Altek — Audit Report / Information 2020

Nov 10, 2020

ALTEK CORPORATION

PARENT COMPANY ONLY FINANCIAL

STATEMENTS AND INDEPENDENT AUDITORS’

REPORT

DECEMBER 31, 2020 AND 2019 (Stock Code ： 3059)

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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.

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INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

PWCR 20000188

To the Board of Directors and Shareholders of ALTEK CORPORATION

Opinion

We have audited the accompanying parent company only balance sheets of ALTEK CORPORATION as of December 31, 2020 and 2019, and the related parent company only statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and the notes to the parent company only financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the financial position of ALTEK CORPORATION as of December 31, 2020 and 2019, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers 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. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the audit of the parent company only financial statements section of our report. We are independent of ALTEK CORPORATION in accordance with the Norm of Professional Ethics for Certified Public Accountants of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

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Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of ALTEK CORPORATION’s 2020 the parent company only financial statements of the current period. These matters were addressed in the context of our audit of the parent company only financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

Key audit matters for ALTEK CORPORATION’s 2020 the parent company only financial statements of the current period are stated as follows:

Timing of sales revenue recognition

Description

Please refer to Note 4(27) for accounting policies of revenue recognition. ALTEK CORPORATION’s revenue mainly arises from export sales and the cash amounts are material. As the sales terms vary from customers who are located in Mainland China, Europe and America, the terms in customer orders and contracts needs to be properly assessed. Since this involves judgement in the determination of timing of control transfer, we consider the timing of revenue recognition as a key audit matter.

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

• A. Assessed the appropriation of policies on sales revenue recognition.

• B. Assessed and tested the design of internal controls that are relevant to sales revenue recognition and the effectiveness of execution.

• C. Performed cutoff test on sales revenue in specific period around balance sheet date.

• D. Performed confirmation and substantive test on the balance of accounts receivable at the end of period to confirm accounts receivable and that relevant sales revenue have been recorded in the proper period.

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Responsibilities of management and those charged with governance for the parent company only financial statements

Management is responsible for the preparation and fair presentation of the parent company only financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and 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 parent company only financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the parent company only financial statements, management is responsible for assessing ALTEK CORPORATION’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 ALTEK CORPORATION or to cease operations, or has no realistic alternative but to do so.

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

Auditors’ responsibilities for the audit of the parent company only financial statements

Our objectives are to obtain reasonable assurance about whether the parent company only financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but it is not a guarantee that an audit conducted in accordance with the generally accepted auditing standards in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these parent company only financial statements.

As part of an audit in accordance with the generally accepted auditing standards in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: A. Identify and assess the risks of material misstatement of the parent company only financial statements,

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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.

• B. 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 ALTEK CORPORATION’s internal control.

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

• D. 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 ALTEK CORPORATION’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the parent company only financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause ALTEK CORPORATION to cease to continue as a going concern.

• E. Evaluate the overall presentation, structure and content of the parent company only financial statements, including the disclosures, and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• F. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within ALTEK CORPORATION to express an opinion on the parent company only financial statements. We are responsible for the direction, supervision and performance of ALTEK CORPORATION’s 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

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matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the parent company only financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Li, Tien-Yi

[Chiang, Tsai-Yen ]

For and on behalf of PricewaterhouseCoopers, Taiwan March 25, 2021

------------------------------------------------------------------------------------------------------------------------------------------------The accompanying parent company only financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying parent company only financial statements and independent auditors’ report 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 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.

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ALTEK CORPORATION

PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

Assets	Notes 6(1) 6(4) 6(4) and 7 7 6(5) 6(2) 6(3) 6(6) 6(7) and 8 6(8) 6(9) and 8 6(10) 6(28)	December31,2020 AMOUNT % $ 516,404 4 685,899 5 13,677 - 1,793 - 61,816 - 3,216 - 75,032 1 10,816 - 1,404 - 1,370,057 10 48,229 - - - 9,387,038 72 1,305,203 10 101,792 1 756,915 6 5,618 - 134,168 1 32,429 - 11,771,392 90 $ 13,141,449 100	December31,2019	December31,2019
		AMOUNT $ 516,404 685,899 13,677 1,793 61,816 3,216 75,032 10,816 1,404 1,370,057 48,229 - 9,387,038 1,305,203 101,792 756,915 5,618 134,168 32,429 11,771,392 $ 13,141,449	AMOUNT $ 824,473 530,097 5 1,033 33,864 4,032 88,080 8,241 1,103 1,490,928 40,156 - 9,235,027 1,335,038 98,447 763,733 1,182 120,051 28,944 11,622,578 $ 13,113,506	%
Current assets 1100 Cash and cash equivalents 1170 Accounts receivable, net 1180 Accounts receivable - related parties 1200 Other receivables 1210 Other receivables - related parties 1220 Current income tax assets 130X Inventories 1410 Prepayments 1470 Other current assets 11XX Current Assets Non-current assets 1510 Non-current financial assets at fair value through profit or loss 1517 Non-current financial assets at fair value through other comprehensive income 1550 Investments accounted for under the equity method 1600 Property, plant and equipment 1755 Right-of-use assets 1760 Investment property - net 1780 Intangible assets 1840 Deferred income tax assets 1900 Other non-current assets 15XX Non-current assets 1XXX Total assets				6 4 - - - - 1 - -
				11
				- - 71 10 1 6 - 1 -
				89
				100

(Continued)

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ALTEK CORPORATION

PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity

December31,2020 December31,2019 Notes AMOUNT % AMOUNT % 6(11) $ 2,330,000 18 $ 2,160,000 17 6(12) 299,798 2 229,962 2 981 - 1,530 - 31,859 - 30,484 - 7 895,646 7 1,228,030 9 184,840 2 163,408 1 7 8,831 - 8,027 - 6(16) 8,164 - 5,093 - 7,645 - 5,114 - 6(13) 272,159 2 16,001 - 4,039,923 31 3,847,649 29 6(16) 58,187 - 63,187 1 6(28) 463,796 4 449,708 3 95,176 1 93,863 1 16,706 - 15,552 - 633,865 5 622,310 5 4,673,788 36 4,469,959 34 6(17) 2,794,973 21 2,753,613 21 6(18) 2,335,226 18 2,280,487 18 6(19) 1,402,467 11 1,394,151 11 592,325 4 435,679 3 2,249,655 17 2,394,976 18 6(20) ( 697,698) ( 5) ( 615,359) ( 5 ) 6(17) ( 209,287) ( 2) - - 8,467,661 64 8,643,547 66 $ 13,141,449 100 $ 13,113,506 100

Current liabilities 2100 Short-term borrowings 2110 Short-term notes and bills payable 2130 Current contract liabilities 2170 Accounts payable 2180 Accounts payable - related parties 2200 Other payables 2220 Other payables - related parties 2250 Provisions for liabilities - current 2280 Current lease liabilities 2300 Other current liabilities 21XX Current Liabilities Non-current liabilities 2550 Provisions for liabilities - non-current 2570 Deferred income tax liabilities 2580 Non-current lease liabilities 2600 Other non-current liabilities 25XX Non-current liabilities 2XXX Total Liabilities Equity Share capital 3110 Share capital - common stock Capital surplus 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings Other equity interest 3400 Other equity interest 3500 Treasury stocks 3XXX Total equity 3X2X Total liabilities and equity

The accompanying notes are an integral part of these parent company only financial statements.

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ALTEK CORPORATION

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars,except earnings per share amounts)

Items

YearendedDecember31 2020 2019 Notes AMOUNT % AMOUNT % 6(21) and 7 $ 3,241,557 100 $ 3,967,656 100 6(5) and 7 ( 2,883,034 ) ( 89) ( 3,582,681) ( 90 ) 358,523 11 384,975 10 - - 1,445 - 358,523 11 386,420 10 6(26)(27) and 7 ( 26,121 ) ( 1) ( 24,519) ( 1 ) ( 230,383 ) ( 7) ( 207,587) ( 5 ) ( 299,046 ) ( 9) ( 275,249) ( 7 ) 12(2) 155 - 5,091 - ( 555,395 ) ( 17) ( 502,264) ( 13 ) ( 196,872 ) ( 6) ( 115,844) ( 3 ) 6(22) 2,778 - 34,898 1 6(23) and 7 28,423 1 31,549 1 6(24) 17,186 - 22,791 1 6(25) ( 24,965 ) ( 1) ( 25,196) ( 1 ) 348,436 11 141,554 3 371,858 11 205,596 5 174,986 5 89,752 2 6(28) ( 14,629 ) - ( 5,444) - $ 160,357 5 $ 84,308 2 6(14) ( $ 1,153 ) - ($ 1,430) - 6(3) ( 3,787 ) - ( 61,872) ( 2 ) 6(28) 988 - 558 - ( 3,952 ) - ( 62,744) ( 2 ) ( 70,252 ) ( 2) ( 296,877) ( 7 ) 6(28) 14,051 - 59,375 1 ( 56,201 ) ( 2) ( 237,502) ( 6 ) ( $ 60,153 ) ( 2) ($ 300,246) ( 8 ) $ 100,204 3 ($ 215,938) ( 6 ) 6(29) $ 0.60 $ 0.31 6(29) $ 0.59 $ 0.31

4000 Sales revenue 5000 Operating costs 5900 Net operating margin 5920 Realized profit from sales 5950 Net operating margin Operating expenses 6100 Selling expenses 6200 General and administrative expenses 6300 Research and development expenses 6450 Expected credit gains 6000 Total operating expenses 6900 Operating loss Non-operating income and expenses 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Finance costs 7070 Share of profit of associates and joint ventures accounted for using equity method, net 7000 Total non-operating income and expenses 7900 Profit before income tax 7950 Income tax expense 8200 Profit for the year Other comprehensive income Components of other comprehensive income (loss) that will not be reclassified to profit or loss 8311 Other comprehensive income, before tax, actuarial gains (losses) on defined benefit plans 8316 Unrealised gains (losses) from investments in equity instruments measured at fair value through other comprehensive income 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss 8310 Components of other comprehensive income that will not be reclassified to profit or loss Components of other comprehensive (loss) income that will be reclassified to profit or loss 8361 Other comprehensive income, before tax, exchange differences on translation 8399 Income tax relating to the components of other comprehensive income 8360 Components of other comprehensive income that will be reclassified to profit or loss 8300 Other comprehensive loss for the year 8500 Total comprehensive income (loss) for the year Basic earnings per share 9750 Basic earnings per share Diluted earnings per share 9850 Diluted earnings per share

The accompanying notes are an integral part of these parent company only financial statements.

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ALTEK CORPORATION

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

2019 Balance at January 1,2019 Profit for the year Other comprehensive loss for the year Total comprehensive income (loss) Appropriation of 2018 earnings Legal reserve Special reserve Cash dividend Share-based payment transactions Restricted stocks Retirement of employee resticted shares Balance at December 31, 2019 2020 Balance at January 1, 2020 Profit for the year Other comprehensive loss for the year Total comprehensive income (loss) Appropriation of 2019 earnings Legal reserve Special reserve Cash dividend Share-based payment transactions Restricted stocks Retirement of employee resticted shares Changes in ownership interest in subsidiaries Treasury shares repurchased Balance at December 31, 2020	Notes		Commonstock		Additionalpaid-incapital				RetainedEarnings	RetainedEarnings			Otherequityint	ere	st		Treasury stocks		Totalequity
							Legal reserve		Special reserve		Unappropriated retained earnings		Currency translation differences of foreignoperations		Other
	6(20) 6(19) 6(15)(20) 6(15)(17)(18)(20) 6(15)(17)(18)(20) 6(20) 6(19) 6(15)(20) 6(15)(17)(18)(20) 6(15)(17)(18)(20) 6(18) 6(17)		$ 2,740,113 - - - - - - - 14,500 ( 1,000 ) $ 2,753,613 $ 2,753,613 - - - - - - - 43,120 ( 1,760 ) - - $ 2,794,973		$ 2,262,397 - - - - - - - 19,430 ( 1,340 ) $ 2,280,487 $ 2,280,487 - - - - - - - 54,798 ( 2,194 ) 2,135 - $ 2,335,226		$ 1,381,094 - - - 13,057 - - - - - $ 1,394,151 $ 1,394,151 - - - 8,316 - - - - - - - $ 1,402,467		$ 425,580 - - - - 10,099 - - - - $ 435,679 $ 435,679 - - - - 156,646 - - - - - - $ 592,325		$ 2,471,973 84,308 ( 1,144 ) 83,164 ( 13,057 ) ( 10,099 ) ( 137,005 ) - - - $ 2,394,976 $ 2,394,976 160,357 ( 922 ) 159,435 ( 8,316 ) ( 156,646 ) ( 139,794 ) - - - - - $ 2,249,655		($ 256,833 ) - ( 237,502 ) ( 237,502 ) - - - - - - ($ 494,335 ) ($ 494,335 ) - ( 56,201 ) ( 56,201 ) - - - - - - - - ($ 550,536 )		($ 38,105 ) - ( 61,600 ) ( 61,600 ) - - - 10,271 ( 33,930 ) 2,340 ($ 121,024 ) ($ 121,024 ) - ( 3,030 ) ( 3,030 ) - - - 70,856 ( 97,918 ) 3,954 - - ($ 147,162 )		$ - - - - - - - - - - $ - $ - - - - - - - - - - - ( 209,287 ) ($ 209,287 )		$ 8,986,219 84,308 ( 300,246 ) ( 215,938 ) - - ( 137,005 ) 10,271 - - $ 8,643,547 $ 8,643,547 160,357 ( 60,153 ) 100,204 - - ( 139,794 ) 70,856 - - 2,135 ( 209,287 ) $ 8,467,661

The accompanying notes are an integral part of these parent company only financial statements.

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ALTEK CORPORATION

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax Adjustments Adjustments to reconcile profit (loss) Depreciation Amortization Expected credit gains Net gain on financial assets at fair value through profit Interest expense Interest income Dividend income Share-based payment compensation cost Profit on investments accounted for under the equity method Sales profit against of subsidiary Changes in operating assets and liabilities Changes in operating assets Financial assets at fair value through profit or loss Accounts receivable Accounts receivable-related parties Other receivables Other receivables-related parties Inventories Prepayments Other current assets Changes in operating liabilities Current contract liabilities Accounts payable Accounts payable - related parties Other payable Other payable-related parties Provision of liabilities Other current liabilities Other non-current liabilities Cash outflow generated from operations Interest received Dividend received Interest paid Income tax (paid) received Net cash flows (used in) from operating activities

Year ended December 31 Notes 2020 2019 $ 174,986 $ 89,752 6(7)(8)(9)(26) 56,380 53,741 6(10)(26) 4,387 4,588 12(2) ( 155 ) ( 5,091 ) 6(2)(24) ( 8,073 ) ( 16,710 ) 6(25) 24,965 25,196 6(22) ( 2,778 ) ( 34,898 ) 6(23) ( 1,526 ) ( 763 ) 6(15) 41,454 5,074 ( 348,436 ) ( 141,554 ) - ( 1,445 ) - 237 ( 155,647 ) 207,723 ( 13,672 ) 418 ( 1,092 ) 1,423 1,450 11,118 13,048 ( 74,903 ) ( 2,575 ) ( 3,321 ) ( 301 ) ( 909 ) ( 549 ) 1,530 1,375 6,838 ( 332,384 ) ( 152,187 ) 17,613 ( 21,573 ) 804 ( 17,260 ) ( 1,929 ) ( 755 ) 6,158 ( 24,345 ) 51 64 ( 526,446 ) ( 88,012 ) 3,110 35,192 226,046 136,348 ( 22,737 ) ( 23,763 ) 1,198 ( 2,844 ) ( 318,829 ) 56,921

(Continued)

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ALTEK CORPORATION

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from disposal of financial assets at fair value through profit or loss Increase in investment accounted for under the equity method Decrease in investment accounted for under the equity method Proceeds from capital reduction of investments accounted for under the equity method Acquisition of property, plant, and equipment Acquisition of Intangible assets Increase in guarantee deposits paid Net cash flows (used in) from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase in short-term borrowings Proceeds from issuance of short-term notes and bills payable Repayment of short-term notes and bills payable Increase in long-term borrowings Repayment of long-term borrowings (Decrease) increase in guarantee deposits received Repayment of principal portion of lease liabilities Acquisition of treasury stocks Cash dividends paid Net cash flows from (used in) financing activities Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

Year ended December 31 Notes 2020 2019 $ - $ 61,580 ( 100,000 ) - - 39,871 - 27,534 6(30) ( 9,200 ) ( 5,768 ) 6(30) ( 8,545 ) ( 3,827 ) ( 3,485 ) ( 2,864 ) ( 121,230 ) 116,526 6(31) 170,000 400,000 6(31) 1,158,741 709,203 6(31) ( 1,090,000 ) ( 480,000 ) 6(31) 250,000 - 6(31) - ( 600,000 ) 6(31) ( 50 ) 50 6(31) ( 7,620 ) ( 5,710 ) 6(17) ( 209,287 ) - 6(19) ( 139,794 ) ( 137,005 ) 131,990 ( 113,462 ) ( 308,069 ) 59,985 6(1) 824,473 764,488 6(1) $ 516,404 $ 824,473

The accompanying notes are an integral part of these parent company only financial statements.

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ALTEK CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

1. HISTORY AND ORGANIZATION

Altek Corporation (the “Company”) was incorporated as a company limited by shares under the provisions of the Company Law of the Republic of China (R.O.C.). The Company are primarily engaged in the development, manufacturing and sale of digital image technology application, and related export and import trade.

The Company was listed in the Taiwan Stock Exchange on December 24, 2002, as approved by the TaiTz (91) Letter No. 024976 of the former Securities and Futures Commission, Ministry of Finance, R.O.C., dated September 27, 2002.

2. THE DATE OF AUTHORISATION FOR ISSUANCE OF THE FINANCIAL STATEMENTS AND

PROCEDURES FOR AUTHORISATION

The parent company only financial statements were authorized for issuance by the Board of Directors on March 25, 2021.

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”) New standards, interpretations and amendments endorsed by the FSC effective from 2020 are as follows:

follows:
New Standards,Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendments to IAS 1 and IAS 8, ‘Disclosure initiative-definition of material’ Amendments to IFRS 3, ‘Definition of a business’ Amendments to IFRS 9, IAS 39 and IFRS7 , ‘Interest rate benchmark Amendment to IFRS 16, ‘Covid-19-related rent concessions’	January 1, 2020 January 1, 2020 January 1, 2020 June 1, 2020 (Note)

Note ： Earlier application from January 1, 2020 is allowed by FSC. The above standards and interpretations have no significant impact to the Company’s financial condition and financial performance based on the Company’s assessment.

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(2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by

the Company

New standards, interpretations and amendments endorsed by the FSC effective from 2021 are as follows:

follows:
	Effective date by
	International Accounting
New Standards, Interpretations and Amendments	Standards Board
Amendments to IFRS 4, ‘Extension of the temporary exemption from	January 1, 2021
applying IFRS 9’
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16, ‘Interest	January 1, 2021
Rate Benchmark Reform— Phase 2’

The above standards and interpretations have no significant impact to the Company financial condition and financial performance based on the Company 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 as endorsed by the FSC are as follows:

endorsed by the FSC are as follows:
New Standards,Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendments to IFRS 3, ‘Reference to the conceptual framework’ Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets between an investor and its associate or joint venture’ IFRS 17, ‘Insurance contracts’ Amendments to IFRS 17, ‘Insurance contracts’ Amendments to IAS 1, ‘Classification of liabilities as current or non-current’ Amendments to IAS 1, ‘Disclosure of accounting policies’ Amendments to IAS 8, ‘Definition of accounting estimates’ Amendments to IAS 16,‘Property, plant and equipment: proceeds before intended use’ Amendments to IAS 37, ‘Onerous contracts—cost of fulfilling a contract’ Annual improvements to IFRS Standards 2018–2020	January 1, 2022 To be determined by International Accounting Standards Board January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2022 January 1, 2022 January 1, 2022

The above standards and interpretations have no significant impact to the Company’s financial condition and financial performance based on the Company’s assessment.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these accompanying parent company only financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

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(1) Compliance statement

The parent company only financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

(2) Basis of preparation

• A. Except for the following items, the parent company only financial statements have been prepared under the historical cost convention:

• (a) Financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.

• (b) Financial assets at fair value through other comprehensive income.

• (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 International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the “IFRSs”) requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the parent company only financial statements are disclosed in Note 5.

(3) Foreign currency translation

Items included in the financial statements of the Company’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The parent company only financial statements are presented in New Taiwan Dollar, which is the Company’s functional and the 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 retranslated 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, nonmonetary assets and liabilities denominated in foreign currencies that are not measured at fair

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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 subsidiaries, associates and joint arrangements that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

  • i. Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;

  • ii. Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and

  • iii. All resulting exchange differences are recognised in other comprehensive income.

• (b) When the foreign operation partially disposed of or sold is an associate or joint arrangement, exchange differences that were recorded in other comprehensive income are proportionately reclassified to profit or loss as part of the gain or loss on sale. In addition, even when the Company retains partial interest in the former foreign associate or joint arrangement after losing significant influence over the former foreign associate, or losing joint control of the former joint arrangement, such transactions should be accounted for as disposal of all interest in these foreign operations.

• (c) When the foreign operation partially disposed of or sold is a subsidiary, cumulative exchange differences that were recorded in other comprehensive income are proportionately transferred to the non-controlling interest in this foreign operation. In addition, even when the Company retains partial interest in the former foreign subsidiary after losing control of the former foreign subsidiary, such transactions should be accounted for as disposal of all interest in the foreign operation.

• (d) Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing exchange rates at the balance sheet date.

(4) Classification of current and non-current items

• A. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:

• (a) Assets arising from operating activities that are expected to be realised, or are intended to be sold or consumed within the normal operating cycle;

• (b) Assets held mainly for trading purposes;

• (c) Assets that are expected to be realised within twelve months from the balance sheet date;

• (d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to settle liabilities more than twelve months after the balance sheet date.

~16~

• B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:

• (a) Liabilities that are expected to be settled within the normal operating cycle;

• (b) Liabilities arising mainly from trading activities;

• (c) Liabilities that are to be settled within twelve months from the balance sheet date;

• (d) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

(5) Cash equivalents

Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits that meet the definition above and are held for the purpose of meeting short-term cash commitments in operations are classified as cash equivalents.

• (6) Financial assets at fair value through profit or loss

• A. Financial assets at fair value through profit or loss are financial assets that are not measured at amortised cost or fair value through other comprehensive income.

• B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognised and derecognised using settlement date accounting.

• C. At initial recognition, the Company measures the financial assets at fair value and recognises the transaction costs in profit or loss. The Company subsequently measures the financial assets at fair value, and recognises the gain or loss in profit or loss.

• D. The Company recognises the dividend income when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Company and the amount of the dividend can be measured reliably.

• (7) Financial assets at fair value through other comprehensive income

• A. Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Company has made an irrevocable election at initial recognition to recognise changes in fair value in other comprehensive income.

• B. On a regular way purchase or sale basis, financial assets at fair value through other comprehensive income are recognised and derecognised using settlement date accounting.

• C. At initial recognition, the Company measures the financial assets at fair value plus transaction costs. The Company subsequently measures the financial assets at fair value:

  • The changes in fair value of equity investments that were recognised in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the derecognition of the investment. Dividends are recognised as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Company and the amount of the dividend can be measured reliably.

~17~

(8) Accounts receivable

• A. Accounts receivable entitle the Company a legal right to receive consideration in exchange for transferred goods or rendered services.

• B. The short-term accounts receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(9) Impairment of financial assets

At each balance sheet date, the Company taking into consideration all reasonable and verifiable information that includes forecasts for accounts receivable that does not contain a significant financing component, the Company recognises the impairment provision for lifetime ECLs.

• (10) Derecognition of financial assets

• The Company derecognises a financial asset when the contractual rights to receive the cash flows from the financial asset expire.

The Company derecognises a financial asset when one of the following conditions is met:

• A. The contractual rights to receive the cash flows from the financial asset expire.

• B. The contractual rights to receive cash flows of the financial asset have been transferred and the Company has transferred substantially all risks and rewards of ownership of the financial asset.

• C. The contractual rights to receive cash flows of the financial asset have been transferred; however, the Company has not retained control of the financial asset.

• －

• (11) Leasing arrangements (lessor) operating leases

Lease income from an operating lease (net of any incentives given to the lessee) is recognised in profit or loss on a straight-line basis over the lease term.

• (12) Inventories

• Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted-average method. The cost of finished goods and work in progress comprises raw materials, direct labour, other direct costs and related production overheads (allocated based on normal operating capacity). It excludes borrowing costs. The item by item approach is used in applying the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and applicable variable selling expenses.

(13) Investments accounted for using equity method / subsidiaries

• A. Subsidiaries are all entities controlled by the Company. The Company controls an entity when the Company is exposed, or has rights, to variable returns from its involvement with the entity and has ability to affect those returns through its power over the entity.

• B. Unrealized profit (loss) occurred from the transactions between the Company and subsidiaries have benn offser. The accounting policies of the subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Company.

• C. The Company’s share of its subsidiaries’ post-acquisition profits or losses is recognized in profit or loss, and its share of post-acquisition movements in other comprehensive income is

~18~

recognized in other comprehensive income. When the Company’s share of losses in a subsidiary equals or exceeds its interest in the subsidiary, the Company continues to recognize its share in the subsidiary’s loss proportionately.

• 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. Pursuant to the “Regulations Governing the Preparation of Financial Reports by Securities Issuers,” profit (loss) of the current period and other comprehensive income in the nonparent company only financial statements shall equal to the amount attributable to owners of the parent in the financial statements prepared with basis for consolidation. Owners’ equity in the nonparent company only financial statements shall equal to equity attributable to owners of the parent in the financial statements prepared with basis for consolidation.

• (14) Property, plant and equipment

• A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalised.

• B. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.

• C. Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.

• D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change. The estimated useful lives of property, plant and equipment are as follows:

are as follows:
Buildings and structures	3 ~	40 years
Machinery and equipment		4 years
Utility equipment	3 ~	6 years
Other equipment	2 ~	11 years

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(15) Leasing arrangements (lessee) － right-of-use assets/ lease liabilities

• A. Leases are recognised as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Company. For short-term leases or leases of low-value assets, lease payments are recognised as an expense on a straight-line basis over the lease term.

• B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate.

• The Company subsequently measures the lease liability at amortised cost using the interest method and recognises interest expense over the lease term. The lease liability is remeasured and the amount of remeasurement is recognised as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.

• C. At the commencement date, the right-of-use asset is stated at cost comprising the following: (a) The amount of the initial measurement of lease liability

• (b) Any initial direct costs incurred by the lessee

The right-of-use asset is measured subsequently using the cost model and is depreciated from the commencement date to the earlier of the end of the asset’s useful life or the end of the lease term. When the lease liability is remeasured, the amount of remeasurement is recognised as an adjustment to the right-of-use asset.

(16) 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 over its estimated useful life of 10 ~ 35 years.

(17) Intangible assets

Computer software are stated at cost and amortised on a straight-line basis over its estimated useful lives of 1 ~ 3 years.

(18) Impairment of non-financial assets

The Company assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the 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.

(19) Borrowings

Borrowings comprise long-term and short-term bank borrowings. Borrowings are recognised initially at fair value, net of transaction costs incurred.

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(20) Notes and accounts payable

• A. Accounts payable are liabilities for purchases of raw materials, goods or services and notes payable are those resulting from operating and non-operating activities.

• B. The Company initially measures notes and accounts payable at fair value and subsequently amortises the interest expense in profit or loss over the period of circulation using the effective interest method.

(21) Provisions

Provisions (warranties) are recognised when the Company has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be reliably estimated. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation on the balance sheet date.

(22) Employee benefits

• A. Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognised as expense in that period when the employees render service.

• B. Pensions

• (a) Defined contribution plans

For defined contribution plans, the contributions are recognised as pension expense when they are due on an accrual basis. Prepaid contributions are recognised as an asset to the extent of a cash refund or a reduction in the future payments.

• (b) Defined benefit plans

• i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Company in current period or prior periods. The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension liability; when there is no deep market in high-quality corporate bonds, the Company uses interest rates of government bonds (at the balance sheet date) instead.

• ii. Remeasurements arising on defined benefit plans are recognised in other comprehensive income in the period in which they arise and are recorded as retained earnings.

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

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• C. Termination benefits

  • Termination benefits are employee benefits provided in exchange for the termination of employment as a result from either the Company’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 Company 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’ remuneration

  • Employees’ compensation and directors’ remuneration are recognised as expense and liability, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates. If employee compensation is paid by shares, the Company calculates the number of shares based on the closing price at the previous day of the board meeting resolution.

• (23) Employee share based payment

• A. For the equity-settled share-based payment arrangements, the employee services received are measured at the fair value of the equity instruments granted at the grant date, and are recognised as compensation cost over the vesting period, with a corresponding adjustment to equity. The fair value of the equity instruments granted shall reflect the impact of market vesting conditions and non-vesting conditions. Compensation cost is subject to adjustment based on the service conditions that are expected to be satisfied and the estimates of the number of equity instruments that are expected to vest under the non-market vesting conditions at each balance sheet date. Ultimately, the amount of compensation cost recognised is based on the number of equity instruments that eventually vest.

• B. Restricted stocks:

  • (a) Restricted stocks issued to employees are measured at the fair value of the equity instruments granted at the grant date, and are recognised as compensation cost over the vesting period.

  • (b) For restricted stocks where those stocks do not restrict distribution of dividends to employees and employees are not required to return the dividends received if they resign during the vesting period, the Company recognises the fair value of the dividends received by the employees who are expected to resign during the vesting period as compensation cost at the date of dividends declared.

  • (c) For restricted stocks where employees have to pay to acquire those stocks, if employees resign during the vesting period, they must return the stocks to the Company and the Company must refund their payments on the stocks, the Company recognises the payments from the employees who are expected to resign during the vesting period as liabilities at the grant date, and recognises the payments from the employees who are expected to be eventually vested

~22~

with the stocks in ’capital surplus – others’.

(24) Income tax

• A. The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or items recognised directly in equity, in which cases the tax is recognised in other comprehensive income or equity.

• B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.

• C. Deferred tax is recognised, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the parent company only balance sheet. However, the deferred tax is not accounted for if it arises from initial recognition of goodwill or of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Company and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.

• D. Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. At each balance sheet date, unrecognised and recognised deferred tax assets are reassessed.

• E. Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. Deferred tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realise the asset and settle the liability simultaneously.

• F. A deferred tax asset shall be recognised for the carryforward of unused tax credits resulting from acquisitions of equipment or technology, research and development expenditures and equity investments to the extent that it is possible that future taxable profit will be available against which the unused tax credits can be utilised.

~23~

(25) Share capital

• A. Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or stock options are shown in equity as a deduction, net of tax, from the proceeds.

• B. Where the Company repurchases the Company’s equity share capital that has been issued, the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the Company’s equity holders. Where such shares are subsequently reissued, the difference between their book value and any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the Company’s equity holders.

(26) 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.

• (27) Revenue recognition

• A. Sales of goods

  • (a) The Company manufactures and sells digital image technology application products. Sales are recognised when control of the products has transferred, being when the products are delivered to the buyer, the buyer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the wholesaler’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the wholesaler, and either the wholesaler has accepted the products in accordance with the sales contract, or the Company has objective evidence that all criteria for acceptance have been satisfied.

  • (b) Revenue from these sales is recognised based on the price specified in the contract, net of the value-added tax, sales return, volume discounts, sales discounts and allowances.

  • (c) The Company’s obligation to provide a repair for faulty products under the standard warranty terms is recognised as a provision.

  • (d) A receivable is recognised when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.

• B. Technical service revenue

The Company provides technical support services. Revenue from providing services is recognised in the accounting period in which the services are rendered. For fixed-price contracts, revenue is recognised based on the actual service provided to the end of the reporting period as a proportion of the total services to be provided. This is determined based on the number of delivered report relative to the total number of committed report.

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1. Critical Accounting Judgements, Estimates and Key Sources of Assumption Uncertainty

The preparation of the parent company only financial statements requires management to make critical judgements in applying the Company’s accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors.

(a) Critical judgements in applying the Company’s accounting policies

• None.

(b) Critical accounting estimates and assumptions

None.

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

Cash on hand revolving funds Checking accounts and demand deposits Time deposits Total	December 31,2020 December 31, 2019 398 $ 419 $ 474,540 110,826 41,466 713,228 516,404 $ 824,473 $

• A. The Company transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.

• B. The Company has no cash and cash equivalents pledged to others.

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

Financial assets at fair value through profit or loss
Items Non-current items: Financial assets mandatorily measured at fair value through profit or loss Unlisted stocks Valuation adjustment Total	December31,2020 10,312 $ 37,917 48,229 $	December31,2019
		10,312 $ 29,844
		40,156 $

• A. Amounts recognised in profit or loss in relation to financial assets at fair value through profit or loss are listed below:

loss are listed below:
Equity instruments	For the year ended December31,2020 8,073 $	For the year ended December31,2019
		16,710 $

• B. The Company has no financial assets at fair value through profit or loss as at December 31, 2020 and 2019 pledged to others.

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

Items		December	31,2020	December	31,2019
Non-current items:
Equity instruments
Unlisted stocks	$		100,000	$	100,000
Valuation adjustment	(		100,000)	(	100,000)
Total	$		-	$	-

• A. The Company has elected to classify equity instruments that are considered to be strategic investments as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $0 as at December 31, 2020 and 2019, respectively.

• B. Amounts recognised in profit or loss and other comprehensive income in relation to the financial assets at fair value through other comprehensive income amounted to $0 and ($60,515) for the years ended December 31, 2020 and 2019, respectively.

• C. The Company has no financial assets at fair value through profit or loss pledged to others as at December 31, 2020 and 2019.

(4) Accounts receivable

December 31, 2020 and 2019. Accounts receivable
	December	31,2020	December	31, 2019
Accounts receivable (including related parties)	$	699,713	$	530,394
Less: Allowance for uncollectible accounts	(	137)	(	292)
	$	699,576	$	530,102

• A. The ageing analysis of accounts receivable and notes receivable that were past due but not impaired is as follows:

is as follows:
Not past due Up to 30 days 31 to 90 days 91 to 180 days 180 to 360 days Over 361 days	683,672 $ 7,891 8,150 - - - 699,713 $ December 31,2020	December 31,2019
		526,832 $ 3,248 - 39 135 140
		530,394 $

The above ageing analysis was based on past due date.

• B. As at December 31, 2020 and 2019, accounts receivable was all from contracts with customers. And as of January 1, 2019, the balance of accounts receivable from contracts with customers amounted to $733,152.

• C. No details of the Company’s accounts receivable were pledged to others as collateral.

• D. As at December 31, 2020 and 2019, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the Company’s accounts receivable was $699,576 and $530,102, respectively.

~26~

E. Information relating to credit risk of accounts receivable is provided in Note 12(2).

(5) Inventories

Inventories
Raw materials Work in progress Finished goods Total Raw materials Work in progress Finished goods Total	Cost 9,780 $ 54,873 14,360 79,013 $ Cost 16,013 $ 33,694 55,212 104,919 $	Allowance for valuation loss 2,883) ($ - 1,098) ( 3,981) ($ December 31, 2020 Allowance for valuation loss 7,381) ($ 534) ( 8,924) ( 16,839) ($ December 31, 2019	Book value
			6,897 $ 54,873 13,262 75,032 $
			Book value
			8,632 $ 33,160 46,288
			88,080 $

The cost of inventories recognised as expense for the period:

The cost of inventories recognised as expense for the period:
For the year ended December 31,2020 Cost of goods sold and others 2,895,892 $ (Reversal of) loss in market value 12,858) ( Total 2,883,034 $	For the year ended December 31, 2019
	3,578,232 $ 4,449
	3,582,681 $

For the year ended December 31, 2020, the Company reversed from a previous inventory write-down and accounted for as reduction of cost of goods sold because inventory that has been appropriated as loss on decline in market value was partially sold.

(6) Investments accounted for using equity method

oss on decline in market value was partially sold. nvestments accounted for using equity method
Altek International Investment Co., Ltd. Altek Japan Corporation Altek International Holding (BVI) Co., Ltd. Altek Investment Corporation (Note)		December 31,2020		December 31,2019
		8,369,784 $ 11,223 906,110 99,921 9,387,038 $		8,473,120 $ 11,428 750,479 - 9,235,027 $

Note: Investment by Altek corporation and established on September 2020.

For information on the Company’s subsidiary, please refer to Note 4(3) in the parent company only financial statements for the year ended December 31, 2020.

~27~

(7) Property, plant and equipment

At January 1 Cost Accumulated depreciation Opening net book amount Additions Reclassifications Depreciation charge Closing net book amount At December 31 Cost Accumulated depreciation			2020

~28~

2019

At January 1 Cost Accumulated depreciation Opening net book amount Additions Reclassifications Depreciation charge Closing net book amount At December 31 Cost Accumulated depreciation

Construction in progress and Buildings and prepayment for Land structures Machinery Test equipment equipment Others Total 468,684 $ 1,165,428 $ 626 $ 56,315 $ 10,077 $ 63,269 $ 1,764,399 $ - 280,220) ( 626) ( 54,891) ( - 57,217) ( 392,954) ( 468,684 $ 885,208 $ - $ 1,424 $ 10,077 $ 6,052 $ 1,371,445 $ 468,684 $ 885,208 $ - $ 1,424 $ 10,077 $ 6,052 $ 1,371,445 $ - 2,535 - 2,586 325 - 5,446 - 9,094 - 983 10,077) ( - - - 39,215) ( - 687) ( - 1,951) ( 41,853) ( 468,684 $ 857,622 $ - $ 4,306 $ 325 $ 4,101 $ 1,335,038 $ 468,684 $ 1,177,057 $ 626 $ 59,884 $ 325 $ 63,269 $ 1,769,845 $ - 319,435) ( 626) ( 55,578) ( - 59,168) ( 434,807) ( 468,684 $ 857,622 $ - $ 4,306 $ 325 $ 4,101 $ 1,335,038 $

A. For the years ended December 31, 2020 and 2019, there was no capitalisation of borrowing interests attributable to the property, plant and equipment.

B. Information about the property, plant and equipment that were pledged to others as collaterals is provided in Note 8.

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－ (8) Leasing arrangements lessee

• A. The Company leases various assets including land and business vehicles. Rental contracts are typically made for periods of 1 to 20 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants, but leased assets may not be used as security for borrowing purposes.

• B. Short-term leases with a lease term of 12 months or less comprise buildings, equipment. Lowvalue assets comprise printers.

• C. The carrying amount of the depreciation charge are as follows:

Land Transportation equipment (Business vehicles) Land Transportation equipment (Business vehicles)	December 31,2020 December 31,2019 91,075 $ 94,206 $ 10,717 4,241 101,792 $ 98,447 $ Carryingamount For the year ended For the year ended December 31, 2020 December 31,2019 3,132 $ 3,132 $ 3,848 1,938 6,980 $ 5,070 $ Depreciation charge	December 31,2019 94,206 $ 4,241 amount
		98,447 $
		3,132 $ 1,938
		5,070 $

• D. For the years ended December 31, 2020 and 2019, the additions to right-of-use assets were $10,325 and $2,191, respectively.

• E. The information on profit and loss accounts relating to lease contracts is as follows:

Items affecting profit or loss Interest expense on lease liabilities Expense on short-term lease contracts Expense on leases of low-value assets	For the year ended December 31,2020 1,139 $ 5,461 137	For the year ended December 31,2019
		1,170 $ 5,559 114

• F. For the years ended December 31, 2020 and 2019, the Company’s total cash outflow for leases were $13,218 and $11,383, respectively.

• G. Extension and termination options

In determining the lease term, the Company takes into consideration all facts and circumstances that create an economic incentive to exercise an extension option. The assessment of lease period is reviewed if a significant event occurs which affects the assessment.

~30~

(9) Investment property

Investment property
At January 1 Cost Accumulated depreciation At January 1 Depreciation charge At December 31 At December 31 Cost Accumulated depreciation At January 1 Cost Accumulated depreciation At January 1 Depreciation charge At December 31 At December 31 Cost Accumulated depreciation	Land Buildings and structures Total 573,532 $ 245,710 $ 819,242 $ - 55,509) ( 55,509) ( 573,532 $ 190,201 $ 763,733 $ 573,532 $ 190,201 $ 763,733 $ - 6,818) ( 6,818) ( 573,532 $ 183,383 $ 756,915 $ 573,532 $ 245,710 $ 819,242 $ - 62,327) ( 62,327) ( 573,532 $ 183,383 $ 756,915 $ 2020 2019
		756,915 $
	Land Buildings and structures Total 573,532 $ 245,710 $ 819,242 $ - 48,691) ( 48,691) ( 573,532 $ 197,019 $ 770,551 $ 573,532 $ 197,019 $ 770,551 $ - 6,818) ( 6,818) ( 573,532 $ 190,201 $ 763,733 $ 573,532 $ 245,710 $ 819,242 $ - 55,509) ( 55,509) ( 573,532 $ 190,201 $ 763,733 $	Total
		763,733 $

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

property are shown below:
Rental income from investment property Direct operating expenses arising from the investment property that generated rental income during the year	For the year ended December 31,2020 27,077 $ 8,243 $	For the year ended December 31,2019
		26,127 $
		8,250 $

~31~

• B. The fair value of the investment property held by the Company as at December 31, 2020 and 2019 all amounted to $870,022, which were valued by independent valuers. Valuations were made using the comparative method and income approach to perform evaluation capitalization.

• C. There was no capitalization of borrowing interests attributable to investment property.

• D. Information about the investment property that was pledged to others as collaterals is provided in Note 8.

(10) Intangible assets

in Note 8. Intangible assets
		2020		2019
At January 1
Cost	$	10,138	$	8,874
Accumulated amortisation	(	8,956)	(	6,931)
	$	1,182	$	1,943
At January 1	$	1,182	$	1,943
Additions		8,823		3,827
Amortisation charge	(	4,387)	(	4,588)
At December 31	$	5,618	$	1,182
At December 31
Cost	$	14,141	$	10,138
Accumulated amortisation	(	8,523)	(	8,956)
	$	5,618	$	1,182
A. Details of amortisation on intangible assets are as follows:
		For the year ended		For the year ended
		December 31,2020		December 31,2019
Operating expense		4,387		4,588

B. The Company has no intangible assets pledged to others.

(11) Short-term borrowings

Short-term borrowings
Type of borrowings Bank borrowings Unsecured borrowings Type of borrowings Bank borrowings Unsecured borrowings	December 31,2020 2,330,000 $ December 31,2019 2,160,000 $	Interest rate range 0.82%~0.94% Interest rate range 0.9% ~1%	Collateral
			None Collateral
			None

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(12) Short-term notes and bills payable

Short-term notes and bills payable
		December31,2020			December	31,2019
Commercial paper payable	$		300,000	$		230,000
Less: Discount on short-term notes
and bills payable	(		202)	(		38)
	$		299,798	$		229,962
Interest rate ranges			0.85%~0.87%			0.997%

- (13) Long term borrowings

Long-term borrowings
Borrowing period	Interest rate
Type of borrowings and repayment term	range	Collateral	December	31,2020
Secured borrowings Borrowing period is
from August 24, 2018 to
May 8, 2021. Revolving		Yes
credit facility.	0.8%~1%	(note)	$	250,000
Less: Current portion ( classified under other liabilities)			(	250,000)
			$	-

December 31, 2019 : None.

During the terms of the unsecured borrowing, in accordance with the unsecured borrowing agreements contracted with bank, the Group is required to maintain the parent company only net value over $8 billion and the debt ratio under 100% based on the annual parent company only financial statements and the semi-annual parent company only financial statements.

Note: Information about collateral for long-term borrowings is provided in Note 8.

(14) Pensions

A. (a) The Company and its domestic subsidiaries have a defined benefit pension plan in accordance with the Labor Standards Act, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Act. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company contributes monthly an amount equal to 2% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee.

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

	December	31,2020	December	31,2019
Present value of defined benefit obligations	($	54,843)	($	52,536)
Fair value of plan assets		44,573		43,470
Net defined benefit liability	($	10,270)	($	9,066)

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

2020

				2020
At January 1 Interest (expense) income Remeasurements: Return on plan assets (excluding amounts included in interest income or expense) Change in financial assumptions Experience adjustments Pension fund contribution Paid pension At December 31 At January 1 Interest (expense) income Remeasurements: Return on plan assets (excluding amounts included in interest income or expense) Change in financial assumptions Experience adjustments Pension fund contribution Paid pension At December 31	Present value of defined benefit obligations			Fair value ofplan assets	Net defined benefit liability
	52,536) ($ 368) ( 52,904) ( - 1,954) ( 713) ( 2,667) ( - 728 54,843) ($		43,470 $ 305 43,775 1,514 - - 1,514 12 728) ( 44,573 $ 2019		9,066) ($ 63) ( 9,129) ( 1,514 1,954) ( 713) ( 1,153) ( 12 - 10,270) ($
		Present value of defined benefit obligations		Fair value ofplan assets		Net defined benefit liability
	49,943) ($ 499) ( 50,442) ( - 1,492) ( 1,436) ( 2,928) ( - 834 52,536) ($		42,370 $ 424 42,794 1,498 - - 1,498 12 834) ( 43,470 $		7,573) ($ 75) ( 7,648) ( 1,498 1,492) ( 1,436) ( 1,430) ( 12 - 9,066) ($

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• (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 and domestic subsidiaries have no right to participate in managing and operating that fund and hence the Company and domestic subsidiaries are unable to disclose the classification of plan assets fair value in accordance with IAS 19 paragraph 142. The composition of fair value of plan assets as of December 31, 2020 and 2019 is given in the Annual Labor Retirement Fund Utilisation Report announced by the government.

• (f) The principal actuarial assumptions used were as follows:

government. The principal actuarial assumptions used were	as follows:
Discount rate Future salary increases	For the year ended December 31, 2020 0.30% 3.00%	For the year ended December 31, 2019
		0.70% 3.00%

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

December 31, 2020 Effect on present value of defined benefit obligations December 31, 2019 Effect on present value of defined benefit obligations	Discount rate	Discount rate	Discount rate	Future salaryincreases	Future salaryincreases	Future salaryincreases
	Increase 0.25%	Decrease 0.25%		Increase 0.25%		Decrease 0.25%
	1,234) ($ 1,248) ($		1,277 $ 1,294 $		1,123 $ 1,150 $	1,093) ($ 1,117) ($

The sensitivity analysis above is based on one assumption which changed while the other conditions remain unchanged. In practice, more than one assumption may change all at once. The method of analysing sensitivity and the method of calculating net pension liability in the balance sheet are the same.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous period.

~35~

• (g) Expected contributions to the defined benefit pension plans of the Company for the year ending December 31, 2021 amount to $12.

• (h) As of December 31, 2020, the weighted average duration of the retirement plan is 9 years. The analysis of timing of the future pension payment was as follows:

Within 1 year	$	9,017
2-5 years		6,389
Over 5 years		16,249
	$	31,655

• B. Effective July 1, 2005, the Company 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 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. The pension costs under defined contribution pension plans of the Company for the years ended December 31, 2020 and 2019, were $13,806 and $12,564, respectively, under the above pension scheme.

(15) Share-based payment

• A. For the years ended December 31, 2020 and 2019, the Company’s share-based payment arrangements were as follows:

arrangements were as follows:
Type of arrangement	Grant date	Quantity granted (shares in thousand)	Contract period	Vesting conditions
Employee stock options " Plan for restricted shares to employees (2015-1) " " Plan for restricted shares to employees (2018-1) " Plan for restricted shares to employees (2019-1) " "	October 28, 2011 March 21, 2012 November 13, 2015 March 18, 2016 May 5, 2016 August 12, 2019 January 20, 2020 August 12, 2019 January 20, 2020 April 24, 2020	3,000 3,000 2,440 1,190 370 630 2,196 820 2,030 86	9.2 years 8.9 years 3 years 3 years 3 years 3 years 3 years 3 years 3 years 3 years	Note 1 Note 1 Note 2, Note 4 Note 2, Note 4 Note 2, Note 4 Note 3, Note 4 Note 3, Note 4 Note 3, Note 4 Note 3, Note 4 Note 3, Note 4

Note 1: 2 years’ service vest 40%, 3 years’ service vest 70%, 4 years’ service vest 100%.

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• Note 2: The restricted shares were issued at no consideration to the Company’s existing employees whose service years have reached 2 years and 3 years and who achieved the performance requirement. The vested ratio is 50% and 50%, respectively. If employees who are entitled to receive restricted stocks do not meet the vesting conditions, the Company will redeem at no consideration and retire those shares.

• Note 3: The restricted shares were issued at no consideration to the Company’s existing employees whose service years have reached 1 year, 2 years and 3 years and who achieved the performance requirement. The vested ratio is 40%, 30% and 30%, respectively. If employees who are entitled to receive restricted stocks do not meet the vesting conditions, the Company will redeem at no consideration and retire those shares.

• Note 4:The stocks and dividends distributed to employees during the vesting period shall be given by the Company at no consideration. Employees are not required to return the stocks and dividends if they resign during the vesting period.

• B. Details of the share-based payment arrangements are as follows:

• (a) For the years ended December 31, 2020 and 2019, the information on the share options and the weighted number of average exercise price of compensation plan employee stock options are as follows:

are as follows:
		For the	year ended		For the	year ended
		December		31,2020	December		31,2019
			Weighted-average			Weighted-average
				exercise price			exercise price
		No. of options	(in NT dollars)(Note)		No. of options	(in NT dollars)(Note)
Options outstanding at
beginning of the period		1,701	$	29.81	1,941	$	30.61
Option expired	(	1,701)		29.81	240) (		29.85
Options outstanding at end
of the period		-		-	1,701		29.81
Options exercisable at end
of the period		-		-	1,701		29.81

Note: The exercise price of stock options was adjusted based on the cash dividends, stock dividends and cash capital reduction per share distributed.

• (b) No stock options were exercised during the years ended December 31, 2020 and 2019.

• (c) The expiry date and exercise price of stock options outstanding at balance sheet date are as follows:

follows:
Issue date approved	Expirydate December 31, 2020 December 31, 2020	December	Exercise price (in NT dollars) (Note) 28.8 $ 28.7 31,2020	December	31,2019
		No. of shares (in thousands) - -		No. of shares (in thousands) 920 781	Exercise price (in NT dollars) (Note)
October 28, 2011 March 21, 2012					29.9 $ 29.7

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• Note: The exercise price of stock options was adjusted based on the cash dividends, stock dividends and cash capital reduction per share distributed.

• (d) The fair value of stock options granted is measured using the Black-Scholes option-pricing model. Relevant information is as follows:

Type of arrangement Grant date Stock price (in NT dollars)	Exercise price (Note) (in NT dollars) Expected price volatility $ 28.8 30.27% 28.7 33.54%	Expected option life Expected dividends	Risk- free interest rate Fair value per unit (in NT dollars)
Employee stock options October 28, 2011 $ 30.65 " March 21, 2012 27.85		5 years 1.4% 4.9 years 1.4%	1.18% 7.42 $ 1.08% 7.35

Note: The exercise price of stock options was adjusted based on the cash dividends, stock dividends and cash capital reduction per share distributed.

• C. Restricted shares to employees:

• (a) The information on restricted shares to employees is as follows (share in thousands):

		For the year ended		For the year ended
		December 31,2020		December 31,2019
Shares ungranted beginning balance		1,350		715
Given at period (Note 1 and Note 2)		4,312		1,450
Shares exercised	(	518)	(	715)
Shares forfeited - retired	(	176)	(	100)
Shares ungranted ending balance		4,968		1,350

  - Note 1 `：` For the restricted stock granted with the compensation cost accounted for using the faire value method, the fair valued on the grant date are calculated based on the closing price on the grant date.

  - Note 2 `：` The fair value of restricetd stocks granted on January 20, 2020, April 24 ,2020 and August 12, 2019 was $22.8 (in NT dollaars), $18.2 (in NT dollars) and $23.4 (in NT dollars), respectively.

• (b) As of December 31, 2020, the Company collected 176 thousand shares of restricted shares because certain employees did not meet the vesting condition, and the change of registration has been completed.

• D. Expenses incurred on share-based payment transactions are shown below:

Equity-settled	For the year ended December 31,2020 41,454 $	For the year ended December 31,2019
		5,074 $

~38~

(16) Provisions

Provisions
At January 1, 2020 Additional provisions Used during the period Reversed during the period At December 31, 2020 Current Non-current	Warranty 68,280 $ 5,393 11) ( 7,311) ( 66,351 $ December 31,2020 December 31,2019 8,164 $ 5,093 $ 58,187 $ 63,187 $
		66,351 $
		December 31,2019 5,093 $
		63,187 $

The Company gives warranties on digital image technology application products sold. Provision for

warranty is estimated based on historical warranty data of digital image technology application products.

(17) Share capital

As of December 31, 2020, the Company’s authorized capital was $5,000,000, consisting of 500,000 thousand shares of ordinary stock, and the paid-in capital was $2,794,973 with a par value of $10 (in NT dollars) per share.

• A. Movements in the number of the Company’s ordinary shares outstanding are as follows (share in thousands):

in thousands):
		2020			2019
At January 1			275,361			274,011
Issuance of employee restricted shares			4,312			1,450
Retired restricted shares to employees that
did not meet the vesting conditions	(		176)	(		100)
Shares repurchased	(		11,000)			-
At December 31			268,497			275,361

B. Treasury shares

• (a) Reason for share reacquisition and the number of the Company’s treasury shares are as follows :

follows :
Name of company holdingthe shares	Reason for reacquisition	Number of shares (share in thousands) 11,000 December	December	31,2020
				Carryingamount
December 31, 2019 : The Company	None. To be reissued to employees			209,287 $

~39~

• (b) Pursuant to the R.O.C. Securities and Exchange Act, the number of shares bought back as treasury share should not exceed 10% of the number of the Company’s issued and outstanding shares and the amount bought back should not exceed the sum of retained earnings, paid-in capital in excess of par value and realised capital surplus.

• (c) Pursuant to the R.O.C. Securities and Exchange Act, treasury shares should not be pledged as collateral and is not entitled to dividends before it is reissued.

• (d) Pursuant to the R.O.C. Securities and Exchange Act, treasury shares should be reissued to the employees within five years from the reacquisition date and shares not reissued within the five-year period are to be retired.

• (18) Capital surplus

Pursuant to the R.O.C. Company Act, capital surplus arising from paid-in capital in excess of par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Act requires that the amount of capital surplus to be capitalised mentioned above should not exceed 10% of the paidin capital each year. Capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient.

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2020
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			2020
At January 1 Changes in ownership interests in subsidiaries Issuance of restricted shares to employees Employee restricted share granted Retirement of employee restricted shares At December 31	Share Employee stock premium options 1,814,532 $ 49,102 $ - - - - 6,941 - - - 1,821,473 $ 49,102 $	Difference between consideration and carrying amount of subsidiaries acquired or disposed 1,534 $ - - - - 1,534 $	Changes in ownership interests in subsidiaries 395,774 $ 2,135 - - - 397,909 $	Proceeds from sales of treasury Restricted shares to shares employees Total 1,455 $ 18,090 $ 2,280,487 $ - - 2,135 - 54,798 54,798 - 6,941) ( - - 2,194) ( 2,194) ( 1,455 $ 63,753 $ 2,335,226 $	Total
					2,335,226 $

~40~

At January 1 Issuance of restricted shares to employees Employee restricted share granted Retirement of employee restricted shares At December 31	Share Employee stock Difference between consideration and carrying amount of subsidiaries acquired or premium options disposed 1,802,659 $ 49,102 $ 1,534 $ - - - 11,873 - - - - - 1,814,532 $ 49,102 $ 1,534 $	Changes in ownership interests in subsidiaries 395,774 $ - - - 395,774 $ 2019	Proceeds from sales of treasury Restricted shares to shares employees Total 1,455 $ 11,873 $ 2,262,397 $ - 19,430 19,430 - 11,873) ( - - 1,340) ( 1,340) ( 1,455 $ 18,090 $ 2,280,487 $

(19) Retained earnings

• A. According to the Company’s Articles of Incorporation, the annual earnings, if any, shall first be used to pay all taxes and offset prior years’ operating losses and then 10% of the remaining amount shall be set aside as legal reserve. Special reserve shall be set aside in accordance with the rules. The remaining amount plus the unappropriated earnings of prior years were distributed in new shares, which were proposed by the Board of Directors and resolved at the shareholders’ meeting.

• All or some of the dividends and bonus could, 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, be distributed in the form of cash and reported at the shareholders’ meeting.

• B. The amount of dividends appropriated is based on the Company’s current year’s net income and prior years’ retained earnings, taking into account the Company’s financial structure and future operating plans. The distribution ratio of cash dividends to stock dividends is based on the Company’s funding status, diluted earnings per share and other factors. According to the dividend policy adopted by the Board of Directors, cash dividends shall account for at least 20% of the total dividends distributed.

• C. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the balance of the reserve exceeds 25% of the Company’s paid-in capital.

• D. (a) In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.

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• (b) The amounts previously set aside by the Company as special reserve on initial application of IFRSs in accordance with Order No. Financial-Supervisory-Securities-Corporate1010012865, dated April 6, 2012, shall be reversed proportionately when the relevant assets are used, disposed of or reclassified subsequently. Such amounts are reversed upon disposal or reclassified if the assets are investment property of land, and reversed over the use period if the assets are investment property other than land.

• E. The appropriation of 2019 and 2018 earnings had been resolved at the stockholders’ meeting on June 12, 2020 and June 13, 2019, respectively. Details are summarized below:

Legal reserve Special reserve Cash dividends	Dividends per share Amount (in NT dollars) 8,316 $ 156,646 139,794 0.5 $ 304,756 $ 2019	Dividends per share Amount (in NT dollars) 13,057 $ 10,099 137,005 0.5 $ 160,161 $ 2018

The appropriation of 2019 and 2018 earnings were the same as that approved by the Board of Directors on March 20, 2020 and March 15, 2019, respectively.

• F. The appropriation of 2020 earnings had been proposed at the Board of Directors on March 25, 2021. Details are summarized below:

2021. Details are summarized below:
Legal reserve Special reserve Cash dividends	2020
	Amount 15,943 $ 59,231 134,249 209,423 $	Dividends per share (in NT dollars)
		0.5 $

Aforementioned distribution of 2020 earnings, except cash dividends were resolved and approved by the Board of Directors on March 25, 2021, others were pending for approval from the shareholders.

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(20) Other equity items

)Other equity items
									2020
								Unrealized
			Foreign currency						losses on					Unearned
				translation					valuation				compensation					Total
At January 1		($		494,335)			($		97,990)			($		23,034)			($	615,359)
Valuation adjustment					-		(		3,030)						-		(	3,030)
Currency translation differences:
-Group		(		56,201)						-					-		(	56,201)
Issuance of restricted shares
to employees					-					-		(		97,918)			(	97,918)
Retirement of restricted shares
to employees					-					-				3,954				3,954
Share-based payment transactions					-					-				70,856				70,856
At December 31		($		550,536)			($		101,020)			($		46,142)			($	697,698)
									2019
							Unrealized
		Foreign currency						losses on					Unearned
				translation				valuation				compensation						Total
At January 1	($			256,833)		($			36,390)		($			1,715)		($		294,938)
Valuation adjustment				-		(			61,600)					-		(		61,600)
Currency translation differences:
-Group	(			237,502)					-					-		(		237,502)
Issuance of restricted shares to
employees				-					-		(			33,930)		(		33,930)
Retirement of restricted shares				-					-					2,340				2,340
to employees
Share-based payment transactions				-					-					10,271				10,271
At December 31	($			494,335)		($			97,990)		($			23,034)		($		615,359)

(21) Operating revenue

Operating revenue
Disaggregation of revenue from contracts with customers For the year ended December31,2020 Revenue from contracts with customers 3,241,557 $	For the year ended December31,2019
	3,967,656 $

The Company derives revenue from the transfer of goods and services over time and at a point in time in the following major geographical regions:

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(22) (23) (24)	Interest income Other income Other gains and losses For the year ended December 31,2020 Asia Revenue from external customer contracts 1,985,262 $ Timing of revenue recognition At a point in time 1,985,262 $ For the year ended December 31, 2019 Asia Revenue from external customer contracts 2,628,250 $ Timing of revenue recognition At a point in time 2,628,250 $ Interest income from bank deposits Interest income from financial assets measured at amortised cost Other interest income Rent income Dividend income Other income - others Net gains on financial assets at fair value through profit or loss Net currency exchange gains Other expenses Total	Europe America Taiwan Total 173,004 $ 878,417 $ 204,874 $ 3,241,557 $ 173,004 $ 878,417 $ 204,874 $ 3,241,557 $ Europe America Taiwan Total 401,020 $ 829,718 $ 108,668 $ 3,967,656 $ 401,020 $ 829,718 $ 108,668 $ 3,967,656 $ For the year ended For the year ended December 31,2020 December 31, 2019 2,738 $ 34,661 $ - 211 40 26 2,778 $ 34,898 $ For the year ended For the year ended December 31,2020 December 31, 2019 22,113 $ 24,623 $ 1,526 763 4,784 6,163 28,423 $ 31,549 $ For the year ended For the year ended December 31,2020 December 31,2019 8,073 16,710 9,118 6,081 5) ( - 17,186 $ 22,791 $	Europe America Taiwan Total 173,004 $ 878,417 $ 204,874 $ 3,241,557 $ 173,004 $ 878,417 $ 204,874 $ 3,241,557 $ Europe America Taiwan Total 401,020 $ 829,718 $ 108,668 $ 3,967,656 $ 401,020 $ 829,718 $ 108,668 $ 3,967,656 $ For the year ended For the year ended December 31,2020 December 31, 2019 2,738 $ 34,661 $ - 211 40 26 2,778 $ 34,898 $ For the year ended For the year ended December 31,2020 December 31, 2019 22,113 $ 24,623 $ 1,526 763 4,784 6,163 28,423 $ 31,549 $ For the year ended For the year ended December 31,2020 December 31,2019 8,073 16,710 9,118 6,081 5) ( - 17,186 $ 22,791 $	Total 3,241,557 $
				3,241,557 $
				Total
				3,967,656 $
				3,967,656 $
			34,661 $ 211 26
			34,898 $
			For the year ended December 31, 2019
			24,623 $ 763 6,163
			31,549 $
			For the year ended December 31,2019
			16,710 6,081 -
			22,791 $

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(25) Finance costs

Finance costs
		For the year ended		For the year ended
	December 31, 2020		December 31, 2019
Interest expense :
Bank loan	$	22,731	$	23,267
Lease liabilities		1,139		1,170
Other		1,095		759
	$	24,965	$	25,196

(26) Expenses by nature

Expenses by nature
Employee benefit expenses Employee benefit expenses Depreciation charges on property, plant and equipment Depreciation charges on right-of-use assets Depreciation charges on investment property Amortisation charges on intangible assets Wages and salaries Labour and health insurance fees Pension costs Other personnel expenses Total	For the year ended December 31,2020 392,756 $ 42,582 6,980 6,818 4,387 For the year ended December 31,2020 350,013 $ 21,025 13,869 7,849 392,756 $	For the year ended December 31,2019
		319,625 $ 41,853 5,070 6,818 4,588 For the year ended December 31, 2019
		279,985 $ 19,440 12,639 7,561
		319,625 $

(27) Employee benefit expenses

A. According to the Articles of Incorporation of the Company, when distributing earnings, the Company shall distribute compensation to the employees and pay remuneration to the directors that account for 10% to 20% and no higher than 2%, respectively, of distributable profit of the current period. If a company has accumulated deficit, earnings should be channeled to cover losses. Employees’ compensation can be distributed in the form of shares or in cash. Employees of subsidiaries that the Company holds more than 50% shareholding are entitled to receive aforementioned stock or cash.

Abovementioned distributable profit of the current period refers to the pre-tax profit before deduction of employees’ compensation and directors’ remuneration. A 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 distributed as employees’ compensation and directors’ remuneration; and in addition thereto a report of such distribution shall be submitted to the shareholders’ meeting.

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• B. For the years ended December 31, 2020 and 2019, employees’ compensation was accrued at $31,624 and $16,220, respectively; directors’ remuneration was accrued at $4,217 and $2,163, respectively. The aforementioned amounts were recognised in salary expenses.

  • Employees’ compensation and directors’ and supervisors’ remuneration for 2019 amounting to $16,220 and $2,163, respectively, as resolved at the meeting of Board of Directors were in agreement with those amounts recognized in the 2019 financial statements.

  • Information about employees’ compensation and directors’ remuneration of the Company as resolved at the meeting of Board of Directors will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

• (28) Income tax

• A. Income tax expense

  • (a) Components of income tax expense:

resolved at the meeting of Board of Directors will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange. ome tax Income tax expense (a) Components of income tax expense:	resolved at the meeting of Board of Directors will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange. ome tax Income tax expense (a) Components of income tax expense:	resolved at the meeting of Board of Directors will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange. ome tax Income tax expense (a) Components of income tax expense:
(b) The income tax charged to other comprehensive income is as follows: Reconciliation between income tax expense and accounting profit: For the year ended For the year ended December 31,2020 December 31,2019 Current tax: Prior year income tax overestimation 381) ($ 5,049) ($ Deferred tax: Origination and reversal of temporary differences 15,010 10,493 Income tax expense 14,629 $ 5,444 $ For the year ended For the year ended December 31, 2020 December 31,2019 Changes in fair value of financial assets at fair value through other comprehensive income 757) ($ 272) ($ Translation differences of foreign operations 14,051) ( 59,375) ( Benefit obligations revaluation 231) ( 286) ( 15,039) ($ 59,933) ($ For the year ended December 31,2020 For the year ended December 31,2019 Tax calculated based on profit before tax and statutory tax rate 34,997 $ 17,950 $ Expenses disallowed by tax regulation 13,161) ( 5,437) ( Prior year income tax overestimation 381) ( 5,049) ( Change in assessment of realisation of deferred tax assets 6,826) ( 2,020) ( Income tax expense 14,629 $ 5,444 $
	34,997 $ 13,161) ( 381) ( 6,826) ( 14,629 $	17,950 $ 5,437) ( 5,049) ( 2,020) ( 5,444 $

• B. Reconciliation between income tax expense and accounting profit:

~46~

• C. Amounts of deferred tax assets or liabilities as a result of temporary differences, tax losses and investment tax credits are as follows:

Deferred tax assets: Temporary differences: Cost of after-sales service and other estimated expenses Currency translation differences Others Tax losses Investment tax credits Subtotal Deferred tax liabilities: Temporary differences: Gain on foreign investment under equity method Pension expense Others Subtotal Total Deferred tax assets: Temporary differences: Cost of after-sales service and other estimated expenses Currency translation differences Investment tax credits Subtotal Deferred tax liabilities: Temporary differences: Gain on foreign investment under equity method Pension expense Others Subtotal Total		January1	Recognised in profit or loss Recognised in other comprehensive income December 31 505) ($ - $ 22,619 $ - 14,051 108,143 - 255 255 401) ( - 2,434 717 - 717 189) ($ 14,306 $ 134,168 $ 19,349) ($ - $ 461,253) ($ 10 231 889) ( 4,518 502 1,654) ( 14,821) ($ 733 $ 463,796) ($ 15,010) ($ 15,039 $ 329,628) ($ 2020 2019	Recognised in profit or loss Recognised in other comprehensive income December 31 505) ($ - $ 22,619 $ - 14,051 108,143 - 255 255 401) ( - 2,434 717 - 717 189) ($ 14,306 $ 134,168 $ 19,349) ($ - $ 461,253) ($ 10 231 889) ( 4,518 502 1,654) ( 14,821) ($ 733 $ 463,796) ($ 15,010) ($ 15,039 $ 329,628) ($ 2020 2019	Recognised in profit or loss Recognised in other comprehensive income December 31 505) ($ - $ 22,619 $ - 14,051 108,143 - 255 255 401) ( - 2,434 717 - 717 189) ($ 14,306 $ 134,168 $ 19,349) ($ - $ 461,253) ($ 10 231 889) ( 4,518 502 1,654) ( 14,821) ($ 733 $ 463,796) ($ 15,010) ($ 15,039 $ 329,628) ($ 2020 2019	Recognised in profit or loss Recognised in other comprehensive income December 31 505) ($ - $ 22,619 $ - 14,051 108,143 - 255 255 401) ( - 2,434 717 - 717 189) ($ 14,306 $ 134,168 $ 19,349) ($ - $ 461,253) ($ 10 231 889) ( 4,518 502 1,654) ( 14,821) ($ 733 $ 463,796) ($ 15,010) ($ 15,039 $ 329,628) ($ 2020 2019
	23,124 $ 94,092 - 2,835 - 120,051 $ 441,904) ($ 1,130) ( 6,674) ( 449,708) ($ 329,657) ($
		January1		Recognised in profit or loss		Recognised in other comprehensive income December 31 - $ 23,124 $ 59,375 94,092 - 2,835 59,375 $ 120,051 $ - $ 441,904) ($ 286 1,130) ( 272 6,674) ( 558 $ 449,708) ($ 59,933 $ 329,657) ($
	33,131 $ 34,717 - 67,848 $ 444,069) ($ 1,429) ( 1,447) ( 446,945) ($ 379,097) ($		10,007) ($ - 2,835 7,172) ($ 2,165 $ 13 5,499) ( 3,321) ($ 10,493) ($

~47~

• D. Details of the amount the Company is entitled as investment tax credit and unrecognised deferred tax assets are as follows:

tax assets are as follows:
			December 31,2020
			Unrecognised
Qualifying items	Unused tax credits		deferred tax assets	Expiry year
Research and development	$	7,168	6,451 $	2021
			December 31,2019
			Unrecognised
Qualifying items	Unused tax credits		deferred tax assets	Expiry year
Research and development	$	6,418	6,418 $	2020

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

December 31, 2020 Amount filed/ Unrecognised Year incurred assessed Unused amount deferred tax assets Expiry year 2018 $ 17,466 $ 12,168 $ - 2028 December 31, 2019 Amount filed/ Unrecognised Year incurred assessed Unused amount deferred tax assets Expiry year 2018 $ 18,382 $ 14,173 $ - 2028

• F. The amounts of deductible temporary difference that are not recognised as deferred tax assets are as follows: None.

• G. The Company’s income tax returns through 2018 have been assessed and approved by the Tax Authority.

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(29) Earnings per share

Earnings per share
Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares Restricted shares to employees Employees’ bonus Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares Restricted shares to employees Employees’ bonus Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares	Amount after tax 160,357 $ 160,357 $ 160,357 $ For For	Weighted average number of ordinary shares outstanding Earnings per share (share in thousands) (in NT dollars) 265,758 0.60 $ 3,458 1,156 270,372 0.59 $ theyear ended December 31,2020 theyear ended December 31,2019
	Amount after tax 84,308 $ 84,308 $ 84,308 $	Weighted average number of ordinary shares outstanding (share in thousands) 273,838 170 894 274,902	Earnings per share (in NT dollars)
			0.31 $
			0.31 $

~49~

(30) Supplemental cash flow information

Investing activities with partial cash payments

Supplemental cash flow information Investing activities with partial cash payments	Supplemental cash flow information Investing activities with partial cash payments	Supplemental cash flow information Investing activities with partial cash payments	Supplemental cash flow information Investing activities with partial cash payments	Supplemental cash flow information Investing activities with partial cash payments	Supplemental cash flow information Investing activities with partial cash payments	Supplemental cash flow information Investing activities with partial cash payments	Supplemental cash flow information Investing activities with partial cash payments	Supplemental cash flow information Investing activities with partial cash payments	Supplemental cash flow information Investing activities with partial cash payments	Supplemental cash flow information Investing activities with partial cash payments	Supplemental cash flow information Investing activities with partial cash payments	Supplemental cash flow information Investing activities with partial cash payments	Supplemental cash flow information Investing activities with partial cash payments
Changes in liabilities from financing activities For the year ended For the year ended December 31,2020 December 31,2019 Acquisitions of property, plant, and equipment 12,747 $ 5,446 $ Add: Property and equipment and construction billings payable at beginning of year 656 978 Less: Property and equipment and construction billings payable at end of year 4,203) ( 656) ( Cash paid 9,200 $ 5,768 $ For the year ended For the year ended December31,2020 December31,2019 Acquisitions of intangible assets 8,823 $ 3,827 $ Less: Payables at end of year 278) ( - Cash paid 8,545 $ 3,827 $ Short-term borrowings Short-term notes and billspayable Long-term borrowings (Note) Guarantee deposits received Lease liabilities Total January 1, 2020 2,160,000 $ 229,962 $ - $ 6,486 $ 98,977 $ 2,495,425 $ Changes in cash flow from financing activities 170,000 68,741 250,000 50) ( 7,620) ( 481,071 Changes in other non-cash items - 1,095 - - 11,464 12,559 December 31, 2020 2,330,000 $ 299,798 $ 250,000 $ 6,436 $ 102,821 $ 2,989,055 $ Short-term borrowings Short-term notes and billspayable Long-term borrowings Guarantee deposits received Lease liabilities Total January 1, 2019 1,760,000 $ - $ 600,000 $ 6,436 $ 101,406 $ 2,467,842 $ Changes in cash flow from financing activities 400,000 229,203 600,000) ( 50 5,710) ( 23,543 Changes in other non-cash items - 759 - - 3,281 4,040 December 31, 2019 2,160,000 $ 229,962 $ - $ 6,486 $ 98,977 $ 2,495,425 $
										$
					$					$
							Long-term borrowings (Note)				Lease liabilities
January 1, 2020 Changes in cash flow from financing activities Changes in other non-cash items December 31, 2020 January 1, 2019 Changes in cash flow from financing activities Changes in other non-cash items December 31, 2019		Short-term borrowings
		2,160,000 $ 170,000 - 2,330,000 $ Short-term borrowings		229,962 $ 68,741 1,095 299,798 $ Short-term notes and billspayable			- $ 250,000 - 250,000 $ Long-term borrowings	6,486 $ 50) ( - 6,436 $ Guarantee deposits received			98,977 $ 7,620) ( 11,464 102,821 $ Lease liabilities		2,495,425 $ 481,071 12,559 2,989,055 $ Total
		1,760,000 $ 400,000 - 2,160,000 $		- $ 229,203 759 229,962 $		600,000 $ 600,000) ( - - $			6,436 $ 50 - 6,486 $		101,406 $ 5,710) ( 3,281 98,977 $		2,467,842 $ 23,543 4,040 2,495,425 $

(31) Changes in liabilities from financing activities

Note: The loan will be due within 1 year, thus, it is classified under other current liabilities.

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7. RELATED PARTY TRANSACTIONS

(1) Names of related parties and relationship:

Names of related parties

Altek International Investment Co., Ltd (AII) Altek International Trading Co., Ltd (AIT) Altek Biotechnology Holding (Cayman) Co., Ltd. Taiwan Branch (ABH-TW) Altek Semiconductor Corporation (SEMI) Altek Biotechnology Corporation (BIO) Altek Investment Corporation (AIC)

Relationship with the Company

The subsidiary included in The Group's Consolidated Financial Statement (Note)

Note: For information on the Company’s subsidiary, please refer to Note 4(3) in the parent company only financial statements for the year ended December 31, 2020.

(2) Significant transactions and balances with related parties:

A. Operating revenue:

perating revenue:
Sales of Goods: BIO SEMI Subtotal Sales of services: BIO SEMI Subtotal Total		Year ended December 31, 2020			Year ended December 31, 2019
		$	681 14,025 14,706 46,939 42,376 89,315 104,021		$	9 118 127 41,936 27,201 69,137 69,264
		$			$
		$			$

Goods are sold based on the prices lists in force and terms that would be available to third parties, and the general collection term was 45~90 days after monthly billings.

B. Purchases:

urchases:
Purchases of Goods: AIT AII Other Total	Year ended December 31, 2020		Year ended December 31, 2019
	2,657,515 $ - 2,739 2,660,254 $		1,820,440 $ 1,558,856 1,123 3,380,419 $

Goods are purchased on normal commercial terms and conditions, and the payment terms above was 60~120 days after monthly billings.

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C. Rent income:

Rent income:
Service fees: Receivables from related parties: Payables to related parties: SEMI BIO ABH-TW AIC Total SEMI BIO Total Accounts receivable: SEMI BIO Total SEMI BIO Other Total Other receivables: Accounts payable: AII AIT Other Total AII AIT BIO Other Total Other payablest:	Year ended December 31, 2020 7,344 $ 5,192 540 12 13,088 $ Year ended December 31, 2020		Year ended December 31, 2019
			7,344 $ 5,192 540 - 13,076 $ Year ended December 31, 2019
	1,663 $ 6,359 8,022 $ December 31,2020 13,136 $ 541 13,677 35,438 $ 26,103 275 61,816 December 31,2020 - $ 895,635 11 895,646 - $ 3,782 4,401 648 8,831 $		3,997 $ 905 4,902 $ December 31,2019 5 $ - 5 18,346 $ 14,997 521 33,864 December 31,2019 617,867 $ 610,159 4 1,228,030 5,457 $ 1,985 326 259 8,027 $

D. Service fees:

• E. Receivables from related parties:

• F. Payables to related parties:

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(3) Key management compensation

Salaries and other short-term employee benefits Post-employment benefits Share-based payments Total	For the year ended For the year ended December 31,2020 December 31,2019 32,104 $ 32,043 $ 908 783 15,619 3,019 48,631 $ 35,845 $

8. PLEDGED ASSETS

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

			Book	value
Pledged asset	Purpose	December	31, 2020	December	31, 2019
Land, buildings and structures	Long-term borrowings	$	734,116	$	745,589
Investment property	Long-term borrowings		756,915		763,733
		$	1,491,031	$	1,509,322

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT

COMMITMENTS

None.

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT SUBSEQUENT EVENT

None.

12. OTHERS

(1) Capital management

The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends, return capital or issue new shares to achieve the optimal capital structure.

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(2) Financial instruments

A. Financial instruments by category

ancial instruments Financial instruments by category
Financial assets Financial assets measured at fair value through profit or loss Financial assets at fair value through other comprehensive income Financial assets at amortised cost Cash and cash equivalents Accounts receivable (including related parties) Other accounts receivable (including related parties) Guarantee deposit paid Financial liabilities Financial liabilities at amortised cost Short-term borrowings Short-term notes and bills payable Accounts payable (including related parties) Other accounts payable (including related parties) Long-term borrowings (including current portion) Guarantee deposits received Lease liabilities	December31,2020 48,229 $ - $ 516,404 $ 699,576 63,609 32,429 1,312,018 $ 2,330,000 $ 299,798 927,505 193,671 250,000 6,436 4,007,410 $ 102,821 $	December31,2019
		40,156 $
		- $
		824,473 $ 530,102 34,897 28,944
		1,418,416 $
		2,160,000 $ 229,962 1,258,514 171,435 - 6,486
		3,826,397 $
		98,977 $

B. Financial risk management policies

• (a) The Company’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. To minimize any adverse effects on the financial performance of the Company, derivative financial instruments, such as foreign exchange forward contracts and foreign currency option contracts are used to hedge certain exchange rate risk, and interest rate swaps are used to fix variable future cash flows. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments.

• (b) Risk management is carried out by a central treasury department (Company treasury) under policies approved by the Board of Directors. Company treasury identifies, evaluates and hedges financial risks in close co-operation with the Company’s operating units. The Board provides written principles for overall risk management, as well as written policies covering specific areas and matters, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

• C. Significant financial risks and degrees of financial risks

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(a) Market risk

Foreign exchange risk

• i. The Company operates internationally and is exposed to exchange rate risk arising from the transactions of the Company and its subsidiaries used in various functional currency, primarily with respect to the USD and RMB. Exchange rate risk arises from future commercial transactions and recognised assets and liabilities.

• ii. Management has set up a policy to require company to manage their foreign exchange risk against their functional currency. The companies are required to hedge their entire foreign exchange risk exposure with the Company treasury. Exchange rate risk is measured through a forecast of highly probable USD and RMB expenditures. Forward foreign exchange contracts are adopted to minimize the volatility of the exchange rate affecting cost of forecast inventory purchases.

• iii. The Company has certain investments in foreign operations, whose net assets are exposed to foreign currency translation risk. Currency exposure arising from the net assets of the Company’s foreign operations is managed primarily through borrowings denominated in the relevant foreign currencies.

• iv. The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

December 31, 2020

(Foreign currency: functional currency) Financial assets Monetary items USD:NTD USD:RMB Non-monetary items USD:NTD Financial liabilities Monetary items USD:NTD USD:RMB	Foreign Currency Amount (In thousands) 37,759 USD 9,659 USD 325,699 USD 30,075 USD 1,336 USD	Exchange Book Value Rate (NTD) 28.480 1,075,376 $ 4.3648 42,160 28.480 9,275,894 $ 28.480 856,536 $ 4.3648 5,831	SensitivityAnalysis	SensitivityAnalysis
			Effect on Extent of Profit or Variation (Loss) 1% 10,754 $ 1% 422 1% - $ 1% 8,565) ($ 1% 58) (	Effect on Other Comprehensive Income(Loss)
				- $ - 92,759 $ - $ -

~55~

December 31, 2019

(Foreign currency: functional currency) Financial assets Monetary items USD:NTD USD:RMB Non-monetary items USD:NTD Financial liabilities Monetary items USD:NTD USD:RMB	Foreign Currency Amount Exchange (In thousands) Rate 42,758 USD 29.980 9,611 USD 4.2975 307,659 USD 29.980 40,777 USD 29.980 9,623 USD 4.2975	Effect on Effect on Other Book Value Extent of Profit or Comprehensive (NTD) Variation (Loss) Income(Loss) 1,281,885 $ 1% 12,819 $ - $ 41,303 1% 413 - 9,223,599 $ 1% - $ 92,236 $ 1,222,494 $ 1% 12,225) ($ - $ 41,355 1% 414) ( - SensitivityAnalysis

• v. Total exchange gain including realized and unrealized arising from significant foreign exchange variation on the monetary items held by the Company for the years ended December 31, 2020 and 2019 amounted to $9,118 and $6,081, respectively.

Price risk

• i. The Company’s equity securities, which are exposed to price risk, are the held financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income.

• ii. The Company’s investments in equity securities comprise shares issued by the domestic companies. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased/decreased by 10% with all other variables held constant, post-tax profit for the years ended December 31, 2020 and 2019 would have increased/decreased by $4,823 and $4,016, respectively, as a result of gains/losses on equity securities classified as at fair value through profit or loss. Other components of equity would have increased/decreased by $0 and $0, respectively, as a result of other comprehensive income classified as equity investment at fair value through other comprehensive income.

Cash flow and fair value interest rate risk

Interest risk arises from the changes of market interest rate causing fluctuation in financial instruments’ fair value or cash received and paid in the future.

The Company raised short-term and long-term borrowings at fixed rates during the years ended December 31, 2020 and 2019, and thus had no significant cash flow interest rate risk.

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(b) Credit risk

• i. Credit risk refers to the risk of financial loss to the Company arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the accounts receivable based on the agreed terms.

• ii. The Company manages their credit risk taking into consideration the entire company’s concern. According to the Company’s credit policy, each local entity in the Company is responsible for managing and analysing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board of Directors. The utilisation of credit limits is regularly monitored.

• iii. The Company measured internal operating procedures, past experience of trading customers, and actual transaction status. If the contract payments were past due over 90 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition. If the contract payments were past due over 360 days based on the term, the default has occurred.

• iv. The following indicators are used to determine whether the credit impairment of debt instruments has occurred:

• (i) It becomes probable that the issuer will enter bankruptcy or other financial reorganization due to their financial difficulties;

• (ii) The disappearance of an active market for that financial asset because of financial difficulties;

• (iii) Default or delinquency in interest or principal repayments;

• (iv) Adverse changes in national or regional economic conditions that are expected to cause a default.

• v. The Company classifies customers’ accounts receivable in accordance with customer types. The Company applies the simplified approach using loss provision matrix to estimate expected credit loss under the provision matrix basis.

• vi. The Company wrote-off the financial assets, which cannot be reasonably expected to be recovered, after initiating recourse procedures. However, the Company will continue executing the recourse procedures to secure their rights.

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• vii. The Company used the forecastability to adjust historical and timely information to access the default possibility of accounts receivable (included related parties). As of December 31, 2020 and 2019, respectively, the provision matrix is as follows:

Up to 90 days past due December 31,2020 Expected loss rate 0.02% Total book value 699,713 $ Loss allowance 137 $ Up to 90 days past due December 31,2019 Expected loss rate 0.02% Total book value 530,080 $ Loss allowance 106 $	91~180 days past due	181 to 360 days past due	Up to 361 days Total 100% - $ 699,713 $ - $ 137 $ Upto 361 days Total
	15% - $ - $ 91~180 days past due	30% - $ - $ 181 to 360 days past due
	15% 39 $ 6 $	30% 135 $ 40 $	100% 140 $ 530,394 $ 140 $ 292 $

• viii. Movements in relation to the gcompany applying the simplified approach to provide loss allowance for accounts receivable (included related parties) are as follows:

At January 1 Reversal of impairment loss Write-offs At December 31	2020 2019 292 $ 6,215 $ 155) ( 5,091) ( - 832) ( 137 $ 292 $

(c) Liquidity risk

• i. Cash flow forecasting is performed in the operating entities of the Company and aggregated by Company treasury. Company treasury monitors rolling forecasts of the Company’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities. Such forecasting takes into consideration the Company’s debt financing plans, and compliance with internal balance sheet ratio targets.

• ii. Surplus cash held by the operating entities over and above the balance required for working capital management are transferred to the Company treasury. Company treasury invests surplus cash in interest bearing current accounts, time deposits and marketable securities, choosing instruments with appropriate maturities or sufficient liquidity to provide sufficient head-room as determined by the above-mentioned forecasts.

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iii.The Company has following undrawn borrowing facilities:

	0		December31,2020		December31,2019
Fixed rate:
Expiring within one year		$	1,714,000	$	1,854,500
Expiring beyond one year			950,000		1,200,000
		$	2,664,000	$	3,054,500

0 December31,2020 December31,2019 Fixed rate: Expiring within one year 1,714,000 $ 1,854,500 $ Expiring beyond one year 950,000 1,200,000 2,664,000 $ 3,054,500 $	0 December31,2020 December31,2019 Fixed rate: Expiring within one year 1,714,000 $ 1,854,500 $ Expiring beyond one year 950,000 1,200,000 2,664,000 $ 3,054,500 $	0 December31,2020 December31,2019 Fixed rate: Expiring within one year 1,714,000 $ 1,854,500 $ Expiring beyond one year 950,000 1,200,000 2,664,000 $ 3,054,500 $	0 December31,2020 December31,2019 Fixed rate: Expiring within one year 1,714,000 $ 1,854,500 $ Expiring beyond one year 950,000 1,200,000 2,664,000 $ 3,054,500 $	0 December31,2020 December31,2019 Fixed rate: Expiring within one year 1,714,000 $ 1,854,500 $ Expiring beyond one year 950,000 1,200,000 2,664,000 $ 3,054,500 $
iv.The table below analyses the Company’s non-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. The			amounts disclosed in
the table are the contractual undiscounted cash	flows.
December 31, 2020		Less than 1year		Over 1 year
Non-derivative financial liabilities:
Short-term borrowings	$	2,330,000	$	-
Short-term notes and bills payable		299,798		-
Accounts payable (including related parties)		927,505		-
Other payables (including related parties)		193,671		-
Lease liabilities		8,753		111,661
Long-term borrowings (including current portion)		250,000		-
Guarantee deposits received		-		6,436
December 31, 2019		Less than 1year		Over 1 year
Non-derivative financial liabilities:
Short-term borrowings	$	2,160,000	$	-
Short-term notes and bills payable		229,962		-
Accounts payable (including related parties)		1,258,514		-
Other payables (including related parties)		171,435		-
Lease liabilities		6,473		111,236
Guarantee deposits received		-		6,486

(3) Fair value estimation

• A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:

• Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis.

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

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• Level 3: Unobservable inputs for the asset or liability. The fair value of the Company’s investment in equity investment without active market and investment property are included in Level 3.

• B. Fair value information of investment property at cost is provided in Note 6(9).

• C. Financial instruments was not measured at fair value, including the carrying amounts of cash and cash equivalents, accounts receivable (included related parties), other receivables (included related parties), deposits paid, long-term borrowings, short-term borrowings, short-term bills payable, accounts payable (included related parties), other payables (included related parties), deposits received and lease liabilities are approximate to their fair values.

• D. 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 are as follows: (a) The related information of nature of the assets is as follows:

December 31, 2020 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Unlisted stocks Financial assets at fair value through other comprehensive income Unlisted stocks December 31, 2019 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Unlisted stocks Financial assets at fair value through other comprehensive income Unlisted stocks	Level 1 - $ - - $ Level 1 - $ - - $	Level 2 - $ - - $ Level 2 - $ - - $	Level 3 48,229 $ - 48,229 $ Level 3 40,156 $ - 40,156 $	Total
				48,229 $ -
				48,229 $
				Total
				40,156 $ -
				40,156 $

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• (b) The methods and assumptions the Company used to measure fair value are as follows:

  • i. Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques. 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 parent company only balance sheet date.

• ii. The output of valuation model is an estimated value and the valuation technique may not be able to capture all relevant factors of the Company’s financial and non-financial instruments. Therefore, the estimated value derived using valuation model is adjusted accordingly with additional inputs.

• E. For the years ended December 31, 2020 and 2019, 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, 2020 and 2019:

		2020		2019
At January 1	$	40,156	$	23,683
Gains recognised in profit or loss		8,073		16,710
Sold in the period		-	(	237)
At December 31	$	48,229	$	40,156

• G. For the years ended December 31, 2020 and 2019, there was no transfer of Level 3.

• H. Accounting Department 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.

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• I. The following is the qualitative information of significant unobservable inputs and sensitivity analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair value measurement:

value measurement:
Fair value at December 31, 2020 Financial assets at fair value through profit or loss Unlisted shares 48,229 $ Fair value at December 31, 2019 Financial assets at fair value through profit or loss Unlisted shares 40,156 $	Valuation technique	Significant unobservable input Relationship of inputs to fair value Price to earnings ratio multiple, price to book ratio multiple,discount for lack of marketability, control premium The higher the multiple and control premium, the higher the fair value Significant unobservable input Relationship of inputs to fair value Price to earnings ratio multiple, price to book ratio multiple,discount for lack of marketability, control premium The higher the multiple and control premium, the higher the fair value
	Market comparable companies Valuation technique
	Market comparable companies

13. SUPPLEMENTARY DISCLOSURES

(1) Significant transactions information

• A. Loans to others: Please refer to table 1.

• B. Provision of endorsements and guarantees to others: None.

• C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 2.

• D. Acquisition or sale of the same security with the accumulated cost exceeding NT$300 million or 20% of the Company’s paid-in capital: None.

~62~

• 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 paidin capital or more: Please refer to table 3.

• H. Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more: Please refer to table 4.

• I. Trading in derivative financial instruments undertaken during the reporting periods: None.

• J. Significant inter-company transactions during the reporting periods: Please refer to table 5.

(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China): Please refer to table 6.

(3) Information on investments in Mainland China

• A. The related information of investments in Mainland China: Please refer to table 7.

• B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area:

For the significant purchases, sales, accounts payable and accounts receivable transactions between the Company and the investee companies in Mainland China through its subsidiaries, please refer to table 3 ~ table 5.

(4) Major shareholders information

Please refer to table 8.

14. SEGMENT INFORMATION

Not applicable.

~63~

Altek Corporation Loans to other For the year ended December 31, 2020

Table 1

Expressed in thousands of NTD (Except as otherwise indicated)

No.	Creditor	Borrower	General ledger account	Is a related party	Maximum outstanding balance during the year December 31, 2020	Balance at December 31, 2020	Actual amount drawn down	Interest rate	Nature of loan	Amount of transactions with the borrower	Reason term financing	Allowance for doubtful accounts	Collateral	Collateral	Limit on loans granted to a single party （Note)	Ceiling on total loans granted (Note)
													Item	Value
1	Altek Semiconductor (Cayman) Co., Ltd.	Altek Semiconductor Corporation	Other receivables- related party	Yes	105,875 $	- $	- $	0%	Reason for short-term financing	- $	Operational need	- $		- $	1,089,001 $	1,089,001 $

Note 1: The ”Procrdure for Provision of Loans” policy for loans granted by Altek Semiconductor (Cayman) Co.,Ltd. is as follows: the ceiling on total loans is 100% of the net assets value of lender. For the short-term financing, the ceiling on loans is 40% of the net assets value of lender. Note 2: If the amount of NTD in this Note relates to foreign currencies, it is converted to NTD at the exchange rate at the end of the financial reporting period.

Table 1

Altek Corporation

Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures)

December 31, 2020

			December 31, 2020
Table 2 Securitiesheld by	Marketable securities	Relationship with the securitiesissuer	General ledgeraccount		As of December31,2020 Expressed in thousands of NTD (Except as otherwise indicated)
				Numberofshares	Bookvalue	Ownership (%)	Fairvalue
Altek Corporation " Altek (Kunshan) Co., Ltd. "	Gianta Co., Ltd. - Common stock Hua-chuang Automobile Information Technical Center Co., Ltd. - Common stock Guangdong Kingding Optical Technology Co., Ltd. CPEC Huachuang Private Equity (Kunshan) Enterprise (Limited Partnership)	Director None None None	Financial assets at fair value through profit or loss - non-current Financial assets measured at fair value through other comprehensive income - non-current " "	762,876 2 1,200,000 N/A	48,229 $ - 3,666 39,464	14.55% 0.00% 6.45% (Note)	48,229 $ - 3,666 39,464

Note : 1% of CPEC Huachuang Private Equity (Kunshan) Enterprise (Limited Partnership)’s capital contribution.

Table 2

Altek Corporation

Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paid-in capital or more

For the year ended December 31, 2020

Table 3 Purchaser/seller	Counterparty	Relationship with the counterparty		Transaction	Transaction		Differences in transaction terms compared to third party transactions	Differences in transaction terms compared to third party transactions	Notes/accounts receivable(payable) Expressed in thousands of NTD (Except as otherwise indicated)	Notes/accounts receivable(payable) Expressed in thousands of NTD (Except as otherwise indicated)
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable(payable)
Altek Corporation Altek International Trading Co., Ltd. Altek Biotechnology Corporation Altek Biotechnology Holding (Cayman) Co., Ltd. Taiwan Branch Altek (Kunshan) Co., Ltd.	Altek International Trading Co., Ltd. Altek (Kunshan) Co., Ltd. Altek International Trading Co., Ltd. " "	The same ultimate parent company " " " "	Purchases Purchases Purchases Purchases Purchases	2,657,515 $ 4,509,644 1,277,385 283,334 195,172	93% 100% 100% 100% 5%	Net 120 days Net 75 days " " "	Approximately the same price with third parties " " " "	Note " " " "	895,635) ($ 1,195,251) ( 392,271) ( 146,342) ( -	97% 99% 99% 100% 0%

Note: The payment term with third parties was net 60~120 days.

Table 3

Altek Corporation

Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more

December 31, 2020

Table 4 Creditor	Counterparty	Relationship with the counterparty	Balance as at December31,2020	Turnover rate	Overdue receivables	Overdue receivables	Amount collected subsequent to the balance sheet date Allowance for doubtful accounts Expressed in thousands of NTD (Except as otherwise indicated)	Amount collected subsequent to the balance sheet date Allowance for doubtful accounts Expressed in thousands of NTD (Except as otherwise indicated)
					Amount	Action taken
Altek International Trading Co., Ltd. " " Altek (Kunshan) Co., Ltd.	Altek Corporation Altek Biotechnology Corporation Altek Biotechnology Holding (Cayman) Co., Ltd. Taiwan Branch Altek International Trading Co., Ltd.	The same ultimate parent company " " "	895,635 $ 392,271 146,342 1,195,251	4.03 4.30 5.64 4.90	- $ - - -	N/A N/A N/A N/A	817,425 $ 382,354 127,036 1,111,498	- $ - -

Table 4

Altek Corporation

Significant inter-company transactions during the reporting periods

For the year ended December 31, 2020

Table 5

Expressed in thousands of NTD

(Except as otherwise indicated)

Companyname	Counterparty	Relationship (Note1)			Transaction
			General ledgeraccount	Amount	Transactionterms	Percentage of consolidated total operating revenues ortotalassets (Note2)
Altek Corporation " Altek International Trading Co., Ltd. " Altek Semiconductor Corporation " " " " Altek Biotechnology Corporation " Altek Biotechnology Holding (Cayman) Co., Ltd. Taiwan Branch " Altek (Kunshan) Co., Ltd. Altek Trading (Shanghai) Limited	Altek International Trading Co., Ltd. " Altek (Kunshan) Co., Ltd. " Altek International Trading Co., Ltd. " " Altek Corporation " Altek International Trading Co., Ltd. " " " " Altek (Kunshan) Co., Ltd.	(1) (1) (3) (3) (3) (3) (3) (3) (3) (3) (3) (3) (3) (3) (3)	Purchases Accounts payable Purchases Accounts payable Sales Purchases Accounts payable Purchases Accounts payable Purchases Accounts payable Purchases Accounts payable Purchases Purchases	2,657,515 $ 895,635 4,509,644 1,195,251 12,614 17,801 19,301 14,025 13,136 1,277,385 392,271 283,334 146,342 195,172 20,171	Net 120 days " Net 75 days " " Net 120 days " Net 75 days " " " " " " "	44% 6% 74% 8% 0% 0% 0% 0% 0% 21% 3% 5% 1% 3% 0%

Note 1: Relationship between transaction and counterparty is classified into the following categories:

(1) Parent company to subsidiary.

(2) Subsidiary to parent company.

(3) Subsidiary to subsidiary.

Note 2: Regarding percentage of transaction amount to consolidated total operating revenues or total assets, it is computed based on period-end balance of transaction to consolidated total assets for balance sheet accounts and based on accumulated transaction amount for the period to consolidated total operating revenues for income statement accounts.

Note 3: The Company may decide to disclose or not to disclose transaction details in this table based on the Materiality Principle.

Table 5

Altek Corporation

Information on investees

Table 6

Expressed in thousands of NTD

(Except as otherwise indicated)

For the year ended December 31, 2020

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at December 31,2020	Shares held as at December 31,2020	Shares held as at December 31,2020	Net profit (loss) of the investee for the year ended December 31,2020	Investment income(loss) recognised by the Company for the year ended December 31,2020	Footnote
				Balance as at December 31, 2020	Balance as at December 31, 2019	Number of shares	Ownership (%)	Book value
Altek Corporation " " " Altek International Investment Co., Ltd. " " Altek International Holding (BVI) Co, Ltd. Altek Semiconductor (Cayman) Co., Ltd. Altek Biotechnology Holding (Cayman) Co., Ltd.	Altek International Investment Co., Ltd. Altek Japan Corporation Altek International Holding (BVI) Co, Ltd. Altek Investment Corporation Altek Lab Inc. Altek Semiconductor (Cayman) Co., Ltd. Altek International Trading Co,. Ltd. Altek Biotechnology Holding (Cayman) Co. ,Ltd. Altek Semiconductor Corporation Altek Biotechnology Corporation	British Virgin Islands Japan British Virgin Islands Republic of China U.S.A. Cayman Islands Republic of Seychelles Cayman Islands Republic of China Republic of China	Investment Sale of optical optical instruments Investment Investment Design service Investment Intercompany transactions Trading between Corporation Research design and sales of ASIC Research and development, manufacture and sales of medical electronic equipments	2,882,512 $ 2,869 415,376 100,000 104,799 175,073 284,800 415,376 350,000 415,376	2,882,512 $ 2,869 415,376 - 104,799 175,073 85,440 415,376 200,000 415,376	87,769,559 1,000 12,865,921 10,000,000 11,311,875 20,000,000 10,000,000 12,865,921 35,000,000 40,100,000	100 100 100 100 100 50 100 100 100 100	8,369,784 $ 11,223 906,110 99,921 59,104 555,723 253,643 906,110 251,526 756,980	194,555 $ 218) ( 153,756 79) ( 77) ( 2,303 18,969) ( 153,756 7,133 75,957	194,977 $ 218) ( 153,756 79) ( 77) ( 1,299 18,969) ( 153,756 3,567 75,957	Note

Note: The difference between the profit or loss of the investee for the current period and the investment profit or loss recognized in the current period is the unrealized profit and loss adjustments for countercurrent transactions between subsidiaries.

Table 6

Information on investments in Mainland China

Table 7

Expressed in thousands of NTD (Except as otherwise indicated)

Altek Corporation

For the year ended December 31, 2020

Investee in Mainland China	Mainbusiness activities	Paid-incapital	Investment method （Note1）	Accumulated amount of remittance from Taiwan to Mainland China as of January1,2020	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the year ended December31,2020	Accumulated amount of remittance from Taiwan toMainland China as of December31,2020	Net profit (loss) of investee for the year ended December31,2020	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the year ended December 31, 2020 (Note4)	Accumulated amount of investment income remitted back to Taiwan as of December31,2020 Book value of investments in Mainland China as of December31,2020
					Remitted to Mainland China Remitted back to Taiwan
Altek (Kunshan) Co., Ltd. (Note 2) Altek EMS (Kunshan) Co., Ltd. (Note 3) Altek Trading (Shanghai) Limited Altek Precision (Kunshan) Co., Ltd. Altek Optical Technology (Kunshan) Co., Ltd. Altek Semiconductor (Shanghai) Co., Ltd.	Manufacture and sale of digital still cameras and its accessories Manufacture and sale of related engineering services Wholesale, import and export of digital cameras, digital video cameras and their associated accessories Design, manufacture and sales of digital camera parts Manufacture and sales of digital camera and its accessories and optical components Research design and sales of imaging technologies, electronic software and hardware	1,412,608 $ 142,400 242,080 393,024 318,976 42,720	2 2 2 2 2 2	1,281,600 $ 258,684 242,080 393,024 318,976 -	- $ - $ - - - - - - - - - -	1,281,600 $ 258,684 242,080 393,024 318,976 -	270,691 $ 14,892 7,877 1,941 127) ( 9,845) (	100 100 100 100 100 50	270,691 $ 14,892 7,877 1,941 127) ( 4,923) (	4,256,503 $ - $ 784,704 - 309,227 - 151,127 - 6,001 - 117,371 -

Note 1: Investment methods are classified into the following three categories; fill in the number of category each case belongs to: (1)Directly invest in a company in Mainland China.

(2)Through investing in an existing company in the third area,which then investeed in the investee in Mainland China.

(3)Others.

Note 2: Including retained earnings capitalized of US$4,600 (In thousand of US dollars). Note 3: Including retained earnings capitalized of US$3,600 (In thousand of US dollars). Note 4: Investment income or loss was recognised in the financial statements that are audited by the R.O.C parent company's independent accountants.

Companyname	Accumulated amount of remittance from Taiwan to MainlandChina as of December31,2020	Investment amount approved by the Investment Commission of the Ministryof Economic Affairs(MOEA)	Ceiling on investments in Mainland China imposed bythe InvestmentCommission of MOEA
Altek Corporation	$2,494,364	$2,863,717	$5,080,597

Table 7

Altek Corporation Information of major shareholders December 31, 2020

Table 8

Name of major shareholders	Shares	Shares
	Number of shares held	Holding percentage
Yitsang International Co., Ltd.	14,200,100	5.08%

Table 8

ALTEK CORPORATION STATEMENT OF CASH AND CASH EQUIVALENTS DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars, except foreign currency in dollars)

Statement 1

Statement 1
Item	Description		Amount
Cash Cash on hand-New Taiwan Dollar -Foreign currency Bank deposits Demand deposits and checking account Foreign currency demand deposits Time deposits-foreign currency (Note)	USD 4,735 at exchange rate of 28.48 RMB 8,151 at exchange rate of 4.3648 JYP 74,262 at exchange rate of 0.2763 EUR 215 at exchange rate of 35.02 USD 13,661,524.47 at exchange rate of 28.48 RMB 150,878.02 at exchange rate of 4.3648 JYP 1,613,986 at exchange rate of 0.2763 HKD 1,852.56 at exhcnage rate of 3.673 EUR 678.78 at exchange rate of 35.02 GBP 973.94 at exchange rate of 38.9 RMB 9,500,000 at exchange rate of 4.3648		200 $ 135 35 21 7 398 84,282 389,080 658 451 7 24 38 474,540 41,466 516,404 $

Note : Period for the time deposits is 1 to 3 months.

Statement 1

ALTEK CORPORATION STATEMENT OF ACCOUNTS RECEIVABLE DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Statement 2

Statement 2
Client Name	Description		Amount	Note
Customer: A B C Other Subtotal Related parties : Altek Semiconductor Corporation Altek Biotechnology Corporation Subtotal Total Less : Allowance for uncollectible		513,563 $ 98,389 49,585 24,499 686,036 13,136 $ 541 13,677 699,713 137) ( 699,576 $		The balance of each customer has not exceeded 5% of the accounts receivable

Statement 2

ALTEK CORPORATION STATEMENT OF INVENTORIES DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Statement 3

Raw material Work in progress Finished goods Less : Allowance for valuation loss Item Description	Cost 9,780 $ 54,873 14,360 79,013 3,981) ( 75,032 $	Net Realizable Value 6,840 $ Net realisable values are used as market 58,761 '' 19,918 '' 85,519 $ Amount Note

Statement 3

ALTEK CORPORATION

STATEMENT OF CHANGES IN FINANCIAL ASSETS MEASURED AT FAIR VALUE THROUGH PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Statement 4

Name of Financial Instrument	BeginningBalance	BeginningBalance	BeginningBalance	Addition	Addition	Shares Amount - - $ 5,659,998) ( - - $ Decrease		EndingBalance	EndingBalance	EndingBalance	Collateral	Note
	Shares		Book Value	Shares	Amount		Shares	Percentage share holding		Book Value
Gianta Co., Ltd. Hua-chuang Automobile Information Technical Center Co.,Ltd.	762,876 5,660,000		40,156 $ - 40,156 $	- -	8,073 $ - 8,073 $		762,876 2	14.55% 0%		48,229 $ - 48,229 $	None None	Note 1 Note 2

Note 1 :Recognize valuation profit. Note 2 :Since Hua-Chuang Automobile Information Technical Center Co., Ltd. reduced capital to cover losses, the number of shares decreased.

Statement 4

ALTEK CORPORATION

STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR UNDER THE EQUITY METHOD FOR THE YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Statement 5

Statement 5
Name	BeginningBalance		Shares Amount - - $ - - - 155,631 Note 2 10,000,000 100,000 Note 3 255,631 $ Addition	Shares Amount - 103,336) ($ Note 1 - 205) ( Note 2 - - - 79) ( 103,620) ($ Decrease	EndingBalance			Market Value or Net Assets Value		Collateral
	Shares	Amount	Shares	Shares	Shares	Percentage of Ownership	Amount	Unit Price	Total Amount
Altek International Investment Co., Ltd. Altek Japan Corporation Altek International Holding (BVI) Co., Ltd. Altek Investment Corporation	87,769,559 1,000 12,865,921 -	8,473,120 $ 11,428 750,479 - 9,235,027 $	- - - 10,000,000	- - - -	87,769,559 1,000 12,865,921 10,000,000	100% 100% 100% 100%	8,369,784 $ 11,223 906,110 99,921 9,387,038 $	- - - -	8,369,784 $ 11,223 906,110 99,921 9,387,038 $	None " " "

Note 1 :Including the repatriation of earnings, investment gains and losses recognized under the equity method, changes in cumulative conversion adjustments, and the elimination of unrealized gains and losses adjustments for countercurrent transactions between companies, etc. Note 2 :Including changes in investment gains and losses recognized under the equity method and cumulative conversion adjustments. Note 3 :Newly established investment funds and investment losses recognized under the equity method.

Statement 5

ALTEK CORPORATION STATEMENT OF ACCOUNT PAYABLES DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Statement 6

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Client Name Description Amount Note
Non related parties :
AA supplier $ 19,468
AB supplier 2,412
AC supplier 1,792
The balance of each
payables account has
not exceeded 5% of
Other 8,187
the accounts payable
Subtotal $ 31,859
Related parties :
Altek International Trading Co., Ltd. $ 895,635
Altek Semiconductor Corporation 11
Subtotal 895,646
Total $ 927,505
----- End of picture text -----

Statement 6

ALTEK CORPORATION STATEMENT OF SHORT-TERM BORROWINGS DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Statement 7

Nature	Description	EndingBalance Contract Period Range of Interest Rate 2,330,000 $ Expired in 6 months 0.82%~0.94%	Credit Line	Collateral	Note
Unsecured borrowings	Bank-borrowings		$ 4,350,000	None	-

Statement 7

ALTEK CORPORATION STATEMENT OF OPERATING REVENUE FOR THE YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Statement 8
Item	Volume Amount Note
Net operating revenue :
Digital imaging related
application products, etc.	3,241,557 $

Statement 8

ALTEK CORPORATION STATEMENT OF OPERATING COSTS FOR THE YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Statement 9

Direct raw materials used Raw materials at beginning of year Add: Raw materials purchased Less: Sale of Raw materials Expenses transferred in Raw materials at end of year Consumption of raw materials for the year Manufacturing expenses Manufacturing cost Work in progress at neginning of year Add: Work in progress purchased Less: Expenses transferred in Sales of work in process Work in Progress at end of year Cost of finished goods Finished goods at beginning at the year Add: Finished good purchased Less: Expenses transferred in Finished goods at end of year Total cost of goods sold Sales of raw materials and work in progress Reversal of loss on decline in market Other operating costs Total operating cost Item

Amount

16,013 $ 194,261 157,081) ( 584 9,780) ( 43,997 24,952 68,949 33,694 605,712 2,386) ( 15,951) ( 54,873) ( 635,145 55,212 2,045,702 3,993) ( 14,360) ( 2,717,706 173,031 12,858) ( 5,155 2,883,034 $

Statement 9

ALTEK CORPORATION STATEMENT OF MANUFACTURING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

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Statement 10
Item Description Amount Note
Wages and salaries $ 13,908
Import and export expenses 2,056
Outsourcing fees 1,702
Depreciation charges 1,559
The balance of each
expense account has
not exceeded 5% of
Other 5,727
the sales expenses
$ 24,952
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Statement 10

ALTEK CORPORATION STATEMENT OF SELLING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Statement 11 Item Description Amount Note Wages and salaries $ 17,444 Science Park management fees 1,694 Shipping expense 1,642 The balance of each expense account has not exceeded 5% of Other 5,341 the sales expenses $ 26,121

Statement 11

ALTEK CORPORATION

STATEMENT OF GENERAL AND ADMINISTRATIVE EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

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Statement 12
Item Description Amount Note
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Wages and salaries Cost of service Depreciation charges Other	108,959 $ 30,919 28,201 62,304 The balance of each expense account has not exceeded 5% of the sales expenses 230,383 $

Statement 12

ALTEK CORPORATION STATEMENT OF RESEARCH AND DESIGN EXPENSE FOR THE YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Statement 13 Item Description Amount Note Wages and salaries $ 209,702 Service expenses 15,908 The balance of each expense account has not exceeded 5% of Other 73,436 the sales expenses $ 299,046

Statement 13

ALTEK CORPORATION

SUMMARY STATEMENT OF CURRENT PERIOD EMPLOYEE BENEFITS, DEPRECIATION, DEPLETION AND AMORTIZATION EXPENSES BY FUNCTION

FOR THE YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Statement 14

Statement 14
Nature Function	Year ended December 31,2020			Year ended December 31,2019
	Classified as Operating Costs	Classified as Operating Expenses	Total	Classified as Operating Costs	Classified as Operating Expenses	Total
Employee benefit expense	$ 16,151	$ 376,605	$ 392,756	$ 3,060	$ 316,565	$ 319,625
Wages and salaries	13,908	328,323	342,231	2,813	271,729	274,542
Labor and health insurance fees	1,120	19,905	21,025	115	19,325	19,440
Pension costs	577	13,292	13,869	58	12,581	12,639
Directors' remuneration	-	7,782	7,782	-	5,443	5,443
Other personnel expenses	546	7,303	7,849	74	7,487	7,561
Depreciation charges	1,559	54,821	56,380	539	53,202	53,741
Amortisation charges	-	4,387	4,387	-	4,588	4,588

Note:

1. As at December 31, 2020 and 2019, the Company had 242 and 198 employees,including 4 and 4 non-employee directors, respectively.

2. A company whose stock is listed for trading on the stock exchange or over-the-counter securities exchange shall additionally disclose the following information：

3. (1) Average employee benefit expense in current year and previous year is $1,618 and $1,619. (Total employee benefits- directors' remuneration / number of employees - number of non-emplyee directors )

4. (2) Average employees salaries in current year and previous year is $1,438 and $1,415. (Total employee salaries / number of employees - number of non-emplyee directors )

5. (3) Adjustments of average employees salaries 1.6 %. (Average employee salaries current year - Average employee salaries previous year / Average employee salaries previous year )

6. (4) The supervisors’ remuneration for the years ended December 31, 2020 and 2019 were both $0, due to the establishment of the audit committee.

7. (5) The Company’s policies of salary and remuneration were as follows:

The Company’s compensation for directors including directors’ return, traveling expenses and directors’ remuneration. In accordance with the Company’s Articles of Incorporation, directors’ return

was based on the degree of participant in the operation, value of contribution to the Company and common standard of the industry. Traveling expenses were based on the common standard of

the industry and the attendance of the Board of Directors. Directors’remuneration shall not be higher than 4% of the profit of current year.

The Company's compensation for managers and employees including salary, award and employees’ return were based on the contribution, experience, management performance and responsibility and referred to the standard of the same industry. Managers’ performance examination and salary and remuneration have been reviewed by the remuneration committee and the Board of Directors, and will be checked based on the actual management result and related laws accordingly. Additionally, in accordance with the Company’s Articles of Incorporation, employees’compensation shall be distributed based on 10% to 20% of the profit of the current year.

Statement 14