ETERNAL - Interim / Quarterly Report 2021

Eternal Materials Co., Ltd. and Subsidiaries

Consolidated Financial Statements for the Six Months Ended June 30, 2021 and 2020 and Independent Auditors’ Review Report (Stock Code:1717)

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

INDEPENDENT AUDITORS’ REVIEW REPORT

Eternal Materials Co., Ltd.

Opinion

We have reviewed the accompanying consolidated balance sheets of Eternal Materials Co., Ltd. (the “Company”) and its subsidiaries as of June 30, 2021 and 2020, the consolidated statements of comprehensive income for the three months and six months ended June 30, 2021 and 2020, and the changes in equity and cash flows for the six months then ended June 30, 2021 and 2020, and notes to the consolidated financial statements, including a summary of significant accounting policies (collectively referred to as 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 International Accounting Standard 34“Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission(FSC) of the Republic of China. Our responsibility is to express a conclusion on the consolidated financial statements based on our reviews.

Scope of Review

Except as explained in the following paragraph, we conducted our reviews in accordance with Statement of Auditing Standards No. 65“Review of Financial Information Performed by the Independent Auditor of the Entity”. A review of consolidated financial statements consists of making inquiries, primarily of persons responsible for financial less in scope than an audit and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Basis for Qualified Conclusion

As disclosed in Note 13 to the consolidated financial statements, total assets of some non-significant subsidiaries included in the consolidated statements were NT$25,063,846 thousand and NT$22,331,913 thousand, constituting 42% of the consolidated total assets; total liabilities were NT$9,284,575 thousand and NT$7,535,812 thousand , constituting 26% and 23% of the consolidated total liabilities as of June 30, 2021 and 2020, respectively; total comprehensive income profit or loss of these consolidated subsidiaries for the three months and six months ended June 30,2021 and 2020 were at a profit of NT$7,556 thousand, NT$175,533 thousand, NT$305,036 thousand and loss of NT$69,875 thousand, respectively, constituting 1%,94%,20% and 46% of the consolidated total comprehensive income, respectively. The amounts and information disclosed in Notes 36 and 37 to the consolidated financial statements were based solely on the reports prepared and disclosed by these subsidiaries, which were not reviewed by independent accountants for the same reporting periods. In addition, as disclosed in Note 14 to the consolidated financial statements, the total carrying amounts of investments accounted for using the equity method were NT$2,494,977 thousand and NT$2,339,697 thousand as of June 30, 2021 and 2020, respectively; the share of the profit of associates and joint ventures accounted for using the equity method were NT$119,080 thousand, NT$65,304 thousand, NT$226,628 thousand and NT$115,028 thousand for the three months and six months ended June 30, 2021 and 2020, respectively; the Share of the other comprehensive loss of associates and joint ventures were NT$15,187 thousand, NT$23,694 thousand, NT$24,287 thousand and NT$34,038 thousand for the three months and six months ended June 30, 2021 and 2020, respectively. The amounts and information disclosed in Notes 36 to the consolidated financial statements were based solely on the reports recognized and disclosed by investees, which were not reviewed by independent accountants for the same reporting periods.

Qualified Conclusion

Base on our reviews, except for the effect of such adjustments, if any, as might have been determined to be necessary had the financial statements of the non-significant subsidiaries and other equity-method investees as described in the preceding paragraph been reviewed by independent accountants, nothing has come to our attention that caused us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the financial position of the Company and its subsidiaries as of June 30, 2021 and 2020, and of its consolidated financial performance for the three months and six months ended June 30, 2021 and 2020, and its consolidated cash flows for the six months ended June 30, 2021 and 2020 in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and international Accounting Standard 34“Interim Financial Reporting”endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

The engagement partners on the reviews resulting in this independent auditors’ review report are Chao-Chun Wang and Lee-Yuan Kuo.

Deloitte & Touche Taipei, Taiwan Republic of China

August 6, 2021

Notice to Readers

The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to review such consolidated financial statements are those generally applied in the Republic of China.

Eternal Materials Co., Ltd. and Subsidiaries

CONSOLIDATED BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Note 6) Financial assets at fair value through profit or loss－current（Note 7） Notes receivable, net (Notes 8 and 32) Notes receivable from related parties, net (Notes 8 and 31) Accounts receivable, net (Note 8) Accounts receivable from related parties, net (Notes 8 and 31) Other receivables (Notes 8 and 31) Inventories (Note 9) Non-current assets held for sale (Note 10) Other financial assets - current (Note 11) Other current assets - others Total current assets NON-CURRENT ASSETS Financial assets at fair value through profit or loss - non-current (Note 7) Financial assets at fair value through other comprehensive income - non-current (Note 12) Investments accounted for using the equity method (Note 14) Property, plant and equipment (Notes 15 and 32) Right-of-use assets (Note 16) Investment properties (Note 17) Intangible assets (Note 18) Deferred tax assets Other non-current assets - others (Notes 19 and 32) Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Notes 20 and 32) Notes payable Accounts payable (Note 31) Dividend payable Other payables - others Current tax liabilities Liabilities directly associated with non-current assets held for sale (Note 10) Lease liabilities - current (Note 16) Current portion of long-term borrowings (Notes 20 and 32) Other current liabilities - others (Note 23) Total current liabilities NON-CURRENT LIABILITIES Bonds payable (Note 20) Long-term borrowings (Notes 20 and 32) Deferred tax liabilities Lease liabilities - non-current (Note 16) Other non-current liabilities (Note 14) Total non-current liabilities Total liabilities EQUITY ATTRIBUTABALE TO OWNERS OF THE COMPANY (Note 22) Ordinary shares Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Total equity attributable to owners of the Company NON-CONTROLLING INTERESTS (Note 22) Total equity TOTAL	June 30,2021（Reviewed） Amount ％ $ 5,510,982 9 660,047 1 5,658,032 10 46,428 - 13,190,130 22 236,114 1 745,394 1 9,539,925 16 - - 192,844 - 765,093 1 36,544,989 61 10,175 - 1,162,699 2 2,515,965 4 16,158,349 27 1,121,546 2 1,292,936 2 273,081 - 392,168 1 336,431 1 23,263,350 39 $ 59,808,339 100 $ 6,464,375 11 739,705 1 6,432,146 11 - - 1,964,653 3 322,623 1 - - 77,098 - 2,391,166 4 134,667 - 18,526,433 31 2,995,962 5 9,448,402 16 2,675,676 5 222,912 - 1,229,964 2 16,572,916 28 35,099,349 59 12,402,795 21 368,946 1 4,188,871 7 1,442,690 2 7,184,885 12 12,816,446 21 ( 1,239,143) ( 2) 24,349,044 41 359,946 - 24,708,990 41 $ 59,808,339 100	December 31,2020（Audited） Amount ％ $ 6,108,294 11 - - 5,138,238 9 44,739 - 12,121,573 22 218,637 - 791,068 2 7,492,620 13 - - 61,860 - 644,919 1 32,621,948 58 21,301 - 1,016,306 2 2,306,731 4 16,623,050 30 1,195,535 2 1,356,821 2 282,235 - 397,389 1 367,309 1 23,566,677 42 $ 56,188,625 100 $ 4,403,929 8 534,320 1 5,598,389 10 - - 2,053,754 4 442,184 1 - - 81,002 - 2,211,266 4 188,277 - 15,513,121 28 2,995,374 5 10,190,026 18 2,641,898 5 262,898 1 1,347,006 2 17,437,202 31 32,950,323 59 12,402,795 22 368,946 1 4,188,871 7 1,442,690 3 5,213,715 9 10,845,276 19 ( 782,520) ( 1) 22,834,497 41 403,805 - 23,238,302 41 $ 56,188,625 100	June 30,2020（Reviewed）
			Amount ％ $ 6,161,950 12 416,699 1 3,650,108 7 37,362 - 10,255,147 19 164,243 - 894,096 2 7,368,224 14 226,679 - 66,950 - 506,470 1 29,747,928 56 17,495 - 830,644 2 2,379,968 4 16,468,438 31 1,003,403 2 1,260,933 2 391,252 1 378,021 1 298,437 1 23,028,591 44 $ 52,776,519 100 $ 4,366,685 8 253,102 1 3,573,545 7 1,736,391 3 1,733,273 3 177,606 1 1,153 - 55,757 - 4,571,724 9 121,776 - 16,591,012 32 2,994,779 6 8,716,053 16 2,725,281 5 109,019 - 1,338,957 3 15,884,089 30 32,475,101 62 12,402,795 23 368,888 1 4,188,871 8 1,442,690 2 3,596,319 7 9,227,880 17 ( 2,119,065) ( 4) 19,880,498 37 420,920 1 20,301,418 38 $ 52,776,519 100

The accompanying notes are an integral part of the consolidated financial statements. (With Deloitte & Touche auditors’ review report dated August 6, 2021)

Eternal Materials Co., Ltd. and Subsidiaries

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings Per Share) (Reviewed, Not Audited)

		For the	Three Months Ended June 30	Three Months Ended June 30	Three Months Ended June 30	Three Months Ended June 30				For the	Six Months	Six Months	Six Months	Ended June 30
		2021				2020				2021				2020
		Amount		％		Amount		％		Amount		％		Amount		％
OPERATING REVENUE
(Notes 23 and 31)		$13,211,055		100		$ 8,956,132		100		$24,413,474		100		$16,585,647		100
OPERATING COSTS (Notes
9, 24 and 31)		10,315,258		78		6,827,511		76		18,955,101		78		12,835,076		77
GROSS PROFIT		2,895,797		22		2,128,621		24		5,458,373		22		3,750,571		23
OPERATING EXPENSES
(Notes 24 and 31)
Selling and marketing
expenses		726,421		6		518,048		6		1,421,032		6		970,493		6
General and
administrative
expenses		530,872		4		474,910		5		1,055,798		4		961,318		6
Research and
development expenses		358,289		3		344,108		4		694,460		3		634,839		4
Expected credit loss
(gain)		10,694		-		3,979		-	(	7,473)		-		84,745		-
Total operating
expenses		1,626,276		13		1,341,045		15		3,163,817		13		2,651,395		16
PROFIT FROM
OPERATIONS		1,269,521		9		787,576		9		2,294,556		9		1,099,176		7
NON-OPERATING
INCOME AND
EXPENSES
Interest income (Note
24)		22,617		-		25,434		-		50,253		-		53,558		-
Other income (Note 31)		57,868		-		47,454		-		110,792		1		77,318		-
Other gains and losses
(Note 24)	(	18,207 )		-	(	23,420 )		-	(	66,571 )		-	(	74,000 )		-
Net foreign exchange
gains and losses (Note
35)	(	25,541 )		-	(	2,207 )		-	(	60,415 )		-	(	12,267 )		-
Finance costs (Note 24)	(	71,956 )		-	(	97,724 )	(	1 )	(	143,420 )	(	1 )	(	206,008 )	(	1 )
Share of the profit of
associates and joint
ventures (Note 14)		119,080		1		65,304		1		226,628		1		115,028		-
Total non-operating
income and
expenses		83,861		1		14,841		-		117,267		1	(	46,371)	(	1)
PROFIT BEFORE INCOME
TAX		1,353,382		10		802,417		9		2,411,823		10		1,052,805		6
INCOME TAX EXPENSE
(Notes 4 and 25)	(	289,040)	(	2)	(	164,127)	(	2)	(	519,305)	(	2)	(	211,070)	(	1)
NET PROFIT FOR THE
PERIOD		1,064,342		8		638,290		7		1,892,518		8		841,735		5

(Continued)

For the Three Months Ended June 30 2021 2020 Amount ％ Amount ％ $ 101,118 1 ( $ 39,026 ) - 742 - 955 - ( 257,791 ) ( 2 ) ( 389,455 ) ( 5 ) ( 15,187) - ( 23,694) - ( 171,118) ( 1) ( 451,220) ( 5) $ 893,224 7 $ 187,070 2 $ 1,074,098 $ 650,142 ( 9,756) ( 11,852) $ 1,064,342 $ 638,290 $ 907,188 $ 202,198 ( 13,964) ( 15,128) $ 893,224 $ 187,070 $ 0.87 $ 0.52 0.87 0.52	For the Three Months Ended June 30 2021 2020 Amount ％ Amount ％ $ 101,118 1 ( $ 39,026 ) - 742 - 955 - ( 257,791 ) ( 2 ) ( 389,455 ) ( 5 ) ( 15,187) - ( 23,694) - ( 171,118) ( 1) ( 451,220) ( 5) $ 893,224 7 $ 187,070 2 $ 1,074,098 $ 650,142 ( 9,756) ( 11,852) $ 1,064,342 $ 638,290 $ 907,188 $ 202,198 ( 13,964) ( 15,128) $ 893,224 $ 187,070 $ 0.87 $ 0.52 0.87 0.52	For the Three Months Ended June 30 2021 2020 Amount ％ Amount ％ $ 101,118 1 ( $ 39,026 ) - 742 - 955 - ( 257,791 ) ( 2 ) ( 389,455 ) ( 5 ) ( 15,187) - ( 23,694) - ( 171,118) ( 1) ( 451,220) ( 5) $ 893,224 7 $ 187,070 2 $ 1,074,098 $ 650,142 ( 9,756) ( 11,852) $ 1,064,342 $ 638,290 $ 907,188 $ 202,198 ( 13,964) ( 15,128) $ 893,224 $ 187,070 $ 0.87 $ 0.52 0.87 0.52	For the Six Months Ended June 30	For the Six Months Ended June 30	For the Six Months Ended June 30
2021	％ 1 - ( 2 ) - ( 1) 7	2020	2021	％ 1 - ( 3 ) - ( 2) 6	2020
Amount $ 101,118 742 ( 257,791 ) ( 15,187) ( 171,118) $ 893,224 $ 1,074,098 ( 9,756) $ 1,064,342 $ 907,188 ( 13,964) $ 893,224 $ 0.87 0.87		Amount ( $ 39,026 ) 955 ( 389,455 ) ( 23,694) ( 451,220) $ 187,070 $ 650,142 ( 11,852) $ 638,290 $ 202,198 ( 15,128) $ 187,070 $ 0.52 0.52	Amount $ 233,669 16,857 ( 621,773 ) ( 24,287) ( 395,534) $ 1,496,984 $ 1,898,747 ( 6,229) $ 1,892,518 $ 1,517,753 ( 20,769) $ 1,496,984 $ 1.53 1.53		Amount $ 88,790 ( 32,553 ) ( 713,300 ) ( 34,038) ( 691,101) $ 150,634 $ 861,881 ( 20,146) $ 841,735 $ 185,505 ( 34,871) $ 150,634 $ 0.69 0.69	％
						- - ( 4 ) - ( 4) 1

(Concluded)

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

(With Deloitte & Touche auditors’ review report dated August 6, 2021)

Eternal Materials Co., Ltd. and Subsidiaries

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (In Thousands of New Taiwan Dollars, Except Dividends Per Share) (Reviewed, Not Audited)

BALANCE AT JANUARY 1, 2021 Net profit (loss) for the six months ended June 30, 2021 Other comprehensive income (loss) for the six months ended June 30, 2021, net of income tax Total comprehensive income (loss) for the six months ended June 30, 2021 Decrease in non-controlling interests Disposal of investments in equity instruments designated as at fair value through other comprehensive income BALANCE AT JUNE 30, 2021 BALANCE AT JANUARY 1, 2020 Appropriation of 2019 earnings(Note 22) Legal reserve Special reserve Cash dividends distributed by the Company－NT$1.4 per share Net profit (loss) for the six months ended June 30, 2020 Other comprehensive income (loss) for the six months ended June 30, 2020, net of income tax Total comprehensive income (loss) for the six months ended June 30, 2020 Disposal of subsidiaries The difference between the consideration received or paid and the carrying amount of the subsidiaries’ net assets during actual disposal or acquisition (Note 27) Decrease in non-controlling interests Disposal of investments in equity instruments designated as at fair value through other comprehensive income BALANCE AT JUNE 30, 2020		Equity Attributable to Owners of	the Company		Total Non-controlling Interests Total Equity $ 22,834,497 $ 403,805 $ 23,238,302 1,898,747 ( 6,229 ) 1,892,518 380,994) ( 14,540) ( 395,534) 1,517,753 ( 20,769) 1,496,984 - ( 23,090) ( 23,090) 3,206) - ( 3,206) $ 24,349,044 $ 359,946 $ 24,708,990 $ 21,415,337 $ 504,398 $ 21,919,735 - - - - - - 1,736,391) - (1,736,391) 1,736,391) - (1,736,391) 861,881 ( 20,146 ) 841,735 676,376) ( 14,725) ( 691,101) 185,505 ( 34,871) 150,634 - ( 146) ( 146) 12,842 ( 40,571) ( 27,729) - ( 7,890) ( 7,890) 3,205 - 3,205 $ 19,880,498 $ 420,920 $ 20,301,418
	Ordinary Shares Capital Surplus $ 12,402,795 $ 368,946 - - - - - - - - - - $ 12,402,795 $ 368,946 $ 12,402,795 $ 356,046 - - - - - - - - - - - - - - - - - 12,842 - - - - $ 12,402,795 $ 368,888	Retained Earnings Legal Reserve Special Reserve Unappropriated Earnings $ 4,188,871 $ 1,442,690 $ 5,213,715 - - 1,898,747 - - - - - 1,898,747 - - - - - 72,423 $ 4,188,871 $ 1,442,690 $ 7,184,885 $ 3,942,840 $ 510,893 $ 5,645,452 246,031 - ( 246,031 ) - 931,797 ( 931,797 ) - - (1,736,391) 246,031 931,797 (2,914,219) - - 861,881 - - - - - 861,881 - - - - - - - - - - - 3,205 $ 4,188,871 $ 1,442,690 $ 3,596,319	Other Equity	Total Other Equity $ 782,520) - 380,994) ( 380,994) - 75,629) ( $ 1,239,143) $ 1,442,689) - - - ( - ( - 676,376) ( 676,376) - - - - $ 2,119,065)
			Exchange Differences on Translation of The Financial Unrealized Gains and Losses on Financial Assets at Fair Value Statements of Foreign Operations Through Other Comprehensive Income ($ 1,320,826) $ 538,306 ( - - ( 631,520) 250,526 ( ( 631,520) 250,526 ( - - - ( 75,629) ( ($ 1,952,346) $ 713,203 ( ($ 1,684,908) $ 242,219 ( - - - - - - - - - - ( 732,613) 56,237 ( ( 732,613) 56,237 ( - - - - - - - - ($ 2,417,521) $ 298,456 (

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

(With Deloitte & Touche auditors’ review report dated August 6, 2021)

Eternal Materials Co., Ltd. and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) (Reviewed, Not Audited)

CASH FLOWS FROM OPERATING ACTIVITIES Profit before income tax Adjustments for: Depreciation expense Amortization expense Expected credit loss (gain) Net gain on fair value changes of financial assets designated as at fair value through profit or loss Finance costs Interest income Share of the profit of associates and joint ventures Loss on disposal of property, plant and equipment Impairment loss recognized on non-financial assets Others Changes in operating assets and liabilities Notes receivable Notes receivable from related parties Accounts receivable Accounts receivable from related parties Other receivables Inventories Other current assets Notes payable Accounts payable Other payables Other current liabilities Other non-current liabilities Cash generated from operations Interest received Dividends received Interest paid Income taxes paid Net cash generated from operating activities	For the Six Months Ended June 30	For the Six Months Ended June 30	For the Six Months Ended June 30
	( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( (	2021 $ 2,411,823 1,045,153 13,853 7,473 ) 3,676 ) ( 143,420 50,253 ) ( 226,628 ) ( 4,919 110,636 131 ) 519,794 ) 1,689 ) 1,288,103 ) 16,729 ) 28,959 ) 2,157,941 ) ( 170,951 ) 205,385 833,757 ( 64,496 ) ( 23,867 109,438) ( 146,552 47,174 56,280 132,774 ) ( 529,771) ( 412,539)	2020 $ 1,052,805 961,706 30,706 84,745 9,169 ) 206,008 53,558 ) 115,028 ) 5,768 54,582 53 839,091 19,676 93,866 50,980 67,883 215,316 ) 73,545 39,604 780,550 ) 197,497 ) 149,594 15,715) 2,343,779 50,489 - 208,692 ) 203,829) 1,981,747

(Continued)

Eternal Materials Co., Ltd. and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) (Reviewed, Not Audited)

CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of financial assets at fair value through other comprehensive income Purchase of financial assets at fair value through profit or loss Proceeds from disposal of financial assets at fair value through profit or loss Payments for property, plant and equipment Proceeds from disposal of property, plant and equipment Decrease in other receivables from related parties Payments for intangible assets Decrease in long-term lease receivables Increase in other financial assets Decrease (increase) in other non-current assets Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase in short-term borrowings Proceeds from long-term borrowings Repayments of long-term borrowings Increase (decrease) in guarantee deposits received Repayment of the principal portion of lease liabilities Acquisition of additional interests in subsidiary Decrease in non-controlling interests Net cash used in financing activities EFFECTS OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD Reconciliation of the amounts in the consolidated statements of cash flows with the equivalent items reported in the consolidated balance sheets as of June 30, 2021 and 2020: Cash and cash equivalents in the consolidated balance sheets Cash and cash equivalents of the non-current assets classified as held for sale Cash and cash equivalents in the consolidated statements of cash flows	For the Six Months Ended June 30	For the Six Months Ended June 30	For the Six Months Ended June 30
	( ( ( ( ( ( ( ( ( ( (	2021 $ 84,697 1,507,103 ) ( 845,326 856,927 ) ( 10,450 4,114 7,125 ) ( 20,875 134,069 ) 15,499 ( 1,524,263) ( 2,142,411 6,992,075 7,504,606 ) ( 600 ) 43,795 ) ( - ( 23,090) ( 1,562,395 ( 222,905) ( 597,312 ) 6,108,294 $ 5,510,982 $ 5,510,982 - $ 5,510,982	2020 $ - 747,555 ) 330,603 726,724 ) 1,472 6,840 77,747 ) 29,845 - 14,399) 1,197,665) 30,834 6,823,743 6,921,121 ) 3,648 24,578 ) 27,729 ) 7,890) 123,093) 320,268) 340,721 6,009,646 $ 6,350,367 $ 6,161,950 188,417 $ 6,350,367 (Concluded)

The accompanying notes are an integral part of the consolidated financial statements. (With Deloitte & Touche auditors’ review report dated August 6, 2021)

Eternal Materials Co., Ltd. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2021 AND 2020 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise) (Reviewed, Not Audited)

1. GENERAL INFORMATION

Eternal Materials Co., Ltd. (the “Company”) was established in December 1964. The Company is mainly engaged in the research, manufacturing, processing, selling and trading of diversified industrial synthetic resins, epoxy resin, coating, molding compound, copper clad laminates, film materials, photoresist materials, electronic chemical materials, composite materials and bio-medical testing materials.

The Company’s shares have been listed on the Taiwan Stock Exchange (TWSE) since March 1994.

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

2. APPROVAL OF FINANCIAL STATEMENTS

The consolidated financial statements were reported by the Company’s board of directors and authorized for issue on August 6, 2021.

3. APPLICATION OF NEW AND AMENDED STANDARDS AND INTERPRETATIONS

a. The application of the amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC), (collectively, the “IFRSs”) endorsed and issued into effect by the Financial Supervisory Commission (FSC).

The application of the amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRSs endorsed and issued into effect by the FSC did not have material impact on the Company and its subsidiaries’ accounting policies.

10 -
b. New IFRSs in issue but not yet endorsed and issued into effect by the IASB

Effective Date New IFRSs Announced by IASB (Note 1) “Annual Improvements to IFRS Standards 2018-2020” January 1, 2022 (Note 2) Amendments to IFRS 3 “Reference to the Conceptual Framework” January 1, 2022 (Note 3) Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets To be determined by IASB between an Investor and its Associate or Joint Venture” IFRS 17 “Insurance Contracts” January 1, 2023 Amendments to IFRS 17 January 1, 2023 Amendments to IAS 1 “Classification of Liabilities as Current or January 1, 2023 Non-current” Amendments to IAS 1 “Disclosure of Accounting Policies” January 1, 2023 (Note 6) Amendments to IAS 8 “Definition of Accounting Estimates” January 1, 2023 (Note 7) Amendments to IAS 12 “Deferred Tax related to Assets and January 1, 2023 (Note 8) Liabilities arising from a Single Transaction” Amendments to IAS 16 “Property, Plant and Equipment - Proceeds January 1, 2022 (Note 4) before Intended Use” Amendments to IAS 37 “Onerous Contracts - Cost of Fulfilling a January 1, 2022 (Note 5) Contract”

Note 1: Unless stated otherwise, the above New IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.
Note 2: The amendments to IFRS 9 will be applied prospectively to modifications and exchanges of financial liabilities that occur on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IAS 41 “Agriculture” will be applied prospectively to the fair value measurements on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IFRS 1 “First-time Adoptions of IFRSs” will be applied retrospectively for annual reporting periods beginning on or after January 1, 2022.
Note 3: The amendments are applicable to business combinations for which the acquisition date is on or after the beginning of the annual reporting period beginning on or after January 1, 2022.
Note 4: The amendments are applicable to property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after January 1, 2021.
Note 5: The amendments are applicable to contracts for which the entity has not yet fulfilled all its obligations on January 1, 2022.
Note 6: The amendments will be applied prospectively for annual reporting periods beginning on or after January 1, 2023.
Note 7: The amendments are applicable to changes in accounting estimates and changes in accounting policies that occur on or after the beginning of the annual reporting period beginning on or after January 1, 2023.
Note 8: Except that deferred taxes will be recognized on January 1, 2022 for temporary differences associated with leases and decommissioning obligations, the amendments will be applied prospectively to transactions that occur on or after January 1, 2022.

As of the date the consolidated financial statements were reported to the board of directors for issue, the Company and its subsidiaries are continuously assessing the possible impact that the application of other standards and interpretations will have on the Company and its subsidiaries’ financial position and financial performance and will disclose the relevant impact when the assessment is completed.

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4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Statement of compliance

The interim consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IAS 34 “Interim Financial Reporting” as endorsed and issued into effect by the FSC. Disclosure information included in these interim consolidated financial statements is less than the disclosure information required in a complete set of annual consolidated financial statements..

b. Basis of consolidation

The detailed information of subsidiaries (including the percentages of ownership and main businesses) is provided in Note 13 and Tables 8 and 9.

c. Other significant accounting policies

Except for the following, refer to the summary of significant accounting policies and basis of preparation in the consolidated financial statements for the year ended December 31,2020.

1)Retirement Benefits.

Pension cost for an interim period is calculated on a year-to-date basis by using the actuarially determined pension cost rate at the end of the prior financial year, adjusted for significant market fluctuations since that time and for significant plan amendments, settlements, or other significant one-off events.

2)Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax. Interim period income taxes are assessed on an annual basis and calculated on an interim period’s pre-tax income by applying to the tax rate that would be applicable to expected total annual earnings.

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

The same critical accounting judgments and key sources of estimation uncertainty of consolidated financial statements have been followed in these consolidated financial statements as those applied in the preparation of the consolidated financial statements of the year ended December 31,2020.

6. CASH AND CASH EQUIVALENTS

Cash on hand Checking accounts and demand deposits Cash equivalents (investments with original maturities of three months or less) Time deposits		June 30, 2021 $ 19,235 2,803,501 2,688,246 $ 5,510,982		December 31, 2020		June 30, 2020
				$ 11,413 2,841,405 3,255,476 $ 6,108,294		$ 12,132 2,728,465 3,421,353 $ 6,161,950

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7. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets－current Hybrid financial assets Structured deposits Financial assets－non-current Non-derivative financial assets Mutual fund Pacven Walden Ventures V, L.P.		June 30, 2021 $ 660,047 $ 10,175	December 31, 2020 $ - $ 21,301		June 30, 2020
					$ 416,699 $ 17,495

8. NOTES, ACCOUNTS RECEIVABLE AND OTHER RECEIVABLES

Notes receivable Notes receivable from related parties Accounts receivable Less: Allowance for loss Accounts receivable from related parties Less: Allowance for loss Other receivables Less: Allowance for loss		June 30, 2021 $ 5,658,032 $ 46,428 $ 13,450,964 260,834) $ 13,190,130 $ 236,403 289) $ 236,114 $ 775,194 29,800) $ 745,394	December 31, 2020 $ 5,138,238 $ 44,739 $ 12,410,546 ( 288,973) $ 12,121,573 $ 219,674 ( 1,037) $ 218,637 $ 806,213 ( 15,145) $ 791,068		June 30, 2020
	( ( (		( ( (	( ( (	$ 3,650,108 $ 37,362 $ 10,509,001 253,854) $ 10,255,147 $ 180,800 16,557) $ 164,243 $ 909,241 15,145) $ 894,096

a. Notes receivable and accounts receivable

The notes and accounts receivable of the Company and its subsidiaries are measured at amortized cost. For the related credit management policies, refer to Note 30.

The loss allowance of the Company and its subsidiaries’ accounts receivable is recognized by using lifetime expected credit losses. The lifetime expected credit losses on accounts receivable are estimated using a provision matrix approach considering the past collection experience of the customers and an increase in late payments over the credit period.

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The following table details the loss allowance of notes and accounts receivable based on the Company and its subsidiaries’ provision matrix.

June 30, 2021

Gross carrying amount Loss allowance (lifetime ECL) Amortized cost December 31, 2020 Gross carrying amount Loss allowance (lifetime ECL) Amortized cost June 30, 2020 Gross carrying amount Loss allowance (lifetime ECL) Amortized cost	Not Past Due $ 17,770,766 (13,531) $ 17,757,235 Not Past Due $ 15,766,467 (15,613) $ 15,750,854 Not Past Due $ 12,079,373 (13,296) $ 12,066,077	0 to 30 Days 31 to 90 Days $ 957,888 $ 397,603 (8,596) (13,815) $ 949,292 $ 383,788 0 to 30 Days 31 to 90 Days $ 1,335,162 $ 423,402 (9,468) (19,551) $ 1,325,694 $ 403,851 0 to 30 Days 31 to 90 Days $ 1,392,344 $ 552,772 (12,814) (36,451) $ 1,379,530 $ 516,321	91 to 180 Days $ 43,843 (9,942) $ 33,901 91 to 180 Days $ 87,207 (50,270) $ 36,937 91 to 180 Days $ 159,702 (40,143) $ 119,559	Over 180 Days $ 221,727 (215,239) $ 6,488 Over 180 Days $ 200,959 (195,108) $ 5,851 Over 180 Days $ 193,080 (167,707) $ 25,373	Total $ 19,391,827 (261,123) $ 19,130,704 Total $ 17,813,197 (290,010) $ 17,523,187 Total $ 14,377,271 (270,411) $ 14,106,860

The movements of the loss allowance for doubtful accounts receivable were as follows:

Balance, beginning of the period Recognized (reversed) Written-off Effects of foreign currency exchange differences Balance, end of the period		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 290,010 (22,128) (2,621) (4,138) $ 261,123	2020 $ 221,717 69,600 (16,397) (4,509) $ 270,411

b. Other receivables

The Company and its subsidiaries’ allowance for loss are based on historical experience and current financial circumstances. The Company and its subsidiaries assessed that some of the other receivables could not be recovered. For the six months ended June 30, 2021, the year ended December 31 ,2020 and for the six months ended June 30,2020, the Company recognized loss allowance of NT$29,800 thousand, NT$15,145 thousand and NT$15,145 thousand, respectively.

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9. INVENTORIES

Raw materials Supplies Finished goods Inventory in transit		June 30, 2021 $ 4,013,495 156,048 5,012,374 358,008 $ 9,539,925	December 31, 2020 $ 2,976,856 165,834 4,098,371 251,559 $ 7,492,620		June 30, 2020
					$ 2,722,930 150,455 4,253,146 241,693 $ 7,368,224

The cost of inventories recognized as operating costs for the three months and the six months ended June 30, 2021 and 2020 was NT$10,315,258 thousand, NT$6,827,511 thousand, NT$18,955,101 thousand and NT$12,835,076 thousand, respectively, including loss on inventory NT$66,223 thousand, NT$30,321 thousand, NT$110,636 thousand and NT$28,797 thousand, respectively.

10. NON-CURRENT ASSETS AND LIABILITIES CLASSIFIED AS HELD FOR SALE

In May, 2020, the Company’ board of directors resolved to dispose 100% ownership of the Eternal Photoelectric Material Industry (Kunshan) Co., Ltd, which held by Eternal (China) Investment Co., Ltd and Eternal Electronic Material (Guangzhou) Co., Ltd. The disposal was complete as of August,2020. The assets and liabilities attributable to that production line were reclassified as non-current assets and liabilities held for sale, and were presented separately in the consolidated balance sheets on June 30,2020. The major classes of the assets and liabilities attributable to that production line were classified as held for sale were as follows:

Cash and cash equivalents Other receivables Other current assets - other Property, plant and equipment Right-of-use assets Non-current assets held for sale Liabilities directly associated with non-current assets classified as held for sale – accounts payable and other payables		June 30, 2020
		$ 188,417 109 8 34,345 3,800 $ 226,679 $ 1,153

The net proceeds from the disposal were expected to exceed the carrying amount of the related net assets, and accordingly, no impairment loss was recognized.

11. OTHER FINANCIAL ASSETS - CURRENT

Time deposits with original maturities of more than three months		June 30, 2021 $ 192,844	December 31, 2020 $ 61,860		June 30, 2020
					$ 66,950

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12. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME - NON-CURRENT

Domestic investments Listed shares President Securities Corp. Unlisted shares Universal Venture Capital Investment Corp. Universal Development & Investment Capital I Co., Ltd. Der Yang Biotechnology Venture Capital Co., Ltd. Foreign investments Listed shares TBG Diagnostics Limited (TBG stocks) Unlisted shares Grace THW Holdings Limited		June 30, 2021 $ 858,232 40,370 - 3,712 902,314 101,015 159,370 260,385 $ 1,162,699	December 31, 2020 $ 642,849 32,602 - 3,769 679,220 185,302 151,784 337,086 $ 1,016,306		June 30, 2020
					$ 467,545 30,984 20,271 5,350 524,150 185,565 120,929 306,494 $ 830,644

These investments in equity instruments are not held for trading. Instead, they are held for medium to long-term strategic purposes. Accordingly, the management elected to designate these investments in equity instruments as at FVTOCI as they believe that recognizing short-term fluctuations in these investments’ fair value in profit or loss would not be consistent with the Company and its subsidiaries’ strategy of holding these investments for long-term purposes.

13. SUBSIDIARIES

a. Subsidiaries included in the consolidated financial statements were as follows:

Investor	Investee	Main Businesses	Percentage of Ownership (%)	Percentage of Ownership (%)	Percentage of Ownership (%)	Additional Descriptions
			June 30, 2021	December 31, 2020	June 30, 2020
The Company	Eternal Holdings Inc. Eternal Global (BVI) Co., Ltd. Mixville Holdings Inc. CHOU-KOU Materials Co., Ltd. Nikko-Materials Co., Ltd. Eternal Electronic Material (Thailand) Co., Ltd. New E Materials Co., Ltd. Eternal Materials (Malaysia) Sdn. Bhd.	International investment International investment International investment Selling, trading and providing services of resins material, electronic material and other related products Manufacturing and selling of dry film photoresist and vacuum laminator Trading services, cutting and selling of dry film photoresist Researching, developing, manufacturing and selling of photoelectric, semiconductor process related electronic chemical materials and equipment spare parts Manufacturing, selling, trading and providing service of resins material related products	100 100 100 100 100 75 62.80 -	100 100 100 100 100 75 62.80 -	100 100 100 100 100 75 62.80 90	1) 1) 1) 1) 1) 1) 1) 1) and 4) (Continued)

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Investor	Investee	Main Businesses	Percentage of Ownership (%)	Percentage of Ownership (%)	Percentage of Ownership (%)	(Concluded) Additional Descriptions 1) 1) 1) 1) 1) and 2) 1) and 3) 1) 1) 1) and 4) 1) 1) 1) 1) 1) 1) 1) 1) 1) 1) and Note10 1) 1) and 5) 1) and Note10 1) and Note27
			June 30, 2021	December 31, 2020	June 30 , 2020
Eternal Global (BVI) Co., Ltd. Eternal Holdings Inc. Eternal International (BVI) Co., Ltd. E-Chem Corp. Eternal Nanyang Investment Co., Ltd. Mixville Holdings Inc. High Expectation Limited Eternal (China) Investment Co., Ltd. Eternal Electronic Material (Guangzhou) Co., Ltd. Nikko-Materials Co., Ltd.	Elga Europe S.r.l. Eternal Chemical (China) Co., Ltd Changhe International Trading (GZFTZ) Co., Ltd. Eternal International (BVI) Co., Ltd. E-Chem Corp. Eternal Nanyang Investment Co., Ltd. PT Eternal Materials Indonesia Eternal Technology Corporation Eternal (China) Investment Co., Ltd. Eternal Specialty Materials (Zhuhai) Co., Ltd. Eternal Materials (Malaysia) Sdn. Bhd. High Expectation Limited Eternal Materials (Guangdong) Co., Ltd. Eternal Optical Material (Suzhou) Co., Ltd. Eternal Photoelectric Material Industry (Yingkou) Co., Ltd. Eternal Synthetic Resins (Changshu) Co., Ltd. Eternal Chemical (Chengdu) Co., Ltd. Eternal Electronic (Suzhou) Co., Ltd. Eternal Electronic Material (Guangzhou) Co., Ltd. Eternal Photo Electronic Materials (Guangzhou) Co., Ltd. Eternal Sun A. (Suzhou) Co., Ltd. Eternal Chemical (Tianjin) Co., Ltd. Eternal Specialty Materials (Suzhou) Co., Ltd. Eternal Photoelectric Material Industry (Kunshan) Co., Ltd Elga Europe S.r.l. Eternal Materials (Changzhou) Co., Ltd. Eternal Photoelectric Material Industry (Kunshan) Co., Ltd. Nikko Mechanics Co., Ltd.	Manufacturing, selling, agency and processing of electronic chemical products Manufacturing and selling of resins material and processing products International trading, commercial trading, entrepot trading, products displayed, bonded warehousing and business consulting services International investment International investment International investment Selling, trading of chemical Manufacturing and selling of photoresist Managing, investing consulting services, researching, leasing, manufacturing and selling of resins material and photoelectric chemical materials Manufacturing and selling of acrylic resin and methacrylic acid Manufacturing, selling, trading and providing services of resins material related products International investment Manufacturing and selling of adhesives, resins material and processing of products Manufacturing and selling of optical film Researching, developing and manufacturing of photoresist dry film, liquid photo imaginable solder masks and printed circuit board related materials Manufacturing and selling of unsaturated polyester resin Researching and developing resins material and products Researching, developing, and manufacturing of dry film photoresist and dry film solder mask which used in electronic materials, researching resin materials and selling, providing after sales service of self-produced products Coating, slitting, cutting, processing, and selling of photoresist Researching, developing, manufacturing and selling of electronic high-tech chemical and related products Researching, developing, and manufacturing of optical protective film which used in display, and selling, providing after sales service of self-produced products Manufacturing and selling of adhesives, resins material and processing products Researching and developing chemical products, and selling, providing technical services of self-produced products Cutting and processing of dry film photoresist and selling self-produced products Manufacturing, selling, agency and processing of electronic chemical products Selling of fluorocarbon resin and polyester resin products Cutting and processing of dry film photoresist and selling self-produced products Designing, manufacturing, selling of industrial machinery and machine tool	72.68 100 100 100 100 90 67 100 100 90 100 100 100 100 100 100 100 100 100 100 60 100 100 - 22.32 - - 100	72.68 100 100 100 100 90 - 100 100 90 100 100 100 100 100 100 100 100 100 100 60 100 100 - 22.32 - - 100	72.68 100 100 100 100 - - 100 100 90 - 100 100 100 100 100 100 100 100 100 60 100 100 84.06 22.32 100 15.94 100

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1) This is an immaterial subsidiary for which the consolidated financial statements are not reviewed by the Company’s independent auditors.
2) The company was established as a new subsidiary in September 2020.
3) The company was established as a new subsidiary in January 2021.
4) The Company had reorganization in September 2020 to transfer the equity of subsidiary Eternal Materials (Malayisa) Sdn. Bhd. to subsidiary Eternal Nanyang Investment Co., Ltd.
5) The divestment was resolved by the board of directors in December 2019, and the liquidation was completed in July 2020.
b. The Company and its subsidiaries did not have any subsidiary with material non-controlling interests.

14. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

			June 30,			December	December	31,			June 30,
			2021				2020				2020
Investments accounted for using the equity method
Investments in associates		$	2,515,965			$	2,306,731			$	2,379,968
Credit balance of investments accounted for using the equity
method(recorded as other non-current liabilities)
Investments in associates	( $		20,988 )		( $		14,095 )		(	$	9,299 )
Investments in joint ventures				-				-	(		30,972)
	($		20,988)		($		14,095)		(	$	40,271)

a. Investments accounted for using the equity method

Investments in associates

Associates that are not individually material		June 30, 2021		December 31, 2020		June 30, 2020
		$ 2,515,965		$ 2,306,731		$ 2,379,968

Information about associates that are not individually material was as follows:

The Company and its subsidiaries’ share of Net profit for the period Other comprehensive income for the period Total comprehensive income for the period		For the Three Months Ended June 30 2021 2020 $ 123,770 $ 69,675 ( 15,344) ( 24,119) $ 108,426 $ 45,556		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 123,770 ( 15,344) $ 108,426		2021 $ 233,800 ( 24,566) $ 209,234	2020 $ 127,464 ( 34,798) $ 92,666

Fair values (Level 1) of investments in associates with available published price quotation are summarized as follows:

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Daxin Materials Corporation		June 30, 2021 $ 2,047,241		December 31, 2020 $ 2,005,078		June 30, 2020
						$ 2,103,458

The Company and its subsidiaries held 50% ownership of DSM Eternal Resins (Kunshan) Co., Ltd., but had no control over it. Therefore, DSM Eternal Resins (Kunshan) Co., Ltd. was not included in the consolidated financial statements.

b. Credit balance of investments accounted for using the equity method

Associates that are not individually material Joint ventures that are not individually material	June 30, 2021 ( $ 20,988 ) - ($ 20,988)	December 31, 2020 ( $ 14,095 ) - ($ 14,095)	June 30, 2020
			( $ 9,299 ) (30,972) ($ 40,271)

Information about associates and joint ventures that are not individually material was as follows:

The Company and its subsidiaries’ share of Net loss for the period Other comprehensive income for the period Total comprehensive loss for the period		For the Three Months Ended June 30 2021 2020 ($ 4,690) ($ 4,371) 157 425 ($ 4,533) ($ 3,946)	For the Three Months Ended June 30 2021 2020 ($ 4,690) ($ 4,371) 157 425 ($ 4,533) ($ 3,946)		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 ($ 4,690) 157 ($ 4,533)			2021 ($ 7,172) 279 ($ 6,893)	2020 ($ 12,436) 760 ($ 11,676)

The Company and its subsidiaries’ share of losses of the associates and joint ventures exceeded their interests in those associates and joint ventures. After reducing their equity to zero, the Company and its subsidiaries recognized additional losses only to the extent that they have incurred legal obligations or constructive obligations, or made payments on behalf of those associates and joint ventures and transferred them to the credit balance of investments accounted for using the equity method (recorded as other non-current liabilities).

Eternal (China) Investment Co., Ltd. held a 51% interest in Hangzhou Yongxinyang Photoelectric Materials Co., Ltd. However, according to the joint venture agreement, it is judged that the subsidiary company is under joint control of the company. And accounted it for using the equity method.

For the six months ended June 30, 2021 and 2020, the Company and its subsidiaries’ investments accounted for using the equity method (including credit balance) are based on the associates’ financial statements which have not been reviewed for the same period.

Refer to Tables 8 and 9 for the main businesses and countries of incorporation of the associates and joint ventures.

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15. PROPERTY, PLANT AND EQUIPMENT

For the Six Months Ended June 30, 2021

Carrying amount at January 1, 2021 Cost Balance at January 1, 2021 Additions Disposals Transferred from investment properties Effect of foreign currency exchange difference Balance at June 30, 2021 Accumulated depreciation and impairment Balance at January 1, 2021 Depreciation Disposals Transferred from investment properties Effect of foreign currency exchange difference Balance at June 30, 2021 Carrying amount at June 30, 2021	Land $ 2,680,444 $ 2,680,444 2,979 - - (10,447) $ 2,672,976 $ - - - - - $ - $ 2,672,976	Buildings $ 5,362,540 $ 11,323,614 201,945 (30,705 ) 15,710 (163,385) $ 11,347,179 $ 5,961,074 275,323 (28,306 ) 713 (71,193) $ 6,137,611 $ 5,209,568	Machinery and Equipment $ 6,273,237 $ 21,620,157 523,997 (73,795 ) - (282,419) $ 21,787,940 $ 15,346,920 548,814 (65,466) - (174,778) $ 15,655,490 $ 6,132,450	Storage Equipment $ 656,418 $ 1,559,720 37,668 (11,734 ) - (19,190) $ 1,566,464 $ 903,302 44,141 (11,179 ) - (7,743) $ 928,521 $ 637,943	Examination Equipment $ 541,695 $ 1,644,996 67,801 (14,271 ) - (8,473) $ 1,690,053 $ 1,103,301 61,028 (13,021) - (5,002) $ 1,146,306 $ 543,747	Other Equipment E $ 358,188 $ 902,637 44,250 (10,025 ) - (19,822) $ 917,040 $ 544,449 40,290 (7,189 ) - (12,945) $ 564,605 $ 352,435	Construction in Progress and quipment to be Inspected $ 750,528 $ 750,528 (134,395 ) - - (6,903) $ 609,230 $ - - - - - $ - $ 609,230	Total $ 16,623,050 $ 40,482,096 744,245 (140,530 ) 15,710 (510,639) $ 40,590,882 $ 23,859,046 969,596 (125,161 ) 713 (271,661) $ 24,432,533 $ 16,158,349

For the Six Months Ended June 30, 2020

Carrying amount at January 1, 2020 Cost Balance at January 1, 2020 Additions Disposals Transferred to investment properties Impairment loss Reclassification Reclassified as held for sale Effect of foreign currency exchange difference Balance at June 30, 2020 Accumulated depreciation and impairment Balance at January 1, 2020 Depreciation Disposals Transferred to investment properties Impairment loss Reclassification Reclassified as held for sale Effect of foreign currency exchange difference Balance at June 30, 2020 Carrying amount at June 30, 2020	Land $ 2,713,753 $ 2,713,753 1,190 - (43,451 ) - - - (1,134) $ 2,670,358 $ - - - - - - - - $ - $ 2,670,358	Buildings $ 5,715,567 $ 11,180,745 320,707 (106,432 ) (169,000 ) - 9,651 (68,843 ) (207,525) $ 10,959,303 $ 5,465,178 262,329 (6,912 ) (16,718 ) 3,589 8,137 (45,093 ) (75,137) $ 5,595,373 $ 5,363,930	Machinery and Equipment $ 6,297,691 $ 20,587,401 467,803 (46,191 ) - - 3,521 (33,596 ) (326,616) $ 20,652,322 $ 14,289,710 519,741 (40,553 ) - 20,135 59 (25,576 ) (180,381) $ 14,583,135 $ 6,069,187	Storage Equipment $ 667,141 $ 1,500,221 26,081 (2,343 ) - - - (368 ) (26,341) $ 1,497,250 $ 833,080 34,996 (2,036 ) - 37 - (331) (9,726) $ 856,020 $ 641,230	Examination Equipment $ 472,136 $ 1,475,283 80,513 (5,189 ) - - - (26) (10,846) $ 1,539,735 $ 1,003,147 54,007 (5,074 ) - - - (23 ) (6,170) $ 1,045,887 $ 493,848	Other Equipment E $ 363,704 $ 862,673 56,471 (22,935 ) - - (13,172 ) (13,206 ) (17,345) $ 852,486 $ 498,969 34,611 (6,332 ) - 1,629 (8,196) (10,671) (9,100) $ 500,910 $ 351,576	Construction in Progress and quipment to be Inspected $ 1,205,554 $ 1,205,554 (301,241 ) (1,244 ) - (327 ) - - (24,433) $ 878,309 $ - - - - - - - - $ - $ 878,309	Total $ 17,435,546 $ 39,525,630 651,524 (184,334 ) (212,451 ) (327 ) - (116,039 ) (614,240) $ 39,049,763 $ 22,090,084 905,684 (60,907 ) (16,718 ) 25,390 - (81,694 ) (280,514) $ 22,581,325 $ 16,468,438

Considering future economic benefits, the plant, machinery and other equipment of Nikko-Materials Co., Ltd. which were expected to use for production have been evaluated the present value of the cash flow generated from operations at a discount rate of 5.95% as a recoverable amount. According to the assessment, the recoverable amount was less than the carrying amount. For the year 2020, the impairment loss of $25,785 thousand (including the impairment loss of intangible assets of $68 thousand) was recognized in the current year (recorded as other gains and losses).

The above items of property, plant and equipment are depreciated on a straight-line basis over the following useful lives:

Buildings 5-50 years Machinery and equipment 3-20 years Storage equipment 5-20 years Examination equipment 5-15 years Other equipment 3-12 years

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Refer to Note 32 for the amounts of property, plant and equipment pledged by the Company and its subsidiaries as collateral for bank borrowings.

Land (including those recorded as investment properties) held by the Company was revalued in 1980, 1990, 1997 and 2004, and as of June 30, 2021, December 31, 2020 and June 30, 2020, the revaluation increments of the land was $1,977,218 thousand.

16. LEASE ARRANGEMENTS

a. Right-of-use assets

Carrying amounts Land Buildings Machinery Storage equipment Other equipment		June 30, 2021 $ 839,303 175,716 83,003 2,837 20,687 $ 1,121,546		December 31, 2020 $ 871,970 214,559 83,674 957 24,375 $ 1,195,535		June 30, 2020
						$ 846,578 109,716 23,656 - 23,453 $ 1,003,403

For the Three Months Ended June 30	For the Three Months Ended June 30		For the Six Month Ended June 30	For the Six Month Ended June 30
		$	2021 2020 25,167 $ 45,343 For the Six Months Ended June 30

2021 $ 5,338 14,448 4,007 120 2,376 $ 26,289	2020 $ 5,261 9,060 2,092 - 2,479 $ 18,892		2021 $ 10,758 29,442 8,370 171 5,022 $ 53,763	2020 $ 10,663 20,367 4,154 - 4,954 $ 40,138

In addition, part of the land use rights for land located in mainland China is subleased under operating leases, and the relevant right-of-use assets are recorded as investment properties, refer to Note 17 for the details.

b. Lease liabilities

Carrying amounts Current Non-current		June 30, 2021 $ 77,098 $ 222,912	December 31, 2020 $ 81,002 $ 262,898		June 30, 2020
					$ 55,757 $ 109,019

Range of discount rate (%) for lease liabilities was as follows:

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Land Buildings Machinery Storage equipment Other equipment	June 30, 2021 0.93～6.66 0.69～5.04 2.70～3.71 1.66～1.67 0.86～5.35	December 31, 2020 0.93～6.66 0.79～9.00 2.70 1.67 0.86～5.35	June 30, 2020
			0.93～6.66 0.86～5.35 1.67～4.40 - 0.86～5.35

c. Material lease activities and terms

Major lease arrangements of the Company’s subsidiaries are land use rights contracts with lease terms of 50 to 56 years.

d. Other lease information

For the Three Months Ended June 30		For the Six Months Ended June 30
2020 $ 6,069

	2021 $ 61,437	2020 $ 38,669

17. INVESTMENT PROPERTIES

For the Six Months Ended June 30, 2021

Carrying amount at January 1, 2021 Cost Balance at January 1, 2021 Transferred to property, plant and equipment Transferred to right-of-use assets Effects of foreign currency exchange differences Balance at June 30, 2021	Land $ 59,827 $ 59,827 - - (3,746) $ 56,081	Buildings $ 1,227,604 $ 1,407,484 (15,710) - (25,611) $ 1,366,163	Right-of-use Assets $ 69,390 $ 73,714 - (847) (1,129) $ 71,738	Total $ 1,356,821 $ 1,541,025 (15,710) (847) (30,486) $ 1,493,982 (Continued)

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Land Accumulated depreciation and impairment Balance at January 1, 2021 $ - Depreciation - Transferred to property, plant and equipment - Transferred to right-of-use assets - Effects of foreign currency exchange differences - Balance at June 30, 2021 $ - Carrying amount at June 30, 2021 $ 56,081 For the Six Months Ended June 30, 2020 Land Carrying amount at January 1, 2020 $ 17,057 Cost Balance at January 1, 2020 $ 17,057 Transferred from property, plant and equipment 43,451 Effects of foreign currency exchange differences (867) Balance at June 30, 2020 $ 59,641 Accumulated depreciation and impairment Balance at January 1, 2020 $ - Depreciation - Transferred from property, plant and equipment - Effects of foreign currency exchange differences - Balance at June 30, 2020 $ - Carrying amount at June 30, 2020 $ 59,641	Buildings $ 179,880 20,731 (713) - (4,113) $ 195,785 $ 1,170,378 Buildings $ 1,024,946 $ 1,147,244 169,000 (32,383) $ 1,283,861 $ 122,298 14,831 16,718 (3,802) $ 150,045 $ 1,133,816	Right-of-use Assets $ 4,324 1,063 - (50) (76) $ 5,261 $ 66,477 Right-of-use Assets $ 70,374 $ 72,501 - (1,919) $ 70,582 $ 2,127 1,053 - (74) $ 3,106 $ 67,476	Total $ 184,204 21,794 (713) (50) (4,189)
			$ 201,046
			$ 1,292,936
			Total $ 1,112,377
Carrying amount at January 1, 2020 Cost Balance at January 1, 2020 Transferred from property, plant and equipment Effects of foreign currency exchange differences Balance at June 30, 2020 Accumulated depreciation and impairment Balance at January 1, 2020 Depreciation Transferred from property, plant and equipment Effects of foreign currency exchange differences Balance at June 30, 2020 Carrying amount at June 30, 2020
			$ 1,236,802 212,451 (35,169)
			$ 1,414,084
			$ 124,425 15,884 16,718 (3,876)
			$ 153,151
			$ 1,260,933

(Concluded)

The investment properties were leased for terms of 2 to 15 years.

The maturity analysis of lease payments receivable under operating leases of investment properties is as follows:

23 -

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 onwards		June 30, 2021 $ 257,880 162,369 136,455 86,808 88,045 340,136 $ 1,071,693		December 31, 2020		June 30, 2020
				$ 259,117 221,217 136,481 112,848 84,540 390,794 $ 1,204,997		$ 246,604 244,106 151,363 128,083 83,231 417,969 $ 1,271,356

The fair value of main part of the subsidiaries’ right-of-use assets and buildings located in China was evaluated by independent appraisers, and the rest which was reference to market evidence of transaction prices for similar properties and using income approach was evaluated by the management of the Company. The Company measured the fair value by using Level 3. The fair values were as follows.

Fair value		June 30, 2021 $ 2,962,570		December 31, 2020		June 30, 2020
				$ 3,027,121		$ 2,988,890

The following items of investment properties are depreciated on a straight-line basis over their useful lives as follow:

Buildings	20-50	years
Right-of-use assets	34-36	years

Operating income and expenses directly related to investment properties

Rental income Operating expenses directly related to investment properties		For the Three Months Ended June 30 2021 2020 $ 72,685 $ 63,069 $ 30,958 $ 23,638	For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 72,685 $ 30,958	2021 $ 142,622 $ 57,896	2020 $ 113,758 $ 45,459

18. INTANGIBLE ASSETS

For the Six Months Ended June 30, 2021

Carrying amount at January 1, 2021 Cost Balance at January 1, 2021 Additions Disposals Effects of foreign currency exchange differences Balance at June 30, 2021	Goodwill $ 38,892 $ 75,892 - - (3,406) $ 72,486	Expertise Customer Relationships $ - $ - $ 127,513 $ 104,038 - - - - - - $ 127,513 $ 104,038	Computer Software $ 223,655 $ 239,226 6,655 - - $ 245,881	Others Total $ 19,688 $ 282,235 $ 143,163 $ 689,832 470 7,125 (14,281 ) (14,281 ) (19,040) (22,446) $ 110,312 $ 660,230 (Continued)

24 -

Accumulated amortization and impairment Balance at January 1, 2021 Amortization expense Disposals Effects of foreign currency exchange differences Balance at June 30, 2021 Carrying amount at June 30, 2021	Goodwill $ 37,000 - - - $ 37,000 $ 35,486	Expertise Customer Relationships $ 127,513 $ 104,038 - - - - - - $ 127,513 $ 104,038 $ - $ -	Computer Software $ 15,571 7,593 - - $ 23,164 $ 222,717	Others Total $ 123,475 $ 407,597 4,797 12,390 (14,281 ) (14,281 ) (18,557 ) (18,557 ) $ 95,434 $ 387,149 $ 14,878 $ 273,081 (Concluded)

For the Six Months Ended June 30, 2020

Carrying amount at January 1, 2020 Cost Balance at January 1, 2020 Additions Disposals Effects of foreign currency exchange differences Balance at June 30, 2020 Accumulated amortization and impairment Balance at January 1, 2020 Amortization expense Impairment loss Disposals Effects of foreign currency exchange differences Balance at June 30, 2020 Carrying amount at June 30, 2020	Goodwill $ 75,850 $ 75,850 - - (127) $ 75,723 $ - - - - - $ - $ 75,723	Expertise Customer Relationships $ 87,370 $ 61,927 $ 127,513 $ 104,038 - - - - - - $ 127,513 $ 104,038 $ 40,143 $ 42,111 7,084 7,431 - - - - - - $ 47,227 $ 49,542 $ 80,286 $ 54,496	Computer Software $ 78,254 $ 82,736 72,690 - - $ 155,426 $ 4,482 3,361 - - - $ 7,843 $ 147,583	Others $ 40,381 $ 128,722 5,057 (150 ) (3,424) $ 130,205 $ 88,341 11,809 68 (150 ) (3,027) $ 97,041 $ 33,164	Total $ 343,782 $ 518,859 77,747 (150 ) (3,551) $ 592,905 $ 175,077 29,685 68 (150) (3,027) $ 201,653 $ 391,252

The Company and its subsidiaries will test the recoverable amount of intangible assets at the end of the annual financial reporting period.

The subsidiary Elga Europe S.r.l. tested the recoverable amount of intangible assets (including goodwill, expertise and customer relationships, etc.) for annual financial reporting periods ending on December 31,2020 . The recoverable amount is based on the cash flow generated from operations at a discount rate of 7.21%. According to the assessment, the recoverable amount was less than the carrying amount. Therefore, an impairment loss of $162,055 thousand was recognized.

Intangible assets are amortized on a straight-line basis over their estimated useful lives as follows:

Expertise 9 years Customer relationships 7 years Computer software 2-20 years Other intangible assets 3-20 years

25 -

19. FINANCE LEASE RECEIVABLES

The lease period of the Company and its subsidiaries for house decoration, machinery and equipment lease contracts is ten years, and the implicit interest rate of the lease is 4.84% - 6.23%. The Company and its subsidiaries entered into a lease agreement with an associate Allnex - Eternal Resins (Guangdong) Co., Ltd. for the leasing out of machinery and equipment for ten years, and the implicit interest rate in the lease was 6.23%. This agreement was deemed as a sale agreement. The gain on disposal will be deferred and subsequently recognized as profit over the lease term. As of June 30, 2021, December 31, 2020 and June 30, 2020, the balance of finance lease receivables generated from the aforementioned transactions was $27,294 thousand, $38,012 thousand, and $35,229 thousand, respectively.

The Company and its subsidiaries measured the loss allowance of the finance lease receivables based on lifetime expected credit losses. As of June 30, 2021, December 31, 2020 and June 30, 2020, no loss allowance was recognized.

The composition of finance lease receivables (including related parties) is as follows:

Unamortized lease payments Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 onwards Less: Unearned financial income Finance lease receivable (recorded as other non-current assets - other)		June 30, 2021 $ 25,941 26,860 18,659 18,567 18,475 66,493 174,995 30,972) $ 144,023	December 31, 2020 $ 27,750 27,284 26,817 18,860 18,767 76,392 195,870 ( 34,846) $ 161,024		June 30, 2020
	(		(	(	$ 26,549 26,571 26,124 18,148 18,059 81,324 196,775 37,951) $ 158,824

20. BORROWINGS

a. Short-term borrowings

Type of Borrowings Interest Rate Range (%) June 30, 2021 Mortgage secured loans 2.53-3.50 Unsecured loans 0.58-3.71 Purchase loans 1.10-2.90 Secured loans 1.00-4.35 December 31, 2020 Mortgage secured loans 0.00-3.30 Unsecured loans 0.68-3.71 Purchase loans 1.13-3.10 Secured loans 1.00-4.35	Amount $ 398,753 4,346,861 447,718 1,271,043 $ 6,464,375 $ 271,782 2,607,208 219,393 1,305,546 $ 4,403,929 (Continued)

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Type of Borrowings
Interest Rate
Range (%)
June 30, 2020
Mortgage secured loans
0.57-4.10

Unsecured loans
0.80-2.09
Purchase loans
1.32-3.40
Secured loans
1.56-4.35

b. Long-term borrowings
Type of Borrowings
Agreement Period
and Interest Payable
Schedule
Interest Rate
Range (%)
June 30, 2021
Mortgage secured loans
From December 17, 2010
to December 31, 2025.
Interest is paid based
on schedule.
0.86-2.70

Secured loans
From September 17,
2020 to November 25,
2025. Interest is paid
based on schedule.
1.10-1.44
Unsecured loans
From July 28, 2016 to
May 31, 2024. Interest
is paid based on
schedule.
0.65-3.85

Long-term bills payable
Commercial paper
Revolving credit, the
period of the
agreement is five
years. Maturity date is
May 2023. Only
banking surcharge and
interests have to be
paid before the
maturity date.
1.26
Less: Unamortized discounts

Less: Current portion of
long-term borrowings

December 31, 2020
Mortgage secured loans
From December 17, 2010
to December 31, 2025.
Interest is paid based
on schedule.
0.86-2.70

Amount
$ 368,879
2,070,857
120,760

1,806,189
$ 4,366,685
(Concluded)
Amount
$ 62,343
1,586,610
9,291,102

10,940,055
900,000

(487)

899,513
11,839,568
(2,391,166)

$ 9,448,402
$ 80,874
(Continued)

27 -

Type of Borrowings
Agreement Period
and Interest Payable
Schedule
Interest Rate
Range (%)
Secured loans
From September 17,
2018 to November 25,
2025. Interest is paid
based on schedule.
1.16-1.50

Unsecured loans
From July 28, 2016 to
October 2, 2023.
Interest is paid based
on schedule.
0.60-3.85

Long-term bills payable
Commercial paper
Revolving credit, the
period of the
agreement is five
years. Maturity date is
May 2023. Only
banking surcharge and
interests have to be
paid before the
maturity date.
1.28
Less: Unamortized discounts

Less: Current portion of
long-term borrowings

June 30, 2020
Mortgage secured loans
From December 17, 2010
to December 31, 2025.
Interest is paid based
on schedule.
0.86-2.70

Secured loans
From September 17,
2018 to September 17,
2021. Interest is paid
based on schedule.
1.20-4.37
Unsecured loans
From August 17, 2015 to
October 2, 2023.
Interest is paid based
on schedule.
0.60-3.85

Amount
$ 1,599,100
9,821,886

11,501,860
900,000

(568)

899,432
12,401,292
(2,211,266)

$ 10,190,026
$ 91,229
2,253,657
10,043,623

12,388,509
(Continued)

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Type of Borrowings
Agreement Period
and Interest Payable
Schedule
Interest Rate
Range (%)
Long-term bills payable
Commercial paper
Revolving credit, the
period of the
agreement is five
years. Maturity date is
May 2023. Only
banking surcharge and
interests have to be
paid before the
maturity date.
1.31

Less: Unamortized discounts

Less: Current portion of
long-term borrowings

Amount
$ 900,000

(732)

899,268
13,287,777
(4,571,724)

$ 8,716,053

(Concluded)

The above commercial paper was issued by Taiwan Cooperative Bills Finance Corporation and International Bills Finance Corporation and guaranteed by a syndicated credit line from 8 banks led by E.SUN Commercial Bank, Ltd.

c. Facility agreements and financial covenants
1) During the period of the credit facility agreements, the Company and its subsidiaries made agreements with the creditors that the current ratio, liability ratio, interest coverage ratio and net tangible assets of the consolidated financial statements will be maintained within a certain specified ratio or amount and reviewed at least once half a year or a year. If the Company or its subsidiaries breach these clauses, the bank and syndicated banks can cancel the credit line or declare that part or all of the loan together with accrued interest immediately due. As of June 30, 2021 and December 31, 2020,the Company was in compliance with the syndicated credit facility agreements based on its consolidated financial statements .
2) As of June 30, 2021, the Company and its subsidiaries utilized the credits under signed facility agreements of the following banks.

Bank	Currency	Credit line
Bank SinoPac Co., Ltd.	NTD	$ 1,200,000
HSBC Bank (Taiwan) Limited	NTD	600,000
KGI Bank Co., Ltd.	NTD	600,000
E.SUN Commercial Bank, Ltd.	NTD	200,000
Taipei Fubon Commercial Bank Co., Ltd.	EUR	5,000

3) As of June 30, 2021, the Company and its subsidiaries executed syndicated credit facility agreements with the following banks.

In November, 2020, the subsidiary entered into a syndicated credit facility agreement with 5 banks

29 -

led by Taipei Fubon Commercial Bank Co., Ltd. for a USD $50,000 thousand credit line; the proceeds are for expanding medium-term working capital and increase capital to repay the subsidiaries’ existing liabilities.

In November 2017, the Company entered into a syndicated credit facility agreement with 8 banks led by E.SUN Commercial Bank, Ltd. for a NT$4,200,000 thousand credit line; the proceeds are for repaying liabilities and expanding medium-term working capital.

4) Refer to Note 32 for the assets pledged as collateral for bank borrowings of the Company and its subsidiaries.
d. Bonds Payable

5 year secured bonds - issued at par value Issued in November 2019. Interest at 0.82%, bullet repayment, payable annually. Less: Issuance cost		June 30, 2021 $ 3,000,000 4,038) $ 2,995,962		December 31, 2020 $ 3,000,000 ( 4,626) $ 2,995,374		June 30, 2020
	(				(	$ 3,000,000 5,221) $ 2,994,779

The above bonds payable’s proceeds are for repaying liabilities. In October 2019, the Company entered into a syndicated guarantee facility agreement with 4 banks led by Bank of Taiwan for a NT$3,024,600 thousand credit line.

21. RETIREMENT BENEFIT PLANS

For the three and six months ended June 30, 2021 and 2020, the pension expenses of defined benefit plans were $9,099 thousand, $11,025 thousand, $17,813 thousand and $21,602 thousand, respectively, and these were calculated based on the pension cost rate determined by the actuarial calculation on December 31, 2020 and 2019, respectively.

22. EQUITY

a. Share capital

Number of shares authorized (in thousands) Shares authorized Number of shares issued and fully paid (in thousands) Shares issued		June 30, 2021 1,800,000 $ 18,000,000 1,240,280 $ 12,402,795		December 31, 2020 1,800,000 $ 18,000,000 1,240,280 $ 12,402,795		June 30, 2020
						1,800,000 $ 18,000,000 1,240,280 $ 12,402,795

30 -

b. Capital surplus

May be used to offset deficit, distributed as cash or transferred to share capital (Note) Additional paid-in capital Treasury share transactions The difference between the consideration received or paid and the carrying amount of the subsidiaries’ net assets during actual disposal or acquisition May be used to offset deficit only Share of change in equities of associates or joint ventures Others		June 30, 2021 $ 309,017 19,642 12,872 341,531 27,357 58 27,415	December 31, 2020 $ 309,017 19,642 12,872 341,531 27,357 58 27,415		June 30, 2020
					$ 309,017 19,642 12,872 341,531 27,357 - 27,357

$ 368,946 $ 368,946 $ 368,888

Note: The capital surplus could be used to offset a deficit and distribute as cash dividends or transfer to capital when the Company has no deficit (limited to a certain percentage of the Company’s paid-in capital and once a year).

c. Retained earnings and dividend policy

The Company’s Articles stipulate that annual profit should be utilized in the following order:

1) Pay for income tax.
2) Offset deficit of previous years.
3) Appropriate as legal reserve 10% of the remaining profit, until the accumulated legal reserve equals the paid-in capital.
4) Appropriate as special reserve in accordance with the shareholders’ meeting or as requested by the authorities.
5) The remainder along with the unappropriated earnings are considered as distributable earnings. In accordance with dividend policy, the proposal of earnings appropriation is prepared by the board of directors and resolved in the shareholders’ meeting.

The legal reserve may be used to offset deficit. If the Company has no deficit and the legal reserve has exceeded 25% of the Company’s fully paid share capital, the excess may be transferred to capital or distributed in cash.

The Company should appropriate to or reverse a special reserve. Special reserve of NT$426,930 thousand was appropriated because of the exemptions from IFRS 1 elected by the Company. There is not any reversal of special reserve as of June 30, 2021 .

The appropriations of earnings for 2020 and 2019 had been approved in the shareholders’ meetings in July 2021 (note) and June 2020, respectively. The appropriations and dividends per share were as follows:

31 -

Legal reserve Special reserve(reversed) Cash dividends	Appropriations of Earnings 2020 2019 $ 248,248 $ 246,031 ( 660,170 ) 931,797 1,860,419 1,736,391	Dividends Per Share (NT$)	Dividends Per Share (NT$)
	2020 $ 248,248 ( 660,170 ) 1,860,419	2020 $ 1.5	2019
			$ 1.4

Note: The Corporation suspended its originally scheduled shareholders’ meeting in response to the FSC’s announcement: “Measures for Public Companies to Postpone Shareholders’Meetings for Pandemic Prevention’ meetings”. The appropriations of earnings for 2020 has been approved in the shareholders’ meeting in July 2021.

d. Other equity items

1) Exchange differences on translation of the financial statements of foreign operations

Balance, beginning of the period Recognized for the period Exchange differences on translation of the financial statements of foreign operations Share of exchange differences of associates accounted for using the equity method Balance, end of the period		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 ($1,320,826 ) (607,233) (24,287) ($ 1,952,346)	2020 ($1,684,908) (698,575) (34,038) ($ 2,417,521)
		(	(

The variation of exchange differences on translation of the financial statements of foreign operations is because the subsidiaries in mainland China were affected by the exchange rate fluctuations of the RMB to the NTD.

2) Unrealized gains and losses on financial assets at FVTOCI

Balance, beginning of the period Recognized for the period Unrealized gains and losses - equity instruments Other comprehensive income recognized in the period Reclassification adjustments Cumulative unrealized loss of equity instruments transferred to retained earnings due to disposal Balance, end of the period		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 538,306 250,526 250,526 (75,629) $ 713,203	2020 $ 242,219 56,237 56,237 - $ 298,456

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e. Non-controlling interests

Balance, beginning of the period Share of net gain (loss) for the period Other comprehensive income or loss for the period Exchange differences on translation of the financial statements foreign operations Acquisition of non-controlling interests in subsidiaries (Note 27) Dividends distributed by subsidiaries Non-controlling interests arising from establishing a new subsidiary Non-controlling interest reduced from liquidation of subsidiaries Balance, end of the period		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 403,805 (6,229) (14,540) - (25,179) 2,089 - $ 359,946	2020 $ 504,398 (20,146) (14,725) (40,571) (7,890) - (146) $ 420,920

23. REVENUE

Revenue from contracts with customers Revenue from the sale of goods Lease revenue Contract balances Notes and accounts receivable Contract liabilities (recorded as other current liabilities - others) Sale of goods		For the Three Months Ended June 30 For the Six Months Ended June 30 2021 2020 2021 2020 $13,140,904 $ 8,895,690 $24,276,023 $16,476,369 70,151 60,442 137,451 109,278 $13,211,055 $ 8,956,132 $24,413,474 $16,585,647 June 30, 2021 December 31, 2020 June 30, 2020 January 1, 2020 $ 19,130,704 $ 17,523,187 $ 14,106,860 $ 15,361,112 $ 83,695 $ 131,902 $ 26,741 $ 9,720	For the Three Months Ended June 30 For the Six Months Ended June 30 2021 2020 2021 2020 $13,140,904 $ 8,895,690 $24,276,023 $16,476,369 70,151 60,442 137,451 109,278 $13,211,055 $ 8,956,132 $24,413,474 $16,585,647 June 30, 2021 December 31, 2020 June 30, 2020 January 1, 2020 $ 19,130,704 $ 17,523,187 $ 14,106,860 $ 15,361,112 $ 83,695 $ 131,902 $ 26,741 $ 9,720		For the Six Months Ended June 30	For the Six Months Ended June 30	For the Six Months Ended June 30
						2020 $16,476,369 109,278 $16,585,647 January 1, 2020

							$ 15,361,112 $ 9,720

The changes in the balance of contract liabilities resulted primarily from the difference in timing between the satisfaction of performance obligations and customer payment.

Revenue of the reporting period recognized from the balance of contract liabilities at the beginning of the year is as follows:

From the balance of contract liabilities at the beginning of the period Sale of goods		For the Three Months Ended June 30 2021 2020 $ 13,016 $ 271		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 13,016		2021 $ 131,042	2020 $ 8,287

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24. PROFIT BEFORE INCOME TAX

a. Interest income

Interest on bank deposits Others		For the Three Months Ended June 30	For the Three Months Ended June 30	For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 17,882 4,735 $ 22,617	2020 $ 21,738 3,696 $ 25,434	2021 $ 40,129 10,124 $ 50,253	2020 $ 46,476 7,082 $ 53,558

b. Other gains and losses

For the Three Months Ended June 30 2021 2020 ($ 148) ($ 4,329) 3,153 7,706 - - - - (8,345) (9,643) (12,867) (17,154) ($ 18,207) ($ 23,420) For the Three Months Ended June 30	For the Three Months Ended June 30 2021 2020 ($ 148) ($ 4,329) 3,153 7,706 - - - - (8,345) (9,643) (12,867) (17,154) ($ 18,207) ($ 23,420) For the Three Months Ended June 30	For the Six Months Ended June 30	For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 2020 ($ 4,919) ($ 5,768) 3,676 9,169 - (25,717) - (68) (17,560) (24,754) (47,768) (26,862) ($ 66,571) ($ 74,000) For the Six Months Ended June 30
2021 $ 72,552 758 (1,354) $ 71,956	2020 $ 98,880 458 (1,614) $ 97,724	$	2021 144,609 1,578 (2,767) 143,420	2020 $ 209,066 867 (3,925) $ 206,008
		$

c. Finance costs

Information about capitalized interest was as follows:

Capitalized interest amount Capitalization rates (%)		For the Three Months Ended June 30	For the Three Months Ended June 30	For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 1,354 1.06-1.12	2020 $ 1,614 1.33-1.44	2021 $ 2,767 1.03-1.16	2020 $ 3,925 1.33-4.94

34 -

d. Depreciation and amortization

Property, plant and equipment Investment properties Right-of-use assets Intangible assets Other non-current assets - others An analysis of depreciation by function Operating costs Operating expenses Analysis of amortization by function Operating costs Operating expenses Employee benefits Short-term benefits Salaries Labor and health insurance Others Post-employment benefits Defined contribution plans Defined benefit plans (Note 21) Analysis by function Operating costs Operating expenses		For the Three Months Ended June 30 2021 2020 $ 489,801 $ 447,369 10,835 9,338 26,289 18,892 5,758 14,857 677 506 $ 533,360 $ 490,962 $ 407,919 $ 368,894 119,006 106,705 $ 526,925 $ 475,599 $ 443 $ 443 5,992 14,920 $ 6,435 $ 15,363 For the Three Months Ended June 30 2021 2020 $ 1,047,598 $ 871,999 78,539 63,448 86,860 70,815 1,212,997 1,006,262 52,738 17,404 9,099 11,025 61,837 28,429 $ 1,274,834 $ 1,034,691 $ 608,891 $ 454,841 665,943 579,850 $ 1,274,834 $ 1,034,691		For the Six Months Ended June 30	For the Six Months Ended June 30
				2021 2020 $ 969,596 $ 905,684 21,794 15,884 53,763 40,138 12,390 29,685 1,463 1,021 $ 1,059,006 $ 992,412 $ 807,514 $ 751,771 237,639 209,935 $ 1,045,153 $ 961,706 $ 898 $ 897 12,955 29,809 $ 13,853 $ 30,706 For the Six Months Ended June 30
		2021 $ 1,047,598 78,539 86,860 1,212,997 52,738 9,099 61,837 $ 1,274,834 $ 608,891 665,943 $ 1,274,834		2021 $ 1,966,715 165,922 164,480 2,297,117 107,126 17,813 124,939 $ 2,422,056 $ 1,092,409 1,329,647 $ 2,422,056	2020 $ 1,686,802 130,556 134,116 1,951,474 52,127 21,602 73,729 $ 2,025,203 $ 873,587 1,151,616 $ 2,025,203

e. Employee benefits

g. Compensation of employees and remuneration of directors

The Company distributed Compensation of employees and remuneration of directors at rates of 4.5% (inclusive)-5.5% and no higher than 1%, respectively, of pre-tax profit prior to the deduction of

35 -

Compensation of employees and remuneration of directors. The Compensation of employees and the remuneration of directors are as follows:

Compensation of employees Remuneration of directors		For the Three Months Ended June 30	For the Three Months Ended June 30		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 56,000 $ 3,640	2020 $ 33,000 $ 6,000		2021 $ 100,000 $ 7.690	2020 $ 45,000 $ 8,100

If there is a change in the amounts after the annual consolidated financial statements are authorized for issue, the differences are recorded as a change in the accounting estimate and will be adjusted in the next year.

The Compensation of employees and remuneration of directors and supervisors (all in cash) approved by the Company’s board of directors in March 2021 and 2020, and accrual amounts recognized in the consolidated financial statements, respectively, were as follows:

Amounts approved in the board of directors’ meeting Amounts recognized in the financial statements Difference	For the Year Ended December 31	For the Year Ended December 31
	2020 Compensation of employees Remuneration of Directors $ 123,628 $ 16,200 131,000 16,200 ($ 7,372) $ -	2019
		Compensation of employees Remuneration of Directors $ 121,177 $ 15,325 122,000 15,325 ($ 823) $ -

The differences were adjusted to profit and loss for the years ended December 31, 2021 and 2020.

Information on the Compensation of employees and remuneration of directors approved by the Company’s board of directors is available at the Market Observation Post System website of the Taiwan Stock Exchange.

25. INCOME TAX

a. Income tax expense (benefit) recognized in profit or loss

Current tax Deferred tax		For the Three Months Ended June 30 2021 2020 $ 267,489 $ 159,737 21,551 4,390 $ 289,040 $ 164,127		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 267,489 21,551 $ 289,040		2021 $ 471,988 47,317 ( $ 519,305	2020 $ 211,956 886) $ 211,070

36 -

b. Income tax expense (benefit) recognized directly in equity

Current tax Disposal of investments in equity instruments at FVTOCI expense (benefit) recognized in Deferred tax Unrealized gains and losses on financial assets at fair value through other comprehensive income (		For the Three Months Ended June 30 For the Six Months Ended June 30 2021 2020 2021 2020 $ 3,206 ($ 3,205) $ 3,206 ($ 3,205) other comprehensive income For the Three Months Ended June 30 For the Six Months Ended June 30 2021 2020 2021 2020 $ 742) ($ 955) ($ 16,857) $ 32,553		For the Six Months Ended June 30	For the Six Months Ended June 30
	(	2021 $ 742) (	(	2021 $ 16,857)	2020 $ 32,553

c. Income tax expense (benefit) recognized in other comprehensive income

d. Income tax assessment

The Company’s income tax returns as of 2019 have been assessed by the tax authorities.

26. EARNINGS PER SHARE

Basic earnings per share Diluted earnings per share	For the Three Months Ended June 30 2021 2020 $ 0.87 $ 0.52 $ 0.87 $ 0.52	For the Three Months Ended June 30 2021 2020 $ 0.87 $ 0.52 $ 0.87 $ 0.52		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 0.87 $ 0.87		2021 $ 1.53 $ 1.53	2020 $ 0.69 $ 0.69

The net profit and weighted average number of ordinary shares outstanding used in the computation of earnings per share were as follows:

Net profit for the period attributable to owners of the Company		For the Three Months Ended June 30 2021 2020 $ 1,074,098 $ 650,142		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 1,074,098		2021 $ 1,898,747	2020 $ 861,881

37 -

Number of ordinary shares

Unit: Thousand Shares

Weighted average number of ordinary shares used in the computation of basic earnings per share Effect of potentially dilutive ordinary shares Compensation of employees Weighted average number of ordinary shares used in the computation of diluted earnings per share		For the Three Months Ended June 30 2021 2020 1,240,280 1,240,280 1,383 1,440 1,241,663 1,241,720		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 1,240,280 1,383 1,241,663		2021 1,240,280 4,095 1,244,375	2020 1,240,280 4,038 1,244,318

Since the Company is allowed to settle the compensation paid to employees by cash or shares, the Company assumed that the entire amount of the compensation will be settled in shares and the resulting potential shares are included in the weighted average number of shares outstanding used in the computation of diluted earnings per share, as the shares have a dilutive effect. Such dilutive effect of the potential shares is included in the computation of diluted earnings per share until the shareholders resolve the number of shares to be distributed to employees at their meeting in the following year.

27. EQUITY TRANSACTIONS WITH NON-CONTROLLING INTERESTS

On December 31, 2020, The subsidiary Nikko-Materials Co., Ltd. acquired the equity of its subsidiary Nikko Mechanics Co., Ltd., and increased its percentage of ownership from 80% to 100%. The difference between the payment and the carry amount of the equity acquired was $12,842 thousand and the capital reserve was increased.

The above transactions were accounted for as equity transactions, since the Company and its subsidiaries did not cease to have control over the subsidiary.

Consideration paid ( The proportionate share of the carrying amount of the subsidiary’s net assets transferred from non-controlling interests Differences recognized from equity transactions	Amount $ 27,729 ) 40,571 $ 12,842

28. CASH FLOW INFORMATION

a. Information on investment activities

Acquisition of property, plant and equipment Decrease in payables for equipment Increase in other non-current liabilities Capitalized interest Cash paid		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 744,245 115,540 (91) 859,694 (2,767) $ 856,927	2020 $ 651,524 118,210 (39,085) 730,649 (3,925) $ 726,724

38 -
b. Changes in major liabilities arising from financing activities

For the six months ended June 30, 2021

January 1, 2021 Cash Flows Short-term borrowings $ 4,403,929 $ 2,142,411 Long-term borrowings 12,401,292 ( 512,531 ) Bonds payable 2,995,374 -	Non-cash Changes Exchange Rate Adjustment Issuance Cost June 30, 2021 ( $ 81,965 ) $ - $ 6,464,375 ( 49,193 ) - 11,839,568 - 588 2,995,962

For the six months ended June 30, 2020

January 1, 2020 Cash Flows Short-term borrowings $ 4,414,613 $ 30,834 Long-term borrowings 13,476,436 ( 97,378 ) Bonds payable 2,994,192 -	Non-cash Changes Exchange Rate Adjustment Issuance Cost June 30, 2020 ( $ 78,762 ) $ - $ 4,366,685 ( 91,281 ) - 13,287,777 - 587 2,994,779

29. CAPITAL MANAGEMENT

The Company and its subsidiaries’ objectives in capital management are to safeguard the Company and its subsidiaries’ ability to continue as a going concern and to provide reasonable returns to shareholders, to maintain an optimal capital structure and to reduce the cost of capital.

The Company’s capital management policy is to maintain a strong capital base that maintains the confidence of investors, creditors and the market, as well as supports future operations. Capital includes the Company’s shares, capital surplus, and retained earnings.

30. FINANCIAL INSTRUMENTS

a. Fair value of financial instruments that are not measured at fair value

Financial assets and liabilities that are not measured at fair value are of short-term duration and are usually repriced at the current market interest rate. Either their carrying amounts are close to their fair values, or their fair values could not be reliably measured.

39 -
b. Fair value of financial instruments that are measured at fair value on a recurring basis

1) Fair value hierarchy

June 30, 2021 Financial instruments at FVTPL Structured Deposit Mutual funds Financial instruments at FVTOCI Equity instruments Domestic and foreign listed shares Domestic and foreign unlisted shares December 31, 2020 Financial instruments at FVTPL Mutual funds Financial instruments at FVTOCI Equity instruments Domestic and foreign listed shares Domestic and foreign unlisted shares June 30, 2020 Financial instruments at FVTPL Structured Deposit Mutual funds Financial instruments at FVTOCI Equity instruments Domestic and foreign listed shares Domestic and foreign unlisted shares	Level 1 $ - $ - $ 858,232 $ - $ - $ 642,849 $ - $ - $ - $ 467,545 $ -	Level 2 $ 660,047 $ - $ - $ - $ - $ - $ - $ 416,699 $ - $ - $ -	Level 3 $ - $ 10,175 $ 101,015 $ 203,452 $ 21,301 $ 185,302 $ 188,155 $ - $ 17,495 $ 185,565 $ 117,534	Total $ 660,047
				$ 10,175
				$ 959,247
				$ 203,452
				$ 21,301
				$ 828,151
				$ 188,155
				$ 416,699
				$ 17,495
				$ 653,110
				$ 117,534

There was no transfer between Level 1 and Level 2 for the six months ended June 30, 2021 and 2020. Since TBG stocks in 2020 had no published price quotations as the fair value input for more than a certain period of time, it was transferred from Level 1 to Level 3.

40 -
2) Reconciliation of Level 3 fair value measurements of financial instruments

For the Six Months Ended June 30, 2021

Financial assets Balance, beginning of the period Recognized in profit or loss (recorded as other gains and losses) Recognized in other comprehensive income Disposal Effects of foreign currency exchange differences Balance, end of the period Unrealized other gains and losses For the Six Months Ended June 30, 2020 Financial assets Balance , beginning of the period Recognized in profit or loss (recorded as other gains and losses) Recognized in other comprehensive income Transferred to Level 3 Disposal Effects of foreign currency exchange differences Balance end of the period Unrealized other gains and losses	Fund Financial Assets at FVTPL $ 21,301 (6,295) - (4,507) (324) $ 10,175 ($ 5,994) Fund Financial Assets at FVTPL $ 12,483 6,065 - - (893) (160) $ 17,495 $ 5,196	Stocks Financial Assets at FVTOCI $ 373,457 - (66,411) - (2,579) $ 304,467 Stocks Financial Assets at FVTOCI $ 225,563 - (63,273) 202,264 - (1,455) $ 363,099	Total $ 394,758 (6,295) (66,411) (4,507) (2,903) $ 314,642 ($ 5,994) Total $ 238,046 6,065 (63,273) 202,264 (893) (1,615)
			$ 380,594 $ 5,196

3) Valuation techniques and inputs applied for Level 2 fair value measurement

The fair value of structured time deposit is measured by the future cash flows that are estimated and discounted by the expected yield based on the observable index at the end of period.

4) Valuation techniques and inputs applied for level 3 fair value measurement

The fair values of TBG stocks, domestic unlisted shares, foreign unlisted shares and mutual funds were determined by the market approach and arrived at by reference to the type of industry, similar companies and the company’s operations.

41 -

c. Categories of financial instruments

Financial assets Fair value through profit or loss Mandatorily classified as at fair value through profit or loss Financial assets at amortized cost (Note 1) Financial assets at fair value through other comprehensive income - equity instruments Financial liabilities Financial liabilities at amortized cost (Note 2)	June 30, December 31, June 30, 2021 2020 2020
	$ 670,222 $ 21,301 $ 434,194 25,722,605 24,637,813 21,318,467 1,162,699 1,016,306 830,644 30,540,785 28,090,292 26,299,269

Note 1: The balances included financial assets at amortized cost, including cash and cash equivalents, notes and accounts receivable (including related parties), other financial assets - current and non-current (recorded as other non-current assets - others), other receivables, refundable deposits (recorded as other non-current assets - others), and long-term receivables (recorded as other non-current assets - others).
Note 2: The balances included financial liabilities at amortized cost, which comprise short-term borrowings, notes and accounts payable, other payables - others, long-term borrowings (including current portion), bonds payable, guarantee deposits received (recorded as other non-current liabilities), and long-term payables (recorded as other non-current liabilities).

d. Financial risk management objectives and policies

The financial risk management objectives of the Company and its subsidiaries are mainly to manage the market risk, credit risk and liquidity risk related to operating activities and to verify, measure and manage the financial risks according to the policies. The Company and its subsidiaries have set up policies, procedures and internal controls to manage the risks in their financial activities. The significant financial activities of the Company and its subsidiaries are in accordance with relevant regulations and internal controls approved by the board of directors. During the execution of financial management activities, the Company and its subsidiaries should be in compliance with the relevant rules of financial risk management.

1) Market risk

a) Foreign currency risk

The Company and its subsidiaries’ operating activities and net investments in foreign operations are denominated mainly in foreign currencies. Consequently, the Company and its subsidiaries are exposed to foreign currency risk. To protect against reductions in the value of foreign currency assets and against the volatility of future cash flows caused by changes in foreign exchange rates, the Company and its subsidiaries utilize derivative financial instruments, such as foreign exchange forward contracts, or maintain net foreign currency assets and liabilities. Foreign currency risk could be reduced but might not be fully eliminated by these methods.

For the carrying amounts of the Company and its subsidiaries’ significant non-functional currency denominated monetary assets and liabilities (including those eliminated on consolidation) at the balance sheet date, refer to Note 35.

42 -

Sensitivity analysis

The following table details the sensitivity to a 1% change in the functional currencies against the relevant foreign currencies.

Foreign Currencies : Functional Currencies Financial assets Monetary items USD:NTD USD:RMB USD:MYR RMB:NTD JPY:NTD THB:NTD EUR:USD Financial liabilities Monetary items USD:NTD USD:RMB USD:MYR JPY:NTD EUR:USD	Impact on Profit or Loss
	For the Six Months Ended June 30
	2021 2020 $34,835 $23,089 8,242 10,729 3,116 2,056 2,932 2,030 3,896 1,947 3,237 1,345 - 1,516 23,914 20,819 8,517 9,333 4,282 2,882 1,616 1,632 - 1,331

b) Interest rate risk

The borrowings of the Company and its subsidiaries with fixed interest rates were not exposed to cash flow risk. The borrowings with floating interest rates were exposed to cash flow risk as effective interest rates change.

The carrying amounts of the Company and its subsidiaries’ financial assets and financial liabilities with exposure to interest rate risks at the balance sheet dates were as follows:

Fair value interest rate risk Financial assets Financial liabilities Cash flow interest rate risk Financial assets Financial liabilities	June 30, December 31, June 30, 2021 2020 2020
	$ 3,043,199 $ 3,493,360 $ 3,662,128 7,320,973 8,039,274 9,959,554 3,344,439 2,741,246 3,007,651 14,278,942 12,105,221 10,854,462

If interest rates had been 1% higher and all other variables were held constant, the Company and its subsidiaries’ cash flow interest rate risk from financial liabilities would have increased cash outflows by NT$142,789 thousand and NT$108,545 thousand for the six months ended June 30, 2021 and 2020, respectively.

43 -

c) Other price risk

The Company and its subsidiaries were exposed to equity price risk through their investments in equity securities. If equity prices had been 1% higher/lower, other comprehensive income for the six months ended June 30, 2021 and 2020 would have increased/decreased by NT$8,582 thousand and NT$6,531 thousand, as a result of the changes in fair value of financial assets at FVTOCI.

2) Credit risk

Credit risk refer to the risk of financial loss to the Company and its subsidiaries arising from default by the clients or counterparties of financial instruments on the contract obligations. According to the Company and its subsidiaries’ policy, each local entity in the Company and its subsidiaries is responsible for managing and analyzing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. The Company and its subsidiaries assess the credit quality of the customers by taking into account their financial position, past experience and other factors to conduct internal risk management and in order to enhance credit guarantee, holding some collaterals of accounts receivable from part of distributors. While the Company and its subsidiaries have procedures to monitor and limit exposure to credit risk on accounts receivable, there can be no assurance that such procedures will effectively limit credit risk and avoid losses. This risk is heightened during periods when economic conditions worsen.

3) Liquidity risk

The Company and its subsidiaries manage its liquidity risk by maintaining adequate cash and cash equivalents, bank borrowings, and so on. The table below summarizes the maturity profile of the Company and its subsidiaries’ financial liabilities based on contractual undiscounted payments, including principal and interest.

June 30, 2021

Non-derivative financial liabilities Short-term borrowings Notes payable Accounts payable Other payables Lease liabilities Long-term borrowings (including current portion) Bonds payable Long-term payable December 31, 2020 Non-derivative financial liabilities Short-term borrowings Notes payable Accounts payable Other payables Lease liabilities Long-term borrowings (including current portion) Bonds payable Long-term payable	Less Than 1 Year $ 6,495,409 739,705 6,432,146 1,964,653 85,763 4,773,930 24,600 7,765 $ 20,523,971 Less Than 1 Year $ 4,422,932 534,320 5,598,389 2,053,754 92,355 4,134,573 24,600 - $ 16,860,923	1-2 Years $ - - - - 75,921 4,531,415 24,600 4,009 $ 4,635,945 1-2 Years $ - - - - 78,924 4,321,629 24,600 10,031 $ 4,435,184	2-3 Years $ - - - - 59,229 1,601,691 24,600 - $ 1,685,520 2-3 Years $ - - - - 63,845 3,042,984 24,600 - $ 3,131,429	3-5 Years $ - - - - 66,429 1,144,637 3,008,559 - $ 4,219,625 3-5 Years $ - - - - 87,718 1,183,305 3,020,826 - $ 4,291,849	Over 5 Years $ - - - - 25,704 - - - $ 25,704 Over 5 Years $ - - - - 36,690 1,063 - - $ 37,753	Total $ 6,495,409 739,705 6,432,146 1,964,653 313,046 12,051,673 3,082,359 11,774 $ 31,090,765 Total $ 4,422,932 534,320 5,598,389 2,053,754 359,532 12,683,554 3,094,626 10,031
						$ 28,757,138

44 -

June 30, 2020

Non-derivative financial liabilities Short-term borrowings Notes payable Accounts payable Dividend payable Other payables Lease liabilities Long-term borrowings (including current portion) Bonds payable	Less Than 1 Year $ 4,389,332 253,102 3,573,545 1,736,391 1,733,273 61,212 7,816,055 24,600 $ 19,587,510	1-2 Years $ - - - - - 44,895 2,026,759 24,600 $ 2,096,254	2-3 Years $ - - - - - 31,169 3,590,348 24,600 $ 3,646,117	3-5 Years $ - - - - - 30,837 97,598 3,033,294 $ 3,161,729	Over 5 Years $ - - - - - 6,006 7,058 - $ 13,064	Total $ 4,389,332 253,102 3,573,545 1,736,391 1,733,273 174,119 13,537,818 3,107,094
						$ 28,504,674

e. Transfers of financial assets

Subsidiary discounted notes and transferred most of the banker’s acceptance bills of receivables from China to vendors for repayment. If above financial assets are not paid at maturity, the bank and vendors have the right to request the subsidiary to pay the unsettled balance. As the subsidiary has not transferred the significant risks and rewards relating to these financial assets, it continues to recognize the full carrying amount of the financial assets and has recognized the cash received on the transfer as secured payables and borrowings.

As of June 30,2021, December 31, 2020 and June 30,2020, the carrying amount of the accounts receivable that have been transferred but have not been derecognized amounted to $2,988,867 thousand, $2,329,453 thousand and $1,511,402 thousand, respectively, and the carrying amount of the related borrowings and accounts payables were $2,986,649 thousand, $2,328,143 thousand and $1,509,316 thousand, respectively.

31. TRANSACTIONS WITH RELATED PARTIES

Details of transactions between the Company and its subsidiaries and other related parties are disclosed below:

a. Related party names and relationships

Related Party Name
Allnex-Eternal Resins Corporation Limited
Allnex-Eternal Resins (Guangdong) Co., Ltd.
Eternal Electronic Materials (Kunshan) Co., Ltd.
Daxin Materials Corporation
Showa Denko New Material (Zhuhai) Co., Ltd.
ESCO Specialty Coatings (Shanghai) Co., Ltd.
DSM Resins (Far East) Ltd.
Hangzhou Yongxinyang Photoelectric Materials Co., Ltd.
Mitsubishi Polyester Film (Suzhou) Co., Ltd.

Relationship

Associate
Associate
Associate
Associate
Associate
Associate
Associate
Joint venture (removed from related
parties after October 2020)
Other related party

45 -

b. Operating revenue

Account Item	Related Party Category		For the Three Months Ended June 30	For the Three Months Ended June 30		For the Six Months Ended June 30	For the Six Months Ended June 30
Revenue from sales of goods	Associates Joint ventures		2021 $ 172,698 - $ 172,698	2020 $ 107,853 2,317 $ 110,170		2021 $ 331,556 - $ 331,556	2020 $ 203,595 3,932 $ 207,527

Sales to related parties were made at prices similar to that of general transactions. The collection terms are 60-150 days from the end of the month.

c. Purchase of goods

Related Party Category Associates Other related parties	For the Three Months Ended June 30 2021 2020 $ 816 $ 138 100 - $ 916 $ 138	For the Three Months Ended June 30 2021 2020 $ 816 $ 138 100 - $ 916 $ 138		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 816 100 $ 916		2021 $ 816 2,028 $ 2,844	2020 $ 138 - $ 138

Purchases from related parties were made at prices similar to that of general transactions. The payment terms are 30-120 days from the date the goods are received.

d. Other income

Related Party Category/Name Associates Allnex-Eternal Resins (Guangdong) Co., Ltd. Others		For the Three Months Ended June 30 2021 2020 $ 5,848 $ 6,236 1,170 1,119 $ 7,018 $ 7,355		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 5,848 1,170 $ 7,018		2021 $ 14,676 3,544 $ 18,220	2020 $ 12,974 3,201 $ 16,175

Inclusive of rental income, service fees and so on.

e. Receivables from related parties

Account Item Notes and accounts receivable	Related Party Category Associates Joint ventures		June 30, 2021 $ 282,542 - $ 282,542		December 31, 2020 $ 263,376 - $ 263,376		June 30, 2020
							$ 182,142 19,463 $ 201,605

The receivables arise mainly from sales transactions; the receivables were not guaranteed, pledged and are without interest. As of June 30, 2021, December 31, 2020 and June 30, 2020, the balance of allowance for loss is NT$289 thousand, NT$1,037 thousand and NT$16,557 thousand, respectively.

46 -
f. Payable to related parties

Account Item Accounts payable	Related Party Category Associates		June 30, 2021 $ 857		December 31, 2020 $ 1,958		June 30, 2020
							$ 138

The payables arise manly from purchase transactions; the payables were not pledged and are without interest.

g. Loans to related parties

Account Item Other receivables	Related Party Category/Name Associates ESCO Specialty Coatings (Shanghai) Co., Ltd. Eternal Electronic Materials (Kunshan) Co., Ltd.		June 30, 2021 $ 157,279 $ 103,416 $ 260,695	December 31, 2020 $ 159,761 $ 105,048 $ 264,809	June 30, 2020 $ 150,876 $ 100,584 $ 251,460

The Company and its subsidiaries provided loans to related parties at rates comparable to market interest rates.

h. Compensation of key management personnel

Short-term employee benefits Post-employment benefits		For the Three Months Ended June 30 2021 2020 $ 24,864 $ 29,823 119 89 $ 24,983 $ 29,912		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 24,864 119 $ 24,983		2021 $ 56,991 239 $ 57,230	2020 $ 46,728 178 $ 46,906

32. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

The Company and its subsidiaries’ assets mortgaged or pledged as collateral for bank borrowings discounted notes loans, supplier payment, customs guarantee and performance guarantee were as follows:

Notes receivable Property, plant and equipment Other financial assets - time deposit certificates and deposit of escrow account(recorded as other non-current assets - others)		June 30, 2021 $ 2,988,867 275,732 18,085 $ 3,282,684	December 31, 2020 $ 2,329,453 295,789 15,000 $ 2,640,242		June 30, 2020
					$ 1,523,194 285,636 19,534 $ 1,828,364

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33. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

a. The Company and its subsidiaries have issued but unused letters of credit with an aggregate amount of NT$200,242 thousand as of June30, 2021.
b. The Company and its subsidiaries have contracts that were not yet incurred to purchase property, plant and equipment and intangible assets of NT$898,402 thousand at June 30, 2021.

34. SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD

In July 2021, the company entered into a syndicated credit facility agreement with nine bank led by E.SUN Commercial Bank, Ltd. and Bank of Taiwan for a NT$6,660,000 thousand credit line. The credit line is used to guarantee the company’s expected issuance of New Taiwan Dollar corporate bonds for repaying liabilities and expanding medium-term working capital.

35. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The following information was aggregated by the foreign currencies other than functional currencies of the Company and its subsidiaries before elimination and the exchange rates between the foreign currencies and the respective functional currencies were disclosed. The significant assets and liabilities denominated in foreign currencies were as follows:

	Foreign
	Currency			Carrying
	(In Thousands)	Exchange Rate		Amount
June 30,2021
Financial assets
Monetary items
USD	$ 125,036	27.8600	(USD:NTD)	$ 3,483,503
USD	29,585	6.4655	(USD:RMB)	824,238
USD	11,183	4.3261	(USD:MYR)	311,558
RMB	68,035	4.3090	(RMB:NTD)	293,163
JPY	1,545,253	0.2521	(JPY:NTD)	389,558
THB	370,196	0.8744	(THB:NTD)	323,699
Non-monetary items
Financial assets at fair value
through other comprehensive
income
AUD	4,824	20.9400	(AUD:NTD)	101,015
Investments accounted for using
the equity method
USD	981,425	27.8600	(USD:NTD)	27,342,489
RMB	6,165,094	0.1547	(RMB:USD)	26,565,391
JPY	7,584,169	0.2521	(JPY:NTD)	1,911,969
MYR	244,831	0.2312	(MYR:USD)	1,576,709
THB	140,654	0.8744	(THB:NTD)	122,988
Financial liabilities
Monetary items
USD	85,838	27.8600	(USD:NTD)	2,391,447
USD	30,572	6.4655	(USD:RMB)	851,736
USD	15,368	4.3261	(USD:MYR)	428,152
JPY	640,819	0.2521	(JPY:NTD)	161,550

(Continued)

48 -

		Foreign
		Currency			Carrying
	(In Thousands)		Exchange Rate		Amount
December31,2020
Financial assets
Monetary items
USD	$	80,407	28.4800 (USD:NTD)	$	2,289,991
USD		18,223	6.5067 (USD:RMB)		518,991
USD		12,252	4.1947 (USD:MYR)		348,937
RMB		95,030	4.3770 (RMB:NTD)		415,946
JPY		860,699	0.2763 (JPY:NTD)		237,811
THB		148,594	0.9556 (THB:NTD)		141,996
Non-monetary items
Financial assets at fair value through
other comprehensive income
AUD		8,442	21.9500 (AUD:NTD)		185,302
Investments accounted for using
the equity method
USD		931,351	28.4800 (USD:NTD)		26,524,885
RMB		5,883,766	0.1537 (RMB:USD)		25,753,246
JPY		6,626,721	0.2763 (JPY:NTD)		1,830,963
MYR		241,959	0.2384 (MYR:USD)		1,642,778
THB		147,262	0.9556 (THB:NTD)		140,723
Financial liabilities
Monetary items
USD		67,306	28.4800 (USD:NTD)		1,916,875
USD		30,755	6.5067 (USD:RMB)		875,902
USD		16,292	4.1947 (USD:MYR)		463,996
JPY		671,965	0.2763 (JPY:NTD)		185,664

	Foreign
	Currency			Carrying
	(In Thousands)	Exchange Rate		Amount
June 30,2020
Financial assets
Monetary items
USD	77,923	29.6300	(USD:NTD)	2,308,858
USD	36,211	7.0699	(USD:RMB)	1,072,932
USD	6,938	4.4762	(USD:MYR)	205,573
RMB	48,428	4.1910	(RMB:NTD)	202,962
JPY	707,602	0.2751	(JPY:NTD)	194,661
THB	139,441	0.9645	(THB:NTD)	134,491
EUR	4,556	1.1228	(EUR:USD)	151,578
				(Continued)

49 -

	Foreign	Foreign
	Currency		Exchange Rate			Carrying
	(In Thousands)					Amount
Non-monetary items
Financial assets at fair value
through other comprehensive
income
AUD	$	9,125	20.3350	(AUD:NTD)	$	185,565
Investments accounted for using
the equity method
USD		858,166	29.6300	(USD:NTD)		25,427,461
RMB	5,960,823		0.1414	(RMB:USD)		24,981,811
JPY	5,421,293		0.2751	(JPY:NTD)		1,491,398
MYR		80,564	6.6195	(MYR:NTD)		533,292
EUR		4,528	33.2700	(EUR:NTD)		150,633
THB		133,585	0.9645	(THB:NTD)		128,842
Financial liabilities
Monetary items
USD	$	70,264	29.6300	(USD:NTD)		$ 2,081,922
USD		31,499	7.0699	(USD:RMB)		933,315
USD		9,728	4.4762	(USD:MYR)		288,241
JPY		593,185	0.2751	(JPY:NTD)		163,185
EUR		4,000	1.1228	(EUR:USD)		133,080

(Concluded)

The total realized and unrealized foreign exchange gains and losses were a loss of NT$25,541 thousand , NT$2,207 thousand, a loss of NT$60,415 thousand and a loss of NT$12,267 thousand for the three months and six months ended June 30, 2021 and 2020, respectively. It is impractical to disclose net foreign exchange gains and losses by each significant foreign currency due to the variety of the foreign currency transactions and functional currencies of each entity.

36. ADDITIONAL DISCLOSURES

a. Information about significant transactions and investees:
1) Financing provided to others (Table 1)
2) Endorsements/guarantees provided (Table 2)
3) Marketable securities held (Table 3)
4) Marketable securities acquired or disposed at costs or prices at least NT$300 million or 20% of the paid-in capital (Table 4)
5) Acquisition of individual real estate at costs of at least NT$300 million or 20% of the paid-in capital: None
6) Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital: None
7) Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital (Table 5)
8) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital (Table 6)
50 -
9) Trading in derivative instruments: (Note 7)
10) Others: The business relationship between the parent company and the subsidiaries and between each subsidiary, and the circumstances and amounts of any significant transactions (Table 7)
11) Information on investees (Table 8)
b. Information on investments in mainland China
1) Information on any investee company in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, net income of investees, investment gain or loss, carrying amount of the investment at the end of the period, repatriations of investment income, and limit on the amount of investment in the mainland China area. (Table 9)
2) Any of the following significant transactions with investee companies in mainland China, either directly or indirectly through a third party, and their prices, payment terms, and unrealized gains or losses:
- a) The amount and percentage of purchases and the balance and percentage of the related payables at the end of the period (Table 5)
- b) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the period (Table 5)
- c) The amount of property transactions and the amount of the resultant gains or losses: None
- d) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the period and the purposes (Table 2)
- e) The highest balance, the end of period balance, the interest rate range, and total current period interest with respect to financing of funds (Table 1)
- f) Other transactions that have a material effect on the profit or loss for the period or on the financial position, such as the rendering or receiving of services: None
c. Information of major shareholders : list of the shareholders with ownership of 5% or greater, showing the names, the number of shares and percentage of ownership held by each shareholder. (Table 10)

37. SEGMENT INFORMATION

Information reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment performance focuses on the types of industrial materials. Reported segments of the Company and its subsidiaries were as follows:

Resins Materials

Mainly operating variety of industrial resins materials.

Electronic Materials

Mainly operating electronic and optoelectronic industry raw material.

51 -

 High Performance Materials

Mainly operating UV - light curing raw material.

 Others

The other operating segments which did not meet the quantitative threshold for separate reporting.

Segment revenues and operating results

The Company and its subsidiaries’ segment profit (loss) is used as the basis for assessing the performance of the operating segments. The following is an analysis of the Company and its subsidiaries’ revenues and results of operations by reportable segment.

For the six months ended June 30,2021 Revenue from the sale of goods Revenues from external customers Revenue from the rendering of service Inter-segment revenues Total revenue Segment operating profit (loss) For the six months ended June 30,2020 Revenue from the sale of goods Revenues from external customers Revenue from the rendering of service Inter-segment revenues Total revenue Segment operating profit (loss)	Resins Materials $ 11,915,807 - 1,387,953 $ 13,303,760 $ 385,326 $ 7,857,662 - 846,537 $ 8,704,199 $ 367,004	Electronic Materials $ 7,513,559 - 2,788,419 $ 10,301,978 $ 1,288,296 $ 5,602,762 - 2,135,760 $ 7,738,522 $ 644,243	High Performance Materials $ 4,791,157 - 856,834 $ 5,647,991 $ 813,863 $ 2,996,386 - 591,860 $ 3,588,246 $ 291,778	Others $ 55,500 137,451 1,730 $ 194,681 ($ 192,929) $ 19,559 109,278 1,781 $ 130,618 ($ 203,849)	Adjustment and Elimination $ - - (5,034,936) ($ 5,034,936) $ - $ - - (3,575,938) ($ 3,575,938) $ -	Total $ 24,276,023 137,451 -
						$ 24,413,474
						$ 2,294,556
						$ 16,476,369 109,278 -
						$ 16,585,647
						$ 1,099,176

52 -

TABLE 1

Eternal Materials Co., Ltd. and Subsidiaries

FINANCING PROVIDED TO OTHERS FOR THE SIX MONTHS ENDED JUNE 30, 2021 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

No. (Note 1)	Lender	Borrower	Financial Statement Account	Related Party	Maximum Balance for the Period (Note 2)	Ending Balance (Note 3)	Actual Amount Drawn	Interest Rate (%)	Nature of Financing (Note 4)	Transaction Amount	Reason for Financing	Allowance for Bad Debt	Colla	teral	Financing Limits for Each Borrowing Company	Financing Company’s Total Financing Limit	Note
													Item	Value
1 1 2 2 2 2 2 2 2 2 3 3 3 3 3 4	Eternal Electronic Material (Guangzhou) Co., Ltd. Eternal Electronic Material (Guangzhou) Co., Ltd. Eternal Chemical (China) Co., Ltd. Eternal Chemical (China) Co., Ltd. Eternal Chemical (China) Co., Ltd. Eternal Chemical (China) Co., Ltd. Eternal Chemical (China) Co., Ltd. Eternal Chemical (China) Co., Ltd. Eternal Chemical (China) Co., Ltd. Eternal Chemical (China) Co., Ltd. Eternal Materials (Guangdong) Co., Ltd. Eternal Materials (Guangdong) Co., Ltd. Eternal Materials (Guangdong) Co., Ltd. Eternal Materials (Guangdong) Co., Ltd. Eternal Materials (Guangdong) Co., Ltd. Eternal Holdings Inc.	Eternal Electronic (Suzhou) Co., Ltd. ESCO Specialty Coatings (Shanghai) Co., Ltd. Eternal Chemical (Tianjin) Co., Ltd. Eternal Synthetic Resins (Changshu) Co., Ltd. Eternal Materials (Guangdong) Co., Ltd. Eternal Specialty Materials (Suzhou) Co., Ltd. Eternal Chemical (Chengdu) Co., Ltd. Eternal Electronic Materials (Kunshan) Co., Ltd. Changhe International Trading (GZFTZ) Co., Ltd. Eternal (China) Investment Co., Ltd. Eternal Chemical (China) Co., Ltd. Eternal (China) Investment Co., Ltd. Eternal Electronic (Suzhou) Co., Ltd. Eternal Optical Material (Suzhou) Co., Ltd. Eternal Photoelectric Material Industry (Yingkou) Co., Ltd. Eternal Technology Corporation	Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties	Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y	$ 438,400 317,185 1,052,160 1,096,000 131,520 438,400 1,490,560 208,560 175,360 438,400 131,520 1,578,240 175,360 876,800 306,880 340,680	$ - 314,557 517,080 430,900 - 215,450 732,530 103,416 - 430,900 - 646,350 86,180 430,900 150,815 167,160	$ - 157,279 207,922 302,510 - 60,954 613,961 103,416 - - - - 1,565 - - 167,160	- 4.250 3.852 3.852 - 3.852 3.852 3.850 - - - - 3.850 - - 1.750	2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2	$ - - - - - - - - - - - - - - - -	Operating needs Operating needs Operating needs Operating needs Operating needs Operating needs Operating needs Operating needs Operating needs Operating needs Operating needs Operating needs Operating needs Operating needs Operating needs Operating needs	$ - - - - - - - - - - - - - - - -	- - - - - - - - - - - - - - - -	$ - - - - - - - - - - - - - - - -	$ 4,824,514 964,903 9,166,180 9,166,180 9,166,180 9,166,180 9,166,180 1,833,236 9,166,180 9,166,180 7,393,217 7,393,217 7,393,217 7,393,217 7,393,217 35,041,809	$ 4,824,514 964,903 9,166,180 9,166,180 9,166,180 9,166,180 9,166,180 1,833,236 9,166,180 9,166,180 7,393,217 7,393,217 7,393,217 7,393,217 7,393,217 35,041,809	Note 6 Note 8 Note 6 Note 6 Note 6 Note 6 Note 6 Note 8 Note 6 Note 6 Note 5 Note 5 Note 5 Note 5 Note 5 Note 5

(Continued)

53 -

No. (Note 1)	Lender	Borrower	Financial Statement Account	Related Party	Maximum Balance for the Period (Note 2)	Ending Balance (Note 3)	Actual Amount Drawn	Interest Rate (%)	Nature of Financing (Note 4)	Transaction Amount	Reason for Financing	Allowance for Bad Debt	Colla	teral	Financing Limits for Each Borrowing Company	Financing Company’s Total Financing Limit	Note
													Item	Value
4 5 5 5 5 5 5 5 5	Eternal Holdings Inc. Eternal (China) Investment Co., Ltd. Eternal (China) Investment Co., Ltd. Eternal (China) Investment Co., Ltd. Eternal (China) Investment Co., Ltd. Eternal (China) Investment Co., Ltd. Eternal (China) Investment Co., Ltd. Eternal (China) Investment Co., Ltd. Eternal (China) Investment Co.,Ltd.	Eternal Sun A. (Suzhou) Co., Ltd. Eternal Chemical (China) Co., Ltd. Eternal Optical Material (Suzhou) Co., Ltd. Eternal Photoelectric Material Industry (Yingkou) Co,. Ltd. Eternal Chemical (Chengdu) Co., Ltd. Eternal Chemical (Tianjin) Co., Ltd. Eternal Synthetic Resins (Changshu) Co., Ltd. Eternal Materials (Guangdong) Co., Ltd. Eternal Electronic (Suzhou)Co.,Ltd.	Other receivables from related parties Other receivables from related parties Other receivables from related parties Long-term receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from relatedparties	Y Y Y Y Y Y Y Y Y	$ 205,452 876,800 1,139,840 263,040 1,607,650 1,042,800 695,200 131,520 434,500	$ 100,296 430,900 - - 861,800 1,034,160 344,720 129,270 430,900	$ 100,296 - - - 861,800 517,080 344,720 - 430,900	1.760 - - - 3.850 3.850 3.850 - 3.850	2 2 2 2 2 2 2 2 2	- - - - - - - - -	Operating needs Operating needs Operating needs Operating needs Operating needs Operating needs Operating needs Operating needs Operating needs	- - - - - - - - -	- - - - - - - - -	- - - - - - - - -	$ 7,008,362 29,091,552 29,091,552 29,091,552 29,091,552 29,091,552 29,091,552 29,091,552 29,091,552	$ 7,008,362 29,091,552 29,091,552 29,091,552 29,091,552 29,091,552 29,091,552 29,091,552 29,091,552	Note 7 Note 5 Note 5 Note 5 Note 5 Note 5 Note 5 Note 5 Note 5

(Concluded)

Note 1: The representation of the numbers are as follows:

No. 0 represents the issuer.
Investees are numbered in order from No. 1.
Note 2: The maximum balance for the period is approved by the board of directors, and translated into NTD using the exchange rate at the balance sheet date.

Note 3: The ending balance for the period is approved by the board of directors, and translated into NTD using the exchange rate at the balance sheet date.

Note 4: Nature of financing is as follows:

Business relationship.
Short-term financing
Note 5: According to the financing company’s Operation Procedures for Lending Funds to Others, either the financing limit for each borrowing company or financing company’s total financing limits shall not exceed 200% of the net worth of the company as of December 31, 2020, and it should be translated into NTD using the exchange rate at the balance sheet date.
Note 6: According to the financing company’s Operation Procedures for Lending Funds to Others, either the financing limit for each borrowing company or financing company’s total financing limits shall not exceed 200% of the net worth of the company’s latest financial statement, and it should be translated into NTD using the exchange rate at the balance sheet date.
Note 7: According to the financing company’s Operation Procedures for Lending Funds to Others, either the financing limit for each borrowing company or financing company’s total financing limits shall not exceed 40% of the net worth of the company as of December 31, 2020, and it should be translated into NTD using the exchange rate at the balance sheet date.
Note 8: According to the financing company’s Operation Procedures for Lending Funds to Others, either the financing limit for each borrowing company or financing company’s total financing limits shall not exceed 40% of the net worth of the company’s latest financial statement, and it should be translated into NTD using the exchange rate at the balance sheet date.
Note 9: Amount was eliminated from the consolidated financial statements, except for investments accounted for using the equity method.
54 -

TABLE 2

Eternal Materials Co., Ltd. and Subsidiaries

ENDORSEMENTS/GUARANTEES PROVIDED FOR THE SIX MONTHS ENDED JUNE 30, 2021 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

No. (Note 1)	Endorser/Guarantor	Endorsee/Guarantee	Endorsee/Guarantee	Limits on Endorsements /Guarantees Given on Behalf of Each Party	Maximum Amount Endorsements /Guarantees During the Period (Note 4)	Outstanding Endorsements /Guarantees the End of the Period (Note 5)	Actual Amount Drawn	Amount Endorsements /Guarantees by Collaterals	Ratio of Accumulated Endorsements /Guarantees to Net Equity per Latest Financial Statements (%)	Maximum Endorsements /Guarantees Amount Allowable	Endorsements /Guarantees Given by Parent on Behalf of Subsidiaries	Endorsements /Guarantees by Subsidiaries on Behalf of Parent	Endorsements /Guarantees Given on Behalf of Companies in Mainland China	Note
		Name	Relationship (Note 2)
0 0 0 0 0 0 0 1 1	Eternal Materials Co., Ltd. Eternal Materials Co., Ltd. Eternal Materials Co., Ltd. Eternal Materials Co., Ltd. Eternal Materials Co., Ltd. Eternal Materials Co., Ltd. Eternal Materials Co., Ltd. Eternal (China) Investment Co., Ltd. Eternal (China) Investment Co.,Ltd.	Eternal Holdings Inc. Eternal Technology Corporation Nikko-Materials Co., Ltd. Eternal Sun A. (Suzhou) Co., Ltd. Eternal Materials (Malaysia) Sdn. Bhd. Elga Europe S.r.l. Eternal Nanyang Investment Co., Ltd. Eternal Chemical (Tianjin) Co., Ltd. Eternal Synthetic Resins (Changshu)Co.,Ltd.	2 2 2 2 2 2 2 2 2	$ 24,349,044 24,349,044 24,349,044 24,349,044 24,349,044 24,349,044 24,349,044 14,545,776 14,545,776	$ 502,216 285,350 135,800 102,726 2,168,880 412,440 1,426,750 131,520 131,520	$ 490,336 278,600 88,235 100,296 2,168,880 397,800 1,393,000 - -	$ 267,456 278,600 - 88,316 1,252,929 395,480 1,142,260 - -	- - - - - - - - -	2.01 1.14 0.36 0.41 8.91 1.63 5.72 - -	$ 24,349,044 24,349,044 24,349,044 24,349,044 24,349,044 24,349,044 24,349,044 14,545,776 14,545,776	Y Y Y Y Y Y Y N N	N N N N N N N N N	N N N Y N N N Y Y	Notes 3 and 6 Notes 3 and 6 Notes 3 and 6 Notes 3 and 6 Notes 3 and 6 Notes 3 and 6 Notes 3 and 6 Note 7 Note 7

(Continued)

55 -
Note 1: The representation of the numbers are as follows:
No. 0 represents the issuer.
Investees are numbered in order from No. 1.

Note 2: Relationships between the endorser/guarantor and the party being endorsed/guaranteed are as follows:

Have a business relationship.
The company owns directly or indirectly more than 50% of the voting shares of the company.
Total ownership of more than 50% of the investee, either directly by the Company and/or indirectly by the Company’s subsidiaries.
Subsidiaries in which the Company owns directly or indirectly more than 90% of the voting shares.
Companies where the Company is required to provide guarantees or endorsements for the construction project based on the construction contract.
Companies where the shareholders provide endorsements/guarantees to the endorsed/guaranteed company in proportion to its ownership due to a joint venture.
According to the Consumer Protection Act, companies that are required to provide guarantees and endorsements for joint and several liabilities if involved in the business of pre-sale of real estate.
Note 3: In accordance with the parent company’s “Procedures for Provision of Endorsements and Guarantees”, limit on endorsement/guarantee given on behalf of each party is 100% of the parent company’s net worth based on latest financial statements.
Note 4: Maximum amount endorsed/guaranteed during the period is approved by the board of directors, and translated into NTD using the exchange rate at the balance sheet date.

Note 5: Outstanding endorsements/guarantees at the end of the period are approved by the board of directors, and translated into NTD using the exchange rate at the balance sheet date.

Note 6: In accordance with the parent company’s “Procedures for Provision of Endorsements and Guarantees”, maximum endorsement/guarantee amount allowable is 100% of the parent company’s net worth based on latest financial statements.
Note 7: In accordance with the subsidiary’s “Procedures for Provision of Endorsements and Guarantees”, the limit on endorsement/guarantee given on behalf of each party and the maximum amount endorsed/guaranteed is based on its net worth in the financial statements for the year ended December 31, 2020.
56 -

TABLE 3

Eternal Materials Co., Ltd. and Subsidiaries

MARKETABLE SECURITIES HELD (EXCLUDING INVESTMENT IN SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES) JUNE 30, 2021

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Holding Company Name	Type and Name of Marketable Securities	Relationship with the Holding Company	Financial Statement Account		June 30, 2021	June 30, 2021		Note
				Shares/Units	Carrying Amount	Percentage of Ownership (%)	Fair Value
Eternal Materials Co., Ltd. Mixville Holdings Inc.	President Securities Corp. (stock) TBG Diagnostics Limited (stock) Universal Venture Capital Investment Corp. (stock) Der Yang Biotechnology Venture Capital Co., Ltd. (stock) Hwa Nan Venture Capital Co., Ltd. (stock) Grace THW Holding Limited (stock) Pacven Walden Ventures V, L.P. (fund)	- - - - - - -	Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through profit or loss - non-current	32,083,430 40,200,000 5,000,000 353,994 57,438 1,900,000 -	$ 858,232 101,015 40,370 3,712 - 159,370 10,175	2.29 18.48 4.15 11.11 10.60 Note Note	$ 858,232 101,015 40,370 3,712 - 159,370 10,175

Note : The percentage of ownership is less than 1%.

57 -

TABLE 4

Eternal Materials Co., Ltd. and Subsidiaries

MARKETABLE SECURITIES ACQUIRED OR DISPOSED OF AT COSTS OR PRICES OF AT LEAST NT$300 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE SIX MONTHS ENDED JUNE 30, 2021

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Company Name	Type and Name of Marketable Securities	Financial Statement Account	Counterparty	Relationship	Beginning Balance	Beginning Balance	Acquisition(Note 1)	Acquisition(Note 1)		Disposal	Disposal		Ending Balance(Note 2)	Ending Balance(Note 2)
					Number of Shares	Amount	Number of Shares	Amount	Number of Shares	Amount	Carrying Amount	Gain (Loss) on Disposal	Number of Shares	Amount
Eternal (China) Investment Co., Ltd. Eternal (China) Investment Co., Ltd.	Eternal Optical Material (Suzhou) Co., Ltd. Eternal Photoelectric Material Industry (Yingkou) Co., Ltd.	Investments accounted for using the equity method Investments accounted for using the equity method	Note 4 Note 4	Subsidiary Subsidiary	- -	$ (711,257) (208,355)	Note 3 Note 3	$ 949,080 345,120	- -	$ - -	$ - -	$ - -	Note 3 Note 3	$ 219,952 147,849

Note 1: The acquisition included issuance of ordinary shares for cash, and the amounts were translated into NTD using the exchange rate at the base date.

Note 2: The ending balance included increased investment amount, share of profit or loss of subsidiaries, associates and joint ventures accounted for using the equity method and translation of the financial statement of foreign operations.

Note 3: No share was issued.

Note 4: The Company had capital increase.

58 -

TABLE 5

Eternal Materials Co., Ltd. and Subsidiaries

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE SIX MONTHS ENDED JUNE 30, 2021

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Company name	Related Party	Relationship		Transaction Details	Transaction Details	Transaction Details	Abnormal Transaction	Abnormal Transaction	Notes/Accounts Receivable (Payable)	Notes/Accounts Receivable (Payable)	Note
			Purchases/Sales (Note 2)	Amount	% to Total	Payment Terms	Unit Price	Payment Term	Ending Balance	% to Total
Eternal Materials Co., Ltd. Eternal Electronic Material (Guangzhou) Co., Ltd. Eternal Materials (Guangdong) Co., Ltd. Eternal Specialty Materials (Suzhou) Co., Ltd. Eternal Photo Electronic Materials (Guangzhou) Co., Ltd. Eternal Specialty Materials (Zhuhai) Co., Ltd. Nikko Mechanics Co., Ltd. Eternal Chemical (China) Co., Ltd.	Eternal (China) Investment Co., Ltd. CHOU-KOU Materials Co., Ltd. Eternal Chemical (China) Co., Ltd. Eternal Specialty Materials (Zhuhai) Co., Ltd. Eternal Materials (Guangdong) Co., Ltd. Eternal Electronic Material (Thailand) Co., Ltd. Eternal Electronic Material (Guangzhou) Co., Ltd. Eternal Photo Electronic Materials (Guangzhou) Co., Ltd. Eternal Electronic Material (Guangzhou) Co., Ltd Eternal Photo Electronic Materials (Guangzhou) Co., Ltd. Allnex-Eternal Resins (Guangdong) Co., Ltd. Eternal Electronic (Suzhou) Co., Ltd Eternal Electronic (Suzhou) Co., Ltd. Eternal Electronic Material (Guangzhou) Co., Ltd. Eternal Materials Co., Ltd. Nikko-Materials Co., Ltd. Allnex-Eternal Resins (Guangdong) Co., Ltd.	Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Sister company Sister company Sister company Associates Sister company Sister company Sister company Ultimate parent company Parent company Associates	Sales Sales Sales Sales Sales Sales Sale Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales	$ 213,109 183,307 181,057 337,084 185,772 192,946 109,679 247,909 145,039 138,152 145,458 116,722 308,952 334,187 150,116 676,557 109,811	3 2 2 4 2 2 1 17 5 5 5 8 21 23 5 99 4	Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1	$ - - - - - - - - - - - - - - - - -	- - - - - - - - - - - - - - - - -	$ 127,985 109,872 100,110 137,858 112,927 156,790 39,556 214,243 54,301 55,610 97,405 102,144 345,742 304,695 71,581 270,837 134,536	3 3 2 3 3 4 1 13 2 2 4 10 19 17 4 100 5	Note 3 Note 3 Note 3 Note 3 Note 3 Note 3 Note 3 Note 3 Note 3 Note 3 Note 3 Note 3 Note 3 Note 3 Note 3

Note 1: The terms are similar to that of non-related party transactions.

Note 2: For transactions between related parties, only one side of the transaction was disclosed.

Note 3: Amounts were eliminated from the consolidated financial statements.

59 -

TABLE 6

Eternal Materials Co., Ltd. and Subsidiaries

RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL JUNE 30, 2021

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Company Name	Related Party	Relationship	Ending Balance	Turnover Rate	Overdue	Overdue	Amounts Received in Subsequent Period	Allowance for Doubtful Accounts
					Amount	Actions Taken
Eternal Materials Co., Ltd. Eternal Electronic Material (Guangzhou) Co., Ltd. Eternal Photo Electronic Materials (Guangzhou) Co., Ltd. Eternal Specialty Materials (Suzhou) Co., Ltd. Eternal Chemical (China) Co., Ltd. Nikko Mechanics Co., Ltd.	CHOU-KOU Materials Co., Ltd. Eternal Chemical (China) Co., Ltd. Eternal Specialty Materials (Zhuhai) Co., Ltd. Eternal Materials (Guangdong) Co., Ltd. Eternal Electronic Materials (Thailand) Co., Ltd. Eternal (China) Investment Co., Ltd. Eternal Photo Electronic Materials (Guangzhou) Co., Ltd. Eternal Electronic (Suzhou) Co., Ltd. Eternal Electronic Material (Guangzhou) Co., Ltd. Eternal Electronic (Suzhou) Co., Ltd. Allnex-Eternal Resins (Guangdong) Co., Ltd. Nikko-Materials Co., Ltd.	Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Sister company Sister company Sister company Sister company Associates Parent company	$ 109,872 100,110 137,858 112,927 156,790 127,985 214,243 345,742 304,695 102,144 134,536 270,837	3.37 3.59 4.87 3.41 2.69 3.75 2.09 1.62 2.22 3.12 1.77 4.61	$ - - - - 32,911 - 28,551 99,570 55,393 - - -	- - - - Collected subsequently - Collected subsequently Collected subsequently Collected subsequently - - -	$ 1,826 30,431 - 44,514 32,911 - 28,838 51,826 - 13,221 25,385 174,584	$ - - - - - - - - - 19 -

Note: Amount was eliminated from the consolidated financial statements, expect the investments accounted for using the equity method.

60 -

TABLE 7

Eternal Materials Co., Ltd. and Subsidiaries

INTERCOMPANY BUSINESS RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS FOR THE SIX MONTHS ENDED JUNE 30, 2021

(In Thousands of New Taiwan Dollars)

No. (Note 1)	Company Name	Counterparty	Relationship (Note 2)		Transactions Details	Transactions Details
				Financial Statement Item (Note 5)	Amount	Terms	% to Total Revenues or Assets
0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 2 2 2 2 3 3 3	Eternal Materials Co., Ltd. Eternal Materials Co., Ltd. Eternal Materials Co., Ltd. Eternal Materials Co., Ltd. Eternal Materials Co., Ltd. Eternal Materials Co., Ltd. Eternal Materials Co., Ltd. Eternal Materials Co., Ltd. Eternal Materials Co., Ltd. Eternal Materials Co., Ltd. Eternal Materials Co., Ltd. Eternal Materials Co., Ltd. Eternal Materials Co., Ltd. Eternal Holdings Inc. Eternal Holdings Inc. Eternal (China) Investment Co., Ltd. Eternal (China) Investment Co., Ltd. Eternal (China) Investment Co., Ltd. Eternal (China) Investment Co., Ltd. Eternal Chemical (China) Co., Ltd. Eternal Chemical (China) Co., Ltd. Eternal Chemical (China) Co., Ltd.	Eternal Specialty Materials (Zhuhai) Co., Ltd. Eternal Specialty Materials (Zhuhai) Co., Ltd. Eternal (China) Investment Co., Ltd. Eternal (China) Investment Co., Ltd. Eternal Electronic Material (Thailand) Co., Ltd. Eternal Electronic Material (Thailand) Co., Ltd. CHOU-KOU Materials Co., Ltd. CHOU-KOU Materials Co., Ltd. Eternal Materials (Guangdong) Co., Ltd. Eternal Materials (Guangdong) Co., Ltd. Eternal Chemical (China) Co., Ltd. Eternal Chemical (China) Co., Ltd. Eternal Electronic Material (Guangzhou) Co., Ltd. Eternal Technology Corporation Eternal Sun A. (Suzhou) Co., Ltd Eternal Chemical (Chengdu) Co., Ltd. Eternal Chemical (Tianjin) Co., Ltd. Eternal Synthetic Resins (Changshu) Co., Ltd. Eternal Electronic (Suzhou) Co., Ltd. Eternal Chemical (Tianjin) Co., Ltd. Eternal Synthetic Resins (Changshu) Co., Ltd. Eternal Chemical (Chengdu) Co., Ltd.	1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 3 3 3	Revenue from sales of goods Accounts receivable Revenue from sales of goods Accounts receivable Revenue from sales of goods Accounts receivable Revenue from sales of goods Accounts receivable Revenue from sales of goods Accounts receivable Revenue from sales of goods Accounts receivable Revenue from sales of goods Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties	$ 337,084 137,858 213,109 127,985 192,946 156,790 183,307 109,872 185,772 112,927 181,057 100,110 109,679 167,160 100,296 861,800 517,080 344,720 430,900 207,922 302,510 613,961	Note3 Note3 Note3 Note3 Note3 Note3 Note3 Note3 Note3 Note3 Note3 Note3 Note3 Note4 Note4 Note4 Note4 Note4 Note4 Note4 Note4 Note4	1.38 0.23 0.87 0.21 0.79 0.26 0.75 0.18 0.76 0.19 0.74 0.17 0.45 0.28 0.17 1.44 0.86 0.58 0.72 0.35 0.51 1.03
							(Continued)

61 -

No. (Note 1)	Company Name	Counterparty	Relationship (Note 2)		Transactions Details	Transactions Details
				Financial Statement Item (Note 5)	Amount	Terms	% to Total Revenues or Assets
4 4 5 5 5 5 6 6 7 7 8 8 9	Eternal Electronic Material (Guangzhou) Co., Ltd. Eternal Electronic Material (Guangzhou) Co., Ltd. Eternal Photo Electronic Materials (Guangzhou) Co., Ltd. Eternal Photo Electronic Materials (Guangzhou) Co., Ltd. Eternal Photo Electronic Materials (Guangzhou) Co., Ltd. Eternal Photo Electronic Materials (Guangzhou) Co., Ltd. Eternal Materials (Guangdong) Co., Ltd. Eternal Materials (Guangdong) Co., Ltd. Eternal Specialty Materials (Suzhou) Co., Ltd. Eternal Specialty Materials (Suzhou) Co., Ltd. Nikko Mechanics Co., Ltd Nikko Mechanics Co., Ltd. Eternal Specialty Materials (Zhuhai) Co.,Ltd.	Eternal Electronic Material (Guangzhou) Co., Ltd. Eternal Electronic Material (Guangzhou) Co., Ltd. Eternal Electronic (Suzhou) Co., Ltd. Eternal Electronic (Suzhou) Co., Ltd. Eternal Electronic Material (Guangzhou) Co., Ltd. Eternal Electronic Material (Guangzhou) Co., Ltd. Eternal Electronic Material (Guangzhou) Co., Ltd. Eternal Photo Electronic Materials (Guangzhou) Co., Ltd. Eternal Electronic (Suzhou) Co., Ltd. Eternal Electronic (Suzhou) Co., Ltd. Nikko-Materials Co., Ltd Nikko-Materials Co., Ltd. Eternal Materials Co., Ltd.	3 3 3 3 3 3 3 3 3 3 2 2 2	Revenue from sales of goods Accounts receivable Revenue from sales of goods Accounts receivable Revenue from sales of goods Accounts receivable Revenue from sales of goods Revenue from sales of goods Revenue from sales of goods Accounts receivable Revenue from sales of goods Accounts receivable Revenue from sales of goods	$ 247,909 214,243 308,952 345,742 334,187 304,695 145,039 138,152 116,722 102,144 676,557 270,837 150,116	Note3 Note3 Note3 Note3 Note3 Note3 Note3 Note3 Note3 Note3 Note3 Note3 Note3	1.02 0.36 1.27 0.58 1.37 0.51 0.59 0.57 0.48 0.17 2.77 0.45 0.61

(Concluded)

N ote 1: The transaction information of the Company and its subsidiaries is numbered in column “No.”. The representation of the numbers are as follows:

No. 0 represents the Company.
Subsidiaries are numbered in order from No. 1.

Note 2: The relationships among the transaction parties are as follows:

The parent company to subsidiary.
The subsidiary to the parent company.
The subsidiary to another subsidiary.

Note 3: The terms are similar to non-related party transactions.

Note 4: In accordance with the Operational Procedures for Lending Funds to Others.

Note 5: For transactions between related parties, only one side of the transaction was disclosed.

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TABLE 8

Eternal Materials Co., Ltd. and Subsidiaries

INFORMATION ON INVESTEES (EXCLUDING INVESTMENT IN MAINLAND CHINA) FOR THE SIX MONTHS ENDED JUNE 30, 2021 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount	Original Investment Amount	Balance as of June 30,	Balance as of June 30,	2021	Net Income (Loss) of the Investee	Investment Gain (Loss)	Note
				June 30, 2021	December 31, 2020	Number of Shares	Percentage of Ownership (%)	Carrying Amount
Eternal Materials Co., Ltd. Eternal Materials Co., Ltd. Eternal Materials Co., Ltd. Eternal Materials Co., Ltd. Eternal Materials Co., Ltd. Eternal Materials Co., Ltd. Eternal Materials Co., Ltd. Eternal Materials Co., Ltd. Eternal Materials Co., Ltd. Eternal Materials Co., Ltd. Eternal Materials Co., Ltd. Eternal Holdings Inc. Eternal Holdings Inc. Eternal Holdings Inc. Eternal Holdings Inc. Eternal Holdings Inc. Eternal Holdings Inc. Eternal International (BVI) Co., Ltd. Mixville Holdings Inc. Eternal (China) Investment Co., Ltd. Nikko-Materials Co., Ltd. Eternal Nanyang Investment Co., Ltd.	Eternal Holdings Inc. Eternal Global (BVI) Co., Ltd. Mixville Holdings Inc. Advanced PETFILM Investment Co., Ltd. Daxin Materials Corporation New E Materials Co., Ltd. DSM Resins (Far East) Co., Ltd. Eternal Electronic Material (Thailand) Co., Ltd. CHOU-KOU Materials Co., Ltd. Nikko-Materials Co., Ltd. Elga Europe S.r.l. Eternal International (BVI) Co., Ltd. E-Chem Corp. Eternal Nanyang Investment Co., Ltd. PT Eternal Materials Indonesia Allnex-Eternal Resins Corporation Limited Polymer Instrumentation and Consulting Services, Ltd. Eternal Technology Corporation High Expectation Limited Elga Europe S.r.l. Nikko Mechanics Co., Ltd. Eternal Materials (Malaysia) Sdn. Bhd.	Samoa British Virgin Islands British Virgin Islands Japan Taiwan Taiwan Taiwan Thailand Japan Japan Italy British Virgin Islands Samoa Samoa Indonesia Hong Kong United States United States Cayman Islands Italy Japan Malaysia	International investment International investment International investment International investment Manufacturing and selling of chemical, resins materials and electronic materials. Researching, developing, manufacturing and selling of photoelectric, semiconductor process related electronic chemical materials and equipment spare parts Manufacturing and selling of powder coating resin Trading services, cutting and selling of dry film photoresist Selling, trading and providing services of resins material, electronic material and other related products Manufacturing and selling of dry film photoresist and vacuum laminator Manufacturing, selling, agency and processing of electronic chemical products International investment International investment International investment Selling, trading of chemical Trading and international investment Plastic products manufacturing Manufacturing and selling of photoresist International investment Manufacturing, selling, agency and processing of electronic chemical products Designing, manufacturing, selling of industrial machinery and machine tool Manufacturing, selling, trading and providing services of resins material related products	$ 6,259,870 717,527 989,582 788,630 191,052 82,322 36,400 90,919 60,431 257,657 287,169 5,739,033 165,608 540,493 4,242 174,293 121,913 600,693 871,519 58,610 135,626 1,748,418	$ 6,259,870 717,527 989,582 788,630 191,052 82,322 36,400 90,919 60,431 257,657 287,169 5,739,033 165,608 540,493 - 174,293 121,913 600,693 871,519 58,610 135,626 1,748,418	204,273,859 16,821,024 29,530,000 270 23,423,812 6,907,585 3,660,000 937,500 4,000 11,520 - 183,793,592 4,990,000 18,450,000 207 5,341,000 4,694,296 2,333 26,005,000 - 6,560 347,324,000	100.00 100.00 100.00 20.00 22.80 62.80 40.00 75.00 100.00 100.00 72.68 100.00 100.00 90.00 67.00 49.00 30.00 100.00 100.00 22.32 100.00 100.00	$ 18,305,728 5,014,880 4,021,881 450,493 735,536 42,214 194,422 122,988 86,350 1,375,126 (4,852 ) 15,206,712 2,431,489 404,740 2,335 393,442 - (100,500 ) 3,845,226 (1,156 ) 369,094 1,576,709	$ 1,082,695 227,168 141,585 88,028 322,884 (7,084 ) 106,999 20,310 5,998 385,595 (25,406) 725,259 307,522 9,454 (2,580) 72,485 - (16,135 ) 147,863 (25,406 ) 76,748 18,431	$ 1,111,097 218,882 136,667 23,372 73,618 (4,449 ) 42,800 15,226 10,570 386,355 (18,465 ) - - - - - - - - - - -	Note Note Note Note Note Note Note Note Note Note Note

Note: It had been consolidated into the net income (loss) of investees recognized by the Company using the equity method, and also considered into the calculation of the Company’s investment income or loss.

63 -

TABLE 9

Eternal Materials Co., Ltd. and Subsidiaries

INFORMATION ON INVESTMENTS IN MAINLAND CHINA FOR THE PERIOD ENDED JUNE 30, 2021 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investee Company	Main Businesses and Products	Total Amount of Paid-in Capital	Method of Investment (Note 1)	Accumulated Outward Remittance for Investments from Taiwan as of January 1, 2021	Investment Flows	Investment Flows	Accumulated Outward Remittance for Investments from Taiwan as of June 30, 2021	Net Income (Loss) of the Investee	% of Ownership of Direct or Indirect Investment	Investment Gain (Loss)	Carrying Amount as of June 30, 2021	Accumulated Repatriation of Investment Income as of June 30, 2021	Note
					Outward	Inward
Eternal Chemical (China) Co., Ltd. DSM Eternal Resins (Kunshan) Co., Ltd. Changhe International Trading (GZFTZ) Co., Ltd. Eternal Electronic Material (Guangzhou) Co., Ltd. Eternal Optical Material (Suzhou) Co., Ltd. Eternal Photo Electronic Materials (Guangzhou) Co., Ltd. Eternal Photoelectric Material Industry (Yingkou) Co., Ltd. Eternal Electronic Materials (Kunshan) Co., Ltd. Eternal Synthetic Resins (Changshu) Co., Ltd. Eternal Chemical (Tianjin) Co., Ltd. Eternal Specialty Materials (Zhuhai) Co., Ltd. ESCO Specialty Coatings (Shanghai) Co., Ltd. Eternal Materials (Guangdong) Co., Ltd. Eternal (China) Investment Co., Ltd.	Manufacturing and selling of resins material and processing products Manufacturing and selling of powder coating resin International trading, commercial trading, entrepot trading, products displayed, bonded warehousing and business consulting services Coating, slitting, cutting, processing, and selling of photoresist Manufacturing and selling of optical film Researching, developing, manufacturing and selling of electronic high-tech chemical and related products Researching, developing and manufacturing of photoresist dry film, liquid photo imaginable solder masks and printed circuit board related materials Manufacturing and selling of epoxy molding compound which used in electronic parts and related products Manufacturing and selling of unsaturated polyester resin Manufacturing and selling of adhesives, resins material and processing products Manufacturing and selling of acrylic resin and methacrylic acid Researching, manufacturing and selling of processing electronic high-tech chemical, high performance coating, material and products Manufacturing and selling of adhesives, resins material and processing products Managing, investing consulting services, researching, leasing, manufacturing and selling of resins material and photoelectric chemicals materials	$ 755,651 183,470 13,661 1,259,046 1,563,967 997,694 469,402 524,337 726,426 1,008,004 611,011 403,180 1,297,259 7,557,603	2 2 2 2 2 2 2 2 2 2 2 2 2 2	$ 625,549 91,735 7,020 444,685 - - - 456,427 279,811 599,320 243,540 196,680 868,175 4,264,844	$ - - - - - - - - - - - - - -	$ - - - - - - - - - - - - - -	$ 625,549 91,735 7,020 444,685 - - - 456,427 279,811 599,320 243,540 196,680 868,175 4,264,844	$ 198,782 57,229 (161) 178,349 (28,133) 267,324 8,313 40,533 (9,723) 38,655 323,365 (9,913) 147,903 740,415	100.00 50.00 100.00 100.00 100.00 100.00 100.00 40.00 100.00 100.00 90.00 40.00 100.00 100.00	$ 198,782 28,615 (161) 178,349 (28,133) 267,324 8,313 19,388 (9,723) 38,655 307,512 (7,172) 147,903 740,415	$ 4,583,090 421,968 19,099 2,412,257 219,952 2,591,623 147,849 232,338 198,147 876,369 2,419,190 (20,988) 3,843,137 15,278,907	$ 1,081,282 479,187 - 983,767 - - - - - - 788,866 - 1,371,700 -	Note 2 Note 3 Note 3 Note 2 Note 3 Note 2 Note 3 Note 3 Note 3 Note 3 Note 2 Note 3 Note 3 Notes 3 and 4

(Continued)

64 -

Investee Company	Main Businesses and Products	Main Businesses and Products	Total Amount of Paid-in Capital	Method of Investment (Note 1)	Accumulated Outward Remittance for Investments from Taiwan as of January 1, 2021	Investment Flows	Investment Flows	Investment Flows	Accumulated Outward Remittance for Investments from Taiwan as of June 30, 2021	Net Income (Loss) of the Investee	% of Ownership of Direct or Indirect Investment	Investment Gain (Loss)	Carrying Amount as of June 30, 2021	Accumulated Repatriation of Investment Income as of June 30, 2021	Note
						Outward		Inward
Eternal Chemical (Chengdu) Co., Ltd. Eternal Electronic (Suzhou) Co., Ltd. Eternal Sun A. (Suzhou) Co., Ltd. Eternal Specialty Materials (Suzhou) Co., Ltd. Showa Denko New Material (Zhuhai) Co., Ltd.	Researching and developing resins material and products Researching, developing, and manufacturing of dry film photoresist and dry film solder mask which used in electronic materials, researching resin materials and selling, providing after sales service of self-produced products Researching, developing, and manufacturing of optical protective film which used in display, and selling, providing after sales service of self-produced products Researching and developing chemical products, and selling, providing technical services of self-produced products Manufacturing and selling and manufacturing of functional resins, resins composite material and providing technical services		$ 450,351 1,381,040 751,443 1,199,225 366,881	2 2 2 2 2	$ - - - - -	$	- - - - -	$ - - - - -	$ - - - - -	$ (59,258) 113,445 (58,364) 174,914 2,293	100.00 100.00 60.00 100.00 30.00	$ (59,258) 113,445 (35,018) 174,914 1,014	$ (440,825) 1,557,030 58,370 1,487,286 87,766	$ - - - - -	Note 3 Note 2 Note 3 Note 3 Note 3
														(Concluded)
Investor Company		Accumulated Outward Remittance for Investments in Mainland China as of June 30, 2021 (Note 5)		Investment Amount Authorized the Investment Commission, MOEA (Note 5)		by	Upper Limit on the Amount of Investments Stipulated by the Investment Commission, MOEA (Note 6)
Eternal Materials Co., Ltd.		$ 8,083,938		$ 24,577,535			$ -

Note 1: Investment methods are classified into the following three categories:

Direct investment in a company in mainland China.
Investing through companies in a third region (Eternal Holdings Inc., Eternal Global (BVI) Co., Ltd and Mixville Holdings Inc.).
Others.

Note 2: The investment gains and losses were recognized from the financial statements reviewed by the parent company’s CPA in the ROC.

Note 3: The investment gains and losses of the investee company were recognized from the financial statements which have not been reviewed by the parent company’s CPA.

Note 4: The investment gains and losses of Eternal (China) Investment Co., Ltd. included investment income (loss) recognized by the invested company.

Note 5: The amounts were translated into NTD using the current exchange rate.

Note 6: According to the “Regulation Governing the Approval of Investment or Technical Cooperation in Mainland China”, modified on August 29, 2008, the Company obtained the approval of the operational headquarters from the Industrial Development Bureau of Ministry of Economic Affairs. There is no ceiling for the investment amount.
65 -

TABLE 10

Eternal Materials Co., Ltd. and Subsidiaries

INFORMATION OF MAJOR SHAREHOLDERS June 30, 2021

Name of the Major Shareholder	Shares	Shares
	Number of Shares Owned	Percentage of Ownership
Kwang Yang Motor Co., Ltd. Kao, Ying-Shih Kwang Hsing Industrial Co., Ltd.	124,000,000 78,287,830 71,200,000	9.99 6.31 5.74

Note 1: The information of major shareholders presented in this table is provided by the Taiwan Depository & Clearing Corporation based on the number of ordinary shares and preference shares held by shareholders with ownership of 5% or greater, that have been issued without physical registration (including treasury shares) by the Company as of the last business day for the current quarter. The share capital in the consolidated financial statements may differ from the actual number of shares that have been issued without physical registration because of different preparation basis.
Note 2: If a shareholder delivers the shareholdings to the trust, the above information will be disclosed by the individual truster who opened the trust account. For shareholders who declare insider shareholdings with ownership greater than 10% in accordance with the Security and Exchange Act, the shareholdings include shares held by shareholders and those delivered to the trust over which shareholders have rights to determine the use of trust property. For information relating to insider shareholding declaration, refer to Market Observation Post System.
66 -

AI assistant

ETERNAL — Interim / Quarterly Report 2021

51898_rns_2021-11-05_0d0c1da2-2ec0-434e-a290-c6402b5c09a5.pdf

Eternal Materials Co., Ltd. and Subsidiaries

Consolidated Financial Statements for the Six Months Ended June 30, 2021 and 2020 and Independent Auditors’ Review Report (Stock Code:1717)

INDEPENDENT AUDITORS’ REVIEW REPORT

Opinion

Scope of Review

Basis for Qualified Conclusion

Qualified Conclusion

Notice to Readers

Eternal Materials Co., Ltd. and Subsidiaries

CONSOLIDATED BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

Eternal Materials Co., Ltd. and Subsidiaries

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings Per Share) (Reviewed, Not Audited)

Eternal Materials Co., Ltd. and Subsidiaries

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (In Thousands of New Taiwan Dollars, Except Dividends Per Share) (Reviewed, Not Audited)

Eternal Materials Co., Ltd. and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) (Reviewed, Not Audited)

Eternal Materials Co., Ltd. and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) (Reviewed, Not Audited)

Eternal Materials Co., Ltd. and Subsidiaries

1. GENERAL INFORMATION

2. APPROVAL OF FINANCIAL STATEMENTS

3. APPLICATION OF NEW AND AMENDED STANDARDS AND INTERPRETATIONS

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Statement of compliance

b. Basis of consolidation

1)Retirement Benefits.

2)Taxation

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

6. CASH AND CASH EQUIVALENTS

7. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

8. NOTES, ACCOUNTS RECEIVABLE AND OTHER RECEIVABLES

June 30, 2021

b. Other receivables

9. INVENTORIES

10. NON-CURRENT ASSETS AND LIABILITIES CLASSIFIED AS HELD FOR SALE

11. OTHER FINANCIAL ASSETS - CURRENT

12. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME - NON-CURRENT

13. SUBSIDIARIES

a. Subsidiaries included in the consolidated financial statements were as follows:

14. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

15. PROPERTY, PLANT AND EQUIPMENT

16. LEASE ARRANGEMENTS

c. Material lease activities and terms

d. Other lease information

17. INVESTMENT PROPERTIES

18. INTANGIBLE ASSETS

19. FINANCE LEASE RECEIVABLES

20. BORROWINGS

a. Short-term borrowings

21. RETIREMENT BENEFIT PLANS

22. EQUITY

b. Capital surplus

d. Other equity items

e. Non-controlling interests

23. REVENUE

24. PROFIT BEFORE INCOME TAX

a. Interest income

c. Finance costs

d. Depreciation and amortization

e. Employee benefits

g. Compensation of employees and remuneration of directors

25. INCOME TAX

26. EARNINGS PER SHARE

Number of ordinary shares

27. EQUITY TRANSACTIONS WITH NON-CONTROLLING INTERESTS

28. CASH FLOW INFORMATION

29. CAPITAL MANAGEMENT

30. FINANCIAL INSTRUMENTS

c. Categories of financial instruments

d. Financial risk management objectives and policies

1) Market risk

a) Foreign currency risk

Sensitivity analysis

c) Other price risk

2) Credit risk

3) Liquidity risk

ETERNAL Interim / Quarterly Report 2021