ANDERSON — Annual Report 2020

Jul 19, 2021

Stock code：1528

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ANDERSON INDUSTRIAL CORP.

Year 2020

Annual Report

Date:May 8, 2021

Annual Report Website: http://mops.twse.com.tw/

1. Report to Shareholders

• I. Operation Results of 2020

The company's operating income for the year 2020 was RMB

3,210,946,000, a decrease of 949,599,000 or approximately 23% from the operating income of the year 2019. The operating gross profit of 2020 years was 854,486,000 , a decrease of 165,543,000 compared with that in 2019 years, which was about 16%.

Operating expenses in 2020 were 986,227,000, which was a decrease of approximately 322,604,000 compared with that in 2019;

therefore, the net operating loss in 2020 was 131,741,000, and the loss was reduced by approximately 157,061,000 compared with that in 2019. The company's net loss before tax for 2020 years was 125,535,000, which was a decrease compared with that in 2019 years.

1. The outcome of business plan

Consolidated Financial Statement Currency

onsolidated Financial	Statement Currency			unit:	NTD1,000
	2020		2019		Change
	Amount	%	Amount	%	Amount	%
Net sale	3,210,946	100	4,160,545	100	(949,599)	(23)
Gross profit	854,486	27	1,020,029	24	(165,543)	(16)
Operating expense	986,227	31	1,308,831	31	(322,604)	(25)
Operating Income(loss)	(131,741)	(4)	(288,802)	(7)	157,061	54
Non-operating income (expense) - net	6,206	0	12,799	1	(6,593)	(52)
Earnings (loss) before taxation	(125,535)	(4)	(276,003)	(6)	150,468	55
Earnings (loss) in current period	(118,019)	(4)	(273,051)	(6)	155,032	57
Shareholders’ equity attributable to parent company	(118,733)	(4)	(274,618)	(6)	155,885	57

1. Budget execution ： Not applicable

2. Analysis of income position and profitability

Currency unit: NTD1,000

	Item	Item	2018	2017
Income position	Operating income		(131,741)	(288,802)
	Non-operating income (loss) – net		6,206	12,799
	Earnings before taxation		(125,535)	(276,003)
	Earnings in period	current	(118,019)	(273,051)
Profitability	ROA%		(1.81)	(4.51)
	ROE%		(5.20)	(10.97)
	Ratio to paid-in capital	Operating income	(6.61)	(14.49)
		Earnings before taxation	(6.30)	(13.85)
	Net profit rate%		(3.68)	(6.56)
	EPS in NTD		(0.61)	(1.39)

4. R&D result

R&D projects completed in 2020:

(1). Development of flexible head processing machine

(2). Development of automatic wire processing machine for composite door panels

(3). Light five-axis machine development

(4). Development of high-precision five-axis spindle head group

(5). Development of synchronous permanent magnet spindle

(6).Development of wide-format monochrome rapid printing automation line

• II. Production and sale policy and business objective in 2020 1. Precision machinery

Continuously improve the function and machining accuracy of high-end technology five-axis equipment. The North American market continues to maintain the channels of existing precision machinery agents and accelerate the expansion of aerospace and composite materials applications. The user operation interface AGMVP is used in different controller systems, which can effectively set up technological differences with market competitors, more effectively provide the integration capabilities of Industry 4.0, and a major technological breakthrough in automation and ease of use.

The South American market will transfer key technologies and main production back to China in 2020, standardize the product line, reorganize the local operation model and reorganize the organization, establish a new sales team in the cooked rice market to enter South America, and have produced results in 2020. In 2021, in addition to low-level standardized products, it is expected to strengthen the expansion of the mid-level market and standardized CNC-related markets to support the Brazilian carpentry-related market.

In the New Zealand and Australia region, the competition in the panel furniture market is becoming increasingly fierce, and new competitors are increasing. At present, the introduction of the highend linear motor Ende's own technology product line is driven by the integration of existing products and entry product lines.

In the Asia-Pacific region, according to the needs of various markets, we will continue to provide flexible product selection, integrate automation capabilities to provide services, and increase the added value of products. The yacht industry has made breakthroughs to enter the mainland market, thereby planning for the expansion of new markets in the future. At present, there are many loopholes in the integration ability of mainland competitors in the door panel line, which is still incomplete. It provides Ende time and space to enter the market but there are still opportunities.

In addition to the existing agents in the European region, the UK / Ireland / Switzerland / Italy continues to deepen the timber market, and through the acquisition of MATEC Germany, new channels have been acquired and reserves have entered the aerospace / composite application field. In 2020, the main products will be certified by TUV CE certification. This certification can also be applied to new product development.

In 2020, the number of CNC precision machining centers reached 455. It is estimated that the number of sales in 2021 will be 567, which can grow by 25%.

2. Electronic Machine Plant (Sogotec)

The electronic machinery factory will continue to carry out the “three-year three-way” operation plan from 2021: “productrefinement”; “market-customization”; “service-intelligence”.

In the next three years, among the existing printed circuit board products, the drilling machine has officially ceased production after consuming stock parts in the first half of 2018. The original drilling machine R & D manpower will do its utmost to improve the

performance of the molding machine. In addition to introducing the new AC electric spindle developed by Ende, the processing accuracy will be improved and the product will be refined. In order to get rid of competitors vicious price cut competition.

The alliance between different industries and ODM OEM will lay the foundation for the first three years and strive for more joint development opportunities for advanced processes. In addition to the original foreign cooperation in high-precision ODM machinery, it also combines laser, inkjet, software, automation and other

capabilities within the group. Strengthen customized kinetic energy, and expect to reach the leading position in the industry.

With the continuous fermentation of Industry 4.0, the

automation department continues to target traditional industries as the target market, providing customers with a more intelligent service benefit from the production line, so as to help customers reduce management costs. On the other hand, in order to meet the needs of the original PCB industry to be fully intelligent, the automation department plans to upgrade the existing product intelligent mechanism to meet market demand in the next three years, and use existing technologies to increase the application level of expansion from the traditional PCB industry. The application expands to the solar thin film production line.

In 2020, the number of electronic machinery sales reached 290, and the number of sales is expected to be 318 in 2021, with a sales growth of about 10%.

3. Seiko machine

MATEC and AEC products are in cutting-edge industries, mainly in Aerospace, Automotive and Advance material. Due to the impact of COVID-19 in 2020, revenue and profit will decline significantly. However, because European countries have the ability to control the epidemic, and vaccines will continue to be marketed and vaccinated, it is expected that the market will recover in 2021. In addition to revisiting the original industries and existing customers, MATEC and AEC are doing after-sales services and actively Participating in the exhibition will allow customers to return to the market, and to operate in the group's region, to bring these heavyweight products to the Chinese and American markets, and to organize education and training for distributors and employees in China.

AAC's performance is limited due to the impact of COVID-19 in 2020. However, due to the impact of COVID-19, many competitors have a tendency to withdraw from the market. They will integrate resources of the two US subsidiaries AAC and GA to strengthen the expansion of business marketing. It is expected that in 2021, the existing customers of competitors who have withdrawn from the

market will be acquired, which will help the related equipment market to have significant growth. In addition, as the vaccine is about to be launched and vaccinated, related industries are expected to recover in 2021. Therefore, in addition to the maintenance of original distributors and customers, the sales and service team will be strengthened to expand the United States of Aerospace, composite material and other high-end applications. market.

4. China

Due to the impact of COVID-19 in 2020, sales and profits in China will decline. In 2021, it is expected that in addition to maintaining the existing production base, it will increase its entry into the market of low-level standardized machines to meet the current China market.

China is one of the largest markets in the world. Although it is temporarily affected by the new coronavirus epidemic for a short period of time, but taking the SARS epidemic in 2003 as an example, after the epidemic is stable, the demand for recession during the epidemic prevention will explode after the epidemic ends. During the year, the Chinese market will be expanded by stealing into the low-level standardized machine market and increasing the sales of dealers and agents.

The mainland base focuses on the production of the panel furniture industry. Other PCB industries, yacht industry and cuttingedge woodworking machines will be supplied by Taiwanese factories.

In addition, in response to the Chinese government's development of China's domestic aerospace-related industries, the Group's aerospace automotive industry machinery will be expected to be introduced into China by German subsidiaries, expanding the geographical scope of operations and expanding the economies of scale of production.

III. The effect of external competitive environment, legal environment, and operation environment

1. The 110-year international situation is still unpredictable due to the new arrival of the US Biden administration, the direction of trade with China is still unpredictable, whether the Sino-US trade war and technology war will continue or will be cached in uncertainty, when the COVID-19 epidemic will slow down, and the trend of the epidemic. After the mitigation of the risks of the international economic and political situation, and the increase in uncertain factors, the company's operating risks will increase.

2. The prosperity cycle changes rapidly, the order demand is often large and the delivery time is short, which tests the supply chain management ability and production adjustment ability, and the difficulty of inventory management increases.

3. Due to competition and business habits, some products have a long instalment period, resulting in increased pressure on capital dispatch.

4. IV. Development strategy in the future

5. Improvement of existing models for quality upgrade.

6. Development of human resources for international marketing and technical service teams for development of channels in the newly emerging markets.

7. Searching for strategic partners to intensify the vertical and horizontal integration of products.

8. Increase the proportion of self-manufactured key parts and components to reduce cost so as to upgrade the competitive power of products.

9. Development of new market for bringing in more revenue.

Chairman:	Person in charge:	Chief Accounting
Liao Wen-Chia	Huang Yi-Hsien	Officer:
		Shih, Po-Ju

Two, company profile

1. Date of establishment:

July 21, 61, Republic of China.

2. Company History:

The company in the Republic of China 61 years 7 Yue authorized to spend establishment, the original Ming Ende Industrial Co., Ltd., the main business items for a variety of CNC machinery, construction and decoration materials and hardware parts of the design, manufacturing, processing, sales and import and export business; the Company business objectives toward high-precision machinery and high-tech development, it is with the company "Founding technology, international meritorious service" business philosophy, in the Republic of China 89 years 9 months will be the company name was changed to Ende Technology Corporation. Important chronicles of the company over the years :

• 1976 ‧ Obtained the product agency right of KANEFUSA in Japan and imported the first high-quality tungsten steel saw blade for woodworking.

• 1977 ‧ Established sales offices in Taichung and Kaohsiung one after another, opening up the same industry-wide marketing and service ethos.

• 1978 ‧ Obtained the agency right of Japan's MANUNAKA product, opening the door to the woodworking machinery market

• 1980 ‧ Held a provincial tour exhibition of imported woodworking machinery from Japan, breaking the traditional marketing methods of the same industry.

• ‧ Obtained the world's largest brand-German HOMAG woodworking machinery agency rights, selling HOMAG welting machines, drilling machines, double-end tenoning machines and other series of products, and developing technical cooperation relations.

• 1985 ‧ The computer shaving machine (NC ROUTERS) was successfully designed and developed its own brand.

• 1986 ‧ The computer shaving machine won the first special award of Taiwan Woodworking Machinery by the Taiwan Machinery Union.

• 1987 ‧ Our own CNC machinery products are imported into the European and American markets.

• 1988 ‧ CNC ROUTERS won the first self-made brand award of the Foreign Trade Association.

• 1989 ‧ CNC ROUTERS won the Best Product Award of the Woodworking Machinery Industry Association again.

• 1992 ‧ CNC ROUTERS , CNC MACHINE CENTER, and CNC PROFILE GRINDING MACHINE also won the "Taiwan Excellence Award" by the Ministry of Economic Affairs.

• ‧ Change the organization to a joint stock limited company.

• 1993 ‧ established a Hong Kong company Ende, Ende German company Nordex USA.

1994

• ‧ merger Andrew, Zhongde company, business integration, paid-up capital increased to NT $ 121,000,000.

• ‧ For cash increase, the paid-in capital increased to NT $ 170,470 ,000.

• ‧ Passed German TUV ISO-9002 quality certification.

• 1995 ‧ Developed the first woodworking CNC Router ( computer shaving machine ) using PC-Based Controller in China .

• ‧ For cash increase, the paid-in capital increased to NT $ 187,260 ,000.

• 1996 ‧ established Nordex Singapore.

• ‧ For cash increase, the paid-in capital increased to NT $ 187,260 ,000.

• ‧ For cash capital increase, the paid-in capital increased to NT $ 266,500 ,000.

• ‧ Successfully developed the first CNC five-axis machining machine in China by the leading new product subsidy from the Ministry of Economic Affairs , and won the Good Design Award from the China Woodworking Association.

• ‧ Apply for public issuance of stocks and approved by the competent authority.

• ‧ Certified by EU CE Machinery Safety Directive.

• 1997 ‧ Applying surplus and capital surplus to capital increase, the paid-in capital increased to NT $ 310,000 ,000.

• ‧ Successfully developed computer numerical control drilling machine for printed circuit board.

• ‧ established Zhongde Industrial ( Shanghai ) Co., Ltd.

• ‧ CNC five-axis machining machine won the silver medal of the 6th National

• 1998 Product Image Award. ‧ Passed German TUV ISO-9001 quality certification.

• ‧ Successfully developed printed circuit board inspection machine.

• ‧ Developed a light-weight and aeronautical CNC five-axis machining machine.

• ‧ cash injection, transfer capital surplus and capital surplus, paid-up capital increased to NT $ 475,000 ,000.

• ‧ The company's stocks are formally listed and traded on the counter.

• 1999 ‧ Completed the development of the leading new product project " P- BGA Appearance Inspection Machine".

• ‧ Successfully developed computer numerical control drilling machine for printed circuit board.

• ‧ Developed a light-weight and aeronautical CNC five-axis machining machine.

• ‧ Successfully developed ultra-high speed printed circuit board drilling inspection machine.

• ‧ Applying surplus and capital reserve to increase capital, the paid-in capital increased to NT $ 549,000 .

2000

• ‧ Successfully introduced the linear motor printed circuit board drilling technology.

• ‧ Handle the capital increase in fiscal year 88 , and the paid-in capital increased to NT $ 619,000 ,000.

• ‧ in earnings and capitalizing of common reserves, paid-up capital increased to NT $ 719,000 ,000.

• ‧ The company's stocks were officially listed on the stock exchange and listed on the stock exchange.

• 2001 ‧ import ERP and PDM systems to enhance R & D efficiency and the use of corporate resources.

• ‧ Applying surplus and capital reserve to increase capital, the paid-in capital increased to NT $ 800,000 .

• 2002 ‧ The research and development building of Houlong Factory was officially opened.

• ‧ merged German company Nordex Nordex Germany and electronic machinery company.

• ‧ handle capitalizing of common reserves, paid-up capital increased to NT $ 820,000 ,000.

• 2003 ‧ For the cancellation of capital reduction of treasury stocks, the paid-in capital is NT $ 742,000 ,000.

• ‧ Issued overseas convertible corporate bonds of USD 9 million.

• 2004 ‧ handle the transfer of employees treasury shares 4,000,000 shares. ‧ For redemption of overseas convertible corporate bonds of US $ 1.5 million, the actual circulation of overseas convertible corporate bonds is US $ 8.4 million.

• 2005 ‧ Approved the "Exemplary Information Application Development Plan" of the Technology Department of the Ministry of Economic Affairs

• ‧ in earnings and capitalizing of common reserves, paid-up capital amounted to NT $ 762,000 ,000.

• ‧ For overseas convertible corporate bonds, redeem US $ 4.9 million, and convert US $ 1.75 million into ordinary shares. The actual overseas convertible corporate bonds are US $ 1.75 million.

• 2006 ‧ Ende German Company handled the capital reduction, and the paid-in capital was 2,025 ,000 euros .

• ‧ For redemption of overseas convertible corporate bonds of US $ 1.5 million, the actual circulation of overseas convertible corporate bonds is US $ 8.4 million.

• ‧ Overseas convertible corporate bonds of US $ 1.75 million are converted into ordinary shares, and the actual overseas convertible corporate bonds are US $ 0.

• ‧ handle overseas convertible into common shares to change the registration, paid-up capital amounted to NT $ 894,923,480.

• ‧ Applying surplus and capital reserve to increase capital, the paid-in capital is NT $ 960,000,000.

• ‧ Shengde Investment Co., Ltd. was established with a paid-in capital of NT $ 150,000,000.

• 2007 ‧ Increase the capital of Shengde Investment Co., Ltd., and the paid-in capital is NT $ 200,000 .

• ‧ via Shengde reinvestment total grid Investment Co., Ltd. Precision Co., Ltd. NT $ 139,922,000.

• ‧ Apply for the issuance of NTD 300,000 ,000 for the first domestic unsecured conversion of corporate bonds .

• ‧ Take a cash increase of NT $ 200,000 and a surplus capital increase of NT $ 40,000 . The paid-in capital is NT $ 1.2 million .

• 2008 ‧ Increase the capital of Shengde Investment Co., Ltd., and the paid-in capital is NT $ 220,000,000.

• ‧ for domestic first unsecured convertible bonds converted into common shares to change the registration, paid-in capital to NT $ 1,209,682,060 yuan.

• ‧ deal with surplus capital transferred 61,000,000, paid-in capital to NT $ 1,270,682,060 yuan.

• ‧ Closing treasury stocks to cancel capital reduction of 120,000,000, paid-in capital amounted to NT $ 1,150,682,060 .

• 2009 ‧ handle capitalizing of common reserves of 25,000 ,000, paid-in capital to NT $ 1,175,682,060 yuan.

• ‧ withdrawn in accordance with the provisions of the outstanding swaps of domestic first unsecured convertible bonds of NT $ 26.1 million yuan, of which NT $ 22,500,000 dollars in cash recovered, another NT $ T $ 3, 6 00,000 yuan converted into ordinary shares, paid-registration changes The capital is NT $ 1,178,114,480 .

2010

• ‧ Apply for the issuance of the second domestic unsecured conversion of corporate bonds of NT $ 300,000 .

• ‧ handle capitalizing of common reserves 23,062,290 yuan, paid-up capital amounted to NT $ 1,201,176,770 yuan.

• 2011 ‧ Apply for the second domestic unguaranteed conversion of corporate bonds into common stock change registration and capital reserve conversion to

increase capital by 30,000,000, and the paid-in capital is NT $ 1,426,944,980 .

• ‧ investment of $ 2,425,000 dollars to buy Shanghai Wan Chung Iida Machinery Co., Ltd. changed its name to equity Youde Machinery ( Shanghai ) Co., Ltd.

• 2012 ‧ apply for cancellation of treasury stock capital reduction 30,220,000, paid-in capital to NT $ 1,396,724,980 yuan.

• ‧ for domestic first 2 times unsecured convertible bonds converted into common shares to change the registration.

• ‧ withdrawn in accordance with the provisions of the outstanding swaps of domestic first 2 times unsecured convertible bonds NT 6,300,000 yuan, of which NT $ 1,400,000 dollars in cash recovered, another NT

  • $ 4,900,000 dollars converted into ordinary shares, to change the registration of new paid-up capital amounted to TWD 1,409,187,540 .

• ‧ handle the surplus transferred capital 60,812,460 yuan ,, paid-up capital amounted to NT $ 1,470,000,000 yuan.

2013

• ‧ is positioning the company as a professional machinery company, 102 years 5 reinvestment NT May 5000 yuan to set up Yuk Tak Industrial Co., Ltd., to undertake the business of the Company Sheet Division, operating full-time career plate, and from 102 in 8 month officially opened .

• 2014 ‧ 103.1.15 Chairman Xie Ziren resigned and was re -elected as chairman by Padre Investment Co., Ltd., and appointed Liao Wenjia as the legal representative. The original chairman Xie Ziren was promoted to honorary chairman.

• ‧ for the mechanical market share increase, 103.4.25 to Italy Giben made Group are located in Brazil and the United States subsidiary Giben do Brasil Maquinas e Equipamentors Ltda and Giben America, 100% Inc. equity, related trademarks and technical drawing.

2015

• ‧ cash injection 363,000,000, paid-in capital to NT $ 1,800,000,000.

• ‧ Zhongde Industrial (Shanghai) Co., Ltd. to invest its own funds of RMB 5,360 ,000 and Sichuan Ruifeng Lin Ecological Technology Co., a joint venture between Chengdu Zhongde NC Machinery Co., shareholding ratio of 67% , in order to expand the Chinese mainland market.

• ‧ In order to expand the company's products and the need for diversified development of the market, the German Monforts Werkzeugmaschinen GmbH was acquired through asset acquisition with a total investment of 3.5 million euros.

• ‧ In order to consolidate the internal resources of the group, in October 104 , the business and related assets of the electronic machinery business unit were all sold to Sun Corporation General Precision Co., Ltd.

• 2016 ‧ 105 in 1 Yue 1 Japan Investment NT $ 16,781,000, established the total grid Precision Machinery (Shanghai) Co., Ltd.

• ‧ for the consideration of the Group's vertical / horizontal integration and diversification, the Company 105 in 4 Yue 1 Ri to US $ 11,045,000 Yuan and things Xin Technology Co., Ltd. joint venture to invest in US companies CAL QUALITY ELECTRONICS , shareholding ratio of 47% , to achieve Expand the Group's operating scale and profitable sustainable operation.

• ‧ 105 on 6 Yue 22 after Japanese firms to assess the financial situation, debt situation, the subsidiary may have financial needs and potential investment case and other aspects of a comprehensive assessment, the board of directors will hold a stake sale to full thing Xin Technology Co., Ltd., and in 105 years 6 Yue 30 days to complete the transaction process.

• 2017 ‧ To amplify the company's product diversification and market development needs and improve operational synergies, the Company 106 in 3 Yue 28 Nikkei resolution of the Board euro 3,900,000 in the acquisition of Germany Matec Machinenbau GmbH of real estate, and through subsidiaries Anderson Europe GmbH euro 3,100,000 in Germany, the newly established MATEC GmbH , by MATEC GmbH acquisition of other fixed assets, inventory and patents and other assets, responsible for the operation Matec Machinenbau GmbH related products and services line of business.

• 2018 ‧ cash injection 200,000,000 and cancellation of treasury stock capital reduction 1,190,000, paid-in capital of NT $ 1,998,810,000.

• ‧

• 2019 apply for cancellation of treasury stock capital reduction 5,500,000, paid-in capital of NT$1,993,310,000.

• 2020 ‧ Anderson Europe GmbH established a subsidiary ASC for 25,000 euros in May 109 and acquired 100% of the company's shares.

Participation and Corporate Governance Report

1. Company Organization

• (1) Organization chart

  • 1.Organizational structure

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2. Business operated by major departments

Corporate Governance	Comprehensive management of corporate governance related matters.
Audit Office	Comprehensively plan, formulate and check the company's internal control system.
General Affairs Department	Comprehensive management of the company's general affairs.
Human Resources Department m	prehensive management of company personnel, education and training.
Information Department	Comprehensively integrate, plan and execute company information systems.
China Accounting	Comprehensively manage finance and accounting in China.
Accounting Department	Comprehensive management of company accounting, taxation and stock business.
Finance Department	Comprehensive management of the company's financial business.
Import and Export Department	Responsible for the company's import and export business .
Spindle Factory	Responsible for the manufacture of spindle products.
R & D design	Responsible for product development and design.
Manufacturing plant	Responsible for logistics management, control of raw material feeding, machinery production quality, and processing of components of self-made machinery.
QC Department	Quality control business planning, coordination, guidance and assessment management.
Purchasing Department	General management company's domestic and foreign raw materials and commodities procurement business.
Support China	Responsible for exhibition planning and in-factory results invitations in China, assessing market needs and trends, and adjusting marketing strategies.

Business service	Responsible for machinery sales and after-sales service.
Minai Board Manufacturing Office	Responsible for the manufacture of Meinaboard..
Machinery Business Office	Responsible for the sale of various types of machinery and various imported machinery.

• (2) Information on directors, supervisors, general managers, deputy general managers, associate managers, supervisors of various departments and branches 1. Information on directors and supervisors (1)

2021.3.31 ; Unit: shares; %

job title	Name	gender	Nationality or Registration	For the first time Election date	Election date	Ren period	Holding shares at election	Holding shares at election	Now holding shares	Now holding shares	Spouse, minor Children now hold shares	Spouse, minor Children now hold shares	Use someone else's name Yi holds shares	Use someone else's name Yi holds shares	Mainly by the(school)calendar	Currently serving as the company and Positions of other companies	With a spouse or second parent Other supervisors of internal relations , Director or supervisor	With a spouse or second parent Other supervisors of internal relations , Director or supervisor	With a spouse or second parent Other supervisors of internal relations , Director or supervisor	Remarks (Note)
							Number of shares	Shareholding (%)	Number of shares	Shareholding (%)	Number of shares	Shareholding (%)	Number of shares	Shareholding (%)			job title	Name	relationship
Chairman	Win Yong Investment Co., Ltd.	-	China Republic of China	109.5.27	106.6.19	3	20,000,000	10.03%	20,000,000	10.03%	-	-	-	-	no	no	no	no	no	no
Representative of legal person director(chairman)	Liao Wenjia	male	China Republic of China	109.5.27	109.5.27	3	-	-	4 , 790 , 000	2.4 %	-	-	3,500,000	1.76%	Boston University / Master of Electronic Commerce Bachelor of National Taiwan University	Chairman of Ende Technology Co., Ltd. Chairman and General Manager of Shixin Technology Co., Ltd. Parpro Holdings Co., Ltd. Representative of corporate director AP Parpro, Inc. Legal representative Shide Technology Co., Ltd. legal representative director representative Chairman of Pad Investment Co., Ltd. Chairman of Jishi Investment Co., Ltd. Chairman of Yunyong Investment Co., Ltd. Parpro (Nevada) Inc. legal representative Pilot (Las Vegas) Inc. Legal representative	no	no	no	no

job title	Name	gender	Nationality or Registration	For the first time Election date	Election date	Ren period	Holding shares at election	Holding shares at election	Now holding shares	Now holding shares	Spouse, minor Children now hold shares	Spouse, minor Children now hold shares	Use someone else's name Yi holds shares	Use someone else's name Yi holds shares	Mainly by the(school)calendar	Currently serving as the company and Positions of other companies	With a spouse or second parent Other supervisors of internal relations , Director or supervisor	With a spouse or second parent Other supervisors of internal relations , Director or supervisor	With a spouse or second parent Other supervisors of internal relations , Director or supervisor	Remarks (Note)
							Number of shares	Shareholding (%)	Number of shares	Shareholding (%)	Number of shares	Shareholding (%)	Number of shares	Shareholding (%)			job title	Name	relationship
																Legal representative of Parpro Technologies Inc Representative Director of Parpro Quality Inc Chairman of General Precision Co., Ltd. Chairman of Shengde Co., Ltd. Chairman of Willis Corporation Chairman of Yude Industrial Co., Ltd. Director of Giben Holdings Ltd. ( SAMOA ) Director of Giben Holdings Ltd. (BVI)
Representative of corporate director	Lin Qiquan	male	China Republic of China	109.5.27	109.5.27	3	-	-	632, 0 10	0.32 %	11,902	0.01%	-	-	Zhengda EMBA Master	Ende Technology (share) company legal person director representative The representative of the legal person director of General Precision Co., Ltd. Ende (USA) Company Director Director of Ende (Germany) Ende (Hong Kong) Company Director Director representative of General Grid Precision ( Shanghai) Corporation Chairman of Zhongde Industrial (Shanghai) Company	no	no	no	no

job title	Name	gender	Nationality or Registration	For the first time Election date	Election date	Ren period	Holding shares at election	Holding shares at election	Now holding shares	Now holding shares	Spouse, minor Children now hold shares	Spouse, minor Children now hold shares	Use someone else's name Yi holds shares	Use someone else's name Yi holds shares	Mainly by the(school)calendar	Currently serving as the company and Positions of other companies	With a spouse or second parent Other supervisors of internal relations , Director or supervisor	With a spouse or second parent Other supervisors of internal relations , Director or supervisor	With a spouse or second parent Other supervisors of internal relations , Director or supervisor	Remarks (Note)
							Number of shares	Shareholding (%)	Number of shares	Shareholding (%)	Number of shares	Shareholding (%)	Number of shares	Shareholding (%)			job title	Name	relationship
																Chairman of Youde Machinery (Shanghai) Company Legal representative of Yude Industrial Co. , Ltd. Director of Giben America Inc. Ende science and technology (shares) , chairman of special assistant
Representative of corporate director	Xu Yonghao	male	China Republic of China	109.5.27	109.5.27	3	-	-	50,000	0. 03 %	-	-	-	-	PhD in International Transportation, Cardiff University, UK Master of Shipping, Institute of Oceanography, Cultural University Taiwan Bachelor of Oceanography Consultant of China Aviation Industry Development Foundation	Ende Technology(share)company legal person director representative	no	no	no	no
Representative of corporate director	Huang Yixian	Female	China Republic of China	109.5.27	109.5.27	3	-	-	316,000	0.16%	-	-	-	-	National Taiwan University EMBA Accounting and Management Decision Group Master Chief Financial Officer of Huan Rui Medical Investment Holdings Co., Ltd.	General Manager of Ende Technology Co., Ltd. Supervisor of Zongge Precision (Shanghai) Company Director of Zongge Precision Co., Ltd. Director of Zhongde Industrial (Shanghai) Co., Ltd.	no	no	no	no

job title	Name	gender	Nationality or Registration	For the first time Election date	Election date	Ren period	Holding shares at election	Holding shares at election	Now holding shares	Now holding shares	Spouse, minor Children now hold shares	Spouse, minor Children now hold shares	Use someone else's name Yi holds shares	Use someone else's name Yi holds shares	Mainly by the(school)calendar	Currently serving as the company and Positions of other companies	With a spouse or second parent Other supervisors of internal relations , Director or supervisor	With a spouse or second parent Other supervisors of internal relations , Director or supervisor	With a spouse or second parent Other supervisors of internal relations , Director or supervisor	Remarks (Note)
							Number of shares	Shareholding (%)	Number of shares	Shareholding (%)	Number of shares	Shareholding (%)	Number of shares	Shareholding (%)			job title	Name	relationship
															Vice President of the Audit Department of Zicheng United Certified Public Accountants	Director of Youde Machinery (Shanghai) Company Supervisor of Yude Industrial Co., Ltd. Director of Ende (Germany) Company Shengde (shares) company legal person director representative Director of Giben America Inc. Executive Director of Matec
independent director	Lai Jun Liang	male	China Republic of China	109.5.27	109.5.27	3	-	-	-	-	-	-	-	-	Mechanical Engineering Taiwan University Cheng Xue Xi Jiaoshou NASA, NASA- Lewis Research, Center	Independent Director of Ende Technology Co., Ltd.	no	no	no	no
independent director	Wu Qingsong	male	China Republic of China	109.5.27	109.5.27	3	-	-	-	-	-	-	-	-	Professor of China Culture University Professor of Taiwan University	Ende science and technology(shares)independent directors Total grid Precision(shares)independent directors State financial holding votes(shares)independent directors State Micro Technology(stocks)independent directors	no	no	no	no

job title	Name	gender	Nationality or Registration	For the first time Election date	Election date	Ren period	Holding shares at election	Holding shares at election	Now holding shares	Now holding shares	Spouse, minor Children now hold shares	Spouse, minor Children now hold shares	Use someone else's name Yi holds shares	Use someone else's name Yi holds shares	Mainly by the(school)calendar	Currently serving as the company and Positions of other companies	With a spouse or second parent Other supervisors of internal relations , Director or supervisor	With a spouse or second parent Other supervisors of internal relations , Director or supervisor	With a spouse or second parent Other supervisors of internal relations , Director or supervisor	Remarks (Note)
							Number of shares	Shareholding (%)	Number of shares	Shareholding (%)	Number of shares	Shareholding (%)	Number of shares	Shareholding (%)			job title	Name	relationship
independent director	Liang Yihong	male	China Republic of China	109.5.27	109.5.27	3	-	-	-		-	-	-	-	Adjunct Assistant Professor, Department of Finance, Taipei University of Commerce	Independent Director of Ende Technology Co., Ltd.	no	no	no	no

Note: The company's chairman and general manager or equivalent (the top manager) are the same person, are relatives of each other's spouse or first relative, and should explain the reasons, rationality, necessity and corresponding measures ( such as increasing the number of independent directors, (There should be more than half of the directors who are not part-time employees or managers, etc. )

Related information.

March 31, 2021

Table 1: Major shareholders of corporate shareholders

	Legal person shares of the East were called	Legal person shares of the East were called	Legal person shares of the East were called	Major shareholders of corporate shareholders	Major shareholders of corporate shareholders	Major shareholders of corporate shareholders	Major shareholders of corporate shareholders	Major shareholders of corporate shareholders	Major shareholders of corporate shareholders	Major shareholders of corporate shareholders	Major shareholders of corporate shareholders	Major shareholders of corporate shareholders	Major shareholders of corporate shareholders	Major shareholders of corporate shareholders	Major shareholders of corporate shareholders	Major shareholders of corporate shareholders	Major shareholders of corporate shareholders	Number of independent directors of other public offering companies no no no
	Win Yong Investment Co., Ltd.			Liao Wenjia (92%), Chen Shiqian (8%)
	Information of	Directors and
condition Name		Do you have more than five years of work experience And the following professional qualifications				Meet the independence situation (Note1)												Number of independent directors of other public offering companies
		Lecturer or above in public or private colleges and universities in relevant departments required for business, legal, financial, accounting or company business	Judges, prosecutors, lawyers, accountants or other professional and technical personnel with national examinations and certificates required for the company's business		Work experience required for business, legal affairs, finance, accounting or corporate business	1	2	3	4	5	6	7	8	9	10	11	1 2
Win Yong Investment Representative : Liao Wenjia		-	-				-	-		-	-	-					-	no
Win Yong Investment Representative : Lin Qiquan		-	-			-	-										-	no
Win Yong Investment Representative : Xu Yonghao		-	-														-	no

Win Yong Investment Representative : Huang Yixian	-	-		-	-										-	no
Lai Jun Liang		-														no
Wu Qingsong		-														3
Liang Yihong		-														no

Note 1 : If the directors and supervisors meet the following conditions during the two years before the election and during their tenure, please mark “  ” in the space under each condition code .

• 1 ) Not employed by the company or its affiliates.

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

• 3 ) Non-self, spouse, minor children, or other natural person shareholders who hold more than 1% of the total issued shares of the company in the name of others or the top ten shareholders.

• 4 ) Managers other than those listed in (1) or (2) and (3) listed in the spouse, relatives within the second parent or direct blood relatives within the third parent.

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

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

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

• 8 ) Directors (directors), supervisors (supervisors), managers or shareholders holding more than 5% of a specific company or organization that is not in financial or business dealings with the company (but if a specific company or organization holds issued shares in the company) If the total number is more than 20% but not more than 50% , and the independent directors established by the company and its parent company, subsidiary company or subsidiary company of the same parent company in accordance with this law or local national laws and regulations concurrently serve each other, this limit shall not apply).

• 9 ) Professionals, sole proprietorships, partnerships, companies or institutions that do not provide audits for companies or related companies or business, legal, financial, accounting and other related services that

do not exceed NT $ 500,000 in cumulative compensation in the past two years Business owners, partners, directors (directors), supervisors (supervisors), managers and their spouses. However, members of the Salary and Compensation Committee, Public Acquisition Review Committee, or M & A Special Committee that perform their duties in accordance with the relevant laws and regulations of the Securities Exchange Act or the Corporate M & A Act are not limited to this.

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

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

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

• General manager, deputy general manager, associate manager, supervisors of various departments and branches

2021.3.31 ; Unit: shares; %

													2021.	2021.	2021.	3.31; Un
job title	Name	gender	Country of Citizenship	Take office date	Holding shares		Spouse, minor Children holding shares		Holding shares in the name of others		Mainly by the(school)calendar	Currently holding positions in other companies	Managers with relationship within spouse or second parent			Remarks (Note)
					Number of shares	Shareholding Proportion(%)	Number of shares	Shareholding Proportion(%)	Number of shares	Shareholding Proportion(%)			job title	Name	relationship
Total by manager	Huang Yixian	Female	Republic of China	10 9 . 01 .01	316,000	0.1 6 %	-	-	-	-	Master ofEMBAAccounting and Management Decision Group, Taiwan University Chief Financial Officer Deputy General Manager of Audit Department of Zicheng United Accounting Firm	Supervisor of General Precision(Shanghai)Company Total grid Precision(shares)Company Director Director of Zhongde Industrial(Shanghai)Company Director of Youde Machinery(Shanghai)Company Yuk Tak Industrial(shares)company supervisors Director of Ende(Germany) Director representative of Shengde(share)company legal person Director ofGiben America Inc. M ATECExecutive Director Executive Director ofM onforts	no	no	no	no
Executive Vice President	Li Mingzhe	male	Republic of China	104.01.01	2 56 , 404	0.13%	-	-	-	-	Mechanical Research Institute of ZTE University	Total grid Precision(shares)corporate representative director Director ofGiben America Inc.	no	no	no	no
Deputy General Manager	Lin Chengwei	male	Republic of China	104.01.01	50,000	0.03%	-	-	-	-	Dongshi Gaogong	Director of General Precision(Shanghai)Company	no	no	no	no
Deputy General Manager	Wu Hongming	male	Republic of China	10 . 7 .0 . 4 . 30	73 , 000	0.04%	350 , 000	0.1 8 %	-	-	Luodong High School	Director of Zhongde Industrial(Shanghai)Company Director of Youde Machinery(Shanghai)Company	no	no	no	no
Deputy General Manager	Xu Shiyu	male	Republic of China	10 8 .0 7 . 05	-	-	-	-	-	-	University of New BrunswickBA Napier UniversityMSc	no	no	no	no	no

Finance will be in charge	Shi Boru	male	Republic of China	10 9 . 03 . 1 1	12 , 262	0. 006 %	-	-	-	-	Bachelor of Accounting, Taiwan University St. John ’s University Master of Science in Accounting Deputy Manager of Audit Department of Qinye Zhongxin United Accounting Firm	no	no	no	no	no
Association management	Liu Junhong	male	Republic of China	103.01.01	70 , 9 30	0.0 4 %	-	-	-	-	Fengjia University	no	no	no	no	no
Association management	Lai Zhixian	male	Republic of China	104.07.01	9, 866	-	-	-	-	-	Department of Information Engineering, Fengjia University Director of Shixin Technology Co., Ltd. Deputy General Manager of Liyu Electronics Co., Ltd.	no	no	no	no	no

Note: When the general manager or equivalent (the top manager ) and the chairman are the same person, are spouses or relatives of a relative, they should disclose the reasons, rationality, necessity and corresponding measures ( such as increasing the number of

independent directors majority of the directors should not serve as employees or managers, etc. ) of relevant information

News.

Unit: Thousand Yuan

2020.12.31

3 . Recent years to pay the directors, supervisors, general manager and deputy general manager and other remuneration

( 1) Remuneration of general directors and independent directors ( individual disclosure of name and remuneration method )

job title	Name	Directors' remuneration	Directors' remuneration	Directors' remuneration	Directors' remuneration	Directors' remuneration	Directors' remuneration	Directors' remuneration	Directors' remuneration	The proportion of the total amount ofA,B,CandD in thenet profit after tax(%)	The proportion of the total amount ofA,B,CandD in thenet profit after tax(%)	Part-time employees receive relevant remuneration	Part-time employees receive relevant remuneration	Part-time employees receive relevant remuneration	Part-time employees receive relevant remuneration	Part-time employees receive relevant remuneration	Part-time employees receive relevant remuneration	Part-time employees receive relevant remuneration	Part-time employees receive relevant remuneration	A,B,C,D,E,FandGand other seven items accounted for the proportion of net profit after tax(%)	A,B,C,D,E,FandGand other seven items accounted for the proportion of net profit after tax(%)	Receive remuneration from non-subsidiary reinvestment business or parent company
		Remuneration(A)		Retirement pension(B)		Directors' remuneration (C) (Note1)		Business execution Cost(D)				Salary, bonus and Special expenses etc.(E)		Retirement pension(F)		Employee compensation(G)
		Our company	All companies in the financial report	Our company	All companies in the financial report	Our company	Financial report Office Company	Our company	All companies in the financial report	Our company	All companies in the financial report	Our company	Financial report Office Company	Our company	All companies in the financial report	Our company		All companies in the financial report		Our company	All companies in the financial report
																cash Amount	stock Amount	cash Amount	stock Amount
Corporate director	Things Xin Technology(shares)Company	-	-	-	-	-	-	175	175	-0.15%	-0.15%	-	-	-	-	-	-	-	-	-0.15%	-0.15%	-
Corporate director	Win Yong Investment Co., Ltd							370	370	-0.31%	-0.31%									-0.31%	-0.31%
Representative of legal person director(chairman)	Liao Wenjia	-	-	-	-	-	-	600	600	-0.51%	-0.51%	3,877	9,264	-	-	-	-	-	-	-3.77%	-8.31%	7 , 831
Representative of corporate director	Lin Qiquan	-	-	-	-	-	-	-	-	-	-	2,978	2,978	108	108	-	-	-	-	-2.60%	-2.60%	-
Representative of corporate director	Xu Yonghao	-	-	-	-	-	-	360	360	-0.30%	-0.30%	-	-	-	-	-	-	-	-	-0.30%	-0.30%	-
Representative of corporate director	Huang Yixian							-	-	-	-	3,978	3,978	108	108					-3.44%	-3.44%
Representative of corporate director	Zeng Xueqing(Resigned)	-	-	-	-	-	-	175	175	-0.15%	-0.15%	-	-	-	-	-	-	-	-	-0.15%	-0.15%	8 31
director	Sheng Haitian(Resigned)	-	-	-	-	-	-	117	117	-0.10%	-0.10%	-	-	-	-	-	-	-	-	-0.10%	-0.10%	-
Independent Director	Lai Jun Liang	-	-	-	-	-	-	600	600	-0.51%	-0.51%	-	-	-	-	-	-	-	-	-0.51%	-0.51%	-
Independent Director	Wu Qingsong	-	-	-	-	-	-	1,200	1,200	-1.01%	-1.01%	-	-	-	-	-	-	-	-	-1.01%	-1.01%	-
Independent Director	Liang Yihong							185	185	-0.16%	-0.16%	-	-	-	-	-	-	-	-	-0.16%	-0.16%
1.Please describe the policy, system, standards and structure of independent directors ’remuneration payment, and describe the relevance to the amount of remuneration according to the responsibilities, risks, time invested and other factors: the monthly remuneration of independent directors is not higher than NTD 150,000 yuan, the chairman 's remuneration for the whole year will be approved by the board of directors based on the academic background of the independent directors , the contribution to the company's operation and management, and the attendance rate. 2.In addition to the disclosures in the above table, the directors of the company in the most recent year have received remuneration for providing services to all companies in the financial report(such as serving as consultants for non- employees): none.

＊ The content of the remuneration disclosed in this table is different from the income concept of the income tax law, so the purpose of this table is for information disclosure, not for taxation purposes

(2) Remuneration of the supervisor ( individual disclosure of name and remuneration method )

Unit: Thousand Yuan

2020.12.31

job title	Name	Supervisor's remuneration	Supervisor's remuneration	Supervisor's remuneration	Supervisor's remuneration	Supervisor's remuneration	Supervisor's remuneration	The proportion of the total amount ofA,BandC in thenet profit after tax(%)	The proportion of the total amount ofA,BandC in thenet profit after tax(%)	Receive from Subsidiary Foreign investment Career or mother Company remuneration
		Remuneration(A)		Remuneration(B) (Note)		Business execution(C)
		Our company	All companies in the financial report	Our company	All companies in the financial report	Our company	All companies in the financial report	Our company	All companies in the financial report
Supervisor	Zhu Yongda(Resigned)	-	-	-	-	117	117	-0.10%	-0.10%	-
Supervisor	Li Huiqin(Resigned)	-	-	-	-	117	117	-0.10%	-0.10%	-
Corporate supervisor	Shi Jie Investment Co.Division(Resigned)	-	-	-	-	58	58	-0.05%	-0.05%	-
Representative of legal person supervisor	Wu Xiubi(Resigned)	-	-	-	-	-	-	-	-	-

＊ The content of the remuneration disclosed in this table is different from the income concept of the income tax law, so the purpose of this table is for information disclosure, not for tax

purposes.

(3) Remuneration of the general manager and deputy general manager (together with the method of disclosing names in a coordinated manner) Unit: Qian

2020.12.31

Yuan

job title	Name	Salary(A)	Salary(A)	Retirement pension(B)	Retirement pension(B)	Bonus and Special expenses , etc. (C)	Bonus and Special expenses , etc. (C)	Employee compensation amount( D)	Employee compensation amount( D)	Employee compensation amount( D)	Employee compensation amount( D)	Proportion of the total amount ofA,B,CandD in thenet profit after tax (%)	Proportion of the total amount ofA,B,CandD in thenet profit after tax (%)	Receive from Subsidiary Foreign investment Career or mother Company remuneration
		Our company	All companies in the financial report	Our company	All companies in the financial report	Our company	All companies in the financial report	Our company		In the financial report All companies		Our company	In the financial report All companies
								cash Amount	stock Amount	cash Amount	stock Amount
Total by manager	Huang Yixian	7,714	7,714	411	411	3,311	3,311	-	-	-	-	-9.63%	-9.63%	no
Executive Vice President	Li Mingzhe
Deputy General Manager	Lin Chengwei
Deputy General Manager	Wu Hongming

Remuneration scale

Remuneration scale
Remuneration level for each general manager and deputy general manager of the company	Name of General Manager and Deputy General Manager
	Our company	All companies in the financial report
Lessthan1,000,000yuan	-	-
1,000,000yuan (inclusive) ~2,000,000yuan (excluding)	-	-
2,000,000yuan (inclusive) ~3,500,000yuan (excluding)	Li Mingzhe , Wu Hongming Lin Chengwei	Li Mingzhe , Wu Hongming Lin Chengwei
3,500,000yuan (inclusive) ~5,000,000yuan (excluding)	Huang Yixian	Huang Yixian
5,000,000yuan (inclusive) ~10,000,000yuan (excluding)	-	-
10,000,000yuan (inclusive) ~15,000,000yuan (excluding)	-	-
15,000,000yuan (inclusive) ~30,000,000yuan (excluding)	-	-
30,000,000yuan (inclusive) ~50,000,000yuan (excluding)	-	-
50,000,000yuan (inclusive) ~100,000,000yuan (excluding)	-	-
100,000,000yuan or more	-	-
total	4	4

＊ The content of the remuneration disclosed in this table is different from the income concept of the income tax law, so the purpose of this table is for information disclosure, not for tax purposes.

2020.12.31

(4 ) The remuneration of the top five remuneration executives of listed OTC companies (individual disclosure of name and remuneration method) Unit: Qian Yuan

job title	Name	Salary(A)	Salary(A)	Retirement pension(B)	Retirement pension(B)	Bonus and Special expenses (C)	Bonus and Special expenses (C)	Employee compensation amount(D)	Employee compensation amount(D)	Employee compensation amount(D)	Employee compensation amount(D)	Proportion of the total amount ofA,B,CandD in thenet profit after tax (%)	Proportion of the total amount ofA,B,CandD in thenet profit after tax (%)	Receive from Subsidiary Foreign investment Career or mother Company remuneration
		Our company	All companies in the financial report	Our company	All companies in the financial report	Our company	All companies in the financial report	Our company		In the financial report All companies		Our company	In the financial report All companies
								cash Amount	stock Amount	cash Amount	stock Amount
Total by manager	Huang Yixian	2,378	2,378	108	108	1,600	1,600	-	-	-	-	-3.44%	-3.44%	no
Executive Vice President	Li Mingzhe	2,378	2,378	108	108	600	600	-	-	-	-	-2.60%	-2.60%	no
Deputy General Manager	Lin Chengwei	2,138	2,138	108	108	678	678	-	-	-	-	-2.46%	-2.46%	no
Deputy General Manager	Wu Hongming	1,779	1,779	108	108	415	415	-	-	-	-	-1.94%	-1.94%	no
Special Assistant to the Chairman	Lin Qiquan	1,419	1,419	87	87	618	618	-	-	-	-	-1.79%	-1.79%	no

＊ The content of the remuneration disclosed in this table is different from the income concept of the income tax law, so the purpose of this table is for information
disclosure, not for tax purposes.

( 5 ) Name and distribution of managers who distribute employee compensation

Unit: Thousand Yuan 2020.12.31

						2020.
	The post said	Surname name	Stock amount	Cash amount	The total count	The proportion of total amount to net profit after tax(%)
through Manage people	General manager	Huang Yixian	-	-	-	-
	Executive Vice President	Li Mingzhe
	Deputy General Manager	Lin Chengwei
	Deputy General Manager	Wu Hongming
	Associate	Liu Junhong
	Associate	Lai Zhixian
	Accounting Supervisor	Shi Boru

1. Compare and explain the analysis of the ratio of the total remuneration paid by the company and all the companies in the consolidated report to the directors, supervisors, general managers and deputy general managers of the company to the net profit after tax of the individual or individual financial reports in the most recent two years, and explain the policy of payment of remuneration , Standards and portfolios, procedures for setting remuneration, and relevance to operating performance and future risks.

2. (1) The proportion of total remuneration to net profit after tax

job title	Our company	Our company	All companies in the consolidated report	All companies in the consolidated report
	2019	2020	2019	2020
director	-3.57%	-12.49%	-5.35%	-17.02%
Supervisor	-0.22%	-0.25%	-0.22%	-0.25%
General Manager and	-4.01%	-9.63%
			-4.05%	-9.63%

-1-

Deputy General
Manager

(2) The company's remuneration policy

The remuneration of the company's board of directors and supervisors includes the remuneration of the board of directors and supervisors for the carriage fee and surplus distribution. In terms of vehicle and horse fees, those who do not take up positions in the company will receive the vehicle and horse fees according to the resolution of the board of directors. Remuneration of directors and supervisors will be handled in accordance with the provisions of Articles 17 and 20 of the company's articles of association. The remuneration of directors and supervisors shall be authorized by the board of directors according to the degree of participation and contribution value of the directors and supervisors to the operation of the company, and shall be negotiated with reference to the standard of domestic and international industry. In addition, according to the company ’s pre-tax profits deducting the distribution of employees ’ compensation and the benefits before directors’ and supervisors ’ compensation, 1% to 10% of the employees’ compensation should be allocated by the board of directors through stock or cash distribution. Qualified employees of the company; the company is able to open the profit amount, and no more than 3% of the board of directors' resolution shall be remunerated by the director and supervisor, and will be paid in cash only. Employee compensation and the distribution of compensation for directors and supervisors shall be reported to the shareholders' meeting. However, when the company still has accumulated losses, it should first set aside to make up for the losses. The remuneration of the general manager and deputy general manager includes salaries, bonuses, special expenses and employee bonuses, etc. It is determined based on the positions held and the responsibilities undertaken, with reference to the standards of the industry .

( 3 ) Corporate governance operations

1. The operation of the board of directors

From January 1, 2020 to May 26, 2020, the tenth session of the board
of directors met 3 【A】 times, and the directors’ attendance was as
follows:

	job title	Name	Actual out(column) Number of seats【B】	Delegated attendance	Actual(column)seats Rate(%)[B/A]	Remarks

-2-

Chairman	hixin Technology Co., Ltd. Representative: Liao Wenjia	2	1	67%
director	hixin Technology Co., Ltd. Representative: Zeng Xueqing	3	-	100%
director e	hixin Technology Co., Ltd. presentative: Xu Yonghao	3	-	100%
director	hixin Technology Co., Ltd. Representative: LinQiquan	3	-	100%
director	Sheng Haitian	3	-	100%
Independent Director	Wu Qingsong	3	-	100%
Independent Director	Lai Jun Liang	3	-	100%

From May 27, 2020 to December 31, 2020, the eleventh board of directors
met 5 【A】times, and the directors attended the meeting as follows:

job title	Name	Actual out(column) Number of seats【B】	Delegated attendance	Actual(column)seats Rate(%)[B/A]	Remarks
Chairman	Win Yong Investment Co., Ltd Representative: Liao Wenjia	5	-	100%
director	Win Yong Investment Co., Ltd Representative: HuangYixian	5	-	100%
director	Win Yong Investment Co., Ltd Representative: Xu Yonghao	5	-	100%

-3-

director	Win Yong Investment Co., Ltd Representative: LinQiquan	5	-	100%
Independent Director	Liang Yihong	5	-	100%
Independent Director	Wu Qingsong	5	-	100%
Independent Director	Lai Jun Liang	5	-	100%
Other matters to be recorded: 1. The operation of the board of directors in any of the following situations shall state the date, period, content of the proposal, the opinions of all independent directors and the company's handling of the opinions of independent directors: ( 1 ) of the Securities Exchange Act 14 Article 3 matters listed: None. ( 2 ) In addition to the pre-opening matters, other directors' meeting decisions that have been opposed or reserved by independent directors and have records or written statements: None. 2. The implementation of the director’s avoidance of the interested proposal should state the name of the director, the content of the proposal, the reason for the avoidance of interest, and the voting situation: The independent director of "Liang Yihong" at the 2020/12/14 board meeting proposed the "New Independent Director's Compensation Proposal" because of direct reasons The financial interests were evaded, and the remaining directors in attendance unanimously agreed to pass the case. 3. The listed company shall disclose the evaluation cycle and period, evaluation scope, method and evaluation content of the self- (or peer) evaluation of the board of directors, and fill in the attached table of the implementation of the board of directors evaluation. 4. The objectives of strengthening the functions of the board of directors in the current and recent years (such as setting up an audit committee, enhancing information transparency, etc.) and implementation evaluation: In order to enhance the professional knowledge of directors and supervisors and implement corporate governance, the company arranged refresher courses for directors and supervisors in 109years.

Evaluation of the implementation of the board of directors

Evaluation cycle	During evaluation	Assessment scope	Evaluation method	Evaluation content
Once a year	To the board of directors The performance from January 1 to December 31, 2020 will be evaluated.	Includes performance evaluation of the board of directors and individual directors	Board member self- evaluation	A. Mastering the company's goals and tasks B. Director's responsibilities C. Degree of participation in company operations

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D. Internal
relationship
management	and
communication
E. Directors'
Professional	and
Continuing
Education
F. Internal
Control

Individual directors implement the board diversity policy

• A. Professionalism and independence of the board of directors:

• The company has a nomination committee and adopts a candidate nomination system. All director candidates are nominated and qualified by the nomination committee, and after the resolution of the board of directors is passed, they are submitted to the shareholders meeting for election. According to Article 20 of the Company's "Code of Practice on Corporate Governance", board members should generally possess the knowledge, skills and literacy necessary to perform their duties. In order to achieve the ideal goal of corporate governance, the overall board of directors should have the following capabilities:

• Operational judgment ability.

• Accounting and financial analysis capabilities.

• Operation and management capabilities.

• Crisis management capabilities.

• Industry knowledge.

• International market outlook.

• Leadership.

• Decision-making ability.

• B. Board diversity

• In order to strengthen corporate governance and promote the sound development of the composition and structure of the board of directors, Article 20 of the Company's "Code of Practice on Corporate Governance" states that the composition of the board of directors should focus on gender equality.

• The current board of directors of the company consists of 7 directors, including 4 directors and 3 independent directors. The members have extensive experience and expertise in finance, business and management. In addition, the company also pays attention to gender equality in the composition of the board of directors. The target ratio of female directors is 20% or more. At present, there is 1 female director among the seven directors, which is 14%.

Implementation of diversity of board members:

Name	gender	Operati onal judgme nt	Accounting and financial analysis capabilities	Management ability	Crisis management capabilities	Industry knowledge	International market view	leadership	Decision- making capacity
Liao Wenjia	male	V		V	V	V	V	V	V

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Lin Qiquan	Male	V		V	V	V	V	V	V
Xu Yongha o	Male	V		V	V	V	V	V	V
Huang Yixian	female	V	V	V	V	V	V	V	V
Lai Jun Liang	Male		V		V	V	V	V	V
Wu Qingso ng	Male				V	V	V	V	V
Liang Yihong	male		V		V	V	V	V	V

2. Supervisors and audit committee operations

From January 1, 2020 to May 26, 2020, the tenth board of directors met 3 【A】 times, and the supervisors were present as non-voting delegates:

job title	Name	Actual out(column) Number of seats 【B】	Delegated attendance	Actual(column)s eats Rate(%)[B/A]	Remarks
Supervisor	Zhu Yongda	3	-	100%
Supervisor	Li Huiqin	2	1	67%
Supervisor	Jie Shi Investmen t Co., Ltd. Representative: Wu Xiubi	3	-	100%

From May 27, 2020 to December 31, 2020, the first session of the Audit Committee met 2 [A] times, and the audit committees attended the meeting as follows:

job title	Name	Actual out(column) Number of seats 【B】	Delegated attendance	Actual(column)s eats Rate(%)[B/A]	Remarks
Independent Director	Liang Yihong	2	-	100%
Independent Director	Wu Qingsong	2	-	100%
Independent Director	Lai Jun Liang	2	-	100%
Other matters to be recorded: 1.If the operation of the audit committee is under any of the following circumstances, the date and period of the board of directors, the content of the proposal, the results of the audit committee’s resolutions, and the company’s handling of the audit committee’s opinions should be stated: (1) Items listed in Article 14-5 of the Securities Exchange Act: None (2) Except for the previous matters, other matters that have not been approved by the audit committee and agreed bymore than two-thirds of all directors: none

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1. The implementation status of independent directors' avoidance of an interest proposal shall state the name of the independent director, the content of the proposal, the reasons for the avoidance of interests, and the voting status: none.

2. Communication between independent directors and internal audit supervisors and accountants (should include major matters, methods and results of communicating the company’s financial and business conditions): the company’s audit supervisors submit audit reports to independent directors every month, and independent The directors have a smooth communication channel with the internal audit supervisor and certified accountants. If there are special matters, they can fully discuss and deal with them appropriately.

Audit committee meeting date, proposal content and resolution result

Period	Meeting date	Proposal content	Resolution result
1st The Audit Committee 2020 years 1st meeting	2020.08.07	1. Consolidated financial statements for the second quarter of 2020. 2. Revise the "Organizational Rules of the Audit Committee" of the company. 3. The case of endorsement of guarantee quota to the company's reinvestment company.	All the members present unanimously agreed to pass all the proposals.
1st The Audit Committee 2020 years 2nd meeting	2020.11.10	1. The company's fund loan case to its subsidiary Zhongde Industrial Co., Ltd. (Shanghai). 2. The company's purchase of production equipment from its subsidiary Yude Industrial Co., Ltd. 3. The company's "internal auditor appointment, dismissal, assessment, and remuneration method" has been finalized. 4. The revision of the company's internal control system. 5. 2021 auditplan.	All the members present unanimously agreed to pass all the proposals.
1st The Audit Committee 2021 year 1st meeting	2021.03.09	1. Individual financial report for 2020. 2. The 2020 consolidated financial report and business report proposal. 3. Supplementary proposal for 2020 profit and loss appropriation. 4. The case of capital public reserve allocating cash dividends. 5. The internal control self-inspection case for 2020. 6. Appraisal and appointment of the independence and objectivity of certified public accountants. 7. Amendments to the company's internal	All the members present unanimously agreed to pass all the proposals.

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Period	Meeting date	Proposal content	Resolution result
		control system.
1st The Audit Committee 2021 year 2nd meeting	2021.04.13	1. Amendments to the "Articles of Association" of the company. 2. The company's "fund loan and others' operating procedures" amendment. 3. Abandoning the subscription of the capital increase case of Yude Industrial Co., Ltd.,a future subsidiary.	All the members present unanimously agreed to pass all the proposals.

3 . Company's operations and governance situation and the reasons for the differences in the case of publicly traded corporate governance codes of practice:

evaluation items	Operational situation	Operational situation	Operational situation	Differences and Reasons for Governance Code of Practice for Listed Companies
	Yes	no	Summary description
1. Does the company formulate and expose the corporate governance code of practice in accordance with the“Listed OTC Corporate Governance Code of Practice”?	V		The Company has formulated the“Code of Corporate Governance Practices”by the resolution of the Board of Directors , and it has been disclosed on public information observatories and company websites.	No difference.
2. The company's shareholding structure and shareholders' equity (1) Has the company established internal operating procedures to handle shareholder suggestions, doubts, disputes and litigation matters, and implement them in accordance with the procedures? (2) Does the company have the actual controlling company's main shareholders and the final list of main shareholders?	V V V V		( 1 ) The company has a dedicated person responsible for related matters. If legal issues are involved, the legal department will be asked to deal with them. ( 2 ) The company committee is under the responsibility of a professional stock affairs agency, and regularly declares and exposes the list of major shareholders and the ultimate controller of the major shareholders according to law, and has good relations with the major shareholders, and has control at any time. ( 3 ) The company has ordered the monitoring operation of the stator company and executed it.	No difference. No difference. No difference. No difference.

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evaluation items	Operational situation	Operational situation	Operational situation	Differences and Reasons for Governance Code of Practice for Listed Companies
	Yes	no	Summary description
(3) Has the company established, implemented and implemented risk control and firewall mechanisms with related companies? (4) Does the company formulate internal regulations to prohibit insiders of the company from using unpublished information in the market to buy or sell securities?			( 4 ) The company's resolution on the board of directors stipulates "internal major information processing operations and prevention of internal transaction management operating procedures", in order to regulate insiders' securities trading behavior.
3. The composition and responsibilities of the board of directors (1) Does the board of directors formulate a diversified policy on the composition and implement it? (2) In addition to setting up a salary and compensation committee and an audit committee according to law, does the company voluntarily establish other types of	V V	V	(A) the Company under the "Corporate Code of Practice governance" requirements, the implementation of the members of the Board of Directors yuan policy , in addition to a female member had Xueqing director specializes in the management field, the Sheng Haitian director specializes in financial accounting field, Lin Qiquan directors and Liaowen Jia, chairman market situation familiar machine tool industry , Xu Yonghao director specializing in the aerospace market and related fields , the other two independent directors Wu Qingsong directors and Lai Jun Liang independent directors are specialize in mergers and acquisitions and mechanical technology field, board members are all different areas of expertise expert. (B) the company currently does not voluntarily set up other various Functional Committee. (C)the companycurrentlyhas laid	No difference. Related functional committees will be set up for necessary functions in the near future.

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evaluation items	Operational situation	Operational situation	Operational situation	Differences and Reasons for Governance Code of Practice for Listed Companies
	Yes	no	Summary description
functional committees? (C) Does the company provide for board performance assessment methods and assessment methods, and conduct performance appraisal on a regular basis each year , and the results of the performance evaluation mention the board of directors, and applied to the individual as Director of the salary remuneration and nomination reference ? (4) Does the company regularly assess the independence of visa accountants?	V		Directors Council approach to performance evaluation , performance evaluation on a regular basis each year , and the results of the performance evaluation mention the board of directors, and applied to pay remuneration of individual directors and re-appointment of the nomination of reference . (4) The company evaluates the professionalism and independence of the visa accountant once a year. After evaluation by the accounting department of the Company, Chen Peide and Zhong Liwen , both of Qinye Zhongxin United Certified Public Accountants, met the company's independence assessment standards ( Note 1) , and they were able to serve as the company's visa accountants. The accounting firm issued a statement letter(Note 2) ).	No difference. No difference.
Fourth, the publicly traded company if with a set of competency and appropriate number of corporate governance officers , and designated corporate governance director, responsible for corporate governance related matters (including, but not limited to, providing directors and supervisors perform the required business information, assistance director, supervisor Compliance with laws and regulations, handling matters related to the meetings of the board of directors and the shareholders 'meeting, handlingcompanyregistration	V		The Company chairman of the chamber group consists of corporate governance , the general manager Huang Yixian served as convener of corporate governance , Huang , general manager already has a public company engaged in financial, Shareholder Services, Procedure and other management experience of more than three years. Corporate governance group duties to provide directors and independent directors of the information required to perform operations, the Association to help directors and independent directors to follow the decree, for the board of directors and shareholders meetings related matters according to law.	108 years of business execution are as follows : 1. Arrange for refresher courses for directors. 2. Apply for liability insurance for directors and managers. 3. Handle all matters convened by the board of directors accordingto law. 4. Handle all

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evaluation items	Operational situation	Operational situation	Operational situation	Differences and Reasons for Governance Code of Practice for Listed Companies
	Yes	no	Summary description
and change registration, making the board of directors and shareholders' meeting minutes, etc.			matters of the shareholders' general meeting according to law. 5.108 Annual shareholders' meeting adopted electronic voting matters. 6. Be responsible for and implement the establishment of diversified communication channels with investors. 7. The assistance of various major operational matters and the revision of management measures ( such as the assessment and execution of fund lending and the revision of the operating procedures for obtaining or disposingof assets).
5. Has the company established a communication channel with stakeholders ( including but not limited to shareholders, employees, customers, suppliers, etc. ) , and set up a stakeholder area on the company's website, and properly responded to the important corporate social concerns of stakeholders Responsibilityissues ?	V		The company has established communication channels with stakeholders on the website, and properly responded to the important corporate social responsibility issues that stakeholders are concerned about.	No difference.
6. Does the company appoint a professional stock agency to handle the shareholders' meeting?	V		The company appoints KGI Securities Co., Ltd. to handle shareholders' affairs.	No difference.
7. Information disclosure (1) Does the company set up a website to disclose financial business and corporate governance information? (2) Does the company adopt other methods of information disclosure(such as settingup	V V	V	( 1 ) All information that should be disclosed by the company is announced at the public information observatory and disclosed on the company's website. ( 2 ) The company has a dedicated person responsible for collecting information and exposing; and establishes a spokesperson system to publish the company's relevant financial business information.	No difference. No difference

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evaluation items	Operational situation	Operational situation	Operational situation	Differences and Reasons for Governance Code of Practice for Listed Companies
	Yes	no	Summary description
an English website, designating a special person to collect and disclose company information, implementing the spokesperson system, placing the company website during the legal person briefing, etc.)? (3) Does the company announce and declare the annual financial report within two months after the end of the fiscal year, and announce and declare the first, second, and third quarter financial reports and the monthly operating situation early within theprescribedperiod?			( Three ) company in 108 years after the end of the fiscal year 3 Yue 11 Ri announcement and file an annual financial report and before the time limit early announcement and declaration of the first, second, three quarters of financial reporting and operational circumstances of each month .	The company will study the possibility of announcing and reporting the annual financial report within two months after the end of the fiscal year
Eight , the company helps to understand whether there are other important information about the operation situation of corporate governance (including, but not limited to, employee rights, employee care, investor relations, case studies of supplier relationships, the rights of interested parties, directors and supervisors, The implementation of risk management policies and risk measurement standards, the implementation of customer policies, the company's purchase of liability insurance for directors and supervisors, etc.)	V		( 1 ) Employee rights and employee care: The company has always attached great importance to labor-management relations, embraces the idea that employees are company assets, takes full care of employee welfare, protects employees’legal rights and interests according to the labor-based law, establishes employee welfare committees, implements a pension system Set up labor safety and health management units according to laws and regulations, encourage employees to participate in various training courses and technical seminars, insure employees’group insurance, and arrange regular health checks. ( 2 ) Investor Relations: There is a special person responsible for handling matters related to investor relations, and the company's website also provides information related to investors to let investors understand the company's operating	No difference.

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evaluation items	Operational situation	Operational situation	Operational situation	Differences and Reasons for Governance Code of Practice for Listed Companies
	Yes	no	Summary description
			status. ( 3 ) Supplier relationship: The company has maintained a good relationship with its suppliers. ( 4 ) Rights of interested parties : interested parties may communicate and make suggestions with the company to safeguard their legitimate rights and interests. ( 5 ) The situation of the directors and supervisors' further training: The directors and supervisors of the company will be trained according to actual needs, such as corporate governance and internal control, corporate social responsibility and sustainable operation and investment forum, investor relations, functions and board of directors and supervisors. Quanshi , IFRSs , XBRL and other accounting supervisors and related laws and practices, insider equity trading laws and regulations, and other related courses, all training situations are exposed at the public information observatory. ( 6 ) Implementation of risk management policies and risk measurement standards: timely assessment of the product market, external economy, cash liquidity, etc., and efforts to reduce the company's possible risks. ( 7 ) Implementation of customer policies: The company has built a customer order and service management system to provide customers with faster and more convenient services. It also insures product liabilityinsurance toprotect customers' rights

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evaluation items	Operational situation	Operational situation	Operational situation	Differences and Reasons for Governance Code of Practice for Listed Companies
	Yes	no	Summary description
			and interests. ( Eight ) case purchase liability insurance for the directors and supervisors: the Company 10 8 years have purchased liability insurance for directors, supervisors and managers.
9. Please explain the improved situation of the corporate governance evaluation results released by the Taiwan Stock Exchange Co., Ltd. Corporate Governance Center in the most recent year, and propose priority enhancements and measures for those who have not yet improved: 1. To strengthen the structure of the Board of Directors, the Company has the corporate charter additional independent directors, independent directors also elected for mining nominating candidates, and in 10 6 the year Shareholders' Meeting comprehensive election of directors and supervisors, mining nominating candidates elected 2 Ming Independent director. 2. In order to strengthen equal treatment of shareholders, the Company since 106 years since regular shareholders meeting notice an increase in English, manual shareholders 'meeting and annual meeting of shareholders, and in addition to the annual report to shareholders before the shareholders' meeting 7 days uploaded to public information station outside, The notice of meeting and the shareholders’meeting manual are uploaded to the public information observatory simultaneously with the Chinese version. 3. To strengthen the operation of the Board, the Company has been in the 106 after the independent directors of the annual shareholders' meeting elected office, to strengthen its communication with the audit supervisor and accountant of the visa, and communication situations are exposed to the company's Web site. 4. In order to enhance the transparency of information, the company will expose the financial report in English , and plan to fully translate the company's website into English, mainly including financial, business and corporategovernance related information.

Note 1 : Evaluation criteria for accountant independence

With reference to Article 47 of the Law on Accountants and Bulletin No. 10 of the Code of Professional Ethics for Accountants , it is stipulated that:

project	result
1. As of the most recent visa operation, there has been no change for sevenyears.	■Yes□No
2. There is no significant financial interest with the client.	■Yes□No
3. Avoid any inappropriate relationship with the client.	■Yes□No
4. Accountants should ensure that their assistants are honest,fair and independent.	■Yes□No

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5. The financial statements of the service organization within two years before practicing shall not be checked for visas.	■Yes□No
6. The name of the accountant shall not be used byothers.	■Yes□No
7. Not holding shares of the company and related companies.	■Yes□No
8. There is no money loan with the company and related companies.	■Yes□No
9. There is no relationship with the company or related companies to jointly invest or share benefits.	■Yes□No
10. Not taking part in the regular work of the company or related companies, and receiving a fixed salary.	■Yes□No
11. Not involved in the management functions of the company or related companies to make decisions.	■Yes□No
12. Other businesses that may lose their independence without being concurrently operated.	■Yes□No
13. There is no spouse, direct blood relationship, direct in-law relationship or second-degree relationship with the company's management staff.	■Yes□No
14. No commissions related to the business are charged.	■Yes□No
15. So far, there has been no punishment or damage to theprinciple of independence.	■Yes□No
Evaluation result: The evaluation content of the above items conforms to the independence and objectivityof the accountant.

Note 2 : Statement letter issued by Qinye Zhongxin United Accounting Firm

10 . 9 .0 2 . 25 Qin Laid-10 901 622 Number Recipient: Ende Technology Co., Ltd.

Subject: The Institute entrusted to check your company's Republic of China 10 8 annual financial statements , in accordance with the National Federation of the Republic of China Society of Accountants' Code of Ethics No. tenth of integrity, impartiality and objectivity and independence "requirements, the audit team members declared in compliance with the following Norms, no violation of independence.

Said Ming : First, the audit team members and their spouses and relatives dependent by No the following situation things:

1. Hold direct or indirect significant financial interests of your company .

2. There is a business relationship with your company or its directors, supervisors and managers that affects independence.

Second, during the audit, the audit team members and their spouses and dependent parent belongs not serve your company's directors and supervisors, the manager or the

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audit cases have a direct and significant impact of the duties.

1. The members of the audit team do not have any relationship with the siblings, direct blood relatives, direct in-law relatives, or second-parent relatives of the company 's directors, supervisors or managers.

2. Members of the audit team have not received your company or its directors, supervisors, managers or major shareholders of great value or gifts (the value does not exceed the general social etiquette standards).

3. The members of the audit team have implemented the necessary independence / conflict of interest procedures and found no violations of independence or unresolved conflicts of interest.

Qinye Zhongxin United Accounting Firm

Accountant Chen Pei Tak

Accountants Guo Li Wen

4 . Public Division set salary compensation committee of its composition, mandate and operational situations:

(1) Composition of the salary and comp

Body part	conditio n Name	Do you have more than five years of work experience And the following professional qualifications	Do you have more than five years of work experience And the following professional qualifications	Do you have more than five years of work experience And the following professional qualifications	Meet the independence situation (Note)	Meet the independence situation (Note)	Meet the independence situation (Note)	Meet the independence situation (Note)	Meet the independence situation (Note)	Meet the independence situation (Note)	Meet the independence situation (Note)	Meet the independence situation (Note)	Meet the independence situation (Note)	Meet the independence situation (Note)	Number of members of the salary and compensatio n committee of other public issuing companies	Remark s
		Lecturer or above in public or private colleges and universitie s in business, legal affairs, finance, accountin g or company business	Judges, prosecutors , lawyers, accountants or other professional and technical personnel with national examinatio ns and certificates required for the company's business	Work experienc e required for business, legal affairs, finance, accountin g or company business	1	2	3	4	5	6	7	8	9	1 0
Independe nt Director	Wu Qingson g	V			V	V	V	V	V	V	V	V	V	V	3	-
Independe nt Director	Lai Jun Liang	V			V	V	V	V	V	V	V	V	V	V	0	-
Independe	Liang	V			V	V	V	V	V	V	V	V	V	V	0	-

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nt Director Yihong

Note: Each member meets the following conditions during the two years prior to election and during his tenure:

1. Not employed by the company or its affiliates.

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

3. Non-their spouses, minor children or others on behalf of the holders of the issued shares of the total number of 1% or more, or individual shareholders of the top ten holdings. 4. Not a manager listed in (1) or a spouse, relative within the second parent, or a direct blood relative within the third parent of the person listed in (2) or (3) .

4. Directors, supervisors or directors of corporate shareholders who do not directly

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

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

2. Directors ( directors ) , supervisors ( supervisors ) or servants of other companies or institutions who are not the same person or spouse with each other and are the same person or spouse of the company's chairman, general manager or equivalent ( but if the company and its parent company, subsidiaries (Or independent directors established by subsidiaries of the same parent company in accordance with this law or local national laws shall concurrently serve, shall not be limited to this ) .

3. The company has a director and non-specific companies or financial institutions or the business of (director), supervisors (supervisors), managers or shareholders holding 5% or more shareholders (but specific companies or institutions such as the total number of issued shares of the company held by 20% The above does not exceed 50% , and the independent directors established by the company and its parent company, subsidiary company or subsidiary of the same parent company in accordance with this law or local national laws and regulations concurrently serve each other, not limited to this) .

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

5. There is no one of the circumstances in Article 30 of the Company Law .

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• (2) Responsibilities: Implement policies and measures to review the performance evaluation of the company's directors, supervisors and managers and review salary and remuneration.

• (3) Information on the operation of the salary and compensation committee

• There are 3 members of the company's remuneration committee . Second, the term of office of the current members: 106 Year 6 Yue 19 to 109 years 6 Yue 18 Ri The most recent (10 8 ) annual salary and compensation committee met three times ( A ) . The qualifications and attendance of the committee members are as follows:

job title	Name	Actual attendance ( B )	Delegated attendance	Actual attendance rate ( Note) ( Β / Ａ)	Remarks
convener	Wu Qingsong	3	-	100%
Committee member	Lai Jun Liang	3	-	100%
Committee member	Liang Yihong	3	-	100%
Other matters to be recorded: 1. If the board of directors does not adopt or amend the recommendations of the salary and compensation committee, it shall state the date, period, resolutions, resolutions of the board of directors, and the company's handling of the salary and compensation committee's opinions ( such as the salary compensation approved by the board is better than the salary and compensation committee The suggestion should state the difference and the reason ) : None. 2. If the member has objections or reservations and has a record or written statement, the date and period of the salary and compensation committee, the content of the proposal,all members 'opinions and the treatment of the members' opinions: None.

• Note 1 : The resignation of members of the Remuneration and Compensation Committee before the end of the year should indicate the date of resignation in the remarks column. The actual attendance rate (%) is calculated based on the number of meetings of the Remuneration and Compensation Committee during their tenure and the actual number of attendance.

• Note 2 : Before the end of the year, if the remuneration committee is reelected, the new and old members of the remuneration committee should be filled in, and the remarks column indicates that the member is old, new or re-elected and the date of re-election. The actual attendance rate (%) is calculated based on the number of meetings of the Remuneration and Compensation Committee during his tenure of office and his actual number of attendance.

Salary and Compensation Committee meeting date, proposal content and resolution result

Period	Meetingdate	Proposal content	Resolution result
The 3rd Salary and Compensation	2020.03.05	1. The actual amount of year-end bonus for managers in 2019. 2. Review of the adjustment of the manager's	All the members present

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Period	Meetingdate	Proposal content	Resolution result
Committee 2020 year 1st meeting		salary.	unanimously agreed to pass all the proposals.
The 4th Salary and Compensation Committee 2020 year 1st meeting	2020.12.14	1. Approve the remuneration of newly appointed independent directors.	Except for member Liang Yihong who evaded due to direct financial interests, the other directors present unanimously agreed to pass the case.

1. Situations and reasons for fulfillment of social responsibility and differences with the corporate social responsibility codes of practice of listed companies

evaluation items	Operational situation	Operational situation	Operational situation	Differences and causes of differences with listed companies' corporate social responsibility practices
	Yes	no	Summary description
1. Does the company conduct risk assessments on environmental, social and corporate governance issues related to the company's operations in accordance with the principle of materiality , and formulate relevant risk management policies or strategies?		V	The company has not yet formulated relevant risk management policies or strategies .	The company will determine according to actual needs.
2. Does the company set up a full-time (part-time) unit that promotes corporate social responsibility, and the board of directors authorizes high-level management to handle it, and reports the handling situation to the board of directors?		V	The company has not set up related units. However, the company will continue to practice corporate social responsibility .	The company will set according to actual needs.

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evaluation items	Operational situation	Operational situation	Operational situation	Differences and causes of differences with listed companies' corporate social responsibility practices
	Yes	no	Summary description
3. Environmental issues (1) Does the company establish an appropriate environmental management system according to its industrial characteristics? (2) Is the company committed to improving the utilization efficiency of various resources and using recycled materials with low impact on environmental load? (3) Does the company assess the potential risks and opportunities of climate change to the company now and in the future, and take measures to cope with climate- related issues? (4) Does the company count greenhouse gas emissions, water consumption and total weight of waste in the past two years, and formulate policies for energy saving and carbon reduction, greenhouse gas reduction, water use reduction or other waste management?	V V	V V	(1 ) The company has formulated a safety and health work manual, and followed the relevant regulations to maintain the working environment and the natural environment. (2) The company has appointed a waste removal permit agency to be responsible for recycling. (3) The company has not yet assessed the potential risks and opportunities of climate change to the company now and in the future (4) The company has not yet counted greenhouse gas emissions, water consumption and total weight of waste in the past twoyears .	No difference No difference The company will assess the actual needs . The company will count according to actual needs .
4. Social issues (1) Has the company formulated relevant management policies and procedures in accordance with relevant regulations and international human rights conventions? (2) Does the company formulate and implement reasonable employee welfare measures (including compensation, vacation and other benefits), and appropriately reflect the operating performance or results in employee compensation? (3) Does the company provide a safe and healthy working environment for employees and regularly implement safetyand health education for	V V V		(1) The company has formulated relevant management policies and procedures in accordance with relevant regulations and international human rights conventions . (B) This company has laid implement reasonable and staff welfare measures (including salary, vacation and other benefits, etc.), and business performance efficiency or achievements appropriately reflected in employee	No difference No difference No difference

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evaluation items	Operational situation	Operational situation	Operational situation	Differences and causes of differences with listed companies' corporate social responsibility practices
	Yes	no	Summary description
employees? (4) Does the company establish an effective career development training program for employees? (V) Has the company complied with relevant laws and international standards regarding customer health and safety, customer privacy, marketing and labeling of products and services, and has formulated relevant consumer protection policies and appeal procedures? (6) Does the company formulate supplier management policies that require suppliers to follow relevant regulations on environmental protection, occupational safety and health, or labor human rights, and their implementation?	V V V		compensation. (3) The company has formulated a safety and health work manual, set up labor safety and health management units, and regularly implement safety and health education for employees . (4) The company has established an effective career development training program for employees . (E) The Company customers products and services of health and safety, customer privacy, marketing and labeling, the Department of relevant international norms and regulations to follow, and the development of relevant consumer protection policies and grievance procedures. (VI) The company has formulated a supplier management policy that requires suppliers to follow relevant regulations on environmental protection, occupational safety and health or labor human rights, and their implementation .	No difference No difference No difference
5. Does the company refer to internationally-used report preparation standards or guidelines to prepare corporate social responsibility reports and other reports that disclose the company's non-financial information? Did the pre- report report obtain the confidence or		V	At present, there are no reports such as corporate social responsibility reports that disclose the company's non- financial information .	The company will prepare according to actual needs .

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evaluation items	Operational situation	Operational situation	Operational situation	Differences and causes of differences with listed companies' corporate social responsibility practices
	Yes	no	Summary description
assurance opinion of the third-party verification unit?
6. According to the company as the "Code publicly traded company CSR practices' given socially responsible corporate codes of themselves, please stating its operation and the set difference of the Code of situations: None.
7. Other important information that helps to understand the operation of corporate social responsibility: (1) The company has appointed a dedicated agency to be responsible for the removal and disposal of wastes, waste container recycling, etc., and is committed to enhancing the environmental protection of all employees. (2) The company regularly donates to local offices such as town offices and police to give back to society, (3) The company has insured employee group insurance, formulated a safety and health work manual, set up labor safety and health management units, and regularly implemented safety and health education . (4) the Company than 10 8 years 5 Yue 19 Ri organize " Third Miaoli Cup after Long-cum-road race walking public service ", attracted nearly two thousand runners participated. In addition to helping to promote tourism through sports events, Ende Group also donated 300,000 yuan to the Miaoli County Private Youan Education Center, the Miaoli County Private New Miao Development Center and the St. Fangji Nursery School to give substantial support and encouragement We are concerned about issues such as local long-term care and child education, so that the spirit of public welfare can be inherited and sustainable. ( 5 ) The epidemic situation of New Coronary Pneumonia raged all over the world. In order to strengthen the protection of frontline medical staff from virus threats , the company donated 300 sets of "Taiwan BOX" epidemic prevention boxes to all hospitals in Taiwan through the Pingtung County Government in April 109 .
8. If the company's corporate social responsibility report passes the verification standard of the relevant verification agency, it should be stated: The company has obtained ISO-9001 certification and AMTRI CE certification for the European CE MachinerySafetyDirective.

1. perform integrity management situation shaped the integrity of a Code of Practice and differences with the situation and the reasons for publicly traded companies

evaluation items	Operational situation	Operational situation	Operational situation	Situations and reasons for the difference with the listed company's code of good faith operation
	Yes	no	Summary description
1. Formulate integrity management policies and plans (1)Has the companyformulated the	V		(1) The company has formulated the "Code of Integrity	No difference.

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evaluation items	Operational situation	Operational situation	Operational situation	Situations and reasons for the difference with the listed company's code of good faith operation
	Yes	no	Summary description
integrity management policy approved by the board of directors, and stated in the regulations and external documents the policies and practices of integrity management, as well as the board and senior management's commitment to actively implement the operation policy? (2) Whether the company has established an assessment mechanism for the risk of dishonesty, regularly analyzes and evaluates business activities with high risks of dishonesty in the business scope, and formulates a plan to prevent dishonesty, and at least covers "listing Preventive measures for the conduct of the second paragraph of Article 7 of the Company's Code of Integrity Management? (3) Does the company clearly specify the operating procedures, behavior guidelines, disciplinary and punishment and appeal system in the plan to prevent dishonesty, and implement it, and regularly review and revise the pre-disclosure plan?	V V		Management" through the resolution of the board of directors, which clearly stipulates that directors, managers and employees shall abide by the laws and regulations in carrying out their business, and announces them on public information observatories and company websites. (2) In the "Code of Integrity Management" , the company expresses the relevant integrity management operation procedures and behavior guidelines, strengthens the prevention of business activities with a high risk of dishonesty in the business scope, and covers the seventh "Code of Integrity Management of Listed OTC Companies"Article (3) The Company has formulated the "Code of Integrity Management" and "Code of Ethical Conduct" upon the resolution of the Board of Directors, and announced it on the public information observatory and the company's website, and has implemented it.	No difference. No difference.
Second, the implementation of integrity management (1)Does the companyevaluate the	V		(1) The Company records do dealings target integrity	No difference.

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evaluation items	Operational situation	Operational situation	Operational situation	Situations and reasons for the difference with the listed company's code of good faith operation
	Yes	no	Summary description
integrity record of the counterparty and specify the terms of integrity in the contract signed with the counterparty ? (2) whether the company set up under the board of directors to promote corporate integrity management professionals responsible for the unit, and periodically (at least annually) report to the Board on its business integrity policies and programs to prevent acts of bad faith and supervise the implementation of the situation? (3) Does the company formulate a policy to prevent conflicts of interest, provide appropriate presentation channels, and implement them? (4) Whether the company has established an effective accounting system and internal control system for the implementation of integrity management, and the internal audit unit shall draw up the relevant audit plan based on the results of the assessment of the risk of dishonesty, and check the plan against dishonesty Follow the situation, or entrust an accountant to perform the audit ? (5) Does the company regularly conduct internal and external education and training on integrity management?	V V V	V	assessment, and its dealings with the contract entered into between trading partners in the next set the terms of integrity and behavior. (2) the Company's Human Resources Department to promote business integrity management under the Board of dedicated units , and regularly report to the Board . (3) The Company has formulated the "Integrity Management Code" through resolutions of the board of directors, and provided appropriate channels for statements to prevent conflicts of interest and implement them. (4) The Company has formulated the "Code of Integrity Management" through resolutions of the board of directors, established an effective accounting system and internal control system, and is regularly audited by the internal audit unit, and entrusted accountants to perform the audit. (5) The company has not regularlyorganized internal and	No difference. No difference. No difference. The company will set according to actual needs.

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evaluation items	Operational situation	Operational situation	Operational situation	Situations and reasons for the difference with the listed company's code of good faith operation
	Yes	no	Summary description
			external education and training on integrity management.
Third. Operation of the company's whistleblowing system (1) Does the company formulate a specific reporting and reward system, establish a convenient reporting channel, and assign appropriate personnel to accept the complaint? (2) Has the company established standard operating procedures for accepting reports of investigations , follow-up measures to be taken after the investigation is completed, and relevant confidentiality mechanisms? (3) Has the company taken measures to protect the whistleblowers from improper disposal due to the whistleblowing?	V V V		(1) The company has formulated the "Code of Integrity Management" through the resolution of the board of directors, and has set specific reporting and reward systems, and established a convenient reporting channel, and assigned appropriate personnel for the acceptance of the reported object. (2) The company has formulated the "Code of Integrity Management" through the resolution of the board of directors, and has also established the standard operating procedures for the investigation of the complaint , the follow-up measures to be taken after the investigation is completed, and the relevant confidentiality mechanism. (3) The company has formulated the "Code of Integrity Management" through resolutions of the board of directors, and has formulated measures to protect whistleblowers from improper disposal due to whistleblowing.	No difference. No difference. No difference.
Fourth. Strengthen information disclosure				The company

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evaluation items	Operational situation	Operational situation	Operational situation	Situations and reasons for the difference with the listed company's code of good faith operation
	Yes	no	Summary description
(1) whether the company and its website MOPS, exposing its fixed business integrity and promote the effectiveness of the Code content?		V	(1) The Company disclosed the "Code of Integrity Management" on its website and public information observatory, but its promotion effect has not been disclosed.	will depend on the actual publicity to promote results.
Fifth, according to the company as "publicly traded company operating integrity of the Code" set integrity Code of Practice for themselves, please stating its operation and the set difference of the Code of the case: no difference.
Sixth. Other important information that helps to understand the company's integrity management and operation: (such as the company reviewing and revising its integrity management code, etc.) (1) The company abides by the company law, securities trading law, commercial accounting law, regulations related to listing on the counter, and other laws and regulations related to business conduct, which serve as the basis for the implementation of integrity management. (2) The Company's "Rules of Procedure for Board Meetings" have a system for avoiding directors' interests, and those who have a stake in the proposals listed by the board of directors should evade it.

1. How to inquire about the Corporate Governance Code and related regulations: The company has a total of 48 Corporate Governance Codes of Practice , which have been placed on the company's website as follows, Home > Investors and Corporate Responsibility > Articles and Procedures > Corporate Governance Code of Practice

( http://www.anderson.com.tw/respons ibility.asp ), for shareholders' inquiries.

1. Other important information sufficient to enhance the understanding of the operation of corporate governance: None.

9. Implementation status of internal control system

(1) Statement of internal control

Ende Technology Co., Ltd. Statement of Internal Control System Date: March 9, 2021

The company 2020 internal control system of the year, according to the results of selfexamination, I would like to state the following:

1. The company is aware that it is the responsibility of the board of directors and managers of the company to establish, implement and maintain an internal control system. The company has already established this system. Its purpose is to provide reasonable results for the achievement of objectives such as the effectiveness and efficiency of operations ( including profitability, performance, and asset security, etc.), reliability, timeliness, transparency of

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reporting, and compliance with relevant standards and relevant laws and regulations. Of sure. 2. The internal control system has its inherent limitations. No matter how perfect the design is, an effective internal control system can only provide a reasonable guarantee for the achievement of the above three objectives; and, due to changes in the environment and circumstances, the effectiveness of the internal control system May change accordingly. However, the company's internal control system has a self-monitoring mechanism. Once the deficiency is identified, the company will take corrective action.

1. The company judges whether the design and implementation of the internal control system are effective in accordance with the judgment items on the effectiveness of the internal control system specified in the "Principles for Processing Internal Control System for Public Issuance Companies" (hereinafter referred to as "processing standard"). The internal control system judgment items used in the "processing criteria" are based on the process of management control, and the internal control system is divided into five components: 1. control environment, 2. risk assessment, 3. control operations, 4. Information and communication, and 5. Supervision operations. Each component includes several items. For the aforementioned items, please refer to the "Handling Guidelines".

2. The company has adopted the above internal control system to judge the project and evaluate the effectiveness of the design and implementation of the internal control system.

3. The company based in the preceding paragraph findings that the Company in the 2020,12,31 internal control system (including supervision and management of subsidiaries), including understanding the extent of reach of operational effectiveness and efficiency targets, reported the Department of The design and implementation of internal control systems that are reliable, timely, transparent, and in compliance with relevant regulations and related laws and regulations are effective, and they can reasonably ensure the achievement of the above goals.

4. This statement will become the main content of the company's annual report and public specification, and will be made public. If the contents disclosed above are false or concealed, the legal responsibilities of Article 20, Article 32, Article 171 and Article 174 of the Securities Exchange Law will be involved.

5. This statement was approved by the company's board of directors on March 9, 2021. Among the 7 directors present, 0 of them held objections, and all of them agreed with the content of this statement and made this statement.

Ende Technology Co., Ltd.

Chairman: Liao Wenjia signed

General Manager: Huang Yixian signed

(2) Those entrusting accountants to professionally review the internal control system should disclose the accounting review report: None.

10 . Recently (2020 ) annual and annual reports as of the date of printing companies and their internal staff to be punished according to law, in violation of the company's internal control system of penalties for its internal staff, mainly with the lack of improvement in the situation: None.

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1. Recently (2020) year and the important resolutions up to the date of printing annual reports, shareholders and board of directors.

(1) Shareholders' meeting

Meeting date	Summary of important bills	Resolution result	Implementation situation
2020.05.27	1. Recognize the 2019 business report and financial statement case. 2. Acknowledgment of the 2019 profit and loss compensation case. 3. Amend some of the texts of the "Articles of Association". 4. Revise some of the texts of the "Procedures for Acquiring or Disposing of Assets". 5. Revise some of the texts of the "Procedures for Loaning Funds to Others". 6. Revise some of the texts of the "Measures for Endorsement Guarantee". 7. The case of capital surplus allocation and discovery of gold dividends. 8. Re-election of directors (including independent directors). 9. Removal of the prohibition on competition for newly elected directors (including independent directors) and their representatives.	Approved by all the shareholders present Approved by all the shareholders present Approved by all the shareholders present Approved by all the shareholders present Approved by all the shareholders present Approved by all the shareholders present Approved by all the shareholders present Election by all present shareholders Approved by all the shareholders present	It has been operated in accordance with the approved operating procedures. It has been operated in accordance with the approved operating procedures. It has been operated in accordance with the approved operating procedures. It has been operated in accordance with the approved operating procedures. It has been operated in accordance with the approved operating procedures. It has been operated in accordance with the approved operating procedures. It has been operated in accordance with the approved operating procedures. It has been operated in accordance with the approved operating procedures. It has been operated in accordance with the approved operating procedures.

(2) Board of Directors

Board of Directors
Period	Meetingdate	Summaryof important bills	Resolution result
The 10th Board of Directors	2020. 03 . 11	1. The 2019 individual financial report recognition case.	Except for the discussion

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Period	Meetingdate	Summaryof important bills	Resolution result
2020 years The first 1 meeting		2. The 2019 consolidated financial report recognition and business report proposal. 3. Supplementary proposal for 2019 profit and loss. 4. 2019 internal control self- inspection case. 5. Appraisal of the independence and objectivity of certified public accountants. 6. The meeting of the 2020 shareholders meeting will be held. 7. Re-election of directors (including independent directors). 8. Removal of the prohibition on competition for newly elected directors (including independent directors) and their representatives. 9. Extend the case of endorsement of the guarantee limit to the investment company. 10. Extension of the case of loan of funds to the grandson company MATEC GmbH. 11. The actual amount of the year- end bonus for managers in 2019. 12. Manager salary case. 13. The company's manager's change case. 14. The company's financial and accounting supervisor change proposal. 15. The case of capital surplus allocation and discovery of gold dividends.	of the fourth case, which was re- introduced by the board of directors next time , all other directors present at the meeting unanimously agreed to pass the case.
The 10th Board of Directors 2020 years The 2 meeting	2020.04.13	1. Review the relevant documents for the shareholders' nomination of independent directors. 2. The 2019 profit and loss allowance adjustment proposal. 3. Proposal to adjust the agenda of the 2019 Annual General Meeting of Shareholders.	All proposals attended by all directors unanimously agreed to pass the case.
The 11th Board of Directors 2020years	2020.05.27	1. The proposal of appointing members of the audit committee. 2. Theproposal of appointing	All proposals attended by all directors unanimouslyagreed to

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Period	Meetingdate	Summaryof important bills	Resolution result
The 1 meetings		members of the remuneration committee. 3. Authorization case for signing bank account transactions and bank financingdocuments.	pass the case.
The 11th Board of Directors 2020 years The 2 meetings	2020.07.08	1. Proposed to purchase shares of the company for the 14th time in accordance with the law for transfer to employees. 2. It is proposed to issue a statement of the board of directors in accordance with the provisions of the Measures for the Buying Back of the Company's Shares by Listed OTC Companies. 3. Formulate the company's 14th treasury stock transfer measures in 2020.	All proposals attended by all directors unanimously agreed to pass the case.
The 11th Board of Directors 2020 years The 3 meeting	2020.08.07	1. Set the base date and payment date of the company's capital reserve distribution of cash dividends. 2. Revise the company's 14th Treasury Share Transfer Measures in 2020. 3. Revise the company's "Organizational Rules of Audit Committee". 4. The appointment and dismissal of all management (managers) of the company. 5. The dismissal of the managers of subsidiaries Yude Industrial Co., Ltd. and Shengde Co., Ltd. 6. The case of endorsement of guarantee quota to the company's reinvestment company.	All proposals attended by all directors unanimously agreed to pass the case.
The 11th Board of Directors 2020 years The 4 meeting	2020.11.10	1. The company's fund loan case to its subsidiary Zhongde Industrial Co., Ltd. (Shanghai). 2. The company's purchase of production equipment from its subsidiary Yude Industrial Co., Ltd. 3. The company's "internal auditor appointment, dismissal, assessment, and remuneration method" has been finalized.	All proposals attended by all directors unanimously agreed to pass the case.

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Period	Meetingdate	Summaryof important bills	Resolution result
		4. The revision of the company's internal control system. 5. 2021 auditplan.
The 11th Board of Directors 2020 years The first 5 meeting	2020.12.15	1. Operation plan for 2021. 2. Personnel case of the company's internal management personnel. 3. Remuneration proposal for newly appointed independent directors.	All proposals attended by all directors unanimously agreed to pass the case.
The 11th Board of Directors 2021 years The 1 meeting	2021.03.09	1. The 2020 individual financial report case. 2. The 2020 consolidated financial report and business report proposal. 3. The 2020 profit and loss compensation plan. 4. The case of capital public reserve allocating cash dividends. 5. The internal control self- inspection case for 2020. 6. Appraisal and appointment of the independence and objectivity of certified public accountants. 7. The 2021 shareholders meeting will be held. 8. The company's manager renewal case. 9. The revision of the company's internal control system.	All proposals attended by all directors unanimously agreed to pass the case.
The 11th Board of Directors 2021 years The 2 meeting	2021.04.13	1. Amendments to the "Articles of Association" of the company. 2. The company's "fund loan and others' operating procedures" amendment. 3. Abandoning the capital increase case of Yude Industrial Co., Ltd. 4. Amendments to the agenda of the 2021 regular shareholders meeting.	All proposals attended by all directors unanimously agreed to pass the case.

1. In the most recent (2020 ) year and as of the date of publication of the annual report, if the directors or supervisors have different opinions on the important resolutions passed by the board of directors and have records or written statements, the main content: none

2. Summary table of the resignation and dismissal of the company's chairman, general manager, accounting supervisor, financial supervisor, internal audit supervisor , corporate governance supervisor and R & D supervisor in the most recent (2020) year and as of the date of publication of the annual report :

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					110.3.31
	job title	Name	Expiration date	Dismissal date	Reasons for resignation or termination
	Accounting Supervisor	Huang Yixian	1031001	1090311	General Manager of Job Adjustment
( 4 ) Public account information of accountants
Unit: NT$thousand

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

Non-audit public expense
Audit
Name of Account Busines During
accounti ant public Syste s Human Subt the Preparation N
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1152,000
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796,000
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Deloitte 20200101
Accounti Peide , 3,550 - - - 2154 2154 ～ the
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Liwen inspection,
115,000
supplementar
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explanation,
61,000
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----- End of picture text -----

1. The non-audit public fees paid to the visa accountant, the firm to which the visa accountant belongs, and its affiliates are not more than a quarter of the audit public fee : there is no such case.

2. If the audit public fee paid in the replacement accounting firm is lower than the audit public fee in the previous year , the amount and reason of the audit public fee before and after the replacement : there is no such situation.

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1. Audit public expenditure decreased by more than 15% compared with the previous year: no such situation .

(5) Change accountant information: None.

( 6 ) Circumstances in which the company’s chairman, general manager, and manager in charge of financial or accounting affairs have worked in the firm of the certified public accountant or its affiliated company within the most recent year: None.

( 7 ) In the most recent year and up to the date of publication of the annual report, the transfer of shareholdings and changes in shareholding pledges of directors, supervisors, managers and shareholders holding more than 10% of the shares:

1. Directors, supervisors, managers and shareholders with a shareholding ratio of more than 10% share transfer and share pledge changes:

job title	Surname n ame	10 8 Year		2021.3.31 ended
		Pledged shares Increase (decreas e) the number of	Number of shares held Increase (decreas e)the number of	Pledged shares Increase (decreas e) the number of	Number of shares held Increase (decreas e)the number of
Corporate Chairman and Major Shareholde r	Win Yong Investment Co., Ltd.	-	-	-	-
Corporate director representat ive and major shareholde r	Liao Wenjia	-	761,000	-	-
Representa tive of corporate director	Lin Qiquan	-	-	-	-
Representa tive of corporate director	Xu Yonghao	-	30,000	-	-
Representa tive of corporate director	Huang Yixian	-	-	-	-
Independe nt Director	Lai Jun Liang	-	-	-	-
Independe nt Director	Wu Qingsong	-	-	-	-

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job title	Surname n ame	10 8 Year	10 8 Year	2021.3.31 ended	2021.3.31 ended
		Pledged shares Increase (decreas e) the number of	Number of shares held Increase (decreas e)the number of	Pledged shares Increase (decreas e) the number of	Number of shares held Increase (decreas e)the number of
Independe nt Director	Liang Yihong	-	-	-	-
Deputy Gen eral Manager	Lin Chengwei	-	-	-	-
Deputy General Manager	Li Mingzhe	-	-	-	-
Deputy General Manager	Wu Hongming	-	97,000	-	-
manager	Li Guolong	-	-	-	-
manager	Zen gGuowei	-	-	-	-
Associate	Liu Junhong	-	-	-	-
Associate	Lai Zhixian	-	9,000	-	-
Major shareholde r	PARPRO Technology (Stock) Company	-	-	-	-
Accounting Supervisor	Shi Boru	-	-	-	-

1. The relative person whose equity is transferred is a related person: None.

2. If the relative person of the equity pledge is a related person: None.

( 8 ) Shareholding ratio of the top ten shareholders and their relationship information 10 9 years 03 Yue 31 Ri

Name (Note 1 )	Me Holding shares	Spouse, minor children Holding shares	Total in the name of others Holding shares	The top ten shareholders have related persons or relatives within the spouse, second parent, etc., their names or names	Rema rks

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							and relationships. (N ote 3)	and relationships. (N ote 3)
	Number of shares	Sharehol ding ratio	Num ber of share s	Sharehol ding ratio	Num ber of share s	Sharehol ding ratio	Name ( or name )	relations hip
PARPRO Technology ( shares ) Company Representative: Liao Wenjia	39 , 904 , 488	20.02 %	-	-	-	-	Liao Wenjia	principal
Yunyong Investment Co., Ltd. Representative: Liao Wenjia	20,000,00 0	10.03 %	-	-	-	-	Liao Wenjia	principal
Huang Yuan	5,413,536	2.72 %	-	-	-	-	Wang Yingjia	Mother daughte r
							Wang Xuanfu	Mother and son
							Wang Weilon g	Mother and son
Liao Wenjia	4,790,000	2 . 40 %	-	-	-	-	Liao Wenjia	principal
Paid Investment Co., Ltd. Representative: Liao Wenjia	2,350,000	1.18 %	-	-	-	-	Liao Wenjia	principal
Wang Xuanfu	2,254,582	1.13 %	-	-	-	-	Huang Yuan	Mother and son
							Wang Yingjia	Siblings
							Wang Weilon g	brothers
Lin Gaohuang	2,200,000	1.10%	-	-	-	-	no	no
Wang Weilong	2,119,098	1.06 %	-	-	-	-	Huang Yuan	Mother and son
							Wang Yingjia	Siblings
							Wang Xuanfu	brothers
Wang Yingjia	2,000,183	1.00 %	-	-	-	-	Huang Yuan	Mother and son

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							Wang Xuanfu	Siblings
							Wang Weilon g	Siblings
WangPidong	1,585,353	0.80 %	-	-	-	-	no	no

Note 1 : All the top ten shareholders are listed, and those who are corporate shareholders list the names of corporate shareholders and representatives.

Note 2 : The calculation of the shareholding ratio refers to the calculation of the shareholding ratio in their own name, spouse, minor children or in the name of others.

Note 3 : The shareholders listed in the preceding disclosure, including legal and natural persons, should disclose their relationships in accordance with the issuer ’ s financial reporting standards. Note 4 : The shares of the company bought back according to law are expected to be transferred to their employees in the future .

(9) The number of shares held by the company, its directors, supervisors, managers, and businesses directly or indirectly controlled by the company in the same reinvested business and the overall shareholding ratio

202

1.3.31

Reinvestment business (Note 1 )	This public Division investment capital	This public Division investment capital	Directors, supervisors, managers and direct or Indirect control of business investment	Directors, supervisors, managers and direct or Indirect control of business investment
	Number of shares	Holding shares than patients	Number of shares	Holding shares than patients
Ende HongKong	300	100%	-	-
Ende Germany	Note 2	100%	Note 2	-
Ende America	1	100%	-	-
Zhongde Industry	Note 2	100%	Note 2	-
Youde Machinery	Note 2	100%	Note 2	-
Shengde Company	22,000	100%	-	-
Totalprecision	11,796	58.11 %	4,511	22.22 %
Yude	5,000	100%	-	-
Giben Holdings Co. Ltd. (BVI)	10	100%	-	-
Giben Holdings Co. Ltd. (SAMOA)	10	100%	-	-
Giben America,Inc.	Note 2	-	Note 2	100%
Giben do Brasil Maquinas e Equipamentos Ltd.	Note 2	-	Note 2	100%
Monforts Werkzeugmaschinen	Note 2	-	Note 2	100%

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GmbH(Monforts GmbH)
General Precision Machinery ( Shanghai ) Co., Ltd.	Note 2	-	Note 2	100%
MATEC GmbH	Note 2	-	Note 2	100%

Unit: Thousand

shares

Note 1 : It is the company's investment using equity method. Note 2 : It is a limited company

Fundraising situation 1. Capital and shares ( 1 ) Source of equity

1. Issued shares

Unit: New Taiwan dollar; shares

issued price ( Denomination )	Nucleargiven share this	Nucleargiven share this	Real income shares this	Real income shares this	Preparation Note	Preparation Note
	Number of shares	Gold Amount	Number of shares	Gold Amount	Source of equity	Those who use property other than cash to offset the share capital
10	12,100,000	121,000,000	12,100,000	121,000,000	Consolidated capital increase of 53,000,000	-
10	14,047,000	140,470,000	14,047,000	140,470,000	Capital increase in cash 19,470,000	-
10	17,047,000	170,470,000	17,047,000	170,470,000	Capital increase of 30,000,000 in cash	-
10	18,726,000	187,260,000	18,726,000	187,260,000	Capital increase in cash 16,790,000	-
10	19,650,000	196,500,000	19,650,000	196,500,000	Capital increase in cash 9,240,000	-
10	26,650,000	266,500 , 000	26,650,000	266,500,000	Capital increase of 70,000,000 in cash	-
10	35,000,000	350,000,000	31,000,000	310,000,000	Surplus capital increase 35,505,000 Capital reserve conversion to increase capital 7,995,000	-
10	70,000,000	700,000,000	47,500,000	475,000,000	Surplus capital	-

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issued price ( Denomination )	Nucleargiven share this	Nucleargiven share this	Real income shares this	Real income shares this	Real income shares this	Real income shares this
	Number of shares	Gold Amount	Number of shares	Gold Amount	Source of equity	Those who use property other than cash to offset the share capital
					increase 34,000,000 Capital reserve conversion to increase capital 31,000,000 Capital increase of 100,000,000 in cash
10	70,000,000	700,000,000	54,900,000	549,000,000	Turn surplus into capital 17,000,000 capital surplus into capital 57,000,000	-
10	70,000,000	700,000,000	61,900,000	619,000,000	Cash increase 70,000,000	-
10	71,900,000	719,000,000	71,900,000	719,000,000	Turning surplus into capital 44,290,000 Capital reserve conversion to increase capital 55,710,000	-
10	120,000,000	1,200,000,000	80,000,000	800,000,000	Turning surplus into capital 16,290,000 Capital reserve conversion to increase capital 64,710,000	-
10	120,000,000	1,200,000,000	82,000,000	820,000,000	Capital reserve conversion to increase capital by20,000,000	-
10	120,000,000	1,200,000,000	78,000,000	780,000,000	Treasury stock cancellation 40,000,000	-
10	120,000,000	1,200,000,000	74,200,000	742,000,000	Treasury shares cancelled 38,000,000	-
10	160,000,000	1,600,000,000	74,200,000	742,000,000	Increase the approved share capital by400,000,000	-
10	120,000,000	1,200,000,000	74,200,000	742,000,000	Reduce the approved share capital by400,000,000	-
10	120,000,000	1,200,000,000	76,200,000	762,000,000	Turn surplus into capital increase 12,580,000	-

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issued price ( Denomination )	Nucleargiven share this	Nucleargiven share this	Real income shares this	Real income shares this	Preparation Note	Preparation Note
	Number of shares	Gold Amount	Number of shares	Gold Amount	Source of equity	Those who use property other than cash to offset the share capital
					Capital reserve conversion to increase capital 7,420,000
10	120,000,000	1,200,000,000	89,492,348	894,923,480	Conversion of overseas convertible corporate bonds increased by132,923,480	-
10	150,000,000	1,500,000,000	96,000,000	960,000,000	Turning surplus into capital 4 8,967,890 Capital reserve conversion to increase capital 16,108,630	-
10	150,000,000	1,500,000,000	120,000,000	1,200,000,000	Turn the surplus into a capital increase of 40,000,000 200,000,000 capital increase in cash	-
10	150,000,000	1,500,000,000	120,968,206	1,209,682,060	Conversion of domestic convertible corporate bonds increased by9,682,060	-
10	200,000,000	2, 000,000,000	127,068,206	1,270,682,060	Earnings increased to 61,000,000	-
10	200,000,000	2,000,000,000	115,068,206	1,150,682,060	Treasury shares cancelled 120,000,000	-
10	200,000,000	2,000,000,000	117,568,206	1,175,682,060	Capital reserve conversion to increase capital by25,000,000	-
10	200,000,000	2,0 00,000,000	117,811,448	1,178,114,480	Conversion of domestic convertible corporate bonds increased by2,432,420	-
10	200,000,000	2,000,000,000	120,117,677	1,201,176,770	Capital reserve conversion to increase capital 23,062,290	-
10	200,000,000	2,000,000,000	134,082,897	1,340,828,970	Conversion of domestic convertible corporate	-

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issued price ( Denomination )	Nucleargiven share this	Nucleargiven share this	Real income shares this	Real income shares this	Preparation Note	Preparation Note
	Number of shares	Gold Amount	Number of shares	Gold Amount	Source of equity	Those who use property other than cash to offset the share capital
					bonds increased by 139,652,200
10	200,000,000	2,000,000,000	137,082,897	1,370,828,970	Capital reserve conversion to increase capital by30,000,000	-
10	200,000,000	2,000,000,000	142,694,498	1,426,944,980	Conversion of domestic convertible corporate bonds increased by 56,116,010	-
10	200,000,000	2,000,000,000	140,918,754	1,409,187,540	Cancellation of treasury shares 30,220, 000 Conversion of domestic convertible corporate bonds increased by12,462,560	-
10	200,000 , 000	2,000,000,000	147,000,000	1,470,000,000	Turning surplus into capital 60,812,460	-
10	200,000 , 000	2,000,000,000	180,000,000	1,800,000,000	Cash increase 330,000,000	-
10	200,000 , 000	2,000,000,000	200,000 , 000	2, 000,000,000	Cash increase 20 0,000,000	-
10	200,000 , 000	2,000,000,000	199,881, 000	199,881, 000	Treasury stock cancellation 119,000	-
10	200,000 , 000	2,000,000,000	199,331, 000	199,331, 000	Treasury stock cancellation 550,000	-
10	300,000,000	3,000,000,000	199,331,000	199,331,000	Increase approved share capital 1,000,000,000	-

Note 1 : The capital increase of 34,000,000 by surplus, 31,000,000 by capital surplus and 100,000,000 by cash were approved by the Securities and Futures Management Committee of the Ministry of Finance on June 30, 1998 Taiwan Caizheng (1) No. 56582 and August 5, 1998 Taiwan Finance Certificate (1) No. 56582.

Note 2 : This time, the surplus was transferred to an increase of 17,000,000, and the capital

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reserve was transferred to an increase of 57,000,000. It was approved by the Securities and Futures Management Commission of the Ministry of Finance on July 6, 1999 Taiwan Caizheng (1) No. 61630-1.

Note 3 : This cash capital increase of 70,000,000 was declared effective by the letter (88) Taiwan Caizheng (1) No. 107181 of the Securities and Futures Management Commission of the Ministry of Finance on December 22, 1999.

Note 4 : The capital increase of 44,290,000 from the surplus and 55,710,000 from the capital surplus was declared to take effect by the Securities and Futures Management Commission of the Ministry of Finance on October 20, 2000 (89) Taiwan Caizheng (1) No. 86817 letter. Note 5 : The capital increase of 16,290,000 from the surplus and 64,710,000 from the capital surplus was declared effective by the letter of (90) Taiwan Caizheng (1) No. 132762 on May 25, 2001 of the Securities and Futures Management Commission of the Ministry of Finance. Note 6 : The capitalizing of common reserves 20,000,000 , through the Ministry of Finance and the Securities and Futures Commission 91. 7. 31 station license for one fiscal first 0910142555 letter No. declaration to take effect.

Note 7 : The treasury stock cancellation 40,000,000 , the Ministry of Finance and the Securities and Futures Commission 92.1.9 Taiwan fiscal certificate III, page 09200 100 185 number and 92.3.12 Taiwan fiscal certificate III to 0,920,108,577 letter No. approval effect. Note 8 : The cancellation of treasury shares 38,000,000 , the Ministry of Finance Securities and Futures Commission 92. 7.15 Taiwan certificate three fiscal first 0920130631 letter of approval effect.

Note 9 : The increase in authorized share capital of 400,000,000 , the Department is working with the company to expand the scale of the need, after 93 .6 .25i shareholders by force. Note 10 : The reduction in share capital approved 400,000,000 , Department 93 to handle the original capital and total capital increase, the actual increase is not handled, it was 94.6.23. shareholders' equity will be reduced by amendments approved.

Note 11 : The transfer surplus capital 12,5 80,000 , capitalizing of common reserves 7,420,000 , the Financial Supervisory Commission 94.7. 20.-jin Guan Zheng word of 0,940,129,400 letter No. declaration to take effect.

Note 12 : The overseas convertible bond conversion increased total 132,923,480 , through the Ministry of Finance and Securities and Futures Commission 92.2. 11 station license for one fiscal first 0910168636 letter of approval effect.

Note 13 : The increase retained earnings 48,967,890 , capital reserve transfer capital 16,108,630 by the Financial Supervisory Commission 95.7 .21 FSC certificate word on 0950131960 letter No. declaration to take effect.

Note 14 : The capital increase retained earnings 40,000,000 , the Financial Supervisory Commission 96. 7 . 3 FSC certificate word on 0960033806 letter No. declaration to take effect. Cash capital increase of 200,000,000 , the Financial Supervisory Commission 96.5.29 Ri FSC certificate word on 0960026070 letter No. approval effect.

Note 15 : The domestic convertible bond conversion increased total 9,682,060 , the Ministry of Finance and the Securities and Futures Commission 96.5.29 FSC certificate word

on 09600260701 Letter No. approval effect, the Taiwan Stock Exchange 97.1.23 the first word on Taiwan Securities 097 002 021 731 , 97 . 4.15 09,700,091,271 , 97. 7. 18 09,700,203,971 letter No.

agree. Note 16 : The transfer surplus capital 61 million , the Financial Supervisory Commission 97 .7 .21 FSC certificate word on 0970036651 letter No. declaration to take effect.

Note 17 : The cancellation of 120,000,000 treasury shares was approved by the Financial

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Supervision and Administration Commission of the Executive Yuan on July 21, 2008, Jin Guan Zheng San Zi No. 0970038240 letter and October 17, 2008 Jin Guan Zheng San Zi No. 0970054535 letter to take effect.

Note 18 : The capital increase of 25,000,000 from the capital surplus was declared effective by the Financial Supervision and Administration Commission of the Executive Yuan on July 21, 2009, the letter of Jin Guan Zheng Fa Zi No. 0980036431.

Note 19 : The domestic convertible bond conversion increased total 2,432,420 , the Ministry of Finance and the Securities and Futures Commission 96 years 5 Yue 29 Ri FSC certificate word on 09600260701 Letter No. approval effect. Taiwan Stock Exchange 99 years 1 Yue 18 Ri Tai Zheng on word of 09,900,017,011 letter No. agree.

Note 20 : The capitalizing of common reserves 23,062,290 , the Financial Supervisory Commission 99 years 7 Yue 16 Ri FSC certificate issued Zi 0990037233 letter No. declaration to take effect.

Note 21 : The domestic convertible bond conversion increased total 139,652,200 , through the Ministry of Finance and Securities and Futures Commission 99 years 6 Yue 23 Ri FSC certificate issued Zi 0990030840 letter No. approval effect, the Taiwan Stock Exchange 100 years 1 Yue 20 Ri the first word on the Taiwan Securities 1000002315 letter number 100 of 4 Yue 12 days the first word on the Taiwan Securities 10,000,111,411 letter number 100 of 7 Yue 19 word on the first day permit to Taiwan 10000240901 letter No. agree.

Note 22 : The capitalizing of common reserves 30,000,000 , the Financial Supervisory Commission, Executive Yuan 100 years 7 Yue 19 FSC certificate sent word first day 1000033493 letter effective registration number.

Note 23 : The domestic convertible bond conversion increased total 56,116,010 , through the Ministry of Finance and the Securities and Futures Commission 99 years 6 Yue 23 Ri FSC certificate issued Zi 0990030840 letter No. approval effect, the Taiwan Stock Exchange, 100 on 10 Yue 21 Ri The letter No. 10 000338991 on the Taiwan License agrees.

Note 24 : The treasury stock cancellation 30,220,000 , the Financial Supervisory

Commission 97 years 11 Yue 28 days FSC certificate words of 0,970,065,537 letter number

and 100 in 10 Yue 28 FSC Securities and Exchange word of the day 1,000,052,519 entry into force

of letter No. approval.

The domestic convertible bond conversion increased total 12,462,560 , through the Ministry of Finance and the Securities and Futures Commission 99 years 6 Yue 23 days FSC certificate issued Zi 0990030840 letter No. approval effect, the Taiwan Stock Exchange 101 years 1 Yue 12 on the Japan-Taiwan certificate The letter No. 10100009271 agrees.

Note 25 : The capital increase retained earnings 60,812,460 , the Financial Supervisory Commission 101 on 7 Yue 24- Rijin tube permit was issued Zi 1010032982 letter No. declaration to take effect.

Note 26 : The cash capital increase to 330,000,000 , the Financial Supervisory Commission 104 on 1 Yue 29 Ri-jin Guan Zheng Zi hair 1040001410 letter No. declaration to take effect.

Note 27 : The cash capital 20 0,000,000 , the Financial Supervisory

Commission 10 7 years 7 Yue 6 the first day the FSC certificate sent word 10 70,323,634 No. letter declared effective.

Note 28 : The cancellation of treasury shares 119 , 000 , the Financial Supervisory

Commission 105 in 1 Yue 14 days FSC Securities and Exchange Zi 1050001447 No. letter of nuclear equipment, the Taiwan Stock Exchange, 107 on 12 Yue 24- agreed date .

Note 29 : The cancellation of treasury shares 550 , 000 , the Financial Supervisory

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Commission 105 on 3 Yue 29 days FSC Securities and Exchange Zi 105000 9808 No. letter of nuclear equipment, the Taiwan Stock Exchange 108 years 3 Yue 26 agreed date .

Note 30: The increase in the approved share capital of 1,000,000,000 is to meet the needs of the company’s business development. On June 30, 104, the shareholders’ meeting approved the revision of the company’s articles of incorporation capital, which was approved by the Ministry of Economic Affairs on June 15, 109. No. 10901109430 Change registration of letter.

2. Types of shares

110.3.2

9

Types of shares	Approved share capital	Approved share capital		Remarks
	Outstandingshares	Unissued shares	total
Registered common stock	199,331,000 shares	100,669,000 shares	200,000,000 shares	Note

3. Information related to the blanket declaration system: None.

( 2 ) Shareholder structure

20

21.3.29

Shareholder structure	government mechanism	financial mechanism	other Legalperson	personal	Foreign institution And externalpeople	total
Number of people	1	1	185	31,610	44	31,841
Number of shares held	4	46,000	73,779,377	123,772,331	1,733,288	199,331,000
Shareholding ratio	0.00%	0.02%	37.01%	62.10%	0.87%	100.00%

( 3 ) Scattered equity

1. Common stock

2021.3.2

9

Shareholding grading	Number of shareholders	Number of shares held(shares)	Shareholding ratio
1 to 999	23,142	716,743	0.36%
1,000 to 5,000	5,697	12,237,567	6.14%
5,001 to 10,000	1,330	10,580,235	5.31%
10,001 to 15,000	445	5,631,436	2.83%
15,001 to 20,000	329	6,131,950	3.08%
20,001 to 30,000	299	7,534,619	3.78%
30,001 to 40,000	154	5,477,279	2.75%
40,001 to 50,000	96	4,420,295	2.22%
50,001 to 100,000	184	13,179,167	6.61%
100,001 to 200,000	76	10,840,316	5.44%
200,001 to 400,000	57	15,864,696	7.96%

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400,001 to 600,000	8	4,089,526	2.05%
600,001 to 800,000	6	4,275,369	2.14%
800,001 to 1,000,000	0	0	0.00%
1,000,001 and above	18	98,351,802	49.33%
Co- Total	31,841	199,331,000	100.00%

1. Special shares: The company has not issued special shares. ( 4 ) List of major shareholders

Major shareholders with a shareholding ratio of more than 5% or shareholding ratio in the top ten

110.3.29

			110.3.29
Serial number	Name of major shareholder	Number of shares held (shares)	Holding ratio
1	Parpro Technology Co., Ltd.	39,904,488	20.02%
2	Win Yong Investment Co., Ltd.	20,000,000	10.03%
3	Anderson Co. Ltd.	8,000,000	4.01%
3	HuangYuan	5,413,536	2.72%
5	Liao Wenjia	4,790,000	2.40%
6	Paid Investment Co.,Ltd.	2,350,000	1.18%
7	WangXuanfu	2,254,582	1.13%
8	Lin Gaohuang	2,200,000	1.10%
9	WangWeilong	2,119,098	1.06%
10	WangYingjia	2,000,183	1.00%
11	WangPidong	1,585,353	0.80%

Note: The shares of the company bought back in accordance with the law are expected to be transferred to their employees in the future.

( 5 ) Stock price, net worth, surplus, dividends and related information in the last two years Unit: New Taiwan Dollar

	Unit: New Taiwan Dollar	Unit: New Taiwan Dollar
year project			2019	2020	2021
Per share Market price (Note 1)	Most high		10.70	10.50	11.00
	Most low		8.60	4.90	8.94
	Level are		9.52	7.88	10.19
Per share net worth	Before distribution		11.48	10.82	-
	After distribution		-	-	-
Per share surplus	Weighted average number of shares(thousand shares)		197,479	193,138	-
	Earnings per share (Note 3 )	Before retrospective adjustment	(1.39)	(0.61)	-
		After retrospective adjustment	(1.39)	(0.61)	-
Per share dividend	Cash dividend		0.1	（note 2）	-
	Free	Earnings	-	（note 2）	-

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	Allotment	allotment
		Capital reserve allotment	-	（note 2）	-
	Accumulated unpaid dividends		-	-	-
investment remuneration analysis (Note 4)	PE ratio		(6.85)	(6.85)	-
	Ben Libby		95.20	（note 2）	-
	Cash dividend yield ( % )		1.05%	（note 2）	-

Note 1 : The source of information is the website of the Taiwan Stock Exchange.

Note 2 : 10 8 annual dividend distribution yet 10 9 annual shareholders' meeting acknowledged. Note 3 : Retrospective adjustment calculation of the unpaid allotment.

Note 4 : PE ratio = average closing price per share for the year / earnings per share; PE ratio = average closing price per share for the year / cash dividend per share; cash dividend yield = cash dividend per share / share per year Average closing price.

( 6 ) Company dividend policy and implementation status

1. Dividend policy

According to the company's articles of association, the company shall allocate 1% to 10% of the employee's compensation according to the pre-tax benefits of the current year after deducting the distribution of employee compensation and the benefits before the directors and supervisors' compensation. It may include employees of subordinate companies that meet certain conditions; the company is able to open the profit amount, and no more than 3% of the board of directors' resolution shall be remunerated by the directors and supervisors, and will be paid in cash only. Employee compensation and the distribution of compensation for directors and supervisors shall be reported to the shareholders' meeting. However, when the company still has accumulated losses, it should first set aside to make up for the losses.

The company's dividend policy considers the changing industrial environment, the company's life cycle is at a stage of stable growth, and the company's future capital needs and long-term financial planning. If the company has a surplus after the annual accounts, in addition to paying the profit business income tax after previous years' losses outside, it should be set aside ten percent of the statutory surplus reserve, mentioning the competent authority in accordance with the provisions of the rotary column or special reserve, which have remaining terms beginning plus undistributed earnings distributable surplus, distributable earnings mention Allocate no less than 10% to distribute shareholders ’ dividends, and distribute shareholders ’ dividends. The board of directors shall prepare a surplus distribution proposal and submit it to the shareholders ’ meeting for resolution.

The distribution of shareholders' earnings can be distributed in the form of cash dividends and stock dividends, but cash dividends of less than 0.1 yuan per share will not be paid. The distribution of shareholder dividends, of which cash dividends account for 30% to 100% of the total dividend, and stock dividends account for 0% to 70% of the total dividend . The ratio of the aforementioned surplus distribution depends on the actual profit and capital status, and is adjusted by the resolution of the shareholders' meeting.

1. The company's board of directors approved the 2020 surplus distribution proposal on March 9, 2021, as shown in the following table. This proposal will be submitted to the general meeting of shareholders on May 27, 2021 after the resolution is passed and processed in accordance with relevant regulations.

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NT $ 0.1

Capital reserve allocation NT $ 0.1 NT.19.133,100 cash dividend

1. The situation where the dividend policy is expected to change significantly: None.

( 7 ) The impact of the proposed free share placement at the shareholders' meeting on the company's business performance and earnings per share: None.

( 8 ) Remuneration of employees, directors and supervisors

1. The percentage or scope of remuneration of employees, directors and supervisors contained in the company's articles of association: detailed ( 6 ) description.

2. The basis for estimating the amount of compensation for employees, directors and supervisors in the current period, the basis for calculating the number of shares for employee compensation for stock distribution and the accounting treatment when the actual distribution amount is different from the estimated amount: according to the company's articles of association The estimated remuneration of employees, directors and supervisors that may be issued is listed as an appropriate accounting item under operating costs or operating expenses according to their nature. If there is any difference between the actual distribution amount and the estimated number of the current period, it is regarded as the estimated change and listed as the current profit and loss of the distribution.

3. Remuneration situation of the board of directors through distribution :

(1) to employees and directors remuneration in cash or stock distributions, supervisor compensation amount: the Company 2020 of losses, so 10 8 annual remuneration to directors and supervisors and employees, assigned amount of 0 dollars.

(2) The amount of employee compensation distributed by stocks and the proportion of the total net profit after tax and the total employee compensation for individual or individual financial reports in the current period: Not applicable .

1. The actual distribution of the remuneration of employees, directors and supervisors in the previous year ( 2019 ) (including the number of shares distributed, amount and stock price), and the difference between the remuneration of the recognized employees, directors and supervisors and the differences should be stated number, causes and treatment scenarios: the company 2019 actual amount allotted annual employee compensation and remuneration of directors and supervisors and 10 7 no difference in the amount recognized in the annual financial report.

( IX ) The company buys back the company's shares:

2021.3.31

pany buys back the company's shares:	20
Buybackperiod	The 13 times
Board Resolution Date	2019.6.25
Buybackpurpose	Transfer of shares to employees
Buybackperiod	2019/7/1 ~ 2019/8/23
Buybackprice	NT$7.00-12.00yuan
Type and quantity of shares repurchased	Common stock 5 , 000,000 shares
Amount of shares bought back	NT$47,543,967 Yuan
The ratio of the quantity bought back to the quantity bought back (%)	1 00%
Number of shares cancelled and	-

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transferred Cumulative number of shares held bythe company Cumulative number of shares held by the Company's total issued shares of the total ratio(%)
	Common stock 5 , 000,000 shares
	2.51%

1. The situation of handling corporate bonds : None.

2. The handling of special shares: none.

3. The handling of overseas depository receipts: None.

4. Situation of employee stock option certificate processing: None.

6, restrict the rights of employees to deal with new shares: none.

1. The situation of handling the issuance of new shares by M & A or transfer of other company shares: None.

2. Implementation of the fund utilization plan :: None.

Operation Overview

1. Business content

( 1 ) Business scope

1. The main content of the business

(1) Sale and purchase of various machinery and hardware equipment.

(2) Sale and purchase of various mechanical parts and tools.

(3) Manufacturing, processing and trading of flat knife grinders and semi-finished flat knife grinders.

(4) Design, manufacture, processing and trading of working machine, chemical machinery, mining machinery, hydraulic machinery and various other machinery.

(5) Design, manufacture, processing and trading of various machines.

(6) Design, manufacture, processing and trading of various furniture and kitchenware.

(7) The previous bidding and contracting business related to installation projects.

(8) Trading of chemical raw materials (non-toxic).

(9) The import and export trade and agency business of the related products.

(10) The previous items related to the leasing business of mechanical products.

(11) The previous printing business related to mechanical products.

(12) General import and export business (except licensing business).

2. Operating proportion

Unit: NT $ thousand

proportion ousand
Term project	2020
	Turnover	Operating proportion
Machine mechanical	2,626,359	81.79%
Board material	584,587	18.21%
Co- Total	3,210,946	100.00%

1. The company's current products

(1) Machinery: Computer numerical control machining center and various types of computer numerical control industrial machinery (suitable for metal and non-metal) and computer curved

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surface grinder and related tools, spare parts, printed circuit board drilling machine, forming machine and testing machine

(2) sheet metal: lumber, veneers and building materials, but is positioning the company as a professional Machinery Company, 2013 Nian 5 of month investment of NT $ 5 , 000 million yuan to set Yuk Tak Industrial Co., Ltd., to undertake the business of the Company Sheet Division , full-time business career plate, and since 2013 Nian 8 month officially opened .

4. New products planned to be developed

• (1) Precision Machinery Factory:

• Development of integrated system for robotic arm manufacturing applications

• Development of 3D printing + five-axis machining compound machine

• Automated storage system development

• Development of automatic sorting system

• (2) Printing Machinery Factory:

• Development plan of smart digital printing machine for packing box

• Development of mask printing machine

• (3) Spindle factory:

• Development of ultrasonic HSK63F DC central jet spindle

( 2 ) Industry overview

1. Industry status and development

A. Machine tools are used in the woodworking industry

The home furnishing industry has been in existence since humans started building houses. The development of modern industry and technology has enabled this industry to continuously innovate in materials and production technology. The more highly developed the economy, the higher the human requirements for home quality. Therefore, the home furnishing industry is an indispensable industry to meet the four basic needs of human food, clothing, housing, and transportation. Since essential household industry, the industry of this essential raw material - sheet is bound and can not be completely replaced in the foreseeable future, and Taiwan is a lack of natural resources of the region, its demand for the plate, will always be dependent on imports. Looking around Taiwan and advanced countries in the world, after the national income has increased year by year, in addition to the basic needs of human beings, the home environment and supplies have developed in the direction of comfort, refinement, and beauty. Therefore, a small amount of product diversification is an inevitable trend. However, traditional labor and processing machinery have either increased wages due to rising labor awareness, or insufficient mechanical accuracy to effectively and economically meet consumer demand. Instead, computerized CNC machine tools combined with high-precision electronic technology have emerged. In addition, the vigorous development of modern material science has not only diversified the materials of the home industry, but also achieved many other industries such as electronics, sculpture, mold, sports equipment, and plastics. However, if these industries want to produce products with economic benefits, all need to use computer numerical control machinery in the manufacturing process.

The machinery industry is the cornerstone of a country's industrial development. Its technological evolution also represents the symbol of a country's national strength. The machinery industry covers almost all human needs and is widely used. The machinery industry is the mother of industry. It plays a key role in the development of the industry and the promotion of economic growth and foreign trade. The driving force behind industrial development for R & D, production, manufacturing, and service is the machinery and equipment. Its characteristics and various

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downstream applications such as the development of the aerospace industry and defense industry, automobile and general machinery, metal processing industry and other closely related, so the development of machinery industry has far-reaching and amplification to enhance the overall added value of industrial output of Taiwan's shadow ring. The home furnishing industry is a basic human industry. On the whole, as long as the industry is more advanced, it cannot fail to rely on machinery. As long as humans exist, home furnishing will inevitably occur, and related materials will always exist.

Affected by the spread of the COVID-19 epidemic since 2020, the performance of the global economy has severely declined, and uncertain factors affecting the global economy have increased, which is quite detrimental to the exports of my country's machinery and equipment manufacturing industry. This industry is deeply influenced by the performance of global economic growth. In particular, China is the largest export market for my country's machinery industry. It is affected by the epidemic and the US-China trade war. China's manufacturing industry has been hit and the demand for machinery and equipment has weakened. To make up for the loss of orders in the US market, and to switch products to domestic sales, the emergence of import substitution effects is also detrimental to the development of my country's machinery industry in the Chinese market. In the domestic market, due to the US-China trade war, the return of Taiwanese businessmen has increased significantly, and the return of the electronics industry to Taiwan to expand investment is more obvious. Therefore, since 2020, the expenditure on machinery and equipment in my country's manufacturing industry has increased, and the investment growth in the electronics industry is the most powerful. Strong; however, the equipment needed by the electronics industry relies mainly on imports, while the traditional manufacturing industry is relatively conservative in investment willingness, leading to a shrinking trend in domestic sales in this industry. Therefore, under the influence of the reduction in the scale of procurement from the Chinese market and the conservative investment in traditional domestic manufacturing, the output value of machine tools in the third quarter of 2020 was NT$24.01 billion, a decrease of 7.6% compared with the second quarter of 2020, and compared with the first quarter of 2019. In the third quarter, it decreased by 33.7%. The third quarter continued to be hit by the pneumonia epidemic, and the global export value of Taiwan's machine tool products decreased by 15.5% compared with the same period in 2019. The value of exports to Europe and Southeast Asia decreased by 40.6% and 39.2% respectively over the same period last year. Due to the continuous recovery of China's manufacturing industry, demand for automobile and 5G infrastructure manufacturing has increased; in the third quarter, the amount of machine tools exported from Taiwan to mainland China increased by 11.6% over the same period last year. The global market demand for machine tools is closely related to the normal operation of manufacturing industries in various countries. After China's manufacturing industry resumed work at the end of March, the amount of machine tools exported from Taiwan to China continued to increase in the second and third quarters. After the spread of the epidemic in Europe in March, the operation of the manufacturing industry was still greatly affected due to the delay in effective control. As a result, Taiwan's exports of machine tools to European countries in the second and third quarters of this year were significantly reduced compared with the same period last year.

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The output value of my country's machinery industry in the third quarter of 2020 Unit: NT $ 100 million; %

==> picture [483 x 355] intentionally omitted <==

Source: Executive Yuan Office of Accounting and Statistics, Monthly Production Statistics Report of the Ministry of Economic Affairs

Output value of machinery and equipment industry: ITIS research team of International Institute of Obstetrics, Industrial Research Institute

Metal mold industry output value: ITIS Research Team of Metal Center

B. Machine tool used in automobile industry

Taiwan's machine tool application industry has gradually covered from the early dense processing to national defense, aerospace, automotive, 3C , semiconductor, rail, etc. The application is widely used. Due to the complex manufacturing process of machine tools, the required is huge , Must rely on the supply of factory, the upstream upstream except the 了 controller must rely on imports, the rest includes transmission and air pressure components, belong components, cast iron, tool magazine, etc. Taiwan's machine tool industry has a complete intermediate system, and the

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upstream and downstream relations are close , So the original supply can be self-sufficient. At present, Taiwan machine tool manufacturers have mature applications in steam engine components, accounting for more than 30% to 60% of the manufacturer ’ s revenue , including cylinders, crankshafts, bumpers, molds, disc brake discs, tire molds and aluminum rings, etc. It can be enlarged and produced by the machine tool. Except, aerospace and shale oil Taiwan Machine Tool Factory also began to have products.

According to research institute IHS Markit, car sales in major global markets fell to 76.8 million units in 2020, a drop of more than 15% compared to 90.3 million units in 2019. In 2020, affected by the spread of the COVID-19 epidemic, global car sales have also fallen sharply during the epidemic storm when most people stay behind closed doors. IHS Markit predicts that car sales in 2021 will rise steadily from 76.8 million in 2020 to 84.4 million. It is estimated that by 2025, global car sales will reach 94.8 million vehicles.

C. Machine tool used in aerospace industry

The demand turbulence caused by COVID-19 will not be subdued for a long time. In October 2020, Boeing revised down its global passenger aircraft delivery expectations for the next 10 years, and estimated that demand will rebound with the development of new technologies from the 2030s. Boeing predicts that in the next 10 years, global demand for commercial aircraft will reach 18,350, a decline of 11% from the expected one year ago, and the total market value will reach US$2.9 trillion. With the development of new aircraft types and technologies, Boeing expects that global passenger aircraft deliveries will rebound in the 2030s and reach 43,110 in 2039, a decrease of 2% from last year’s forecast. Three-quarters of them will be used for single short-haul routes. Aisle jets.

Single-aisle airplanes are the mainstream of the market, accounting for more than 70% of the number of new airplanes in the world. The main growth momentum comes from low-cost airlines. Because of their cheap air tickets and the growth of consumption in tourism-related industries in the world economy, the demand for air travel has increased. The company's composite material processing machines and metal processing machine tools can be used in the aerospace industry. Therefore, in recent years, the company has extended the industry to aerospace-related supply chain industries through overseas mergers and acquisitions. In order to demonstrate the synergy of the merger in 106, it is expected that the company's aerospace-related application tools will grow with the high growth momentum of the international aerospace industry.

2. Relevance of industry upstream, midstream and downstream

A. Precision machinery and plate industry

The manufacturing process of Taiwan's precision machinery is mainly started from product design and development, followed by outsourcing procurement and quality inspection of related components, and then through precision assembly and testing. The mechanical assembly part can be roughly divided into three stages, which are electrical assembly. , Machinery assembly and software applications ( applicable to CNC models), the upstream is mainly a professional division of machinery, motor parts and components suppliers and the information industry, while the downstream is non-ferrous metal materials processing and application industry. The correlation between the upstream and downstream industries of the precision machinery and peripheral products sheet industry is as follows:

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==> picture [522 x 513] intentionally omitted <==

B. Electronic machinery industry

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==> picture [500 x 520] intentionally omitted <==

3. Various development trends of products

(1) Machinery:

A. Precision machinery

The price of the computer numerical control machining center produced by our company is between USD 100,000 and 200,000. It is mainly designed and manufactured according to the different processing needs of non-metallic fiber material cutting, grinding, drilling and shaving in the production process of the customer. The function can be up to five-axis machining. In the future, as industrial products become more complex, five-axis machining centers will become a high value-added model that the market is chasing after. In addition, due to the rise of computer numerical control machining centers, in developed countries and developing countries with increasingly high labor costs, all walks of life have all wondered how to replace the old semimanual processing machinery with more automated, more precise and fast modern machinery. To

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produce more competitive products. After more than ten years of R & D and technology rooting, the company has a strong foundation. In addition to facing the demand of various customers for the more stringent five-axis processing machines, it also provides small and medium-sized enterprises in industrial upgrading with the expectations of automated machinery. Therefore, the computer numerical control machining center is no longer just the demand of large-scale manufacturing and precision industry, but a comprehensive and indispensable model in industrial upgrading. This trend will create space for the company's machinery development to create massproduced models with bids below US $ 100,000 and advanced models with special specifications at prices above US $ 200,000.

Another of the company through global mergers and acquisitions layout, in 104 years 8 months and 106 in 3 Yue were acquired German precision machinery

manufacturers Monforts and Matec after successfully there are the high-order five-axis precision machine tools composite products, composite materials and a carpentry The processing equipment market is extended to aerospace and automotive applications. The products are mainly tailor-made machine tools, including CNC rotary working machines, movable column tool machines and gantry series machine tools. The suitable materials are wood and composite materials. Expanded to steel and other non-ferrous metals.

B. Electronic machinery

The output value of printed circuit boards on both sides of the Taiwan Straits is the world's leading position, and one of the main processing machines of printed circuit boards is drilling machines and forming machines. These mechanical characteristics are high precision and high speed, and users need a lot of processing, so they are stable. Sexual demand is also high, and under the environment of huge market and fierce competition, it will be the future development trend to reduce costs and cooperate with customer process technology to continuously improve product quality.

(2) Panels: Natural fiber panel materials required for furniture and architectural decoration in Taiwan. As Taiwan ’ s environmental protection policy prohibits logging of forest trees, almost 100% relies on imports. In the early days, such raw materials were mainly made of various solid wood. In the past more than ten years, OA office furniture and Europeanized kitchen utensils have been favored by consumers, making raw materials made of Mica board increasingly popular. In the future, raw materials with fire-resistant materials will play a very important role in the market because consumers and the government attach importance to public safety. The company is positioning as a professional machinery company, 2013 Nian 5 months reinvestment of NT $ 5000 million to establish Yuk Tak Industrial Co., Ltd., to undertake the business of the Company Sheet Division, operating full-time career plate, and since 2013 Nian 8 month officially opened .

4. Competition

(1) Machinery:

A. Precision machinery

The main machine produced by our company is a computer numerical control machining center with the highest added value in woodworking machinery. There are very few similar industries producing similar products in China, and its scale is not enough to compete with our company. Therefore, almost 90% of the domestic market is our company. product. China's woodworking machine output value is second only to Germany, Italy, and China in the world, and its export value exceeds Japan's fourth in the world. Among the well-known woodworking machine manufacturers in Germany, Italy and other countries, those who produce similar models of the company include Germany HOMAG , IMA , MARKA , REICHENBACHER ; Italy CMS , SCM ; American KOMO, etc. In order to expand the export market, the company has established subsidiaries in Germany and the

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United States to market and provide after-sales services, and has a place in the European and American markets. In addition, with excellent and stable quality and flexible marketing strategy, the company has become the imported brand with the highest sales volume of CNC machining centers in the US market. The main problems currently facing Taiwan woodworking machinery, such as the lack of international marketing talents facing the European and American markets, how to strengthen the operation of the mainland market and reduce the threat of mainland

woodworking machinery to Taiwan products, the appreciation of the Taiwan dollar, how the industry should respond, etc., are industry concerns. Question. The company has a wide range of precision machinery applications . In addition to securing existing channels, it will continue to deepen the mainland, Southeast Asia, and Brazil. It will also develop the Indian market, design suitable models for the local market, and sell through agent sales. The mainland factory actively establishes a sales service base, develops new models suitable for local customer grades, and strives to sprint into the domestic demand market. The Taiwan factory continues to develop high value-added products to increase profits. The signing of ECFA will help the machinery and equipment industry expand the mainland market. In addition, the inkjet printing machine is a new product of the company in the past three years. A special department in the Chinese-

speaking area will be set up to promote the successful application of the past to mainland China and Southeast Asian furniture decoration and advertising companies. In addition, combined with market demand, we develop customized application-specific printing equipment to seize new market opportunities.

In addition , after acquiring the German precision machinery

manufacturers Monforts and Matec through the global merger and acquisition layout, the company successfully cut the existing high-end five-axis composite precision machine tool products into aerospace and automotive applications. The products are tailor-made machine tools. including CNC turning machine work, moving gantry series cylindrical machine tools and machine tools, the main customers include aircraft manufacturers Airbus (Airbus) and

Boeing (Boeing) companies, car manufacturers BMW , Volkswagen , and Rolls Royce company, to expand the air Too with the automotive market.

B. Electronic machinery

The company's main products in electronic machinery are printed circuit board drilling machines and forming machines. At present, the products in the market are well-recognized and have a high market share. These are the results of more than 20 years of research and development technology. The main axis of its main components has been successfully developed and partially self-made, which will effectively reduce costs. In the future, the self-made rate of other key components will be expanded to become the largest competitive niche. At present,

the PCB industry has moved a lot to the mainland. The company has marketing service bases in Shanghai, Beijing, and Shenzhen, which can quickly meet customer needs and create competitive advantages. As the global financial tsunami gradually moves away, the printed circuit board industry expands equipment purchase opportunities, and mainland China continues to promote the expansion of domestic demand policies. The company will continue to train production, marketing, and service personnel in an all-round manner, adding service bases to meet customer needs to expand market share.

(2) Panel: Due to the low barriers to industry entry, there are many competitors in the panel market. Among them, Muraboard is supplied by Europe. Although the wood-rich regions in the world have markets in Taiwan, they are still dominated by American wood. Both Europe and the Americas have subsidiaries, which have advantages over their peers in terms of source of supply and price, and have established complete computer-connected storage and transportation centers and sales networks in Taipei, Taichung, and Kaohsiung. In order to integrate sheet inventory

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management, the company has completed the establishment of a domestic shipping center, which will centralize the inventory management of warehouses scattered in northern, central and southern Taiwan to reduce warehousing costs. Most of the competitors are still regional family or individual companies, which is not enough to cause huge competitive pressure on the company. ( 3 ) Overview of technology and R & D

1. Technical level

Looking forward to the development trend of industrial machinery in the future, it will gradually upgrade towards automation and computerized machinery. The company ’ s efforts and equipment invested in R & D and design for many years will be the driving force for the development of new models in the future. In terms of precision machinery, the company has developed in recent years Successful development of various CNC five-axis processing machines, air bearings ( AIR PAD ), water-cooled high-speed spindles, moving column five-axis machines, tilting five-axis machines, CAD / CAM software, etc. The development of printed circuit board drilling machines, forming machines and text printing machines, etc., shows that the company has invested in the development of key components and the strength of new product development. After design and development and procurement of components and parts for precision machinery and electronic machinery, the intermediate process requires professional and technical personnel to carry out careful assembly and precision testing. The turnover rate of the company's technical quality control personnel is very low, and considerable attention is paid to professional training of personnel technical training, except for domestic In addition to academic machinery training courses, it also provides opportunities for foreign machinery professional seminars. The professional technical experience accumulated over the years of training has made the company the first precision machinery factory in China to pass the German ISO9001 certification and the European CE certification.

The company and its management industry trend of globalization judgment, since 66 since the establishment of the northern, central and southern marketing positions, the first of a new marketing model "woodworking machinery province traveling exhibition", and in 82 onwards respectively, in Europe, the Americas Established a subsidiary in Singapore and used a computerized management system to master production, sales and property management and other control processes. Through the response of international market information, carefully selected niche products and used product sales strategies. 86 years to play a more investment in research and development of electronic machinery, as Taiwan is the world's third-

largest PCB producer, and close to the mainland market, after-sales services and machinery industry has always been one of the factors for the customer decides to buy, because the company will be close to market , Can provide customers with integrated technical information services, so that the company is more conducive to international development.

1. Research and development

The company attaches great importance to research and development, has a research and development department, under the electronic control design department, mechanical design department, spindle room and software application group.

Research and development expenditure and results in the last two years and up to the date of publication of the annual report

Unit: Thousand Yuan

d Yuan
Years of	Gold Amount	Research and development achievements
2019	88 , 167 ( Note 1 )	NC series automatic loading and unloading machine development Development of high-precision spindle head set (torque motor version)

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		Development of high-speed high-precision thin aluminum sheet processing machine Development of fully automated six-sided plate drilling machine Three-dimensional digital printing two-liquid environmental protection leather technology development Development of aerospace composite material cutting machine Development of compact inkjet printer series Development of HSK63F DC central jet spindle HSK63A spindle development 1M36 grinding spindle development Exquisite development of molding machine Refined development of laser product line Automated integrated design and development Unicen aerospace processing machine B-axis and C- axis improved development Development of new Unicen aerospace processing machine
2020	82,159- ( Note 2 )	Development of flexible head processing machine Development of automatic complete line processing machine for composite door panels Development of light five-axis machine Development of high-precision five-axis spindle head group Development of synchronous permanent magnet spindle Development of wide-format monochrome rapid printingautomation line
As of the printing date of the annual report	- ( Note 2 )	Development of integrated system for robotic arm manufacturing applications Development of 3D printing + five-axis machining compound machine Development of automated warehousing system Development of automatic sorting system Development plan of smart digital printing machine for packing box Development of mask printing machine Development of ultrasonic HSK63F DC central jet spindle

Note 1 : The value of the consolidated financial statements verified or verified by the accountant.

Note 2 : As of the date of publication of the annual report, there was no recent financial information verified or reviewed by an accountant.

( 4 ) Long-term and short-term business development plans

1. Short-term plan

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(1) Production

A. In response to the increasingly widespread application of precision machinery and the vigorous development of Taiwan's electronics industry, various electronic manufacturers have increased their production capacity. It is expected that the demand for electronic equipment and precision machinery will increase accordingly, and the company's existing production capacity will be slightly Insufficient, so planning to increase the production plant and raw material warehouse of mechanical assembly, in order to increase production and strengthen competitiveness.

B. According to the sales situation and market survey results, in addition to order-based production, several standardized and standardized models are designed according to capacity, and planned production schedules are adopted to increase capacity utilization, reduce production costs, and expect product prices and performance Advantage, increase market share.

C. Considering the cost and the huge demand for the tool market in mainland China, the company expects to move the tool production to the mainland and produce it by its subsidiaries. Component quality and cost reduction.

(2) Product development capabilities

A. Strengthen the research and development of key components

High-speed spindle: The company has developed an air-cooled 10Hp , 24000rpm high-speed spindle based on self-developed technology, combined with the cooperation of the Institute of Mechanical Engineering and the academic community , and uses a higher-level technology for grease lubrication. Continue to complete 15Hp , 24000rpm oil mist and grease and other products. High-speed feed: Saving time during cutting feed and movement will be one of the future trends. The company plans to invest in feed technology research and development to enhance product competitiveness.

B. R & D of new product lines

Using core technology and foreign technical cooperation to develop the following new products:

a. Development of flexible head group processing machine

• b. Development of NC series automatic loading and unloading machine

• c. Development of entry-level five-axis machine (Fagor controller )

• d. Development of high-precision spindle head group

• e. Development of permanent magnet high-speed spindle

f. Development of wide-format monochrome rapid printing automation line

C. In addition to continuing to implement employee education and professional skills training, and not regularly arranging employees to participate in international technical training courses to improve the professionalism of personnel, it also plans to extend the recruitment of technical, technological and other professional engineers into the research and development lineup. (3) Marketing strategy

A. Strengthen the market development capabilities of overseas subsidiaries in Europe, America, Southeast Asia and Mainland China, increase business and technical personnel, and provide fast and good sales and after-sales service. In addition, it collects new product market and application technology development information locally to provide reference for manufacturing design and R & D units.

B. Add domestic and foreign sales service bases. In addition to providing product sales and aftersales service nearby to meet customer needs and strengthen their own brand image, they also provide information on new products at any time through the collection and control of regional market information Give play to the interactive function of research and development and production and marketing coordination.

(4) Operation management

A. Establish a global information network, build a video conferencing system, and perform real-

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time management to save management costs.

B. Strengthen the management of inventory and accounts receivable, reduce the need for funds and reduce the cost of funds.

2. Long-term development plan

(1) Production

A. The company expects to gradually increase the proportion of CNC machinery output, so that the company's own brand machinery is sold at home and abroad to increase market share and expand domestic machinery production plants to increase machinery production capacity.

B. Based on considerations such as regional production and consumption factors, the possible implementation of international protection policies in the future, and access to the market to master sales channels, we plan to find suitable overseas assembly plants in the future, use local production resources nearby, reduce production costs, and increase the product line. The depth and breadth enable the company to become a professional CNC machine manufacturer with international reputation .

(2) Product development capabilities

A. Continue to develop new functions or key components of CNC machinery and seek to replace imported related components to strengthen CNC machinery manufacturing technology capabilities and improve product quality.

B. Through the successful development and mass production of printed circuit board drilling machines and molding machines and other machinery, the company has successfully entered the field of electronic machinery business. With the booming of the electronics industry, the demand for related electronic machinery will increase relatively. In the future, the company plans to cooperate with relevant institutes such as the Institute of Mechanical Engineering of the Industrial Technology Research Institute to develop a series of electronic industry-related machinery, such as motherboards, semiconductors and other industry-related electronic machinery equipment. Import, enhance national competitiveness.

(3) Marketing strategy

In addition to strengthening the sales performance of sales locations in various regions of the world, taking into account factors such as the number of sales customers in each region, installation technical guidance and after-sales maintenance services, etc., it is planned to set up technical support centers in important overseas markets to provide technical and parts services nearby To meet customer needs and maintain the company's quality image.

(4) Operation management

Planning for overseas subsidiaries and overseas assembly plants to conduct computer connection operations in the future will not only manage the overseas reinvestment business overview in real time, but also help in product marketing, cost control and capital management operations, and upgrade the Taiwan head office to research and development, manufacturing and The financial control center can also quickly grasp information such as market information, new product design and technology, and market strategies in order to cope with the treacherous and changing environment of the global economy. Such a management model can pave the way for the future management of multinational enterprises.

1. Overview of the market, production and sales

( 1 ) Market analysis

1. Sales (provided) regions of major products (services)

The company mainly produces precision machinery, electronic machinery, hardware knives, plates and other products. The main sales areas are as follows:

Unit: NT $ thousand

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Region	2020
Germany	932,886
Taiwan	535,361
China	467,355
United States	404,488
Australia	178,512
Brazil	99,843
Thailand	15,177
other	577,324
total	3,210,946

2. Major competitors

(1) Precision machinery: There are many types of precision processing machinery products, and most of them are small-scale manufacturers in China. Most of them can only produce or sell some models. According to the directory information of the China Woodworking Machinery Development Association, domestic manufacturers or agents sell CNC machinery manufacturers. In addition to Ende, there are companies such as Zhonggong Machinery, Changfeng, and Binmao. As for Germany, Italy and other well-known manufacturers of precision processing machines in the country that produce models similar to our company, there are German companies such as HOMAG , IMA , MARKA , REICHENBACHER , Italian CMS , SCM , and American KOMO .

(2) Electronic machinery : Well-known foreign manufacturers of PCB machinery include Japan HITACHI , Germany SCHMOLL and other companies, while Taiwanese counterparts are a large number of companies, Longze, Dongtai and other companies .

1. The market's future supply and demand status and growth mechanical

(A) Precision machinery

The company's precision machinery is mainly computer numerical control metal , non-ferrous metal and composite material processing machines, mainly divided into woodworking machinery, composite material processing machinery, and metal processing machinery. The description of each machine is as follows:

(a) Woodworking machinery

The company is mainly a computer numerical control machining center and spindle with the highest added value in woodworking machinery. It has very few peers in the domestic production of similar products, and the scale is not enough to compete with the company. Therefore, it has a 90% market share in the domestic market. company's product. Taiwan's woodworking machinery used to be mainly sold domestically. As the furniture and woodware industry moved out to Southeast Asia and the mainland, and now it has focused on the export market, Southeast Asia and the mainland have become the most important market for Taiwan's traditional woodworking machinery; computer numerical control and automation machinery, It has been dominated by Europe and the United States, and there has been a trend of increasing demand in Southeast Asia in recent years; DIY machinery has always been export-oriented, and the regions are mainly North America and Europe, which can be differentiated by the difference in target market. According to customs export statistics, the main export markets are North America (US and Canada), mainland and Southeast Asia (Vietnam, Malaysia, Indonesia, Thailand, etc.) (detailed in the table below), most of which are low-price sawing machines, woodworking lathes, etc. DIY machinery is the main, followed by high value-added processing machinery. In addition to the main export markets for woodworking machinery, developing countries such as India, Turkey, Russia and Eastern Europe are

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another emerging market for Taiwanese machinery manufacturers.

Taiwan Woodworking Machinery from 82 annual output value exceeded NT $ 100 after the yuan, the development so far in Taiwan Woodworking Machinery has become the world's third largest exporter after Germany and Italy. With the move of building materials and furniture industry in Taiwan to Southeast Asia and mainland China, Taiwan ’ s woodworking machinery has also moved its production bases to Europe and the United States. Therefore, the demand for woodworking machinery in the region has grown significantly. Since Southeast Asian countries and mainland China are Chinese communities Leading the development of industry and commerce, similar culture and living habits, Taiwan has successfully opened the export market here. In recent years, due to the vicious competition of the domestic industry, the profitability has been poor, which has led to a decline in the proportion of Southeast Asian exports; on the contrary, the value of exports to mainland China has increased significantly. The region ’ s demand for construction and decoration industries is high, which has led to the development of the woodworking machinery industry. Over the past few years after the United States Woodworking machinery second largest export market, but from 99 onwards it has surpassed the United States ranks first in Taiwan's exports.

The most representative countries for global export such as Germany, Italy and Taiwan, because the United States is currently dominated by the North American market and exports are still small, while Germany, Italy and Taiwan, Taiwan and Italy products are more competitive in export.

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==> picture [418 x 460] intentionally omitted <==

• (b) Composite material processing machinery (applicable to the processing of automotive and aerospace industry related supply chain equipment and car bodies)

Taiwan's machine tool application industry has gradually covered from the early dense processing to national defense, aerospace, automotive, 3C , semiconductor, rail, etc. The application is widely used. Due to the complex manufacturing process of machine tools, the required is huge , Must rely on the supply of Xie 力 factory, the upstream upstream except the controller must rely on imports, the rest includes transmission and air pressure components, belong components, cast iron, tool magazine, etc. Taiwan's machine tool industry has a complete intermediate system, and the upstream and downstream relations are close , So the original supply can be self-sufficient.

At present, Taiwan machine tool manufacturers have mature applications in steam engine components, accounting for more than 30% to 60% of the manufacturer ’ s revenue , including cylinders, crankshafts, bumpers, molds, disc brake discs, tire molds and aluminum rings, etc. It can be enlarged and produced by the machine tool. Except, aerospace and shale oil Taiwan Machine Tool Factory also began to have products 切 .

According to research institute IHS Markit, car sales in major global markets fell to 76.8 million

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units in 2020, a drop of more than 15% compared to 90.3 million units in 2019. In 2020, affected by the spread of the COVID-19 epidemic, global car sales have also fallen sharply during the epidemic storm when most people stay behind closed doors. IHS Markit predicts that car sales in 2021 will rise steadily from 76.8 million in 2020 to 84.4 million. It is estimated that by 2025, global car sales will reach 94.8 million vehicles.

(c) Metal processing machinery (mainly used by customers in the aerospace industry and automotive industry)

Since it takes several years for aircraft to be ordered and delivered, the boom cycle of the aerospace manufacturing industry is slower than that of the demand-side air transport industry, but it is still closely related to the overall global economy and air passenger capacity. As the new crown epidemic has made global passengers remain cautious about air travel, Boeing said in its annual market forecast that it expects global passenger aircraft demand to drop sharply in the next 10 years. Boeing lowered the total value of aircraft and aviation services in the next 10 years to 8.5 trillion U.S. dollars, and lowered its forecast of the delivery volume for the next 20 years, which is the first time since the 2008 global financial tsunami. Boeing also lowered its global annual shipping volume growth forecast to 4%. In view of the fact that airlines and aircraft leasing companies are unable or unwilling to accept delivery of new aircraft ordered in recent years due to the epidemic, both Boeing and Airbus have significantly reduced their production rates.

(B) Electronic machinery

The company's main products are printed circuit board forming machines and drilling machines. With the rapid development of electronic products, the uses are becoming wider and wider. For example, 3C integration trend products, high-definition TV ( HDTV ), liquid crystal display ( LCD ) TV, multimedia sound effects, Video products, high-speed network interface cards and various IC cards have been launched one after another, as well as personal computers and notebook computers , which have grown rapidly with the continuous improvement of the CPU level, and their computer peripherals will continue to show growth trends in the future ..... etc. Due to the continuous growth of various electronic product markets, the printed circuit board industry, which provides electronic component support and interconnection circuits, has also grown steadily. There are many printed circuit board products, and there are currently many domestic producers and sellers of this product. The company's main products are printed circuit board forming machines and drilling machines. In 2013 , the global printed circuit board (PCB) output value was 18.6 billion US dollars, of which The total output value of China, Japan, Taiwan and South Korea exceeds 80% . China, Japan, Taiwan and South Korea are the most important bases for PCB production in the world . It shows that manufacturers in all regional markets have recovered from the last economic recession. Taiwan Printed Circuit Association (TPCA) estimated 201 9 Taiwan in PCB industry output value reached 6,562 billion yuan, compared with 201 8 Nian estimate of flat to slight growth performance . In addition, as the PCB industry moves towards Industry 4.0 , the use of ICT hardware, software and system integration technologies to make factory production behaviors have sensory networking, data collection and analysis, artificial intelligence virtual and real system integration and human-machine collaboration, will lead The industry has achieved "smart manufacturing",

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optimizing the production line's capacity allocation and production links, independently adjusting upstream and downstream supply and distribution, and tracking real-time production history and other special industrial revolutions. The molding machines and drilling machines currently produced by the company will also grow in the future with the growth of the printed circuit board industry.

B. Sheet metal

The company's board products mainly include wood, various high-grade building materials and Muraboard. The current market demand for such products is estimated to be about 5,000,000 thousand yuan. The company's sales have recovered after the financial turmoil and will continue to focus on the development of new Commodities, cooperate with suppliers to strengthen sales promotion, in order to increase the revenue of plate products.

4. Competitive niche

• A. Planned and flexible production, grasp market opportunities

The company has accumulated experience in R & D and design of CNC models over the years . In addition to flexible design to meet the diverse market needs and meet the processing needs of different customers, it also summarizes mechanical functions, analyzes, develops and designs modular production, reduces costs and shortens Machinery development time, products have the advantages of price, speed and flexibility, and make full use of CNC precision machinery technology to take the lead in entering the electronic machinery market and grasp the opportunities in the future machinery market.

B. Strong R & D strength, products have been repeatedly recognized

Looking forward to the development trend of industrial machinery in the future, it will gradually upgrade towards automation and computerized machinery. The ’ company s efforts and equipment invested in R & D and design for many years will be the driving force for the development of new models in the future. In terms of precision machinery, the company has developed in recent years Successfully developed " WOOD CAM Software", " Shaving Machine CAD / CAM Software" and " 10Hp / 2400rpm Spindle" and other R & D achievements, and successfully developed the first "printed circuit board drilling machine" in China in terms of electronic machinery.

• C. Precision assembly technology and quality control, product quality is stable

After design and development and procurement of components and parts for precision machinery and electronic machinery, the intermediate process requires professional and technical personnel to carry out careful assembly and precision testing. The turnover rate of the company's technical quality control personnel is very low, and considerable attention is paid to professional training of personnel technical training, except for domestic In addition to academic machinery training courses, it also provides opportunities for foreign machinery professional seminars. The professional technical experience accumulated over the years of training has made the company the first precision machinery factory in China to pass the German ISO-9002 certification and the European CE certification.

D. Smooth marketing network at home and abroad, providing integrated services

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Management of the Company and the industry trend of globalization judgment, since 66 since the establishment of the northern, central and southern marketing positions, the first of a new marketing model "woodworking machinery province traveling exhibition", and in 82 onwards respectively, in Europe, and the Americas Singapore set up a subsidiary, using a computerized management system to master production, sales and property management and other control processes, through the response of international market information, carefully select niche products and use product sales strategies. 86 years to play a more investment in research and development of electronic machinery, as Taiwan is the world's thirdlargest PCB producer, and close to the mainland market, after-sales services and machinery industry has always been one of the factors for the customer decides to buy, because the company will be close to market , Can provide customers with integrated technical information services, so that the company is more conducive to international development.

1. Advantages and disadvantages of development prospects and countermeasures:

2. A. Favorable factors

   • (A) Own brand and own channel. In addition to establishing a good product image, which is conducive to market promotion, the company is also committed to establishing its own marketing channel. It has established a dense marketing network both domestically and internationally, which is conducive to deep market cultivation. The customer source has long occupied the market.

   • (B) Diversified product operation, with low operational risk. The company has straddled non-metallic precision processing machines, printed circuit board processing machines and related knives in the machinery category; the board category also includes wood, Mineboard, building materials, etc. , Not affected by changes in the single-market boom and affecting the company ’s operations.

   • (C) With a small variety of production capabilities, the company's products have dozens of different types, which can quickly meet the different needs of customers under the design, production modularization and complete supply of Zhongwei components.

   • (D) The quality of the products is well-recognized. The company's products are the only domestic computer-controlled non-ferrous metal processing machines that have passed ISO-9001 and EU CE safety standards, which can help the expansion of the export market. Award, and the CNC five-axis non-ferrous metal processing machine won the national product image silver award, which shows that the excellent quality and the government will definitely be more popular among customers.

3. B. Unfavorable factors

   • ( A ) The homogeneity of products of different brands, high price competition, and short product life cycle.

     • Countermeasure :

     • a. Acting as an international strong brand with different market positioning, building a complete product line.

     • b. Actively develop the export market and build multi-brand product types.

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• c. Strengthen the differentiated marketing model of its own product, Flsah Content , to increase its sales value.

• d. Establish and operate long-term customer and supplier relationships.

• ( B ) High-speed air-floating spindles and controllers for key parts of electronic machinery are limited worldwide.

Countermeasure :

The company has sufficient R & D talents, and has begun the development of the main shaft project, and has achieved preliminary results. After mass production, it will eliminate the disadvantage of limited parts supply.

• ( C ) Existing competitors are getting bigger and bigger, and they have already integrated strategic alliance partners with upstream FAB factories. Countermeasure:

• To strengthen cooperation with customers, in addition to improving yield and shortening delivery time to meet customer requirements, it also introduces international big factories as strategic alliance partners to strengthen cooperation between the two parties.

• ( D ) Due to the fierce competition in the printed circuit board industry, the production technology has made rapid progress. In order to cope with the development of the industry, it also requires rapid upgrading of related production equipment. Countermeasure:

• In view of the short life cycle of mechanical products in the market, in addition to increasing research and development expenditures, the company has also obtained technical cooperation with foreign countries to cooperate with industrial development.

• ( E ) Most sheet products are imported, so exchange rate changes have a great impact on the company's profit.

Countermeasure:

The Company adopts moderate risk-averse financial operations to eliminate adverse factors of exchange rate changes.

( 2 ) Important uses of major products and production process

1. Important use of main products

2. (1) Machinery:

3. A. For different processing needs of cutting, grinding, drilling, forming and shaving of metal and non-metal fiber wood in the automated production process, it can be used for furniture industry, electronics industry, mold industry, carving industry, sports equipment industry, plastic Industry, automobile industry and aerospace industry.

4. B. Provide the flat knife and type knife required for the above functions of the machine.

5. (2) Plate:

6. It is used to manufacture interior furnishings and decoration for homes, offices and commercial establishments.

7. Production process

8. (1)

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==> picture [415 x 241] intentionally omitted <==

(2)

==> picture [415 x 199] intentionally omitted <==

• ( 3 ) Supply status of main raw materials

The company has thousands of mechanical raw materials, of which the main materials are cast iron, granite, controllers, motors, spindles, ball screws, etc. The suppliers are also in Japan, Germany, France and other advanced countries in addition to domestic and foreign, because the company operates CNC The machinery has a history of more than 20 years, and has a long-term good relationship with suppliers. It can meet the needs of the company in quality, price, and after-sales service. Up to now, no downtime has occurred.

• ( 4 ) List of customers who accounted for more than 10% of the total purchases and sales in any of the most recent two years

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1. The last two years have been accounted for in any given year the total purchase more than ten percent of the purchase amount and the name of the manufacturer and proportion : the Company's most recent two years in any given year No accounted into the total goods more than ten percent of manufacturers , It is not applicable.

2. The names of customers who have accounted for more than 10% of the total sales in any of the most recent two years and their sales amount and ratio : the company has not accounted for more than 10% of the total sales in any of the most recent two years Customers , it is not applicable.

( 5 ) Production value in the last two years

Value unit: NT $ thousand Quantity Unit: Machinery - Taiwan

				QuantityUnit: Machinery- Taiwan	QuantityUnit: Machinery- Taiwan	QuantityUnit: Machinery- Taiwan
Production value Major Products	2019			2020
	Production capacity	Yield	output value	Production capacity	Yield	output value
mechanical	702	702	2,100,010	660	660	1,502,945
total	702	702	2,100,010	660	660	1,502,945

( 6 ) Sales volume value in the last two years

Value unit: NT $ thousand Quantity Unit: Machinery - Taiwan

						QuantityUnit: Machinery- Taiwan	QuantityUnit: Machinery- Taiwan	QuantityUnit: Machinery- Taiwan	QuantityUnit: Machinery- Taiwan
Sales value Major Products		2019				2020
		Domestic sales		Export		Domestic sales		Export
		the amount	value	the amount	value	the amount	value	the amount	value
mechanical	mechanical	79	232,636	715	3,264,377	107	327,504	638	2,260,933
	Sale	note	18,880	note	20,808	note	21,017	note	16,905
Sheet metal	Sale	note	621,588	note	2,256	note	584,365	note	222
Total		79	873,104	715	3,287,441	107	932,886	638	2,278,060

Note: Sales and other products are not listed due to inconsistent measurement units.

3. Employees

Employee information for the most recent two years and up to the date of publication of the annual report

2021.3.31

ual report				2021.3.31
	year	2019	2020	The current year ends on March 31, 2021
Staff	Direct employee	243	220	220
	Indirect employee	423	315	310

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Number of people	R & D personnel	107	94	93
	total	773	629	623
Average age		43.1	43.4	43.5
Average years of service		9.3	9.9	9.5
Education distributed ratio	PhD	0	0	0
	master's degree	69	60	60
	College	339	297	293
	High school	333	249	248
	Below high school	180	32	28

1. Information on Environmental Protection Expenditure

2. The company's factory mainly produces CNC machinery and electronic machinery. It adopts the production method of the central satellite system. The central factory (the company) is responsible for development, design, assembly, and marketing. Most of the components are supplied by third-party manufacturers. During the manufacturing process, the central plant will not produce any pollution, let alone destroy the ecological environment. However, the company is still committed to the following measures to improve the working environment to provide a comfortable and employeefriendly environment to further improve work efficiency.

   • (1) Formulate safety and health work manual .

   • (2) Set up labor safety and health management units.

   • (3) Set up a complete fire protection system.

   • (4) Carry out work environment measurement.

   • (5) Carry out greening and beautification of the plant area.

   • (6) Cooperate with government environmental protection policies.

3. In the most recent year and as of the date of publication of the annual report, the total amount of losses and punishments due to environmental pollution and future countermeasures: Not applicable

V. Labor-management relations

• ( 1 ) Employee welfare measures, training, training, retirement systems and their implementation:

• Employees of the company as an important resource, so the company has always focused on labor relations, is sufficient to take care of employee

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benefits, in addition to the provisions of the Act must comply with labor matters handled, the implementation of staff general health check every year and encourage all employees ' work "Learning, working after learning " , through education and training to improve personal quality, increase work skills, improve team performance, and promote the realization of the group's " long-term, stable, development, technology, international " business goals. The company also has a number of measures to take care of employees.

• (1) Employee insurance:

• A. According to the provisions of Article 6 of the Labor Insurance Regulations, all colleagues shall join the labor insurance from the date of entering the factory.

• B. According to the nature of the work, personal accident insurance is insured, and the premium is borne by the company.

• (2) Implementation of employee salary adjustment, bonus and bonus system.

• (3) All employees, spouses, parents, and children of the company have subsidies or pensions due to marriage, maternity, and death.

• (4) Employee emergency assistance method.

• (5) Distribution of employee uniforms.

• (6) Employee's on-the-job and in-house academic training outside the factory.

• (7) Tourism and other employee activities.

• The retirement system and its implementation:

The company has a retirement plan, and all employees within the
establishment, who have served a certain seniority, or who have reached
a certain age or are unqualified for the job, can receive pensions
according to this method. The company allocates a monthly pension to
the Central Trust Bureau pension account.

In addition, since July 1 , 1994 , in conjunction with the implementation of the Labor Pension Regulations ( hereinafter referred to as the "new system" ) , employees who originally applied this method will be employed if they choose to apply for the service years after the new system or the new system is implemented. Employee's service years are changed to a definite appropriation system. The pension payment is paid by the company at a monthly rate of not less than 6% of the monthly salary, which is stored in the individual account of the labor pension.

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1. Labor-management agreements and various employee rights protection measures

   • The company's labor-management relationship has always been harmonious, and we have adopted a variety of communication and coordination methods between labor and management to ensure that both parties can get a common understanding and promote various tasks smoothly.

2. (1) Meetings of various departments, through which the appropriate communication with employees can be made, so that employees can fully understand and reflect employees' ideas in production operations, safety, health and quality control, and reach a consensus.

3. (2) Employee Welfare Committee discusses, at which the employers and employees can discuss various welfare measures to strengthen their relationship and serve as a reference source for administrative management.

4. ( 2 ) Losses suffered in the most recent year and up to the date of publication of the annual report due to labor disputes: None.

VI, important contract

Contractual nature	party	Contract date	main content	Restrictions
Medium-term loans	Taiwan Bank	107.09.18~ 112.09.18	The credit line is 120,000 thousand yuan, with a period of 5 years, with monthly interest payment, a total of 60 installments, and the monthly principal is evenly amortized.	no
Medium-term loans	Taiwan Small and Medium Enterprise Bank	107.12.24~ 110.12.24	The credit line is 50,000 thousand yuan. During the period of 3 years, 30,000 thousand yuan will be used, and interest will be paid monthly. There are 36 installments in total, and the principal will be amortized evenly on a monthly basis.	no
Medium-term loans	Royal Bank	108.03.14~ 111.03.14	Credit line of 100,000 thousand yuan, period of 3 years, monthly interest payment, principal grace period of 1 year, repayment of the first installment on the 1st of the nearest month 12 months before expiration, and 1 installment every 3 months thereafter, divided into 9 installments repay.	no
Medium-term loans	Taiwan Bank	109.06.15~ 116.05.15	The credit line is 174,000,000, the grace period is 3 years, the principal is amortized evenly in 48 installments, the interest is calculated on a monthly basis, and the principal is amortized on the 15th of	no

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Contractual nature	party	Contract date	main content	Restrictions
			each month. A: Working capital of 50,000,000, 7 years; within 2 years after the contract, 80% of the invoice is used to verify the appropriation once or in installments. B: Build a new factory building 19,000,000, 10 years. Within 3 years after the contract (excluding 10% of the reserved quota, the loan is allocated in batches within 80% of the contract + invoice voucher. C: The purchase of 105,000,000 machinery and equipment, 7 years, within 3 years after the contract, the invoice + The purchase and sale agreement shall allocate loans in batches within 80% of the invoice value or within 80% of the invoice value of the foreign bill. If there is an import financing advance, it should be repaid first.
Medium-term loans	First Bank	109.07.16~ 114.07.15	The credit line is 130,200,000, 5 years, the use period is 2020/08/13, and the total use of the following C items does not exceed NT$175,000,000. (At the time of the loan, and at the same time recover the current balance of the previous quasi-medium guarantee)	no
Medium-term loans	First Bank	109.07.20~ 116.07.15	The credit line is 157,400,000, the grace period is 3 years, the interest is calculated and collected on a monthly basis, and the principal is amortized evenly on a monthly basis from the expiration of the grace period. The use period is 2023/01/11. A: Expansion of the factory building to 661,600,000, 10 years. B: Purchase of software and hardware 551.000.000, 10 years. C: Operating turnover fund 444,800,000, 7years.	no
Medium-term loans	Mega Bank	109.11.04~ 114.11.04	The credit line is 80,000,000, which can be used with the payment statement and the salary transfer schedule; the use period is 2020/09/30-2021/06/29, the grace period is 1 year, the 13th- 60th period of the principal is evenly amortized and the interest is paid on a monthly basis	no

Six, Financial Overview

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1. Concise balance sheet and consolidated income statement for the last five years

(1) Condensed balance sheet-International Financial Reporting Standards (Consolidated Financial Reporting)

Unit: NT$ thousand

		Unit: NT$thousand	Unit: NT$thousand	Unit: NT$thousand	Unit: NT$thousand	Unit: NT$thousand
Annual project		financial data for the most recent five years (Note 1)
		105 years	106 years	107 years	108 years	109 years
Liudongzichan		3,460,96 3	4,230,07 1	4,367,72 7	3,460,61 8	3,352,181
property, plant and equipment (Note 2)		1,017,65 0	1,161,33 3	1,142,94 0	1,129,98 7	1,148,829
intangible		145,008	145,840	140,371	119,661	110,923
assets other (Note 2)		180, 184	145,595	200,370	282,957	398,702
assets total		4,803,80 5	5,682,83 9	5,851,40 8	4,993,22 3	5,010,635
liabilitie s	frontallocat ed	1,907,63 1	2,890,36 2	2,734,15 3	2,297,51 5	2,332,041
	after allocation	1,995,79 6	2,971,06 1	2,760,06 6	2,297,51 5	Note 3
non-current liabilities		575,341	470,948	492,366	344,558	494,344
totalliab ility	beforealloc ation	2,482,97 2	3,361,31 0	3,226,51 9	2,642,07 3	2,826,385
	after allocation	2,571,13 7	3,442,00 9	3,252,43 2	2,642,07 3	Note 3
attributable toowners of the parent company equity		2,297,84 0	2,300,37 2	2,577,24 8	2,231,75 6	2,069,871
equity		1,800,00 0	1,800,00 0	1,998,81 0	1,993,31 0	1,993,310
capital surplus		319,573	266,674	369,134	398,472	366,392
retained earnings	formerdistri bution	263,863	326,737	289,396	(9,753)	(114,235)
	after allocation	175,698	246,038	263,483	(9,753)	Note 3
other interests		( 50,624)	(58,067)	(75,178)	(102,729	(104,276)

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					)
Treasury stocks		(34,972)	(34,972)	(4,914)	(47,544)	(71,320)
Non-controlling interests		22,993	21,157	47,641	119,394	114,379
equity Total	before allocation	2,320,83 3	2,321, 529	2,624,88 9	2,351,15 0	2,184,250 After
	distribution	2,232,66 8	2,240,83 0	2,598,97 6	2,351,15 0verified	Note 3

Note 1: The above consolidated financial data for each year has beenby an accountant. Note 2: No asset revaluation has been done in each of the above years.

Note 3: The post-distribution figures in the above table are filled out according to the resolutions of the annual shareholders meeting.

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(2) Condensed consolidated income statement-International Financial Reporting Standards (Consolidated Financial Reporting)

Unit: Except for earnings per share, which is NT$, the rest is NT$ thousand of

annual projects	financial data for the most recent five years of(Note 1)	financial data for the most recent five years of(Note 1)	financial data for the most recent five years of(Note 1)	financial data for the most recent five years of(Note 1)	financial data for the most recent five years of(Note 1)
	105 years	106 years	107 in	108 years	109-year
revenues	3,697,47 9	4,465,13 4	4,905,23 4	4,160,54 5	3,210,946
gross profitsales	1,234,49 8	1,335,99 8	1,292,56 6	1,020,02 9	854,486
operating income	146,488	112,622	85,628	(288,802 )	(131 ,741)
Non-operating income and expenses	(6,441)	10,985	(20,683)	12,799	6,206
Pre-tax net profit	140,047	123,607	64,945	(276,003 )	(125 ,535)
units continue to operate the current period net profit	97,025	94,935	40,188	(273,051 )	(118 ,019)
loss of business units	-	-	- -		-
current period net profit (loss)	97,025	94,935	40,188	(273,051 )	(118 ,019)
other comprehensive loss the period ( Net profit after tax)	(40,850)	(6,074)	(14,055)	(26,056)	2,746
Total consolidated profit and loss for the period	56,175	88,861	26,133	(299,107 )	( 115, 273 )

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Net profit attributable to owners of the parent company	98,616	96,521	40,977	(274,618 )	( 118, 733 )
Net profit attributable to Non-controlling interests	(1,591)	(1,586)	(789)	1,567	714
Total comprehensive profit and loss attributable to owners of the parent company	58,927	90,697	26,247	(300,787 )	( 115, 782 )
Total comprehensive profit and loss attributable to non- controlling interests	(2,752)	(1,836)	(114)	1,680	509
Earnings per share	0.56	0.55	0.22	(1.39)	(0.6 1)

Note 1: The consolidated financial data of the above years have been verified by an accountant

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(3) Condensed individual balance sheet

unit: NT$ thousand

ndensed individual	ndensed individual	balance sheet unit: NT$thousand	balance sheet unit: NT$thousand	balance sheet unit: NT$thousand	balance sheet unit: NT$thousand	balance sheet unit: NT$thousand
annual project		financial data for the most recent five years (Note 1 )
		105 years	106 years	107 years	108 years	109 years
Liudongzichan		1,191,950	1,442,611	1,282,811	1,012,838	1,149,330
property, plant and equipment (Note 2)		718,882	714,185	722,926	707,295	734,399
intangible,		40,030	38,653	39,192	42,960	41 436
Other assets (Note 2)		1,674,762	1,773,559	2,073,546	1,900,479	1,806,866
total assets		3,625,624	3,969,008	4,118,475	3,663,572	3,732,031
liabilitie s	fronta llocat ed	775,811	1,329,552	1,238,446	1,200,367	1,377,108
	theas signe d	863,976	1,410,251	1,264,359	1,200,367	Note 3
non-current liabilities		551,973	339,084	302,781	231,449	285,052
Totallia bility	befor ealloc ation	1,327,784	1,668,636	1,541,227	1,431,816	1,662,160
	after alloca tion	1,415,949	1,749,335	1,567,140	1,431,816	Note 3
attributable to equity owners of the parent company's		2,297,840	2,300,372	2,577,248	2,231,756	2,069,871
equity		1,800,000	1,800,000	1,998,810	1,993,310	1,993,310
capital surplus		319,573	266,674	369,134	398,472	366,392
retained	forme rdistri	263,863	326,737	289,396	(9,753)	(114,

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earnings	butio n					235)
	after the distri butio n	175,698	246,038	263,483	(9,753)	Note 3
other interests		(50,624)	(58,067)	(75,178)	(102,729)	(104, 276)
treasury stock		(34,972)	(34,972)	(4,914)	(47,544)	(71,3 20)
non-controlling interests		- -		-	-	-
equity total	befor edistr ibutio n	2,297,840	2,300,372	2,577,248	2,231,756	2,069,871
	and after thedis tribut ion	2,209,675	2,219,673	2,551,335	2,231,756	Note 3

Note 1: the above data are annual financial audit by an accounting visa. Note 2: No asset revaluation has been done in each of the above years.

Note 3: The post-distribution figures in the above table are filled out
according to the resolutions of the annual shareholders meeting.

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(D) a concise statement of comprehensive income individuals

Unit: NT $ thousand

annual project	last five annual financial information (Note 1)	last five annual financial information (Note 1)	last five annual financial information (Note 1)	last five annual financial information (Note 1)	last five annual financial information (Note 1)
	105 years	106 years	107 years	108 years	109-year
revenues	1,123,840	1,113,662	1,096,280	871,211	803,287
Gross profitSales	324,810	309,177	294,834	236,415	242,626
Sales profit and loss	(24,872)	(32,183)	(38,953)	(107,744)	(35,4 16)
Non-operating income and expenses	145, 151	135,609	62,836	(177,293)	(104, 251)
pre-tax net profit (loss)	120,279	103,426	23,883	(285,037)	(139, 667)
continuebusiness unit the currentnet profit (loss)	98,616	96,521	40,977	(274,6 18)	(118, 733)
loss of business units	-	-	- -		-
current period net profit (loss)	98,616	96,521	40,977	(274,6 18)	(118, 733)
other comprehensive loss the period (net of tax)	(39,689)	(5,824)	(14,730)	(26,16 9)	2,951
total comprehensive loss the period	58,927	90,697	26,247	(300,787)	(115, 782)
earnings per share (Note 2)	0.56	0.55	0.22	(1.39)	(0.61)

Note 1: the above financial information each year are The visa is checked by an accountant. Note 2: Calculated based on the weighted average number of shares outstanding after the retrospective adjustment of the proportion of stock dividends issued and the conversion of corporate

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bonds into stocks.

(E) the name of the last five year visa accountant and audit opinion

annual	firm name	names visa accountants	auditopinions
105	Deloitte & Touche	Fan Youwei, Dai Xinwei	standard unqualified opinions.
106	Deloitte & Touche	Fan Youwei, Lin Wenqin	standard unqualified opinions.
107	Deloitte & Touche	Lin Wenqin, Guo Liwen	unqualified plus other mattersparagraph.
108	Deloitte & Touche	Chen Peide, Guo Liwen	unqualified plus other mattersparagraph.
109	Deloitte & Touche	Chen Peide, Guo Liwen	unqualified plus other mattersparagraph.

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Second, the last five year financial analysis

(a) Financial Analysis -International Financial Reporting Standards (consolidated earnings)

Annual Analysis Project(Note 2)	Annual Analysis Project(Note 2)	Annual Analysis Project(Note 2)	the last fiveyear financial analysis(Note 1)	the last fiveyear financial analysis(Note 1)	the last fiveyear financial analysis(Note 1)	the last fiveyear financial analysis(Note 1)	the last fiveyear financial analysis(Note 1)
			105 years	106 years	107 years	108 years	109-year
financial knot structure (%)	debt to assets ratio (%)		51.69	59.15	55.14	52.91	56.41
	long-term funds accounted for property, plant and equipment ratio(%)		275.41	232.10	264.35	238.56	220.75
subordin ated debt capacity (%)	Current ratio(%)		181.43	146.35	159.75	150.62	143.73
	Quick ratio(%)		113.49	82.05	90.8	86.08	93.30
	interest coverage ratio (%)		5.92	5.00	2.71	-6.67	-2.67
by the operate to ability	receivableturnover (times)		3.21	3.38	3.58	3.38	3.24
	average number of days now closed				114108102	107.98	112.53
	Inventory turnover rate(times)		2.02	2.13	2.08	1.98	1.85
	Accounts payable turnover rate(times)		7.29	6.41	7.7	8.53	7.18
	Average sales days		181	171	175	184.34	197.32
	Real estate, plant and equipment turnover rate(times)		3.74	4.10	4.26	3.66	2.82
	total asset turnover ratio(times)		0.78	0.85	0.85	0.77	0.64
eligible for benefit capacity	return on assets(%)		2.55	2.30	1.23	-4.51	-1.81
	return on equity (%)		4.21	4.09	1.62	-10.97	-5.20
	accounti ng for paid-in capital ratio(%)	operating profit	8.14	6.26	4.28	-14.49	-6.61
		before taxinteres ts	7.78	6.87	3.25	-13.85	-6.30
	netprofit rate(%)		2.62	2.13	0.82	-6.56	-3.68
	earnings per share (yuan)		0.56	0.55	0.21	-1.39	-0.61
cash flow	cash flow ratio(%)		Note 7	Note 7	Note 7	21.42	5.49
	cash flow, serves as the ratio(%)		192.56	37.49	Note 8	19.56	Note 8
	cash reinvest_rate (%)		Note 9	Note 9	Note 9	14.52	33.11
lever of the	operatinglever of		5.23	7.34	21.23	-1.55	-3.23
	Financial leverage		1.24	1.38	1.8	0.89	0.79
Please explain the reasons for the changes in various financial ratios in the last two years. (If Changed by less than 20% may avoid analysis): Change Analysis: 1. 109yearsof the interest coverage ratio compared with 108 annual increase, the main loss was due to decrease in 109years.

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1. The turnover rate of real estate, plant and equipment in the year 109 decreased compared with that in the year 2008, mainly due to the decrease in revenue in the year 109.

2. The return on assets and return on equity in 109 years increased compared with that in 108 years, mainly due to the decrease in losses in 109 years.

3. The ratio of operating profits and pre-tax profits to paid-in capital in 109 years increased compared with that in 108 years, mainly due to the decrease in losses in 109 years.

4. The net profit ratio and earnings per share in 109 years increased compared with that in 108 years, mainly due to the decrease in losses in 109 years.

5. The cash flow ratios in 109 were all lower than those in 108, mainly due to the decrease in net cash flow from operating activities in 109.

6. The operating leveragecompared with that in 108 years, mainlyindue to the109 years decreaseddecrease in revenue in 109 years.

Note 1: The consolidated financial data for the most recent five years has been verified by an

accountant.

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Note 2: Financial analysis calculation formula:

1. Financial structure

2. (1) Ratio of liabilities to assets = total liabilities/total assets.

3. (2) The ratio of long-term funds to real estate, plant and equipment = (total equity + non-current liabilities) / net real estate, plant and equipment.

4. Solvency

5. (1) Current ratio = current assets/current liabilities.

6. (2) Quick ratio = (current assets-inventory-prepaid expenses) / current liabilities.

7. (3) Interest protection multiple = net profit before income tax and interest expense/interest expense in the current period.

8. Operational capability

9. (1) Turnover rate of accounts receivable (including accounts receivable and notes receivable due to business) = net sales/average accounts receivable in each period (including accounts receivable and accounts receivable) The balance of notes receivable arising from business operations.

10. (2) Average number of days for cash collection = 365/ turnover rate of accounts receivable.

11. (3) Inventory turnover rate = cost of goods sold/average inventory value.

12. (4) Accounts payable (including accounts payable and bills payable due to business) turnover rate

    • = cost of goods sold/average payables (including accounts payable and bills payable due to business) balance in each period.

13. (5) Average sales days=365/inventory turnover rate.

14. (6) Turnover rate of real estate, plant and equipment = net sales/average net real estate, plant and equipment.

15. (7) Turnover rate of total assets = net sales/total average assets.

16. Profitability

17. (1) Return on assets = [After-tax profit and loss + interest expense x (1-tax rate)] / average total assets.

18. (2) Return on equity = after-tax profit and loss/average total equity.

19. (3) Net profit rate = after-tax profit and loss/net sales.

20. (4) Earnings per share = (Profit and loss attributable to owners of the parent company-special dividends)/weighted average number of issued shares. (Note 3)

21. Cash flow

22. (1) Cash flow ratio = net cash flow from operating activities/current liabilities.

23. (2) Net cash flow allowable ratio = net cash flow from operating activities in the most recent five years/the most recent five years (capital expenditure + inventory increase + cash dividends).

24. (3) Cash reinvestment ratio = (net cash flow from operating activities-cash dividends) / (gross real estate, plant and equipment + long-term investment + other non-current assets + working capital). (Note 4)

25. Leverage:

26. (1) Operating leverage = (net operating income-variable operating costs and expenses) / operating profit (Note 5).

27. (2) Financial leverage = operating profit/ (operating profit-interest expense).

Note 3: For the calculation formula of earnings per share in the preceding paragraph, special attention should be paid to the following matters when measuring:

1. The weighted average number of ordinary shares shall prevail, rather than the number of issued shares at the end of the year.

2. For those who have cash capital increase or treasury stock trading, the weighted average number of shares should be calculated in consideration of the circulation period.

3. Where there is a capital increase from surplus or capital reserve to capital increase, when calculating the earnings per share of previous years and half-years, retrospective adjustments should be made according to the capital increase ratio, regardless of the period of the issuance of the capital increase.

4. If the special shares are non-convertible cumulative special shares, the dividends for the current

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year (whether paid or not) should be deducted from the net profit after tax or net loss after tax increased. If the special stock is non-cumulative, in the case of net profit after tax, the dividend of the special stock shall be deducted from the net profit after tax; if it is a loss, no adjustment is necessary.

• Note 4: The following items should be paid special attention to when measuring cash flow analysis:

• Net cash flow from operating activities refers to the net cash inflow from operating activities in the cash flow statement.

• Capital expenditure refers to the amount of cash outflow from capital investment each year.

• The increase in inventory is only included when the ending balance is greater than the beginning balance. If the inventory decreases at the end of the year, it will be calculated as zero.

• Cash dividends include cash dividends for ordinary shares and special shares.

• Gross real property, plant and equipment refers to the total amount of real property, plant and equipment before deduction of accumulated depreciation.

• Note 5: The issuer should classify various operating costs and operating expenses as fixed and variable according to their nature. If estimates or subjective judgments are involved, they should pay attention to their reasonableness and maintain consistency.

• Note 6: The ratio of paid-in capital to foreign companies previously opened will be calculated based on the ratio of net worth.

Note 7: The cash flow ratio is negative, so it will not be calculated.

Note 8: The cash flow allowable ratio is negative, so it is not calculated.

Note 9: The cash reinvestment ratio is negative, so it will not be calculated.

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(2) Financial Analysis-International Financial Reporting Standards (Individual Financial Reporting)

Annual Analysis Items(Note 2)	Annual Analysis Items(Note 2)	Annual Analysis Items(Note 2)	Financial Analysis in the Last Five Years(Note 1)	Financial Analysis in the Last Five Years(Note 1)	Financial Analysis in the Last Five Years(Note 1)	Financial Analysis in the Last Five Years(Note 1)
			105 Years	106 Years	107 Years	108 Years	109 Years
Financial Structure (%)	Liabilities to Assets Ratio(%)		36.62	42.04	37.42	39.08	44.54 Ratio of
	long-term funds to fixed assets(%)		385.24 360.82	390.8	338.43	312.84	Solvency
(%)	Current ratio(%)		153.64	108.50	103.58	84.38	83.46
	Quick ratio(%)		118.52	83.45	79.1	61.34	64.35
	Interest protection Multiple(%)		7.49	6.73	2.3	-15.47	-6.24
Operating capacity	Accounts receivable turnover rate(times)		1.59	1.64	1.17	1.33	1.41
	Average number of cash collection days		229	223	313	274	259
	Inventory turnover rate(times)		2.93	2.84	2.66	2.31	2.19
	Accounts payable Turnover rate (times)		3.71	3.62	3.56	3.93	3.88
	Average sales days		125	128	137	158	166
	Real estate, plant and equipment turnover rate(times)		1.65	1.55	1.53	1.22	1.11
	Total assets turnover rate(times)		0.30	0.29	0.27	0.22	0.22
Profitability	Return on assets (%)		3.07	2.94	1.38	-6.70 - 2.79	Return on
	equity (%)		4.33	4.20	1.68	-11.42	-5.52 as a
	percentag e of paid- up capital (%)	Operatin g profit	(1.38)	(1.79)	(1.95)	-5.41	-1.78
		Net profit before tax	6.68	5.75	1.19	-14.30	-7.01
	Netprofit	ratio(%)	8.77	8.67	3.74	-31.52	-14.78
	Earnings per share (yuan)		0.56	0.55	0.21	-1.39	-0.61
Cash flow	cash flow ratio(%)		8.34	Note 7	7.04	22.41	-7.68
	Cash flow allowable ratio(%)		2,654.20	833.12	238.76	204.37	19.04
	Cash reinvestment ratio(%)		1.44	Note 8	2.7	8.39	Note 8
Leverage	Operatingleverage		(9.22)	(6.86)	(5.29)	-1.21	-4.66
	Financial leverage		0.57	0.64	0.68	0.86	0.65
Please explain the reasons for the changes in various financial ratios in the last two years.(Analysis is exempt if the increase or decrease does not reach 20%): Analysis of changes: 1. The interest coverage multiple in 109 has increased compared with that in 108, mainly due to the decrease in losses in 109. 2. The return on assets and return on equityin 109years increased compared with that in 108years,mainly

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• due to the decrease in losses in 109 years.

• 1. The ratio of operating profits and pre-tax profits to paid-in capital in 109 years increased compared with that in 108 years, mainly due to the decrease in losses in 109 years.
• 1. The net profit ratio and earnings per share in 109 years increased compared with that in 108 years, mainly due to the decrease in losses in 109 years.
• 1. The cash flow ratios in 109 were all lower than those in 108, mainly due to the decrease in net cash flow from operating activities in 109.
• 1. The degree of operating leverage and financial leverage in 109 years decreased compared with that in 108 years, mainly due to the negative operating profit in 109 years.

Note 1: The financial data for the most recent five years has been verified by an accountant.

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Note 2: Financial analysis calculation formula:

1. Financial structure

2. (1) Ratio of liabilities to assets = total liabilities/total assets.

3. (2) The ratio of long-term funds to real estate, plant and equipment = (total equity + non-current liabilities) / net real estate, plant and equipment.

4. Solvency

5. (1) Current ratio = current assets/current liabilities.

6. (2) Quick ratio = (current assets-inventory-prepaid expenses) / current liabilities.

7. (3) Interest protection multiple = net profit before income tax and interest expense/interest expense in the current period.

8. Operational capability

9. (1) Turnover rate of accounts receivable (including accounts receivable and notes receivable due to business) = net sales/average accounts receivable in each period (including accounts receivable and accounts receivable) The balance of notes receivable arising from business operations.

10. (2) Average number of days for cash collection = 365/ turnover rate of accounts receivable.

11. (3) Inventory turnover rate = cost of goods sold/average inventory value.

12. (4) Accounts payable (including accounts payable and bills payable due to business) turnover rate = cost of goods sold/average payables (including accounts payable and bills payable due to business) balance in each period.

13. (5) Average sales days=365/inventory turnover rate.

14. (6) Turnover rate of real estate, plant and equipment = net sales/average net real estate, plant and equipment.

15. (7) Turnover rate of total assets = net sales/total average assets.

16. Profitability

17. (1) Return on assets = [After-tax profit and loss + interest expense x (1-tax rate)] / average total assets.

18. (2) Return on equity = after-tax profit and loss/average total equity.

19. (3) Net profit rate = after-tax profit and loss/net sales.

20. (4) Earnings per share = (Profit and loss attributable to owners of the parent company-special dividends)/weighted average number of issued shares. (Note 3)

21. Cash flow

22. (1) Cash flow ratio = net cash flow from operating activities/current liabilities.

23. (2) Net cash flow allowable ratio = net cash flow from operating activities in the most recent five years/the most recent five years (capital expenditure + inventory increase + cash dividends).

24. (3) Cash reinvestment ratio = (net cash flow from operating activities-cash dividends) / (gross real estate, plant and equipment + long-term investment + other non-current assets + working capital). (Note 4)

25. Leverage:

26. (1) Operating leverage = (net operating income-variable operating costs and expenses) / operating profit (Note 5).

27. (2) Financial leverage = operating profit/ (operating profit-interest expense).

28. Note 3: For the calculation formula of earnings per share in the preceding paragraph, special attention should be paid to the following matters when measuring:

29. The weighted average number of ordinary shares shall prevail, rather than the number of issued shares at the end of the year.

30. For those who have cash capital increase or treasury stock trading, the weighted average number of shares should be calculated in consideration of the circulation period.

31. Where there is a capital increase from surplus or capital reserve to capital increase, when calculating the earnings per share of previous years and half-years, retrospective adjustments should be made according to the capital increase ratio, regardless of the period of the issuance of the capital increase.

32. If the special shares are non-convertible cumulative special shares, the dividends for the current year (whether paid or not) should be deducted from the net profit after tax or net loss after tax

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increased. If the special stock is non-cumulative, in the case of net profit after tax, the dividend of the special stock shall be deducted from the net profit after tax; if it is a loss, no adjustment is necessary.

• Note 4: The following items should be paid special attention to when measuring cash flow analysis:

• Net cash flow from operating activities refers to the net cash inflow from operating activities in the cash flow statement.

• Capital expenditure refers to the amount of cash outflow from capital investment each year.

• The increase in inventory is only included when the ending balance is greater than the beginning balance. If the inventory decreases at the end of the year, it will be calculated as zero.

• Cash dividends include cash dividends for ordinary shares and special shares.

• Gross real property, plant and equipment refers to the total amount of real property, plant and equipment before deduction of accumulated depreciation.

• Note 5: The issuer should classify various operating costs and operating expenses as fixed and variable according to their nature. If estimates or subjective judgments are involved, they should pay attention to their reasonableness and maintain consistency.

• Note 6: The ratio of paid-in capital to foreign companies previously opened will be calculated based on the ratio of net worth.

Note 7: The cash flow ratio is negative, so it will not be calculated.

• Note 8: The cash reinvestment ratio is negative, so it is not calculated.

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Third, the most recent annual financial report of the Audit Committee has reviewed the report

Ende Technology Co., Ltd.

The Board reviewed the report of

The Board of Directors of the Company made the annual business report sent to 109 individuals Financial Report and consolidated financial statements and profit and loss will be subsidized table, where the individual Financial Report and The consolidated financial report has been verified by Qinye Zhongxin Certified Public Accountants, and the verification report has been issued.

The Board had made to send the book on the item list, check this already Audit Committee that in line with the Company Law and other relevant laws, the provisions of Article 219 Yuan Yi Securities Exchange Act Article 144 and Corporate Law,

please look upon

Sincerely,

the Company's 110Regular Shareholders’ Meeting

Convener of the Audit Committee of the: Wu Qingsong, Republic of China, March 9, 110

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4. The most recent financial statements INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Stockholders Anderson Industrial Corporation

Opinion

We have audited the accompanying financial statements of Anderson Industrial Corporation (the “Company”), which comprise the balance sheets as of December 31, 2020 and 2019, and the statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the financial statements, including a summary of significant accounting policies (collectively referred to as the “financial statements”).

In our opinion, based on our audits and the report of other auditors (refer to the other matter paragraph) the accompanying financial statements present fairly, in all material respects, the financial position of the Company 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.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for the year ended December 31, 2020. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

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The key audit matters identified in the Company’s financial statements for the year ended December 31, 2020 are stated as follows:

Revenue Recognition

For the year ended December 31, 2020, the amount of the Company’s sales revenue from machineries was $636,262 thousand, which was significant and represented 79% of the total revenue. Sales revenue from machineries may be recognized before the criteria of sales revenue recognition, such as fulfilling its performance obligation, are met; therefore, we identified revenue recognition as a key audit matter. Refer to Notes 4 and 18 to the financial statements.

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The main audit procedures that we performed in respect of revenue recognition included understanding the appropriateness of internal controls, testing the operating effectiveness of design and implementation by inspecting sales contracts, confirming the consistency of transactions for revenue recognition, sampling of subsidiary ledgers, inspecting shipping invoices, clients’ receipts and export documentations, and verifying the accuracy of revenue recognition.

Estimated Impairment of Accounts Receivable

As of December 31, 2020, the balance of accounts receivable held by the Company was $561,055 thousand, which was significant and represented 15% of the total assets. The management applies the use of lifetime expected credit losses for all accounts receivable. The expected credit losses on accounts receivable are estimated by considering past default experience of the debtor, an analysis of the debtor’s current financial position and an assessment of both the current as well as the forecast direction of economic conditions at the reporting date. The evaluation of allowance for loss of accounts receivable, credit risk and appropriateness of provisioning policy involves significant judgments; therefore, we identified the estimated impairment of accounts receivable as a key audit matter. Refer to Notes 5 and 8 to the financial statements.

The main audit procedures that we performed in respect of the estimated impairment of accounts receivable included assessing the appropriateness of accounts receivable provisioning policy, testing the validity of aging reports, analyzing significant changes in accounts receivable and overdue accounts, assessing the reasonableness of impairment of individual accounts receivable, and confirming any indication of impairment at the end of the year. Recoverability was also tested by vouching cash receipts after the reporting period.

Other Matter

As mentioned in the opinion paragraph, the financial statements of Sogotec Enterprise Co., Ltd. (Sogotec) were audited by other independent auditors. As of December 31, 2020 and 2019, Sogotec’s total assets amounted to $431,249 thousand and $432,115 thousand, respectively, both representing 12% of the total assets of the Company, and the total profit from investment amounted to $10,582 thousand and $33,669 thousand, representing (8)% and (12)%, respectively, of the total pre-tax profit of the Company.

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

Management is responsible for the preparation and fair presentation of the financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the

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Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

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

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Auditors’ Responsibilities for the Audit of the Financial Statements

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

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

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

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

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

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

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

6. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the financial statements. We are responsible for the direction, supervision and

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performance of the audit. We remain solely responsible for our audit opinion.

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements for the year ended December 31, 2020 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Pei De Chen and Li Wen Kuo.

Deloitte & Touche Taipei, Taiwan Republic of China

March 9, 2021

Notice to Readers

The accompanying financial statements are intended only to present the financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other

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jurisdictions. The standards, procedures and practices to audit such financial statements are those generally applied in the Republic of China.

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

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ANDERSON INDUSTRIAL CORPORATION

BALANCE SHEETS DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash (Notes 4 and 6) Financial assets at fair value through profit or loss (Notes 4 and 7) Financial assets at amortized cost (Note 4) Notes receivable, net (Notes 4 and 8) Accounts receivable - non-related parties (Notes 4, 5 and 8) Accounts receivable - related parties (Notes 4, 5, 8 and 26) Finance lease receivable-related parties (Note 4) Other receivables (Notes 4 and 26) Current tax assets Inventories (Notes 4 and 9) Prepayments Other current assets Total current assets NON-CURRENT ASSETS Investments accounted for using the equity method (Notes 4 and 10) Property, plant and equipment (Notes 4, 11, 26 and 27) Right-of-use assets (Notes 4 and 12) Intangible assets (Notes 4 and 13) Deferred tax assets (Notes 4 and 20) Other non-current assets (Notes 11, 26 and 27) Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Notes 14 and 27) Short-term bills payable (Note 14) Contract liabilities (Notes 4 and 18) Accounts payable (Note 26) Other payables (Notes 15 and 26) Provisions (Note 4) Short-term lease liabilities (Notes 4 and 12) Current portion of long-term borrowings (Notes 14 and 27) Other current liabilities Total current liabilities NON-CURRENT LIABILITIES Long-term borrowings (Notes 14 and 27) Long-term lease liabilities (Notes 4 and 12) Net defined benefit liabilities (Notes 4 and 16) Guarantee deposits Total non-current liabilities Total liabilities EQUITY (Note 17) Share capital Ordinary shares Capital surplus Accumulated deficits Legal reserve Special reserve Accumulated deficit Total accumulated deficit Other equity Exchange differences on translation of the financial statements of foreign operations Unrealized gain (loss) on financial assets at fair value through other comprehensive income Total other equity Treasury shares Total equity TOTAL		2020 Amount % $ 116,977 3 - - 10,000 - 43,160 1 66,912 2 494,143 13 - - 153,950 4 628 - 251,620 7 11,493 1 447 - 1,149,330 31 1,651,849 44 734,399 20 30,678 1 41,436 1 78,962 2 45,377 1 2,582,701 69 $ 3,732,031 100 $ 970,766 26 - - 27,102 1 136,268 4 93,495 3 8,650 - 11,589 - 124,124 3 5,114 - 1,377,108 37 227,618 6 21,560 1 35,474 1 400 - 285,052 8 1,662,160 45 1,993,310 53 366,392 10 - - - - (114,235) (3) (114,235) (3) (113,832) (3) 9,556 - (104,276) (3) (71,320) (2) 2,069,871 55 $ 3,732,031 100		2019
				Amount % $ 65,552 2 18,827 1 - - 15,371 - 90,145 2 426,236 12 5,109 - 109,345 3 5,515 - 259,362 7 17,132 1 244 - 1,012,838 28 1,771,471 48 707,295 19 26,945 1 42,960 1 55,863 2 46,200 1 2,650,734 72 $ 3,663,572 100 $ 676,488 19 30,000 1 30,406 1 152,773 4 106,585 3 9,316 - 7,046 - 185,944 5 1,809 - 1,200,367 33 161,972 4 22,569 1 46,908 1 - - 231,449 6 1,431,816 39 1,993,310 54 398,472 11 186,665 5 75,178 2 (271,596) (7) (9,753) - (110,229) (3) 7,500 - (102,729) (3) (47,544) (1) 2,231,756 61 $ 3,663,572 100

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

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(With Deloitte & Touche auditors’ report dated March 9, 2021)

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ANDERSON INDUSTRIAL CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Loss Per Share)

OPERATING REVENUE (Notes 4, 18 and 26) OPERATING COSTS (Notes 9, 19 and 26) GROSS PROFIT REALIZED GAIN ON TRANSACTIONS WITH SUBSIDIARIES REALIZED GROSS PROFIT OPERATING EXPENSES (Notes 4, 19 and 26) Selling and marketing expenses General and administrative expenses Research and development expenses Expected credit loss Total operating expenses LOSS FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES (Notes 4 and 19) Interest income (Note 26) Other income (Note 26) Other gains and losses Finance costs Share of profits of subsidiaries accounted for using the equity method Total non-operating income and expenses LOSS BEFORE INCOME TAX INCOME TAX BENEFIT (Notes 4 and 20) NET LOSS FOR THE YEAR		2020 Amount % $ 803,287 100 560,661 70 242,626 30 511 - 243,137 30 123,733 15 102,840 13 49,560 6 2,420 - 278,553 34 (35,416) (4) 1,918 - 55,151 7 (41,426) (5) (19,295) (2) (100,599) (13) (104,251) (13) (139,667) (17) 20,934 2 (118,733) (15)		2019
				Amount % $ 871,211 100 634,796 73 236,415 27 13,097 1 249,512 28 153,380 18 141,875 16 58,803 7 3,198 - 357,256 41 (107,744) (13) 2,515 - 40,866 5 (17,372) (2) (17,308) (2) (185,994) (21) (177,293) (20) (285,037) (33) 10,419 1 (274,618) (32)

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OTHER COMPREHENSIVE INCOME (LOSS) Items that will not be reclassified subsequently to profit or loss:

(Continued)

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ANDERSON INDUSTRIAL CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Loss Per Share)

Remeasurement of defined benefit plans Unrealized gain on investments in equity instruments at fair value through other comprehensive income Share of the other comprehensive loss of subsidiaries accounted for using the equity method Income tax expense relating to items that will not be reclassified subsequently (Note 20) Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of the financial statements of foreign operations Other comprehensive income (loss) for the year, net of income tax TOTAL COMPREHENSIVE LOSS FOR THE YEAR LOSS PER SHARE (Note 21) Basic Diluted		2020 Amount % $ 5,500 1 2,056 - 98 - (1,100) - (3,603) - 2,951 1 $ (115,782) (14) $ (0.61) $ (0.61)		2019
				Amount % $ 1,890 - 6,698 1 (130) - (378) - (34,249) (4) (26,169) (3) $ (300,787) (35) $ (1.39) $ (1.39)
		$		$

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

(With Deloitte & Touche auditors’ report dated March 9, 2021)

(Concluded)

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ANDERSON INDUSTRIAL CORPORATION

STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

Ordinary shares Capital Surplus BALANCE AT JANUARY 1, 2019 $ 1,998,810 $ 369,134 Appropriation of 2018 earnings Legal reserve - - Special reserve - - Cash dividends distributed by the Company - NT$0.13 per share - - Cash dividends distributed from capital surplus - (13,953 ) Net loss for the year ended December 31, 2019 - - Other comprehensive income (loss) for the year ended December 31, 2019 - - Total comprehensive income (loss) for the year ended December 31, 2019 - - Buy-back treasury shares - - Cancellation of treasury shares (5,500 ) 586 Changes in percentage of ownership interests in subsidiaries - 42,705 BALANCE AT DECEMBER 31, 2019 1,993,310 398,472 Appropriation of 2019 deficit Legal reserve to offset deficit - - Special reserve to offset deficit - - Capital surplus offset deficit - (9,753 ) Cash dividends distributed from capital surplus - (19,933 ) Net loss for the year ended December 31, 2020 - - Other comprehensive income (loss) for the year ended December 31, 2020 - - Total comprehensive income (loss) for the year ended December 31, 2020 - - Buy-back treasury shares - - Changes in percentage of ownership interests in subsidiaries - (2,394) BALANCE AT DECEMBER 31, 2020 $ 1,993,310 $ 366,392		Retained Earnings Legal Reserve Special Reserve Unappropriated Earnings (Accumulated Deficits) $ 182,567 $ 58,067 $ 48,762 4,098 - (4,098 ) - 17,111 (17,111 ) - - (25,913 ) - - - - - (274,618 ) - - 1,382 - - (273,236) - - - - - - - - - 186,665 75,178 (271,596 ) (186,665 ) - 186,665 - (75,178 ) 75,178 - - 9,753 - - - - - (118,733 ) - - 4,498 - - (114,235) - - - - - - $ - $ - $ (114,235)	Other Equity Unrealized Valuation Gain (Loss) on Exchange Differences on Translation of the Financial Statements of Foreign Operation Financial Assets at Fair Value Through Other Comprehensive Income Treasury Shares $ (75,980 ) $ 802 $ (4,914 ) - - - - - - - - - - - - - - - (34,249) 6,698 - (34,249) 6,698 - - - (47,544 ) - - 4,914 - - - (110,229 ) 7,500 (47,544 ) - - - - - - - - - - - - - - - (3,603) 2,056 - (3,603) 2,056 - - - (23,776 ) - - - $ (113,832) $ 9,556 $ (71,320)	Total Equity $ 2,577,248 - - (25,913 ) (13,953 ) (274,618 ) (26,169) (300,787) (47,544 ) - 42,705 2,231,756 - - - (19,933 ) (118,733 ) 2,951 (115,782) (23,776 ) (2,394) $ 2,069,871

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

(With Deloitte & Touche auditors’ report dated March 9, 2021)

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ANDERSON INDUSTRIAL CORPORATION

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Loss before income tax Adjustments for: Depreciation expense Amortization expense Expected credit loss recognized on accounts receivable Net gain on fair value changes of financial assets at fair value through profit or loss Finance costs Interest income Share of profit of subsidiaries accounted for using the equity method Loss on disposal of property, plant and equipment Write-downs of inventories Realized gain on transactions with subsidiaries Loss on foreign currency exchange Changes in operating assets and liabilities Financial assets mandatorily classified as at fair value through profit or loss Notes receivable Accounts receivable Accounts receivable - related parties Other receivables Finance lease receivables Inventories Prepayments Other current assets Contract liabilities Accounts payable Other payables Provisions Other liabilities Net defined benefit liabilities Cash (used in) generated from operations Interest received Interest paid Income tax returned (paid) Net cash (used in) generated from operating activities	2020 $(139,667) 62,554 3,065 2,420 (450) 19,295 (1,918) 100,599 - 6,165 (511) 12,988 19,277 (27,789) 19,065 (87,974) (40,333) 5,124 (11,663) 4,098 (203) (3,304) (16,470) (12,396) (666) 4,400 (5,934) (90,228) 1,903 (19,042) 1,622 (105,745)	2019 $(285,037) 56,668 2,432 3,198 (1,353) 17,308 (2,515) 185,994 166 31,882 (13,097) 20,311 - 24,239 (9,756) 205,810 21,840 22,692 (4) (5,099) 1,033 (3,422) (17,181) 39,336 (594) (4,685) (5,621) 284,545 2,234 (17,200) (623) 268,956

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CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of financial assets at amortized cost	(10,000)	-
Proceeds from sale of financial assets at amortized cost	-	5,004
Payments for property, plant and equipment	(71,051)	(12,676)
Proceeds from disposal of property, plant and equipment	19,114	571
Increase in refundable deposits	-	(8,369)
		(Continued)

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ANDERSON INDUSTRIAL CORPORATION

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

Decrease in refundable deposits Payments for intangible assets Decrease in non-current assets Increase in prepayments for equipment Dividends received from subsidiaries Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase (decrease) in short-term borrowings Decrease in short-term notes payable Proceeds from long-term borrowings Repayment of long-term borrowings Increase in receivable deposits Decrease in receivable deposits Repayment of the principal portion of lease liabilities Cash dividends paid Increase in treasury shares Net cash generated from (used in) financing activities EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES NET INCREASE IN CASH CASH AT THE BEGINNING OF THE YEAR CASH AT THE END OF THE YEAR	2020 $ 6,683 - 1,123 (12,135) 5,927 (60,339) 294,278 (30,000) 130,803 (126,977) 400 - (9,764) (19,933) (23,776) 215,031 2,478 51,425 65,552 $ 116,977	2019 $ - (1,675) 2,017 (14,448) 20,816 (8,760) (47,149) (20,000) 100,000 (172,612) - (445) (6,422) (39,866) (47,544) (234,038) 1,380 27,538 38,014 $ 65,552

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

(With Deloitte & Touche auditors’ report dated March 9, 2021)

(Concluded)

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NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

ANDERSON INDUSTRIAL CORPORATION

1. GENERAL INFORMATION

Anderson Industrial Company (the “Company”) was incorporated in the Republic of China (ROC) in July 1972. The Company is mainly engaged in the design, manufacture, sale and import and export of computer numerical control (CNC) machinery, tooling, lumber, wood panels, and building materials.

Since October 11, 2000, the Company’s shares have been listed on the Taiwan Stock Exchange (TWSE).

The financial statements are presented in the Company’s functional currency, the New Taiwan dollar.

2. APPROVAL OF FINANCIAL STATEMENTS

The financial statements were approved by the Company’s board of directors on March 9, 2021.

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

• a. Initial application of the amendments to the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) (collectively, the “IFRSs”) endorsed and issued into effect by the Financial Supervisory Commission (FSC)

The initial application of the IFRSs endorsed and issued into effect by the FSC did not have material impact on the Company’s accounting policies.

• b. The IFRSs endorsed by the FSC for application starting from 2021

New IFRSs Amendments to IFRS 4 “Extension of the Temporary Exemption from Applying IFRS 9” Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 “Interest Rate Benchmark Reform - Phase 2” Amendment to IFRS 16 “Covid-19-Related Rent Concessions”	Effective Date Announced by IASB
	Effective immediately upon promulgation by the IASB January 1, 2021 June 1, 2020

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

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• c. New IFRSs in issue but not yet endorsed and issued into effect by the FSC

Effective Date New IFRSs Announced by IASB (Note 1) “Annual Improvements to IFRS Standards 2018-2020” January 1, 2022 (Note 2) Amendments to IFRS 3 “Reference to the Conceptual January 1, 2022 (Note 3) Framework” Amendments to IFRS 10 and IAS 28 “Sale or Contribution of To be determined by IASB Assets between an Investor and its Associate or Joint Venture” IFRS 17 “Insurance Contracts” January 1, 2023 Amendments to IFRS 17 January 1, 2023 Amendments to IAS 1 “Classification of Liabilities as Current or January 1, 2023 Non-current” Amendments to IAS 16 “Property, Plant and Equipment - January 1, 2022 (Note 4) Proceeds before Intended Use” Amendments to IAS 37 “Onerous Contracts - Cost of Fulfilling a January 1, 2022 (Note 5) Contract” Amendments to IAS 1 “Disclosure of Accounting Policies” January 1, 2023 (Note 6) Amendments to IAS 8 “Definition of Accounting Estimates” January 1, 2023 (Note 7)

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

• Note 2: The amendments to IFRS 9 will be applied prospectively to modifications and exchanges of financial liabilities that occur on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IAS 41 “Agriculture” will be applied prospectively to the fair value measurements on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IFRS 1 “First-time Adoptions of IFRSs” will be applied retrospectively for annual reporting periods beginning on or after January 1, 2022.

• Note 3: The amendments are applicable to business combinations for which the acquisition date is on or after the beginning of the annual reporting period beginning on or after January 1, 2022.

• Note 4: The amendments are applicable to property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after January 1, 2021.

• Note 5: The amendments are applicable to contracts for which the entity has not yet fulfilled all its obligations on January 1, 2022.

• Note 6: The amendments will be applied prospectively for annual reporting periods beginning on or after January 1, 2023.

• Note 7: The amendments are applicable to changes in accounting estimates and changes in accounting policies that occur on or after the beginning of the annual reporting

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period beginning on or after January 1, 2023.

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

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4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

• a. Statement of compliance

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

• b. Basis of preparation

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

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

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

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

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

When preparing its parent company only financial statements, the Company used the equity method to account for its investments in subsidiaries and associates. In order for the amounts of the net profit for the year, other comprehensive income for the year and total equity in the parent company only financial statements to be the same as the amounts attributable to the owners of the Company in its consolidated financial statements, adjustments arising from the differences in the accounting treatment between the parent company only basis and the consolidated basis were made to investments accounted for by equity method, share of profit or loss of subsidiaries and associates, share of other comprehensive income of subsidiaries and associates and related equity items, as appropriate, in the parent company only financial statements.

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

Current assets include:

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

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

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

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Current liabilities include:

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

• 2) Liabilities due to be settled within twelve months after the reporting period, even if an agreement to refinance, or to reschedule payments, on a long-term basis is completed after the reporting period and before the financial statements are authorized for issue; and

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

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

• d. Foreign currencies

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

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

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

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

For the purpose of presenting the Company’s financial statements, the functional currencies of the Company and its entities (including subsidiaries in other countries that use currency different from the currency of the Company) are translated into the presentation currency - New Taiwan dollars as follows: Assets and liabilities are translated at the exchange rates prevailing at the end of the reporting period; income and expense items are translated at the average exchange rates for the period. The resulting currency translation differences are recognized in other comprehensive income.

Goodwill and fair value adjustments on identifiable assets and liabilities acquired in the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the rate of exchange prevailing at the end of each reporting period. Exchange differences arising are recognized in other comprehensive income.

e. Inventories

Inventories, which comprise finished goods, work-in-process, raw materials and merchandise, are stated at the lower of cost or net realizable value. Inventory write-downs are made by item, except where it may be appropriate to group similar or related items. Net realizable value is the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale. Inventories are recorded at weighted-average cost.

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f. Investments in subsidiaries

The Company uses the equity method to account for its investments in subsidiaries.

Subsidiary is an entity that is controlled by the Company.

Under the equity method, an investment in a subsidiary is initially recognized at cost and adjusted thereafter to recognize the Company’s share of the profit or loss and other comprehensive income of the subsidiary. The Company also recognizes the changes in the Company’s share in the equity of subsidiaries attributable to the Company.

Changes in the Company’s ownership interest in a subsidiary that do not result in the Company losing control of the subsidiary are equity transactions. The Company recognizes directly in equity any difference between the carrying amount of the investment and the fair value of the consideration paid or received.

When the Company’s share in losses of a subsidiary exceeds the interest in that subsidiary (which includes any carrying amount of the investment accounted for using the equity method and long-term interests that, in substance, form part of the Company’s net investment in the subsidiary), the Company continues recognizing its share of further losses.

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

The Company assesses its investment for any impairment by comparing the carrying amount with the estimated recoverable amount as assessed based on the entire financial statements of the invested company. Impairment loss is recognized when the carrying amount exceeds the recoverable amount. If the recoverable amount of the investment subsequently increases, the Company recognizes the reversal of the impairment loss; the adjusted post-reversal carrying amount should not exceed the carrying amount that would have been recognized (net of amortization or depreciation) had no impairment loss been recognized in prior years. An impairment loss recognized on goodwill cannot be reversed in a subsequent period.

Profits or losses resulting from downstream transactions are eliminated in full only in the parent company’s financial statements. Profits and losses resulting from upstream transactions and transactions between subsidiaries are recognized only in the parent company’s financial statements only to the extent of interests in the subsidiaries of parties that are not related to the Company.

g. Property, plant and equipment

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

Except for freehold land which is not depreciated, the depreciation of property, plant and equipment is recognized using the straight-line method. Each significant part is depreciated separately. If the lease term is shorter than the useful lives, assets are depreciated over the lease term. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

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

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• h. Intangible assets

• 1) Intangible assets acquired separately

Intangible assets with finite useful lives that are acquired separately are initially measured at cost and subsequently measured at cost less accumulated amortization and accumulated impairment loss. Amortization is recognized on a straight-line basis. The estimated useful lives, residual value, and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired separately are measured at cost less accumulated impairment loss.

• 2) Derecognition of intangible assets

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

• i. Impairment of property, plant and equipment, right-of-use asset and intangible assets other than goodwill

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

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

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

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

• j. Financial instruments

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

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

• 1) Financial assets

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

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a) Measurement categories

Financial assets are classified into the following categories: Financial assets at FVTPL and financial assets at amortized cost.

• i. Financial assets at FVTPL

Financial assets are classified as at FVTPL when such a financial asset is mandatorily classified or designated as at FVTPL. Financial assets mandatorily classified as at FVTPL include investments in equity instruments which are not designated as at fair value through other comprehensive income (FVTOCI) and debt instruments that do not meet the amortized cost criteria or the FVTOCI criteria.

Financial assets at FVTPL are subsequently measured at fair value, with any gains or losses arising on remeasurement recognized in profit or loss. The net gain or loss recognized in profit or loss incorporates any dividends or interest earned on such a financial asset. Fair value is determined in the manner described in Note 25.

• ii. Financial assets at amortized cost

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

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

• ii) The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

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

Interest income is calculated by applying the effective interest rate to the gross carrying amount of such a financial asset.

• b) Impairment of financial assets

The Company recognizes a loss allowance for expected credit losses (ECLs) on financial assets at amortized cost, including accounts receivable and other receivables.

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

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

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The Company recognizes an impairment loss in profit or loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account.

• c) Derecognition of financial assets

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

On derecognition of a financial asset at amortized cost in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss.

• 2) Financial liabilities

• a) Subsequent measurement

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

• b) Derecognition of financial liabilities

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

• k. Provisions

Provisions are measured at the best estimate of the discounted cash flows of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.

Provisions for the expected cost of warranty obligations are recognized at the date of sale of the relevant products, at the best estimate of the expenditure required to settle the Company’s obligation by the management of the Company.

• l. Revenue recognition

The Company identifies contracts with customers, allocates the transaction price to the performance obligations and recognizes revenue when performance obligations are satisfied.

• 1) Revenue from the sale of goods

Revenue from the sale of goods comes from sales of precision machineries. Sales of precision machineries is recognized as revenue when the goods are shipped or accepted, and accounts receivable are recognized concurrently.

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

• 2) Revenue from the rendering of services

Revenue from the rendering of services comes from the repair services and hardware installation services.

As the Company provides repair services and hardware installation services. Consequently, the related revenue is recognized when services are rendered.

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m. Leases

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

• 1) The Company as lessor

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

Lease payments from operating leases are recognized as income on a straight-line basis over the terms of the relevant leases.

• 2) The Company as lessee

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

Right-of-use assets are initially measured at cost. Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any remeasurement of the lease liabilities. Right-of-use assets are presented on a separate line in the balance sheets.

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

Lease liabilities are initially measured at the present value of the lease payments. The lease payments are discounted using the interest rate implicit in a lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses the lessee’s incremental borrowing rate.

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

• n. Government grants

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

Government grants related to income are recognized in other income on a systematic basis over the periods in which the Company recognizes as expenses the related costs that the grants intend to compensate.

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

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o. Employee benefits

• 1) Short-term employee benefits

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

• 2) Retirement benefits

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

Defined benefit costs (including service costs, net interest and remeasurement) under the defined benefit retirement benefit plans are determined using the projected unit credit method. Service costs (including current service costs) and net interest on a net defined benefit liability (asset) are recognized as employee benefits expenses in the period that they occur. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling and the return on plan assets (excluding interest), is recognized in other comprehensive income in the period in which it occurs. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss.

The net defined benefit liability (asset) represents the actual deficit (surplus) in the Company’s defined benefit plan. Any surplus resulting from this calculation is limited to the present value of any refunds from the plans or reductions in future contributions to the plans.

• 3) Termination benefits

A liability for termination benefits is recognized at the earlier of when the Company can no longer withdraw the offer of the termination benefits and when the Company recognizes any related restructuring costs.

• p. Taxation

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

1) Current tax

According to the Income Tax Law in th ROC, and additional tax on unappropriated earnings is provided for in the year the shareholders approve to retain earnings.

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

• 2) Deferred tax

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

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

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred

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tax assets arising from deductible temporary differences associated with such investments and interests are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and that they are expected to reverse in the foreseeable future.

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

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

• 3) Current tax and deferred tax for the year

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

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

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

The Company considers the economic implications of the COVID-19 when making its critical accounting estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

Key Sources of Estimation Uncertainty

Estimated impairment of financial assets

The provision for impairment of trade receivables is based on assumptions about risk of default and expected loss rates. The Company uses judgment in making these assumptions and in selecting the inputs to the impairment calculation, based on the Company’s historical experience and existing market conditions as of the end of each reporting period. For details of the key assumptions and inputs used, see Note 8. Where the actual future cash inflows are less than expected, a material impairment loss may arise.

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6. CASH

December 31 2020 2019 Cash on hand $ 748 $ 951 Checking accounts and demand deposits 116,229 64,601 $116,977 $ 65,552 The market rate intervals of cash in bank at the end of the reporting period were as follows: December 31 2020 2019 Bank balance 0.001%-0.10% 0.001%-0.35% FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS December 31 2020 2019 Financial assets mandatorily classified as at FVTPL Non-derivative financial assets Mutual funds $ - $ 18,827		December	31
			2019 $ 951 64,601 $ 65,552 31
		2020 $ -	2019 $ 18,827

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

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

8. NOTES RECEIVABLE AND ACCOUNTS RECEIVABLE (INCLUDING RELATED PARTIES)

Notes receivable Accounts receivable At amortized cost Gross carrying amount Less: Allowance for impairment loss		December 31	December 31
		2020 $ 43,160 $ 568,775 (7,720) $ 561,055	2019 $ 15,371 $ 521,764 (5,383) $ 516,381

The average credit period of sales of goods was 90-180 days.

The Company measures the loss allowance for accounts receivable at an amount equal to lifetime expected credit losses. The lifetime ECLs on accounts receivable are estimated by reference to past collecting and default experiences of the debtor, an increase in deferred or overdue payments over average credit term and an analysis of the debtors’ current financial position, adjusted for general economic conditions of the

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industries in which the debtors operate. As the Company’s historical credit loss experience does not show significantly different loss patterns for different customer segments, the provision for loss allowance based on past due status is not further distinguished according to the Company’s different customer base.

The Company writes off an accounts receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery. For accounts receivable that have been written off, the Company continues to engage in enforcement activity to attempt to recover the receivables due. Where recoveries are made, these are recognized in profit or loss.

The following table details the loss allowance for accounts receivable and notes receivable.

December 31, 2020 Under 180 Days 181 to 365 Days Gross carrying amount $ 608,806 $ 499 Loss allowance (Lifetime ECLs) (4,768) (322) Amortized cost $ 604,038 $ 177 December 31, 2019 Under 180 Days 181 to 365 Days Gross carrying amount $ 534,100 $ 2,368 Loss allowance (Lifetime ECLs) (3,119) (1,597) Amortized cost $ 530,981 $ 771	Over 365 Days $ 2,630 (2,630) $ - Over 365 Days $ 667 (667) $ -	Total $ 611,935 (7,720) $ 604,215 Total $ 537,135 (5,383) $ 531,752

The ECL ratios of each of the Company’s accounts receivable aging are shown below, excluding individually assessed or abnormal transactions which their loss allowances have been recognized in their entirety. The ECL ratio for aging segment from the invoice date less than 180 days is less than 5%, while the ECL ratio for aging segment from the invoice date more than 181 days is 20%-100%.

The movements of the loss allowance of accounts receivable were as follows:

Balance at January 1 Net remeasurement of loss allowance Amounts written off Balance at December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 5,383 2,420 (83) $ 7,720	2019 $ 2,185 3,198 - $ 5,383

9. INVENTORIES

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Work in progress Raw materials Goods in transit Finished goods Merchandise		December 31	December 31
		2020 $ 152,801 68,845 19,974 8,410 1,590 $ 251,620	2019 $ 122,361 101,538 29,024 4,563 1,876 $ 259,362

The cost of goods sold for the years ended December 31, 2020 and 2019 included inventory write-downs of $6,165 thousand and $31,882 thousand, respectively.

10. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Investments in Subsidiaries

Anderson Industrial (Hong Kong) Ltd. (Anderson Industrial) Anderson Europe GmbH Anderson America Corporation (U.S.A.) (Anderson America) Anderson Logistics Corporation (Anderson Logistics) Giben Holdings Co., Ltd. (BVI) (Giben BVI) Giben Holdings Co., Ltd. (SAMOA) (Giben SAMOA) Anderson Merchandise Corporation (Anderson Merchandise) Sogotec Enterprise Co., Ltd. (Sogotec) CNT Industrial (Shanghai) Co., Ltd. (CNT)

December 31

2020 2019 $ 31,885 $ 31,361 291,452 297,753 33,922 50,821 262,464 269,290 205,118 227,997 82,475 129,339 163,908 149,553 293,491 301,632 247,891 259,362

Jentec Machinery (Shanghai) Co., Ltd. (Jentec)	39,243 1 0 4 , 1 7 5 $ 1,651,849	54,363 $ 1,771,471

At the end of the reporting period, the proportion of ownership and voting rights in subsidiaries held by the Company were as follows:

Name of Subsidiaries	December 31
	2020 2019

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Anderson Industrial	100.00%	100.00%
Anderson Europe GmbH	100.00%	100.00%
Anderson America	100.00%	100.00%
Anderson Logistics	100.00%	100.00%
Giben BVI	100.00%	100.00%
Giben SAMOA	100.00%	100.00%
Anderson Merchandise	100.00%	100.00%
Sogotec	58.11%	57.82%
CNT	100.00%	100.00%
Jentec	100.00%	100.00%

Sogotec bought back its ordinary shares in June 2020, thereby increasing the Company’s continuing interest.

On May 10, 2016, the board of directors of Anderson Industrial resolved to liquidate the Company. As of December 31, 2021, the process of liquidation is still ongoing.

The investments accounted for using the equity method and the share of profit or loss and other comprehensive income of those investments for the years ended December 31, 2020 and 2019 were based on the subsidiaries’ financial statements audited by auditors for the same years.

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11. PROPERTY, PLANT AND EQUIPMENT

Freehold Land Cost Balance at January 1, 2019 $ 131,237 Additions - Disposals - Reclassification - Balance at December 31, 2019 131,237 Accumulated depreciation and impairment Balance at January 1, 2019 - Disposals - Depreciation - Reclassification - Balance at December 31, 2019 - Carrying amount at December 31, 2019 $ 131,237 Cost Balance at January 1, 2020 $ 131,237 Additions - Disposals (4,160 ) Reclassification - Balance at December 31, 2020 127,077 Accumulated depreciation and impairment Balance at January 1, 2020 - Disposals - Depreciation - Reclassification - Balance at December 31, 2020 - Carrying amount at December 31, 2020 $ 127,077	Buildings $ 794,272 2,978 (24,150 ) 100 773,200 299,906 (24,150 ) 33,092 - 308,848 $ 464,352 $ 773,200 14,506 (10,550 ) 4,455 781,611 308,848 (5,360 ) 33,673 - 337,161 $ 444,450	Machinery $ 122,966 3,576 (3,874 ) 19,568 142,236 49,119 (3,874 ) 9,911 (2,284) 52,872 $ 89,364 $ 142,236 55,288 (500 ) ( 4 , 1 6 0 ) 11,014 208,038 52,872 (500 ) ( 1 0 , 5 5 0 ) 12,782 (112 ) 65,042 $ 142,996	Research and Development Equipment $ 44,357 747 (28,214 ) - 16,890 39,457 (28,214 ) 1,875 - 13,118 $ 3,772 $ 16,890 160 (4,988 ) ( 4 , 1 6 0 ) 2,639 14,701 13,118 (4,988 ) ( 1 0 , 5 5 0 ) 1,333 - 9,463 $ 5,238	Other Equipment $ 63,167 5,375 (32,124 ) 868 37,286 44,591 (31,387 ) 5,512 - 18,716 $ 18,570 $ 37,286 1,097 (10,629 ) ( 4 , 1 6 0 ) 172 27,926 18,716 (10,629 ) ( 1 0 , 5 5 0 ) 5,201 - 13,288 $ 14,638	Total $ 1,155,999 12,676 (88,362 ) 20,536 1,100,849 433,073 (87,625 ) 50,390 (2,284) 393,554 $ 707,295 $ 1,100,849 71,051 (30,827 ) 18,280 1,159,353 393,554 (21,477 ) 52,989 (112 ) 424,954 $ 734,399

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

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Building 5-55 years Machinery 5-20 years Research and development equipment 5-10 years Other equipment 3-10 years

In August 1996, the Company purchased land in Houlong Township of Miaoli Country for $11,000 thousand. However, due to the statutory restrictions on the transfer of farmland, the title deed has not been legally transferred to the Company; therefore, the Company entered into a contract with the seller to prevent any future claims on the land by the seller, the seller’s heir at law, or any other third parties. In addition, if the land zoning is changed, the seller is obligated to transfer the title immediately. Accordingly, the farmland is recorded under other non-current assets. In March 2005, the Company applied to the Land Office for the modification of land usage and changed parts of the land’s zoning designation from farmland to construction use, which amounted to $4,518 thousand. Accordingly, the Company has been registered as the legal owner, and has reclassified such land to property, plant and equipment.

Property, plant and equipment pledged as collateral for bank borrowings were set out in Note 27.

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12. LEASE ARRANGEMENTS

• a. Right-of-use assets

Carrying amount Land Transportation equipment Buildings Additions to right-of-use assets Depreciation charge for right-of-use assets Land Transportation equipment Buildings Lease liabilities Carrying amount Current Non-current Range of discount rate for lease liabilities was as follows: Land Transportation equipment Buildings					December 31
		For			2020 2019 $ 16,021 $ 19,025 11,542 2,135 3,115 5,785 $ 30,678 $ 26,945 the Year Ended December 31
				2020 2019 $ 13,298 $ 11,194 $ 3,004 $ 3,004 3,891 1,050 2,670 2,224 $ 9,565 $ 6,278 December 31
				2020 2019 $ 11,589 $ 7,046 $ 21,560 $ 22,569 December 31
				2020 2019 1.71% 1.71% 1.71% 1.71% 1.71% 1.71%

b. Lease liabilities

• c. Material lease-in activities and terms

The Company leases land and buildings for the use of plants and offices with lease terms of 2 to 7 years. The Company does not have bargain purchase options to acquire the leasehold land and buildings at the end of the lease terms. In addition, the Company is prohibited from subleasing or transferring all or any portion of the underlying assets without the lessor’s consent.

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d. Other lease information

Expenses relating to short-term leases Total cash outflow for leases	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 569 $(10,894)	2019 $ 5,636 $(12,592)

The Company’s leases of certain office and transportation equipment assets qualify as short-term leases. The Company has elected to apply the recognition exemption and thus, did not recognize right-of-use assets and lease liabilities for these leases.

For the year ended December 31, 2019, expenses relating to short-term leases also include expenses relating to leases for which the lease terms end on or before December 31, 2019 and for which the recognition exemption is applied. The amounts of lease commitments for short term leases for which the recognition exemption is applied were $1,788 thousand and $452 thousand, as of December 31, 2020 and 2019, respectively.

13. INTANGIBLE ASSETS

Cost Balance at January 1, 2019 Additions Reclassification Balance at December 31, 2019 Accumulated amortization and impairment Balance at January 1, 2019 Amortization expense Balance at December 31, 2019 Carrying amount at December 31, 2019 Cost Balance at January 1, 2020 Reclassification Balance at December 31, 2020 Accumulated amortization and impairment Balance at January 1, 2020	Patent Trademark $ 49,850 $ 33,664 - - - - 49,850 33,664 46,239 - 1,378 - 47,617 - $ 2,233 $ 33,664 $ 49,850 $ 33,664 1,541 - 51,391 33,664 47,617 -	Software $ 1,981 1,675 4,525 8,181 64 1,054 1,118 $ 7,063 $ 8,181 - 8,181 1,118	Total $ 85,495 1,675 4,525 91,695 46,303 2,432 48,735 $ 42,960 $ 91,695 1,541 93,236 48,735

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Amortization expense Balance at December 31, 2020 Carrying amount at December 31, 2020	1,378 48,995 $ 2,396	- - $ 33,664	1,687 2,805 $ 5,376	3,065 51,800 $ 41,436

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The above items of intangible asset are amortized on a straight-line basis over the estimated useful lives as follows:

Patent 20 years Software 3-5 years

Management believes the Company will renew the trademark continuously and has the ability to do so. Various studies including studies about product life cycle, market, competitive and environmental trends, and brand extension opportunities have been performed by management of the Company, which supported their opinion that there is no foreseeable limit to the period over which the trademarked products are expected to generate net cash flows. Therefore, the trademark is considered to have an indefinite useful life. The trademark will not be amortized until its useful life is determined to be finite. Instead it will be tested for impairment annually and whenever there is an indication that it may be impaired.

14. BORROWINGS

a. Short-term borrowings

Secured borrowings (Note 27) Bank loans Unsecured borrowings Line of credit borrowings		December 31	December 31
		2020 $ 230,000 740,766 $ 970,766	2019 $ 210,000 466,488 $ 676,488

The ranges of interest rates on bank loans was 1.031%-1.700% and 1.205%-1.310% per annum as of December 31, 2020 and 2019, respectively.

• b. Short-term bills payable

Commercial paper Less: Unamortized discounts on bills payable Interest rate Due in		December 31
		2020 2019 $ - $ 30,000 - - $ - $ 30,000 - 1.230% - January 3, 2020

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c. Long-term borrowings

Secured borrowings (Note 27) Bank loans Unsecured borrowings Bank loans Less: Current portion Long-term borrowings		December 31	December 31
		2020 $ 225,416 126,326 351,742 (124,124) $ 227,618	2019 $ 227,916 120,000 347,916 (185,944) $ 161,972

As of December 31, 2020 and 2019, the interest rates of the bank borrowings secured by the Company’s freehold land and building were 1.45%-1.60% and 1.70%-1.75% per annum, respectively. The bank borrowings are due from February 2021 to November 2025.

15. OTHER PAYABLES

Payables for salaries and bonuses Payables for commission Payables for charges for service Payables for interest Others		December 31	December 31
		2020 $ 27,835 4,342 2,204 992 58,122 $ 93,495	2019 $ 29,038 5,264 2,171 738 69,374 $ 106,585

16. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

The Company adopted a pension plan under the Labor Pension Act (LPA), which is a state-managed defined contribution plan. Under the LPA, an entity makes monthly contributions to employees’ individual pension accounts at 6% of monthly salaries and wages.

b. Defined benefit plans

The defined benefit plans adopted by the Company in accordance with the Labor Standards Law are operated by the government. Pension benefits are calculated on the basis of the length of service and average monthly salaries of the six months before retirement. The Company contributes amounts equal to 2% of total monthly salaries and wages to a pension fund administered by the pension fund monitoring committee. Pension contributions are deposited in the Bank of Taiwan in the committee’s name. Before the end of each year, the Company assesses the balance in the pension fund. If the amount of the balance

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in the pension fund is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Company is required to fund the difference in one appropriation that should be made before the end of March of the next year. The pension fund is managed by the Bureau of Labor Funds, Ministry of Labor (the “Bureau”); the Company has no right to influence the investment policy and strategy.

The amounts included in the balance sheets in respect of the Company’s defined benefit plans were as follows:

Present value of defined benefit obligation Fair value of plan asset Net defined benefit liability		December 31	December 31
		2020 $ 90,308 (54,834) $ 35,474	2019 $ 114,921 (68,013) $ 46,908

Movements in net defined benefit liability were as follows:

	Present Value
	of the Defined		Net Defined
	Benefit	Fair Value of	Benefit
	Obligation	the Plan Assets	Liability
Balance at January 1, 2019	$ 113,514	$ (59,095)	$ 54,419
Service cost
Current service cost	678	-	678
Net interest expense (income)	1,277	(682)	595
Recognized in profit or loss	1,955	(682)	1,273
Remeasurement
Return on plan assets (excluding
amounts included in net interest)	-	(2,247)	(2,247)
Actuarial loss - changes in demographic
assumptions	47	-	47
Actuarial loss - changes in financial
assumptions	1,639	-	1,639
Actuarial gain - experience adjustments	(1,329)	-	(1,329)
Recognized in other comprehensive
income	357	(2,247)	(1,890)
Contributions from the employer	-	(6,894)	(6,894)
Benefits paid from plan assets	(905)	905	-
	(905)	(5,989)	(6,894)
Balance at December 31, 2019	114,921	(68,013)	46,908
Service cost
Current service cost	668	-	668
Net interest expense (income)	862	(521)	341
Recognized in profit or loss	1,530	(521)	1,009
Remeasurement
Return on plan assets (excluding
amounts included in net interest)	-	(2,132)	(2,132)

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	Present Value
	of the Defined		Net Defined
	Benefit	Fair Value of	Benefit
	Obligation	the Plan Assets	Liability
Actuarial loss - changes in financial
assumptions	2,278	-	2,278
Actuarial gain - experience adjustments	(5,411)	-	(5,411)
Recognized in other comprehensive
income	(3,133)	(2,132)	(5,265)
Contributions from the employer	-	(7,178)	(7,178)
Benefits paid from plan assets	(23,010)	23,010	-
	(23,010)	15,832	(7,178)
Balance at December 31, 2020	$ 90,308	$ (54,834)	$ 35,474

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

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

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

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

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

Discount rate Expected rate of salary increase	December 31
	2020 2019 0.500% 0.750% 2.750% 2.750%

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

Discount rate 0.25% increase 0.25% decrease Expected rate of salary increase 0.25% increase 0.25% decrease		December	31
		2020 $ (2,278) $ 2,360 $ 2,268 $ (2,201)	2019 $ (3,047) $ 3,161 $ 3,044 $ (2,951)

The sensitivity analysis presented above may not be representative of the actual change in the present value of the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

The expected contributions to the plan for the next year The average duration of the defined benefit obligation		December	31
		2020 2019 $ 12,023 $ 7,485 10.2 years 10.71 years

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17. EQUITY

• a. Share capital

Ordinary shares

Number of shares authorized (in thousands) Shares authorized Number of shares issued and fully paid (in thousands) Shares issued		December 31	December 31
		2020 300,000 $ 3,000,000 199,331 $ 1,993,310	2019 200,000 $ 2,000,000 199,331 $ 1,993,310

A holder of issued ordinary shares with par value of NT$10 per share is entitled to vote and to receive dividends.

On March 11, 2019, the Company’s board of directors resolved to cancel 550 thousand treasury shares, and the cancellation base date was on March 2, 2019.

b. Capital surplus

May be used to offset a deficit, distributed as cash dividends, or transferred to share capital (1) Issuance of ordinary shares Conversion of bonds Treasury share transactions Difference between consideration and carrying amount from the acquisition or disposal of subsidiaries’ shares May only be used to offset a deficit Changes in percentage of ownership interests in subsidiaries (2) May not be used for any purpose Employee share options		December 31	December 31
		2020 $ 131,003 99,979 59,673 12,201 63,352 184 $ 366,392	2019 $ 150,936 99,979 59,673 12,201 75,499 184 $ 398,472

• 1) Such capital surplus may be used to offset a deficit; in addition, when the Company has no deficit, such capital surplus may be distributed as cash dividends or transferred to share capital (limited to a certain percentage of the Company’s number of shares fully paid).

• 2) Such capital surplus arises from the effect of changes in ownership interests in subsidiaries resulting

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from equity transactions other than actual disposals or acquisitions, or from changes in capital surplus of subsidiaries accounted for using the equity method.

c. Retained earnings and dividend policy

Under the dividends policy as set forth in the amended Articles, where the Company made a profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as a legal reserve of 10% of the remaining profit, setting aside or reversing a special reserve in accordance with the laws and regulations, and then any remaining profit together with any undistributed retained earnings shall be used by the Company’s board of directors as the basis for proposing a distribution plan with a proportion of no less than 10%, which should be resolved in the shareholders’ meeting for the distribution of dividends and bonuses to shareholders. For the policies on the distribution of compensation of employees and remuneration of directors and supervisors after the amendment, refer to compensation of employees and remuneration of directors and supervisors in Note 19-f.

According to the Articles, 30%-100% of dividends are to be distributed as cash dividends and 0%-70% as share dividends.

An appropriation of earnings to a legal reserve shall be made until the legal reserve equals the Company’s paid-in capital. The legal reserve may be used to offset deficits. If the Company has no deficit and the legal reserve has exceeded 25% of the Company’s paid-in capital, the excess may be transferred to capital or distributed in cash.

Items referred to under Rule No. 1010012865 issued by the FSC and in the directive titled “Questions and Answers for Special Reserves Appropriated Following Adoption of IFRSs” should be appropriated to or reversed from a special reserve by the Company.

The appropriation of deficit for 2019 was approved in the shareholders’ meeting on May 27, 2020 as follows:

Legal reserve Special reserve Capital surplus	Appropriation of Deficits For the Year Ended December 31 2019 $ 186,665 75,178 9,753

The appropriation of earnings for 2018 was approved in the shareholders’ meeting on May 30, 2019 as follows:

Legal reserve Special reserve Cash dividends Dividends per share	Appropriation of Earnings	Appropriation of Earnings
	For the Year Ended December 31
		2018 $ 4,098 $ 17,111 $ 25,913 $ 0.13

In the shareholders’ meeting on May 27, 2020 and May 30, 2019, the Company’s shareholders resolved to issue cash dividends from capital surplus of $19,933 thousand and $13,953 thousand, respectively.

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On March 9, 2021, the Company’s board of directors proposed a loss allowance for 2020 which is subject to resolution of the shareholders in the their meeting to be held on May 27, 2021.

• 135 -

• d. Treasury shares

	Number of	Shares		Number of
	Shares at	Transferred to	Shares	Shares at
Purpose of Buy-back	January 1	Employees	Cancelled	December 31
2020
Shares transferred to
employees (in thousands
of shares)	5,000	3,000	-	8,000
2019
Shares transferred to
employees (in thousands
of shares)	550	5,000	(550)	5,000

Under the Securities and Exchange Act, the Company shall neither pledge treasury shares nor exercise shareholders’ rights on these shares, such as rights to dividends and to vote.

18. REVENUE

Revenue from the sale of machinery Revenue from the rendering of services Others	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 788,664 14,596 27 $ 803,287	2019 $ 855,217 15,980 14 $ 871,211

• a. Refer to Note 4-l for information about disaggregation of revenue.

• b. Contract balances: as of December 31, 2020 and 2019, the amounts of contract liabilities were $27,102 thousand and $30,406 thousand, respectively, which is mainly comprised of unearned receipts.

• c. Contract liabilities in the beginning of the year have been recognized as sales revenue during the year.

19. NET LOSS

• a. Other income

Subsidy income	For the Year Ended December 31
	2020 2019 $ 23,479 $ 12,689

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Rental income Others	23,334 8,338 $ 55,151	14,345 13,832
		$ 40,866

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b. Other gains and losses

Net foreign exchange losses Net gain on financial assets at FVTPL Loss on disposal of property, plant and equipment Loss on compensations Others Finance costs Interest on bank loans Interest on lease liabilities Depreciation and amortization Property, plant and equipment Right-of-use assets Intangible assets An analysis of depreciation by function Operating costs Operating expenses An analysis of amortization by function Operating expenses	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
	2020 2019 $(21,594) $(18,559) 450 1,353 - (166) (19,974) - (308) - $(41,426) $(17,372) For the Year Ended December 31
	2020 2019 $ 18,734 $ 16,774 561 534 $ 19,295 $ 17,308 For the Year Ended December 31
		2020 $ 52,989 9,565 3,065 $ 65,619 $ 24,108 38,446 $ 62,554 $ 3,065	2019 $ 50,390 6,278 2,432 $ 59,100 $ 20,899 35,769 $ 56,668 $ 2,432

c. Finance costs

d. Depreciation and amortization

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e. Employee benefits expense

Short-term benefits Salaries Insurance Post-employment benefits Defined contribution plans Defined benefit plans (Note 16) Other employee benefits Total employee benefits expense An analysis of employee benefits expense by function Operating costs Operating expenses	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 170,677 16,123 186,800 7,812 1,009 8,821 1,281 $ 196,902 $ 71,186 125,716 $ 196,902	2019 $ 182,877 17,450 200,327 8,587 1,273 9,860 1,785 $ 211,972 $ 84,874 127,098 $ 211,972

• f. Compensation of employees and remuneration of directors and supervisors

According to the Articles of Incorporation of the Company, the Company accrues compensation of employees and remuneration of directors and supervisors at the rates of 1%-10% and no higher than 3%, respectively, of net profit before income tax, compensation of employees, and remuneration of directors and supervisors. Resulting from a loss for the years ended 2020 and 2019, no estimation for compensation of employees and remuneration of directors and supervisors was made.

If there is a change in the amounts after the annual financial statements are authorized for issue, the differences are recorded as a change in the accounting estimate next year.

There was no difference between the actual amounts of compensation of employees and remuneration of directors and supervisors paid and the amounts recognized in the financial statements for the years ended December 31, 2018.

Information on the compensation of employees and remuneration of directors and supervisors resolved by the Company’s board of directors is available at the Market Observation Post System website of the Taiwan Stock Exchange.

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20. INCOME TAXES

a. Income tax recognized in profit or loss

Major components of tax benefit are as follows:

Current tax Adjustments for prior years Others Deferred tax In respect of the current year Income tax benefit recognized in profit or loss	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 3,166 99 3,265 (24,199) $(20,934)	2019 $ (36) - (36) (10,383) $(10,419)

A reconciliation of accounting profit and income tax benefit is as follows:

Net loss before income tax Income tax benefit calculated at the statutory rate Tax-exempt income Nondeductible expenses in determining taxable income Unrecognized loss carryforwards and deductible temporary differences Land value increment tax Adjustments for prior years’ tax Income tax benefit recognized in profit or loss Income tax recognized in other comprehensive income Deferred tax In respect of the current period Remeasurement on defined benefit plan	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
	2020 2019 $ (139,667) $ (285,037) $ (27,933 ) $ (57,007 ) (2,965 ) - 3,824 377 2,875 46,247 99 - 3,166 (36) $ (20,934) $ (10,419) For the Year Ended December 31
		2020 $ 1,100	2019 $ 378

b. Income tax recognized in other comprehensive income

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• c. Deferred tax assets and liabilities

The movements of deferred tax assets and deferred tax liabilities are as follows:

For the year ended December 31, 2020

Deferred tax assets Defined benefit obligation Unrealized gain on transactions with associates Loss carryforward Share of loss of subsidiaries accounted for using the equity method Others For the year ended December 31, 2019 Deferred tax assets Defined benefit obligation Unrealized gain on transactions with associates Loss carryforward Share of loss of subsidiaries accounted for using the equity method Others	Recognized in Other Recognized Compre- Opening in Profit hensive Balance or Loss Income $ 10,105 $ (1,233) $ (1,100) 579 1,850 - 9,984 (2,460) - 16,679 23,375 - 18,516 2,667 - $ 55,863 $ 24,199 $ (1,100) Recognized in Other Recognized Compre- Opening in Profit hensive Balance or Loss Income $ 11,608 $ (1,125) $ (378) 3,198 (2,619) - 9,984 - - 13,003 3,676 - 8,065 10,451 - $ 45,858 $ 10,383 $ (378)	Closing Balance $ 7,772 2,429 7,524 40,054 21,183 $ 78,962 Closing Balance $ 10,105 579 9,984 16,679 18,516 $ 55,863

• d. Information about unused loss carryforwards.

Loss carryforwards as of December 31, 2020 comprised:

Unused Amount

Expiry Year

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Unused Amount	Expiry Year
$ 38,564	2026
24,133	2029
24,763	2030
$ 87,460

e. The Company’s income tax returns through 2018 were examined and cleared by the tax authorities.

21. LOSSES PER SHARE

Unit: NT$ Per Share

Basic losses earnings per share Diluted losses earnings per share	For the Year Ended 31	For the Year Ended 31	December
		2020 $ (0.61) $ (0.61)	2019 $ (1.39) $ (1.39)

The losses and weighted average number of ordinary shares outstanding in the computation of losses per share were as follows:

Net Loss for the Year

Losses used in the computation of basic/diluted losses per share	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $(118,733)	2019 $(274,618)

Weighted average number of ordinary shares outstanding (in thousand shares):

Weighted average number of ordinary shares in computation of basic/diluted losses per share	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 193,138	2019 197,479

22. GOVERNMENT GRANTS

The Company obtained a subsidy in the amount of $14,827 thousand from the government in accordance with the handling of salary and working capital subsidies for difficult businesses of manufacturing and technical service industries that are affected by severe pneumonia with novel pathogens by the Ministry of Economic Affairs.

23. PARTIAL ACQUISITION OR DISPOSAL OF SUBSIDIARIES- WITHOUT LOSS OF CONTROL

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In June 2020, Sogotec Limited bought back its ordinary shares, which increased the Company’s continuing interest from 57.82% to 58.11%.

In June 2019, the Company subscribed for additional new shares of Sogotec Limited at a percentage different from its existing ownership percentage, thereby reducing its continuing interest from 65.53% to 57.82%.

The above transactions were accounted for as equity transactions, since the Company did not cease to have control over these subsidiaries. For details about the partial disposal of Sogotec Limited, refer to Note 23 to the Company’s consolidated financial statements for the year ended December 31, 2020.

• 143 -

24. CAPITAL MANAGEMENT

The Company manages its capital to ensure that the Company will be able to continue as going concerns while maximizing the return to stakeholders through the optimization of the debt and equity balance.

The capital structure of the Company consists of net debt (borrowings offset by cash) and equity of the Company (comprising issued capital, reserves, retained earnings, other equity and non-controlling interests).

Key management personnel of the Company review the capital structure on a quarterly basis. As part of this review, the key management personnel consider the cost of capital and the risks associated with each class of capital. Based on recommendations of the key management personnel, in order to balance the overall capital structure, the Company may adjust the amount of dividends paid to shareholders, the number of new shares issued or repurchased, and the amount of new debt issued or existing debt redeemed.

The Company is not subject to any externally imposed capital requirements.

25. FINANCIAL INSTRUMENTS

• a. Fair value of financial instruments that are not measured at fair value

The Company’s management considers the carrying amounts recognized in the financial statements for financial assets and financial liabilities not carried at fair value to approximate their fair values or their fair values cannot be reliably measured.

• b. Fair value of financial instruments that are measured at fair value on a recurring basis

Fair value hierarchy

==> picture [450 x 97] intentionally omitted <==

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

December 31, 2019
Level 1 Level 2 Level 3 Total
Financial assets at FVTPL
Beneficiary certificates $ 18,827 $ - $ - $ 18,827
----- End of picture text -----

There were no transfers between Levels 1 and 2 for the year ended December 31, 2019.

• c. Categories of financial instruments

Financial assets Financial assets at FVTPL Mandatorily classified as at FVTPL Financial assets at amortized cost (1) Financial liabilities	December 31
	2020 2019 $ - $ 18,827 885,142 711,758

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Financial liabilities at amortized cost (2)	December 31
	2020 2019 1,552,271 1,313,762

• 1) The balances include financial assets at amortized cost, which comprise cash, time deposits with original maturity of more than 3 months, notes receivable, accounts receivable, finance lease receivables and other receivables.

• 2) The balances included financial liabilities measured at amortized cost, which comprise short-term borrowings, short-term bills payable, accounts payable, other payables and long-term borrowings.

• d. Financial risk management objectives and policies

The Company’s major financial instruments include beneficiary certificates, accounts receivable, accounts payable, lease liabilities and short-term and long-term borrowings. The Company’s corporate treasury function provides services to the business, monitors and manages the financial risks relating to the operations of the Company through internal risk reports which analyze exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

1) Market risk

The Company’s activities is exposed primarily to the financial risks of changes in foreign currency exchange rates (see (a) below) and interest rates (see (b) below).

There had been no change to the Company’s exposure to market risks or the manner in which these risks were managed and measured.

• a) Foreign currency risk

The Company had foreign currency sales and purchases, which were exposed to foreign currency risk. To protect against reductions in value and the volatility of future cash flows caused by changes in foreign exchange rates, the Company managed the risk by balancing positions of assets and liabilities denominated in foreign currencies.

The carrying amounts of the Company’s foreign currency denominated monetary assets and monetary liabilities and of the derivatives exposed to foreign currency risk at the end of the reporting period are set out in Note 29.

Sensitivity analysis

The Company was mainly exposed to the USD, RMB and EUR.

The following table details the Company’s sensitivity to a 1% increase and decrease in New Taiwan dollars (the functional currency) against the relevant foreign currencies. The rate of 1% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis included only outstanding foreign currency denominated monetary items and adjusts their translation at the end of the reporting period for a 1% change in foreign currency rates. For a 1% strengthening/weakening of NTD against the relevant currency, the net loss before tax would be an increase/a decrease of $6,533 thousand and $5,223 thousand for the years ended December 31, 2020 and 2019, respectively.

• b) Interest rate risk

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The Company was exposed to interest rate risk because the Company borrowed funds at both fixed and floating interest rates. The risk is managed by the Company by maintaining an appropriate mix of fixed and floating rate borrowings.

The carrying amounts of the Company’s financial assets and financial liabilities with exposure to interest rates at the end of the reporting period were as follows:

Fair value interest rate risk Financial liabilities Cash flow interest rate risk Financial assets Financial liabilities	December 31
	2020 2019 $ 33,149 $ 99,615 126,223 62,346 1,322,508 984,404

Sensitivity analysis

The sensitivity analyses below were determined based on the Company’s exposure to interest rates for both derivatives and non-derivative instruments at the end of the reporting period. For floating rate liabilities, the analysis was prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A 10 basis points increase or decrease was used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

The sensitivity analyses were determined based on the Company’s exposure to interest rates at the end of the reporting period. A 10 basis points increase or decrease was used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

If interest rates had been 10 basis points higher/lower and all other variables were held constant, the Company’s pre-tax loss for the years ended December 31, 2020 and 2019 would increase/decrease by $1,196 thousand and $922 thousand, respectively, which was mainly attributable to the Company’s exposure to cash flow on its variable-rate bank borrowings.

• c) Other price risk

The Company was exposed to price risk through its investments in beneficiary certificates.

Sensitivity analysis

The sensitivity analyses below were determined based on the exposure to price risks at the end of the reporting period. If prices had been 10% higher/lower, pre-tax loss for years ended December 31, 2020 and 2019 would have decreased/increased by $8,054 thousand and $1,883 thousand, respectively, as a result of the changes in fair value of financial assets at FVTPL.

2) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. As at the end of the reporting period, the Company’s maximum exposure to credit risk which will cause a financial loss to the Company due to failure of counterparties to discharge an obligation and due to financial guarantees provided by the Company could arise from:

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• a) The carrying amount of the respective recognized financial assets as stated in the balance sheets; and

• b) The amount of contingent liabilities in relation to financial guarantee issued by the Company.

The Company adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. The Company only transacts with entities that are rated the equivalent of excellent grade. This information is supplied by a rating agency where available and, if not available, the Company uses other publicly available financial information to rate its major customers. The Company’s exposure and the credit ratings of its counterparties are continuously monitored and the aggregate value of transactions concluded is spread amongst approved counterparties.

The Company did transactions with a large number of unrelated customers and, thus, no concentration of credit risk was observed.

3) Liquidity risk

Ultimate responsibility for liquidity risk management rests with the board of directors, which has built an appropriate liquidity risk management framework for the Company’s short, medium and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, and continuously monitoring forecast and actual cash flows as well as matching the maturity profiles of financial assets and liabilities. As of December 31, 2020 and 2019, the Company had available unutilized bank loan facilities set out in (b) below.

• a) Liquidity and interest rate risk tables for non-derivative financial liabilities

The following tables detail the Company’s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables had been drawn up based on the undiscounted cash flows of financial liabilities from the earliest date on which the Company can be required to pay. Specifically, bank loans with a repayment on demand clause were included in the earliest time band regardless of the probability of the banks choosing to exercise their rights. The maturity dates for other non-derivative financial liabilities were based on the agreed repayment dates.

December 31, 2020

Non-derivative financial liabilities Non-interest bearing Lease liabilities Variable interest rate liabilities December 31, 2019 Non-derivative financial liabilities	Less than 3 Months 3 Months to 1 Year $ 229,763 $ - 3,049 8,999 878,417 223,342 $1,111,229 $ 232,341 Less than 3 Months 3 Months to 1 Year	1-5 Years $ - 20,982 217,208 $ 238,190 1-5 Years	5+ Years $ - 1,201 24,557
			$ 25,758
			5+ Years

• 147 -

Non-interest bearing Lease liabilities Variable interest rate liabilities Fixed interest rate liabilities	$ 259,358 1,872 677,319 70,000 $1,008,549	$ - 5,615 151,957 - $ 157,572	$ - 18,640 168,858 - $ 187,498	$ - 4,802 - -
				$ 4,802

The above amount of variable interest rate instruments for both non-derivative financial assets and liabilities was subject to change if changes in variable interest rates differ from those estimates of interest rates determined at the end of the reporting period.

b) Financing facilities

Unsecured bank overdraft facility, reviewed annually and payable on demand: Amount used Amount unused Secured bank overdraft facility: Amount used Amount unused		December 31	December 31
		2020 $ 867,092 717,759 $ 1,584,851 $ 455,416 63,500 $ 518,916	2019 $ 616,488 860,789 $ 1,477,277 $ 437,916 - $ 437,916

26. TRANSACTIONS WITH RELATED PARTIES

The Company’s board of directors was fully re-elected on May 27, 2020. Parpro Corporation (Parpro) lost its control over the Company by not being able to acquire more than half the seats in the board of directors and its relationship with the Company had changed from parent company to associate. Parpro held 20.86% of the Company’s outstanding shares on December 31, 2020. Besides information disclosed elsewhere in the other notes, details of transactions between the Company and other related parties are disclosed below:

• a. Related parties and their relationships with the Company:

Relationship with the Related Party Company Parpro Corporation (Parpro) Investor with significant influence over the Company (parent entity before May 27, 2020) EFA Technologies Corporation (EFA) Subsidiary of the investor with significant influence over the Company (fellow subsidiary before

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	May 27, 2020)
Anderson Industrial	Subsidiary
Anderson Europe GmbH	Subsidiary
Anderson America	Subsidiary
CNT	Subsidiary
Jentec	Subsidiary
Anderson Merchandise	Subsidiary
Sogotec	Subsidiary
Giben America, Inc. (Giben America)	Subsidiary
Giben do Brasil Maquinas e Equipamentos Ltda (Giben Brasil)	Subsidiary
	(Continued)

• 149 -

Related Party MATEC Maschinenban GmbH (Matec GmbH) Monforts CNC Werkzeugmaschinentechnik GmbH (Monforts GmbH) Anderson Service GmbH (ASC) Verite Corporation	Relationship with the Company Subsidiary Subsidiary Subsidiary Associates (Concluded)

• b. Sales

Related Party Line Items Category/Name Sales of machinery Subsidiaries Anderson America Others	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 204,225 101,728 $ 305,953	2019 $ 212,611 118,273 $ 330,884

The transaction terms with related parties were not significantly different from those with third parties.

• c. Purchase of goods

Related Party Category/Name Subsidiaries Fellow subsidiary	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 9,034 - $ 9,034	2019 $ 25,526 2,717 $ 28,243

• d. Receivables from related parties

Related Party Line Items Category/Name Accounts receivable Subsidiaries Anderson America Giben America CNT Giben Brasil Sogotec		December 31	December 31
		2020 $ 208,772 161,835 64,321 53,258 5,957 $ 494,143	2019 $ 162,056 139,704 50,852 66,710 6,914 $ 426,236

(Continued)

• 150 -

• 151 -

Related Party Line Items Category/Name Other receivables Investors with significant influence over the Company Parent entity Subsidiaries CNT MATEC GmbH Anderson America Sogotec Monforts GmbH Others Associates		December 31	December 31
		2020 $ 6 - 52,203 35,536 3,376 2,000 - 802 31 $ 93,954	2019 $ - 39 - 35,226 - 1,928 68,372 682 79 $ 106,326

(Concluded)

The outstanding trade receivables from related parties are unsecured. For the years ended December 31, 2020 and 2019, no impairment losses were recognized for trade receivables from related parties.

• e. Payables to related parties

Related Party Line Items Category/Name Accounts payable Subsidiaries Anderson Europe Anderson Merchandise Other payables Subsidiaries Anderson Europe Giben America CNT Others f. Prepayments Line Items Related Party Category/Name Subsidiaries		December 31
		2020 2019 $ 1,372 $ 85 21 - $ 1,393 $ 85 $ 20,445 $ 1,006 4,987 - - 31,332 891 10,138 $ 26,323 $ 42,476 December 31
		2020 2019

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$ - $ 9,309

Prepayments for equipment Giben Brasil (classified as other noncurrent assets)

• 153 -

g. Acquisitions of property, plant and equipment

Related Party Category/Name Subsidiaries Anderson Merchandise Monforts GmbH	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 54,063 - $ 54,063	2019 $ - 2,064 $ 2,064

• h. Disposal of property, plant and equipment

Related Party Category/Name Subsidiaries Sogotec		Proceeds For the Year Ended December 31 2020 2019 $ 19,114 $ -		Gain(Loss) on Disposal	Gain(Loss) on Disposal
				For the Year Ended December 31
		2020 $ 19,114		2020 $ -	2019 $ -

• i. Endorsements and guarantees

Information of endorsements and guarantees for subsidiaries was disclosed in Table 2.

• j. Other transactions with related parties

Related Party Line Items Category/Name Rental income Parent entity Subsidiaries Sogotec Anderson America Anderson Merchandise Associates Management income Subsidiaries Anderson Merchandise Interest income Subsidiaries Monforts GmbH MATEC GmbH Giben America	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 54 15,522 4,617 1,576 343 $ 22,112 $ 5,856 $ 894 839 -	2019 $ 318 1,302 4,839 4,952 564 $ 11,975 $ 6,245 $ 966 493 541

• 154 -

$ 1,733 $ 2,000

• 155 -

j. Lease arrangements

Related Party Line Items Category/Name Lease expense Parent entity	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ -	2019 $ 454

The Company leases buildings for plants and office spaces which are under short-term lease regulation, and the lease is under common market price. The lease condition and rental payments are similar to ordinary leases.

• k. Compensation of key management personnel

Short-term employee benefits Post-employment benefits	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 28,346 742 $ 29,088	2019 $ 25,526 682 $ 26,208

The remuneration of directors and key executives was determined by the remuneration committee having regard to the performance of individuals and market trends.

27. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

The following assets at book value were provided as collateral for bank borrowings and to obtain loan limit:

Freehold land Building Other non-current assets		December 31	December 31
		2020 $ 125,457 363,019 6,482 $ 494,958	2019 $ 129,617 379,773 6,482 $ 515,872

28. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

In addition to those disclosed in other notes, significant commitments and contingencies of the Company were as follows:

As of December 31, 2020, unused letters of credit for purchases of raw materials amounted to $2,287 thousand.

29. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The following information was aggregated by the foreign currencies other than functional currency of the

• 156 -

Company and the exchange rates between foreign currencies and Company’s functional currency in NTD were disclosed. The significant assets and liabilities denominated in foreign currencies were as follows:

• 157 -

December 31, 2020

	Foreign		Carrying
	Currencies	Exchange Rate	Amount
Financial assets
Monetary items
	$ 17,697	28.480	$ 504,011
USD		(USD:NTD)
RMB	27,063	4.377 (RMB:NTD)	118,455
	2,444	35.020	85,589
EUR		(EUR:NTD)
Financial liabilities
Monetary items
USD	1,359	28.480 (USD:NTD)	38,704
EUR	453	35.020 (EUR:NTD)	15,864
RMB	50	4.377 (RMB:NTD)	219
December 31, 2019
	Foreign		Carrying
	Currencies	Exchange Rate	Amount
Financial assets
Monetary items
USD	$ 15,702	29.980 (USD:NTD)	$ 470,746
EUR	3,123	33.590 (EUR:NTD)	104,902
RMB	19,750	4.305 (RMB:NTD)	85,024
Financial liabilities
Monetary items
RMB	21,441	4.305 (RMB:NTD)	92,304
USD	1,430	29.980 (USD:NTD)	42,871
EUR	95	33.590 (EUR:NTD)	3,191

For the years ended December 31, 2020 and 2019, realized and unrealized net foreign exchange losses were $21,594 thousand and $18,559 thousand, respectively. It is impractical to disclose net foreign exchange gains (losses) by each significant foreign currency due to the variety of the foreign currency transactions.

30. SEPARATELY DISCLOSED ITEMS

• a. Information about significant transactions:

• 1) Financing provided to others. (Table 1)

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• 2) Endorsements/guarantees provided. (Table 2)

• 3) Marketable securities held (excluding investment in subsidiaries, associates and joint ventures). (Table 3)

• 4) Marketable securities acquired and disposed at costs or prices at least NT$300 million or 20% of the paid-in capital. (None)

• 5) Acquisition of individual real estate at costs of at least NT$300 million or 20% of the paid-in capital. (None)

• 6) Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital. (None)

• 7) Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital. (Table 4)

• 8) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital. (Table 5)

• 9) Trading in derivative instruments. (None)

• b. Information on investees. (Table 6)

• c. Information on investments in mainland China

• 1) Information on any investee company in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, net income of investees, investment income or loss, carrying amount of the investment at the end of the period, repatriations of investment income, and limit on the amount of investment in the mainland China area. (Table 7)

• 2) Any of the following significant transactions with investee companies in mainland China, either directly or indirectly through a third party, and their prices, payment terms, and unrealized gains or losses. (None)

• d. Information of major shareholders:

• List all shareholders with ownership of 5% or greater showing the name of the shareholder, the number of shares owned, and percentage of ownership of each shareholder (Table 8)

• 159 -

TABLE 1

ANDERSON INDUSTRIAL CORPORATION

FINANCING PROVIDED TO OTHERS FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

No.	Lender	Borrower	Financial Statement Account	Related Parties	Highest Balance for the Period (Note 1)	Ending Balance (Note 1)	Actual Borrowing Amount	Interest Rate	Nature of Financing	Business Transaction Amounts	Reasons for Short-term Financing	Allowance for Impairment Loss	Collateral	Collateral	Financing Limit for Each Borrower (Notes 1 and 3)	Aggregate Financing Limits (Notes 1 and 3)	Note
													Item	Value
0	The Company	Giben America MATEC GmbH Monforts GmbH	Accounts receivable - related parties Accounts receivable - related parties Other accounts receivable	Yes Yes No	$ 24,200 35,080 66,580	$ - 35,020 56,032	$ - 35,020 56,032	2.5% 2.5% 2.5%-5%	Short-term financing Short-term financing Short-term financing	$ - - -	Operation requirements Operation requirements Operation requirements	$ - - -	- - -	$ - - -	$ 413,974 413,974 413,974	$ 827,948 827,948 827,948	2 2 5
1	CNT	The Company	Accounts receivable - related parties	Yes	82,156	77,254	-	2.5%	Short-term financing	-	Operation requirements	-	-	-	251,501	251,501	3
2	Sogotec	Sogotec Shanghai	Other receivable - related parties	Yes	179,587	115,786	115,786	1.52%	Business transaction	353,215	-	-	-	-	230,150	230,150	4

Note 1: The balance for the period and ending balance represent the amount approved by the board of directors.

Note 2: The loan limit should not exceed 40% of total equity of the Company. The loan limit to one party should not exceed 20% of the total equity or business transaction amount.

Note 3: The loan limit should not exceed 100% of total equity of the Company.

Note 4: The loan limit should not exceed 40% of total equity of the Company. The loan limit to one party should not exceed the total loan limit or business transaction amount.

Note 5: In May 2020, the Company lost control over Monforts GmbH after designating its trustee in bankruptcy.

• 160 -

TABLE 2

ANDERSON INDUSTRIAL CORPORATION

ENDORSEMENTS/GUARANTEES PROVIDED FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

No.	Endorser/Guarantor	Endorsee/Guarantee	Endorsee/Guarantee	Limits on Endorsement/ Guarantee Given on Behalf of Each Party	Maximum Amount Endorsed/ Guaranteed During the Period	Outstanding Endorsement/ Guarantee at the End of the Period	Actual Borrowing Amount	Amount Endorsed/ Guaranteed by Collaterals	Ratio of Accumulated Endorsement/ Guarantee to Net Equity in Latest Financial Statements(%)	Aggregate Endorsement/ Guarantee Limit	Endorsement/ Guarantee Given by Parent on Behalf of Subsidiaries	Endorsement/ Guarantee Given by Subsidiaries on Behalf of Parent	Endorsement/ Guarantee Given on Behalf of Companies in Mainland China	Note
		Name	Relationship (Note 3)
0	The Company	Anderson Europe GmbH Anderson Merchandise Monforts GmbH MATEC GmbH	b b b b	$ 620,961 620,961 620,961 620,961	$ 42,524 220,000 66,580 175,400	$ - 220,000 - 175,100	$ - 43,512 - 94,554	$ - - - -	- 10.63 - 8.46	$ 1,034,936 1,034,936 1,034,936 1,034,936	Yes Yes Yes Yes	- - - -	- - - -	1 1 1, 4 1
1	Sogotec	Sogotec Shanghai	b	172,613	87,580	87,540	27,792	-	15.21	287,688	-	-	Yes	2

Note 1: The balance to one party should not exceed 30% of the total equity of the Company. The balance should not exceed 50% of total equity of the Company.

Note 2: The balance to one party should not exceed 30% of the total equity of the Sogotec Limited. The balance should not exceed 50% of total equity of the Sogotec Limited.

• Note 3: The relationship is as follows:

• b. The Company controls over 50% of subsidiary’s ordinary shares directly.

Note 4: In May 2020, the Company lost control over Monforts GmbH after designating its trustee in bankruptcy.

• 161 -

TABLE 3

ANDERSON INDUSTRIAL CORPORATION

MARKETABLE SECURITIES HELD DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars)

Holding Company Name	Type and Name of Marketable Securities (Note 1)	Relationship with the Holding Company	Financial Statement Account		December 31, 2020	December 31, 2020		Note
				Shares (In Thousands of Shares)	Carrying Amount	Percentag e of Ownershi p (%)	Fair Value
CNT Anderson Logistics	China Guangfa Bank “ChuanFu Version W, Section 119, year 2020” Structured Deposit “Yuntong Periodic” 28 Day Structured Deposit “Yuntong Periodic” 91 Day Structured Deposit Shares: Harbinger Technology Corporation	- - - -	Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through other comprehensive income - non-current	- - - 3,011	$ 45,521 13,131 21,885 73,104	- - - 8.15	$ 45,521 13,131 21,885 73,104	- - - -

Note 1: Marketable securities in the table refer to shares, bonds, beneficiary certificates and other related derivative securities within the scope of IFRS 9 “Financial Instruments”.

Note 2: Information on investments in subsidiaries and associates, see Table 6 and Table 7 for details.

• 162 -

TABLE 4

ANDERSON INDUSTRIAL CORPORATION

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES AMOUNTING TO AT LEAST $100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars)

Buyer	Related Party	Relationship		Transaction	Transaction	Details	Abnormal Transaction	Abnormal Transaction	Notes/Accounts Receivable(Payable)	Notes/Accounts Receivable(Payable)	Note
			Purchase/ Sale	Amount	% to Total	Payment Terms	Unit Price	Payment Terms	Ending Balance	% to Total
The Company Sogotec	Anderson America Sogotec Shanghai	Subsidiaries Subsidiaries	Sales Sales	$(204,225) (352,603)	(25) (44)	Note 1 Net 360 days from the end of the month after acceptance	None Note 2	Note 1 Note 2	$ 208,772 500,315	37 91	- Note 3

Note 1: Collection depends on capital status.

• Note 2: Sales price between Sogotech and related parties are decided mutually, the credit period for related parties is net 360 days from the end of the month after acceptance. The credit period for non-related parties is by installment or 30-150 days from the end of the month after acceptance.

Note 3: Receivable generated from related-party transactions is $616,100 thousand, recorded as accounts receivable of $500,315 thousand and other accounts receivable of $115,785 thousand.

• 163 -

TABLE 5

ANDERSON INDUSTRIAL CORPORATION

RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars)

Company Name	Related Party	Relationship	Ending Balance	Turnover Rate		Overdue	Amounts Received in Subsequent Period	Allowance for Impairment Loss
					Amount	Actions Taken
The Company Sogotec	Anderson America Giben America Sogotec Shanghai Sogotec Shanghai	Subsidiaries Subsidiaries Subsidiaries Subsidiaries	Accounts receivable $ 208,772 Accounts receivable 161,404 Accounts receivable 500,315 Other accounts receivable115,786	1.10 0.32 0.74 N/A	$ - - 136,489 115,786	- - - -	$ 60,721 - - 46,577	$ - - - -

• 164 -

TABLE 6

ANDERSON INDUSTRIAL CORPORATION

INFORMATION ON INVESTEES (EXCLUDING INFORMATION ON INVESTMENT IN MAINLAND CHINA) FOR THE YEAR ENDED DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars)

Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount	Original Investment Amount	As of	December 31, 2020	December 31, 2020	Net Income (Loss) of the Investee	Share of Profits (Loss)	Note
				December 31, 2020	December 31, 2019	Shares (In Thousands of Shares)	%	Carrying Amount
The Company Anderson Merchandise Anderson Logistics Giben SAMOA Giben BVI Anderson Europe GmbH	Anderson Industrial Anderson Europe GmbH Anderson America Anderson Logistics Giben BVI Giben SAMOA Anderson Merchandise Sogotec Sogotec Sogotec Verite Giben America Giben Brasil Giben Brasil Monforts GmbH MATEC GmbH ASC	Hong Kong Germany USA Taiwan British Virgin Islands Samoa Taiwan Taiwan Taiwan Taiwan Taiwan USA Brazil Brazil Germany Germany Germany	Importing, exporting and general investing activities Manufacture, sale of machinery and service Sale of machinery and service Importing and Exporting Investment Investment Sale of wood panels and service Manufacture and sale of machinery Manufacture and sale of machinery Manufacture and sales of machinery Importing and Exporting Sale of machinery and service Manufacture and sale of machinery Manufacture and sale of machinery Manufacture and sale of machinery Manufacture and sale of machinery Manufacture and sale of machinery	$ 1,014 441,603 215,024 220,000 422,078 146,813 50,000 238,746 3,000 178,682 18,000 145,329 1,183 421,626 197,426 155,496 808	$ 1,014 441,603 215,024 220,000 422,078 146,813 50,000 238,746 3,000 178,682 18,000 145,329 1,183 421,626 197,426 155,496 -	300 Note 1 1 22,000 10 10 5,000 11,796 50 4,461 1,800 Note 1 Note 1 Note 1 Note 1, 2 Note 1 Note 1	100.00 100.00 100.00 100.00 100.00 100.00 100.00 58.11 0.25 21.97 33.33 100.00 0.28 99.72 - 100.00 100.00	$ 31,885 291,452 33,922 262,464 205,118 82,475 163,908 293,491 2,962 126,092 5,352 (15,254) 574 204,814 - 173,021 837	$ - (18,702) (14,920) (7,952) (4,869) (47,038) 14,374 3,302 3,302 3,302 (10,868) (39,640) (184) (184) - (37,986) (37)	$ - (18,409) (14,920) (7,952) (4,869) (47,038) 14,374 9,856 Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable	- - - - - - - - - - - - - - - - -

Note 1: Limited company structure.

Note 2: In May 2020, the Company lost control over Monforts GmbH after designating its trustee in bankruptcy.

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TABLE 7

ANDERSON INDUSTRIAL CORPORATION

INFORMATION ON INVESTMENTS IN MAINLAND CHINA FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

Investee Company	Main Businesses and Products	Main Businesses and Products	Paid-in Capital	Paid-in Capital	Method of Investment (Note 1)	Accumulated Outward Remittance for Investment from Taiwan as of January 1, 2020	Investment Flows	Investment Flows	Accumulated Outward Remittance for Investment from Taiwan as of December 31, 2020	Net Income (Loss) of the Investee	% Ownership of Direct or Indirect Investment	Investment Gain (Loss)	Carrying Amount as of December 31, 2020	Accumulated Repatriation of Investment Income as of December 31, 2020	Note
							Outflow	Inflow
CNT Jentec Sogotec Shanghai	Manufacture and sale of woodworking machinery Manufacture and sale of machinery Sale of machinery and service		$ 264,167 70,640 26,487		a a b	$ 264,167 70,640 26,487	$ - - -	$ - - -	$ 264,167 70,640 26,487	$ (16,299) (15,325) (32,600)	100 100 100	$ (16,299) (15,342) (32,600)	$ 247,891 39,243 (71,292)	$ 104,731 - -	2 and 4 2 -
Accumulated Outward Remittance for Investment in Mainland China as of December 31, 2020		Investment Amounts Authorized by Investment Commission, MOEA		Upper Limit on the Amount of Investment Stipulated by Investment Commission, MOEA
$ 361,294		$ 361,294		$ - (Note 3)

Note 1: The methods of investment are as follows:

• a. Direct investment in mainland China.

• b. Sogotec has obtained 100% contribution for $26,487 thousand (US$800 thousand).

Note 2: The amount was calculated using the equity method valuation and based on the audited financial statements.

Note 3: In accordance with “Examination Principles for Licensing Investment or Technical Cooperation in Mainland China” (revised by the MOEA on August 29, 2008), the Company has acquired certificate of operating scope, therefore the upper limit does not have to be calculated.

Note 4: As of December 31, 2020, CNT has remitted investment income of RMB23,109 thousand, equivalent to NT$104,731 thousand.

Note 5: MATEC Shanghai has been liquidated in March 2020.

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TABLE 9

ANDERSON INDUSTRIAL CORPORATION

INFORMATION OF MAJOR SHAREHOLDERS DECEMBER 31, 2020

Name of Major Shareholder	Shares	Shares
	Number of Shares	Percentage of Ownership (%)
Parpro Corporation Yunyong Investment Co., Ltd.	39,904,488 20,000,000	20.01 10.03

Note: The information of major shareholders presented in this table is provided by the Taiwan Depository & Clearing Corporation based on the number of ordinary shares and preferred shares held by shareholders with ownership of 5% or greater, that have been issued without physical registration (including treasury shares) by the Company as of the last business day for the current quarter. The share capital in the financial statements may differ from the actual number of shares that have been issued without physical registration because of different preparation basis.

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ANDERSON INDUSTRIAL CORPORATION

THE CONTENTS OF STATEMENTS OF MAJOR ACCOUNTING ITEMS

Item Major Accounting Items in Assets, Liabilities and Equity Statement of cash and cash equivalents Statement of accounts receivable from non-related parties Statement of changes in investments accounted for using the equity method Statement of changes in right-of-use assets Statement of lease liabilities Statement of changes in property, plant and equipment Statement of short-term borrowings Statement of long-term borrowings Major Accounting Items in Profit or Loss Statement of cost of revenue Statement of marketing, administrative, and development expenses Statement of employee benefit by function

Statement Index

1 2 3 4 5 Note 11 Note 14 Note 14 6 7 8

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STATEMENT 1

ANDERSON INDUSTRIAL CORPORATION

STATEMENT OF CASH AND CASH EQUIVALENTS DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars, Unless Specified Otherwise)

Item Description Cash in banks Demand deposits Foreign currency deposits Including US$1,930 thousand at the exchange rate of 28.480; RMB$356 thousand at the exchange rate of 4.377; EUR113 thousand at the exchange rate of 35.020. Checking accounts Cash on hand	Amount $ 55,754 60,469 6 116,229 748 $116,977

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STATEMENT 2

ANDERSON INDUSTRIAL CORPORATION

STATEMENT OF ACCOUNTS RECEIVABLE FROM NON-RELATED PARTIES DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

Client Name Non-related parties Client A Client B Client C Client D Client E Others (Note) Less: Allowance for doubtful accounts Net amount	Amount $ 15,592 14,309 4,279 4,278 3,810 32,364 74,632 (7,720) $ 66,912

Note: The amount of individual client included in others does not exceed 5% of the account balance.

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STATEMENT 3

ANDERSON INDUSTRIAL CORPORATION

STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

Investees Anderson Industrial Anderson Europe GmbH Anderson America Anderson Logistics Giben BVI Giben SAMOA Anderson Merchandise Sogotec CNT Jentec	Balance, January 1, 2020 Shares Amount 300,000 $ 31,361 Note 1 297,753 700 50,821 22,000,000 269,290 10,000 227,997 10,000 129,339 5,000,000 149,553 11,795,854 301,632 Note 1 259,362 Note 1 54,363 $1,771,471	Additions in Investment Shares Amount - $ - - - - - - - - - - - - - - - - - - - $ -	Decrease in Investment Increase (Decrease) in Using Equity Method Amount Shares Amount (Note 3) - $ - $ 524 - - (6,301) - - (16,899) - - (6,826) - - (22,879) - - (46,864) - - 14,355 - (5,927) (2,214) - - (11,471) - - (15,120) $ (5,927) $ (113,695)	Balance, December 31, 2020 Shares % Amount 300,000 100.00 $ 31,885 Note 1 100.00 291,452 700 100.00 33,922 22,000,000 100.00 262,464 10,000 100.00 205,118 10,000 100.00 82,475 5,000,000 100.00 163,908 11,795,854 58.11 293,491 Note 1 100.00 247,891 Note 1 100.00 39,243 $1,651,849	Net Assets Value (Note 2) Collateral $ 31,885 - 295,334 - 33,924 - 262,464 - 205,118 - 94,295 - 165,438 - 334,375 - 251,501 - 36,989 - $1,711,323
	Shares 300,000 Note 1 700 22,000,000 10,000 10,000 5,000,000 11,795,854 Note 1 Note 1	Shares - - - - - - - - - -	Shares - - - - - - - - - -	Shares % 300,000 100.00 Note 1 100.00 700 100.00 22,000,000 100.00 10,000 100.00 10,000 100.00 5,000,000 100.00 11,795,854 58.11 Note 1 100.00 Note 1 100.00

Note 1: Limited company structure.

Note 2: The calculation of net assets value was based on the audited financial statements as of December 31, 2020.

Note 3:

a. Exchange differences on translation of the financial statements of foreign operations $ (3,603) b. Share of profits of subsidiaries accounted for using the equity method (100,599) c. Changes in capital surplus of subsidiaries accounted for using the equity method (2,394) c. Changes in retained earnings of subsidiaries accounted for using the equity method 98 d. Changes in other equity of subsidiaries accounted for using the equity method 2,056 f. Others (9,253) $(113,695)

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STATEMENT 4

ANDERSON INDUSTRIAL CORPORATION

STATEMENT OF CHANGES IN RIGHT-OF-USE ASSETS DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars)

Cost Balance at January 1, 2020 Additions Balance at December 31, 2020 Accumulated depreciation Balance at January 1, 2020 Depreciation expenses Balance at December 31, 2020 Carry amount at December 31, 2020	Land $ 22,029 - $ 22,029 $ 3,004 3,004 $ 6,008 $ 16,021	Buildings Transportation Equipment $ 8,009 $ 3,185 - 13,298 $ 8,009 $ 16,483 $ 2,224 $ 1,050 2,670 3,891 $ 4,894 $ 4,941 $ 3,115 $ 11,542	Total $ 33,223 13,298
			$ 46,521
			$ 6,278 9,565
			$ 15,843
			$ 30,678

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STATEMENT 5

ANDERSON INDUSTRIAL CORPORATION

STATEMENT OF LEASE LIABILITIES DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

				For the Year
				Ended
				December 31,
	Item	Lease Term	Discount Rate	2020
Land		7 years	1.71%	$ 18,374
Buildings		3 years	1.71%	3,163
Transportation	equipment	3 years	1.71%	11,612
				$ 33,149

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STATEMENT 6

ANDERSON INDUSTRIAL CORPORATION

STATEMENT OF COST OF REVENUE FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

Item Raw materials used Balance, beginning of year Add: Raw material purchased Less: Raw materials, end of year Less: Transferred to manufacturing expenses Direct materials consumption Direct labor Manufacturing expenses Manufacturing cost Work in process, beginning of year Less: Work in process, end of year Less: Others Cost of finished goods Finished goods and merchandise, beginning of year Merchandise purchased Less: Finished goods and merchandise, end of year Add: Others Less: Raw materials transferred out Cost of goods sold in finished goods and merchandise Write-down of inventories Total cost of revenue

Amount $ 112,336 415,460 (114,996) (37,850) 374,950 48,079 114,389 537,418 149,725 (168,305) (97) 518,741 57,961 16,840 (34,997) 4,618 (8,667) 554,496 6,165 $ 560,661

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STATEMENT 7

ANDERSON INDUSTRIAL CORPORATION

STATEMENT OF MARKETING, ADMINISTRATIVE AND DEVELOPMENT EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

Item Payroll Depreciation Import and export Insurance Professional service fees Research and development Others (Note)	Selling Expenses General and Administrative Expenses Research and Development Expenses $ 47,129 $ 28,869 $ 30,923 10,995 25,808 1,643 24,018 4 - 5,868 3,264 3,004 75 11,619 21 - - 8,023 35,648 33,276 5,946 $ 123,733 $ 102,840 $ 49,560	Total $ 106,921 38,446 24,022 12,136 11,715 8,023 74,870 $ 276,133

Note: The amount of each item in others does not exceed 5% of the account balance.

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STATEMENT 8

ANDERSON INDUSTRIAL CORPORATION

STATEMENT OF EMPLOYEE BENEFIT BY FUNCTION FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

Salary expenses Insurance expenses Pension Board compensation Others	2020	Total $ 166,603 16,123 8,821 4,074 1,281 $ 196,902	2019
	Classified as Operating Costs Classified as Operating Expenses $ 59,682 $ 106,921 6,460 9,663 4,358 4,463 - 4,074 686 595 $ 71,186 $ 125,716		Classified as Operating Costs Classified as Operating Expenses $ 71,085 $ 107,472 7,535 9,915 5,007 4,853 - 4,320 1,247 538 $ 84,874 $ 127,098	Total $ 178,557 17,450 9,860 4,320 1,785 $ 211,972

Note 1: For the years ended December 31 2020 and 2019, the Company had 224 and 266 employees, respectively, which included 6 non-employee directors for the years then ended.

• Note 2: For the years ended December 31, 2020 and 2019, the Company’s average employee benefits were $885 thousand and $799 thousand, respectively, and the Company average salaries were $764 thousand and $687 thousand, respectively. The percentage change in the average salary expenses was 11.2%.

• Note 3: Supervisor’s fees for current year and prior year were $292 thousand and $600 thousand, respectively. The Company’s independent directors were re-elected on March 27, 2020 and in accordance with the Company’s Articles of Incorporation, independent directors were elected as members of the audit committee..

• Note 4: The compensation policies of Anderson are as follows:

Directors

The remuneration of directors is taking into account the extent and value of the services provided for the Company and the standards of the industry within the ROC and overseas.

If the Company makes profit, the compensation of directors shall be no more than 3% of annual profits in accordance with the Articles of Incorporation.

Transportation allowances paid are according to the approval of the board of directors, non-employee directors are given fixed amount of traveling expenses.

Executive officers

Individual rewards, including salaries, bonuses, special expenses and dividends are decided based on job positions, responsibility taken and industry practice in the ROC.

The amount and distribution of the variable salaries are recommended by the compensation committee to the board of directors for approval.

Employees

In order to maintain the competitiveness of compensation, the Company evaluates the level of salary in the labor market by conducting surveys every year. Operational performance and future development are also taken into consideration when determining the compensation policy. Compensation and performance bonuses of employees differ based on the performance of each employee in order to reward the outstanding employees for their contributions. If the Company makes profit, the compensation of employees shall be at the rate of 1% to 10% of annual profits in accordance with the Articles of Incorporation.

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5. The consolidated financial statements of the parent and subsidiary companies in the most recent year that have been verified and approved by an accountant. DECLARATION OF CONSOLIDATION OF FINANCIAL STATEMENTS OF AFFILIATES

The entities that are required to be included in the consolidated financial statements of Anderson Industrial Corporation as of and for the year ended December 31, 2020 under the “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises” are the same as those included in the consolidated financial statements prepared in conformity with the International Financial Reporting Standards No. 10 “Consolidated Financial Statements”. In addition, the information required to be disclosed in the consolidated financial statements is included in the consolidated financial statements. Consequently, Anderson Industrial Corporation and subsidiaries do not prepare a separate set of consolidated financial statements.

Very truly yours,

ANDERSON INDUSTRIAL CORPORATION

By

WEN JIA LIAO Chairman

March 9, 2021

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INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Stockholders Anderson Industrial Corporation

Opinion

We have audited the accompanying consolidated financial statements of Anderson Industrial Corporation (the “Company”) and its subsidiaries (collectively referred to as the “Group”) which comprise the consolidated balance sheets as of December 31, 2020 and 2019, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies (collectively referred to as the “consolidated financial statements”).

In our opinion, based on our audits and the report of other auditors (refer to the other matter paragraph), the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2020 and 2019, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most

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significance in our audit of the consolidated financial statements for the year ended December 31, 2020. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

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The key audit matters identified in the Group’s consolidated financial statements for the year ended December 31, 2020 are stated as follows:

Revenue Recognition

For the year ended December 31, 2020, the amount of the Group’s sales revenue from machineries was $1,206,808 thousand, which was a significant amount and represented 38% of the total revenue. Sales revenue from machineries may be recognized before the criteria of sales revenue recognition of machineries, such as fulfilling its performance obligation, are met; therefore, we identified revenue recognition as a key audit matter. Refer to Notes 4 and 18 to the consolidated financial statements.

The main audit procedures that we performed in respect of revenue recognition included the following: Understanding the appropriateness of internal controls, testing the operating effectiveness of design and implementation’s effectiveness by inspecting sales contracts, confirming the consistency of transactions for revenue recognition, sampling of subsidiary ledgers, inspecting shipping invoices, clients’ receipts and export documentations, and verifying the accuracy of revenue recognition.

Estimated Impairment of Accounts Receivable

As of December 31, 2020, the balance of accounts receivable held by the Group was $728,550 thousand, which was significant and represented 14% of the total assets. The management applies the use of lifetime expected credit losses for all accounts receivable. The expected credit losses on accounts receivable are estimated by considering past default experience of the debtor, an analysis of the debtor’s current financial position and an assessment of both the current as well as the forecast direction of economic conditions at the reporting date. The evaluation of allowance for loss of accounts receivable, credit risk and appropriateness of provisioning policy involves significant judgments; therefore, we identified the estimated impairment of accounts receivable as a key audit matter. Refer to Notes 5 and 8 to the consolidated financial statements.

The main audit procedures that we performed in respect of the estimated impairment of accounts receivable included assessing the appropriateness of accounts receivable provisioning policy, testing the validity of aging reports, analyzing significant changes in accounts receivable and overdue accounts, assessing the reasonableness of impairment of individual accounts receivable, and confirming any indication of impairment at the end of the year.

Other Matter

Among the subsidiaries included in the consolidated financial statements of the Group, the financial statements of Sogotec Enterprise Co., Ltd. (Sogotec) were audited by other independent auditors. Our opinion expressed in the opinion section of this report, insofar as it relates to the amounts recognized based on financial statements audited by other auditors, is based solely on the reports of other auditors. As of December 31, 2020 and 2019, Sogotec’s total assets amounted to $1,153,329 thousand and $1,175,221 thousand,

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representing 23% and 24%, respectively, of the consolidated total assets of the Group and the total operating revenue amounted to $624,335 thousand and $756,257 thousand, representing 19% and 18%, respectively, of the consolidated total comprehensive income of the Group.

We have also audited the parent company only financial statements of the Group as of and for the years ended December 31, 2020 and 2019 on which we have issued an unmodified opinion with other matter paragraph and an unmodified opinion, respectively.

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

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

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

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

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

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

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

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

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

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

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

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

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

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2020 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audits resulting in this independent auditors’ report are Pei De Chen and Li Wen Kuo.

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Deloitte & Touche Taipei, Taiwan Republic of China

March 9, 2021

Notice to Readers

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

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

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ANDERSON INDUSTRIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Notes 4 and 6) Financial assets at fair value through profit or loss (Notes 4 and 7) Financial assets at amortized cost (Notes 4 and 27) Notes receivable, net (Notes 4 and 8) Accounts receivable, net (Notes 4, 5, 8 and 27) Other receivables (Notes 4 and 27) Current tax assets Inventories (Notes 4 and 9) Prepayments Other current assets Total current assets NON-CURRENT ASSETS Financial assets at fair value through other comprehensive income (Note 4) Financial assets at amortized cost (Notes 4 and 27) Investments accounted for using the equity method (Notes 4 and 26) Property, plant and equipment (Notes 4, 11 and 27) Right-of-use assets (Notes 4 and 12) Intangible assets (Notes 4 and 13) Deferred tax assets (Notes 4 and 20) Other non-current assets (Notes 11 and 27) Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Notes 14 and 27) Short-term notes and bills payable (Note 14) Contract liabilities (Notes 4 and 18) Notes payable Accounts payable (Note 26) Other payables (Note 15) Current tax liabilities Provisions (Note 4) Lease liabilities (Notes 4 and 12) Current portion of long-term borrowings (Notes 14 and 27) Other current liabilities Total current liabilities NON-CURRENT LIABILITIES Long-term borrowings (Notes 14 and 27) Deferred tax liabilities (Notes 4 and 20) Lease liabilities (Notes 4 and 12) Net defined benefit liabilities (Notes 4 and 16) Other non-current liabilities Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY (Note 17) Share capital Ordinary shares Capital surplus Accumulated deficit Legal reserve Special reserve Accumulated deficit Total accumulated deficit Other equity Exchange differences on translation of the financial statements of foreign operations Unrealized gain (loss) on financial assets at fair value through other comprehensive income Total other equity Treasury shares Total equity attributable to owners of the Company NON-CONTROLLING INTERESTS Total equity TOTAL		2020 Amount % $ 800,697 16 80,537 2 172,255 3 198,232 4 728,550 14 165,210 3 628 - 1,130,125 23 46,076 1 29,871 1 3,352,181 67 73,104 2 - - 5,352 - 1,148,829 23 119,994 2 110,923 2 139,300 3 60,952 1 1,658,454 33 $ 5,010,635 100 $ 1,426,499 28 - - 155,122 3 2,262 - 273,110 5 204,806 4 13,134 - 20,465 - 23,658 1 188,310 4 24,675 1 2,332,041 46 351,759 7 1,201 - 89,825 2 43,203 1 8,356 - 494,344 10 2,826,385 56 1,993,310 40 366,392 7 - - - - (114,235) (2) (114,235) (2) (113,832 ) (2) 9,556 - (104,276) (2) (71,320) (1) 2,069,871 42 114,379 2 2,184,250 44 $ 5,010,635 100		2019
				Amount % $ 661,939 13 18,827 - 101,689 2 124,922 3 928,260 19 108,597 2 5,766 - 1,417,668 28 64,976 1 27,642 1 3,460,286 69 34,247 1 17,020 - 8,975 - 1,129,987 23 39,600 1 119,661 3 114,895 2 68,552 1 1,532,937 31 $ 4,993,223 100 $ 1,180,837 24 30,000 1 193,708 4 2,062 - 378,977 8 206,689 4 24,054 - 29,213 - 8,214 - 233,621 5 10,140 - 2,297,515 46 258,822 5 - - 23,751 1 54,883 1 7,102 - 344,558 7 2,642,073 53 1,993,310 40 398,472 8 186,665 4 75,178 1 (271,596) (5) (9,753) - (110,229 ) (2) 7,500 - (102,729) (2) (47,544) (1) 2,231,756 45 119,394 2 2,351,150 47 $ 4,993,223 100

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

(With Deloitte & Touche auditors’ report dated March 9, 2021)

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ANDERSON INDUSTRIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Loss Per Share)

OPERATING REVENUE (Notes 4, 18 and 26) OPERATING COSTS (Notes 9, 19 and 26) GROSS PROFIT OPERATING EXPENSES (Notes 4, 19 and 26) Selling and marketing expenses General and administrative expenses Research and development expenses Expected credit loss Total operating expenses LOSS FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES (Notes 4 and 19) Interest income Other income (Note 26) Other gains and losses Finance costs Share of loss of associates accounted for using the equity method Total non-operating income and expenses LOSS BEFORE INCOME TAX INCOME TAX PROFIT (Notes 4 and 20) NET LOSS FOR THE YEAR OTHER COMPREHENSIVE INCOME (LOSS) Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans		2020 Amount % $ 3,210,946 100 2,356,460 73 854,486 27 421,350 13 409,566 13 82,159 3 73,152 2 986,227 31 (131,741) (4) 3,913 - 71,963 2 (31,861) (1) (34,186) (1) (3,623) - 6,206 - (125,535) (4) 7,516 - (118,019) (4) 5,652 -		2019
				Amount % $ 4,160,545 100 3,140,516 76 1,020,029 24 558,583 13 566,959 14 88,167 2 95,122 2 1,308,831 31 (288,802) (7) 2,584 - 76,570 2 (25,807) - (35,962) (1) (4,586) - 12,799 1 (276,003) (6) 2,952 - (273,051) (6) 1,686 -

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Unrealized gain on investments in equity instruments at fair value through other comprehensive income

2,056 - 6,698 - (Continued)

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ANDERSON INDUSTRIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Loss Per Share)

Income tax expense relating to items that will not be reclassified subsequently (Note 20) Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of the financial statements of foreign operations Other comprehensive income (loss) for the year, net of income tax TOTAL COMPREHENSIVE LOSS FOR THE YEAR NET (LOSS) PROFIT ATTRIBUTABLE TO: Owners of the Company Non-controlling interests TOTAL COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO: Owners of the Company Non-controlling interests LOSS PER SHARE (Note 21) Basic Diluted		2020 Amount % $ (1,130) - (3,832) - 2,746 - $ (115,273) (4) $ (118,733) (4) 714 - $ (118,019) (4) $ (115,782) (4) 509 - $ (115,273) (4) $ (0.61) $ (0.61)		2019
				Amount % $ (337) - (34,103) (1) (26,056) (1) $ (299,107) (7) $ (274,618) (7) 1,567 - $ (273,051) (7) $ (300,787) (7) 1,680 - $ (299,107) (7) $ (1.39) $ (1.39)
		$		$
		$		$
		$		$
		$		$
		$		$

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

(With Deloitte & Touche auditors’ report dated March 9, 2021)

(Concluded)

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ANDERSON INDUSTRIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

BALANCE AT JANUARY 1, 2019 Appropriation of 2018 earnings Legal reserve Special reserve Cash dividends distributed by the Company - NT$0.13 per share Cash dividends distributed from capital surplus Net (loss) profit for the year ended December 31, 2019 Other comprehensive income (loss) for the year ended December 31, 2019 Total comprehensive income (loss) for the year ended December 31, 2019 Buy-back of treasury shares Cancellation of treasury shares Changes in percentage of ownership interests in subsidiaries Cash dividends paid to non-controlling interests of subsidiaries BALANCE AT DECEMBER 31, 2019 Appropriation of 2019 deficit Legal reserve to offset deficit Special reserve to offset deficit Capital surplus to offset deficit Cash dividends distributed from capital surplus Net (loss) profit for the year ended December 31, 2020 Other comprehensive income (loss) for the year ended December 31, 2020 Total comprehensive income (loss) for the year ended December 31, 2020 Buy-back of treasury shares Changes in percentage of ownership interests in subsidiaries Cash dividends paid to non-controlling interests of subsidiaries BALANCE AT DECEMBER 31, 2020			Equity Attributes to Owners of the Company		Total Equity Attributable to Owners of the Non-controlling Company Interests $ 2,577,248 $ 47,641 - - - - (25,913 ) - (13,953 ) - (274,618 ) 1,567 (26,169) 113 (300,787) 1,680 (47,544 ) - - - 42,705 77,295 - (7,222) 2,231,756 119,394 - - - - - - (19,933 ) - (118,733 ) 714 2,951 (205) (115,782) 509 (23,776 ) - (2,394 ) (3,518 ) - (2,006) $ 2,069,871 $ 114,379	Total Equity $ 2,624,889 - - (25,913 ) (13,953 ) (273,051 ) (26,056) (299,107) (47,544 ) - 120,000 (7,222) 2,351,150 - - - (19,933 ) (118,019 ) 2,746 (115,273) (23,776 ) (5,912 ) (2,006) $ 2,184,250
	Ordinary shares Capital Surplus $ 1,998,810 $ 369,134 - - - - - - - (13,953 ) - - - - - - - - (5,500 ) 586 - 42,705 - - 1,993,310 398,472 - - - - - (9,753 ) - (19,933 ) - - - - - - - - - (2,394 ) - - $ 1,993,310 $ 366,392		Retained Earnings Unr Unappropriated Earnings Exchange Differences on Translation of the Fina (Accumulated Financial Statement of Oth Legal Reserve Special Reserve Deficits) Foreign Operations $ 182,567 $ 58,067 $ 48,762 $ (75,980 ) 4,098 - (4,098 ) - - 17,111 (17,111 ) - - - (25,913 ) - - - - - - - (274,618 ) - - - 1,382 (34,249) - - (273,236) (34,249) - - - - - - - - - - - - - - - - 186,665 75,178 (271,596 ) (110,229 ) (186,665 ) - 186,665 - - (75,178 ) 75,178 - - - 9,753 - - - - - - - (118,733 ) - - - 4,498 (3,603) - - (114,235) (3,603) - - - - - - - - - - - - $ - $ - $ (114,235) $ (113,832)	ealized Valuation Gain (Loss) on ncial Assets at Fair Value Through er Comprehensive Income Treasury Shares $ 802 $ (4,914 ) - - - - - - - - - - 6,698 - 6,698 - - (47,544 ) - 4,914 - - - - 7,500 (47,544 ) - - - - - - - - - - 2,056 - 2,056 - - (23,776 ) - - - - $ 9,556 $ (71,320)

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

(With Deloitte & Touche auditors’ report dated March 9, 2021)

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ANDERSON INDUSTRIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Loss before income tax Adjustments for: Depreciation expense Amortization expense Expected credit loss recognized on accounts receivable Net gain on fair value changes of financial assets at financial assets at fair value through profit or loss Finance costs Interest income Share of loss of investments accounted for using the equity method Gain on disposal of property, plant and equipment Impairment losses recognized on intangible assets Write-downs of inventories Loss on foreign currency exchange Provisions Other payables reclassified to revenue Changes in operating assets and liabilities Financial assets mandatorily classified as at fair value through profit or loss Notes receivable Accounts receivable Other receivables Inventories Prepayments Other current assets Contract liabilities Notes payable Accounts payable Other payables Provisions Other liabilities Net defined benefit liabilities Cash generated from operations Interest received Interest paid Income tax paid	2020 $(125,535) 100,804 6,641 73,152 (2,797) 34,186 (3,913) 3,623 (92) - 76,071 31,068 (622) - (57,165) (73,310) 125,698 (56,613) 178,714 18,900 (2,229) (38,586) 200 (105,867) (578) (8,126) 14,535 (6,052) 182,107 3,913 (35,491) (22,600)	2019 $(276,003) 110,077 11,936 95,122 (7,059) 35,962 (2,584) 4,586 (3,894) 21,077 155,159 21,558 (4,534) (33,087) 202,474 64,168 198,738 52,889 149,125 25,878 (2,244) (169,827) (403) 25,949 (68,627) (20,119) (2,862) (5,624) 577,831 2,585 (37,922) (49,617)

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Net cash generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Purchase of financial assets at fair value through other comprehensive income Purchase of financial assets at amortized cost Acquisition of associates	127,929 (36,801) (53,546) -	492,877 - (41,007) (5,000) (Continued)

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ANDERSON INDUSTRIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

Payments for property, plant and equipment Proceeds from disposal of property, plant and equipment Increase in refundable deposits Decrease in refundable deposits Payments for intangible assets Decrease in non-current assets Increase in prepayments for equipment Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase (decrease) in short-term borrowings Decrease in short-term notes and bills payable Proceeds from long-term borrowings Repayment of long-term borrowings Increase (decrease) in guarantee deposits Repayment of the principal portion of lease liabilities Increase in other non-current liabilities Cash dividends paid Payments for treasury shares Dividends paid to non-controlling interests Changes in non-controlling interests Net cash generated from (used in) financing activities EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES NET INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	2020 $ (78,005) 497 - 5,566 (182) 5,946 (10,605) (167,130) 245,662 (30,000) 226,207 (181,624) 400 (19,501) 854 (19,933) (23,776) (2,006) (5,912) 190,371 (12,412) 138,758 661,939 $ 800,697	2019 $ (31,425) 9,790 (3,476) - (2,631) 4,526 (41,505) (110,728) (88,830) (50,000) 119,837 (265,261) (25,658) (24,474) 973 (39,866) (47,544) (7,222) 120,000 (308,045) (20,066) 54,038 607,901 $ 661,939

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

(With Deloitte & Touche auditors’ report dated March 9, 2021)

(Concluded)

• 192 -

ANDERSON INDUSTRIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

1. GENERAL INFORMATION

Anderson Industrial Corporation (the “Company”) was incorporated in the Republic of China (ROC) in July 1972. The Company is mainly engaged in the design, manufacture, sale and import and export of computer numerical control (CNC) machinery, tooling, lumber, wood panels, and building materials.

Since October 11, 2000, the Company’s shares have been listed on the Taiwan Stock Exchange (TWSE).

The consolidated financial statements are presented in the Company’s functional currency, the New Taiwan dollar.

2. APPROVAL OF FINANCIAL STATEMENTS

The consolidated financial statements were approved by the Company’s board of directors on March 9, 2021.

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

• a. Initial application of the amendments to the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) (collectively, the “IFRSs”) endorsed and issued into effect by the Financial Supervisory Commission (FSC)

The initial application of the IFRSs endorsed and issued into effect by the FSC did not have material impact on the Group’s accounting policies.

• b. The IFRSs endorsed by the FSC for application starting from 2021

Effective Date New IFRSs Announced by IASB

Amendments to IFRS 4 “Extension of the Temporary Exemption Effective immediately upon from Applying IFRS 9” promulgation by the IASB Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 January 1, 2021 “Interest Rate Benchmark Reform - Phase 2” Amendment to IFRS 16 “Covid-19-Related Rent Concessions” June 1, 2020

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

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• c. New IFRSs in issue but not yet endorsed and issued into effect by the FSC

Effective Date Announced by IASB (Note New IFRSs 1) “Annual Improvements to IFRS Standards 2018-2020” January 1, 2022 (Note 2) Amendments to IFRS 3 “Reference to the Conceptual January 1, 2022 (Note 3) Framework” Amendments to IFRS 10 and IAS 28 “Sale or Contribution of To be determined by IASB Assets between an Investor and its Associate or Joint Venture” IFRS 17 “Insurance Contracts” January 1, 2023 Amendments to IFRS 17 January 1, 2023 Amendments to IAS 1 “Classification of Liabilities as Current or January 1, 2023 Non-current” Amendments to IAS 16 “Property, Plant and Equipment - January 1, 2022 (Note 4) Proceeds before Intended Use” Amendments to IAS 37 “Onerous Contracts - Cost of Fulfilling a January 1, 2022 (Note 5) Contract” Amendments to IAS 1 “Disclosure of Accounting Policies” January 1, 2023 (Note 6) Amendments to IAS 8 “Definition of Accounting Estimates” January 1, 2023 (Note 7)

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

• Note 2: The amendments to IFRS 9 will be applied prospectively to modifications and exchanges of financial liabilities that occur on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IAS 41 “Agriculture” will be applied prospectively to the fair value measurements on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IFRS 1 “First-time Adoptions of IFRSs” will be applied retrospectively for annual reporting periods beginning on or after January 1, 2022.

• Note 3: The amendments are applicable to business combinations for which the acquisition date is on or after the beginning of the annual reporting period beginning on or after January 1, 2022.

• Note 4: The amendments are applicable to property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after January 1, 2021.

• Note 5: The amendments are applicable to contracts for which the entity has not yet fulfilled all its obligations on January 1, 2022.

• Note 6: The amendments will be applied prospectively for annual reporting periods beginning on or after January 1, 2023.

• Note 7: The amendments are applicable to changes in accounting estimates and changes in

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accounting policies that occur on or after the beginning of the annual reporting period beginning on or after January 1, 2023.

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

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4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

• a. Statement of compliance

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

• b. Basis of preparation

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

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

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

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

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

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

Current assets include:

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

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

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

Current liabilities include:

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

• 2) Liabilities due to be settled within twelve months after the reporting period, even if an agreement to refinance, or to reschedule payments, on a long-term basis is completed after the reporting period and before the consolidated financial statements are authorized for issue; and

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

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

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• d. Basis of consolidation

Principles for preparing consolidated financial statements

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

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

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

All intra-group transactions, balances, income and expenses are eliminated in full upon consolidation. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to the owners of the Company.

See Note 10 and Tables 7 and 8 for the detailed information of subsidiaries (including the percentage of ownership and main business).

e. Foreign currencies

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

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

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

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

For the purpose of presenting consolidated financial statements, the functional currencies of the entities in the Group (including subsidiaries in other countries that use currency different from the currency of the Company) are translated into the presentation currency - New Taiwan dollars as follows: Assets and liabilities are translated at the exchange rates prevailing at the end of the reporting period; income and

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expense items are translated at the average exchange rates for the period. The resulting currency translation differences are recognized in other comprehensive income (attributed to the owners of the Company and non-controlling interests as appropriate).

• 198 -

Goodwill and fair value adjustments on identifiable assets and liabilities acquired in the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the rate of exchange prevailing at the end of each reporting period. Exchange differences arising are recognized in other comprehensive income.

f. Inventories

Inventories, which comprise finished goods, work-in-process, raw materials and merchandise, are stated at the lower of cost or net realizable value. Inventory write-downs are made by item, except where it may be appropriate to group similar or related items. Net realizable value is the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale. Inventories are recorded at weighted-average cost.

g. Investments in associates

An associate is an entity over which the Group has significant influence and which is neither a subsidiary nor an interest in a joint venture. The Group uses the equity method to account for its investments in associates.

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

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

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

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

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h. Property, plant and equipment

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

Except for freehold land which is not depreciated, the depreciation of property, plant and equipment is recognized using the straight-line method. Each significant part is depreciated separately. If the lease term is shorter than the useful lives, assets are depreciated over the lease term. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

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

• i. Goodwill

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

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

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

• j. Intangible assets

• 1) Intangible assets acquired separately

Intangible assets with finite useful lives that are acquired separately are initially measured at cost and subsequently measured at cost less accumulated amortization and accumulated impairment loss. Amortization is recognized on a straight-line basis. The estimated useful lives, residual value, and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired separately are measured at cost less accumulated impairment loss.

• 2) Intangible assets acquired in a business combination

Intangible assets acquired in a business combination and recognized separately from goodwill are initially recognized at their fair value at the acquisition date (which is regarded as their cost). Subsequent to initial recognition, they are measured on the same basis as intangible assets that are acquired separately.

• 3) Derecognition of intangible assets

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

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• k. Impairment of property, plant and equipment, right-of-use asset and intangible assets other than goodwill

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

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

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

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

• l. Financial instruments

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

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

• 1) Financial assets

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

• a) Measurement categories

Financial assets are classified into the following categories: Financial assets at FVTPL and financial assets at amortized cost and equity instruments at fair value through other comprehensive income (FVTOCI).

i. Financial assets at FVTPL

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

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Financial assets at FVTPL are subsequently measured at fair value, with any gains or losses arising on remeasurement recognized in profit or loss. The net gain or loss recognized in profit or loss incorporates any dividends or interest earned on such a financial asset. Fair value is determined in the manner described in Note 25.

• ii. Financial assets at amortized cost

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

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

• ii) The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

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

Interest income is calculated by applying the effective interest rate to the gross carrying amount of such a financial asset.

Cash equivalents include time deposits with original maturities within 3 months from the date of acquisition, which are highly liquid, readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These cash equivalents are held for the purpose of meeting short-term cash commitments.

• iii. Investments in equity instruments at FVTOCI

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

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

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

• b) Impairment of financial assets

The Group recognizes a loss allowance for expected credit losses (ECLs) on financial assets at amortized cost, including accounts receivables and other receivables.

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

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

The Group recognizes an impairment loss in profit or loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account.

• c) Derecognition of financial assets

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

On derecognition of a financial asset at amortized cost in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss.

• 2) Financial liabilities

• a) Subsequent measurement

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

• b) Derecognition of financial liabilities

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

• m. Provisions

Provisions are measured at the best estimate of the discounted cash flows of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.

Provisions for the expected cost of warranty obligations are recognized at the date of sale of the relevant products, at the best estimate of the expenditure required to settle the Group’s obligation by the management of the Group.

• n. Revenue recognition

The Group identifies contracts with customers, allocates the transaction price to the performance obligations and recognizes revenue when performance obligations are satisfied.

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• 1) Revenue from the sale of goods

Revenue from the sale of goods comes from sales of precision machineries. Sales of precision machineries are recognized as revenue when the goods are shipped or accepted, and accounts receivable are recognized concurrently.

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

• 2) Revenue from the rendering of services

Revenue from the rendering of services comes from the repair services and hardware installation services.

As the Group provides repair services and hardware installation services. Consequently, the related revenue is recognized when services are rendered.

o. Leases

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

• 1) The Group as lessor

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

Lease payments from operating leases are recognized as income on a straight-line basis over the terms of the relevant leases.

• 2) The Group as lessee

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

Right-of-use assets are initially measured at cost. Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any remeasurement of the lease liabilities. Right-of-use assets are presented on a separate line in the balance sheets.

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

Lease liabilities are initially measured at the present value of the lease payments. The lease payments are discounted using the interest rate implicit in a lease, if that rate can be readily determined. If that rate cannot be readily determined, the Group uses the lessee’s incremental borrowing rate.

Subsequently, lease liabilities are measured at amortized cost using the effective interest

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method, with interest expense recognized over the lease terms. When there is a change in future lease payments, the Group remeasures the lease liabilities with a corresponding adjustment to the right-of-use-assets. However, if the carrying amount of the right-of-use assets is reduced to zero, any remaining amount of the remeasurement is recognized in profit or loss. Lease liabilities are presented on a separate line in the balance sheets.

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p. Government grants

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

Government grants related to income are recognized in other income on a systematic basis over the periods in which the Group recognizes as expenses the related costs that the grants intend to compensate.

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

• q. Employee benefits

• 1) Short-term employee benefits

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

2) Retirement benefits

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

Defined benefit costs (including service costs, net interest and remeasurement) under the defined benefit retirement benefit plans are determined using the projected unit credit method. Service costs (including current service costs) and net interest on a net defined benefit liability (asset) are recognized as employee benefits expenses in the period that they occur. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling and the return on plan assets (excluding interest), is recognized in other comprehensive income in the period in which it occurs. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss.

The net defined benefit liability (asset) represents the actual deficit (surplus) in the Group’s defined benefit plan. Any surplus resulting from this calculation is limited to the present value of any refunds from the plans or reductions in future contributions to the plans.

• 3) Termination benefits

A liability for termination benefits is recognized at the earlier of when the Group can no longer withdraw the offer of the termination benefits and when the Group recognizes any related restructuring costs.

• r. Taxation

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

• 1) Current tax

Income tax payable (recoverable) is based on taxable profit (loss) for the year determined according to the applicable tax laws of each tax jurisdiction.

According to the Income Tax Law in the ROC, and additional tax on unappropriated earnings is provided for in the year the shareholders approve to retain earnings.

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

• 2) Deferred tax

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

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

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

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

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

• 3) Current tax and deferred tax for the year

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

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

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

The Group considers the economic implications of the COVID-19 when making its critical accounting estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

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Key Sources of Estimation Uncertainty

Estimated impairment of financial assets

The provision for impairment of trade receivable is based on assumptions about risk of default and expected loss rates. The Group uses judgment in making these assumptions and in selecting the inputs to the impairment calculation, based on the Group’s historical experience and existing market conditions as of the end of each reporting period. For details of the key assumptions and inputs used, see Note 8. Where the actual future cash inflows are less than expected, a material impairment loss may arise.

6. CASH AND CASH EQUIVALENTS

Cash on hand Checking accounts and demand deposits Cash equivalent Time deposits with original maturities less than three months		December 31	December 31
		2020 $ 4,261 793,967 2,469 $ 800,697	2019 $ 4,179 654,949 2,811 $ 661,939

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

Bank balance	December 31
	2020 2019 0%-1.24% 0%-0.55%

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets mandatorily classified as at FVTPL Hybrid financial assets Structured deposits Non-derivative financial assets Beneficiary certificates NOTES RECEIVABLE AND ACCOUNTS RECEIVABLE		December 31 2020 2019 $ 80,537 $ - - 18,827 $ 80,537 $ 18,827 December 31 2020 2019

8. NOTES RECEIVABLE AND ACCOUNTS RECEIVABLE

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Notes receivable Accounts receivable At amortized cost Gross carrying amount Less: Allowance for impairment loss	$ 198,232 $ 914,208 (185,658) $ 728,550	$ 124,922 $ 1,096,139 (167,879) $ 928,260

The average credit period of sales of goods was 90-180 days.

The Group measures the loss allowance for accounts receivable at an amount equal to lifetime expected credit losses. The lifetime ECLs on accounts receivable are estimated by reference to past collecting and default experiences of the debtor, an increase in deferred or overdue payments over average credit term and an analysis of the debtors’ current financial position, adjusted for general economic conditions of the industries in which the debtors operate. As the Group’s historical credit loss experience does not show significantly different loss patterns for different customer segments, the provision for loss allowance based on past due status is not further distinguished according to the Group’s different customer base.

The Group writes off an accounts receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery. For accounts receivable that have been written off, the Group continues to engage in enforcement activity to attempt to recover the receivables due. Where recoveries are made, these are recognized in profit or loss.

The following table details the loss allowance for accounts receivable and notes receivable.

December 31, 2020

Gross carrying amount Loss allowance (Lifetime ECLs) Amortized cost December 31, 2019 Gross carrying amount Loss allowance (Lifetime ECLs) Amortized cost	Under 180 Days $ 818,681 (8,470) $ 810,211 Under 180 Days $ 918,608 (15,770) $ 902,838	181 to 365 Days $ 101,811 (26,927) $ 74,884 181 to 365 Days $ 110,512 (30,208) $ 80,304	Over 365 Days $ 191,948 (150,261) $ 41,687 Over 365 Days $ 191,941 (121,901) $ 70,040	Total $ 1,112,440 (185,658) $ 926,782 Total $ 1,221,061 (167,879) $ 1,053,182

December 31, 2019

The ECL ratios of each of the Group’s accounts receivable aging are shown below, excluding individually assessed or abnormal transactions in which their loss allowances have been recognized in their entirety. The ECL ratio for aging segment from the invoice date less than 180 days is less than 5%, while the ECL ratio for aging segment from the invoice date more than 181 days is 15%-100%.

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The movements of the loss allowance for accounts receivable were as follows:

Balance at January 1 Add: Net remeasurement of loss allowance Less: Amounts written off Foreign exchange gains and losses Balance at December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 167,879 73,152 (56,233) 860 $ 185,658	2019 $ 78,139 95,122 (411) (4,971) $ 167,879

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Refer to Note 27 for details of collaterals that the Group held for these balances.

9. INVENTORIES

Raw materials Work in progress Merchandise Inventory in transit Finished goods		December 31	December 31
		2020 $ 390,299 356,429 246,225 96,273 40,969 $ 1,130,125	2019 $ 491,507 440,841 320,574 117,870 46,876 $ 1,417,668

The cost of goods sold for the years ended December 31, 2020 and 2019 included inventory write-downs of $76,071 thousand and $155,159 thousand, respectively.

10. SUBSIDIARIES

• a. Subsidiaries included in the consolidated financial statements:

Investor Investee Nature of Activities The Company Anderson Industrial (Hong Kong) Ltd. Import, exporting and general investing activities Anderson Europe GmbH Manufacture and sale of machinery and service Anderson America Corporation (U.S.A.) (Anderson America) Sale of machinery and service CNT Industrial (Shanghai) Co., Ltd. (CNT) Manufacture and sale of woodworking machinery Anderson Logistics Corporation (Anderson Logistics) Import and exporting Jentec Machinery (Shanghai) Co., Ltd. (Jentec) Manufacture and sale of machinery Anderson Merchandise Corporation (Anderson Merchandise) Sale of wood panels and service Giben Holdings Co., Ltd. (BVI) (Giben BVI) Investment Giben Holdings Co., Ltd. (SAMOA) (Giben SAMOA) Investment Sogotec Enterprise Co., Ltd. (Sogotec) Manufacture and sale of machinery Anderson Logistics Sogotec Manufacture and sale of machinery Anderson Merchandise Sogotec Manufacture and sale of machinery Giben Samoa Giben America, Inc. (Giben America) Sale of machinery and service Giben do Brasil Maquinas e Equipamentos Ltda (Giben Brasil) Manufacture and sale of machinery Giben BVI Giben Brasil Manufacture and sale of machinery Anderson Europe GmbH Monforts CNC Werkzeugmaschinentechnik GmbH (Monforts GmbH) Manufacture and sale of machinery MATEC GmbH (MATEC) Manufacture and sale of machinery Anderson Service GmbH (ASC) Sale of machinery and service Sogotec Sogotec Precision (Shanghai) Co., Ltd (Sogotec Shanghai) Sale of machinery and service MATEC MATEC Machinery Trading (Shanghai) Co., Ltd. (MATEC Shanghai) Sale of machinery and service

Proportion of Ownership December 31 2020 2019 Remark 100.00% 100.00% 1) 100.00% 100.00% - 100.00% 100.00% - 100.00% 100.00% - 100.00% 100.00% - 100.00% 100.00% - 100.00% 100.00% - 100.00% 100.00% - 100.00% 100.00% - 58.11% 57.82% 2) 21.97% 21.87% 2) 0.25% 0.25% 2) 100.00% 100.00% - 0.28% 0.28% - 99.72% 99.72% - - 100.00% 5) 100.00% 100.00% - 100.00% - 4) 100.00% 100.00% - - 100.00% 3)

• 1) The Group resolved to liquidate and dissolve the company. As of December 31, 2020, the process of liquidation is still ongoing.

• 2) Sogotec bought back its ordinary shares in June 2020, which increased the continuing interests of the Company, Anderson Logistic and Anderson Merchandise.

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• 3) MATEC Shanghai resolved to liquidate and dissolve the company in December, 2019. In March 2020, the liquidation procedure was completed.

• 4) ASC was set up in May 2020 under Anderson Europe GmbH with the amount of EUR25,000. Anderson Europe acquired 100% of ASC’s shares.

• 5) Monforts GmbH was designated as a trustee in bankruptcy by the German court in May 2020. The Group lost control of Monforts GmbH.

• b. Subsidiaries excluded from consolidated financial statements: None.

11. PROPERTY, PLANT AND EQUIPMENT

Cost Balance at January 1, 2019 Additions Disposals Reclassification Effect of foreign currency exchange differences Balance at December 31, 2019 Accumulated depreciation and impairment Balance at January 1, 2019 Depreciation Disposals Impairment loss Reclassification Effect of foreign currency exchange differences Balance at December 31, 2019 Carrying amount at December 31, 2019 Cost Balance at January 1, 2020 Additions Disposals Reclassification Effect of foreign currency exchange differences Balance at December 31, 2020 Accumulated depreciation and impairment Balance at January 1, 2020 Depreciation Disposals Reclassification Effect of foreign currency exchange differences Balance at December 31, 2020 Carrying amount at December 31, 2020	Freehold Land $ 354,444 - - - (3,810) 350,634 - - - - - - - $ 350,634 $ 350,634 - - - 3,224 353,858 - - - - - - $ 353,858	Buildings $ 1,063,275 2,978 (24,150 ) 38,695 (8,984) 1,071,814 435,791 44,104 (24,150 ) - - (4,679) 451,066 $ 620,748 $ 1,071,814 14,739 (5,360 ) 4,455 (211) 1,085,437 451,066 44,544 (5,360 ) - (1,758) 488,492 $ 596,945	Machinery $ 216,027 4,013 (40,184 ) 19,568 (2,520) 196,904 121,634 13,712 (36,711 ) 7,552 (2,284 ) (1,934) 101,969 $ 94,935 $ 196,904 55,288 (980 ) 11,014 (3,021) 259,205 101,969 14,091 (980 ) (112 ) (1,378) 113,590 $ 145,615	Research and Development Equipment $ 56,660 5,516 (33,177 ) - - 28,999 46,861 4,259 (33,177 ) - - - 17,943 $ 11,056 $ 28,999 333 (5,652 ) 2,639 - 26,319 17,943 3,895 (5,652 ) - - 16,186 $ 10,133	Other Equipment $ 195,799 18,918 (45,818 ) 868 (4,348) 165,419 138,979 20,565 (43,395 ) - - (3,344) 112,805 $ 52,614 $ 165,419 7,645 (18,833 ) 172 (3,006) 151,397 112,805 17,520 (18,428 ) - (2,778) 109,119 $ 42,278	Total $ 1,886,205 31,425 (143,329 ) 59,131 (19,662) 1,813,770 743,265 82,640 (137,433 ) 7,552 (2,284 ) (9,957) 683,783 $ 1,129,987 $ 1,813,770 78,005 (30,825 ) 18,280 (3,014) 1,876,216 683,783 80,050 (30,420 ) (112 ) (5,914) 727,387 $ 1,148,829

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

Building 5-55 years Machinery 1-20 years Research and development equipment 3-10 years Other equipment 1-33 years

In August 1996, the Company purchased land in Houlong Township of Miaoli County for $11,000 thousand.

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However, due to the statutory restrictions on the transfer of farmland, the title deed has not been legally transferred to the Company; therefore, the Company entered into a contract with the seller to prevent any future claims on the land by the seller, the seller’s heir at law, or any other third parties. In addition, if the land zoning is changed, the seller is obligated to transfer the title immediately. Accordingly, the farmland is recorded under other non-current assets. In March 2005, the Company applied to the Land Office for the modification of land usage and changed parts of the land’s zoning designation from farmland to construction use, which amounted to $4,518 thousand. Accordingly, the Company has been registered as the legal owner, and has reclassified such land to property, plant and equipment.

Property, plant and equipment pledged as collateral for bank borrowings were set out in Note 27.

12. LEASE ARRANGEMENTS

• a. Right-of-use assets

Carrying amount Land Buildings Transportation equipment Additions to right-of-use assets Depreciation charge for right-of-use assets Land Buildings Transportation equipment Lease liabilities Carrying amount Current Non-current		December 31	December 31
	2020 $ 25,435 73,437 21,122 $119,994 For the Year Ended		2019 $ 28,641 6,488 4,471 $ 39,600 December 31
		2020 2019 $101,019 $ 12,534 $ 3,335 $ 3,731 9,074 21,723 8,345 1,983 $ 20,754 $ 27,437 December 31
		2020 $ 23,658 $ 89,825	2019 $ 8,214 $ 23,751

• b. Lease liabilities

Range of discount rate for lease liabilities was as follows:

December 31

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	2020	2019
Land	1.71%	1.71%
Buildings	1.45%-1.71%	1.71%-5.05%
Transportation equipment	1.45%-1.74%	1.71%-1.74%

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• c. Material lease-in activities and terms

The Group leases land and buildings for the use of plants and offices with lease terms of 3 to 7 years. The Group does not have bargain purchase options to acquire the leasehold land and buildings at the end of the lease terms. In addition, the Group is prohibited from subleasing or transferring all or any portion of the underlying assets without the lessor’s consent.

• d. Other lease information

Expenses relating to short-term leases Total cash outflow for leases	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 26,729 $(47,716)	2019 $ 35,973 $(61,940)

The Group’s leases of certain office and transportation equipment assets qualify as short-term leases. The Group has elected to apply the recognition exemption and thus, did not recognize right-of-use assets and lease liabilities for these leases.

For the year ended December 31, 2019, expenses relating to short-term leases also include expenses relating to leases for which the lease terms end on or before December 31, 2019 and for which the recognition exemption is applied. The amount of lease commitments for short-term leases for which the recognition exemption is applied were $2,416 thousand and $3,963 thousand as of December 31, 2020 and 2019, respectively.

13. INTANGIBLE ASSETS

Cost Balance at January 1, 2019 Additions Reclassification Effect of foreign currency exchange differences Balance at December 31, 2019 Accumulated amortization and impairment Balance at January 1, 2019 Amortization expense Impairment loss Effect of foreign currency exchange differences Balance at December 31, 2019 Carrying amount at December 31, 2019 Cost Balance at January 1, 2020 Additions Reclassification Effect of foreign currency exchange differences	Goodwill $ 52,786 - - (958) 51,828 10,000 - 2,745 - 12,745 $ 39,083 $ 51,828 - - (1,955)	Customer Relation $ 17,816 - - (428) 17,388 16,088 1,738 - (438) 17,388 $ - $ 17,388 - - (870)	Patent $ 58,167 956 - (451) 58,672 50,685 3,015 808 (283) 54,225 $ 4,447 $ 58,672 - 1,541 (467) ( 8 7 0 )	Trademark $ 62,843 - - (698) 62,145 - - - - - $ 62,145 $ 62,145 - - (1,425) ( 8 7 0 )	Software $ 16,478 1,675 4,525 (640) 22,038 1,341 3,830 9,972 (426) 14,717 $ 7,321 $ 22,038 99 - 563 ( 8 7 0 )	Technical Drawing $ 16,091 - - (736) 15,355 5,696 3,353 - (359) 8,690 $ 6,665 $ 15,355 83 - 656 ( 8 7 0 )	Total $ 224,181 2,631 4,525 (3,911) 227,426 83,810 11,936 13,525 (1,506) 107,765 $ 119,661 $ 227,426 182 1,541 (3,498)

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Balance at December 31, 2020

49,873 16,518 59,746 60,720 22,700 16,094 225,651 (Continued)

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Accumulated amortization and impairment Balance at January 1, 2020 Amortization expense Effect of foreign currency exchange differences Balance at December 31, 2020 Carrying amount at December 31, 2020	Goodwill $ 12,745 - - 12,745 $ 37,128	Customer Relation $ 17,388 - (870) 16,518 $ -	Patent $ 54,225 1,572 127 55,924 $ 3,822	Trademark $ - - - - $ 60,720	Software $ 14,717 1,801 568 17,086 $ 5,614	Technical Drawing Total $ 8,690 $ 107,765 3,268 6,641 497 322 12,455 114,728 $ 3,639 $ 110,923 (Concluded)

The above items of intangible asset are amortized on a straight-line basis over the estimated useful lives as follows:

Customer relation 5 years Patents 5-20 years Software 3-5 years Technical drawing 5 years

The Group acquired 100% interests in Giben Brasil in September 2014. After the acquisition, the actual profitability of Giben Brasil was below expectation; however, the Group did not recognize impairment loss due to the estimation of the amended recoverable amount is higher than the carrying amount for the year ended December 31, 2020. An impairment loss on goodwill of $2,745 thousand was recognized for the year ended December 31, 2019 in other gains and losses due to the recoverable amount had been lower than the carrying amount.

Management believes the Group will renew the trademark continuously and has the ability to do so. Various studies including studies about product life cycle, market, competitive and environmental trends, and brand extension opportunities have been performed by management of the Company, which supported the opinion that there is no foreseeable limit to the period over which the trademarked products are expected to generate net cash flows. Therefore, the trademark is considered to have an indefinite useful life. The trademark will not be amortized until its useful life is determined to be finite. Instead it will be tested for impairment annually and whenever there is an indication that it may be impaired.

14. BORROWINGS

a. Short-term borrowings

Secured borrowings (Note 27) Bank loans Unsecured borrowings Bank loans Loans from the government		December 31	December 31
		2020 $ 645,608 769,439 11,452 $ 1,426,499	2019 $ 679,237 501,600 - $ 1,180,837

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The range of interest rates on bank loans were 0.85%-1.73% and 0.46%-1.70% per annum as of December 31, 2020 and 2019, respectively.

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Due to the impact of the Covid-19 pandemic, the United States federal government signed the CARES Act and established the Paycheck Protection Program (PPP) in order to help small-medium companies maintain their day-to-day business operations during the economic crisis by means of salaries paid to workers and creation of jobs

The subsidiary of the Group in the United States obtained a loan of US$597 thousand, which was approved by the financial institution authorized by the U.S. Small Business Administration (SBA) in May 2020. The loan is mainly used to pay the salaries of employees and related welfare expenditures. The subsidiary may apply for loan forgiveness if it meets all specific conditions. The principal and the interest of the loan that has not been forgiven must be paid off within 2 years at a fixed interest rate of 1%. The subsidiary has applied for loan exemption, of which US$195 thousand has been approved and transferred to other income. The remaining part of the loan is still waiting for approval and has not been recognized as income from government grants.

• b. Short-term bills payable

Commercial paper Less: Unamortized discounts on bills payable Interest rate Due in		December	31
		2020 2019 $ - $ 30,000 - - $ - $ 30,000 - 1.230% - January 3, 2020

• c. Long-term borrowings

Secured borrowings (Note 27) Bank loans Unsecured borrowings Bank loans Less: Current portion Long-term borrowings		December 31	December 31
		2020 $ 384,342 155,727 540,069 (188,310) $ 351,759	2019 $ 370,094 122,349 492,443 (233,621) $ 258,822

As of December 31, 2020 and 2019, the interest rates of the bank borrowings secured by the Group’s financial assets at amortized cost, accounts receivable, other receivables, freehold land and buildings were 1.45%-2.40% and 1.70%-2.40% per annum, respectively. The bank borrowings are due from February 2021 to July 2027.

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15. OTHER PAYABLES

Payables for salaries and bonuses Payables for commission Payables for business taxes Payables for compensation of employees and remuneration to directors and supervisors Payables for interest Others		December 31	December 31
		2020 $ 84,089 23,200 11,864 3,856 1,204 80,593 $ 204,806	2019 $ 100,917 23,526 13,034 6,725 1,022 61,465 $ 206,689

16. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

The Company, Sogotec, Anderson Merchandise and Anderson Logistic adopted a pension plan under the Labor Pension Act (LPA), which is a state-managed defined contribution plan. Under the LPA, an entity makes monthly contributions to employees’ individual pension accounts at 6% of monthly salaries and wages.

The employees of the Group’s subsidiaries in other countries are members of state-managed retirement benefit plans operated by the local government. The subsidiary is required to contribute amounts equal to a specified percentage of payroll costs to the retirement benefit scheme to fund the benefits. The only obligation of the Group with respect to the retirement benefit plan is to make the specified contributions.

b. Defined benefit plans

The defined benefit plans adopted by the Company and Sogotec in accordance with the Labor Standards Law are operated by the government. Pension benefits are calculated on the basis of the length of service and average monthly salaries of the six months before retirement. The Company and Sogotec contribute amounts equal to 2% of total monthly salaries and wages to a pension fund administered by the pension fund monitoring committee. Pension contributions are deposited in the Bank of Taiwan in the committee’s name. Before the end of each year, the Group assesses the balance in the pension fund. If the amount of the balance in the pension fund is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Group is required to fund the difference in one appropriation that should be made before the end of March of the next year. The pension fund is operated and managed by the Bureau of Labor Funds, Ministry of Labor (the “Bureau”); as such, the Group does not have any right to intervene in the investment policy and strategy.

The amounts included in the consolidated balance sheets in respect of the Group’s defined benefit plans were as follows:

Present value of defined benefit obligation Fair value of plan asset Net defined benefit liability		December 31	December 31
		2020 $ 101,116 (57,913) $ 43,203	2019 $ 125,701 (70,818) $ 54,883

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• 221 -

Movements in net defined benefit liability were as follows:

	Present Value
	of the Defined		Net Defined
	Benefit	Fair Value of	Benefit
	Obligation	the Plan Assets	Liability
Balance at January 1, 2019	$ 123,871	$ (61,645)	$ 62,226
Service cost
Current service cost	678	-	678
Net interest expense (income)	1,419	(718)	701
Recognized in profit or loss	2,097	(718)	1,379
Remeasurement
Return on plan assets (excluding
amounts included in net interest)	-	(2,324)	(2,324)
Actuarial loss - changes in demographic
assumptions	227	-	227
Actuarial loss - changes in financial
assumptions	2,029	-	2,029
Actuarial gain - experience adjustments	(1,618)	-	(1,618)
Recognized in other comprehensive
income	638	(2,324)	(1,686)
Contributions from the employer	-	(7,036)	(7,036)
Benefits paid from plan assets	(905)	905	-
	(905)	(6,131)	(7,036)
Balance at December 31, 2019	125,701	(70,818)	54,883
Service cost
Current service cost	668	-	668
Net interest expense (income)	956	(546)	410
Recognized in profit or loss	1,624	(546)	1,078
Remeasurement
Return on plan assets (excluding
amounts included in net interest)	-	(2,218)	(2,218)
Actuarial loss - changes in demographic
assumptions	16	-	16
Actuarial loss - changes in financial
assumptions	2,471	-	2,471
Actuarial gain - experience adjustments	(5,686)	-	(5,686)
Recognized in other comprehensive
income	(3,199)	(2,218)	(5,417)
Contributions from the employer	-	(7,341)	(7,341)
Benefits paid from plan assets	(23,010)	23,010	-
	(23,010)	15,669	(7,341)
Balance at December 31, 2020	$ 101,116	$ (57,913)	$ 43,203

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

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

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

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

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

Discount rates Expected rates of salary increase	December 31
	2020 2019 0.500% 0.750%-0.875% 2.750%-3.750% 2.750%-4.000%

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

Discount rate(s) 0.25% increase 0.25% decrease Expected rate(s) of salary increase 0.25% increase 0.25% decrease		December	31
		2020 $ (2,630) $ 2,727 $ 2,618 $ (2,538)	2019 $ (3,419) $ 3,550 $ 3,416 $ (3,309)

The sensitivity analysis presented above may not be representative of the actual change in the present value of the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

The expected contributions to the plan for the next year The average duration of the defined benefit obligation		December	31
	2020 2019 $ 12,497 $ 7,648 10.20-13.20 years 10.71-14.10 years

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17. EQUITY

• a. Share capital

Ordinary shares

Number of shares authorized (in thousand) Shares authorized Number of shares issued and fully paid (in thousand) Shares issued		December 31	December 31
		2020 300,000 $ 3,000,000 199,331 $ 1,993,310	2019 200,000 $ 2,000,000 199,331 $ 1,993,310

A holder of issued ordinary shares with par value of NT$10 per share is entitled to vote and to receive dividends.

On March 11, 2019, the Company’s board of directors resolved to cancel 550 thousand treasury shares, and the cancellation base date was on March 2, 2019.

• b. Capital surplus

May be used to offset a deficit, distributed as cash dividends, or transferred to share capital (1) Issuance of ordinary shares Conversion of bonds Treasury share transactions Difference between consideration and carrying amount arising from the acquisition disposal of subsidiaries’ shares May only be used to offset a deficit Changes in percentage of ownership interests in subsidiaries (2) May not be used for any purpose Employee share options		December 31	December 31
		2020 $ 131,003 99,979 59,673 12,201 63,352 184 $ 366,392	2019 $ 150,936 99,979 59,673 12,201 75,499 184 $ 398,472

• 1) Such capital surplus may be used to offset a deficit; in addition, when the Company has no deficit, such capital surplus may be distributed as cash dividends or transferred to share capital (limited to a certain percentage of the Company’s number of shares fully paid).

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• 2) Such capital surplus arises from the effect of changes in ownership interests in subsidiaries resulting from equity transactions other than actual disposals or acquisitions, or from changes in capital surplus of subsidiaries accounted for using the equity method.

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• c. Retained earnings and dividend policy

Under the dividends policy as set forth in the amended Articles, where the Company made a profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as a legal reserve of 10% of the remaining profit, setting aside or reversing a special reserve in accordance with the laws and regulations, and then any remaining profit together with any undistributed retained earnings shall be used by the Company’s board of directors as the basis for proposing a distribution plan with a proportion of no less than 10%, which should be resolved in the shareholders’ meeting for the distribution of dividends and bonuses to shareholders. For the policies on the distribution of compensation of employees and remuneration of directors and supervisors after the amendment, refer to compensation of employees and remuneration of directors and supervisors in Note 19-f.

According to the Articles of Incorporation of the Company, 30%-100% of dividends are to be distributed as cash dividends and 0%-70% as share dividends.

An appropriation of earnings to a legal reserve shall be made until the legal reserve equals the Company’s paid-in capital. The legal reserve may be used to offset deficits. If the Company has no deficit and the legal reserve has exceeded 25% of the Company’s paid-in capital, the excess may be transferred to capital or distributed in cash.

Items referred to under Rule No. 1010012865 issued by the FSC and in the directive titled “Questions and Answers for Special Reserves Appropriated Following Adoption of IFRSs” should be appropriated to or reversed from a special reserve by the Company.

The appropriation of deficit for 2019 was approved in the shareholders’ meeting on May 27, 2020 as follows:

Legal reserve Special reserve Capital surplus	Appropriation of Deficits
	For the Year Ended December 31
	2019 $ 186,665 75,178 9,753

The appropriation of earnings for 2018 was approved in the shareholders’ meetings on May 30, 2019 as follows:

Legal reserve Special reserve Cash dividends Dividends per share	Appropriation of Earnings	Appropriation of Earnings
	For the Year Ended December 31
		2018 $ 4,098 $ 17,111 $ 25,913 $ 0.13

In the shareholders’ meeting on May 27, 2020 and May 30, 2019, the Company’s shareholders resolved to issue cash dividends from capital surplus of $19,933 thousand and $13,953 thousand, respectively.

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On March 9, 2021, the Company’s board of directors proposed a loss allowance for 2020 which is subject to resolution of the shareholders in their meeting to be held on May 27, 2021.

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d. Treasury shares

	Number of	Shares		Number of
	Shares at	Transferred to	Shares	Shares at
Purpose of Buy-back	January 1	Employees	Cancelled	December 31
2020
Shares transferred to
employees (in thousands
of shares)	5,000	3,000	-	8,000
2019
Shares transferred to
employees (in thousands
of shares)	550	5,000	(550)	5,000

Under the Securities and Exchange Act, the Company shall neither pledge treasury shares nor exercise shareholders’ rights on these shares, such as rights to dividends and to vote.

18. REVENUE

Revenue from the sale of goods Revenue from the rendering of services Others	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 3,132,720 75,263 2,963 $ 3,210,946	2019 $ 4,048,767 103,372 8,406 $ 4,160,545

• 1) Refer to Notes 4-n and 32 for information about contract information and disaggregation of revenue.

• 2) Contract balances: As of December 31, 2020 and 2019, the amounts of contract liabilities were $155,122 thousand and $193,708 thousand, respectively, which mainly comprised of unearned receipts.

19. NET LOSS

a. Other income

Subsidy income Rental income Other payables reclassified as revenue (Note)	For the Year Ended December 31
	2020 2019 $ 39,034 $ 12,689 3,683 4,797 - 33,087

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Others	29,246 $ 71,963	25,997
		$ 76,570

Note: Sogotec reached an agreement with its dealer to be exempted from its obligation on March 12, 2019.

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b. Other gains and losses

Net foreign exchange losses Net gain on financial assets at FVTPL Gain on disposal of property, plant and equipment Impairment losses on non-financial assets Others Finance costs Interest on bank loans Interest on lease liabilities Depreciation and amortization Property, plant and equipment Right-of-use assets Intangible assets An analysis of depreciation by function Operating costs Operating expenses An analysis of amortization by function Operating expenses	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
	2020 2019 $(36,634) $(47,721) 2,797 7,059 92 3,894 - (21,077) 1,884 32,038 $(31,861) $(25,807) For the Year Ended December 31
	2020 2019 $ 32,700 $ 34,469 1,486 1,493 $ 34,186 $ 35,962 For the Year Ended December 31
		2020 $ 80,050 20,754 6,641 $ 107,445 $ 31,177 69,627 $ 100,804 $ 6,641	2019 $ 82,640 27,437 11,936 $ 122,013 $ 30,101 79,976 $ 110,077 $ 11,936

c. Finance costs

d. Depreciation and amortization

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e. Employee benefits expense

Short-term benefits Post-employment benefits Defined contribution plans Defined benefit plans (Note 16) Other employee benefits Total employee benefits expense An analysis of employee benefits expense by function Operating costs Operating expenses	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 746,828 15,515 1,078 16,593 18,010 $ 781,431 $ 128,014 653,417 $ 781,431	2019 $ 938,955 20,968 1,379 22,347 16,242 $ 977,544 $ 152,632 824,912 $ 977,544

• f. Compensation of employees and remuneration of directors and supervisors

According to the Articles of Incorporation of the Company, the Company accrues compensation of employees and remuneration of directors and supervisors at the rates of 1%-10% and no higher than 3%, respectively, of net profit before income tax, compensation of employees, and remuneration of directors and supervisors. Due to loss for the years ended December 31, 2020 and 2019, no estimation for compensation of employees and remuneration of directors and supervisors was made.

If there is a change in the amounts after the annual consolidated financial statements are authorized for issue, the differences are recorded as a change in the accounting estimate next year.

There was no difference between the actual amounts of compensation of employees and remuneration of directors and supervisors paid and the amounts recognized in the consolidated financial statements for the year ended December 31, 2018.

Information on the compensation of employees and remuneration of directors and supervisors resolved by the Company’s board of directors is available at the Market Observation Post System website of the Taiwan Stock Exchange.

20. INCOME TAXES

• a. Income tax recognized in profit or loss:

Major components of income tax benefit are as follows:

Current tax	For the Year Ended December 31
	2020 2019

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b.	In respect of the current year $ 10,057 $ 30,715 Income tax on unappropriated earnings 320 2,084 Adjustments for prior years 6,342 (369) Others 99 - 16,818 32,430 (Continued) For the Year Ended December 31 2020 2019 Deferred tax In respect of the current year (24,334) (35,382) Income tax benefit recognized in profit or loss $ (7,516) $ (2,952) (Concluded) A reconciliation of accounting profit and income tax benefit is as follows: For the Year Ended December 31 2020 2019 Net loss before income tax $(125,535) $(276,003) Income tax benefit calculated at the statutory rate $ (25,107) $ (55,201) Adjustment items in determining taxable profit and loss carryforwards 14,584 $ 53,148 Adjustments for prior years’ tax 6,342 (369) Nondeductible expenses in determining taxable income 4,487 438 Temporary differences 785 4,646 Income tax on unappropriated earnings 320 2,084 Land value increment tax 99 - Tax-exempt income (4,259) - Effect of different tax rate of entities in the Group operating in other jurisdictions (4,767) (7,698) Income tax benefit recognized in profit or loss $ (7,516) $ (2,952) Income tax recognized in other comprehensive income For the Year Ended December 31 2020 2019 Deferred tax In respect of the current period Remeasurement on defined benefit plan $ 1,130 $ 337	$ 10,057 $ 30,715 320 2,084 6,342 (369) 99 - 16,818 32,430 (Continued) For the Year Ended December 31	$ 10,057 $ 30,715 320 2,084 6,342 (369) 99 - 16,818 32,430 (Continued) For the Year Ended December 31	$ 10,057 $ 30,715 320 2,084 6,342 (369) 99 - 16,818 32,430 (Continued) For the Year Ended December 31
		2020 2019 $(125,535) $(276,003) $ (25,107) $ (55,201) 14,584 $ 53,148 6,342 (369) 4,487 438 785 4,646 320 2,084 99 - (4,259) - (4,767) (7,698) $ (7,516) $ (2,952) For the Year Ended December 31
			2020 $ 1,130	2019 $ 337

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c. Deferred tax assets and liabilities

The movements of deferred tax assets and deferred tax liabilities were as follows:

For the year ended December 31, 2020

					Recognized in	Recognized in	Recognized in
						Other
			Recognized in		Comprehensive
	Opening Balance		Profit or Loss		Income			Closing Balance
Deferred tax assets
Defined benefit obligation	$	11,282	$	(1,233 )	$	(1,130 )		$	8,919
Inventory write-downs		26,475		4,716			-		31,191
Unrealized foreign exchange loss		10,178		(4,470 )			-		5,708
Share of loss of subsidiaries accounted for using the
equity method		16,679		23,375			-		40,054
Others		50,281		3,147			-		53,428
	$	114,895	$	25,535	$	(1,130)		$	139,300
Deferred tax liabilities
Share of profit of subsidiaries accounted for using the
equity method	$	-	$	1,201	$		-	$	1,201
For the year ended December 31, 2019
					Recognized in
						Other
			Recognized in		Comprehensive
	Opening Balance		Profit or Loss		Income			Closing Balance
Deferred tax assets
Defined benefit obligation	$	12,744	$	(1,125 )	$	(337 )		$	11,282
Inventory write-downs		20,348		6,127			-		26,475
Unrealized foreign exchange loss		4,955		5,223			-		10,178
Share of loss of subsidiaries accounted for using the
equity method		13,003		3,676			-		16,679
Others		30,672		19,609			-		50,281
	$	81,722	$	33,510	$	(337)		$	114,895
Deferred tax liabilities
Share of profit of subsidiaries accounted for using the
equity method	$	1,872	$	(1,872 )	$		-	$	-

d. Information about unused loss carryforwards

Unused loss carryforward as of December 31, 2020 comprised:

Unused Amount	Expiry Year
$ 38,564	2026
30,233	2029
32,715	2030
$101,512

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e. Income tax assessments

The latest annual income tax returns that have been assessed by the tax authorities were as follows:

Company The Company Anderson Merchandise Anderson Logistics Sogotec	Year
	2018 2018 2018 2018

21. LOSSES PER SHARE

Unit: NT$ Per Share

Basic losses per share Diluted losses per share	For the Year Ended 31	For the Year Ended 31	December
		2020 $ (0.61) $ (0.61)	2019 $ (1.39) $ (1.39)

The losses and weighted average number of ordinary shares outstanding in the computation of losses per share were as follows:

Net Loss for the Year

For the Year Ended December 31 2020 2019 Losses used in the computation of basic/diluted losses per share $(118,733) $(274,618) Weighted average number of ordinary shares outstanding (in thousand shares): For the Year Ended December 31 2020 2019 Weighted average number of ordinary shares in computation of basic loss per share 193,138 197,479	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 193,138	2019 197,479

22. GOVERNMENT GRANTS

In addition to those described in Note 14, the Group obtained a subsidy in the amount of $21,297 thousand from the government in accordance with the handling of salary and working capital subsidies for difficult businesses of manufacturing and technical service industries that are affected by severe pneumonia with novel pathogens by the Ministry of Economic Affairs.

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23. EQUITY TRANSACTIONS WITH NON-CONTROLLING INTERESTS

In June 2020, Sogotec bought back its ordinary shares, which increased the Group’s continuing interest from 79.94% to 80.33%.

In June 2019, the Group subscribed for additional new shares of Sogotec Limited at a percentage different from its existing ownership percentage, thereby reducing its continuing interest from 90.59% to 79.94%.

The above transactions were accounted for as equity transactions, since the Company did not cease to have control over these subsidiaries.

Cash consideration received The proportionate share of the carrying amount of the net assets of the subsidiary transferred from non-controlling interests Differences recognized from equity transactions Line items adjusted for equity transactions Capital surplus - changes in percentage of ownership interests in subsidiaries	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ (5,912) 3,518 $ (2,394) $ (2,394)	2019 $ 120,000 (77,295) $ 42,705 $ 42,705

24. CAPITAL MANAGEMENT

The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximizing the return to stakeholders through the optimization of the debt and equity balance.

The capital structure of the Group consists of net debt (borrowings offset by cash and cash equivalents) and equity of the Group (comprising issued capital, reserves, retained earnings, other equity and non-controlling interests).

Key management personnel of the Group review the capital structure on a quarterly basis. As part of this review, the key management personnel consider the cost of capital and the risks associated with each class of capital. Based on recommendations of the key management personnel, in order to balance the overall capital structure, the Group may adjust the amount of dividends paid to shareholders, the number of new shares issued or repurchased, and the amount of new debt issued or existing debt redeemed. The Group is not subject to any externally imposed capital requirements.

25. FINANCIAL INSTRUMENTS

• a. Fair value of financial instruments that are not measured at fair value

The Group’s management considers the carrying amounts recognized in the consolidated financial

• 236 -

statements for financial assets and financial liabilities not carried at fair value to approximate their fair values or their fair values cannot be reliably measured.

• 237 -

• b. Fair value of financial instruments that are measured at fair value on a recurring basis

• 1) Fair value hierarchy

December 31, 2020 Financial assets at FVTPL Beneficiary certificates Financial assets at FVTOCI Equity instruments Domestic unlisted shares December 31, 2019 Financial assets at FVTPL Beneficiary certificates Financial assets at FVTOCI Equity instruments Domestic unlisted shares	Level 1 $ - $ - Level 1 $ 18,827 $ -	Level 2 $ 80,537 $ - Level 2 $ - $ -	Level 3 $ - $ 73,104 Level 3 $ - $ 34,247	Total $ 80,537 $ 73,104 Total $ 18,827 $ 34,247

There were no transfers between Levels 1 and 2 in the current and prior periods.

• 2) Reconciliation of Level 3 fair value measurements of financial instruments

For the year ended December 31, 2020

Financial Assets Balance at January 1, 2020 Purchases Recognized in other comprehensive income (included in unrealized gain on financial assets at FVTOCI) Balance at December 31, 2020 For the year ended December 31, 2019	Financial Assets at FVTOCI
	Equity Instruments $ 34,247 36,801 2,056 $ 73,104 Financial Assets at FVTOCI

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	Equity
Financial Assets	Instruments
Balance at January 1, 2019	$ 27,549
Recognized in other comprehensive income (included in unrealized gain
on financial assets at FVTOCI)	6,698
Balance at December 31, 2019	$ 34,247

• 3) Valuation techniques and inputs applied for Level 2 fair value measurement

Financial Instrument Structured deposits	Valuation Technique and Inputs
	Future cash flows are estimated based on the rate of return derived from the invested principal and the linked target.

• 4) Valuation techniques and inputs applied for Level 3 fair value measurement

The fair values of unlisted equity securities - ROC were determined using the market approach. In this approach, the estimates or assumptions used to determine fair values are established by reference to relevant information of other listed companies or peers in similar nature of business.

• c. Categories of financial instruments

Financial assets Financial assets at FVTPL Mandatorily classified as at FVTPL Financial assets at amortized cost (1) Financial assets at FVTOCI Equity instruments Financial liabilities Financial liabilities at amortized cost (2)	December 31
	2020 2019 $ 80,537 $ 18,827 2,064,944 1,942,427 73,104 34,247 2,446,746 2,291,008

• 1) The balances include financial assets at amortized cost, which comprise cash and cash equivalents, time deposits with original maturity of more than 3 months, notes receivable, accounts receivable and other receivables.

• 2) The balances included financial liabilities measured at amortized cost, which comprise short-term borrowings, short-term bills payable, notes payable, accounts payable, other payables and long-term borrowings.

• d. Financial risk management objectives and policies

The Group’s major financial instruments include equity and beneficiary certificates investments, accounts

• 239 -

receivable, accounts payable, lease liabilities and short-term and long-term borrowings. The Group’s corporate treasury function provides services to the business, monitors and manages the financial risks relating to the operations of the Group through internal risk reports which analyze exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

1) Market risk

The Group’s activities is exposed primarily to the financial risks of changes in foreign currency exchange rates (see (a) below) and interest rates (see (b) below).

There had been no change to the Group’s exposure to market risks or the manner in which these risks were managed and measured.

a) Foreign currency risk

The Group had foreign currency sales and purchases, which were exposed to foreign currency risk. To protect against reductions in value and the volatility of future cash flows caused by changes in foreign exchange rates, the Group managed the risk by balancing positions of assets and liabilities denominated in foreign currencies.

The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities (including those eliminated on consolidation) and of the derivatives exposed to foreign currency risk at the end of the reporting period are set out in Note 30.

Sensitivity analysis

The Group was mainly exposed to the currency USD, currency RMB and currency EUR.

The following details the effects of a 1% increase or decrease in NTD (the functional currency) against the relevant foreign currencies. For a 1% strengthening/weakening of NTD against the relevant currency, the net loss before tax would be an increase/a decrease of $13,075 thousand and $12,606 thousand for the years ended December 31, 2020 and 2019, respectively. The sensitivity rate used when reporting foreign currency risk internally to key management personnel and representing management’s assessment of the reasonably possible changes in foreign exchange rate is 1%.

b) Interest rate risk

The Group was exposed to interest rate risk because entities in the Group borrowed funds at both fixed and floating interest rates. The risk is managed by the Group by maintaining an appropriate mix of fixed and floating rate borrowings.

The carrying amounts of the Group’s financial assets and financial liabilities with exposure to interest rates at the end of the reporting period were as follows:

Fair value interest rate risk Financial assets Financial liabilities Cash flow interest rate risk Financial assets Financial liabilities	December 31
	2020 2019 $ 2,469 $ 16,247 297,055 467,126 925,217 749,916 1,782,996 1,268,119

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Sensitivity analysis

The sensitivity analyses below were determined based on the Group’s exposure to interest rates for both derivatives and non-derivative instruments at the end of the reporting period. For floating rate liabilities, the analysis was prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A 10 basis points increase or decrease was used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

The sensitivity analyses were determined based on the Group’s exposure to interest rates at the end of the reporting period. A 10 basis points increase or decrease was used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

If interest rates had been 10 basis points higher/lower and all other variables were held constant, the Group’s pre-tax loss for the years ended December 31, 2020 and 2019 would have increased/decreased by $858 thousand and $518 thousand, respectively, which was mainly attributable to the Group’s exposure to cash flow on its variable-rate bank borrowings.

c) Other price risk

The Group was exposed to equity price risk through its investments in equity securities and beneficiary certificates.

Sensitivity analysis

The sensitivity analysis below was determined based on the exposure to equity price risks at the end of the reporting period.

If equity prices had been 10% higher/lower, pre-tax loss for years ended December 31, 2020 and 2019 would have decreased/increased by $8,054 thousand and $1,883 thousand, respectively, as a result of the changes in fair value of financial assets at FVTPL. The other comprehensive income for the years ended December 31, 2020 and 2019 would have increased/decreased by $7,310 thousand and $3,425 thousand, respectively, as a result of the changes in fair value of financial assets at FVTOCI.

2) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. As at the end of the reporting period, the Group’s maximum exposure to credit risk which will cause a financial loss to the Group due to failure of counterparties to discharge an obligation and due to financial guarantees provided by the Group could arise from:

• a) The carrying amount of the respective recognized financial assets as stated in the balance sheets; and

• b) The amount of contingent liabilities in relation to financial guarantee issued by the Group.

The Group adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. The Group only transacts with entities that are rated the equivalent of excellent grade. This information is supplied by a rating agency where available and, if not available, the Group uses other publicly available financial information to rate its major customers. The Group’s exposure and the credit ratings of its counterparties are continuously monitored and the aggregate value of transactions concluded is spread amongst approved counterparties.

• 241 -

The Group did transactions with a large number of unrelated customers and, thus, no concentration of credit risk was observed.

• 3) Liquidity risk

Ultimate responsibility for liquidity risk management rests with the board of directors, which has built an appropriate liquidity risk management framework for the Group’s short, medium and long-term funding and liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, and continuously monitoring forecast and actual cash flows as well as matching the maturity profiles of financial assets and liabilities. As of December 31, 2020 and 2019, the Group had available unutilized bank loan facilities set out in (b) below.

• 242 -

• a) Liquidity and interest rate risk tables for non-derivative financial liabilities

The following tables detail the Group’s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables had been drawn up based on the undiscounted cash flows of financial liabilities from the earliest date on which the Group can be required to pay. Specifically, bank loans with a repayment on demand clause were included in the earliest time band regardless of the probability of the banks choosing to exercise their rights. The maturity dates for other non-derivative financial liabilities were based on the agreed repayment dates.

December 31, 2020

Non-interest bearing Lease liabilities Variable interest rate liabilities Fixed interest rate liabilities December 31, 2019 Non-interest bearing Lease liabilities Variable interest rate liabilities Fixed interest rate liabilities	Less than 3 Months $ 480,178 6,814 1,110,486 104,087 $ 1,701,565 Less than 3 Months $ 587,728 2,310 858,083 245,580 $ 1,693,701	3 Months to 1 Year $ - 18,401 307,330 104,462 $ 430,193 3 Months to 1 Year $ - 6,630 219,489 132,646 $ 358,765	1-5 Years $ - 58,400 271,197 66,510 $ 396,107 1-5 Years $ - 19,837 193,213 55,595 $ 268,645	5+ Years $ - 35,881 26,727 17,253 $ 79,861 5+ Years $ - 4,802 - 30,257 $ 35,059

December 31, 2019

The above amount of variable interest rate instruments for both non-derivative financial assets and liabilities was subject to change if changes in variable interest rates differ from those estimates of interest rates determined at the end of the reporting period.

b) Financing facilities

Unsecured bank overdraft facility, reviewed annually and payable on demand: Amount used Amount unused Secured bank overdraft facility: Amount used Amount unused		December 31	December 31
		2020 $ 925,166 751,044 $ 1,676,210 $ 1,029,950 866,926 $ 1,896,876	2019 $ 653,949 875,656 $ 1,529,605 $ 1,049,331 649,595 $ 1,698,926

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• 244 -

• e. Transfers of financial assets

For the years ended December 31, 2020 and 2019, the Group’s discounted notes receivable with aggregate carrying amounts of $91,983 thousand and $97,043 thousand, respectively, to banks for cash proceeds of $90,959 thousand and $95,620 thousand, respectively. According to the contract, if these trade receivables are not recoverable at maturity, banks have the right to request that the Group pay the unsettled balance. As the Group has not transferred the significant risks and rewards relating to these trade receivables, it continues to recognize the full carrying amounts of these trade receivables and treats these notes and accounts receivable that have been transferred to banks as collateral for borrowings (see Note 27).

As of December 31, 2020 and 2019, the carrying amount of these notes receivable (classified as other receivables) and accounts receivable that have been transferred but not derecognized was $39,988 thousand and $33,899 thousand, respectively, and the carrying amount of the related liabilities was $39,988 thousand and $33,899 thousand, respectively.

26. TRANSACTIONS WITH RELATED PARTIES

The Company’s board of directors was fully re-elected on May 27, 2020. Parpro Corporation (Parpro) lost its control over the Company by not being able to acquire more than half the seats in the board of directors, and its relationship with the Company had changed from parent company to associate. Parpro held 20.86% of the Company’s outstanding shares on December 31, 2020. Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this note. The price and the transaction terms with related parties were not significantly different from those with third parties. Details of material transactions between the Group and other related parties are disclosed below:

• a. Related parties and their relationships with the Company:

Related Party Parpro Corporation (Parpro) EFA Technologies Corporation (EFA) Verite	Relationship with the Company
	Investor with significant influence over the Group (parent entity before May 27, 2020) Subsidiary of the investor with significant influence over the Group (fellow subsidiary before May 27, 2020) Associates

• b. Sales

Related Party Category/Name Associate Investor with significant influence over the Group	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 1,508 29 $ 1,537	2019 $ 5,666 - $ 5,666

For major transactions between the Group and related parties, the transaction price is considerably the same as those of non-related parties.

• 245 -

• 246 -

• c. Purchases of goods

Related Party Category/Name Associate Fellow subsidiary	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 113 - $ 113	2019 $ 272 2,718 $ 2,990

• d. Payables to related parties

Line Item Related Party Category/Name Accounts payable Fellow subsidiary Associates Lease arrangements Related Party Category/Name Lease expense Investor with significant influence over the Group Parent entity		December	31
	2020 2019 $ - $ 1,561 - 20 $ - $ 1,581 For the Year Ended December 31
		2020 $ 140 100 $ 240	2019 $ - 3,151 $ 3,151

• e. Lease arrangements

The Company leases buildings for plants and office spaces which are under short-term lease regulation, and the lease is under common market price. The conditions and rental payments are similar to ordinary leases.

• f. Other transactions with related parties

In September 2019, the Group participated in the cash capital increase of Verite with an investment amount of $5,000 thousand.

• g. Compensation of key management personnel

Short-term employee benefits Post-employment benefits	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 98,458 1,944	2019 $ 101,912 1,845

• 247 -

$ 100,402 $ 103,757

The remuneration of directors and key executives was determined by the remuneration committee having regard to the performance of individuals and market trends.

• 248 -

27. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

The following assets at book value were provided as collateral for bank borrowings and to obtain loan limit:

Bank deposits (classified as financial assets at amortized cost) Accounts receivable Notes receivables (classified as other receivables) Building Freehold land Other non-current assets		December 31	December 31
		2020 $ 123,116 27,652 39,988 363,019 125,457 6,482 $ 685,714	2019 $ 81,766 - 33,899 379,773 129,617 6,482 $ 631,537

28. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

In addition to those disclosed in other notes, significant commitments and contingencies of the Group were as follows:

As of December 31, 2020, unused letters of credit for purchases of raw materials amounted to $62,637 thousand.

29. OTHER ITEMS

The Group has evaluated the impact of the COVID-19 pandemic. As of the issuance date of the consolidated financial report, there was no significant impact on the Group’s operation, financing condition and asset impairment. However, the impact of the pandemic is still uncertain. As such, the Group will continue to monitor the development of the pandemic and evaluate its impact.

30. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The entities in the Group’s significant financial assets and liabilities denominated in foreign currencies aggregated by the foreign currencies other than functional currencies and the related exchange rates between foreign currencies and respective functional currencies were as follows:

December 31, 2020

	Foreign		Carrying
	Currencies	Exchange Rate	Amount
Financial assets
Monetary items
USD	$ 27,552	28.480 (USD:NTD)	$ 784,681
RMB	149,766	4.377 (RMB:NTD)	655,526
			(Continued)

• 249 -

• 250 -

	Foreign		Carrying
	Currencies	Exchange Rate	Amount
Financial liabilities
Monetary items
USD	3,990	28.480 (USD:NTD)	113,635
EUR	538	35.020 (EUR:NTD)	18,841
RMB	51	4.377 (RMB:NTD)	223
			(Concluded)
December 31, 2019
	Foreign		Carrying
	Currencies	Exchange Rate	Amount
Financial assets
Monetary items
USD	$ 25,996	29.980 (USD:NTD)	$ 779,360
RMB	166,178	4.305 (RMB:NTD)	715,396
Financial liabilities
Monetary items
USD	4,182	29.980 (USD:NTD)	125,376
RMB	21,930	4.305 (RMB:NTD)	94,409
EUR	427	33.590 (EUR:NTD)	14,343

For the years ended December 31, 2020 and 2019, realized and unrealized net foreign exchange losses amounted to $36,634 thousand and $47,721 thousand, respectively. It is impractical to disclose net foreign exchange gain (loss) by each significant foreign currency due to the variety of the foreign currency transactions.

31. SEPARATELY DISCLOSED ITEMS

• a. Information about significant transactions

• 1) Financing provided to others. (Table 1)

• 2) Endorsements/guarantees provided. (Table 2)

• 3) Marketable securities held (excluding investment in subsidiaries, associates and joint ventures). (Table 3)

• 4) Marketable securities acquired and disposed at costs or prices at least NT$300 million or 20% of the paid-in capital. (None)

• 5) Acquisition of individual real estate at costs of at least NT$300 million or 20% of the paid-in capital. (None)

• 251 -

• 6) Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital. (None)

• 7) Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital. (Table 4)

• 8) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital. (Table 5)

• 9) Trading in derivative instruments. (None)

• 10) Intercompany relationships and significant intercompany transactions formation on investees. (Table 6)

• b. Information on investees. (Table 7)

• c. Information on investments in mainland China

• 1) Information on any investee company in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, net income of investees, investment income or loss, carrying amount of the investment at the end of the period, repatriations of investment income, and limit on the amount of investment in the mainland China area. (Table 8)

• 2) Any of the following significant transactions with investee companies in mainland China, either directly or indirectly through a third party, and their prices, payment terms, and unrealized gains or losses. (Table 6)

• d. Information of major shareholders:

• List all shareholders with ownership of 5% or greater showing the name of the shares and percentage of ownership of each shareholder (Table 9)

32. SEGMENT INFORMATION

Information reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance focuses on the types of goods or services delivered or provided. The Group’s reportable segments were as follows:

a. Segments revenues and results

The following was an analysis of the Group’s revenue and results from continuing operations by reportable segment.

Segment revenue Machinery segment Wood panels segment	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 2,626,359 584,587 $ 3,210,946	2019 $ 3,536,701 623,844 $ 4,160,545

• 252 -

• 253 -

Segment income Machinery segment Wood panels segment Non-operating income and expenses Loss before tax	$ (156,327) 24,586 (131,741) 6,206 $ (125,535)	$ (308,503) 19,701 (288,802) 12,799 $ (276,003)

• b. Segment total assets and liabilities

The Group’s segment total assets and liabilities and other segment information were not provided to the chief operating decision maker; therefore, disclosure was not necessary.

c. Geographic information

Taiwan China USA Germany Brazil Australia Thailand Others	Revenue from External Customers	Revenue from External Customers	Revenue from External Customers
	For the Year Ended December 31
		2020 $ 932,886 535,361 467,355 404,488 178,512 99,843 15,177 577,324 $ 3,210,946	2019 $ 873,104 679,480 610,566 912,176 152,532 234,281 25,950 672,456 $ 4,160,545

Taiwan Brazil Germany USA China		Non-current Assets	Non-current Assets
		December 31
		2020 $ 995,217 175,104 150,910 72,611 46,856 $ 1,440,698	2019 $ 897,850 177,100 150,873 79,146 52,499 $ 1,357,468

Non-current assets exclude financial instruments, investments accounted for using the equity method and deferred tax assets.

• d. Revenue from major products and services

• 254 -

For the years ended December 31, 2020 and 2019, the Group’s revenue from a single customer did not exceed 10% of the consolidated revenue.

• 255 -

TABLE 1

ANDERSON INDUSTRIAL CORPORATION AND SUBSIDIARIES

FINANCING PROVIDED TO OTHERS FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

No.	Lender	Borrower	Financial Statement Account	Related Parties	Highest Balance for the Period (Note 1)	Ending Balance (Note 1)	Actual Borrowing Amount	Interest Rate	Nature of Financing	Business Transaction Amounts	Reasons for Short-term Financing	Allowance for Impairment Loss	Collateral	Collateral	Financing Limit for Each Borrower (Notes 1 and 3)	Aggregate Financing Limits (Notes 1 and 3)	Note
													Item	Value
0	The Company	Giben America MATEC GmbH Monforts GmbH	Accounts receivable - related parties Accounts receivable - related parties Other accounts receivable	Yes Yes No	$ 24,200 35,080 66,580	$ - 35,020 56,032	$ - 35,020 56,032	2.5% 2.5% 2.5%-5%	Short-term financing Short-term financing Short-term financing	$ - - -	Operation requirements Operation requirements Operation requirements	$ - - -	- - -	$ - - -	$ 413,974 413,974 413,974	$ 827,948 827,948 827,948	2 2 5
1	CNT	The Company	Accounts receivable - related parties	Yes	82,156	77,254	-	2.5%	Short-term financing	-	Operation requirements	-	-	-	251,501	251,501	3
2	Sogotec	Sogotec Shanghai	Other receivable - related parties	Yes	179,587	115,786	115,786	1.52%	Business transaction	353,215	-	-	-	-	230,150	230,150	4

Note 1: The balance for the period and ending balance represent the amount approved by the board of directors.

Note 2: The loan limit should not exceed 40% of total equity of the Corporation. The loan limit to one party should not exceed 20% of the total equity or business transaction amount.

Note 3: The loan limit should not exceed 100% of total equity of the Corporation.

Note 4: The loan limit should not exceed 40% of total equity of the Corporation. The loan limit to one party should not exceed the total loan limit or business transaction amount.

Note 5: In May 2020, the Group lost control over Monforts GmbH after designating its trustee in bankruptcy.

• 256 -

TABLE 2

ANDERSON INDUSTRIAL CORPORATION AND SUBSIDIARIES

ENDORSEMENTS/GUARANTEES PROVIDED FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

No.	Endorser/Guarantor	Endorsee/Guarantee	Endorsee/Guarantee	Limits on Endorsement/ Guarantee Given on Behalf of Each Party	Maximum Amount Endorsed/ Guaranteed During the Period	Outstanding Endorsement/ Guarantee at the End of the Period	Actual Borrowing Amount	Amount Endorsed/ Guaranteed by Collaterals	Ratio of Accumulated Endorsement/ Guarantee to Net Equity in Latest Financial Statements(%)	Aggregate Endorsement/ Guarantee Limit	Endorsement/ Guarantee Given by Parent on Behalf of Subsidiaries	Endorsement/ Guarantee Given by Subsidiaries on Behalf of Parent	Endorsement/ Guarantee Given on Behalf of Companies in Mainland China	Note
		Name	Relationship (Note 3)
0	The Company	Anderson Europe GmbH Anderson Merchandise Monforts GmbH MATEC GmbH	b b b b	$ 620,961 620,961 620,961 620,961	$ 42,524 220,000 66,580 175,400	$ - 220,000 - 175,100	$ - 43,512 - 94,554	$ - - - -	- 10.63 - 8.46	$ 1,034,936 1,034,936 1,034,936 1,034,936	Yes Yes Yes Yes	- - - -	- - - -	1 1 1, 4 1
1	Sogotec	Sogotec Shanghai	b	172,613	87,580	87,540	27,792	-	15.21	287,688	-	-	Yes	2

• Note 1: The balance to one party should not exceed 30% of the total equity of the Company. The balance should not exceed 50% of total equity of the Company.

• Note 2: The balance to one party should not exceed 30% of the total equity of the Sogotec Limited. The balance should not exceed 50% of total equity of the Sogotec Limited.

• Note 3: The relationship is as follows:

• b. The Company controls over 50% of subsidiary’s ordinary shares directly.

Note 4:

• In May 2020, the Group lost control over Monforts GmbH after designating its trustee in bankruptcy.

• 257 -

TABLE 3

ANDERSON INDUSTRIAL CORPORATION AND SUBSIDIARIES

MARKETABLE SECURITIES HELD DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

Holding Company Name	Type and Name of Marketable Securities (Note 1)	Relationship with the Holding Company	Financial Statement Account		December 31, 2020	December 31, 2020		Note
				Shares (In Thousands of Shares)	Carrying Amount	Percentag e of Ownershi p (%)	Fair Value
CNT Anderson Logistics	China Guangfa Bank “ChuanFu Version W, Section 119, year 2020” Structured Deposit “Yuntong Periodic” 28 Day Structured Deposit “Yuntong Periodic” 91 Day Structured Deposit Shares: Harbinger Technology Corporation	- - - -	Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through other comprehensive income - non-current	- - - 3,011	$ 45,521 13,131 21,885 73,104	- - - 8.15	$ 45,521 13,131 21,885 73,104	- - - -

Note 1: Marketable securities in the table refer to shares, bonds, beneficiary certificates and other related derivative securities within the scope of IFRS 9 “Financial Instruments”.

Note 2: Information on investments in subsidiaries and associates, see Table 7 and Table 8 for details.

• 258 -

TABLE 4

ANDERSON INDUSTRIAL CORPORATION AND SUBSIDIARIES

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES AMOUNTING TO AT LEAST $100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars)

Buyer	Related Party	Relationship		Transaction	Transaction	Details	Abnormal Transaction	Abnormal Transaction	Notes/Accounts Receivable(Payable)	Notes/Accounts Receivable(Payable)	Note
			Purchase/ Sale	Amount	% to Total	Payment Terms	Unit Price	Payment Terms	Ending Balance	% to Total
The Company Sogotec	Anderson America Sogotec Shanghai	Subsidiaries Subsidiaries	Sales Sales	$(204,225) (352,603)	(25) (44)	Note 1 Net 360 days from the end of the month after acceptance	None Note 2	Note 1 Note 2	$ 208,772 500,315	37 91	- Note 3

Note 1: Collection depends on capital status.

• Note 2: Sales price between Sogotech and related parties are decided mutually, the credit period for related parties is net 360 days from the end of the month after acceptance. The credit period for non-related parties is by installment or 30-150 days from the end of the month after acceptance.

Note 3: Receivable generated from related party transactions is $616,100 thousand, recorded as accounts receivable of $500,315 thousand and other accounts receivable of $115,785 thousand.

• 259 -

TABLE 5

ANDERSON INDUSTRIAL CORPORATION AND SUBSIDIARIES

RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

Company Name	Related Party	Relationship	Ending Balance	Turnover Rate		Overdue	Amounts Received in Subsequent Period	Allowance for Impairment Loss
					Amount	Actions Taken
The Company Sogotec	Anderson America Giben America Sogotec Shanghai Sogotec Shanghai	Subsidiaries Subsidiaries Subsidiaries Subsidiaries	Accounts receivable $ 208,772 Accounts receivable 161,404 Accounts receivable 500,315 Other accounts receivable115,786	1.10 0.32 0.74 N/A	$ - - 136,489 115,786	- - - -	$ 60,721 - - 46,577	$ - - - -

• 260 -

TABLE 6

ANDERSON INDUSTRIAL CORPORATION AND SUBSIDIARIES

BUSINESS RELATIONSHIP AND SIGNIFICANT INTERCOMPANY TRANSACTION FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

Number	Company Name	Counterparty	Relationship (Note)		Transaction Details	Transaction Details
				Financial Account	Amount	Transaction Terms	% to Total Revenue or Assets
0	The Company	Anderson America Anderson America Giben America Giben America Giben Brasil Matec GmbH CNT CNT CNT Sogotec	1 1 1 1 1 1 1 1 1 1	Sales revenue Accounts receivable - related parties Sales revenue Accounts receivable - related parties Accounts receivable - related parties Other receivable - related parties Sales revenue Accounts receivable - related parties Other receivable - related parties Sales revenue	$ 204,225 208,772 47,942 161,835 53,258 35,536 17,141 64,321 52,203 25,270	The same as common term of trade The same as common term of trade, and collection depends on capital status The same as common term of trade The same as common term of trade, and collection depends on capital status The same as common term of trade, and collection depends on capital status The same as common term of trade, and collection depends on capital status The prices are the Company’s cost plus 3% The same as common term of trade, and collection depends on capital status The same as common term of trade, and collection depends on capital status The same as common term of trade	6 4 1 3 1 1 1 1 1 1
1	Sogotec	Sogotec Shanghai Sogotec Shanghai Sogotec Shanghai	3 3 3	Sales revenue Accounts receivable Other receivable	352,603 500,315 115,786	The same as common term of trade The same as common term of trade, and collection depends on capital status The same as common term of trade, and collection depends on capital status	11 10 2
2	Anderson Europe GmbH	The Company	2	Accounts receivable - related parties	22,495	The same as common term of trade	-
3	Giben SAMOA	Anderson America Anderson America Giben Brasil	3 3 3	Sales revenue Accounts receivable - related parties Accounts receivable - related parties	10,291 14,967 24,464	The same as common term of trade The same as common term of trade, and collection depends on capital status The same as common term of trade, and collection depends on capital status	- - -
4	Anderson Industrial	CNT	3	Other receivable - related parties	21,090	The same as common term of trade, and collection depends on capital status	-

• Note 1: 1. Parent to subsidiary.

• Subsidiary to parent.

• Between subsidiaries.

• Note 2: The disclosed amount is at least NT$10,000 thousand.

• 261 -

TABLE 7

ANDERSON INDUSTRIAL CORPORATION AND SUBSIDIARIES

INFORMATION ON INVESTEES (EXCLUDING INFORMATION ON INVESTMENT IN MAINLAND CHINA) FOR THE YEAR ENDED DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars)

Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount	Original Investment Amount	As of	December 31, 2020	December 31, 2020	Net Income (Loss) of the Investee	Share of Profits (Loss)	Note
				December 31, 2020	December 31, 2019	Shares (In Thousands of Shares)	%	Carrying Amount
The Company Anderson Merchandise Anderson Logistics Giben SAMOA Giben BVI Anderson Europe GmbH	Anderson Industrial Anderson Europe GmbH Anderson America Anderson Logistics Giben BVI Giben SAMOA Anderson Merchandise Sogotec Sogotec Sogotec Verite Giben America Giben Brasil Giben Brasil Monforts GmbH MATEC GmbH ASC	Hong Kong Germany USA Taiwan British Virgin Islands Samoa Taiwan Taiwan Taiwan Taiwan Taiwan USA Brazil Brazil Germany Germany Germany	Import, exporting and general investing activities Manufacture, sale of machinery and service Sale of machinery and service Import and export Investment Investment Sale of wood panels and service Manufacture and sale of machinery Manufacture and sale of machinery Manufacture and sales of machinery Import and export Sale of machinery and service Manufacture and sale of machinery Manufacture and sale of machinery Manufacture and sale of machinery Manufacture and sale of machinery Manufacture and sale of machinery	$ 1,014 441,603 215,024 220,000 422,078 146,813 50,000 238,746 3,000 178,682 18,000 145,329 1,183 421,626 197,426 155,496 808	$ 1,014 441,603 215,024 220,000 422,078 146,813 50,000 238,746 3,000 178,682 18,000 145,329 1,183 421,626 197,426 155,496 -	300 Note 1 1 22,000 10 10 5,000 11,796 50 4,461 1,800 Note 1 Note 1 Note 1 Note 1, 2 Note 1 Note 1	100.00 100.00 100.00 100.00 100.00 100.00 100.00 58.11 0.25 21.97 33.33 100.00 0.28 99.72 - 100.00 100.00	$ 31,885 291,452 33,922 262,464 205,118 82,475 163,908 293,491 2,962 126,092 5,352 (15,254) 574 204,814 - 173,021 837	$ - (18,702) (14,920) (7,952) (4,869) (47,038) 14,374 3,302 3,302 3,302 (10,868) (39,640) (184) (184) - (37,986) (37)	$ - (18,409) (14,920) (7,952) (4,869) (47,038) 14,374 9,856 Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable	- - - - - - - - - - - - - - - - -

Note 1: Limited company structure.

Note 2: In May 2020, the Group lost control over Monforts GmbH after designating its trustee in bankruptcy.

• 262 -

TABLE 8

ANDERSON INDUSTRIAL CORPORATION AND SUBSIDIARIES

INFORMATION ON INVESTMENTS IN MAINLAND CHINA FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

Investee Company	Main Businesses and Products	Main Businesses and Products	Paid-in Capital	Paid-in Capital	Method of Investment (Note 1)	Accumulated Outward Remittance for Investment from Taiwan as of January 1, 2020	Investment Flows	Investment Flows	Accumulated Outward Remittance for Investment from Taiwan as of December 31, 2020	Net Income (Loss) of the Investee	% Ownership of Direct or Indirect Investment	Investment Gain (Loss)	Carrying Amount as of December 31, 2020	Accumulated Repatriation of Investment Income as of December 31, 2020	Note
							Outflow	Inflow
CNT Jentec Sogotec Shanghai	Manufacture and sale of woodworking machinery Manufacture and sale of machinery Sale of machinery and service		$ 264,167 70,640 26,487		a a b	$ 264,167 70,640 26,487	$ - - -	$ - - -	$ 264,167 70,640 26,487	$ (16,299) (15,325) (32,600)	100 100 100	$ (16,299) (15,342) (32,600)	$ 247,891 39,243 (71,292)	$ 104,731 - -	2 and 4 2 -
Accumulated Outward Remittance for Investment in Mainland China as of December 31, 2020		Investment Amounts Authorized by Investment Commission, MOEA		Upper Limit on the Amount of Investment Stipulated by Investment Commission, MOEA
$ 361,294		$ 361,294		$ - (Note 3)

• Note 1: The methods of investment are as follows:

• a. Direct investment in mainland China.

• b. Sogotec has obtained 100% contribution for $26,487 thousand (US$800 thousand).

Note 2: The amount was calculated using the equity method valuation and based on the audited financial statements.

Note 3: In accordance with “Examination Principles for Licensing Investment or Technical Cooperation in Mainland China” (revised by the MOEA on August 29, 2008), the Company has acquired certificate of operating scope, therefore the upper limit does not have to be calculated.

Note 4: As of December 31, 2020, CNT has remitted investment income of RMB23,109 thousand, equivalent to NT$104,731 thousand.

Note 5: MATEC Shanghai has been liquidated in March 2020.

• 263 -

TABLE 9

ANDERSON INDUSTRIAL CORPORATION AND SUBSIDIARIES

INFORMATION OF MAJOR SHAREHOLDERS DECEMBER 31, 2020

Name of Major Shareholder	Shares	Shares
	Number of Shares	Percentage of Ownership (%)
Parpro Corporation Yunyong Investment Co., Ltd.	39,904,488 20,000,000	20.01 10.03

Note: The information of major shareholders presented in this table is provided by the Taiwan Depository & Clearing Corporation based on the number of ordinary shares and preferred shares held by shareholders with ownership of 5% or greater, that have been issued without physical registration (including treasury shares) by the Company as of the last business day for the current quarter. The share capital in the consolidated financial statements may differ from the actual number of shares that have been issued without physical registration because of different preparation basis.

-142-

6. The company and its affiliated companies for the most recent year and ending annual reports As of the end of the day, the occurrence of financial difficulties and their impact on the company’s financial status: none.

-209-

7. Review and analysis of financial status and financial performance and risk issues

1. Financial status:

the main reasons for the major changes in assets, liabilities and equity in the last two years and their impact. If the impact is significant, the future response plan should be explained.

Unit: New Taiwan Dollar Thousand

Year Project Current Assets	109 Year	108	Difference	Difference
			Amount	%
	3,352,181	3,460,618	(108,437) - 3.13	%
Real Estate, Plant and Equipment	1,148,829	1,129,987	18,842	1.67%
Intangible Assets	110,923	119,661	(8,738)	-7.3%
Other Assets	398,702	282,957	115,745	40.91%
total assets	5,010,635	4,993,223	17,412	0.35%
Current liabilities	2,332,041	2,297,515	34,526	1.5%
non-current liabilities	494,344	344,558	149,786	43.47%
total liabilities	2,826,385	2,642,073	184,312	6.98%
attributable to the equity owners of the parent company	2,069,871	2,231,756	(161,885)	-7.25%
equity	1,993,310	1,993,310	-	-
capital reserve	366,392	398,472	(32,080)	-8.05%
retained earnings	(114,235)	(9,753)	(104,482)	- 1071.28%
other equity	(104,276)	(102,729)	(1,547)	-1.51%
treasury stock	(71,320)	(47,544)	(23,776 )	-50% of
non-controlling interests	114,379	119,394	(5,015)	-4.2% of
total equity	2,184,250	2,351,150	(166,900)	-7.1%

-210-

Analysis of changes in the increase or decrease ratio: (the increase or decrease is more than 20%, and the amount of change is 10,000 thousand yuan)

1. Other assets: Mainly due to the increase in right-of-use assets during the current period.

2. Non-current liabilities: Mainly due to the increase in long-term loans in the current period.

3. Retained surplus: Mainly due to losses in the current period.

4. Treasury stocks: mainly due to the purchase of treasury stocks in the current period.

-211-

2. Financial performance

• (1) The main reasons for the major changes in operating income, operating net profit, and pre-tax net profit in the last two years, the expected sales volume and its basis, the possible impact on the company's future financial business, and the corresponding plan

unit: NT$1,000

				unit: NT$1,000
project	the year 109	108 annual	byamount	Changedrate (%)
operatingincome	3,210,946	4,160,545	(949,599)	-22.82%
operatingmargin	854,486	1,020,029	(165,543)	-16.23%
operating income	(131,741)	(288,802)	157,061	54.38%
Non-operating income and expenses	6,206	12,799	(6,593)	-51.51%
pre-tax net profit (loss)	(125,535)	(276,003)	150,468	54.52%
continuing the current business unit netprofit(loss)	(118,019)	(273,051)	155,032	56.78%
loss of business units	-	-	-	-
net current period (loss)	(118,019)	(273,051)	155,032	56.78%
period other comprehensive loss (net of tax)	2,746	(26,056)	28,802	110.54%
period total comprehensiveand losses	(115,273)	(299,107)	183,834	61.46%
net profit attributable to owners of the parent company	( 118,733)	(274,618)	155,885	56.76%
net profit attributable to non-controlling interest	714	1,567	(853)	-54.44%
total comprehensive profit attributable to owners of theparent	(115,782)	(300,787)	185,005	61.51%
total comprehensive loss attributable to non-controlling interest	509	1,680	( 1,171)	-69.7%
Earningsper share	(0.61)	(1.39 )	0.78	56.12%

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Change analysis explanation of the increase or decrease ratio: (The increase or decrease is more than 20%, and the amount of change reaches 10,000 thousand yuan)

1. Operating income: Mainly received The epidemic affected the income reduction during the current period. 2. Operating profit and loss and pre-tax net profit: Mainly due to the decrease in cost of throttling and control during the current period.

2. Other comprehensive gains and losses of the current period: Mainly due to the decrease in the conversion difference of the financial statements of foreign operating institutions.

3. Net profit for the current period and total comprehensive profit and loss for the current period: mainly due to the decrease in the cost of throttling and control of the current period.

4. Net profit and total comprehensive profit and loss attributable to the owners of the parent company:net109decrease inloss indue to theand the increase in total comprehensive profit and loss.

5. (2) The expected sales volume and its basis, the possible impact on the company's future financial business and the corresponding plan: The company has notannounced the 109financial forecast, so it does not intend to disclose the expected sales volume.

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3. Cash flow: analysis and explanation of cash flow changes in the most recent year, improvement plan for insufficient liquidity, and cash liquidity analysis in the coming year.

1. Liquidity analysismost recent two years.

for theAnnual project	109 year	108 year	increase (decrease) ratio
of net cash inflow from operating activities	127,929	492,877	(74)
Net%of the investment activities now 金流 out	(167,130)	(110,728)	(50.93)
Net%financing activities now 金流 out of	190,371	(308,045)	161.8%
increase or decrease in the proportion of variation analysis shows: 1. Net cash from operating activities of inflows: Mainly due to the decrease in cash inflow from operations during the current period. 2. Increase in net cash outflow from investment activities: Mainly due to the increase in the purchase of real estate, plant and equipment during the period. 3. Increase in net cash inflow from financing activities: mainly due to the increase in borrowings during the period.

1. Improvement plan for insufficient liquidity: The company has no doubts about insufficient liquidity.

(2)cashcoming year (Year 110)liquidity in theAnalysis of

Unit: NT$ thousand at the

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beginning of the period. Cash balance 800,697	is expected to come from operating activities for the whole year. Net cash flow.	Estimated annual cash inflow (out).	Estimated cash surplus (insufficient)sho rtage. 786,158	. Remedial measures for cash	. Remedial measures for cash
				Investment plan.	Financial plan
	121,774	( 14,539)		-	-
1. future year changes in cash flow situation analysis: (1) operating activities: main line is expected to increase net profit 110 year period, it is expected that annual net cash inflow from operating activities. (2) Investment activities: Mainly the investment in machinery and equipment in 110 years, resulting in net cash outflows from investment activities throughout the year. (3) Fund-raising activities: mainly due to the expected repayment of loans in 110 years, resulting in net cash outflows from fund-raising activities throughout the year. 2. Remedial measures and liquidity analysis for estimated cash shortage: None.

4. The impact of major capital expenditures in the most recent year on financial operations: The company has no major capital expenditures in the most recent year.

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5. The main reasons for the profit or loss of the reinvestment policy in the most recent year and its improvement plan and investment plan for the next year:

109.12.31 Unit: NT$ thousandTaiwan dollar

reinvestment business	() The109- year (	policy of the	profit or loss of theprofit) and lossthe main reason for	plan to improve the	the coming yearinve stment plan
Zhongde Industrial	(16,299)	mainland production and sales	decline in sales	to strengthen new customers	without
Ende United States	(14,920)	US sales	decline in sales	to strengthen new customers	without
Ende Germany	(18,702)	European production, sales and holding companies	recognize investment company losses	No	No
Ende Hong Kong	-	financial operations are	normal	No	Wu
Shengde Company	(7,952)	Holding companies	recognize investment companylosses	No	No
Yude Industrial	14,374	Plate trade	normal	No	No
totalprecisiongr id	3,302	drillsales	normal	None	None
Shanghai total grid	(32,600)	drilland marketing	decline in sales	to strengthen new customers	without
DS woomechanical	(15,325)	mainland production and sales	decline in sales	to strengthen new customers	without
Giben Holdings Co. Ltd (SAMOA)	(47,0 38)	Holding company	recognition of investment company losses	No	No
Giben Holdings Co. Ltd (BVI)	(4,869)	Holding company	recognition of investment companylosses	No	No
Giben America,	(39,6	U.S. sales	salesperformance	strengthen	No

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Inc.	40)		Decline to	the developm ent of new customers
Giben do Brasil Maquinas e Equipamentos Ltda	(184)	Production and sales in Brazil are	normal	No	No
MATEC GmbH	(37,986)	European production and sales	sales performance decline	Strengthen the developm ent of new customers	No
ASC	(37)	European sales and The service is	normal	or	not.

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6. Risk analysis and evaluation

analysis and evaluation of the following matters in the most recent year and as of the publication date of the annual report

(1) The impact of interest rate, exchange rate changes, and inflation on the company’s profit and loss and future countermeasures:

• (1) Interest rate on the company The impact of profit and loss and future countermeasures

Thethe company andits subsidiaries in theinterest income ofyear 108 and 109 was RMB 2,584 thousand and RMB 3,913 thousand respectively, mainly due to bank time deposits and demand deposits; and the interest expenses are divided into bank financing Derived from borrowings, the interest of bank borrowings in 108 and 109 were 34,469 thousand and 32,700 thousand, respectively. The interest on bank borrowings in 109 increased slightly compared with that in 108, mainly due to the increase in the average balance of bank borrowings compared with the previous year.

The company and its subsidiaries regularly evaluate bank borrowing rates and maintain close contact with banks to obtain preferential borrowing rates and reduce interest costs.

• (2) The impact of exchange rate changes on the company's profit and loss and future countermeasures

Unit: NT$ thousand

item	108year	108year	109 year	109 year
	amount	ratio	amount	ratio
conversio nloss	(profit) and(47,721 )	(1.15)%	(36,634)	(1.14)%
operating income	4,160,545	100.00%	3,210,946	100.00%

The company and its subsidiaries have appropriately increased their selling prices to maintain gross profit margins. Foreign currencies from foreign sales are used to pay for imported materials to reduce the impact of exchange rate changes. Therefore, the changes will not have a significant impact on the company and its subsidiaries.

The company and its subsidiaries have a clear foreign exchange operation strategy. The company and its subsidiaries follow the principle of balancing positions for exchange rate changes, and always pay attention to exchange rate changes related information and strict control procedures to fully grasp foreign exchange changes and reduce exchange rates. Risk positions to reduce the impact of exchange rate changes on the company’s profit.

• (3) The impact of inflation on the company’s profit and loss and future countermeasures.

The company’s product prices and purchase prices of raw materials are mainly determined by the company’s pricing strategy and market supply and demand mechanisms. Therefore, it has not been affected by inflation in the past two years. And it is expected that there is no inflation in the industry, so the inflation situation

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has not yet had a significant impact on the company's profit and loss.

• (2) Policies for engaging in high-risk, high-leverage investments, capital loans to others, endorsements and derivatives transactions, the main reasons for profit or loss, and future countermeasures:

project	policy	the main reasonsgains or losses in	forfuture countermeas ures
high-risk investment	prohibit	None	None
highly leveraged investment	prohibit	None	None
loans to other parties	according to the way	no	no
of endorsement andguarantee	way depend	no	no
derivative transactionsco mmodity	to hedgetransact ions for the principle of	market risk assessment, in order to avoid exchange rate risk for the principle of	non

(three )Future R&D plan and estimated investment R&D expenses:

R&D item	description
R&D plan	⮚ Robotic arm manufacturing application integration system development ⮚ 3D printing + five-axis processing compound machine development ⮚ automated storage system development ⮚ automated sorting system development ⮚ packaging box intelligent digital inkjet Printing machine developmentplan

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	⮚ Mask printing machine development ⮚ Ultrasonic HSK63F DC central jet spindle development
should be invested in research and development costs of	about 58,107 thousand yuan. It
is estimated that the mass production will be completed in	one year
. The main reason for the success of research and development in the future will be the main reason	⮚ for the continuous struggle of the research and development personnel. spirit. ⮚ The company’s policy support. ⮚ There is no major change in market demand.

• (4) The impact of important domestic and foreign policy and legal changes on the company’s financial business and corresponding measures:

The company and its subsidiaries are operating in compliance with the relevant current laws and regulations of domestic and foreign reinvestment countries, and relevant personnel also pay attention to the changes in laws and regulations at any time. For the management's reference, the company can immediately grasp and effectively respond to important domestic and foreign policy and legal changes.

• (5) The impact of technological changes and industrial changes on the company's financial business and corresponding measures:

The company's business strategy team led by the general manager regularly observes the latest technological progress and industrial changes every week, and evaluates the impact of the financial business , React and make strategies at the right time.

• (6) The impact of corporate image changes on corporate crisis management and corresponding measures:

The company adheres to the principles of professionalism and integrity, and attaches importance to corporate image and risk control. There is no major negative corporate image that has caused corporate crisis management.

• (7) Expected benefits, possible risks and corresponding measures of mergers and acquisitions: It is

expected to expand the company's products and market diversification development, and then enter the automotive and aerospace industries of high-precision metal processing machinery. The possible risk is that the expected benefits have not

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been achieved, and the management of the subsidiaries will be strengthened to ensure the expected benefits.

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• (8) Expected benefits, possible risks and countermeasures of plant expansion:

As of the publication date of the annual report, the company and its subsidiaries have not had any major plant expansions.

• (9) Risks faced by the concentration of purchases or sales and corresponding measures:

The company and its subsidiaries' main purchases and sales targets are currently not excessively concentrated.

• (10) Directors, supervisors or major shareholders holding more than 10% of the shares, the

impact, risks and countermeasures of's massive transfer or replacement of shares:

the companythe company's 108, 109 and 110 years as of the publication date of the annual report , Directors and major shareholders have not transferred a large amount of equity.

• (11) The impact, risks and countermeasures of the change of operating rights on the

company: No such situation.

(12) Litigation and non-litigation events

1. Litigation, non-litigation or administrative litigation events that the company has determined in the last two years and as of the publication date of the annual report or are still in the department, the results of which may affect the interests of shareholders or securities If the price has a significant influence, the facts in dispute, the amount of the subject matter, the date of the commencement of the litigation, the main parties involved in the litigation and the current handling situation shall be disclosed: there is no such situation.

2. The company’s directors, supervisors, managers, major shareholders and affiliated companies with a shareholding ratio of more than 10%, have been judged in the last two years and as of the publication date of the annual report, or are currently in litigation and non-litigation. Or administrative disputes, the results of which may have a significant impact on shareholders' equity or securities prices: no such situation.

3. The company’s directors, supervisors, general managers, and major shareholders holding more than 10% of the company’s shareholdings, the circumstances specified in Article 157 of the Securities and Exchange Act have occurred in the last two years and up to the date of publication of the annual report and the company’s current situation: none.

(13) Other important risks and corresponding measures: None.

7. Other important matters: None.

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Eight,Specially recorded matters

1. Related information of related companies (1), Business report of

related companies 1. Organization chart of related companies (March 31, 2010)

==> picture [483 x 179] intentionally omitted <==

2. Basic information of

related companies The name of the related company was	established, and the	address was	actually received The amount of capital is	mainly business or production projects.
Anderson Industrial (Hong Kong) Ltd.	82.5.5	2nd Floor, Caltex House 258, Henessy Road Hong Kong	HK$ 300,000	. Trading of confidential machinery and peripheral products.
Anderson Europe GmbH	82.10 .5	Am Oberen Feld 5 32758 Detmold Germany	EUR 2,525,000	Manufacture and sale of confidential machinery and peripheral products
Anderson America Corporation	83.10.1	10710 Southern Loop Blvd. Charlotte, NC 28134 USA	USD 500,000	Sales of confidential machinery and peripheral products
Zhongde Industrial Shanghai Co., Ltd.,	86.3.20Fang ta	No. 648,North Road, Songjiang DistrictShanghai.	US$ 8,000,000	. Manufacturing and trading of confidential machinery and peripheral products.
Youde Machinery (Shanghai) Co., Ltd.,	86.9.21	Dongjing Road, Industrial Zone,	US$ 2,425,000	Manufacturing and trading of

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		Songjiang DistrictShanghai 328		confidential machinery and peripheral products
Shengde Co., Ltd.	95.11.16	6th Floor, No. 88, Section 6, Zhongshan North Road, Shilin District, Taipei City,	NT 220,000,000	Import and Export Trade
Yude Industrial Co., Ltd.	102.5 .31	5th Floor, No. 88, Section 6, Zhongshan North Road, Shilin District, Taipei City	NT 50,000,000.	. Wholesale and retail of plates
General Precision Machinery (Shanghai) Co., Ltd.,	105.1.1	No. 648North Road, Songjiang DistrictShanghai,	FangtaRMB 5,192,000	Electronic Machinery and the manufacture and sale of peripheral products of the
total grid precision Co., Ltd.	79.10.2	grass Nan wuqi district in Taichung export processing zone by Hong Kong Road No. 33	NT $ 180,000,000 yuan	electronics manufacturing machinery and peripheral products and the sale of
Giben Holdings Co.		Ltd (SAMOA) 103.4.16 Chambers, PO	of $ 10,000	general investment
	Giben Holdings Co. Ltd (BVI) 103.4.15		US $ 10,000	general Investment in
Giben America, Inc	81 .4.1	3715 Northside Parkway, suit 350 100 Northcreek ATLANTA GA 30327	US$487,862 for	the sale of confidential machinery and peripheral products
Giben do Brasil Maquinas e Equipamentos Ltda	62.10.11	RUA PAUL GARFUNKEL, 135 CIDADE INDUSTRIAL CEP 81460-040 CURITIBA PR	Brazilian currency 9,525, 516 yuan	secret manufacturing machinery and peripheral products and the sale of
		MATEC GmbH 106.3.1 Wilhelm- Maier-Straße	euro 25,000	metal working machines and metal parts processing
		Anderson Service GmbH 109.5.3 Am	euro 25,000 Yuan	Machinery’s sales and service

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Oberen Feld 5 report day foreign currency exchange rate: RMB 4.377, Euro 35.02, USD 28.48, Brazilian currency 5.4091Persons 3.with control and affiliation presumed in accordance with the Company Law: None. 4. The overall relationship of business covered by the industry and various affiliates of the business operations of mutualrelated

industry do	relationsbusiness name	and other affiliates of the business association
Machinery Manufactu ring	EndeTechnology Co., Ltd. (Ende Technology)	precision machinery, electronics and machinery Manufacturing and trading of peripheral products, trading of plates and others.
	Zhongde Industrial Shanghai Co., Ltd. (Zhongde Industrial)	manufacturing and trading of precision machinery and electronic mechanical equipment.
	Youde Machinery (Shanghai) Co., Ltd.	manufactures and sells precision machinery.
	Zongge Precision Co., Ltd.	produces and sells electronic machinery.
	Ende Germany	manufactures and sells precision machinery and metal processing machines for Ende Technology, and purchases machinery and components for Ende Technology.
	Anderson Service GmbH	machinery maintenance and other related services
	MATEC GmbH	metal processing machines and metal parts processing
	Giben do Brasil Maquinas e Equipamentos Ltda	precision machinery manufacturing and trading.
Internatio nal Trade Industry	Ende Hong Kong Company	sells precision machinery and electronic machinery for Ende Technology.
	Yude Industrial Co., Ltd.	plate wholesale and retail,
	Ende America,	sells precision machinery for Ende Technology.
	Giben America, Inc	sells precision machinery for Ende Technology and Giben do Brasil Maquinas e Equipamentos Ltda.
	Zongge Precision Machinery (Shanghai) Co., Ltd.	sells electronic machinery for Zongge Company,
general investmen t industry,	Shengde Company	is the transfer investment business of Ende Technology.
	Giben Holdings Co. Ltd (SAMOA)	is a reinvestment business of Ende Technology.
	Giben Holdings Co. Ltd (BVI)	is a reinvestment business of Ende Technology.

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5. Each corporate relations director, supervisor, general manager of data

			base date: 110years March 31	base date: 110years March 31
business name	title	name orrepresentative of	sharesheld
			the number of (thousands)%	stake
	Ende, Chairman	Yun Yong-investment limited Company (legal representative: Liao Wenjia)Yunyong	20,000	10.03%
	Director	Investment Co., Ltd. (legal representative: Huang Yixian)Yunyong	20,000	10.03%
	Director	Investment Co., Ltd. (legal representative: Xu Yonghao)Yunyong	20,000	10.03%
	Director	Investment Co., Ltd. (legal representative : Lin Qiquan)	20,000	10.03%
	independent Director	Wu Qingsong	-	-
	independent Director	Laijun Liang	-	-
	independent Director	Liang Yihong	-	-
	General Manager	Huang Yixian	316	0.16%
Endeof Hong Kong companies	Director	Linqi Quan (Note 1)	300	100.00%
	director	HaitianSheng (Note 1)	300	100.00%
Ende Germany	Director	Huang Yixian (Note 1) of	Co., Ltd. organization, not applicable	100.00%
	Director and general manager	Alfred. Koenemann (Note 1)Lin Qiquan	Co., Ltd. organization, not applicable	100.00%
Ende U.S.	Director	(Note 1)	1	100.00%
	General manager	David Steranko	0	0.00%
Zhongde	Chairman	(Note 1)	Co., Ltd. organization, not	100.00%

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Industrial (Shanghai)Lin Qiquan Co., Ltd.			applicable
	Director	Wu Hongming (Note 1)	Co., Ltd. organization, not applicable	100.00%
	Director	Huang Yixian (Note 1)	Co., Ltd. organization, NA	100.00%
	general manager	Wu Hongming (Note 1)	Limited organization, NA	100.00%
	supervisors	up toZhu (Note 1)	Limited organization, NA	100.00%
Youde Machinery (Shanghai) Ltd.	Co.,chairman	Lin Qiquan (Note 1)	Limited company organization, not applicable	100.00%
	director	Wu Hongming (Note 1)	limited company organization, not applicable	100.00%
	director	Huang Yixian (Note 1)	limited company organization, not applicablecompany organization, not applicable	100.00%
	general manager	Wu Hongming (Note 1)	limitedApplicable	100.00%
	Supervisor	Zhu Yongda (Note 1)	Co., Ltd. organization, not applicable	100.00%
Shengde Co., Ltd.	Chairman	Liao Wenjia (Note 1)	22,000	100.00%
	Director	Wu	22,000	100.00%
	Director	Xiubi (Note 1)Huang Yixian (Note 1)	22,000	100.00%
	supervisors	up toZhu (Note 1)	22,000	100.00%
sterility of the German Industry	(shares),chairma n	Liaowen Jia (Note 1)	5,000	100.00%
	director	BiSophie (Note 1)	5,000	100.00%
	Director	Lin Qiquan (Note 1)	5,000	100.00%
	supervisors	Huang Yixian (Note 1)	5,000	100.00%
of the total grid precision Company Limited (Note 3)	chairman	Liaowen Jia (Note 2)	11,796	58.11%
	Director	Huang Yixian (Note 2)	11,796	58.11%
	directors and the General Manager	Hou Jianfu (Note 2)	11 ,7 96	58.11%
	Director	Deng Chuanxin	0	0.00%

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	Independent Director	Liu Fuyun	0	0.00%
	Independent Director	Lai Wenxiang	0	0.00%
	Independent Director	Lin Shaoyuan	0	0.00%
Zongge Precision Machinery (Shanghai) Co., Ltd.	Director	Hou Jianfu (Note 6)	Co., Ltd. organization, not applicable	100Qiquan%
	Director	Lin (Note 6)	Limited tissue,NA	100%
	director	Lincheng Wei(Note 6)	Limited organizationNA	100%
	supervisor	Huangyi Xian(Note 6)	Limited tissue, NA	Giben
100%do Brasil Maquinas e Equipamentos Ltda	General Manager of	Andre Huang	Organized byCo., Ltd.,, not applicable	100% of
Anderson Service GmbH	Director	Huang Yixian (Note 5)	Co., Ltd. organization, not applicable	100% of
MATEC GmbH	Director	Thomas Kuhn (Note 5)	Co., Ltd. organization, not applicable	100%
	Director	Huang Yixian ( Note 5) For	limited company organizations,not applicable	100% is.

(Note 1) The representative of Ende Technology.

(Note 2) is the representative of Shengde Company.

(Note 3) Zongge Industrial Co., Ltd. changed its name to Zongge Precision Co., Ltd. after the completion of the change registration on January 9, 2014.

(Note 4) is the representative of Giben Holdings Co. Ltd (SAMOA).

(Note 5) It is the representative of Ende German company.

(Note 6) The representative of Zongge Precision Co., Ltd.

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6. Operating overview of each affiliated company

Unit: NT$ Thousand/December 31, 109

Enterprise Name	Capital	Total Assets Total	Liabilities	Net Value	Operatin g IncomeIn come	Operating	Profit and Loss for the	Earnings per(Yuan)
Ende Hong Kong Company	1,014	31,975	90	31,885	0	0	0	NA
German company Nordex	98,543	420,520	125,186	295,334	114,357	(18,670)	(18,702)	NA
Nordex USA	14,937	322,554	288,631	33,924	343,034	(16,478)	(14,920)	NA
Zhongde Shanghai Industrial Co.,Ltd.	263,27 9	429,162	177,661	251,501	83,872	(25,467)	(16,299)	NA
Shanghai Headquarte rs	26,849	662,869	724,444	(61,575)	396,679	(27,804)	(32,600)	NA
Shengde Co., Ltd.Co., Ltd.	220,00 0	262,852	388	262,464	1,722	(4,985)	(7,952)	(0.04)
Youde Machinery (Shanghai) company	94,571	51,446	14,458	36,988	58	(22,030)	(15,325)	NA
Yuk Tak Industrial Co.,Ltd.	50,000	401,055	235,617	165,438	585,586	17,459	14,374	0.29
total grid precision Co.,Ltd.	204,00 0	1,039,598	464,181	575,417	581,349	28,499	3,302	0.02
Giben Holdings Co. Ltd (SAMOA)	146,81 3	94,628	12,152	82,476	15,863	(2,943)	(47,038)	NA
Giben Holdings Co. Ltd (BVI)	422,07 7	205,118	0	205,118	0	(4,685)	(4,869)	NA
Giben America, Inc	15,425	156,801	172,056	(15,255)	85,846	(46,862)	(39,640)	NA
Giben do Brasil Maquinas e Equipamen tos Ltda	118,48 5	167,606	119,865	47,741	170,000	21,473	(184)	NA

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MATEC GmbH	816	344,254	171,233	173,021	662,660	(52,605)	(37,986)	NA
Anderson Service GmbH	808	837	0	837	0	(29)	(37)	NA

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(ii) affiliates consolidated

DECLARATION OF CONSOLIDATION OF FINANCIAL STATEMENTS OF AFFILIATES

The entities that are required to be included in the consolidated financial statements of Anderson Industrial Corporation as of and for the year ended December 31, 2020 under the “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises” are the same as those included in the consolidated financial statements prepared in conformity with the International Financial Reporting Standards No. 10 “Consolidated Financial Statements”. In addition, the information required to be disclosed in the consolidated financial statements is included in the consolidated financial statements. Consequently, Anderson Industrial Corporation and subsidiaries do not prepare a separate set of consolidated financial statements.

Very truly yours,

ANDERSON INDUSTRIAL CORPORATION

By

WEN JIA LIAO Chairman

March 9, 2021

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• (3) Relationship Report: None.

2. In the most recent year and as of the publication date of the annual report, the status of privately placed securities: None.

3. In the most recent year and as of the publication date of the annual report, the status of the subsidiary

• holding or disposing of the company’s stock: none

4. Other necessary supplementary explanations: none.

Nine, matters that have a significant impact on shareholders' equity

or securities prices, in the

most recent year and as of the date of publication of the annual report, events that have a significant impact on shareholders' equity or securities prices as specified in Article 36, Paragraph 3, Subparagraph 2, of the Securities Exchange Act: no.

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