SYNNEX TECHNOLOGY INTERNATIONAL CORPORATION

Stock code: 2347

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2016 Annual Review

www.synnex-grp.com mops.twse.com.tw

Spokesperson Evans S.W. Tu President (02) 2506-3320 [email protected]

Deputy Spokesperson Oliver Chang AVP Financial (02) 2506-3320 [email protected]

Headquarters 4F, No.75, Sec. 3, Minsheng E. Rd., Taipei 104, Taiwan, R.O.C. (02) 2506-3320

Kaohsiung branch 12F-2., No.290, Ersheng 1st Rd., Kaohsiung, Taiwan, R.O.C. (07) 716-1001

Stock registration agent Stock Affairs Department of Chinatrust Commercial Bank 5F, No.83, Sec. 1, Chongqing S. Rd., Taipei, Taiwan, R.O.C. (02) 2181-1911 www.chinatrust.com.tw

CPA for the latest financial statement PricewaterhouseCoopers Cuimiao Ye, Yulong Wu 27F., No.333, Sec. 1, Keelung Rd., Taipei, Taiwan, R.O.C. (02) 2729-6666 www.pwc.tw

Global Depository Receipt (GDR) trading center Luxembourg Stock Exchange For your convenience, please check London Stock Exchange for GDR trading information. (website: www.londonstockexchange.com) Ticker symbol: SYXZF

Hong Kong branch 14F, Hutchison House, Hong Kong (852) 2846-1888

Linkuo logistics center

No.15, Dinghu 9th St., Guishan Township, Taoyuan County, Taiwan, R.O.C (03) 328-9201

Taichung logistics center (Taichung branch)

No.35, Gongyequ 24th Rd., Nantun Dist., Taichung City, Taiwan, R.O.C (04) 2350-3456

China logistics center

Shanghai, Beijing, Nanjing, Chengdu, Shenyang, Hangzhou, Tianjin, Xi'an, Qingdao, Guangzhou, Suzhou, Wuhan, Zhengzhou, Hefei, Xiamen, Nanchang, Changsha, Jinan, Harbin, Ningbo

Australia logistics center Melbourne, Sydney

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www.synnex-grp.com

Important Notice:

This Annual Review is a “short form” overview. It is designed to provide a concise summary of Synnex’s activities and financial position for the year ending December 31, 2014. This Annual Review does not represent or summarize all publicly available information about Synnex. There is other publicly available information from Synnex’s Annual Report (only Chinese version), information that has been notified to the Taiwan Stock Exchange Corp. and Securities And Futures Bureau, Financial Supervisory Commission, Executive Yuan, R.O.C., and other information publicly released by Synnex.

Synnex's statements of its current expectations are forward-looking. These statements are subject to risks and uncertainties that could cause actual results and events to differ materially, including possible fluctuations in the demand for products and services, possible fluctuations in economic conditions affecting the industry and its customers, Synnex's ability to provide new products and services and to gain consumer acceptance for them, Synnex's ability to compete with existing and new competitors, and Synnex's ability to control its expenses and cash usage. Synnex undertakes no obligation to update forward-looking statements to reflect events or circumstances occurring after the issuance of Synnex's statements.

This Annual Review has been prepared by Synnex solely for the information of its shareholders. It is not investment advice or an offer or solicitation for the purchase or sale of any financial instrument. While reasonable care has been taken to ensure that the information contained herein is not untrue or misleading at the time of publication, Synnex makes no representation that it is accurate or complete. The information contained herein is subject to change without notice. Synnex and any of its officers and employees, to the extent not disclosed above and to the extent permitted by law, may have long or short positions or may otherwise be interested in any transactions or investments (including derivatives) referred to in this publication. Neither Synnex nor any of its officers or employees accepts any liability for any direct, indirect and/or consequential loss arising from any use of this publication or its contents. Copyright and database rights protection exists in this publication and it may not be reproduced, distributed or published by any person for any purpose without the prior express consent of Synnex. All rights are reserved.

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Synnex……The stagecoach that never stops

Leading distribution services provider

The leading 3C logistics and distribution services provider in Asia Pacific region

Globally unique business model

First of all, initiate quadruple channel operation model of sales, distribution, maintenance and CTO (Configuration To Order).This successful business model has been copied from Taiwan to Australia, New Zealand, Thailand and China/Hong Kong.

High value added distribution services provider

The solid logistic capabilities of Synnex provides upstream and downstream business partners with high value added services, so that while the tough back office processing including inventory management, maintenance and real-time production (CTO) are being taken care of by Synnex, customers from downstream can concentrate on sales operations; while the complex sales distribution operations are being taken care of by Synnex, suppliers from upstream can focus on R&D, production and branding. During the activity chain of product flow, the critical integration role that Synnex played in midstream is provision of high value-added services.

Non-stop positive growth cycle

Multi-brand franchise→ Increases customer numbers→ Provide high value-added back office logistics services→ Establish dense distribution network→ Multi-product franchise→ Expand economic scale→ Lower operation expense ratio →Expand market share→ Multi-brand and multi-product franchise→……….

Efficient back office operation mechanism

Tailor made, self-developed digital nervous system - ERP information management system.
Fast and convenient post-sales services network.
Efficient and quality automatic warehousing and distribution operation.
Tailor made real time production (CTO) center.
“Synnex’s e-City” has become a leading 3C content website in Taiwan.

Comprehensive business philosophy

Maximize shareholder value, improve information transparency.

Maximize profits for customers and suppliers.

Provide reliable and satisfactory products and services to end-users.

Cultivate employees and maintain labor-management cooperation.

Satisfy corporate social responsibility.

2016 Consolidated Financial Performance

	Unit: NTD
Item / Year	2015 2016 Increase(Decrease) (%)
Consolidated revenue(in bn)	322.1 342.7 6.4
Income before income tax(in bn)	3.74 5.73 53.2
Net Income attributable to owners of theparent(in bn)	3.19 4.88 53.0
EPS (after retroactive adjustment) (NTD)	1.91 2.92 52.9
Grossprofit margin(%)	3.6 3.5 (2.8)
Operatingexpense ratio(%)	2.4 2.3 (4.2)
Operatingincome ratio(%)	1.2 1.2 -
Return on Equity (ROE) (%)	7.2 11.4 58.3
Average Collection Days	52 51 (2.0)
Average InventoryTurnover Days	40 39 (2.5)
Average Payment Turnover Days	36 34 (5.6)

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Consolidated revenue
NT$ bn
↑ 6.4%
342.7
310.7 312.6 312.6 330.3 330.3 331.5 331.5 322.1 322.1
Return on Equity
↑ 58.3%
Net Income attributable to 7.2
owners of parent 5 8 5.3 NT$ bn
5
3.2
5.8
5.3
5.0 4.9
3.2
↑53.0%
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INDEX

Letter to shareholders	1
Synnex highlights	6
Operation highlights	38
Financial information	63
Financial status, results of operations & risk management	67

Letter to shareholders 1

Letter to shareholders

Dear shareholders:

The economy in 2016 was faltering. Advanced countries, including the U.S.A, Japan, and some of the European countries, did not perform as expected, and the growing dynamics of the emerging countries slowed down continuously. The uncertainty of the Brexit effect was another factor that not only impacted the financial market and global trading, but also affected the confidence of both consumers and investors. As the statistics of the Chung Hua Institution for Economic Research showed, the global economy only grew by 2.4% in 2016, declining to the lowest point since the economic crisis in 2008 and indicating that the global economy has been running into a “low-growth trap”.

The industries have been developed in a mature saturation period. Though new technologies, application, and products were introduced to the market continuously, most of them were at the phase of trial, incubation, or endurance. It takes about two or three years to popularize them to create substantial production value. The fierce fluctuation of the global exchange market and the sly and changeable political and economic situations all over the world brought about more difficulties in the operation of the business.

Facing the variation and challenge of the market environment, our global channel businesses spare no efforts and strive cautiously and conscientiously to drive the IC component business in the Greater China Region by developing new products and customers, adjusting and creating new business models, and integrating sales channels. The initiative to expand business opportunities creates a steady growth of the performance to near 100 billion NT dollars. The channel business in Australia and New Zealand was facing a challenge of economic depression and fierce fluctuation of the exchange rate. However, we take the lead to establish the “cloud business” system and make use of the intellectual logistic capability to enhance the cooperation relationship with the upstream and downstream manufacturers. These and the continuous development of new suppliers and services support us to consolidate the leading position in the local market. Facing the saturated channel business market in Taiwan, we are actively developing the mobile phone plan and technical service business and have brilliant operating results. We also speed up the development of new markets including smart consumer electronics, gaming, and Internet of Things (IoT) products to deploy new growing dynamics. The channel business in China has been facing a fast changing and challenging operating environment. However, the substantial transformation of the organization and system over the past three years as well as the streamlined structural operation model and analytical tool progressively improved our productivity, control capability, and operating know-how and create a growth rate of 10% in 2016. Though the channel business in Hong Kong and Macao declined in the consumer market, it grew substantially in the commercial and telecom fields and kept the leading position in the local market. For the joint venture business, in North America, India, Middle East, Thailand, and Indonesia created outstanding performance thanks to the teamwork. And I would like to take this opportunity to show my appreciation to all of you.

2 2016 Annual Review

Though the challenge is still tough and the industry needs two to three years to start the transformation and expansion, Synnex’s management team will root more deeply to enhance the strength and deploy our resources in new areas and business in 2017. We will spare no efforts to implement our operating philosophy of streamlined channels, overcome the vague and uncertain market environment, and embrace new opportunities in the transformation of the industry. I hope that all of you, the shareholders of Synnex, can give us a strong urge and encouragement.

Below are the key 2016 highlights for our company:

1. Revenue and profit

Synnex’s 2016 consolidated revenue was NTD342.7 billion, representing 6.4% growth from the NTD 322.1 billion in 2015. The net profit after tax was NTD 4.88 billion or grew by 53% in comparison with the NTD 3.19 billion in 2015. The EPS after tax was NTD 2.92, representing a growth rate of 53% in comparison with the NTD1.91 in 2015.

2. Concrete operating results

(1) Despite its market leading position in Taiwan, Australia, Hong Kong, Indonesia, Thailand, Synnex ranks as the second largest distributor in India and China. The channel business ranks as the third largest distributor in the USA. Overall, Synnex channel business operation ranks as the third largest distributor worldwide and the largest distributor in Asia Pacific region.
(2) We set up sales channel with the large-scale chain stores, reinforce strategic cooperation with online shopping channel, and minimize the stock management burden of the customers through Synnex systems and logistic capabilities in order to strengthen close cooperation relationship.
(3) We have run the mobile phone plan business in Taiwan for many years and started enjoying the positive results. It made a great contribution to the revenue and profit.
(4) The internal management system of the channel business in China was further optimized. The operating system and control capability was improved continuously and created substantial benefits to bring the business back to the direction of growth.
(5) The IC components business unceasingly enhanced its close cooperation with the upstream and downstream industries to provide more flexible and resilient industrial chain services and drive the steady growth of the business.
(6) We integrated the logistic resources of the Group and established a company of sole proprietorship to provide “intellectual logistics service” for both upstream and downstream partners and develop the logistics service business along the supply chain .

The 2017 important production and sales policy:

1. Expansion of the mobile phone plans business

We takes the leading position in the mobile phone plans business in Taiwan and a brand new mobile phone plans business system is under development for the year 2017 to improve the operating effectiveness and enhance the customer service.

Letter to shareholders 3

2. Expand new markets in the fields of smart consumer electronics, gaming, and IoT applications

The new fields and applications are currently at a phase of incubation. We will accelerate deployment and build up dynamics for the growth in the future.

3. Accelerating the development of the “cloud service”

We will invest more in the cloud service business. In addition to the well-established operating system in Australia, we will speed up the development of the markets in Taiwan, Hong Kong, Macao, China and Indonesia to grasp the opportunities that this new business model creates.

4. Integration of resources to develop technical service business

We will integrate the technical service resources and operation systems of the Group to develop a technical service business of high effectiveness. China will be the core market of the development.

5. Acceleration of multiple and flexible logistics service business

“Intellectual logistics service” is one of the most important core capabilities of Synnex. In addition to creating the competitive advantages in the channel business, the logistics service itself is a business of great potential in the future. We will speed up the development of this business in 2017.

6. Accelerating the operation management model R&D and innovation and secure the market competitive advantage To maintain the competitive advantage and cope with the ever-changing market, an ongoing innovation on business and technology management is necessary. In recent years, Synnex has been working on setting up a planning & management system at its headquarters that is responsible for design of operations model, planning of operations mechanism, analysis of operations and management of operational quality, while expanding software R&D team to enhance Synnex’s software competitiveness. In 2017, the team will develop innovative business management technology and enhance core competences and identify breakthrough opportunities for the Company.

Future Development Strategies

To pursue continuous and stable growth in this rapidly changing market environment full of uncertainties, Synnex will follow a three point strategy (see the figure below), made up of multi-product, multi-channel and multi-nation strategies. Through these strategies, we aim to create greater opportunities while effectively diversifying operational risks.

2016 Annual Review

Synnex’s development strategy

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Multi-Territory
Multi-Products
Multi-Category
Multi-Brand
Core
Business Multi-Channels
Mechanis
IC Components
Multi-Marketplaces Taiwan Channel
Hong Kong IT
China Channel
Australia Telecom
New Zealand Channel
Thailand Consumer
Electronics Channel
India
Middle East
Indonesia
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Impact of External Competitive Environment, Regulatory Environment, and Macroeconomic Environment

In terms of the external competitive environment, the market has been constantly changing and the service model has been diversified for years. However, the Company has been continuously researching and developing an innovative business model, design, and planning; also, implementing business analysis and quality management in response to such changing market environment.

In terms of the regulatory environment, the Company has always paid close attention to and grasped domestic and foreign policies and laws that may affect the Company’s finance and business, and adopted appropriate emergency measures to safeguard the interests of the Company. With the frequent global economic and trade exchanges and the increasing fiscal pressure faced by each nation, the “Based Erosion and Profit Shifting (BEPS)” issues had caused the government of each nation to formulate relevant laws and regulations strictly. However, it has little impact on the Company since the Company has always operated its business in compliance with the law and regulations of each nation.

In terms of the macro-economic environment, the Company has a large-scale business operation in Mainland China. Although cross-strait relations may become uncertain, it is with little impact on the channel business operation. The Company’s market development strategy is focusing on a multinational business market that will allow the Company to expand the market and reduce business risks arising from operating in a single nation.

Letter to shareholders

Last but not least, we would like to offer our sincere gratitude to our shareholders for their support and encouragement, and we expect further guidance and support in the coming year. With consistent business philosophy and innovation, the management team is committed to achieving excellence.

Best regards,

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6 2016 Annual Review

Synnex highlights

I.	Company profile .................................................................................................................................................... 7
1)	Milestone ................................................................................................................................................................. 7
2)	Awards ..................................................................................................................................................................... 9
II.	Corporate Governance Report ............................................................................................................................ 11
1)	Organization ........................................................................................................................................................... 11
2)	Information on directors, supervisors, presidents, senior executives of divisions & department management ...... 14
3)	Implementation of Corporate Governance ............................................................................................................. 20
4)	Changes in shareholdings of directors, managers, and principal shareholders ....................................................... 32
III.	Capital and shares ............................................................................................................................................... 33
1)	Category of shares ................................................................................................................................................. 33
2)	Shareholder structure ............................................................................................................................................. 33
3)	Distribution of shareholding .................................................................................................................................. 33
4)	Major shareholders ................................................................................................................................................ 33
5)	Market price per share, Net assets per share, earning per share and dividends ...................................................... 34
6)	The policy and implementation of dividends ......................................................................................................... 34
7)	Uncompensated distribution of shares and its impact on company operation and EPS ......................................... 35
8)	Information on employee bonus and compensation for directors and supervisors ................................................. 36
9)	Buy back shares: None .......................................................................................................................................... 36
IV.	Issuance of global depositary receipts, bonds, preferred shares and employee stock option ......................... 37
1)	Global depositary receipts...................................................................................................................................... 37
2)	Status of employee stock option: None .................................................................................................................. 37
3)	Preferred shares: None ........................................................................................................................................... 37
4)	Corporate bonds: None .......................................................................................................................................... 37

Synnex highlights 7

Synnex highlights

I. Company profile

1) Milestone

Setup date: September 12, 1988	Setup date: September 12, 1988
Year	Important significance
1988	▪ Synnex Technology International Corporation was established with authorized capital of NTD2 hundred million, and Matthew Feng-Chiang Miau served as chairman and Evans S.W. Tu served as president. ▪ MIS operationsreachedreal-timerequirement.
1989	▪ Establish LEMEL brand. ▪ NTD 20 million was spent to purchase large mainframe computers and accessories to meet the needs of further computerization. ▪ EstablishedKaohsiung andTaichung branches to expand southand central Taiwanbusiness.
1990	▪ Confirmed development information and communicate channel business, determined to adopt “open channel” operation, first initiating triple channel operation model of sales, distribution, and maintenance.
1991	▪ The computer material management system won “The 1stoutstanding information application awards” that conferred byInstitute for Information Industryand accredited byallpanel ofjudges.
1992	▪ Established logistics delivery truck fleet to provide rapid delivery services of “half-day delivery” to customers in Taipei region.
1993	▪ Linkuo logistics center officially opened. ▪ Established logistics delivery fleet in central and south region to provide rapid delivery services to customers in south and central region. ▪ Introduced “small quantity, various type and one stop shopping" to the resellers to lower inventory risk for the resellers and enhanced purchasing convenience. ▪ Introduced LEMEL PC
1994	▪ Provided resellers with industry-leading "four half-day" (two days) rapid maintenance services ▪ Launched monthly journal of “Synnex’s shoppingmall” which had become the resellers’ must-buytools.
1995	▪ Shares officiallylisted on TaiwanStock Exchange that was thefirstlisted distributor in Taiwan.
1996	▪ Largest increase in stockprice in 362 listed companies in the first halfyear of 1996.
1997	▪ Provide rapid maintenance services of “repair tonight, retrieve the day after tomorrow” to customers. ▪ Communication resellers had reached 3000. ▪ Merge Laser Computer Ltd. (name changed to Synnex Technology International (HK) Ltd. in 2005) to expand itsreachtoHongKong and China.
1998	▪ The 2nd warehouse with highly automated warehousing operations in Linkou logistics center completed and started operation. ▪ Real time production center (Configuration-To-Order) of PC has completed, it is the first tailor made real time production line of PC for customers in Taiwan. ▪ MergeAustraliansubsidiary to expandreachtoAustralian market.
1999	▪ Establish “cellular phone rapid repair services” throughout Taiwan to provide customers with “30 minutes cellular phone maintenance services.” ▪ Merge Compex Ltd. In Thailand (name changed to Synnex (Thailand) Co., Ltd. in 2002 and changed to Synnex (Thailand) Public Company Ltd. in 2008) to expand its reach to the Thailand market. ▪ The annual turnover of communication business has exceeded NTD10 billion, become one of the three major business of Synnex alongwith information and electronics components business.
2000	▪ Provide customers with “cellular phone 2-year warranty” services. ▪ The third warehouse in Linkuo logistics center completed and started operation; it is an automatic guided warehouse. ▪ Launch “Synnex e-City” website and “Dedicated website for Synnex resellers” to develop electronic marketing and electronic services. ▪ Considering Synnex’s valuable management experience, Shang-Xun Culture Co., Ltd. decided to publish “The stagecoachthatneverstops”.
2001	▪ The Taichung logistics center with 7,300 pings (equal to 24,131.61 square meters (3.3057*7300)) started operation; its logistics capacity is 1.3 times of the Linkuo logistics center. ▪ The 5,200 ping (17,189.64 square meters) Logistics center in Australia officially started operation. ▪ With “cellular phone rapid maintenance center” upgraded to “Synnex maintenance center,” Synnex has expanded its maintenance services to all 3C products sold. ▪ Integrate maintenance center, maintenance and collection center and resellers into “Synnex maintenance network” to become the densest IT and Telecom maintenance network and also provide maintenance services to products not sold by Synnex. ▪ DevelopLogistics serviceProvider(LSP)

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Year	Important significance
2002	▪ The 2,700 ping (8,925.39 square meters) logistics center in Thailand started operation. ▪ The annual visitors of “Synnex e-City” has reach 9.5 million, its content has been referenced by 120 websites, the ICP (Internet Content Provider) role has been formed. ▪ Conduct stock swap strategy with Bestcom Infotech Corporation to cultivate IT commercial market in Taiwan.
2003	▪ Logistics center in Australia and Thailand has imported CTO customize real-time production mechanism to provide customers with customize PC services. ▪ Use the outstanding services of “Synnex products” to develop brand marketing. ▪ The consolidated turnover has exceeded NTD100 billion and reach 108.2 billion.
2004	▪ Merged and acquired Yongkang Enterprises and Teampo Tech Co., Ltd. to expand component and parts business scale. ▪ Acquire shares in India’s Redington Group to expand its reach to India, Middle-East and Africa, the global distribution channel layout has been formed.
2005	▪ Shanghai logistics center started operation. ▪ Establish New Zealand subsidiary.
2006	▪ The operation of Linkuo logistics center was officially launched; it has doubled the operation capacity. ▪ Establish consumer electronics business, it is another core business after components, IT and Telecom.
2007	▪ Obtained Nokia cellular phone’s exclusive distribution rights in China region, it has officially opened the overseas market for communication business. ▪ Thailand logistics center has imported automated warehousing operation.
2008	▪ Plans to establish logistics center in China has been developed smoothly, the establishment of Shanghai 2nd period, Chengdu, Nanjing, Beijing logistics center has been activated. ▪ Components business group has competed the comprehensive update of computer system; the operation efficiency of components has been enhanced.
2009	▪ Logistics centers in Nanjing, Chengdu, Beijing and Shengyang officially started operation. ▪ Consolidated turnover has exceeded NTD200 billion and reach NTD220.7 billion.
2010	▪ Tianjin and Hangzhou logistics centers officially started operation. ▪ India’s Redington Group acquired stakes in Turkey’s second largest information distributor Arena, opening the door to east Europe. ▪ Set up a joint venture with Indonesia’s largest computer group Metrodata Electronics, Synnex has officially established its presence in Indonesian market and marks another foray in Asia’s emerging market.
2011	▪ The Logistics Center in Xian and Qingdao City were officially opened. ▪ Consolidated revenue has exceeded NTD300 billion and reached NTD312.6 billion.
2012	▪ Logistic centers in Suzhou, Guangzhou, Wuhan and Zhengzhou are officially in service. ▪ A comprehensive computer system update was completed in Australia to enhance effectiveness of operational management.
2013	▪ The consolidated revenue reached record high at NTD330.3 billion.
2014	▪ Sydney (Australia) logistic center officially started operation. ▪ Hefei (China) logistic center officially started operation. ▪ Xiamen(China)logistic centerofficially started operation.
2015	▪ Nanchang (China) logistic center officially started operation. ▪ Jinan (China) logistic center officially started operation. ▪ Harbin(China)logistic center officiallystarted operation.
2016	▪ Changsha (China) logistic center officially started operation. ▪ Ningbo (China) logistic center officially started operation. ▪ Acquisition of Bestcom Infotech Corporation was completed to enhance its future revenues, technical services, and business opportunities for the commercial network brand agency. ▪ Synlogics Service Corp. was established to expand the logistic business.

Synnex highlights 9

2) Awards

Year	Awards
1991	▪ The computer material management system won “the 1st outstanding information application awards” that conferred byInstitute for Information Industryand accredited byallpanel ofjudges.
1998	▪ Both Chairman Matthew Feng-Chiang Miau and President Evans S.W. Tu have been voted by senior journalists in the industry as “10 most important people in the development history of information industry in Taiwan.” ▪ Evans S.W. Tu has been voted by the fund managers in Taiwan as one of five “most worthwhile professional managers in the next fiveyears.”
1999	▪ Synnex has been listed byAsiamoneyas one of top50 “Best Managed Companies” in Asia-Pacific region.
2000	▪ The Thailand subsidiary has been named by Computer Association of Thailand as “Thailand’s best distributor” and “Best marketing performance award.”
2001	▪ Granted one of 15 companies won Microsoft’s Windows Embedded Partner Gold Program.
2002	▪ Ranked #8 among 2001 Taiwan’s top 500 service companies in Commonwealth Magazine and Business Weekly. ▪ Ranked #4 among the top 100 IT Company listing in Business Week magazine. ▪ Computer Weeklyreported that Synnex is considered by3C retailers to be the best channel distributor.
2003	▪ Synnex is ranked by Interbrand as “Taiwan Top 10 Global Brands” of the 10 brands; Synnex is the only brand in the service sector. ▪ Voted by industry, official and university professionals who were invited by CommonWealth Magazine and Accenture as “Outstanding service.” ▪ Named by CommonWealth Magazine as “Benchmark Enterprise.” ▪ Voted by analysts and fund managers of major global financial institutions as the third “Taiwan’s best managed company” in Asiamoney Magazine. ▪ Ranked #56 among the top 100 IT Company listing in Business Week Magazine. ▪ Ranked byBusiness Weeklyas the 2002 largest IT/Telecom/IC distribution servicesprovider in Taiwan.
2004	▪ Ranked by new Micro Electronics magazine as “Top 10 outstanding electronics component distributor” in 2004 in Taiwan. ▪ Ranked #36 among Top 1000 Cross-Strait Listing Firms by Business Weekly in 2003. ▪ Ranked #7 among 500 service companies listing in Business Weekly in Taiwan in 2003. ▪ The subsidiaryin Australia was ranked #20 as “50 Companies with Good Asset Use” byBRW magazine.
2005	▪ Ranked #8 in “Top 10 Taiwan Global Brands” by Interbrand. ▪ Ranked #11 among 500 service companies listing in Business Weekly in Taiwan in 2004. ▪ Named by CommonWealth Magazine as “Benchmark Enterprise.” ▪ Ranked #11 among500 service companies listingin Business Weeklyin Taiwan in 2004.
2006	▪ Ranked #15 among 500 service companies listing in CommonWealth Magazine in Taiwan in 2005. ▪ Ranked #7 among 500 service companies listing in Business Weekly in Taiwan in 2005. ▪ Named by CommonWealth Magazine as “Benchmark Enterprise.” ▪ Awarded “Gold sales award” by China’s China Marketing magazine. ▪ Awarded by China’s “Computer products and distribution” as gold list award of 10 outstanding distributors. ▪ Ranked #2 in distributors amongthe top100 IT companylistingin Computer Business Information
2007	▪ Named by CommonWealth Magazine as “Most Admired Company” in 2007. ▪ Ranked #7 among 500 service companies listing in CommonWealth Magazine in Taiwan in 2006. ▪ Ranked #1 by among electronics distributors and #73 among Top 1000 Cross-Strait Listed Firms by Business Weekly in 2006. ▪ Ranked #11 in “Taiwan TopGlobal Brands” byInterbrand.
2008	▪ Named by CommonWealth Magazine as “Most Admired Company” in 2008. ▪ Ranked #6 in a 2007 survey of Taiwan's top 500 service companies carried out by Business Weekly. ▪ Ranked #24 among “Top 50 Chinese consumer brands” by Business Today in 2008. ▪ Ranked #9 in “Taiwan Top Global Brands” by Interbrand. ▪ Evans S.W. Tu was awarded byNational Chiao TungUniversityas Top50 Most influential Alumni.”
2009	▪ Ranked #9 in “Taiwan Top Global Brands” by Interbrand. ▪ Ranked #7 in a 2008 survey of Taiwan’s top 500 service companies carried out by Business Weekly. ▪ The seventh consecutive years named by CommonWealth Magazine as “Most Admired Company” in 2008. ▪ Ranked #8 in “Investor Satisfaction” among “Taiwan Technology Best 100 Companies” by Business Next in 2008.

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Year	Awards
2010	▪ Ranked #9 in “Taiwan Top Global Brands” by Interbrand. ▪ The eighth consecutive years named by CommonWealth Magazine as “Most Admired Company” in 2010. ▪ Ranked #6 in a 2009 survey of Taiwan’s top 500 service companies carried out by Business Weekly; while ranked #1 in IT, Telecom and IC distributors. ▪ Turnover ranked #3 among “Top 50 Cross-Strait Listed Distributors” by Business Today in 2010. ▪ Ranked #43 among “Taiwan Technology Best 100 Companies” by Business Next in 2010, which has been progressed by 35 in the ranking when comparing to 2009. ▪ Ranked #37 among“The Tech 100” byBloombergBusinessWeek in 2010.
2011	▪ Ranked #9 in “Taiwan Top Global Brands” by Interbrand with a brand value of USD$317 million. ▪ Awarded with the “Taiwan’s 100 major brands” by the Ministry of Economic Affairs. ▪ The ninth consecutive years named by CommonWealth Magazine as “Most Admired Company” in 2011. ▪ Ranked #6 in a 2011 surveyof Taiwan top500 service companies carried out byCommonWealth Magazine.
2012	▪ Ranked #8 in “Taiwan Top Global Brands” by Interbrand with a brand value of USD$339 million. ▪ The tenth consecutive years named by CommonWealth Magazine as “Most Admired Company” in 2012. ▪ Ranked #6 in a 2012 survey of Taiwan’s top 500 service companies carried out by CommonWealth Magazine;also,ranked in the 7thplace of the “Most Profitable Service Companies.”
2013	▪ Ranked #9 in “Taiwan Top Global Brands” by Interbrand with a brand value increased by 2% YoY to USD$345 million. ▪ The 11th consecutive years named by CommonWealth Magazine as “Most Admired Company” in 2013. ▪ Ranked byCommonWealth Magazine as 6th within service industryin the top2000 companies.
2014	▪ Ranked #9 in “Taiwan Top Global Brands” by Interbrand with a brand value increased to USD$345 million. ▪ The 12th consecutive years named by CommonWealth Magazine as “Most Admired Company” in 2014. ▪ Ranked byCommonWealth Magazine as 6th within service industryin the top2000 companies.
2015	▪ Ranked #11 in “Taiwan Top Global Brands” by Interbrand with a brand value increased to USD$337 million. ▪ Ranked byCommonWealth Magazine as 5th within service industryin the top2000 companies.
2016	▪ Mr. Evans S.W. Tu was chosen as a “Taiwan Top 50 Executive” by “The Harvard Business Review.” ▪ Synnex as the unique channel service brand won the “Taiwan Top 20 Global Brand Awards” for 14 consecutiveyears with a brand value of USD309 million.

Synnex highlights 11

II. Corporate Governance Report

1) Organization

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2016.12.31
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 Group Structure

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Synnex Technology International Corp. 聯強國際 ( 股 ) 公司
Synnex Global Ltd.Synnex Global Ltd. 通達運籌服務 Synlogics Service Corp. ( 股 ) 公司 E-Fan Investments Corp. 伊凡投資 ( 股 ) 公司 Seper Marketing Corp. 嘉榮行銷 ( 股 ) 公司群環科技 Bestcom Infotech Corp. ( 股 ) 公司及其子公司
持股比率： 100% 100% 持股比率： 100% 100% 持股比率： 100% 100% 持股比率： 100% 100% 持股比率： 100% 100%
Mauritius Ltd.Synnex DevelopmentsPeerLtd. InvestmentsKing’s EyeLtd. VanguardTrade Synnex ChinaHoldings Ltd.
Global Ltd.
100% 100% 100% 100% 100%
持股比率持股比率持股比率持股比率持股比率
： 100% ： 100% ： 100% ： 100% ： 100%
(India) Ltd. ： Redington 持股比率 23.58% 23.58% Synnex Corp. ：持股比率 10.31% 10.31% 聯翔科技有限公司持股比率 (Shenzhen) Technology ： Lianxiang Co., Ltd. ( 深圳 100% 100%) Holdings Ltd. 及其子公司 Computer 持股比率 subsidiary Computer ： Holdings Ltd. and Laser100% Laser 100% Electronics Hong Kong 持股比率： Synnex100% Ltd.100% 持股比率 Asia Ltd.Syntech: 100%100% 持股比率 AustraliaPty. Ltd. ： Synnex100% 100% Ideal Ltd. 持股比率： Fortune100% 100% 持股比率 Thinking ： GoldenLtd.100%100% New Zealand 持股比率： Synnex100% Ltd.100% PT. Synnex 持股比率 MetrodataIndonesia50.30%50.30% : Company Ltd. 及其子公司： (Thailand) 持股比率 (Thailand) subsidiary Company SynnexLtd. and 40.00% Synnex PublicPublic 40.00% (Investments (China) Ltd. 聯強國際中國有限公司持股比率： Synnex 100% 100%) 投資
聯強國際貿易 Synnex 聯強國際 Synnex 聯強國際 Synnex 聯強國際 Synnex 聯強國際 Synnex 聯強國際 Synnex 聯強國際 Synnex Synnex 聯強國際聯強國際 Synnex 聯強國際 Synnex 聯強國際 Synnex 聯強國際 Synnex 聯強國際 Synnex
International Technology ( 中國 ) ((Beijing) 北京 Ltd. ) (Shangha) ( 上海 Ltd. ) ((Chengdu) 成都 Ltd. ) 科技 ( 南京 (Nanjing) Ltd. ) 電子 (Shenyang) ( 瀋陽 Ltd. ) 科技 ( 天津 (Tianjin) Ltd. ) 科技 (Hangzho( 杭州 u) Ltd. ) 電子 (Qingdao) ( 青島 Ltd. ) 科技 (Guangzhou( 廣州 ) Ltd. ) 科技 ( 西安 (Xi’an) Ltd. ) 科技 ( 蘇州 (Suzhou) Ltd. ) 科技 ( 武漢 (Wuhan) Ltd. ) 科技
Corporation 有限公司）有限公司有限公司有限公司有限公司有限公司有限公司有限公司有限公司有限公司有限公司有限公司有限公司
持股比率 100% 持股比率 100% 持股比率 100% 持股比率 100% 持股比率 100% 持股比率 100% 持股比率 100% 持股比率 100% 持股比率 100% 持股比率 100% 持股比率 100% 持股比率 100% 持股比率 100%
： 100% ： 100% ： 100% ： 100% ： 100% ： 100% ： 100% ： 100% ： 100% ： 100% ： 100% ： 100% ： 100%
聯強科技發展 Technology DevelopmeSynnex ( 聯強國際濟南 Synnex (Jinan) Ltd. ) 電子 ((Zhengzho 聯強國際鄭州 Synnex u) Ltd. ) 科技 ((Changsha) 聯強國際長沙 Synnex Ltd. ) 科技 ( 聯強國際寧波 (Ningbo) Synnex Ltd. ) 科技 ( 聯強國際合肥 Synnex (Hefei) Ltd. ) 科技 ((Nanchang ) 聯強國際南昌 Synnex Ltd. ) 電子 ( 哈爾濱聯強國際 (Harbin) Synnex Ltd. ) 科技 ( 聯強國際重慶 (Chongqing) Synnex Ltd. ) 科技 ( 聯強國際廈門 (Xiamen) Synnex Ltd. ) 科技育德(上海) Warehouse (Shanghai) 倉儲 Yude 科技 Technology Information 毅都信息 Yi Du ( 上海 )
有限公司 nt Ltd. 有限公司有限公司有限公司有限公司有限公司有限公司有限公司有限公司有限公司有限公司 Co., Ltd. (Shanghai) 有限公司 Co., Ltd.
持股比率： 100% 100% 持股比率 100% 持股比率 100% 持股比率 100% 持股比率 100% 持股比率 100% 持股比率 100% 持股比率 100% 持股比率 100% 持股比率 100% 持股比率 80% 持股比率 100%
： 100% ： 100% ： 100% ： 100% ： 100% ： 100% ： 100% ： 100% ： 100% ： 80% ： 100%
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12 2016 Annual Review

Basic Information of group companies

2016.12.31 Unit: thousand

Company name	Date established	Location		Capital	Main business orproduction types
Seper Marketing Corp.	1990.02.23	Taipei	NTD	1,000	Sales of IT/Telecom products in Taiwan
E-Fan Investments Corp.	2001.06.28	Taipei	NTD	225,000	Investment holding company
Synlogics Service Corp.	2016.10.17	Taipei	NTD	50,000	Provision of warehousing, distribution services in
					Taiwan
Bestcom Infotech Corp. and its subsidiaries	1987.01.13	Taipei	NTD	1,032,033	Sales of IT products in Taiwan
Synnex Global Ltd.	1996.12.27	BVI	US$	548,250	Investment holding company
Synnex Mauritius Ltd.	2004.12.02	Mauritius	US$	24,000	Investment holding company
Peer Development Ltd.	1996.12.27	BVI	US$	31,300	Investment holding company
Synnex China Holdings Ltd.	2002.07.19	BVI	US$	100,200	Investment holding company
King’s Eye Investments Ltd.	1997.01.23	BVI	US$	62,477	Investment holding company
Trade Vanguard Global Ltd.	2014.04.15	BVI	US$	100,000	Investment holding company
LianXiang Technology (Shenzhen) Ltd.	2011.05.26	Shenzhen, China	US$	200	Sales of IC components in China region.
Synnex Investments (China) Ltd.	2007.11.05	Shanghai, China	US$	200,000	Investment holdings company in China
Synnex (Beijing) Ltd.	2002.10.11	Beijing, China	US$	9,000	Production and sales of IT/Telecom products in China
Synnex (Shanghai) Ltd.	2002.10.15	Shanghai, China	US$	22,000	Production and sales IT/Telecom products in China
Synnex Distributions (China) Ltd.	2005.11.25	Shanghai, China	US$	153,000	Production and sales of IT/Telecom products in China
Synnex (Chengdu) Ltd.	2006.11.06	Chengdu, China	US$	5,000	Production and sales of IT/Telecom products in China
Synnex (Nanjing) Ltd.	2006.12.20	Nanjing, China	US$	5,000	Production and sales of IT/Telecom products in China
Synnex (Shenyang) Ltd.	2008.08.19	Shengyang, China	US$	3,000	Production and sales of IT/Telecom products in China
Synnex (Tianjin) Ltd.	2009.04.21	Tianjin, China	US$	4,500	Production and sales of IT/Telecom products in China
Synnex (Hangzhou) Ltd.	2009.11.25	Hangzhou, China	US$	5,000	Production and sales of IT/Telecom products in China
Synnex (Qingdao) Ltd.	2010.03.04	Qingdao, China	US$	5,000	Production and sales of IT/Telecom products in China
Synnex (Guangzhou) Ltd.	2010.03.18	Guangzhou, China	US$	12,000	Production and sales of IT/Telecom products in China
Synnex (Xi’an) Ltd.	2010.03.24	Xi’an, China	US$	4,000	Production and sales of IT/Telecom products in China
Synnex (Suzhou) Ltd.	2010.06.17	Suzhou, China	US$	6,000	Production and sales of IT/Telecom products in China
Synnex (Wuhan) Ltd.	2010.12.08	Wuhan, China	US$	5,000	Production and sales of IT/Telecom products in China
Synnex (Jinan) Ltd.	2010.12.06	Jinan, China	US$	5,000	Production and sales of IT/Telecom products in China
Synnex (Zhengzhou) Ltd.	2011.01.07	Zhengzhou, China	US$	5,000	Production and sales of IT/Telecom products in China
Synnex (Changsha) Ltd.	2011.03.23	Changsha, China	US$	4,000	Production and sales of IT/Telecom products in China
Synnex (Ningbo) Ltd.	2011.06.15	Ningbo, China	US$	4,000	Production and sales of IT/Telecom products in China
Synnex (Hefei) Ltd.	2011.07.15	Hefei, China	US$	6,100	Production and sales of IT/Telecom products in China
Synnex (Nanchang) Ltd.	2011.08.24	Nanchang China	US$	4,000	Production and sales of IT/Telecom products in China
Synnex (Harbin) Ltd.	2012.03.26	Harbin China	US$	5,000	Production and sales of IT/Telecom products in China
Synnex (Chongqing) Ltd.	2012.05.09	Chongqing China	US$	600	Production and sales of IT/Telecom products in China
Synnex (Xiamen) Ltd.	2012.05.07	Xiamen China	US$	6,000	Production and sales of IT/Telecom products in China
Yude (Shanghai) Warehouse Co., Ltd.	2012.06.18	Shanghai, China	RMB	2,400	Provision of warehousing services in China
Yi Du Information Technology (Shanghai) Co., Ltd.	2015.04.02	Beijing, China	RMB	1,000	Production and sales of IT/Telecom products in China
Synnex Technology Development (Beijing) Ltd.	2007.12.06	Beijing, China	RMB	50,000	Production and sales of IT/Telecom products in China
Laser Computer Holding Ltd. and subsidiary	2001.09.06	BVI	US$	36,850	Sales of IT products in Hong Kong/China region.
Synnex Electronics Hong Kong Ltd.	1993.09.09	Hong Kong	US$	300	Sales of IC components in Hong Kong / China region.
Syntech Asia Ltd.	2011.03.11	Hong Kong	US$	300	Sales of IC components in Hong Kong / China region.
Synnex Australia Pty. Ltd.	1991.06.06	Australia	AUS	33,250	Sales of IT products in Australia.
Fortune Ideal Ltd.	2000.09.04	Hong Kong	HKD	14,500	Operate Australia’s logistics center.
Golden Thinking Ltd.	2010.02.19	Hong Kong	HKD	28,000	Operate Australia’s logistics center.
Synnex New Zealand Ltd.	2005.07.18	New Zealand	NZD	1,500	Sales of IT products in New Zealand.
PT. Synnex Metrodata Indonesia	2000.05.23	Indonesia	IDR	300,000,000	Production and sales of IT/Telecom products in
					South-East Asia
Synnex (Thailand) Public Company Ltd. and	1988.04.05	Thailand	THB	770,329	Sales of IT products in Thailand.
subsidiary *
Redington (India) Ltd.*	1961	India	INR	799,697	Sales of IT/Telecom products in India, Middle East and
					Africa
Synnex Corporation*	1980	USA	USD	41	Sales of IT products in Europe, US and Japan.

Adopt equity method.

Synnex highlights 13

Organization and responsibility

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Remuneration Committee Board of Directors
Internal Audit Office
Audit Committee Chairman
President Office
President & CEO
Human Resources Planning &
Management Div.
Software Development Center Business Planning & Management Div.
Logistics Planning & Management Div.
Finance Planning & Management Div.
Information & Communication Risk & Management & Planning
Network Center Technical Service Planning &
Management Div.
Financing Control Center Group Product Controlling Div.
Overseas Business Management Div.
Group Accounting Center
Property Management center
Component Taiwan Bestcom China Hong Kong Australia Indonesia Thailand India America
Business Business Business Business Business Business Business Business & Business
Unit Unit Unit Unit Unit Unit Unit Unit Middle East Unit
Business
Unit
Product Product Sales Field Technical Logistic Back Office
Marketing Controlling Application Service Business Unit Operation
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14 2016 Annual Review

Description of responsibilities

Board of Directors
Internal Audit Office: Evaluate and improve the efficiency of risk
management, control, governance, and achieve the performance and
quality of the designated mission.
Remuneration Committee: Responsible for the overall remuneration
system and total prize money review.
Audit Committee: Responsible for overseeing the effective
implementation of the Company’s financial statements, compliance
with related laws and regulations, internal control, and risk control.
President office
Human Resources Planning & Management Div.: Responsible for
development, planning and training of overall human resources.
Business Planning & Management Div.: Responsible for overall
business operation planning, management analysis and process planning.
Logistics Planning & Management Div.: Responsible for overall
operation planning, management analysis and process planning.
Finance Planning & Management Div.: Responsible for overall financial
analysis, planning and management.
Risk Management & Planning: Responsible for the overall accounting
and legal system development, planning, and management
Technical Service Planning & Management Div.: Responsible for
planning of overall technical service and operation.
Group Product Controlling Div.: Responsible for the overall product
purchase, sales, and inventory operating procedure planning and
strategy formulation.
Overseas Business Management Div.: Responsible for planning, support
and management of overseas affairs.

Software Development Center
Responsible for planning, integration and maintenance of overall ERP
system.
Information & Communication Network Center
Responsible for the procurement, management, and maintenance of IT
and telecom equipment.
Financing Control Center: Responsible for centralized control of the
finance for the Group.
Group Accounting Center: Responsible for the financial, tax and
accounting affairs of the Group.
Property Management center: Responsible for planning and setup of
the Group's logistic centers as well as property management.
Product Marketing: Responsible for planning and implementation of
products’ operational strategies.
Product Controlling: Responsible for planning and implementation of
products’ purchase, sales and inventory strategies.
Sales:Responsible for product sales.
Field Application: Responsible for pre-sale services for product R&D
and technology application support.
Technical Service: Responsible for technical support service before and
after the sale.
Logistics Business Unit: Responsible for operational implementation of
warehousing, distribution and post-sales maintenance services.
Back office operation
Finance: Responsible for financial management and fiscal tax
accounting.
Credit: Responsible for accounts receivable management and credit
collection processing.
Customer Service: Responsible for post-sales customer services.
Personnel & Administration: Responsible for planning and
implementation of human resource systems.

2) Information on directors, supervisors, presidents, senior executives of divisions & department management

Information of directors and supervisors

2017.04.09

Title Name Nationality or registration site Elected date	Tenure	Date first	Shareholding when elected Current shareholding Spouse/Minor children Current shareholding	Shareholding under the names of otherparties	Note
	(Year)	elected	Shares % Shares % Shares %	Shares %

Chairman/ Matthew Feng-ChiangMiau USA 2015.6.12	3	1988.9.1	30,417,147 1.91 31,812,004 1.91 - -	- -
Director/ Evans S.W. Tu ROC 2015.6.12	3	1988.9.1	34,434,649 2.17 36,156,381 2.17 1,587,245 0.10	- -
Director/ Yang, Hsiang-Yun ROC 2015.6.12	3	2015.6.12	216,381,957 13.62 227,201,054 13.62 * -	* -	Representative of MiTAC Inc.
Director/ Chou,T.C. ROC 2015.6.12	3	2015.6.12	216,381,957 13.62 227,201,054 13.62 * -	* -	Representative of MiTAC Inc.
Independent Director / Yungdu Wei ROC 2015.6.12	3	2012.6.13	- - - - - -	- -
Independent Director / Yojun Jiao ROC 2015.6.12	3	2012.6.13	- - - - - -	- -
Independent Director / AnpingChang ROC 2015.6.12	3	2012.6.13	- - - - - -	- -

*It is the shareholding of the corporate shareholder, and the shareholding of representative is zero.

Synnex highlights 15

Title/Name			Other officers, directors, or supervisors
	Major experience and education	Services concurrently with the Company and other company	who are the spouse or 2nd degree relatives
			Title Name Relation
Chairman Matthew Feng-Chiang Miau	MBA of Santa Clara University (USA) Electrical Engineering BA of the University of California at Berkeley	Chairman of Synnex Technology International Corp. Chairman of Lien Hwa Industrial Corp Chairman of Union Petrochemical Corp. Chairman of MiTAC Holdings Corp. Chairman of MiTAC Inc. Director of Getac Technology Corp. Director of MiTAC Information Technology Corp. Director of Lien-Hwa Industrial Gases Co., Ltd. Director of Winbond Electronics Co., Ltd. Director of Taita Chemical Company, Limited. Director of Asia Polymer Corp. Director of Synnex Corp. Independent director of Cathay Financial Holdings Independent director of Cathay Life Insurance Independent director of Cathay Century Insurance Independent director of Cathay United Bank.	None None None
Director Evans S.W. Tu	President of Micro Electronics Corp. Vice-president of MiTAC Inc. Electrical and Control Engineering Degree in National Chiao Tung University	President of Synnex Technology International Co., Ltd. Supervisor of MiTAC Inc. Chairman of Seper Marketing Corp. Director of Bestcom Infotech Corp. Director of Synlogics Service Corp. Supervisor of MiTAC Information TechnologyCorp.	None None None
Director Yang, Hsiang-Yun	Special assistant in MiTAC International Corp. CFO of MiTAC International Corp. National Taiwan University MBA	Director of Health Food Co., Ltd. Chairman of Lian-Yuan Investment Co., Ltd. Director of Tsu Fung Investment Co., Ltd. Supervisor of LEF Aerospace Industry Corp. Supervisor of MiTAC Inc. Supervisor of MiTAC Information Technology Corp Supervisor of MiTAC Computing Technology Corp.	None None None
Director Chou, T.C.	Investment special assistant to chairman, MiTAC International Corp. Ph. D. of engineering, Rutgers, The State University of New Jersey	Supervisor of Getac Technology Corp. Supervisor of Waffer Technology Corp. Supervisor of Intech Biopharm Corp. Director of MiTAC Inc. Director of MiTAC Information Technology Corp. Director of National Aerospace Fasteners Corporation	None None None
Independent Director / Yungdu Wei	Acting Director of the System Board Internal Audit of Georgia University Dean of Finance & Accounting School of Armstrong College of Georgia Senior auditor of Deloitte Haskins & Sells Director of Auditing Department, Deloitte and Controller President and Honorary President of Deloitte Director of Deloitte International Organization Director of Deloitte China Chairman of United Way of Taiwan Director of Child Welfare League Foundation U.S. Internal Auditor CPA, Georgia, USA CPA, R.O.C. Georgia University MBA	Chairman of Yongqin Industrial Company Director of iron Force Industrial Co., Ltd. Director of Wangsteak Director of Sercomm Corp. Director of VIS Director of MiTAC Holdings Corp. Independent Director of Far Eastern Department Stores Corp Independent Director of Primax Electronics Ltd. Supervisor of Chilisin Electronics Corp.	None None None
Independent Director Yojun Jiao	Chairman of Walsin Lihwa Corporation Master of Electrical Engineering, University of Washington Bachelor of Telecommunication Engineering, National Chiao Tung University	Chairman and CEO of Winbond Electronics Co., Ltd. Chairman of NUVOTON Co., Ltd. Director of WALSIN TECHNOLOGY CORPORATION Chairman of Walsin Lihwa Corporation Independent Director of Taiwan Cement Co., Ltd. Supervisor of MiTAC Holdings Corp. None None None
Independent Director Anping Chang	President and Vice Chairman of Chia Hsin Cement Corporation Chairman of WYSE Chairman of GIGAMEDIA LIMITED Chairman of China Network Systems Chairman of L’Hotel de Chine Group Chairman of WYSE (USA) Vice Chairman of Taiwan Cement Co., Ltd. Executive Consultant of CITIC President of KGI Securities Independent Director of Fubon Holding, Taipei Fubon Bank, and Fubon Securities Director of FETNet Advanced Professional Certificate in Institute of Business Administration of New York University Master of Institute of Business Administration, New York University Bachelor of Economics, Princeton University	Chairman of Taiwan Cement Co., Ltd. Chairman of China Synthetic Rubber Co., Ltd. Chairman of Taiwan Prosperity Chemical Corporation None None None

** Other than Evans S.W. Tu’s brother (David Tu) is appointed as the Group’s business development executive, the remaining directors, supervisors, and other executives, directors or supervisors of the company do not have spouse or consanguineous to 2nd degree relations.

 Major shareholders of the corporate directors or supervisors

	2017.04.09
Name of corporate director or supervisor	Major shareholders of the corporate directors or supervisors*
MiTAC Inc.	Lien Hwa Industrial Corp 35.24% Synnex Technology International Corporation 18.36% Mei-An Investment Corp. 10.54% MiTAC International Corp. 8.69% Tsu Fung Investment Co., Ltd. 4.40% Matthew Feng-Chiang Miau 3.05% Hua Cheng Construction Co., Ltd. 1.92% Omron Corporation 1.70% Pao Shin International Investment Co., Ltd. 1.18% Yih FongInvestment Corp. 0.75%

16 2016 Annual Review

 Information of directors and supervisors

Qualifications Name														Concurrent post
	5 years of experience in the following professions			Independence status*										in the other
														public listing
	An instructor or higher up in a department	A judge, public prosecutor, attorney, certified	Having work experience in	1	2	3	4	5	6	7	8	9	10	company
	of commerce, law, finance, accounting, or	public accountant, or other professional or	the area of commerce, law,
	other academic department related to	technical specialist who has passed a national	finance or accounting, or
	company business in a public or private	examination and has been awarded a certificate in	otherwise necessary for
	junior college, college or university.	a professional capacity that is necessary for	company business.
		companybusiness.
Chairman Matthew Feng-ChiangMiau			V				V			V	V	V	V	3
Director Evans S.W. Tu			V				V			V	V	V	V	-
Director Yang,Hsiang-Yun			V	V	V	V	V	V	V	V	V	V		-
Director Chou,T.C.			V	V	V	V	V	V		V	V	V		-
Independent Director / Yungdu Wei		V	V	V	V	V	V	V	V	V	V	V	V	2
Independent Director Yojun Jiao			V	V	V	V	V	V	V	V	V	V	V	1
Independent Director AnpingChang			V	V	V	V	V	V	V	V	V	V		-

For those directors and supervisors who have met the following conditions two years prior to the election and during their tenure, please tick (“ ✓ ”) the respective box of qualification to indicate.
(1) Neither employees of company nor its affiliates.
(2) Neither a director nor a supervisor of company nor affiliates, unless the person is an independent director of the company, its parent company, or any subsidiary in which the company holds, directly or indirectly, more than 50 percent of the voting shares.
(3) Not an individual shareholder who holds shares, together with those held by the person’s spouse, minor children, or held under others’ name, in an aggregate amount of 1% or more of the total outstanding shares of the company or ranks among the top ten shareholders who are natural person in terms of the share volume held.
(4) Not a spouse or relative within the second degree of kinship, or lineal relative within the fifth degree of kinship, of any of the persons in the preceding three subparagraphs.
(5) Not directors, supervisors, or employees of a corporate shareholder that directly holds 5% or more of the total outstanding shares of the bank or ranks among the top 5 corporate shareholders in the terms of share volume held.
(6) Not directors, supervisors, or executive officer holding 5% or more shares of a specific company or institution and who also has financial or business dealings with the company.
(7) Not a professional, or owner, partner, director, supervisor, or executive officer and the spouse thereof of a sole proprietorship, partnership, company, or institution that provides commercial, legal, financial, accounting or consulting services to the bank or to any affiliates.
(8) Not a spouse or relative within the second degree of kinship within directors.
(9) Not any of the circumstances in the subparagraphs of Articles 30 of the Company Act.
(10) Not elected in the capacity of a government agency, a juristic person, or a representative thereof, as provided in the Article 27 of the Company Act.

Synnex highlights 17

Information on president, vice president, assistant vice president, senior executives of divisions & departments management

2017.04.09 Unit: Share/%

Title Name Nation ality Date starts*	Shareholding	Shareholding	Shareholding by Spouse/Minor children** Mj i d dti	Services concurrently with the other	Managers who are spouse or consanguineous to 2nd deree
	Shares %		aor experence an eucaon Shares %	company	g Title Name Relation ship
President Evans S.W. Tu ROC 1988. 9.12	36,156,381 2.17		1,587,245 0.10 President of Micro Electronics Corp. Vice-president of MiTAC Inc. Electrical and Control Engineering Degree in National Chiao Tung University	Supervisor of MiTAC Inc. Chairman of Seper Marketing Corp. Director of Harbinger Venture Capital Corp. Director of Digitimes Inc. Director of Bestcom Infotech Corp. Director of Synlogics Service Corp. Supervisor of MiTAC Information TechnologyCorp.	None None None
Vice-President Beny Weii ROC 1988. 9.12	1,854,216 0.11		137,194 0.01 Assistant Vice President of Micro Electronics Corp. Manager of MiTAC Inc. Electronic Calculation Bachelor Degree in TamkingUniversity	Chairman of E-Fan Investments Corp. Director of Synlogics Service Corp.	None None None
Vice-President James Lee ROC 2011. 12.26	342,474	0.02	21,603 0.00 Electrical Engineering Degree in National Joint Junior College	-	None None None
Vice-President Rex Shiue ROC 2011. 12.26	383,787	0.02	- - Manager of Unicom Electronics Co., Ltd. Industrial Management Bachelor Degree in National Taiwan University of Science and Technology	-	None None None
Vice-President Dicky Chang ROC 2011. 12.26	1,220,507	0.07	69,731 0.00 Senior Manager of World Family Agent of Bowne International Library Science Bachelor Degree in Fu Jen Catholic University	-	None None None
Overseas Operation CEO Matthew Feng-Chiang Miau USA 2005. 4.1	31,812,004	1.91	- - MBA of Santa Clara University (USA) Electrical Engineering BSc from the University of California at Berkeley	Chairman of MiTAC Inc. Chairman of Lien Hwa Industrial Corp. Chairman of Union Petrochemical Corp. Director of Mitac Investment (Holdings) Co., Ltd. Chairman of MiTAC Information Technology Corp. Director of Getac Technology Corporation Director of BOC Lienhwa Industrial Gases Co., Ltd. Director of Winbond Electronics Co., Ltd. Director of Taita Chemical Company, Limited Director of Director of Asia Polymer Corp. Director of Synnex Corp. Independent director of Cathay Financial Holdings Independent director of Cathay Life Insurance Independent director of Cathay Century Insurance Independent director of Cathay United Bank.	None None None
AVP Financial Oliver Chang ROC 1988. 11.1	449,164	0.03	36,634 0.00 Manager of Tait Marketing & Distribution Co., Ltd Manager of DIMERCO Accounting Bachelor Degree in Soochou University	Supervisor of E-Fan Investments Corp. Supervisor of Seper Marketing Corp.	None None None

Date started indicate the date on board, no indication will be made if however the title changed during the period.

** All shares are registered under stockholders’ own name.

18 2016 Annual Review

 Remuneration to directors, supervisors and executive officers and employees’ bonus

Remuneration Policy

The Company has established the Remuneration Committee to determine and review the performance evaluation and remuneration policy, system, standard, and structure for directors and the management. The performance evaluation and remuneration for directors and the management is conducted by referring to the payment standard of the industry and considering its reasonable link to personal performance, corporate operating performance, and future risk.

Director’s remuneration

Director’s	Director’s	remuneration	remuneration	remuneration	remuneration	remuneration
									2016 Unit: %/inNTD thousand
Title	Name					Ratio of total remuneration (A+B+C+D)							Ratio of total remuneration
		Directors remuneration*					Relevant remuneration rec		eived by directors who are also employees*
		Earnins					Salar bonus Pension and Suerannuation		Employee bonus distribution(G)*** Emloee Restrict					Compensation paid to directors from an invested
		Remuneration (A)	Pension and superannuation (B)	g distribution (C) ***	Business execution (D)	to net income (%)	y, and special disbursement (E)	p (F) *	Cash dividends Stock dividends		py share subscription warrants (H)	employees' rights shares (I)	(A+B+C+D+E+F+G) to net income (%)	company other than the Company’s subsidiary*
Chairman	Matthew Feng-ChiangMiau	-	-	6,000	704	0.14							1.57	-
Director	Evans S.W.Tu
Director	Yang, Shih-Chien**
Director	Charles H.S. Ching**
Director	Chou,T.C.***						66,480	3,320	-	-	-	-
Director	Yang, Hsiang-Yun***

Independent Director	Yungdu Wei
Independent Director	Yojun Jiao
Independent Director	Anping Chang

The Company’s remuneration paid to directors and relevant remuneration received by directors who are also employees is consistent with the subsidiaries in the financial report.
** It is the representative of Mitac Computer Co., Ltd. and the term was expired on June 11, 2015.
*** Representative of MiTAC Inc.

*** This amount is estimated as the remuneration to directors for 2016 has not yet been approved by the shareholders’ meeting. Relevant remuneration received by directors who are also employees is calculated based on the amount actually paid last year. Therefore, this is an estimated amount.

**** Proposed appropriation, not actually paid.

Synnex highlights 19

Remuneration to the president and vice-president

2016

Unit: %/in NTD thousand

				Bonus and	Employee bonus distribution(D)**	Employee bonus distribution(D)**	Ratio of total	Employee	Compensation from
		Salary(A)	Pension and	special			remuneration	share	an invested company
Title	Name	**	Superannuation	disbursement	Cash	Stock	(A+B+C+D) to	subscription	other than the
			(B) and **	(C)**	dividends***	dividends***	net income (%)	warrants**	Company’s
									subsidiary**
President	Evans S.W. Tu*	95,840	4,786	-	-	-	2.06	-	-
Overseas Operation CEO	Matthew Feng-Chiang Miau*
Vice-President	BenyWeii
Vice-President	James Lee
Vice-President	DickyChang
Vice-President	Rex Shiue

The cost of transportation vehicles is NTD 9,160 thousand with a book value of NTD 5,733 thousand.

** The Company’s remuneration paid to President and Vice President and relevant remuneration received by President and Vice President is consistent with the subsidiaries in the financial report.

*** Relevant remuneration received by President and Vice President for 2016 is calculated based on the amount actually paid last year and has not yet been approved by shareholders’ meeting. ** Proposed appropriation, not actually paid.

Name and distribution status of the managers for distribution of employee bonus

2016 Unit: %/in NTD thousand

			Stock dividends	Cash dividends*		Ratio of total remuneration to

	Title	Name	Amount	Amount	Total	net income(%)

Manager	President	Evans S.W. Tu	-	-	-	-
	Overseas Operation CEO	Matthew Feng-ChiangMiau
	Vice President	BenyWeii
	Vice-President	James Lee
	Vice-President	DickyChang
	Vice-President	Rex Shiue
	AVP-Finance	Oliver Chang
	TreasuryManager	Grace Huang

Relevant remuneration received by managers for 2016 is calculated based on the amount actually paid last year and has not yet been approved by shareholders’ meeting.

20 2016 Annual Review

3) Implementation of Corporate Governance

 Information on implementation of Board of Directors

As of April 30, 2017 the Board of Directors (A) has convened 6 meetings, and the records of attendance by directors and supervisors are shown below:

Title	Name	Attendance in person(B) Attendance by proxy	Actual attendance rate(%) [B/A]
Chairman	Matthew Feng-Chiang Miau	10 0	100.00%
Director	Representative of MiTAC Inc.: Yang, Hsiang-Yun	10 0	100.00%
Director	Representative of MiTAC Inc.: Chou, T.C	10 0	100.00%
Director	Evans S.W. Tu	10 0	100.00%
Independent Director	Yungdu Wei	10 0	100.00%
Independent Director	Yojun Jiao	9 1	90.00%
Independent Director	Anping Chang	7 2	70.00%

Other noteworthy matters:

I. Where one of the following requirements is met in the operation of the Board of Directors, the date of the meeting, the term, the contents of the proposal, the opinions of all the independent directors, and the methods for dealing with the opinions shall be described.
(1) Article 14-3 of the Securities Exchange Act: See the table below.
(2) In addition to the matters mentioned above, Board resolutions that independent directors have expressed opposition or qualified options and have been noted in the record or declared in writing: None.
II. Avoidance of Conflict of Interest by Directors: None.
III. Assessment of objectives and implementation status in the area of strengthening the powers of the board of directors for the current and immediately past years will be carried out (set up audit committee and improve transparency of information): None.

Board meetingterms/date	Proposal andprocessing
1stmeeting 2016	Synnex purchased the shares of Bestcom Infotech Corp.
March 01, 2016	Independent directors’ opinion: None
	Processing of independent directors’ opinion: None
	Since Director Evans S.W. Tu was the Director of Bestcom Infotech Corp., he summarized his stakes in this matter and left
	the meeting to avoid exercise of the voting right.
	Resolution: Except for the director who had stakes in this matter and left the meeting to avoid the solution, the Chairman
	asked the rest directors for their opinions and all thepresent directors approved theproposal.
2ndmeeting 2016	1. Audit of the manger transfer.
March 14, 2016	2. Release of the 2015 remuneration to the employees and directors.
	3. 2015 issue of new stocks to increase the capital by earnings.
	4. Increase of the loan limit to support Seper Marketing Corp.
	Independent directors’ opinion: None
	Processing of independent directors’ opinion: None
	Resolution: Theproposal was approved byall thepresent directors.
3rdmeeting 2016	1. Share exchange between Synnex and Bestcom Infotech Corp.
April 27, 2016	2. Change of the Synnex’s current CPA and assessment of the new CPA for his/her independence and competence.
	3. The subsidiary Synnex Global Ltd. increasing the capital by NSD 100 million at phases.
	4. Loans to the subsidiary Synnex Global Ltd.
	Independent directors’ opinion: None
	Processing of independent directors’ opinion: None
	Resolution: Theproposal was approved byall thepresent directors.
6thmeeting 2016	Planning of 2017 manager’s remuneration.
November 14, 2016	Since Chairman Matthew Feng-Chiang Miau and Director Evans S.W. Tu serve as the mangers concurrently, they
	summarized their stakes in this matter and left the meeting to avoid exercise of the voting right.
	The Chairman designated Independent Director Yungdu Wei as his deputy to preside over the meeting..
	Resolution: Except for the directors who had stakes in this matter and left the meeting to avoid the solution, the Deputy
	Chairman asked the rest directors for their opinions and all thepresent directors approved theproposal.

Synnex highlights 21

 Information on operation of Audit Committee

As of April 30, 2017, the Board of Directors (A) has convened 10 meetings, and the records of attendance by directors and supervisors are shown below:

Title	Name	Attendance in person(B) Attendance by proxy	Actual attendance rate(%) [B/A]	Note
Independent Director	Yungdu Wei	10 0	100.00%	Convener
Independent Director	Yojun Jiao	9 1	90.00%	-
Independent Director	Anping Chang	6 3	70.00%	-

Other noteworthy matters:

I. Where one of the following requirements is met in the operation of the Audit Committee, the date of the meeting, the term, the contents of the proposal, the opinions of all the independent directors, and the methods for dealing with thee opinions shall be described.
(1) Article 14-5 of the Securities Exchange Act: See the table below.
(2) In addition to the matters mentioned above, resolutions that did not approved at the Audit Committee meeting but agreed by 2/3 of all the directors: None.
II. Where any independent director is involved in the implementation of recusal with respect to any proposal, the name of the director, the contents of the proposal, the reason of the recusal, and participation in the voting: See the table below.
III. Communication among the independency directors, internal auditing manger and CPA (including substantial matters regarding the financial and business conditions of the Company and the methods as well as results of the communication):
(1) The internal auditing manager of the Company has regular communication with Audit Committee members to understand the result of the audit, and reports at the quarterly meeting of the Audit Committee. A report will be given at any time when any special circumstances occur. No such special circumstances occur in 2016. The Audit Committee of the Company communicates with the internal audit manager very smoothly.
(2) The CPA of the Company reports the audit and enquiry results of the current financial statements and other communication affairs required by relevant laws and regulations at the quarterly meeting of the Auditing Committee. A report will be given at any time when any special circumstances occur. No such special circumstances occur in 2016. The Audit Committee of the Company communicates with the CPA very smoothly.

Audit Committee meeting	Proposal and processing
term/date
1stmeeting 2016	Synnex purchased the shares of Bestcom Infotech Corp.
March 01, 2016	Independent directors’ opinion: None
	Processing of the independent directors’ opinion: None
	Resolution: All thepresent members approved theproposal and submitted it to the Board of Directors for discussion.
2ndmeeting 2016	1. Approval of the Internal Control Statement.
March 14, 2016	2. Audit of the manger transfer.
	3. 2015 financial account book
	4. 2015 issue of new stocks to increase the capital by earnings.
	5. Increase of the loan limit to support Seper Marketing Corp.
	Independent directors’ opinion: None
	Processing of independent directors’ opinion: None
	Resolution: All thepresent members approved theproposal and submitted it to the Board of Directors for discussion.
3rdmeeting 2016	1. Share exchanges between Synnex and Bestcom Infotech Corp. Resolution:
April 27, 2016	According to the fairness opinion issued by independent experts, the price of the share exchange is NTD 18 per share and
	falls in the fair price range that the independent experts recommend. Therefore, the share exchange price is appropriate and
	reasonable. As for the provisions of the share exchange agreement with respected to this share exchange proposal, all the
	requirements are established according to law, and do not contain any agreements that are obviously adverse to the
	Company or the shareholders of the Company. The share exchange agreement shall be deemed meeting the principle of
	fairness. All the present members approved the share exchange proposal without objections in comprehensive consideration
	of its fairness and reasonableness and the possible benefits that it may produce for the Company.
	2. Change of the Synnex’s current CPA and assessment of the new CPA for his/her independence and competence.
	3. The subsidiary Synnex Global Ltd. increasing the capital by NSD 100 million at phases.
	4. Loans to the subsidiary Synnex Global Ltd.
	Independent directors’ opinion: None
	Processing of independent directors’ opinion: None
	Resolution: All thepresent members approved theproposal..

22 2016 Annual Review

 Operations of Remuneration committee

There are 3 members of the Remuneration committee.
Current term of the Remuneration committee: 2015.6.12 ~ 2018.6.11; as of April 30, 2017, the Remuneration committee (A) has convened 2 meetings. The qualifications and the records of attendance of committee members are shown below:

Title	Name	Attendance in person(B) Attendance by proxy	Actual attendance rate(%) [B/A]	Note
Convener	Yojun Jiao	3 1	75.00%	-
Committee Member	Yungdu Wei	4 0	100.00%	-
Committee Member	Anping Chang	4 0	100.00%	-

Other noteworthy matters:

If the Board does not accept or amend the proposals of the Remuneration committee, clearly state the date, term, agenda, and resolution of the board and the Remuneration committee’s opinion processed by the Company
(If the remuneration compensation approved by the Board is greater than the Remuneration committee’s proposal, state the circumstances and reasons for the differences): None
If the committee members have objections or qualified opinions to matters resolved by the Remuneration committee documented or written, state the Remuneration committee date, term, agenda, the opinions of the members, and the process of the opinions: None

 Information on Remuneration committee members

Identity	Qualifications													Note**
		5 years of experience in the following professions			Independence status*
		An instructor or higher up in a	A judge public prosecutor attorney	Having work	1	2	3	4	5	6	7	8	Act as
		department of commerce law finance	, , , certified public accountant or other	experience in the area									Remuneration
		, , , accounting, or other academic	, professional or technical specialist who has	of commerce, law,									committee
		department related to company	passed a national examination and has been	finance or accounting									Member of other
		business in a public or private junior	awarded a certificate in a professional	, or otherwise necessary									public companies
		college, college or university.	capacity that is necessary for company	for company business.
	Name
			business.

Independent Director	Yungdu Wei			V	V	V	V	V	V	V	V	V	9	-
Independent Director	Yojun Jiao		V	V	V	V	V	V	V	V	V	V	1	-
Independent Director	Anping Chang			V	V	V	V	V	V	V	V	V	-	-

Remuneration committee members are subject to the following conditions for two years before being elected and during tenure:

(1) Neither employees of company nor its affiliates.

(2) Neither a director nor a supervisor of company nor affiliates, unless the person is an independent director of the company, its parent company, or any subsidiary in which the company holds, directly or indirectly, more than 50 percent of the voting shares.

(3) Not an individual shareholder who holds shares, together with those held by the person’s spouse, minor children, or held under others’ name, in an aggregate amount of 1% or more of the total outstanding shares of the company or ranks among the top ten shareholders who are natural person in terms of the share volume held.

(4) Not a spouse or relative within the second degree of kinship, or lineal relative within the fifth degree of kinship, of any of the persons in the preceding three subparagraphs.

(5) Not directors, supervisors, or employees of a corporate shareholder that directly holds 5% or more of the total outstanding shares of the bank or ranks among the top 5 corporate shareholders in the terms of share volume held.

(6) Not directors, supervisors, or executive officer holding 5% or more shares of a specific company or institution and who also has financial or business dealings with the company.

(7) Not a business owner, partner, director, supervisor, manager, and their spouses of professionals, proprietors, partners, corporations, or institutions providing business, legal, financial, and accounting services to the company or its associated companies.

(8) Not any of the circumstances in the subparagraphs of Articles 30 of the Company Act.

Synnex highlights 23

The current status of corporate governance and its comparison against the Corporate Governance Best-Practice Principles for TSEC/GTSM Listed Companies and its reasons

			Execution	Comparison against the Corporate
Assessment Items	Yes	No		Governance Best-Practice Principles for
			Summary	TSEC/GTSM Listed Companies and its

				reasons
I. Does the Company base on the “Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies” to set up and disclose the Company’s corporate governance best-practiceprinciples?	V		The Company intends to setup and disclose the “Corporate Governance Best-Practice Principles” in 2016.	In compliance with the concept and implementation of the “Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies”
II. Structure of the Company’s shareholders and equities (I) Does the Company have the internal procedures regulated to handle shareholders’ proposals, doubts, disputes, and litigation matters; also, have the procedures implemented accordingly? (II) Does the Company keep track of the major controlling shareholders as well as their ownership structure? (III) Are the firewall and risk control mechanism to reduce the risks involved with the Company’s related companies? (IV) Does the Company set up internal norms to prohibit the insiders from utilizing the undisclosed information to trade securities?	V V V V		(I) The Company intends to setup the “Procedures for Handling Material Inside Information” in 2015 for compliance. In addition, the company has a spokesperson system established to properly handle the shareholders’ proposals, doubts, disputes, and litigation matters. (II) Our company is able to keep track of the major controlling shareholders as well as their ownership structure; shareholding of the directors, supervisors and major shareholders are filed on the monthly basis in accordance with Securities and Exchange Act. (III) The company has established and implemented the related system in accordance with the governing law and regulations and the internal control system. In addition to actually handling the self-inspection process, the Board of Directors and management also regularly and occasionally review the self-inspection results of each department and the audit reports of the audit unit, substantiate the company’s internal control system, establish profound financial, operational, and accounting management system and strengthen the management of the affiliated companies in accordance with the relevant provisions for the public companies, and implement the necessary control mechanism in order to reduce operational risk. Rules of financial and business operation with the related companies are based on fair and reasonable principle. (IV) The company has the code of conduct setup to prohibit the insiders of the company from utilizing the undisclosed information to trade securities.	In compliance with the concept and implementation of the “Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies”
III. Board composition and responsibilities (I) Does the Board of Directors have diversified policies regulated and implemented substantively according to the composition of the members? (II) Does the Company, in addition to setting the Remuneration Committee and Audit Committee lawfully, have other functional committee set up voluntarily? (III) Does the Company have the performance evaluation rules and methods for the Board of Directors regulated and have the performance evaluation performed regularly every year? (IV) Is the independence of auditors regularly assessed?	V V V V		(I) The Company has stipulated in the Articles of Association to have 2-3 independent directors appointed in accordance with Article 14.2 of the Securities Exchange Act. In addition, it is stated in the Articles of Association to have the independent directors elected by nomination in accordance with Article 192.1 of the Company Law. The aforementioned amendment to the Articles of Association was resolved in the Company’s 2011 General Shareholders’ Meeting. The Company’s independent directors were elected in 2012. The education and experience, professionalism, and independence of the three independent directors are in conformity with Article 2, 3, and 4 of the Rules Governing the Appointment of Independent Directors by Public Companies and Compliances; also, Article 192.1 Paragraph 4 of the Company Law. (II) The company is committed to pursue corporate governance and to strengthen the mechanism of organization and operation continuously. The Remuneration Committee was formed in 2012 The Audit Committee will be established in 2015; also, more functional committees will be planned continuously in the future. (III) The Board Chairman is the Chairman of the Company. The promotion of the business strategy is executed by the professional management. The responsibilities of the Board of Directors include supervision, appointment, and guide the company’s management; also, responsible for the company’s overall operations, improving the supervision mechanism and strengthening the management capabilities. However, a formal board performance evaluation method and assessment method is not yet established, which will be established in the future according to the actual practice in order to protect shareholders’ interests. (IV) The company has the independence of the CPA assessed regularly and annually; also, considered whether it is necessary to have the CPA replaced. The appointment of the CPA is resolved by the Company’s Board of Directors; also, there is not a conflict of interest and it is a reputable accounting firm in Taiwan; therefore,the independence andprofessionalism of the CPA is not in doubt.	(I) In compliance with the concept and implementation of the “Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies”. (II) For the consideration of the law and regulations or the actual operations, if any, it is to be handled in accordance with the “Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies” and the related law and regulations.
IV. Do listed and OTC companies set up designated (concurrent) company governance units or personnel responsible for the governance-related matters of the company (including but not limited to providing required materials for directors and supervisor to do their duties, dealing with matters related to the Board and shareholders’ meetings according to laws, dealing with company registration and its change, preparing the minutes of the Board and shareholders’ meetings)?	V		The Company has designated personnel responsible for the governance-related matters including providing required materials for the Board of Directors and independent directors to do their duties, dealing with matters related to the Board and shareholders’ meetings according to laws, dealing with company registration and its change, preparing the minutes of the Board and shareholders’ meetings.	In compliance with the concept and implementation of the “Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies”

24 2016 Annual Review

V. Does the Company have established a communication channel for the stakeholders (including but not limited to shareholders, employees, customers, and suppliers), set up the stakeholder column on the Company’s website, and responded to the stakeholders regarding their concerns over corporate social responsibilities?	V	The Company has set up the stakeholder column and disclosed the contact phone number and person to respond to the stakeholders appropriately.	In compliance with the concept and implementation of the “Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies”
VI. Does the Company have commissioned a professional stock affairs service agent to handle shareholders affairs?	V	The company commissions China Trust Commercial Bank to handle the shareholders’ meeting related matters.	In compliance with the concept and implementation of the “Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies”
VII. Information disclosure (I) Does the company have a website setup for the disclosure of relevant information on financial status and corporate governance? (II) Are there other methods adopted to disclose information (i.e., Set up English website, designate a person engage in gathering and compiling the Company’s information, implement spokesperson system, display company website during meeting with institutional investors.)?	V V	(I) The Company has set up a website (http://www.synnex-grp.com.tw) to disclose relevant information on financial status and business. (II) As required, relevant information of the Company has been disclosed in “Market Observation Post System” for the understanding and inquiry of the investors. (III) The company has a spokesman and a deputy spokesman appointed. (IV) The Company has the corporate governance information disclosed in the “Investor Relations” section on the Company’s website with the information updated in a timely manner.	(I) In compliance with the concept and implementation of the “Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies”. (II) For the consideration of the law and regulations or the actual operations, if any, it is to be handled in accordance with the “Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies” and the related law and regulations.
VIII. Are there other important information (including but not limited to the interests of employees, employee care, investor relations, supplier relations, the rights of stakeholders, the continuing education of directors and supervisors, the implementation of risk management policies and risk measurement standards, the execution of customer policy, the purchase of liability insurance for the Company’s directors and supervisors) that are helpful in understanding the corporate governance operation of the Company?	V	(I) Employee benefits: We firmly believe that staff is the driving force of business growth; therefore, the company appreciates the importance of employee benefits; also, is committed to fulfill all the legal rights and interests of employees. 1. System: (1) Labor and health insurance, pension appropriation, employee education and training, employee health seminars from time to time; (2) Continuing to provide employees with a variety of benefits, such as: a life insurance with a coverage of at least NTD3 million (far better than the general business), free health checkup, weddings, funeral, and maternity benefits, interest-free loans, external training subsidies, etc. 2. Implementation: (1) Statutory rights and interests of employees are handled according to law; (2) Various employee benefits are handled by the designated personnel; (3) The group insurance has provided sufficient coverage to the employees who had suffered severe injuries or sickness in the recent years with 3-5 years of economic security provided. Considering the needs of the employee’s families for insurance coverage, the company provides the employees and their families with preferential “Vanity” life insurance and accident insurance policy. (II) Investor Relations: The company insists on the principle of integrity and information disclosure fairness; also, exercises corporate governance transparency, regularly publishes company operational and financial information to the shareholders, and sets the spokesman and deputy spokesman system to fulfill the company’s information disclosure responsibility and obligations of the. (III) Supplier relationships and the rights of interested parties: The company and its suppliers have maintained a long-term close relation of cooperation. (IV) Advanced study of the directors and supervisors: The Directors and Supervisors of the Company have a background in industry and have the advanced studies disclosed in the “MOPS” for the reference of the shareholders and investors. The 2014 advanced studies are disclosed in the attachment. (V) Implementation of risk management policies and risk measurement: Internal regulations are stipulated accordingly for risk management and assessment. (VI) The recusal of the interested directors: The Directors of the Company must be recused from voting on any motions in conflict with. (VII) Implementation of the customers’ policies: The company and its customers remained a stable and good relationship to create profits for the company. (VIII) The purchase of liability insurance for the directors and supervisors: The Company has acquired liability insurance for our directors and supervisors in accordance with the “Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies” and it has been disclosed in the “MOPS.” Insured subject Insurance company Insured amount (NTD: Thousand) Insurance period All directors and supervisors Fubon Insurance Co.,Ltd. 608,272 09.01.2015 ~ 09.01.2016 All directors and supervisors Fubon Insurance Co.,Ltd. 656,860 09.01.2016 ~ 09.01.2017 (IX) The directors and supervisors of the Company have fulfilled responsibilities truthfully and exercised power in good faith. (X) The Company has the “Rules of Procedure for Board of Directors Meeting” stipulated and implemented. (XI) The Company’s board meeting has been convened quarterly at least to strengthen corporategovernance.	In compliance with the concept and implementation of the “Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies”

Synnex highlights 25

IX. The companies shall describe the improvements made according to the last corporate governance evaluation results issued by the Corporate Governance Center of Taiwan Securities Exchange and	IX. The companies shall describe the improvements made according to the last corporate governance evaluation results issued by the Corporate Governance Center of Taiwan Securities Exchange and	IX. The companies shall describe the improvements made according to the last corporate governance evaluation results issued by the Corporate Governance Center of Taiwan Securities Exchange and	IX. The companies shall describe the improvements made according to the last corporate governance evaluation results issued by the Corporate Governance Center of Taiwan Securities Exchange and	IX. The companies shall describe the improvements made according to the last corporate governance evaluation results issued by the Corporate Governance Center of Taiwan Securities Exchange and	IX. The companies shall describe the improvements made according to the last corporate governance evaluation results issued by the Corporate Governance Center of Taiwan Securities Exchange and
the measures to be enhanced in the first priority for the matters that have not been improved (not applicable to the companies that are not incorporated in the				evaluation). The Company was ranked
in the Top 21%~35% in the result of the 2ndcorporate governance evaluation (Year 2015). The improvements that the Company has made and the measures to be enhanced in the first priority for
the matters that have not been improved with respect to the 3rdcorporate governance evaluation are described below.
			Improved Measures to be enhanced	in the first priority for the
Indicator	Description		(Y/N) matters that have not been improved
Equity maintenance	1.14	Does the annual report of the Company disclose the review of how the Y
Faire to shareholders		resolution of the regular shareholders’ meeting is implemented?
	2.8	Does the Company upload the annual report of English version 7 days before N The internal and external		resources for making English
		convention of the regular shareholders’ meeting?	annual report have not been completely prepared 7 days
			before convention of the regular shareholders’ meeting.
			The English annual report is simultaneously		uploaded to
			MOPS and the website of the Company.
Enhancement of the	3.15	Does the Company disclose its established corporate governance code? Y
structure and operation of	3.16	Does the Company establish and disclose the diversification policy of board N The Company has amended the corporate governance
the Board of Directors		of directors?	code. Enhancement will be carried out with		respect to
			individual directors to implement the diversification
			policy of board of directors.
	3.17	Does the Company disclosed the established ethical corporate management Y
		code and corporate social responsibility code?
	3.30	Does the Company’s Board of Directors assess the CPAs for their Y
		independence on a regular basis (at least once a year) and disclose the
		assessmentprocedure in the annual report?
Improvement of	4.13	Does the Company disclose the name list of the principal shareholders, Y
information transparency		including the shareholders with a stake of 5 percent or more or the name of
		the Top10 shareholders,in the annual report and on the website?
Fulfillment of corporate	5.1	Does the Company establish CSR policies, systems, or relevant	management Y
social responsibility		guidelines, make concrete implementation plans and results, and disclose
		them in the annual report or on the website of the Company?
	5.3	Does the Company establish a designated (concurrent) CRS unit and describe Y
		the operation and implementation status of the unit in the annual report?
	5.9	Does the Company disclose employee welfare measures, retirement systems, Y
		and their implementation status in the annual report?
	5.10	Does the Company disclose the working environment of the employees and Y
		personal safety protection measures in the annual report?
	5.12	Does the Company establish a system for reporting illegal (including N Regulations has not been		established but in progress.
		corruption) and immoral behaviors of any internal and external personnel, and
		comprehensivelydisclose it on the website of the Company?
Education of directors and supervisors Director and Supervisor Educational institutions			Course title	Training period	Credit hours
Director	Matthew	Taiwan Institute of Directors	Reversal of competitiveness – International situation and	2016.03.08	3
	Feng-Chiang Miau		solution after COP 21.
Director	Matthew	ROC Securities and Futures Institute	The prospect of the economy in Taiwan and the	2016.09.07	3
	Feng-Chiang Miau		prospective application of the block chain in global
			industries
Director	Evans S.W. Tu ROC Securities and Futures Institute		The prospect of the economy in Taiwan and the	2016.09.07	3
			prospective application of the block chain in global
			industries
Representative of	Chou, T.C. ROC Securities and Futures Institute		The prospect of the economy in Taiwan and the	2016.09.07	3
corporate director			prospective application of the block chain in global
			industries
Representative of	Hsiang-Yun Yang ROC Securities and Futures Institute		The prospect of the economy in Taiwan and the	2016.09.07	3
corporate director			prospective application of the block chain in global
			industries
Independent Director	Yungdu Wei Taiwan Institute of Directors		Major controversial cases about responsibility of the	2016.03.04	3
			supervisors for financial statements
Independent Director	Yungdu Wei Taiwan Academy of Banking and Finance		Corporate governance forum – Wealth management and	2016.04.13	3
			tax saving planning for high asset groups
Independent Director	Yungdu Wei Taiwan Institute of Directors		Risk management, internal control, and information	2016.06.29	3
			management practices
Independent Director	Yungdu Wei Taiwan Institute of Directors		Practical operation of independent directors and function	2016.07.29	2
			committees
Independent Director	Yungdu Wei ROC Securities and Futures Institute		The prospect of the economy in Taiwan and the	2016.09.07	3
			prospective application of the block chain in global
			industries
Independent Director	Yungdu Wei ROC Securities and Futures Institute		International and domestic anti-avoidance development	2016.12.06	3
			and responses to be taken by enterprises
Independent Director	Anping Chang ROC Securities and Futures Institute		The prospect of the economy in Taiwan and the	2016.09.07	3
			prospective application of the block chain in global
			industries
Independent Director	Yojun Jiao Taiwan Institute of Directors		Leadership in an innovative epoch – Industrial innovation	2016.09.03	3
			from the viewpoint of IoT,cloud service,and bigdata

26 2016 Annual Review

 Performance of Social Responsibilities

				Comparison against the Corporate
			Execution
				Governance Best-Practice Principles
Assessment Items	Yes	No	Summary	for TSEC/GTSM Listed Companies
				and its reasons

I. Exercising corporate governance (I) Has the company declared its corporate social responsibility policy and examined the results of the implantation? (II) Does the Company have the CSR education and training arranged on a regular basis? (III) Does the Company have a specific (or part-time) unit set up to promote corporate social responsibility, have the management authorized by the Board of Directors to handle matters and report the processing results to the Board of Directors? (IV) Does the Company have a reasonable salary and remuneration policy setup, have the employee performance evaluation system combined with corporate social responsibility policies, and have a clear and effective reward and punishment system established?	V V V V		(I) The company's corporate social responsibility policy is promulgated in accordance with "Synnex values" and has formed part of corporate culture. The complete "Synnex's values" (enacted in 1988) is as follows: 1. Maintaining the interests of employees and shareholders is our responsibility. We will handle each other’s interests based on honest and fair principles. 2. We concentrate on establishing a good corporate culture so as to allow employees opportunities to realize their full potential within the company's business philosophy and organizational strategies. 3. We are dedicated to the principles of integrity and highest business ethics, we do not provide incentive to others to violate the employer or the company's interests while do not allow our employees to receive the incentive. 4. To us, contribute to the society or the industry is our obligation and mission. 5. Our belief: win trust is an honor and responsibility; accept criticism with grace is seen as wisdom and courage. (II) The company has education and training courses arranged for the new recruits on the day they report to work with the company’s business operation and philosophy advocated, including the concept of corporate social responsibility. Advocate positive viewpoint with a subtle effect through long-term internal education and training of Synnex EMBA articles and Synnex conceptual phrases. (III) The Company established the CSR Work Team in 2015 with the President designated as the convener. The promotion of corporate social responsibility is to be coordinated by the Human Resources Quality Management Department of the President's Office. Four work teams were formed on the subject with a competent director and employees of each department elected to fulfill the responsibilities. The CSR Work Team is responsible for coordinating, managing, and implementing the CSR policies and activities of Synnex; also, it is responsible for preparing and publishing the annual CSR report. (IV) The company sets a reasonable remuneration policy with the considerations of external market, internal fairness, and reasonableness; also, based on the operational goals and individual performance. The annual gross income reflects individual contribution fairly and truthfully. The company had integrity and fairness disclosed in the company’s sense of value when the company was founded, protecting the interests of staff and shareholders, upholding the highest business ethics, and not infringing the company’s interests for any personal gains. Each employee commits to comply with the integrity rules with a contract and integrity commitment letter signed; also, the rewards and penalties system is set to clearlyregulate the code of conduct.	In compliance with the “Corporate Social Responsibility Best Practice Principles for TWSE/GTSM listed companies”. In compliance with the “Corporate Social Responsibility Best Practice Principles for TWSE/GTSM listed companies”. In compliance with the “Corporate Social Responsibility Best Practice Principles for TWSE/GTSM listed companies”. In compliance with the “Corporate Social Responsibility Best Practice Principles for TWSE/GTSM listed companies”.
II. Fostering a sustainable environment (I) Does the company endeavor to utilize all resources more efficiently and uses renewable materials which have a low impact on the environment? (II) Does the Company establish proper environment management systems based on the characteristics of their industries? (III) Does the Company monitor the impact of climate change on its operations and should establish company strategies for energy conservation and carbon and greenhouse gas reduction?	V V V		(I) The company endeavors to utilize all resources more efficiently and uses renewable materials which have a low impact on the environment. 1. Reuse of recycled packaging materials. 2. Promote paperless operations, such as use electronic signature system to reduce paper consumption and reach the goal of energy conservation and carbon and greenhouse gas reduction. (II) Though Synnex is a distributor of 3C products instead of highly polluted industry, but we devote to fulfill environmental responsibility based on the faith that earth is part of our life. (III) The Company engages in consumer electronics products channel sale that is not a high-polluting industry. The carbon dioxide emissions are mainly generated by the vehicles used by the operations center. The carbon dioxide emissions are calculated according to the vehicle mileage. A total of 1,084 metric tons of carbon dioxide emission was generated by vehicles in 2013 and 1,104 metric tons in 2014. For the replacement of old vehicles, the vehicles that meet the fifth emission standard are used to reduce the impact of vehicles on environmental protection. The strategies that the Company established for energy conservation and carbon and greenhouse gas reduction are as follows: 1. Main engine of air conditioner cannot be started when office temperature below 26°C. 2. Air conditioner switched off at 7:30PM. 3. All lamps used in the manufacturing plant are T5 energy saving fluorescent lamp and single fluorescent lamp. 4. All distribution vehicles must turn off engine when parked in the plant site, and air conditioner is disallowed at low speed. 5. Promote use of the stairs and skipthe use of elevators.	In compliance with the “Corporate Social Responsibility Best Practice Principles for TWSE/GTSM listed companies”. In compliance with the “Corporate Social Responsibility Best Practice Principles for TWSE/GTSM listed companies”. In compliance with the “Corporate Social Responsibility Best Practice Principles for TWSE/GTSM listed companies”.

Synnex highlights 27

III. Preserve public welfare (I) Does the Company have the relevant management policies and procedures stipulated in accordance with the relevant laws and regulations and international conventions on human rights? (II) Does the Company have the complaint mechanism and channel established for employees and have it handled properly?	V V		(I) The Company treats employees with good faith, and protects employees legitimate rights based on Labor Standard Law, International Human Right Pact, and the management policies stipulated in accordance with the governing law and regulations; in addition, labor meetings are held regularly to open door for communication between employers and employees so as to establish understanding and promote harmony. Gender equality is respected in the Company, sexual harassment prevention rule has been scheduled, and provide job opportunities for disabilities to allow same career development as if they are normal people. (II) The company has a staff suggestion box setup to collect opinions from the employees that will be handled and replied by the designed personnel.	In compliance with the “Corporate Social Responsibility Best Practice Principles for TWSE/GTSM listed companies”. In compliance with the “Corporate Social Responsibility Best Practice Principles for TWSE/GTSM listed companies”.
(III) Does the Company provide safe and healthy work environments for its employees, and organize training on safety and health for its employees on a regular basis? (IV) Does the Company establish regular communication mechanisms for employees, and have employees notified in a reasonable manner of any changes that may have a significant impact on them? (V) Does the Company develop an effective career capacity training program for the employees? (VI) Does the Company establish the relevant consumer protection policies and complaint procedures in the sense of R&D, procurement, production, operations, and service processes? (VII) Does the Company market and label the products and services in accordance with the relevant regulations and international norms?	V V V V V		(III) The company values employee’s safety and mental and physical health, is dedicated to improving the working environment, enhancing employee’s safety and health awareness, and stipulating the relevant management mechanisms with the mode of operation illustrated as follows: 1. Work environment and employee safety protection (1) The company constructs a safe and healthy workplace, regularly maintains and improves equipment; office computer with low blue screen is selected to provide employees with comfortable, healthy, and friendly office equipment. (2) The company’s workplaces are covered with the public liability insurance and the public safety equipment inspection of the building and firefighting plan is reported to the competent authorities lawfully. Moreover, the fire management personnel qualification license and certificate is acquired; the workplace firefighting plan is stipulated, and the workplaces firefighting equipment safety is maintained. (3) Appoint safety and health personnel; also, arrange safety and health education and training. 2. Employee health enhancement (1) The company has full-time nurses appointed to provide employee with health counseling; also, to arrange health seminars with physicians invited to share health information with the employees, to provide proper health management knowledge, and to reinforce employee’s awareness of health. (2) Arrange regular free health checkup and the nurses are to provide necessary assistance in tracking any abnormality, provide excellent healthcare, and to safeguard employee’s health. (3) Arrange sports events and health promotion competition; also, encourage employees to pay attention to their own health. (4) Provide shoulders and necks pressure relief massage service from time to time in order to improve the stiffness after a long hour of sitting in office and to improve blood circulation. (IV) The Company holds regular labor meetings to provide channels of communication between employers and employees, build consensus, and promote harmonious labor relations; it also, communicates messages by e-mail occasionally. (V) The company firmly believes that: “Good employees make a good department; a good department makes a good company.” Plan professional job training and construct a knowledge management system for autodidacts since the new recruits reporting to work so the employees can continue to grow with their professional skills enhanced. In addition, schedule reports and integrate reading in each stage of the career development in order to help employees enhance career skills through the systematic practice. (VI) The Company is an agent and is mainly to serve consumers in accordance with the service specifications of the manufacturers and government laws and regulations. Synnex e-city website Customer Service Box and Service Hotline are provided to control, care for, and handle the interests of consumers and the satisfaction of post-sale service. (VII) The company has the marketing and labeling of products and services handled in accordance with the commodity labeling law and the information, communications (3C) label standard and other requirements published by the Department of Commerce MOEA so that consumers can understand theproducts fully.	In compliance with the “Corporate Social Responsibility Best Practice Principles for TWSE/GTSM listed companies”. In compliance with the “Corporate Social Responsibility Best Practice Principles for TWSE/GTSM listed companies”. In compliance with the “Corporate Social Responsibility Best Practice Principles for TWSE/GTSM listed companies”. In compliance with the “Corporate Social Responsibility Best Practice Principles for TWSE/GTSM listed companies”. In compliance with the “Corporate Social Responsibility Best Practice Principles for TWSE/GTSM listed companies”.
(VIII) Does the Company check the suppliers in advance for any records of impacting the environment and society?	V		(VIII) Regarding the implementation of environmental and corporate social responsibility, in addition to strengthening corporate self-management, in terms of selecting partners, the company’s focus is not on profits but in fulfilling corporate social responsibility as an important indicator for long-term cooperation. In evaluating vendors’ fulfilling their social responsibility, the company mainly evaluate the following items: 1. “Integrity management, clean transaction” Link with the vendors and customers through our role as an agent to jointly create a harmonious and pure trading environment. In addition to honor the commitment to integrity, the company shall also comply with the Electronic Industry Code of Conduct and related laws and regulations as a law-biding and practical enterprise. 2. “Green environment, energy recycle” Request the manufacturers and suppliers to comply with the requirements of EU environmental norms and national environmental laws and regulations; also, aim for a sustainable development and expand the overallgreen supplychainperformance.	In compliance with the “Corporate Social Responsibility Best Practice Principles for TWSE/GTSM listed companies”.

28 2016 Annual Review

(IX) Does the contract signed by the Company with the major suppliers entitle the Company to have the contract cancelled or terminated at any time when the suppliers violate the CSR policies that have a significant impact on the environment and society?		(IX) Currently the agreement of having a contract terminated or cancelled while violating the “Corporate Social Responsibility Policy” is not signed by all the trade partners of the company; however, the company is now actively promoting it in order to achieve the goal of having the company and suppliers worked together to enhance corporate social responsibility.	Disclose when there is regulatory or actual requirement.
IV. Enhancing information disclosure (I) Does the Company have the relevant and reliable CSR information disclosed on the Company’s website and MOPS?	V	The Company had the CSR section setup on the website with the first 2014 CSR report published at the end of 2015 and uploaded on the Company’s website and MOPS. The annual CSR report will be published in the following year for the reference of the stakeholders with the contact information provided as a communication channel with the stakeholders.	In compliance with the “Corporate Social Responsibility Best Practice Principles for TWSE/GTSM listed companies”.
V. If the Company has established corporate social responsibility principles based on “Corporate Social Responsibility Best Practice Principles for TWSE/GTSM listed companies”, please describe any discrepancy between the principles and their implementation: The implementation of the Company’s CSR is described below. In addition, please refer to the CSR reportpublished in the CSR section on Synnex’s website.
VI. Other important information to facilitate better understanding of the Company’s corporate social responsibility: It is described below. In addition, please refer to the CSR reportpublished in the CSR section on Synnex’s website.
VII. If the products or corporate social responsibility report have received assurance from external institutions, they should state so below: None.
The implementation of other corporate social responsibilities. Environmental management Synnex is engaged in 3C channel business operation that does not involve high pollution. However, Synnex is based on the strong belief of being a global citizen on Earth to strive for environmental protection. (I) Reduce the impact of business services on the environment Synnex has recycling symbols and recycling bins setup for obsoleted or used cellphones, electronic products, and batteries at the maintenance centers in Taiwan. Consumers are reminded to have their personal information deleted from their cell phones before recycling for personal privacy protection. The recycling and disposition process is handled by contracted vendors on a quarterly basis (II) Reduce the impact of logistics and transportation delivery on the environment For the consumables channel business operation, logistics vehicles are the main source of energy consumption and greenhouse gas emissions. Therefore, Synnex was well aware of such issue long before and has taken the necessary measures for management in order to reduce the impact on the environment throughout the product transportation process. While replacing used vehicles with new ones, vehicles in compliance with the environmental regulations of the ROC are used to reduce air pollution throughout the product transportation process. Synnex, through the logistics management information system developed in-house, combined with its own distribution fleet and years of practical experience in distribution, has its distribution routes divided and planned with 2~3 deliveries made daily by the designated personnel and vehicles in order to reduce inefficient transport routes. Logistics vehicles coming back into the plant must have the engine turned off and the air conditioning turned off while the vehicles are idling. Employee Care Synnex strongly believes: “Good staff makes a good sector; a good sector makes a good company.” We wish to provide each employee with appropriate care and attention, to substantiate employee care, to offer colleagues with a talent development platform, and to continue bringing a sense of accomplishment and satisfaction at work. Based on the employee-oriented concept, Synnex has constructed a diversified, equal, warm, and sound workplace; also, we paid attention to employee safety and talent training and development. (I) Employee diversification and equality We hire employees without any discrimination in the sense of race, class, language, thought, religion, political party, place of birth, gender, appearance, facial features, sexual orientation, age, marital status, mental and physical disability, or union membership. (II) Workplace Safety and Health Workplace safety and health is an important commitment of Synnex so that employees can work at ease. To strengthen the prevention of occupational hazards, our electromechanical technicians patrol the workplaces and engineering rooms daily, strengthen electrical safety (For example: Replaced the 1250KW and 750KW transformer insulation oil in the B1 high voltage transformer room at the end of 2015), test water quality quarterly, perform repair work (For example: Repaired scaffolding and strengthened the lighting of the motorcycle parking lot), renew protection gear (For example: attic ladder rackmount); and regularly inspect building structural safety, tilt, firefighting equipment, building facilities security, etc. to ensure that our partners are able to work at ease. We introduced health service doctors since November 2013 with services provided on site every two-months, including health seminars and physician consultation; also, we setup healthcare nurses in April 2014 to regularly inspect the nursery environment and supplements. The screens (low blue light equipment) in the office have been fully replaced since 2015 to reduce the hazard of eye injury of colleagues who have to stare at the screens for a long time. We arrange health promotion activities, such as, weight loss programs, Employee Athletic Games, blood donation activities, staff canteen to provide healthy foods (fruit and bread), etc., and the establishment of corporate group activities (a basketball club). (III) Peace of mind and Security 1. Emphasizing the creation of an “intelligent and balanced work life style” to encourage colleagues “taking vacation” adequately. In addition to the annual leave required by law, new recruits with less than one-year seniority are entitled to a 7-day leave (proportionally to the days of work performed) that is more preferential than the requirement of the Labor Standards Law. 2. Obtain life insurance coverage for at least NT$3 million for all full time employees to strengthen the family basic protection for employees. 3. Employees with one-year seniority may apply for interest-free loans for purchasing a family home, home improvement, marriage, birth, car, and emergency relief, so far, more than 500 employees had applied for such loans. 4. Gift money/gift certificate for marriage, funeral, hospitalization, maternity, and birthdays; 5. Statutory protection of full payment of labor insurance, labor pension appropriation, and national health insurance. (IV) Women Friendly Workplace Environment 1. The Company’s selection and promotion of personnel is not affected by the factor of gender. More than 40% of the managers are women. 2. A comfortable and private nursery is offered for stress-free breast feeding. 3. We provide the employees with a friendly flexible parental leave environment. According to the statistics, 50% of the female colleagues (also a number of male colleagues had applied for parental leave) had applied for parental leave right after maternity leave in the last three years; also, up to 72% of the colleagues on a parental leave had applied for reinstatement that has helped reduce female colleagues torn between work and family care, so that female colleagues do not have to cut their career short due to the need for short-term family care. Social Care Synnex has upheld the belief of “knowledge and experience sharing is our way of community feedback” for years. Therefore, Synnex’s years of experience and knowledge in internal management is composed as internal education and training materials of “Synnex EMBA” and “Synnex Concepts” and shared with the world free of charge; moreover, the royalty income of the articles published is donated entirely for promoting education, culture, and arts. Synnex’s management experience is also provided to the academic community for study. The Business School of National Chengchi University has chosen Synnex as a case study of Taiwan business management and the case study is issued to business schools worldwide. In addition, the Synnex Operations Center accepts visitation applications filed by academic institutions for teaching and research purposes in order to promote academic exchanges and to provide students with internship opportunities for talent cultivation. Synnex held a blood donation activity in 2015 and bought a charity moon cake to share with the colleagues in the Mid-Autumn Festival. In addition to supporting public welfare, Synnex has adopted street trees,continued to feedback to society,and fulfill corporate social responsibility.

Synnex highlights 29

 Status of Implementation of Integrity Operation

				Comparison against the Corporate
	Execution
				Governance Best-Practice Principles
Item
	Yes	No		for TSEC/GTSM Listed Companies
			Summary	and its reasons
I. Set integrity management policies and programs (I) Does the company express a clear integrity management policy in the Articles of Association and external documents, and the board and the management are actively committed to its implementation? (II) Does the Company have the prevention program for any fraud stipulated and have the respective operating procedures, guidelines for conduct, disciplinary actions, and complaints system declared explicitly; also have it implemented substantively? (III) Does the Company have preventive measures adopted in response to the conducts stated in Article 7 Paragraph 2 of the “Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies”or other business activities subject to higher risk of fraud?	V V V		(I) The Company has established the “Integrity Management Code” and the Internal Audit Office is responsible for integrity management policies, prevention programs, and supervision. (II) The company has stipulated the “Manufacturers Commitment” to request all suppliers having transactions conducted faithfully without any acts of bad faith, and to establish a good procurement system. To ensure the implementation of integrity management, the Company has established an effective accounting system and internal control system; also, internal audit staff has the compliance of the systems referred to above checked regularly. (III) The company has the “code of conduct” setup. The management measures are established to prevent bribery and taking bribe and prohibit providing illegal political contributions, improper charitable donations or sponsorship, and offering or accepting unreasonable gifts, entertainment, or other improper benefits for the operating activities stated in Article 7 Paragraph 2 of the “Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies”or other business activities subject to higher risk of fraud.	In compliance with the concept and implementation of the “Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies”.
II. Implementation of integrity management (I) Does the company have the integrity of the trade counterparty assessed and with the code of integrity expressed in the contract signed? (II) Does the Company have a specific (part-time) unit setup under the board of directors to advocate the code of integrity and to report on its implementation to the Board on a regular basis? (III) Does the Company have developed policies to prevent conflicts of interest, provided adequate channel for communication, and substantiated the policies? (IV) Does the Company have established effective accounting systems and internal control systems to substantiate ethical management; also, have audits performed by the internal audit unit on a regular basis or by the commission CPAs? (V) Does the Company have organized ethical management internal and external education and training programs on a regular basis?	V V V V	V	(I) The Company has stipulated the “Manufacturers Commitment” to request all suppliers having transactions conducted faithfully without any acts of bad faith, and to establish a good procurement system. (II) The Company has not set up a dedicated unit for integrity management. Each department is to fulfill integrity management according to job responsibilities and operation scope. (III) The Company has stipulated the “Employee Integrity Commitment” to request that employees shall not commit any form of “improper conduct,” such as, kickback, commissions, equity interest in any form or improper gifts, or illegal gains that directly or indirectly benefits oneself, related parties, or designated personnel; also, to prevent any personal gain at the expense of the Company. (IV) To ensure the implementation of integrity management, the Company has established an effective accounting system and internal control system; also, internal audit staff have the compliance of the systems referred to above checked regularly. (V) The company has the “Integrity Management Code” and “Code of Conduct” setup to have integrity management embedded in corporate culture; also, to advocate it from time to time in various meetings and Synnex EMBA advocacy in order to have it substantiated. The related specifications of the company’s integrity management are advocated before havinga trade agreement signed with the suppliers.	In compliance with the concept and implementation of the “Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies”
III. The operation of the Company’s Report System (I) Does the Company have a specific report and reward system stipulated, a convenient report channel established, and a responsible staff designated to handle the individual being reported?	V		(I) The company has the “code of conduct” setup. Any person who is engaged in or aware of any violations of the Code and the relevant provisions of the act or activity is responsible to report it to the immediate supervisor or the company’s audit unit immediately.	In compliance with the concept and implementation of the “Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies”
(II) Does the Company have the standard investigating procedures and related confidentiality mechanism established for the incidents beingreported?	V		(II) The company’s audit unit accepts anonymous report. The informer must provide sufficient relevant information to facilitate the company’s verification.

30 2016 Annual Review

(III) Does the Company have taken proper measures to protect the whistleblowers from suffering any consequence of reporting an incident?	V	(III) No informer will be retaliated against or threatened for reporting possible violation of norms, suspicious violation of the Securities Exchange Act, and other illegal activities. Any informer who has been retaliated against, threatened, or warned should immediately report it to the immediate supervisor or company’s audit unit.
IV. Enhancing information disclosure (I) Does the Company have the content of ethical management and its implementation disclosed on the website and MOPS?	V	The company has a website setup to disclose the relevant corporate culture, business policy, and other information. The company is currently undergoing the setup the corporate governance in English and Chinese in the Investor Section of the website; therefore, the information of corporate governance will be disclosed upon the completion of the website setup.	In compliance with the concept and implementation of the “Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies”
V. If the company has integrity management defined in accordance with the “Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies,” please describe the operational differences from the Code: The Company has the “Integrity Management Code” setup in compliance with the concept and implementation of the “Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies.”
VI. Other important information that helps understand the company’s integrity management: 1. The Company has complied with the Company Law, the Securities and Exchange Act, the Business Accounting Law, listed and OTC relevant rules, or other publicly traded commercial activities related law and regulations for the implementation of integrity management. 2. The Company has director conflicts of interest defined in the “Regulations Governing Procedures for Board of Directors Meeting” Board Rules.” If the proposals proposed in board meetings have a conflict of interest with the directors or the statutory representative that is detrimental to the company’s interest, the directors may present their views and answer questions but may not join discussion and voting; also, they shall be excused in discussion and voting and shall not exercise their voting rights on behalf of other directors by proxy. 3. The Company has stipulated the “Manufacturers Commitment” to request all suppliers having transactions conducted faithfully without any acts of bad faith, and to establish a good procurement system. 4. The company has the company’s Integrity Management Code reviewed and amended in accordance with FSC Certificate Far.Tzi No. 103003989 Letter dated October 31, 2014 by the Financial SupervisoryCommission.

Synnex highlights 31

 Important resolutions of Shareholders’ Meeting and Board of Directors

Shareholders’ Meeting

Date of
meeting	Summary of important resolutions	Result of resolution
2016.06.08	1. Approved 2015 financial statements.	Adopted
	2. Approved 2015 earnings distribution.	Resolved in the meeting and implemented in accordance
	Shareholder’s dividend: Cash dividend per share amounted to NTD1.5.	with the resolutions reached in the shareholder’s meeting.
	Stock dividend per share amounted to NTD 0.5
	Employee bonus: NTD 0.6 million.
	Remuneration of the directors and supervisors: NTD 6 million.
	3. Discussion of revision of the Company’s “Articles of Association.”	Resolved in the meeting and implemented in accordance
		with the resolutions reached in the shareholder’s meeting.
	4. Discussion of2015 issue of new stocks to increase the capital by earnings.	Resolved in the meeting and implemented in accordance
		with the resolutions reached in the shareholder’s meeting.

Board of directors

Date of meeting	Summary of important resolutions	Result of resolution
2016.03.01	1. Discussion of the acquisition of the stock shares of Bestcom Infotech Corporation.	Adopted by all present directors
	2. Discussion of the advance payment for the long-term investment provided to Synnex	Adopted by all present directors
	International Investment Co., Ltd. (China) by SYNNEX GLOBAL LTD., the
	subsidiary.
2016.03.04	1. Discussion of 2016 operation plan.	Adopted by all present directors
	2. Internal control declaration approved.	Adopted by all present directors
	3. Discussion of the replacement of the Audit Officer.
	4. Discussion of revision of the Company’s “Articles of Association”.	Adopted by all present directors
	5. Discussion of the Company’s 2015 financial account books.	Adopted by all present directors
	Employee bonus: NTD 0.6 million.
	Remuneration of the directors and supervisors: NTD6 million.
	6. Planning of 2015 earnings distribution.	Adopted by all present directors
	Shareholder’s dividend: Cash dividend for NT$1.5 per share and stock dividend for
	NT$0.5 per share.
	7. Discussion of the Company’s 2015 issuance of new shares for the capitalization from	Adopted by all present directors
	earnings.
	8. Discussion of convening2016general shareholders’ meeting.	Adopted byall present directors
2016.04.27	1. Discussion of stock shares conversion with Bestcom Infotech Corporation.	Adopted by all present directors
	2. Discussion of the attestation CPAs replacement and the successor CPAs’ independence	Adopted by all present directors
	and competence assessment.
	3. Discussion of the capitalization of the subsidiary, Synnex Global Ltd.	Adopted by all present directors
2016.08.12	1. Discussion about issue of new stocks, distribution of earnings, and base day for	Adopted by all present directors
	increase of capital
2016.11.14	1, Discussion about adoption of the “2017 AuditingPlan”	Adopted byall present directors
2017.03.17	1. Discussion of the 2017 operating plan of the Company	Adopted by all present directors
	2. Discussion and approval of the internal control statement	Adopted by all present directors
	3. Discussion about the revision of part of the Company’s “Articles of Association.”	Adopted by all present directors
	4. Discussion about the Company’s 2016 payment of remuneration to employees and	Adopted by all present directors
	directors
	5. Discussion of the Company’s 2016 financial statement	Adopted by all present directors
	6. Draw-up of the 2015 earnings distribution	Adopted by all present directors
	Shareholder’s dividend: Cash dividend per share amounted to NTD 1.0
	7. Discussion about convention of the 2017 regular shareholders’ meeting	Adopted byallpresent directors

The above specified only partial information of meeting of Board of Directors and Shareholders, the information disclosed here only includes the information that the Company believe may have significant impact on investors.

32 2016 Annual Review

4) Changes in shareholdings of directors, supervisors, managers, and principal shareholders

Title Name	2016 2017.1.1 ~ 2017.4.10
	Note Changes in shareholding Changes in pledged shareholding Changes in shareholding Changes in pledged shareholding
Chairman and Overseas Operation CEO Matthew Feng-ChiangMiau	1,514,857 - - -
Director and president Evans S.W. Tu	1,721,732 - - -
Director Yang,Hsiang-Yun and Chou,T.C.	10,819,097 - - - Representative of MiTAC Inc.*
Independent Director Yungdu Wei	- - - -
Independnet Director Yojun Jiao	- - - -
Independent Director AnpingChang	- - - -
Vice-President BenyWeii	88,296 - - -
Vice-President James Lee	16,308 - - -
Vice-President Rex Shiue	18,275 - - -
Vice-President DickyChang	58,119 - - -
AVP-Finance Oliver Chang	21,388 - - (400,000)
Treasury Manager Grace Huang	4,638 - - -
Major shareholder MiTAC Inc.	10,819,097 - - -

Information includes only changes in shareholding and pledges of corporate shareholders.

** The individual was the representative of Lien Haw who was discharged on June 12, 2015.

Synnex highlights 33

III. Capital and shares

1) Category of shares

2017.04.09

Unit: Share

Category of shares	Authorized capital Note Outstanding shares (listed) Un-issued shares Total
Registered ordinary shares	1,667,946,968 532,053,032 2,200,000,000

2) Shareholder structure

2017.04.09

Item		Financial institutions Other institutional shareholders Personal shareholders	Foreign institutions
	Government
			and personal	Total
	institutions
			shareholders

Number of shareholders	1	49 199 51,943	582	52,774
Shares	616	224,742,896 451,114,149 405,380,950	586,708,357	1,667,946,968
Shareholding %	0.00	13.47 27.05 24.30	35.18	100.00

3) Distribution of shareholding

		NTD 10 par 2017.04.09
Classification of shareholding	Number of shareholders	Shares Percentage of shareholding (%)
1 - 999	11,186	2,940,816 0.18
1,000 - 5,000	27,173	57,953,512 3.47
5,001 - 10,000	6,521	45,447,519 2.72
10,001 - 15,000	2,877	34,010,411 2.04
15,001 - 20,000	1,164	20,311,285 1.22
20,001 - 30,000	1,325	31,846,297 1.91
30,001 - 40,000	634	21,702,787 1.30
40,001 - 50,000	376	16,915,752 1.01
50,001 - 100,000	730	50,612,032 3.03
100,001 - 200,000	339	47,609,757 2.85
200,001 - 400,000	177	49,716,722 2.98
400,001 - 600,000	69	33,778,546 2.03
600,001 - 800,000	34	23,695,485 1.42
800,001 - 1,000,000	17	15,301,667 0.92
1,000,001 and above	152	1,216,104,380 72.92
Total	52,774	1,667,946,968 100.00

4) Major shareholders

4) Major shareholders
	2017.04.09
Major shareholders	Shares Percentage of shareholding (%)
MiTAC Inc. Representative: Matthew Feng-ChiangMiau	227,201,054 13.62
Matthew Pacific Tiger Fund investment accounts managed with HSBC actingas custodian bank	95,600,921 5.73
Fubon Life Insurance Co., Ltd. Representative: Benyuan Zheng	58,421,768 3.50
Morgan Stanley Capital International managed account with HSBC(Taiwan)actingas custodian bank	50,644,627 3.04
Labor Insurance Fund	43,358,318 2.60
Nanshan Life Insurance Co., Ltd. Representative: Ying-TsungTu	38,021,550 2.28
Evans S.W. Tu	36,156,381 2.17
Public Service Pension Fund Management Board	35,419,940 2.12
Lien Hwa Industrial Corp. Representative: Matthew Feng-ChiangMiau	34,093,125 2.04
Matthew Feng-ChiangMiau	31,812,004 1.91

34 2016 Annual Review

5) Market price per share, Net assets per share, earning per share and dividends

Unit: NTD

Item / Year	2015	2016	2017.03.31
Market price per share Highest Lowest Average	46.75 30.10 39.60	39.00 29.50 33.54	34.20 32.10 32.90
Net worth per share Before distribution After distribution**	26.95 24.17	25.52 NA	* NA
Earnings per share Weighted average shares (in thousands of shares) Earnings per share – before adjustment Earningsper share – after adjustment*	1,667,947 2.01 1.82	1,667,947 2.92 2.92	1,667,947 NA
Dividends*** Cash dividend Dividend from retained earnings Dividend from capital reserve Accumulated undistributed dividends	1.50 0.50 - -	1.00 - - -	NA NA NA NA
Analysis for return on investment**** Price/Earnings ratio Price/Dividend ratio Cash dividendyield rate	19.70 26.40 3.79%	11.49 33.54 2.98%	NA NA NA

As of December 31, 2016, the retroactive adjustment of shares after capital increase out of earnings and employee bonus.

** Based on resolution of shareholders’ meeting of the next year.

*** The earnings distribution for year 2016 is based on Board of Directors’ meeting on March 17, 2017.

**** Price/Earnings ratio =Average market price/Earnings per share before adjustment Price/Dividends ratio=Average market price/Cash dividend per share

Cash dividends yield rate=Cash dividends per share/Average market price

*The Q1 consolidated statement in 2017 has not been announced. This information is not disclosed here.

6) The policy and implementation of dividends

The dividend distribution proposed by shareholder meeting

The Board of Directors meeting held on March 17, 2017, proposed cash dividend distribution of NT$1.0 per share.

Dividend policy

The Company’s new Articles of Association was resolved in the Board meeting on November 9, 2015. The new Articles of Association is illustrated as follows and it is scheduled to be resolved in the shareholders’ meeting on June 8, 2016.

According to Article 38 of the Company’s Articles of Association, the Company’s annual earnings, if any, should be applied to make up losses and pay taxes first, then appropriate 10% as legal reserve and special reserve for an amount equivalent to the amount debited to the current shareholder’s equity. The Board of Directors is to plan the earnings distribution proposal according to the balance amount plus the beginning cumulative unappropriated earnings for acknowledgement in the shareholders’ meeting. For the earnings distribution ratio and shareholders’ cash dividend ratio, the Board of Directors is to have it determined with the consideration of the additional paid-in capital, retained earnings, and future earnings situation; however, the cash dividend may not be less than 15% of the total current dividend.

The Company has distributed cash dividends to shareholders since 1999 and cash dividend per share has been more than NT$1.5 since 2010. The Company intends to continue to maintain a stable dividend policy.

Synnex highlights 35

7) Uncompensated distribution of shares and its impact on company operation and EPS

Unit: NTD

Item / Year 2017 (Estimate) (Distribution of 2016 earnings)	Item / Year 2017 (Estimate) (Distribution of 2016 earnings)
Beginningissued capital(in NTD thousand) 16,679,470
Distribution of current year	Cash dividend per share (NTD) 1.0* Stock dividend per share for capital increment from retained earnings - Stock dividendper share for capital increment from capital reserve -
Change in operational performance Conjectural earnings per share and PE ratio	Operating income NA* % Change in Operating Income (YOY) Net income % Change in net income (YOY) Earnings per share % Change in Earnings per share (YOY) Average rate of return on investment(Average E/P ratio)
	If retained earnings for capital increment all converted to cash dividend Pro-forma Earnings per share (NTD) NA* Pro-forma Average annual return on investment
	If no increment using capital surplus Pro-forma Earnings per share (NTD) NA* Pro-forma Average annual return on investment
	If no increment using capital surplus, it will be switched to cash dividends Pro-forma Earnings per share (NTD) NA* Pro-forma Average annual return on investment

As the Company did not publish a financial forecast for 2017, this information is not available; the distribution of 2016 is conducted in accordance with the earnings distribution approved by the Board of Directors meeting.

36 2016 Annual Review

8) Information on employee bonus and compensation for directors and supervisors

Provisions in Articles of Association

According to Article 38 of the Company’s Articles of Association, the Company’s net income before tax before deducting remuneration to employees and directors and after making up losses should be applied to pay remuneration to employees for an amount not exceeding 10% and not less than 0.01% of the balance; also, applied to pay remuneration to directors for an amount not more than 1% of the balance.

Estimation criterion and difference treatment

The employee bonus and remuneration to directors and supervisors for the financial year 2016 is estimated with reference to the profitability of the current period on a basis of 1.2 ten-thousandths and 1.2 thousandths, respectively.
Public companies must recognize as expense and liability when there is legal responsibility or assume responsibility and the value can be reasonably estimated based on “Guideline for employee bonus and remuneration for directors and supervisors” in accordance with the 16 March 2007 Letter No. Ji-Mi-Zih-052 of the Accounting Research and Development Foundation in Taiwan. It will be recognized as next year’s profit/loss if difference between the actual distribution and estimated amount is shown after resolution of the shareholder meeting.

Information on proposed distribution approved by Board of Directors

As of March 17, 2017, the Board of Directors approved that the proposed distribution of employee bonus for 2016 is NT$600 thousand and remuneration for directors and shareholders is NT$6,000 thousand. Both are same as the estimate in 2016.
The proposed distribution of stock dividend for employee is NT$0.
Impact of the proposed distribution of employee bonus and remuneration for directors and shareholders to earning per share: None.

Actual distribution of the preceding year and treatment of differences

The employee cash dividend in 2015 was NT$600 thousand and the remuneration for directors and supervisors was NT$6,000 thousand. The cash dividend for employees is consistent with the 2015 estimation while there is a difference of NT$1,600 thousand in the remuneration for directors and supervisors. It has been adjusted in the 2016 profit and loss statement.

Information on employee bonus and remuneration for directors and supervisors in the latest five calendar years

Item	2012 2013 2014	2012 2013 2014	2015	2016
	/ Year of EPS (Distribution in (Distribution in (Distribution in		(Distribution in	(Distribution in
	2013) 2014) 2015)		2016)	2017)
Dividend (NTD/per share)	Cash 2.00 2.80 3.30		1.50	1.00
	Stock - - -		0.50	-
Remuneration for direct thousand)	ors and supervisors (in NTD 10,000 7,600 7,600		6,000	6,000
Employee bonus	Cash	600 600 600	600	600
	Stock	Amount (in NTD thousand) - - -	-	-
		Shares (thousand shares) - - -	-	-
Employee stock bonus / (employee stock bonus + shareholder stock dividend) None None None			None	None
Employee stock bonus / outstandingshares atyear end None None None			None	None

Summary of 2015 (distributed in 2016) employee stock bonus information: None

9) Buy back shares: None

Synnex highlights 37

IV. Issuance of global depositary receipts, bonds, preferred shares and employee stock option

1) Global depositary receipts

Issue date	Issue date	Issue date	1997.7.3	1999.9.22
Countries issued			Asia, Europe and the US	Asia, Europe and the US
Issuance and listing			Luxembourg Stock Exchange	Luxembourg Stock Exchange
Total amount issued (US$)			139,382,100	245,380,125
Issue price per GDR (US$)			22.23	18.93
Total units issued (unit)			6,270,000	12,962,500
Underlying securities			1. Capital increase by cash and issue new shares 2. Release shareholder: MiTAC Inc., Lex Service (Guernsey) Limited.	1. Capital increase by cash and issue new shares 2. Release shareholder: Lex Service (Guernsey) Limited.
Common shares represented (shares)			25,080,000	51,850,000
Rights and obligations of GDR holders			Rights and obligation consistent with common shares	Rights and obligation consistent with common shares
Trustee			None	None
Depositary bank			Citibank, N.A.	Citibank, N.A.
Custodian bank			Citibank N. A., Taipei branch	Citibank N. A., Taipei branch
04.30.2017 GDR outstanding (unit)			951,681
Apportionment of expenses for issuance and maintenance			Issuing expense is paid by release shareholder and issuing company on the pro rata basis, duration expense is paid by depositoryinstitution.	Issuing expense is paid by release shareholder and issuing company on the pro rata basis, duration expense ispaid bydepositoryinstitution.
Important notes on depository agreement and custodian agreement			See depository agreement and custodian agreement for details	See depository agreement and custodian agreement for details
Market price per unit (US$)	2016	Highest	4.99
		Lowest	3.49
		Average	4.16
	2017. 01.01 - 2017. 04.30	Highest	4.40
		Lowest	3.98
		Average	4.26

2) Status of employee stock option: None

3) Preferred shares: None

4) Corporate bonds: None

38 2016 Annual Review

Operation highlights

I.	Scope of Business ................................................................................................................................................. 39
1)	Main areas of business operation and revenue distribution in 2016 ..................................................................... 39
2)	Developing new products (service) ........................................................................................................................ 40
3)	Overview of industry ............................................................................................................................................. 40
4)	Report on technology and research development................................................................................................... 44
5)	Long and short term business development plan ................................................................................................... 45
II.	Business model ..................................................................................................................................................... 46
III.	Core competitiveness ........................................................................................................................................... 47
IV.	Business strategy .................................................................................................................................................. 48
V.	Market and sales conditions ................................................................................................................................ 50
1)	Main sales markets ................................................................................................................................................ 50
2)	Supply-demand and growth of the future market ................................................................................................... 52
3)	Positive factors for our future development ........................................................................................................... 58
4)	Negative factors for our future development and our countermeasures ................................................................. 60
5)	Essential Purposes of Major Products .................................................................................................................... 60
VI.	Employees ............................................................................................................................................................. 61
1)	Number of employees in group .............................................................................................................................. 61
2)	Employees information .......................................................................................................................................... 61
VII.	Report on environmental protection and related expenditures........................................................................ 61
VIII.	Labor relations ..................................................................................................................................................... 62

Operation highlights 39

Operation highlights

I. Scope of Business

1) Main areas of business operation and revenue distribution for 2016

==> picture [456 x 522] intentionally omitted <==

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

30,978,019
21,602,832
14,495,974
344,319
Computer, Communication & Consumer Electronics IC components Maintenance services and others
73.0% 26.9% 0.1%
Taiwan/Hong
Taiwan/Hong Kong/China/New Zealand & Australia/Indonesia Kong/China
Personal Consumables/ General CPU Free within warranty
computer/Assembly Software network Digital products communication Memory Maintenance service
Kits/Peripherals products Processing components Paid repair and
of logical transactions maintenance services
Imaging processing Repair and
Media tablet Operation system Flat TV Cellular phone components maintenance
Net book Server software Xbox game consoles Accessories and Audio processing consigned by vendors
Note book Application software and software consumables components
Home computer Network Interface card PC game software SD card Video processing
Commercial computer Wireless network Multimedia player Bluetooth earphones components
E-Book Broadband network MP3 players Fax machine…. Communication
Server products Digital videotape components
CPU Ink Cartridge recorders Optical transfer modules
Main Board Toner cartridge Digital camera LCD panel….
Printer CD Digital projector
Display card Multi-function USB
Power supply products
Hard drive Uninterrupted power
Mouse, keyboard system
CD-ROM Drive Computer Video
products…
Nature of major customers
Dealers /
Dealers Manufacturers
End-users
----- End of picture text -----

40 2016 Annual Review

2) Developing new products (service)

New Product	New Service
▪ Cloud services business ▪ Smart Life Related Products ▪ IoT Related Products	▪ CPFR services ▪ Third-party logistics services ▪ Technical services business

3) Overview of industry

Distribution overview of 3C products (IT and Telecom)

1. Overview of supply chain

Supply chain of IT and Telecom can be divided into “supply chain” in the manufacturing side and the “demand chain” in the sales side. The supply chain focuses on OEM and the demand chain focuses on distributors, the two generated a supply-demand relationship under the production and purchasing unit and marketing and sales unit of brand company (shown below).

Supply chain and demand chain

==> picture [349 x 190] intentionally omitted <==

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

Supply Demand chain
chain
OEM Brand company Brand company
Manufacturer (Production and (Marketing and Distributor
purchasing) sales)
(Maintenance Regional logistics)
Bank Logistics ProviderService Stores - 門市 shops 經銷 Dealers 加值 reseller (VAR)added Value 商 integration 系統整合 System (SI)
(International/
Regional logistics) 最終使用 End users
Component Home Corporate Government
vendors users users agency
----- End of picture text -----

The ecosystem of supply chain and demand chain differs, the former is relatively larger manufacturer in size, lesser in number; the latter is relatively smaller in size with a larger number and deeper penetration into the market. Therefore, the management philosophy and operation model of the supply chain and demand chain is very different.

To the distributors focused greatly on integrated demand, its value determines on the channel’s density and solidity of different products and whether a complete management mechanism of channel operation can be set up to effectively manage product categories, items, bulk customers, bulk orders, bulk shipment operation and maintenance operation. Failure to establish a sound operational management mechanism will be unable to generate economic efficiencies.

2. Role of the distributors

The trend of slim-profit has enabled a more sophisticated vertical integration of supply chain, that is, during the evolution of industrial ecology, the upstream, midstream, and downstream improves the overall efficiency of supply chain operation and lower overall cost through “Who responsible for what is most effective?”

In addition to research, development, marketing and sales, this trend has also resulted in a more sophisticated inventory management, assembly and maintenance (shown in graph below). Among them, the distributors’ role in component inventory,

Operation highlights 41

finished goods inventory, CTO assembly and product maintenance is increasingly important, and provides a greater value in supply chain for the distributors with complete operation mechanism and size.

Industrial Chain and Distributor’s Roles

(Except R&D, manufacturing and sales)

==> picture [327 x 171] intentionally omitted <==

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

Inventory Maintenance
management Assembly Service
Components vendors 零組件供應商  Components  Components
OEM manufacturers 系統組裝廠  Work in process  Components
Brand company 品牌大廠
 Components
Distributors inventory  CTO real-time  Finished goods
通路商  Finished goods assembly repair
inventory
Dealers 經銷商  CTO real-time
assembly
最終使用者 End-users
----- End of picture text -----

3. Overview of upstream suppliers

The bigger upstream suppliers usually grow faster and stronger; especially for the mature products with only few brands competing in market. The manufacturer’s marketing strategy is going for centralization, that is, reduces the number of agents; therefore, the large IT agents also grow faster and stronger. In addition, the manufacturers while looking for agents increasingly stress the importance of agent’s operational capacity and financial solvency in order to avoid agents who do not have sufficient operational capacities and financial solvency to meet the demand of growing market. Under the circumstance, the agents with operational capacity, solid management, and financial solvency are obviously with advantage in competition.

4. Overview of downstream dealers

Consumer information channel: The market is moving toward the operation of large-scale information chain stores. The emerging channels including online shopping and TV shopping are the new trend for the distribution of consumer information products in recent years. The diversified products sold in chain stores and shopping network have made management a complex task; moreover, the price of information products drops fast; therefore, the collaboration between the channel agents and the upstream distributors, in addition to product supply, will grow in the sense of logistics management, inventory management, maintenance operations, and e-flow. The distributors with logistics capabilities and powerful information management capabilities are in position to provide support to this type of distribution channels and to form a close upstream and downstream partnership.
Business information channel: The government agencies, educational institutions, and corporate are the main sales targets that can be divided into the categories of large-scale systems integrators (SI) and general value-added reseller (VAR). In terms of market operation, dealers and upstream distributors are to provide total solutions to the end-user. Therefore, a close cooperation between the dealers and distributors is expected from product planning and technical support and logistics services before sales to the after-sales maintenance services.
Telecommunication stores channel: It is a consumer market with a focus on store distribution. Cellular phone is with a short

2016 Annual Review

lifespan and the price drops faster than IT products. Relatively, the telecommunication stores distribution relies heavily on the product supply capacity, logistics capability, and after-sale maintenance services of the upstream distributors.

Telecommunications system operators channel: Telecommunication as the core of the direct sale or franchise system by integrating cellular phone and phone number. The distributors supply cellular phones; also, carriers are also actively looking for distinctive 3C products for sale with the phone number that relies heavily on the distributor’s inventory management and logistics mechanism that represents another form of close cooperation.

Overview of IC components distribution

The feature of IC component distribution is different from the same of IT and Telecom channel.

As market exclusivity exists among same product of different vendors, it is unlikely for distributors to obtain a franchise on the same product on different brands; with its upstream position in the supply chain and rapid update, the supply-demand of IC components products is not easily controlled and resulted in higher possibility of shortage or excess of supply. To tackle the situation, IC components distributor must seek the diversification of product types to maintain the stable growth of business performance.
The downstream customers are mostly modules and systematic products manufacturer, its relatively lesser in number and larger in size generate a concentrated source of business and high volatility. In customer development, as IC components distributors are required to assist customers to adopt new design in the new developed products (design-in), their strong technical support capability to combine business, product planning and technical support is one of the key factors of a successful business. Besides, the decreasing tolerance to price fall of inventory and capital burden of vendors due to the rapid change of price of components products and slim-profit trend of overall supply chain, the distributors’ sufficient logistics management ability to rapidly serve customers’ needs is one of the key factor for IC components distributors to establish market advantage.

Product development trend

The product line of Synnex covers four major areas including the three terminal products (IT related, telecom products, and consumer electronics) and the IC components. Since development of the IC component is dependent on the application and development trend of the terminal products, we describe in more detail about the development and competition status as we may foresee in this area below.

IT related products

As the Market Intelligence & Consulting Institute (MIC) of the Institute for Information Industry estimates, the global shipments of information system products in 2017 will reach up to 424 million units with a decline of 4.4% in comparison with the 444 million units in 2016. Individually, the global shipments of desktop PCs will drop for two consecutive years to 102 million sets in 2017 with a decay rate of 2.3%. The overall market scale of laptop computers is 149 million units. The decay rate in this area is estimated to 1.8% against the 152 million units in 2016. The market of table computers remains stagnant. The market scale is estimated to 161 million units and a decline of 8.5% in comparison with the 176 million units in 2016 is expected. The global market scale of servers is about 11.1 million units and may have a growth rate of 5.4% against the 10.6 million sets in 2016.

The depressed global economy, mature development of the computer market, and limited contribution of new products and technologies to the stimulation of market demand result in a continuous shrinking of the desktop, laptop, and tablet computer markets in 2017. However, the decline has slowed down significantly. The server market may have a steady

Operation highlights 43

growth because enterprises need to upgrade existing or purchase new products for their operation due to the development of the cloud business model.

In addition, the emerging gaming in recent years bring about rapid growth of the high-end gaming computer shipments. Though they have a limited contribution to the overall shipments of the desktop computers, the growth of this niche application market is helpful in the improvement of the average unit price and gross profit of the PC products. Furthermore, the advantageous and mature market conditions, such as the performance upgrade of the key components, reduction of the power consumption, and improvement of the cooling function, may promote the universal commercial application of the advanced products and drive the penetration of the desktop computers in the industrial computer application area. This may find a new growth space for the desktop computers and become the next competition focus of the manufacturers.

As the MIC analyzes, the threat of competition that smart mobile devices bring may turn the R&D focus of the laptop computer manufacturers to the slim and thin or high-end gaming products of high unit prices. The slim and thin computers will become the new development focus of the brand manufacturers. Especially, the brand manufacturers in China is another indicator to be observed in 2017. Their development will affect the potential of the existing brand manufacturers to develop in the market.

▪ Telecom products

Digitimes estimates a growth rate of 7.1% in the 2017 global mobile phone market. Samsung and Apple will remain in the leading position in the global market with a shipment volume of 316 and 236 million mobile phones, respectively, in 2017. All the rest Top 10 mobile phone brands belong to the manufacturers of China except for the Korean LG. The shipments of Huwei and Oppo will expectedly grow to 127 and 105 million units, respectively. Both will be the mobile phone brands of China that have the highest market share in the world.

==> picture [336 x 252] intentionally omitted <==

2017 Smart Phone Shipments and Growth Rate Forecast

Source: DIGITIMES, 2016/10

Note 1: The area of the circle is in direct proportion to the shipments.

Note 2: The global smart phone shipments will have an annual growth rate of 7.1% in 2017.

44 2016 Annual Review

▪ Consumer electronics

The statistics of the Consumer Technology Association (CTA) shows more than 300 types of consumer electronics products in the market. The global consumer electronics industry may have a scale of US$ 292.5 billion in 2017. It is expected to grow by 1.5% against the scale in 2016 and create a new record in the history. The market competition of the consumer electronics products has gradually turned from the hardware equipment to the innovative integration service. When buying a product, what consumers want is not merely the function of the product. Most of them need the service features that the product provides. Hence, how to enhance the software, platform, and service experience features based on the hardware and deploy integrated innovations will be the next competition focus of the industry.

The consumer electronics products will develop with the AI applications as the core. As IDC, a market research institution, estimates, the global AI market scale will grow from US$17.2 billion in 2014 to 48.6 billion in 2019 with an annual growth rate of 23.1%. Among the Asia-Pacific, North America, and West Europe regions, Asia will become the region of the highest growing dynamics thanks to the increase of the funds in the R&D of robots in Japan and the support of the Chinese government in the development and application of the AIoT.

According to Gartner, a market research institution, the AI technology is stepping in a rapid development phase. The SR (Speech Recognition) technology will become mature and applied universally within the next 2 years. The NLP (Natural Language Processing), VPA (Virtual Personal Assistant) and DL (Deep Learning) technologies will become the mainstream in the coming 5 to 10 years.

The International Federation of Robotics (IFR) expects that the global market scale of service robots may reach up to US$ 19.6 billion during the period from 2015 to 2018. The household service robots may have a market share of 74% and is the most potential market in this field. They provide many applications including control of the TV set and air conditioner via the voice control system and reporting of household safety status. They may also innovatively integrate with AI, IoT, and cloud to realize device-to-device communication and introduce household appliances using deep learning algorithms.

4) Report on technology and research development

Research and development operations

The most important core competitiveness of Synnex is business innovation and leading technology. The continuous enhancement of operation technology and innovative business model to adapt to rapid change of market trend in this slim-profit era is how Synnex maintain and expand its market leading position. Currently, the Business Planning & Management Div. and Logistics Planning & Management Div. of Synnex headquarters are responsible for overall planning of the business model and R&D operations, major operational technology in the process of planning, development and promotion including:

Cloud Service Platform
Product Accounting Management
Collaborative Inventory Management System 4. Mobile Phone Plans Sales System
Commercial Business Management System
Technical Service Management System

Operation highlights 45

5) Long and short term business development plan

Short term business development plan

Channel: Continue channel’s in-depth development plan to actively develop more terminal customers, establish a complete sales channel. Especially in China, continuing channel development in-depth in all tiers cities and national chain store operations and internet shopping channel operations, and will actively seek opportunities for collaboration with China’s telecommunications industry. In addition to continuing to expand retail store operations in Australia, we will also actively develop commercial information networks. In terms of Taiwan, the existing distribution network is fairly stable; therefore, we will actively develop business opportunities for horizontal alliance in the future.
Product: Continuing franchise strategy in Asia Pacific region to expand cooperation with global brands for synergy effect. At the same time, increase business information, consumer electronics, and software product lines aggressively.
Logistics: Continue the construction and explanation plan of the logistics center and enhance the remote monitoring management capacity and provide customers with diversified logistics services with the advantage of the logistics network in response to business growth.

Long term business development plan

In response to the global economic slowdown and stagnation, exchange rates and stock market fluctuations, and political and economic impact, the Company’s long-term business development plan is to focus on seeking a breakthrough in stable operation. On one hand, continue to strengthen a sound internal operational management; on the other hand, continue to seek a breakthrough in products and channel business operation; also, to seek for integrated synergies among business units in order to expand the advantages of “economies of scale.”

46 2016 Annual Review

II. Business model

Synnex’s business model is based on product management, channel management, and logistics management as the three main themes (see below) to link the upstream manufacturer and downstream distributors for providing a technology and industry integrated service.

==> picture [243 x 171] intentionally omitted <==

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

Business themes
Product Channel
management management
Logistics
management
Customer
Manufacturer
----- End of picture text -----

Actual operating activities are based on core mechanism of channel operation which including digital nervous system (MIS, Management Information System), order taking through call center of order service, logistics mechanism, rapid maintenance mechanism, CTO (Configuration-To-Order; a kind of customer made production service) real time production mechanism, the “cyber logistic centric business model” is established through the above mechanism to effectively operate information flow, capital flow, logistics flow and maintenance flow. As the core mechanism of operation is interconnected for different types of business, Synnex is thus able to develop variable channel business through “digital nervous logistics service center” and use mutual platform with joint-venture partners to facilitate business development while promoting economic efficiency of the operation, lower operational cost along with business expansion and eventually generated a positive cycle. The business model is illustrated below:

Cyber Logistic Centric Business Model

==> picture [295 x 212] intentionally omitted <==

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

Joint Venture Sales IC Components Distribution (IT/ Joint venture Sales &
& Marketing Business Group Telecom business Marketing Company
(3C business) unit (other business)
Inventory Efficient
management delivery
(Automatic
warehousing) (Last Mile)
CTO Fast maintenance
Customize service
production
Service call center
Purchase flow
Information flow
Inquiry & Order flow
Fulfillment flow Logistics Service Group
Supplier Customer
----- End of picture text -----

Operation highlights 47

III. Core competitiveness

Diversified Channels

With over 30,000 channels in Asia Pacific region covering a wide range of distributors including traditional shops, chain stores, online shopping, value-added resellers, system integrators and telecom operators, not only Synnex’s commodities are fast in circulation and large in sales volume, it is a big plus when acquiring new dealerships.

Comprehensive Product Line

With comprehensive product line to suffice customers’ demand and develop channel positioning, Synnex’s products cover diverse categories and brands including IT related, telecom, consumer electronics and IC components. In addition, the deep and long-term cooperation with major global brands allow Synnex to be a step ahead of new product development and market trend than its competitors.

Logistics Mechanism

Synnex has established dozens of logistics centers in major cities of Asia Pacific region, which formed extensive logistics network coverage. With state-of-the-art automatic equipment, a self-developed management systems, professional and disciplined operations, Synnex’s logistics centers covering warehousing, distribution, maintenance and assembly functions form substantial logistics capacities to back up business operations.

The Four Information and Communication Network

In light of the four information and communication networks including Management Information System (MIS), Logistic Remote Monitoring Network, Video Conference Network, and Telecommunication Network, Synnex has built up a foundation for transnational management capabilities to enable transnational internal control and communication without the hassle of distance restriction, so that while seeking more opportunities in the global market, internal control capacity is strengthened.

The development of operational management techniques

Collaborating with the software R&D center, Synnex’s five planning & management functions including business, logistics, risk, finance and human resource that positioned at the headquarters are responsible for planning business models, laying down management policy, developing operation systems and conducting business analyses, inspection and quality management. This substantial support facilitates Synnex to develop innovative business and management techniques and strengthen its core competence in a continued effort to meet the Group’s strategic performance.

48 2016 Annual Review

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

(1,000 square meters)
Overseas
Taiwan
----- End of picture text -----

==> picture [91 x 11] intentionally omitted <==

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

Logistics operations area
----- End of picture text -----

IV. Business strategy

Multi-brand and multi-product strategy

Synnex adopts multi-brand and multi-product operation strategy to effectively diversify operational risk and offer diversified products to customers to establish dense reseller network, this business strategy also pushes Synnex to move forward to pursue new products to prepare for the future growth.

Management philosophy of 51 and 49

In general, both suppliers and customers are important to distributors; however, Synnex places greater value on customers than on suppliers, a difference between 51 and 49. As distributor should dedicate to management and operation of distribution channels, thus, the back office support including order, distribution and maintenance should emphasis on customer services. In this regard, variety of distribution channels are established along with enhancement of service value and a tight reseller network is generated. With stronger channels, suppliers are willing to sell their products through Synnex’s channels, and Synnex will assist supplier to gain best possible profit through placement of appropriate channels in accordance with different product types.

From serving channel customers to serving ‘end users

The unique triple channel operation business model of sales, distribution and maintenance has clearly positioned distributor as professional service provider, a series of complex back office operation is coordinated by Synnex to ensure the efficiency and quality of services. In this regard, inventory risk of Synnex’s customers is effectively reduced due to unnecessary stock up and cost of maintenance engineer and inventory maintenance is reserved. Synnex is expanding its services from channel customers directly to end users, the dense maintenance network and rapid delivery has increased customers satisfaction to post-services, and CTO assembly production center provide customized computer products to customers is able to meet the needs of customers. Synnex’s goal is continuously increase resellers’ and end-users’ satisfaction in the days to come.

The advantage of operational process

In this competitive high-tech industry, only those with technology or operational process advantage are able to continuously gain high profit in this slim-profit era. Through the self-developed, tailored made MIS system, Synnex is able to combine sales, distribution and maintenance business model into a complex, sophisticated and unique operational process "knowledge-based", at the same time, it is extremely difficult for competitors to copy this model. In this knowledge economy and slim-profit era,

Operation highlights 49

Synnex is able to utilize this knowledge advantage to establish a goal that no other competitors can reach.

Unique “open channel “strategy

Synnex adopts an open strategy in its distribution business, that is, the decision to work with Synnex is placed in the resellers hands. As the operation of direct chain retailers is complicated and development is also limited; in addition, contract franchise involve in management issues. Thus, Synnex attracts customers by offering multi-brand, multi-products and high value-added services to establish dense reseller network so that all resellers in the industry can be Synnex’s customers.

A distributor with brand name

Synnex was the first company to come up with the idea of “brand name” distributor, through the established value-added services; the resellers are willing to introduce products to customers and consumers who are willing to purchase Synnex’s products due to Synnex’s post-services. In addition, Synnex’s own brand “Lemel” is produced not to compete, but to generate a positive adjustment with the resellers.

Maximizing the advantage of economic scale

Synnex conducts a distribution and maintenance mechanism to ensure quality and efficiency of the services. The significant growth of revenue triggered from valued services in the recent years has generated a lower operating expense when comparing with competitors. Synnex realized that the best way to maintain stable profitability and effectively expand market share is through continuously lowering operating expense in this slim-profit era.

Pursuing steady growth in overseas market

Currently, Synnex has overseas subsidiaries located in Hong Kong, China and Australia that operate in localizes, stable and step by step strategy to operate local distribution business. The successful Taiwan operation experience and mechanism is copied to the subsidiaries in accordance with actual needs. To complete product management, channel management and basic logistics management, MIS system is copied, and followed by CTO assembly, automatic warehousing and maintenance mechanism. Besides, Synnex also help subsidiaries to obtain complete dealership of international brand through its successful cooperation experience with the suppliers in Taiwan.

An all-round logistics service provider in the age of e-business

In this e-commerce development trend, Synnex’s business model is positioned as a comprehensive logistics management service provider to provide back office services of inventory management, distribution and maintenance for B2C industry. In addition, the “Synnex e-City” launched in November 2000 has become a 3C content website pioneer in Taiwan; the current back office operation mechanism and MIS system is established to handle “volume” transaction. Thus, Synnex will be able to respond to the sharp challenges of the E-era in the future.

50 2016 Annual Review

V. Market and sales conditions

1) Main sales markets

Trends in group revenues for the past five years

NTD bn Overseas subsidiary 229.5 268.9 272.4 260.0 267.7 Taiwan 83.1 61.4 59.1 62.1 75.0 Consolidate 312.6 330.3 331.5 322.1 342.7	NTD bn Overseas subsidiary 229.5 268.9 272.4 260.0 267.7 Taiwan 83.1 61.4 59.1 62.1 75.0 Consolidate 312.6 330.3 331.5 322.1 342.7	NTD bn Overseas subsidiary 229.5 268.9 272.4 260.0 267.7 Taiwan 83.1 61.4 59.1 62.1 75.0 Consolidate 312.6 330.3 331.5 322.1 342.7	NTD bn Overseas subsidiary 229.5 268.9 272.4 260.0 267.7 Taiwan 83.1 61.4 59.1 62.1 75.0 Consolidate 312.6 330.3 331.5 322.1 342.7	NTD bn Overseas subsidiary 229.5 268.9 272.4 260.0 267.7 Taiwan 83.1 61.4 59.1 62.1 75.0 Consolidate 312.6 330.3 331.5 322.1 342.7	NTD bn Overseas subsidiary 229.5 268.9 272.4 260.0 267.7 Taiwan 83.1 61.4 59.1 62.1 75.0 Consolidate 312.6 330.3 331.5 322.1 342.7
Overseas subsidiary	229.5	268.9	272.4	260.0	267.7
Taiwan	83.1	61.4	59.1	62.1	75.0
Consolidate	312.6	330.3	331.5	322.1	342.7

Intercompany transaction is deducted from the selling party’s sales account

Operation highlights 51

Trends for regional revenue within the group in the next five years

==> picture [224 x 204] intentionally omitted <==

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

Taiwan (ICT) NT$ bn
Product sales
53.0
↑ 29%
42.8
34.5 33.1
32.5
----- End of picture text -----

==> picture [222 x 212] intentionally omitted <==

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

New Zealand, Australia &
Indonesia NT$ bn
Product sales
70.9 71.4 72.2
64.7
↑ 1%
47.1
----- End of picture text -----

==> picture [224 x 427] intentionally omitted <==

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

Hong Kong/China (ICT) NT$ bn
Product sales
156.7 157.0 ↑ 5%
142.1
135.4
128.9
IC components NT$ bn
Product sales
92.3
88.7
85.9
74.0
↑ 4%
55.8
----- End of picture text -----

52 2016 Annual Review

2) Supply-demand and growth of the future market

2017 Global equipment shipments (including PC, tablet computer, Ultramobile and mobile phone) are expected to reach 2.3 billion units, representing 0.9% growth from 2016 and they are expected to reach 2.4 billion units in 2018, according to market research institute, Gartner, Inc. The device market in 2017 remains affected by the economic development of each country. Gartner believes the challenges faced by manufacturers are that the market can no longer be divided as simply as “mature market” and “emerging market.” According to today’s economic development, the market has started to change and should be broken down into four categories, namely economically challenged mature market, economically stabilized mature market, economically challenged emerging market, and economically stabilized emerging markets. For example, Russia and Brazil are classified as economically challenged emerging markets; India is classified as an economically stabilized emerging market, and Japan is classified as an economically challenged mature market.

The global traditional PC shipments are expected to reach 205 million units in 2017, representing 5.1% decline from 2016 and are expected to reach 199 million units in 2018, representing 2.9% decline from 2017. The shift from PCs to tablet computers will continue to decline.

The global shipment of Ultramobile is expected to reach 230 million units and 250 million units in 2017 and 2018, respectively, representing an increase of 4% and 6% over the previous year. PC manufacturers are facing competition for survival. When it comes to selecting tablet computers or PCs, as consumers and corporations tend to prefer the ones that are closest to their usage patterns, Ultramobile PCs (hybrid and clamshell laptop) therefore have become the new market’s newfound rising star.

Mobile phones have become the largest and most profitable division in the global installation device market. Sales are expected to grow by 1.2% in both 2017 and 2018 for 1.91 billion and 1.93 billion units, respectively. Over the past few years, the average price of high-end phones continuing to go up has caused the price of mobile phone to go up too. However, due to the saturation of the smart phone market, added with local branded mobile phone manufacturers in the emerging markets and Made-in-China mobile phones with better prices and better functions offered to satisfy the needs of mobile phone users, the average price of mobile phones is gradually declining.

Type	2016	2017(Estimate) 2018(Estimate)
	Million units	Million units Growth rate(%) Million units Growth rate(%)
Traditional PC (desktops and laptops)	216	205 -5.1 199 -2.9
Ultramobile*	225	234 4.0 248 6.0
Mobile phones	1,887	1,910 1.2 1,933 1.2
Total	2,328	2,349 0.9 2,380 1.3

Ultramobile means all Ultramobile Basic and Utility devices

Traditional PC

Gartner’s research indicates that 85 million PCs were sold in the Asia-Pacific region in 2016, representing 6.6% decline from 2015. Sales amounted to US$47.5 billion, representing 5.1% decline. A total of 84 million units of PCs are expected to be sold in the Asia-Pacific region in 2017, representing a 0.7% decline from 2016 for sales amounting to US$46.9 billion, representing a 1.3% decline. 84 million PCs will be sold in 2018, representing 0.3% decline from 2017. Sales amounted to US$46.5 billion, representing 0.8% decline.

Operation highlights 53

Shipments of the PC market in the Asia Pacific region (exclusive of Japan) in 2016 ~ 2018 are as follow:

Asia-Pacific region Traditional PC
	2016	2017 (Estimate) 2018 (Estimate)

	1,000 units/USD million Growth rate(%)	1,000 units/USD million Growth rate(%)1,000 units/USD million Growth rate(%)
Shipment volume	84,700 -6.6	84,090 -0.7 83,810 -0.3
Amount	47,491 -5.1	46,851 -1.3 46,464 -0.8

Source of information: Gartner Dataquest

Ultramobile

Gartner’s research indicates that 59 million Ultramobile were sold in the Asia-Pacific region in 2016, representing a decline of 10.1% from 2015. Sales amounted to US$20.7 billion. The tablet device market has become saturated due to the popularity of tablet devices and the extended recycling period of the tablet device. A total of 60 million units of Ultramobile are expected to be sold in the Asia-Pacific region in 2017, representing a growth of 1.7% from 2016 for sales amounting to US$22.1billion, representing a 6.8% growth. A total of 610 thousand units are expected to be sold in 2018, representing a decline of 0.7% from 2017, for sales amounting to US$23.0 billion, representing 4.0% growth.

Shipments of the Tablet PC in the Asia Pacific region (exclusive of Japan) in 2016 ~ 2018 are as follow:

Asia Pacific region Ultramobile
	2016		2017(Estimate) 2018(Estimate)

	1,000 units/USD million	Growth rate(%)	1,000 units/USD million Growth rate(%)1,000 units/USD million	Growth rate(%)
Shipment volume	59,300	-10.1	60,320 1.7 60,770	0.7
Amount	20,691	11.9	22,103 6.8 22,982	4.0

Source of information：Gartner Dataquest

Mobile phone

Gartner’s research indicates that 990 million mobile phones were sold in the Asia-Pacific region in 2016; representing a decline of 0.4% from 2015. Gartner forecasts the shipment of mobile phones in the Asia-Pacific region in 2017 to grow by 2.1% from 2016 for a total of 1.010 billion units sold. A total of 1.031 billion units are expected to be shipped in 2018, representing a 2.0% growth from the year of 2017.

Cellular phone sales in the Asia-Pacific region (excluding Japan) in 2016~2018 are estimated as follows:

Asia-Pacific mobilephone
	2016	2017 (Estimate) 2018 (Estimate)

	1,000 units Growth rate(%)	1,000 units Growth rate(%) 1,000 units Growth rate(%)
Shipment volume	989,710 -0.4	1,010,690 2.1 1,031,010 2.0

Source of information: Gartner Dataquest

Basic information in each region:

Region	Population(million)	GDPper capita(US$)	2016 economicgrowth rate(%)	Source of information
Taiwan	23.5	23,800	1.0	National Statistics, R.O.C.
China	1,373.5	8,900	6.6	CIA/StockQ
Hong Kong	7.2	44,100	1.4	CIA/StockQ
Australia	23.0	54,200	2.9	CIA/StockQ
Indonesia	258.3	3,900	4.9	CIA/StockQ
Thailand	68.2	5,800	3.2	CIA/StockQ
India	1,266.9	1,900	7.6	CIA/StockQ

A negative number.

54 2016 Annual Review

▪ Taiwan

Traditional PC

Gartner’s research indicates that 2.14 million units of traditional PCs were sold in Taiwan in 2016, representing a 8.9% decline from 2015. Sales of PCs in 2017 are expected to be 2.19 million units, representing a 2.3% growth. The sale of PCs in 2018 is expected to be 2.20 million units sold, representing a 0.5% growth; also, the sales amount will reach US$1.2 billion (0.2% decline).

Taiwan Traditional PC	2016	2017(Estimate) 2018(Estimate)
	1,000 units/USD million Growth rate(%)	1,000 units/USD million Growth rate(%)1,000 units/USD million Growth rate(%)
Shipment volume	2,140 -8.9	2,190 2.3 2,200 0.5
Amount	1,183 -21.2	1,199 1.4 1,197 -0.2

Source of information: Gartner Dataquest

Ultramobile

Gartner’s research indicates that 1.54 million units of Ultramobile were sold in Taiwan in 2016, representing a decline of 4.3% from 2015. Sales of tablet PCs in 2017 is expected to be 1.82 million units, representing 18.2% growth, for sales amounting to US$0.9 billion, representing 22.8% growth and the same for 2018 is 1.85 million units, representing 1.6% growth, for sales amounting to US$0.96 billion, representing 6.3% growth.

Taiwan tablet PC
	2016	2017 (Estimate) 2018 (Estimate)

	1,000 units/USD million Growth rate(%)	1,000 units/USD million Growth rate(%)1,000 units/USD million Growth rate(%)
Shipment volume	1,540 -4.3	1,820 18.2 1,850 1.6
Amount	734 35.4	901 22.8 958 6.3

Source of information：Gartner Dataquest

Mobile phone market

Gartner’s research indicates that 9.88 million units of mobile phones were sold in Taiwan in 2016, representing 0.9% growth from 2015. The estimated shipment in 2017 is approximately 9.98 million units, representing 1.0% growth. The estimated shipment in 2018 is approximately 9.98 million unit.

Taiwan mobilephone	2016	2017(Estimate) 2018(Estimate)
	1,000 units Growth rate(%)	1,000 units Growth rate(%) 1,000 units Growth rate(%)
Shipment volume	9,880 0.9	9,980 1.0 9,980 0.0

Source of information: Gartner Dataquest

Operation highlights 55

▪ China

Traditional PC

Gartner’s research indicates that 51.65 million units of traditional PCs were sold in China in 2016, representing a decline of 5.9% from 2015. Sales of PCs in 2017 are expected to be 51.05 million units, representing a decline of 1.2% and the same for 2018 is 50.81 million units, representing a decline of 0.5%.

China Traditional PC	2016	2017(Estimate) 2018(Estimate)
	1,000 units/USD million Growth rate(%)	1,000 units/USD million Growth rate(%)1,000 units/USD million Growth rate(%)
Shipment volume	51,650 -5.9	51,050 -1.2 50,810 -0.5
Amount	29,528 2.5	29,199 -1.1 29,122 -0.3

Source of information: Gartner Dataquest

Ultramobile

Gartner’s research indicates that 27.51 million units of Ultramobile were sold in China in 2016, representing a decline of 8.8% from 2015, but for sales amounting represented a 9.9% growth. Sales of Ultramobile in 2017 are expected to be 29.10 million units, representing a decline of 5.8 %, for sales amounting to US$10.5 billion, representing 8.5% growth and the same for 2018 is

29.88 million units, representing a decline of 2.7%, for sales amounting to US$11.1 billion, representing 6% growth.

China Ultramobile	2016	2017(Estimate) 2018(Estimate)
	1,000 units/USD million Growth rate(%)	1,000 units/USD million Growth rate(%)1,000 units/USD million Growth rate(%)
Shipment volume	2,751 -8.8	2,910 5.8 2,988 2.7
Amount	9,664 9.9	10,484 8.5 11,116 6.0

Source of information: Gartner Dataquest

Mobile phone

With a population second to none in the world, a growing GDP and the popularization of 3G and 4G networks, feature phones can no longer meet the desires of Chinese people. Smart phones are growing accordingly to catch up with the rapidly rising market. On top of it, the popularization of smart phones has extended from 1[st] tier cities to 2[nd] tier cities. Smart phones have replaced feature phones to become the mainstream product in the market. The prevalence of 4G telecom business has attracted 2G users and they are shifting to 3G and 4G which has become the mobile phone growth momentum in China. Smart phones have rooted their growth trend in 2017. Sales of mobile phones are expected to reach 454 million units in 2017, representing a

growth of 0.2% and the same for 2018 is 452 million units, representing a decline of 0.3%.

China mobilephone	2016	2017(Estimate) 2018(Estimate)
	1,000 units Growth rate(%)	1,000 units Growth rate(%) 1,000 units Growth rate(%)
Shipment volume	452,820 2.3	453,720 0.2 452,440 -0.3

Source of information: Gartner Dataquest

▪ Australia

Traditional PC

Australia’s ICT industry is a pioneer in global e-learning and information technology services with a leading position secured in the fields of wireless telecommunications and smart transmission systems. Australia’s ICT is ranked tenth in the global market. Gartner’s research indicates that the total sales volume of PCs in 2016 was 2.95 million units, a decline of 14% from 2015. In 2017 and 2018, 2.85 million units and 2.76 million units of traditional PCs are expected to be shipped, respectively.

56 2016 Annual Review

Australia Traditional PC	2016	2017(Estimate) 2018(Estimate)
	1,000 units/USD million Growth rate(%)	1,000 units/USD million Growth rate(%)1,000 units/USD million Growth rate(%)
Shipment volume	2,950 -14.0	2,850 -3.4 2,760 -3.2
Amount	2,346 -23.8	2,212 5.7 2,099 -5.1

Source of information: Gartner Dataquest

Ultramobile

Gartner’s research indicates that 3.92 million units of Ultramobile were sold in Australia in 2016, representing a decline of 7.3% from 2015. Sales of Ultramobile in 2017 are expected to be 4.10 million units, representing a growth of 4.6% and the same for 2018 is 4.12 million units, representing 0.5% growth.

Australian Ultramobile	2016	2017(Estimate) 2018(Estimate)
	1,000 units/USD million Growth rate(%)	1,000 units/USD million Growth rate(%)1,000 units/USD million Growth rate(%)
Shipment volume	3,920 -7.3	4,100 4.6 4,120 0.5
Amount	2,342 16.1	2,531 8.1 2,595 2.5

Source of information: Gartner Dataquest

▪ Indonesia

Traditional PC

As the world’s fourth largest country in population and with more than 6% annual economic growth in recent years, Indonesia has vigorous domestic market demand. According to IDC, the current PC penetration in Indonesia is only 9%, far below standard in the world. However, the increasing consumer incomes are expected to stimulate the traditional PC market, which marks the country as having high potential in terms of market scale and profitability. On top of it, Telkom Indonesia is planning a US$600 million project to expand optical fiber networks in Indonesia that will drive up the growth in the local PC market.

Indonesia Traditional PC	2016		2017(Estimate) 2018(Estimate)	2017(Estimate) 2018(Estimate)
	1,000 units/USD million	Growth rate(%)	1,000 units/USD million Growth rate(%)1,000 units/USD million	Growth rate(%)
Shipment volume	3,530	-12.2	3,600 2.0 3,650	1.4
Amount	1,856	0.2	1,870 0.8 1,865	-0.3

Source of information: Gartner Dataquest

Ultramobile

Gartner’s research indicates that 4.16 million units of Ultramobile were sold in Indonesia in 2016, representing a decline of 17.3% from 2015. Sales of Tablet PCs in 2017 are expected to be 3.90 million units, representing 6.3% decline, for sales amounting to US$1.05 billion, representing 7.1% growth and the same for 2018 is 3.82 million units, representing a 2.1% decline, for sales amounting to US$1.09 billion, representing 3.7% growth.

Indonesia Ultramobile	2016	2017(Estimate) 2018(Estimate)
	1,000 units/USD million Growth rate(%)	1,000 units/USD million Growth rate(%)1,000 units/USD million Growth rate(%)
Shipment volume	4,160 -17.3	3,900 -6.3 3,820 -2.1
Amount	983 19.9	1,053 7.1 1,092 3.7

Source of information: Gartner Dataquest

Operation highlights 57

▪ Thailand

Traditional PC

With multiple investment incentives and guidance measures supported by the government, coupled with its critical location in

ASEAN, “The Great Mekong Sub-region” and “golden corridor”, Thailand's e-commerce is growing rapidly. Furthermore, thanks to new government support to mega-projects and increasing awareness of information technology, the importance of information technology to business and individual is also on the rise. Gartner expects sales of traditional PC in 2017 to reach 2.46 million units and 2.47 million units in 2018.

Thailand Traditional PC	2016	2017(Estimate) 2018(Estimate)
	1,000 units/USD million Growth rate(%)	1,000 units/USD million Growth rate(%)1,000 units/USD million Growth rate(%)
Shipment volume	2,460 3.4	2,460 0.0 2,470 0.4
Amount	1,076 -8.7	1,060 -1.5 1,037 -2.2

Source of information: Gartner Dataquest

Ultramobile

Gartner’s research indicates that 2.61 million units of Ultramobile were sold in Thailand in 2016, representing a decline of 12.7% from 2015. Sales of Ultramobile in 2017 are expected to be 2.47 million units, representing 5.4% decline, for sales amounting to US$0.6 billion, representing 1.0% growth and the same for 2018 is 2.44 million units, representing 1.2% decline, for sales amounting to US$0.61 billion, representing 2.2% growth.

Thailand Ultramobile	2016	2017(Estimate) 2018(Estimate)
	1,000 units/USD million Growth rate(%)	1,000 units/USD million Growth rate(%)1,000 units/USD million Growth rate(%)
Shipment volume	2,610 -12.7	2,470 -5.4 2,440 -1.2
Amount	605 12.2	599 1.0 612 2.2

Source of information: Gartner Dataquest

▪ India

Traditional PC

According to the global economic outlook report published by the Center for Economics and Business Research (CEBR), India has the potential to become the world’s fourth largest economy in 2022. With the number of internet users growing at an unstoppable speed, the demand for ICT products is also growing steadily. India is expected to become the world’s fastest growing country in terms of IT industry in the future years. Sales of traditional PC in 2017 are expected to be 8.47 million units and 8.63

million units in 2018.

India Traditional PC	2016	2017(Estimate) 2018(Estimate)
	1,000 units/USD million Growth rate(%)	1,000 units/USD million Growth rate(%)1,000 units/USD million Growth rate(%)
Shipment volume	8,320 -15.0	8,470 1.8 8,630 1.9
Amount	4,330 -11.7	4,371 0.9 4,405 0.8

Source of information: Gartner Dataquest

Ultramobile

Gartner’s research indicates that 5.04 million units of Ultramobile were sold in India in 2016, representing a decline of 6.7% from 2015. Sales of Ultramobile in 2017 are expected to be 4.67 million units, representing 7.3% decline and the same for 2018 is 4.60 million units, representing 1.5% decline.

58 2016 Annual Review

India Ultramobile	2016	2017(Estimate) 2018(Estimate)
	1,000 units/USD million Growth rate(%)	1,000 units/USD million Growth rate(%)1,000 units/USD million Growth rate(%)
Shipment volume	5,040 -6.7	4,670 -7.3 4,600 -1.5
Amount	1,220 45.2	1,235 1.2 1,282 3.8

Source of information: Gartner Dataquest

Synnex has become a leading distributor of IT products and services in Taiwan, its overseas subsidiaries and long-term investments showed impressive results. The local ranking of its subsidiaries in 2016 is as follows:

Region	Ranks of distributors
HongKong (subsidiary)	1
China(subsidiary)	2
Australia(subsidiary)	1
Indonesia(subsidiary)	1
Thailand(re-investment)	1
India(re-investment)	2

IC components market

For the effective operation of the semiconductor industry’s supply chain, the manufacturers of upstream semiconductor parts have product technology services provided to downstream manufacturers through the support of distributors, in order to concentrate on developing next-generation products and to create a more sophisticated competitiveness and market opportunities. Distributors are able to bring flexible payment terms to downstream manufacturers, reduce inventory loading, shorten the components supply process effectively, and extend to new product development and technical support services. Under these preconditions, a distributor management model must be innovated continuously to provide customers with Total Solutions in order to obtain profits and pursue sustainable business.

Component distributors in Taiwan have targeted the Asia Pacific market with services provided to main customers, including motherboard manufacturers, system manufacturers, module manufacturers, the PC industry, digital consumer products industry, telecommunications industry, Internet industry, and consumer electronics products industry. Due to continuous innovation and development, market demand for related components is growing. Taiwan and China are the world’s major production bases for personal computers, cellular phones, and network equipment; therefore, the total market demand cannot be overlooked, in which, memory modules, all kinds of driver ICs, wireless telecommunications, Broadband Internet, digital processing ICs, passive elements, optoelectronic elements, and LCD panels are the keys to growth. In addition, China industry increasingly depends on Taiwan products; therefore, the growing demand for smartphones and tablet PCs mean future development opportunities for the IC components industry.

3) Positive factors for our future development

Extensive development potential in the emerging markets

Though the competition is fierce in the emerging market, including Mainland China, India, Thailand, and Indonesia, that we have entered in, the overall market environment has gradually become mature and compliant, and the robust operating and management systems have demonstrated extensive advantages to increase the market share. The countries and regions that we have not entered in have great growing potential for us to develop.

Operation highlights 59

Integration of the brand manufacturers and the bigger in the economic scale, the bigger the growth potential will be

In recent years, information and communications brand manufacturers have sped up the integration and the formation of alliances between leading manufacturers and distributors has become a trend to create a bigger economic scale, lower operating cost, and more efficient collaboration. The economy of scale is not only helpful in the consolidation of the market position, but also accelerates the reduction of the operating cost and vice versa.

New technologies and application changing the market rules and creating new business opportunities

New applications are introduced to the market continuously as the technology progresses. They change the living style of the human beings and game rules. The mobile networking, cloud service, and IoT, among other technological applications, are currently the most obvious examples. For Synnex, this is a challenge that brings us new opportunities.

Continuously increasing of customers’ demand to "small quantity, various types and one stop shopping"

A variety of Synnex’s products offer the convenience of “small quantity, various type and one stop shopping” to customers so as to lower their inventory risk resulted from a short life cycle of IT and Telecom products and price variation while saving time and cost for suppliers. This is one of Synnex’s major feature and the service that other suppliers and agents cannot offer.

Provide quality service in the slim-profit era

Distributors’ profit is close to none in this slim-profit era, thus, quality service determines who wins the game. Synnex’s operating strategy is “to be a professional channel business service provider with integrated services provided to the high-tech industrial chain” in response to the industrial chain development trend and the service demands of the upstream and downstream manufacturers, provide solutions for operational problems, continue to research and develop innovation service mechanism, gradually enhance close cooperation with upstream and downstream manufacturers, and establish the Company’s indispensable role in the industrial value chain.

60 2016 Annual Review

4) Negative factors for our future development and our countermeasures

Negative factors		Countermeasures
The regional chain reaction and interaction is enhanced under	1.	Diversify risk and reduce the impact of natural disaster and economic and political turbulence
the trend of globalization; also, the impact of local natural		through multi-nation, multi-product, and multi-channel business strategy.
disaster or economic and political turbulence is broadened.	2.	Focus on the operation of the industry, commit to upgrade internal operational management,
		strengthen the constitution of the enterprise, and build up ability for withstanding the
		environment variables and systematic risk.
Short life cycle of products	1.	Utilize ERP information management system to manage purchase, sales and inventory so as to
The rapid advancement of technology has facilitated the speed of		lower inventory weeks and increase number of turnover and meet the target of inventory
products innovation, thus product cycle is shortened to half year		optimization.
and resulted in uncertainty of sales performance and increased	2.	Adjust inventory weeks in according with the development of life cycle of the respective
inventory risk.		products to avoid over-stocking and interest burden.
	3.	Remove the no-value item to avoid diversified concentration of management.
	4.	Follow up product and technology development, in addition to popular products, introduce
		next-star products at appropriate timing to optimize product combination, control product
		opportunityand lower management risk.
Era of marginal profit, profit is low and hard to improve	1.	Committed to improve operational efficiency, continue to reduce operating costs, and increase
Mature technology and transparent information cause 3C industry		market share with the advantage of low-cost in order to maintain stable profitability.
upstream and downstream to work for marginal profit and with	2.	Compute product cost structure through precise operation analysis and develop accurate
difficulty in improving profit.		product strategies.
	3.	Enhancement of operatingcontrol through computer systems to reduce loss ofgross earnings.

5) Essential Purposes of Major Products

	Majorproducts Use
IT related Products	Personal Computer Note Book, Home Computer, Business Computer, Server, Mini Mobile Computer Personal or commercial Data Processing Equipment
	Tablet Computer Multimedia Tablet, Ebook Entertainment, data processing equipment for personal or commercial use
	Computer Component Main board, Graphics Card, Inputs/Outputs Control Card, Keyboard,Power Supply,Case,CoolingFan Major components for custom built PC
	Prin tingDevice InkJet Printer, Laser Printer, Multi-Function Printer, Photo Printer,3D Printer Computer printing device
	DisplayDevice LCD Monitor Computer displaydevice
	Storage Device Hard Disk Drive, Floppy Disk Drive, Tape Drives, CD Rewritable Drive Computer storage device
	Input Device Scanner,Digital Camera Computer input device
	Multimedia Products CD-Rom Drive, Sound Card, Video Card, Multemedia Suite, CD-ROM machine, CD Software, Leisure Software, Multimedia Speaker,PC Camera,LCD Projector Processing device and software for multimedia audio, image and information
	Networking Product Network Card, Routers, Bridge, Internet Connected Device, Uninterruptible Power Supply, Modem, Network Operating System, Wireless Network System, Wireless Base Station, Broadband Router Networking device and operating software
	Application Software Operating System, Electronic Spreadsheet, Word Processing, Integration Software, Database, Utilities Software, Anti-Virus Software and other application software Activation or Application Utilities Software
	Consumables Mouse, Floppy Disks, CD-ROM, Inked Ribbons, Ink Cartridges, Toner Cartridges, Purchase equipment, consumables Consumables and purchased goods of computer storage, printing and input devices
Digital Products	LCD TV, Xbox Game Consoles and Software, DVD, Digital Cameras, Smart Wearable Device, Smart TV Dongle, GPS Navigation System, Event Data Recorder, Electronic Lock, Anti-thief Safe, Drone, and Webcam Personal or home digital products
Telecom Products	General Telecom Products Mobile Phone, Consumables & Accessories for Mobile Phone, Fax Machine and Mobile Power Supply Consumable communication products for personal or commercial use
IC Components	CPU, Memory, Logic, Audio, Visual, Multimedia Processing Components, Industrial Components, Linear Components, Optoelectronic Components, Information Appliance Components,LCD Panel Integrated circuit and components for the manufacturing of personal computer and electronic products

Operation highlights 61

VI. Employees

1) Number of employees in group

Year Item	2015.12.31	2015.12.31	2015.12.31	2016.12.31	2016.12.31	2016.12.31	2017.04.30	2017.04.30	2017.04.30
		Overseas		Taiwan	Overseas			Overseas
	Taiwan		Total			Total	Taiwan		Total
		subsidiaries			subsidiaries			subsidiaries

Full time employees	1,255	3,371	4,626	1,775	3,473	5,248	1,778	3,476	5,254
Part-time employees	45	208	253	109	175	284	99	202	301
Total	1,300	3,579	4,879	1,884	3,648	5,532	1,877	3,678	5,555

2) Employees information of Synnex

Item	Year
		2015.12.31	2016.12.31	2017.04.30


Number of employees in group	Sales	2,362	2,609	2,590
	Operators	491	772	796
	Computers	203	222	224
	Administrators	585	620	613
	Logistics	985	1,025	1,031
	Total	4,626	5,248	5,254
Average age		34.2	34.3	34.9
Averageyears of servi	ce in company	5.8	6.1	6.3
Education (%)	Doctoral degree	-	0.1	0.1
	Master’s degree	5.9	5.8	5.8
	College	82.0	83.5	83.3
	High school	11.1	9.8	10.0
	Below high school	1.0	0.5	0.9

Note: Part-time employees are not included.

VII. Report on environmental protection and related expenditures

Though distribution industry is not categorized as highly polluted industry, based on the believe that earth is part of

ourselves, Synnex devoted to fulfill its environmental protection responsibility,

Obtained ISO 14001 Certification of Environment at Management System:

ISO 14001 Certification of Environment at Management System is recognized internationally as the highest standard of

environmental management. Synnex’s CTO assembly plant has a complete environmental management policy, process and monitoring mechanism, it has obtained as early as 1999 and has successfully passed the annual inspection thereafter.

Environmental consideration of packaging materials:

Quality control of logistics operation department is placed in Synnex’s logistics center, one of its function is to achieve the

minimum use of packaging materials in logistics operation so as to reduce environmental burden and cost of packaging material, for example: re-using paper boxes, using non-toxic or biodegradable material in shipment packaging and establishing recycling mechanism to effectively reduce usage of packaging material.

62 2016 Annual Review

VIII. Labor relations

Welfare and benefits for employees

In addition to participating in labor insurance and national health insurance in Taiwan, Synnex also purchases group life insurance for its employees and established the Employee Benefits Committee, arranged various group construction activities and established a health-promoting environment, and provides employees with sufficient securities and a secured work environment to attract employees’ devotion. In terms of overseas subsidiaries, the employee welfare system was established in accordance with the regulations and environment of the foreign country.

Retirement system

Synnex has reemployment retirement matters handled in accordance with the requirements of the Labor Standards Law and Labor Pension Act with the Employee Pension Reserve Committee formed. The new pension system has been implemented in accordance with the Labor Pension Act since July 2005 with pensions reported and withheld in the personal pension account with the Bank of Taiwan according to the related regulations so that employees can work for the Company permanently without any worry. In terms of overseas subsidiaries, pension reserves are appropriated and withheld periodically in accordance with the regulations and environment of the foreign country.

Labor agreement

In addition to normal organizational system, labor-employee relations can be communicated through regular competency assessment system, labor-management meeting and employee welfare committee in order establish channel of communication between employees and management and generate harmony atmosphere in the Company. No significant labor dispute or loss has occurred in 2016 and 2017 up to now.

Employee training

As Synnex regards employees as important intangible asset, thus has devoted to employee training, a complete employee training system has been constructed after years of effort (see below graph). It is believed that the outstanding employee quality will be one of the major advantages in Synnex’s future competition.

==> picture [451 x 258] intentionally omitted <==

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

Training method and channel Actual practice Show results Final goal (7P)
Case Guidance Foster the capacity and habit of "sort → Raising capacity level Professionalism
▪▪ On Job Training of Project execution executive guidance analyzethrough systematic practicing → realization" Capable → Excellent Good → Excel → Planning
Education in knowledge
Improve professional capacity
(Tangible training
courses) ▪ New-recruit report Perfection
▪ Training of scheme (Learning ability+
▪ Professional training and operational system ▪ Duty transfer report professional knowledge+ execution ability) development → Parallel Performance
▪ Training of
professional functions ▪ Monthly report
(Including expatriate
training) meeting Profit
▪ Functional training…. Strengthen capacity
▪ Promotion report
Education in concept and
(Intangible dissipation method ▪ Supervision Single sided → Multiple sided Pleasure
method)
promotion report
▪▪ Synnex EMBA Selective concept and ▪ ”System for Tangible → Intangible Prestige
▪ 3% transcendence articles evaluation of Short term → Long term
▪ Department meeting self-advancement Absolute → Relative
……….
Employee
----- End of picture text -----

Financial information 63

Financial information

I. Consolidated condensed balance sheet for the past five years .......................................................................... 64
II. Consolidated income statement/condensed income statement for the past five years ..................................... 65
III. Name of CPA and their audited opinions in the latest five years ...................................................................... 66

Financial information 64

Financial information

I. Consolidated condensed balance sheet for the past five years

			Unit: NTD million
Item / Year	ROC GAAP	IFRS
	2012 2012 2013 2014	2015*	2016*
Current assets	94,597 97,669 102,131 111,760	108,630	102,183
Fixed assets/Property, plant and equipment	4,656 4,715 5,848 6,737	7,061	6,835
Intangible assets	1,340 407 408 413	450	703
Funds and investments/Other assets	14,031 14,413 16,068 17,006	18,646	18,110
Total assets	114,624 117,204 124,455 135,916	134,787	127,831
Current liabilities
Before distribution	68,527 71,115 80,664 84,996	90,345	83,323
After distribution	71,701 74,289 85,112 90,238	92,728	84,991
Long term and other liabilities/Noncurrent liabilities	5,139 5,296 442 4,712	567	626
Total liabilities
Before distribution	73,666 76,411 81,106 89,708	90,912	83,949
After distribution	76,840 79,585 85,554 94,950	93,295	85,617
Equity attributable to shareholders of theparent	40,958 40,793 42,584 45,327	42,818	42,572
Capital stock	15,839 15,839 15,885 15,885	15,885	16,679
Capital reserve	13,975 14,030 14,265 14,331	14,140	14,196
Retained earnings
Before distribution	12,815 12,290 14,400 14,986	12,920	14,534
After distribution	9,641 9,116 9,952 9,744	10,537	12,866
Other adjustments on Stockholder’s equities/Other equity	(1,671) (1,366) (1,966) 124	(127)	(2,837)
Treasury stock	- - - -	-	-
Non-controlling interests	- - 764 882	1,057	1,310
Total shareholder’s equity
Before distribution	40,958 40,793 43,348 46,208	43,875	43,882
After distribution	37,784 37,619 38,900 40,966	41,492	42,214

Financial statement of the respective years has been audited.

** Asset revaluation had not been processed in the last five years.

*** The amount after distribution of the respective years was based on the resolution of the Annual Shareholders’ meeting in the following

year, except for 2016, based on the board resolution in the following year.

Financial information 65

II. Consolidated income statement/condensed income statement for the past five years

five years
		(Except for earni	Unit: NTD million. ngsper share in NTD)
Item / Year	ROC GAAP	IFRS
	2012 2012 2013 2014	2015*	2016*
Operating revenues	312,585 312,585 330,260 331,533	322,133	342,696
Gross Profit	11,532 11,532 11,059 11,525	11,592	12,131
Operating income	4,472 4,558 3,879 4,450	3,949	4,269
Non-operating income and expenses	2,429 2,294 2,513 1,767	(211)	1,456
Net income before tax	6,901 6,853 6,392 6,217	3,738	5,725
Net income from continuing department	5,816 5,767 5,433 5,255	3,419	5,124
Loss from discounted department	- - - -	-	-
Net income	5,816 5,767 5,433 5,255	3,419	5,124
Other comprehensive income (net of tax)	NA (1,474) (590) 1,986	(318)	(2,724)
Total comprehensive income	NA 4,293 4,843 7,241	3,101	2,400
Net income attributable to shareholders of theparent	NA 5,767 5,274 5,024	3,186	4,876
Net income attributable to non-controllinginterests	NA - 159 231	233	248
Total comprehensive income attributable to shareholders of the parent	NA 4,293 4,684 7,124	2,926	2,147
Total comprehensive income attributable to non-controllinginterests	NA - 159 117	175	253
Earnings per share - before retroactive adjustment	3.69 3.66 3.32 3.16	2.01	2.92
- after retroactive adjustment***	3.51 3.48 3.17 3.01	1.91	2.92

Financial statement of the respective years has been audited.

** Retroactive adjustment is made with the stock shares from earnings, capital reserve, and employees’ bonus as of December 31, 2016.

66 2016 Annual Review

III. Name of CPA and their audited opinions in the latest five years

Auditing year	Name of CPA firm	Name of CPA Audited opinions
2011 2012 2013 2014 2015 2016	PricewaterhouseCoopers PricewaterhouseCoopers PricewaterhouseCoopers PricewaterhouseCoopers PricewaterhouseCoopers PricewaterhouseCoopers	Jenny Yeh, Tseng, Hui-Chin Modified unqualified audited opinion Jenny Yeh, Tseng, Hui-Chin Modified unqualified audited opinion Jenny Yeh, Tseng, Hui-Chin Modified unqualified audited opinion Eric Wu, Chou, Chien-Hung Modified unqualified audited opinion Eric Wu, Chou, Chien-Hung Modified unqualified audited opinion JennyYeh, Eric Wu Unqualified audited opinion

Financial status, results of operations & risk management 67

Financial status, results of operations & risk management

I.	Analysis and review of financial position and results of operations ................................................................. 68
1)	Analysis of financial position ................................................................................................................................. 68
2)	Analysis of the results of operation ........................................................................................................................ 69
3)	Liquidity analysis ................................................................................................................................................... 70
4)	Important capital expenditure in the most recent calendar year and its effect on the company’s operational and
	financial situation ................................................................................................................................................... 70
5)	Review and analysis of investment ......................................................................................................................... 71
II.	Risk management ................................................................................................................................................. 72
1)	Changes in interest and foreign exchange rates and inflation all exert a material effect on profit/loss of the
	Company and call for appropriate measures by the company to protect itself ........................................................ 72
2)	High risk, high leverage investment, granting loans to outsiders, doing endorsement and guarantees and
	derivatives trading .................................................................................................................................................. 72
3)	Others ..................................................................................................................................................................... 73
4)	Summarized operating results of group enterprises ................................................................................................ 74

68 2016 Annual Review

Financial status, results of operations & risk management

I. Analysis and review of financial position and results of operations

1) Analysis of financial position

	Unit: NTD million
Item / Year 2015 2016	Increase(Decrease) (%)
	Amount %
Current assets 108,630 102,183 Investments under equity method 11,161 11,132 Properties, plants and equipment 7,061 6,835 Intangible and other assets 7,935 7,681	(6,447) (6) (29) (3) (226) (3) (254) (3)
Total assets 134,787 127,831	(6,956) (5)
Current liabilities 90,345 83,323 Non-current liabilities 567 626	(7,022) (8) 59 10
Total liabilities 90,912 83,949	(6,963) (8)
Capital stock 15,885 16,679 Capital reserve 14,140 14,196 Retained earnings 12,920 14,534 Other shareholder’s equity (127) (2,837)	794 5 56 - 1,614 12 (2,710) (2,134)
Non-controlling interest 1,057 1,310	253 24
Total shareholder’s equity 43,875 43,882	7 -

Analysis:

Current assets and current liabilities (↓NTD6,447million, 6%; ↓NTD7,022 million, 8%)

The decrease in current assets is mainly due to the decrease of cash and cash equivalent by NTD6,424 million (↓46%). The decrease in current liabilities is mainly due to the decrease of short term borrowing by NTD8,966 million ( ↓ 19%), the reasons are:

For the increase in notes and accounts receivable and payable, in terms of the business cycle days, days sales in accounts receivable and days average payment days for 2016 were 51 days and 34 days, respectively; also, inventory turnover days were 39 days, and net business cycle days were 56 days (days sales in accounts receivable + inventory turnover days- average payment days) that was same as the year 2015. In addition to continuing the implementation of the Group’s effective management of accounts receivable and inventory, with the advantage of expanding Group purchasing, future efforts remain committed to seeking an extension of payment terms from suppliers or a higher purchase discount.
The net loan outstanding (short-term loan + short-term bills payable + long-term loan due in one year + corporate bond payable + long-term loan - cash and cash equivalents) in 2016 amounted to NTD36,633 million that represented an decrease of NTD2,422 million from the NTD39,055 million in 2015 thanks to the appropriate management of receivables and inventories and increase of the cash inflows. The Group’s solvency indexes are good with sufficient borrowing quota to support short-term high funding needs; therefore, there is no problem in the short-term liquidity. In prospect of long-term funding needs, the financial leverage risk and return on equity will be considered equally, if necessary, funds will be raised from the capital market in time.

Capital stock (↑NTD784million, 5%)

Mainly due to distribution of dividends NTD0.5/share in 2016

Other shareholder’s equities (↓NTD2,710 million, 2,134%)

Mainly due to the negative figure in the conversion of the fluctuating foreign currencies from the accumulated long-term investments under the shareholder’s equity

Financial status, results of operations & risk management

2) Analysis of the results of operation

		Unit: NTD million
Item / Year	2015 2016	Increase(Decrease) (%)
		Amount %
Total revenue Operating cost Net gross profit Operating expense Operating income Non-operating revenue and expenditure Income before tax Income tax expense Net income	322,133 342,696 (310,541) (330,565) 11,592 12,131 (7,643) (7,862) 3,949 4,269 (211) 1,456 3,738 5,725 (319) (600) 3,419 5,125	20,563 6 20,024 6 539 5 219 3 320 8 1,667 790 1,987 53 281 88 1,706 50

Analysis:

Total revenue, Operating cost and Gross profit (↑NTD20,563 million , 6%; ↑NTD 20,024 million ,6%; ↑NTD539 million , 5%)

Synnex Taiwan saw revenue up by 29%; Hong Kong/China saw revenue up by 5%, Australia, New Zealand, and Indonesia revenue up by 1%. The scale of overseas market where subsidiaries operate is extensive but local industry is relatively uncompetitive due to lack of logistics operations or ERP information management systems, high growth forecast is maintained.

Gross margin ratio for the year is 3.5%, decrease by 0.1% from previous year.

Operating expenses (↑NTD219 million , 3%)

Mainly due to the increase of operating expense arising from the expansion of business scale. The operating expense rate had gone down from 2.37% in 2015 to 2.29% in 2016 which was relatively low compared to the operating expense rate of the other companies in this industry, indicating that the Company had actively controlled expense and expenditure and the effect of “economies of scale” was gradually showing.

Net operating income (↑NTD320 million , 8%)

To sum up, there was an increase in net operating income by NTD320 million in 2016. In the days to come, as the world as a whole is on the way to a period of tiny interests, the Group plans to focus in expanding revenue growth coupled with enhancing or maintaining net profit margins to maximize operating income and increase returns on equity (ROE).

Non-operating revenues and expenditures (↑NTD1,667 million , 790%)

The net foreign exchange loss was decreased by NTD1,718 million mainly due to less foreign currency loans to subsidies.

70 2016 Annual Review

3) Liquidity analysis

Analysis of cash flow changes

Unit: NTD million

Item / Year	2015	2016
Net cash(outflow) inflow from operating activities	(4,800)	8,256
Net cash outflow from investment activities	(1,149)	(738)
Net cash inflow (outflow) from financing activities	(2,795)	(11,811)

Analysis:

Operating activities

Cash flow from operating activities was changed from cash outflow to cash inflow, mainly due to increase of the consolidated net earnings in the current year and implementation of the stock management that reduces the inventory cash outflow.

Investing activities

Cash outflow from investing activities was decreased against the previous year, mainly due to the decrease of one-year or longer time deposit by NT$7.229 billion in 2016.

Financing activities

Cash flow from financing activities was increased from the previous year, mainly due to the repayment of short-term loans.

Plans to improve liquidity of cash holding and analysis of liquidity for 2016

Unit: NTD million

	Full year’s operating	Other activities Net cash inflow (3) Cash balance: end of period (1) + (2) + (3) Cash balance (Shortage) Amount	Cash deficiencymeasures
Cash balance:
	activities Net cash		Investment plan Financial plan
beginning of period (1)
	outflow (2)

13,899	8,256	(14,681) 7,474 (9,397)	- Bank loan

Analysis:

The Company has sufficient quota to meet the need of short term capital requirement, thus the Company does not have capital issue in short to mid-term.

Cash flow forecast of 2017

			Unit: NTD million
Cash balance: beginning of period (1)	Full year’s operating	Other activities Net cash outflow (3) Cash balance: period ending (1)+(2)+(3) Cash balance (Shortage) Amount	Cash deficiencymeasures Investment plan Financial plan
	activities Net cash
	inflow(2)
7,474	5,250	(1,550) 11,174 6,000	- -

Analysis:

The Company has sufficient credit line to meet the need of short term capital requirement, thus the Company does not have capital issue in short to mid-term.

4) Important capital expenditure in the most recent calendar year and its effect on the company’s operational and financial situation

Important capital expenditures and their funding

			Unit: NTD million
Planned item	Estimated or	Estimated end date of projects Total capital	Estimated or actual capital expenditure executions
	actual source
			2014 2015 2016 2017
	of funds

Establish/Expand logistics centers in all locations	own capital	Compile budget annually Compile budget annually	950 769 333 280

Expected benefits

The effective and quality back-office logistics operation is Synnex’s major competitive advantage, each logistics center has fully developed its effectiveness to facilitate the growth of Synnex’s business and establish solid foundation for future development. Synnex is planning to increase capital expenditure for overseas subsidiaries with a focus in China to meet the needs of rapid growth of business in the future.

Financial status, results of operations & risk management

5) Review and analysis of investment

Overall investment policy

Overall investment policy
	Unit: NTD million
	2016.12.31 Balance of investment Investment policy of the coming year
Item

Investment under equity method	11,132 The Group does not have any significant investment or disposition plan on Synnex Corporation(US),Redington Group (India),and Synnex Thailand.
Long-term investment – others and financial assets carried at cost	1,723 In addition to the disposition of non-performing minor investment, the Company does not have anyinvestment or dispositionplan.
Available-for-sale financial asset	1,557 It will be disposedgradually.

Review and analysis of important analysis

Unit: NTD million

Item	2016.12.31	2016
			Improvement	Investment plan of
	Percentage of	Investment Policy Major reason of operating profit or loss
			plan	the coming year
	shareholding	gain

Synnex Corporation (US)	10.31%	785 Long term holding The Company is categorized as IT product and communication channel service provider, its coverage including Europe, US and Japan. The Company’s net income was NTD7,456 million in 2016. Synnex recognized investment income under the equity method.	NA	No current investment or disposition plan.
Redington (India) Ltd. (India)	23.58%	505 Long term holding The Company is categorized as an IT and Telecom product distribution service provider, its coverage includes India, Middle-East and Africa. The Company’s net income was NTD2,142 million in 2016. Synnex recognized investment income under the equitymethod.	NA	No current investment or disposition plan.
Synnex (Thailand) Public Company Ltd. (Thailand)	40.00%	153 Long term holding The Company is categorized as an IT product and communication channel service provider, its coverage is focused solely in the Thailand market. The Company’s net income was NTD383 million in 2016. Synnex recognized investment income under the equitymethod.	NA	No current investment or disposition plan.
MiTAC Inc. (Taiwan)	18.36%	52 Long term holding The Company is categorized as a systematic integration value-added service provider. With cash dividend of NTD1.0 per share in 2015, it is recorded by Synnex in financial asset carried at cost and recognized as dividend income.	NA	No current investment or disposition plan.

72 2016 Annual Review

Risk management

1) Changes in interest and foreign exchange rates and inflation all exert a material effect on profit/loss of

the Company and call for appropriate measures by the company to protect itself

Risk items	Risk factors	Loss/gain caused byrisk factors Countermeasure
Interest	As interest rate remains low in recent years, the company adopts flexible financial leverage operation by raising capital at low cost to replace capital injection from its own capital and effectively increase return on equity. However, the fluctuation of interest rate may have certain risk on the Company’s operation. Balance of average net outstanding loans=average bond funds. * Net interest expense = interest expense – interest	Unit: NTD million 1. Financial leverage must be balanced with increase in return on equity; therefore, when financial leverage reaches certain target, the Company must raise capital from the market to reduce risk. 2. Regular evaluation and supervision of overseas subsidiaries’ financial leverage, when certain risk target is reached, the parent company must inject capital to reduce financing proportion. 3. Utilize the advantage of group’s size and performance to negotiate prime rate. 2015 2016 Change(%) Average loan 51,696 48,531 (6) Average net outstanding loans 33,431 37,844 13 Interest expense 831 657 (21) Net interest expense* (196) 227 216 loans-average cash and cash equivalent-average short term investment income –gain on disposal of bond funds
Foreign exchange	The characteristics of each product line is described below: IT products: Certain percentage of this product line is imported (mostly denominated in US$), sale of goods is mostly denominated in local currency, and there is certain exchange risk. Telecom products: Purchase and sales of goods locally and is denominated in local currency, therefore, no exchange risk. IC components: Certain percentage in this product line is imported (mostly denominated in US$), though certain percentage of sales is denominated in US$, there still remains certain degree of exchange risk.	Unit: NTD million 1. For NTD to US$, purchase US$ and transfer to term deposit when there is a purchase denominated in US$ and use the term deposit to settle goods payable to obtain total hedge. 2. The overseas subsidiaries use forward exchange contract to avoid exchange risk. 3. RMB to US$ is reducing the fluctuation of exchange gain (loss) through lowering RMB position. 2015 2016 Change(%) Net exchange gain (2,419) (701) (71) Note: The net foreign exchange loss in 2016 was around NTD701 mainly due to the depreciation of RMB.
Inflation	As the end-user of our IT and Telecom products are consumers, therefore, high unit price products will be impacted by inflation and resulted in investment risk of reduction in sales or gross margin on sales.	The inflation (deflation) rate in 2016 of where the Company and its overseas subsidiaries located are: Taiwan: 1.3% Hong Kong: 2.6% China: 2.3% Australia: 1.4% Description: As inflation in the subsidiaries’ countries remains at a low level, therefore, only minor impact on the Company’s operations is seen in 2016 “Multi-brand, multi-product” is an important policy of our company’s product management. Therefore, there will be small percentage of our products impacted by inflation to avoid the operational risk of over-centralized products.

2) High risk, high leverage investment, granting loans to outsiders, doing endorsement and guarantees and derivatives trading

Risk items	2016 Execution	Group policies and countermeasures
High risk and high leverage investment	None	The operational policy of the group is focus on operation of regular business; therefore, we do not invest in this type ofproducts.
Lending to others	Lending exists only between parent-subsidiaries relations in 2016.	1. Loan to others will require Board of Directors’ resolution. 2. Lending to: (1) companies that have business relationship with the Group. (2)Companies with short-term capital requirement. 3. The Grouphas stipulated “procedures for lendingfunds to others” to control lendingoperation.
Endorsement and guarantees	1. Endorsement exists only between parent-subsidiaries relations in 2016. 2. No endorsement loss in 2016.	1. Endorsement requires Board of Directors’ approval. 2. Endorse for: (1) companies that have business relationship with the Group. (2) Directly and indirectly holding over 50% of voting right. (3) Inter-company or co-builder endorsement due to contract requirement, or co-investment relationship and each shareholder endorse for the company in accordance with their shareholding. (4) Directly and indirectly holding 100% of voting right. 3. The Grouphas stipulated “procedures for endorsement andguarantees” to control endorsement operation.

(Continued on next page)

Financial status, results of operations & risk management

Risk items 2016 Execution	Group policies and countermeasures
Derivative products transactions The Group has purchased forward exchange contracts to avoid foreign exchange risk in 2016, as gain/loss from hedging transactions have been offset by its gain/loss, therefore, no actualgain/loss isgenerated.	Our group does not carry out speculative derivative trading; trading of derivative products is for hedging purpose only. All transactions are managed in accordance with “procedures for derivative trading”.

3) Others

Risk items	Risk factors	Impact on the companyin 2016 Countermeasure
Product R&D	As the Company is distribution services provider, therefore, the risk of product R&D focuses solely on suppliers or customers. However, in order to expand IC components business, the Group has established a dedicated group responsible for research and development which result will be transferred to customers to attract future purchase orders of IC components. As the manufacturing and sales of the R&D result will be responsible by the clients, the Group’s R&D risk is limited to the control of R&D expense.	None The research and development of the group’s products is positioned as “assist the sales of IC components through pre-sales services”, the R&D department can avoid excessive input of company’s resources if insist in this position, and the final risk of R&D is borne by the customers.
Change of government policy and regulations	As the Company is distribution services provider, therefore, the risk of product R&D focuses solely on suppliers or customers. However, in order to expand IC components business, the Group has established a dedicated group responsible for research and development which result will be transferred to customers to attract future purchase orders of IC components. As the manufacturing and sales of the R&D result will be responsible by the clients, the Group’s R&D risk is limited to the control of R&D expense.	No significant change in government policy and regulations. The Company continues to monitor and analyze the future trend of each country’s government policy and regulations for immediate respond where necessary.
Change of technology	The Company’s product range is mostly high-tech products, therefore, sales change triggered by change of technology will result in operational risk, for example: unable to obtain innovative products’ franchise.	Product franchises obtained by the Company are increasing or decreasing in 2012. “Multi-brand, multi-products” is the important policy of the product operation. The products that our Company represented includes global brands, in general, most global brands have good control of the technologyadvantage;thus,reduce the Group’s operational risk.
Change of corporate image	As the end-user of our Company’s IT and Telecom products are consumers, therefore, corporate image is very important to our Company’s operation.	The corporate image of the Company remains positive, no significant damage to the Company’s image. 1. Improve customer services and fully elaborate the functions of customer’s opinion and consumer complains feedback. 2. In case of major consumer disputes, inter-departmental team is formed to avoid the worseningof the situation.
M&A	Mergers and Acquisitions can facilitate the expansion of product agency and range while expanding market share. But there are risks of overpriced,under-valued liabilityand failure in integration.	The Company did not participate in any M&A. NA
Expansion of plants	Synnex’s major competitive advantage is effective and quality back office logistics operation that enhances value added services, expand market share and enhance overall performance. However, there exist risks of negative cash flow resulted from over-expansion, low usage rate or idle.	The cost of establishment or expansion of logistics centers was NTD333 million. Before expansion: Prudent evaluation of investment effectiveness and cost. After expansion: Import successful operational experience and management to develop its effectiveness.
Centralized suppliers or customers	Risk of centralized supplier is the impact to the Company’s performance when losing a franchise or the represented product loosing competitiveness.	See “List of major suppliers and customers in the latest two calendar years”. The Company does not have over centralized supplier and customers issues. “Multi-brand, multi-products” and “open channel management to establish dense reseller network” is the Company’s operational strategy, it can also effectively avoid risk of centralized supplier and customers.
Transfer or change of shares of directors, supervisors or shareholders of over 10%	May have significant impact to shareholder rights and Synnex’s share price	No significant equity transfer or change. The Company has established reporting mechanism to effectively manage the progress and publish information.
Change of managerial authority	May have significant impact to shareholder rights and Synnex’s share price	No change of managerial authority. The Company will publish material information shall there be any change in managerial authority.
Litigation or non-litigation event	Material litigation, non-litigation of the Company, the Company’s directors, supervisors, president, actual owner, major shareholders with over 10% of shareholding and subsidiaries will damage the Company’s image, shareholder rights and the Company’s share price.	See the description below. With the established reporting system, the Company will minimize the damage through honest, fast and open process.

Litigation, non-litigation and administrative litigation cases that have been finally judged or in pendency as of the day on which this annual report was printed: Yojun Jiao, the independent director of the Company, was only involved in one litigation in pendency as of the day on which this annual report was printed. The cased involved and the current status are described below: The Securities and Futures Investors Protection Center (SFIPC) asserted on April 27, 2003, that Mr. Yojun Jiao acted as the director of the Pacific Electric Wire & Cable Co., Ltd. (PEWC) during the period from 1999 to 2001 and requested Mr. Yojun Jiao and other co-defendants (including the rest directors, supervisor, and CPA firms) to take joint and several liability for the alleged fraudulent financial statements. The case is pending in Taipei District Court of first sentence. After the assessment, the Company finds that the litigation of the independent director, Yojun Jiao, is his personal affair. It is not related to the financial business of the Company or have significant

74 2016 Annual Review

effect on the shareholder’s equity or the stock price of the Company.

4) Summarized operating results of group enterprises

The financial position and operating results of the group enterprises as of December 31, 2015

Unit: NTD thousands

(Except for earnings per share in NTD)

		Total Assets Total liabilities Net Asset Value Operating income Operating income		Earnings
Company name	Capital		Net Income	per share Note*
				(after tax)
Seper Marketing Corp. E-Fan Investments Corp. Synlogics Service Corp. Bestcom Infotech Corp. Synnex Global Ltd. Synnex Mauritius Ltd. Peer Developments Ltd. Synnex China Holdings Ltd. King’s Eye Investments Ltd. Trade Vanguard Global Ltd. LianXiang Technology (Shenzhen) Co., Ltd. Laser Computer Holdings Ltd. ** Laser Computer (China) Ltd. Synnex Technology International (HK) Ltd. Synnex Electronics Hong Kong Ltd. Syntech Asia Ltd. Synnex Australia Pty. Ltd. Fortune Ideal Ltd. Golden Thinking Ltd. Synnex New Zealand Ltd. PT. Synnex Metrodata Indonesia Synnex Investments (China) Ltd. Synnex (Beijing) Ltd. Synnex (Shanghai) Ltd. Synnex Distributions (China) Ltd. Synnex (Chengdu) Ltd. Synnex (Nanjing) Ltd. Synnex (Shenyang) Ltd. Synnex (Tianjin) Ltd. Synnex (Hangzhou) Ltd. Synnex (Qingdao) Ltd. Synnex (Guangzhou) Ltd. Synnex (Xi’an) Ltd.	1,000 225,000 50,000 1,032,033 17,607,318 775,200 975,460 3,236,460 2,018,007 6,460,000 6,460 1,190,158 33 250,196 9,690 9,690 958,826 60,464 116,758 32,994 1,083,287 6,460,000 290,700 710,600 7,429,000 161,500 161,500 96,900 145,350 161,500 161,500 387,600 129,200	826,803 752,053 74,750 5,266,691 88,163 630,483 150 630,333 - (151) 73,500 23,825 49,675 - (334) 3,872,581 2,280,984 1,591,597 11,189,542 217,741 68,590,462 8,061,533 60,528,929 2,921,576 2,861,216 3,602,535 79 3,602,456 505,017 504,380 7,156,689 10,196 7,146,493 796,093 796,001 7,814,464 3,223,411 4,591,053 (1,319,214) (518,387) 10,230,112 279,888 9,950,224 2,006,504 2,006,330 6,052,357 (190,944) 6,243,301 - (167) 209,762 120,724 89,038 632,326 18,825 2,275,277 - 2,275,277 614,517 614,507 613,197 64,569 548,628 - 65,587 12,895,060 11,169,262 1,725,798 61,598,882 543,499 587,913 509,326 78,587 (88) (406) 15,403,838 13,040,391 2,363,447 82,096,107 701,000 16,816,688 14,368,294 2,448,394 49,152,119 659,189 311,508 202,610 108,898 43,919 36,867 1,235,993 1,219,604 16,389 81,731 49,900 1,366,670 1,296,262 70,408 3,456,076 22,607 5,946,438 3,322,006 2,624,432 19,422,417 744,479 21,541,660 13,727,198 7,814,462 84,008 129,929 428,387 103,746 324,641 40,883 (16,381) 2,416,026 1,329,536 1,086,490 240,220 (79,894) 29,837,657 21,266,092 8,571,565 101,909,365 380,173 384,614 237,038 147,576 23,663 (1,945) 309,230 138,377 170,853 16,577 (8,695) 192,677 102,052 90,625 19,012 991 146,349 22,297 124,052 6,928 (4,486) 193,128 17,881 175,247 19,414 5,882 182,712 39,599 143,113 8,443 (2,434) 369,353 2,504 366,849 24,411 (2,098) 223,286 103,157 120,129 17,050 2,403	71,318 139,581 (325) 208,832 4,205,314 504,380 887,051 (518,387) 1,921,560 126,972 11,018 614,539 131,955 482,562 (870) 629,020 328,905 20,015 11,410 1,420 496,969 (1,319,214) (9,544) 117,182 295,264 (11,428) (618) (2,681) (4,841) 6,181 (3,676) 182 1,728	713.18 6.20 (0.07) 2.02 7.67 21.02 29.37 (5.17) 30.76 0.21 55.09 16.68 16,917.27 8.04 (2.90) 2,096.73 9.89 1.38 0.41 0.95 1,656.56 - - - - - - - - - - - -

Financial status, results of operations & risk management

(Continued on next page)

(Continue last page)

Company name Capital Total Assets Total liabilities Net Asset Value Operating income		Earnings
	Operating
		Net Income per share Note*
	income
		(after tax)

Synnex (Suzhou) Ltd. 193,800 173,945 471 173,474 4,930	(6,852)	(4,926) -
Synnex (Wuhan) Ltd. 161,500 184,267 27,576 156,691 14,060	(1,205)	1,574 -
Synnex (Jinan) Ltd. 161,500 432,734 332,192 100,542 11,340 Synnex (Zhengzhou) Ltd. 161,500 228,676 104,991 123,685 14,515 Synnex (Changsha) Ltd. 129,200 331,019 238,262 92,757 11,422 Synnex (Ningbo) Ltd. 129,200 263,427 180,394 83,033 - Synnex (Hefei) Ltd. 197,030 294,410 162,397 132,013 5,000 Synnex (Nanchang) Ltd. 129,200 302,157 213,706 88,451 6,882 Synnex (Harbin) Ltd. 161,500 379,391 300,314 79,077 5,822 Synnex (Chongqing) Ltd. 19,380 19,191 68 19,123 - Synnex (Xiamen) Ltd. 193,800 211,074 60,634 150,440 5,145 Yude (Shanghai) Warehousing Co., Ltd. 11,175 21,774 31,346 (9,572) 5,642 Yidu Information Technology (Shanghai) Co., Ltd.*** - 56 17,162 (17,106) - Synnex Technology Development Ltd. 232,810 296,844 9,277 287,567 488,982 Bizwave Tech Co., Ltd. 20,000 58,098 34,899 23,199 119,760 Bestcom Infotech Holding Ltd. 84,545 64,364 - 64,364 - Bestcom Infotech (Shanghai) Corp. 90,944 149,246 84,976 64,270 289,866 Bestcom International Ltd. 84,545 64,287 - 64,287 -	(3,340) (636) (1,221) (9,468) (10,413) (10,193) (13,308) (4) (8,930) (5,084) (10,382) 19,956 2,782 - 16,406 -	(22,703) - (2,801) - (13,130) - (13,920) - (15,773) - (17,190) - (32,287) - 1,104 - (10,720) - (4,821) - (10,373) - 16,570 - 2,423 1.21 16,115 1.91 16,115 - 16,115 1.91

The capital of the overseas group enterprises is calculated based on historical exchange rate; balance sheet is calculated based on the exchange rate of the reporting date; income statement is calculated based on the average exchange rate of the current year and denominated in NT Dollars. The exchange rate is as follows: Reporting date exchange rate for 2016.12.31: US$1=NT$32.30 HK$1=NT$4.17 A$1=NT$23.32 THB$1=NT$0.92 RMB$1=NT$4.66 Average exchange rate for 2016: US$1=NT$32.31 HK$1=NT$4.18 A$1=NT$24.04 THB$1=NT$0.94 RMB$1=NT$4.86 ** Refers to Consolidated Financial Statements. *** Fund injection was not yet completed as of 12.31.2016.

SYNNEX TECHNOLOGY INTERNATIONAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT ACCOUNTANTS DECEMBER 31, 2016 AND 2015

For the convenience of readers and for information purpose only, the auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. In the event of any discrepancy between the English version and the original Chinese version or any differences in the interpretation of the two versions, the Chinese-language auditors’ report and financial statements shall prevail.

SYNNEX TECHNOLOGY INTERNATIONAL

CORPORATION AND ITS SUBSIDIARIES

Declaration of Consolidated Financial Statements of Affiliated Enterprises

For the year ended December 31, 2016, pursuant to “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises,” the company that is required to be included in the consolidated financial statements of affiliates, is the same as the company required to be included in the consolidated financial statements of parent and subsidiary companies under International Financial Reporting Standard 10. If relevant information that should be disclosed in the consolidated financial statements of affiliates has all been disclosed in the consolidated financial statements of parent and subsidiary companies, it shall not be required to prepare separate consolidated financial statements of affiliates.

Hereby declare,

Matthew Miau Feng Chiang

SYNNEX TECHNOLOGY INTERNATIONAL

CORPORATION AND ITS SUBSIDIARIES

March 17, 2017

Report of Independent Accountant Translated From Chinese

PWCR16000355

To the Board of Directors and Stockholders of Synnex Technology International Corporation

Opinion

We have audited the accompanying consolidated balance sheets of Synnex Technology International Corporation and its subsidiaries (the “Group”) as at December 31, 2016 and 2015, 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, based on our audit and the reports of other independent accountants (see information disclosed in the Other Matter - Scope of the Audit section of our report), the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2016 and 2015, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the “Regulations Governing the Preparations 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 current period. 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.

Key audit matter – Assessment of allowance for uncollectible accounts

Description

Please refer to Note 4(9) & (10), for accounting policies adopted for accounts receivable. Please refer to Note 5(2), for critical accounting estimates and key sources of assumption uncertainty. Please refer to Note 6(6) for details of accounts receivable.

The Group is primarily engaged in the sale of communication products, consumer electronic products, electronic products and components The Group manages the collection of accounts receivable from customers and bears the associated credit risk. The management categorized the accounts receivable assessment into individual provision and group provison. For individually assessed accounts receivable, allowance is recognised on a case by case basis. The assessment process is affected by management’s judgment on various factors: customers’ financial conditions, internal credit ratings, historical transaction records, current economic conditions, etc. For group assessed accounts receivable, assessment process is affected by management’s judgment on historical uncollectible records and makes adjustments in accordance with current economic conditions. As management’s judgment on determining allowance for uncollectible accounts is relatively subjective and the estimated amount is material to the financial statements, therefore, we indicated that the assessment of allowance for uncollectible accounts as one of the key audit matters.

How our audit addressed the matter

The scope of our audit responded to the risk as follows:

Obtained the Group’s policy applied to assessment of allowance for uncollectible accounts. Assessed whether the allowance for uncollectible accounts policy is applied in a manner consistent between comparative and current periods of the financial statements.
For individually assessed accounts, selected and verified samples of managements’ impairment evaluation. Discussed with management the assessement results and evaluated the adequacy of the provision.
For accounts assessed as a group, considered historical uncollectible records to determine whether the provision ratio of allowance for uncollectible accounts is reasonable. For significant accounts, examined subsequent collections after balance sheet date.

Key audit matter – Assessment of allowance for valuation of inventory

Please refer to Note 4(13) for description of accounting policies on allowance for inventory valuation. Please refer to Note 5(2) for accounting estimates and assumption uncertainty. Please refer to Note 6(9) for details of inventory items.

For the purpose of meeting diverse customer needs, the Group applied multi-brands and multi-product strategy. Due to the short life cycle of electronic products and the price is highly affected by market fluctuation, there is a high risk of incurring inventory valuation losses. The Group’s inventory policy on inventory valuation is based on the lower of cost or net realisable value. For inventory that was checked item by item for net relisable value, the Group then applied the lower of cost or net realisable value method for recognizing loss on decline in market value.

Considering the Group’s allowance for inventory valuation losses are mainly caused by loss on decline in market value, the valuation involves subjective judgment and since the amount is material to the financial statements, therefore, we indicated the estimates of the allowance for inventory valuation as one of the key audit matters for this fiscal year.

How our audit addressed the matter

The scope of our audit responded to the risk as follows:

Obtained the Group’s policy applied to the assessment of allowance for valuation of inventory loss. Assessed whether the allowance recognition policy is applied in a manner consistent between comparative and current periods of the financial statements.
Obtained net realisable value report for inventory items and verified that a consistent systematic logic was applied to the calculation. First, tested the assumptions such as: sources of sales or purchases data and relevant supporting estimation documents. Second, recalculated net realisable value item by item, then applied the lower of cost or net realizable value method for valuation and whether reasonable allowance was recognised.
Compared current and previous year’s allowance for valuation of inventory loss. Reviewed each period’s days sales of inventory in order to assess the adequacy and reasonableness of allowance recognised.

Key audit matter – Assessment of purchase rebate

Description

Please refer to Note 4(13) for accounting policies adopted for the recognition of purchase rebate. Please refer to Note 5(2) for critical accounting estimates and assumptions applied in the accounting policy for the recognition of purchase rebate.

The Group engages in various purchase contracts for different items with different suppliers. There are various types of rebate programs including incentives for certain purchase volume from vendors, purchase discounts and allowances are obtained due to decline in market value, participations in special purchase promotions, and subsidies for marketing. The Group estimates rebates that shall be recognised in accordance with the percentage of achievement of the rebate contract terms. There are various types of rebate programs, complicated calculations and transactions with different suppliers as well as the manual process involved in the verification and calculation of rebates. All of these aforementioned factors adds to the complexity of assessing purchasing rebate. Thus, we indicated that the assessment of purchase rebate as one of the key audit matters for this fiscal year.

How our audit addressed the matter

The scope of our audit responded to the risk as follows:

Obtained an understanding and tested the effectiveness of internal control over the estimation of purchase rebate. Tested the appropriate controls over contractual terms regarding rebates. Checked whether the recognition and drawing of rebate amount has been approved by the proper authority.
Selected samples of details of purchase rebate estimation, reviewed the inventory item and checked its supporting document in order to assess the reasonableness of estimation.
First, sampled details of purchased rebate estimation without notice from suppliers that has been recognised as of the balance sheet date. Second, after the balance sheet date, selected samples that has received debit note or other supporting documents from suppliers to check whether actual rebate approximated the estimation. In addition, after balance sheet date, checked whether there was significant new rebates that should be recognised as of the balance sheet date.
For significant outstanding rebate receivable accounts, we sampled accounts and checked the existence of original vouchers or supporting documents or tested subsequent collections after the balance sheet date.

Other matters – Scope of the Audit

We did not audit the financial statements of certain consolidated subsidiaries. The financial statements of these subsidiaries were audited by other independent accountants whose reports thereon have been furnished to us, and our opinion expressed herein, in so far as it relates to the amounts and the information disclosed in Note 13 included in these financial statements, is based solely on the reports of the other independent accountants. The subsidiaries held assets of $1,388,665 thousand and $1,472,480 thousand, constituting 1% and 1% of the total consolidated assets as of December 31, 2016 and 2015, respectively, and generated net operating income of $0, constituting 0% of the total consolidated net operating income for both the years then ended. Furthermore, information disclosed in Note 6(10) relative to investments accounted for under equity method and information on certain investees disclosed in Note 13 for the years ended December 31, 2016 and 2015 is based solely on the reports of the other independent accountants. Among the investees, certain investees financial

reports were prepared under different accounting standards, we have performed required additional auditing procedures and adjusted these reports in conformity with “Rules Governing the Preparation of Financial Statements by Securities Issuers” and the international Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission. The related investment income before adjustments (including share of profit or loss of associates accounted for using equity method) was $1,457,700 thousand and $1,322,836 thousand for the years ended December 31, 2016 and 2015, respectively, constituting 28% and 39% of the consolidated total net operating income for the years then ended, respectively. The comprehensive income recognised for these investments accounted for using equity method was $1,277,236 thousand and $1,216,660 thousand, constituting 53% and 39% of consolidated total comprehensive income for the years then ended, respectively. The balance of related long-term equity investments amounted to $11,063,339 thousand and $10,382,364 thousand, constituting 9% and 8% of the total consolidated assets as of December 31, 2016 and 2015, respectively.

Other matter – Parent company only financial reports

We have audited and expressed an unmodified opinion on the parent company only financial statements of Synnex Technology International Corporation as at and for the years ended December 31, 2016 and 2015.

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 Preparations 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 audit committee, are responsible for overseeing the 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:

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.
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.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
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.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
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.

Yeh, Tsui Miao Wu, Yu Lung

For and on behalf of PricewaterhouseCoopers, Taiwan March 17, 2017

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. As the financial statements are the responsibility of the management, PricewaterhouseCoopers, Taiwan cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

SYNNEX TECHNOLOGY INTERNATIONAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2016 AND 2015

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Assets	Amount % 7,474,322 $ 6 534,178 1 1,506,147 1 7,685,827 6 240 - 40,830,646 32 384,225 - 7,344,037 6 590 - 222,828 - 33,648,105 26 2,394,068 2 158,110 - 102,183,323 80 51,269 - 1,723,497 1 11,132,423 9 6,835,286 5 1,331,010 1 702,559 1 1,307,316 1 2,564,487 2 25,647,847 20 127,831,170 $ 100 December 31,2016	December 31,2015	December 31,2015
	Amount 7,474,322 $ 534,178 1,506,147 7,685,827 240 40,830,646 384,225 7,344,037 590 222,828 33,648,105 2,394,068 158,110 102,183,323 51,269 1,723,497 11,132,423 6,835,286 1,331,010 702,559 1,307,316 2,564,487 25,647,847 127,831,170 $	Amount 13,898,657 $ 424,108 1,415,009 8,187,190 - 38,147,636 104,175 7,723,546 62,718 172,509 35,258,681 2,769,713 466,222 108,630,164 18,290 1,805,312 11,161,302 7,060,838 1,511,552 449,841 1,188,197 2,962,022 26,157,354 134,787,518 $	%
Current assets Cash and cash equivalents Financial assets at fair value through profit or loss-current Available-for-sale financial assets-current Notes receivable-net Notes receivable-related parties-net Accounts receivable-net Accounts receivable-related parties-net Other receivables Other receivables-related parties Current tax assets Inventories, net Prepayments Other current assets Total current assets Non-current assets Available-for-sale financial assets-noncurrent Financial assets measured at cost-noncurrent Investments accounted for under the equity method Property, plant and equipment, net Investment property, net Intangible assets, net Deferred income tax assets Other non-current assets Total non-current assets Total assets			11 - 1 6 - 28 - 6 - - 26 2 1
			81
			- 2 8 5 1 - 1 2
			19
			100

(Continued)

SYNNEX TECHNOLOGY INTERNATIONAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2016 AND 2015

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

2100 2110 2120 2150 2170 2180 2200 2220 2230 2300 21XX 2570 2600 25XX 2XXX 3110 3200 3310 3320 3350 3400 31XX 36XX 3XXX 3X2X	Liabilities and Equity	Notes Amount % Amount % 6(15) 38,687,813 $ 30 47,654,101 $ 36 6(16) 5,420,000 4 5,300,000 4 6(2) - - 7,684 - 7 1,564,010 1 1,252,099 1 29,540,632 23 28,783,381 21 7 - - 12,196 - 6(17) 6,749,042 6 5,842,171 4 7 3,953 - 8,809 - 6(29) 1,043,353 1 1,229,110 1 314,517 - 255,156 - 83,323,320 65 90,344,707 67 6(29) 144,304 - 111,979 - 6(18) 481,050 1 455,540 - 625,354 1 567,519 - 83,948,674 66 90,912,226 67 6(19) 16,679,470 13 15,885,209 12 6(20) 14,196,063 11 14,139,722 10 6(21) 6,415,402 5 6,096,802 5 126,513 - - - 7,992,064 6 6,823,082 5 6(22) 2,837,318) ( 2) ( 126,513) ( - 42,572,194 33 42,818,302 32 1,310,302 1 1,056,990 1 43,882,496 34 43,875,292 33 9 11 127,831,170 $ 100 134,787,518 $ 100 December 31,2016 December 31,2015	December 31,2015	December 31,2015
				%
	Current liabilities Short-term borrowings Short-term notes and bills payable Financial liabilities at fair value through profit or loss -current Notes payable Accounts payable Accounts payable-related parties Other payables Other payables-related parties Current income tax liabilities Other current liabilities Total current liabilities Non-current liabilities Deferred income tax liabilities Other non-current liabilities Total non-current liabilities Total liabilities Equity attributable to owners of parent Share capital Share capital-common stock Capital surplus Capital surplus Retained earnings Legal reserve Special reserve Unappropriated retained earnings Other equity interest Other equity interest Equity attributable to owners of the parent Non-controlling interest Total equity Significant contingent liabilities and unrecognized contract commitments Significant events after the balance sheet date Total liabilities and equity			36 4 - 1 21 - 4 - 1 -
				67
				- -
				-
				67
				12 10 5 - 5 -
				32
				1
				33
				100

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

See report of independent accountants dated March 17, 2017.

SYNNEX TECHNOLOGY INTERNATIONAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

YEARS ENDED DECEMBER 31, 2016 AND 2015

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT FOR EARNINGS PER SHARE AMOUNTS)

Years ended December 31,	Years ended December 31,	Years ended December 31,
2016	% 100 97) ( 3 1) ( 1) ( 2) ( 1 - - - 1 1 2 - 2 - - - 1) ( - - 1) ( 1) ( 1 2 - 2 1 - 1 2.92 2.92	2015
Amount 342,696,453 $ 330,565,489) ( 12,130,964 4,301,741) ( 3,559,991) ( 7,861,732) ( 4,269,232 1,297,200 647,223) ( 656,692) ( 1,462,960 1,456,245 5,725,477 600,741) ( 5,124,736 $ 22,502) ($ 3,785 18,717) ( 2,788,753) ( 263,666 180,463) ( 2,705,550) ( 2,724,267) ($ 2,400,469 $ 4,876,679 $ 248,057 5,124,736 $ 2,147,157 $ 253,312 2,400,469 $ $		Amount 322,133,452 $ 310,541,679) ( 11,591,773 4,357,619) ( 3,285,583) ( 7,643,202) ( 3,948,571 1,909,629 2,693,726) ( 831,145) ( 1,404,223 211,019) ( 3,737,552 318,875) ( 3,418,677 $ 11,426) ($ 1,563 9,863) ( 85,034) ( 116,226) ( 106,669) ( 307,929) ( 317,792) ($ 3,100,885 $ 3,185,995 $ 232,682 3,418,677 $ 2,925,730 $ 175,155 3,100,885 $ $	%
			100 97) (
			3
			1) ( 1) (
			2) (
			1
			1 1) ( - -
			-
			1 -
			1
			- -
			-
			- - -
			-
			-
			1
			1 -
			1
			1 -
			1
			1.91
$		$	1.91

The accompanying notes are an integral part of these consolidated financial statements. See report of independent accountants dated March 17, 2017.

YEARS ENDED DECEMBER 31, 2016 AND 2015

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

2015 Balance at January 1, 2015 Appropriations of 2014 earnings Provision for legal reserve Provision for special reserve Distribution of cash dividend Change in net assets of the associate and joint ventures accounted for under the equity method Other comprehensive loss for 2015 Net income for 2015 Balance at December 31, 2015 2016 Balance at January 1, 2016 Appropriations of 2015 earnings Provision for legal reserve Provision for special reserve Distribution of cash dividend Distribution of stock dividend Change in net assets of the associate and joint ventures accounted for under the equity method Other comprehensive (loss) income for 2016 Net income for 2016 Balance at December 31, 2016	Notes 6(21) 6(22) 6(21) 6(22)	Share capital- common stock 15,885,209 $ - - - - - - 15,885,209 $ 15,885,209 $ - - - 794,261 - - - 16,679,470 $	Capital surplus 14,331,857 $ - - - 192,135) ( - - 14,139,722 $ 14,139,722 $ - - - - 56,341 - - 14,196,063 $		Retained earnings	Unappropriated retained earnings 7,425,704 $ 502,409) ( 1,965,774 5,242,119) ( - 9,863) ( 3,185,995 6,823,082 $ 6,823,082 $ 318,600) ( 126,513) ( 2,382,781) ( 794,261) ( 66,825) ( 18,717) ( 4,876,679 7,992,064 $	Cumulative translation differences of foreign operations Unrealized gain or loss on available -for-sale financial assets 65,918 $ 57,971 $ - - - - - - - - 132,916) ( 117,486) ( - - 66,998) ($ 59,515) ($ 66,998) ($ 59,515) ($ - - - - - - - - - - 2,977,178) ( 266,373 - - 3,044,176) ($ 206,858 Other equityinterest	Total 45,326,826 $ - - 5,242,119) ( 192,135) ( 260,265) ( 3,185,995 42,818,302 $ 42,818,302 $ - - 2,382,781) ( - 10,484) ( 2,729,522) ( 4,876,679 42,572,194 $	Non-controlling interest 881,835 $ - - - - 57,527) ( 232,682 1,056,990 $ 1,056,990 $ - - - - - 5,255 248,057 1,310,302 $	Total equity
				Legal reserve 5,594,393 $ 502,409 - - - - - 6,096,802 $ 6,096,802 $ 318,600 - - - - - - 6,415,402 $	Special reserve 1,965,774 $ - 1,965,774) ( - - - - - $ - $ - 126,513 - - - - - 126,513 $		Cumulative translation differences of foreign operations 65,918 $ - - - - 132,916) ( - 66,998) ($ 66,998) ($ - - - - - 2,977,178) ( - 3,044,176) ($
										46,208,661 $ - - 5,242,119) ( 192,135) ( 317,792) ( 3,418,677 43,875,292 $ 43,875,292 $ - - 2,382,781) ( - 10,484) ( 2,724,267) ( 5,124,736 43,882,496 $

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

See report of independent accountants dated March 17, 2017.

SYNNEX TECHNOLOGY INTERNATIONAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2016 AND 2015

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

CASH FLOWS FROM OPERATING ACTIVITIES Profit before income tax for the year Adjustments to reconcile profit before income tax to net cash (used in) provided by operating activities Income and expenses having no effect on cash flows Depreciation Amortization Amortization of land use rights Provision for bad debts expense Net gain on financial assets/liabilities at fair value through profit or loss Decline in (gain from reversal of) market value and loss for obsolete and slow-moving inventories Loss on obsolescence Interest expense Interest income Dividend income Gain on disposal of financial asset investments Impairment loss on financial assets Share of profit of associates and joint ventures accounted for under the equity method Cash dividends on investments accounted for under the equity method Gain on disposal of investments accounted for under the equity method Loss on remeasurement recognition of investments accounted for under the equity method at fair value Loss on disposal of property, plant and equipment and investment property Depreciation of investment property Changes in assets/liabilities relating to operating activities Net changes in assets relating to operating activities Financial assets at fair value through profit or loss Notes and accounts receivable Inventories Other receivables Prepayments Other current assets Overdue receivables Long-term lease and installment receivables Net changes in liabilities relating to operating activities Notes and accounts payable Other payables Other current liabilities Other non-current liabilities Cash inflow (outflow) generated from operations Interest paid Interest received Dividend received Income tax paid Net cash provided by (used in) operating activities	Notes 6(11)(27) 6(13)(27) 6(14) 6(5)(6) 6(2)(25) 6(9) 6(9) 6(26) 6(24) 6(24) 6(25) 6(25) 6(10) 6(25)(31) 6(25) 6(12)	2016 2015 5,725,477 $ 3,737,552 $ 347,261 310,258 57,596 31,981 21,610 - 379,780 1,050,386 103,820) ( 18,437) ( 13,408 40,569) ( 5,941 5,449 656,692 831,145 429,641) ( 1,027,500) ( 143,936) ( 124,749) ( 135,699) ( - 40,000 85,000 1,462,960) ( 1,404,223) ( 302,920 282,889 127,709) ( - 42,359 - 303 12,739 62,411 63,942 13,934) ( 391,320) ( 545,345) ( 1,181,364) ( 2,210,520 4,041,646) ( 483,004 314,521) ( 393,035 4,582 334,430 251,729 71,577) ( 883,799) ( 22,988 - 438,042 651,601) ( 730,522 722,012) ( 52,330 69,505) ( 36,557 12,049 9,322,565 4,191,545) ( 667,896) ( 834,406) ( 429,641 1,027,500 143,936 124,749 972,001) ( 926,725) ( 8,256,245 4,800,427) ( Years ended December 31,	2016 2015 5,725,477 $ 3,737,552 $ 347,261 310,258 57,596 31,981 21,610 - 379,780 1,050,386 103,820) ( 18,437) ( 13,408 40,569) ( 5,941 5,449 656,692 831,145 429,641) ( 1,027,500) ( 143,936) ( 124,749) ( 135,699) ( - 40,000 85,000 1,462,960) ( 1,404,223) ( 302,920 282,889 127,709) ( - 42,359 - 303 12,739 62,411 63,942 13,934) ( 391,320) ( 545,345) ( 1,181,364) ( 2,210,520 4,041,646) ( 483,004 314,521) ( 393,035 4,582 334,430 251,729 71,577) ( 883,799) ( 22,988 - 438,042 651,601) ( 730,522 722,012) ( 52,330 69,505) ( 36,557 12,049 9,322,565 4,191,545) ( 667,896) ( 834,406) ( 429,641 1,027,500 143,936 124,749 972,001) ( 926,725) ( 8,256,245 4,800,427) ( Years ended December 31,
		2016 5,725,477 $ 347,261 57,596 21,610 379,780 103,820) ( 13,408 5,941 656,692 429,641) ( 143,936) ( 135,699) ( 40,000 1,462,960) ( 302,920 127,709) ( 42,359 303 62,411 13,934) ( 545,345) ( 2,210,520 483,004 393,035 334,430 71,577) ( 22,988 438,042 730,522 52,330 36,557 9,322,565 667,896) ( 429,641 143,936 972,001) ( 8,256,245
			3,737,552 $ 310,258 31,981 - 1,050,386 18,437) ( 40,569) ( 5,449 831,145 1,027,500) ( 124,749) ( - 85,000 1,404,223) ( 282,889 - - 12,739 63,942 391,320) ( 1,181,364) ( 4,041,646) ( 314,521) ( 4,582 251,729 883,799) ( - 651,601) ( 722,012) ( 69,505) ( 12,049 4,191,545) ( 834,406) ( 1,027,500 124,749 926,725) ( 4,800,427) (

(Continued)

SYNNEX TECHNOLOGY INTERNATIONAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2016 AND 2015

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from disposal of available-for-sale financial assets Proceeds from capital reduction of financial assets carried at cost Proceeds from disposal of investments accounted for using equity method Net cash flow from acquisition of subsidiaries Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment and investment property Increase in investment property Acquisition of intangible assets (Increase) decrease in refundable deposits Decrease (increase) in restricted time deposits (Increase) decrease in other non-current assets Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES (Decrease) increase in short-term loans Decrease in short-term notes and bills payable Decrease in guarantee deposits received Decrease in long-term loans Payment of cash dividends Net cash used in financing activities Effects of changes in foreign exchange rates Decrease in cash and cash equivalents Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year	Notes 6(31) 6(33) 6(21)	2016 2015 232,517 $ - $ 114,827 800 250,357 - 945,088) ( - 513,982) ( 970,911) ( 7,780 34,353 438) ( 3,969) ( 86,271) ( 31,287) ( 465,345) ( 19,621 799,858 202,397) ( 132,281) ( 4,535 738,066) ( 1,149,255) ( 9,216,677) ( 7,687,743 180,000) ( 1,130,000) ( 31,642) ( 68,873) ( - 4,041,750) ( 2,382,781) ( 5,242,119) ( 11,811,100) ( 2,794,999) ( 2,131,414) ( 11,150 6,424,335) ( 8,733,531) ( 13,898,657 22,632,188 7,474,322 $ 13,898,657 $ Years ended December 31,	2016 2015 232,517 $ - $ 114,827 800 250,357 - 945,088) ( - 513,982) ( 970,911) ( 7,780 34,353 438) ( 3,969) ( 86,271) ( 31,287) ( 465,345) ( 19,621 799,858 202,397) ( 132,281) ( 4,535 738,066) ( 1,149,255) ( 9,216,677) ( 7,687,743 180,000) ( 1,130,000) ( 31,642) ( 68,873) ( - 4,041,750) ( 2,382,781) ( 5,242,119) ( 11,811,100) ( 2,794,999) ( 2,131,414) ( 11,150 6,424,335) ( 8,733,531) ( 13,898,657 22,632,188 7,474,322 $ 13,898,657 $ Years ended December 31,
		2016 232,517 $ 114,827 250,357 945,088) ( 513,982) ( 7,780 438) ( 86,271) ( 465,345) ( 799,858 132,281) ( 738,066) ( 9,216,677) ( 180,000) ( 31,642) ( - 2,382,781) ( 11,811,100) ( 2,131,414) ( 6,424,335) ( 13,898,657 7,474,322 $
			- $ 800 - - 970,911) ( 34,353 3,969) ( 31,287) ( 19,621 202,397) ( 4,535 1,149,255) ( 7,687,743 1,130,000) ( 68,873) ( 4,041,750) ( 5,242,119) ( 2,794,999) ( 11,150 8,733,531) ( 22,632,188 13,898,657 $

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

See report of independent accountants dated March 17, 2017.

SYNNEX TECHNOLOGY INTERNATIONAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2016 AND 2015

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS,

EXCEPT AS OTHERWISE INDICATED)

1. HISTORYAND ORGANIZATION

Synnex Technology International Corporation (the “Company”) was incorporated in September 1988 under the provisions of the Company Law of the Republic of China (R.O.C.). The Company and its subsidiaries (collectively referred herein as the “Group”) are primarily engaged in:

A. Assembly and sale of computers and computer peripherals;
B. Sale of communication products;
C. Sale of consumer electronic products;
D. Sale of electronic products and components; and
E. Maintenance services for the products mentioned above.

The Company's shares have been traded on the Taiwan Stock Exchange since December 1995.

2. THE DATE OF AUTHORIZATION FOR ISSUANCE OF THE CONSOLIDATED FINANCIAL

STATEMENTS AND PROCEDURES FOR AUTHORIZATION

These consolidated financial statements were authorized for issuance by the Board of Directors on March 17, 2017.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

(1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRSs”) as endorsed by the Financial Supervisory Commission (“FSC”)
None.

(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 FSC effective from 2017 are as follows:

New Standards, Interpretations and Amendments

Effective Date by
International Accounting
Standards Board

Investment entities: applying the consolidation exception
(amendments to IFRS 10, IFRS 12 and IAS 28)
Accounting for acquisition of interests in joint operations
(amendments to IFRS 11)
IFRS 14,‘Regulatory deferral accounts’
Disclosure initiative (amendments to IAS 1)
Clarification of acceptable methods of depreciation and amortization
(amendments to IAS 16 and IAS 38)
Agriculture: bearer plants (amendments to IAS 16 and IAS 41)
Defined benefit plans: employee contributions (amendments to IAS
19R)
Equity method in separate financial statements (amendments to IAS
27)
Recoverable amount disclosures for non-financial assets
(amendments to IAS 36)
Novation of derivatives and continuation of hedge accounting
(amendments to IAS 39)
IFRIC 21, ‘Levies’
Improvements to IFRSs 2010-2012
Improvements to IFRSs 2011-2013
Improvements to IFRSs 2012-2014

January 1, 2016
January 1, 2016
January 1, 2016
January 1, 2016
January 1, 2016
January 1, 2016
July 1, 2014
January 1, 2016
January 1, 2014
January 1, 2014
January 1, 2014
July 1, 2014
July 1, 2014
January 1, 2016

The above standards and interpretations have no significant impact to the Group’s financial condition and operating result based on the Group’s assessment.

(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 endorsed by the FSC effective from 2017 are as follows:

ndorsed by the FSC effective from 2017 are as follows:

New Standards, Interpretations and Amendments

Effective Date by
International Accounting
Standards Board

Classification and measurement of share-based payment transactions
(amendments to IFRS 2)
Applying IFRS 9 ‘Financial instruments’with IFRS 4‘Insurance
contracts’ (amendments to IFRS 4)
IFRS 9, ‘Financial instruments'
Sale or contribution of assets between an investor and its associate or
joint venture (amendments to IFRS 10 and IAS 28)
IFRS 15, ‘Revenue from contracts with customers'
Clarifications to IFRS 15, ‘Revenue from contracts with customers’
(amendments to IFRS 15)
IFRS 16, ‘Leases’
Disclosure initiative (amendments to IAS 7)
Recognition of deferred tax assets for unrealised losses (amendments
to IAS 12)
Transfers of investment property (amendments to IAS 40)
IFRIC 22, ‘Foreign currency transactions and advance consideration’
Annual improvements to IFRSs 2014-2016 cycle- Amendments to
IFRS 1, ‘First-time adoption of International Financial Reporting
Standards’
Annual improvements to IFRSs 2014-2016 cycle- Amendments to
IFRS 12, ‘Disclosure of interests in other entities’
Annual improvements to IFRSs 2014-2016 cycle- Amendments to
IAS 28, ‘Investments in associates and joint ventures’

January 1, 2018
January 1, 2018
January 1, 2018
To be determined by
International Accounting
Standards Board
January 1, 2018
January 1, 2018
January 1, 2019
January 1, 2017
January 1, 2017
January 1, 2018
January 1, 2018
January 1, 2018
January 1, 2017
January 1, 2018

Except for the following, the above standards and interpretations have no significant impact to the Group’s financial condition and operating result based on the Group’s assessment. The quantitative impact will be disclosed when the assessment is complete.

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 measured 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 in other comprehensive income subsequent changes in the fair value of an investment in an equity instrument that is not held for trading.
(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 that 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.
B. IFRS 15, ‘Revenue from contracts with customers’
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.

C. Amendments to IFRS 15, ‘Clarifications to IFRS 15 Revenue from Contracts with Customers‘ The amendments clarify how to identify a performance obligation (the promise to transfer a good or a service to a customer) in a contract; determine whether a company is a principal (the provider of a good or service) or an agent (responsible for arranging for the good or service to be provided); and determine whether the revenue from granting a licence should be recognised at a point in time or over time. In addition to the clarifications, the amendments include two additional reliefs to reduce cost and complexity for a company when it first applies the new Standard.
D. 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 types of leases differently. IFRS 16 only requires enhanced disclosures to be provided by lessors.

E. 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.

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” and the 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, these 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) Available-for-sale financial assets measured at fair value.
(c) 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 IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5

(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 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:
December 31, 2016 and 2015:

Name of investor Synnex Technology International Corporation Synnex Technology International Corporation Synnex Technology International Corporation Synnex Technology International Corporation Synnex Technology International Corporation Bestcom Infotech Corp. Bestcom Infotech Corp. Bestcom Infotech Holding Ltd. Bestcom International Ltd. Synnex Global Ltd.	Name of subsidiary	Main business Activities	Ownership (%)	Ownership (%)	Description
			December 31, 2016	December 31, 2015
	Synnex Global Ltd. Seper Marketing Corporation E-Fan Investments CO., LTD. Synlogics Service Corporation (Note 2) Bestcom Infotech Corp.(Note 3) Bizwave Tech Co., Ltd. (Note 3) Bestcom Infotech Holding Ltd. (Note 3) Bestcom International Ltd. (Note 3) Bestcom Infotech Shanghai Ltd. (Note 3) King's Eye Investments Ltd.	Investment holding company Sales of computers and computer peripherals Investment company Freight forwarders Sales of computers and computer peripherals Retailing of computer software, accreditation service and consulting services Investment holding company Investment holding company Sales of computers and computer peripherals, maintenance and consulting services Investment holding company	100 100 100 100 100 100 100 100 100 100	100 100 100 - 40.86 - - - - 100	PwC PwC PwC PwC PwC PwC PwC PwC PwC PwC

Name of investor Synnex Global Ltd. Synnex Global Ltd. Synnex Global Ltd. Synnex Global ltd. King's Eye Investments Ltd. King's Eye Investments Ltd. King's Eye Investments Ltd. King's Eye Investments Ltd. King's Eye Investments Ltd. King's Eye Investments Ltd. King's Eye Investments Ltd. King's Eye Investments Ltd. Laser Computer Holdings Ltd. Laser Computer Holdings Ltd. Peer Developments Ltd. Synnex China Holdings Ltd. Synnex Investments (China) Ltd. Synnex Investments (China) Ltd. Synnex Investments (China) Ltd.	Name of subsidiary	Main business Activities	Ownership (%)	Ownership (%)	Description
			December 31, 2016	December 31, 2015
	Peer Developments Ltd. Investment holding company Synnex Mauritius Ltd. Investment holding company Synnex China Holdings Ltd. Investment holding company Trade Vanguard Global Ltd. Investment holding company Laser Computer Holdings Ltd. Investment holding company Synnex Australia Pty. Ltd. Sales of computers and computer peripherals Synnex New Zealand Ltd. Sales of computers and computer peripherals Synnex Electronics Hong Kong Ltd. Sales of electronic components Syntech Asia Ltd. Sales of electronic components Fortune Ideal Ltd. Real estate investments Golden Thinking Ltd. Real estate investments PT. Synnex Metrodata Indonesia Sales of computers and computer peripherals Laser Computer (China) Ltd. Sales of computers and computer peripherals Synnex Technology International (HK) Ltd. Sales of computers and computer peripherals LianXiang Technology (Shenzhen) Ltd. Sales of electronic components Synnex Investments (China) Ltd. Investment holding company Synnex Distributions (China) Ltd. Sale of computers and computer peripherals Synnex (Beijing) Ltd. Sale of computers and computer peripherals Synnex (Shanghai) Ltd. Sale of computers and computer peripherals		100 100 100 100 100 100 100 100 100 100 100 50.3 100 100 100 100 100 100 100	100 100 100 100 100 100 100 100 100 100 100 50.3 100 100 100 100 100 100 100	PwC PwC PwC PwC PwC PwC PwC PwC PwC Other Other PwC PwC PwC PwC PwC PwC PwC PwC

Synnex Investments Sale of computers

100

Name of investor (China) Ltd. Synnex Investments (China) Ltd. Synnex Investments (China) Ltd. Synnex Investments (China) Ltd. Synnex Investments (China) Ltd. Synnex Investments (China) Ltd. Synnex Investments (China) Ltd. Synnex Investments (China) Ltd. Synnex Investments (China) Ltd. Synnex Investments (China) Ltd. Synnex Investments (China) Ltd. Synnex Investments (China) Ltd. Synnex Investments (China) Ltd. Synnex Investments (China) Ltd. Synnex Investments (China) Ltd. Synnex Investments (China) Ltd. Synnex Investments	Name of subsidiary	Main business Activities	Ownership (%)	Ownership (%)	Description
			December 31, 2016	December 31, 2015
	Synnex (Tianjin) Ltd. Synnex (Chengdu) Ltd. Synnex (Nanjing) Ltd. Synnex (Shenyang) Ltd. Synnex (Hangzhou) Ltd. Synnex (Qingdao) Ltd. Synnex (Guangzhou) Ltd. Synnex (Xi’an) Ltd. Synnex (Suzhou) Ltd. Synnex (Wuhan) Ltd. Synnex (Jinan) Ltd. Synnex (Changsha) Ltd. Synnex (Zhengzhou) Ltd. Synnex (Ningbo) Ltd. Synnex (Hefei) Ltd. Synnex (Nanchang) Ltd. Synnex (Harbing)	and computer peripherals Sale of computers and computer peripherals Sale of computers and computer peripherals Sale of computers and computer peripherals Sale of computers and computer peripherals Sale of computers and computer peripherals Sale of computers and computer peripherals Sale of computers and computer peripherals Sale of computers and computer peripherals Sale of computers and computer peripherals Sale of computers and computer peripherals Sale of computers and computer peripherals Sale of computers and computer peripherals Sale of computers and computer peripherals Sale of computers and computer peripherals Sale of computers and computer peripherals Sale of computers	100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100	100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100	PwC PwC PwC PwC PwC PwC PwC PwC PwC PwC PwC PwC PwC PwC PwC PwC PwC

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Name of investor (China) Ltd. Synnex Investments (China) Ltd. Synnex Investments (China) Ltd. Synnex Investments (China) Ltd. Synnex Distributions (China) Ltd. Synnex Distributions (China) Ltd.	Name of subsidiary	Main business Activities	Ownership (%)	Ownership (%)	Description
			December 31, 2016	December 31, 2015
	Ltd. and computer peripherals Synnex (Chongqing) Ltd. Sale of computers and computer peripherals Synnex (Xiamen) Ltd. Sale of computers and computer peripherals Yude (Shanghai) Warehouse Co., Ltd. Warehouse services YD Information Technology (SH) LTD. (Note 1) Information technology service and sale of computers and computer peripherals Synnex Technology Development (Beijing) Ltd. Sale of computers and computer peripherals		100 100 80 100 100	100 100 80 100 100	PwC PwC PwC PwC PwC

Note 1: These companies were incorporated in 2015.
Note 2: These companies were incorporated in 2016.
Note 3: The Company acquired Bestcom Infotech Corp., an equity investment accounted under equity method, by tender offer. The original ownership ratio was 40.86% before the tender offer and after the acquisition, the Company obtained 100% share ownership of Bestcom Infotech Corp. As of April 7, 2016, Bestcom Infotech Corp. and its subsidiaries shall be included in the consolidated entities.
C. Subsidiaries not included in the consolidated financial statements: None.
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.

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(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 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 foreign exchange gains and losses 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 and associates 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.

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(b) When the foreign operation partially disposed of or sold is an associate, 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 still retains partial interest in the former foreign associate after losing significant influence over the former foreign associate, 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 still 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 be exchanged or used to pay off 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 paid off within the normal operating cycle;
(b) Liabilities arising mainly from trading activities;
(c) Liabilities that are to be paid off 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.

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(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 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 categorised 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:
(a) Hybrid (combined) contracts; or
(b) They eliminate or significantly reduce a measurement or recognition inconsistency; or
(c) They are managed and their performance is evaluated on a fair value basis, in accordance with a documented risk management or investment strategy.
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. Financial assets at fair value through profit or loss are initially recognised at fair value. Related transaction costs are expensed in profit or loss. 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 profit or loss.

(8) Available-for-sale financial assets

A. Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories.
B. On a regular way purchase or sale basis, available-for-sale financial assets are recognised and derecognised using trade date accounting.
C. Available-for-sale financial assets 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. Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured or derivatives that are linked to and must be settled by delivery of such unquoted equity instruments are presented in ‘financial assets measured at cost’.

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(9) Accounts receivable

Accounts receivable are loans and receivables originated by the entity. They are created by the entity by selling goods or providing services to customers in the ordinary course of business. Accounts receivable 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 effect of discounting is immaterial.

(10) Impairment of financial assets

A. 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.
B. The criteria that the Group uses to determine whether there is objective evidence of an impairment loss is as follows:
(a) Significant financial difficulty of the issuer or debtor;
(b) A breach of contract, such as a default or delinquency in interest or principal payments;
(c) 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;
(d) It becomes probable that the borrower will enter bankruptcy or other financial reorganisation;
(e) The disappearance of an active market for that financial asset because of financial difficulties;
(f) 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;
(g) 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;
(h) A significant or prolonged decline in the fair value of an investment in an equity instrument below its cost.

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C. 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:
(a) Financial assets measured at amortised cost

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.

(b) Financial assets measured at cost
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 current market return rate of similar financial asset, and is recognised in profit or loss. Impairment loss recognised for this category shall not be reversed subsequently. Impairment loss is recognised by adjusting the carrying amount of the asset through the use of an impairment allowance account.
(c) 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, then 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.

(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.

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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)

A. Based on the terms of a lease contract, a lease is classified as a finance lease if the lessee assumes substantially all the risks and rewards incidental to ownership of the leased asset.
(a) At commencement of the lease term, the lessor should record a finance lease in the balance sheet as ‘lease receivables’ at an amount equal to the net investment in the lease (including initial direct costs). The difference between gross lease receivable and the present value of the receivable is recognised as ‘unearned finance income of finance lease’.
(b)The lessor should allocate finance income over the lease term based on a systematic and rational basis reflecting a constant periodic rate of return on the lessor’s net investment in the finance lease.
(c) Lease payments (excluding costs for services) relating to the lease term are applied against the gross investment in the lease to reduce both the principal and the unearned finance income.
B. 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. Cost of inventory purchase includes purchasing price, import taxes and all the related costs involved in the process of obtaining inventory. Discounts, allowances and etc. shall be deducted from the cost of inventory purchases.
B. Inventories are stated at the lower of cost and net realisable value. Cost is determined using the the moving-average method. 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.

(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.

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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 that are not recognised in profit or loss or other comprehensive income of the associate and such changes not affecting 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. In the case that an associate issues new shares and the Group does not subscribe or acquire new shares proportionately, which results in a change in the Group’s ownership percentage of the associate but maintains significant influence on the associate, then ‘capital surplus’ and ‘investments accounted for under the equity method’ shall be adjusted for the increase or decrease of its share of equity interest. If the above condition causes a decrease in the Group’s ownership percentage of the associate, in addition to the above adjustment, the amounts previously recognised in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately on the same basis as would be required if the relevant assets or liabilities were disposed of.
F. When the Group disposes its investment in an associate, if it 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 still retains significant influence over this associate, then 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.
G. When the Group disposes its investment in an associate, if it loses significant influence over this associate, the amounts previously recognised as capital surplus in relation to the associate are transferred to profit or loss. If it still retains significant influence over this associate, then the amounts previously recognised as capital surplus in relation to the associate are transferred to profit or loss proportionately.

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(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. If 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 5 - 55 years Utilities equipment 7 - 24 years Computer equipment 3 - 13 years Transportation equipment 7 - 14 years Furniture and fixtures 5 - 8 years Machinery and equipment 5 - 20 years Leasehold improvements 3 years

(16) Leased assets/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

An investment property is stated initially at its cost and measured subsequently using the cost model. Except for land, investment property is depreciated on a straight-line basis. The estimated useful lives of property, plant and equipment are as follows:

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Buildings 3 - 47 years Utilities equipment 7 - 15 years

(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 7 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 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, intangible assets with an indefinite useful life and intangible assets that have not yet been available for use 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.

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(20) Borrowings

A. 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

Notes and accounts payable are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. They are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method. However, short-term accounts payable without bearing interest are subsequently measured at initial invoice amount as effect of discounting is immaterial.

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

A. Financial liabilities at fair value through profit or loss are financial liabilities held for trading or financial liabilities designated as at fair value through profit or loss on initial recognition. 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. Financial liabilities that meet one of the following criteria are designated as at fair value through profit or loss on initial recognition:
(a) Hybrid (combined) contracts; or
(b) They eliminate or significantly reduce a measurement or recognition inconsistency; or
(c) They are managed and their performance is evaluated on a fair value basis, in accordance with a documented risk management policy.
B. 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.

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(23) Derecognition of financial liabilities

A financial liability is derecognised when the obligation under the liability specified in the contract is discharged or cancelled or expires.

(24) 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.

(25) Derivative financial instruments

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured at their fair value. Any changes in the fair value are recognised in profit or loss.

(26) Provisions

Warranties 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. Warranties provisions are measured at the present value of the expenditures expected to be required to settle the obligation on the balance sheet date, which is discounted using a pre-tax discount rate that reflects the current market assessments of the time value of money and the risks specific to the obligation. When discounting is used, the increase in the provision due to passage of time is recognised as interest expense.

(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 expenses in that period when the employees render service.

B. Pensions

(a) Defined contribution plans

For defined contribution plans, the contributions are recognised as pension expenses 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.

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(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 defined benefit net 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 government bonds (at the balance sheet date) of a currency and term consistent with the currency and term of the employment benefit obligations.

  - ii. Remeasurement arising on defined benefit plans are recognised in other comprehensive income in the period in which they arise and recorded as retained earning.

  - iii. Past service costs are recognised immediately in profit or loss.

C. Termination benefits
Termination benefits are employee benefits provided in exchange for the termination of employment as a result from either the Group’s decision to terminate an employee’s employment before the normal retirement date, or an employee’s decision to accept an offer of redundancy benefits in exchange for the termination of employment. The Group recognises expense as it can no longer withdraw an offer of termination benefits or it recognises relating restructuring costs, whichever is earlier. Benefits that are expected to be due more than 12 months after balance sheet date shall be discounted to their present value.
D. Employees’ compensation and directors’ and supervisors’ remuneration
Employees’ compensation and directors’ and supervisors’ remuneration are recognised as expenses and liabilities, provided that such recognition is required under legal obligation or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequemtly actual distributed amounts is accounted for as changes in etimates.

(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.

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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 10% 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 income 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 income 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 income 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 income 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 income tax asset is realised or the deferred income tax liability is settled.
D. Deferred income 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 income 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 income 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.

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(29) 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.

(30) Revenue recognition

Sales of goods

The Group sells information, communication, electronic and consumer electronic 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 should be 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.

(31) Business combinations

A. The Group uses the acquisition method to account for business combinations. The consideration transferred for an acquisition is measured as the fair value of the assets transferred, liabilities incurred or assumed and equity instruments issued at the acquisition date, plus the fair value of any assets and liabilities resulting from a contingent consideration arrangement. All acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. For each business combination, the Group measures at the acquisition date components of non-controlling interests in the acquiree that are present ownership interests and entitle their holders to the proportionate share of the entity’s net assets in the event of liquidation at either fair value or the present ownership instruments’ proportionate share in the recognised amounts of the acquiree’s identifiable net assets. All other non-controlling interests should be measured at the acquisition-date fair value.

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B. The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value of any previous equity interest in the acquiree over the fair value of the identifiable assets acquired and the liabilities assumed is recorded as goodwill at the acquisition date. If the total of consideration transferred, non-controlling interest in the acquiree recognised and the fair value of previously held equity interest in the acquiree is less than the fair value of the identifiable assets acquired and the liabilities assumed, the difference is recognized directly in profit or loss on the acquisition date.

(32) 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 is responsible for allocating resources and assessing performance of the operating segments.

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 information is addressed below:

(1) Critical judgements in applying the Group’s accounting policies

A. Revenue recognition on a net/gross basis

The determination of whether the Group is acting as principal or agent in a transaction is based on an evaluation of Group’s exposure to the significant risks and rewards associated with the sale of goods or the rendering of service in accordance with the business model and substance of the transaction. Where the Group acts as a principal, the amount of received or receivable from customer is recognised as revenue on a gross basis. Where the Group acts as an agent, net revenue is recognised representing commissions earned.

The following characteristics of a principal are used as indicators to determine whether the Group shall recognise revenue on a gross basis:

(a) The Group has primary responsibilities for the goods or services it provides;
(b) The Group bears inventory risk;
(c) The Group has the latitude in establishing prices for the goods or services, either directly or indirectly.
(d) The Group bears credit risk of customers.

117

B. Financial assets measured at cost

Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured due to lack of sufficient information, are presented in ‘financial assets measured at cost’.

(2) Critical accounting estimates and assumptions

A. Assessment of allowance for uncollectible accounts receivable

During the assessment process of allowance for uncollectible accounts receivable, the Group has to use assessment and judgement to determine the future recoverable amount of accounts receivable. The future recoverable amount is affected by various factors such as customers’ financial conditions, Group’s internal credit ratings, historical transaction records, current economic conditions and other factors that could affect customers’ paying ability. If there is a concern regarding accounts receivable collectability, the Group shall assess each individual account’s collectability and recognize appropriate allowances. Management make critical assumptions and estimates concerning future events as of balance sheet date. Assumptions and estimates may differ from the actual results, thus, there might be material changes to the assessment.

B. 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 comsumption, 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.

C. Accrual of inventory purchase rebate

Accrual of inventory purchase rebate is based on contract terms and expected achievement rate. However, contract terms for rebate could be in various types, with complicated calculations and engaged with different counterparties. Therefore, massive amount of purchase and sale information has to be matched with individual merchandise item number manually in order to calculate the rebate. Management make critical assumptions and estimates concerning future events as of balance sheet date. Assumptions and estimates may differ from the actual results, thus, there might be material changes to the assessment.

118

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

ETAILS OF SIGNIFICANT ACCOUNTS 1)Cash and cash equivalents
	December 31,2016	December 31,2015
Cash on hand and revolvingfunds	1,490 $	1,268 $
Checkingaccounts and demand deposits	3,239,594	2,435,712
Time deposits	4,233,238	11,461,677
	7,474,322 $	13,898,657 $

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. For information regarding cash and cash equivalents pledged as collateral and is reclassified to other current and other non-current assets, please refer to Note 8.

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

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December 31, 2016 December 31, 2015
Financial assets held for trading
Listed (TSE and OTC) stocks $ 396,820 $ 396,988
Valuation adjustment of financial assets held for
137,266 27,120
trading
Non-hedging derivatives-foreign exchange forward 92 -
Total $ 534,178 $ 424,108
Financial liabilities held for trading
Non-hedging derivatives-foreign exchange forward $ - $ 7,684
----- End of picture text -----

A. The Group recognised net (loss) gain of $103,820 and $18,437 on financial assets held for trading for the years ended December 31, 2016 and 2015, respectively,
B. The related information of derivative financial instruments of the subsidiaries is as follows:

Foreign exchange forward

Foreign exchange forward
The subsidiaries	Items		December 31, 2016 Book Value Nominal Principal (in thousands) $ 321 USD 1,900 229) AUD 1,430 $ 92
			Book Value
Synnex New Zealand Synnex New Zealand	Buy USD sell NZD Buy AUD sell NZD	(

119

December 31, 2015

	December 31, 2015
The subsidiaries Items	Book Value Nominal Principal (in thousands) ($ 570) USD 8,000 ( 2,176) USD 2,455 ( 426) AUD 934 ( 4,512) USD 9,929 ($ 7,684)
Synnex Technology International (HK) Ltd. Buy USD sell HKD Synnex New Zealand Buy USD sell NZD Synnex New Zealand Buy AUD sell NZD PT.SMI Buy USD sell IDR

In 2016 and 2015, the subsidiaries of the Company undertook forward exchange contracts with local banks to hedge risks put to foreign currency assets and liabilities arising from fluctuations in exchange rates. The Group recognised (loss) gain on valuation amounting to ($6,461) and ($6,995) for the years ended December 31, 2016 and 2015, respectively.

C. The Group has no financial assets at fair value through profit or loss pledged to others.

(3) Available-for-sale financial assets

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December 31, 2016 December 31, 2015
Current items:
Listed (TSE and OTC) stocks $ 1,193,627 $ 1,418,647
Non-listed (TSE and OTC) stocks 272,050 272,050
Subtotal 1,465,677 1,690,697
Valuation adjustment of available-for-sale financial
182,352 ( 79,707)
assets
Accumulated impairment - available-for-sale
( 141,882) ( 195,981)
financial assets
Total $ 1,506,147 $ 1,415,009
Non-current items:
Listed (TSE and OTC) stocks $ 5,250 $ 5,345
Non-listed (TSE and OTC) stocks 24,712 -
Valuation adjustment of available-for-sale financial
24,025 12,945
assets
Accumulated impairment - available-for-sale ( 2,718) -
financial assets
Total $ 51,269 $ 18,290
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120

A. The Group recognised $317,765 and ($201,226) in other comprehensive income for fair value change for the years ended December 31, 2016 and 2015, respectively. Due to the recognised impairment loss, the amount reclassified from equity to current periods’ profit (loss) is ($40,000) and ($85,000), respectively. Due to the sale of equity investments, the amount reclassified from equity to current periods’ profit (loss) was $94,099 and $0, respectively.
B. The fair value of the Group’s unlisted shares declined significantly below its initial investment cost. The Group therefore recognised impairment loss of $40,000 and $85,000 on equity investments for the years ended December 31, 2016 and 2015, respectively.
C. As of December 31, 2016 and 2015, no available-for-sale financial assets held by the Group were pledged to others.

(4) Financial assets measured at cost

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December 31, 2016 December 31, 2015
Non-current items:
Non-listed (TSE and OTC) stocks $ 1,808,042 $ 2,003,460
Accumulated impairment-financial assets measured
( 84,545) ( 198,148)
at cost
Total $ 1,723,497 $ 1,805,312
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A. According to the Group’s intention, its investment in non-listed (TSE and OTC) stocks should be classified as ‘available-for-sale financial assets’. However, as stocks are not traded in active market, and no sufficient industry information of companies similar to the company or financial information cannot be obtained, the fair value of the investment in non-listed (TSE and OTC) stocks cannot be measured reliably. The Group classified those stocks as ‘financial assets measured at cost’.
B. As of December 31, 2016 and 2015, no financial assets measured at cost held by the Group were pledged to others.

(5) Notes receivable

Notes receivable
	December 31,2016	December 31,2015
Notes receivable	7,713,819 $	8,217,371 $
Less: allowance for bad debts	27,992) (	30,181) (
	7,685,827 $	8,187,190 $

A. The Group’s notes receivable that were neither past due nor impaired had good credit quality.
B. Movement analysis of financial assets that were impaired is as follows:
(a) As of December 31, 2016 and 2015, the Group’s notes receivable that were impaired amounted to $27,992 and $30,181, respectively.

121

(b)Movements on the Group’s provision for impairment of notes receivable are as follows:

		2016
	Individual provision	Group provision	Total
At January1	- $	30,181 $	30,181 $
Provision for impairment	-	230	230
Net exchange differences	-	2,419) (	2,419) (
At December 31	- $	27,992 $	27,992 $

At January1 Provision for impairment Net exchange differences At December 31	Individual provision - $ - - - $	Group provision 16,411 $ 14,252 482) ( 30,181 $ 2015	Total 16,411 $ 14,252 482) ( 30,181 $

(6) Accounts receivable and overdue receivables

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

December 31, 2016 December 31, 2015
Accounts receivable $ 40,807,815 $ 38,250,922
Lease payments receivable (current portion) 127,431 -
Less: allowance for bad debts ( 104,600) ( 103,286)
40,830,646 38,147,636
Overdue receivables (recorded as other non-current
assets) 2,194,573 2,710,133
Less: allowance for bad debts ( 1,773,204) ( 2,090,718)
421,369 619,415
$ 41,252,015 $ 38,767,051
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Overdue receivables consist primarily of amounts due from customers under bankruptcy proceedings and are stated at their estimated net realizable value. As of December 31, 2016 and 2015, the Group received certain security for a portion of the amounts due.

A. The ageing analysis of financial assets that was not impaired is as follows:

	December 31,2016	December 31,2015
Notpast due	35,102,535 $	32,575,000 $
Upto 60 dayspast due	4,957,445	4,624,908
61-120 dayspast due	352,822	493,375
121-180 dayspast due	152,483	113,802
More than 181 dayspast due	686,730	959,966
	41,252,015 $	38,767,051 $

122

The above amounts are net of deduction of allowance for bad debts.

B. Movement analysis of financial assets that were impaired is as follows:
(a) As of December 31, 2016 and 2015, the Group’s accounts receivable that were impaired amounted to $1,877,804 and $2,194,004, respectively.
(b)Movements on the Group’s provision for impairment of accounts receivable are as follows:

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2016
Individual
provision Group provision Total
At January 1 $ 2,090,718 $ 103,286 $ 2,194,004
Provision for impairment 365,198 14,352 379,550
Write off of uncollectibles ( 587,137) ( 28,379) ( 615,516)
Effect of business combination 14,823 29,133 43,956
Net exchange differences ( 110,398) ( 13,792) ( 124,190)
At December 31 $ 1,773,204 $ 104,600 $ 1,877,804
2015
Individual
provision Group provision Total
At January 1 $ 1,138,436 $ 59,614 $ 1,198,050
Provision for impairment 983,211 52,923 1,036,134
Write off of uncollectibles ( 15,513) ( 7,696) ( 23,209)
Net exchange differences ( 15,416) ( 1,555) ( 16,971)
At December 31 $ 2,090,718 $ 103,286 $ 2,194,004
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C. The counterparties of the Group’s accounts receivable are customers from different industries and geographical regions; in order to maintain the quality of the receivables, the Group established credit risk management procedures related to operations and continues to evaluate. The risk evaluation of individual customers takes into consideration the customers’ financial position, internal and external credit ratings and historical transaction records and current economic situation amongst other factors that may affect the customers’ payment ability. The Group utilises certain credit enhancement instruments when necessary; for example: require customers to pay in advance or provide collaterals to lower the customers’ credit risk.
D. The computer and computer peripherals were leased under finance lease and leasing period is over 3 years. The Group expects all lease payments would be collected on schedule. The gross investments in those leases and present value of total minimum lease payments receivable as at December 31, 2016 was as follows:

123

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December 31, 2016
Total lease Net lease
payments Unearned finance payments
receivable income receivable
Current
Not later than one year (recorded as
$ 149,044 ($ 21,613) $ 127,431
net accounts receivable)
Non-current
Later than one year but not later than
five years (recorded as other non 115,277 ( 14,300) 100,977
-current assets)
$ 264,321 ($ 35,913) $ 228,408
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December 31, 2015：None.

E. Information about accounts receivable that were pledged to others as collaterals is provided in Note 8.

(7) Transfer of financial assets

Transferred financial assets that are derecognised in their entirety

The Group entered into a factoring agreement with a bank to sell its accounts receivable. Under the agreement, the Group is not obligated to bear the default risk of the transferred accounts receivable, but is liable for the losses incurred on any business dispute. The Group does not have any continuing involvement in the transferred accounts receivable. Thus, the Group derecognised the transferred accounts receivable, and the related information is as follows:

(Unit: USD thousand)

			(Unit: USD thousand)
	December 31, 2016
Accounts receivable transferred	Amount derecognized	Facilities	Amount advanced
The Company $360 (US$11) $181,011 (US$5,610) $190,525 (US$6,067) Subsidiaries $914,463 (US$28,312) $688,437 (US$21,314)	$360 (US$11) $181,011 (US$5,610) $190,525 (US$6,067) $914,463 (US$28,312) $688,437 (US$21,314)	US$43,500 US$10,000 US$45,000 US$60,000 US$42,000	$360 (US$11) $181,011 (US$5,610) $190,525 (US$6,067) $914,463 (US$28,312) $688,437 (US$21,314)

124

(Unit: USD thousand)

December 31, 2015

Accounts receivable transferred	Amount derecognized	Facilities	Amount advanced
The Company $644,106 (US$19,660) $131,851 (US$4,039) Subsidiaries $304,097 (US$9,249) $327,958 (US$9,947) $205,136 (US$6,239)	$644,106 (US$19,660) $131,851 (US$4,039) $304,097 (US$9,249) $327,958 (US$9,947) $205,136 (US$6,239)	US$32,000 US$10,000 US$10,000 US$17,000 US$15,000	$644,106 (US$19,660) $131,851 (US$4,039) $304,097 (US$9,249) $327,958 (US$9,947) $205,136 (US$6,239)

(8) Other receivables

Other receivables
Rebate receivable from suppliers		December 31, 2016 5,271,900 $			December 31,2015 4,819,930 $
		$
Refund receivable from suppliers			499,929		556,400
Tax refund receivable-business tax Other non-operatingreceivables,others			560,360 1,011,848 7,344,037		1,352,205 995,011 7,723,546 $
		$
Inventories					Book value 33,294,627 353,478 33,648,105 Book value 34,888,230 370,451 35,258,681
		December 31,2016
		Allowance for
	Cost	Valuation loss			Book value
Merchandise inventories	33,933,503 $	638,876) ($		$	33,294,627
Inventoryin transit	353,478	-			353,478
Total	34,286,981 $	638,876) ($		$	33,648,105

		December 31,2015
		Allowance for
	Cost	Valuation loss			Book value
Merchandise inventories	35,491,586 $	603,356) ($		$	34,888,230
Inventoryin transit	370,451	-			370,451
Total	35,862,037 $	603,356) ($		$	35,258,681

(9) Inventories

125

The cost of inventories recognised as expense for the period:

	Years ended December 31,	Years ended December 31,	Years ended December 31,
	2016		2015
Cost of inventories sold	330,546,140 $		310,576,799 $
Loss on decline in(gain on reversal of)market value	13,408	40,569) (
Loss on retirement	5,941		5,449
	330,565,489 $		310,541,679 $

In 2015, gain from price recovery of inventory was caused by the reversal of loss on market value decline and obsolete inventories when the related inventory items were scrapped or sold.

(10) Investments accounted for under equity method

A. The details are as follows:

The details are as follows:
	December 31,2016		December 31,2015
		Percentage		Percentage
	Balance	ownership	Balance	ownership
Associates:
Synnex Corporation	6,667,079 $	10.31%	6,378,209 $	10.61%
Redington(India)Ltd.	3,498,088	23.58%	3,151,986	23.59%
Synnex (Thailand) Public Company Ltd.	901,561	40.00%	852,169	40.00%
Bestcom Infotech Corporation (Note)	-	-	778,938	40.86%
Other	65,695	20%~40%	-	-
	11,132,423 $		11,161,302 $

B. The above investments accounted for under the equity method are profit/(loss) and share of other comprehensive income of associates recognised based on annual audited financial statements issued by the investees’ independent accountants. Details are as follows:

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Profit/(loss) of associates
Years ended December 31,
2016 2015
Synnex Corporation $ 785,075 $ 704,109
Redington (India) Ltd. 505,017 481,897
Synnex (Thailand) Public Company Ltd. 153,042 136,830
Bestcom Infotech Corporation (Note) 17,844 81,387
Other 1,982 -
$ 1,462,960 $ 1,404,223
----- End of picture text -----

126

	Share of other comprehensive	Share of other comprehensive
	income of associates
	Years ended December 31,
	2016	2015
Synnex Corporation	126,289) ($	163,953) ($
Redington(India)Ltd.	56,989) (	59,037
Synnex(Thailand)Public CompanyLtd.	2,814	1,260) (
Bestcom Infotech Corporation(Note)	-	493) (
	180,464) ($	106,669) ($

Note: Bestcom Infotech Corporation has been included in the consolidated financial statements as of April 7, 2016.

C. Associates

(a) The basic information of the associates that are material to the Group is as follows:

Company name	Principal place of business Nature of relationship Methods of measurement USA Financial investment Equity method
Synnex Corporation

The Group is one of the major shareholders of Synnex Corporation, and the Group’s Chairman Mr. Matthew Miau serves as Synnex’s honorary chairman. Thus, the Group has significant influence over Synnex.

(b)The summarized financial information of the associates that are material to the Group is as follows:

Balance sheet

Balance sheet
	Synnex Corporation
	December 31,2016	December 31,2015
Current assets	129,070,574 $	118,672,831 $
Non-current assets	39,708,327	27,627,469
Current liabilities	80,033,844) (	63,069,002) (
Non-current liabilities	24,859,275) (	23,873,938) (
Total net assets	63,885,782 $	59,357,360 $

Share in associate's net assets	6,593,884	6,303,699
Goodwill	73,195	74,510
Carryingamount of the associate	6,667,079 $	6,378,209 $

127

Statement of comprehensive income

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

Synnex Corporation
Years ended December 31,
2016 2015
Revenue $ 454,337,953 $ 424,027,641
Profit for the period from continuing operations 7,455,608 6,586,617
Other comprehensive loss, net of tax ( 1,223,870) ( 1,545,280)
Total comprehensive income $ 6,231,738 $ 5,041,337
Dividends received from associates $ 83,028 $ 78,288
----- End of picture text -----

(c) The carrying amount of the Group’s interests in all individually immaterial associates and the Group’s share of the operating results are summarized below:

As of December 31, 2016 and 2015, the carrying amount of the Group’s individually immaterial associates amounted to $4,465,344 and $4,783,093, respectively.

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

Years ended December 31,
2016 2015
Profit for the period from continuing operations $ 677,885 $ 700,114
Other comprehensive (loss) income, net of tax ( 54,175) 57,284
Total comprehensive income $ 623,710 $ 757,398
(d)The Group’s material associates with quoted market price and its fair value has been
calculated based on ownership shares proportionately is as follows: p shares proportionately is as follows: shares proportionately is as follows: proportionately is as follows: roportionately is as follows: portionately is as follows: ortionately is as follows: y is as follows: is as follows:
December 31, 2016 December 31, 2015
Synnex Corporation $ 16,452,333 $ 12,664,092
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(d)The Group’s material associates with quoted market price and its fair value has been calculated based on ownership shares proportionately is as follows: p shares proportionately is as follows: shares proportionately is as follows: proportionately is as follows: roportionately is as follows: portionately is as follows: ortionately is as follows: y is as follows: is as follows:

128

(11) Property, plant and equipment

									Construction
									in progress
			Utilities	Computer	Transportation	Furniture and		Leasehold	and equipment
	Land	Buildings	equipment	equipment	equipment	fixtures	Tools	improvements	to be inspected	Total
At January 1, 2016
Cost	973,906 $	5,058,231 $	633,155 $	497,906 $	173,235 $	76,673 $	1,057,751 $	131,779 $	557,740 $	9,160,376 $
Accumulated depreciation	-	694,971) (	273,141) (	283,469) (	102,807) (	42,760) (	610,087) (	92,303) (	-	2,099,538) (
	973,906 $	4,363,260 $	360,014 $	214,437 $	70,428 $	33,913 $	447,664 $	39,476 $	557,740 $	7,060,838 $
2016
Opening net book amount	973,906 $	4,363,260 $	360,014 $	214,437 $	70,428 $	33,913 $	447,664 $	39,476 $	557,740 $	7,060,838 $
Additions	148,291	5,558	10,679	52,031	33,804	23,405	19,853	34,817	179,038	507,476
Acquired from business combinations	-	-	-	12,023	-	-	2,501	6,008	-	20,532
Disposals	-	1,527) (	7) (	5,507) (	165) (	208) (	97) (	184) (	388) (	8,083) (
Reclassifications	-	275,705	17,088	847) (	-	-	-	-	311,106) (	19,160) (
Depreciation charge	-	120,250) (	43,657) (	75,707) (	15,591) (	13,639) (	57,302) (	21,115) (	-	347,261) (
Net exchange differences	13,732) (	279,264) (	25,887) (	2,985) (	617) (	847) (	14,387) (	2,048) (	39,289) (	379,056) (
Closing net book amount	1,108,465 $	4,243,482 $	318,230 $	193,445 $	87,859 $	42,624 $	398,232 $	56,954 $	385,995 $	6,835,286 $

At December 31, 2016
Cost	1,108,465 $	5,028,226 $	621,652 $	506,631 $	202,193 $	81,247 $	953,378 $	156,538 $	385,995 $	9,044,325 $
Accumulated depreciation	-	784,744) (	303,422) (	313,186) (	114,334) (	38,623) (	555,146) (	99,584) (	-	2,209,039) (
	1,108,465 $	4,243,482 $	318,230 $	193,445 $	87,859 $	42,624 $	398,232 $	56,954 $	385,995 $	6,835,286 $

129

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Construction
in progress
Utilities Computer Transportation Furniture and Leasehold and equipment
Land Buildings equipment equipment equipment fixtures Tools improvements to be inspected Total
At January 1, 2015
Cost $ 1,006,329 $ 4,418,805 $ 626,772 $ 662,718 $ 170,107 $ 132,439 $ 1,067,101 $ 165,856 $ 924,730 $ 9,174,857
Accumulated depreciation - ( 713,502) ( 260,035) ( 459,383) ( 106,114) ( 71,911) ( 707,859) ( 118,686) - ( 2,437,490)
$ 1,006,329 $ 3,705,303 $ 366,737 $ 203,335 $ 63,993 $ 60,528 $ 359,242 $ 47,170 $ 924,730 $ 6,737,367
2015
Opening net book amount $ 1,006,329 $ 3,705,303 $ 366,737 $ 203,335 $ 63,993 $ 60,528 $ 359,242 $ 47,170 $ 924,730 $ 6,737,367
Additions - 49,377 8,771 47,390 22,126 13,695 168,444 9,239 608,708 927,750
Disposals - ( 18,693) ( 14,823) ( 1,043) ( 616) ( 1,021) ( 405) ( 303) - ( 36,904)
Reclassifications - 879,055 50,551 30,886 - ( 24,285) ( 6,809) 176 ( 958,268) ( 28,694)
Depreciation charge - ( 112,922) ( 36,768) ( 63,324) ( 14,401) ( 11,744) ( 56,243) ( 14,856) - ( 310,258)
Net exchange differences ( 32,423) ( 138,860) ( 14,454) ( 2,807) ( 674) ( 3,260) ( 16,565) ( 1,950) ( 17,430) ( 228,423)
Closing net book amount $ 973,906 $ 4,363,260 $ 360,014 $ 214,437 $ 70,428 $ 33,913 $ 447,664 $ 39,476 $ 557,740 $ 7,060,838
At December 31, 2015
Cost $ 973,906 $ 5,058,231 $ 633,155 $ 497,906 $ 173,235 $ 76,673 $ 1,057,751 $ 131,779 $ 557,740 $ 9,160,376
Accumulated depreciation - ( 694,971) ( 273,141) ( 283,469) ( 102,807) ( 42,760) ( 610,087) ( 92,303) - ( 2,099,538)
$ 973,906 $ 4,363,260 $ 360,014 $ 214,437 $ 70,428 $ 33,913 $ 447,664 $ 39,476 $ 557,740 $ 7,060,838
----- End of picture text -----

Note 1: The significant components of buildings include office buildings and warehouse with main buildings and improvements, which are depreciated over 15~55 and 5~35 years, respectively.

Note 2: Information about the property, plant and equipment that were pledged to others as collateral is provided in Note 8. Note 3: The Group has no interest capitalization for the years ended December 31, 2016 and 2015.

130

(12) Investment property

Investment property
		Utilities
	Buildings	equipment		Total
At January 1, 2016
Cost	1,549,896 $	275,297 $		1,825,193 $
Accumulated depreciation	174,332) (	139,309) (	313,641) (
	1,375,564 $	135,988 $		1,511,552 $
2016
Openingnet book amount	1,375,564 $	135,988 $		1,511,552 $
Additions	-	438		438
Reclassifications	86	-		86
Depreciation charge	34,879) (	27,562) (	62,441) (
Net exchange differences	108,834) (	9,791) (	118,625) (
Closingnet book amount	1,231,937 $	99,073 $		1,331,010 $

At December 31, 2016
Cost	1,425,748 $	253,651 $		1,679,399 $
Accumulated depreciation	193,811) (	154,578) (	348,389) (
	1,231,937 $	99,073 $		1,331,010 $
		Utilities
	Buildings	equipment		Total
At January 1, 2015
Cost	1,582,060 $	286,067 $		1,868,127 $
Accumulated depreciation	141,286) (	132,352) (	273,638) (
	1,440,774 $	153,715 $		1,594,489 $
2015
Openingnet book amount	1,440,774 $	153,715 $		1,594,489 $
Additions	3,373	596		3,969
Reclassifications	-	22,546		22,546
Disposals	-	10,188) (	10,188) (
Depreciation charge	36,517) (	27,425) (	63,942) (
Net exchange differences	32,066) (	3,256) (	35,322) (
Closingnet book amount	1,375,564 $	135,988 $		1,511,552 $

At December 31, 2015
Cost	1,549,896 $	275,297 $		1,825,193 $
Accumulated depreciation	174,332) (	139,309) (	313,641) (
	1,375,564 $	135,988 $		1,511,552 $

131

A. Rental income from the lease of the investment property and direct operating expenses arising from the investment property are shown below:

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

Years ended December 31,
2016 2015
Rental income from the lease of the investment property $ 477,562 $ 449,419
Direct operating expenses arising from the investment
property that generated rental income in the period $ 134,992 $ 142,153
Direct operating expenses arising from the investment
property that did not generate rental income in the period $ 43,071 $ 50,195
----- End of picture text -----

B. The fair value of the investment property held by the Group as of December 31, 2016 and 2015 was $2,803,345 and $2,893,554, respectively, which is based on the present value of rental revenue for the next 10 years and disposal value, which is categorized within level 3 in the fair value hierarchy. The growth rates used are consistent with the forecasts included in market quotation reports and historical experiences. The discount rates used are pre-tax and reflect specific risks relating to the relevant operating segments.

(13) Intangible assets

Intangible assets
	Computer
	software cost	Goodwill		Total
At January 1, 2016
Cost	234,838 $	326,527 $		561,365 $
Accumulated amortisation	111,524) (	-	111,524) (
	123,314 $	326,527 $		449,841 $
2016
Openingnet book amount	123,314 $	326,527 $		449,841 $
Additions－acquired separately	70,672	-		70,672
Acquired through business combinations	7,114	239,479		246,593
Amortisation charge	57,596) (	-	57,596) (
Net exchange differences	1,191) (	5,760) (	6,951) (
Closingnet book amount	142,313 $	560,246 $		702,559 $

At December 31, 2016
Cost	285,653 $	560,246 $		845,899 $
Accumulated amortisation	143,340) (	-	143,340) (
	142,313 $	560,246 $		702,559 $

132

		Computer
		software cost	Goodwill		Total
At January 1, 2015
Cost		177,977 $	314,809 $		492,786 $
Accumulated amortisation	79,543) (		-	79,543) (
		98,434 $	314,809 $		413,243 $
2015
Openingnet book amount		98,434 $	314,809 $		413,243 $
Additions－acquired separately		56,861	-		56,861
Amortisation charge	31,981) (		-	31,981) (
Net exchange differences		-	11,718		11,718
Closingnet book amount		123,314 $	326,527 $		449,841 $

At December 31, 2015
Cost		234,838 $	326,527 $		561,365 $
Accumulated amortisation	111,524) (		-	111,524) (
		123,314 $	326,527 $		449,841 $

A. Amortization charges on intangible assets were recognised as administrative expenses amounting to $57,596 and $31,981 for the years ended December 31, 2016 and 2015, respectively.
B. Goodwill is allocated as follows to the Group’s cash-generating units identified according to operating segment:

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

December 31, 2016 December 31, 2015
Taiwan $ 239,479 $ -
Hong Kong/China 320,767 326,527
$ 560,246 $ 326,527
----- End of picture text -----

C. Impairment of non-financial assets

Goodwill is allocated to the Group’s cash-generating units identified according to operation segment. The recoverable amount of all cash-generating units has been determined based on value-in-use calculations. These calculations use pre-tax cash flow projections based on financial budgets approved by the management covering a five-year period.

The recoverable amount of all cash-generating units calculated using the value-in-use exceeded their carrying amount, so goodwill was not impaired. The key assumptions used for value-in-use calculations are consideration into gross margin, growth rate and discount rate.

Management determined budgeted gross margin based on past performance and its expectations of market development. The growth rates used are consistent with the forecasts included in market quotation reports and historical experiences. The discount rates used are pre-tax and reflect specific risks relating to the relevant operating segments.

133

(14) Other non-current assets

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

December 31, 2016 December 31, 2015
Refundable deposits $ 696,530 $ 223,270
Long-term notes and overdue receivables 421,369 619,415
Long-term prepaid rent 873,626 979,775
Pledged time deposits 260,562 1,060,420
Long-term lease and installment receivables 100,977 -
Others 211,423 79,142
$ 2,564,487 $ 2,962,022
----- End of picture text -----

A. The above long-term prepaid rent was mainly due to the Group signing a land use right contract for use of the land in the People’s Republic of China. All rentals had been paid on the contract date. The Group recognised rental expenses of $21,610 and $23,024 and for the years ended December 31, 2016 and 2015, respectively.
B. For details of long-term lease and installment receivables, please refer to Note 6(6).

(15) Short-term borrowings

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

Type of borrowings December 31, 2016 Interest rate range Collateral
Bank borrowings
Unsecured borrowings $ 38,687,813 0.933%~5.58% None
Type of borrowings December 31, 2015 Interest rate range Collateral
Bank borrowings
Secured borrowings $ 1,245,169 1.359%~10.25% Accounts receivable and
inventories
Unsecured borrowings 46,408,932 0.88%~5.95% None
$ 47,654,101
----- End of picture text -----

(16) Short-term notes and bills payable

Short-term notes and bills payable
	December 31,2016	December 31,2015
Commercialpaperpayable	5,420,000 $	5,300,000 $
Interest rate range	0.35%~1.168%	0.45%~0.93%

The above-mentioned short-term notes and bills payables are issued and accepted by financial institutions.

134

(17) Other payables

Other payables
	December 31,2016	December 31,2015
Dealers’ bonuspayable	2,172,733 $	2,442,642 $
Temporary receipt of suppliers’ payment on behalf of others	1,761,165	1,239,906
Salary payable and bonus	813,298	588,478
Accrued expenses-others	651,789	540,484
Other payables-others	1,350,057	1,030,661
	6,749,042 $	5,842,171 $

(18) Pensions

A.(a) The Company has 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 Law. 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 1 month 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 the end of December 31, every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method, to the employees expected to be qualified for retirement next year, the Company will make contributions to cover the deficit by next March. The subsidiary, PT. Synnex Metrodata Indonesia, adopted a defined benefit plan.

(b) The amounts recognized in the balance sheet are as follows:

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

December 31, 2016 December 31, 2015
Present value of defined benefit obligations ($ 598,817) ($ 484,066)
Fair value of plan assets 257,523 198,503
Net defined benefit liability (recorded as other
non-current liabilities) ($ 341,294) ($ 285,563)
----- End of picture text -----

135

(c) Movements in net defined benefit liabilities are as follows:

Year ended December 31,2016 Balance at January1 Gain on business combination Current service cost Interest(expense)income Remeasurements: Return on plan assets (excluding amounts included in interest income or expense)	Present value of defined benefit obligations ($ 484,066) (68,746) (9,625) ( 11,660) ( 574,097) -	Present value of defined benefit obligations ($ 484,066) (68,746) (9,625) ( 11,660) ( 574,097) -	Fair value of plan assets $ 198,503 48,150 - 4,222 250,875 ( 2,016)	Net defined benefit liability ($ 285,563) (20,596) (9,625) (7,438) (323,222) ( 2,016)
Change in demographic assumptions Exchange differences from translation Change in financial assumptions	(239) (81) (18,772)		- - -	(239) (81) (18,772)
Experience adjustments Pension fund contribution Paidpension Balance at December 31	( 5,812) ( 24,904) - 184 ($ 598,817)		- ( 2,016) 8,664 - $ 257,523	( 5,812) (26,920) 8,664 184 ($ 341,294)
		Present value of
		defined benefit	Fair value of	Net defined
		obligations	plan assets	benefit liability
Year ended December 31,2015
Balance at January1	461,133) ($		191,959	269,174) ($
Current service cost	7,987) (		-	7,987) (
Interest(expense)income	10,839) (		3,839	7,000) (
	479,959) (		195,798	284,161) (
Remeasurements:
Return on plan assets (excluding amounts included in interest income or expense)		-	1,341	1,341
Exchange differences from translation		2,076	-	2,076
Change in financial assumptions	10,520) (		-	10,520) (
Experience adjustments	3,037) (		-	3,037) (
	11,481) (		1,341	10,140) (
Pension fund contribution		-	8,491	8,491
Paidpension		7,374	7,127) (	247
Balance at December 31	484,066) ($		198,503 $	285,563) ($

136

(d) The Bank of Taiwan was commissioned to manage the Fund of the Company’s and domestic subsidiaries’ 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 asset fair value in accordance with IAS 19 paragraph 142. The composition of fair value of plan assets as of December 31, 2016 and 2015 is given in the Annual Labor Retirement Fund Utilisation Report announced by the government.
(e) The principal actuarial assumptions used were as follows:
i. The principal actuarial assumptions used for the Company and its subsidiaries in Taiwan were as follows:

were as follows:
	Years ended December 31,
	2016	2015
Discount rate	1.375%~1.40%	1.70%
Future salaryincreases	3.00%~4.00%	4.00%

Future mortality rate was estimated based on the 5th Taiwan Standard Ordinary Experience Mortality Table.

Because the main actuarial assumption changed, the present value of defined benefit obligation is affected. The analysis was as follows:

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

Discount rate Future salary increases
Increase 0.25% Decrease 0.25% Increase 0.25% Decrease 0.25%
December 31, 2016
Effect on present value of defined
benefit obligation $ 14,626 ($ 15,124) ($ 13,568) $ 13,143
Discount rate Future salary increases
Increase 1% Decrease 1% Increase 1% Decrease 1%
December 31, 2015
Effect on present value of defined
benefit obligation $ 46,415 ($ 54,438) ($ 47,768) $ 41,915
----- End of picture text -----

137

The sensitivity analysis above is based on other conditions that are unchanged but only one assumption is changed. 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.

The method and assumptions used for the preparation of sensitivity analysis during 2016 and during 2015 are the same, except the actuarial assumption of discount rate and future salary increases.

ii. The principal actuarial assumptions used for foreign subsidiaries were as follows:

==> picture [432 x 53] intentionally omitted <==

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

2016 2015
Discount rate 8.50% 9.00%
Future salary increases 9.00% 9.00%
----- End of picture text -----

Future mortality rate was estimated based on TMI 3 issued by Insurance Council of Indonesia.

Because the main actuarial assumption changed, the present value of defined benefit obligation is affected. The analysis were as follows:

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

Discount rate Future salary increases
Increase 1% Decrease 1% Increase 1% Decrease 1%
December 31, 2016
Effect on present value of defined
benefit obligation $ 4,962 ($ 5,901) ($ 6,002) $ 5,128
Discount rate Future salary increases
Increase 1% Decrease 1% Increase 1% Decrease 1%
December 31, 2015
Effect on present value of defined
benefit obligation $ 3,544 ($ 4,218) ($ 4,309) $ 3,675
----- End of picture text -----

(f) As of December 31, 2016, the weighted average duration of that retirement plan is 11~17.89 years.
(g) Expected contributions to the defined benefit pension plans of the Group for the year ending December 31, 2017 amounts to $8,642.
B.(a) Effective July 1, 2005, the Company and its domestic subsidiaries have 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 pension costs under defined contribution pension plans of the Group for the years ended December 31, 2016 and 2015 were $60,773 and $43,341, respectively.

138

(c) No pension plan is established for Synnex Global Ltd., King's Eye Investments Ltd., Peer Developments Ltd., Synnex China Holdings Ltd., Synnex Mauritius Ltd., Laser Computer Holdings Ltd., and Trade Vanguard Golobal Ltd. since these companies are not required to have an employee pension plan in accordance with the local legislation. Except for the above, other consolidated overseas subsidiaries have established a funded defined contribution pension plan and therefore, contribute monthly a certain percentage of the employees’ monthly salaries and wages to the retirement fund. Except for monthly contributions to the retirement fund, these companies have no further obligations. The pension costs under the defined contribution pension plan for the years ended December 31, 2016 and 2015 were $242,689 and $241,972, respectively.

(19) Share capital

A. As of December 31, 2016, the Company’s authorized capital was $22,000,000 (including $500,000 reserved for the conversion of employees’ stock options which have not been issued). The total number of shares of common stock, at $10 (in dollars) par value per share, issued and outstanding, was 1,667,946,968 shares. All proceeds from shares issued have been collected. Movements in the number of the Company’s ordinary shares outstanding are as follows:

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

2016 2015
At January 1 1,588,520,922 1,588,520,922
Stock dividends 79,426,046 -
At December 31 1,667,946,968 1,588,520,922
----- End of picture text -----

B. The stockholders at their annual stockholders’ meeting on June 8, 2016 adopted a resolution to distribute dividends of common stock of $794,261 with the effective date set on September 5, 2016.
C. The Company issued common stock (Deposited Shares) through global depository shares (GDSs) in Europe, Asia and the USA in 1997 and 1999. Each GDS represents 4 Deposited Shares. The GDSs may not be offered, sold or delivered, directly or indirectly, in the R.O.C. As of December 31, 2016, the total number of GDSs outstanding was 951,681 units, representing 3,806,736 shares of common stock. The main terms and conditions of the GDSs are as follows:

(a)Voting

Holders of GDSs have no right to directly exercise voting rights or attend the Company’s stockholders’ meeting, except that a holder or holders together holding at least 51% of the GDSs outstanding at the relevant record date of the stockholders’ meeting, can instruct the Depositary to vote in the same direction in respect of one or more resolutions to be proposed at the meeting.

139

(b)Sale and withdrawal of GDSs

Commencing three months after the initial issuance of GDSs, a holder of GDSs may, provided that the Company has delivered to the custodian physical share certificates in respect of the Deposited Shares, request the Depositary to sell or cause to be sold on behalf of such holder the shares represented by such GDSs.

(c)Dividends

GDS holders are entitled to receive dividends to the same extent as the holders of common stock subject to the terms of the Deposit Agreement and applicable laws of the R.O.C.

(20) Capital surplus

Pursuant to the R.O.C. Company Law, capital reserve 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 Law requires that the amount of capital reserve to be capitalized mentioned above should not exceed 10% of the paid-in capital each year. Capital reserve should not be used to cover accumulated deficit unless the legal reserve is insufficient.

			2016
			Changes in equity
		Treasuryshare	of associates and
At January1 Changes in equity of associates and joint ventures At December 31	Share premium 13,626,940 $ - 13,626,940 $	transactions 340,678 $ - 340,678 $	joint ventures 56,341) ($ 56,341 - $	Stock options 228,445 $ - 228,445 $	Total 14,139,722 $ 56,341 14,196,063 $
			2015
			Changes in equity
		Treasuryshare	of associates and
	Sharepremium	transactions	joint ventures	Stock options	Total
At January1	13,626,940 $	340,678 $	135,794 $	228,445 $	14,331,857 $
Changes in equity of associates and joint ventures	-	-	192,135) (	-	192,135) (
At December 31	13,626,940 $	340,678 $	56,341) ($	228,445 $	14,139,722 $

140

(21) Retained earnings / Events after the balance sheet date

A. The Company’s Articles of Incorporation provide that current year’s net income, after recovering any past losses and deducting all taxes in accordance with the law, shall be distributed in the following order: (a) set aside 10% of the net income as legal reserve, (b) set aside the special reserve in the amount of the net reduction of adjustments under the stockholders’ equity for the current year related mainly to cumulative translation adjustments and unrealized loss on long-term investments, (c) 30% to 100% of the remaining portion (plus the retained earnings carried over from the last fiscal year as permitted by the Company Law) shall be distributed as dividends to all stockholders in proportion to their individual holdings as proposed by the Board of Directors and approved at the stockholders’ meeting. No less than 15% of total stockholders’ dividends may be distributed in the form of cash dividends.
B. 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.
C. 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.
D. (a) The appropriation of 2015 and 2014 earnings had been resolved at the stockholders’ meeting on June 8, 2016 and June 12, 2015, respectively. Details are summarized below:

meetingon June 8, 2016 and	June 12, 2015, respectively. Details are summarized below:	June 12, 2015, respectively. Details are summarized below:	June 12, 2015, respectively. Details are summarized below:	June 12, 2015, respectively. Details are summarized below:
	Years ended December 31,
	2015		2014
		Dividendsper		Dividendsper
	Amount	share(in dollars)	Amount	share(in dollars)
Legal reserve	318,600 $	- $	502,409 $	- $
Special reserve	126,513	-	1,965,774) (	-
Cash dividends	2,382,781	1.50	5,242,119	3.30
Stock dividends	794,261	0.50	-	-

(b) The appropriation of 2016 earnings had been proposed at the Board of Directors’ meeting on March 17, 2017. Details are summarized below:

		Dividendsper
	Amount	share(in dollars)
Legal reserve	487,668 $	- $
Special reserve	2,710,804	-
Cash dividends	1,667,947	1.00

E. For information relating to employees’ remuneration (bonus) and directors’ and supervisors’ remuneration, please refer to Note 6(28).

141

(22) Other equity items

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

Currency Available-for-sale
translation investments Total
At January 1, 2016 ($ 66,998) ($ 59,515) ($ 126,513)
Transfer out for provision of -
40,000 40,000
impairment
Transfer out for revaluation - ( 94,099) ( 94,099)
Revaluation:
–Group - 317,765 317,765
–Associates - 2,707 2,707
Currency translation differences: -
–Group ( 2,794,008) - ( 2,794,008)
–Associates ( 183,170) - ( 183,170)
At December 31, 2016 ($ 3,044,176) $ 206,858 ($ 2,837,318)
Currency Available-for-sale
translation investments Total
At January 1, 2015 $ 65,918 $ 57,971 $ 123,889
Transfer out for provision of -
85,000 85,000
impairment
Revaluation:
–Group - ( 201,226) ( 201,226)
–Associates - ( 1,260) ( 1,260)
Currency translation differences:
–Group ( 27,507) - ( 27,507)
–Associates ( 105,409) - ( 105,409)
At December 31, 2015 ($ 66,998) ($ 59,515) ($ 126,513)
----- End of picture text -----

(23) Operating revenue

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

Years ended December 31,
2016 2015
Sales revenue $ 342,085,713 $ 321,650,942
Other revenue 610,740 482,510
Total $ 342,696,453 $ 322,133,452
----- End of picture text -----

142

(24)Other income

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

Years ended December 31,
2016 2015
Rental revenue $ 577,169 $ 528,059
Interest income:
Interest income from bank deposits 294,035 930,379
Other interest income 135,606 97,121
Dividend income 143,936 124,749
Others 146,454 229,321
Total $ 1,297,200 $ 1,909,629
----- End of picture text -----

(25) Other gains and losses

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

Years ended December 31,
2016 2015
Net gains on financial assets at fair value
through profit or loss $ 103,820 $ 18,437
Net currency exchange losses ( 700,965) ( 2,418,535)
Gains on disposal of invested financial
assets 135,699 -
Impairment loss on financial assets ( 40,000) ( 85,000)
Gain on disposal of investments accounted
for using equity method 127,709 -
Losses on revaluation of investments
accounted for using equity method ( 42,359) -
Losses on disposal of property, plant and
equipment and investment property ( 303) ( 12,739)
Related expense charges on investment property ( 178,063) ( 192,348)
Others ( 52,761) ( 3,541)
Total ($ 647,223) ($ 2,693,726)
----- End of picture text -----

(26) Finance costs

Finance costs
	Years ended December 31,
	2016	2015
Interest expense:
Bank borrowings	601,847 $	760,813 $
Short-term notes and billspayable	54,845	70,332
Finance costs	656,692 $	831,145 $

143

(27) Expenses by nature

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

Years ended December 31,
2016 2015
Employee benefit expense $ 4,609,129 $ 3,978,903
Depreciation charges on property, plant and
equipment 347,261 310,258
Amortisation charges on intangible assets 57,596 31,981
$ 5,013,986 $ 4,321,142
----- End of picture text -----

(28) Employee benefit expense

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

Years ended December 31,
2016 2015
Wages and salaries $ 3,901,637 $ 3,395,968
Labor and health insurance fees 295,545 207,484
Pension costs 320,525 300,300
Other personnel expenses 91,422 75,151
$ 4,609,129 $ 3,978,903
----- End of picture text -----

A. According to the Articles of Incorporation of the Company, when distributing earnings, a ratio of distributable profit before tax of the current year, covering accumulated losses, shall be distributed as employees’ compensation and directors’ and supervisors’ remuneration. The ratio shall be at least 0.01% and not be more than 10% for employees’ compensation and shall not be higher than 1% for directors’ and supervisors’ remuneration. The Company may, by a resolution adopted by a majority vote at a meeting of Board of Directors attended by two-thirds of the total number of directors, have the profit distributable as employees’ compensation distributed in the form of shares or in cash and directors’ and supervisors’ remuneration distributed in the form of cash.

In the case of employee stock bonuses, the employees of the subsidiaries meeting certain terms authorized by the Company’s Chairman are included.

B. For the years ended December 31, 2016 and 2015, employees’ compensation (bonus) was accrued at $600; directors’ and supervisors’ remuneration was accrued at $6,000 and $7,600, respectively. The aforementioned amounts were recognized in salary expenses.
The employees’ compensation and directors’ and supervisors’ remuneration were estimated and accrued based on 0.012% and 0.12% of distributable profit of current year for the year ended December 31, 2016. The employees’ compensation and directors’ and supervisors’ remuneration resolved by the Board of Directors were $600 and $6,000, and will be distributed in the form of cash.

For 2015, the employees’ compensation and directors’ and supervisors’ remuneration resolved at the meeting of Board of Directors amounted to $600 and $6,000, respectively. The difference of $0 and $1,600 has been adjusted in the profit or loss of 2016.

144

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.

(29) Income tax

A. Income tax expense

(a)Components of income tax expense:

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

Years ended December 31,
2016 2015
Current tax:
Current tax liabilities $ 1,043,353 $ 1,229,110
Current tax assets ( 222,828) ( 172,509)
Tax payable from prior years ( 712,675) ( 604,567)
Current tax on profits for the period 107,850 452,034
(Over) underestimation of prior year’s income tax ( 39,335) ( 78,865)
Prepaid income tax 676,933 631,342
Gain on business combinations ( 9,523) -
Additional 10% tax on undistributed earnings - ( 125,518)
Total current tax 735,925 878,993
Deferred tax:
Origination and reversal of temporary differences ( 135,184) ( 685,636)
Total deferred tax ( 135,184) ( 685,636)
Others:
Additional 10% tax on undistributed earnings - 125,518
Income tax expense $ 600,741 $ 318,875
The income tax relating to components of other comprehensive income is as follows: g to components of other comprehensive income is as follows: to components of other comprehensive income is as follows: ponents of other comprehensive income is as follows: onents of other comprehensive income is as follows: prehensive income is as follows: rehensive income is as follows:
Years ended December 31,
2016 2015
Remeasurement of defined benefit obligations $ 3,785 $ 1,563
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(b)The income tax relating to components of other comprehensive income is as follows: g to components of other comprehensive income is as follows: to components of other comprehensive income is as follows: ponents of other comprehensive income is as follows: onents of other comprehensive income is as follows: prehensive income is as follows: rehensive income is as follows:

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B. Reconciliation between income tax expense and accounting profit

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2016 2015
Tax calculated based on profit before tax and statutory
tax rate $ 1,483,667 $ 667,824
Effects from items disallowed by tax regulation ( 290,131) 123,542
Tax exempted income by tax regulation ( 66,908) ( 31,491)
Temporary difference not recognised as deferred tax
liabitities ( 714,903) ( 487,653)
Taxable loss not recognised as deferred tax assets 228,351 -
Additional 10% tax on undistributed earnings - 125,518
Overestimation of prior year’s income tax ( 39,335) ( 78,865)
Income tax expense $ 600,741 $ 318,875
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C. Amounts of deferred tax assets or liabilities as a result of temporary difference and loss carryforward are as follows:

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Year ended December 31, 2016
Recognized
Acquired from in other
business Recognized in comprehensive Effects on
January 1, combinations profit or loss income exchange rate December 31,
Temporary differences:
-Deferred tax assets:
Unrealized bad debts $ 375,216 $ 1,185 $ 82,817 $ - ($ 21,839) $ 437,379
Unrealized loss on inventory value 75,009 9,081 20,654 - ( 4,981) 99,763
decline
Depreciation 16,674 - 1,779 - ( 877) 17,576
Unrealised exchange loss 7,740 - ( 23,696) - 164 ( 15,792)
Unused compensated absences 41,191 1,196 3,343 - ( 1,705) 44,025
Accrued pensions 42,368 4,733 1,745 3,785 217 52,848
Unrealized accrued expenses 130,186 572 ( 77,868) - ( 2,515) 50,375
Loss carryforward (Note) 499,813 680 165,551 - ( 44,902) 621,142
Subtotal $ 1,188,197 $ 17,447 $ 174,325 $ 3,785 ($ 76,438) $ 1,307,316
-Deferred tax liabilities:
Unrealised purchase discount ($ 62,845) $ - ($ 48,039) $ - $ 5,033 ($ 105,851)
Unrealised exchange gain - ( 45) ( 985) - - ( 1,030)
Others ( 49,134) - 9,883 - 1,828 ( 37,423)
Subtotal ($ 111,979) ($ 45) ($ 39,141) $ - $ 6,861 ($ 144,304)
Total $ 1,076,218 $ 17,402 $ 135,184 $ 3,785 ($ 69,577) $ 1,163,012
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Year ended December 31, 2015
Recognized
in other
Recognized in comprehensive Effects on
January 1, profit or loss income exchange rate December 31,
Temporary differences:
-Deferred tax assets:
Unrealized bad debts $ 274,523 $ 119,821 $ - ($ 19,128) $ 375,216
Unrealized loss on inventory value decline 84,115 ( 5,282) - ( 3,824) 75,009
Depreciation 17,353 171 - ( 850) 16,674
Unrealised exchange loss 8,362 ( 227) - ( 395) 7,740
Unused compensated absences 43,461 ( 601) - ( 1,669) 41,191
Accrued pensions 40,645 ( 645) 1,563 805 42,368
Unrealized accrued expenses 78,072 58,751 - ( 6,637) 130,186
Loss carryforward (Note) 51,379 473,914 - ( 25,480) 499,813
Subtotal $ 597,910 $ 645,902 $ 1,563 ($ 57,178) $ 1,188,197
-Deferred tax liabilities:
Unrealised purchase discount ($ 132,851) $ 66,919 $ - $ 3,087 ($ 62,845)
Others ( 24,361) ( 27,185) - 2,412 ( 49,134)
Subtotal ($ 157,212) $ 39,734 $ - $ 5,499 ($ 111,979)
Total $ 440,698 $ 685,636 1,563 ($ 51,679) $ 1,076,218
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Note: Realised but unused loss carryforward from expected future taxable profits.

D. Expiration dates of unused tax losses and amounts of unrecognised deferred tax assets are as follows:

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December 31, 2016
Amount filed Deferred tax
Year incurred /assessed Unused amount assets Expiry year
2012~2016 $ 3,750,405 $ 3,750,405 $ 1,333,165 2017~2022
December 31, 2015
Amount filed Deferred tax
Year incurred /assessed Unused amount assets Expiry year
2012~2015 $ 2,346,421 $ 2,346,421 $ 372,195 2016~2022
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E. The amounts of deductible temporary difference that are not recognised as deferred tax assets are as follows:

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December 31, 2016 December 31, 2015
Deductible temporary differences $ 15,935 $ 79,922
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F. The subsidiaries’ losses are allowed to be carried forward from 2017 to 2022.
G. The Company has not recognised taxable temporary differences associated with investment in subsidiaries as deferred tax liabilities. As of December 31, 2016 and 2015, the amounts of temporary difference unrecognised as deferred tax liabilities were $7,296,663 and $7,089,038, respectively.

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H. As of December 31, 2016, the Company’s income tax returns through 2014 have been assessed and approved by the Tax Authority.
I. Unappropriated retained earnings:

and approved by the Tax Authority. Unappropriated retained earnings:
		December 31,2016		December 31,2015
Earningsgenerated in and after 1998		7,992,064 $		6,823,082 $

J. As of December 31, 2016 and 2015, the balance of the imputation tax credit account was $182,135 and $205,499, respectively. The creditable tax rate was 5.31% for 2015 and is estimated to be 2.53% for 2016.

(30) Earnings per share

Earnings per share
	Year	ended December 31,2016
		Weighted average
		number of ordinary
		shares outstanding	Earningsper
	Amount after tax	(share in thousands)	share(in dollars)
Basic earnings per share
Profit attributable to ordinary shareholders of theparent	4,876,679 $	1,667,947	2.92 $
Diluted earnings per share
Profit attributable to ordinary shareholders of theparent	4,876,679	1,667,947
Assumed conversion of all dilutive potential ordinaryshares
Employees’ bonus	-	28
Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutivepotential ordinaryshares	4,876,679 $	1,667,975	2.92 $

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Year ended December 31, 2015
Weighted average
number of ordinary
shares outstanding Earnings per
Amount after tax (share in thousands) share (in dollars)
Basic earnings per share
Profit attributable to ordinary shareholders
of the parent $ 3,185,995 1,667,947 $ 1.91
Diluted earnings per share
Profit attributable to ordinary shareholders
of the parent 3,185,995 1,667,947
Assumed conversion of all dilutive potential
ordinary shares
Employees’ bonus - 31
Profit attributable to ordinary shareholders
of the parent plus assumed conversion of
all dilutive potential ordinary shares $ 3,185,995 1,667,978 $ 1.91
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(31) Business combinations

A. To expand the scale of entire operation and exert synergy of economic of scale, on April 7, 2016, the Group acquired 55.41% of the share capital of Bestcom Infotech Corp for $1,029,289, and also acquired 3.73% of the share capital for $69,369 through Section 30 of the Business Mergers And Acquisitions Act, and with 40.86% of the share capital it already held, the Group now had 100% of the share capital and obtained the control.
B. The following table summarizes the consideration paid for Bestcom Infotech Corp and the fair values of the assets acquired and liabilities assumed at the acquisition date, as well as the non-controlling interest’s proportionate share of the recognised amounts of acquiree’s identifiable net assets at the acquisition date:

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April 7, 2016
Purchase consideration – cash paid $ 1,098,658
Fair value of equity interest in Bestcom Infotech Corp held before the
759,002
business combination
1,857,660
Fair value of the identifiable assets acquired and liabilities assumed
Cash and cash equivalents 153,570
Notes receivable 76,668
Accounts receivable (including lease payments receivable) 1,867,428
Other receivables 40,842
Inventories 619,293
Other current assets 43,708
Non-current available-for-sale financial assets 31,466
Investments accounted for using equity method 63,755
Property, plant and equipment 20,532
Intangible assets 7,114
Other non-current assets 149,328
Short-term borrowings ( 250,389)
Short-term notes and bills payable ( 300,000)
Notes payable ( 60,548)
Accounts payable ( 558,376)
Other payable ( 229,940)
Current tax liabilities ( 28,598)
Other current liabilities ( 7,031)
Other non-current liabilities ( 20,641)
Total identifiable net assets 1,618,181
Goodwill $ 239,479
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C. The Group recognised a loss of $42,359 as a result of measuring at fair value its 40.86% equity interest in Bestcom Infotech Corp held before the business combination.

D. The operating revenue included in the consolidated statement of comprehensive income since April 7, 2016 contributed by Bestcom Infotech Corp was $9,135,149. Bestcom Infotech Corp also contributed profit before income tax of $196,432 over the same period. Had Bestcom Infotech Corp been consolidated from January 1, 2016, the consolidated statement of comprehensive income would increase operating revenue of $2,301,849 and profit before income tax of $33,522.

150

(32) Operating leases

The Group leases office buildings to others under non-cancellable operating lease agreements. For the years ended December 31, 2016 and 2015, the Group recognised rental revenue of $577,169 and $528,059, respectively. The Group has leased a series of operating leases to several companies, and these leases have terms expiring between 2017 and 2022, and some leases are renewable at the end of the lease period. The future aggregate minimum lease payments receivable under non-cancellable operating leases are as follows:

under non-cancellable operatingleases are as follows:
	December 31,2016	December 31,2015
Not later than oneyear	367,490 $	430,751 $
Later than oneyear but not later than fiveyears	908,578	1,159,086
Later than fiveyears	131,490	247,881
	1,407,558 $	1,837,718 $

(33) Supplemental cash flow information

A. Investing activities with partial cash payments:

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Years ended December 31,
2016 2015
Purchase of property, plant and equipment $ 507,476 $ 927,750
Add: opening balance of payable on equipment 53,078 95,253
Less: ending balance of payable on equipment ( 43,626) ( 53,078)
Effects on exchange rate ( 2,946) 986
Cash paid during the period $ 513,982 $ 970,911
Years ended December 31,
2016 2015
Purchase of intangible assets $ 70,672 $ 56,861
Add: opening balance of other payables 33,756 8,182
Less: ending balance of other payables ( 17,899) ( 33,756)
Effects on exchange rate ( 258) -
Cash paid during the period $ 86,271 $ 31,287
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B. The Group acquired 100% of the share capital of Bestcom Infotech Corp. on April 7, 2016. For the summary of the consideration paid for Bestcom Infotech Corp. and the fair values of the assets acquired and liabilities, please refer to Note 6(31).

151

7. RELATED PARTY TRANSACTIONS

(1) Significant related party transactions and balances

A. Operating revenue

Operating revenue
	Years ended December 31,
	2016	2015
Sales ofgoods:
－Associates	158,176 $	211,313 $
－Other relatedparties	1,087,982	590,804
	1,246,158 $	802,117 $

Goods are sold based on the price lists in force and terms that would be available to third parties. The collection term for related parties is within 30 ~ 130 days of the date of statement. The collection term for third parties is within 7 ~ 165 days of the date of statement.

B. Purchases of goods

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Years ended December 31,
2016 2015
Purchases of goods:
－Associates $ 5,775 $ 435,248
－Other related parties 653 1,627
$ 6,428 $ 436,875
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Goods and services are bought from associates on normal commercial terms and conditions. The collection term for related parties is within 30~40 days of the date of statement. The collection term for third parties is within 1~120 days after receipt of goods or 10 ~ 120 days from the first day of the month following the month of the receipt.

C. Receivables from related parties

Receivables from related parties
	December 31,2016	December 31, 2015
Receivables from relatedparties:
－Associates	54,551 $	32,138 $
－Other relatedparties	329,914	72,037
	384,465 $	104,175 $

The receivables from related parties arise mainly from sale transactions. The receivables are unsecured in nature and bear no interest. There are no provisions held against receivables from related parties.

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D. Payables to related parties

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December 31, 2016 December 31, 2015
Accounts payable:
－Associates $ - $ 8,935
－Other related parties 2 3,261
$ 2 $ 12,196
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The payables to related parties arise mainly from purchase transactions. The payables bear no interest.

E. Other transactions

The details of other receivables, dividend revenue and other payables arising from rental service and trademark authorisation that the Group provides to related parties are as follows:

Other receivables Associates Other relatedparties Otherpayables Associates Other relatedparties Other income －Associates －Other relatedparties Key management compensation			Years ended December 31,	Years ended December 31,	Years ended December 31,	Years ended December 31,	Years ended December 31,
			2016		2015
	Other receivables Associates Other relatedparties		590 $ -		$	17,746 44,972
			590 $		$	62,718
			Years ended December 31,
	Otherpayables		2016		2015

	Associates		988 $		$		5,300
	Other relatedparties		2,965 3,953 $				3,509 8,809
					$
			Years ended December 31,
			2016		2015
	Other income
	－Associates		10,984 $		34,067 $
	－Other relatedparties		106,582		123,313
			117,566 $		157,380 $

			Years ended December 31,
			2016	2015
Short-term employee benefits		66,480 $		65,540 $
Post-employment benefits(Note)		3,440		4,616
Total		69,920 $		70,156 $

(2) Key management compensation

Note: Benefits are provisions that are not actually distributed.

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8. PLEDGED ASSETS

The Group’s assets pledged as collateral are as follows:

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Book value
Pledged asset December 31, 2016 December 31, 2015 Purpose
Accounts receivable $ - $ 1,486,160 Pledged for short-term borrowings
Inventories - 1,411,021 Pledged for short-term borrowings
Other current assets:
Pledged time deposits 20,015 - Secured loans and warranty
guarantees
Other non-current assets:
Pledged time deposits 260,562 1,060,420 Guarantees for purchases; short-term
secured loans and promissory notes.
Property, plant and equipment:
Land and buildings 225,353 238,390 Guarantees for secured loans of
Fortune Ideal Ltd. (Actual but not
used)
$ 505,930 $ 4,195,991
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9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT COMMITMENTS

(1) Contingencies

A. As of December 31, 2016 and 2015, the Group issued promissory notes to guarantee the suppliers’ credit limit amounting to $2,130,210 and $713,960, respectively, for inventory purchases.
B. On November 24, 2015, Kunshan Kunhao Electromechanical Co.Ltd. (Kunhao) filed a lawsuit against Syntech Asia Ltd. (SAL), the Company’s indirect wholly-owned subsidiary, in the Hong Kong High Court for breach of oral contract of sales on July 7, 2014 and requested SAL to compensate Kunhao for its losses amounting to USD 2,964 thousands. SAL disagreed with the request and raised an appeal in accordance with Hong Kong laws. SAL submitted an application to the Hong Kong High Court in February 1, 2016 and requested the Hong Kong High Court to deny the claim of Kunhao. The Hong Kong High Court has not yet begun formal court hearings on the lawsuit, so the result of the litigation is uncertain. Therefore, the Group has not estimated the potential losses in the financial statements.

154

C. On December 22, 2014, Fairchild Semiconductor International, Inc. and Fairchild Semiconductor Corporation filed a third party lawsuit against the Company and Synnex Electronic Hong Kong Ltd, in United States District Court for Massachusetts for breach of agency contract since the Company and Synnex Electronic Hong Kong Ltd did not state the limit of warranty liability. This caused Fairchild to bear a significant amount of warranty liability that Fairchild requested the Company and Synnex Electronic Hong Kong Ltd to compensate for its losses amounting to USD 30,000 thousand. For this lawsuit, the Company and Synnex Electronic Hong Kong Ltd advocated that Fairchild breached the personal jurisdiction and had insufficient reason to prosecute. The United States District Court agreed with the Company and Synnex Electronic Hong Kong Ltd and dismissed the lawsuit by Fairchild on June 18, 2015. In the first quarter of 2016, Fairchild Semiconductor Hong Kong Limited filed a lawsuit against the Company again in Hong Kong International Arbitration Centre. The Hong Kong International Arbitration Centre has not yet begun formal court hearings on the lawsuit, so the result of the litigation is uncertain. Therefore, the Company has not estimated the potential losses in the financial statements.

(2) Commitments

A. Capital expenditure contracted for at the balance sheet date but not yet incurred is as follows:

		December 31,2016		December 31,2015
Property, plant and equipment		512,989 $		140,668 $

B. Operating lease agreements

The Group leases in offices under non-cancellable operating lease agreements. The future aggregate minimum lease payments under non-cancellable operating leases are as follows:

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

December 31, 2016 December 31, 2015
Not later than one year $ 377,077 $ 312,262
Later than one year but not later than five years 199,963 373,471
Later than five years 591 89
Total $ 577,631 $ 685,822
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10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

The appropriations of 2016 earnings had been proposed at the Board of Directors’ meeting on March 17, 2017, please refer to Note 6(21).

155

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 2016, the Group’s strategy was unchanged from 2015. The gearing ratios at December 31, 2016 and 2015 were 66% and 67%, respectively.

(2) Financial instruments

A. Fair value information of financial instruments

Except for those listed in the table below, the carrying amounts of the Group’s financial instruments not measured at fair value (including cash and cash equivalents, notes receivable, accounts receivable, other receivables, short-term borrowing, notes payable, accounts payable and other payables) are approximate to their fair values. The fair value information of financial instruments measured at fair value is provided in Note 12(3).

	December 31,2016	December 31,2016
Financial assets:	Book value	Fair value
Other financial assets (shown as other non-current assets)	957,092 $	957,092 $

Financial liabilities:
Deposits received (shown as other non-current liabilities)	138,333 $	138,333 $
	December 31,2015
	Book value	Fair value
Financial assets:
Other financial assets (shown as other non-current assets)	1,283,690 $	1,283,690 $

Financial liabilities:
Deposits received (shown as other non-current liabilities)	169,975 $	169,975 $

156

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. The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial position and financial performance.

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 various currency exposures, primarily with respect to the USD and RMB. Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities and net investments in foreign operations.
ii. Management has set up a policy to require group companies to manage their foreign exchange risk against their functional currency. The group companies are required to hedge their entire foreign exchange risk exposure with the Group treasury. To manage their foreign exchange risk arising from future commercial transactions and recognised assets and liabilities, entities in the Group use forward foreign exchange contracts, transacted with Group treasury. Foreign exchange risk arises when future commercial transactions or recognised assets or liabilities are denominated in a currency that is not the entity’s functional currency.
iii. 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, USD and AUD). The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

157

December 31, 2016

(Foreign currency: functional
currency)
Financialassets
Monetary items
USD:NTD
USD:HKD (Note 1)
USD:AUD (Note 1)
Non-monetary items
INR:USD (Note 1)
THB:USD (Note 1)
Financial liabilities
Monetary items
USD:NTD
USD:HKD (Note 1)
USD:AUD (Note 1)
USD:RMB (Note 1)
(Foreign currency: functional
currency)
Financialassets
Monetary items
USD:NTD
USD:HKD (Note 1)
USD:AUD (Note 1)
Non-monetary items
INR:USD (Note 1)
THB:USD (Note 1)
Financial liabilities
Monetary items
USD:NTD
USD:HKD (Note 1)

Foreign currency
amount
(In thousands)
(Note 2)

158

USD:AUD (Note	1)	4,405	1.37	144,844
USD:RMB (Note	1)	983,095	6.49	32,324,160

159

Note 1: The functional currencies of certain consolidated entities are not NTD, thus, this information has to be considered when reporting. For example, when a subsidiary’s functional currency is RMB, the subsidiary’s segments that are involved with USD have to be taken into consideration.
Note 2: Including transactions within the Group which are eliminated for preparation of the consolidated financial statements.
iv. Total exchange gain (loss), including realized and unrealized arising from significant foreign exchange variation on the monetary items held by the Group for the years ended December 31, 2016 and 2015, amounted to ($700,965) and ($2,418,535), respectively.
v. Analysis of foreign currency market risk arising from significant foreign exchange variation:

variation:
(Foreign currency: functional currency) Financial assets Monetary items USD:NTD USD:HKD (Note) USD:AUD (Note) Financial liabilities Monetary items USD:NTD USD:HKD (Note) USD:AUD (Note) USD:RMB (Note)	Year ended December 31, 2016 Sensitivity analysis Degree of variation Effect on profit or loss Effect on other comprehensive income 1% $ 63,973 $ - 1% 39,842 - 1% 1,544 - 1% $ 23,217 $ - 1% 53,746 - 1% 1,420 - 1% 100,997 -

	Degree of variation	Effect on profit or loss
	1% 1% 1% 1% 1% 1% 1%

160

(Foreign currency: functional currency) Financial assets Monetary items USD:NTD USD:HKD (Note) USD:AUD (Note) Financial liabilities Monetary items USD:NTD USD:HKD (Note) USD:AUD (Note) USD:RMB (Note)	Year ended December 31, 2015 Sensitivity analysis Degree of variation Effect on profit or loss Effect on other comprehensive income 1% $ 30,225 $ - 1% 47,497 - 1% 1,681 - 1% $ 14,174 $ - 1% 83,205 - 1% 1,448 - 1% 323,242 -	Year ended December 31, 2015 Sensitivity analysis Degree of variation Effect on profit or loss Effect on other comprehensive income 1% $ 30,225 $ - 1% 47,497 - 1% 1,681 - 1% $ 14,174 $ - 1% 83,205 - 1% 1,448 - 1% 323,242 -

	Degree of variation	Effect on profit or loss
	1% 1% 1% 1% 1% 1% 1%

Note: The functional currencies of certain subsidiaries belonging to the Group are not NTD, thus, this information has to be considered when reporting. For example, when a subsidiary’s functional currency is RMB, the subsidiary’s segments that are involved with USD have to be taken into consideration.

Price risk

The Group is exposed to equity securities price risk because of investments held by the Group and classified on the consolidated balance sheet either as available-for-sale or at fair value through profit or loss. To manage its price risk arising from investments in equity securities, the Group diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Group.

The Group’s investments in equity securities comprise domestic listed and unlisted stocks. 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, 2016 and 2015 would have increased/decreased by $5,342 and $4,241, 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 $15,574 and $14,333, respectively, as a result of gains/losses on equity securities classified as available-for-sale.

161

Interest rate risk

i. The Group’s interest rate risk arises from short-term borrowings. Borrowings issued at variable rates expose the Group to cash flow interest rate risk which is partially offset by cash and cash equivalents held at variable rates. Borrowings issued at fixed rates expose the Group to fair value interest rate risk. During the years ended December 31, 2016 and 2015, the Group’s borrowings at variable rate were denominated in the NTD, USD and AUD.
ii. At December 31, 2016 and 2015, if interest rates on borrowings had been 1% higher with all other variables held constant, post-tax profit for the years ended December 31, 2016 and 2015 would have been $6,227 and $10,191 lower, respectively, mainly as a result of higher borrowing interest expense on floating rate borrowings.
(b) Credit risk
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. 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 deposits with banks and financial institutions, as well as credit exposures to customers, including outstanding receivables and committed transactions. For banks and financial institutions, only independently rated parties with a minimum rating of 'A' are accepted.
ii. For the years ended December 31, 2016 and 2015, no credit limits were exceeded during the reporting periods, and management does not expect any significant losses from non-performance by these counterparties.
iii. The credit quality information of financial assets that are neither past due nor impaired is provided in Note 6 (6).
iv. The ageing analysis of financial assets that were past due but not impaired is provided in Note 6 (6).
v. The individual analysis of financial assets that had been impaired is provided in the statement for each type of financial assets in Note 6.

(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

162

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 as follows:

Non-derivative financial

Non-derivative financial
liabilities: December 31, 2016 Short-term borrowings Short-term notes and bills payable Notes payable (including related parties) Accounts payable (including related parties) Other payables (including related parties) Deposits received Non-derivative financial	Less than 1 year	1 year to 2 years	Over 2 years
liabilities: December 31, 2015 Short-term borrowings Short-term notes and bills payable Notes payable (including related parties) Accounts payable (including related parties) Other payables (including related parties) Deposits received

163

Derivative financial liabilities: December 31, 2016 Forward exchange contracts	Less than 1 year	1 year to 2 years	Over 2 years	Book value $ -
	$ -	$ -	$ -

Derivative financial liabilities: December 31, 2015 Forward exchange contracts	Less than 1 year	1 year to 2 years	Over 2 years	Book value $ 7,684
	$ 7,684 $ -		$ -

iii. The Group does not expect the timing of occurrence of the cash flows estimated through the maturity date analysis will be significantly earlier, nor expect the actual cash flow amount will be significantly different.

(3) Fair value information

A. Details of the fair value of the Group’s financial assets and financial liabilities not measured at fair value are provided in Note 12(2)A. Details of the fair value of the Group’s investment property measured at cost are provided in Note 6(12).
B. 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 Group’s investment in listed stocks 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 unlisted stocks 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 equity investment without active market is included in Level 3.
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, 2016 and 2015 is as follows:

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Level 1	Level 2	Level 3
$ 534,086 $ - - 92 1,393,983 88,337 $ 1,928,069 $ 88,429 $- $- Level 1 Level 2		$ - - 75,096
$ 1,928,069		$ 75,096
$-	$-	$-
Level 1	Level 2	Level 3
$ 424,108 1,288,640		$ - 88,630
$ 1,712,748		$ 88,630
$-		$-

D. The methods and assumptions the Group used to measure fair value are as follows:

(a) For the instruments the Group used market quoted prices as their fair values (that is, Level

1), listed shares use closing price at the balance sheet date.

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(b) 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.
(c) When assessing non-standard and low-complexity financial instruments, 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.
(d) 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 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.
(e) Forward exchange contracts are usually valued based on the current forward exchange rate.
(f) 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, 2016 and 2015, there was no transfer between Level 1 and Level 2.
F. The following chart is the movement of Level 3 for the years ended December 31, 2016 and 2015:

2015:
		2016		2015
		Non-derivative		Non-derivative
		equityinstrument		equityinstrument
At January1		88,630 $		172,453 $
Losses recognised inprofit or loss	40,000) (		85,000) (
Gains and losses recognised in other comprehensive income (Note)		26,466		1,177
At December 31		75,096 $		88,630 $

Note: Shown as unrealised gain (loss) on available-for-sale financial assets.

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G. For the years ended December 31, 2016 and 2015, there was no transfer into or out from Level 3.
H. Financial quality management segment is in charge of valuation procedures for fair value measurements being categorised within Level 3, which is to verify independent fair value of financial instruments. Such assessment is to ensure the valuation results are reasonable by applying independent information to make results close to current market conditions, confirming the resource of information is independent, reliable and in line with other resources and represented as the exercisable price, and frequently calibrating valuation model, performing back-testing, updating inputs used to the valuation model and making any other necessary adjustments to the fair value.
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, 2016 Valuation technique Non-derivative equity instrument: Unlisted shares $ 75,096 Market comparable companies Fair value at December 31, 2015 Valuation technique Non-derivative equity instrument: Unlisted shares $ 88,630 Market comparable companies	Fair value at December 31, 2016 Valuation technique	Significant unobservable input	Range (weighted average)	Relationship of inputs to fair value The higher the discount for lack of marketability, the lower the fair value Relationship of inputs to fair value The higher the discount for lack of marketability, the lower the fair value
		Discount for lack of marketability Significant unobservable input	0.7 Range (weighted average)
		Discount for lack of marketability	0.7

J. The Group has carefully assessed the valuation models and assumptions used to measure fair value; therefore, the fair value measurement is reasonable. However, use of different valuation models or assumptions may result in difference measurement. The following is the effect of profit or loss or of other comprehensive income from financial assets and liabilities categorized within Level 3 if the inputs used to valuation models have changed:

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

December 31, 2016
Recognised in other
Recognised in profit or loss comprehensive income
Unfavourable Unfavourable
Input Change Favourable change change Favourable change change
Financial assets
Equity instrument Discount for lack ± 10% $ - $ - $ 7,510 $ 7,510
of marketability
December 31, 2015
Recognised in other
Recognised in profit or loss comprehensive income
Unfavourable Unfavourable
Input Change Favourable change change Favourable change change
Financial assets
Equity instrument Discount for lack ± 10% $ - $ - $ 8,863 $ 8,863
of marketability
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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 NT$300 million or 20% of paid-in capital or more: None.
F. Disposal of real estate reaching NT$300 million or 20% of paid-in capital or more: None.
G. Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paid-in capital or more: Please refer to table 5.
H. Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more: Please refer to table 6.
I. Trading in derivative instruments undertaken during the reporting periods: Please refer to Note 6(2).
J. Significant inter-company transactions during the reporting periods: Please refer to table 7.

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(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China): Please refer to table 8.

(3) Information on investments in Mainland China

A. Basic information: Please refer to table 9.
B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: None.

169

14. SEGMENT INFORMATION

(1) General information

The Group is primarily engaged in the sale of communication, computers and computer peripherals, electronic components and consumer electronic products. The Group operates business by geographic areas. The Board of Directors and management team set up operating strategies and allocate resources based on the operating performance of each area of sales.

(2) Measurement of segment information

The accounting policies of operating segments are the same as those in Note 4. The Chief Operating Decision-Maker assesses the performance of operating segments based on operating income (loss).

(3) Information about segments

The segment information provided to the Chief Operating Decision-Maker for the reportable segments for the years ended December 31, 2016 and 2015 was as follows:

Year ended December 31, 2016

Year ended December 31, 2016
			Australia and New
	Taiwan	HongKong/China	Zealand/Indonesia		Reconciliation	Total
Revenue from external customers	57,162,715 $	213,537,633 $	71,996,105 $		- $	342,696,453 $
Inter-segment revenue	2,693,842	33,355,487	160,157	36,209,486) (		-
Segment revenue	59,856,557 $	246,893,120 $	72,156,262 $	36,209,486) ($		342,696,453 $
Segmentprofit	744,810 $	2,011,641 $	1,512,781 $		- $	4,269,232 $
Segmentprofit, includingdepreciation	111,681 $	154,990 $	80,590 $		- $	347,261 $
Segment assets	21,859,504 $	80,802,246 $	25,169,420 $		- $	127,831,170 $

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Year ended December 31, 2015

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Australia and New
Taiwan Hong Kong/China Zealand/Indonesia Reconciliation Total
Revenue from external customers $ 47,932,451 $ 202,797,949 $ 71,403,052 $ - $ 322,133,452
Inter-segment revenue 2,647,796 51,540,462 152,528 ( 54,340,786) -
Segment revenue $ 50,580,247 $ 254,338,411 $ 71,555,580 ($ 54,340,786) $ 322,133,452
Segment profit $ 537,168 $ 2,164,150 $ 1,247,253 $ - $ 3,948,571
Segment profit, including depreciation $ 103,004 $ 138,870 $ 68,384 $ - $ 310,258
Segment assets $ 18,124,356 $ 88,295,331 $ 28,367,831 $ - $ 134,787,518
----- End of picture text -----

Note: Consolidated liabilities are not disclosed because it is not provided to the Chief Operating Decision-Maker.

(4) Reconciliation for segment income (loss)

A. The operating income (loss) of each area reported to the Chief Operating Decision-Maker is measured in a manner consistent with revenues and expenses in the statement of comprehensive income.
A reconciliation of reportable segment profit to the income before income tax for the years ended December 31, 2016 and 2015 is provided as follows:

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Year ended Year ended
December 31, 2016 December 31, 2015
Reportable segment profit $ 4,269,232 $ 3,948,571
Total non-operating revenue and expenses 1,456,245 ( 211,019)
Income before income tax $ 5,725,477 $ 3,737,552
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B. The amounts provided to the Chief Operating Decision-Maker with respect to total assets are measured in a manner consistent with that of the financial statements. The reconciliation and offset of the reportable segments’ assets are provided in Note 14(3).

171

(5) Information on products and services

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

Year ended Year ended
December 31, 2016 December 31, 2015
Product revenue $ 342,085,713 $ 321,650,942
Others 610,740 482,510
Total $ 342,696,453 $ 322,133,452
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(6) Geographical information

The external revenue is grouped according to the locations of the customers, and the non-current assets are grouped according to the locations of the non-current assets. Breakdown of revenue and non-current assets by geographic area is as follows:

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

Years ended December 31,
2016 2015
Revenue Non-current assets Revenue Non-current assets
Taiwan $ 57,162,715 $ 1,543,314 $ 47,932,451 $ 1,357,429
China and Hong Kong 213,537,633 6,461,041 202,797,949 7,050,613
Australia, New Zealand and Indonesia 71,996,105 1,738,126 71,403,052 1,593,964
Total $ 342,696,453 $ 9,742,481 $ 322,133,452 $ 10,002,006
----- End of picture text -----

(7) Major customer information

In 2016 and 2015, no single customer accounted for more than 10% of net operating revenue. Accordingly, no major customer information is presented.

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AI assistant

SYNNEX TECHNOLOGY INTERNATIONAL CORPORATION — Annual Report 2016

52019_rns_2017-08-03_5888d3ab-3477-44d0-be14-76b2f85616bf.pdf

Synnex Technology International Corporation

Taichung logistics center (Taichung branch)

China logistics center

Important Notice:

Synnex……The stagecoach that never stops

Leading distribution services provider

Globally unique business model

High value added distribution services provider

Non-stop positive growth cycle

Efficient back office operation mechanism

Comprehensive business philosophy

2016 Consolidated Financial Performance

INDEX

Letter to shareholders

Dear shareholders:

1. Revenue and profit

2. Concrete operating results

1. Expansion of the mobile phone plans business

3. Accelerating the development of the “cloud service”

Future Development Strategies

Synnex’s development strategy

Synnex highlights

Synnex highlights

I. Company profile

1) Milestone

(Continue last page)

2) Awards

(Continue last page)

II. Corporate Governance Report

1) Organization

 Group Structure

Organization and responsibility

Description of responsibilities

2) Information on directors, supervisors, presidents, senior executives of divisions & department management

 Major shareholders of the corporate directors or supervisors

 Information of directors and supervisors

 Remuneration to directors, supervisors and executive officers and employees’ bonus

Remuneration Policy

Director’s remuneration

Remuneration to the president and vice-president

Name and distribution status of the managers for distribution of employee bonus

3) Implementation of Corporate Governance

 Information on implementation of Board of Directors

 Information on operation of Audit Committee

 Operations of Remuneration committee

 Information on Remuneration committee members

 Performance of Social Responsibilities

 Status of Implementation of Integrity Operation

 Important resolutions of Shareholders’ Meeting and Board of Directors

Shareholders’ Meeting

Board of directors

4) Changes in shareholdings of directors, supervisors, managers, and principal shareholders

III. Capital and shares

1) Category of shares

2) Shareholder structure

3) Distribution of shareholding

4) Major shareholders

5) Market price per share, Net assets per share, earning per share and dividends

6) The policy and implementation of dividends

The dividend distribution proposed by shareholder meeting

Dividend policy

7) Uncompensated distribution of shares and its impact on company operation and EPS

8) Information on employee bonus and compensation for directors and supervisors

Provisions in Articles of Association

Estimation criterion and difference treatment

Information on proposed distribution approved by Board of Directors

Actual distribution of the preceding year and treatment of differences

Information on employee bonus and remuneration for directors and supervisors in the latest five calendar years

Summary of 2015 (distributed in 2016) employee stock bonus information: None

IV. Issuance of global depositary receipts, bonds, preferred shares and employee stock option

2) Status of employee stock option: None

3) Preferred shares: None

Operation highlights

Operation highlights

I. Scope of Business

2) Developing new products (service)

3) Overview of industry

SYNNEX TECHNOLOGY INTERNATIONAL CORPORATION Annual Report 2016