BRIGHT - Annual Report 2020 | FinancialReports.eu

TSE ： 3031

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BRIGHT LED ELECTRONICS CORP.

Annual Report 2020

BRTLED annual report is available on: http : // mops.twse.com.tw https : // www.brtled.com

Notice to readers:

In case of any discrepancy between the English version and the Chinese version or any difference in the interpretation of the two versions, the Chinese version shall prevail.

BRTLED Spokesperson and Acting Spokesperson:

Spokesperson: Mei-Lien Lin Title: Director of Financial Management Office TEL ： (02)2959-1090

E-mail ： [email protected] Acting Spokesperson: Hsin-Pei Liao Title: Manager of Operational Management Office TEL ： (02)2959-1090

Corporate Headquarter:

Address: 2, 3F, No. 19-25, Heping Rd., Banqiao Dist., New Taipei City, Taiwan, R.O.C. TEL ： (02)2959-1090

Common Share Transfer Agent and Registrar:

The Transfer Agency Department of Chinatrust Commercial Bank Address: 5F, 83, Sec. 1, Chung-Ching S. Rd., Taipei, Taiwan, R.O.C TEL ： (02)6636-5566 Website ： https://www.ctbcbank.com

Independent Auditors:

Certified public accountants: Ms. Hsin-I Kuo and Ms. Tzu-Hui Li

Accounting firm: KPMG Taiwan

Address: 68F, Taipei 101 Tower, No.7, Sec.5, Xinyi Road, Taipei, Taiwan R.O.C 11049 TEL ： (02)8101-6666

Website ： https://www.kpmg.com.tw

Name of any exchanges where BRTLED's securities are traded offshore and the

method by which to access information on said offshore securities: N/A BRTLED official website: https://www.brtled.com

Page

Letter to Shareholders----------------------------------------------------------------------------------------------
Company Profile----------------------------------------------------------------------------------------------------
Corporate Governance--------------------------------------------------------------------------------------------3.1 Organization structure
3.2 Information regarding BRTLED’s Board of Directors, Supervisors, President, Vice president and Associate Vice President
3.3 Status of corporate governance
3.4 Information regarding BRTLED independent accountants
3.5 Rotation of independent accountants
3.6 Information regarding Chairman, President, CFO or Managers regarding Finance and Accounting, and independent auditors.
3.7 Any transfer of equity interests and/or pledge of or change in equity interests by a director, supervisor, managerial officer, or shareholder with a stake of more than 10 percent during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report.
3.8 Relationship information, if among the company's 10 largest shareholders any one is a related party or a relative within the second degree of kinship of another.
3.9 The total number of shares and total equity stake held in any single enterprise by the company, its directors and supervisors, managers, and any companies controlled either directly or indirectly by the company
Capital and Shares-------------------------------------------------------------------------------------------------
4.1 Capitalization
4.2 Shareholders structure
4.3 Distribution profile of share ownership
4.4 List of major shareholders
4.5 Stock price, net worth, surplus and dividend information for the past two years
4.6 Dividend policy and implementation status
4.7 The impact of the proposed bonus shares at the shareholders' meeting on the company's operating performance and earnings per share
4.8 Compensation of employees, directors and supervisors
4.9 Status of share buyback
4.10 Issuance of corporate bonds
4.11 Preferred shares
4.12 Issuance of overseas depositary receipts
4.13 Status of employee Stock Option Plan
4.14 Status of employee restricted stock
4.15 Status of M&A or transfer of new shares issued by other companies
4.16 Financing plans and implementation
Operational Highlights--------------------------------------------------------------------------------------------
5.1 Business activities
5.2 Summaries of market, production and sales
5.3 Overview of employees in the past two years
5.4 Expenditures for environmental protection
5.5 Labor relation
5.6 Important contracts
Financial Highlights-----------------------------------------------------------------------------------------------
6.1 Condensed balance sheet and statement of comprehensive income for the most recent 5 financial year
6.2 Financial analysis for the most recent 5 years
6.3 Supervisors’ review report from the most recent financial report.
6.4 The most recent financial statements for the parent company only.
6.5 The most recent consolidated financial statements including independent auditors’ report, a two-year comparative balance sheet and income statement, statement of changes in shareholders’ equity, cash flow statement, and any attached notes or appendices
6.6 Any financial difficulties during the most recent fiscal year or the current fiscal year up to the date of printing of annual report
Financial Analysis and Risk Management -----------------------------------------------------------------
7.1 Financial status
7.2 Business performance
7.3 Cash flows
7.4 The effect of major capital expenditures during the most recent fiscal year on company’s finance and business operations
7.5 The company’s reinvestment policy for the most recent fiscal year, the main reasons for the profits/losses generated thereby, the plan for improving re-investment profitability, and investment plans for the coming fiscal year
7.6 Risk management and evaluation
7.7 Other important matters
Subsidiaries Information and Other Special Notes --------------------------------------------------------8.1 Information related to the company’s affiliates
8.2 Status of a private placement of securities during the most recent fiscal year or the current fiscal year up to the date of printing of annual report
8.3 Holding or disposal of the company shares by the company’s subsidiaries during the most recent fiscal year or the current fiscal year up to the date of printing of annual report
8.4 Other matters that require additional disclosure
8.5 Any matter that set forth in Subparagraph 2, Paragraph 2, Article 36 of the Securities and Exchange Act, which might produce material impact on shareholders’ equity or the price of the company’s securities, has occurred during the most recent fiscal year or the current fiscal year up to the date of printing of annual report

1. Letter to Shareholders

Dear Shareholders

Compared with 2019, under the influence of COVID-19, severe and special infectious pneumonia, the overall LED industry was impacted a lot in 2020. Moreover, due to exchange rate fluctuations, sales profits also declined slightly. In order to fight against unfavorable situations related to these impacts, Bright LED electronics corp., which has actively adjusted the company's fundamentals and operated under lean management over the past few years, remained profitable this year. Due to the company policies of ongoing cost reduction and sales increase in proportion of high value-added products and intelligence manufacturing plan, we are hoping that in the future, we can remain profitable in this fickle, unpredictable situation. In year of 2020, the company's overall profitability was fair with stable gross profit margin. In the future, the company will continuously work hard on developing various products applicable in various industries, increasing product’s added values, expanding markets or business opportunities with cross-industry alliance, and providing customers with more one-stop services and customized products.

2020 Result

In 2020, our consolidated revenue totaled NT$1,375,687 thousand dollars, a decrease of 22 percent over NT$1,763,659 thousand dollars in 2019. Consolidated net income totaled NT$133,115 thousand dollars, a decrease of 43 percent over NT$233,879 thousand dollars in 2019. Net income attributed to the parent company totaled NT$128,125 thousand dollars, an increase of 45 percent over NT$234,486 thousand dollars in 2019.

Financial Performance (based on consolidated Financial Statements)

		2020	2019
Financial structure	Debt ratio (%)	18.98	19.43
	Long term capital ratio (%)	601.15	416.70
Profitability	ROA (%)	3.87	6.91
	ROE (%)	4.70	8.31
	EBIT over paid-in capital (%)	10.02	13.90
	Profit margin (%)	9.68	13.26
	EPS (NT$ dollar)	0.74	1.28

Technological Developments

achieved in good perfor-mance, and it is currently in the sample delivery stage and continues to be carried out on schedule. Compared with mechanical relays, photo relays have longer life span, low current drive and fast response. They are one of the indispensable components in the field of intelligence manufacturing and mechanical manufacturing.

The relevant specifications and samples of UVC LED components used in the fields of environ-mental sterilization and health care have been launched. We continue to optimize product quality and manufacturing process to meet the customization and differentiation. The miniaturi-zation of UVC LED components brings many applications advantages and can be used in con-junction with multiple types of application products. In addition, UVC LED also has many advantages itself such as fast start-up, more switching frequency, and battery-powered availability. In view of the severe and special infectious pneumonia raging due to COVID-19 in early 2020, the company expects to accelerate the schedule this year to promote the popularization of UVC products in the future.

Finally, with regard to smart city concept, due to the popularity of street lamps in Taiwan, besides lighting, there are many additional applications can be attached. Smart street lighting are mainly designed and installed with controllers, sensors and other components so that the street lighting can have more functions services attached, at the same time reducing the original costs of building a base for these functions. For example, with wireless transmission attached, when the lamp fails, the controller can directly detect and report to the control center and call for maintenance. Various types of environmental monitoring can be attached using multiple sensors, which to detect harmful gases, noise, PM2.5, wind speed, wind direction, temperature, humidity, and etc., to report back to the control center and to alert the public. The lamp itself can also use the lighting sensors to detect ambient lights periodically and automatically adjust lamp’s brightness to meet comfort for vision without wasting power. In addition to the above intelligent functions, street lighting may support connections between 4G/5G transmitters as miniature base stations in the future or can possibly support and cooperate with other fields like vehicle charging, and etc. There are unlimited possibilities could be accomplished in the future.

Summary, corporate development, and outlook affected by external competition,

regulatory environment and overall operation strategy

Looking forward to business plan of 2021, in addition to the existing mass-produced application products’ qualities and functions, including smart home applications, security and surveillance control, aviation and transportation electronic applications, computer-related applications, sensing applications, lighting applications, and etc., which will continue to be improved, Bright LED Electronics also urges to

provide customers with new solutions to meet the needs of customization and differentiation, and to increase the added value of products and to continuously accelerate the progress of cases with special specifications in order to expand more special application markets, such as environmental sterilization and health care and medical markets. With the injection of new products, the company will obtain new business opportunities and ultimately lead to increase company’s revenues and profits. Since January, 2021, the severe and special infectious pneumonia of COVID-19 has slowed down. If there is no other new issues emerge, it is expected that the overall world economy will slowly rebound after. The company's performance at the beginning of 2021 has already rebounded slightly compared to last year. The company will continue to strengthen risk control, improve internal management and strengthen the company's response ability. In view of external factors such as health environment and unpredictable risks of international policies, the company's business model continues to move towards lean management, while implementing intelligent manufacturing and accelerating the improvement of production processes and operating models to diversify risks and accelerate the company's response and adaptation capability which we believe will lead Bright LED Electronics corp. to sustainably develop and survive in this turbulent and uncertain generation.

We sincerely thank you for your continued support towards BRTLED. We uphold our integrity to operate business and implement plans towards goals to live up to your expectations and supports. Finally, we wish you good health and great fortune in 2020.

Chairman: Tsung-Jen Liaw CEO: Tsung-Jen Liaw Accounting Manager: Mei-Lien Lin

2. Company Profile

2.1 Established date `：` June 1, 1981

2.2 Milestone

1981 Establied with startup capital NT $1.13 million and produced light-emitting diode indicators
1984 Increased capital to NT $5.87 million and paid-in capital reached NT $7 million. Began production of light-emitting diode displays
1987 Capital increased by NT $13 million and paid-in capital amounted to NT $20 million. Implemented automated production equipments
1991 Capital increased by NT $40 million and paid-in capital reached NT $60 million. In April, production base moved to newly built factory located on Heping Road, Banqiao District, New Taipei City
1995 Capital increased by NT $40 million and paid-in capital amounted to NT $100 million to purchase equipments and expand production capacity. Started production of Axial LED and SMD LED and CHIP LAMPS
1997 Capital increased by NT $95 million and paid-in capital amounted to NT $195 million. Began production of plastic housing typed of SMD LEDs and stamping typed of Axial LEDs and obtained ISO 9002 quality certification
1998 In September, Securities and Futures Bureau approved public issue. Capital increased by NT $155 million and paid-in capital amounted to NT $350 million
1999 Obtained ISO 9001 quality certification in August. Capital increased by $77 million and paid-in capital amounted to NT $427 million
2000 Capital increased by NT $92.9 million and paid-in capital reached NT $519.9 million. Securities and Futures Bureau approved OTC
2001 Increased capital by NT $110 million and paid-in capital amounted to NT $630 million
2002 Securities and Futures Bureau approved the listing. Capital increased by NT $90 million in September and paid-in capital amounted to NT $720 million
2003 Increased capital by NT $100 million and paid-in capital amounted to NT $820 million
2004 Increased capital by NT $226 million and paid-in capital amounted to NT $1.06 billion
2005 Capital increased by NT $240 million and the paid-in capital amounted to NT $1.25 billion
2006 Capital increased by NT $200 million yuan and paid-in capital amounted to NT $1.45 billion
2007 Increased capital by NT $230 million yuan and paid-in capital amounted to NT $1.68 billion
2008 Capital increased by NT $154.4 million and paid-in capital amounted to NT $1.83 billion
2009 Increased capital by NT $112.4 million and paid-in capital amounted to NT $1.95 billion
2010 Capital increased by NT $19.9 million and paid-in capital amounted to NT $1.96 billion
2017 Capital reduced by NT $100 million by executing treasury stock repurchase and paid-in capital reduced to NT $1,866 million
2020 Capital reduced by NT $50 million by executing treasury stock repurchase and paid-in capital reduced to NT $1,816 million

3. Corporate Governance

3.1 Organization Structure

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Shareholders’
Meeting
Supervisors
Board of
Directors Comp ensation
Committee
Internal
Audit
Chairman
CEO
Overseas Operation Finance Material R&D Lighting Sales &
Business Management Division Management Division Product Marketing
Division Division Division Sales Division
Division
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(1) Major Functions of Divisions

Divisions	Major Functions
Internal Audit	Inspection and review of BRTLED's internal control system, its adequacy in design and effectiveness in operation with independent risk assessment to ensure compliance with the company policies and procedures as well as with external regulations.
Overseas Business	Coordination and supervision of BRTLED’s overseas subsidiaries and factories’ operations.
Operation Management	1. Human resources management and organizational development, as well as proprietary information protection and security management. 2. Maintenance and development of the company’s business IT systems including infrastructure development, communication services and assurance of IT security and service quality plan.
Finance	1. Corporate finance and accounting. 2. Financial planning and long-term/ short-term investment evaluations. 3. Board affairs and stock affairs.
Material Management	1. Bargain and procurement of raw materials, materials and other assets and equipments. 2. Quality inspection and assurance. 3. Warehousing, import and export, and logistics support. Coordination of production and sales.
Research and Development	Advanced products development and specialty technology development and exploratory research, as well as design and testing and planning
Sales & Marketing Lighting Product Sales	1. Coordinate, supervise,and review sales plans and marketing plans. 2. Development of new customers and new markets. 3. Collection, aggregation and analysis of market information. 4. Improvement and suggestion of sales procedures and methods. 5. Sales development of various projects.

3.2 Information regarding BRTLED’s Board of Directors, Supervisors, President, Vice President and Associate Vice Presidents

3.2.1 Information regarding Board Members and Supervisors

As of 4/9/2021

															As of 4/9/2021	As of 4/9/2021	As of 4/9/2021
Title	Nationality or Place of Registration	Name	Gender	Date Elected	Term	Date First Elected	Shareholding When Elected		Current Shareholding		Spouse & Minor Shareholding		Shareholding by Nominee Arrangement		Directors Who are Spouses or within Second-degree Relative of Consanguinity to Each Other
							Shares	%	Shares	%	Shares	%	Shares	%	Title	Name	Relation
Chairman/ President (Note)	R.O.C	Tsung-Jen Liaw	M	2019.06.12	3yrs	1981.06.01	20,323,417	10.89%	21,028,417	11.57%	5,766,547	3.17%	0	-	Director Director	Shu-June Wang Hsin-Pei Liao	Spouse Daughter
Director	R.O.C	Shu-June Wang	F	2019.06.12	3yrs	2000.06.09	5,766,547	3.09%	5,766,547	3.17%	21,028,417	11.57%	0	-	Director Director	Tsung-Jen Liaw Hsin-Pei Liao	Spouse Daughter
Director	R.O.C	Chi-Chia Hsieh	M	2019.06.12	3yrs	2008.06.13	0	-	0	-	0	-	0	-	N/A	N/A	N/A
Director	R.O.C	Hsin-Pei Liao	F	2019.06.12	3yrs	2016.06.08	3,292,333	1.76%	3,292,333	1.81%	34,000	0.02%	0	-	Director Director	Tsung-Jen Liaw Shu-June Wang	Father Mother
Corporate Director	R.O.C	Wan-Hsu Investment Co.,Ltd	-	2019.06.12	3yrs	2000.06.09	25,880,397	13.86%	27,378,397	15.07%	-	-	-	-	-	-	-
	R.O.C	Representative- Po-Yuan Lin	M	2019.06.12		2018.07.31	2,291,596	1.23%	2,291,596	1.26%	-	-	-	-	Supervisor	Ju-Ching Liao	Mother
Independent Director	R.O.C	Ming-Chang Huang	M	2019.06.12	3yrs	2016.06.08	0	-	0	-	0	-	0	-	N/A	N/A	N/A
Independent Director	R.O.C	Chwen-Shell Ho	F	2019.06.12	3yrs	2016.06.08	0	-	0	-	0	-	0	-	N/A	N/A	N/A
Supervisor	R.O.C	Ju-Ching Liao	F	2019.06.12	3yrs	2000.06.09	2,240,541	1.20%	2,240,541	1.23%	1,690,929	0.93%	0	-	Director Director	Tsung-Jen Liaw Po-Yuan Lin	Second-degree Relative of ConsanguinitySon
Supervisor	R.O.C	Chin-Lung Huang	M	2019.06.12	3yrs	2004.05.31	0	-	0	-	0	-	0	-	N/A	N/A	N/A
Supervisor	R.O.C	Hong-Chang Lin	M	2020.06.10	-	2017.07.01	0	-	0	-	0	-	0	-	N/A	N/A	N/A

Note: The current chairman and president of the company are the same person due to the dramatic changes in industry in recent years. In order to improve the efficiency of the implementation of operating policies, it is necessary to unify the authorities at present. The company is also actively seeking successor of the president and the appointment will be conducted at an appropriate time.

Title	Name	Education/ Experience	Current positions
Chairman/ President	Tsung-Jen Liaw	Bachelor Degree in Physics, Chung Yuan Christian University, Taiwan.	1. Chairman, Wan-Hsu Investment Co., Ltd 2. Director, Yi-Run Investment Co., Ltd 3. Director, Wan Hui (HK) Company 4. Director, Li Sheng (HK) Int’l Company 5. Corporate Director, New Future Capital Ltd. 6. Director, AB Corp. 7. Corporate Director, KoBrite Corp. 8. Corporate Director, Powertip Technology Corporation 9. Corporate Director, Powertip Image Corp. 10. Corporate Director, WK Technology Fund IX Ltd. 11. Chairman, KoBrite Corp. 12. Corporate Director,Foxfortune TechnologyVentures Limited
Director	Shu-June Wang	Ching Kuo Institute of Management and Health, Taiwan.	1. Chairman, Yi-Run Investment Co., Ltd 2. Director, Wan-Hsu Investment Co., Ltd
Director	Chi-Chia Hsieh	Ph.D. in Electrical Engineering, University of Santa Clara, USA.	1. Independent Director, AcBel Polytech Inc. 2. Director, Microelectronics Technology Inc. 3. Chairman, IQE Taiwan Corporation 4. Chairman, Jupiter Network Corp 5. Independent Director, Innolux 6. Director, Advanced Wireless Semiconductor Company 7. Director, Bright Crystal (Henan) Company Limited 8. Chaiman, Welltop Technology Co., Ltd. 9. Corporate Director, Sasson Capital 10. Corporate Director, The Taiwan Cement Corporation 11. Director, Kopin Corp. 12. Director, Bright Crystal Company Limited 13. Director, TCM 14. Director, Taicom Capital Limited 15. Corporate Director,Jupiter Technology (Wuxi)Co.,Ltd.
Director	Hsin-Pei Liao	Bachelor drgree in Finance, University of Alberta, Canada.	1. Corporate Director, Powertip Image Corp. 2. Corporate Director, Powertip Technology Corp. 3. Director,KoBrite Corp.

Director	Representative of Wan-Hsu Investment Co., Ltd.`﹕`Po-Yuan Lin	Ph.D. in Materials Science and Engineering, Case Western Reserve University, USA.	N/A
Independent Director	Ming-Chang Huang	Ph.D. in Physics, Univeristy of Florida, USA.	1. Professor, Chung Yuan Christian University
Independent Director	Chwen-Shell Ho	Ph.D. in Physics, North Dakota State University, USA.	1. Professor, Chung Yuan Christian University
Supervisor	Ju-Ching Liao	National Hsinchu Senior High School, Taiwan	N/A
Supervisor	Chin-Lung Huang	Shih Hsin Senior High School, Taiwan.	1. CEO, Jin-Hui Management Consultant Corp.
Supervisor	Hong-Chang Lin	Master in Finance, George Washington University, USA EMBA, National Taiwan University, Taiwan	1. Independet Director, Taiwan Fertilizer Co.,Ltd 2. Supervisor, Provision company 3. CFO, M business group in Foxconn

3.2.1.1. Information of Corporate Shareholder

(a)Major Shareholders of BRTLED’s Corporate Shareholders

As of 5/6/2019

		As of 5/6/2019
Name of corporation	Major shareholders	%
Wan-Hsu Investment Co., Ltd	Tsung-Jen Liaw	35.00%
	Shu-June Wang	17.50%
	Ju-Ching Liao	18.50%
	Chung-Yao Lin	16.00%
	Ju-Hao Liao	8.00%
	Chung-Chun Lin	2.50%
	Jui-Lan Lin	2.50%

(b)Major Corporate Shareholders of BRTLED’s Corporate Shareholders

As of 5/6/2019

	As of 5/6/2019
Name of corporations	Major corporate shareholders
N/A	N/A

3.2.1.2. Eligibilities of Board Members and Supervisors

As of 5/6/2019

Criteria Name	Meet the Following Professional Qualification Requirements, Together with at Least Five Years Work Experience	Meet the Following Professional Qualification Requirements, Together with at Least Five Years Work Experience	Meet the Following Professional Qualification Requirements, Together with at Least Five Years Work Experience	Criteria (Note 1)	Criteria (Note 1)	Criteria (Note 1)	Criteria (Note 1)	Criteria (Note 1)	Criteria (Note 1)	Criteria (Note 1)	Criteria (Note 1)	Criteria (Note 1)	Criteria (Note 1)	Criteria (Note 1)	Criteria (Note 1)	Number of Other Taiwanese Public Companies Concurrently Serving as an Independent Director
	An Instructor or Higher Position in a Department of Commerce, Law, Finance, Accounting, or Other Academic Department Related to the Business Needs of the Company in a Public or Private Junior College, College or University	A Judge, Public Prosecutor, Attorney, Certified Public Accountant, or Other Professional or Technical Specialists Who Has Passed a National Examination and Been Awarded a Certificate in a Profession Necessary for the Business of the Company	Have Work Experience in the Area of Commerce, Law, Finance, or Accounting, or Otherwise Necessary for the Business of the Company	1	2	3	4	5	6	7	8	9	10	11	12
Tsung-Jen Liaw																0
Shu-June Wang																0
Chi-Chia Hsieh																0
Representative of Wan-Hsu Investment Co., Ltd.: Po-Yuan Lin																0
Hsin-Pei Liao																0
Ming-Chang Huang																0
Chwen-Shell Ho																0
Ju-ChingLiao																0
Chin-LungHuang																0
Hong-ChangLin																0
Note 1:	Directors, during the two years before being elected and during the term of office, meet
	any of the following situations, please tick the appropriate corresponding boxes:
	1. Not an employee of the company or any of its affiliates;
	2. Not a director or supervisor of the company or any of its affiliates. (The same does not
	apply, however, in cases where the person is an independent director of the company, its
	parent company, or any subsidiary, as appointed in accordance with the laws of Taiwan
	or with the laws of the country of the parent company or subsidiary);
3. Not a natural-person shareholder who holds shares, together with those held by the person’s spouse, minor children, or held by the person under others’ names, in an aggregate amount of 1% or more of the total number of issued shares of the company or ranks as one of its top ten shareholders; 4. Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship, of any of the above persons in the preceding three subparagraphs; 5. Not a director, supervisor, or employee of a corporate/institutional shareholder that directly holds 5% or more of the total number of issued shares of the company or ranks as of its top five shareholders or has representative director(s) serving on the company’s board based on Article 27 of the Company Act; 6. Not a director, supervisor, or employee of a company of which the majority of board seats or voting shares is controlled by a company that also controls the same of the company. (The same does not apply, however, in cases where the person is an independent director of the company, its parent company, or any subsidiary, as appointed in accordance with the laws of Taiwan or with the laws of the country of the parent company or subsidiary); 7. Not a director, supervisor, or employee of a company of which the chairman or president (or equivalent) themselves or their spouse also serve as the company’s chairman or president (or equivalent). (The same does not apply, however, in cases where the person is an independent director of the company, its parent company, or any subsidiary, as appointed in accordance with the laws of Taiwan or with the laws of the country of the parent company or subsidiary); 8. Not a director, supervisor, officer, or shareholder holding 5% or more of the shares of a

Not a natural-person shareholder who holds shares, together with those held by the person’s spouse, minor children, or held by the person under others’ names, in an aggregate amount of 1% or more of the total number of issued shares of the company or ranks as one of its top ten shareholders;
Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship, of any of the above persons in the preceding three subparagraphs;
Not a director, supervisor, or employee of a corporate/institutional shareholder that directly holds 5% or more of the total number of issued shares of the company or ranks as of its top five shareholders or has representative director(s) serving on the company’s board based on Article 27 of the Company Act;
Not a director, supervisor, or employee of a company of which the majority of board seats or voting shares is controlled by a company that also controls the same of the company. (The same does not apply, however, in cases where the person is an independent director of the company, its parent company, or any subsidiary, as appointed in accordance with the laws of Taiwan or with the laws of the country of the parent company or subsidiary);
Not a director, supervisor, or employee of a company of which the chairman or president (or equivalent) themselves or their spouse also serve as the company’s chairman or president (or equivalent). (The same does not apply, however, in cases where the person is an independent director of the company, its parent company, or any subsidiary, as appointed in accordance with the laws of Taiwan or with the laws of the country of the parent company or subsidiary);
Not a director, supervisor, officer, or shareholder holding 5% or more of the shares of a

specified company or institution that has a financial or business relationship with the company (The same does not apply, however a company or instituite that holds above 20% but less than 50% of the company’s total issued shares and where such company or institute is an independent director of the company, its parent company, or any subsidiary, as appointed in accordance with the laws of Taiwan or with the laws of the country of the parent company or subsidiary);

Other than serving as a compensation committee member of the company, not a professional individual who, or an owner, partner, director, supervisor, or officer of a sole proprietorship,

partnership, company, or institution that, provides commercial, legal, financial, accounting services or consultation to the company or to any affiliate of the company, or a spouse thereof, and

the service provided is an “audit service” or a “non-audit service which total compensation within the recent two years exceeds NTD $500,000;

Not having a marital relationship, or a relative within the second degree of kinship to any other director of the company;
Not been a person of any conditions defined in Article 30 of the Company Law; and
Not a governmental, juridical person or its representative as defined in Article 27 of the Company Act.

3.2.2 Information regarding Management Team

													As of 5/6/2019	As of 5/6/2019	As of 5/6/2019
Title	Nationality	Name	Gender	On-board Date	Shareholding		Spouse & Minor		Shareholding by Nominee Arrangement		Education/ Experience	Current positions	Managers Who are Spouses or within Second-degree Relative of Consanguinity to Each Other
					Shares	%	Shares	%	Shares	%			Title	Name	Relation
President	R.O.C	Tsung-Jen Liaw	M	06/01/1981	20,938,417	11.22%	5,766,547	3.09%	0	-	Bachelor Degree in Physics, Chung Yuan Christian University, Taiwan.	1. Chairman, Wan-Hsu Investment Co., Ltd 2. Director, Yi-Run Investment Co., Ltd 3. Director, Wan Hui (HK) Company 4. Director, Li Sheng (HK) Int’l Company 5. Corporate Director, New Future Capital Ltd. 6. Director, AB Corp. 7. Corporate Director, KoBrite Corp. 8. Corporate Director, Powertip Technology Corporation 9. Corporate Director, Powertip Image Corp. 10. Corporate Director, WK Technology Fund IX Ltd. 11. Chairman, KoBrite Corp. 12. Corporate Director, Foxfortune Technology Ventures Limited	N/A	N/A	N/A
Vice President	R.O.C	Lin-Lin Chen	M	01/07/2014	10,531	0.01%	0	-	0	-	Bachelor Degree in Mechanical Engineering, Chinese Culture University, Taiwan.	N/A	N/A	N/A	N/A

Associate VP	R.O.C	Ming-Kuei Yu	M	04/11/2013	0	-	0	-	-	Master Degree in Graduate Institute of Automation and Control, National Taiwan University of Science and Technology, Taiwan.	N/A	N/A	N/A	N/A
Associate VP	R.O.C	Wei-Cheng Chen	M	10/01/2017	138,296	0.07%	0	-	-	Bachelor Degree in Accounting, Fu Jen Catholic University, Taiwan.	N/A	N/A	N/A	N/A
Associate VP	R.O.C	Hsiao-Yen Chang	M	10/01/2017	29,000	0.02%	0	-	-	Bachelor Degree in Electrical Engineering, Da-Yeh University,Taiwan.	N/A	N/A	N/A	N/A
Associate VP	R.O.C	Ying-Chen Hsiao	F	10/01/2017	191,930	0.10%	3,151	0.00%	-	Bachelor Degree in International Business, National Chengchi University,Taiwan.	N/A	N/A	N/A	N/A
Financial manager	R.O.C	Mei-Lien Lin	F	03/13/2015	0	-	0	-	-	Bachelor Degree in Accounting, Fu Jen Catholic University, Taiwan.	N/A	N/A	N/A	N/A

3.2.3 Compensation Paid to Directors, Supervisors, President, and Vice President

3.2.3.1 Compensation Paid to Directors (including Independent Directors)

Unit: NT$ thousands

Title	Name	Director’s remuneration	Director’s remuneration	Director’s remuneration	Director’s remuneration	Director’s remuneration	Director’s remuneration	Director’s remuneration	Director’s remuneration	Total (A+B+C+D) as a % of yearly net income	Total (A+B+C+D) as a % of yearly net income	Directors who are also employees of BRTLED or of other consolidated entities	Directors who are also employees of BRTLED or of other consolidated entities	Directors who are also employees of BRTLED or of other consolidated entities	Directors who are also employees of BRTLED or of other consolidated entities	Directors who are also employees of BRTLED or of other consolidated entities	Directors who are also employees of BRTLED or of other consolidated entities	Directors who are also employees of BRTLED or of other consolidated entities	Directors who are also employees of BRTLED or of other consolidated entities	Total (A+B +C+D +E+F +G) as a % of yearly net incom e	Compension from Non-consolidate d affiliates	Compension from Non-consolidate d affiliates
		Base compen sation (A)		Severance pay and pension s (B)		Compensation to Directors (C)(Note)		Allowance s(D)				Base compensation, bonuses and allowances (E)		Severance pay and pensions (F)		Employee profit sharing bonuses (G) (Note)
		From BRTLE D	From all cons olidated entities	From BRT LED	From ~~a~~ll cons olidated entities	From BRTLED	From ~~a~~ll consoli dated entit ies	From BRT LED	From all cons olidated entities	From BRTLED	From ~~a~~ll conso lidated e ntities	From BRTLED	From all consolida ted entities	From BRTLED	From all consolidated entities	From BRTLED		From all consolidated entities		From BRTLED	From ~~a~~ll cons olidated entities
																Cash	Stock	Cash	Stock
Chairman	Tsung-Jen Liaw	60	60	0	0	891	891	0	0	0.74%	0.74%	5,177	5,177	0	0	3,328	0	3,328	0	7.38%	7.38%	N/A
Director	Shu-June Wang	60	60	0	0	445	445	0	0	0.39%	0.39%	280	280	0	0	0	0	0	0	0.61%	0.61%	N/A
Director	Chi-Chia Hsieh	60	60	0	0	445	445	0	0	0.39%	0.39%	0	0	0	0	0	0	0	0	0.39%	0.39%	N/A
Director	Hsin-Pei Liao	60	60	0	0	445	445	0	0	0.39%	0.39%	1,042	1,042	0	0	351	0	351	0	1.48%	1.48%	N/A
Director	Wan-Hsu Investment Co.,Ltd.	0	0	0	0	445	445	0	0	0.35%	0.35%	0	0	0	0	0	0	0	0	0.35%	0.35%	N/A
	Representa tive`﹕` Po-Yuan Lin	60	60	0	0	0	0	0	0	0.05%	0.05%	1,286	1,286	0	0	281	0	281	0	1.27%	1.27%	N/A
Independent Director	Ming-Cha ng Huang	300	300	0	0	0	0	0	0	0.23%	0.23%	0	0	0	0	0	0	0	0	0.23%	0.23%	N/A
Independent Director	Chwen-Sh ell Ho	300	300	0	0	0	0	0	0	0.23%	0.23%	0	0	0	0	0	0	0	0	0.23%	0.23%	N/A
In addition to the disclosure above, the compensation received by the company directors for providing services to all companies noted in the financial report in the most recent year`：`0
~~Note~~`：`~~The compensation distribution of employees and directors and supervisors in 2020 was NT $15,591,495 and NT $3,897,874, respectively.~~ Calculation of the amount to be issued this year is based on the ratio of the actual amount of allotment in the previous year.

3.2.3.2 Compensation Paid to Supervisors

Unit ︰ NT$ thousands

Title	Name	Supervisors’ remunerations	Supervisors’ remunerations	Supervisors’ remunerations	Supervisors’ remunerations	Supervisors’ remunerations	Supervisors’ remunerations	Total (A+B+C) as a % of yearly net income	Total (A+B+C) as a % of yearly net income	Compension from Non-consolidated affiliates
		Base compensation(A)		Severance pay and pensions (B) (Note)		Allowances (C)
		From BRTLED	From all consolidated entities	From BRTLED	From all consolidated entities	From BRTLED	From all consolidated entities	From BRTLED	From all consolidated entities
Supervisor	Ju-Ching Liao	60	60	445	445	0	0	0.39%	0.39%	N/A
Supervisor	Chin-Lung Huang	60	60	445	445	0	0	0.39%	0.39%	N/A
Supervisor (Resigned on 2020/03/20)	Yi-Run Investment Co., Ltd.	0	0	98	98	0	0	0.08%	0.08%	N/A
	Representative: Hong-Chang Lin	15	15	0	0	0	0	0.01%	0.01%	N/A
Supervisor (Elected on 2020/6/10	Hong-Chang Lin	35	35	236	236	0	0	0.21%	0.21%	N/A

Note ： The compensation of directors and supervisors in 2020 was NT $3,897,874. Calculation of the amount to be issued this year is based on the ratio of the actual amount of allotment in the previous year.

3.2.3.3 Compensation Paid to President and Vice President

Unit: NT$ thousands

Title	Name	Base compensation (A)	Base compensation (A)	Severance pay and pensions (B)	Severance pay and pensions (B)	Bonuses and allowances (C)	Bonuses and allowances (C)	Employees profit sharing bonus(D) (Note 1)	Employees profit sharing bonus(D) (Note 1)	Employees profit sharing bonus(D) (Note 1)	Employees profit sharing bonus(D) (Note 1)	Total (A+B+C+D) as a % of yearly net income	Total (A+B+C+D) as a % of yearly net income	Amount of employee stock option certificates obtained	Amount of employee stock option certificates obtained	Issuance of new restricted shares for subscription by employees	Issuance of new restricted shares for subscription by employees	Compensi on from Non-cons olidated a ffiliates
		From BRTLED	From all consolida ted entities	From BRTLED	From ~~a~~ll consolida ted entities	From BRTLED	From all consolida ted entities	From BRTLED		From all consolidated enti ties		From BRTLED	From all consolida ted entities	From BRTLED	From all consolida ted entities	From BRTLED	From all consoli dated entit ies
								Cash	Stock	Cash	Stock
President	Tsung-Jen Liaw	2,577	2,577	0	0	2,600	2,600	3,328	0	3,328	0	6.64%	6.64%	0	0	0	0	N/A
Vice President	Lin-Lin Chen	1,413	1,413	91	91	600	600	1,638	0	1,638	0	2.92%	2.92%	0	0	0	0	N/A

Note ： The compensation distribution for employees and directors and supervisors in 2019 was NT $ 22,374,409. Calculation of the amount to be issued this year is based on the ratio of the actual amount of allotment in the previous year.

3.2.3.4 Allocation of Employees Profit Sharing Bonus to Management team

Unit: NT$ thousands

==> picture [428 x 214] intentionally omitted <==

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

Amount of cash
Amount of Total as a % of yearly
Title Name dividends Total
stock net income
(Note)
dividends
President Tsung-Jen Liaw
Vice President Lin-Lin Chen
Associate VP Ming-Kuei Yu
Wei-Cheng
Associate VP
Chen
Management team Hsiao-Yen 0 6,464 6,464 5.04%
Associate VP
Chang
Ying-Chen
Associate VP
Hsiao
Mei-Lien
Financial
Manager Lin
----- End of picture text -----

Note ： As of the date of publication of the annual report, the company's employee compensation to managers for 2020 has not yet been determined. It is planned to calculate the amount to be distributed based on the proportion of the actual amount allocated in the previous year.

Compare and explain the analysis of the total remuneration paid to the company’s directors, supervisors, general managers and deputy general managers in recent two years to the net profit after tax of individual and consolidated financial statements. Also, explaining the policies, standards and combinations of remunerations related to portfolio, remuneration procedures, operating performance and relation to future risks.
(1) The percentage of the total remuneration paid to the company’s directors, supervisors, general managers and deputy general managers in recent two years over the net profit after tax of individual and consolidated financial statements: unit ： NT$ thousands

Items	2020			2019
	Total remuneration	Net profit after tax	%	Total remuneration	Net profit after tax	%
The company	20,455	128,125	15.97%	26,392	234,486	11.26%
The companies in consolidated statements	20,455	128,125	15.97%	26,392	234,486	11.26%

(2) Each year, the cs paid to directors, supervisors, president and vice president are in accordance with the company's articles of association, the profitability of the year, and upon resolution of the board of directors.
(3) The remunerations paid to directors and supervisors are processed under "Remuneration Payment Methods for Directors and Supervisors" approved by the Board of Directors and are reviewed by the Compensation Committee regularly before submitted to the Board of Directors for final approval. The remunerations includes periodic “transportation allowance” and “directors 'and supervisors' compensations” based on each year's profit situation and in proportion to directors and supervisors’ positions and participations in the company affairs. Independent directors do not participate in distribution of directors and supervisors ’compensation.
(4) The total compensation paid to president and vice president is

evaluated based on their job responsibility, contribution, company performance and projected future risks the company will face. The proposals of the total compensation are reviewed by the Compensation Committee regularly before submitted to the Board of Directors for final approval.

3.3 Status of Corporate Governance

3.3.1 Status of the Board of Directors

2019 Board of Directors’ meetings: 6. The directors’ attendance status is as follows:

	Name	Attendance in Person	By Proxy	Attendance Rate in Person (%) (Note)	Notes
Chairman	Tsung-Jen Liaw	5	0	100%
Director	Shu-June Wang	5	0	100%
Director	Chi-Chia Hsieh	3	2	67%
Director	Hsin-Pei Liao	5	0	100%
Director	Wan-Hsu Investment Co.,Ltd. Representative`﹕` Po-Yuan Lin	5	0	100%
Independent director	Ming-Chang Huang	5	0	100%
Independent director	Chwen-Shell Ho	5	0	100%
Supervisor	Ju-Ching Liao	5	0	100%
Supervisor	Chin-Lung Huang	5	0	100%
Supervisor	Representative of Yi-Run Investment Co., Ltd.`：` Hong-Chang Lin	1	0	100%	Resigned on 2020/3/20
Supervisor	Hong-Chang Lin	3	0	100%	Elected on 2020/06/10
Note`：`For those who have left their positions before the end of year, their actual attendance (%) is calculated based on the number of board meetings and their actual number of attendances during their tenure. Other matters`：` 1) If the operation of the board of directors is in any of the following situations, the date, period, content of the proposal, the opinions of all independent directors and the company's handling of the opinions of independent directors shall be stated: A. Securities and Exchange Act§14-3 resolutions: Meeting date Meeting period Content Opinions of all independent directors The company's handling of independent directors' opinions 2020/3/20 18thsession of fifth meeting Amendments to the Articles of Incorporation Agreed Not applicable

	2020/5/21	18thsession of sixth meeting Loaning company fund to KoBrite Corp. Agreed Not applicable	18thsession of sixth meeting Loaning company fund to KoBrite Corp. Agreed Not applicable	18thsession of sixth meeting Loaning company fund to KoBrite Corp. Agreed Not applicable
		18thsession Confirmation of its nature on
	2020/8/7	of eighth	receivables that are overdue for Agreed Not applicable
		meeting	more than 3 months
			Remuneration of directors
			and supervisors and the
	2020/11/6	18thsession of nineth meeting remuneration of managers and employees in 2021. Because of the conflict of interest, CEO avoided and left Agreed Not applicable
			the discussion and voting in
			accordance with the law.

			Loaning company fund to
	2021/3/18	18thsession of tenth meeting KoBrite Corp. Amendment of Articles of Incorporation Amendment of Rules of Agreed Not applicable
			Procedure of
			Shareholders' Meeting
	B. In addition to the previous matters, other resolutions that have been opposed or reserved by
	independent directors with a record or written statement: No such situation
2) The implementation of directors ’avoidance of interested resolutions shall state the director’s
	name, the content of the resolutions, the reasons for avoidance of interests, and participation in
	voting:
	Meeting	Meeting	Director Content	Opinions from other
	date	period		directors
			Remuneration of directors and supervisors
		18th	and the remuneration of managers
	2020/11/6	session of nineth	Tsung-Jen Liaw and employees in 2021. Because of the conflict of interest, CEO avoided and left	Agreed
		meeting	the discussion and voting in accordance with
			the law.
Self-evaluation from the board of directors: detailed description of item 3. (1) 2.
4) Objectives		of strengthening the functions of the board of directors in the current year and most
	recent years (such as the establishment of an audit committee, improving information
	transparency, etc.) and		evaluation of implementation: Since 2020, the board of directors has been
	self-evaluated, and the		evaluation results and their evaluation indicators have been	reported to
	the board of directors. The results will be used as a reference for enhancingthe functions of the

board of directors.

3.3.2 The board of directors’ evaluation on implementation and operation situation The company passed the "Measurement for the Performance Evaluation of the Board of Directors and Functional Committees" on November 12, 2019. The implementation of the Board of Directors' appraisal in 2020 is as follows:

Evaluation period	Evaluated p eriod	Evaluation range	Evaluation method	Evaluation content
Execute once a year	The performance evaluation of the board of directors and remunerat ion committee from 2020/1/1 to 2020/12/31	Including the overall board of directors, individual directors and functiona l committees.	Will be conducted in the form of self-assessme nt questionnaire. The evaluation result will be reported to the board of directors or each functional co mmittee for review and improvem ent.	The performance evaluation of directors includes the following six aspects: a total of 20 questions 1. The company's goals and tasks. (3 questions) 2. Awareness of directors' responsibilities. (3 questions) 3. The degree of participation in the company's operations. (6 questions) 4. Internal relationship management and communication. (3 questions) 5. Professional and continuing education of directors. (2 questions) 6. Internal control. (3 questions) The self-evaluation of the board of directors includes the following five aspects: a total of 45 questions 1. The degree of participation in the company's operations. (12 questions) 2. Improve the decision-making quality of the board of directors. (12 questions) 3. The composition and structure of the board of directors. (7 questions) 4. The selection and continuing education of directors. (7 questions) 5. Internal control. (7 questions) The measurement items of functional committee performance evaluation should include at least the following five aspects: 1. The degree of participation in the company's operations. 2. Recognition of the responsibilities of the functional committee. 3. Improve the decision-making quality of functional committees. 4. The composition of the functional committee and the selection of its members. 5. Internal control.

3.3.3 Status of Audit Committee or Supervisors

a. Status of Audit committee: Not applicable at this moment
b. Status of Supervisors: As shown in (1).
c. Descriptions of the communications between the independent directors, the internal auditors, and the independent accountants:
． Communication guidelines between independent directors and internal auditors:
(a) The manager of internal auditors arranges meeting with independent directors at least once per quarter, communicates and replies to the independent directors, and reports to the independent directors with regard to internal auditing matters.
(b)The auditing report and follow-up report are delivered to each independent director for inspection via E-mail or in person before the end of the month following the completion of internal auditing matters.
(c) In the event of major unexpected incident, the manager of internal audit should reports immediately to the independent directors via phone or via other forms of communication.
． Communication guidelines between independent directors and independent accountants:
(a) Independent accountants should at least once per year communicate with independent directors regarding the company’s financial statements or impact of statute amendments.
(b) Meetings may be held at any time in case of major special conditions.
d. Summary of past communications between independent directors and the manager of internal auditors:

Dates	Communication matters	Results	Results
		~~Suggestion~~ from independent directos	Actions taken after the communication
2020/3/20	Annual audit plan actual implementation and tracking summary report for year 2019 Internal Control Self-assessment Report for year 2019 Audit report for 1st quarter of 2020	N/A	Continue to report to the Board of directors
2020/5/12	Audit report from March to May of 2020	N/A	Continue to report to the Board of directors
2020/6/10	Audit report from April to June of 2020	N/A	Continue to report to the Board of directors
2020/8/7	Audit report from June to August of 2020	N/A	Continue to report to the Board of directors
2020/11/6	Audit report from September to November of 2020	N/A	Continue to report to the Board of directors
2021/3/18	Annual audit plan actual implementation and tracking summary report for year 2020 Internal Control Self-assessment Report for year 2020 Audit report for 1st quarter of 2021	N/A	Continue to report to the Board of directors

e. Summary of past communications between independent directors and the independent accountants:

Dates 2020/11/6	Communication matters	Results of execution
	Independent directors’ meeting with certified public accountants: Ms. Hsin-I Kuo and Ms. Tzu-Hui Li and Associate	Independent directors had fully communicated with accountants regardingreview

	Chin-Mei Li from KPMG Taiwan. Topics including: 1. Reviewer ’s responsibility for reviewing mid-term financial reports 2. Scope of review, financial analysis 3. Finding of review 4. Key review matters 5. Independence report 6. Updates on important accounting standards or relating explanatory letters, Securities and Exchange Act and Tax Act. 7. Annual review plan 8. Other important matters	of the first three quarters of 2020 financial report, recent important accounting principles and updates on government acts.

3.3.4 Status of Corporate Governance Operation and its Differences from the Law “Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons:

Assessment items	Implementation status	Implementation status	Implementation status	Differences from the Law “Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons:
	Y	N	Explanation
Does Company follow “Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” to establish and disclose its corporate governance practices?		V	Although the Company has not yet set the code of corporate governance practice, it has been implemented in the rules and regulations and daily operations in accordance with the spirit and principles of corporate governance. The company had sets up a part-time corporate governance unit based on actual needs. Ms. Mei-Lien Lin, deputy director of the Financial Management Department and Ms. Hsin-Pei Liao, manager of the Operations Management Department, are both responsible for corporate governance related matters.	Same as explanation
Shareholding Structure & Shareholders’ Rights 1. Does Company have Internal Operation Procedures for handling shareholders’ suggestions, concerns, disputes and litigation matters. If yes, has these procedures been implemented accordingly? 2. Does Company possess a list of major shareholders and beneficial owners of these major shareholders? 3. Has the Company built and executed a risk management system and “firewall”	V V V		1. BRTLED has designated appropriate personnels, such as spokesperson, acting spokesperson, and the legal Department…etc to handle shareholder suggestions, concerns, disputes or litigation matters. 2. BRTLED has designated appropriate personnels to track the shareholdings of directors, officers, and top ten shareholders through the common share transfer agent. 3. BRTLED has set up internal rules in the Company’s Internal Control System and Affiliated Corporations	No major differences No major differences No major differences

Assessment items	Implementation status	Implementation status	Implementation status	Differences from the Law “Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons:
	Y	N	Explanation
between the Company and its affiliates? 4. Has the Company established internal rules prohibiting insider trading on undisclosed information?	ˇ V		Management. 4. BRTLED has established its “Insider Trading policy” that applies to all employees, officers and members of the Board of Directors of the Company and to any other person having a duty of trust or confidence, with respect to transactions in the Company’s securities. This policy, which is available on the company’s official website. prohibits any insider trading and the Company regularly provides internal training on this issue.	No major differences
Composition and Responsibilities of the Board of Directors 1. Has the Company established a diversification policy for the composition of its Board of Directors and has it been implemented accordingly?	V	ˇ	1. The company's "Rules for Directors and Supervisors Election" stipulates that the members of the board of directors should have the knowledge, skills and literacy necessary to perform their duties, and be elected according to their specifications. Diversification Policy for the composition of the Board of directors and implementation: The company pays attention to gender equality in the composition of the board of directors, and the target ratio of female directors is more than 20%. In this term, the board contains total of 7 directors, including 3 female directors, with a ratio of 43%. The relevant implementation situation is as follows: (1) The goal of the diversification policy includes more than two seats of female	No major differences

Assessment items				Implementation status	Differences from the Law “Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons:
	Y	N		Explanation
2. Other than the Compensation Committee and the Audit Committee which are required by law, does the Company plan to set up other Board committees? 3. Has the Company set performance assessment rules and methods for the board of directors and does it perform this evaluation every year? 4. Does the company regularly evaluate the independence of the CPA?	V	V V	2. 3. 4.	directors, one or more seats with financial accounting professional background, and more than half of seats with knowledge and experiences in related industry fields. (2) The current (18th) board members have complied with the company's board of directors’ diversificationpolicy. The company established a compensation committee through the resolution from the board of directors’meeing on December 22, 2011. In addition to the above committee, the company currently has no other functional committees. The company has formulated the board of directors’ performance assessment rules and methods, which was approved by the board of directors on 2019/11/12, and completed 2020 board performance assessments through internal self-evaluation. The results generated from the board of directors and compensation committee were announced in the board meeting on 2021/3/18. The company regularly conducts the evaluation Name Gender Tsung-Jen Liaw M v v v Shu-June Wang F v Chi-Chia Hsieh M v v v Hsin-Pei Liao F v v v Po-Yuan Lin M v v Ming-ChangHuang M v v Chwen-Shell Ho F v v Subject related to diversification policy Management Industrial knowledge Leadership Finance/ Accounting	Same as explanation Same as explanation No major differences

Assessment items	Implementation status	Implementation status	Implementation status	Differences from the Law “Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons:
	Y	N	Explanation
			report of the independence of CPA accountants based on the following evaluation items each year and asks accountants to issue an independence statement. (1) The accountant has no direct or significant indirect financial interest relationship with the company. (2) The accountant has no financing or guarantee with the company or the company's directors. (3) The accountant has no close business relationship and potential employment relationship with the company. (4) Accountants and members of their audit team have not held positions as directors or managers of the company or had significant influence on audit work in past two years. (5) Accountants did not provide non-audit services that may directly affect the auditing. (6) Accountants do not intervene in stocks or other securities issued by the company. (7) The accountant did not act as a defender of the company or coordinate conflicts with other third parties on behalf of the company. (8) The accountant has no kinship relationship with the company's directors, managers or personnel who have a significant influence on the audit case. On 2021/3/18, the board of directors of the company passed the independent assessment of 2021 CPA

Assessment items	Implementation status	Implementation status	Implementation status	Differences from the Law “Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons:
	Y	N	Explanation
			accountants.
Does the TWSE/TPEx listed company have a dedicated unit/staff member in charge of the Company' corporate governance affairs (including but not limited to providing information required for director/supervisor's operations, convening board/shareholder meetings in compliance with the law, apply for/change company registry, and producing meeting minutes of board/shareholder meetings)?	V		Our manager from financial division and manager from operational management division are concurrently in charge of the company’s corporate governance affairs.	No major differences
Does the Company establish communication channels and dedicate section for stakeholder on its website to respond to important issues of corporate social responsibility concerns?	V		The Company has set “Stakeholder Zone” and have the contact information for stakeholders to on its website to respond to major concerns regarding coporate social responsibilities from stakeholders.	No major differences
Has the company appointed a professional stock affairs agency for shareholders affairs?	V		The Company authorized “The Transfer Agency Department of Chinatrust Commercial Bank” as stock service agency to handle shareholder transactions.	No major differences
Disclosure of information 1. Does the Company set up website to disclose financial operations and corporate governance information?	V		1. The Company has placed financial and corporate governance information on its website. www.brtled.com	No major differences

Assessment items	Implementation status	Implementation status	Implementation status	Differences from the Law “Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons:
	Y	N	Explanation
2. Has the Company adopted other measures (such as English website, a designated person responsible for the collection and disclosure of information, implementation of the spokesman system, the legal entities announcements uploaded to website, etc.) to disclose information? 3. Does the company announce and declare the annual financial report within two months after the end of the fiscal year, and announce and declare the first, second, and third quarter financial reports and the monthly operating situation early within the prescribed time limit?	V V		2. The Company has official website with both Chinese and English for the Spokesperson and deputy spokesperson to disclose relevant information. 3. The company announced and declared its annual financial report within three months after the end of the fiscal year. The company also announced and declared the first, second, and third quarter financial reports and monthly operating results within the prescribed time limit.	No major differences No major differences
Does the Company have other important information for better understanding the Company’s corporate governance system (including but not limited to interests and rights of employees, care for employees, relation with investors, relation with suppliers, relation with interested parties, continuing education of directors and supervisors, execution of risk management policies and risk measuring standards,execution of customerpolicies,	V		1. Interests and rights of employees: The Company has always treated employees in good faith to ensure their legal interests and rights in accordance with the Labor Standards Act. 2. Care for employees: by adopting a welfare system and good education and training, a relationship of mutual trust has been established with employees. Such as: employee benefits and community cultural and recreational activities and entertainment, health clinic grants and medical advice, the Companyalsoprovides staffquarters,	None

Assessment items	Implementation status	Implementation status	Implementation status	Differences from the Law “Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons:
	Y	N	Explanation
liability insurance for the Company’s directors and supervisors)?			rented accommodations for staff, accommodation care, parking lots, etc. 3. Relations with banks, customers, suppliers and other interested parties: the company has provided fluent communication channels to protect both parties’ legal rights and interests. 4. Execution of customer policies: stable and good relations with customers are maintained with the view of creating profits. 5. Execution of the company’s articles of association, internal auditing system to regurlay or irregularly evaluate risk management policy and risk measuring standards. `。` 6. Continuing education of directors and supervisors:all directors and supervisors are required to take 6 hours of training. New appointed directors and supervisors are required to take 12 hours of training.

Assessment items	Implementation status	Implementation status	Implementation status	Differences from the Law “Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons:
	Y	N	Explanation
Please specify the measures adopted by the Company to improve the items listed in the corporate governance review result from Taiwan Stock Exchange's Corporate Governance Center and the improvement plans for items yet to be improved. The expected matters for improvement and expected matters and measures for enhancement for year 2020 and 2021 are as follows: 1. Protection of shareholders' rights and equality to shareholders: 2.9- The English version of meeting notice is expected to be uploaded 30 days before 2020 shareholders' meeting. 2.15- The English version of meeting agenda and supplementary materials is expected to be uploaded 30 days before the 2020 shareholders’ meeting. 2. Strengthen the structure and operation of the board of directors: 2.22- The company's risk management policies and procedures were approved by the board of directors on 2020/11/6. The scope of risk management, organizational structure and operation conditions have been disclosed on the company's website, and the implementation status shall be reported to the board of directors at least once a year. 2.23- The company’s board of directors approved the board of directors’ performance assessment measures on 2019/11/12, and completed a self-evaluation before the first quarter of 2021. The evaluation results are disclosed on the company’s website and annual report. 2.24- The company’s board of directors approved the establishment of an information security management policy and structure on 2020/11/6, and formulated an information security management policy and implemetation, which have been disclosed on the company’s website. 3. Improve information transparency: 3.2- The company releases both Chinese and English versions simultaneously. 3.5- In order to enhance the transparency of information, the company will upload the annual financial report disclosed in English 7 days before the shareholder meeting. 3.6- In order to enhance information transparency, the company will disclose the interim financial report in English within two months after the deadline of the Chinese version of the interim financial report. 4. Implementation of Corporate social responsibility 4.2 Established "Integrity Code of Practice and Operational Procedures and Conduct Guidelines" 4.3 Stakeholder engagement zone on the company’s website discloses stakeholders’ identities, related issues and communication channels

3.3.5 Composition, Duties and Operation of the Compensation Committee:

a. Members of the Compensation Committee

Title	Criteria Name	Meet the Following Professional Qualification Requirements, Together with at Least Five Years Work Experience	Meet the Following Professional Qualification Requirements, Together with at Least Five Years Work Experience	Meet the Following Professional Qualification Requirements, Together with at Least Five Years Work Experience	Criteria for independence (Note 1)	Criteria for independence (Note 1)	Criteria for independence (Note 1)	Criteria for independence (Note 1)	Criteria for independence (Note 1)	Criteria for independence (Note 1)	Criteria for independence (Note 1)	Criteria for independence (Note 1)	Criteria for independence (Note 1)	Criteria for independence (Note 1)	Number of other Taiwanese public companies concurrently serving as an Independent Director
		An instructor or higher position in a Department of Commerce, Law, Finance, Accounting, or other academic department related to the business needs of the Company in a public or private junior college, college or university	A Judge, Public Prosecutor, Attorney, Certified Public Accountant, or Other Professional or Technical Specialists who has passed a national examination and been awarded a certificate in a profession necessary for the business of the Company	Have work experience in the area of Commerce, Law, Finance, or Accounting, or otherwise necessary for the business of the Company	1	2	3	4	5	6	7	8	9	10
Independent Director	Ming-Chang Huang	V			V	V	V	V	V	V	V	V	V	V	0
Independent Director	Chwen-Shell Ho	V			V	V	V	V	V	V	V	V	V	V	0
Other	Chin-Hui Lin		V	V	V	V	V	V	V	V	V	V	V	V	0

Note 1 ： Directors, during the two years before being elected and during the term of office, meet any of the following situations, please tick the appropriate corresponding boxes:
Not an employee of the company or any of its affiliates.
Not a director or supervisor of the company or any of its affiliates. (The same does not apply, however, in cases where the person is an independent director of the company, its parent company, or any subsidiary, as appointed in accordance with the laws of Taiwan or with the laws of the country of the parent company or subsidiary.)
Not a natural-person shareholder who holds shares, together with those held by the person’s spouse, minor children, or held by the person under others’ names, in an aggregate amount of one percent or more of the total number of issued shares of the company or ranks as one of its top ten shareholders.
Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship, of any of the officer in the preceding 1 subparagraph, or of any of the above persons in the preceding subparagraphs 2 and 3.
Not a director, supervisor, or employee of a corporate/institutional shareholder that directly holds five percent or more of the total number of issued shares of the company or ranks as of its top five shareholders or appointed as a representative in accordance with the Company Act Article 27, Item 1 or Item 2. (The same does not apply, however, in cases where the person is an independent director of the company, its parent company, or any subsidiary, as appointed in accordance with the laws of Taiwan or with the laws of the country of the parent company or subsidiary.)
Not a director, supervisor, or employee of a company of which the majority of board seats or voting shares is controlled by a company that also controls the same of the company. (The same does not apply, however, in cases where the person is an independent director of the company, its parent company, or any subsidiary, as appointed in accordance with the laws of Taiwan or with the laws of the country of the parent company or subsidiary.)

8.

9.

Not a director, supervisor, or employee of a company of which the chairman or CEO (or equivalent) themselves or their spouse also serve as the company’s chairman or CEO (or equivalent). (The same does not apply, however, in cases where the person is an independent director of the company, its parent company, or any subsidiary, as appointed in accordance with the laws of Taiwan or with the laws of the country of the parent company or subsidiary.)
Not a director, supervisor, officer, or shareholder holding five percent or more of the shares of a specified company or institution that has a financial or business relationship with the company. (However, if such specific company or institution holds more than 20% but less than 50% of the total issued shares of the company and its independent director who concurrently serves the company, the company’s parent company, subsidiary or subsidiary of the same parent company in accordance with this law or local national laws is not limited to this.)
Other than serving as a compensation committee member of the company, not a professional individual who, or an owner, partner, director, supervisor, or officer of a sole proprietorship, partnership, company, or institution that, provides commercial, legal, financial, accounting services or consultation to the company or to any affiliate of the company, or a spouse thereof, and the service provided is an “audit service” or a “non-audit service which total compensation within the recent two years exceeds NTD500,000.
Not been a person of any conditions defined in Article 30 of the Company Act.

b. Duties:

As professionals, the committee should evaluate the salary and remuneration policies and systems of the company's directors, supervisors and managers, and make recommendations to the board of directors for their decision-making reference. However, the proposal of the supervisor's salary and remuneration shall be submitted to the board of directors for discussion. The supervisor's salary and remuneration shall be prescribed by the company's articles of association or approved by the shareholders' meeting to authorize the board to deal with:

(1) Regularly review the regulations and propose amendments.
(2) Set and regularly review the company's directors, supervisors and managers' performance goals and policies, systems, standards and structure of salary and remuneration.
(3) Regularly evaluate the salaries of directors, supervisors and managers of the company.
Implementation status of the compensation committee
(1) The company's compensation committee consists three members and the term (the third term) is from June 12, 2019 to June 11, 2022.
(2) 2020 compensation committe meeting status in twice as follow:

Title	Title	Name	Name	Name	Attendance in person (`Ｂ`)	By proxy	Attendance rate(%) (`Ｂ`/`Ａ`)(Note)	Attendance rate(%) (`Ｂ`/`Ａ`)(Note)
Convenor		Ming-Chang Huang			2	0	100%
Member		Chwen-Shell Ho			2	0	100%
Member		Chin-Hui Lin			2	0	100%
Other matters for declaration`：` 2020 compensation committee meetingdetails: Date Term Contents 2020/3/20 4thsession of second meeting The regular review of remuneration of the directors, supervisors and managers. 2020/11/6 4thsession of third meeting 1. The regular review of remuneration of the directors,supervisors and managers. 2. 2019 compensation distribution for directors, supervisors, managers and employees. 3 2020 board of directors and functional committees’ performance evaluation project									Suggestions on objection of Compensation co mmittees’ opinions N/A N/A N/A N/A
	Date		Term	Contents				Opinions	Suggestions on objection of Compensation co mmittees’ opinions
	2020/3/20		4thsession of second meeting	The regular review of remuneration of the directors, supervisors and managers.				Agreed	N/A
	2020/11/6		4thsession of third meeting	1. The regular review of remuneration of the directors,supervisors and managers.				Agreed	N/A
				2. 2019 compensation distribution for directors, supervisors, managers and employees.				Agreed	N/A
				3 2020 board of directors and functional committees’ performance evaluation project				Agreed	N/A

If the board of directors does not adopt or amend the recommendations from the compensation committee, the date, the period, the content of the motion, the resolution of the board of directors’ meeting, and the company's feedback to the opinions from the compensation committee shall be stated: No such situation.
During resolutions of the Compensation Committee meetings, if any members of the compensation committee have objections or reservations and have a record or written statement, the date, the period, the motion content, the opinions of all members and feedbacks to members ’opinions shall be stated: No such situation.

3.3.6 Corporate Social Responsibility Performance:

Assessment items	Implementation status	Implementation status	Implementation status	Differences from the Law “Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons:
	Y	N	Explanation
Implement Corporate Governance 1. Does the company conduct risk assessments on environmental, social and corporate governance issues related to the company's operations in accordance with the principle of materiality, and formulate relevant risk management policies or strategies? (Note 3) 2. Does the company set up a full-time (part-time) unit that promotes corporate social responsibility and is authorized by the board of directors to deal with it at senior management level and report the situation to the board of directors? 3. Does the company set a reasonable compensation policy, combine employee performance evaluation system with corporate social responsibility policy, and establish a clear and effective reward and punishment system?	V ˇ ˇ V V		1. The company is co-ordinated by the operation management division to manage the company ’s management of environmental protection, corporate social responsibility, integrity management, risk management and other corporate governance issues related to the company ’s operations. Each divison evaluates the relevant business risks according to their functions. The risk control mechanism is regularly audited and revised at any time. 2. The operational management division is responsible for executing corporate social responsibility. 3. The company has set up the compensation committee to assist in reviewing relevant salary policies and to combine it with employee reward and punishment system and employee assessment system. In addition, the company's articles of incorporation clearly stipulate that the pre-tax benefits for the current year after deducting the distribution of employees' compensation and the	Same as explanation No major differences No major differences

Assessment items	Implementation status	Implementation status	Implementation status	Differences from the Law “Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons:
	Y	N	Explanation
			benefits before the compensation of directors and supervisors are retained to cover the accumulated losses, the remaining balance will be allocated at least 8% for employee compensation.
Environment for sustainable development 1. Does the Company endeavor to utilize all resources more efficiently and uses renewable materials which have a low impact on the environment? 2. Does the Company establish proper environment management systems based on its industrial features? 3. Does the Company monitor the impact of climate change on its operations, and establish company strategies to save energy and reduce the emission of carbon and greenhouse gas?	V V V		1. The company aims to integrate commodities in the global environment through energy-saving and water-saving measures, and consider the product life cycle together with green environmental protection. 2. The company received the ISO 14001 environmental management system certification in 2004, and the products passed the ROHS environmental standards for toxic substances in 2005. 3. Fully adopt high efficient LED outdoor and indoor energy-saving lighting systems. Only when temperature reaches above 28 degrees,the company turns on the air-conditioning to reduce carbon. The company also stops air-conditioning for one hour during the lunch break and implement the energy saving and carbon reduction policies.	No major differences No major differences No major differences
Protect social public interests 1. Does the Companyestablishproper management	V		1. The companyhas the "human rights

Assessment items	Implementation status	Implementation status	Implementation status	Differences from the Law “Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons:
	Y	N	Explanation
methods and procedures in accordance with the relevant regulations and the international conventions on human rights? 2. Has the Company set up an employee complaint mechanism and proceed with care? 3. Does the Company provide a safe and healthy working environment for its employees and organize training on safety and health on a regular basis? 4. Does the Company establish regular communication mechanisms for employees, and inform employees of the operation changes that mayhave significant	V V V		policy" and abides labor laws and regulations to protects the rights and interests of employees, to create legal employment, to avoid sexual harassment and discrimination, and to formulate fair performance evaluation system. 2. The company is responsible for handling related matters, and has a fair trade dedicated mailbox [email protected]. It has a dedicated mobile phone number to provide an employee complaint channel, and a dedicated person handles the complaint properly. 3. The company provides a working environment that meets regulations (with access control and fire escape equipment) and cooperates with professional institutions to organize employee health inspections and safety and health education and training. The 2019 implementation situation is as follows: (1) Fire drills are held in June to strengthen employees' fire fighting concepts and emergency escape response capabilities. (2) Hold a health check in December to understand the health of employees. (3) No occupational disasters occurred in year 2019. 4. The company provides a variety of communication channels, through internal bulletin boards,e-mail or educational	No major differences No major differences No major differences

Assessment items	Implementation status	Implementation status	Implementation status	Differences from the Law “Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons:
	Y	N	Explanation
impact on employees in reasonable way? 5. Has the Company established an effective competency development career training program for employees? 6. Has the Company set up consumer protection policies and reporting procedures regarding R&D, procurement, production, operation and service processes? 7. Is the company in compliance with relevant laws and regulations as well as international standards when it comes to marketing and labeling of products and services? 8. Does the Company assess the past records of supplier’s in terms of its impact on the environment or society before the signing the contract. 9. Does the Company, in its contract with its major suppliers, include clause such as that the Company may terminate the contract any time when the supplier is found violate its social respoinsibilities,	V V V V V		announcements, etc., to immediately convey important company information to employees, and through two-way communication with employees through department meetings and business meetings. 5. The company has a complete education and training course every year according to the work needs of employees, which combines training and performance management systems to help employees develop their talents and potentials`。` 6. At present, the consumer (customer) rights and interests policy is formulated, there is a complete customer complaint system specification and a complaint channel has been established for R&D procurement, production, operations and service processes. 7. The company provides a complete product after-sales customer service system and pass relevant international safety standards and international environmental protection standards. 8. The company must pass the supplier evaluation process before and after the supplier, and record whether the supplier has a record of affecting the environment and society in the past. 9. The company must pass the supplier evaluation process before and after the supplier, and record whether the supplier has a record of affectingthe environment and societyin thepast.	No major differences No major differences No major differences No major differences No major differences

Assessment items	Implementation status	Implementation status	Implementation status	Differences from the Law “Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons:
	Y	N	Explanation
and when such violation has significant impact on the environment and society.			The company formulates the "Integrity and Integrity Transaction Commitment Letter" to request the supplier to sign back. If the employee or family members request any tangible or intangible benefits, the company will immediately notify the company to permanently stop cooperation. The company and its employees violate the regulations and mayviolate relevant criminal laws.
Enhanced information disclosure 1. Does the Company disclose relevant critical and reliable information on corporate social responsibilities on its website and MOPS?	V		The company provides relevant information through the website, and has a dedicated person responsible for data maintenance and update.	No major differences
6. If the Company makes its own corporate social responsibilities principles according to the Rules of Corporate Social Responsibility Best Practice Principles for TWSE/GTSM-Listed Companies, please state the differences: No difference.
7. Other important information that helps understand the operation situation in terms of the corporate social responsibities: The company's concept of social responsibility is the product LED produced, with the goal of integrating products with the global environment, and considering the product life cycle together with green environmental protection. When engaging in various activities, all employees should reduce the load on the environment as much as possible, abide by the relevant national regulations, comply with the operating procedures, and strive to prevent pollution. Continuous improvement of environmental management System, make full use of the maximum resources, and pursue excellent environmental performance, with the goal of achieving ISO 14000, all products meet the environmental standards of toxic substances. The practical method is as follows`：` 1. R&D for new products is oriented towards an all-round green management model of environment, resources and products. 2. Fully adopt high-efficiency LED outdoor and indoor energy-saving lighting systems from daily life. 3. Fully communicate and coordinate with employees to strive for the whole company to recognize the concept of environmental protection and establish the concept ofgreen isquality.

Assessment items	Implementation status	Implementation status	Implementation status
	Y	N	Explanation
4. In daily life, the company finds ways to minimize the use of substances that may cause environmental damage. 5. The company abides by labor laws and regulations, protects the rights and interests of employees, legally hires, is free from sexual harassment and discrimination, and has a fair performance evaluation system 6. The daily implementations: when the temperature reaches 28 degrees, the air-conditioning turned on, the air-conditioning stopped for one hour during lunch break, and implement energy-saving and carbon-reduction policies. 7. The company carries out routine physical health checks every year, so that employees can grasp their own health status. 8. Reduce unnecessary travel, set up video equipment in each plant to promote energy saving and carbon reduction for employees. 9. Implement protection of employees' work rights, promote high-quality employee welfare system and implement education and training. 10. All products have obtained relevant testing and certifications: `．`The street lamp series passed the third-party testing and energy-saving certification of TAF laboratory `．`The LED light tubes passed the certification of BSMI standard by the Bureau of Standards and Inspection of the Ministry of Economic Affairs `．`Quality system: ISO9001 / ISO14001 / IATF16949 / AS9100. `．`The spotlights, tunnel lights and landscape lights series passed the third-party testing and energy-saving certification of TAF laboratory `．`Downlights passed the third-party testing and certification of TAF laboratory `．`OA lamps passed the third-party testing and certification of TAF laboratory `．`LED light bulbs passed CE certification, neptune planetary LED bulbs passed BSMI `．`Photo Coupler safetycertification: CQC China/ CSA Canada/ UL United States/ VDE Germany
8. A clear statement shall be made if the corporate social responsibilities report of the Company passed the inspection of relevant certification agencies: The Company hasn’t prepared its annual report on corporate social responsibilities yet.

3.3.6 Status of Implementation of Ethical management:

Assessment items	Implementation Status	Implementation Status	Implementation Status	Differences from the Law “Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons:
	Y	N	Explanation
Adopt ethical management policy and scheme 1. Does the Company clarify the ethical management policy in its regulations and external documents and the commitment of board of directors and managers to active implementation? 2. Does the Company work out scheme, operation procedures and guidelines of conducts for employee education and training to prevent dishonest behaviors? 3. Does the Company adopt preventive measures to bad faith companies with higher risks of its business activities described in article 7 item 2 of the `“`Integrity Operation Practice Principles for TWSE/GTSM-Listed Companies”?	V V V		1. The company has established the " Procedures for Ethical Management and Guidelines for Conduct" and " Codes of Ethical Conduct for Directors and Managers", and signed " "Ethical management and trade" with suppliers and distributors to implement the ethical management policy. 2. The company's "Procedures for Ethical Management and Guidelines for Conduct" has procedures for preventing dishonesty, reporting system, reward and punishment, appeal system and disciplinary action. Through internal bulletin boards, emails and department meetings, employees communicate the importance of integrity. The specification is disclosed in the corporate governance section of the company ’s website for reference`。` 3. The Company's "Procedures for Ethical Management and Guidelines for Conduct" sets out business activities with high risk of dishonesty behavior and related preventive measures within the business scope, which includes the seventh article of the "Listed OTC Company Integrity Management Code" Two acts of each paragraph. In addition, the employees of the companymust sign an "employment	No major difference No major difference No major difference

Assessment items	Implementation Status	Implementation Status	Implementation Status	Differences from the Law “Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons:
	Y	N	Explanation
			agreement" with a promise of integrity, and require dealers and suppliers to sign an "integrity and integrity transaction commitment" to strengthen compliance with integrity.
Implementing Ethical management 1. Does the Company assess the integrity record of its business partners and set faithful conduct policies in the terms and conditions of its contracts? 2. Has the Company set up exclusively (or concurrently) dedicated units to be in charge of corporate ethical management which report to and are supervised by the Board of Directors? 3. Does the Company work out policies to prevent conflicts of interest and provide proper statement channels?	V V V		1. The Company's "Ethical management and trade" sets out the terms of integrity and integrity transaction, which clearly requires dealers and suppliers to make commitments on honesty and integrity and integrity transactions. Each year, the business and procurement unit evaluates the transactions in the past year and re-signs the commitment to "Ethical management and trade". 2. The company's operation department is a part-time unit, responsible for promoting the operation of the company's integrity management, and reporting the actual operation to the management meeting, and reporting to the board of directors at least once a year. 3. The company's "Procedures for Ethical Management and Guidelines for Conduct" specifies that when the personnel who execute the company's business find that they have conflicts with themselves or the legal person they represent, they should report the relevant matters to the direct supervisor	No major difference Same as explanation No major difference

Assessment items	Implementation Status	Implementation Status	Implementation Status	Differences from the Law “Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons:
	Y	N	Explanation
4. Has the Company established an effective accounting system, internal control system and audit by internal auditors or CPAs to put ethical management into practice? 5. Does the Company organize internal or external trainings in an ethical management of business regularly?	V V		and the company's special responsibility. Units and di he company has established an accounting system, internal control system and related management methods, and internal auditors regularly check the compliance of various systems.rect supervisors should provide appropriate guidance. 4. The company has established an accounting system, internal control system and related management methods, and internal auditors regularly check the compliance of various systems. 5. In addition to the promotion of integrity behavior of new employees, the company's directors, supervisors, financial accounting, auditors and senior managers must participate in internal and external education and training every year. In 2019, relevant personnel participated in courses including regulations revision, director supervision and management practice, internal control fraud inspection, insider trading, professional ethics, and economic crime legal responsibility. A total of 14 participants participated in 141 hours of related education and training. The Operations Management Department also regularly conducts online courses on "Ethical Management Education Trainingand Case Sharing",which requires all	No major difference No major difference No major difference

Assessment items	Implementation Status	Implementation Status	Implementation Status	Differences from the Law “Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons:
	Y	N	Explanation
			employees to participate. As of 2020/3/12, a total of 54 people completed 5 hours of online courses. In addition, the "Procedures for Ethical Management and Guidelines for Conduct" are disclosed in the corporate governance section of the company's website for internal and external personnel to refer to.
Report System operating status 1. Has the company set specific report and reward system to facilitate the report cannel and assign appropriate specialist accepting to spot the reported object? 2. Has the company set the standard operating procedures and related nondisclosure mechanisms to investigate reported matters? 3. Has the Company set measures to protect whistleblowers do not suffer for which he or she reported?	V V V		1. The company's "Procedures for Ethical Management and Guidelines for Conduct" has a reporting and reward system, and the responsible unit handles related matters. There is a fair trade dedicated mail box [email protected] and a dedicated mobile phone number Charge. 2. The company's "Procedures for Ethical Management and Guidelines for Conduct" are clearly stipulated that after receiving the report, the responsible unit will be responsible for identifying the relevant facts, if necessary, by the compliance of the regulations or other relevant departments to provide assistance, and for the identity of the informant And the content of the report shall be kept confidential. 3. The company keeps the identity of the informant and the content of the report confidential, and promises to protect the informant from improper handling of the report.	No major difference No major difference No major difference

Assessment items	Implementation Status	Implementation Status	Implementation Status	Differences from the Law “Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons:
	Y	N	Explanation
Enhance information disclosure 1. Does the company disclose the information of implementation and results of ethical management on its website and the MOPS?	V		1. The company disclosed the contents of the "Procedures for Ethical Management and Guidelines for Conducts" in the Corporate Governance section and public information observatories on the company's website. The relevant implementation of the promotion is also explained in the company's annual report disclosed on the above website.	No major difference
If the company develops its own integrity operation rules according to the Integrity Operation Best Practice Principles for TWSE/GTSM-Listed Companies, please state the differences: No difference.
Other important information for better understanding of the integrity operation (such as review and revision of the regulations on ethical management): The company signed "Commitments of Honesty and Cleanliness Transaction" with suppliers and distributors to jointly combat illegal acts of commercial bribery and uphold honesty and integrity and clean transactions.The company has established the "Procedures for Ethical Management and Guidelines for Conducts" to comply with relevant regulations and relevant laws and regulations on business conduct. The Companyhas a system for avoidingdirectors ’interests in the “Rules and Procedures of Board of Director Meetings”.

3.3.7. Other Company-established corporate governance rules and regulations:

Please refer to the Company’s website for the company’s Corporate Governance Principles.

3.3.8. Other Important Corporate Governance Information:

The company has established internal major information processing procedures and procedures for managing prevention of insider trading. All relevant departments handling potential major information and disclosure should comply with the relevant procedures and laws.
Employees of the company must abide by laws and internal regulations to avoid dishonesty.
The employees related to financial information transparency have obtained the relevant certificates designated by the competent authority ：

Certificates	Internal Auditors
Certified Internal Auditor CIA	2
Certification in Control Self-Assessment CCSA	2

4. 2020 Directors’ training:

Title	Name	Organizer	Course	Hours
Chairman	Tsung-Jen Liaw	~~Taiwan Corporate Governance~~ Association	~~Illegal case studies in securities and directors~~ and supervisors' responsibility	3
		~~Taiwan Corporate Governance~~ Association	The development trend of CSR and sustainable governance	3
Director	Shu-June Wang	~~Taiwan Corporate Governance~~ Association	~~Illegal case studies in securities and directors~~ and supervisors' responsibility	3
		~~Taiwan Corporate Governance~~ Association	The development trend of CSR and sustainable governance	3
Director	Chi-Chia Hsieh	Corporate Operation Association	~~How to consolidate the company's management rights by~~ effectively improving corporate governance	3
		~~Taiwan Corporate Governance~~ Association	Climate Change and TCFD	3
		~~Taiwan Corporate Governance~~ Association	~~Trends and risk management of digital technology~~ and artificial intelligence
Director	Po-Yuan Lin	~~Taiwan Corporate Governance~~ Association	~~Illegal case studies in securities and directors~~ and supervisors' responsibility	3
		~~Taiwan Corporate Governance~~ Association	The development trend of CSR and sustainable governance	3
Director	Hsin-Pei Liao	~~Taiwan Corporate Governance~~ Association	~~Illegal case studies in securities and directors~~ and supervisors' responsibility	3
		~~Taiwan Corporate Governance~~ Association	The development trend of CSR and sustainable governance	3
Independent Director	Ming-Chang Huang	~~Taiwan Corporate Governance~~ Association	~~Illegal case studies in securities and directors~~ and supervisors' responsibility	3
		~~Taiwan Corporate Governance~~ Association	The development trend of CSR and sustainable governance	3
Independent Director	Chwen-Shell Ho	~~Taiwan Corporate Governance~~ Association	~~Illegal case studies in securities and directors~~ and supervisors' responsibility	3
		~~Taiwan Corporate Governance Assn~~	~~The development trend of CSR and sustainable governance~~	~~3~~

3.3.9. Status of Implementation of Internal Control System:

1. Statement of Internal Control

Bright Led Electronics Corp. Statement of Internal Control

March 18, 2021

About the company's internal control system for 2020, based on the results of self-assessment, would like to declare the following:

The company is aware that it is the board of directors and managers’ responsibilities to establish, implement and maintain the internal control system. The company has already established such system with the purpose of providing reasonable assurances for the achievement of objectives such as the effectiveness and efficiency of operations (including profitability, performance, and asset security, etc.), reliability, timeliness, transparency of reporting, and compliance with relevant standards and relevant laws and regulations.
The internal control system has its inherent limitations. No matter how perfect the design is, an effective internal control system can only provide reasonable assurance for the achievement of the above three objectives; and, due to changes in the environment and circumstances, the effectiveness of the internal control system may vary. However, the company's internal control system has a self-monitoring mechanism. Once the deficiency is identified, the company will take corrective action.
The company determines whether the design and implementation of the internal control system is effective based on the judgment items on the effectiveness of the internal control system specified in the "Regulations Governing Establishment of Internal Control Systems by Public Companies" (hereinafter referred to as “the regulation"). The internal control system judgment items described in the "the regulation" are, according to the process of management control, composed by five elements: 1. control environment, 2. Risk assessment, 3. control operations, 4. information and communication, and 5. Supervision operations. Each element contains several items. For the aforementioned items, please refer to the "the regulation".
The company has adopted the above internal control system to judge the project and evaluate the effectiveness of the design and implementation of the internal control system.
Based on the evaluation results of the preceding paragraph, the company believes that the company's internal control system by December 31, 2019 (including supervision and management of subsidiaries), including understanding the effectiveness of operations and the degree to which efficiency goals are achieved, reports are reliable, timely, transparent and design and implementation of the internal control system are in compliance with relevant regulations and laws and regulations, are effective and can reasonably ensure the achievements of above goals.
This statement will become the main content of the company's annual report and be published in public. If the contents disclosed above are false or concealed, the legal responsibilities set by Article 20, Article 32, Article 171 and Article 174 of the Securities Exchange Law will be involved.
This statement was approved by the board of directors of the company on March 18, 2021. Of 7 directors present, no objections take place, all directors agreed with the contents of this statement, and hereby declare.

Bright LED Electronics Corp.

Chairman: Tsung-Jen Liaw

President: Tsung-Jen Liaw

The person who entrusts the accountant to review the internal control system on an ad hoc basis should disclose the accountant ’s review report: No such situation.
3.3.10. In recent years and as of the date of publication of the annual report, the company and its internal personnel were punished according to law or the company ’s internal personnel were punished by violating the internal control system or major deficiencies and improvements occur: no such situation
3.3.11. In recent years and as of the date of publication of the annual report, important resolutions from the annual shareholders' meeting and the board of directors’ meetings:
Content of resolution and implementation from the Annual Shareholders’ meeting:
- Date of 2020 Annual Shareholders’ meeting: June 10, 2020

Date of 2020 Annual Shareholders’ meeting:	June 10,2020
Important Resolution Matters	Implementation
(1) 2019 Financial statements approved	-
(2) 2019 Earnings distribution	Distributed by resolution
(3) Amendment of Article of Incorporation	Continuously abide by
(4)Re-election of one seat of supervisors	Re-elected: Hong-ChangLin

2. Important resolutions from board of directors’ meetings:

Date		Important resolution matters
2020/3/20 18th session of 5th meeting		1. New loan of funds to Kobrite Taiwan Corporation approved 2. 2019 Board of directors, supervisors, managers and employees’ compensation distribution approved 3. 2019 business reports and finance statements approved 4. 2019 profit distribution approved 5. 2019 distribution of shareholders’cash dividends approved 6. 2020 budget statements approved 7. Amendment of Articles of incorporation approved 8. By selection of one seat of supervisors approved 9. Candidate list of supervisor approved 10. Matters of convening 2020 Annual Shareholders’ meeting approved 11. Implementation of treasury stocks approved Opinions from Independent directors: N/A Implementation: Announcement and implementation have been made in accordance with the contents of various resolutions

		1. 2018 Business reports and financial statements approved 2. 2018 Employees and directors/supervisors compensation distribution approved 3. 2018 profit distribution approved 4. 2019 budget statement approved 5. Amendment of Article of Incorporation approved 6. Amendment of Procedures for Acquisition or Disposal of Assets approved 7. Amendment of Procedures for Governing Loaning of Funds and Making of Endorsements/Guarantees approved 8. Directors/ Supervisors election approved 9. Candidate list of directors, independent directors and supervisors approved 10. Matters of convening 2019 Annual Shareholders’ meeting approved Opinions from Independent directors: N/A Implementation: Announcement and implementation have been made in accordance with the contents of various resolutions, and 2019 Annual Shareholders' General Meetinghas been completed.
2020/5/12 18th session of 6th meeting		1. Review of the financial statements for the first quarter of 2020 approved 2. Loans to the subsidiary Kobrite Taiwan Corporation from the company approved Opinions from Independent directors: N/A Implementation: Announcement and implementation have been made in accordance with the contents of various resolutions
2020/6/10 18th session of 7th meeting		1. Settlement of case dividend distribution date and date of payment Opinions from Independent directors: N/A Implementation: Settlement of case dividend distribution date: 2020/7/6 Date of payment: 2020/7/29
2020/8/7 18th session of 8th meeting		1. Review of the financial statements for the second quarter of 2020 approved 2. Settlement date of cancellation of treasury shares and capital reduction: 2020/8/10 3. Confirmation on accounts receivable that are overdued more than 3 months is not a capital loan as its nature Opinions from Independent directors: N/A Implementation: Announcement and implementation have been made in accordance with the contents of various resolutions

2020 3[rd] quarter financial statements review approved 2. 2021 Auditing plan review approved 3. 2019 Board of directors, supervisors, managers and employees’ compensation distribution review approved 2020/11/6 4. Intellectual Property Management Policies and Procedures approved 18th session 5. Risk Management Policies and Procedures approved of 9[th] 6. Information Security Management Policy and Structure approved meeting Opinions from Independent directors: N/A Implementation: Announcement and implementation have been made in accordance with the contents of various resolutions 1. New loan of funds to Kobrite Taiwan Corporation approved 2. Independence Evaluation of Certified Public Accountants approved 3. 2020 Business reports and financial statements approved 4. 2020 Employees and directors/supervisors compensation distribution approved 5. 2020 profit distribution approved 6. Shareholder dividends distributed in cash approved 7. 2021 budget statement approved 8. 2020 Statement of internal control approved 9. Amendment of Rules and Procedure of the Board of Directors Meeting 2021/3/18 approved 18th session 10. Amendment of Rules and Scope of Independent Directors’ Duties of 10[th] approved meeting 11. Amendment of Rules and Organization of Compensation Committee approved 12. Amendment of Article of Incorporation approved. 13. Amendment of Rules and Procedure of the Shareholders’ Meeting approved 14. Matters of convening 2020 Annual Shareholders’ meeting approved Opinions from Independent directors: N/A Implementation: Announcement and implementation have been made in accordance with the contents of various resolutions.
3.3.12. In recent years and as of the date of publication of the annual report, any of directors or supervisors held objections with records or statements during the board of directors’ meetings and such contents: No such situation
3.3.13. In recent years and as of the date of publication of the annual report, summary of the resignation and dismissal of the company's chairman, CEO, accounting manager, finance manager, internal audit manager and research and development manager: No such situation

3.4 Information of Audit fees

3.4.1. Disclosure of individual amounts of CPA audit fees

Unit: NT $thousands

Accounting firm	Name of CPA	Audit fee	Non-Audit Fee		Audit period
			Pricing report	Other
KPMG	Hsin-I Kuo Tzu-Hui Li	3,850	-	-	2020/1/1~12/31
KPMG	Wei-Tun Yeh	-	280	100	2020/1/1~12/31

3.4.2. If the non-audit fees paid to CPA, the accounting firms where CPA belongs, and its affiliated enterprises, are more than a quarter of the audit public fees, the amount of audit and non-audit public fees and non-audit services shall be disclosed: No such situation
3.4.3. If the audit fee has decreased by more than 15% compared with the previous year, the amount, proportion and reason for the reduction of audit fee shall be disclosed: No such situation.

3.5 Information on Change of CPA

3.5.1 About the previous CPA:

bout theprevious CPA:
Replacement date	March 29, 2021
Reason and explanation	Internal personnel relocation made by the accounting firm
Explain that the client or accountant terminated or did not accept the appointment	Party Situation			CPA	Client
	Voluntarytermination			-	-
	No longer accept (continue)appointment			-	-
Opinions and reasons for the issuance of verification reports other than unqualified opinions within the latest two years	N/A
Any disagreement with the issuer	Y		Accounting principals orpractices
			Disclosure of financial reports
			Scope or stepof auditing
			Others
	N	V
	Explanation
Other disclosed matters	N/A

3.5.2 About the successor of CPA

bout the successor of CPA
Accountingfirm	KPMG
Name of CPA	Yu-FengHsu,Tzu-Hui Li
Appointed date	March 29,2021

Consultation matters N/A and results on the accounting treatment methods or accounting principles of specific transactions and possible issuance of financial reports before appointment Successor of CPA’s written N/A opinions on accounting matters that are different from the previous CPAs’

3.5.3. Reply from the previous CPA: Not applicable

3.6 The company's chairman, president, finance or accounting managers who has worked in an accounting firm or its affiliated company within last year should disclose name, title and the period of working in the office of the visa accountant or its affiliated company: No such situation
3.7 In recent years and as of the date of publication of the annual report, directors, supervisors, managers and shareholders whose shareholding ratio exceeds 10% share transfer and share pledge changes:
3.7.1. Changes in the equity of directors, supervisors, managers and major shareholders

Unit: thousand shares

Title	Name	2020	2020	Till April 9, 2021	Till April 9, 2021
		Increase (decrease) in the number of shares held	Increase (decrease) in the number of pledged shares	Increase (decrease) in the number of shares held	Increase (decrease) in the number of pledged shares
Chairman/President/ 10% or above shareholders	Tsung-Jen Liaw	90	0	0	0
Director	Shu-June Wang	0	0	0	0
Director/10% or above shareholders	Wan-Hsu Investment Co., Ltd Representative- Po-Yuan Lin	1,023	0	0	0
Director	Chi-Chia Hsieh	0	0	0	0
Director	Hsin-Pei Liao	0	0	0	0
Independent director	Ming-ChangHuang	0	0	0	0
Independent director	Chwen-Shell Ho	0	0	0	0
Supervisor	Ju-ChingLiao	0	0	0	0
Supervisor	Chin-Lung Huang	0	0	0	0
10% or above shareholders	Yi-Run Investment Co., Ltd.	929	0	0	0
Vice president	Lin-Lin Chen	10	0	0	0
Associate VP	Ming-Kuei Yu	0	0	0	0

Associate VP	Wei-ChengChen	0	0	0	0
Associate VP	Hsiao-Yen Chang	0	0	0	0
Associate VP	Ying-Chen Hsiao	0	0	0	0
Finance manager	Mei-Lien Lin	0	0	0	0

3.7.2. Stock transfer information

Directors, supervisors, managers and shareholders whose shareholding ratio exceeds 10% of the shareholder's equity transfer or equity pledged equity transfer are relatives: No such situation.

3.8 Relationship information, if among the company's 10 largest shareholders any one is a related party or a relative within the second degree of kinship of another.

April 9, 2021

							April	April	9, 20
Name	Me		Spouse and minor children		Hold in the name of others		The top ten shareholders if inter-related to a party or a spouse, or kinship within second degree, etc.		Note
	Shares	Shareholding ratio	Shares	%	Shares	%	Name	Relationship
Yi-Run Investment Co., Ltd.	31,859,212	17.54%	-	-	0	-	Shu-June Wang Tsung-Jen Liaw	Representative Director
Wan-Hsu Investment Co., Ltd	27,378,397	15.07%	-	-	0	-	Tsung-Jen Liaw Shu-June Wang	Representative Director
Tsung-Jen Liaw	21,028,417	11.57%	5,766,547	3.17%	0	-	Wan-Hsu Investment Co., Ltd Yi-Run Investment Co., Ltd. Shu-June Wang Hsin-Pei Liao Ju-Ching Liao	Representative Director Spouse Daughter Kinship within second degree
Shu-June Wang	5,766,547	3.17%	21,028,417	11.57 %	0	-	Yi-Run Investment Co., Ltd. Wan-Hsu Investment Co., Ltd Tsung-Jen Liaw Hsin-Pei Liao	Representative Director Spouse Daughter
Hsin-Pei Liao	3,292,333	1.81%	34,000	0.02%	0	-	Tsung-Jen Liaw Shu-June Wang	Father Mother
Po-Yuan Lin	2,291,596	1.26%	0	-	0	-	Ju-Ching Liao Chung-Yao Lin	Mother Father
Ju-Ching Liao	2,240,541	1.23%	1,690,929	0.93%	0	-	Tsung-Jen Liaw Chung-Yao Lin	Kinship within second degree Spouse

						Po-Yuan Lin	Son
Chung-Yao Lin	1,690,929	0.93%	2,240,541	1.23%	-	Ju-Ching Liao Po-Yuan Lin	Spouse Son
Ju-Hao Liao	1,341,188	0.74%	-	-	-	Tsung-Jen Liaw Ju-Ching Liao	Kinship within second degree Kinship within second degree
Standard Char tered Trusts Credit Suisse International Investment Account	963,000	0.53%	-	-	-	-	-

3.9 The total number of shares and total equity stake held in any single enterprise by the company, its directors and supervisors, managers,

and any companies controlled either directly or indirectly by the company

Comprehensive shareholding ratio

Unit: thousand shares; %

			Unit:	Unit:	thousand shares; %	thousand shares; %
Reinvestment (Note)	Investment by the company		Directors, supervisors, managers and investments that directly or indirectly control businesses		Comprehensive investment
	Shares	%	Shares	%	Shares	%
Wanhui Enterprise Co., Ltd. KoBrite Corp. Lisheng International Industrial Co., Ltd. American Bright Wanxu Enterprise Co., Ltd. Powertip Image Corp.	11,460 8,783,545 35,740 52 2,993 5,820	99.65% 92.64% 59.57% 15.63% 23.03% 19.04%	40 - 17,177 - 3,249 218	0.35% - 31.96% - 25.00% 0.71%	11,500 8,783,545 44,700 52 6,264 6,013	100.00% 92.64% 91.53% 15.63% 48.03% 19.75%

Note ： The company's long-term investment uses the equity method

4. Capital and Shares

4.1 Capitalization Capital formation history:

	Y/M	Issued Price	Approved share capital	Approved share capital	Approved share capital	Paid-in capital	Paid-in capital	Paid-in capital	Note	Note	Note	Note	Note	Note
			Shares (thousand)		Amount (NT $thousand)	Shares (thousand)		Amount (NT $thousand)	Source of equity		Those who use property other than cash to offset the share capital		Others
	1981/06 1984/10 1987/04 1991/08 1995/08 1997/08 1998/12 1999/09 2000/09 2001/09 2002/09 2003/08 2004/08 2005/08 2006/08 2007/08 2007/09 2008/08 2009/09 2010/09 2017/05 2020/08	1,000 1,000 1,000 10 10 10 20 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10	1.13 7 20 6,000 10,000 19,500 75,000 75,000 75,000 100,000 100,000 122,000 122,000 174,000 174,000 174,000 200,000 250,000 250,000 250,000 250,000 350,000		1,130 7,000 20,000 60,000 100,000 195,000 750,000 750,000 750,000 1,000,000 1,000,000 1,220,000 1,220,000 1,740,000 1,740,000 1,740,000 2,000,000 2,500,000 2,500,000 2,500,000 2,500,000 3,500,000	1.13 7 20 6,000 10,000 19,500 35,000 42,700 51,990 63,000 72,000 82,000 104,600 125,000 145,000 157,000 168,000 183,440 194,682 196,674 186,674 181,674		1.13 7,000 20,000 60,000 100,000 195,000 350,000 427,000 519,900 630,000 720,000 820,000 1,046,000 1,250,000 1,450,000 1,570,000 1,680,000 1,834,400 1,946,824 1,966,742 1,866,742 1,816,742	Cash issuance of stock Cash issuance of stock Cash issuance of stock Cash issuance of stock Cash issuance of stock Cash issuance of stock Cash issuance.turnover. employee bonus Turnover.employee bonus Surplus.employee bonus Turnover. transfer. employee bonus Turnover.employee bonus Surplus.employee bonus Turnover.transfer. employee bonus Turnover.employee bonus Turnover.employee bonus Turnover.employee bonus Cash issuance Turnover.employee bonus. Surplus.transfer. employee bonus Turnover.employee bonus Capital reduction by treasury stock Capital reduction by treasury stock		N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A		`－` `－` `－` `－` `－` `－` `－` (88) Taiwan Finance Cert.(1) No.70838 (89) Taiwan Finance Cert.(1) No.71432 (90) Taiwan Finance Cert.(1) No.146154 Taiwan Finance Cert.(1) No. 0910148771 Taiwan Finance Cert.(1) No. 0920129544 SFB Cert.(1)No. 0930129606 FSC Cert. (1)No. 0940129144 FSC Cert. (1)No. 0950130503 FSC Cert. (1)No. 0960031969 FSC Cert. (1)No. 0960031777 FSC Cert. (1)No. 0970032588 FSC Cert. (release)No. 0980036139 FSC Cert. (release)No. 0990033948 FSC Cert. (rules)No. 1060007749 FSC Cert. (rules)No. 1090345719
				Approved share capital Note Outstanding shares Treasury stock Unissued shares Total 171,674,224 10,000,000 168,325,776 350,000,000 Listed company stock
	Types of shares			Approved share capital										Note
				Outstanding shares			Treasury stock			Unissued shares		Total
Registered common stock				171,674,224			10,000,000			168,325,776		350,000,000		Listed company stock

4.2 Shareholders structure

4.2 Shareholders structure	4.2 Shareholders structure	4.2 Shareholders structure
			April 9,2021
Structure Quantity	Govt	Financial inst.	Other corporates	Foreign inst./ Foreigner	Person	Treasury stock	Total
Number	0	2	19	58	14,970	1	15,050
Number of shares held	0	12,562	59,675,584	4,479,017	107,507,061	10,000,000	181,674,224
Shareholding ratio	-	0.01%	32.85%	2.47%	59.17%	5.50%	100.00%

4.3 Distribution profile of share ownership

April 9, 2021

			April 9,2021
Shareholding grading	Number of shareholders	Number of shares held	Shareholding ratio
1-999	3,951	636,652	0.35%
1,000-5,000	8,441	17,858,929	9.83%
5,001-10,000	1,392	10,989,855	6.05%
10,001-15,000	422	5,250,998	2.89%
15,001-20,000	282	5,246,913	2.89%
20,001-30,000	206	5,195,672	2.86%
30,001-40,000	103	3,697,422	2.04%
40,001-50,000	61	2,851,867	1.57%
50,001-100,000	113	8,211,356	4.52%
100,001-200,000	45	6,251,905	3.44%
200,001-400,000	17	4,120,178	2.27%
400,001-600,000	3	1,460,396	0.80%
600,001-800,000	3	2,049,921	1.13%
800,001-1,000,000	1	963,000	0.53%
1,000,001 shares above	10	106,889,160	58.83%
Total	15,050	181,674,224	100.00%

4.4 List of major shareholders

ist of major shareholders
Name Shares	Number of shares held	Shareholding ratio
Yi-Run Investment Co., Ltd.	31,859,212	17.54%
Wan-Hsu Investment Co., Ltd	27,378,397	15.07%
Tsung-Jen Liaw	21,028,417	11.57%
Shu-June Wang	5,766,547	3.17%
Hsin-Pei Liao	3,292,333	1.81%

Po-Yuan Lin	2,291,596	1.26%
Ju-Ching Liao	2,240,541	1.23%
Chung-Yao Lin	1,690,929	0.93%
Ju-Hao Liao	1,341,188	0.74%
Standard Chartered Trusts Credit Suisse International Investment Account	963,000	0.53%

4.5 Stock price, net worth, surplus and dividend information for the past two years

Items	Year	Year	2019	2020	As of the current year May7,2021
Stock price/ share	Highest		17.55	16.95	22.90
	Lowest		9.96	9.18	14.8
	Average		13.14	14.21	18.55
Net worth/ share	Before distribution		14.87	14.86	`－`
	After distribution		14.05	`註`1	`－`
EPS	Weighted average number of shares		183,747,000	173,237,000	171,674,224
	Surplusper share		1.28	0.74	0.28
Dividend/ share	Cash dividend		0.82	0.80	`－`
	Stock granted	`－`	`－`	`－`	`－`
		`－`	`－`	`－`	`－`
	Accumulated unpaid dividend		`－`	`－`	`－`
ROI analysis	P/E (%)		10.27	19.20	`－`
	PBR (%)		16.02	17.75	`－`
	Dividend yield		6.24%	5.63%	`－`

Note 1 ： The current year's surplus distribution has not been completed Note 2 ： P/E (%) ＝ Average closing price per share of the year/ earnings per share Note 3 ： PBR (%) ＝ Average closing price per share of the year/ cash dividend per share Note 4 ： Dividend yield ＝ Cash dividend per share/ average closing price per share of the year

4.6 Dividend policy and implementation status

4.6.1. The company’s dividend policy:

Before dividend distribution, the company shall first complete the taxation, then make up for the accumulated losses from the past years. According to regulations, the company shall also set aside proportion of earnings as legal reserves and special reserves for each fiscal year. In addition to the undistributed surplus of the previous year, after considering the funds required for operations, at least 50% of the shareholders ’dividends shall be allocated, and the proportion of cash dividends shall

not be less than 10%.

4.6.2. Implementation status:
On March 18, 2021, the board of directors approved 2020 surplus distribution. The company's distributable surplus at the end of 2020 was NT$ 194,893,682. The company planned to distribute cash dividends of NT$ 0.80 per share based on the number of outstanding shares, so the total cash dividends will be NT$ 137,339,379, which accounting for about 52% of the distributable surplus. The plan will be able to be executed after approval from the shareholders' general meeting.

4.7 The impact of the proposed bonus shares at the shareholders' meeting on

the company's operating performance and earnings per share: No proposal for allotment of bonus shares at 2020 shareholders’ meeting.

4.8 Compensation of employees, directors and supervisors

4.8.1. The percentage or scope of compensation of employees, directors and supervisors as stated in the Articles of incorporation:
According to the Article 20 section 1 from the company’s Articles of incorporation, the company shall allocate the income before tax to retain the accumulated loss from the past years before distribution of employees',
directors' and supervisors' compensations. If there is a remaining, it should be allocated to employees’ compensation not less than 8% and the directors and supervisors’ compensations not more than 2%. The resolutions for distribution ratio of employees’, directors’ and supervisors’ compensation distribution ratio and such compensations are based on stock or cash shall be approved by the board of directors with more than two-thirds of directors attending and half seats of the attended directors agree to during the board of directors’ meeting. Such resolution shall also be reported at the annual shareholders’ meeting. Employee compensation whether distributed as stock or cash shall include employees from subsidiaries that meet certain conditions.

4.8.2. The basis for estimating the amount of employees’, directors’

and supervisors’ compensations at the current period, the basis for calculating the number of shares for employees’ compensation by stock distribution and the accounting treatment when the actual distribution amount is different from the estimated amount:
(1) The basis for estimating the amount of employees’, directors’
and supervisors’ compensations at the current period: According to the company’s Articles of incorporation, the company will allocate 8% of the income before tax that is distributable to employees’ compensation in cash and 2% of the income before tax that is distributable to directors and supervisors’ compensations in cash
(2) The basis for calculating the number of shares for employees’ compensation by stock distribution: If the employees’ compensation is distributed by stocks from the resolution of the board of directors, the calculation of the number of issued shares is based on the closing price of the day before the board of directors decides to issue new shares and considers the effect of ex-rights and ex-dividends. The company's employee compensation for 2019 has not been resolved to be distributed by stocks.
(3) The accounting treatment when the actual distribution amount is different from the estimated amount: After the annual consolidated financial statements are still subject

to change, resulting in a difference between the actual distribution amount and the estimated amount, it is treated as a change in accounting estimates and adjusted for accounting in next fiscal year.

4.8.3. Compensation distribution resolved by the board of directors: The company decides to distribute the employees and directors and supervisors compensations for 2020 which resovled by the board of directors on March 18, 2021. The income before tax before the distribution for 2020 is NT$ 194,893,682. No accumulated loss needs to be retained, so will allocate 8% of income before tax in cash as employees’ compensation, which is NT$ 15,591,495. The company will also allocate 2% of income before tax in cash as directors’ and supervisors’ compensation which is NT$ 3,897,874. The above distribution complies with the company's Articles of incorporation.
4.8.4. Actual distribution of employees and directors and supervisors’ compensation from the previous year:

The company allotted the 2019 surplus to employees, directors and supervisors with amounts of NT$ 22,374,409 and NT$ 22,374,409 respectively. The distribution was completed for directors and supervisors. For employees, the remaining undistributed amount of NT$ 7,374,409 will be completed in 2021.

4.9 Status of share buyback:

4.9.1. The repurchase of the company's shares in the last three years (completed):

		May06,2020
	Second	Third
Purpose of share repurchase	Transfer to employees	Maintain the company credit and shareholders' right
Type of share repurchase	Common	Common
Quantityof share repurchase	10,000,000 shares	5,000,000 shares
Repurchase period	2019/8/12~2019/10/11	2020/3/23~2020/5/22
Price range of repurchase	NT$10.5~ NT$17.5	NT$7.5~ NT$20.45
Actual quantity of share repurchase	10,000,000 shares	5,000,000 shares
Total amount of actual repurchase	NT$149,507,225	NT$70,903,406
The ratio of the actual quantity repurchased to the quantity scheduled to be repurchased	100%	100%
Cancellation of shares	0	5,000,000 shares
Accumulated shares of the company	10,000,000 shares	10,000,000 shares
Accumulated shares held by the company accounted for the total number of issued shares	5.36%	5.5%

4.10 Issuance of corporate bonds: No outstanding corporate bonds nor corporate bonds under processing.
4.11 Preferred shares: No such situation.
4.12 Issuance of overseas depositary receipts: No such situation.
4.13 Status of employee Stock Option Plan: No outstanding employee stock options.
4.14 Status of employee restricted stock: No such situation.
4.15 Status of M&A or transfer of new shares issued by other companies: No such

situation.

4.16 Financing plans and implementation: No such situation.

5. Operational highlights

5.1 Business Activities

5.1.1 Scope of business
(1) The company’s main business:

The company and its subsidiaries focus on producing photoelectric components. The main products include light-emitting diodes (LED), display modules, infrared component modules, surface mounted device (SMD) type of light-emitting diodes and light-emitting diode’s related application modules It is widely used in consumer electronics industry, lighting market, automotive market and other fields.

(2) Proportion of sales revenue:

Proportion of sales revenue:
Products	%
Visible LED	40 %
Invisible LED	55 %
Engineering project	1 %
Others	4 %

(3) The company’s current products:
The company's main products are light-emitting diode components and its related applications, which are divided into visible light and invisible
Visible: Lamp, Display, SMD, PLCC, LED Light bar assembly, outdoor/indoor LED luminaries.

Invisible: Infrared, Motor assembly, Sensor assembly.

(4) Products under development:

The company's product development focuses on smart home application, security and safety control, aviation and transportation electronics, gaming application, and various lighting products according to the recent emerging technologies development and market needs. The company also focuses on development of multi-functional and high-efficiency light sources, automotive LEDs, ambient light sensor (ALS), UVC LED application technologies and smart street lighting.

5.1.2 LED industry overview

(1)Status and development of the industry:

Light emitting diode (LED) has the inherent advantages of small size, multi-color, good visibility, capability for mass production, etc. It is easy to make multiple light-emitting elements, and this light-emitting diode element has no filament and low power consumption With rapid response and long lifespan, it can be widely used in consumer electronics devices, information industry, communications, automobiles, traffic signs, industrial instruments, and outdoor/indoor display and other fields.

The LED industry is inseparable from the development of technology. The innovation of technology products also synchronously drives the research and development of LED application. In addition to the development of consumer electronics, household products, screen displays and remote applications, LED’s characteristics are also widely used with regard to security and safety control,

testing, medical and aesthetic products, with the development of related product industries, LED application technology has also been continuously improved.

(2) LED industry chain:

The LED industry is mainly formed by vertical mode, which can be divided into upstream for wafers, die, midstream for LED packaging and downstream for LED application products, and LED application is the part among others that has high added value in the entire industry chain.

==> picture [468 x 99] intentionally omitted <==

(3) Product development trends and competition:
a.Advanced technology developed for current LED application product

End products such as home appliances and customer electronics products, has intellectual upgrading which increased the demand for infrared LEDs (IR LEDs) and SMD LEDs with various sensors and other components for packaging. It has also driven the improvement of related processes and machinery and equipment to greatly improve the yield. The photo coupler, applied on security, monitoring, medical, smart meters, etc areas, have been greatly improved on product manufacturing process and related packaging and testing technology. The related IC, sensors and other assembly and testing technology have also been greatly improved.

b. LED Automotive market continues to grow

Automotive LED lighting, was introduced as a high-end model, now has gradually replaced traditional automotive lighting. According to LEDinside reports, as LED prices drop and its functionalities increase, the output value and penetration of automotive LED lighting continue to grow. In 2018, the annual output value of automotive LEDs increased by 15%. Among them, the demand for headlights and automotive panels has risen rapidly. However, due to higher requirements for LED manufacturers to be in the automotive pre-installation market and more and more auto manufacturers want to integrate the sensing element with headlights, the current automotive pre-installation market is still dominated by Osram, Nichia, Lumileds…etc. The remaining LED manufacturers mainly get into automotive’s aftermarket and refit market, or get into applications with relatively low thresholds applications such as interior lights and tail lights…etc.

c. UV-C LED market demand increases significantly in the future

UV-C LED applications include three major growth derivatives: still water sterilization, surface sterilization and flowing water sterilization. Still water sterilization and surface sterilization applications (such as air purification, home appliances, etc.) have low time requirements, but because these applications are consumer home appliances, the requirements for product cost performance are quite high, resulting in short-term UV-C LED can not be widely popularized. As

for the sterilization application of flowing water, rapid sterilization is required, and the power requirement of the product is high. Therefore, the UV-C LED power specification must be higher than 40-50mW. LEDinside believes that the biggest challenge for UV-C LEDs at this stage is that the technology and efficiency need to be improved, but such technical obstacles will have the opportunity to gradually overcome in the future. Since the end of 2019, the spread of pneumonia virus around the world has caused close attention and demands in public health and related areas. In particular, the added sterilization function of various products can increase the added value of their products, so UV-C LED is an indispensable key. Its future demand is expected to increase significantly.

5.1.3 Recent technology and research and development

[(1) R&D expenses invested in the most recent year and up to the date of publication ] of the annual report:

Unit: NT $thousand

Year	R&D expenses
2019	13,778
1stquarter of 2020	3,630

(2) Successfully developed technology or product:

The company has been developing LED light sources and commercial lighting products over the years, including the use of its own patented technology and special manufacturing processes. Now has successfully developed a new generation of sapphire 360-degree full-period LED light sources (Filasun & Filament and other products), with a 360-degree lighting angle. The new generation of products with a coloring index above 90 and a luminous efficiency of 180lm / W not only responds to energy saving and environmental protection, but also has the advantage of an environmental light source that can completely replace the Uz bulb, giving people a new visual experience. The development of a new generation of Filasun sapphire headlights, currently used as in the car brake lights, warning lighting products, has also improved. The product has quick response, luminous efficiency to add the value of practicality to the product. The application of special light sources and the development of niche products are also quite fruitful. In addition, there are related achievements in the development of LED component products in recent years. Especially in the development of related Ambient Light Sensor products, photo coupler products, IR LED products and UV-C LED products.

a. Indoor lighting product

10W Neptune Planetary Bulb has obtained domestic CNS, BSMI

and energy-saving related certificates and won the 2015 Golden Dot Design Award. The 3W sapphire full-circular candle light and night light, 10W light engine bulb, 25W high-efficiency sapphire bulb and 10W amber bulb have all obtained domestic BSMI certificates. Lighting applications are superior to other commodity standards in the industry.

b. Outdoor lighting product

The company developed the full range of moduled street lights series and obtaied the certification of the street light energy-saving label in 2015 as the first company in Taiwan. In 2017, a series of new generation of street lights

and related landscape lights, flood lights, tunnel lights and other products with high-efficiency 120lm / W have been developed. The specifications meet the road lighting requirements and complied with National Standards of the Republic of China (CNS). The price is competitive. The series can provide safe lighting environment. The light source adopts its own patented technology and produced by special manufacturing process. Moreover, it passed the difficult LM80 test to increase lifespan and usability. For getting domestic or foreign public construction projects, the products are relatively superior than others. In 2018, product improvement for the series of street lamps and related landscape lamps, floodlights, tunnel lamps and other products carried out to increase the luminous efficiency more than 140lm / W.

c. Special light source application

In addition to the traditional white lighting, a special wavelength of LED suitable for plant growth has also been developed and has been actually adopted by farms and plant factories. The medical IR infinite multi-level conversion grid light is suitable for hospitals and other medical places. 2 ft and 4 ft T8 tube products, ambient lighting for medical use and low voltage high efficiency lighting for vehicles also obtained related National Standards of the Republic of China (CNS) certificates.

d. Products for niche markets

The company’s infrared and motor module products had been developed in cooperation with customers and successfully applied to smart robots and smart sweeper products. Facing the upcoming era of "Industry 4.0!" Smart manufacturing, the pace of development of photo relays (Photo Relay) is also actively keeping up. Compared with mechanical relays, photo relays have continuous overlap, low current drive and fast response. One of the indispensable components of intelligent production machinery. e. Sterilization applications

Recently, the UV-C LED products that the company has been focusing on development have had preliminary results and the related projects are currently entering into sample stage. The products will be tested in conjunction with related industries to confirm their effectiveness. Therefore, in the future, our UV-C LED series will officially be the main focus for mass production and promotion.

(3) Future R&D plans:

In 2020, we continued to work on LED projects with special specifications, multiple chips and multiple wavelengths, which are mainly used in medical, automotive and aerospace fields. In ad-dition, the previous development’s phase of photo relay has been continuously carried out on schedule. Compared with mechanical relays, photo relays have longer life span, low current drive and fast response. They are one of the indispensable components in the field of intelligence manufacturing and mechanical manufacturing.

Finally, with regard to smart city concept, due to the popularity of street lamps in Taiwan, besides lighting, there are many additional applications can be attached. Smart street lighting are mainly

designed and installed with controllers, sensors and other components so that the street lighting can have more functions services attached, at the same time reducing the original costs of building a base for these functions. For example, with wireless transmission attached, when the lamp fails, the controller can directly detect and report to the control center and call for maintenance. Various types of environmental monitoring can be attached using multiple sensors, which to detect harmful gases, noise, PM2.5, wind speed, wind direction, temperature, humidity, and etc., to report back to the control center and to alert the public. The lamp itself can also use the lighting sensors to detect ambient lights periodically and automatically adjust lamp’s brightness to meet comfort for vision without wasting power. In addition to the above intelligent functions, street lighting may support connections between 4G/5G transmitters as miniature base stations in the future or can possibly support and cooperate with other fields like vehicle charging, and etc. There are unlimited possibilities could be accomplished in the future.

(4) Expected R&D expenditure in the coming year:
- The company's R&D expenditures accounted for about 1% of revenue in the past two years. The company has not expanded the development of emerging products yet. It is expected that the R&D expenditures in 2021 will increase to approximately 3% of revenue.
5.1.4 Long-term and short-term business development plans

Short-term plan: For the existing application products used in including smart home appliances, security and safety control, aviation and transportation electronics, gaming applications, and various lighting fields, the company continues to improve the qualities and functions of these products and achieve customization and differentiation to fulfill customers’ demands of adding more values on their final products. For emerging technological products using new application technologies, the company will accelerate the R&D development in order to grasp new market opportunities and increase revenues and profits.

Long term plan: The company's development strategy is to constantly seek

differentiated markets, avoid price competition in the expansion of production capacity, and cross-border cooperation to enhance the added value of its own or the other party's existing or future products.

5.2 Summaries of market, production and sales

5.2.1 Market analysis
(1) The sales area and market share of the company's products

Unit: NT $thousand

	Unit: NT $thousand	Unit: NT $thousand
Year Area	2019
	Sales revenues	Ratio (%)
China	658,050	48%
Taiwan	270,464	20%
United States	120,875	9%
Korea	207,763	15%
Others	118,535	9%
Total	658,050	100%

(2) Applications of main products

Products	Main applications
Visible LED	Computer and computing peripherals, communications, electrical appliances, firefighting, medical and aesthetic equipment, lighting, automotive electronics and display,…etc.
Invisible LED	Industrial automatic control, home appliances, motor products, security, remote control for home appliances,…etc.

(3) Applications of main products

As environmental awareness continues to rise, low-energy light source products continue to be developed and widely used in various household appliances, consumer electronics, medical and aesthetic medical, and automotive electronics. The future market demand for LED components will show a steady growth trend. However, due to the vicious price competition from manufacturers in China, the market demand has grown but the profits have shrunk.

(4) Competitiveness

a. Wide range of product applications

The LED components are indispensable parts in electronic commodities. Electrical appliances used in daily life are mostly related to them. They are irreplaceable products. Customers are widely from consumer electronics, computers and peripheral equipment, telecommunications , Fire protection, security, automotive electronics and other related industries, the market demand is still showing a growth trend.

b. Sophisticated production technology

The company has been established for more than 30 years and has

sophisticated and excellent production technology. The company is one of the excellent manufacturers of LED component manufacturing industry and obtained ISO14000, ISO / TS16949 and AS9100 quality certifications. Under highly automated production, product quality is well recognized by customers.

c. Integration of upstream and downstream and stable supply of raw materials The company has divisions from LED upstream wafers, LED brackets to LED packaging for various manufacturing stages to ensure sufficient raw material

supplies and stable quality.

(5) Advantages and disadvantages of development prospects and countermeasures
a. Favorable factors
Market demand continues to grow: Due to the global energy exhaustion crisis, environmental awareness is on the rise. The LED components are low-energy consumption products that can be widely used in consumer electronics, computers and peripheral equipments, telecommunications, medical, fire protection, security, automotive electronics and other related industries in order to produce indispensable parts for related products. The market demand continues to be optimistic.
Excellent technology and integration of upstream, midstream and downstream: After decades of development of LED industry in Taiwan, the integration of upstream, midstream and downstream technologies has been stable and mature. Its excellent production technology and product quality have always been highly competitive internationally, and our company is also one of the strong cornerstones of the domestic LED industry. With sophisticated production technology, the company also strengthens the competitiveness in the industry through integration of upstream, middle and downstream, so that the company can develop continuously.
- b. Unfavorable factors and countermeasures
- Vicious competition from manufacturers in China: The vigorous development of LED industry in recent years has driven more manufacturers to enter the industry and Chinese manufacturers have engaged in vicious competitions under government policy subsidies. A large number of low-priced and inferior products have caused an imbalance in market supply and demand.
- Countermeasure: To avoid falling into vicious competition, the company focuses on manufacturing differentiated and high-quality products by improving product quality, and constantly develops new product applications in order to expand markets.
- The production environment continues to deteriorate: The advantages that brought by the original internationalized tasks divide model have shrunk because of the rising labor consciousness and protectionism from various countries. The cost of production bases is increasing day by day, and the high capitalization investment makes it difficult to transfer production bases. The company has set up a production plant in Mainland China. In recent years, it has faced a continuous increase in labor costs, rising prices, cancellation of preferential taxes, and the protection policies of the local government, which has deteriorated the operating environment.
- Countermeasure: The company actively increases the proportion of production automation and process improvement to reduce production costs and improves the competitiveness of products. At the same time, it adopts lean management and strictly reduces unnecessary unprofitable activities.

5.2.2 Production process of main products

(1) Lamp (2) Display (3) Chip Led

5.2.2 Production process of main products 1) Lamp (2) Display	5.2.2 Production process of main products 1) Lamp (2) Display	(3) Chip Led
Die Die bonding Ag-epoxy Wire bonding Dispensing Molding Long bake First front cut Tinning Second front cut Testing Back cut Binning Packing Warehousing PCB Short bake Long bake Testing Binning Packing Warehousing Die Die bonding Ag-epoxy Wire bonding Arraying elastic cover Sealing Vaccum mixing		Die
		Die bonding
		Ag-epoxy

		Wire bonding

		Molding

		Long bake

		Washing

		Drying
		Cutting

	Binning	Stripping

		Cleaning

		Drying

		Testing

		Binning

		Packing

		Warehousing

(4) Infrared emitting modules (5) Infrared receiving modules

Die	Die	Die

Die bond		Die bond

Ag-epoxy		Ag-epoxy

Wire bonding		Wire bonding

Dispensing		Dispensing

Molding		Molding

Long bake		Long bake

First front cut		First front cut

Tin	ning	Tinning
Back cut
		Back cut

Power transmit testing
		Photocurrent testing

Packing
		Packing

Warehousing
		Warehousing

5.2.3 Main raw material supply status

The main products of the company are LED components. The main raw materials are wafers, brackets and printed circuit boards (PCB). Due to the integration of upstream and downstream work within the group, the main raw materials can be supplied by external manufacturers, and also be supplied by KoBrite, Lisheng Electronics and the reinvestment company Yirun Electronics and other suppliers who have stable supply sources.

5.2.4 The name of the manufacturer (customer) and its import (sales) volume, proportion and reasons for the increase and decrease in the volume of the import (sales) volume that accounted for more than 10% of the import (sales) volume in one of the most recent two years
(1) Manufacturers that accounted for more than 10% of total purchases in any of the most recent two years

	2019	2019	2019		2020	2020	2020		1stquarter in 2021	1stquarter in 2021	1stquarter in 2021
Name	Amount	% of net purchases throughout theyear	Relationship	Name	Amount	% of net purchases throughout theyear	Relationship	Name	Amount	% of net purchases throughout theyear	Relationship
OptoTech Corporation	78,907	14%	N/A	OptoTech Corporation	71,017	13%	N/A	OptoTech Corporation	12,820	8%	N/A
DongGuan Li-Sheng	50,800	9%	Sub- subsidiary	DongGuan Li-Sheng	70,101	13%	Sub- subsidiary	DongGuan Li-Sheng	22,870	14%	Sub- subsidiary
DongGuan KoBrite	56,209	10%	Sub- subsidiary	DongGuan KoBrite	61,873	11%	Sub- subsidiary	DongGuan KoBrite	29,052	17%	Sub- subsidiary
Others	377,519	67%	-	Others	337,927	63%	-	Others	103,460	61%	-
Net purchases	563,435	100%		Net purchases	540,918	100%		Net purchases	168,202	100%

OptoTech Corporation is one of the company's wafer suppliers. The company has comprehensively considered the quality, price and delivery situation of the raw material in procurement system. In order to avoid excessive concentration, it maintains good relations with multiple suppliers.

(2) Customers who accounted for more than 10% of total sales in any of the most recent two years

	2019	2019	2019		2020	2020	2020		1stquarter in 2021	1stquarter in 2021	1stquarter in 2021
Name	Amount	% of net sales throughout theyear	Relationship	Name	Amount	% of net sales throughout theyear	Relationship	Name	Amount	% of net sales throughout theyear	Relationship
AB	168,828	10%	Affiliated	AB	101,388	7%	Affiliated	AB	14,192	4%	Affiliated
Others	1,594,831	90%	-	Other	1,274,299	93%	-	Other	322,027	96%	-
Net sales	1,763,659	100%		Net sales	1,375,687	100%		Net sales	336,219	100%

5.2.5 Production and sales value table of the last two years

(1) Production value of major products in the last two years

Unit: Kpcs∕NT $thousand

				Unit: Kpcs∕NT$thousand	Unit: Kpcs∕NT$thousand	Unit: Kpcs∕NT$thousand
Production Year Value Majorproducts	2019			2020
	Production capacity	Yield	Output value	Production capacity	Yield	Output value
Visible LED products	1,500,000	1,254,811	585,737	1,500,000	1,197,569	533,387
Invisible LED products	1,000,000	553,455	883,532	1,000,000	646,790	666,042
Total	2,500,000	1,808,266	1,469,269	2,500,000	1,844,359	1,199,429

The above capacity and output are calculated based on the number of wafers

(2) Sales volumes for the last two years

Unit: Kpcs ∕ NT $thousand

					Unit: Kpcs`∕`NT $thousand	Unit: Kpcs`∕`NT $thousand	Unit: Kpcs`∕`NT $thousand	Unit: Kpcs`∕`NT $thousand
Sales year Value Major products (or departments)	2019				2020
	Domestic sales		Overseas sales		Domestic sales		Overseas sales
	Quantity	Value	Quantity	Value	Quantity	Value	Quantity	Value
Visible LED products	135,219	144,981	1,119,592	440,756	133,950	131,062	1,063,619	402,325
Invisible LED products	18,162	17,856	535,293	865,676	22,757	22,303	624,033	643,739
Construction projects		248,294		0		82,835		0
Others		3,706		42,390		34,265		59,158
Total	153,381	414,837	1,656,438	1,348,822	156,707	270,465	1,687,652	1,105,222

The above quantity is the sales quantity.

5.3 Overview of employees in the past two years

	Year	2019	2020	2021/5/7
Number of employees	Director employees	0	0	0
	Indirector employees	78	77	76
	Total	78	77	76
	Average age	41	41	46
Average years of service		10	10	13
Education distribution ratio	PhD	5	2	2
	Master degree	9	8	8
	Bachelor degree	51	54	53
	High school	10	10	10
	Below	3	3	3

Note: The above information is from parent company Bright LED Electronics Corporation only not including directors who are not employees.

5.4 Expenditures for environmental protection

5.4.1 The company aims to produce products that are integrated into the global environment, and implements an important mission for environmental protection. The company is mainly engaged in the packaging business of light-emitting devices and sensing devices. The Group's environmental management philosophy is that there is no environmental pollution in the production process, and it complies with the local government's environmental protection policies
5.4.2 Regarding investment in major equipments for the prevention and control of environmental pollution, usages and potential benefits: Not applicable.
5.4.3 In the past three years, the company was in the course of improving environmental pollution. If there are incidents of pollution disputes, it shall indicate its handling: N/A.
5.4.4 In the past three years, the total amount of damages (including compensation) suffered by the company due to pollution of the environment, its future countermeasures (including improvement measures) and possible expenditures: N/A
5.4.5 The impact of the current pollution situation and its improvement on the company's earnings, competitive position and capital expenditures and any expected major environmental capital expenditures in the next three years: N/A
5.4.6 In response to the impact of RoHS on the company's financial and business situation: all of the company's products have complied with RoHS regulations, so there is no impact on business and financial aspects.

5.5 Labor relation

5.5.1 Employee welfare measures:

The company was established in 1981. In order to ensure that employees work with peace of mind and have no worries about life, they have formulated work rules for employees in accordance with the labor-based laws, and established a Labor Retirement Reserve Supervision Committee, which is responsible for the supervision and use of retirement reserves. An employee welfare committee is set up to coordinate the planning of employee benefits and the management of the income and expenditure of benefits throughout the year.

All employees of the company enjoy labor insurance and national health insurance according to law.
All employees of the company enjoy special leave according to law.
The overtime pay of employees of the company is paid according to law.
The employees of the company all enjoy the rights to buy the company stocks.
The company's employees can enjoy some course subsidies and scholarships for courses related to work.
2020 Employee trainings:

Categories	Number of courses	Total visits	Total hours
Professional	5	4	56
General	2	16	4
Management skills	1	1	8
New employee orientation	8	8	16
Total	16	29	84

The employees of the company are given leave in accordance with the provisions of the Labour Fundamental Law during the wedding and funeral, and enjoy the subsidy of welfare.
The employees of the company can receive gift (coupon) during the three major festivals every year; In addition to the rights, senior personnel may receive souvenirs.
The company's employees can receive the birthday gift (coupon).
The employees of the company have the right to participate in domestic and foreign tourism organized by the employee welfare committee.
The employees of the company have the right to participate in the company’s arrangement for employee health checks.

5.5.2 Retirement system and implementation:

The company has labor retirement regulations and in accordance with (76) New Taipei City No. 41057, set up a labor retirement fund supervision committee, which is responsible for the custody and use of retirement funds. In addition, the company allocates a certain percentage of the retirement reserve according to the salary of the employee every month, and stores it in the special account of the "Brigh LED Electronics Co., Ltd. Labor Retirement Reserve Supervision Committee" in the Bank of Taiwan. As of March 31, 2018, the amount of the retirement reserve fund, provided by the Company, in the Bank of Taiwan was NT $15,032,000. Since July 1, 2005, in conjunction with the implementation of the Labor Pension Regulations (hereinafter referred to as the "new system"), existing employees who originally applicable to old regulation, if they choose

to apply the new system, or new employees who join after the new system adopted determine their years of service by the definite appropriation system. The pension payment is paid by the company at a monthly rate of 2% of the monthly salary, which is stored in the individual account of the labor pension.

5.5.3 Labor management situation:

The company has always upheld the spirit of independent management. Each department or each member has effective communication channels and spaces to understand each other, and to discuss with each other through business meetings to effectively communicate, so the labor-management relationship is extremely harmonious.
5.5.4 In the most recent year and up to the date of publication of the annual report, losses suffered due to labor disputes: N/A
5.5.5 Any disputes or need for coordination between labor and management: N/A.

5.5.6 Human Right Policy declaration:

Bright LED Electronics Corp. Human Rights Policy

1. General purpose

This is a human rights protection policy stated by the company to support and follow the spirit of human rights conventions from international organizations such as the United Nations Universal Declaration of Human Rights, the Global Covenant, and the United Nations Guiding Principles on Business and Human Rights in order to provide such comfortable working environment with secured human rights.

2. Scope of application

All relevant companies affiliated to the company are informed in accordance with this policy statement.

3. Declaration

We abide by relevant international human rights conventions and comply with the spirit of localization, provide equal employment conditions for local labor and employ diversity.

We care employee health and safety-physical examination, workplace safety.
No Child labor
Prohibition of any form of forced labor
No unfair treatment given due to discriminations based on race, gender, religion, age, political preferences…etc.
No extension of working hours in violation of the law.
We provide impartial opportunity of promotion and compensation increase.
Smooth communication among employees
We value right of privacy- legal us of personal data collection
We respect employees’ freedom of association and assembly and protection of right to organize.
This policy statement had been submitted to the general manager for approval. Same shall apply to amendments and abolitions.

5.6 Important contracts: N/A

6. Financial highlights

6.1 Condensed balance sheet and consolidated income statement information for the last five years

6.1.1 Condensed balance sheet

Consolidated Balance Sheet-International Financial Reporting Standards

			Unit: NT$thousand	Unit: NT$thousand	Unit: NT$thousand	Unit: NT$thousand	Unit: NT$thousand
Year Items		2016	2017	2018	2019	2020	2021/3/31 (after auditing)
Current assets		2,276,306	2,107,446	2,027,895	2,018,295	2,007,328	2,047,544
Property, plant and equipment		820,884	718,481	634,949	557,937	488,697	478,482
Intangible assets		-	-	-	-	-	-
Other assets		639,710	686,342	691,402	957,355	984,039	974,984
Total assets		3,739,900	3,512,269	3,354,246	3,533,587	3,480,064	3,501,010
Current liabilities	713,414	569,460	516,441	556,064	542,254	556,163	472,076
	862,753	728,133	675,114	Note 1	Note 1	Note 1	Note 1
Noncurrent liabilities		107,832	80,077	53,650	130,511	118,246	117.685
Total liabilities	821,246	649,537	570,091	686,575	660,500	678,848	519,263
	970,585	808,210	728,764	Note 1	Note 1	Note 1	Note 1
Equity attributable to owners of parent company		2,719,409	2,719,236	2,664,610	2,731,434	2,699,256	2,705,807
Share capital		1,966,742	1,866,742	1,866,742	1,866,742	1,816,742	1,816,742
Capital reserve		458,973	441,559	441,608	441,683	421,959	421,980
Retained e arning	431,797	490,517	440,642	573,929	558,413	606,157	578,101
	282,458	331,844	281,969	Note 1	Note 1	Note 1	Note 1
Other equity		(48,407)	(79,582)	(84,382)	(1,413)	51,649	10,435
Treasurystock		(89,696)	-	-	(149,507)	(149,507)	(149,507)
Noncontrollingequity		199,245	143,496	119,545	115,578	120,308	121,355
Total equity	2,918,654 2,769,315	2,862,732	2,784,155	2,847,012	2,819,564	2,827,162	2,725,718
		2,704,059	2,625,482	Note 1	Note 1	Note 1	Note 1

Note 1: 2020 earnings distribution has not been resolved by the shareholders' meeting.

Individual Balance Sheet-International Financial Reporting Standards

			Unit: NT$thousand	Unit: NT$thousand	Unit: NT$thousand	Unit: NT$thousand	Unit: NT$thousand
Year Items		2016	2017	2018	2019	2020	March 31, 2021 (Reviewed)
Current assets		1,057,846	1,153,108	1,113,113	1,132,096	1,080,065	Note 2
Property, plant and equipment		55,853	54,132	52,343	50,917	58,726
Intangible assets		-	-	-	-	-
Other assets		2,923,177	3,079,843	3,101,878	3,101,878	3,339,890
Total assets		4,036,876	4,287,083	4,267,334	4,523,682	4,478,681
Current liabilities	1,244,061	1,500,504	1,556,365	1,733,790	1,727,716	1,733,790
	1,393,400	1,659,177	1,715,038	1,875,130	Note 1	Note 1
Noncurrent liabilities		73,406	67,343	46,359	38,458	51,709
Total liabilities	1,317,467	1,567,847	1,602,724	1,792,248	1,779,425	1,792,248
	1,466,806	1,726,520	1,761,397	1,933,588	Note 1	Note 1
Share capital		1,966,742	1,866,742	1,866,742	1,866,742	1,816,742
Capital reserve		458,973	441,559	441,608	441,683	421,959
Retained earning	431,797	490,517	440,642	573,929	558,413	573,929
	282,458	331,844	281,969	342,589	Note 1	Note 1
Other equity		(48,407)	(79,582)	(84,382)	(1,413)	51,649
Treasury stock		(89,696)	-	-	(149,507)	(149,507)
Total equity	2,719,409	2,719,236	2,664,610	2731,434	2,699,256	2731,434
	2,570,070	2,560,563	2,505,937	2,590,094	Note 1	Note 1

Note 1: 2020 earnings distribution has not been resolved by the shareholders' meeting. Note 2: There is no individual financial statements reviewed by CPA in 1[st] quarter of 2021 yet.

6.1.2 Condensed Income Statements

Consolidated Income Statement-International Financial Reporting Standards

Unit: NT$thousand	Unit: NT$thousand	Unit: NT$thousand	Unit: NT$thousand	Unit: NT$thousand	Unit: NT$thousand	Unit: NT$thousand
Year Items	2016	2017	2018	2019	2020	March 31, 2021 (Reviewed)
Operating income	2,168,224	1,972,727	1,650,740	1,763,659	1,375,687	266,611
Operating Margin	422,460	470,029	347,114	424,542	377,486	53,363
Operating (loss) profit	89,483	125,093	24,271	139,731	107,740	(7,266)
Non-operating income and expenses	101,607	77,931	86,990	119,816	74,349	13,123
Income before tax	191,090	203,024	111,261	259,547	182,089	5,857
Business unit net profit for the period	152,628	184,551	86,910	233,879	133,115	3,119
Loss of closed business	-	-	-	-	-	-
Net profit (loss) for the period	152,628	184,551	86,910	233,879	133,115	3,119
Other comprehensive income in the current period (Income after tax)	(16,421)	(33,970)	(6,863)	82,182	50,501	(114,273)
Total consolidated profit and loss for theperiod	136,207	150,581	80,047	316,061	183,616	(111,154)
Net profit attributable to owner of parent company	176,586	209,660	109,022	234,486	128,125	4,226
Net profit attributable to noncontrolling equity	(23,958)	(25,109)	(22,112)	(607)	4,990	(1,107)
Total comprehensive profit and loss belongs to the owner of the parent company	174,969	177,838	103,998	318,874	178,886	(107,713)
Total consolidated profit and loss attributable to non-controllingequity	(38,762)	(27,257)	(23,951)	(2,813)	4,730	(3,441)
EPS (NT $)	0.90	1.12	0.58	1.28	0.74	0.02

Note: 2016-2020 reviewed and certified by CPA.

Individual Income Statement-International Financial Reporting Standards

		Unit: NT$thousand `2017` `2018` `2019` `2020` March 31, 2021 (Reviewed) 1,446,760 1,183,219 1,126,907 885,128 Note 2 202,686 177,949 148,597 224,970 68,864 67,224 31,597 111,398 153,027 64,305 220,115 64,007 221,891 131,529 251,712 175,405 209,660 109,022 234,486 128,125 (31,822) (5,024) (5,024) 50,761 177,838 103,998 84,388 178,886 1.12 0.58 1.28 0.74	Unit: NT$thousand `2017` `2018` `2019` `2020` March 31, 2021 (Reviewed) 1,446,760 1,183,219 1,126,907 885,128 Note 2 202,686 177,949 148,597 224,970 68,864 67,224 31,597 111,398 153,027 64,305 220,115 64,007 221,891 131,529 251,712 175,405 209,660 109,022 234,486 128,125 (31,822) (5,024) (5,024) 50,761 177,838 103,998 84,388 178,886 1.12 0.58 1.28 0.74	Unit: NT$thousand `2017` `2018` `2019` `2020` March 31, 2021 (Reviewed) 1,446,760 1,183,219 1,126,907 885,128 Note 2 202,686 177,949 148,597 224,970 68,864 67,224 31,597 111,398 153,027 64,305 220,115 64,007 221,891 131,529 251,712 175,405 209,660 109,022 234,486 128,125 (31,822) (5,024) (5,024) 50,761 177,838 103,998 84,388 178,886 1.12 0.58 1.28 0.74	Unit: NT$thousand `2017` `2018` `2019` `2020` March 31, 2021 (Reviewed) 1,446,760 1,183,219 1,126,907 885,128 Note 2 202,686 177,949 148,597 224,970 68,864 67,224 31,597 111,398 153,027 64,305 220,115 64,007 221,891 131,529 251,712 175,405 209,660 109,022 234,486 128,125 (31,822) (5,024) (5,024) 50,761 177,838 103,998 84,388 178,886 1.12 0.58 1.28 0.74	Unit: NT$thousand `2017` `2018` `2019` `2020` March 31, 2021 (Reviewed) 1,446,760 1,183,219 1,126,907 885,128 Note 2 202,686 177,949 148,597 224,970 68,864 67,224 31,597 111,398 153,027 64,305 220,115 64,007 221,891 131,529 251,712 175,405 209,660 109,022 234,486 128,125 (31,822) (5,024) (5,024) 50,761 177,838 103,998 84,388 178,886 1.12 0.58 1.28 0.74
Year Items	`2016`	`2017`	`2018`	`2019`	`2020`	March 31, 2021 (Reviewed)
Operating income	1,571,654	1,446,760	1,183,219	1,126,907	885,128	Note 2
Operating Margin	338,885	202,686	177,949	148,597	224,970
Operating (loss) profit	203,145	68,864	67,224	31,597	111,398
Non-operating income and expenses	7,605	153,027	64,305	220,115	64,007
Income before tax	210,750	221,891	131,529	251,712	175,405
Net profit (loss) for the period	176,586	209,660	109,022	234,486	128,125
Other comprehensive income in the current period (Income after tax)	(1,617)	(31,822)	(5,024)	(5,024)	50,761
Total consolidated pro fit and loss for the period	174,969	177,838	103,998	84,388	178,886
EPS (NT $)	0.90	1.12	0.58	1.28	0.74

Note 1: 2016-2020 reviewed and certified by CPA. Note 2: There was no individual financial statements reviewed by CPA in 1[st] quarter of 2021 yet.

6.1.3 Names and audit opinions of CPAs in the last five years

Year	Accounting firms	CPAs	Opinions
2016	KPMG	Hui-Chih Kou Hsin-Yi Kuo	Unqualified opinion
2017	KPMG	Hui-Chih Kou Hsin-Yi Kuo	Unqualified opinion
2018	KPMG	Hui-Chih Kou Hsin-Yi Kuo	Unqualified opinion
2019	KPMG	Hsin-Yi Kuo Tzu-Hui Li	Unqualified opinion
2020	KPMG	Hsin-Yi Kuo Tzu-Hui Li	Unqualified opinion

6.2 Financial analysis for the most recent 5 years

6.2.1 Consolidated Financial Analysis-International Financial Reporting Standards

Year Analyzed items	Year Analyzed items	Financial analysis in latest five years (Note 1)	Financial analysis in latest five years (Note 1)	Financial analysis in latest five years (Note 1)	Financial analysis in latest five years (Note 1)	Financial analysis in latest five years (Note 1)	As of March 31, 2021 (Note 2)
		2016	2017	2018	2019	2020
Financial structure (%)	Debt-to-asset ratio	21.96	18.49	17.00	19.43	18.98	19.25
	Long-term funds as a percentage of Property, plant and equipment	368.69	409.59	446.93	416.70	601.15	615.46
Liquidity (%)	Current ratio	319.07	370.08	392.67	362.96	370.18	368.16
	Quick ratio	268.00	294.68	325.45	306.15	313.95	308.68
	Interest coverage multiples	61.19	74.85	65.24	51.96	57.32	94.04
Operating performance	Receivable turnover ratio (times)	3.12	3.36	3.10	3.69	2.63	0.59
	Average cach collection days	116.99	108.63	117.74	98.92	138.78	154.66
	Inventory turnover (times)	5.59	4.64	4.67	5.91	4.59	0.96
	Average inventory turnover days	65.29	78.66	78.15	61.75	79.52	95.05
	Payable turnover ratio (times)	4.63	4.40	4.70	4.90	3.32	0.72
	PPE turnover ratio (times)	2.41	2.56	2.44	2.61	2.68	0.70
	Total assets turnover (times)	0.58	0.54	0.48	0.51	0.39	0.10
Profitability	Return on assets(%)	4.13	5.15	2.57	6.91	3.87	1.42
	Return on shareholders' equity(%)	5.26	6.38	3.08	8.31	4.70	1.74
	Ratio of net profit before tax to paid-in capital(%)	9.72	10.88	5.96	13.90	10.02	3.19
	Net profit rate(%)	7.04	9.36	5.26	13.26	9.68	14.63
	EPS (NT $)- after retrospective adjustment	0.90	1.12	0.58	1.28	0.74	0.28
Cash flow	Cash flow ratio(%)	24.99	16.29	57.82	48.80	58.09	12.59
	Net Cash Flow Allowance Ratio(%)	Note 3	105.50	117.36	153.00	166.80	161.29
	Cash reinvestment ratio(%)	2.78	(0.96)	2.42	3.22	3.22	1.31
Leverage	Operating leverage	2.62	1.94	4.97	1.86	2.01	1.59
	Financial leverage	1.04	1.02	1.08	1.04	1.03	1.02
Reasons for changes in various financial ratios in last two years (increased or decreased changes of more than 20%): 1. In 2020, due to the impact of the epidemic, the revenue in the first half of the year fell sharply, and the annual revenue decreased by about 22% compared with the previous year. Due to the shortage of raw materials, the number of preparation days increased, and the inventory increased, resulting in the account receivable turnover rate and inventory turnover rate and the accounts payable turnover rate decreased by more than 20% compared with the previous year. The average days of cash receipt and average days of sales also increased relatively. 2. In 2020, due to the impact of the epidemic, revenue decreased by 22%. Although costs and expenses have been reduced, operating profit, net profit before tax and net post-tax revenue still decreased by more than 20% compared with the same period last year, resulting in total asset turnover and profitability ratios have dropped by more than 20% compared with the sameperiod lastyear.
Note 1: Reviewed and certified by CPA Note 2: Reviewed and certified by CPA Note 3: The financial statements using IFRS are less than 5 years.

6.2.2 Individual Financial Analysis-International Financial Reporting Standards

Year Analyzed items (Note 4)	Year Analyzed items (Note 4)	Financial analysis in latest five years (Note 1)	Financial analysis in latest five years (Note 1)	Financial analysis in latest five years (Note 1)	Financial analysis in latest five years (Note 1)	Financial analysis in latest five years (Note 1)	As of March 31, 2021
		2016	2017	2018	2019	2020
Financial structure (%)	Debt-to-asset ratio	32.64	36.57	37.56	39.62	39.73	Note 2
	Long-term funds as a percentage of property, plant and equipment	5,000.30	5,147.75	5,179.24	5,440.01	4,684.41
Liquidity (%)	Current ratio	85.03	76.85	71.52	64.55	62.51
	Quick ratio	83.06	75.53	70.47	63.77	61.63
	Interest coverage multiples	214.96	313.08	277.32	675.83	1,415.56
Operating performance	Receivable turnover ratio (times)	2.68	2.46	2.43	3.17	2.65
	Average days for cash collection	136.26	148.37	150.21	115.14	137.74
	Inventory turnover ratio(times)	87.58	84.66	66.71	5.28	7.67
	Average days for sale of goods	1.07	0.96	0.69	69.00	47.53
	Payable turnover ratio (times)	4.17	4.31	5.47	0.61	0.40
	PPE turnover ratio (times)	28.14	26.31	22.23	21.83	16.15
	Total assets turnover (times)	0.39	0.35	0.28	0.26	0.20
Profitability	Return on assets(%)	4.44	5.05	2.56	5.34	2.85
	Return on shareholders' equity(%)	6.58	7.71	4.05	8.69	4.72
	Ratio of net profit before tax to paid-in capital(%)	10.72	11.89	7.05	13.48	9.65
	Net profit rate(%)	11.24	14.49	9.21	20.81	14.48
	EPS (NT $)- after retrospective adjustment	0.90	1.12	0.58	1.28	0.74
Cash flow	Cash flow ratio(%)	20.32	17.70	10.91	17.31	14.12
	Net Cash Flow Allowance Ratio(%)	`註`3	568.45	445.48	272.26	230.11
	Cash reinvestment ratio(%)	10.10	4.98	0.51	9.60	4.96
Leverage	Operating leverage	1.02	1.03	1.04	1.14	1.05
	Financial leverage	1.00	1.01	1.01	1.01	1.00
Reasons for changes in various financial ratios in last two years (increased or decreased changes of more than 20%): 1. In 2020, due to the impact of the epidemic, the revenue in the first half of the year fell sharply, and the annual revenue decreased by about 22% compared with the previous year. Due to the shortage of raw materials, the number of preparation days increased, and the inventory increased, resulting in the account receivable turnover rate and inventory turnover rate and the accounts payable turnover rate decreased by more than 20% compared with the previous year. The average days of cash receipt and average days of sales also increased relatively. 2. In 2020, due to the impact of the epidemic, revenue decreased by 22%. Although costs and expenses have been reduced, operating profit, net profit before tax and net post-tax revenue still decreased by more than 20% compared with the same period last year, resulting in total asset turnover and profitability ratios have dropped by more than 20% compared with the sameperiod lastyear.
Note 1: Reviewed and certified by CPA. Note 2: Individual financial statements have not been prepared. Note 3: The financial statements using IFRS are less than 5 years. Note 4: The calculation formula for financial analysis is as follows:

Financial structure
(1) Debt-to-asset ratio ＝ Total liabilities ／ Total assets
(2) Long-term funds as a percentage of property, plant and equipment ＝（ Total equity ＋ noncurrent liabilities ）／ Net value of property, plant and equipment
Liquidity
(1) Current ratio ＝ Current assets ／ Current liabilities
(2) Quick ratio ＝（ Current assets － Inventories － Prepaid expenses ）／ Current liabilities
(3) Interest coverage multiples ＝ Net income before income tax and interest expenses ／ Current interest expense
Operating performance
(1) Receivables (including account receivables and notes receivable from operation) turnover ratio ＝ Net sales revenue / Balance of average receivables (including accounts receivable and notes receivable from operation) in each period
(2) Average days for cach collection ＝ 365 ／ Receivable turnover ratio
＝。
(3) Inventory turnover ratio Cost of goods sold ／ Average inventory
(4) Payable (including account payables and notes payable from operation)turnover ratio ＝ Cost of goods sold ／ Balance of average payables (including account payables and notes payable from operation) in each period
(5) Average days for sale of goods ＝ 365 ／ Inventory turnover ratio
(6) PPE turnover ratio ＝ Net sales revenue ／ Average net value of property, plant and equipment
(7) Total assets turnover ratio ＝ Net sales revenue ／ Average total assets
Profitability
(1) Return on assets ＝〔 Profit/loss after tax ＋ Interest expenses× （１－ tax rate ）〕／ Average total assets
(2) Return on shareholders' equity ＝ Profit/loss after tax ／ Average total equity
(3) Net profit rate ＝ Profit/loss after tax ／ Net sales revenue
(4) EPS ＝（ Profit/loss attributable to owners of parent company-preferred stock dividends ）／ Weighted average number of issued shares (Note 5)
Cash flow
(1) Cash flow ratio ＝ Net cash flow from operating activities ／ Current liabilities
＝
(2) Net Cash Flow Allowance Ratio Net cash flow from operating activities in latest five years ／ (Capital expenditures ＋ Increase in inventory ＋ Cash dividends) in latest five years
＝－
(3) Cash reinvestment ratio (Net cash flow from operating activities Cash dividends) ／ (Gross value of property, plant and equipment ＋ long term investment ＋ other noncurrent assets ＋ Working capital)
Leverage
＝
(1) Operating leverage (Net operating income-variable operating costs and expenses) ／ Operating margin (Note 7)
＝－
(2) Financial leverage Operating margin ／ (Operating margin Interest expenses)
Note 5: The above formula for calculating the EPS shall pay special attention to the following when measuring:
a. Shall based on the weighted average number of common stocks rather than the number of issued shares at the end of the year
b. Anyone who has a capital increase or treasury stock shall consider the period of circulation and calculate the weighted average number of shares
c. Anyone who capitalizing retained earning or capitalizing capital reserves, when calculating the EPS for past years and half a year, shall adjust retrospectively according to the capital increase ratio and there is no need to consider the issue period of the capital increase.
d. If the preferred stocks are non-convertible accumulated preferred stocks, the current year ’s dividends (whether or not distributed) shall be deducted from the net profit after tax or increase the net loss after tax. If the preferred stocks are of non-cumulative nature, in case of net profit after tax occurs, the dividend of preferred stocks shall be deducted from the net profit after tax; if it is a loss, no adjustment is necessary.
Note 6: When analyzing cash flow, shall pay special attention to the following matters:
a. Net cash flow from operating activities refers to the net cash inflow from operating activities in the cash flow statement.
b. Capital expenditure refers to the annual cash outflow of capital investment.
c. The increase in inventory is counted only when the ending balance is greater than the beginning balance. If inventory decreases at the end of the year, it is calculated as zero.
d. Cash dividends include common stock’s and preferred stock’s.
e. Gross value of property, plant and equipment refers to the total amount of property, plant and equipment before deduction of accumulated depreciation.
Note 7: The issuer shall divide the various operating costs and operating expenses into fixed and variable. If it involves estimation or subjective judgment, the issuer shall pay attention to its rationality and maintain consistency.
Note 8: If the company's stock has no face value or face value is not NT $10 per share, the calculation of the ratio of the paid-up capital will base on the equity ratio attributable to the parent company.

6.3 Supervisors’ review report from the most recent financial report.

Supervisors’Review Report

The Board of Directors has prepared the Company's 2020 Business Report, Financial Statements, and proposal for allocation of earnings.The independent auditors, Ms. Hsin-I Kuo and Ms. Tzu-Hui Li from the accounting firm of KPMG was retained to audit Bright LED’s Financial Statements and has issued an audit report relating to the Financial Statements. The Business Report, Financial Statements, and earnings allocation proposal have been reviewed and determined to be correct and accurate by the Supervisors of Bright LED Electronics Corp. According to relevant requirements of the Securities and Exchange Act and the Company Law, we hereby submit this report.

Bright LED Electronics Corp.

Supervisors: Ju-Ching Liao

Chin-Lung Huang Hung-Chang Lin

March 18, 2021

6.4 The most recent financial statements for the parent company only

INDEPENDENT AUDITORS’ REPORT

(Parent Company Only Financial Statements)

The Board of Directors and Shareholders Bright LED Electronics Corp.

Opinion

We have audited the accompanying parent company only financial statements of Bright LED Electronics Corp. (the “Company”), which comprise the parent company only balance sheets as of December 31, 2020 and 2019, and the parent company only statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the parent company only financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the parent company only financial position of the Company as of December 31, 2020 and 2019, and its parent company only financial performance and its parent company only cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

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

Key Audit Matters

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

Key audit matters for the Company’s parent company only financial statements for the year ended December 31, 2020 are stated as follows:

Revenue Recognition

For details of accounting policies and related disclosures of revenue recognition, please refer to Notes 4 (13) and 6 (16) of the Company’s parent company only financial statements.

The description of key audit matter:

The sources of the major operating revenue of the Company are research and development, productions, and sales of light-emitting diodes indicators and display…etc and contracts of LED display, LED lighting and related operating applications/systems’ constructions. Where the Company’s revenues generated from is the concerned factor for this report users or recipients; hence, revenue recognition is considered as one of the key audit matters. Corresponding audit procedure included the following:

Evaluated appropriateness of accounting policies according to the understanding of the Company’s operation and the characteristics of the industry both acquired by the new IFRS.
Tested the design of internal control system and effectiveness of execution.
Analyzed and evaluated if there is any major irregularity by inspecting revenues generated from main customers and new customers.
Evaluated accuracy during the period of revenue recognition by inspecting new major contract added in this period and testing sales samples in accordance with its contract terms during a period of time, which is before and after the year end.

Account Receivables Valuation

For details of accounting policies of account receivables valuation, please refer to Notes 4 (6) financial instruments of the Company’s parent company only financial statements; for details of accounting estimates and accounting assumption of uncertainty of account receivables valuation, please refer to Notes 5 (1) of the Company’s parent company only financial statements; for details of explanation on account receivables valuation, please refer to 6 (3) of the Company’s parent company only financial statements.

The description of key audit matter:

Account receivables of Bright LED Electronics Corp. are distributed among customers. The account receivables valuation allowance is calculated according to the expected percentage of credit losses which takes each time interval of overdues of account receivables

and adjustments on prospective factors into consideration when estimating expected credit losses of account receivables. The management will, according to the report date, re-update new expected losses within each time interval of overdues and perform individual assessments on major overdues and payment disputes; hence, it involves sub-jective judgment from the managers and it is considered as one of the key audit matters.

Corresponding audit procedure included the following:

Evaluated reasonableness of the percentage of expected credit losses
Determined whether there is a major irregularity by comparing the turnover rate and turnover
days of accounts receivables with the company’s credit policy and other related information.
Obtained the aging schedule.
Verified total amount from the aging schedule with general ledger.
Confirmed integrity and accuracy of the aging schedule.

Responsibilities of Management and Those Charged with Governance for the Parent

Company Only Financial Statements

Management is responsible for the preparation and fair presentation of the parent company only financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRS, IAS, IFRIC, and SIC endorsed and issued into effect by the Financial Supervisory Commission of the republic of China, and for such internal control as management determines is necessary to enable the preparation of parent company only financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the parent company only financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance (including the Supervisors) are responsible for overseeing the Company’s financial reporting process.

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

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

Identify and assess the risks of material misstatement of the parent company only financial

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

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the parent company only financial statements; if such disclosures are inadequate, we are responsible to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the parent company only financial statements, including the disclosures, and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the parent company only financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the parent company only financial statements for the year ended December 31, 2019 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not

be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Ms. Hsin-I Kuo and Ms. Tzu-Hui Li.

KPMG TAIWAN Republic of China

March 18, 2021

N otice to Readers

The accompanying financial statements are intended only to present the financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such financial statements are those generally applied in the Republic of China. For the convenience of readers, the independent auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and financial statements shall prevail.

Bright LED Electronics Corp. Parent Company Only Balance Sheets

December 31, 2020 and 2019

(In Thousands of New Taiwan Dollars)

Dec 31, 2020 Amount % $ 468,690 11 100,209 2 283,159 6 40,033 1 78,500 2 14,980 - 256 - 94,238 2	Dec 31, 2020 Amount % $ 22,763 1 1,619,192 36 55,248 1 28,302 1 2,211 - - -	Dec 31, 2019 Amount % $ 19,848 1 1,669,115 37 52,799 1 1,178 - 2,674 - 8,176 -	Dec 31, 2019 Amount % $ 19,848 1 1,669,115 37 52,799 1 1,178 - 2,674 - 8,176 -
		Amount $ 19,848 1,669,115 52,799 1,178 2,674 8,176
	1,727,716 39	1,753,790	39
	21,558 - 1,777 - 25,355 1 3,019 -	1,903 4,240 24,125 8,190	- - 1 -
1,080,065 24
710,995 16 2,602,266 58 58,726 1 3,853 - 20,969 1 1,760 - 47 -
	51,709 1	38,458	1
	1,779,425 40	1,792,248	40
	1,816,742 41 421,959 9 558,413 12 51,649 1 (149,507) (3)	1,866,742 441,683 573,929 (1,413) (149,507)	41 10 13 - (4)
3,398,616 76
	2,699,256 60 $ 4,478,681 100	2,731,434 4,523,682	60 100
$ 4,478,681 100

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Bright LED Electronics Corp. Notes from Parent company only financial statements

Year 2019 and 2020

(Unless otherwise specified, all amounts are in units of NT $thousand)

1. Company history

Bright LED Electronics Corp. (hereinafter referred to as the "Company") was established in June 1981. The company and its subsidiaries (hereinafter also referred to as "parent company") are principally engaged in the manufacturing and sales of light-emitting diode, indicator lights, displays and other extended products and undertaking engineering projects that provide indicator lights, displays and related supporting engineering projects.

2. The date and procedure for the approval of the financial statements

This parent financial statement was approved by the board of directors on March 18, 2021.

3. Application of newly issued and revised standards and explanations

(1) The impact of the newly issued and revised standards and interpretations approved by the Financial Regulatory Commission has been adopted
The company has applied the following newly revised International Financial Reporting Standards since January 1, 2020 and has no significant impact on parent company only financial report.
- Amendments to International Financial Reporting Standards (IFRS) No. 3 “Definition of Business”
- Amendments to International Financial Reporting Standards No. 9, International Accounting Standards No. 39 and International Financial Reporting Standards No. 7 "Changes in Interest Rate Indicators"
- Amendments to International Accounting Standard No. 1 and International Accounting Standard No. 8 "Definition of Materiality"
- Amendments to International Financial Reporting Standards No. 16 "New Coronavirus Pneumonia Related Rent Concessions"
(2) The impact of the International Financial Reporting Standards that have not adopted nor recognized by the Financial Supervisory Commission yet. The company assesses that the following newly revised international financial reporting standards that have been effective from January 1, 2021 will not have significant impacts on parent company only financial report.
Amendment to International Financial Reporting Standards (IFRS) No. 4 "Temporary
Exemption from Application of IFRS No. 9 Extension"
Amendments to International Financial Reporting Standards No. 9, International Accounting Standards No. 39, International Financial Reporting Standards No. 7, International Financial Reporting Standards No. 4, and International Financial Reporting Standards No. 16 "Changes in Interest Rate Indicators-Second stage".
(3) Newly issued or revised standards and interpretations not yet endorsed by Financial Supervisory Commision.
The standards and interpretations that have been newly issued or amended by the International Accounting Standards Board, but have not yet been approved by Financial Supervisory Commission are as follows:

`Newly issued/` `revised standards` Amendment to International Accounting Standard No. 1 "Classification of Liabilities as Current or Non-current" Amendment to International Accounting Standard No. 16 "Real estate, plant and equipment price before reaching the intended state of use" Amendment to International Accounting Standard No. 1 "Disclosure of Accounting Policies" Amendment to International Accounting Standard No. 8 "Definition of Accounting Estimates"	`Main content` The amendments are intended to improve the consistency of the application of the standards to assist companies in determining whether debts or other liabilities that are uncertain on the settlement date should be classified as current (or may be due within one year) or non-current on the balance sheet. The revised provisions also clarify the classification requirements for debts that companies may convert into equity to pay off. The amendment prohibits the company from deducting the cost of real property, plant and equipment from the sales price of the project that makes the asset ready for use. Otherwise, the sales price and related costs should be recognized in profit and loss. The major amendments of International Accounting Standard No. 1 include: ‧Require companies to disclose their material accounting policies instead of their important accounting policies; ‧Clarified that accounting policy information related to non-significant transactions, other matters or circumstances is non-significant, and there is no need to disclose such information; and ‧Clarified that all accounting policy information that is not related to material transactions, other events or circumstances is material to the company's financial statements. The amendment introduces a new definition of accounting estimates, clarifying that accounting estimates are monetary amounts in financial statements that are affected by measurement uncertainty. The amendment also stipulates that the company must establish accounting estimates to achieve the purpose of its applicable accounting policies, thereby clarifying the relationship between accounting policies and accounting estimates.	`Effective date` 2023.1.1 2022.1.1 2023.1.1 2023.1.1

The company continuously evaluates the impact of the above standards and interpretations on the company's financial status and operating results, and the relevant impact will be disclosed when the evaluation is completed.

(4) The company expects that the following other newly issued or revised standards that have not yet been approved will not have a significant impact on parent company only financial reports
Amendments to International Financial Reporting Standards No. 10 and International

Accounting Standards No. 28 "Sales or investment of assets between investors and their affiliates or joint ventures"

Amendments to International Financial Reporting Standards (IFRS) No. 17 "Insurance Contracts" and its revision.
Amendment to International Accounting Standard No. 37 "Supplementary Contracts-Cost of Consensus Contracts"
Annual improvement of International Financial Reporting Standards (IFRS) 2018 to 2020 cycle
Amendment to International Financial Reporting Standards(IFRS) No. 3 "Quotation of Conceptual Framework"

4. Summary of material accounting policies

A summary of the material accounting policies adopted in this parent company only financial report is as follows. The following accounting policies have been consistently applied to all presentation periods in this parent company only financial report.

(1) Compliance statement: This parent company only financial report is prepared in accordance with the "Regulations Governing the Preparation of Financial Reports by Securities Issuers"
(2) Preparation basis:
Basis of measurement: Except for the following important items in the balance sheet, the rest items in parent company only financial report is prepared on the basis of historical cost:
Financial assets measured at fair value through profit and loss measured at fair value;
Financial assets at fair value measured by fair value through other comprehensive gains and losses
The net defined benefit liability is measured by subtracting the present value of defined benefit obligations from the fair value of pension plan assets.
Functional currency and presentation currency: The company uses the currency of the main economic environment in which it operates as its functional currency. This parent company only financial report is expressed in the company’s functional currency, which is New Taiwan Dollars. All financial information expressed in New Taiwan Dollars is in thousands of New Taiwan Dollars.
(3) Foreign currency
Transactions in foreign currency:
Transactions in foreign currency are converted into functional currencies based on the exchange rate on the transaction date. On the date of each subsequent financial reporting period (hereinafter referred to as the reporting date), monetary items in foreign currencies are converted into functional currencies at the exchange rate of that day. Non-monetary items in foreign currency measured by fair value are converted into functional currencies at the exchange rate on the day when the fair value is measured, and Non-monetary items in foreign currency measured by historical cost are converted according to the exchange rate on the transaction date. Except the currency exchange differences arising from the conversion of equity instruments measured at fair value through other comprehensive gains and losses are recognized in other comprehensive gains and losses, the rest are recognized as gains and losses.
Foreign operating institutions:

The assets and liabilities of foreign operating institutions, including the goodwill and fair value adjustments generated during the acquisition, are converted into New Taiwan dollars based on the exchange rate on the reporting date; income and expense items are converted into New Taiwan dollars based on the current average exchange rate. The resulting exchange differences are recognized as other comprehensive gains and losses.

When disposing a foreign operating institution which results in loss of control, joint control or significant influence, the accumulated exchange differences related to the foreign

operating institution are fully reclassified as gains or loss. When partly disposing investments in affiliated companies or joint ventures involving foreign operating institution, the relevant accumulated exchange differences will be reclassified to other comprehensive gains and loss on a pro rata basis.

For monetary receivables or payables from foreign operating institutions, if there is no settlement plan and it is impossible to repay them in the foreseeable future, the foreign currency exchange gains and losses shall be regarded as the net investment of the foreign operating institution and is classified in other comprehensive gains and losses.

(4) Classification criteria for distinguishing between current and non-current assets and liabilities Assets that meet one of the following conditions are classified as current assets, and all others are classified as non-current assets:
Expect to realize the asset in its normal business cycle, or intend to sell or consume;
Hold the asset primarily for trading purposes;
Expected to be realized within twelve months after the reporting period; or
Liabilities that do not have the right to unconditionally defer the settlement period to at least twelve months after the reporting period. The terms of the liability, which may be settled by the issuance of equity instruments based on the choice of the counterparty, does not affect its classification.
(5) Cash and cash equivalent

Cash includes cash on hand and demand deposits. Cash equivalent refers to a short-term and highly liquid investment that can be converted into fixed cash at any time with little risk of value changes. Term deposits that meet the aforementioned definition and whose holding

purpose is to meet short-term cash commitments rather than investment or other purposes are listed in cash equivalents.

(6) Financial instrument
Financial assets:

Financial assets at initial recognition are classified as: financial assets measured at amortized cost, financial assets measured at fair value through other comprehensive gain or loss, and financial assets measured at fair value through profit or loss. The company only reclassifies all affected financial assets from the first day of the next reporting period when changing the business model for managing financial assets.

Financial assets measured at amortized cost

When financial assets meet the following conditions at the same time and are not designated to be measured at fair value through profit and loss, they are measured at amortized cost:

The financial asset is held under the business model for the purpose
of collecting contractual cash flow.
The contract terms of the financial asset generate cash flow on a specific date, which is entirely the interest on the payment of the principal and the amount of principal in circulation.

These assets are subsequently measured by adding or subtracting the accumulative amortization amount calculated using the effective interest method to the originally recognized amount, and adjusting the amortized cost of any allowance loss. Interest income, foreign currency exchange gains and losses, and impairment losses are recognized in profit and loss. When delisting, the profit or loss is included into income.

Financial assets measured at fair value through other comprehensive gains and losses When debt instrument for investment meets the following conditions at the same time and is not designated as measured at fair value through income, it is measured at fair value through other comprehensive gains and losses:
The financial asset is held under the business model for the purpose

of collecting contractual cash flow and selling.

The contract terms of the financial asset generate cash flow on a specific date, which is entirely the interest on the payment of the principal and the amount of principal in circulation.

At the time of initial recognition, the company can make an irrevocable choice which is to report subsequent changes in the fair value of equity instrument investments that are not held for trading in other comprehensive income. The aforementioned choices are made on a tool-by-tool basis.

Investments, which are equity instruments, are subsequently measured at fair value. Dividend income (unless it clearly represents the recovery of part of the investment cost) is recognized in income. The remaining net gains or losses are recognized as other comprehensive gains and losses and are not reclassified to income. Dividend income from equity investments is recognized on the date when the company has the right to receive dividends (usually the ex-dividend date).

Financial assets measured at fair value through income.

Financial assets other than those measured at amortized cost or at fair value through other comprehensive gains and losses are measured at fair value through income, including derivative financial assets. The company intends to sell accounts receivable immediately or in the near future, which is measured at fair value through profit and loss, but is included under accounts receivable. At the time of initial recognition, in order to eliminate or significantly reduce the improper accounting ratio, the company has to irrevocably designate financial assets that could meet the criteria for measuring at amortized cost or at fair value through other comprehensive gains and losses as at fair value through income.

These assets are subsequently measured at fair value, and their net profit or loss (including any dividends and interest income) is recognized as profit or loss.

Impairment of financial assets

The company focuses on financial assets measured at amortized cost (including cash and cash equivalents, financial assets measured at amortized cost, notes receivable and accounts receivable, other receivables, deposit deposits and other financial assets). Assets, etc.), debt instrument investments measured at fair value through other comprehensive gains and losses, and expected credit losses of contract assets to recognize allowance losses.

The following financial assets are measured by the amount of expected credit losses for twelve months, and the rest are measured by the amount of expected credit losses during the duration:

•The credit risk of the judgment debt securities at the reporting date is low; and
•The credit risk of other debt securities and bank deposits (that is, the risk of default in the expected lifetime of financial instruments) has not increased significantly since initial recognition.

The allowance for losses on accounts receivable and contract assets is measured by the amount of expected credit losses during the duration.

When determining whether the credit risk has increased significantly since the initial recognition or not, the company considers reasonable and verifiable information (which can be obtained without excessive cost or investment), including qualitative and quantitative information, and based on the company’s historical experience, credit assessment and forward-looking information for analysis.

If the contract payment is overdue, the company assumes that the credit risk of financial assets has increased significantly.

If the borrower is unlikely to perform its credit obligations and pay the full amount to

the company, the company considers that the financial asset has breached the contract. Expected credit loss during the lifetime refers to the expected credit loss arising from all possible defaults during the expected lifetime of a financial instrument.

Twelve-month expected credit losses refer to expected credit losses arising from possible defaults of financial instruments within twelve months after the reporting date (or a shorter period, if the expected duration of the financial instrument is shorter than twelve months).

The company’s longest period for expected credit losses is the company’s longest contract period during which the company is exposed to credit risk.

Expected credit loss is the probability-weighted estimate of the credit loss during the expected life of the financial instrument. Credit loss is measured by the present value of all short-term cash receipts, that is, the difference between the cash flow that the company can receive in accordance with the contract and the cash flow that the company expects to receive. Expected credit losses are discounted at the effective interest rate of financial assets.

On each reporting date, the company evaluate whether there is credit impairment for financial assets measured at amortized cost and debt securities measured at fair value through other comprehensive gains and losses. When one or more events that have an adverse effect on the estimated future cash flow of a financial asset have occurred, the financial asset has been credit-impaired. Evidence that financial assets have been credit-impaired includes observable information about the following matters:

•Major financial difficulties of the borrower or issuer
•Breach of contract, such as delay or overdue

•Due to economic or contractual reasons related to the borrower’s financial difficulties, the company gives the borrower a concession which the company woudn’t considered;

•The borrower is likely to file for bankruptcy or other financial reorganization; or

•Due to financial difficulties, the active market for this financial asset disappears.

The allowance loss for financial assets measured at amortized cost is deducted from the asset’s book value. Through other comprehensive gains and losses, the fair value of the debt instrument for investment is measured by adjusting the income and recognized in other comprehensive gains and losses (without reducing the asset's book value).

When the company cannot reasonably expect the recovery of financial assets as a whole or part of it, the company directly reduces the total book value of its financial assets. For corporate accounts, the company individually analyzes the timing and amount of write-off based on whether it is reasonably expected to be recoverable. The company expects that the amount of written-off will not be materially reversed. However, financial assets that have been written off can still be enforced to comply with the company's procedures for recovering overdue amounts.

Delisting of financial assets

The company only terminates the contractual rights from the cash flow of the asset, or the financial asset has been transferred and almost all the risks and rewards of the asset ownership have been transferred to other companies, or almost no ownership has been transferred or retained and not kept under the control of the financial asset, the financial asset is delisted.

If the company signs a transaction to transfer financial assets that still retains all or almost all risks and rewards of ownership of the transferred assets, it will continue to be recognized on the balance sheet.

Financial liabilities and equity instruments:
Classification of liabilities or equity

The debt and equity instruments issued by the company are classified as financial

liabilities or equity based on the substance of the contractual agreement and the definition of financial liabilities and equity instruments.

Equity transaction

An equity instrument refers to any contract that recognizes the remaining equity of the consolidated company after deducting all its liabilities from its assets. The equity instruments issued by the company are recognized at the amount obtained after deducting the cost of direct issuance.

Treasury stock

When repurchasing the equity instruments recognized by the company, the consideration paid (including directly attributable costs) is recognized as a reduction in equity. The repurchased shares are classified as treasury stock. The received amount of subsequent sales or re-issuance of treasury stocks is recognized as an increase in equity and the surplus or loss incurred by the transaction will be recognized as capital reserve or retained surplus (if the capital reserve is insufficient to offset).

Financial liabilities

Financial liabilities are classified as amortized cost or measured at fair value through profit and loss. If financial liabilities are held for trading, derivatives, or designated at the time of initial recognition, they are classified as measured at fair value through income. Financial liabilities measured at fair value through income are measured at fair value, and its related net profits and losses, including any interest expenses, are recognized in income.

Other financial liabilities are subsequently measured at the cost after amortization using the effective interest method. Interest expenses and gains and losses from exchange are recognized in income. Any profit or loss at the time of exclusion is also recognized in income.

Delisting of financial liabilities

The company delists financial liabilities when contractual obligations have been fulfilled, cancelled or expired. When the financial liability terms are modified and there is a significant difference in the cash flow of the liabilities after the modification, the original financial liabilities will be delisted and the new financial liabilities will be recognized at fair value based on the modified terms.

When delisting financial liabilities, the difference between its book value and the total consideration paid or payable (including any transferred non-cash assets or liabilities assumed) is recognized as income.

Offset between financial assets and liabilities

Financial assets and financial liabilities are only offset when the company currently has legally enforceable rights to offset and intends to settle on a net amount or realize assets and liquidate liabilities at the same time. Such offset will be expressed on the balance sheet as a net amount.

(7) Inventory

Inventory is measured by the lower of cost and net realizable value. Cost includes the acquisition, production or processing costs and other costs incurred to bring inventory to the available location and status. Such inventory is calculated by the weighted average method. The cost of finished goods and work-in-progress inventory includes manufacturing expenses that are amortized in proportion to normal production capacity.

Net realizable value refers to the estimated selling price under normal operations minuses the estimated costs required to complete the project and the estimated costs required to complete the sale.

(8) Investment in associated companies

Associated company is which the company has a significant influence on its financial

and operating policies, but not controlling or joint controlling. The company adopts the equity method for the equity of associated companies. Under the equity method, the original acquisition is recognized as cost. Such investment cost includes transaction costs. The book value of the investment in associated companies includes the goodwill identified at the time of the original investment minus any accumulated impairment losses.

The parent company only financial report includes from the date of significant influence to the date of loss of significant influence. After making adjustments to comply with the company’s accounting policy, the company recognizes the income and amount of other comprehensive gains and losses on each investment in associated companies based on the proportion of equity. When the related company’s equity changes in non-income and in other comprehensive gains and losses that does not affect the company's shareholding ratio, the company will recognize as capital reserve according to the shareholding ratio.

Unrealized gains and losses arising from transactions between the company and associated companies are only recognized in the financial statements of the company within the scope of the non-affiliated investor’s rights and interests in the asociated company. When the company recognizes the losses occurred that have been equaled or exceeded the company’s equity in associated company , the company shall stop recognizing such losses. Only when legal obligations, constructive obligations or payments have been made on behalf of the invested company within the scope, additional losses and related liabilities will continue to be recognized by the company.

The company ceases to adopt the equity method from the day when its investment ceases to be an associated company and retains ownership at fair value. The difference between the fair value of the retained equity and the disposal price and the book value of the investment on the day when the equity method ceases to be used is recognized on the current date. For all amounts previously recognized in other comprehensive gains and losses related to the investment, the basis of accounting treatment for the company must be the same as the basis that the assoicated companies follow if they directly dispose related assets or liabilities, that is, if previously recognized in other comprehensive gains and losses, such amount must be reclassified as profit or loss (or retained earnings) when disposing related assets or liabilities. When the enterprise ceases to adopt the equity method, the profit or loss shall be reclassified from equity to income (or retained earnings). If the company’s ownership interest in an associated company is reduced, but the equity method continues to be applied, the company will weight and reclassify the gains or losses that have been previously recognized in other comprehensive gains and losses related to the reduction of the ownership interest in accordance with the reduction ratio described above.

(9) Investment in subsidiaries

When preparing parent company only financial reports, the company adopts the equity method to evaluate investee companies with control. Under the equity method, the current profit and loss and other comprehensive gains and losses in the parent company only financial report are the same as the current profit and loss and other comprehensive gains and losses attributable to the parent company in the consolidated financial report. The owner’s equity in parent company only financial report is alo the same as the owner’s equity attributable to the parent company in the consolidated financial report.

Changes in the ownership and equity of the subsidiary by the company which do not result in the loss of control shall be treated as equity transactions with the owner.

(10) Property, plant, and equipment

Recognition and measurement

Property, plant and equipment items are measured by cost (including capitalized borrowing costs) less accumulated depreciation and any accumulated impairment.

When the major components of property, plant and equipment have different durability, they are treated as separate items (main components) of property, plant and equipment. The property, plant and equipment gains or loss by disposal is recognized in income.

Follow-up costs

Subsequent expenditures are only capitalized when their future economic benefits are likely to flow into the parent company.

Amortization

Depreciation is calculated based on the cost of assets minus the residual value, and the straight-line method is recognized in profit or loss within the estimated useful life of each component.

The land is not subject to depreciation.

The estimated service life of the current period and the comparative period is as follows:

(1) Housing and construction: 2 ~ 55 years

(2) Machine equipment: 2 ~ 8 years
(3) Others: Except that lease improvements are listed according to the lease term, the rest are 2 to 8 years.

The company reviews the depreciation method, durability, and residual value on each reporting day and makes appropriate adjustments when necessary.

(11) Lease
Lease judgment

The company evaluates whether the contract is a lease or contains a lease on the establishment date. If the contract transfers control over the use of the identified asset for a period of time in exchange for consideration, the contract is a lease or contains a lease. In order to evaluate whether the contract is a lease, the company evaluates the following items:

(1) The contract involves the use of an identified asset. The identified asset is specified in the contract or implied by the time when it is available for use. Its entity can distinguish or represent substantially all of its production capacity. If the supplier has substantive rights to replace the asset, the asset is not an identified asset; and
(2) The customer has the right to obtain almost all economic benefits from the use of the identified assets throughout the period of use; and
(3) The client obtains the right to lead the use of identified assets when one of the following conditions is met:
‧ The customer has the right to lead the use and purpose of the identified assets throughout
the use period; or
‧ The relevant decisions about the use method and purpose of the asset are determined in
advance, and:
The customer has the right to operate the asset during the entire use period, and the
supplier does not have the right to change the operation instructions; or

– The way the customer designs the asset has pre-determined the way and purpose of use for the entire period of use.

Lessee

The company recognizes the right-of-use asset and lease liability on the lease start date. The right-of-use asset is originally measured at cost, which includes the original measured amount of the lease liability, adjusts any lease payments paid on or before the lease start date, and adds the original direct cost incurred and the estimated cost of dismantling, removing the underlying asset and restoring its location or underlying asset, and deducting any leasing incentives received.

is impaired and processes any impairment loss that has occurred, and cooperates to adjust the right-of-use asset when the lease liability is remeasured.

Lease liabilities are originally measured by the present value of the lease payments that have not been paid on the lease start date. If the implied interest rate of the lease is easy to determine, the discount rate is that rate. If it is not easy to determine, the incremental borrowing rate of the parent company is used. Generally speaking, the parent company uses its incremental borrowing rate as the discount rate.

Lease payments included in the measurement of lease liabilities include:

(1) Fixed payment, including substantial fixed payment;
(2) The lease payment depends on the change of an index or fee rate, the original measurement is based on the index or rate of the lease start date;
(3) The guaranteed amount of residual value expected to be paid; and
(4) When reasonably determined that the purchase option or lease termination option will be exercised, the exercise price or the penalty payable.
The lease liability is subsequently accrued by the effective interest method, and its amount is measured when the following occurs:
(1) Changes in the index or rate used to determine lease payments result in changes in the future lease payments;
(2) The guaranteed amount of residual value expected to be paid has changed;
(3) The evaluation of the underlying asset purchase option has changed;
(4) The estimate of whether to exercise the extension or termination option has changed, and the assessment of the lease period has been changed;
(5) Modification of lease subject, scope or other terms. When the lease liability is remeasured due to changes in the aforementioned index or rate used to determine lease payments, changes in the residual value guarantee amount, and changes in the evaluation of purchase, extension or termination options, the book value of the right-of-use asset should be adjusted accordingly, and When the carrying amount of the right-of-use asset is reduced to zero, the remaining remeasured amount is recognized in profit or loss.
- For lease modifications that reduce the scope of the lease, the carrying amount of the right-of-use asset is reduced to reflect the partial or full termination of the lease, and the difference between the lease and the remeasured amount of the lease liability is recognized in profit or loss.
- The parent company expresses the right-of-use assets and lease liabilities that do not meet the definition of investment real estate as separate line items in the balance sheet.
Lessor
The transaction of the company as the lessor is to classify the lease contract according to whether it transfers almost all the risks and rewards attached to the ownership of the underlying asset on the date of the lease establishment. If it is classified as a financial lease, otherwise it is classified as an operating lease. At the time of evaluation, the parent company considers whether it covers the relevant specific indicators such as whether it covers the main part of the economic life of the underlying asset during the lease period.

If the agreement includes lease and non-lease components, the parent company uses IFRS 15 to distribute the consideration in the contract.

(12) Impairment of non-financial assets
The company assesses on each reporting day whether there is any indication that the carrying amount of non-financial assets (other than inventory, contract assets, deferred income tax assets) may be impaired. .

For the purpose of impairment testing, a group of assets whose cash inflows are largely

independent of the cash inflows of other individual assets or asset groups is used as the smallest identifiable asset group.

The recoverable amount is the higher of the fair value of individual assets or cash-generating units minus the cost of sales and its use value. When assessing value in use, the estimated future cash flow is converted to the present value at a pre-tax discount rate, which should reflect the current market assessment of the time value of money and the specific risks of the asset or cash-generating unit. If the recoverable amount of an individual asset or cash-generating unit is lower than the carrying amount, an impairment loss is recognized. Impairment losses are recognized immediately in the current profit and loss.

(13) Revenue recognition
Revenue from customer contracts

Revenue is measured by the consideration expected to be obtained for the transfer of goods or services. The parent company recognizes revenue when the control of goods or services is transferred to the customer and the performance obligations are met. The company is explained as follows according to the main income items:

(1) Selling goods

The company recognizes revenue when the control of the product is transferred. The transfer of control of the product means that the product has been delivered to the customer, the customer can fully determine the sales channel and price and there is no unfulfilled obligation that will affect the customer's acceptance of the product. Delivery occurs when the product is shipped to a specific location, its obsolescence and risk of loss have been transferred to the customer, and the customer has accepted the product in accordance with the sales contract, the acceptance terms have lapsed, or the company has objective evidence that all acceptance conditions have been met. The company’s average credit period is 90 days, which is consistent with the industry’s practice, so it does not include financing elements.

The company recognizes the accounts receivable when delivering the goods, because the company has the right to receive the consideration unconditionally at that time.

(2) Construction contract

The company is engaged in public construction business. Since the assets are controlled by customers at the time of construction, the revenue is gradually recognized over time based on the proportion of the engineering costs incurred so far to the estimated total contract costs. The contract includes fixed and variable consideration. The customer pays a fixed amount according to the agreed time. Some changes in the consideration are estimated using the accumulated experience in the past as the expected value; other changes in the consideration are estimated based on the most likely amount. Considering that the construction progress of public works is influenced by factors that are not under the control of the parent company, the rewards for early completion are usually limited. The parent company only recognizes revenue within the scope of the cumulative income height that is unlikely to undergo a major turnaround. If the amount of the recognized income has not been requested, it is recognized as a contract asset. When there is an unconditional right to the consideration, the contract asset is transferred to the accounts receivable.

If it is not possible to reasonably measure the degree of completion of the performance obligations of the engineering contract, contract revenue is recognized only within the range of expected recoverable costs.

When the company anticipates that the inevitable cost of fulfilling the obligations of a construction contract exceeds the expected gains from the contract, the liability provision for the lossy contract is recognized.

If the situation changes, the estimates of income, cost, and degree of completion will

be revised, and during the period when the management is informed of the change in the situation, the resulting changes will be reflected in income.

The company provides standard warranty for public construction that conforms to the agreed specifications and has recognized warranty liability for this obligation.

(3) Financial components

The company expects that the time between the transfer of all customer contracts for goods or services to the customer and the time for the customer to pay for the goods or services will not exceed one year. Therefore, the company does not adjust the monetary time value of the transaction price.

(14) Cost of customer contract
The incremental cost of obtaining a contract

If the company expects to recover the incremental cost of obtaining a customer contract, the cost is recognized as an asset. The incremental cost of obtaining a contract is the cost incurred in obtaining a customer contract and not incurred if the contract is not obtained. The cost of obtaining a contract that will occur regardless of whether the contract is obtained is recognized as an expense when incurred, unless such cost is clearly chargeable to the customer regardless of whether the contract has been obtained.

The company adopts the standard practical expedient method. If the incremental cost of obtaining a contract is recognized as an asset and the amortization period of the asset is within one year, it is recognized as an expense when the incremental cost occurs.

The cost of fulfilling the contract

If the costs incurred in fulfilling the customer's contract are not within the scope of other standards (International Accounting Standard No. 2 "Inventory", International Accounting Standard No. 16 "Real Estate, Plant and Equipment" or International Accounting Standard No. 38 "Intangible Assets" "), The parent company will only begin when these costs are directly related to the contract or clearly identifiable expected contract, will generate or strengthen resources that will be used to meet (or continue to meet) performance obligations in the future, and are expected to be recovered. Such costs are recognized as assets.

General and administrative costs, wasted raw materials used to fulfill the contract but are not reflected in the contract price, labor or other resource costs, costs related to fulfilled (or partially fulfilled) performance obligations, and inability to distinguish between unsatisfied and unsatisfied performance. Costs related to obligations or fulfilled (or partially fulfilled) performance obligations are recognized as expenses when incurred.

(15) Government subsidy

When the company can receive government subsidies related to salary expenditures, the unconditional subsidies are recognized as other income. For other asset-related subsidies, when the company can reasonably be sure that it will comply with the conditions attached to the government subsidy and will receive the subsidy, such subsidies will be recognized as deferred income at fair value and recognize the deferred income as other income on a systematic basis within the useful life of the asset. For compensating the company's expenses or losses, such subsidies are recognized in income on a systematic basis and its related expenses as well are recognized in income.

(16) Employee benefits

1. Determine the withdrawal plan

The obligation to determine the pension plan is recognized as an expense during the service period of the employee.

2. Determine the welfare plan

The company's net obligation to determine the benefit plan is calculated for each benefit plan based on the present value of the employee's future benefits earned during the current or

previous period of service, and the fair value of any plan assets is deducted.

The determination of welfare obligations is carried out annually by a qualified actuary based on the expected unit welfare method. When the calculation result may be beneficial to the company, the recognized asset is limited to the present value of any economic benefits that may be obtained in the form of refunding the withdrawal from the plan or reducing the future withdrawal from the plan. When calculating the present value of economic benefits, any minimum funding requirements are considered.

The re-measured amount of net-determined welfare liabilities, including actuarial gains and losses, planned asset compensation (excluding interest), and any changes in the asset ceiling effect (excluding interest) are immediately recognized in other comprehensive profit and loss and accumulated in retained earnings . The company determines the net interest expense (income) of the net determined benefit liability (asset), using the net determined benefit liability (asset) and discount rate determined at the beginning of the annual reporting period. The net interest expense and other expenses that determine the benefit plan are recognized in profit or loss.

When the plan is revised or reduced, the number of changes in welfare related to previous service costs or reduced benefits or losses is immediately recognized as profit or loss. When liquidation occurs, the company recognizes and determines the liquidation profit and loss of the welfare plan.

Short-term employee benefits

Short-term employee benefit obligations are recognized as expenses when services are provided. If the company has current statutory or presumptive payment obligations due to employees providing services in the past, and the obligation can be reliably estimated, the amount is recognized as a liability.

(17) Share-based payment transaction

The share-based payment agreement for equity settlement is based on the fair value of the payment date. During the vesting period of the reward, the expense is recognized and the relative equity is increased. The recognized expense is adjusted according to the expected amount of rewards that meet the service conditions

and non-market-priced vested conditions; and the final recognized amount is measured on the basis of the amount of rewards that meet the service requirements and non-market-priced vested conditions on the vesting day.

The non-vested conditions for the share-based payment of rewards have been reflected in the measurement of the daily fair value of the share-based payment and the difference between the expected and actual results does not need to be verified and adjusted.

The fair value of amount payable to employees for cash-delivered share appreciation rights is to recognize expenses and increase relative liabilities during the period when employees can obtain unconditional remuneration. The liability is remeasured on the basis of the fair value of the share appreciation rights on each reporting date and settlement date, and any changes in it are recognized as income.

(18) Income tax

Income tax includes current and deferred income tax. Except for those related to business consolidations or related items recognized directly in equity or other comprehensive gains or loss, current income tax and deferred income tax should be recognized in income.

Current income tax includes the estimated income tax payable or tax receivable payable based on the taxable income (loss) of the current year and any adjustments to income tax payable or tax receivable receivable in the previous year. The amount is based on the statutory tax rate on the reporting date or the tax rate of substantive legislation to measure the best estimate of the amount expected to be paid or received.

Deferred income tax measures and recognizes the temporary difference between the book

value of assets and liabilities for financial statementing purposes and their tax base. Temporary differences arising from the following circumstances are not recognized as deferred income tax:

Assets or liabilities originally recognized in a transaction that is not a business consolidation and does not affect accounting profits and taxable income (loss) at the time of the transaction;
Due to temporary differences arising from investment in subsidiaries, affiliated companies and joint venture interests, the company can control the timing of the temporary difference reversal and is likely to not revert in the foreseeable future.

Deferred income tax is measured at the tax rate at which the temporary difference is expected to reverse, and is based on the legal tax rate or substantive legislative tax rate on the reporting date.

The company will only offset the deferred income tax assets and deferred income tax liabilities when it meets the following conditions at the same time:

Have statutory enforcement power to offset current income tax assets and current income tax liabilities; and
Deferred income tax assets and deferred income tax liabilities are related to one of the following taxpayers subject to income tax levied by the same tax authority; 1. The same taxpayer; or
Different taxpayers, but each entity intends to pay off the current income tax liabilities and assets on a net basis for each future period in which significant amounts of deferred income tax assets are expected to be recovered and deferred income tax liabilities are expected to be settled, or at the same time Assets and liquidation of liabilities.

For the unused taxable losses and unused income tax credits at the later stage of transfer and deduction, the temporary difference can be recognized as deferred income tax assets in the range where there is a possibility that future taxable income will be available. It will be reassessed on each reporting day to reduce the relevant income tax benefits to the extent that it is not likely to be realized; or to revert the amount that has been reduced to the extent that it is likely to have sufficient taxable income.

(19) Earnings per share

The company lists the basic and diluted earnings per share attributable to the holders of the company's common equity. The basic earnings per share of the parent company is calculated by dividing the profit and loss attributable to the holders of the common stock equity of the company by the current weighted average number of common shares outstanding. Diluted earnings per share is calculated by adjusting the impact of all potential diluted common shares by dividing the profit and loss attributable to the common equity holders of the company and the weighted average number of common shares outstanding. The potential dilutive common stock of the merged company includes the employee's stock options and estimated employee compensation.

(20) Department Information

The company has disclosed departmental information in the consolidated financial report, so parent company only financial reports do not disclose departmental information.

5. Major sources of uncertainty in significant accounting judgments, estimates and assumptions

When the management compiles this parent company only financial report in accordance with the "Standards for the Preparation of Financial Reports for Securities Issuers", it must make judgments, estimates and assumptions, which will affect the adoption of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from estimates.

Management team continues to review estimates and basic assumptions and changes in accounting estimates are recognized during the period of change and affected future period.

The accounting policy involves significant judgments and has no significant impact on the amount recognized in this parent financial statement.

Among uncertainties in assumptions and estimates, the existence of significant risks that will not cause major adjustments for the following year will be as follows:

Allowance loss for accounts receivable

The allowance loss for the accounts receivable of the company is estimated based on the assumption of default risk and expected loss rate. The company considers historical experience, current market conditions and forward-looking estimates on each reporting day to determine the assumptions and input values that must be used when calculating impairments. Please refer to Note 6 (3) for detailed explanations of relevant assumptions and input values.

6. Explanation of important accounting items

(1) Cash and Cash equivalent:

Petty cash, cheques and demand deposits Certificate deposits	2020.12.31 $ 388,946 79,744	2019.12.31 280,459 179,880 460,339
	$ 468,690

Please refer to Note 6 (19) for the disclosure of interest rate risk and sensitivity analysis of the company's financial assets and liabilities.

The company’s certificate deposits for more than three months as of December 31, 2020 and 2019 were $0 thousand and $14,613 thousands repectively. Because they were not used as the company’s short-term assets, the accounts were recognized under other financial assets-current items. Please refer to note 6 (8) for details.

(2) Financial assets measured at fair value through other comprehensive gains and losse:

Equity instruments measured at fair value through other comprehensive gains and losses`：` Domestic listed (counter) company stocks-Powertip Domestic unlisted (counter) company stocks-WK 9 ASSOCIATES LTD Domestic unlisted (counter) company stocks`－`Other U.S. listed company stocks TOTAL	2020.12.31 $ 152,542 342,008 213,563 2,882	2019.12.31 148,548 308,526 182,375 6,358 645,807
	$ 710,995

Investment in equity instruments measured at fair value through other comprehensive gains and losses
- Due to the above-mentioned designation as an equity instrument investment
- measured at fair value through other comprehensive gains and losses, the dividend income recognized in 2020 and 2019 was $3,691,000 and $19,592,000, respectively.
For credit risk and market risk information, please refer to Note 6 (19).
None of The company's financial assets measured at fair value through other comprehensive gains and losses have been provided as pledge and guarantees as of December 31, 2020 and 2019.
(3) Notes receivable, accounts receivable and collections

Notes receivable`－`Occurs due to business Accounts receivable`－`Measured by cost after amortization Accounts receivable`－` Related parties-measured at amortized cost Collection Deduct`：`Allowance for bad debts	2020.12.31 ~~$~~ ~~20,297~~ 264,021 40,033 311,540 (312,699)	2019.12.31 ~~20,560~~ 275,050 50,033 537,116 (539,187) 343,572
	$ 323,192

The company adopts a simplified method to estimate expected credit losses for all notes receivable and accounts receivable, that is, using lifetime expected credit losses to measure. For the purpose of measurement, these notes and accounts receivable are based on the basis of representing customers’ common credit risk characteristics of the contractual terms and ability to pay all due amounts are grouped and forward-looking information has been incorporated, including general economic and related industry information. The expected credit loss of the company's notes and accounts receivable analysis is as follow:

2020.12.31

		2020.12.31
Not overdue Less than 90 days overdue 91~365 days overdue More than 366 days overdue Not overdue Less than 90 days overdue	Accounts receivable Book value $ 316,375 7,214 3 312,299	Weighted avg. expected credi t loss ratio	Expected cred it loss during the allowance period (28) (371) (1) (312,299)
		0.01% 5.14% 33.33% 100% 2019.12.31
	$ 635,891		(312,699)
			Expected cred it loss during the allowance period (31) (87)
	Accounts receivable Book value $ 342,482 1,208	Weighted avg. expected credi t loss ratio
		0.01% 7.31%

More than 366 days overdue 539,069 100% (539,069) $ 882,759 (539,187)

The company's notes receivables, accounts receivable and collections of the allowance loss’s statement of changes are as follows:

Beginning balance Recognized impairment loss Reversal of impairment loss Annual amount written off due to uncollectible Ending balance	2020

None of the company's notes and accounts receivable have been provided as pledge and guarantees as of December 31, 2020 and 2019.

(4) Inventory

The inventory details are as follows:

Raw materials and consumables WIP Semi-finished goods Finished goods In-transit	109.12.31 $ 7,266 - 5 5,026 2,683	108.12.31 5,290 425 - 5,164 1,922 12,801
	$ 14,980

The company recognizes the loss of inventory depreciation due to inventory write-down to the net realizable value, or the increase in the net realizable value due to the improvement of economic conditions and the reduction of the recognized cost of goods sold are as follows:

Loss for market price decline and obsolescence. (Gain from recovery)	2020 $ 402	2019 (753)

None of the company's inventories have been provided as pledge and guarantees as of December 31, 2020 and 2019.
(5) Investment using the equity method
- The company’s investments using the equity method on the reporting date are listed below:

Subsidiaries Associated companies	2020.12.31 $ 2,482,278 119,988	2019.12.31 2,545,675 114,728 2,660,403
	$ 2,602,266

1. Subsidiaries

Please refer to 2020 consolidated financial report

The associated companies of the company that adopt the equity method are individually insignificant, and their summary financial information is as follows. Such financial information is the amount included in the company's individual

financial report:

2020.12.31 2019.12.31

	2020.12.31	2019.12.31
Period-end summary of the equity of individual insignificant associated companies Book value Share attributable to the company`：` Continuing business unit's current net profit Other comprehensive gain and loss Total comprehensive gain and loss	$ 629,229	507,109
	2020 $ 21,858 1,702	2019 9,120 (7,625)
	$ 23,560	1,495

3. Guarantee

None of the company's investment using the equity method have been provided as pledge and guarantees as of December 31, 2020 and 2019

(6) Property, plant and equipment

The cost and depreciation changes of the company's property, plant and equipment are as follows:

Property $ 41,360 - - -	Plant 31,668 - - -	Equipment 2,360 1,184 - 9,542	Other 27,106 - (1,858) -
$ 41,360	31,668	13,086	25,248
$ 41,360 - -	31,668 - -	2,360 - -	26,985 127 (6)
$ 41,360	31,668	2,360	27,106
$ - - -	23,614 471 -	2,360 1,615 -	25,603 831 (1,858)
$ -	24,085	3,975	24,576
$ - - -	23,051 563 -	2,360 - -	24,619 990 (6)
$ -	23,614	2,360	25,603

Balance as of December 31, 2020 Balance as of December 31, 2019	$ 41,360 7,583 9,111 672 58,726 $ 41,360 8,054 - 1,503 50,917

None of the company's property, plant and equipment have been provided as pledge and guarantees as of December 31, 2020 and 2019.

(7) Right-of-use asset

The cost and depreciation of the company's leased land, houses and buildings, etc., are detailed as follows:

Cost of Right-of-use asset`：` Balance as of January 1, 2020 Deduct Balance as of December 31, 2020 Balance as of January 1, 2019 Add Balance as of December 31, 2019 Amortization of Right-of-use asset`：` Balance as of January 1, 2020 Amortize Deduct Balance as of December 31, 2020 Balance as of January 1, 2019 Amortize Balance as of December 31, 2019 Book value`：` Balance as of December 31, 2020 Balance as of December 31, 2019	Plant $ 9,420 (1,258)
	$ 8,162
	$ 8,520 900
	$ 9,420
	$ 2,650 2,401 (742)
	$ 4,309
	- 2,650
	$ 2,650
	$ 3,853
	$ 6,770

The decrease and increase of the right-of-use assets are due to the end of the lease term of the company’s retail store and the change of lease term. Please refer to Note 6 (11) for details on the changes in lease liabilities.

(8) Other financial assets-current

financial assets-current
Other receivables Restricted assets-certificate deposits Other	2020.12.31 $ 32,932 61,306 -	2019.12.31 17,780 59,846 14,613
	$ 94,238	92,239

None of the company's other receivables have been impaired as of December 31, 2020 and 2019.

(9) Long-term loans

The details of the company's long-term loans are as follows:

Maturity Unsecured bank loans 2020 Deduct: Long-term loans due within one year Total Unused quota Current interest rate range r payables and other current liabilities Payable expenses Salaries and bonuses payable Payable employee dividends and remuneration to directors and supervisors Pension payable Other	Maturity	2020.12.31 $ - -	2019.12.31 8,176 (8,176) - - 1.62% 2019.12.31 6,516 15,309 27,968 423 2,583
		$ -
		$ -
		- 2020.12.31 $ 7,579 15,256 26,864 437 5,112
		$ 55,248	52,799

(10) Other payables and other current liabilities

(11) Lease liability

The book values of the company's lease liabilities are as follows:

Current Non-current	2020.12.31 ~~$~~ ~~2,211~~ $ 1,777	2019.12.31 ~~2,674~~
		4,240

For maturity analysis, please refer to Note 6 (19) Financial Instruments. The company reduced its lease liabilities by $503,000 in 2020 due to the end of the company's retail store term. In 2019, the company increased its lease liabilities by $900,000 due to the change in leasing period of the company's retail store. Please refer to Note 6 (7) for the explanation of the related changes in the right-of-use assets. The amounts recognized in income are as follows

2020 Interest expense on lease liability $ 86 Changes in lease payments that are not included in the measurement of lease liabilities and Costs for short-term leases and low-value leased assets $ 13 The amounts recognized in the cash flow statement are as follows: 2020 Total cash outflow from lease $ 2,522	2020 $ 86	2020 $ 86	2019 125 - 2019 2,763
	$ 13

	$ 2,522

The company’s renews period for the lease term of land, houses and buildings as office premises and factory plants is usually three to five years.

(12) Employee benefits

Determine the benefit plan

The company determines the adjustment between the present value of welfare obligations and the fair value of project assets as follows

Determine the present value of welfare obligations Fair value of project assets Net Definite Benefits Net Liabilities	2020.12.31 $ (41,072) 15,717	2019.12.31 (39,132) 15,007
	$ (25,355)	(24,125)

The company’s definite benefit plan is transferred to the special labor retirement reserve account of the Bank of Taiwan. The retirement payment of each employee which is subject to the Labor Standards Act is calculated based on the base number of years of service and the average salary of the six months before retirement. (1) Project assest composition

The retirement fund allocated by the company in accordance with the Labor Standards Act is coordinated and managed by Bureau of labor funds under Ministry of Labor (hereinafter referred to as the Labor Fund Bureau). The minimum income allocated shall not be lower than the income calculated based on the two-year fixed deposit interest rate of the local bank.

As of the end of the reporting period, the balance of the company'sLabor Retirement Reserve Special Account in Bank of Taiwan was $15,717 thousands. The information on the use of labor pension funds includes fund return rate and fund asset allocation. Please refer to the information published on the website of Burear of labor funds under Ministry of Labor.

(2) Determination of changes in the present value of welfare obligations The company’s determination of the changes of the present value of welfare Obligations in 2020 and 2019 are as follows:

ns in 2020 and 2019 are as follows:
Confirmation of welfare obligations on January 1 Current service cost and interest Remeasurement of net defined benefit liabilities `－`Profit (loss) of project asset return `－`Actuarial losses due to changes in financial assumptions Project Benefits paid Confirmation of welfare obligations on December 31	2020 $ (39,132) (420) (1,747) (1,573) 1,800	2019 (39,521) (411) 317 (196) 679
	$ (41,072)	(39,132)

(3) Changes in the fair value of project assets

The company’s changes in the fair value of the assets of the determined benefit plan in 2020 and 2019 are as follows:

Fair value of project assets on January 1 Interest income Remeasurement of net defined benefit liabilities `－`Benefits of project asset remuneration (excluding current interest) Amount allocated to the project	2020 $ 15,007 96 515 99	2019 14,925 72 589 100

Project Benefits paid (679) Fair value of project assets on December 31 $ 15,717 15,007

Fair value of project assets on December 31

(4) Expenses recognized as profit and loss

List of recognized expenses in 2020 and 2019 is as follow:

Current service cost Net interest on net confirmed benefit liabilities Manangement fees	2020 $ 157 167 $ 324 2020 $ 324	2019 155 183
		338
		2019 338

(5) Remeasured amount of net confirmed benefit liabilities recognized as other comprehensive gains and losses

The company's accumulated remeasured amount of net defined benefit liabilities recognized in other comprehensive income is as follows:

Accumulated balance on January 1 Recognized loss (profit) in the current period Accumulated balance on December 31	2020 $ (9,518) 2,805	2019 (8,808) (710)
	$ (6,713)	(9,518)

(6) Actuarial assumption

The major actuarial assumptions used by the company to determine the present value of welfare obligations at the end of the financial report are as follows:

Discount rate Future salary increase	2020.12.31 ~~0.30%~~ 2.00%	2019.12.31 ~~0.70%~~ 2.00%

The company expects to pay $454,000 to the definite benefit plan within one year after the reporting date in 2020.

The weighted average duration of the defined benefit plan is 9 years.

(7) Sensitiviry analysis

When calculating and determining the present value of welfare obligations, the company must use judgments and estimates to determine relevant actuarial assumptions on the balance sheet, including discount rates, employee turnover rates, and future salary changes, etc. Any change in actuarial assumptions may materially affect the amount of the company's determined welfare obligations.

When adopting the main actuarial assumptions, the impact of changes in determining the present value of welfare obligations in 2020 and as of December 31, 2019 is as follows:

		Impact on determined	welfare obligations
		Increase 0.25`％`	Decrease0.25`％`
December 31, 2020
Discount rate	$	(994)	1,034
Future salary increase		1,014	(980)
December 31, 2019
Discount rate		(964)	1,005

(954)

Future salary increase

989

The sensitivity analysis above is based on the analysis of the impact of a single a ssumption change while other assumptions remain unchanged. In practice, many changes in assumptions may be linked. The sensitivity analysis is consistent with the method used to calculate the net pension liabilities in the balance sheet. The methods and assumptions used in preparing the sensitivity analysis in this period are the same as those in the previous period.

Determine the allocation plan

The company's defined allocation plan is based on the labor pension regulations and is allocated to Bureau of labor insurance’s labor pension individual account at a rate of 6% of the labor's monthly salary. Under this plan, after the company allocates a fixed amount to Bureau of labor insurance, there is no statutory or constructive obligation to pay additional amounts. The pension expenses under the method for determining the appropriation of pensions in 2020 and 2019 are $2,556,000 and $2,541,000 respectively, which have been allocated to Bureau of labor insurance.

(13) Income tax
Income tax expense
(1) The company's income tax expenses are as follows:

Current income tax expense Occurred in the current period Finance and tax difference Income tax assessment difference Deferred income tax expense The occurrence and reversal of temporary differences Income tax expense	2020 $ 28,445 (71) 2,721	2019 8,778 (91) 2,899 11,586 5,640 17,226
	31,095
	16,185
	$ 47,280

(2) The details of income tax (benefits) expenses recognized by the company under other comprehensive gains and losses are as follows:

The company’s details of income tax (benefits) expenses recognized under other comprehensive gains and losses in 2020 and 2019 are as follows:

Items not reclassified to profit or loss`：` The actuarial profit (loss) of the defined benefit welfare plan	2020 $ (561)	2019 142

(3) The reconciliation between the company's income tax expenses and pre-tax net profit is adjusted as follows:

adjusted as follows:
Net profit before tax Income tax calculated based on the domestic tax rate of the company's location Recognize the net investment interest using the equity method Tax adjustment Undistributed surplus levied 5% Differences between income tax assessment estimation	2020 $ 175,405	2019 251,712
	35,081 4,783 (773) 5,539 2,650	50,342 (32,951) (2,973) - 2,808
	$ 47,280	17,226

2. Deferred income tax assets and liabilities

(1) Unrecognized deferred income tax liabilities

The items that the company's overseas investee companies have not recognized as deferred income tax liabilities are as follows:

109.12.31 Accumulated unrealized profit share with overseas investee companies $ 328,937 recognized deferred income tax assets e items that the company's overseas investee companies have not zed as deferred income tax assets are as follows: 109.12.31 Accumulated unrealized loss share with overseas investee companies $ 186,948	109.12.31 $ 328,937	108.12.31 339,571 108.12.31 182,177

(2) Unrecognized deferred income tax assets

The items that the company's overseas investee companies have not recognized as deferred income tax assets are as follows:

The temporary differences related to overseas investee companies are not recognized as deferred income tax assets and liabilities because

the company can control the timing of the reversal of the temporary differences, and it is likely that they will not revert in the foreseeable future in 2020 and as of December 31, 2019.

(3) Recognized deferred tax assets and liabilities

The changes in the company's deferred income tax assets and liabilities are as Follows:

Deferred income tax asset`：` Balance as of January 1, 2020 (Debit)/Credit Income Statement Balance as of December 31, 2020 Balance as of January 1, 2019 (Debit)/Credit Income Statement Balance as of December 31, 2019 Deferred income tax liability`：` Balance as of January 1, 2020 (Debit)/Credit Income Statemen (Debit)/Credit other comprehensive gain/loss Balance as of December 31, 2020 Balance as of January 1, 2019 (Debit)/Credit Income Statemen (Debit)/Credit other comprehensive	Defined benefit plan $ 7,770 (315)	Other 9,168 4,346	Total 16,938 4,031 20,969 22,628 (5,690) 16,938 Total 1,903 20,216 (561) 21,558 1,811 (50) 142
	$ 7,455	13,514
	$ 7,722 48	14,906 (5,738)
	$ 7,770	9,168
	Defined benefitplan $ 1,902 - (561)	Other 1 20,216 -
	$ 1,341	20,217
	$ 1,760 - 142	51 (50) -

(Debit)/Credit other comprehensive

gain/loss Balance as of December 31, 2019

$ 1,902

1,903

The income tax settlement declaration of the company's profitable business has been approved by the auditing agency till year of 2018.
(14) Capital and other equity
Equity

The company’s authorized total capital stock is $3,500,000 thousands. A par value of $10 per share with total of 350,000 thousand shares. The aforesaid total authorized share capital is all common stock. The issued shares are 181,674 thousand shares and 186,674 thousand shares respectively and the payment for all issued shares has been received.

Capital reserve

The content of the company's capital reserve balance is as follows:

Premium of issued sotck Convertible corporate bonds during the redemption period are classified as other items in capital reserve Capital reserve arising from share-based payment transactions Adopting the equity method to recognize the changes in the net value of the equity of affiliated companies and joint venture Changes in affiliated companies recognized using the equity method Other	2020.12.31 $ 308,780 88,350 23,100 343 836 550	2019.12.31 329,683 88,350 23,100 - - 550
	$ 421,959	441,683

According to the Company Act, the capital reserve must be given priority to make up for the losses before it can be issued to new shares or cash in proportion to the shareholders’ original shares based on the realized capital reserve. The “realized capital reserve” mentioned in the preceding paragraph includes the excess of the issuance of stocks in excess of the par value and the income received from donations. In accordance with “Regulations Governing the Offering and Issuance of Securities by Securities Issuers”, the total amount of the capital reserve that can be allocated for replenishment each year shall not exceed 10% of the paid-in capital.

Retained earning

According to the company’s articles of association, if there is a surplus in the annual final accounts, the tax should be paid first and make up for the accumulated losses over the years, then 10% of legal reserve shall be set aside and the special reserve shall be set aside or converted according to the law or the competent authority. If there is still a surplus after, the balance shall be added to the undistributed reserve accumulated in the previous year and the board of directors shall draft a distribution proposal and submit it to the shareholders meeting for a resolution.

In accordance with the Company Act, the company authorizes the board of directors to have more than two-thirds of the directors present and the resolution of more than half of the directors present shall distribute dividends and bonuses or legal reserve stipulated in Article 241, Paragraph 1 of the Company Act and all or part of the paid-in capital. The above all shall be distributed in cash and reported to the board of directors.

Shareholder dividends and employee dividends are issued in two types: stock

dividends and cash dividends, of which the ratio of cash dividends shall not be less than 10%.

The company's board of directors resolved to distribute cash dividends for 2019 earnings on March 20, 2020, and in the shareholders' meeting resolved cash dividends for 2018 earnings on June 12, 2019. The dividends distributed to owners are as follows:

2019 Dividend rate Amount Dividends distributed to owners of common stock`：` Cash $ 0.82 141,340	2018 Dividend rate Amount 0.52 97,071	2018 Dividend rate Amount 0.52 97,071
	Dividend rate
	0.52

On March 18, 2021, the board of directors proposed a profit distribution proposal for 2020. The amount of dividends distributed to owners is as follows:

2020 Dividend rate Amount Dividends distributed to owners of common stock ： Cash $ 0.80 137,339

4. Treasury stock

The company passed a resolution of the board of directors on March 20, 2020 to buy back 5,000 thousand common stock as necessary to maintain

the company's credit and shareholders' equity. Since the company's original issued common stock were 186,674 thousand shares, the proposed purchase of shares this time are accounted for 2.68% of the issued common stock, which did not have a significant impact on the company's financial status.

the company's credit and shareholders' equity. The base date for capital reduction is August 10, 2020, and the change registration has been completed.

The company passed a resolution of the board of directors on August 9, 2019 to buy back 10,000 thousand common stock as to transfer to employees. Since the company's original issued common stock were 186,674 thousand shares, the proposed purchase of shares this time are accounted for 5.36% of the issued common stock, which did not have a significant impact on the company's financial status. The treasury stock’s buyback plan was completed on October 9, 2019. A total of 10,000 thousand shares were bought back with total amount of $149,507 thousands.

As of December 31, 2019 and 2020, the number of shares repurchased as treasury stock was 10,000 thousand shares.

Other equity (net after tax)

Balance as of January 1, 2020 difference arising from the exchange of net assets of foreign operating institutions Unrealized gains and losses of financial assets measured at fair value through other comprehensive gains and losses	Difference arising from the exchange of net assets of foreign operating institutions	Unrealized gains and losses of financial assets measured at fair value through other comprehensive gains and losses	Other (1,413) (15,813) 68,818
	$ (178,989) (15,813) -	177,576 - 68,818

Dispose of equity instruments measured at
fair value through other comprehensive
gains and losses
Balance as of December 31, 2020
Balance as of January 1, 2019
difference arising from the exchange of net
assets of foreign operating institutions
Unrealized gains and losses of financial
assets measured at fair value through
other comprehensive gains and losses
Dispose of equity instruments measured at
fair value through other comprehensive
gains and losses
Balance as of December 31, 2019

-
57
57
$
(194,802)
246,451
51,649
$ (89,632)
5,250
(84,382)
(89,357)
-
(89,357)
-
173,177
173,177
-
(851)
(851)
$
(178,989)
177,576
(1,413)

(15) Earning per share

1. Basic earning per share

The basic earnings per share of the company for 2020 and 2019 are calculated on the basis of the net profit attributable to ordinary equity holders of the company and the weighted average number of outstanding shares of ordinary shares. The relevant calculations are as follows:

(1) Net profit attributable to holders of the company's common stock

		2020		2019
Net profit attributable to holders of	$	128,125		234,486
the company's common stock
(2) The weighted average number of common shares	outstanding
		2020		2019
Common shares outstanding on January 1		176,674		186,674
Impact of treasury stocks		(3,437)		(2,927)
The weighted average number of common shares		173,237		183,747
outstanding on December 31
		2020		2019
(3) Basic earning per share (NT $)	$		0.74		1.28

2. Diluted earnings per share

The diluted earnings per share for 2020 and 2019 are calculated on the basis of the net profit attributable to common equity holders of the company and the

weighted average number of common stocks outstanding after adjusting the dilution effect of all potential common stocks. The relevant calculations are as follows :

(1) Net profit attributable to the company's ordinary equity holders (diluted)

Net profit attributable to holders of the company’s common stocks (Basically diluted)	2020	2019 234,486
	$ 128,125

(2) Weighted average number of shares outstanding (diluted) of common stocks (thousand shares)

Weighted average number of shares outstanding (basic) The impact of employee stock dividends The weighted average number of common stocks outstanding on December 31 (diluted)		2020 173,237 2	2019 183,747 2 183,749
		173,239

(3) Diluted earnings per share (NT$)

	2020		2019
$		0.74		1.27

				2020	2019
Diluted earnings per share			$	0.74	1.27
nue from customer contracts
venue breakdown
				2020	2019
Major regional markets`：`
China and HK			$	242,426	463,853
Taiwan				195,530	179,948
United States				120,875	179,539
Korea				207,763	209,877
Other				118,534	93,690
Total			$	885,128	1,126,907
Main product/service line`：`
LED components and product	manufacturing		$	838,674	1,108,132
and sales
Construction				7,900	13,405
Other				38,554	5,370
Total			$	885,128	1,126,907
ntract balance
		2020.12.31		2019.12.31	2019.1.1
Contract assets- construction	$	100,209		172,295	169,578

(16) Revenue from customer contracts
Revenue breakdown
1. Contract balance

Please refer to Note 6 (3) for the disclosure of accounts receivable and its impairment. Changes in contract assets are mainly due to the difference between the time when the company transfers goods or services to the customer to meet the performance obligations and the time when the customer pays.

(17) Remuneration of employees, directors and supervisors

According to the company’s articles of association, the current year’s pre-tax benefits shall be used to deduct the benefits before the distribution of employee compensation and directors’ remuneration. After retaining the amount of accumulated losses, if there is a balance, the employee’s remuneration shall not be less than 8% and the director and supervisors’ remuneration shall not be more than 2%. The

aforementioned employee remuneration which may be issued by stock or cash, includes employees from affiliated companies who meet certain conditions.

The company’s remuneration for employees in 2020 and 2019 is NT$15,592,000 and NT$22,374,000 respectively and the remuneration for directors and supervisors is NT$3,898,000 and NT$5,594,000, which are based on the company’s pre-tax net profit for each period. The amount before deduction of employees, directors and supervisors’ remuneration multiplied by the number of employees’ remuneration and directors’ and supervisors’ remuneration as stipulated in the company’s articles of association is the basis for estimation, and is reported as operating costs or operating expenses for 2020 and 2019. Related information have been disclosed on Market Observation Post System.

The remuneration of employees, directors and supervisors allocated by the aforementioned board of directors' resolutions does not differ from the estimated amounts in the company's 2020 and 2019 individual financial reports.

(18) Non operating income and expenses

Interest income

The details of the company's interest income are as follows:

erating income and expenses est income ails of the company's interest income are as follows:
2020 Interest from bank deposits $ 3,738 r income ails of the company’s other income for 2020 and 2019 are as follows: 2020 Rental income $ 114 Dividend inocme 3,691 Government subsidy income 4,693 Other 16,699 $ 25,197	2020 $ 3,738	2019 3,610 2019 114 19,592 - 6,986 26,692
	$ 114 3,691 4,693 16,699
	$ 25,197

Other income

The details of the company’s other income for 2020 and 2019 are as follows:

3. Other gains and losses

The details of the company’s other gains and losses for 2020 and 2019 are as follows:

Net foreign currency exchange gains Gains from disposal of fixed assets Gains from disposal of investment Other	2020	2019 25,318 - 388 (280)
	$ 58,979 143 - (13) $ 59,109
		25,426

(19) Financial instruments

Credit risk
(1) Exposure of credit risk

The book value of financial assets and contract assets represents the maximum amount of credit risk.

(2) Concentration of credit risk

Since the company has a broad customer base and does not significantly concentrate on transactions with a single customer and the sales area is scattered, there is no significant concentration of the credit risk of accounts receivable. In order to reduce credit risk, the company also regularly and continuously evaluates the financial situation of customers, but usually does not require customers to provide collateral.

(3) Credit risk of accounts receivable
Please refer to Note 6 (3) for the credit risk exposure information of notes and accounts receivable.

Other financial assets measured at amortized cost include other receivables and certificates of deposit, etc. Please refer to Note 6 (8) for details of the impairment provision status on December 31, 2019 and 2020.

All the financial assets listed above are with low credit risk. Therefore, the amount of expected credit losses in twelve months is used to measure the allowance for loss during the period (for the explanation of how the company determines that the credit risk is low, please refer to Note 4 (6)).

Liquidity risk

The following table shows the contractual maturity dates of financial liabilities, excluding the effect of estimated interest.

Book value	Contractual	within 1yr	1-2yr	above 2yrs - - -
	cash flow
	(1,641,955) (4,044) (50,136)	(1,641,955) (2,256) (50,136)	- (1,788) -
$ 1,696,079	(1,696,135)	(1,694,347)	(1,788)	-
	(8,308) (1,688,963) (7,060) (51,394)	(8,308) (1,688,963) (2,763) (51,394)	- - (2,509) -	- - (1,788) -
$ 1,755,447	(1,755,725)	(1,751,428)	(2,509)	(1,788)

The company does not expect the cash flow analysis on the due date to occur significantly earlier, or the actual amount will be significantly different. 3. Exchange rate risk

(1) Exposure to exchange rate risk

The company's financial assets and liabilities exposed to significant foreign currency exchange rate risks are as follows:

Financial assets Monetary item RMB USD HKD Financial liabilities		2020.12.31			2019.12.31
	Foreign	Exange rate		Foreign currency	Exchange rate
	currency		NTD
	$ 238 13,391 21,912 181 101 440,435	4.377 28.480 3.673 4.377 28.480 3.673	1,041 381,375 80,483 794 2,882 1,617,720	220 17,345 34,128 - - 388,543	4.305 29.980 3.849 - - 3.849
Monetary item
RMB USD HKD

(2) Sensitivity analysis

The company’s exchange rate risk mainly comes from cash denominated in foreign currencies, cash equivalents and accounts receivable, etc., resulting in foreign currency exchange gains and losses during conversion. In 2020 and 2019, when the NTD depreciates 5% against the USD, RMB and HKD, under all other

factors remain unchanged, the net profit before tax for 2020 and 2019 decreased by NT$57,925,000 and NT$42,166,000 respectively.

(3) Exchange gains and losses of monetary items

Due to the wide variety of functional currencies that the company uses, the exchange gain and loss information of monetary items is disclosed in summary. The foreign currency exchange gains (including realized and unrealized) for 2020 and 2019 are NT$58,979 thousands and NT$25,318 thousands repectively.

4. Interest rate analysis

The details of the company's financial assets and financial liabilities interest rate risk exposure are as follows:

Fixed interest rate instruments`：` Financial assets Variable interest rate instruments`：` Financial assets Financial liabilities	Book value 2020.12.31 2019.12.31 $ 141,567 254,339	Book value 2020.12.31 2019.12.31 $ 141,567 254,339
	2020.12.31 $ 141,567
	$ 468,167 -	280,110 (8,176)
	$ 468,167	271,934

The company's financial assets and financial liabilities interest rate risk exposure are described in the liquidity risk management of this note.

The following sensitivity analysis is determined based on the interest rate risk of non-derivative instruments on the reporting date. For floating rate liabilities, the analysis method is based on the assumption that the amount of liabilities outstanding on the reporting date will be circulated throughout the year. The rate of change used by the company when reporting interest rates internally to management is an increase or decrease of 1% in interest rates, which also represents management's assessment of the reasonably possible range of changes in interest rates.

If the interest rate increases or decreases by 1% and all other variables remain unchanged, the company’s net profit before tax for 2020 and 2019 increases or decreases NT$4,682 thousands and NT$2,719 thousands respectively. The main reason is this the company's demand deposits and long-term loans with variable interest rates.

5. Other price risk

If the price of equity securities changes on the reporting date (the two-period analysis adopts the same basis and assumes that other changing factors remain unchanged), the impact on the comprehensive profit and loss items is as follows:

Stock price on reporting day Increase 5% Decrease 5%	2020 Other comprehe nsive profit and loss after-tax amount After-tax profit and loss $ 7,627 -	2020 Other comprehe nsive profit and loss after-tax amount After-tax profit and loss $ 7,627 -	2019 Other compreh ensive profit and loss after-tax amount After-tax profit and loss 7,427 -	2019 Other compreh ensive profit and loss after-tax amount After-tax profit and loss 7,427 -
	Other comprehe nsive profit and loss after-tax amount $ 7,627		Other compreh ensive profit and loss after-tax amount 7,427
	$ (7,627)	-	(7,427)	-

6. Fair value information

(1) Types and fair value of financial instruments

The company's financial assets and liabilities measured at fair value through profit and loss, financial assets and liabilities for hedging, and financial assets measured at fair value through other comprehensive gains and losses are measured at fair value on the basis of repeatability. The book value and fair value of various types of financial assets and liabilities (including fair value level information. For the book value of financial instruments that are not

measured by fair value is a reasonable approximation of fair value and lease liabilities, there is no need to disclose fair value information according to regulations ) are listed as follows:

	2020.12.31	2020.12.31	2020.12.31	Total 155,424 555,571
Book value $ 155,424 555,571		Fair value
	Level 1 155,424 -	Level 2 - -	Level 3 - 555,571
$ 710,995	155,424	-	555,571	710,995
$ 468,690 323,192 78,500 94,238 1,760	- - - - -	- - - - -	- - - - -	- - - - -
$ 1,677,375	-	-	-	-
$ 1,641,955 50,136 3,988	- - -	- - -	- - -	- - -
$ 1,696,079	-	-	-	-
	2019.12.31			Total 154,906 490,901
Book value $ 154,906 490,901		Fair value
	Level 1 154,906 -	Level 2 - -	Level 3 - 490,901

unlisted (counter) stocks Total Financial assets measured at amortized cost Cash and case equivalent Notes and accounts receivable (Including related parties) Other receivables- related parties Other financial assets- current Refundable deposits Total Financial liabilities measured at amortized cost Bank loan Notes and accounts payable (Including related parties) Other payables Lease liabilities (including non-current) Total	$ 645,807 154,906 - 490,901 645,807
	$ 460,339 - - - - 343,572 - - - - 50,000 - - - - 92,239 - - - - 1,854 - - - -
	$ 948,004 - - - -
	$ 8,176 $ 1,688,963 - - - - 51,394 - - - - 6,914 - - - -
	$ 1,755,447 - - - -

(2) Fair value evaluation technique for measuring financial instruments by fair value

If a financial instrument has a public quotation in the active market, the public quotation in the active market shall be the fair value. The market prices announced by major exchanges and central government bond over-the-counter trading centers judged to be popular bonds are the basis for the fair value of listed (counter) equity instruments and debt instruments with publicly quoted prices on the active market.

If public quotations of financial instruments can be obtained from exchanges, brokers, underwriters, industry associations, pricing service agencies or competent authorities in a timely and frequent manner and the prices represent actual and frequent fair market transactions, then the financial instruments have an active market public quotation. If the above conditions are not met, the market is deemed inactive. In general, large bid-ask spreads, significant increase in bid-ask spreads, or very little trading volume are indicators of inactive markets.

If the financial instruments held by the company have an active market, their fair values are listed as follows according to their categories and attributes: When financial assets and liabilities measured at fair value through profit and loss are quoted in an active market, the market price is the fair value. Except for the above-mentioned financial instruments within active markets, the fair values of other financial instruments are obtained through evaluation techniques or with reference to the quotations from counterparties. The fair value obtained through evaluation technique can refer to the current fair value of other financial instruments with similar substantive conditions and characteristics, discounted cash flow method, or other evaluation techniques, including the use of market information available on the

date of the consolidated balance sheet calculated.

If the financial instruments held by the company have an inactive market, their fair values are listed as follows according to their categories and attributes: Equity instruments without public quotation: If there is no market for reference, the evaluation method is used to estimate. The estimates and assumptions used are consistent with the information used by market participants as estimates and assumptions when pricing financial products. The information is available to the consolidated company.

The interest rate of bank borrowing is mostly close to the market interest rate, so the borrowing amount is taken as the fair value. Please refer to Note 6 (9) for the interest rate.

(3) Transfer between level 1 and level 2

No such transfer in 2020 and 2019.

(4) List of changes in level 3

January 1, 2020 Total profit or loss Recognized in other comprehensive income December 31, 2020 January 1, 2019 Total profit or loss Recognized in other comprehensive income December 31, 2019		`Measured at fair value through` `other comprehensive gains` `and losses` `Equity instruments without` `publicquotation` $ 490,901 64,670 $ 555,571 $ 338,238 152,663 $ 490,901

The above-mentioned total profit or loss is reported in the series of "unrealized appraised profit (loss) of financial assets measured at fair value through other comprehensive gains and losses".

Among them, those related to assets still held as of December 31, 2019 and 2020 are as follows:

s follows:
Total profit or loss Recognized in other comprehensive income (Listed in “Unrealized Appraisal Profits and Losses of Financial Assets Measured at Fair Value through Other Comprehensive income'')	2020 $ 64,670	2019 152,663

(5) Quantitative information on the fair value measurement of significant unobservable inputs (level 3)

The company's fair value measurement is classified as the third level mainly for financial assets measured at fair value through other comprehensive gains and losses-equity instrument investment without an active market. Most of the company’s fair value is classified as the third level with only a single significant unobservable input and only equity instrument investments without an active market have multiple significant unobservable inputs. The significant unobservable input values of equity instrument investment without an active market are independent to each other, so there is no interrelationship.

The quantitative information list of significant unobservable input values is as follows:

Item Financial assets measured at fair value through other comprehensiv e gains and losses- equity instrument investment without an active market	Evaluation technique Net asset value method	Significant unobservable input value `‧`Net asset value	Significant unobservable input value and fair value relationship
			Not applicable

(20) Financial risk management

Summary

The company is exposed to the following risks due to the use of financial instruments (1) Credit risk

(2) Liquidity risk
(3) Market risk

This note expresses the company's risk information on the above-mentioned risks, the company's objectives, policies and procedures for measuring and managing risks. For further quantitative disclosure, please refer to the respective notes of the individual financial report.

Risk management structure

The company's financial division provides services for each business, analyzes the internal risk report of risk insurance according to the degree and breadth of risk, supervises and manages the financial risks related to the company's operations. The company establishes appropriate internal policies and systems to control credit risk and liquidity risk. As for market risks, we collect information from various parties, hoping to accurately predict the future trends of exchange rates, interest rates, etc., and use financial instruments to avoid risky risks when necessary to reduce the impact of these risks. The use of financial instruments is regulated by the company’s relevant policies, and internal auditors continue to review compliance with policies and risk limits. The company does not trade financial instruments for speculative purposes.

Credit risk

Credit risk is the risk of the company's financial loss due to the inability of

its customers or financial instrument counterparties to fulfill contractual obligations. It mainly comes from the company's accounts receivable from customers and securities investments.

(1) Accounts receivable and other receivables

The company's accounts receivable covers many customers, scattered in different industries and geographic regions, and there is no significant concentration of transactions with a single customer and the sales area is scattered, so the credit risk of accounts receivable is not likely to be significantly concentrated. The company has established a credit policy. According to this policy, before standard payment and shipping conditions are given, it is necessary to analyze the credit rating of each new customer individually before the transaction begins.

(2) Investment

The credit risk of bank deposits, fixed income investments and other financial instruments is measured and monitored by the company's financial division. Since the transaction partner and the performing party are all creditworthy banks and financial institutions, corporate organizations and government agencies with

investment level and above, there is no significant credit risk.

Liquidity risk

Liquidity risk refers to the risk that the company cannot deliver cash or other financial assets to pay off financial liabilities and fail to perform related obligations. The company manages and maintains sufficient cash and cash equivalents to support the company's operations and reduce the impact of cash flow fluctuations. The management of the company supervises the use of bank financing lines and ensures compliance with the terms of the loan contract.

Market risk

Market risk refers to the risk that changes in market prices, such as exchange rates, interest rates, and equity instrument prices, affect the company's earnings or the value of financial instruments held. The goal of market risk management is to control the risk of market risk within an acceptable range and minimize the risk.

(1) Exchange rate risk

The company is exposed to sales and purchase transactions that are not denominated in functional currencies, which causes the company to generate exchange rate fluctuation risks. The company’s functional currency is mainly NTD. The main denomination currencies for these transactions are USD, RMB and HKD.

(2) Other market price risk

The company incurs equity price risk insurance due to equity securities and open fund investments in listed counters.

(21) Capital management

The company plans its capital management based on the characteristics of the current industry and the future development of the company, taking changes in the external environment and other factors into account, to ensure that the company has the necessary financial resources and operating plans to support the future working capital and capital expenditures, research and development expenses, debt repayment and dividend expenses, etc. The management authority uses an appropriate total debt/equity ratio to determine the company’s optimal capital structure. In order to maintain a sound capital base, the company optimizes the balance of debt and equity so to increase shareholder compensation. The company’s debt-to-equity ratio at the reporting date is as follows:

Total liabilities Total equity Debt-to-equity ratio	2020.12.31 $ 1,779,425 2,699,256 66%	2019.12.31 1,792,248 2,731,434 66%

As of December 31, 2019 and 2020, the company's capital management method has not changed significantly.

7. Related party transactions

(1) Name and relationship of related parties

The related party involved in transactions with the company during the period covered in this individual financial report are as follows:

Name of related parties Relationship with the company[AB Corp. ] Affiliated company of the compan y[WanHui Enterprise Co,. LTD. ] Subsidiary of the company[KoBrite Taiwan Corporation ] Subsidiary of the company

(2) Major transactions with related parties

1. Operating income

The company's major sales amounts to related parties are as follows:

Subsidiaries Affiliated company`－`AB Corp.	2020 $ 31,504 101,388	2019 38,094 168,828
	$ 132,892	206,922

The company's sales price to the above-mentioned related parties is based on the company's various product price lists, and the payment to the

above-mentioned related parties is collected from 90 to 135 days after the month end.

2. Purchase

The company's purchase amount from related parties is as follows:

Subsidiaries: WanHui Enterprise KoBrite Taiwan Corporation	2020 $ 615,560 11,662	2019 959,343 4,189
	$ 627,222	963,532

The company's purchase terms and conditions from the above-mentioned related parties are from 85 days to 115 days of monthly settlement, and the price is no different from other manufacturers.

Amounts due from related parties

The details of the company's accounts receivable from related parties are as follows:

Account item Type of relatedparties Accounts receivable Affiliated company`－`AB Corp.	2020.12.31 $ 40,033	2019.12.31 50,033

4. Amounts due to related parties

The details of the company's accounts payable to related parties are as follows:

Account item Accounts payable Accounts payable	Type of relatedparties Subsidiary`－`WanHui Enterprise Subsidiary`－`KoBrite	2020.12.31 $ 1,617,627 1,565	2019.12.31 1,667,486 1,629
		$ 1,619,192	1,669,115

5. Loans to related parties

The actual expenditures of the company’s capital loans and related parties are as follows:

Subsidiary`－`KoBrite	2020.12.31 $ 78,500	2019.12.31 50,000

The company's loans to related parties are based on the average interest rate of the company's short-term borrowings from financial institutions in the year of appropriation, and they are all unsecured loans. After evaluation, there is no need to mention impairment losses.

(3) Key management personnel transactions

Remuneration of key management personnel

Short-term employee benefits Post-employment benefits	2020 $ 9,921 91	2019 9,867 69
	$ 10,012	9,936

8. Pledged assets

dged assets
`Asset name`	`Subject topledge`	2020.12.31 $ 61,306	2019.12.31 59,846
Other financial assets- current(pledged fixed deposit)	Contract bond and warranty deposit

9. Significant contingent liabilities and unrecognized contractual commitments: N/A 10. Loss from major disaster: N/A

11. Significant post-period matters: N/A 12. Other

(1) The functions of employee benefits, depreciation and amortization expenses are summarized as follows:

mmarized as follows:
Function Category	2020				2019
	Attributable to operating costs	Attributable to operating expenses	Total		Attributable to operating costs	Attributable to operating expenses		Total
Employee benefit Salary expense Labor and health insurance expense Pension expense Directors' remuneration Other employee benefits Depreciation expense Amortization fee	`-` `-` `-` `-` `-` `307` `-`	`73,902` `5,508` `2,880` `3,499` `2,274` `5,011` `259`	`73,902` `5,508` `2,880` `3,499` `2,274` `5,318` `259`		`-` `-` `-` `-` `-` `-` `-`	`82,862` `5,467` `2,879` `4,629` `854` `4,203` `287`		`82,862` `5,467` `2,879` `4,629` `854` `4,203` `287`
Number of employees Number of directors who are not part-time employees Average employee benefits Average employee salary expense Average employee salary expense adjustment situation Supervisor's remuneration				2020 ~~81~~			2019
							~~79~~
				4			3
				$ 1,098			1,211
				$ 960			1,090
				(11.93)% $ 1,395	(11.93)%		13.87% 2,045

The company's salary and remuneration policy (including directors, supervisors, managers and employees) are as follows:

In order to implement corporate governance, the company expects to make the remuneration of directors, supervisors and managers transparent, rational and institutionalized, and has formulated the "Directors, Supervisors and Managers Compensation Regulation". The formulation and revision of such regulation need to be reviewed by the Salary and Compensation Committee and resolved by the board of directors. The main specifications are as follows:

The remuneration of directors, independent directors and supervisors includes fixed transportation fees and fluctuated directors and supervisors' remuneration. Independent directors only receive transportation fees and do not participate in the distribution of directors and supervisors' remuneration.
Manager’s salary includes fixed salary and variable salary. Limiting the annual increase rate of the fixed salary and the percentage of variable salary paid to managers of job grade over the current year’s pre-tax benefits. Exceeding the limit requires special contributions to be reviewed by the compensation committee and reported to the board of directors for approval.
The Salary and Compensation Committee regularly reviews the reasonableness of the remuneration of directors, supervisors and managers and the appropriateness of the

proportion of the overall managerial salaries to the all.

(2) The coronavirus pneumonia epidemic has not had a significant impact on the production and sales of the company and its subsidiaries. The company will continue to pay attention to the development of the incident and related impacts.

13. Disclosure of Matters in Notes

(1) Information with regard to major transactions

In 2020, in accordance with the requirements of the securities issuer’s financial report preparation standards, the relevant information about major transactions that should be disclosed again by the company is as follows:

Loans to others

Unit: NTD thousand

#	Companies that lend loans	Prospective borrowers	Accounting subjects	The highest amount of the current period	Ending balance	Actual lending amount	Interest rate range	Loan by nature (note 1)	Transaction amount with regard to business	Reasons for short-term financing	Allowance for loss amount	Collateral	Collateral	Limited amount of loans for each entity (Note 2)	Limited amout of total loans (Note 3)
												Name	Value
1 2 3	Bright LED electronics DongGuan BRTLED DongGuan BRTLED	KoBrite Taiwan Henan Bright Crystal DongGuan KoBrite	Other receivables Other receivables Other receivables	80,000 37,905 (RMB $8,660) 26,262 (RMB $6,000)	80,000 37,905 (RMB $8,660) 26,262 (RMB $6,000)	78,500 37,905 (RMB $8,660) 26,262 (RMB $6,000)	2% 2% 2%	2 2 2	- - -	Operating turnover Operating turnover Operating turnover	- - -	N N N	- - -	269,92 210,14 210,14	6 1,079,70 5 840,58 5 840,58

Note 3: The limit for total amount of capital loans shall not exceed 40% of the net worth of the enterprise. Foreign companies in which the company directly or indirectly hold 100% of the voting shares are not subject to the 40% limit on total amount of loans to the company's net worth, but the respective limits for capital loans should still not exceed 100% of the company's net worth.

Note 4: It is converted to NTD at the RMB exchange rate of 4.377 at the end of the period

2. Endorsement for others: N/A

The situation of holding marketable securities at the end of the period (excluding investment in subsidiaries, affiliates and joint ventures): Unit: thousand shares

Holding Company	Types and names of securities	Relationship with the securities issuer	Accounting items		End of term	End of term	End of term
				Unit/share	Book value	Holding ratio	Fair value
The company `〃` `〃` `〃` The company `〃` `〃`	Powertip DS MFA Financial Inc (MFO) Seaspan Corp (SSWA) WK 9 Foxfortune Technology Ventures Ltd. New fund capital	Corporate director N?A `〃` `〃` Corporate director `〃` `〃`	Financial assets measured at fair value through other comprehensive gains and losses-non-current `〃` `〃` `〃` Financial assets measured at fair value through other comprehensive gains and losses-non-current `〃` `〃`	19,020 764 2.8 1.2 15,380 2,000 10,000	152,542 - 2,028 854 342,008 117,711 95,852	12% 3% -% -% 15% 12% 16%	Price per stock market =8.02 Price per stock market= - Price per stock market= (US25.43) Price per stock market= (US25.00) 342,008 117,711 95,852
					710,995

The cumulative amount of buying or selling the same securities reaches NTD$300 million or more than 20% of the paid-in capital: N/A
Acquired real estate with an amount of NTD$300 million or more than 20% of the paid-in capital: N/A
Disposal of real estate with an amount of NTD$300 million or more than 20% of the paid-in capital: N/A
The amount of purchases and sales with related parties reaches NTD$100 million or more than 20% of the paid-in capital:

`Import` `(sell)` `company`	`Trading` `partner` `Name`	`Relations`	`Transaction`	`Transaction`	`Transaction`	`Transaction`	`Circumstances` `and reasons for` `trading condition` `which are different` `from regular trading`	`Circumstances` `and reasons for` `trading condition` `which are different` `from regular trading`	`Notes and accounts` `receivable (paid)`	`Notes and accounts` `receivable (paid)`	`Note`
			`Import` `(sell)`	`Amount`	`% of total` `import` `(sales)`	`Credit` `period`	`Price`	`Credit` `period`	`Balance`	`% of total` `notes` `and accounts` `receivable` `(paid)`
The company The company WanHui (HK) WanHui (HK) DongGuan BRTLED	AB Corp. WanHui (HK) The company DongGuan BRTLED WanHui (HK)	Affiliated company Subsidiary 100% owned parent comp any Subsidiary 100% owned parent comp any	(Sell) Import (Sell) Import (Sell)	(101,388 615,56 (615,560 623,38 (623,387	(11) % 89 % (76) % 77 % (62) %	OA 135 days Ajust according to its funding needs Ajust according to its funding needs Ajust according to its funding needs Ajust according to its funding needs	Price agreement according to the comapny Price agreement according to the comapny Price agreement according to the comapny Price agreement according to the comapny Price agreement according to the comapny	No significant differences No significant differences No significant differences No significant differences No significant differences	40,03 (1,617,627 1,617,62 (849,176 849,17	3 12% (99)% 7 99% (92)% 6 84%

Receivables from related parties amount to NT$100 million or more than 20% of the paid-in capital:

Company with account receivables	Trading partner Name	Relations	Balance of accounts receivable from related parties	Turnover	Overdue amounts from related parties Amount Processing	Overdue amounts from related parties Amount Processing	Amounts receivable from related parties recovered after theperiod	allowance for loss amount	Note
					Amount
WanHui (HK) DongGuan BRTLED KoBrite	The company WanHui (HK) WanHui (HK)	100% owned parent company `〃` `〃`	1,617,627 849,176 165,702	0.37 0.72 0.14	`註`1 `註`1 `註`1	`註`1 `註`1 `註`1	95,761 80,561 13,809	- - -

Note 1: The difference between receivables and payables shall be collected based on fund requirements.

9. Engage in derivatives trading: N/A

(2) Re-investment business related information

The company's reinvestment business information for 2020 is as follows (excluding mainland investee companies):

Investor Name	Investee Name	Region	Main business Items	Original investment amount Original investment amount	Original investment amount Original investment amount	Hold at the end of period	Hold at the end of period	Hold at the end of period	Investee Current income	`Recognized` `in this` `period` Investment (Profit) Loss	Note
				End of period	End of last year	Shares (thousand)	Ratio	Book value
The company 〃〃〃〃〃 KoBrite KoBrite	WanHui (HK) KoBrite Corp. LiSheng Int’l AB Corp. WanShui Powertip image KoBrite Taiwan Bright Crystal (HK)	HK Mauritius HK US HK TW TW HK	Processing business of LED indicators, displays and related components Investment holding PCB processing Dealer Investment holding Optical lens, lens design and production Investment holding Investment holding	524,673 1,082,499 139,297 1,702 61,910 64,966 500,000 404,342	524,673 1,082,499 139,297 4,943 61,910 64,966 500,000 404,342	11,460 8,783,545 35,740 52 3 5,820 50,000 100,994	100% 93% 60% 16% 23% 19% 100% 80%	2,163,691 246,408 72,179 7,369 30,379 82,240 85,530 206,073	(32,013) (30,512) 24,356 (976) 6,883 111,661 (16,870) (13,007)	(32,013) (28,267) 14,509 (989) 1,586 21,261 recognized by KoBrite for investment gains and losses recognized by KoBrite for investment gains and losses	Subsidiary 〃 `〃` adopting the equity method `〃` `〃` 〃〃

(3) Information with regard to investment in China

1. Relevant information about reinvestment in China:

`Name of` `invested company` `in China`	`Main business` `Items`	`Paid-in` `capital`	`Investment` `method`	`Cumulative` `remittances` `from Taiwan` `at the` `beginning of` `the period` `Amount` `(Note`1`)`	Exported or recovered in this period Investment amount	Exported or recovered in this period Investment amount	`Cumulative` `remittance` `s from` `Taiwan at` `the end of` `the period` `Amount` `(Note`1`)`	`Current` `profit` `(loss) of` `the` `investee c` `ompany`	`Direct or` `indirect` `investment` `Holding` `ratio`	`Recognized i` `nvestment` `profit` `(loss) in` `this period` (`Note`3)	`End of` `period inves` `tment` `Book value`	`Investment` `repatriated` `as of` `the current` `period` `Income` `(Note`1`)` - - 8,958
					`Export` `(Note 1)`	`Amount` `(Note`1`)`
DongGuan BRTLED DongGuan KoBrite DongGuan Yi-Run	Manufacture and sell of LED component and its related products Production and processing of LED chips production and sale of	HKD340,222 US$14,590 RMB$41,001	Indirect investment through WanHui (HK) (Note 4) Indirect investment though KoBrite Corp. Indirect investment	- 149,121 (US$4,974) 58,813	- - -	- - -	- 149,12 58,81 (HKD$15,28	(23,002) (3,032) 6,883	100% 93% 23%	(23,002) (2,809) 1,586	2,101,449 (148,016) 6,998

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

other steel products through WanHui (HKD$15,280) 0) (HKD$2,439)
(HK)
DongGuan LiSheng PCB processing HKD$10,000 Indirect 3,279 - - 3,27 23,943 60% 14,263 40,593 -
PCB investment
through LiSheng (HKD$852) (HKD$852)
Int’l (Note 4)
Henan Bright Production and sales of US$16,200 Indirect 403,981 - - 403,98 (12,995) 74% (9,622) 190,974 -
Crystal high-quality crystals investment
and LED lighting through Bright (US$13,475) (US$13,475)
products, as well as Crystal (HK)
import and export (Note 4)
business
2. Limits for reinvestment in China:
Cumulative investment Approved investment amount by According to the
amount remitted from the Overseas Chinese and Foreign regulations of the
Taiwan to China at the end of Investment Commission (Note 1) Overseas Chinese
the period and Foreign
Investment
Commission
Investment quota in
China
615,194 2,004,118 Note 2
(US18,449 及 HKD16,132) (US19,002 及 HKD398,296)
----- End of picture text -----

     - Note 1: It is converted into NTD at the end of the period using the USD exchange rate of 28.48, HKD exchange rate of 3.673 and RMB 4.377.

     - Note 2: The company has been approved by Bureau of Industry of the Ministry of Economic Affairs to comply with the operating headquarters certification letter, so there is no limit on the amount of investment in China.

     - Note 3: The investment gains and losses of the current period are calculated based on the financial statements of the investee company verified by accountants.

     - Note 4: Existing reinvestment companies in the third region use their own funds and machinery and equipment for investment.

  3. Major transactions:

For direct or indirect major transactions of the company’s investee companies in China in 2020, please refer to the description of "Information on Major Transactions"
(4) Information with regard to investment in China

Unit: shares

Shares Name of major shareholders	Number of shares held	Holding ratio
~~Yi-Ruan investment company~~	`31,859,212`	`17.53%`
~~WanHui investment company~~	`27,378,397`	`15.07%`
~~Tseng-Jen Liaw~~	`21,028,417`	`11.57%`

Note: (1) The information of major shareholders in this table is based on the last business day at the end of each quarter by the company. The total number of common shares and special shares, which sum up to 5% or more, of the company that have been delivered without physical registration (including treasury shares) is calculated by the company. As for the share capital recorded in the company's financial report and the company's actual number of shares delivered without physical registration, there may be differences due to different calculation bases.
(2) If above information belongs to the shareholder's delivery of shares to the trust, it is disclosed in individual accounts by the trustor who opened the trust account for the trustee. As for the shareholders’ declaration of insider’s shareholding in accordance with the Securities and Exchange Act, their shareholding includes their

own shareholding plus the shares delivered to the trust and the right to use the trust property. For information on insider’s shareholding declaration, please refer to Market observation post system.

(3) As of December 31, 2020, the company has bought back total of 10,000 thousands of treasury shares, which is approximately 5.50% of the company’s common stock for which the company has completed payment without physical registration. Detailed information please refer to 6(14).

14. Department information

Please refers to 2020 consolidated financial report.

6.5 The most recent consolidated financial statements including independent auditors’ report, a two-year comparative balance sheet and income statement, statement of changes in shareholders’ equity, cash flow statement, and any attached notes or appendices

Representation Letter

The entities that are required to be included in the combined financial statements of Bright LED Electronics Corp. as of and for the year ended December 31, 2020 (from January 1, 2020 to December 31, 2020), under the Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises are the same as those included in the consolidated financial statements prepared in conformity with the International Financial Reporting Standard 10, “Consolidated Financial Statements.”, which is recognized by Financial Supervisory Commission. In addition, the information required to be disclosed in the combined financial statements is included in the consolidated financial statements. Consequently, Bright LED Electronics Corp. and Subsidiaries do not prepare a separate set of combined financial statements.

Yours Sincerely,

Bright LED Electronics Corp.

Tsung-Jen Liaw Chairman

March 18, 2021

INDEPENDENT AUDITORS’ REPORT

(Consolidated Financial Statements)

The Board of Directors and Shareholders

Bright LED Electronics Corp.

Opinion

We have audited the accompanying consolidated financial statements of Bright LED Electronics Corp and subsidiaries. (the “BRTLED group”), which comprise the consolidated balance sheets as of December 31, 2020 and 2019, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2020 and 2019, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

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

Key Audit Matters

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

Inventory valuation

For details of accounting policies, accounting estimations and assumptions,

and related disclosures of inventory valuation, please refer to Notes 4 (8), 5 (2) and 6 (4) of the Company’s consolidated financial statements.

The description of key audit matter:

The BRTLED group’s amount of inventories is shown as the lower of cost and net realizable value. Because determining the slow moving inventory loss involves subjective judgment on individual assessment of each category of inventory and its idle days, inventory valuation is one of the key audit matters that we conducted.

Corresponding audit procedure included the following:

Obtained year-end inventory falling price losses and inventory aging report
Compared the difference between the actual selling prices and its book values
Evaluated managers’ judgment on allowance percentage of inventory aging report whether is reasonable or not, which included the following procedures as well:
Executed audit sampling procedure
Tested the accuracy of the inventory aging report
Compared the difference between last year’s allowance and actual write-off
Evaluated the appropriateness of the policy of allowance to reduce inventory and loss from idle inventories.

Revenue Recognition

For details of accounting policies and related disclosures of revenue recognition, please refer to Notes 4 (13) and 6 (18) of the Company’s consolidated financial statements.

The description of key audit matter:

The sources of the major operating revenue of the BRTLED group are research and development, productions, and sales of light-emitting diodes indicators and display…etc and contracts of LED display, LED lighting and related operating applications/systems’ constructions. Where the BRTLED group’s revenues generated from is the concerned factor for this report users or recipients. Hence, revenue recognition is considered as one of the key audit matters.

Corresponding audit procedure included the following:

Evaluated appropriateness of accounting policies according to the understanding of the BRTLED group’s operation and the characteristics of the industry both acquired by the new IFRS.
Tested the design of internal control system and effectiveness of execution.
Analyzed and evaluated if there is any major irregularity by inspecting revenues generated from main customers and new customers.
Evaluated accuracy during the period of revenue recognition by inspecting new major contract added in this period and tested sales samples in accordance with its contract terms during a period of time, which is before and after the year end.
Checked whether the proportion of project revenue recognized according to the degree of completion of contract obligations is reasonable or not.

Account Receivables Valuation

For details of accounting policies of account receivables valuation, please refer to Notes 4 (7) financial instruments of the BRTLED group’s consolidated financial statements; for details of accounting estimates and accounting assumption of uncertainty of account receivables valuation, please refer to Notes 5 (1) of the BRTLED group’s consolidated financial statements; for details of explanation on account receivables valuation, please refer to 6 (3) of the BRTLED group’s consolidated financial statements.

The description of key audit matter:

Account receivables of BRTLED group are distributed among customers. The account receivables valuation allowance is calculated according to the expected percentage of credit losses which takes each time interval of overdues of account receivables and adjustments on prospective factors into consideration when estimating expected credit losses of account receivables. The management will, according to the report date, re-update new expected losses within each time interval of overdues and perform individual assessments on major overdues and payment disputes; hence, it involves subjective judgment from the managers and it is considered as one of the key audit matters.

Corresponding audit procedure included the following:

Evaluated reasonableness of the percentage of expected credit losses
Determined whether there is a major irregularity by comparing the turnover rate and turnover days of accounts receivables with the company’s credit policy and other related information.
Obtained the aging schedule.
Verified total amount from the aging schedule with general ledger
Confirmed integrity and accuracy of the aging schedule.
Ascertained whether the bills and accounts receivables in dispute or involved in litigation have been properly handled.
Checked whether the customers’ receivables dues more than three months have been properly evaluated and check whether there is a risk of transferring other receivables.

Other Matter

We have also audited the parent company only financial statements of Bright LED Electronics Corp. as of and for the years ended December 31, 2020 and 2019 on which we have issued an unmodified opinion.

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

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRS, IAS, IFRIC, and SIC endorsed and issued into effect by the Financial Supervisory Commission of the republic of China, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those charged with governance (including the Supervisors) are responsible for overseeing the Company’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

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

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

procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements; if such disclosures are inadequate, we are responsible to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2019 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Ms. Hsin-I Kuo and Ms. Tzu-Hui Li.

KPMG TAIWAN Republic of China

March 18, 2021

Notice to Readers

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

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Bright LED Electronics Corp. and Subsidiaries Notes from consolidated financial statements

Year 2019 and 2020

(Unless otherwise specified, all amounts are in units of NT $thousand)

1. Company history

Bright LED Electronics Corp. (hereinafter referred to as the "Company") was established in June 1981. The company and its subsidiaries (hereinafter also referred to as "consolidated company") are principally engaged in the manufacturing and sales of light-emitting diode, indicator lights, displays and other extended products and undertaking engineering projects that provide indicator lights, displays and related supporting engineering projects.

2. The date and procedure for the approval of the financial statements

This consolidated financial statement was approved by the board of directors on March 18, 2021.

3. Application of newly issued and revised standards and explanations

(1) The impact of the newly issued and revised standards and interpretations approved by the Financial Regulatory Commission has been adopted
The company has applied the following newly revised International Financial Reporting Standards since January 1, 2020 and has no significant impact on parent company only financial report.
- Amendments to International Financial Reporting Standards (IFRS) No. 3 “Definition of Business”
- Amendments to International Financial Reporting Standards No. 9, International Accounting Standards No. 39 and International Financial Reporting Standards No. 7 "Changes in Interest Rate Indicators"
- Amendments to International Accounting Standard No. 1 and International Accounting Standard No. 8 "Definition of Materiality"
- Amendments to International Financial Reporting Standards No. 16 "New Coronavirus Pneumonia Related Rent Concessions"
(2) The impact of the International Financial Reporting Standards that have not adopted nor recognized by the Financial Supervisory Commission yet. The company assesses that the following newly revised international financial reporting standards that have been effective from January 1, 2021 will not have significant impacts on parent company only financial report.
Amendment to International Financial Reporting Standards (IFRS) No. 4 "Temporary
Exemption from Application of IFRS No. 9 Extension"
Amendments to International Financial Reporting Standards No. 9, International Accounting Standards No. 39, International Financial Reporting Standards No. 7, International Financial Reporting Standards No. 4, and International Financial Reporting Standards No. 16 "Changes in Interest Rate Indicators-Second stage".
(3) Newly issued or revised standards and interpretations not yet endorsed by Financial Supervisory Commission.
The standards and interpretations that have been newly issued or amended by the International Accounting Standards Board, but have not yet been approved by Financial Supervisory

Commission are as follows:

`Newly issued/` `revised standards` Amendment to International Accounting Standard No. 1 "Classification of Liabilities as Current or Non-current" Amendment to International Accounting Standard No. 16 "Real estate, plant and equipment price before reaching the intended state of use" Amendment to International Accounting Standard No. 1 "Disclosure of Accounting Policies" Amendment to International Accounting Standard No. 8 "Definition of Accounting Estimates"	`Main content` The amendments are intended to improve the consistency of the application of the standards to assist companies in determining whether debts or other liabilities that are uncertain on the settlement date should be classified as current (or may be due within one year) or non-current on the balance sheet. The revised provisions also clarify the classification requirements for debts that companies may convert into equity to pay off. The amendment prohibits the company from deducting the cost of real property, plant and equipment from the sales price of the project that makes the asset ready for use. Otherwise, the sales price and related costs should be recognized in profit and loss. The major amendments of International Accounting Standard No. 1 include: ‧Require companies to disclose their material accounting policies instead of their important accounting policies; ‧Clarified that accounting policy information related to non-significant transactions, other matters or circumstances is non-significant, and there is no need to disclose such information; and ‧Clarified that all accounting policy information that is not related to material transactions, other events or circumstances is material to the company's financial statements. The amendment introduces a new definition of accounting estimates, clarifying that accounting estimates are monetary amounts in financial statements that are affected by measurement uncertainty. The amendment also stipulates that the company must establish accounting estimates to achieve the purpose of its applicable accounting policies, thereby clarifying the relationship between accounting policies and accounting estimates.	`Effective date` 2023.1.1 2022.1.1 2023.1.1 2023.1.1

(4) The company expects that the following other newly issued or revised standards that have not yet been approved will not have a significant impact on parent company only financial reports
Amendments to International Financial Reporting Standards No. 10 and International Accounting Standards No. 28 "Sales or investment of assets between investors and their affiliates or joint ventures"
Amendments to International Financial Reporting Standards (IFRS) No. 17 "Insurance Contracts" and its revision.
Amendment to International Accounting Standard No. 37 "Supplementary Contracts-Cost of Consensus Contracts"
Annual improvement of International Financial Reporting Standards (IFRS) 2018 to 2020 cycle
Amendment to International Financial Reporting Standards(IFRS) No. 3 "Quotation of Conceptual Framework"

4. Summary of material accounting policies

(1) Compliance statement: This consolidated financial report is prepared in accordance with the "Regulations Governing the Preparation of Financial Reports by Securities Issuers" and the Financial Regulatory Commission approved and issued effective International Financial Reporting Standards, International Accounting Standards, Interpretations and Interpretation Notice (hereinafter referred to as "International Financial Reporting Standards Recognized by the Financial Regulatory Commission").
(2) Preparation basis:
Basis of measurement: Except for the following important items in the balance sheet, the rest items in parent company only financial report is prepared on the basis of historical cost:
Financial assets measured at fair value through profit and loss measured at fair value;
Financial assets at fair value measured by fair value through other comprehensive gains and losses
The net defined benefit liability is measured by subtracting the present value of
- defined benefit obligations from the fair value of pension plan assets.
Functional currency and presentation currency: Each entity of the consolidated company uses the currency of their main economic environment in which its operations are located as its functional currency. This consolidated financial report is expressed in the company’s functional currency, New Taiwan Dollar. All financial information expressed in New Taiwan Dollars is in thousands of New Taiwan Dollars.
(3) Consolidation basis:
Principles for preparing consolidated financial reports
The preparation of the consolidated financial report includes the company and entities controlled by the company (ie, subsidiaries).

Starting from the day when control of the subsidiary is obtained, its financial report shall be included in the consolidated financial report until the day when control is lost. The transactions, balances, and any unrealized gains and expenses between the merged companies have been completely eliminated when preparing the consolidated financial report. The total consolidated profit and loss of the subsidiary is attributable to the owners and non-controlling interests of the company, even if the non-controlling interests become the loss balance.

The financial report of the subsidiary company has been adjusted appropriately to make its accounting policy consistent with the accounting policy used by the consolidated company. Changes in the ownership and equity of the subsidiary by the consolidated company that did not result in the loss of control of the subsidiary are treated as an equity transaction with the owner. The difference between the adjustment amount of the non-controlling equity

and the fair value of the consideration paid or received is directly recognized in the equity and attributed to the owner of the company.

Subsidiaries included in consolidated financial statement

d attributed to the owner of the company. bsidiaries included in consolidated financial statement
Investment company name Subsidiaries’ company name Nature of businesses	% of equity held
	2020/12/31 2019/12/31
The company Wanhui Enterprise Co., Ltd. (HK) Investment holding and trading and selling of LED components, displays and electronic parts 100% 100% The company (note 1) Bright Wonder Electronics Corp. (Bright Wonder (Mauritius)) Investment holding - 100% The company KoBrite Corp. (KoBrite) Investment holding 93% 93% The company Lisheng International Industrial Co., Ltd. (Lisheng International) Investment holding 60% 60% Bright Wonder (Mauritius) (Note 1) Bright Wonder Electronics LTD. (HK) (Bright Wonder (H.K.)) Investment holding - 56% Wanhui Enterprise Co., Ltd. (HK) DongGuan Bright LED Electronics Manufacturing and assembling LED components and extended products 100% 100% KoBrite KoBrite DongGuan corporation (DongGuan) producing and processing LED die 100% 100% KoBrite KoBrite Taiwan corporation (Taiwan) producing and processing LED die 100% 100% KoBrite Bright Crystel Company Limited (HK) Investment holding 80% 80% HK Bright Crystal HeNan Bright Crystal Company (HeNan Bright Crystal) Production and sales of high-quality artificial crystals and finished LED lighting and import and export business 100% 100% Lisheng International DongGuan Bright Rise Circuit Board Corp. (DongGuan Bright Rise)(Note 2) PCB electroplating - 100% Lisheng International DongGuan Bright Rise Electronic Co. Ltd. (DongGuan Bright Rise Electronics)(Note 3) PCB processing 100% -

Note 1: The Company’s board of directors resolved on May 10, 2019 that both the sub-company Bright Wonder Electronics Corp. and its reinvestment company Bright Wonder Electronics LTD. (HK) have no operational purpose anymore, so liquidation and cancellation processes have completed on November 3, 2019.
Note 2: The Company board of directors revsolved on June 12, 2019 to dispose sub-company Dongguan Lisheng Circuit Board Co., Ltd. The transaction was completed at 4[th] quarter of 2019.
Note 3: The Company board of directors revsolved on June 12, 2019 to establish a subsidiary Dongguan Lisheng Electronic Technology Co., Ltd.
Subsidiaries not included in the consolidated financial statement: N/A

(4) Foreign currency

1. Foreign currency transaction

Foreign currency transactions are converted into functional currencies at the exchange rate on the transaction date. At the end of each subsequent reporting period (hereinafter referred to as the reporting day), foreign currency monetary items are converted into functional currencies at the exchange rate on that day. Foreign currency non-monetary items measured at fair value are converted to functional currency at the exchange rate on the day when the fair value is measured, and foreign currency non-monetary items measured at historical cost are converted at the exchange rate on the transaction date. Foreign currency exchange differences are usually recognized in income, but the following situations are recognized in other comprehensive gain and loss:

Designated as equity instruments measured at fair value through other comprehensive gains and losses;
Financial liabilities designated as net investment hedging by foreign operating institutions are within the effective scope of hedging; or
Qualified cash flow hedging is within the effective range of hedging.
Foreign operating institution
The assets and liabilities of foreign operating institutions, including the goodwill and fair value adjustments generated during the acquisition, are converted into New Taiwan dollars based on the exchange rate on the reporting date; income and expense items are converted into New Taiwan dollars based on the current average exchange rate. The resulting exchange differences are recognized as other comprehensive gains and losses.
When disposing a foreign operating institution which results in loss of control, joint control or significant influence, the accumulated exchange differences related to the foreign operating institution are fully reclassified as gains or loss. When partly disposing investments in affiliated companies or joint ventures involving foreign operating institution, the relevant accumulated exchange differences will be reclassified to other comprehensive gains and loss on a pro rata basis.

(5) Classification criteria for distinguishing between current and non-current assets and liabilities
Assets that meet one of the following conditions are classified as current assets, and all others are classified as non-current assets:
Expect to realize the asset in its normal business cycle, or intend to sell or consume;
Hold the asset primarily for trading purposes;
Expected to be realized within twelve months after the reporting period; or
Liabilities that do not have the right to unconditionally defer the settlement period to at least twelve months after the reporting period. The terms of the liability, which may be settled by the issuance of equity instruments based on the choice of the counterparty, does not affect its classification.
(6) Cash and cash equivalent
Cash includes cash on hand and demand deposits. Cash equivalent refers to a short-term and highly liquid investment that can be converted into fixed cash at any time with little risk of value changes. Term deposits that meet the aforementioned definition and whose holding purpose is to meet short-term cash commitments rather than investment or other purposes are

listed in cash equivalents.

(7) Financial instrument
Financial assets:

Financial assets measured at amortized cost

When financial assets meet the following conditions at the same time and are not designated to be measured at fair value through profit and loss, they are measured at amortized cost:

The financial asset is held under the business model for the purpose
of collecting contractual cash flow.
The contract terms of the financial asset generate cash flow on a specific date, which is entirely the interest on the payment of the principal and the amount of principal in circulation.

Financial assets measured at fair value through other comprehensive gains and losses

When debt instrument for investment meets the following conditions at the same time and is not designated as measured at fair value through income, it is measured at fair value through other comprehensive gains and losses:

The financial asset is held under the business model for the purpose
of collecting contractual cash flow and selling.
The contract terms of the financial asset generate cash flow on a specific date, which is entirely the interest on the payment of the principal and the amount of principal in circulation.

Financial assets measured at fair value through income.

fair value through other comprehensive gains and losses as at fair value through income. These assets are subsequently measured at fair value, and their net profit or loss (including any dividends and interest income) is recognized as profit or loss.

Impairment of financial assets

other comprehensive gains and losses, and expected credit losses of contract assets to recognize allowance losses.

The following financial assets are measured by the amount of expected credit losses for twelve months, and the rest are measured by the amount of expected credit losses during the duration:

•The credit risk of the judgment debt securities at the reporting date is low; and
•The credit risk of other debt securities and bank deposits (that is, the risk of default in the expected lifetime of financial instruments) has not increased significantly since initial recognition.

The allowance for losses on accounts receivable and contract assets is measured by the amount of expected credit losses during the duration.

If the contract payment is overdue, the company assumes that the credit risk of financial assets has increased significantly.

If the borrower is unlikely to perform its credit obligations and pay the full amount to the company, the company considers that the financial asset has breached the contract. Expected credit loss during the lifetime refers to the expected credit loss arising from all possible defaults during the expected lifetime of a financial instrument.

The company’s longest period for expected credit losses is the company’s longest contract period during which the company is exposed to credit risk.

•Major financial difficulties of the borrower or issuer

•Breach of contract, such as delay or overdue

•Due to economic or contractual reasons related to the borrower’s financial difficulties, the company gives the borrower a concession which the company woudn’t considered;

•The borrower is likely to file for bankruptcy or other financial reorganization; or

•Due to financial difficulties, the active market for this financial asset disappears. The allowance loss for financial assets measured at amortized cost is deducted from the asset’s book value. Through other comprehensive gains and losses, the fair value of the debt instrument for investment is measured by adjusting the income and recognized in other comprehensive gains and losses (without reducing the asset's book value).

Delisting of financial assets

Financial liabilities and equity instruments:
Classification of liabilities or equity

The debt and equity instruments issued by the company are classified as financial

liabilities or equity based on the substance of the contractual agreement and the definition of financial liabilities and equity instruments.

Equity transaction

Treasury stock

Financial liabilities

Other financial liabilities are subsequently measured at the cost after amortization using the effective interest method. Interest expenses and gains and losses from exchange are

recognized in income. Any profit or loss at the time of exclusion is also recognized in income.

Delisting of financial liabilities

Offset between financial assets and liabilities

(8) Inventory

Net realizable value refers to the estimated selling price under normal operations minuses the estimated costs required to complete the project and the estimated costs required to complete the sale.

(9) Investment-related enterprises

Affiliated companies are those companies that have significant influence over their financial and operating policies but are not controlled or jointly controlled.

The consolidated company shall adopt the equity method to deal with the equity of the related companies. Under the equity method, the original acquisition is recognized based on cost, and the investment cost includes the cost of the transaction. The carrying amount of an investment-related enterprise includes the goodwill identified at the time of the original investment, less any accumulated impairment losses.

The consolidated financial statement includes from the date of significant influence to the date of loss of significant influence. After adjustments to the consistency of

the consolidated company's accounting policies, the consolidated company recognizes the profit and loss of the investment-related enterprise and other amount of comprehensive profit and loss. When the related company's equity changes in non-profit and loss and other comprehensive profit and loss do not affect the shareholding ratio of the consolidated company, the consolidated company will be recognized as a capital reserve according to the shareholding ratio.

The unrealized benefits and losses arising from the exchange between the consolidated company and the affiliated company shall be recognized in the enterprise's financial statements only within the scope of the non-related investor's interest in the affiliated enterprise.

When the consolidated company should recognise the proportion of the affiliated company’s loss equal to or exceeds its equity in the affiliated company, it will stop recognizing its loss, but only when statutory obligations, deductions or payments have been made on behalf of the invested company within the scope, recognize additional losses and related liabilities. (10) Property, plant, and equipment

Recognition and measurement

Property, plant and equipment items are measured by cost (including capitalized borrowing costs) less accumulated depreciation and any accumulated impairment.

When the major components of property, plant and equipment have different durability, they are treated as separate items (main components) of property, plant and equipment.

The property, plant and equipment gains or loss by disposal is recognized in income.
1. Follow-up costs

Subsequent expenditures are only capitalized when their future economic benefits are likely to flow into the parent company.

3. Amortization

Depreciation is calculated based on the cost of assets minus the residual value, and the straight-line method is recognized in profit or loss within the estimated useful life of each component.

The land is not subject to depreciation.

The estimated service life of the current period and the comparative period is as follows:

(1) Housing and construction: 2 ~ 55 years
(2) Machine equipment: 2 ~ 8 years
(3) Others: Except that lease improvements are listed according to the lease term, the rest are 2 to 8 years.

The company reviews the depreciation method, durability, and residual value on each reporting day and makes appropriate adjustments when necessary.

(11) Lease
Lease judgment

(1) The contract involves the use of an identified asset. The identified asset is specified in the contract or implied by the time when it is available for use. Its entity can distinguish or represent substantially all of its production capacity. If the supplier has substantive rights to replace the asset, the asset is not an identified asset; and
(2) The customer has the right to obtain almost all economic benefits from the use of the identified assets throughout the period of use; and
(3) The client obtains the right to lead the use of identified assets when one of the following conditions is met:
‧ The customer has the right to lead the use and purpose of the identified assets throughout
the use period; or
‧ The relevant decisions about the use method and purpose of the asset are determined in
advance, and:
The customer has the right to operate the asset during the entire use period, and the
supplier does not have the right to change the operation instructions; or

– The way the customer designs the asset has pre-determined the way and purpose of use for the entire period of use.

Lessee

The company recognizes the right-of-use asset and lease liability on the lease start date. The right-of-use asset is originally measured at cost, which includes the original

measured amount of the lease liability, adjusts any lease payments paid on or before the lease start date, and adds the original direct cost incurred and the estimated cost of dismantling,

removing the underlying asset and restoring its location or underlying asset, and deducting any leasing incentives received.

The right-of-use asset is subsequently depreciated on a straight-line basis between the start of the lease and the end of the end-of-life of the right-of-use asset or the end of the lease period. In addition, the parent company periodically assesses whether the right-of-use asset is impaired and processes any impairment loss that has occurred, and cooperates to adjust the right-of-use asset when the lease liability is remeasured.

Lease payments included in the measurement of lease liabilities include:

(1) Fixed payment, including substantial fixed payment;
(2) The lease payment depends on the change of an index or fee rate, the original measurement is based on the index or rate of the lease start date;
(3) The guaranteed amount of residual value expected to be paid; and
(4) When reasonably determined that the purchase option or lease termination option will be exercised, the exercise price or the penalty payable.
The lease liability is subsequently accrued by the effective interest method, and its amount is measured when the following occurs:
(1) Changes in the index or rate used to determine lease payments result in changes in the future lease payments;
(2) The guaranteed amount of residual value expected to be paid has changed;
(3) The evaluation of the underlying asset purchase option has changed;
(4) The estimate of whether to exercise the extension or termination option has changed, and the assessment of the lease period has been changed;
(5) Modification of lease subject, scope or other terms.
- When the lease liability is remeasured due to changes in the aforementioned index or rate used to determine lease payments, changes in the residual value guarantee amount, and changes in the evaluation of purchase, extension or termination options, the book value of the right-of-use asset should be adjusted accordingly, and When the carrying amount of the right-of-use asset is reduced to zero, the remaining remeasured amount is recognized in profit or loss.

For lease modifications that reduce the scope of the lease, the carrying amount of the right-of-use asset is reduced to reflect the partial or full termination of the lease, and the difference between the lease and the remeasured amount of the lease liability is recognized in profit or loss.

The parent company expresses the right-of-use assets and lease liabilities that do not meet the definition of investment real estate as separate line items in the balance sheet.

Lessor

The transaction of the company as the lessor is to classify the lease contract according to whether it transfers almost all the risks and rewards attached to the ownership of the underlying asset on the date of the lease establishment. If it is classified as a financial lease, otherwise it is classified as an operating lease. At the time of evaluation, the parent company considers whether it covers the relevant specific indicators such as whether it covers the main part of the economic life of the underlying asset during the lease period.

If the agreement includes lease and non-lease components, the parent company uses IFRS 15 to distribute the consideration in the contract.

(12) Impairment of non-financial assets

The company assesses on each reporting day whether there is any indication that the carrying amount of non-financial assets (other than inventory, contract assets, deferred income tax assets) may be impaired. .

For the purpose of impairment testing, a group of assets whose cash inflows are largely independent of the cash inflows of other individual assets or asset groups is used as the smallest identifiable asset group.

or cash-generating unit is lower than the carrying amount, an impairment loss is recognized. Impairment losses are recognized immediately in the current profit and loss.

(13) Revenue recognition
Revenue from customer contracts

(1) Selling goods

The company recognizes the accounts receivable when delivering the goods, because the company has the right to receive the consideration unconditionally at that time. (2) Construction contract

If it is not possible to reasonably measure the degree of completion of the performance obligations of the engineering contract, contract revenue is recognized only within the

range of expected recoverable costs.

If the situation changes, the estimates of income, cost, and degree of completion will be revised, and during the period when the management is informed of the change in the situation, the resulting changes will be reflected in income.

The company provides standard warranty for public construction that conforms to the agreed specifications and has recognized warranty liability for this obligation. (3) Financial components

(14) Cost of customer contract
The incremental cost of obtaining a contract

The cost of fulfilling the contract

(15) Government subsidy

When the consolidated company can receive government subsidies related to salary expenditures, the unconditional subsidies are recognized as other income. For other asset-related subsidies, when the company can reasonably be sure that it will comply with the conditions attached to the government subsidy and will receive the subsidy, such subsidies will be recognized as deferred income at fair value and recognize the deferred income as other income on a systematic basis within the useful life of the asset. For compensating the consolidated company's expenses or losses, such subsidies are recognized in income on a systematic basis and its related expenses as well are recognized in income.

(16) Employee benefits
Determine the withdrawal plan

The obligation to determine the pension plan is recognized as an expense during the

service period of the employee.

2. Determine the welfare plan

The company's net obligation to determine the benefit plan is calculated for each benefit plan based on the present value of the employee's future benefits earned during the current or previous period of service, and the fair value of any plan assets is deducted.

3. Short-term employee benefits

(17) Share-based payment transaction

(18) Income tax

Current income tax includes the estimated income tax payable or tax receivable payable based on the taxable income (loss) of the current year and any adjustments to income tax

payable or tax receivable receivable in the previous year. The amount is based on the statutory tax rate on the reporting date or the tax rate of substantive legislation to measure the best estimate of the amount expected to be paid or received.

Deferred income tax measures and recognizes the temporary difference between the book value of assets and liabilities for financial statementing purposes and their tax base. Temporary differences arising from the following circumstances are not recognized as deferred income tax:

Assets or liabilities originally recognized in a transaction that is not a business consolidation and does not affect accounting profits and taxable income (loss) at the time of the transaction;
Due to temporary differences arising from investment in subsidiaries, affiliated companies and joint venture interests, the company can control the timing of the temporary difference reversal and is likely to not revert in the foreseeable future.

Deferred income tax is measured at the tax rate at which the temporary difference is

expected to reverse, and is based on the legal tax rate or substantive legislative tax rate on the reporting date.

The company will only offset the deferred income tax assets and deferred income tax liabilities when it meets the following conditions at the same time:

Have statutory enforcement power to offset current income tax assets and current income tax liabilities; and
Deferred income tax assets and deferred income tax liabilities are related to one of the following taxpayers subject to income tax levied by the same tax authority; 1. The same taxpayer; or
Different taxpayers, but each entity intends to pay off the current income tax liabilities and assets on a net basis for each future period in which significant amounts of deferred income tax assets are expected to be recovered and deferred income tax liabilities are expected to be settled, or at the same time Assets and liquidation of liabilities.

(19) Earnings per share

The consolidated company lists the basic and diluted earnings per share attributable to the holders of the company's common equity. The basic earnings per share of

the consolidated company is calculated by dividing the profit and loss attributable to the holders of the common stock equity of the company by the current weighted average number of common shares outstanding. Diluted earnings per share is calculated by adjusting the impact of all potential diluted common shares by dividing the profit and loss attributable to the common equity holders of the company and the weighted average number of common shares outstanding. The potential dilutive common stock of the consolidated company includes the employee's stock options and estimated employee compensation.

(20) Department Information

The operating department is an integral part of the consolidated company and is engaged in business activities that may earn income and incur expenses (including income and expenses related to transactions between other components in the consolidated company). The operating results of all operating departments are regularly reviewed by the chief operating decision maker of the conslidated company to make decisions on the allocation of resources to that department and evaluate its performance. Each operating department has separate financial information.

5. Major sources of uncertainty in significant accounting judgments, estimates and assumptions

When the management team prepares this consolidated financial statement in accordance with the International Financial statementing Standards recognized by the Financial Supervisory Commission, it must make judgments, estimates and assumptions that will affect the adoption of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from estimates.

Management team continues to review estimates and basic assumptions, and changes in accounting estimates are recognized during the period of change and future periods affected.

The accounting policy involves significant judgments and has no significant impact on the amount recognized in this consolidated financial statement.

Among uncertainties in assumptions and estimates, the existence of significant risks that will not cause major adjustments for the following year will be as follows:

(1) Allowance loss for accounts receivable

The allowance loss for the accounts receivable of the consolidated company is estimated based on the assumption of default risk and expected loss rate. The company considers historical experience, current market conditions and forward-looking estimates on each reporting day to determine the assumptions and input values that must be used when calculating impairments. Please refer to Note 6 (3) for detailed explanations of relevant assumptions and input values.

(2) Evaluation of inventory

Since inventory must be measured at the lower of cost and net realizable value,

the consolidated company assesses the amount of inventory due to normal wear and tear, obsolescence or no market sales value on the reporting date, and writes down the cost of inventory to net realizable value. This inventory evaluation is mainly based on the product demand in a specific period in the future as the basis for estimation, so it may cause significant changes due to rapid industrial changes. Please refer to Note 6 (4) for details of inventory evaluation and estimation.

6. Explanation of important accounting items

(1) Cash and Cash equivalent:

of important accounting items Cash equivalent:
Petty cash, cheques and demand deposits Certificate deposits	2020.12.31	2019.12.31
	$ 777,565 79,744 $ 857,309	603,208 179,880 783,088

Please refer to Note 6 (12) for the disclosure of interest rate risk and sensitivity analysis of the consolidated company's financial assets and liabilities.

The consolidated company’s certificate deposits for more than three months as of December 31, 2020 and 2019 were $0 thousand and $14,613 thousands repectively. Because they were not used as the consolidated company’s short-term assets, the accounts were recognized under other financial assets-current items. Please refer to note 6 (9) for details.

(2) Financial assets measured at fair value through other comprehensive gains and losse:

Equity instruments measured at fair value through other comprehensive gains and losses`：` Domestic listed (counter) company stocks-Powertip Domestic unlisted (counter) company stocks-WK 9 ASSOCIATES LTD	2020.12.31 $ 152,542 342,008	2019.12.31 148,548 308,526

Domestic unlisted (counter) company stocks`－`Other U.S. listed company stocks TOTAL	213,563 182,375 2,882 6,358 $ 710,995 645,807

Investment in equity instruments measured at fair value through other comprehensive gains and losses

Due to the above-mentioned designation as an equity instrument investment measured at fair value through other comprehensive gains and losses, the dividend income recognized in 2020 and 2019 was $3,691,000 and $19,592,000, respectively.

For credit risk and market risk information, please refer to Note 6 (12).
None of the consolidated company's financial assets measured at fair value through other comprehensive gains and losses have been provided as pledge and guarantees as of December 31, 2020 and 2019.
(3) Notes receivable, accounts receivable and collections

Notes receivable`－`Occurs due to business Accounts receivable`－`Measured by cost after amortization Accounts receivable`－` Related parties-measured at amortized cost Collection Deduct`：`Allowance for bad debts	2020.12.31		2019.12.31
	$ 69,695 480,657 40,071 311,540 (315,448) $ 586,515		31,380 384,388 50,071 543,935 (548,308) 461,466

The consolidated company adopts a simplified method to estimate expected credit losses for all notes receivable and accounts receivable, that is, using lifetime expected credit losses to measure. For the purpose of measurement, these notes and accounts receivable are based on the basis of representing customers’ common credit risk characteristics of the contractual terms and ability to pay all due amounts are grouped and forward-looking information has been incorporated, including general economic and related industry information. The expected credit loss of the consolidated company's notes and accounts receivable analysis is as follow:

	2020.12.31	Expected credit loss during the allowanceperiod (39) (788) (326) (314,295)
Accounts receivable Book value $ 572,447 14,797 424 314,295	Weighted avg.ex pected credit loss ratio
	0.01% 5.33% 76.89% 100% 2019.12.31
$ 901,963		(315,448)
		Expected credit loss during the allowanceperiod (41)
Accounts receivable Book value $ 451,565	Weighted avg.ex pected credit loss ratio
	0.01%

Less than 90 days overdue More than 366 days overdue	10,504 5.35% 547,705 100% $ 1,009,774	(562) (547,705)
		(548,308)

The consolidated company's notes receivables, accounts receivable and collections of the allowance loss’s statement of changes are as follows:

Beginning balance Recognized impairment loss Reversal of impairment loss Annual amount written off due to uncollectible Ending balance	2020

None of the consolidated company's notes and accounts receivable have been provided as pledge and guarantees as of December 31, 2020 and 2019.

(4) Inventory
The inventory details are as follows:

Raw materials and consumables WIP Semi-finished goods Finished goods	109.12.31	108.12.31 74,285 - 51,445 93,618 219,348
	$ 66,150 5 76,598 72,621 $ 215,374

The consolidated company recognizes the loss of inventory depreciation due to inventory write-down to the net realizable value, or the increase in the net realizable value due to the improvement of economic conditions and the reduction of the recognized cost of goods sold are as follows:

e as follows:
Loss for market price decline and obsolescence. (Gain from recovery)	2020	2019 12,970
	$ 6,813

None of the consolidated company's inventories have been provided as pledge and guarantees as of December 31, 2020 and 2019.
(5) Investment using the equity method
- The consolidated company’s investments using the equity method on the reporting date are listed below:

below:
Associated companies	2020.12.31	2019.12.31 114,728
	$ 119,988

The associated companies of the company that adopt the equity method are individually insignificant, and their summary financial information is as follows. Such financial information is the amount included in the company's individual financial report:

2020.12.31

2019.12.31

	2020.12.31	2019.12.31
Period-end summary of the equity of individual insignificant associated companies Book value Share attributable to the company`：` Continuing business unit's current net profit Other comprehensive gain and loss Total comprehensive gain and loss	$ 629,229 2020	507,109 2019
		9,120 (7,625)
	$ 23,560	1,495

2. Guarantee

None of the consolidated company's investment using the equity method have been provided as pledge and guarantees as of December 31, 2020 and 2019

(6) Loss control of subsidiaries

The consolidated company passed the resolution of the board of directors on June 12, 2019 to dispose 100% of Dongguan Lisheng Circuit Board Co., Ltd. and lose control of it. The transaction was completed on October 30, 2019 and the disposal price was NT$29,122,000. The disposition benefit was NT$7,621,000. The amount of NT$22,062,000 has been recovered whereas NT$7,060,000 has not yet been recovered, which is accounted for under other receivables in other current financial asset, please refer to Note 6(9) for details.

The details of the book value of assets and liabilities of Dongguan Lisheng Circuit Board Co., Ltd. as of September 30, 2019 are as follows:

of September 30, 2019 are as follows:
Prepayment Other receivables Property, plant and equipment Refundable deposits Book value of previous subsidiary's net assets	$ 1,808 3,279 15,122 1,292
	$ 21,501

(6) Property, plant and equipment

The cost and depreciation changes of the consolidated company's property, plant and equipment are as follows:

Cost`：` Balance as of January 1, 2020 Add Dispose Reclassify Impact of exchange rate Balance as of December 31, 2020 Balance as of January 1, 2019	Property $ 41,360 - - - -	Plant 591,929 1,987 - - 6,946	Equipment 2,861,380 3,539 (90,088) 9,542 43,777	Other 336,066 2,962 (10,150) - 4,795	Total 3,830,735 8,488 (100,238) 9,542 55,518
	$ 41,360	600,862	2,828,150	333,673	3,804,045
	$ 41,360	669,429	3,028,676	355,073	4,094,538

Add Depose Delist Impact of exchange rate Balance as of December 31, 2019 Amortization`：` Balance as of January 1, 2020 Amortize Dispose Impact of exchange rate Balance as of December 31, 2020 Balance as of January 1, 2019 Amortize Delist Impact of exchange rate Balance as of December 31, 2019 Book value`：` Balance as of December 31, 2020 Balance as of December 31, 2019	- 2,211 3,844 5,769 11,824 - (23) (22,132) (3,835) (25,990) - (63,574) (49,722) (9,757) (123,053) - (16,114) (99,286) (11,184) (126,584)
	$ 41,360 591,929 2,861,380 336,066 3,830,735
	$ - 335,574 2,666,557 290,667 3,292,798 - 15,927 31,087 25,206 72,220 - - (90,088) (10,150) (100,238) - 4,413 41,109 5,046 50,568
	$ - 355,914 2,648,665 310,769 3,315,348
	$ - 373,043 2,788,912 297,634 3,459,589 - 21,424 40,997 16,280 78,701 - (23) (22,130) (3,835) (25,988) - (49,318) (49,309) (9,304) (107,931) - (9,552) (91,913) (10,108) (111,573)
	$ 41,360 244,948 179,485 22,904 488,697
	$ 41,360 256,355 194,823 45,399 537,937

(8) Right-of-use asset

The cost and depreciation of the consolidated company's leased land, houses and buildings, etc., are detailed as follows:

`Property` $ 56,755 111 - 841	`Plant` 156,566 63,109 (83,191) (1,175)	`Total` 213,321 63,220 (83,191) (334)
$ 57,707	135,309	193,016
$ - 54,760 3,946 - (1,951)	- 94,294 85,062 (20,744) (2,046)	- 149,054 89,008 (20,744) (3,997)
$ 56,755	156,566	213,321

Balance as of January 1, 2020 Current amortization Decrease Impact of exchange rate Balance as of December 31, 2020 Balance as of January 1, 2019 Current amortization Decrease Impact of exchange rate Balance as of December 31, 2019 Book value`：` Balance as of December 31, 2020 Balance as of December 31, 2019	$ 2,391 34,313 36,704 2,378 33,894 36,272 - (1,490) (1,490) 41 1,212 1,253
	$ 4,810 67,929 72,739
	$ - - - 2,433 38,482 40,915 - (2,999) (2,999) (42) (1,170) (1,212)
	$ 2,391 34,313 36,704
	$ 52,897 67,380 120,277
	$ 54,364 122,253 176,617

The increase in right-of-use assets in 2020 and 2019 is due to the change in the lease period of the consolidated company's retail store and the extension of the lease period of land and plant. Please refer to Note 6 (13) for details on the related changes in lease liabilities.
The decrease of right-of-use assets in 2020 and 2019 is due to the expiry of the lease agreement for part of the leased plant of the consolidated company. The result of the rent negotiation is not as expected and it is not planned to renew the lease according to the original plan. For detailed explanations about the changes in the lease liability, please refer to Note 6 (13).

(9) Other financial assets-current

Other receivables Restricted assets-certificate deposits Other	2020.12.31		2019.12.31 109,268 62,013 14,613 185,894
	$ 87,663 63,493 - $ 151,156

None of the consolidated company's other receivable have been impaired as of December 31, 2020 and 2019.

(10) Short-term loans

Bank Guaranteed Loan Unused quota Interest rate range	2020.12.31 $ 60,000	2020.12.31 $ 60,000	2019.12.31 50,000
	$ -		-
		1.43%	1.99%

For the risk information of the interest rate and liquidity risk of the consolidated company, please refer to Note 6 (22).
Please refer to note 8 for details of the circumstances in which

the consolidated company uses assets to set mortgages for short-term borrowings.

(11) Long-term loans

The details of the company's long-term loans are as follows:

Maturity	2020.12.31 $ - - -	2019.12.31 1,608 8,176 (9,784)
2020
	$ -	-
	$ -	1.62%~1.99%

The consolidated company's long-term loans have no major issuance or repurchase between 2020 and 2019, and the repayment amount is NT$ 9,784,000 and NT$ 18,815,000 respectively.
The guarantee situation of the consolidated company using assets to set up mortgage for long-term loans, please refer to Note 8.
(12) Other payables and other current liabilities

Payable expenses Salaries and bonuses payable Payable employee dividends and remuneration to directors and supervisors Pension payable Other	2020.12.31	2019.12.31 85,863 42,612 27,968 10,810 18 167,271
	$ 32,670 40,718 26,864 11,011 10,453 $ 121,716

(13) Lease liability

The book values of the consolidated company's lease liabilities are as follows:

Current Non-current	2020.12.31	2019.12.31 39,462 90,822
	$ 14,432 $ 57,128

For maturity analysis, please refer to Note 6 (22) Financial Instruments. The consolidated company’s lease liabilities decreased by NT$79,012,000 in 2020 due to the change in the lease term of the consolidated company and the expiration of part of the plant leases. The result of the rent negotiation was not as expected and so the lease was not renewed as planned; The increase in liabilities was NT$63,220,000, which was due to the extension of the lease period of the land and plant of the consolidated company. Lease liabilities increased by NT$89,008,000 in 2019 due to the change in the lease period of the consolidated company’s retail store and the extension of the lease period of land and plant; the lease of the plant for Dongguan Lisheng Circuit Board Co., Ltd., a subsidiary of the consolidated company, expired and the rent negotiation failed. Thus, looking for other factories which results in a decrease of NT$20,008,000 in lease liabilities. Please refer to Note 6 (8) for the description of the related changes in the right-of-use assets.

The amounts recognized in income are as follows:

2020 $ 1,004	2020 $ 1,004	2019 2,996
$ 13		-
llows: 2020		2019 45,662
$ 38,673

Interest expense on lease liability Changes in lease payments that are not included in the measurement of lease liabilities and Costs for short-term leases and low-value leased assets

The amounts recognized in the cash flow statement are as follows:

Total cash outflow from lease

The consolidated company’s renews period for the lease term of land, houses

and buildings as office premises and factory plants is usually three to five years. In addition, the land’s right-of-use in China usually lasts for 50 years. Part of the lease includes the option to extend the same period as the original contract when the lease term expires. The lease payments of some contracts depend on changes in the local price index.

Part of the contract also stipulates that the consolidated company advance the tax and insurance expenses related to the real estate to the lessor. Such expenses are usually incurred once a year.

(14) Employee benefits
Determine the benefit plan

The consolidated company determines the adjustment between the present value of welfare obligations and the fair value of project assets as follows

Determine the present value of welfare obligations Fair value of project assets Net Definite Benefits Net Liabilities	2020.12.31	2019.12.31 (39,132) 15,007 (24,125)
	$ (41,072) 15,717 $ (25,355)

The consolidated company’s definite benefit plan is transferred to the special labor retirement reserve account of the Bank of Taiwan. The retirement payment of each employee which is subject to the Labor Standards Act is calculated based on the base number of years of service and the average salary of the six months before retirement.

(1) Project asset composition

The retirement fund allocated by the consolidated company in accordance with the Labor Standards Act is coordinated and managed by Bureau of labor funds under Ministry of Labor (hereinafter referred to as the Labor Fund Bureau). The minimum income

allocated shall not be lower than the income calculated based on the two-year fixed deposit interest rate of the local bank.

As of the end of the reporting period, the balance of the consolidated company's Labor Retirement Reserve Special Account in Bank of Taiwan was NT$15,717,000. The information on the use of labor pension funds includes fund return rate and fund asset allocation. Please refer to the information published on the website of Burear of labor funds under Ministry of Labor.

(2) Determination of changes in the present value of welfare obligations

The consolidated company’s determination of the changes of the present value of welfare obligations in 2020 and 2019 are as follows:

Confirmation of welfare obligations on January 1 Current service cost and interest Remeasurement of net defined benefit liabilities	2020	2019 (39,521) (411)
	$ (39,132) (420)

`－`Profit (loss) of project asset return		(1,747)			317
`－`Actuarial losses due to changes in financial		(1,573)		(196)
assumptions
Project Benefits paid		1,800			679
Confirmation of welfare obligations on December	$	(41,072)	(39,132)
31
(3) Changes in the fair value of project assets
The consolidated company’s changes in the fair value of the assets of the
determined benefit plan in 2020 and 2019 are as follows:
		2020	2019
Fair value of project assets on January 1	$	15,007	14,925
Interest income		96			72
Remeasurement of net defined benefit liabilities
`－`Benefits of project asset remuneration		515			589
(excluding current interest)
Amount allocated to the project		99			100
Project Benefits paid		-		(679)
Fair value of project assets on December 31	$	15,717	15,007
(4) Expenses recognized as profit and loss
List of recognized expenses in 2020 and 2019 is as follow:
		2020	2019
Current service cost	$	157			155
Net interest on net confirmed benefit liabilities		167			183
	$	324			338
		2020	2019
Management fees	$	324			338
(5) Re-measured amount of net confirmed benefit liabilities recognized as
other comprehensive gains and losses
The consolidated company's accumulated remeasured amount of net defined benefit
liabilities recognized in other comprehensive income is as follows:
		2020	2019
Accumulated balance on January 1	$	(9,518)	(8,808)
Recognized loss (profit) in the current period		2,805		(710)
Accumulated balance on December 31	$	(6,713)	(9,518)
(6) Actuarial assumption
The major actuarial assumptions used by the consolidated company to determine the
present value of welfare obligations at the end of the financial report are as			follows:
		2020.12.31	2019.12.31
Discount rate		0.30%	0.70%
Future salary increase		2.00%	2.00%

The consolidated company expects to pay NT$454,000 to the definite benefit plan

within one year after the reporting date in 2020.

The weighted average duration of the defined benefit plan is 9 years.

(7) Sensitivity analysis

When calculating and determining the present value of welfare obligations, the consolidated company must use judgments and estimates to determine relevant actuarial assumptions on the balance sheet, including discount rates, employee turnover rates, and future salary changes, etc. Any change in actuarial assumptions may materially affect the amount of the company's determined welfare obligations.

When adopting the main actuarial assumptions, the impact of changes in determining the present value of welfare obligations in 2020 and as of December 31, 2019 is as follows:

		Impact on determined	welfare obligations
		Increase 0.25`％`	Decrease0.25`％`
December 31, 2020
Discount rate	$	(994)	1,034
Future salary increase		1,014	(980)
December 31, 2019
Discount rate		(964)	1,005
Future salary increase		989	(954)

The sensitivity analysis above is based on the analysis of the impact of a single assumption change while other assumptions remain unchanged. In practice, many changes in assumptions may be linked. The sensitivity analysis is consistent with the method used to calculate the net pension liabilities in the balance sheet.

The methods and assumptions used in preparing the sensitivity analysis in this period are the same as those in the previous period.

2. Determine the allocation plan

The consolidated company's defined allocation plan is based on the labor pension regulations and is allocated to Bureau of labor insurance’s labor pension individual account at a rate of 6% of the labor's monthly salary. Under this plan, after the consolidated company allocates a fixed amount to Bureau of labor insurance, there is no statutory or constructive obligation to pay additional amounts. The pension expenses under the method for determining the appropriation of pensions in 2020 and 2019 are NT$2,556,000 and NT$2,541,000 respectively, which have been allocated to Bureau of labor insurance.

In 2020 and 2019, the overseas subsidiaries of the consolidated company will recognize retirement pension expenses of NT$4,525,000 and NT$19,446,000 respectively in accordance with local government regulations.

(15) Income tax
Income tax expense
(1) The consolidated company's income tax expenses are as follows:

Current income tax expense Occurred in the current period Finance and tax difference Income tax assessment difference Deferred income tax expense The occurrence and reversal of temporary	2020		2019 17,220 (91) 2,899 20,028 5,640

differences Income tax expense	$ 48,974	25,668

(2) The details of income tax (benefits) expenses recognized by the consolidated company under other comprehensive gains and losses are as follows:
The consolidated company’s details of income tax (benefits) expenses recognized under other comprehensive gains and losses in 2020 and 2019 are as follows:

Items not reclassified to profit or loss`：` The actuarial profit (loss) of the defined benefit welfare plan	2020 $ (561)	2019
		142

(3) The reconciliation between the consolidated company's income tax expenses and pre-tax net profit is adjusted as follows:

Net profit before tax Income tax calculated based on the domestic tax rate of the consolidated company's location Impact of tax rate differences in foreign jurisdictions Recognize the net investment interest using the equity method Tax adjustment Undistributed surplus levied 5% Differences between income tax assessment estimation	2020		2019 259,547 51,909 6,875 (32,951) (2,973) - 2,808 25,668
	$ 182,089 36,418 357 4,783 (773) 5,539 2,650 $ 48,974

Deferred income tax assets and liabilities
(1) Unrecognized deferred income tax liabilities

The items that the consolidated company's overseas investee companies have not recognized as deferred income tax liabilities are as follows:

109.12.31 108.12.31 Accumulated unrealized profit share with overseas investee companies $ 328,937 339,571 recognized deferred income tax assets e items that the consolidated company's overseas investee companies have not cognized as deferred income tax assets are as follows: 109.12.31 108.12.31 Accumulated unrealized loss share with overseas investee companies $ 186,948 182,177	109.12.31 $ 328,937	108.12.31 339,571

(2) Unrecognized deferred income tax assets

The items that the consolidated company's overseas investee companies have not recognized as deferred income tax assets are as follows:

The temporary differences related to overseas investee companies are not recognized as deferred income tax assets and liabilities because

the consolidated company can control the timing of the reversal of the temporary differences, and it is likely that they will not revert in the foreseeable future in 2020 and as of December 31, 2019.

Other items not recognized as deferred income tax assets of KoBrite Taiwani, a subsidiary of the consolidated company, are as follows:

Temporary differences can be reduced Taxable loss	2020.12.31 $ 70 79,514	2019.12.31 264 78,934
	$ 79,584	79,198

Taxable losses are in accordance with the Income Tax Act. The losses in the previous ten years are deducted from the net profit of the current year as approved by Revenue Service Office, and then the income tax is re-assessed. Such item was not

recognized as deferred income tax assets because it is unlikely that KoBrite Taiwan, a subsidiary of the company, will have sufficient taxable income for the temporary difference in the future.

As of December 31, 2020, the company's subsidiary KoBrite Taiwan’s undeducted losses and deduction periods are as follows:

Year of deficit	Undeducted loss $ 87,980 62,757 54,151 58,855 48,221 22,832 15,574 26,451 20,747	The last year for deduction
2011 (Approved number) 2012 (Approved number) 2013 (Approved number) 2014 (Approved number) 2015 (Approved number) 2016 (Approved number) 2017 (Approved number) 2018 (Approved number) 2019 (Approved number)		2021 2022 2023 2024 2025 2026 2027 2028 2029
	$ 397,568

(3) Recognized deferred tax assets and liabilities

The changes in the consolidated company's deferred income tax assets and liabilities are as follows:

Defined benefit plan $ 7,770 (315)	Other 9,168 4,346	Total 16,938 4,031
$ 7,455	13,514	20,969
$ 7,722 48	14,906 (5,738)	22,628 (5,690)
$ 7,770	9,168	16,938
Defined	Other	Total
benefit plan

Deferred income tax liability ：

Balance as of January 1, 2020 (Debit)/Credit Income Statemen (Debit)/Credit other comprehensive gain/loss Balance as of December 31, 2020 Balance as of January 1, 2019 (Debit)/Credit Income Statemen (Debit)/Credit other comprehensive gain/loss Balance as of December 31, 2019	$ 1,902 1 1,903 - 20,216 20,216 (561) - (561)
	$ 1,341 20,217 21,558
	$ 1,760 51 1,811 - (50) (50) 142 - 142
	$ 1,902 1 1,903

In accordance with the laws of each country of incorporation, the income tax of profitable businesses of the consolidated company shall be declared separately by each individual company and shall not be declared in a consolidated manner.
The income tax settlement declarations of the company and its subsidiary KoBrite

Taiwan's profitable business have been approved by the auditing agency till year of 2018.

(16) Capital and other equity
Equity

The company’s authorized total capital stock is $3,500,000 thousands. A par value of $10 per share with total of 350,000 thousand shares. The aforesaid total

authorized share capital is all common stock. The issued shares are 181,674 thousand shares and 186,674 thousand shares respectively and the payment for all issued shares has been received.

Capital reserve

The content of the company's capital reserve balance is as follows:

Premium of issued sotck Convertible corporate bonds during the redemption period are classified as other items in capital reserve Capital reserve arising from share-based payment transactions Adopting the equity method to recognize the changes in the net value of the equity of affiliated companies and joint venture Changes in affiliated companies recognized using the equity method Other	2020.12.31 $ 308,780 88,350 23,100 343 836 550	2019.12.31 329,683 88,350 23,100 - - 550
	$ 421,959	441,683

3. Retained earning

Shareholder dividends and employee dividends are issued in two types: stock dividends and cash dividends, of which the ratio of cash dividends shall not be less than 10%.

2019 Dividend rate Amount Dividends distributed to owners of common stock`：` Cash $ 0.82 141,340	2018 Dividend rate Amount 0.52 97,071

On March 18, 2021, the board of directors proposed a profit distribution proposal for 2020. The amount of dividends distributed to owners is as follows:

Dividends distributed to owners of common stock`：` Cash	2020	2020
	Dividend rate	Amount
	$ 0.80	137,339

Treasury stock

The company passed a resolution of the board of directors on March 20, 2020 to buy back 5,000 thousand common stock as necessary to maintain the company's credit and shareholders' equity. Since the company's original issued common stock were 186,674 thousand shares, the proposed purchase of shares this time are accounted for 2.68% of the issued common stock, which did not have a significant impact on the company's financial status.

The treasury stock’s buyback plan was completed on May 22, 2020. A total of 5,000 thousand shares were bought back with total amount of $70,903 thousands. The company's board of directors resolved on August 7, 2020 to cancel the 5,000 thousand treasury shares bought back for the purpose of maintaining the company's credit and shareholders' equity. The base date for capital reduction is August 10, 2020, and the change registration has been completed.

with total amount of $149,507 thousands.

As of December 31, 2019 and 2020, the number of shares repurchased as treasury stock was 10,000 thousand shares.

5. Other equity (net after tax)

Balance as of January 1, 2020 difference arising from the exchange of net assets of foreign operating institutions Unrealized gains and losses of financial assets measured at fair value through other comprehensive gains and losses Dispose of equity instruments measured at fair value through other comprehensive gains and losses Balance as of December 31, 2020 Balance as of January 1, 2019 difference arising from the exchange of net assets of foreign operating institutions Unrealized gains and losses of financial assets measured at fair value through other comprehensive gains and losses Dispose of equity instruments measured at fair value through other comprehensive gains and losses Balance as of December 31, 2019	Difference arising from the exchange of net assets of foreign operating institutions	Unrealized gains and losses of financial assets measured at fair value through other comprehensive gains and losses	Unrealized gains and losses of financial assets measured at fair value through other comprehensive gains and losses
	$ (178,989) (15,813) - - $ (194,802) $ (89,632) (89,357) - - $ (178,989)		-

(17) Earnings per share

1. Basic earnings per share

The basic earnings per share of the consolidated company for 2020 and 2019 are calculated on the basis of the net profit attributable to common equity holders of the company and the weighted average number of outstanding shares of common stocks. The relevant calculations are as follows:

(1) Net profit attributable to holders of the company's common stocks

Net profit attributable to holders of the company's common stock	2020

(2) The weighted average number of common shares outstanding

Common shares outstanding on January 1 Impact of treasury stocks The weighted average number of common shares outstanding on December 31 (3) Basic earnings per share (NT $)		2020
		173,237 183,747
		2020

2. Diluted earnings per share

The diluted earnings per share for 2020 and 2019 are calculated on the basis of the net profit attributable to common equity holders of the company and the weighted average number of common stocks outstanding after adjusting the dilution effect of all potential common stocks. The relevant calculations are as follows :
(1) Net profit attributable to the company's common stock holders (diluted)

Net profit attributable to holders of the company’s common stocks (Basically diluted)	2020	2019
	$ 128,125	234,486

(2) Weighted average number of shares outstanding (diluted) of common stocks (thousand shares)

(thousand shares)
Weighted average number of shares outstanding (basic) The impact of employee stock dividends The weighted average number of common stocks outstanding on December 31 (diluted)	2020 173,237 2	2019 183,747 2
	173,239	183,749

(3) Diluted earnings per share (NT$)

Diluted earnings per share

2020	2019 1.27
$ 0.74

(18) Revenue from customer contracts
Revenue breakdown

		2020		`Total` 658,050 270,465 120,875 207,763 118,534
`Dept.A` $ 242,426 195,530 120,875 207,763 118,534	`Dept.B` 387,122 - - - -	`Dept.C` 27,156 74,935 - - -	`Other` 1,346 - - - -
$ 885,128	387,122	102,091	1,346	1,375,687
$ 838,674 7,900 38,554	360,754 - 26,368	- 74,935 27,156	- - 1,346	1,199,428 82,835 93,424
$ 885,128	387,122	102,091	1,346	1,375,687

			2019			`Total` 865,716 414,837 179,539 209,877 93,690
`Dept.A` $ 463,853 179,948 179,539 209,877 93,690		`Dept.B` 346,139 5,482 - - -	`Dept.C` 31,917 229,407 - - -	`Other` 23,807 - - - -

$ 1,126,907		351,621	261,324	23,807		1,763,659
$ 1,108,132 13,405 5,370		328,931 - 17,130	5,560 234,889 26,435	- - 23,807		1,442,623 248,294 72,742
$ 1,126,907		346,061	266,884	23,807		1,763,659
	2020.12.31		2019.12.31		2019.1.1 170,034
	$ 107,420		271,917

(19) Construction contracts

The details of the contract revenue of the merged company's recognition

of construction contracts in 2020 and 2019 based on the percentage of completion method are as follows:

The amount of contract revenue recognized as revenue in the current period Cumulative costs incurred (including contract costs related to future activities) Add: accumulative total recognized project benefits Cumulative incurred costs and recognized profits Less: accumulative project progress request amount Net Contractual job reported as the total amount of customer accounts receivable for assets Contractual job reported as the total amount of accounts payable to customers for liabilities	2020.12.31
	$ 363,502 488,031 44,841 98,067
	408,343 586,098 300,923 314,181
	$ 107,420 271,917
	$ 408,343 586,098
	$ 300,923 314,181

34,347

46,177

Retained amount of construction contract

Please refer to Note 6 (18) for the disclosure of the contract balance and the amount of income.

(20) Remuneration of employees, directors and supervisors

The company’s remuneration for employees in 2020 and 2019 is NT$15,592,000 and NT$22,374,000 respectively and the remuneration for directors and supervisors is NT$3,898,000 and NT$5,594,000, which are based on the company’s pre-tax net profit for each period. The amount before deduction of employees, directors and supervisors’ remuneration multiplied by the number of employees’ remuneration and directors’ and supervisors’ remuneration as stipulated in the company’s articles of association is the basis for estimation, and is reported as operating costs or operating expenses for 2020 and 2019. If difference between the actual distribution amount in the next year and the estimated amount occurs, such occurrence will be dealt with accordance to the change in accounting estimates and the difference will be recognized as the profit and loss of the next year.

(21) Non-operating income and expenses
Interest income

The detail of the consolidated company's interest income are as follows:

erating income and expenses est income ail of the consolidated company's interest income are as follows:	as follows:
2020 2019 Interest from bank deposits $ 11,918 6,696 r income ail of the consolidated company’s other income for 2020 and 2019 are as follows: 2020 2019 Rental income $ 22,337 22,054 Dividend income 3,691 19,592 Government subsidy income 4,693 - Other 22,098 19,774 $ 52,819 61,420	2020 $ 11,918	2019 6,696
	$ 22,337 3,691 4,693 22,098
	$ 52,819	61,420

2. Other income

The detail of the consolidated company’s other income for 2020 and 2019 are as follows:

3. Other gains and losses

The detail of the consolidated company’s other gains and losses for 2020 and 2019 are as follows:

Net foreign currency exchange gains Gains from disposal of fixed assets Dispose of financial asset benefits measured at fair value through other comprehensive gains and losses Gains from disposal of investment	2020	2019
	$ (7,868) 1,385 - -	42,784 722 388 7,621

(2,530) (3,843) $ (9,013) 47,672

Other

(22) Financial instruments

Credit risk
(1) Exposure of credit risk

The book value of financial assets and contract assets represents the maximum amount of credit risk.

(2) Concentration of credit risk

(3) Credit risk of accounts receivable

Please refer to Note 6 (3) for the credit risk exposure information of notes and accounts receivable.

Other financial assets measured at amortized cost include other receivables

and certificates of deposit, etc. Please refer to Note 6 (9) for details of the impairment provision status on December 31, 2019 and 2020.

Liquidity risk

The following table shows the contractual maturity dates of financial liabilities, excluding the effect of estimated interest.

December 31,2020 Non-derivative financial liabilities Bank loan Notes and Accounts Payable(Including related parties) Lease liabilities (including non-current) Other payables December 31,2019 Non-derivative financial liabilities Bank loans Notes and Accounts Payable(Including related parties) Other payable Lease liabilities (including non-current)	Book value	Contractual cash flow (60,858) (315,325) (111,263) (77,770) (565,216) (60,943) (286,593) (167,253) (137,302)	within 1yr (60,858) (315,325) (111,263) (16,494) (503,940) (60,943) (286,593) (167,253) (40,468)	1-2yr - - - (31,618) (31,618) - - - (36,425)	above 2yrs - - - (29,658) (29,658) - - - (60,409)
	$ 60,000 315,325 111,263 71,560 $ 558,148 $ 59,784 286,593 167,253 130,284

$ 643,914 (652,091) (555,257) (36,425) (60,409)

The consolidated company does not expect the cash flow analysis on the due date to occur significantly earlier, or the actual amount will be significantly different.

Exchange rate risk
(1) Exposure to exchange rate risk

The company's financial assets and liabilities exposed to significant foreign currency exchange rate risks are as follows:

Financial assets Monetary item RMB USD HKD Financial liabilities		2020.12.31		2019.12.31
	Foreign	Exange rate		Exchange rate
	currency		NTD
	$ 242 13,403 49,037 181 208 24,740	4.377 28.480 3.673 4.377 28.480 3.673	1,059 381,707 180,113 792 5,924 90,870	4.305 29.980 3.849 4.305 29.980 3.849
Monetary item RMB USD HKD

(2) Sensitivity analysis

The consolidated company’s exchange rate risk mainly comes from cash denominated in foreign currencies, cash equivalents and accounts receivable, etc., resulting in foreign currency exchange gains and losses during conversion. In 2020 and 2019, when the NTD depreciates 5% against the USD, RMB and HKD, under all other factors remain unchanged, the net profit before tax for 2020 and 2019 decreased by NT$23,265,000 and NT$37,358,000 respectively.

(3) Exchange gains and losses of monetary items

Due to the wide variety of functional currencies that the consolidated company uses, the exchange gain and loss information of monetary items is disclosed in summary. The foreign currency exchange gains (including realized and unrealized) for 2020 and 2019 are NT$7,868 thousands and NT$42,784 thousands respectively.

Interest rate analysis

The details of the consolidated company's financial assets and financial liabilities interest rate risk exposure are as follows:

Fixed interest rate instruments`：` Financial assets Variable interest rate instruments`：` Financial assets Financial liabilities	Book	value	value
	2020.12.31		2019.12.31
	$ 75,206 $ 854,650 (60,000) $ 794,650		256,507 600,399 (59,784) 540,615

The consolidated company's financial assets and financial liabilities interest rate risk exposure are described in the liquidity risk management of this note.

If the interest rate increases or decreases by 1% and all other variables remain unchanged, the company’s net profit before tax for 2020 and 2019 increases or decreases NT$7,947 thousands and NT$5,406 thousands respectively. The main reason is this consolidated company's demand deposits and long-term loans with variable interest rates.

5. Other price risk

		2020			2019	2019
					Other compreh
Stock price on reporting		Other comprehe nsive profit and loss after-tax	After-tax profit		ensive profit and loss after-tax	After-tax profit
day		amount	and loss		amount	and loss
Increase 5%		$ 7,627		-	7,427	-
Decrease 5%		$ (7,627)		-	(7,427)	-
alue information
ypes and fair value of financial instruments
he consolidated company's	financial assets and liabilities measured at fair value
hrough profit and loss, financial assets and liabilities for hedging, and financial assets
measured at fair value through other comprehensive gains and losses are measured at
air value on the basis of repeatability. The book value and fair value of various types
of financial assets and liabilities (including fair value level information. For the book
value of financial instruments that are not measured by fair value is a reasonable
approximation of fair value	and lease liabilities,		there is no need to disclose fair value
nformation according to regulations ) are listed			as	follows:
				2020.12.31
				Fair value
		Book value Level 1		Level 2	Level 3	Total
Financial assets
measured at fair value
through
other comprehensive
gains and losses
Domestic and foreign	$	155,424 155,424		-	-	155,424
listed (counter) stocks
Domestic and foreign		555,571 -		-	555,571	555,571
unlisted (counter)
stocks
Total	$	710,995 155,424		-	555,571	710,995
Financial assets
measured at
amortized cost
Cash and case	$	857,309 -		-	-		-

6. Fair value information

(1) Types and fair value of financial instruments

The consolidated company's financial assets and liabilities measured at fair value through profit and loss, financial assets and liabilities for hedging, and financial assets measured at fair value through other comprehensive gains and losses are measured at fair value on the basis of repeatability. The book value and fair value of various types of financial assets and liabilities (including fair value level information. For the book value of financial instruments that are not measured by fair value is a reasonable approximation of fair value and lease liabilities, there is no need to disclose fair value information according to regulations ) are listed as follows:

equivalent Notes and accounts receivable (Including related parties) Other financial assets- current Refundable deposits Total Financial liabilities measured at amortized cost Bank load Notes and accounts payable (Including related parties) Other payables Lease liabilities (including non-current) Total	586,515 - - - - 151,156 - - - - 11,713 - - - -
	$ 1,606,693 - - - -
	$ 60,000 - - - - 315,325 - - - - 111,263 - - - - 71,560 - - - -
	$ 558,148 - - - -

	2019.12.31	2019.12.31	2019.12.31	Total 154,906 490,901
Book value $ 154,906 490,901		Fair value
	Level 1 154,906 -	Level 2 - -	Level 3 - 490,901
$ 645,807	154,906	-	490,901	645,807
$ 783,088 461,466 185,894 14,335	- - - -	- - - -	- - - -	- - - -
$ 1,444,783	-	-	-	-

measured at amortized cost Bank loan Other payables Notes and accounts payable (Including related parties) Lease liabilities (including non-current) Total	$ 59,784 - - - - 167,253 - - - - 286,593 130,284 - - - -
	$ 643,914 - - - -

(2) Fair value evaluation technique for measuring financial instruments by fair value If a financial instrument has a public quotation in the active market, the public quotation in the active market shall be the fair value. The market prices announced by major exchanges and central government bond over-the-counter trading centers judged to be popular bonds are the basis for the fair value of listed (counter) equity instruments and debt instruments with publicly quoted prices on the active market.

If the financial instruments held by the consolidated company have an active market, their fair values are listed as follows according to their categories and attributes: When financial assets and liabilities measured at fair value through profit and loss are quoted in an active market, the market price is the fair value. Except for the

above-mentioned financial instruments within active markets, the fair values of other financial instruments are obtained through evaluation techniques or with reference to the quotations from counterparties. The fair value obtained through evaluation technique can refer to the current fair value of other financial instruments with similar

substantive conditions and characteristics, discounted cash flow method, or other evaluation techniques, including the use of market information available on the date of the consolidated balance sheet calculated.

If the financial instruments held by the consolidated company have an inactive market, their fair values are listed as follows according to their categories and attributes: Equity instruments without public quotation: If there is no market for reference, the evaluation method is used to estimate. The estimates and assumptions used are consistent with the information used by market participants as estimates and assumptions when pricing financial products. The information is available to the consolidated company.

The interest rate of bank borrowing is mostly close to the market interest rate, so the borrowing amount is taken as the fair value. Please refer to Note 6 (10) and 6(11) for the interest rate.

(3) Transfer between level 1 and level 2

No such transfer in 2020 and 2019.

(4) List of changes in level 3

January 1, 2020 Total profit or loss Recognized in other comprehensive income December 31, 2020 January 1, 2019 Total profit or loss Recognized in other comprehensive income December 31, 2019		`Measured at fair value through` `other comprehensive gains` `and losses` `Equity instruments without` `publicquotation` $ 490,901 64,670 $ 555,571 $ 338,238 152,663 $ 490,901

The above-mentioned total profit or loss is reported in the series of

"unrealized appraised profit (loss) of financial assets measured at fair value through other comprehensive gains and losses".

Among them, those related to assets still held as of December 31, 2019 and 2020 are as follows:

Total profit or loss Recognized in other comprehensive income (Listed in “Unrealized Appraisal Profits and Losses of Financial Assets Measured at Fair Value through Other Comprehensive income'')	2020 $ 64,670	2019 152,663

(5) Quantitative information on the fair value measurement of significant unobservable inputs (level 3)

The consolidated company's fair value measurement is classified as the third level mainly for financial assets measured at fair value through other comprehensive gains and losses-equity instrument investment without an active market.

Most of the company’s fair value is classified as the third level with only a single significant unobservable input and only equity instrument investments without an active market have multiple significant unobservable inputs. The significant unobservable input values of equity instrument investment without an active market are independent to each other, so there is no interrelationship.

The quantitative information list of significant unobservable input values is as follows:

Item Financial assets measured at fair value through other comprehensiv e gains and losses- equity instrument investment without an active market	Evaluation technique Net asset value method	Significant unobservable input value `‧`Net asset value	Significant unobservable input value and fair value relationship
			Not applicable

(23) Financial risk management
Summary

The consolidated company is exposed to the following risks due to the use of financial instruments

(1) Credit risk
(2) Liquidity risk
(3) Market risk

This note expresses the consolidated company's risk information on the above-mentioned risks, the consolidated company's objectives, policies and procedures for measuring and managing risks. For further quantitative disclosure, please refer to the respective notes of the individual financial report.

Risk management structure

The consolidated company's financial division provides services for each business, analyzes the internal risk report of risk insurance according to the degree and breadth of risk, supervises and manages the financial risks related to the company's operations. The consolidated company establishes appropriate internal policies and systems to control credit risk and liquidity risk. As for market risks, we collect information from various parties, hoping to accurately predict the future trends of exchange rates, interest rates, etc., and use financial instruments to avoid risky risks when necessary to reduce the impact of these risks. The use of financial instruments is regulated by

the consolidated company’s relevant policies, and internal auditors continue to

review compliance with policies and risk limits. The consolidated company does not trade financial instruments for speculative purposes.

Credit risk

Credit risk is the risk of the consolidated company's financial loss due to the inability of its customers or financial instrument counterparties to fulfill contractual obligations. It mainly comes from the company's accounts receivable from customers and securities investments.

(1) Accounts receivable and other receivables

The consolidated company's accounts receivable covers many customers, scattered in different industries and geographic regions, and there is no significant concentration of transactions with a single customer and the sales area is scattered, so the credit risk of accounts receivable is not likely to be significantly concentrated. The company has established a credit policy. According to this policy, before standard payment and shipping conditions are given, it is necessary to analyze the credit rating of each new customer individually before the transaction begins.

(2) Investment

The credit risk of bank deposits, fixed income investments and other financial instruments is measured and monitored by the consolidated company's financial division. Since the transaction partner and the performing party are all creditworthy banks and financial institutions, corporate organizations and government agencies with investment level and above, there is no significant credit risk.

Liquidity risk
Liquidity risk refers to the risk that the consolidated company cannot deliver cash or other financial assets to pay off financial liabilities and fail to perform related obligations. The consolidated company manages and maintains sufficient cash and cash equivalents to support the company's operations and reduce the impact of cash flow fluctuations. The management of the consolidated company supervises the use of bank financing lines and ensures compliance with the terms of the loan contract.
Market risk

Market risk refers to the risk that changes in market prices, such as exchange rates, interest rates, and equity instrument prices, affect the consolidated company's earnings or the value of financial instruments held. The goal of market risk management is to control the risk of market risk within an acceptable range and minimize the risk.

(1) Exchange rate risk

The consolidated company is exposed to sales and purchase transactions that are not denominated in functional currencies, which causes the consolidated company to generate exchange rate fluctuation risks. The consolidated company’s functional currency is mainly NTD. The main denomination currencies for these transactions are USD, RMB and HKD.

(2) Other market price risk

The consolidated company incurs equity price risk insurance due to equity securities and open fund investments in listed counters.

(24) Capital management

The consolidated company plans its capital management based on the characteristics of the current industry and the future development of the company, taking changes in the external environment and other factors into account, to ensure that the company has the necessary financial resources and operating plans to support the future working capital and capital expenditures, research and development expenses, debt repayment and dividend expenses, etc. The management authority uses an appropriate total debt/equity ratio to determine the company’s optimal capital structure. In order to maintain a sound capital base, the company optimizes the balance of debt and equity so to increase shareholder compensation. The consolidated company’s debt-to-equity ratio at the reporting date is as follows:

Total liabilities Total equity Debt-to-equity ratio	2020.12.31 $ 660,500 2,819,564 23%	2019.12.31
		686,575 2,847,012 24%

As of December 31, 2019 and 2020, the consolidated company's capital management method has not changed significantly.

7. Related party transactions

(1) Name and relationship of related parties

The related parties involved in transactions with the consolidated company during the period covered in this consolidated financial report are as follows:

`Name of relatedparties` AB Corp. DongGuan E-run electronics co.,ltd.	`Relationship with the company`
	Affiliated company of the consolidated compan`y` Subsidiary of the consolidated company

(2) Major transactions with related parties

Operating income

The consolidated company's major sales amounts to related parties are as follows:

Affiliated company`－`AB Corp. Affiliated company`－`DongGuan E-run	2020		2019
	$ 101,388 50 $ 101,438		168,828 50
			168,878

The consolidated company's sales price to the above-mentioned related parties is based on the company's various product price lists, and the payment to the

above-mentioned related parties is collected from 90 to 135 days after the month end. 2. Purchase

The consolidated company's purchase amount from related parties is as follows:

Subsidiaries: Affiliated company`－`DongGuan E-run Affiliated company`－`AB Corp.	2020		2019
	$ 32,579 288 $ 32,867		27,805 1,065 28,870

The consolidated company's purchase terms and conditions from the

above-mentioned related parties are from 85 days to 115 days of monthly settlement, and the price is no different from other manufacturers.

3. Amounts due from related parties

The details of the company's accounts receivable from related parties are as follows:

Account item Accounts receivable- related party Accounts receivable- related party	Type of relatedparties Affiliated company`－`AB Corp Affiliated company`－`DonGuan E-run	2020.12.31		2019.12.31
		$ 40,033 38 $ 40,071		50,033 38 50,071

Amounts due to related parties

The details of the company's accounts payable to related parties are as follows:

Account item Accounts payable- related party Accounts payable- related party	Type of relatedparties Affiliated company`－`AB Corp Affiliated company`－`DonGuan E-run	2020.12.31		2019.12.31
		$ 26 16,689 $ 16,715		17 11,042 11,059

(3) Key management personnel transactions

Remuneration of key management personnel

Short-term employee benefits Post-employment benefits dged assets `Asset name`	`Subject topledge`	2020	2019
		$ 9,921 91 $ 10,012 2020.12.31	9,867 69 9,936 2019.12.31


Other financial assets- current(pledged fixed deposit) Real estate	Contract bond and warranty deposit Short-term/ long-term loan	$ 63,493 73,527 $ 137,020	62,013 76,122 138,135

8. Pledged assets

9. Significant contingent liabilities and unrecognized contractual commitments: N/A

10. Loss from major disaster: N/A

11. Significant post-period matters: N/A

12. Other

(1) The functions of employee benefits, depreciation and amortization expenses are summarized as

follows:

lows:
Function Category	2020			2019
	Attributable to operating costs	Attributable to operating expenses	Total	Attributable to operating costs	Attributable to operating expenses	Total
Employee benefit Salary expense Labor and health insurance expense Pension expense Directors' remuneration Other employee benefits Depreciation expense Amortization fee	`172,952` `4,356` `3,793` `-` `4,150` `49,394` `-`	`113,454` `6,742` `3,612` `3,499` `3,977` `59,098` `344`	`286,406` `11,098` `7,405` `3,499` `8,127` `108,492` `344`	`227,126` `7,246` `17,548` `-` `1,435` `70,306` `-`	`127,666` `7,515` `5,513` `4,642` `3,692` `49,310` `924`	`354,792` `14,761` `23,061` `4,642` `5,127` `119,616` `924`

(2) The coronavirus pneumonia epidemic had a minor impact on the production and sales of the consolidated company and its subsidiaries. All production systems have fully resumed to work and production lines have returned to normal. The consolidated company will continue to pay attention to the development of the incident and related impacts.

13. Disclosure of Matters in Notes

(1) Information with regard to major transactions

Loans to others

Unit: NTD thousand

#	Companies that lend loans	Prospective borrowers	Accounting subjects	The highest amount of the current period	Ending balance	Actual lending amount	Interest rate range	Loan by nature (note 1)	Transaction amount with regard to business	Reasons for short-term financing	Allowance for loss amount	Collateral	Collateral	Limited amount of loans for each entity (Note 2)	Limited amout of total loans (Note 3)
												Name	Value
1 2 3	Bright LED electronics DongGuan BRTLED DongGuan BRTLED	KoBrite Taiwan Henan Bright Crystal DongGuan KoBrite	Other receivables Other receivables Other receivables	80,000 37,905 (RMB $8,660) 26,262 (RMB $6,000)	80,000 37,905 (RMB $8,660) 26,262 (RMB $6,000)	78,500 37,905 (RMB $8,660) 26,262 (RMB $6,000)	2% 2% 2%	2 2 2	- - -	Operating turnover Operating turnover Operating turnover	- - -	N N N	- - -	269,92 210,14 210,14	6 1,079,70 5 840,58 5 840,58

Note 1: 1. means have business contacts. 2. means has the need for short-term financing. Note 2: The limit for total amount of lending loans does not exceed 10% of the net worth of the enterprise. Foreign companies in which the company directly or indirectly hold 100% of the voting shares are not subject to the 10% limit on loans to the company's net worth, but the respective limits for capital loans should still not exceed 100% of the company's net worth. Note 3: The limit for total amount of capital loans shall not exceed 40% of the net worth of the enterprise. Foreign companies in which the company directly or indirectly hold 100% of the voting shares are not subject to the 40% limit on total amount of loans to the company's net worth, but the respective limits for capital loans should still not exceed 100% of the company's net worth.

Note 4: It is converted to NTD at the RMB exchange rate of 4.377 at the end of the period

Endorsement for others: N/A
The situation of holding marketable securities at the end of the period (excluding investment in subsidiaries, affiliates and joint ventures): Unit: thousand shares

==> picture [461 x 251] intentionally omitted <==

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

Holding Types and names of securities Relationship with Accounting items End of term
the securities issuer
Company Unit/share Book value Holding Fair value Note
ratio
The Powertip Corporate director Financial assets measured at 19,020 152,542 12% Price per stock
company fair value through market =8.02
other comprehensive gains
and losses-non-current
〃 DS N?A 〃 764 - 3% Price per stock
market= -
〃 MFA Financial Inc (MFO) 〃〃 2.8 2,028 -% Price per stock
market=
(US25.43)
〃 Seaspan Corp (SSWA) 〃〃 1.2 854 -% Price per stock
market=
(US25.00)
The WK 9 Corporate director Financial assets measured at 15,380 342,008 15% 342,008
company fair value through
other comprehensive gains
and losses-non-current
〃 Foxfortune Technology Ventures 〃〃 2,000 117,711 12% 117,711
Ltd.
〃 New fund capital 〃〃 10,000 95,852 16% 95,852
710,995
----- End of picture text -----

The cumulative amount of buying or selling the same securities reaches NTD$300 million or more than 20% of the paid-in capital: N/A
Acquired real estate with an amount of NTD$300 million or more than 20% of the paid-in capital: N/A
Disposal of real estate with an amount of NTD$300 million or more than 20% of the paid-in capital: N/A
The amount of purchases and sales with related parties reaches NTD$100 million or more than 20% of the paid-in capital:

`Import (sell)` `company`	`Trading` `partner` `Name`	`Relations`	`Transaction`	`Transaction`	`Transaction`	`Transaction`	`Circumstances and reasons` `for trading condition` `which are different from` `regular trading`	`Circumstances and reasons` `for trading condition` `which are different from` `regular trading`	`Notes and accounts` `receivable (paid)`	`Notes and accounts` `receivable (paid)`	`Note`
			`Import` `(sell)`	`Amount`	`% of total` `import` `(sales)`	`Credit` `period`	`Price`	`Credit` `period`	`Balance`	`% of total notes` `and accounts` `receivable` `(paid)`
The company The company WanHui (HK)	AB Corp. WanHui (HK) The company	Affiliated company Subsidiary 100% owned parent comp	(Sell) Import (Sell)	(101,388 615,56 (615,560	(11) % 89 % (76) %	OA 135 days Ajust according to its funding needs Ajust according to its funding	Price agreement according to the comapny Price agreement according to the comapny Price agreement according to	No significant differences No significant differences No significant differences	40,03 (1,617,627 1,617,62	3 12% (99)% 7 99%	Note Note Note

WanHui (HK) DongGuan BRTLED	DongGuan BRTLED WanHui (HK)	any Subsidiary 100% owned parent comp any	Import (Sell)	623,38 (623,387	77 % (62) %	needs Ajust according to its funding needs Ajust according to its funding needs	the comapny Price agreement according to the comapny Price agreement according to the comapny	No significant differences No significant differences	(849,176 849,17	(92)% 6 84%	Note Note

Note: The transactions listed on the left column have been written off during the preparation of the consolidated statement.

Receivables from related parties amount to NT$100 million or more than 20% of the paid-in capital:

Company with account receivables	Trading partner Name	Relations	Balance of accounts receivable from related parties	Turnover	Overdue amounts from related parties	Overdue amounts from related parties	Amounts receivable from related parties recovered after theperiod	allowance for loss amount	Note
					Amount	Processing
WanHui (HK) DongGuan BRTLED KoBrite	The company WanHui (HK) WanHui (HK)	100% owned parent company `〃` `〃`	1,617,627 849,176 165,702	0.37 0.72 0.14	Note 1 Note 1 Note 1	Note 1 Note 1 Note 1	95,761 80,561 13,809	- - -	Note 2 Note 2 Note 2

Note 1: The difference between receivables and payables shall be collected based on fund requirements.

Note 2: The transactions listed on the left column have been written off during the preparation of the consolidated statement.

9. Engage in derivatives trading: N/A

10. Business relations and important transactions between parent and subsidiary companies:

`#` `(Note 1)`	`Name of traders`	`Transaction` `objects`	`Relation with` `traders` `(Note 2)`	`Transaction situation`	`Transaction situation`	`Transaction situation`	`Transaction situation`
				`Subject`	`Amount`	`Condition`	`% of combined total` `revenue or total` `assets`
1 1 2 2 3 3 4 5 6 7	WanHui (HK) `〃` DongGuan BRTLED `〃` KoBrite `〃` The company DongGuan BRTLED DongGuan BRTLED The company	The company `〃` WanHui (HK) `〃` DongGuan KoBrite DongGuan KoBrite KoBrite Taiwan Henan Bright Crystal DongGuan KoBrite WanHui (HK)	2 2 2 2 3 3 1 3 3 1	Sales revenue Accounts receivable Sales revenue Accounts receivable Sales revenue Accounts receivable Other receivables Other receivables Other receivables Sales revenue	615,560 1,617,627 623,387 849,176 23,952 165,702 78,500 37,905 26,262 31,504	Adjusted according to funding needs `〃` `〃` `〃` `〃` `〃` - - - TT 135 days	44.75% 46.48% 45.31% 24.40% 1.74% 4.76% 2.26% 1.09% 0.75% 2.29%

Note 1. The way to fill in the serial number is as follows: 1.0 represents the parent company.

Subsidiaries are numbered sequentially starting from Arabic numeral 1 according to the company type.
Note 2: The type of relationship with the trader is marked as follows:
Parent company to subsidiary.
Subsidiary to parent company.
Subsidiary to subsidiary.

(2) Re-investment business related information

The consolidated company's reinvestment business information for 2020 is as follows

(excluding investee companies in China):

Investor Name	Investee Name	Region	Main business Items	Original investment amount Original investment amount	Original investment amount Original investment amount	Hold at the end of period	Hold at the end of period	Hold at the end of period	Investee Current income	Recognized in this period Investment (Profit) Loss	Note
				End of period	End of last year	Shares (thousand)	Ratio	Book value
The company 〃〃〃〃〃 KoBrite KoBrite	WanHui (HK) KoBrite Corp. LiSheng Int’l AB Corp. WanShui Powertip image KoBrite Taiwan Bright Crystal (HK)	HK Mauritius HK US HK TW TW HK	Processing business of LED indicators, displays and related components Investment holding PCB processing Dealer Investment holding Optical lens, lens design and production Investment holding Investment holding	524,673 1,082,499 139,297 1,702 61,910 64,966 500,000 404,342	524,673 1,082,499 139,297 4,943 61,910 64,966 500,000 404,342	11,460 8,783,545 35,740 52 3 5,820 50,000 100,994	100% 93% 60% 16% 23% 19% 100% 80%	2,163,691 246,408 72,179 7,369 30,379 82,240 85,530 206,073	(32,013) (30,512) 24,356 (976) 6,883 111,661 (16,870) (13,007)	(32,013) (28,267) 14,509 (989) 1,586 21,261 recognized by KoBrite for investment gains and losses recognized by KoBrite for investment gains and losses	Subsidiary (Note) 〃 `〃` adopting the equity method `〃` `〃` Subsidiary (Note) Subsidiary (Note)

Note: The transactions listed on the left have been written off during the preparation of the consolidated financial report.

(3) Information with regard to investment in China
Relevant information about reinvestment in China:

==> picture [494 x 189] intentionally omitted <==

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

Name of Main business Investment Cumulative Exported or Cumulative Current Direct or Recognized in End of Investment
invested company method remittances remittances profit (loss) indirect vestment period investm repatriated a
in China from Taiwan recovered in from of the investment profit (loss) in ent s of
at the this period Taiwan at investee co this period the current
beginning of the end of mpany period
the period Investment the period
amount
Items Paid-in Amount Export Amount Amount Holding (Note 3) Book value Income
capital (Note 1) (Note 1) (Note 1) (Note 1) ratio (Note 1)
DongGuan Manufacture and sell of HKD340,222 Indirect - - - - (23,002) 100% (23,002) 2,101,449 -
BRTLED LED component and its investment
related products through WanHui
(HK) (Note 4)
DongGuan KoBrite Production US$14,590 Indirect 149,121 - - 149,121 (3,032) 93% (2,809) (148,016) -
and processing of investment though (US$4,974)
LED chips KoBrite Corp. (US$4,974)
DongGuan Yi-Run production and sale of RMB$41,001 Indirect 58,813 - - 58,813 6,883 23% 1,586 6,998 8,958
other steel products investment (HKD$15,280) (HKD$15,28 (HKD$2,439)
through WanHui 0)
(HK)
DongGuan LiSheng PCB processing HKD$10,000 Indirect 3,279 - - 3,279 23,943 60% 14,263 40,593 -
PCB investment
through LiSheng (HKD$852) (HKD$852)
Int’l (Note 4)
----- End of picture text -----

Henan Bright Crystal P h a p i b	roduction and sales of igh-quality crystals nd LED lighting roducts, as well as mport and export usiness	US$16,200	Indirect investment through Bright Crystal (HK) (Note 4)	403,981 (US$13,475)	-	-	403,98 (US$13,475)	(12,995)	74%	(9,622)	190,974	-

2. Limits for reinvestment in China:

Cumulative investment amount remitted from Taiwan to China at the end of the period	Approved investment amount by the Overseas Chinese and Foreign Investment Commission (Note 1)	According to the regulations of the Overseas Chinese and Foreign Investment Commission Investment quota in China
615,194 (US18,449`及`HKD16,132)	2,004,118 (US19,002`及`HKD398,296)	Note 2

     - Note 1: It is converted into NTD at the end of the period using the USD exchange rate of 28.48, HKD exchange rate of 3.673 and RMB 4.377.

     - Note 2: The company has been approved by Bureau of Industry of the Ministry of Economic Affairs to comply with the operating headquarters certification letter, so there is no limit on the amount of investment in China.

     - Note 3: The investment gains and losses of the current period are calculated based on the financial statements of the investee company verified by accountants.

     - Note 4: Existing reinvestment companies in the third region use their own funds and machinery and equipment for investment.

     - Note 5: Except for Dongguan Yi-Run Electronics Co., Ltd., the remaining transactions have been written off during the preparation of the consolidated financial report

  3. Major transactions:

For direct or indirect major transactions (has been written off when preparing the consolidated report) of the consolidated company’s investee companies in China in 2020, please refer to the description of "Information on Major Transactions"
(4) Information with regard to investment in China

Unit: shares

Shares Name of major shareholders	Number of shares held	Holding ratio
~~Yi-Ruan investment company~~	`31,859,212`	`17.53%`
~~WanHui investment company~~	`27,378,397`	`15.07%`
~~Tseng-Jen Liaw~~	`21,028,417`	`11.57%`

Note: (1) The information of major shareholders in this table is based on the last business day at the end of each quarter by the company. The total number of common shares and special shares, which sum up to 5% or more, of the company that have been delivered without physical registration (including treasury shares) is calculated by the company. As for the share capital recorded in the company's financial report and the company's actual number of shares delivered without physical registration, there may be differences due to different calculation bases.
(2) If above information belongs to the shareholder's delivery of shares to the trust, it is disclosed in individual accounts by the trustor who opened the trust account for the trustee. As for the shareholders’ declaration of insider’s shareholding in accordance with the Securities and Exchange Act, their shareholding includes their own shareholding plus the shares delivered to the trust and the right to use the trust property. For information on insider’s shareholding declaration, please refer to Market observation post system.
(3) As of December 31, 2020, the company has bought back total of 10,000 thousands of treasury shares, which is approximately 5.50% of the company’s common stock for which the company has completed payment without physical registration (including treasury stocks). Detailed information please refers to 6(16).

14. Department information

(1) General information:

The consolidated company has four departments required to be reported: Department A, Department B, Department C, and other departments. Department A is the sales business of light-emitting diode components and related products, Department B is engaged in the manufacturing and sales of light-emitting diode components and related products, Department C is engaged in the manufacturing and sales of dies, and other departments are engaged in manufacturing and sales of PCB, etc.

(2) Departmental profit and loss, assets, liabilities and their measurement basis and adjustment information required to be reported:

The consolidated company uses the departmental pre-tax profit and loss in the internal management report which reviewed by the chief operating decision maker (excluding non-recurring gains and losses and exchange gains and losses) as the basis for the management of resource allocation and performance evaluation. Since income tax, non-recurring gains and losses, and conversion gains and losses are managed on a group basis,

the consolidated company does not amortize income tax expenses (benefits), non-recurring gains and losses, and conversion gains and losses to the reporting department. In addition, not all profit and loss of reportable departments include significant non-cash items other than depreciation and amortization. The reported amount is consistent with the report used by the operating decision maker.

The accounting policies of the operating department are the same as the "Summary Description of Important Accounting Policies" described in Note 4.

The consolidated company regards sales and transfers between departments as transactions with a third person and measured at the current market price.

Information and adjustments of the operating department of the consolidated company are as follows:

ows:
Revenue Revenue from external customers Revenue from depts. Total revenues Dept.profit (loss) Total asset of dept. Total liability of dept.			2020			Total 1,375,687 -
	Dept A $ 885,128 -	Dept B	Dept C 102,091 130,440	Other dept.	Adjust/ eliminate
		387,122 624,178		1,346 85,914
					- (840,532)
	$ 885,128	1,011,300	232,531	87,260	(840,532)	1,375,687
	$ 175,404	(30,650)	(33,124)	24,688	45,771	182,089
	$ 4,478,681	2,541,669	651,841	153,800	(4,345,927)	3,480,064
	$ 1,779,425	377,978	334,113	32,633	(1,863,649)	660,500

(3) Information on types of products and services:

The reportable departments of the consolidated company information has been based on different products and services, and there is no need to disclose product and labor service information.

(4) Major shareholders information:

The information about the location of the consolidated company is as follows: Revenue is classified based on the geographic location of the customer and non-current assets are classified based on the geographic location of the asset.

Revenues from external customers:

lassified based on the geographic location of the asset. venues from external customers:
Region China Taiwan Korea United states Other	2020 $ 658,050 270,465 120,875 207,763 118,534	2019 865,716 414,837 179,539 209,877 93,690
	$ 1,375,687	1,763,659

2. Non-current assets

	Region Taiwan China Total	2020 $ 184,374 556,398	2019 183,166 669,381
		$ 740,772	852,547

Non-current assets include investments using the equity method, property, plant and equipment, right-of-use assets, deposits and other non-current assets. However, it does not include non-current assets that include financial instruments and deferred income tax assets.

(5) Information of important customers:

In both 2020 and 2019, the consolidated company has no non-affiliated customers who account for more than 10% of its consolidated operating income.

7. Financial Analysis and Risk Management

7.1 Comparison analysis of financial situations

Unit: NT $thousand

Year Items	2020	2019	Differences	Differences
			Amount	%
Current assets	2,007,328	2,018,295	(10,967)	-1%
Property, plant and equipments	488,697	537,937	(49,240)	-9%
Other assets	984,039	977,355	6,684	1%
Total assets	3,480,064	3,533,587	(53,523)	-2%
Current liabilities	542,254	556,064	(13,810)	-2%
Noncurrent liabilities	118,246	130,511	(12,265)	-9%
Total liabilities	660,500	686,575	(26,075)	-4%
Capital shares	1,816,742	1,866,742	(50,000)	-3%
Capital reserve	421,959	441,683	(19,724)	-4%
Retained earning	558,413	573,929	(15,516)	-3%
Other equity	51,649	(1,413)	53,062	-3755%
Treasury stocks	(149,507)	(149,507)	0	0%
Noncontrolling equity	120,308	115,578	4,730	4%
Total equity	2,819,564	2,847,012	(27,448)	-1%
Explanation for changes:(The changes between the previous and latest period reach more than 10% and the changed amount is more than 1% of total assets) 1.Increase in other equity: Other equity in 2020 increased significantly compared with the previous year, mainly due to the significant increase in the recognition of "unrealized benefits of financial assets measured by the fair value of other comprehensive profit and loss cases" in the current period. Future response plan:Despite the above changes in financial conditions, it will not have a significant impact on the company's operating conditions.

7.2 Comparison Analysis of Operating Performance

Unit: NT $thousand

Year Items	2020	2019	Increased (decreased) amount	Change ratio `％`
Operating income	1,375,687	1,763,659	(387,972)	-22%
Operating cost	998,201	1,339,117	(340,916)	-25%
Operating margin	377,486	424,542	(47,056)	-11%
Operating expenses	269,746	284,811	(15,065)	-5%
Operating profit	107,740	139,731	(31,991)	-23%
Non-operating income and expenses	74,339	119,816	(45,477)	-38%
Net (loss) profit before tax	182,089	259,547	(77,458)	-30%
Income tax	48,974	25,668	23,306	91%
Net profit for the period	133,115	233,879	(100,764)	-43%
Explanation of changes:(the amount of change is up to 10 million yuan and the change rate is more than 20%): Due to the impact of the pneumonia epidemic in 2020, revenue decreased by 22%. Although costs and expenses have been reduced, operating profit, net profit before tax and net income after tax still decreased by more than 20% compared with the same period last year.

7.3 Cash Flow Analysis

7.3.1 Liquidity analysis for the last two years

Items Year	2020	2019	Change%
Cash flow ratio (%)	58.09	48.80	19%
Cash flow allowance ratio (%)	166.80	153.00	9%
Cash reinvestment ratio (%)	3.22	3.10	0%
Explanation for changes: In the recent five years, cash inflows from operating activities have been stable and capital expenditures have been relatively flat. This has resulted in an increase in cash fairness ratio and cash reinvestment ratio of 19% and 9%,respectively,to a lesser extent.

7.3.2 Improvement plan for insufficient liquidity and analysis of cash liquidity for the coming year
(1) Improvement plan for insufficient liquidity: Not applicable.
(2) Analysis of cash liquidity for the coming year:

the coming year (1) Improvement plan for insufficient liquidity: Not applicable. (2) Analysis of cash liquidity for the coming year:	the coming year (1) Improvement plan for insufficient liquidity: Not applicable. (2) Analysis of cash liquidity for the coming year:	the coming year (1) Improvement plan for insufficient liquidity: Not applicable. (2) Analysis of cash liquidity for the coming year:	the coming year (1) Improvement plan for insufficient liquidity: Not applicable. (2) Analysis of cash liquidity for the coming year:
				Unit: NT$thousand
2020 Beginning cash balance	Net cash flow from operating activities throughout the year	Annual cash amount of investment and financing investment activities	Amount of cash surplus (deficient)	Remedies for insufficient cash
				Investment plan	Financial plan
857,309	300,000	(220,000)	937,309	-	`-`
Changes of cash flow and liquidity analysis: It is expected that the gross margin of products sold in the next year will remain stable, the net cash inflow of operating activities will be about NT $300,000. The number of cash dividends issued, investment income and financing repayments in the next year will be about NT $220,000 outflowed. The cash balance at the end of the period is still sufficient. With low current debt ratio, there is no cash liquidity risk. Remedy for insufficient cash: Not applicable.

7.4 Review and analysis of major capital expenditures and their sources of funds

7.4.1 Utilization of major capital expenditures and sources of funds: N/A
7.4.2 Expected possible yields: Not applicable
7.5 The main reasons for the recent annual reinvestment policy and profit or loss from the reinvestment and its improvement plan and investment plan for the coming year
7.5.1 Reinvestment policy: The company's reinvestment policy considers the production and marketing strategies of products or expands the business areas of other industries.
7.5.2 The investment income recognized by the consolidated company in 2020 using the equity method is NT $21,858 thousands. An increase of NT $9,121 thousands compared to last year. The profit from the invested company has continued to improve.
7.5.3 Investment plan for the coming year: Currently no investment plan for the coming year.

7.6 Risk management and assessment

7.6.1 The impact of recent annual interest rate, exchange rate, and inflation on the company's profit and loss and future measures:
(1) Interest rate: The financial assets affected by the variable interest rate in the 2020 annual consolidated statements of the company are NT $854,650 thousands and the financial liabilities are NT $60,000 thousands. When the interest rate increases or decreases by 1% assuming all other variables remain unchanged, the net profit before tax in 2020 will increase or decrease by NT $7,947 thousands.
(2) Exchange rate: The company and its subsidiaries are mainly exposed to the risk of exchange rate changes arising from sales and purchase prices that are not denominated in functional currencies. When the above mentioned transactions in 2020 consolidated statements face appreciation or depreciation of 5% assuming all other factors remaining unchanged, the net profit before tax in 2020 will increase or decrease by NT $23,265 thousands.
(3) Inflation: No significant inflation in the company and its subsidiaries’ main operating environments and their sales markets.
7.6.2 Main reasons of engaging in high-risk, high-leverage investment, capital loans to others, endorsement guarantees, policies of, profit or loss from derivatives commodities and future countermeasures:
(1) According to the management policy, the company does not involve in high-risk, high-leveraged investment, nor does it operate derivative commodity transactions, so there is no relevant profit or loss in 2020.
(2) The company's capital loan to others and endorsement guarantee tasks are all processed in accordance with the “Procedures for Governing Loaning of Funds and Making of Endorsements/Guarantees”.
7.6.3 The latest annual R&D projects, the current progress of the unfinished R&D projects, the R&D expenses that need to be reinvested, the estimated time to complete mass

production, and the factors that will affect the success of R&D in the future: please refer to 5. Operational highlights.

7.6.4 The impact of recent domestic and foreign important policies and legal changes on the company's finance and business and its countermeasures: The company always concerns about important domestic and foreign policies and legal changes and immediately cooperates with the revision of relevant laws and regulations
7.6.5 The impact of recent technological changes on the company's finance and business and its countermeasures: The company always concerns about changes in the technology industry, and is always ready to make adjustments in all aspects of R&D, production, sales, and operations to respond to industrial changes.
7.6.6 The impact of recent corporate image changes on the company ’s crisis management and countermeasures: no such situation.
7.6.7 Expected profits and possible risks of M&A: No such situation.
7.6.8 Expected profits and possible risks of plant expansion: no such situation
7.6.9 Risks faced by the concentration of purchases or sales: no such situation.
7.6.10 For directors, supervisors or shareholders who hold more than 10% of the shares, the impact and risk of large-scale transfer or replacement of equity: no such situation.
7.6.11 Impact and risk of changes in management rights to the company: no such situation
7.6.12 Litigation or non-litigation cases: N/A
7.6.13 Other important risks and its countermeasures: N/A

7.7 Other important matters: N/A

8. Financial Analysis and Risk Management

8.1 Information related to the company’s affiliates

8.1.1 Consolidated reports of affiliated companies

==> picture [501 x 337] intentionally omitted <==

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

Bright LED Electronics Corp.
WanHui Enterprise KoBrite Corp. LiSheng
Limited (HK) (Mauritius) International
100% 93% Limited compan y
(HK)
60%
DongGuan Bright KoBrite Taiwan DongGuan Bright Crystal DongGuan Bright
LED Electronics corporation KoBrite Company Rise Electronic Co.
Corp. 100% Corporation Limited(HK) Ltd. 100%
100% 100% 80%
Henan Briht
Crystal Company
Ltd.
100%
----- End of picture text -----

8.1.2 Basic information of affiliated companies

Name	Date of establishment	Address	Paid-in capital	Major business or production items
WanHui Enterprise Limited (HK)	1991.06	Room 5, Floor 11, Hung Tai Industrial Building, No. 37-39, Hung To Road, Kwun Tong, Kowloon, HongKong	HKD 11,500,000	Import and export trade/ Holding investment
KoBrite Corp. (Mauritius)	2004.11	Level3, Alexander House, 35 Cybercity,Ebene Mauritius	USD 94,810,043	Holding investment
LiSheng International Limited company (HK)	2003.12	Room 406, Join-In Hang Seng Centre, 71-75 Container Port Road, Kwai Chung, New Territories	HKD 60,000,000	Holding investment

8.1.3 Affiliated companies presuming to have control and affiliation by the same shareholder: N/A

8.1.4 Affiliated companies’ businesses and their interrelationships

Industry	Name of subsidiaries	Relationship with other affiliated companies
Import and export trade/ Holdinginvestment	WanHui Enterprise Limited (HK)	N/A
Holding investment	KoBrite Corp. (Mauritius)	N/A
Holding investment	LiSheng International Limited company (HK)	N/A

8.1.5 Information of directors, supervisors and general managers of affiliated companies

Unit: thousand shares; %

			Unit: thousand shares;%	Unit: thousand shares;%
Company name	Title	Name or representative	Shareholding
			Shares	Shareholding ratio
WanHui Enterprise Limited (HK)	Director Director	Bright LED Electronics Corp. Tsung-Jen Liaw	11,460 40	99.65 % 0.35 %
KoBrite Corp. (Mauritius)	Director Director Director	Bright LED Electronics Corp. Representative: Tsung-Jen Liaw Chi-Chia Hsieh Hsin-Pei Liao	8,783,545 - -	92.64 % - -
LiSheng International Limited company (HK)	Director Director Director	Bright LED Electronics Corp. Tsung-Jen Liaw Chieh Hsiao	35,740 17,682 2,280	59.57 % 29.47 % 3.80 %

8.1.6 Overview of affiliated companies’ operations

Unit: NT $thousands

Company name	Capital	Total assets	Total liabilities	Net worth	Operating income	Operating profit	Profit/loss of the period (after tax)	EPS(NT $) (after tax)
WanHui Enterprise Limited (HK)	48,876	2,541,669	377,978	2,163,691	1,021,956	6,362	(32,013)	(2.78)
KoBrite Corp. (Mauritius)	2,884,613	651,841	334,113	317,728	221,854	(45,479)	(30,315)	(0.00)
LiSheng International Limited company (HK)	253,719	153,800	32,633	121,167	87,260	22,459	24,356	0.41

8.1.7 Consolidated financial statements of affiliated companies

The company that should be included in the consolidated financial statements of affiliated companies is the same as the company’s consolidated financial statements prepared in accordance with international financial reporting standards, thus no separated consolidated financial statements of affiliated companies will be prepared.
8.1.8 The company is not a subsidiary of another company, so no relationship report need to be prepared.
8.2 Status of a private placement of securities during the most recent fiscal year or the current fiscal year up to the date of printing of annual report: N/A
8.3 Holding or disposal of the company shares by the company’s subsidiaries during the most recent fiscal year or the current fiscal year up to the date of printing of annual report : N/A
8.4 Other matters that require additional disclosure: N/A
8.5 Any matter that set forth in Subparagraph 2, Paragraph 2, Article 36 of the Securities and Exchange Act, which might produce material impact on shareholders’ equity or the price of the company’s securities, has occurred during the most recent fiscal year or the current fiscal year up to the date of printing of annual report: N/A

AI assistant

BRIGHT — Annual Report 2020

52264_rns_2021-08-18_720ad732-f87a-4f2f-a668-7985101796d1.pdf

BRIGHT LED ELECTRONICS CORP.

Annual Report 2020

Notice to readers:

1. Letter to Shareholders

Dear Shareholders

Financial Performance (based on consolidated Financial Statements)

Technological Developments

Summary, corporate development, and outlook affected by external competition,

regulatory environment and overall operation strategy

2. Company Profile

2.1 Established date ： June 1, 1981

2.2 Milestone

3. Corporate Governance

3.2 Information regarding BRTLED’s Board of Directors, Supervisors, President, Vice President and Associate Vice Presidents

3.2.1 Information regarding Board Members and Supervisors

3.2.1.1. Information of Corporate Shareholder

(a)Major Shareholders of BRTLED’s Corporate Shareholders

3.2.3 Compensation Paid to Directors, Supervisors, President, and Vice President

3.2.3.1 Compensation Paid to Directors (including Independent Directors)

3.2.3.2 Compensation Paid to Supervisors

3.2.3.3 Compensation Paid to President and Vice President

3.2.3.4 Allocation of Employees Profit Sharing Bonus to Management team

3.3 Status of Corporate Governance

3.3.1 Status of the Board of Directors

3.3.3 Status of Audit Committee or Supervisors

3.3.5 Composition, Duties and Operation of the Compensation Committee:

a. Members of the Compensation Committee

8.

9.

b. Duties:

3.3.6 Corporate Social Responsibility Performance:

3.3.6 Status of Implementation of Ethical management:

3.3.7. Other Company-established corporate governance rules and regulations:

3.3.8. Other Important Corporate Governance Information:

4. 2020 Directors’ training:

3.3.9. Status of Implementation of Internal Control System:

1. Statement of Internal Control

Bright Led Electronics Corp. Statement of Internal Control

2. Important resolutions from board of directors’ meetings:

3.4 Information of Audit fees

3.5 Information on Change of CPA

3.5.1 About the previous CPA:

3.5.2 About the successor of CPA

3.7.2. Stock transfer information

3.8 Relationship information, if among the company's 10 largest shareholders any one is a related party or a relative within the second degree of kinship of another.

Comprehensive shareholding ratio

4. Capital and Shares

4.1 Capitalization Capital formation history:

4.2 Shareholders structure

4.3 Distribution profile of share ownership

4.4 List of major shareholders

4.5 Stock price, net worth, surplus and dividend information for the past two years

4.6 Dividend policy and implementation status

4.6.1. The company’s dividend policy:

4.7 The impact of the proposed bonus shares at the shareholders' meeting on

4.8 Compensation of employees, directors and supervisors

4.8.2. The basis for estimating the amount of employees’, directors’

4.9 Status of share buyback:

5. Operational highlights

5.1 Business Activities

5.1.2 LED industry overview

c. UV-C LED market demand increases significantly in the future

5.1.3 Recent technology and research and development

(2) Successfully developed technology or product:

(3) Future R&D plans:

5.2 Summaries of market, production and sales

(3) Applications of main products

(4) Competitiveness

a. Wide range of product applications

5.2.2 Production process of main products

(4) Infrared emitting modules (5) Infrared receiving modules

5.2.3 Main raw material supply status

5.2.5 Production and sales value table of the last two years

(2) Sales volumes for the last two years

5.3 Overview of employees in the past two years

5.4 Expenditures for environmental protection

5.5 Labor relation

BRIGHT Annual Report 2020

2.1 Established date `：` June 1, 1981