ICHIA — Annual Report 2020

Nov 12, 2020

Stock Code: 2402

ICHIA TECHNOLOGIES INC. and subsidiaries

Consolidated Financial Statements and Independent Auditor’s Report 2020 and 2019

Address: No. 268, Huaya 2nd Rd., Guishan Dist., Taoyuan City TEL: (03)3973345

• 1 -

§Table of Contents§

								Notes to the	Notes to the	Notes to the	Notes to the
										Financial
			Item			Page			Statements
i.	Cover					1				-
ii.	Table of Contents					2				-
iii.	Statement of Consolidated Financial					3				-
	Statements of Affiliated			Enterprises
iv.	Independent Auditor’s Report					4～8				-
v.	Consolidated Balance Sheets					9				-
vi.	Consolidated Comprehensive Income				10～11					-
	Statements
vii.	Consolidated Statements of Changes in Equity					12				-
viii.	Consolidated Cash Flow Statements				13～14					-
ix.	Notes	to the Consolidated Financial
	Statements
	(i)	Company	History			15				1
	(ii)	Date and Procedure for Approval of				15				2
		Financial Statements
	(iii)	Application of New and Revised			15～17					3
		Standards and Interpretations
	(iv)	Summary	of Significant Accounting		17～30					4
		Policies
	(v)	Significant Accounting Judgments and				30				5
		Estimations, and Main Sources of
		Assumption Uncertainties
	(vi)	Summary	of Significant Accounting		31～70					6–27
		Items
	(vii)	Related Party Transactions				70				28
	(viii)	Pledged Assets				71				29
	(ix)	Significant Contingent Liabilities and				71				30
		Unrecognized Contract Commitments
	(x)	Significant Disaster Loss				-				-
	(xi)	Significant Subsequent Events				-				-
	(xii)	Others			71～73					31, 32
	(xiii)	Additional Disclosure
		1. Information on Significant			73、76～81,					33
		Transactions			83～84
		2. Information on Investees			73、76～81,					33
					83～84
		3. Information on investment in			74、79、82					33
		Mainland China
		4. Information on major shareholders			74、85					33
	(xiv)	Segment Information				74				34

• 2 -

Statement of Consolidated Financial Statements of Affiliated Enterprises

The companies to be included in the consolidated financial statements of affiliated enterprises in 2020 (from January 1, 2020 to December 31, 2020) pursuant to the “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises” are the same as those to be included in the consolidated financial statements of the parent company and subsidiaries pursuant to the IAS 10. Further, the related information to be disclosed in the consolidated financial statement of affiliated enterprises has been disclosed in the said consolidated financial statements of parent company and subsidiaries. Accordingly, it is not for the to the consolidated financial statements of necessary Company prepare affiliated enterprises separately.

Declared by:

Company name: ICHIA TECHNOLOGIES INC.

Corporate director: Creative Investment Co., Ltd. Representative: HUANG CHIU YUNG

March 16, 2021

• 3 -

Independent Auditop’s Repopt

To the Board of Directors and Shareholders of ICHIA TECHNOLOGIES INC.:

Audit opinions

We have audited the accompanying consolidated balance sheet of ICHIA TECHNOLOGIES INC. and subsidiaries as of December 31, 2020 and 2019, and the related consolidated comprehensive income statements, consolidated statement of changes in shareholders’ equity, consolidated cash flow statements, and notes to the consolidated financial statements (including significant accounting policies) for the years then ended.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of ICHIA TECHNOLOGIES INC. and subsidiaries as of December 31, 2020 and 2019, and its consolidated financial performance and cash flows for the years ended December 31 2020 and 2019, in conformity with the requirements of regulations governing the preparation of financial statements by securities issuers and International Financial Reporting Standards, International Accounting Standards, and Interpretations issued by the Financial Supervisory Commission.

Basis fop opinions

We conclude our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and the Generally Accepted Auditing Standards. Our responsibilities under those standards are further described in the responsibilities of auditors for the audit of the consolidated financial statements. We are independent of ICHIA TECHNOLOGIES INC. and subsidiaries in accordance with the Code of Professional Ethics for Certified Public Accountants, and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

• 4 -

Key audit matteps

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the 2020 consolidated financial statements of ICHIA TECHNOLOGIES INC. and subsidiaries. These matters were addressed in the content of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide separate opinions on those matters.

Key audit matters of the 2020 consolidated financial statements of ICHIA TECHNOLOGIES INC. and subsidiaries were as follows:

Authenticity of revenues recognized from sales to specific customers in triangular trade

ICHIA TECHNOLOGIES INC. and subsidiaries manufacture a wide range of flexible printed circuit boards and mechanism integrated components (MVI) for the automotive and consumer electronics markets. Its sales patterns include domestic sales, direct export sales and triangular trade. Revenues from sales of triangular trade are recognized when the goods are delivered to a third-party forward designated by the customer and the risks and rewards are transferred. Since the aforementioned revenue recognition process involves manual work, which may result in improper revenue recognition, the authenticity of the sales revenues recognized from triangle trade for customers with more increase in sales revenue and are included as significant growth key audit matters in this year’s consolidated financial statements.

We have also performed the following major audit procedures with respect to the above key audit matters:

1. Understand and test the effectiveness of the design and implementation of the internal control system related to revenue recognition.

2. Obtain samples of sales revenues from triangular trade with specific customers for the whole and check the related documents of trade year, triangular including

invoices and customs declarations with the recorded amounts to test the authenticity of the sales revenues recognized.

1. Examine whether there are any abnormalities in the collection after the credit period granted to specific customers.

Othep Matteps

We have also audited the stand-alone financial statements of ICHIA TECHNOLOGIES INC. as of and for the year ended December 31, 2020 and 2019 on which we have issued an unqualified opinion. Responsibilities of Management and Those in Chapge of Govepnance of the Consolidated Financial Statements

• 5 -

The of is to consolidated responsibility management prepare fairly presented financial statements in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards, International Accounting Standards interpretations, and announcements of interpretations recognized and published by the Financial Supervisory Commission and maintain necessary internal control related to the preparation of consolidation of financial statements in order to ensure material misstatement caused fraud or error by does not exist in the consolidated financial statements.

In preparing the consolidated financial statements, the management is also responsible for assessing the ability of ICHIA TECHNOLOGIES INC. and subsidiaries as a going concern, disclosing as applicable matters related to a going concern and using the going concern basis of accounting, unless the management either intends to liquidate ICHIA TECHNOLOGIES INC. and subsidiaries or to cease operations, or has no other realistic alternative but to do so.

Those in charge of governance (including the Auditing Committee) are responsible for overseeing the reporting process of the financial statements of ICHIA TECHNOLOGIES INC. and subsidiaries.

Auditop’s Responsibilities fop the Audit of the Consolidated Financial Statements

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

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

1. Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error; design and perform countermeasures for assessed risks; and obtain evidence that is sufficient and appropriate to provide a basis of audit opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may

2. 6 -

involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

1. 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 of an on the effectiveness of the internal control

purpose expressing opinion effective in ICHIA TECHNOLOGIES INC. and subsidiaries.

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

2. Conclude the appropriateness of the use of the going concern basis of accounting by the management, and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on ICHIA TECHNOLOGIES INC. and subsidiaries to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosure is inappropriate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause ICHIA TECHNOLOGIES INC. and subsidiaries to cease as a going concern.

3. Evaluate the overall presentation, structure, and content of the consolidated financial statements (including related notes), whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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

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

We also provide those in charge of governance with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be

• 7 -

thought to affect on our independence, and other matters (including related protective measures).

From the matters communicated with those in charge of governance, we determine those matters that were of most significance in the audit of the 2020 consolidated financial statements of ICHIA TECHNOLOGIES INC. and subsidiaries and are therefore the key audit matters. We describe these matters in our auditor’s 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.

Deloitte Touche Tohmatsu Limited CPA Hsieh Ming-Chung CPA Liu Shu-Lin

Financial Supervisory Commission Financial Supervisory Commission approval document approval document Jin-Guan-Zheng-Shen-Zi No. Jin-Guan-Zheng-Shen-Zi No. 1000028068 1050024633

March 16, 2021

• 8 -

ICHIA TECHNOLOGIES, INC. AND SUBSIDIARIES

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

				December	31,	31,	2020	2020	2020						December	31,	31,	2019	2019	2019
Assets				Amount					％						Amount					％
Current assets
Cash and cash equivalents（Notes 4 and 6）			$	1,868,780					20					$	1,841,401					22
Current financial assets at fair value through profit or loss
（Notes 4 and 7）				53,861						1					77,767						1
Current financial assets at amortised cost（Notes 4 and 8）				471,907						5					21,085						-
Accounts receivable, net（Notes 4 and 9）				2,468,869					26						2,217,518					26
Current tax assets（Notes 4 and 23）				634						-					16,135						-
Current inventories（Notes 4 and 10）				957,653					10						675,589						8
Other current assets（Notes 15）				139,110						1					120,698						2
Total current assets				5,960,814					63						4,970,193					59
Non-current assets
Non-current financial assets at amortised cost（Notes 4 and
8）				170,247						2					130,992						2
Property, plant and equipment（Notes 4 and 12）				2,783,419					30						2,921,587					34
Right-of-use assets（Notes 13）				131,803						1					131,066						2
Deferred tax assets（Notes 4 and 23）				198,028						2					198,942						2
Non-current Defined benefit assets, net（Notes 4 and 19）				19,789						-					19,866						-
Other non-current assets（Notes 15）				196,134						2					116,609						1
Total non-current assets				3,499,420					37						3,519,062					41
Total assets			$	9,460,234					100					$	8,489,255					100
Liabilities and equity
Current liabilities
Short-term loans（Notes 4 and 16）			$	1,445,882					15					$	673,844						8
Current financial liabilities at fair value through profit or
loss（Notes 4 and 7）				-						-					98						-
Accounts payable（Notes 17）				1,693,628					18						1,218,582					14
Other payables（Notes 18）				248,804						3					236,991						3
Current tax liabilities（Notes 4 and 23）				8,250						-					7,839						-
Current lease liabilities（Notes 4 and 13）				1,266						-					-						-
Current contract liabilities（Notes 21）				7,114						-					5,586						-
Current portion of long-term debt payable（Notes 4 and 16）				167,191						2					165,066						2
Other current liabilities（Notes 18）				27,194						-					23,004						-
Total current liabilities				3,599,329					38						2,331,010					27
Non-current liabilities
long-term debt payable（Notes 4 and 16）				126,527						2					293,996						4
Deferred tax liabilities（Notes 4 and 23）				22,391						-					-						-
Non-current lease liabilities（Notes 4 and 13）				1,959						-					-						-
Guarantee deposit received				6,544						-					5,948						-
Total non-current liabilities				157,421						2					299,944						4
Total liabilities				3,756,750					40						2,630,954					31
Equity（Notes 20）
Ordinary share				3,075,366					32						3,075,366					36
Capital surplus				2,086,827					22						2,163,711					26
Retained earnings
Legal reserve				573,593						6					550,914						6
Special reserve				335,706						4					137,012						2
Unappropriated retained earnings				88,717						1					267,004						3
Total retained earnings				998,016					11						954,930					11
Other equity		(		295,397	)			(		3	)		(		335,706	)			(		4	)
Treasury shares		(		161,328	)			(		2	)				-						-
Total equity				5,703,484					60						5,858,301					69
Total liabilities and equity			$	9,460,234					100					$	8,489,255					100

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

Director: Chuang Yi Investment Co., Ltd Managerial officer: Tseng Kung-Sheng Representative: Huang Chiu-Yung.

Accounting officer: Cheng Ching-Yi

9

ICHIA TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollaps, Except Eapnings Pep Shape)

			2020	2020	2020								2019	2019	2019
			Amount					％					Amount					％
Operating revenue（Notes 4
and 21）
Sales revenue			$ 5,582,757					101					$ 6,215,151					101
Sales returns	(		15,409)					-			(		24,510)					-
Sales discounts and
allowances	(		64,506	)		(		1	)		(		41,695 )			(		1 )
Net sales revenue			5,502,842					100					6,148,946					100
Operating costs（Notes 4、
10 and 22）	(		4,758,407	)		(		87	)		(		5,284,735 )			(		86 )
Gross profit from
operations			744,435					13					864,211					14
Operating expenses（Notes
22）
Selling expenses			176,257					3					173,499					3
Administrative
expenses			210,483					4					237,307					4
Research and
development
expenses			176,144					3					165,050					3
Expected credit
Impairment
loss(gain)	(		14,136	)				-					7,560					-
Total operating
expenses			548,748					10					583,416					10
Net operating income			195,687					3					280,795					4
Non-operating income and
expenses（Notes 22）
Interest income			23,732					-					15,245					-
Other income			39,221					1					22,716					-
Other gains and losses,
net	(		53,517)			(		1)			(		12,218)					-
Finance costs, net	(		15,110	)				-			(		25,499 )					-
Total non-operating
income and expenses	(		5,674	)				-					244					-

10

			2020	2020	2020								2019	2019	2019
			Amount					％					Amount					％
Income before income tax		$	190,013					3				$	281,039					4
Income tax expense（Notes
4 and 23）	(		69,823	)		(		1	)		(		54,247 )			(		1 )
Net income			120,190					2					226,792					3
Other comprehensive
income
Components of other
comprehensive income that
will not be reclassified to
profit or loss
Gains (losses) on
remeasurements of defined
benefit plans（Notes 19）	(		220)					-			(		361)					-
Components of other
comprehensive income that
will be reclassified to profit
or loss
Exchange differences
arising on translation of
foreign operations			40,309					1			(		198,694 )			(		3 )
Other comprehensive loss
for the year, net of income
tax			40,089					1			(		199,055 )			(		3 )
Total comprehensive
income		$	160,279					3				$	27,737					-
Eearnings per share（Notes
24）
Basic earnings per share		$	0.40									$	0.74
Diluted earnings per share		$	0.39									$	0.74

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

Director: Chuang Yi Investment Co., Ltd Managerial officer: Tseng Accounting officer: Cheng Ching-Yi Representative: Huang Chiu-Yung. Kung-Sheng

11

ICHIA TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(In Thousands of New Taiwan Dollaps)

																															Others
																													Exchange
	Capital Stock -					Common Stock														Retained Earnings									differences on
			Shares					Amount			Capital Surplus					Legal reserve				Special reserve				Unappropriated					translation of					Treasury shares						Total equity
	(In		Thousands)																					retained earning					foreign financial
																													statements
BALANCE, JANUARY 1, 2019			317,267					$ 3,172,676					$ 2,219,748				$	536,403			$	-			$	379,342			( $		137,012	)		( $		186,825	)				$ 5,984,332
Appropriations of earnings
Legal capital reserve			-					-					-					14,511				-		(		14,511	)				-					-					-
Special capital reserve			-					-					-					-				137,012		(		137,012	)				-					-					-
Cash dividends to
shareholders			-					-					-					-				-		(		153,768	)				-					-			(		153,768	)
Net income in 2019			-					-					-					-				-				226,792					-					-					226,792
Other comprehensive income
(loss) in 2019, net of income tax			-					-					-					-				-		(		361	)		(		198,694	)				-			(		199,055	)
Total comprehensive income (loss)
in 2019			-					-					-					-				-				226,431			(		198,694	)				-					27,737
Retirement of treasury share	(		9,731	)		(		97,310	)		(		56,037	)				-				-		(		33,478	)				-					186,825					-
BALANCE, DECEMBER 31, 2019			307,536					3,075,366					2,163,711					550,914				137,012				267,004			(		335,706	)				-					5,858,301
Appropriations of earnings
Legal capital reserve			-					-					-					22,679				-		(		22,679	)				-					-					-
Special capital reserve			-					-					-					-				198,694		(		198,694	)				-					-					-
Cash dividends to
shareholders			-					-			(		76,884	)				-				-		(		76,884	)				-					-			(		153,768	)
Purchase of treasury shares			-					-					-					-				-				-					-			(		161,328	)		(		161,328	)
Net income in 2020			-					-					-					-				-				120,190					-					-					120,190
Other comprehensive income
(loss) in 2020, net of income tax			-					-					-					-				-		(		220	)				40,309					-					40,089
Total comprehensive income (loss)
in 2020			-					-					-					-				-				119,970					40,309					-					160,279
BALANCE, DECEMBER 31, 2020			307,536					$ 3,075,366					$ 2,086,827				$	573,593			$	335,706			$	88,717			($		295,397	)		($		161,328	)				$ 5,703,484
The accompanying notes are an integral part of			the consolidated financial statements.
Director: Chuang Yi Investment Co., Ltd								Managerial officer: Tseng						Kung-Sheng												Accounting officer: Cheng Ching-Yi
Representative: Huang Chiu-Yung.

12

ICHIA TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollaps)

			2020					2019
Cash flows from operating activities
Profit (loss) before tax		$	190,013				$	281,039
Adjustments for:
Expected credit loss (gain)	(		14,136)					7,560
Depreciation expense			406,411					445,825
Net loss (gain) on financial
assets or liabilities at fair
value through profit or loss	(		54,434)			(		7,381)
Interest expense			15,110					25,499
Interest income	(		23,732)			(		15,245)
Reversal of impairment loss on
inventories	(		4,804)			(		19,406)
Loss (gain) on disposal of
property, plan and equipment	(		2,680)			(		6,827)
Impairment loss on property,
plant and equipment			92					2,709
Changes in operating assets and
liabilities:
Notes and accounts receivable,
net	(		237,228)					620,982
Inventories	(		281,429)					208,508
Other current assets	(		15,254)					80,178
Other operating assets	(		143)			(		195)
Contract liabilities			1,528			(		1,370)
Accounts payable			475,046			(		211,325)
Other payable			11,734			(		49,140)
Other current liabilities			4,190					12,179
Cash generated from operations			470,284					1,373,590
Interest received			20,574					11,350
Interest paid	(		15,031)			(		26,893)
Income taxes paid	(		30,606	)		(		49,672 )
Net cash generated by operating
activities			445,221					1,308,375
Cash flows from investing activities
Acquisition of financial assets at
amortised cost	(		500,547)			(		150,229)
Proceeds from disposal of financial
assets at amortised cost
			6,718					92

13

			2020					2019
Acquisition of financial assets at fair
value through profit or loss	(		1,923,238)			(		2,903,489)
Proceeds from disposal of financial
assets at fair value through profit
or loss			$ 2,002,398					$ 3,188,168
Acquisition of property, plant and
equipment	(		28,983)			(		70,168)
Proceeds from disposal of property,
plant and equipment			17,363					8,696
Increase in refundable deposits	(		1,758)			(		17,254)
Decrease in refundable deposits			2,292					3,329
Increase in other non-current assets	(		16,855)			(		4,727)
Increase in prepayments for business
facilities	(		291,609	)		(		202,627 )
Net cash used in investing
activities	(		734,219	)		(		148,209 )
Cash flows from financing activities
Increase in short-term loans			6,183,464					3,436,688
Decrease in short-term loans	(		5,404,203)			(		3,862,560)
Repayments of long-term debt	(		165,344)			(		340,809)
Increase in guarantee deposits
received			826					543
Decrease in guarantee deposits
received	(		289)			(		5,260)
Cash dividends paid	(		153,768)			(		153,768)
Payments to acquire treasury shares	(		161,328)					-
Payments of lease liabilities	(		621	)				-
Net cash used in financing
activities			298,737			(		925,166 )
Effect of exchange rate changes on cash
and cash equivalents			17,640			(		150,399 )
Net increase in cash and cash equivalents			27,379					84,601
Cash and cash equivalents at beginning
of period			1,841,401					1,756,800
Cash and cash equivalents at end of
period			$ 1,868,780					$ 1,841,401

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

Director: Chuang Yi Investment Co., Ltd Managerial officer: Tseng Kung-Sheng Accounting officer: Cheng Ching-Yi Representative: Huang Chiu-Yung.

14

ICHIA TECHNOLOGIES INC. and subsidiaries

Notes to the Consolidated Financial Statements

January 1 to December 31, 2020 and 2019

(Amounts NTD thousand, unless otherwise stated)

i. Company History

ICHIA TECHNOLOGIES INC. (hereinafter referred to as the Company) was established in November 1989 to manufacture, process, and trade various components (conductive silicone elastomers, plastic keys, keyboard assemblies, input devices, and flexible printed circuit boards) and materials for electronics, home appliances, electronical engineering, electrical equipment, communications (telecommunications), and computers, as well as to import and export domestic and foreign products and to engage in the agency, distribution, tender and quotation business.

The Company’s shares have been listed on the Taiwan Stock Exchange since January 14, 2000.

The consolidated financial statements are presented in New Taiwan dollars (NTD), which is the functional currency of the Company.

ii. Date and Procedure for Approval of Financial Statements

The consolidated financial statements were approved by the Board of Directors on March 16, 2021.

iii. Application of New and Revised Standards and Interpretations

• (i) First-time application of International Financial Reporting Standards (“IFRSs”), International Accounting Standards (“IAS”), Interpretations and referred to as

• (“IFRICs”) Interpretations (“SICs”) (hereinafter “IFRSs”) endorsed by the Financial Supervisory Commission (“FSC”) and issued to be effective

The adoption of the IFRSs endorsed and issued into effect by the FSC will not result in significant changes in the Consolidated Company’s accounting policies:

• (ii) IFRSs endorsed by the Financial Supervisory Commission (hereinafter referred to as “FSC”) applicable for 2021

• The new/amended/revised standards or Effective date of IASB inter retations ublication p p

• Amendment to IFRS 4 “Extension of Provisional Effective from the date Exemption for Application of IFRS 9” of publication

15

The new/amended/revised standards or Effective date of IASB inter retations ublication p p Amendments to the IFRS 9, IAS 39, and IFRS 7, Effective for annual IFRS 4 and IFRS 16 “Interest Rate Benchmark reporting periods Reform - Phase II” beginning after January 1, 2021 Amendment to IFRS 16 “Rent Reduction Effective for annual Associated with COVID-19 Pandemic” reporting periods beginning after June 1, 2020

• (iii) The IFRSs released by the IASB but not yet endorsed and issued into effect by the FSC

The new/amended/revised standards or Effective date of IASB interpretations publication (Note 1) “Annual Improvements 2018–2020 Cycle” January 1, 2022 (Note 2) Amendment to IFRS 3 “Update the index of the January 1, 2022 (Note 3) conceptual framework” Amendment to IFRS 10 and IAS 28 “Sale or Undecided Contribution of Assets between an Investor and its Associate or Joint Venture” IFRS 17 “Insurance Contracts” January 1, 2023 Amendment to IFRS 17 January 1, 2023 Amendment to IAS 1 “Classification of January 1, 2023 Liabilities as Current or Noncurrent” Amendment to IAS 1 “Disclosure of Accounting January 1, 2023 (Note 6) Policies” Amendment to IAS 8 “Definition of Accounting January 1, 2022 (Note 7) Estimates” Amendment to IAS 16 “Property, Plant and January 1, 2022 (Note 4) Equipment: Price Before Reaching the Intended State of Use” Amendment to IAS 37 “Onerous Contracts - January 1, 2022 (Note 5) Cost of Performing Contracts”

Note 1: Unless otherwise stated, the aforementioned new/amended/revised standards or interpretation are effective for annual reporting periods beginning after the respective dates.

• Note 2: The amendment to IFRS 9 applies to swaps or changes in the terms of financial liabilities that occur in annual reporting periods beginning after January 1, 2022; the amendment to IAS 41 “Agriculture” applies to fair value measurements in annual reporting periods beginning

16

after January 1, 2022; and the amendment to IFRS 1 “First-time Adoption of IFRSs” applies retrospectively to annual reporting periods beginning after January 1, 2022.

• Note 3: This amendment applies to business mergers for which the acquisition date falls within the annual reporting period after January 1, 2022.

• Note 4: This amendment applies to plant, property and equipment that begins to operate in the manner such as location and condition expected by management after January 1, 2021.

• Note 5: This amendment applies to contracts with unfulfilled obligations as of January 1, 2022.

• Note 6: This amendment will be prospective application for annual reporting periods beginning after January 1, 2023.

• Note 7: This amendment applies to changes in accounting estimates and changes in accounting policies that occur in annual reporting periods beginning after January 1, 2023.

The Consolidated Company will continue to evaluate the effect of the amendment to other IFRSs on the financial positions and performance of the Consolidated Company to the date the consolidated financial statements are approved and released, and will make appropriate disclosure after the evaluation.

iv. Summary of Significant Accounting Policies

(i) Compliance Statement

The consolidated financial statements are prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRSs approved and published by the FSC.

• (ii) Basis of preparation

The consolidated financial statements were prepared on the historical cost basis, except for financial instruments measured at fair value and net defined benefit liabilities recognized at the present value of the defined benefit obligation less the fair value of plan assets.

The evaluation of fair value could be classified into Level 1 to Level 3 by the observable intensity and importance of the related input value:

1. Level 1 input value: refers to the quotation of the same asset or liability in an active market as of the evaluation date (before adjustment).

17

1. Level 2 input value: refers to the direct (the price) or indirect (inference of price) observable input value of asset or liability further to the quotation of Level 1.

2. Level 3 input value: the unobservable input value of asset or liability.

3. (iii) Standards in differentiating current and noncurrent assets and liabilities Current assets include:

4. Assets held primarily for trading purposes;

5. Assets expected to be realized within 12 months of the balance sheet date; and

6. Assets expected to be realized within 12 months of the balance sheet date; and

Current liabilities include:

1. Liabilities held primarily for trading purposes;

2. Liabilities due for settlement within 12 months after the balance sheet date, and

3. Liabilities whose settlement deadline cannot be unconditionally deferred until at least 12 months after the balance sheet date.

4. Those that are not current assets or liabilities above are classified as

5. noncurrent assets or liabilities.

6. (iv) Basis of consolidation

The consolidated financial statements include the financial statements of the Company and entities controlled by the Company (subsidiaries). The consolidated comprehensive income statements include the operating profits or losses of the acquired or disposed subsidiaries for the period from the date of acquisition or up to the date of disposal. The subsidiaries’ financial statements have been properly adjusted to make the accounting policies consistent with the accounting policies of the Consolidated Company. In preparing the consolidated financial statements, all inter-company transactions, account balances, gains and losses have been eliminated.

For details of subsidiaries, shareholding percentage and business scope, see Note 11 and Exhibit 6.

• (v) Foreign currency

For the transactions conducted in a other than the business currency entity’s functional currency (foreign currency), it is to be translated to the

18

functional currency in accordance with the exchange rate on the transaction date when preparing the stand-alone financial statements.

Foreign currency monetary items are translated at the closing rate on each balance sheet date. The exchange differences arising from the settlement of monetary items or translating monetary items are recognized in the current profit or loss, except for the following:

1. Exchange differences arising from hedging transactions to hedge part of the exchange rate risk; and

2. For a monetary item receivable from or payable to a foreign operation, of which the settlement is neither planned nor likely to occur in the foreseeable future (and therefore forms part of the net investment in the foreign operation), the exchange difference is recognized initially in other income and is reclassified to or comprehensive from equity profit

loss upon disposal of the net investment.

The foreign non-currency items measured at fair value are translated in accordance with the exchange rate on the fair value determination date and the exchange difference is booked as profit or loss in the period. However, for the changes in fair value recognized in other comprehensive income, the exchange difference is recorded in other comprehensive income.

The items measured at historical cost are foreign non-currency translated in accordance with the exchange rate on the transaction date without the need for a translation again.

Upon preparation of the consolidated financial reports, the assets and liabilities of overseas operating institutions (including the subsidiaries and affiliates in the countries of business operation or those using currencies different from the Company’s) were converted to NTD based on the exchange rate quoted on every balance sheet date. Income and expense items are translated at the average exchange rate for the period and the exchange differences are booked in other comprehensive income.

If the Consolidated of its entire interest in a Company disposes equity foreign operation, or disposes of part of its equity interest in a subsidiary that includes a foreign operation and loses control, or the retained equity interest after disposing of a joint agreement of a foreign operation or an affiliate is a financial asset and is accounted for as a financial instrument, all cumulative

19

translation differences attributable to the Company’s shareholders and related to the foreign operation are reclassified to profit or loss.

If the partial disposal of a foreign operating subsidiary does not result in a loss of control, the accumulated exchange differences are included in the non-controlling interests of the subsidiary on a pro rata basis, but are not recognized in profit or loss. In the case of any other partial disposal of foreign operations, the cumulative exchange differences are reclassified to profit or loss in proportion to the disposal.

(vi) Inventories

Inventories include raw materials, supplies, semi-finished goods, finished work in and in-transit. Inventories are valued in goods, process accordance with the lower of cost or net cash value. When comparing cost and net cash value, except for the homogeneous inventories, it is based on the itemized lower of cost or net cash value. Net realizable value refers to the estimated sale price under normal circumstances net of the estimated cost needed to complete the project and the estimated expenses needed to complete the sale. Inventories are valued at standard costs before book closing and adjusted upon book closing to approximate cost calculated on a weighted-average basis.

• (vii) Property, plant and equipment

Property, plant, and equipment shall be recognized at cost and subsequently measured at cost less accumulated depreciation and accumulated impairment.

Except for land owned by the Company, which is not depreciated, property, plant and equipment are depreciated separately over their useful lives on a straight-line basis for each significant component. If the lease period is shorter than the useful life, depreciation is provided over the lease period. The Consolidated Company reviews the estimated useful lives, residual values and depreciation methods at least at the end of each year and defers the effect of changes in prospective application accounting estimates.

In removing property, plant, and equipment from the book, the difference between the net proceeds of disposition and the book value shall be recognized as profit or loss.

(viii) Impairment of property, plant and equipment, right-of-use assets, intangible assets and assets related to contract costs.

20

The Consolidated Company assesses at each balance sheet date whether there is any indication that property, plant and equipment, right-of-use assets, intangible assets and assets related to contract costs may have been impaired. If any indication of impairment exists, the recoverable amount of the asset is estimated. If the recoverable amount of an individual asset cannot be estimated, the Consolidated Company estimates the recoverable amount of the unit to which the asset Shared assets are cash-generating belongs. allocated to the smallest of units on a reasonable and group cash-generating consistent basis.

The recoverable amount is the higher of the fair value less costs to sell and its value in use. If the recoverable amount of an asset or cash-generating unit is less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount, and the impairment loss is recognized in profit or loss.

When an impairment loss is subsequently reversed, the carrying amount of the asset or cash-generating unit is increased to the revised recoverable amount, provided that the increased carrying amount does not exceed the carrying amount (net of amortization or depreciation) that would have been determined if the impairment loss had not been recognized in prior years for that asset or cash-generating unit. Reversal of impairment loss is recognized in profit or loss.

(ix)

Financial instruments

Financial assets and financial liabilities are recognized in the consolidated balance sheets when the Consolidated Company becomes a party to the contracts of such instruments.

For the initial recognition of the financial assets and financial liabilities, if the financial assets or financial liabilities are not measured at fair value through profit or loss, it is measured at fair value plus transaction cost that is directly attributable to the acquisition or issuance of financial assets or financial liabilities. The transaction cost directly attributable to the acquisition or issuance of financial assets or financial liabilities that are measured at fair value through profit or loss is immediately recognized in profit or loss.

1. Financial assets

21

The customary transaction of financial assets is recognized and derecognized in accordance with the trade date accounting.

• (1) Type of measurement

The types of financial assets held by the Consolidated Company are financial assets measured at fair value through profit or loss and financial assets at amortized cost.

A. Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss include financial assets that are mandatorily measured at fair value through profit or loss and those designated as at fair value through profit or loss. Financial assets mandatorily measured at fair value through profit or loss include investments in equity instruments investments not designated by the Consolidated Company as being measured at fair value through other comprehensive income, and investments in debt instruments not qualified for classification as being measured at amortized cost or at fair value through other comprehensive income.

Financial assets at fair value or loss are through profit measured at fair value. For the determination of fair value, please refer to Note 27.

B. Financial assets at amortized cost

The Consolidated Company’s financial assets, if meeting both of the following conditions, are classified as financial assets at amortized cost:

• a. The Company’s financial assets, if meeting both of the following conditions, are classified as financial assets at amortized cost:

• b. The Company’s financial assets, if meeting both of the following conditions, are classified as financial assets at amortized cost:

Financial assets (including cash and cash equivalents, accounts receivable measured at amortized cost) after initial recognition, are measured at their total carrying amount determined using the effective interest method, less amortized

22

cost of any impairment loss, with any foreign currency exchange gain or loss recognized in profit or loss.

Interest income is calculated by multiplying the effective interest rate by the total carrying amount of the financial assets, except for the following two cases:

• a. Interest income on financial assets that are credit-impaired

• or creation is calculated the

• upon acquisition using credit-adjusted effective interest rate multiplied by the amortized cost of the financial assets.

• b. Interest income on financial assets that are not credit-impaired upon acquisition or creation but become credit-impaired subsequently is calculated using the effective interest rate multiplied by the amortized cost of the financial assets from the next reporting period after the impairment.

Credit-impaired financial assets are those for which the issuer or the debtor has experienced significant financial difficulties, defaulted, or where it is probable that the debtor will declare or other financial or bankruptcy reorganization, where an active market for the financial assets has disappeared due to financial difficulties.

Cash include time that are equivalents deposits highly liquid, readily convertible into fixed amount of cash with minimal risk of changes in value within 3 months from the acquisition date and are used to meet short-term cash commitments.

(2) Impairment of financial assets and contract assets

The Consolidated Company assesses impairment losses on financial assets measured at amortized cost (including accounts receivable) based on expected credit loss on each balance sheet date.

An allowance for losses is recognized for accounts receivable based on the expected credit loss over the duration. Other financial assets shall be evaluated for increase of any significant risk from the day of initial recognition. If none is found, recognize for provision for anticipated credit loss along a period of 12

23

months. If it is, recognize for provision of anticipated credit risk within the lifetime of the assets.

Anticipated credit loss is the weighted average loss of credit on the basis of the weight of the risk of default. Anticipated credit loss in a period of 12 months means the expected loss of credit from the financial instruments within 12 months due to default. Anticipated credit loss with the lifetime of the financial instruments means the expected loss of credit from the financial instruments within the lifetime of these financial instruments.

For internal credit risk the management purposes, Consolidated Company, without considering the collateral, determines the following circumstances indicating that a default has occurred on the financial instrument:

• A. There is internal or external information indicating that the debtor is no longer able to pay their debts.

• B. Payments are overdue for more than 90 days, unless there is reasonable and supporting information showing that the delayed default benchmark is more appropriate.

All impairment losses on financial assets are accounted for by reducing the carrying amount through an allowance account.

• (3) The derecognition of financial assets

The Consolidated Company has financial assets derecognized only when the contractual rights from the cash flows of a financial asset become invalid or when the financial assets are transferred, and almost all the risks and rewards of the asset ownership have been transferred to other enterprises.

When a particular entry of financial assets measured at amortized cost is removed, the difference between its book value and consideration shall be recognized as profit or loss. When investments in debt instruments measured at fair value through other comprehensive income are derecognized as a whole, the difference between the carrying amount and the sum of the consideration received plus any cumulative gain or loss in other income is as recognized comprehensive recognized profit or loss. When investments in equity instruments measured at fair

24

value income are through comprehensive entirely derecognized, the accumulated profit or loss shall be directly transferred to retained earnings without being classified as profit or loss.

1. Financial liabilities

2. (1) Subsequent measurement

All financial liabilities are measured at amortized cost using the effective interest method, except for the following: Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading.

Financial liabilities held for trading are measured at fair value, and the related gains or losses are recognized in other gains and losses. The fair value is determined as described in Note 27.

• (2) Derecognition of financial liabilities

When derecognizing financial liabilities, the difference between the book amount and the consideration paid (including any transferred non-cash assets or assumed liabilities) is recognized as profit or loss.

3. Derivatives

The derivatives entered into by the Consolidated Company include forward exchange contracts, which are used to manage the Consolidated Company’s interest rate and exchange rate risks.

Derivatives are initially recognized at fair value when the derivative contracts are entered into and subsequently remeasured at fair value at the balance sheet date. Gains or losses arising from subsequent measurements are recognized directly in profit or loss, except for derivatives designated as effective hedging instruments, for which the point of recognition in profit or loss will depend on the nature of the hedging. When the fair value of the derivatives is positive, it is classified as a financial asset; when the fair value is negative, it is classified as a financial liability.

For derivatives embedded in asset master contracts within the scope of IFRS 9 “Financial Instruments”, the classification of financial assets shall be determined based on the overall contract. A derivative is considered to be a separate derivative if it is embedded in an asset

25

master contract that is not within the scope of IFRS 9 (e.g., embedded in a master contract of a financial liability) and the embedded derivative meets the definition of a derivative, the risks and characteristics of which are not closely related to those of the master contract and the hybrid contract is not measured at fair value through profit or loss.

(x) Revenue recognition

The Consolidated Company allocates the transaction price to each performance obligation after the performance obligation is identified in the customer contract and recognizes revenue when each performance obligation is satisfied.

Merchandise sales revenues

Merchandise sales revenues are derived from sales of electronic parts and components. The Consolidated Company recognizes revenues and accounts receivable at the point when the products arrive at the customer’s designated location because the customer has the right to determine resale prices and use the products and has the primary responsibility for re-selling the products and bears the risk of obsolescence.

• (xi)

Lease

The Consolidated Company assesses whether a contract is (or contains) a lease at the contract inception date.

1. The Consolidated Company is the lessor

A lease is classified as a capital lease when the terms of the lease transfer substantially all the risks and rewards incidental to the of the asset to the lessee. All other leases are classified as ownership operating leases.

For an operating lease, the net lease payments of the lease incentives are recognized as income on a straight-line basis over the relevant lease The direct cost incurred in an periods. original acquiring operating lease is added to the carrying amount of the subject asset and recognized as an expense on a straight-line basis over the lease period. 2. The Consolidated Company is the lessor

Except for the low-value leased assets entitled to exemption and lease payments for short-term leases recognized as expenses on a straight-line basis over the lease period, the right-of-use assets and lease

26

liabilities of other leases are recognized starting from the lease commencement date.

The right-of-use assets are initially measured at cost (including the original measured amount of lease liability, the lease payment paid before the lease commencement date net of the lease incentives collected, the original direct costs, and the estimated cost of the recovered underlying assets), and then subsequently measured at the net cost of the accumulated depreciation and accumulated impairment loss; also, the remeasured amount of the lease liability is adjusted. Right-of-use assets are expressed separately in the consolidated balance sheet.

The assets are on a basis over right-of-use depreciated straight-line the period starting from the lease commencement date to the end of their useful life or the expiration of the lease period, whichever is sooner.

Lease liabilities are measured initially at the present value of lease payments (including fixed benefits). If the implied interest rate of the lease is readily determinable, the lease payments are discounted using that rate. If said lease implied interest rate is not easy to determine, the lease payment is discounted at the lessee’s incremental borrowing rate of interest.

Subsequently, the lease liability is measured according to the effective interest method and the amortized cost; also, the interest is amortized over the lease If a in the lease expense period. change period results in a change in future lease payments, the Consolidated Company remeasures the lease liability and adjusts the right-of-use asset accordingly. However, if the carrying amount of the right-of-use asset is reduced to zero, the remaining remeasurement amount is in or loss. Lease liabilities are in recognized profit expressed separately the consolidated balance sheet.

(xii) Borrowing costs

Borrowing costs directly attributable to acquiring, building or producing assets that meet the requirements are part of the costs of such assets until the completion of all necessary activities have achieved their intended use or sale condition.

27

The income of a temporary investment with a specific loan that has not yet met the essential requirement of capital expenditure is deducted from the loan cost that meets the essential requirement of capitalization.

In addition to the above, all other loan costs are recognized as profit and loss upon occurring.

(xiii) Government subsidies

Government subsidies are recognized as other incomes only when it is reasonably certain that the Consolidated Company will comply with the conditions attached to the government subsidies and that the subsidies will be received.

Government subsidies related to revenues are on a recognized systematic basis over the period in which the related costs for which they are intended to compensate are recognized as expenses by the Consolidated Company.

Government subsidies are recognized in profit or loss in the period in which they become collectible if they are intended to compensate for or losses incurred or to immediate financial expenses already provide support to the Consolidated Company and have no future related costs. (xiv) Employee benefits

1. Short-term employee benefits

Liabilities related to short-term employee benefits are measured at the non-discounted amount expected to be paid in exchange for employee services.

1. Post-employment benefits

Under the defined contribution pension plan, the pension amount appropriated during the service years of the employees is recognized as an expense.

The defined benefit cost (including service cost, net interest and remeasurement) of the defined benefit pension plan is actuarially determined using the projected unit credit method. Service cost (including current and prior service cost) and net interest on net defined benefit liabilities (assets) are recognized as employee benefit as incurred. Remeasurements actuarial and expense (including gains losses and return on plan assets, net of interest) are recognized in other

28

comprehensive income and included in retained earnings as incurred and are not reclassified to profit or loss in subsequent periods.

The net defined benefit liability (asset) represents the deficit (remaining) of the defined benefit pension plan appropriation. The net defined benefit asset may not exceed the present value of refunds of appropriations from the plan or reductions in future appropriations.

(xv) Income tax

Income tax expense is the sum of the current income tax and deferred income tax.

1. Income tax for the period

The Consolidated Company determines income (loss) for the period in accordance with the regulations enacted by the income tax reporting jurisdictions and calculates income tax payable (recoverable) accordingly.

Additional income tax on unappropriated earnings calculated in accordance with the Republic of China Income Tax Act is recognized in the year in which resolutions are made at the shareholder meeting.

The adjustment to prior years’ income tax payable is booked as current period’s income tax.

2. Deferred tax

Deferred tax is calculated on temporary differences between the carrying amounts of assets and liabilities and the tax bases used to compute taxable income.

Deferred tax liabilities are generally recognized for all taxable temporary differences, while deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which income tax credits can be utilized, such as deductions for temporary differences, loss carryforwards and investment tax credits.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries, affiliates and joint ventures, except where the Consolidated Company can control the timing of the reversal of the temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future. Deferred tax assets are recognized for deductible temporary differences associated with such investments only to the extent that it is probable

29

that sufficient taxable income will be available to allow the temporary differences to be realized and to the extent that a reversal is expected in the foreseeable future.

The carrying amount of deferred tax assets is reviewed on each balance sheet date and reduced to the extent that it is no longer probable that sufficient tax assets will be available to allow recovery of all or part of the asset, and part of the asset should be adjusted down. Deferred tax assets that are not recognized as such initially are reviewed on each balance sheet date and the carrying amount is increased to the extent that it is probable that future taxable income will be available to recover all or part of the assets.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the liability is settled or the asset is realized, which are based on tax rates and tax laws that have been legislated or substantively legislated on the balance sheet date. The measurement of deferred income tax liabilities and assets reflects the tax consequence resulting from the book value of the assets or liabilities the consolidated to be recovered or expected by company liquidated on the balance sheet date.

1. Current and deferred income tax

Current and deferred income taxes are recognized in the profit or loss, except for the current and deferred income taxes related to the items recognized in other comprehensive income or directly included in the equity, which are respectively recognized in other comprehensive income or directly included in the equity.

v. Significant Accounting Judgments and Estimations, and Main Sources of Assumption Uncertainties

When adopting accounting policies, the Consolidated Company’s management is required to make judgments, estimates and assumptions that are based on historical experience and other factors that are not readily apparent from other sources. Actual results may differ from estimates.

Management will review estimates and underlying assumptions on an ongoing basis. If a revision of an estimate affects only the current period, it is in the in which it is revised. If a revision of an recognized period accounting

30

estimate affects both the current and future periods, it is recognized in the period in which it is revised and in the future periods.

vi. Cash and cash equivalents

and cash equivalents
	December 31,				December			31,
			2020				2019
Cash on hand and revolving
funds		$	1,019			$	15,565
Bank checking accounts and
demand deposits			1,671,437				1,384,033
Cash equivalents (investments
with an original maturity of
less than 3 months)
Bank acceptance bills			18,268				21,423
Bank time deposits			149,567				420,380
Bonds with repurchase
agreement			28,489					-
		$	1,868,780			$	1,841,401

The interest rate ranges for bank deposits as of the balance sheet date were as follows:

as follows:
	December 31,	December 31,
	2020	2019
Bank demand deposits	0.01%～0.385%	0.01%～0.385%
Bank time deposits	0.30%～2.025%	1.35%～3.45%
Bonds with repurchase
agreement	0.40%	-

vii.	Financial instruments at fair value through profit or loss	Financial instruments at fair value through profit or loss	Financial instruments at fair value through profit or loss	Financial instruments at fair value through profit or loss
		December 31,			December 31,
			2020				2019
	Financial assets-current
	Mandatorily measured at fair
	value through profit or loss
	Derivatives (not
	designated for hedging)
	- Forward foreign
	exchange contracts
	(1)		$ 33,860			$	6,622
	Non-derivative financial
	assets
	- Fund beneficiary
	certificates		20,001				71,145
			$ 53,861			$	77,767

31

Financial liabilities - current Held for trading Derivatives (not designated for hedging) - Forward foreign exchange contracts (1) $ - $ 98

• (i) Forward foreign exchange contracts not subject to hedge accounting and outstanding at the balance sheet date were as follows: December 31, 2020

			Contract Amount
	Currency	Expiration Date	(Thousands)
Sale of forward	RMB to USD	August 3, 2020 to	RMB 14,091／USD 2,000
foreign exchange		January 19, 2021
Sale of forward	RMB to USD	August 3, 2020 to	RMB 21,129／USD 3,000
foreign exchange		January 19, 2021
Sale of forward	RMB to USD	August 6, 2020 to	RMB 21,090／USD 3,000
foreign exchange		February 22, 2021
Sale of forward	RMB to USD	September 14, 2020	RMB 20,769／USD 3,000
foreign exchange		to April 19, 2021
Sale of forward	RMB to USD	December 4, 2020 to	RMB 33,085／USD 5,000
foreign exchange		May 18, 2021
Sale of forward	RMB to USD	December 4, 2020 to	RMB 33,110／USD 5,000
foreign exchange		June 18, 2021
Sale of forward	RMB to USD	December 4, 2020 to	RMB 33,225／USD 5,000
foreign exchange		July 19, 2021
Sale of forward	RMB to USD	December 4, 2020 to	RMB 33,290／USD 5,000
foreign exchange		August 19, 2021
Sale of forward	RMB to USD	June 2, 2020 to	RMB 3,581／USD 500
foreign exchange		January 15, 2021
Sale of forward	RMB to USD	July 13, 2020 to	RMB 3,536／USD 500
foreign exchange		February 18, 2021
Sale of forward	RMB to USD	August 3, 2020 to	RMB 3,530／USD 500
foreign exchange		March 15, 2021
Sale of forward	RMB to USD	August 3, 2020 to	RMB 3,536／USD 500
foreign exchange		April 15, 2021
Sale of forward	RMB to USD	September 4, 2020	RMB 3,469／USD 500
foreign exchange		to May 14, 2021
Sale of forward	RMB to USD	September 4, 2020	RMB 3,475／USD 500
foreign exchange		to June 15, 2021
Sale of forward	RMB to USD	September 4, 2020	RMB 3,480／USD 500
foreign exchange		to July 15, 2021
Sale of forward	RMB to USD	September 4, 2020	RMB 3,485／USD 500
foreign exchange		to August 16,
		2021

(Continued on next page)

32

(Continued from previous page)

	Currency	Expiration Date	Contract Amount
			(Thousands)
Sale of forward	RMB to USD	December 4, 2020 to	RMB 3,334／USD 500
foreign exchange		September 15,
		2021
Sale of forward	RMB to USD	December 4, 2020 to	RMB 6,681／USD 1,000
foreign exchange		October 15, 2021
Sale of forward	RMB to USD	December 4, 2020 to	RMB 6,695／USD 1,000
foreign exchange		November 15,
		2021
Sale of forward	RMB to USD	December 4, 2020 to	RMB 6,708／USD 1,000
foreign exchange		December 15,
		2021
Sale of forward	RMB to USD	December 4, 2020 to	RMB 6,722／USD 1,000
foreign exchange		January 18, 2022
Sale of forward	RMB to USD	December 4, 2020 to	RMB 6,734／USD 1,000
foreign exchange		February 15, 2022

December 31, 2019

			Contract Amount
	Currency	Expiration Date	(Thousands)
Sale of forward	NTD to USD	December 30, 2019	NTD 150,235／USD 5,000
foreign exchange		to January 30,
		2020
Sale of forward	RMB to USD	October 17, 2019 to	RMB 35,525／USD 5,000
foreign exchange		January 20, 2020
Sale of forward	RMB to USD	November 6, 2019	RMB 35,050／USD 5,000
foreign exchange		to February 20,
		2020
Sale of forward	RMB to USD	December 24, 2019	RMB 35,136／USD 5,000
foreign exchange		to March 20, 2020
Sale of forward	RMB to USD	December 24, 2019	RMB 35,154／USD 5,000
foreign exchange		to April 20, 2020
Sale of forward	RMB to USD	November 6, 2019	RMB 3,501／USD 500
foreign exchange		to January 15,
		2020
Sale of forward	RMB to USD	November 6, 2019	RMB 3,503／USD 500
foreign exchange		to February 18,
		2020
Sale of forward	RMB to USD	November 6, 2019	RMB 3,504／USD 500
foreign exchange		to March 16, 2020

The of the Consolidated forward purpose Company’s exchange transactions is to hedge the risk of foreign currency assets and liabilities arising from exchange rate fluctuations.

33

viii. Financial assets at amortized cost

				December 31,	December 31,	December 31,	December	December	December	31,	31,
					2020				2019
Current
Time deposits	with	original
maturity of	more	than	3
months (1)					$ 458,813			$	7,033
Pledge of time deposits		(1)			13,094				14,052
					$ 471,907			$	21,085
Noncurrent
Time deposits	with	original
maturity of	more	than	3
months (2)					$ 43,648			$	128,925
Pledge of time deposits		(2)			2,127				2,067
Restricted foreign exchange
deposits with	offshore funds
(3)					124,472					-
					$ 170,247			$	130,992

• (i) As of December 31, 2020 and 2019, the interest rate ranges for time deposits with original maturity over 3 months were 1.35% to 3.4% and 3.7% to 3.8% per annum, respectively.

• (ii) As of December 31, 2020 and 2019, the market interest rate for time deposits with original maturity over one year was 0.84% to 4.18% and 1.09% to 4.18% per annum, respectively.

• (iii) On August 26, 2020, the Consolidated Company remitted NTD 146,285 thousand (USD 5,000 thousand) in accordance with the “The Management, Utilization, and Taxation of Repatriated Offshore Funds Act” and deposited the net amount after tax in a dedicated account for foreign exchange deposits, as approved by the National Taxation Bureau of the Northern Area, Ministry of Finance. The deposits in the dedicated account are subject to restrictions on the free use of the funds as prescribed by law, except for financial investments or real investments and part of the free use of the funds as prescribed by law, which can be withdrawn in three-year increments after five years from the date of deposit in the dedicated account.

• (iv) For information on pledges of financial assets measured at amortized cost, see Note 29.

34

ix. Accounts receivable and overdue receivables

			December 31,	December 31,	December 31,	December 31,	December 31,	December 31,	December 31,	December 31,	December 31,	December 31,
					2020					2019
Accounts receivable
Measured at amortized cost
Total carrying amount				$	2,469,955				$	2,219,261
Less: Allowance		for loss	(		1,086 )			(		1,743	)
				$	2,468,869				$	2,217,518
Overdue receivables
Measured at amortized cost
Total carrying amount				$	57,107				$	95,658
Less: Allowance		for loss	(		57,107 )			(		95,658	)
				$	-				$	-

Accounts receivable

The average credit period of the Consolidated Company’s merchandise sales is 150 days. In determining the collectibility of accounts receivable, the Consolidated Company considers any changes in the credit quality of the accounts receivable from the original credit grant date to the balance sheet date. To mitigate credit risk, the Consolidated Company’s management has assigned a dedicated team to be responsible for credit limit determination, credit approval and other monitoring procedures to ensure that appropriate actions are taken to collect overdue accounts receivable. In addition, the Consolidated Company reviews the recoverable amounts of accounts receivable on a case-by-case basis at the balance sheet date to ensure that appropriate impairment losses have been recorded for uncollectible accounts receivable. Accordingly, the Consolidated Company’s management believes that the Consolidated Company’s credit risk has been significantly reduced.

The Consolidated Company uses the simplified method of IFRS 9 to recognize an allowance for losses on accounts receivable based on the expected credit losses over the life of the accounts. Expected credit losses for the duration are calculated using an allowance matrix, which takes into account the customer’s past default history and current financial condition, the economic situation of the industry, as well as GDP forecasts and industry outlook. Since the Consolidated credit loss shows that there is no Company’s history significant difference in the loss patterns of different customer groups, therefore, instead of further differentiating the customer groups, the allowance matrix

35

loss rate based on the number due on only sets the expected credit of days past accounts receivable.

If there is evidence that the counterparty is in serious financial difficulty and the Consolidated Company cannot reasonably expect to recover the amount, for example, if the counterparty is in liquidation or the debt is overdue for more than 365 days, the Consolidated Company reclassifies the amount directly to overdue receivable and continues the collection activities, and the amount recovered is offset against the related overdue receivable.

The Consolidated Company estimated the allowance for losses on accounts receivable based on the allowance matrix as follows:

December 31, 2020

December 31, 2020
							Overdue 1 to					Overdue 181
		Not overdue							180 days				to	365 days					Total
Expected credit loss rate				0.01%					0.49%					10.65%					-
Total carrying amount				$ 2,311,593				$	156,560				$	1,802					$ 2,469,955
Allowance for loss
(Expected credit losses
over the duration)		(		126	)		(		768	)		(		192	)		(		1,086	)
Amortized cost				$ 2,311,467				$	155,792				$	1,610					$ 2,468,869
December 31, 2019
							Overdue 1 to					Overdue 181
		Not overdue							180 days				to	365 days					Total
Expected credit loss rate				0%					0.25%					54%					-
Total carrying amount				$ 2,065,296				$	151,426				$	2,539					$ 2,219,261
Allowance for loss
(Expected credit losses
over the duration)				-			(		380	)		(		1,363	)		(		1,743	)
Amortized cost				$ 2,065,296				$	151,046				$	1,176					$ 2,217,518

Information on the changes in the	Information on the changes in the	Information on the changes in the	allowance for losses	allowance for losses	on accounts
receivable is as follows:
			2020		2019
Balance at the beginning of the
year		$	1,743	$	3,018
Add:	Provision for
	impairment loss for the
	year		1,083		11,962
Less:	Actual write off for the
	year	(	361)	(	343)
Less:	Reclassification for the
	year	(	1,391)	(	12,884)

36

			2020				2019
Foreign currency translation
difference			12		(		10 )
Balance at the end of the year		$	1,086			$	1,743

	Information on the changes in the allowance	Information on the changes in the allowance	Information on the changes in the allowance	Information on the changes in the allowance	Information on the changes in the allowance	Information on the changes in the allowance	Information on the changes in the allowance	Information on the changes in the allowance	Information on the changes in the allowance	for losses	for losses	for losses	for losses	for losses	on overdue	on overdue	on overdue	on overdue
	receivables is as follows:
						2020									2019
	Balance at the beginning of the
	year					$ 95,658									$ 93,270
	Add: Reclassification for the
	year					1,391									12,884
	Less: Actual write off for the
	year				(	24,724)							(		5,398)
	Less: Reversal of impairment
	loss for the year				(	15,219)							(		4,402)
	Foreign currency translation
	difference					1							(		696 )
	Balance at the end of the year					$ 57,107									$ 95,658
x.	Inventories
			December 31,								December 31,
						2020									2019
	Finished good				$ 262,445								$ 218,519
	Semi-finished goods					57,205									42,527
	Work in progress					228,036									155,113
	Raw materials and supplies					364,732									245,284
	In-transit					45,235									14,146
					$ 957,653								$ 675,589
	The nature of cost of goods sold		is as		follows:
						2020									2019
	Cost of inventories sold			$		4,777,176						$			5,336,977
	Gain on reversal of loss on
	decline in value of
	inventories		(			4,804)					(				19,406)
	Others		(			13,965		)			(				32,836 )
				$		4,758,407						$			5,284,735

(i) The increase in net realizable value of inventories was due to the disposal of slow-moving inventories and the reversal of allowances and slow-moving inventories.

37

xi. Subsidiaries

Subsidiaries Included in Consolidated Financial Statements

Entities covered by the consolidated financial statements are as follows:

			Shareholding	Shareholding
			percentage
			December	December	Descri
Investor	Subsidiaryname	Business nature	31,2020	31,2019	ption
ICHIA	ICHIA USA INC. (hereafter	Manufacturing, processing	100%	100%	-
TECHNOLOGIES	referred to as ICHIA USA).	and trading of various
INC.		electronic components
		and materials
	ICHIA HOLDINGS (B.V.I)	Various investment	100%	100%	-
	CO., LTD. (hereafter	businesses
	referred to as BVI-ICHIA)
BVI-ICHIA	ICHIA RUBBER INDUSTRY	Manufacturing, processing	100%	100%	-
	(M) SDN BHD (hereinafter	and trading of various
	referred to as ICHIA	electronic components
	Malaysia)	and materials
	ICHIA UK LTD.	Various investment	100%	100%	-
		businesses
	ICHIA INTERNATIONAL	International trading of	-	100%	1
	TRADING LTD. (BVI)	various electronic
	(hereafter referred to as	components and
	ICHIA INTERNATIONAL)	materials
	ICHIA HOLDINGS (H.K.)	Various investment	100%	100%	-
	CO., LTD. (hereafter	businesses
	referred to as ICHIA H.K.)
	ZHONGSHAN ICHIA	Manufacturing, processing	100%	100%	-
	ELECTRONICS CO., LTD.	and trading of rubber
	(hereafter referred to as	and plastic keypads
	ZHONGSHAN ICHIA)
ICHIA U.K. LTD.	Ichia Hungary Ltd. (hereafter	Manufacturing, processing	100%	100%	-
	referred to as ICHIA	and trading of rubber
	Hungary)	and plastic keypads
ICHIA H.K.	ICHIA TECHNOLOGY	Manufacturing, processing	100%	100%	-
	(SUZHOU) CO., LTD.	and trading of rubber
	(hereafter referred to as	and plastic keypads and
	ICHIA SUZHOU)	flexible printed circuit
		boards

38

Remarks:

ICHIA INTERNATIONAL completed its liquidation and closed its operations on September 28, 2020.

As of December 31, 2020, the Company’s investment relationships and shareholdings with its investees over which it has control are shown as below:

==> picture [379 x 215] intentionally omitted <==

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

ICHIA TECHNOLOGIES INC.
Capital: NTD 3,075,366 thousand
100% 100%
ICHIA HOLDINGS (B.V.I) ICHIA USA Inc.
CO., LTD. Capital: USD 4,106 thousand
Capital: USD 108,693 thousand
100% 100% 100% 100%
ICHIA HOLDINGS (H.K.) ICHIA U.K. Ltd. ICHIA RUBBER INDUSTRY ZHONGSHAN ICHIA
CO., LTD. Capital: USD 4,926 thousand (M) Sdn. Bhd. ELECTRONICS CO., LTD
Capital: USD 75,000 thousand Capital: MYR 9,000 Capital: RMB 118,139 thousand
thousand (USD 17,000 thousand)
100% 100%
ICHIA TECHNOLOGY ICHIA Technologies Hungary Limited Liability
(SUZHOU) CO., LTD Capital: HUF 1,000,000 thousandCompany
Capital: RMB 657,167 thousand (USD4,926 thousand)
(USD 87,000 thousand)
----- End of picture text -----

The Company and the above investees included in the consolidated financial statements are collectively referred to as the Consolidated Company.

The financial statements of the subsidiaries included in the consolidated financial statements have been audited by the CPA.

xii. Property, plant and equipment

Self-use

					Self-owned	Self-owned					Machinery and	Machinery and	Machinery and	Machinery and		Other
						land			Buildings			equipment			equipment			Total
Cost
Balance as of January 1, 2020					$	524,333			$	2,569,774		$	3,562,524		$	963,643	$	7,620,274
Addition						-				11,679			9,854			7,450		28,983
Disposal						-			(	28,287)	(		130,115 )		(	39,046 )	(	197,448)
Reclassification						-				18,254			181,898			30,394		230,546
Net exchange differences				(		406	)			14,047			47,436			11,406		72,483
Balance as of December 31,
2020					$	523,927			$	2,585,467		$	3,671,597		$	973,847	$	7,754,838
Accumulated depreciation
and impairment
Balance as of January 1, 2020					$	-			$	1,539,804		$	2,344,167		$	814,716	$	4,698,687
Disposal						-			(	28,287)	(		116,024 )		(	37,164 )	(	181,475)
Depreciation expense						-				100,002			243,748			57,582		401,332
Impairment loss						-				92			-			-		92
Net exchange differences						-				7,986			34,351			10,446		52,783
Balance as of December 31,
2020					$	-			$	1,619,597		$	2,506,242		$	845,580	$	4,971,419
Net as of December 31, 2020					$	523,927			$	965,870		$	1,165,355		$	128,267	$	2,783,419

(Continued on next page)

39

(Continued from previous page)

					Self-owned	Self-owned								Machinery and	Machinery and	Machinery and	Machinery and	Machinery and			Other
						land				Buildings					equipment					equipment						Total
Cost
Balance as of January 1, 2019					$	296,869				$	2,492,497				$	3,602,888				$	1,021,654				$	7,413,908
Addition						-					60,017					7,128					3,023					70,168
Disposal						-			(		12,643	)		(		96,107	)		(		66,083)			(		174,833	)
Assets from		operating leases				227,663					110,241					-					-					337,904
Reclassification						-					946					171,354					36,016					208,316
Net exchange differences				(		199	)		(		81,284	)		(		122,739	)		(		30,967 )			(		235,189	)
Balance as of December 31, 2019					$	524,333				$	2,569,774				$	3,562,524				$	963,643				$	7,620,274
Accumulated depreciation and
impairment
Balance as of January 1, 2019					$	-				$	1,472,061				$	2,260,737				$	830,682				$	4,563,480
Disposal						-			(		12,643	)		(		93,419	)		(		64,109)			(		170,171	)
Assets from		operating leases				-					27,680					-					-					27,680
Depreciation expense						-					99,233					262,894					76,063					438,190
Impairment		loss				-					2,709					-					-					2,709
Net exchange differences						-			(		49,236	)		(		86,045	)		(		27,920 )			(		163,201	)
Balance as of December 31, 2019					$	-				$	1,539,804				$	2,344,167				$	814,716				$	4,698,687
Net as of December 31, 2019					$	524,333				$	1,029,970				$	1,218,357				$	148,927				$	2,921,587

The Consolidated Company assesses the recoverable amount of assets for operating use as of the reporting date for impairment and uses the value in use as the basis for calculating the recoverable amount. The calculation of the value in use is based on the estimated cash flows of the Consolidated Company’s future financial projections.

The recoverable amount of the impaired assets was evaluated to be lower than that of the previous years, therefore, the Consolidated Company recorded impairment losses of $92 thousand and $2,709 thousand in 2020 and 2019, respectively. The impairment loss is included in other gains and losses in the consolidated comprehensive income statements.

Depreciation expense is provided on a straight-line basis over the following useful life:

Buildings
Main structures	51 years
Elevator equipment	16 years
Air conditioning system	26 years
Improvement to main structures	4 to 51 years
Machinery and equipment	13 years
Other equipment	16 years

For the amount of property, plant and equipment used as collaterals for loans, please refer to Note 29.

40

xiii. Lease Agreement (i) Right-of-use assets.

Right-of-use assets.
	December 31,				December			31,
			2020				2019
Carrying amount of
right-of-use assets
Land		$	128,598			$	131,066
Transportation equipment			3,205					-
		$	131,803			$	131,066
			2020				2019
Addition of right-of-use assets.		$	3,846			$		-
Depreciation expense of
right-of-use assets
Land		$	4,438			$	4,643
Transportation equipment			641					-
		$	5,079			$	4,643

Other than the above additions and depreciation expense recognized, there were no significant subleases or impairments of the Consolidated Company’s right-of-use assets in 2020 and 2019.

Right-of-use asset - Land refers to its use rights in Mainland China. (ii) Lease liabilities

Lease liabilities	Lease liabilities	Lease liabilities	Lease liabilities
December 31,				December		31,
		2020			2019
Carry amount of lease
liabilities
Current	$	1,266			$	-
Noncurrent	$	1,959			$	-
The discount rate range for lease liabilities is as follows:
December 31,				December		31,
		2020			2019
Transportation equipment		2.5%			-

41

(iii) Information on other leases

Please refer to Note 14 for the consolidated company’s agreements to lease investment properties under operating leases.

					2020					2019
Short-term	lease expenses			$	7,887				$	3,713
Low-value	asset	lease
expenses				$	556				$	219
Total cash	(outflow)	from
leases			($		9,109 )			($		3,932 )

The Consolidated Company has elected to apply the recognition exemption to leases of buildings, structures and office equipment that qualify as short-term leases and certain other equipment that qualify as low-value asset leases and does not recognize the related right-of-use assets and lease liabilities for these leases.

Short-term lease expense for 2019 also included other leases with lease periods ending before December 31, 2019 and for which the recognition exemption was elected. The amount of short-term lease commitments for which the recognition exemption was applicable (including short-term lease commitments commencing after the balance sheet date) was $35,796 thousand and $23,082 thousand as of December 31, 2020 and 2019, respectively.

The Consolidated Company has no commitments to enter into leases for periods beginning after the balance sheet date.

xiv. Investment Properties

			Completed	Completed	Completed	Completed	Completed
			investment
					properties
Cost
Balance as of January 1, 2019					$	337,904
Transferred to property, plant and equipment			(			337,904 )
Balance as of December 31, 2019					$	-
Accumulated depreciation and impairment
Balance as of January 1, 2019			($			24,688)
Depreciation expense			(			2,992)
Transferred to property, plant and equipment						27,680
Balance as of December 31, 2019					$	-
Net as of December 31, 2019					$	-

42

Depreciation expense of investment properties is provided on a straight-line basis over the following useful life: Main structures 51 years Elevator equipment 16 years Air conditioning system 10 years Improvement to main structures 4 to 49 years

All of the Consolidated Company’s investment properties are owned by the Consolidated Company.

xv. Other assets

			December 31,	December 31,	December 31,	December 31,	December 31,	December 31,
				2020			2019
Current
Tax overpaid retained				$ 53,397			$ 26,884
Prepaid	expenses			54,018			53,826
Prepayments for goods				6,199			21,433
Business tax		refund receivable		8,213			2,468
Non-operating receivables				7,464			4,306
Temporary payments				1,711			1,915
Others				8,108			9,866
				$ 139,110			$ 120,698
Noncurrent
Prepaid	equipment (Note 30)			$ 115,808			$ 52,840
Refundable deposits				25,077			25,375
Long-term prepaid expenses				55,249			38,394
				$ 196,134			$ 116,609

Due to the water pollution incident, the Consolidated Company is legally required to fulfill the soil ecological environment restoration obligation and paid the soil ecological environment damage compensation guarantee of RMB 3,230,000 (equivalent to approximately NTD 14,175,000) on September 25, 2019, which will be returned upon the completion of soil ecological environment restoration as confirmed by the Ecological Environment Bureau of the Suzhou New High-tech Zone.

43

xvi.	Borrowings	Borrowings
(i)		Short-term borrowings
					December 31,			December 31,
						2020				2019
		Unsecured borrowings
		Credit facility borrowings				$ 1,445,882			$	673,844

As of December 31, 2020 and 2019, the interest rates on bank borrowings for operating turnover ranged from 0.89% to 1.036% and 0.98% to 2.76%, respectively.

• (ii) Long-term borrowings

Long-term borrowings
	December 31,					December 31,
			2020					2019
Secured borrowings (Note 29)
Bank borrowings			$ 293,718					$ 459,062
Less: Classified as due within
1 year	(		167,191 )			(		165,066	)
Long-term borrowings			$ 126,527					$ 293,996

The bank borrowings were secured by pledges of the Consolidated Company’s self-owned land and buildings (see Note 29). The maturity date of the borrowings was September 11, 2022, and the effective interest rates were 1.03% and 1.28% per annum for the years ended December 31, 2020 and 2019, respectively.

The Consolidated Company’s borrowings consist of:

	Maturity		Effective	December 31,	December 31,	December 31,	December 31,	December 31,	December 31,
	date	Major terms and conditions	interest rate		2020			2019
Floating rate	2022-09-11	Chang Hwa Commercial Bank, Ltd.
borrowings:
		The borrowing amount is	1.03%		$293,718			$459,062
		$500,000 thousand with
		interest rates ranging from
		1.0% to 1.5% to finance the
		medium-term operating
		turnover. The borrowing
		period is from September
		11, 2017 to September 11,
		2022, with monthly interest
		deductions. Repayment is
		made on the 11th day of
		each month, starting from
		October 11, 2019, in 36 equal
		installments of principal and
		interest.
		Less: Classified as due within 1		(	167,191	)	(	165,066	)
		year
		Long-term borrowings			$126,527			$293,996

44

xvii. Accounts payable

Accounts	payable
			December 31,			December 31,
				2020			2019
Accounts	payable
Occurred	due to business			$ 1,693,628			$ 1,218,582

The average credit period for the purchase of some goods is one to three months, and no interest is accrued on the accounts payable. The Consolidated Company has a financial risk management policy to ensure that all payables are repaid within the pre-agreed credit periods.

xviii. Other liabilities

		December 31,	December 31,	December 31,	December 31,	December 31,	December 31,
			2020			2019
Current
Other payables
Salaries and bonuses
payable			$ 126,910			$ 137,528
Leave payables			48,946			47,072
Interest payables			979			945
Other expense payables			71,969			51,446
			$ 248,804			$ 236,991
Other liabilities
Temporary receipts			$ 26,879			$ 22,158
Others			315			846
			$ 27,194			$ 23,004

xix. Post-employment benefit plans

(i) Defined contribution plan

The pension system of the Consolidated Company under the “Labor Pension Act” is a government-administered defined contribution pension plan with 6% of employees’ monthly salaries contributed to the personal accounts at the Bureau of Labor Insurance.

(ii) Defined benefit plan

The pension system of the Consolidated Company under the “Labor Standards Act” is a government-administered defined benefit pension plan. Pension payment is calculated in accordance with the years of service and the average salary six months prior to the authorized retirement date. The Company appropriate 2% of employees’ monthly salaries as pension funds,

45

which is deposited by the Supervisory Committee of Labor Retirement Reserve in the name of the Committee into a dedicated account at the Bank of Taiwan. Before the end of the year, if the balance in the dedicated account is estimated to be insufficient to pay for employees who are expected to meet the retirement requirements in the following year, the difference will be made in one sum the end of March of the The up lump by following year. management of the dedicated account is entrusted to the Bureau of Labor Funds, Ministry of Labor. The Consolidated Company has no right to influence the investment management strategy.

The amounts included in the consolidated balance sheets for defined benefit plan are shown below.

benefit plan are shown below.
		December 31,											December 31,
					2020												2019
Present value of defined
benefit obligations				$	25,558											$	23,716
Fair value of plan assets		(			45,347 )									(			43,582 )
Net defined benefit assets		($			19,789 )									($			19,866 )
Changes in net defined benefit assets					are as follows:
Present				value
	of defined
		benefit					Fair			value of						Net		defined
obligations							plan				assets					benefit assets
January 1, 2019	$	21,842					($			41,874 )						($		20,032 )
Service costs
Service costs for the
period				55							-								55
Interest expenses
(incomes)				273			(				523 )					(		250 )
Recognized in profit or loss				328			(				523 )					(		195 )
Remeasurement
Return on plan assets
(other than amounts
included in net
interest)					-		(				1,389)					(		1,389)

(Continued on next page)

46

(Continued from previous page)

	Present value	Present value	Present value	Present value	Present value
		of defined
			benefit			Fair			value of			Net			defined
	obligations					plan assets						benefit assets
Actuarial losses
- Change in
financial
assumptions		$	565					$	-					$	565
- Adjustments
through experience			1,185						-						1,185
Recognized in other
comprehensive
income			1,750			(			1,389 )						361
Benefit payments	(		204	)					204						-
December 31, 2019			23,716			(			43,582 )			(			19,866 )
Service costs
Service costs for the
period			56						-						56
Interest expenses
(incomes)			237			(			436 )			(			199 )
Recognized in profit or loss			293			(			436 )			(			143 )
Remeasurement
Return on plan assets
(other than amounts
included in net
interest)			-			(			1,329)			(			1,329)
Actuarial losses
- Change in
financial
assumptions			450						-						450
- Adjustments
through experience			1,099						-						1,099
Recognized in other
comprehensive
income			1,549			(			1,329 )						220
Benefit payments			-						-						-
December 31, 2020		$	25,558			($			45,347 )			($			19,789 )

47

The amounts in or loss for defined benefit are recognized profit plan summarized by function as follows:

			2020				2019
Operating costs	($		15)		($		22)
Promotional expenses	(		4)		(		6)
Administrative expenses	(		110)		(		148)
R&D expenses	(		14 )		(		19 )
	($		143 )		($		195 )

The subsidiaries in the Consolidated Company are exposed to the following risks as a result of the pension system under the “Labor Standards Act”:

1. Investment risk: The Bureau of Labor Funds, Ministry of Labor invests the labor pension fund in domestic and foreign equity securities, debt securities, and bank deposits through its own management or entrusted third parties, but the amount allocated to the Consolidated Company’s plan assets is based on the income at a rate no less than the local bank’s 2-year time deposit rate.

2. Interest rate risk: A decrease in interest rates on government/corporate

bonds will increase the present value of the defined benefit obligation, but the return on debt investment in plan assets will also increase, which will have a partially offsetting effect on the net defined benefit obligation.

1. Salary Risk: The present value of the defined benefit obligation is calculated by reference to the future salary of the plan member. Therefore, increases in plan member’s salary will result in an increase in the present value of the defined benefit obligation.

The present value of the Consolidated Company’s defined benefit obligation was actuarially determined by a qualified actuary and the significant assumptions at the measurement date were as follows:

	December	31,	December	31,
	2020		2019
Discount rate	0.80%		1.00%
Expected rate of salary
increase	3.00%		3.00%

48

The amount by which the present value of the defined benefit obligation would increase (decrease) if there are reasonable possible changes in significant actuarial assumptions, with all other assumptions held constant, is as follows:

is as follows:
	December 31,					December 31,
			2020					2019
Discount rate
Increase by 0.25%	($		556 )			($		560 )
Decrease by 0.25%		$	577				$	582
Expected rate of salary
increase
Increase by 1%		$	2,385				$	2,415
Decrease by 1%	($		2,097 )			($		2,113 )

The sensitivity analysis above may not reflect actual changes in the present value of the defined benefit obligation because the actuarial assumptions may be correlated and changes in only one assumption are not feasible.

			December 31,	December 31,	December 31,	December 31,	December 31,	December 31,
				2020			2019
	Average duration to
	maturity of defined benefit
	obligations			13.7 years			14.6 years
xx.	Equity
(i)	Common stock
			December 31,			December 31,
				2020			2019
	Authorized number of
	shares (thousand shares)			600,000			420,000
	Authorized capital stock			$ 6,000,000			$ 4,200,000
	Number of shares issued
	and fully paid (thousand
	shares)			307,536			307,536
	Issued capital stock			$ 3,075,366			$ 3,075,366

The issued common stock has a face value of NT$10 per share and each share is entitled to one voting right and receiving dividends.

30,000 thousand shares of the authorized capital stock were reserved for the issuance of convertible bonds and employee restricted stock options.

49

On March 25, 2019, the Board of Directors resolved to retire 9,731 thousand shares of treasury stock and the change registration was completed on April 10, 2019.

On March 18, 2020, the Company’s Board of Directors resolved to increase the authorized capital to $6,000,000 thousand, and on June 12, 2010, the resolution was approved by the regular shareholders’ meeting. (ii) Capital surplus

Capital surplus
		December 31,				December 31,
				2020				2019
For loss make-up, payment
in cash or capitalization as
equity (1)
Stock issue premium			$	411,281			$	488,165
Corporate bond conversion
premium				1,238,407				1,238,407
Gain on disposal of assets				167				167
Consolidation excess				42,695				42,695
Not for any purpose
Employee stock purchase
plan				149,021				149,021
Employee restricted stock
option				120,365				120,365
Convertible bond stock
options				124,891				124,891
			$	2,086,827			$	2,163,711

1. Such capital surplus may be used to make up for losses or, when the Company has no losses, to distribute cash or to capitalize equity, provided that the capitalization is limited to a certain percentage of the paid-in capital each year.

2. (iii) Retained Earnings and Dividend Policy

In accordance with the earnings distribution policy of the Company’s Articles of Incorporation, if there are any net earnings as indicated in the final accounts, the Company shall pay tax and make up for the accumulated losses, and then set aside 10% as legal reserve, and the rest shall be set aside as special reserve or offset by reversal of special reserve as required by law; if there are still remaining earnings, the Board of Directors shall prepare a proposal for the distribution of the remainder together with the accumulated unappropriated earnings at the beginning of the period, and submit it to the

50

shareholder meeting for resolution on the distribution of dividends to shareholders. The Company’s policy on the distribution of employees’ and directors’ remuneration as stipulated in the Company’s Articles of Incorporation is described in Note 22(7) Employees’ Remuneration and Directors’ Remuneration.

Based on the resolution of a majority of directors at the meeting attended by two-thirds of the total number of directors, the Company shall distribute the dividend and bonus, in whole or in part, in the form of cash and report to the shareholders’ meeting.

The legal reserve should be appropriated until the balance reaches the Company’s total paid-in capital. The legal reserve may be used to make up for losses. If the Company has no losses, the excess of legal reserve over 25% of the paid-in capital may be distributed in cash in addition to capitalization as equity.

The has and reversed the reserve in Company provided special accordance with the letters Jin-Guan-Zheng-Fa-Zi Nos. 1010012865, 1010047490 and 1030006415 and the provisions of the “Questions and Answers on the Application of International Financial Reporting Standards (IFRSs) to the Provision of Special Reserve”.

At the regular shareholders’ meetings held on June 12, 2020 and June 14, 2019, the Company resolved to distribute the earnings for 2019 and 2018 as follows:

follows:
			2019				2018
Legal reserve		$	22,679			$	14,511
Special reserve		$	198,694			$	137,011
Cash dividends		$	153,768			$	153,768
Cash dividends per share		$	0.5			$	0.5
(NTD)

The Board of Directors proposed the following earnings distribution for 2020 on March 16, 2021:

2020 on March 16, 2021:
	Earnings
	distribution
	proposal
Legal reserve	$ 11,997
Special reserve	($ 40,309	)
Cash dividends	$ 148,768
Cash dividends per share	$ 0.5

51

The earnings proposal for 2020 is pending resolution at the shareholders’ meeting scheduled for June 21, 2021.

(iv) Treasury stock

Treasury stock
								Shares of
								parent
			Transfer of				Repurchase	company
				shares to			for	held by
				employees			retirement	subsidiaries			Total
				(thousand			(thousand	(thousand			(thousand
Reason for recovery				shares)			shares)	shares)			shares)
Number of shares as
of January 1, 2020				-			-	-			-
Increase in	the
period				10,000			-	-			10,000
Number of shares as
of December	31,
2020				10,000			-	-			10,000
Number of shares as
of January 1, 2019				9,731			-	-			9,731
Decrease in the year		(		9,731	)		-	-	(		9,731	)
Number of shares as
of December	31,
2019				-			-	-			-

On July 27, 2020, the Board of Directors resolved to repurchase 10,000 thousand shares of the Company’s common stock to employees for the period from July 28, 2020 to September 25, 2020 at a price range of $12 to $18 in order to motivate employees and enhance their cohesiveness to the Company. As of the end of the repurchase period (September 25, 2020), the Company had repurchased 10,000 thousand shares for a total of $161,328 thousand.

The repurchased shares shall be transferred to employees within 5 years in accordance with the Securities and Exchange Act. If the shares are not transferred after the expiration date, they shall be considered as unissued shares of the Company and shall be registered for change.

Treasury stock held by the Company cannot be pledged under the Securities and Exchange Act, and is not entitled to dividend distribution or voting rights.

52

xxi. Revenues

Revenues
				2020					2019
Customer contract revenues
Merchandise sales
revenues			$	5,502,842				$	6,148,946
Lease incomes
Investment Properties
(Note 14)					-				7,872
			$	5,502,842				$	6,156,818
Contract balance
		December			31,		December 31,
				2020					2019
Accounts receivable (Note 9)			$	2,468,869				$	2,217,518
Contract liabilities - current
Merchandise sales			$	7,114				$	5,586

The change in contract liabilities mainly arises from the difference between the point at which performance obligations are satisfied and the point at which customers pay.

	customers pay.
xxii.	Net profits before tax
(i)	Interest incomes
					2020				2019
	Bank deposits			$	7,432			$	5,418
	Bonds with repurchase
	agreement				13				-
	Financial assets at amortized
	cost				16,099				9,819
	Imputed interest on deposits				188				8
				$	23,732			$	15,245
(ii)	Other incomes
					2020				2019
	Lease incomes
	Rental incomes from
	operating lease
	- Investment
	properties			$	-			$	7,872
	- Rental incomes
	from dormitory
	and parking lot				835				595
	- Rental incomes				1,245				1,929

53

	from housing
				2,080						10,396
	Government subsidy
	incomes			16,547						-
	Compensation incomes			6,036						-
	Others			14,558						12,320
				$ 39,221					$	22,716
(iii)	Other incomes (expenses)
				2020						2019
	Gain (loss) on financial
	assets and financial
	liabilities (Note 7)
	Financial assets
	mandatorily
	measured at fair
	value through profit
	or loss
	- Realized			$ 21,824			($			8,532)
	- Unrealized			33,104						15,959
				54,928						7,427
	Financial liabilities held
	for trading
	- Realized	(		472)			(			7)
	- Unrealized	(		22 )			(			39 )
		(		494 )			(			46 )
				54,434						7,381
	Net foreign currency
	exchange loss	(		107,018)			(			5,914)
	Gain on disposal of
	property, plant and
	equipment			2,680						6,827
	Impairment loss of property,
	plant and equipment	(		92)			(			2,709)
	Others	(		3,521 )			(			17,803 )
		($ 53,517 )					($			12,218 )

54

(iv)	Financial costs
					2020							2019
	Interest on bank borrowings			$ 15,065							$ 25,499
	Interest on lease liabilities				45							-
				$ 15,110							$ 25,499
	No interest capitalization in	2020	and 2019.
(v)	Depreciation and amortization
					2020							2019
	Depreciation expense is
	summarized by function
	Operating costs			$ 384,086							$ 416,572
	Operating expenses				22,325							29,253
				$ 406,411							$ 445,825
(vi)	Employee benefit expenses
					2020							2019
	Post-employment benefits
	Defined contribution
	plans		$		5,312					$		4,833
	Defined benefit plans
	(Note 19)	(			143		)		(			195 )
					5,169							4,638
	Other employee benefits				1,273,520							1,395,309
	Total employee benefit
	expenses		$		1,278,689					$		1,399,947
	Summarized by function
	Operating costs		$		1,015,805					$		1,146,452
	Operating expenses				262,884							253,495
			$		1,278,689					$		1,399,947

(vii) Employees’ remuneration and directors’ remuneration.

In accordance with the Company’s Articles of Incorporation, the Company appropriates no less than 1% and no more than 3% of the profits before tax to employees’ and directors’ remuneration, respectively, for the before the distribution of and directors’ remuneration. The year employees’ estimated remuneration to employees and directors for the years ended 2020 and 2019 were resolved by the Board of Directors on March 16, 2021 and March 18, 2019, respectively, as follow:

55

Estimated percentage	Estimated percentage
				2020		2019
Remuneration to employees				4.18%		3.30%
Remuneration to directors				2.94%		2.06%
Amount
				2020		2019
				Cash		Cash
Remuneration to employees			$	7,000	$	8,000
Remuneration to directors				4,919		5,000

If there is a change in the amount of the consolidated financial statements after the date of its issuance, the amount is adjusted in the following year in accordance with the rules related to changes in accounting estimates.

There was no difference between the actual amount of employees’ and directors’ and supervisors’ remuneration paid for 2019 and 2018 and the amount recognized in the consolidated financial statements in 2019 and 2018.

Please refer to the “Market Observation Post System” of the Taiwan Stock Exchange for information on the remuneration of employees, directors and supervisors resolved by the Board of Directors of the Company.

(viii) Foreign currency exchange gains (losses)

			2020						2019
Total foreign currency
exchange gains			$ 176,696					$	200,277
Total foreign currency
exchange (losses)	(		283,714 )			(			206,191 )
Net gains (losses)	($ 107,018 )					($			5,914 )

56

xxiii. Income tax

(i) Income tax recognized in profit or loss

The major components of income tax expense are as follows:

			2020				2019
Income tax for the period
Occurred in the year			$ 24,351				$ 37,304
Prior year adjustment			8,527				3,085
Repatriation of offshore
funds			11,792				-
			44,670				40,389
Deferred tax
Occurred in the year			27,220				5,265
Prior year adjustment	(		2,067 )				8,593
			25,153				13,858
Income tax expenses
recognized in profit or loss			$ 69,823				$ 54,247

The reconciliation of accounting income to income tax expense is as follows:

follows:
			2020				2019
Net profits before tax			$ 190,013				$ 281,039
Income tax expenses at
statutory tax rate on net
profits before tax (20%)			$ 38,003				$ 56,208
Non-deductible expenses for
tax purposes			15,383				8,628
Tax-exempt incomes	(		1,049)		(		566)
Unrecognized loss
carryforwards			3,539		(		10,437)
Effect of consolidated entities
with different tax rates			6,826				11,105
Adjustments to prior years’
deferred tax expenses
recorded in the year	(		2,067)				8,593
Adjustments to prior years’
current income tax expenses
recorded in the year			8,527				3,085
Additional deductions for
R&D expenses	(		11,131)		(		22,369)
Repatriation of offshore funds			11,792				-
Income tax expenses
recognized in profit or loss			$ 69,823				$ 54,247

57

In July 2019, the President of Taiwan announced the promulgation of “The Management, Utilization, and Taxation of Repatriated Offshore Funds Act”, with new rules that if a profit-seeking enterprise applies for repatriation of funds within the approved period from August 15, 2019 to August 14, 2020, the tax rate applicable to the repatriation of funds is reduced from 20% to 8% and the repatriated funds should be deposited into a dedicated account, and the receiving bank will deduct the tax when the funds are deposited into the dedicated account. On August 26, 2020, the Consolidated Company was approved to remit $147,400 thousand (USD 5,000 thousand) by the National Taxation Bureau, Ministry of Finance, and the tax amount was $11,792 thousand based on the applicable tax rate of 8%.

(ii) Current income tax assets and liabilities

	December 31,	December 31,	December 31,	December 31,	December 31,	December 31,	December 31,	December 31,
			2020				2019
Current income tax assets
Tax refund receivable		$	634			$	16,135
Current tax liabilities
Income tax payables		$	8,250			$	7,839

(iii) Deferred tax assets and liabilities

Changes in deferred income tax assets and liabilities are as follows:

2020

2020
	Balance at
		the	Recognized					Balance at
	beginning of		in	profit or		Exchange		the	end of
	theyear			loss		difference		theyear
Deferred tax assets
Temporary difference
Leave payables	$	11,270	$	289		$	149	$	11,708
Defined benefit
pension plan		962	(	29 )			-		933
Unrealized loss on
decline in value of
inventories		63,407	(	642 )			972		63,737
Allowance for loss		16,211	(	7,521 )	(		18 )		8,672
Impairment of
property, plant and
equipment		2,022	(	796 )	(		10 )		1,216
Accrued expenses		12,893		2,987			280		16,160

(Continued on next page)

58

(Continued from previous page)

		Balance at	Balance at
			the		Recognized													Balance at
	beginning of					in	profit or					Exchange						the end of
		theyear					loss					difference						theyear
Unrealized exchange
gains	(		238 )				238						-						-
Depreciation of
property, plant and
equipment			-				48,770						795						49,565
Others			35,332		(		35,069	)					-						263
			141,859				8,227						2,168						152,254
Loss carryforwards			57,083		(		11,309	)					-						45,774
		$	198,942		($		3,082	)				$	2,168					$	198,028
Deferred tax liabilities
Temporary difference
Unrealized exchange
gains		$	-		( $		5,339	)				$	-			(		$	5,339	)
Financial assets at fair
value through
profit or loss			-		(		8,184	)		(			219	)		(			8,403	)
Depreciation of
property, plant and
equipment			-		(		8,548	)		(			101	)		(			8,649	)
		$	-		($		22,071	)		(		$	320	)		(		$	22,391	)

2019

2019
	Balance at
		the	Recognized				Balance at
	beginning of		in	profit or	Exchange		the	end of
	theyear			loss	difference		theyear
Deferred tax assets
Temporary difference
Leave payables	$	11,956	( $	309 )	( $	377 )	$	11,270
Defined benefit
pension plan		1,001	(	39 )		-		962
Unrealized loss on
decline in value
of inventories		71,156	(	5,409 )	(	2,340 )		63,407
Allowance for loss		15,201		1,154	(	144 )		16,211
Impairment of
property, plant
and equipment		2,530	(	477 )	(	31 )		2,022

(Continued on next page)

59

(Continued from previous page)

			Balance at	Balance at
				the		Recognized											Balance at
		beginning of					in	profit or					Exchange				the end of
			theyear					loss					difference				theyear
	Accrued expenses		$	16,471		( $		3,122	)		(		$	456	)		$	12,893
	Unrealized
	exchange gains			2,863		(		3,101	)					-			(	238 )
	Others			39,206		(		2,168	)		(			1,706	)			35,332
				160,384		(		13,471	)		(			5,054	)			141,859
Loss	carryforwards			57,470		(		387	)					-				57,083
			$	217,854		($		13,858	)		(		$	5,054	)		$	198,942

• (iv) Unused loss carryforwards for deferred tax assets not recognized in the consolidated balance sheets

consolidated balance sheets
	December 31,			December		31,
		2020			2019
Loss carryforwards
Expire in 2029		$ 17,693			$	-

• (v) Information on unused loss carryforwards

Information on loss carryforwards for the year ended December 31, 2020 is as follows:

ws:	ws:	ws:
Not yet used
	balance		Finalyear of use
	$ 149,134		2027
	71,149		2028
	26,278		2029
	$ 246,561

• (vi) Income tax assessment

The Company’s income tax returns have been assessed by the tax authorities up to 2018, but not yet for 2019.

60

xxiv. Earnings per share

Weighted-average number of shares of common stock used to calculate earnings per share is as follows:

Net profits for the year

			2020			2019
Net profits used to calculate
basic earnings per share			$ 120,190			$ 226,792
Net profits used to calculate
diluted earnings per share			$ 120,190			$ 226,792
Number of shares					Unit: Thousand shares
			2020			2019
Weighted-average number of
shares of common stock
used to calculate basic
earnings per share			304,024			307,536
Impact of potential common
stock with dilutive effect:
Remuneration to
employees			540			731
Weighted-average number of
shares of common stock
used to calculate diluted
earnings per share			304,564			308,267

If the Consolidated Company may choose to have the employee compensation distributed via a stock or cash dividend, the calculation of the share assumes that the bonus to with a stock diluted earnings per employees is dividend distributed, with the weighted average number of shares outstanding included when the potential common stock has a diluted effect. The diluting effect of these potential common shares also continues to be considered in the calculation of diluted share before the number of shares awarded earnings per to employees in the following year’s resolution.

xxv.

Capital risk management

The Consolidated Company engages in capital management to ensure that the Group’s enterprises can maximize shareholder returns by optimizing debt and equity balances while continuing to operate.

The Consolidated Company’s capital structure consists of the Consolidated Company’s net debt (i.e., borrowings less cash and cash equivalents) and equity

61

attributable to the shareholders of the Company (i.e., capital stock, capital surplus, retained earnings and other equity).

The Consolidated Company is not subject to any other external capital requirements.

The Consolidated Company’s key management reviews the Group’s capital structure annually, which includes consideration of the cost of various types of capital and the associated risks. The Consolidated Company will balance its overall capital structure by paying dividends, issuing new shares, repurchasing shares and issuing new debt or paying off old debt, as recommended by key management.

xxvi. Disposal of subsidiary

• (i) On August 10, 2020, the Board of Directors of the Consolidated Company approved the liquidation of ICHIA INTERNATIONAL, and the liquidation was completed and a liquidation certificate was obtained on September 28, 2020.

• (ii) Repatriated funds of liquidated stock

ICHIA INTERNATIONAL Cash and cash equivalents (repatriated funds of liquidated stock) $ 22,772

• (iii) Analysis of lost of controlled assets and liabilities at the date of loss of control

			Disposal of ICHIA	Disposal of ICHIA	Disposal of ICHIA
			INTERNATIONAL
Current asset
Cash	and	cash
equivalents				$ 22,772
Net assets disposed of				$ 22,772

• (iv) Gain on disposal of subsidiary

					2020
Repatriated	funds	of
liquidated	stock			$	22,772
Net assets disposed of			(		22,772 )
Gain on disposal				$	-

62

(v) Net cash inflow from disposal of subsidiary

2020 Consideration received in cash and cash equivalents $ 22,772 Less: Cash and cash equivalents disposed of ( 22,772 ) - $

xxvii. Financial instruments

• (i) Fair value information - Financial instruments that are not measured at fair value

The Company’s management believes that the carrying amounts of financial assets and financial liabilities that are not measured at fair value on the balance sheet approximate their fair values

• Fair value information - Financial instruments measured at fair value on a

• (ii) recurring basis

• Fair value hierarchy

December 31, 2020

											Level 1							Level 2							Level 3						Total
Financial		assets	at fair
	value through profit
	or loss
Fund beneficiary
	certificates									$	20,001						$	-						$	-					$	20,001
Derivatives											-							33,860							-						33,860
										$	20,001						$	33,860						$	-					$	53,861
December 31, 2019
										Level 1							Level 2							Level 3							Total
Financial		assets	at fair
	value through profit
	or loss
Fund beneficiary
	certificates								$		71,145					$		-					$		-				$		71,145
Derivatives											-							6,622							-						6,622
									$		71,145					$		6,622					$		-				$		77,767
Financial		liabilities at
	fair value through
	profit or loss
Derivatives									$		-					$		98					$		-				$		98

63

There were no transfers between Level 1 and Level 2 fair value measurements in 2020 and 2019.

1. Level 2 fair value measurement valuation techniques and input values Class of financial

Class of financial
instruments	Valuation techniques and input values
Derivatives - Forward	The discounted cash flow method: The
foreign exchange	future cash flows are estimated based on
contracts	observable forward exchange rates and
	contracted exchange rates at the end of
	the period, and are discounted at a rate
	that reflects the credit risk of each
	counterparty.

(iii) Types of financial instruments

		December	December	31,	December 31,	December 31,
			2020			2019
Financial asset
Measured at fair value
through profit or loss
Mandatorily measured
at fair value through
profit or loss		$	53,861		$	77,767
Financial assets at amortized
cost (Note 1)			5,004,880			4,236,371
Financial liabilities
Measured at fair value
through profit or loss
Mandatorily measured
at fair value through
profit or loss				-		98
Measured at amortized cost
(Note 2)			3,512,720			2,409,827

Note 1: The balance includes financial assets measured at amortized cost, such as cash and cash equivalents, accounts receivable and refundable deposits.

Note 2: The balance includes financial liabilities measured at amortized cost, including short-term borrowings, accounts payable, other payables (excluding employee benefits payable), long-term borrowings due within one year, long-term borrowings and deposits received.

64

(iv) Financial risk management objectives and policies

The Consolidated Company’s major financial instruments include investments in equity instruments, accounts receivable, accounts payable, and borrowings. The risks associated with the operations of the above financial instruments include market risk (including exchange rate risk, interest rate risk and other price risk), credit risk and liquidity risk.

1. Market risk

The main financial risks to which the Consolidated Company is as a result of its activities are in exposed operating changes foreign currency exchange rates (see (1) below) and changes in interest rates (see (2) below).

• (1) Exchange rate risk

The Consolidated Company engages in foreign currency-denominated sales and purchase transactions, which the Consolidated to rate risk. The expose Company exchange Consolidated Company manages its exposure to exchange rate risk by using forward exchange contracts and options to the extent permitted by policy.

The carrying amounts of monetary assets and monetary liabilities denominated in non-functional currencies (including monetary items denominated in non-functional currencies that have been eliminated in the consolidated financial statements) and the carrying amounts of derivative instruments with exchange rate risk as of the balance sheet date are described in exposure Note 32.

Sensitivity analysis

The Consolidated Company is primarily affected by fluctuations in the USD exchange rate.

The following table details the sensitivity analysis of the Consolidated Company when the exchange rate of the NTD (functional currency) increases and decreases by 1% against each relevant foreign currency. 1% is the sensitivity percentage used for the Group’s internal reporting of exchange rate risk to key management and represents management’s assessment of the reasonably possible range of changes in foreign currency exchange

65

rates. The sensitivity analysis includes only outstanding foreign currency monetary items and forward exchange contracts designated as cash flow hedges, and adjusts their period-end translation by a 1% change in exchange rates. The negative amount for USD below represents the decrease in net profits before tax when NTD strengthens by 1% against USD, and the positive amount when NTD depreciates by 1% against USD.

					Impact of USD	Impact of USD	Impact of USD	Impact of USD
					2020			2019
Profit	or	loss		$	14,117			$ 11,005	(i)

• (i) Mainly derived from the Consolidated Company’s receivables and payables that were outstanding at the balance sheet date and not hedged for cash flow.

(2) Interest rate risk

The Consolidated Company’s bank deposits and borrowed funds carry both fixed and floating interest rates, resulting in interest rate risk.

The carrying amounts of financial assets and financial liabilities exposed to interest rate risk as of the balance sheet date were as follows:

		December 31,	December 31,	December 31,	December 31,
			2020		2019
Fair value interest rate
risk
-	Financial assets	$	820,210	$	572,457
-	Financial
	liabilities		620,882		273,844
Cash flow interest rate
risk
-	Financial
	liabilities		1,118,718		859,062

Sensitivity analysis

The following sensitivity analysis is based on the interest rate risk of derivative and non-derivative instruments as of the balance sheet date. For floating rate liabilities, the analysis assumes that the amount of the liability outstanding at the balance sheet date is

66

outstanding during the reporting period. The rate of change used in reporting interest rates internally to key management is a 0.25% basis point increase or decrease in interest rates, which also represents management’s assessment of the range of reasonably possible changes in interest rates.

If interest rates had increased/decreased by 0.25% basis points, with all other variables held constant, the Consolidated Company’s net profits before tax would have decreased/increased by $2,797 thousand and $2,148 thousand for 2020 and 2019, respectively.

• (3) Other price risk

The Consolidated Company has equity price risk due to its investment in equity securities.

Sensitivity analysis

The following sensitivity analysis is based on the equity price exposure at the balance sheet date.

If the equity price had increased/decreased by 10%, profits or losses before tax for 2020 and 2019 would have increased/decreased by $2,000 thousand and $7,115 thousand, respectively, due to the increase/decrease in fair value of financial assets measured at fair value through profit or loss. There was no significant change in the sensitivity of the Consolidated Company’s investment in equity securities compared with the previous year.

2.

• Credit risk

Credit risk refers to the risk of financial loss due to default on contract obligations by the counterparties. As of the balance sheet date, the Consolidated Company’s maximum exposure to credit risk of financial loss due to non-performance by counterparties and the provision of financial guarantees by the Consolidated Company was mainly due to:

• (1) The carrying amount of financial assets recognized in the consolidated balance sheets.

67

• (2) The maximum amount that the Consolidated Company may be required to pay for the provision of financial guarantees, regardless of the likelihood of occurrence.

The Consolidated Company’s primary potential credit risk arises from financial instruments such as cash and cash equivalents and accounts receivable. The Consolidated Company’s cash is deposited with various banks and financial institutions. The cash is held in time deposits with maturities of approximately 3 months, which have high liquidity and flexibility and enjoy high interest rates with near-zero risk. The Consolidated controls its to the credit risk of Company exposure each financial institution and believes that the Consolidated Company’s cash and cash equivalents are not subject to significant concentrations of credit risk.

The counterparties of the Consolidated Company’s accounts receivable are customers in the electronics industry. In order to reduce the credit risk of accounts receivable, the Consolidated Company’s management has assigned a dedicated team to establish credit management rules and regulations and to be responsible for credit limit determination, credit approval and other monitoring procedures for the credit management of accounts receivable.

In addition, the Consolidated Company reviews the recoverable amounts of accounts receivable on a case-by-case basis every month to ensure that appropriate impairment losses have been recorded for uncollectible accounts receivable. Accordingly, the Consolidated Company’s management believes that the Consolidated Company’s credit risk is limited.

3.

The Consolidated Company’s credit risk is mainly concentrated in the Consolidated Company’s top ten customers. As of December 31, 2020 and 2019, the percentage of total accounts receivable from the aforementioned customers was 58.03% and 59.28%, respectively. Liquidity risk

The Consolidated Company manages and maintains sufficient balance of cash and cash equivalents to support the Group’s operations and mitigate the impact of cash flow fluctuations. The Consolidated Company’s management monitors the use of bank financing facilities

68

and ensures compliance with the terms and conditions of the borrowing agreements.

Bank borrowings are an important source of liquidity for the Consolidated Company. See (2) below for a description of the Consolidated Company’s unused financing facilities as of December 31, 2020 and 2019.

(1) Liquidity and interest rate risk of non-derivative financial liabilities.

The analysis of the remaining contract maturities of non-derivative financial liabilities is prepared using the undiscounted cash flows of financial liabilities (including principal and estimated interest) based on the earliest possible date on which the Consolidated Company could be required to make repayment. Therefore, bank borrowings that the Consolidated Company may be required to repay immediately are shown in the the earliest period below, without regard to the probability that the bank will enforce the right immediately; the maturity analysis of other non-derivative financial liabilities is prepared based on the contract repayment dates.

December 31, 2020

			Less than 1											More than	3
Non-derivative			year			1 to 2years				2 to 3years				years				Total
financial liabilities
Accounts payable			$ 1,693,628			$	-			$	-			$	-			$ 1,693,628
Other payables			70,732				-				-				-			70,732
Borrowings			1,614,052				126,527				-				-			1,740,579
Lease liabilities			1,332				1,332				666				-			3,330
			$ 3,379,744			$	127,859			$	666			$	-			$ 3,508,269

December 31, 2019

			Less than 1											More than	More than	3
Non-derivative			year			1 to 2years				2 to 3years					years				Total
financial liabilities
Accounts payable			$ 1,218,582			$	-			$	-			$		-			$ 1,218,582
Other payables			50,004				-				-					-			50,004
Borrowings			839,855				-				-				293,996				1,133,851
			$ 2,108,441			$	-			$	-			$	293,996				$ 2,402,437

69

(2) Financing facilities

December 31, 2020 December 31, 2019 Unsecured bank borrowing facility (extendable by mutual consent) Financing facilities used $ 1,445,882 $ 673,844 Financing facilities unused 3,227,395 2,984,906 $ 4,673,277 $ 3,658,750 Secured bank borrowing facility (extendable by mutual consent) Financing facilities used $ 500,000 $ 500,000 Financing facilities unused - - $ 500,000 $ 500,000

xxviii. Related party transactions

All transactions, account balances, incomes and expenses between the Company and its subsidiaries, which are related parties of the Company, are eliminated upon consolidation and are therefore not disclosed in this note. In addition to those disclosed in other notes, the transactions between the Company and other related parties are as follows:

Key management remuneration

Key management remuneration
		2020			2019
Short-term employee benefits		$ 20,521			$ 21,105
Post-employment benefits		358			495
		$ 20,879			$ 21,600

The remuneration of directors and other key management is determined by the Remuneration Committee based on individual performance and market trends.

70

xxix. Pledged assets

The following assets have been pledged as collaterals for borrowings and tariff guarantees for imported raw materials:

	December 31,	December 31,	December 31,	December 31,	December 31,	December 31,	December 31,	December 31,
			2020				2019
Pledged time deposits
(recorded as financial assets
at amortized cost - current)		$	13,094			$	14,052
Pledged time deposits
(recorded as financial assets
at amortized cost -
noncurrent)			2,127				2,067
Self-owned land			227,663				227,663
Buildings - net			79,568				82,561
		$	322,452			$	326,343

xxx. Significant contingent liabilities and unrecognized contract commitments

• (i) The total contract amount of the equipment contracted by the Consolidated Company with vendors was NTD 236,409 thousand. As of December 31, 2020, the Consolidated Company had paid NTD 115,808 thousand (recorded as prepayment for equipment) and the remaining NTD 120,601 thousand had not been paid.

• (ii) As of December 31, 2020, the Consolidated Company had guaranteed for cooperative education and provided a reserve for the issuance of refundable deposit notes (including long-term borrowings and short-term borrowings) of approximately NTD 960,360 thousand and USD 8,500 thousand, respectively.

• (iii) As of December 31, 2020, the Consolidated Company had received NTD 8,090 thousand in guarantee deposit notes for the purchase of equipment and construction.

• xxxi. Other matters

The Consolidated Company was affected by the global pandemic of COVID-19 pneumonia and delayed the resumption of work at some of its plants, resulting in a significant decrease in operating revenues from February to June of 2020. With the slowdown of the epidemic and the relaxation of policies, the Consolidated Company expects that its operations will gradually return to normal.

In response to the impact of the outbreak, the Consolidated Company took the following actions:

71

(i) Adjustment of business strategy

The Consolidated Company’s business strategy has not been adjusted due to the impact of the epidemic, but the Consolidated Company will remain cautious about the future development of the epidemic and the impact on end-use demand.

• (ii) Financing strategy

In view of the possible impact of the uncertainty of the COVID-19 epidemic in the future, the Consolidated Company will increase its medium-term and long-term financing positions and raise medium-term and long-term operating funds to establish a stable source of medium-term and long-term operating funds for the Company.

(iii) Government relief measures

The Consolidated Company has applied for government subsidies for salaries, working capital, interest and rent, and has received $5,017 thousand of approved funds (accounted for as other incomes).

xxxii. Information on foreign currency assets and liabilities with significant impact.

The following information is expressed in aggregate in foreign currencies other than the entities of the Consolidated Company’s functional currencies, and the exchange rates disclosed represent the rates at which such foreign currencies were converted to the functional currency. Foreign currency assets and liabilities with significant impact are as follows:

December 31, 2020

			Foreign			Carrying
		currency		Exchange rate		amount
Foreign currency
assets
Monetary items
USD		$	79,426	28.48 (USD : NTD)		$ 2,261,953
USD			71,604	6.5249 (USD : RMB)		2,039,281
						$ 4,301,234
Foreign currency
liabilities
Monetary items
USD			70,291	28.48 (USD : NTD)		$ 2,002,007
USD			31,166	6.5249 (USD : RMB)		887,553
						$ 2,889,560

72

December 31, 2019

			Foreign			Carrying
		currency		Exchange rate		amount
Foreign currency
assets
Monetary items
USD		$	63,421	29.98 (USD : NTD)		$ 1,901,374
USD			47,843	6.9762 (USD : RMB)		1,434,459
						$ 3,335,833
Foreign currency
liabilities
Monetary items
USD			53,856	29.98 (USD : NTD)		$ 1,614,487
USD			20,711	6.9762 (USD : RMB)		620,809
						$ 2,235,296

The Consolidated Company’s foreign currency exchange gains and losses (realized and unrealized) amounted to $107,018 thousand and $5,914 thousand for 2020 and 2019, respectively. Due to the wide variety of foreign currency transactions and the functional currencies of the entities of the Group, it is not possible to disclose the exchange gains and losses by each major currency.

xxxiii. Additional disclosure

(i) Significant transactions and (ii) information on the investee enterprises:

No.	Item	Description
1	Lendingfunds to others	Exhibit 1
2	Endorsements andguarantees for others.	Exhibit 2
3	Marketable securities held at the end of the period. (Excluding investment in subsidiaries, affiliated enterprises andjoint venture interests)	Exhibit 3
4	The cumulative amount of purchases or sales of the same marketable securities reaches at least NTD 300 million or 20% of thepaid-in capital.	None
5	Acquisition of real estate amounting to at least NTD 300 million or 20% of thepaid-in capital.	None
6	Disposal of real estate amounting to at least NTD 300 million or 20% of thepaid-in capital.	None
7	The amount of purchase or sale with related parties is at least NTD 100 million or 20% of thepaid-in capital.	Exhibit 4
8	Receivables from related parties amounting to at least NTD 100 million or 20% of thepaid-in capital.	Exhibit 5
9	Engagement in derivative transactions.	Note 7
10	Others: Business relationships and significant transactions	Exhibit 8

73

No.	Item	Description
	between the parent and subsidiaries and between subsidiaries and the amounts involved.
11	Information on investees	Exhibit 6
Information on investment in Mainland China:
No.	Item	Description
1	The name of the investees in Mainland China, principal business, paid-in capital, investment methods, capital outward and inward remittances, shareholding, investment gains and losses, investment carrying amount at the end of the period, repatriated investment gains and losses, and investment quota for Mainland China.	Exhibit 7
2	The following significant transactions with investees in Mainland China, directly or indirectly through third regions, and their prices, payment terms, and unrealizedgains or losses:
	(1) Amounts and percentages of purchases and relatedpayables at the end of theperiod.	Exhibit 4
	(2) Amounts and percentages of sales and related receivables at the end of theperiod.	None
	(3) The amount of property transactions and the amount of gain or loss resulting from such transactions.	None
	(4) The ending balance of endorsement and guarantee of notes orprovision of collateral and itspurpose.	None
	(5) The maximum balance, ending balance, interest rate range and total current interest amount of financial accommodation.	None
	(6) Other transactions that have a significant effect on the current profit or loss or financial position, such as theprovision or receipt of services.	None

(iii) Information on investment in Mainland China:

(iv) Information on major shareholders:

Name, number and percentage of shares held by shareholders with 5% or more of the shares: Exhibit 9.

xxxiv. Segment Information

(i) Financial information by industry and segment

The information provided to the chief business decision maker for allocating resources and measuring segment performance focuses on the type of product or service delivered or provided. In accordance with IFRS 8 the Consolidated does not have an “Operating Segments”, Company operating segment that meets the requirements of the IFRS, and the

74

(ii)

Consolidated Company’s business is concentrated on the production and sale of flexible boards and keypads, and there is no division of industrial segments, so the segment revenues, operating results and segment assets are the same as those in the income statement and balance sheet. Regional information

The Consolidated Company operates in two main regions - Asia, the Americas and Europe.

Information on the Consolidated Company’s revenues from external customers by region of operations and noncurrent assets by region of assets is presented below:

			Revenues	from external	from external	from external	from external
			customers								Noncurrent assets
									December 31,				December			31,
			2020				2019				2020				2019
Americas		$	183,191			$	195,830			$	24,790			$	27,003
Europe			39,827				39,288				26,231				27,855
Asia			5,257,595				5,912,503				3,060,335				3,114,404
Africa			22,229				1,154				-					-
Oceania			-				171				-					-
		$	5,502,842			$	6,148,946			$	3,111,356			$	3,169,262

Noncurrent assets exclude financial instruments, deferred tax assets and assets arising from net defined benefit assets.

(iii) Information on major customers

Customers whose revenues accounted for more than 10% of the amount of revenues on the consolidated income statements were as follows:

			2020	2020	2020				2019	2019	2019
					Percentage						Percentage of
					of revenues						revenues on
						on the						the
					consolidated						consolidated
						income						income
Type of customer			Amount		statement %				Amount		statement %
Company A		$	715,724			13			$ 1,264,842			20
Company T			499,350			9			665,104			11
		$	1,215,074			22			$ 1,929,946			31

• (iv) Revenues from major products

Analysis of the revenues of the Consolidated Company’s major products is as follows:

				2020				2019
Electronic	components		$	5,502,842			$	6,148,946

75

Unit: NTD and foreign currency in thousands, unless otherwise indicated

ICHIA TECHNOLOGIES INC. and subsidiaries

Lending funds to others

January 1 to December 31, 2020

Exhibit 1

No. (Note 1)	The lender company of funds	The borrower of funds	Transaction	Related party or not	Maximum balance for the period	Balance at the end of the period	Actual amounts drawn	Interest rate range	Nature of funds lending (Note 2)	Amount of business transactions	Reasons for the necessity of short-term financing	Amount of allowance for bad debts	Collateral	Collateral	The limit for individual funds lending (Note 3)	The limit for total funds lending (Note 3)	Remarks
													Name	Value
1	BVI-ICHIA	ICHIA Technologies Hungary Limited Liability Company ICHIA TECHNOLOGIES INC.	Other receivables - related party Other receivables - related party	Yes Yes	$ 117,397 ( USD 3,850 ) 941,895 ( USD 30,800 )	$ 55,251 ( USD 1,940 ) 378,784 ( USD 13,300 )	$ 54,397 ( USD 1,910 ) 378,784 ( USD 13,300 )	- -	2 2	$ - -	Operating turnover Operating turnover	$ - -	None None	$ - -	$ 10,152,848 (Note 4) 10,152,848 (Note 4)	$ 10,152,848 (Note 4) 10,152,848 (Note 4)

Note 1: The number column is filled out as follows:

• (1) Fill in 0 for the issuer.

(2) Investees are numbered sequentially from Arabic numeral 1 according to the company type.

Note 2: The nature of the funds lending is described as follows:

• (1) Fill in 1 for those who have business transactions.

(2) Fill in 2 for those in need of short-term financing.

Note 3: Calculation and amount of funds lending limits.

• i. The limit for individual funds lending

• (1) The amount of funds lending of the Company to individual counterparties is limited to 30% of the Company’s current net worth (December 31, 2020), in accordance with the Company’s Operating Procedures for Lending Funds to Others.

• (2) The amount of funds lending of an investee to individual counterparties is limited to 200% of the investee’s current net worth (December 31, 2020), in accordance with the investee’s Operating Procedures for Lending Funds to Others.

• (3) The amount of funds lending of BVI-ICHIA to the Group’s parent company is limited to 200% of BVI-ICHIA’s current net worth (December 31, 2020) in accordance with BVI-ICHIA.’s Operating Procedures for Lending Funds to Others.

• ii. The limit for total funds lending:

• (1) The cumulative amount of funds lending of the Company to external counterparties is limited to 40% of the Company’s current net worth (December 31, 2020), in accordance with the Company’s Operating Procedures for Lending Funds to Others.

• (2) The cumulative amount of funds lending of an investee is limited to 200% of the investee’s current net worth (December 31, 2020), in accordance with the investee’s Operating Procedures for Lending Funds to Others. (3) The cumulative amount of funds lending of BVI-ICHIA to the Group’s parent company is limited to 200% of BVI-ICHIA’s current net worth (December 31, 2020) in accordance with BVI-ICHIA’s Operating Procedures for Lending Funds to Others.

• (2) The cumulative amount of funds lending of an investee is limited to 200% of the investee’s current net worth (December 31, 2020), in accordance with the investee’s Operating Procedures for Lending Funds to Others.

iii. The Company’s funds lending limit was calculated based on the net worth of the Company’s financial statements reviewed by CPA; the investee’s funds lending limit was calculated based on the net worth of the investee’s financial statements in foreign currencies reviewed by CPA. iv. The funds lending limits here are presented in NTD. If foreign currencies are involved, they are translated into NTD at the prevailing exchange rate on the date of the financial statements. (The spot exchange rate for USD as of December 31, 2020 was 28.48.)

Note 4: The funds lending between companies outside of the Republic of China in which the Company directly or indirectly holds 100% of the voting rights is not subject to the funds lending limits in Note 3.

76

ICHIA TECHNOLOGIES INC. and subsidiaries Endorsements and guarantees for others

January 1 to December 31, 2020

Exhibit 2

Unit: NTD and foreign currency in thousands, unless otherwise indicated

No. (Note 1)	Endorser and guarantor company name	Counterparty endorsed and guaranteed	Counterparty endorsed and guaranteed	Endorsement and guarantee limit for a single enterprise (Note 3)	Maximum endorsement and guarantee balance for the period	Endorsement and guarantee balance at the end of the period	Actual amounts drawn	Amount of endorsement and guarantee by property	Percentage of cumulative endorsement and guarantee to net worth of the most recent financial statements (%)	Maximum endorsement and guarantee limit (Note 3)	Parent company endorsement and guarantee for subsidiary	Subsidiary endorsement and guarantee for parent company	Endorse ment and guarantee for Mainland China	Remarks
		Company name	Relationship (Note 2)
0	ICHIA TECHNOLOGIES INC.	ICHIA HOLDINGS (B.V.I) Co., Ltd.	(2)	$ 5,133,136	$ 538,355 ( USD 11,000 ) ( NTD 200,000 )	$ -	$ -	$ -	-	$ 5,703,484	Y	N	N

Note 1: The number column is filled out as follows:

• (1) Fill in 0 for the issuer.

• (2) Investees are numbered sequentially from Arabic numeral 1 according to the company type.

• Note 2: There are seven types of relationships with the counterparty of endorsement and guarantee, indicating the type suffices:

• (1) Companies with business relationship.

• (2) Subsidiaries in which the Company directly or indirectly holds more than 50% of the voting shares.

• (3) Companies that directly or indirectly hold more than 50% of the voting rights in the Company.

• (4) Between companies in which the Company directly or indirectly holds more than 90% of the voting shares.

• (5) Intra-industry or co-founded companies with mutual insurance in accordance with contractual provisions based on the need for contracted work.

• (6) Companies that are endorsed and guaranteed by all contributing shareholders in proportion to their shareholdings as a result of joint investment.

• (7) Intra-industry companies engaged in joint guarantees for the performance of the pre-sale house sales contract in accordance with the regulations of the Consumer Protection Act.

• Note 3: Calculation of endorsement and guarantee limit and amount.

• i. Endorsement and guarantee limit for a single enterprise:

  • (1) The amount of endorsement and guarantee of the Company to a single enterprise is limited to 80% of the Company’s current net worth (December 31, 2020), in accordance with the Company’s Operating Procedures for Endorsement and Guarantee.

  • (2) The amount of endorsement and guarantee of the Company to individual overseas affiliate is limited to 90% of the Company’s current net worth (December 31, 2020), in accordance with the Company’s Operating Procedures for Endorsement and Guarantee.

• ii. Maximum Endorsement and Guarantee limit:

  • (1) The cumulative amount of endorsement and guarantee of the Company to external counterparties is limited to 100% of the Company’s current net worth (December 31, 2020), in accordance with the Company’s Operating Procedures for Endorsement and Guarantee.

77

ICHIA TECHNOLOGIES INC. and subsidiaries

Marketable securities held at the end of the period

December 31, 2020

Exhibit 3

Unit: NTD and foreign currency in thousands, unless otherwise indicated

Subsidiaries held	Type and name of marketable securities (Note 1)	Relationship with the issuer of marketable securities	Account in the book	Period end	Period end	Period end	Period end	Remarks
				Number of shares (thousand shares)	Carrying amount	Shareholdi ng (%)	Fair value
ICHIA TECHNOLOGIES INC.	Fund beneficiary certificates Franklin Templeton SinoAm Money Market Fund	None	Financial assets at fair value through profit or loss - Current	1,918	$ 20,001	-	$ 20,001

Note 1: Marketable securities referred to here are stocks, bonds, beneficiary certificates and marketable securities derived from the above items that fall within the scope of IFRS 9 “Financial Instruments”.

Note 2: For information on investments in subsidiaries, affiliates and joint venture interests, please refer to Exhibit 6 and Exhibit 7.

78

ICHIA TECHNOLOGIES INC. and subsidiaries

The amount of purchase or sale with related parties is at least NTD 100 million or 20% of the paid-in capital.

January 1 to December 31, 2020

Exhibit 4

Unit: NTD thousand, unless otherwise indicated

Purchase (sale) company	Trading partner name	Relationship	Transactions	Transactions	Transactions	Transactions	The circumstances and reasons why the trading terms are different from those of ordinary transactions	The circumstances and reasons why the trading terms are different from those of ordinary transactions	Notes and accounts receivable (payable)	Notes and accounts receivable (payable)	Remarks
			Purchase (sale)	Amount	Purchase (sale) company	Credit period	Unit price	Credit period	Balance	Percentage of total notes and accounts receivable (payable)
ICHIA TECHNOLOGIES INC.	ICHIA SUZHOU ZHONGSHAN ICHIA	The same affiliate 〃	Purchase 〃	$ 2,830,735 357,188	84 10	30 days from monthly cut-off day 〃	- -	- -	($ 1,336,428) ( 182,497)	( 88 ) ( 12 )

79

ICHIA TECHNOLOGIES INC. and subsidiaries

Receivables from related parties amounting to at least NTD 100 million or 20% of the paid-in capital.

December 31, 2020

Exhibit 5

Unit: NTD thousand, unless otherwise indicated

Companies with accounts receivable	Trading partner name	Relationship	Balance of receivables from related parties	Turnover rate	Overdue receivables from related parties	Overdue receivables from related parties	Receivables from related parties collected during the subsequent period	Amount of allowance for bad debts
					Amount	Processing method
ICHIA SUZHOU ZHONGSHAN ICHIA BVI-ICHIA	ICHIA TECHNOLOGIES INC. ICHIA TECHNOLOGIES INC. ICHIA TECHNOLOGIES INC.	The same affiliate The same affiliate The same affiliate	Accounts receivable $ 1,336,428 Accounts receivable 182,497 Other receivables 378,784	2.38 2.77 Note	$ - - -	－ － －	$ 534,134 77,255 -	$ - - -

Note: The turnover rate is not calculated because it is mainly due to other receivables arising from the lending of funds.

80

ICHIA TECHNOLOGIES INC. and subsidiaries

Information on investees, locations, ......, etc.

January 1 to December 31, 2020

Exhibit 6

Unit: NTD and foreign currency in thousands, unless otherwise indicated

Investor	Investee	Location	Principle business	Original investment amount	Original investment amount	Holdingat the end ofperiod	Holdingat the end ofperiod	Holdingat the end ofperiod	Profit or loss of investees for the period	Investment gain (loss) recognized in the period	Remarks
				The end of the period	The end of last year	Number of shares (thousand shares)	Percentag e %	Carrying amount
ICHIA TECHNOLOGIES INC. ICHIA HOLDINGS (B.V.I) Co., Ltd. ICHIA UK. LTD.	ICHIA HOLDINGS (B.V.I) Co., Ltd. ICHIA USA Inc. ICHIA RUBBER INDUSTRY (M) Sdn. Bhd. ICHIA UK. LTD. ICHIA HOLDINGS (H.K.) Co., Ltd. ICHIA INTERNATIONAL ICHIA Technologies Hungary Limited Liability Company	P.O. BOX957, Offshore Incorporation Centre, Road Town, Tortola, British Virgin Islands 1057 Tierra Del Rey, Suite G ,Chula Vista, CA 91910 U.S.A. 997-A, Solok Pervshaan Tiga Prai Industrial Estate 13600 Prai, P.W. West Halasia Malaysia P.O. Box 3152, Town, Tortola, British Virgin Islands Room 1004, National Health Centre, 151 Gloucester Road, Wanchai, Hong Kong P.O. BOX 3152, ROAD TOWN. Tortola \british Virgin Islands 2900 Komarom Ipari Park Banki Domat U. 2. Hungary	Various investment businesses International trading of various electronic components and materials Manufacturing, processing and trading of various electronic components and materials for various electronic and telecommunication computers. Various investment businesses Various investment businesses International trading of various electronic components and materials Manufacturing, processing and trading of rubber and plastic keypads	$ 3,532,566 ( USD 108,693 ) 118,309 ( USD 4,106 ) 86,152 ( USD 3,025 ) 140,292 ( USD 4,926 ) 2,136,000 ( USD 75,000 ) - 140,292 ( USD 4,926 )	$ 3,532,566 ( USD 108,693 ) 118,309 ( USD 4,106 ) 86,152 ( USD 3,025 ) 140,292 ( USD 4,926 ) 2,136,000 ( USD 75,000 ) 307,584 ( USD 10,800 ) 140,292 ( USD 4,926 )	108,693 4,106 9,000 4,926 75,000 - -	100 100 100 100 100 - 100	$ 5,067,096 37,283 95,636 ( USD 3,358 ) ( 30,901 ) ( USD -1,085 ) 3,799,175 ( USD 133,398 ) - ( 30,901 ) ( USD -1,085 )	$ 58,730 2,428 7,376 ( USD 259 ) ( 1,424 ) ( USD -50 ) 45,967 ( USD 1,614 ) 3,218 ( USD 113 ) ( 1,424 ) ( USD -50 )	$ 64,648 2,428 7,376 ( USD 259 ) ( 1,424 ) ( USD -50 ) 45,967 ( USD 1,614 ) 3,218 ( USD 113 ) ( 1,424 ) ( USD -50 )	Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Note 2 Subsidiary

Note 1: Please refer to Exhibit 7 for information on the investees in Mainland China.

Note 2: ICHIA INTERNATIONAL was liquidated by a resolution of the Board of Directors on August 10, 2020, and all liquidation procedures were completed on September 28, 2020, ending its operations.

81

Unit: NTD and foreign currency in thousands, unless otherwise indicated

ICHIA TECHNOLOGIES INC. and subsidiaries

Information on investment in Mainland China

January 1 to December 31, 2020

Exhibit 7

1. The name of the investees in Mainland China, principal business, paid-in capital, investment methods, capital outward and inward remittances, shareholding, investment gains and losses, investment carrying amount, repatriated

investment gains and losses:

Investee in Mainland China	Principle business	Paid-in capital	Type of investment (Note 1)	Accumulated investment amount remitted from Taiwan at the beginning of the period	Amount of investment remitted or recovered duringtheperiod	Amount of investment remitted or recovered duringtheperiod	Accumulated investment amount remitted from Taiwan at the end of the period	Profit or loss of investees for the period	Shareholding percentage of the Company’s direct or indirect investment	Investment gain (loss) recognized in the period (Note 2)	Carrying amount of investments at the end of the period	Investment income remitted back as of the end of the period
					Remittance	Recovery
ICHIA SUZHOU ZHONGSHAN ICHIA	Rubber, plastic keypads and flexible printed circuit boards Rubber and plastic keypads	$ 2,477,760 ( USD 87,000 ) 484,160 ( USD 17,000 )	(ii) B (ii) A	$ 2,477,760 ( USD 87,000 ) 484,160 ( USD 17,000 )	$ - -	$ - -	$ 2,477,760 ( USD 87,000 ) 484,160 ( USD 17,000 )	$ 55,992 ( USD 1,966 ) 2,706 ( USD 95 )	100 100	$ 46,052 ( USD 1,617 ) (ii) B 3,389 ( USD 119 ) (ii)B	$ 3,796,811 ( USD 133,315 ) 743,641 ( USD 26,111 )	$ - -

2. Investment quota for Mainland China. Accumulated amount of investment from Taiwan to Mainland China at the end of theperiod Amount of investment approved by the Investment Commission, Ministry of Economic Affairs Investment quota for mainland China as stipulated by the Investment Commission,Ministryof Economic Affairs NTD 2,961,920 ( USD 104,000 ) NTD 2,961,920 ( USD 104,000 ) NTD 3,422,090 ( USD 120,158 )	2. Investment quota for Mainland China. Accumulated amount of investment from Taiwan to Mainland China at the end of theperiod Amount of investment approved by the Investment Commission, Ministry of Economic Affairs Investment quota for mainland China as stipulated by the Investment Commission,Ministryof Economic Affairs NTD 2,961,920 ( USD 104,000 ) NTD 2,961,920 ( USD 104,000 ) NTD 3,422,090 ( USD 120,158 )	2. Investment quota for Mainland China. Accumulated amount of investment from Taiwan to Mainland China at the end of theperiod Amount of investment approved by the Investment Commission, Ministry of Economic Affairs Investment quota for mainland China as stipulated by the Investment Commission,Ministryof Economic Affairs NTD 2,961,920 ( USD 104,000 ) NTD 2,961,920 ( USD 104,000 ) NTD 3,422,090 ( USD 120,158 )	2. Investment quota for Mainland China. Accumulated amount of investment from Taiwan to Mainland China at the end of theperiod Amount of investment approved by the Investment Commission, Ministry of Economic Affairs Investment quota for mainland China as stipulated by the Investment Commission,Ministryof Economic Affairs NTD 2,961,920 ( USD 104,000 ) NTD 2,961,920 ( USD 104,000 ) NTD 3,422,090 ( USD 120,158 )
	Accumulated amount of investment from Taiwan to Mainland China at the end of theperiod	Amount of investment approved by the Investment Commission, Ministry of Economic Affairs	Investment quota for mainland China as stipulated by the Investment Commission,Ministryof Economic Affairs
	NTD 2,961,920 ( USD 104,000 )	NTD 2,961,920 ( USD 104,000 )	NTD 3,422,090 ( USD 120,158 )

Note 1: The investment methods can be divided into the following three types, indicating as such suffices:

• (i) Investment in Mainland China directly.

• (ii) Investment in Mainland China through companies in third regions (please specify the investment company of the third region). A. BVI-ICHIA

  • B. ICHIA HOLDINGS (H.K.) Co., Ltd.

• (iii) Other types.

• Note 2: In the column of investment gain or loss recognized in the current period:

• (i) If the investment is under preparation and there is no investment gain or loss, it should be noted.

• (ii) The basis for recognizing investment gains or losses is divided into the following three categories, which should be specified.

  • A. The financial statements have been audited by an international CPA firm with which CPA firms in the Republic of China have a cooperative relationship.

  • B. The financial statements have been audited by the attesting CPA of the parent company in Taiwan. C. Others.

• Note 3: The figures in this Exhibit are presented in NTD. Where foreign currencies are involved, the exchange rate at the date of financial reporting is used to translate into NTD. (The spot exchange rate for USD as of December 31, 2020 was 28.48)

82

ICHIA TECHNOLOGIES INC. and subsidiaries

Business relationships and significant transactions between the parent and subsidiaries and between subsidiaries and the amounts involved. January 1 to December 31, 2020

Exhibit 8

Unit: NTD thousand

No. (Note 1)	Trader name	Counterparty	Relationship with trader (Note 2)	Transactions	Transactions	Transactions	Transactions
				Account	Amount	Trading terms (Note 4)	Percentage of consolidated total revenues or total assets (Note 3)
0 1 2	ICHIA TECHNOLOGIES INC. BVI-ICHIA ICHIA SUZHOU	ICHIA RUBBER INDUSTRY (M) Sdn. Bhd. “ ICHIA SUZHOU “ “ “ ZHONGSHAN ICHIA “ BVI-ICHIA ICHIA USA Inc. “ ICHIA Technologies Hungary Limited Liability Company “ “ ICHIA USA Inc. “ ZHONGSHAN ICHIA “ “	1 1 1 1 1 1 1 1 1 1 1 3 3 3 3 3 3 3 3	Sale Accounts payable Purchase Other incomes Other receivables Accounts payable Purchase Accounts payable Current accounts - payables to related parties Sale Accounts receivable Current accounts - receivables to related parties Non-operating receivables Temporary payments Sale Accounts receivable Purchase Sale Accounts receivable	$ 178 8 2,830,735 2,122 41,693 1,336,428 357,188 182,497 378,784 1,734 1,707 54,397 1,381 1,114 21,273 4,270 1,428 6,165 30	－ － － － － － － － － － － － － － － － － － －	- - 51 - - 14 6 2 4 - - 1 - - - - - - -

(Continued on next page)

83

(Continued from previous page)

No. (Note)	Trader name	Counterparty	Relationship with trader (Note 2)	Transactions	Transactions	Transactions	Transactions
				Account	Amount	Trading terms (Note 4)	Percentage of consolidated total revenues or total assets (Note 3)
3	ZHONGSHAN ICHIA	ICHIA INTERNATIONAL ICHIA RUBBER INDUSTRY (M) Sdn. Bhd. “ ICHIA RUBBER INDUSTRY (M) Sdn. Bhd. “ “ “ ICHIA USA Inc. “	3 3 3 3 3 3 3 3 3	Sale Sale Accounts receivable Purchase Sale Accounts receivable Accounts payable Sale Accounts receivable	$ 1,556 253 20 1,172 11,259 2,665 349 2,039 1,734	－ － － － － － － － －	- - - - - - - - -

• Note 1: Information on business transactions between the parent company and subsidiaries should be indicated in the numbered column respectively, and the number should be filled in as follows:

• Fill in “0” for parent company.

• Subsidiaries are numbered sequentially from Arabic numeral 1 according to the company type.

• Note 2: The relationship with the traders is classified into three types as follows, indicating the type suffices:

• Parent company to subsidiary.

• Subsidiary to parent company.

• Subsidiary to subsidiary.

• Note 3: The percentage of transaction amount to consolidated total revenues or total assets is calculated as the ending balance to consolidated total assets in the case of assets and liabilities, or as the amount to consolidated total revenues in the case of profit or loss.

• Note 4: The trading terms for sales between parent company and subsidiaries are not materially different from those of ordinary sales. The trading terms for other transactions are based on the agreements between the parties because there are no similar transactions to follow.

84

ICHIA TECHNOLOGIES INC. and subsidiaries

Information on major shareholders December 31, 2020

Exhibit 9

Name of Major Shareholder	Shares	Shares
	Shareholding	ShareholdingPercentage
Ferrari Investment Co., Ltd. Creative Investment Co., Ltd.	15,472,481 15,468,480	5.03% 5.02%

• Note 1: The information on major shareholders in this Exhibit is compiled by Taiwan Depository & Clearing Corporation based on the last business day of the quarter in which the shareholders held 5% or more of the Company’s common shares and preferred shares whose registration and delivery have been completed in non-physical form (including treasury shares). The number of shares recorded in the Company’s consolidated financial statements and the actual number of shares registered and delivered in non-physical form may differ depending on the basis of preparation of the calculations.

85