FTC - Interim / Quarterly Report 2020

FOXCONN TECHNOLOGY CO., LTD. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS’ REVIEW REPORT JUNE 30, 2020 AND 2019

For the convenience of readers and for information purpose only, the auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. In the event of any discrepancy between the English version and the original Chinese version or any differences in the interpretation of the two versions, the Chinese-language auditors’ report and financial statements shall prevail.

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INDEPENDENT AUDITORS' REVIEW REPORT TRANSLATED FROM CHINESE

To the Board of Directors and Shareholders of Foxconn Technology Co., Ltd.

Introduction

We have reviewed the accompanying consolidated balance sheets of Foxconn Technology Co., Ltd. and subsidiaries as at June 30, 2020 and 2019, and the related consolidated statements of comprehensive income for the three-month and six-month periods then ended, as well as the consolidated statements of changes in equity and of cash flows for the six-month periods then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies. Management is responsible for the preparation and fair presentation of these 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” as endorsed by the Financial Supervisory Commission. Our responsibility is to express a conclusion on these consolidated financial statements based on our reviews.

Scope of Review

Except as explained in the following paragraph, we conducted our reviews in accordance with the Statement of Auditing Standards No. 65, “Review of Financial Information Performed by the Independent Auditor of the Entity” in the Republic of China. A review of consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially 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 explained in Notes 4(3) and 6(7), we did not review the financial statements of certain insignificant consolidated subsidiaries and investments accounted for under equity method as well as the information disclosed in Note 13, which statements reflect total assets (including investments accounted for under equity method) of NT$38,613,999 thousand and NT$40,114,398 thousand, constituting 26% and 24% of the consolidated total assets, and total liabilities of NT$7,650,321 thousand and NT$6,555,617 thousand, constituting 15% and 10% of the consolidated total liabilities as at June 30, 2020 and 2019,

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respectively, and total comprehensive income (loss) (including share of profit (loss) and other comprehensive income (loss) of associates accounted for under equity method) of NT$297,811 thousand, (NT$50,817) thousand, (NT$100,176) thousand and NT$804,882 thousand, constituting 44%, (11%), 1% and 16% of the consolidated total comprehensive income (loss) for the three-month and six-month periods then ended, respectively.

Qualified Conclusion

Except for the adjustments to the consolidated financial statements, if any, as might have been determined to be necessary had the financial statements of certain consolidated subsidiaries and investments accounted for under equity method as well as the information disclosed in Note 13 been reviewed by independent accountants, that we might have become aware of had it not been for the situation described above, based on our reviews, nothing has come to our attention that causes us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of Foxconn Technology Co., Ltd. and subsidiaries as at June 30, 2020 and 2019, and of its consolidated financial performance for the three-month and six-month periods then ended, as well as its consolidated cash flows for the six-month periods then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, “Interim Financial Reporting” as endorsed by the Financial Supervisory Commission.

Feng, Jackie Wu, Han-Chi

For and on behalf of PricewaterhouseCoopers, Taiwan August 12, 2020

------------------------------------------------------------------------------------------------------------------------------------------------The accompanying consolidated financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying consolidated financial statements and report of independent accountants are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

As the financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

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FOXCONN TECHNOLOGY CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS JUNE 30, 2020, DECEMBER 31, 2019 AND JUNE 30, 2019

(Expressed in thousands of New Taiwan dollars) (The balance sheets as of June 30, 2020 and 2019 are reviewed, not audited)

				June 30, 2020			December 31, 2019			June 30, 2019
	Assets	Notes		AMOUNT	%		AMOUNT	%		AMOUNT	%
	Current assets
1100	Cash and cash equivalents	6(1)	`$`	`48,160,737`	`33`	`$`	`40,123,656`	`24`	`$`	`54,314,839`	`33`
1110	Current financial assets at fair	6(2)
	value through profit or loss			`9,282`	`-`		`21,081`	`-`		`176,391`	`-`
1136	Current financial assets at	6(4) and 8
	amortized cost, net			`26,627,777`	`18`		`34,717,011`	`21`		`22,977,647`	`14`
1170	Accounts receivable, net	6(5)		`15,146,561`	`10`		`13,447,539`	`8`		`14,188,674`	`9`
1180	Accounts receivable due from	7
	related parties, net			`7,240,590`	`5`		`16,122,773`	`10`		`12,039,670`	`8`
1200	Other receivables	7		`1,343,545`	`1`		`844,462`	`1`		`4,907,532`	`3`
130X	Inventories	6(6)		`3,645,404`	`3`		`2,512,591`	`2`		`3,633,198`	`2`
1470	Other current assets			`297,839`	`-`		`283,082`	`-`		`473,579`	`-`
11XX	Total current assets			`102,471,735`	`70`		`108,072,195`	`66`		`112,711,530`	`69`
	Non-current assets
1510	Non-current financial assets at	6(2)
	fair value through profit or loss			`419,439`	`-`		`493,296`	`-`		`525,370`	`-`
1517	Non-current financial assets at	6(3)
	fair value through other
	comprehensive income			`25,519,165`	`17`		`35,327,626`	`21`		`24,590,370`	`15`
1535	Non-current financial assets at	6(4)
	amortized cost, net			`2,930,704`	`2`		`3,874,615`	`2`		`4,070,102`	`3`
1550	Investments accounted for	6(7)
	under equity method			`5,475,006`	`4`		`5,791,082`	`4`		`8,750,447`	`5`
1600	Property, plant and equipment	6(8) and 7		`5,257,336`	`4`		`5,942,398`	`4`		`6,980,119`	`4`
1755	Right-of-use assets	6(9), 7 and 8		`1,162,144`	`1`		`1,282,774`	`1`		`2,004,463`	`1`
1760	Investment property - net	6(11)		`1,031,549`	`1`		`1,032,105`	`1`		`1,071,251`	`1`
1780	Intangible assets	6(12)		`1,479,369`	`1`		`1,577,962`	`1`		`1,717,193`	`1`
1840	Deferred tax assets			`643,588`	`-`		`549,302`	`-`		`698,892`	`1`
1900	Other non-current assets	6(13)		`621,485`	`-`		`632,462`	`-`		`681,898`	`-`
15XX	Total non-current assets			`44,539,785`	`30`		`56,503,622`	`34`		`51,090,105`	`31`
1XXX	Total assets		`$`	`147,011,520`	`100`	`$`	`164,575,817`	`100`	`$`	`163,801,635`	`100`
				(Continued)

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FOXCONN TECHNOLOGY CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS JUNE 30, 2020, DECEMBER 31, 2019 AND JUNE 30, 2019

(Expressed in thousands of New Taiwan dollars) (The balance sheets as of June 30, 2020 and 2019 are reviewed, not audited)

					June 30, 2020				December 31, 2019			June 30, 2019
	Liabilities and Equity	Notes			AMOUNT	%			AMOUNT	%		AMOUNT	%
	Current liabilities
2100	Short-term loans	6(14)		`$`	`16,323,280`	`11`		`$`	`15,765,436`	`9`	`$`	`24,563,753`	`15`
2120	Current financial liabilities at	6(2)
	fair value through profit or loss				`175,069`		`-`		`99,427`	`-`		`-`	`-`
2170	Accounts payable				`5,771,565`		`4`		`6,370,560`	`4`		`6,881,178`	`4`
2180	Accounts payable to related	7
	parties				`15,082,599`	`10`			`22,417,094`	`14`		`13,256,097`	`8`
2200	Other payables	6(15) and 7			`12,490,366`		`9`		`8,703,833`	`5`		`15,946,218`	`10`
2230	Current tax liabilities				`581,919`		`1`		`997,277`	`1`		`751,302`	`1`
2280	Current lease liabilities	7			`147,649`		`-`		`149,619`	`-`		`308,540`	`-`
2300	Other current liabilities				`301,080`		`-`		`337,283`	`-`		`254,389`	`-`
21XX	Total current liabilities				`50,873,527`	`35`			`54,840,529`	`33`		`61,961,477`	`38`
	Non-current liabilities
2570	Deferred tax liabilities				`534,071`		`-`		`683,987`	`1`		`589,431`	`-`
2580	Non-current lease liabilities	7			`239,560`		`-`		`322,580`	`-`		`834,783`	`1`
2600	Other non-current liabilities				`108,338`		`-`		`123,111`	`-`		`119,858`	`-`
25XX	Total non-current
	liabilities				`881,969`		`-`		`1,129,678`	`1`		`1,544,072`	`1`
2XXX	Total liabilities				`51,755,496`	`35`			`55,970,207`	`34`		`63,505,549`	`39`
	Equity attributable to owners of
	parent
	Share capital	6(17)
3110	Ordinary share				`14,144,852`	`10`			`14,144,852`	`9`		`14,144,852`	`9`
	Capital surplus	6(18)
3200	Capital surplus				`7,527,178`		`5`		`7,527,178`	`5`		`7,812,561`	`5`
	Retained earnings	6(19)
3310	Legal reserve				`12,731,133`		`9`		`12,018,153`	`7`		`12,018,153`	`7`
3320	Special reserve				`-`		`-`		`46,492`	`-`		`46,492`	`-`
3350	Unappropriated retained
	earnings				`65,860,075`	`45`			`68,099,323`	`41`		`63,731,609`	`39`
	Other equity interest	6(20)
3400	Other equity interest		`(`		`4,980,143 ) (`		`4)`		`6,783,427`	`4`		`2,466,098`	`1`
31XX	Total equity attributable to
	owners of parent				`95,283,095`	`65`			`108,619,425`	`66`		`100,219,765`	`61`
36XX	Non-controlling interests	6(21)	`(`		`27,071 )`		`- (`		`13,815 )`	`-`		`76,321`	`-`
3XXX	Total equity				`95,256,024`	`65`			`108,605,610`	`66`		`100,296,086`	`61`
	Commitments and Contingent	9
	Liabilities
	Significant Subsequent Events	11
3X2X	Total liabilities and equity			`$`	`147,011,520`	`100`		`$`	`164,575,817`	`100`	`$`	`163,801,635`	`100`

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

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FOXCONN TECHNOLOGY CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME SIX-MONTH PERIODS ENDED JUNE 30, 2020 AND 2019

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

Items	Notes	Three months ended June 30	Three months ended June 30
		2020	2019
4000 Operating revenue 5000 Operating costs 5900 Gross profit from operations Operating expenses 6100 Selling expenses 6200 Administrative expenses 6300 Research and development expenses 6000 Total operating expenses 6900 Net operating income Non-operating income and expenses 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Finance costs 7060 Share of loss of associates and joint ventures accounted for under equity method 7000 Total non-operating income and expenses 7900 Profit before income tax 7950 Tax expense 8200 Profit

(Continued)

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FOXCONN TECHNOLOGY CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME SIX-MONTH PERIODS ENDED JUNE 30, 2020 AND 2019

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

Items	Notes	Three months ended June 30	Three months ended June 30
		2020	2019
Components of other comprehensive income that will not be reclassified to profit or loss 8316 Unrealized (losses) gains from investments in equity instruments measured at fair value through other comprehensive income 8310 Other comprehensive income (loss) that will not be reclassified to profit or loss Components of other comprehensive income that will be reclassified to profit or loss 8361 Exchange differences on translation 8360 Other comprehensive income (loss) that will be reclassified to profit or loss 8300 Other comprehensive income (loss), net 8500 Total comprehensive income (loss) Profit (loss) attributable to: 8610 Owners of parent 8620 Non-controlling interests Comprehensive income (loss) attributable to: 8710 Owners of parent 8720 Non-controlling interests Earnings per share (in dollars) 9750 Basic earnings per share 9850 Diluted earnings per share

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

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FOXCONN TECHNOLOGY CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

SIX MONTHS ENDED JUNE 30, 2020 AND 2019

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

(UNAUDITED)

Notes				Equityattributable to	wners of theparent					Non-controlling interests	Total equity
	Ordinaryshare	Total capital surplus, additional paid-in capital		Retained Earnings			Other equityinterest		Total
			Legal reserve	Special reserve	Unappropriated retained earnings	d	Financial statements translation ifferences of foreign operations	Total Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income
6(20) 6(19) r 6(20) 6(19)	`$` `14,144,852` `-` `-` `-` `-` `-` `-` `-` `$` `14,144,852` `$` `14,144,852` `-` `-` `-` `-` `-` `-` `$` `14,144,852`	`$` `7,767,553` `-` `-` `-` `-` `-` `-` `45,008` `$` `7,812,561` `$` `7,527,178` `-` `-` `-` `-` `-` `-` `$` `7,527,178`	`$` `11,103,487` `-` `-` `-` `914,666` `-` `-` `-` `$` `12,018,153` `$` `12,018,153` `-` `-` `-` `712,980` `-` `-` `$` `12,731,133`	`$` `-` `-` `-` `-` `-` `46,492` `-` `-` `$` `46,492` `$` `46,492` `-` `-` `-` `-` `(` `46,492 )` `-` `$` `-`	`$` `66,542,261` `2,676,859` `-` `2,676,859` `(` `914,666 )` `(` `46,492 )` `(` `4,526,353 )` `-` `$` `63,731,609` `$` `68,099,323` `1,963,453` `-` `1,963,453` `(` `712,980 )` `46,492` `(` `3,536,213 )` `$` `65,860,075`		`($` `2,578,011 )` `-` `1,205,636` `1,205,636` `-` `-` `-` `-` `($` `1,372,375 )` `($` `6,126,569 )` `-` `(` `2,185,912 )` `(` `2,185,912 )` `-` `-` `-` `($` `8,312,481 )`	`$` `2,531,519` `-` `1,306,954` `1,306,954` `-` `-` `-` `-` `$` `3,838,473` `$` `12,909,996` `-` `(` `9,577,658` `)` `(` `9,577,658` `)` `-` `-` `-` `$` `3,332,338`	`$` `99,511,661` `2,676,859` `2,512,590` `5,189,449` `-` `-` `(` `4,526,353 )` `45,008` `$ 100,219,765` `$ 108,619,425` `1,963,453` `(` `11,763,570 )` `(` `9,800,117 )` `-` `-` `(` `3,536,213 )` `$` `95,283,095`	`$` `78,273` `(` `2,844 )` `892` `(` `1,952 )` `-` `-` `-` `-` `$` `76,321` `($` `13,815 )` `(` `13,894 )` `638` `(` `13,256 )` `-` `-` `-` `($` `27,071 )`	`$` `99,589,934` `2,674,015` `2,513,482` `5,187,497` `-` `-` `(` `4,526,353` `)` `45,008` `$ 100,296,086` `$ 108,605,610` `1,949,559` `(` `11,762,932` `)` `(` `9,813,373` `)` `-` `-` `(` `3,536,213` `)` `$` `95,256,024`

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

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FOXCONN TECHNOLOGY CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

SIX-MONTH PERIODS ENDED JUNE 30, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars) (UNAUDITED)

CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax
Adjustments
Income and expenses having no effect on cash
flows
Depreciation expense (including investment
property and right-of-use assets)

Amortization

Expected credit (gain) loss

Net loss on financial assets or liabilities at fair
value through profit or loss
Gain on disposal of property, plant and
equipment

Interest expense
Interest income

Dividend income

Share of loss of associates and joint ventures
accounted for under equity method

Changes in assets/liabilities relating to operating
activities
Changes in operating assets
Accounts receivable net
Accounts receivable due from related parties
Other receivables
Inventories
Other current assets
Other non-current assets
Net changes in liabilities relating to operating
activities
Accounts payable
Accounts payable to related parties
Other payables
Other current liabilities
Other non-current liabilities
Cash (outflow) inflow generated from operations
Income taxes paid
Net cash flows (used in) from operating
activities Six months ended June 30
Notes
2020
2019
$
2,282,033 $
3,080,984
6(26)
744,217
1,059,356
6(26)
56,241
70,189
12(2)
(
1,800 )
1,057
148,824
391,542
6(25)
(
33,708 ) (
134,302 )
164,194
195,766
6(23)
(
1,190,772 ) (
1,323,221 )
6(24)
(
324,622 ) (
364,464 )
6(7)
253,493
152,419
(
1,750,917 )
2,354,325

8,561,286
3,919,040
246,887
928,369
(
1,190,390 ) (
699,801 )
(
22,500 )
16,479
1,984
8,377
(
498,042 ) (
1,371,640 )
(
7,144,303 ) (
5,211,950 )
(
319,546 ) (
1,726,421 )
(
31,825 ) (
71,924 )
(
11,911 )
8,393
(
61,177 )
1,282,573
(
875,649 ) (
1,141,774 )
(
936,826 )
140,799

(Continued)

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FOXCONN TECHNOLOGY CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

SIX-MONTH PERIODS ENDED JUNE 30, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars) (UNAUDITED)

CASH FLOWS FROM INVESTING ACTIVITIES
Increase in financial assets at amortized cost -
current
Decrease in financial assets at amortized cost -
current
Acquisition of financial assets at fair value through
profit or loss
Decrease in financial assets at amortized cost - non-
current
Increase in financial assets at amortized cost - non-
current
Cash paid for business combination
Acquisition of property, plant and equipment

Proceeds from disposal of property, plant and
equipment

Increase in net receivable/ payable on raw materials
Interest received
Dividends received

(Increase) decrease in refundable deposits
Net cash flows from (used in) investing
activities
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in short-term loans
Decrease in short-term loans
Payments of lease liabilities
Interest paid
Net cash flows from financing activities
Effect of changes in foreign currency exchange rates
on cash
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period Six months ended June 30
Notes
2020
2019
($
861,851 ) ($
6,714,654 )
8,356,166
1,575,408
- (
569,559 )
1,279,800
1,369,020
(
426,600 )
-
- (
4,319,741 )
6(30)
(
167,697 ) (
749,575 )
6(30)
294,587
93,867

(
8,377 ) (
842,135 )
1,004,330
1,363,566
6(24)
324,622
364,464
(
14,276 )
48,340
9,780,704 (
8,380,999 )
16,231,160
24,419,024
(
15,597,453 ) (
13,744,542 )
(
83,906 ) (
191,274 )
(
161,096 ) (
175,353 )
388,705
10,307,855
(
1,195,502 )
55,483
8,037,081
2,123,138
40,123,656
52,191,701
$
48,160,737 $
54,314,839

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

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FOXCONN TECHNOLOGY CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS SIX-MONTH PERIODS ENDED JUNE 30, 2020 AND 2019 (Expressed in thousands of New Taiwan dollars, except as otherwise indicated) (UNAUDITED)

1. HISTORY AND ORGANIZATION

The Company was originally known as Q-RUN Technology Co., Ltd. and established on April 26, 1990. On March 1, 2004, the Company merged with Foxconn Precision Components Co., Ltd. and was renamed as Foxconn Technology Co., Ltd. The Company and its subsidiaries (collectively referred herein as “the Group”) are primarily engaged in manufacturing, processing and sales of case, heat dissipation modules and consumer electronics products.

THE DATE OF AUTHORIZATION FOR ISSUANCE OF THE CONSOLIDATED FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORIZATION

These consolidated financial statements were reported to the Board of Directors and issued on August 12, 2020.

APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS
(1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS”) as endorsed by the Financial Supervisory Commission (“FSC”)

==> picture [503 x 65] intentionally omitted <==

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Effective Date by
International
Accounting
New Standards, Interpretations and Amendments Standards Board
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(2)

The above standards and interpretations have no significant impact to the Group’s financial condition
and financial performance based on the Group’s assessment.
Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by
the Group
None.
Amendments to IAS 1 and IAS 8, ‘Disclosure initiative-definition of
material’
January 1, 2020
Amendments to IFRS 3, ‘Definition of a business’
January 1, 2020
Amendments to IFRS 9, IAS 39 and IFRS 7, ‘Interest rate benchmark
reform’
January 1, 2020
Amendments to IFRS 16, ‘Covid-19-related rent concessions’
June 1, 2020

(3) IFRSs issued by IASB but not yet endorsed by the FSC

New standards, interpretations and amendments issued by IASB but not yet included in the IFRSs as endorsed by the FSC are as follows:

endorsed by the FSC are as follows:
	Effective Date by
	International Accounting
New Standards,Interpretations andAmendments	Standards Board
Amendments to IFRS 4, ‘Extension of the temporary exemption from	January 1, 2021
applying IFRS 9’
Amendments to IFRS 3, ‘Reference to the conceptual framework’	January 1, 2022

~11~

Effective Date by International Accounting New Standards, Interpretations and Amendments Standards Board Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets To be determined by between an investor and its associate or joint venture’ International Accounting Standards Board IFRS 17, ‘Insurance contracts’ January 1, 2023 Amendments to IFRS 17, ‘Insurance contracts’ January 1, 2023 Amendments to IAS 1, ‘Classification of liabilities as current or nonJanuary 1, 2023 current’ Amendments to IAS 16, ‘Property, plant and equipment: proceeds January 1, 2022 before intended use’ — Amendments to IAS 37, ‘Onerous contracts cost of fulfilling a January 1, 2022 contract’ — Annual improvements to IFRS Standards 2018 2020 January 1, 2022

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

(1) Compliance statement

The consolidated financial statements of the Group have been prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and the International Accounting Standard 34, “Interim financial reporting” endorsed by the FSC.

(2) Basis of preparation

A. Except for the following items, the consolidated financial statements have been prepared under the historical cost convention:
(a) Financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.
(b) Financial assets at fair value through other comprehensive income.
(c) Defined benefit liabilities recognized based on the net amount of pension fund assets less present value of defined benefit obligation.
B. The preparation of financial statements in conformity with International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the “IFRSs”) requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.

(3) Basis of consolidation

A. Basis for preparation of consolidated financial statements:
(a) All subsidiaries are included in the Group’s consolidated financial statements. Subsidiaries are all entities (including structured entities) controlled by the Group. The Group controls an entity when the Group is exposed, or has rights, to variable returns from its involvement with the

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entity and has the ability to affect those returns through its power over the entity. Consolidation of subsidiaries begins from the date the Group obtains control of the subsidiaries and ceases when the Group loses control of the subsidiaries.

(b) Inter-company material transactions, balances and unrealized gains or losses on transactions between companies within the Group are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure the consistency with the policies adopted by the Group.
(c) Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to the owners of the parent and to the non-controlling interests even if this results in the noncontrolling interests having a deficit balance.
(d) Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity.
(e) When the Group loses control of a subsidiary, the Group remeasures any investment retained in the former subsidiary at its fair value. That fair value is regarded as the fair value on initial recognition of a financial asset or the cost on initial recognition of the associate or joint venture. Any difference between fair value and carrying amount is recognized in profit or loss. All amounts previously recognized in other comprehensive income in relation to the subsidiary are reclassified to profit or loss.
B. Subsidiaries included in the consolidated financial statements:

Investor	Subsidiary	Main BusinessActivities Investment holdings in companies in Mainland China, Hong Kong and America primarily engaged in manufacturing, sale, research and development of computer thermal module and computer components Investment holdings in companies in Mainland China, Hong Kong, Singapore and America primarily engaged in manufacturing, sale, research and development of aluminum magnesium case and computer components Investment holdings in R.O.C. companies	Ownership (%)	Ownership (%)	June 30, 2019 100 100 100	Note
			June 30, 2020 100 100 100	December 31,2019 100 100 100
Foxconn Technology Co., Ltd. Foxconn Technology Co., Ltd. Foxconn Technology Co., Ltd.	Foxconn Precision Components Holding Co., Ltd. Q-RUN Holdings Ltd. Huazhun Investment Co., Ltd.					(a) (b)

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Ownership (%)
June 30, December June 30,
Investor Subsidiary Main Business Activities 2020 31, 2019 2019 Note
----- End of picture text -----

Investor	Subsidiary	Main BusinessActivities	June 30, 2020	December 31,2019	June 30, 2019	Note
Foxconn	Atkinson	Investment holding and	100	100	100	(a)
Precision	Holdings Ltd.	reinvestment				(b)
Components
Holding Co.,
Ltd.
Q-RUN	Q-RUN	Investment holding and	100	100	100
Holdings Ltd.	Far East	reinvestment
	Corporation
Q-RUN	World Trade	Investment holding and	100	100	100	(a)
Holdings Ltd.	Trading Ltd.	reinvestment
Q-RUN	High Tempo	Investment holding and	100	100	100	(a)
Holdings Ltd.	International	reinvestment				(b)
	Ltd.
Q-RUN	FTC	Investment holding and	100	100	100	(a)
Holdings Ltd.	Technology	reinvestment				(b)
	Inc.
Q-RUN	Foxconn	Sales, investment holdings	100	100	100
Holdings Ltd.	Technology	and reinvestment
	Pte. Ltd.
Atkinson	Kenny	Investment holding and	100	100	100	(a)
Holdings Ltd.	International	reinvestment				(b)
	Ltd.
Atkinson	Double Wealth	Investment holding and	100	100	100	(a)
Holdings Ltd.	Profits Ltd.	reinvestment				(b)
Atkinson	Precious Star	Investment holding and	100	100	100	(a)
Holdings Ltd.	International	reinvestment				(b)
	Ltd.
Q-RUN	Eastern Star	Investment holding and	100	100	100
Far East	Limited	reinvestment
Corporation
Q-RUN	Foreign	Investment holding and	100	100	100	(a)
Far East	Technology	reinvestment				(b)
Corporation	Ltd.
Q-RUN	Topfry	Investment holding and	100	100	100	(a)
Far East	Industrial Ltd.	reinvestment				(b)
Corporation

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Ownership (%)
June 30, December June 30,
Investor Subsidiary Main Business Activities 2020 31, 2019 2019 Note
----- End of picture text -----

Investor	Subsidiary	Main BusinessActivities	June 30, 2020	December 31,2019	June 30, 2019	Note
Q-RUN	Gold Glory	Investment holding and	100	100	100	(a)
Far East	International	reinvestment				(b)
Corporation	Ltd.
Q-RUN	New Glory	Investment holding and	100	100	100	(a)
Far East	Holdings Ltd.	reinvestment				(b)
Corporation
Foxconn	FTP	Investment holding and	100	100	100	(a)
Technology	Technology	reinvestment				(b)
Pte. Ltd.	Inc.
Kenny	Fu Yu	Manufacturing and marketing of	22.76	22.76	22.76	(a)
International	Precision	power plug and wall socket,				(b)
Ltd.	Components	micro ribbon connectors for
	(Kunshan)	terminals, etc.
	Co., Ltd.
Double	Fuzhun	Manufacturing and marketing of	100	100	100	(a)
Wealth	Precision	computer components (computer				(b)
Profits Ltd.	(Shenzhen)	thermal module)
	Industry
	Co., Ltd.
Fuzhun	Fuyu	Production of LED lamps and	100	100	100	(a)
Precision	Technology	LED display; engagement in				(b)
(Shenzhen)	(Nanyang)	smart light pole and other
Industry	Co., Ltd.	products in relation to LED
Co., Ltd.
Fuzhun	Champ	Manufacturing and marketing	65	65	65	(a)
Precision	Tech	of computer components				(b)
(Shenzhen)	Optical	(computer thermal module)
Industry	(Foshan)
Co., Ltd.	Corporation
Eastern Star	Hon Fujin	Manufacturing and marketing of	87.63	87.63	87.63
Limited	Precision	computer components and
	Industry	peripherals and computer cases
	(Taiyuan)
	Co., Ltd.

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Ownership (%)
June 30, December June 30,
Investor Subsidiary Main Business Activities 2020 31, 2019 2019 Note
----- End of picture text -----

Investor	Subsidiary	Main BusinessActivities	June 30, 2020	December 31,2019	June 30, 2019	Note
Eastern Star	Fuzhun	New alloy material, precision	100	100	100	(a)
Limited	Precision	molds, new electronic				(b)
	(Hebi)	components, portable
	Electronics	computers
	Co., Ltd.	and their components
Precious Star	Hon Fujin	Manufacturing and marketing of	12.37	12.37	12.37
International	Precision	computer components and
Ltd.	Industry	related peripherals, computer
	(Taiyuan)	cases and metal stamping
	Co., Ltd.
Hon Fujin	Qingdao Hiyn	Research, development,	70	70	70	(a)
Precision	Materials	production and sales of				(b)
Industry	Co., Ltd.	aluminum alloy materials, rail
(Taiyuan)		vehicle components, car
Co., Ltd.		accessories and electronic
		components; manufacturing and
		sales of structured metal
		products and metal container
		(not including precious metal
		and electroplating)
Hon Fujin	Fuzhun	Manufacture and sale of	100	100	100	(a)
Precision	Precision	automobile parts; manufacture				(b)
Industry	Industry	and sale of aluminum alloy parts
(Taiyuan)	(Shenyang)	used for automobiles and
Co., Ltd.	Co., Ltd.	electronics
Topfry	Fuhuigang	Manufacturing and marketing of	100	100	100	(a)
Industrial	Industral	computer case – electronic and				(b)
Ltd.	(Shenzhen)	electrical components
	Co., Ltd.
Gold Glory	Fu Yu	Manufacturing and marketing of	77.24	77.24	77.24	(a)
International	Precision	power plug and wall socket,				(b)
Ltd.	Components	micro ribbon connectors for
	(Kunshan)	terminals, etc.
	Co., Ltd.

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Ownership (%)
June 30, December June 30,
Investor Subsidiary Main Business Activities 2020 31, 2019 2019 Note
----- End of picture text -----

Investor	Subsidiary	Main BusinessActivities	June 30, 2020	December 31,2019	June 30, 2019	Note
Fu Yu	Champ	Manufacturing and marketing	35	35	35	(a)
Precision	Tech	of computer components				(b)
Components	Optical	(computer thermal module)
(Kunshan)	(Foshan)
Co., Ltd.	Corporation
New Glory	YanTai	Manufacturing and marketing of	100	100	100	(a)
Holdings	Fuzhun	computer case – electronic and				(b)
Limited	Precision	electrical components
	Electronics
	Co., Ltd.
New Glory	Nanning	Manufacturing and marketing of	100	100	100	(a)
Holdings	Funing	computer components				(b)
Limited	Precision	(computer thermal module)
	Electronics
	Co., Ltd.

  - (a) As the aforementioned subsidiaries do not meet the definition of significant subsidiaries, their financial statements for the second quarter of 2020 were not reviewed by independent accountants.

  - (b) As the aforementioned subsidiaries do not meet the definition of significant subsidiaries, their financial statements for the second quarter of 2019 were not reviewed by independent accountants.

C. Subsidiaries not included in the consolidated financial statements: None.
D. Adjustments for subsidiaries with different balance sheet dates: None.
E. Significant restrictions: None.
F. Subsidiaries that have non-controlling interests that are material to the Group: None.
(4) Foreign currency translation

The consolidated financial statements are presented in NTD, which is the Company’s functional and the Group’s presentation currency.

A. Foreign currency transactions and balances
(a) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognized in profit or loss in the period in which they arise.
(b) Monetary assets and liabilities denominated in foreign currencies at the period end are retranslated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognized in profit or loss.
(c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in other comprehensive income. However, non-

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monetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.

  - (d) All foreign exchange gains and losses are presented in the statement of comprehensive income within ‘other gains and losses’.

B. Translation of foreign operations
- (a) The operating results and financial position of all the group entities, associates and joint arrangements that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
  - i. Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;
  - ii. Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and
  - iii. All resulting exchange differences are recognized in other comprehensive income.
- (b) When the foreign operation partially disposed of or sold is an associate, exchange differences that were recorded in other comprehensive income are proportionately reclassified to profit or loss as part of the gain or loss on sale. In addition, even the Group still retains partial interest in the former foreign associate after losing significant influence over the former foreign associate, such transactions should be accounted for as disposal of all interest in these foreign operations.
- (c) When the foreign operation partially disposed of or sold is a subsidiary, cumulative exchange differences that were recorded in other comprehensive income are proportionately transferred to the non-controlling interest in this foreign operation. In addition, even the Group still retains partial interest in the former foreign subsidiary after losing control of the former foreign subsidiary, such transactions should be accounted for as disposal of all interest in the foreign operation.
(5) Classification of current and non-current items
A. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:
- (a) Assets arising from operating activities that are expected to be realized, or are intended to be sold or consumed within the normal operating cycle;
- (b) Assets held mainly for trading purposes;
- (c) Assets that are expected to be realized within twelve months from the balance sheet date;
- (d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to pay off liabilities more than twelve months after the balance sheet date.
B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:
- (a) Liabilities that are expected to be paid off within the normal operating cycle;
- (b) Liabilities arising mainly from trading activities;
- (c) Liabilities that are to be paid off within twelve months from the balance sheet date;
- (d) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

(6) Cash equivalents

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

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(7) Financial assets at fair value through profit or loss
A. Financial assets at fair value through profit or loss are financial assets that are not measured at amortized cost or fair value through other comprehensive income. Financial assets at amortized cost or fair value through other comprehensive income are designated as at fair value through profit or loss at initial recognition when they eliminate or significantly reduce a measurement or recognition inconsistency.
B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognized and derecognized using trade date accounting.
C. At initial recognition, the Group measures the financial assets at fair value and recognizes the transaction costs in profit or loss. The Group subsequently measures the financial assets at fair value, and recognizes the gain or loss in profit or loss.
D. The Group recognizes the dividend income when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.
(8) Financial assets at fair value through other comprehensive income
A. Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Group has made an irrevocable election at initial recognition to recognize changes in fair value in other comprehensive income and debt instruments which meet all of the following criteria:
- (a) The objective of the Group’s business model is achieved both by collecting contractual cash flows and selling financial assets; and
- (b) The assets’ contractual cash flows represent solely payments of principal and interest.
B. On a regular way purchase or sale basis, financial assets at fair value through other comprehensive income are recognized and derecognized using trade date accounting.
C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs. The Group subsequently measures the financial assets at fair value:
- (a) The changes in fair value of equity investments that were recognized in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the derecognition of the investment. Dividends are recognized as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.
- (b) Except for the recognition of impairment loss, interest income and gain or loss on foreign exchange which are recognized in profit or loss, the changes in fair value of debt instruments are taken through other comprehensive income. When the financial asset is derecognized, the cumulative gain or loss previously recognized in other comprehensive income is reclassified from equity to profit or loss.
(9) Financial assets at amortized cost
A. Financial assets at amortized cost are those that meet all of the following criteria:
- (a) The objective of the Group’s business model is achieved by collecting contractual cash flows.
- (b) The assets’ contractual cash flows represent solely payments of principal and interest.
B. On a regular way purchase or sale basis, financial assets at amortized cost are recognized and derecognized using trade date accounting.
C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs. Interest income from these financial assets is included in finance income using the effective interest method. A gain or loss is recognized in profit or loss when the asset is derecognized or impaired.
D. The Group’s time deposits which do not fall under cash equivalents are those with a short maturity period and are measured at initial investment amount as the effect of discounting is immaterial.

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(10) Accounts and notes receivable
A. Accounts and notes receivable entitle the Group a legal right to receive consideration in exchange for transferred goods or rendered services.
B. The short-term accounts and notes receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.
C. The Group’s operating pattern of accounts receivable that are expected to be factored is for the purpose of receiving contract cash flow and selling, and the accounts receivable are subsequently measured at fair value, with any changes in fair value recognized in other comprehensive income.
(11) Impairment of financial assets
For financial assets at amortized cost, at each reporting date, the Group recognizes the impairment provision for 12 months expected credit losses if there has not been a significant increase in credit risk since initial recognition or recognizes the impairment provision for the lifetime expected credit losses (ECLs) if such credit risk has increased since initial recognition after taking into consideration all reasonable and verifiable information that includes forecasts. On the other hand, for accounts receivable or contract assets that do not contain a significant financing component, the Group recognizes the impairment provision for lifetime ECLs.
(12) Derecognition of financial assets
The Group derecognizes a financial asset when the contractual rights to receive the cash flows from the financial asset expire.
(13) Leasing arrangements (lessor) operating leases

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

(14) Inventories
Inventories are stated at the lower of cost and net realizable value. Cost is determined using the weighted-average method. The cost of finished goods and work in process comprises raw materials, direct labor, other direct costs and related production overheads (allocated based on normal operating capacity). It excludes borrowing costs. The item by item approach is used in applying the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and applicable variable selling expenses.
(15) Investments accounted for under equity method / associates
A. Associates are all entities over which the Group has significant influence but not control. In general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly 20 per cent or more of the voting power of the investee. Investments in associates are accounted for using the equity method and are initially recognized at cost.
B. The Group’s share of its associates’ post-acquisition profits or losses is recognized in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.
C. When changes in an associate’s equity do not arise from profit or loss or other comprehensive income of the associate and such changes do not affect the Group’s ownership percentage of the associate, the Group recognizes change in ownership interests in the associate in ‘capital surplus’ in proportion to its ownership.
D. Unrealized gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been adjusted where necessary to ensure consistency with the policies adopted

~20~

by the Group.

E. In the case that an associate issues new shares and the Group does not subscribe or acquire new shares proportionately, which results in a change in the Group’s ownership percentage of the associate but maintains significant influence on the associate, then ‘capital surplus’ and ‘investments accounted for under the equity method’ shall be adjusted for the increase or decrease of its share of equity interest. If the above condition causes a decrease in the Group’s ownership percentage of the associate, in addition to the above adjustment, the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately on the same basis as would be required if the relevant assets or liabilities were disposed of.
F. Upon loss of significant influence over an associate, the Group remeasures any investment retained in the former associate at its fair value. Any difference between fair value and carrying amount is recognized in profit or loss.
G. When the Group disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss, on the same basis as would be required if the relevant assets or liabilities were disposed of. If it retains significant influence over this associate, the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately in accordance with the aforementioned approach.
(16) Property, plant and equipment
A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalized.
B. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.
C. Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.
D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change. The estimated useful lives for buildings and structures, machinery and equipment and other equipment are 3~55 years, 1~10 years and 1~10 years, respectively.
(17) Leasing arrangements (lessee) - right-of-use assets/ lease liabilities
A. Leases are recognized as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Group. For short-term leases or leases of lowvalue assets, lease payments are recognized as an expense on a straight-line basis over the lease term.
B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. Lease payments are comprised of fixed payments, less any lease incentives receivable. The Group subsequently measures the lease liability at amortized cost using the interest method and recognizes interest expense over the lease term. The lease liability is remeasured and the

~21~

amount of remeasurement is recognized as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.

C. At the commencement date, the right-of-use asset is stated at cost comprising the following: (a) The amount of the initial measurement of lease liability;
(b) Any lease payments made at or before the commencement date; and
(c) Any initial direct costs incurred by the lessee;

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

D. For lease modifications that decrease the scope of the lease, the lessee shall decrease the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognize the difference between remeasured lease liability in profit or loss.
(18) Investment property

An investment property is stated initially at its cost and measured subsequently using the cost model. Except for land, investment property is depreciated on a straight-line basis over its estimated useful life of 8 ~ 55 years.

(19) Intangible assets
A. Goodwill arises in a business combination accounted for by applying the acquisition method.
B. Patent rights and technical skill are amortized on a straight-line basis over their estimated useful lives of 5 years.
(20) Impairment of non-financial assets
A. The Group assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. Except for goodwill, when the circumstances or reasons for recognizing impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortized historical cost would have been if the impairment had not been recognized.
B. The recoverable amounts of goodwill that have not yet been available for use are evaluated periodically. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. Impairment loss of goodwill previously recognized in profit or loss shall not be reversed in the following years.
C. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash-generating units, or groups of cash-generating units, that is/are expected to benefit from the synergies of the business combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes. Goodwill is monitored at the operating segment level.

(21) Loans

Loans comprise long-term and short-term bank loans and other long-term and short-term loans. Loans are recognized initially at fair value, net of transaction costs incurred. Loans are subsequently stated at amortized cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognized in profit or loss over the period of the loans using the effective interest method.

(22) Accounts and notes payable
A. Accounts payable are liabilities for purchases of raw materials, goods or services and notes

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payable are those resulting from operating and non-operating activities.

B. The short-term notes and accounts payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.
(23) Financial liabilities at fair value through profit or loss
A. Financial liabilities are classified in this category of held for trading if acquired principally for the purpose of repurchasing in the short-term. Derivatives are also categorized as financial liabilities held for trading unless they are designated as hedges.
B. At initial recognition, the Group measures the financial liabilities at fair value. All related transaction costs are recognized in profit or loss. The Group subsequently measures these financial liabilities at fair value with any gain or loss recognized in profit or loss.
(24) Derecognition of financial liabilities

A financial liability is derecognized when the obligation specified in the contract is either discharged or cancelled or expires.

(25) Offsetting financial instruments

Financial assets and liabilities are offset and reported in the net amount in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously.

(26) Non-hedging derivatives

Non-hedging derivatives are initially recognized at fair value on the date a derivative contract is entered into and recorded as financial assets or financial liabilities at fair value through profit or loss. They are subsequently remeasured at fair value and the gains or losses are recognized in profit or loss.

(27) Employee benefits
A. Short-term employee benefits

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

B. Pensions
(a) Defined contribution plans

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

(b) Defined benefit plans
i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Group in current period or prior periods. The liability recognized in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of government bonds (at the balance sheet date) of a currency and term consistent with the currency and term of the employment benefit obligations.
ii. Remeasurements arising on defined benefit plans are recognized in other comprehensive income in the period in which they arise and are recorded as retained earnings.
iii. Pension cost for the interim period is calculated on a year-to-date basis by using the pension cost rate derived from the actuarial valuation at the end of the prior financial year, adjusted for significant market fluctuations since that time and for significant curtailments, settlements, or other significant one-off events. And, the related information is disclosed accordingly.

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C. Employees’ compensation, directors’ and supervisors’ remuneration
- Employees’ compensation and directors’ and supervisors’ remuneration are recognized as expenses and liabilities, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates. If employees compensation is paid by shares, the Group calculates the number of shares based on the closing price at the previous day of the board meeting resolution .
(28) Income tax
A. The tax expense for the period comprises current and deferred tax. Tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or items recognized directly in equity, in which cases the tax is recognized in other comprehensive income or equity.
B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.
C. Deferred tax is recognized, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated balance sheet. However, the deferred tax is not accounted for if it arises from initial recognition of goodwill or of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realized or the deferred tax liability is settled.
D. Deferred tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. At each balance sheet date, unrecognized and recognized deferred tax assets are reassessed.
E. Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. Deferred tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realize the asset and settle the liability simultaneously.
F. If a change in tax rate is enacted or substantively enacted in an interim period, the Group recognizes the effect of the change immediately in the interim period in which the change occurs. The effect of the change on items recognized outside profit or loss is recognized in other comprehensive income or equity while the effect of the change on items recognized in profit or loss is recognized in profit or loss.

(29) Dividends

Dividends are recorded in the Company’s financial statements in the period in which they are approved by the Company’s shareholders. Cash dividends are recorded as liabilities; stock dividends are recorded as stock dividends to be distributed and are reclassified to ordinary shares on the

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effective date of new shares issuance.

(30) Revenue recognition

A. The Group is primarily engaged in manufacturing and sales of consumer electronics products. Sales are recognized when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, or the Group has objective evidence that all criteria for acceptance have been satisfied.
B. Revenue from these sales is recognized based on the price specified in the contract, net of the estimated sales discounts and allowances. Revenue is only recognized to the extent that it is highly probable that a significant reversal will not occur. The estimation is subject to an assessment at each reporting date. As the time interval between the transfer of committed goods or service and the payment of customer does not exceed one year, the Group does not adjust the transaction price to reflect the time value of money.
C. A receivable is recognized when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.

(31) Government grants

Government grants are recognized at their fair value only when there is reasonable assurance that the Group will comply with any conditions attached to the grants and the grants will be received. Government grants are recognized in profit or loss on a systematic basis over the periods in which the Group recognizes expenses for the related costs for which the grants are intended to compensate.
(32) Business combinations
A. The Group uses the acquisition method to account for business combinations. The consideration transferred for an acquisition is measured as the fair value of the assets transferred, liabilities incurred or assumed and equity instruments issued at the acquisition date, plus the fair value of any assets and liabilities resulting from a contingent consideration arrangement. All acquisitionrelated costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. For each business combination, the Group measures at the acquisition date components of non-controlling interests in the acquiree that are present ownership interests and entitle their holders to the proportionate share of the entity’s net assets in the event of liquidation at either fair value or the present ownership instruments’ proportionate share in the recognized amounts of the acquiree’s identifiable net assets. All other non-controlling interests should be measured at the acquisition-date fair value.
B. The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value of any previous equity interest in the acquiree over the fair value of the identifiable assets acquired and the liabilities assumed is recorded as goodwill at the acquisition date. If the total of consideration transferred, non-controlling interest in the acquiree recognized and the fair value of previously held equity interest in the acquiree is less than the fair value of the identifiable assets acquired and the liabilities assumed, the difference is recognized directly in profit or loss on the acquisition date.

(33) Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments.

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CRITICAL ACCOUNTING JUDGMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTION UNCERTAINTY

The preparation of these consolidated financial statements requires management to make critical judgments in applying the Group’s accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. Such assumptions and estimates have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year; and the related information is addressed below:

(1) Critical judgments in applying the Group’s accounting policies

A. Revenue recognition

The Group provides integrated electronics manufacturing services to meet the following criteria by judgment, and recognizes revenue on a gross basis:

(a) The Group is primarily responsible for the provision of goods or services;
(b) The Group assumes the inventory risk before transferring the specified goods or services to the customer or after transferring control of the goods or services to the customer.
(c) The Group has discretion in establishing prices for the goods or services.
B. Offsetting financial instruments

The determination of whether the Group’s financial assets and liabilities are offset and reported in the net amount in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously.

(2) Critical accounting estimates and assumptions
Evaluation of inventories

As inventories are stated at the lower of cost and net realizable value, the Group must determine the net realizable value of inventories on balance sheet date using judgments and estimates. Due to the rapid technology innovation, the Group evaluates the amounts of normal inventory consumption, obsolete inventories or inventories without market selling value on balance sheet date, and writes down the cost of inventories to the net realizable value. Such an evaluation of inventories is principally based on the demand for the products within the specified period in the future. Therefore, there might be material changes to the evaluation.

As of June 30, 2020, information on the carrying amount of inventories is provided in Note 6(6).

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

Cash and cash equivalents
Cash on hand and revolving funds Checking accounts and demand deposits Cash equivalents Time deposits Repurchase Agreement Bond	June 30,2020 729 $ 43,840,755 4,271,253 48,000 48,160,737 $	December31,2019 2,678 $ 34,460,821 5,619,157 41,000 40,123,656 $	June 30,2019
			5,279 $ 33,529,124 20,648,436 132,000
			54,314,839 $

A. The Group associates with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.
B. Time deposits with maturity in excess of three months and restricted time deposits on June 30, 2020, December 31, 2019 and June 30, 2019 have been listed under “financial assets at amortized cost - current” and “financial assets at amortized cost - non-current”.

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

Assets		June30,2020	December31,2019	December31,2019		June30,2019
Current items:
Financial assets mandatorily
measured at fair value
through profit or loss
Derivatives	$	9,282	$	21,081	$	176,391
Non-current items:
Financial assets mandatorily
measured at fair value
through profit or loss
Fund	$	419,439	$	493,296	$	525,370
Liabilities		June 30, 2020	December31,2019			June 30, 2019
Current items:
Financial liabilities
mandatorily measured at
fair value through profit or
loss
Derivatives	$	175,069	$	99,427	$		-
A. To enhance the strategic	cooperation network of integrating resources					and developing the
semiconductor industry, the Group’s subsidiary, Hon Fujin Precision Industry (Taiyuan) Co., Ltd.,
invested in Jinan Fujie Industrial		Investment Fund Partnership in the amount				of RMB 125 million
in January 2019 (limited partnership) and shown			as ‘non-current financial assets at fair				value
through profit or loss’.

through profit or loss’.	through profit or loss’.	through profit or loss’.
B. Amounts recognized in profit or loss in relation to financial assets and			liabilities at fair value
through profit or loss are listed below:
		Three-monthperiods ended June 30,
		2020			2019
Financial assets and liabilities mandatorily
measured at fair value through profit or loss
Derivatives	($	145,649)		$	158,678
Fund	(	26,074)	(		29,713)
	($	171,723)		$	128,965
		Six-monthperiods ended June 30,
		2020			2019
Financial assets and liabilities mandatorily
measured at fair value through profit or loss
Derivatives	($	164,522)		$	248,668
Fund	(	61,431)	(		40,285)
	($	225,953)		$	208,383

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C. The Group entered into contracts relating to derivative financial assets or liabilities which were not accounted for under hedge accounting. The information is listed below:

June 30, 2020

	June 30,2020
Derivative financial assets Current items: Cross currency swap contracts Forward exchange contracts Foreign exchange contracts Derivativeinstruments Current items: Cross currency swap contracts Forward exchange contracts Foreign exchange contracts	TWD (SELL) 6,634,000 USD (BUY) 220,000 USD (SELL) 8,000 CNH (BUY) 56,960 JPY (SELL) 988,992 USD (BUY) 9,257 TWD (SELL) 4,526,106 USD (BUY) 152,000 Contract amount (Nominal Principal in thousands) December31,2019	Contractperiod
		2020/3~2021/3 2020/6~2020/8 2020/6~2020/7 2020/3~2021/3 Contract period 2019/3~2020/3 2019/3~2020/3 2019/11~2020/2 2019/11~2020/3 2019/12~2020/4 2019/12~2020/3 2019/11~2020/1 2019/11~2020/2 2019/12~2020/3 2019/3~2020/3
	TWD (SELL) 924,300 USD (BUY) 30,000 TWD (SELL) 4,291,170 HKD (BUY) 1,090,878 USD (SELL) 16,000 CNH (BUY) 112,480 USD (SELL) 13,000 CNH (BUY) 91,221 USD (SELL) 5,000 CNH (BUY) 35,135 USD (SELL) 10,000 CNH (BUY) 70,350 USD (SELL) 10,000 CNH (BUY) 70,420 USD (SELL) 25,000 CNH (BUY) 175,700 USD (SELL) 10,000 CNH (BUY) 70,175 TWD (SELL) 4,567,904 USD (BUY) 152,000 Contract amount (Nominal Principal inthousands)

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June 30, 2019

==> picture [450 x 32] intentionally omitted <==

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Contract amount
Derivative instruments (Nominal Principal in thousands) Contract period
----- End of picture text -----

Derivative instruments	(Nominal Principa	l in thousands)	Contract period
Current items:
Cross currency swap contracts	TWD (SELL)	924,300	2019/3~2020/3
	USD (BUY)	30,000
	TWD (SELL)	4,291,170	2019/3~2020/3
	HKD (BUY)	1,090,878
Foreign exchange contracts	TWD (SELL)	4,567,904	2019/3~2020/3
	USD (BUY)	152,000

(a) Cross currency swap contracts

The Group signed cross currency swap contracts aiming to satisfy capital requirement. In terms of exchange rate swaps, the principal in two currencies are exchanged at the beginning and the end of period to reduce exchange rate risk. In terms of rate swaps, the fixed interest rates of two currencies are exchanged to reduce interest rate risk.
(b) Forward exchange contracts
The Group signed forward exchange contracts to hedge exchange rate risks arising from the activities listed below:
i. Business activity: The payables due from importing materials and supplies as well as receivables from exports.
ii. Investment activity: The payment due from importing machinery and equipment.
iii. Financial activity: Assets and liabilities (financing) resulted from long-term or short-term loans.
(c) Foreign exchange contracts

The Group entered into foreign exchange contracts to satisfy capital requirement. The principal in two currencies are swapped using the same exchange rate at the beginning and the end of the period to reduce exchange rate risk.

D. The counterparties of derivative instruments held by the Group are all banks with good credit quality or financial institutions with investment grade credit ratings that are above A.
E. The Group has no financial assets at fair value through profit or loss pledged to others.

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

Items Non-current items: Equity instruments	June30,2020 25,519,165 $	December31,2019 35,327,626 $	June30,2019
			24,590,370 $

A. The Group has elected to classify investments that are considered to be strategic investments as financial assets at fair value through other comprehensive income.
B. The Group has no financial assets at fair value through other comprehensive income pledged to others.
C. Amounts recognized in profit or loss and other comprehensive income in relation to the financial assets at fair value through other comprehensive income are listed below:

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	Three-monthperiods ended June 30,	Three-monthperiods ended June 30,	Three-monthperiods ended June 30,
	2020		2019
Fair value change recognized in other
comprehensive income (loss)	1,177,657 $	($	890,776)
Dividend income recognized in profit or loss	324,622 $	$	364,464
	Six-month periods ended June 30,
	2020		2019
Fair value change recognized in other
comprehensive income (loss)	9,577,658) ($	$	1,306,954
Dividend income recognized in profit or loss	324,622 $	$	364,464

The abovementioned fair value change that was recognized in other comprehensive (loss) income arose mainly from change in fair value of SHARP CORPORATION. For the three-month and sixmonth periods ended June 30, 2020 and 2019, the Group recognized gain (loss) amounting to $8,335, ($11,155), ($9,628,732) and $2,156,639, respectively.

(4) Financial assets at amortized cost

Financial assets at amortized cost
Items Current items: Capital guarantee financial products Time deposits with maturity in excess of three months Pledged time deposits Non-current items: Time deposits with maturity in excess of one year Bank debentures-trust fund	June 30,2020 14,748,276 $ 11,861,498 18,003 26,627,777 $ 418,684 $ 2,512,020 2,930,704 $	December31,2019 18,800,350 $ 15,905,898 10,763 34,717,011 $ - $ 3,874,615 3,874,615 $	June 30, 2019
			18,573,377 $ 4,404,270 -
			22,977,647 $
			- $ 4,070,102
			4,070,102 $

A. Please refer to Note 6(23) for information on recognized gains and losses on financial assets at amortized cost. The Group entered into a capital guarantee financial product contract with banks, with returns ranging from 3.2% to 3.8% and 3.9% to 4.05% for the six-month periods ended June 30, 2020 and 2019, respectively.
B. In March 2018 and December 2017, the Group invested in the trust fund named Guangdong Finance Trust - Peng Yun Tian Hua Collection Fund Trust for RMB 500 million and RMB 1 billion, respectively. The fund was mainly created for the investment in Guangzhou Guangyin Nanyue Intelligent Technology Industrial Investment Partnership. This investment is included in “financial assets at amortized cost-non-current.”
As of June 30, 2020, the Group cumulatively received returns in the amount of RMB 900 million in accordance with the investment agreement.
C. Details of the Group’s financial assets at amortized cost pledged to others as collateral as of June 30, 2020 and December 31, 2019 are provided in Note 8. As of June 30, 2019, the Group has no financial assets at amortized cost pledged to others.
D. Investments that the Group invests in are all with high credit quality.

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(5) Notes and accounts receivable

Notes and accounts receivable
			June 30,2020	December31,2019					June 30,2019
Notes receivable		$	9,465		$	1,159		$	72,582
Accounts receivable			15,142,800			13,451,424			14,124,675
			15,152,265			13,452,583			14,197,257
Less: Allowance for
uncollectible accounts	(		5,704)	(		5,044)	(		8,583)
		$	15,146,561		$	13,447,539		$	14,188,674

A. The Group does not hold any collateral as security.

B. Information relating to credit risk is provided in Note 12(2).

(6) Inventories

Inventories
			June 30,2020		December31,2019			June 30,2019
Raw materials		$	603,960			$	298,547	719,143 $
Work in process			619,764				383,085	569,678
Finished goods			2,493,057				2,008,225	2,474,990
			3,716,781				2,689,857	3,763,811
Less: Allowance for inventory
obsolescence and market
price decline	(		71,377)		(		177,266)	130,613) (
		$	3,645,404			$	2,512,591	3,633,198 $
The cost of inventories recognized as expense for the period:
				Three-monthperiods ended June 30,
							2020	2019
Cost of inventories sold			$				21,217,748 $	20,422,318
Gain on inventory obsolescence and
market price decline			(				44,357) (	203,544)
Revenue from sale of scraps			(				41,583) (	29,942)
			$				21,131,808 $	20,188,832
					Six-monthperiods ended June 30,
							2020	2019
Cost of inventories sold			$				31,649,664 $	31,929,428
Gain on inventory obsolescence and
market price decline			(				128,019) (	8,455)
Revenue from sale of scraps			(				81,553) (	54,276)
			$				31,440,092 $	31,866,697

As the Group sold some inventory with net realizable value lower than its cost, the allowance for inventory obsolescence and market price decline was reversed for the three-month and six-month periods ended June 30, 2020 and 2019.

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(7) Investments accounted for using equity method

Investees IDG Energy Investment Limited Syntrend Creative Park Co., Ltd. FSK Holdings Limited FE Holding USA, Inc. Foxstar Technology Co., Ltd.	June 30,2020 December31,2019 5,102,966 $ 5,400,904 $ 276,119 281,351 95,921 108,827 - - - - 5,475,006 $ 5,791,082 $	June 30,2019 5,951,708 $ 282,628 103,802 2,401,818 10,491 8,750,447 $

A. Investment income or loss for the period was recognized based on the investees’ financial statements which were not reviewed by independent accountants.
B. In 2018, the Group subsequently acquired the common stock of FE Holdings USA, Inc. at USD 1 per share in accordance with the resolution passed by the Board of Directors in January 2018. The total investment amount was $2,461,701 (USD 80,400 thousand), representing an ownership stake of 33%. However, the Group’s ownership stake decreased to 15.5% and lost significant control over the investee since the Group did not participate in the capital increase proportionally to its ownership stake in 2019. The investment was transferred to financial assets at fair value through other comprehensive income.
C. On October 31, 2019, the Group transferred all its ownership stake in Foxstar Technology Co., Ltd. to Zhonghe (Nanyang) Information Technology Service Center (Limited Partnership).
D. The Group’s share of the operating results in all individually immaterial associates are summarized below:

below:
		Three-month periods ended June 30,
		2020		2019
Loss for the period from continuing operations	($	38,461)	($	122,525)
Other comprehensive (loss) income, net of tax	(	106,321)		23,822
Total comprehensive loss for the period	($	144,782)	($	98,703)

		Six-monthperiods ended June 30,
		2020		2019
Loss for the period from continuing operations	($	253,493)	($	152,419)
Other comprehensive (loss) income, net of tax	(	62,583)		51,351
Total comprehensive loss for the period	($	316,076)	($	101,068)

E. The Group’s investment, IDG Energy Investment Limited, has quoted market prices. As of June 30, 2020, December 31, 2019 and June 30, 2019, the fair value was $5,222,983, $5,772,923 and $6,496,430, respectively.

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2020

(8) Property, plant and equipment

roperty, plant and equipment			2020
At January 1 Cost Accumulated depreciation Opening net book amount as at January 1 Additions Reclassifications Transfer Disposals Depreciation expense Net exchange differences Closing net book amount as at June 30 At June 30 Cost Accumulated depreciation	Land 51,850 $ - 51,850 $ 51,850 $ - - - - - - 51,850 $ 51,850 $ - 51,850 $	Buildings and structures	Machinery and equipment Others 18,457,368 $ 4,391,845 $ 16,834,642) ( 3,694,624) ( 1,622,726 $ 697,221 $ 1,622,726 $ 697,221 $ 57,260 33,715 131 - - - 955) ( 2,497) ( 285,028) ( 115,827) ( 40,280) ( 17,545) ( 1,353,854 $ 595,067 $ 17,624,479 $ 4,237,753 $ 16,270,625) ( 3,642,686) ( 1,353,854 $ 595,067 $
		8,455,120 $ 5,362,555) ( 3,092,565 $ 3,092,565 $ 9,646 208,892 74,281) ( - 206,978) ( 83,546) ( 2,946,298 $ 8,288,110 $ 5,341,812) ( 2,946,298 $

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2019

			2019
At January 1 Cost Accumulated depreciation Opening net book amount as at January 1 Additions Reclassifications Transfer Disposals Depreciation expense Net exchange differences Closing net book amount as at June 30 At June 30 Cost Accumulated depreciation	Land 51,850 $ - 51,850 $ 51,850 $ - - - - - - 51,850 $ 51,850 $ - 51,850 $	Buildings and structures	Machinery and equipment Others 22,794,113 $ 4,940,438 $ 20,174,278) ( 4,087,663) ( 2,619,835 $ 852,775 $ 2,619,835 $ 852,775 $ 77,541 84,735 3,838 21,539 - - 6,671) ( 4,521) ( 443,587) ( 172,681) ( 32,191 3,119 2,283,147 $ 784,966 $ 22,441,465 $ 5,001,087 $ 20,158,318) ( 4,216,121) ( 2,283,147 $ 784,966 $
		8,509,762 $ 5,172,309) ( 3,337,453 $ 3,337,453 $ 81,156 199,391 141,262) ( 4,799) ( 207,646) ( 37,501 3,301,794 $ 8,738,558 $ 5,436,764) ( 3,301,794 $

The significant components of buildings and structures include main plants and leasehold improvements, which are depreciated over 20~55 and 3~11 years, respectively.

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(9) Leasing arrangements - lessee

A. The Group leases various assets including land use right, buildings and structures as well as other equipment. Except for the rental period of land use right which is 50 years, rental contracts are typically made for periods of 1 to 5 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants, but leased assets may not be used as security for borrowing purposes.
B. Short-term leases with a lease term of 12 months or less comprise business vehicles.
C. The carrying amount of right-of-use assets and the depreciation expense recognized are as follows:

Land use right Buildings and structures Others Land use right Buildings and structures Others Land use right Buildings and structures Others	June 30, 2020 December31,2019 June 30,2019 Carrying amount Carrying amount Carrying amount 787,812 $ 821,111 $ 874,104 $ 361,705 444,485 1,106,301 12,627 17,178 24,058 1,162,144 $ 1,282,774 $ 2,004,463 $ 2020 2019 Depreciationexpense Depreciationexpense 5,396 $ 8,570 $ 35,581 82,339 2,018 4,464 42,995 $ 95,373 $ 2020 2019 Depreciationexpense Depreciationexpense 10,917 $ 12,357 $ 71,942 164,782 4,157 9,805 87,016 $ 186,944 $ Three-monthperiods ended June 30, Six-month periods ended June 30,	June 30, 2020 December31,2019 June 30,2019 Carrying amount Carrying amount Carrying amount 787,812 $ 821,111 $ 874,104 $ 361,705 444,485 1,106,301 12,627 17,178 24,058 1,162,144 $ 1,282,774 $ 2,004,463 $ 2020 2019 Depreciationexpense Depreciationexpense 5,396 $ 8,570 $ 35,581 82,339 2,018 4,464 42,995 $ 95,373 $ 2020 2019 Depreciationexpense Depreciationexpense 10,917 $ 12,357 $ 71,942 164,782 4,157 9,805 87,016 $ 186,944 $ Three-monthperiods ended June 30, Six-month periods ended June 30,	June 30, 2020 December31,2019 June 30,2019 Carrying amount Carrying amount Carrying amount 787,812 $ 821,111 $ 874,104 $ 361,705 444,485 1,106,301 12,627 17,178 24,058 1,162,144 $ 1,282,774 $ 2,004,463 $ 2020 2019 Depreciationexpense Depreciationexpense 5,396 $ 8,570 $ 35,581 82,339 2,018 4,464 42,995 $ 95,373 $ 2020 2019 Depreciationexpense Depreciationexpense 10,917 $ 12,357 $ 71,942 164,782 4,157 9,805 87,016 $ 186,944 $ Three-monthperiods ended June 30, Six-month periods ended June 30,

		2020 2019 Depreciationexpense Depreciationexpense 5,396 $ 8,570 $ 35,581 82,339 2,018 4,464 42,995 $ 95,373 $ Six-month periods ended June 30,	2019
			Depreciationexpense 8,570 $ 82,339 4,464 95,373 $
		2020 Depreciationexpense 10,917 $ 71,942 4,157 87,016 $	2019 Depreciationexpense
			12,357 $ 164,782 9,805
			186,944 $

D. For the three-month and six-month periods ended June 30, 2020 and 2019, the additions to rightof-use assets were $0, $0, $0 and $9,914, respectively.
E. Information on profit or loss in relation to lease contracts is as follows:

Items affecting profit or loss Interest expense on lease liabilities Expense on short-term lease contracts Expense on leases of low-value assets	Three-monthperiods endedJune30,	Three-monthperiods endedJune30,
	2020 4,917 $ 26,289 5,449	2019
		14,384 $ - 862

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Items affecting profit or loss Interest expense on lease liabilities Expense on short-term lease contracts Expense on leases of low-value assets	2020 2019 10,450 $ 29,773 $ 74,880 - 5,825 1,908 Six-monthperiods endedJune30,

F. For the three-month and six-month periods ended June 30, 2020 and 2019, the Group’s total cash outflow for leases were $78,092, $110,378, $175,061 and $222,955, respectively.
G. Information about the right-of-use assets that was pledged to others as collateral is provided in Note 8.
H. Information on leases acquired from business combinations is provided in Note 6(29).
(10) Leasing arrangements - lessor
A. The Group leases various assets including buildings. Rental contracts are typically made for periods of 1 and 5 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions.
B. For the six-month periods ended June 30, 2020 and 2019, the Group recognized rent income in the amount of $138,037 and $90,006, respectively, based on the operating lease agreement, which does not include variable lease payments.
C. The maturity analysis of the lease payments under the operating leases is as follows:

2020 2021 2022 2023 2024	June 30,2020 109,115 $ 2020 89,738 2021 54,944 2022 8,922 2023 1,074 2024 263,793 $	December31,2019 166,693 $ 2019 156,175 2020 20,489 2021 8,062 2022 1,831 2023 353,250 $	June 30,2019
			90,743 $ 151,571 151,571 19,056 3,309
			416,250 $

(11) Investment property

Investment property
At January 1 Cost Accumulated depreciation and impairment Opening net book amount as at January 1 Transfer in Depreciation expense Net exchange differences Closing net book amount as at June 30 At June 30 Cost Accumulated depreciation and impairment		2020
	Land $ 95,910 - 95,910 $ $ 95,910 - - - 95,910 $ $ 95,910 - 95,910 $

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At January 1 Cost Accumulated depreciation and impairment Opening net book amount as at January 1 Transfer in Depreciation expense Net exchange differences Closing net book amount as at June 30 At June 30 Cost Net exchange differences	Land Buildings and structures Total $ 95,910 1,855,197 $ 1,951,107 $ - 981,087) ( 981,087) ( 95,910 $ 874,110 $ 970,020 $ $ 95,910 $ 874,110 970,020 $ - 141,262 141,262 - 48,498) ( 48,498) ( - 8,467 8,467 95,910 $ 975,341 $ 1,071,251 $ $ 95,910 2,013,068 $ 2,108,978 $ - 1,037,727) ( 1,037,727) ( 95,910 $ 975,341 $ 1,071,251 $ 2019

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

property are shown below:
Rental income from investment property Direct operating expenses arising from the investment property that generated rental income during the period Rental income from investment property Direct operating expenses arising from the investment property that generated rental income during the period	2020 2019 35,573 $ 35,983 $ 24,472 $ 25,613 $ Three-monthperiods ended June 30, Six-month periods ended June 30,
	2020 84,949 $ 49,368 $	2019
		84,356 $
		48,498 $

B. The fair value of the investment property held by the Group as at June 30, 2020, December 31, 2019 and June 30, 2019 was $1,954,563, $1,919,825 and $1,921,271, respectively. Valuations were made using the income approach which is categorized within Level 3 in the fair value hierarchy.

~37~

(12) Intangible assets

Intangible assets
						2020
		Patent	rights and
		technicalskills				Goodwill			Total
At January 1
Cost		$	567,563		$	1,133,371		$	1,700,934
Accumulated amortization	(		122,972)			-	(		122,972)
		$	444,591		$	1,133,371		$	1,577,962
Opening net book amount as at January 1		$	444,591		$	1,133,371		$	1,577,962
Amortization	(		56,241)			-	(		56,241)
Net exchange differences	(		11,182)	(		31,170)	(		42,352)
Closing net book amount as at June 30		$	377,168		$	1,102,201		$	1,479,369
At June 30
Cost		$	432,364		$	1,102,201		$	1,534,565
Accumulated amortization	(		55,196)			-	(		55,196)
		$	377,168		$	1,102,201		$	1,479,369
						2019
		Patent	rights and
		technicalskills				Goodwill			Total
At January 1
Cost		$	589,672		$	1,177,520		$	1,767,192
Accumulated amortization			-			-			-
		$	589,672		$	1,177,520		$	1,767,192
Opening net book amount as at January 1		$	589,672		$	1,177,520		$	1,767,192
Amortization	(		70,189)			-	(		70,189)
Net exchange differences			7,158			13,032			20,190
Closing net book amount as at June 30		$	526,641		$	1,190,552		$	1,717,193
At June 30
Cost		$	596,198		$	1,190,552		$	1,786,750
Accumulated amortization	(		69,557)			-	(		69,557)
		$	526,641		$	1,190,552		$	1,717,193

A. The information relating to business combination is provided in Note 6(29).

B. As of June 30, 2020 and 2019, goodwill allocated to the cash-generating units of production and sales of mechanical components’ operating segments amounted to $1,102,201 and $1,190,552, respectively.

~38~

(13) Other non-current assets

(13)Other non-current assets
		June30,2020	December31,2019			June30,2019
Receivable from payment	$	554,367	$	570,044	$	596,234
on behalf of others
Prepayments for equipment		18,046		24,591		37,096
Other assets - others		49,072		37,827		48,568
	$	621,485	$	632,462	$	681,898
(14)Short-term loans
Type of loans		June30,2020		Interest rate range		Collateral
Bank loans
Unsecured loans	$	16,231,173		0.61%~2.11%		None
Other unsecured loans		92,107		4.35%		"
	$	16,323,280
Type of loans	December31,2019			Interestraterange		Collateral
Bank loans
Secured loans	$	134,750		5.66%		Land use right
Unsecured loans		15,535,975		0.59%~3.20%		None
Other unsecured loans		94,711		4.35%		"
	$	15,765,436
Type of loans		June 30,2019		Interestraterange		Collateral
Bank loans
Secured loans	$	44,771		5.65%		Land use right
Unsecured loans		24,419,492		0.59%~5.09%		None
Other unsecured loans		99,490		4.35%		"
	$	24,563,753

A. Information on abovementioned collateral is provided in Note 8.
B. The Group has signed an agreement to offset financial assets and liabilities with financial institutions. Details of the offset as of June 30, 2020, December 31, 2019 and June 30, 2019 are as follows:

as follows:
	June 30,2020
Gross amount of recognized financial liabilities 6,616,945 $	Gross amount of recognized financial assetsinthe balance sheet 6,616,945 $ December31,2019	Net amount of financial liabilities presented inthe balance sheet
		- $

Gross amount of recognized financial liabilities 4,035,690 $	Gross amount of recognized financial assetsinthe balance sheet 4,035,690 $	Net amount of financial liabilities presented inthe balance sheet
		- $

~39~

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

June 30, 2019
Gross amount of Gross amount of Net amount of financial
recognized recognized financial liabilities presented
financial liabilities assets in the balance sheet in the balance sheet
$ 503,451 $ 503,451 $ -
----- End of picture text -----

	503,451 $	$	503,451 $	-
(15)	Other payables Dividends payable Awards and salaries payable Employees’ compensation payable Consumption goods expense payable Payable for purchases made by parties on behalf of others Payable on mold expense Payables for miscellaneous purchase Repairs and maintenance expense payable Processing fees payable Employee benefits/welfare payable Payables for equipment Payable for purchases made by parties on behalf of others - related parties Others	June 30,2020 3,536,213 $ 1,618,634 1,530,294 1,062,767 880,477 864,090 452,423 297,857 281,612 174,982 39,498 3,163 1,748,356 12,490,366 $	December31,2019 - $ 1,920,762 1,460,134 1,421,777 56,713 560,989 510,735 149,090 419,639 174,176 55,068 10,916 1,963,834 8,703,833 $	June 30,2019
				4,526,353 $ 1,719,786 1,561,516 1,386,655 3,454,818 871,576 373,589 176,163 262,261 168,239 63,217 204,230 1,177,815
				15,946,218 $

(16) Pensions

A. Defined benefit plans

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

(b) For the aforementioned pension plan, the Group recognized pension costs of $345, $413,

~40~

$695 and $794 for the three-month and six-month periods ended June 30, 2020 and 2019, respectively.

  - (c) Expected contributions to the defined benefit pension plans of the Group for the year ending December 31, 2020 are $1,700.

B. Defined contribution plans
- (a) Effective July 1, 2005, the Company and its domestic subsidiaries have established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company and its domestic subsidiaries contribute monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.
- (b) The subsidiaries in mainland China have defined contribution pension plans and the Group contributes an amount monthly based on 14%~20% of employees’ monthly salaries and wages to an independent fund administered by a government agency. The plan is administered by the government of mainland China. Other than the monthly contributions, the Group does not have further pension liabilities.
- (c) The pension costs under the defined contribution pension plans of the Group for the threemonth and six-month periods ended June 30, 2020 and 2019 were $98,764, $167,424, $211,384 and $361,906, respectively. As a result of coronavirus epidemic in China in early 2020, the local government reduced the pension insurance premiums by half for a period of three months from February 2020.
(17) Share capital

As of June 30, 2020, the Company’s authorized capital was $15,000,000 (including subscription warrant or 50 million shares reserved for convertible bonds issued by the Company), and the paidin capital was $14,144,852, consisting of 1,414,485 thousand ordinary shares with a par value of $10 (in dollars) per share.

(18) Capital surplus

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

(19) Retained earnings

A. In accordance with the Company’s Articles of Incorporation, current year’s earnings must be distributed in the following order:
(a) Covering accumulated deficit;
(b) Setting aside as legal reserve equal to 10% of current year’s net income. However, this does not apply if the legal reserve has reached the paid-in capital;
(c) Setting aside a special reserve in accordance with applicable legal and regulatory requirements.

The remaining earnings along with the unappropriated earnings at the beginning of the period are considered as accumulated distributable earnings. In accordance with dividend policy, the proposal of earnings appropriation is prepared by the Board of Directors and resolved by the shareholders.

~41~

The Company authorized the Board of Directors to resolve by the presence of more than twothirds of the Directors and voting by a majority of the Directors present to distribute all or part of dividends and bonuses, capital surplus or legal reserve to be distributed by way of cash, without prejudice to the preceding requirement that a resolution shall be resolved at the shareholder’s meeting.

The Company is at the growing stage. The Company’s stock dividend policy shall consider the Company’s current and future investment environment, capital needs, local and foreign competition situation and capital budget, along with shareholders’ profit and the Company’s long-term financial plans. The shareholders’ dividends are appropriated based on accumulated distributable earnings, which shall not be lower than 15% of the distributable earnings for the period and the cash dividends shall not be less than 10% of the shareholders’ dividends.

B. According to related regulations, 10% of the balance of earnings after tax less the accumulated loss of prior years should be set aside as legal reserve, until such legal reserve amount reaches the total authorized capital. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company’s paid-in capital.
C. In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.
D. The appropriations of earnings for 2019 and 2018 had been resolved at the stockholders’ meeting on June 23, 2020 and June 21, 2019, respectively. Details are summarized below:

Years endedDecember31,	Years endedDecember31,	Years endedDecember31,
Dividends per Amount share (indollars) 712,980 $ - 3,536,213 2.5 $ 4,249,193 $ 2019	2018
Amount 712,980 $ - 3,536,213 4,249,193 $	Amount 914,666 $ 46,492 4,526,353 5,487,511 $	Dividends per share (indollars)
		3.2 $

The information on distribution of earnings will be posted in the “Market Observation Post System” of the TSEC.

~42~

2020

(20) Other equity items

(21)

Non-controlling interests
Unrealized gain
(loss) on financial
assets at fair value
through other
Currency
comprehensive
translation
income
adjustments
Total
At January 1
12,909,996
$ 6,126,569)
($ 6,783,427
$ Revaluation of fair value
9,577,658)
(
-

9,577,658)
(
Currency translation
differences:
- Group
-

2,123,329)
(
2,123,329)
(
- Associates
-

62,583)
(
62,583)
(
At June 30
3,332,338
$
8,312,481)
($ 4,980,143)
($ Unrealized gain
(loss) on financial
assets at fair value
through other
Currency
comprehensive
translation
income
adjustments
Total
At January 1
2,531,519
$ 2,578,011)
($ 46,492)
($ Revaluation of fair value
1,306,954
-
1,306,954
Currency translation
differences:
- Group
-
1,154,285
1,154,285
- Associates
-

51,351
51,351
At June 30
3,838,473
$ 1,372,375)
($ 2,466,098
$ 2019
2020
2019
At January 1
13,815)
($ 78,273
$ Shares attributable to non-controlling interests:
Loss for the period
13,894)
(
2,844)
(
Currency translation differences
638
892
At June 30
27,071)
($ 76,321
$ Six-monthperiods ended June 30,

~43~

(22) Operating revenue

Operating revenue
		Three-monthperiods endedJune30,
		2020		2019
Revenue from contracts with customers	$	22,739,527	$	22,820,411
		Six-month periods ended June 30,
		2020		2019
Revenue from contracts with customers	$	33,933,637	$	35,527,706

The Group derives revenue from the transfer of goods and services at a point in time in the following categories:

Three-month period ended June 30, 2020

categories:	Three-monthperiod ended June 30,2020	Three-monthperiod ended June 30,2020
Revenue from contracts with customers Revenue from contracts with customers Revenue from contracts with customers Revenue from contracts with customers	Electronic Production and products sales of mechanical trading services components Others 16,906,750 $ 5,827,212 $ 5,565 $ Three-month period ended June 30, 2019		Total
			22,739,527 $

	Electronic Production and products sales of mechanical trading services components Others 13,499,437 $ 9,261,994 $ 58,980 $ Six-month period ended June 30, 2020		Total
			22,820,411 $

	Electronic Production and products sales of mechanical trading services components Others 23,827,052 $ 10,086,093 $ 20,492 $ Six-month period ended June 30, 2019		Total
			33,933,637 $

	Electronic Production and products sales of mechanical tradingservices components 18,774,299 $ 16,638,403 $	Others 115,004 $	Total
			35,527,706 $

~44~

(23) Interest income

Interest income from bank deposits Interest income from capital guarantee financial products

==> picture [195 x 188] intentionally omitted <==

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

Three-month periods ended June 30,
2020 2019
$ 324,847 $ 335,819
358,695 483,223
$ 683,542 $ 819,042
Six-month periods ended June 30,
2020 2019
$ 686,432 $ 694,054
504,340 629,167
$ 1,190,772 $ 1,323,221
----- End of picture text -----

(24) Other income

Other income		$	1,190,772 1,323,221 $	1,190,772 1,323,221 $	1,190,772 1,323,221 $	1,190,772 1,323,221 $
			Three-month periods ended June 30,
			2020			2019
Government grants revenue		$	101,046	$		2,716
Rental revenue			72,458			39,559
Dividend income			324,622			364,464
Others			30,108			21,607
		$	528,234	$		428,346
			Six-monthperiods ended June 30,
			2020			2019
Government grants revenue		$	319,837	$		200,724
Rental revenue			138,037			90,006
Dividend income			324,622			364,464
Others			55,147			44,052
		$	837,643	$		699,246
Other gains and losses
			Three-monthperiods ended June 30,
			2020			2019
Gains on disposal of property, plant and equipment		$	26,921		$	64,804
Net currency exchange gains			221,313			63,919
(Losses) gains on financial assets (liabilities) at
fair value through profit or loss	(		171,723)			128,965
Others	(		27,030)	(		48,535)
		$	49,481		$	209,153

(25) Other gains and losses

~45~

Six-month periods ended June 30,

			2020			2019
Gains on disposal of property, plant and equipment		$	33,708		$	134,302
Net currency exchange gains (losses)			139,061	(		118,268)
(Losses) gains on financial assets (liabilities) at
fair value through profit or loss	(		225,953)			208,383
Others	(		66,586)	(		75,474)
	($		119,770)		$	148,943
Expenses by nature
			Three-monthperiods ended June 30,
			2020			2019
Employee benefit expense		$	1,907,709		$	1,950,922
Depreciation			336,382			527,318
Amortization			27,799			41,605
		$	2,271,890		$	2,519,845
			Six-monthperiods ended June 30,
			2020			2019
Employee benefit expense		$	3,451,024		$	3,857,260
Depreciation			744,217			1,059,356
Amortization			56,241			70,189
		$	4,251,482		$	4,986,805
Employee benefit expense
			Three-monthperiods endedJune30,
			2020			2019
Wages and salaries		$	1,597,934		$	1,520,588
Labor and health insurance fees			58,701			89,226
Pension costs			99,109			167,837
Other personnel expenses			151,965			173,271
		$	1,907,709		$	1,950,922
			Six-monthperiods ended June 30,
			2020			2019
Wages and salaries		$	2,835,825		$	2,983,460
Labor and health insurance fees			127,481			182,562
Pension costs			212,079			362,700
Other personnel expenses			275,639			328,538
		$	3,451,024		$	3,857,260

(26) Expenses by nature

(27) Employee benefit expense

A. According to the Company’s Articles of Incorporation, if the Company accrues profit (referring to profit before tax prior to deducting the appropriation of employees’ compensation and directors’ remuneration), 4%~6% should be appropriated as employees’ compensation.
B. For the three-month and six-month periods ended June 30, 2020 and 2019, employees’

~46~

compensation was accrued at $80,466, $133,805, $100,616 and $187,383, respectively. The aforementioned amounts were recognized in salary expenses. For the six-month periods ended June 30, 2020 and 2019, the employees’ compensation was estimated and accrued based on 4% and 6% of profit of current year distributable as of the end of reporting period.

C. Employees’ compensation for 2019 and 2018 as resolved by the Board of Directors was in agreement with those amounts recognized in the 2019 and 2018 financial statements. In 2019 and 2018, the employees’ compensation was distributed in the form of cash amounting to $325,135 and $666,180, respectively.
D. Information about employees’ compensation of the Company as resolved by the Board of Directors will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

(28) Income tax

A. Components of income tax expense:

Stock Exchange. ome tax Components of income tax expense:
			Three-monthperiods endedJune30,
			2020		2019
Current tax:
Current tax on profits for the period		$	250,603	$	231,589
Tax on undistributed surplus earnings			142,094		181,368
Prior year income tax overestimation	(		150,750)	(	141,807)
Total current tax			241,947		271,150
Deferred tax:
Origination and reversal of temporary
differences			28,874		10,885
Income tax expense		$	270,821	$	282,035

			Six-monthperiods endedJune30,
			2020		2019
Current tax:
Current tax on profits for the period		$	391,278	$	460,138
Tax on undistributed surplus earnings			142,094		181,368
Prior year income tax overestimation	(		150,750)	(	141,807)
Total current tax			382,622		499,699
Deferred tax:
Origination and reversal of temporary
differences	(		50,148)	(	92,730)
Income tax expense		$	332,474	$	406,969

B. The Company’s income tax returns through 2017 have been assessed and approved by the Tax Authority.

~47~

(29) Earnings per share

Earnings per share
Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares Employees’ compensation Shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares Employees’ compensation Shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares	Three-monthperiod endedJune30,2020
	Weighted average number of ordinary Earnings Amount shares outstanding per share after tax (shares in thousands) (in dollars) 1,461,778 $ 1,414,485 1.03 $ 1,461,778 $ - 1,781 1,461,778 $ 1,416,266 1.03 $ Three-monthperiod endedJune30,2019		Earnings per share (in dollars)
			1.03 $
			1.03 $
	Amount after tax 1,875,465 $ 1,875,465 $ - 1,875,465 $	Weighted average number of ordinary shares outstanding (shares in thousands) 1,414,485 2,970 1,417,455	Earnings per share (in dollars)
			1.33 $
			1.32 $

~48~

Six-monthperiod ended June 30,2020	Six-monthperiod ended June 30,2020	Six-monthperiod ended June 30,2020
Weighted average number of ordinary Earnings Amount shares outstanding per share aftertax (sharesinthousands) (indollars) 1,963,453 $ 1,414,485 1.39 $ 1,963,453 $ - 6,018 1,963,453 $ 1,420,503 1.38 $ Six-monthperiod ended June 30,2019		Earnings per share (indollars)
		1.39 $
		1.38 $
Amount aftertax 2,676,859 $ 2,676,859 $ - 2,676,859 $	Weighted average number of ordinary shares outstanding (sharesinthousands) 1,414,485 9,983 1,424,468	Earnings per share (indollars)
		1.89 $
		1.88 $

~49~

(30) Supplemental cash flow information

Investing activities with partial cash payments:

(31)

Changes in liabilities from financing activities:
2020
2019
Purchase of property, plant and equipment
152,127
$ 364,854
$ Add: Opening balance of payable on equipment
55,068

447,938
Less: Ending balance of payable on equipment
39,498)
(
63,217)
(
Cash paid during the period
167,697
$ 749,575
$ Six-monthperiods endedJune30,
2020
2019
Disposal of property, plant and equipment
37,160
$ 150,293
$ Add: Opening balance of receivable on equipment
264,637
47,250
Less: Ending balance of receivable on equipment
7,210)
(
103,676)
(
Cash received during the period
294,587
$
93,867
$ Six-month periods ended June 30,
Liabilities
from
Short-term
Lease
financing
loans
liabilities
activities - gross
At January 1
15,765,436
$ 472,199
$ 16,237,635
$ Changes in cash flow from financing
activities
633,707
94,356)
(
539,351
Amortization on interest expense
-
10,450
10,450
Impact of changes in foreign exchange
rate
75,863)
(
1,084)
(
76,947)
(
At June 30
16,323,280
$ 387,209
$ 16,710,489
$ 2020

~50~

2019

==> picture [457 x 213] intentionally omitted <==

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

||||||||
|---|---|---|---|---|---|---|
|Liabilities|
|from|
|Short-term|Lease|financing|
|loans|liabilities|activities - gross|
|-|
|At January 1|$ 13,877,029|$|$ 13,877,029|
|Effects of initial application of IFRS 16|-|1,284,141|1,284,141|
|Balance at January 1 after adjustments|13,877,029|1,284,141|15,161,170|
|Changes in cash flow from financing|
|activities|10,674,482|( 221,047)|10,453,435|
|-|
|Amortization on interest expense|29,773|29,773|
|Additions|-|9,914|9,914|
|Impact of changes in foreign exchange|
|rate|12,242|40,542|52,784|
|At June 30|$|24,563,753|$|1,143,323|$|25,707,076|

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

7. RELATED PARTY TRANSACTIONS
(1) Names of related parties and relationship
Names of related parties Relationship with the Group
----- End of picture text -----

==> picture [490 x 240] intentionally omitted <==

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

|||
|---|---|
|Hon Hai Precision Industry Co., Ltd. and Subsidiaries|Entities with significant|
|(Hon Hai and Subsidiaries)|influence to the Group|
|Foxconn Precision Electronics (Taiyuan) Co., Ltd.|〞|
|Pan-International Industrial Corporation and Subsidiaries|Other related party|
|Eson Precision Ind. Co., Ltd. and Subsidiaries|〞|
|Sharp Corporation and Subsidiaries|〞|
|Innolux Corporation|〞|
|CyberTAN Technology Inc. and Subsidiaries|〞|
|General Interface Solution Holding Limited and Subsidiaries|〞|
|Ennoconn Corporation and Subsidiaries|〞|
|Foxconn Fuyao Precision Component (Kunshan) Co., Ltd.|〞|
|SIO International Holdings Limited Taiwan Branch|〞|
|Qingdao Haiyuan Industrial Co., Ltd.|〞|
|Hebi GengDe Electronics Co., Ltd.|〞|

----- End of picture text -----

~51~

(2) Significant related party transactions

A. Sales

nificant related party transactions Sales
Sales of goods and services: Entities with significant influence to the Group -Hon Hai and Subsidiaries Other related parties Sales of goods and services: Entities with significant influence to the Group -Hon Hai and Subsidiaries Other related parties	2020 2019 3,657,331 $ 6,794,075 $ - 10,131 3,657,331 $ 6,804,206 $ Three-month periods ended June 30, 2020 2019 6,191,179 $ 11,922,942 $ 52,077 34,260 6,243,256 $ 11,957,202 $ Six-month periods ended June 30,
		11,957,202 $

Except for circumstances in which there are no similar transactions for reference and the prices and credit periods are negotiated by both parties, the aforementioned related party is offered prices very close to those offered to other customers and given a payment period of 30 to 90 days. For transactions involving the sale of raw materials to the aforementioned related party and subsequent repurchase of goods made from the same raw materials from the same party, the initial sale of raw materials is eliminated due to economic substance.

B. Purchases

Purchases
Purchases of goods and services: Entities with significant influence to the Group -Hon Hai and Subsidiaries Other related parties Purchases of goods and services: Entities with significant influence to the Group -Hon Hai and Subsidiaries Other related parties	Three-monthperiods ended June 30,
	2020 2019 15,208,640 $ 14,728,126 $ 1,537,674 1,029,594 16,746,314 $ 15,757,720 $ Six-monthperiods ended June 30,	2019
		14,728,126 $ 1,029,594
		15,757,720 $
	2020 21,629,752 $ 2,231,694 23,861,446 $	2019
		19,623,323 $ 1,563,941
		21,187,264 $

Except for circumstances in which there are no similar transactions for reference and the prices and payment terms are negotiated by both parties, the Group makes purchases from the aforementioned related party at the prevailing market price, with payment periods of 30 to 90 days.

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C. Receivables from related parties

			June30,2020	December31,2019	December31,2019			June30,2019
Accounts receivable:
Entities with significant
influence to the Group
-Hon Hai and Subsidiaries		$	7,201,831	$	16,077,902		$	12,030,784
Other related parties			41,039		49,719			12,523
			7,242,870		16,127,621			12,043,307
Less: Allowance for
uncollectible accounts	(		2,280)	(	4,848)	(		3,637)
			7,240,590		16,122,773			12,039,670
Other receivables-purchases
made on behalf of associates:
Entities with significant
influence to the Group
-Hon Hai and Subsidiaries			49,684		51,333			4,232,491
Other related parties			826,036		-			-
Other receivables-sale of
property, plant and
equipment:
Entities with significant
influence to the Group
-Hon Hai and Subsidiaries			4,623		86,365			17,300
			880,343		137,698			4,249,791
		$	8,120,933	$	16,260,471		$	16,289,461

The receivables from related parties arise mainly from sales transactions. The amount is due three months after the invoice date. The receivables are unsecured and non-interest bearing.

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D. Payables to related parties

Payables to related parties
Accounts payable: Entities with significant influence to the Group -Hon Hai and Subsidiaries Other related parties Other payables: Entities with significant influence to the Group -Hon Hai and Subsidiaries Payables for equipment Purchases made by associates on behalf of the Company Management service fees Others Other related parties: Others	June30,2020 14,259,895 $ 822,704 15,082,599 - 3,163 577 385,116 13,923 402,779 15,485,378 $	December31,2019 21,227,820 $ 1,189,274 22,417,094 7,862 10,916 - 554,610 18,069 591,457 23,008,551 $	June30,2019
			12,181,189 $ 1,074,908
			13,256,097 24,220 204,230 154 428,540 -
			657,144
			13,913,241 $

The payables to related parties arise mainly from purchase transactions and are at arm’s-length, non-interest bearing and payable within 30~90 days.

E. Management service fees payable

non-interest bearing and payable within 30~90 days. Management service fees payable
Management service fees Entities with significant influence to the Group -Hon Hai and Subsidiaries Management service fees Entities with significant influence to the Group -Hon Hai and Subsidiaries	Three-monthperiods ended June 30,
	2020 2019 944 $ 129,554 $ Six-monthperiods ended June 30,	2019
		129,554 $
	2020 2,149 $	2019
		335,567 $

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F. Raw materials purchased on behalf of others

F. Raw materials purchased on behalf of others
		Three-monthperiods ended June 30,
		2020		2019
Entities with significant influence to the Group
-Hon Hai and Subsidiaries
Raw materials purchased on behalf of	$	4,764,151	$	5,483,352
associates
Associates purchasing raw materials on behalf
of the Group		2,773		107,905
Other related parties
Raw materials purchased on behalf of
associates		649,371			-
	$	5,416,295	$	5,591,257
		Six-monthperiods endedJune30,
		2020		2019
Entities with significant influence to the Group
-Hon Hai and Subsidiaries
Raw materials purchased on behalf of	$	7,057,863	$	6,786,942
associates
Associates purchasing raw materials on behalf
of the Group		3,493		1,075,535
Other related parties
Raw materials purchased on behalf of
associates		836,256			-
	$	7,897,612	$	7,862,477
G. Property transactions
(a) Acquisition of property:
		Three-month periods ended June 30,
		2020		2019
Acquisition of property, plant and equipment:
Entities with significant influence to the Group
-Hon Hai and Subsidiaries	$	673	$	70,908
		Six-monthperiods ended June 30,
		2020		2019
Acquisition of property, plant and equipment:
Entities with significant influence to the Group
-Hon Hai and Subsidiaries	$	689	$	76,075
For the three-month and six-month periods ended June 30, 2020,			there was no material
acquisition of property to related parties.

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(b) Proceeds from sale of property, plant and equipment:

		Three-monthperiods	Three-monthperiods	Three-monthperiods	Three-monthperiods	endedJune30,
		2020				2019
	Proceeds from				Proceeds from
	sale of property,				sale of property,
Sale of property, plant and		plant and				plant and
equipment:		equipment		Gain		equipment		Gain
Entities with significant
influence to the Group
-Hon Hai and Subsidiaries	$	17,721	$	2,859	$	18,344	$	16,698
		Six-monthperiods ended June 30,
		2020				2019
	Proceeds from				Proceeds from
	sale of property,				sale of property,
Sale of property, plant and		plant and				plant and
equipment:		equipment		Gain		equipment		Gain
Entities with significant
influence to the Group
-Hon Hai and Subsidiaries	$	17,721	$	2,859	$	25,807	$	23,874

For the three-month and six-month periods ended June 30, 2020, there was no material sale of property to related parties.

H. Lease transactions - lessee
(a) The Group leases plant from entities with significant influence on the Group. Rental contracts are typically made for periods of 1 to 6 years. Rents are paid at the beginning or end of each month.
(b) Acquisition of right-of-use assets:

The Group acquired right-of-use assets for the three-month and six-month periods ended June 30, 2020 and 2019 from related parties amounting to $0, $0, $0 and $1,081, respectively. On January 1, 2019 (the date of initial application of IFRS 16), the Group increased right-of-use assets by $483,038.

(c) Lease liabilities:
i. Outstanding balance:

ts by $483,038. se liabilities: Outstanding balance:
Current: Entities with significant influence to the Group Non-current: Entities with significant influence to the Group	June 30,2020 133,381 $ 151,431 $	December31,2019 133,935 $ 225,062 $	June 30,2019
			146,459 $
			253,109 $

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ii. Interest expense

Three-month periods ended June 30,

ii. Interest expense	Three-monthperiods ended June 30,	ds ended June 30,
Loans to/ from related parties: Loans from related parties (a) Outstanding balance: (b) Interest expense Entities with significant influence to the Group Entities with significant influence to the Group June 30, 2020 Other related parties 92,107 $	2020 2019 3,644 $ 5,102 $ Six-monthperiods endedJune30,	2019
		5,102 $
	2020 2019 7,768 $ 10,687 $ December31,2019 June 30, 2019 94,711 $ 99,490 $	2019
		10,687 $

I. Loans to/ from related parties: Loans from related parties

Three-month periods ended June 30,

Other related parties Other related parties	2020 2019 1,043 $ 1,114 $ 2020 2019 2,087 $ 2,208 $ Six-monthperiods endedJune30,

J. Rental income

Foxconn Precision Electronics (Taiyuan) Co., Ltd. (referred herein as “Foxconn (Taiyuan)”), a subsidiary of Hon Hai, leases part of plants, offices and dormitories in Taiyuan from the Group in April, 2016. Lease price is agreed upon by both parties and the Group collects rent monthly from Foxconn (Taiyuan) in accordance with the agreement. The rental income under operating leases for the three-month and six-month periods ended June 30, 2020 and 2019 were $29,481, $29,523, $58,944 and $56,371, respectively.

(3) Key management compensation

for the three-month and six-month periods endedJu $58,944 and $56,371, respectively. Key management compensation	ne 30, 2020 and 2019 were $29,481, $29,5	ne 30, 2020 and 2019 were $29,481, $29,5
Salaries and other short-term employee benefits Post-employment benefits Salaries and other short-term employee benefits Post-employment benefits	Three-monthperiods ended June 30,
	2020 2019 2,241 $ 2,269 $ 131 131 2,372 $ 2,400 $ Six-monthperiods ended June 30,	2019
		2,269 $ 131
		2,400 $
	2020 6,622 $ 262 6,884 $	2019
		6,332 $ 261
		6,593 $

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8. PLEDGED ASSETS

On June 30, 2020 and 2019, the book value of the Group’s assets pledged as collateral is as follows:

Book value

9.	SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT COMMITMENTS Pledged assets June 30,2020 December31,2019 June 30,2019 Purpose Land use right (shown as ‘right-of- use assets’) - $ 112,040 $ 119,218 $ Short-term loans Pledged time deposits (shown as ‘ financial assets at amortized cost - current’) 27,433 $ 10,763 $ - $ Customs guarantee	Purpose

(1) Contingencies

None.

(2) Commitments

Capital expenditure contracted for at the balance sheet date but not yet incurred is as follows:

June 30, 2020 December 31, 2019 June 30, 2019 Property, plant and equipment $ 27,484 $ 49,964 $ 117,997 10. SIGNIFICANT DISASTER LOSS None.

SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE None.

12. OTHERS

(1) Capital management

The Group’s objectives when managing capital are to safeguard the Group’s ability to operate with the goal to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, issue new shares or sell assets to reduce debt. The Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total loans (including “current and non-current loans” as shown in the consolidated balance sheet) less cash and cash equivalents. Total capital is calculated as “equity” as shown in the consolidated balance sheet less total intangible assets.

During 2020, the Group’s strategy, which was unchanged from 2019, was to maintain the gearing ratio below 70%.

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(2) Financial instruments

A. Financial instruments by category

Financial assets Financial assets at fair value through profit or loss Financial assets at fair value through comprehensive income Financial assets at amortized cost Financial liabilities Financial liabilities at fair value through profit or loss Financial liabilities at amortized cost Lease liabilities	June30,2020 428,721 $ 25,519,165 101,449,914 127,397,800 $ 175,069 $ 49,667,810 49,842,879 $ 387,209 $	December31,2019 514,377 $ 35,327,626 109,130,056 144,972,059 $ 99,427 $ 53,256,923 53,356,350 $ 472,199 $	June30,2019
			701,761 $ 24,590,370 112,498,464
			137,790,595 $
			- $ 60,647,246
			60,647,246 $
			1,143,323 $

Note: Financial assets at amortized cost included cash, accounts receivable, accounts receivable due from related parties and other receivables; financial liabilities at amortized cost included short-term loans, accounts payable, accounts payable to related parties and other payables.

B. Risk management policies

(a) Risk categories:

The Group employs a comprehensive financial risk management and control system to clearly identify, measure and control the various kinds of financial risk it faces, including market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk.

(b) Management objectives:

i. Except for market risk, which is controlled by outside factors, the remainder of the foregoing types of risks can be controlled internally or removed from business processes. Therefore, the goal in managing each of these risks is to reduce them to zero.
ii. As for market risk, the goal is to optimize its overall position through strict analysis, suggestion, execution and audit processes, and proper consideration of a) long-term trends in the external economic/financial environment, b) internal operating conditions, and c) the actual effects of market fluctuations.
iii. The Group’s overall risk management policy focuses on the unpredictable items in financial markets and seeks to reduce the risk that potentially pose adverse effects on the Group’s financial position and financial performance.
iv. For the information on the derivative financial instruments that the Group entered into, please refer to Note 6(2).

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(c) Management system:
- i. Risk management is executed by the Group’s finance department by following policies approved by the Board. Through cooperation with the Group's operating units, finance department is responsible for identifying, evaluating and hedging financial risks.
- ii. The Board has a written policy covering overall risk management. It also has written policies covering specific issues, such as exchange rate risk, interest rate risk, credit risk, derivative and non-derivative financial instruments used, and the investment of excess working capital.
C. Significant financial risks and degrees of financial risks
(a) Market risk

Foreign exchange risk

i. Nature :

The Group is a multinational group in the Electronic manufacturing services industry. Most of the exchange rate risk from operating activities comes from:

(i) Foreign exchange risk arises from different exchange rates to functional currency as the invoice dates of accounts receivable and payable denominated in non-functional foreign currency are different. Because the amount after the assets and liabilities are offset is insignificant, income/loss is insignificant as well. (Note: The Group has several sites in various countries and thus is exposed to various foreign exchange risks. The main risk arises from USD and RMB.)
(ii) Changes in exchange rates of functional currencies to presentation currency at different timing will cause another foreign exchange risk.
(iii) Except for the above transactions (operating activities) recognized in the income statement, assets and liabilities recognized in the balance sheet and the net investment in foreign operations also result in the exchange rate risk.
ii. Management:
(i) For such risks, the Group has set up policies requiring companies in the Group to manage its exchange rate risks.
(ii) As to the exchange rate risk arising from the difference between various functional currencies and the reporting currency in the consolidated financial statements, it is managed by the Group’s finance department.
iii. Sources of risk:
(i) U.S. dollars and NT dollars:
- Foreign exchange risk arises primarily from gains or losses from translating U.S. dollar-denominated assets, such as cash, cash equivalents, accounts receivable, other receivables and time deposits with maturity in excess of three months, and U.S. dollar-denominated liabilities, such as loans, accounts payable and other payables, into New Taiwan dollars.
(ii) U.S. dollars and RMB:
- Foreign exchange risk arises primarily from gains or losses from translating U.S. dollar-denominated cash, cash equivalents, accounts receivable and other receivables, other assets, loans, accounts payable and other payables and other liabilities, into RMB.
iv. The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

~60~

	June30,2020
Foreign currency amount (inthousands) 236,905 $ 493,675 3,684,990 726,267 242,473	Exchange Book value rate (NTD) 29.63 7,019,495 $ 7.0795 14,632,400 29.63 109,186,264 29.63 21,519,291 7.0795 7,186,837 December31,2019	Degree of variation 1% 1% 1% 1%	Effect on profit or loss
			70,195 $ 146,324 215,193 71,868
Foreign currency amount (inthousands) 452,771 $ 661,966 3,980,566 624,622 436,913	Exchange Book value rate (NTD) 29.98 13,574,075 $ 6.9762 19,845,741 29.98 119,337,372 29.98 18,726,168 6.9762 13,098,652	Degree of variation 1% 1% 1% 1%	Effect on profit or loss
			135,741 $ 198,457 187,262 130,987

~61~

June 30, 2019

		June30,2019
Foreign currency amount (inthousands) (Foreign currency: functional currency) Financial assets Monetary items USD`：`NTD 680,660 USD`：`RMB 460,609 Non-monetary items Foreign operations USD`：`NTD 3,643,610 Financial liabilities Monetary items USD`：`NTD 554,585 HKD`：`NTD 1,091,321 USD`：`RMB 233,106	Exchange rate 31.06 6.8747 31.06 31.06 3.98 6.8747	Book value (NTD) 21,141,300 $ 3,166,549 113,170,525 17,225,410 4,340,184 1,602,534	Degree of variation 1% 1% 1% 1% 1%	Effect on profit or loss
				211,413 $ 31,665 172,254 43,402 16,025

v. Total exchange (loss) gain, including realized and unrealized, arising from significant foreign exchange variation on the monetary items held by the Group for the three-month and six-month periods ended June 30, 2020 and 2019 amounted to $221,313, $63,919, $139,061 and ($118,268), respectively.

Price risk

i. Nature

The Group primarily invests in domestic and foreign publicly traded and unlisted equity instruments, which are accounted for as financial assets at fair value through other comprehensive income. The price of those equity instruments will be affected by the uncertainty of the future value of the investment.

ii. Extent

If the price of such equity instrument rises or falls by 1%, with all other factors held constant, the impact on other comprehensive income due to equity instruments measured at fair value through other comprehensive income would increase/decrease $255,192 and $245,904 for the six-month periods ended June 30, 2020 and 2019, respectively.

Cash flow and fair value interest rate risk

The Group’s interest rate risk arises from short-term loans. Short-term loans with floating rates expose the Group to cash flow interest rate risk, but most of the risks are offset by cash and cash equivalents with variable interest rates.

If short-term loans interest rates rise or fall by 1%, with all other factors held constant, profit after tax would decrease/increase by $131,209 and $196,510 for the six-month periods ended June 30, 2020 and 2019, respectively.

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(b) Credit risk

i. Credit risk refers to the risk of financial loss to the Group arising from default by the clients or counterparties of financial instruments.
According to the Group’s credit policy, each local entity in the Group 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 Group assesses the credit quality of the customers by taking into account their financial position, past experience and other factors to conduct its internal risk management.

Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board of Directors. The utilization of credit limits is regularly monitored. Major credit risk arises from cash and cash equivalents, derivative financial instruments, deposits and short-term investments with banks and financial institutions, and other financial instruments. The counterparties are banks with good credit quality, financial institutions with investment grade credit ratings and government agencies, so there is no significant default concerns and credit risk.

ii. If the contract payments were past due over 90 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.
iii. The following indicators are used to determine whether the credit impairment of debt instruments has occurred:
(i) It becomes probable that the issuer will enter bankruptcy or other financial reorganization due to their financial difficulties;
(ii) The disappearance of an active market for that financial asset because of financial difficulties;
(iii) Default or delinquency in interest or principal repayments;
(iv) Adverse changes in national or regional economic conditions that are expected to cause a default.
iv. The ageing analysis of accounts receivable (including related parties and receivables transferred to other receivables) that were past due but not impaired is as follows:

Not past due 0 to 90 days 91 to 180 days 181 to 270 days 271 to 360 days Over 360 days	June 30,2020 19,398,876 $ 2,975,837 5,645 2,005 5,796 6,976 22,395,135 $	December31,2019 22,637,102 $ 6,571,514 275,907 56,099 12,860 26,722 29,580,204 $	June 30,2019
			23,036,850 $ 2,621,376 357,173 159,543 53,358 12,264
			26,240,564 $

The above ageing analysis was based on past due date.

v. As of June 30, 2020, December 31, 2019 and June 30, 2019, accounts receivable (including related parties) and notes receivable were all from contracts with customers. As of January 1, 2019, the balance of receivables (including related parties) from contracts with customers amounted to $32,150,875.
vi. The Group assesses the expected credit losses of accounts receivable (including related parties) as follows:

~63~

(i) Accounts receivable are divided into segments according to the Group’s credit rating standards; expected credit losses for each segment are assessed based on the specific loss rate or provision matrix for the segment.
(ii) Loss rates are calculated based on past and current information, taking into account forward-looking information provided by the Business Indicators Database of the National Development Council and the Basel Committee on Banking Supervision.
(iii) As of June 30, 2020, December 31, 2019 and June 30, 2019, the loss allowance for accounts receivable (including related parties and receivables transferred to other receivables), assessed using loss rate or provision matrix, is as follows:

==> picture [431 x 351] intentionally omitted <==

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

Group 1 and 2 Group 3 Group 4 Total
June 30, 2020
Expected loss rate 0.0315% 0.0735% 0.0735%
Total book value $ 20,207,479 $ 1,678,487 $ 509,169 $ 22,395,135
Allowance for
uncollectible
accounts $ 6,375 $ 1,235 $ 374 $ 7,984
Group 1 and 2 Group 3 Group 4 Total
December 31, 2019
Expected loss rate 0.0300% 0.0700% 0.0700%
Total book value $ 27,027,980 $ 1,845,826 $ 706,398 $ 29,580,204
Allowance for
uncollectible
accounts $ 8,104 $ 1,293 $ 495 $ 9,892
Group 1 and 2 Group 3 Group 4 Total
June 30, 2019
Expected loss rate 0.0315% 0.0735% 0.35%~2.59%
Total book value $ 23,119,871 $ 2,405,959 $ 714,734 $ 26,240,564
Allowance for
uncollectible
accounts $ 7,231 $ 1,770 $ 3,219 $ 12,220
----- End of picture text -----

Group 1: Standard Poor’s, Fitch’s, or Moody’s rating of A-level, or rated as A-level in accordance with the Group’s credit policies for those that have no external credit ratings.
Group 2: Standard Poor’s or Fitch’s rating of BBB, Moody’s rating of Baa, or rated as B or C in accordance with the Group’s credit policies for those that have no external credit ratings.
Group 3: Standard Poor’s or Fitch’s rating of BB + and below, or Moody’s rating of Ba1 and below.
Group 4: Rated as other than A, B, or C in accordance with the Group’s credit policies for those that have no external credit ratings.
vii. Movements in relation to the Group applying the modified approach to provide loss allowance for accounts receivable (including related parties and receivables transferred to other receivables) is as follows:

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			2020
At January 1		$	9,892
Gain on reversal of expected credit impairment loss	(		1,800)
Effect of foreign exchange	(		108)
At June 30		$	7,984
			2019
At January 1		$	11,098
Provision for impairment			1,057
Effect of foreign exchange			65
At June 30		$	12,220

(c) Liquidity risk

i. Cash flow forecasting is performed by each of the operating entities of the Group and aggregated by Group treasury. Group treasury monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed loan facilities at all times so that the Group does not breach loan limits or covenants (where applicable) on any of its loan facilities. Such forecasting takes into consideration the Group’s debt financing plans, covenant compliance, compliance with internal balance sheet ratio targets and, if applicable external regulatory or legal requirements, for example, currency restrictions.
ii. The Group’s non-derivative financial liabilities and net-settled or gross-settled derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for non-derivative financial liabilities and to the expected maturity date for derivative financial liabilities.

Except for lease liabilities listed below, as of June 30, 2020, December 31, 2019 and June 30, 2019, the Group’s non-derivative financial liabilities (including short-term loans, accounts payable and other payables) and derivative financial liabilities (including foreign exchange contracts, cross currency swap contracts and forward foreign exchange contracts) will expire within 1 year.

June 30,2020	Less than 1year	Between 1 to 2years	Over 2years	Total
	162,957 $ Less than 1year	102,447 $ Between 1to2years	180,210 $ Over 2years	445,614 $ Total
Lease liability December31,2019
	168,937 $ Less than 1year	165,327 $ Between 1to2years	208,535 $ Over 2years	542,799 $ Total
Lease liability June30,2019
	356,276 $	344,341 $	579,296 $	1,279,913 $
Lease liability

(3) Fair value information

A. The different levels that the inputs to valuation techniques are used to measure fair value of

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financial and non-financial instruments have been defined as follows:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability takes place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Group’s investment in listed stocks is included in Level 1.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The fair value of the Group’s investment in derivative instruments is included in Level 2.
Level 3: Unobservable inputs for the asset or liability.
B. Fair value information of investment property at cost is provided in Note 6(11).
C. The related information on financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities is as follows:
(a) The related information on the nature of the assets and liabilities is as follows:

June 30, 2020 Assets Recurring fair value measurements Financial assets at fair value through profit or loss - current Derivative instruments Financial assets at fair value through profit or loss-non-current Fund Financial assets at fair value through other comprehensive income Equity instruments Liabilities Recurring fair value measurements Financial liabilities at fair value through profit or loss Derivative instruments	Level 1 - $ - $ 23,262,638 $ - $	Level 2 9,282 $ - $ - $ 175,069 $	Level3 - $ 419,439 $ 2,256,527 $ - $	Total
				9,282 $
				419,439 $
				25,519,165 $
				175,069 $

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December 31, 2019 Assets Recurring fair value measurements Financial assets at fair value through profit or loss - current Derivative instruments Financial assets at fair value through profit or loss-non-current Fund Financial assets at fair value through other comprehensive income Equity instruments Liabilities Recurring fair value measurements Financial liabilities at fair value through profit or loss Derivative instruments	Level 1 - $ - $ 33,042,314 $ - $	Level 2 21,081 $ - $ - $ 99,427 $	Level3 - $ 493,296 $ 2,285,312 $ - $	Total
				21,081 $ 493,296 $
				35,327,626 $
				99,427 $

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June 30, 2019 Assets Recurring fair value measurements Financial assets at fair value through profit or loss - current Derivative instruments Financial assets at fair value through profit or loss-non-current Fund Financial assets at fair value through other comprehensive income Equity instruments Liabilities Recurring fair value measurements Financial liabilities at fair value through profit or loss Derivative instruments	Level 1 - $ - $ 24,590,370 $ - $	Level 2 176,391 $ - $ - $ - $	Level3 Total - $ 176,391 $ 525,370 $ 525,370 $ - $ 24,590,370 $ - $ - $

(b) The methods and assumptions the Group used to measure fair value are as follows:
i. The instruments the Group used market quoted prices as their fair values (that is, Level 1) are listed below by characteristics:

Listed shares

Market quoted price Closing price

ii. The fair value of foreign investment fund is measured by reference to counterparty quotes.
iii. When assessing non-standard and low-complexity financial instruments, for example, interest rate swap contracts and foreign exchange contracts, the Group adopts valuation technique that is widely used by market participants. The inputs used in the valuation method to measure these financial instruments are normally observable in the market.
iv. The valuation of derivative financial instruments is based on valuation model widely accepted by market participants, such as present value techniques and option pricing models. Forward exchange contracts are usually valued based on the current forward exchange rate.
v. The output of valuation model is an estimated value and the valuation technique may not be able to capture all relevant factors of the Group’s financial and non-financial instruments. Therefore, the estimated value derived using valuation model is adjusted accordingly with additional inputs, for example, liquidity risk and etc. In accordance with the Group’s management policies and relevant control procedures relating to the valuation models used for fair value measurement, management believes adjustment to valuation is necessary in order to reasonably represent the fair value of financial and non-

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financial instruments at the consolidated balance sheet. The inputs and pricing information used during valuation are carefully assessed and adjusted based on current market conditions.

vi. The Group takes into account adjustments for credit risks to measure the fair value of financial and non-financial instruments to reflect credit risk of the counterparty and the Group’s credit quality.
D. For the six-month periods ended June 30, 2020 and 2019, there was no transfer into or out from Level 3.
E. The financial assets at fair value through profit or loss, categorized within Level 3 on June 30, 2020 pertain to the investment fund partnership invested through the subsidiary, Hon Fujin Precision Industry (Taiyuan) Co., Ltd. and equity investment in FE HOLDINGS USA, INC. invested through the subsidiary, Q-Run Holdings Ltd.. The qualitative information of significant unobservable inputs and sensitivity analysis of changes in significant unobservable inputs to valuation models used in Level 3 measurement are net asset value and market price method.

Non-derivative equity instrument: Private equity fund investment Unlisted shares Non-derivative equity instrument: Private equity fund investment Unlisted shares	Fair value at June 30, Valuation 2020 technique 419,439 $ Net asset value and market price method 2,256,527 $ Net asset value Fair value at December, Valuation 31,2019 technique 493,296 $ Net asset value and market price method 2,285,312 $ Net asset value	Significant unobservable input Not applicable Not applicable Significant unobservable input Not applicable Not applicable	Range (weighted average) Not applicable Not applicable Range (weighted average) Not applicable Not applicable	Relationship of inputs to fairvalue
				Not applicable Not applicable Relationship of inputs to fairvalue
				Not applicable Not applicable

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Fair value Significant Range Relationship at June 30, Valuation unobservable (weighted of inputs to 2019 technique input average) fair value

Non-derivative equity instrument: Private equity Net asset value Not Not Not fund investment $ 525,370 and market applicable applicable applicable price method

F. The Group has carefully assessed the valuation models and parameters used to measure fair value. However, use of different valuation models or parameters may result in different measurement. The following is the effect on profit or loss from financial assets categorized within Level 3 if the inputs used to valuation models have changed:

Financial assets Other Financial assets Other Financial assets Other	Input 2,675,966 $ Input 2,778,608 $ Input 525,370 $	Change ±1% Change ±1% Change ±1%	Favourable change Unfavourable change 26,760 $ 26,760) ($ Favourable change Unfavourable change 27,786 $ 27,786) ($ Favourable change Unfavourable change 5,254 $ 5,254) ($ Recognizedinprofit or loss June30,2020 Recognizedinprofit or loss December31,2019 Recognizedinprofit or loss June 30,2019

13. SUPPLEMENTARY DISCLOSURES

(1) Significant transactions information

A. Loans to others: Please refer to table 1.
B. Provision of endorsements and guarantees to others: Please refer to table 2.
C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 3.
D. Acquisition or sale of the same security with the accumulated cost reaching $300 million or 20% of paid-in capital or more: Please refer to table 4.
E. Acquisition of real estate reaching $300 million or 20% of paid-in capital or more: None.
F. Disposal of real estate reaching $300 million or 20% of paid-in capital or more: None.
G. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 5.
H. Receivables from related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 6.

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I. Trading in derivative instruments undertaken during the reporting periods: Please refer to Notes 6(2), 6(24) and 12(3).
J. Significant inter-company transactions during the reporting periods: Please refer to table 7.

(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China): Please refer to table 8.

(3) Information on investments in Mainland China

A. Basic information: Please refer to table 9.
B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: Please refer to table 7.

(4) Major shareholders information

Major shareholders information: Please refer to table 10.

14. SEGMENT INFORMATION

(1) General information

The Group is primarily engaged in the assembly and sales of cases, heat dissipation modules and consumer electronics products. The chief operating decision-maker manages abovementioned items by business activities. Currently, business activities can be categorized into trading services of electronic products and manufacturing and sales of mechanism and components.

Revenue and operating income of operating segments are used by the Group’s chief operating decision-maker as basis in the allocation of expenses to segment profit (loss) and as an indication for assessment of performance and allocation of resources.

(2) Measurement of segment information

The financial information on reportable segments provided to the chief operating decision maker is as follows:

Three-month period ended June 30, 2020

External revenue Inter-segment revenue Segment revenue Measurement of segment profit or loss Depreciation and amortization Interest income Interest expense Total segment assets (Note)	Electronic products tradingservices 16,906,750 $ 138,202 17,044,952 $ 267,757 $ 1,073 $ 2,673 $ 18,473 $ - $	Production and sales of mechanical components 5,827,212 $ 650,626 6,477,838 $ 1,044,142 $ 362,774 $ 680,876 $ 46,359 $ - $	Total
			22,733,962 $ 788,828
			23,522,790 $
			1,311,899 $
			363,847 $
			683,549 $
			64,832 $
			- $

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Three-month period ended June 30, 2019

	Three-monthperiod ended June 30,2019	Three-monthperiod ended June 30,2019	30,2019
External revenue Inter-segment revenue Segment revenue Measurement of segment profit or loss Depreciation and amortization Interest income Interest expense Total segment assets (Note) External revenue Inter-segment revenue Segment revenue Measurement of segment profit or loss Depreciation and amortization Interest income Interest expense Total segment assets (Note)	Electronic Production and products sales of mechanical trading services components Total 13,499,437 $ 9,261,994 $ 22,761,431 $ 292,021 699,858 991,879 13,791,458 $ 9,961,852 $ 23,753,310 $ 634,383 $ 1,120,038 $ 1,754,421 $ 1,731 $ 523,420 $ 525,151 $ 47,609 $ 771,582 $ 819,191 $ 74,988 $ 12,055 $ 87,043 $ - $ - $ - $ Six-monthperiod ended June 30,2020		Total 22,761,431 $ 991,879 23,753,310 $
			1,754,421 $
			525,151 $
			819,191 $
			87,043 $
			- $
	Electronic products trading services 23,827,052 $ 230,634 24,057,686 $ 533,221 $ 2,492 $ 9,268 $ 58,207 $ - $	Production and sales of mechanical components 10,086,093 $ 891,735 10,977,828 $ 1,459,971 $ 797,460 $ 1,181,497 $ 105,939 $ - $	Total
			33,913,145 $ 1,122,369 35,035,514 $
			1,993,192 $
			799,952 $
			1,190,765 $
			164,146 $
			- $

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Six-month period ended June 30, 2019

External revenue Inter-segment revenue Segment revenue Measurement of segment profit or loss Depreciation and amortization Interest income Interest expense Total segment assets (Note)	Electronic products trading services 18,774,299 $ 421,738 19,196,037 $ 1,093,635 $ 3,810 $ 103,911 $ 144,785 $ - $	Production and sales of mechanical components 16,638,403 $ 1,027,255 17,665,658 $ 1,446,091 $ 961,532 $ 1,218,920 $ 20,660 $ - $	Total 35,412,702 $ 1,448,993 36,861,695 $
			2,539,726 $ 965,342 $
			1,322,831 $
			165,445 $
			- $

Note: The measurement of operating segment assets is not provided to the operating decision-maker; thus, the measurement that shall be disclosed is zero.

(3) Reconciliation for segment income (loss)

Sales between segments are carried out at arm’s length. The revenue from external parties reported to the chief operating decision-maker is measured in a manner consistent with that in the income statement.

A reconciliation of reportable segment profit or loss to the profit/ (loss) before tax and discontinued operations for the three-month and six-month periods ended June 30, 2020 and 2019 is provided as follows:

ollows:
			Three-monthperiods ended June 30,
Operatingrevenue			2020			2019
Reportable segments income		$	23,522,790		$	23,753,310
Other segments income			5,565			58,980
Elimination of inter-segment revenue	(		788,828)	(		991,879)
Total corporate revenue		$	22,739,527		$	22,820,411
			Six-monthperiods		ended June 30,
Operatingrevenue			2020			2019
Reportable segments income		$	35,035,514		$	36,861,695
Other segments income			20,492			115,004
Elimination of inter-segment revenue	(		1,122,369)	(		1,448,993)
Total corporate revenue		$	33,933,637		$	35,527,706

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Three-month periods ended June 30,

==> picture [468 x 152] intentionally omitted <==

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

Profit and loss 2020 2019
Profit of reported segment $ 1,311,899 $ 1,754,421
Profit of other operating segments 143,878 118,576
Profit before income tax $ 1,455,777 $ 1,872,997
Six-month periods ended June 30,
Profit and loss 2020 2019
Profit of reported segment $ 1,993,192 $ 2,539,726
Profit of other operating segments ( 43,633) 134,289
Profit before income tax $ 1,949,559 $ 2,674,015
----- End of picture text -----

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Foxconn Technology Co., Ltd. and Subsidiaries

Table 1

Loans to others

Six-month period ended June 30, 2020

Expressed in thousands of NTD (Except as otherwise indicated)

Reason for short-term financing Allowance for doubtful accounts Maximum outstanding balance during the six-month period ended June 30,2020 Balance at June 30,2020 Actual amount drawn down No. Creditor Borrower General ledger account Is a relatedparty Interest rate Nature of loan Amount of transactions with the borrower	Collateral	Limit on loans granted to a singleparty	Ceiling on total loansgranted	Note
	Item Value
1 Hon Fujin Precision Industry (Taiyuan) Co., Ltd. Qingdao Hiyn Materials Co., Ltd. Other receivables Y 217,960 $ 159,095 $ 125,706 $ 4.35000% Short-term financing $ - Business operation $ - 1 Hon Fujin Precision Industry (Taiyuan) Co., Ltd. Fuzhun Precision Industy (shenyang) Co., Ltd. Other receivables Y 191,805 184,215 133,974 3.91500% Short-term financing - Business operation - 2 FOXCONN TECHNOLOGY PTE. LTD. YanTai Fuzhun Precision Electronics Co., Ltd. Other receivables Y 607,100 592,600 592,600 2.11538% Short-term financing - Business operation -	Land $ 319,883 None - None -	3,993,024 $ 28,584,929 28,584,929	15,972,096 $ 57,169,857 57,169,857	Note 1 Note 2 Note 2

Note 1: For short-term loans, limit on loans granted for a single party is 10% of the lending company’s net assets and ceiling on total loans is 40% of the Company’s net assets based on the latest audited or reviewed financial statements. Note 2: Limit on loans granted for a single foreign company whose voting rights are 100% owned directly and indirectly by the Company is 30% of the Company’s net assets and 60% for ceiling on total loans.

Table 1, Page 1

Table 2

Foxconn Technology Co., Ltd. and Subsidiaries Provision of endorsements and guarantees to others Six-month period ended June 30, 2020

Expressed in thousands of NTD (Except as otherwise indicated)

Number (Note 1)	Endorser/ guarantor	Party being endorsed/guaranteed	Party being endorsed/guaranteed	Limit on endorsements/ guarantees provided for a single party （Note 3）	Maximum outstanding endorsement/ guarantee amount as of June 30, 2020 （Note 4）	Outstanding endorsement/ guarantee amount at June 30, 2020 （Note 5）	Actual amount drawn down （Note 6）	Amount of endorsements/ guarantees secured with collateral	Ratio of accumulated endorsement/ guarantee amount to net asset value of the endorser/ guarantor company	Ceiling on total amount of endorsements/ guarantees provided （Note 3）	Provision of endorsements/ guarantees by parent company to subsidiary （Note 7）	Provision of endorsements/ guarantees by subsidiary to parent company （Note 7）	Provision of endorsements/ guarantees to the party in Mainland China （Note 7）	Footnote
		Company name	Relationship with the endorser/ guarantor （Note 2）
0 1 2	Foxconn Technology Co., Ltd. Hon Fujin Precision Industry (Taiyuan) Co., Ltd. Fu Yu Precision Components (Kunshan) Co., Ltd.	Foxconn Technology Co., Ltd. Hon Fujin Precision Industry (Taiyuan) Co., Ltd. Fu Yu Precision Components (Kunshan) Co., Ltd.	1 1 1	47,641,548 $ 19,965,120 3,280,221	2,000 $ 18,003 78	2,000 $ 18,003 75	2,000 $ 18,003 75	- $ 18,003 -	0.00% 0.02% 0.00%	95,283,095 $ 39,930,240 6,560,442	N N N	N N N	N Y Y	Note 8 Note 9 Note 9

Note 1: The numbers filled in for the endorsements/guarantees provided by the Company or subsidiaries are as follows:

(1)The Company is ‘0’.
(2)The subsidiaries are numbered in order starting from ‘1’.
Note 2: Relationship between the endorser/guarantor and the party being endorsed/guaranteed is classified into the following seven categories; fill in the number of category each case belongs to:
(1)Having business relationship.
(2)The endorser/guarantor parent company owns directly and indirectly more than 50% voting shares of the endorsed/guaranteed subsidiary.
(3)The endorsed/guaranteed company owns directly and indirectly more than 50% voting shares of the endorser/guarantor parent company.
(4)The endorser/guarantor parent company owns directly and indirectly more than 90% voting shares of the endorsed/guaranteed company.
(5)Mutual guarantee of the trade made by the endorsed/guaranteed company or joint contractor as required under the construction contract.
(6)Due to joint venture, all shareholders provide endorsements/guarantees to the endorsed/guaranteed company in proportion to its ownership.
(7)Joint guarantee of the performance guarantee for pre-sold home sales contract as required under the Consumer Protection Act.
Note 3: The total endorsements and guarantees of the Company to others should not be in excess of the Company’s net assets, and the endorsement and guarantees to a single party should not be in excess of 50% of the Company's net
assets; The endorsement and guarantees of the Company and its subsidiaries to others as a whole should not be in excess of the Company's net assets; the endorsement and guarantees of the Company and its subsidiaries to a single enterprise as a whole should not be in excess of 50% the Company's net assets.
Note 4: Fill in the year-to-date maximum outstanding balance of endorsements/guarantees provided as of the reporting period.
Note 5: Fill in the amount approved by the Board of Directors or the chariman if the chairman has been authorized by the Board of Directors based on subparagraph 8, Article 12 of the Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies.
Note 6: Fill in the actual amount of endorsements/guarantees used by the endorsed/guaranteed company.

Note 7: Fill in ‘Y’ for those cases of provision of endorsements/guarantees by listed parent company to subsidiary and provision by subsidiary to listed parent company, and provision to the party in Mainland China. Note 8: The Company pledge to the custom guarantee for itself.

Note 9: The Company’s subsidiaries pledge to the custom guarantee for itself.

Table 2, Page 1

Foxconn Technology Co., Ltd. and Subsidiaries Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures) Six-month period ended June 30, 2020

Six-month period ended June 30, 2020
Table 3 Securities held by Marketable securities Relationship with the securities issuer General ledger account		Bookvalue Ownership (%) Fairvalue Expressed in thousands of NTD (Except as otherwise indicated) Note As ofJune30,2020
	Number of shares	Bookvalue	Ownership (%) Fairvalue
Foxconn Technology Co., Ltd. Common stock of CyberTAN Technology Inc. None Financial assets at fair value through other comprehensive income - non-current 〞 Common stock of Pan-International Industrial Corp. 〞〞〞 Common stock of Innolux Corporation 〞〞〞 Common stock of Advanced Optoelectronic Technology, Inc. 〞〞 Huazhun Investment Co., Ltd. Common stock of Innolux Corporation 〞〞〞 Common stock of Advanced Optoelectronic Technology, Inc. 〞〞 Q-Run Holdings Ltd. Common stock of China Harmony Auto Holding Ltd. 〞〞〞 Common stock of FE Holdings USA, Inc. 〞〞 Foxconn Technology Pte. Ltd. Common stock of Sharp Corporation 〞〞 Hon Fujin Precision Industry (Taiyuan) Co., Ltd. Jinan Fujie Industrial Investment Fund Partnership (limited partnership) 〞 Financial assets at fair value through profit or loss - non-current Hon Fujin Precision Industry (Taiyuan) Co., Ltd. Bank of Beijing for RMB public structured deposits - 25 〞 Financial assets at amortized cost - current 〞 Bank of Beijing for RMB public structured deposits - 26 〞〞〞 Bank of Beijing for RMB public structured deposits - 27 〞〞〞 Bank of Beijing for RMB public structured deposits - 28 〞〞〞 Bank of Beijing for RMB public structured deposits - 29 〞〞〞 Bank of Beijing for RMB public structured deposits - 31 〞〞 Fuzhun Precision (Hebi) Electronics Co., Ltd. Bank of China Capital-guaranteed Wealth Management - RMB Continuouse Serial Deposits 〞〞 Nanning Funing Precision Electronics Co., Ltd. Bank of China for RMB Continuous Serial Deposits `〞` `〞` Hon Fujin Precision Industry (Taiyuan) Co., Ltd Guangdong Finance Trust - Peng Yun Tian Hua Collection Fund Trust 〞 Financial assets at amortized cost - non-current 〞 Guangdong Finance Trust - Peng Yun Tian Hua Collection Fund Trust 〞〞 Fuzhun Precision (Shenzhen) Industry Co., Ltd. Guangdong Finance Trust - Peng Yun Tian Hua Collection Fund Trust 〞〞	10,035,348 1,079,986 127,556,349 1,000 121,036,800 7,672,000 38,452,340 8,040 64,640,000 - - - - - - - - - - - -	163,576 $ 19,602 1,007,695 18 956,191 137,329 565,522 2,256,527 20,412,705 419,439 2,111,658 2,111,658 2,111,441 2,111,441 2,098,091 838,064 2,527,628 838,295 209,335 2,093,350 209,335	3.05 163,576 $ 0.21 19,602 1.31 1,007,695 - 18 1.25 956,191 5.31 137,329 2.44 565,522 12.89 2,256,527 12.14 20,412,705 9.09 419,439 - 2,111,658 - 2,111,658 - 2,111,441 - 2,111,441 - 2,098,091 - 838,064 - 2,527,628 - 838,295 - 209,335 - 2,093,350 - 209,335

Table 3, Page 1

Foxconn Technology Co., Ltd. and Subsidiaries

Aggregate purchases or sale of the same securities reaching $300 million or 20% of paid-in capital or more Six-month period ended June 30, 2020

	Six-month period ended	June 30, 2020
Table 4 Investor Marketable securities General ledger account Counterparty (Note 2) Relationship with the investor (Note 3)	Balance as at January1,2020	Addition	Disposal		Expressed in thousands of NTD (Except as otherwise indicated) Balance as at June 30,2020
	Amount Number of shares (In thousands)	Amount Number of shares (In thousands)	Selling price Book value Number of shares	Gain (loss) on disposal	Number of shares	Amount
Fuzhun Precision (Shenzhen) Industry Co., Ltd. Shanghai Commercial & Savings Bank “Winner” Currency and Bond Series (Drip into Gold) Financial product (WG19011S) Note 1 The Shanghai Commercial & Savings Bank 〞 Fuzhun Precision (Shenzhen) Industry Co., Ltd. Guangdong Finance Trust - Peng Yun Tian Hua Collection Fund Trust Note 2 Guangdong Yuecai Intrust & Investment Company 〞 Fuzhun Precision (Hebi) Electronics Co., Fortune Shuttle No. 1 Note 1 Shanghai Pudong Development Bank 〞 Fuzhun Precision (Hebi) Electronics Co., Ltd. Bank of China Capital-guaranteed Wealth Management - RMB Continuouse Serial Deposits Note 1 Bank of China 〞 Fuzhun Precision (Hebi) Electronics Co., Ltd. Bank of China Capital-guaranteed Wealth Management - RMB Continuouse Serial Deposits Note 1 Bank of China 〞 Fuzhun Precision (Hebi) Electronics Co., Ltd. Bank of China Capital-guaranteed Wealth Management - RMB Continuouse Serial Deposits Note 1 Bank of China 〞 Nanning Funing Precision Electronics Co., Ltd. Bank of China for RMB Continuous Serial Deposits Note 1 Bank of China 〞 Nanning Funing Precision Electronics Co., Ltd. Bank of China for RMB Continuous Serial Deposits Note 1 Bank of China 〞 Nanning Funing Precision Electronics Co., Ltd. Bank of China for RMB Continuous Serial Deposits Note 1 Bank of China 〞 Hon Fujin Precision Industry (Taiyuan) Co., Ltd Bank of Beijing for RMB public structured deposits - 14 Note 1 Bank of Beijing 〞 Hon Fujin Precision Industry (Taiyuan) Co., Ltd Bank of Beijing for RMB public structured deposits - 15 Note 1 Bank of Beijing 〞 Hon Fujin Precision Industry (Taiyuan) Co., Ltd Bank of Beijing for RMB public structured deposits - 16 Note 1 Bank of Beijing 〞 Hon Fujin Precision Industry (Taiyuan) Co., Ltd Bank of Beijing for RMB public structured deposits - 17 Note 1 Bank of Beijing 〞 Hon Fujin Precision Industry (Taiyuan) Co., Ltd Bank of Beijing for RMB public structured deposits - 18 Note 1 Bank of Beijing 〞 Hon Fujin Precision Industry (Taiyuan) Co., Ltd Bank of Beijing for RMB public structured deposits - 19 Note 1 Bank of Beijing 〞	- RMB 150,000 thousand - RMB 200,000 thousand - RMB 700,000 thousand - - - - - - - - - - - - - RMB 500,000 thousand - RMB 500,000 thousand - RMB 500,000 thousand - - - - - -	- - - - - - - RMB 650,000 thousand - RMB 700,000 thousand - RMB 600,000 thousand - RMB 200,000 thousand - RMB 200,000 thousand - RMB 200,000 thousand - - - - - - - RMB 500,000 thousand - RMB 500,000 thousand - RMB 500,000 thousand	- RMB 150,888 thousand RMB 150,000 thousand - RMB 161,832 thousand RMB 150,000 thousand - RMB 701,755 thousand RMB 700,000 thousand - RMB 653,793 thousand RMB 650,000 thousand - RMB 702,723 thousand RMB 700,000 thousand - - - - RMB 201,880 thousand RMB 200,000 thousand - RMB 201,184 thousand RMB 200,000 thousand - - - - RMB 505,362 thousand RMB 500,000 thousand - RMB 505,414 thousand RMB 500,000 thousand - RMB 504,841 thousand RMB 500,000 thousand - RMB 506,431 thousand RMB 500,000 thousand - RMB 506,378 thousand RMB 500,000 thousand - RMB 506,219 thousand RMB 500,000 thousand	RMB 888 thousand RMB 11,832 thousand RMB 1,755 thousand RMB 3,793 thousand RMB 2,723 thousand - RMB 1,880 thousand RMB 1,184 thousand - RMB 5,362 thousand RMB 5,414 thousand RMB 4,841 thousand RMB 6,431 thousand RMB 6,378 thousand RMB 6,219 thousand	- - - - - - - - - - - - - - -	- RMB 50,000 thousand - - - RMB 603,728 thousand - - RMB 200,228 thousand - - - - - -

Table 4, Page 1

Investor Marketable securities General ledger account Counterparty (Note 2) Relationship with the investor (Note 3)	Balance as at January1,2020	Addition	Disposal		Balance as at June 30,2020	Balance as at June 30,2020
	Amount Number of shares (In thousands)	Amount Number of shares (In thousands)	Selling price Book value Number of shares	Gain (loss) on disposal	Number of shares	Amount
Hon Fujin Precision Industry (Taiyuan) Co., Ltd Bank of Beijing for RMB public structured deposits - 21 Note 1 Bank of Beijing 〞 Hon Fujin Precision Industry (Taiyuan) Co., Ltd Bank of Beijing for RMB public structured deposits - 22 Note 1 Bank of Beijing 〞 Hon Fujin Precision Industry (Taiyuan) Co., Ltd Bank of Beijing for RMB public structured deposits - 23 Note 1 Bank of Beijing 〞 Hon Fujin Precision Industry (Taiyuan) Co., Ltd Bank of Beijing for RMB public structured deposits - 24 Note 1 Bank of Beijing 〞 Hon Fujin Precision Industry (Taiyuan) Co., Ltd Bank of Beijing for RMB public structured deposits - 25 Note 1 Bank of Beijing 〞 Hon Fujin Precision Industry (Taiyuan) Co., Ltd Bank of Beijing for RMB public structured deposits - 26 Note 1 Bank of Beijing 〞 Hon Fujin Precision Industry (Taiyuan) Co., Ltd Bank of Beijing for RMB public structured deposits - 27 Note 1 Bank of Beijing 〞 Hon Fujin Precision Industry (Taiyuan) Co., Ltd Bank of Beijing for RMB public structured deposits - 28 Note 1 Bank of Beijing 〞 Hon Fujin Precision Industry (Taiyuan) Co., Ltd Bank of Beijing for RMB public structured deposits - 29 Note 1 Bank of Beijing 〞 Hon Fujin Precision Industry (Taiyuan) Co., Ltd Bank of Beijing for RMB public structured deposits - 31 Note 1 Bank of Beijing 〞 Hon Fujin Precision Industry (Taiyuan) Co., Ltd Guangdong Finance Trust - Peng Yun Tian Hua Collection Fund Trust Note 2 Guangdong Yuecai Intrust & Investment Company 〞	- RMB 500,000 thousand - - - - - - - - - - - - - - - - - - - RMB 700,000 thousand	- - - RMB 500,000 thousand - RMB 500,000 thousand - RMB 500,000 thousand - RMB 500,000 thousand - RMB 500,000 thousand - RMB 500,000 thousand - RMB 500,000 thousand - RMB 500,000 thousand - RMB 200,000 thousand - -	- RMB 504,685 thousand RMB 500,000 thousand - RMB 504,774 thousand RMB 500,000 thousand - RMB 504,774 thousand RMB 500,000 thousand - RMB 504,685 thousand RMB 500,000 thousand - - - - - - - - - - - - - - - - - - - RMB 191,413 thousand RMB 150,000 thousand	RMB 4,685 thousand RMB 4,774 thousand RMB 4,774 thousand RMB 4,685 thousand - - - - - - RMB 41,413 thousand	- - - - - - - - - - -	- - - - RMB 504,373 thousand RMB 504,373 thousand RMB 504,321 thousand RMB 504,321 thousand RMB 501,134 thousand RMB 200,173 thousand RMB 550,000 thousand

Note 1 ： Recorded in “financial assets at amortized cost-current”.

Note 2 ： Recorded in “financial assets at amortized cost-non-current”.

Note 3 ： Fill in the columns the counterparty and relationship if securities are accounted for under the equity method; otherwise leave the columns blank.

Table 4, Page 2

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

Expressed in thousands of NTD (Except as otherwise indicated)

Foxconn Technology Co., Ltd. and Subsidiaries

Six-month period ended June 30, 2020

Table 5

Purchaser/seller	Counterparty	Relationshipwith the counterparty		Transaction	Transaction		Differences in transaction terms compared to third partytransactions	Differences in transaction terms compared to third partytransactions	Notes/accounts receivable(payable)	Notes/accounts receivable(payable)	Note
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unit price	Credit term	Balance	Percentage of total notes/accounts receivable (payable)
Foxconn Technology Co., Ltd. Hon Fujin Precision Industry (Taiyuan) Co., Ltd. Hon Fujin Precision Industry (Taiyuan) Co., Ltd. Fu Yu Precision Components (Kunshan) Co., Ltd. Fuzhun Precision (Hebi) Electronics Co., Ltd. FOXCONN TECHNOLOGY PTE. LTD. FOXCONN TECHNOLOGY PTE. LTD. Champ Tech Optical (Foshan) Corporation Champ Tech Optical (Foshan) Corporation Foxconn Technology Co., Ltd. Foxconn Technology Co., Ltd. Foxconn Technology Co., Ltd. Foxconn Technology Co., Ltd. Foxconn Technology Co., Ltd. Foxconn Technology Co., Ltd.	Foxconn (Far East) Ltd. and subsidiaries Foxconn (Far East) Ltd. and subsidiaries FOXCONN TECHNOLOGY PTE. LTD. FOXCONN TECHNOLOGY PTE. LTD. Foxconn (Far East) Ltd. and subsidiaries Foxconn (Far East) Ltd. and subsidiaries Hon Fujin Precision Industry (Taiyuan) Co., Ltd. Foxconn (Far East) Ltd. and subsidiaries FOXCONN TECHNOLOGY PTE. LTD. Foxconn (Far East) Ltd. and subsidiaries Nanning Funing Precision Electronics Co., Ltd. Champ Tech Optical (Foshan) Corporation INNOLUX CORPORATION General Interface Solution (GIS) Holding Limited SHARP CORPORATION	The indirect subsidiaries of Hon Hai Precision Industry Co., Ltd. The counterparties of the investee are indirect subsidiaries of Hon Hai Precision Industry Co., Ltd. and its subsidiaries The investee is an indirect subsidiary of the Company The investee is an indirect subsidiary of the Company The counterparties of the investee are indirect subsidiaries of Hon Hai Precision Industry Co., Ltd. and its subsidiaries The counterparties of the investee are indirect subsidiaries of Hon Hai Precision Industry Co., Ltd. and its subsidiaries The investee is an indirect subsidiary of the Company The counterparties of the investee are indirect subsidiaries of Hon Hai Precision Industry Co., Ltd. and its subsidiaries The investee is an indirect subsidiary of the Company The indirect subsidiaries of Hon Hai Precision Industry Co., Ltd. The investee is an indirect subsidiary of the Company The investee is an indirect subsidiary of the Company Other related parties Other related parties Other related parties	Sales Sales Sales Sales Sales Sales Sales Sales Sales Purchases Purchases Purchases Purchases Purchases Purchases	289,534 $ 4,101,702 230,662 1,889,942 510,321 857,904 1,189,647 175,713 1,223,645 19,959,683 887,406 771,010 935,126 147,714 723,321	1 89 5 96 92 18 25 6 42 85 4 3 4 1 3	90 days 90 days 90 days 60 days 90 days 90 days 90 days 90 days 90 days 90 days 30 days 90 days 60 days 60 days 60 days	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 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	486,924 $ 5,290,763 104,109 664,938 258,371 657,365 368,461 171,492 258,433 10,202,123) ( 558,222) ( 329,955) ( 239,237) ( 67,770) ( 174,053) (	4 95 2 89 71 24 13 12 18 75) ( 4) ( 2) ( 2) ( - 1) (	Note 2

Table 5, Page 1

Purchaser/seller	Counterparty	Relationshipwith the counterparty		Transaction	Transaction		Differences in transaction terms compared to third partytransactions	Differences in transaction terms compared to third partytransactions	Notes/accounts receivable(payable)	Notes/accounts receivable(payable)	Note
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unit price	Credit term	Balance	Percentage of total notes/accounts receivable (payable)
Hon Fujin Precision Industry (Taiyuan) Co., Ltd. Fu Yu Precision Components (Kunshan) Co., Ltd. Fuzhun Precision (Hebi) Electronics Co., Ltd. Champ Tech Optical (Foshan) Corporation FOXCONN TECHNOLOGY PTE. LTD. FOXCONN TECHNOLOGY PTE. LTD.	Foxconn (Far East) Ltd. and subsidiaries Foxconn (Far East) Ltd. and subsidiaries Foxconn (Far East) Ltd. and subsidiaries Pan-International Industrial Corp. and subsidiaries Foxconn (Far East) Ltd. and subsidiaries Hon Hai Precision Industry Co., Ltd.	The counterparties of the investee are indirect subsidiaries of Hon Hai Precision Industry Co., Ltd. and its subsidiaries The counterparties of the investee are indirect subsidiaries of Hon Hai Precision Industry Co., Ltd. and its subsidiaries The counterparties of the investee are indirect subsidiaries of Hon Hai Precision Industry Co., Ltd. and its subsidiaries Other related parties The counterparties of the investee are indirect subsidiaries of Hon Hai Precision Industry Co., Ltd. and its subsidiaries The counterparties of the investee are the investee of the Company accounted for using equity method	Purchases Purchases Purchases Purchases Purchases Purchases	394,280 $ 198,382 223,821 270,358 384,300 357,457	9 12 29 11 8 8	90 days 90 days 90 days 90 days 90 days 90 days	Note 1 Note 1 Note 1 Note 1 Note 1 Note 1	Note 1 Note 1 Note 1 Note 1 Note 1 Note 1	3,058,860) ($ 179,976) ( 241,970) ( 226,638) ( 151,714) ( 265,948) (	75) ( 16) ( 71) ( 16) ( 7) ( 13) (

Note 1:Except for circumstances in which there are no similar transactions for reference and the prices and credit periods are negotiated by both parties,

the aforementioned related party is offered prices very close to those offered to other customers and given a payment period of 30 to 90 days.

Note 2:For transactions involving the sale of raw materials to the aforementioned related party and subsequent repurchase of goods made from the same raw materials from the same party, the initial sale of raw materials is eliminated due to economic substance.

Table 5, Page 2

Foxconn Technology Co., Ltd. and Subsidiaries

Table 6

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

June 30, 2020

Expressed in thousands of NTD (Except as otherwise indicated)

Creditor	Counterparty	Relationshipwith the counterparty	Balance as at June 30,2020	Turnover rate	Overdue receivables	Overdue receivables	Amount collected subsequent to the balance sheet date	Allowance for doubtful accounts
					Amount	Action taken
Foxconn Technology Co., Ltd. Foxconn Technology Co., Ltd. Foxconn Technology Co., Ltd. Foxconn Technology Co., Ltd. Hon Fujin Precision Industry (Taiyuan) Co., Ltd. Hon Fujin Precision Industry (Taiyuan) Co., Ltd. Fu Yu Precision Components (Kunshan) Co., Ltd. Fuzhun Precision (Hebi) Electronics Co., Ltd. FOXCONN TECHNOLOGY PTE. LTD. FOXCONN TECHNOLOGY PTE. LTD. Nanning Funing Precision Electronics Co., Ltd. Champ Tech Optical (Foshan) Corporation Champ Tech Optical (Foshan) Corporation Champ Tech Optical (Foshan) Corporation	Foxconn (Far East) Ltd. and subsidiaries SHARP CORPORATION and subsidiaries Pan-International Industrial Corp. and subsidiaries Champ Tech Optical (Foshan) Corporation Foxconn (Far East) Ltd. and subsidiaries FOXCONN TECHNOLOGY PTE. LTD. FOXCONN TECHNOLOGY PTE. LTD. Foxconn (Far East) Ltd. and subsidiaries Foxconn (Far East) Ltd. and subsidiaries Hon Fujin Precision Industry (Taiyuan) Co., Ltd. Foxconn Technology Co., Ltd. Foxconn (Far East) Ltd. and subsidiaries Foxconn Technology Co., Ltd. FOXCONN TECHNOLOGY PTE. LTD.	The indirect subsidiaries of Hon Hai Precision Industry Co., Ltd. Other related parties Other related parties The investee is an indirect subsidiary of the Company The counterparties of the investee are indirect subsidiaries of Hon Hai Precision Industry Co., Ltd. and its subsidiaries The investee is an indirect subsidiary of the Company The investee is an indirect subsidiary of the Company The counterparties of the investee are indirect subsidiaries of Hon Hai Precision Industry Co., Ltd. and its subsidiaries The counterparties of the investee are indirect subsidiaries of Hon Hai Precision Industry Co., Ltd. and its subsidiaries The investee is an indirect subsidiary of the Company The Company’s ultimate parent company The counterparties of the investee are indirect subsidiaries of Hon Hai Precision Industry Co., Ltd. and its subsidiaries The Company’s ultimate parent company The investee is an indirect subsidiary of the Company	486,924 $ 1.20 182,612 Not applicable (shown as other receivables)(Note 1) 643,424 Not applicable (shown as other receivables)(Note 1) 139,079 0.74 5,290,763 0.88 104,109 2.99 664,938 5.51 258,371 2.24 657,365 2.48 368,461 2.18 558,222 4.66 171,492 1.78 329,955 4.12 258,433 6.13		97,108 $ - - 32,191 2,089,047 - - 3,144 11,717 3,770 - 11,154 13,242 -	Subsequent collection - - Active collection Subsequent collection - - Subsequent collection Subsequent collection Subsequent collection - Subsequent collection Subsequent collection -	97,108 $ - - 7,249 2,089,047 - - 3,144 11,717 3,770 - 11,154 13,242 -	- $ - - - - - - - - - - - - -

Note 1: Receivables from purchases of materials by investees on behalf of the ultimate parent company.

Table 6, Page 1

Foxconn Technology Co., Ltd. and Subsidiaries

Table 7

Significant inter-company transactions during the reporting period

Six-month period ended June 30, 2020

Expressed in thousands of NTD

(Except as otherwise indicated)

Transaction

Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)	General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets
0 0 0 1 1 2 2 3 3 4 4 4 5	Foxconn Technology Co., Ltd. Foxconn Technology Co., Ltd. 〝 Hon Fujin Precision Industry (Taiyuan) Co., Ltd. 〝 Fu Yu Precision Components (Kunshan) Co., Ltd. 〝 FOXCONN TECHNOLOGY PTE. LTD. 〝 Champ Tech Optical (Foshan) Corporation Champ Tech Optical (Foshan) Corporation 〝 Nanning Funing Precision Electronics Co., Ltd.	Nanning Funing Precision Electronics Co., Ltd. Champ Tech Optical (Foshan) Corporation 〝 FOXCONN TECHNOLOGY PTE. LTD. 〝 FOXCONN TECHNOLOGY PTE. LTD. 〝 Hon Fujin Precision Industry (Taiyuan) Co., Ltd. 〝 Foxconn Technology Co., Ltd. FOXCONN TECHNOLOGY PTE. LTD. 〝 Foxconn Technology Co., Ltd.	1 1 1 3 3 3 3 3 3 2 3 3 2	Purchases Purchases Accounts receivable Sales Accounts receivable Sales Accounts receivable Sales Accounts receivable Accounts receivable Sales Accounts receivable Accounts receivable	887,406 $ 771,010 139,079 230,662 104,109 1,889,942 664,938 1,189,647 368,461 329,955 1,223,645 258,433 558,222	Note 4 〞〞〞〞〞〞〞〞〞〞〞〞	3 2 - 1 - 6 - 4 - - 4 - -

Note 1: The information of transactions between the Company and the subsidiaries should be noted in “Number” column.

Note 2: (1) Number 0 represents the Company.

Note 2: (2) The consolidated subsidiaries are numbered in order from number 1.

Note 2: The transaction relationship with counterparties are as follows:

Note 2: (1) The Company to the consolidated subsidiary.

Note 2: (2) The consolidated subsidiaries to the Company.

Note 2: (3) The consolidated subsidiaries to other consolidated subsidiaries.

Note 3: Disclosure standard of transactions between the Company and subsidiaries is when purchases, sales and receivables (payables) from (to) related parties account for at least $100,000 or 20% of capital. Relative related are not disclosed. Note 4: Except for circumstances in which there are no similar transactions for reference and the prices and credit periods are negotiated by both parties, the aforementioned related party is offered prices very close to those offered to other customers and given a payment period of 30 to 90 days.

Note 5: In calculating the ratio, the transaction amount is divided by consolidated total assets for balance sheet accounts and is divided by consolidated total revenues for income statement accounts. Note 6: For information of loans to others, please refer to table 1.

Table 7, Page 1

Foxconn Technology Co., Ltd. and Subsidiaries

Table 8

Information on investees

Six-month period ended June 30, 2020

Expressed in thousands of NTD

(Except as otherwise indicated)

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares	held as at June 30,2020	held as at June 30,2020	Net profit (loss) of the investee for the six- month period ended June 30,2020	Investment income (loss) recognised by the Company for the six-month period ended June 30,2020	Note
				Balance as at June 30,2020	Balance as at December31,2019	Numberofshares	Ownership (%)	Bookvalue
Foxconn Technology Co., Ltd. Foxconn Technology Co., Ltd. Foxconn Technology Co., Ltd. Foxconn Technology Co., Ltd.	Q-Run Holdings Ltd. Foxconn Precision Components Holding Co., Ltd. Huazhun Investment Co., Ltd. Syntrend Creative Park Co., Ltd.	Cayman Islands Cayman Islands Taiwan Taiwan	Investment holding Investment holding Investment Retail of office machinery and equipment and electronic appliances, and information software services	9,851,192 $ 492,742 1,254,780 490,322	9,851,192 $ 492,742 1,254,780 490,322	480,077,600 135,839,643 125,478,000 49,032,250	100 100 100 20	93,709,946 $ 15,476,318 1,145,101 276,119	1,215,383 $ 256,809 97 26,194) (	1,222,359 $ 256,809 97 5,231) (

Note: Besides Foxconn Precision Components Holding Co., Ltd., Q-Run Holdings Ltd. and Huazhun Investment Co., Ltd. are subsidiaries of the Company, Atkinson Holdings Ltd., Q-Run Far East Corporation, World Trade Trading Ltd., High Tempo International Ltd., FTC Technology Inc., Foxconn Technology Pte. Ltd., Kenny International Ltd., Double Wealth Profits Ltd., Precious Star International Ltd., Eastern Star Limited., Foreign Technology Ltd., Topfry Industrial Ltd., Gold Glory International Ltd., New Glory Holdings Ltd., FTP Technology Inc., Fu Rui Precision Components (Kunshan) Co., Ltd., Fuzhun Precision (Shenzhen) Industry Co., Ltd., Fuyu Technology (Nanyang) Co., Ltd., Champ Tech Optical (Foshan) Corporation, Hon Fujin Precision Industry (Taiyuan) Co., Ltd., Fuzhun Precision (Hebi) Electronics Co., Ltd., Qingdao Hiyn Materials Co., Ltd., Fuhuigang Industrial (Shenzhen) Co., Ltd., Fu Yu Precision Components (Kunshan) Co., Ltd., YanTai Fuzhun Precision Electronics Co., Ltd., Nanning Funing Precision Electronics Co., Ltd. and Fuzhun Precision (Shenyang) Industry Co., Ltd. are subsidiaries of the Company as well.

Table 8, Page 1

Foxconn Technology Co., Ltd. and Subsidiaries

Information on investees in Mainland China

Table 9

Six-month period ended June 30, 2020

Expressed in thousands of NTD (Except as otherwise indicated)

Investee in Mainland China	Main business activities	Paid-in capital	Investment method (Note 1)	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2020	Amount remitted from Taiwan to Mainland China / Amount remitted back to Taiwan for the six-month period ended June 30, 2020	Amount remitted from Taiwan to Mainland China / Amount remitted back to Taiwan for the six-month period ended June 30, 2020	Accumulated amount of remittance from Taiwan to Mainland China as of June 30, 2020	Net income of investee for the six- month period ended June 30,2020	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the six-month period ended June 30, 2020 (Note 2)	Book value of investments in Mainland China as of June 30,2020	Accumulated amount of investment income remitted back to Taiwan as of June 30, 2020	Note
					Remitted to Mainland China	Remitted back to Taiwan
Fuhuigang Industrial (Shenzhen) Co., Ltd. Fu Yu Precision Components (Kunshan) Co., Ltd. Fuzhun Precision (Shenzhen) Industry Co., Ltd. Fu Rui Precision Components (Kunshan) Co., Ltd. Hon Fujin Precision Industry (Taiyuan) Co., Ltd. Nanning Funing Precision Electronics Co., Ltd. YanTai Fuzhun Precision Electronics Co., Ltd. Fuzhun Precision (Hebi) Electronics Co., Ltd.	Computer case – electronic and electrical components Manufacturing and marketing of power plug and wall socket, micro ribbon connectors for terminals, etc. Manufacturing and marketing of computer components (computer thermal module) Electrical board components processing; manufacturing and marketing of optoelectronics and computer cables Manufacturing and marketing of computer components and related peripherals, computer cases and metal stamping Manufacturing and marketing of computer components (computer thermal module) Manufacturing and marketing of computer case - electronic and electrical components New alloy material, precision molds, new electronic components, portable computers and their components	229,840 $ 1,160,726 577,785 364,182 12,148,300 290,374 1,170,385 4,376,351	2 2 2 2 2 2 2 2	229,840 $ 583,296 59,260 233,603 4,133,385 - 1,170,385 1,472,611	`-` `$` `-` `-` `-` `-` `-` `-` `-`	`-` `$` `-` `-` `-` `-` `-` `-` `-`	229,840 $ 583,296 59,260 233,603 4,133,385 - 1,170,385 1,472,611	13,663 $ 265,555 116,268 - 646,090 159,725 50,517) ( 113,871	100 100 100 100 100 100 100 100	13,663 $ 265,555 116,268 - 646,090 159,725 50,517) ( 113,871	432,446 $ 6,560,442 4,881,920 - 39,930,240 2,853,390 572,212 6,964,005	`-` `$` `-` `-` `-` `-` `-` `-` `-`

Table 9, Page 1

Accumulated amount of Investment amount approved Ceiling on investments in remittance from Taiwan to by the Investment Commission Mainland China imposed by Mainland China as of of the Ministry of Economic the Investment Commission Company name June 30, 2020 Affairs (MOEA) of MOEA (Note 3) Foxconn Technology Co., Ltd. $ 7,882,380 $ 21,134,072 $ -

Note 1: Investment methods are classified into the following three categories:
(1) Directly invest in a company in Mainland China.
(2) Through investing in Q-Run Holdings Ltd. or Foxconn Precision Components Holding Co., Ltd., which then invested in Mainland China.
(3) Others.
Note 2: Investment profit or loss for the period was recognized based on the Mainland investees’ financial statements which were unreviewed by independent accountants, except for Hon Fujin Precision Industry (Taiyuan) Co., Ltd.
Note 3: Pursuant to the amended ‘Guidelines Governing the Review of Investment or Technical Cooperation in the Mainland Area’ dated on August 29, 2008, as the Company has obtained the certificate of being qualified
for operating headquarters, issued by the Industrial Development Bureau, MOEA, the ceiling amount of the investment in Mainland China is not applicable to the Company from May 21, 2015 to May 20, 2018.
Note 4: The Company needs no approval by Investment Commission of the Ministry of Economic Affairs for investment in Qingdao Hiyn Materials Co., Ltd., Fuzhun Precision (Shenyang) Industry Co., Ltd., Fuyu Technology (Nanyang) Co., Ltd. and Champ Tech Optical (Foshan) Corporation which were reinvestedthrough an existing company in Mainland China.

Note 5: The Company’s subsidiary, Fu Yu Precision Components (Kunshan) Co., Ltd., merged with the subsidiary, Fu Rui Precision Components (Kunshan) Co., Ltd, with the effective date set on December 31, 2018. As of June 30, 2020, the merger is still in process.

Table 9, Page 2

Foxconn Technology Co., Ltd. and Subsidiaries

Major shareholders information June 30, 2020

Table 10

Name of major shareholders	Shares	Shares
	Number of shares held	Ownership (%)
Hon Hai Precision Industry Co., Ltd. Bon Shin International Investment Co., Ltd Hyield Venture Capital Co.,Ltd Xinsheng Investment Co., Ltd.	139,725,801 126,181,274 85,003,766 70,813,000	9.87 8.92 6.00 5.00

Table 10, Page 1

AI assistant

FTC — Interim / Quarterly Report 2020

52024_rns_2020-11-13_85970fad-5e8c-45eb-a74c-692d4781900d.pdf

FOXCONN TECHNOLOGY CO., LTD. AND SUBSIDIARIES

INDEPENDENT AUDITORS' REVIEW REPORT TRANSLATED FROM CHINESE

Introduction

Scope of Review

Basis for Qualified Conclusion

Qualified Conclusion

Feng, Jackie Wu, Han-Chi

FOXCONN TECHNOLOGY CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS JUNE 30, 2020, DECEMBER 31, 2019 AND JUNE 30, 2019

FOXCONN TECHNOLOGY CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS JUNE 30, 2020, DECEMBER 31, 2019 AND JUNE 30, 2019

FOXCONN TECHNOLOGY CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME SIX-MONTH PERIODS ENDED JUNE 30, 2020 AND 2019

FOXCONN TECHNOLOGY CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME SIX-MONTH PERIODS ENDED JUNE 30, 2020 AND 2019

FOXCONN TECHNOLOGY CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

SIX MONTHS ENDED JUNE 30, 2020 AND 2019

FOXCONN TECHNOLOGY CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

SIX-MONTH PERIODS ENDED JUNE 30, 2020 AND 2019

FOXCONN TECHNOLOGY CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

SIX-MONTH PERIODS ENDED JUNE 30, 2020 AND 2019

FOXCONN TECHNOLOGY CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS SIX-MONTH PERIODS ENDED JUNE 30, 2020 AND 2019 (Expressed in thousands of New Taiwan dollars, except as otherwise indicated) (UNAUDITED)

1. HISTORY AND ORGANIZATION

(3) IFRSs issued by IASB but not yet endorsed by the FSC

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(1) Compliance statement

(2) Basis of preparation

(3) Basis of consolidation

(6) Cash equivalents

(21) Loans

(29) Dividends

(30) Revenue recognition

(31) Government grants

(33) Operating segments

(1) Critical judgments in applying the Group’s accounting policies

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

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

(a) Cross currency swap contracts

(5) Notes and accounts receivable

(8) Property, plant and equipment

(9) Leasing arrangements - lessee

(11) Investment property

(12) Intangible assets

(13) Other non-current assets

(16) Pensions

A. Defined benefit plans

(19) Retained earnings

(20) Other equity items

(22) Operating revenue

Three-month period ended June 30, 2020

(23) Interest income

(24) Other income

(25) Other gains and losses

(26) Expenses by nature

(27) Employee benefit expense

(28) Income tax

(29) Earnings per share

(30) Supplemental cash flow information

Investing activities with partial cash payments:

(2) Significant related party transactions

A. Sales

C. Receivables from related parties

(b) Proceeds from sale of property, plant and equipment:

ii. Interest expense

J. Rental income

(3) Key management compensation

8. PLEDGED ASSETS

(1) Contingencies

(2) Commitments

12. OTHERS

(1) Capital management

(2) Financial instruments

A. Financial instruments by category

(a) Risk categories:

(b) Management objectives:

Foreign exchange risk

Price risk

Cash flow and fair value interest rate risk

(b) Credit risk

(c) Liquidity risk

FTC Interim / Quarterly Report 2020