AVC — Interim / Quarterly Report 2021

Dec 14, 2021

ASIA VITAL COMPONENTS CO. , LTD

AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

WITH REPORT OF INDEPENDENT ACCOUNTANTS FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2021 AND 2020

Address: No.248-27, Xinsheng Rd., Qianzhen Dist., Kaohsiung City 806, Taiwan (R.O.C.) Telephone: 886-7-815-7612

The reader is advised that these consolidated financial statements have been prepared originally in Chinese. In the event of a conflict between these financial statements and the original Chinese version or difference in interpretation between the two versions, the Chinese financial statements shall prevail.

As of June 30, 2021, December 31, 2020 and June 30, 2020 (June 30, 2021 and 2020 are unaudited) (Expressed in thousands of New Taiwan Dollars) English translation of Consolidated Financial Statements Originally issued in Chinese ASIA VITAL COMPONENTS CO., LTD UNAUDITED CONSOLIDATED BALANCE SHEETS

		June 30, 2021		December 31, 2020		June 30, 2020
Assets	Notes	Amount	%	Amount	%	Amount	%
Current assets
Cash and cash equivalents	6(1)	\$12,663,251	29	\$11,108,016	27	\$9,715,938	26
Financial assets at fair value through profit or loss, current	6(2)	58,184	0	-	-	50,276	0
Financial assets measured at amortized costs, current	6(3), 8	617,658	1	578,286	2	367,227	1
Notes receivable, net	4, 6(4)	389,926	1	549,666	1	447,735	1
Accounts receivable, net	4, 6(5)	3,695,674	9	3,691,461	9	5,222,712	14
Other receivables	6(5).(6)	460,562	1	458,422	1	474,843	1
Other receivables-related parties	6(6)	4,840	0	15,812	0	-	-
Inventories, net	6(7)	12,236,637	28	11,535,314	29	9,294,148	25
Prepayments		677,013	2	313,113	1	220,754	1
Other current assets		802,984	2	889,814	2	768,998	2
Total current assets		31,606,729	73	29,139,904	72	26,562,631	71
Non-current assets
Financial assets measured at fair value through other comprehensive income, noncurrent	4, 6(8)	94,190	0	101,449	0	93,247	0
Investments accounted for under the equity method	6(9)	214,726	1	216,069	1	282,388	1
Property, plant and equipment	4, 6(10), 8	7,584,786	18	7,773,383	19	6,681,664	18
Right-of-use assets	4, 6(23), 8	1,896,218	4	1,733,023	4	1,704,542	5
Investment property	4, 6(11), 8	103,779	0	122,467	0	121,876	0
Intangible assets	6(12)	154,574	0	149,594	0	146,789	0
Deferred tax assets	4, 6(27)	860,879	2	827,675	2	856,288	2
Other non-current assets	6(13), 8	787,583	2	612,672	2	960,252	3
Total non-current assets		11,696,735	27	11,536,332	28	10,847,046	29
Total assets		\$43,303,464	100	\$40,676,236	100	\$37,409,677	100

As of June 30, 2021, December 31, 2020 and June 30, 2020 (June 30, 2021 and 2020 are unaudited) (Expressed in thousands of New Taiwan Dollars) English translation of Consolidated Financial Statements Originally issued in Chinese ASIA VITAL COMPONENTS CO., LTD UNAUDITED CONSOLIDATED BALANCE SHEETS

		June 30, 2021		December 31, 2020		June 30, 2020
Liabilities and Equity	Notes	Amount	%	Amount	%	Amount	%
Current liabilities
Short-term loans	6(14)	\$3,606,559	8	\$2,452,594	6	\$2,962,231	8
Short-term notes payable	6(15)	-	-	-	-	200,000	0
Contract liabilities, current	6(22)	4,895	0	80,298	0	108	0
Notes payable		2,499,766	6	2,463,026	6	2,216,186	6
Accounts payable		11,362,949	26	11,313,507	28	10,417,157	28
Other payables	6(16)	3,841,265	9	2,914,738	7	2,785,835	7
Current tax liabilities	4, 6(27)	526,258	1	493,153	1	373,346	1
Lease liabilities, current	4, 6(23)	178,492	0	170,345	1	151,158	0
Other current liabilities		301,778	1	267,920	1	279,653	1
Current portion of long-term loans	6(18)	786,501	2	1,309,287	3	2,468,334	7
Total current liabilities		23,108,463	53	21,464,868	53	21,854,008	58
Non-current liabilities
Corporate bonds payable		2,400,000	6	2,400,000	6	-	-
Long-term loans	6(17)	2,221,337	5	2,475,331	6	3,129,999	8
Deferred tax liabilities	6(18)	1,359,197	3	1,228,920	3	1,070,542	3
Lease liabilities, noncurrent	4, 6(27)	1,240,884	3	1,048,455	2	1,033,386	3
Long-term deferred revenue	4, 6(23)	730,596	2	755,714	2	736,410	2
Net defined benefit liabilities, noncurrent	6(19) 4, 6(20)	5,232	0	5,233	0	7,383	0
Guarantee deposits		9,414	0	9,377	0	7,827	0
Total non-current liabilities		7,966,660	19	7,923,030	19	5,985,547	16
Total liabilities		31,075,123	72	29,387,898	72	27,839,555	74
Equity attributable to the parent company
Capital	6(21)
Common stock		3,533,101	8	3,533,101	9	3,533,101	9
Additional paid-in capital	6(21)	1,260,103	3	1,601,099	4	1,540,817	4
Retained earnings	6(21)
Legal reserve		865,492	2	865,492	2	865,492	2
Special reserve		1,402,573	3	1,402,573	3	1,402,573	4
Unappropriated earnings		5,222,189	12	4,500,820	11	3,344,369	9
Total retained earnings		7,490,254	17	6,768,885	16	5,612,434	15
Other components of equity		(1,540,830)	(3)	(1,326,487)	(3)	(1,692,159)	(4)
Total equity attributable to the parent company		10,742,628	25	10,576,598	26	8,994,193	24
Non-controlling interests	6(21)	1,485,713	3	711,740	2	575,929	2
Total equity		12,228,341	28	11,288,338	28	9,570,122	26
Total liabilities and equity		\$43,303,464	100	\$40,676,236	100	\$37,409,677	100

(June 30, 2021 and 2020 are unaudited) English translation of Consolidated Financial Statements originally issued in Chinese ASIA VITAL COMPONENTS CO., LTD UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME As of June 30, 2021, December 31, 2020 and June 30, 2020 (Expressed in thousands of New Taiwan Dollars, except for earnings par share)

		For the three-month period ended June For the three-month period ended 30, 2021 June 30, 2020		For the six-month period ended June 30, 2021		For the six-month period ended June 30, 2020
Items	Notes	Amount	%	Amount	%	Amount	%	Amount	%
Operating revenues	4, 6(22)	\$12,748,781	100	\$11,604,824	100	\$23,347,577	100	\$19,091,375	100
Operating costs	6(23).(24)	(10,438,933)	(82)	(9,942,463)	(86)	(19,370,538)	(83)	(16,539,879)	(87)
Gross profit		2,309,848	18	1,662,361	14	3,977,039	17	2,551,496	13
Operating expenses	6(23).(24)
Sales and marketing expenses		(161,060)	(1)	(133,961)	(1)	(313,540)	(1)	(267,343)	(1)
General and administrative expenses		(141,314)	(1)	(111,029)	(1)	(263,317)	(1)	(208,409)	(1)
Research and development expenses		(644,568)	(5)	(465,429)	(4)	(1,194,515)	(5)	(865,551)	(5)
Expected credit impairment (losses) gains		(5,743)	(0)	(13,438)	(0)	7,445	0	36,015	0
Subtotal		(952,685)	(7)	(723,857)	(6)	(1,763,927)	(7)	(1,305,288)	(7)
Operating income		1,357,163	11	938,504	8	2,213,112	10	1,246,208	6
Non-operating income and expenses
Interest income	6(25)	7,177	0	12,184	0	12,634	0	20,296	0
Other income	6(25)	159,929	1	91,811	0	249,720	1	149,836	1
Other gains and losses	6(25)	(134,745)	(1)	(142,221)	(1)	(153,588)	(1)	(128,535)	(1)
Finance costs	6(25)	(36,902)	(0)	(48,066)	(0)	(71,243)	(0)	(110,009)	(0)
Share of profit or loss of associates	4, 6(9)	3,104	0	13,693	0	920	0	12,921	0
Subtotal		(1,437)	(0)	(72,599)	(1)	38,443	0	(55,491)	(0)
Income from continuing operations before income tax		1,355,726	11	865,905	7	2,251,555	10	1,190,717	6
Income tax expense	6(27)	(403,567)	(4)	(245,673)	(2)	(665,140)	(3)	(369,859)	(2)
Net income		952,159	7	620,232	5	1,586,415	7	820,858	4
Other comprehensive income (loss)	6(26)
Items that will not be reclassified subsequently to profit or loss:
Unrealized gains (losses) from equity instruments investments measured at fair value through other comprehensive income		13,559	0	6,123	0	19,690	0	3,167	0
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations		(145,363)	(0)	(222,622)	(1)	(252,166)	(1)	(330,526)	(1)
Share of other comprehensive income (loss) of associates		1,334	0	461	0	918	0	(3,140)	(0)
Income tax related to items that may be reclassified subsequently		16,582	0	28,694	0	29,257	0	41,706	0
Total other comprehensive loss, net of tax		(113,888)	(0)	(187,344)	(1)	(202,301)	(1)	(288,793)	(1)
Total comprehensive income		\$838,271	7	\$432,888	4	\$1,384,114	6	\$532,065	3
Net income attributable to:		\$794,972	6	\$567,327	5	\$1,335,860	6	\$761,600	4
Stockholders of the parent Non-controlling interests		157,187	1	52,905	0	250,555	1	59,258	0
		\$952,159	7	\$620,232	5	\$1,586,415	7	\$820,858	4
Comprehensive income (loss) attributable to:
Stockholders of the parent		\$686,316	6	\$382,849	4	\$1,142,984	5	\$477,511	3
Non-controlling interests		151,955	1	50,039	0	241,130	1	54,554	0
		\$838,271	7	\$432,888	4	\$1,384,114	6	\$532,065	3
Earnings per share (NTD)	4, 6(28)
Earnings per share-basic		\$2.25		\$1.61		\$3.78		\$2.16
Earnings per share-diluted		\$2.24		\$1.60		\$3.77		\$2.15

English translation of Consolidated Financial Statements originally issued in Chinese ASIA VITAL COMPONENTS CO. , LTD UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY For the six-month periods ended June 30, 2021 and 2020 (Expressed in thousands of New Taiwan Dollars)

		Equity Attributable to the Parent Company
	Capital			Retained Earnings			Other Components of Equity
Items	Common Stock	Additional Paid in Capital	Legal Reserve	Special Reserve	Unappropriated Earnings	Exchange Differences on Translation of Foreign Operations	Unrealized Gains (Losses) From Equity Instruments Investments Measured At Fair Value Through Other Comprehensive	Total	Non-Controlling Interests	Total Equity
Balance as of January 1, 2020	\$3,533,101	\$1,540,817	\$769,695	\$995,284	\$3,539,661	(\$1,063,568)	(\$339,005)	\$8,975,985	\$357,925	\$9,333,910
Appropriation and distribution of 2019 retained earnings
Legal reserve			95,797		(95,797)			-		-
Special reserve				407,289	(407,289)			-		-
Cash dividends					(459,303)			(459,303)		(459,303)
Income for the six-month period ended June 30, 2020					761,600			761,600	59,258	820,858
Other comprehensive income (loss) for the six-month period ended June 30, 2020						(287,256)	3,167	(284,089)	(4,704)	(288,793)
Total comprehensive income (loss)	-	-	-	-	761,600	(287,256)	3,167	477,511	54,554	532,065
Increase in non-controlling interests								-	163,450	163,450
Disposal of equity investments at fair value through other comprehensive income Balance as of June 30, 2020	\$3,533,101	\$1,540,817	\$865,492	\$1,402,573	5,497 \$3,344,369	(\$1,350,824)	(5,497) (\$341,335)	- \$8,994,193	\$575,929	- \$9,570,122
Balance as of January 1, 2021	\$3,533,101	\$1,601,099	\$865,492	\$1,402,573	\$4,500,820	(\$997,070)	(\$329,417)	\$10,576,598	\$711,740	\$11,288,338
Appropriation and distribution of 2020 retained earnings
Cash dividends					(635,958)			(635,958)		(635,958)
Cash dividends from capital surplus		(353,310)						(353,310)		(353,310)
Income for the six-month period ended June 30, 2021					1,335,860			1,335,860	250,555	1,586,415
Other comprehensive income (loss) for the six-month period ended June 30, 2021						(212,566)	19,690	(192,876)	(9,425)	(202,301)
Total comprehensive income (loss)	-	-	-	-	1,335,860	(212,566)	19,690	1,142,984	241,130	1,384,114
Increase in non-controlling interests								-	545,157	545,157
The differences between the fair value of the consideration paid or received from		12,314						12,314	(12,314)	-
acquiring or disposing subsidiaries and the carrying amounts of the subsidiaries
Disposal of equity investments at fair value through other comprehensive income					21,467		(21,467)	-		-
Balance as of June 30, 2021	\$3,533,101	\$1,260,103	\$865,492	\$1,402,573	\$5,222,189	(\$1,209,636)	(\$331,194)	\$10,742,628	\$1,485,713	\$12,228,341

English translation of Consolidated Financial Statements originally issued in Chinese ASIA VITAL COMPONENTS CO., LTD UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS For the six-month periods ended June 30, 2021 and 2020 (Expressed in thousands of New Taiwan Dollars)

Items	For the six-month period ended June 30, 2021	For the six-month period ended June 30, 2020
Cash flows from operating activities:
Net income before tax	\$2,251,555	\$1,190,717
Adjustments to reconcile net income before tax to net cash provided by operating activities:
Income and expanse adjustments :
Depreciation	742,425	565,558
Amortization	30,412	21,017
Amortization of royalty	438	1,979
Expected credit losses (profit)	(7,445)	(36,015)
Interest expense	71,243	110,009
Interest income Compensation costs of share-based payment transaction	(12,634) 4,053	(20,296) 9,450
Share of profit of associates	(920)	(12,921)
Loss on disposal of property, plant and equipment	84,563	13,851
(Gain) on disposal of investments	(548)	(247)
Impairment loss on non-financial assets	25,363	139,467
Others	220,406	213,824
Changes in operating assets and liabilities:
Notes receivable	160,799	103,541
Accounts receivable	(82,294)	1,722,292
Other receivables	84,597	9,995
Other receivables-related parties	10,972	24,067
Inventories Prepayments	(918,730) (363,900)	(1,362,445) 213,869
Other current assets	86,830	(31,135)
Other operation assets	(39,372)	(17,887)
Contract liabilities	(75,403)	(15,995)
Notes payable	36,740	117,552
Accounts payable	49,442	(341,345)
Other payables	(84,354)	(334,838)
Other current liabilities	33,858	62,290
Net defined benefit liabilities	(1)	1
Cash generated from operations	2,308,095	2,346,355
Interest received	11,413	20,296
Interest paid	(65,048)	(114,551)
Income tax paid Net cash provided by operating activities	(501,646) 1,752,814	(398,138) 1,853,962
Cash flows from investing activities:
Proceeds from disposal of financial assets measured at fair value through other comprehensive income	26,187	18,197
Acquisition of financial assets at fair value through profit or loss	(135,205)	(106,979)
Proceeds from disposal of financial assets at fair value through profit or loss	76,550	55,653
(Increase) in advance payments in investment	-	(19,723)
Acquisition of property, plant and equipment	(676,380)	(743,701)
Proceeds from disposal of property, plant and equipment	12,614	38,572
Decrease (Increase) in refundable deposits	1,580	(2,184)
Acquisition of intangible assets	(36,796)	(30,194)
Proceeds from disposal of intangible assets	(106,125)	(256,001)
(Increase) in other noncurrent assets-others	(71,008)	-
Dividends received	-	3,819
Net cash (used) in investing activities	(908,583)	(1,042,541)
Cash flows from financing activities:
Increase in short-term loans (Decrease) in short-term loans	5,835,379 (4,675,613)	8,217,856 (7,220,440)
Increase in short-term notes payable	-	100,000
Proceeds from long-term loans	720,000	4,720,000
Repayments of long-term loans	(1,496,780)	(5,032,500)
Increase (decrease) in guarantee deposits	37	(11,184)
Repayment of lease liabilites	(100,973)	(106,218)
Change in non-controlling interests	556,520	154,000
Net cash provided in financing activities	838,570	821,514
Effect of exchange rate changes on cash and cash equivalents	(127,566)	(71,553)
Net increase in cash and cash equivalents	1,555,235	1,561,382
Cash and cash equivalents at beginning of year	11,108,016	8,154,556
Cash and cash equivalents at end of year	\$12,663,251	\$9,715,938

English Translation of Financial Statements Originally Issued in Chinese ASIA VITAL COMPONENTS CO., LTD AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2021 AND 2020 (Unless otherwise stated, all amounts expressed are in thousands of New Taiwan Dollars)

1. History and organization

ASIA VITAL COMPONENTS CO., LTD. (the Company) was incorporated on December 17, 1991. The Company's registered address is No.248-27, Xinsheng Rd., Qianzhen Dist., Kaohsiung City. The principal activities of the Company are to manufacture, process, assemble and to import and export electronic parts, electronic materials, communication electronic machinery products, automobile parts, lighting device, computer peripherals.

The Company's ordinary shares were publicly listed on the Taiwan Stock Exchange (TWSE) on 27 September, 2002.

1. Date and procedures of authorization of financial statements for issue

The consolidated financial statements of the Company and its subsidiaries ("the Group") for the six-month periods ended June 30, 2021 and 2020 were authorized for issue by the Board of Directors on Aug 6, 2021.

3. NEWLY ISSUED OR REVISED STANDARDS AND INTERPRETATIONS

(1) Changes in accounting policies resulting from applying for the first time certain standards and amendments.

The Group adopted International Financial Reporting Standards, International Accounting Standards, and Interpretations issued, revised or amended which are recognized by Financial Supervisory Commission ("FSC") and become effective for annual periods beginning on or after January 1, 2021. The adoption of these new standards and amendments had no material impact on the Group.

(2) Standards or interpretations issued, revised or amended, by International Accounting Standards Board ("IASB") which are endorsed by FSC, but not yet adopted by the Group as at the end of the reporting period are listed below.

Items	New, Revised or Amended Standards and Interpretations	Effective Date issued by IASB
a	Narrow-scope amendments of IFRS, including Amendments to	January 1, 2022
	IFRS 3, Amendments to IAS 16, Amendments to IAS 37 and the
	Annual Improvements

A. Narrow-scope amendments of IFRS, including Amendments to IFRS 3, Amendments to IAS 16, Amendments to IAS 37 and the Annual Improvements

i. Updating a Reference to the Conceptual Framework (Amendments to IFRS 3)

The amendments updated IFRS 3 by replacing a reference to an old version of the Conceptual Framework for Financial Reporting with a reference to the latest version, which was issued in March 2018. The amendments also added an exception to the recognition principle of IFRS 3 to avoid the issue of potential "day 2" gains or losses arising for liabilities and contingent liabilities. Besides, the amendments clarify existing guidance in IFRS 3 for contingent assets that would not be affected by replacing the reference to the Conceptual Framework.

• ii. Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16) The amendments prohibit a company from deducting from the cost of property, plant and equipment amounts received from selling items produced while the company is preparing the asset for its intended use. Instead, a company will recognise such sales proceeds and related cost in profit or loss.
• iii. Onerous Contracts Cost of Fulfilling a Contract (Amendments to IAS 37) The amendments clarify what costs a company should include as the cost of fulfilling a contract when assessing whether a contract is onerous.
• iv. Annual Improvements to IFRS Standards 2018 2020

Amendment to IFRS 1

The amendment simplifies the application of IFRS 1 by a subsidiary that becomes a first-time adopter after its parent in relation to the measurement of cumulative translation differences.

Amendment to IFRS 9 Financial Instruments

The amendment clarifies the fees a company includes when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability.

Amendment to Illustrative Examples Accompanying IFRS 16 Leases

The amendment to Illustrative Example 13 accompanying IFRS 16 modifies the treatment of lease incentives relating to lessee's leasehold improvements.

Amendment to IAS41

The amendment removes a requirement to exclude cash flows from taxation when measuring fair value thereby aligning the fair value measurement requirements in IAS 41 with those in other IFRS Standards.

The abovementioned amendments which are applicable for annual periods beginning on or after 1 January 2022 have no material impact on the Group.

(3) Standards or interpretations issued, revised or amended, by International Accounting Standards Board ("IASB") which are not endorsed by FSC, but not yet adopted by the Group as at the end of the reporting period are listed below.

		Effective Date
Items	New, Revised or Amended Standards and Interpretations	issued by IASB
a	IFRS 10 "Consolidated Financial Statements" and IAS 28	To be determined
	"Investments in Associates and Joint Ventures" — Sale or	by IASB
	Contribution of Assets between an Investor and its
	Associate or Joint Ventures
b	IFRS 17 "Insurance Contracts"	January 1, 2023
c	Classification of Liabilities as Current or Non-current –	January 1, 2023
	Amendments to IAS 1
d	Disclosure Intitative-Accounting Policies-Amendments	January 1, 2023
	to IAS 1
e	Definition of Accounting Estimates-Amendments to IAS 8	January 1, 2023
f	Deferred Tax related to Assets and Liabilities arising from a	January 1, 2023
	Single Transaction-Amendments to IAS 12

A.IFRS 10"Consolidated Financial Statements" and IAS 28"Investments in Associates and Joint Ventures" — Sale or Contribution of Assets between an Investor and its Associate or Joint Ventures

The amendments address the inconsistency between the requirements in IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures, in dealing with the loss of control of a subsidiary that is contributed to an associate or a joint venture. IAS 28 restricts gains and losses arising from contributions of non-monetary assets to an associate or a joint venture to the extent of the interest attributable to the other equity holders in the associate or joint ventures. IFRS 10 requires full profit or loss recognition on the loss of control of the subsidiary. IAS 28 was amended so that the gain or loss resulting from the sale or contribution of assets that constitute a business as defined in IFRS 3 between an investor and its associate or joint venture is recognized in full.

IFRS 10 was also amended so that the gains or loss resulting from the sale or contribution of a subsidiary that does not constitute a business as defined in IFRS 3 between an investor and its associate or joint venture is recognized only to the extent of the unrelated investors' interests in the associate or joint venture.

B. IFRS 17 "Insurance Contracts"

IFRS 17 provides a comprehensive model for insurance contracts, covering all relevant accounting aspects (including recognition, measurement, presentation and disclosure requirements). The core of IFRS 17 is the General (building block) Model, under this model, on initial recognition, an entity shall measure a group of insurance contracts at the total of the fulfilment cash flows and the contractual service margin. The carrying amount of a group of insurance contracts at the end of each reporting period shall be the sum of the liability for remaining coverage and the liability for incurred claims.

Other than the General Model, the standard also provides a specific adaptation for contracts with direct participation features (the Variable Fee Approach) and a simplified approach (Premium Allocation Approach) mainly for short-duration contracts.

IFRS 17 was issued in May 2017 and it was amended in June 2020. The amendments include deferral of the date of initial application of IFRS 17 by two years to annual beginning on or after 1 January 2023 (from the original effective date of 1 January 2021); provide additional transition reliefs; simplify some requirements to reduce the costs of applying IFRS 17 and revise some requirements to make the results easier to explain. IFRS 17 replaces an interim Standard – IFRS 4 Insurance Contracts – from annual reporting periods beginning on or after 1 January 2023.

C. Classification of Liabilities as Current or Non-current – Amendments to IAS 1

These are the amendments to paragraphs 69-76 of IAS 1 Presentation of Financial statements and the amended paragraphs related to the classification of liabilities as current or non-current.

D.Disclosure Initiative - Accounting Policies – Amendments to IAS 1

The amendments improve accounting policy disclosures that to provide more useful information to investors and other primary users of the financial statements.

E. Definition of Accounting Estimates – Amendments to IAS 8

The amendments introduce the definition of accounting estimates and included other amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors to help companies distinguish changes in accounting estimates from changes in accounting policies.

F. Deferred Tax related to Assets and Liabilities arising from a Single Transaction-Amendments to IAS 12

The amendments narrow the scope of the recognition exemption in paragraphs 15 and 24 of IAS 12 so that it no longer applies to transactions that, on initial recognition, give rise to equal taxable and deductible temporary differences.

The abovementioned standards and interpretations issued by IASB have not yet endorsed by FSC at the date when the Group's financial statements were authorized for issue, the local effective dates are to be determined by FSC. As the Group is still currently evaluating the potential impact of the aforementioned standards and interpretations listed under A, C ~ F, it is not practicable to estimate their impact on the Group at this point in time. The remaining new or amended standards and interpretations have no material impact on the Group.

4. Summary of significant accounting policies

(1) Statement of compliance

The consolidated financial statements of the Group for the six-month periods ended June 30,2021 and 2020 have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers ("the Regulations") and IAS 34 Interim Financial Reporting as endorsed and became effective by the FSC.

(2) Basis of preparation

The consolidated financial statements have been prepared on a historical cost basis, except for financial instruments that have been measured at fair value. The consolidated financial statements are expressed in thousands of New Taiwan Dollars ("NT\$") unless otherwise stated.

(3) Basis of consolidation

Preparation principle of consolidated financial statements

The Group's consolidated financial statements preparation principles are the same as the 2020 consolidated financial statements. Please refer to the Group's 2020 consolidated financial statements.

The consolidated entities are listed as follows:

			Percentage of ownership (%)
Investor	Subsidiary	Main businesses	2021.6.30	2020.12.31	2020.6.30
The Group	AVC INTERNATIONAL	Investment holding	100.00%	100.00%	100.00%
	CO., LTD.- B.V.I.
	(AVCI-BVI)
	CHIHUNG	Investment holding	100.00%	100.00%	100.00%
	INTERNATIONAL
	LTD. (CHIHUNG)
	RAYNEY	Trade	100.00%	100.00%	100.00%
	INTERNATIONAL
	LTD. (RAYNEY)
	MERIT TRADING	Trade	100.00%	100.00%	100.00%
	CORPORATION
	(MERIT)
	AVC AMERICA, INC.	Trade	100.00%	100.00%	100.00%
	(AVCA)
	AVC INTERNATIONAL	Trade	100.00%	100.00%	100.00%
	(SAMOA) CO., LTD.
	(AVCI(SAMOA))
	JADS CORPORATION (HK) LTD. (JADS)	Trade	100.00%	100.00%	100.00%
	AVC INTERNATIONAL	Trade	100.00%	100.00%	100.00%
	CO., LTD.- SAMOA
	(AVCI-SAMOA)
	HUNG YE	Investment holding	100.00%	100.00%	100.00%
	INVESTMENT CO.,
	LTD. (HUNGYE)
	D-MAX TECHNOLOGY	Sales and manufacture of	100.00%	100.00%	100.00%
	CO., LTD. (D-MAX)	electronic parts and
		related products
	FOSITEK CORP.	Sales and manufacture of	19.25%	19.71%	29.71%
	(FST)	electronic parts and
		related products

			Percentage of ownership (%)
Investor	Subsidiary	Main businesses	2021.6.30	2020.12.31	2020.6.30
	AVC EUROPE TECHNOLOGY GMBH (AVCEU)	Trade	100.00%	100.00%	100.00%
	AVC TECHNOLOGY (VIETNAM) COMPANY LIMITED. (AVC(VN))	Sales and manufacture of electronic products	100.00%	100.00%	-
AVCI-BVI	ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD. (AVCSZ)	Sales and manufacture of electronic products	100.00%	100.00%	100.00%
	MACE TECH CORP. (MACE)	Trade	100.00%	100.00%	100.00%
	ASIA VITAL COMPONENTS (CHENGDU) CO., LTD. (AVCCD)	Sales and manufacture of computers, related parts and accessories	100.00%	100.00%	100.00%
	AVC OPTICS CORP. (AVCOC)	Investment holding	100.00%	100.00%	100.00%
MACE	ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD. (AVCDG)	Manufacture, process and sales of electronic products	100.00%	100.00%	100.00%
AVCOC	AVC OPTICS (WUHAN) CORP. (AVCWH)	Sales and manufacture of computers, related parts and accessories	100.00%	100.00%	100.00%
AVCWH	WUHAN ASIA VITAL COMPONENTS CO.,LTD. (AVCWN)	Trade	100.00%	100.00%	100.00%
CHIHUNG	TONBRIDGE INVESTMENTS LTD. (TONBRIDGE)	Investment holding	100.00%	100.00%	100.00%
	ASIA VITAL COMPONENTS (CHINA) CO., LTD. (AVCCN)	Sales and manufacture of electronic products	100.00%	100.00%	100.00%
TONBRIDGE	ASIA VITAL COMPONENTS (SHANGHAI) CO.,LTD. (AVCSH)	Notebook thermal module	100.00%	100.00%	100.00%
AVCCN	BEIJING AVC TECHNOLOGY RESEARCH CENTER CO., LTD. (AVCBJ)	Maintenance, research and development of electronic products	100.00%	100.00%	100.00%

			Percentage of ownership (%)
Investor	Subsidiary	Main businesses	2021.6.30	2020.12.31	2020.6.30
	AVC PRECISION,	Sales and manufacture of	100.00%	100.00%	100.00%
	CO., LTD. (AVCP)	electronic products
D-MAX	WUCHIDA	Investment holding	100.00%	100.00%	100.00%
	INTERNATIONAL CO.,
	LTD. (WUCHIDA)
WUCHIDA	D-Max	Investment holding	100.00%	100.00%	100.00%
	INTERNATIONAL CO.,
	LIMITED (D-Max )
D-Max	(JIASHAN)D-MAX	Sales and manufacture of	100.00%	100.00%	100.00%
	ELECTRONICS CO.,LTD.	electronic and
		photographic equipment
FST	FOREVER RICH	Investment holding	-	-	-
	INVESTMENTS CO.,LTD.		(Note 1)	(Note 1)	(Note 1)
	(FOREVER RICH)
	MARKETHILL	Investment holding	100.00%	100.00%	100.00%
	INVESTMENTS LIMITED		(Note 1)	(Note 1)	(Note 1)
	(MARKETHILL)
FOREVER RICH	MARKETHILL	Investment holding	-	-	-
	INVESTMENTS LIMITED		(Note 1)	(Note 1)	(Note 1)
	(MARKETHILL)
MARKETHILL	DONG GUAN DOWA	Sales and manufacture of	-	-	100.00%
	ELECTRONICS CO.,LTD.	membrane switches	(Note 2)	(Note 2)
	FIRST DOME CORP	Sales and manufacture of	100.00%	100.00%	100.00%
	TELECOM.,LTD.	rails, shafts and metal
		stamping tooling

• Note 1: FST, which was the surviving company, had a short-form merge with its 100% owned subsidiary, FOREVER RICH, as of May 15, 2020. The subsidiaries held by FOREVER RICH were transferred to FST.
• Note 2: FST's Board of Directors' meeting approved the dissolution and liquidation of DONG GUAN DOWA ELECTRONICS CO.,LTD. on May 12, 2020.

Although the percentage of ownership interests in FST is less than 50%, the Group determined that it has control over FST. This is due to a combination of factors : the Group remains the single largest shareholder of FST since the increase of the investment in September 2014, the Group could obtain proxies to achieve relative majority in the absence of a contractual arrangement in place; and the ability of the Company to appoint or approve the key management personnel of FST who have the ability to direct the relevant activities.

The financial statements of part of the consolidated subsidiaries listed above had not been reviewed by auditors. As of June 30, 2021 and 2020, the related assets of the subsidiaries which were unaudited by auditors amount to \$11,691,935 thousand and \$10,474,710 thousand respectively, and the related liabilities amount to \$7,768,781 thousand and \$6,681,493 thousand, respectively. The comprehensive income of these subsidiaries amount to \$60,695 thousand and (\$188,041) thousand for the six-month periods ended June 30, 2021 and 2020, respectively. The comprehensive income of these subsidiaries amount to \$26,269 thousand and \$7,401 thousand for the three-month periods ended June 30, 2021 and 2020, respectively.

(4) Basis of consolidationt

The accounting policies adopted by the Group in the consolidated financial statements from January 1 to June 30, 2021 are the same as the consolidated financial statements of 2020. For the summary of other important accounting policies, please refer to the Group's 2020 consolidated financial statements.

5. Significant accounting judgements, estimates and assumptions

The major sources of significant accounting judgments, estimates and assumptions that are used in the Group's consolidated financial statements for the period from January 1 to June 30 2021 and 2020 are the same as the 2020 consolidated financial statements. Please refer to the Group's 2020 consolidated financial statements.

6. Contents of significant accounts

(1) Cash and cash equivalents

	30 Jun 2021	31 Dec 2020	30 Jun 2020
Cash on hand and demand deposits	\$12,420,338	\$10,978,910	\$9,579,123
Time deposits	242,913	129,106	136,815
Total	\$12,663,251	\$11,108,016	\$9,715,938

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

	30 Jun 2021	31 Dec 2020	30 Jun 2020
Mandatorily measured at fair value
through profit or loss:
Financial products	\$58,184	-	\$50,276

Financial assets at fair value through profit or loss were not pledged.

(3) Financial assets measured at amortized cost, current

	30 Jun 2021	31 Dec 2020	30 Jun 2020
Bank deposits	\$617,658	\$578,286	\$367,227

The Group classified certain financial assets as financial assets measured at amortized cost. Please refer to Note 8 for more details on financial assets measured at amortized cost under pledge and Note 12 for details on credit risk and assessment of impairment loss.

(4) Notes receivable, net

A.

	30 Jun 2021	31 Dec 2020	30 Jun 2020
Notes receivable	\$392,318	\$553,116	\$450,823
Less: loss allowance	(2,392)	(3,450)	(3,088)
Total	\$389,926	\$549,666	\$447,735

B. Notes receivables arised from operating activities and were not pledged.

• C. The Group follows the requirement of IFRS 9 to assess the impairment. The Group measures the loss allowance of its note receivables at an amount equal to lifetime expected credit losses. The movement in the provision for impairment of note receivables is as follows:
• D. Movement of the loss allowance table:

	Loss allowance
As of 1 Jan 2021	\$3,450
(Reversal) for the current period	(1,027)
Foreign exchange adjustments	(31)
As of 30 Jun 2021	\$2,392
As of 1 Jan 2020	\$2,412
Charge for the current period	743
Foreign exchange adjustments	(67)
As of 30 Jun 2020	\$3,088

(5) Accounts receivable, net

A.
	30 Jun 2021	31 Dec 2020	30 Jun 2020
Account receivables	\$3,813,488	\$3,827,104	\$5,339,812
Less: loss allowance	(117,814)	(135,643)	(117,100)
Total	\$3,695,674	\$3,691,461	\$5,222,712

B. Accounts receivables were not pledged.

C. Trade receivables are generally on 90-150 day terms. The total carrying amount as of June 30, 2021, December 31, 2020 and June 30, 2020 were \$3,813,488 thousand, \$3,827,104 thousand and \$5,339,812 thousand, respectively. The Group follows the requirement of IFRS 9 to assess the impairment, measure the loss allowance of its trade receivables at an amount equal to lifetime expected credit losses, condsider the grouping of note receivables by counterparties' credit rating, by geographical region and by industry sector, and its loss allowance is recognized based on expected loss ratio, details are as follow. Please refer to Note 12 for more details on credit risk management.

	Neither past		Past due but not impaired
	due nor impaired	31~90 days	91~180 days	>=181 days	Total
30 Jun 2021
Gross carrying amount	\$3,760,204	\$31,168	\$2,115	\$20,001	\$3,813,488
Loss ratio	0%~5%	1%~10%	5%~20%	50%~100%
Lifetime expected credit losses	98,790	312	106	18,606	117,814
Subtotal	\$3,661,414	\$30,856	\$2,009	\$1,395	\$3,695,674

	Neither past		Past due but not impaired
	due nor
	impaired	31~90 days	91~180 days	>=181 days	Total
31 Dec 2020
Gross carrying amount	\$3,796,894	\$11,263	\$1,467	\$17,480	\$3,827,104
Loss ratio	0%~5%	1%~10%	5%~20%	50%~100%
Lifetime expected credit losses	125,078	112	74	10,379	135,643
Subtotal	\$3,671,816	\$11,151	\$1,393	\$7,101	\$3,691,461
30 Jun 2020
Gross carrying amount	\$5,311,079	\$16,712	\$177	\$11,844	\$5,339,812
Loss ratio	0%~5%	1%~10%	5%~20%	50%~100%
Lifetime expected credit losses	105,438	167	9	11,486	117,100
Subtotal	\$5,205,641	\$16,545	\$168	\$358	\$5,222,712

D. Movement of the loss allowance table:

	Collectively
	impaired	Total
As of 1 Jan 2021	\$135,643	\$135,643
(Reversal) for the current period	(17,103)	(17,103)
Foreign exchange adjustments	(726)	(726)
As of 30 Jun 2021	\$117,814	\$117,814
As of 1 Jan 2020	\$156,055	\$156,055
(Reversal) for the current period	(36,556)	(36,556)
Foreign exchange adjustments	(2,399)	(2,399)
As of 30 Jun 2020	\$117,100	\$117,100

E. The Group entered into a factoring agreement with the following banks to sell its accounts receivable. Under the agreement, the Group is not obligated to bear the default risk of the transferred accounts receivable but is liable for the losses incurred on any business dispute. The Group does not have any continuing involvement in the transferred accounts receivable. Thus, the Group derecognized the transferred accounts receivable.

As of 30 June 2021, 31 December 2020 and 30 June 2020, other receivables from banks incurred by accounts receivable factoring amounted to \$344,583 thousand, \$248,672 thousand and \$330,586 thousand, respectively.

As of 30 June 2021, 31 December 2020 and 30 June 2020, the relevant information of accounts receivable factored and derecognised by the Group is as follows:

The Factor (Transferee)	Interest Rate (%)	Accounts receivable factoring not yet due (in thousands)	Amount received (in thousands)	Retention (recognized as other receivables) (in thousands)	Credit Limit (in thousands)
E.SUN	-	\$99,581	\$88,406	\$11,175	\$110,000
CTBC	-	11,939	10,745	1,194	20,000
Total	-	\$111,520	\$99,151	\$12,369	\$130,000

(b) 31 December 2020:

The Factor (Transferee)	Interest Rate (%)	Accounts receivable factoring not yet due (in thousands)	Amount received (in thousands)	Retention (recognized as other receivables) (in thousands)	Credit Limit (in thousands)
E.SUN	-	\$71,444	\$64,033	\$7,411	\$110,000
CTBC	-	13,203	11,883	1,320	20,000
Total	-	\$84,647	\$75,916	\$8,731	\$130,000

(c) 30 June 2020:

The Factor (Transferee)	Interest Rate (%)	Accounts receivable factoring not yet due (in thousands)	Amount received (in thousands)	Retention (recognized as other receivables) (in thousands)	Credit Limit (in thousands)
E.SUN	-	\$90,886	\$81,627	\$9,259	\$110,000
CTBC	-	18,968	17,070	1,898	21,600
Total	-	\$109,854	\$98,697	\$11,157	\$131,600

(6) Other receivables and other receivables-related parties

A.

	30 Jun 2021	31 Dec 2020	30 Jun 2020
Tax refund receivable	\$49,659	\$80,335	\$15,374
Other receivables	433,878	390,669	489,683
Less: loss allowance	(22,975)	(12,582)	(30,214)
Subtotal	460,562	458,422	474,843
Other receivables-related parties	4,840	15,812	-
Total	\$465,402	\$474,234	\$474,843

B. The Group follows the requirement of IFRS 9 to assess the impairment. The Group measures the loss allowance of its other receivables at an amount equal to lifetime expected credit losses, condsiders the grouping of note receivables by counterparties' credit rating, by geographical region and by industry sector and its loss allowance is recognized based on expected loss ratio, details are as follow. Please refer to Note 12 for more details on credit risk management.

C. Movement of the loss allowance table:

	Individually	Collectively
	impaired	impaired	Total
As of 1 Jan 2021	-	\$12,582	\$12,582
Charge for the current period	-	10,685	10,685
Foreign exchange adjustments	-	(292)	(292)
As of 30 Jun 2021	-	\$22,975	\$22,975
As of 1 Jan 2020	\$17,998	\$13,369	\$31,367
(Reversal) for the current period	-	(202)	(202)
Foreign exchange adjustments	(482)	(469)	(951)
As of 30 Jun 2020	\$17,516	\$12,698	\$30,214

Impairment loss that was individually determined for the six-month periods ended 30 June 2021, arose due to the fact that the counterparty was in financial difficulties. The amount of impairment loss recognized was the difference between the carrying amount of other receivables and the present value of its expected recoverable amount. The Group does not hold any collateral for such receivables.

(7) Inventories

A.

	30 Jun 2021	31 Dec 2020	30 Jun 2020
Raw materials	\$3,107,149	\$2,608,661	\$2,303,572
Work in progress	1,043,866	980,302	795,138
Finished goods	8,085,622	7,946,351	6,195,438
Total	\$12,236,637	\$11,535,314	\$9,294,148

B. Expenses and losses incurred on inventories for the six-month periods ended June 30 2021 and 2020 were as follows:

	For the three-month periods		For the six-month periods
	ended June 30		ended June 30
	2021	2020	2021	2020
Cost of inventories sold	\$10,341,746	\$9,682,912	\$19,136,442	\$16,179,253
Loss on inventory valuation	11,050	183,019	117,291	272,111
Loss on disposal of Inventory	86,137	76,532	116,805	88,515
Cost of goods sale	\$10,438,933	\$9,942,463	\$19,370,538	\$16,539,879

C. No inventories were pledged.

(8) Financial assets at fair value through other comprehensive income, noncurrent

	30 Jun 2021	31 Dec 2020	30 Jun 2020
Debt instrument investments measured at fair
value through other comprehensive income –
Non-current:
Unlisted companies stocks	\$94,190	\$101,449	\$93,247

Financial assets at fair value through other comprehensive income were not pledged.

(9) Investments accounted for under the equity method

A. The following table lists the investments in associates of the Group:

	30	Jun 2021	31 Dec 2020		30 Jun 2020
	Carrying	Percentage of	Carrying	Percentage of	Carrying	Percentage of
Investees	amount	ownership (%)	amount	ownership (%)	amount	ownership (%)
Investments in associates:
ZIMAG TECHNOLOGY CO., INC.
(Note 1)	\$44,191	9.53%	\$40,112	9.53%	\$39,271	9.53%
FURUKAWA AVC ELECTRONICS
(SUZHOU) CO., LTD.	84,618	30.00%	92,085	30.00%	99,925	30.00%
ZHUZHOU CRRC-AVC THERMAL
TECHNOLOGY CO., LTD.	85,917	25.00%	83,872	25.00%	143,192	45.00%
KEY APPLICATION
TECHNOLOGY CO., LTD. (Note 2)	-	16.31%	-	16.31%	-	16.31%
Total	\$214,726		\$216,069		\$282,388

Note 1: The Group evaluated and concluded that it has significant influence over Innovision, thus, this investment of the Group used the equity method for evaluation.

Note 2: The Group evaluated and concluded that it has significant influence over Innovision, thus, this investment of the Group used the equity method for evaluation.

Investments accounted for using the equity method of the Company and its subsidiaries, were \$214,726 thousand, \$216,069 thousand and \$282,388 thousand as of 30 June 2021, 31 December 2020 and 30 June 2020, respectively. For the three-month periods ended 30 June 2021 and 2020 and for the six-month periods ended 30 June 2021 and 2020, the related shares of investment (loss) income from the associates were \$3,104 thousand, \$13,693 thousand, \$920 thousand and \$12,921 thousand, respectively. The related shares of other comprehensive income from the associates were \$1,334 thousand, \$461 thousand, \$918 thousand and (\$3,140) thousand, which were based solely on the financial reports of other independent accountants.

None of the aforementioned associates were pledged.

B. Financial information of associates:

There is no individually significant associate for the Group. When an associate is a foreign operation, and the functional currency of the foreign entity is different from the Group, an exchange difference arising from translation of the foreign entity will be recognized in other comprehensive income (loss).

The aggregate financial information of the Group's investments in its joint ventures is as follows:

2021	2020	2021	2020
\$3,104	\$13,693	\$920	\$12,921
1,334	461	918	(3,140)
\$4,438	\$14,154	\$1,838	\$9,781
		For the three-month periods ended June 30	For the six-month periods ended June 30

(10)Property, plant and equipment

	30 Jun 2021	31 Dec 2020	30 Jun 2020
Owner occupied property, plant and equipment	\$7,584,786	\$7,773,383	\$6,681,664

A. Owner occupied property, plant and equipment

						Construction in
						progress and
						equipment
			Machinery and	Molding		awaiting
	Land	Buildings	equipment	equipment	Other facilities	examination	Total
Cost:
As of 1 Jan 2021	\$167,151	\$3,332,327	\$5,908,149	\$981,027	\$2,780,425	\$191,427	\$13,360,506
Additions	-	3,244	396,684	66,622	216,929	(7,099)	676,380
Disposals	-	-	(296,345)	(74,397)	(96,159)	-	(466,901)
Transfers and	-	27,391	-	-	-	-	27,391
reclassifications
Exchange differences	-	(64,163)	(113,102)	(13,705)	(39,008)	(2,712)	(232,690)
As of 30 Jun 2021	\$167,151	\$3,298,799	\$5,895,386	\$959,547	\$2,862,187	\$181,616	\$13,364,686
Depreciation and
impairment:
As of 1 Jan 2021	-	\$859,059	\$2,584,059	\$672,029	\$1,471,976	-	\$5,587,123
Depreciation	-	56,883	270,820	102,702	197,325	-	627,730
Impairment loss	-	-	25,363	-	-	-	25,363
Disposals	-	-	(186,543)	(70,854)	(91,025)	-	(348,422)
Transfers and	-	10,284	-	-	-	-	10,284
reclassifications
Exchange differences	-	(27,504)	(59,912)	(11,616)	(23,146)	-	(122,178)
As of 30 Jun 2021	-	\$898,722	\$2,633,787	\$692,261	\$1,555,130	-	\$5,779,900

						Construction in progress and
						equipment
			Machinery and	Molding		awaiting
	Land	Buildings	equipment	equipment	Other facilities	examination	Total
Cost:
As of 1 Jan 2020	\$167,151	\$3,323,319	\$5,020,114	\$807,979	\$2,414,863	\$166,170	\$11,899,596
Additions	-	2,332	435,117	43,709	191,282	71,261	743,701
Disposals	-	(5,660)	(140,429)	(115,721)	(73,848)	-	(335,658)
Transfers and	-	32,308	-	-	-	-	32,308
reclassifications
Exchange differences	-	(75,297)	(166,708)	(16,941)	(79,441)	(5,138)	(343,525)
As of 30 Jun 2020	\$167,151	\$3,277,002	\$5,148,094	\$719,026	\$2,452,856	\$232,293	\$11,996,422
Depreciation and
impairment:
As of 1 Jan 2020	-	\$762,100	\$2,291,955	\$696,130	\$1,437,369	-	\$5,187,554
Depreciation	-	56,445	212,431	60,582	133,851	-	463,309
Impairment loss	-	-	131,079	-	-	-	131,079
Disposals	-	(780)	(95,952)	(115,532)	(68,994)	-	(281,258)
Transfers and	-	4,493	-	-	-	-	4,493
reclassifications
Exchange differences	-	(12,533)	(96,810)	(15,433)	(65,643)	-	(190,419)
As of 30 Jun 2020	-	\$809,725	\$2,442,703	\$625,747	\$1,436,583	-	\$5,314,758
Net carrying amount as of:
30 Jun 2021	\$167,151	\$2,400,077	\$3,261,599	\$267,286	\$1,307,057	\$181,616	\$7,584,786
31 Dec 2020	\$167,151	\$2,473,268	\$3,324,090	\$308,998	\$1,308,449	\$191,427	\$7,773,383
30 Jun 2020	\$167,151	\$2,467,277	\$2,705,391	\$93,279	\$1,016,273	\$232,293	\$6,681,664

• B. The Group has evaluated the value of some machinery and equipment has been impaired, and impairment losses are recognized amounted to NT\$25,363 thousand and NT\$131,079 thousand for the years ended 30 June 2021 and 2020, respectively. The recoverable amount is the difference between fair value and disposal cost, this fair value measurement is categorized under Level 3
• C. Please refer to Note 8 for more details on property, plant and equipment under pledge.

(11)Investment property

Investment property includes the Group's own occupied investment property and the investment property held by the Group with the right-of-use assets. The Group enters into commercial property leasing contracts for its own investment property with a leasing period ranging from 1 to 10 years. The lease contract includes provisions for adjusting the rent based on the annual market environment.

	Land	Buildings	Total
Cost:
As of 1 Jan 2021	\$8,769	\$208,575	\$217,344
Additions	-	-	-
Transfers and reclassifications	-	(27,391)	(27,391)
Exchange differences	-	(1,072)	(1,072)
As of 30 Jun 2021	\$8,769	\$180,112	\$188,881
As of 1 Jan 2020	\$8,769	\$240,624	\$249,393
Additions		-	-
Transfers and reclassifications		(32,308)	(32,308)
Exchange differences	-	(2,725)	(2,725)
As of 30 Jun 2020	\$8,769	\$205,591	\$214,360
Depreciation and impairment:
As of 1 Jan 2021	-	\$94,877	\$94,877
Depreciation	-	1,719	1,719
Transfers and reclassifications	-	(10,284)	(10,284)
Exchange differences	-	(1,210)	(1,210)
As of 30 Jun 2021	-	\$85,102	\$85,102
As of 1 Jan 2020	-	\$95,240	\$95,240
Depreciation	-	2,115	2,115
Transfers and reclassifications		(4,493)	(4,493)
Exchange differences	-	(378)	(378)
As of 30 Jun 2020	-	\$92,484	\$92,484
Net carrying amount as at:
As of 30 Jun 2021	\$8,769	\$95,010	\$103,779
As of 31 Dec 2020	\$8,769	\$113,698	\$122,467
As of 30 Jun 2020	\$8,769	\$113,107	\$121,876

	For the three-month periods		For the six-month periods
	ended June 30		ended June 30
	2021	2020	2021	2020
Rental income from investment property	\$4,406	\$3,935	\$8,824	\$10,512
Less: Direct operating expenses from Investment property generating rental income	(1,429)	(1,505)	(2,860)	(3,227)
Total	\$2,977	\$2,430	\$5,964	\$7,285

Please refer to Note 8 for more details on investment property under pledge.

The investment property held by the Group is industrial land and buildings, and the fair value is equivalent to the carrying value.

(12)Intangible assets

	Computer
	software	Patents	License fee	Goodwill	Total
Cost:
As of 1 Jan 2021	\$301,734	\$5,185	\$25,679	\$7,107	\$339,705
Addition	39,796	-	-	-	36,796
Disposals	(77)	-	-	-	(77)
Transfers and reclassifications	-	-	-	-	-
Exchange differences	(6,133)	-	-	-	(6,133)
As of 30 Jun 2021	\$332,320	\$5,185	\$25,679	\$7,107	\$370,291
As of 1 Jan 2020	\$273,563	\$5,185	\$25,679	\$7,107	\$311,534
Addition	30,194	-	-	-	30,194
Disposals	(23,168)	-	-	-	(23,168)
Transfers and reclassifications	-	-	-	-	-
Exchange differences	(4,588)	-	-	-	(4,588)
As of 30 Jun 2020	\$276,001	\$5,185	\$25,679	\$7,107	\$313,972
Amortization and impairment:
As of 1 Jan 2021	\$158,421	\$5,185	\$19,398	\$7,107	\$190,111
Amortization	29,780	-	438	-	30,218
Disposals	(67)	-	- -	- -	(67)
Transfers and reclassifications	-	-	- -	- -	-
Exchange differences	(4,545)	-	-	-	(4,545)
As of 30 Jun 20201	\$183,589	\$5,185	\$19,836	\$7,107	\$215,717

	Computer
	software	Patents	License fee	Goodwill	Total
As of 1 Jan 2020	\$140,619	\$5,185	\$16,981	\$7,107	\$169,892
Amortization	20,705	-	1,979	-	22,684
Disposals	(23,168)	-	-	-	(23,168)
Transfers and reclassifications	-	-	-	-	-
Exchange differences	(2,225)	-	-	-	(2,225)
As of 30 Jun 2020	\$135,931	\$5,185	\$18,960	\$7,107	\$167,183
Net carrying amount as at:
30 Jun 2021	\$148,731	-	\$5,843	-	\$154,574
31 Dec 2020	\$143,313	-	\$6,281	-	\$149,594
30 Jun 2020	\$140,070	-	\$6,719	-	\$146,789

Amortization expense of intangible assets under the statement of comprehensive income:

	For the three-month periods ended		For the six-month periods ended June 30
		June 30
	2021	2020	2021	2020
Operating costs	\$1,858	\$1,371	\$3,695	\$2,560
Operating expenses	\$12,068	\$11,221	\$26,523	\$20,124

(13)Other non-current assets

30 Jun 2021	31 Dec 2020	30 Jun 2020
\$511,129	\$407,087	\$767,491
178,108	179,670	169,493
92,380	21,372	-
5,966	4,543	23,268
\$787,583	\$612,672	\$960,252

Please refer to Note 8 for more details on other non-current assets under pledge.

(14)Short-term borrowings

A.

	30 Jun 2021	31 Dec 2020	30 Jun 2020
Unsecured bank loans	\$3,606,559	\$2,452,594	\$2,962,231

B. Interest rate ranges are within 0.00%~1.18% and 0.67%~4.03% as of 30 June 2021 and 2020, respectively.

C. As of 30 June 2021, 31 December 2020 and 30 June 2020, unused short-term lines of credit were \$7,642,906 thousand, \$7,597,009 thousand and \$5,618,010 thousand, respectively.

(15)Short-term notes payable

		30 Jun	2020
Guarantee or acceptance agency	Issued Period		Range of interest rates		Amount
China bills finance corporation	2020.6.15~2020.7.15		0.40%〜		\$100,000
Mega bills finance corporation	2020.6.4~2020.7.3		0.63%		100,000
Total					\$200,000
There was none on 30 June 2021 and 31 December 2020.
(16)Other payables
	30 Jun	2021	31 Dec 2020	30 Jun	2020
Salaries and bonus		\$1,081,466	\$991,444		\$1,039,448
Employee's compensation and		200,622	133,473		117,930
remuneration of directors
Dividends payable		1,004,684	-		459,303
Others		1,554,493	1,789,821		1,169,154
Total		\$3,841,265	\$2,914,738		\$2,785,835
(17)Corporate Bonds payable
	31 Jun 2021		31 Dec 2020 31 June	2020	Collateral
5 year secured bonds - issued
at par value. Issued in August
2020. Interest at 0.62%, bullet
repayment, payable annually.	\$2,400,000		\$2,400,000	-	None
Less: current portion	-		-	-
Ending balance	\$2,400,000		\$2,400,000	-

The issuance of the above corporate bonds payable is to repay existing loans and expand working capital, the Company entered into a syndicated credit facility agreement with 9 banks by E.SUN Commercial Bank, Taiwan Cooperative Bank, Hua Nan Commercial Bank, Bank of Taiwan, Land Bank of Taiwan, Mega International Commercial Bank, The Shanghai Commercial & Savings Bank, First Commercial Bank and CTBC Bank for a NT\$2,424,000 thousand credit line.

(18)Long-term borrowings

	30 Jun 2021	31 Dec 2020	30 Jun 2020	Redemption
Unsecured Long-Term Loan	\$490,000	\$490,000	-	Effective 19 Oct 2020 to 19
from Mega International				Oct 2025. Five-year loan:
Commercial Bank				interest-only for 18 months
				from the first date of
				allocation. Principal and
				interest are repaid in 14
				quarterly payments.

	30 Jun 2021	31 Dec 2020	30 Jun 2020	Redemption
Unsecured Long-Term Loan	\$105,000	\$135,000	\$165,000	Effective 23 Jan 2018 to 23
from Taiwan Cooperative				Jan 2023. Five-year loan:
Bank				principal is repaid in 20
				quarterly payments with
				monthly interest payments.
Unsecured Long-Term Loan	240,000	270,000	300,000	Effective 17 Jun 2020 to 17
from Taiwan Cooperative				Jun 2025. Five-year loan:
Bank				principal is repaid in 20
				quarterly payments with
				monthly interest payments.
Unsecured Long-Term Loan	-	-	90,000	Effective 5 Mar 2018 to 5
from Shanghai Commercial &				Mar 2021. Three-year loan:
Savings Bank				interest-only for 6 months
				from the first date of
				allocation. Principal and
				interest are repaid in 10
				quarterly payments.
Unsecured Long-Term Loan	-	125,000	150,000	Effective 15 Apr 2020 to 15
from Shanghai Commercial &				Apr 2023. Three-year loan:
Savings Bank				principal is repaid in
				quarterly payments with
				monthly interest payments.
Unsecured Long-Term Loan	-	-	83,333	Effective 18 Apr 2018 to 18
from First Commercial Bank				Apr 2021. Three-year loan:
				principal is repaid in
				monthly payments with
				monthly interest payments.
Unsecured Long-Term Loan	-	-	150,000	Effective 21 May 2018 to
from HSBC				21 May 2021. Three-year
				loan: first period begins 18
				months after first allocation.
				Principal is repaid in 4
				quarterly payments with
				monthly interest payments.
Unsecured Long-Term Loan	-	-	200,000	Effective 20 Jun 2018 to 20
from Taipei Fubon Bank				Jun 2021. Three-year loan:
				first period begins 18 months
				after first allocation. Principal
				is repaid in 6 quarterly
				payments with monthly
				interest payments.monthly
				interest payments.

	30 Jun 2021	31 Dec 2020	30 Jun 2020	Redemption
Unsecured Long-Term Loan	\$100,000	-	-	Effective 23 Jun 2021 to 31
from Taipei Fubon Bank				Dec 2023. Three-year loan:
				split loan is available. The
				first period begins 18 months
				after first allocation. 16% of
				the principal is repaid in
				quarterly payments and the
				remaining principal is repaid
				on the maturity date.
Unsecured Long-Term Loan	-	-	\$155,556	Effective 1 Aug 2018 to 1
from Hua Nan Bank				Aug 2021. Three-year loan:
				principal is repaid in
				monthly payments with
				monthly interest payments.
Unsecured Long-Term Loan	311,111	\$377,778	-	Effective 12 Oct 2020 to 12
from Hua Nan Bank				Oct 2023. Three-year loan:
				principal is repaid in
				monthly payments with
				monthly interest payments.
Unsecured Long-Term Loan	-	-	225,000	Two-year loan: principal is
from Jih Sun Bank				repaid in 8 quarterly payments
				with monthly interest
				payments.
Unsecured Long-Term Loan	600,000	600,000	-	Effective 7 Sep 2020 to 7
from Yuanta Commercial				Sep 2024. Three-year loan:
Bank				split loan is available. The first period begins at the
				expiration date of interest
				only. Principal is repaid in 9
				quarterly payments with
				monthly interest payments.
				Payments 1 to 8 are for
				NT\$60,000 thousand, and
				the final payment is for
				NT\$120,000 thousand.
Unsecured Long-Term Loan	-	262,500	-	Effective 7 Jul 2020 to 7 Jul
from Jih Sun Bank				2022. Two-year loan:
				principal is repaid in 8
				quarterly payments with
				monthly interest payments.

	30 Jun 2021	31 Dec 2020	30 Jun 2020	Redemption
Unsecured Long-Term Loan	-	-	\$360,000	Three-year loan: split loan
from Yuanta Commercial				is available. The first period
Bank				begins at the expiration date
				of interest-only. Principal is
				repaid in 9 quarterly
				payments with monthly
				interest payments.
				Payments 1 to 8 are for
				NT\$60,000 thousand, and
				the final payment is for
				NT\$120,000 thousand.
Unsecured Long-Term Loan	\$100,000	-	-	Revolving credit for 2 years
from Cathay United Bank				from 12 Sep 2020 to 12 Sep
				2022.
Unsecured Long-Term Loan	-	-	354,167	Effective 19 Nov 2020 to
from Bank of Taiwan				19 Nov 2023. Three-year
				loan: interest-only payment
				for the first year. Principal
				is repaid with monthly
				interest payments.
Unsecured Long-Term Loan	100,000	-	-	Effective 25 May 2021 to
from Bank of Taiwan				25 May 2024. Three-year
				loan: interest-only payment
				for the first year. Principal
				is repaid with monthly
				interest payments.
Unsecured Long-Term Loan	-	-	400,000	Revolving credit for 2 years
from DBS Bank				from the first day of allocation
				19 Mar 2019. Each loan must
				not exceed 6 months.
Unsecured Long-Term Loan	-	\$136,111	194,444	Effective 18 Feb 2019 to 18
from Chang Hwa Bank				Feb 2022. Three-year loan:
				Principal is repaid with
				monthly interest payments.
Unsecured Long-Term Loan	-	133,334	183,333	Effective 1 Apr 2019 to 1
from Taiwan Business Bank				Apr 2022. Three-year loan:
				Principal is repaid with
				monthly interest payments.
Unsecured Long-Term Loan	354,166	416,667	479,167	Effective 1 Apr 2020 to 1
from Taiwan Business Bank				Apr 2024. Four-year loan:
				Principal is repaid with
				monthly interest payments.

	30 Jun 2021	31 Dec 2020	30 Jun 2020	Redemption
Unsecured Long-Term Loan	-	\$150,000	\$200,000	Effective 30 May 2019 to
from E. Sun Bank				30 May 2022. Three-year
				loan: Principal is amortized
				on a quarterly basis, and
				interest is paid on a
				monthly basis.
Unsecured Long-Term Loan	-	100,000	200,000	Revolving credit for 2 years
from Kgi Bank				from the first day of
				allocation 24 Jun 2019.
Unsecured Long-Term Loan	\$200,000	-	-	Revolving credit for 2 years
from Kgi Bank				from the first day of
Unsecured Long-Term Loan	195,000	225,000	255,000	allocation 16 Jun 2021. Effective 3 Sep 2019 to 3
from Taiwan Cooperative				Sep 2024. Five-year loan:
Bank				principal is repaid in
				quarterly payments with
				monthly interest payments.
Unsecured Long-Term Loan	133,332	183,332	233,333	Effective 18 Oct 2019 to 18
from Land Bank of Taiwan				Oct 2022. Three-year loan:
				Principal is repaid in
				monthly payments with
	-	-		interest.
Unsecured Long-Term Loan from CTBC Bank			300,000	Revolving credit for 3 years from the first day of
				allocation 20 Nov 2019.
Unsecured Long-Term Loan	-	-	100,000	Revolving credit for 3 years
from Shin Kong Bank				from the first day of
				allocation 22 Aug 2021.
Unsecured Long-Term Loan	-	-	500,000	Revolving credit for 2 years
from Cathay United Bank				from 12 Sep 2019 to 12 Sep
				2021.
Unsecured Long-Term Loan	-	-	200,000	Three-year FRCP: first
from Taishin International				issued on 21 Jun 2018. The
Bank				full issuance of the
				agreement during the
				effective period (issued and guaranteed by Taishin
				Bank).
Unsecured Long-Term Loan	-	120,000	120,000	Effective 24 Feb 2020 to 24
from HSBC				Feb 2023. Three-year loan:
				first period begins 18 months
				after first allocation. Principal
				is repaid in 7 quarterly
				payments with monthly
				interest payments.

	30 Jun 2021	31 Dec 2020	30 Jun 2020	Redemption
Unsecured Long-Term Loan	\$59,896	\$59,896	-	Effective 12 Nov 2020 to
from Bank of Taiwan				12 Oct 2025. Five-year
				loan: interest-only payment
				for the second year.
				Principal is repaid with
				monthly interest payments.
Unsecured Long-Term Loan	19,333	-	-	Effective 29 Apr 2021 to 29
from First Commercial Bank				Apr 2026. Five-year loan:
				principal is repaid in
				monthly payments with
				monthly interest payments.
Subtotal	3,007,838	3,784,618	5,598,333
Less: Due within one year	(786,501)	(1,309,287)	(2,468,334)
Total	\$2,221,337	\$2,475,331	\$3,129,999
Range of interest rates	0.800%~1.25%	0.900%~1.08%	0.399%~1.23%

(19)Long-term deferred revenue

Government grants were as follows:

	For the six-month periods ended June 30
	2021	2020
Beginning balance	\$755,714	\$770,163
Released to the statement of comprehensive income	(13,613)	(13,321)
Exchange differences	(11,505)	(20,432)
Ending balance	\$730,596	\$736,410

Government grants have been received for the purchase of certain items of property, plant and equipment.

(20)Post-employment benefits

A. Defined contribution plan

Expenses under the defined contribution plan for the three-month periods ended 30 June 2021 and 2020 are \$7,875 thousand and \$7,568 thousand, respectively; for the six-month periods ended 30 June 2021 and 2020 are \$15,602 thousand and \$14,981 thousand, respectively.

B. Defined benefits plan

Costs under the defined benefits plan for the three-month periods ended 30 June 2021 and 2020 are \$652 thousand and \$664 thousand, respectively; for the six-month periods ended 30 June 2021 and 2020 are \$1,314 thousand and \$1,333 thousand, respectively.

(21)Equities

A. Common stock

As of 30 June 2021, 31 December 2020 and 30 June 2020, the Group's authorized capital was \$4,000,000 thousand, and issued \$3,533,101 thousand with 353,310 thousand shares, each at a par value of \$10. Each share has one voting right and a right to receive dividends.

B. Additional paid-in capital

	30 Jun 2021	31 Dec 2020	30 Jun 2020
Share premium	\$702,297	\$1,055,607	\$1,055,607
Difference between consideration and	72,336	60,022	-
carrying amount of subsidiaries
acquired or disposed
Donated assets received	3,148	3,148	2,887
Premium from merger	443,730	443,730	443,730
Employee stock option	15,300	15,300	15,300
Share options of convertible bonds	23,292	23,292	23,293
Total	\$1,260,103	\$1,601,099	\$1,540,817

According to the Company Act, the capital reserve shall not be used except for making good the deficit of the company. When a company incurs no loss, it may distribute the capital reserves related to the income derived from the issuance of new shares at a premium or income from endowments received by the company. The distribution could be made in cash or in the form of dividend shares to its shareholders in proportion to the number of shares being held by each of them.

C. Retained earnings and dividend policies

According to the Company's Articles of Incorporation, current year's earnings, if any, shall be distributed in the following order:

• (a) Payment of all taxes and dues;
• (b) Offset prior years' operation losses;
• (c)Set aside 10% of the remaining amount after deducting items (a) and (b) as legal reserve, except for when accumulated legal reserve has reached total authorized capital.
• (d)Set aside or reverse special reserve in accordance with law and regulations; and
• (e)The distribution of the remaining portion, if any, will be recommended by the Board of Directors and resolved in the shareholders' meeting.
• (f) According to Paragraph 5, Article 240 of the Company Act, the resolution authorizing a majority vote at a meeting of Board of Directors attended by two-thirds of the total number of directors shall, in the form of the distribution of dividends and dividends or all or part of the legal reserves and capital reserves provided for in Paragraph 1, Article 241 of the Companies Act, shall be paid in cash and shall be reported to the shareholders' meeting.

The policy of dividend distribution should reflect factors such as the current and future development plan, investment environment, fund requirements, domestic and international competition as well as the interest of the shareholders. A percentage of no less than 5% of the distributable profits of the accounting period shall be distributed as shareholders' dividends annually. When the accumulated distributable profits are less than 10% of our paid-up capital, we will no longer be required to make allowances for allocation. Shareholders' dividends could be paid in the form of shares or cash. Accordingly, at least 10% of the dividends must be paid in the form of cash.

According to the Company Act, the Company needs to set aside an amount to legal reserves unless where such legal reserve amounts to the total authorized capital. The legal reserve can be used to make good the deficit of the Company. When the Company incurs no loss, it may distribute the portion of legal reserves that exceeds 25% of the paid-in capital by issuing new shares or by cash in proportion to the number of shares being held by each of the shareholders.

Following the adoption of TIFRS, the FSC on 6 April 2012 issued Order No. Financial-Supervisory-Securities-Corporate-1010012865, which sets out the following provisions for compliance:

On a public company's first-time adoption of the TIFRS, for any unrealized revaluation gains and cumulative translation adjustments (gains) recorded to shareholders' equity that the company elects to transfer to retained earnings by application of the exemption under IFRS 1, the company shall set aside an equal amount of special reserves. Following a company's adoption of the TIFRS for the preparation of its financial reports, when distributing distributable earnings, it shall set aside to special reserves, from the profit/loss of the current period and the undistributed earnings from the previous period. The amount should equal to "other net deductions from shareholders' equity for the current fiscal year, provided that the company has already set aside special reserves according to the requirements in the preceding point, it shall set aside supplemental special reserve based on the difference between the amount already set aside and other net deductions from shareholders' equity. For any subsequent reversal of other net deductions from shareholders' equity, the amount reversed may be distributed.

As of 1 January 2021 and 2020, special reserve set aside for the first-time adoption of TIFRS amounts to \$95,481 thousand. Furthermore, the Group has not reversed special reserve for the six-month periods ended 30 June 2021 and 2020 as results of the no use, disposal or reclassification of related assets. As of 30 June 2021 and 2020, special reserve set aside for the first-time adoption of TIFRS amounts to \$95,481 thousand.

Details of the 2021 and 2020 earnings distribution and dividends per share as approved and resolved by the shareholders' meeting on 6 August, 2021 and 19 June, 2020, respectively, are as follows:

	Appropriation of earnings		Dividend per share (NT\$)
	2020	2019	2020	2019
Legal reserve	\$192,355	\$95,797
Special reserve	(76,086)	407,289
Common stock -cash dividend	635,958	459,303	\$1.8	\$1.3

The shareholders' meeting on 6 August, 2021 resolved to distribute \$353,310 thousand from capital surplus to shareholders in the form of cash. Shareholders are entitled to receive \$1.00 per share.

Please refer to Note 6.24 for further details on employees' compensation and remuneration to directors and supervisors.

D. Non-controlling interests

	For the six-month periods ended June 30
	2021	2020
Beginning balance	\$711,740	\$357,925
Profit (loss) attributable to non-controlling interests	250,555	59,258
Other comprehensive income, attributable to non-controlling
interests, net of tax:
Exchange differences resulting from translating the	(9,425)	(4,704)
financial statements of a foreign operation
Increasing in non-controlling interests	545,157	163,450
The differences between the fair value of the consideration	(12,314)	-
paid or received from acquiring or disposing subsidiaries and
the carrying amounts of the subsidiaries
Ending balance	\$1,485,713	\$575,929

(22)Operating revenues

A. Disaggregation of revenue

	For the three-month periods ended June 30		For the six-month periods ended June 30
	2021	2020	2021	2020
Sale of goods	\$12,748,781	\$11,604,824	\$23,347,577	\$19,091,375
Timing of revenue recognition: At a point in time	\$12,748,781	\$11,604,824	\$23,347,577	\$19,091,375

B. Contract balances

Contract liabilities - current

	30 Jun 2021	31 Dec 2020	30 Jun 2020
Sale of goods	\$4,895	\$80,298	\$108

During the period, contract liabilities significantly decreased as performance obligations are partially satisfied and \$80,298 thousand included in the contract liability balance at the beginning of the period was recognized as revenue during the period.

(23)Lease

A. Group as a lessee

The Group leases various properties, including real estate such as land and buildings, machinery and equipment and office equipment. The lease terms range from 1 to 50 years.

The Group's leases effect on the financial position, financial performance and cash flows are as follow:

• (a) Amounts recognized in the balance sheet
• I. Right-of-use assets

The carrying amount of right-of-use assets

	30 Jun 2021	31 Dec 2020	30 Jun 2020
Land	\$542,913	\$558,558	\$546,598
Buildings	1,340,328	1,158,909	1,145,461
Transportation equipment	12,592	15,093	12,164
Office equipment	386	463	319
Total	\$1,896,219	\$1,733,023	\$1,704,542

During the six-month period ended 30 June 2021, the Group's additions to right-of-use assets amounted to \$308,168 thousand.

II. Lease liabilities

	30 Jun 2021	31 Dec 2020	30 Jun 2020
Current	\$178,492	\$170,345	\$151,158
Non-current	1,240,884	1,048,455	1,033,386
Total	\$1,419,376	\$1,218,800	\$1,184,544

Please refer to Note 6.25(4) for the interest on lease liabilities recognized during the sixmonth period ended 30 June 2021 and refer to Note 12.5 Liquidity Risk Management for the maturity analysis for lease liabilities as of 30 June 2021.

(b) Amounts recognized in the statement of profit or loss Depreciation charge for right-of-use assets

For the three-month periods ended June 30		For the six-month periods ended June 30
\$3,541	\$3,486	\$7,060	\$7,048
53,178	44,049	101,926	88,952
1,897	2,025	3,882	4,050
57	42	108	84
\$58,673	\$49,602	\$112,976	\$100,134

(c) Income and costs relating to leasing activities

	For the three-month periods ended June 30			For the six-month periods
			ended June 30
	2021	2020	2021	2020
The expenses relating to short-term leases	\$6,865	\$7,858	\$13,056	\$15,727

(d) Cash outflow relating to leasing activities

During the six-month period ended 30 June 2021, the Group's total cash outflows for leases amounting to \$114,029 thousand.

B. Group as a lessor (applicable to the disclosure requirement in IFRS 16)

Please refer to Note 6.11 for relevant disclosure of the Group's own occupied investment property. Leases of owned investment properties are classified as operating leases as they do not transfer substantially all the risks and rewards incidental to ownership of underlying assets.

	For the three-month periods ended June 30		For the six-month periods
				ended June 30
	2021	2020	2021	2020
Lease income for operating leases
Income relating to fixed lease payments
and variable lease payments that depend
on an index or a rate	\$6,733	\$4,548	\$15,530	\$11,353

Please refer to Note 6.11 for relevant disclosure of property, plant and equipment for operating leases under IFRS 16. For operating leases entered by the Group, the undiscounted lease payments to be received and a total of the amounts for the remaining years as of 30 June 2021 are as follow:

	30 Jun 2021	31 Dec 2020	30 Jun 2020
Not later than one year	\$14,855	\$16,095	\$13,905
Later than one year and not later than five years	52,390	52,099	49,351
Later than five years	3,478	8,378	13,273
Total	\$70,723	\$76,572	\$76,529

(24)Summary statement of employee benefits, depreciation and amortization expenses by function:

	For the three-month periods ended June 30
Function		2021			2020
Nature	Operating	Operating	Total	Operating	Operating	Total
	costs	expenses	amount	costs	expenses	amount
Employee benefits expense
Salaries	\$1,315,709	\$505,391	\$1,821,100	\$1,055,405	\$317,882	\$1,373,287
Labor and health insurance	\$83,050	\$43,287	\$126,337	\$33,970	\$16,103	\$50,073
Pension	\$1,149	\$7,378	\$8,527	\$1,329	\$6,903	\$8,232
Other employee benefits expense	\$22,160	\$13,734	\$35,894	\$22,232	\$10,410	\$32,642
Depreciation	\$305,446	\$69,276	\$374,722	\$222,035	\$57,911	\$279,946
Amortization	\$3,741	\$10,500	\$14,241	\$1,967	\$10,779	\$12,746

	For the six-month periods ended June 30
Function		2021			2020
Nature	Operating	Operating	Total	Operating	Operating	Total
	costs	expenses	amount	costs	expenses	amount
Employee benefits expense
Salaries	\$2,541,261	\$944,871	\$2,486,132	\$1,971,400	\$693,086	\$2,664,486
Labor and health insurance	\$153,418	\$76,116	\$229,534	\$77,585	\$39,998	\$117,583
Pension	\$2,243	\$14,673	\$16,916	\$2,578	\$13,736	\$16,314
Other employee benefits expense	\$41,408	\$26,906	\$68,314	\$38,694	\$20,364	\$59,058
Depreciation	\$605,955	\$136,470	\$742,425	\$449,166	\$116,392	\$565,558
Amortization	\$6,662	\$24,188	\$30,850	\$3,298	\$19,698	\$22,996

According to the Company's Articles of Incorporation, no less than 3% of profit of the current year is distributable as employees' compensation and no higher than 2% of profit of the current year is distributable as remuneration to directors and supervisors. However, the company's accumulated losses shall have been covered. The Company may, by a resolution adopted by a majority vote at a meeting of Board of Directors attended by two-thirds of the total number of directors, have the profit distributed as employees' compensation in the form of shares or in cash; and in addition thereto a report of such distribution is submitted to the shareholders' meeting. Information on the board of directors' resolution regarding the employees' compensation and remuneration to directors and supervisors can be obtained from the "Market Observation Post System" on the website of the TWSE.

Based on the profit of the current year, the Company estimated the amounts of the employees' compensation and remuneration to directors and supervisors for the three-month and six-month periods ended 30 June 2021 to be \$36,983 thousand, \$15,849 thousand, \$61,053 thousand and \$26,165 thousand, respectively. The Company estimated the amounts of employees' compensation and remuneration to directors and supervisors for three-month and six-month periods ended 30 June 2020 to be \$25,859 thousand, \$11,083 thousand, \$33,877 thousand and \$14,519 thousand, respectively. The aforementioned amounts were recognized as employee benefits expense. If the Board of Directors resolves to distribute employees' compensation in the form of stocks, the number of stocks distributed was calculated based on the closing price of the day before the Board of Directors meeting. The difference between the estimation and the resolution of the stockholder's meeting will be recognized in profit or loss in the subsequent year.

The Company's 2021 employee compensation and director's compensation approved by the shareholders' meeting on 6 August 2021 employee compensation and director's compensation reported by the shareholders' meeting of 19 June 2020 are as follows:

	2020	2019
Employee compensation	\$84,863	\$44,098
Remuneration to directors and supervisors	36,370	18,899

The distribution was passed by the Board of Directors meeting held on 23 March, 2021 to distribute NT\$84,863 thousand and NT\$36,370 thousand in cash as employee compensation and remuneration to directors and supervisors of 2020, which has no material differences between the expense listed in the financial report of 2020.

No material differences exist between the estimated amount and the actual distribution of the employee compensation and remuneration to directors and supervisors for the year ended 31 December, 2020 and 2019.

(25)Non-operating income and expenses

A. Interest income

	For the three-month periods ended June 30		For the six-month periods ended June 30
	2021	2020	2021	2020
Interest income from bank deposits	\$5,719	\$10,748	\$10,251	\$17,671
Financial assets at amortized cost	1,454	1,431	2,375	2,617
Others	4	5	8	8
Total	\$7,177	\$12,184	\$12,634	\$20,296

B. Other income

	For the three-month periods		For the six-month periods
	ended June 30 2021 2020		ended June 30
			2021	2020
Rental income	\$6,733	\$4,548	\$15,530	\$11,353
Others	153,196	87,263	234,190	138,483
Total	\$159,929	\$91,811	\$249,720	\$149,836

C. Other gains and losses

	For the three-month periods		For the six-month periods
		ended June 30	ended June 30
	2021	2020	2021	2020
(Losses) gains on disposal of property,	(\$68,009)	(\$15,023)	(\$84,563)	(\$13,851)
plant and equipment
Gains on disposal of investments	348	108	548	247
Foreign exchange income, net	(40,057)	14,843	(25,334)	31,690
Impairment loss	(14,865)	(139,467)	(25,363)	(139,467)
Others	(12,162)	(2,682)	(18,876)	(7,154)
Total	(\$134,745)	(\$142,221)	(\$153,588)	(\$128,535)

D. Finance costs

		For the three-month periods	For the six-month periods
	ended June 30			ended June 30
	2021	2020	2021	2020
Interest on borrowings from bank	\$13,896	\$27,729	\$28,591	\$61,501
Interest on corporate bonds payable	3,720	-	7,440	-
Interest on lease liabilities	15,283	11,984	27,259	24,590
Others	4,003	8,353	7,953	23,918
Total	\$36,902	\$48,066	\$71,243	\$110,009

(26)Components of other comprehensive income

For the three-month period ended 30 June 2021:

				Income tax
				relating to
		Reclassification	Other	components of	Other
		adjustments	comprehensive	other	comprehensive
	Arising during	during the	income, before	comprehensive	income,
	the period	period	tax	income	net of tax
Not to be reclassified to profit or loss in
subsequent periods:
Unrealized gain from equity instruments
investments measured at fair value through
other comprehensive income	\$13,559	-	\$13,559	-	\$13,559
To be reclassified to profit or loss in
subsequent periods:
Exchange differences resulting from
translating the financial statements of a
foreign operation	(145,363)	-	(145,363)	\$16,582	(128,781)
Share of other comprehensive income of
associates accounted for using the equity
method	1,334	-	1,334	-	1,334
Total of other comprehensive income	(\$130,470)	-	(\$130,470)	\$16,582	(\$113,888)

For the six-month period ended 30 June 2021:

				Income tax
				relating to
		Reclassification	Other	components of	Other
		adjustments	comprehensive	other	comprehensive
	Arising during	during the	income, before	comprehensive	income,
	the period	period	tax	income	net of tax
Not to be reclassified to profit or loss in
subsequent periods:
Unrealized gain from equity instruments
investments measured at fair value through
other comprehensive income	\$19,690	-	\$19,690	-	\$19,690
To be reclassified to profit or loss in
subsequent periods:
Exchange differences resulting from
translating the financial statements of a
foreign operation	(252,166)	-	(252,166)	\$29,257	(222,909)
Share of other comprehensive income of
associates accounted for using the equity
method	918	-	918	-	918
Total of other comprehensive income	(\$231,558)	-	(\$231,558)	\$29,257	(\$202,301)

				Income tax
				relating to
		Reclassification	Other	components of	Other
		adjustments	comprehensive	other	comprehensive
	Arising during	during the	income, before	comprehensive	income,
	the period	period	tax	income	net of tax
Not to be reclassified to profit or loss in
subsequent periods:
Unrealized losses from equity instruments
investments measured at fair value through
other comprehensive income	\$6,123	-	\$6,123	-	\$6,123
To be reclassified to profit or loss in
subsequent periods:
Exchange differences resulting from
translating the financial statements of a
foreign operation	(222,622)	-	(222,622)	\$28,694	(193,928)
Share of other comprehensive income of
associates accounted for using the equity
method	461	-	461	-	461
Total of other comprehensive income	(\$216,038)	-	(\$216,038)	\$28,694	(\$187,344)

For the six-month period ended 30 June 2020:

				Income tax
				relating to
		Reclassification	Other	components of	Other
		adjustments	comprehensive	other	comprehensive
	Arising during	during the	income, before	comprehensive	income,
	the period	period	tax	income	net of tax
Not to be reclassified to profit or loss in
subsequent periods:
Unrealized (losses) from equity
instruments investments measured at fair
value through other comprehensive income	\$3,167	-	\$3,167	-	\$3,167
To be reclassified to profit or loss in
subsequent periods:
Exchange differences resulting from
translating the financial statements of a
foreign operation	(330,526)	-	(330,526)	\$41,706	(288,820)
Share of other comprehensive income of
associates accounted for using the equity
method	(3,140)	-	(3,140)	-	(3,140)
Total of other comprehensive income	(\$330,499)	-	(\$330,499)	\$41,706	(\$288,793)

(27)Income tax

A. The major components of income tax expense are as follows:

Income tax expense recognized in profit or loss

	For the three-month periods		For the six-month periods
		ended June 30	ended June 30
	2021	2020	2021	2020
Current income tax expense:	\$363,256	\$202,313	\$538,810	\$334,944
Deferred tax expense :
Deferred tax expense relating to
origination and reversal of	40,311	43,360	126,330	34,915
temporary differences
Total income tax expense	\$403,567	\$245,673	\$665,140	\$369,859

B. Income tax relating to components of other comprehensive income

	For the three-month periods ended June 30		For the six-month periods ended June 30
	2021	2020	2021	2020
Deferred tax expense (income):
Exchange differences resulting from
translating the financial statements of
foreign opreations	(\$16,582)	(\$28,694)	(\$29,257)	(\$41,706)
Income tax relating to components of other
comprehensive income	(\$16,582)	(\$28,694)	(\$29,257)	(\$41,706)

C. The assessment of income tax returns

The Company's income tax returns through 2018 have been assessed and approved by the TaxAuthority.

(28)Earnings per share

	For the six-month period ended June 30 2021
		Number of shares
		(shares in
	Amount	thousands)	Earnings per share
Basic earnings per share
Profit attributable to ordinary
equity holders of the Company
(in thousand NT\$)	\$1,335,860	353,310	\$3.78
Assumed conversion of all
dilutive potential ordinary shares
Employees' compensation	-	757
Diluted earnings per share
Profit attributable to ordinary
equity holders of the Company
(in thousand NT\$)	\$1,335,860	354,067	\$3.77

	For	the six-month period ended	June 30 2020
		Number of shares
		(shares in
	Amount	thousands)	Earnings per share
Basic earnings per share Profit attributable to ordinary equity holders of the Company (in thousand NT\$)	\$761,600	353,310	\$2.16
Assumed conversion of all
dilutive potential ordinary shares
Employees' compensation	-	811
Diluted earnings per share Profit attributable to ordinary equity holders of the Company
(in thousand NT\$)	\$761,600	354,121	\$2.15
	For the	three-month period ended	June 30 2021
		Number of shares
		(shares in
	Amount	thousands)	Earnings per share
Basic earnings per share Profit attributable to ordinary equity holders of the Company
(in thousand NT\$) Assumed conversion of all	\$794,972	353,310	\$2.25
dilutive potential ordinary shares
Employees' compensation	-	458
Diluted earnings per share Profit attributable to ordinary equity holders of the Company
(in thousand NT\$)	\$794,972	353,768	\$2.24
		For the three-month period ended	June 30 2020
		Number of shares
		(shares in
	Amount	thousands)	Earnings per share
Basic earnings per share Profit attributable to ordinary
equity holders of the Company (in thousand NT\$)	\$567,327	353,310	\$1.61
Assumed conversion of all
dilutive potential ordinary shares
Employees' compensation	-	619
Diluted earnings per share Profit attributable to ordinary
equity holders of the Company (in thousand NT\$)	\$567,327	353,929	\$1.60

7. Related party transactions

Key management personnel compensation

	For the three-month periods		For the six-month periods
	ended June 30 2021 2020		ended June 30
			2021	2020
Short-term employee benefits	\$7,407	\$5,226	\$13,953	\$11,702
Post-employment benefits	282	162	512	297
Total	\$7,689	\$5,388	\$14,465	\$11,999

8. Assets pledged as security

The following table lists assets of the Group pledged as security:

	Carrying amount
Assets pledged for security	30 Jun 2021	31 Dec 2020	30 Jun 2020
Financial assets measured at amortized cost	\$617,658	\$578,286	\$367,227
Land	88,235	88,235	88,235
Buildings	137,231	125,261	107,202
Right-of-use assets	27,134	28,037	-
Investment property	33,818	51,871	53,059
Refundable deposits	2,800	2,800	2,800
Total	\$906,876	\$874,490	\$618,523

9. Commitments and contingencies

• (1) Legal claim contingency None.
• (2) The Group signed the contract of the land-use-right in Vietnam for opreating purpose, which total price is approximate 200 million dollars and 100 million dollars has not paid until 30 June 2021.
• (3) Other

The Group guaranteed a deposit for customs in the amount of \$2,500 thousand and \$300 thousand from Bank of Taiwan and Taiwan Cooperative Bank, respectively.

10. Losses due to major disasters

None.

1. Significant subsequent events

None

1. Financial instruments

(1) Categories of financial instruments Financial assets

	30 Jun 2021	31 Dec 2020	30 Jun 2020
Financial assets at fair value through profit or loss:
Mandatorily measured at Fair value through profit or
loss	\$58,184	-	\$50,276
Financial assets at fair value through other
comprehensive income	\$94,190	\$101,449	\$93,247
Financial assets measured at amortized cost
Cash and cash equivalents (excluding cash on hand)	12,649,350	11,100,437	9,694,509
Financial assets measured at amortized cost	617,658	578,286	367,227
Amounts receivables	4,551,002	4,715,361	6,145,290
Subtotal	\$17,818,010	\$16,394,084	\$16,207,026
Total	\$17,970,384	\$16,495,533	\$16,350,549
Financial liabilities
	30 Jun 2021	31 Dec 2020	30 Jun 2020
Financial liabilities at amortized cost:
Short-term loans	\$3,606,559	\$2,452,594	\$2,962,231
Short-term notes payable	-	-	200,000
Amounts payables	17,703,980	16,691,271	15,419,178
Corporate bonds payable (including current portion)	2,400,000	2,400,000	-
Lease liabilities (including current portion)	3,007,838	3,784,618	5,598,333
Long-term loans (including current portion)	1,419,376	1,218,800	1,184,544
Total	\$28,137,753	\$26,547,283	\$25,364,286

(2) Financial risk management objectives and policies

The Group's principal financial risk management objective is to manage the market risk, credit risk and liquidity risk related to its operating activates. The Group identifies measures and manages the aforementioned risks based on the Group's policy and risk appetite.

The Group has established appropriate policies, procedures and internal controls for financial risk management. Before entering into significant transactions, due approval process by the Board of Directors must be carried out based on related protocols and internal control procedures. The Group complies with its financial risk management policies at all times.

(3) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of the changes in market prices. Market prices comprise currency risk, interest rate risk and other price risk (such as equity risk).

In practice, it is rarely the case that a single risk variable will change independently from other risk variable, there is usually interdependencies between risk variables. However the sensitivity analysis disclosed below does not take into account the interdependencies between risk variables.

A. Foreign currency risk

The Group's exposure to the risk of changes in foreign exchange rates relates primarily to the Group's operating activities (when revenue or expense are denominated in a different currency from the Group's functional currency) and the Group's net investments in foreign subsidiaries.

The Group has certain foreign currency receivables to be denominated in the same foreign currency with certain foreign currency payables, therefore forming a natural hedge. Furthermore, as net investments in foreign subsidiaries are for strategic purposes, they are not hedged by the Group.

The foreign currency sensitivity analysis of the possible change in foreign exchange rates on the Group's profit is performed on significant monetary items denominated in foreign currencies as at the end of the reporting period. The Group's foreign currency risk is mainly related to the volatility in the exchange rates for USD and RMB. The information of the sensitivity analysis is as follows:

• (a) When NTD strengthens/weakens against USD by 1%, the profit for the six-month periods ended 30 June 2021 and 2020 is decreased/increased by \$97,679 thousand and decreased/increased by \$17,194 thousand, respectively.
• (b) When NTD strengthens/weakens against RMB by 1%, the profit for the six-month periods ended 30 June 2021 and 2020 is increased/decreased by \$26,366 thousand and increased/decreased by \$22,821 thousand, respectively.
• B. Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group's exposure to the risk of changes in market interest rates relates primarily to bank borrowings with fixed interest rates and variable interest rates.

The Group manages its interest rate risk by having a balanced portfolio of fixed and variable loans and borrowings and entering into interest rate swaps. Hedge accounting does not apply to these swaps as they do not qualify for it.

The interest rate sensitivity analysis is performed on items exposed to interest rate risk as at the end of the reporting period. A change of 10 basis points of interest rate in a reporting period could cause the profit for the six-month periods ended 30 June 2021 and 2020 to decrease/ increase by \$4,431 thousand and \$1,471 thousand, respectively.

C. Equity price risk

The fair value of the Group's unlisted equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Group's unlisted equity securities are classified as financial assets at fair value through other comprehensive income.

The equity price sensitivity analysis is based on fair value changes as at the end of the reporting period. For the six-month periods ended 30 June 2021 and 2020, a change of 5% in the price classified as equity instruments investments measured at fair value through other comprehensive income could cause the other comprehensive income to increase/ decrease by \$4,710 thousand and \$4,662 thousand, respectively.

Please refer to Note 12.8 for sensitivity analysis information of other equity instruments or derivatives that are linked to such equity instruments whose fair value measurement is categorized under Level 3.

(4) Credit risk management

Credit risk is the risk that a counterparty will not meet its obligations under a contract, leading to a financial loss. The Group is exposed to credit risk from operating activities (primarily for accounts receivables and notes receivables) and from its financing activities, including bank deposits and other financial instruments.

Credit risk is managed by each business unit subject to the Group's established policy, procedures and control relating to credit risk management. Credit limits are established for all counter parties based on their financial position, rating from credit rating agencies, historical experience, prevailing economic condition and the Group's internal rating criteria etc. Certain counter parties' credit risk will also be managed by taking credit enhancing procedures, such as requesting for prepayment or insurance.

As of 30 June 2021, 31 December 2020 and 30 June 2020, amounts receivables from top ten customers represent 87.60%, 88.19% and 80.96% of the total accounts receivables of the Group, respectively. The credit concentration risk of other accounts receivables is insignificant.

Credit risk from balances with banks, fixed income securities and other financial instruments is managed by the Group's treasury in accordance with the Group's policy. The Group only transacts with counterparties approved by the internal control procedures, which are banks and financial institutions, companies and government entities with good credit rating. Consequently, there is no significant credit risk for these counter parties.

(5) Liquidity risk management

The Group's objective is to maintain a balance between continuity of funding and flexibility through the use of cash and cash equivalents and bank borrowings. The table below summarizes the maturity profile of the Group's financial liabilities based on the contractual undiscounted payments and contractual maturity. The payment amount includes the contractual interest. The undiscounted payment relating to borrowings with variable interest rates is extrapolated based on the estimated interest rate yield curve as of the end of the reporting period.

	< 1 year	2 to 3 years	4 to 5 years	> 5 years	Total
As of 30 June 2021
Loans	\$4,429,601	\$1,921,454	\$320,960	-	\$6,672,015
Corporate bonds payable	\$14,880	\$29,760	\$2,429,760	-	\$2,474,400
Amounts payables	\$17,685,982	-	-	-	\$17,685,982
Lease liabilities	\$231,246	\$439,106	\$407,416	\$629,332	\$1,707,100
As of 31 December 2020
Loans	\$3,768,323	\$1,982,061	\$493,270	-	\$6,243,654
Corporate bonds payable	\$5,360	-	\$2,400,000	-	\$2,405,360
Amounts payables	\$16,679,469	-	-	-	\$16,679,469
Lease liabilities	\$170,345	\$339,528	\$323,036	\$385,891	\$1,218,800
As of 30 June 2020
Loans	\$5,438,784	\$2,934,999	\$195,000	-	\$8,568,783
Short-term notes payable	\$200,000	-	-	-	\$200,000
Amounts payables	\$15,410,959	-	-	-	\$15,410,959
Lease liabilities	\$151,158	\$280,430	\$304,541	\$448,415	\$1,184,544

Non-derivative financial liabilities

(6) Reconciliation of liabilities arising from financing activities

	Short-term borrowings	Corporate bonds payable	Long-term borrowings		Guarantee deposits	Total liabilities from financing activities
As at 1 Jan 2021	\$2,452,594	\$2,400,000	\$3,784,618	\$1,218,800	\$9,377	\$9,865,389
Cash flows	1,159,766	-	(776,780)	(100,973)	37	282,050
Non-cash changes	(5,801)	-	-	301,549	-	295,748
As at 30 Jun 2021	\$3,606,559	\$2,400,000	\$3,007,838	\$1,419,376	\$9,414	\$10,443,187

Reconciliation of liabilities for the six-month period ended 30 June 2021:

Reconciliation of liabilities for the six-month period ended 30 June 2020:

	Short-term borrowings	Short-term notes payable	Long-term borrowings	Lease liabilities	Guarantee deposits	Total liabilities from financing activities
As at 1 Jan 2020	\$2,000,456	\$100,000	\$5,910,833	\$271,377	\$19,011	\$8,301,677
Cash flows	997,416	100,000	(312,500)	(106,218)	(11,184)	667,514
Non-cash changes	(35,641)	-	-	1,019,385	-	983,744
As at 30 Jun 2020	\$2,962,231	\$200,000	\$5,598,333	\$1,184,544	\$7,827	\$9,952,935

(7) Fair values of financial instruments

A. The methods and assumptions applied in determining the fair value of financial instruments:

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following methods and assumptions were used by the Group to measure or disclose the fair values of financial assets and financial liabilities:

• (a) The carrying amount of cash and cash equivalents, accounts receivables, accounts payable and other current liabilities approximate their fair value due to their short maturities.
• (b) Fair value of equity instruments without market quotations (including private placement of listed equity securities, unquoted public company and private company equity securities) are estimated using the market method valuation techniques based on parameters such as prices based on market transactions of equity instruments of identical or comparable entities and other relevant information (for example, inputs such as discount for lack of marketability, P/E ratio of similar entities and Price-Book ratio of similar entities).
• B. Fair value of financial instruments measured at amortized cost

The carrying amount of financial assets and financial liabilities measured at amortized cost approximate their fair value due to their short maturities.

C. Fair value measurement hierarchy for financial instruments

Please refer to Note 12.8 for fair value measurement hierarchy for financial instruments of the Group.

(8) Fair value measurement hierarchy

A. Fair value measurement hierarchy

All asset and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, based on the lowest level input that is significant to the fair value measurement as a whole. Level 1, 2 and 3 inputs are described as follows:

Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities that the entity can access at the measurement date

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

Level 3 – Unobservable inputs for the asset or liability

For assets and liabilities that are recognized in the financial statements on a recurring basis, the Group determines whether transfers have occurred between Levels in the hierarchy by reassessing categorization at the end of each reporting period.

B. Fair value measurement hierarchy of the Group's assets and liabilities

The Group does not have assets that are measured at fair value on a non-recurring basis. Fair value measurement hierarchy of the Group's assets and liabilities measured at fair value on a recurring basis is as follows:

As at 30 June 2021
	Level 1	Level 2	Level 3	Total
Financial assets:
Financial assets at fair value through
profit or loss	-	\$58,184	-	\$58,184
Financial assets at fair value through other
comprehensive income
Equity instrument measured at fair
value through other comprehensive
income	-	-	\$94,190	\$94,190
As at 31 December 2020
	Level 1	Level 2	Level 3	Total
Financial assets:
Financial assets at fair value through other
comprehensive income
Equity instrument measured at fair
value through other comprehensive
income	-	-	\$101,449	\$101,449
As at 30 June 2020
	Level 1	Level 2	Level 3	Total
Financial assets:
Financial assets at fair value through
profit or loss	-	\$50,276	-	\$50,276
Financial assets at fair value through other
comprehensive income
Equity instrument measured at fair
value through other comprehensive
income	-	-	\$93,247	\$93,247

C. Reconciliation for fair value measurements in Level 3 is as follows:

	Financial assets at fair value through
	other comprehensive income
As at 1 Jan 2021	\$101,449
Unrealized income from equity instruments
investments measured at fair value through other
comprehensive income	19,690
Disposals	(26,187)
Exchange differences	(762)
As at 30 Jun 2021	\$94,190

	Financial assets at fair value through
	other comprehensive income
As at 1 Jan 2020	\$111,835
Unrealized (losses) from equity instruments
investments measured at fair value through other
comprehensive income	3,167
Disposals	(18,197)
Exchange differences	(3,558)
As at 30 Jun 2020	\$93,247

D. Fair value measurement hierarchy of the Group's assets and liabilities not measured at fair value but for which the fair value is disclosed:

The fair value of long-term loans is determined using discounted cash flow model, based on the Company's current incremental borrowing rates of similar loans.

				Carrying
	Level 1	Level 2	Level 3	amount
As at 30 June 2021
Corporate bonds payable	-	\$2,400,000	-	\$2,400,000
Long-term borrowings (including current	-	\$3,007,838	-	\$3,007,838
portion with maturity less than 1 year)
As at 31 December 2020
Corporate bonds payable	-	\$2,400,000	-	\$2,400,000
Long-term borrowings (including current	-	\$3,784,618	-	\$3,784,618
portion with maturity less than 1 year)
As at 30 June 2020
Long-term borrowings (including current	-	\$5,598,333	-	\$5,598,333
portion with maturity less than 1 year)

(9) Significant assets and liabilities denominated in foreign currencies

Information regarding the significant assets and liabilities denominated in foreign currencies is listed below:

		30 June 2021
	Foreign
	currencies	Foreign exchange	NT\$
	(in thousands)	rate	(in thousands)
Financial assets
Monetary items:
USD	\$593,864	27.860	\$16,545,057
RMB	\$1,573,528	4.309	\$6,780,332
Financial liabilities
Monetary items:
USD	\$243,258	27.860	\$6,777,180
RMB	\$2,185,403	4.309	\$9,416,900
		31 December 2020
	Foreign
	currencies	Foreign exchange	NT\$
	(in thousands)	rate	(in thousands)
Financial assets
Monetary items:
USD	\$357,475	28.4800	\$10,180,897
RMB	\$1,621,133	4.3770	\$7,095,697
Financial liabilities
Monetary items:
USD	\$289,848	28.4800	\$8,254,859
RMB	\$2,368,871	4.3770	\$10,368,550
		30 June 2020
	Foreign
	currencies	Foreign exchange	NT\$
	(in thousands)	rate	(in thousands)
Financial assets
Monetary items:
USD	\$327,780	29.6300	\$9,712,109
RMB	\$1,695,100	4.1910	\$7,104,163
Financial liabilities
Monetary items:
USD	\$269,751	29.6300	\$7,992,710
RMB	\$2,239,624	4.1910	\$9,386,262

The Group's functional currency are various, and hence is not able to disclose the information of exchange gains and losses by each significant assets and liabilities denominated in foreign currencies. The foreign exchange gain was (\$25,334) thousand and \$31,690 thousand for the six-month periods ended 30 June 2021 and 2020, respectively.

(10)Capital management

The primary objective of the Group's capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximize shareholder value. The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust dividend payment to shareholders, returning capital to shareholders or issuing new shares.

13. Other disclosure

• (1) Information at significant transactions and on investees
• A. Financing provided to others for the six-month periods ended 30 June 2021: Please refer to Attachment 1.
• B. Endorsement/Guarantee provided to others for the six-month periods ended 30 June 2021: Please refer to Attachment 2.
• C. Securities held as of 30 June 2021: Please refer to Attachment 3.
• D. Individual securities acquired or disposed of with accumulated amount exceeding the lowers of NT\$300 million or 20% of the capital stock for the six-month periods ended 30 June 2021: None.
• E. Acquisition of individual real estate with amount exceeding the lower of NT\$300 million or 20% of the capital stock for the six-month periods ended 30 June 2021: None.
• F. Disposal of individual real estate with amount exceeding the lower of NT\$300 million or 20% of the capital stock for the six-month periods ended 30 June 2021: None.
• G. Related party transactions for purchases and sales amounts exceeding the lower of NT\$100 million or 20% of the capital stock for the six-month periods ended 30 June 2021: Please refer to Attachment 4.
• H. Receivables from related parties with amounts exceeding the lower of NT\$100 million or 20% of capital stock as of 30 June 2021: Please refer to Attachment 5.
• I. Direct or indirect significant influence or control over the investees for the six-month periods ended 30 June 2021 (excluding investments in China): Please refer to Attachment 6.
• J. Financial instruments and derivative transactions: None
• K. Others: Significant inter-company transactions during the reporting periods: Please refer to Attachment 8.
• (2) Information on investments in mainland China
• A. Information on investments in mainland China: Please refer to Attachment 7.
• B. Significant transactions with the investee companies in China directly or indirectly through the third area and the relevant prices, payment terms and unrealized gains and losses:
  • (a)Purchase, ending balance of related payables and their weightings: Please refer to Attachment 4. (b)Sales, the ending balance of related receivables and their weightings: Please refer to Attachment 4.
  • (c)Ending balance of endorsements/guarantees or collateral provided and the purposes: Please refer to Attachment 2.
  • (d)Transactions that have significant impact on the profit or loss of current period or the financial position: None.
• (3) Information of major shareholders: Please refer to Attachment 9.

14. Segment information

For management purposes, the Group is organized into business units based on their products and services and has two reportable operating segments as follows:

(1) General management segment:

The general management segment is responsible for the Group's operation planning and owns manufacturing, R&D and sales functions.

(2) Overseas segment: The overseas segment owns manufacturing and sales functions.

No operating segments have been aggregated to form the above reportable operating segments.

Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment.

Segment performance is evaluated based on operating profit or loss and is measured based on accounting policies consistent with those in the consolidated financial statements.

However, finance costs, financial benefits and income taxes are managed on a group basis and are not allocated to operating segments.

Transfer prices between operating segment are on an arm's length basis in a manner similar to transactions with third parties.

For the three-month period ended 30 June 2021

	Overseas	General management	Adjustment and elimination	Total
Revenue
External customer	\$4,062,800	\$8,685,981	-	\$12,748,781
Inter-segment (Note)	10,644,730	7,191,047	(\$17,835,777)	-
Total revenue	\$14,707,530	\$15,877,028	(\$17,835,777)	\$12,748,781
Segment profit	\$806,079	\$546,543	\$3,104	\$1,355,726

Note: Inter-segment revenues were eliminated on consolidation.

For the three-month period ended 30 June 2020

		General	Adjustment and
	Overseas	management	elimination	Total
Revenue
External customer	\$4,117,962	\$7,486,862	-	\$11,604,824
Inter-segment (Note)	7,909,326	5,566,154	(\$13,475,480)	-
Total revenue	\$12,027,288	\$13,053,016	(\$13,475,480)	\$11,604,824
Segment profit	\$279,132	\$573,080	\$13,693	\$865,905

Note: Inter-segment revenues were eliminated on consolidation.

For the six-month period ended 30 June 2021

		General	Adjustment and
	Overseas	management	elimination	Total
Revenue
External customer	\$7,194,716	\$16,152,861	-	\$23,347,577
Inter-segment (Note)	19,116,285	12,711,873	(\$31,828,158)	-
Total revenue	\$26,311,001	\$28,864,734	(\$31,828,158)	\$23,347,577
Segment profit	\$1,310,009	\$940,626	\$920	\$2,251,555

Note: Inter-segment revenues were eliminated on consolidation.

For the six-month period ended 30 June 2020

\$19,091,375
-
\$19,091,375
\$1,190,717

Note: Inter-segment revenues were eliminated on consolidation.

As of 30 June 2021, 31 December 2020 and 30 June 2020, the assets of reportable segment information were as follows:

		General	Adjustment and
	Overseas	management	elimination	Total
30 June 2021 Assets	\$38,817,371	\$24,069,696	(\$19,583,603)	\$43,303,464
31 December 2020 Assets	\$35,971,889	\$23,137,884	(\$18,433,537)	\$40,676,236
30 June 2020 Assets	\$32,914,370	\$19,214,936	(\$14,719,629)	\$37,409,677

FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2021

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

FINANCING PROVIDED TO OTHERS

TABLE 1

No			Financial Statement Account		Maximum Balance for the	Ending Balance			Nature of	Transaction Amounts	Reason for Financing	Allowance for		Collateral	Financing Limits for	Financing Company's
(Note 1)	Financing Company	Counter-party	(Note 2)	Related Party	Period (Note 3)	(Note 10)	Amount Actually Drawn	Interest Rate	Financing (Note 4)	(Note 5)	(Note 6)	Doubtful Accounts	Item	Value	Each Borrower	Total Financing Amount Limits	Note
1	ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD.	AVC PRECISION, CO., LTD.	Other receivables	Yes	\$366,267	\$366,267	\$344,722	3.00%	2	-	Operating capital	-	-	-	\$2,148,525	\$4,297,051 (Note 7)
						(CNY85,000 thousand) (CNY85,000 thousand) (CNY80,000 thousand)
2	AVC INTERNATIONAL (SAMOA) CO., LTD.	AVC PRECISION, CO., LTD.	Other receivables	Yes	\$278,600	\$139,300	\$139,300	3.00%	2	-	Operating capital	-	-	-	\$2,148,525	\$4,297,051 (Note 7)
					(USD10,000 thousand)	(USD5,000 thousand)	(USD5,000 thousand)
3	WUCHIDA INTERNATIONAL CO., LTD.	(JIASHAN)D-MAX ELECTRONICS CO.,LTD.	Other receivables	Yes	\$55,720	\$55,720	-	2.00%	2	-	Operating capital	-	-	-	\$2,148,525	\$4,297,051 (Note 7)
					(USD2,000 thousand)	(USD2,000 thousand)
4	D-MAX TECHNOLOGY CO., LTD.	WUCHIDA INTERNATIONAL CO., LTD.	Other receivables	Yes	\$69,650	\$69,650	\$69,650	2.00%	2	-	Operating capital	-	-	-	\$174,572		\$174,572 (Note 8)
					(USD2,500 thousand)	(USD2,500 thousand)	(USD2,500 thousand)
5	FOSITEK CORP.	FIRST DOME CORP TELECOM.,LTD.	Other receivables	Yes	\$317,160	\$317,160	\$306,460	3.00%	2	-	Operating capital	-	-	-	\$735,957		\$735,957 (Note 9)
						(NTD150,000 thousand) (NTD150,000 thousand) (USD11,000 thousand)
					(USD6,000 thousand)	(USD6,000 thousand)
6	ASIA VITAL COMPONENTS (CHINA) CO., LTD.	AVC PRECISION, CO., LTD.	Other receivables	Yes	\$215,451	\$215,451	\$215,451	3.00%	2	-	Operating capital	-	-	-	\$2,148,525	\$4,297,051 (Note 7)
						(CNY50,000 thousand) (CNY50,000 thousand) (CNY50,000 thousand)

Note 1: Companies are coded as follows:

(1) ASIA VITAL COMPONENTS Co., LTD. is coded "0".

(2) The investees are coded from "1" in the order presented in the table above.

Note 2:Receivables from affiliates and related parties, shareholder transactions, prepayments and temporary payments etc. are required to be disclosed in this field if they are financings provided to others.

Note 3:The maximum balance of financing provided to others for the year ended June 30, 2021.

Note 4:Nature of Financing are coded as follows:

(1) Business transaction is coded "1".

(2) Short-term financing is coded "2".

Note 5:If nature of financing is business transaction, the amount of transaction should be disclosed.

Note 6:With respect to short-term financing, the reasons of financing and the purpose of use by the counter-party shall be specified, such as loan repayment, equipment acquisition or operating capital.

Note 7: For foreign companies of which the Company holds, directly and indirectly, 100% of the voting shares, the financing provided to any single entity shall not exceed 20% of the net worth. Total financing shall not exceed 40% of the net worth.

Note 8: D-MAX TECHNOLOGY CO., LTD. : The financing provided to any single entity shall not exceed 40% of the net worth. Total financing shall not exceed 40% of the net worth.

Note 9: FOSITEK CORP. : The financing provided to any single entity shall not exceed 40% of the net worth. Total financing shall not exceed 40% of the net worth.

Note 10:If public companies, pursuant to Paragraph 1, Article 14 of Regulations Governing Loaning of Funds and Making of Endorsements / Guarantees by Public Companies, resolve each individual lending at the board meetings, the amounts resolved (before any drawing) shall be the publicly-announced balance to disclose the risk they assume; provided however,

if any repayment is made subsequently, the outstanding balance after such repayment shall be disclosed to reflect the risk adjusted. If public companies, pursuant to Paragraph 2, Article 14 of the same Regulations, authorize the chairperson by board resolution, within a certain monetary limit and a period not to exceed one year,

to give loans in instalments or to make a revolving credit line available, the amount resolved shall be the publicly-announced balance. Although repayment may be made subsequently, as drawings are likely to happen, the amount of financing resolved by the board shall be recorded as the publicly-announced balance.

Note 11:All the above transactions were eliminated on consolidation.

FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2021

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

ENDORSEMENT/GUARANTEE PROVIDED TO OTHERS

TABLE 2

No		Guaranteed Party		Limits on Endorsement/Guarantee Maximum Balance for the		Ending Balance Amount Actually Drawn		Amount of Endorsement/	Ratio of Accumulated Endorsement/Guarantee to	Maximum Endorsement/	Endorsement provided by	Endorsement provided by	Endorsement provided to	Note
(Note 1)	Endorsement/Guarantee Provider	Name	Nature of Relationship (Note 2)	Amount Provided to Each Guaranteed Party (Note 3&4)	Period (Note 5)	(Note 6)	(Note 7)	Guarantee secured by Properties	Net Equity per Latest Financial Statements	Guarantee Amount Allowed (Note 3&4)	parent company to subsidiaries (Note 8)	subsidiaries to parent company (Note 8)	subsidiaries in China (Note 8)
0	ASIA VITAL COMPONENTS CO.,LTD	MERIT TRADING CORPORATION	2	\$10,742,627	\$501,480	\$385,861	-	-	3.59%	\$16,113,941	Y	N	N	(Note 3)
					(USD18,000 thousand)	(USD13,850 thousand)
0	ASIA VITAL COMPONENTS CO.,LTD	AVC INTERNATIONAL (SAMOA) CO., LTD.	2	\$10,742,627	\$1,142,260	\$1,142,260	-	-	10.63%	\$16,113,941	Y	N	N	(Note 3)
					(USD41,000 thousand)	(USD41,000 thousand)
0	ASIA VITAL COMPONENTS CO.,LTD	AVC PRECISION, CO., LTD.	2	\$10,742,627	\$580,232	\$580,232	\$278,600	-	5.40%	\$16,113,941	Y	N	Y	(Note 3)
					(USD10,000 thousand)		(USD10,000 thousand) (USD10,000 thousand)
						(CNY70,000 thousand) (CNY70,000 thousand)
0	ASIA VITAL COMPONENTS CO.,LTD	AVC OPTICS (WUHAN) CORP.	2	\$10,742,627	\$696,500	\$696,500	\$557,200	-	6.48%	\$16,113,941	Y	N	Y	(Note 3)
					(USD25,000 thousand)		(USD25,000 thousand) (USD20,000 thousand)
0	ASIA VITAL COMPONENTS CO.,LTD	ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD.	2	\$10,742,627	\$1,413,431	\$1,413,431	\$835,800	-	13.16%	\$16,113,941	Y	N	Y	(Note 3)
					(USD43,000 thousand)		(USD43,000 thousand) (USD30,000 thousand)
						(CNY50,000 thousand) (CNY50,000 thousand)

Note 1:Companies are coded as follows:

(1) ASIA VITAL COMPONENTS Co., LTD. is coded "0".

(2) The investees are coded from "1" in the order presented in the table above.

Note 2:The relationships between endorsement/guarantee providers and guaranteed parties are categorized into the following types :

(1) A company that has a business relationship with AVC.

(2) A subsidiary in which AVC holds directly over 50% of common equity interest.

(3) An investee in which AVC and its subsidiaries jointly hold over 50% of common equity interest.

(4) A parent company that holds directly over 90% or indirectly over 90% through a subsidiary of the company's common equity interest.

(5) A company that has provided guarantees to AVC, and vice versa, due to contractual requirements.

(6) A company in which AVC jointly invests with other shareholders, and for which AVC has provided endorsement/guarantee in proportion to its shareholding percentage.

(7) Companies in the same industry provide among themselves joint and several security for a perfomance guarantee of a sales contract for pre-construction homes pursunat to the Consumer Protection Act for each other.

Note 3:ASIA VITAL COMPONENTS CO.,LTD.:The aggregate amount of endorsements/guarantees for any single entity shall not exceed 20% of the Company's net worth, and the aggregate amount of endorsements/guarantees for any single overseas associated company shall not exceed 100% of the Company's equity net worth.

The overall amount of guarantees/endorsements shall not exceed 150% of the Company's equity net worth.

Note 4:ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD., ASIA VITAL COMPONENTS (CHINA) CO., LTD., ASIA VITAL COMPONENTS (CHENGDU) CO., LTD., AVC OPTICS (WUHAN) CORP., ASIA VITAL COMPONENTS (DONGGUAN) CO., LTD., AVC PRECISION, CO., LTD. :

The amount of guarantees/endorsements provided to any single entity shall not exceed USD200 million dollars.

FOSITEK CORP.:The aggregate amount of endorsements/guarantees for any single overseas associated company shall not exceed 30% of the Company's equity net worth. The overall amount of guarantees/endorsements shall not exceed 50% of the Company's equity net worth.

Note 5 : Maximum balance of endorsements/guarantees provided to others for current period.

Note 6 : The maximum balance for the period and ending balance represent the amounts approved by the Board Directors.

Note 7 : The company which endorsements/guarantees by AVC should disclosed the amount actually drawn within ending balance.

Note 8 : Public company provided endorsements/guarantees to subsidiary or subsidiary provided endorsements/guarantees to public company or provided endorsements/guarantees which located in CHINA area coded "Y".

( Continued )

FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2021

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

ENDORSEMENT/GUARANTEE PROVIDED TO OTHERS

No (Note 1)	Endorsement/Guarantee Provider	Guaranteed Party Name	Nature of Relationship	Limits on Endorsement/Guarantee Amount Provided to Each Guaranteed Party (Note 3&4)	Maximum Balance for the Period (Note 5)	Ending Balance (Note 6)	Amount Actually Drawn (Note 7)	Amount of Endorsement/ Guarantee secured by Properties	Ratio of Accumulated Endorsement/Guarantee to Net Equity per Latest Financial Statements	Maximum Endorsement/ Guarantee Amount Allowed (Note 3&4)	Endorsement provided by parent company to subsidiaries	Endorsement provided by subsidiaries to parent company	Endorsement provided to subsidiaries in China (Note 8)	Note
			(Note 2)								(Note 8)	(Note 8)
1	ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD.	ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD.	4	\$5,572,000	\$430,902	-	-	-	-	\$5,572,000	N	N	Y	(Note 4)
	ASIA VITAL COMPONENTS (CHINA) CO., LTD. ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD. AVC PRECISION, CO., LTD.	AVC PRECISION, CO., LTD.			(USD200,000 thousand) (CNY100,000 thousand)					(USD200,000 thousand)
1	ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD.	ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD.	4	\$5,572,000	\$511,697	\$511,697	\$212,169	-	6.30%	\$5,572,000	N	N	Y	(Note 4)
	ASIA VITAL COMPONENTS (CHINA) CO., LTD. AVC PRECISION, CO., LTD.				(USD200,000 thousand) (CNY118,750 thousand) (CNY118,750 thousand)		(CNY49,238 thousand)			(USD200,000 thousand)
1	ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD.	ASIA VITAL COMPONENTS (CHINA) CO., LTD.	4	\$5,572,000	\$215,451	\$215,451	-	-	7.38%	\$5,572,000	N	N	Y	(Note 4)
				(USD200,000 thousand)		(CNY50,000 thousand) (CNY50,000 thousand)				(USD200,000 thousand)
1	ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD.	AVC PRECISION, CO., LTD.	4	\$5,572,000	\$764,852	\$764,852	\$268,774	\$420,130	8.48%	\$5,572,000	N	N	Y	(Note 4)
	ASIA VITAL COMPONENTS (CHINA) CO., LTD. ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD.				(USD200,000 thousand) (CNY177,500 thousand) (CNY177,500 thousand)			(CNY62,375 thousand) (CNY97,500 thousand)		(USD200,000 thousand)
1	ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD.	ASIA VITAL COMPONENTS (CHINA) CO., LTD.	4	\$5,572,000	\$646,354	\$646,354	\$477,899	-	8.77%	\$5,572,000	N	N	Y	(Note 4)
	ASIA VITAL COMPONENTS (CHINA) CO., LTD.	ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD.			(USD200,000 thousand) (CNY150,000 thousand) (CNY150,000 thousand)		(CNY110,907 thousand)			(USD200,000 thousand)
1	ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD.	ASIA VITAL COMPONENTS (CHINA) CO., LTD.	4	\$5,572,000	\$775,624	\$775,624	\$393,861	-	17.94%	\$5,572,000	N	N	Y	(Note 4)
	ASIA VITAL COMPONENTS (CHENGDU) CO., LTD.				(USD200,000 thousand) (CNY180,000 thousand) (CNY180,000 thousand)		(CNY91,404 thousand)			(USD200,000 thousand)
1	ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD.	AVC OPTICS (WUHAN) CORP.	4	\$5,572,000	\$646,354	\$646,354	\$33,765	-	22.13%	\$5,572,000	N	N	Y	(Note 4)
					(USD200,000 thousand) (CNY150,000 thousand) (CNY150,000 thousand)		(CNY7,836 thousand)			(USD200,000 thousand)
2	ASIA VITAL COMPONENTS (CHINA) CO., LTD.	ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD.	4	\$5,572,000	\$517,083	\$517,083	\$341,419	-	5.98%	\$5,572,000	N	N	Y	(Note 4)
	ASIA VITAL COMPONENTS (CHENGDU) CO., LTD. AVC OPTICS (WUHAN) CORP.				(USD200,000 thousand) (CNY120,000 thousand) (CNY120,000 thousand)		(CNY79,233 thousand)			(USD200,000 thousand)
2	ASIA VITAL COMPONENTS (CHINA) CO., LTD.	ASIA VITAL COMPONENTS (CHENGDU) CO., LTD.	4	\$5,572,000	\$344,722	\$344,722	\$277,368	-	7.75%	\$5,572,000	N	N	Y	(Note 4)
				(USD200,000 thousand)		(CNY80,000 thousand) (CNY80,000 thousand)	(CNY64,369 thousand)			(USD200,000 thousand)
3	FOSITEK CORP.	FIRST DOME CORP TELECOM.,LTD.	2	\$551,967	\$55,720	\$55,720	-	-	3.03%	\$919,946	N	N	Y	(Note 4)
					(USD2,000 thousand)	(USD2,000 thousand)

Note 1:Companies are coded as follows:

(1) ASIA VITAL COMPONENTS Co., LTD. is coded "0".

(2) The investees are coded from "1" in the order presented in the table above.

Note 2:The relationships between endorsement/guarantee providers and guaranteed parties are categorized into the following types :

(1) A company that has a business relationship with AVC.

(2) A subsidiary in which AVC holds directly over 50% of common equity interest.

(3) An investee in which AVC and its subsidiaries jointly hold over 50% of common equity interest.

(4) A parent company that holds directly over 90% or indirectly over 90% through a subsidiary of the company's common equity interest.

(5) A company that has provided guarantees to AVC, and vice versa, due to contractual requirements.

(6) A company in which AVC jointly invests with other shareholders, and for which AVC has provided endorsement/guarantee in proportion to its shareholding percentage.

(7) Companies in the same industry provide among themselves joint and several security for a perfomance guarantee of a sales contract for pre-construction homes pursunat to the Consumer Protection Act for each other.

Note 3:ASIA VITAL COMPONENTS CO.,LTD.:The aggregate amount of endorsements/guarantees for any single entity shall not exceed 20% of the Company's net worth, and the aggregate amount of endorsements/guarantees for any single overseas associated company shall not exceed 100% of the Company's equity net worth.

The overall amount of guarantees/endorsements shall not exceed 150% of the Company's equity net worth.

Note 4:ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD., ASIA VITAL COMPONENTS (CHINA) CO., LTD., ASIA VITAL COMPONENTS (CHENGDU) CO., LTD., AVC OPTICS (WUHAN) CORP., ASIA VITAL COMPONENTS (DONGGUAN) CO., LTD.,AVC PRECISION, CO., LTD. :

The amount of guarantees/endorsements provided to any single entity shall not exceed USD200 million dollars.

FOSITEK CORP.:The aggregate amount of endorsements/guarantees for any single overseas associated company shall not exceed 30% of the Company's equity net worth. The overall amount of guarantees/endorsements shall not exceed 50% of the Company's equity net worth.

Note 5 : Maximum balance of endorsements/guarantees provided to others for current period.

Note 6 : The maximum balance for the period and ending balance represent the amounts approved by the Board Directors.

Note 7 : The company which endorsements/guarantees by AVC should disclosed the amount actually drawn within ending balance.

Note 8 : Public company provided endorsements/guarantees to subsidiary or subsidiary provided endorsements/guarantees to public company or provided endorsements/guarantees which located in CHINA area coded "Y".

FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2021

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

MARKETABLE SECURITIES HELD (EXCLUDING INVESTMENTS IN SUBSIDIARIES, ASSOCIATES AND JOINTLY CONTROLLED ENTITIES)

TABLE 3

				June 30, 2021
Name of Held Company	Type and name of Marketable Securities	Relationship with the Company	Financial Statement Account	Shares (In Thousands)	Carrying Amount	Percentage of Ownership	Market Value
ASIA VITAL COMPONENTS CO.,LTD	Not listed (OTC) stocks
	SENTELIC CORPORATION	-	Financial assets measured at fair value through other comprehensive income, noncurrent	79	\$375	0.26%	\$375
	RTR-TECH TECHNOLOGY CO., LTD.	-	Financial assets measured at fair value through other comprehensive income, noncurrent	14,000	-	19.42%	-
	APTOS TECHNOLOGY INC.	-	Financial assets measured at fair value through other comprehensive income, noncurrent	1,124	-	1.27%	-
	UBIQCONN TECHNOLOGY, INC.	-	Financial assets measured at fair value through other comprehensive income, noncurrent	2,500	-	6.10%	-
MERIT TRADING CORPORATION	Not listed (OTC) stocks FURUKAWA ELECTRIC (SHENZHEN) CO., LTD.	Other related parties	Financial assets measured at fair value through other comprehensive income, noncurrent	(Note)	\$84,414	9.06%	\$84,414
MACE TECH CORP.	Not listed (OTC) stocks SHENG-SHING CORP.	-	Financial assets measured at fair value through other comprehensive income, noncurrent	703	\$9,401	14.06%	\$9,401
ASIA VITAL COMPONENTS (CHINA) CO., LTD.	Not listed (OTC) stocks SHENZHEN TIMELINK TECHNOLOGY CO., LTD.	-	Financial assets measured at fair value through other comprehensive income, noncurrent	2,273	-	10.80%	-

Note:None amount of shares is issued publicly by Limited Company.

FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2021

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

RELATED PARTY TRANSACTIONS WITH PURCHASE OR SALES AMOUNT OF AT LEAST NT\$100 MILLION OR 20% OF THE PAID-IN CAPITAL

TABLE 4

			Transaction Details				Abnormal Transaction	Notes/Accounts Payable or Receivable
Company Name	Related Party	Nature of Relationships	Purchases/ Sales	Amount	Percentage to Total	Collection/ Payment Terms	Unit Price	Collection/ Payment Terms	Ending Balance	Percentage to Total	Note
ASIA VITAL COMPONENTS CO., LTD AVC INTERNATIONAL (SAMOA) CO., LTD.		Subsidiary	(Purchases)	(\$5,673,001)	(42%)	Net 60 days from the end of the month of when invoice is issued by T/T	N/A	N/A	(\$2,763,636)	(34%)
ASIA VITAL COMPONENTS CO., LTD MERIT TRADING CORPORATION		Subsidiary	(Purchases)	(\$4,349,361)	(33%)	Net 90 days from the end of the month of when invoice is issued by T/T	N/A	N/A	(\$3,216,617)	(40%)
ASIA VITAL COMPONENTS CO., LTD TONBRIDGE INVESTMENTS LTD.		Subsidiary	(Purchases)	(\$863,253)	(6%)	Net 60 days from the end of the month of when invoice is issued by T/T	N/A	N/A	(\$484,494)	(6%)
	ASIA VITAL COMPONENTS CO., LTD ASIA VITAL COMPONENTS (CHENGDU) CO., LTD.	Subsidiary	(Purchases)	(\$904,504)	(7%)	Net 90 days from the end of the month of when invoice is issued by T/T	N/A	N/A	(\$638,083)	(8%)
	ASIA VITAL COMPONENTS CO., LTD ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD.	Subsidiary	(Purchases)	(\$258,716)	(2%)	Net 75 days from the end of delivery month of when invoice is issued by T/T	N/A	N/A	(\$174,759)	(2%)
ASIA VITAL COMPONENTS CO., LTD WUCHIDA INTERNATIONAL CO., LTD.		Subsidiary	(Purchases)	(\$432,501)	(3%)	Net 30 days from the end of the month of when invoice is issued by T/T	N/A	N/A	(\$102,727)	(1%)
ASIA VITAL COMPONENTS CO., LTD JADS CORPORATION (HK) LTD.		Subsidiary	(Purchases)	(\$252,354)	(2%)	Net 90 days from the end of the month of when invoice is issued by T/T	N/A	N/A	(\$170,622)	(2%)
ASIA VITAL COMPONENTS CO., LTD AVC AMERICA, INC.		Subsidiary	Sales	\$198,415	1%	Net 60 days from the end of the month of when invoice is issued by T/T	N/A	N/A	\$82,886	3%

( Continued )

FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2021

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

RELATED PARTY TRANSACTIONS WITH PURCHASE OR SALES AMOUNT OF AT LEAST NT\$100 MILLION OR 20% OF THE PAID-IN CAPITAL

TABLE 4-1

				Transaction Details				Abnormal Transaction		Notes/Accounts Payable or Receivable
Company Name	Related Party	Nature of Relationships	Purchases/ Sales	Amount	Percentage to Total	Collection/ Payment Terms	Unit Price	Collection/ Payment Terms	Ending Balance	Percentage to Total	Note
AVC INTERNATIONAL (SAMOA) CO., LTD.	ASIA VITAL COMPONENTS CO., LTD	The company's ultimate parent	Sales	\$5,673,001	91%	Net 60 days from the end of the month of when invoice is issued by T/T	N/A	N/A	\$2,763,636	86%
MERIT TRADING CORPORATION	ASIA VITAL COMPONENTS CO., LTD	The company's ultimate parent	Sales	\$4,349,361	88%	Net 90 days from the end of the month of when invoice is issued by T/T	N/A	N/A	\$3,216,617	91%
TONBRIDGE INVESTMENTS LTD. LTD.	ASIA VITAL COMPONENTS CO., LTD	The company's ultimate parent	Sales	\$863,253	84%	Net 60 days from the end of the month of when invoice is issued by T/T	N/A	N/A	\$484,494	79%
ASIA VITAL COMPONENTS (CHENGDU) CO., LTD.	ASIA VITAL COMPONENTS CO., LTD	The company's ultimate parent	Sales	\$904,504	67%	Net 90 days from the end of the month of when invoice is issued by T/T	N/A	N/A	\$638,083	68%
ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD.	ASIA VITAL COMPONENTS CO., LTD	The company's ultimate parent	Sales	\$258,716	5%	Net 75 days from the end of delivery month of when invoice is issued by T/T	N/A	N/A	\$174,759	5%
WUCHIDA INTERNATIONAL CO., LTD.	ASIA VITAL COMPONENTS CO., LTD	The company's ultimate parent	Sales	\$432,501	91%	Net 30 days from the end of the month of when invoice is issued by T/T	N/A	N/A	\$102,727	85%
JADS CORPORATION (HK) LTD. LTD.	ASIA VITAL COMPONENTS CO., LTD	The company's ultimate parent	Sales	\$252,354	97%	Net 90 days from the end of the month of when invoice is issued by T/T	N/A	N/A	\$170,622	94%
AVC AMERICA, INC.	ASIA VITAL COMPONENTS CO., LTD	The company's ultimate parent	(Purchases)	(\$198,415)	(31%)	Net 60 days from the end of the month of when invoice is issued by T/T	N/A	N/A	(\$82,886)	(36%)

Note:All the above transactions were eliminated on consolidation.

FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2021

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

RECEIVABLES FROM RELATED PARTIES OF AT LEAST NT\$100 MILLION OR 20% OF THE PAID-IN CAPITAL

					Overdue			Allowance for
Company Name	Ending Balance Related Party Nature of Relationships		Turnover Ratio (times)			Amounts Received in Subsequent Periods	Doubtful Accounts
			(Note 3)		Amount	Action Taken
AVC INTERNATIONAL (SAMOA) CO., LTD.	ASIA VITAL COMPONENTS CO., LTD	The company's ultimate parent	\$2,763,636	1.96	-	(Note 2)	\$778,669	(Note 1)
MERIT TRADING CORPORATION	ASIA VITAL COMPONENTS CO., LTD	The company's ultimate parent	\$3,216,617	1.40	-	(Note 2)	\$1,112,431	(Note 1)
TONBRIDGE INVESTMENTS LTD.	ASIA VITAL COMPONENTS CO., LTD	The company's ultimate parent	\$484,494	1.89	-	(Note 2)	\$175,638	(Note 1)
ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD.	ASIA VITAL COMPONENTS CO., LTD	The company's ultimate parent	\$174,759	1.17	-	(Note 2)	\$38,815	(Note 1)
ASIA VITAL COMPONENTS (CHENGDU) CO., LTD.	ASIA VITAL COMPONENTS CO., LTD	The company's ultimate parent	\$638,083	1.82	-	(Note 2)	\$136,790	(Note 1)
WUCHIDA INTERNATIONAL CO., LTD.	ASIA VITAL COMPONENTS CO., LTD	The company's ultimate parent	\$102,727	2.74	-	(Note 2)	\$76,997	(Note 1)
JADS CORPORATION (HK) LTD.	ASIA VITAL COMPONENTS CO., LTD	The company's ultimate parent	\$170,622	1.05	-	(Note 2)	\$32,191	(Note 1)

Note 1:The preparation of consolidated statements does not require recording the allowance for doubtful accounts.

Note 2:The Company balances its accounts regularly and writes off receivables against payables.

Note 3:All the above transactions were eliminated on consolidation.

FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2021

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

NAMES, LOCATIONS AND RELATED INFORMATION OF INVESTEE COMPANIES (Not including investment in Mainland China)

					Initial Investment		Investment as of June 30, 2021
Investor Company	Investee Company	Address	Main businesses and products		Ending balance Beginning balance Number of shares	(thousand)	Percentage of ownership (%)	Carrying amount	Net income (loss) of investee company	Investment income (loss) recognized	Note
	ASIA VITAL COMPONENTS CO., LTD AVC INTERNATIONAL CO., LTD.-B.V.I.	Vistra Corporate Services Centre, Wickhams Cay Ⅱ Road Town Tortola VG1110 Virgin Islands, British	Investment holding	\$5,147,294	\$5,147,294	16	100.00%	\$8,461,814	\$406,220	\$367,789
	CHIHUNG INTERNATIONAL LTD.	Vistra Corporate Services Centre, Ground Floor NPF Building, Beach Road, Apia, Samoa	Investment holding	\$1,040,647	\$1,040,647	32,770	100.00%	\$4,692,364	\$224,088	\$230,002
	MERIT TRADING CORPORATION	Vistra Corporate Services Centre, Ground Floor NPF Building, Beach Road ,Apia, Samoa	Trade	\$29,088	\$29,088	892	100.00%	\$179,302	\$15,558	\$15,728
	RAYNEY INTERNATIONAL LTD.	Vistra Corporate Services Centre, Ground Floor NPF Building, Beach Road, Apia, Samoa	Trade	\$78,950	\$78,950	2,400	100.00%	\$115,290	(\$5,517)	(\$5,517)
	AVC AMERICA, INC.	48501 Warm Springs Blvd., Suite #109 Fremont, CA 94539-7750	Trade	\$91,903	\$91,903	41	100.00%	\$122,816	\$10,499	\$10,499
	AVC INTERNATIONAL (SAMOA) CO., LTD.	Vistra Corporate Services Centre, Ground Floor NPF Building, Beach Road, Apia, Samoa	Trade	\$10,157	\$10,157	300	100.00%	\$55,965	(\$501)	(\$2,189)
	JADS CORPORATION (HK) LTD.	FLAT/RM 6 16/F WORKINGBOND COMMERCIAL CENTRE 162-164 PRINCE EDWARD RD WEST MONGKOK KL	Trade	\$327	\$327	10	100.00%	\$23,160	\$166	\$8,780
	ZIMAG TECHNOLOGY CO., INC.	No.2-2, Aly. 98, Ln. 800, Zhongshan S. Rd., Yangmei Dist., Taoyuan City 326, Taiwan (R.O.C.)	Manufacture, process and sales of molds and aluminum products	\$45,000	\$45,000	2,700	9.53%	\$44,191	\$38,195	\$3,689
	AVC INTERNATIONAL CO., LTD.-SAMOA	Vistra Corporate Services Centre, Ground Floor NPF Building, Beach Road, Apia, Samoa	Trade	\$32,120	\$32,120	1,000	100.00%	\$256,898	(\$26,335)	(\$26,335)
	FOSITEK CORP.	8F.-4, No.24, Wuquan 2nd Rd., Xinzhuang Dist., New Taipei City 242, Taiwan (R.O.C.)	Sales and manufacture of electronic parts, computers and related products	\$211,099	\$99,118	8,697	19.25%	\$354,179	\$311,672	\$61,116
	HUNG YE INVESTMENT CO., LTD.	7F.-3, No.24, Wuquan 2nd Rd., Xinzhuang Dist., New Taipei City 242, Taiwan (R.O.C.)	Investment holding	\$60,000	\$60,000	6,000	100.00%	\$5,384	(\$11)	(\$11)
	D-MAX TECHNOLOGY CO., LTD.	7F.-3, No.24, Wuquan 2nd Rd., Xinzhuang Dist., New Taipei City 242, Taiwan (R.O.C.)	Sales and manufacture of electronic parts and related products	\$201,035	\$201,035	28,500	100.00%	\$431,650	\$45,599	\$40,819
	AVC EUROPE TECHNOLOGY GMBH	Bismarckstraße 100 (c/o Regus Mönchengladbach City Center), 41061 Mönchengladbach	Trade	\$9,050	\$9,050	250	100.00%	\$8,422	\$69	\$69
	AVC TECHNOLOGY (VIETNAM) COMPANY LIMITED	Lot CN05, Dong Van III Supporting Industrial Zone, Dong Van Ward, Duy Tien Town, Ha Nam Province, Vietnam	Sales and manufacture of electronic	\$430,117	\$253,411	(Note)	100.00%	\$417,900	-	-

Note:None amount of shares is issued publicly by Limited Company.

( Continued )

FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2021

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

NAMES, LOCATIONS AND RELATED INFORMATION OF INVESTEE COMPANIES (Not including investment in Mainland China)

					Initial Investment		Investment as of June 30, 2021		Net income (loss)
Investor Company	Investee Company	Address	Main businesses and products		Ending balance Beginning balance	Number of shares (thousand)	Percentage of ownership (%)	Carrying amount	of investee company	Investment income (loss) recognized	Note
AVC INTERNATIONAL CO., LTD.-B.V.I.	MACE TECH CORP.	Vistra Corporate Services Centre,	Trade	\$319,776	\$319,776	11,068	100.00%	\$1,930,256	\$123,654	\$123,654
		Wickhams Cay Ⅱ Road Town
		Tortola VG1110 Virgin Islands,British
	AVC OPTICS CORP.	P.O. Box 31119 Grand Pavilion,	Investment holding	\$3,128,775	\$3,128,775	100,000	100.00%	\$2,789,178	\$90,097	\$90,097
		Hibiscus Way, 802 West Bay Road,
		Grand Cayman, KY1-1205 Cayman Islands.
CHIHUNG INTERNATIONAL LTD.	TONBRIDGE INVESTMENTS LTD.	Vistra Corporate Services Centre, Ground Floor	Investment holding	\$101,772	\$101,772	3,000	100.00%	\$222,865	(\$4,880)	(\$4,880)
		NPF Building, Beach Road, Apia, Samoa
HUNG YE INVESTMENT CO., LTD.	KEY APPLICATION TECHNOLOGY CO., LTD.	7F., No.147, Xianzheng 9th Rd., Zhubei City,	Sales and manufacture of electronic	\$15,300	\$15,300	1,115	16.31%	-	\$14,025	-
		Hsinchu County 302, Taiwan (R.O.C.)	products
D-MAX TECHNOLOGY CO., LTD.	WUCHIDA INTERNATIONAL CO., LTD.	Vistra Corporate Services Centre, Ground Floor	Investment holding	\$132,004	\$132,004	4,000	100.00%	\$354,340	\$57,640	\$57,640
		NPF Building, Beach Road, Apia, Samoa
WUCHIDA INTERNATIONAL CO., LTD.	D-MAX INTERNATIONAL CO., LIMITED	FLAT/RM6 16F	Investment holding	\$132,004	\$132,004	4,000	100.00%	\$304,977	\$35,060	\$34,971
		WORKINGBOND COMMERCIAL CENTRE
		162-164 PRINCE EDWARD ROAD W
		MONG KOK KL
FOSITEK CORP.	MARKETHILL INVESTMENTS LTD.	Vistra Corporate Services Centre, Ground Floor	Investment holding	\$390,575	\$390,575	13,200	100.00%	\$1,044,909	\$317,793	\$309,522
		NPF Building, Beach Road, Apia, Samoa

ASIA VITAL COMPONENTS CO. , LTD AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2021 (Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

INFORMATION ON INVESTMENT IN MAINLAND CHINA

Investor Company	Investee Company	Main Businesses and Products	Total Amount of Paid-in Capital	Method ofInvestment (Note 1)	Accumulated Outflow of Investment from Taiwan as of January 1, 2021	Investment Flows		Accumulated Outflow of Investment from Taiwan as of June 30, 2021	Percentage of Ownership (Direct or Indirect Investment)	Profits/ Losses of the Investee Company	Share of Profits/Losses	Carrying Amount as of June 30, 2021	Accumulated Inward Remittance of Earnings as of June 30, 2021
						Outflow	Inflow
ASIA VITAL COMPONENTS CO. , LTD	ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD.	Sales and manufacture of computers related products and computer cooling fans		\$642,719 (2) AVC INTERNATIONAL CO., LTD.-B.V.I.	\$642,719	-	-	\$642,719	100.00%	\$148,283	\$148,283	\$2,920,550	-
ASIA VITAL COMPONENTS CO. , LTD	FURUKAWA AVC ELECTRONICS (SUZHOU) CO., LTD.	Sales and manufacture of reflow machines, solder paste printers and notebook thermal modules		\$267,247 (2) RAYNEY INTERNATIONAL LTD.	\$54,176	-	-	\$54,176	30.00%	(\$20,489)	(\$6,147)	\$84,618	-
ASIA VITAL COMPONENTS CO. , LTD	ASIA VITAL COMPONENTS (SHANGHAI) CO.,LTD.	Sales and manufacture of notebook thermal modules		\$200,073 (2) CHIHUNG INTERNATIONAL LTD.	\$101,772	-	-	\$101,772	100.00%	(\$4,938)	(\$4,938)	\$221,095	-
ASIA VITAL COMPONENTS CO. , LTD	ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD.	Sales and manufacture of computers, electronic products and related parts		\$514,105 (2) AVC INTERNATIONAL CO., LTD.-B.V.I.	\$319,776	-	-	\$319,776	100.00%	\$126,042	\$126,285	\$1,646,989	-
ASIA VITAL COMPONENTS CO. , LTD	ASIA VITAL COMPONENTS (CHINA) CO., LTD.	Sales and manufacture of computers related products and computer cooling fans		\$879,291 (2) CHIHUNG INTERNATIONAL LTD.	\$879,291	-	-	\$879,291	100.00%	\$229,235	\$229,235	\$4,449,295	-
ASIA VITAL COMPONENTS CO. , LTD	FURUKAWA ELECTRIC (SHENZHEN) CO., LTD.	Sales and manufacture of automobile parts		\$321,060 (2) MERIT TRADING CORPORATION	\$29,088	-	-	\$29,088	9.06%	\$114,784	-	\$84,414	-
ASIA VITAL COMPONENTS CO. , LTD	ASIA VITAL COMPONENTS (CHENGDU) CO., LTD.	Sales and manufacture of computers, related parts and accessories		\$1,055,897 (2) AVC INTERNATIONAL CO., LTD.-B.V.I.	\$1,055,897	-	-	\$1,055,897	100.00%	\$44,919	\$44,919	\$1,404,008	-
D-MAX TECHNOLOGY CO., LTD.	(JIASHAN)D-MAX ELECTRONICS CO.,LTD.	Sales and manufacture of electronic and photographic equipment		\$132,004 (2) WUCHIDA INTERNATIONAL CO., LTD.	\$132,004	-	-	\$132,004	100.00%	\$35,060	\$35,060	\$304,726	-
ASIA VITAL COMPONENTS CO. , LTD	AVC OPTICS (WUHAN) CORP.	Sales and manufacture of computers related products and computer cooling fans		\$3,128,775 (2) AVC INTERNATIONAL CO., LTD.-B.V.I.	\$3,128,775	-	-	\$3,128,775	100.00%	\$90,097	\$90,097	\$2,789,167	-
FOSITEK CORP.	FIRST DOME CORP TELECOM.,LTD.	Sales and manufacture of rails, shafts and metal stamping tooling		\$281,809 (2) MARKETHILL INVESTMENTS LTD.	\$287,809	-	-	\$287,809	100.00%	\$318,633	\$318,633	\$1,042,335	-

Accumulated Outflow of Investment from Taiwan to Mainland China as of June 30, 2021	Investment Amounts Authorized by Investment Commission, MOEA	Upper Limit on Investment
\$6,631,307	\$6,958,058
(US\$215,893,010)	(US\$249,750,828)	(Note 3)

Note 1:The methods for investment in Mainland China are categorized into the following three types. Please specify the type.

(1) Direct investment in Mainland China.

(2) Indirectly investment in Mainland China through companies registered in the third area (Please specify the name of the company in third region).

(3) Others.

TABLE 7

Note 2:The table is expressed in thousands of New Taiwan Dollars.

Note 3: The Company has obtained the certificate of being qualified for operating headquarters, issued by the Industrial Development Bureau, MOEA, the ceiling amount of the investment in Mainland China is not applicable to the Company.

Note 4:All the above transactions were eliminated on consolidation.

ASIA VITAL COMPONENTS CO. , LTD AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2021 (Expressed in thousands of New Taiwan Dollars unless Otherwise Specified) INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS

TABLE 8

						Intercompany Transactions
No. (Note 1)	Company Name	Counter Party	Nature of Relationship (Note 2)	Financial Statements Item	Amount	Terms	Percentage of Consolidated Net Revenue or Total Assets (Note 3)
0	ASIA VITAL COMPONENTS CO. , LTD	AVC INTERNATIONAL (SAMOA) CO., LTD.	1	Purchases		\$5,673,001 General trading terms	24%
0	ASIA VITAL COMPONENTS CO. , LTD	AVC INTERNATIONAL (SAMOA) CO., LTD.	1	Accounts payable		\$2,763,636 General trading terms	6%
0	ASIA VITAL COMPONENTS CO. , LTD	AVC AMERICA, INC.	1	Sales		\$198,415 General trading terms	1%
0	ASIA VITAL COMPONENTS CO. , LTD	AVC AMERICA, INC.	1	Accounts receivable		\$82,886 General trading terms	0%
0	ASIA VITAL COMPONENTS CO. , LTD	JADS CORPORATION (HK) LTD.	1	Purchases		\$252,354 General trading terms	1%
0	ASIA VITAL COMPONENTS CO. , LTD	JADS CORPORATION (HK) LTD.	1	Accounts payable		\$170,622 General trading terms	0%
0	ASIA VITAL COMPONENTS CO. , LTD	MERIT TRADING CORPORATION	1	Purchases		\$4,349,361 General trading terms	19%
0	ASIA VITAL COMPONENTS CO. , LTD	MERIT TRADING CORPORATION	1	Accounts payable		\$3,216,617 General trading terms	7%
0	ASIA VITAL COMPONENTS CO. , LTD	TONBRIDGE INVESTMENTS LTD.	1	Purchases		\$863,253 General trading terms	4%
0	ASIA VITAL COMPONENTS CO. , LTD	TONBRIDGE INVESTMENTS LTD.	1	Accounts payable		\$484,494 General trading terms	1%
0	ASIA VITAL COMPONENTS CO. , LTD	ASIA VITAL COMPONENTS (CHENGDU) CO., LTD.	1	Purchases		\$904,504 General trading terms	4%
0	ASIA VITAL COMPONENTS CO. , LTD	ASIA VITAL COMPONENTS (CHENGDU) CO., LTD.	1	Accounts payable		\$638,083 General trading terms	1%
0	ASIA VITAL COMPONENTS CO. , LTD	ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD.	1	Purchases		\$258,716 General trading terms	1%
0	ASIA VITAL COMPONENTS CO. , LTD	ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD.	1	Accounts payable		\$174,759 General trading terms	0%
0	ASIA VITAL COMPONENTS CO. , LTD	WUCHIDA INTERNATIONAL CO.,LTD.	1	Purchases		\$432,501 General trading terms	2%
0	ASIA VITAL COMPONENTS CO. , LTD	WUCHIDA INTERNATIONAL CO.,LTD.	1	Accounts payable		\$102,727 General trading terms	0%

FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2021 ASIA VITAL COMPONENTS CO. , LTD AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of New Taiwan Dollars unless Otherwise Specified) INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS

TABLE 8-1

			Nature of	Intercompany Transactions
No. (Note 1)	Company Name	Counter Party	Relationship (Note 2)	Financial Statements Item	Amount	Terms	Percentage of Consolidated Net Revenue or Total Assets (Note 3)
1	AVC INTERNATIONAL (SAMOA) CO., LTD.	AVC OPTICS (WUHAN) CORP.	3	Accounts receivable	\$173,842	General trading terms	0%
1	AVC INTERNATIONAL (SAMOA) CO., LTD.	AVC OPTICS (WUHAN) CORP.	3	Sales	\$308,571	General trading terms	1%
1	AVC INTERNATIONAL (SAMOA) CO., LTD.	ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD.	3	Purchases	\$6,111,234	General trading terms	26%
1	AVC INTERNATIONAL (SAMOA) CO., LTD.	ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD.	3	Accounts payable	\$3,044,879	General trading terms	7%
1	AVC INTERNATIONAL (SAMOA) CO., LTD.	AVC PRECISION, CO., LTD.	3	Other receivable	\$139,300	General trading terms	0%
2	AVC AMERICA, INC.	MERIT TRADING CORPORATION	3	Purchases	\$391,085	General trading terms	2%
2	AVC AMERICA, INC.	MERIT TRADING CORPORATION	3	Accounts payable	\$123,423	General trading terms	0%
3	ASIA VITAL COMPONENTS (CHENGDU) CO., LTD.	ASIA VITAL COMPONENTS (CHINA) CO., LTD. CO.,LTD.	3	Accounts receivable	\$134,621	General trading terms	0%
3	ASIA VITAL COMPONENTS (CHENGDU) CO., LTD.	ASIA VITAL COMPONENTS (CHINA) CO., LTD. CO.,LTD.	3	Sales	\$173,723	General trading terms	1%
4	AVC PRECISION, CO., LTD.	ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD.	3	Sales	\$943,229	General trading terms	4%
4	AVC PRECISION, CO., LTD.	ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD.	3	Accounts receivable	\$409,548	General trading terms	1%
4	AVC PRECISION, CO., LTD.	ASIA VITAL COMPONENTS (CHINA) CO., LTD.	3	Dividend payable	\$164,406	General trading terms	0%
5	ASIA VITAL COMPONENTS (CHINA) CO., LTD.	ASIA VITAL COMPONENTS (CHENGDU) CO., LTD.	3	Purchases	\$173,019	General trading terms	1%
5	ASIA VITAL COMPONENTS (CHINA) CO., LTD.	ASIA VITAL COMPONENTS (CHENGDU) CO., LTD.	3	Accounts payable	\$134,612	General trading terms	0%
5	ASIA VITAL COMPONENTS (CHINA) CO., LTD.	JADS CORPORATION (HK) LTD.	3	Sales	\$261,641	General trading terms	1%
5	ASIA VITAL COMPONENTS (CHINA) CO., LTD.	JADS CORPORATION (HK) LTD.	3	Accounts receivable	\$166,370	General trading terms	0%
5	ASIA VITAL COMPONENTS (CHINA) CO., LTD.	FIRST DOME CORP TELECOM.,LTD.	3	Purchases	\$2,199,001	General trading terms	9%
5	ASIA VITAL COMPONENTS (CHINA) CO., LTD.	FIRST DOME CORP TELECOM.,LTD.	3	Accounts payable	\$915,041	General trading terms	2%
6	AVC OPTICS (WUHAN) CORP.	TONBRIDGE INVESTMENTS LTD.	3	Accounts receivable	\$606,546	General trading terms	1%
6	AVC OPTICS (WUHAN) CORP.	TONBRIDGE INVESTMENTS LTD.	3	Sales	\$1,016,280	General trading terms	4%
7	ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD.	MERIT TRADING CORPORATION	3	Accounts receivable	\$3,505,500	General trading terms	8%
7	ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD.	MERIT TRADING CORPORATION	3	Sales	\$4,827,740	General trading terms	21%
8	ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD.	MERIT TRADING CORPORATION	3	Accounts payable	\$111,578	General trading terms	0%
8	ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD.	MERIT TRADING CORPORATION	3	Purchases	\$113,353	General trading terms	0%

Note 1: The parent company and its subsidiaries are coded as follows:

No.1. The parent company is coded "0".

No.2. The subsidiaries are coded consecutively beginning from "1" in the order presented in the table above.

Note 2: Transactions are categorized as follows:

No.1. Transactions from parent company to a subsidiary.

No.2. Transactions from subsidiary to the parent company.

No.3. Transactions between subsidiaries.

Note 3: Regarding the percentage of transaction amount to consolidated net revenue or total assets, it is computed based on the ending balance to consolidated total assets for balance sheet items;

and based on interim accumulated amount to consolidated net revenue for income statement items.

FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2021

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

Information of major shareholders

TABLE 9

Shares Name	Number of shares (thousand)	Percentage of ownership
FURUKAWA ELECTRIC CO., LTD.	52,944,693	14.98%

Note 1:The main shareholder information in this form is calculated by the collection company, on the last business day of each quarter, that the total information of the common shares and special shares held by shareholders of the company that have completed the non-entity login delivery (including the storage shares) of the company amounts to more than 5%. As for the share capital recorded in the Company's financial report and the number of unregistered shares actually completed by the Company, there may be differences or differences due to the basis for the calculation of the company.

Note 2:The opening of the information, if the shareholders will share the shares to the trust, is disclosed to the trustees to open a trust account of the individual sub-accounts. As for the shareholders to handle the internal ownership declaration of more than 10% of the shares in accordance with the Securities Exchange Act, the shareholding of the shareholders includes their own shareholding plus their delivery of the trust and the use of decision-making rights for the trust property, etc., the relevant insider equity declaration information can be found in the Market Observation Post System.