HannsTouch — Audit Report / Information 2020

Nov 5, 2020

HANNSTOUCH SOLUTION

INCORPORATED

PARENT COMPANY ONLY FINANCIAL

STATEMENTS AND INDEPENDENT AUDITORS’

REPORT

DECEMBER 31, 2020 AND 2019

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

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INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

To the Board of Directors and Shareholders of HannsTouch Solution Incorporated

Opinion

We have audited the accompanying parent company only balance sheets of HannsTouch Solution Incorporated as at December 31, 2020 and 2019, and the related parent company only statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the parent company only financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the financial position of HannsTouch Solution Incorporated as at 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 generally accepted auditing standards in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ responsibilities for the audit of the parent company only financial statements section of our report. We are independent of the Company in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

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

Key audit matters for HannsTouch Solution Incorporated’s 2020 parent company only financial statements are stated as follows:

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Key Audit Matter – Recognition of overseas warehouse operating revenue

Description

Refer to Note 4(33) for a description of accounting policy on revenue recognition in the financial statements.

The Company stores inventories in the warehouses under the custody of foreign third parties. Such inventories are checked and accepted by the custodians in order to meet the requirements of overseas sales customers. The custodians regularly send inventory reports to the Company to verify the quantity, and the Company recognises operating revenue based on actual used inventories at the customer side which are shown in the inventory report provided by the custodians.

As the process of revenue recognition of the Company’s foreign warehouse involves numerous manual procedures, we identified the recognition of overseas warehouse operating revenue as a key audit matter.

How our audit addressed the matter:

We performed the following audit procedures on the above key audit matter:

1. Obtained an understanding and evaluated the Company’s procedures on overseas warehouse operating revenue, and selected samples to check the accuracy of operating revenue recognition.

2. Performed cutoff procedures on sales revenue from distribution warehouse recognised during a specific period before and after the period-end, including verifying delivery schedule of distribution warehouse and ensuring the movements of inventories contained in the statements and cost of goods sold had been recognised in the appropriate period; and

3. Performed confirmation for significant warehouses.

Key audit matter- Impairment assessment on investment property

Description

Refer to Notes 4(20), 5(2) and 6(11) for accounting policy applied on impairment of property, plant and equipment, accounting estimates and assumptions applied on the impairment assessment of tangible assets and details of impairment.

The Company has appointed appraisers to appraise the investment property in Taipei and to value the recoverable amount as the basis for assessing the impairment of investment property.

The recoverable amount is calculated through income approach and comparison method. The determination of the recoverable amount is subject to management judgement and uncertainty, which

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could have a significant impact in assessing whether there is any impairment loss on property, plant and equipment. Thus, we considered the impairment assessment of property, plant and equipment as a key audit matter.

How our audit addressed the matter:

We understood the basis and process of management’s assessment and performed the following audit procedures in respect of the above key audit matter:

1. Assessed the expected future income used in the experts’ appraisal report and compared with local market price and forecast documents for the industry.

2. Assessed the discount rate used in the experts’ appraisal report and inspected the assumptions of cost of capital with return on similar assets in the market.

3. Examined the parameters of valuation model in the experts’ appraisal report and setting of formulas.

Responsibilities of management and those charged with governance for the parent company only financial statements

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

In preparing the parent company only financial statements, management is responsible for assessing HannsTouch Solution Incorporated’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 HannsTouch Solution Incorporated or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including the audit committee, are responsible for overseeing HannsTouch Solution Incorporated’s financial reporting process.

Auditors’ responsibilities for the audit of the parent company only financial statements

Our objectives are to obtain reasonable assurance about whether the parent company only financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the generally accepted auditing standards 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

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be expected to influence the economic decisions of users taken on the basis of these parent company only financial statements.

As part of an audit in accordance with the generally accepted auditing standards 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 parent company only financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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 HannsTouch Solution Incorporated’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 HannsTouch Solution Incorporated’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the parent company only financial statements 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 parent company only financial statements, including the disclosures, and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the parent company only financial statements of the current period 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.

[Signature] [Signature] Chen, Ching Chang Lin, Chun-Yao

For and on behalf of PricewaterhouseCoopers, Taiwan March 19, 2021

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

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

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HANNSTOUCH SOLUTION INCORPORATED PARENT COMPANY ONLY BALANCE SHEETS

DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

Assets	Notes 6(1) 6(2) 6(4) 6(5) 7 7 6(6) 6(12) 6(7) and 8 6(3) 6(8) 6(9), 7 and 8 6(10) 6(11) and 8 6(26) 6(16)	December 31, 2020 $ 1,618,587 46,481 600,000 245,518 73,620 21,652 485 198,100 2,575,574 59,390 38,557 5,477,964 193,411 349,134 4,615,811 335,723 5,810,132 17,128 324,327 598 11,646,264 $ 17,124,228	December 31, 2019
Current assets 1100 Cash and cash equivalents 1110 Financial assets at fair value through profit or loss - current 1136 Current financial assets at amortised cost 1170 Accounts receivable, net 1180 Accounts receivable due from related parties, net 1200 Other receivables 1210 Other receivables - related parties 130X Inventory 1460 Non-current assets or disposal groups classified as held for sale, net 1476 Other current financial assets 1479 Other current assets 11XX Total current assets Non-current assets 1517 Non-current financial assets at fair value through other comprehensive income 1550 Investments accounted for under equity method 1600 Property, plant and equipment 1755 Right-of-use assets 1760 Investment property - net 1780 Intangible assets 1840 Deferred income tax assets 1900 Other non-current assets 15XX Total non-current assets 1XXX Total assets			$ 320,390 48,156 789 381,677 29,697 1,628 100 176,155 - 81,751 35,452
			1,075,795
			- 347,193 7,986,314 354,506 5,729,096 22,985 421,977 62,327
			14,924,398
			$ 16,000,193

(Continued)

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HANNSTOUCH SOLUTION INCORPORATED PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity	Notes December 31, 2020 6(2) $ 1 217 134,500 7 2,486 6(13) 342,864 7 2,615 25,895 6(10) 30,794 6(15) 233,333 7 1,123,886 1,896,591 6(14) and 7 900,000 6(15) and 8 4,526,667 6(26) 779 6(10) 311,971 47,126 5,786,543 7,683,134 6(18) 8,069,485 6(19) 312,925 6(20) 109,361 14,100 941,680 ( 6,457) 9,441,094 9 11 $ 17,124,228	December 31, 2019
Current liabilities 2120 Financial liabilities at fair value through profit or loss - current 2150 Notes payable 2170 Accounts payable 2180 Accounts payable - related parties 2200 Other payables 2220 Other payables - related parties 2230 Current income tax liabilities 2280 Current lease liabilities 2320 Long-term liabilities, current portion 2399 Other current liabilities 21XX Total current liabilities Non-current liabilities 2530 Corporate bonds payable 2540 Long-term borrowings 2570 Deferred income tax liabilities 2580 Non-current lease liabilities 2670 Other non-current liabilities 25XX Total non-current liabilities 2XXX Total liabilities Equity Share capital 3110 Common stock Capital surplus 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings 3400 Other equity interest 3XXX Total equity Significant contingent liabilities and unrecognised contract commitments Significant events after the balance sheet date 3X2X Total liabilities and equity		$ - 1,341 161,727 18 389,981 3,700 - 29,028 600,000 10,939
		1,196,734
		900,000 4,160,000 17,908 329,244 16,328
		5,423,480
		6,620,214
		8,069,485 312,925 12,398 14,100 971,071 -
		9,379,979
		$ 16,000,193

The accompanying notes are an integral part of these parent company only financial statements.

3X2X Total liabilities and equity

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HANNSTOUCH SOLUTION INCORPORATED

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2020 AND 2019

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

Items

YearendedDecember31 Notes 2020 2019 6(21) and 7 $ 2,929,250 $ 4,248,959 6(6)(25) and 7 ( 2,294,305) ( 2,681,508) 634,945 1,567,451 6(25) and 7 ( 27,264) ( 52,691) ( 144,547) ( 160,164) ( 40,678) ( 43,498) 12(2) 48 ( 136) ( 212,441) ( 256,489) 422,504 1,310,962 6(22) 2,630 492 6(23) 139,272 37,795 6(24) and 7 ( 18,002) 25,121 7 ( 93,575) ( 139,071) 6(8) 5,205 ( 17,926) 35,530 ( 93,589) 458,034 1,217,373 6(26) ( 108,030) ( 199,316) $ 350,004 $ 1,018,057 6(16) $ - $ 1,803 6(3) ( 8,071) - 6(26) 1,614 ( 361) ($ 6,457) $ 1,442 $ 343,547 $ 1,019,499 6(27) $ 0.43 $ 1.35 $ 0.43 $ 1.35

4000 Sales revenue 5000 Operating costs 5950 Net operating margin Operating expenses 6100 Selling expenses 6200 General and administrative expenses 6300 Research and development expenses 6450 Reversal of impairment loss (impairment loss) determined in accordance with IFRS 9 6000 Total operating expenses 6900 Operating profit Non-operating income and expenses 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Finance costs 7070 Share of profit (loss) of associates and joint ventures accounted for using equity method, net 7000 Total non-operating income and expenses 7900 Profit before income tax 7950 Income tax expense 8200 Profit for the year Other comprehensive income Components of other comprehensive income that will not be reclassified to profit or loss 8311 Actuarial gains on defined benefit plans 8316 Unrealised losses from investments in equity instruments measured at fair value through other comprehensive income 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss 8300 Other comprehensive (loss) income for the year 8500 Total comprehensive income for the year Earnings per share (in dollars) 9750 Basic earnings per share 9850 Diluted earnings per share

The accompanying notes are an integral part of these parent company only financial statements.

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HANNSTOUCH SOLUTION INCORPORATED

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

Year ended December 31, 2019 Balance at January 1, 2019 Profit for the year Other comprehensive income Total comprehensive income Proceeds from issuance of shares Balance at December 31, 2019 Year ended December 31, 2020 Balance at January 1, 2020 Profit for the year Other comprehensive loss Total comprehensive income Appropriations of 2019 earnings: Legal reserve Cash dividends Balance at December 31, 2020	Notes		Share capital - commonstock			Capital Reserves	Capital Reserves				RetainedEarnings	RetainedEarnings	RetainedEarnings	RetainedEarnings	Unrealised gains (losses) from financial assets measured at fair value through other comprehensive income		Totalequity
				Total capital surplus, additional paid- incapital		Difference between the price for acquisition or disposal of subsidiaries and carrying amount		Capital surplus, others			Legal reserve		Special reserve	Unappropriated retained earnings
	6(18) 6(20)		$ 7,369,485 - - - 700,000 $ 8,069,485 $ 8,069,485 - - - - - $ 8,069,485		$ 61,616 - - - 247,419 $ 309,035 $ 309,035 - - - - - $ 309,035		$ 919 - - - - $ 919 $ 919 - - - - - $ 919		$ - - - - 2,971 $ 2,971 $ 2,971 - - - - - $ 2,971		$ 12,398 - - - - $ 12,398 $ 12,398 - - - 96,963 - $ 109,361		$ 14,100 - - - - $ 14,100 $ 14,100 - - - - - $ 14,100	($ 48,428 ) 1,018,057 1,442 1,019,499 - $ 971,071 $ 971,071 350,004 - 350,004 ( 96,963 ) ( 282,432 ) $ 941,680	$ - - - - - $ - $ - - ( 6,457 ) ( 6,457 ) - - ($ 6,457 )	$ 7,410,090 1,018,057 1,442 1,019,499 950,390 $ 9,379,979 $ 9,379,979 350,004 ( 6,457 ) 343,547 - ( 282,432 ) $ 9,441,094

The accompanying notes are an integral part of these parent company only financial statements.

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HANNSTOUCH SOLUTION INCORPORATED

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax Adjustments Adjustments to reconcile profit (loss) Depreciation Expected credit (gain) loss on doubtful accounts Amortisation Interest expense Interest income Dividend income Share-based payment Gain on financial assets at fair value through profit or loss Share of profit or loss of associates and joint ventures accounted for under equity method Loss (gain) on disposals of property, plant and equipment Reversal of impairment loss recognised in profit or loss, non-financial assets Other income-gain on pension settlement Other income-gain on litigation settlement Changes in operating assets and liabilities Changes in operating assets Financial assets at fair value through profit or loss Accounts receivable Accounts receivable - related parties Other receivables Other receivables - related parties Inventory Prepaid pension Other current assets Changes in operating liabilities Notes payable Accounts payable Accounts payable - related parties Other payables Other payables - related parties Other current liabilities Other non-current liabilities Cash inflow generated from operations Interest received Cash dividends received Interest paid Income taxes paid Net cash flows from operating activities

Year ended December 31 Notes 2020 2019 $ 458,034 $ 1,217,373 6(25) 931,517 957,066 12(2) ( 48 ) 136 6(25) 6,735 6,692 93,575 139,072 6(22) ( 2,630 ) ( 492 ) 6(23) - ( 4,430 ) 6(17) - 5,390 6(2)(24) ( 2,996 ) ( 38,585 ) 6(8) ( 5,205 ) 17,926 6(24) 10,614 ( 13,362 ) 6(24) ( 28,698 ) - 6(23) ( 2,339 ) - 6(23) ( 39,600 ) - 4,672 86,627 136,207 ( 149,525 ) ( 43,923 ) ( 29,697 ) ( 19,756 ) 37,996 ( 385 ) - ( 21,945 ) ( 53,478 ) - ( 813 ) ( 3,105 ) 3,737 ( 1,124 ) 279 ( 27,227 ) 78,671 2,468 ( 55 ) 8,606 56,561 125 ( 1,984 ) 4,944 4,529 30,798 16,328 1,489,314 2,335,962 2,362 496 - 4,430 ( 87,025 ) ( 132,352 ) - ( 809 ) 1,404,651 2,207,727

(Continued)

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HANNSTOUCH SOLUTION INCORPORATED

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM INVESTING ACTIVITIES Increase in current financial assets at amortised cost Acquisition of investments accounted for under equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of investment property Decrease (increase) in other non-current assets Decrease (increase) in other current financial assets Financial assets at fair value through other comprehensive income Dividends received Advance receipts for the sale of property, plant and equipment Net cash flows from (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Repayment of short-term debt Repayment of corporate bonds payable Proceeds from long-term debt Repayment of long-term debt Repayment of lease liabilities Seasoned equity offering Exercise of employee stock options Cash dividends paid Net cash flows used in financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

Year ended December 31 Notes 2020 2019 ($ 599,211 ) ($ 789 ) 6(8) - ( 149,900 ) 6(28) ( 73,470 ) ( 124,216 ) 524 13,362 6(28) ( 110,107 ) ( 152,313 ) 64,067 ( 41 ) 22,361 ( 30,927 ) ( 201,482 ) - 6(8) 3,264 - 7 1,108,000 - 213,946 ( 444,824 ) - ( 520,000 ) ( 600,000 ) ( 300,000 ) 600,000 - - ( 1,788,458 ) ( 37,968 ) ( 36,319 ) - 902,583 - 42,417 6(20) ( 282,432 ) - ( 320,400 ) ( 1,699,777 ) 1,298,197 63,126 6(1) 320,390 257,264 6(1) $ 1,618,587 $ 320,390

The accompanying notes are an integral part of these parent company only financial statements.

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HANNSTOUCH SOLUTION INCORPORATED

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2020 AND 2019

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

1. History and Organisation

HannsTouch Solution Incorporated (the “Company”) was incorporated in September 1999 as a company limited by shares under the provisions of the Company Act of the Republic of China (R.O.C.). The Company is primarily engaged in the manufacture and sale of touch products and lease of property. The common shares of the Company have been listed on the Taiwan Stock Exchange since September 27, 2002.

2. The Date of Authorisation for Issuance of the Financial Statements and Procedures for Authorisation

These financial statements were authorised for issuance by the Board of Directors on March 19, 2021.

3. Application of New Standards, Amendments and Interpretations

(1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS”) as endorsed by the Financial Supervisory Commission (“FSC”)

New standards, interpretations and amendments endorsed by the FSC effective from 2020 are as follows:

New Standards,Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendments to IAS 1 and IAS 8, ‘Disclosure initiative-definition of material’ Amendments to IFRS 3, ‘Definition of a business’ Amendments to IFRS 9, IAS 39 and IFRS 7, ‘Interest rate benchmark reform’ Amendment to IFRS 16, ‘Covid-19-related rent concessions’	January 1, 2020 January 1, 2020 January 1, 2020 June 1, 2020 (Note)

Note: Earlier application from January 1, 2020 is allowed by the FSC.

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

(2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by the Company

New standards, interpretations and amendments endorsed by the FSC effective from 2021 are as follows:

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	Effective date by
	International Accounting
New Standards, Interpretations and Amendments	Standards Board
Amendments to IFRS 4, ‘Extension of the temporary exemption from	January 1, 2021
applying IFRS 9’
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16,	January 1, 2021
‘Interest Rate Benchmark Reform - Phase 2’

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

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

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

	Effective date by
	International Accounting
New Standards,Interpretations and Amendments	Standards Board
Amendments to IFRS 3, ‘Reference to the conceptual framework’	January 1, 2022
Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets	To be determined by
between an investor and its associate or joint venture’	International Accounting
	Standards Board
IFRS 17, ‘Insurance contracts’	January 1, 2023
Amendments to IFRS 17, ‘Insurance contracts’	January 1, 2023
Amendments to IAS 1, ‘Classification of liabilities as current or non-	January 1, 2023
current’
Amendments to IAS 1, ‘Disclosure of accounting policies’	January 1, 2023
Amendments to IAS 8, ‘Defintion of accounting estimates’	January 1, 2023
Amendments to IAS 16, ‘Property, plant and equipment: proceeds	January 1, 2022
before intended use’
Amendments to IAS 37, ‘Onerous contracts - cost of fulfilling a	January 1, 2022
contract’
Annual improvements to IFRSs 2018-2020 cycle	January 1, 2022

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

4. Summary of Significant Accounting Policies

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

(1) Compliance statement

The parent company only financial statements of the Company have been prepared in accordance

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with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

(2) Basis of preparation

• A. Except for the following items, the parent company only financial statements have been prepared under the historical cost convention:

• (a) Financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.

• (b) Financial assets at fair value through other comprehensive income.

• B. The preparation of financial statements in conformity with the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the “IFRSs”) requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the group classified’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial parent company only statements are disclosed in Note 5.

(3) Foreign currency translation

Items included in the financial statements of each of the Company’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The parent company only financial statements are presented in NTD, which is the Company’s functional and presentation currency.

Foreign currency transactions and balances

• A. Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognised in profit or loss in the period in which they arise.

• B. Monetary assets and liabilities denominated in foreign currencies at the period end are retranslated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognised in profit or loss.

• C. All other foreign exchange gains and losses based on the nature of those transactions are presented in the statement of comprehensive income within ‘other gains and losses’.

(4) Classification of current and non-current items

• A. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:

• (a) Assets arising from operating activities that are expected to be realised, or are intended to be

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sold or consumed within the normal operating cycle;

• (b) Assets held mainly for trading purposes;

• (c) Assets that are expected to be realised within twelve months from the balance sheet date;

• (d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to settle liabilities more than twelve months after the balance sheet date.

• B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:

• (a) Liabilities that are expected to be settled within the normal operating cycle;

• (b) Liabilities arising mainly from trading activities;

• (c) Liabilities that are to be settled within twelve months from the balance sheet date;

• (d) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

(5) Cash equivalents

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

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

• A. Financial assets at fair value through profit or loss are financial assets that are not measured at amortised cost or fair value through other comprehensive income.

• B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognised and derecognised using settlement date accounting.

• C. At initial recognition, the Company measures the financial assets at fair value and recognises the transaction costs in profit or loss. The Company subsequently measures the financial assets at fair value, and recognises the gain or loss in profit or loss.

• D. The Company recognises the dividend income when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Company and the amount of the dividend can be measured reliably.

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

• A. Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Company has made an irrevocable election at initial recognition to recognise changes in fair value in other comprehensive income:

• (a) The objective of the Company’s business model is achieved both by collecting contractual cash flows and selling financial assets; and

• (b) The assets’ contractual cash flows represent solely payments of principal and interest.

• B. On a regular way purchase or sale basis, financial assets at fair value through other comprehensive income are recognised and derecognised using settlement date accounting.

• C. At initial recognition, the Company measures the financial assets at fair value plus transaction costs. The Company subsequently measures the financial assets at fair value:

The changes in fair value of equity investments that were recognised in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the derecognition of the investment. Dividends are recognised as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Company and the amount of the dividend can be measured reliably.

(8) Financial assets at amortised cost

• A. Financial assets at amortised cost are those that meet all of the following criteria:

• (a) The objective of the Company’s business model is achieved by collecting contractual cash flows.

• (b) The assets’ contractual cash flows represent solely payments of principal and interest.

• B. On a regular way purchase or sale basis, financial assets at amortised cost are recognised and derecognised using settlement date accounting.

• C. At initial recognition, the Company measures the financial assets at fair value plus transaction costs. Interest income from these financial assets is included in finance income using the effective interest method. A gain or loss is recognised in profit or loss when the asset is derecognised or impaired.

• D. The Company’s time deposits which do not fall under cash equivalents are those with a short maturity period and are measured at initial investment amount as the effect of discounting is immaterial.

(9) Accounts receivable

• A. Accounts receivable entitle the Company a legal right to receive consideration in exchange for transferred goods or rendered services.

~17~

• B. The short-term accounts receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(10) Impairment of financial assets

For financial assets at amortised cost including accounts receivable, at each reporting date, the Company recognises the impairment provision for 12 months expected credit losses if there has not been a significant increase in credit risk since initial recognition or recognises the impairment provision for the lifetime expected credit losses (ECLs) if such credit risk has increased since initial recognition after taking into consideration all reasonable and verifiable information that includes forecasts. On the other hand, for accounts receivable that do not contain a significant financing component, the Company recognises the impairment provision for lifetime ECLs.

(11) Derecognition of financial assets

The Company derecognises a financial asset when one of the following conditions is met:

• A. The contractual rights to receive the cash flows from the financial asset expire.

• B. The contractual rights to receive cash flows of the financial asset have been transferred and the Company has transferred substantially all risks and rewards of ownership of the financial asset.

• C. The contractual rights to receive cash flows of the financial asset have been transferred; however, the Company has not retained control of the financial asset.

－ (12) Leasing arrangements (lessor) operating leases

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

(13) Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted-average method. The cost of finished goods and work in progress comprises raw materials, direct labour, other direct costs and related production overheads (allocated based on normal operating capacity). It excludes borrowing costs. The item by item approach is used in applying the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and applicable variable selling expenses.

(14) Non-current assets held for sale (or disposal groups)

Non-current assets (or disposal groups) are classified as assets held for sale when their carrying amount is to be recovered principally through a sale transaction rather than through continuing use, and a sale is considered highly probable. They are stated at the lower of carrying amount and fair value less costs to sell.

~18~

(15) Investments accounted for using equity method

• A. Subsidiaries are all entities (including structured entities) controlled by the Company. The Company controls an entity when the Company is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

• B. Unrealised gains on transactions between the Company and its subsidiaries are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Company.

• C. The Company’s share of its subsidiaries’ post-acquisition profits or losses is recognised in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income. When the Company’s share of losses in a subsidiary equals or exceeds its interest in the subsidiary, the Company recognise loss continuously in proportion to its ownership.

• D. Pursuant to the Regulations Governing the Preparation of Financial Reports by Securities Issuers, profit (loss) of the current period and other comprehensive income in the parent company only financial statements shall equal to the amount attributable to owners of the parent in the financial statements prepared with basis for consolidation. Owners’ equity in the parent company only financial statements shall equal to equity attributable to owners of the parent in the financial statements prepared with basis for consolidation.

(16) Property, plant and equipment

• A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalised.

• B. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.

• C. Property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.

• D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and

~19~

Errors’, from the date of the change. The estimated useful lives of property, plant and equipment are as follows:

Buildings and structures 3~35 years Machinery equipments 3~10 years Furniture and fixtures 2~5 years Other equipments 2~10 years

(17) Leasing arrangements (lessee) － right-of-use assets/lease liabilities

• A. Leases are recognised as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Company. For short-term leases or leases of low-value assets, lease payments are recognised as an expense on a straight-line basis over the lease term.

• B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. Lease payments are comprised of the following:

• (a) Fixed payments, less any lease incentives receivable;

• (b) Variable lease payments that depend on an index or a rate; and

• (c) Amounts expected to be payable by the lessee under residual value guarantees.

The Company subsequently measures the lease liability at amortised cost using the interest method and recognises interest expense over the lease term. The lease liability is remeasured and the amount of remeasurement is recognised as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.

• C. At the commencement date, the right-of-use asset is stated at cost comprising the following:

• (a) The amount of the initial measurement of lease liability;

• (b) Any lease payments made at or before the commencement date; and

• (c) Any initial direct costs incurred by the lessee.

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

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(18) Investment property

An investment property is stated initially at its cost and measured subsequently using the cost model. Except for land, investment property is depreciated on a straight-line basis over its estimated useful life of 25 years.

(19) Intangible assets

Computer software is stated at cost and amortised on a straight-line basis over its estimated useful life of 2 to 6 years.

(20) Impairment of non-financial assets

The Company assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. When the circumstances or reasons for recognizing impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortised historical cost would have been if the impairment had not been recognised.

(21) Borrowings

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

• B. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.

(22) Notes and accounts payable

• A. Accounts payable are liabilities for purchases of raw materials, goods or services and notes payable are those resulting from operating and non-operating activities.

• B. The short-term accounts and notes payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

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(23) Financial liabilities at fair value through profit or loss

• A. Financial liabilities are classified in this category of held for trading if acquired principally for the purpose of repurchasing in the short-term. Derivatives are also categorised as financial liabilities held for trading unless they are designated as hedges.

• B. At initial recognition, the Company measures the financial liabilities at fair value. All related transaction costs are recognised in profit or loss. The Company subsequently measures these financial liabilities at fair value with any gain or loss recognised in profit or loss.

• C. If the credit risk results in fair value changes in financial liabilities designated as at fair value through profit or loss, they are recognised in other comprehensive income in the circumstances other than avoiding accounting mismatch or recognising in profit or loss for loan commitments or financial guarantee contracts.

(24) Bonds payable

Ordinary corporate bonds issued by the Company are initially recognised at fair value less transaction costs. Any difference between the proceeds (net of transaction costs) and the redemption value is presented as an addition to or deduction from bonds payable, which is amortised to profit or loss over the period of bond circulation using the effective interest method as an adjustment to ‘finance costs’.

(25) Derecognition of financial liabilities

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

(26) Non-hedging derivatives

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

(27) Provisions

Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be reliably estimated. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation on the balance sheet date, as a deduction of sales revenue in the period when related products are sold.

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(28) Employee benefits

• A. Short-term employee benefits

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

• B. Pensions

• (a) Defined contribution plan

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

• (b) Defined benefit plan

  • i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services in current period or prior periods. The liability recognised in the balance sheet in respect of defined benefit pension plan is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of government bonds (at the balance sheet date).

  • ii. Remeasurements arising on defined benefit plan is recognised in other comprehensive income in the period in which they arise and are recorded as retained earnings.

  • iii. Past service costs are recognised immediately in profit or loss.

• C. Employees’ compensation and directors’ remuneration

Employees’ compensation and directors’ remuneration are recognised as expense and liability, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates.

- (29) Employee share based payment

For the cash-settled share-based payment arrangements, the employee services received and the liability incurred are measured at fair value, and recognised as compensation cost and liability over the vesting period. The fair value of the liability is remeasured at each balance sheet date and settlement date, with any change in fair value recognised in profit or loss.

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(30) Income taxes

• A. The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or items recognised directly in equity, in which cases the tax is recognised in other comprehensive income or equity.

• B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.

• C. Deferred tax is recognised, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the parent company only balance sheet. Deferred tax is determined using tax rates that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.

• D. Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. At each balance sheet date, unrecognised and recognised deferred tax assets are reassessed.

(31) Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or stock options are shown in equity as a deduction, net of tax, from the proceeds.

(32) Dividends

Dividends are recorded in the Company’s financial statements in the period in which they are approved by the Group’s shareholders. Cash dividends are recorded as liabilities.

(33) Revenue recognition

• A. Sales of goods

• (a) The Company manufactures and sells touch panel and related products. Sales are recognised when control of the products has transferred, being when the products are delivered to the buyer, the buyer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the buyer’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the buyer, and either the buyer has accepted the products in accordance with the sales contract, or the Company has objective evidence that all criteria for acceptance have been satisfied.

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• (b) Sales revenue of products was recognised based on the contract price net of sales returns and discount. The sales returns and discounts are estimated based on the anticipated annual sales quantities. Accumulated experience is used to estimate and provide for the sales returns and discounts, using the anticipated annual sales quantities, and revenue is only recognised to the extent that it is highly probable that a significant reversal will not occur. The estimation is subject to an assessment at each reporting date. A refund liability is recognised for expected sales returns and discounts payable to customers in relation to sales made until the end of the reporting period. No element of financing is deemed present as the control was transferred with a credit term of 60 days, which is consistent with market practice.

• (c) A receivable is recognised when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.

• B. Leases

The Company is engaged in the leasing of certain property classified as operating leases based on the lease condition. The lease payments received during the leasing period on a straight line basis are recognised as property lease income.

(34) Government grants

Government grants are recognised at their fair value only when there is reasonable assurance that the Company will comply with any conditions attached to the grants and the grants will be received. Government grants are recognised in profit or loss on a systematic basis over the periods in which the Company recognises expenses for the related costs for which the grants are intended to compensate.

5. Critical Accounting Judgements, Estimates and Key Sources of Assumption Uncertainty

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

(1) Critical judgements in applying the Company’s accounting policies

Investment property

The Company uses a portion of the property for its own use and another portion to earn rentals or for capital appreciation. When these portions cannot be sold separately and cannot be leased out separately under a finance lease, the property is classified as investment property only if the own-use portion accounts for the immaterial property.

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(2) Critical accounting estimates and assumptions

A. Impairment assessment of tangible assets

The Company assesses impairment based on its subjective judgement and determines the separate cash flows of a specific group of assets, useful lives of assets and the future possible income and expenses arising from the assets depending on how assets are utilised and industrial characteristics. Any changes of economic circumstances or estimates due to the change of company strategy might cause material impairment on assets in the future.

• B. Realisability of deferred tax assets

Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences can be utilised. Assessment of the realisability of deferred tax assets involves critical accounting judgements and estimates of the management, including the assumptions of expected future sales revenue growth rate and profit rate, available tax credits, tax planning, etc. Any variations in global economic environment, industrial environment, and laws and regulations might cause material adjustments to deferred tax assets.

As of December 31, 2020, the Company recognised deferred tax assets amounting to $324,327.

6. Details of Significant Accounts

(1) Cash and cash equivalents

Cash and cash equivalents
Checking accounts and demand deposits Time deposits	December31,2020 218,587 $ 1,400,000 1,618,587 $	December31,2019
		200,390 $ 120,000
		320,390 $

• A. The Company transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.

• B. Certain cash and cash equivalents which were pledged as collaterals and restricted have been transferred to other financial assets. Please refer to Notes 6(7) and 8 for details.

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

Items Current items: Financial assets mandatorily measured at fair value through profit or loss Listed stocks Unlisted stocks Non-hedging derivatives Revaluation – gross Total Financial liabilities mandatorily measured at fair value through profit or loss Non-hedging derivatives	December 31,2020 216 $ 40,332 234 40,782 $ 5,699 46,481 $ 1 $	December 31,2019
		- $ 40,332 927
		41,259 $ 6,897
		48,156 $
		- $

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• A. The nature of financial assets and liabilities at fair value through profit or loss are as follows:

• (a) Equity instruments: including listed, unlisted and emerging stocks.

• (b) Derivative instruments: including forward foreign exchange contracts and foreign exchange options.

• B. Amounts recognised in profit or loss in relation to financial assets/liabilities at fair value through profit or loss are listed below:

		Year ended December	Year ended December	31
		2020		2019
Financial assets mandatorily measured at fair
value through profit or loss
Equity instruments	($	1,198)	$	36,911
Derivative instruments		4,194		1,674
	$	2,996	$	38,585

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

Derivative financial instruments Presale forward exchange contracts -Sell USD and buy NTD -Sell USD and buy JPY Derivative financial instruments Presale forward exchange contracts -Sell USD and buy NTD Option contract -Put options	December 31,2020	December 31,2020
	(Notionalprincipal) (In thousands) Contractperiod USD 4,000 $ 2020/12/8-2021/2/5 USD 200 2020/12/25-2021/1/28 Contract amount December 31,2019	Contractperiod
	(Notionalprincipal) (In thousands) USD 5,000 $ USD 2,000 $ Contract amount	Contractperiod
		2019/12/13-2020/2/3 2019/12/9-2020/1/9

The Company entered into forward foreign exchange contracts to sell to hedge exchange rate risk. However, these forward foreign exchange contracts are not accounted for under hedge accounting.

• D. The Company has no financial assets at fair value through profit or loss pledged to others as

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collateral.

• E. Information relating to credit risk of financial assets at fair value through profit or loss is provided in Note 12(2).

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

	Items December	31,2020	December 31,2019
Non-current items:
Equity instruments
Listed stocks	$	201,482	$	-
Revaluation – gross	(	8,071)		-
	$	193,411	$	-

• A. The Company has selected to classify the stock investments that are considered to be steady dividend income as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $193,411 as of December 31, 2020.

• B. Amounts recognised in profit or loss and other comprehensive income in relation to the financial assets at fair value through other comprehensive income are listed below:

	Year ended December 31	Year ended December 31
	2020	2019
Equity instruments at fair value through other
comprehensive income
Fair value change recognised in other
comprehensive income	8,071) ($	- $

• C. Information relating to credit risk of financial assets at fair value through other comprehensive income is provided in Note 12(2).

(4) Financial assets at amortised cost

Items Current items: Time deposits with maturity over three months Bills with repurchase agreement	December 31,2020 430,000 $ 170,000 600,000 $	December 31,2019
		789 $ -
		789 $

• A. For the years ended December 31, 2020 and 2019, interest income arising from time deposits with maturity over three months held by the Company amounted to $424 and $1, respectively.

• B. The Company has no financial assets at amortised cost pledged to others as collateral.

• C. Information relating to credit risk of financial assets at amortised cost is provided in Note 12(2).

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(5) Accounts receivable

	December	31,2020	December	31,2019
Accounts receivable	$	266,410	$	422,176
Less: Allowance for sales returns and discounts	(	20,803)	(	40,362)
Loss allowance	(	89)	(	137)
	$	245,518	$	381,677

A. The ageing analysis of accounts receivable that were past due but not impaired is as follows:

Not past due Up to 30 days	December 31, 2020 266,410 $ - 266,410 $	December31,2019
		420,813 $ 1,363
		422,176 $

The above ageing analysis was based on past due date.

B. As of December 31, 2020 and 2019, accounts receivable was all from contracts with customers.

• C. The Company has no accounts receivable pledged as collaterals.

• D. Information relating to credit risk of accounts receivable is provided in Note 12(2).

(6) Inventories

Raw materials Work in progress Finished goods Raw materials Work in progress Finished goods		December 31,2020
	Allowance for Cost valuation loss 62,886 $ 12,264) ($ 30,204 133,337 16,063) ( 226,427 $ 28,327) ($ December 31,2019		Book value
			50,622 $ 30,204 117,274
			198,100 $
	Allowance for Cost valuation loss 56,370 $ 8,948) ($ 31,136 - 104,319 6,722) ( 191,825 $ 15,670) ($		Book value
			47,422 $ 31,136 97,597
			176,155 $

The cost of inventories recognised as expense for the year:

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(7) (8)

Other current financial assets Refer to Note 8 for further information on other current financial assets pledged to others as collateral. Investments accounted for using equity method 2020 2019 Cost of goods sold 1,977,867 $ 2,636,163 $ Unallocated overhead expense 299,522 30,471 Loss on decline in market value 12,657 7,308 Scrapped inventory 4,259 7,566 2,294,305 $ 2,681,508 $ Year ended December 31 December 31, 2020 December31,2019 Time deposits pledged 38,489 $ 38,741 $ Restricted bank deposits 20,901 43,010 59,390 $ 81,751 $ 2020 2019 At January 1 347,193 $ 215,219 $ Addition of investments accounted for using equity method - 149,900 Share of profit or loss of investments accounted for using equity method 5,205 17,926) ( Earnings distribution of investments accounted for using equity method 3,264) ( - At December 31 349,134 $ 347,193 $ Subsidiaries December 31,2020 December 31, 2019 Glory Stone Co., Ltd. 214,450 $ 193,566 $ Golden Apple Investment Corporation 134,684 153,627 349,134 $ 347,193 $

Please refer to Note 4(3) in the consolidated financial statements for the year ended December 31, 2020 for the information regarding the Company’s subsidiaries.

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(9) Property, plant and equipment

											Unfinished
										construction and
		Buildings and		Machinery and		Furniture and				equipment under
		structures		equipment		fixtures	Other	equipment			acceptance		Total
January 1, 2020
Cost	$	9,102,693	$	8,057,766	$	10,247	$	63,169	$		148,433	$	17,382,308
Accumulated depreciation
and impairment	(	3,110,519)	(	6,224,940)	(	3,142)	(	57,393)			-	(	9,395,994)
	$	5,992,174	$	1,832,826	$	7,105	$	5,776	$		148,433	$	7,986,314
2020
At January 1	$	5,992,174	$	1,832,826	$	7,105	$	5,776	$		148,433	$	7,986,314
Additions		-		-		-		-			47,001		47,001
Disposals	(	10,454)	(	684)		-		-			-	(	11,138)
Reclassifications (Note 2)	(	2,412,551)		19,437		1,316		2,126	(		186,778)	(	2,576,450)
Depreciation	(	413,398)	(	441,941)	(	1,626)	(	1,649)			-	(	858,614)
Reversal of impairment loss
(Note 3)		28,698		-		-		-			-		28,698
At December 31	$	3,184,469	$	1,409,638	$	6,795	$	6,253	$		8,656	$	4,615,811
December 31, 2020
Cost	$	5,364,819	$	8,075,148	$	11,563	$	65,123	$		8,656	$	13,525,309
Accumulated depreciation
and impairment	(	2,180,350)	(	6,665,510)	(	4,768)	(	58,870)			-	(	8,909,498)
	$	3,184,469	$	1,409,638	$	6,795	$	6,253	$		8,656	$	4,615,811

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										Unfinished
									construction and
		Buildings and		Machinery and		Furniture and			equipment under
		structures		equipment		fixtures	Other	equipment		acceptance		Total
January 1, 2019
Cost	$	9,090,287	$	9,071,853	$	7,584	$	83,252	$	101,003	$	18,353,979
Accumulated depreciation
and impairment	(	2,680,673)	(	6,797,636)	(	1,865)	(	75,855)		-	(	9,556,029)
	$	6,409,614	$	2,274,217	$	5,719	$	7,397	$	101,003	$	8,797,950
2019
At January 1	$	6,409,614	$	2,274,217	$	5,719	$	7,397	$	101,003	$	8,797,950
Additions		-		-		857		-		98,012		98,869
Reclassifications		12,406		25,957		1,806		92	(	50,582)	(	10,321)
Depreciation	(	429,846)	(	467,348)	(	1,277)	(	1,713)			(	900,184)
At December 31	$	5,992,174	$	1,832,826	$	7,105	$	5,776	$	148,433	$	7,986,314
December 31, 2019
Cost	$	9,102,693	$	8,057,766	$	10,247	$	63,169	$	148,433	$	17,382,308
Accumulated depreciation
and impairment	(	3,110,519)	(	6,224,940)	(	3,142)	(	57,393)		-	(	9,395,994)
	$	5,992,174	$	1,832,826	$	7,105	$	5,776	$	148,433	$	7,986,314

Note 1: Refer to Note 8 for further information on property, plant and equipment pledged to others as collateral.

• Note 2: On November 5, 2020, the Company considered the efficiency of assets and the utilization of assets, and decided to dispose 1F to 3F of the plant located in Southern Taiwan Science Park after the resolution of the Board of Directors. Accordingly, the related assets were transferred into ‘disposal group held for sale’ in the amount of $2,575,574. Please refer to Note 6(12) for details.

• Note 3: A gain on reversal of impairment loss on certain properties amounting to $28,698 was recognised from the difference between the carrying amount and recoverable amount which was shown as other gains and losse s. Please refer to Note 12(3) for related fair value information.

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－ (10) Lease transactions lessee

• A. The Company leases various assets including land, machinery and business vehicles. Rental contracts are typically made for periods of 3 to 20 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants, but leased assets may not be used as security for borrowing purposes.

• B. Short-term leases with a lease term of 12 months or less comprise office and parking lot. Lowvalue assets comprise foreign warehouse and dormitory.

• C. The carrying amount of right-of-use assets and the depreciation charge are as follows:

Land Transportation equipment (Business vehicles) Other equipment Land Transportation equipment (Business vehicles) Other equipment	December 31, 2020 December 31,2019 Book value Book value 325,143 $ 342,069 $ 64 192 10,516 12,245 335,723 $ 354,506 $ 2020 2019 Depreciation expense Depreciation expense 31,605 $ 30,304 $ 128 128 1,729 1,729 33,462 $ 32,161 $ Year ended December 31	December 31,2019
		Book value
		342,069 $ 192 12,245
		354,506 $
		Depreciation expense
		30,304 $ 128 1,729
		32,161 $

• D. The movements of right-of-use assets of the Company during the 2020 and 2019 are as follows:

					2020	2020
				Transportation
					equipment		Other
					(Business		equipment
		Land			vehicles)		(Tank)		Total
At January 1	$	342,069	$		192	$	12,245	$	354,506
Depreciation	(	31,605)	(		128)	(	1,729)	(	33,462)
Contracts changed		14,679			-		-		14,679
At December 31	$	325,143	$		64	$	10,516	$	335,723

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				2019	2019
			Transportation
				equipment		Other
				(Business		equipment
		Land		vehicles )		(Tank)		Total
At January 1	$	-	$	-	$	-	$	-
Additions		372,373		320		13,974		386,667
Depreciation	(	30,304)	(	128)	(	1,729)	(	32,161)
At December 31	$	342,069	$	192	$	12,245	$	354,506

• E. The information on profit and loss accounts relating to lease contracts is as follows:

Items affecting profit or loss Interest expense on lease liabilities Expense on short-term lease contracts Expense on leases of low-value assets	2020 2019 7,939 $ 8,261 $ 2,458 2,548 2,551 3,865 Year ended December 31

• F. For the years ended December 31, 2020 and 2019, the Company’s total cash outflow for leases were $42,977 and $42,732, respectively.

(11) Investment property

January 1, 2020 Cost Accumulated depreciation 2020 At January 1 Additions Reclassifications Depreciation At December 31 December 31, 2020 Cost Accumulated depreciation	Buildings and Unfinished construction and equipment under Land structures acceptance Total 4,974,140 $ 821,143 $ - $ 5,795,283 $ - 66,187) ( - 66,187 ( 4,974,140 $ 754,956 $ - $ 5,729,096 $ 4,974,140 $ 754,956 $ - $ 5,729,096 $ - - 120,477 120,477 - 120,477 120,477) ( - - 39,441) ( - 39,441 ( 4,974,140 $ 835,992 $ - $ 5,810,132 $ 4,974,140 $ 941,620 $ - $ 5,915,760 $ - 105,628) ( - 105,628 ( 4,974,140 $ 835,992 $ - $ 5,810,132 $	Total
		5,810,132 $

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January 1, 2019 Cost Accumulated depreciation 2019 At January 1 Additions Reclassifications Depreciation At December 31 December 31, 2019 Cost Accumulated depreciation

Buildings and Unfinished construction and equipment under Land structures acceptance Total 4,974,140 $ 539,060 $ 140,224 $ 5,653,424 $ - 41,466) ( - 41,466) ( 4,974,140 $ 497,594 $ 140,224 $ 5,611,958 $ 4,974,140 $ 497,594 $ 140,224 $ 5,611,958 $ - - 141,859 141,859 - 282,083 282,083) ( - - 24,721) ( - 24,721) ( 4,974,140 $ 754,956 $ - $ 5,729,096 $ 4,974,140 $ 821,143 $ - $ 5,795,283 $ - 66,187) ( - 66,187) ( 4,974,140 $ 754,956 $ - $ 5,729,096 $

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

property are shown below:
Rental income from investment property Direct operating expenses arising from the investment property that generate rental income during the year Direct operating expenses arising from the investment property that did not generate rental income during the year	Year ended December 31
	2020 155,075 $ 80,258 $ - $	2019
		49,429 $
		17,235 $
		35,897 $

• B. The fair value of the investment property held by the Company as at December 31, 2020 and 2019 was $6,483,563 and $6,570,652, respectively, which was valued using the actual price registration. In addition, there was no significance difference between the fair value on December 31, 2020 and the assessment result of the fair value on March 19, 2021 under management’s assessment.

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• C. Amount of borrowing costs capitalised as part of investment property and the interest rate for such capitalisation are as follows:

		Year ended	December	31
		2020		2019
Amount capitalised	$	-	$	1,689
Interest rate for capitalisation		-		1.45%

• D. Information about the investment property that was pledged to others as collateral is provided in Note 8.

(12) Non-current assets held for sale and discontinued operations

On November 5, 2020, the Company considered the efficiency and utilization of assets, and decided to dispose the 1F to 3F of the plant in Southern Taiwan Science Park after the resolution of the Board of Directors. The disposal transaction amount was $2,770,000. As of December 31, 2020, the disposal proceeds received in advance amounted to $1,108,000 (shown as other current liabilities, other) and the related assets were transferred as ‘disposal group held for sale’.

Further, in February 2021, the Company collected additional proceeds from the disposal amounting to $554,000.

Assets of disposal group held for sale:

Other payables Property, plant and equipment Salary and bonus payable Repairs and maintenance expense payable Business tax payable (Note) Payables for machinery and equipment Utility expenses payable Import/export (customs) expense payable Others	December31,2020 2,575,574 $ December 31,2020 84,682 $ 66,358 61,287 36,583 19,922 2,311 71,721 342,864 $	December31,2019
		- $
		December 31,2019
		122,010 $ 81,867 1,405 92,282 20,354 10,892 61,171
		389,981 $

(13) Other payables

Note: As of December 31, 2020, the Company has collected proceeds in advance from the disposal of 1F to 3F of the plant in Southern Taiwan Science Park and reported the related business tax. Please refer to Note 6(12) for further information.

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(14) Bonds payable

	December	31,2020	December	31,2019
Bonds payable	$	900,000	$	1,500,000
Less: Maturity within one year		-	(	600,000)
	$	900,000	$	900,000

• A. In order to fulfill working capital, the Board of Directors resolved to issue the first private unsecured bonds on October 27, 2017, and completed the collection on November 10, 2017. Please refer to Note 7(2)J. The terms and conditions of the private bonds were as follows:

• (a) Issuance amount: NT$1.8 billion

• (b) Face value: NT$10 million

• (c) Issuance price: Issued at full amount of face value and divided into A, B and C bonds. The amounts were NT$300 million, NT$600 million and NT$900 million, respectively.

• (d) The time limit of issuance: the issuance period for A bond is 2 years from November 28, 2017 to November 28, 2019. The issuance period for B bond is 3 years from November 28, 2017 to November 28, 2020. The issuance period for C bond is 5 years from November 28, 2017 to November 28, 2022.

• (e) The interest rate of bond and payments of interest: The interest rate of A bond is 2.1%, the interest rate of B bond is 2.2% and the interest rate of C bond is 2.3%. The simple interest is calculated and paid per half year starting from the issuance date.

• (f) The repayment date and method: repayable at once on the maturity date.

• (g) Redemption Right of the Company: The Company could exercise the right of redemption on all or part of bond from the redemption date, 14[th] of each month starting from 5 months before maturity date for bond A, 6 months for bond B and 1 year for bond C. However, the exercise amount shall be NT$10 million or multiples of NT$10 million. When exercising the redemption right mentioned above, the Group must send redemption notice to each debtor for redemption amount one month before the redemption date.

• (h) Put option of bondholder: The bondholders can exercise put options on the 14th of each month (redemption date) starting from 5 months before the maturity date for bond A, starting from 6 months before the maturity date for bond B and starting from 1 year before the maturity date for bond C. However, the exercise amount shall be exactly NT$10 million or multiples of NT$10 million. When the bondholder exercises the aforementioned put options, the bondholder shall give the Company the bond sales notice for sell amount within one month before the sell date.

• (i) Secure method: None.

• B. The Company transferred current bonds payable as long-term liabilities, current portion based on the liquidity. On December 31, 2020 and 2019, the amounts were $0 and $600,000, respectively.

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- (15) Long term borrowings

Borrowing period and repayment term Land and buildings on Yixian Road, Sec. 2 pledged as collateral for borrowings NTD borrowings from Land Bank: the borrowing period is 15 years and interest is payable monthly for the first 3 years, principal is payable quarterly starting from the 4th year until May 2033 (Note). Unsecured borrowings Borrowing from Taishin Bank: the borrowing period is 3 years and is payable on the maturity date. Borrowing from Taipei Fubon Bank (Anhe Branch): 12 months starting from the first drawdown date is the grace period, and principal is payable every 6 months after the grace period into 5 installments at 20% per installment. Less: Current portion (including unamortised long-term borrowing cost) Borrowing, period and repayment term Land and buildings on Yixian road 2nd sec. pledged as collateral for borrowing NTD borrowings from Land Bank: the borrowing period is 15 years and interest is payable monthly for the first 3 years, principal is payable quarterly starting from the 4th year until May 2033 (Note).

Coupon Rate December 31,2020 1.20% 4,160,000 $ 1.57% 300,000 1.56% 300,000 4,760,000 233,333) ( 4,526,667 $ Coupon Rate December 31, 2019 1.45% 4,160,000 $

Note: The Company has pledged certain property, plant and equipment as collateral for the above borrowing.

On May 8, 2018, the Company entered into a syndicated loan for 15 years with Land Bank, for a facility of $4.16 billion with land and buildings on Yixian Rd., Sec. 2 as collateral.

(16) Pensions

• A. (a) The Company has a defined benefit pension plan in accordance with the Labor Standards Act, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Law. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on

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the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company contributes monthly an amount equal to 2% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company would assess the balance in the aforementioned labor pension reserve account by December 31, every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method to the employees expected to qualify for retirement in the following year, the Company will make contributions for the deficit by next March.

• (b) In April 2020, employees covered under the aforementioned pension plan have reached an agreement with the Company to clear the service years under the old pension, and settled the pension fund with the Bank of Taiwan. The remaining fund balance has been returned to the Company.

• (c) The amounts recognised in the balance sheet are as follows:

	December	31,2019
Present value of defined benefit obligations	($	716)
Fair value of plan assets		62,427
Net defined benefit asset	$	61,711

• (d) Movements in net defined benefit assets are as follows:

			Present value of
			defined benefit		Fair value of		Net defined
	0		obligations		plan assets		benefit asset
2020
At January 1		($	716)	$	62,427	$	61,711
Clear the service years of
old pension			716	(	62,427)	(	61,711)
At December 31		$	-	$	-	$	-

~39~

Present value of defined benefit 0 obligations 2019 At January 1 621) ($ Interest (expense) income 9) ( 630) ( Remeasurements: Return on plan assets (excluding amounts included in interest income or expense) - Change in demographic assumptions 8) ( Change in financial assumptions 49) ( Experience adjustments 29) ( 86) ( At December 31 716) ($	Fair value of Net defined plan assets benefit asset 59,716 $ 59,095 $ 822 813 60,538 59,908 1,889 1,889 - 8) ( - 49) ( - 29) ( 1,889 1,803 62,427 $ 61,711 $

• (e) The Bank of Taiwan was commissioned to manage the Fund of the Company’s defined benefit pension plan in accordance with the Fund’s annual investment and utilisation plan and the “Regulations for Revenues, Expenditures, Safeguard and Utilisation of the Labor Retirement Fund” (Article 6: The scope of utilisation for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-thecounter, or private placement equity securities, investment in domestic or foreign real estate securitisation products, etc.). With regard to the utilisation of the Fund, its minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. If the earnings is less than aforementioned rates, government shall make payment for the deficit after being authorised by the Regulator. The Company has no right to participate in managing and operating that fund and hence the Company is unable to disclose the classification of plan assets fair value in accordance with IAS 19 paragraph 142. The composition of fair value of plan assets as of December 31, 2020 and 2019, is given in the Annual Labor Retirement Fund Utilisation Report announced by the government.

• (f) The principal actuarial assumptions used were as follows:

Discount rate Future salary increases	Year ended December 31,2019
	1.000%
	2.00%

Assumptions regarding future mortality rate were estimated to be 10% in accordance with the 5th version of Taiwan Standard Ordinary Experience Mortality Table.

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Because the main actuarial assumption changed, the present value of defined benefit obligation is affected. The analysis was as follows:

Increase 0.25% Decrease 0.25% December 31, 2019 Effect on present value of defined benefit obligation 34) ($ 35 $ Discount rate	Increase 0.25% Decrease 0.25% 35 $ 33) ($ Future salary increases

The sensitivity analysis above is based on one assumption which changed while the other conditions remain unchanged. In practice, more than one assumption may change all at once. The method of analysing sensitivity and the method of calculating net pension assets in the balance sheet are the same.

The methods used in preparing the sensitivity analysis did not change compared to the previous period.

B. Defined contribution plan

• (a) Effective July 1, 2005, the Company has established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company contributes monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.

• (b) The pension costs under the defined contribution pension plan of the Company for the years ended December 31, 2020 and 2019 were $11,331 and $10,036, respectively.

(17) Share-based payment

• A. For the years ended December 31, 2020 and 2019, the Company’s share-based payment arrangements were as follows:

Type of arrangement Cash capital increase reserved for employee preemption	Grant date 2019/8/12	Quantity granted (in thousands) 7,000	Contract period -	Vesting conditions
				Vested immediately

The abovementioned share-based payment arrangements are equity-settled.

• B. Details of the share-based payment arrangements are as follows:

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2019

				Weighted-average
		No. of options		exercise price
		(in thousands)		(in dollars)
Options outstanding at January 1		-	$	-
Options granted		7,000		13.5
Options exercised	(	3,142)		13.5
Options expired	(	3,858)		13.5
Options outstanding at December 31		-
Options exercisable at December 31		-		-

• C. The weighted-average stock price of stock options at exercise dates for the year ended December 31, 2019 was $14.05.

• D. The fair value of stock options granted on grant date is measured using the Black-Scholes optionpricing model. Relevant information is as follows:

Type of arrangement Cash capital increase reserved for employee preemption	Grant date 2019/8/12	Share Exercise price price $ 14.05 13.50 $	Expected price volatility 50.49%	Expected option life 9 days	Risk-free interest Fair value rate per unit 0.49% 0.77 $

Note: Expected price volatility rate was estimated using the stock prices of the most recent period with length of this period approximate to the length of the stock options’ expected life, and the standard deviation of return on the stock during this period.

• E. Expenses incurred on share-based payment transactions are shown below:

Cash capital increase reserved for employee preemption	Year ended December 31,2019
	5,390 $

(18) Share capital

• A. As of December 31, 2020, the Company’s authorized capital was $20,000,000, consisting of 2 billion shares, and the paid-in capital was $8,069,485 with a par value of $10 (in dollars) per share.

Movements in the number of the Company’s ordinary shares outstanding (in thousands) are as follows:

At January 1 Cash capital increase At December 31	2020 806,949 - 806,949	2019
		736,949 70,000
		806,949

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• B. In order to repay liabilities, fulfill working capital, improve financial structure or strategic alliance to develop related business, the shareholders on May 30, 2014, resolved to increase capital in cash through private placement or public offering and issue common shares up to a maximum of 700 million shares or increase capital through the issuance of global depository receipts (including private placement of common shares not to exceed 300 million shares), with a par value of $10 per share. On July 8, 2014, the Board of Directors of the Company resolved to increase capital in cash through private placement of 281,690 thousand common shares with a discounted price of $7.10 per share, totaling $1,999,999. The effective date of private placement was July 22, 2014, and the purpose of capital increase was for additional working capital. Pursuant to the Securities and Exchange Act, the ordinary shares raised through the private placement are subject to certain transfer restrictions and cannot be listed on the stock exchange until three years after they have been issued and have been offered publicly. Other than these restrictions, the rights and obligations of the ordinary shares raised through the private placement are the same as other issued ordinary shares. On May 8, 2020, the Board of Directors of the Company resolved to apply for additional public offering and listed transaction, and submitted the related data to the authority on July 24, 2020. The effective date of the letter from the authority was August 4, 2020, and the stock has been listed in the security market.

• C. In order to promote the development of strategy alliance, improve financial structure, fulfill working capital, and repay liabilities, the Company's shareholders, on June 16, 2020, resolved to increase capital in cash and issue common shares up to 70 million shares or increase capital through the issuance of global depository receipts. The Company will choose one or both methods, at a par value of NT$10 per share.

(19) Capital surplus

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

(20) Retained earnings

• A. Under the Company’s Articles of Incorporation, the annual earnings, if any, shall first be used to pay all taxes and offset accumulated deficit and then 10% of the remaining amount shall be set aside as legal reserve until the legal reserve equals the paid-in capital. Except for the distribution of cash dividends and bonus which the Board of Directors are authorised to resolve and then report to shareholders, others will be proposed by the Board of Directors and approved by the shareholders.

• B. According to the Articles of Incorporation, the Company shall consider to appropriate all of

~43~

current undistributed earnings based on finance, business, operation and other factors. The appropriation of earnings can be in the form of cash dividend or stock dividend separately or both. The ratio of cash dividend shall not be lower than 20% of the total dividends distributed.

• C. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 20% of the Company’s paid-in capital.

• D. On March 19, 2021, the Board of Directors during its meeting resolved the following:

		Year ended December 31,2020	Year ended December 31,2020	Year ended December 31,2020
				Dividends
				per share
		Amount		(in dollars)
Legal reserve	$	35,000
Reversal of special reserve	(	7,643)
Cash dividends		314,710	$	-
	$	342,067

• E. On June 16, 2020, the appropriation of 2019 earnings resolved by the shareholders is as follows. In addition, as the Company had accumulated deficit as of December 31, 2018, no available earnings can be distributed.

		Year ended December 31, 2019	Year ended December 31, 2019	Year ended December 31, 2019
				Dividends
				per share
		Amount		(in dollars)
Legal reserve	$	96,963
Cash dividends		282,432	$	0.35
	$	379,395

(21) Operating revenue

Revenue from contracts with customers Touch sensors and related products Rental revenue from property	Year ended December 31	Year ended December 31
	2020 2,774,175 $ 155,075 2,929,250 $	2019
		4,199,530 $ 49,429
		4,248,959 $

Disaggregation of revenue from contracts with customers

The Company derives revenue from the transfer of goods and services at a point in time in the following major geographical regions:

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Revenue from external customer contracts South Korea China Taiwan	2020 2019 2,096,081 $ 3,120,698 $ 630,552 1,069,182 202,617 59,079 2,929,250 $ 4,248,959 $ Year ended December 31

For the year ended December 31, 2020, the Group was affected by COVID-19, thus orders from customers were delayed and the operating revenue and capacity utilization were jointly affected. However, the Group has communicated with customers and continually produced its products for delivery subsequently. There was no significant effect on the range of service contract and price.

(22) Interest income

Interest income from bank deposits Interest income from financial assets measured at amortised cost Other interest income Interest income	2020 2019 2,201 $ 487 $ 424 1 5 4 2,630 $ 492 $ Year ended December 31

(23) Other income

Revenue from purchasing masks on behalf of others Rent income Dividend income Income from settlement of old pension fund Government grant revenues (Note 1) Other income (Note 2)	Year ended December 31	Year ended December 31
	2020 9,741 $ 22,971 - 2,339 51,005 53,216 139,272 $	2019
		11,605 $ 2,017 4,430 - 14,137 5,606
		37,795 $

Note 1: The Company obtained the plan of AOI intelligent detection feedback system to enhance the output value of touch sensor and A+ Industrial innovative R&D program to support big size Micro LED Display technique. The development time of this plan was 17~24 months. For the years ended December 31, 2020 and 2019, the grant revenue recognised based on execution stage were $16,480 and $14,137, respectively. Further, as the Company was affected by COVID-19, the Company applied for economic relief package and recognised grant revenue in the amount of $34,525 for the year ended December 31, 2020.

• Note 2: The dispute between the Company and PAI CHUNG ENGINEERING CO., LTD. (PAI CHUNG ENGINEERING) has been concluded by the Taiwan Taipei District Court in

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September 2020. Accordingly, the Company transferred other payable to PAI CHUNG ENGINEERING amounting to $39,600 as other income based on the judgement.

(24) Other gains and losses

		Year ended December	Year ended December	31
		2020		2019
(Losses) gains on disposals of property, plant	($	10,614)	$		13,362
and equipment
Reversal of impairment loss on non-financial
assets (Note)		28,698			-
Gains on financial instruments at fair value
through profit or loss		2,996			38,585
Net foreign exchange losses	(	33,112)	(		14,588)
Other losses	(	5,970)	(		12,238)
	($	18,002)	$		25,121

Note: Please refer to Note 6(9) for the related information.

(25) Employee benefit expense and expenses by nature

Employee benefit expense Salary expenses Labour and health insurance fees Pension costs Directors' remuneration Other personnel expenses Depreciation expense Amortisation charge Employee benefit expense Salary expenses Labour and health insurance fees Pension costs Directors' remuneration Other personnel expenses Depreciation expense Amortisation charge	Year ended December 31,2020	Year ended December 31,2020	Year ended December 31,2020
	Operatingcosts Operatingexpenses Total 161,969 $ 91,935 $ 253,904 $ 16,471 6,596 23,067 7,470 3,861 11,331 - 8,400 8,400 20,949 12,216 33,165 926,852 4,665 931,517 3,575 3,160 6,735 Year ended December 31,2019		Total
	Operatingcosts 190,335 $ 14,883 6,979 - 27,101 953,520 4,301	Operatingexpenses 93,519 $ 5,299 2,244 23,742 15,316 3,546 2,391	Total
			283,854 $ 20,182 9,223 23,742 42,417 957,066 6,692

As of December 31, 2020 and 2019, the Company had 341 and 324 employees, respectively. There were 6 non-employee directors for both years.

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For the years ended December 31, 2020 and 2019, the average employee benefits were $960 and $1,118, respectively, the average salary expenses were $758 and $893, respectively, and the average change in adjustments on salary expenses was (15.12%). In addition, the Company had established the audit committee to replace supervisors, thus no remuneration was paid to supervisors.

The Company’s salary and remuneration policy for directors, managers and employees is as follows:

• a. Employees’ salary standard is determined based on job responsibility, education and experience, professional knowledge and skill and their professional seniority. Salary and remuneration shall not be based on the employees’ age, gender, race, religion, political affiliation and civil status.

• b. Bonus will be distributed based on the Company’s operating performance and employees’ individual performance.

• c. Employees’ compensation is determined based on the job grade, performance and years of service.

• d. Salary increase is determined based on the Company’s operating condition, taking into consideration domestic economic growth rate, price index and salary increases within the same industry and the individual performance.

• e. Directors’ and managers’ remuneration and employees’ compensation are discussed by the remuneration committee and proposed to the Board of Directors for approval.

• A. In accordance with the Articles of Incorporation of the Company, a ratio of distributable profit of the current year, after covering accumulated losses, shall be distributed as employees’ compensation and directors’ and supervisors’ remuneration. The ratio shall be between 0.001% and 15% for employees’ compensation and shall not be higher than 2% for directors’ remuneration.

• B. For the years ended December 31, 2020 and 2019, employees’ compensation was accrued at $25,020 and $59,364, respectively; while directors’ remuneration was accrued at $6,000 and $17,128, respectively. The aforementioned amounts were recognised in salary expenses.

For the year ended December 31, 2020, the employees’ compensation and directors’ remuneration were estimated and accrued based on profit of current year distributable as of the end of reporting period as prescribed by the Company’s Articles of Incorporation. The employees’ compensation and directors’ and supervisors’ remuneration resolved by the Board of Directors were the same, and the employees’ compensation will be distributed in the form of cash.

Employees’ compensation and directors’ remuneration for 2019 as resolved by the Board of Directors were in agreement with those amounts recognised in the 2019 financial statements.

• C. Information about employees’ compensation and directors’ remuneration of the Company as resolved at the meeting of Board of Directors will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

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(26) Income taxes

A. Income tax expense

• (a) Components of income tax expense:

Current tax: Current tax on profits for the year Tax on undistributed earnings Prior year income tax underestimation Total current tax Deferred tax: Origination and reversal of temporary differences Income tax expenses	2020 2019 - $ - $ 25,895 - - 809 25,895 809 82,135 198,507 108,030 $ 199,316 $ Year ended December 31	2020 2019 - $ - $ 25,895 - - 809 25,895 809 82,135 198,507 108,030 $ 199,316 $ Year ended December 31
		809
		198,507
		199,316 $

• (b) The income tax (charge)/credit relating to components of other comprehensive income is as follows:

		Year ended December	Year ended December	31
		2020		2019
Remeasurement of defined benefit	$	-	$		361
obligations
Changes in fair value of financial assets at
fair value through other comprehensive
income	(	1,614)			-
	($	1,614)	$		361

• B. Reconciliation between income tax expense and accounting profit

		Year ended December	Year ended December	31
		2020		2019
Income tax calculated by applying statutory	$	85,382	$	176,910
rate to the profit before tax
Expenses disallowed by tax regulation		17		3,589
Tax exempt income by tax regulation	(	3,264)	(	3,850)
Temporary differences not recognised as
deferred tax assets		-		21,858
Tax on undistributed earnings		25,895		-
Prior year income tax under estimation		-		809
Income tax expenses	$	108,030	$	199,316

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• C. Amounts of deferred tax assets or liabilities as a result of temporary differences and tax losses are as follows:

Recognised in Recognised in other comprehensive At January1 profit or loss income At December 31 Temporary differences: Provisions 8,072 $ 3,911) ($ - $ 4,161 $ Impairment loss 37,763 24,450) ( - 13,313 Loss on obsolete inventories / Inventory valuation loss 3,134 2,532 - 5,666 Unrealised loss on valuation of financial instruments - - 1,614 1,614 Unrealised exchange loss 271 271) ( - - Loss carryforward 372,737 73,164) ( - 299,573 421,977 99,264) ( 1,614 324,327 －Deferred tax liabilities: Temporary differences: Defined benefit plan 8,025) ( 8,025 - Unrealised gain on valuation of financial instruments 9,883) ( 9,110 - 773) ( Unrealised exchange gain - 6) ( - 6) ( 17,908) ( 17,129 - 779) ( Total 404,069 $ 82,135) ($ 1,614 $ 323,548 $ Recognised in Recognised in other comprehensive At January1 profit or loss income At December 31 Temporary differences: Provisions 3,636 $ 4,436 $ - $ 8,072 $ Impairment loss 195,213 157,450) ( - 37,763 Loss on obsolete inventories / Inventory valuation loss 1,672 1,462 - 3,134 Unrealised loss on valuation of financial instruments 12,052 12,052) ( - - Unrealised exchange loss 416 145) ( - 271 Loss carryforward 397,612 24,875) ( - 372,737 610,601 188,624) ( - 421,977 －Deferred tax liabilities: Temporary differences: Defined benefit plan 7,664) ( - 361) ( 8,025) ( Unrealised gain on valuation of financial instruments - 9,883) ( - 9,883) ( 7,664) ( 9,883) ( 361) ( 17,908) ( Total 602,937 $ 198,507) ($ 361) ($ 404,069 $ 2020 －Deferred tax assets: 2019 －Deferred tax assets:		2020
			At December 31
			4,161 $ 13,313 5,666 1,614 - 299,573
			324,327
			404,069 $

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• D. The amounts of deductible temporary differences that were not recognised as deferred tax assets are as follows:

December 31, 2020 December 31, 2019 Deductible temporary differences $ - $ 109,290

• E. Expiration dates of unused tax losses and amounts of unrecognised deferred tax assets are as follows:

Year incurred 2012 2014 2016 Year incurred 2012 2014 2016	Amount filed/ assessed 2,380,945 $ 994,010 278,062 Amount filed/ assessed 2,380,945 $ 994,010 278,062	Unrecognised Unused amount deferred tax assets 317,047 $ 91,254 $ 994,010 - 278,062 - Unrecognised Unused amount deferred tax assets 682,869 $ - $ 994,010 - 278,062 - December 31,2020 December 31,2019	Expiry year
			2022 2024 2026 Expiry year
			2022 2024 2026

• F. The Company’s income tax returns through 2018 have been assessed and approved by the Tax Authority.

~50~

(27) Earnings per share

Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares Employees’ bonus Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares Employees’ bonus Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares	Year ended December 31,2020	Year ended December 31,2020
	Weighted average number of ordinary shares outstanding Earnings per share Amount after tax (shares in thousands) (in dollars) 350,004 $ 806,949 0.43 $ 350,004 $ 806,949 - 3,724 350,004 $ 810,673 0.43 $ Year ended December 31,2019	Earnings per share (in dollars)
		0.43 $
		0.43 $
	Weighted average number of ordinary shares outstanding Amount after tax (shares in thousands) 1,018,057 $ 753,916 1,018,057 $ 753,916 - 1,259 1,018,057 $ 755,175	Earnings per share (in dollars)
		1.35 $
		1.35 $

(28) Supplemental cash flow information

Investing activities with partial cash payments

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		Year ended December	Year ended December	31
		2020		2019
Purchase of property, plant and equipment	$	47,001	$	98,869
Reclassifications to investment property		-		-
Add: Opening balance of payable on		69,907		95,254
equipment
Less: Ending balance of payable on equipment	(	3,838)	(	69,907)
Less: Others	(	39,600)		-
Cash paid during the year	$	73,470	$	124,216
		Year ended December		31
		2020		2019
Purchase of investment property	$	120,477	$	141,859
Reclassified from property, plant and equipment		-		-
Add: Opening balance of payable on		22,375		32,829
equipment
Less: Ending balance of payable on equipment	(	32,745)	(	22,375)
Cash paid during the year	$	110,107	$	152,313

(29) Changes in liabilities from financing activities

For the years ended December 31, 2020 and 2019, the Company’s liabilities from financing activities included bonds payable, long-term borrowings and lease liabilities. The changes all pertain to changes in the financing cash flow and other non-cash changes, the aggregate amounts were as follows. Please refer to statements of cash flows for other information.

2020

At January 1 Changes in cash flow from financing activities Changes in other non-cash items At December 31	Short-term Bonds borrowings payable - $ 1,500,000 $ - 600,000) ( - - - $ 900,000 $	Long-term Liabilities from financing borrowings Lease liability activities-gross 4,160,000 $ 358,272 $ 6,018,272 $ 600,000 37,968) ( 37,968) ( - 22,461 22,461 4,760,000 $ 342,765 $ 6,002,765 $

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2019

						2019
											Liabilities from
		Short-term		Bonds		Long-term					financing
		borrowings		payable		borrowings		Lease	liability		activities-gross
At January 1	$	520,000	$	1,800,000	$	5,948,458	$		-	8,268,458 $
Adjustments under new		-		-		-			386,667		386,667
standards
Changes in cash flow from	(	520,000)	(	300,000)	(	1,788,458)	(		36,319)	(	2,644,777)
financing activities
Changes in other non-cash
items		-		-		-			7,924		7,924
At December 31	$	-	$	1,500,000	$	4,160,000	$		358,272	6,018,272 $

7. Related Party Transactions

(1) Names of related parties and relationship with the Company

Names of related parties Relationship with the Company Hannstar Display Corp. (Hannstar) Entities with significant influence to the Company Hannstar Display (Nanjing) Corp. (Hannstar Other related party (Nanjing)) Glory Stone Co., Ltd. (White Stone) Subsidiary Mian-Lu Corp. (Mian-Lu) Subsidiary

(2) Significant related party transactions

A. Operating revenue

Entities with significant influence to the Company Subsidiaries	Year ended December 31	Year ended December 31
	2020 17,647 $ 85,784 103,431 $	2019
		- $ 29,291
		29,291 $

There were no similar transactions that can be compared with. The transaction conditions were based on the mutual agreement.

B. Purchases

Purchases of goods: Entities with significant influence to the Company Other related parties	Year ended December 31	Year ended December 31
	2020 9,335 $ - 9,335 $	2019
		5,446 $ 643
		6,089 $

There were no similar transactions that can be compared with. The transaction conditions were

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based on the mutual agreement.

• C. Rent expense

	Year ended	December 31
	2020	2019
Entities with significant influence to the
Company	2,575 $	2,548 $

There were no similar transactions that can be compared with. The transaction conditions were based on the mutual agreement.

• D. Interest expenses

	Year ended	December	31
	2020		2019
Hannstar	29,390 $	$	38,751

E. Administrative expenses

Subsidiaries	Year ended December 31	Year ended December 31
	2020 18,351 $	2019
		- $

F. Accounts receivable

Accounts receivable: Entities with significant influence to the Company Subsidiaries Other receivables: Subsidiaries	December 31,2020 16,460 $ 57,160 73,620 $ 485 $	December 31,2019
		- $ 29,697
		29,697 $
		100 $

It pertains to rent receivable and office expenses.

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G. Accounts payable

Accounts payable: Entities with significant influence to the Company Other payables: Entities with significant influence to the Company Subsidiaries	December 31,2020 2,486 $ 1,964 $ 651 2,615 $	December 31,2019 18 $ 3,638 $ 62 3,700 $

• H. Receipts in advance (shown as other current liabilities)

December31,2020 Hannstar 1,108,000 $	December31,2019
	- $

Advance receipts from disposal of 1F to 3F of Tainan Science Park.

• I. Property transactions

Disposal of property, plant and equipment

Entities with significant influence to the Company	Disposal Disposal proceeds Gain/(loss) proceeds Gain/(loss) 14 $ 14 $ - $ - $ Year ended December 31 2020 2019	Disposal Disposal proceeds Gain/(loss) proceeds Gain/(loss) 14 $ 14 $ - $ - $ Year ended December 31 2020 2019	Disposal Disposal proceeds Gain/(loss) proceeds Gain/(loss) 14 $ 14 $ - $ - $ Year ended December 31 2020 2019
	Disposal proceeds 14 $	Disposal proceeds - $	Gain/(loss)
			- $

• J. Issuance of bonds payable

On November 28, 2017, the Group issued domestic first private unsecured bonds, the issuance amount was NT$1.8 billion which was used to repay the corporate bonds issued in 2016. The bonds were fully subscribed by Hannstar. As of December 31, 2020, the Company's bonds payable was $900,000 (including current portion).

(3) Key management compensation

Salaries and other short-term employee benefits Share-based payment	Year ended December 31	Year ended December 31
	2020 31,202 $ - 31,202 $	2019
		38,249 $ 1,176
		39,425 $

8. Pledged Assets

The Company’s assets pledged for the purpose of long-term borrowings, customs duty on raw material

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imports and performance bond are as follows:

	Book	value
Pledged asset December	31,2020	December	31,2019
Pledged time deposits (shown as other financial $	38,489	$	38,741
assets)
Demand deposits (shown as other financial assets)	20,901		43,010
Property, plant and equipment and investment
property	5,215,919		5,610,105
$	5,275,309	$	5,691,856

9. Significant Contingent Liabilities and Unrecognised Contract Commitments

As of December 31, 2020, significant commitments and contingencies are outlined as follows:

(1) Contingencies

In November 2013, the Tainan District Prosecutors Office initiated the prosecution proceedings against the Company and the Company’s former Directors and financial managers suspected of false reporting, increasing the contract prices of construction projects, purchasing scrapped equipment, misappropriating deposits, receiving kickbacks, hollowing out the Company's assets and breach of trust under the Securities and Exchange Act, Criminal Code, Business Entity Accounting Act and Tax Collection Act and other crimes. In December 2016, the Criminal court of Tainan District Court has rendered its decision that the Company is innocent. In March 2019, the second instance court has found the other defendants guilty. The above criminal case has been initiated for third instance with the Supreme Court. Further, the Company filed additional civil lawsuits against 14 people suspected of the criminal case. In January 2019, the first instance court has rendered its judgment whereby the Company partly won in some of the cases. Consequently, the Company filed appeals with the Taiwan High Court Tainan Branch Court which are still pending as of the report date. As the construction and equipment had been derecognised from past financial statements through depreciation, impairment and loss from disposal, the above cases have no significant effect on the Company’s financial situation.

(2) Commitments

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

Property, plant and equipment Investment property	December31,2020 32,366 $ 7,697 40,063 $	December31,2019
		37,430 $ 88,257
		125,687 $

10. Significant Disaster Loss

None.

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11. Significant Events after the Balance Sheet Date

• (1) Refer to Notes 6(12), 6(20) and 6(25) for details.

• (2) On March 19, 2021, the Company’s board of directors resolved not to proceed with the capital increase by cash through the issuance of up to 70 million shares of stock either through private placement or public offering, as resolved by the shareholders during their meeting last June 16, 2020 for the purpose of developing strategic alliances, increasing working capital, etc. However, in order for the Company to have the flexibility to respond to changes in the industry and the economy, and in line with the practice of the competent authority to review the plans of companies to raise capital, the Company’s board of directors proposed another resolution for the capital increase.

• (3) For the purpose of developing strategic alliances and increasing working capital, the Company’s board of directors during its meeting on March 19, 2021 resolved to increase capital through the issuance of up to 80 million shares of stock or depository receipts with a proposed denomination of NT$10 per share through private placement or public offering.

• (4) Loans to Glory Stone were resolved by the Board of Directors on March 19, 2021 in the amount of $300,000.

12. Others

(1) Capital management

The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. To maintain or adjust the capital structure, the Company adjusted the capital structure through the issuance of new shares to borrow or repay loans.

(2) Financial instruments

• A. Financial instruments by category

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December 31, 2020 December 31, 2019

	December 31,2020	December 31,2019
Financial assets Financial assets at fair value through profit or loss Financial assets mandatorily measured at fair value through profit or loss Financial assets at fair value through other comprehensive income Designation of equity instrument Financial assets at amortised cost Cash and cash equivalents Financial assets at amortised cost Accounts receivable (including related parties) Other receivables (including related parties) Other financial assets Financial liabilities Financial liabilities at fair value through profit or loss Financial liabilities designated as at fair value through profit or loss Loss from financial liabilities at amortised cost Notes payable Accounts payable (including related parties) Other payables (including related parties) Bonds payable (including current portion) Long-term borrowings (including current portion) Lease liability	46,481 $ 193,411 $ 1,618,587 $ 600,000 319,138 22,137 59,390 2,619,252 $ 1 $ 217 $ 136,986 345,479 900,000 4,760,000 6,142,682 $ 342,765 $	48,156 $
		- $
		320,390 $ 789 411,374 1,728 81,751
		816,032 $
		- $
		1,341 $ 161,745 393,681 1,500,000 4,160,000
		6,216,767 $
		358,272 $

B. Financial risk management policies

• (a) The Company’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. To minimise any adverse effects on the financial performance of the Company, derivative financial instruments, such as foreign exchange forward contracts and foreign currency option contracts are used to hedge certain exchange rate risk.

• (b) Risk management is carried out by a central treasury department (Company treasury) under policies approved by the Board of Directors. Company treasury identifies, evaluates and

~58~

hedges financial risks in close cooperation with the Company’s operating units. The Board provides written principles for overall risk management, as well as written policies covering specific areas and matters, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

• C. Significant financial risks and degrees of financial risks

• (a) Market risk

Exchange rate risk

• i. The Company operates internationally and is exposed to exchange rate risk arising from the transactions of the Company used in various functional currency, primarily with respect to the USD and JPY. Foreign exchange rate risk arises from future commercial transactions and recognised assets and liabilities.

• ii. Management has set up a policy to require the Company to manage its foreign exchange risk against the functional currency. The Company is required to hedge the entire foreign exchange risk exposure with the Company treasury. Exchange rate risk is measured through a forecast of highly probable USD and JPY expenditures. Forward foreign exchange contracts are adopted to minimise the volatility of the exchange rate affecting cost of forecast inventory purchases.

• iii. The Company’s businesses involve some non-functional currency operations (the Company’s functional currency: NTD). The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

~59~

Foreign currency amount Exchange (In thousands) rate (Foreign currency: functional currency) Financial assets Monetary items USD:NTD 9,931 $ 28.100 JPY:NTD 68,713 0.2725 Financial liabilities Monetary items USD:NTD 1,639 28.100 JPY:NTD 127,884 0.2725 Foreign currency amount Exchange (In thousands) rate (Foreign currency: functional currency) Financial assets Monetary items USD:NTD 13,548 $ 29.980 JPY:NTD 120,067 0.2760 Financial liabilities Monetary items USD:NTD 2,003 29.980 JPY:NTD 101,771 0.2760	Book value (NTD) 279,061 $ 18,724 46,056 34,848 Book value (NTD) 406,157 $ 33,139 60,047 28,089 December December	31,2020 Sensitivityanalysis	31,2020 Sensitivityanalysis	31,2020 Sensitivityanalysis
		Degree of Effect on profit Effect on other comprehensive variation or loss income 1% 2,791 $ - $ 1% 187 - 1% 461 - 1% 348 - 31, 2019 Sensitivityanalysis		Effect on other comprehensive income
		Degree of variation 1% 1% 1% 1%	Effect on profit Effect on other comprehensive or loss income 4,062 $ - $ 331 - 600 - 281 -

• iv. Total exchange loss, including realised and unrealised, arising from significant foreign exchange variation on the monetary items held by the Company for the years ended December 31, 2020 and 2019, amounted to ($33,112) and ($14,588), respectively.

Price risk

• i. The Company’s equity securities, which are exposed to price risk, are the held financial assets at fair value through profit or loss. To manage its price risk arising from investments in equity securities, the Company diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Company.

• ii. The Company’s investments in equity securities comprise shares issued by the domestic companies. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased/decreased by 1% with all other variables held constant, post-tax profit for the years ended December 31, 2020 and 2019 would have increased/decreased by $462 and $472, respectively.

~60~

Cash flow and fair value interest rate risk

The Company’s main interest rate risk arises from long-term borrowings with variable rates, which expose the Company to cash flow interest rate risk. Company policy is to maintain at least 1~3% of its borrowings at fixed rate using interest rate swaps to achieve this when necessary. During 2020 and 2019, the Company’s borrowings at variable rate were mainly denominated in New Taiwan dollars.

(b) Credit risk

• i. Credit risk refers to the risk of financial loss to the Company arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the accounts receivable based on the agreed terms.

• ii. The Company adopts the assumption that the default occurs when the contract payments are past due over 120 days.

• iii. The Company adopts the following assumption under IFRS 9 to assess whether there has been a significant increase in credit risk on that instrument since initial recognition:

If the contract payments were past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.

• iv. The following indicators are used to determine whether the credit impairment of debt instruments has occurred:

• (i) It becomes probable that the issuer will enter bankruptcy or other financial reorganisation due to their financial difficulties;

• (ii) The disappearance of an active market for that financial asset because of financial difficulties;

(iii) Default or delinquency in interest or principal repayments.

• v. The Company wrote-off the financial assets, which cannot be reasonably expected to be recovered, after initiating recourse procedures. However, the Company will continue executing the recourse procedures to secure their rights. On December 31, 2020 and 2019, the Company had no written-off financial assets that are still under recourse procedures.

• vi. The methods used by the Company in assessing the expected credit risk of accounts receivable were as follows:

• (i) Individually estimated expected credit loss according to individual significant accounts receivable which are considered on default;

• (ii) Other customers’ accounts receivable were classified based on the Company's credit

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rating standards. The Company applies different loss rate methodology and provision matrix to estimate the expected credit loss of different groups.

• (iii) Loss rates are calculated based on past and current information, taking into account forward-looking information provided by the Basel Committee on Banking Supervision.

• (iv) On December 31, 2020 and 2019, the provision loss for accounts receivable which were individually estimated by loss rate methodology and provision matrix were as follows:

December 31, 2020 Expected loss rate Total book value December 31, 2019 Expected loss rate Total book value	Group 1 0.03%~100% - $ Group1 0.03%~100% - $	Group2 0.03% 266,410 $ Group2 0.03% 422,176 $	Total
			266,410 $
			Total 422,176 $

• Group 1: For customers with impairment indications, individual expected credit loss is determined through considering the claim order of insurance and debts.

Group 2: Long-term customers with good credit history.

• vii. Movements in relation to the Company applying the modified approach to provide loss allowance for accounts receivable are as follows:

			2020
		Accounts receivable
At January 1	$		137
Reversal of impairment loss	(		48)
At December 31	$		89
			2019
		Accounts receivable
At January 1	$		16,495
Provision for impairment loss			136
Write-offs	(		16,494)
At December 31	$		137

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(c) Liquidity risk

• i. Cash flow forecasting is performed by Company treasury. Company treasury monitors rolling forecasts of the Company’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn borrowing facilities at all times so that the Company does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities. Such forecasting takes into consideration the Company’s financing plans, covenant compliance, compliance with internal balance sheet ratio targets and, if applicable external regulatory or legal requirements.

• ii. The table below analyses the Company’s non-derivative financial liabilities and net-settled or gross-settled derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for nonderivative financial liabilities and to the expected maturity date for derivative financial liabilities were as follows:

Non-derivative financial liabilities:

Non-derivative financial liabilities :
December 31, 2020 Financial liabilities at fair value through profit or loss Notes payable Accounts payable (including related parties) Other payables (including related parties) Current tax liabilities Lease liability Other current liabilities, others Bonds payable (including put option on corporate bonds matured or exercised within 1 year) Long-term borrowings (including current portion)	Less than 1year 1 $ 217 136,986 345,479 25,895 30,794 1,123,886 - 291,907	Between 2 and 3years - $ - - - - 63,532 - 900,000 1,332,294	Between 3 and 4years - $ - - - - 66,401 - - 764,378	Over 5years
				- $ - - - - 182,038 - - 2,718,215

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Non-derivative financial liabilities:

Less than December 31, 2019 1year Notes payable 1,341 $ Accounts payable (including related parties) 161,745 Other payables (including related parties) 393,681 Lease liability 29,028 Other current liabilities, others 10,939 Bonds payable (including put option on corporate bonds matured or exercised within 1 year) 600,000 Long-term borrowings (including current portion) -	Between Between Over 2 and 3years 3 and 4years 5years - $ - $ - $ - - - - - - 59,816 62,449 206,979 - - - 900,000 - - 695,603 789,232 3,131,656

• iii. In order to repay the borrowings, the Company planned to issue shares of stock through public offering or private placement. Please refer to Note 6(18)C for details.

(3) Fair value information

• A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:

• Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. An active market refers to a market in which transactions for an asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Company’s investment in listed stocks is included in Level 1.

• Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The fair value of the Company’s investment in forward foreign exchange contracts is included in Level 2.

• Level 3: Unobservable inputs for the asset or liability.

• B. Fair value information of investment property at cost is provided in Note 6(11).

• C. Financial instruments not measured at fair value

The carrying amounts of the Company’s financial instruments not measured at fair value (including cash and cash equivalents, accounts receivable (including related parties), other receivables (including related parties), other financial assets - current, notes payable, accounts payable (including related parties), other payables (including related parties) and lease liabilities) approximate to their fair values. On December 31, 2020 and 2019, the fair value of long-term borrowings (including current portion) which were included in Level 3 were $3,973,461 and $3,278,828, respectively.

• D. Financial and non-financial instruments measured at fair value

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• (a) The related information on financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities at December 31, 2020 and 2019 are as follows:

December 31, 2020 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Listed stocks Unlisted stocks Non-hedging derivatives Financial assets at fair value through other comprehensive income Listed and emerging stocks Non-recurring fair value measurements Non-current assets held for sale Liabilities Recurring fair value measurements Financial liabilities at fair value through profit or loss Non-hedging derivatives December 31, 2019 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Listed stocks Unlisted stocks	Level 1 200 $ - - 193,411 193,611 $ - $ - $ Level 1 - $ - - $	Level 2 - $ - 234 - 234 $ - $ 1 $ Level 2 - $ 927 927 $	Level 3 - $ 46,047 - - 46,047 $ 2,575,574 $ - $ Level 3 47,229 $ - 47,229 $	Total
				200 $ 46,047 234 193,411
				239,892 $
				2,575,574 $
				1 $
				Total
				47,229 $ 927
				48,156 $

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(b) The methods and assumptions the Company used to measure fair value are as follows:

• i. For the instruments the Company used market quoted prices as their fair values (that is, Level 1), the Company uses the closing price of the listed shares as fair value.

• ii. Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques or by reference to counterparty quotes. The fair value of financial instruments measured by using valuation techniques can be referred to current fair value of instruments with similar terms and characteristics in substance, discounted cash flow method or other valuation methods, including calculated by applying model using market information available at the parent company only balance sheet date.

• iii. When assessing non-standard and low-complexity financial instruments, for example, debt instruments without active market, interest rate swap contracts, foreign exchange swap contracts and options, the Company adopts valuation technique that is widely used by market participants. The inputs used in the valuation method to measure these financial instruments are normally observable in the market.

• E. On December 31, 2020 and 2019, there was no transfer between Level 1 and Level 2.

• F. On December 31, 2020 and 2019, there was no transfer into or out from Level 3.

• G. Finance and accounting segment is in charge of valuation procedures for fair value measurements being categorised within Level 3, which is to verify independent fair value of financial instruments. Such assessment is to ensure the valuation results are reasonable by applying independent information to make results close to current market conditions, confirming the resource of information is independent, reliable and in line with other resources and represented as the exercisable price, and frequently calibrating valuation model, performing back-testing, updating inputs used to the valuation model and making any other necessary adjustments to the fair value. The Company’s finance and accounting department use the valuation methods and assumptions announced by the Financial Supervisory Commission, Securities and Futures Bureau or through outsourced appraisal performed by the external valuer.

• H. The following is the qualitative information of significant unobservable inputs and sensitivity analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair value measurement:

					Significant
	December		31, 2020	Valuation	unobservable	Range (weighted	Relationship of
		Fairvalue		technique	input	average)	inputs to fairvalue
Non-derivative equity	instrument:
Unlisted shares	$		46,047	Market	Price book ratio	Not applicable	The higher the multiple
				comparable	multiplier, discount		and control premium, the
				companies	for lack of		higher the fair value;
					marketability		the higher the discount for
							lack of marketability, the
							lower the fair value

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Significant December 31, 2019 Valuation unobservable Range (weighted Relationship of Fair value technique input average) inputs to fair value Non-derivative equity instrument: Unlisted shares $ 47,229 Market Price book ratio Not applicable The higher the multiple comparable multiplier, discount and control premium, the companies for lack of higher the fair value; the marketability higher the discount for lack of marketability, the lower the fair value

13. Supplementary Disclosures

(1) Significant transactions information

• A. Loans to others: Please refer to table 1.

• B. Provision of endorsements and guarantees to others: None.

• C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 2.

• D. Acquisition or sale of the same security with the accumulated cost exceeding NT$300 million or 20% of the Company's paid-in capital: None.

• E. Acquisition of real estate reaching NT$300 million or 20% of paid-in capital or more: None.

• F. Disposal of real estate reaching NT$300 million or 20% of paid-in capital or more: Please refer to table 3.

• G. Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paidin capital or more: None.

• H. Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more: None.

• I. Trading in derivative instruments undertaken during the reporting period: Please refer to Notes 6(2).

• J. Significant inter-company transactions during the reporting periods: None.

(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China): Please refer to table 4.

(3) Information on investments in Mainland China

• A. Basic information: Please refer to table 5.

• B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: None.

~67~

(4) Major shareholders information

Major shareholders information: Please refer to Table 6.

14. Segment Information

Not applicable

~68~

HANNSTOUCH SOLUTION INCORPORATED CASH AND CASH EQUIVALENTS DECEMBER 31, 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Statement 1

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Items Summary Amount
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Statement 1 Items Summary	Amount
Bank deposit Checking account deposits NTD Demand deposits NTD JPY 68,713 thousand, exchange rate: $0.2725 USD 997 thousand, exchange rate: $28.100 Cash equivalents Time deposits	432 $ 171,412 18,724 28,019 1,400,000
	1,618,587 $

Statement 1, page 1

HANNSTOUCH SOLUTION INCORPORATED DETAILS OF FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS DECEMBER 31, 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Statement 2

Statement 2
Investee Summary No. of shares (in thousands) KHAM INC. Stocks 4 YH Bio Co., Ltd. Stocks 6,973 VITA GENOMICS, INC. Stocks 156 Touch Cloud Inc. Stocks 250		Acquisition cost	Fair value Collateral or endorsement provided 200 None 44,229 〝 1,432 〝 386 〝 46,247 $
		216 64,923 1,278 5,000 71,417 $

Statement 2, page 1

HANNSTOUCH SOLUTION INCORPORATED

DETAILS OF FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

DECEMBER 31, 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Statement 3 Name of financial No. of shares Acquisition Fair value instrument Summary (in thousands) cost Total amount Note Hannstar Display Corp. Stock 15,744 $ 201,482 $ 193,411 None

Statement 3, page 1

HANNSTOUCH SOLUTION INCORPORATED

MOVEMENT SUMMARY OF INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD YEAR ENDED DECEMBER 31, 2020 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Statement 4

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Opening balance Cash dividends Ending balance
Number of shares paid during Investment Number of shares Market price or
(per thousand the year income (loss) (per thousand Shareholding net equity
Name share) Amount Amount Amount share) ratio Amount Total amount
- - - - -
4,500 $ 4,500 $ $
Richest Investment Ltd. 100%
-
Golden Apple
15,000 153,627 ( 3,264) ( 15,679) 15,000 100% 134,684
Investment Corporation
Glory Stone Co., Ltd. 22,000 193,566 - 20,884 22,000 42.31% 214,450 -
$ 347,193 ($ 3,264) $ 5,205 $ 349,134 $ -
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Statement 4, page 1

HANNSTOUCH SOLUTION INCORPORATED DETAILS OF ACCOUNTS RECEIVABLE DECEMBER 31, 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Statement 5

Statement 5
Customer Name		Amount	Note
Ａcustomer	$	132,020
Ｂcustomer		62,940
Ｃcustomer		44,269
Ｄcustomer		19,487
			The balance of individual client account is less
Others		7,694	than 5% of the accounts receivable balance
		266,410
Less: Sales returns and discounts and allowances	(	20,803)
Allowance for doubtful accounts	(	89)
	$	245,518

Statement 5, page 1

HANNSTOUCH SOLUTION INCORPORATED DETAILS OF INVENTORIES DECEMBER 31, 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Statement 6

Amount

Items Cost Materials and supplies 62,886 $ Work in progress 30,204 Finished goods 133,337 226,427 Less: Allowance for inventory valuation losses and loss for obsolete and slow- moving inventories 28,327) ( 198,100 $	Net realisable value Note 51,305 $ 30,204 190,360 271,869 $ Inventories calculated based on lower of cost and the net realisable value

Statement 6, page 1

HANNSTOUCH SOLUTION INCORPORATED DETAILS OF ACCOUNTS PAYABLE DECEMBER 31, 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

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Statement 7
Vendor name Amount Note
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A Vendor B Vendor C Vendor D Vendor E Vendor Others	30,148 $ 17,773 15,156 12,640 7,704 51,079 The balance of individual vendor account is less than 5% of the accounts payable balance 134,500 $

Statement 7, page 1

HANNSTOUCH SOLUTION INCORPORATED DETAILS OF LONG-TERM BORROWINGS DECEMBER 31, 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Statement 8 Creditor	Summary Amount Secured borrowings for land and buildings located in Yixian Rd., Sec. 2, with a contract period of 15 years. Interest is payable monthly for the first 3 years, and the principal is payable quartely starting from the fourth year until May 2033. 4,160,000 $ Contract period is 3 years, the borrowing is payable on the maturity date. 300,000 The borrowing has a grace period of 12 months starting from the first drawdown date, and the principal is payable every 6 months after the grace period in 5 installments at 20% per installment. 300,000 4,760,000 Current portion (including unamortized cost of long-term borrowings) 233,333) ( 4,526,667 $	Contractperiod 2018/5~2033/5 2020/8~2023/8 2020/8~2023/8	Interest 1.20% 1.57% 1.56%	Pledged orguarantee
Land Bank Taishin International Bank Taipei Fubon Bank Less:				Investment property Unsecured Unsecured

Statement 8, page 1

HANNSTOUCH SOLUTION INCORPORATED DETAILS OF OPERATING REVENUE YEAR ENDED DECEMBER 31, 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Statement 9

Items Sales revenue Touch products Rental revenue from property Total operating revenue Less: Sales returns and discounts and allowances Operating revenue, net	Numbers (in thousandpcs) Amount 1,540 2,823,948 $ 155,075 2,979,023 49,773) ( 2,929,250 $

Statement 9, page 1

HANNSTOUCH SOLUTION INCORPORATED DETAILS OF OPERATING COST YEAR ENDED DECEMBER 31, 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Statement 10
Items		Amount
Direct materials
Add: Raw materials at beginning	$	56,370
Material purchased during the year		792,942
Less: Raw materials at the end	(	62,886)
Others	(	147,316)
Cost of material		639,110
Direct labor		63,852
Overhead		1,686,121
Unallocated overhead expense	(	299,522)
Manufacturing cost		2,089,561
Add: Beginning work in Progress		31,136
Less: Ending work in Progress	(	30,204)
Cost of finished goods		2,090,493
Add: Beginning finished goods		104,319
Purchases during the year		7,202
Less: Ending finished goods	(	133,337)
Expenses order settlement	(	1,650)
Others	(	88,800)
Cost of finished goods sold		1,978,227
Test goods transferred to cost of sales	(	360)
Unallocated overhead expense		299,522
Inventory valuation loss		12,657
Scrapped inventories		4,259
Total operating cost	$	2,294,305

Statement 10, page 1

HANNSTOUCH SOLUTION INCORPORATED DETAILS OF MANUFACTURING EXPENSE YEAR ENDED DECEMBER 31, 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Statement 11 Items Depreciation Repairs and maintenance expense Utilities expense Salary expenses Amortisation charge Others	Amount
	926,852 $ 233,355 200,257 115,157 3,575 206,925
	1,686,121 $

Statement 11, page 1

HANNSTOUCH SOLUTION INCORPORATED DETAILS OF OPERATING EXPENSE YEAR ENDED DECEMBER 31, 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Statement 12

Statement 12
Employee benefit expense Salary expenses Labour and health insurance fees Pension costs Directors' remuneration Other personnel expenses Depreciation Amortisation charge Cost of services Others	Selling expenses 11,785 $ 924 591 - 913 204 - 277 12,570 27,264 $	General and administrative expenses 65,100 $ 4,535 2,545 8,400 10,257 3,731 1,118 15,908 32,953 144,547 $	Research and development expenses 15,050 $ 1,137 725 - 1,046 730 2,042 - 19,948 40,678 $	Total
				91,935 $ 6,596 3,861 8,400 12,216 4,665 3,160 16,185 65,471
				212,489 $

Statement 12, page 1

HannsTouch Solution Incorporated

Loans to others

Year ended December 31, 2020

Table 1

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS,

EXCEPT AS OTHERWISE INDICATED)

Maximum General outstanding Amount of ledger Is a balance during the Balance at transactions Reason for Limit on loans Collateral No. account related year ended December 31, Actual amount Interest rate Nature of with the short-term Allowance for granted to a single Ceiling on total loans (Note 1) Creditor Borrower (Note 2) party December 31, 2020 (Note 3) drawn down range loan borrower financing doubtful accounts Item Value party granted Note 0 HannsTouch Glory Stone Co., Other Yes $ 130,000 $ 130,000 $ - Undetermined Necessary $ - Operating $ - None $ - $ 1,888,219 $ 2,832,328 Note 4, 5, 6 Solution Ltd. receivables for shortIncorporated due from term related financing parties

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

• (1)The Company is ‘0’.

• (2)The subsidiaries are numbered in order starting from ‘1’.

• Note 2: Fill in the name of account in which the loans are recognised, such as receivables–related parties, current account with stockholders, prepayments, temporary payments, etc.

• Note 3: The upper limit of capital loan and balance of capital loans in the end of the year are the amount approved by the Board of Directors, not actual drawn amount.

• Note 4: The limit of HannsTouch Solution Incorporated loans to individual who has the needs of short-term financing shall not exceed 20% of the net asset value of latest financial statements.

Note 5: The total loans amount of HannsTouch Solution Incorporated shall not exceed 30% of net asset value.

Note 6: The limits of the company loan to Glory Stone Co. Ltd. with amount of $1.3 million and to individual were resolved by the Board of Directors on March 20, 2020.

Table 1

HannsTouch Solution Incorporated

Holding of marketable securities at the end of the year (not including subsidiaries, associates and joint ventures)

December 31, 2020

Table 2

Securities held by Table 2	Marketable securities	Relationship with the securities issuer	General ledger account		Book value Ownership (%) Fair value(Note) Note EndingBalance EXCEPT AS OTHERWISE INDICATED) ESSED IN THOUSANDS OF NEW TAIWAN DOLLARS,
				Number of shares (in thousands)	Book value	Ownership (%)	Fair value(Note)
HannsTouch Solution Incorporated Golden Apple Investment Corporation	Stock KHAM INC. YH Bio Co., Ltd. VITA GENOMICS, INC. Touch Cloud Inc. Hannstar Display Corp. Stock Chaiin Hotel Co., Ltd.	None None None None Other related parties None	Financial assets at fair value through profit or loss 〞 〞 〞 Financial assets at fair value through other comprehensive income Financial assets at fair value through profit or loss	4 6,973 156 250 15,744 2,100	$ 200 44,229 1,432 386 193,411	0.01% 3.40% 0.26% 3.42% 0.57% 19.00%	$ 200 44,229 1,432 386 193,411 9,024 $
					$ 239,658
					$ 9,024

Note: Fill in the amount after adjusted at fair value and deducted by accumulated impairment for the marketable securities measured at fair value; Fill in the acquisition cost or amortised cost deducted by accumulated impairment for the marketable securities not measured at fair value.

Table 2

HannsTouch Solution Incorporated

Disposal of real estate reaching NT$300 million or 20% of paid-in capital or more

Year ended December 31, 2020

Table 3

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT AS OTHERWISE INDICATED)

Transaction date Real estate or date of the Status of collection Gains (losses) disposed by Real estate event (Note 3) Date of acquisition Book value Disposal amount of proceeds on disposal Counterparty Relationship with the seller The Company 1F to 3F of the plant November 2020 May 1, $ 2,575,574 $ 2,770,000 Perform the Note 4 Hannstar Relationship with the in Tainan Science 2012~October 31, agreement by both Display Corp. counterparty Park 2018 parties

Basis or reference used in Other setting the price commitments

Reason for disposal

Considering the efficiency Negotiated based on of assets usage and appraisal report and activating assets approved by the Board of Directors

Note 1: The appraisal result should be presented in the ‘Basis or reference used in setting the price’ column if the real estate disposed of should be appraised pursuant to the regulations.

Note 2: Paid-in capital referred to herein is the paid-in capital of parent company.

In the case that shares were issued with no par value or a par value other than NT$10 per share, the 20 % of paid-in capital shall be replaced by 10% of equity attributable to owners of the parent in the calculation.

Note 3: Date of the event referred to herein is the date of contract signing date, date of payment, date of execution of a trading order, date of title transfer, date of board resolution, or other date that can confirm the counterparty and the monetary amount of the transaction, whichever is earlier.

Note 4: The amount of expected income from disposal is about $194,426. Actual income from disposal will be net of related expenses and will not be recorded until the transaction is completed.

Table 3

Table 4

HannsTouch Solution Incorporated

Information on investees

Year ended December 31, 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT AS OTHERWISE INDICATED)

Investor	Investee	Location	Main business activities	Initial investment amount	Shares held as at December 31,2020	Net income of investee for the year ended December 31,2020	Investment income (loss) recognised by the Company for the year ended December 31,2020 Note
				Balance as at December 31,2020 Balance as at December 31, 2019	No. of shares (in thousands) Ownership (%) Book value
HannsTouch Solution Incorporated	Richest Investment Ltd. Golden Apple Investment Corporation Glory Stone Co., Ltd.	Cayman Islands Taiwan Taiwan	Investment Investment Hotel business	148,434 $ 148,434 $ 150,000 150,000 220,000 220,000	4,500 100.00 - $ 15,000 100.00 134,684 22,000 42.31 214,450	- $ 15,679) ( 16,888	- $ Note 1 15,679) ( 〞 20,885 〞

Note 1: The Company’s subsidiary.

Table 4

Table 5

HannsTouch Solution Incorporated

Information on investments in Mainland China

Year ended December 31, 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT AS OTHERWISE INDICATED)

Accumulated Amount remitted from Taiwan to Investment income amount of Mainland China/Amount remitted Net income of (loss) recognised Book value of investment Accumulated amount of back to Taiwan for the year ended Accumulated amount of investee for Ownership held by the Company investments in income remitted remittance from Taiwan December 31, 2020 remittance from Taiwan the year ended by the Company for the year ended Mainland China back to Taiwan Main business Paid-in capital Investment to Mainland China as of Remitted to Remitted back to to Mainland China as of December 31, (direct or December 31, as of December as of December Investee in Mainland China activities (Note 1) method January 1, 2020 Mainland China Taiwan December 31, 2020 2020 indirect) 2020 (Note 3) 31, 2020 (Note 3) 31, 2020 Note NanJin GuanXin Co. Ltd. Development and $ 469,950 Note 2 $ 148,434 $ - $ - $ 148,434 $ - 31.12 $ - $ - $ - production of PMMA, light guide plate and related components

NanJin GuanXin Co. Ltd.

Companyname	Accumulated amount of remittance from Taiwan to Mainland China as of December 31,2020(Note 4)	Investment amount approved by the Investment Commission of the Ministry of Economic Affairs(MOEA)	Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA
HannsTouch Solution Incorporated	1,789,949 $	1,721,665 $	5,826,413 $

Note 1: Translated from historical exchange rate.

Note 2: Reinvested through Richest Investment Ltd. Note 3: In 2013, the Company’s investment in NanJin GuanXin Co. Ltd. has been reduced to $0.

Note 4: NTD amount was translated from historical exchange rate of actual remittance.

Table 5

HannsTouch Solution Incorporated

Major shareholders information

December 31, 2020

Table 6

Name of major shareholders	Shares	Shares
	Name of shares held(in thousands)	Ownership (%)
Hannstar Display Corp. Huali Investment Corp.	214,639 59,440	26.60% 7.36%

Table 6