GLOBAL PMX — Annual Report 2020

Nov 11, 2020

Global PMX Co., Ltd.

Financial Statements for the Years Ended December 31, 2020 and 2019 and Independent Auditors’ Report

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INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders Global PMX Co., Ltd.

Opinion

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

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

Basis for Opinion

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

Emphasis of Matter

As mentioned in Note 12, the Company entered into a share exchange agreement to acquire all issued and outstanding ordinary shares of Sixxon Precision Machinery Co., Ltd. (Yangmei) by issuing 24,000 thousand of shares on April 13, 2020. The extent of transaction aforementioned is the reorganization of entities under common control, which is considered as consolidated at the beginning of the merge. The financial statements of prior years had been restated when the Company prepared the financial statements of this year.

Key Audit Matters

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

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Key audit matters for the Company’s financial statements for the year of 2020 are stated as follows:

Revenue Recognition

The Company’s sales of automotive parts in 2020 amounted for approximately 38% of total revenue. Based on the significance and Statements on Auditing Standards presupposes revenue recognition as a significant risk. We believe that the impact of the sales revenue recognition of automotive parts from the specific sales customers if actually occurred on the financial statements is significant, it has been identified as a key audit matter. Please refer to Notes 4 (l) to the financial statements for the details of the information about the accounting policy for recognizing revenue.

Our key audit procedures performed in respect of the above area included the following:

1. Understood and tested the design and implementation of the internal controls over revenue recognition from specific sales customers.

2. Sampled and inspected the sale records of the specific sales customers aforementioned to select appropriate samples to examine the related supporting source documents and to test the receiving situation in order to verify whether the sales transaction actually occurred.

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

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

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

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

Auditors’ Responsibilities for the Audit of the Financial Statements

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

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

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

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

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

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

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

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

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

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

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

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• These financial statements are translated from the traditional Chinese version and are unaudited by a CPA.

The engagement partners on the audit resulting in this independent auditors’ report are Po-Jen Weng and Nai-Hua Kuo.

Deloitte & Touche Taipei, Taiwan Republic of China March 22, 2021

Notice to Readers

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

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

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GLOBAL PMX CO., LTD.

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

ASSETS CURRENT ASSETS Cash and cash equivalents (Note 6) Financial assets at fair value through profit or loss - current (Note 7) Financial assets at amortized cost - current (Notes 8 and 9) Accounts receivable from unrelated parties (Note 10) Accounts receivable from related parties (Notes 10 and 29) Other receivables (Note 10) Other receivables from related parties (Notes 10 and 29) Inventories (Note 11) Prepayments (Note 16) Other current assets (Notes 16 and 30) Total current assets NON-CURRENT ASSETS Financial assets at fair value through profit or loss - non-current (Note 7) Investments accounted for using equity method (Note 12) Property, plant and equipment (Note 13) Computer software, net (Note 15) Deferred tax assets (Note 25) Guarantee deposits paid (Note 30) Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Note 17) Accounts payable to unrelated parties (Note 19) Accounts payable to related parties (Notes 19 and 29) Other payables (Note 20) Other payables to related parties (Notes 20 and 29) Current tax liabilities (Note 25) Current portion of long-term liabilities (Note 18) Other current liabilities (Note 20) Total current liabilities NON-CURRENT LIABILITIES Bonds payable (Note 18) Net defined benefit liability - non-current (Note 21) Deferred tax liabilities (Note 25) Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF PARENT (Note 22) Share capital Ordinary shares Capital collected in advance Total share capital Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Equity attributable to predecessors' interests under common control Total equity TOTAL		2020 Amount % $ 791,724 10 12 - 40,698 - 718,691 9 103 - 14,279 - 125 - 133,280 2 1,067 - 31,423 - 1,731,402 21 - - 6,380,179 78 24,239 - 3,320 - 56,650 1 359 - 6,464,747 79 $ 8,196,149 100 $ 568,000 7 18,940 - 519,262 7 91,491 1 504 - 26,790 - 528,347 7 4,921 - 1,758,255 22 - - 5,470 - 352,482 4 357,952 4 2,116,207 26 1,096,103 14 24,878 - 1,120,981 14 3,238,705 39 329,893 4 271,368 3 1,321,478 16 1,922,739 23 (202,483) (2) - - 6,079,942 74 $ 8,196,149 100	2019 (Audited after Restated)	2019 (Audited after Restated)
				Amount % $ 1,128,533 15 - - - - 667,356 9 224,233 3 14,021 - 137 - 89,039 1 8,476 - 28,190 - 2,159,985 28 1,050 - 5,543,031 71 23,897 - 160 - 76,557 1 359 - 5,645,054 72 $ 7,805,039 100 $ 808,000 11 23,901 - 550,261 7 81,860 1 348 - 66,244 1 - - 3,476 - 1,534,090 20 1,485,631 19 5,425 - 303,395 4 1,794,451 23 3,328,541 43 819,340 10 - - 819,340 10 1,107,664 14 267,650 3 118,410 2 1,069,622 14 1,455,682 19 (271,368) (3) 1,365,180 17 4,476,498 57 $ 7,805,039 100

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

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GLOBAL PMX CO., LTD.

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

OPERATING REVENUE (Notes 23 and 29) OPERATING COST (Notes 11, 24 and 29) GROSS PROFIT OPERATING EXPENSES (Notes 24 and 29) Selling and marketing expenses General and administrative expenses Research and development expenses Expected credit (loss)/gain Total operating expenses PROFIT FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES (Notes 24 and 29) Interest income Other income Other gains and losses Finance costs Share of profit of subsidiaries, associates and joint ventures Total non-operating income and expenses PROFIT BEFORE INCOME TAX INCOME TAX EXPENSE (Note 25) NET PROFIT FOR THE YEAR OTHER COMPREHENSIVE INCOME/(LOSS) Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans Items that may be reclassified subsequently to profit or loss: Exchange differences on translating the financial statements of foreign operations		2020 Amount % $ 2,403,424 100 (1,826,305) (76) 577,119 24 (59,871) (3) (95,208) (4) (23,910) (1) (11,344) - (190,333) (8) 386,786 16 6,861 - 209 - (40,167) (2) (18,391) (1) 564,918 24 513,430 21 900,216 37 (128,821) (5) 771,395 32 (47) - 68,885 3	2019 (Audited after Restated)	2019 (Audited after Restated)
				Amount % $ 2,414,853 100 (1,791,144) (74) 623,709 26 (32,843) (2) (78,108) (3) (28,596) (1) 5,001 - (134,546) (6) 489,163 20 6,295 - - - (28,199) (1) (20,548) (1) 630,141 26 587,689 24 1,076,852 44 (168,562) (7) 908,290 37 (645) - (152,958) (6) (Continued)

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GLOBAL PMX CO., LTD.

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

Other comprehensive income/(loss) for the year, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR NET PROFIT ATTRIBUTABLE TO: Owners of the Company Predecessors’ interests under common control TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO: Owners of the Company Predecessors’ interests under common control EARNINGS PER SHARE (Note 26) From continuing operations Basic Diluted		2020 Amount % $ 68,838 3 $ 840,233 35 $ 671,939 28 99,456 4 $ 771,395 32 $ 740,777 31 99,456 4 $ 840,233 35 $ 7.19 $ 6.75	2019 (Audited after Restated)	2019 (Audited after Restated)
				Amount % $ (153,603) (6) $ 754,687 31 $ 622,427 26 285,863 12 $ 908,290 38 $ 468,824 19 285,863 12 $ 754,687 31 $ 8.57 $ 8.03
		$		$
		$		$
		$		$
		$		$
		$		$

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

(Concluded)

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GLOBAL PMX CO., LTD.

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

BALANCE AT JANUARY 1, 2019 Appropriation of 2018 earnings Legal reserve Special reserve Cash dividends Net profit for the year ended December 31, 2019 Other comprehensive income/(loss) for the year ended December 31, 2019, net of income tax Total comprehensive income/(loss) for the year ended December 31, 2019 BALANCE, DECEMBER 31, 2019 Appropriation of 2019 earnings Legal reserve Special reserve Cash dividends Net profit for the year ended December 31, 2020 Other comprehensive income/(loss) for the year ended December 31, 2020, net of income tax Total comprehensive income/(loss) for the year ended December 31, 2020 Reorganization Convertible bonds converted to ordinary shares BALANCE, DECEMBER 31, 2020		Share Capital	Share Capital	Capital Collected in Advance Capital Surplus $ - $ 1,107,664 - - - - - - - - - - - - - 1,107,664 - - - - - - - - - - - - - 1,224,636 24,878 906,405 $ 24,878 $ 3,238,705	Retained Earnings Legal Reserve Special Reserve Unappropriated Earnings $ 217,679 $ 84,243 $ 785,973 49,971 - (49,971) - 34,167 (34,167) - - (253,995) - - 622,427 - - (645) - - 621,782 267,650 118,410 1,069,622 62,243 - (62,243) - 152,958 (152,958) - - (204,835) - - 671,939 - - (47) - - 671,892 - - - - - - $ 329,893 $ 271,368 $ 1,321,478	Other Equity Exchange Differences on Translating the Financial Equity Attributable to Predecessors’ Statements of Interests under Foreign Operations Common Control $ (118,410) $ 1,079,317 - - - - - - - 285,863 (152,958) - (152,958) 285,863 (271,368) 1,365,180 - - - - - - - 99,456 68,885 - 68,885 99,456 - (1,464,636) - - $ (202,483) $ -	Total Equity $ 3,975,806 - - (253,995) 908,290 (153,603) 754,687 4,476,498 - - (204,835) 771,395 68,838 840,233 - 968,046 $ 6,079,942
		Shares (In Thousand) 81,934 - - - - - - 81,934 - - - - - - 24,000 3,676 109,610	Amount $ 819,340 - - - - - - 819,340 - - - - - - 240,000 36,763 $ 1,096,103

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

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GLOBAL PMX CO., LTD.

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

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Depreciation expenses Amortization expenses Expected credit loss recognized/(reversed) Net loss/(gain) on fair value changes of financial assets at fair value through profit or loss Finance costs Interest income Share of profit of subsidiaries, associates and joint ventures Changes in operating assets and liabilities Acounts receivable Other receivables Inventories Prepayments Other current assets Acounts payables Other payables Other current liabilities Net defined benefit liabilities Cash generated from operations Interest paid Income tax paid Net cash generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Purchase of financial assets at amortized cost Acquisitions of investments accounted for using equity method Payments for property, plant and equipment Payments for intangible assets Interest received Dividends received Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Repayments of short-term borrowings Dividends paid Net cash used in financing activities

2020 2019 (Audited after Restated) $ 900,216 $ 1,076,852 244 233 1,800 38 11,344 (5,001) 471 (450) 18,391 20,548 (6,861) (6,295) (564,918) (630,141) 161,451 458,575 (710) (11,306) (44,241) (30,087) 7,409 44,721 (3,233) (24,491) (35,960) 66,757 9,931 (8,097) 1,445 (1,210) (2) 5 456,777 950,651 (7,206) (7,548) (116,503) (90,290) 333,068 852,813 (40,698) - (443,400) (308,250) (586) - (4,960) (160) 7,325 5,645 257,277 - (225,042) (302,765) (240,000) - (204,835) (253,995) (444,835) (253,995) (Continued)

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GLOBAL PMX CO., LTD.

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

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR The accompanying notes are an integral part of the financial statements.	2020 2019 (Audited after Restated) $ (336,809) $ 296,053 1,128,533 832,480 $ 791,724 $ 1,128,533 (Concluded)

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

GLOBAL PMX CO., LTD.

1. GENERAL INFORMATION

Global PMX Co., Ltd. (the “Company”) was incorporated in February 1987, formerly known as “Global PMX Co., Ltd.” , it was renamed to “Global PMX Co., Ltd.” in October, 1999. The company engages mainly in manufacturing of electronic equipment, plastic components, hardware hand tools, metal parts etc. trading, import and export, industrial plastic products manufacturing, other non-metal products manufacturing, iron and steel casting, iron and steel forging, steel rework, aluminum rework, etc.

The common shares of the Company have been listed on the Taiwan Stock Exchange since August 10, 2015.

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

The Company entered into a share exchange agreement to acquire all issued and outstanding ordinary shares of Sixxon Precision Machinery Co., Ltd. (Yangmei) by issuing 24,000 thousand of shares on April 13, 2020. The extent of transaction aforementioned is the reorganization of entities under common control, which was registered on May 25, 2020.

2. APPROVAL OF FINANCIAL STATEMENTS

The financial statements were approved and authorized by the Board of Directors on March 22, 2021.

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

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

Except for the following, the initial application of the amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRSs endorsed and issued into effect by the FSC did not have material impact on the Company’s accounting policies:

1) Amendments to IFRS 3 “Definition of a Business”

The Company applies the amendments to IFRS 3 to transactions that occur on or after January 1, 2020. The amendments clarify that to be considered a business, an acquired set of activities and assets must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs. To determine whether an acquired process is substantive, different criteria apply, depending on whether there are outputs at the acquisition date. In addition, the amendments introduce an optional concentration test that permits a simplified assessment of whether or not an acquired set of activities and assets is a business.

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• 2) Amendments to IAS 1 and IAS 8 “Definition of Material”

The Company adopted the amendments starting from January 1, 2020. The threshold of materiality that could influence users has been changed to “could reasonably be expected to influence”. Accordingly, disclosures in the consolidated financial statements do not include immaterial information that may obscure material information.

Upon initial application of the aforementioned amendments, the impact on assets, liabilities and equity as of December 31, 2020 and the impact on the comprehensive of income during the year of 2020 are not significant.

b. The IFRSs endorsed by the Financial Supervisory Commission (FSC) for application starting from 2021

Effective Date New IFRSs Announced by IASB

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

Amendment to IFRS 16 “Covid-19-Related Rent Concessions”

The amendment stipulates that, when the Company negotiates with the lessor for rent concessions as a direct consequence of the Covid-19 and the Company meets the specified requirements, the Company may elect to apply the practical expedient and recognize the reduction in lease payment in profit or loss in the period in which the events or conditions that trigger the concession occur, and make a corresponding adjustment to the lease liability.

The Company did not have rent negotiations in 2020; however, if such negotiations will occur in 2021, the Company will elect to apply the practical expedient.

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

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

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

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

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

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

• Note 4: The amendments will be applied prospectively for annual reporting periods beginning on or after January 1, 2023.

• Note 5: The amendments are applicable to changes in accounting estimates and changes in accounting policies that occur on or after the beginning of the annual reporting period beginning on or after January 1, 2023.

• Note 6: The amendments are applicable to property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after January 1, 2021.

• Note 7: The amendments are applicable to contracts for which the entity has not yet fulfilled all its obligations on January 1, 2022.

• 1) Amendments to IAS 1 “Classification of Liabilities as Current or Non-current”

The amendments clarify that for a liability to be classified as non-current, the Company shall assess whether it has the right at the end of the reporting period to defer settlement of the liability for at least twelve months after the reporting period. If such rights are in existence at the end of the reporting period, the liability is classified as non-current regardless of whether the Company will exercise that right. The amendments also clarify that, if the right to defer settlement is subject to compliance with specified conditions, the Company must comply with those conditions at the end of the reporting period even if the lender does not test compliance until a later date.

The amendments stipulate that, for the purpose of liability classification, the aforementioned settlement refers to a transfer of cash, other economic resources or the Company’s own equity instruments to the counterparty that results in the extinguishment of the liability. However, if the terms of a liability that could, at the option of the counterparty, result in its settlement by a transfer of the Company’s own equity instruments, and if such option is recognized separately as equity in accordance with IAS 32 “Financial Instruments: Presentation”, the aforementioned terms would not affect the classification of the liability.

• 2) Amendments to IAS 1 “Disclosure of Accounting Policies”

The amendments specify that the Company should refer to the definition of material to determine its material accounting policy information to be disclosed. Accounting policy information is material if it can reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements. The amendments also clarify that:

• accounting policy information that relates to immaterial transactions, other events or conditions is immaterial and need not be disclosed;

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• the Company may consider the accounting policy information as material because of the nature of the related transactions, other events or conditions, even if the amounts are immaterial; and

• not all accounting policy information relating to material transactions, other events or conditions is itself material.

The amendments also illustrate that accounting policy information is likely to be considered as material to the financial statements if that information relates to material transactions, other events or conditions and:

• (1) accounting policy information that relates to immaterial transactions, other events or conditions is immaterial and need not be disclosed;

• (2) the Company chose the accounting policy from options permitted by the standards;

• (3) the accounting policy was developed in accordance with IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors” in the absence of an IFRS that specifically applies;

• (4) the accounting policy relates to an area for which the Company is required to make significant judgements or assumptions in applying an accounting policy, and the Company discloses those judgements or assumptions; or

• (5) the accounting is complex and users of the financial statements would otherwise not understand those material transactions, other events or conditions.

3) Amendments to IAS 8 “Definition of Accounting Estimates”

The amendments define that accounting estimates are monetary amounts in financial statements that are subject to measurement uncertainty. In applying accounting policies, the Company may be required to measure items at monetary amounts that cannot be observed directly and must instead be estimated. In such a case, the Company uses measurement techniques and inputs to develop accounting estimates to achieve the objective. The effects on an accounting estimate of a change in a measurement technique or a change in an input are changes in accounting estimates unless they result from the correction of prior period errors.

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

• a. Statement of compliance

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

• b. Basis of preparation

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

The fair value measurements are grouped into Levels 1 to 3 based on the degree to which the fair value is observable:

• 1) Level 1 inputs are quoted prices (unadjusted) of identical assets or liabilities that the entity can access in active markets at the measurement date;

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

• 3) Level 3 inputs are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

When preparing the financial statements, the Company used the equity method to account for its investments in subsidiaries. In order for the amounts of the net profit for the year, other comprehensive income for the year and total equity in the financial statements to be the same with the amounts attributable to the owners of the Company in its financial statements, adjustments arising from the differences in accounting treatments between the parent company only basis and the consolidated basis were made to investments accounted for using the equity method, share of profits of subsidiaries for using the equity method in the financial statements.

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

Current assets include:

• Assets held primarily for the purpose of trading;

• Assets expected to be realized within 12 months after the reporting period; and

• Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period.

Current liabilities include:

• Liabilities held primarily for the purpose of trading;

• Liabilities due to be settled within 12 months after the reporting period, even if an agreement to refinance, or to reschedule payments, on a long-term basis is completed after the reporting period and before the financial statements are authorized for issue; and

• Liabilities for which the Company does not have an unconditional right to defer settlement for at least 12 months after the reporting period. 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.

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

d. Business combinations

Business combinations involving entities under common control are accounted for at the carrying amounts of the entities. Comparative information of the prior period in the financial statements is restated as if a business combination involving entities under common control had already occurred in that period. When the Company prepares the balance sheets, the shares held by the former shareholders of the entities under common control belong to “Equity Attributable to Predecessors’ Interests under Common Control”. When the Company prepares the statements of changes in equity, the income attributable to the former shareholders of the entities under common control belongs to “Net Profit/Loss Attributable to Predecessors’ Interests under Common Control”.

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e. Foreign currencies

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

At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date.

Non-monetary items measured at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined.

Non-monetary items that are measured in terms of historical cost in foreign currencies are not retranslated.

For the purposes of presenting financial statements, the assets and liabilities of the Company’s foreign operations (including the subsidiaries or associates, joint ventures or branches of the country in which the country of operation or currency is used) are translated into New Taiwan Dollars using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period. Exchange differences arising are recognized in other comprehensive income.

On the disposal of all the equity of a foreign operation, or disposes of the partial equity of the subsidiaries but loses control, or disposes of the joint ventures or associates. The retained equity are financial assets and are accounted for as financial instruments. All of the exchange differences accumulated in equity in respect of that operation attributable to the owners of the Company are reclassified to profit or loss.

If partial disposal of a foreign subsidiary does not result in loss of control, the cumulative exchange difference is incorporated into the equity transaction calculation on a pro rata basis, but is not recognized as profit or loss. In the case of any other part of the disposition of foreign operation, the accumulated exchange difference is reclassified to profit or loss according to the proportion of the disposition.

f. Inventories

Inventories including finished goods, are stated at the lower of cost or net realizable value. Inventories are recorded at standard cost and adjusted to approximate weighted-average cost at the end of the reporting period. Net realizable value represents the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale. The costs of inventories sold or consumed are determined using the weighted-average method.

g. Investments in subsidiaries

Investments accounted for using the equity method include investments in subsidiaries.

Subsidiaries are the entities controlled by the Company.

Under the equity method, the investment is initially recognized at cost and the carrying amount is increased or decreased to recognize the Company’s share of the profit or loss and other comprehensive income of the subsidiary after the date of acquisition. Besides, the Company also recognizes the Company’s share of the change in other equity of the subsidiary.

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Changes in the Company’s ownership interests in subsidiaries that do not result in the Company losing control over the subsidiaries are accounted for as equity transactions. Any difference between the carrying amount of the subsidiary and the fair value of the consideration paid or received is recognized directly in equity.

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

The acquisition cost in excess of the acquisition-date fair value of the identifiable net assets acquired is recognized as goodwill. Goodwill is not amortized. The acquisition-date fair value of the net identifiable assets acquired in excess of the acquisition cost is recognized immediately in profit or loss. When the Company evaluates the impairment, it considers the cash-generating unit as a whole in the financial report and compares its receivable carrying amount. If the receivable amount of the asset increases, the amount of the impairment loss is recognized as gain on reversal of impairment loss. However, the carrying amount of the asset after the impairment loss shall not exceed the amount of the asset that is not recognized as impairment loss. The carrying amount after amortization. The impairment loss attributable to goodwill shall not be reversed during the subsequent period.

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

When the Company ceases to have control over a subsidiary, any retained investment is measured at fai value at that date and the difference between the previous carrying amount of the subsidiary attributable to the retained interest and its fair value is included in the determination of the gain or loss. Furthermore, the Company accounts for all amounts previously recognized in other comprehensive income in relation to that subsidiary on the same basis as would be required if the Company had directly disposed of the related assets or liabilities.

Profits and losses from downstream transactions with a subsidiary are eliminated in full. Profits and losses from upstream with a subsidiary and side stream transactions between subsidiaries are recognized in the Company’s financial statements only to the extent of interests in the subsidiary that are not related to the Company.

• h. Property, plant and equipment

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

Depreciation of property, plant and equipment are recognized using the straight-line method. Each significant part is depreciated separately. The estimated useful lives, residual values and depreciation methods are reviewed at the end of each reporting period, with the effects of any changes in the estimates accounted for on a prospective basis.

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

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i. Intangible assets

1) Acquired separately

Intangible assets with finite useful lives that are acquired separately are initially measured at cost and subsequently measured at cost less accumulated amortization and accumulated impairment loss. Amortization is recognized on a straight-line basis. The estimated useful lives, residual values, and amortization methods are reviewed at the end of each reporting period, with the effects of any changes in the estimates being accounted for on a prospective basis. The residual value of an intangible asset with a finite useful life shall be assumed to be zero unless the Company expects to dispose of the intangible asset before the end of its economic life.

2) Derecognition

When the intangible assets are derecognized, the net disposal price and the carrying amount of the asset is recognized in the current profit and loss.

• j. Impairment of Property, Plant and Equipment, Right-of-use Asset, Intangible Assets Other Than Goodwill

The Company reviews the carrying amounts of its property, plant and equipment, right-of-use asset and intangible assets, excluding goodwill, to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

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

The recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the Company uses the estimated cash flows discounted by the future pre-tax discount rate, and the discount rate reflects current the market time value of money and the specific risks to the asset for estimated future cash flows not yet adjusting to the market.

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

k. Financial instruments

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

Financial assets and financial liabilities, those are not initially measured at fair value through profit or loss, shall be measured at fair value plus transaction costs that are directly attributable to an acquisition or issuance of financial assets and financial liabilities. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.

1) Financial assets

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

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• a) Measurement categories

The Company’s financial assets consist of the following categories: financial assets at fair value through profit or loss and financial assets at amortized cost.

• i. Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss (FVTPL) are stated at fair value, with any gains or losses arising on remeasurement recognized in profit or loss, including the Company's investment in equity instruments that are not measured by the Company's other comprehensive gains and losses, which are measured at fair value through profit or loss and non-conforming investment in debt instruments that are measured at amortized cost or measured at fair value through other comprehensive income.

Financial assets at fair value through profit or loss are subsequently measured at fair value, and any dividends, interest earned and remeasurement gains or losses on such financial assets are recognized in other gains or losses. Fair value is determined in the manner described in Note 28.

• ii. Financial assets at amortized cost

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

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

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

Financial assets (including cash and cash equivalents and accounts receivable as measured by amortized cost) carried at amortized cost should be amortized using the effective interest rate method. Under the effective interest method, the interest income recognized is calculated by applying the market interest rate to the carrying amount and the difference between the interest income so recognized and the interest income paid. Any foreign currency exchange gains and losses are recognized in profit or loss.

Except the following two approaches, interest income was calculated by effective interest rate multiplying the total carrying value of the asset:

• i) Purchased or originated credit-impaired financial assets, for which interest income is calculated by multiplying the credit-adjusted effective interest rate by the amortized cost of financial assets.

• ii) Non-purchased or originated credit impairment, but financial assets have subsequently become credit-impaired, for which interest income is calculated by multiplying the effective interest rate by the amortized cost of such financial assets starting from the following reporting period.

• A financial asset is credit impaired when one or more of the following events have occurred:

• i) Significant financial difficulty of the issuer or the borrower;

• ii) Breach of contract, such as a default;

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• iii) It is becoming probable that the borrower will enter bankruptcy or undergo a financial reorganization; or

• iv) The disappearance of an active market for that financial asset because of financial difficulties.

Cash equivalents include time deposits that are highly liquid within 3 months from the date of acquisition, can be converted into cash fund at any time, and have little risk of changes in value, to meet short-term cash commitments.

• b) Impairment of financial assets

The Company's impairment loss on financial assets (including accounts receivable) measured at amortized cost based on expected credit loss at the end of each reporting period.

Receivable are recognized as allowances for expected credit losses during the duration. Other financial assets are assessed whether the credit risk has increased significantly since the original recognition. If there is no significant increase, the allowance loss is recognized based on the 12-month expected credit loss. If it has increased significantly, it is recognized as the expected credit loss during the duration.

The expected credit loss is the weighted-average credit loss weighted by the risk of default. The 12-month expected credit loss represents the expected credit loss arising from the possible default of the financial instrument within 12 months following the report. The expected credit loss during the duration represents the expected credit loss arising from all possible defaults of the financial instrument during the expected duration.

For internal credit risk management purposes, the Company determines that the following situations indicate that a financial asset is in default :

• i. Internal or external information shows that the debtor is unlikely to pay its creditors.

• ii. When a financial asset is more than 181 days past due unless the Company has reasonable and corroborative information to support a more lagged default criterion.

The impairment loss of all financial assets is reduced by the allowance account, but the allowance for the investment in the debt instrument measured at fair value through other comprehensive gains and losses is recognized in other comprehensive gains and losses and does not reduce its carrying amount.

• c) Derecognition of financial assets

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

On derecognition of a financial asset at amortized cost in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss. On derecognition of an investment in a debt instrument at FVTOCI, the difference between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss which had been recognized in other comprehensive income is recognized in profit or loss. However, on derecognition of an investment in an equity instrument at FVTOCI, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss, and the cumulative gain or loss which had been recognized in other comprehensive income is transferred directly to retained earnings, without recycling through profit or loss.

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2) Equity instruments

Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

Equity instruments issued by the Company are recognized at the proceeds received, net of direct issue costs.

The repurchase of the Company’s own equity instruments is recognized in and deducted directly from equity. No gain or loss is recognized in profit or loss on the purchase, sale, issuance or cancellation of the Company’s own equity instruments.

• 3) Financial liabilities

• a) Subsequent measurement

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

• b) Derecognition of financial liabilities

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

• 4) Convertible Bonds

The component parts of compound instruments (convertible bonds) issued by the Company are classified separately as financial liabilities and equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

On initial recognition, the fair value of the liability component is estimated using the prevailing market interest rate for similar non-convertible instruments. This amount is recorded as a liability on an amortized cost basis using the effective interest method until extinguished upon conversion or the instrument’s maturity date. Any embedded derivative liability is measured at fair value.

The conversion option classified as equity is determined by deducting the amount of the liability component from the fair value of the compound instrument as a whole. This is recognized and included in equity, net of income tax effects, and is not subsequently remeasured. In addition, the conversion option classified as equity will remain in equity until the conversion option is exercised, in which case, the balance recognized in equity will be transferred to capital surplus - share premium. When the conversion option remains unexercised at maturity, the balance recognized in equity will be transferred to capital surplus - share premiums.

Transaction costs that relate to the issue of the convertible notes are allocated to the liability and equity components in proportion to the allocation of the gross proceeds. Transaction costs relating to the equity component are recognized directly in equity. Transaction costs relating to the liability component are included in the carrying amount of the liability component.

• 5) Derivative financial instruments

The Company enters into foreign exchange forward contracts to manage its exposure to foreign exchange rate risks.

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Derivatives are initially recognized at fair value at the date on which the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in profit or loss immediately unless the derivative is designated and effective as a hedging instrument; in which event, the timing of the recognition in profit or loss depends on the nature of the hedging relationship. When the fair value of a derivative financial instrument is positive, the derivative is recognized as a financial asset; when the fair value of a derivative financial instrument is negative, the derivative is recognized as a financial liability.

Derivatives embedded in hybrid contracts that contain financial asset hosts that is within the scope of IFRS 9 are not separated; instead, the classification is determined in accordance with the entire hybrid contract. Derivatives embedded in non-derivative host contracts that are not financial assets within the scope of IFRS 9 (e.g., financial liabilities) are treated as separate derivatives when they meet the definition of a derivative, their risks and characteristics are not closely related to those of the host contracts, and the host contracts are not measured at FVTPL.

• l. Revenue recognition

After identifing the obligations along with sales contracts, the Company allocates the transaction price to each performance obligation and recognizes revenue when each performance obligation is satisfied.

Revenue from the sale of goods

Revenue from the sale of goods comes from automotive parts, computer parts and medical equipments. The Company recognizes revenue when the products are delivered and the control of their ownership are transferred.

Since the ownership of the processed product is not transferred, the revenue is not recognized during materials processing.

• m. Leases

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

The Company as lessee

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

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

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

• n. Borrowing costs

Borrowing cost directly attributable to the acquisition, construction or production of qualifying assets are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.

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Other than that which is stated above, all other borrowing costs are recognized in profit or loss in the period in which they are incurred.

• o. Employee benefits

• 1) Short-term employee benefits

Liabilities recognized in respect of short-term employee benefit are measured at the undiscounted amount of the benefits expected to be paid in exchange for service rendered by employees.

• 2) Retirement benefits

Payments to the benefit plan are recognized as an expense when the employees have rendered service entitling them to the contribution.

Defined benefit costs (including service cost, net interest and remeasurement) under the defined benefit retirement benefit plans are determined using the Projected Unit Credit Method. Service cost (including current service cost), and net interest on the net defined benefit liability (asset) are recognized as employee benefits expense in the period they occur. Remeasurement, comprising actuarial gains and losses and the return on plan assets (excluding interest), is recognized in other comprehensive income in the period in which they occur. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss.

Net defined benefit liabilities (assets) represents the actual deficit (surplus) in the Company’s defined benefit plan. Net defined benefit asset shall not exceed the present value of the allocation from the plan or the reduction of future allocation.

• p. Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

• 1) Current tax

Income tax payable (recoverable) is based on taxable profit (loss) for the year determined according to the applicable tax laws of each tax jurisdiction.

According to the Income Tax Law in the ROC, an additional tax on unappropriated earnings is provided for in the year the shareholders approve to retain earnings.

Adjustments of prior years’ tax liabilities are added to or deducted from the current year’s tax provision.

• 2) Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities and the corresponding tax bases used in the computation of taxable profit.

Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences, it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and associates, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated

• 24 -

with such investments are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the deferred tax asset to be recovered. The deferred tax assets which originally not recognized is also reviewed at the end of each reporting period and recognized to the extent that it is probable that sufficient taxable profits will be available to allow all or part of the deferred tax asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the year in which the liability is settled or the asset is realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

3) Current and deferred taxes

Current and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity, respectively.

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Company’s accounting policies, the management is required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The Company considers the economic implications of the COVID-19 when making its critical accounting estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised if the revisions affect only that period or in the period of the revisions and future periods if the revisions affect both current and future periods.

6. CASH AND CASH EQUIVALENTS

Cash on hand Checking accounts and demand deposits Cash equivalents (investments with original maturities of 3 months or less) Time deposits		December 31	December 31
		2020 $ 391 397,739 393,594 $ 791,724	2019 $ 41 777,726 350,766 $1,128,533

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7. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets at FVTPL-current Financial assets designated as at FVTPL Derivative financial assets (not under hedge accounting) Foreign exchange forward contracts (a) Financial assets at FVTPL-non-current Financial assets designated as at FVTPL Derivative financial assets (not under hedge accounting) Convertible bond redemption rights (b)		December	31
		2020 $ 12 $ -	2019 $ - $ 1,050

• a. At the end of the year, outstanding foreign exchange forward contracts not under hedge accounting were as follows:

					Notional Amount
			Currency	Maturity Date	(In Thousands)
December	31,	2020
Sell			USD/NTD	2021.01.25	USD 2,000/NTD 56,200
December	31,	2019:None.

The Company entered into foreign exchange forward contracts to manage exposures to exchange rate fluctuations of foreign currency denominated assets and liabilities.

• b. The Company has issued embedded derivatives that are not closely related to the host contract of convertible bonds (issuer redemption rights), the fair value assessed using option pricing model is provided in Note 18.

8. FINANCIAL ASSETS AT AMORTIZED COST

Current Domestic investments Time deposits with original maturities of more than 3 months		December 31	December 31
		2020 $ 40,698	2019 $ -

Refer to Note 9 for information relating to the credit risk management and impairment of investments in financial assets at amortized cost.

9. CREDIT RISK MANAGEMENT FOR INVESTMENTS IN DEBT INSTRUMENTS

Investments in debt instruments classified as at amortized cost were as follows:

Gross carrying amount Less: Allowance for impairment loss Amortized cost		December 31	December 31
		2020 $ 40,698 - $ 40,698	2019 $ - - $ -

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The credit risk of bank deposits and other financial instruments are measured and monitored. The Company invests only in debt instruments that are rated the equivalent of investment grade or higher and have low credit risk for the purpose of impairment assessment.

The Company’s current credit risk grading mechanism, the gross carrying amounts of debt instrument investments classified by credit category and the corresponding expected loss rates were shown below:

Category Performing	Description The counterparty has a low risk of default and a strong capacity to meet contractual cash flows	Basis for Recognizing Expected Credit Losses (ECLs) 12m ECLs	Expected Loss Rate 0%		Gross Carrying Amount	Gross Carrying Amount
					December 31
					2020 $ 40,698	2019 $ -

10. ACCOUNTS RECEIVABLE AND OTHER RECEIVABLES

Accounts receivable from unrelated parties At amortized cost Gross carrying amount Less: Allowance for impairment loss Accounts receivable from related parties At amortized cost Gross carrying amount Other receivables Other receivables from related parties		December 31	December 31
		2020 $ 738,315 (19,624) $ 718,691 $ 103 $ 14,279 $ 125	2019 $ 675,636 (8,280) $ 667,356 $ 224,233 $ 14,021 $ 137

The average credit period of sales of goods was 60 to 120 days. During this period no interest charge for the accounts receivable. The Company will use other available publicly financial information and historical transaction record to rank the credit of the counterparties, and may ask for sufficient collaterals to reduce the financial risk caused by the delay of the payments. The Company continue to monitor credit risk and the Credit Rank of the counterparties. And assess and approve the credit limit applied to counterparties every year to management of the credit risk.

To reduce the credit risk, the Company’s management assigned a special team in charge of assess and approval of credit facilities and other monitor procedures to reassurance and take action to recover overdue receivables. On the date of balance sheet, the Company will examine the amount of recovery accounts receivable accordingly, to ensure the allowance for losses in case deemed non-recoverable.

The Company adopted simplified approach of IFRS 9, to consider when determining its expectations of impairment. Under this model, expectations of future events must be taken into account and this will result in the earlier recognition of impairments. The Company assesses whether there has been a significant increase in credit risk since initial recognition by reviewing changes in external credit ratings, financial market conditions and market future outlook. According to the Company’s historical experience of credit loss, there is no significant difference in the loss patterns of customers’ segments. Therefore, the provision matrix didn’t further segment the customer base, only sets the expected credit loss rate based on the overdue days of accounts receivable.

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The Company use provision matrix to calculate the allowance for losses from accounts receivable as follows:

December 31, 2020

Not Past Due 1 to 60 Days Past Due Gross carrying amount $ 584,666 $ 121,020 Loss allowance (Lifetime ECLs) (2,352) (5,707) Amortized cost $ 582,314 $ 115,313 December 31, 2019 Not Past Due 1 to 60 Days Past Due Gross carrying amount $ 784,926 $ 96,320 Loss allowance (Lifetime ECLs) (685) (3,294) Amortized cost $ 784,241 $ 93,026	61 to 120 Days Past Due $ 23,652 (4,032) $ 19,620 61 to 120 Days Past Due $ 16,859 (3,072) $ 13,787	121 to 180 Days Past Due $ 3,572 (2,025) $ 1,547 121 to 180 Days Past Due $ 1,194 (659) $ 535	Over 181 Days Past Due $ 5,508 (5,508) $ - Over 181 Days Past Due $ 570 (570) $ -	Total $ 738,418 (19,624) $ 718,794 Total $ 899,869 (8,280) $ 891,589

The loss allowance for accounts receivable is calculated by the rate of expected credit loss at each aging range, and the rate of expected credit loss was 0.40% to 100%

Movements of the loss allowance for accounts receivable were as follows:

Balance at January 1 Add: Remeasurement of loss allowance Less: Reversal of loss allowance Balance at December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 8,280 11,344 - $ 19,624	2019 $ 13,281 - (5,001) $ 8,280

11. INVENTORIES

Finished goods		December 31	December 31
		2020 $ 133,280	2019 $ 89,039

The cost of revenue related to inventory for the years ended December 31, 2020 and 2019 were $1,826,305 thousand and $1,791,144 thousand respectively.

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12. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Investments in subsidiaries

Non listed company FORTUNE TOWER HOLDING CO., LTD. SEAMAX INTERNATIONAL LTD. ACE PLUS TECHNOLOGY LIMITED SIXXON PRECISION MACHINERY CO., LTD. (Yangmei)		**December 31 **	**December 31 **
		2020 $4,922,609 30,417 1,249 1,425,904 $6,380,179	2019 $4,145,933 30,562 1,356 1,365,180 $5,543,031

The proportion of ownership and voting rights in subsidiaries held by the Company were as follows:

FORTUNE TOWER HOLDING CO., LTD. SEAMAX INTERNATIONAL LTD. ACE PLUS TECHNOLOGY LIMITED SIXXON PRECISION MACHINERY CO., LTD. (Yangmei)	Proportion of Ownership and Voting Rights
	December 31
	2020 2019 100% 100% 100% 100% 100% 100% 100% -

The profit and loss of the subsidiaries for using the equity method and other comprehensive income in 2020 and 2019 are recognized based on the Independent Auditor’s Report in the same period.

On September 30, 2019, the Company’s board of directors decided to acquire all issued and outstanding ordinary shares of Sixxon Precision Machinery Co., Ltd. (Yangmei) by issuing shares, completing the transferring procedure on April 13, 2020. The reorganization in compliance with the “Comments on IFRS” and Interpretation issued by Accounting Research and Development Foundation, the merger resulted in a common control restructuring. Therefore, the merger is disclosed as if it had occurred at the beginning of the merger and the financial statements in previous year are restated when the Company prepares the comparative financial statements. Adjustments related to equity are recognized as “Equity Attributable to Predecessors’ Interests under Common Control.” Please refer to Note 27 for disclosures related to the acquisition of Sixxon Precision Machinery Co., Ltd. (Yangmei)

13. PROPERTY, PLANT AND EQUIPMENT

Cost Balance at January 1, 2019 Disposals Balance at December 31, 2019 Accumulated depreciation Balance at January 1, 2019 Depreciation expenses Disposals Balance at December 31, 2019 Carrying amounts at December 31, 2019	Freehold Land $ 16,801 - $ 16,801 $ - - - $ - $ 16,801	Buildings $ 11,250 - $ 11,250 $ 3,959 195 - $ 4,154 $ 7,096	Machinery Equipment $ 9,591 - $ 9,591 $ 9,553 38 - $ 9,591 $ -	Office Equipment $ 3,648 (30) $ 3,618 $ 3,648 - (30) $ 3,618 $ -	Total $ 41,290 (30) $ 41,260 $ 17,160 233 (30) $ 17,363 $ 23,897 (Continued)

• 29 -

Cost Balance at January 1, 2020 Additions Balance at December 31, 2020 Accumulated depreciation Balance at January 1, 2020 Depreciation expenses Balance at December 31, 2020 Carrying amounts at December 31, 2020	Freehold Land $ 16,801 - $ 16,801 $ - - $ - $ 16,801	Buildings $ 11,250 - $ 11,250 $ 4,154 195 $ 4,349 $ 6,901	Machinery Equipment $ 9,591 - $ 9,591 $ 9,591 - $ 9,591 $ -	Office Equipment $ 3,618 586 $ 4,204 $ 3,618 49 $ 3,667 $ 537	Total $ 41,260 586 $ 41,846 $ 17,363 244 $ 17,607 $ 24,239 (Concluded)

No impairment assessment was performed for the year ended December 31, 2020 and 2019 as there was no indication of impairment.

Property, plant and equipment were depreciated on a straight-line basis over the estimated useful life of the asset:

Buildings Main buildings 55 years Building improvement 3 years Machinery equipment 4-6 years Office equipment 3-5 years

14. LEASE ARRANGEMENTS

Expenses relating to short-term leases Total cash outflow for leases	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 242 $ 242	2019 $ 297 $ 297

The Company leases certain building and other equipment which qualify as short-term leases. The Company has elected to apply the recognition exemption and thus, did not recognize right-of-use assets and lease liabilities for these leases.

15. COMPUTER SOFTWARE, NET

Cost Balance at January 1 Additions Disposals Balance at December 31		**December 31 **	**December 31 **
		2020 $ 160 4,960 (160) $ 4,960	2019 $ 455 160 (455) $ 160 (Continued)

• 30 -

Accumulated amortization and impairment Balance at January 1 Amortization expenses Disposals Balance at December 31 Carrying amount atJanuary 1 Carrying amount atDecember 31		December 31	December 31
		2020 $ - (1,800) 160 $ (1,640) $ 160 $ 3,320	2019 $ (417) (38) 455 $ - $ 38 $ 160

(Concluded)

Amortization expenses were accrued on a straight-line basis over two years.

16. OTHER ASSETS

Current Other prepayments Other financial assets (Note 30) Others		**December 31 **	**December 31 **
		2020 $ 1,067 23 31,400 $ 32,490	2019 $ 8,476 23 28,167 $ 36,666

17. BORROWINGS

Short-term borrowings

Unsecured borrowings Credit loans		December 31	December 31
		2020 $ 568,000	2019 $ 808,000

The interest rate of credit loans was 0.85% to 1.08% and 0.85% to 1.00% for the years ended December 31, 2020 and 2019 respectively.

18. BONDS PAYABLE

Domestic unsecured bonds Less: Discount on bonds payable Subtotal amount Less: Current portion		December 31	December 31
		2020 $ 528,800 (453) 528,347 (528,347) $ -	2019 $ 1,500,000 (14,369) 1,485,631 - $ 1,485,631

• 31 -

Domestic unsecured convertible bonds

The company issued 15 thousand shares of unsecured convertible bonds denominated in New Taiwan Dollars, with an aggregate principle amount of $1,500,000 thousand and a coupon interest rate of zero percent on February 5, 2018.

• 1) Each unit of convertible bond holder has right to convert held bonds to common shares of issuing company at $156.6 per share during the conversion period starting from May 6, 2018 to February 5, 2021. (The initial conversion price of $ 193 was reset and amounted to $ 156.6 per share at ex-dividend date on October 20, 2020.)

• 2) Starting from May 6, 2018 to December 27, 2020, if the closing prices of the Company’s common stocks had surpassed the conversion price in 30 consecutive business days in a row to the extent of 30% (on) or above the foresaid price, or the balance of outstanding convertible bonds had been 10% lower than original issued amount, the Company may redeem outstanding bonds in cash at their par value.

The convertible bonds contain both liability and equity components. The equity component was presented in equity under the heading of capital surplus-share options. The effective interest rate of the liability component was 0.073% on initial recognition.

Proceeds from issuance (less transaction costs of $5,000 thousand) Equity component (less transaction costs allocated to the equity component of $346 thousand) Convertible bond redemption rights Liability component measured at issuance date (less: transaction costs allocated to liability $4,647 thousand) Liability component at January 1, 2019 Interest charged at an effective interest rate of 0.073% Liability component at December 31, 2019 Liability component at January 1, 2020 Interest charged at an effective interest rate of 0.073% Convertible bonds converted into ordinary shares Liability component at December 31, 2020

$ 1,502,500 (43,662) 2,257 $ 1,461,095 $ 1,472,679 12,952 $ 1,485,631 $ 1,485,631 11,329 (968,613) $ 528,347

Convertible bond redemption right is a financial asset measured at fair value through profit or loss. The estimated gain (loss) amount from changes in fair value for the year ended December 31,2020 and 2019 was $(483) thousand and $450 thousand respectively , The fair value of the financial assets was $0 thousand $1,050 thousand as of December 31, 2020 and 2019. Please refer to Note 7.

19. ACCOUNTS PAYABLE

Accounts payable Operating Accounts payable to unrelated parties Accounts payable to related parties		December	31
		2020 $ 18,940 $ 519,262	2019 $ 23,901 $ 550,261

• 32 -

The company has financial risk management policies in place to ensure that all payables were repaid within the pre-agreed credit terms.

20. OTHER LIABILITIES

Current Other payables Salaries and bonuses Insurance premiums Labor cost Employee compensation Board of directors and supervisors remuneration Tax and dues Others Other payables to related parties Other liabilities Temporary credits Receipts under custody		**December 31 **	**December 31 **
		2020 $ 25,122 1,201 3,080 25,769 21,320 5,091 9,908 $ 91,491 $ 504 $ 4,330 591 $ 4,921	2019 $ 23,421 1,477 1,050 24,096 19,514 1,022 11,280 $ 81,860 $ 348 $ 3,163 313 $ 3,476

21. RETIREMENT BENEFIT PLANS

a. Defined contribution plan

The Company adopted a pension plan under the Labor Pension Act (the “LPA”), which is a state-managed defined contribution plan. Under the LPA, the Company makes monthly contributions to employees’ individual pension accounts at 6% of monthly salaries and wages.

b. Defined benefit plans

The Company has defined benefit plans under the R.O.C. Labor Standards Law that provide benefits based on an employee’s length of service and average monthly salary for the six-month period prior to retirement. The Company contributes an amount equal to 4% of salaries paid each month to their respective pension funds (the Funds), which are administered by the Labor Pension Fund Supervisory Committee (the Committee) and deposited in the Committee’s name in the Bank of Taiwan. Before the end of each year, the Company assesses the balance in the Funds. If the amount of the balance in the Funds is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Company is required to fund the difference in one appropriation that should be made before the end of March of the next year. The Funds is managed by the Bureau of Labor Funds (“the Bureau”) under Taiwan’s Ministry of Labor; the Company has no right to influence the Bureau’s investment policy and strategy.

• 33 -

The amounts included in the balance sheets in respect of the Company’s defined benefit plans are as follows:

Present value of defined benefit obligation Fair value of plan assets Surplus Net defined benefit liabilities Movements in net defined benefit liabilities were as follows:		December	31
		2020 $ 11,188 (5,718) 5,470 $ 5,470	2019 $ 10,882 (5,457) 5,425 $ 5,425

	Present Value of	Present Value of		Net	Defined
	the	Defined		Benefit
	Benefit		Fair Value of	Liabilities
	Obligation		the Plan Assets	(Assets)
Balance at January 1, 2019	$	9,944	$ (5,169)	$	4,775
Net interest expense (income)		124	(65)		59
Recognized in profit or loss		124	(65)		59
Remeasurement
Return on plan assets (excluding amounts
included in net interest)		-	(169)		(169)
Actuarial loss
Changes in demographic assumptions		2	-		2
Changes in financial assumptions		636	-		636
Experience adjustments		176	-		176
Recognized in other comprehensive income		814	(169)		645
Contributions from the employer		-	(54)		(54)
Balance at December 31, 2019		10,882	(5,457)		5,425
Net interest expense (income)		81	(41)		40
Recognized in profit or loss		81	(41)		40
Remeasurement
Return on plan assets (excluding amounts
included in net interest)		-	(178)		(178)
Actuarial (gain) loss
Changes in demographic assumptions		1	-		1
Changes in financial assumptions		312	-		312
Experience adjustments		(88)	-		(88)
Recognized in other comprehensive income		225	(178)		47
Contributions from the employer		-	(42)		(42)
Balance at December 31, 2020	$	11,188	$ (5,718)	$	5,470

• 34 -

Through the defined benefit plans under the Labor Standards Law, the Company is exposed to the following risks:

• 1) Investment risk: The plan assets are invested in domestic and foreign equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the Bureau or under the mandated management. However, in accordance with relevant regulations, the return generated by plan assets shall not be below the interest rate for a 2-year time deposit with local banks.

• 2) Interest risk: A decrease in the government/corporate bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the plans’ debt investments.

• 3) Salary risk: The present value of the defined benefit obligation is calculated using the future salaries of plan participants. As such, an increase in the salaries of the plan participants will increase the present value of the defined benefit obligation.

The actuarial valuations of the present value of the defined benefit obligation were carried out by qualified actuaries. The significant assumptions used for the purposes of the actuarial valuations are as follows:

Discount rate Expected rate of salary increase	December 31
	2020 2019 0.500% 0.750% 2.250% 2.250%

If possible reasonable changes in each of the significant actuarial assumptions will occur and all other assumptions will remain constant, the present value of the defined benefit obligation will increase (decrease) as follows:

Discount rate(s) 0.25% increase 0.25% decrease Expected rate(s) of salary increase 0.25% increase 0.25% decrease		**December **	**31 **
		2020 $ (312) $ 324 $ 312 $ (302)	2019 $ (324) $ 337 $ 326 $ (315)

The sensitivity analysis presented above may not be representative of the actual change in the present value of the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Expected contributions to the plans for the next year Average duration of the defined benefit obligation		**December **	**31 **
		2020 $ 41 11.2 years	2019 $ 60 12.0 years

• 35 -

22. EQUITY

• a. Share capital

Ordinary share

Number of shares authorized (in thousands of shares) Shares authorized Number of shares issued and fully paid (in thousands of shares) Shares issued Captial collected in advance		**December 31 **	**December 31 **
		2020 150,000 $ 1,500,000 109,610 $ 1,096,103 $ 24,878	2019 150,000 $ 1,500,000 81,934 $ 819,340 $ -

The holders of issued share capital with a par value of $10 are entitled to the right to vote and to receive dividends.

The change in the Company's share capital is mainly due to exchanging shares to get control of a subsidiary. The Company acquires all issued and outstanding ordinary shares of Sixxon Precision Machinery Co., Ltd. (Yangmei) by issuing shares, 1.25 shares of Sixxon Precision Machinery Co., Ltd. (Yangmei) exchanging per share of the Company. The exchanging percentage is based on related financial information of the Company and Sixxon Precision Machinery Co., Ltd. (Yangmei) in recent years. The comment of the independent expert is also inquired to decide the exchanging percentage. The opinion related to the rationality of the merge has been prepared.

On September 30, 2019, the Company's board of directors resolved to issue 24,000 thousand ordinary shares with a par value of $10, which increased $240,000 thousand share issued. The transferring procedure should be completed on April 13, 2020, which was decided by the Company's board of directors on March 23, 2020. The merge was registered on May 25, 2020.

Convertible bonds have been converted into 6,164 thousand ordinary shares for the year ended December 31, 2020, with 3,676 thousand ordinary shares registered. The registration for the other 2,488 thousand ordinary shares has not been completed, therefore $24,878 thousand is disclosed under the account of Capital Collected in Advance. Please refer to Note 18.

b. Capital surplus

May be used to offset a deficit, distributed as cash dividends, or transferred to share capital (1) Share premium(2) Conversion of bonds May not be used for any purpose Share options (3)(Note 18)		December 31	December 31
		2020 $ 2,288,638 934,674 15,393 $ 3,238,705	2019 $ 1,064,002 - 43,662 $ 1,107,664

• (1) The capital surplus from shares issued in excess of par may be used to offset a deficit; in addition, when the Company has no deficit, such capital surplus may be distributed as cash dividends or transferred to capital, but limited to a certain percentage of the Company’s paid-in capital each year.

• 36 -

• (2) On September 30, 2019, the Company’s board of directors decided to acquire all issued and outstanding ordinary shares of Sixxon Precision Machinery Co., Ltd. (Yangmei) by issuing shares. The reorganization resulted in a common control restructuring. Please refer to Note 12. Therefore, the amount accounted for should be the book value of the target company hold by predecessors less the impairment loss. Differences between the amount and the acquisition cost is $1,224,636 thousand, which increases Capital Surplus.

• (3) Such capital surplus generated from recognition of convertible bonds will be adjusted upon conversion or expiration of underlying assets.

• c. Retained earnings and dividends policy

Under the earning distribution policy of the Company’s Articles, where the Company made profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as legal reserve 10% of the remaining profit, setting aside or reversing a special reserve in accordance with the laws and regulations, and any remaining profit together with any undistributed retained earnings shall be used by the Company’s board of directors as the basis for proposing a distribution plan, which shall be resolved in the shareholders’ meeting. The Company’s board of directors, with both two thirds of directors attends the meeting and half of the attended directors aggrees, is authorized to determine the distribution plan and reports to the shareholders’ meeting instead when the distribution is determined by cash.

The distribution policy is base on the consideration of any future operating plans and fund demand, which shall be resolved in the shareholders’ meeting for the distribution of dividends and bonuses to shareholders by cash or shares, cash dividends shall be distributed not less than 30% of profit, which was offseted losses and deducted legal reserve and special reserve. However, if the Company’s shareholder dividend is less than $0.5 per share, retained earnings will not be distributed. The Company can distribute the dividends by cash or shares, cash dividend is not less than 50% of the total dividend. For the employee and directors' compensation distribution policy as stipulated in the Company's Articles, please refer to Note 24 (h) Employees’ Compensation and Directors’ Remuneration.

The legal reserve shall be allocated until the balance reaches the total paid-in capital of the company. The legal reserve can be used for make up losses. When the company has no losses, the portion of the legal reserve exceeds 25% of the total paid-in capital may be transferred to capital or distributed as cash dividends.

Pursuant to Letter Number 1010012865 and Letter Number 1010047490 issued by the Financial Supervisory Commission and “Adoption of International Financial Reporting Standards (IFRSs), Questions and Answers to an application for permission to capitalize its legal reserve or capital reserve” set aside and reversal special reserve in accordance with the provisions. After other shareholders' equity deductions have been reversed, the surplus shall be distributed in the reversal part.

The appropriation of retained earnings for 2019 and 2018 had been approved by the Company’s shareholders’ meetings held on June 22, 2020 and June 14, 2019, respectively. The appropriations and dividends per share were as follows:

Legal reserve Special reserve Cash dividends Cash dividends per share (NT$)	Appropriation of Earnings	Appropriation of Earnings	Appropriation of Earnings
	For the Year Ended		December 31
		2019 $ 62,243 $ 152,958 $ 204,835 $ 2.50	2018 $ 49,971 $ 34,167 $ 253,995 $ 3.10

• 37 -

The appropriation of retained earnings for 2020 had been proposed by the board of director on March 22, 2021 is as follows:

	For the Year	For the Year
		Ended
	December 31,
		2020
Legal reserve	$	67,189
Special reserve	$	(68,885)
Cash dividends	$	460,890
Cash dividends per share (NT$)	$	4.00

The appropriation of earnings for 2020 is subject to the resolution of the shareholders in the shareholders’ meeting to be held in June 2021.

• d. Special reserve

Balance at January 1 Appropriations in respect of Deduction amount to other equity Balance at December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 118,410 152,958 $ 271,368	2019 $ 84,243 34,167 $ 118,410

• e. Other equity items

Exchange differences on translating the financial statements of foreign operations

Balance at January 1 Recognized for the year Exchange differences on translating the financial statements of foreign operations Income tax effect Other comprehensive income recognized for the year Balance at December 31	**For the Year Ended **	**For the Year Ended **	**December 31 **
		2020 $ (271,368) 86,107 (17,222) 68,885 $ (202,483)	2019 $ (118,410) (191,198) 38,240 (152,958) $ (271,368)

23. REVENUE

Revenue from contracts with customers Revenue from the sale of goods	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 2,403,424	2019 $ 2,414,853

• 38 -

24. NET PROFIT

• a. Interest income

Bank deposits Financial assets at amortized cost	**For the Year Ended December 31 **	**For the Year Ended December 31 **	**For the Year Ended December 31 **
		2020 $ 6,417 444 $ 6,861	2019 $ 6,295 - $ 6,295

• b. Other income

Others c. Other gains and losses Net foreign exchange losses Fair value changes of financial assets designated as at FVTPL d. Finance costs Interest on bank loans Interest on convertible bonds e. Depreciation and amortization An analysis of depreciation by function Operating expenses An analysis of amortization by function Operating expenses f. Research and development expenditure recognized as expenses Research and development expenditures	For the Year Ended	For the Year Ended	For the Year Ended	December 31
	2020 $ 209 For the Year Ended			2019 $ - December 31
	2020 $ (39,696) (471) $ (40,167) For the Year Ended			2019 $ (28,649) 450 $ (28,199) December 31
	2020 $ 7,062 11,329 $ 18,391 **For the Year Ended **			2019 $ 7,596 12,952 $ 20,548 **December 31 **
	2020 $ 244 $ 1,800 For the Year Ended			2019 $ 233 $ 38 December 31
		2020 $ 23,910	2019 $ 28,596

• 39 -

g. Employee benefits expense

Short-term employee benefits Post-employment benefits Defined contribution plan Defined benefit plans (Note 21) Other employee benefits Total employee benefits expense An analysis of employee benefits expense by function Operating expenses	For the Year Ended	For the Year Ended	December 31
		2020 $ 105,163 2,506 40 3,696 $ 111,405 $ 111,405	2019 $ 98,716 2,489 59 4,768 $ 106,032 $ 106,032

h. Employees’ compensation and directors’ remuneration

In accordance with the provisions of the Company’s Articles of Incorporation, the Company shall allocate its net profit before income tax as employees’ compensation and directors’ remuneration at a rate of no less than 2% and no more than 2.24%. The employees’ compensation and directors’ remuneration for the years ended December 31, 2020 and 2019 have been approved by the Company’s board of directors on March 22, 2021 and March 23, 2020, respectively:

Accrual rate

Employees’ compensation Directors’ remuneration Amount Employees’ compensation Directors’ remuneration	For the Year Ended December 31
	2020 2019 2.69% 2.69% 1.35% 1.35% **For the Year Ended December 31 **
	2020 2019 $ 22,236 $ 21,483 11,159 10,781

If the amount changes after the annual financial statements issued date, it will be processed according to the accounting estimates and adjusted in the next year.

There was no difference between the actual distributed amount of the employee's compensation and the director's remuneration for 2019 and 2018 and the amount recognized in the financial statements for the years ended of 2019 and 2018.

The information of the employees’ compensation and the director's remuneration resolved by the board of directors is available on the Market Observation Post System (MOPS) website of the Taiwan Stock Exchange.

• 40 -

i. Foreign exchange gains and losses

Foreign exchange gains Foreign exchange losses Gains (losses), net	For the Year Ended	For the Year Ended	December 31
		2020 $ 30,580 (70,276) $ (39,696)	2019 $ 36,896 (65,545) $ (28,649)

25. INCOME TAXES

a. Income tax recognized in profit or loss

Major components of income tax expense are as follows:

b.	For the Year Ended 2020 Current tax In respect of the current year $ 66,962 Income tax on unappropriated earnings 10,087 77,049 Deferred tax In respect of the current year 51,772 Income tax expense recognized in profit or loss $ 128,821 A reconciliation of accounting profit and income tax expense is as follows: For the Year Ended 2020 Profit before tax $ 900,216 Income tax expense calculated at the statutory rate $ 180,043 Nondeductible expenses or deductible items in determining taxable income (61,549) Income tax on unappropriated earnings 10,087 Others 240 Income tax expense recognized in profit $ 128,821 Income tax recognized in other comprehensive income For the Year Ended 2020 Deferred tax Current tax In respect of the current year Translation of foreign operations $ (17,222) Total income tax recognized in other comprehensive income $ (17,222)	For the Year Ended	For the Year Ended	December 31
				2019 $ 99,128 8,083 107,211 61,351 $ 168,562 December 31
		2020 $ 900,216 $ 180,043 (61,549) 10,087 240 $ 128,821 For the Year Ended		2019 $1,076,852 $ 215,370 (54,891) 8,083 - $ 168,562 December 31
			2020 $ (17,222) $ (17,222)	2019 $ 38,240 $ 38,240

• 41 -

c. Current tax assets and liabilities

Current tax liabilities Income tax payable		December	31
		2020 $ 26,790	2019 $ 66,244

d. Deferred tax assets and liabilities

The movements of deferred tax assets and deferred tax liabilities are as follows:

For the year ended December 31, 2020

Deferred tax assets Temporary differences Gains or losses on foreign investment accounted for using equity method Exchange differences on translating the financial statements of foreign operations Differences arising from unrealized profits or losses Deferred tax liabilities Temporary differences Gains or losses on foreign investment accounted for using equity method Differences on contribution of defined benefit retirement plan Differences arising from unrealized profits or losses	Opening Balance Recognized in Profit or Loss Recognized in Other Compre- hensive Income $ 1,166 $ (299) $ - 67,830 - (17,222) 7,561 (2,386) - $ 76,557 $ (2,685) $ (17,222) $ 300,451 $ 49,084 $ - 2,944 1 - - 2 - $ 303,395 $ 49,087 $ -	Closing Balance $ 867 50,608 5,175
		$ 56,650
		$ 349,535 2,945 2
		$ 352,482

• 42 -

For the year ended December 31, 2019

Deferred tax assets Temporary differences Gains or losses on foreign investment accounted for using equity method Exchange differences on translating the financial statements of foreign operations Differences arising from unrealized profits or losses Deferred tax liabilities Temporary differences Gains or losses on foreign investment accounted for using equity method Differences on contribution of defined benefit retirement plan	Opening Balance Recognized in Profit or Loss Recognized in Other Compre- hensive Income $ 438 $ 728 $ - 29,590 - 38,240 57 7,504 - $ 30,085 $ 8,232 $ 38,240 $ 230,867 $ 69,584 $ - 2,945 (1) - $ 233,815 $ 69,583 $ -	Closing Balance $ 1,166 67,830 7,561
		$ 76,557
		$ 300,451 2,944
		$ 303,395

e. Income tax examination

The tax authorities have examined income tax of the Company through 2018.

26. EARNINGS PER SHARE

Unit: NT$ Per Share

Basic earnings per share From continuing operations Diluted earnings per share From continuing operations	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 7.19 $ 6.75	2019 $ 8.57 $ 8.03

• 43 -

The weighted average number of shares outstanding used for the earnings per share computation was adjusted retroactively for the issuance of reorganization on April 13, 2020. The basic and diluted earnings per share adjusted retrospectively for the year ended December 31, 2019 are as follows:

	Unit:	NT$ Per Share
	Before	After
	Retrospective	Retrospective
	Adjustment	Adjustment
Basic earnings per share	$ 7.60	$ 8.57
Diluted earnings per share	$ 6.99	$ 8.03

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

Net Profit for the Year

Unit: NT$ Per Share

Profit for the year attributable to owners of the Company Profit for the year attributable to predecessors’ interests under common control Earnings used in the computation of basic earnings per share Effect of potentially dilutive ordinary shares Interest on convertible bonds (after tax) Earnings used in the computation of diluted earnings per share	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 671,939 99,456 771,395 9,063 $ 780,458	2019 $ 622,427 285,863 908,290 10,362 $ 918,652

Number of Shares

Unit: In Thousand Shares

Weighted average number of ordinary shares used in the computation of basic earnings per share Effect of potentially dilutive ordinary shares Convertible bonds Employees’ compensation Weighted average number of ordinary shares used in the computation of diluted earnings per share	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 107,226 8,286 189 115,701	2019 105,934 8,380 160 114,474

If the Company offers to settle compensation paid to employees in cash or shares, assumes the entire amount of the compensation will be settled in shares, and potential shares were included in the weighted average number of shares outstanding used in the computation of diluted earnings per share, as the shares have a dilutive effect. Such dilutive effect of shares was included in the computation of diluted earnings per share until the number of distributed to employees is resolved in the following year.

• 44 -

27. CAPITAL MANAGEMENT

The Company manages its capital to ensure that entities in the Company will be able to continue as going concerns while maximizing the return to stockholders through the optimization of the debt and equity balance.

The capital structure of the Company consists of net debt (borrowings offset by cash and cash equivalents) and equity of the Company (comprising issued share capital, capital reserves, retained earnings, other equity). The company is not subject to other external capital requirements.

The major management of the Company re-examines the capital structure of the Company on a quarterly basis. The review includes consideration of the cost of various types of capital and related risks. Based on the recommendations of the major management, the Company will balance its overall capital structure by paying dividends, issuing new shares, buying back shares and issuing new debts or repaying old debts.

28. FINANCIAL INSTRUMENTS

• a. Information on fair value - Fair value of financial instruments not measured at fair value

When the carrying amounts of financial assets and financial liabilities that are not measured at fair value are so near their maturity or the future exit prices are equivalent to their fair values, management of the Company believed that the carrying amounts approximate their fair values.

• b. Information on fair value - Fair value of financial instruments measured at fair value on a recurring basis

• 1) Fair value hierarchy

December 31, 2020

Financial assets at FVTPL Derivative financial assets December 31, 2019 Financial assets at FVTPL Convertible bonds redemption rights	Level 1 $ - Level 1 $ -	Level 2 $ 12 Level 2 $ -	Level 3 $ - Level 3 $ 1,050	Total $ 12 Total $ 1,050

There were no transfers between Levels 1 and 2 in the current and prior year.

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

Financial Instrument

Valuation Technique and Inputs

Derivatives - foreign exchange Discounted cash flow. forward contracts

Future cash flows are estimated based on observable forward exchange rates at the end of the year and contract forward rates, discounted at a rate that reflects the credit risk of various counterparties.

• 45 -

• 3) Reconciliation of Level 3 fair value measurements of financial instruments

For the year ended December 31, 2020

Balance at January 1, 2020 Recognized in profit or loss (included in other gains and losses) Sales/settlements Balance at December 31, 2020 For the year ended December 31, 2019 Balance at January 1, 2019 Recognized in profit or loss (included in other gains and losses) Balance at December 31, 2019	Financial Assets at FVTPL	Financial Assets at FVTPL
	Derivatives - Convertible Bonds Redemption Rights
	$ 1,050 (483) (567) $ - Financial Assets at FVTPL
	Derivatives - Convertible Bonds Redemption Rights
		$ 600 450 $ 1,050

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

Derivatives - Convertible bond redemption rights use the binary tree pricing to convertible bond valuation model to estimate fair value, using a significant unobservable input value as stock price volatility. As stock price volatility increases, the fair value of these derivatives will increase. The stock price volatility adopted on December 31, 2020 and 2019 was 55.46% and 44.61%.

If the following input values are changed to reflect a reasonably possible alternative hypothesis, when all other inputs remain unchanged, the amount of increase (decrease) in the fair value of the redemption right will be as follows:

Volatility 1% increase 1% decrease		**December 31 **	**December 31 **
		2020 $ - $ -	2019 $ 10 $ -

• 46 -

c. Categories of financial instruments

Financial assets FVTPL Designated as at FVTPL Financial assets at amortized cost (1) Financial liabilities Amortized cost (2)	December 31
	2020 2019 $ 12 $ 1,050 1,566,002 2,034,662 1,726,544 2,950,001

• 1) The balances include financial assets at amortized cost, which comprise cash and cash equivalents, financial assets at amortized cost, accounts receivable, other receivables, other financial assets and guarantee deposits paid.

• 2) The balances include financial liabilities at amortized cost, which comprise short-term borrowings, accounts payable, other payables, bonds payables and current portion of long-term libilities.

• d. Financial risk management objectives and policies

The major financial instrument of the Company including account receivables, account payables and loans and bond payables. To reduce the financial risks including market risk (including foreign currency risk, interest rate risk), credit risk and liquidity risks. The company is committed to ensuring that the company has sufficient and cost-effective operating capital in response to its operations. The Company prudently manages foreign currency exchange rate risk, equity instrument price risk, credit risk and liquidity risk related to operating activities to reduce the market's uncertainty and potentially adversely affect the company's finances.

1) Market risk

• a) Foreign currency risk

The company is engaged in foreign currency denominated sales and purchase transactions, thus causing the company exposure to the exchange rate change risk. In respect of the management of exchange rate risk, the Company's dedicated units regularly review the assets and liabilities affected by the exchange rate and use appropriate hedging instruments to control the risks arising from foreign exchange fluctuations.

At the Company's balance sheet date, the carrying amounts of monetary assets and monetary liabilities denominated in non-functional currencies are as follows:

Assets USD EUR	For the Year Ended December 31
	2020 2019 $ 1,223,415 $ 1,306,267 226,194 279,872 (Continued)

• 47 -

Liabilities USD EUR Sensitivity analysis	For the Year Ended December 31 2020 2019 $ 435,402 $ 491,701 26,580 15,541 (Concluded)

The Company was mainly affected by fluctuations in the exchange rate of USD and EUROs, and the sensitivity analysis of the foreign currency appreciation and depreciation 1% of the New Taiwan Dollar as a risk of reporting exchange rate changes to the major internal management, also represents management's assessment of the reasonably possible range of foreign currency exchange rates.

The sensitivity analysis includes the amount of monetary assets and monetary liabilities denominated by the Company in non-functional currency at the balance sheet date, and is affected by fluctuations in the foreign currency exchange rate by 1% at the end of the year. The positive numbers in the following summary table represent the increase in the amount of net profit before tax for the current year when the foreign currency is appreciated against the New Taiwan Dollar.

Profit or loss Profit or loss	Currency USD Impact
	For the Year Ended **December 31 **
	2020 2019 $ 7,880 $ 8,146 Currency EUR Impact
	For the Year Ended **December 31 **
	2020 2019 $ 1,996 $ 2,643

b) Interest rate risk

Taking loans with floating interest rate had exposed the Company to interest rate risk. The Company adopted a policy of taking loans with floating interest rate as a means to mitigate risk arising from changes in interest rates. Therefore, the managerial personnel assessed that the effects of taking floating interest rate loans is not significant.

Interest rates applied over bank deposits the Company held are relatively stable, therefore, revenue and operating cash flows of the consolidated company are not affected by changes in market rates.

• 48 -

Carrying amounts of financial assets and financial liabilities exposed to interest rate risk are as below:

Cash flow interest rate risk Financial assets Financial liabilities	December 31
	2020 2019 $ 832,054 $ 1,128,515 568,000 808,000

The following sensitivity analysis was based on the non-derivatives instruments exposed to interest rate risks at the end of the reporting period.

Sensitivity analysis

The Company uses 0.5% increase or decrease as a reasonable risk assessment to report changes in interest rates to the the managerial personnel. If the other conditions remain unchanged and the interest capitalization factor is not taken into consideration, the interest rate increase 0.5% will increase the net profit before tax of the Company for 2020 and 2019 by $1,320 thousand and $1,603 thousand respectively.

2) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company’s credit risk primarily comes from accounts receivable. The Company will review the receivable amount one by one to ensure that uncollectible receivables have been provided with appropriate impairment losses. Therefore, no significant credit risk is expected, and details of overdue and impairment losses please refer to Note 10.

• 3) Liquidity risk

The objective of the Company’s management of liquidity is to maintain cash and cash equivalents sufficient for operating purposes and reduce the impact of cash flow fluctuations. The Company’s management supervises the use of bank loan quotas and ensures compliance with the terms of the loan agreement.

Bank loan is an important source of liquidity for the Company. As of December 31, 2020 and 2019, the unutilized short-term bank loan quota of the Company was $1,654,318 thousand and $822,561 thousand respectively.

Liquidity and interest rate risk tables for non-derivative financial liabilities

An analysis of remaining contractual maturity of the non-derivative financial liabilities is based on undiscounted cash flows of financial liabilities (including principal and estimated interest), the Company may be required to repay. Therefore, bank loans with repayment on demand clause were included in the earliest time band regardless of the probability of the banks choosing to exercise their rights. The maturity dates for other non-derivative financial liabilities were based on the agreed repayment dates.

To extent that interest flows are floating rate, the undiscounted amount was derived from the yield curve at the end of the reporting period.

• 49 -

December 31, 2020

	Effective Interest		Less than
	Rate(%)		1 Year		1-5 Years		5+ Years
Non–derivative
financial liabilities
Bank loans	0.92	$	568,000	$	-	$	-
Accounts payable	-		538,202		-		-
Other payables	-		91,995		-		-
Current portion of
long-term liabilities	0.073		528,347		-		-
December 31, 2019
	Effective Interest		Less than
	Rate(%)		1 Year		1-5 Years		5+ Years
Non–derivative
financial liabilities
Bank loans	0.90	$	808,000	$	-	$	-
Accounts payable	-		574,162		-		-
Other payables	-		82,208		-		-
Bonds payables	0.073		-		1,485,631		-

29. TRANSACTIONS WITH RELATED PARTIES

Besides information disclosed elsewhere in the other notes, details of transactions between the Company and other related parties are disclosed as follows.

• a. Related party name and category

Related Party Name

Related Party Category

SIXXON TECH CO., LTD. (henceforth referred to as “SIXXON TECH”)

• SIXXON PRECISION MACHINERY CO., LTD. (Yangmei) (henceforth referred to as ”SIXXON (Yangmei)”)

• SEAMAX INTERNATIONAL LTD. (henceforth referred to as “SIWS”)

• ACE PLUS TECHNOLOGY LIMITED (henceforth referred to as “APWS”)

• THAIXON TECH CO., LTD. (henceforth referred to as “TT”)

• GLOBAL-THAIXON PRECISION INDUSTRY CO., LTD.(henceforth referred to as “GT”)

• FORTUNE TOWER HOLDING CO., LTD. (henceforth referred to as “FTWS”)

• Investors with significant influence over the Company

Subsidiary

Subsidiary

Subsidiary

Other related parties

Other related parties

Other related parties

• 50 -

b. Operating revenue

Line Item Related Party Category/Name Sales of goods Subsidiary Other related parties Purchases of goods Related Party Category/Name SIWS APWS SIXXON (Yangmei) Other	For the Year Ended	For the Year Ended	December 31
	2020 $ - 159 $ 159 For the Year Ended		2019 $ 21,729 110 $ 21,839 December 31
		2020 $ 995,445 634,431 243,107 168 $1,873,151	2019 $ 1,115,985 519,097 216,145 - $ 1,851,227

• c. Purchases of goods

• d. Receivables from related parties (excluding loans to related parties)

Line Item Related Party Category/Name Accounts receivable SIWS Other receivables GT SIXXON (Yangmei)		December 31	December 31
		2020 $ 103 $ - 125 $ 125	2019 $ 224,233 $ 108 29 $ 137

• e. Payables to related parties (excluding loans from related parties)

Line Item Related Party Category/Name Accounts payable SIWS APWS SIXXON (Yangmei) Other Other payables FTWS SIXXON (Yangmei)		December 31	December 31
		2020 $ 251,164 178,881 89,154 63 $ 591,262 $ 350 154 $ 504	2019 $ 213,029 258,728 78,504 - $ 550,261 $ - 348 $ 348

Terms and conditions for sales and purchases of goods from related parties are the same as that of general transactions.

• 51 -

The outstanding accounts receivable from related parties and accounts payable to related parties are unsecured and are settled in cash. No guarantees are provided or received for accounts receivable from related parties, hence no allowance for impairment loss are recognized for years ended December 31, 2020 and 2019.

• f. Lease arrangements

Line Item Related Party Category/Name Lease expense Investors with significant influence over the Company Other transactions with related parties Line Item Related Party Category/Name Guarantee deposits paid SIXXON TECH Line Item Related Party Category/Name Development expenses Subsidiary	For the Year Ended	For the Year Ended	December 31
		2020 2019 $ 180 $ 180 **December 31 **
	2020 $ 200 For the Year Ended		2019 $ 200 December 31
		2020 $ -	2019 $ 771

• g. Other transactions with related parties

• h. Remuneration of key management personnel

Short-term employee benefits Post-employment benefits	For the Year Ended	For the Year Ended	December 31
		2020 $ 20,470 164 $ 20,634	2019 $ 19,866 223 $ 20,089

The remuneration of directors and key executives, as determined by the remuneration committee, was based on the performance of individuals and market trends.

30. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

The following assets were provided as collateral for bank borrowings:

Other financial assets		**December 31 **	**December 31 **
		2020 $ 23	2019 $ 23

31. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS : None

32. SIGNIFICANT LOSSES FROM DISASTERS : None

33. SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD : None

• 52 -

34. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The following information was summarized according to the foreign currencies other than the functional currency of the Company. The exchange rates disclosed were used to translate the foreign currencies into the functional currency. The significant financial assets and liabilities denominated in foreign currencies were as follows:

December 31, 2020

		Foreign		Carrying
		Currency	Exchange Rate	Amount
Financial assets
Monetary items
USD	$	42,957	28.48	$ 1,223,415
EUR		6,459	35.02	226,194
JPY		3,394	0.276	938
RMB		18,724	4.377	81,955
Non-monetary items
Investments accounted for using the equity
method
USD		173,956	28.48	4,954,275
Financial liabilities
Monetary items
USD		15,288	28.48	435,402
EUR		759	35.02	26,580
JPY		39,500	0.276	10,914
HKD		383	3.673	1,407
RMB		3,798	4.377	16,624
December 31, 2019
		Foreign		Carrying
		Currency	Exchange Rate	Amount
Financial assets
Monetary items
USD	$	43,571	29.98	$ 1,306,267
EUR		8,332	33.59	279,872
JPY		3,394	0.276	937
HKD		582	3.849	2,241
RMB		24,758	4.305	106,585
Non-monetary items
Investments accounted for using the equity
method
USD		139,355	29.98	4,177,851
				(Continued)

• 53 -

		Foreign			Carrying
		Currency	Exchange Rate		Amount
Financial liabilities
Monetary items
USD	$	16,401	29.98	$	491,701
EUR		463	33.59		15,541
HKD		495	3.849		1,905
RMB		1,757	4.305		7,567
					(Concluded)

The significant financial assets and liabilities denominated in foreign currencies were as follows:

Functional Currency USD EUR	For the Year Ended December 31, 2020 Exchange Rate Net Foreign Exchange Gains (Losses) 29.55 (USD:NTD) $ (48,275) 33.71 (EUR:NTD) 2,003 $ (46,272)	For the Year Ended December 31, 2019
		Exchange Rate Net Foreign Exchange Gains (Losses) 30.91 (USD:NTD) $ (19,743) 34.61 (EUR:NTD) (11,618) $ (31,361)

35. SEPARATELY DISCLOSED ITEMS

• a. Information about significant transactions:

• 1) Financing provided to others (Table 1)

• 2) Endorsements/guarantees provided (Table 2)

• 3) Marketable securities held (None)

• 4) Marketable securities acquired or disposed of at costs or prices of at least NT$100 million or 20% of the paid-in capital (None)

• 5) Acquisition of individual real estate at costs of at least NT$100 million or 20% of the paid-in capital (None)

• 6) Disposal of individual real estate at prices of at least NT$100 million or 20% of the paid-in capital (None)

• 7) Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital (Table 3)

• 8) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital (Table 4)

• 9) Trading in derivative instruments (Note 7)

• b. Information on investees (Table 5)

• c. Information on investments in mainland China

• 54 -

• 1) Information on any investee company in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, net income of investees, investment income or loss, carrying amount of the investment at the end of the year, repatriations of investment income, and limit on the amount of investment in the mainland China area (Table 6)

• 2) Any of the following significant transactions with investee companies in mainland China, either directly or indirectly through a third party, and their prices, payment terms, and unrealized gains or losses (Table 6):

  • a) The amount and percentage of purchases and the balance and percentage of the related payables at the end of the year

  • b) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the year

  • c) The amount of property transactions and the amount of the resultant gains or losses

  • d) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the year and the purposes

  • e) The highest balance, the ending balance, the interest rate range, and total current period interest with respect to the financing of funds

  • f) Other transactions that have a material effect on the profit or loss for the year or on the financial position, such as the rendering or receipt of services

• d. Information of major shareholders: list all shareholders with ownership of 5% or greater showing the name of the shareholder, the number of shares owned, and percentage of ownership of each shareholder (Table 7)

• 55 -

TABLE 1

GLOBAL PMX CO., LTD.

FINANCING PROVIDED TO OTHERS FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

No.	Lender	Borrower	Financial Statement Account	Related Party	Highest Balance for the Period	Ending Balance	Actual Amount Borrowed	Interest Rate (%)	Nature of Financing	Business Transaction Amount	Reasons for Short-term Financing	Allowance for Impairment Loss	**Collateral **	**Collateral **	Financing Limit for Each Borrower	Aggregate Financing Limit	Note
													Item	Value
1 2 3	FORTUNE TOWER HOLDING CO.,LTD. GLOBAL ADVANCE TECHNOLOGY LIMITED GLOBAL ADVANCE TECHNOLOGY LIMITED	GLOBAL ADVANCE TECHNOLOGY LIMITED FORTUNE TOWER HOLDING CO.,LTD. GLOBAL PMX CO., LTD. (Zhejiang)	Other receivables from related parties Other receivables from related parties Other receivables from related parties	Yes Yes Yes	$ 278,522 12,076 1,831,328	$ 267,712 - 1,634,693	$ 267,712 - 1,364,133	- - 2% ~ 5%	The need for short-term financing The need for short-term financing The need for short-term financing	$ - - -	Operating capital Operating capital Operating capital	$ - - -	- - -	$ - - -	$ 9,853,512 8,024,042 8,024,042	$ 9,853,512 8,024,042 8,024,042	Note 2 Note 3 Note 4

Note 1: The maximum financing amount provided by the Company is calculated as follows:

• 1) Nature of financing attributed to business transaction, each separately financing amount shall not exceed amount of transactions between two parties, aggregate financing amount shall not exceed 20% of net worth of the Company for the period. Transaction amount refers to the higher of purchases or sales between two parties within the latest year. Nature for financing attributed to short-term financing needs, each separately financing amount shall not exceed 20% of net worth of the Company for the period, and aggregate financing amount shall not exceed 40% of net worth of the Company for the period.

• 2) Foreign company loans between overseas companies in which the Company holds directly or indirectly 100% of the voting shares, and financing limits for each entity, as well as limits on aggregate financing amount should not exceed 200% of net worth of the lender.

Note 2: Maximum limit on financing from FORTUNE TOWER HOLDING CO., LTD. provided to GLOBAL ADVANCE TECHNOLOGY LIMITED was computed as $ 4,926,756 thousand multiplied by 200% equal to $ 9,853,512 thousand.

Note 3: Maximum limit on financing from GLOBAL ADVANCE TECHNOLOGY LIMITED provided to FORTUNE TOWER HOLDING CO., LTD. was computed as $ 4,012,021 thousand multiplied by 200% equal to $ 8,024,042 thousand.

Note 4: Maximum limit on financing from GLOBAL ADVANCE TECHNOLOGY LIMITED provided to GLOBAL PMX CO., LTD. (Zhejiang) was computed as $ 4,012,021 thousand multiplied by 200% equal to $ 8,024,042 thousand.

• 56 -

TABLE 2

GLOBAL PMX CO., LTD.

ENDORSEMENTS/GUARANTEES PROVIDED FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

No.	Endorser/Guarantor	Endorsee/Guarantee	Endorsee/Guarantee	Limit on Endorsement/ Guarantee Given on Behalf of Each Party	Maximum Amount Endorsed/ Guaranteed During the Period	Outstanding Endorsement/ Guarantee at the End of the Period	Actual Amount Borrowed	Amount Endorsed/ Guaranteed by Collateral	Ratio of Accumulated Endorsement/ Guarantee to Net Equity in Latest Financial Statements (%)	Aggregate Endorsement/ Guarantee Limit	Endorsement/ Guarantee Given by Parent on Behalf of Subsidiaries	Endorsement/ Guarantee Given by Subsidiaries on Behalf of Parent	Endorsement/ Guarantee Given on Behalf of Companies in Mainland China	Note
		Name	Relationship
0 0 0	Global PMX Co., Ltd. Global PMX Co., Ltd. Global PMX Co., Ltd.	FORTUNE TOWER HOLDING CO., LTD SEAMAX MANUFACTURING PTE. LIMITED GLOBAL ADVANCE TECHNOLOGY LIMITED	Subsidiary A subsidiary directly holding over 50% of the common shares A subsidiary directly holding over 50% of the common shares	$ 9,727,907 9,727,907 9,727,907	$ 30,250 265,410 3,776,303	$ 28,480 256,320 3,739,920	$ 28,480 8,544 1,270,931	$ - - -	0.47 4.22 61.51	$ 12,159,884 12,159,884 12,159,884	Y Y Y	N N N	N N N	Note 1 Note 1 Note 1

Note 1: According to the Company’s operational procedures for endorsement/guarantee provided to others, the calculation for endorsement/guarantee limits is as below:

• 1) The Company’s aggregate amount of endorsement/ guarantee provided to others shall not exceed 200% of net worth of the Company for the period. Accumulated amount of endorsement/guarantee provided to a single entity shall not exceed 160% of net worth of the Company. If an endorsement/guarantee provided to a single entity is made due to needs arising from business transactions, in addition to aforementioned requirements, amount of endorsement/guarantee provided shall not exceed total transaction amount with the Company for latest fiscal year (the higher of purchases or sales between two parties).

• 2) Pursuant to requirements mentioned above, ceilings on endorsement/guarantee provided to others equals to net worth of the Company computed as $6,079,942 thousand multiplied by 200% equals $12,159,884 thousand, and ceilings on endorsement/guarantee provided to a single entity are equivalent to net worth of the Company computed as $6,079,942 thousand multiplied by 160% equals to $9,727,907 thousand

• 57 -

TABLE 3

GLOBAL PMX CO., LTD.

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars)

Buyer	Related Party	Relationship		Transaction Details	Transaction Details		Abnormal Transaction	Abnormal Transaction	Notes/Accounts Receivable (Payable)	Notes/Accounts Receivable (Payable)	Note
			Purchase/ Sale	Amount	% of Total	Payment Terms	Unit Price	Payment Terms	Ending Balance	% of Total
SIXXON PRECISION MACHINERY CO., LTD.(Yangmei) SEAMAX INTERNATIONAL LTD. ACE PLUS TECHNOLOGY LIMITED SEAMAX MANUFACTURING PTE., LTD. (Dongguan) SEAMAX MANUFACTURING PTE., LTD. (Dongguan) GLOBAL PMX CO., LTD. (Zhejiang)	Global PMX Co., Ltd. Global PMX Co., Ltd. Global PMX Co., Ltd. SEAMAX INTERNATIONAL LTD. ACE PLUS TECHNOLOGY LIMITED SEAMAX INTERNATIONAL LTD.	Parent and subsidiary Parent and subsidiary Parent and subsidiary The same ultimate parent company The same ultimate parent company The same ultimate parent company	Sale Sale Sale Sale Sale Sale	$ 243,107 995,445 634,431 253,756 636,222 743,748	9.27% 96.00% 100.00% 23.13% 57.97% 25.43%	90 days after 90 days after 90 days after 90 days after 90 days after 90 days after	- - - - - -	- - - - - -	Accounts receivable $89,308 Accounts receivable $251,164 Accounts receivable $178,881 Accounts receivable $94,461 Accounts receivable $178,881 Accounts receivable $188,228	11.90% 100.00% 100.00% 25.81% 48.88% 15.04%

• 58 -

TABLE 4

GLOBAL PMX CO., LTD.

RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars)

Company Name	Related Party	Relationship	Ending Balance	Turnover Rate		Overdue	Amount Received in Subsequent Period	Allowance for Impairment Loss
					Amount	Actions Taken
SEAMAX INTERNATIONAL LTD ACE PLUS TECHNOLOGY LIMITED GLOBAL PMX CO., LTD. (Zhejiang) SEAMAX MANUFACTURING PTE., LTD. (Dongguan) FORTUNE TOWER HOLDING CO., LTD GLOBAL ADVANCE TECHNOLOGY LIMITED	Global PMX Co., Ltd. Global PMX Co., Ltd. SEAMAX INTERNATIONAL LTD ACE PLUS TECHNOLOGY LIMITED GLOBAL ADVANCE TECHNOLOGY LIMITED GLOBAL PMX CO., LTD. (Zhejiang)	Parent and subsidiary Parent and subsidiary The same ultimate parent company The same ultimate parent company Parent and subsidiary Parent and subsidiary	$ 251,164 178,881 188,228 178,881 267,712 1,479,738	4.29 times/year 2.90 times/year 5.83 times/year 2.91 times/year Note 1 Note 1	$ - - - - - -	- - - - - -	$ 251,164 178,881 110,820 107,932 - -	$ - - - - - -

Note 1: The calculation of turnover ratio excludes other receivables.

• 59 -

TABLE 5

GLOBAL PMX CO., LTD.

INFORMATION ON INVESTEES FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount	Original Investment Amount	As of December 31,2020	As of December 31,2020	As of December 31,2020	Net Income (Loss) of the Investee	Share of Profit (Loss)	Note
				December 31,2020	December 31,2019	Number of Shares	%	Carrying Amount
Global PMX Co., Ltd. Global PMX Co., Ltd. Global PMX Co., Ltd. Global PMX Co., Ltd. FORTUNE TOWER HOLDING CO., LTD FORTUNE TOWER HOLDING CO., LTD	FORTUNE TOWER HOLDING CO., LTD SEAMAX INTERNATIONAL LTD ACE PLUS TECHNOLOGY LIMITED SIXXON PRECISION MACHINERY CO., LTD.(Yangmei) SEAMAX MANUFACTURING PTE. LIMITED GLOBAL ADVANCE TECHNOLOGY LIMITED	TMF Chambers,P.O. Box 3269, Apia, Samoa Offshore Chambers ,P.O.Box 217,Apia, Samoa Offshore Chambers ,P.O.Box 217,Apia, Samoa Taiwan 1004AXA Centre, 151 Gloucester Road, Wan Chai, Hong Kong Offshore Chambers ,P.O.Box 217,Apia, Samoa	General investment Import and export of goods Import and export of goods Manufacturing of automotive and its parts General investment General investment	$ 3,433,417 28,995 1,564 1,464,636 363,000 2,678,934	$ 2,990,017 28,995 1,564 - 363,000 2,235,534	115,750 1,000 50 30,000 12,200 87,750	100.00 100.00 100.00 100.00 100.00 100.00	$ 4,922,609 30,417 1,249 1,425,904 675,803 4,012,021	$ 243,982 1,436 (41) 318,001 38,193 218,124	$ 245,522 1,436 (41) 318,001 38,193 218,124	Note 1

Note 1: The Company exchanges its shares to get control of a subsidiary. Please refer to Note 12 for related information of reorganization.

Note 2: The share of profits/losses of investee includes the effect of unrealized gross profits/losses on intercompany transactions.

• 60 -

TABLE 6

GLOBAL PMX CO., LTD.

INFORMATION ON INVESTMENTS IN MAINLAND CHINA FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

1. The investee company in Mainland China, main business and products, total amount of paid-in capital, method of investment, accumulated outflow and inflow of investment from Taiwan, percentage of ownership, share of profits/losses, accumulated inward remittance of earnings.

Investee Company	Main Businesses and Products	Paid-in Capital	Method of Investment (Note 1)	Accumulated Outward Remittance for Investment from Taiwan as of December 31, 2019	Remittance of Funds	Remittance of Funds	Accumulated Outward Remittance for Investment from Taiwan as of December 31, 2020	Net Income (Loss) of the Investee	% Ownership of Direct or Indirect Investment	Investment Gain (Loss) (Note 2)	Carrying Amount as of December 31, 2020	Accumulated Repatriation of Investment Income as of December 31, 2020	Note
					Outward	Inward
SEAMAX MANUFACTURING PTE., LTD. (Dongguan) GLOBAL PMX CO., LTD. (Zhejiang) GLOBAL PMX CO., LTD. (Jiaxing)	Production and sales of computer hard disk components, industrial control components, precision die, mold standard parts, high-grade hardware, high-end construction hardware, plumbing equipment and hardware, new electronic components, automotive key components, anti-lock braking system. Development, research, production and sales of various types of large-capacity optical, disk drives and components, semiconductor components, new electronic components, digital cameras, precision online measuring instruments, precision die, mold standard parts and medical precision parts, automotive precision parts. Development, research, production and sales of automotive parts, general parts, first-class medical equipment, computer hardware and software, electronic components technology research and development.	$ 359,046 1,459,120 1,044,100	2 2 2	$ 363,000 1,055,339 600,700	$ - - 443,400	$ - - -	$ 363,000 1,055,339 1,044,100	$ 72,917 218,957 (24,060)	100.00 100.00 100.00	$ 72,917 218,957 (24,060)	$ 939,409 3,056,650 1,066,515	$ - - -

• 61 -

Note 1: Methods of investment are classified into following three categories:

1) Direct investment in Mainland China

  - 2) The Company invested in a company located in Mainland China indirectly through an existing company in the third country. 3) Others

• Note 2: Investment income or loss mentioned above is recognized based on the financial statements of the parent company in Taiwan which were reviewed by its independent accountants for the correspounding periods.

• Limit on investment in Mainland China:

Company Name	Accumulated Outward Remittance for Investments in Mainland China as of December 31,2020	Investment Amount Authorized by the Investment Commission, MOEA	Upper Limit on the Amount of Investments Stipulated by the Investment Commission, MOEA
GLOBAL PMX CO., LTD. （Note）	$ 2,826,542	$ 3,469,930	$ -

Note: According to “Regulations screening of application to engage in technical cooperation in Mainland China”, the Company obtained the approval from the Industrial Development Bureau of Ministry of Economic Affairs issued to Headquarters on September 25, 2020, and effective on September 21, 2020, so the amount the Company invested in Mainland China is not subject to the upper limit on the amount investment stipulated by investment commission, MOEA.

1. Investee companies in Mainland China endorsed/guaranteed or provided collaterals by entities located in third area: None.

2. Financing provided to or from investee companies in Mainland China directly and indirectly through third area: Please refer to Table 1 for more information.

3. Other transactions incurred significant impacts on profit or loss for the period or financial position for the period: None.

4. 62 -

TABLE 7

GLOBAL PMX CO., LTD.

INFORMATION OF MAJOR SHAREHOLDERS DECEMBER 31, 2020

Name of Major Shareholder	Shares	Shares
	Number of Shares	Percentage of Ownership (%)
Sixxon Precision Machinery Co., Ltd. (Cayman Islands) Sixxon Tech Co., Ltd. Cathay Life Insurance Co., Ltd.	24,000,000 12,256,900 6,914,000	21.40% 10.93% 6.16%

Note: The information of major shareholders presented in this table is provided by the Taiwan Depository & Clearing Corporation based on the number of ordinary shares and preferred shares held by shareholders with ownership of 5% or greater, that have been issued without physical registration (including treasury shares) by the Company as of the last business day for the current quarter. The share capital in the financial statements may differ from the actual number of shares that have been issued without physical registration because of different preparation basis.

• 63 -

GLOBAL PMX CO., LTD.

THE CONTENTS OF STATEMENTS OF MAJOR ACCOUNTING ITEMS

Item Major Accounting Items in Assets, Liabilities and Equity Statement of cash and cash equivalents Statement of financial assets at fair value through profit or loss - current Statement of financial assets at amortized cost - current Statement of accounts receivable Statement of other receivables Statement of inventories Statement of changes in investments accounted for using the equity method Statement of changes in property, plant and equipment Statement of changes in intangible assets Statement of prepayments Statement of other current assets Statement of deferred income tax assets Statement of short-term borrowings Statement of accounts payable Statement of other payables Statement of other current liabilities Statement of bonds payables Statement of deferred tax liabilities Major Accounting Items in Profit or Loss Statement of operating revenues Statement of operating costs Statement of operating expenses Statement of non-operating income and expenses Statement of finance costs Statement of employee benefits, depreciation and amortization expenses by function

**Statement Index **

1 Note 7 Note 8 2 Note 10 3 4 Note 13 Note 15 Note 16 Note 16 Note 25 5 6 Note 20 Note 20 Note 18 Note 25 7 8 9 Note 24 Note 24 10

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STATEMENT 1

GLOBAL PMX CO., LTD.

STATEMENT OF CASH AND CASH EQUIVALENTS DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

Item Description Petty cash Cash in banks Checking and demand accounts Foreign currency deposits Including USD 9,329 thousand @ 28.48, HKD 66 thousand @ 3.67, EUR 1,628 thousand @ 35.02, JPY 3,310 thousand @ 0.276, RMB 5,176 thousand @ 4,377 and SGD 20 thousand @ 21.56 Deposit accounts	Amount $ 391 50,776 346,963 393,594 $ 791,724

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STATEMENT 2

GLOBAL PMX CO., LTD.

STATEMENT OF ACCOUNTS RECEIVABLE DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

Client Name Description Non-related parties SGTTH Payments CVDUS ″ SGT510 ″ VTDE1 ″ USCPR ″ VTCZ ″ BGUS1 ″ Others (Note) ″ Related parties SIWS Payments Total Less: Allowance for doubtful accounts	Amount $ 188,742 60,887 58,447 59,579 43,255 42,509 41,865 243,031 103 738,418 (19,624) $ 718,794

Note: The amount of individual client included in others does not exceed 5% of the account balance.

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STATEMENT 3

GLOBAL PMX CO., LTD.

STATEMENT OF INVENTORIES DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

Item Finished goods	Cost $ 133,280	Market Value $ 172,224

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STATEMENT 4

GLOBAL PMX CO., LTD.

STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD FOR THE YEAR ENDED DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars)

Name of Investees Fortune Tower Holding Co., Ltd Seamax International Ltd. Ace Plus Technology Limited Sixxon Precision Machinery Co., Ltd.(Yangmei)	Balance, January 1, 2020 Shares Amount 100,750 $ 4,145,933 1,000 30,562 50 1,356 30,000 1,365,180 $ 5,543,031	Additions Shares Amount 15,000 $ 443,400 - - - - - - $ 443,400	Deductions Shares Amount - $ - - - - - - - $ -	Investment Income in Using the Equity Method $ 243,982 1,436 (41) 318,001 $ 563,378	Accumulated Translation Adjustment $ 87,754 (1,581) (66) - $ 86,107	Side Stream Offset $ 1,540 - - - $ 1,540	Cash Dividends $ - - - (257,277) $ (257,277)	Balance, DECEMBER31, 2020 Percentage Shares of Shares Amount 115,750 100 $ 4,922,609 1,000 100 30,417 50 100 1,249 30,000 100 1,425,904 $ 6,380,179	Market Price or Net Assets Value Unite Price Total (NT$) Amount Collateral Note 42.56 $ 4,926,756 None 30.42 30,417 None 24.98 1,249 None 47.53 1,425,904 None $ 6,384,326
								Percentage Shares of Shares 115,750 100 1,000 100 50 100 30,000 100	Unite Price (NT$) 42.56 30.42 24.98 47.53
	Shares 100,750 1,000 50 30,000	Shares 15,000 - - -	Shares - - - -

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STATEMENT 5

GLOBAL PMX CO., LTD.

STATEMENT OF SHORT-TERM BORROWINGS DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

Description Creditors Contract Period Interest Rates (%) Credit loan Bank SinoPac 2020.12.28 - 2021.01.04 1.08 Citi Bank 2020.10.06 - 2021.01.04 0.90 Fubon Bank 2020.10.26 - 2021.04.26 0.85	Amount Loan Commitments (Note) Collateral $ 160,000 $ 400,002 None 128,000 142,400 ″ 280,000 341,760 ″ $ 568,000 $ 884,162

Note: As of the end of 2020, the loan commitment of short-term borrowings that the Company has not used were $1,654,318 thousand.

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STATEMENT 6

GLOBAL PMX CO., LTD.

STATEMENT OF ACCOUNTS PAYABLE DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

Client Name Description Non-related parties SSJP Payments TSDCH ″ DEGDE ″ Others (Note) ″ Related parties SIWS Payments APWS ″ SIXXON (Yangmei) ″ Others (Note) ″	Amount $ 10,913 5,526 2,120 381 $ 18,940 $ 251,164 178,881 89,154 63 $ 519,262

Note: The amount of individual clients included in others does not exceed 5% of the account balance.

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STATEMENT 7

GLOBAL PMX CO., LTD.

STATEMENT OF OPERATING REVENUES FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

Item Description Total operating revenue Automotive, electronics and medical equipment Less：operating returns and allowances Net operating revenue	Amount $2,444,715 (41,291) $2,403,424

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STATEMENT 8

GLOBAL PMX CO., LTD.

STATEMENT OF OPERATING COSTS FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

Item Finished goods Finished goods, beginning of year Add: Finished goods purchased Less: Transferred to expenses Less: Finished goods, end of year Cost of goods sold	Amount $ 89,039 1,871,708 (1,162) (133,280) $ 1,826,305

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STATEMENT 9

GLOBAL PMX CO., LTD.

STATEMENT OF OPERATING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

Item Selling and Marketing Expenses General and Administrative Expenses Research and Development Expenses Payroll expense $ 16,216 $ 64,975 $ 21,621 Insurance expense 12 5,304 - Commision expense 13,906 - - Service expense - 8,395 - Development expense - - 1,958 Import and export expense 9,394 27 - Others (Note) 20,343 16,507 331 $ 59,871 $ 95,208 $ 23,910	Total $ 102,812 5,316 13,906 8,395 1,958 9,421 37,181 $ 178,989

Note: The amount of each item included in others does not exceed 5% of the account balance.

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STATEMENT 10

GLOBAL PMX CO., LTD.

STATEMENT OF EMPLOYEE BENEFITS, DEPRECIATION AND AMORTIZATION EXPENSES BY FUNCTION FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

Labor cost (Note) Salary Labor and health insurance Pension Board compensation Other employee benefits Depreciation expense Amortization expense	2020	Total $ 87,907 4,897 2,546 12,359 3,696 $ 111,405 $ 244 $ 1,800	2019
	Classified as Operating Costs Classified as Operating Expenses $ - $ 87,907 - 4,897 - 2,546 - 12,359 - 3,696 $ - $ 111,405 $ - $ 244 $ - $ 1,800		Classified as Operating Costs Classified as Operating Expenses $ - $ 81,600 - 5,135 - 2,548 - 11,981 - 4,768 $ - $ 106,032 $ - $ 233 $ - $ 38	Total $ 81,600 5,135 2,548 11,981 4,768 $ 106,032 $ 233 $ 38

1. On December 31, 2020 and 2019, the number of employees of the Company was 62 and 70, respectively, with 7 and 8 non-employee directors.

2. Companies with shares issued in Taiwan Stock Exchange Corporation or Taipei Exchange should disclose the following information.

3. a. Average labor cost for the years ended December 31, 2020 and 2019 were $1,801 thousand and $1,517 thousand, respectively.

4. b. Average salary for the years ended December 31, 2020 and 2019 were $1,598 thousand and $1,316 thousand, respectively.

5. c. Average salary adjustment increased by 21.43% compared to last year.

6. d. There is no supervisors in the Company.

7. e. The salary and compensation policy of the Company for directors, independent directors, managers and employees: The compensation of directors and independent directors is according to the Company’s Articles; the salary of managers and employees includes salary, bonus and employee compensaton, which is determined by their position, responsibility and contribution to the Company and is refered to the level of compnaies in the same industry.

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