong District.D. Donated the smoke alarms.
(2) Donated the GUI invoices to the Genesis Social Welfare Foundation; total 857 pieces of the GUI invoices were raised in 2018.
(3) Donated 500 units of smoke alarms to the Fire Department of the New Taipei City.
-50-
Evaluation Item
Implementation Status (Note 1) Deviations from the Corporate Social Responsibility Best Practice Principles for
TWSE/GTSM Listed Companies and Reasons
Yes No Abstract Illustration (Note 2)
(4) Visually Impaired Massage For Employee - The Company sympathizes the colleagues' toil and exalts its corporate social responsibilities, so one visuallyimpaired masseur/or masseuse was set in every Friday afternoon originally to provide the body massage for all colleagues. Because this activity wasresponded enthusiastically, another schedule for massage has been increased in every Tuesday afternoon since February 2018 in order to enhance theemployees' welfare, look after the disadvantaged, provide employment opportunity and aptly fulfill its corporate social responsibilities.
(5) Promotion Activity for Visually Impaired Massage - In order to increase the employment opportunities for the disabled persons, cooperate to the DisabilitySection of the Labor Affairs Bureau of the New Taipei City and promote the Visually Impaired Massage Station, the Company specially held this promotionactivity for visually impaired massage.
(6) Caring For Employees' Health of Body and Mind: In order to enhance the employees' Welfare, the Company has set up the professional sports equipments forthe use of employees to encourage employees to care for themselves' health and form a habit of exercise. The Company totally purchased one professionalbusiness-use treadmill, one spinning bike and one top massage chair for the use of all colleagues.
(7) Increase Employees Welfare: Made new short-sleeved employee uniforms: select the functional cloth which is perspirable and ventilating, emphasize cutting and comfort to make the new short-sleeved employee uniforms.
(8) Caring For Employee: Held year-end employee purchase preferential activity for LEAX limited products: Clevo employee purchased 54 units of earphones and 34 units of horns. Affiliates employee purchased 39 units of earphones and 17 units of horns.
(9) The Company cares for employees by providing the colleagues the free of charge of coffee as well as comfortable environment so that the colleagues can dulyrelease their pressure in the work. Daily average number of cups was 260 cups.
(10) 2018 Year-End Delivering the Warmness: Solicit and donate clothes - In order to care for the disadvantaged, the Company solicited a total 15 cartons of theclean and no broken old clothes and donated to 3 charitable public welfare groups respectively: Yilan County AGAPE Care Association, Taipei City MentalRehabilitation Family Association and New Job Social Service Center.
The aforesaid affairs and results relating to the corporate social responsibilities will be disclosed on the Company's website regularly. VII. If the Company’s report on corporate social responsibility has met the certification criteria of the relevant notified body, a description is required: The Corporate
Responsibility Report for 2017 was issued by PwC Taiwan on August 31, 2018 in accordance with GRI4.0.
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(VI) Ethical Corporate Management and Measures:Ethical corporate management by the Company is as follows:
Evaluation Criteria
Implementation Status (Note 1) Difference from Ethical Corporate Management Best
Practice Principles for TWSE/GTSM Listed Companies
and reasons
Yes No Abstract Illustration
I. Develop the Policies and Programs for Ethical CorporateManagement
(I) Has the Company expressed its policies and practices forethical corporate management in its regulations and external documents, as well as the commitment of the Board of Directors and management to actively implement ethical corporate management?
(II) Has the Company developed a plan to prevent dishonesty, and specify operating procedures, behavioral guidelines, disciplinary and grievance systems for violations in each program, and put them in place?
(III) Has the Company taken preventive measures against thebusiness activities with high risk of dishonesty described in the second paragraph of Article 7 of the Ethical
V
V
V
(I) In order to align the Company's directors andmanagers with ethical standards, and to make theCompany's stakeholders more aware of its ethicalstandards, the Company has formulated theCodes of Ethical Conduct, Ethical CorporateManagement Best Practice Principles, and theProcedures for Ethical Management andGuidelines for Conduct.According to the systems for director’s avoidanceof conflict of interest set out in the ProceduralRules of the Board of Directors Meetings, formatters that are of interest to a director or thelegal person he/she represents, and that areharmful to the interests of the Company, thedirector shall not participate in the discussions forand voting on those matters.
(II) The Procedures for Ethical Management andGuidelines for Conduct have been established inaccordance with the business philosophy andpolicies of the Company's Ethical CorporateManagement Best Practice Principles, andreported to the shareholders' meeting. The current practice is based on the spirit of the Proceduresfor Ethical Management and Guidelines forConduct. The Company has specifically notified its personnel of the matters to which attention shouldbe paid to in the transaction of business.
(III) The precautionary measures against offering andaccepting bribes, and providing illegal politicaldonations have been adopted in the Company's
No deviation.
-52-
Evaluation Criteria
Implementation Status (Note 1) Difference from Ethical Corporate Management Best
Practice Principles for TWSE/GTSM Listed Companies
and reasons
Yes No Abstract Illustration
Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies or within the scope of other business activities?
Procedures for Ethical Management and Guidelines for Conduct. The Company's administrative management center, in addition to amending the Procedures for Ethical Management and Guidelines for Conduct, is put in charge of supervising the implementation thereof.
I. Implementation of Ethical Corporate Management(I) Does the Company assess the integrity records of the
counter parties, and specify the terms of good faith in itscontracts with the counter parties?
(II) Has the Company set up a special (part-time) positionunder the Board of Directors that promotes ethicalcorporate management, and reports to the Board ofDirectors on a regular basis?
V
V
(I) In addition to complying with the Company'sProcedures for Ethical Management andGuidelines for Conduct, when entering into acommercial contract with other parties, in addition to fully understanding their status about ethicalcorporate management, the contract shall beperformed in good faith; Before signing acontract, ethical corporate management will beincluded in the terms of the contract if theCompany deems it necessary subject toamendments thereto in light of the type of thecontract.
(II) The dedicated department to drive theCompany's ethical manage is the managementcenter, who shall cooperate with audit office toestablish the relevant regulations. And thepresident will act as convener to handle theamendment, implementation, explanation andconsultative services for the "Procedures forEthical Management and Guidelines for Conduct"as well as announce its contents, registration andfiling etc., and shall supervise its implementation.The dedicated department shall annually reportto the board of direct for its implementationstatus.Provide a proper presentation channel to preventconflicts of interest.
No deviation.
-53-
Evaluation Criteria
Implementation Status (Note 1) Difference from Ethical Corporate Management Best
Practice Principles for TWSE/GTSM Listed Companies
and reasons
Yes No Abstract Illustration
(III) Has the Company developed a policy to prevent conflicts of V
The Company has formulated the Ethical Corporate Management Best Practice Principles, and the Procedures for Ethical Management and Guidelines for Conduct in 2015. 2018 implementation status of the ethical management has been reported to the board of director on March 27, 2019. Its implementation status is as follows: 1. After the new employees of Company are
trained, they shall sign the documents relatingto the ethical management and the ethicalconduct, including "Employee ConfidentialityAgreement", "Honesty and Self-DisciplineCommitment", "Employee Self-DisciplineConvention" and "Employee Declaration". In2018, 101 person-time of new employeessigned these documents; the signing ratio was100%.
2. The Company propagates the norms relatingto ethical conduct and ethical management toits employees on the Company's internal webpage.
3. The employees can react or report the illegalacts through smoothly multi-channels to everymanagement level and human resourcedepartment. And the Company activelydeclares its ethical management policies andits implementation status on its website andannual report. In 2018, there is no occurrencesof illegal acts reported through hotline ore-mail.
The Company is planning the trainings relating to ethical management for all employees in 2019.
(III) The Company’s Board of Directors shall exercise
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Evaluation Criteria
Implementation Status (Note 1) Difference from Ethical Corporate Management Best
Practice Principles for TWSE/GTSM Listed Companies
and reasons
Yes No Abstract Illustration
interest, provided a proper presentation channel, and put such policy in place?
(IV) Has the Company established an effective accounting systemand internal control system for the ethical corporate management, assigned internal auditing unit to review such systems, or entrusted CPAs with such review?
V
due care of a good administrator in supervising the Company to prevent dishonesty, and review the implementation effectiveness and continuous improvement at any time to ensure that ethical corporate management policy is put into effect. In order to prevent conflicts of interest and avoid seeking personal gain, the Codes of Ethical Conduct has been passed by the Board of Directors, moreover, it is explicitly stipulated in the Procedural Rules of the Board of Directors Meetings and the Procedures for Ethical Management and Guidelines for Conduct of the Company that directors should be highly self-disciplined, and account for any proposed matter for consideration at the meeting of the Board of Directors if he/she or the legal person he/she represents may be interested therein. A director shall not participate in the discussions and voting, nor shall he/she exercise his/her own vote or by proxy on behalf of another director if the aforesaid conflicts of interest impair the interest of the Company.
(IV) The Company has established a complete andeffective internal control system, relevantmanagement regulations, accounting systems,Ethical Corporate Management Best PracticePrinciples, etc., which are implemented andreviewed at any time to ensure that the designand implementation of the systems are effective.Internal auditors check business activities atregular intervals every year. If there is any act ofdishonesty, an audit report will be made andreported to the Board of Directors.
-55-
Evaluation Criteria
Implementation Status (Note 1) Difference from Ethical Corporate Management Best
Practice Principles for TWSE/GTSM Listed Companies
and reasons
Yes No Abstract Illustration
(V) Does the Company hold education training in ethical corporate management inside and outside the Company on a regular basis?
V (V) The management center organizes educationaltraining for newcomers (including the concept ofethical corporate management) at regularintervals.
2018 implementation status of the Company is as follows: 1. After the new employees of Company are
trained, they shall sign the documents relatingto the ethical management and the ethicalconduct, including "Employee ConfidentialityAgreement", "Honesty and Self-DisciplineCommitment", "Employee Self-DisciplineConvention" and "Employee Declaration". In2018, 101 person-time of new employeessigned these documents; the signing ratio was100%.
The Company propagates the norms relating to ethical conduct and ethical management to its employees on the Company's internal web page.
III. Operation of the Company’s Whistle-blowing System(I) Has the Company put in place the specific whistle-blowing and
reward system, established a convenient reporting channel, and assigned appropriate personnel to deal with whistle-blowing?
V (I) When a director, supervisor or manager violatesthe Codes of Ethical Conduct, he/she shall bereported to the Board of Directors for treatment.The Board of Directors shall appoint one or morepersons to investigate his/her behavior. In case ofany violation, the Board of Directors may punishhim/her depending on the seriousness of the case. Information such as the title, name, date ofviolation, cause, the guidelines which have beenviolated, and punishment about the person whohas violated the Codes of Ethical Conduct shouldbe disclosed immediately on the MarketObservation Post System if such violation ismaterial. Those who violate ethical standards may
No deviation.
-56-
Evaluation Criteria
Implementation Status (Note 1) Difference from Ethical Corporate Management Best
Practice Principles for TWSE/GTSM Listed Companies
and reasons
Yes No Abstract Illustration
(II) Has the Company set the investigation standards, operatingprocedures and related confidentiality mechanisms for reporting events?
(III) Has the Company taken measures to protect whistle-blowersfrom retaliation due to reporting?
V
V
appeal to the Board of Directors. The Company encourages internal and external personnel to report on unfaithful behavior or misconduct, and pay bonuses to them at its own discretion depending on the seriousness of the case. Any internal personnel who are found to have fraudulently reported or made malicious allegations, should be subject to disciplinary punishment, up to and including termination. The Company has established and announced internal independent mailboxes or special lines for complaints on the Company’s website and the Intranet, or has other external independent agencies to provide such mailboxes and special lines for use by internal and external personnel.
(II) The mechanisms for operations and confidentialityhave been formulated in accordance with theCodes of Ethical Conduct, Ethical CorporateManagement Best Practice Principles, and theProcedures for Ethical Management andGuidelines for Conduct.
(III) Keep the identity of whistleblowers and reports in confidentiality. When discovering or receivingreports on dishonest acts of the Company’spersonnel, the Company should immediately findout the truth. If the violators can produce anyevidence indicating that they have not violatedthe Company’s regulations, they can immediatelyappeal to the Administrative Management Center. If it is confirmed that the violators are in violationof the relevant laws or the Company’s policiesand regulations for ethical corporate
-57-
Evaluation Criteria
Implementation Status (Note 1) Difference from Ethical Corporate Management Best
Practice Principles for TWSE/GTSM Listed Companies
and reasons
Yes No Abstract Illustration
management, they are required to immediately stop the relevant act, and subject to disciplinary actions; a claim for damages will be made by the Company if necessary through legal proceedings to maintain the Company's reputation and interests. The Company guarantees that the identity of the individuals lodging complaints or whistle-blowers, and the information provided by them will be kept in absolute confidentiality in accordance with the laws, and they will not be punished for reporting. . Contact information: Reporting mailboxes Chinese: 24199 三重郵局第 3-96 號信箱 English: P.O.BOX 3-96 Sanchong New Taipei City 24199 Taiwan (R.O.C.) E-Mail address:[email protected] line: (02)2995-0299
IV. Enhancing Information Disclosure(I) Has the Company disclosed the contents and implementation
effectiveness of the Ethical Corporate Management Best Practice Principles on its website and the Market Observation Post System?
V The Company has disclosed the information relating to its corporate governance and ethical management on its website and the address is http://www.clevo.com.tw.
No deviation.
If the Company has enacted the Ethical Corporate Management Best Practice Principles in accordance with the Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies, please describe the difference between its operation and the Principles: No difference.
V. Other important information helpful for better understanding of ethical corporate management: (such as the review of and amendments to the Ethical Corporate Management Best Practice Principles, etc. :1. The Company's "Ethical Corporate Management Best Practice Principles" and the "Procedures for Ethical Management and Guidelines for Conduct" which were
established on March 27, 2015 has been amended with the approval of the board of director dated on March 27, 2018, and have been reported to the shareholders' meeting according to laws.
2. The Company complies with the Company Act, Securities and Exchange Act, the relevant laws and regulations related to listing or other codes of business conduct as the basis for the implementation of ethical corporate management.
3. According to the systems for director’s avoidance of conflict of interest set out in the Procedural Rules of the Board of Directors Meetings, for proposals submitted to
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Evaluation Criteria
Implementation Status (Note 1) Difference from Ethical Corporate Management Best
Practice Principles for TWSE/GTSM Listed Companies
and reasons
Yes No Abstract Illustration
a meeting of the Board of Directors that are of interest to a director or the legal person he/she represents, the director may express his/her opinions and answer questions, but he/she shall not participate in the discussions for and voting on those proposals, nor shall he/she exercise his/her own vote or by proxy on behalf of another director if the aforesaid conflicts of interest impair the interest of the Company.
4. The Operating Procedures for Handling Major Internal Information developed by the Company specifically stipulate that directors, managers and servants are not allowed to disclose the major internal information they are aware of to others, and may not inquire about or collect the unrevealed and major internal information irrelevant to personal duties from those who are aware of the major internal information within the Company. No unrevealed and major internal information acquired not through conduct of business shall be disclosed to others.
(VII) If the Company has established the Corporate Governance Best Practice Principles and the related regulations, it should disclose howto inquire about such principles:1. In order to establish a good corporate governance system, the Company has established the Corporate Governance Best
Practice Principles which shall be followed by all the members of the Company.2. In order to align the Company's directors, supervisors and managers with ethical standards, and to make the Company's
stakeholders more aware of its ethical standards, the Company has formulated the Codes of Ethical Conduct, Ethical CorporateManagement Best Practice Principles, and the Procedures for Ethical Management and Guidelines for Conduct.
3. In order to establish a good mechanism for handling and disclosing major internal information of the Company, to avoidimproper disclosure of information, to ensure the consistency and correctness of the information made publicly available by theCompany, and to strengthen the prevention and management of insider trading, the Company has established the OperatingProcedures for Handling Major Internal Information and Prevention of Insider Trading which shall be followed by all theemployees.
4. Please visit http://www.clevo.com.tw for the related codes or management procedures.
(VIII) Other important information that is sufficient to improve the understanding of corporate governance operations shall also be disclosed:The information about corporate governance on the Company’s website can be assessed athttps://www.clevo.com.tw/group_company.asp?id=51&lang=tw.
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(IX) Implementation Status of Internal Control Systems1. Statement of Internal Control.
CLEVO CO.
Statement of Internal Control System
Dated March 27, 2019
Based on the self-assessment of the Company’s internal control system for 2018, we declare that:
I. The establishment, implementation and maintenance of an internal control system are the responsibility of the
Company’s Board of Directors and management. The Company has established such a system, designed to
provide reasonable assurance with respect to the effectiveness and efficiency of business operations (including
profitability, performance and safeguarding of assets), the preparation of reliable, timely and transparent
financial statements, and their compliance with the relevant rules and regulations.
II. An internal control system, no matter how well designed, has inherent limitations and therefore can provide only
reasonable assurance with respect to the accomplishment of the above goals. Furthermore, because of
changing conditions and circumstances, the effectiveness of an internal control system may vary over time.
Notwithstanding, the internal control system of the Company contains self-oversight mechanisms, and actions
are taken to correct deficiencies as they are identified.
III. The Company examined the design and effective implementation of its internal control system according to the
criteria prescribed in the Regulations Governing Establishment of Internal Control Systems by Public Companies
(called the Regulations below). The “Regulations” divide internal control into five constituents in line with the
process of management control: 1. Control environment, 2. Risk assessment, 3. Control operation, 4. Information
and communication, and 5. Supervision. Each constituent contains several criteria. Please refer to the
“Regulations” for details.
IV.The Company has evaluated the effectiveness of design and implementation of its internal control system in
accordance with the above criteria.
V. Based on the results of examination, the Company believes that the design and implementation of its internal
control system dated December 31, 2018 (including supervising and managing its subsidiaries), consisting of
the effectiveness and efficiency of business operations, the preparation of reliable, timely and transparent
financial statements, and their compliance with the relevant rules and regulations, are effective, and
reasonably assure the achievement of the aforementioned goals.
VI. This Statement will be a major part of the Company’s annual report and prospectus, and will be made publicly
available. The Company shall be held liable for misrepresentation or nondisclosure in the above content,
according to Articles 20, 32,171, and 174 of the Securities and Exchange Act.
VII. This Statement has been approved by the Company’s Board of Directors at the meeting held on March 27,
2019, at which this Statement was unanimously endorsed by all 6 attending directors without any opposing
opinions.
CLEVO CO.
Chairman: Hsu, Kun-Tai
General Manager: Tsai, Ming-Hsien
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Note 1: If there is a major deficiency in the design and implementation of the internal control systems of public companies identified in the year, the explanatory paragraph should be added to Paragraph 4 of the Statement of Internal Control System to list and explain the major deficiency found in the self-assessment, the improvement actions taken by the Company by the balance sheet date, and improvements. Note 2: The date of statement is the “end of the fiscal year”.
2. If accountants are entrusted with review of the internal control system, the review report issued bythe accountants shall be disclosed: None.
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(X) In the most recent year and up to the date of publication of the annual report, if theCompany and its internal personnel have been punished according to law, and thepunishment has been imposed on internal personnel by the Company for violation of theinternal control systems, major defects and improvements: No.
(XI) Important resolutions passed at the meetings of shareholders and the Board of Directorsin the most recent year and up to the date of publication of the annual report.
1. The significant resolutions passed at the general meeting of the Company heldon June 15, 2018, and implementation are as follows:
(1) Reports on Company AffairsSubject 1:Business Report for 2017 Subject 2:Review of the report on final accounts for 2017 by supervisors Subject 3: Report on payment of compensation to employees, directors and
supervisors in 2017 Subject 4:Report on the Implementation of Treasury Stock of Our Company Subject 5: Report on the amendments to the Company’s Procedural Rules of the
Board of Directors Meetings. Subject 6: Amendments to the Ethical Corporate Management Best Practice
Principles by the Company. Subject 7: Report on amendments to the Procedures for Ethical Management and
Guidelines for Conduct made by the Company. Subject 8: Report on amendments to the Codes of Ethical Conduct made by the
Company.
(2) Matters to be RatifiedSubject 1: Adoption of the final accounts of 2017 for the Company. Progress: This proposal has come into effect after being passed at the
shareholders’ meeting.
Subject 2: Adoption of the Statement for Distribution of Earnings for 2017. Progress: This proposal has come into effect after being passed at the
shareholders’ meeting.
(3) DiscussionsSubject 1: Discussion about payment of cash out of capital reserves. Progress: This proposal has come into effect after being passed at the
shareholders’ meeting. Cash was paid out of the capital reserves from the ordinary shares issued at a premium in excess of par value, equivalent to NTD 546,530,400 by August 3, 2018.
Subject 2: Discussion about the amendments to the Articles of Association of the Company.
Progress: This proposal has come into effect after being passed at the shareholders’ meeting.
Subject: 3 Discussion about the amendments to the Procedures for Acquisition or Disposal of Assets.
Progress: This proposal has come into effect after being passed at the shareholders’ meeting.
Subject 4: Discussion about establishment of the Procedures for Transactions in
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Derivative Financial Products by the Company. Progress: This proposal has come into effect after being passed at the
shareholders’ meeting.
Subject 5: Discussion about the amendments to the Procedures for Lending Funds to Others.
Progress: This proposal has come into effect after being passed at the shareholders’ meeting.
Subject 6: Discussion about the amendments to the Procedures for Endorsement & Guarantee of the Company.
Progress: This proposal has come into effect after being passed at the shareholders’ meeting.
Subject 7: Discussion about the amendments to the Procedures for Election of Directors and Supervisors of the Company.
Progress: This proposal has come into effect after being passed at the shareholders’ meeting.
(3) ElectionSubject: Adoption of the election of directors (including independent directors).The election results are as follows:
4 directors: No. Full name Votes for election 1 Hsu, Kun-Tai 558,518,88813 Tsai, Ming-Hsien 556,218,968
12198 Lin, Mao-gui 406,037,88820204 Chien,Yih-Long 406,037,888
3 independent directors: No. Full name Votes for election
D101XXXXXX Chou, Po-Chiao 408,816,888 D100XXXXXX Chen,Tsung-Ming 406,037,888 J102XXXXXX Fan, Kuang-SUNG 406,037,888
(3) Discussions IISubject: Imitation on discharge of new directors and their representatives from
non-compete obligations. Progress: This proposal has come into effect after being passed at the shareholders’ meeting.
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2. Important resolutions passed at the meetings of the Board of Directors in the most recent year and up to the date of publication of theannual report: Attendance by directors and supervisors: V =attendance, blank=absence
Number of Meetings
Number of Meetings This Term
Date of Notification
Date of Meeting
Explanation of Subject
Director Independent Director Supervisor Attend ANCE Without
Voting Rights Hsu, Kun-Tai
Tsai, Ming-Hsien
Yu, Tien-Jung
Lin, Mao-gui
Chien, Yih-Long
Chen, Tsung-Ming
Fan, Kuang-SUNG
Tung Ling Li,
Chu- Hsin
Lu, Jin-zong
1 17 2018.02.08 2018.02.08 1. The Company proposed to repurchase its shares for transfer to
employees for the first time in 2018V V V V V V V V V
Wu, Mai Tsai, Qiu-Ling
2 18 2018.03.08 2018.03.27
1. Report on the implementation of the resolutions passed at thesixth meeting of the Board of Directors in 2017, and at the firstmeeting thereof in 2018.
2. Report on internal audit of business.3. Adoption of the Company's final accounts and Business Report for
2017.4. Adoption of and discussion about the distribution of remuneration
to employees, directors and supervisors for 2017 reviewed bythe Company’s Remuneration Committee.
5. Adoption of the Statement for Distribution of Earnings for 2017.6. Adoption of payment of cash out of capital reserves. 7. In order to cooperate with the accountant rotation policy of PwC
Taiwan, it is proposed to change the CPAs who issue financialreports to the Company.
8. Adoption of amendments to the Articles of Association of theCompany.
9. Passed the amendment to the Company's "Procedure for theAcquisition or Disposal of Assets".
10. Adoption of the amendments to the Procedures for Transactions in Derivative Financial Products by the Company.
11. Passed the amendment to the Company's "Procedure for theLending Funds to Others".
12. Passed the amendment to the Company's "Procedure for theEndorsements and Guarantees".
13. Adoption of the amendments to the Procedures for Election ofDirectors and Supervisors of the Company.
14. Adoption of the amendments to the Company’s Procedural Rulesof the Board of Directors Meetings.
15. Adoption of the amendments to the Ethical CorporateManagement Best Practice Principles
16. Adoption of the amendments to the Procedures for Ethical Management and Guidelines for Conduct made by the Company.
17. Adoption of the amendments to the Operating Procedures forHandling Major Internal Information and Prevention of InsiderTrading.
18. Adoption of the amendments to the Operating Procedures forApplication for Suspending and Resuming Transactions
19. Adoption of the amendments to the Remuneration CommitteeCharter of the Company.
20. Adoption of the enactment of the Remuneration CommitteeCharter.
21. A proposal of the Statement of Internal Control Systems for2017.
22. Issuance of the Statement of Internal Control based on theself-assessment results. Adoption of the agenda for convening the general meeting for 2018, and the relevant operations.
23. Adoption of the application for credit extension, and trade credit for transactions in derivative financial products to financialinstitutions.
V V V V V V V V V
Wu, Mai Tsai, Qiu-Ling Feng, Min-Juan Wu, Han-Chi
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Number of Meetings
Number of Meetings This Term
Date of Notification
Date of Meeting
Explanation of Subject
Director Independent Director Supervisor Attend ANCE Without
Voting Rights Hsu, Kun-Tai
Tsai, Ming-Hsien
Yu, Tien-Jung
Lin, Mao-gui
Chien, Yih-Long
Chen, Tsung-Ming
Fan, Kuang-SUNG
Tung Ling Li,
Chu- Hsin
Lu, Jin-zong
3 19 2018.04.03 2018.04.03 1. The Company proposed to repurchase its shares for transfer to
employees for the second time in 2018 V V V V V V
Chen Tsung Ming Tai
V V Wu, Mai
Tsai, Qiu-Ling
4 20 2018.04.23 2018.05.04
1. Report on the implementation of the resolutions passed at thesecond and third meetings of the Board of Directors in 2018.
2. Report on internal audit of business.3. Report on memorandum book for the Company’s derivative
commodity transactions.4. Report on issuance and transfer of treasury shares.5. Adoption of the Company’s financial report for the first quarter of
2018.6. Adoption of a list of candidates for the directors (including
independent directors) nominated for review by the Board of Directors.
7. Adoption of the application for credit extension, and trade creditfor transactions in derivative financial products to financialinstitutions.
V V V V V V V V
Wu, Mai Tsai, Qiu-Ling Feng, Min-Juan
Number of Meetings
Number of Meetings This Term
Date of Notification
Date of Meeting
Explanation of Subject Director Independent Director Attend ANCE
Without Voting Rights
Hsu, Kun-Tai
Tsai, Ming-Hsien
Lin, Mao-gui
Chien, Yih-Long
Chou, Po-Chiao
Chen, Tsung-Ming
Fan, Kuang-SUNG
5 1 2018.06.15 2018.06.15 1. Election and appointment of the chairman and vice chairman of
the CompanyV V V V V V V
Yu, Tien-Jung Wu, Mai
Tsai, Qiu-Ling
6 2 2018.06.15 2018.06.25
1. Report on the implementation of the resolutions passed at thefourth and fifth meetings of the Board of Directors in 2018.
2. Report on internal audit of business.3. Report on memorandum book for the Company’s derivative
commodity transactions.4. Adoption of the proposed appointment of the members of the
Remuneration Committee.5. Passed the establishment of the Company's "Procedure for the
Meeting of the Audit Committee".6. Adoption of the proposed purchase of liability insurance for the
Company’s directors, supervisors and officers. 7. Adoption of the proposed ex dividend date for 20188. Adoption of the application for credit extension, and trade credit
for transactions in derivative financial products to financialinstitutions.
V V V V V V V Yu, Tien-Jung Wu, Mai
Tsai, Qiu-Ling
7 3 2018.07.31 2018.08.13
1. Report on the implementation of the resolutions passed at thesixth meeting of the Board of Directors in 2018.
2. Report on internal audit of business.3. Passed the Company's financial statements for the second
quarter of 2018.4. Passed the base date for the capital reduction by the
cancellation of treasury shares.5. Passed the Company's proposal of endorsements and
guarantees.6. Passed the amendment to the procedure of the Company's
relevant internal control operation in order to tie in with the establishment of the Company's audit committee.
7. Adoption of the application for credit extension, and tradecredit for transactions in derivative financial products to financial institutions.
8. Adoption of reappointment of the general manager.
V V V V V V V
Yu, Tien-Jung Wu, Mai
Tsai, Qiu-Ling Feng, Min-Juan
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Number of Meetings
Number of Meetings This Term
Date of Notification
Date of Meeting
Explanation of Subject Director Independent Director Attend ANCE
Without Voting Rights
Hsu, Kun-Tai
Tsai, Ming-Hsien
Chien, Yih-Long
Chou, Po-Chiao
Chen, Tsung-Ming
Fan, Kuang-SUNG
8 4 2018.09.13 2020.09.21
3. Report on the implementation of the resolutions passed at theseventh meeting of the Board of Directors in 2018.
4. Report on internal audit of business.5. Adoption of joint development of the land in Taipei City
evaluated by the Company and the Hongwell Co., Ltd.6. Passed the Company's proposal of endorsements and
guarantees. 7. Adoption of the application for credit extension, and trade
credit for transactions in derivative financial products to financial institutions.
V V V V V
Yu, Tien-Jung Wu, Mai
Tsai, Qiu-Ling Feng, Min-Juan
9 5 2018.10.30 2018.11.14
1. Report on the implementation of the resolutions passed at theeighth meeting of the Board of Directors in 2018.
2. Report on internal audit of business.3. Passed the Company's financial statements for the third quarter
of 2018.4. Passed the base date for the capital reduction by the
cancellation of treasury shares.5. Adoption of the proposal to repurchase the Company’s shares
for transfer to employees for the third time in 20186. Passed the proposal for benefit evaluation of the Group's asset
activation. 7. Passed the Company's proposal of endorsements and
guarantees.8. Adoption of the application for credit extension, and trade
credit for transactions in derivative financial products to financial institutions.
9. Adoption of the proposed syndicated loans of NTD 6 billion with a term of five years raised for CLEVO by Taiwan CooperativeBank as the coordinator and arranger.
10. Passed the Company's 2018 audit plan.11. Adoption of the proposed changes to the Company’s audit
supervisor
V V V V V V
Yu, Tien-Jung Wu, Mai
Tsai, Qiu-Ling Yi-Mei Liu
Feng, Min-Juan
10 6 2019.06.18 2019.03.27
1. Report on the implementation of the resolutions passed at theninth meeting of the Board of Directors in 2018.
2. Report on internal audit of business.3. Report on memorandum book for the Company’s derivative
commodity transactions.4. Report on issuance and transfer of treasury shares.5. Report on appraisal of performance of the Board of Directors in
20186. Report on implementation of ethical corporate management by
the Company in 2018 7. Passed the Company's financial statements and business report
for the year of 2018.8. Adoption of and discussion about the distribution of
remuneration to employees and directors for 2018 reviewed bythe Company’s Remuneration Committee.
9. Passed the appropriation of the Company's 2018 earnings.10. Adoption of payment of cash out of capital reserves.11. Adoption of a list of candidates for the directors nominated and
review of the nominations by the Board of Directors.12. Adoption of the appointment of the governance officer by the
Company.13. Passed the evaluation for the independence and professional
V V V V V V
Yu, Tien-Jung Wu, Mai Yi-Mei Liu
Feng, Min-Juan
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Number of Meetings
Number of Meetings This Term
Date of Notification
Date of Meeting
Explanation of Subject Director Independent Director Attend ANCE
Without Voting Rights
Hsu, Kun-Tai
Tsai, Ming-Hsien
Chien, Yih-Long
Chou, Po-Chiao
Chen, Tsung-Ming
Fan, Kuang-SUNG
qualifications of CPAs according to Article 29 of the "Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies".
14. Adoption of amendments to the Articles of Association of theCompany.
15. Passed the amendment to the Company's "Procedure for theAcquisition or Disposal of Assets".
16. Adoption of the amendments to the Procedures for Transactions in Derivative Financial Products by the Company.
17. Passed the amendment to the Company's "Procedure for theLending Funds to Others".
18. Passed the amendment to the Company's "Procedure for theEndorsements and Guarantees".
19. Adoption of amendments to the Procedures for Transfer ofShares to Employees by Buyback of the Company.
20. Adoption of establishment of the Standard OperatingProcedures for Handling Directors’ Requirements.
21. Adoption of amendments to the Procedures for Appraisal ofPerformance of the Board of Directors.
22. Adoption of amendments to the Corporate Governance BestPractice Principles of the Company.
23. Passed the Company's 2018 internal control system, and thestatement of internal control system issued upon the result ofself-evaluation.
24. Adoption of the endorsement & guarantee made by theCompany.
25. Adoption of the application for credit extension, and tradecredit for transactions in derivative financial products to financial institutions.
26. Adoption of the agenda for convening the general meeting for 2019, and the relevant operations.
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(XII) In the most recent year and up to the date of publication of the annual report, the major contents of the opposition expressed by directors orsupervisors about the significant resolutions passed by the Board of Directors that has been noted in the records or declared in writing: None.
(XIII) Summary of the resignation and removal of the Company's chairman, general manager, chief accountant, treasurer, internal audit supervisorand R&D supervisor in the most recent year and up to the date of publication of the annual report: None.
Date:April 30, 2019 Title Full name Date Assumed Date Dismissed Reasons for Resignation or Dismissal
Chief Internal Auditor
Tsai, Qiu-Ling November 14, 2018 Reached the ages of retirement
Chief Internal Auditor
Yi-Mei Liu November 14,
2018
Note: The "Relevant Persons of the Company" refer to chairperson, president, chief of accounting, chief of finance, chief internal auditor and chief of research and development etc.
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V. Information about Certification Fees for CPAsRange of Certification Fees for CPAs (Please check the matching range or fill in theamount)
Name of accounting firms
Name of CPAs Audit Period Remarks
PwC Taiwan Feng, Min-Juan
Wu, Han-Chi
2018.01.01~2018.12.31 None
Note: If the Company has CPAs or the accounting firm replaced during the year, please list the audit period, and describe the reasons for replacement in the remarks column.
Unit: NTD thousand Item of fees
Range of amount Audit fees
Non-audit fees-
business registration
Total
1 Below 2,000 2 2,000 (inclusive)~4,000 3,300 50 (Note) 3,350 3 4,000 (inclusive)~6,000 4 6,000 (inclusive)~8,000 5 8,000 (inclusive)~10,000 6 Over 10,000 (inclusive)
Note: Go through the procedures for changes to registration of capital decrease for cancellation of treasury shares.
(I) If the non-audit fees paid to the CPAs, the accounting firms the CPAs work for and theiraffiliated companies accounting for more than one fourth of the audit fees, the amountof audit and non-audit fees, and non-audit services shall be disclosed: None.
(II) If the audit fees paid during the year when the accounting firm is replaced are less thanthe previous year, the amount of the audit fees before and after the replacement, andthe reasons for reduction shall be disclosed: None.
(III) If the audit fees are reduced by more than 15% compared with the previous year, theamount, proportion and reasons for the reduction in the audit fees shall be disclosed:None.
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VI. Information about Replacement of CPAs:(I) Former CPAs
Rep lacemen t Date 2018.03.27 Reasons for Replacement
Due to the rotation policy of PwC Taiwan, the Company has replaced the former CPA, Chang, Ming Hui, with the CPA, Wu, Han-Chi, from the first quarter of 2018.
The term of office for the appointor or accountant is terminated or he/she does not accept the appointment
Parties Situation CPAs Appointor
Voluntary termination of appointment
V
No further acceptance (continuation) of appointment
Comments and reasons for review reports without qualified opinions issued within the period of most recent two years
No unqualified opinions expressed in 2016 No unqualified opinions expressed in 2017 No unqualified opinions expressed in 2018
Is there any disagreement with the issuer?
Yes
Accounting principles or practices Disclosure of financial reports Verification scope or steps Others
None
V
Description: not applicable Other disclosures (The matters referred to in Articles 10.6(1)-4 to 7 of these Principles shall be disclosed)
(1) If the former CPA has informed the Company that a lack of a sound internal control system rendered its financial reports untrusted: Non.
(2) If the former CPA has informed the Company that he/she could not rely on the Company's statement or was unwilling to have any connection with the Company's financial reports: Non.
(3) If the former CPA has informed the Company that it was necessary to expand the scope of audit, or the information indicated that the expansion of the scope of the audit would impair the credibility of the previously issued or forthcoming financial reports, however, the former CPA did not expand the scope of the audit due to replacement or other reasons: No.
(4) If the former CPA has informed the Company that the credibility ofthe previously issued or forthcoming financial reports may be impaired based on the information gathered, however, the former CPA did not deal with such matter due to replacement or other reasons: No.
(II)Successive CPAsName of accounting firm PwC Taiwan Name of CPAs Feng Min Chuan Date of appointment 2018.03.27 Accounting treatment methods or accounting principles for specific transactions, and advisory matters and results that may be issued for financial reporting prior to appointment
None
Written opinions of the successive accountants different from those of the former accountants
None
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(III) Replies from the former accountants to the matters referred to in Article 10,paragraph 6(1) and (2)-3 of these Principles: Not applicable.
VII. If the chairman, general manager, or the manager responsible for financing oraccounting affairs, who has worked for the accounting firm to which CPAs belong orthe affiliated enterprises in the past year, his/her name, title and the period working forthe accounting firm or the affiliated enterprises: None. The affiliated companies of theaccounting firm to which CPAs belong refer to the companies or institutions in whichthe accounts of the accounting firm CPAs work for hold more than 50% of the shares,or hold positions of more than half of the directors, or which are called affiliatedcompanies in the information published or printed by the accounting firm: None.
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VIII. Information about the shares transferred by and changes to the shares pledged by thedirectors, supervisors, managers and the shareholders holding more than 10% of shares inthe most recent year and up to the date of publication of the annual report
(I) Changes to the shares held by directors, supervisors, managers and majority shareholders:
Title Full name
2018 From the current fiscal year up to 4/20
Number of shares
pledged Increase/
decr ease in
Number of shares held Increase/
decr ease in
Number of shares
pledged Increase/
decr ease in
Chairman Hsu, Kun-Tai - - - -
- - - -
Vice Chairperson and President
Tsai, Ming-Hsien - - - -
(65,000) - - - Director and
Executive Vice President
Chien, Yih-Long - - - -
- - - -
Independent Director
Chou, Po-Chiao - - - -
- - - -
Independent Director
Chen, Tsung-Ming - - - -
- - - -
Independent Director
Fan, Kuang-SUNG - - - -
- - - -
Senior Vice President
Zhang, Fu-Ming - - - -
- - - -
Senior Vice President and Chief
of Finance/Accounting
Yu, Tien-Jung
- - - -
- - - -
Vice President Fan, Guang-Hui - - - -
- - - -
Vice President Li, Wen-Hua - - - -
- - - -
Vice President Chen, Hsueh-Wen - - - -
- - - -
Vice President Zheng, Wen-Bin - - - -
- - - -
Vice President Wu, Mai - - - -
- - - -
Senior Assistant Vice President Zhang, Wen-Song
- - - -
- - - -
Number of shares held
Increase/decrease in
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Title Full name
2018 From the current fiscal year up to 4/20
Number of shares held
Increase/decrease in
Number of shares
pledged Increase/decr
ease in
Number of shares held
Increase/decrease in
Number of shares
pledged Increase/decr
ease in
Senior Assistant Vice President
Wang, Feng-Zhu - - - -
(96,000) - - -
Senior Assistant Vice President
Lin, Nan-Sheng 4,000 - - -
- - - -
Senior Assistant Vice President Zhong, Wen-Qin
- - - -
- - - -
Senior Assistant Vice President
Zheng, Yu-Ming - - - -
- - - -
Senior Assistant Vice President
Lin, Sheng Xiang - - - -
- - - -
Assistant Vice President Chen, Zong-Zhi
- - - -
- - - -
Assistant Vice President
Lin, Guan-Yan - - - -
(1,000) - - -
Assistant Vice President
Lin, Liang-Shi - - - -
- - (14.000) -
Assistant Vice President Wang,Zhen-Xiong
- - - -
- - - - Note 1: Shareholders holding more than 10% of the Company's shares should be indicated as major shareholders, and listed separately. Note 2: if the transferee or pledgee of shares is a related party, the following form shall be filled out.
(II) Information about equity transfer:
Note 1: Fill out the name of the directors, supervisors, managers and shareholders holding more than 10% of the shares. Note 2: acquisition or disposal of.
(III) Information about pledge of stock rights: None.
Name (Note 1)
Reasons for equity transfer (Note 2)
Trade date Counter parties
Relationship between counter parties and the Company, its directors, supervisors, and major shareholders holding more
than 10% of the shares
Number of shares
Transaction price
Tsai, Ming-Hsien Bestowal 2018.08.06 Tsai Ju-Ya First-degree relatives (children) 65,000 33.30
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IX. Information about the Relationships among Top Ten Shareholders, Such as Related Parties,Spouses or Relatives within the Second-degree of Kinship.
April 20, 2019
Name (Note 1) Number of shares held in person Shares held by spouse and minor children Total number of shares held
in the name of others
Name of a related party, spouse or second-grade relative, and relationships among top ten shareholders (Note 3).
Remark
Number of Shares Shareholding
ratio Number of Shares Shareholding
ratio Number of
Shares Shareholding
ratio Company name
(or personal name) Relationship -
Hsu, Kun-Tai
51,701,335 7.72% 16,371,784 2.44% 0 0%
Lin Feng Chu Hsu Fu Chia
Hsu Yue Hyuan Hsu Li Hsin
Hsu Cheng Hsin
Spouse First-degree relative Second-degree relative First-degree relative First-degree relative
-
Hsu Fu Chia
33,642,454 5.02% 6,306,196 0.94% 0 0%
Hsu, Kun-Tai Hsu Yue Hyuan Lin Feng Chu Hsu Li Hsin
Hsu Cheng Hsin
First-degree relative First-degree relative First-degree relative Second-degree relative Second-degree relative
-
Huatai Investment Co., Ltd. Person in charge: Hsu Kun Tai
31,046,144 4.64% 0 0% 0 0%
Hsu, Kun-Tai Lin Feng Chu
Hsu Fu Chia
Person in charge of the Company Second-degree relatives of the Company’s representative First-degree relatives of the Company’s representative
-
Hongwell Co., Ltd. Person in charge: Hsu Kun Tai
27,687,888 4.13% 0 0% 0 0%
Hsu, Kun-Tai Lin Feng Chu
Hsu Fu Chia
Person in charge of the Company Second-degree relatives of the Company’s representative First-degree relatives of the Company’s representative
-
The investment account of Morgan Stanley & Co. International Limited is held in escrow by HSBC Bank (Taiwan) Limited.
22,535,064 3.36% 0 0% 0 0% - - -
Youkang Electronics Co., Ltd. Person in charge: Lu Chin Tsung
19,153,000 2.86% 0 0% 0 0% - - -
Hsu Li Hsin 18,061,568 2.70% 0 0% 0 0%
Hsu, Kun-Tai Lin Feng Chu
Hsu Cheng Hsin
First-degree relative First-degree relative Second-degree relative
-
KAPOK COMPUTER Person in charge: Hsu, Kun-Tai
16,966,596 2.53% 0 0% 0 0%
Hsu, Kun-Tai Hsu Fu Chia
Hsu Yue Hyuan
Lin Feng Chu
Hsu Li Hsin Hsu Cheng Hsin
Person in charge of the Company First-degree relatives of the Company’s representative Second-degree relatives of the Company’s representative Spouse of the company’s representative First-degree relative First-degree relative
-
Lin Feng Chu 16,371,784 2.44% 51,701,335 7.72% 0 0% Hsu, Kun-Tai Hsu Fu Chia
Hsu Yue Hyuan
Spouse First-degree relative Second-degree relative
-
Hsu Cheng Hsin 14,626,156 2.18% 0 0% 0 0% Hsu, Kun-Tai Lin Feng Chu Hsu Li Hsin
First-degree relative First-degree relative Second-degree relative
-
Note 1: All the top ten shareholders should be listed. The name of corporate shareholders (if any) and the representatives of corporate shareholders should be listed separately.
Note 2: The calculation of the shareholding ratio refers to the calculation of the ratio of shareholdings in the name of a shareholder, his/her spouse, minor children or another person.
Note 3: The relationship among the shareholders listed above, including legal persons and natural persons, shall be disclosed in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.
X. Investment by Directors, Supervisors, Managers, Groups of Direct or Indirect Control in theInvestment Business, and to Calculate the Combined Shareholding Percentage
Unit: number of shares; % March 31, 2019
Investees
(Note)
Investment made by the Company
Invested by directors, supervisors,
managers and the enterprises
directly or indirectly controlled
Comprehensive investment
Number of shares % of
shareholding Number of shares
% of
shareholding Number of shares
% of
shareholding 1. Kapok Computer Co., Ltd. 8,000,000 100% 0 0 % 8,000,000 100%
2. Clevo Investment Co., Ltd. 14,000,000 100% 0 0 % 14,000,000 100%
3. CLEVO COMPUTER SINGAPORE PTELTD.
27,544,070 100% 0 0 % 27,544,070 100%
4. CLEVO (CAYMAN ISLANDS) HOLDINGCOMPANY
220,730,000 100% 0 0 % 220,730,000 100%
5. KAPOK COMPUTER(SAMOA)CORPORATION
7,000,000 100% 0 0 % 7,000,000 100%
6.BUYNOW ON-LINE HOLDINGCORPORATION
1,100,000 100% 0 0 % 1,100,000 100%
7.LUNARIA INVESTMENT GK 0 98.99% 0 0 % 0 98.99%
Note: The investments made by the Company under equity method.
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IV. Capital Overview1. Capital and shares
(I) Source of share capital1. Description of capital increase in the most recent year
Year and Month
Issue price
Authorized Share Capital Paid-in Capital Remark Number of
shares (Thousand
shares)
Amount (NT$ 1,000)
Number of shares
(Thousand shares)
Amount (NT$ 1,000)
Source of share capital
Property other than cash
contributed as equity capital
Others
2002.07.29 Par value:
10 500,000 5,000,000 481,976 4,819,757
Capital increase out of capital reserves Capital increase of 21,684,850 shares Amount: 216,848,500 Capital increase out of earnings Capital increase of 26,593,850 shares Amount: 265,938,500
None Note 1
2003.08.22 Par value:
10 500,000 5,000,000 498,209 4,982,093
Capital increase out of capital reserves Capital increase of 14,348,901 shares Amount: 143,489,010 Capital increase out of earnings Capital increase of 1,884,700 shares Amount: 18,847,000
None Note 2
2004.07.20 Par value:
10 618,000 6,180,000 529,695 5,296,950
Capital increase out of capital reserves Capital increase of 14,946,279 shares Amount: 149,462,790 Capital increase out of earnings Capital increase of 16,539,420 shares Amount: 165,394,200
None Note 3
2005.08.08 Par value:
10 618,000 6,180,000 558,227 5,582,273
Capital increase out of capital reserves Capital increase of 10,393,900 shares Amount: 103,939,000 Capital increase out of earnings Capital increase of 18,138,400 shares Amount: 181,384,000
None Note 4
2007.08.20 Par value:
10 618,000 6,180,000 582,520 5,825,204
Capital increase out of capital reserves Capital increase of 11,064,546 shares Amount: 110,645,460 Capital increase out of earnings Capital increase of 13,228,546 shares Amount: 132,285,460
None Note 5
2008.08.11 Par value:
10 750,000 7,500,000 624,600 6,246,000
Capital increase out of earnings Capital increase of 42,079,608 shares Amount: 420,796,080
None Note 6
2009.07.31 Par value: 750,000 7,500,000 655,600 6,556,000 Capital increase out of None Note 7
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Year and Month
Issue price
Authorized Share Capital Paid-in Capital Remark Number of
shares (Thousand
shares)
Amount (NT$ 1,000)
Number of shares
(Thousand shares)
Amount (NT$ 1,000)
Source of share capital
Property other than cash
contributed as equity capital
Others
10 earningsCapital increase of 31,000,000 shares Amount: 310,000,000
2010.06.21 Par value:
10 750,000 7,500,000 638,467 6,384,670
Decrease in capital of treasury shares Capital decrease of 17,133,000 shares Amount: 171,330,000
None Note 8
2012.01.04 Par value:
32 750,000 7,500,000 700,967 7,009,670
Capital increased by cash Capital increase of 62,500,000 shares Amount: 625,000,000
None Note 9
2013.12.10 Par value:
10 750,000 7,500,000 689,163 6,891,630
Decrease in capital of treasury shares Capital decrease of 11,804,000 shares Amount: 118,040,000
None Note 10
2014.06.09 Par value:
10 750,000 7,500,000 683,163 6,831,630
Decrease in capital of treasury shares Capital decrease of 6,000,000 shares Amount: 60,000,000
None Note 11
2018.10.05 Par value:
10 750,000 7,500,000 679,763 6,797,630
Decrease in capital of treasury shares Capital decrease of 3,400,000 shares Amount: 34,000,000
None Note 12
2019.02.22 Par value:
10 750,000 7,500,000 669,763 6,697,630
Decrease in capital of treasury shares Capital decrease of 10,000,000 shares Amount: 100,000,000
None Note 13
Note 1: Approval date for capital increase and Reference Number June 24, 2002, Taiwan Finance Certificate (1) Zi No.0910233860, and July 29, 2002, Jing Shou Shang Zi No.09102295820
Note 2: Approval date for capital increase and Reference Number July 17, 2003, Taiwan Finance Certificate (1) Zi No.0920138676, and August 22, 2003, Jing Shou Shang Zi No.09201350101
Note 3: Approval date for capital increase and Reference Number June 4, 2004, Taiwan Finance Certificate (1) Zi No.0930124996, and July 20, 2004, Jing Shou Shang Zi No.09301127630
Note 4: Approval date for capital increase and Reference Number June 24, 2005, Taiwan Finance Certificate (1) Zi No.0940017241, and August 8, 2005, Jing Shou Shang Zi No.09401148140
Note 5: Approval date for capital increase and Reference Number July 3, 2007, FSC Certificate (1) Zi No.0960033645, and August 20, 2007, Jing Shou Shang Zi No.09601197760
Note 6: Approval date for capital increase and Reference Number July 7, 2008, FSC Certificate (1) Zi No.0970033850, and August 11, 2008, Jing Shou Shang Zi No.09701198910
Note 7: Approval date for capital increase and Reference Number July 1, 2009, FSC Certificate Fa Zi No.0980032785, and July 31, 2009, Jing Shou Shang Zi No.09801172330
Note 8: Approval date for capital decrease and Reference Number June 21, 2010, Jing Shou Shang Zi No.09901127450
Note 9: Approval date for capital increase and Reference Number November 20, 2012, FSC Certificate Fa Zi No.1010048919, and January 4, 2013, Jing Shou Shang Zi No.10201011010
Note 10: Approval date for capital decrease and Reference Number December 4, 2013, Jing Shou Shang Zi No.10201243530
Note 11: Approval date for capital decrease and Reference Number June 9, 2014, Jing Shou Shang Zi No.10301100130
Note 12: Approval date for capital decrease and Reference Number October 5, 2018, Jing Shou Shang Zi No.10701125500
Note 13: Approval date for capital decrease and Reference Number February 22, 2019, Jing Shou Shang Zi No.10801019350
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2. Class of the shares held up to the date of publication of the annual reportClass of shares
Authorized Share Capital Remark
Outstanding shares (listed stock) Unissued shares Total Common stock 669,763,000 80,237,000 750,000,000
3. Information on shelf registration: Nil.
(II) Shareholder StructureApril 20, 2019
Shareholder Structure
Government agencies
Financial institutions
Other legal persons
Foreign institutions and individuals
Individuals Treasury Shares Total
Headcount 4 5 58 171 29,265 1 29,504 Number of shares held
157 1,568,082 167,805,996 111,393,076 361,495,689 27,500,000 669,763,000
Shareholding %
0.00% 0.23% 25.05% 16.63% 53.98% 4.11% 100.00%
Note: The first TWSE/GTSM listed or emerging market companies shall disclose the proportions of their shares in Mainland Chinese investors; Mainland Chinese investors refer to the people, legal persons, groups, other institutions from Mainland Area or their organizations investing in third areas, as defined in Article 3 of the Measures Governing Investment Permit to the People of the Mainland Area: Not applicable.
(III) Shares Diversification1. Ordinary shares
April 20, 2019 Shareholding grading Number of shareholders Number of shares held % of shareholding
1-999 13,767 3,387,335 0.51%
1,000-5,000 11,366 24,729,272 3.69%
5,001-10,000 2,103 15,913,865 2.38%
10,001-15,000 657 8,257,665 1.23%
15,001-20,000 414 7,511,226 1.12%
20,001-30,000 399 10,164,755 1.52%
30,001-40,000 169 5,973,071 0.89%
40,001-50,000 117 5,417,919 0.81%
50,001-100,000 231 16,486,626 2.46%
100,001-200,000 102 14,390,624 2.15%
200,001-400,000 78 21,081,265 3.15%
400,001-600,000 21 10,014,157 1.50%
600,001-800,000 8 5,780,606 0.86%
800,001-1,000,000 9 8,157,579 1.22%
More than 1,000,001 shares
63 512,497,035 76.51%
Total 29,504 669,763,000 100.00%
2. Preferred shares: No
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(IV) List of major shareholders (Name, number of shares held by and shareholding ratio ofthe shareholders whose shareholding ratio is more than 5% or among top tenshareholders).
April 20, 2019 Name of major shareholders/shares Number of
shares held Shareholding
% Hsu, Kun-Tai 51,701,335 7.72%
Hsu Fu Chia 33,642,454 5.02%
Huatai Investment Co., Ltd. 31,046,144 4.64%
Hongwell Co., Ltd. 27,687,888 4.13%
The investment account of Morgan Stanley & Co. International Limited is held in escrow by HSBC Bank (Taiwan) Limited.
22,535,064 3.36%
Youkang Electronics Co., Ltd. 19,153,000 2.86%
Hsu Li Hsin 18,061,568 2.70%
KAPOK Computer Co., Ltd. 16,966,596 2.53%
Lin Feng Chu 16,371,784 2.44%
Hsu Cheng Hsin 14,626,156 2.18%
(V) Information about market value per share, net value per share, earnings per share, anddividends per share in the most recent two years
Unit: NT$ Year
Item 2017 2018
Up to March 31st 2019
Market value per share (Note 1)
Maximum 33.55 36.7 30.8Minimum 26.7 23.5 28.95Average 28.51 30.24 29.7
Net value per share (Note 2)
Before distribution 61.89 61.55 65.07
After distribution 61.89 Note 9 Note 9
Earnings per share
Weighted average shares (thousand shares)
642,716 628,146 615,502
Earnings per share (Note 3)
Before retroactive adjustment
1.12 2.32 0.82
After retroactive adjustment
1.12 Note 9 註 9
Dividends per share
Cash dividends 0.8 Note 9 Note 9
Gratis Stock dividends from retained earnings
- Note 9 註 9
Allotment of shares
Allotment of shares out of capital surplus (yuan)
- Note 9 註 9
Retained dividends (Note 4) - Note 9 Note 9 Analysis of return on investment
Price-to-earning ratio (Note 5) 25.46 13.03 36.22 Price to dividend ratio (Note 6) 35.64 Note 9 Note 9 Cash dividend yield (%) (Note 7) 2.81 Note 9 Note 9
*If stock dividends are allocated with capital increase out of earnings or capital reserves, the information onmarket price and cash dividends adjusted retrospectively based on the amount of stock dividends to be allocated should be disclosed.
Note 1: The highest and lowest market prices for common shares for each year should be listed, and the average market price for each year should be calculated based on the annual transaction value and volume.
Note 2: Please fill it out by reference to the number of shares that have been issued at the end of the year, and the allocation of dividends resolved at the general meeting of the next year.
Note 3: If retrospective adjustments are required due to circumstances such as free-gratis dividends, the earnings per share before and after such adjustments should be presented.
Note 4: If according to the conditions for issuance of equity securities, the dividends that are not issued in the current year shall be transferred to the year when there are earnings, the accumulated unpaid
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dividends for the year ended shall be disclosed. Note 5: Price-to-earning ratio = average closing price per share / earnings per share for the year. Note 6: Price to dividend ratio = average closing price per share / cash dividends per share for the year. Note 7: Cash dividend yield = cash dividends per share / average closing price per share for the year. Note 8: The net value per share and earnings per share should be filled out with the information audited
(reviewed) by accountants in the most recent quarter up to the date of publication of the annual report. The remaining fields should be filled out with the information for the year up to the date of publication of the annual report.
Note 9: There is no statement for distribution of earnings resolved at the shareholders' meeting.
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(VI) The Company's dividend policy and implementation status:1. Dividend policy as set out in Article 27 of the Articles of Association:
The Company is engaged in electronic high-tech industry. Based on the industrialdevelopment vision, capital expenditure needs, sound financial planning andprotection of investors' rights and interests, the Company's dividends shall beallocated by taking capital reserves, retained earnings, financial structure andoperating conditions into comprehensive consideration. To achieve the goal ofmaintaining stable dividends, cash dividends must not be less than 10% of the totaldividends.If it has a surplus in its annual final accounting, our company shall pay taxes andmake up for its losses according to law, and accrue 10% of statutory surplus reserve,except when the statutory surplus reserve has reached the total capital. After aprovision for or reversal of special surplus reserves is made according to the relevantlaws and regulations, for the undistributed earnings at the beginning of the periodrecognized as the accumulated distributable earnings for shareholders, the Board ofDirectors shall propose a statement for distribution of earnings, and submit it to theshareholders’ meeting for resolution. The dividend allocated shall be no less than10% of the earnings for the current year.Allocation of dividends is as follows:
Allocation of Dividends by KAPOK (2362) Unit: Yuan
Year Cash
dividends
Stock dividends
from retained earnings
Stock dividends
from capital reserves
Stock dividends
Total Employee
stock bonus%
2018 0.2000 0 0.8000 0 1.0000 0 2017 0.0000 0 0.8000 0 0.8000 0 2016 0.7000 0 0 0 0.7000 0 2015 1.1220 0 0 0 1.1220 0 2014 2.5000 0 0 0 2.5000 0
2. Allocation of dividends for 2018 proposed for discussion at the general meetingfor 2019:(1) Cash dividends: The dividends to be allocated at the shareholders’ meeting are
RMB 642,263,000 yuan, including RMB 128,452,600 yuan of cash dividends tobe distributed at RMB 0.2 yuan per share, and RMB 513,810,400 of cash out ofcapital reserves to be distributed at RMB 0.8 yuan per share.
(2) Stock dividends: Nil.(3) Expected changes in the dividend policy: Nil.
(VII) Impact of the proposed free-gratis dividends on the Company's business performanceand earnings per share at the meeting of the shareholders’ meeting: Not applicable.
(VIII) Remuneration for employees, directors and supervisors: (Unit: NT$ 1,000)1. The percentage or scope of remuneration for employees and directors as set out in
the Articles of Association of the Company.According to the Company's Articles of Association, if there is a balance calculatedby deducting the accumulated losses in light of the profitability of the current year,5%~15% of such balance shall be set aside as employee's remuneration, and nomore than 1% shall be set aside as the remuneration for directors.
2. The amount of remuneration for employees, directors and supervisors estimated andpresented in the current period shall be calculated based on the number of sharesdistributed to employees as remuneration, or actual amount paid to employees ifdifferent from the estimated amount. .
(1) Basis for estimation of the bonuses for employees, remuneration for directorsand supervisors in the current period:The employee's remuneration (dividends) estimated by the Company for 2017
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and 2018 was $95,600,000 and $65,700,000 respectively; the estimated amount of remuneration for directors was $12,300,000 and $9,300,000 respectively, the aforesaid amounts shall be accounted for in the Salary and Wages; In light of the profitability of 2018, the remuneration for employees and directors were estimated at 5% to 15%, and no more than 1% respectively, consistent with such amount as resolved by the Board of Directors. The above employee's remuneration will be paid in cash.
(2) The accounting treatment for difference between the calculation basis of thenumber of shares for which the dividends are allotted and the actual allotmentamount, and estimated amount: the Company has not allocated stock dividendsfor employees and directors in 2017.
(3) Any difference between the actual allotment amount and the estimated amountshall be handled based on the changes in accounting estimates, and includedin the profit and loss of the next year.
3. Distribution of remuneration adopted by the Board of Directors:
(1) Amount of the remuneration paid to employees, directors and supervisors in cashor stock. If there is a difference between the estimated amount and the amountof recognized expenses, the difference, cause and treatment should bedisclosed:After the proposal of the remuneration paid to employees, directors andsupervisors for 2018 was discussed and approved at the meeting of the Boardof Directors on March 27, 2019, the Board of Directors resolved to pay$95,600,000 as employee's remuneration, and $12,300,000 as theremuneration for directors and supervisors, consistent with such amount asrecognized and presented in the financial report for 2018.
(2) The proportion of employee remuneration paid in the form of shares to the netprofits after tax shown in the individual financial report plus the total amount ofemployee remuneration in the current period: not applicable because no free-gratis dividends are allocated in the current year.
4. The actual payment of remuneration to employees, directors and supervisors in theprevious year (including the number of shares, amount and share prices), and thedifference from the recognition of remuneration for employees, directors andsupervisors (if any), reasons and how to deal with such difference:In 2017, with statutory surplus reserves, and other factors taken into consideration inlight of net profits after tax for the year, the remuneration for employees anddirectors were estimated at 5% to 15%, and no more than 1% respectively. TheBoard of Directors resolved to pay $65,700,000 as employee's remuneration, and$9,300,000 as the remuneration for directors and supervisors, consistent with suchamount as recognized and presented in the financial report for 2017.
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(IX) Repurchase of shares by the Company:
Number of repurchases 16 17 18
Period of repurchase 2018.02.09~
2018.04.08
2018.04.11~
2018.06.08
2018.11.20~
2019.01.14
Purpose of repurchase Transfer to employees Transfer to employees Transfer to employees
Interval price of repurchase NTD25-32/share NTD21-44/share NTD20-38/share
Type and quantity of repurchased
shares
Common stock
10,000,000 shares
Common stock
10,000,000 shares
Common stock
7,500,000 shares
Total amount of repurchased
shares
NTD294,157,220 NTD313,762,472 NTD225,566,268
Average unit price of repurchased
shares
NTD29.42 NTD31.38 NTD30.08
Number of shares that have been
canceled and transferred 0 share 0 share 0 share
Number of shares of our company
accumulatively held 10,000,000 shares 20,000,000 shares 27,500,000 shares
The percentage of the number of
shares of our company
accumulatively held in the total
number of issued shares (%)
1.49% 2.99% 4.11%
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2. Information on Corporate Bonds :
Type of Corporate Bonds (Note 3)
1st Secured Corporate Bonds in 2015 (Note 5)
Issuance Date 2015.08.28 Face value NTD 1000,000
Place of issuance and transaction (Note 3)
Taipei Exchange
Issue price 100 percent of the denomination (NTD 100) Total amount NTD 5 billion
Interest rate 1.5% of annual interest at fixed rate Period 5-Year period expiring on August 28, 2020
Guarantor Taiwan Cooperative Bank Trustee JihSun International Commercial Bank Co., Ltd. Underwriter Taiwan Cooperative Securities Certified lawyers Chiu Ya Wen from Handsome Attorneys-at-Law
CPAs PwC Taiwan Feng Min Chuan and Chang Ming Hui
Repayment method Principal payable at maturity
No principal repaid NTD 5 billion Redemption or early repayment clause None Restricted conditions (Note 4) None Name of the credit rating agency,
evaluation date, evaluation of corporate bonds, etc.
Taiwan Ratings twAA+ 2018.1.19
Other rights attached
Number of the conversed (exchanged or subscribed) common shares, overseas depositary receipts or other securities up to the date of publication of the annual report
Not applicable
Measures for issuance and conversion (exchange or
subscription)
Not applicable
Impact on issuance and conversion, exchange or subscription method, and issuance
conditions on possible dilution of equity, and the existing shareholders' equity
Not applicable
Name of the institution that holds the subject m a t t e r f o r e x c h a n g e i n e s c r o w
None
Note 1: The corporate bonds issued include the corporate bonds issued by the publicly listed and privately held companies. The corporate bonds to be issued by a public offering company refer to those that have entered into force after approved at the meeting; the corporate bonds to be issued by a private offering company refer to those approved by a resolution passed by the Board of Directors.
Note 2: The number of fields depends on the actual number of issuance. Note 3: Applicable for overseas corporate bonds. Note 4: such as limitation on the issuance of cash dividends, foreign investments or the requirements for maintaining a certain
proportion of assets. Note 5: Private placement bonds should be marked obviously. Note 6: For the conversion, exchange of, and the general declaration about issuance of corporate bonds or the corporate bonds
attached with stock warrants, the information on the corporate bonds conversed, exchanged and generally declared for issuance, and the corporate bonds attached with stock warrants should be disclosed in the form of a table.
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3. Information on Preferred Shares: the Company is exempt from disclosure under no suchcircumstances.
4. Information on Overseas Depository Receipts: the Company is exempt from disclosureunder no such circumstances.
5. Information on Employee Stock Options and Restricted Stocks: the Company is exempt fromdisclosure under no such circumstances.
6. Status of New Share Issuance in Connection with Mergers and Acquisitions or TransferredCompany Shares: the Company is exempt from disclosure under no such circumstances.
7. The implementation of the fund utilization plan: the Company is exempt from disclosureunder no such circumstances.
(I) The details of the plan: Up to the first quarter before the publication of the annual report,if the previous issuance or private placement of securities has not been completed, or hasbeen completed in the last three years without remarkable achievements, the plan forprevious issuance or private placement of securities should be explained in detail,including previous changes thereto, the source and application of funds, the reasons forchanges, the benefits before and after the changes, and the date when such changesthereto were reported at the shareholders meeting, and the date of entry of the planinto the information reporting website designated by the meeting shall be published: theCompany is exempt from disclosure under no such circumstances.
(II) Implementation status: For the purpose of the plan described in the preceding paragraph,the implementation status and the comparison with the originally expected benefits shallbe analyzed item by item up to the first quarter before the publication date of the annualreport, if the implementation progress or the benefits fail to reach the expected target,the reasons for failure, the impact on shareholders' equity and the improvement plan shallbe specified: the Company is exempt from disclosure under no such circumstances.
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V. Operational HighlightsI. Business Overview
(I) Business Scope1. Principal business activities:
(1) PC Business Unit: R&D, design, production, sales and after-sales services of portablecomputers and borderline products.
(2) China's Distribution Division: The deployment and leasing of domestic sales channels inthe Buynow Malls in China.
2. Revenue breakdown: The sales of the PC Business Unit accounted for 74% of theconsolidated operating revenue, and the rental income from Buynow Malls made byChina's Distribution Division and other operating income accounted for 26% in 2018.
3. The Company's current goods (services): the PC Business Unit is engaged in manufacturingand sales of notebooks; and rental income is primarily earned from the Buynow Malls.
4. New goods and services that the PC Business Unit plans to develop:(1) Gaming/Entertainment Notebook: For the Enthusiastic game players to whom
customers attach importance, the product planning in 2019 is specifically designedfor application of technologies, such as Real-Time-Ray-Tracing, Artificial Intelligence(AI), Deep Learning Super Sampling (DLSS), Programmable Light Shading, HighDynamic Range (HDR), 3D Display Chips, Somatosensory Sensors, Virtual Reality (VR),Augmented (AR), Mixed Reality (MR), Eyes Tracking, Smart Voice Assistant, etc., andintroduction and integration of the (Intel)Coffee Lake Refresh and the Comet Lakeplatform, as well as the full range of high-performance gaming notebooks madefrom high-performance GPU of the NVIDIA Turing.
(2) Commercial Notebook: The Company plans to develop business models which aredesigned for the mature market for replacement and upgrading of notebooks byenterprises, the emerging market, the initial procurement market for governmentsand enterprises, and business needs of special application. In 2019, the Companywill introduce the S series of Intel's Coffee Lake Refresh platform, and server classprocessors, and commercial notebooks of water repellent design and Mil Spec. whichintegrate Intel TPP, vPRO and TPM 2.0 with fingerprint identification technology; Inaddition, for the market of 3D/2D professional drawing, and 3D animationproduction, the Company will continue to produce the niche commercial notebookswith the NVIDIA Quadro Cards.
(3) Main Stream Notebook: In addition to launching new products for the high-end gamemarket and the business market, the Company will also develop full-serial and full-size models for mainstream notebooks. In 2019, the Company will introduce CoffeeLake Refresh and Gemini Lake Refresh platform, together with Intel or NVIDIA entrygraphics cards, and 11 to 17 inch of mainstream full range models to mature andemerging markets, as as to satisfy the replacement and procurement requirementsof government sectors and educational institutions, as well as the initial purchasedemand of large-sized enterprises and SMEs, and consumer/household market.
(4) Energy-saving, long-lasting and environmentally-friendly notebooks: Thenotebooks currently produced by the Company are in line with the latest energy-saving and environmentally-friendly regulations. On the one hand, the usage rate ofrecyclable materials is improved, and the environmental protection standards ofvarious countries are met. On the other hand, product design is consistent with thelatest energy-saving regulations, and customers' requirements for Long Battery Life,in order to maintain competitive advantage, and create more profits.
5. Exhibition Stores of the China's Distribution Division:(1) Asset Business Division: At present, the projects under construction have been
completed. The shopping malls in Shantou and Dezhou have opened for business inDecember, 2018. The projects in Luoyang, Jinzhou and Anshan have beencompleted, with the current strategy for entire tenancy or sales underway. Atpresent, there are only office buildings for sale in Shantou, Anshan and Jinzhouamounting to RMB 500 million, which are expected to be sold in 2019.
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(2) Buynow Malls: Buynow Malls have undergone a positive transformation since theimpact of the online e-commerce in 2013. In addition to the original IT income, thereis catering income, e-sports revenue, and self-operated income from Lezhi smartshopping malls and coffees. The multi-functional and high-tech smart shopping mallin which 25 stores have consolidated into 19 stores makes the only “Science andTechnology Intelligent Plaza” in the local market, and is developing towards the“technical, intelligent, living and fashionable” shopping mall.
(3) Hyatt Place Luoyang: In 2016, Hyatt Place Luoyang opened for business as aninvestment business in which the Group holds 100% of shares. The operatingrevenue contributed NTD166 million in 2018. As a result of the operating revenuegrowth, EBITDA has turned positive, however, because the occupancy rate is only50%, no profits have been contributed to the parent company. With the arrival ofthe Luoyang Spring Peony Season, only by devoting more efforts to increase theoccupancy rate can we make profits.
(4) (4) The first year of Chicony: In 2018, the shopping malls in the newly built ChiconySquares in Shantou and Dezhou were mainly department stores managed by theteam of Digitimes as an investment business in which the CLEVO holds 100% ofshares.
(II) Industry Overview●Industry overview of the PC Business Unit
1. The current situation and prospect of the industryIn 2018, the protectionism wave rose as the US President Trump announced AmericaFirst, starting the Sino-US trade war. Besides, interest rates risen for four times by theUS Federal Reserve (Fed), tightening dollar liquidity and wild fluctuations in the oilprices, and rapid depreciation of currencies in the emerging market have severelyaffected the economy of emerging markets. According to the International MonetaryFund (IMF), the global economic growth rate in 2018 has been reduced to 3.7%, thesame as 2017, from the originally expected stable growth. The global notebookmarket has raised the costs of materials, and also suppressed the momentum of ordershipments due to the shortage of and advance in prices for DRAM, VRAM, SSD, MLCCand CPU. In 2018, global notebook shipments decreased by 0.5% to 163 million units.In 2019, INTEL refocused attention of the CPU supply to the 14nm process. The marketexpects notebook shipments to grow slightly by 164 million units in 2019, an annualincrease of 0.3%.
2. Relationship with upstream, middle-stream, and downstream companies:(1) The upstream industry of notebooks covers a wide range of industries, including
CPUs, chipsets, GPUs, memory modules, passive components, rectifier diodes,printed circuit boards, connectors, and other industries. In 2019, Coffee LakeRefresh and Comet Lake platforms introduced by Intel, a major CPU processorvendor, and the Castle Peak and Matisse platforms launched by AMD,another major CPU processor vendor, and the next-generation graphics chipsintroduced by the display chip manufacturer NVIDIA, will continue to dominatethe trend of notebook functions, with the specifications defined by them servingas the reference for development of products by the related upstream industries.The development trend of and prices for DDR 4/DDR4L/DDR5 particles andGDDR6 particles in memory modules, as well as the introduction of new platformprocessors and graphics chips have become the key factors affecting the finaldesign of and selling prices for notebooks.
(2) The notebook midstream industry also covers a wide range of applications,including displays, optical lenses, cabinets, keyboards, power supplies, batterymodules, interface cards, motherboards, and wireless modules (such as Bluetoothand 802.11X modules), communication modules (such as LTE and LTE-A) andstorage media (such as hard disks, SSDs and eMMCs), and other industries. Thetrend in prices for key components, such as liquid crystal displays (such as high-resolution panels, 3D, wide viewing angle panel technology curved panels and
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HDR), DRAM modules and NAND Flash will also affect the final design of and selling prices for notebooks.
(3) The downstream manufacturers of notebooks include the vendors of systemdesign, manufacturing and sales. The Company is a professional designer andmanufacturer of notebooks. Based on the type of target customers, the marketsfor notebooks can be divided into OEM/ODM/EMS market and Clone market.OEM/ODM currently has major global manufacturers including Quanta, Compal,Inventec, Wistron and Pegatron who mainly provide services to the top tenmanufacturers in the world, and a small number of regional channel brandmanufacturers; EMS market currently only has one manufacturer, Foxconn (whohas faded out of the PC OEM business), who mainly provides services to the topten manufacturers in the world, but the quantity of notebooks and order volumeare not as good as the OEM/ODM manufacturers. Different from the nature ofthe aforementioned manufacturers, the Company's notebook products are mainlysold to regional channels or brands, and specialized in the Clone notebookchannel market.
3. Product trends and competition:(1) Development trend of notebook products
a、Brand manufacturer, New Blue Ocean, turns to high-priced and high-margin e-sports notebooks
According to the IDC research report from the research institute, the sales volume of notebooks for global e-sports market were estimated to be 9.95 million units in 2018, with an annual growth rate of 14.1% over the traditional notebook market. The proportion of the sales volume in 2018 to the overall notebook market has grown from 5.4% in 2017 to 6.2% in 2018. It is estimated that the total shipments of e-sports notebooks in 2019 will exceed 11 million units, with the proportion to total notebooks expected to increase to 7.0%.
Source: IDC, 12/2018
b、Integrating AI, DLSS and RTRT makes e-sports applications hotter Since 2018, NVIDIA has been actively depicting the forward-looking
predictions of artificial intelligence and Real-Time-Ray-Tracing in the field of computer graphics. The VR interface standard VirtualLink recently introduced by NVIDIA has first brought in instant ray tracing technology in the history of GPU development. By dint of GLSS imaging technology, NVIDIA brings more detailed images to games and CG, making images more detailed and realistic, as a new way to improve game quality.
Since September 2018, NVIDIA has cooperated with development teams, such as 4A Games, Electronic Arts, Epic Games, Remedy Entertainment, and Unity, and has introduced new technologies of RTX instant light and shadow tracking. At least 25 DLSS games were released in 2018. In 2019, several popular
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masterpieces will appear on the market one after another, sparking a flurry in upgrades of e-sports notebooks.
c、The notebooks weighing 1.3 kg will become a new highlight in the notebook market
According to international market observations, the demand for e-sports notebooks and (super) light notebooks is expected to grow continuously in 2018, especially the thin and light notebooks, which will have more room for growth since 2019.
Looking back on recent years, the e-sports notebooks, e-sports events, booming live broadcast industry, and the cool appearance of notebooks have become the focus of the notebook market. The top ten brand manufacturers are actively investing in such market, and at the same time, has delivered remarkable sales performance. For the vast majority of demand groups in the market, since Intel introduced the design of Ultrabook, various manufacturers have introduced various design forms, such as Convertible and Detachable light notebooks weighing less than 1.3 kg or even 1 kg, fast charging (with battery life of up to 20 hours), with narrow frame, and multiple safety certification (even in line with US military regulations MIL-STD 810G protection standards), and made from aerospace grade materials. According to Gartner and MIC research report, in 2018, shipments of light notebooks were12 million units, and are estimated to reach 25 million units in 2019. It is expected that major brands will actively launch ultra-lightweight notebooks below 1 kg in 2019. The Company expects to launch the first ultra-lightweight notebooks weighing less than 1 kg in 2019.
d、New system platform 2019 is a new beginning for the notebook industry. The notebook platform is
more efficient than the previous generation, covering standard notebooks, ultra-lightweight notebooks, 2-in-1 notebooks, notebooks that import smart voice assistants, and e-sports notebooks that integrate AR/VR/MR, instant light and shadow tracking, and OLED and HDR screens which will evolve comprehensively. In addition to the 14nm advanced semiconductor process design and manufacturing, the new generation of processors will increase the production capacity, and reduce the waste heat, exploding powerful computing performance and improving IC integration. CPU major manufacturers continue to lead the evolution of the system architecture, and promote the transformation of the notebook industry. (a) The new platform launched by Intel in 2019 is summarized as follows
In 2019, with regard to hardware series of the standard notebooks,Intel’s new generation of Coffee Lake Refresh (Gen 9) mobile platform willbe officially launched. The whole series will be imported into the built-indual graphics core architecture. The next-generation mobile platform withthe market name Core i9 series, Coffee Lake Refresh, will be the new mainforce, with significant improvements in CPU performance and built-ingraphics performance. Coffee Lake Refresh will be available with fourdifferent configurations, including the Coffee Lake S series processors, astandard dual-chip platform, with the same architecture as Intel, and eight-core, six-core, quad-core or dual-core processors. With 300 series PCH, andconfiguration of Intel’s graphics chips, Coffee Lake RefreshCoffee LakeRefresh is mainly applied for high-end notebooks with high displayrequirements; the second configuration goes to single-package and dual-chip Coffee lake H, U and Y series processors which are packaged with thePCH to make wiring in the notebooks easier, and save more internal spaceto hold larger capacity batteries to meet the requirements of ultra-lightweight notebooks, tablets and 2-in-1 model for lightness, low powerconsumption and long life time.
(b) The new platform launched by AMD in 2019 is summarized as followsAMD is expected to launch the Zen 2 architecture Ryzen 3000 series,
i.e. two system processors with new architecture in 2019. The development
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code “Matisse” is the Desktop CPU, replacing the “Pinnacle Ridge” Desktop CPU in 2018; and the other development code “Picasso”, the Desktop/Notebook APU designed for SoC, replacing the 2018 “Raven Ridge”. “Matisse” will be upgraded to the Zen 2 architecture, with a new 7nm process, but the AM4 package will be maintained. “Picasso” is the slightly upgraded version of the Ryzen APU. The architecture is unchanged, with emphasis on improving performance and energy efficiency. AM4 package still applies for desktops, and FP5 package applies for the mobile version.
The first wave of the new processors with Zen+ architecture will be based on the Ryzen 7 specifications. It is expected to start with the Ryzen 7 2800X. The new Ryzen 5 and Ryzen 3 series processors will be launched in March 2019. The Zen+ architecture processor is code-named “Matiss, with the 8-core design, and the AM4 uPGA interface design. The 400-series chipset motherboard code-named Promontory will be used, while the Zen+ architecture processors are expected to competed with the Intel Core 9 series.
e、Graphics chip processors NVIDIA launched a new generation of GeForce graphics processors in 2019,
using the “Turing” chip graphics processors. Turing is NVIDA’s new generation of GPU architecture, enhancing the power of the previous generation of Pascal architecture. The new generation of game cores overcomes many of the most complex light sources and drawing challenges in visual operations. The GeForce series of graphics processors bring a host of new technologies to game players, and are more power efficient than GPUs at the same level.
(2) Competition of notebook productsAccording to the Global E-sports Market Report in 2019 issued by the Dutch
market research company, Newzoo, the global e-sports market value reached US$128.9 billion in 2018. It is estimated that the scale will grow to US$157.3 billion by 2020, with a CAGR of 7.7% from 2018 to 2020. The global e-sports audience will increase from 256 million in 2016 to 454 million in 2019, up 15.0% year-on-year. In 2020, the global e-sports audience will reach nearly 470 million people. The market research institutions are optimistic about the double-digit growth in the hardware production value of the e-sports market in 2018. The research institute IDC pointed out that the replacement demand of e-sports notebooks for every three years has become a new growth momentum of brand factories, mainly driven by on-line games, video cards and Intel’s new architecture processors. The purchasing power of e-sports notebooks is concentrated at US$ 1,000 to US$1,500, plus the surrounding equipment, an e-sports notebook is about US$350-500 higher than a standard notebook. According to estimates by e-sports research institutes, hardware accounts for about 20% of the overall game output value. The sales of global e-sports hardware in 2018 was about US$39.7 billion, and it is estimated that the sales will exceed $45 billion in 2019, with a CAGR of 9.3% from 2016 to 2020. Such performance is far superior to the standard notebooks with a decline in output value during the same period. Therefore, global brand manufacturers are actively investing in the e-sports notebook market, trying to attack the New Blue Ocean.
According to the Global E-sports Market Report in 2019 issued by the market research company, Newzoo, the output value of China’s e-sports market has reached US$35.4 billion, accounting for 26% of the global E-sports market, making China the single largest market in the world. Besides, China currently has the most e-sports players in the world. With great support from the official and private sectors, a number of national and international e-sports events have been launched throughout China. China’s e-sports industry has entered a high-speed growth period, and it is expected to boost the growth of the Company’s notebook business focusing on e-sports notebooks in China.
(III) Technology and R&D Overview1. The research costs spent for the year ended March 31, 108 were NTD 128,335
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thousand, accounting for 3.8% of the annual turnover of the PC Business Unit. 2017: NTD 520,312 thousand, accounting for 3.7% of the annual turnover of the PC Business Unit. 2018: NTD 528,608 thousand, accounting for 3.6% of the annual turnover of the PC Business Unit. The Company invests a considerable proportion of its funds each year in research and development. The research expenses have exceeded NTD 500 million yuan for the most recent year, indicating that the Company has spared no effort to improve the quality of new products and production technology.
2. The technologies or products developed successfully for 2018 and up to April 30, 2019In the year of 2018, the Company combined technology, fashion and environmental
protection trends with product design. In addition to fashion appeals in appearancedesign, it continues to develop a series of new models with stylish features and highadded value, such as: wide color gamut panel (NTSC > 95%), wide viewing angle panel(such as IPS/AHVA technology), 144Hz/120Hz ultra-shadow technology, ten-fingertouch technology and high-resolution (4K, 3K) panel, eye tracking technology,AR/VR/MR application, wisdom Voice Assistant and Gamma Pad. Innovatively developnew computer products to incorporate more commercial applications in the future, andadd new high-yield product lines. Provide a complete product portfolio to meet the needsof consumers in different fields around the globe, and strive to develop more innovativeand high-value products:
(1) Based on the demand for energy conservation and environmental protection, theCompany continues to develop new energy-saving products by dint of energy-saving innovative technologies, in addition to Energy Star 6.x certification, it meetsvarious international environmentally-friendly standards, such as Restriction onHazardous Substances (RoHS), Waste Electrical and Electronic Equipment (WEEE)and ErP (Energy-related Product), etc., by effectively reducing the generation andemission of toxic substances in the production process, and promoting environmentalprotection and green technology. The purpose is to enable consumers to identifyenergy-efficient products through energy labels on electronic or electrical products,thereby reducing the greenhouse effect. Currently, the Company’s Energy Star 6.xcertified models are as follows: P870TMx(-G), P775TMx(-G), P750TMx(-G), P950Ex series, P960Ex
series, N870EP6, N870EK1, N870EJ1, N870EL, N950TP6, N850EK1,N850EJ, N850EL, N860EP6, N870EZ, N850EZ, W950WU, W940WU,N250WU, N240WU, N130WU, N140WU, N230WU, N240GU,W51xGU, etc.
(2) In the high-end game market, we continue to upgrade the performance of thegraphics cards, and cooperate with the graphics card manufacturer NVIDIA todevelop faster computers in 2018, which are more effective in work, study andentertainment. P870TM1/TM (G-Sync): 17.3” 16:9 UHD (3840 x 2160) screen equipped
with Intel Core i9/i7-9xxxK and Core i7/i5/i3 8xxx series processorssupporting Intel XTU Over-Clocking technology. Equipped with single ordual cards (MXM3.0 TypeB) NVIDIA® GeForce GTX1080 and GTX 1070graphics cards, supporting up to 64GB DDR4 3000MHz (support XMP),supporting Microsoft DirectX 12, supporting up to 2 SATA 3 interfaceHDD/SSD, array RAID 0/1 is provided, SSD supporting 2 SATA / PCIeinterfaces can be used for array RAID 0/1.
P775TM1/TM (G-Sync): 17.3” 16:9 UHD (3840 x 2160) screen equippedwith Intel Core i9/i7/i5 9xxx and Core i7/i5/i3 8xxx series processorssupporting Intel XTU Over-Clocking technology. Equipped with GeForce RTX2080/2070/2060 display cards, supporting up to 64G DDR4 2666MHz(support XMP), supporting up to 2 SATA 3 interface HDD/SSD, array RAID0/1 is provided, SSD supporting 2 SATA / PCIe interfaces can be used forarray RAID 0/1.
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P750TM1/TM (G-Sync): 15.6” 16:9 UHD (3840 x 2160) screen equippedwith Intel Core i9/i7/i5 9xxx and Core i7/i5/i3 8xxx series processorssupporting Intel XTU Over-Clocking technology. Equipped with GeForce RTX2080/2070/2060, supporting up to 64G DDR4 2666MHz (support XMP),supporting up to 2 SATA 3 interface HDD/SSD, array RAID 0/1 is provided,SSD supporting 2 SATA / PCIe interfaces can be used for array RAID 0/1.
(3) In 2018, the Company launched a series of products targeting preservation of datasecurity for business applications at the international exhibitions, such as CES, CeBITand Computex, including support for Intel vPro Technology, TPP or TPM 2.0 withfingerprint identification models (including 15.6-inch N350Tx series, and 15.6-inchP955ETx series models compatible with NVIDIA workstation grade graphics cards). N350TV: Business market-oriented products, 15.6" 16:9 FHD (1920x1080)
displays equipped with Intel Core i7/i5 8xxxT processors, and IntelGraphics UHD 630 integrated graphics chips, compatible with dual channel32G DDR4 2666MHz memory, Intel vPro Technology and PTT, TPM 2.0 andfingerprint identification requirements, and supporting Microsoft's latestoperating system Windows 10 RS4.
N350TW: Business market-oriented products, 15.6" 16:9 FHD (1920x1080)displays equipped with Intel Core i7/i5 8xxxT processors, and IntelGraphics UHD 630 integrated graphics chips, compatible with dual channel32G DDR4 2666MHz memory, Intel PTT, TPM 2.0 and fingerprintidentification requirements, and supporting Microsoft's latest operatingsystem Windows 10 RS4.
P955ET3: high-end business market-oriented products (3D graphics andscientific research), 15.6” 16:9 UHD (3840 x 2160) screen equipped withIntel Core i7 8xxxHQ processors, based on Intel XTU Over-Clockingtechnology, equipped with NVIDIA Quadro P4200 graphics cards, andcompatible with 64G DDR4 2666MHz memory. The thickness of products isless than 1 inch, the thinnest models supporting workstation level graphicscards in the world.
P955ET1: high-end business market-oriented products (3D graphics andscientific research), 15.6” 16:9 UHD (3840 x 2160) screen equipped withIntel Core i7 8xxxHQ processors, based on Intel XTU Over-Clockingtechnology, equipped with NVIDIA Quadro P3200 graphics cards, andcompatible with 64G DDR4 2666MHz memory. The thickness of products isless than 1 inch, the thinnest models supporting workstation level graphicscards in the world.
(4) The Company has developed a full range of Intel Coffee Lake Refresh platformand Intel Gemini Lake products, and integrated wireless transmission frequency802.11x and WiGi, adding HDMI1.4b/2.0, eSATA, Thunderbolt 3, USB 3.1Gen1/Gen2 and Bluetooth 5.x Support, making Intel Coffee Lake Refresh a high-quality audio and video, and mobile computing platform supporting externaldevices; combined with the power saving Intel Coffee Lake Refresh platform, andultra-long-lasting battery life, 13.3” ultra-light portable laptops with touch panel,Wi-Fi, Bluetooth and LTE 4G wireless communication functions have been designed,and compatible with Web Camera and other features. E-sports flagship NB: P870TMx (G-Sync) series, P775TMx (G-Sync) series,
P750TMx (G-Sync) series, P950Ex series, P955EE6 series, P960Ex series,PB50Ex series and PA70Ex.
Video entertainment NB: N870EP6, N870EKx, N870EJx, N870EL,N950TP6, N860EP6, N850EKx, N850EJx, N850EL and N770/750WL,NB50Tx, NB60Tx, N970Tx, N960Tx and N950T.
Mainstream entry NB: N870EZ, N850EZ, NB50TZ, N770WU, N750WU,N250WU, N150ZU, N740WU, N240WU, N130ZU, N141ZU andN230WU.
Business NB: N350TV, N350TW, P955ET3, P955ET1, etc.
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Stylish and lightweight NB: N770GU, N750GU, N250GU, W515GU,W517GU, etc.
(5) In 2019, the Company continues to cooperate with processor manufacturer Intel todevelop a new series of products, featuring Coffee Lake Refresh and Comet Lakeplatforms, and compatible with NVIDIA next-generation independent graphicscards, and actively integrates VR/AR/MR, AI and light and shadow tracking, inorder to expand product diversification, develop superior multiplex processingtechnologies and extreme graphics performance, and for users to easily enjoy theperfect 3D effect applications, including maps, movies, on-line videos, photos,games, music and TV shows, whether they are home or out. The Company providesunique solutions to meet a variety of advanced computing needs, such as superiorgraphics and imaging capabilities and large-scale screen options, to surpass othermanufacturers at the same price, and provide a unique computing experience.
3. R&D plan in the future(1) Gaming and Entertainment NB computers
In the gaming field, the R&D strength of technology manufacturers is ultimatelydisplayed. The Company has been engaged in this field for many years, and has built up strong R&D strength. The models developed by the Company are also the most complete, from 15” to 17.3”, single drawing chip cards to dual graphics chips, with high-speed array disks from single storage (HDD/SSD) to multiple storage (HDD/SSD), to meet all the needs of the high-end gaming customers. The models developed by the Company rank first in the test evaluation, superior to many competitors. In 2019, the Company actively makes investment to improve the performance of various models, and introduce the products compatible with NVIDIA’s latest specification graphics processors, and Intel’s next-generation processors, and continues to maintain leading advantages with higher specifications.
Flagship game NB 17.3’’ NB: 775TMx (G-Sync), P970EN/EF/ED and PB70ED/EF (G-
Sync) successive NBs. 16.1’’ NB: P960EN / EF / ED successive NBs. 15.6’’ NB: P750TMx (G-Sync), P960ED and PB50ED/EF (G-Sync)
successive NBs. Home multimedia entertainment NB
17.3’’ NB: N970TF/TD, NB70TK1, NB70TJ1, NH70EDQ, N870EK1,N870EJx, N870EL, and N770WL successive NBs.
16.1’’ NB: N960TF/TD, NB60TK1, NB60TJ1, N860EP6, andN860EK1 successive NBs.
15.6’’ NB: N950TD, NB50TK1, NB50TJ1, NH50ED, H850EP6,N850EK1, N850EJx, N850EL, N750WL and other successive NBs.
(2) Commercial NBIn 2019, the Company will devote more efforts to its commercial product range,
and increase the proportion of commercial notebooks. In terms of NB size, it will focus on 15.6-inch models.
N350TV and N350TW successive NBs, as well as the P955ET3/ET1 seriesof NVIDIA's next-generation Quadro graphics cards.
(3) Mainstream NBFor mainstream notebooks, the Company plans to introduce a full range of
notebooks with Coffee Lake S/H and Kaby Lake U Core i3/i5/i7 six-core/quad/dual-core processors or Pentium or Celeron-class processors in 2019.
17.3’’: N870EZ, N770WU, W970PUQ, and other successive NBs. 15.6’’: N850EZ, NB50TZ, N750WU, N250WU, N150ZU, and other
successive NBs. 14.1’’: N740WU, N240WU, N141ZU, and other successive NBs. 13.3’’: N130ZU, N230WU, and other successive NBs.
(4) Light, environmentally-friendly and energy-saving notebooks of small sizeIn 2019, the new notebooks of small size are designed in combination with high-
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performance dual-core Intel Gemini Lake platform and low-power memory DDR4, featuring Wi-Fi, Bluetooth, 4G, WiMax, Web Camera and other flexible devices for expanding wider business opportunities.
N770GU, N750GU, N250GU, W515GU, W517GU, and other successiveNBs.
In 2019, in addition to investing more resources in the research and development of software and hardware, the Company actively cooperates with suppliers of processors and graphics chips to meet the needs of customers with a more complete product line, diversified, high-quality and multi-functional products, and to continue to develop blue ocean market opportunities for notebooks.
(IV) Long-term and short-term business development plans1. Short-term business development plan
(1) Strengthen cooperation with all customers, and provide comprehensive services inproduct planning, R&D, manufacturing, and after-sales services.
(2) Meet the needs of customers with diversified products of high quality and smallquantity, provide customers with fast delivery and technical support, so that thesource of customers can continue to grow steadily, and the market share of theCompany in the Clone market will be increased.
(3) Fully support the Mainland production base, increase production capacity, andreduce production costs.
2. Long-term business development plan NB Business Division
The annual quantity demanded for notebooks in the global market is more than 160 million units. At present, the Company's shipments are only 1.28 million units, leaving much room for growth. CLEVO has many years of experience in NB design, manufacturing, sales and service. It has continued to stand firm in the Clone niche market, unlike many competitors lost in the pursuit of rapid growth of quantity, CLEVO focuses on development of the products that meet customer needs, creating the win-win situation for customers and itself in the Blue Ocean field. In 2019, it aims at shipments of 1.52 million units, by continuing to improve market shares, creating sustainable win-win benefits with customers, and stabilizing the NO.1 position in the NB Clone market.
China Distribution Business Group
At present, Buynow Mall has become the only scientific and technological
intelligent plaza in the local market.Buynow Malls of China's Distribution Division have undergone a positive
transformation since the impact of the online e-commerce in 2013. In addition to renting out original IT stores, business operations include catering, e-sports, and proprietary trading of Lezhi smart shopping malls and coffees. The multi-functional and high-tech smart shopping mall makes the only “technical intelligence square” in the local market, and is developing towards the “technical, intelligent, living and fashionable” shopping mall. At present, compared with the same period, the operating revenue from 19 stores has reached CNY 670 million yuan, an increase of 1% year-on-year, and EBITDA is CNY 32.20 million yuan, an increase of 2% year-on-year, indicating that shopping malls have seen signs of steady recovery.
Continuous asset activation, continuous increase of cash flowThe operating benefits of China's asset projects are continuously calculated, the
operating benefits and opportunity costs of different stores are prudently evaluated, and transformation and improvement are continuously made, so as to maximize the interests of the group. Buynow Wuhan Store was sold in 2018. Our company recovered its investment real estate funds, cash flowed in, debt reduced and interest was saved. After the store was merged into Part 2 of Wuhan Store of CHICONY Square, the growth rate of revenue of Qunbai Wuhan Store increased from 7% to 10.8%, and the revenue reached CNY2.88 billion, which was the best for the overall operating benefit of the group in the future.
II. Overview of the Market and Production and Sales:
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(I) Market Analysis1. Territory of major products
The Company focuses on sales in the channel market mainly for export. In the past threeyears, the distribution of sales in the export regions is as follows:
Region 2016 2017 2018Europe 14.73% 15.53% 20.31%America 18.47% 12.89% 8.61% Asia Pacific (including domestic sales)
25.57% 30.34% 33.67%
China 41.22% 41.24% 37.41%Total sales (thousand units) 1,329 1,272
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In the past three years, as the EU debt crisis has gradually improved, the impact of the Brexit process on the European economy has slowed down. Although the Italian budget rejected by the EU sparked raindrops, the European market has gradually recovered since the second half of 2018. The South American market is not as expected as a result of continuous decline in commodity prices. The mergers and acquisitions by and price competition among international brands such as Hewlett-Packard, Lenovo and other manufacturers in the Americas market have squeezed the living space of regional brand manufacturers, resulting in no obvious recovery of the overall sales in the Americas market. Besides, the violent fluctuations in the North American market, which was originally recovered due to the Sino-US trade war led to a downturn in the overall economy in the second half of 2018, and a deeper recession in the American market. Although the exchange rates have depreciated rapidly as a result of the impact of the Sino-US trade war on the Asia-Pacific market, thanks to the continued economic growth of the emerging countries in Southeast Asia, and the steady demand for e-sports notebooks in Japan and South Korea, the sales in the Asia-Pacific market have continued to grow for three consecutive years. The Chinese market has benefited from the continued growth of the e-sports market. The purchasing power of customers continued to be strong. In 2018, domestic economy was seriously impacted by the Sino-US trade war, and the rapid depreciation of renminbi within a short period of time, resulting in decline of sales. In 2019, in addition to continuously exploring the emerging markets in Asia Pacific, and developing the Latin American market, the Company will actively expand the developed markets (especially the Southeast Asian market), adjust the quality of products, and change the sales strategy by balancing the distribution of sales in the regional market to reduce the risk of excessive single market shares.
2. Market sharesIn 2018, the shipments of global notebooks reached 163 million units, as for the
Clone notebook market, according to foreign brokerage research report, the market sizein 2018 was 17.3 million units, the Company sold 1.28 million units in 2018, accountingfor 7.4% of the Clone market, and ranking first in the regional brand market shares.
3. Future Market Supply and Demand, and Future GrowthAccording to the data collected by MIC, a research institute, in 2018, the global notebook brand manufacturers were faced with the pressure from the shortage of key components and price increase, which restrained the overall sales momentum. In 2019, INTEL refocused attention of the CPU supply to the 14nm process. The market expects notebook shipments to grow slightly by 164 million units in 2019, an annual increase of 0.3%. Our company's operating target is to focus both on sales volume and profit. The target of sales volume is 1.52 million. Compared with 1.28 million in 2018, the target of sales volume will increase by 240,000, with an average monthly increase of 20,000. This year, the sales volume in America region will increase by 7,000 per month. We expect to increase the proportion of sales volume in America region from 9% to 13%, and increase the YoY decrease of sales volume last year. According to the demands of new customers in China, the proportion of 37% will increase by 6%. Asia-Pacific region and Europe region will achieve this year's sales target if they keep steady and upward.
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4. Competitive Niche, Favorable and Unfavorable Factors in Future Development, andResponse MeasuresA. Competitive Niche
(1) In terms of products, unlike other manufacturers, the Company strives to implementcost-effectiveness and provide customers with the affordable products of bestperformance, making the Company's products more competitive in the market. Inline with the market demand for differentiated products, the Company provides amore flexible and efficient production management model, and meets customerneeds with small-scale, diverse and customized production, and fast delivery,making distributors more competitive in the market.
(2) In terms of technology, the Company emphasizes extraordinary core technology,keeps up with the current and future market trends, by providing a series ofproducts with the best system performance, the best mobile and wireless accessfunctions, and integrating application of Internet and the digital home.
(3) In terms of manufacturing, it provides a more flexible and efficient productionmanagement mode by small-scale but diverse production, and offering moreflexible choices to customers so as to gain better market competitiveness.
(4) In terms of services, the Company has service bases in key areas where customersare located around the world. In addition to providing customers with servicesquickly, it also uses local resources to provide market-oriented and value-addedservices to meet customer needs.
B. Advantages(1) The prospects of the industry are believed promising. The notebook industry will
continue to grow in 2019.In 2019, due to the recovery of the procurement demand from the emerging
markets (new purchase and replacement), upturn in the economic prospects of mature markets, the launch of Intel's new platform and NVIDIA's new generation of graphics chips, the growth of ultra-lightweight notebooks, and the new style of e-sports notebooks integrating AI/xR / DLSS / Light and Shadow Tracking appearing on the market one after another, the business notebook market will enter the peak period of replacement.
(2) Product strategy is correctIn 2019, based on the strategy of laying equal emphasis on quality and
quantity, the Company's product strategy is planned for the three major axes: ultra-lightweight notebooks with high gross profit margins, middle and high-end gaming notebooks and business notebooks. With the launch of Intel's new platform in 2019, the Company plans to introduce a new platform with NVIDIA discrete GPUs, the latest high-speed transmission interfaces, HDR and DX 123 support, and integrating AI/DLSS/Real-Time-Ray-Tracing notebooks except for high-performance gaming flagship NBs. Emphasis is laid on safety, business notebooks are launched to meet demand for replacement of notebooks in the mature market, government and SME procurement needs in the emerging markets; and government procurement and consumption demand in the emerging markets. The Company will also plan a series of mainstream products (Mainstream) that appeal to the general consumer markets, and meet the needs of customers for ultra-lightweight gaming notebooks with small size, thin body, long lifespan, fast booting and high graphics performance, as well as ultra-lightweight gaming notebooks (less than 1 kg) with small size which are easy to carry, long-lasting and that can be wirelessly connected at any time. The Company's marketing strategy is to provide high-quality and multi-function notebooks. Therefore, it attaches great importance to research and development. It plans to cultivate technical R&D talents, and continues to develop new products and reduce costs in research and development to make products more competitive.
(3) Complete marketing channel networkThe Company's products are exported to Europe, the United States and Canada,
Latin America and the Asia-Pacific region. Due to the scattered market customer base, the Company is not affected by changes in orders placed by single customers or regional economic downturn, exposed to limited operational risks.
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(4) Improve service centersThere are maintenance centers in significant customer areas, by which we can
grasp the market conditions in addition to providing perfect after-sales services. C. Disadvantages and Response Measures
(1) Disadvantages:a. Brand manufacturers continue to squeeze distribution channels, and regional
market spaceIn the past two years, after alliance, mergers, privatization, reconstruction, spin-
off and withdrawal among and by the top ten manufacturers, such as HP and Lenovo, the situation of market competition tends to be clear, however, as the Korean manufacturers Samsung and LG actively return to the market, and China's emerging mobile phone brand makers Huawei and Xiaomi actively explore the market with ultra-lightweight notebooks and e-sports notebooks, a drastic impact is imposed on the global market. The notebook shipments of regional distributors, such as Clone, have been declining for three consecutive years since 2017. It is expected that under the competition among international brand manufacturers for market shares in 2019, the living space of regional and channel brands will be squeezed. In 2019, the market is still quite competitive for the Company.
b. The dilemma between order concentration and low gross marginDue to the continuous rise in labor costs in the Mainland in recent years, the
depreciation of the RMB and the shortage of demand for some key components caused by the demand of other industries, brand manufacturers have to make choices in respect of the growth of shipments, the increase in market shares and profitability. OEMs are faced with a trade-off between capacity utilization, revenue growth and gross margin growth, making a tougher operating environment. While first-tier OEMs are faced with severe pressure, the business environment for second-tier OEMs is also quite tough.
c. Brand manufacturers turn to high-priced and high-margin e-sports notebooksAccording to the research report from the research institute, IDC, the demand
for replacement of e-sports notebooks every three years will become the growth momentum of the brand factories mainly driven by game events, display cards and Intel's new architecture processors.The sales of global e-sports hardware in 2018 was about US$3.7 billion, and it is estimated that the sales will exceed $40 billion in 2019, with a CAGR of 9.3% from 2017 to 2020. Such performance is far superior to the standard notebooks suffering a decline in output value during the same period. Therefore, the global computer brand factories are more actively investing in the high-price and high-margin e-sports market competitions.
(2) Response Measures:a. Adjust strategies for taking orders
The Chinese OEMs taking orders by offering cheap prices, and price competitionamong international PC brand manufacturers are going on. Faced with a trade-off between shipments and profit margin, the Company will take orders selectively(high prices or high profits) to maintain the balance between volume and prices,and promote market strategy.
b. Adjust the proportion of high-end productsIn response to the differentiated needs of customers in different regions, thisyear our company is also fully engaged in power of products. CLEVO launcheda series of 15.6-inch, 16.1-inch and 17.3-inch narrow-frame computers this year,together with a series of computers with the ninth generation of INTEL processorone after another. It is estimated that the average unit price of products willfurther increase driven by the new series of products and new platform products.This year, with the CPUs out of stock, and the new generation of mid-endgraphics cards for GeForce RTX and GTX in place, we can attract morecustomers with replacement needs, especially, the sales of the e-sports industryreached 8.5 million units in 2018, in 2019, they are estimated to reach 9.8million units, with an annual increase of 15%. The Company will spare no effortsto occupy the market.
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c. Continue to reduce costs, and continue competitive advantageR & D personnel are required to design products with the best cost structure,control the high quality and high efficiency, and further improve the yield fromthe existing manufacturing process to achieve cost reduction.
d. Control quality of componentsIn the external control, ensure the stability of the components, reduce themanufacturing defect rate, and improve the quality of products.
e. Improve production efficiencyThe Company introduced 6 Sigma quality improvement methods to improveproduction efficiency and manufacturing yield.
f. Innovative products are developed for different markets and customer needs,market differentiation is promoted, and affordable products of best performanceare provided to customers. Different from other manufacturers, the Company'sproducts have more competitive advantages in the market.
g. In line with the market demand for differentiated products, the Company providesa more flexible and efficient production management model, and meets customerneeds with small-scale, diverse and customized production, and fast delivery,making distributors more competitive in the market.
● China’s distribution industry overview:1. China's Distribution Division:
It has been nearly 20 years since CLEVO opened Buynow Malls in China in 1998.Currently, there are 25 real estates for investment in the Chinese market, as well as 2Chicony Department Stores (in Shantou and Dezhou), and 3 fixed assets (in Luoyang,Jinzhou, and Anshan) recently completed for attracting investment. These shopping mallsare well located. They are not only located in the elite sections of business districts, butalso in the prime areas connecting with subway exits, proving that the CLEVO Group isgood at choosing the locations. The advantages of the shopping malls lie in goodlocation, attracting people, and maintenance of value in core business circles.
In addition to the selection of locations, due to the steady progress on economic growthof Mainland China, the GDP growth rate in 2006 was 20.6%. Consumption was still themain driving force of its economic growth, and the final consumption expenditureaccounted for 76.2% of its GDP growth. The National Bureau of Statistics of Chinaannounced that the gross domestic product (GDP) totaled RMB 21,343.3 billion yuanfor the first quarter of 2019, up 6.4% over the same period last year, and the sameas the fourth quarter of last year. This performance indicates that the national economyin the first quarter "continues to operate within a reasonable range" and that "positivefactors are gradually increasing, laying a good foundation for stable and soundeconomic development throughout the year."
After transformation in many years of operations, Buynow Mall is currently the leadingbrand of “Science and Technology Intelligent Plazas” in the local market, developingtowards the “technical, intelligent, living and fashionable” shopping mall, aimed atbecoming a well-known shopping mall by expansion of stream of people throughtransformation, and creating a win-win situation for manufacturers, merchants andconsumers. In this high-growth domestic market, Buynow Mall has developed thefollowing important plans:
(1) Continue to optimize shopping malls, and improve BUYNOW brand strength:
At present, 19 shopping malls continue to undergo transformation and adjustment,join the cross-industry alliance, actively build innovative e-sports smart life shoppingmalls, lay emphasize on the supply of contents and services, increase the functionsof amusement and catering covering food, drink and play, and join hands with e-commerce enterprises to explore the "new retail" market by integrating virtual and
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real (onlie and offline) channels.
(2) O2O two-way interaction among stream of people:
In recent years, Buynow Mall has continued to adjust the operating structure of malls,and actively create innovative environment and atmosphere of shopping malls, layemphasize on the supply of contents and services, increase the functions ofamusement and catering, and join hands with e-commerce enterprises to explorethe "new retail" market by integrating virtual and real (onlie and offline) channels.In 2018, China's online retail sales reach CNY9.0 trillion, increasing by 23.9%annually. After years of innovation and change, this year 19 Buynow Science andTechnology Intelligent Plazas turned around gorgeously to increase revenue andinterests, so as to closely keep pace with the rapid growth of China's serviceconsumption.
(3) Leading transformation as market leader: Science and Technology IntelligentPlazas - LezhiBuynow Mall is a complex shopping mall currently integrates IT, catering andfashion. In response to the arrival of the Internet of Things era and China'sconsumption upgrade demand, Buynow Mall repositions IT as an important platformfor connecting consumers with smart life and new technologies, and incorporatescatering, leisure and entertainment to increase the appeal and diversity ofshopping malls.
(4) Industry-University Cooperation Program:The Company signs a letter of intent for industry-university cooperation with NTU,NCCU, NCKU, and NTUT every year. In addition to providing Buynow Mall as aplatform for research results to be published by the teachers and students of NTUTin the future, we also provide internship opportunities for talents, allowingpostgraduates and doctoral students to work as interns for the Company's BuynowMalls, so as to connect Taiwan talents with the world, open another door for Taiwan'stechnical field, and pave a new way out.
2. Impact of the external competitive environment, regulatory environment and overallbusiness environment:
(1) All departments and legal offices of the Company will at all times pay attention tothe changes in important policies and legal environment at home and abroad, andtake appropriate measures to revise the Articles of Association and the relatedmeasures in accordance with the requirements of the competent authorities, and theoperational needs of the Company.
(2) Based on the demand for energy conservation and environmental protection, theCompany continues to develop new energy-saving products by dint of energy-saving innovative technologies, effectively reduce the generation and emission oftoxic substances in the production process, and promote environmental protectionand green technology.
(3) The Company has been establishing the channels for domestic demand for manyyears which have gradually produced substantial performance. From theperspective of demand structure, consumption and investment jointly support China'seconomic development. The Chinese government continues to stimulate investmentand consumption, expands domestic demand by adopting the townshipurbanization policy, and firmly improving people's lives, coupled with China's fiscalpolicy for tax reduction introduced in this year, will help small and medium-sizedenterprises to restore their vitality, stimulate Consumption, and stabilize the
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economy to alleviate the economic impact from the Sino-US trade war. According to statistics, China's young consumer groups are spending more on entertainment, leisure, catering, and tourism. The Company has accurately and correctly made investments in Chinese channels faced with the largest domestic demand growth economy in the world, and stable growth opportunities are expected.
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(II) Main Application and Production Procedures of Main Products1. Important Applications of Major Products:
Processing, transmission, management and application of materials, documents, files and audio and video multimedia.2. Production Process of Major Products
(III) Supply Status of Main MaterialsThe main raw materials for notebooks include LCD, CPU, HDD, DRAM, DVD, PCB, BATTERY, etc. The main suppliers of the Company come fromthe United States, Japan, South Korea and Taiwan, and the supply situation is good.
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(IV) Names of customers who contributed to more than 10% of total purchase (sales) amount in one ofthe most recent two years, and the corresponding purchase (sales) amounts and percentages, as wellas reasons for changes (if applicable):1. In the last two years, the list of suppliers who accounted for more than 10% of the total purchase
amount of the Company: No such suppliers in Q1 of 2016 to 2018.2. In the last two years, the list of customers who accounted for more than 10% of the total sales of
the Company: No such customers in Q1 of 2016 to 2018.
(V) Table of Production Value and Volume in the Most Recent Two Years:Unit: NT$ Thousand
Year Production volume and
value
Principal products
2017 2018
Production capacity (unit)
Production volume (unit)
Production value Production
capacity (unit) Production volume
(unit) Production value
Notebooks 2,000,000 1,275,485 12,588,298 2,000,000 1,283,718 12,996,085
Total 2,000,000 1,275,485 12,588,298 2,000,000 1,283,718 12,996,085
(VI) Table of Sales Value in the Most Recent Two Years: Unit: unit; NT$ 1,000
Year
Production volume and value
Principal products
2016 2017
Volume and value of domestic sales
Volume and value of export sales Volume and value of domestic sales
Volume and value of export sales
Volume Value Volume Value Volume Value Volume Value
Notebooks 111 1,761 1,271,687 10,056,608 58 743 1,282,050 9,944,394
Others 17,161 4,056,153 15,621 4,599,634
Total 18,922 14,112,761 16,364 14,544,028
Rental income from Buynow Malls
3,937,113 3,720,007
Income from sales of buildings related to Buynow Malls
2,263,840 924,514
Hotel revenue 90,261 99,349 Others 454,255 483,733
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III. Information on employees in the most recent two years up to the date of publication of this annual report:
Year 2017 2018 From the current fiscal year
up to 4/30 The Company Group The Company Group The Company Group
Number of employees
Office clerks 663 2,167 663 2,167 660 1,997 Technical personnel
0 0 0 0 0 0
Operators 0 993 0 993 0 939 Total 663 3,160 663 3,160 660 2,936
Average age 43.30 30.16 43.30 30.16 43.38 30.41 Average years of service 10.47 3.11 10.47 3.11 10.53 3.39
Degree Distribution
Doctor 0.15% 0.03% 0.15% 0.03% 0.15% 0.03%Master 19.91% 0.57% 19.91% 0.57% 19.85% 0.48% Junior college 74.36% 49.75% 74.36% 49.75% 74.55% 48.72% Senior high school
4.98% 46.77%
4.98% 46.77% 4.85% 48.11%
Below senior high school
0.60% 2.88%
0.60% 2.88% 0.60% 2.66%
Total 100% 100.00% 100% 100.00% 100% 100.00%
IV. Environmental Protection Expenditure:(I) The Company has not been involved in any pollution disputes in the most recent year and up to the date
of publication of the annual report. (II) The Company has not suffered any losses due to environment pollution in the most recent year and up
to the date of publication of the annual report.(III) No pollution has been caused in the production process of the Company, and there are no estimated
major environmental capital expenditures for the next two years.
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V. Labor Relations:(I) The existing significant labor agreements and performance thereof
Item ContentsEmployee welfare policies and measures
1. Welfare measures directly taken by the Company:A. Subscription of shares by employees: If the Company increase capital out of cash, 10% to 15% of the
capital shall be retained by the Company for subscription of shares by employees in accordance with theCompany Act, so that employees participate in the operations, and labor and management become one.
B. Labor insurance: Employees are covered by labor insurance from the date of employment.
C. National Health Insurance: Employees are covered by national health insurance from the date ofemployment.
D. Group Insurance: Employees are covered by group insurance (including life insurance, and accidentinsurance , cancer insurance, hospitalization, medical insurance, etc.) from the date of employment. Suchinsurance extends to their spouses and children.
E. Regular health examination: External medical institutions are engaged to provide health care foremployees, on a regular basis, the Company has increased the subsidy for supervisors to go throughhealth examination at special hospitals, to ensure the physical and mental health of employees.
F. Set up a staff restaurant to provide meals , provide free overtime dinner. .
G. Employees may apply for gifts or grants for marriage, funeral, happy events, and celebration.H. Training Courses: In line with the Company's long-term development, the Company provides an open and
diverse learning environment, and organizes various training and workshops. Employees can continuouslyimprove themselves through internal and external training, reading clubs, on-line learning websites andother resources. At the same time, plans for system of position, grades, work rotation, full-time assignmentand overseas expatriation combine the life and careers of employees, so that they may enjoy the joy ofgrowth and their functional qualities can be improved.
2. Welfare measures taken by the Company's Employee Welfare Committee (referred to as the “WelfareCommittee”):The welfare funds are derived from 0.6‰ of the Company's monthly operating revenue, and used foremployee welfare activities. The major welfare measures are as follows:A. Tourism activities: The Welfare Committee plans and organizes various domestic and international trips
funded in whole or in part during holidays.B. Club Activities: for the relaxation of body and mind, employees may set up various clubs, such as billiard
club, badminton club, etc., subsidized by the Welfare Committee, with special competitions or activitiesfunded separately.
C. Festival activities: Gifts or cash gifts are given to employees for Labor Day, Dragon Boat Festival, Mid-Autumn Festival and other festivals. Year-end banquet and lucky draw activities are organized at the endof each year.
D. Arrange employees to dine together from time to time.E. Birthday parties: Throw a birthday party every month and give gifts to celebrate the birthday(s) of
employee(s).F. Employees may purchase the Company’s products at a special price.G. Discounts are available for employees to purchase products from specific manufacturers.
3. Bonuses for employees:According to the provisions of Article 26 of the Articles of Association of the Company, for any balancecalculated by deducting the income taxes paid in accordance with the law, and the losses covered for theprevious years from earnings on final accounts, 10% of the balance shall be set aside as statutory surplusreserves, plus a provision for or reversal of special surplus reserves . If there is balance, 5%-15% of thebalance shall be set aside as employee bonuses.
4. Retirement system: The Company makes a provision for pensions according to law and the retirementregulations on a monthly basis.
Protection of employee rights and benefits
The rights and interests of employees, such as salary, assessment, promotion, welfare, gender equality and work rules, are posted on the Intranet, and available for inquiry by employees at any time.
Labor disputes
The Company has suffered no losses as a result of labor disputes in the most recent year and up to the date of publication of the annual report.
Performance of Social Responsibility
The Company adheres to the concept of “labor and management united as one”, and “coexistence and common prosperity”, and focuses on rationalized and humanized management, establishing a smooth communication channel in an “open and honest manner”, maintaining good relationship between the employer and employees to jointly create productivity, shares profits, and establish stable and harmonious labor relationship. In recent years, the Company has always adhered to the principle of “fairness and justice” and “reasonable and legal”, and communicated and coordinated with employees by giving consideration to reason and sense. Therefore, the Company has never suffered losses due to labor disputes in the past three years, and has jointly worked with employees for professional development and labor welfare.
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Item ContentsThe Company has appointed medical staff, and holds lectures on safety and health education, and physical and mental health on a regular basis to protect employees' physical and mental health.
Specific improvement measures compared with the previous year
The Company has appointed two additional medical staff, and holds lectures on safety and health education, and physical and mental health on a regular basis to protect employees' physical and mental health. The Company provides bank-specific services every week, in case it is inconvenient for colleagues to go out. The Company has increased the group insurance coverage to maintain employees' physical and mental health. The Company has raised the amount of subsidies for health examination for the benefit of supervisors to maintain their physical and mental health. The Company has put a high-quality coffee machine for free in the atrium to provide physical and mental relaxation for colleagues after work. The Company has U-bikes in place next to the arcade to increase the convenience of commuting to and from work by employees.
Retirement System
The Company complies with the provisions of the Regulations of the Ministry of the Interior Governing Labor Retirement Reserves and Retirement Management. Ratio of provision: 6%
Other significant agreements
Agreements for labor disputes The Company adheres to the concept of “labor and management united as one”, and “coexistence and common prosperity”, and focuses on rationalized and humanized management, establishing a smooth communication channel in an “open and honest manner”, maintaining good relationship between the employer and employees to jointly create productivity, shares profits, and establish stable and harmonious labor relationship. In recent years, the Company has always adhered to the principle of “fairness and justice” and “reasonable and legal”, and communicated and coordinated with employees by giving consideration to reason and sense. Therefore, the Company has never suffered losses due to labor disputes in the past three years, and has jointly worked with employees for professional development and labor welfare.
Advanced studies and training courses
In line with the Company's long-term development, the Company provides an open and diverse learning environment, and organizes various training and workshops. Employees can continuously improve themselves through internal and external training, reading clubs, on-line learning websites and other resources. At the same time, plans for system of position, grades, work rotation, full-time assignment and overseas expatriation combine the life and careers of employees, so that they may enjoy the joy of growth and their functional qualities can be improved.
The information about the Company’s education and training activities in 2018 is as follows:
Type of courses Number of
trainees Number
of classes Total hours Total costs
Professional knowledge 4,740 123 7,431.5 339,285
Labor safety and health 1,000 18 2,221.0 27,597
Orientation training 72 1 710.0 0
Training in computer skills 143 11 278.5 25,499
Management training 603 11 3,037.5 438,884
Language training 99 5 791.0 230,303
Lectures/activities 264 4 409.0 2,900
Total 6,921 173 14,878.5 1,064,468
(II) The Company has suffered no losses as a result of labor disputes in the most recent year and upto the date of publication of the annual report.
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VI. Important Contracts:The important contracts signed by the Company that remain valid up to the date of publication of theannual report are as follows:
April 30, 2019
No. Nature of Contract
Parties Effective Date Description of contents Restricted conditions
I. Lease IBASE TECHNOLOGY INC. 2014.12.21 2019.12.20
The Company leased its parking lots for automobiles and motor vehicles in the basement of the factory building located at F/6, No.129, Xinde Rd., San Chong Dist., New Taipei City to IBASE TECHNOLOGY INC.
None
II. Lease DHL Supply Chain (Taiwan) Co., Ltd.
2018.08.16~ 2020.08.15
The Company leased its factory located at F/10, No.129, Xinde Rd., San Chong Dist., New Taipei City to DHL Supply Chain (Taiwan) Co., Ltd.
None
III. Lease FREE TIME GEARS INTERNATIONAL CO., LTD.
2017.05.01~ 2020.04.30
The Company leased its parking lots for automobiles and motor located at No.129, Xinde Rd., San Chong Dist., New Taipei City to FREE TIME GEARS INTERNATIONAL CO., LTD.
None
IV. Lease FREE TIME GEARS INTERNATIONAL CO., LTD.
2017.05.01~ 2020.04.30
The Company leased its factory located at F/2, No.129, Xinde Rd., San Chong Dist., New Taipei City to FREE TIME GEARS INTERNATIONAL CO., LTD.
None
V. Lease Chanson Water Co., Ltd. 2018.11.16~ 2021.11.15
The Company leased its factory located at F/7, No.129, Xinde Rd., San Chong Dist., New Taipei City to Chanson Water Co., Ltd.
None
VI Lease IBASE TECHNOLOGY INC. 2016.12.21~ 2019.12.20
The Company leased its parking lots for automobiles and motor vehicles in the basement of the factory building located at F/5, No.129, Xinde Rd., San Chong Dist., New Taipei City to IBASE TECHNOLOGY INC.
None
VII Lease IBASE TECHNOLOGY INC. 2017.08.01~ 2019.12.20
The Company leased its factory located at F/4, No.129, Xinde Rd., San Chong Dist., New Taipei City to IBASE TECHNOLOGY INC.
None
VIII Lease DHL Supply Chain (Taiwan) Co., Ltd.
2017.08.01~ 2019.12.20
The Company leased its factory located at F/8, No.129, Xinde Rd., San Chong Dist., New Taipei City to DHL Supply Chain (Taiwan) Co., Ltd.
None
IX Lease DHL Supply Chain (Taiwan) Co., Ltd.
2018.08.01~ 2020.08.15
The Company leased its factory located at F/2, No.129, Xinde Rd., San Chong Dist., New Taipei City to DHL Supply Chain (Taiwan) Co., Ltd.
None
X Lease
Hsieh Tung Cheng and other employees of DHL Supply Chain (Taiwan) Co., Ltd.
2018.08.16~ 2020.08.15
The Company leased its parking lots for automobiles and motor vehicles in the basement located at No.129, Xinde Rd., San Chong Dist., New Taipei City to the employees of DHL.
None
XI Lease DHL Supply Chain (Taiwan) Co., Ltd.
2018.08.16~ 2020.08.15
The Company leased its parking lots for automobiles and motor vehicles in the basement located at No.129, Xinde Rd., San Chong Dist., New Taipei City to DHL Supply Chain (Taiwan) Co., Ltd.
None
XII Lease momo.com Inc. 2018.04.01~ 2020.03.31
The Company leased the first floor of 1,513.908 square meters located at No.129, Xinde Rd., San Chong Dist., New Taipei City to momo.com Inc.
None
XIII Lease momo.com Inc. 2018.04.16~ 2020.04.15
The Company leased the third floor of 3,121.107 square meters located at No.129, Xinde Rd., San Chong Dist., New Taipei City to momo.com Inc.
None
XIV Lease Yu Yun Chieh and other employees of momo.com Inc.
2018.05.01~ 2020.03.31
The Company leased its parking lots for automobiles and motor vehicles in the basement located at No.129, Xinde Rd., San Chong Dist., New Taipei City to the employees of momo.
None
XV Lease momo.com Inc. 2018.10.16~ 2020.04.16
The Company leased an area of 20.46 square meters on the right side of the dock located at F/1, No.129, Xinde Rd., San Chong Dist., New Taipei City to momo.com Inc.
None
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VI. Financial InformationI. Concise Balance Sheet, Statement of Comprehensive Income of the Recent 5 Years
(I) Information on the condensed balance sheet and consolidated income statement-prepared inaccordance with International Financial Reporting Standards
1. Individual condensed balance sheetUnit: NT$ thousand
Year Item
Five-year financial information (Note 1)
2014 2015 2016 2017 2018
Current assets 6,906,999 11,650,099 11,886,842 11,538,455 12,716,633
Revaluation date for assets
Asset revaluation increment
Property, plant and equipment (Note 2) 209,397 210,297 355,555 345,165 340,737
Intangible assets 20,804 19,652 14,576 9,323 4,972
Other assets (Note 3) 62,387,353 62,452,167 56,777,053 57,030,999 56,689,585
Total assets 69,524,553 74,332,215 69,034,026 68,923,942 69,751,927
Current liabilities
Before distribution 4,562,295 5,796,774 7,026,571 6,024,965 4,418,958
After distribution 6,458,203 6,724,253 7,544,785 6,646,495 Note 4
Non-current liabilities 8,911,032 14,089,637 20,004,923 18,716,964 23,493,127
Total liabilities
Before distribution 18,651,932 25,801,697 25,743,535 26,639,805 27,912,085
After distribution 20,547,840 26,729,176 26,261,749 27,261,335 Note 4
Equity attributable to owners of the parent
50,872,621 48,530,518 43,290,491 42,284,137 41,839,842
Capital Stock 6,831,630 6,831,630 6,831,630 6,831,630 6,797,630
Capital surplus 1,464,697 1,532,315 1,562,662 1,581,974 982,539
Retained earnings
Before distribution 37,129,244 36,432,784 36,280,604 36,516,069 38,063,584
After distribution 35,233,336 35,505,305 35,762,390 35,894,539 Note 4
Other equity 5,650,538 4,160,167 (759,059) (2,020,190) (2,720,683)
Treasury stock (203,488) (426,378) (625,346) (625,346) (1,283,228)
Non-controlling interest - - - - -
Total equity
Before distribution 50,872,621 48,530,518 43,290,491 42,284,137 41,839,842
After distribution 48,976,713 47,603,039 42,772,277 41,662,607 Note 4
Note 1: The financial information shown above has been audited and certified by CPAs. Note 2: No assets were revalued in the years above. Note 3: 2014The assets were not revalued in the year of 2018. The investment property was measured at fair value. The gains or
losses arising from changes in fair value were recognized as profits or losses in the period when they were incurred. Note 4: The above-mentioned figures after distribution are filled out based on the resolutions of the shareholders' meeting for the
following year; in the year of 2018, there is no statement for distribution of earnings resolved at the shareholders' meeting.
Note 5: If the financial information is required to be corrected or re-edited as notified by the competent authorities, it should be prepared and presented based on the corrected or re-edited number, and the circumstances and reasons should be indicated: None.
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2. Individual condensed consolidated income statementUnit: NT$ thousand
(Unless earnings per share are denominated in NTD)
Year Item
Five-year financial information (Note 1)
2014 2015 2016 2017 2018
Operating Revenue 13,178,568 13,576,753 14,121,397 14,131,684 14,560,392
Operating margin 1,542,461 1,196,751 1,346,219 1,079,680 1,008,868
Operation profits/losses 313,024 (96,515) 240,322 (203,438) (229,724)
Non-operating income and expenses
2,167,801 1,185,664 364,451 1,065,887 1,780,378
Net profits before tax 2,480,825 1,089,149 604,773 862,449 1,550,654
Profits after tax from operations of continued segments for the current period
2,480,825 1,089,149 604,773 862,449 1,550,654
Losses from discontinued departments
- - - - -
Profits/losses after tax for the current period
2,332,389 1,029,352 594,819 717,784 1,454,904
Other comprehensive income for the current period (after tax)
2,992,290 (1,508,276) (4,914,746) (1,265,236) (607,882)
Total comprehensive income for the current period 5,254,679 (478,924) (4,319,927) (547,452) 847,022
Net income attributable to owners of the parent 2,480,825 1,089,149 604,773 862,449 1,550,654
Net income attributable to non-controlling interest - - - - -
Total comprehensive income attributable to owners of the parent
5,254,679 (478,924) (4,319,927) (547,452) 847,022
Total comprehensive income attributable to non-controlling interest
- - - - -
Earnings per share 3.55 1.57 0.92 1.12 2.32
Note 1: The financial information shown above has been audited and certified by CPAs. Note 2: If the financial information is required to be corrected or re-edited as notified by the competent authorities, it should be prepared and presented based on the corrected or re-edited number, and the circumstances and reasons should be indicated: None.
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3. Consolidated condensed balance sheet Unit: NT$ thousand
Year
Item
Five-Year Financial Analyses (Note 1) Financial information
up to March 31 2019
2014 2015 2016 2017 2018
Current assets 12,731,779 20,445,573 23,645,678 22,820,979 25,591,179 21,765,153
Revaluation date for assets
Asset revaluation increment
Property, plant and equipment (Note 2)
1,419,345 1,883,865 6,596,937 8,474,857 9,970,165 11,181,689
Intangible assets 48,539 40,613 38,712 31,042 21,311 27,772
Other assets (Note 3) 101,064,488 100,094,026 82,637,430 81,140,360 76,877,202 75,220,126
Total assets 115,264,151 122,464,077 112,918,757 112,467,238 112,459,857 111,194,740
Current liabilities
Before distribution
20,541,986 21,891,037 22,758,088 21,894,165 19,063,643 21,053,198
After distribution
22,437,894 22,818,516 23,276,302 22,515,695 Note 4 Note 4
Non-current liabilities 43,836,917 52,028,317 46,855,823 48,273,038 51,539,084 46,542,022
Total liabilities
Before distribution 64,378,903 73,919,354 69,613,911 70,167,203 70,602,727 67,595,220
After distribution
66,274,811 74,846,833 70,132,125 70,788,733 Note 4 Note 4
Equity attributable to owners of the parent
50,872,621 48,530,518 43,290,491 42,284,137 41,839,842 43,582,124
Capital Stock 6,831,630 6,831,630 6,831,630 6,831,630 6,797,630 6,697,630
Capital surplus 1,464,697 1,532,315 1,562,662 1,581,974 982,539 820,71
Retained earnings
Before distribution
37,129,244 36,432,784 36,280,604 36,516,069 38,063,584 38,515,191
After distribution
35,233,336 35,505,305 35,762,390 35,894,539 Note 4 Note 4
Other equity 5,650,538 4,160,167 (759,059) (2,020,190) (2,720,683) (1,414,437)
Treasury stock (203,488) (426,378) (625,346) (625,346) (1,283,228) (1,036,974)
Non-controlling interest 12,627 14,205 14,355 15,898 17,288 17,396
Total equity
Before distribution
50,885,248 48,544,723 43,304,846 42,300,035 41,857,130 43,599,520
After distribution
48,989,340 47,617,244 42,786,632 41,678,505 Note 4 Note 4
Note 1: The financial information shown above has been audited and certified by CPAs; The financial information for the first quarter of 2018 has been reviewed by CPAs.
Note 2: No assets were revalued in the years above. Note 3: The assets were not revalued from 2013 to 2018. The investment property was measured at fair value. The
gains or losses arising from changes in fair value were recognized as profits or losses in the period when they were incurred.
Note 4: The above-mentioned figures after distribution are filled out based on the resolutions of the shareholders' meeting for the following year; in the year of 2018, there is no statement for distribution of earnings resolved at the shareholders' meeting.
Note 5: If the financial information is required to be corrected or re-edited as notified by the competent authorities, it should be prepared and presented based on the corrected or re-edited number, and the circumstances and reasons should be indicated : None.
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4. Condensed consolidated income statementUnit: NT$ thousand
(Unless earnings per share are denominated in NTD)
Year Item
Five-year financial information (Note 1) Financial information
up to March 31 2019 2014 2015 2016 2017 2018
Operating Revenue 19,054,116 19,393,313 19,720,086 20,876,980 19,796,072 5,644,157
Operating margin 6,777,812 6,706,417 6,076,007 4,778,596 5,280,363 1,265,294
Operation profits/losses 2,601,934 2,513,362 2,093,412 687,923 1,466,849 116,800
Non-operating income and expenses
784,209 (760,181) (922,699) 815,033 888,826 538,334
Net profits before tax 3,386,143 1,753,181 1,170,713 1,502,956 2,355,675 655,134
Profits after tax from operations of continued segments for the current period
2,332,313 1,031,364 595,698 720,658 1,456,359 502,248
Losses from discontinued departments
- - - - - -
Profits/losses after tax for the current period
2,332,313 1,031,364 595,698 720,658 1,456,359 502,248
Other comprehensive income for the current period (after tax)
2,922,017 (1,507,878) (4,914,528) (1,265,588) (607,003) 1,306,267
Total comprehensive income for the current period
5,254,330 (476,514) (4,318,830) (544,930) 849,356 1,808,515
Net income attributable to owners of the parent
2,332,389 1,029,352 594,819 717,784 1,454,904 501,985
Net income attributable to non-controlling interest
(76) 2,012 879 2,874 1,455 263
Total comprehensive income attributable to owners of the parent
5,254,679 (478,924) (4,319,927) (547,452) 847,022 1,808,231
Total comprehensive income attributable to non-controlling interest
(349) 2,410 1,097 2,522 2,334 284
Earnings per share 3.55 1.57 0.92 1.12 2.32 0.82
Note 1: The financial information shown above has been audited and certified by CPAs; The financial information for the first quarter of 2019 has been reviewed by CPAs. Note 2: If the financial information is required to be corrected or re-edited as notified by the competent authorities, it should be prepared and presented based on the corrected or re-edited number, and the circumstances and reasons should be indicated: None.
(II) Names and the audited opinions of the certified public accountants for the most recent year:Year Name of accounting firm Name of CPAs Audited Opinions 2018 PwC Taiwan Feng Min Chuan and Wu, Han-Chi Unqualified opinions 2017 PwC Taiwan Feng Min Chuan and Chang Ming Hui Unqualified opinions 2016 PwC Taiwan Feng Min Chuan and Chang Ming Hui Unqualified opinions 2015 PwC Taiwan Feng Min Chuan and Chang Ming Hui Standard unqualified opinions 2014 PwC Taiwan Feng Min Chuan and Chang Ming Hui Unqualified opinions with modified
wording
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II. Financial Analysis of the Recent 5 Years(I) Analysis of financial ratios-in accordance with International Financial Reporting Standards
1. Financial analyses-consolidated reportUnit: NT$ Thousand
Year
Analytic Item (Note III )
Five-Year Financial Analyses (Note 1)
Description of
increase or
decrease in 2018 if the range of changes
reaches 20% or more
compared to 2017
From the current
fiscal year up to
March 31, 2019
(Note 1) 2014 2015 2016 2017 2018
Financial structure
(%)
Ratio of liabilities to assets
55.85 60.36 61.65 62.39 62.78 60.79
Ratio of long-term capital to property, plant and equipment (Note 2)
6,673.65 5,338.65 1,336.71 1,068.73 936.76 806.15
Solvency (%)
Current ratio 61.98 93.40 103.9 104.23 134.24 (1) 103.38
Quick ratio 46.23 72.16 58.89 67.88 89.28 (1) 72.22
Times interest earned ratio 5.03 2.71 2.15 2.45 3.68 (2) 3.2
Operating ability
Receivable turnover (times)
10 8.23 8.27 10.18 10.72 11.33
Average collection period
36.5 44.37 44.12 35.84 34.04 32.22
Inventory's turnover 5.88 3.61 1.94 1.85 1.86 2.47
Payables turnover 6.76 6.23 5.58 6.53 7.25 9.33
Average days in sales 62.05 101.18 188.29 197.12 196.23 147.84
Turnover of property, plant and equipment
16.81 11.74 4.65 2.77 2.15 (3) 2.13
Total assets turnover 0.18 0.16 0.17 0.19 0.18 0.20
Profitability
Return on assets (%) 2.84 1.58 1.23 1.40 1.94 (2) 0.66
Return on equity (%) 4.73 2.07 1.30 1.68 3.46 (2) 1.18
Income before tax/paid-in capital (%)
49.13 25.63 17.14 22.00 34.65 (2) 8.90
Net profit margin (%) 12.24 5.31 3.02 3.45 7.36 (2) 0.82
Basic earnings per share (NT$)
3.55 1.57 0.92 1.12 2.32 (2) 0.35
Cash flow
Cash flow ratio (%) 6.31 (6.71) 14.98 8.94 (0.27) (4) 27.76
Cash flow adequacy ratio (%)
30.31 20.07 28.75 33.05 23.41 (4) 0.42
Cash reinvestment ratio (%)
119.83 (48.13) 22.04 10.27 (2.73) (4) 0.52
Leverage Operational leverage 1.06 1.05 1.06 1.28 1.12 (0.65)
Financial leverage 1.48 1.69 1.95 (1.98) 2.49 (2) 8.90
Description of 20% or more of changes in the financial ratios for 2018 compared to 2017 is as follows: (If the range of changes is less than 20%, the analysis may be exempted) (1) The current assets increased and current liabilities decreased in the period.(2) The operating profits, and net profits before and after tax for the period have increased compared to the previous period.(3) Due to an increase in the property, plant and equipment for the period.(4) The net cash flow from the operating activities for the period has decreased compared to the previous period.Note 1: The financial information shown above in each year has been audited and certified by CPAs; The financial information for the first quarter of 2019 has been reviewed by CPAs. Note 2: inclusive of the amount of property, plant and equipment only. Note 3: Please refer to P94 of the Annual Report.
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2. Financial analyses-individual reportYear
Analytic Item ( Note III
Five-Year Financial Analyses (Note 1) Description of increase or decrease in 2018 if
the range of changes
reaches 20% or more
compared to 2017
2014 2015 2016 2017 2018
Financial structure
(%)
Ratio of liabilities to assets 26.83 34.71 37.29 38.65 40.02
Ratio of long-term capital to property, plant and equipment (Note 2)
31,023.49 32,589.83 17,439.62 18,222.87 19,174.04
Solvency (%)
Current ratio 151.39 200.98 169.17 191.51 287.77 (1)
Quick ratio 134.14 181.38 145.93 183.26 253.25 (1)
Times interest earned ratio 12.56 4.04 2.34 3.20 4.97 (2)
Operating ability
Receivable turnover (times) 8.21 5.91 5.25 5.83 6.41 Average collection period 44.46 61.76 69.52 62.61 56.94 Inventory's turnover 220.30 73.16 32.77 27.66 36.25 (3) Payables turnover 75.74 72.93 28.65 22.36 36.38 (4) Average days in sales 1.66 4.99 11.14 13.20 10.07 (3) Turnover of property, plant and equipment
62.04 64.70 49.91 40.33 42.46
Total assets turnover 0.20 0.19 0.20 0.20 0.21
Profitability
Return on assets (%) 3.90 1.84 1.35 1.51 2.55 (2) Return on equity (%) 4.73 2.07 1.30 1.68 3.46 (2) Income before tax/paid-in capital (%) 36.31 15.94 8.85 12.62 22.81 (2)
Net profit margin (%) 17.70 7.58 4.21
5.08 9.99 (2)
Earnings per share (NT$) 3.55 1.57 0.92 1.12 2.32 (2)
Cash flow
Cash flow ratio (%) (9.71) (26.36) 7.45 18.56 (42.63) (5)
Cash flow adequacy ratio (%) (14.41) (20.08) (0.71) 0.58 (36.15) (5)
Cash reinvestment ratio (%) (4.52) (5.46) (0.42) 1.16 (4.10) (5)
Leverage
Operational leverage 1.06 0.83 1.08 0.90 0.93
Financial leverage 3.18 0.21 (1.14) 0.34 0.37
Description of 20% or more of changes in the financial ratios for 2018 compared to 2017 is as follows: (If the range of changes is less than 20%, the analysis may be exempted) (1) The current assets increased and current liabilities decreased in the period.(2) The net profits before and after tax for the period have increased compared to the previous period.(3) The inventory for the period has decreased.(4) The account payable for the period has decreased.(5) The net cash flow from the operating activities for the period has decreased compared to the previous period. Note 1: The financial information shown above in each year has been audited and certified by CPAs; The financial information
for the first quarter of 2019 has been reviewed by CPAs. Note 2: inclusive of the amount of property, plant and equipment only.
Note 3: At the end of this Table attached to the annual report, the following formulas should be listed:
1. Financial structure
(1) Ratio of liabilities to assets = total liabilities / total assets.
(2) Ratio of long-term capital to property, plant and equipment=( Total equity + non-current liabilities) / net worth
of property, plant and equipment .
2. Liquidity
(1) Current ratio = current assets / current liabilities.
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(2) Quick ratio = (current assets - inventory - prepaid expense) / current liabilities.
(3) Times interest earned ratio = PBIT / interest expense for this period.
3. Operating ability
(1) Receivables turnover (including account receivable and note receivable made from operations) = net sales income /
remaining sum of average account receivable (including account payable and note payable made from operation) for
every period.
(2) Average collection period = 365 / account receivables' turnover rate.
(3) Inventory's turnover = cost of sales / average inventory.
(4) Payables turnover (including account payable and note payable made from operations) = cost of sales/remaining sum
of average account payable (including account payable and note payable made from operation) for every period.
(5) Average days in sales = 365 / Inventory's turnover rate.
(6) Turnover of property, plant and equipment=net sales income/average net amount of property, plant and equipment.
(7) Total assets turnover = net sales / average total assets.
4. Profitability
(1) Return on total assets = (loss after tax + interest expense x (1-tax rate))/ average total assets.
(2) Return on equity=profit or loss after tax/net average equity.
(3) Profit ratio = loss after tax / net sales.
(4) EPS=(profits attributable to owners of the parent - preference dividends)/weighted average number of the issued shares.
(Note 4)
5. Cash flow
(1) Cash flow ratio = net cash flow from operating activities / current liabilities.
(2) Cash flow adequacy ratio = net cash flow of operating activities for most recent 5 years / (capital expenditure +
addendum of inventory + cash dividend) for most recent 5 years.
(3) Cash reinvestment ratio = (net cash flow of operating activities - cash dividend) / (gross property, plant and equipment
+ long-term investment + other non-current assets + operating capital). (Note 5)
6. Leverage:
(1) Operating leverage = (net operating income - current operating cost and expense) / operating profit (Note 6).
(2) Financial leverage = operating profit / (operating profit - interest expense).
Note 4: Special attention should be paid to the following matters related to the formula for calculating the earnings per share:
1. Based on the weighted average number of ordinary shares, instead of the number of shares issued at the end of the year.
2. In case of cash increase or treasury stock trading, the circulation period shall be taken into consideration, and the weighted
average number of shares shall be calculated.
3. In case of capital increase out of earnings or capital reserves, when calculating earnings per share for the previous year and
the half of the year, retrospective adjustments shall be made based on the proportion of capital increase, without taking the
issue period of the capital increase into consideration.
4. If preferred shares are non-convertible accumulative preferred shares, the dividends on such shares for the year (whether
paid or not) shall be exclusive of the net profits after tax, or plus the net losses after tax. If preferred shares are non-
accumulative, and there is net profit after tax, the dividends on preferred shares shall be deducted from the net profits after
tax; if there is loss, no adjustment is necessary.
Note 5: Special attention should be paid to the following items when measuring cash flow analysis:
1. Net cash flow from operating activities refers to the net cash inflows into operating activities in the cash flow statement.
2. Capital expenditure refers to the amount of cash outflows of capital investment per year.
3. The increase in inventory is only included when the ending balance is greater than the opening balance. If the inventory is
reduced at the end of the year, it is calculated as zero.
4. Cash dividends include cash dividends for ordinary shares and preferred shares.
5. Gross property, plant and equipment means the total amount of property, plant and equipment before accumulated
depreciation is deducted.
Note 6: The issuer should classify operating costs and expenses into fixed and variable items based on the nature of such costs and expenses.
If there are estimates or subjective judgments, attention should be paid to their rationality and consistency.
Note 7: For foreign companies, the ratio of paid-up capital is calculated based on the ratio of net worth.
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III. The Audit Committee Audit Report in the Financial Report in 2018
Review Report of the Audit CommitteeWe hereby allow
the Board of Directors to prepare Our Company's business report, financial
statements and surplus distribution for 2018.Among them, the financial statements
have been audited by Accountants Minjuan Feng and Hanqi Wu of
PricewaterhouseCoopers, and the audit report has been issued. The above business
report, financial statements, and surplus distribution proposal have been audited by
our committee and found to be consistent. The above report is submitted according to
Section 4 of Article 14 of the Securities and Exchange Act and Article 219 of the
Company Act.
Best regards
CLEVO CO.
Shareholders' Annual Meeting of 2019
Convener of the Audit Committee: Chou, Po-Chiao
March 27th, 2019
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IV. 2018 Consolidated Financial Statements with Subsidiaries Audited by the CPA: See P148~P331 of the annual report.
V. 2018 Individual Financial Statements Audited by the CPA: See P332~P407 of the annualreport.
VI. Whether Financial Difficulty of the Company and Affiliated Enterprises Occurred, and theImpact on the Company's Financial Position for the Most Recent Year and up to the Date ofPublication of the Annual Report: None.
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VII. Review and Analysis of FinancialPosition,Performance and Risks
I. Analysis of Financial Position:Main reasons for and effects of significant changes in the consolidated assets, liabilities
and shareholders' equity for the most recent two years:
Unit: NT$ 1,000
Year Item
2018 2017Difference
Amount %
Current assets 22,820,979 2,770,200 12.14
Non-current assets 86,868,678 89,646,259 (2,777,581) (3.10)
Total assets 112,459,857 112,467,238 (7,381) (0.01)
Current liabilities 19,063,643 21,894,165 (2,830,522) (12.93)
Non-current liabilities 51,539,084 48,273,038 3,266,046 6.77
Total liabilities 70,602,727 70,167,203 435,524 0.62
Capital stock 6,797,630 6,831,630 (34,000) (0.50)
Capital surplus 982,539 1,581,974 (599,435) (37.89)
Retained earnings 38,063,584 36,516,069 1,547,515 4.24
Other equity -2,720,683 -2,020,190 (700,493) (34.67) Equity attributable to owners of the parent
41,839,842 42,284,137 (444,295) (1.05)
Total equity 41,857,130 42,300,035 (442,905) (1.05)
Analysis and description of differences: If the range of changes to items reaches 20% compared to the previous period equivalent to NT$10,000,000, the main reasons for, effects of and response plan for such changes in the future shall be analyzed and described as follows: 1. Capital reserves: Mainly due to the cash dividends paid out of capital reserves by the Company. 2. Other equity: Mainly due to the increase in the exchange difference conversed in the financial statements of foreign institutions due to exchange rate fluctuations.
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II. Analysis of Financial performance(I) Comparative analysis of the consolidated financial performance for the most recent two
yearsUnit: NT$ 1,000
Item/Year 2018 2017 Increase/decrease % of changes
Operating Revenue 19,796,072 20,876,980 (1,080,908) (5.18)
Operating costs (14,515,709) (16,098,384) 1,582,675 (9.83)
Operating margin 5,280,363 4,778,596 501,767 10.50
Operating expenses (3,813,514) (4,090,673) 277,159 (6.78)
Operating profits 1,466,849 687,923 778,926 113.23 Note 1
Non-operating income and expenses 888,826 815,033 73,793 9.05
Net profits before tax 2,355,675 1,502,956 852,719 56.74 Note 2
Income tax expenses (899,316) (782,298) (117,018) 14.96
Profits after tax from operations of continued segments for the current period
1,456,359 720,658 735,701 102.09 Note 2
Profits/losses after tax for the current period 1,456,359 720,658 735,701 102.09 Note 2
Other comprehensive income for the current period (after tax)
(607,003) (1,265,588) 658,585 52.04 Note 3
Total comprehensive income for the current period
849,356 (544,930) 1,394,286 255.87 Note 3
Total comprehensive income attributable to owners of the parent 847,022 (547,452) 1,394,474 254.72 Note 3
Basic earnings per share (NT$) in total 2.32 1.12 1.20 107.14 Note 2
(II) The main reasons for the increase or decrease in the items by more than 20% areanalyzed as follows:
Note 1: Mainly due to the decrease in operating costs and expenses . Note 2: Mainly due to the reasons stated in Note 1, disposal of the interests of
subsidiaries, and investment property evaluation being more favorable compared to the previous period .
Note 3: Mainly due to the exchange rate impact caused by exchange rate changes.
(III) Possible impact of the expected sales volume and its basis on the Company’s futurefinancial business, and response plan:
In 2018, the shipments of global notebooks reached 163 million units, as for the Clone notebook market, according to foreign brokerage research report, the market size in 2018 was 17.3 million units, the Company sold 1.28 million units in 2018, accounting for 7.4% of the Clone market, and ranking first in the regional brand market shares. According to the data collected by MIC, a research institute, in 2018, the global notebook brand manufacturers were faced with the pressure from the shortage of key components and price increase, which restrained the overall sales momentum. In 2019, INTEL refocused attention of the CPU supply to the 14nm process. The market expects notebook shipments to grow slightly by 164 million units in 2019, an annual increase of 0.3%. Our company's operating target is to focus both on sales volume and profit. The target of sales volume is 1.52 million. Compared with 1.28 million in 2018, the target of sales volume will increase by 240,000, with an average monthly increase of 20,000. This year, the sales volume in America region will increase by 7,000 per month. We expect to increase the proportion of sales volume in America region from 9% to 13%, and increase the YoY decrease of sales volume last year. According to the demands of new customers in China, the proportion of 37% will increase by 6%. Asia-Pacific region and Europe region will achieve this year's sales target if they keep steady and upward.
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III. Analysis of Cash flows(I) Analysis and description of the changes in cash flows for the most recent year:
Year Item 2018.12.31 2017.12.31
Ratio of increase/decrease
(%) Cash flow ratio (%) (0.27) 8.94 (2014.02) Cash flow adequacy ratio (%)
23.41 33.05 (29.17)
Cash reinvestment ratio (%)
(2.73) 10.27 (126.58)
Analysis of changes to the proportion of increase or decrease: (more than 20%) The above proportion was mainly attributable to the increase in capital outflows compared to the previous period due to the Company’s expenditure on the construction in progress of the Buynow Group.
(II) Improvement plan for insufficient liquidity: The current ratio is 134.24%, higher than104.23% of the previous period. The overall operating efficiency is further enhanced, andthere is no doubt about insufficient liquidity.
(III) Analysis of cash liquidity in the coming year:Unit: NT$ 1000,000
Opening cash
From operating activities
Expected cash for the year
Estimated amount of cash
surplus (shortfall)
Remedial measures for expected cash shortfalls
Balance Cash flow Cash outflow +- Investment plan
Wealth managemen
t plan $7,796 $18,714 $17,664 $ 8,846 - -
Description: 1. Analysis of the changes in cash flows for the year:
(1) Business activities: It is expected that the sales volume of notebooks will increase, andthe revenue from sales of buildings by the China Business Division will increase,resulting in an increase in the net cash inflow of the Group's operations.
(2) Investment activities: required for the projects under construction, and theexpenditure on renovation project of Chicony Shopping Center.
(3) Financing and wealth management activities: It is expected that there will be dividendincome from investment, and cash outflows are from payment of cash dividends. Inthe current period, the Company is expected to raise funds for long-term financingplan, and optimize asset revitalization to replenish working capital and strengthenfinancial structure.
2. Remedial measures for expected cash shortfalls, and analysis of liquidity: None.
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IV. Effect of Major Capital Expenditures in the most recent year on Financial Operations: None.
V. Investment Policy, Main Causes for Profits or Losses, Improvement Plans and the Investment Plans for the Coming Year(I) Reinvestment Policy
As the IT manufacturing industry has entered the era of meager profits, from the perspective of the industry value chain, the channel market that is close to consumers is more profitable. In recent years, in addition to developing NB industry and specializing in the development, production and sales of niche products, the Company has been exploring Buynow IT channel market in Mainland China. With years of experience in IT manufacturing and sales, the Company targets favorable distribution shopping malls, and achieve the maximum comprehensive effect of profits with the production and sales value of NB brought about by advantages of distribution shopping malls. In 2018, the channels in Mainland made the greatest contribution to the Group's interests.
(II) Main causes for profits or losses from reinvestment for the most recent year, and improvement plans:Unit: NT$ 1,000
Name of investees Investment cost: unit (thousand yuan)
Investment objective Profits or losses from
investment in 2018
Main causes for profits or losses Improvement plan
CLEVO COMPUTER SINGAPORE PTE LTD (Singapore)
SGD 27,544 Investment in the establishment of Buynow IT Malls in Chengdu, Nanjing, Hefei, and Beijing, and CLEVO CO.(Buynow (CHENGDU) CORP.)
124,875 (Note 1)
In this period, Buynow Mall continued to transform its composite shopping malls, with benefits growing steadily. In addition, the profits after tax of RMB 790 million yuan from disposal of the Wuhan Store in this period were made, making an overall improvement in investment efficiency.
-
CLEVO (CAYMAN ISLANDS) HOLDING COMPAY (Cayman Islands)
USD 220,730 Investment in the establishment of Buynow IT Malls in Shanghai, Nanchang, Changsha, Shenyang, Zhengzhou, Tianjin, Hangzhou, Guangzhou, Changchun, Pudong Shanghai, Xi’an and Harbin, Xiamen, Wuxi, Beijing, Xuhui, Qingdao, Changzhou, Chongqing, Daqing, Zibo, Taizhou, and Chicony Department Stores in Suzhou, Wuhan and Chengdu
1,691,900 (Note 2)
-
KAPOK COMPUTER (SAMOA) CORPORATION
USD 7,000 Investment in the establishment of Kaibo Computer (Kunshan), notebook production base
(203,161) In the current period, the loss of exchange rate was recognized due to depreciation of the Renminbi, resulting in a loss.
In Q1 of 2019, risks of exchange rates were avoided, and exchange gain of NTD 126,834,000 was recognized
BUYNOW ON-LINE HOLDING CORPORATION
USD1,100 Investment was made in Shanghai Buynow Online Information Technology Co., Ltd., for purpose of expanding online trading business via the company’s e-commerce in addition to physical stores.
(4,426) The e-commerce business is inconsistent with the scale of economy, and suffers small losses.
Continuous improvements are made in combination with the commodities of thousands of merchants in the Buynow Mall, and the service guarantee of the physical Buynow chain stores to build the complete online sales and service platform, and embrace the new retail era of online and offline coverage. .
LUNARIA INVESTMENT GK JPY 4,700,000 142,584 The whole building is rented out with stable profits. -
CLEVO Investment Co., Ltd. NTD 140,000 (1,665) The securities are evaluated for losses. - KAPOK COMPUTER NTD 80,000 8 The securities are evaluated for benefits. -
Note 1: Please refer to P.229 of the Annual Report for details. Note 2: Please refer to P.229–P.231 of the Annual Report for details.
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(III) Investment Plans for the Coming YearIn the future, the Company will remain focused on the transformation and adjustment
of China's Distribution Division. The land acquisition and projects in construction that havebeen invested in Mainland for these years have been completed. The shopping malls inShantou and Dezhou have opened for business in December, 2018. The projects in Luoyang,Jinzhou and Anshan have been completed, with the current strategy for entire tenancy orsales underway. At present, there are only office buildings for sale in Shantou, Anshan andJinzhou amounting to RMB 500 million, which are expected to be sold in 2019.
VI. Risk Analysis and Evaluation: Analysis and evaluation in the most recent year and up to the dateof publication of the annual report
(I) Effects of Changes in Interest Rate and Exchange Rate and Inflation on the Company'sFinance, and Future Response Measures.1. Analysis and Evaluation of Interest Rate Risks:
(1) Due to the demand for working capital, the Company needs to borrow money fromfinancial institutions. The borrowings are mainly denominated in US dollars, NTD andRenminbi. The total borrowings on December 31, 2018 were NTD 43.01 billion, andthe total financial loans on March 31, 2019 were NTD 41.39 billion. Assuming thatthe amount of borrowings due from the Company is maintained at NTD 41.4 billion,and the ratio of changes in interest rates is 0.25% (one yard), the Company’s interestexpenses will increase/decrease by approximately NTD 103,500, 000.Following the rise in US interest rate from December 2016, the global economicrecovery was established. The interest rate has been raised for 3 times in 2017, and4 times in 2018. The market expects that there will still be 2-3 chances of raisinginterest rates in 2019, but the FED announced in March 2019 that it will not raise theinterest rate this year and will end its contraction in September.In 2019, the overall economy is exposed to the most critical risks from the global tradewar, followed by the global economic growth tending to be flat, and the slowdown ofthe Mainland China’s economy. As the Mainland government previously promotedfinancial deleverage, and controlled corporate financing precipitately, and the tradewar has affected the consumption and investment confidence, the Mainland’s economicperformance is weak in this year. If the fiscal and monetary policies of the Mainlandgovernment are not as effective as expected, the risks of economic downturn willbecome more serious, and spread to neighboring countries in Asia. The last risk is theoutflow of funds from emerging markets. The Fed continues to tighten up the monetarypolicy, and emerging markets such as India, Indonesia, and Thailand, will have majorelections next year, making the situation more volatile, and resulting in the withdrawalof funds from the emerging markets. Due to the relatively high base period and thecontinued negative impact of the trade war, the US economic growth rate is expectedto slow down to 2.2%. Taiwan’s economic growth rate will slow down to 2.4%, whileChina will fall to 6.2%.
(2) The net interest expenses of 2018 were NTD 747,206,000 in total, NTD 202,863,000less than that of 2017, mainly due to the decrease in the proportion of RMBborrowings. The Company will keep track of the trends in market interest rates andexchange rates, and adjust the loan portfolio in each currency to grasp the mostfavorable financing strategy, and reduce financing costs.
2. Risk analysis and assessment of exchange rate changes:(1) The Company’s sales and material purchase costs are quoted in US dollars, and
material costs account for about 85% of sales, so the fluctuation in the US dollar
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exchange rate will affect the Company's gross profit margin. In terms of net operating revenue minus purchase expenses, the net foreign exchange portion in the US dollars accounted for 15% of the operating revenue. Assuming a 1% change in the US dollar exchange rate, the impact on the Company’s gross profit margin is 0.15%.
(2) As the income from the Company’s investment in the Buynow Business Division inMainland, and assets are denominated in RMB, and the Group’s statements areexpressed in NTD, the appreciation of the RMB against NTD is beneficial to theCompany.In 2018, the appreciation of Renminbi against US dollar was followed by depreciation,the CNY interest rate rose to 6.25 in the first half of the year. In June, Renminbi beganto depreciate due to the Sino-US trade war, accompanied by the downturn in the stockexchange, CNY went all the way to 6.87 at the end of the year, with an annualdepreciation of 5%. Following the trend of the renminbi, NTD has depreciated 3.6%for the year. In 2018, the Sino-US trade war and the rapid rise of US bond yields ledto a downturn in stocks and bonds, the prospects for profitability of technology stockswere not as expected, oil prices have fallen sharply resulting in major fluctuations instocks and exchange rates. After continuous growth from 2017 to 2018, the baseperiod for global economy became longer. In addition, the effects of US tax reductionhave diminished, the trade war has continued, and major central banks have tightenedup monetary policy. Before the next wave of new growth momentum reveals, sloweconomic growth in various countries has become an inevitable trend. Since theexchange rate of the New Taiwan dollars is easily affected by inflow and outflow offoreign capital, and cross-strait relations and the situation in the Taiwan Strait aretense, there will be substantial outflows of foreign capital. However, the deteriorationof the US-China relationship has gradually spread from the economy and trade topolitics. The tension in the Taiwan Strait will also force foreign investors to withdrawcapital in a short term. With the doubts as to economy in the future, Taiwan stocks andexchanges are expected to remain weak. In early 2019, US President Trump said thatthe Sino-US trade negotiations made substantial progress, and the US decided topostpone further tariffs on Chinese imports, and MSCI announced that it would increasethe weight of A-shares in its index at the end of end of February, driving the Shanghaistock index to rise. MSCI will increase the weight of China’s stock market from 5% to20%. It is expected that there will be 80 billion US dollars of passive capital inflows.On this basis, the RMB exchange rate is unlikely to depreciate this year. It is expectedthat the RMB will remain at at least 6.70 this year. The Company adopts the policy ofnatural hedging. In 2018, the appreciation of the US dollars against NTD is less thanthe appreciation of the US dollars against the RMB, causing the evaluation loss. TheCompany will continue to pay attention to the international economic situation, takeinto account the bank analysis report, and appropriately undertake foreign exchangetransactions to avoid risks, and reduce the impact of fluctuations in exchange rates. InQ1 of 2019, exchange gain has achieved NTD 152 million.
(II) Policies, Main Causes of Gain or Loss and Future Response Measures with Respect to High-risk, High-leveraged Investments, Lending or Endorsement Guarantees, and DerivativesTransactions.1. The Company is not engaged in high-risk and highly leveraged investments. All
investments have been carefully evaluated, and will not be made unless a resolution ispassed by the Board of Directors.
2. The Company only lends funds and provide endorsements and guarantees to the
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subsidiaries in which it directly or indirectly hold more than 50% of the shares, or the companies for whom endorsements and guarantees are made in joint investment relationship based on the proportion of shareholding. As the subsidiaries only maintain a small amount of capital, in order to meet the needs of the working capital of the invested subsidiaries, after the Board of Directors evaluates the necessity of and approves the funds and endorsement, the Company will provide support by lending funds or making endorsements and guarantees. No other gains or losses are derived from the transactions of funds lending and endorsement & guarantee between the Company and its subsidiaries other than the interest income from funds lent.
3. The operation of the Company’s derivative products is limited to foreign exchangetransactions for exchange rate hedging, aimed at analysis and evaluation of thetransactions undertaken based on the Company’s net foreign exchange position, and therisks of changes in exchange rates.The profits or losses from such transactions will beincluded in exchange income account for evaluation, and risks have been taken intoconsideration for all operations in accordance with the regulations prescribed by thecompetent authorities.
(III) Future Research and Development Projects, and Corresponding budget.1. Please refer to the P.76-P.77 of the Annual Report for the research and developmentprojects of the Company in the future.2. It is estimated that the research and development expenses for the whole year will
account for about 3-5% of the annual operating revenue. The R&D expenses for 2018were NTD 528,608, 000, accounting for 3.6% of NB operating revenue, and the R&Dexpenses for the first quarter of 2018 were NTD 128,335000, accounting for 3.8% ofNB operating revenue.
(IV) Effects of and Response to Changes in Significant Policies and Regulations on the FinancialOperations of the Company.1. All departments and legal offices of the Company will pay attention to the changes in
important policies and laws at home and abroad, and evaluate their impact on theCompany.
2. Other recent changes in policies and laws at home and abroad have no significant impacton the Company’s current financial business.
(V) Effects of and Response to Changes in Technology and in Industry on the Financial Operationsof the Company.1. The Company pays attention to the changes in the relevant technology in the industry at
all times, and assigns special personnel or ad hoc groups to evaluate the impact of suchchanges on the Company’s future development and financial business, and thecorresponding measures if necessary.
2. The changes in the relevant technology for the most recent year have no significantimpact on the Company’s current financial business.
(VI) The Impact of Changes in Corporate Image on the Corporate Risk Management, and theCompany's Response Measures: None.
(VII) Expected Benefits from, Risk Relating to and Response to Merger and Acquisition Plans:None.
(VIII) Expected Benefits from, Risk Relating to and Response to Factory and Expansion Plans.The production capacity of the Kunshan Plant is sufficient to meet the annual demand ofabout 2 million units. This year, there is no need for expansion of plants, and the Companyis expected to replace old equipment, improve AI automation production, and improve
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production efficiency and quality. (IX) Risks Relating to and Response to Excessive Concentration of Purchase and Sales.
1. The Company’s procurement strategy is flexible with strong adaptability to the market.At the same time, it maintains good relationships with many suppliers. The currentproduction base is concentrated in the Mainland Kaibo (Kunshan) Plant. To cut down costsof materials, more than 95% of materials are directly purchased from Taiwanesesuppliers by the Kushan Plant at present. The delivery time, quality and prices will improvethe production efficiency of Kunshan Plan, and effectively reduce inventory risks.
2. The Company’s sales customer base is scattered. As we attract customers with productadvantages, fast delivery and good services, and have established good relationshipswith many small and medium-sized distributors around the world, there is no risks fromconcentration of single customers.
(X) Effects of, Risks Relating to and Response to Large Share Transfer or Changes in Shareholdingsby Directors, Supervisors, or Shareholders with Shareholding of over 10%.The number of shares held by the directors and supervisors of the Company is stable, free
from mass transfer. (XI) Effects of, Risks Relating to and Response to Changes in Control over the Company: None.(XII) Litigation or Non-litigation Matters, list the finished or pending major lawsuits, non-litigation
or administrative proceedings in which the Company and its directors, supervisors, generalmanager, actual controller, major shareholders holding more than 10% of the shares, and affiliated companies are involved; and disclose the facts, amount of subject matter, commencement date for litigation, parties to litigation, and treatment up to the date of publication of the annual report if the outcome thereof may have a significant impact on shareholders’ equity or prices for securities. 1. Description of the major lawsuits, non-litigation or administrative proceedings which
have been closed or pending in the most recent year and up to the date of publicationof the annual report: The Company has not been involved in any lawsuits, non-litigationor administrative proceedings up to the date of publication of the annual report.
2. The Company’s directors, supervisors, general managers and the affiliated companiesin which the Company holds more than 10% of the shares have not been involved inany lawsuits, non-litigation or administrative proceedings in the most recent year andup to the date of publication of the annual report.
(XIII) Other significant risks and countermeasures: None.
VII. Other significant matters: None.
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VIII. Additional Information1. Summary of Affiliated Companies:
(1)1. Organizational Charts of Affiliated companies:
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(2) Basic Information on the AffiliatesUnit:thousand
Name Of Corporation Date of
Incorporation Address Paid-in Capital Main business line
KAPOK COMPUTER CO., LTD.
1993/4/1 No. 189, Yucheng St., Nangang Dist., Taipei City 115, Taiwan (R.O.C.)
NTD 8,000 Design and sale of computers and computer peripherals
CLEVO INVESTMENT CO., LTD.
1998/8/1 Rm. 1, 8F., No. 341, Sec. 4, Xinyi Rd., Da’an Dist., Taipei City 106, Taiwan (R.O.C.)
NTD 140,000 Investment
CLEVO (CAYMAN ISLANDS) HOLDING COMPANY
2001/2/22 P. O. Box 31119 Grand Pavilion, Hibiscus Way, 802 West Bay Road, Grand Cayman, KY1-1205 Cayman Islands
USD 220,730 Investment
KAPOK COMPUTER (SAMOA) CORPORATION
2001/8/20 Grand Floor NPF Building, Beach Road, Apia, Samoa
USD 7,000 Investment
CLEVO COMPUTER SINGAPORE PTE LTD.
1998/3/30 10 Anson Road, #12-15 International Plaza, Singapore 079903
SGD 27,544 Management and advisory of computers
BUYNOW ON-LINE HOLDING CORPORATION
2009/4/3 Ground Floor NPF Building, Beach Road, Apia, Samoa
USD 1,100 Investment
BUYNOW GLOBAL CORPORATION
2002/6/28 Palm Grove House, P.O. Box 438, Road Town, Tortola , British Virgin Islands
USD 3,600 Investment
BUYNOW (HANGZHOU) CORPORATION
2002/8/28 Palm Grove House, P.O. Box 438, Road Town, Tortola , British Virgin Islands
USD 5,000 Investment
BUYNOW (ZHENGZHOU) CORPORATION
2003/1/31 Ground Floor NPF Building, Beach Road, Apia, Samoa
USD 3,000 Investment
BUYNOW GROUP (CHANGSHA) CORPORATION
2003/1/7 P.O. Box 3152, Road Town, Tortola, British Virgin Islands
USD 4,000 Investment
BUYNOW (NANCHANG) CORPORATION
2003/1/31 Ground Floor NPF Building, Beach Road, Apia, Samoa
USD 3,000 Investment
BUYNOW (GUANGZHOU) CORPORATION
2004/9/28 Ground Floor NPF Building, Beach Road, Apia, Samoa
USD 5,000 Investment
FLYING WOLF INVESTMENT LIMITED
2001/8/23 Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands
USD 3,000 Investment
BUYNOW (XIAMEN) CORPORATION
2005/7/28 Ground Floor NPF Building, Beach Road, Apia, Samoa
USD 3,000 Investment
BUYNOW GROUP (XIAN) CORPORATION
2003/9/25 Ground Floor NPF Building, Beach Road, Apia, Samoa
USD 3,000 Investment
FLYING INTERNATIONAL INVESTMENT LIMITED
2002/5/16 Ground Floor NPF Building, Beach Road, Apia, Samoa
USD 3,000 Investment
BUYNOW (CHANGCHUN) CORPORATION
2004/1/19 Ground Floor NPF Building, Beach Road, Apia, Samoa
USD 2,000 Investment
BUYNOW (WUXI) CORPORATION
2003/12/29 Ground Floor NPF Building, Beach Road, Apia, Samoa
USD 2,000 Investment
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Name Of Corporation Date of
Incorporation Address Paid-in Capital Main business line
BUYNOW GROUP (QINGDAO) CORPORATION
2003/9/8 Ground Floor NPF Building, Beach Road, Apia, Samoa
USD 3,500 Investment
BUYNOW (HARBIN) CORPORATION
2004/3/3 Ground Floor NPF Building, Beach Road, Apia, Samoa
USD 3,000 Investment
BUYNOW (CHENGDU) CORP.
2006/11/8 Ground Floor NPF Building, Beach Road, Apia, Samoa
USD 7,000 Investment
BUYNOW (CHONGQING) LIMITED
2008/9/17 RM 2702-03 CC Wu Building, 302-8 Hennessy Road, Wanchai, Hong Kong
USD 5,000 Investment
BUYNOW ON-LINE LIMITED 2009/4/29 RM 2702-03, C. C. Wu Building, 302-8 Hennessy Road, Wanchai, Hong Kong
USD 1,100 Investment
BUYNOW (DAQING) CORPORATION
2009/12/29 Ground Floor NPF Building, Beach Road, Apia, Samoa
USD 3,000 Investment
BUYNOW (ZIBO) CORPORATION
2010/4/16 Ground Floor NPF Building, Beach Road, Apia, Samoa
USD 3,000 Investment
BUYNOW (BEIJING) CORPORATION
2002/6/11 Ground Floor NPF Building, Beach Road, Apia, Samoa
USD 6,000 Investment
SKILL DEVELOP INTERNATIONAL LIMITED
2004/8/23 Ground Floor NPF Building, Beach Road, Apia, Samoa
USD 9,350 Investment
WELL ASIA INVESTMENT LIMITED
1992/10/29 28/F WING ON CENTRE 111 CONNAUGHT RD CENTRAL HK
USD 9,200 Investment
BUYNOW (YANCHENG) CORPORATION
2010/8/16 Ground Floor NPF Building, Beach Road, Apia, Samoa
USD 31,500 Investment
BUYNOW (HUIZHOU) CORPORATION
2010/8/30 Ground Floor NPF Building, Beach Road, Apia, Samoa
USD 1,500 Investment
BUYNOW (GUIYANG) CORPORATION
2010/4/27 Ground Floor NPF Building, Beach Road, Apia, Samoa
USD 10,000 Investment
BUYNOW (YINGKOU) CORPORATION
2011/4/13 Ground Floor NPF Building, Beach Road, Apia, Samoa
USD 15,000 Investment
BUYNOW (ANSHAN) CORPORATION
2011/5/12 Ground Floor NPF Building, Beach Road, Apia, Samoa
USD 38,000 Investment
BUYNOW SZ. CORPORATION
2010/7/7 Ground Floor NPF Building, Beach Road, Apia, Samoa
USD 14,900 Investment
SMARTER CAPITAL LIMITED 2010/3/22 Ground Floor NPF Building, Beach Road, Apia, Samoa
USD 14,900 Investment
BUYNOW (TAIZHOU) CORPORATION
2011/8/24 Ground Floor NPF Building, Beach Road, Apia, Samoa
USD 17,000 Investment
BUYNOW (DEZHOU) CORPORATION
2011/8/24 Ground Floor NPF Building, Beach Road, Apia, Samoa
USD 30,000 Investment
BUYNOW (LUOYANG) CORPORATION
2011/9/9 Ground Floor NPF Building, Beach Road, Apia, Samoa
USD 30,000 Investment
BUYNOW (FUJIAN QUANZHOU) CORPORATION
2011/9/9 Ground Floor NPF Building, Beach Road, Apia, Samoa
USD 15,000 Investment
BUYNOW (JINZHOU) CORPORATION
2011/12/19 Ground Floor NPF Building, Beach Road, Apia, Samoa
USD 15,000 Investment
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Name Of Corporation Date of
Incorporation Address Paid-in Capital Main business line
BUYNOW (SHANTOU) CORPORATION
2012/12/4 Ground Floor NPF Building, Beach Road, Apia, Samoa
USD 19,200 Investment
CLEVO (HK) INVESTMENT HOLDING LIMITED
2014/1/17 31/F CHINACHEM CENTURY TOWER 178 GLOUCESTER RD WANCHAI HK
USD 100 Investment
SHANGHAI BUYNOW ELECTRONIC INFORMATION CO., LTD.
1998/5/11 1111 Jiajiabin Road, Xuhui District, Shanghai, China
USD 16,500 Rental of the display venues of computer and related electronic product; information consultation; maintenance services; property management
BUYNOW ELECTRONIC INFORMATION (HANGZHOU) CO., LTD
2002/9/26 No. 23, Jiaogong Road, Xihu District, Hangzhou, Zhejiang, China
USD 5,000 Manufacturing, sale, maintenance service, research and development of computers and computer peripherals and digital products, and property management of buildings.
BUYNOW (ZHENGZHOU) ELECTRONIC INFORMATION CO., LTD.
2003/4/16 No. 509, Bainaohui Building, No. 11 East Section of Dongfeng Road, Jinshui District, Zhengzhou City, Henan, China
USD 3,000 Manufacturing, sale, maintenance service, research and development of computers and computer peripherals and digital products.
CHANGSHA HUNGYU BUSINESS MANAGEMENT CO., LTD.
2003/4/15 No. 9 Renmin Road, Yuhua District, Changsha City, Hunan, China
USD 3,000 Manufacturing, sale, maintenance service, research and development of computers and computer peripherals and digital products, and property management of buildings.
BUYNOW ELECTRONIC INFORMATION (SHENYANG) CO., LTD.
2002/5/31 No. 5, No. 5, Nansanhao Street, Heping District, Shenyang, Liaoning, China
USD 3,000 Research and development of computers and computer peripherals and electronic products, and advisory of economic information
BUYNOW (NANCHANG) INDUSTRY CO., LTD.
2003/3/31 No. 318 Zhongshan Road, Xihu District, Nanchang City, Jiangxi, China
USD 3,000 Manufacturing, sale, maintenance service, research and development of computers and computer peripherals and digital products, and property management of buildings.
BUYNOW (GUANGZHOU) ELECTRONIC INFORMATION CO., LTD.
2004/11/22 IT4F-4A01, 4th Floor, Bainaohui Technology Building, No. 598 Tianhe Road, Tianhe District, Guangzhou, Guangdong, China
USD 5,000 Manufacturing, sale, maintenance service, research and development of computers and computer peripherals and digital products.
BUYNOW (FUJIAN) ELECTRONIC TECHNOLOGY DEVELOPMENT CO., LTD.
2005/1/14 No. 76, 78, 80, Hubin South Road, Siming District, Xiamen, Fujian, China
USD 3,000 Manufacturing, sale, maintenance service, research and development of computers and computer peripherals and digital products.
BUYNOW (WUXI) ELECTRONIC TECHNOLOGY DEVELOPMENT CO., LTD.
2006/1/12 No. 25, Renmin West Road, Wuxi, Jiangsu, China
USD 2,800 Manufacturing, sale, maintenance service, research and development of computer software and digital products
BUYNOW (HARBIN) INDUSTRY CO., LTD.
2004/12/9 No. 87, Xidazhi Street, Nangang District, Harbin, Heilongjiang, China
USD 3,000 Manufacturing, sale, maintenance service, research and development of computers and computer peripherals and digital products.
BUYNOW (XIAN) INDUSTRY CO., LTD.
2004/2/27 No. 68, Middle Section of Yanta Road, Beilin District, Xi'an, Shaanxi, China
USD 3,000 Manufacturing, sale, maintenance service, research and development of computers and computer peripherals and digital products.
TIANJIN BUYNOW ELECTRONIC INFORMATION CO., LTD.
2002/8/16 No. 336, West Anshan Road, Nankai District, Tianjin, China
USD 6,000 Developmment,producttion and sales of computer hardware and software and electronic digital technology products
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Name Of Corporation Date of
Incorporation Address Paid-in Capital Main business line
BUYNOW (CHANGCHUN) INDUSTRY CO., LTD.
2005/6/23 6th Floor, No. 1313, Gongnong Road, Chaoyang District, Changchun City, Jilin, China
USD 2,100 Manufacturing, sale, maintenance service, research and development of computers and computer peripherals and digital products, and property management of buildings.
QINGDAO BUYNOW TECHNOLOGY INDUSTRY CO., LTD.
2004/5/19 No.147, Liaoning Road, North District, Qingdao, Shandong, China
USD 17,000 Manufacturing, sale, research and development of computers and computer peripherals. Display, advisory and after-sales service of digital products. Property management of self-owned buildings.
KAPOK COMPUTER (KUNSHAN) CO., LTD.
2001/11/6 No. 200, Second Avenue, Kunshan Comprehensive Bonded Zone, Jiangsu ,China
USD 6,000 Manufacturing, sale, research and development and maintenance service of computer, notebook, tablet, information and communication products and computer components
BUYNOW (CHENGDU) ELECTRONIC INFORMATION CO., LTD.
1998/6/18 No. 118, Xinnan Road, Wuhou District, Chengdu, Sichuan, China
USD 7,000 Manufacturing, sale, maintenance service, research and development of computers and computer peripherals and digital products, and property management of buildings.
BUYNOW (NANJING) FACILITY LEASING AND MANAGEMENT CO., LTD.
1999/9/19 NO.333 Zhujiang Road, Xuanwu District, Nanjing, China
USD 1,550 Manufacturing, sale, research and development of computers and computer peripherals and services for relating electronics
KALOR BUYNOW (HEIFEI) ELECTRONIC INFORMATION CO., LTD.
2007/10/24 1st Floor, Anhui International Business Center, 162 Jinzhai Road, Hefei, Anhui, China
USD 1,800 Manufacturing, sale, research and development of computers and computer peripherals and services for relating electronics
QUALITY TRUST PROPERTY MANAGEMENT CO., LTD.
2006/8/1 No. 23, Jiaogong Road, Xihu District, Hangzhou Zhejiang, China
USD 750 Property management, advisory of real estate, building leasing, housekeeping service, parking lot service, car wash service and business service
WUXI QUNTAI PROPERTY MANAGEMENT CO., LTD.
2007/10/23 Room 501, Bainaohui Technology Building, No. 25 Renmin West Road, Wuxi City, Jiangsu ,China
CNY 500 Property management, advisory of real estate, building leasing, housekeeping service, parking lot service, car wash service and business service
BUYNOW (CHONGQING) INDUSTRY CO., LTD.
2008/12/2 No. CQA4Z02, 4th Floor, No. 2, Keyuan 1st Road, Jiulongpo District, Chongqing, China
USD 5,000 Manufacturing, sale, research and development of computers and computer peripherals(not including electronic publishing), shopping mall management, wholesale and retail of electronic products, property management and parking lot service.
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Name Of Corporation Date of
Incorporation Address Paid-in Capital Main business line
SHANGHAI BUYNOW ONLINE INFORMATION TECHNOLOGY CO., LTD.
2009/7/8 3rd Floor, No. 339, Caoxi North Road, Xuhui District, Shanghai, China
USD 1,000 Wholesale and retail, import and export, and after-sales service of household appliances, computer and computer components, communication equipment, electrical devices, office supplies and complementary products. Development, technology transfer, advisory, service and training of Internet, computer software and hardware and communication equipment.
DAQING BUYNOW ELECTRONIC INFORMATION CO., LTD.
2010/5/18 No. 25, Weiqi Road, Dongfeng New Village, Saertu District, Daqing City, Heilongjiang, China
USD 3,000 Manufacturing, retail and wholesale of computers and computer peripherals, and electronic information shopping mall management.
ZIBO BUYNOW ELECTRONIC INFORMATION CO., LTD.
2010/8/3 No. 31, Liuquan Road, Zhangdian District, Zibo City, Shandong, China
USD 3,000 Manufacturing, sale, maintenance service, research and development of computers and computer peripherals and digital products. Advisory of business management, leasing of self-owned buildings, parking lot management, shopping mall management and property management.
BEIJING CLEVO INVESTMENT MANAGEMENT CONSULTANT CO.,LTD.
2003/1/2 Room 818, Lantian Hesheng Building, No. 32 Zhongguancun Street, Haidian District, Beijing, China
USD 6,000 Business advisory of investment management, wholesale agency of electronic products, import and export of goods and property management.
BUYNOW (YANCHENG) ELECTRONOC INFORMATION TECHNOLOGY DEVELOPMENT CO. LTD.
2010/10/29 No. 22, Huancheng North Road, Yancheng City, Jiangsu, China
USD 31,500 Manufacturing, sale, maintenance service, research and development of computers and computer peripherals and digital products, and advisory of business management.
SUZHOU JINZUO INDUSTRY CO., LTD.
2006/11/22 No. 258, Guangjin Road, Gusu District, Suzhou, Jiangsu, China
CNY 100,000 Business affairs and property management business
TAIZHOU BUYNOW ELECTRONIC INFORMATION CO., LTD.
2011/10/24 No. 51, Renmin East Road, Hailing District, Taizhou City, Jiangsu, China
USD 17,000 Manufacturing, sale, maintenance service, research and development of computers and computer peripherals and digital products, and advisory of business management.
BUYNOW ELECTRONIC INFORMATION (HUIZHOU) CO., LTD
2008/10/17 4th Floor, No. 20, E'ling North Road, Huizhou City, Guangdong, China
CNY 25,000 Manufacturing, sale, research and development and after-sales service of computers and computer peripherals. Property management of buildings.
CLEVO (CHINA) INVESTMENT CO., LTD.
2010/9/21 20th Floor, No. 1600, Zhongshan West Road, Xuhui District, Shanghai, China
USD 30,000 Investment in companies primarily engaged in research and development and advisory service.
GUIYANG BUYNOW ELECTRONIC INFORMATION CO., LTD.
2011/3/4 No. 87, Bo'ai Road, Nanming District, Guiyang City, Guizhou, China
USD 10,000 Research and development of computers and computer peripherals and electronic products, and advisory service of business management.
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Name Of Corporation Date of
Incorporation Address Paid-in Capital Main business line
YINGKOU BUYNOW ELECTRONIC INFORMATION CO., LTD.
2011/6/10 No. 18, Dongcheng Garden, Zhanqian District, Yingkou City, Liaoning, China
USD 15,000 Manufacturing, sale, maintenance service, research and development of computers and computer peripherals and digital products, and advisory of business management.
ANSHAN BUYNOW ELECTRONIC INFORMATION CO., LTD.
2011/6/20 No. 38, Shengli South Road, Tiedong District, Anshan City, Liaoning, China
USD 38,000 Manufacturing, sale, maintenance service, research and development of computers and computer peripherals and digital products, and advisory of business management.
DEZHOU BUYNOW ELECTRONIC INFORMATION CO., LTD.
2011/10/28 No. 500, Jiefang Middle Road, Decheng District, Dezhou City, Shandong, China
USD 30,000 Research and development and maintenance service of computers and computer peripherals and electronic products. Advisory service of business management and shopping mall management.
LUOYANG BUYNOW ELECTRONIC INFORMATION CO., LTD.
2012/8/10 No. 300, Zhongzhou Middle Road, Xigong District, Luoyang City, Henan, China
USD 30,000 Research and development and maintenance service of computers and computer peripherals and electronic products. Advisory service of business management and shopping mall management.
KUNSHAN KAISHUO TRADING CO., LTD.
2014/1/26 No. 8, Zhaofeng Road, Huaqiao Town, Kunshan City, Jiangsu, China
USD 1,000 Mechanical equipment and accessories, wire and cable, air conditioning equipment, building and decoration material, lighting equipment, Kitchen appliance, water cleaner, pipeline and accessories, fire safety equipment, compressor and accessories, wholesale of elevators and appliances, import and export and advisory services
QUANZHOU BUYNOW INDUSTRY CO., LTD.
2013/4/24 No. 79, Jiuyi Road, Xiangcheng District, Quanzhou, Fujian, China
USD 15,000 Research and development and maintenance service of computers and computer peripherals and electronic products. Advisory service of business management and shopping mall management.
KUNSHAN KAIMING TRADING CO., LTD.
2007/7/1 Room 219, 220, No. 8, Weiye Road, Kunshan Development Zone , Jiangsu ,China
CNY 3,500 Provide market management services for operators of laptop computer, tablet, desktop computer, palmtop computer, information and communication products and computer component.
WUXI BUYNOW ELECTRONIC MARKET CO., LTD.
2009/1/5 No. 25, Renmin West Road, Nanchang District, Wuxi, Jiangsu, China
CNY 500 Leasing of facility, market management service, catering management, property management, parking lot management.
SHANGHAI BUYNOW ELECTRONIC PRODUCTS MARKET MANAGEMENT CO., LTD.
2005/12/16 Room 01, 101, 2nd - 5th Floor, Ground Floor, No. 339, Caoxi North Road, Shanghai, China
CNY 105,000 Provide market management services for operators of electronic products.
BUYNOW (JINZHOU) INDUSTRY CO., LTD.
2013/9/5 3-19A, Red Leaf Maple,Chrysanthemum in Linghe District,Jinzhou City, Liaoning, China
USD 15,000 Manufacturing of computer software and hardware and consumer electronic products, advisory of business management and shopping mall management.
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Name Of Corporation Date of
Incorporation Address Paid-in Capital Main business line
GUANGDONG BUYNOW REAL ESTATE MANAGEMENT CO., LTD.
1997/7/9 598 Tianhe Road, Tianhe District, Guangzhou, Guangdong, China
CNY 92,030 Self-owned property management and leasing,manufacturing, sale, research and development of computer software, hardware, digital products.
BEIJING KAIYE ELECTRONIC TECHNOLOGY CO., LTD.
2008/12/31 Room B201, 2nd Floor, G/F, 99 Chaowai Street, Chaoyang District, Beijing, China
CNY 50,000 Technology-extension services, computer maintenance, public parking lot service for motorcycle, property management, business management and advisory, business building leasing, wholesale of computer and computer peripherals, hardware electronic and daily appliance.
SHANTOU BUYNOW MALL CO., LTD.
2010/12/31 No. 701, Building 1, North District, Bixiazhuang, Longhu District, Shantou City, Guangdong, China
CNY 118,000 Investment in companies primarily engaged in research and development and advisory service.
SUZHOU BUYNOW DEPARTMENT STORE CO., LTD.
2015/3/30 Room 0518, 5th Floor, No. 258, Guangjin Road, Gusu District, Suzhou, Jiangsu, China
CNY 100 Wholesale and retail of daily goods, office supplies, shoes, hats and bags, household appliance, sporting goods, hardware electronic, watch and the first-class medical device.
XIAMEN LEJING INTERNET BAR CO., LTD.
2016/5/27 3Y01, 3rd Floor, Bai Brain Technology Building, 76, 78, 80 Hubin South Road, Siming District, Xiamen, Fujian, China
CNY 100 Internet café and internet message service
SHANGHAI HUIZHUAN RESTAURANT MANAGEMENT CO., LTD.
2016/7/4 5/F, No. 339, Caoxi North Road, Xuhui District, Shanghai, China
CNY 5,000 Catering business management
SHANGHAI HUIHEI ADVERTISMENT CO., LTD.
2014/4/1 2/F, No. 339, Caoxi North Road, Xuhui District, Shanghai, China
CNY 1,000 Advertising design and marketing
CLEVO JAPAN GK 2014/4/17 No. 18, Aoba, Aoba, Meguro-ku, Tokyo, Japan
JPY 10,000 Investment
LUNURIA INVESTMENT GK 2014/9/29 Nihonbashi 1-chome, Nihonbashi 1-chome, 4 Chuo, Chuo-ku, Tokyo, Japan
JPY 100 Investment
Note 1: Foreign currency to NTD exchange rate is as follows: USD SGD RMB JPY
2018.12.31 Exchange rate 29.782 22.460 4.4851 0.2777
(3) Shareholders and Subsidiaries with Deemed Control and Subordination: None(4) Statement of business relationship
1. Business Project Of Affiliates: Manufacturing, Sale, Maintenance Service, Research AndDevelopment Of Computers And Computer Peripherals, Technical And BusinessConsultant, Investment, Property Management Of Buildings, Production And Sales OfClothing, Non-Staple Food, Operating Coffee Shop.
2. The Business Between The Various Affiliates Is Related To Each Other. The Situation Is AsFollows:(1) Clevo (Cayman Islands) Holding Company, Kapok Computer (Samoa) Corporation,
Clevo Computer Singapore Pte Ltd, Buynow On-Line Holding Corporation, BuynowGlobal Corporation , Buynow (Hangzhou) Corporation, Buynow (Zhengzhou)Corporation, Buynow Group (Changsha) Corporation, Buynow (Nanchang)Corporation, Buynow (Guangzhou) Corporation, Flying Wolf Investment Limited,
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Buynow (Xiamen) Corporation, Buynow Group (Xian) Corporation, Flying International Investment Limited, Buynow (Changchun) Corporation, Buynow (Wuxi) Corporation, Buynow Group (Qingdao) Corporation, Buynow (Harbin) Corporation, Buynow (Chengdu) Corporation, Buynow (Chongqing) Limited, Buynow On-Line Limited, Buynow (Daqing) Corporation, Buynow (Zibo)Corporation, Buynow (Beijing) Corporation, Skill Develop International Limited, Well Asia Investment Limited, Buynow (Yancheng) Corporation, Buynow (Huizhou) Corporation, Buynow (Guiyang) Corporation, Buynow (Yingkou) Corporation, Buynow (Anshan) Corporation, Buynow Sz. Corporation, Smarter Capital Limited, Buynow (Taizhou)Corporation, Buynow (Dezhou) Corporation, Buynow (Luoyang) Corporation, Buynow (Fujian Quanzhou) Corporation, Buynow (Jinzhou) Corporation, Buynow (Shantou) Corporation: Holding Company Transferred Investment In China;Clevo (Hk) Investment Holding Company: Holding Company Transferred Investment In Japan
(2) Kapok Computer Co., Ltd. Provides Sales Services For Products Sold By Clevo Co.(3) Clevo Investment Co., Ltd, Shanghai Buynow Electronic Information Co., Ltd., Buynow
Electronic Information (Hangzhou) Co., Ltd, Buynow (Zhengzhou) Electronic InformationCo., Ltd., Changsha Hungyu Business Management Co., Ltd., Buynow (Nanchang)Industry Co., Ltd., Buynow (Guangzhou) Electronic Information Co., Ltd., BuynowElectronic Information (Shenyang) Co., Ltd., Buynow (Fujian) Electronic TechnologyDevelopment Co., Ltd., Buynow (Xian) Industry Co., Ltd., Tianjin Buynow ElectronicInformation Co., Ltd., Buynow (Changchun) Industry Co., Ltd., Buynow (Wuxi) ElectronicTechnology Development Co., Ltd., Qingdao Buynow Technology Industry Co., Ltd.,Buynow (Harbin) Industry Co., Ltd., Buynow (Chengdu) Electronic Information Co., Ltd.,Buynow (Nanjing) Facility Leasing And Management Co., Ltd., Kalor Buynow (Heifei)Electronic Information Co., Ltd., Quality Trust Property Management Co., Ltd., WuxiQuntai Property Management Co., Ltd., Buynow (Chongqing) Industry Co., Ltd.,Shanghai Buynow Online Information Technology Co., Ltd., Daqing Buynow ElectronicInformation Co., Ltd., Zibo Buynow Electronic Information Co., Ltd., Beijing ClevoInvestment Management Consultant Co.,Ltd., Buynow (Yancheng) ElectronocInformation Technology Development Co. Ltd., Buynow Electronic Information(Huizhou) Co., Ltd, Clevo (China) Investment Co., Ltd., Suzhou Jinzuo Industry Co., Ltd.,Guiyang Buynow Electronic Information Co., Ltd., Yingkou Buynow ElectronicInformation Co., Ltd., Anshan Buynow Electronic Information Co., Ltd., Taizhou BuynowElectronic Information Co., Ltd., Dezhou Buynow Electronic Information Co., Ltd.,Luoyang Buynow Electronic Information Co., Ltd., Quanzhou Buynow Industry Co., Ltd.,Buynow (Jinzhou) Industry Co., Ltd., Kunshan Kaishuo Trading Co., Ltd., GuangdongBuynow Real Estate Management Co., Ltd., Shanghai Buynow Electronic ProductsMarket Management Co., Ltd., Wuxi Buynow Electronic Market Co., Ltd., BeijingKaiye Electronic Technology Co., Ltd., Shantou Buynow Mall Co., Ltd., Suzhou BuynowDepartment Store Co., Ltd., Xiamen Lejing Internet Bar Co., Ltd., Shanghai HuizhuanRestaurant Management Co., Ltd., , Shanghai Huihei Advertisment Co., Ltd., CLEVOJAPAN GK, Kunshan Kaiming Trading Co., Ltd., Lunaria Investment GK Are NotDirectly Related To Operating Business Of Clevo Co.
(4) Kapok Computer (Kunshan) Co., Ltd. Provides Processing Services For Clevo Co., AndIs Engaged In Production And Sales Of Self-Made Products.
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(5) Profiles of the Directors, Supervisors, and General Managers of the affiliates
UNIT:thousand
Enterprise Name Title Name or
Representative
Number of Shares Held Shares Held
Shares Held %
KAPOK COMPUTER CO., LTD. Chairman Hsu, Kun-Tai
8,000 100% Director Hsu,Yueh-YuanDirector Tsai, Ming-HsienSupervisor Yu, Tien-Jung
CLEVO INVESTMENT CO., LTD. Chairman Hsu, Kun-Tai
14,000 100% Director Tsai, Ming-HsienDirector Hsu,Yueh-YuanSupervisor Yu, Tien-Jung
CLEVO (CAYMAN ISLANDS) HOLDING COMPANY Director Hsu, Kun-Tai - -
KAPOK COMPUTER (SAMOA) CORPORATION Director Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - -
CLEVO COMPUTER SINGAPORE PTE LTD. Director Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - -
BUYNOW ON-LINE HOLDING CORPORATION Director Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - -
BUYNOW GLOBAL CORPORATION Director Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - -
BUYNOW (HANGZHOU) CORPORATION Director Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - -
BUYNOW (ZHENGZHOU) CORPORATION Director Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - -
BUYNOW GROUP (CHANGSHA) CORPORATION Director Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - -
BUYNOW (NANCHANG) CORPORATION Director Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - -
BUYNOW (GUANGZHOU) CORPORATION Director Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - -
FLYING WOLF INVESTMENT LIMITED Director Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - -
BUYNOW (XIAMEN) CORPORATION Director Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - -
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Enterprise Name Title Name or
Representative
Number of Shares Held Shares Held
Shares Held %
BUYNOW GROUP (XIAN) CORPORATION Director Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - -
FLYING INTERNATIONAL INVESTMENT LIMITED Director Hsu, Kun-Tai - -
Director Tsai, Ming-Hsien - - BUYNOW (CHANGCHUN) CORPORATION Director Hsu, Kun-Tai - -
Director Tsai, Ming-Hsien - - BUYNOW (WUXI) CORPORATION Director Hsu, Kun-Tai - -
Director Tsai, Ming-Hsien - - BUYNOW GROUP (QINGDAO) CORPORATION Director Hsu, Kun-Tai - -
Director Tsai, Ming-Hsien - - BUYNOW (HARBIN) CORPORATION Director Hsu, Kun-Tai - -
Director Tsai, Ming-Hsien - - BUYNOW (CHENGDU) CORP. Director Hsu, Kun-Tai - -
Director Tsai, Ming-Hsien - - BUYNOW (CHONGQING) LIMITED Director Hsu, Kun-Tai - -
Director Tsai, Ming-Hsien - - BUYNOW ON-LINE LIMITED Director Hsu, Kun-Tai - -
Director Tsai, Ming-Hsien - - BUYNOW (DAQING) CORPORATION Director Hsu, Kun-Tai - -
Director Tsai, Ming-Hsien - - BUYNOW (ZIBO) CORPORATION Director Hsu, Kun-Tai - -
Director Tsai, Ming-Hsien - - BUYNOW (BEIJING) CORPORATION Director Hsu, Kun-Tai - - SKILL DEVELOP INTERNATIONAL LIMITED Director Hsu, Kun-Tai - - WELL ASIA INVESTMENT LIMITED Director Hsu, Kun-Tai - -
Director Tsai, Ming-Hsien - - BUYNOW (YANCHENG) CORPORATION Director Hsu, Kun-Tai - -
Director Tsai, Ming-Hsien - - BUYNOW (HUIZHOU) CORPORATION Director Hsu, Kun-Tai - -
Director Tsai, Ming-Hsien - - BUYNOW (GUIYANG) CORPORATION Director Hsu, Kun-Tai - -
Director
Tsai, Ming-Hsien
-
-
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Enterprise Name Title Name or
Representative
Number of Shares Held Shares Held
Shares Held %
BUYNOW (YINGKOU) CORPORATION Director Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - -
BUYNOW (ANSHAN) CORPORATION Director Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - -
BUYNOW SZ. CORPORATION Director Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - -
SMARTER CAPITAL LIMITED Director Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - -
BUYNOW (TAIZHOU) CORPORATION Director Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - -
BUYNOW (DEZHOU) CORPORATION Director Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - -
BUYNOW (LUOYANG) CORPORATION Director Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - -
BUYNOW (FUJIAN QUANZHOU) CORPORATION Director Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - -
BUYNOW (JINZHOU) CORPORATION Director Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - -
BUYNOW (SHANTOU) CORPORATION Director Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - -
CLEVO (HK) INVESTMENT HOLDING LIMITED Director Hsu, Kun-Tai - -
SHANGHAI BUYNOW ELECTRONIC INFORMATION CO., LTD.
Chairman Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - - Director Chen, Hsueh-Wen - - Supervisor Yu, Tien-Jung - -
BUYNOW ELECTRONIC INFORMATION (HANGZHOU) CO., LTD
Chairman Hsu, Kun-Tai - - Director and General Manager
Tsai, Ming-Hsien - -
Director Chen, Hsueh-Wen - -
BUYNOW (ZHENGZHOU) ELECTRONIC INFORMATION CO., LTD.
Chairman Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - - Director Chen, Hsueh-Wen - - Supervisor Yu, Tien-Jung - -
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Enterprise Name Title Name or
Representative
Number of Shares Held Shares Held
Shares Held %
CHANGSHA HUNGYU BUSINESS MANAGEMENT CO., LTD.
Chairman Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - - Director Huang, Kun-Tai - -
Supervisor Yu, Tien-Jung - -
BUYNOW (NANCHANG) INDUSTRY CO., LTD. Chairman Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - - Director Huang, Kun-Tai - -
BUYNOW (GUANGZHOU) ELECTRONIC INFORMATION CO., LTD.
Chairman Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - - Director Chen, Hsueh-Wen - -
BUYNOW ELECTRONIC INFORMATION (SHENYANG) CO., LTD.
Chairman Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - - Director Chen, Hsueh-Wen - - Supervisor Yu, Tien-Jung - -
BUYNOW (FUJIAN) ELECTRONIC TECHNOLOGY DEVELOPMENT CO., LTD.
Chairman Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - - Director Chen, Hsueh-Wen - - Supervisor Yu, Tien-Jung - -
BUYNOW (XIAN) INDUSTRY CO., LTD. Chairman Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - - Director Chen, Hsueh-Wen - - Supervisor Yu, Tien-Jung - -
TIANJIN BUYNOW ELECTRONIC INFORMATION CO., LTD. Chairman Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - - Director Chen, Hsueh-Wen - - Supervisor Yu, Tien-Jung - -
BUYNOW (CHANGCHUN) INDUSTRY CO., LTD. Chairman Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - - Director Chen, Hsueh-Wen - - Supervisor Yu, Tien-Jung - -
BUYNOW (WUXI) ELECTRONIC TECHNOLOGY DEVELOPMENT CO., LTD.
Chairman Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - - Director Chen, Hsueh-Wen - - Supervisor Yu, Tien-Jung - -
QINGDAO BUYNOW TECHNOLOGY INDUSTRY CO., LTD.
Chairman Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - - Director Chen, Hsueh-Wen - - Supervisor Yu, Tien-Jung - -
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Enterprise Name Title Name or
Representative
Number of Shares Held Shares Held
Shares Held %
BUYNOW (HARBIN) INDUSTRY CO., LTD. Chairman Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - - Director Chen, Hsueh-Wen - - Supervisor Yu, Tien-Jung - -
KAPOK COMPUTER (KUNSHAN) CO., LTD. Chairman Tsai, Ming-Hsien - -Director Hsu, Kun-Tai - - Director Chien, Yih-Long - -
BUYNOW (CHENGDU) ELECTRONIC INFORMATION CO., LTD.
Chairman Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - - Director Chen, Hsueh-Wen - - Supervisor Yu, Tien-Jung - -
BUYNOW (NANJING) FACILITY LEASING AND MANAGEMENT CO., LTD.
Chairman Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - - Director Chen, Hsueh-Wen - - Supervisor Yu, Tien-Jung - -
KALOR BUYNOW (HEIFEI) ELECTRONIC INFORMATION CO., LTD.
Chairman Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - - Director Chen, Hsueh-Wen - - Supervisor Yu, Tien-Jung - -
QUALITY TRUST PROPERTY MANAGEMENT CO., LTD. Executive Director
Chen, Hsueh-Wen - -
Supervisor Yu, Tien-Jung - -
WUXI QUNTAI PROPERTY MANAGEMENT CO., LTD. Executive Director
Chen, Hsueh-Wen - -
Supervisor Yu, Tien-Jung - -
BUYNOW (CHONGQING) INDUSTRY CO., LTD. Chairman Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - - Director Chen, Hsueh-Wen - - Supervisor Yu, Tien-Jung - -
SHANGHAI BUYNOW ONLINE INFORMATION TECHNOLOGY CO., LTD.
Executive Director
Tsai, Ming-Hsien - -
Supervisor Yu, Tien-Jung - -
DAQING BUYNOW ELECTRONIC INFORMATION CO., LTD.
Chairman Hsu, Kun-Tai - - Director Chen, Hsueh-Wen - - Director Tsai, Ming-Hsien - - Supervisor Yu, Tien-Jung - -
ZIBO BUYNOW ELECTRONIC INFORMATION CO., LTD. Chairman Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - - Director Chen, Hsueh-Wen - - Supervisor Yu, Tien-Jung - -
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Enterprise Name Title Name or
Representative
Number of Shares Held Shares Held
Shares Held %
BEIJING CLEVO INVESTMENT MANAGEMENT CONSULTANT CO.,LTD.
Chairman Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - - Director Huang, Kun-Tai - - Supervisor Yu, Tien-Jung - -
BUYNOW (YANCHENG) ELECTRONOC INFORMATION TECHNOLOGY DEVELOPMENT CO. LTD.
Chairman Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - - Director Huang, Kun-Tai - - Supervisor Yu, Tien-Jung - -
BUYNOW ELECTRONIC INFORMATION (HUIZHOU) CO., LTD
Chairman Hsu, Kun-Tai - - Director Huang, Kun-Tai - - Director Chen, Hsueh-Wen - - Supervisor Yu, Tien-Jung - -
CLEVO (CHINA) INVESTMENT CO., LTD. Chairman Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - - Director Chen, Hsueh-Wen - - Supervisor Yu, Tien-Jung - -
SUZHOU JINZUO INDUSTRY CO., LTD. Chairman Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - - Director Chen, Hsueh-Wen - - Supervisor Yu, Tien-Jung - -
GUIYANG BUYNOW ELECTRONIC INFORMATION CO., LTD.
Chairman Hsu, Kun-Tai - - Supervisor Yu, Tien-Jung - -
YINGKOU BUYNOW ELECTRONIC INFORMATION CO., LTD.
Director Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - - Director Huang, Kun-Tai - - Supervisor Yu, Tien-Jung - -
ANSHAN BUYNOW ELECTRONIC INFORMATION CO., LTD.
Chairman Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - - Director Huang, Kun-Tai - - Supervisor Yu, Tien-Jung - -
TAIZHOU BUYNOW ELECTRONIC INFORMATION CO., LTD.
Chairman Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - - Director Huang, Kun-Tai - - Supervisor Yu, Tien-Jung - -
DEZHOU BUYNOW ELECTRONIC INFORMATION CO., LTD.
Chairman Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - - Director Huang, Kun-Tai - - Supervisor Yu, Tien-Jung - -
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Enterprise Name Title Name or
Representative
Number of Shares Held Shares Held
Shares Held %
LUOYANG BUYNOW ELECTRONIC INFORMATION CO., LTD.
Chairman Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - - Director Huang, Kun-Tai - - Supervisor Yu, Tien-Jung - -
QUANZHOU BUYNOW INDUSTRY CO., LTD. Director Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - - Director and General Manager
Huang, Kun-Tai - -
Supervisor Yu, Tien-Jung - -
BUYNOW (JINZHOU) INDUSTRY CO., LTD. Chairman Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - - Director Hsu,Yu-Lun - - Supervisor Yu, Tien-Jung - -
KUNSHAN KAISHUO TRADING CO., LTD. Director Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - - Director Huang, Kun-Tai - - Supervisor Yu, Tien-Jung - -
GUANGDONG BUYNOW REAL ESTATE MANAGEMENT CO., LTD.
Chairman Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - - Director Chen, Hsueh-Wen - -
SHANGHAI BUYNOW ELECTRONIC PRODUCTS MARKET MANAGEMENT CO., LTD.
Executive Director Hsu, Kun-Tai - -
Supervisor Lin,Pi-Tao - -
KUNSHAN KAIMING TRADING CO., LTD. Executive Director
Tsai, Ming-Hsien - -
Supervisor Yu, Tien-Jung - -
WUXI BUYNOW ELECTRONIC MARKET CO., LTD. Executive Director
Hsu, Kun-Tai - -
Director Chen, Hsueh-Wen - - Supervisor Yu, Tien-Jung - -
BEIJING KAIYE ELECTRONIC TECHNOLOGY CO., LTD. Chairman Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - - Director Chen, Hsueh-Wen - - Supervisor Yu, Tien-Jung - -
SHANTOU BUYNOW MALL CO., LTD. Chairman Hsu, Kun-Tai - - Director Tsai, Ming-Hsien - - Director Huang, Kun-Tai - - Supervisor Yu, Tien-Jung - -
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Enterprise Name Title Name or
Representative
Number of Shares Held Shares Held
Shares Held %
SUZHOU BUYNOW DEPARTMENT STORE CO., LTD. Executive Director
Chen, Hsueh-Wen - -
Supervisor Yu, Tien-Jung - -
XIAMEN LEJING INTERNET BAR CO., LTD. Executive Director
Chen, Hsueh-Wen - -
Supervisor Li,Wen-Hua - -
SHANGHAI HUIZHUAN RESTAURANT MANAGEMENT CO., LTD.
Executive Director
Kao,Wei-Lun - -
Supervisor Chen,Ssu-Kai - -
SHANGHAI HUIHEI ADVERTISMENT CO., LTD. Executive Director
Chen, Hsueh-Wen - -
Supervisor Chen,Ssu-Kai - -
LUNARIA INVESTMENT GK Legal Representative Sannhinn Kisenn - -
CLEVO JAPAN GK Legal Representative
Huang, Wen-Bin - -
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(6) Subsidiary company’s business operating status, financial status, and business operationsUnit: NT$ Thousands (Except EPS);As of 12/31/2018
Company Authorized
Capital Total Assets
Total Liabilities
Total Stockholders'
Equity
Sales Revenue
Operating Income
Income after Tax
EPS after Tax
KAPOK COMPUTER CO., LTD. 80,000 570,639 222 570,417 0 (103) 14,279 1.78
CLEVO INVESTMENT CO., LTD. 140,000 375,056 116 374,940 0 (104) 6,814 0.49
KAPOK COMPUTER (SAMOA) CORPORATION 232,643 1,774,281 727,022 1,047,259 955,192 (3,018) (203,174) (29.02)
KAPOK COMPUTER (KUNSHAN) CO., LTD. 238,599 8,207,868 6,988,642 1,219,226 10,857,727 160,034 (175,679) (3.54)
CLEVO (CAYMAN ISLANDS) HOLDING COMPANY 11,329,649 48,778,027 4,461,561 44,316,466 0 (13,477) 1,691,900 7.67
BUYNOW (ANSHAN) CORPORATION 1,119,393 1,244,161 0 1,244,161 0 0 (2,664) (0.07)
BUYNOW (BEIJING) CORPORATION 244,256 1,701,741 0 1,701,741 0 0 65,837 10.97
BUYNOW (CHANGCHUN) CORPORATION 64,064 2,857,581 0 2,857,581 0 0 109,389 54.69
BUYNOW (CHENGDU) CORPORATION 278,468 3,514,525 0 3,514,525 0 0 83,968 12.00
BUYNOW (CHONGQING) LIMITED 169,140 1,094,930 0 1,094,930 0 0 8,462 1.69
BUYNOW (DAQING) CORPORATION 96,894 0 44,592 (44,592) 0 0 8,321 2.77
BUYNOW (DEZHOU) CORPORATION 881,914 762,415 0 762,415 0 0 (161,906) (5.40)
BUYNOW (GUANGZHOU) CORPORATION 161,745 2,573,813 170,406 2,403,408 0 0 47,291 9.46
BUYNOW (GUIYANG) CORPORATION 301,236 269,436 0 269,436 0 0 (319) (0.03)
BUYNOW (HANGZHOU) CORPORATION 173,107 3,205,507 0 3,205,507 0 0 338,138 67.63
BUYNOW (HARBIN) CORPORATION 99,012 288,644 100,047 188,597 0 0 (135,096) (45.03)
BUYNOW (HUIZHOU) CORPORATION 200,737 0 60,529 (60,529) 0 0 (2,446) (1.63)
BUYNOW (LUOYANG) CORPORATION 894,346 535,328 0 535,328 0 0 (18,896) (0.63)
BUYNOW (NANCHANG) CORPORATION 104,484 2,031,979 0 2,031,979 0 0 720,965 240.32
BUYNOW GROUP (QINGDAO) CORPORATION 115,648 117,432 0 117,432 0 0 3,117 0.89
BUYNOW (TAIZHOU) CORPORATION 505,786 532,312 210,034 322,278 0 0 (22,517) (1.32)
BUYNOW (WUXI) CORPORATION 64,054 1,216,613 0 1,216,613 0 0 41,214 20.61
BUYNOW (XIAMEN) CORPORATION 95,502 1,869,588 0 1,869,588 0 0 41,295 13.77
BUYNOW (YANCHENG) CORPORATION 931,920 790,691 30,782 759,909 0 0 6 0.00
BUYNOW (YINGKOU) CORPORATION 434,082 427,164 0 427,164 0 0 (383) (0.03)
BUYNOW (ZHENGZHOU) CORPORATION 103,185 3,175,913 0 3,175,913 0 0 67,704 22.57
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Company Authorized
Capital Total Assets
Total Liabilities
Total Stockholders'
Equity
Sales Revenue
Operating Income
Income after Tax
EPS after Tax
BUYNOW (ZIBO) CORPORATION 95,805 0 96,103 (96,103) 0 0 (19,958) (6.65)
BUYNOW GLOBAL CORPORATION 118,490 848,998 0 848,998 0 0 42,675 11.85
BUYNOW GROUP (CHANGSHA) CORPORATION 136,180 226,436 0 226,436 0 0 5,267 1.32
BUYNOW GROUP (XIAN) CORPORATION 96,543 766,928 0 766,928 0 0 32,784 10.93
BUYNOW ON-LINE HOLDING CORPORATION 35,513 0 7,597 (7,597) 0 0 (4,426) (4.02)
BUYNOW ON-LINE LIMITED 35,483 0 7,597 (7,597) 0 (41) (4,426) (4.02)
BUYNOW SZ. CORPORATION 452,081 974,878 0 974,878 0 0 12,119 0.81
BUYNOW (FUJIAN QUANZHOU) CORPORATION 446,195 471,923 0 471,923 0 0 (2,205) (0.15)
BUYNOW (JINZHOU) CORPORATION 448,081 422,905 0 422,905 0 0 (9,956) (0.66)
BUYNOW (SHANTOU) CORPORATION 578,224 930,960 0 930,960 0 0 (78,561) (4.09)
CLEVO (HK) INVESTMENT HOLDING LIMITED 3,138 3,647 355 3,293 0 (119) (3) (0.03)
CLEVO COMPUTER SINGAPORE PTE LTD. 529,638 7,769,020 166 7,768,853 0 (223) 124,875 4.53
CLEVO JAPAN GK 2,817 3,991 352 3,639 6,140 165 124 0.01
FLYING INTERNATIONAL INVESTMENT LIMITED 178,968 2,374,832 0 2,374,832 0 0 (42,517) (14.17)
FLYING WOLF INVESTMENT LIMITED 96,141 3,079,924 0 3,079,924 0 0 (4) 0.00
LUNARIA INVESTMENT GK 11,897 3,420,183 1,708,459 1,711,724 159,250 111,074 144,039
SKILL DEVELOP INTERNATIONAL LIMITED 581,916 5,142,994 0 5,142,994 0 0 139,037 14.87
SMARTER CAPITAL LIMITED 1,013,693 974,878 0 974,878 0 0 12,119 0.81
WELL ASIA INVESTMENT LIMITED 277,817 5,143,046 52 5,142,994 0 (155) 139,037 15.11
SHANGHAI BUYNOW ONLINE INFORMATION TECHNOLOGY CO., LTD. 32,630 3,127 12,013 (8,885) 21,558 (4,010) (4,507) (0.66)
SHANGHAI BUYNOW ELECTRONIC INFORMATION CO., LTD. 521,418 4,968,709 2,045,032 2,923,677 0 (612) 59,012 0.55
SHANGHAI BUYNOW ELECTRONIC PRODUCTS MARKET MANAGEMENT CO., LTD. 504,484 6,779,030 2,136,453 4,642,577 300,983 129,302 74,618 0.71
SHANGHAI HUIHEI ADVERTISMENT CO., LTD. 4,850 13,389 7,914 5,474 64,519 826 639 0.64
SHANGHAI HUIZHUAN RESTAURANT MANAGEMENT CO., LTD. 22,884 7,208 20,577 (13,370) 21,496 (6,488) (8,117) (1.62)
DAQING BUYNOW ELECTRONIC INFORMATION CO., LTD. 98,158 787,795 835,916 (48,120) 96,047 51,286 8,321 0.41
TIANJIN BUYNOW ELECTRONIC INFORMATION CO., LTD. 224,794 3,213,833 842,255 2,371,577 76,862 (2,350) (48,691) (1.04)
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Company Authorized
Capital Total Assets
Total Liabilities
Total Stockholders'
Equity
Sales Revenue
Operating Income
Income after Tax
EPS after Tax
BEIJING KAIYE ELECTRONIC TECHNOLOGY CO., LTD. 231,961 134,161 441,730 (307,569) 212,932 (10,191) 1,274 0.03
BEIJING CLEVO INVESTMENT MANAGEMENT CONSULTANT CO.,LTD. 305,459 3,746,778 1,507,645 2,239,134 141,219 112,609 74,615 1.15
SHANTOU BUYNOW MALL CO., LTD. 574,562 7,646,702 6,715,742 930,960 2,599 (85,978) (78,561) (0.67) CLEVO (CHINA) INVESTMENT CO., LTD. 897,135 2,870,537 305,030 2,565,508 214,490 (93,135) (44,879) (0.24) BUYNOW (XIAN) INDUSTRY CO., LTD. 116,528 2,381,331 1,614,403 766,928 155,178 69,780 32,784 1.35
BUYNOW (CHANGCHUN) INDUSTRY CO., LTD. 81,539 3,784,442 784,042 3,000,400 213,477 134,219 114,856 6.77 BUYNOW (NANJING) FACILITY LEASING AND MANAGEMENT CO., LTD. 58,159 2,403,632 441,721 1,961,912 68,647 31,290 (15,168) (1.25)
BUYNOW (NANCHANG) INDUSTRY CO., LTD. 119,297 4,100,802 2,068,823 2,031,979 146,422 124,578 720,965 29.04
BUYNOW (HARBIN) INDUSTRY CO., LTD. 111,364 2,212,107 2,026,652 185,455 22,266 (42,853) (135,421) (5.84) BUYNOW (CHONGQING) INDUSTRY CO., LTD. 164,167 2,026,605 931,677 1,094,928 98,576 32,420 8,462 0.25 BUYNOW ELECTRONIC INFORMATION (HUIZHOU) CO., LTD 120,115 543,816 690,164 (146,348) 36,783 29,972 (6,116) (0.24)
BUYNOW (WUXI) ELECTRONIC TECHNOLOGY DEVELOPMENT CO., LTD. 106,622 2,480,784 777,559 1,703,224 150,101 84,394 57,698 2.60
BUYNOW (FUJIAN) ELECTRONIC TECHNOLOGY DEVELOPMENT CO., LTD. 119,117 3,131,453 1,261,864 1,869,588 130,557 64,826 41,295 1.67
BUYNOW (JINZHOU) INDUSTRY CO., LTD. 448,342 2,083,820 1,660,915 422,905 8 (9,884) (9,956) (0.11) BUYNOW (YANCHENG) ELECTRONOC INFORMATION TECHNOLOGY DEVELOPMENT CO. LTD. 942,511 759,909 0 759,909 0 (0) 5 0.00
BUYNOW (CHENGDU) ELECTRONIC INFORMATION CO., LTD. 278,468 4,673,974 1,159,449 3,514,525 142,871 72,243 83,968 1.45
BUYNOW ELECTRONIC INFORMATION (HANGZHOU) CO., LTD 198,848 5,399,958 2,194,452 3,205,507 259,076 161,894 338,138 8.17
BUYNOW (ZHENGZHOU) ELECTRONIC INFORMATION CO., LTD. 119,123 3,955,115 779,202 3,175,913 202,378 85,331 67,704 2.73
BUYNOW ELECTRONIC INFORMATION (SHENYANG) CO., LTD. 119,298 3,034,530 588,769 2,445,761 114,349 36,126 (21,886) (0.88)
KUNSHAN KAIMING TRADING CO., LTD. 17,746 3,204 1,944 1,261 5,438 (2,649) (2,615) (0.75) KUNSHAN KAISHUO TRADING CO., LTD. 30,198 222,015 193,635 28,381 22,902 (51) 111 0.02 CHANGSHA HUNGYU BUSINESS MANAGEMENT CO., LTD. 119,297 893,711 667,275 226,436 32,180 26,019 5,267 0.21
QINGDAO BUYNOW TECHNOLOGY INDUSTRY CO., LTD. 551,402 2,482,068 1,911,732 570,336 160,011 90,699 15,139 0.13
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Company Authorized
Capital Total Assets
Total Liabilities
Total Stockholders'
Equity
Sales Revenue
Operating Income
Income after Tax
EPS after Tax
QUANZHOU BUYNOW INDUSTRY CO., LTD. 446,195 1,017,687 545,764 471,923 92,964 35,891 (2,205) (0.02) LUOYANG BUYNOW ELECTRONIC INFORMATION CO., LTD. 893,922 2,224,377 1,707,902 516,475 387,118 3,680 (18,896) (0.10)
TAIZHOU BUYNOW ELECTRONIC INFORMATION CO., LTD. 507,871 1,090,882 767,940 322,943 53,460 22,017 (22,062) (0.21)
ZIBO BUYNOW ELECTRONIC INFORMATION CO., LTD. 98,012 768,287 859,845 (91,558) 49,229 18,962 (19,958) (0.98) KALOR BUYNOW (HEIFEI) ELECTRONIC INFORMATION CO., LTD. 69,491 2,624,346 506,543 2,117,803 132,646 73,505 50,639 3.50
WUXI BUYNOW ELECTRONIC MARKET CO., LTD. 2,454 2,397 1 2,397 0 0 19 0.04
WUXI QUNTAI PROPERTY MANAGEMENT CO., LTD. 2,402 24,351 4,681 19,670 29,524 3,515 3,036 5.02 GUIYANG BUYNOW ELECTRONIC INFORMATION CO., LTD. 303,271 1,933,254 1,663,819 269,435 0 (818) (319) (0.01)
XIAMEN LEJING INTERNET BAR CO., LTD. 465 341 4,156 (3,815) 3,158 (493) (525) (5.25) QUALITY TRUST PROPERTY MANAGEMENT CO., LTD. 22,573 374,221 187,560 186,661 280,897 15,186 21,270 3.61 BUYNOW (GUANGZHOU) ELECTRONIC INFORMATION CO., LTD. 198,670 2,783,293 384,059 2,399,233 799 155 46,573 1.13
GUANGDONG BUYNOW REAL ESTATE MANAGEMENT CO., LTD. 442,167 11,376,814 3,290,988 8,085,826 474,983 295,633 214,084 2.33
DEZHOU BUYNOW ELECTRONIC INFORMATION CO., LTD. 881,914 4,486,398 3,723,983 762,415 503,139 (191,854) (161,906) (0.86) ANSHAN BUYNOW ELECTRONIC INFORMATION CO., LTD. 1,150,017 3,895,172 2,651,012 1,244,161 0 (2,664) (2,664) (0.01)
YINGKOU BUYNOW ELECTRONIC INFORMATION CO., LTD. 464,194 796,790 369,627 427,163 0 (383) (383) 0.00
SUZHOU BUYNOW DEPARTMENT STORE CO., LTD. 519 169 0 169 0 (228) 1,615 16.15
SUZHOU JINZUO INDUSTRY CO., LTD. 480,460 1,929,506 954,628 974,878 81,685 61,570 12,119 0.12
Note 1: If an affiliate is a foreign company, the relevant figures are converted into NTD at the exchange rate prevailing on the balance sheet date. Foreign currency to NTD exchange rate is as follows:
USD SGD RMB JPY2018.12.31 Exchange rate 29.782 22.460 4.4851 0.2777
2. Private placement of securities in the most recent year and up to the date of publication of the annual report: None.
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3. The Shares in the Company held or disposed by subsidiaries in the most recent year and up to the date of publication of the annual report:Unit: NT$ thousand; number of shares; %
Name of subsidiaries (Note 1)
Paid-in capital
Source of funds
% of shareholding
by the Company
Date for acquisition or disposal of
Number of shares and
amount acquired (Note 3)
Number of shares and
amount disposed of
(Note 3)
Profits or losses from investment
Up to the date of publication of the annual report
Pledges made
The amount of
endorsements and
guarantees made for
subsidiaries by the
Company
Amount of funds lent to subsidiaries by the
Company Number of shares held
Amount held (Note 3)
CLEVO Investment Co., Ltd.
140,000 Self-owned
funds 100%
2018 0 0 0 10,080,669 108,182
None (Note
4) None None
From the year up to the date of publication
of the annual report
0 0 0 10,080,669 108,182
Kapok Computer Co., Ltd. 80,000
Self-owned funds
100%
2018 0 0 0 16,966,596 95,306
None (Note
4) None None
From the year up to the date of publication
of the annual report
0 0 0 16,966,596 95,306
Note 1: Please list separately for subsidiaries. Note 2: The amount stated is the amount actually acquired or disposed of. No shares and amounts were acquired or disposed of in the year of 2018. Note 3: The information on holding and disposal should be separately listed, and the amount held is the originally acquired cost. Note 4: Impact on the Company's financial performance and financial conditions: None.
4. Other supplementary matters: none
IX. Matters that have significantly affected shareholders’ equity or prices for securities pursuantto Item 2, Subparagraph 3, Article 36 of the Securities & Exchange Act in the most recentyear and up to the date of publication of the annual report: None.
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REPORT OF INDEPENDENT ACCOUNTANTS
TRANSLATED FROM CHINESE
To the Board of Directors and Shareholders of Clevo Co.
PWCR 18004683
Opinion
We have audited the accompanying consolidated balance sheets of Clevo Co. and its subsidiaries
(the “Group”) as at December 31, 2018 and 2017, and the related consolidated statements of
comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the
consolidated financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying consolidated financial statements present fairly, in all material
respects, the consolidated financial position of the Group as at December 31, 2018 and 2017, and its
consolidated financial performance and its consolidated cash flows for the years then ended in
accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”
and the International Financial Reporting Standards, International Accounting Standards, IFRIC
Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission.
Basis for opinion
We conducted our audits in accordance with the “Regulations Governing Auditing and Attestation
of Financial Statements by Certified Public Accountants” and generally accepted auditing standards in
the Republic of China (ROC GAAS). Our responsibilities under those standards are further described in
the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our
report. We are independent of the Group in accordance with the Code of Professional Ethics for Certified
Public Accountants in the Republic of China (the “Code”), and we have fulfilled our other ethical
responsibilities in accordance with the Code. 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 of the year 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, we do not provide a separate opinion on these matters.
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Key audit matters for the Group’s consolidated financial statements for the year ended December
31, 2018 were as follows:
Valuation of investment properties
Description
Refer to Note 4(17) for accounting policies on investment properties, Note 5(2) for uncertainty of
accounting estimates and assumptions in relation to the fair value measurement of investment properties,
and Note 6(8) for details of investment properties. As at December 31, 2018, the Group’s investment
properties at fair value amounted to NT$65,426,212 thousand.
The Group measures investment properties with fair value model. The fair value measurement is
based on income approach and the discounted cash flow by using estimated future rental income less
essential costs, and obtaining the valuation report by appraiser as valuation basis in accordance with the
“Regulations Governing the Preparation of Financial Reports by Securities Issuers”
The discount rate and future rental income used as the basis of fair value measurement mentioned
above involves future prediction, and the estimated result has a significant impact on fair value
measurement. Therefore, we consider the valuation of investment properties as a key audit matter.
How our audit addressed the matter
We performed the following audit procedures in respect of the above key audit matter:
1. Examined the analysis period and assumption methods used in the valuation report by the
independent appraisers in accordance with the “Regulations Governing the Preparation of
Financial Reports by Securities Issuers.”
2. Evaluated the reasonableness of rental earnings related to individual investment property, current
market rents for similar comparable properties, rental growth rate and industry forecast reports.
3. Evaluated the reasonableness of discount rate used in valuation and capital costs caused by local
property environment.
Existence of booth rental revenue
Description
Refer to Note 4(33) for accounting policies on revenue recognition and Note 6(21) for details of
operating revenue. As at December 31, 2018, the Group’s rental revenue amounted to NT$3,720,007
thousand.
One of the operating revenue in the Group is to earn booth rental income by holding investment
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properties. After customers sign the contracts, the Group allocates and recognises booth rental revenue
based on the period of realisation of agreements.
The customers of booth rental revenue are merchants in the location of investment property, the
customers are numerous and most contract periods are from 6 months to one year. The main customers
are primarily engaged in the sales of 3C products and food service. In recent years, the growth of e-
commerce in China has made an impact on the sales of bricks-and-mortar stores. Therefore, there is
higher uncertainty of existence of rental revenue. We consider the existence of booth rental revenue as a
key audit matter.
How our audit addressed the matter
We performed the following audit procedures in respect of the above key audit matter:
1. Ensured the reasonableness by validating and testing the appropriateness of internal controls over
booth rental revenue, including inspecting the lease contracts and related supporting documents.
2. Verified existence of merchants by performing physical count of the booths.
3. Obtained the listings of booth rental revenue and confirmed the existence of booth rental revenue
by sampling and inspecting the lease contracts and physical inventory lists.
Valuation of inventories
Description
Refer to Note 4(13) for accounting policy on the evaluation of inventories, Note 5(2) for uncertainty
of accounting estimations and assumptions in relation to inventory valuation, and Note 6(4) for the
details of inventory valuation. As at December 31, 2018, the balance of inventory and allowance for
inventory valuation losses amounted to NT$7,983,465 thousand and NT$89,434 thousand, respectively.
The Group is primarily engaged in manufacturing and sales of notebook computers, construction
in progress and buildings and land held for sale. Due to rapid technological innovations, short lifespan
of electronic products and fluctuations in market prices, there is a higher risk of inventory losses due
from market value decline or obsolescence. Additionally, most of construction in progress and buildings
and land held for sale are located in second-tier or third-tier cities. The property cycle is mostly
influenced by local policy and economic situation. Due to long inventory holding period, there is a higher
risk for inventory losses due from market value decline.
The Group recognises inventories at the lower of cost and net realisable value, and the net realisable
value is estimated based on the age and the damage of inventory. The allowance for inventory valuation
losses is provided for those inventories aged over a certain period of time and individually identified as
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obsolete or damaged. As the amounts of inventories are material, the types of inventories vary, and the
estimation of net realisable value is subject to management’s judgment, we consider the allowance for
inventory valuation losses as a key audit matter.
How our audit addressed the matter
We performed the following procedures in respect of the above key audit matter:
4. Ensured consistent application of accounting policies in relation to allowance for inventory
valuation losses and assessed the reasonableness of these policies.
5. Obtained the listings of lower of cost or net realisable value and obsolescence losses amount,
sampled and inspected related supporting documents. Calculated the accuracy and assessed the
reasonableness of the estimation of net realisable value.
6. Verified information obtained from physical inventory of notebook computers, and inquired
management and relevant staff if the inventory is identified as slow-moving, surplus, obsolete or
damaged.
Other matter – Parent company only financial reports
We have audited and expressed an unqualified opinion on the parent company only financial
statements of Clevo Co. as at and for the years ended December 31, 2018 and 2017.
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 the International Financial Reporting Standards, International Accounting
Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory
Commission, 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
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Group’s financial reporting process.
Auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial
statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not
a guarantee that an audit conducted in accordance with ROC GAAS 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 ROC GAAS, we exercise professional judgment and
maintain professional skepticism throughout the audit. We also:
7. 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.
8. 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.
9. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
10. 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
auditor’s report to the related disclosures in the consolidated financial statements or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions
may cause the Group to cease to continue as a going concern.
11. Evaluate the overall presentation, structure and content of the consolidated financial statements,
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including the disclosures, and whether the consolidated financial statements represent the
underlying transactions and events in a manner that achieves fair presentation.
12. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the group audit.
We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the consolidated financial statements of the current period and
are therefore the key audit matters. We describe these matters in our auditor’s report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse consequences of
doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Feng, Min-Juan Wu, Han-Chi
For and on behalf of PricewaterhouseCoopers, Taiwan
March 27, 2019
---------------------------------------------------------------------------------------------------------------------------- The accompanying consolidated financial statements are not intended to present the financial position and results of
operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other
than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such
financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of
China. Accordingly, the accompanying consolidated financial statements and report of independent accountants are not
intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in
the Republic of China, and their applications in practice.
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December 31, 2018 December 31, 2017
Assets Notes AMOUNT % AMOUNT %
Current assets
1100 Cash and cash equivalents 6(1) $ 7,796,543 7 $ 7,522,579 7
1110 Financial assets at fair value
through profit or loss - current
6(2) and 12(4)
1,322,990 1 1,000,504 1
1125 Available-for-sale financial assets
- current
12(4)
- - 400,754 -
1136 Financial assets at amortised cost
- current
6(1)
4,749,768 4 - -
1150 Notes receivable, net 6(3) - - 1,127 -
1170 Accounts receivable, net 6(3) 1,623,861 2 1,911,346 2
1180 Accounts receivable - related
parties
6(3) and 7
3,166 - 1,813 -
1220 Current income tax assets 9,984 - 6,009 -
130X Inventories 6(4) and 8 7,896,031 7 7,495,871 7
1410 Prepayments 674,364 1 463,898 -
1470 Other current assets 6(1)(5), 7 and 8 1,514,472 1 4,017,078 3
11XX Total current assets 25,591,179 23 22,820,979 20
Non-current assets
1535 Financial assets at amortised cost
- non-current
6(1)
115,850 - - -
1550 Investments accounted for the
equity method
6(6)
2,518,217 2 2,561,215 2
1600 Property, plant and equipment 6(7) and 8 9,970,165 9 8,474,857 8
1760 Investment property, net 6(8) and 8 65,426,212 58 69,922,175 62
1780 Intangible assets 6(9) 21,311 - 31,042 -
1840 Deferred income tax assets 6(27) 214,011 - 207,609 -
1920 Refundable deposits 113,106 - 116,554 -
1985 Long-term prepaid rents 6(10) and 8 6,675,527 6 6,822,488 6
1990 Other non-current assets 8 1,814,279 2 1,510,319 2
15XX Total non-current assets 86,868,678 77 89,646,259 80
1XXX Total assets $ 112,459,857 100 $ 112,467,238 100
(Continued)
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December 31, 2018 December 31, 2017
Liabilities and Equity Notes AMOUNT % AMOUNT %
Current liabilities
2100 Short-term borrowings 6(11) $ 8,426,966 8 $ 6,221,472 5
2130 Contract liabilities, current 6(21) 3,146,037 3 - -
2150 Notes payable 15,135 - 15,236 -
2170 Accounts payable 1,590,415 1 1,852,899 2
2180 Accounts payable - related parties 7 262,229 - 269,209 -
2200 Other payables 2,008,965 2 2,303,738 2
2230 Current income tax liabilities 6(27) 170,192 - 83,953 -
2250 Provisions 6(16) 50,523 - 50,523 -
2320 Long-term liabilities, current
portion
6(14)
2,747,011 2 7,352,876 7
2399 Other current liabilities 6(12) and 7 646,170 1 3,744,259 3
21XX Total current liabilities 19,063,643 17 21,894,165 19
Non-current liabilities
2530 Corporate bonds payable 6(13) 5,000,000 5 5,000,000 4
2540 Long-term borrowings 6(14) 31,837,471 28 28,052,753 25
2570 Deferred income tax liabilities 6(27) 12,380,424 11 12,444,243 11
2670 Other non-current liabilities 6(6)(15) and 7 2,321,189 2 2,776,042 3
25XX Total non-current liabilities 51,539,084 46 48,273,038 43
2XXX Total liabilities 70,602,727 63 70,167,203 62
Equity attributable to owners of
parent
Share capital 6(17)
3110 Common stock 6,797,630 6 6,831,630 6
Capital surplus 6(18)
3200 Capital surplus 982,539 1 1,581,974 1
Retained earnings 6(19)
3310 Legal reserve 1,578,852 1 1,507,074 2
3320 Special reserve 34,937,216 31 33,929,051 30
3350 Unappropriated retained earnings 1,547,516 1 1,079,944 1
Other equity interest
3400 Other equity interest 6(20) ( 2,720,683 ) ( 2 ) ( 2,020,190 ) ( 2 )3500 Treasury stocks 6(17) ( 1,283,228 ) ( 1 ) ( 625,346 ) -
31XX Equity attributable to owners
of the parent 41,839,842 37 42,284,137 38
36XX Non-controlling interest 17,288 - 15,898 -
3XXX Total equity 41,857,130 37 42,300,035 38
Significant contingent liabilities
and unrecognised contract
commitments
9
Significant events after the
balance sheet date
11
3X2X Total liabilities and equity $ 112,459,857 100 $ 112,467,238 100
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Years ended December 31,
2018 2017
Items Notes AMOUNT % AMOUNT %
4000 Operating revenue 6(21) and 7 $ 19,796,072 100 $ 20,876,980 100
5000 Operating costs 6(4)(25)(26) and 7 ( 14,515,709 ) ( 73 ) ( 16,098,384 ) ( 77 )
5900 Net operating margin 5,280,363 27 4,778,596 23
Operating expenses 6(25)(26)
6100 Selling expenses ( 1,365,770 ) ( 7 ) ( 1,332,439 ) ( 6 )
6200 General and administrative
expenses ( 1,901,144 ) ( 9 ) ( 2,237,922 ) ( 11 )
6300 Research and development
expenses ( 528,608 ) ( 3 ) ( 520,312 ) ( 3 )
6450 Expected credit losses 12(2) ( 17,992 ) - - -
6000 Total operating expenses ( 3,813,514 ) ( 19 ) ( 4,090,673 ) ( 20 )
6900 Operating profit 1,466,849 8 687,923 3
Non-operating income and
expenses
7010 Other income 6(22) 616,195 3 620,998 3
7020 Other gains and losses 6(23) and 7 1,174,967 6 748,491 4
7050 Finance costs 6(24) and 7 ( 878,327 ) ( 4 ) ( 1,035,543 ) ( 5 )
7060 Share of (loss) profit of
associates and joint ventures
accounted for under equity
method
6(6)
( 24,009 ) - 481,087 2
7000 Total non-operating income
and expenses 888,826 5 815,033 4
7900 Profit before income tax 2,355,675 13 1,502,956 7
7950 Income tax expense 6(27) ( 899,316 ) ( 5 ) ( 782,298 ) ( 4 )
8200 Profit for the year $ 1,456,359 8 $ 720,658 3
(Continued)
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Years ended December 31,
2018 2017
Items Notes AMOUNT % AMOUNT %
Other comprehensive income
Components of other
comprehensive income that will
not be reclassified to profit or
loss
8311 Loss on remeasurements on
defined benefit plans
6(15)
( $ 6,585 ) - ( $ 4,946 ) -
8312 Gain on revaluation 6(20) - - 25,207 -
8349 Income tax related to
components of other
comprehensive income that will
not be reclassified to profit or
loss
6(27)
1,317 - ( 3,444 ) -
8310 Other comprehensive (loss)
income that will not be
reclassified to profit or loss ( 5,268 ) - 16,817 -
Components of other
comprehensive income that will
be reclassified to profit or loss
8361 Financial statements translation
differences of foreign operations
6(20)
( 544,392 ) ( 3 ) ( 1,323,231 ) ( 6 )
8362 Unrealized loss on valuation of
available-for-sale financial
assets
6(20) and 12(4)
- - ( 59,978 ) -
8370 Share of other comprehensive
(loss) income of associates and
joint ventures accounted for
under equity method
6(20)
( 49,680 ) - 112,960 -
8399 Income tax related to the
components of other
comprehensive income
6(27)
( 7,663 ) - ( 12,156 ) -
8360 Other comprehensive loss
that will be reclassified to
profit or loss ( 601,735 ) ( 3 ) ( 1,282,405 ) ( 6 )
8300 Total other comprehensive loss
for the year ( $ 607,003 ) ( 3 ) ( $ 1,265,588 ) ( 6 )
8500 Total comprehensive income
(loss) for the year $ 849,356 5 ( $ 544,930 ) ( 3 )
Net income attributable to:
8610 Owners of the parent $ 1,454,904 8 $ 717,784 3
8620 Non-controlling interest $ 1,455 - $ 2,874 -
Comprehensive income (loss)
attributable to:
8710 Owners of the parent $ 847,022 5 ( $ 547,452 ) ( 3 )
8720 Non-controlling interest $ 2,334 - $ 2,522 -
Earnings per share 6(28)
9750 Basic earnings per share $ 2.32 $ 1.12
9850 Diluted earnings per share $ 2.30 $ 1.11
-157-
Year ended December 31, 2017
Balance at January 1, 2017 $ 6,831,630 $ 1,379,498 $ 183,164 $ 1,447,592 $ 33,727,355 $ 1,105,657 ( $ 916,916 ) $ 157,857 $ - ( $ 625,346 ) $ 43,290,491 $ 14,355 $ 43,304,846 Profit for the year - - - - - 717,784 - - - - 717,784 2,874 720,658
Other comprehensive income (loss) for the year 6(20) - - - - - ( 4,105 ) ( 1,222,075 ) ( 59,978 ) 20,922 - ( 1,265,236 ) ( 352 ) ( 1,265,588 ) Total comprehensive income (loss) for the year - - - - - 713,679 ( 1,222,075 ) ( 59,978 ) 20,922 - ( 547,452 ) 2,522 ( 544,930 ) Appropriations of 2016 earnings 6(19)
Legal reserve - - - 59,482 - ( 59,482 ) - - - - - - - Special reserve - - - - 201,696 ( 201,696 ) - - - - - - - Cash dividends - - - - - ( 478,214 ) - - - - ( 478,214 ) - ( 478,214 ) Adjustment to capital surplus arising from
dividends paid to subsidiaries - - 19,312 - - - - - - - 19,312 - 19,312
Changes in ownership interests in subsidiaries - - - - - - - - - - - ( 979 ) ( 979 ) Balance at December 31, 2017 $ 6,831,630 $ 1,379,498 $ 202,476 $ 1,507,074 $ 33,929,051 $ 1,079,944 ( $ 2,138,991 ) $ 97,879 $ 20,922 ( $ 625,346 ) $ 42,284,137 $ 15,898 $ 42,300,035Year ended December 31, 2018
Balance at January 1, 2018 $ 6,831,630 $ 1,379,498 $ 202,476 $ 1,507,074 $ 33,929,051 $ 1,079,944 ( $ 2,138,991 ) $ 97,879 $ 20,922 ( $ 625,346 ) $ 42,284,137 $ 15,898 $ 42,300,035 Effects of retrospective application and
retrospective restatement3(1) and 12(4) - - - - - 97,879 - ( 97,879 ) - - - - -
Balance at January 1, 2018 after adjustments 6,831,630 1,379,498 202,476 1,507,074 33,929,051 1,177,823 ( 2,138,991 ) - 20,922 ( 625,346 ) 42,284,137 15,898 42,300,035
Profit for the year - - - - - 1,454,904 - - - - 1,454,904 1,455 1,456,359
Other comprehensive income (loss) for the year 6(20) - - - - - ( 5,268 ) ( 602,614 ) - - - ( 607,882 ) 879 ( 607,003 ) Total comprehensive income (loss) for the year - - - - - 1,449,636 ( 602,614 ) - - - 847,022 2,334 849,356
Appropriations of 2017 earnings 6(19)
Legal reserve - - - 71,778 - ( 71,778 ) - - - - - - - Special reserve - - - - 1,008,165 ( 1,008,165 ) - - - - - - - Cash dividends 6(19) - ( 546,530 ) - - - - - - - - ( 546,530 ) - ( 546,530 ) Treasury stock acquired 6(17) - - - - - - - - - ( 657,882 ) ( 657,882 ) - ( 657,882 ) Treasury stock canceled 6(17) ( 34,000 ) - ( 75,655 ) - - - - - - - ( 109,655 ) - ( 109,655 ) Adjustment to capital surplus arising from
dividends paid to subsidiaries - - 22,750 - - - - - - - 22,750 - 22,750
Changes in ownership interests in subsidiaries - - - - - - - - - - - ( 944 ) ( 944 ) Balance at December 31, 2018 $ 6,797,630 $ 832,968 $ 149,571 $ 1,578,852 $ 34,937,216 $ 1,547,516 ( $ 2,741,605 ) $ - $ 20,922 ( $ 1,283,228 ) $ 41,839,842 $ 17,288 $ 41,857,130
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CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax $ 2,355,675 $ 1,502,956 Adjustments Adjustments to reconcile profit(loss) Depreciation 6(7)(25) 154,122 169,655 Amortisation 6(9)(10)(25) 18,930 26,095 Provision for bad debts expense - 14,726 Expected credit loss 12(2) 17,992 - Loss on financial assets at fair value through
profit or loss 6(23)
405,608 ( 198,520 ) Interest expense 6(24) 878,327 1,035,543 Interest income 6(22) ( 130,921 ) ( 85,274 ) Dividend income 6(22) ( 33,114 ) ( 45,386 ) Share of loss (profit) of associates and joint
ventures accounted for under the equity method 6(6)
24,009 ( 481,087 ) Loss on disposal of property, plant and equipment 6(7)(23) 1,490 3,508 Gain on disposal of investments 6(23) ( 928,375 ) ( 114,666 ) Gain on adjustments of investment properties at
fair value 6(8)(23)
( 913,763 ) ( 682,125 ) Changes in operating assets and liabilities Changes in operating assets Financial assets at fair value through profit or loss ( 350,522 ) 283,759 Notes receivable, net 1,127 3,291 Accounts receivable 270,992 72,100 Inventories ( 289,080 ) 2,402,551 Capitalisation of interest (inventories) 6(4) ( 111,080 ) ( 163,911 ) Prepayments ( 210,596 ) 45,432 Other current assets 182,366 5,853 Changes in operating liabilities
Contract liabilities - current 52,018 - Notes payable - 1,134 Accounts payable ( 262,484 ) ( 540,146 )Accounts payable - related parties ( 6,980 ) ( 119,463 )Other payables ( 204,811 ) ( 31,936 )Provisions - 2,966 Other current liabilities 560 83,177 Other non-current liabilities ( 1,249 ) 19,847
Cash inflow generated from operations 920,241 3,210,079 Interest received 128,788 78,461 Dividends received 33,114 45,386 Interest paid ( 847,665 ) ( 1,015,242 ) Income taxes paid ( 285,814 ) ( 361,178 )
Net cash flows (used in) from operating
activities ( 51,336 ) 1,957,506
(Continued)
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CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from disposal of available-for-sale
financial assets
6(30)
$ - $ 461,615
Repayment of disposal of available-for-sale
financial assets
6(30)
44,115 -
Increase in financial assets at amortised cost -
current ( 1,465,783 ) -
Increase in financial assets at amortised cost - non-
current ( 22,574 ) -
Proceeds from disposal of subsidiaries 6(30) 994,893 -
Acquisition of property, plant and equipment 6(30) ( 938,533 ) ( 844,450 )
Proceeds from disposal of property, plant and
equipment 11,464 16,587
Decrease in refundable deposits paid 1,163 152,842
Acquisition of intangible assets 6(9) ( 2,158 ) ( 7,973 )
Acquisition of investment properties 6(30) ( 198,729 ) ( 188,739 )
Proceeds from disposal of investment properties 6(8) 3,864 3,818
Interest paid (capitalisation of interest) 6(8) ( 397,441 ) ( 312,216 )
Increase in other current assets - ( 49,176 )
Increase in other non-current assets ( 374,166 ) ( 160,260 )
Increase in long-term prepaid rent ( 12,881 ) -
Net cash flows used in investing activities ( 2,356,766 ) ( 927,952 )
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term borrowings 6(31) 72,058,041 50,216,018
Repayments of short-term borrowings 6(31) ( 69,856,355 ) ( 50,815,932 )
Proceeds from long-term borrowings 6(31) 52,017,987 23,458,421
Repayments of long-term borrowings 6(31) ( 50,267,748 ) ( 22,747,220 )
Increase in guarantee deposit 866,522 7,630
Increase in other financial liabilities - current 6,728 -
Payment of cash dividends 6(19) ( 546,530 ) ( 478,214 )
Decrease in other financial liabilities - non-current ( 585,947 ) 1,645,562
Acquisition of treasury stock 6(30) ( 750,079 ) -
Changes in non-controlling interests ( 944 ) ( 979 )
Net cash flows from financing activities 2,941,675 1,285,286
Effect of changes in exchange rates ( 259,609 ) ( 302,623 )
Net increase in cash and cash equivalents 273,964 2,012,217
Cash and cash equivalents at beginning of year 7,522,579 5,510,362
Cash and cash equivalents at end of year $ 7,796,543 $ 7,522,579
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CLEVO CO. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2018 AND 2017
(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)
1. HISTORY AND ORGANISATION
Clevo Co. (the “Company”) was incorporated as a company limited by shares under the provisions of
the Company Act of the Republic of China (R.O.C.). The Company and its subsidiaries (collectively
referred herein as the “Group”) are primarily engaged in the design, manufacture and sales of VDUs,
computers and peripheral devices, and the leasing business of Buynow.
2. THE DATE OF AUTHORISATION FOR ISSUANCE OF THE CONSOLIDATED FINANCIAL
STATEMENTS AND PROCEDURES FOR AUTHORISATION
These consolidated financial statements were authorised for issuance by the Board of Directors on March
27, 2019.
3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS
(1)Effect of the adoption of new issuances of or amendments to International Financial Reporting
Standards (“IFRS”) as endorsed by the Financial Supervisory Commission (“FSC”)
New standards, interpretations and amendments endorsed by FSC effective from 2018 are as follows:
Except for the following, the above standards and interpretations have no significant impact to the
Group’s financial condition and financial performance based on the Group’s assessment.
New Standards, Interpretations and Amendments
Effective date by
International
Accounting
Standards Board
Amendments to IFRS 2, ‘Classification and measurement of share-based
payment transactions’
January 1, 2018
Amendments to IFRS 4, ‘Applying IFRS 9, Financial instruments with IFRS
4, Insurance contracts’
January 1, 2018
IFRS 9, ‘Financial instruments’ January 1, 2018
IFRS 15, ‘Revenue from contracts with customers’ January 1, 2018
Amendments to IFRS 15, ‘Clarifications to IFRS 15, Revenue from contracts
with customers’
January 1, 2018
Amendments to IAS 7, ‘Disclosure initiative’ January 1, 2017
Amendments to IAS 12, ‘Recognition of deferred tax assets for unrealised January 1, 2017
Amendments to IAS 40, ‘Transfers of investment property’ January 1, 2018
IFRIC 22, ‘Foreign currency transactions and advance consideration’ January 1, 2018
Annual improvements to IFRSs 2014-2016 cycle - Amendments to IFRS 1,
‘First-time adoption of International Financial Reporting Standards’
January 1, 2018
Annual improvements to IFRSs 2014-2016 cycle - Amendments to IFRS 12,
‘Disclosure of interests in other entities’
January 1, 2017
Annual improvements to IFRSs 2014-2016 cycle - Amendments to IAS 28,
‘Investments in associates and joint ventures’
January 1, 2018
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A. IFRS 9, ‘Financial instruments’
(a) Classification of debt instruments is driven by the entity’s business model and the contractual
cash flow characteristics of the financial assets, which would be classified as financial asset at
fair value through profit or loss, financial asset measured at fair value through other
comprehensive income or financial asset at amortised cost. Equity instruments would be
classified as financial asset at fair value through profit or loss, unless an entity makes an
irrevocable election at inception to present subsequent changes in the fair value of an
investment in an equity instrument that is not held for trading in other comprehensive income.
(b) The impairment losses of debt instruments are assessed using an ‘expected credit loss’
approach. An entity assesses at each balance sheet date whether there has been a significant
increase in credit risk on that instrument since initial recognition to recognise 12-month
expected credit losses or lifetime expected credit losses (interest revenue would be calculated
on the gross carrying amount of the asset before impairment losses occurred); or if the
instrument has objective evidence of impairment, interest revenue after the impairment would
be calculated on the book value of net carrying amount (i.e. net of credit allowance). The
Company shall always measure the loss allowance at an amount equal to lifetime expected
credit losses for trade receivables that do not contain a significant financing component.
(c) The Group has elected not to restate prior period financial statements using the modified
retrospective approach under IFRS 9. For details of the significant effect as at January 1, 2018,
please refer to Notes 12(4)B and C.
B. IFRS 15, ‘Revenue from contracts with customers’ and amendments
(a) IFRS 15, ‘Revenue from contracts with customers’ replaces IAS 11, ‘Construction contracts’,
IAS 18, ‘Revenue’ and relevant interpretations. According to IFRS 15, revenue is recognised
when a customer obtains control of promised goods or services. A customer obtains control of
goods or services when a customer has the ability to direct the use of, and obtain substantially
all of the remaining benefits from, the asset.
The core principle of IFRS 15 is that an entity recognises revenue to depict the transfer of
promised goods or services to customers in an amount that reflects the consideration to which
the entity expects to be entitled in exchange for those goods or services. An entity recognises
revenue in accordance with that core principle by applying the following steps:
Step 1: Identify contracts with customer.
Step 2: Identify separate performance obligations in the contract(s).
Step 3: Determine the transaction price.
Step 4: Allocate the transaction price.
Step 5: Recognise revenue when the performance obligation is satisfied.
Further, IFRS 15 includes a set of comprehensive disclosure requirements that requires an
entity to disclose sufficient information to enable users of financial statements to understand
the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts
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with customers.
(b) The Group has elected not to restate prior period financial statements and recognised the
cumulative effect of initial application as retained earnings at January 1, 2018, using the
modified retrospective approach under IFRS 15. The significant effects of adopting the
modified transition as of January 1, 2018 are summarised below:
In line with IFRS 15 requirements, the Group changed the presentation of certain accounts in
the balance sheet as follows:
Under IFRS 15, liabilities in relation to computer products and real estate sales contracts are
recognised as contract liabilities, but were previously presented as advance sales receipts and
advance real estate receipts (shown as ‘other current liabilities’) in the balance sheet. As of
January 1, 2018, the balance amounted to $3,094,019.
C. Amendments to IAS 7, ‘Disclosure initiative’
This amendment requires that an entity shall provide more disclosures related to changes in
liabilities arising from financing activities, including both changes arising from cash flows and
non-cash changes.
The Group expects to provide additional disclosure to explain the changes in liabilities arising
from financing activities.
(2)Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by
the Group
New standards, interpretations and amendments endorsed by the FSC effective from 2018 are as
follows:
Except for the following, the above standards and interpretations have no significant impact to the
Group’s financial condition and financial performance based on the Group’s assessment.
IFRS 16, ‘Leases’
IFRS 16, ‘Leases’, replaces IAS 17, ‘Leases’ and related interpretations and SICs. The standard
requires lessees to recognise a 'right-of-use asset' and a lease liability (except for those leases with
terms of 12 months or less and leases of low-value assets). The accounting stays the same for lessors,
which is to classify their leases as either finance leases or operating leases and account for those two
New Standards, Interpretations and Amendments
Effective date by
International Accounting
Standards Board
Amendments to IFRS 9, ‘Prepayment features with negative
compensation’
January 1, 2019
IFRS 16, ‘Leases’ January 1, 2019
Amendments to IAS 19, ‘Plan amendment, curtailment or settlement’ January 1, 2019
Amendments to IAS 28, ‘Long-term interests in associates and joint
ventures’
January 1, 2019
IFRIC 23, ‘Uncertainty over income tax treatments’ January 1, 2019
Annual improvements to IFRSs 2015-2017 cycle January 1, 2019
-163-
types of leases differently. IFRS 16 only requires enhanced disclosures to be provided by lessors.
The Group expects to recognise the lease contract of lessees in line with IFRS 16. However, the Group
does not intend to restate the financial statements of prior period (referred herein as the “modified
retrospective approach”). On January 1, 2019, it is expected that ‘right-of-use asset’ and lease liability
will be increased by $7,009,111 and $333,584, respectively, and long-term prepaid rents will be
decreased by $6,675,527.
(3)IFRSs issued by IASB but not yet endorsed by the FSC
New standards, interpretations and amendments issued by IASB but not yet included in the IFRSs as
endorsed by the FSC are as follows:
Except for the following, the above standards and interpretations have no significant impact to the
Group’s financial condition and financial performance based on the Group’s assessment.
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies applied in the preparation of these consolidated financial statements
are set out below. These policies have been consistently applied to all the periods presented, unless
otherwise stated.
(1)Compliance statement
The consolidated financial statements of the Group have been prepared in accordance with the
“Regulations Governing the Preparation of Financial Reports by Securities Issuers”, International
Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC
Interpretations as endorsed by the FSC (collectively referred herein as the “IFRSs”).
(2)Basis of preparation
A. Except for the following items, the consolidated financial statements have been prepared under
the historical cost convention:
(a) Financial assets and financial liabilities (including derivative instruments) at fair value through
profit or loss.
(b) Financial assets and liabilities at fair value through other comprehensive income/Available-
for-sale financial assets measured at fair value.
(c) Investment property measured at fair value.
(d) Defined benefit liabilities recognised based on the net amount of pension fund assets less
New Standards, Interpretations and Amendments
Effective date by
International Accounting
Standards Board
Amendments to IAS 1 and IAS 8, ‘Disclosure Initiative-Definition of
Material’
January 1, 2020
Amendments to IFRS 3, ‘Definition of a business’ January 1, 2020
Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets
between an investor and its associate or joint venture’
To be determined by
International Accounting
Standards Board
IFRS 17, ‘Insurance contracts’ January 1, 2021
-164-
present value of defined benefit obligation.
B. The preparation of financial statements in conformity with IFRSs requires the use of certain
critical accounting estimates. It also requires management to exercise its judgement in the process
of applying the Group’s accounting policies. The areas involving a higher degree of judgement or
complexity, or areas where assumptions and estimates are significant to the consolidated financial
statements are disclosed in Note 5.
C. In adopting IFRS 9 and IFRS 15 effective January 1, 2018, the Group has elected to apply modified
retrospective approach whereby the cumulative impact of the adoption was recognised as retained
earnings or other equity as of January 1, 2018 and the financial statements for the year ended
December 31, 2017 were not restated. The financial statements for the year ended December 31,
2017 were prepared in compliance with International Accounting Standard 39 (‘IAS 39’),
International Accounting Standard 11 (‘IAS 11’), International Accounting Standard 18 (‘IAS 18’)
and related financial reporting interpretations. Please refer to Notes 12(4) and (5) for details of
significant accounting policies and details of significant accounts.
(3)Basis of consolidation
A. Basis for preparation of consolidated financial statements:
(a) All subsidiaries are included in the Group’s consolidated financial statements. Subsidiaries
are all entities (including structured entities) controlled by the Group. The Group controls an
entity when the Group is exposed, or has rights, to variable returns from its involvement with
the entity and has the ability to affect those returns through its power over the entity.
Consolidation of subsidiaries begins from the date the Group obtains control of the subsidiaries
and ceases when the Group loses control of the subsidiaries.
(b) Inter-company transactions, balances and unrealised gains or losses on transactions between
companies within the Group are eliminated. Accounting policies of subsidiaries have been
adjusted where necessary to ensure consistency with the policies adopted by the Group.
(c) Profit or loss and each component of other comprehensive income are attributed to the owners
of the parent and to the non-controlling interests. Total comprehensive income is attributed to
the owners of the parent and to the non-controlling interests even if this results in the non-
controlling interests having a deficit balance.
(d) Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing
control of the subsidiary (transactions with non-controlling interests) are accounted for as
equity transactions, i.e. transactions with owners in their capacity as owners. Any difference
between the amount by which the non-controlling interests are adjusted and the fair value of
the consideration paid or received is recognised directly in equity.
(e) When the Group loses control of a subsidiary, the Group remeasures any investment retained
in the former subsidiary at its fair value. That fair value is regarded as the fair value on initial
recognition of a financial asset or the cost on initial recognition of the associate or joint venture.
Any difference between fair value and carrying amount is recognised in profit or loss. All
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amounts previously recognised in other comprehensive income in relation to the subsidiary
are reclassified to profit or loss on the same basis as would be required if the related assets or
liabilities were disposed of. That is, when the Group loses control of a subsidiary, all gains or
losses previously recognised in other comprehensive income in relation to the subsidiary
should be reclassified from equity to profit or loss, if such gains or losses would be reclassified
to profit or loss when the related assets or liabilities are disposed of.
B. Subsidiaries included in the consolidated financial statements:
Name of
investor
Name of
subsidiary
Main business
activities
December
31, 2018
December
31, 2017 Description
The Company Clevo Computer
Singapore Pte Ltd.
Management and
advisory of
computers
100 100
The Company Clevo (Cayman
Islands) Holding
Company
Investing 100 100
The Company Kapok Computer
(Samoa)
Corporation
Investing 100 100
The Company Kapok Computer
Co., Ltd.
Design and sale of
computers and
computer
peripherals
100 100
The Company Clevo Inevestment
Co., Ltd.
Investing 100 100
The Company Buynow On-line
Holding
Corporation
Investing 100 100
The Company Lunaria Investment
GK
Building leasing 98.99 98.99
Ownership (%)
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Name of
investor
Name of
subsidiary
Main business
activities
December
31, 2018
December
31, 2017 Description
Ownership (%)
Clevo (Cayman
Islands) Holding
Company
Buynow Global
Corporation
Investing 100 100
Clevo (Cayman
Islands) Holding
Company
Buynow
(Hangzhou)
Corporatioon
Investing 100 100
Clevo (Cayman
Islands) Holding
Company
Buynow
(Zhengzhou)
Corporation
Investing 100 100
Clevo (Cayman
Islands) Holding
Company
Buynow Group
(Changsha)
Corporation
Investing 100 100
Clevo (Cayman
Islands) Holding
Company
Buynow
(Nanchang)
Corporation
Investing 100 100
Clevo (Cayman
Islands) Holding
Company
Buynow
(Guangzhou)
Corporation
Investing 100 100
Clevo (Cayman
Islands) Holding
Company
Flying Wolf
Investment Limited
Investing 100 100
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Name of
investor
Name of
subsidiary
Main business
activities
December
31, 2018
December
31, 2017 Description
Ownership (%)
Clevo (Cayman
Islands) Holding
Company
Buynow (Xiamen)
Corporation
Investing 100 100
Clevo (Cayman
Islands) Holding
Company
Buynow Group
(Xian) Corporation
Investing 100 100
Clevo (Cayman
Islands) Holding
Company
Buynow
(Changchun)
Corporation
Investing 100 100
Clevo (Cayman
Islands) Holding
Company
Buynow (Wuhan)
Corporation
Investing - 100 (Note 1)
Clevo (Cayman
Islands) Holding
Company
Buynow Group
(Qingdao)
Corporation
Investing 100 100
Clevo (Cayman
Islands) Holding
Company
Buynow (Wuxi)
Corporation
Investing 100 100
Clevo (Cayman
Islands) Holding
Company
Buynow (Harbin)
Corporation
Investing 100 100
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Name of
investor
Name of
subsidiary
Main business
activities
December
31, 2018
December
31, 2017 Description
Ownership (%)
Clevo (Cayman
Islands) Holding
Company
Flying International
Investment Limited
Investing 100 100
Clevo (Cayman
Islands) Holding
Company
Buynow
(Chongqing)
Limited
Investing 100 100
Clevo (Cayman
Islands) Holding
Company
Buynow (Daqing)
Corporation
Investing 100 100
Clevo (Cayman
Islands) Holding
Company
Buynow (Zibo)
Corporation
Investing 100 100
Clevo (Cayman
Islands) Holding
Company
Buynow (Beijing)
Corporation
Investing 100 100
Clevo (Cayman
Islands) Holding
Company
Buynow
(Yangcheng)
Corporation
Investing 100 100
Clevo (Cayman
Islands) Holding
Company
Skill Develop
International
Limited
Investing 100 100
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Name of
investor
Name of
subsidiary
Main business
activities
December
31, 2018
December
31, 2017 Description
Ownership (%)
Clevo (Cayman
Islands) Holding
Company
Buynow (Yingkou)
Corporation
Investing 100 100
Clevo (Cayman
Islands) Holding
Company
Buynow (Anshan)
Corporation
Investing 100 100
Clevo (Cayman
Islands) Holding
Company
Buynow (Huizhou)
Corporation
Investing 100 100
Clevo (Cayman
Islands) Holding
Company
Buynow (Guiyang)
Corporation
Investing 100 100
Clevo (Cayman
Islands) Holding
Company
Buynow (Taizhou)
Corporation
Investing 100 100
Clevo (Cayman
Islands) Holding
Company
Buynow (Dezhou)
Corporation
Investing 100 100
Clevo (Cayman
Islands) Holding
Company
Buynow (Luoyang)
Corporation
Investing 100 100
-170-
Name of
investor
Name of
subsidiary
Main business
activities
December
31, 2018
December
31, 2017 Description
Ownership (%)
Clevo (Cayman
Islands) Holding
Company
Smarter Capital
Limited
Investing 100 100
Clevo (Cayman
Islands) Holding
Company
Buynow (Fujian
Quanzhou)
Corporation
Investing 100 100
Clevo (Cayman
Islands) Holding
Company
Buynow (Jinzhou)
Corporation
Investing 100 100
Clevo (Cayman
Islands) Holding
Company
Clevo (China)
Investment Co.,
Ltd.
Investing in
companies, setting
up R&D department
and consultation
service
100 100
Clevo (Cayman
Islands) Holding
Company
Buynow (Shantou)
Corporation
Investing 100 100
Clevo (Cayman
Islands) Holding
Company
Clevo (HK)
Investment Holding
Limited
Investing 100 100
-171-
Name of
investor
Name of
subsidiary
Main business
activities
December
31, 2018
December
31, 2017 Description
Ownership (%)
Clevo (HK)
Investment Holding
Limited
Clevo Japan GK Investing 100 100
Buynow
On-line Holding
Corporation
Buynow
On-line Limited
Investing 100 100
Skill Develop
International
Limited
Well Asia
Investment Limited
Investing 100 100
Clevo Computer
Singapore Pte Ltd.
Buynow (Chengdu)
Corporation Co.,
Ltd.
Investing 100 100
Clevo Computer
Singapore Pte Ltd.
Buynow (Nanjing)
Facility Leasing
and Management
Co., Ltd.
Manufacturing, sale,
research and
development
of computers and
computer
peripherals and
services for relating
electronics
100 100
Clevo Computer
Singapore Pte Ltd.
Kalor Buynow
(Heifei) Electronic
Information Co.,
Ltd.
Manufacturing, sale,
research and
development
of computers and
computer
peripherals and
services for relating
electronics
100 100
-172-
Name of
investor
Name of
subsidiary
Main business
activities
December
31, 2018
December
31, 2017 Description
Ownership (%)
Clevo Computer
Singapore Pte Ltd.
Qingdao Buynow
Technology
Industry Co., Ltd.
Manufacturing, sale,
research and
development
of computers and
computer
peripherals; Display,
advisory and after-
sales service of
digital products;
Property
management of self-
owned buildings
8.82 8.82 (Note 2)
Buynow Group
(Qingdao)
Corporation
Qingdao Buynow
Technology
Industry Co., Ltd.
Manufacturing, sale,
research and
development
of computers and
computer
peripherals; Display,
advisory and after-
sales service of
digital products;
Property
management of self-
owned buildings
20.59 20.59 (Note 2)
Kapok Computer
(Samoa)
Corporation
Kapok Computer
(Kunshan) Co., Ltd.
Manufacturing, sale,
research and
development and
maintenance service
of computers,
notebooks, tablets,
information and
communication
products and
computer
components
100 100
-173-
Name of
investor
Name of
subsidiary
Main business
activities
December
31, 2018
December
31, 2017 Description
Ownership (%)
Buynow Global
Corporation
Shanghai Buynow
Electronic
Information Co.,
Ltd.
Rental of exhibition,
advisory,
maintenance service
and property
management of
computer and
related electronics
products
21.21 21.21 (Note 2)
Buynow Global
Corporation
Kalor Trade
(Shanghai) Co.,
Ltd.
Wholesale and
retail, import and
export, and after-
sales service of
household
appliances,
computer and
computer
components,
communication
equipment, electrical
devices, office
supplies and
complementary
products;
Development,
technology transfer
and advisory
services
- 30 (Note 3)
Buynow Global
Corporation
Quality Trust
Property
Management Co.,
Ltd.
Property
management,
advisory of real
estate, building
leasing,
housekeeping
service, parking lot
service, car wash
service and business
service
100 100
-174-
Name of
investor
Name of
subsidiary
Main business
activities
December
31, 2018
December
31, 2017 Description
Ownership (%)
Buynow Global
Corporation
Kunshan Kaishuo
Trading Co., Ltd.
Mechanical
equipment and
accessories, wire
and cable, air
conditioning
equipment, building
and decoration
material, lighting
equipment,
Kitchen appliance,
water cleaner,
pipeline and
accessories, fire
safety equipment,
compressor and
accessories,
wholesale of
elevators and
appliances, import
and export and
advisory services
100 100
Buynow (Hangzhou)
Corporation
Buynow
(Hangzhou)
Electronic
Information Co.,
Ltd.
Manufacturing, sale,
research and
development and
after-sales service of
computers and
computer
peripherals; Property
management of
buildings
100 100
Buynow Group
(Xian) Corporation
Buynow (Xian)
Industry Co., Ltd.
Manufacturing, sale,
maintenance service,
research and
development of
computers and
computer
peripherals and
digital products
100 100
-175-
Name of
investor
Name of
subsidiary
Main business
activities
December
31, 2018
December
31, 2017 Description
Ownership (%)
Buynow Group
(Changsha)
Corporation
Buynow
(Changsha)
Industry Co., Ltd.
Manufacturing, sale,
maintenance service,
research and
development of
computers and
computer
peripherals and
digital products, and
property
management of
buildings
100 100
Buynow
(Zhengzhou)
Corporation
Buynow
(Zhengzhou)
Electronic
Information Co.,
Ltd.
Manufacturing, sale,
maintenance service,
research and
development of
computers and
computer
peripherals and
digital products
100 100
Buynow (Nanchang)
Corporation
Buynow
(Nanchang)
Industry Co., Ltd.
Manufacturing, sale,
maintenance service,
research and
development of
computers and
computer
peripherals and
digital products, and
property
management of
buildings
100 100
-176-
Name of
investor
Name of
subsidiary
Main business
activities
December
31, 2018
December
31, 2017 Description
Ownership (%)
Buynow
(Guangzhou)
Corporation
Buynow
(Guangzhou)
Electronic
Information Co.,
Ltd.
Manufacturing, sale,
maintenance service,
research and
development of
computers and
computer
peripherals and
digital products
100 100
Buynow (Xiamen)
Corporation
Buynow (Fujian)
Electronic
Technology
Development Co.,
Ltd.
Manufacturing, sale,
maintenance service,
research and
development of
computers and
computer
peripherals and
digital products
100 100
Buynow
(Changchun)
Corporation
Buynow
(Changchun)
Industry Co., Ltd.
Manufacturing, sale,
maintenance service,
research and
development of
computers and
computer
peripherals and
digital products, and
property
management of
buildings
95.24 95.24 (Note 2)
-177-
Name of
investor
Name of
subsidiary
Main business
activities
December
31, 2018
December
31, 2017 Description
Ownership (%)
Flying Wolf
Investment Limited
Buynow
(Changchun)
Industry Co., Ltd.
Manufacturing, sale,
maintenance service,
research and
development of
computers and
computer
peripherals and
digital products, and
property
management of
buildings
4.76 4.76 (Note 2)
Flying Wolf
Investment Limited
Buynow Electronic
Information
(Shenyang) Co.,
Ltd.
Research and
development of
computers and
computer
peripherals and
electronic products;
Advisory services of
economic
information
100 100
Flying Wolf
Investment Limited
Buynow (Wuxi)
Electronic
Technology
Development Co.,
Ltd.
Manufacturing, sale,
maintenance service,
research and
development of
computer software
and digital products
28.57 28.57 (Note 2)
-178-
Name of
investor
Name of
subsidiary
Main business
activities
December
31, 2018
December
31, 2017 Description
Ownership (%)
Buynow (Wuxi)
Corporation
Buynow (Wuxi)
Electronic
Technology
Development Co.,
Ltd.
Manufacturing, sale,
maintenance service,
research and
development of
computer software
and digital products
71.43 71.43 (Note 2)
Buynow (Wuhan)
Corporation
Buynow (Wuhan)
Industry Co., Ltd.
Manufacturing, sale,
maintenance service,
research and
development of
computer software
and digital products,
and property
management of
buildings
- 100 (Note 1)
Buynow (Harbin)
Corporation
Buynow (Harbin)
Industry Co., Ltd.
Manufacturing, sale,
maintenance service,
research and
development of
computers and
computer
peripherals and
digital products
100 100
-179-
Name of
investor
Name of
subsidiary
Main business
activities
December
31, 2018
December
31, 2017 Description
Ownership (%)
Buynow (Chengdu)
Corporation
Buynow (Chengdu)
Electronic
Information Co.,
Ltd.
Manufacturing, sale,
maintenance service,
research and
development of
computers and
computer
peripherals and
digital products, and
property
management of
buildings
100 100
Flying International
Investment Limited
Tianjin Buynow
Electronic
Information Co.,
Ltd.
Manufacturing, sale,
maintenance service,
research and
development of
computers and
computer
peripherals and
digital products
100 100
Buynow
(Chongqing)
Limited
Buynow
(Chongqing)
Industry Co., Ltd.
Manufacturing, sale,
research and
development of
computers and
computer
peripherals (not
including electronic
publishing),
shopping mall
management,
wholesale and retail
of electronic
products, property
management and
parking lot service
100 100
-180-
Name of
investor
Name of
subsidiary
Main business
activities
December
31, 2018
December
31, 2017 Description
Ownership (%)
Buynow On-line
Limited
Shanghai Buynow
Online Information
Technology Co.,
Ltd.
Wholesale and
retail, import and
export, and after-
sales service of
household
appliances,
computer and
computer
components,
communication
equipment, electrical
devices, office
supplies and
complementary
products;
Development,
technology transfer,
advisory, service
and training for
internet, computer
software and
hardware and
communication
equipment
100 100
Buynow (Daqing)
Corporation
Daqing Buynow
Electronic
Information Co.,
Ltd.
Manufacturing,
retail and wholesale
of computers and
computer
peripherals;
Electronic
information
shopping mall
management
100 100
-181-
Name of
investor
Name of
subsidiary
Main business
activities
December
31, 2018
December
31, 2017 Description
Ownership (%)
Well Asia
Investment Limited
Guangdong
Buynow Real
Estate Management
Co., Ltd.
Self-owned property
management and
leasing;
Manufacturing, sale,
research and
development of
computer software
and hardware and
digital products
65 65 (Note 2)
Buynow (Zibo)
Corporation
Zibo Buynow
Electronic
Information Co.,
Ltd.
Manufacturing, sale,
maintenance service,
research and
development of
computers and
computer
peripherals and
digital products;
Advisory services
for business
management;
Leasing of self-
owned buildings,
parking lot
management,
shopping mall
management and
property
management
100 100
-182-
Name of
investor
Name of
subsidiary
Main business
activities
December
31, 2018
December
31, 2017 Description
Ownership (%)
Buynow (Beijing)
Corporation
Beijing Clevo
Investment
Management
Consultant Co.,
Ltd.
Business advisory of
investment
management,
wholesale agency of
electronic products,
import and export of
goods and property
management
100 100 (Note 6)
Buynow (Yancheng)
Corporation
Buynow
(Yancheng)
Electronic
Information
Technology
Development Co.
Ltd.
Manufacturing, sale,
maintenance service,
research and
development of
computers and
computer
peripherals and
digital products, and
advisory of business
management
100 100
Buynow (Huizhou)
Corporation
Buynow
(Hangzhou)
Electronic
Information Co.,
Ltd.
Industrial
investment,
management
advisory of business,
property
management,
computer network
workshop and
advertisement
production
40 40 (Note 2)
-183-
Name of
investor
Name of
subsidiary
Main business
activities
December
31, 2018
December
31, 2017 Description
Ownership (%)
Buynow (Yingkou)
Corporation
Yingkou Buynow
Electronic
Information Co.,
Ltd.
Manufacturing, sale,
maintenance service,
research and
development of
computers and
computer
peripherals and
digital products, and
business
management
advisory services
100 100
Buynow (Anshan)
Corporation
Anshan Buynow
Electronic
Information Co.,
Ltd.
Manufacturing, sale,
maintenance service,
research and
development of
computers and
computer
peripherals and
digital products, and
business
management
advisory services
100 100
Buynow (Guiyang)
Corporation
Guiyang Buynow
Electronic
Information Co.,
Ltd.
Research and
development of
computers and
computer
peripherals and
electronic products,
and business
management
advisory services
100 100
-184-
Name of
investor
Name of
subsidiary
Main business
activities
December
31, 2018
December
31, 2017 Description
Ownership (%)
Buynow (Taizhou)
Corporation
Taizhou Buynow
Electronic
Information Co.,
Ltd.
Manufacturing, sale,
maintenance service,
research and
development of
computers and
computer
peripherals and
digital products, and
business
management
advisory services
100 100
Smarter Capital
Limited
Buynow SZ.
Corporation
Investing 100 100
Buynow SZ.
Corporation
Suzhou Jinzuo
Industry Co., Ltd.
Business affairs and
property
management
business
100 100
Buynow
(Dezhou)
Corporation
Dezhou Buynow
Electronic
Information Co.,
Ltd.
Research and
development
and maintenance
service of computers
and computer
peripherals and
electronic products;
Business
management
advisory services
and shopping mall
management
100 100
-185-
Name of
investor
Name of
subsidiary
Main business
activities
December
31, 2018
December
31, 2017 Description
Ownership (%)
Buynow
(Luoyang)
Corporation
Luoyang Buynow
Electronic
Information Co.,
Ltd.
Research and
development
and maintenance
service of computers
and computer
peripherals and
electronic products;
Business
management
advisory services
and shopping mall
management
100 100
Buynow (Fuijian
Quanzhou)
Corporation
Quanzhou Buynow
Industry Co., Ltd.
Research and
development
and maintenance
service of computers
and computer
peripherals and
electronic products;
Business
management
advisory services
and shopping mall
management
100 100
-186-
Name of
investor
Name of
subsidiary
Main business
activities
December
31, 2018
December
31, 2017 Description
Ownership (%)
Buynow
(Jinzhou)
Corporation
Buynow (Jinzhou)
Industry Co., Ltd.
Manufacturing of
computer software
and hardware and
consumer electronic
products; Business
management
advisory services
and shopping mall
management
100 100
Buynow (Shantou)
Corporation
Shantou Buynow
Mall Co., Ltd.
Investment in
companies primarily
engaged in research
and development
and advisory
services
100 100
Kapok Computer
Co., Ltd.
Kunshan Kaiming
Trading Co., Ltd.
Provide market
management
services for
operators of laptop
computers, tablets,
desktop computers,
palmtop computers,
information and
communication
products and
computer
components
100 100
-187-
Name of
investor
Name of
subsidiary
Main business
activities
December
31, 2018
December
31, 2017 Description
Ownership (%)
Shanghai Buynow
Electronic
Information Co.,
Ltd.
Shanghai Buynow
Electronic Products
Market
Management Co.,
Ltd.
Provide market
management
services for
operators of
electronic products
100 100
Shanghai Buynow
Electronic
Information Co.,
Ltd.
Shanghai Buynow
Electronic Products
Market
Management Co.,
Ltd.
Provide market
management
services for
operators of
computers and
computer
peripherals
- 100 (Note 8)
Shanghai Buynow
Electronic
Information Co.,
Ltd.
Beijing Kaiye
Electronic
Technology Co.,
Ltd.
Technology-
extension services,
computer
maintenance, public
parking lot service
for motorcycle,
property
management,
business
management
advisory services,
business building
leasing, wholesale
of computer and
computer
peripherals,
hardware electronic
products and
household
appliances
- 100 (Note 4)
-188-
Name of
investor
Name of
subsidiary
Main business
activities
December
31, 2018
December
31, 2017 Description
Ownership (%)
Shanghai Buynow
Electronic
Information Co.,
Ltd.
Changzhou Jiuzhou
Buynow Computer
Mall Co., Ltd.
Leasing of facility,
market management
service, sale of
computer and
computer
peripherals,
electronic products,
digital products,
internet technology
services,
information advisory
service, maintenance
of computer and
computer
peripherals
- 3.125 (Note 2、
Note 7)
Shanghai Buynow
Electronic
Information Co.,
Ltd.
Kalor Trade
(Shanghai) Co.,
Ltd.
Wholesale and
retail, import and
export, and after-
sales service of
household
appliances,
computer and
computer
components,
communication
equipment, electrical
devices, office
supplies and
complementary
products
- 70 (Note 3)
-189-
Name of
investor
Name of
subsidiary
Main business
activities
December
31, 2018
December
31, 2017 Description
Ownership (%)
Shanghai Buynow
Electronic Products
Market Management
Co., Ltd.
Shanghai Buynow
Restaurant
Management Co.,
Ltd.
Catering business
management, sale of
household
appliances, clothing,
shoes and hats, and
electronic products
100 100
Shanghai Buynow
Electronic Products
Market Management
Co., Ltd.
Shanghai Huihei
Advertisment Co.,
Ltd.
Advertising design
and marketing
100 100
Shanghai Buynow
Electronic Products
Market Management
Co., Ltd.
Shanghai Huizhuan
Restaurant
Management Co.,
Ltd.
Catering business
management
80 80 (Note 5)
Quality Trust
Property
Management Co.,
Ltd.
Wuxi Quantai
Property
Management Co.,
Ltd.
Property
management, real
estate advisory
services, building
leasing,
housekeeping
service, parking lot
service, car wash
service and business
service
100 100
-190-
Name of
investor
Name of
subsidiary
Main business
activities
December
31, 2018
December
31, 2017 Description
Ownership (%)
Buynow (Wuxi)
Corporation
Wuxi Buynow
Electronic Market
Co., Ltd.
Leasing of facility,
market management
service, catering
management,
property
management,
parking lot
management
100 100
Buynow (Wuxi)
Corporation
Beijing Kaiye
Electronic
Technology Co.,
Ltd.
Technology-
extension services,
computer
maintenance, public
parking lot service
for motorcycle,
property
management,
business
management
advisory services,
business building
leasing, wholesale
of computer and
computer
peripherals,
hardware electronic
products and
household
appliances
10 - (Note 4)
-191-
Name of
investor
Name of
subsidiary
Main business
activities
December
31, 2018
December
31, 2017 Description
Ownership (%)
Buynow (Fujian)
Electronic Co., Ltd.
Xiamen Lejing
Internet Bar Co.,
Ltd.
Internet café and
internet message
service
100 100
Buynow Electronic
Information Co.,
Ltd.
Guandong Huijing
Real Estate
Development Co.,
Ltd.
Self-owned property
management and
leasing.
manufacturing, sale,
research and
development of
computer software
and hardware and
digital products
35 35 (Note 2)
Buynow Electronic
Information Co.,
Ltd.
Buynow
(Hangzhou)
Electronic
Information Co.,
Ltd.
Industrial
investment, business
management
advisory services,
property
management,
computer network
workshop and
advertisement
production
60 60 (Note 2)
Clevo (China)
Investment Co., Ltd.
Shanghai Huizhuan
Restaurant
Management Co.,
Ltd.
Catering business
management
20 20 (Note 5)
-192-
Name of
investor
Name of
subsidiary
Main business
activities
December
31, 2018
December
31, 2017 Description
Ownership (%)
Clevo (China)
Investment Co., Ltd.
Shanghai Buynow
Electronic
Information Co.,
Ltd.
Leasing of
exhibition space for
computer and
electronic products,
information
advisory,
maintenance service
and property
management
78.79 78.79 (Note 2)
Clevo (China)
Investment Co., Ltd.
Qingdao Buynow
Technology
Industrial Co., Ltd.
Leasing of
exhibition space for
computer and
electronic products,
information
advisory,
maintenance service
and property
management
70.59 70.59 (Note 2)
Guangdong Buynow
Real Estate
Management Co.,
Ltd.
Changzhou Jiuzhou
Buynow Computer
Mall Co., Ltd.
Leasing of facility,
market management
service, sale of
computer and
computer
peripherals,
electronic products,
digital products,
internet technology
service, information
advisory service,
maintenance of
computer and
computer
peripherals
- 96.875 (Note 2、
Note 7)
-193-
Name of
investor
Name of
subsidiary
Main business
activities
December
31, 2018
December
31, 2017 Description
Ownership (%)
Suzhou Jinzuo
Corporation Limited
Suzhou Buynow
Department Store
Co., Ltd.
Wholesale and retail
of daily goods,
office supplies,
shoes, hats and bags,
household
appliance, sporting
goods, hardware
electronic, watch
and the first-class
medical device
100 100
Kalor Buynow
(Heifei) Electronic
Information Co.,
Ltd.
Beijing Kaiye
Electronic
Technology Co.,
Ltd.
Technology-
extension services,
computer
maintenance, public
parking lot service
for motorcycle,
property
management,
business
management
advisory services,
business building
leasing, wholesale
of computer and
computer
peripherals,
hardware electronic
products and
household
appliances
20 - (Note 4)
-194-
Name of
investor
Name of
subsidiary
Main business
activities
December
31, 2018
December
31, 2017 Description
Ownership (%)
Buynow Electronic
Information
(Zhengzhou)
Beijing Kaiye
Electronic
Technology Co.,
Ltd.
Technology-
extension services,
computer
maintenance, public
parking lot service
for motorcycle,
property
management,
business
management
advisory services,
business building
leasing, wholesale
of computer and
computer
peripherals,
hardware electronic
prudicts and
household
appliances
20 - (Note 4)
Buynow
(Changchun)
Industry Co., Ltd.
Beijing Kaiye
Electronic
Technology Co.,
Ltd.
Technology-
extension services,
computer
maintenance, public
parking lot service
for motorcycle,
property
management,
business
management
advisory services,
business building
leasing, wholesale
of computer and
computer
peripherals,
hardware electronic
products and
household
appliances
20 - (Note 4)
-195-
Name of
investor
Name of
subsidiary
Main business
activities
December
31, 2018
December
31, 2017 Description
Ownership (%)
Buynow (Hangzhou)
Electronic
Information Co.,
Ltd.
Beijing Kaiye
Electronic
Technology Co.,
Ltd.
Technology-
extension services,
computer
maintenance, public
parking lot service
for motorcycle,
property
management,
business
management and
advisory, business
building leasing,
wholesale of
computer and
computer
peripherals,
hardware electronic
products and
household
appliances
20 - (Note 4)
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Name of
investor
Name of
subsidiary
Main business
activities
December
31, 2018
December
31, 2017 Description
Ownership (%)
Tianjin Buynow
Electronic
Information Co.,
Ltd.
Beijing Kaiye
Electronic
Technology Co.,
Ltd.
Technology-
extension services,
computer
maintenance, public
parking lot service
for motorcycle,
property
management,
business
management and
advisory, business
building leasing,
wholesale of
computer and
computer
peripherals,
hardware electronic
products and
household
appliances
10 - (Note 4)
Daqing Buynow
Corporation
Beijing Clevo
Investment
Management
Consultant Co.,
Ltd.
Business advisory of
investment
management,
wholesale agency of
electronic products,
import and export of
goods and property
management
5.42 - (Note 6)
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Note 1: Clevo (Cayman Islands) Holding Company sold 100% of shares in subsidiary Buynow
(Wuhan) Corporation in March, 2018, and accordingly, the Group lost its control over the
subsidiaries, Buynow (Wuhan) Corporation and Buynow (Wuhan) Industry Co., Ltd.
Note 2: The parent company of the Group held 100% of the shares in these subsidiaries, and the
subsidiaries were included in the consolidated financial statements.
Note 3: Kalor Trade (Shanghai) Co., Ltd. was liquidated and dissolved on February 12, 2018.
Note 4: Buynow (Wuxi) Electronic Technology Development Co., Ltd., Kalor Buynow (Heifei)
Electronic Information Co., Ltd., Buynow (Zhengzhou) Electronic Information Co., Ltd.,
Buynow (Changchun) Industry Co., Ltd., and Buynow (Hangzhou) Electronic
Information Co., Ltd. acquired 10%, 20%, 20%, 20%, and 20% of the shares of Beijing
Kaiye Electronic Technology Co., Ltd., respectively. Additionally, Shanghai Buynow
Electronic Information Co., Ltd. sold 100% of shares in Beijing Kaiye Electronic
Technology Co., Ltd. to Tianjin Buynow Electronic Information Co., Ltd. on April 30,
2018. The parent company of the Group held 100% of the shares in these subsidiaries,
and the subsidiaries were included in the consolidated financial statements.
Note 5: Shanghai Buynow Electronic Products Market Management Co., Ltd. acquired 80% of
the shares of Shanghai Huizhuan Restaurant Management Co., Ltd. on September 7, 2017.
Clevo (China) Investment Co., Ltd.’s shareholding ratio dropped from 100% to 20%. The
parent company of the Group held 100% of the shares in these subsidiaries, and the
Name of
investor
Name of
subsidiary
Main business
activities
December
31, 2018
December
31, 2017 Description
Ownership (%)
Zibo Buynow
Electronic
Information Co.,
Ltd.
Beijing Clevo
Investment
Management
Consulant Co., Ltd.
Business advisory of
investment
management,
wholesale agency of
electronic products,
import and export of
goods and property
management
6.97 - (Note 6)
Shanghai Buynow
Electronic
Information Co.,
Ltd.
Beijing Clevo
Investment
Management
Consultant Co.,
Ltd.
Business advisory of
investment
management,
wholesale agency of
electronic products,
import and export of
goods and property
management
11.61 - (Note 6)
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subsidiaries were included in the consolidated financial statements.
Note 6: Buynow (Beijing) Corporation sold 24% of share in Beijing Clevo Investment
Management Consulsant Co., Ltd. to Daqing Buynow Electronic Information Co., Ltd.,
Zibo Buynow Electronic Information Co., Ltd., and Shanghai Buynow Electronic
Information Co., Ltd. on September 10, 2018. Daqing Buynow Electronic Information
Co., Ltd., Zibo Buynow Electronic Information Co., Ltd., and Shanghai Buynow
Electronic Information Co., Ltd. acquired 5.42%, 6.97% and 11.61% of the shares,
respectively. The parent company of the Group held 100% of the shares in these
subsidiaries, and the subsidiaries were included in the consolidated financial statements.
Note 7: Changzhou Jiuzhou Buynow Computer Mall Co., Ltd. liquidated and dissolved on July 5,
2018.
Note 8: Shanghai Buynow Computer Market Management Co., Ltd. liquidated and dissolved on
October 22, 2018.
C. Subsidiaries not included in the consolidated financial statements:
D. Adjustments for subsidiaries with different balance sheet dates: None.
E. Significant restrictions: None.
F. Subsidiaries that have non-controlling interests that are material to the Group: None.
(4)Foreign currency translation
Items included in the financial statements of each of the Group’s entities are measured using the
currency of the primary economic environment in which the entity operates (the “functional
currency”). The consolidated financial statements are presented in “New Taiwan Dollars”, which is
the Company’s functional and the Group’s presentation currency.
A. Foreign currency transactions and balances
(a) Foreign currency transactions are translated into the functional currency using the exchange
rates prevailing at the dates of the transactions or valuation where items are remeasured.
Foreign exchange gains and losses resulting from the settlement of such transactions are
recognised in profit or loss in the period in which they arise.
(b) Monetary assets and liabilities denominated in foreign currencies at the period end are re-
translated at the exchange rates prevailing at the balance sheet date. Exchange differences
arising upon re-translation at the balance sheet date are recognised in profit or loss.
(c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value
through profit or loss are re-translated at the exchange rates prevailing at the balance sheet
Name of
investor
Name of
subsidiary
Main business
activities
December
31, 2018
December
31, 2017 Description
The
Company
Clevo France
Sarl
Design and sale
of computers and
computer peripherals
100 100 (Note)
Ownership (%)
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date; their translation differences are recognised in profit or loss. Non-monetary assets and
liabilities denominated in foreign currencies held at fair value through other comprehensive
income are re-translated at the exchange rates prevailing at the balance sheet date; their
translation differences are recognised in other comprehensive income. However, non-
monetary assets and liabilities denominated in foreign currencies that are not measured at fair
value are translated using the historical exchange rates at the dates of the initial transactions.
(d) All other foreign exchange gains and losses based on the nature of those transactions are
presented in the statement of comprehensive income within ‘other gains and losses’.
B. Translation of foreign operations
(a) The operating results and financial position of all the group entities, associates and joint
arrangements that have a functional currency different from the presentation currency are
translated into the presentation currency as follows:
i. Assets and liabilities for each balance sheet presented are translated at the closing exchange
rate at the date of that balance sheet;
ii. Income and expenses for each statement of comprehensive income are translated at average
exchange rates of that period; and
iii. All resulting exchange differences are recognised in other comprehensive income.
(b) When the foreign operation partially disposed of or sold is an associate or joint arrangement,
exchange differences that were recorded in other comprehensive income are proportionately
reclassified to profit or loss as part of the gain or loss on sale. In addition, even when the Group
retains partial interest in the former foreign associate or joint arrangement after losing
significant influence over the former foreign associate, or losing joint control of the former
joint arrangement, such transactions should be accounted for as disposal of all interest in these
foreign operations.
(c) When the foreign operation partially disposed of or sold is a subsidiary, cumulative exchange
differences that were recorded in other comprehensive income are proportionately transferred
to the non-controlling interest in this foreign operation. In addition, even when the Group
retains partial interest in the former foreign subsidiary after losing control of the former foreign
subsidiary, such transactions should be accounted for as disposal of all interest in the foreign
operation.
(5)Classification of current and non-current items
A. Assets that meet one of the following criteria are classified as current assets; otherwise they are
classified as non-current assets:
(a) Assets arising from operating activities that are expected to be realised, or are intended to be
sold or consumed within the normal operating cycle;
(b) Assets held mainly for trading purposes;
(c) Assets that are expected to be realised within twelve months from the balance sheet date;
(d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to
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be exchanged or used to settle liabilities more than twelve months after the balance sheet date.
B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they
are classified as non-current liabilities:
(a) Liabilities that are expected to be settled within the normal operating cycle;
(b) Liabilities arising mainly from trading activities;
(c) Liabilities that are to be settled within twelve months from the balance sheet date;
(d) Liabilities for which the repayment date cannot be extended unconditionally to more than
twelve months after the balance sheet date. 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.
(6)Cash equivalents
Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known
amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits that
meet the definition above and are held for the purpose of meeting short-term cash commitments in
operations are classified as cash equivalents.
(7)Financial assets at fair value through profit or loss
A. Financial assets at fair value through profit or loss are financial assets that are not measured at
amortised cost or fair value through other comprehensive income.
B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are
recognised and derecognised using trade date accounting.
C. At initial recognition, the Group measures the financial assets at fair value and recognises the
transaction costs in profit or loss. The Group subsequently measures the financial assets at fair
value, and recognises the gain or loss in profit or loss.
D. The Group recognises the dividend income when the right to receive payment is established, future
economic benefits associated with the dividend will flow to the Group and the amount of the
dividend can be measured reliably.
(8)Financial assets at amortised cost
A. Financial assets at amortised cost are those that meet all of the following criteria:
(a) The objective of the Group’s business model is achieved by collecting contractual cash flows.
(b) The assets’ contractual cash flows represent solely payments of principal and interest.
B. On a regular way purchase or sale basis, financial assets at amortised cost are recognised and
derecognised using trade date accounting.
C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs.
Interest income from these financial assets is included in finance income using the effective
interest method. A gain or loss is recognised in profit or loss when the asset is derecognised or
impaired.
D. The Group’s time deposits which do not fall under cash equivalents are those with a short maturity
period and are measured at initial investment amount as the effect of discounting is immaterial.
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(9)Accounts and notes receivable
A. Accounts and notes receivable entitle the Group a legal right to receive consideration in exchange
for transferred goods or rendered services.
B. The short-term accounts and notes receivable without bearing interest are subsequently measured
at initial invoice amount as the effect of discounting is immaterial.
(10)Impairment of financial assets
For debt instruments measured at fair value through other comprehensive income and financial
assets at amortised cost including accounts receivable or contract assets that have a significant
financing component and lease receivables at each reporting date, the Group recognises the
impairment provision for 12 months expected credit losses if there has not been a significant increase
in credit risk since initial recognition or recognises the impairment provision for the lifetime
expected credit losses (ECLs) if such credit risk has increased since initial recognition after taking
into consideration all reasonable and verifiable information that includes forecasts. On the other
hand, for accounts receivable or contract assets that do not contain a significant financing component,
the Group recognises the impairment provision for lifetime ECLs.
(11)Derecognition of financial assets
The Group derecognises a financial asset when one of the following conditions is met:
A. The contractual rights to receive the cash flows from the financial asset expire.
B. The contractual rights to receive cash flows of the financial asset have been transferred and the
Group has transferred substantially all risks and rewards of ownership of the financial asset.
C. The contractual rights to receive cash flows of the financial asset have been transferred; however,
the Group has not retained control of the financial asset.
(12)Lease receivables/ operating leases (lessor)
Lease income from an operating lease (net of any incentives given to the lessee) is recognised in
profit or loss on a straight-line basis over the lease term.
(13)Inventories
A. Inventories, that including construction in progress, buildings and land held for sale, are
measured at acquired cost and capitalize borrowing costs incurred during the period of
construction.
B. The lands use rights of house construction and the superficies rights of acquiring specific lands
the Group acquired for construction developing and leasing are in accordance with paragraph 6
and 8 of IAS2, therefore, the acquired costs of lands use rights are recognised as inventories.
C. The cost of the computers and peripheral products is determined using the weighted-average
method. The cost of finished goods and work in progress comprises raw materials, direct labour,
other direct costs and related production overheads (allocated based on normal operating
capacity). It excludes borrowing costs.
D. Inventories are stated at the lower of cost and net realizable value. The item by item approach is
used in applying the lower of cost and net realizable value. Net realizable value is the estimated
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selling price in the ordinary course of business, less the estimated cost of completion and
applicable variable selling expenses.
(14)Investments accounted for using equity method / associates
A. Associates are all entities over which the Group has significant influence but not control. In
general, it is presumed that the investor has significant influence, if an investor holds, directly or
indirectly 20 percent or more of the voting power of the investee. Investments in associates are
accounted for using the equity method and are initially recognised at cost.
B. The Group’s share of its associates’ post-acquisition profits or losses is recognised in profit or
loss, and its share of post-acquisition movements in other comprehensive income is recognised
in other comprehensive income. When the Group’s share of losses in an associate equals or
exceeds its interest in the associate, including any other unsecured receivables, the Group does
not recognise further losses, unless it has incurred legal or constructive obligations or made
payments on behalf of the associate.
C. When changes in an associate’s equity do not arise from profit or loss or other comprehensive
income of the associate and such changes do not affect the Group’s ownership percentage of the
associate, the Group recognises change in ownership interests in the associate in ‘capital surplus’
in proportion to its ownership.
D. Unrealised gains on transactions between the Group and its associates are eliminated to the extent
of the Group’s interest in the associates. Unrealised losses are also eliminated unless the
transaction provides evidence of an impairment of the asset transferred. Accounting policies of
associates have been adjusted where necessary to ensure consistency with the policies adopted
by the Group.
E. When the Group disposes its investment in an associate and loses significant influence over this
associate, the amounts previously recognised in other comprehensive income in relation to the
associate, are reclassified to profit or loss, on the same basis as would be required if the relevant
assets or liabilities were disposed of. If it retains significant influence over this associate, the
amounts previously recognised in other comprehensive income in relation to the associate are
reclassified to profit or loss proportionately in accordance with the aforementioned approach.
(15)Property, plant and equipment
A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the
construction period are capitalised.
B. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will
flow to the Group and the cost of the item can be measured reliably. The carrying amount of the
replaced part is derecognised. All other repairs and maintenance are charged to profit or loss
during the financial period in which they are incurred.
C. Land is not depreciated. Other property, plant and equipment apply cost model and are
depreciated using the straight-line method to allocate their cost over their estimated useful lives.
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Each part of an item of property, plant, and equipment with a cost that is significant in relation
to the total cost of the item must be depreciated separately.
D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if
appropriate, at each financial year-end. If expectations for the assets’ residual values and useful
lives differ from previous estimates or the patterns of consumption of the assets’ future economic
benefits embodied in the assets have changed significantly, any change is accounted for as a
change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and
Errors’, from the date of the change. The estimated useful lives of property, plant and equipment
are as follows:
Buildings and structures 2 ~ 50 years
Machinery and equipment 3 ~ 5 years
Molding equipment 1 ~ 3 years
Computer and communication Equipment 3 ~ 5 years
Transportation equipment 1 ~ 5 years
Office equipment 3 ~ 5 years
Other equipment 3 ~ 5 years
Leasehold assets 5 ~ 30 years
(16)Operating leases (lessee)
Payments made under an operating lease (net of any incentives received from the lessor) are
recognised in profit or loss on a straight-line basis over the lease term.
(17)Investment property
A. The investment property is to earn rental revenue or for capital appreciation or both instead of
non-owner-occupied property hold by the Group.
B. The Group acquired the specific land superficies and its right to use of the constructed buildings
on the land. Due to the development of the construction plans, the Group leased the land as the
investing properties and recognised the acquired historical cost of the land use rights as the basis.
C. An investment property is stated initially at its cost and measured subsequently using the fair
value model. A gain or loss arising from a change in the fair value of investment property is
recognised in profit or loss.
(18)Intangible assets
A. Computer software
Computer software is stated at cost and amortised on a straight-line basis over its estimated useful
life of 1 to 10 years.
B. Goodwill
Goodwill arises in a business combination accounted for by applying the acquisition method.
(19)Impairment of non-financial assets
A. The Group assesses at each balance sheet date the recoverable amounts of those assets where
there is an indication that they are impaired. An impairment loss is recognised for the amount by
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which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is
the higher of an asset’s fair value less costs to sell or value in use. Except for goodwill, when the
circumstances or reasons for recognizing impairment loss for an asset in prior years no longer
exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal
should not be more than what the depreciated or amortised historical cost would have been if the
impairment had not been recognised.
B. The recoverable amounts of goodwill are evaluated periodically. An impairment loss is
recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount.
Impairment loss of goodwill previously recognised in profit or loss shall not be reversed in the
following years.
C. For the purpose of impairment testing, goodwill acquired in a business combination is allocated
to each of the cash-generating units, or groups of cash-generating units, that is/are expected to
benefit from the synergies of the business combination. Each unit or group of units to which the
goodwill is allocated represents the lowest level within the entity at which the goodwill is
monitored for internal management purposes. Goodwill is monitored at the operating segment
level.
(20)Borrowings
A. Borrowings comprise long-term and short-term bank borrowings and other long-term and short-
term loans. Borrowings are recognised initially at fair value, net of transaction costs incurred.
Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net
of transaction costs) and the redemption value is recognised in profit or loss over the period of
the borrowings using the effective interest method.
B. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to
the extent that it is probable that some or all of the facility will be drawn down. In this case, the
fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable
that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for
liquidity services and amortised over the period of the facility to which it relates.
(21)Notes and accounts payable
A. Accounts payable are liabilities for purchases of raw materials, goods or services and notes
payable are those resulting from operating and non-operating activities.
B. The short-term notes and accounts payable without bearing interest are subsequently measured
at initial invoice amount as the effect of discounting is immaterial.
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(22)Financial liabilities at fair value through profit or loss
A. Financial liabilities are classified in this category of held for trading if acquired principally for
the purpose of repurchasing in the short-term. Derivatives are also categorised as financial
liabilities held for trading unless they are designated as hedges.
B. At initial recognition, the Group measures the financial liabilities at fair value. All related
transaction costs are recognised in profit or loss. The Group subsequently measures these
financial liabilities at fair value with any gain or loss recognised in profit or loss.
(23)Bonds payable
Ordinary corporate bonds issued by the Group are initially recognised at fair value less transaction
costs. Any difference between the proceeds (net of transaction costs) and the redemption value is
presented as an addition to or deduction from bonds payable, which is amortised to profit or loss
over the period of bond circulation using the effective interest method as an adjustment to ‘finance
costs’.
(24)Derecognition of financial liabilities
A financial liability is derecognised when the obligation specified in the contract is either discharged
or cancelled or expires.
(25)Offsetting financial instruments
Financial assets and liabilities are offset and reported in the net amount in the balance sheet when
there is a legally enforceable right to offset the recognised amounts and there is an intention to settle
on a net basis or realise the asset and settle the liability simultaneously.
(26)Non-hedging derivatives
Non-hedging derivatives are initially recognised at fair value on the date a derivative contract is
entered into and recorded as financial assets or financial liabilities at fair value through profit or loss.
They are subsequently remeasured at fair value and the gains or losses are recognised in profit or
loss.
(27)Provisions
Warranty provisions are recognised when the Group has a present legal or constructive obligation
as a result of past events, and it is probable that an outflow of economic resources will be required
to settle the obligation and the amount of the obligation can be reliably estimated.
(28)Employee benefits
A. Short-term employee benefits
Short-term employee benefits are measured at the undiscounted amount of the benefits expected
to be paid in respect of service rendered by employees in a period and should be recognised as
expense in that period when the employees render service.
B. Pensions
(a) Defined contribution plans
For defined contribution plans, the contributions are recognised as pension expense when
they are due on an accrual basis. Prepaid contributions are recognised as an asset to the extent
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of a cash refund or a reduction in the future payments.
(b) Defined benefit plans
i. Net obligation under a defined benefit plan is defined as the present value of an amount of
pension benefits that employees will receive on retirement for their services with the Group
in current period or prior periods. The liability recognised in the balance sheet in respect of
defined benefit pension plans is the present value of the defined benefit obligation at the
balance sheet date less the fair value of plan assets. The net defined benefit obligation is
calculated annually by independent actuaries using the projected unit credit method. The
rate used to discount is determined by using interest rates of high-quality corporate bonds
that are denominated in the currency in which the benefits will be paid, and that have terms
to maturity approximating to the terms of the related pension liability; when there is no
deep market in high-quality corporate bonds, the Group uses interest rates of government
bonds (at the balance sheet date) instead.
ii. Remeasurements arising on defined benefit plans are recognised in other comprehensive
income in the period in which they arise and are recorded as retained earnings.
C. Employees’ compensation and directors’ and supervisors’ remuneration
Employees’ compensation and directors’ and supervisors’ remuneration are recognised as
expense and liability, provided that such recognition is required under legal or constructive
obligation and those amounts can be reliably estimated. Any difference between the resolved
amounts and the subsequently actual distributed amounts is accounted for as changes in estimates.
If employee compensation is paid by shares, the Group calculates the number of shares based on
the closing price at the previous day of the board meeting resolution.
(29)Income tax
A. The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or
loss, except to the extent that it relates to items recognised in other comprehensive income or
items recognised directly in equity, in which cases the tax is recognised in other comprehensive
income or equity.
B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively
enacted at the balance sheet date in the countries where the Company and its subsidiaries operate
and generate taxable income. Management periodically evaluates positions taken in tax returns
with respect to situations in accordance with applicable tax regulations. It establishes provisions
where appropriate based on the amounts expected to be paid to the tax authorities. An additional
tax is levied on the unappropriated retained earnings and is recorded as income tax expense in
the year the stockholders resolve to retain the earnings.
C. Deferred tax is recognised, using the balance sheet liability method, on temporary differences
arising between the tax bases of assets and liabilities and their carrying amounts in the
consolidated balance sheet. However, the deferred tax is not accounted for if it arises from initial
recognition of goodwill or of an asset or liability in a transaction other than a business
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combination that at the time of the transaction affects neither accounting nor taxable profit or
loss. Deferred tax is provided on temporary differences arising on investments in subsidiaries
and associates, except where the timing of the reversal of the temporary difference is controlled
by the Group and it is probable that the temporary difference will not reverse in the foreseeable
future. Deferred tax is determined using tax rates (and laws) that have been enacted or
substantially enacted by the balance sheet date and are expected to apply when the related
deferred tax asset is realised or the deferred tax liability is settled.
D. Deferred tax assets are recognised only to the extent that it is probable that future taxable profit
will be available against which the temporary differences can be utilised. At each balance sheet
date, unrecognised and recognised deferred tax assets are reassessed.
E. Current income tax assets and liabilities are offset and the net amount reported in the balance
sheet when there is a legally enforceable right to offset the recognised amounts and there is an
intention to settle on a net basis or realise the asset and settle the liability simultaneously.
Deferred tax assets and liabilities are offset on the balance sheet when the entity has the legally
enforceable right to offset current tax assets against current tax liabilities and they are levied by
the same taxation authority on either the same entity or different entities that intend to settle on
a net basis or realise the asset and settle the liability simultaneously.
F. A deferred tax asset shall be recognised for the carryforward of unused tax credits resulting from
acquisitions of equipment or technology, research and development expenditures and equity
investments to the extent that it is possible that future taxable profit will be available against
which the unused tax credits can be utilised.
(30)Share capital
A. Ordinary shares are classified as equity.
B. Where the Company repurchases the Company’s equity share capital that has been issued, the
consideration paid, including any directly attributable incremental costs (net of income taxes) is
deducted from equity attributable to the Company’s equity holders. Where such shares are
subsequently reissued, the difference between their book value and any consideration received,
net of any directly attributable incremental transaction costs and the related income tax effects,
is included in equity attributable to the Company’s equity holders.
(31)Dividends
Dividends are recorded in the Company’s financial statements in the period in which they are
resolved by the Company’s shareholders. Cash dividends are recorded as liabilities; stock dividends
are recorded as stock dividends to be distributed and are reclassified to ordinary shares on the
effective date of new shares issuance.
(32)Revenue recognition
A. Sales of goods
(a) The Group designs, manufactures and sells a range of video display devices, computers and
peripheral products. Sales are recognised when control of the products has transferred, being
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when the products are delivered to the customer, the customer has full discretion over the
channel and price to sell the products, and there is no unfulfilled obligation that could affect
the customer’s acceptance of the products. Delivery occurs when the products have been
shipped to the specific location, the risks of obsolescence and loss have been transferred to
the customer, and either the customer has accepted the products in accordance with the sales
contract, or the Group has objective evidence that all criteria for acceptance have been
satisfied.
(b) The computers are often sold with volume discounts based on aggregate sales over a 12-
month period. Revenue from these sales is recognised based on the price specified in the
contract, net of the estimated volume discounts and sales discounts and allowances.
Accumulated experience is used to estimate and provide for the volume discounts and sales
discounts and allowances, using the expected value method, and revenue is only recognised
to the extent that it is highly probable that a significant reversal will not occur. The estimation
is subject to an assessment at each reporting date. A refund liability is recognised for expected
volume discounts and sales discounts and allowances payable to customers in relation to sales
made until the end of the reporting period. The sales usually are made with a credit term of
30 days to 120 days. As the time interval between the transfer of committed goods or service
and the payment of customer does not exceed one year, the Group does not adjust the
transaction price to reflect the time value of money.
(c) The Group’s obligation to provide a refund for faulty products under the standard warranty
terms is recognised as a provision.
(d) A receivable is recognised when the goods are delivered as this is the point in time that the
consideration is unconditional because only the passage of time is required before the
payment is due.
B. Booth rental revenue
The Group held investment properties to earn rentals, and lease revenue is recognised on a
straight-line basis over the lease term.
C. Land development and resale
(a) The Group develops and sells residential properties. Revenue is recognised when control over
the property has been transferred to the customer. The properties have generally no alternative
use for the Group due to contractual restrictions. However, an enforceable right to payment
does not arise until legal title has passed to the customer. Therefore, revenue is recognised at
a point in time when the legal title has passed to the customer.
(b) The revenue is measured at an agreed upon amount under the contract. The consideration is
due when legal title has been transferred.
D. Hotel revenue
(a) The main services the Group provides are food services and accommodations.
(b) Food services revenue is recognised at a point in time when the products are sold to the
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customers and the payments are charged immediately. The Group’s sales policy offers
customers the rights of return within a certain time period. The estimate of sales return is
evaluated with expected method based on historical experiences at the time of sale, and
accumulated revenue the Group recognised shall not be reversed in the following years
according to historical experiences. The validity of this assumption and estimated amount of
returns are reassess at each reporting date.
E. Incremental costs of obtaining a contract
Given that the contractual period lasts less than one year, the Group recognises the incremental
costs of obtaining a contract as an expense when incurred although the Group expects to recover
those costs.
(33)Government grants
Government grants are recognised at their fair value only when there is reasonable assurance that
the Group will comply with any conditions attached to the grants and the grants will be received.
Government grants are recognised in profit or loss on a systematic basis over the periods in which
the Group recognises expenses for the related costs for which the grants are intended to compensate.
Government grants related to property, plant and equipment are recognised as non-current liabilities
and are amortised to profit or loss over the estimated useful lives of the related assets using the
straight-line method.
(34)Operating segments
Operating segments are reported in a manner consistent with the internal reporting provided to the
chief operating decision maker. The Group’s chief operating decision maker, who is responsible for
allocating resources and assessing performance of the operating segments, has been identified as the
Board of Directors that makes strategic decisions.
5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF
ASSUMPTION UNCERTAINTY
The preparation of these consolidated financial statements requires management to make critical
judgements in applying the Group’s accounting policies and make critical assumptions and estimates
concerning future events. Assumptions and estimates may differ from the actual results and are
continually evaluated and adjusted based on historical experience and other factors. Such assumptions
and estimates have a significant risk of causing a material adjustment to the carrying amounts of assets
and liabilities within the next financial year; and the related information is addressed below:
(1)Critical judgements in applying the Group’s accounting policies
Investment property
The Group uses a portion of the property for its own use and another portion to earn rentals or for
capital appreciation. When these portions cannot be sold separately and cannot be leased out
separately under a finance lease, the property is classified as investment property only if the own-use
portion accounts for an insignificant part of the property.
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(2)Critical accounting estimates and assumptions
A. Evaluation of inventories
As inventories are stated at the lower of cost and net realisable value, the Group must determine
the net realisable value of inventories on balance sheet date using judgements and estimates. Due
to the rapid technology innovation, the Group evaluates the amounts of normal inventory
consumption, obsolete inventories or inventories without market selling value on balance sheet
date, and writes down the cost of inventories to the net realisable value. Such an evaluation of
inventories is principally based on the demand for the products within the specified period in the
future. Therefore, there might be material changes to the evaluation.
As of December 31, 2018, the carrying amount of inventories was $7,896,031.
B. Investment property measured at fair value
The Group assesses the fair value of investment property based on the professional judgement of
appraiser, and determines the future cash flows of the investment property, discount rate and the
future possible income and expenses arising from the assets depending on how assets are utilised
and industrial characteristics. Any changes of economic circumstances or estimates due to the
change of Group strategy might cause material effect in the amount of investment property
measured at fair value.
As of December 31, 2018, the carrying amount of investment property was $65,426,212.
6. DETAILS OF SIGNIFICANT ACCOUNTS
(1)Cash and cash equivalents
A. The Group transacts with a variety of financial institutions all with high credit quality to disperse
credit risk, so it expects that the probability of counterparty default is remote.
B. Cash and cash equivalents amounting to $4,865,618 and $3,475,674 were pledged to others as
collateral, and were classified as other financial assets at amortised cost on December 31, 2018
and 2017, respectively.
December 31, 2018 December 31, 2017
Cash on hand and revolving funds 5,604$ 2,365$
Checking accounts and demand deposits 3,736,018 7,220,310
Time deposits 4,054,921 299,904
7,796,543$ 7,522,579$
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(2)Financial assets at fair value through profit or loss
A. Amounts recognised in profit or loss in relation to financial assets at fair value through profit or
loss are listed below:
B. The Group has no financial assets at fair value through profit or loss pledged to others.
C. Information relating to credit risk of financial assets at fair value through profit or loss is provided
in Note 12(3).
D. Information on financial assets at fair value through profit or loss as of December 31, 2017 is
provided in Note 12(4).
(3)Notes and accounts receivable
A. The ageing analysis of accounts receivable and notes receivable that were past due but not impaired
is as follows:
December 31, 2018
Current items:
Financial assets mandatorily measured at fair value through profit or loss
Listed stocks 977,886$
Beneficiary certificates 477,229
1,455,115
Valuation adjustment 132,125)(
1,322,990$
2018
Financial assets mandatorily measured at fair value through profit or loss
Equity instruments 192,845)($ Beneficiary certificates 229,362)(
422,207)($
December 31, 2018 December 31, 2017
Notes receivable $ - $ 1,127
December 31, 2018 December 31, 2017
Accounts receivable 1,679,433$ 2,009,050$
Accounts receivable - related parties 3,166 1,813
Less: Allowance for uncollectible accounts ( 55,572) ( 97,704)
$ 1,627,027 $ 1,913,159
Accounts receivable Notes receivable Accounts receivable Notes receivable
Not past due 1,022,099$ -$ 1,338,889$ 1,127$
Up to 30 days 474,839 - 440,458 -
31 to 90 days 89,944 - 78,355 -
91 to 180 days 32,332 - 32,805 -
Over 180 days 63,385 - 120,356 -
1,682,599$ -$ 2,010,863$ 1,127$
December 31, 2018 December 31, 2017
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The above ageing analysis was based on past due date.
B. The Group has no notes receivable or accounts receivable pledged to others.
C. As at December 31, 2018 and 2017, without taking into account any collateral held or other credit
enhancements, the maximum exposure to credit risk in respect of the amount that best represents
the Group’s notes and accounts receivable were $1,627,027 and $1,913,159, respectively.
D. The Group has taken out credit insurance on accounts receivable from some of the main clients.
The Group will get compensated based on the agreements.
E. Information relating to credit risk of accounts receivable and notes receivable is provided in Note
12(4).
(4)Inventories
Cost
Allowance for
valuation loss Book value
Raw materials 2,052,170$ (47,274)$ 2,004,896$
Work in progress 145,171 3,419)( 141,752
Finished goods 126,648 618)( 126,030
Merchandise inventory 36,988 - 36,988
Inventory in transit 2,942 - 2,942
2,363,919 51,311)( 2,312,608
Construction in progress 4,874,213 - 4,874,213
Buildings and land held for sale 747,333 38,123)( 709,210
5,621,546 38,123)( 5,583,423
$ 7,985,465 ($ 89,434) $ 7,896,031
December 31, 2018
Cost
Allowance for
valuation loss Book value
Raw materials 1,359,296$ (48,110)$ 1,311,186$
Work in progress 114,983 3,426)( 111,557
Finished goods 187,829 743)( 187,086
Merchandise inventory 9,355 - 9,355
Inventory in transit 45,077 - 45,077
1,716,540 52,279)( 1,664,261
Construction in progress 4,423,579 - 4,423,579
Buildings and land held for sale 1,468,557 60,526)( 1,408,031
5,892,136 60,526)( 5,831,610
$ 7,608,676 ($ 112,805) $ 7,495,871
December 31, 2017
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A. The cost of inventories recognised as expense for the years ended December 31, 2018and 2017,
was $14,515,709 and $16,098,384, respectively, including the amount of $22,389 that the Group
reversed from a previous inventory write-down and accounted for as reduction of cost of goods
sold due to the sales of building and land held for sale in 2018. In 2017, the Group wrote down
from cost to net realisable value accounted for as cost of goods sold.
B. The amount of capitalised borrowings cost for the years ended December 31, 2018 and 2017 was
$111,080 and $163,911, respectively, and the capitalised rate in 2018 and 2017 was 3.95%~5.94%
and 3.26%~6.72%, respectively.
C. As of December 31, 2018, inventories pledged are described in Note 8.
(5)Other current assets
(6)Investments accounted for using equity method
A. The basic information of the associates that are material to the Group is as follows:
December 31, 2018 December 31, 2017
Other receivables 242,716$ 309,045$
Other receivables - related parties 961,722 -
Other financial assets - 3,358,797
Other current assets 310,034 349,236
1,514,472$ 4,017,078$
December 31, 2018 December 31, 2017
Chicony Square (Wuhan) Inc. 2,482,777$ 2,528,016$
Chicony Square (Cayman) Inc. - -
Chicony Chengdu International Inc. 35,440 33,199
2,518,217$ 2,561,215$
Other non-current liabilities
December 31, 2018 December 31, 2017
Chicony Square (Cayman) Inc. 48,753$ 35,244$
Company name
Principal place
of business
Nature of
relationship
Method of
measurement
December
31, 2018
December
31, 2017
Chicony Square
(Wuhan) Inc.
China
(Note 2)
30%
(Note 4)
30%
(Note 4)
Significant
influence
associate
Equity method
Chicony Square
(Cayman) Inc.
China
(Note 3)
30% 30% Significant
influence
associate
Equity method
Chicony
Chengdu
International Inc.
China
(Note 2)
3.75%
(Note 1)
3.75%
(Note 1)
Significant
influence
associate
Equity method
Shareholding ratio
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Note 1: The Group held 30% of shares in these subsidiaries.
Note 2: The registration is British Virgin Islands, and the principal place of business is China.
Note 3: The registration is Cayman Islands, and the principal place of business is China.
Note 4: The board of directors of Chicony Square (Wuhan) INC. has resolved to disinvest and
return the capital to Chicony Square (Cayman) INC. Therefore, the shareholding ratio has
increased from 6.67% to 30%.
B. The summarised financial information of the associates that are material to the Group is as follows:
Balance sheet
December 31, 2018 December 31, 2017
Current assets 1,817,711$ 4,218,416$
Non-current assets 7,457,179 5,488,650
Current liabilities 9,989,644)( 1,280,345)(
Total net assets 714,754)($ 8,426,721$
Carrying amount of the associate 2,482,777$ 2,528,016$
Chicony Square (Wuhan) Inc.
December 31, 2018 December 31, 2017
Current assets 2,376$ 1,318,198$
Non-current assets 2,273,678 923,207
Current liabilities 129,914)( 130,335)(
Non-current liabilities 2,308,650)( 2,228,550)(
Total net assets 162,510)($ 117,480)($
Carrying amount of the associate 48,753)($ 35,244)($
Chicony Square (Cayman) Inc.
December 31, 2018 December 31, 2017
Current assets 33$ 32$
Non-current assets 945,023 885,268
Total net assets 945,056$ 885,300$
Carrying amount of the associate 35,440$ 33,199$
Chicony Chengdu International Inc.
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Statement of comprehensive income
Year ended December 31, 2018 Year ended December 31, 2017
Loss for the year from
continuing operations 887,046)($ 16,151)($
Other comprehensive
loss, net of tax 154,550)( 151,343)(
Total comprehensive loss1,041,596)($ 167,494)($
Chicony Square (Wuhan) Inc.
Year ended December 31, 2018 Year ended December 31, 2017
Loss for the year from
continuing operations 1,865)($ 1,349,804)($
Other comprehensive
(loss) income, net of tax 9,820)( 556,958
Total comprehensive loss11,685)($ 792,846)($
Chicony Square (Cayman) Inc.
Year ended December 31, 2018 Year ended December 31, 2017
Profit (loss) for the year
from continuing
operations 70,978$ 72,340)($
Other comprehensive
loss, net of tax 11,223)( 23,476)(
Total comprehensive
income (loss) 59,755$ 95,816)($
Chicony Chengdu International Inc.
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(7)Property, plant and equipment
Land
Buildings and
structures Machinery
Molding
equipment
Computers and
communication
equipment
Transportation
equipment
Office
equipment
Leasehold
improvements Others
Construction in
progress and
equipment to be
inspected Total
At January 1, 2018
Cost 186,563$ 1,421,798$ 338,697$ 14,688$ 107,701$ 52,598$ 175,550$ 124,628$ 51,987$ 6,934,525$ 9,408,735$
Accumulated depreciation - 444,760)( 141,902)( 4,094)( 72,135)( 38,997)( 103,420)( 114,728)( 13,842)( - 933,878)(
186,563$ 977,038$ 196,795$ 10,594$ 35,566$ 13,601$ 72,130$ 9,900$ 38,145$ 6,934,525$ 8,474,857$
2018
Opening net book amount
as at January 1 186,563$ 977,038$ 196,795$ 10,594$ 35,566$ 13,601$ 72,130$ 9,900$ 38,145$ 6,934,525$ 8,474,857$
Additions - - 99,372 - 12,387 2,365 19,936 - 7,904 1,088,628 1,230,592
Reclassifications - 1,434,351 351,562 - - - - - 45 1,241,008)( 544,950
Disposals - - 87)( - 6,909)( 1,212)( 1,181)( 2,657)( 908)( - 12,954)(
Depreciation charge - 66,182)( 51,826)( 2,897)( 13,561)( 2,508)( 14,330)( 1,131)( 1,687)( - 154,122)(
Effect of changes between
consolidation and entity
(Note) - - 13)( - 206)( - - - 19)( - 238)(
Net exchange differences - 11,369)( 2,709)( 145)( 328)( 904)( 1,119)( 601)( 626)( 95,119)( 112,920)(
Closing net book amount as
at December 31 186,563$ 2,333,838$ 593,094$ 7,552$ 26,949$ 11,342$ 75,436$ 5,511$ 42,854$ 6,687,026$ 9,970,165$
At December 31, 2018
Cost 186,563$ 2,851,422$ 783,110$ 14,487$ 99,556$ 46,106$ 187,216$ 124,842$ 58,751$ 6,687,026$ 11,039,079$
Accumulated depreciation - 517,584)( 190,016)( 6,935)( 72,607)( 34,764)( 111,780)( 119,331)( 15,897)( - 1,068,914)(
186,563$ 2,333,838$ 593,094$ 7,552$ 26,949$ 11,342$ 75,436$ 5,511$ 42,854$ 6,687,026$ 9,970,165$
Note: Refer Note 6(30) 2. to effect of changes between consolidation and entity.
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Land
Buildings and
structures Machinery
Molding
equipment
Computers and
communication
equipment
Transportation
equipment
Office
equipment
Leasehold
improvements Others
Construction in
progress and
equipment to be
inspected Total
At January 1, 2017
Cost 193,370$ 1,298,238$ 348,542$ 8,775$ 128,955$ 65,444$ 207,199$ 216,620$ 52,441$ 5,035,046$ 7,554,630$
Accumulated depreciation - 376,807)( 105,877)( 1,599)( 88,506)( 49,878)( 119,679)( 202,830)( 12,517)( - 957,693)(
193,370$ 921,431$ 242,665$ 7,176$ 40,449$ 15,566$ 87,520$ 13,790$ 39,924$ 5,035,046$ 6,596,937$
2018
Opening net book amount
as at January 1 193,370$ 921,431$ 242,665$ 7,176$ 40,449$ 15,566$ 87,520$ 13,790$ 39,924$ 5,035,046$ 6,596,937$
Additions - 159,003 6,176 6,102 13,831 3,775 4,526 2,398 3,724 860,691 1,060,226
Reclassifications 6,807)( 5,402)( - - - - - 5,201 1,152 1,157,777 1,151,921
Disposals - 470)( 92)( - 3,976)( 2,675)( 3,667)( 8,536)( 679)( - 20,095)(
Depreciation charge - 81,006)( 46,853)( 2,531)( 14,059)( 2,928)( 14,429)( 2,656)( 5,193)( - 169,655)(
Net exchange differences - 16,518)( 5,101)( 153)( 679)( 137)( 1,820)( 297)( 783)( 118,989)( 144,477)(
Closing net book amount as
at December 31 186,563$ 977,038$ 196,795$ 10,594$ 35,566$ 13,601$ 72,130$ 9,900$ 38,145$ 6,934,525$ 8,474,857$
At December 31, 2017
Cost 186,563$ 1,421,798$ 338,697$ 14,688$ 107,701$ 52,598$ 175,550$ 124,628$ 51,987$ 6,934,525$ 9,408,735$
Accumulated depreciation - 444,760)( 141,902)( 4,094)( 72,135)( 38,997)( 103,420)( 114,728)( 13,842)( - 933,878)(
186,563$ 977,038$ 196,795$ 10,594$ 35,566$ 13,601$ 72,130$ 9,900$ 38,145$ 6,934,525$ 8,474,857$
A. Refer Note 6(8) 4. to amount of borrowing costs capitalised as part of property, plant and equipment and the range of the interest rates.
B. The significant components of the Group’s buildings and structures, include main construction, steel structure and related equipment of underground mezzanine,
which are depreciated from 2 to 15 years.
C. Information about the property, plant and equipment that were pledged to others as collateral is provided in Note 8.
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(8)Investment property
Note: Refer Note 6(30) 2. to effect of changes between consolidation and entity.
A. Rental income from investment property and direct operating expenses arising from investment
property are shown below:
B. The measurement of investment property at fair value.
The fair value of the investment property held by the Group as at December 31, 2018 and 2017
was $65,426,212 and $69,922,175, respectively, which was valued by independent appraisers.
Valuations were made using the income approach which is categorised within Level 3 in the fair
value hierarchy. Key assumptions are as follows:
(a) Investment property is mainly divided into Taiwan-computer segment, China-Buynow plaza
and Japan-investment property. Currently, the lease terms of investment property for different
segments are: approximate 2 to 5 years of Taiwan-computer segment; 19 years (from 2007 to
2026) of Buynow (Changsha); 15 years (from 2007 to 2022) of Buynow (Nanchang); 20 years
(from 2008 to 2028) of Beijing Clevo Investment; 18 years (from 2016 to 2034) of Buynow
(Quanzhou); 10 years (from 2017 to 2027) of Suzhou Jinzuo; 15 years (from 2017 to 2023) of
Buynow (Huizhou); 2 years of Japan-investment property, and 1 year of remaining segments.
The comparison information between local rent and similar objective property rent is provided
in the ‘Summary of fair value disclosure on investment property’ (referred herein as “the
following table”).
(b) Movements of average occupancy rates in the prior year and earnings in prior years are
provided in the following table.
2018 2017
At January 1 $ 69,922,175 72,190,951$
Additions from subsequent expenditures 150,264 172,870
Disposals ( 3,864) 3,818)(
Reclassifications - 1,455,562)(
Effect of changes between consolidation
and entity (Note) ( 4,964,608) -
Net gains from fair value adjustment 913,763 682,125
Net exchange differences 591,518)( 1,664,391)(
At December 31 65,426,212$ 69,922,175$
Year ended
December 31, 2018
Year ended
December 31, 2017
Rental income from investment property 3,311,017$ 3,571,856$
Direct operating expenses arising from the investment
property that generated rental income during the year 1,092,985$ 1,173,778$
Direct operating expenses arising from the investment
property that did not generate rental income during the
year 131,369$ 197,345$
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(c) The Group adopts the discounted cash flow analysis under income approach. The estimation
process of the appraisal method is subject to the determination of the annual rent growth rate
range using the comparison information between local rent and similar objective property rent,
and takes into consideration vacancy loss to estimate net rent income over the next ten years
as future cash inflow and discounted to the date of appraisal with the discount rate described
in (d). In addition, considering the ending balance of disposal value of the objective property
is calculated based on the operating revenue over the next year starting from the disposal date
to estimate remaining lives of the use right at the disposal date, which will be capitalised based
on the estimated discount rate and annual rent growth rate as well as discounted to the appraisal
date. The market value is calculated based on the ending disposal value plus the present value
of rent for each period.
Future cash outflow consists expenses directly and necessarily related to leasing such as
related fees, utilities and promotion costs; and operating expenses necessarily related to
operations (i.e. repair expenses), taxes, insurance fees, and capital expenditures. The rates of
changes used in the estimation of future movements are in accordance with the rent growth
rate used in the imputed rent income.
(d) The information on the range of discount rates is provided in the following table. The discount
rates are determined to take into consideration the interest rate of time deposits or government
bonds, as well as the Group’s liquidity, risk, value-added and degree of difficulty of
management.
(e) The fair values of investment property under construction at the appraisal date and income
estimation process were first determined by considering the growth of rent income under the
forecast market conditions when the construction was completed, and were discounted using
expected rental growth rate and vacancy loss to the appraisal date with a 10-year estimation
period. Subsequently, the aforementioned discounted values reduced the necessary
engineering costs and expenses incurred from appraisal date to expected completion date plus
the discounted estimated salvage values.
(f) The appraisal reports adopted by the Group are co-certified by the real estate appraisers, Charlie
Yang and Jia-Hui Chen from Cushman & Wakefield Limited (referred herein as “Cushman &
Wakefield”) and Cushman & Wakefield Limited (HK). The appraisal dates are January 1, 2019
and 2018.
(g) The appraisal reports adopted by Japan-investment property of the Group are co-certified by
the real estate appraisers, Charlie Yang and Yoji Kawakami from Cushman & Wakefield
Limited and Cushman & Wakefield Limited (Japan). The appraisal dates are December 31,
2018 and 2017.
-220-
Summary of fair value disclosure on investment property:
C. The fair value information about the investment property is provided in Note 12(3).
D. Amount of borrowing costs capitalised as part of investment property and the range of the interest
rates for such capitalisation are as follows:
E. Information about the investment property that was pledged to others as collateral is provided in
Note 8.
2018 Computer segment Buynow plaza
Japan-investment
property
Comparison information
between local rent and similar
objective property rent
(dollar / square or square
meter / month)
$646~$682 $137~$5,597 $3,548~$4,094
Movements of earnings in the
prior year
$66,907 $29,711~$419,157 $22,498~$69,542
Average occupancy rates 100% 88% 98%
2017 Computer segment Buynow plaza
Japan-investment
property
The comparison information
between local rent and similar
objective property rent
(dollar / square or square
meter / month)
$570~$720 $135~$5,516 $3,255~$3,798
Movements of earnings in the
prior year
$70,251 $23,644~$370,446 $22,381~$67,569
Average occupancy rates 100% 82% 94%
Discount rate December 31, 2018 December 31, 2017
-Computer segment 3.65% 3.65%
-Buynow plaza 4.75%~6.75% 4.75%~6.75%
-Japan-investment property 3.8%~3.9% 3.8%~3.9%
Year ended
December 31, 2018
Year ended
December 31, 2017
Amount capitalised $397,441 $312,216
Range of the interest rates for capitalisation 3.95%~5.94% 3.26%~6.72%
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(9)Intangible assets
Goodwill arises from Buynow segment of the Group.
Software Goodwill Total
At January 1, 2018
Cost 20,214$ 10,828$ 31,042$
Accumulated amortisation and impairment - - -
20,214$ 10,828$ 31,042$
2018
At January 1 20,214$ 10,828$ 31,042$
Additions 2,158 - 2,158
Effect of changes between consolidation
and entity (Note) 65)( - 65)(
Amortisation charge 11,635)( - 11,635)(
Net exchange differences 40)( 149)( 189)(
December 31 10,632$ 10,679$ 21,311$
At December 31, 2018
Cost 10,632$ 10,679$ 21,311$
Accumulated amortisation and impairment - - -
10,632$ 10,679$ 21,311$
Note: Refer Note 6(30) 2. to effect of changes between consolidation and entity.
Software Goodwill Total
At January 1, 2017
Cost 27,646$ 11,066$ 38,712$
Accumulated amortisation and impairment - - -
27,646$ 11,066$ 38,712$
2018
At January 1 27,646$ 11,066$ 38,712$
Additions 7,973 - 7,973
Amortisation charge 15,026)( - 15,026)(
Net exchange differences 379)( 238)( 617)(
December 31 20,214$ 10,828$ 31,042$
At December 31, 2017
Cost 20,214$ 10,828$ 31,042$
Accumulated amortisation and impairment - - -
20,214$ 10,828$ 31,042$
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Details of amortisation on intangible assets are as follows:
(10)Long-term prepaid rents
A. Buynow (Xian), Guiyang Buynow, Yinkou Buynow, Anshan Buynow, Dezhou Buynow, Luoyang
Buynow, Shantow Buynow, Buynow (Jinzhou) and Kapok (Kunshan) acquired the land use right
respectively from their local government agencies for a period of 40 to 50 years. Except for the
land use right of Kapok (Kunshan) which is for factory land use (as of December 31, 2018, the
amount was $22,534), others are for shopping mall land use. The Group recognised amortisation
expense on long-term prepaid rent amounting to $7,295 and $11,069 for the years ended
December 31, 2018 and 2017, respectively.
B. Guiyang Buynow and Yinkou Buynow entered into the state-owned construction land use right
assignment contracts for the years ended December 31, 2014 and 2013 with their local
government agencies. The total consideration was RMB 327,101 of which RMB 306,538 was
paid and RMB 20,563 remains unpaid, as of December 31, 2018. As of December 31, 2018, the
transfer of property rights have not been completed.
(11)Short-term borrowings
Year ended
December 31, 2018
Year ended
December 31, 2017
Manufacturing costs $ 207 $ 831
Administrative expenses 7,617 10,218
Research and development expenses 3,811 3,977
$ 11,635 $ 15,026
December 31, 2018 December 31, 2017
Land use right 6,675,527$ 6,822,488$
Type of borrowings December 31, 2018 Interest rate range Collateral
Bank borrowings
Bank secured borrowings 419,119$ 5.00%~5.65% Letter of credit
Bank secured borrowings 206,650 3.55%~4.57% Long-term prepaid
rent and property,
plant and equipment
Bank secured borrowings 921,731 3.55%~5.65% Investment property
Bank secured borrowings 2,228,788 3.65%~4.75% Demand deposits
pledged
Bank unsecured borrowings 4,650,678 0.95%~4.90% Promised note
8,426,966$
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(12)Other current liabilities
In adopting IFRS 15, the Group has modified accounting items presented in the balance sheet, see
Note 12(5) for further information.
(13)Bonds payable
On August 12, 2015, Clevo Co. issued $5,000,000 secured bonds, as approved by the regulatory
authority. For the year ended December 31, 2018, the outstanding bonds payable was $5,000,000.
The terms of the secured bonds are as follows:
Type of borrowings December 31, 2017 Interest rate range Collateral
Bank borrowings
Bank secured borrowings 422,913$ 4.35%~5.23% Letter of credit
Bank secured borrowings 268,112 2.25%~2.46% Long-term prepaid
rent and property,
plant and equipment
Bank secured borrowings 952,344 2.25%~4.35% Investment property
Bank unsecured borrowings 4,578,103 0.85%~3.27% Promissory note
6,221,472$
December 31, 2018 December 31, 2017
Advance real estate receipts -$ 2,520,270$
Advance rental revenue 536,034 601,646
Advance sales receipts - 573,749
Other current liabilities 110,136 48,594
646,170$ 3,744,259$
December 31, 2018 December 31, 2017
Secured bonds payable 5,000,000$ 5,000,000$
Type
of Bonds Issuance date Period Amount Coupon rate Payment term Security
Secured bonds
payable
2015/8/28 5 years $5,000,000 Not
exceeding
fixed rate of
1.5%
Principal is due
at maturity.
Interest is paid
annually at
simple interest
rate.
Authorize
Taiwan
Cooperative
Bank to execute
corporate bond
guarantee
according to the
guarantee
agreement.
-224-
(14)Long-term borrowings
Type of
borrowings
Borrowing period
and repayment term Interest rate range Collateral
December 31,
2018
Unsecured
borrowings
Borrowing period is from September 28, 2018
to March 16, 2023; interest is payable monthly,
principal is payable at maturity date
0.91%~1.40% Promissory note 7,655,000$
Unsecured
borrowings
Borrowing period is from December 28, 2018
to December 28, 2023; interest is payable
monthly, principal is payable at maturity date
1.309%~1.797% Promissory note 6,000,000
Unsecured
borrowings
Borrowing period is from June 29, 2015 to
November 20, 2020; interest is payable
quarterly, principal is payable at maturity date
3.14%~4.27% Promissory note 3,088,190
-
16,743,190
Secured
borrowings
Borrowing period is from March 20, 2018 to
March 20, 2023; interest is payable monthly,
principal is payable at maturity date
1.33% Property, plant and
equipment and
investment property
1,250,000
Secured
borrowings
Borrowing period is from July 27, 2016 to July
27, 2021; interest is payable monthly, principal
is payable at maturity date
1.6%~6.72% Investment property 2,510,975
Secured
borrowings
Borrowing period is from March 30, 2009 to
June 8, 2025; interest is payable monthly,
principal is payable at maturity date
1.6%~5.9% Investment property 6,123,268
Secured
borrowings
Borrowing period is from December 1, 2014 to
December 1, 2019; interest is payable monthly,
principal at maturity date
5.58% Investment property
and inventories
136,514
Secured
borrowings
Borrowing period is from June 14, 2017 to June
7, 2022; interest is payable monthly, principal
is payable at maturity date
5.13%~5.94% Letter of credit 781,704
Secured
borrowings
Borrowing period is from November 6, 2014 to
November 4, 2021; interest is payable quarterly,
principal is payable at maturity date
0.58%~5.94% Investment property 2,700,102
Secured
borrowings
Borrowing period is from April 23, 2009 to
October 17, 2027; interest is payable quarterly,
principal is payable at maturity date
4.90%~6.93% Investment property 4,338,729
-
17,841,292
34,584,482
2,747,011)(
31,837,471$
Less: Current portion of long-term loans
-225-
Type of
borrowings
Borrowing period
and repayment term Interest rate range Collateral
December 31,
2017
Unsecured
borrowings
Borrowing period is from July 22, 2015 to May
8, 2020; interest is payable monthly, principal is
payable at maturity date
1.33%~1.40% Promissory note 4,650,000$
Unsecured
borrowings
Borrowing period is from June 30, 2014 to June
28, 2019; interest is payable monthly, principal
is payable at maturity date
1.36%~1.80% Promissory note 4,660,000
Unsecured
borrowings
Borrowing period is from June 29, 2015 to June
28, 2020; interest is payable quarterly, principal
is payable at maturity date
2.41%~3.04% Promissory note 3,203,150
-
12,513,150
Secured
borrowings
Borrowing period is from November 18, 2014
to November 18, 2018; interest is payable
monthly, principal is payable at maturity date
1.34% Property, plant
and equipment
and investment
property
1,010,000
Secured
borrowings
Borrowing period is from September 23, 2015
to July 27, 2021; interest is payable monthly,
principal is payable at maturity date
1.00%~5.13% Investment
property
2,452,786
Secured
borrowings
Borrowing period is from March 30, 2009 to
June 8, 2025; interest is payable monthly,
principal is payable at maturity date
1.60%~5.64% Investment
property
11,318,760
Secured
borrowings
Borrowing period is from December 1, 2014 to
December 1, 2019; interest is payable monthly,
principal is payable at maturity date
5.58% Investment
property and
inventories
230,687
Secured
borrowings
Borrowing period is from June 14, 2017 to June
7, 2022; interest is payable monthly, principal is
payable at maturity date
5.13%~5.94% Letter of credit 811,798
Secured
borrowings
Borrowing period is from November 6, 2014 to
November 4, 2021; interest is payable quarterly,
principal is payable at maturity date
0.58%~5.94% Investment
property
2,725,849
Secured
borrowings
Borrowing period is from April 23, 2009 to
October 17, 2027; interest is payable quarterly,
principal is payable at maturity date
4.51%~6.50% Investment
property
4,137,963
Secured
borrowings
Borrowing period is from August 6, 2015 to
August 6, 2018; interest is payable quarterly,
principal is payable at maturity date
3.26% Demand
deposits pledged
204,636
-
22,892,479
35,405,629
7,352,876)(
28,052,753$
Less: Current portion of long-term loans
-226-
(15)Pensions
A. Defined benefit pension plans
(a) The Company has a defined benefit pension plan in accordance with the Labor Standards Act,
covering all regular employees’ service years prior to the enforcement of the Labor Pension
Act on July 1, 2005 and service years thereafter of employees who chose to continue to be
subject to the pension mechanism under the Act. Under the defined benefit pension plan, two
units are accrued for each year of service for the first 15 years and one unit for each additional
year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number
of units accrued and the average monthly salaries and wages of the last 6 months prior to
retirement. The Company contributes monthly an amount equal to 2% of the employees’
monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee,
under the name of the independent retirement fund committee. Also, the Company would
assess the balance in the aforementioned labor pension reserve account by December 31,
every year. If the account balance is insufficient to pay the pension calculated by the
aforementioned method to the employees expected to qualify for retirement in the following
year, the Company will make contributions for the deficit by next March.
(b) The amounts recognised in the balance sheet are as follows:
December 31, 2018 December 31, 2017
Present value of defined benefit obligations 398,118$ 386,348$
Fair value of plan assets 313,572)( 298,507)(
Net defined benefit liability 84,546$ 87,841$
-227-
(c) Movements in net defined benefit liabilities are as follows:
Present value of
defined benefit
obligations
Fair value of
plan
assets
Net defined
benefit liability
Year ended December 31, 2018
Balance at January 1 386,348$ 298,507)($ 87,841$
Current service cost 837 - 837
Interest expense (income) 5,370 4,150)( 1,220
392,555 302,657)( 89,898
Remeasurements:
Return on plan assets
(excluding amounts included in interest
income or expense)
Change in demographic assumptions 220 - 220
Change in financial assumptions 16,328 - 16,328
Experience adjustments 2,210)( 7,753)( 9,963)(
14,338 7,753)( 6,585
Pension fund contribution - 11,937)( 11,937)(
Paid pension 8,775)( 8,775 -
Balance at December 31 398,118$ 313,572)($ 84,546$
Present value of
defined benefit
obligations
Fair value of
plan
assets
Net defined
benefit liability
Year ended December 31, 2017
Balance at January 1 384,147$ 287,132)($ 97,015$
Current service cost 1,075 - 1,075
Interest expense (income) 5,762 4,307)( 1,455
390,984 291,439)( 99,545
Remeasurements:
Return on plan assets
(excluding amounts included in interest
income or expense)
Change in demographic assumptions 309)( - 309)(
Change in financial assumptions 6,051 - 6,051
Experience adjustments 2,120)( 1,324 796)(
3,622 1,324 4,946
Pension fund contribution - 16,650)( 16,650)(
Paid pension 8,258)( 8,258 -
Balance at December 31 386,348$ 298,507)($ 87,841$
-228-
(d) The Bank of Taiwan was commissioned to manage the Fund of the Company’s defined benefit
pension plan in accordance with the Fund’s annual investment and utilisation plan and the
“Regulations for Revenues, Expenditures, Safeguard and Utilisation of the Labor Retirement
Fund” (Article 6: The scope of utilisation for the Fund includes deposit in domestic or foreign
financial institutions, investment in domestic or foreign listed, over-the-counter, or private
placement equity securities, investment in domestic or foreign real estate securitization
products, etc.). With regard to the utilisation of the Fund, its minimum earnings in the annual
distributions on the final financial statements shall be no less than the earnings attainable
from the amounts accrued from two-year time deposits with the interest rates offered by local
banks. If the earnings is less than aforementioned rates, government shall make payment for
the deficit after being authorized by the Regulator. The Company has no right to participate
in managing and operating that fund and hence the Company is unable to disclose the
classification of plan assets fair value in accordance with IAS 19 paragraph 142. The
composition of fair value of plan assets as of December 31, 2018 and 2017 is given in the
Annual Labor Retirement Fund Utilisation Report announced by the government.
(e) The principal actuarial assumptions used were as follows:
Future mortality rate was estimated based on 90% of the 5th Taiwan Standard Ordinary
Experience Mortality Table in accordance with published statistics and experience in each
territory.
Because the main actuarial assumption changed, the present value of defined benefit
obligation is affected. The analysis was as follows:
The sensitivity analysis above is based on one assumption which changed while the other
conditions remain unchanged. In practice, more than one assumption may change all at once.
The method of analysing sensitivity and the method of calculating net pension liability in the
Year ended
December 31, 2018
Year ended
December 31, 2017
Discount rate 1.08% 1.39%
Future salary increases 2.50% 2.50%
Return rate on plan assets 1.08% 1.39%
Increase 0.5% Decrease 0.5% Increase 0.5% Decrease 0.5%
December 31, 2018
Effect on present value of
defined benefit obligation 25,931)($ 28,250$ 27,701$ 25,707)($
December 31, 2017
Effect on present value of
defined benefit obligation 26,501)($ 29,045$ 28,571$ 26,354)($
Discount rate Future salary increases
-229-
balance sheet are the same.
(f) Expected contributions to the defined benefit pension plans of the Group for the year ending
December 31, 2019 amount to $11,937.
(g) As of December 31, 2018, the weighted average duration of the retirement plan is 14 years.
The analysis of timing of the future pension payment was as follows:
B. Defined contribution plans
(a) Effective July 1, 2005, the Company has established a defined contribution pension plan (the
“New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with
R.O.C. nationality. Under the New Plan, the Company and its domestic subsidiaries
contribute monthly an amount based on 6% of the employees’ monthly salaries and wages to
the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits
accrued are paid monthly or in lump sum upon termination of employment.
(b) The Company’s China subsidiaries have a defined contribution plan. Monthly contributions
to an independent fund administered by the government in accordance with the pension
regulations in the People’s Republic of China (PRC) are based on certain percentage of
employees’ monthly salaries and wages. Other than the monthly contributions, the Group has
no further obligations.
(c) The pension costs under the defined contribution pension plans of the Group for the years
ended December 31, 2018 and 2017, were $35,687 and $33,609, respectively.
(16)Provisions
Analysis of total provisions:
The Group provides warranties on computer products sold. Provision for warranty is estimated based
on historical warranty data of computer products.
Within 2 years 227,933$
2-5 years 95,676
Over 5 years 44,456
368,065$
Warranty
At January 1, 2018 50,523$
Additional provisions 57,316
Used during the year 57,316)(
At December 31, 2018 50,523$
December 31, 2018 December 31, 2017
Current 50,523$ 52,523$
-230-
(17)Share capital
A. As of December 31, 2018, the Company’s authorized capital was $7,500,000, consisting of 750
million shares of ordinary stock, and the paid-in capital was $6,797,630 consisting of 679,763
thousand shares with a par value of $10 (in dollars) per share. On June 15, 2012, the Board of
Directors resolved to increase the Company’s authorized capital in the articles of incorporation
to $9,000,000, consisting of 900 million shares of ordinary stock, with a par value of $10 (in
dollars) per share. The foregoing includes 20 million shares reserved for employee stock options
with a par value of $10 (in dollars) per share, which the Board of Directors are authorized to
issue depending on actual demand.
Movements in the number of the Company’s ordinary shares outstanding are as follows:
B. Treasury shares
(a) Reason for share reacquisition and movements in the number of the Company’s treasury
shares are as follows:
(b) Pursuant to the R.O.C. Securities and Exchange Act, the number of shares bought back as
treasury share should not exceed 10% of the number of the Company’s issued and
outstanding shares and the amount bought back should not exceed the sum of retained
earnings, paid-in capital in excess of par value and realised capital surplus.
2018 2017
At January 1 683,163 683,163
Capital reduction by treasury stock
retired
( 3,400) -
At December 31 679,763 683,163
Name of company holding
the shares Reason for reacquisition
Number of
shares Carrying amount
The Company To be reissued to
employees
35,300 thousand $ 1,079,740
Subsidiary-Kapok
Computer
Long-term investment 16,966 thousand 95,305
Subsidiary-Clevo
Investment
Long-term investment 10,081 thousand 108,183
December 31, 2018
Name of company holding
the shares Reason for reacquisition
Number of
shares Carrying amount
The Company To be reissued to
employees
13,400 thousand $ 421,858
Subsidiary-Kapok
Computer
Long-term investment 16,966 thousand 95,305
Subsidiary-Clevo
Investment
Long-term investment 10,081 thousand 108,183
December 31, 2017
-231-
(c) Pursuant to the R.O.C. Securities and Exchange Act, treasury shares should not be pledged as
collateral and is not entitled to dividends before it is reissued.
(d) Pursuant to the R.O.C. Securities and Exchange Act, treasury shares should be reissued to the
employees within three years from the reacquisition date and shares not reissued within the
three-year period are to be retired. Treasury shares to enhance the Company’s credit rating
and the stockholders’ equity should be retired within six months of acquisition.
(18)Capital surplus
Pursuant to the R.O.C. Company Act, capital surplus arising from paid-in capital in excess of par
value on issuance of common stocks and donations can be used to cover accumulated deficit or to
issue new stocks or cash to shareholders in proportion to their share ownership, provided that the
Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Act requires that
the amount of capital surplus to be capitalised mentioned above should not exceed 10% of the paid-
in capital each year. Capital surplus should not be used to cover accumulated deficit unless the legal
reserve is insufficient.
(19)Retained earnings
A. Under the Company’s Articles of Incorporation, the current year’s earnings, if any, shall first be
used to pay all taxes and offset prior years’ operating losses and then 10% of the remaining
amount shall be set aside as legal reserve. However, when the legal reserve amounts to the
authorized capital, this shall not apply. According to the law or the authority, the special surplus
reserve shall be set or reversed. If there is still surplus, the Board of Directors shall draft the
allocation resolved by the shareholders' meeting.
B. The Company belongs to high tech and electronics industry and As the Company operates in a
volatile business environment and is in the stable growth stage, the residual dividend policy is
adopted taking into consideration the Company’s financial structure, operating results and future
expansion plans, based on vision of industrial development, capital expenditure demand, sound
financial plan and protect the right and interests of investors. According to the dividend policy,
cash dividends shall account for at least 10% of the total dividends distributed.
C. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in
proportion to their share ownership, the legal reserve shall not be used for any other purpose.
The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their
share ownership is permitted, provided that the distribution of the reserve is limited to the portion
in excess of 25% of the Company’s paid-in capital.
D. Special reserve
(a) In accordance with the regulations, the Company shall set aside special reserve from the debit
balance on other equity items at the balance sheet date before distributing earnings. When
debit balance on other equity items is reversed subsequently, the reversed amount could be
included in the distributable earnings.
(b) The amounts previously set aside by the Company as special reserve on initial application of
-232-
IFRSs in accordance with Jin-Guan-Zheng-Fa-Zi Letter No. 1010012865, dated April 6, 2012,
shall be reversed proportionately when the relevant assets are used, disposed of or reclassified
subsequently.
(c) According to Jin-Guan-Zheng-Fa-Zi Letter No.1030006415, dated March 18, 2014,
investment properties are initially and subsequently measured using fair value model.
Changes of value due to appreciation as of December 31, 2013 are reflected on the increase
of Appropriated Retained Earnings. The Company will recognise the reversal of Earnings if
subsequently disposes or decreases the investment properties.
E. The appropriations of 2017 and 2016 earnings had been resolved at the stockholders’ meeting on
June 15, 2018 and June 15, 2017, respectively. Details are summarised below:
The Company appropriated cash from capital surplus as resolved by the stockholders during their
meeting on June 15, 2018. The dividends per share is NTD0.8, and the total amount is $546,530.
The above appropriations of 2017 and 2016 earnings are the same with those approved by the
Board of Directors.
F. The appropriations of the 2018 net income was resolved by the Board of Directors during its
meeting on March 27, 2019 as follows:
The Company appropriated cash from capital surplus as resolved by the Board of Directors during
its meeting on March 27, 2019. The dividends per share is NTD 0.8, and the total amount is
$513,810.
F. For the information relating to employees’ compensation (bonuses) and directors’ and supervisors’
remuneration, please refer to Note 6(26).
Amount
Dividends per share
(in dollars) Amount
Dividends per share
(in dollars)
Legal reserve 71,778$ 59,482$
Special reserve 1,008,166 201,696
Cash dividends - -$ 478,214 0.70$
1,079,944$ 739,392$
2017 2016
Amount
Dividends per share
(in dollars)
Legal reserve 145,490$
Special reserve 1,194,446
Cash dividends 128,453 0.20$
1,468,389$
2018
-233-
(20)Other equity items
(21)Operating revenue
Available-for-
sale investment
Currency
translation Revaluation Total
At January 1 97,879$ 2,138,991)($ 20,922$ 2,020,190)($
Effect of retrospective application
and retrospective restatement
97,879)( - - 97,879)(
Currency translation differences:
–Group - 545,271)( - 545,271)(
–Tax on Group - 17,600)( - 17,600)(
–Associates - 49,680)( - 49,680)(
–Tax on associates - 9,937 - 9,937
At December 31 -$ 2,741,605)($ 20,922$ 2,720,683)($
2018
Available-for-
sale investment
Currency
translation Revaluation Total
At January 1 157,857$ 916,916)($ -$ 759,059)($
Revaluation 59,978)( - - 59,978)(
Currency translation differences:
–Group - 1,322,879)( - 1,322,879)(
–Tax on Group - 7,047 - 7,047
–Associates - 112,960 - 112,960
–Tax on associates - 19,203)( - 19,203)(
Revaluation:
–Group - - 25,207 25,207
–Tax on Group - - 4,285)( 4,285)(
At December 31 97,879$ 2,138,991)($ 20,922$ 2,020,190)($
2017
Year ended
December 31, 2018
Revenue from contracts with customers
-Sales revenue of computer products 14,568,469$
-Land development and resale 924,514
-Hotel revenue 99,349
-Other revenue 483,733
Others-rental revenue 3,720,007
19,796,072$
-234-
A. Disaggregation of revenue from contracts with customers
The Group derives revenue from the transfer of goods over time and at a point in time in the
following major product lines and geographical regions:
B. Contract assets and liabilities
The Group has recognised the following revenue-related contract assets and liabilities:
C. Revenue recognised that was included in the contract liability balance at the beginning of the
year
D. Related disclosures on operating revenue for 2017 are provided in Note 12(5).
Computer
segment
2018
Computer
products
Land development
and resale
Hotel
revenue Others
Total segment
revenue
25,425,143$ 924,514$ 99,349$ 483,733$ 26,932,739$
Inter-segment
revenue 10,856,674)( - - - 10,856,674)(
Revenue from
external customer
contracts 14,568,469$ 924,514$ 99,349$ 483,733$ 16,076,065$
Timing of revenue
recognition
At a point in time 14,568,469$ 924,514$ -$ 483,733$ 15,976,716$
Over time - - 99,349 - 99,349
14,568,469$ 924,514$ 99,349$ 483,733$ 16,076,065$
Total
Buynow plaza
December 31, 2018
Contract liabilities:
Contract liabilities – Advance sales receipts 31,316$
Contract liabilities – Advance real estate receipts 3,114,721
3,146,037$
Year ended
December 31,2018
Revenue recognised that was included in the contract liability
balance at the beginning of the year
Advance sales receipts 336,165$
Advance real estate receipts 538,338
874,503$
-235-
(22)Other income
(23)Other gains and losses
(24)Finance costs
Year ended
December 31, 2018
Year ended
December 31, 2017
Interest income:
Interest income from bank deposits 130,921$ 85,274$
Rent income 64,491 61,159
Dividend income 33,114 45,386
Other income 387,669 429,179
616,195$ 620,998$
Year ended
December 31, 2018
Year ended
December 31, 2017
Losses on disposals of property, plant and
equipment 1,490)($ 3,508)($
Gains (losses) on disposals of investments 16,599)( 114,666
Gains on disposals of subsidiary 944,976 -
Foreign exchange gains (losses) 209,160)( 98,430)(
Gains (losses) on financial assets (liabilities)
at fair value through profit or loss 405,608)( 198,520
Gains (losses) on fair value adjustment,
investment property 913,763 682,125
Other losses 50,915)( 144,882)(
1,174,967$ 748,491$
Year ended
December 31, 2018
Year ended
December 31, 2017
Interest expense:
Interest excpense from bank borrowing 1,386,848$ 1,511,670$
Less: Capitalisation of qualifying assets 508,521)( 476,127)(
Financial costs 878,327$ 1,035,543$
-236-
(25)Expenses by nature
(26)Employee benefit expense
A. In accordance with the Articles of Incorporation of the Company, a ratio of distributable profit of
the current year, shall be distributed as employees ‘compensation and directors’ and supervisors’
remuneration. The ratio shall be 5%~15% for employees’ compensation and shall not be higher
than 1% for directors’ and supervisors’ remuneration.
B. For the years ended December 31, 2018 and 2017, employees’ compensation was accrued at
$95,600 and $65,700, respectively; while directors’ and supervisors’ remuneration was accrued
at $12,300 and $9,300, respectively. The aforementioned amounts were recognised in salary
expenses.
The employees’ compensation and directors’ and supervisors’ remuneration were estimated and
accrued based on 5%~15% and not higher than 1% of distributable profit of current year for the
year ended December 31, 2018. The employees’ compensation and directors’ and supervisors’
remuneration as resolved by the Board of Directors were in agreement with those amounts
recognised in the 2018 financial statements, and the employees’ compensation will be distributed
in the form of cash.
Employees’ compensation and directors’ and supervisors’ remuneration for 2017 as resolved by
the Board of Directors were in agreement with those amounts recognised in the 2017 financial
statements.
Information about employees’ compensation and directors’ and supervisors’ remuneration of the
Company as resolved by the Board of Directors will be posted in the “Market Observation Post
System” at the website of the Taiwan Stock Exchange.
Year ended
December 31, 2018
Year ended
December 31, 2017
Employee benefit expense 2,351,030 2,426,250
Depreciation charges on property, plant and
equipment 154,122 169,655
Amortisation charges on intangible assets 11,635 15,026
Amortisation charges on long-term prepaid
rent 7,295 11,069
2,524,082$ 2,622,000$
Year ended
December 31, 2018
Year ended
December 31, 2017
Wages and salaries 1,873,840$ 1,967,080$
Labour and health insurance fees 57,483 58,123
Pension costs 37,744 36,139
Other personnel expenses 381,963 364,908
2,351,030$ 2,426,250$
-237-
(27)Income tax
A. Income tax expense
(a) Components of income tax expense:
(b) The income tax (charge)/credit relating to components of other comprehensive income is as
follows:
Year ended
December 31, 2018
Year ended
December 31, 2017
Current tax:
Current tax on profits for the year 799,712$ 315,281$
Prior year income tax underestimation 9,839 17,162
Total current tax 809,551 332,443
Deferred tax:
Origination and reversal of temporary
differences 18,365 449,855
Impact of change in tax rate 71,400 -
Total deferred tax 89,765 449,855
Income tax expense 899,316$ 782,298$
Year ended
December 31, 2018
Year ended
December 31, 2017
Currency translation differences ( 7,663) ( 12,156)
Remeasurement of defined benefit obligations 1,317 841
Increase in revaluation - ( 4,285)
($ 6,346) ($ 15,600)
-238-
B. Reconciliation between income tax expense and accounting profit
C. Amounts of deferred tax assets or liabilities as a result of temporary differences and tax losses
are as follows:
Year ended
December 31, 2018
Year ended
December 31, 2017
Tax calculated based on profit before
tax and statutory tax rate 922,660$ 448,707$
Temporary differences not recognised
as deferred tax assets (326,640) (188,694)
Tax exempt loss by tax regulation 19,533 -
Effect from expenses disallowed by tax
regulation 38,022 208,956
Taxable loss not recognised as deferred
tax assets 153,751 230,778
Effect from taxable loss 10,751 65,389
Prior year income tax underestimation 9,839 17,162
Effect from changes in tax regulation 71,400 -
Income tax expense 899,316$ 782,298$
-239-
January 1
Recognised
in profit or
loss
Recognised
in other
comprehensive
income
Translation
differences December 31
Deferred tax assets:
Temporary differences:
Unrealised exchange losses 875$ -$ -$ -$ 875$
Unrealised sales gain 268 268)( - - -
Allowance for bad debts 19,840 6,469)( - - 13,371
Allowance for spare
valuation losses 1,298 228 - - 1,526
Allowance for inventory
valuation losses 1,991 269 - - 2,260
Unused compensated
absences 4,341 724 - - 5,065
Rent by straight-line method 75,502 624)( - - 74,878
Accrued pension liability 14,934 659 1,317 - 16,910
Currency translation differences 185 - (185) - -
Tax losses 88,375 10,751 - - 99,126
207,609 5,270 1,132 - 214,011
Deferred tax liabilities:
Temporary differences:
Unrealised exchange gain 26,734)($ 14,019$ -$ -$ 12,715)($
Foreign investment income
using equity method (485,759) (84,124) - - (569,883)
Difference from
amortisation of long-term
prepaid rent (9,680) 1,616 - - (8,064)
Rent by straight-line method (80,070) (8,024) - - (88,094)
Unrealised sales losses - 13 - - 13
Other operating revenue 101 (769) - - (668)
Currency translation differences (5,906) - (7,478) - (13,384)
Increase in revaluation (4,285) - - - (4,285)
Fair value adjustment, investment
property (11,831,910) (17,766) - 166,332 (11,683,344)
12,444,243)( 95,035)( 7,478)( 166,332 12,380,424)(
12,236,634)($ 89,765)($ 6,346)($ 166,332$ 12,166,413)($
2018
-240-
January 1
Recognised
in profit or
loss
Recognised
in other
comprehensive
income
Translation
differences December 31
Deferred tax assets:
Temporary differences:
Unrealised exchange losses 24,636$ 23,761)($ -$ -$ 875$
Unrealised sales gain - 268 - - 268
Allowance for bad debts 19,400 440 - - 19,840
Allowance for spare
valuation losses 2,421 1,123)( - - 1,298
Allowance for inventory
valuation losses 1,854 137 - - 1,991
Unused compensated
absences 2,542 1,799 - - 4,341
Rent by straight-line method 62,353 13,149 - - 75,502
Accrued pension liability 16,493 (2,400) 841 - 14,934
Currency translation differences 13,297 - (13,112) - 185
Tax losses 22,986 65,389 - - 88,375
165,982 53,898 (12,271) - 207,609
Deferred tax liabilities:
Temporary differences:
Unrealised exchange gain 906)($ 25,828)($ -$ -$ 26,734)($
Foreign investment income
using equity method (337,740) (148,019) - - (485,759)
Difference from
amortisation of long-term
prepaid rent (9,448) (232) - - (9,680)
Rent by straight-line method (71,887) (8,183) - - (80,070)
Unrealised sales losses (196) 196 - - -
Other operating revenue (92) 193 - - 101
Currency translation differences (6,862) - 956 - (5,906)
Increase in revaluation - - (4,285) - (4,285)
Fair value adjustment, investment
property (11,755,014) (321,880) - 244,984 (11,831,910)
12,182,145)( 503,753)( 3,329)( 244,984 12,444,243)(
12,016,163)($ 449,855)($ 15,600)($ 244,984$ 12,236,634)($
2017
-241-
D. Expiration dates of unused tax losses and amounts of unrecognised deferred tax assets are as
follows:
E. Expiration dates of unused tax losses and amounts of unrecognised deferred tax assets from the
Company’s subsidiaries are as follows:
F. The amounts of deductible temporary differences that were not recognised as deferred tax assets
are as follows:
Year incurred
Amount filed/
assessed Unused amount
Unrecognised
deferred tax assets Expiry year
2016 156,511$ 129,493$ -$ 2026
2017 898,310 898,310 447,143 2027
December 31, 2018
Year incurred
Amount filed/
assessed Unused amount
Unrecognised
deferred tax assets Expiry year
2016 140,363$ 140,363$ -$ 2026
2017 847,650 847,650 463,013 2027
December 31, 2017
Year incurred
Amount filed/
assessed Unused amount
Unrecognised
deferred tax assets Expiry year
2014 469,812$ 469,812$ 469,812$ 2019
2015 433,899 433,899 433,899 2020
2016 491,057 491,057 491,057 2021
2017 855,496 855,496 855,496 2022
2018 615,003 615,003 615,003 2023
2,865,267$ 2,865,267$ 2,865,267$
December 31, 2018
Year incurred
Amount filed/
assessed Unused amount
Unrecognised
deferred tax assets Expiry year
2013 294,334$ 294,334$ 294,334$ 2018
2014 620,387 620,387 620,387 2019
2015 690,695 690,695 690,695 2020
2016 557,074 557,074 557,074 2021
2017 923,110 923,110 923,110 2022
3,085,600$ 3,085,600$ 3,085,600$
December 31, 2017
December 31, 2018 December 31, 2017
Deductible temporary differences 45,880$ 37,344$
-242-
G. The Company has not recognised taxable temporary differences associated with investment in
subsidiaries as deferred tax liabilities. As of December 31, 2018 and 2017, the temporary
differences unrecognised as deferred tax liabilities were $1,633,198 and $754,777, respectively.
H. The Company’s income tax returns through 2016 have been assessed and approved by the Tax
Authority.
K. Under the amendments to the Income Tax Act which was promulgated by the President of the
Republic of China in February, 2018, the Company’s applicable income tax rate was raised from
17% to 20% effective from January 1, 2018. The Group has assessed the impact of the change in
income tax rate.
(28)Earnings per share
Weighted average
number of ordinary
shares outstanding
Earnings per
share
Amount after tax (shares in thousands) (in dollars)
Basic earnings per share
Profit attributable to ordinary
shareholders of the parent 1,454,904$ 628,146 2.32$
Diluted earnings per share
Profit attributable to ordinary
shareholders of the parent 1,454,904 628,146
Assumed conversion of all dilutive
potential ordinary shares
Employees’ bonus - 4,087
Profit attributable to ordinary
shareholders of the parent plus
assumed conversion of all dilutive
potential ordinary shares 1,454,904$ 632,233 2.30$
Year ended December 31, 2018
-243-
(29)Operating leases
A. The Group leases investment property to others under non-cancellable operating lease
agreements. These leases have terms expiring between 2007 and 2028, and all these lease
agreements are not renewable at the end of the lease period. The future aggregate minimum lease
payments receivable under non-cancellable operating leases are as follows:
B. The Group leases malls under non-cancellable operating lease agreements. These leases have
terms expiring between 2007 and 2028, and all these lease agreements are renewable at the end
of the lease period. Rental is increased irregularly to reflect market rental rates. Partial leases are
charged extra rents following the changes of local price indexes. The Group recognised rental
expenses of $159,473 and $164,516 for these leases in profit or loss for the years ended
December 31, 2018 and 2017, respectively. The future aggregate minimum lease payments under
non-cancellable operating leases are as follows:
Weighted average
number of ordinary
shares outstanding
Earnings per
share
Amount after tax (shares in thousands) (in dollars)
Basic earnings per share
Profit attributable to ordinary
shareholders of the parent 717,784$ 642,716 1.12$
Diluted earnings per share
Profit attributable to ordinary
shareholders of the parent 717,784 642,716
Assumed conversion of all dilutive
potential ordinary shares
Employees’ bonus - 2,549
Profit attributable to ordinary
shareholders of the parent plus
assumed conversion of all dilutive
potential ordinary shares 717,784$ 645,265 1.11$
Year ended December 31, 2017
December 31, 2018 December 31, 2017
Not later than one year 438,333$ 413,349$
Later than one year but not later than five
years 1,454,122 1,646,560
Later than five years 1,657,993 1,971,461
3,550,448$ 4,031,370$
-244-
(30)Supplemental cash flow information
A. Investing activities with partial cash payments
December 31, 2018 December 31, 2017
Not later than one year 179,403$ 181,898$
Later than one year but not later than five
years 179,403 363,798
358,806$ 545,696$
Year ended
December 31, 2018
Year ended
December 31, 2017
Purchase of property, plant and
equipment 1,230,592$ 1,060,226$
Add: Opening balance of other payable - 5,481
Add: Ending balance of prepayment - 1,125
Less: Ending balance of other payable - -
Less: Opening balance of prepayment 1,125)( 3,900)(
Less: Capitalisation of interest 290,934)( 218,482)(
Cash paid during the year 938,533$ 844,450$
Purchase of investment property 150,264$ 172,870$
Add: Opening balance of payable 1,169,114 1,184,983
Less: Ending balance of payable 1,077,057)( 1,169,114)(
Less: Effect of changes between
consolidation and entity 43,592 -
Cash paid during the year 285,913$ 188,739$
Disposal of available-for-sale financial
assets -$ 505,730$
Add: Opening balance of receivable 44,115 -
Less: Ending balance of receivable - 44,115)(
Cash received during the year 44,115$ 461,615$
Disposal of subsidiary 2,013,423$ -$
Add: Cash by subsidiary 94,516)( -
Less: Ending balance of other receivable 961,722)( -
Effect on exchange 37,708 -
Cash received during the year 994,893$ -$
Purchase of treasury stocks 767,537$ -$
Add: Opening balance of payable - -
Less: Ending balance of payable 17,458)( -
Cash paid during the year 750,079$ -$
-245-
B. The Group sold 100% of shares in the subsidiary – Buynow (Wuhan) Corporation on March 31,
2018 and therefore lost control over the subsidiary (please refer to Note 4(3)). The details of the
consideration received from the transaction (including cash and cash equivalent) and assets and
liabilities relating to the subsidiary are as follows:
December 31, 2018
Consideration received
Cash 2,013,423$
Total consideration 2,013,423
Carrying amount of the assets and liabilities of the subsidiary
- Buynow (Wuhan) Corporation
Cash 94,516
Accounts receivable 3,607
Prepayments 130
Other current assets 2,695
Property, plant and equipment 238
Investment property 4,964,608
Intangible assets 65
Refundable deposits 820
Other non-current assets 23,601
Notes payable 101)(
Other payables 89,617)(
Other current liabilities 11,358)(
Long-term borrowings (included long-term liabilities, current portion) 2,706,706)(
Deferred tax liabilities 441,472)(
Guarantee deposit 58,727)(
Other non-current liabilities 713,852)(
Total net assets 1,068,447$
-246-
(31)Changes in liabilities from financing activities
Note: Refer to Note 6(30) 2. for effect of changes between consolidation and entity.
7. RELATED PARTY TRANSACTIONS
(1)Names of related parties and relationship
(2)Significant related party transactions
A. Operating revenue
The Group (Buynow (China)) offered the services to related parties.
Short-term
borrowings
Long-term
borrowings Bonds payable
Liabilities from
financing activities-
gross
At January 1, 2018 6,221,472$ 35,405,629$ 5,000,000$ 46,627,101$
Changes in cash flow from
financing activities 2,201,686 1,750,239 - 3,951,925
Impact of changes in
foreign exchange rate 3,808 135,320 - 139,128
Changes in loss of control
in subsidiaries (Note) - 2,706,706)( - 2,706,706)(
At December 31, 2018 8,426,966$ 34,584,482$ 5,000,000$ 48,011,448$
Names of related parties Relationship with the Company
Kent Hsu Chairman
Changchun-hong Hyatt Hotel Management Co., Ltd. Other related party
Chicony Energy Saving Technology (Shanghai) Co., Ltd. Other related party
Chicony Electronics (Suzhou) Co., Ltd. Other related party
Chicony Power Technology Co., Ltd. Other related party
Chicony Dalu Enterprise (Chengdu) Co., Ltd. Associate
Chicony Square (Wuhan) Inc. Associate
Qunguang Industrial (Xian) Co., Ltd. Associate
Chicony Industry (Wuhan) Co.,Ltd. Associate
Chicony Square (Wuhan) Inc. Associate
Chicony Square (Cayman) Inc. Associate
Year ended
December 31, 2018
Year ended
December 31, 2017
Sales of services:
-Other related party 208$ 2,989$
-Associate 14,327 3,061
14,535$ 6,050$
-247-
B. Purchases
The purchases of the Group’s subsidiary, Kapok Computer (Kunshan), from other related parties
are unique. Accordingly, the purchase prices are uncomparable and payment terms are the same
with third parties, which are within 1 ~ 5 months.
C. Receivables from related parties
Receivables from related parties are mainly from providing services to related parties and the
receivables do not bear interest and no collaterals were pledged.
D. Payables to related parties
The payables to related parties are mainly from purchase transactions. The payables bear no
interest.
E. Other receivables from related parties
The receivables from related parties are mainly from sales of subsidiaries. The Group - Clevo
(Cayman Islands) has already obtained $892,533 (CNY$ 199,000 thousand) of guarantee deposit
from Chicony Square (Wuhan) Inc.
F. Guarantee deposit
Year ended
December 31, 2018
Year ended
December 31, 2017
Purchases of goods:
-Other related party 815,877$ 756,596$
December 31, 2018 December 31, 2017
Accounts receivable:
-Associates 3,166$ 1,813$
December 31, 2018 December 31, 2017
Accounts payable:
-Other related party 262,229$ 269,209$
December 31, 2018 December 31, 2017
Other receivables:
-Chicony Square
(Wuhan) Inc. 961,722$ -$
December 31, 2018 December 31, 2017
Chicony Square
(Wuhan) Inc. 892,533$ -$
-248-
G. Property transactions
Disposal of financial asset
(a)The amount of receivables from disposal of subsidiaries is $961,722 on December 31, 2018.
(b)There was no disposal of financial assets with related parties in 2017.
H. Loans from related parties
Loans from related parties (showed on other financial liabilities – current and non-current)
The loans from associates are payable at maturity within 1~5 years after the loan is made and carry
interest at 0%~5% and 0%~3.98% per annum for the years ended December 31, 2018 and 2017,
respectively. The amount of interest payable (recognised as other payable) as of December 31,
2018 and 2017 was $102 and $3,338, respectively. Additionally, interest expense recognised in
2018 and 2017 was $8,187 and $3,338, respectively.
I. Others
The joint guarantor and co-issuer of the guarantee notes of bank borrowings is Kent Hsu in 2018
and 2017.
(3)Key management compensation
Accounts No. of shares Objects
Disposal
proceeds Gain/(loss)
Chicony Square
(Wuhan)
Disposal of
subsidiaries15,000,000
Buynow (Wuhan)
Industry Co., Ltd.2,013,423$ 944,976$
Year ended December 31, 2018
December 31, 2018 December 31, 2017
Chicony Square (Wuhan) Inc. -$ 1,039,990$
Chicony Industry (Wuhan) - 609,360
Chicony Square (Cayman) Inc. 434,026 44,571
Chicony Square (Wuhan) Inc. 6,728 -
440,754$ 1,693,921$
Year ended December 31, 2018 Year ended December 31, 2017
Salaries and other short-term
employee benefits 104,476$ 109,328$
Post-employment benefits 1,427 1,668
105,903$ 110,996$
-249-
8. PLEDGED ASSETS
The Group’s assets pledged as collateral are as follows:
9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT
COMMITMENTS
(1)Contingencies
None.
(2)Commitments
A. As of December 31, 2018 and 2017, the Company issued guarantee notes amounting to
$22,216,186 and $25,107,372, respectively, for bank repayment and forward exchange trading.
B. On December 28, 2018, the Company entered into a syndicated loan agreement with 9 banks
including Taiwan Cooperative Bank amounting to $6,000,000 and provided equal amount of
guarantee notes. The Company and the Chairman of the Group are the joint guarantors and co-
issuers of the guarantee notes.
C. On May 20, 2015, the Group’s consolidated subsidiary, CLEVO (CAYMAN ISLANDS)
HOLDING COMPANY, entered into a syndicated loan agreement with 7 banks including Land
Bank of Taiwan amounting to USD 120 million and provided equal amount of guarantee notes.
The Company, the Group’s consolidated subsidiary, CLEVO (CAYMAN ISLANDS) HOLDING
COMPANY, and the Chairman of the Group are the joint guarantors and co-issuers of the
guarantee notes.
D. As of December 31, 2018 and 2017, the Group’s total contract prices for signed construction
contracts amounted to $13,259,931 and $16,213,099, of which $12,292,558 and $15,237,229 were
paid and $967,373 and $975,870 remain unpaid, respectively.
10. SIGNIFICANT DISASTER LOSS
None.
Pledged asset December 31, 2018 December 31, 2017 Purpose
Inventories 383,644$ 569,127$ Long-term borrowings
Financial assets at
amortised cost (current
and non-current)
4,865,618 - STANDBY L/C, Long-
term and short-term
borrowings
Other financial assets
(current and non-current)
- 3,475,674 STANDBY L/C, Long-
term and short-term
borrowings
Property, plant and
equipment
1,644,480 3,174,866 Long-term borrowings
Investment property and
long-term prepaid rents 59,756,015 66,697,276
Long-term and short-
term borrowings
66,649,757$ 73,916,943$
Book value
-250-
11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE
The Board of Directors has resolved the appropriation of 2018 earnings on March 27, 2019. Details are
provided in Note 6(19) F.
12. OTHERS
(1) Capital management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a
going concern in order to provide returns for shareholders and to maintain an optimal capital
structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group
may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new
shares or sell assets to reduce debt. The Group monitors capital on the basis of the gearing ratio.
This ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings
(including ‘current and non-current borrowings’ as shown in the consolidated balance sheet) less
cash and cash equivalents. Total capital is calculated as ‘equity’ as shown in the consolidated balance
sheet plus net debt.
During the year ended December 31, 2018, the Group’s strategy, which was unchanged from 2017,
was to maintain the gearing ratio within 40% to 60%. The gearing ratios at December 31, 2018 and
2017 were as follows:
December 31, 2018 December 31, 2017
Total borrowings 48,011,448$ 46,627,101$
Less: Cash and cash equivalents 7,796,543)( 7,522,579)(
Net debt 40,214,905 39,104,522
Total equity 41,857,130 42,300,035
Total capital 82,072,035 81,404,557
Gearing ratio 49% 48%
-251-
(2) Financial instruments
A. Financial instruments by category
B. Financial risk management policies
The Group’s activities expose it to a variety of financial risks: market risk (including foreign
exchange risk, interest rate risk and price risk), credit risk and liquidity risk. To minimise any
adverse effects on the financial performance of the Group, derivative financial instruments, such
as foreign exchange forward contracts and foreign currency option contracts are used to hedge
certain exchange rate risk.
December 31, 2018 December 31, 2017
Financial assets
Financial assets at fair value through profit or loss
Financial assets mandatorily measured at fair
value through profit or loss
1,322,990$ -$
Financial assets held for trading - 1,000,504
Available-for-sale financial assets - 400,754
Financial assets at amortised cost
Cash and cash equivalents 7,796,543 7,522,579
Financial assets at amortised cost - current 4,749,768 -
Notes receivable - 1,127
Accounts receivable (including related parties) 1,627,027 1,913,159
Other receivables (including related parties) 1,204,438 309,045
Guarantee deposits paid 113,106 116,554
Other financial assets - current - 3,358,797
Financial assets at amortised cost - non-current 115,850 -
Other financial assets - non-current - 116,877
16,929,722$ 14,739,396$
Financial liabilities
Financial liabilities at amortised cost
Short-term borrowings 8,426,966$ 6,221,472$
Notes payable 15,135 15,236
Accounts payable (including related parties) 1,852,644 2,122,108
Other payables (including related parties) 2,008,965 2,303,738
Corporate bonds payable 5,000,000 5,000,000
Long-term borrowings
(including current portion) 34,584,482 35,405,629
Guarantee deposits received 1,635,227 835,521
Other financial liabilities - current 6,728 -
Other financial liabilities - non-current 434,026 1,693,921
53,964,173$ 53,597,625$
-252-
C. Significant financial risks and degrees of financial risks
(a) Market risk
Foreign exchange risk
i. The Group operates internationally and is exposed to foreign exchange risk arising from
the transactions of the Company and its subsidiaries used in various functional currency,
primarily with respect to the USD and RMB. Foreign exchange risk arises from future
commercial transactions and recognised assets and liabilities.
ii. Management has set up a policy to require group companies to manage their foreign
exchange risk against their functional currency. The companies are required to hedge their
entire foreign exchange risk exposure with the Group treasury. Exchange rate risk is
measured through a forecast of highly probable USD and RMB expenditures. Forward
foreign exchange contracts are adopted to minimise the volatility of the exchange rate
affecting cost of forecast inventory purchases.
iii. To deduct the risk of fair value from exchange rate fluctuation and the risk of cash flow,
the Group hedges foreign assets and liabilities or expected transaction that are probably by
using financial derivatives such as forward exchange contracts. The Group monitors the
exchange rate fluctuation at any time, and sets stop loss limit.
iv. The Group’s businesses involve some non-functional currency operations (the Company’s
and certain subsidiaries’ functional currency: NTD; other certain subsidiaries’ functional
currency: RMB and JPY). The information on assets and liabilities denominated in foreign
currencies whose values would be materially affected by the exchange rate fluctuations is
as follows:
-253-
Foreign currency
amount
(In thousands) Exchange rate
Book value
(NTD)
(Foreign currency: functional
currency)
Financial assets
Monetary items
USD:NTD 355,173$ 30.78 10,932,225$
USD:RMB 7,741 6.86 238,434
RMB:NTD 392,489 4.49 1,762,276
HKD:NTD 37,042 3.93 145,575
JPY:NTD 139,333 0.28 39,013
Investments accounted for the
equity method
USD:NTD 81,813 30.78 2,518,217
Financial liabilities
Monetary items
USD:NTD 130,901 30.78 4,029,133
USD:RMB 244,788 6.86 7,539,813
JPY:NTD 11,400 0.28 3,192
December 31, 2018
Foreign currency
amount
(In thousands) Exchange rate
Book value
(NTD)
(Foreign currency: functional
currency)
Financial assets
Monetary items
USD:NTD 342,240$ 29.71 10,167,950$
USD:RMB 4,436 6.53 131,800
RMB:NTD 405,470 4.55 1,844,889
HKD:NTD 19,793 3.80 75,213
Investments accounted for the
equity method
USD:NTD 86,207 29.71 2,561,215
Financial liabilities
Monetary items
USD:NTD 157,750 29.71 4,686,753
USD:RMB 161,055 6.53 4,785,186
JPY:NTD 3,462,179 0.26 900,167
December 31, 2017
-254-
vii. The total exchange gain (loss), including realised and unrealised arising from significant
foreign exchange variation on the monetary items held by the Group for the years ended
December 31, 2018 and 2017 amounted to $209,160 and $98,430, respectively.
viii. Analysis of foreign currency market risk arising from significant foreign exchange
variation:
Degree of
variation
Effect on
profit or loss
Effect on other
comprehensive
income
(Foreign currency: functional
currency)
Financial assets
Monetary items
USD:NTD 1% 87,457$ -$
USD:RMB 1% 4,907 -
RMB:NTD 1% 14,098 -
HKD:NTD 1% 1,208 -
JPY:NTD 1% 312 -
Financial liabilities
Monetary items
USD:NTD 1% 32,233 -
USD:RMB 1% 60,319 -
RMB:NTD 1% 26 -
Year ended December 31, 2018
Sensitivity analysis
Degree of
variation
Effect on
profit or loss
Effect on other
comprehensive
income
(Foreign currency: functional
currency)
Financial assets
Monetary items
USD:NTD 1% 84,394$ -$
USD:RMB 1% 1,094 -
RMB:NTD 1% 15,313 -
HKD:NTD 1% 624 -
Financial liabilities
Monetary items
USD:NTD 1% 38,900 -
USD:RMB 1% 39,717 -
RMB:NTD 1% 7,471 -
Year ended December 31, 2017
Sensitivity analysis
-255-
Price risk
i. The Group’s equity securities, which are exposed to price risk, are the held financial assets
at fair value through profit or loss and available-for-sale financial assets. To manage its
price risk arising from investments in equity securities, the Group diversifies its portfolio.
ii. The Group’s investments in equity securities comprise shares and open-end funds issued
by the domestic and foreign companies. The prices of equity securities would change due
to the change of the future value of investee companies. If the prices of these equity
securities had increased/decreased by 1% with all other variables held constant, post-tax
profit for the years ended December 31, 2018 and 2017 would have increased/decreased
by $12,342 and $8,527, respectively, as a result of gains/losses on equity securities
classified as at fair value through profit or loss. Other components of equity would have
increased/decreased by $0 and $4,008, respectively, as a result of other comprehensive
income classified as available-for-sale equity investment.
Cash flow and fair value Interest rate risk
i. The Group’s main interest rate risk arises from long-term borrowings with variable rates,
which expose the Group to cash flow interest rate risk. During 2018 and 2017, the Group’s
borrowings at variable rate were mainly denominated in New Taiwan dollars, US dollars,
RMB dollars, and JPY dollars.
ii. The Group’s borrowings are measured at amortised cost. The borrowings are periodically
contractually repriced and to that extent are also exposed to the risk of future changes in
market interest rates.
iii. If the borrowing interest rate had increased/decreased by 1% with all other variables held
constant, profit, net of tax for the years ended December 31, 2018 and 2017 would have
decreased/increased by $345,047 and $335,274, respectively. The main factor is that
changes in interest expense result from floating rate borrowings.
(b) Credit risk
Effective 2018
i. Credit risk refers to the risk of financial loss to the Group arising from default by the clients
or counterparties of financial instruments on the contract obligations. The main factor is
that counterparties could not repay in full the accounts receivable based on the agreed terms,
and the contract cash flows of debt instruments stated at amortised cost.
ii. According to the Group’s credit policy, each local entity in the Group is responsible for
managing and analysing the credit risk for each of their new clients before standard
payment and delivery terms and conditions are offered. Internal risk control assesses the
credit quality of the customers, taking into account their financial position, past experience
and other factors.
iii. Individual risk limits are set based on internal or external ratings in accordance with limits
set by the management of credit manage. The utilisation of credit limits is regularly
-256-
monitored.
iv. For banks and financial institutions, only independently rated parties with a best rating are
accepted.
v. The Group adopts the following assumptions under IFRS 9 to assess whether there has
been a significant increase in credit risk on that instrument since initial recognition:
(i) If the contract payments were past due over 30 days based on the terms, there has been
a significant increase in credit risk on that instrument since initial recognition.
(ii) For investments in bonds that are traded over the counter, if any external credit rating
agency rates these bonds as investment grade, the credit risk of these financial assets is
low.
vi. The Group adopts the assumption under IFRS 9, that is, the default occurs when the
contract payments are past due over 90 days.
vii. The following indicators are used to determine whether the credit impairment of debt
instruments has occurred:
(i) It becomes probable that the issuer will enter bankruptcy or other financial
reorganization due to their financial difficulties;
(ii) The disappearance of an active market for that financial asset because of financial
difficulties;
(iii) Default or delinquency in interest or principal repayments;
(iv) Adverse changes in national or regional economic conditions that are expected to
cause a default.
viii. The Group classifies customer’s accounts receivable in accordance with customer types.
The Group applies the modified approach using provision matrix to estimate expected
credit loss under the provision matrix basis.
ix. The Group wrote-off the financial assets, which cannot be reasonably expected to be
recovered, after initiating recourse procedures. However, the Group will continue
executing the recourse procedures to secure their rights. On December 31, 2018, the
Group’s written-off financial assets that are still under recourse procedures amounted to
$50,259.
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x. The Group used the forecastability to adjust historical and timely information to assess the
default possibility of accounts receivable, contract assets and lease payments receivable.
On December 31, 2018, the provision matrix is as follows:
xi. Movements in relation to the Group applying the modified approach to provide loss
allowance for accounts receivable is as follows:
Note: Refer Note 6(30) 2. for effect of changes between consolidation and entity.
xii. Credit risk information for 2017 is provided in Note 12(4)
(c) Liquidity risk
i. Cash flow forecasting is performed in the operating entities of the Group and aggregated
by Group treasury. Group treasury monitors rolling forecasts of the Group’s liquidity
requirements to ensure it has sufficient cash to meet operational needs.
ii. The table below analyses the Group’s non-derivative financial liabilities based on the
remaining period at the balance sheet date to the contractual maturity date for non-
derivative financial liabilities. The amounts disclosed in the table are the contractual
undiscounted cash flows.
Not past due
1~90 days
past due
91~180 days
past due
At December 31, 2018
Expected loss rate 0.03%~0.05% 0.27%~21.59% 12.51%~39.51%
Total book value 1,022,099$ 564,783$ 32,332$
Loss allowance 557 10,214 6,025
181~270 days
past due Over 270 days Total
Expected loss rate 35.77%~74.57% 100%
Total book value 34,399$ 28,986$ 1,682,599$
Loss allowance 9,790 28,986 55,572
Accounts receivable
At January 1_IAS 39 97,704$
Adjustments under new standards -
At January 1_IFRS 9 97,704
Provision for impairment 17,992
Effect of changes between consolidation and entity
(Note) 3,406)(
Write-offs 50,259)(
Effect of foreign exchange 6,459)(
At December 31 55,572$
2018
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iii. The Group does not expect the maturity date will be early, or the actual amount will be
different.
(3) Fair value information
A. The different levels that the inputs to valuation techniques are used to measure fair value of
financial and non-financial instruments have been defined as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the
entity can access at the measurement date. A market is regarded as active where a market
December 31, 2018
Less than 1
year
Between 1
and 2 years
Between 2
and 5 years Over 5 years
Non-derivative financial
liabilities
Short-term borrowings 8,426,966$ -$ -$ -$
Notes payable 15,135 - - -
Accounts payable
(including related parties)
1,852,644 - - -
Other payables 2,008,965 - - -
Other financial liabilities -
current
6,728 - - -
Bonds payable 75,000 5,075,000 - -
Long-term borrowings
(including current portion)
3,802,851 12,576,403 19,426,728 1,437,491
Guarantee deposits - 1,635,227 - -
Other financial liabilities -
non-current
- - 434,026 -
December 31, 2017
Less than 1
year
Between 1
and 2 years
Between 2
and 5 years Over 5 years
Non-derivative financial
liabilities
Short-term borrowings 6,345,758$ -$ -$ -$
Notes payable 15,236 - - -
Accounts payable
(including related parties)
2,122,108 - - -
Other payables 2,303,738 - - -
Bonds payable 75,000 75,000 5,075,000 -
Long-term borrowings
(including current portion)
8,523,566 13,110,761 16,138,629 264,111
Guarantee deposits - 835,521 - -
Other financial liabilities -
non-current
49,207 1,698,557 44,571 -
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in which transactions for the asset or liability take place with sufficient frequency and
volume to provide pricing information on an ongoing basis. The fair value of the Group’s
investment in listed stocks and beneficiary certificates is included in Level 1.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset
or liability, either directly or indirectly. The fair value of the Group’s investment in off-
the-run beneficiary certificates, bank debentures, convertible bonds and derivative
instruments is included in Level 2.
Level 3: Unobservable inputs for the asset or liability. The fair value of the Group’s investment
in investment property is included in Level 3.
B. Financial instruments not measured at fair value
The carrying amounts of cash and cash equivalents, notes receivable, accounts receivable
(including related parties), other receivables, financial assets at amortised cost, other financial
assets, short-term borrowings, notes payable, accounts payable(including related parties), other
payables, other payables, corporate bonds payable, long-term borrowings(including current
portion) and other financial liabilities. are approximate to their fair values.
C. The related information of financial and non-financial instruments measured at fair value by level
on the basis of the nature, characteristics and risks of the assets and liabilities at December 31,
2018 and 2017 is as follows:
(a) The related information on the nature of the assets and liabilities is as follows:
December 31, 2018 Level 1 Level 2 Level 3 Total
Assets
Recurring fair value measurements
Financial assets at fair value through
profit or loss
Equity securities 895,174$ -$ -$ 895,174$
Beneficiary certificates 14,497 413,319 - 427,816
Investment property (Note ) - - 65,426,212 65,426,212
909,671$ 413,319$ 65,426,212$ 66,749,202$
Note : Investment property measured at fair value
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(b)The methods and assumptions the Group used to measure fair value are as follows:
i.The instruments the Group used market quoted prices as their fair values (that is, Level 1)
are listed below by characteristics:
ii. Except for financial instruments with active markets, the fair value of other financial
instruments is measured by using valuation techniques or by reference to counterparty
quotes. The fair value of financial instruments measured by using valuation techniques can
be referred to current fair value of instruments with similar terms and characteristics in
substance, discounted cash flow method or other valuation methods, including calculated
by applying model using market information available at the consolidated balance sheet
date (i.e. yield curves on the Taipei Exchange, average commercial paper interest rates
quoted from Reuters).
iii. When assessing non-standard and low-complexity financial instruments, for example,
debt instruments without active market, interest rate swap contracts, foreign exchange swap
contracts and options, the Group adopts valuation technique that is widely used by market
participants. The inputs used in the valuation method to measure these financial instruments
are normally observable in the market.
iv. The valuation of derivative financial instruments is based on valuation model widely
accepted by market participants, such as present value techniques and option pricing
models. Forward exchange contracts are usually valued based on the current forward
exchange rate.
v. The output of valuation model is an estimated value and the valuation technique may not
be able to capture all relevant factors of the Group’s financial and non-financial instruments.
Therefore, the estimated value derived using valuation model is adjusted accordingly with
December 31, 2017 Level 1 Level 2 Level 3 Total
Assets
Recurring fair value measurements
Financial assets at fair value through
profit or loss
Equity securities 456,022$ -$ -$ 456,022$
Beneficiary certificates 9,980 534,502 - 544,482
Available-for-sale equity securities 400,754 - - 400,754
Investment property (Note ) - - 69,922,175 69,922,175
866,756$ 534,502$ 69,922,175$ 71,323,433$
Note : Investment property measured at fair value
Listed shares Open-end fund / Debt securities
Market quoted price Closing priceNet asset
value
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additional inputs, for example, model risk or liquidity risk and etc. In accordance with the
Group’s management policies and relevant control procedures relating to the valuation
models used for fair value measurement, management believes adjustment to valuation is
necessary in order to reasonably represent the fair value of financial and non-financial
instruments at the consolidated balance sheet. The inputs and pricing information used
during valuation are carefully assessed and adjusted based on current market conditions.
vi. The Group takes into account adjustments for credit risks to measure the fair value of
financial and non-financial instruments to reflect credit risk of the counterparty and the
Group’s credit quality.
E. For the years ended December 31, 2018 and 2017, there was no transfer between Level 1 and
Level 2.
F. The movement of Level 3 for the years ended December 31, 2018 and 2017 are provided in Note
6(8)
G. For the years ended December 31, 2018 and 2017, there was no transfer into or out from Level
3.
H. Financial & Administrative segment is in charge of valuation procedures for fair value
measurements being categorised within Level 3 (investment property), which is based on the
valuation methods and assumptions announced by the Financial Supervisory Commission,
Securities and Futures Bureau or through outsourced appraisal performed by the external valuer.
The Group sets up valuation policies, valuation processes and rules for measuring fair value of
investment property and ensure compliance with the related requirements in IFRS.
I. The following is the qualitative information of significant unobservable inputs and sensitivity
analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair
value measurement:
Fair value at
December 31,
2018
Valuation
technique
Significant
unobservable
input
Range
(weighted
average)
Relationship of
inputs to fair value
Investment
property
65,426,212$ Income
approach of
discounted
cash flow
method
Long-term rent
revenue growth
rate and
discount rate
(Note 1) The higher the long-
term rent revenue
growth rate, the
higher the fair value;
The higher the
discount rate, the
lower the fair value
Note 1: The range of long-term rent revenue growth rate is (10%)~20%; the range of discount rate
is provided in Note 6(8).
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(4) Effects on initial application of IFRS 9 and information on application of IAS 39 in 2017
A. Summary of significant accounting policies adopted in 2017:
(a) Financial assets at fair value through profit or loss
i. They are financial assets held for trading or financial assets designated as at fair value
through profit or loss on initial recognition. Financial assets are classified in this category
of held for trading if acquired principally for the purpose of selling in the short-term.
Derivatives are also categorized as financial assets held for trading unless they are
designated as hedges. Financial assets that meet one of the following criteria are designated
as at fair value through profit or loss on initial recognition:
(i) Hybrid (combined) contracts; or
(ii) They eliminate or significantly reduce a measurement or recognition inconsistency; or
(iii)They are managed and their performance is evaluated on a fair value basis, in
accordance with a documented risk management or investment strategy.
ii. On a regular way purchase or sale basis, financial assets at fair value through profit or loss
are recognised and derecognised using trade date accounting.
iii. Financial liabilities at fair value through profit or loss are initially recognised at fair value.
Related transaction costs are expensed in profit or loss. These financial liabilities are
subsequently remeasured and stated at fair value, and any changes in the fair value of these
financial liabilities are recognised in profit or loss.
(b) Available for sale financial assets
i. They are non-derivatives that are either designated in this category or not classified in any
of the other categories.
ii. On a regular way purchase or sale basis, available-for-sale financial assets are recognised
and derecognised using trade date accounting.
iii. They are initially recognised at fair value plus transaction costs. These financial assets are
subsequently remeasured and stated at fair value, and any changes in the fair value of these
Fair value at
December 31,
2017
Valuation
technique
Significant
unobservable
input
Range
(weighted
average)
Relationship of
inputs to fair value
Investment
property
69,922,175$ Income
approach of
discounted
cash flow
method
Long-term rent
revenue growth
rate and
discount rate
(Note 1) The higher the long-
term rent revenue
growth rate, the
higher the fair value;
The higher the
discount rate, the
lower the fair value
Note 1: The range of long-term rent revenue growth rate is (10%)~20%; the range of discount rate
is provided in Note 6(8).
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financial assets are recognised in other comprehensive income.
(c) Notes receivable, accounts receivable and other receivables
Notes receivable and accounts receivable are created by the entity by selling goods or
providing services to customers in the ordinary course of business. Other receivables are other
receivables not belong note receivable and accounts receivable. Notes receivable, accounts
receivable and other receivables are initially recognised at fair value and subsequently
measured at amortised cost using the effective interest method, less provision for impairment.
However, short-term accounts receivable without bearing interest are subsequently measured
at initial invoice amount as the effect of discounting is immaterial.
(d) Impairment of financial assets
i. The Group assesses at each balance sheet date whether there is objective evidence that a
financial asset or a group of financial assets is impaired as a result of one or more events
that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or
events) has an impact on the estimated future cash flows of the financial asset or group of
financial assets that can be reliably estimated.
ii. The criteria that the Group uses to determine whether there is objective evidence of an
impairment loss is as follows:
(i) Significant financial difficulty of the issuer or debtor;
(ii) A breach of contract, such as a default or delinquency in interest or principal
payments;
(iii) The Group, for economic or legal reasons relating to the borrower’s financial
difficulty, granted the borrower a concession that a lender would not otherwise
consider;
(iv) It becomes probable that the borrower will enter bankruptcy or other financial
reorganisation;
(v) The disappearance of an active market for that financial asset because of financial
difficulties;
(vi) Observable data indicating that there is a measurable decrease in the estimated future
cash flows from a group of financial assets since the initial recognition of those assets,
although the decrease cannot yet be identified with the individual financial asset in
the group, including adverse changes in the payment status of borrowers in the group
or national or local economic conditions that correlate with defaults on the assets in
the group;
(vii) Information about significant changes with an adverse effect that have taken place
in the technology, market, economic or legal environment in which the issuer
operates, and indicates that the cost of the investment in the equity instrument may
not be recovered;
(viii) A significant or prolonged decline in the fair value of an investment in an equity
-264-
instrument below its cost.
iii. When the Group assesses that there has been objective evidence of impairment and an
impairment loss has occurred, accounting for impairment is made as follows according to
the category of financial assets:
(i)Financial assets at amortised cost (including note receivable, accounts receivable and
other receivables)
The amount of the impairment loss is measured as the difference between the asset’s
carrying amount and the present value of estimated future cash flows discounted at the
financial asset’s original effective interest rate, and is recognised in profit or loss. 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 loss was recognised,
the previously recognised impairment loss is reversed through profit or loss to the
extent that the carrying amount of the asset does not exceed its amortised cost that
would have been at the date of reversal had the impairment loss not been recognised
previously. Impairment loss is recognised and reversed by adjusting the carrying
amount of the asset through the use of an impairment allowance account.
(iii)Available-for-sale financial assets
The amount of the impairment loss is measured as the difference between the asset’s
acquisition cost (less any principal repayment and amortisation) and current fair value,
less any impairment loss on that financial asset previously recognised in profit or loss,
and is reclassified from ‘other comprehensive income’ to ‘profit or loss’. If, in a
subsequent period, the fair value of an investment in a debt instrument increases, and
the increase can be related objectively to an event occurring after the impairment loss
was recognised, such impairment loss is reversed through profit or loss. Impairment
loss of an investment in an equity instrument recognised in profit or loss shall not be
reversed through profit or loss. Impairment loss is recognised and reversed by adjusting
the carrying amount of the asset through the use of an impairment allowance account.
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B. The reconciliations of carrying amount of financial assets transferred from December 31, 2017,
IAS 39, to January 1, 2018, IFRS 9, were as follows:
Under IAS 39, the equity instruments, which were classified as available-for-sale financial assets
amounting to $400,754 was reclassified as "financial assets at fair value through profit or loss"
amounting to $400,754. Accordingly, retained earnings was increased and other equity interest
was decreased in the amounts of $97,878 and $97,878 under IFRS 9, respectively.
C. The significant accounts as of December 31, 2017 are as follows:
(a) Financial assets at fair value through profit or loss
i. The Group recognised net profit amounting to $202,225 on financial assets held for trading
for the year ended December 31, 2017.
ii. The counterparties of the Group’s investments in debt instruments have good credit quality
(the ratings are tw BBB+).
iii. The Group did not pledge financial assets at fair value through profit or loss to others as
collateral.
Available-for-
sale-equity
Measured at fair
value through
other
comprehensive
income-equity Total
Retained
earnings Other equity
IAS 39 $ 1,000,504 $ 400,754 $ 1,401,258 $ 1,079,944 ($ 2,020,190)
Transferred into and
measured at fair
value through profit
or loss 400,754 ( 400,754) - 97,879 97,879)(
IFRS 9 $ 1,401,258 $ - $ 1,401,258 $ 1,177,823 ($ 2,118,069)
Measured at
fair value
through profit
or loss
Effects
Items December 31, 2017
Current items:
Financial assets held for trading
Stocks 461,261$
Beneficiary certificates 367,093
828,354
Valuation adjustment 172,150
1,000,504$
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(b)Available-for-sale financial assets
i. The Group recognised ($59,978) in other comprehensive income for fair value change for
the year ended December 31, 2017.
ii. The Group recognised net profit amounting to $110,961 on available-for-sale financial
assets in current profit and loss for the year ended December 31, 2017.
iii. Due to the global financial crisis in 1998, the listed stocks classified as financial assets at
fair value through profit or loss would be reclassified as available-for-sale financial assets
amounting to $2,126,159, according to IAS 39.50(C). The information is as follows:
(i) The information about the balance of above reclassified assets which were not deducted:
(ii) The listed stocks recognised $0 in current profit or loss and other comprehensive
income for fair value change for the year ended December 31, 2017.
(iii) The listed stocks recognised in current profit or loss, if the listed stocks would not be
reclassified as available-for-sale financial assets on October 1 1998:
E. Credit risk information for the year ended December 31, 2017 is as follows:
(a) Credit risk refers to the risk of financial loss to the Group arising from default by the clients
or counterparties of financial instruments on the contract obligations. According to the
Group’s credit policy, each local entity in the Group is responsible for managing and
analysing the credit risk for each of their new clients before standard payment and delivery
terms and conditions are offered. Internal risk control assesses the credit quality of the
customers, taking into account their financial position, past experience and other factors.
Individual risk limits are set based on internal or external ratings in accordance with limits
set by the Board of Directors. The utilisation of credit limits is regularly monitored. Credit
risk arises from cash and cash equivalents, derivative financial instruments and deposits with
banks and financial institutions, as well as credit exposures to wholesale and retail customers,
including outstanding receivables and promised transactions.
(b) For the year ended December 31, 2017, no credit limits were exceeded during the reporting
period, and management does not expect any significant losses from non-performance by
these counterparties.
Items December 31, 2017
Current items:
Listed stocks 302,875$
Valuation adjustment 97,879
400,754$
Book value / Fair value
Irems December 31, 2017
Listed stocks 346,363$
Year ended December 31, 2017
Listed stocks 81,909)($
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(c) The Group’s accounts receivable that are neither past due nor impaired are fully performing
in line with the credit standards prescribed:
Group 1: The payment term is L/C.
Group 2: The payment term is O/A and have accounts receivable insurance.
Group 3: The payment term is O/A and have no accounts receivable insurance.
(d) The ageing analysis of financial assets that were past due but not impaired is as follows:
The ageing analysis is based on due dates.
(e) The movement analysis of impaired financial assets are as follows:
i. The Group’s impaired accounts receivable amounted to $61,470 as of December 31, 2017.
ii. Movements in the provision for impairment of accounts receivable are as follows:
(5) Effects of initial application of IFRS 15 and information on application of IAS 11 and IAS 18 in
2017
A. The significant accounting policies applied on revenue recognition for the year ended December
31, 2017 are set out below.
(a) Sales of goods
The Group manufactures and sells a range of video display devices, computers and peripheral
products. Revenue is measured at the fair value of the consideration received or receivable
taking into account of business tax, returns, rebates and discounts for the sale of goods to
external customers in the ordinary course of the Group’s activities. Revenue arising from the
sales of goods is recognised when the Group has delivered the goods to the customer, the
December 31, 2017
Group 1 302,692$
Group 2 1,034,384
Group 3 -
1,337,076$
December 31, 2017
Accounts receivable
Up to 30 days 440,458$
31 to 90 days 78,355
91 to 180 days 32,805
Over 180 days 58,886
610,504$
Individual provision Group provision Total
At January 1 61,470$ 21,913$ 83,383$
Provision for impairment - 14,726 14,726
Effects of foreign exchange - 405)( 405)(
At December 31 61,470$ 36,234$ 97,704$
2017
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amount of sales revenue can be measured reliably and it is probable that the future economic
benefits associated with the transaction will flow to the entity. The delivery of goods is
completed when the significant risks and rewards of ownership have been transferred to the
customer, the Group retains neither continuing managerial involvement to the degree usually
associated with ownership nor effective control over the goods sold, and the customer has
accepted the goods based on the sales contract or there is objective evidence showing that all
acceptance provisions have been satisfied.
(b) Booth rental revenue
The Group held investment properties for earning rental revenue, and lease revenue is
recognised on a straight-line basis over the lease term.
(c) Hotel revenue
The main services the Group provides are food services and accommodations. Revenue
arising from the sales of goods is recognised when the Group has delivered the goods to the
customer, the amount of sales revenue can be measured reliably and it is probable that the
future economic benefits associated with the transaction will flow to the entity. The delivery
of goods is completed when the significant risks and rewards of ownership have been
transferred to the customer, the Group retains neither continuing managerial involvement to
the degree usually associated with ownership nor effective control over the goods sold, and
the customer has accepted the goods based on the sales contract or there is objective evidence
showing that all acceptance provisions have been satisfied.
B. The revenue recognised by using above accounting policies for the year ended December 31,
2017 are as follows:
Year ended December 31, 2017
Sales revenue of computer products 14,131,511$
Rental revenue 3,937,113
Land development and resale 2,263,840
Hotel revenue 90,261
Other revenue 454,255
20,876,980$
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D. The effects and description of current balance sheet and comprehensive income statement if the
Group continues adopting above accounting policies are as follows:
Explanation: According to IFRS 15, the advance sales receipts and advance real estate receipts
(previously shown as other current liabilities) are shown as contract liabilities in
balance sheet.
13. SUPPLEMENTARY DISCLOSURES
(1) Significant transactions information
A. Loans to others: Please refer to table 1.
B. Provision of endorsements and guarantees to others: Please refer to table 2.
C. Holding of marketable securities at the end of the period (not including subsidiaries, associates
and joint ventures): Please refer to table 3.
D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or
20% of the Company’s paid-in capital: Please refer to table 4.
E. Acquisition of real estate reaching $300 million or 20% of paid-in capital or more: Please refer
to table 5.
F. Disposal of real estate reaching $300 million or 20% of paid-in capital or more: None.
G. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in
capital or more: Please refer to table 6.
H. Receivables from related parties reaching $100 million or 20% of paid-in capital or more: Please
refer to table 7.
I. Trading in derivative instruments undertaken during the reporting periods: As of December 31,
2018, the Group did not have open interest derivative instruments. The Group recognised net
profit amounting to $669 on derivative instruments in 2018.
J. Significant inter-company transactions during the reporting periods: Please refer to table 8.
(2) Information on investees
Names, locations and other information of investee companies (not including investees in Mainland
China):Please refer to table 9.
Balance sheet items Description
Balance by
using IFRS 15
Balance by using
previous
accounting
policies
Effects from
chages in
accounting policy
Contract liabilities $ 3,146,037 $ - $ 3,146,037
Other current liabilities
-Advance sales receipts - 31,316 ( 31,316)
-Advance real estate
receipts - 3,114,721 ( 3,114,721)
December 31, 2018
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(3) Information on investments in Mainland China
A. Basic information: Please refer to table 10.
B. Ceiling on investments in Mainland China: Please refer to table 10.
C. Significant transactions, price, payment term and unrealised gain or loss, either directly or
indirectly through a third area, with investee companies in the Mainland Area:
D. Significant sales (purchases), property transactions, accounts receivable (payable), provision of
endorsements and guarantees from notes or provides collaterals and accommodation of funds,
either directly or indirectly through a third area, with investee companies in the Mainland Area:
Provided in Note13(1) A, B, D, E, G, H, J.
14. SEGMENT INFORMATION
(1) General information
Management has determined the reportable operating segments based on the reports reviewed by
the chief operating decision maker-Board of Directors that are used to make strategic decisions.
The Group’s mainly operating businesses are including manufacturing and trading of computer and
computer peripherals; research and development, production, and sales of computer software and
hardware; after-sales services for aforementioned products and property management. The product
features and manufacturing procedures are different so that its marketing and selling ways are
different. The chief operating decision-maker operates various businesses from the perspective of
different products. Currently businesses are mainly divided into computer segment, Buynow plaza
and other segments, of which computer segment and Buynow plaza are the reportable segments.
(2) Measurement of segment information
The Group’s accounting policies of operating segments are the same as Note 4. Management has
determined the Group’s operating segment profit or loss is measured based on operating income
before tax (not including extraordinary profit and loss) for performance assessment basis. The Group
considers the sale and transfer among segments as transactions with third parties. Reporting amount
and reports for operating decision-maker are the same.
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(3) Information about segment profit or loss, assets and liabilities
The segment information provided to the chief operating decision-maker for the reportable segments
is as follows:
Year ended December 31, 2018 Computer segment Buynow plaza Others Total
Revenue from external customers 14,568,469$ 5,067,546$ 160,057$ 19,796,072$
Inter-segment revenue 10,850,534 6,140 8,479 10,865,153
Total segment revenue 25,419,003$ 5,073,686$ 168,536$ 30,661,225$
External-segment income (loss) 374,029)($ 2,587,448$ 142,256$ 2,355,675$
Segment income (loss) 498,365)($ 1,812,350$ 142,374$ 1,456,359$
Segment income (loss), including
Interest income 108,629$ 22,289$ 3$ 130,921$
Recognised investment profit or
loss accounted for under equity
method -$ 24,009$ -$ 24,009$
Interest expense 337,903$ 530,932$ 9,492$ 878,327$
Depreciation and amortisation 87,772$ 85,820$ -$ 173,592$
Income tax expense 123,937$ 775,098$ 281$ 899,316$
Year ended December 31, 2017 Computer segment Buynow plaza Others Total
Revenue from external customers 14,131,511$ 6,590,606$ 154,863$ 20,876,980$
Inter-segment revenue 10,040,821 5,694 7,198 10,053,713
Total segment revenue 24,172,332$ 6,596,300$ 162,061$ 30,930,693$
External-segment income (loss) 459,891)($ 1,676,471$ 286,376$ 1,502,956$
Segment income (loss) 611,135)($ 1,046,366$ 285,427$ 720,658$
Segment income (loss), including
Interest income 70,461$ 14,811$ 2$ 85,274$
Recognised investment profit or
loss accounted for under equity
method -$ 481,087$ -$ 481,087$
Interest expense 354,883$ 671,193$ 9,467$ 1,035,543$
Depreciation and amortisation 85,083$ 110,667$ -$ 195,750$
Income tax expense 150,740$ 630,105$ 1,453$ 782,298$
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(4) Reconciliation for segment income (loss)
A reconciliation of reportable segment revenue and total revenue, and a reconciliation of reportable
segment income or loss and total income or loss before tax is provided as follows:
(5) Information on products and services
Revenue Year ended December 31, 2018 Year ended December 31, 2017
Reportable segments revenue 30,492,689$ 30,768,632$
Other segments revenue 168,539 162,061
Elimination of intersegment
revenue
10,865,153)( 10,053,713)(
Total revenue 19,796,075$ 20,876,980$
Income/(Loss) Year ended December 31, 2018 Year ended December 31, 2017
Reportable segments income
(after tax) 1,313,984$ 435,231$
Other segments income (after
tax) 142,375 285,427
Elimination of intersegment
transactions - -
Income after tax from continuing
operations 1,456,359$ 720,658$
Year ended
December 31, 2018
Year ended
December 31, 2017
Sales revenue of computer products 14,568,469$ 14,131,511$
Rental revenue 3,720,007 3,937,113
Land development and resale from
Buynow 924,514 2,263,840
Hotel revenue 99,349 90,261
Other revenue 483,733 454,255
19,796,072$ 20,876,980$
-273-
(6) Geographical information
Geographical information for the years ended December 31, 2018 and 2017 is as follows:
Revenue Year ended December 31, 2018 Year ended December 31, 2017
Sales revenue of computer
products
China 4,706,583$ 4,645,879$
Japan 2,081,629 2,069,516
Germany 1,397,204 1,141,829
Taiwan 1,316,013 551,373
South Korea 715,164 782,752
United States 673,033 1,209,968
United Kingdom 575,370 505,569
Portugal 428,512 15,288
Brazil 351,984 241,482
Hong Kong 272,746 147,151
Russia 210,552 162,323
Turkey 209,743 537,165
India 181,301 86,773
Australia 179,672 197,307
Singapore 141,961 152,406
Malaysia 133,509 264,308
Bangladesh 110,939 87,680
Poland 100,450 79,505
Mexico 77,037 146,957
Netherlands 76,748 70,854
Others 628,319 1,035,426
14,568,469$ 14,131,511$
Revenue Year ended December 31, 2018 Year ended December 31, 2017
Rental revenue
China 3,560,757$ 3,783,016$
Japan 159,250 154,097
3,720,007 3,937,113
Land development and resale
China 924,514 2,263,840
Hotel revenue
China 99,349 99,349
Other revenue
China 482,927 453,489
Taiwan 806 766
483,733 454,255
Total revenue 19,796,072$ 20,876,980$
-274-
(7) Major customer information
The Company and its subsidiaries did not have customers which accounts for over 10% of sales
revenue in the statement of comprehensive income for the years ended December 31, 2018 and 2017.
Non-current assets Year ended December 31, 2018 Year ended December 31, 2017
China 78,869,139$ 81,862,246$
Japan 3,322,548$ 3,080,319$
Taiwan 1,944,763$ 1,934,870$
-275-
Item Value
1 Kapok Computer Co.,
Ltd.
The Company Other current
financial assets
Yes 50,000$ 50,000$ 50,000$ 1.04% 2 -$ additional
operating
capital
-$ - -$ 16,735,937$ 41,839,842$ Note 8
2 Clevo Investment Co.,
Ltd.
The Company Other current
financial assets
Yes 41,000 41,000 41,000 1.04% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
3 Clevo Computer
Singapore Ptd Ltd.
The Company Other non-current
financial assets
Yes 120,050 120,050 120,050 0.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
4 Clevo (Cayman
Islands) Holding
Company
The Company Other non-current
financial assets
Yes 831,114 - - bank loan
interest rate
2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
4 Clevo (Cayman
Islands) Holding
Company
Kapok Computer
(Samoa) Corporation
Other non-current
financial assets
Yes 892,678 892,678 523,294 3 months
LIBOR+1.5
%
2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
4 Clevo (Cayman
Islands) Holding
Company
Buynow Electronic
Information (Hangzhou)
Co., Ltd
Other current
financial assets
Yes 138,519 138,519 138,519 6 months
LIBOR+2.5
%
2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
4 Clevo (Cayman
Islands) Holding
Company
Buynow (Guangzhou)
Corporation
Other current
financial assets
Yes 138,519 138,519 138,519 6 months
LIBOR+1.5
%
2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
4 Clevo (Cayman
Islands) Holding
Company
Buynow (Xian) Industry
Co., Ltd.
Other current
financial assets
Yes 61,564 61,564 61,564 6 months
LIBOR+2.5
%
2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
4 Clevo (Cayman
Islands) Holding
Company
Buynow (Harbin)
Corporation
Other current
financial assets
Yes 90,807 90,807 90,807 6 months
LIBOR+1.5
%
2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
4 Clevo (Cayman
Islands) Holding
Company
Daqing Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 92,346 92,346 92,346 6 months
LIBOR+2.5
%
2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
4 Clevo (Cayman
Islands) Holding
Company
Zibo Buynow Electronic
Information Co., Ltd.
Other current
financial assets
Yes 92,346 92,346 92,346 6 months
LIBOR+2.5
%
2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
Maximum outstanding balance
during the year ended December
31, 2018
(Note 3)
Balance at
December 31,
2018
(Note 8)
Actual amount
drawn down
NO.
(Note 1)Creditor Borrower
General ledger
account
(Note 2)
Is a
related
party
CLEVO CO. and Subsidiaries
Loans to others
For the year ended December 31,2018
Table 1 Expressed in thousands of NTD
(Except as otherwise indicated)
Collateral Limit on loans granted
to a single party
(Note 7)
Ceiling on total
loans granted
(Note 7)
FootnoteInterest rateNature
of loan
Amount of transactions
with the borrower
(Note 5)
Reason for
short-term
financing
(Note 6)
Allowance
for doubtful
account
-276-
Item Value
Maximum outstanding balance
during the year ended December
31, 2018
(Note 3)
Balance at
December 31,
2018
(Note 8)
Actual amount
drawn down
NO.
(Note 1)Creditor Borrower
General ledger
account
(Note 2)
Is a
related
party
Collateral Limit on loans granted
to a single party
(Note 7)
Ceiling on total
loans granted
(Note 7)
FootnoteInterest rateNature
of loan
Amount of transactions
with the borrower
(Note 5)
Reason for
short-term
financing
(Note 6)
Allowance
for doubtful
account
4 Clevo (Cayman
Islands) Holding
Company
Buynow (Taizhou)
Corporation
Other current
financial assets
Yes 200,083 200,083 200,083 6 months
LIBOR+2%
2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
4 Clevo (Cayman
Islands) Holding
Company
Kunshan Kaishuo
Trading Co., Ltd.
Other non-current
financial assets
Yes 448,509$ 161,463$ 161,463$ 3.00% 2 -$ additional
operating
capital
-$ - -$ 16,735,937$ 41,839,842$ Note 8
5 Buynow Electronic
Information
(Hangzhou) Co., Ltd
Changsha Hungyu
Business Management
Co., Ltd.
Other current
financial assets
Yes 134,104 134,104 134,104 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
5 Buynow Electronic
Information
(Hangzhou) Co., Ltd
Shanghai Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 74,004 62,791 62,791 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
5 Buynow Electronic
Information
(Hangzhou) Co., Ltd
Buynow (Fujian)
Electronic Technology
development Co., Ltd.
Other current
financial assets
Yes 17,940 17,940 17,940 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
5 Buynow Electronic
Information
(Hangzhou) Co., Ltd
Buynow (Xian) Industry
Co., Ltd.
Other current
financial assets
Yes 141,729 141,729 141,729 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
5 Buynow Electronic
Information
(Hangzhou) Co., Ltd
Beijing Clevo Investment
Management Consultant
Co.,Ltd.
Other current
financial assets
Yes 29,153 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
5 Buynow Electronic
Information
(Hangzhou) Co., Ltd
Shantou Buynow Mall
Co., Ltd.
Other current
financial assets
Yes 130,068 65,034 65,034 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
5 Buynow Electronic
Information
(Hangzhou) Co., Ltd
Yingkou Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 16,954 16,954 16,954 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
5 Buynow Electronic
Information
(Hangzhou) Co., Ltd
Anshan Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 125,583 49,785 49,785 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
5 Buynow Electronic
Information
(Hangzhou) Co., Ltd
Guiyang Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 126,031 126,031 126,031 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
5 Buynow Electronic
Information
(Hangzhou) Co., Ltd
Dezhou Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 56,064 33,638 33,638 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
-277-
Item Value
Maximum outstanding balance
during the year ended December
31, 2018
(Note 3)
Balance at
December 31,
2018
(Note 8)
Actual amount
drawn down
NO.
(Note 1)Creditor Borrower
General ledger
account
(Note 2)
Is a
related
party
Collateral Limit on loans granted
to a single party
(Note 7)
Ceiling on total
loans granted
(Note 7)
FootnoteInterest rateNature
of loan
Amount of transactions
with the borrower
(Note 5)
Reason for
short-term
financing
(Note 6)
Allowance
for doubtful
account
5 Buynow Electronic
Information
(Hangzhou) Co., Ltd
Buynow (Jinzhou)
Industry Co., Ltd.
Other current
financial assets
Yes 26,462$ -$ -$ 5.00% 2 -$ additional
operating
capital
-$ - -$ 16,735,937$ 41,839,842$ Note 8
6 Buynow (Chengdu)
Electronic Information
Co., Ltd.
Changsha Hungyu
Business Management
Co., Ltd.
Other current
financial assets
Yes 29,153 29,153 29,153 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
6 Buynow (Chengdu)
Electronic Information
Co., Ltd.
Shanghai Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 242,195 242,195 242,195 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
6 Buynow (Chengdu)
Electronic Information
Co., Ltd.
Buynow (Nanchang)
Industry Co., Ltd.
Other current
financial assets
Yes 240,984 106,880 106,880 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
6 Buynow (Chengdu)
Electronic Information
Co., Ltd.
Buynow (Fujian)
Electronic Technology
development Co., Ltd.
Other current
financial assets
Yes 386,754 283,597 283,597 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
6 Buynow (Chengdu)
Electronic Information
Co., Ltd.
Buynow (Harbin)
Industry Co., Ltd.
Other current
financial assets
Yes 5,831 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
6 Buynow (Chengdu)
Electronic Information
Co., Ltd.
Daqing Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 31,844 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
6 Buynow (Chengdu)
Electronic Information
Co., Ltd.
Zibo Buynow Electronic
Information Co., Ltd.
Other current
financial assets
Yes 65,931 65,931 65,931 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
6 Buynow (Chengdu)
Electronic Information
Co., Ltd.
Buynow Electronic
Information (Hangzhou)
Co., Ltd
Other current
financial assets
Yes 68,308 68,308 68,308 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
6 Buynow (Chengdu)
Electronic Information
Co., Ltd.
Shantou Buynow Mall
Co., Ltd.
Other current
financial assets
Yes 309,292 207,032 207,032 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
6 Buynow (Chengdu)
Electronic Information
Co., Ltd.
Anshan Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 237,082 237,082 237,082 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
-278-
Item Value
Maximum outstanding balance
during the year ended December
31, 2018
(Note 3)
Balance at
December 31,
2018
(Note 8)
Actual amount
drawn down
NO.
(Note 1)Creditor Borrower
General ledger
account
(Note 2)
Is a
related
party
Collateral Limit on loans granted
to a single party
(Note 7)
Ceiling on total
loans granted
(Note 7)
FootnoteInterest rateNature
of loan
Amount of transactions
with the borrower
(Note 5)
Reason for
short-term
financing
(Note 6)
Allowance
for doubtful
account
6 Buynow (Chengdu)
Electronic Information
Co., Ltd.
Guiyang Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 41,487$ 41,487$ 41,487$ 5.00% 2 -$ additional
operating
capital
-$ - -$ 16,735,937$ 41,839,842$ Note 8
6 Buynow (Chengdu)
Electronic Information
Co., Ltd.
Quanzhou Buynow
Industry Co., Ltd.
Other current
financial assets
Yes 11,437 11,437 11,437 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
6 Buynow (Chengdu)
Electronic Information
Co., Ltd.
Buynow (Jinzhou)
Industry Co., Ltd.
Other current
financial assets
Yes 44,402 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
7 Buynow (Nanjing)
Facility Leasing And
Management Co., Ltd.
Changsha Hungyu
Business Management
Co., Ltd.
Other current
financial assets
Yes 11,661 5,158 5,158 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
7 Buynow (Nanjing)
Facility Leasing And
Management Co., Ltd.
Shanghai Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 157,158 152,000 152,000 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
7 Buynow (Nanjing)
Facility Leasing And
Management Co., Ltd.
Buynow (Nanchang)
Industry Co., Ltd.
Other current
financial assets
Yes 22,650 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
7 Buynow (Nanjing)
Facility Leasing And
Management Co., Ltd.
Buynow (Xian) Industry
Co., Ltd.
Other current
financial assets
Yes 50,726 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
7 Buynow (Nanjing)
Facility Leasing And
Management Co., Ltd.
Qingdao Buynow
Technology Industry Co.,
Ltd.
Other current
financial assets
Yes 2,243 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
7 Buynow (Nanjing)
Facility Leasing And
Management Co., Ltd.
Buynow (Harbin)
Industry Co., Ltd.
Other current
financial assets
Yes 32,741 32,741 32,741 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
7 Buynow (Nanjing)
Facility Leasing And
Management Co., Ltd.
Daqing Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 66,469 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
-279-
Item Value
Maximum outstanding balance
during the year ended December
31, 2018
(Note 3)
Balance at
December 31,
2018
(Note 8)
Actual amount
drawn down
NO.
(Note 1)Creditor Borrower
General ledger
account
(Note 2)
Is a
related
party
Collateral Limit on loans granted
to a single party
(Note 7)
Ceiling on total
loans granted
(Note 7)
FootnoteInterest rateNature
of loan
Amount of transactions
with the borrower
(Note 5)
Reason for
short-term
financing
(Note 6)
Allowance
for doubtful
account
7 Buynow (Nanjing)
Facility Leasing And
Management Co., Ltd.
Zibo Buynow Electronic
Information Co., Ltd.
Other current
financial assets
Yes 130,965$ 130,965$ 130,965$ 5.00% 2 -$ additional
operating
capital
-$ - -$ 16,735,937$ 41,839,842$ Note 8
7 Buynow (Nanjing)
Facility Leasing And
Management Co., Ltd.
Shantou Buynow Mall
Co., Ltd.
Other current
financial assets
Yes 130,068 113,921 113,921 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
7 Buynow (Nanjing)
Facility Leasing And
Management Co., Ltd.
Anshan Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 115,940 115,940 115,940 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
7 Buynow (Nanjing)
Facility Leasing And
Management Co., Ltd.
Taizhou Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 57,813 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
7 Buynow (Nanjing)
Facility Leasing And
Management Co., Ltd.
Dezhou Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 116,433 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
7 Buynow (Nanjing)
Facility Leasing And
Management Co., Ltd.
Luoyang Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 20,183 14,801 14,801 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
8 Kapok Computer
(Kunshan) Co., Ltd.
Shanghai Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 91,586 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
8 Kapok Computer
(Kunshan) Co., Ltd.
Buynow (Nanchang)
Industry Co., Ltd.
Other current
financial assets
Yes 592,032 210,799 210,799 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
8 Kapok Computer
(Kunshan) Co., Ltd.
Buynow (Xian) Industry
Co., Ltd.
Other current
financial assets
Yes 406,215 406,215 406,215 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
8 Kapok Computer
(Kunshan) Co., Ltd.
Qingdao Buynow
Technology Industry Co.,
Ltd.
Other current
financial assets
Yes 134,956 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
8 Kapok Computer
(Kunshan) Co., Ltd.
Buynow (Harbin)
Industry Co., Ltd.
Other current
financial assets
Yes 559,605 559,605 559,605 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
-280-
Item Value
Maximum outstanding balance
during the year ended December
31, 2018
(Note 3)
Balance at
December 31,
2018
(Note 8)
Actual amount
drawn down
NO.
(Note 1)Creditor Borrower
General ledger
account
(Note 2)
Is a
related
party
Collateral Limit on loans granted
to a single party
(Note 7)
Ceiling on total
loans granted
(Note 7)
FootnoteInterest rateNature
of loan
Amount of transactions
with the borrower
(Note 5)
Reason for
short-term
financing
(Note 6)
Allowance
for doubtful
account
8 Kapok Computer
(Kunshan) Co., Ltd.
Beijing Kaiye Electronic
Technology Co., Ltd.
Other current
financial assets
Yes 171,330$ -$ -$ 5.00% 2 -$ additional
operating
capital
-$ - -$ 16,735,937$ 41,839,842$ Note 8
8 Kapok Computer
(Kunshan) Co., Ltd.
Daqing Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 74,677 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
8 Kapok Computer
(Kunshan) Co., Ltd.
Shantou Buynow Mall
Co., Ltd.
Other current
financial assets
Yes 736,093 736,093 736,093 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
8 Kapok Computer
(Kunshan) Co., Ltd.
Yingkou Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 85,217 85,217 85,217 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
8 Kapok Computer
(Kunshan) Co., Ltd.
Guiyang Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 446,267 446,267 446,267 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
8 Kapok Computer
(Kunshan) Co., Ltd.
Dezhou Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 568,261 568,261 568,261 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
8 Kapok Computer
(Kunshan) Co., Ltd.
Buynow (Jinzhou)
Industry Co., Ltd.
Other current
financial assets
Yes 214,522 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
9 Buynow (Nanchang)
Industry Co., Ltd.
Buynow (Xian) Industry
Co., Ltd.
Other current
financial assets
Yes 84,320 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
9 Buynow (Nanchang)
Industry Co., Ltd.
Daqing Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 12,334 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
9 Buynow (Nanchang)
Industry Co., Ltd.
Beijing Clevo Investment
Management Consultant
Co.,Ltd.
Other current
financial assets
Yes 248,698 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
9 Buynow (Nanchang)
Industry Co., Ltd.
Clevo (China)
Investment Co., Ltd.
Other current
financial assets
Yes 260,135 260,135 260,135 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
9 Buynow (Nanchang)
Industry Co., Ltd.
Guiyang Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 227,932 227,932 227,932 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
9 Buynow (Nanchang)
Industry Co., Ltd.
Dezhou Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 451,649 64,810 64,810 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
9 Buynow (Nanchang)
Industry Co., Ltd.
Buynow (Jinzhou)
Industry Co., Ltd.
Other current
financial assets
Yes 230,758 70,864 70,864 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
-281-
Item Value
Maximum outstanding balance
during the year ended December
31, 2018
(Note 3)
Balance at
December 31,
2018
(Note 8)
Actual amount
drawn down
NO.
(Note 1)Creditor Borrower
General ledger
account
(Note 2)
Is a
related
party
Collateral Limit on loans granted
to a single party
(Note 7)
Ceiling on total
loans granted
(Note 7)
FootnoteInterest rateNature
of loan
Amount of transactions
with the borrower
(Note 5)
Reason for
short-term
financing
(Note 6)
Allowance
for doubtful
account
10 Buynow (Zhengzhou)
Electronic Information
Co., Ltd.
Changsha Hungyu
Business Management
Co., Ltd.
Other current
financial assets
Yes 79,700$ 64,451$ 64,451$ 5.00% 2 -$ additional
operating
capital
-$ - -$ 16,735,937$ 41,839,842$ Note 8
10 Buynow (Zhengzhou)
Electronic Information
Co., Ltd.
Shanghai Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 229,457 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
10 Buynow (Zhengzhou)
Electronic Information
Co., Ltd.
Buynow (Fujian)
Electronic Technology
development Co., Ltd.
Other current
financial assets
Yes 8,970 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
10 Buynow (Zhengzhou)
Electronic Information
Co., Ltd.
Qingdao Buynow
Technology Industry Co.,
Ltd.
Other current
financial assets
Yes 4,485 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
10 Buynow (Zhengzhou)
Electronic Information
Co., Ltd.
Buynow (Harbin)
Industry Co., Ltd.
Other current
financial assets
Yes 149,981 149,981 149,981 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
10 Buynow (Zhengzhou)
Electronic Information
Co., Ltd.
Shanghai Buynow
Computer Market
Management Co., Ltd.
Other current
financial assets
Yes 31,396 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
10 Buynow (Zhengzhou)
Electronic Information
Co., Ltd.
Beijing Kaiye Electronic
Technology Co., Ltd.
Other current
financial assets
Yes 146,304 146,304 146,304 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
10 Buynow (Zhengzhou)
Electronic Information
Co., Ltd.
Daqing Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 53,238 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
10 Buynow (Zhengzhou)
Electronic Information
Co., Ltd.
Beijing Clevo Investment
Management Consultant
Co.,Ltd.
Other current
financial assets
Yes 105,848 43,057 43,057 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
10 Buynow (Zhengzhou)
Electronic Information
Co., Ltd.
Buynow Electronic
Information (Hangzhou)
Co., Ltd
Other current
financial assets
Yes 45,748 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
10 Buynow (Zhengzhou)
Electronic Information
Co., Ltd.
Shantou Buynow Mall
Co., Ltd.
Other current
financial assets
Yes 91,047 91,047 91,047 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
-282-
Item Value
Maximum outstanding balance
during the year ended December
31, 2018
(Note 3)
Balance at
December 31,
2018
(Note 8)
Actual amount
drawn down
NO.
(Note 1)Creditor Borrower
General ledger
account
(Note 2)
Is a
related
party
Collateral Limit on loans granted
to a single party
(Note 7)
Ceiling on total
loans granted
(Note 7)
FootnoteInterest rateNature
of loan
Amount of transactions
with the borrower
(Note 5)
Reason for
short-term
financing
(Note 6)
Allowance
for doubtful
account
10 Buynow (Zhengzhou)
Electronic Information
Co., Ltd.
Clevo (China)
Investment Co., Ltd.
Other current
financial assets
Yes 4,485$ -$ -$ 5.00% 2 -$ additional
operating
capital
-$ - -$ 16,735,937$ 41,839,842$ Note 8
10 Buynow (Zhengzhou)
Electronic Information
Co., Ltd.
Anshan Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 26,014 26,014 26,014 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
10 Buynow (Zhengzhou)
Electronic Information
Co., Ltd.
Guiyang Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 86,876 86,876 86,876 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
10 Buynow (Zhengzhou)
Electronic Information
Co., Ltd.
Taizhou Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 21,080 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
10 Buynow (Zhengzhou)
Electronic Information
Co., Ltd.
Dezhou Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 54,718 37,899 37,899 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
10 Buynow (Zhengzhou)
Electronic Information
Co., Ltd.
Quanzhou Buynow
Industry Co., Ltd.
Other current
financial assets
Yes 15,249 15,249 15,249 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
10 Buynow (Zhengzhou)
Electronic Information
Co., Ltd.
Buynow (Jinzhou)
Industry Co., Ltd.
Other current
financial assets
Yes 51,579 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
11 Buynow (Guangzhou)
Corporation
Buynow(Guangzhou)
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 153,910 153,910 153,910 6 months
LIBOR+2.5
%
2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
12 Buynow Electronic
Information
(Shenyang) Co., Ltd.
Changsha Hungyu
Business Management
Co., Ltd.
Other current
financial assets
Yes 158,996 103,381 103,381 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
12 Buynow Electronic
Information
(Shenyang) Co., Ltd.
Qingdao Buynow
Technology Industry Co.,
Ltd.
Other current
financial assets
Yes 21,892 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
12 Buynow Electronic
Information
(Shenyang) Co., Ltd.
Buynow (Harbin)
Industry Co., Ltd.
Other current
financial assets
Yes 13,680 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
-283-
Item Value
Maximum outstanding balance
during the year ended December
31, 2018
(Note 3)
Balance at
December 31,
2018
(Note 8)
Actual amount
drawn down
NO.
(Note 1)Creditor Borrower
General ledger
account
(Note 2)
Is a
related
party
Collateral Limit on loans granted
to a single party
(Note 7)
Ceiling on total
loans granted
(Note 7)
FootnoteInterest rateNature
of loan
Amount of transactions
with the borrower
(Note 5)
Reason for
short-term
financing
(Note 6)
Allowance
for doubtful
account
12 Buynow Electronic
Information
(Shenyang) Co., Ltd.
Zibo Buynow Electronic
Information Co., Ltd.
Other current
financial assets
Yes 29,153$ 29,153$ 29,153$ 5.00% 2 -$ additional
operating
capital
-$ - -$ 16,735,937$ 41,839,842$ Note 8
12 Buynow Electronic
Information
(Shenyang) Co., Ltd.
Yingkou Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 136,840 136,840 136,840 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
12 Buynow Electronic
Information
(Shenyang) Co., Ltd.
Anshan Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 6,189 6,189 6,189 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
12 Buynow Electronic
Information
(Shenyang) Co., Ltd.
Guiyang Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 17,268 17,268 17,268 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
12 Buynow Electronic
Information
(Shenyang) Co., Ltd.
Dezhou Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 26,955 26,955 26,955 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
13 Buynow (Fujian)
Electronic Technology
Development Co.,
Ltd.
Changsha Hungyu
Business Management
Co., Ltd.
Other current
financial assets
Yes 7,894 7,894 7,894 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
13 Buynow (Fujian)
Electronic Technology
Development Co.,
Ltd.
Shanghai Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 74,004 74,004 74,004 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
13 Buynow (Fujian)
Electronic Technology
Development Co.,
Ltd.
Buynow (Nanchang)
Industry Co., Ltd.
Other current
financial assets
Yes 2,691 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
13 Buynow (Fujian)
Electronic Technology
Development Co.,
Ltd.
Buynow(Guangzhou)
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 63,688 57,006 57,006 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
13 Buynow (Fujian)
Electronic Technology
Development Co.,
Ltd.
Buynow (Xian) Industry
Co., Ltd.
Other current
financial assets
Yes 129,126 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
13 Buynow (Fujian)
Electronic Technology
Development Co.,
Ltd.
Qingdao Buynow
Technology Industry Co.,
Ltd.
Other current
financial assets
Yes 6,728 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
-284-
Item Value
Maximum outstanding balance
during the year ended December
31, 2018
(Note 3)
Balance at
December 31,
2018
(Note 8)
Actual amount
drawn down
NO.
(Note 1)Creditor Borrower
General ledger
account
(Note 2)
Is a
related
party
Collateral Limit on loans granted
to a single party
(Note 7)
Ceiling on total
loans granted
(Note 7)
FootnoteInterest rateNature
of loan
Amount of transactions
with the borrower
(Note 5)
Reason for
short-term
financing
(Note 6)
Allowance
for doubtful
account
13 Buynow (Fujian)
Electronic Technology
Development Co.,
Ltd.
Buynow (Harbin)
Industry Co., Ltd.
Other current
financial assets
Yes 136,123$ 136,123$ 136,123$ 5.00% 2 -$ additional
operating
capital
-$ - -$ 16,735,937$ 41,839,842$ Note 8
13 Buynow (Fujian)
Electronic Technology
Development Co.,
Ltd.
Beijing Kaiye Electronic
Technology Co., Ltd.
Other current
financial assets
Yes 80,732 80,732 80,732 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
13 Buynow (Fujian)
Electronic Technology
Development Co.,
Ltd.
Daqing Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 255,381 255,157 255,157 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
13 Buynow (Fujian)
Electronic Technology
Development Co.,
Ltd.
Zibo Buynow Electronic
Information Co., Ltd.
Other current
financial assets
Yes 48,215 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
13 Buynow (Fujian)
Electronic Technology
Development Co.,
Ltd.
Buynow Electronic
Information (Hangzhou)
Co., Ltd
Other current
financial assets
Yes 55,032 55,032 55,032 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
13 Buynow (Fujian)
Electronic Technology
Development Co.,
Ltd.
Shantou Buynow Mall
Co., Ltd.
Other current
financial assets
Yes 135,311 110,643 110,643 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
13 Buynow (Fujian)
Electronic Technology
Development Co.,
Ltd.
Anshan Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 29,602 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
13 Buynow (Fujian)
Electronic Technology
Development Co.,
Ltd.
Guiyang Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 31,844 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
13 Buynow (Fujian)
Electronic Technology
Development Co.,
Ltd.
Suzhou Jinzuo Industry
Co., Ltd.
Other current
financial assets
Yes 62,298 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
13 Buynow (Fujian)
Electronic Technology
Development Co.,
Ltd.
Taizhou Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 84,634 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
13 Buynow (Fujian)
Electronic Technology
Development Co.,
Ltd.
Dezhou Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 114,370 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
-285-
Item Value
Maximum outstanding balance
during the year ended December
31, 2018
(Note 3)
Balance at
December 31,
2018
(Note 8)
Actual amount
drawn down
NO.
(Note 1)Creditor Borrower
General ledger
account
(Note 2)
Is a
related
party
Collateral Limit on loans granted
to a single party
(Note 7)
Ceiling on total
loans granted
(Note 7)
FootnoteInterest rateNature
of loan
Amount of transactions
with the borrower
(Note 5)
Reason for
short-term
financing
(Note 6)
Allowance
for doubtful
account
13 Buynow (Fujian)
Electronic Technology
Development Co.,
Ltd.
Quanzhou Buynow
Industry Co., Ltd.
Other current
financial assets
Yes 89,702$ 85,217$ 85,217$ 5.00% 2 -$ additional
operating
capital
-$ - -$ 16,735,937$ 41,839,842$ Note 8
13 Buynow (Fujian)
Electronic Technology
Development Co.,
Ltd.
Xiamen Lejing Internet
Bar Co., Ltd.
Other current
financial assets
Yes 897 449 449 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
14 Buynow (Xian)
Industry Co., Ltd.
Guiyang Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 121,097 35,881 35,881 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
15 Buynow (Changchun)
Industry Co., Ltd.
Shanghai Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 155,812 155,812 155,812 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
15 Buynow (Changchun)
Industry Co., Ltd.
Buynow(Guangzhou)
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 37,630 36,284 36,284 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
15 Buynow (Changchun)
Industry Co., Ltd.
Buynow (Harbin)
Industry Co., Ltd.
Other current
financial assets
Yes 170,653 111,899 111,899 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
15 Buynow (Changchun)
Industry Co., Ltd.
Zibo Buynow Electronic
Information Co., Ltd.
Other current
financial assets
Yes 143,828 143,828 143,828 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
15 Buynow (Changchun)
Industry Co., Ltd.
Beijing Clevo Investment
Management Consultant
Co.,Ltd.
Other current
financial assets
Yes 13,455 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
15 Buynow (Changchun)
Industry Co., Ltd.
Buynow Electronic
Information (Hangzhou)
Co., Ltd
Other current
financial assets
Yes 4,485 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
15 Buynow (Changchun)
Industry Co., Ltd.
Shantou Buynow Mall
Co., Ltd.
Other current
financial assets
Yes 22,425 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
15 Buynow (Changchun)
Industry Co., Ltd.
Anshan Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 87,459 16,415 16,415 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
15 Buynow (Changchun)
Industry Co., Ltd.
Suzhou Jinzuo Industry
Co., Ltd.
Other current
financial assets
Yes 78,489 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
15 Buynow (Changchun)
Industry Co., Ltd.
Dezhou Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 132,938 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
-286-
Item Value
Maximum outstanding balance
during the year ended December
31, 2018
(Note 3)
Balance at
December 31,
2018
(Note 8)
Actual amount
drawn down
NO.
(Note 1)Creditor Borrower
General ledger
account
(Note 2)
Is a
related
party
Collateral Limit on loans granted
to a single party
(Note 7)
Ceiling on total
loans granted
(Note 7)
FootnoteInterest rateNature
of loan
Amount of transactions
with the borrower
(Note 5)
Reason for
short-term
financing
(Note 6)
Allowance
for doubtful
account
15 Buynow (Changchun)
Industry Co., Ltd.
Luoyang Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 4,485$ 4,485$ 4,485$ 5.00% 2 -$ additional
operating
capital
-$ - -$ 16,735,937$ 41,839,842$ Note 8
15 Buynow (Changchun)
Industry Co., Ltd.
Quanzhou Buynow
Industry Co., Ltd.
Other current
financial assets
Yes 32,696 32,696 32,696 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
15 Buynow (Changchun)
Industry Co., Ltd.
Buynow (Jinzhou)
Industry Co., Ltd.
Other current
financial assets
Yes 46,241 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
16 Buynow (Wuxi)
Electronic Technology
Development Co.,
Ltd.
Shanghai Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 32,382 28,346 28,346 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
16 Buynow (Wuxi)
Electronic Technology
Development Co.,
Ltd.
Buynow (Nanchang)
Industry Co., Ltd.
Other current
financial assets
Yes 4,485 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
16 Buynow (Wuxi)
Electronic Technology
Development Co.,
Ltd.
Buynow (Xian) Industry
Co., Ltd.
Other current
financial assets
Yes 64,361 48,663 48,663 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
16 Buynow (Wuxi)
Electronic Technology
Development Co.,
Ltd.
Buynow (Harbin)
Industry Co., Ltd.
Other current
financial assets
Yes 63,150 49,695 49,695 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
16 Buynow (Wuxi)
Electronic Technology
Development Co.,
Ltd.
Clevo (China)
Investment Co., Ltd.
Other current
financial assets
Yes 6,728 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
16 Buynow (Wuxi)
Electronic Technology
Development Co.,
Ltd.
Anshan Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 49,336 49,336 49,336 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
16 Buynow (Wuxi)
Electronic Technology
Development Co.,
Ltd.
Dezhou Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 77,233 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
16 Buynow (Wuxi)
Electronic Technology
Development Co.,
Ltd.
Quanzhou Buynow
Industry Co., Ltd.
Other current
financial assets
Yes 22,425 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
16 Buynow (Wuxi)
Electronic Technology
Development Co.,
Ltd.
Buynow (Jinzhou)
Industry Co., Ltd.
Other current
financial assets
Yes 9,867 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
-287-
Item Value
Maximum outstanding balance
during the year ended December
31, 2018
(Note 3)
Balance at
December 31,
2018
(Note 8)
Actual amount
drawn down
NO.
(Note 1)Creditor Borrower
General ledger
account
(Note 2)
Is a
related
party
Collateral Limit on loans granted
to a single party
(Note 7)
Ceiling on total
loans granted
(Note 7)
FootnoteInterest rateNature
of loan
Amount of transactions
with the borrower
(Note 5)
Reason for
short-term
financing
(Note 6)
Allowance
for doubtful
account
17 Quality Trust Property
Management Co., Ltd.
Shanghai Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 4,485$ 4,485$ 4,485$ 5.00% 2 -$ additional
operating
capital
-$ - -$ 16,735,937$ 41,839,842$ Note 8
17 Quality Trust Property
Management Co., Ltd.
Daqing Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 2,243 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
17 Quality Trust Property
Management Co., Ltd.
Buynow (Xian) Industry
Co., Ltd.
Other current
financial assets
Yes 58,306 38,123 38,123 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
17 Quality Trust Property
Management Co., Ltd.
Quanzhou Buynow
Industry Co., Ltd.
Other current
financial assets
Yes 1,794 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
17 Quality Trust Property
Management Co., Ltd.
Luoyang Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 19,062 13,455 13,455 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
17 Quality Trust Property
Management Co., Ltd.
Zibo Buynow Electronic
Information Co., Ltd.
Other current
financial assets
Yes 40,814 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
17 Quality Trust Property
Management Co., Ltd.
Buynow(Guangzhou)
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 36,329 36,329 36,329 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
17 Quality Trust Property
Management Co., Ltd.
Anshan Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 76,605 76,605 76,605 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
17 Quality Trust Property
Management Co., Ltd.
Guiyang Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 8,970 8,970 8,970 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
17 Quality Trust Property
Management Co., Ltd.
Suzhou Jinzuo Industry
Co., Ltd.
Other current
financial assets
Yes 35,881 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
18 Buynow (Harbin)
Corporation
Buynow (Harbin)
Industry Co., Ltd.
Other current
financial assets
Yes 92,346 92,346 92,346 6 months
LIBOR+2.5
%
2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
19 Kalor Buynow
(Heifei) Electronic
Information Co., Ltd.
Shanghai Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 108,629 108,629 108,629 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
19 Kalor Buynow
(Heifei) Electronic
Information Co., Ltd.
Buynow (Nanchang)
Industry Co., Ltd.
Other current
financial assets
Yes 5,382 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
-288-
Item Value
Maximum outstanding balance
during the year ended December
31, 2018
(Note 3)
Balance at
December 31,
2018
(Note 8)
Actual amount
drawn down
NO.
(Note 1)Creditor Borrower
General ledger
account
(Note 2)
Is a
related
party
Collateral Limit on loans granted
to a single party
(Note 7)
Ceiling on total
loans granted
(Note 7)
FootnoteInterest rateNature
of loan
Amount of transactions
with the borrower
(Note 5)
Reason for
short-term
financing
(Note 6)
Allowance
for doubtful
account
19 Kalor Buynow
(Heifei) Electronic
Information Co., Ltd.
Buynow (Fujian)
Electronic Technology
Development Co., Ltd.
Other current
financial assets
Yes 216,868$ 9,028$ 9,028$ 5.00% 2 -$ additional
operating
capital
-$ - -$ 16,735,937$ 41,839,842$ Note 8
19 Kalor Buynow
(Heifei) Electronic
Information Co., Ltd.
Buynow (Xian) Industry
Co., Ltd.
Other current
financial assets
Yes 3,140 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
19 Kalor Buynow
(Heifei) Electronic
Information Co., Ltd.
Buynow (Harbin)
Industry Co., Ltd.
Other current
financial assets
Yes 120,649 120,649 120,649 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
19 Kalor Buynow
(Heifei) Electronic
Information Co., Ltd.
Shanghai Buynow
Computer Market
Management Co., Ltd.
Other current
financial assets
Yes 17,940 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
19 Kalor Buynow
(Heifei) Electronic
Information Co., Ltd.
Zibo Buynow Electronic
Information Co., Ltd.
Other current
financial assets
Yes 31,396 31,396 31,396 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
19 Kalor Buynow
(Heifei) Electronic
Information Co., Ltd.
Beijing Clevo Investment
Management Consultant
Co.,Ltd.
Other current
financial assets
Yes 26,911 26,911 26,911 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
19 Kalor Buynow
(Heifei) Electronic
Information Co., Ltd.
Buynow Electronic
Information (Huizhou)
Co., Ltd
Other current
financial assets
Yes 28,705 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
19 Kalor Buynow
(Heifei) Electronic
Information Co., Ltd.
Clevo (China)
Investment Co., Ltd.
Other current
financial assets
Yes 87,459 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
19 Kalor Buynow
(Heifei) Electronic
Information Co., Ltd.
Anshan Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 47,093 41,711 41,711 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
19 Kalor Buynow
(Heifei) Electronic
Information Co., Ltd.
Taizhou Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 39,469 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
19 Kalor Buynow
(Heifei) Electronic
Information Co., Ltd.
Dezhou Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 37,226 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
-289-
Item Value
Maximum outstanding balance
during the year ended December
31, 2018
(Note 3)
Balance at
December 31,
2018
(Note 8)
Actual amount
drawn down
NO.
(Note 1)Creditor Borrower
General ledger
account
(Note 2)
Is a
related
party
Collateral Limit on loans granted
to a single party
(Note 7)
Ceiling on total
loans granted
(Note 7)
FootnoteInterest rateNature
of loan
Amount of transactions
with the borrower
(Note 5)
Reason for
short-term
financing
(Note 6)
Allowance
for doubtful
account
19 Kalor Buynow
(Heifei) Electronic
Information Co., Ltd.
Luoyang Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 159,705$ 159,705$ 159,705$ 5.00% 2 -$ additional
operating
capital
-$ - -$ 16,735,937$ 41,839,842$ Note 8
19 Kalor Buynow
(Heifei) Electronic
Information Co., Ltd.
Quanzhou Buynow
Industry Co., Ltd.
Other current
financial assets
Yes 4,485 4,485 4,485 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
19 Kalor Buynow
(Heifei) Electronic
Information Co., Ltd.
Buynow (Jinzhou)
Industry Co., Ltd.
Other current
financial assets
Yes 37,361 15,698 15,698 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
20 Wuxi Quntai Property
Management Co., Ltd.
Quality Trust Property
Management Co., Ltd.
Other current
financial assets
Yes 3,588 3,588 3,588 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
20 Wuxi Quntai Property
Management Co., Ltd.
Zibo Buynow Electronic
Information Co., Ltd.
Other current
financial assets
Yes 3,588 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
20 Wuxi Quntai Property
Management Co., Ltd.
Anshan Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 9,867 9,867 9,867 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
20 Wuxi Quntai Property
Management Co., Ltd.
Luoyang Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 2,691 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
20 Wuxi Quntai Property
Management Co., Ltd.
Buynow (Jinzhou)
Industry Co., Ltd.
Other current
financial assets
Yes 7,176 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
21 Buynow (Chongqing)
Industry Co., Ltd.
Qingdao Buynow
Technology Industry Co.,
Ltd.
Other current
financial assets
Yes 38,123 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
21 Buynow (Chongqing)
Industry Co., Ltd.
Daqing Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 20,631 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
21 Buynow (Chongqing)
Industry Co., Ltd.
Zibo Buynow Electronic
Information Co., Ltd.
Other current
financial assets
Yes 90,868 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
21 Buynow (Chongqing)
Industry Co., Ltd.
Beijing Clevo Investment
Management Consultant
Co.,Ltd.
Other current
financial assets
Yes 62,612 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
21 Buynow (Chongqing)
Industry Co., Ltd.
Shantou Buynow Mall
Co., Ltd.
Other current
financial assets
Yes 223,985 218,603 218,603 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
-290-
Item Value
Maximum outstanding balance
during the year ended December
31, 2018
(Note 3)
Balance at
December 31,
2018
(Note 8)
Actual amount
drawn down
NO.
(Note 1)Creditor Borrower
General ledger
account
(Note 2)
Is a
related
party
Collateral Limit on loans granted
to a single party
(Note 7)
Ceiling on total
loans granted
(Note 7)
FootnoteInterest rateNature
of loan
Amount of transactions
with the borrower
(Note 5)
Reason for
short-term
financing
(Note 6)
Allowance
for doubtful
account
21 Buynow (Chongqing)
Industry Co., Ltd.
Buynow (Jinzhou)
Industry Co., Ltd.
Other current
financial assets
Yes 2,691$ -$ -$ 5.00% 2 -$ additional
operating
capital
-$ - -$ 16,735,937$ 41,839,842$ Note 8
22 Shanghai Buynow
Electronic Products
Market Management
Co., Ltd.
Shanghai Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 344,455 179 179 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
22 Shanghai Buynow
Electronic Products
Market Management
Co., Ltd.
Buynow (Nanchang)
Industry Co., Ltd.
Other current
financial assets
Yes 251,075 52,386 52,386 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
22 Shanghai Buynow
Electronic Products
Market Management
Co., Ltd.
Buynow(Guangzhou)
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 38,168 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
22 Shanghai Buynow
Electronic Products
Market Management
Co., Ltd.
Buynow (Fujian)
Electronic Technology
development Co., Ltd.
Other current
financial assets
Yes 188,374 75,798 75,798 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
22 Shanghai Buynow
Electronic Products
Market Management
Co., Ltd.
Buynow (Xian) Industry
Co., Ltd.
Other current
financial assets
Yes 12,558 12,558 12,558 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
22 Shanghai Buynow
Electronic Products
Market Management
Co., Ltd.
Qingdao Buynow
Technology Industry Co.,
Ltd.
Other current
financial assets
Yes 159,445 45,748 45,748 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
22 Shanghai Buynow
Electronic Products
Market Management
Co., Ltd.
Daqing Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 168,146 159,176 159,176 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
22 Shanghai Buynow
Electronic Products
Market Management
Co., Ltd.
Tianjin Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 58,306 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
22 Shanghai Buynow
Electronic Products
Market Management
Co., Ltd.
Zibo Buynow Electronic
Information Co., Ltd.
Other current
financial assets
Yes 82,750 35,881 35,881 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
22 Shanghai Buynow
Electronic Products
Market Management
Co., Ltd.
Buynow Electronic
Information (Huizhou)
Co., Ltd
Other current
financial assets
Yes 118,406 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
-291-
Item Value
Maximum outstanding balance
during the year ended December
31, 2018
(Note 3)
Balance at
December 31,
2018
(Note 8)
Actual amount
drawn down
NO.
(Note 1)Creditor Borrower
General ledger
account
(Note 2)
Is a
related
party
Collateral Limit on loans granted
to a single party
(Note 7)
Ceiling on total
loans granted
(Note 7)
FootnoteInterest rateNature
of loan
Amount of transactions
with the borrower
(Note 5)
Reason for
short-term
financing
(Note 6)
Allowance
for doubtful
account
22 Shanghai Buynow
Electronic Products
Market Management
Co., Ltd.
Shantou Buynow Mall
Co., Ltd.
Other current
financial assets
Yes 7,176$ -$ -$ 5.00% 2 -$ additional
operating
capital
-$ - -$ 16,735,937$ 41,839,842$ Note 8
22 Shanghai Buynow
Electronic Products
Market Management
Co., Ltd.
Anshan Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 401,416 401,416 401,416 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
22 Shanghai Buynow
Electronic Products
Market Management
Co., Ltd.
Guiyang Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 178,596 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
22 Shanghai Buynow
Electronic Products
Market Management
Co., Ltd.
Taizhou Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 49,336 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
22 Shanghai Buynow
Electronic Products
Market Management
Co., Ltd.
Dezhou Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 397,155 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
22 Shanghai Buynow
Electronic Products
Market Management
Co., Ltd.
Luoyang Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 4,485 4,485 4,485 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
22 Shanghai Buynow
Electronic Products
Market Management
Co., Ltd.
Quanzhou Buynow
Industry Co., Ltd.
Other current
financial assets
Yes 51,579 51,579 51,579 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
22 Shanghai Buynow
Electronic Products
Market Management
Co., Ltd.
Buynow (Jinzhou)
Industry Co., Ltd.
Other current
financial assets
Yes 47,093 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
22 Shanghai Buynow
Electronic Products
Market Management
Co., Ltd.
Shanghai Huizhuan
Restaurant Management
Co., Ltd.
Other current
financial assets
Yes 20,183 20,183 20,183 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
23 Tianjin Buynow
Electronic Information
Co., Ltd.
Shanghai Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 177,610 81,629 81,629 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
23 Tianjin Buynow
Electronic Information
Co., Ltd.
Buynow (Fujian)
Electronic Technology
development Co., Ltd.
Other current
financial assets
Yes 154,736 154,736 154,736 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
23 Tianjin Buynow
Electronic Information
Co., Ltd.
Buynow (Xian) Industry
Co., Ltd.
Other current
financial assets
Yes 147,559 84,768 84,768 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
-292-
Item Value
Maximum outstanding balance
during the year ended December
31, 2018
(Note 3)
Balance at
December 31,
2018
(Note 8)
Actual amount
drawn down
NO.
(Note 1)Creditor Borrower
General ledger
account
(Note 2)
Is a
related
party
Collateral Limit on loans granted
to a single party
(Note 7)
Ceiling on total
loans granted
(Note 7)
FootnoteInterest rateNature
of loan
Amount of transactions
with the borrower
(Note 5)
Reason for
short-term
financing
(Note 6)
Allowance
for doubtful
account
23 Tianjin Buynow
Electronic Information
Co., Ltd.
Qingdao Buynow
Technology Industry Co.,
Ltd.
Other current
financial assets
Yes 265,338$ 188,194$ 188,194$ 5.00% 2 -$ additional
operating
capital
-$ - -$ 16,735,937$ 41,839,842$ Note 8
23 Tianjin Buynow
Electronic Information
Co., Ltd.
Zibo Buynow Electronic
Information Co., Ltd.
Other current
financial assets
Yes 47,800 36,329 36,329 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
23 Tianjin Buynow
Electronic Information
Co., Ltd.
Shantou Buynow Mall
Co., Ltd.
Other current
financial assets
Yes 154,870 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
23 Tianjin Buynow
Electronic Information
Co., Ltd.
Anshan Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 125,941 125,941 125,941 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
23 Tianjin Buynow
Electronic Information
Co., Ltd.
Guiyang Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 116,612 116,612 116,612 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
23 Tianjin Buynow
Electronic Information
Co., Ltd.
Taizhou Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 36,329 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
23 Tianjin Buynow
Electronic Information
Co., Ltd.
Dezhou Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 74,453 74,453 74,453 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
23 Tianjin Buynow
Electronic Information
Co., Ltd.
Luoyang Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 84,275 70,820 70,820 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
23 Tianjin Buynow
Electronic Information
Co., Ltd.
Quanzhou Buynow
Industry Co., Ltd.
Other current
financial assets
Yes 14,352 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
23 Tianjin Buynow
Electronic Information
Co., Ltd.
Buynow (Jinzhou)
Industry Co., Ltd.
Other current
financial assets
Yes 38,123 11,213 11,213 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
24 Buynow (Yancheng)
Electronoc
Information
Technology
Development Co. Ltd.
Beijing Kaiye Electronic
Technology Co., Ltd.
Other current
financial assets
Yes 22,425 22,425 22,425 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
24 Buynow (Yancheng)
Electronoc
Information
Technology
Development Co. Ltd.
Daqing Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 31,396 31,396 31,396 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
-293-
Item Value
Maximum outstanding balance
during the year ended December
31, 2018
(Note 3)
Balance at
December 31,
2018
(Note 8)
Actual amount
drawn down
NO.
(Note 1)Creditor Borrower
General ledger
account
(Note 2)
Is a
related
party
Collateral Limit on loans granted
to a single party
(Note 7)
Ceiling on total
loans granted
(Note 7)
FootnoteInterest rateNature
of loan
Amount of transactions
with the borrower
(Note 5)
Reason for
short-term
financing
(Note 6)
Allowance
for doubtful
account
24 Buynow (Yancheng)
Electronoc
Information
Technology
Development Co. Ltd.
Shantou Buynow Mall
Co., Ltd.
Other current
financial assets
Yes 499,415$ 499,415$ 499,415$ 5.00% 2 -$ additional
operating
capital
-$ - -$ 16,735,937$ 41,839,842$ Note 8
24 Buynow (Yancheng)
Electronoc
Information
Technology
Development Co. Ltd.
Dezhou Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 130,068 130,068 130,068 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
24 Buynow (Yancheng)
Electronoc
Information
Technology
Development Co. Ltd.
Luoyang Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 25,341 25,341 25,341 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
25 Beijing Clevo
Investment
Management
Consultant Co.,Ltd.
Shanghai Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 222,461 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
25 Beijing Clevo
Investment
Management
Consultant Co.,Ltd.
Qingdao Buynow
Technology Industry Co.,
Ltd.
Other current
financial assets
Yes 227,439 227,439 227,439 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
25 Beijing Clevo
Investment
Management
Consultant Co.,Ltd.
Daqing Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 179,583 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
25 Beijing Clevo
Investment
Management
Consultant Co.,Ltd.
Buynow Electronic
Information (Huizhou)
Co., Ltd
Other current
financial assets
Yes 197,344 197,344 197,344 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
25 Beijing Clevo
Investment
Management
Consultant Co.,Ltd.
Taizhou Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 175,098 173,752 173,752 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
26 Guangdong Buynow
Real Estate
Management Co., Ltd.
Shanghai Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 304,313 304,313 304,313 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
26 Guangdong Buynow
Real Estate
Management Co., Ltd.
Buynow (Nanchang)
Industry Co., Ltd.
Other current
financial assets
Yes 308,350 308,350 308,350 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
-294-
Item Value
Maximum outstanding balance
during the year ended December
31, 2018
(Note 3)
Balance at
December 31,
2018
(Note 8)
Actual amount
drawn down
NO.
(Note 1)Creditor Borrower
General ledger
account
(Note 2)
Is a
related
party
Collateral Limit on loans granted
to a single party
(Note 7)
Ceiling on total
loans granted
(Note 7)
FootnoteInterest rateNature
of loan
Amount of transactions
with the borrower
(Note 5)
Reason for
short-term
financing
(Note 6)
Allowance
for doubtful
account
26 Guangdong Buynow
Real Estate
Management Co., Ltd.
Buynow(Guangzhou)
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 59,652$ 59,652$ 59,652$ 5.00% 2 -$ additional
operating
capital
-$ - -$ 16,735,937$ 41,839,842$ Note 8
26 Guangdong Buynow
Real Estate
Management Co., Ltd.
Buynow (Fujian)
Electronic Technology
development Co., Ltd.
Other current
financial assets
Yes 210,799 197,344 197,344 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
26 Guangdong Buynow
Real Estate
Management Co., Ltd.
Qingdao Buynow
Technology Industry Co.,
Ltd.
Other current
financial assets
Yes 134,956 134,956 134,956 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
26 Guangdong Buynow
Real Estate
Management Co., Ltd.
Buynow (Harbin)
Industry Co., Ltd.
Other current
financial assets
Yes 7,849 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
26 Guangdong Buynow
Real Estate
Management Co., Ltd.
Daqing Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 141,774 137,333 137,333 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
26 Guangdong Buynow
Real Estate
Management Co., Ltd.
Zibo Buynow Electronic
Information Co., Ltd.
Other current
financial assets
Yes 11,258 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
26 Guangdong Buynow
Real Estate
Management Co., Ltd.
Beijing Clevo Investment
Management Consultant
Co.,Ltd.
Other current
financial assets
Yes 342,212 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
26 Guangdong Buynow
Real Estate
Management Co., Ltd.
Buynow Electronic
Information (Huizhou)
Co., Ltd
Other current
financial assets
Yes 192,769 192,769 192,769 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
26 Guangdong Buynow
Real Estate
Management Co., Ltd.
Shantou Buynow Mall
Co., Ltd.
Other current
financial assets
Yes 210,118 210,118 210,118 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
26 Guangdong Buynow
Real Estate
Management Co., Ltd.
Clevo (China)
Investment Co., Ltd.
Other current
financial assets
Yes 17,043 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
26 Guangdong Buynow
Real Estate
Management Co., Ltd.
Anshan Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 337,279 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
-295-
Item Value
Maximum outstanding balance
during the year ended December
31, 2018
(Note 3)
Balance at
December 31,
2018
(Note 8)
Actual amount
drawn down
NO.
(Note 1)Creditor Borrower
General ledger
account
(Note 2)
Is a
related
party
Collateral Limit on loans granted
to a single party
(Note 7)
Ceiling on total
loans granted
(Note 7)
FootnoteInterest rateNature
of loan
Amount of transactions
with the borrower
(Note 5)
Reason for
short-term
financing
(Note 6)
Allowance
for doubtful
account
26 Guangdong Buynow
Real Estate
Management Co., Ltd.
Guiyang Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 192,410$ 156,530$ 156,530$ 5.00% 2 -$ additional
operating
capital
-$ - -$ 16,735,937$ 41,839,842$ Note 8
26 Guangdong Buynow
Real Estate
Management Co., Ltd.
Taizhou Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 29,467 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
26 Guangdong Buynow
Real Estate
Management Co., Ltd.
Dezhou Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 382,489 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
26 Guangdong Buynow
Real Estate
Management Co., Ltd.
Luoyang Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 257,996 246,783 246,783 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
26 Guangdong Buynow
Real Estate
Management Co., Ltd.
Quanzhou Buynow
Industry Co., Ltd.
Other current
financial assets
Yes 123,340 123,340 123,340 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
27 Clevo (China)
Investment Co., Ltd.
Buynow (Nanchang)
Industry Co., Ltd.
Other current
financial assets
Yes 6,728 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
27 Clevo (China)
Investment Co., Ltd.
Buynow (Zhengzhou)
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 85,217 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
27 Clevo (China)
Investment Co., Ltd.
Buynow (Fujian)
Electronic Technology
development Co., Ltd.
Other current
financial assets
Yes 8,970 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
27 Clevo (China)
Investment Co., Ltd.
Shanghai Buynow
Online Information
Technology Co., Ltd.
Other current
financial assets
Yes 10,316 10,316 10,316 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
27 Clevo (China)
Investment Co., Ltd.
Shantou Buynow Mall
Co., Ltd.
Other current
financial assets
Yes 11,869 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
27 Clevo (China)
Investment Co., Ltd.
Shanghai Huihei
Advertisment Co., Ltd.
Other current
financial assets
Yes 13,455 6,728 6,728 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
-296-
Item Value
Maximum outstanding balance
during the year ended December
31, 2018
(Note 3)
Balance at
December 31,
2018
(Note 8)
Actual amount
drawn down
NO.
(Note 1)Creditor Borrower
General ledger
account
(Note 2)
Is a
related
party
Collateral Limit on loans granted
to a single party
(Note 7)
Ceiling on total
loans granted
(Note 7)
FootnoteInterest rateNature
of loan
Amount of transactions
with the borrower
(Note 5)
Reason for
short-term
financing
(Note 6)
Allowance
for doubtful
account
27 Clevo (China)
Investment Co., Ltd.
Shanghai Huizhuan
Restaurant Management
Co., Ltd.
Other current
financial assets
Yes 15,249$ -$ -$ 5.00% 2 -$ additional
operating
capital
-$ - -$ 16,735,937$ 41,839,842$ Note 8
28 Suzhou Jinzuo
Industry Co., Ltd.
Dezhou Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 62,522 26,641 26,641 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
28 Suzhou Jinzuo
Industry Co., Ltd.
Suzhou Buynow
Department Store Co.,
Ltd.
Other current
financial assets
Yes 449 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
29 Buynow (Taizhou)
Corporation
Taizhou Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 200,083 200,083 200,083 6 months
LIBOR+2.5
%
2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
30 Taizhou Buynow
Electronic Information
Co., Ltd.
Shanghai Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 186,131 134,553 134,553 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
30 Taizhou Buynow
Electronic Information
Co., Ltd.
Luoyang Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 11,213 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
31 Dezhou Buynow
Electronic Information
Co., Ltd.
Beijing Clevo Investment
Management Consultant
Co.,Ltd.
Other current
financial assets
Yes 38,123 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
31 Dezhou Buynow
Electronic Information
Co., Ltd.
Anshan Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 242,195 242,195 242,195 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
32 Quanzhou Buynow
Industry Co., Ltd.
Beijing Clevo Investment
Management Consultant
Co.,Ltd.
Other current
financial assets
Yes 29,153 29,153 29,153 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
33 Kunshan Kaishuo
Trading Co., Ltd.
Shanghai Buynow
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 233,853 126,928 126,928 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
33 Kunshan Kaishuo
Trading Co., Ltd.
Buynow(Guangzhou)
Electronic Information
Co., Ltd.
Other current
financial assets
Yes 59,652 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
-297-
Item Value
Maximum outstanding balance
during the year ended December
31, 2018
(Note 3)
Balance at
December 31,
2018
(Note 8)
Actual amount
drawn down
NO.
(Note 1)Creditor Borrower
General ledger
account
(Note 2)
Is a
related
party
Collateral Limit on loans granted
to a single party
(Note 7)
Ceiling on total
loans granted
(Note 7)
FootnoteInterest rateNature
of loan
Amount of transactions
with the borrower
(Note 5)
Reason for
short-term
financing
(Note 6)
Allowance
for doubtful
account
33 Kunshan Kaishuo
Trading Co., Ltd.
Buynow (Harbin)
Industry Co., Ltd.
Other current
financial assets
Yes 52,027$ -$ -$ 5.00% 2 -$ additional
operating
capital
-$ - -$ 16,735,937$ 41,839,842$ Note 8
34 Shanghai Huihei
Advertisment Co.,
Ltd.
Clevo (China)
Investment Co., Ltd.
Other current
financial assets
Yes 6,728 - - 5.00% 2 - additional
operating
capital
- - - 16,735,937 41,839,842 Note 8
Note 1: The numbers filled in for the loans provided by the Company or subsidiaries are as follows:
(1)The Company is ‘0’.
(2)The subsidiaries are numbered in order starting from ‘1’.
Note 2: Fill in the name of account in which the loans are recognised, such as receivables–related parties, current account with stockholders, prepayments, temporary payments, etc.
Note 3: Fill in the maximum outstanding balance of loans to others during year ended December 31, 2018.
Note 4: The nature of loans:
(1)Related to business transactions is"1".
(2)short-term financing is "2".
Note 5: Fill in the amount of business transactions when nature of the loan is related to business transactions, which is the amount of business transactions occurred between the creditor and borrower in the current
year.
Note 6: Fill in purpose of loan when nature of loan is for short-term financing, for example, repayment of loan, acquisition of equipment, working capital, etc.
Note 7: According to the Company’s “Procedures for Provision of Loans”
(1)the ceiling on loans granted by the Company to other shall not be more than 40% of the Company's net asstes.
(2)The limit on loans granted by the Company tp a single party shall not be more than 30% of the Company's net assets.
Note 8:According to the Subsidiaries' “Procedures for Provision of Loans”
(1)The limit on loans granted by a subsidiary to a single party in which the Company directly and indirectly holds 100%of the voting shares shall not be more than 40% of the Company's net assets.
(2)The ceiling on loans to others in which the Company directly and indirectly holds 100% of the voting shares shall not be more than 100% of the Company's net assets,and limit to other single party is
40% of the subsidiary's net assets.
Note 9: The amounts of funds to be loaned to others which have been approved by the board of directors of a public company in accordance with Article 14, Item 1 of the “Regulations Governing Loaning of Funds and
Making of Endorsements/Guarantees by Public Companies” should be included in its published balance of loans to others at the end of the reporting period to reveal the risk of loaning the public
company bears, even though they have not yet been appropriated. However, this balance should exclude the loans repaid when repayments are done subsequently to reflect the risk adjustment. In addition, if
the board of directors of a public company has authorized the chairman to loan funds in instalments or in revolving within certain lines and within one year in accordance with Article 14, Item 2 of the
“Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies”, the published balance of loans to others at the end of the reporting period should also include these
lines of loaning approved by the board of directors, and these lines of loaning should not be excluded from this balance even though the loans are repaid subsequently, for taking into consideration they could
be loaned again thereafter.
-298-
Company name
Relationship with
the endorser/
guarantor
(Note 2)
0 The Company Clevo (Cayman
Islands) Holding Co.
2 41,839,842$ 4,925,120$ 4,925,120$ 2,955,072$ -$ 11.77 83,679,684$ Y N N -
0 The Company Kapok Computer
(Samoa)
Corporation
2 41,839,842 1,262,062 1,077,370 95,561 - 2.57 83,679,684 Y N N -
0 The Company Kapok Computer
(Kunshan) Co., Ltd.
3 41,839,842 153,910 153,910 153,910 - 0.37 83,679,684 Y N Y -
0 The Company Buynow (Xian)
Industry Co., Ltd.
3 41,839,842 240,100 129,284 129,284 - 0.31 83,679,684 Y N Y -
0 The Company Tianjin Buynow
Electronic
Information Co.,
Ltd.
3 41,839,842 453,586 446,858 446,858 - 1.07 83,679,684 Y N Y -
0 The Company Shantou Buynow
Mall Co., Ltd.
3 41,839,842 2,691,060 448,510 - - 1.07 83,679,684 Y N Y -
0 The Company Buynow
(Chongqing)
Industry Co., Ltd.
3 41,839,842 130,824 123,128 123,128 - 0.29 83,679,684 Y N Y -
0 The Company Buynow (Chengdu)
Electronic
Information Co.,
Ltd.
3 41,839,842 430,948 400,166 400,166 - 0.96 83,679,684 Y N Y -
0 The Company Buynow Electronic
Information
(Hangzhou) Co., Ltd
3 41,839,842 95,424 - - - 0.00 83,679,684 Y N Y -
Outstanding
endorsement/
guarantee
amount at
December 31,
2018
(Note 5)
Actual amount
drawn down
(Note 6)
Amount of
endorsements/g
uarantees
secured with
collateral
Number
(Note1)
Endorser/
guarantor
Party being
endorsed/guaranteedLimit on
endorsements/
guarantees
provided for a
single party
(Note 3)
Maximum
outstanding
endorsement/
guarantee
amount as of
December 31,
2018
(Note 4)
Footnote
Ratio of
accumulated
endorsement/guara
ntee amount to net
asset value of the
endorser/guarantor
company
Ceiling on
total amount of
endorsements/gua
rantees provided
(Note 3)
Provision of
endorsements/
guarantees
byparent
company to
subsidiary
(Note 7)
Provision of
endorsements/
guarantees by
subsidiary to
parent
company
(Note 7)
Provision of
endorsement
s/guarantees
to the party
in Mainland
China
(Note 7)
CLEVO CO. and Subsidiaries
Provision of endorsements and guarantees to others
For the year ended December 31, 2018
Table 2 Expressed in thousands of NTD
(Except as otherwise indicated)
-299-
Company name
Relationship with
the endorser/
guarantor
(Note 2)
Outstanding
endorsement/
guarantee
amount at
December 31,
2018
(Note 5)
Actual amount
drawn down
(Note 6)
Amount of
endorsements/g
uarantees
secured with
collateral
Number
(Note1)
Endorser/
guarantor
Party being
endorsed/guaranteedLimit on
endorsements/
guarantees
provided for a
single party
(Note 3)
Maximum
outstanding
endorsement/
guarantee
amount as of
December 31,
2018
(Note 4)
Footnote
Ratio of
accumulated
endorsement/guara
ntee amount to net
asset value of the
endorser/guarantor
company
Ceiling on
total amount of
endorsements/gua
rantees provided
(Note 3)
Provision of
endorsements/
guarantees
byparent
company to
subsidiary
(Note 7)
Provision of
endorsements/
guarantees by
subsidiary to
parent
company
(Note 7)
Provision of
endorsement
s/guarantees
to the party
in Mainland
China
(Note 7)
0 The Company Anshan Buynow
Electronic
Information Co.,
Ltd.
3 41,839,842$ 513,152$ 513,152$ 513,152$ -$ 1.23 83,679,684$ Y N Y -
0 The Company Dezhou Buynow
Electronic
Information Co.,
Ltd.
3 41,839,842 230,865 230,865 230,865 - 0.55 83,679,684 Y N Y -
0 The Company Taizhou Buynow
Electronic
Information Co.,
Ltd.
3 41,839,842 313,957 313,957 313,957 313,957 0.75 83,679,684 Y N Y -
0 The Company Suzhou Jinzuo
Industry Co., Ltd.
3 41,839,842 224,255 224,255 224,255 224,255 0.54 83,679,684 Y N Y -
0 The Company Buynow (Jinzhou)
Industry Co., Ltd.
3 41,839,842 448,510 448,510 409,041 448,510 1.07 83,679,684 Y N Y -
1 Clevo (Cayman
Islands) Holding Co.
Zibo Buynow
Electronic
Information Co.,
Ltd.
3 41,839,842 224,255 - - - 0.00 41,839,842 N N Y -
2 Changsha Hungyu
Business Management
Co., Ltd.
Shanghai Buynow
Electronic
Information Co.,
Ltd.
3 41,839,842 313,957 313,957 209,454 313,957 0.75 41,839,842 N N Y -
3 Buynow Electronic
Information
(Hangzhou) Co., Ltd
Zibo Buynow
Electronic
Information Co.,
Ltd.
3 41,839,842 210,800 210,800 167,384 210,800 0.50 41,839,842 N N Y -
3 Buynow Electronic
Information
(Hangzhou) Co., Ltd
Buynow (Xian)
Industry Co., Ltd.
3 41,839,842 89,702 89,702 89,702 89,702 0.21 41,839,842 N N Y -
4 Buynow (Chengdu)
Electronic
Information Co., Ltd.
Shantou Buynow
Mall Co., Ltd.
3 41,839,842 2,242,550 2,242,550 1,273,867 2,242,550 5.36 41,839,842 N N Y -
-300-
Company name
Relationship with
the endorser/
guarantor
(Note 2)
Outstanding
endorsement/
guarantee
amount at
December 31,
2018
(Note 5)
Actual amount
drawn down
(Note 6)
Amount of
endorsements/g
uarantees
secured with
collateral
Number
(Note1)
Endorser/
guarantor
Party being
endorsed/guaranteedLimit on
endorsements/
guarantees
provided for a
single party
(Note 3)
Maximum
outstanding
endorsement/
guarantee
amount as of
December 31,
2018
(Note 4)
Footnote
Ratio of
accumulated
endorsement/guara
ntee amount to net
asset value of the
endorser/guarantor
company
Ceiling on
total amount of
endorsements/gua
rantees provided
(Note 3)
Provision of
endorsements/
guarantees
byparent
company to
subsidiary
(Note 7)
Provision of
endorsements/
guarantees by
subsidiary to
parent
company
(Note 7)
Provision of
endorsement
s/guarantees
to the party
in Mainland
China
(Note 7)
4 Buynow (Chengdu)
Electronic
Information Co., Ltd.
Buynow
(Chongqing)
Industry Co., Ltd.
3 41,839,842$ 448,510$ 448,510$ 408,144$ -$ 1.07 41,839,842$ N N Y -
4 Buynow (Chengdu)
Electronic
Information Co., Ltd.
Buynow (Xian)
Industry Co., Ltd.
3 41,839,842 224,255 224,255 197,344 - 0.54 41,839,842 N N Y -
5 Buynow (Zhengzhou)
Electronic
Information Co., Ltd.
The Company 3 41,839,842 1,785,356 - - - 0.00 41,839,842 N N N -
5 Buynow (Zhengzhou)
Electronic
Information Co., Ltd.
Dezhou Buynow
Electronic
Information Co.,
Ltd.
3 41,839,842 1,614,636 1,614,636 1,614,636 1,614,636 3.86 41,839,842 N N Y -
6 Buynow Electronic
Information
(Shenyang) Co., Ltd.
Buynow (Harbin)
Industry Co., Ltd.
3 41,839,842 897,020 897,020 125,484 - 2.14 41,839,842 N N Y -
7 Buynow (Fujian)
Electronic
Technology
development Co., Ltd.
Quanzhou Buynow
Industry Co., Ltd.
3 41,839,842 717,616 717,616 136,513 - 1.72 41,839,842 N N Y -
8 Buynow (Xian)
Industry Co., Ltd.
Qingdao Buynow
Technology Industry
Co., Ltd.
3 41,839,842 717,616 717,616 561,983 - 1.72 41,839,842 N N Y -
9 Buynow (Wuxi)
Electronic
Technology
Development Co.,
Ltd.
Shanghai Buynow
Computer Market
Management Co.,
Ltd.
3 41,839,842 291,532 291,532 95,833 291,532 0.70 41,839,842 N N Y -
-301-
Company name
Relationship with
the endorser/
guarantor
(Note 2)
Outstanding
endorsement/
guarantee
amount at
December 31,
2018
(Note 5)
Actual amount
drawn down
(Note 6)
Amount of
endorsements/g
uarantees
secured with
collateral
Number
(Note1)
Endorser/
guarantor
Party being
endorsed/guaranteedLimit on
endorsements/
guarantees
provided for a
single party
(Note 3)
Maximum
outstanding
endorsement/
guarantee
amount as of
December 31,
2018
(Note 4)
Footnote
Ratio of
accumulated
endorsement/guara
ntee amount to net
asset value of the
endorser/guarantor
company
Ceiling on
total amount of
endorsements/gua
rantees provided
(Note 3)
Provision of
endorsements/
guarantees
byparent
company to
subsidiary
(Note 7)
Provision of
endorsements/
guarantees by
subsidiary to
parent
company
(Note 7)
Provision of
endorsement
s/guarantees
to the party
in Mainland
China
(Note 7)
10 Kalor Buynow
(Heifei) Electronic
Information Co., Ltd.
Kapok Computer
(Kunshan) Co., Ltd.
3 41,839,842$ 866,844$ 866,844$ 832,524$ 866,844$ 2.07 41,839,842$ N N Y -
11 Daqing Buynow
Electronic
Information Co., Ltd.
Buynow (Jinzhou)
Industry Co., Ltd.
3 41,839,842 627,914 - - - 0.00 41,839,842 N N Y -
12 Tianjin Buynow
Electronic
Information Co., Ltd.
Anshan Buynow
Electronic
Information Co.,
Ltd.
3 41,839,842 1,121,275 - - - 0.00 41,839,842 N N Y -
13 Guangdong Buynow
Real Estate
Management Co., Ltd.
The Company 3 41,839,842 3,000,000 3,000,000 2,650,000 3,000,000 7.17 41,839,842 N N N -
14 Buynow (Chongqing)
Industry Co., Ltd.
Buynow (Xian)
Industry Co., Ltd.
3 41,839,842 224,255 224,255 197,344 224,255 0.54 41,839,842 N N Y -
15 Guangdong Buynow
Real Estate
Management Co., Ltd.
Buynow (Fujian)
Electronic
Technology
development Co.,
Ltd.
3 41,839,842 672,765 - - - 0.00 41,839,842 N N Y -
16 Buynow (Changchun)
Industry Co., Ltd.
Luoyang Buynow
Electronic
Information Co.,
Ltd.
3 41,839,842 941,871 941,871 866,521 941,871 2.25 41,839,842 N N Y -
17 Buynow (Nanchang)
Industry Co., Ltd.
Buynow (Nanjing)
Facility Leasing And
Management Co.,
Ltd.
3 41,839,842 89,702 - - - 0.00 41,839,842 N N Y -
17 Buynow (Nanchang)
Industry Co., Ltd.
Kalor Buynow
(Heifei) Electronic
Information Co.,
Ltd.
3 41,839,842 103,157 - - - 0.00 41,839,842 N N Y -
-302-
Company name
Relationship with
the endorser/
guarantor
(Note 2)
Outstanding
endorsement/
guarantee
amount at
December 31,
2018
(Note 5)
Actual amount
drawn down
(Note 6)
Amount of
endorsements/g
uarantees
secured with
collateral
Number
(Note1)
Endorser/
guarantor
Party being
endorsed/guaranteedLimit on
endorsements/
guarantees
provided for a
single party
(Note 3)
Maximum
outstanding
endorsement/
guarantee
amount as of
December 31,
2018
(Note 4)
Footnote
Ratio of
accumulated
endorsement/guara
ntee amount to net
asset value of the
endorser/guarantor
company
Ceiling on
total amount of
endorsements/gua
rantees provided
(Note 3)
Provision of
endorsements/
guarantees
byparent
company to
subsidiary
(Note 7)
Provision of
endorsements/
guarantees by
subsidiary to
parent
company
(Note 7)
Provision of
endorsement
s/guarantees
to the party
in Mainland
China
(Note 7)
18 Taizhou Buynow
Electronic
Information Co., Ltd.
Buynow (Jinzhou)
Industry Co., Ltd.
3 41,839,842$ 538,212$ 538,212$ 538,212$ 538,212$ 1.29 41,839,842$ N N Y -
Note 1: The numbers filled in for the endorsements/guarantees provided by the Company or subsidiaries are as follows:
(1)The Company is ‘0’.
(2)The subsidiaries are numbered in order starting from ‘1’.
Note 2: Relationship between the endorser/guarantor and the party being endorsed/guaranteed is classified into the following seven categories; fill in the number of category each case belongs to:
(1)Having business relationship.
(2)The endorser/guarantor parent company owns directly and indirectly more than 50% voting shares of the endorsed/guaranteed subsidiary.
(3)The endorsed/guaranteed company owns directly and indirectly more than 50% voting shares of the endorser/guarantor company.
(4)The endorser/guarantor parent company owns directly and indirectly more than 50% voting shares of the endorsed/guaranteed company.
(5)Mutual guarantee of the trade made by the endorsed/guaranteed company or joint contractor as required under the construction contract.
(6)Due to joint venture, all shareholders provide endorsements/guarantees to the endorsed/guaranteed company in proportion to its ownership.
Note 3: In accordance with Company's procedures of endorsements and guarantees, limit on the Company's total guarantee amount is 200% of the Company's net assets, and the limit on endorsement/guarantee
to a single party is 100% of the aforementioned total amount. The limit on total guarantee amount and the endorsement/guarantee to a single party of the subsidiaries owned directly or
indirectly 100% voting shares by the Company are both 200% of the Company's net assets. The limit on total guarantee amount and the endorsement/guarantee to a single party of the subsidiaries
owned directly or indirectly 100% voting shares by the Company are both 200% of the Company's net assets.
Note 4: Fill in the year-to-date maximum outstanding balance of endorsements/guarantees provided as of the reporting period.
Note 5: Fill in the amount approved by the Board of Directors or the chariman if the chairman has been authorised by the Board of Directors based on subparagraph 8, Article 12 of the Regulations
Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies.
Note 6: Fill in the actual amount of endorsements/guarantees used by the endorsed/guaranteed company.
Note 7: Fill in ‘Y’ for those cases of provision of endorsements/guarantees by listed parent company to subsidiary and provision by subsidiary to listed parent company, and provision to the party in
Mainland China.
Note 8: The limit on the Company and the subsidiaries' total endorsement/guarantee amount is 300% of the Company's net assets.
Note 9:The limit on endorsement/guarantee to a single party of the Company and the subsidiaries is 100% of the Company's net assets.
Note 10:When the total guarantee amount of the Company and the subsidiaries reached 50% of the Company's net assets, it is necessary to explain the necessity and reasonableness at the shareholders'
meeting.
Note 11:In accordance with Article 5 of the Company's procedures of endorsements and guarantees,Due to the endorsement of the business relationship, the limit on endorsement/guarantee to a single
party due to business relationship shall not exceed the limit mentioned in Note3 and the actual sales amount between of the single enterprise and the guarantee company within the last year.
-303-
Number of
shares
Book value
(Note 3) Ownership Fair value
Stocks
The Company AU Optronics Corp. - Current financial assets measured at fair value
through profit or loss
1,092,989 $ 13,444 0.01% $ 13,444 -
The Company Chicony Electronics Co., Ltd. Same chairman as the
Company
Current financial assets measured at fair value
through profit or loss
4,757,367 297,811 0.65% 297,811 -
The Company Innolux Corporation - Current financial assets measured at fair value
through profit or loss
51,219 498 0.00% 498 -
The Company Net Publishing Co.,Ltd. - Current financial assets measured at fair value
through profit or loss
336,000 21,403 0.80% 21,403 -
The Company Taiwan Business Bank,Ltd. - Current financial assets measured at fair value
through profit or loss
13,681,933 141,608 0.21% 141,608 -
The Company Da Lue International Holding Co Ltd. - Current financial assets measured at fair value
through profit or loss
1,783,283 19,259 4.95% 19,259 -
The Company Sunny Optical Technology (Group)
Company Limited
- Current financial assets measured at fair value
through profit or loss
20,000 5,471 0.00% 5,471 -
The Company PING AN INSURANCE (GROUP) CO.
OF CHINA, LTD.
- Current financial assets measured at fair value
through profit or loss
300,000 81,528 0.00% 81,528 -
The Company Sanan Optoelectronics Co.,Ltd. - Current financial assets measured at fair value
through profit or loss
160,000 8,116 0.00% 8,116 -
The Company Boe Technology Group Co., Ltd. - Current financial assets measured at fair value
through profit or loss
375,000 4,423 0.00% 4,423 -
The Company Hangzhou Hikvision Digital Technology
Co.,Ltd.
- Current financial assets measured at fair value
through profit or loss
300,000 34,661 0.00% 34,661 -
The Company ChinaAMC CSI 300 Index ETF - Current financial assets measured at fair value
through profit or loss
200,000 27,707 0.05% 27,707 -
Stocks
Kapok Computer Co., Ltd. Chicony Electronics Co., Ltd. Same chairman as the
Company
Current financial assets measured at fair value
through profit or loss
40,862 2,558 0.00% 2,558 -
Kapok Computer Co., Ltd. CLEVO CO. The Company Non-current financial assets measured at fair value
through other comprehensive income
16,966,596 516,633 2.50% 516,633 -
Stocks
Clevo Investment Co., Ltd. Chicony Electronics Co., Ltd. Same chairman as the
Company
Current financial assets measured at fair value
through profit or loss
182,072 11,398 0.02% 11,398 -
Clevo Investment Co., Ltd. CLEVO CO. The Company Non-current financial assets measured at fair value
through other comprehensive income
10,080,669 306,956 1.48% 306,956 -
Beneficiary certificate
Clevo Investment Co., Ltd. Neuberger Berman High Yield Bond Fund
USD T Monthly Distributing
- Current financial assets measured at fair value
through profit or loss
48,850 14,497 - 14,497 -
Beneficiary certificate
Clevo (Cayman Islands) Holding Company Greater China Multi-Strategy Fund - Current financial assets measured at fair value
through profit or loss
124,095 214,489 - 214,489 -
General ledger account
As of December 31,2018Footnote
(Note 4)
(Except as otherwise indicated)
CLEVO CO. and Subsidiaries
Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures)
For the year ended December 31, 2018
Table 3 Expressed in thousands of NTD
Securities held byMarketable securities
(Note 1)
Relationship with the securities
issuer
(Note 2)
-304-
Number of
shares
Book value
(Note 3) Ownership Fair value
General ledger account
As of December 31,2018Footnote
(Note 4)Securities held by
Marketable securities
(Note 1)
Relationship with the securities
issuer
(Note 2)
Clevo (Cayman Islands) Holding Company UG Hidden Dragon Special Opportunity
Fund
- Current financial assets measured at fair value
through profit or loss
266,378 $ 198,380 - $ 198,380 -
Stocks
Kapok Computer (Kunshan) Co., Ltd. Hangzhou Hikvision Digital Technology
Co.,Ltd.
- Current financial assets measured at fair value
through profit or loss
857,065 99,022 0.01% 99,022 -
Kapok Computer (Kunshan) Co., Ltd. Wangsu Science & Technology Co., Ltd - Current financial assets measured at fair value
through profit or loss
617,667 21,691 0.03% 21,691 -
Kapok Computer (Kunshan) Co., Ltd. East Money Information Co.,ltd. - Current financial assets measured at fair value
through profit or loss
1,926,997 104,577 0.05% 104,577 -
Beneficiary certificate
Beijing Kaiye Electronic Technology Co.,
Ltd.
CR Yuanta Cash Income Money Market
Fund A
- Current financial assets measured at fair value
through profit or loss
112,571 449 - 449 -
Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities.
Note 2: Leave the column blank if the issuer of marketable securities is non-related party.
Note 3: Fill in the amount after adjusted at fair value and deducted by accumulated impairment for the marketable securities measured at fair value; fill in the acquisition cost or amortised cost
deducted by accumulated impairment for the marketable securities not measured at fair value.
Note 4: The number of shares of securities and their amounts pledged as security or pledged for loans and their restrictions on use under some agreements should be stated in the footnote if the
securities presented herein have such conditions.
-305-
Number of
shares Amount
Numbe
r of
shares
Amoun
t
Number of
sharesSelling price Book value
Gain (loss) on
disposal
Numbe
r of
sharesAmount
Clevo (Cayman
Islands) Holding
Co.
Buynow
(Wuhan)
Corporation
Investment
accounted for
under equity
method
Chicony
Industry
(Wuhan)
Co.,Ltd.
The Company as the
ultimate parent company
15,000,000 $ 1,053,115 - $ - 15,000,000 $ 2,013,423 $ 1,068,447 $ 944,976 - $ -
Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities.
Note 2: Fill in the columns the counterparty and relationship if securities are accounted for under the equity method; otherwise leave the columns blank.
of paid-in capital shall be replaced by 10% of equity attributable to owners of the parent in the calculation.
CLEVO CO. and Subsidiaries
Addition
(Note 3)Disposal(Note 3)
Balance as at
December 31,
2018
Balance as at January 1,2018
Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company's paid-in capital
For the year ended December 31, 2018
Table 4
Investor
Marketable
securities
(Note 1)
General ledger
account
Counterparty
(Note 2)
Relationship with the
investor
(Note 2)
Expressed in thousands of NTD
(Except as otherwise indicated)
Note 3: Aggregate purchases and sales amounts should be calculated separately at their market values to verify whether they individually reach NT$300 million or 20% of paid-in capital or
more.
Note 4: Paid-in capital referred to herein is the paid-in capital of parent company. In the case that shares were issued with no par value or a par value other than NT$10 per share, the 20%
-306-
Original owner
who
sold the real
estate
to the
counterparty
Relationship
between the
original
owner and the
acquirer
Date of the
original
transaction
Amount
Buynow (Xian)
Industry Co., Ltd.
Construction in
Progress、
Prepayments and
Land Use Right
2005~
Fourth Quarter of 2018
$ 1,122,247 $ 654,052 Xi'an Xinxiaozhai Old
Village Reconstruction and
Construction Development
Co., Ltd. etc.
- - - - $ - mutual
agreement
department
store;under
construction
-
Shantou Buynow
Mall Co., Ltd.
Buildings and Land
Held for Sale、
Construction in
Progress and Land
Use Right
Second Quarter of 2011~
Fourth Quarter of 2018
5,051,901 4,864,242 Bureau of Land Resources
and Housing Administration
of Shantou City etc.
- - - - - mutual
agreement
department
store;under
construction
-
Yingkou Buynow
Electronic
Information Co., Ltd.
Construction in
Progress and Land
Use Right
Second Quarter of 2011~
Fourth Quarter of 2018
762,122 743,882 Bureau of Land and
Resources of Yingkou City
etc.
- - - - - mutual
agreement
department
store;under
construction
-
Anshan Buynow
Electronic
Information Co., Ltd.
Buildings and Land
Held for Sale、
Construction in
Progress and Land
Use Right
Second Quarter of 2011~
Fourth Quarter of 2018
3,111,806 2,903,176 Bureau of Land and
Resources of Anshan City
etc.
- - - - - mutual
agreement
department
store;under
construction
-
Guiyang Buynow
Electronic
Information Co., Ltd.
Construction in
Progress and Land
Use Right
Fourth Quarter of 2011~
Fourth Quarter of 2018
1,434,977 1,362,851 Guiyang Municipal Bureau
of Land and Resources etc.
- - - - - mutual
agreement
department
store;under
construction
-
Buynow (Jinzhou)
Industry Co., Ltd.
Buildings and Land
Held for Sale、
Construction in
Progress and Land
Use Right
Second Quarter of 2013~
Fourth Quarter of 2018
1,776,878 1,764,355 Jinzhou Municipal Bureau of
Land and Resources etc.
- - - - - mutual
agreement
department
store;under
construction
-
Note 1: The appraisal result should be presented in the ‘Basis or reference used in setting the price’ column if the real estate acquired should be appraised pursuant to the regulations.
Note 2: Paid-in capital referred to herein is the paid-in capital of parent company. In the case that shares were issued with no par value or a par value other than NT$10 per share, the 20 % of paid-in
capital shall be replaced by 10% of equity attributable to owners of the parent in the calculation.
Note 3: Date of the event referred to herein is the date of contract signing date, date of payment, date of execution of a trading order, date of title transfer, date of board resolution, or other date
that can confirm the counterparty and the monetary amount of the transaction, whichever is earlier.
Reason for
acquisition of
real estate and
status of the
real estate
Other
commitments
If the counterparty is a related party, information as to the last
transaction of the real estate is disclosed below:
(Except as otherwise indicated)
CLEVO CO. and Subsidiaries
Acquisition of real estate reaching NT$300 million or 20% of paid-in capital or more
For the year ended December 31, 2018
Table 5 Expressed in thousands of NTD
Real estate acquired
byReal estate acquired Date of the event
Transaction
amount
Status of
paymentCounterparty
Relationship
with the
counterparty
Basis or
reference
used
in setting the
price
-307-
Purchases(s
ales)Amount
Percentage of
total
purchases
(sales)
Credit term Unit price Credit term Balance
Percentage of
total
notes/accounts
receivable
(payable)
The Company Kapok Computer (Kunshan)
Co., Ltd.
The Company as the
ultimate parent
company
Purchases 11,011,330$ 66.72% Open account 30 days and
offset between creditor's rights
and debt
obligation.Prepayment is
allowed when there is fund
demand.
The selling price is reduced
by 5%~15%. However, it
can be adjusted according to
market conditions.
1~5 months for normal
customers due to fund
demands.
-$ - -
The Company Kapok Computer (Kunshan)
Co., Ltd.
The Company as the
ultimate parent
company
Sales 3,156,793)( 17.82% 180 days The goods are not sold to
other customers, so the
prices cannot be compared.
1~2 months for normal
customers due to fund
demands.
818,974 36.60% -
Kapok Computer (Kunshan)
Co., Ltd.
The Company The Company as the
ultimate parent
company
Sales 11,011,330)( 100.00% Open Account 30 Days It is the only customer, so
the price cannot be
compared.
- - - -
Kapok Computer (Kunshan)
Co., Ltd.
The Company The Company as the
ultimate parent
company
Purchases 3,156,793 30.61% 180 days It is the only customer, so
the price cannot be
compared.
- 818,974)( 29.40% -
Kapok Computer (Samoa)
Corporation
Kapok Computer (Kunshan)
Co., Ltd.
The Company as a
subsidiary
Sales 955,192)( 100.00% Open Account 180 Days It is the only customer, so
the price cannot be
compared.
- 538,342 100.00% -
Kapok Computer (Kunshan)
Co., Ltd.
Kapok Computer (Samoa)
Corporation
The Company as a
subsidiary
Purchases 955,192 9.31% 180 days It is the only customer, so
the price cannot be
compared.
- 538,342)( 19.32% -
Note 1: If terms of related-party transactions are different from third-party transactions, explain the differences and reasons in the ‘Unit price’ and ‘Credit term’ columns.
Note 2: In case related-party transaction terms involve advance receipts (prepayments) transactions, explain in the footnote the reasons, contractual provisions, related amounts, and differences in
types of transactions compared to third-party transactions.
Note 3: Paid-in capital referred to herein is the paid-in capital of parent company. In the case that shares were issued with no par value or a par value other than NT$10 per share, the 20 % of
paid-in capital shall be replaced by 10% of equity attributable to owners of the parent in the calculation.
(Except as otherwise indicated)
CLEVO CO. and Subsidiaries
Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paid-in capital or more
For the year ended December 31, 2018
Table 6 Expressed in thousands of NTD
Notes/accounts receivable
(payable)
Footnote
(Note
2)
Purchaser/seller CounterpartyRelationship with the
counterparty
Transaction
Differences in transaction terms compared to third
party transactions
(Note 1)
-308-
Table 7
Amount Action taken
The Company Kapok Computer (Kunshan) Co., Ltd.The transaction object is a
subsidiary of the company.818,974$ 4.66 -$
Change into other current
financial assets1,230$ -$
Kapok Computer (Samoa) Corporation Kapok Computer (Kunshan) Co., Ltd.The transaction object is a
subsidiary of the company538,342 19.56 -
Change into other current
financial assets40,037 -
Clevo (Cayman Islands)
Holding Co. Chicony Square (Wuhan) Inc.The transaction object is the
affiliate of the company961,722 - -
Change into other current
financial assets- -
Note 1: Fill in separately the balances of accounts receivable–related parties, notes receivable–related parties, other receivables–related parties….
Note 2: Paid-in capital referred to herein is the paid-in capital of parent company. In the case that shares were issued with no par value or a par value other than NT$10 per share, the
20 % of paid-in capital shall be replaced by 10% of equity attributable to owners of the parent in the calculation.
Overdue receivables
CLEVO CO. and Subsidiaries
Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more
December 31,2018
Expressed in thousands of NTD
(Except as otherwise indicated)
Creditor Counterparty Relationship with the counterparty
Balance as at December
31, 2018
(Note 1)
Turnover rate
Amount collected
subsequent to the
balance sheet date
Allowance for
doubtful
accounts
-309-
General ledger account Amount Transaction terms
Percentage of consolidated
total operating revenues or
total assets
(Note 3)
0 The Company Kapok Computer (Kunshan) Co., Ltd. 1 Purchases $ 11,011,330 The selling price is reduced by
5%~15%. However, it can be
adjusted according to market
conditions.The payment period is
open account 30 days.
55.62%
0 The Company Kapok Computer (Kunshan) Co., Ltd. 1 Sales 3,156,793 It is the only customer, so the price
cannot be compared. The payment
period is 180 days.
15.95%
001 Kapok Computer Co., Ltd. The Company 2 Other current financial
assets
50,000 1.04% 0.04%
003 Clevo Computer Singapore Ptd Ltd. The Company 3 Other non-current
financial assets
120,050 - 0.11%
009 Clevo (Cayman Islands) Holding Company Kapok Computer (Samoa) Corporation 3 Other non-current
financial assets
523,294 3 months LIBOR+1.5% 0.47%
009 Clevo (Cayman Islands) Holding Company Buynow Electronic Information (Hangzhou) Co.,
Ltd
3 Other current financial
assets
138,519 6 months LIBOR+2.5% 0.12%
009 Clevo (Cayman Islands) Holding Company Buynow(Guangzhou) Corporation 3 Other current financial
assets
138,519 6 months LIBOR+1.5% 0.12%
009 Clevo (Cayman Islands) Holding Company Buynow (Xian) Industry Co., Ltd. 3 Other current financial
assets
61,564 6 months LIBOR+2.5% 0.05%
009 Clevo (Cayman Islands) Holding Company Buynow (Harbin) Corporation 3 Other current financial
assets
90,807 6 months LIBOR+1.5% 0.08%
009 Clevo (Cayman Islands) Holding Company Daqing Buynow Electronic Information Co., Ltd. 3 Other current financial
assets
92,346 6 months LIBOR+2.5% 0.08%
009 Clevo (Cayman Islands) Holding Company Zibo Buynow Electronic Information Co., Ltd. 3 Other current financial
assets
92,346 6 months LIBOR+2.5% 0.08%
009 Clevo (Cayman Islands) Holding Company Buynow (Taizhou) Corporation 3 Other current financial
assets
200,083 6 months LIBOR+2% 0.18%
009 Clevo (Cayman Islands) Holding Company Kunshan Kaishuo Trading Co., Ltd. 3 Other non-current
financial assets
161,463 3.00% 0.14%
020 Buynow Electronic Information (Hangzhou) Co.,
Ltd
Changsha Hungyu Business Management Co.,
Ltd.
3 Other current financial
assets
134,104 5% 0.12%
020 Buynow Electronic Information (Hangzhou) Co.,
Ltd
Shanghai Buynow Electronic Information Co.,
Ltd.
3 Other current financial
assets
62,791 5% 0.06%
(Except as otherwise indicated)
CLEVO CO. and Subsidiaries
Significant inter-company transactions during the reporting period
For the year ended December 31, 2018
Table 8 Expressed in thousands of NTD
N0.
(Note 1)Company name Counterparty
Relationship
(Note 2)
Transaction
-310-
General ledger account Amount Transaction terms
Percentage of consolidated
total operating revenues or
total assets
(Note 3)
N0.
(Note 1)Company name Counterparty
Relationship
(Note 2)
Transaction
020 Buynow Electronic Information (Hangzhou) Co.,
Ltd
Buynow (Xian) Industry Co., Ltd. 3 Other current financial
assets
$ 141,729 5% 0.13%
020 Buynow Electronic Information (Hangzhou) Co.,
Ltd
Shantou Buynow Mall Co., Ltd. 3 Other current financial
assets
65,034 5% 0.06%
020 Buynow Electronic Information (Hangzhou) Co.,
Ltd
Guiyang Buynow Electronic Information Co.,
Ltd.
3 Other current financial
assets
126,031 5% 0.11%
023 Buynow (Chengdu) Electronic Information Co., Ltd. Shanghai Buynow Electronic Information Co.,
Ltd.
3 Other current financial
assets
242,195 5% 0.22%
023 Buynow (Chengdu) Electronic Information Co., Ltd. Buynow (Nanchang) Industry Co., Ltd. 3 Other current financial
assets
106,880 5% 0.10%
023 Buynow (Chengdu) Electronic Information Co., Ltd. Buynow (Fujian) Electronic Technology
development Co., Ltd.
3 Other current financial
assets
283,597 5% 0.25%
023 Buynow (Chengdu) Electronic Information Co., Ltd. Zibo Buynow Electronic Information Co., Ltd. 3 Other current financial
assets
65,931 5% 0.06%
023 Buynow (Chengdu) Electronic Information Co., Ltd. Buynow Electronic Information (Huizhou) Co.,
Ltd
3 Other current financial
assets
68,308 5% 0.06%
023 Buynow (Chengdu) Electronic Information Co., Ltd. Shantou Buynow Mall Co., Ltd. 3 Other current financial
assets
207,032 5% 0.18%
023 Buynow (Chengdu) Electronic Information Co., Ltd. Anshan Buynow Electronic Information Co., Ltd. 3 Other current financial
assets
237,082 5% 0.21%
023 Buynow (Chengdu) Electronic Information Co., Ltd. Shantou Buynow Mall Co., Ltd. 3 Non-operating
Receivables-Related
Parties
95,577 - 0.08%
025 Buynow (Nanjing) Facility Leasing And
Management Co., Ltd.
Shanghai Buynow Electronic Information Co.,
Ltd.
3 Other current financial
assets
152,000 5% 0.14%
025 Buynow (Nanjing) Facility Leasing And
Management Co., Ltd.
Zibo Buynow Electronic Information Co., Ltd. 3 Other current financial
assets
130,965 5% 0.12%
025 Buynow (Nanjing) Facility Leasing And
Management Co., Ltd.
Shantou Buynow Mall Co., Ltd. 3 Other current financial
assets
113,921 5% 0.10%
025 Buynow (Nanjing) Facility Leasing And
Management Co., Ltd.
Anshan Buynow Electronic Information Co., Ltd. 3 Other current financial
assets
115,940 5% 0.10%
026 Kapok Computer (Kunshan) Co., Ltd. Kapok Computer (Samoa) Corporation 3 Purchases 955,192 The goods are not sold to other
customers, so the prices cannot be
compared.
4.83%
026 Kapok Computer (Kunshan) Co., Ltd. Buynow (Nanchang) Industry Co., Ltd. 3 Other current financial
assets
210,799 5% 0.19%
026 Kapok Computer (Kunshan) Co., Ltd. Buynow (Xian) Industry Co., Ltd. 3 Other current financial
assets
406,215 5% 0.36%
026 Kapok Computer (Kunshan) Co., Ltd. Buynow (Harbin) Industry Co., Ltd. 3 Other current financial
assets
559,605 5% 0.50%
-311-
General ledger account Amount Transaction terms
Percentage of consolidated
total operating revenues or
total assets
(Note 3)
N0.
(Note 1)Company name Counterparty
Relationship
(Note 2)
Transaction
026 Kapok Computer (Kunshan) Co., Ltd. Shantou Buynow Mall Co., Ltd. 3 Other current financial
assets
$ 736,093 5% 0.65%
026 Kapok Computer (Kunshan) Co., Ltd. Yingkou Buynow Electronic Information Co.,
Ltd.
3 Other current financial
assets
85,217 5% 0.08%
026 Kapok Computer (Kunshan) Co., Ltd. Guiyang Buynow Electronic Information Co.,
Ltd.
3 Other current financial
assets
446,267 5% 0.40%
026 Kapok Computer (Kunshan) Co., Ltd. Dezhou Buynow Electronic Information Co., Ltd. 3 Other current financial
assets
568,261 5% 0.51%
026 Kapok Computer (Kunshan) Co., Ltd. Shantou Buynow Mall Co., Ltd. 3 Non-operating
Receivables-Related
Parties
227,249 - 0.20%
026 Kapok Computer (Kunshan) Co., Ltd. Buynow (Xian) Industry Co., Ltd. 3 Non-operating
Receivables-Related
Parties
76,784 - 0.07%
026 Kapok Computer (Kunshan) Co., Ltd. Qingdao Buynow Technology Industry Co., Ltd. 3 Non-operating
Receivables-Related
Parties
150,064 - 0.13%
026 Kapok Computer (Kunshan) Co., Ltd. Buynow (Harbin) Industry Co., Ltd. 3 Non-operating
Receivables-Related
Parties
158,968 - 0.14%
026 Kapok Computer (Kunshan) Co., Ltd. Guiyang Buynow Electronic Information Co.,
Ltd.
3 Non-operating
Receivables-Related
Parties
113,353 - 0.10%
026 Kapok Computer (Kunshan) Co., Ltd. Dezhou Buynow Electronic Information Co., Ltd. 3 Non-operating
Receivables-Related
Parties
74,743 - 0.07%
026 Kapok Computer (Kunshan) Co., Ltd. Shanghai Buynow Electronic Information Co.,
Ltd.
3 Non-operating
Receivables-Related
Parties
51,689 - 0.05%
026 Kapok Computer (Kunshan) Co., Ltd. Beijing Kaiye Electronic Technology Co., Ltd. 3 Non-operating
Receivables-Related
Parties
57,164 - 0.05%
026 Kapok Computer (Kunshan) Co., Ltd. Kapok Computer (Samoa) Corporation 3 Accounts Payable-Related
Parties
538,342 - 0.48%
026 Kapok Computer (Kunshan) Co., Ltd. The Company 2 Accounts Payable-Related
Parties
818,974 - 0.73%
028 Buynow (Nanchang) Industry Co., Ltd. Clevo (China) Investment Co., Ltd. 3 Other current financial
assets
260,135 5% 0.23%
028 Buynow (Nanchang) Industry Co., Ltd. Guiyang Buynow Electronic Information Co.,
Ltd.
3 Other current financial
assets
227,932 5% 0.20%
028 Buynow (Nanchang) Industry Co., Ltd. Dezhou Buynow Electronic Information Co., Ltd. 3 Other current financial
assets
64,810 5% 0.06%
028 Buynow (Nanchang) Industry Co., Ltd. Buynow (Jinzhou) Industry Co., Ltd. 3 Other current financial
assets
70,864 5% 0.06%
-312-
General ledger account Amount Transaction terms
Percentage of consolidated
total operating revenues or
total assets
(Note 3)
N0.
(Note 1)Company name Counterparty
Relationship
(Note 2)
Transaction
029 Buynow (Zhengzhou) Electronic Information Co.,
Ltd.
Changsha Hungyu Business Management Co.,
Ltd.
3 Other current financial
assets
$ 64,451 5% 0.06%
029 Buynow (Zhengzhou) Electronic Information Co.,
Ltd.
Buynow (Harbin) Industry Co., Ltd. 3 Other current financial
assets
149,981 5% 0.13%
029 Buynow (Zhengzhou) Electronic Information Co.,
Ltd.
Beijing Kaiye Electronic Technology Co., Ltd. 3 Other current financial
assets
146,304 5% 0.13%
029 Buynow (Zhengzhou) Electronic Information Co.,
Ltd.
Shantou Buynow Mall Co., Ltd. 3 Other current financial
assets
91,047 5% 0.08%
029 Buynow (Zhengzhou) Electronic Information Co.,
Ltd.
Guiyang Buynow Electronic Information Co.,
Ltd.
3 Other current financial
assets
86,876 5% 0.08%
037 Buynow (Guangzhou) Corporation Buynow(Guangzhou) Electronic Information
Co., Ltd.
3 Other current financial
assets
153,910 6 months LIBOR+2.5% 0.14%
040 Buynow Electronic Information (Shenyang) Co.,
Ltd.
Changsha Hungyu Business Management Co.,
Ltd.
3 Other current financial
assets
103,381 5% 0.09%
040 Buynow Electronic Information (Shenyang) Co.,
Ltd.
Yingkou Buynow Electronic Information Co.,
Ltd.
3 Other current financial
assets
136,840 5% 0.12%
040 Buynow Electronic Information (Shenyang) Co.,
Ltd.
Yingkou Buynow Electronic Information Co.,
Ltd.
3 Non-operating
Receivables-Related
Parties
66,771 - 0.06%
042 Buynow (Fujian) Electronic Technology
development Co., Ltd.
Shanghai Buynow Electronic Information Co.,
Ltd.
3 Other current financial
assets
74,004 5% 0.07%
042 Buynow (Fujian) Electronic Technology
development Co., Ltd.
Buynow(Guangzhou) Electronic Information
Co., Ltd.
3 Other current financial
assets
57,006 5% 0.05%
042 Buynow (Fujian) Electronic Technology
development Co., Ltd.
Buynow (Harbin) Industry Co., Ltd. 3 Other current financial
assets
136,123 5% 0.12%
042 Buynow (Fujian) Electronic Technology
development Co., Ltd.
Beijing Kaiye Electronic Technology Co., Ltd. 3 Other current financial
assets
80,732 5% 0.07%
042 Buynow (Fujian) Electronic Technology
development Co., Ltd.
Daqing Buynow Electronic Information Co., Ltd. 3 Other current financial
assets
255,157 5% 0.23%
042 Buynow (Fujian) Electronic Technology
development Co., Ltd.
Buynow Electronic Information (Huizhou) Co.,
Ltd
3 Other current financial
assets
55,032 5% 0.05%
042 Buynow (Fujian) Electronic Technology
development Co., Ltd.
Shantou Buynow Mall Co., Ltd. 3 Other current financial
assets
110,643 5% 0.10%
042 Buynow (Fujian) Electronic Technology
development Co., Ltd.
Quanzhou Buynow Industry Co., Ltd. 3 Other current financial
assets
85,217 5% 0.08%
048 Buynow (Changchun) Industry Co., Ltd. Shanghai Buynow Electronic Information Co.,
Ltd.
3 Other current financial
assets
155,812 5% 0.14%
048 Buynow (Changchun) Industry Co., Ltd. Buynow (Harbin) Industry Co., Ltd. 3 Other current financial
assets
111,899 5% 0.10%
048 Buynow (Changchun) Industry Co., Ltd. Zibo Buynow Electronic Information Co., Ltd. 3 Other current financial
assets
143,828 5% 0.13%
-313-
General ledger account Amount Transaction terms
Percentage of consolidated
total operating revenues or
total assets
(Note 3)
N0.
(Note 1)Company name Counterparty
Relationship
(Note 2)
Transaction
053 Quality Trust Property Management Co., Ltd. Anshan Buynow Electronic Information Co., Ltd. 3 Other current financial
assets
$ 76,605 5% 0.07%
056 Buynow (Harbin) Corporation Buynow (Harbin) Industry Co., Ltd. 3 Other current financial
assets
92,346 6 months LIBOR+2.5% 0.08%
060 Kalor Buynow (Heifei) Electronic Information Co.,
Ltd.
Shanghai Buynow Electronic Information Co.,
Ltd.
3 Other current financial
assets
108,629 5% 0.10%
060 Kalor Buynow (Heifei) Electronic Information Co.,
Ltd.
Buynow (Harbin) Industry Co., Ltd. 3 Other current financial
assets
120,649 5% 0.11%
060 Kalor Buynow (Heifei) Electronic Information Co.,
Ltd.
Luoyang Buynow Electronic Information Co.,
Ltd.
3 Other current financial
assets
159,705 5% 0.14%
065 Buynow (Chongqing) Industry Co., Ltd. Shantou Buynow Mall Co., Ltd. 3 Other current financial
assets
218,603 5% 0.19%
065 Buynow (Chongqing) Industry Co., Ltd. Guiyang Buynow Electronic Information Co.,
Ltd.
3 Non-operating
Receivables-Related
Parties
66,731 - 0.06%
068 Shanghai Buynow Electronic Products Market
Management Co., Ltd.
Buynow (Nanchang) Industry Co., Ltd. 3 Other current financial
assets
52,386 5% 0.05%
068 Shanghai Buynow Electronic Products Market
Management Co., Ltd.
Buynow (Fujian) Electronic Technology
development Co., Ltd.
3 Other current financial
assets
75,798 5% 0.07%
068 Shanghai Buynow Electronic Products Market
Management Co., Ltd.
Daqing Buynow Electronic Information Co., Ltd. 3 Other current financial
assets
159,176 5% 0.14%
068 Shanghai Buynow Electronic Products Market
Management Co., Ltd.
Anshan Buynow Electronic Information Co., Ltd. 3 Other current financial
assets
401,416 5% 0.36%
068 Shanghai Buynow Electronic Products Market
Management Co., Ltd.
Quanzhou Buynow Industry Co., Ltd. 3 Other current financial
assets
51,579 5% 0.05%
068 Shanghai Buynow Electronic Products Market
Management Co., Ltd.
Qingdao Buynow Technology Industry Co., Ltd. 3 Non-operating
Receivables-Related
Parties
67,148 - 0.06%
077 Tianjin Buynow Electronic Information Co., Ltd. Shanghai Buynow Electronic Information Co.,
Ltd.
3 Other current financial
assets
81,629 5% 0.07%
077 Tianjin Buynow Electronic Information Co., Ltd. Buynow (Fujian) Electronic Technology
development Co., Ltd.
3 Other current financial
assets
154,736 5% 0.14%
077 Tianjin Buynow Electronic Information Co., Ltd. Buynow (Xian) Industry Co., Ltd. 3 Other current financial
assets
84,768 5% 0.08%
077 Tianjin Buynow Electronic Information Co., Ltd. Qingdao Buynow Technology Industry Co., Ltd. 3 Other current financial
assets
188,194 5% 0.17%
077 Tianjin Buynow Electronic Information Co., Ltd. Anshan Buynow Electronic Information Co., Ltd. 3 Other current financial
assets
125,941 5% 0.11%
077 Tianjin Buynow Electronic Information Co., Ltd. Guiyang Buynow Electronic Information Co.,
Ltd.
3 Other current financial
assets
116,612 5% 0.10%
077 Tianjin Buynow Electronic Information Co., Ltd. Dezhou Buynow Electronic Information Co., Ltd. 3 Other current financial
assets
74,453 5% 0.07%
-314-
General ledger account Amount Transaction terms
Percentage of consolidated
total operating revenues or
total assets
(Note 3)
N0.
(Note 1)Company name Counterparty
Relationship
(Note 2)
Transaction
077 Tianjin Buynow Electronic Information Co., Ltd. Luoyang Buynow Electronic Information Co.,
Ltd.
3 Other current financial
assets
$ 70,820 5% 0.06%
077 Tianjin Buynow Electronic Information Co., Ltd. Luoyang Buynow Electronic Information Co.,
Ltd.
3 Non-operating
Receivables-Related
Parties
54,418 - 0.05%
082 Buynow (Yancheng) Electronoc Information
Technology Development Co. Ltd.
Shantou Buynow Mall Co., Ltd. 3 Other current financial
assets
499,415 5% 0.44%
082 Buynow (Yancheng) Electronoc Information
Technology Development Co. Ltd.
Dezhou Buynow Electronic Information Co., Ltd. 3 Other current financial
assets
130,068 5% 0.12%
084 Beijing Clevo Investment Management Consultant
Co.,Ltd.
Qingdao Buynow Technology Industry Co., Ltd. 3 Other current financial
assets
227,439 5% 0.20%
084 Beijing Clevo Investment Management Consultant
Co.,Ltd.
Buynow Electronic Information (Hangzhou) Co.,
Ltd
3 Other current financial
assets
197,344 5% 0.18%
084 Beijing Clevo Investment Management Consultant
Co.,Ltd.
Taizhou Buynow Electronic Information Co.,
Ltd.
3 Other current financial
assets
173,752 5% 0.15%
086 Guangdong Buynow Real Estate Management Co.,
Ltd.
Shanghai Buynow Electronic Information Co.,
Ltd.
3 Other current financial
assets
304,313 5% 0.27%
086 Guangdong Buynow Real Estate Management Co.,
Ltd.
Buynow (Nanchang) Industry Co., Ltd. 3 Other current financial
assets
308,350 5% 0.27%
086 Guangdong Buynow Real Estate Management Co.,
Ltd.
Buynow(Guangzhou) Electronic Information
Co., Ltd.
3 Other current financial
assets
59,652 5% 0.05%
086 Guangdong Buynow Real Estate Management Co.,
Ltd.
Buynow (Fujian) Electronic Technology
development Co., Ltd.
3 Other current financial
assets
197,344 5% 0.18%
086 Guangdong Buynow Real Estate Management Co.,
Ltd.
Qingdao Buynow Technology Industry Co., Ltd. 3 Other current financial
assets
134,956 5% 0.12%
086 Guangdong Buynow Real Estate Management Co.,
Ltd.
Daqing Buynow Electronic Information Co., Ltd. 3 Other current financial
assets
137,333 5% 0.12%
086 Guangdong Buynow Real Estate Management Co.,
Ltd.
Buynow Electronic Information (Hangzhou) Co.,
Ltd
3 Other current financial
assets
192,769 5% 0.17%
086 Guangdong Buynow Real Estate Management Co.,
Ltd.
Shantou Buynow Mall Co., Ltd. 3 Other current financial
assets
210,118 5% 0.19%
086 Guangdong Buynow Real Estate Management Co.,
Ltd.
Guiyang Buynow Electronic Information Co.,
Ltd.
3 Other current financial
assets
156,530 5% 0.14%
086 Guangdong Buynow Real Estate Management Co.,
Ltd.
Luoyang Buynow Electronic Information Co.,
Ltd.
3 Other current financial
assets
246,783 5% 0.22%
086 Guangdong Buynow Real Estate Management Co.,
Ltd.
Quanzhou Buynow Industry Co., Ltd. 3 Other current financial
assets
123,340 5% 0.11%
086 Guangdong Buynow Real Estate Management Co.,
Ltd.
Guiyang Buynow Electronic Information Co.,
Ltd.
3 Non-operating
Receivables-Related
Parties
52,059 - 0.05%
-315-
General ledger account Amount Transaction terms
Percentage of consolidated
total operating revenues or
total assets
(Note 3)
N0.
(Note 1)Company name Counterparty
Relationship
(Note 2)
Transaction
086 Guangdong Buynow Real Estate Management Co.,
Ltd.
Shanghai Buynow Electronic Information Co.,
Ltd.
3 Non-operating
Receivables-Related
Parties
$ 89,000 - 0.08%
098 Buynow (Taizhou) Corporation Taizhou Buynow Electronic Information Co.,
Ltd.
3 Other current financial
assets
200,083 6 months LIBOR+2.5% 0.18%
099 Taizhou Buynow Electronic Information Co., Ltd. Shanghai Buynow Electronic Information Co.,
Ltd.
3 Other current financial
assets
134,553 5% 0.12%
101 Dezhou Buynow Electronic Information Co., Ltd. Anshan Buynow Electronic Information Co., Ltd. 3 Other current financial
assets
242,195 5% 0.22%
110 Kunshan Kaishuo Trading Co., Ltd. Shanghai Buynow Electronic Information Co.,
Ltd.
3 Other current financial
assets
126,928 0.05 0.11%
Note 1: The numbers filled in for the transaction company in respect of inter-company transactions are as follows:
(1)Parent company is ‘0’.
(2)The subsidiaries are numbered in order starting from ‘1’.
Note 2: Relationship between transaction company and counterparty is classified into the following three categories; fill in the number of category each case belongs to (If transactions between
parent company and subsidiaries or between subsidiaries refer to the same transaction, it is not required to disclose twice. For example, if the parent company has already disclosed its
transaction with a subsidiary, then the subsidiary is not required to disclose the transaction; for transactions between two subsidiaries, if one of the subsidiaries has disclosed the
transaction, then the other is not required to disclose the transaction:
(1)Parent company to subsidiary.
(2)Subsidiary to parent company.
(3)Subsidiary to subsidiary.
Note 3: Regarding percentage of transaction amount to consolidated total operating revenues or total assets, it is computed based on period-end balance of transaction to consolidated total
assets for balance sheet accounts and based on accumulated transaction amount for the period to consolidated total operating revenues for income statement accounts.
Note 4: The Company may decide to disclose or not to disclose transaction details in this table based on the Materiality Principle.
-316-
Balance at
December 31,
2018
Balance at
December 31,
2017
Number of sharesOwnership
(%)Book value
The Company Clevo Computer Singapore Pte
Ltd.
Singapore Management and
advisory of
computers
$ 529,638 $ 529,638 27,544,070 100.00 $ 7,635,730 $ 124,875 $ 124,875 The subsidiary of the
Company
The Company Clevo (Cayman Islands) Holding
Company
Cayman
Islands
Investment 11,329,649 12,765,084 220,730,000 100.00 40,033,064 1,691,900 1,691,900 The subsidiary of the
Company
The Company Kapok Computer (Samoa)
Corporation
Samoa Investment 232,643 232,643 7,000,000 100.00 1,047,215 ( 203,174) ( 203,161) The subsidiary of the
Company
The Company Buynow On-Line Holding
Corporation
Samoa Investment 35,513 35,513 1,100,000 100.00 ( 5,929) ( 4,426) ( 4,426) The subsidiary of the
Company
The Company Clevo Investment Co., Ltd. Taiwan Investment 140,000 140,000 14,000,000 100.00 67,982 6,814 ( 1,665) The subsidiary of the
Company
The Company Kapok Computer Co., Ltd. Taiwan Design and sale of
computers and
computer
peripherals
80,000 80,000 8,000,000 100.00 53,576 14,279 8 The subsidiary of the
Company
The Company Lunaria Investment Gk Japan Investment 1,172,094 1,196,654 - 98.99 1,694,435 144,039 142,584 The subsidiary of the
Company
Clevo Computer Singapore Pte
Ltd.
Buynow (Chengdu) Corporation Samoa Investment 278,468 278,468 7,000,000 100.00 3,514,525 83,968 83,968 The Company as the
ultimate parent company
Clevo (Cayman Islands) Holding
Company
Buynow Global Corporation British Virgin
Islands
Investment 118,490 118,490 2,600,000 100.00 848,998 42,675 42,675 The Company as the
ultimate parent company
Clevo (Cayman Islands) Holding
Company
Buynow (Hangzhou) Corporation British Virgin
Islands
Investment 173,107 173,107 5,000,000 100.00 3,205,507 338,138 338,138 The Company as the
ultimate parent company
(Except as otherwise indicated)
CLEVO CO. and Subsidiaries
Initial investment amount
(Note 3)Shares held as at December 31, 2018
Information on investees
For the year ended December 31, 2018
Table 9 Expressed in thousands of NTD
InvestorInvestee
(Notes 1 and 2) Location
Main business
activities
Net profit (loss)
of the investee
for the year
ended December
31, 2018
(Note 2(2))
Investment
income (loss)
recognised by the
Company for the
year ended
December 31,
2018
(Note 2(3))
Footnote
-317-
Balance at
December 31,
2018
Balance at
December 31,
2017
Number of sharesOwnership
(%)Book value
Initial investment amount
(Note 3)Shares held as at December 31, 2018
InvestorInvestee
(Notes 1 and 2) Location
Main business
activities
Net profit (loss)
of the investee
for the year
ended December
31, 2018
(Note 2(2))
Investment
income (loss)
recognised by the
Company for the
year ended
December 31,
2018
(Note 2(3))
Footnote
Clevo (Cayman Islands) Holding
Company
Buynow (Zhengzhou)
Corporation
Samoa Investment $ 103,185 $ 103,185 3,000,000 100.00 $ 3,175,913 $ 67,704 $ 67,704 The Company as the
ultimate parent company
Clevo (Cayman Islands) Holding
Company
Buynow Group (Changsha)
Corporation
British Virgin
Islands
Investment 136,180 136,180 4,000,000 100.00 226,436 5,267 5,267 The Company as the
ultimate parent company
Clevo (Cayman Islands) Holding
Company
Buynow (Nanchang) Corporation Samoa Investment 104,484 104,484 3,000,000 100.00 2,031,979 720,965 720,965 The Company as the
ultimate parent company
Clevo (Cayman Islands) Holding
Company
Buynow (Guangzhou)
Corporation
Samoa Investment 161,745 161,745 5,000,000 100.00 2,403,408 47,291 47,291 The Company as the
ultimate parent company
Clevo (Cayman Islands) Holding
Company
Flying Wolf Investment Limited British Virgin
Islands
Investment 96,141 96,141 3,000,000 100.00 3,079,924 ( 4) ( 4) The Company as the
ultimate parent company
Clevo (Cayman Islands) Holding
Company
Buynow (Xiamen) Corporation Samoa Investment 95,502 95,502 3,000,000 100.00 1,869,588 41,295 41,295 The Company as the
ultimate parent company
Clevo (Cayman Islands) Holding
Company
Buynow Group (Xian)
Corporation
Samoa Investment 96,543 96,543 3,000,000 100.00 766,928 32,784 32,784 The Company as the
ultimate parent company
Clevo (Cayman Islands) Holding
Company
Buynow (Changchun)
Corporation
Samoa Investment 64,064 64,064 2,000,000 100.00 2,857,581 109,389 109,389 The Company as the
ultimate parent company
Clevo (Cayman Islands) Holding
Company
Buynow (Wuhan) Corporation Samoa Investment - 448,211 - 0.00 - 16,528 16,528 The Company as the
ultimate parent company
Clevo (Cayman Islands) Holding
Company
Buynow Group (Qingdao)
Corporation
Samoa Investment 115,648 115,648 3,500,000 100.00 117,432 3,117 3,117 The Company as the
ultimate parent company
Clevo (Cayman Islands) Holding
Company
Buynow (Chongqing) Limited Hong Kong Investment 169,140 169,140 5,000,000 100.00 1,094,930 8,462 8,462 The Company as the
ultimate parent company
-318-
Balance at
December 31,
2018
Balance at
December 31,
2017
Number of sharesOwnership
(%)Book value
Initial investment amount
(Note 3)Shares held as at December 31, 2018
InvestorInvestee
(Notes 1 and 2) Location
Main business
activities
Net profit (loss)
of the investee
for the year
ended December
31, 2018
(Note 2(2))
Investment
income (loss)
recognised by the
Company for the
year ended
December 31,
2018
(Note 2(3))
Footnote
Clevo (Cayman Islands) Holding
Company
Flying International Investment
Limited
Samoa Investment $ 178,968 $ 178,968 3,000,000 100.00 $ 2,374,832 ($ 42,517) ($ 42,517) The Company as the
ultimate parent company
Clevo (Cayman Islands) Holding
Company
Buynow (Wuxi) Electronic
Technology Development Co.,
Ltd.
Samoa Investment 64,054 64,054 2,000,000 100.00 1,216,613 41,214 41,214 The Company as the
ultimate parent company
Clevo (Cayman Islands) Holding
Company
Buynow (Harbin) Corporation Samoa Investment 99,012 99,012 3,000,000 100.00 188,597 ( 135,096) ( 135,096) The Company as the
ultimate parent company
Clevo (Cayman Islands) Holding
Company
Buynow (Daqing) Corporation Samoa Investment 96,894 96,894 3,000,000 100.00 ( 48,120) 8,321 8,321 The Company as the
ultimate parent company
Clevo (Cayman Islands) Holding
Company
Buynow (Zibo) Corporation Samoa Investment 95,805 95,805 3,000,000 100.00 ( 91,558) ( 19,958) ( 19,958) The Company as the
ultimate parent company
Clevo (Cayman Islands) Holding
Company
Buynow (Beijing) Corporation Samoa Investment 244,256 244,256 6,000,000 100.00 1,701,741 65,837 65,837 The Company as the
ultimate parent company
Clevo (Cayman Islands) Holding
Company
Skill Develop International
Limited
Samoa Investment 581,916 581,916 9,350,000 100.00 5,142,994 139,037 139,037 The Company as the
ultimate parent company
Clevo (Cayman Islands) Holding
Company
Buynow (Yancheng) Corporation Samoa Investment 931,920 931,920 31,500,000 100.00 759,909 6 6 The Company as the
ultimate parent company
Clevo (Cayman Islands) Holding
Company
Buynow (Huizhou) Corporation Samoa Investment 200,737 200,737 1,500,000 100.00 ( 58,539) ( 2,446) ( 2,446) The Company as the
ultimate parent company
Clevo (Cayman Islands) Holding
Company
Buynow (Yingkou) Corporation Samoa Investment 434,082 434,082 15,000,000 100.00 427,164 ( 383) ( 383) The Company as the
ultimate parent company
Clevo (Cayman Islands) Holding
Company
Buynow (Anshan) Corporation Samoa Investment 1,119,393 1,119,393 38,000,000 100.00 1,244,161 ( 2,664) ( 2,664) The Company as the
ultimate parent company
-319-
Balance at
December 31,
2018
Balance at
December 31,
2017
Number of sharesOwnership
(%)Book value
Initial investment amount
(Note 3)Shares held as at December 31, 2018
InvestorInvestee
(Notes 1 and 2) Location
Main business
activities
Net profit (loss)
of the investee
for the year
ended December
31, 2018
(Note 2(2))
Investment
income (loss)
recognised by the
Company for the
year ended
December 31,
2018
(Note 2(3))
Footnote
Clevo (Cayman Islands) Holding
Company
Buynow (Guiyang) Corporation Samoa Investment $ 301,236 $ 240,132 10,000,000 100.00 $ 269,436 ($ 319) ($ 319) The Company as the
ultimate parent company
Clevo (Cayman Islands) Holding
Company
Chicony Industry (Wuhan)
Co.,Ltd.
British Virgin
Islands
Investment 123,204 123,204 3,600,000 30.00 2,482,778 ( 87,046) ( 26,167) Investment accounted for
under equity method
Clevo (Cayman Islands) Holding
Company
Chicony Square (Cayman) Inc. Cayman
Islands
Investment 86,886 86,886 3,000,000 30.00 ( 48,753) ( 1,865) ( 560) Investment accounted for
under equity method
Clevo (Cayman Islands) Holding
Company
Chicony Chengdu International
Inc.
British Virgin
Islands
Investment 362,866 362,866 1,500,000 3.75 35,440 70,978 2,662 Investment accounted for
under equity method
Clevo (Cayman Islands) Holding
Company
Buynow (Taizhou) Corporation Samoa Investment 505,786 505,786 17,000,000 100.00 322,278 ( 22,517) ( 22,517) The Company as the
ultimate parent company
Clevo (Cayman Islands) Holding
Company
Smarter Capital Limited Samoa Investment 1,013,693 1,013,693 14,900,000 100.00 974,878 12,119 12,119 The Company as the
ultimate parent company
Clevo (Cayman Islands) Holding
Company
Buynow (Dezhou) Corporation Samoa Investment 881,914 881,914 30,000,000 100.00 762,415 ( 161,906) ( 161,906) The Company as the
ultimate parent company
Clevo (Cayman Islands) Holding
Company
Buynow (Luoyang) Corporation Samoa Investment 894,346 894,346 30,000,000 100.00 535,328 ( 18,896) ( 18,896) The Company as the
ultimate parent company
Clevo (Cayman Islands) Holding
Company
Buynow (Fujian Quanzhou)
Corporation
Samoa Investment 446,195 446,195 15,000,000 100.00 471,923 ( 2,205) ( 2,205) The Company as the
ultimate parent company
Clevo (Cayman Islands) Holding
Company
Buynow (Jinzhou) Corporation Samoa Investment 448,081 448,081 15,000,000 100.00 422,905 ( 9,956) ( 9,956) The Company as the
ultimate parent company
-320-
Balance at
December 31,
2018
Balance at
December 31,
2017
Number of sharesOwnership
(%)Book value
Initial investment amount
(Note 3)Shares held as at December 31, 2018
InvestorInvestee
(Notes 1 and 2) Location
Main business
activities
Net profit (loss)
of the investee
for the year
ended December
31, 2018
(Note 2(2))
Investment
income (loss)
recognised by the
Company for the
year ended
December 31,
2018
(Note 2(3))
Footnote
Clevo (Cayman Islands) Holding
Company
Buynow (Shantou) Corporation Samoa Investment $ 578,224 $ 578,224 19,200,000 100.00 $ 930,960 ($ 78,561) ($ 78,561) The Company as the
ultimate parent company
Clevo (Cayman Islands) Holding
Company
Clevo(Hk) Investment Holding
Limited
Hong Kong Investment 3,138 3,138 100,000 100.00 3,293 ( 3) ( 3) The Company as the
ultimate parent company
Clevo (Hk)Investment Holding
Limited
Clevo Japan Gk Japan Investment 2,817 2,817 - 100.00 3,639 124 124 The Company as the
ultimate parent company
Skill Develop International
Limited
Well Asia Investment Limited Hong Kong Investment 277,817 277,817 9,200,000 100.00 5,142,994 139,037 139,037 The Company as the
ultimate parent company
Smarter Capital Limited Buynow SZ. Corporation Samoa Investment 452,081 452,081 14,900,000 100.00 974,878 12,119 12,119 The Company as the
ultimate parent company
Buynow On-Line Holding
Corporation
Buynow On-Line Limited Hong Kong Investment 35,483 35,483 1,100,000 100.00 ( 5,929) ( 4,426) ( 4,426) The Company as the
ultimate parent company
Note 1: If a public company is equipped with an overseas holding company and takes consolidated financial report as the main financial report according to the local law rules, it can only
disclose the information of the overseas holding company about the disclosure of related overseas investee information.
Note 2: If situation does not belong to Note 1, fill in the columns according to the following regulations:
(1)The columns of ‘Investee’, ‘Location’, ‘Main business activities’, Initial investment amount’ and ‘Shares held as at June 30, 2015’ should fill orderly in the Company’s
(public company’s) information on investees and every directly or indirectly controlled investee’s investment information, and note the relationship between the Company (public
company) and its investee each (ex. direct subsidiary or indirect subsidiary) in the ‘footnote’ column..
(2)The ‘Net profit (loss) of the investee for the six-month period ended June 30, 2015’ column should fill in amount of net profit (loss) of the investee for this period.
(3)The ‘Investment income (loss) recognised by the Company for the six-month period ended June 30, 2015’ column should fill in the Company (public company) recognised investment
income (loss) of its direct subsidiary and recognised investment income (loss) of its investee accounted for under the equity method for this period. When filling in recognised
investment income (loss) of its direct subsidiary, the Company (public company) should confirm that direct subsidiary’s net profit (loss) for this period has included its
investment income (loss) which shall be recognised by regulations.
Note 3: Prepaid long-term investment funds is included.
-321-
Remitted to
Mainland
China
Remitted
back to
Taiwan
Buynow (Chengdu) Electronic
Information Co., Ltd.
Manufacturing, sale, maintenance service,
research and development of computers and
computer peripherals and digital products,
and property management of buildings.
$ 278,468 2 $ 278,468 - - $ 278,468 $ 83,968 100 $ 83,968 $ 3,514,525 - -
Buynow (Nanjing) Facility
Leasing And Management Co.,
Ltd.
Manufacturing, sale, research and
development
of computers and computer peripherals and
services for relating electronics
58,159 2 37,522 - - 37,522 ( 15,168) 100 ( 15,168) 1,961,912 - -
Kalor Buynow (Heifei)
Electronic Information Co.,
Ltd.
Manufacturing, sale, research and
development
of computers and computer peripherals and
services for relating electronics
69,491 2 - - - - 50,639 100 50,639 2,117,803 - -
Kapok Computer (Kunshan)
Co., Ltd.
Manufacturing, sale, research and
development and maintenance service
of computer, notebook, tablet, information
and communication products and computer
components
238,599 2 238,599 - - 238,599 ( 175,679) 100 ( 175,679) 1,219,226 - -
Kunshan Kaiming Trading
Co., Ltd.
Provide market management services for
operators of laptop computer, tablet,
desktop computer, palmtop computer,
information and communication products
and computer component.
17,746 3 - - - - ( 2,615) 100 ( 2,615) 1,261 - -
Investee in Mainland China Main business activities Paid-in capital
Investment
method
(Note 1)
Accumulated
amount of
remittance from
Taiwan to
Mainland China
as of January
1,2018
CLEVO CO. and Subsidiaries
Information on investments in Mainland China
For the year ended December 31, 2018
Table 10 Expressed in thousands of NTD
(Except as otherwise indicated)
Investment
income
(loss)
recognised by
the Company
for the year
ended
December
31,2018
(Note 2)
Book value of
investments in
Mainland China
as of December
31,2018
Accumulated
amount of
investment
income
remitted back
to Taiwan as of
December
31,2018
Footnote
Amount remitted from
Taiwan to Mainland
China/Amount remitted
back to Taiwan for the year
ended December 31, 2018
Accumulated
amount of
remittance from
Taiwan to
Mainland China
as of December
31,2018
Net income
of investee
as of
December
31,2018
Ownership
held by
the
Company
(direct or
indirect)
-322-
Remitted to
Mainland
China
Remitted
back to
Taiwan
Investee in Mainland China Main business activities Paid-in capital
Investment
method
(Note 1)
Accumulated
amount of
remittance from
Taiwan to
Mainland China
as of January
1,2018
Investment
income
(loss)
recognised by
the Company
for the year
ended
December
31,2018
(Note 2)
Book value of
investments in
Mainland China
as of December
31,2018
Accumulated
amount of
investment
income
remitted back
to Taiwan as of
December
31,2018
Footnote
Amount remitted from
Taiwan to Mainland
China/Amount remitted
back to Taiwan for the year
ended December 31, 2018
Accumulated
amount of
remittance from
Taiwan to
Mainland China
as of December
31,2018
Net income
of investee
as of
December
31,2018
Ownership
held by
the
Company
(direct or
indirect)
Chicony Industry (Wuhan)
Co.,Ltd.
Development, production and sales of
computer software and hardware, electronic
products;sales services, non-staple
food,;coffee shop operations;venue
rental
$ 1,927,049 2
CHICONY
SQUARE
(WUHAN)IN
C.
$ 526,552 - - $ 526,552 $ 181,977 30 $ 54,593 $ 1,040,452 - -
Wuhan Qunbai Industry Co.,
Ltd.
Development and sales of computer
software,hardware and electronic products;
sales services
58,904 3 - - - - 6,404 30 1,921 638,347 - -
Chicony Square (Wuhan)
Management Co., Ltd.
Sales of service and non-staple food;cafe
operation;venue rental
14,414 3 - - - - 8,062 25 2,015 27,628 - -
Qunguang Industrial (Xi'An)
Co., Ltd.
Development of computer software and
hardware, electronic products
4,053,756 3 - - - - ( 946,123) 30 ( 283,837) 775,426 - -
Buynow Electronic
Information (Hangzhou) Co.,
Ltd
Manufacturing, sale, maintenance service,
research and development of computers and
computer peripherals and digital products,
and property management of buildings.
198,848 2 198,848 - - 198,848 338,138 100 338,138 3,205,507 - -
Shanghai Buynow Electronic
Information Co., Ltd.
Rental of the display venues of computer
and related electronic product;information
consultation;maintenance services;
property management
521,418 2.3 56,778 - - 56,778 59,012 100 59,012 2,923,677 - -
Quality Trust Property
Management Co., Ltd.
Property management, advisory of real
estate, building leasing, housekeeping
service, parking lot service, car wash
service and business service
24,975 2 21,645 - - 21,645 21,270 100 21,270 193,561 - -
Wuxi Quntai Property
Management Co., Ltd.
Property management, advisory of real
estate, building leasing, housekeeping
service, parking lot service, car wash
service and business service
2,402 3 - - - - 3,036 100 3,036 19,670 - -
Shanghai Buynow Electronic
Products Market Management
Co., Ltd.
Provide market management services for
operators of electronic products.
504,484 3 - - - - 74,618 100 74,618 4,642,577 - -
Shanghai Buynow Computer
Market Management Co., Ltd.
Market management services 173,902 3 - - - - 59,857 100 59,857 - - -
-323-
Remitted to
Mainland
China
Remitted
back to
Taiwan
Investee in Mainland China Main business activities Paid-in capital
Investment
method
(Note 1)
Accumulated
amount of
remittance from
Taiwan to
Mainland China
as of January
1,2018
Investment
income
(loss)
recognised by
the Company
for the year
ended
December
31,2018
(Note 2)
Book value of
investments in
Mainland China
as of December
31,2018
Accumulated
amount of
investment
income
remitted back
to Taiwan as of
December
31,2018
Footnote
Amount remitted from
Taiwan to Mainland
China/Amount remitted
back to Taiwan for the year
ended December 31, 2018
Accumulated
amount of
remittance from
Taiwan to
Mainland China
as of December
31,2018
Net income
of investee
as of
December
31,2018
Ownership
held by
the
Company
(direct or
indirect)
SHANGHAI RESTAURANT
MANAGEMENT CO., LTD.
Catering business management, sale of
daily appliance, clothing, shoes and hats,
and electronic products.
$ 472 3 $ - - - $ - $ 1,145 100 $ 1,145 $ - - -
Beijing Kaiye Electronic
Technology Co., Ltd.
Technology-extension services, computer
maintenance, public parking lot service for
motorcycle, property management, business
management and advisory, business
building leasing, wholesale of computer
and computer peripherals, hardware
electronic and daily appliance.
231,961 3 - - - - 1,274 100 1,274 ( 307,569) - -
Changzhou Jiuzhou Buynow
Computer Mall Co., Ltd.
Leasing of facility, market management
service, sale of computer and computer
peripherals, electronic products, digital
products, internet technology service,
information advisory service, maintenance
of computer and computer peripherals.
152,885 3 - - - - 2,435 100 2,435 - - -
Buynow (Nanchang) Industry
Co., Ltd.
Manufacturing, sale, maintenance service,
research and development of computers and
computer peripherals and digital products,
and property management of buildings.
119,297 2 119,297 - - 119,297 720,965 100 720,965 2,031,979 - -
Changsha Hungyu Business
Management Co., Ltd.
Manufacturing, sale, maintenance service,
research and development of computers and
computer peripherals and digital products,
and property management of buildings.
119,297 2 119,297 - - 119,297 5,267 100 5,267 226,436 - -
Buynow (Zhengzhou)
Electronic Information Co.,
Ltd.
Manufacturing, sale, maintenance service,
research and development of computers and
computer peripherals and digital products.
119,123 2 119,123 - - 119,123 67,704 100 67,704 3,175,913 - -
-324-
Remitted to
Mainland
China
Remitted
back to
Taiwan
Investee in Mainland China Main business activities Paid-in capital
Investment
method
(Note 1)
Accumulated
amount of
remittance from
Taiwan to
Mainland China
as of January
1,2018
Investment
income
(loss)
recognised by
the Company
for the year
ended
December
31,2018
(Note 2)
Book value of
investments in
Mainland China
as of December
31,2018
Accumulated
amount of
investment
income
remitted back
to Taiwan as of
December
31,2018
Footnote
Amount remitted from
Taiwan to Mainland
China/Amount remitted
back to Taiwan for the year
ended December 31, 2018
Accumulated
amount of
remittance from
Taiwan to
Mainland China
as of December
31,2018
Net income
of investee
as of
December
31,2018
Ownership
held by
the
Company
(direct or
indirect)
Buynow(Guangzhou)
Electronic Information Co.,
Ltd.
Manufacturing, sale, maintenance service,
research and development of computers and
computer peripherals and digital products.
$ 198,670 2 $ 198,670 - - $ 198,670 $ 46,573 100 $ 46,573 $ 2,340,694 - -
Tianjin Buynow Electronic
Information Co., Ltd.
Development,producttion and sales of
computer hardware and software and
electronic digital technology products
224,794 2 206,061 - - 206,061 ( 48,691) 100 ( 48,691) 2,365,453 - -
Beijing Clevo Investment
Management Consultant
Co.,Ltd.
Business advisory of investment
management, wholesale agency of
electronic products, import and export of
goods and property management.
305,459 2 314,567 - - 314,567 74,615 100 74,615 2,239,134 - -
Buynow (Yancheng)
Electronoc Information
Technology Development Co.
Ltd.
Manufacturing, sale, maintenance service,
research and development of computers and
computer peripherals and digital products,
and advisory of business management.
942,511 2 942,511 - - 942,511 5 100 5 759,909 - -
Buynow (Xian) Industry Co.,
Ltd.
Manufacturing, sale, maintenance service,
research and development of computers and
computer peripherals and digital products.
116,528 2 116,528 - - 116,528 32,784 100 32,784 766,928 - -
Buynow (Fujian) Electronic
Technology development Co.,
Ltd.
Manufacturing, sale, maintenance service,
research and development of computers and
computer peripherals and digital products.
119,117 2 119,117 - - 119,117 41,295 100 41,295 1,869,588 - -
Chicony Dalu Enterprise
(Chengdu) Co., Ltd.
Developing and manufacturing computers,
hardware, electronic products;production
and sales of cosmetics and daily
necessities;rental business
2,291,275 2
CHICONY
CHENGDU
INTERNATIO
NAL INC.
687,382 - - 687,382 70,978 30 21,293 283,507 - -
Buynow Electronic
Information (Shenyang) Co.,
Ltd.
Research and development of computers
and computer peripherals and electronic
products, and advisory of economic
information
119,298 2 119,298 - - 119,298 ( 21,886) 100 ( 21,886) 2,445,761 - -
-325-
Remitted to
Mainland
China
Remitted
back to
Taiwan
Investee in Mainland China Main business activities Paid-in capital
Investment
method
(Note 1)
Accumulated
amount of
remittance from
Taiwan to
Mainland China
as of January
1,2018
Investment
income
(loss)
recognised by
the Company
for the year
ended
December
31,2018
(Note 2)
Book value of
investments in
Mainland China
as of December
31,2018
Accumulated
amount of
investment
income
remitted back
to Taiwan as of
December
31,2018
Footnote
Amount remitted from
Taiwan to Mainland
China/Amount remitted
back to Taiwan for the year
ended December 31, 2018
Accumulated
amount of
remittance from
Taiwan to
Mainland China
as of December
31,2018
Net income
of investee
as of
December
31,2018
Ownership
held by
the
Company
(direct or
indirect)
Guangdong Buynow Real
Estate Management Co., Ltd.
Self-owned property management and
leasing. manufacturing, sale, research and
development of computer software and
hardware and digital products.
$ 442,167 2.3 $ 363,300 - - $ 363,300 $ 214,084 100 $ 214,084 $ 7,910,979 - -
Buynow (Changchun) Industry
Co., Ltd.
Manufacturing, sale, maintenance service,
research and development of computers and
computer peripherals and digital products,
and property management of buildings.
81,539 2 77,656 - - 77,656 114,856 100 114,856 3,000,400 - -
Buynow (Wuhan) Industry
Co., Ltd.
Manufacturing, sale, maintenance service,
research and development of computer
software and digital products, and property
management of buildings.
468,580 2
BUYNOW
(WUHAN)
CORPORATI
ON
468,580 - ( 468,580) - ( 130,378) 30 ( 27,543) 272,926 - 註4
Qingdao Buynow Technology
Industry Co., Ltd.
Manufacturing, sale, research and
development
of computers and computer peripherals.
Display, advisory and after-sales service of
digital products. Property management of
self-owned buildings.
551,402 2.3 133,021 - - 133,021 15,139 100 15,139 570,336 - -
Buynow (Wuxi) Electronic
Technology Development Co.,
Ltd.
Manufacturing, sale, maintenance service,
research and development of computer
software and digital products
106,622 2 76,158 - - 76,158 57,698 100 57,698 1,703,224 - -
Wuxi Buynow Electronic
Market Co., Ltd.
Leasing of facility, market management
service, catering management, property
management, parking lot management.
2,454 3 - - - - 19 100 19 2,397 - -
Buynow (Harbin) Industry Co.,
Ltd.
Manufacturing, sale, maintenance service,
research and development of computers and
computer peripherals and digital products.
111,364 2 111,364 - - 111,364 ( 135,421) 100 ( 135,421) 185,455 - -
-326-
Remitted to
Mainland
China
Remitted
back to
Taiwan
Investee in Mainland China Main business activities Paid-in capital
Investment
method
(Note 1)
Accumulated
amount of
remittance from
Taiwan to
Mainland China
as of January
1,2018
Investment
income
(loss)
recognised by
the Company
for the year
ended
December
31,2018
(Note 2)
Book value of
investments in
Mainland China
as of December
31,2018
Accumulated
amount of
investment
income
remitted back
to Taiwan as of
December
31,2018
Footnote
Amount remitted from
Taiwan to Mainland
China/Amount remitted
back to Taiwan for the year
ended December 31, 2018
Accumulated
amount of
remittance from
Taiwan to
Mainland China
as of December
31,2018
Net income
of investee
as of
December
31,2018
Ownership
held by
the
Company
(direct or
indirect)
Buynow (Chongqing) Industry
Co., Ltd.
Manufacturing, sale, research and
development of computers and computer
peripherals(not including electronic
publishing), shopping mall management,
wholesale and retail of electronic products,
property management and parking lot
service.
$ 164,167 2 $ 164,167 - - $ 164,167 $ 8,462 100 $ 8,462 $ 1,094,928 - -
Shanghai Buynow Online
Information Technology Co.,
Ltd.
Wholesale and retail, import and export,
and after-sales service of household
appliances, computer and computer
components, communication equipment,
electrical devices, office supplies and
complementary products. Development,
technology transfer, advisory, service and
training of Internet, computer software and
hardware and communication equipment.
32,630 2 32,630 - - 32,630 ( 4,507) 100 ( 4,507) ( 8,890) - -
Daqing Buynow Electronic
Information Co., Ltd.
Manufacturing, retail and wholesale of
computers and computer peripherals, and
electronic information shopping mall
management.
98,158 2 98,158 - - 98,158 8,321 100 8,321 ( 48,120) - -
Buynow Electronic
Information (Huizhou) Co.,
Ltd
Manufacturing, sale, research and
development and after-sales service of
computers and computer peripherals.
Property management of buildings.
120,115 2.3 211,996 - - 211,996 ( 6,116) 100 ( 6,116) ( 146,348) - -
Shantou Buynow Mall Co.,
Ltd.
Investment in companies primarily engaged
in research and development and advisory
service.
574,562 2 574,562 - - 574,562 ( 78,561) 100 ( 78,561) 930,960 - -
-327-
Remitted to
Mainland
China
Remitted
back to
Taiwan
Investee in Mainland China Main business activities Paid-in capital
Investment
method
(Note 1)
Accumulated
amount of
remittance from
Taiwan to
Mainland China
as of January
1,2018
Investment
income
(loss)
recognised by
the Company
for the year
ended
December
31,2018
(Note 2)
Book value of
investments in
Mainland China
as of December
31,2018
Accumulated
amount of
investment
income
remitted back
to Taiwan as of
December
31,2018
Footnote
Amount remitted from
Taiwan to Mainland
China/Amount remitted
back to Taiwan for the year
ended December 31, 2018
Accumulated
amount of
remittance from
Taiwan to
Mainland China
as of December
31,2018
Net income
of investee
as of
December
31,2018
Ownership
held by
the
Company
(direct or
indirect)
Zibo Buynow Electronic
Information Co., Ltd.
Manufacturing, sale, maintenance service,
research and development of computers and
computer peripherals and digital products.
Advisory of business management, leasing
of self-owned buildings, parking lot
management, shopping mall management
and property management.
$ 98,012 2 $ 98,012 - - $ 98,012 ($ 19,958) 100 ($ 19,958) ($ 91,558) - -
Yingkou Buynow Electronic
Information Co., Ltd.
Manufacturing, sale, maintenance service,
research and development of computers and
computer peripherals and digital products,
and advisory of business management.
464,194 2 464,194 - - 464,194 ( 383) 100 ( 383) 427,163 - -
Anshan Buynow Electronic
Information Co., Ltd.
Manufacturing, sale, maintenance service,
research and development of computers and
computer peripherals and digital products,
and advisory of business management.
1,150,017 2 1,150,017 - - 1,150,017 ( 2,664) 100 ( 2,664) 1,244,161 - -
Clevo (China) Investment Co.,
Ltd.
Investment in companies primarily engaged
in research and development and advisory
service.
897,135 2 897,135 - - 897,135 ( 44,879) 100 ( 44,879) 2,565,508 - -
Guiyang Buynow Electronic
Information Co., Ltd.
Research and development of computers
and computer peripherals and electronic
products, and advisory service of business
management.
303,271 2 241,587 61,684 - 303,271 ( 319) 100 ( 319) 269,435 - -
Taizhou Buynow Electronic
Information Co., Ltd.
Manufacturing, sale, maintenance service,
research and development of computers and
computer peripherals and digital products,
and advisory of business management.
507,871 2 507,871 - - 507,871 ( 22,062) 100 ( 22,062) 322,943 - -
Suzhou Jinzuo Industry Co.,
Ltd.
Business affairs and property management
business
480,460 2 1,008,954 - - 1,008,954 12,119 100 12,119 974,878 - -
-328-
Remitted to
Mainland
China
Remitted
back to
Taiwan
Investee in Mainland China Main business activities Paid-in capital
Investment
method
(Note 1)
Accumulated
amount of
remittance from
Taiwan to
Mainland China
as of January
1,2018
Investment
income
(loss)
recognised by
the Company
for the year
ended
December
31,2018
(Note 2)
Book value of
investments in
Mainland China
as of December
31,2018
Accumulated
amount of
investment
income
remitted back
to Taiwan as of
December
31,2018
Footnote
Amount remitted from
Taiwan to Mainland
China/Amount remitted
back to Taiwan for the year
ended December 31, 2018
Accumulated
amount of
remittance from
Taiwan to
Mainland China
as of December
31,2018
Net income
of investee
as of
December
31,2018
Ownership
held by
the
Company
(direct or
indirect)
Suzhou Buynow Department
Store Co., Ltd.
Wholesale and retail of daily goods, office
supplies, shoes, hats and bags, household
appliance, sporting goods, hardware
electronic, watch and the first-class medical
device.
$ 519 3 $ - - - $ - $ 1,615 100 $ 1,615 $ 169 - -
Dezhou Buynow Electronic
Information Co., Ltd.
Research and development
and maintenance service of computers and
computer peripherals and electronic
products. Advisory service of business
management and shopping mall
management.
881,914 2 881,914 - - 881,914 ( 161,906) 100 ( 161,906) 762,415 - -
Luoyang Buynow Electronic
Information Co., Ltd.
Research and development
and maintenance service of computers and
computer peripherals and electronic
products. Advisory service of business
management and shopping mall
management.
893,922 2 893,922 - - 893,922 ( 18,896) 100 ( 18,896) 535,328 - -
Quanzhou Buynow Industry
Co., Ltd.
Research and development
and maintenance service of computers and
computer peripherals and electronic
products. Advisory service of business
management and shopping mall
management.
446,195 2 446,195 - - 446,195 ( 2,205) 100 ( 2,205) 471,923 - -
Buynow (Jinzhou) Industry
Co., Ltd.
Manufacturing of computer software and
hardware and consumer electronic products,
advisory of business management and
shopping mall management.
448,342 2 448,342 - - 448,342 ( 9,956) 100 ( 9,956) 422,905 - -
-329-
Remitted to
Mainland
China
Remitted
back to
Taiwan
Investee in Mainland China Main business activities Paid-in capital
Investment
method
(Note 1)
Accumulated
amount of
remittance from
Taiwan to
Mainland China
as of January
1,2018
Investment
income
(loss)
recognised by
the Company
for the year
ended
December
31,2018
(Note 2)
Book value of
investments in
Mainland China
as of December
31,2018
Accumulated
amount of
investment
income
remitted back
to Taiwan as of
December
31,2018
Footnote
Amount remitted from
Taiwan to Mainland
China/Amount remitted
back to Taiwan for the year
ended December 31, 2018
Accumulated
amount of
remittance from
Taiwan to
Mainland China
as of December
31,2018
Net income
of investee
as of
December
31,2018
Ownership
held by
the
Company
(direct or
indirect)
Kunshan Kaishuo Trading Co.,
Ltd.
Mechanical equipment and accessories,
wire and cable, air conditioning equipment,
building and decoration material, lighting
equipment,
Kitchen appliance, water cleaner, pipeline
and accessories, fire safety equipment,
compressor and accessories, wholesale of
elevators and appliances, import and export
and advisory services
$ 30,198 2 $ 30,198 - - $ 30,198 $ 111 100 $ 111 $ 28,381 - -
Shanghai Huihei Advertisment
Co., Ltd.
Advertising design and marketing 4,850 3 - - - - 639 100 639 5,474 - -
Shanghai Huizhuan Restaurant
Management Co., Ltd.
Catering business management 22,884 3 - - - - ( 8,117) 100 ( 8,117) ( 13,370) - -
Xiamen Lejing Internet Bar
Co., Ltd.
Internet café and internet message service 465 3 - - - - ( 525) 100 ( 525) ( 3,815) - -
Note 1: Investment methods are classified into the following three categories; fill in the number of category each case belongs to:
(1)Directly invest in a company in Mainland China..
(2) Through investing in an existing company in the third area, which then invested in the investee in Mainland China.
(3) Others
Note 2: In the ‘Investment income (loss) recognised by the Company for the year ended December 31, 2018 column:
(1)It should be indicated if the investee was still in the incorporation arrangements and had not yet any profit during this period.
(2)Indicate the basis for investment income (loss) recognition in the number of one of the following three categories:
A.The financial statements that are audited and attested by international accounting firm which has cooperative relationship with accounting firm in R.O.C.
B.The financial statements that are audited and attested by R.O.C. parent company’s CPA.
C.Others.
Note 3: The numbers in this table are expressed in New Taiwan Dollars.
Note 4: Buynow (Wuhan) Corporation was sold on March 31, 2007. However, the Company still indirectly holds 30% of the shares after the sale.
-330-
Company name
CLEVO CO. 13,393,300$ $ $25,103,905
(USD 421,680 thousand of USD)
15,192,549 (USD 466,227
thousand of USD)
Note 1: According to the amended regulation, “The Principle of Investment and Technical Cooperation in China”, issued by
Ministry of Economic Affairs on August 29, 2008(No. 09704604680), the investor can only make an investment toward China
up to 60% of its individual or consolidated net worth, whichever is larger. The ultimate limit of investment is 60% of the
consolidated net worth. (41,839,842 x 60% = 25,103,905)
Note 2: It has been liquidated as of December 31, 2018, and has been approved to invest US$4,120,000 by the
Ministry of Economic Affairs.
Note 3: As of December 31, 2018,the capital increased by the earnings extension has been approved by the Ministry of Economic
Affairs for an investment of US$9,750,000.
Note 4: Guiyang Buynow Electronic Information Co., Ltd. has been approved by the Ministry of Economic Affairs for
an investment of US$10,000,000. However, it remains unremitted until December 31, 2018.
Accumulated amount of
remittance from Taiwan to
Mainland China as of
December 31,2018
Investment amount
approvedby the Investment
Commission of the
Ministry of Economic
Affairs (MOEA)
Ceiling on
investments in
Mainland China
imposed by the
Investment
Commission of
MOEA
-331-
REPORT OF INDEPENDENT ACCOUNTANTS
TRANSLATED FROM CHINESE
To the Board of Directors and Shareholders of Clevo Co.
PWCR 18004334
Opinion
We have audited the accompanying parent company only balance sheets of Clevo Co. (the
“Company”) as at December 31, 2018 and 2017, and the related parent company only statements of
comprehensive income, of changes in equity and of cash flows for the years then ended, and 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 financial position of Clevo Co. as at December 31, 2018 and 2017, and its financial
performance and its cash flows for the years then ended in accordance with the “Regulations Governing
the Preparation of Financial Reports by Securities Issuers.”
Basis for opinion
We conducted our audits in accordance with the “Regulations Governing Auditing and Attestation
of Financial Statements by Certified Public Accountants” and generally accepted auditing standards in
the Republic of China (ROC GAAS). Our responsibilities under those standards are further described in
the Auditor’s 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 Code of Professional Ethics for
Certified Public Accountants in the Republic of China (the “Code”), and we have fulfilled our other
ethical responsibilities in accordance with the Code. 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 of the current period. 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, we do not provide a separate opinion on these matters.
Key audit matters for the Company’s parent company only financial statements of the current
period are stated as follows:
-332-
Valuation of investment properties
Description
Refer to Note 4(15) for accounting policies on investment properties, Note 5(2) for uncertainty of
accounting estimates and assumptions in relation to the fair value measurement of investment properties,
and Note 6(7) for details of investment properties. As at December 31, 2018, investment properties at
fair value amounted to NT$1,576,905 thousand.
The parent company measures investment properties with fair value model. The fair value
measurement is based on income approach and the discounted cash flow by using estimated future rental
income less essential costs, and obtaining the valuation report by appraiser as valuation basis in
accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”.
The discount rate and future rental income used as the basis of fair value measurement mentioned
above involves future prediction, and the estimated result has a significant impact on fair value
measurement. Therefore, we consider the valuation of investment properties as a key audit matter.
How our audit addressed the matter
We performed the following audit procedures in respect of the above key audit matter:
1. Examined the analysis period and assumption methods used in the valuation report by the
independent appraisers in accordance with the “Regulations Governing the Preparation of
Financial Reports by Securities Issuers.”
2. Evaluated the reasonableness of rental earnings related to individual investment property, current
market rents for similar comparable properties, rental growth rate and industry forecast reports.
3. Evaluated the reasonableness of discount rate used in valuation and capital costs caused by local
property environment.
Valuation of inventories
Description
Refer to Note 4(12) for accounting policy on the valuation of inventories, Note 5(2) for uncertainty
of accounting estimations and assumptions in relation to inventory valuation, and Note 6(4) for the
details of inventory valuation. As at December 31, 2018, the balance of inventory and allowance for
inventory valuation losses amounted to NT$304,936 thousand and NT$11,293 thousand, respectively.
The Company is primarily engaged in manufacturing and sales of notebook computers. Due to rapid
technological innovations, short lifespan of electronic products and fluctuations in market prices, there
is a higher risk for inventory losses due from market value decline or obsolescence.
-333-
The parent company recognises inventories at the lower of cost and net realisable value, and the net
realisable value is estimated based on the age and the damage of inventory. As the amounts of inventories
are material, the types of inventories vary, and the estimation of net realizable value is subject to
management’s judgment, we consider the allowance for inventory valuation losses a key audit matter.
How our audit addressed the matter
We performed the following procedures in respect of the above key audit matter:
1. Ensured consistent application of accounting policies in relation to allowance for inventory
valuation losses and assessed the reasonableness of these policies.
2. Obtained the listings of lower of cost or net realizable value and obsolescence losses amount,
sampled and inspected related supporting documents. Calculated the accuracy and assessed the
reasonableness of the estimation of net realizable value.
3. Verified information obtained from physical inventory of notebook computers, and inquired
management and relevant staff if the inventory is identified as slow-moving, surplus, obsolete or
damaged.
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 audit committee, are responsible for overseeing the
Company’s financial reporting process.
Auditor’s responsibilities for the audit of the parent company only financial
statements
Our objectives are to obtain reasonable assurance about whether the parent company only financial
-334-
statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not
a guarantee that an audit conducted in accordance with ROC GAAS 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 ROC GAAS, 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 auditor’s report to the related disclosures in the parent company only financial statements or,
if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions
may cause the Company to cease to continue as a going concern.
5. Evaluate the overall presentation, structure and content of the parent company only financial
statements, including the disclosures, and whether the parent company only financial statements
represent the underlying transactions and events in a manner that achieves fair presentation.
6. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Company to express an opinion on the parent company only
-335-
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 of the current
period and are therefore the key audit matters. We describe these matters in our auditor’s report unless
law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances,
we determine that a matter should not be communicated in our report because the adverse consequences
of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
Feng, Min-Juan Wu, Han-Chi
For and on behalf of PricewaterhouseCoopers, Taiwan
March 27, 2019
----------------------------------------------------------------------------------------------------------------------------- -------------------- The accompanying parent company only financial statements are not intended to present the financial position and results
of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions
other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of
such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of
China. Accordingly, the accompanying parent company only financial statements and report of independent accountants are
not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted
in the Republic of China, and their applications in practice.
-336-
December 31, 2018 December 31, 2017
Assets Notes AMOUNT % AMOUNT %
Current assets
1100 Cash and cash equivalents 6(1) $ 4,775,480 7 $ 5,016,809 7
1110 Financial assets at fair value
through profit or loss - current
6(2) and 12(4)
655,929 1 179,568 -
1125 Available-for-sale financial assets
- current
12(4)
- - 384,117 1
1136 Financial assets at amortised cost
- current
6(1)
3,409,922 5 - -
1170 Accounts receivable, net 6(3) 1,418,908 2 1,692,558 2
1180 Accounts receivable - related
parties
7
818,974 1 536,019 1
130X Inventories 6(4) 293,643 - 430,964 1
1410 Prepayments 7 1,232,073 2 65,901 -
1476 Other financial assets - current 6(1) - - 3,084,800 5
1479 Other current assets 7 111,704 - 147,719 -
11XX Total current assets 12,716,633 18 11,538,455 17
Non-current assets
1550 Investments accounted for under
the equity method
6(5)
50,526,073 73 49,457,752 72
1600 Property, plant and equipment 6(6) and 8 340,737 1 345,165 -
1760 Investment property, net 6(7) and 8 1,576,905 2 1,568,993 2
1780 Intangible assets 4,972 - 9,323 -
1840 Deferred income tax assets 6(24) 139,132 - 132,105 -
1920 Refundable deposits 7,985 - 7,965 -
1960 Prepayments for investments 6(5) and 7 4,425,325 6 5,860,760 9
1990 Other non-current assets 14,165 - 3,424 -
15XX Total non-current assets 57,035,294 82 57,385,487 83
1XXX Total assets $ 69,751,927 100 $ 68,923,942 100
(Continued)
-337-
December 31, 2018 December 31, 2017
Liabilities and Equity Notes AMOUNT % AMOUNT %
Current liabilities
2100 Short-term borrowings 6(8) $ 3,594,790 5 $ 3,702,000 5
2130 Contract liabilities, current 12(5) 24,382 - - -
2150 Notes payable 15,070 - 15,236 -
2170 Accounts payable 270,965 - 443,784 1
2200 Other payables 7 363,089 1 333,785 1
2230 Current income tax liabilities - - - -
2250 Provisions 6(12) 50,523 - 50,523 -
2305 Other current financial liabilities 7 91,000 - 85,000 -
2320 Long-term liabilities, current
portion
6(10)
- - 820,000 1
2399 Other current liabilities 9,139 - 574,637 1
21XX Total current liabilities 4,418,958 6 6,024,965 9
Non-current liabilities
2530 Corporate bonds payable 6(9) 5,000,000 7 5,000,000 7
2540 Long-term borrowings 6(10) 17,555,000 25 13,401,539 20
2570 Deferred income tax liabilities 6(24) 721,984 1 626,740 1
2645 Guarantee deposits received 11,548 - 9,948 -
2670 Other non-current liabilities 6(11)(13) and 7 204,595 1 1,576,613 2
25XX Total non-current liabilities 23,493,127 34 20,614,840 30
2XXX Total liabilities 27,912,085 40 26,639,805 39
Equity
Share capital 6(14)
3110 Common stock 6,797,630 10 6,831,630 10
Capital surplus 6(15)
3200 Capital surplus 982,539 1 1,581,974 2
Retained earnings 6(16)
3310 Legal reserve 1,578,852 3 1,507,074 2
3320 Special reserve 34,937,216 50 33,929,051 49
3350 Unappropriated retained earnings 1,547,516 2 1,079,944 2
Other equity interest 6(17)
3400 Other equity interest ( 2,720,683 ) ( 4 ) ( 2,020,190 ) ( 3 )3500 Treasury stocks 6(14) ( 1,283,228 ) ( 2 ) ( 625,346 ) ( 1 )
3XXX Total equity 41,839,842 60 42,284,137 61
Significant contingent liabilities
and unrecognised contract
commitments
9
Significant events after the
balance sheet date
11
3X2X Total liabilities and equity $ 69,751,927 100 $ 68,923,942 100
-338-
Years ended December 31,
2018 2017
Items Notes AMOUNT % AMOUNT %
4000 Operating revenue 6(18) $ 14,560,392 100 $ 14,131,684 100
5000 Operating costs 6(4)(22)(23) and
7 ( 13,551,524 ) ( 93 ) ( 13,052,004 ) ( 92 )
5900 Net operating margin 1,008,868 7 1,079,680 8
5910 Unrealised profit from sales ( 65 ) - ( 1,574 ) -
5920 Realised profit (loss) from
sales 1,574 - ( 1,153 ) -
5950 Net operating margin 1,010,377 7 1,076,953 8
Operating expenses 6(22)(23)
6100 Selling expenses ( 214,454 ) ( 1 ) ( 221,265 ) ( 1 )
6200 General and administrative
expenses ( 497,039 ) ( 3 ) ( 538,814 ) ( 4 )
6300 Research and development
expenses ( 528,608 ) ( 4 ) ( 520,312 ) ( 4 )
6000 Total operating expenses ( 1,240,101 ) ( 8 ) ( 1,280,391 ) ( 9 )
6900 Operating profit ( 229,724 ) ( 1 ) ( 203,438 ) ( 1 )
Non-operating income and
expenses
7010 Other income 6(7)(19) 347,876 2 345,377 2
7020 Other gains and losses 6(20) 73,410 1 ( 406,566 ) ( 3 )
7050 Finance costs 6(21) and 7 ( 391,025 ) ( 3 ) ( 391,840 ) ( 3 )
7070 Share of profit of associates
and joint ventures accounted
for using equity method, net 1,750,117 12 1,518,916 11
7000 Total non-operating
income and expenses 1,780,378 12 1,065,887 7
7900 Profit before income tax 1,550,654 11 862,449 6
7950 Income tax expense 6(24) ( 95,750 ) ( 1 ) ( 144,665 ) ( 1 )
8200 Profit for the year $ 1,454,904 10 $ 717,784 5
(Continued)
-339-
Years ended December 31,
2018 2017
Items Notes AMOUNT % AMOUNT %
Other comprehensive income Components of other comprehensive income that will not be reclassified to profit or loss
8311 Loss on remeasurements of defined benefit plan
6(11) ( $ 6,585 ) - ( $ 4,946 ) -
8312 Gain on revaluation - - 25,207 - 8349 Income tax related to
components of other comprehensive income that will not be reclassified to profit or loss
6(24)
1,317 - ( 3,444 ) - 8310 Other comprehensive
income that will not be reclassified to profit or loss ( 5,268 ) - 16,817 -
Components of other comprehensive income that will be reclassified to profit or loss
8361 Financial statements translation differences of foreign operations
6(17)
( 594,951 ) ( 4 ) ( 1,209,919 ) ( 9 ) 8362 Unrealized loss on valuation
of available-for-sale financial assets
6(17)
- - ( 60,061 ) - 8380 Share of other comprehensive
income of associates and joint ventures accounted for under equity method
- - 83 - 8399 Income tax related to the
components of other comprehensive income
6(24)
( 7,663 ) - ( 12,156 ) - 8360 Other comprehensive loss
that will be reclassified to profit or loss ( 602,614 ) ( 4 ) ( 1,282,053 ) ( 9 )
8300 Other comprehensive loss for the year ( $ 607,882 ) ( 4 ) ( $ 1,265,236 ) ( 9 )
8500 Total comprehensive income (loss) for the year $ 847,022 6 ( $ 547,452 ) ( 4 )
Earnings per share 9750 Basic earnings per share 6(25) $ 2.32 $ 1.12
9850 Diluted earnings per share 6(25) $ 2.30 $ 1.11
-340-
Year ended December 31, 2017
Balance at January 1, 2017 $ 6,831,630 $ 1,379,498 $ 183,164 $ 1,447,592 $ 33,727,355 $ 1,105,657 ( $ 916,916 ) $ 157,857 $ - ( $ 625,346 ) $ 43,290,491 Profit for the year - - - - - 717,784 - - - - 717,784 Other comprehensive income (loss) for
the year6(17)
- - - - - ( 4,105 ) ( 1,222,075 ) ( 59,978 ) 20,922 - ( 1,265,236 ) Total comprehensive income (loss) for
the year - - - - - 713,679 ( 1,222,075 ) ( 59,978 ) 20,922 - ( 547,452 ) Appropriations of 2016 earnings 6(16)
Legal reserve - - - 59,482 - ( 59,482 ) - - - - - Special reserve - - - - 201,696 ( 201,696 ) - - - - - Cash dividends - - - - - ( 478,214 ) - - - - ( 478,214 )
Adjustment to capital surplus arising from dividends paid to subsidiaries - - 19,312 - - - - - - - 19,312
Balance at December 31, 2017 $ 6,831,630 $ 1,379,498 $ 202,476 $ 1,507,074 $ 33,929,051 $ 1,079,944 ( $ 2,138,991 ) $ 97,879 $ 20,922 ( $ 625,346 ) $ 42,284,137 Year ended December 31, 2018
Balance at January 1, 2018 $ 6,831,630 $ 1,379,498 $ 202,476 $ 1,507,074 $ 33,929,051 $ 1,079,944 ( $ 2,138,991 ) $ 97,879 $ 20,922 ( $ 625,346 ) $ 42,284,137 Effects of retrospective application and
retrospective restatement6(17) and 12(4) - - - - - 97,879 - ( 97,879 ) - - -
Balance at January 1, 2018 after adjustments 6,831,630 1,379,498 202,476 1,507,074 33,929,051 1,177,823 ( 2,138,991 ) - 20,922 ( 625,346 ) 42,284,137
Profit for the year - - - - - 1,454,904 - - - - 1,454,904 Other comprehensive income (loss) for
the year6(17)
- - - - - ( 5,268 ) ( 602,614 ) - - - ( 607,882 ) Total comprehensive income (loss) for
the year - - - - - 1,449,636 ( 602,614 ) - - - 847,022
Appropriations of 2017 earnings 6(16)
Legal reserve - - - 71,778 - ( 71,778 ) - - - - - Special reserve - - - - 1,008,165 ( 1,008,165 ) - - - - - Cash dividends 6(16) - ( 546,530 ) - - - - - - - - ( 546,530 )
Treasury stock acquired 6(14) - - - - - - - - - ( 767,537 ) ( 767,537 ) Treasury stock cancelled 6(14) ( 34,000 ) - ( 75,655 ) - - - - - - 109,655 - Adjustment to capital surplus arising
from dividends paid to subsidiaries - - 22,750 - - - - - - - 22,750
Balance at December 31, 2018 $ 6,797,630 $ 832,968 $ 149,571 $ 1,578,852 $ 34,937,216 $ 1,547,516 ( $ 2,741,605 ) $ - $ 20,922 ( $ 1,283,228 ) $ 41,839,842
-341-
CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax $ 1,550,654 $ 862,449 Adjustments Adjustments to reconcile profit (loss)
Depreciation 6(6)(22) 11,651 10,932 Amortisation 6(22) 5,819 7,441 Loss on financial assets at fair value through profit
or loss 6(20)
124,827 25,421 Interest expense 6(21) 391,025 391,840 Interest income 6(19) ( 101,081 ) ( 64,569 ) Dividend income 6(19) ( 30,702 ) ( 42,836 ) Share of profit of associates and joint ventures
accounted for under the equity method 6(5)
( 1,750,117 ) ( 1,518,916 ) Gain on disposal of property, plant and equipment 6(6)(20) - ( 476 ) Loss (gain) on disposal of investments 6(20) 13,410 ( 113,160 ) (Gain) loss on adjustments of investment properties
at fair value 6(7)(20)
( 7,912 ) 120 Changes in operating assets and liabilities Changes in operating assets
Financial assets at fair value through profit or loss ( 230,481 ) 388,436 Accounts receivable ( 9,305 ) 258,875 Inventories 137,321 59,279 Prepayments ( 1,166,172 ) 1,076,674 Other current assets 53,405 33,237
Changes in operating liabilities Contract liabilities - current ( 542,263 ) 342,770 Notes payable ( 166 ) 1,134 Accounts payable ( 172,819 ) ( 250,486 ) Other payables 20,935 ( 49,401 ) Provisions - 2,966 Other current liabilities 1,147 - Other non-current liabilities ( 9,879 ) ( 14,120 )
Cash (outflow) inflow generated from operations ( 1,710,703 ) 1,407,610 Interest received 98,951 57,765 Dividends received 30,702 42,836 Cash dividends received from investments accounted
for under the equity method 111,105 136,047 Interest paid ( 400,114 ) ( 495,066 ) Income taxes paid ( 13,879 ) ( 30,803 )
Net cash flows (used in) from operating activities ( 1,883,938 ) 1,118,389
(Continued)
-342-
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from disposal of available-for-sale
financial assets
6(27)
$ - $ 461,615
Decrease in prepayments for investments 1,435,435 -
Acquisition of property, plant and equipment 6(27) ( 6,098 ) ( 14,332 )
Proceeds from disposal of property, plant and
equipment
6(6)
- 476
Decrease in refundable deposits ( 20 ) ( 1,330 )
Acquisition of intangible assets ( 1,468 ) ( 2,188 )
Increase in other non-current assets ( 11,866 ) ( 1,126 )
Increase in financial assets at amortised cost -
current ( 325,122 ) -
Decrease in other financial assets - current - 95,209
Net cash flows from investing activities 1,090,861 538,324
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term borrowings 62,798,107 42,460,634
Repayments of short-term borrowings ( 62,905,317 ) ( 43,271,143 )
Proceeds from long-term borrowings 45,374,453 18,775,000
Repayments of long-term borrowings ( 42,040,992 ) ( 17,640,477 )
Increase (decrease) in guarantee deposit 1,600 ( 2,627 )
Increase (decrease) in other financial liabilities -
current
7
6,000 ( 15,000 )
(Decrease) increase in other financial liabilities -
non-current
7
( 1,368,723 ) 546,306
Payment of cash dividends 6(16) ( 546,530 ) ( 478,214 )
Acquisition of treasury stock 6(27) ( 750,079 ) -
Net cash flows from financing activities 568,519 374,479
Effect of changes in exchange rates ( 16,771 ) ( 46,458 )
Net (decrease) increase in cash and cash equivalents ( 241,329 ) 1,984,734
Cash and cash equivalents at beginning of year 5,016,809 3,032,075
Cash and cash equivalents at end of year $ 4,775,480 $ 5,016,809
-343-
CLEVO CO.
NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2018 AND 2017
(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)
1. HISTORY AND ORGANISATION
Clevo Co. (the “Company”) was incorporated as a company limited by shares under the provisions of
the Company Act of the Republic of China (R.O.C.). The Company is primarily engaged in the design,
manufacture and sales of VDUs, computers and peripheral devices.
2. THE DATE OF AUTHORISATION FOR ISSUANCE OF THE FINANCIAL STATEMENTS AND
PROCEDURES FOR AUTHORISATION
These parent company only financial statements were authorised for issuance by the Board of Directors
on March 27, 2019.
3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS
(1)Effect of the adoption of new issuances of or amendments to International Financial Reporting
Standards (“IFRS”) as endorsed by the Financial Supervisory Commission (“FSC”)
New standards, interpretations and amendments endorsed by FSC effective from 2018 are as follows:
Except for the following, the above standards and interpretations have no significant impact to the
Company’s financial condition and financial performance based on the Company’s assessment.
A. IFRS 9, ‘Financial instruments’
New Standards, Interpretations and Amendments
Effective date by
International
Accounting
Standards Board
Amendments to IFRS 2, ‘Classification and measurement of share-based
payment transactions’
January 1, 2018
Amendments to IFRS 4, ‘Applying IFRS 9, Financial instruments with IFRS 4,
Insurance contracts’
January 1, 2018
IFRS 9, ‘Financial instruments’ January 1, 2018
IFRS 15, ‘Revenue from contracts with customers’ January 1, 2018
Amendments to IFRS 15, ‘Clarifications to IFRS 15, Revenue from contracts
with customers’
January 1, 2018
Amendments to IAS 7, ‘Disclosure initiative’ January 1, 2017
Amendments to IAS 12, ‘Recognition of deferred tax assets for unrealised losses January 1, 2017
Amendments to IAS 40, ‘Transfers of investment property’ January 1, 2018
IFRIC 22, ‘Foreign currency transactions and advance consideration’ January 1, 2018
Annual improvements to IFRSs 2014-2016 cycle - Amendments to IFRS 1,
‘First-time adoption of International Financial Reporting Standards’
January 1, 2018
Annual improvements to IFRSs 2014-2016 cycle - Amendments to IFRS 12,
‘Disclosure of interests in other entities’
January 1, 2017
Annual improvements to IFRSs 2014-2016 cycle - Amendments to IAS 28,
‘Investments in associates and joint ventures’
January 1, 2018
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(a) Classification of debt instruments is driven by the entity’s business model and the contractual
cash flow characteristics of the financial assets, which would be classified as financial asset at
fair value through profit or loss, financial asset measured at fair value through other
comprehensive income or financial asset at amortised cost. Equity instruments would be
classified as financial asset at fair value through profit or loss, unless an entity makes an
irrevocable election at inception to present subsequent changes in the fair value of an
investment in an equity instrument that is not held for trading in other comprehensive income.
(b) The impairment losses of debt instruments are assessed using an ‘expected credit loss’
approach. An entity assesses at each balance sheet date whether there has been a significant
increase in credit risk on that instrument since initial recognition to recognise 12-month
expected credit losses or lifetime expected credit losses (interest revenue would be calculated
on the gross carrying amount of the asset before impairment losses occurred); or if the
instrument has objective evidence of impairment, interest revenue after the impairment would
be calculated on the book value of net carrying amount (i.e. net of credit allowance). The
Company shall always measure the loss allowance at an amount equal to lifetime expected
credit losses for trade receivables that do not contain a significant financing component.
(c) The Company has elected not to restate prior period financial statements using the modified
retrospective approach under IFRS 9. For details of the significant effect as at January 1, 2018,
please refer to Notes 12(4)B and C.
B. IFRS 15, ‘Revenue from contracts with customers’
(a) IFRS 15, ‘Revenue from contracts with customers’ replaces IAS 11, ‘Construction contracts’,
IAS 18, ‘Revenue’ and relevant interpretations. According to IFRS 15, revenue is recognised
when a customer obtains control of promised goods or services. A customer obtains control of
goods or services when a customer has the ability to direct the use of, and obtain substantially
all of the remaining benefits from, the asset.
The core principle of IFRS 15 is that an entity recognises revenue to depict the transfer of
promised goods or services to customers in an amount that reflects the consideration to which
the entity expects to be entitled in exchange for those goods or services. An entity recognises
revenue in accordance with that core principle by applying the following steps:
Step 1: Identify contracts with customer.
Step 2: Identify separate performance obligations in the contract(s).
Step 3: Determine the transaction price.
Step 4: Allocate the transaction price.
Step 5: Recognise revenue when the performance obligation is satisfied.
Further, IFRS 15 includes a set of comprehensive disclosure requirements that requires an
entity to disclose sufficient information to enable users of financial statements to understand
the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts
with customers.
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(b) The Company has elected not to restate prior period financial statements and recognised the
cumulative effect of initial application as retained earnings at January 1, 2018, using the
modified retrospective approach under IFRS 15. The significant effects of adopting the
modified transition as of January 1, 2018 are summarised below:
In line with IFRS 15 requirements, the Company changed the presentation of certain accounts
in the balance sheet. Under IFRS 15, liabilities in relation to computer products contracts are
recognised as contract liabilities, but were previously presented as advance sales receipts
(shown as ‘other current liabilities’) in the balance sheet. As of January 1, 2018, the balance
amounted to $566,645.
C. Amendments to IAS 7, ‘Disclosure initiative’
This amendment requires that an entity shall provide more disclosures related to changes in
liabilities arising from financing activities, including both changes arising from cash flows and
non-cash changes.
The Company expects to provide additional disclosure to explain the changes in liabilities arising
from financing activities.
(2)Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by
the Company
New standards, interpretations and amendments endorsed by the FSC effective from 2018 are as
follows:
The above standards and interpretations have no significant impact to the Company’s financial
condition and financial performance based on the Company’s assessment.
New Standards, Interpretations and Amendments
Effective date by
International Accounting
Standards Board
Amendments to IFRS 9, ‘Prepayment features with negative
compensation’
January 1, 2019
IFRS 16, ‘Leases’ January 1, 2019
Amendments to IAS 19, ‘Plan amendment, curtailment or settlement’ January 1, 2019
Amendments to IAS 28, ‘Long-term interests in associates and joint
ventures’
January 1, 2019
IFRIC 23, ‘Uncertainty over income tax treatments’ January 1, 2019
Annual improvements to IFRSs 2015-2017 cycle January 1, 2019
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(3)IFRSs issued by IASB but not yet endorsed by the FSC
New standards, interpretations and amendments issued by IASB but not yet included in the IFRSs as
endorsed by the FSC are as follows:
The above standards and interpretations have no significant impact to the Company’s financial
condition and financial performance.
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies applied in the preparation of these financial statements are set out
below. These policies have been consistently applied to all the periods presented, unless otherwise stated.
(1)Compliance statement
The financial statements of the Company have been prepared in accordance with the “Regulations
Governing the Preparation of Financial Reports by Securities Issuers”.
(2)Basis of preparation
A. Except for the following items, the financial statements have been prepared under the historical
cost convention:
(a) Financial assets and financial liabilities (including derivative instruments) at fair value through
profit or loss.
(b) Financial assets and liabilities at fair value through other comprehensive income/Available-
for-sale financial assets measured at fair value.
(c) Investment property measured at fair value.
(d) Defined benefit liabilities recognised based on the net amount of pension fund assets less
present value of defined benefit obligation.
B. The preparation of financial statements in conformity with International Financial Reporting
Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as
endorsed by the FSC (collectively referred herein as the “IFRSs”) requires the use of certain
critical accounting estimates. It also requires management to exercise its judgement in the process
of applying the Company’s accounting policies. The areas involving a higher degree of judgement
or complexity, or areas where assumptions and estimates are significant to the financial statements
are disclosed in Note 5.
New Standards, Interpretations and Amendments
Effective date by
International Accounting
Standards Board
Amendments to IAS 1 and IAS 8, ‘Disclosure Initiative-Definition of
Material’
January 1, 2020
Amendments to IFRS 3, ‘Definition of a business’ January 1, 2020
Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets
between an investor and its associate or joint venture’
To be determined by
International Accounting
Standards Board
IFRS 17, ‘Insurance contracts’ January 1, 2021
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C. In adopting IFRS 9 and IFRS 15 effective January 1, 2018, the Company has elected to apply
modified retrospective approach whereby the cumulative impact of the adoption was recognised
as retained earnings or other equity as of January 1, 2018 and the financial statements for the year
ended December 31, 2017 were not restated. The financial statements for the year ended December
31, 2017 were prepared in compliance with International Accounting Standard 39 (‘IAS 39’),
International Accounting Standard 18 (‘IAS 18’) and related financial reporting interpretations.
Please refer to Notes 12(4) and (5) for details of significant accounting policies and details of
significant accounts.
(3)Foreign currency translation
Items included in the financial statements of each of the Company’s entities are measured using the
currency of the primary economic environment in which the entity operates (the “functional
currency”). The financial statements are presented in “New Taiwan Dollars”, which is the Company’s
functional currency and the Company’s presentation currency.
A. Foreign currency transactions and balances
(a) Foreign currency transactions are translated into the functional currency using the exchange
rates prevailing at the dates of the transactions or valuation where items are remeasured.
Foreign exchange gains and losses resulting from the settlement of such transactions are
recognised in profit or loss in the period in which they arise.
(b) Monetary assets and liabilities denominated in foreign currencies at the period end are re-
translated at the exchange rates prevailing at the balance sheet date. Exchange differences
arising upon re-translation at the balance sheet date are recognised in profit or loss.
(c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value
through profit or loss are re-translated at the exchange rates prevailing at the balance sheet
date; their translation differences are recognised in profit or loss. Non-monetary assets and
liabilities denominated in foreign currencies held at fair value through other comprehensive
income are re-translated at the exchange rates prevailing at the balance sheet date; their
translation differences are recognised in other comprehensive income. However, non-
monetary assets and liabilities denominated in foreign currencies that are not measured at fair
value are translated using the historical exchange rates at the dates of the initial transactions.
(d) All other foreign exchange gains and losses based on the nature of those transactions are
presented in the statement of comprehensive income within ‘other gains and losses’.
B. Translation of foreign operations
(a) The operating results and financial position of all the Company entities, associates and joint
arrangements that have a functional currency different from the presentation currency are
translated into the presentation currency as follows:
i. Assets and liabilities for each balance sheet presented are translated at the closing exchange
rate at the date of that balance sheet;
ii. Income and expenses for each statement of comprehensive income are translated at average
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exchange rates of that period; and
iii. All resulting exchange differences are recognised in other comprehensive income.
(b) When the foreign operation partially disposed of or sold is an associate or joint arrangement,
exchange differences that were recorded in other comprehensive income are proportionately
reclassified to profit or loss as part of the gain or loss on sale. In addition, even when the
Company retains partial interest in the former foreign associate or joint arrangement after
losing significant influence over the former foreign associate, or losing joint control of the
former joint arrangement, such transactions should be accounted for as disposal of all interest
in these foreign operations.
(c) When the foreign operation partially disposed of or sold is a subsidiary, cumulative exchange
differences that were recorded in other comprehensive income are proportionately transferred
to the non-controlling interest in this foreign operation. In addition, even when the Company
retains partial interest in the former foreign subsidiary after losing control of the former foreign
subsidiary, such transactions should be accounted for as disposal of all interest in the foreign
operation.
(4)Classification of current and non-current items
A. Assets that meet one of the following criteria are classified as current assets; otherwise they are
classified as non-current assets:
(a) Assets arising from operating activities that are expected to be realised, or are intended to be
sold or consumed within the normal operating cycle;
(b) Assets held mainly for trading purposes;
(c) Assets that are expected to be realised within twelve months from the balance sheet date;
(d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to
be exchanged or used to settle liabilities more than twelve months after the balance sheet date.
B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they
are classified as non-current liabilities:
(a) Liabilities that are expected to be settled within the normal operating cycle;
(b) Liabilities arising mainly from trading activities;
(c) Liabilities that are to be settled within twelve months from the balance sheet date;
(d) Liabilities for which the repayment date cannot be extended unconditionally to more than
twelve months after the balance sheet date. 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.
(5)Cash equivalents
Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known
amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits that
meet the definition above and are held for the purpose of meeting short-term cash commitments in
operations are classified as cash equivalents.
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(6)Financial assets at fair value through profit or loss
Effective 2018
A. Financial assets at fair value through profit or loss are financial assets that are not measured at
amortised cost or fair value through other comprehensive income.
B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are
recognised and derecognised using trade date accounting.
C. At initial recognition, the Company measures the financial assets at fair value and recognises the
transaction costs in profit or loss. The Company subsequently measures the financial assets at fair
value, and recognises the gain or loss in profit or loss.
D. The Company recognises the dividend income when the right to receive payment is established,
future economic benefits associated with the dividend will flow to the Company and the amount
of the dividend can be measured reliably.
(7)Financial assets at amortised cost
A. Financial assets at amortised cost are those that meet all of the following criteria:
(a) The objective of the Company’s business model is achieved by collecting contractual cash
flows.
(b) The assets’ contractual cash flows represent solely payments of principal and interest.
B. On a regular way purchase or sale basis, financial assets at amortised cost are recognised and
derecognised using trade date accounting.
C. At initial recognition, the Company measures the financial assets at fair value plus transaction
costs. Interest income from these financial assets is included in finance income using the effective
interest method. A gain or loss is recognised in profit or loss when the asset is derecognised or
impaired.
D. The Company’s time deposits which do not fall under cash equivalents are those with a short
maturity period and are measured at initial investment amount as the effect of discounting is
immaterial.
(8)Accounts and notes receivable
A. Accounts and notes receivable entitle the Company a legal right to receive consideration in
exchange for transferred goods or rendered services.
B. The short-term accounts and notes receivable without bearing interest are subsequently measured
at initial invoice amount as the effect of discounting is immaterial.
(9)Impairment of financial assets
For debt instruments measured at fair value through other comprehensive income and financial assets
at amortised cost including accounts receivable or contract assets that have a significant financing
component, at each reporting date, the Company recognises the impairment provision for 12 months
expected credit losses if there has not been a significant increase in credit risk since initial recognition
or recognises the impairment provision for the lifetime expected credit losses (ECLs) if such credit
risk has increased since initial recognition after taking into consideration all reasonable and verifiable
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information that includes forecasts. On the other hand, for accounts receivable or contract assets that
do not contain a significant financing component, the Company recognises the impairment provision
for lifetime ECLs.
(10)Derecognition of financial assets
The Company derecognises a financial asset when one of the following conditions is met:
A. The contractual rights to receive the cash flows from the financial asset expire.
B. The contractual rights to receive cash flows of the financial asset have been transferred and the
Company has transferred substantially all risks and rewards of ownership of the financial asset.
C. The contractual rights to receive cash flows of the financial asset have been transferred; however,
the Company has not retained control of the financial asset.
(11)Operating leases (lessor)
Lease income from an operating lease (net of any incentives given to the lessee) is recognised in
profit or loss on a straight-line basis over the lease term.
(12)Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined using the
weighted-average method. The cost of finished goods and work in progress comprises raw materials,
direct labour, other direct costs and related production overheads (allocated based on normal
operating capacity). It excludes borrowing costs. The item by item approach is used in applying the
lower of cost and net realisable value. Net realisable value is the estimated selling price in the
ordinary course of business, less the estimated cost of completion and applicable variable selling
expenses.
(13)Investments accounted for using equity method / subsidiaries
A. Subsidiaries refer to the entities (including special purpose entities) that the Company has control
over their financial and operating policies and own more than 50% of voting shares directly or
indirectly. The Company evaluates investments in subsidiaries accounted under equity method
in these parent company only financial statements.
B. Unrealised profit (loss) occurred from the transactions between the Company and subsidiaries
have been offset. The accounting policies of the subsidiaries have been adjusted to comply with
the Company’s accounting policies.
C. The Company’s share of its subsidiaries’ post-acquisition profits or losses is recognised in profit
or loss, and its share of post-acquisition movements in other comprehensive income is
recognised in other comprehensive income. When the Company’s share of losses in a subsidiary
equals or exceeds its interest in the subsidiary, the Company continues to recognise losses
proportionate to its ownership.
D. Pursuant to the “Regulations Governing the Preparation of Financial Reports by Securities
Issuers,” profit (loss) of the current period and other comprehensive income in the parent
company only financial statements shall equal to the amount attributable to owners of the parent
in the consolidated financial statements. Owners’ equity in the parent company only financial
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statements shall equal to equity attributable to owners of the parent in the consolidated financial
statements.
(14)Property, plant and equipment
A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the
construction period are capitalised.
B. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will
flow to the Company and the cost of the item can be measured reliably. The carrying amount of
the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss
during the financial period in which they are incurred.
C. Land is not depreciated. Other property, plant and equipment apply cost model and are
depreciated using the straight-line method to allocate their cost over their estimated useful lives.
Each part of an item of property, plant, and equipment with a cost that is significant in relation
to the total cost of the item must be depreciated separately.
D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if
appropriate, at each financial year-end. If expectations for the assets’ residual values and useful
lives differ from previous estimates or the patterns of consumption of the assets’ future economic
benefits embodied in the assets have changed significantly, any change is accounted for as a
change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and
Errors’, from the date of the change. The estimated useful lives of property, plant and equipment
are as follows:
Buildings and structures 2 ~ 50 years
Machinery and equipment 3 ~ 5 years
Computer and communication Equipment 2 ~ 5 years
Transportation equipment 1 ~ 5 years
Other equipment 3 ~ 5 years
(15)Investment property
An investment property is stated initially at its cost and measured subsequently using the fair value
model. A gain or loss arising from a change in the fair value of investment property is recognised in
profit or loss.
(16)Intangible assets
A. Computer software
Computer software is stated at cost and amortised on a straight-line basis over its estimated useful
life of 3 to 6 years.
(17)Impairment of non-financial assets
The Company assesses at each balance sheet date the recoverable amounts of those assets where
there is an indication that they are impaired. An impairment loss is recognised for the amount by
which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the
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higher of an asset’s fair value less costs to sell or value in use. When the circumstances or reasons
for recognizing impairment loss for an asset in prior years no longer exist or diminish, the
impairment loss is reversed. The increased carrying amount due to reversal should not be more than
what the depreciated or amortised historical cost would have been if the impairment had not been
recognised.
(18)Borrowings
A. Borrowings comprise long-term and short-term bank borrowings and other long-term and short-
term loans. Borrowings are recognised initially at fair value, net of transaction costs incurred.
Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net
of transaction costs) and the redemption value is recognised in profit or loss over the period of
the borrowings using the effective interest method.
B. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to
the extent that it is probable that some or all of the facility will be drawn down. In this case, the
fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable
that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for
liquidity services and amortised over the period of the facility to which it relates.
(19)Notes and accounts payable
A. Accounts payable are liabilities for purchases of raw materials, goods or services and notes
payable are those resulting from operating and non-operating activities.
B. The short-term notes and accounts payable without bearing interest are subsequently measured
at initial invoice amount as the effect of discounting is immaterial.
(20)Financial liabilities at fair value through profit or loss
A. Financial liabilities are classified in this category of held for trading if acquired principally for
the purpose of repurchasing in the short-term. Derivatives are also categorised as financial
liabilities held for trading unless they are designated as hedges.
B. At initial recognition, the Company measures the financial liabilities at fair value. All related
transaction costs are recognised in profit or loss. The Company subsequently measures these
financial liabilities at fair value with any gain or loss recognised in profit or loss.
(21)Bonds payable
Ordinary corporate bonds issued by the Company are initially recognised at fair value less
transaction costs. Any difference between the proceeds (net of transaction costs) and the redemption
value is presented as an addition to or deduction from bonds payable, which is amortised to profit
or loss over the period of bond circulation using the effective interest method as an adjustment to
‘finance costs’.
(22)Derecognition of financial liabilities
A financial liability is derecognised when the obligation specified in the contract is either discharged
or cancelled or expires.
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(23)Offsetting financial instruments
Financial assets and liabilities are offset and reported in the net amount in the balance sheet when
there is a legally enforceable right to offset the recognised amounts and there is an intention to settle
on a net basis or realise the asset and settle the liability simultaneously.
(24) Financial guarantee contracts
A financial guarantee contract is a contract that requires the Group to make specified payments to
reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due
in accordance with the original or modified terms of a debt instrument. At initial recognition, the
Group measures financial guarantee contracts at fair value and subsequently at the higher of the
amount of provisions determined by the expected credit losses and the cumulative gains that were
previously recognised.
(25)Non-hedging derivatives
Non-hedging derivatives are initially recognised at fair value on the date a derivative contract is
entered into and recorded as financial assets or financial liabilities at fair value through profit or loss.
They are subsequently remeasured at fair value and the gains or losses are recognised in profit or
loss.
(26)Provisions
Warranties provisions are recognised when the Company has a present legal or constructive
obligation as a result of past events, and it is probable that an outflow of economic resources will be
required to settle the obligation and the amount of the obligation can be reliably estimated.
(27)Employee benefits
A. Short-term employee benefits
Short-term employee benefits are measured at the undiscounted amount of the benefits expected
to be paid in respect of service rendered by employees in a period and should be recognised as
expense in that period when the employees render service.
B. Pensions
(a) Defined contribution plan
For defined contribution plan, the contributions are recognised as pension expense when they
are due on an accrual basis. Prepaid contributions are recognised as an asset to the extent of
a cash refund or a reduction in the future payments.
(b) Defined benefit plan
i. Net obligation under a defined benefit plan is defined as the present value of an amount of
pension benefits that employees will receive on retirement for their services with the
Company in current period or prior periods. The liability recognised in the balance sheet in
respect of defined benefit pension plans is the present value of the defined benefit
obligation at the balance sheet date less the fair value of plan assets. The net defined benefit
obligation is calculated annually by independent actuaries using the projected unit credit
method. The rate used to discount is determined by using interest rates of high-quality
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corporate bonds that are denominated in the currency in which the benefits will be paid,
and that have terms to maturity approximating to the terms of the related pension liability;
when there is no deep market in high-quality corporate bonds, the Company uses interest
rates of government bonds (at the balance sheet date) instead.
ii. Remeasurements arising on defined benefit plan are recognised in other comprehensive
income in the period in which they arise and are recorded as retained earnings.
C. Employees’ compensation and directors’ and supervisors’ remuneration
Employees’ compensation and directors’ and supervisors’ remuneration are recognised as
expense and liability, provided that such recognition is required under legal or constructive
obligation and those amounts can be reliably estimated. Any difference between the resolved
amounts and the subsequently actual distributed amounts is accounted for as changes in estimates.
If employee compensation is paid by shares, the Company calculates the number of shares based
on the closing price at the previous day of the board meeting resolution.
(28)Income tax
A. The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or
loss, except to the extent that it relates to items recognised in other comprehensive income or
items recognised directly in equity, in which cases the tax is recognised in other comprehensive
income or equity.
B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively
enacted at the balance sheet date in the countries where the Company and its subsidiaries operate
and generate taxable income. Management periodically evaluates positions taken in tax returns
with respect to situations in accordance with applicable tax regulations. It establishes provisions
where appropriate based on the amounts expected to be paid to the tax authorities. An additional
tax is levied on the unappropriated retained earnings and is recorded as income tax expense in
the year the stockholders resolve to retain the earnings.
C. Deferred tax is recognised, using the balance sheet liability method, on temporary differences
arising between the tax bases of assets and liabilities and their carrying amounts in the
consolidated balance sheet. However, the deferred tax is not accounted for if it arises from initial
recognition of goodwill or of an asset or liability in a transaction other than a business
combination that at the time of the transaction affects neither accounting nor taxable profit or
loss. Deferred tax is provided on temporary differences arising on investments in subsidiaries
and associates, except where the timing of the reversal of the temporary difference is controlled
by the Company and it is probable that the temporary difference will not reverse in the
foreseeable future. Deferred tax is determined using tax rates (and laws) that have been enacted
or substantially enacted by the balance sheet date and are expected to apply when the related
deferred tax asset is realised or the deferred tax liability is settled.
D. Deferred tax assets are recognised only to the extent that it is probable that future taxable profit
will be available against which the temporary differences can be utilised. At each balance sheet
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date, unrecognised and recognised deferred tax assets are reassessed.
E. Current income tax assets and liabilities are offset and the net amount reported in the balance
sheet when there is a legally enforceable right to offset the recognised amounts and there is an
intention to settle on a net basis or realise the asset and settle the liability simultaneously.
Deferred tax assets and liabilities are offset on the balance sheet when the entity has the legally
enforceable right to offset current tax assets against current tax liabilities and they are levied by
the same taxation authority on either the same entity or different entities that intend to settle on
a net basis or realise the asset and settle the liability simultaneously.
F. A deferred tax asset shall be recognised for the carryforward of unused tax credits resulting from
acquisitions of equipment or technology, research and development expenditures and equity
investments to the extent that it is possible that future taxable profit will be available against
which the unused tax credits can be utilised.
(29)Share capital
A. Ordinary shares are classified as equity.
B. Where the Company repurchases the Company’s equity share capital that has been issued, the
consideration paid, including any directly attributable incremental costs (net of income taxes) is
deducted from equity attributable to the Company’s equity holders. Where such shares are
subsequently reissued, the difference between their book value and any consideration received,
net of any directly attributable incremental transaction costs and the related income tax effects,
is included in equity attributable to the Company’s equity holders.
(30)Dividends
Dividends are recorded in the Company’s financial statements in the period in which they are
resolved by the Company’s shareholders. Cash dividends are recorded as liabilities; stock dividends
are recorded as stock dividends to be distributed and are reclassified to ordinary shares on the
effective date of new shares issuance.
(31)Revenue recognition
A. Sales of goods
(a) The Company designs, manufactures and sells a range of video display devices, computers
and peripheral products. Sales are recognised when control of the products has transferred,
being when the products are delivered to the customer, the customer has full discretion over
the channel and price to sell the products, and there is no unfulfilled obligation that could
affect the customer’s acceptance of the products. Delivery occurs when the products have
been shipped to the specific location, the risks of obsolescence and loss have been transferred
to the customer, and either the customer has accepted the products in accordance with the
sales contract, or the Company has objective evidence that all criteria for acceptance have
been satisfied.
(b) The Company’s obligation to provide a refund for faulty products under the standard warranty
terms is recognised as a provision.
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(c) A receivable is recognised when the goods are delivered as this is the point in time that the
consideration is unconditional because only the passage of time is required before the
payment is due.
B. Booth rental revenue
The Company held investment properties to earn rentals, and lease revenue is recognised on a
straight-line basis over the lease term.
C. Incremental costs of obtaining a contract
Given that the contractual period lasts less than one year, the Company recognises the
incremental costs of obtaining a contract as an expense when incurred although the Company
expects to recover those costs.
5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF
ASSUMPTION UNCERTAINTY
The preparation of these financial statements requires management to make critical judgements in
applying the Company’s accounting policies and make critical assumptions and estimates concerning
future events. Assumptions and estimates may differ from the actual results and are continually evaluated
and adjusted based on historical experience and other factors. Such assumptions and estimates have a
significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within
the next financial year; and the related information is addressed below:
(1)Critical judgements in applying the Company’s accounting policies
None.
(2)Critical accounting estimates and assumptions
A. Evaluation of inventories
As inventories are stated at the lower of cost and net realisable value, the Company must determine
the net realisable value of inventories on balance sheet date using judgements and estimates. Due
to the rapid technology innovation, the Company evaluates the amounts of normal inventory
consumption, obsolete inventories or inventories without market selling value on balance sheet
date, and writes down the cost of inventories to the net realisable value. Such an evaluation of
inventories is principally based on the demand for the products within the specified period in the
future. Therefore, there might be material changes to the evaluation.
B. Investment property measured at fair value
The Company assesses the fair value of investment property based on the professional judgement
of appraiser, and determines the future cash flows of the investment property, discount rate and
the future possible income and expenses arising from the assets depending on how assets are
utilised and industrial characteristics. Any changes of economic circumstances or estimates due to
the change of strategy might cause material effect in amount of investment property measured at
fair value.
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6. DETAILS OF SIGNIFICANT ACCOUNTS
(1)Cash and cash equivalents
A. The Company transacts with a variety of financial institutions all with high credit quality to
disperse credit risk, so it expects that the probability of counterparty default is remote.
B. Cash and cash equivalents amounting to $3,409,922 and $3,084,800 were pledged to others as
collateral, and were classified as other financial assets at amortised cost and other financial assets
as of December 31, 2018 and 2017, respectively.
(2)Financial assets at fair value through profit or loss
A. Amounts recognised in profit or loss in relation to financial assets at fair value through profit or
loss are listed below:
B. The Company has no financial assets at fair value through profit or loss pledged to others.
C. Information relating to credit risk of financial assets at fair value through profit or loss is provided
in Note 12(2).
D. Information on financial assets at fair value through profit or loss as of December 31, 2017 is
provided in Note 12(4).
(3)Accounts receivable
December 31, 2018 December 31, 2017
Cash on hand and revolving funds 166$ 133$
Checking accounts and demand deposits 1,828,210 4,719,536
Time deposits 2,947,104 297,140
4,775,480$ 5,016,809$
December 31, 2018
Current items:
Financial assets mandatorily measured at fair value through profit or loss
Listed stocks 724,815$
Beneficiary certificates 68,886)(
655,929$
2018
Financial assets mandatorily measured at fair value through profit or loss
Listed stocks 138,237)($
December 31, 2018 December 31, 2017
Accounts receivable 1,433,195$ 1,757,104$
Accounts receivable - related parties 818,974 536,019
Less: Allowance for uncollectible accounts ( 14,287) ( 64,546)
$ 2,237,882 $ 2,228,577
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A. The ageing analysis of accounts receivable and notes receivable that were past due but not impaired
is as follows:
The above ageing analysis was based on past due date.
B. The Company has no accounts receivable pledged to others.
C. As at December 31, 2018 and 2017, without taking into account any collateral held or other credit
enhancements, the maximum exposure to credit risk in respect of the amount that best represents
the Company’s accounts receivable were $2,237,882 and $2,228,577, respectively.
D. The Company has taken out credit insurance on accounts receivable from some of the main clients.
The Company will get compensation based on the proportion of the agreements.
E. Information relating to credit risk of accounts receivable is provided in Note 12(4).
(4)Inventories
The cost of inventories recognised as expense for the years ended December 31, 2018 and 2017 was
$13,551,524 and $13,052,004, respectively, including the amount of $412 that the Company wrote
down from cost to net realisable value accounted for as cost of goods sold in 2018. The Company
reversed a previous inventory write-down which was accounted for as reduction of cost of goods sold
due to the sales of inventories in 2017.
Accounts receivable Accounts receivable
Not past due 1,837,907$ 1,873,095$
Up to 30 days 370,538 345,762
31 to 90 days 31,062 10,174
91 to 180 days 39 -
Over 180 days 12,623 64,092
2,252,169$ 2,293,123$
December 31, 2018 December 31, 2017
Cost
Allowance for
valuation loss Book value
Raw materials 304,318$ (10,675)$ 293,643$
Finished goods 618 618)( -
304,936$ 11,293)($ 293,643$
December 31, 2018
Cost
Allowance for
valuation loss Book value
Raw materials 441,974$ (11,010)$ 430,964$
Finished goods 695 695)( -
442,669$ 11,705)($ 430,964$
December 31, 2017
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(5)Investments accounted for using equity method and Prepayments for investments
A. Investments accounted for using equity method
The related information on subsidiaries is provided in Note 4(3) of consolidated financial
statements in 2018.
B. Prepayments for investments
December 31, 2018 December 31, 2017
Kapok Computer Co., Ltd. 53,576$ 50,650$
Clevo Investment Co., Ltd. 67,982 68,390
Clevo (Cayman Islands) Holding Company 40,033,064 38,759,238
Kapok Computer (Samoa) Corporation 1,047,215 1,260,126
Clevo Computer Singapore Pte. Ltd. 7,635,730 7,762,822
Buynow On-line Holding Corporation 5,929)( 1,662)(
Lunaria Investment GK 1,694,435 1,558,188
50,526,073$ 49,457,752$
December 31, 2018 December 31, 2017
Clevo (Cayman Islands) Holding Company 4,425,325$ 5,860,760$
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(6)Property, plant and equipment
Land
Buildings and
structures Machinery
Computers and
communication
equipment
Transportation
equipment Others Total
At January 1, 2018
Cost 186,563$ 193,654$ 11,678$ 2,148$ 2,868$ 5,030$ 401,941$
Accumulated depreciation - 45,683)( 4,250)( 1,767)( 2,868)( 2,208)( 56,776)(
186,563$ 147,971$ 7,428$ 381$ -$ 2,822$ 345,165$
2018
Opening net book amount as at
January 1 186,563$ 147,971$ 7,428$ 381$ -$ 2,822$ 345,165$
Additions - 1,779 3,064 1,040 - 215 6,098
Disposals (cost) - 480)( 264)( 720)( - 324)( 1,788)(
Disposals (accumulated
depreciation) - 480 264 720 - 324 1,788
Reclassifications - - - - - 1,125 1,125
Depreciation charge - 8,153)( 2,212)( 383)( - 903)( 11,651)(
Closing net book amount as at
December 31 186,563$ 141,597$ 8,280$ 1,038$ -$ 3,259$ 340,737$
At December 31, 2018
Cost 186,563$ 194,953$ 14,478$ 2,468$ 2,868$ 6,046$ 407,376$
Accumulated depreciation - 53,356)( 6,198)( 1,430)( 2,868)( 2,787)( 66,639)(
186,563$ 141,597$ 8,280$ 1,038$ -$ 3,259$ 340,737$
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Land
Buildings and
structures Machinery
Computers and
communication
equipment
Transportation
equipment Others Total
At January 1, 2017
Cost 193,370$ 197,567$ 11,008$ 2,251$ 6,368$ 3,888$ 414,452$
Accumulated depreciation - 44,110)( 5,589)( 1,448)( 6,321)( 1,429)( 58,897)(
193,370$ 153,457$ 5,419$ 803$ 47$ 2,459$ 355,555$
2017
Opening net book amount as at
January 1193,370$ 153,457$ 5,419$ 803$ 47$ 2,459$ 355,555$
Additions - 3,958 3,662 - - 1,231 8,851
Disposals (cost) - 4,816)( 2,992)( 103)( 3,500)( 89)( 11,500)(
Disposals (accumulated
depreciation) - 4,816 2,992 103 3,500 89 11,500
Reclassifications 6,807)( 1,502)( - - - - 8,309)(
Depreciation charge - 7,942)( 1,653)( 422)( 47)( 868)( 10,932)(
Closing net book amount as at
December 31 186,563$ 147,971$ 7,428$ 381$ -$ 2,822$ 345,165$
At December 31, 2017
Cost 186,563$ 193,654$ 11,678$ 2,148$ 2,868$ 5,030$ 401,941$
Accumulated depreciation - 45,683)( 4,250)( 1,767)( 2,868)( 2,208)( 56,776)(
186,563$ 147,971$ 7,428$ 381$ -$ 2,822$ 345,165$
A. The property, plant and equipment did not have borrowing costs cpitalised.
B. The significant components of the Company’s buildings and structures, include main construction, steel structure and related equipment of underground mezzanine,
which are depreciated 50 years and 15 years, respectively.
C. Information about the property, plant and equipment that were pledged to others as collateral is provided in Note 8.
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(7)Investment property
A. Rental income from investment property and direct operating expenses arising from investment
property are shown below:
B. The measurement of investment property at fair value.
The fair value of the investment property held by the Company as at December 31, 2018 and 2017
was $1,567,905 and $1,568,993, respectively, which was valued by independent appraisers.
Valuations were made using the income approach which is categorised within Level 3 in the fair
value hierarchy. Key assumptions are as follows:
(a) Investment property is Taiwan-computer segment, the lease terms of investment property for
different segments are approximately 2 to 5 years. The comparison information between local
rent and similar objective property rent is provided in the ‘Summary of fair value disclosure
on investment property’ (referred herein as “the following table”).
(b) Movements of average occupancy rates in the prior year and earnings in prior years are
provided in the following table.
(c) The Company adopts the discounted cash flow analysis under income approach. The estimation
process of the appraisal method is subject to the determination of the annual rent growth rate
range using the comparison information between local rent and similar objective property rent,
and takes into consideration vacancy loss to estimate net rent income over the next ten years
as future cash inflow and discounted to the date of appraisal with the discount rate described
in (d). In addition, considering the ending balance of disposal value of the objective property
is calculated based on the operating revenue over the next year starting from the disposal date
to estimate remaining lives of the use right at the disposal date, which will be capitalised based
on the estimated discount rate and annul rent growth rate as well as discounted to the appraisal
date. The market value is calculated based on the ending disposal value plus the present value
of rent for each period.
Future cash outflow consists expenses directly and necessarily related to leasing such as
related fees, utilities and promotion costs; and operating expenses necessarily related to
2018 2017
At January 1 $ 1,568,993 1,531,698$
Reclassifications - 37,415
Net gains (loss) from fair value adjustment 7,912 120)(
At December 31 1,576,905$ 1,568,993$
Year ended
December 31, 2018
Year ended
December 31, 2017
Rental income from investment property 64,491$ 60,855$
Direct operating expenses arising from the
investment property that generated rental
income during the year 9,835$ 10,452$
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operations (i.e. repair expenses), taxes, insurance fees, and capital expenditures. The rates of
changes used in the estimation of future movements are in acccordance with the rent growth
rate used in the imputed rent income.
(d) The information on the range of discount rates is provided in the following table. The discount
rates are determined to take into consideration the interest rate of Chunghwa post's board
interest rate for two-year time deposit plus 3 point (current is 1.845%), as well as the
Company’s liquidity, risk, value-added and degree of difficulty of management.
(e) The appraisal reports adopted by the Company is certified by the real estate appraiser, Charlie
Yang from Cushman & Wakefield Limited (referred herein as “Cushman & Wakefield”),
respectively. The appraisal dates are January 1, 2019 and 2018.
Summary of fair value disclosure on investment property:
C. The fair value information about the investment property is provided in Note 12(3).
D. Information about the investment property that was pledged to others as collateral is provided in
Note 8.
(8)Short-term borrowings
Year ended
December 31, 2018
Year ended
December 31, 2017
Comparison information between
local rent and similar objective
property rent
(dollar / square or square meter /
month)
$550~$650 $550~$650
Movements of earnings in the prior
year
$66,907 $70,251
Average occupancy rates 100% 100%
December 31, 2018 December 31, 2017
Discount rate 3.65% 3.65%
Type of borrowings December 31, 2018 Interest rate range Collateral
Bank borrowings
Bank unsecured borrowings 3,594,790$ 0.95%~1.25% Promised note
Type of borrowings December 31, 2017 Interest rate range Collateral
Bank borrowings
Bank unsecured borrowings 3,702,000$ 0.90%~1.19% Promised note
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(9)Bonds payable
On August 12, 2015, Clevo Co. issued $5,000,000 secured bonds, as approved by the regulatory
authority. For the year ended December 31, 2018, the outstanding bonds payable was $5,000,000.
The terms of the secured bonds are as follows:
December 31, 2018 December 31, 2017
Secured bonds payable 5,000,000$ 5,000,000$
Type
of Bonds Issuance date Period Amount Coupon rate Payment term Security
Secured
bonds
payable
2015/8/28 5 years $5,000,000 Not
exceeding
fixed rate of
1.5%
Principal is due
at maturity.
Interest is paid
annually at
simple interest
rate.
Authorise
Taiwan
Cooperative
Bank to execute
corporate bond
guarantee
according to the
guarantee
agreement
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(10)Long-term borrowings
Type of
borrowings
Borrowing period
and repayment term Interest rate range Collateral
December 31,
2018
Unsecured
borrowings
Borrowing period is from September
28, 2018 to March 16, 2023; interest is
payable monthly, principal is payable at
maturity date.
0.911%~1.4% Promissory
note
7,655,000$
Unsecured
borrowings
Borrowing period is from December 28,
2018 to December 28, 2023; interest is
payable monthly, principal is payable at
maturity date.
1.309%~1.797% Promissory
note
6,000,000
Secured
borrowings
Borrowing period is from March 20,
2018 to March 20, 2023; interest is
payable monthly, principal is payable at
maturity date.
1.33% Property,
plant and
equipment
and
investment
property
1,250,000
Secured
borrowings
Borrowing period is from July 27, 2016
to July 27, 2021; interest is payable
monthly, principal is payable at
maturity date.
1.60% Investment
property
1,300,000
Secured
borrowings
Borrowing period is from July 27, 2016
to July 27, 2021; interest is payable
monthly, principal is payable at
maturity date.
1.60% Investment
property
1,350,000
-
17,555,000
-
17,555,000$
Less: Current portion of long-term loans
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The Company’s liquidity risks are described in Note 12(3)3.
(11)Pensions
A. Defined benefit pension plan
(a) The Company have a defined benefit pension plan in accordance with the Labor Standards
Law, covering all regular employees’ service years prior to the enforcement of the Labor
Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue
to be subject to the pension mechanism under the Act. Under the defined benefit pension plan,
two units are accrued for each year of service for the first 15 years and one unit for each
additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on
the number of units accrued and the average monthly salaries and wages of the last 6 months
prior to retirement. The Company contributes monthly an amount equal to 2% of the
employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan,
the trustee, under the name of the independent retirement fund committee. Also, the Company
Type of
borrowings
Borrowing period
and repayment term Interest rate range Collateral
December 31,
2017
Unsecured
borrowings
Borrowing period is from July 22, 2015
to May 8, 2020; interest is payable
monthly, principal is payable at
maturity date.
1.15%~1.40% Promissory
note
4,650,000$
Unsecured
borrowings
Borrowing period is from June 30, 2014
to June 28, 2019; interest is payable
monthly, principal is payable at
maturity date.
1.36%~1.80% Promissory
note
4,660,000
Secured
borrowings
Borrowing period is from November
17, 2015 to November 12, 2018;
interest is payable monthly, principal is
payable at maturity date.
1.34% Property,
plant and
equipment
and
investment
property
1,010,000
Secured
borrowings
Borrowing period is from September
23, 2015 to March 9, 2021; interest is
payable monthly, principal is payable at
maturity date.
1.00%~1.60% Investment
property
2,201,539
Secured
borrowings
Borrowing period is from July 27, 2016
to July 27, 2021; interest is payable
monthly, principal is payable at
maturity date.
1.60% Investment
property
1,700,000
-
14,221,539
820,000)(
13,401,539$
Less: Current portion of long-term loans
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would assess the balance in the aforementioned labor pension reserve account by December
31, every year. If the account balance is insufficient to pay the pension calculated by the
aforementioned method to the employees expected to qualify for retirement in the following
year, the Company will make contributions for the deficit by next March.
(b) The amounts recognised in the balance sheet are as follows:
(c) Movements in net defined benefit liabilities are as follows:
December 31, 2018 December 31, 2017
Present value of defined benefit obligations 398,118$ 386,348$
Fair value of plan assets 313,572)( 298,507)(
Net defined benefit liability 84,546$ 87,841$
Present value of
defined benefit
obligations
Fair value of
plan
assets
Net defined
benefit liability
Year ended December 31, 2018
Balance at January 1 386,348$ 298,507)($ 87,841$
Current service cost 837 - 837
Interest expense (income) 5,370 4,150)( 1,220
392,555 302,657)( 89,898
Remeasurements:
Return on plan assets
(excluding amounts included in interest
income or expense)
Change in demographic assumptions 220 - 220
Change in financial assumptions 16,328 - 16,328
Experience adjustments 2,210)( 7,753)( 9,963)(
14,338 7,753)( 6,585
Pension fund contribution - 11,937)( 11,937)(
Paid pension 8,775)( 8,775 -
Balance at December 31 398,118$ 313,572)($ 84,546$
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(d) The Bank of Taiwan was commissioned to manage the Fund of the Company’s defined benefit
pension plan in accordance with the Fund’s annual investment and utilisation plan and the
“Regulations for Revenues, Expenditures, Safeguard and Utilisation of the Labor Retirement
Fund” (Article 6: The scope of utilisation for the Fund includes deposit in domestic or foreign
financial institutions, investment in domestic or foreign listed, over-the-counter, or private
placement equity securities, investment in domestic or foreign real estate securitization
products, etc.). With regard to the utilisation of the Fund, its minimum earnings in the annual
distributions on the final financial statements shall be no less than the earnings attainable
from the amounts accrued from two-year time deposits with the interest rates offered by local
banks. If the earnings is less than aforementioned rates, government shall make payment for
the deficit after being authorized by the Regulator. The Company has no right to participate
in managing and operating that fund and hence the Company is unable to disclose the
classification of plan assets fair value in accordance with IAS 19 paragraph 142. The
composition of fair value of plan assets as of December 31, 2018 and 2017 is given in the
Annual Labor Retirement Fund Utilisation Report announced by the government.
Present value of
defined benefit
obligations
Fair value of
plan
assets
Net defined
benefit liability
Year ended December 31, 2017
Balance at January 1 384,147$ 287,132)($ 97,015$
Current service cost 1,075 - 1,075
Interest expense (income) 5,762 4,307)( 1,455
390,984 291,439)( 99,545
Remeasurements:
Return on plan assets
(excluding amounts included in interest
income or expense)
Change in demographic assumptions 309)( - 309)(
Change in financial assumptions 6,051 - 6,051
Experience adjustments 2,120)( 1,324 796)(
3,622 1,324 4,946
Pension fund contribution - 16,650)( 16,650)(
Paid pension 8,258)( 8,258 -
Balance at December 31 386,348$ 298,507)($ 87,841$
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(e) The principal actuarial assumptions used were as follows:
Future mortality rate was estimated based on 90% of the 5th Taiwan Standard Ordinary
Experience Mortality Table in accordance with published statistics and experience in each
territory.
Because the main actuarial assumption changed, the present value of defined benefit
obligation is affected. The analysis was as follows:
The sensitivity analysis above is based on one assumption which changed while the other
conditions remain unchanged. In practice, more than one assumption may change all at once.
The method of analysing sensitivity and the method of calculating net pension liability in the
balance sheet are the same.
(f) Expected contributions to the defined benefit pension plan of the Company for the year ending
December 31, 2019 amount to $11,937.
(g) As of December 31, 2018, the weighted average duration of the retirement plan is 14 years.
The analysis of timing of the future pension payment was as follows:
B. Defined contribution plan
(a) Effective July 1, 2005, the Company has established a defined contribution pension plan (the
“New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with
R.O.C. nationality. Under the New Plan, the Company contributes monthly an amount based
on 6% of the employees’ monthly salaries and wages to the employees’ individual pension
accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump
sum upon termination of employment.
Year ended
December 31, 2018
Year ended
December 31, 2017
Discount rate 1.08% 1.39%
Future salary increases 2.50% 2.50%
Return rate on plan assets 1.08% 1.39%
Increase 0.5% Decrease 0.5% Increase 0.5% Decrease 0.5%
December 31, 2018
Effect on present value of
defined benefit obligation 25,931)($ 28,250$ 27,701$ 25,707)($
December 31, 2017
Effect on present value of
defined benefit obligation 26,501)($ 29,045$ 28,571$ 26,354)($
Discount rate Future salary increases
Within 2 years 227,933$
2-5 years 95,676
Over 5 years 44,456
368,065$
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(b) The pension costs under the defined contribution pension plan of the Company for the years
ended December 31, 2018 and 2017 were $35,687 and $33,609, respectively.
(12)Provisions
Analysis of total provisions:
The Company provides warranties on computer products sold. Provision for warranty is estimated
based on historical warranty data of computer products.
(13)Other non-current liabilities
(14)Share capital
A. As of December 31, 2018, the Company’s authorised capital was $7,500,000, consisting of 750
million shares of ordinary stock, and the paid-in capital was $6,797,630, consisting of 679,763
thousand shares with a par value of $10 (in dollars) per share. On June 15, 2012, the Board of
Directors resolved to increase the Company’s authorised capital in the Articles of Incorporation
to $9,000,000, consisting of 900 million shares of ordinary stock, with a par value of $10 (in
dollars) per share. The foregoing includes 20 million shares reserved for employee stock options
with a par value of $10 (in dollars) per share, which the Board of Directors are authorised to
issue depending on actual demand.
Movements in the number of the Company’s ordinary shares outstanding are as follows:
Warranty
At January 1, 2018 50,523$
Additional provisions 57,316
Used during the year 57,316)(
At December 31, 2018 50,523$
December 31, 2018 December 31, 2017
Current 50,523$ 52,523$
December 31, 2018 December 31, 2017
Other financial liabilities-non-current 120,049$ 1,488,772$
Accrued pension liability 84,546 87,841
204,595$ 1,576,613$
2018 2017
At January 1 683,163 683,163
Capital reduction by treasury stock
retired
( 3,400) -
At December 31 679,763 683,163
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B. Treasury shares
(a) Reason for share reacquisition and movements in the number of the Company’s treasury
shares are as follows:
(b) Pursuant to the R.O.C. Securities and Exchange Act, the number of shares bought back as
treasury share should not exceed 10% of the number of the Company’s issued and
outstanding shares and the amount bought back should not exceed the sum of retained
earnings, paid-in capital in excess of par value and realised capital surplus.
(c) Pursuant to the R.O.C. Securities and Exchange Act, treasury shares should not be pledged as
collateral and is not entitled to dividends before it is reissued.
(d) Pursuant to the R.O.C. Securities and Exchange Act, treasury shares should be reissued to the
employees within three years from the reacquisition date and shares not reissued within the
three-year period are to be retired. Treasury shares to enhance the Company’s credit rating
and the stockholders’ equity should be retired within six months of acquisition.
Name of company holding
the shares Reason for reacquisition
Number of
shares Carrying amount
The Company To be reissued to
employees
35,300 thousand $ 1,079,740
Subsidiary-Kapok
Computer
Long-term investment 16,966 thousand 95,305
Subsidiary-Clevo
Investment
Long-term investment 10,081 thousand 108,183
December 31, 2018
Name of company holding
the shares Reason for reacquisition
Number of
shares Carrying amount
The Company To be reissued to
employees
13,400 thousand $ 421,858
Subsidiary-Kapok
Computer
Long-term investment 16,966 thousand 95,305
Subsidiary-Clevo
Investment
Long-term investment 10,081 thousand 108,183
December 31, 2017
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(15)Capital surplus
Pursuant to the R.O.C. Company Act, capital surplus arising from paid-in capital in excess of par
value on issuance of common stocks and donations can be used to cover accumulated deficit or to
issue new stocks or cash to shareholders in proportion to their share ownership, provided that the
Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Act requires that
the amount of capital surplus to be capitalised mentioned above should not exceed 10% of the paid-
in capital each year. Capital surplus should not be used to cover accumulated deficit unless the legal
reserve is insufficient.
(16)Retained earnings
A. Under the Company’s Articles of Incorporation, the current year’s earnings, if any, shall first be
used to pay all taxes and offset prior years’ operating losses and then 10% of the remaining
amount shall be set aside as legal reserve. However, when the legal reserve amounts to the
authorized capital, this shall not apply. According to the law or the authority, the special surplus
reserve shall be set or reversed. If there is still surplus, the Board of Directors shall draft the
allocation resolved by the shareholders' meeting.
B. The Company belongs to high tech and electronics industry. As the Company operates in a
volatile business environment and is in the stable growth stage, the residual dividend policy is
adopted taking into consideration the Company’s financial structure, operating results and future
expansion plans, based on vision of industrial development, capital expenditure demand, sound
financial plan and protecting the rights and interests of investors. According to the dividend
policy, cash dividends shall account for at least 10% of the total dividends distributed.
C. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in
proportion to their share ownership, the legal reserve shall not be used for any other purpose.
The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their
share ownership is permitted, provided that the distribution of the reserve is limited to the portion
in excess of 25% of the Company’s paid-in capital.
D. Special reserve
(a) In accordance with the regulations, the Company shall set aside special reserve from the debit
balance on other equity items at the balance sheet date before distributing earnings. When
debit balance on other equity items is reversed subsequently, the reversed amount could be
included in the distributable earnings.
(b) The amounts previously set aside by the Company as special reserve on initial application of
IFRSs in accordance with Jin-Guan-Zheng-Fa-Zi Letter No. 1010012865, dated April 6, 2012,
shall be reversed proportionately when the relevant assets are used, disposed of or reclassified
subsequently.
(c) According to Jin-Guan-Zheng-Fa-Zi Letter No.1030006415, dated March 18, 2014,
investment properties are initially and subsequently measured using fair value model.
Changes of value due to appreciation as of December 31, 2013 are reflected in the increase
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of Appropriated Retained Earnings. The Company will recognise the reversal of earnings
upon subsequent disposal or decrease of the investment properties.
E. The appropriations of 2017 and 2016 earnings had been resolved at the stockholders’ meeting on
June 15, 2018 and June 15, 2017, respectively. Details are summarised below:
The Company appropriated cash from capital surplus as resolved at the stockholders’ meeting on
June 15, 2018. The dividends per share is NTD 0.8, and the total amount is $546,530.
The appropriations of 2017 and 2016 earnings above are the same with the amounts proposed by
the Board of Directors.
F. The resolution of the appropriations of 2018 net income was approved by the Board of Directors
during its meeting on March 27, 2019 as follows:
The Company appropriated cash from capital surplus as resolved at the Board of Directors’
meeting on March 27, 2019. The dividends per share is NTD 0.8, and the total amount is $513,810.
F. For the information relating to employees’ compensation (bonuses) and directors’ and supervisors’
remuneration, please refer to Note 6(23).
Amount
Dividends per share
(in dollars) Amount
Dividends per share
(in dollars)
Legal reserve 71,778$ 59,482$
Special reserve 1,008,166 201,696
Cash dividends - -$ 478,214 0.70$
1,079,944$ 739,392$
2017 2016
Amount
Dividends per share
(in dollars)
Legal reserve 145,490$
Special reserve 1,194,446
Cash dividends 128,453 0.20$
1,468,389$
2018
-374-
(17)Other equity items
(18)Operating revenue
Available-for-
sale investment
Currency
translation Revaluation Total
At January 1 97,879$ 2,138,991)($ 20,922$ 2,020,190)($
Effect of retrospective application
and retrospective restatement
97,879)( - - 97,879)(
Currency translation differences:
–The Company and subsidiaries - 602,614)( - 602,614)(
At December 31 -$ 2,741,605)($ 20,922$ 2,720,683)($
2018
Available-for-
sale investment
Currency
translation Revaluation Total
At January 1 157,857$ 916,916)($ -$ 759,059)($
Revaluation
–The Company 60,061)( - - 60,061)(
–Subsidiaries 83 - - 83
Currency translation differences:
–The Company and subsidiaries - 1,222,075)( - 1,222,075)(
Revaluation:
–The Company - - 20,922 20,922
At December 31 97,879$ 2,138,991)($ 20,922$ 2,020,190)($
2017
Year ended
December 31, 2018
Revenue from contracts with customers 14,560,392$
-375-
A. Disaggregation of revenue from contracts with customers
The Company derives revenue from the transfer of goods at a point in time in the following major
product lines and geographical regions:
B. Contract assets and liabilities
The Company has recognised the following revenue-related contract assets and liabilities:
C. Revenue recognised that was included in the contract liability balance at the beginning of the
year
D. Related disclosures on operating revenue for 2017 are provided in Note 12(5).
2018
China computer
products
Japan computer
products
Other computer
products Total
Total segment revenue 7,861,439$ 2,081,629$ 7,774,117$ 17,717,185$
Inter-segment revenue 3,156,793)( - - 3,156,793)(
Revenue from external
customer contracts 4,704,646$ 2,081,629$ 7,774,117$ 14,560,392$
Timing of revenue
recognition
At a point in time 4,704,646$ 2,081,629$ 7,774,117$ 14,560,392$
December 31, 2018
Contract liabilities:
Contract liabilities – Advance sales receipts 24,382$
Year ended
December 31, 2018
Revenue recognised that was included in the contract liability
balance at the beginning of the year
Advance real estate receipts 538,338$
-376-
(19)Other income
(20)Other gains and losses
(21)Finance costs
Year ended
December 31, 2018
Year ended
December 31, 2017
Rent income 64,491$ 60,855$
Interest income:
Interest income from bank deposits 101,050 61,402
Other interest income 31 3,167
Dividend income 30,702 42,836
Other income, others 151,602 177,117
347,876$ 345,377$
Year ended
December 31, 2018
Year ended
December 31, 2017
Losses on financial assets and liabilities at
fair value through profit or loss 124,827)($ 25,421)($
Foreign exchange gains (losses) 213,570 484,209)(
Gains on disposals of property, plant and
equipment - 476
Gains (losses) on fair value adjustment,
investment property 7,912 120)(
Gains (losses) on disposals of investments 13,410)( 113,160
Other losses 9,835)( 10,452)(
73,410$ 406,566)($
Year ended
December 31, 2018
Year ended
December 31, 2017
Interest expense:
Bank borrowing 260,387$ 253,273$
Other interest expense 130,638 138,567
Financial costs 391,025$ 391,840$
-377-
(22)Expenses by nature
(23)Employee benefit expense
A. In accordance with the Articles of Incorporation of the Company, a ratio of distributable profit of
the current year, shall be distributed as employees ‘compensation and directors’ and supervisors’
remuneration. The ratio shall be 5%~15% for employees’ compensation and shall not be higher
than 1% for directors’ and supervisors’ remuneration.
B. For the years ended December 31, 2018 and 2017, employees’ compensation was accrued at
$95,600 and $65,700, respectively; while directors’ and supervisors’ remuneration was accrued
at $12,300 and $9,300, respectively. The aforementioned amounts were recognised in salary
expenses.
The employees’ compensation and directors’ and supervisors’ remuneration were estimated and
accrued based on 5%~15% and not higher than 1% of distributable profit of current year for the
year ended December 31, 2018. The employees’ compensation and directors’ and supervisors’
remuneration as resolved by the Board of Directors were in agreement with those amounts
recognised in the 2018 financial statements, and the employees’ compensation will be distributed
in the form of cash.
Employees’ compensation and directors’ and supervisors’ remuneration for 2017 as resolved by
the Board of Directors were in agreement with those amounts recognised in the 2017 financial
statements.
Information about employees’ compensation and directors’ and supervisors’ remuneration of the
Company as resolved by the Board of Directors will be posted in the “Market Observation Post
System” at the website of the Taiwan Stock Exchange.
Year ended
December 31, 2018
Year ended
December 31, 2017
Employee benefit expense 976,967$ 1,013,972$
Depreciation charges on property, plant and
equipment 11,651 10,932
Amortisation charges on intangible assets 5,819 7,441
994,437$ 1,032,345$
Year ended
December 31, 2018
Year ended
December 31, 2017
Wages and salaries 832,854$ 879,607$
Labour and health insurance fees 57,191 57,887
Pension costs 37,744 36,139
Other personnel expenses 49,178 40,339
976,967$ 1,013,972$
-378-
(24)Income tax
A. Income tax expense
(a) Components of income tax expense:
(b) The income tax (charge)/credit relating to components of other comprehensive income is as
follows:
B. Reconciliation between income tax expense and accounting profit
Year ended
December 31, 2018
Year ended
December 31, 2017
Current tax:
Current tax on profits for the year 13,879$ 14,099$
Prior year income tax overestimation - (3,389)
Total current tax 13,879 10,710
Deferred tax:
Origination and reversal of temporary
differences 10,471 133,955
Impact of change in tax rate 71,400 -
Total deferred tax 81,871 133,955
Income tax expense 95,750$ 144,665$
Year ended
December 31, 2018
Year ended
December 31, 2017
Currency translation differences ( 7,663) ( 12,156)
Remeasurement of defined benefit
obligations1,317 841
Increase in revaluation - ( 4,285)
($ 6,346) ($ 15,600)
Year ended
December 31, 2018
Year ended
December 31, 2017
Tax calculated based on profit before tax
and statutory tax rate 310,131$ 146,616$
Effect from expenses disallowed by tax
regulation (285,781) 1,438
Prior year income tax overestimation - (3,389)
Effect from changes in tax regulation 71,400 -
Income tax expense 95,750$ 144,665$
-379-
C. Amounts of deferred tax assets or liabilities as a result of temporary differences, tax losses and
investment tax credits are as follows:
January 1
Recognised in
profit or loss
Recognised
in other
comprehensive
income December 31
Deferred tax assets:
Temporary differences:
Unrealised sales gain 268$ 268)($ -$ -$
Allowance for spare
valuation losses 1,298 229 - 1,527
Allowance for inventory
valuation losses 1,989 269 - 2,258
Allowance for bad debts 19,840 6,468)( - 13,372
Unused compensated
absences 4,341 724 - 5,065
Accrued pension liability 14,934 659 1,317 16,910
Currency translation differences 185 - (185) -
Tax losses 89,250 10,750 - 100,000
132,105 5,895 1,132 139,132
Deferred tax liabilities:
Temporary differences:
Unrealised exchange gain 25,828)( 14,019 - 11,809)(
Foreign investment income
using equity method (485,759) (84,124) - (569,883)
Unrealised sales losses - 13 - 13
Rent by straight-line method (390) (69) - (459)
Currency translation differences (5,906) - (7,478) (13,384)
Increase in revaluation (4,285) - - (4,285)
Fair value adjustment,
investment property (104,572) (17,605) - (122,177)
626,740)( 87,766)( 7,478)( 721,984)(
494,635)($ 81,871)($ 6,346)($ 582,852)($
2018
-380-
January 1
Recognised in
profit or loss
Recognised
in other
comprehensive
income December 31
Deferred tax assets:
Temporary differences:
Unrealised exchange gain 23,761$ 23,761)($ -$ -$
Unrealised sales gain - 268 - 268
Allowance for spare
valuation losses 2,421 1,123)( - 1,298
Allowance for inventory
valuation losses 1,852 137 - 1,989
Allowance for bad debts 19,400 440 - 19,840
Unused compensated
absences 2,542 1,799 - 4,341
Accrued pension liability 16,493 (2,400) 841 14,934
Currency translation differences 13,297 - (13,112) 185
Tax losses 23,862 65,388 - 89,250
103,628 40,748 (12,271) 132,105
Deferred tax liabilities:
Temporary differences:
Unrealised exchange gain - 25,828)( - 25,828)(
Foreign investment income
using equity method (337,740) (148,019) - (485,759)
Unrealised sales losses (196) 196 - -
Rent by straight-line method (390) - - (390)
Currency translation differences (6,862) - 956 (5,906)
Increase in revaluation - - (4,285) (4,285)
Fair value adjustment,
investment property (103,520) (1,052) - (104,572)
448,708)( 174,703)( 3,329)( 626,740)(
345,080)($ 133,955)($ 15,600)($ 494,635)($
2017
-381-
D. Expiration dates of unused tax losses and amounts of unrecognised deferred tax assets are as
follows:
E. The Company has not recognised taxable temporary differences associated with investment in
subsidiaries as deferred tax liabilities. As of December 31, 2018 and 2017, the amounts of
temporary differences unrecognised as deferred tax liabilities were $1,633,198 and $754,777,
respectively.
F. The Company’s income tax returns through 2016 have been assessed and approved by the Tax
Authority.
G. Under the amendments to the Income Tax Act which was promulgated by the President of the
Republic of China in February, 2018, the Company’s applicable income tax rate was raised from
17% to 20% effective from January 1, 2018. The Company has assessed the impact of the change
in income tax rate.
Year incurred
Amount filed/
assessed Unused amount
Unrecognised
deferred tax assets Expiry year
2016 156,511$ 129,493$ -$ 2026
2017 898,310 898,310 447,143 2027
December 31, 2018
Year incurred
Amount filed/
assessed Unused amount
Unrecognised
deferred tax assets Expiry year
2016 140,363$ 140,363$ -$ 2026
2017 847,650 847,650 463,013 2027
December 31, 2017
-382-
(25)Earnings per share
Weighted average
number of ordinary
shares outstanding
Earnings per
share
Amount after tax (shares in thousands) (in dollars)
Basic earnings per share
Profit attributable to ordinary
shareholders of the parent 1,454,904$ 628,146 2.32$
Diluted earnings per share
Profit attributable to ordinary
shareholders of the parent 1,454,904 628,146
Assumed conversion of all dilutive
potential ordinary shares
Employees’ bonus - 4,087
Profit attributable to ordinary
shareholders of the parent plus
assumed conversion of all dilutive
potential ordinary shares 1,454,904$ 632,233 2.30$
Year ended December 31, 2018
Weighted average
number of ordinary
shares outstanding
Earnings per
share
Amount after tax (shares in thousands) (in dollars)
Basic earnings per share
Profit attributable to ordinary
shareholders of the parent 717,784$ 642,716 1.12$
Diluted earnings per share
Profit attributable to ordinary
shareholders of the parent 717,784 642,716
Assumed conversion of all dilutive
potential ordinary shares
Employees’ bonus - 2,549
Profit attributable to ordinary
shareholders of the parent plus
assumed conversion of all dilutive
potential ordinary shares 717,784$ 645,265 1.11$
Year ended December 31, 2017
-383-
(26)Operating leases
The Company leases investment property to others under non-cancellable operating lease
agreements. These leases have terms expiring between 2007 and 2020, and all these lease
agreements are not renewable at the end of the lease period. The future aggregate minimum lease
payments receivable under non-cancellable operating leases are as follows:
(27)Supplemental cash flow information
Investing and financing activities with partial cash payments
(28)Changes in liabilities from financing activities
December 31, 2018 December 31, 2017
Not later than one year 32,290$ 30,522$
Later than one year but not later than five
years 10,290 42,580
42,580$ 73,102$
Year ended
December 31, 2018
Year ended
December 31, 2017
Purchase of property, plant and equipment 6,098$ 8,851$
Add: Opening balance of other payables - 5,481
Less: Ending balance of other payables - -
Cash paid during the year 6,098$ 14,332$
Disposal of available-for-sale financial assets -$ 505,730$
Less: Ending balance of receivables - 44,115)(
Cash paid during the year -$ 461,615$
Purchase of treasury stocks 767,537$ -$
Add: Opening balance of payables - -
Less: Ending balance of payables 17,458)( -
Cash paid during the year 750,079$ -$
Short-term
borrowings
Long-term
borrowings
Corporate
bonds payable
Liabilities from
financing activities-
gross
At January 1, 2018 3,702,000$ 14,221,539$ 5,000,000$ 22,923,539$
Changes in cash flow from
financing activities 107,210)( 3,333,461 - 3,226,251
At December 31, 2018 3,594,790$ 17,555,000$ 5,000,000$ 26,149,790$
-384-
7. RELATED PARTY TRANSACTIONS
(1)Names of related parties and relationship
(2)Significant related party transactions
A. Operating revenue
(a) The products sold to subsidiaries are not sold to other customers. The sales price cannot be
compared with others. The payment terms are 180 days, and the general customers are within
1~2 months.
(b) The Company sells materials (LCD) and semi-finished goods to subsidiaries to manufacture
laptops, and the Company buys back those laptops, which will be sold to customers under a
triangle trade. Materials and semi-finished goods sold to subsidiaries amounted to $3,156,793
and $2,788,216 for the years ended December 31, 2018 and 2017, respectively. The purchases
and sales are offset and shown at net in the financial statements.
Names of related parties Relationship with the Company
Clevo (Cayman Islands) Holding Company The Company's subsidiary
Kapok Computer (Samoa) Corporation The Company's subsidiary
Clevo Computer Singapore Pte Ltd. The Company's subsidiary
Kapok Computer Co., Ltd. The Company's subsidiary
Clevo Investment Co., Ltd. The Company's subsidiary
Kapok Computer (Kunshan) Co., Ltd. The Company is the ultimate parent
Buynow (Xian) Industry Co., Ltd. The Company is the ultimate parent
Buynow (Chengdu) Electronic Information Co., Ltd. The Company is the ultimate parent
Buynow (Chongqing) Industry Co., Ltd. The Company is the ultimate parent
Tianjin Buynow Electronic Information Co., Ltd. The Company is the ultimate parent
Shantou Buynow Mall Co., Ltd. The Company is the ultimate parent
Anshan Buynow Electronic Information Co., Ltd. The Company is the ultimate parent
Taizhou Buynow Electronic Information Co., Ltd. The Company is the ultimate parent
Suzhou Jinzuo Industry Co., Ltd. The Company is the ultimate parent
Dezhou Buynow Electronic Information Co., Ltd. The Company is the ultimate parent
Buynow (Jinzhou) Industry Co., Ltd. The Company is the ultimate parent
Chicony Electronics Co., Ltd. Other related party
Chicony Square (Wuhan) Inc. Associate
Year ended
December 31, 2018
Year ended
December 31, 2017
Sales of products:
Kapok Computer (Kunshan) Co., Ltd. 3,156,793$ 2,785,740$
-385-
B. Purchases
As the goods purchased from the subsidiary are unique, the purchase prices cannot be compared
with other items. The payment term is 30 days Against Monthly Statement and the debit and credit
is offset. The Company may prepay if there is demand for funds to prepare materials. The payment
terms of general customers are within 1~5 months.
C. Receivables from related parties
Receivables from related parties arise mainly from selling products and the receivables do not bear
interest and no collaterals were pledged. There are no provisions held against receivables from
related parties.
D. Prepayments
E. Prepayments for investments
As of December 31, 2018 and 2017, the prepayments for investments of Clevo (Cayman Islands)
Holding Company are $4,425,325 and $5,860,760, respectively.
F. Loans from related parties
(a) Other financial liabilities (shown as other financial liabilities – current)
The loans from subsidiaries are payable at maturity 1 year after the loan is made and carry
interest at 1.04% per annum for the years ended December 31, 2018 and 2017. The amount of
interest payable (recognised as other payable) for the years ended December 31 2018 and 2017
was $249 and $259, respectively. Additionally, interest expense recognised in 2018 and 2017
was $880 and $1,002, respectively.
Year ended
December 31, 2018
Year ended
December 31, 2017
Purchases of goods:
Kapok Computer (Kunshan) Co., Ltd. 11,011,330$ 10,209,423$
December 31, 2018 December 31, 2017
Accounts receivable:
Kapok Computer (Kunshan) Co., Ltd. 818,974$ 536,019$
December 31, 2018 December 31, 2017
Prepayments:
Kapok Computer (Kunshan) Co., Ltd. 1,121,012$ -$
December 31, 2018 December 31, 2017
Subsidaries
Kapok Computer Co., Ltd. 50,000$ 45,000$
Clevo Investment Co., Ltd. 41,000 40,000
91,000$ 85,000$
-386-
(b) Other financial liabilities (shown as other non-current liabilities)
The loans from subsidiaries are payable at maturity within 2~4 years after the loan is made and
carry interest at 0% and 0%~2.4% per annum for the years ended December 31, 2018 and 2017,
respectively. The amount of interest payable (recognised as other payable) for the years ended
December 31, 2018 and 2017 was $0 and $7,580, respectively. Additionally, interest expense
recognised in 2018 and 2017 was $0 and $11,704, respectively
G. Endorsements and guarantees provided to related parties
The amount of endorsements and guarantees provided to subsidiaries in 2018 and 2017 are as
follows:
H. Others
(a) The joint guarantor and co-issuer of the guarantee notes of bank borrowings is Kent Hsu in
2018 and 2017.
(b) For the year ended December 31, 2018, the Company pledged time deposits to financial
institutions as collateral for the borrowings made by the Company’s subsidiaries, Taizhou
Buynow Electronic Information Co., Ltd., Suzhou Jinzuo Industry Co., Ltd., Buynow (Jinzhou)
Industry Co., Ltd. and Anshan Buynow Electronic Information Co., Ltd.. For the year ended
December 31, 2017, the Company pledged time deposits to financial institutions as collateral
for the borrowings made by the Company’s subsidiary, Shantou Buynow Mall Co., Ltd..
December 31, 2018 December 31, 2017
Subsidiaries
Clevo (Cayman Islands) Holding
Company-$ 332,897$
Clevo Computer Singapore Pte Ltd. 120,049 115,885
Chicony Square (Wuhan) Inc. - 1,039,990
120,049$ 1,488,772$
December 31, 2018 December 31, 2017
Clevo (Cayman Islands) Holding Co.,
Ltd.
4,925,120$ 4,457,100$
Kapok Computer (Samoa) Corporation 1,077,370 1,218,274
Shantou Buynow Mall Co., Ltd. - 2,273,750
Subsidiaries 3,432,595 1,481,953
9,435,085$ 9,431,077$
-387-
(3)Key management compensation
8. PLEDGED ASSETS
The Company’s assets pledged as collateral are as follows:
9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT
COMMITMENTS
(1)Contingencies
None.
(2)Commitments
A. As of December 31, 2018 and 2017, the Company has issued guarantee notes amounting to
$22,216,186 and $25,107,372, respectively, for bank repayment and forward exchange trading.
B. On December 28, 2018, the Company entered into a syndicated loan agreement with 9 banks
including Taiwan Cooperative Bank amounting to $6,000,000 and provided equal amount of
guarantee notes. The Company and the Chairman of the Company are the joint guarantor and co-
issuer of the guarantee notes.
C. On May 20, 2015, the Company’s consolidated subsidiary, Clevo (Cayman Islands) Holding
Company, entered into a syndicated loan agreement with 7 banks including Land Bank of Taiwan
amounting to USD 120 million and provided equal amount of guarantee notes. The Company, the
Company’s consolidated subsidiary, Clevo (Cayman Islands) Holding Company, and the
Chairman of the Company are the joint guarantor and co-issuer of the guarantee notes.
10. SIGNIFICANT DISASTER LOSS
None.
11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE
The Board of Directors has resolved the appropriation of 2018 earnings on March 27, 2019. Details are
provided in Note 6(19) F.
Year ended December 31, 2018 Year ended December 31, 2017
Salaries and other short-term
employee benefits 48,723$ 41,806$
Post-employment benefits 1,427 1,668
50,150$ 43,474$
Pledged asset December 31, 2018 December 31, 2017 Purpose
Restricted assets (non-
current) 3,409,922$ 3,084,800$
STANDBY L/C、
Long-term borrowings
Property, plant and
equipment 328,160 334,534 Long-term borrowings
Investment property and
long-term prepaid rents 1,576,905 1,568,993 Long-term borrowings
5,314,987$ 4,988,327$
Book value
-388-
12. OTHERS
(1) Capital management
The Company’s objectives when managing capital are to safeguard the Company’s ability to
continue as a going concern in order to provide returns for shareholders and to maintain an optimal
capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the
Company may adjust the amount of dividends paid to shareholders, return capital to shareholders,
issue new shares or sell assets to reduce debt. The Company monitors capital on the basis of the
gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as
total borrowings (including ‘current and non-current borrowings’ as shown in the consolidated
balance sheet) less cash and cash equivalents. Total capital is calculated as ‘equity’ as shown in the
balance sheet plus net debt.
During the year ended December 31, 2018, the Company’s strategy, which was unchanged from
2017, was to maintain the gearing ratio under 50%. The gearing ratios at December 31, 2018 and
2017 were as follows:
December 31, 2018 December 31, 2017
Total borrowings 26,149,790$ 22,923,539$
Less: Cash and cash equivalents 4,775,480)( 5,016,809)(
Net debt 21,374,310 17,906,730
Total equity 41,839,842 42,284,137
Total capital 63,214,152$ 60,190,867$
Gearing ratio 34% 30%
-389-
(2) Financial instruments
A. Financial instruments by category
Note: Financial assets measured at amortised cost include cash and cash equivalents, accounts
and notes receivable (including related parties), other receivables (including related parties),
refundable deposits and financial assets measured at amortised cost – current. Financial
liabilities measured at amortised cost include short-term borrowings, accounts and notes
payable (including related parties), other payables, corporate bonds payable, long-term
December 31, 2018 December 31, 2017
Financial assets
Financial assets at fair value through profit or loss
Financial assets mandatorily measured at fair
value through profit or loss
655,929$ -$
Financial assets held for trading - 179,568
655,929$ 179,568$
Available-for-sale financial assets
Available-for-sale financial assets -$ 384,117$
Financial assets at amortised cost/Loans and
receivables
Cash and cash equivalents 4,775,480$ 5,016,809$
Financial assets at amortised cost - current 3,409,922 -
Accounts receivable 1,418,908 1,692,558
Accounts receivable - related parties 818,974 536,019
Guarantee deposits paid 7,985 7,965
Other financial assets - current - 3,084,800
10,431,269$ 10,338,151$
Financial liabilities
Financial liabilities at amortised cost
Short-term borrowings 3,594,790$ 3,702,000$
Notes payable 15,070 15,236
Accounts payable 270,965 443,784
Other payables 363,089 333,785
Other financial liabilities - current 91,000 85,000
Corporate bonds payable 5,000,000 5,000,000
Long-term borrowings
(including current portion) 17,555,000 14,221,539
Guarantee deposits received 11,548 9,948
Other financial liabilities - non-current 120,049 1,488,772
27,021,511$ 25,300,064$
-390-
borrowings (including those maturing within one year or one business cycle), guarantee
deposits received and other financial liabilities.
B. Financial risk management policies
The Company’s activities expose it to a variety of financial risks: market risk (including foreign
exchange risk, interest rate risk and price risk), credit risk and liquidity risk. To minimise any
adverse effects on the financial performance of the Company, derivative financial instruments,
such as foreign exchange forward contracts and foreign currency option contracts are used to
hedge certain exchange rate risk.
C. Significant financial risks and degrees of financial risks
(a) Market risk
Foreign exchange risk
i. The Company operates internationally and is exposed to foreign exchange risk arising from
the transactions of the Company and its subsidiaries used in various functional currency,
primarily with respect to the USD and RMB. Foreign exchange risk arises from future
commercial transactions and recognised assets and liabilities.
ii. Management has set up a policy to require group companies to manage their foreign
exchange risk against their functional currency. The companies are required to hedge their
entire foreign exchange risk exposure with the Company treasury. Exchange rate risk is
measured through a forecast of highly probable USD and RMB expenditures. Forward
foreign exchange contracts are adopted to minimise the volatility of the exchange rate
affecting cost of forecast inventory purchases.
iii. To deduct the risk of fair value from exchange rate fluctuation and the risk of cash flow,
the Company hedges foreign assets and liabilities or expected transaction that are probably
by using financial derivatives such as forward exchange contracts. The Company monitors
the exchange rate fluctuation at any time, and sets stop loss limit.
iv. The Company’s businesses involve some non-functional currency operations (the
Company’s and certain subsidiaries’ functional currency: NTD; other certain subsidiaries’
functional currency: RMB and JPY). The information on assets and liabilities denominated
in foreign currencies whose values would be materially affected by the exchange rate
fluctuations is as follows:
-391-
Foreign currency
amount
(In thousands) Exchange rate
Book value
(NTD)
(Foreign currency: functional
currency)
Financial assets
Monetary items
USD:NTD 294,819$ 30.78 9,074,529$
RMB:NTD 308,494 4.49 1,385,138
HKD:NTD 37,042 3.93 145,575
JPY:NTD 139,333 0.28 39,013
Investments accounted for under
the equity method
USD:NTD 1,334,449 30.78 41,074,350
JPY:NTD 6,051,557 0.28 1,694,436
Financial liabilities
Monetary items
USD:NTD 12,578 30.78 387,151
JPY:NTD 11,400 0.28 3,192
December 31, 2018
Foreign currency
amount
(In thousands) Exchange rate
Book value
(NTD)
(Foreign currency: functional
currency)
Financial assets
Monetary items
USD:NTD 284,620$ 29.71 8,456,060$
RMB:NTD 273,746 4.55 1,245,544
HKD:NTD 19,793 3.80 75,213
JPY:NTD 10,275 0.26 2,672
Investments accounted for under
the equity method
USD:NTD 1,565,816 29.71 46,520,398
JPY:NTD 5,993,031 0.26 1,558,188
Financial liabilities
Monetary items
USD:NTD 60,029 29.71 1,783,462
JPY:NTD 3,462,179 0.26 900,167
December 31, 2017
-392-
vii. The total exchange gain (loss), including realised and unrealised arising from significant
foreign exchange variation on the monetary items held by the Company for the years ended
December 31, 2018 and 2017, amounted to $213,570 and ($484,209), respectively.
viii. Analysis of foreign currency market risk arising from significant foreign exchange
variation:
Degree of
variation
Effect on
profit or loss
Effect on other
comprehensive
income
(Foreign currency: functional
currency)
Financial assets
Monetary items
USD:NTD 1% 75,319$ -$
RMB:NTD 1% 11,497 -
HKD:NTD 1% 1,208 -
JPY:NTD 1% 324 -
Financial liabilities
Monetary items
USD:NTD 1% 3,213 -
JPY:NTD 1% 26 -
Year ended December 31, 2018
Sensitivity analysis
Degree of
variation
Effect on
profit or loss
Effect on other
comprehensive
income
(Foreign currency: functional
currency)
Financial assets
Monetary items
USD:NTD 1% 70,185$ -$
RMB:NTD 1% 10,338 -
HKD:NTD 1% 624 -
JPY:NTD 1% 22 -
Financial liabilities
Monetary items
USD:NTD 1% 14,803 -
JPY:NTD 1% 7,471 -
Year ended December 31, 2017
Sensitivity analysis
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Price risk
i. The Company’s equity securities, which are exposed to price risk, are the held financial
assets at fair value through profit or loss, financial assets at fair value through other
comprehensive income and available-for-sale financial assets. To manage its price risk
arising from investments in equity securities, the Company diversifies its portfolio.
ii. The Company’s investments in equity securities comprise shares and open-end funds
issued by the domestic and foreign companies. The prices of equity securities would change
due to the change of the future value of investee companies. If the prices of these equity
securities had increased/decreased by 1% with all other variables held constant, post-tax
profit for the years ended December 31, 2018 and 2017 would have increased/decreased
by $6,559 and $1,796, respectively, as a result of gains/losses on equity securities classified
as at fair value through profit or loss. Other components of equity would have
increased/decreased by $0 and $3,841, respectively, as a result of other comprehensive
income classified as available-for-sale equity investment.
Cash flow and fair value interest rate risk
i. The Company’s main interest rate risk arises from long-term borrowings with variable rates,
which expose the Company to cash flow interest rate risk. During 2018 and 2017, the
Company’s borrowings at variable rate were mainly denominated in New Taiwan dollars.
ii.The Company’s borrowings are measured at amortised cost. The borrowings are
periodically contractually repriced and to that extent are also exposed to the risk of future
changes in market interest rates.
iii.If the borrowing interest rate had increased/decreased by 1% with all other variables held
constant, profit, net of tax for the years ended December 31, 2018 and 2017 would have
decreased/increased by $169,198 and $148,765, respectively. The main factor is that
changes in interest expense result from floatingrate borrowings.
(b) Credit risk
Effective 2018
i. Credit risk refers to the risk of financial loss to the Company arising from default by the
clients or counterparties of financial instruments on the contract obligations. The main
factor is that counterparties could not repay in full the accounts receivable based on the
agreed terms, and the contract cash flows of debt instruments stated at amortised cost.
ii. According to the Company’s credit policy, each local entity in the Company is responsible
for managing and analysing the credit risk for each of their new clients before standard
payment and delivery terms and conditions are offered. Internal risk control assesses the
credit quality of the customers, taking into account their financial position, past experience
and other factors.
iii. Individual risk limits are set based on internal or external ratings in accordance with limits
set by the management of credit manage. The utilisation of credit limits is regularly
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monitored.
iv. The Company adopts the assumption under IFRS 9, that is, the default occurs when the
contract payments are past due over 90 days.
v. For banks and financial institutions, only independently rated parties with a best rating
are accepted.
vi. The Company adopts the following assumption under IFRS 9: If the contract payments
were past due over 30 days based on the terms, there has been a significant increase in
credit risk on that instrument since initial recognition.
vii. The Company adopts the assumption under IFRS 9, that is, the default occurs when the
contract payments are reclassified to overdue receivables as the Company expects them
to be uncollectible.
viii.The Company classifies customer’s accounts receivable in accordance with customer
types. The Company applies the modified approach using provision matrix to estimate
expected credit loss under the provision matrix basis.
ix. The Company used the forecastability to adjust historical and timely information to assess
the default possibility of accounts receivable, contract assets and lease payments
receivable. On December 31, 2018, the provision matrix is as follows:
x. Movements in relation to the Company applying the modified approach to provide loss
allowance for accounts receivable is as follows:
xii. Credit risk information for 2017 is provided in Note 12(4)
Not past due
1~90 days
past due
91~180 days
past due
AtDecember 31, 2018
Expected loss rate 0.05% 0.27% 98.74%
Total book value 1,837,907$ 401,600$ 39$
Loss allowance 557)( 1,068)( 39)(
181~270 days
past due
Over 270 days
past due Total
Expected loss rate 100% 100%
Total book value 6$ 12,617$ 2,252,169$
Loss allowance 6)( 12,617)( 14,287)(
Accounts receivable
At January 1_IAS 39 64,546$
Adjustments under new standards -
At January 1_IFRS 9 64,546
Write-offs 50,259)(
At December 31 14,287$
2018
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(c) Liquidity risk
i. Cash flow forecasting is performed in the operating entities of the Company and aggregated
by Group treasury. Group treasury monitors rolling forecasts of the Company’s liquidity
requirements to ensure it has sufficient cash to meet operational needs.
ii. The table below analyses the Group’s non-derivative financial liabilities and net-settled or
gross-settled derivative financial liabilities into relevant maturity groupings based on the
remaining period at the balance sheet date to the contractual maturity date for non-
derivative financial liabilities and to the expected maturity date for derivative financial
liabilities.
December 31, 2018
Less than 1
year
Between 1
and 2 years
Between 2
and 5 years Over 5 years
Non-derivative financial
liabilities
Short-term borrowings 3,633,525$ -$ -$ -$
Notes payable 15,070 - - -
Accounts payable 270,965 - - -
Other payables 363,089 - - -
Other financial liabilities -
current
91,946 - - -
Bonds payable 75,000 5,075,000 - -
Long-term borrowings
(including current portion)
- 5,045,790 12,907,489 -
Guarantee deposits - 11,548 - -
Other financial liabilities -
non-current
- 120,050 - -
Financial guarantee contracts 4,763,969 1,231,280 - -
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iii. The Company does not expect the maturity date will be early, or the actual amount will
be different.
(3) Fair value information
A. The different levels that the inputs to valuation techniques are used to measure fair value of
financial and non-financial instruments have been defined as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the
entity can access at the measurement date. A market is regarded as active where a market
in which transactions for the asset or liability take place with sufficient frequency and
volume to provide pricing information on an ongoing basis. The fair value of the
Company’s investment in listed stocks and beneficiary certificates is included in Level
1
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset
or liability, either directly or indirectly. The fair value of the Company’s investment in
off-the-run beneficiary certificates, bank debentures, convertible bonds and derivative
instruments is included in Level 2.
Level 3:Unobservable inputs for the asset or liability. The fair value of the Company’s investment
in investment property is included in Level 3.
B. Financial instruments not measured at fair value
The carrying amounts of cash and cash equivalents, notes receivable, accounts receivable
(including related parties), other receivables, short-term borrowings, notes payable, accounts
December 31, 2017
Less than 1
year
Between 1
and 2 years
Between 2
and 5 years Over 5 years
Non-derivative financial
liabilities
Short-term borrowings 3,741,446$ -$ -$ -$
Notes payable 15,236 - - -
Accounts payable 443,784 - - -
Other payables 333,785 - - -
Other financial liabilities -
current
85,884 - - -
Bonds payable 75,000 75,000 5,075,000 -
Long-term borrowings
(including current portion)
1,023,765 9,443,555 4,209,461 -
Guarantee deposits - 9,948 - -
Other financial liabilities -
non-current
117,616 1,364,171 159,253 -
Financial guarantee contracts 4,457,791 1,426,272 653,708 -
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payable (including related parties), other payables, corporate bonds payable, long-term
borrowings (including current portion) and other financial liabilities. are approximate to their fair
values.
C. The related information of financial and non-financial instruments measured at fair value by level
on the basis of the nature, characteristics and risks of the assets and liabilities at December 31,
2018 and 2017 is as follows:
(a) The related information of the nature of the assets and liabilities is as follows:
Note: Investment property measured at fair value.
(b)The methods and assumptions the Company used to measure fair value are as follows:
i.The instruments the Company used market quoted prices as their fair values (that is, Level
1) are listed below by characteristics:
ii. Except for financial instruments with active markets, the fair value of other financial
instruments is measured by using valuation techniques or by reference to counterparty
quotes. The fair value of financial instruments measured by using valuation techniques can
be referred to current fair value of instruments with similar terms and characteristics in
December 31, 2018 Level 1 Level 2 Level 3 Total
Assets
Recurring fair value measurements
Financial assets at fair value through
profit or loss
Equity securities 655,929$ -$ -$ 655,929$
Investment property (Note ) - - 1,576,905 1,576,905
655,929$ -$ 1,576,905$ 2,232,834$
December 31, 2017 Level 1 Level 2 Level 3 Total
Assets
Recurring fair value measurements
Financial assets at fair value through
profit or loss
Equity securities 179,568$ -$ -$ 179,568$
Debt securities - - - -
Available-for-sale equity securities
Equity securities 384,117 - - 384,117
Investment property (Note ) - - 1,568,993 1,568,993
563,685$ -$ 1,568,993$ 2,132,678$
Listed shares Open-end fund / Debt securities
Market quoted price Closing priceNet asset
value
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substance, discounted cash flow method or other valuation methods, including calculated
by applying model using market information available at the balance sheet date (i.e. yield
curves on the Taipei Exchange, average commercial paper interest rates quoted from
Reuters).
iii. When assessing non-standard and low-complexity financial instruments, for example,
debt instruments without active market, interest rate swap contracts, foreign exchange swap
contracts and options, the Company adopts valuation technique that is widely used by
market participants. The inputs used in the valuation method to measure these financial
instruments are normally observable in the market.
iv. The valuation of derivative financial instruments is based on valuation model widely
accepted by market participants, such as present value techniques and option pricing
models. Forward exchange contracts are usually valued based on the current forward
exchange rate.
v. The output of valuation model is an estimated value and the valuation technique may not
be able to capture all relevant factors of the Company’s financial and non-financial
instruments. Therefore, the estimated value derived using valuation model is adjusted
accordingly with additional inputs, for example, model risk or liquidity risk and etc. In
accordance with the Company’s management policies and relevant control procedures
relating to the valuation models used for fair value measurement, management believes
adjustment to valuation is necessary in order to reasonably represent the fair value of
financial and non-financial instruments at the balance sheet. The inputs and pricing
information used during valuation are carefully assessed and adjusted based on current
market conditions.
vi. The Company takes into account adjustments for credit risks to measure the fair value
of financial and non-financial instruments to reflect credit risk of the counterparty and the
Company’s credit quality.
E. For the years ended December 31, 2018 and 2017, there was no transfer between Level 1 and
Level 2.
F. The movement of Level 3 for the years ended December 31, 2018 and 2017 are provided in Note
6(7)
G. For the years ended December 31, 2018 and 2017, there was no transfer into or out from Level
3.
H. Financial and Administrative segment is in charge of valuation procedures for fair value
measurements being categorised within Level 3 (investment property), which is based on the
valuation methods and assumptions announced by the Financial Supervisory Commission,
Securities and Futures Bureau or through outsourced appraisal performed by the external valuer.
The Company set up valuation policies, valuation processes and rules for measuring fair value
of investment property and ensure compliance with the related requirements in IFRS.
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I. The following is the qualitative information of significant unobservable inputs and sensitivity
analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair
value measurement:
Note 1: The range of long-term rent revenue growth rate is 1%; the range of discount rate is
provided in Note 6(7).
Note 1: The range of long-term rent revenue growth rate is 1%; the range of discount rate is
provided in Note 6(7).
(4) Effects on initial application of IFRS 9 and information on application of IAS 39 in 2017
A. Summary of significant accounting policies adopted in 2017:
(a) Financial assets at fair value through profit or loss
i. They are financial assets held for trading or financial assets designated as at fair value
through profit or loss on initial recognition. Financial assets are classified in this category
of held for trading if acquired principally for the purpose of selling in the short-term.
Derivatives are also categorized as financial assets held for trading unless they are
designated as hedges. Financial assets that meet one of the following criteria are designated
as at fair value through profit or loss on initial recognition:
(i) Hybrid (combined) contracts; or
(ii) They eliminate or significantly reduce a measurement or recognition inconsistency; or
Fair value at
December 31,
2018
Valuation
technique
Significant
unobservable
input
Range
(weighted
average)
Relationship of
inputs to fair value
Investment
property
1,576,905$ Income
approach of
discounted
cash flow
method
Long-term rent
revenue growth
rate and
discount rate
(Note 1) The higher the long-
term rent revenue
growth rate, the
higher the fair value;
The higher the
discount rate, the
lower the fair value
Fair value at
December 31,
2017
Valuation
technique
Significant
unobservable
input
Range
(weighted
average)
Relationship of
inputs to fair value
Investment
property
1,568,993$ Income
approach of
discounted
cash flow
method
Long-term rent
revenue growth
rate and
discount rate
(Note 1) The higher the long-
term rent revenue
growth rate, the
higher the fair value;
The higher the
discount rate, the
lower the fair value
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(iii)They are managed and their performance is evaluated on a fair value basis, in
accordance with a documented risk management or investment strategy.
ii. On a regular way purchase or sale basis, financial assets at fair value through profit or loss
are recognised and derecognised using trade date accounting.
iii. Financial liabilities at fair value through profit or loss are initially recognised at fair value.
Related transaction costs are expensed in profit or loss. These financial liabilities are
subsequently remeasured and stated at fair value, and any changes in the fair value of these
financial liabilities are recognised in profit or loss.
(b) Available for sale financial assets
i. They are non-derivatives that are either designated in this category or not classified in any
of the other categories.
ii. On a regular way purchase or sale basis, available-for-sale financial assets are recognised
and derecognised using trade date accounting.
iii. They are initially recognised at fair value plus transaction costs. These financial assets are
subsequently remeasured and stated at fair value, and any changes in the fair value of these
financial assets are recognised in other comprehensive income.
(c) Notes receivable, accounts receivable and other receivables
Notes receivable and accounts receivable are created by the entity by selling goods or
providing services to customers in the ordinary course of business. Other receivables are other
receivables not belong note receivable and accounts receivable. Note receivable, accounts
receivable and other receivables are initially recognised at fair value and subsequently
measured at amortised cost using the effective interest method, less provision for impairment.
However, short-term accounts receivable without bearing interest are subsequently measured
at initial invoice amount as the effect of discounting is immaterial.
(d) Impairment of financial assets
i. The Company assesses at each balance sheet date whether there is objective evidence that
a financial asset or a group of financial assets is impaired as a result of one or more events
that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or
events) has an impact on the estimated future cash flows of the financial asset or group of
financial assets that can be reliably estimated.
ii. The criteria that the Company uses to determine whether there is objective evidence of an
impairment loss is as follows:
(i) Significant financial difficulty of the issuer or debtor;
(ii) A breach of contract, such as a default or delinquency in interest or principal payments;
(iii) The Company, for economic or legal reasons relating to the borrower’s financial
difficulty, granted the borrower a concession that a lender would not otherwise consider;
(iv) It becomes probable that the borrower will enter bankruptcy or other financial
reorganisation;
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(v) The disappearance of an active market for that financial asset because of financial
difficulties;
(vi) Observable data indicating that there is a measurable decrease in the estimated future
cash flows from a group of financial assets since the initial recognition of those assets,
although the decrease cannot yet be identified with the individual financial asset in the
group, including adverse changes in the payment status of borrowers in the group or
national or local economic conditions that correlate with defaults on the assets in the
group;
(vii) Information about significant changes with an adverse effect that have taken place in
the technology, market, economic or legal environment in which the issuer operates, and
indicates that the cost of the investment in the equity instrument may not be recovered;
(viii) A significant or prolonged decline in the fair value of an investment in an equity
instrument below its cost.
iii. When the Company assesses that there has been objective evidence of impairment and an
impairment loss has occurred, accounting for impairment is made as follows according to
the category of financial assets:
(i)Financial assets at amortised cost (including note receivable, accounts receivable and
other receivables)
The amount of the impairment loss is measured as the difference between the asset’s
carrying amount and the present value of estimated future cash flows discounted at the
financial asset’s original effective interest rate, and is recognised in profit or loss. 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 loss was recognised,
the previously recognised impairment loss is reversed through profit or loss to the
extent that the carrying amount of the asset does not exceed its amortised cost that
would have been at the date of reversal had the impairment loss not been recognised
previously. Impairment loss is recognised and reversed by adjusting the carrying
amount of the asset through the use of an impairment allowance account.
(iii)Available-for-sale financial assets
The amount of the impairment loss is measured as the difference between the asset’s
acquisition cost (less any principal repayment and amortisation) and current fair value,
less any impairment loss on that financial asset previously recognised in profit or loss,
and is reclassified from ‘other comprehensive income’ to ‘profit or loss’. If, in a
subsequent period, the fair value of an investment in a debt instrument increases, and
the increase can be related objectively to an event occurring after the impairment loss
was recognised, such impairment loss is reversed through profit or loss. Impairment
loss of an investment in an equity instrument recognised in profit or loss shall not be
reversed through profit or loss. Impairment loss is recognised and reversed by adjusting
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the carrying amount of the asset through the use of an impairment allowance account.
B. The reconciliations of carrying amount of financial assets transferred from December 31, 2017,
IAS 39, to January 1, IFRS 9, were as follows:
Under IAS 39, the equity instruments, which were classified as available-for-sale financial assets,
amounting to $384,117 were reclassified as "financial assets at fair value through profit or loss"
amounting to $384,117. Accordingly, retained earnings was increased and other equity interest
was decreased in the amounts of $97,878 and $97,878 under IFRS 9, respectively.
C. The significant accounts as of December 31, 2017 are as follows:
(a) Financial assets at fair value through profit or loss
i. The Company recognised net loss amounting to $23,174 on financial assets held for trading
for the year ended December 31, 2017.
ii. The counterparties of the Company’s investments in debt instruments have good credit
quality (the ratings are tw BBB+).
iii. The Company has no financial assets at fair value through profit or loss pledged to others.
Available-for-
sale-equity
Measured at fair
value through
other
comprehensive
income-equity Total
Retained
earnings Other equity
IAS 39 $ 179,568 $ 384,117 $ 563,685 $ 1,079,944 ($ 2,020,190)
Transferred into and
measured at fair
value through profit
or loss 384,117 ( 384,117) - 97,879 97,879)(
IFRS 9 $ 563,685 $ - $ 563,685 $ 1,177,823 ($ 2,118,069)
Measured at
fair value
through profit
or loss
Effects
Items December 31, 2017
Current items:
Financial assets held for trading
Stocks 219,033$
Valuation adjustment 39,465)(
179,568$
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(b)Available-for-sale financial assets
i. The Company recognised ($60,061) in other comprehensive income for fair value change
for the year ended December 31, 2017.
ii. The Company recognised net profit amounting to $110,913 on available-for-sale financial
assets in current profit and loss for the year ended December 31, 2017.
iii. Due to the global financial storm in 1998, the listed stocks classified as financial assets at
fair value through profit or loss would be reclassified as available-for-sale financial assets
amounting to $2,070,713, according to IAS 39.50(C). The information are as follows:
(i) The information about the balance of above reclassified assets which were not deducted:
(ii) The listed stocks recognised $0 and ($81,099) in current profit or loss and other
comprehensive income for fair value change for the year ended December 31, 2017.
(iii) The listed stocks recognised in current profit or loss, if the listed stocks would not be
reclassified as available-for-sale financial assets on October 1 1998:
(iv) The listed stocks from subsidiaries recognised $0 in current profit or loss, if the listed
stocks would not be reclassified as available-for-sale financial assets on October 1,
1998.
E. Credit risk information for the year ended December 31, 2017 is as follows:
(a) Credit risk refers to the risk of financial loss to the Company arising from default by the
clients or counterparties of financial instruments on the contract obligations. According to
the Company’s credit policy, each local entity in the Company is responsible for managing
and analysing the credit risk for each of their new clients before standard payment and
delivery terms and conditions are offered. Internal risk control assesses the credit quality of
the customers, taking into account their financial position, past experience and other factors.
Individual risk limits are set based on internal or external ratings in accordance with limits
set by the Board of Directors. The utilisation of credit limits is regularly monitored. Credit
risk arises from cash and cash equivalents, derivative financial instruments and deposits with
banks and financial institutions, as well as credit exposures to wholesale and retail customers,
including outstanding receivables and promised transactions.
Items December 31, 2017
Current items:
Listed stocks 288,711$
Valuation adjustment 95,406
384,117$
Book value / Fair value
Irems December 31, 2017
Listed stocks 346,363$
Year ended December 31, 2017
Listed stocks 81,909)($
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(b) For the year ended December 31, 2017, no credit limits were exceeded during the reporting
periods, and management does not expect any significant losses from non-performance by
these counterparties.
(c) The Company’s accounts receivable that are neither past due nor impaired are fully
performing in line with the credit standards prescribed:
Group 1: The payment term is L/C.
Group 2: The payment term is O/A and have accounts receivable insurance.
Group 3: The payment term is O/A and have no accounts receivable insurance.
(d) The ageing analysis of financial assets that were past due but not impaired is as follows:
The ageing analysis is based on due dates.
(e) The movement analysis of impaired financial assets are as follows:
i. The Company’s impaired accounts receivable individually amounted to $61,470 on
December 31, 2017.
ii. Movements in the provision for impairment of accounts receivable are as follows:
(5) Effects of initial application of IFRS 15 and information on application of IAS 11 and IAS 18 in
2017
A. The significant accounting policies applied on revenue recognition for the year ended December
31, 2017 are set out below.
Sales of goods
The Company manufactures and sells video display unit and computer and design of computer
peripheral device products. Revenue is measured at the fair value of the consideration received
December 31, 2017
Group 1 302,692$
Group 2 1,034,384
Group 3 -
1,337,076$
December 31, 2017
Accounts receivable
Up to 30 days 345,762$
31 to 90 days 10,174
91 to 180 days -
Over 180 days 2,622
358,558$
Individual provision Group provision Total
At January 1 61,470$ 3,076$ 64,546$
Provision for impairment - - -
At December 31 61,470$ 3,076$ 64,546$
2017
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or receivable taking into account of business tax, returns, rebates and discounts for the sale of
goods to external customers in the ordinary course of the Group’s activities. Revenue arising
from the sales of goods is recognised when the Group has delivered the goods to the customer,
the amount of sales revenue can be measured reliably and it is probable that the future economic
benefits associated with the transaction will flow to the entity. The delivery of goods is completed
when the significant risks and rewards of ownership have been transferred to the customer, the
Group retains neither continuing managerial involvement to the degree usually associated with
ownership nor effective control over the goods sold, and the customer has accepted the goods
based on the sales contract or there is objective evidence showing that all acceptance provisions
have been satisfied.
B. The revenue recognised by using above accounting policies for the year ended December 31,
2017 are as follows:
C. The effects and description of current balance sheet and comprehensive income statement if the
Company continues adopting above accounting policies are as follows:
Explanation:According to IFRS 15, the advance sales receipts (previously shown as other
current liabilities) related to contracts is shown as contract liabilities in the balance
sheet.
13. SUPPLEMENTARY DISCLOSURES
(1) Significant transactions information
A. Loans to others: Please refer to p276-p298.
B. Provision of endorsements and guarantees to others: Please refer to p299-p303.
C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to p304-p305.
D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company’s paid-in capital: Please refer to p306.
E. Acquisition of real estate reaching $300 million or 20% of paid-in capital or more: Please refer to p307.
Year ended December 31, 2017
Sales revenue of computer products 14,131,684$
Balance sheet items Description
Balance by
using IFRS 15
Balance by using
previous
accounting
policies
Effects from
chages in
accounting policy
Contract liabilities $ 24,382 $ - $ 24,382
Other current assets
-Advance sales receipts - 24,382 ( 24,382)
December 31, 2018
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F. Disposal of real estate reaching $300 million or 20% of paid-in capital or more: None.
G. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-
in capital or more: Please refer to p308.
H. Receivables from related parties reaching $100 million or 20% of paid-in capital or more:
Please refer to p309.
I. Trading in derivative instruments undertaken during the reporting period: As of December 31, 2018, the Company did not have open interest derivative instruments. The Company recognised net profit amounting to $669 on derivative instruments in 2018.
J. Significant inter-company transactions during the reporting period: Please refer to p310-p316.
(2) Information on investees
Names, locations and other information of investee companies (not including investees in Mainland China): Please refer to p317-p321.
(3) Information on investments in Mainland China
A. Basic information: Please refer to p322-p330.
B. Ceiling on investments in Mainland China: Please refer to p322-p330.
C. Significant transactions, price, payment term and unrealised gain or loss, either directly or indirectly through a third area, with investee companies in the Mainland Area: Significant sales (purchases), property transactions, accounts receivable (payable), provision of endorsements and guarantees from notes or provides collaterals and accommodation of funds, either directly or indirectly through a third area, with investee companies in the Mainland Area: Provided in Note13(1) A, B, E, G, H, J.
14. SEGMENT INFORMATION
None.
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CLEVO CO.,
Chairman: Hsu, Kun-Tai