LOTES - Interim / Quarterly Report 2021

Stock code: 3533

LOTES CO., LTD. and Subsidiaries

Consolidated Financial Statements and Accountants' Review Report

First Quarter of 2021 and 2020

`Notice to Readers`

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

Company Address: No. 15, Wuxun St., Anle Dist., Keelung City 204 Tel: (02)2433 1110

Item I. Cover II. Table of Contents III. Accountant's Review Report IV. Consolidated Balance Sheet V. Consolidated Statements of Comprehensive Income VI. Consolidated Statement of Changes in Equity VII. Consolidated Statement of Cash Flows VIII. Notes to the Consolidated Financial Statements (I) Company History (II) Date and Procedures of Approval of Financial Statement (III) Application of New and Revised Standards and Interpretations (IV) Summary of Major Accounting Policies (V) Primary Sources of Major Accounting Judgment, Estimate and Assumption Uncertainties (VI) Descriptions for Important Accounting Items (VII) Related Party Transactions (VIII) Pledged Assets (IX) Significant Contingent Liabilities and Unrecognized Contractual Commitments (X) Significant Disaster Loss (XI) Significant Post-period Events (XII) Others (XIII) Disclosing Information 1. Major Transaction Details 2. Information on Reinvestment Business 3. Investment in Chinese Company 4. Major Shareholder Information (XIV) Segmental Information	Page
	1 2 3 4 5 6 7 8 8 8～9 10～13 13 14～46 46～48 48 48 48 48 49 49～59 60～61 61～62 63 64

Item
I.
Cover
II.
Table of Contents
III. Accountant's Review Report
IV. Consolidated Balance Sheet
V.
Consolidated Statements of Comprehensive Income
VI. Consolidated Statement of Changes in Equity
VII. Consolidated Statement of Cash Flows
VIII. Notes to the Consolidated Financial Statements
(I) Company History
(II) Date and Procedures of Approval of Financial Statement
(III) Application of New and Revised Standards and Interpretations
(IV) Summary of Major Accounting Policies
(V) Primary Sources of Major Accounting Judgment, Estimate and
Assumption Uncertainties
(VI) Descriptions for Important Accounting Items
(VII) Related Party Transactions
(VIII) Pledged Assets
(IX) Significant Contingent Liabilities and Unrecognized Contractual
Commitments
(X) Significant Disaster Loss
(XI) Significant Post-period Events
(XII) Others
(XIII) Disclosing Information
1. Major Transaction Details
2. Information on Reinvestment Business
3. Investment in Chinese Company
4. Major Shareholder Information
(XIV) Segmental Information

Page

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Accountant's Review Report

To the Board of Directors of LOTES CO., LTD.:

Preface

We have reviewed the Consolidated Balance Sheets of LOTES CO., LTD. and its Subsidiaries as of March 31, 2021 and 2020, Consolidated Balance Sheet, Consolidated Statements of Changes in Equity, Consolidated Statements of Cash Flows as of January 1 to September 30, 2020 and 2019 (including a summary of important accounting policies) as of Jan. 1 to March 31, 2021 and 2020, and the Consolidated Financial Statement Notes. The preparation of the consolidated financial statements in conformity with Regulations Governing the Preparation of Financial Reports by Securities Issuers and IAS 34 “Interim Financial Reporting” approved and issued by the Financial Supervisory Commission is the responsibility of the management level, and our responsibility is to express an opinion on the Consolidated Financial Statements based on our review.

Scope

We conducted the review in accordance with Statement of Auditing Standards No. 65: Engagements to Review Financial Statements. A review of the consolidated financial statements consists of inquiries, primarily of persons responsible for financial and accounting matters, analytical procedures and other review procedures. A review is substantially less in scope than an audit, and consequently, we may not be able to identify all of the significant matters that could be identified by an audit and express an opinion.

Conclusion

Based on our review, we are not aware of any material modifications that should be made to the consolidated financial statements referred to above for them to be in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IAS 34 “Interim Financial Reporting” approved and issued by the Financial Supervisory Commission, which may have prevented us from presenting fairly the Consolidated Statements of Financial Position of LOTES CO., LTD. and its subsidiaries as of March 31, 2021 and 2020, Consolidated Statements of Financial Performance and Consolidated Statements of Cash Flows as of Jan. 1 to March 31, 2021 and 2020.

KPMG Taiwan

Accountant.

Approved Jin-Guan-Zheng-hen-Zi No. document No. : 1000011652 by competent (88) Tai-Tsai0Zheng (6) No. securities 18311 authority May 13, 2021

March 31, 2021 and 2020, reviewed only and not audited in accordance with generally accepted auditing standards (GAAS)

LOTES CO., LTD. and Its Subsidiaries

Consolidated Balance Sheet

Mar. 31, 2021 Amount % $2,713,711 13 122,237 1 1,941 - 54,278 - 7,128,453 34 342,185 2 14,483 - 3,417,628 16 152,105 1 9,316 - 19,156 -	March 31, 2021, December 31, 2020, and March 31, 2020 Dec. 31, 2020 Mar. 31, 2020 Amount % Amount % 2,949,412 15 3,783,275 23 122,960 1 13,337 - 2,016 - 3,746 - 54,105 - 19,997 - 6,840,879 35 5,325,654 33 357,029 2 206,949 1 12,937 - 758 - 2,559,028 13 1,935,143 12 62,208 1 139,840 1 87,320 1 85,295 1 6,665 - 13,824 - 13,054,559 68 11,527,818 71 20,120 - - - 4,495,974 23 3,490,423 21 399,749 2 371,905 2 368,019 2 380,219 2 155,510 1 117,911 1 127,144 1 107,598 1 661,820 3 368,816 2 6,228,336 32 4,836,872 29 19,282,895 100 16,364,690 100 Dec. 31, 2020 Mar. 31, 2020 Liabilities and equity Current liabilities: 2100 Short-term loans (Note 6 (12), (25), (28), 8 and 9) 2120 Financial liabilities measured at FVTPL-current (Note 6 (2) and (25)) 2130 Contract liabilities - current (Note 6 (22)) 2150 Notes payable (Note 6 (25)) 2170 Accounts payable (Note 6 (25)) 2200 Other payables (Note 6 (25)) 2220 Other payables-related parties ((Note 6 (25) and 7) 2230 Current tax liabilities - current (Note 6 (19)) 2280 Lease liabilities - current (Note 6 (14), (25) and (28)) 2365 Refund liabilities - current (Note 6 (15)) 2300 Other current liabilities 2322 Long-term loans of which the maturity was within 1 year or 1 operating cycle (Note 6 (13), (25), (28) and Note 8) Non-current liabilities: 2540 Long-term loans (Note 6 (13), (25), (28) and Note 8) 2550 Provisions - non-current (Note 6 (16)) 2560 Current tax liabilities - non-current (Note 6 (19)) 2570 Deferred tax liabilities (Note 6 (19)) 2580 Lease liabilities - non-current (Note 6 (14) and (25) and (28)) 2600 Other non-current liabilities Total of liabilities Equity to the owner of parent company: 3110 Common stock (Note 6 (20)) 3200 Additional paid-in capital (Note 6 (20)) 3300 Retained earnings (Note 6 (20)) 3400 Other equity (Note 6 (20)) Total of equity attributable to the owners of parent company 36XX Non-controlling interests (Note 6 (6)) Total of equity Total of liabilities and equity	Amount % $28,535 - 12,064 - 105,691 1 18,121 - 2,898,675 14 1,299,638 6 16,000 - 642,976 3 106,236 1 185,301 1 26,280 - 5,943 -	Unit: NT$1,000 Amount % Amount % - - - - - - - - 91,659 1 20,367 - 3,574 - 14,734 - 2,501,155 13 1,655,201 10 1,206,695 6 928,668 6 - - - - 505,527 3 406,612 3 71,971 - 88,630 1 161,767 1 172,560 1 33,197 - 17,055 - 5,335 - - -	Unit: NT$1,000 Amount % Amount % - - - - - - - - 91,659 1 20,367 - 3,574 - 14,734 - 2,501,155 13 1,655,201 10 1,206,695 6 928,668 6 - - - - 505,527 3 406,612 3 71,971 - 88,630 1 161,767 1 172,560 1 33,197 - 17,055 - 5,335 - - -
		5,345,460 26	4,580,880 24	3,303,827 21
13,975,493 67	13,054,559 68
20,200 - 5,065,858 24 488,492 2 335,387 2 185,013 1 126,953 1 751,519 3	20,120 - 4,495,974 23 399,749 2 368,019 2 155,510 1 127,144 1 661,820 3
		16,972 - 50,981 - 17,531 - 37,521 - 162,653 1 23,714 -	18,661 - 49,258 - 21,037 - 27,054 - 104,279 1 2,167 -	- - 41,720 - - - 3,586 - 58,559 - 2,155 -
		309,372 1	222,456 1	106,020 -
6,973,422 33	6,228,336 32
		5,654,832 27	4,803,336 25	3,409,847 21
		1,034,779 5 3,961,221 19 9,934,800 47 (636,291) (3)	1,034,779 5 3,958,247 21 9,101,144 47 (594,972) (3)	1,034,779 6 3,959,560 24 7,884,417 48 (690,029) (4)
		14,294,509 68	13,499,198 70	12,188,727 74
		999,574 5	980,361 5	766,116 5
$20,948,915 100	19,282,895 100
		15294083 73	14479559 75	12954843 79
Mar. 31, 2021	Dec. 31, 2020	,, $20,948,915 100	,, 19,282,895 100	,, 16,364,690 100

(Please refer to the Consolidated Financial Notes for details)

Manager: He, De-yo

Accounting Supervisor: Liu, Xing-xia

Director: Zhu, De-xiang

Reviewed only and not audited in accordance with generally accepted auditing standards (GAAS) LOTES CO., LTD., and Its Subsidiaries

Consolidated Statements of Comprehensive Income

From January 1 to March 31, 2021 and 2020

Unit: NT$ thousands

2021Q1		2020Q1	% 100 64
Amount $4,743,567 2,777,524	%	Amount 3,136,840 2,014,402
	100 59
1,966,043	41	1,122,438	36
185,538 306,409 452,309 1,489	4 6 10 -	117,945 245,322 289,752 1,675	4 8 9 -
945,745	20	654,694	21
1,020,298	21	467,744	15
3,711 47,762 27,524 (3,707) (1,078)	- 1 1 - -	8,405 34,751 28,917 (2,592) 2,506	- 1 1 - -
74,212	2	71,987	2
1,094,510 260,163	23 5	539,731 107,607	17 3
834,347	18	432,124	14
5 -	- -	(2,692) -	- -
5	-	(2,692)	-
(42,251) (323)	(1) -	(38,096) -	(1) -
(41,928)	(1)	(38,096)	(1)
(41,923)	(1)	(40,788)	(1)
$792,424	17	391,336	13
$833,656 691	18 -	412,898 19,226	13 1
$834,347	18	432,124	14
$792,337 87	17 -	373,401 17,935	12 1
$792,424	17	391,336	13
	$8.06		3.99
	$8.04		3.98

(Please refer to the Consolidated Financial Notes for details) Manager: He, De-yo

Accounting Supervisor: Liu, Xing-xia

Director: Zhu, De-xiang

Reviewed only and not audited in accordance with generally accepted auditing standards (GAAS) LOTES CO., LTD., and Its Subsidiaries

Consolidated Statement of Changes in Equity

From January 1 to March 31, 2021 and 2020

Unit: NT$ thousands

		Equity attributable to the owners of the parent company	Equity attributable to the owners of the parent company	Equity attributable to the owners of the parent company	Equity attributable to the owners of the parent company	Equity attributable to the owners of the parent company		Non-controlling interests	Total equity 12,545,225 432,124 (40,788)
Share capital	Additional paid-in capital	Retained earnings			Other equity items		Total equity attributable to the owners of the parent company
					Exchange difference between foreign operating office's statement	Unrealized gain or loss on financial assets measured at FVTOCI
Share capital for common stock		Legal reserve	Special reserve	Undistributed earnings
$1,034,779 - -	3,959,560 - -	1,091,939 - -	317,020 - -	6,062,560 412,898 -	(631,970) (18,562) - - (36,805) (2,692)		11,815,326 412,898 (39,497)	729,899 19,226 (1,291)
-	-	-	-	412,898	(36,805) (2,692)		373,401	17,935	391,336
-	-	-	-	-	- -		-	18,282	18,282
$1,034,779	3,959,560	1,091,939	317,020	6,475,458	(668,775) (21,254)		12,188,727	766,116	12,954,843
$1,034,779 - -	3,958,247 - -	1,299,543 - -	650,533 - -	7,151,068 833,656 -	(586,953) (8,019) - - (41,286) (33)		13,499,198 833,656 (41,319)	980,361 691 (604)	14,479,559 834,347 (41,923)
-	-	-	-	833,656	(41,286) (33)		792,337	87	792,424
- -	2,974 -	- -	- -	- -	- - - -		2,974 -	- 19,126	2,974 19,126
$1,034,779	3,961,221	1,299,543	650,533	7,984,724	(628,239) (8,052)		14,294,509	999,574	15,294,083

(Please refer to the Consolidated Financial Notes for details) Manager: He, De-yo

Accounting Supervisor: Liu, Xing-xia

Director: Zhu, De-xiang

Reviewed only and not audited in accordance with generally accepted auditing standards (GAAS) LOTES CO., LTD., and Its Subsidiaries

Consolidated Statement of Cash Flows

From January 1 to March 31, 2021 and 2020

Unit: NT$ thousands

Cash flows from operating activities: Net profit before tax Items of adjustment: Items of income and expenses Depreciation expense Amortization expense Expected credit loss (profit) Net (profir) loss on financial assets and liabilities measured at FVTPL Interest expense Interest income Loss on the disposal and obsolescence of property, plant and equipment Loss from the price drop and obsolescence of inventory Other items Total of the items of income and expenses Change in assets/liabilities related to operating activities: Net change in the assets related to operating activities: Increase in notes receivable Increase in accounts receivable Decrease in other accounts receivable Decrease (increase) in inventory Increase in payments in advance Increase in other current assets Decrease in other financial assets Total net change in the assets related to operating activities Net change in the liabilities related to operating activities: Increase (decrease) in contract liabilities Decrease in notes payable Increase (decrease) in refund liabilities Increase (decrease) in other non-current liabilities Increase (decrease) in refund liabilities Decrease in other current liabilities Increase in refund liabilities Increase in other non-current liabilities Total net change in the liabilities related to operating activities Total net change in the assets and liabilities related to operating activities Total of the adjustment items Cash inflow generated from operating activities Interests received Interests paid Income tax paid Net cash inflow from operating activities Cash flows in investing activities: Acquisition of financial assets measured at FVTPL Disposal of financial assets measured at FVTPL Acquisition of property, plant and equipment Disposal of property, plant and equipment Acquisition of intangible assets Acquisition of investment property Increase in other non-current assets Net cash outflow from investment activities Cash flows in financing activities: Increase (decrease) in short-term loans Increase in other payables - related parties Borrowing of long-term loans Repayment of long-term loans Repayment of lease principal Increase in other non-current liabilities Change in non-controlling interests Change in subsidiaries, associates and joint ventures accounted for using the equity method Net cash outflow from financing activities Effect of changes in exchange rates on cash and cash equivalents Increase (decrease) in current cash and cash equivalents Beginning balance of cash and cash equivalents Ending balance of cash and cash equivalents	2021Q1 $1,094,510 319,158 11,686 2,567 (37,125) 3,707 (3,711) 1,019 9,987 (17)	2020Q1 539,731 274,145 3,282 (831) 7,694 2,592 (8,405) 303 18,760 -
	307,271	297,540
	(173) (289,063) 9,224 (868,587) (89,897) (12,491) 78,004	(4,740) 621,939 15,156 22,118 (2,492) (3,261) -
	(1,172,983)	648,720
	14,032 14,547 397,520 122,642 1,723 (6,917) 23,534 -	420 (4,266) (229,861) (31,554) (9) (6,282) 15,304 223
	567,081	(256,025)
	(605,902)	392,695
	(298,631)	690,235
	795,879 8,253 (3,707) (127,766)	1,229,966 7,837 (2,655) (117,714)
	672,659	1,117,434
	(19,533) 69,445 (843,914) 3,910 (41,189) 32,002 (105,319)	- 219,003 (240,003) 21,440 (21,404) - (79,890)
	(904,598)	(100,854)
	28,535 16,000 1,000 (2,081) (33,232) 5,844 19,126 2,974	(29,980) - - - (29,505) - 18,282 -
	38,166	(41,203)
	(41,928) (235,701) 2,949,412	(38,096) 937,281 2,845,994
	$2,713,711	3,783,275

(Please refer to the Consolidated Financial Notes for details) Manager: He, De-yo

Accounting Supervisor: Liu, Xing-xia

Director: Zhu, De-xiang

Reviewed only and not audited in accordance with generally accepted auditing standards (GAAS)

LOTES CO., LTD., and Its Subsidiaries

Consolidated Financial Statement Notes

First Quarter 2021 and 2020

(Except as otherwise indicated, the unit for all amounts in this document is NT$1,000)

I. Company History

Lotes Co., Ltd. (hereinafter referred to as the “Company”) was incorporated on Aug. 23, 1986 in accordance with the provisions of the Company Law and was approved for registration with its registered office at No.15, Wuxun Street, Anle District, Keelung City. The Company and its subsidiaries (hereinafter referred to as the “Consolidated Company”) are principally engaged in the sale and purchase of various hardware parts and components, the manufacturing and

processing of various terminals and their connectors, the import and export business in connection with the preceding item and the agency of the preceding item in connection with the tender

quotation and distribution of products of domestic and foreign manufacturers. Please refer to Note 14 for further details.

II. Date and Procedures of Approval of Financial Statement

The consolidated financial statements were approved and released by the Board of Directors on May 13, 2021.

III. Application of New and Revised Standards and Interpretations

(1) Influence of the Adoption of New and Revised Standards and Integrations Approved by the Financial Supervisory Commission

Effective on January 1, 2021, the Consolidated Company adopted the following newly

revised IFRSs, which did not have a significant impact on the consolidated financial statements

Amendments to IFRS 4 "Temporary Exemption from the Extension of IFRS 9

Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16, "Changes in Interest Rate Indicators - Phase 2

(2) Effect of not applying the International Financial Reporting Standards recognized by the FSC The application of the following newly revised IFRSs, effective April 1, 2021, to the
Consolidated Company's evaluation will not have a material impact on the consolidated financial statements.

Amendments to IFRS 16, "Rent Reductions Related to Emerging Coronavirus Pneumonia

after June 30, 2021".

(3) New and revised standards and interpretations not yet recognized by the FSC

The standards and interpretations issued and amended by the IASB but not yet endorsed by the FSC that may be relevant to the Consolidated Company are as follows.

New release/amendment of guidelines Major Amendments Amendments to IAS 1 The amendment was made to enhance "Classification of Liabilities consistency in the application of the as Current or Noncurrent" standard to assist companies in determining whether debts or other liabilities with an indefinite maturity date should be classified as current (due or likely to be due within one year) or or other liabilities with an indefinite maturity date should be classified as current (due or likely to be due within one year) or The amendment was made to enhance consistency in the application of the standard to assist companies in determining whether debts or other liabilities with an indefinite maturity date should be classified as current (due or likely to be due within one year) or non-current on the balance sheet.

Effective date upon promulgation by the IASB Jan. 1, 2023

The amendment also clarifies the classification of debt that may be settled by conversion into equity.

The Consolidated Company is continuously evaluating the impact of the above standards and interpretations on the Consolidated Company's financial condition and results of operations, and the related impact will be disclosed when the evaluation is completed.

The Consolidated Company does not expect the following other newly issued and amended standards, which have not yet been endorsed, to have a material impact on the consolidated financial statements.

Amendments to IFRS 10 and IAS 28, "Disposal of or Contribution to Assets between an Investor and its Affiliate or Joint Venture".

IFRS 17 "Insurance Contracts" and Amendments to IFRS 17

Amendments to IAS 16, "Property, Plant and Equipment - Price before reaching Intended Use".

Amendment to IAS 37, "Loss-making Contracts - Costs of Performance". IFRS Annual Improvements for the -20182020 Cycle Amendments to IFRS 3, "References to Conceptual Framework Amendment to IAS 1, "Disclosure of Accounting Policies". Amendment to IAS 8, "Definition of Accounting Estimates".

IV. Summary of Major Accounting Policies

The significant accounting policies used in the consolidated financial statements are summarized below. Unless otherwise stated, the following accounting policies have been applied consistently to all periods presented in the consolidated financial statements.

(1) Compliance Statement

The Consolidated Financial Statement was compiled in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (hereinafter referred to as the Regulations Governing the Preparation) and IAS 34 “Interim Financial Reporting” which is effective upon endorsement and issuance by the Financial Supervisory Commission. The Consolidated Financial Statements do not include all of the information required to be disclosed in the full annual Consolidated Financial Statements prepared in accordance with the following, as recognized by the Financial Supervisory Commission (FSC): International Financial Reporting Standards (IFRSs), International Accounting Standards (IASs), and Interpretations developed by the International Financial Reporting Interpretations Committee (IFRIC) or the former Standing Interpretations Committee (SIC).

Except as described below, the significant accounting policies used in this Consolidated Financial Statement are the same as those used in the 2020 Consolidated Financial Statement; see Note 4 to the 2020 Consolidated Financial Statements for related information.

(2) Consolidation Foundation
Subsidiary listed in the Consolidated Financial Statements

The including subsidiaries listed in the Consolidated Financial Statement are as follows:

Investment of Company Name of Subsidiary Place of Incorporati on	Shareholding percentage Mar. 31, 2021 Dec. 31, 2020 Mar. 31, 2020 Descrip tion
The Company Lotes Investments Limited Samoa Good Hope Investments Limited Guansi Development Co., Ltd. Zhaxi Investment Co., Ltd. Anguilla Jiayu Investment Co., Ltd. Taiwan	100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

LOTES CO., LTD., and its Subsidiaries’ Notes to the Consolidated Financial Statements

(Cont’d)

Investment of Company Name of Subsidiary Place of Incorporati on	Shareholding percentage Mar. 31, 2021 Dec. 31, 2020 Mar. 31, 2020 Descrip tion
The Company Lotes USA, Inc USA LOTES EU GmbH Germany Lerain Technology Co., Ltd. Taiwan Mikronpoint Co., Ltd. Lotes Investments Limited Loteson International Investments Limited Hong Kong Loteson International Investments Limited Lotes Guangzhou Co., Ltd. China Lotes Guangzhou Co., Ltd. Lotes Hengnan Co., Ltd. Lotes Shenzhen Automation Technology Co., Ltd. China Lotes Zhongshan Co., Ltd. Zhongshan Dezhi Metal Surface Treatment Co. Hengnan Deyi Property Development Co. Guangzhou Leside Technology Co., Ltd. Guangzhou Leside Technology Co., Ltd. Chongqing Fuxinrui Electronic Technology Co. China Lotes Suzhou Co., Ltd. Lotes Zhongshan Co., Ltd. Good Hope Investments Limited Xincheng Development Co., Ltd. Samoa REKA Technology Co., Ltd. Hong Kong Guansi Development Co., Ltd. Jae You Co., Ltd. Jae You Co., Ltd. Lotes Suzhou Co., Ltd. China Zhaxi Wangden Investments Limited Hong Kong	100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 18.86% 33.92% 33.92% (Note 1) 100.00% 100.00% -% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 50.00% 50.00% 50.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 51.00% 51.00% 51.00% 50.00% 50.00% 50.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

Investment
of Company
Name of Subsidiary
Place of
Incorporati
**on **

Shareholding percentage
Mar. 31,
2021
Dec. 31,
2020
Mar. 31,
2020
Descrip
**tion **

The Company Lotes USA, Inc
USA
LOTES EU GmbH
Germany
Lerain Technology Co., Ltd.
Taiwan
Mikronpoint Co., Ltd.
Lotes
Investments
Limited
Loteson International
Investments Limited
Hong Kong
Loteson
International
Investments
Limited
Lotes Guangzhou Co., Ltd.
China
Lotes
Guangzhou
Co., Ltd.
Lotes Hengnan Co., Ltd.
Lotes Shenzhen Automation
Technology Co., Ltd.
China
Lotes Zhongshan Co., Ltd.
Zhongshan Dezhi Metal Surface
Treatment Co.
Hengnan Deyi Property
Development Co.
Guangzhou Leside Technology
Co., Ltd.
Guangzhou
Leside
Technology
Co., Ltd.
Chongqing Fuxinrui Electronic
Technology Co.
China
Lotes Suzhou
Co., Ltd.
Lotes Zhongshan Co., Ltd.
Good Hope
Investments
Limited
Xincheng Development Co.,
Ltd.
Samoa
REKA Technology Co., Ltd.
Hong Kong
Guansi
Development
Co., Ltd.
Jae You Co., Ltd.
Jae You Co.,
Ltd.
Lotes Suzhou Co., Ltd.
China
Zhaxi
Wangden Investments Limited Hong Kong

100.00%
100.00%
100.00%

100.00%
100.00%
100.00%
18.86%
33.92%
33.92% (Note 1)
100.00%
100.00%
-%

100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
50.00%
50.00%
50.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
51.00%
51.00%
51.00%
50.00%
50.00%
50.00%
100.00%
100.00%
100.00%

100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%

100.00%
100.00%
100.00%

LOTES CO., LTD., and its Subsidiaries’ Notes to the Consolidated Financial Statements

(Cont’d)

Investment of Company Name of Subsidiary Place of Incorporati on	Shareholding percentage Mar. 31, 2021 Dec. 31, 2020 Mar. 31, 2020 Descrip tion
Investment Co., Ltd. Wangden Investments Limited Zongka Technology (Shenzhen) Co., Ltd. China Jiayu Investment Co., Ltd. Ememe Robot Co., Ltd. Taiwan Compertum Microsystems Inc. Good News Medical Co., Ltd.	100.00% 100.00% 100.00% 94.37% 94.37% 94.37% 35.34% 35.34% 46.74% (Note 1) 5.00% 5.00% -% (Note 1)

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

Investment of Company Name of Subsidiary Place of Incorporati on	Shareholding percentage Mar. 31, 2021 Dec. 31, 2020 Mar. 31, 2020 Descrip tion
Jiayu Investment Co., Ltd. Lintes Technology Co., Ltd. Taiwan Lintes Technology Co., Ltd. Chia-Chun Investment Co., Ltd. Genie Precision Machining Co., Ltd. Compertum Microsystems Inc. Jilong Co., Ltd. Samoa Jilong Co., Ltd. Rihui Co., Ltd. Samoa Rihui Co., Ltd. Lintes Technology (Suzhou) Co., Ltd. China	52.13% 52.13% 52.13% 100.00% 100.00% 100.00% 60.00% 60.00% -% 11.77% 11.77% -% (Note 1) 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

Note 1: Although the Consolidated Company does not hold more than one half of the voting shares of the company, the Consolidated Company is included as a subsidiary in the Consolidated Financial Statements because the Consolidated Company has control over its major operating activities and other decisions.

2. Subsidiary not listed in the Consolidated Financial Statements: None.

(3) Employee benefits

The defined benefit plan pension for the interim period is calculated based on the actuarial pension cost ratio from the previous year’s reporting date to the end of the current period and adjusted for significant market fluctuations, and significant curtailment, liquidation or other significant one-time events after the reporting date.

(4) Income tax

The Consolidated Company’s income tax expense for the interim period is measured and disclosed in accordance with B12 of IAS No. 34 “Interim Financial Reporting”.

Income tax expense, which is recognized directly in equity or other comprehensive income, is measured as the temporary difference between the carrying amount of the related assets and liabilities for financial reporting purposes and their tax bases at the applicable tax rates that are expected to apply when the related assets and liabilities are realized or settled.

V. Primary Sources of Major Accounting Judgment, Estimate and Assumption Uncertainties

The preparation of the Consolidated Financial Statements in conformity with the Regulations Governing the Preparation of Financial Statements and IAS 34 “Interim Financial Reporting” which is approved by the FSC, requires management to make judgments, estimates and assumptions that affect the application of policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from the estimates.

The significant judgments made by management in the preparation of the Consolidated Financial Statements and the key sources of estimation uncertainty in the adoption of the Consolidated Company’s accounting policies are consistent with Note 5 to the 2020 Consolidated Financial Statements.

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

VI. Descriptions for Important Accounting Items

Except as noted below, the description of significant accounting items in this Consolidated Financial Statement is not yet materially different from the 2020 Consolidated Financial Statement, see Note 6 to the 2020 Consolidated Financial Statement for related information.

(1) Cash and cash equivalents

Petty cash Demand deposits and check deposits Time deposits Cash and cash equivalents listed on the Statement	Mar. 31, 2021 $2,763 2,094,674 616,274 $2,713,711		Dec. 31, 2020 2,139 2,169,311 777,962		Mar. 31, 2020 1,884 1,826,464 1,954,927 3,783,275
			2,949,412

Please refer to Note 6 (25) for the disclosure of the interest rate risk and sensitivity analysis of the financial assets of the Consolidated Company.

(2) Financial assets and financial liabilities
Financial assets and financial liabilities measured at FVTPL:

Financial assets measured at FVTPL: Non-hedging derivatives Metal commodity exchange contracts Forward exchange contracts Non-derivative financial assets: Listed stocks Total Financial liabilities measured at FVTPL: Non-hedging derivatives Forward exchange contracts	Mar. 31, 2021 $17,442 - 104,795	Dec. 31, 2020 - 6,180 116,780	Mar. 31, 2020 - - 13,337
	$122,237	122,960	13,337
	$12,064	-	-

Please refer to Note 6 (25) for the amount recognized in profit or loss based on fair value remeasurement.

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

The Consolidated Company engages in derivative financial instruments to hedge the exposure to exchange rate and raw material price risks arising from operating activities. The details of the derivatives on financial assets and financial liabilities that are reported as being measured at fair value through profit or loss by the Consolidated Company for non-applicable hedge accounting is as follows:

Financial Assets	Mar.	Mar.	31, 2021
	Principal of the Contract (thousand) USD4,656		Due Date
Metal commodity exchange contracts Financial Liabilities			2021.05.04 2021.04.08 2021.04.09 2021.04.20 2021.04.26 2021.04.28 2021.05.04 2021.05.05 2021.05.06 2021.05.07 2021.06.28
		USD3,000
Forward exchange contracts " " " " " " " " "
		USD2,100
		USD8,000
		USD2,000
		USD5,000
		USD1,500
		USD2,500
		USD1,000
		USD8,000
		USD1,000

" "	USD8,000 2021.05.07 USD1,000 2021.06.28	USD8,000 2021.05.07 USD1,000 2021.06.28	USD8,000 2021.05.07 USD1,000 2021.06.28
Financial Assets	Dec. 31, 2020
	Principal of the Contract (thousand) USD3,000		Due Date
Forward exchange contracts " " " " " " " " " " " " " "			2021.01.08 2021.01.11 2021.01.12 2021.01.20 2021.01.22 2021.01.28 2021.02.09 2021.02.18 2021.02.19 2021.02.23 2021.02.24 2021.02.26 2021.03.10 2021.03.15 2021.03.23
		USD4,000
		USD2,000
		USD9,000
		USD2,000
		USD4,000
		USD5,000
		USD2,000
		USD2,000
		USD2,000
		USD9,000
		USD4,000
		USD6,000
		USD4,400
		USD2,000

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

2. financial assets measured at FVTOCI

Equity instruments measured at FVTOCI: Current: Domestic unlisted stocks-Kuang Ying Computer Equipment Co. Domestic unlisted stocks-AICP Technology Corporation Subtotal Noncurrent: Domestic listed stocks - Chailease Holding Co. Total	Mar. 31, 2021 $- 1,941 1,941	Dec. 31, 2020 - 2,016 2,016	Mar. 31, 2020 1,981 1,765 3,746
	20,200	20,120	-
	$22,141	22,136	3,746

The Consolidated Company’s investments in these equity instruments are not held for trading purposes and have been designated as measured at fair value through other comprehensive income.

The Consolidated Company had no dividend income from equity instruments measured at FVTOCI in the periods from January 1 to March 31, 2021 and from January 1 to March 31, 2020.

As of March 31, 2021, December 31, 2020 and March 31, 2020, the Consolidated Company’s financial assets had not been pledged as security.

(3) Notes, accounts receivable and other receivables

Notes receivable Accounts receivable Other accounts receivable Less: Allowance for losses	Mar. 31, 2021 $54,278 7,141,994 345,241 (16,597) $7,524,916		Dec. 31, 2020 54,105 6,852,928 359,009 (14,029)		Mar. 31, 2020 19,997 5,335,907 207,729 (11,033) 5,552,600
			7,252,013

Please refer to Note 6 (25) - 1. (3) Statement of Changes in Notes and Accounts Receivable and Provisions as of March 31, 2021, December 31, 2020 and March 31, 2020 for details.

The Consolidated Company assesses that a portion of the accounts receivable and other receivables held by the Consolidated Company under the operating model of collecting cash flows and sales are measured at fair value through other comprehensive income as of March 31, 2021, December 31, 2020 and March 31, 2020, of which $0, $0, and $488,025 respectively are accounts receivable.

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

Information of the factoring of accounts receivable of the Consolidated Company is provided below: Unit: $ 1,000 ／ 1,000 in foreign currency

Mar. 31, 2020

Factored to	Amount derecognized $-	Amount can be provided as advance	Amount provided as advance	Transferred to other receivables	Interest rate range	Other importa nt matters
CTBC Bank		755,625 USD25,000	-	-	-	None

The above quota is used in a circular manner, and the outstanding accounts receivable sold by the Consolidated Company are purchased by China Trust without recourse. In accordance with the terms of the sale and surrender contract, losses arising from commercial disputes (such as return of sales or concessions, etc.) shall be borne by the Consolidated Company and losses arising from credit risk shall be borne by such Banks.

As of March 31, 2021, December 31, 2020 and March 31, 2020, there were no retained accounts receivable for sale and transferred to other receivables.

(4) Inventory

Inventory
Merchandise Final goods Work in progress Raw materials Goods in transit	Mar. 31, 2021 $859,685 888,049 992,297 677,114 483		Dec. 31, 2020 773,548 676,044 695,361 414,075 -		Mar. 31, 2020 429,549 590,219 548,332 321,840 45,203 1,935,143
	$3,417,628		2,559,028

The Consolidated Company’s inventories as of March 31, 2021, December 31, 2020 and March 31, 2020 including an allowance for inventory losses are $304,416, $295,528, and $287,573, respectively.

The Consolidated Company recognized inventory-related expenses as follows:

Cost of goods sold Downtime cost Losses on the price fall and scraping of inventory Total	2021 Jan. to Mar. $2,767,537 - 9,987	2020 Jan. to Mar. 1,904,843 90,799 18,760 2,014,402
	$2,777,524

As of March 31, 2021, December 31, 2020 and March 31, 2020, the Consolidated Company’s inventories were not pledged as security.

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

(5) Changes in ownership interest in subsidiaries
The Consolidated Company did not subscribe to the subsidiary's cash capital increase in proportion to its shareholding, which did not result in loss of control.

On January 31, 2021, Lerain Technology Co., Ltd. issued 2,210 thousand new shares, raising $22,100 thousand. The Consolidated Company's interest in Lerain Technology Co., Ltd. was reduced by 15.06% due to non-subscription.

The effect of changes in the Consolidated Company's ownership interest in the subsidiaries listed above on the owners' equity attributable to the parent company was as follows.

Capital surplus - recognition of changes in ownership interest in subsidiaries	2021 Jan. to Mar.	2020 Jan. to Mar. -
	$2,974

(6) Subsidiaries with significant noncontrolling interests

The non-controlling interests in subsidiaries that are significant to the Consolidated Company are as follows:

Name of Subsidiary Lintes Technology Co., Ltd.	Main business place/ The country where the company registered Taiwan	The percentage of ownership interests and voting interests in all non-controlling interests	The percentage of ownership interests and voting interests in all non-controlling interests
		Mar. 31, 2021 Dec. 31, 2020	Mar. 31, 2020
		47.87% 47.87%	47.87%

The aggregate financial information of the above subsidiaries is as follows. The financial information has been prepared in accordance with International Financial Reporting Standards (IFRSs) approved by the Financial Supervisory Commission (FSC), and the financial information represents amounts before the elimination of intercompany transactions:

1. Comprehensive financial information of Lintes Technology Co., Ltd.:

Current assets Non-current assets Current liabilities Non-current liabilities Less: Non-controlling interests Equity attributable to owners of	Mar. 31, 2021 $2,278,766 735,643 (1,087,272) (83,263) 131,665	Dec. 31, 2020 2,297,917 523,357 (954,458) (75,631) 128,484	Mar. 31, 2020 1,935,610 183,178 (559,518) (17,674) -
	$1,712,209	1,662,701	1,541,596

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

Lintes Technology Ending balance of non-controlling interest attributable to the Consolidated Company $819,548 795,973 2021 Jan. to Mar. Operating income $560,784 Net income for the period Attributable to owners of Lintes Technology $50,717 Non-controlling interests attributable to Lintes Technology $3,181 Other comprehensive income Attributable to owners of Lintes Technology $ (1,209) Non-controlling interest attributable to Lintes Technology $- Total comprehensive income Attributable to owners of Lintes Technology $49,508 Non-controlling interest attributable to Lintes Technology $3,181 Net income of the Consolidated Company for the period attributable to non-controlling interests $24,162 Comprehensive income for the period attributable to non-controlling interests $23,575	$819,548 795,973	$819,548 795,973	741,846 2020 Jan. to Mar. 400,888 54,384 - (2,151) - 52,233 - 28,259 26,972
		2021 Jan. to Mar.
		$560,784
		$50,717
		$3,181
		$ (1,209)
		$-
		$49,508
		$3,181
		$24,162
		$23,575

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Effect of exchange rate changes Increase (decrease) in cash and cash equivalents	2021 Jan. to Mar.	2020 Jan. to Mar.
	$ (15,334) (219,069) 21,819 1,332	105,231 (20,255) (33,776) (436)
	$ (211,252)	50,764

(7) Property, plant and equipment

The changes in the costs of the property, plant and equipment, losses on depreciation and impairment of the Consolidated Company are as follows:

Land $48,584 128,951 - 31,235 - 39	Buildings 769,413 62,399 - 15,115 - (3,641)	Machinery 2,951,297 128,771 9,787 930 (10,586) (13,265)	Other 3,275,852 136,311 6,051 168,492 (431,964) (15,605)	Construction in progress and equipment to be examined 1,334,576 428,658 - (215,990) - (8,704)
$208,809	843,286	3,066,934	3,139,137	1,538,540
$49,655 - - - - 175	759,739 - - - - (4,843)	2,698,613 24,398 1,423 - (23,071) (15,117)	2,740,900 28,959 895 131,839 (479,071) (15,238)	756,731 228,400 - (131,839) - (6,731)
$49,830	754,896	2,686,246	2,408,284	846,561

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

$- - - -	309,715 10,060 - (1,565)	1,700,534 57,522 (9,778) (6,887)	1,873,499 232,058 (427,843) (6,467)	- - - -	3,883,748 299,640 (437,621) (14,919)
$-	318,210	1,741,391	1,671,247	-	3,730,848
$- - - -	266,518 8,822 - (1,880)	1,595,925 62,970 (3,291) (7,922)	1,628,481 190,529 (477,108) (7,650)	- - - -	3,490,924 262,321 (480,399) (17,452)
$-	273,460	1,647,682	1,334,252	-	3,255,394

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

Land $48,584	Buildings 459,698	Machinery 1,250,763	Other 1,402,353	Construction in progress and equipment to be examined 1,334,576	Total 4,495,974

$208,809	525,076	1,325,543	1,467,890	1,538,540	5,065,858
$49,655	493,221	1,102,688	1,112,419	756,731	3,514,714
$49,830	481,436	1,038,564	1,074,032	846,561	3,490,423

Subsidiary, Lotes Zhongshan Co., Ltd, acquired the land use rights for the construction of the new plant in 2017, and the acquisition cost was $183,934 to list right-of-use assets in the account. As of March 31, 2021, December 31, 2019, and March 31, 2020, the accumulated expenditures (tax included) for the construction of the new plant were $783,829,000, $787,873,000, and $676,452,000, respectively.

Subsidiary, Lotes Hengnan Co., Ltd, acquired the land use rights for the construction of the new plant in 2016, and the acquisition cost was $9,878 to list right-of-use assets in the account. As of March 31, 2021, December 31, 2019, and March 31, 2020, the accumulated expenditures (tax included) for the construction of the new plant were $258,101,000, $192,369,000, and $0, respectively.

In April 2019, subsidiary, Lotes Zhongshan Co., Ltd, signed the pre-purchase contract and decoration contract with Zhongshan Weili Real Estate Development Co., Ltd. and Tianjin Xinhongyuan Building Decoration Engineering Co., Ltd., respectively. As of March 31, 2021, has to pay the price of RMB 10,881,000 and RMB 3,285,000 respectively (account listed as other non-current assets), is expected to transfer the property in October 2021.

As of March 31, 2021, December 31, 2019, and March 31, 2020, real estate, plant, and equipment were used as collateral for short-term loans and financing lines. Please refer to Note 8 for details.

(8) Right-of-use assets

The changes in the costs of the lease of lands, buildings, machinery and other equipment, losses on depreciation and impairment of the Consolidated Company are as follows:

Land	Buildings 347,687 126,178 (72,510) (2,066)	Machinery equipment - - - -	Other equipment 4,131 - - (21)	Total 592,508 126,178 (72,510) (3,338)
$240,690 - - (1,251)
$239,439	399,289	-	4,110	642,838
$236,908 - - (1,734)	254,674 21,283 - (2,007)	687 - (691) 4	5,181 - (603) (31)	497,450 21,283 (1,294) (3,768)
$235,174	273,950	-	4,547	513,671

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

Losses on the depreciation and impairment of right-of-use assets: Balance on Jan. 1, 2021 Depreciation for the period Decrease Effect of change in exchange rate Balance on Mar. 31, 2021 Balance on Jan. 1, 2020 Depreciation for the period Decrease Effect of change in exchange rate Balance on Mar. 31, 2020 Book value: Mar. 31, 2021 Mar. 31, 2020	$10,465 179,759 - 2,535 192,759 1,312 32,752 - 362 34,426 - (72,220) - - (72,220) (65) (538) - (16) (619)
	$11,712 139,753 - 2,881 154,346
	$5,150 105,843 687 2,344 114,024 1,294 28,432 - 438 30,164 - - (691) (603) (1,294) (54) (1,062) 4 (16) (1,128)
	$6,390 133,213 - 2,163 141,766
	$227,727 259,536 - 1,229 488,492
	$228,784 140,737 - 2,384 371,905

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

(9) Investment property

The changes in the investment property of the Consolidated Company are as follows:

Owned Assets Land Buildings $260,576 44,832 - - - -	Owned Assets Land Buildings $260,576 44,832 - - - -	Right-of-use assets Land 69,160 (31,898) (104)
Land $260,576 - -
$260,576	44,832	37,158
$248,200 - -	39,285 - -	- 98,663 (1,206)
$248,200	39,285	97,457
$- - -	5,481 281 -	1,068 357 (8)
$-	5,762	1,417
$- -	4,483 240	- -
$-	4,723	-

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

Owned Assets Land Buildings $260,576 39,351	Owned Assets Land Buildings $260,576 39,351	Right-of-use assets Land 68,092	Total 368,019
Land $260,576
$260,576	39,070	35,741	335,387
$248,200	34,802	-	283,002
$248,200	34,562	97,457	380,219
			$467,325
			$466,837
			$322,604
			$420,061

As of March 31, 2021, December 31, 2020 and March 30, 2020, the Consolidated Company’s investment properties were not pledged as security. (10) Intangible assets

The changes in the cost and amortization of the intangible assets of the Consolidated Company are as follows:

Cost: Balance on Jan. 1, 2021 Separate acquisition Derecognition Effect of change in exchange rate Balance on Mar. 31, 2021 Balance on Jan. 1, 2020 Separate acquisition Derecognition Effect of change in exchange rate Balance on Mar. 31, 2020		Computer software $253,415 41,870 (529) (681)	Computer software $253,415 41,870 (529) (681)		Other 600 - - -		Total 254,015 41,870 (529) (681) 294,675 166,821 22,153 (412) (749) 187,813

			$294,075		600
			$166,221 22,153 (412) (749)		600 - - -
			$187,213		600

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

Losses on amortization and impairment: Balance on Jan. 1, 2021 Amortization for the period Derecognition Effect of change in exchange rate Balance on Mar. 31, 2021 Balance on Jan. 1, 2020 Amortization for the period Derecognition Effect of change in exchange rate Balance on Mar. 31, 2020 Book value: Jan. 1, 2021 Balance on Mar. 31, 2021 Jan. 1, 2020 Balance on Mar. 31, 2020	$98,505 11,969 (529) (283)	- - - -	98,505 11,969 (529) (283) 109,662 67,032 3,574 (412) (292) 69,902 155,510 185,013 99,789 117,911
	$109,662	-
	$67,032 3,574 (412) (292)	- - - -
	$69,902	-
	$154,910	600
	$184,413	600
	$99,189	600
	$117,311	600

The amortization expense of the intangible assets of the Consolidated Company was recognized in the following items:

Operating cost Operating expense	2021 Jan. to Mar. $374	2020 Jan. to Mar. 306 3,268
	$11,595

(11) Other financial assets

The details of the other financial assets of the Consolidated Company are as follows:

Other financial assets - current Time deposits	Mar. 31, 2021 $9,316		Dec. 31, 2020 87,320		Mar. 31, 2020 85,295

As of March 31, 2021, December 31, 2020, and March 31, 2020, none of the Consolidated Company’s other financial assets had been pledged as security.

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

(12) Short-term loans

The details, conditions and terms of the short-term loans of the Consolidated Company are as follows:

		Mar. 31, 2021			Amount $28,535 $2,480,280 Amount $-
Currency Interest rate range USD 0.75% Dec. 31, 2020 Currency Interest rate range - - Mar. 31, 2020 Currency Interest rate range - -			Maturity year 110




	Currency -	Interest rate range - Mar. 31, 2020		Maturity year -

					$1,556,320
					Amount $-
	Currency -	Interest rate range -		Maturity year -

					$3,053,725

Please refer to Note 6 (25) for more information on the Consolidated Company’s exposure to interest rate and foreign currency risk, Note 8 for information of the Consolidated Company’s assets pledged as collateral for short-term borrowings, and Note 9 for information of the Company’s bank loans and financing facilities are pledged as guaranteed notes.

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

(13) Long-term loans

The details of the Consolidated Company's long-term loans were as follows:

Bank Loans-Credit Loans(05/2022~07/2023) Bank loans - Guaranteed Loans(07/2023) Subtotal Less: portion due within one year Total Unutilized Interest Rate Range	Mar. 31, 2021 ~~$19,019~~ 3,896		Dec. 31, 2020 ~~974~~ 23,022
	~~22,915~~ 5,943		~~23,996~~ 5,335
	~~$16,972~~		~~18,661~~
	$52,987		51,907
	1.31%~1.83%

The Consolidated Company's pledge of assets as collateral for bank loans is described in Note 8.

(14) Lease liabilities

The book values of the lease liabilities of the Consolidated Company are as follows: Mar. 31, 2021 Dec. 31, 2020 Mar. 31, 2020 Current $106,236 71,971 88,630 Non-current $162,653 104,279 58,559	The book values of the lease liabilities of the Consolidated Company are as follows: Mar. 31, 2021 Dec. 31, 2020 Mar. 31, 2020 Current $106,236 71,971 88,630 Non-current $162,653 104,279 58,559	The book values of the lease liabilities of the Consolidated Company are as follows: Mar. 31, 2021 Dec. 31, 2020 Mar. 31, 2020 Current $106,236 71,971 88,630 Non-current $162,653 104,279 58,559	The book values of the lease liabilities of the Consolidated Company are as follows: Mar. 31, 2021 Dec. 31, 2020 Mar. 31, 2020 Current $106,236 71,971 88,630 Non-current $162,653 104,279 58,559
	$162,653	104,279	58,559

For the maturity analysis, please refer to Note 6 (25).

The amounts recognized in the profit and loss are as follows:

Interest expense for lease liabilities Income from the sublease of right-of-use assets Expenses for short-term leases	2021Q1

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

The amounts recognized in the Statement of Cash Flows are as follows:

Total cash outflow for leases	2021 Jan. to Mar.	2020 Jan. to Mar.
	$37,386	32,250

1. Lease of land, premises, and buildings

The Consolidated Company leases land, premises and buildings for plant, office space and staff quarters. The lease term of the plant and office space is usually one to ten years, and the lease term of the staff quarters is three to eight years. Part of the lease includes an option to extend the lease at the end of the lease term. In cases where it is not reasonably determined to exercise an optional extension of Lease term, the relevant benefits for the period covered by the option are not included in the Lease liabilities. The Consolidated Company is a sublease of right-of-use assets by business lease.

2. Other Leases

The Consolidated Company leases machinery and other equipment for periods ranging from two to six years. In addition, some of the Consolidated Company's leases have a one-year lease term. These leases are short-term subject leases, and the Consolidated Company has elected to apply the exemption from recognition and not to recognize the related right-of-use assets and lease liabilities.

(15) Refund liabilities - current

Refund liabilities - current	Mar. 31, 2021 $185,301	Dec. 31, 2020 Mar. 31, 2020 161,767 172,560

The refund liabilities are mainly the prepayments to customers for the sales discount and defects of electronic components.

(16) Provisions

Provisions - non-current Employee benefits	Mar. 31, 2021 $50,981	Dec. 31, 2020 Mar. 31, 2020 49,258 41,720

Employee benefits are estimated under the Consolidated Company’s defined benefit plan.

(17) Operating lease

The Consolidated Company leases its investment real estate, which is classified as an operating lease because almost all risks and rewards belonging to the ownership of the underlying asset have not been transferred. Please refer to Note 6 (9) for details of the investment real estate.

Due date analysis of lease benefits to report the total amount of undiscounted lease benefits received in the future is shown in the following table:

Within 1 year 1-2 years Total undiscounted lease payments	Mar. 31, 2021 $3,565 -	Dec. 31, 2020 4,330 350	Mar. 31, 2020 4,894 65 4,959
	$3,565	4,680

In the periods from Jan. 1 to March 31, 2021 and 2020, the rental income generated from the investment property were $1,062,000 and $1,386,000, respectively, and the direct operating expenses (including maintenance) incurred in the investment property from rentals were $272,000 and $207,000, respectively.

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

(18) Employee benefits

1. Define the benefit plan

The Consolidated Company used the actuarially determined pension cost as of December 31, 2020 and 2019 to measure and disclose the pension cost for the interim period because there were no significant market fluctuations and no significant curtailment, liquidation or other significant one-time events after the reporting date in the prior financial year.

For the years ended March 31, 2021 and 2020, the Consolidated Company recognized expenses of $208 and $233 in profit or loss, respectively.

Defined contribution plan

As to the defined contribution plan, the Consolidated Company shall contribute the retirement funds of employees to the individual accounts for labor retirement funds of the Bureau of Labor Insurance according to 6% of the monthly salaries of labors under the provisions of Labor Pension Act. Under this plan, after contributing fixed amount to the Bureau of Labor Insurance, the Consolidated Company will not assume the legal or constructive obligations of paying extra amount.

The pension expense under the defined contribution retirement funds of the Consolidated Company from Jan. 1 to March 30, 2021 and 2020 were $3,624,000, $2,407,000, respectively, which have been contributed to the Bureau of Labor Insurance.

In accordance with the pension insurance system established by the government of the People’s Republic of China, the subsidiaries in Mainland China make monthly contributions to employees’ pension insurance based on a certain percentage of their salaries and wages. The monthly pension plan is administered and arranged by the government, and the above-mentioned company has no further obligation other than to make monthly contributions. The related pension expense from Jan. 1 to March 31, 2021 were $52,215,000 and $39,341,000, respectively.

(19) Income tax

The details of the income tax expense of the Consolidated Company are as follows:

2021 Jan. to Mar. 2020 Jan. to Mar. Income tax expense for the period Income tax generated for the period $252,044 87,963 Adjustment of the income tax for the period (2,610) - 249,434 87,963 Deferred income tax expense Other deferred income tax expense 10,729 19,644 Income tax expense $260,163 107,607 The breakdown of income tax expense (benefit) recognized under other comprehensive income for 2021 and Jan.1 to Mar. 31, 2020 is as follows 2021 Jan. to Mar. 2020 Jan. to Mar. Items that may be reclassified subsequently to profit or loss. Exchange differences on translation of financial statements of foreign operating entities $ (323) -	2021 Jan. to Mar.	2020 Jan. to Mar. 87,963 -
	$252,044 (2,610)
	249,434	87,963
	10,729	19,644
	$260,163	107,607
	$ (323)

The breakdown of income tax expense (benefit) recognized under other comprehensive income for 2021 and Jan.1 to Mar. 31, 2020 is as follows

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

Income Tax Approval

The approval on the filing of final income tax return of the Company has been approved through 2018 as required by the taxing authority.

The income tax returns of the domestic subsidiaries: Jiayu Investment Co., Ltd., Ememe Robot Co., Ltd., Lintes Technology Co., Ltd., and GENIE PRECISION MACHINING CO., LTD. has been approved through 2019.

(20) Capital and other equity

As of March 31, 2021, December 31, 2020, and March 31, 2020, the total authorized share capital of the Company was $1,550,000, with a par value of $10 per share, and the actual amount issued were all $1,034,779.

1. Capital reserve

The components of the Company’s capital reserve are as follows:

Premium of issued shares Change in the net value of the stock of subsidiaries and associates accounted for using the equity method Employee stock options	Mar. 31, 2021 $3,577,768 368,054 15,399		Dec. 31, 2020 3,577,768 365,080 15,399		Mar. 31, 2020 3,577,768 366,393 15,399 3,959,560
	$3,961,221		3,958,247

In accordance with the Companies Act, capital surplus is required to cover losses first before new shares or cash can be issued in proportion to the shareholders’ original shares. Realized capital surplus referred to in the preceding paragraph includes premiums from the issuance of shares in excess of par value and proceeds from gifts received. In accordance with the Regulations Governing the Issuer’s Offerings and Issuance of Marketable Securities, the aggregate amount of capital surplus that may be capitalized each year shall not exceed 10% of the paid-in capital.

2. Retained earnings

In accordance with the Company’s Articles of Incorporation, the Company shall, after the final settlement of each year’s earnings, first complete tax contributions, make up for prior years’ deficits and set aside 10% as legal reserve, except when the legal reserve has reached the level of total capital; the Company is required by law to set aside or reverse special reserve. In the case of unappropriated earnings for the same period, the Board of Directors shall propose a proposal for the distribution of earnings to the shareholders for resolution, and the dividend to be distributed shall not be less than 20% of the net profit for the year after taxation, after deducting the net income provided for by law.

The Company will take into account the environment and growth of the Company and the distribution of earnings should take into account the Company’s future capital expenditure budget and capital requirements, and pay cash dividends of not less than 10% of the dividends distributed in the current year.

(1) Legal reserve

If the Company has no deficit, it may, by resolution of the shareholders in general meeting, issue new shares or cash out of the legal reserve to the extent that such reserve exceeds 25% of the paid-in capital.

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

(2) Special reserve

When the Company distributes distributable earnings, the Company accounts for other shareholders’ equity in the current year and provides a special reserve of the same amount from current period’s profit or loss as the prior period’s undistributed earnings, and a special reserve of the same amount from prior period’s undistributed earnings is not distributed. If there is a subsequent reversal in the amount of other decreases in shareholders’ equity, the reversal may be distributed in the form of a surplus. (3) Earnings distribution

On March 24, 2021, the Board of Directors proposed the appropriation of earnings for the year 2020; on June 19, 2020, the shareholders resolved the appropriation of earnings for the year 2019:

Distributed to the holders of common stock: Cash		2020 Payout ratio (NTD) Amount $13.30 1,376,256		2019 Payout ratio (NTD) Amount 10.50 1,086,518	2019 Payout ratio (NTD) Amount 10.50 1,086,518
		Payout ratio (NTD) $13.30		Payout ratio (NTD) 10.50

Information on the distribution of earnings approved by the board of directors and resolved at the shareholders' meeting is available on the Market Observation Post System (MOPS).

Other equity

Exchange difference between foreign operating office's statement $ (586,953) (41,286) -	Unrealized gain or loss on financial assets measured at FVTOCI (8,019) - (33)	Total (594,972) (41,286) (33)
$ (628,239)	(8,052)	(636,291)
Exchange difference between foreign operating office's statement $ (631,970) (36,805) -	Unrealized gain or loss on financial assets measured at FVTOCI (18,562) - (2,692)	Total (650,532) (36,805) (2,692)
$ (668,775)	(21,254)	(690,029)

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

(21) Earnings per share

The basic earnings per share and diluted earnings per share of the Consolidated Company were calculated as follows:

Net profit attributable to the Company for the period Weighted average shares outstanding (1,000 shares) Dilutive potential common stock Compensation of employees Basic earnings per share Diluted earnings per share	2021 Jan. to Mar.	2020 Jan. to Mar. 412,898
	$833,656
	103,478 234	103,478 348
	103,712	103,826
	$8.06	3.99
	$8.04	3.98

(22) Revenue from contracts with customers
Please refer to Notes 14(3) and (4) for the breakdown of major geographical markets and major product revenues.
Balance of contract

Mar. 31, 2021 Dec. 31, 2020 Mar. 31, 2020 Contract liabilities $105,691 91,659 20,367 The opening balances of contract liabilities as of January 1, 2021 and January 1, 2010 were recognized as income of $41,220 and $4,147 for the years ended March 31, 2021 and 2010, respectively. n-operating income and expense . Interest income The details of interest income of the Consolidated Company are as follows: 2021 Jan. to Mar. 2020 Jan. to Mar. Bank deposit interest $3,711 8,405	Mar. 31, 2021	Dec. 31, 2020 91,659	Mar. 31, 2020 20,367
	$105,691

The opening balances of contract liabilities as of January 1, 2021 and January 1, 2010 were recognized as income of $41,220 and $4,147 for the years ended March 31, 2021 and 2010, respectively.

(23) Non-operating income and expense
Interest income
Other income

The details of other income of the Consolidated Company are as follows:

Income from molding Income from compensations Income from rentals Income from the sales of developed products Income from subsidies Others	2021 Jan. to Mar. $4,746 10,380 8,086 - 261 24,289 $47,762	2020 Jan. to Mar. 4,636 390 7,020 2,483 188 20,034 34,751

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

3. other income and losses

The details of other income and losses of the Consolidated Company are as follows:

Foreign exchange gain (loss) Net profit or loss from the financial assets (liabilities) measured at FVTPL Derivative commodities: Forward foreign exchange contracts Metal commodity exchange contracts Non-derivative commodities Losses from the disposal of property, plant and equipment Lease modification benefits Other Total	2021 Jan. to Mar.	2020 Jan. to Mar. 42,246 - (100) (7,594) (303) - (5,332)
	$ (4,356) 3,371 17,442 16,312 (1,019) 17 (4,243)
	$27,524	28,917

4. financial cost

The details of the financial cost of the Consolidated Company are as follows:

Interest expense	2021 Jan. to Mar.	2020 Jan. to Mar. 2,592
	$3,707

(24) Compensation for employees, directors and supervisors

In accordance with the Company's Articles of Incorporation, not less than 3% of the annual profit shall be appropriated as compensation to employees and not more than 3% as compensation to directors and supervisors, but if the Company has accumulated losses, the amount of compensation shall be reserved in advance, and then the compensation to employees and directors and supervisors shall be appropriated in accordance with the aforementioned percentages. The aforementioned employees' remuneration in the form of stock or cash may include employees of the Company who meet certain criteria.

The estimated compensation to employees was $28,622 thousand and $18,250 thousand for the term from Jan.1, to March 31, 2021 and 2020, respectively, and the estimated compensation to directors and supervisors was $1,120 thousand for the years ended March 31, 2021 and 2010, respectively. The distribution is estimated and reported as operating costs or operating expenses for the period. If the actual distribution amount differs from the estimated amount in the following year, the difference is accounted for as a change in accounting estimate and recognized as profit or loss in the following year. If the Board of Directors resolves to distribute stock-based compensation to employees, the number of shares of stock-based compensation is calculated based on the closing price of the common stock on the day before the Board of Directors' resolution.

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

The difference of $46 thousand between the actual allotment of employees', directors' and supervisors' remuneration in 2019 and 2018 has been accounted for as a change in accounting estimate and recognized as profit or loss for the year 2020. The related information can be found on the Market Observation Post System.

(25) Financial instruments and fair value information

Credit risk
(1) Credit risk exposure

The carrying amount of financial assets represents the maximum credit risk amount. As of March 31, 2021, December 31, 2020 and March 31, 220, the maximum credit risk amount was $10,245,180 thousand, $10,286,606 thousand and $9,419,286 thousand, respectively.

(2) Credit risk concentration risk

The Consolidated Company's customers are concentrated in the high-tech computer industry customer base. In order to reduce the credit risk of accounts receivable, the Consolidated Company continuously evaluates the financial position of its customers and adjusts the terms of the transactions between the two parties when necessary. As of March 31, 2021, December 31, 2020 and March 31, 2020, the Consolidated Company had three, four and six different customers whose accounts receivable balances exceeded 5% of the total accounts receivable, respectively.

(3) Impairment loss

The Consolidated Company uses a simplified approach to estimate expected credit losses for all notes and accounts receivable, i.e., the expected credit losses are measured using the expected credit losses over the life of the contracts. For this purpose, these notes and accounts receivable are grouped according to common credit risk characteristics that represent the customers' ability to pay all amounts due under the terms of the contracts, and forward-looking information has been incorporated. An analysis of the expected credit losses on the Consolidated Company's notes receivable and accounts receivable is as follows.

Not past due 1-30 days past due 31-60 days past due 61-120 days past due 121-180 days past due 181-270 days past due More than 271 days past due		Mar. 31, 2021		Expected credit loss in the duration of provision 961 1,467 2,590 628 1,344 4 6,547
	Book value of notes and accounts receivable $6,673,265 325,623 182,555 4,840 3,438 4 6,547	Weighted average expected credit loss rate 0.01% 0.45% 1.42% 12.98% 39.09% 100.00% 100.00%
	$7,196,272			13,541

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

	Dec. 31, 2020	Expected credit loss in the duration of provision 750 1,698 1,992 572 489 1 6,547
Book value of notes and accounts receivable $6,413,813 363,005 116,197 5,698 1,771 2 6,547	Weighted average expected credit loss rate
	0.01% 0.47% 1.71% 10.04% 27.61% 50.00% 100.00%
$6,907,033		12,049

	Mar. 31, 2020	Expected credit loss in the duration of provision 812 812 971 647 66 1,363 - 5,582
Book value of notes and accounts receivable $5,037,078 234,281 70,773 5,229 350 2,611 - 5,582	Weighted average expected credit loss rate
	0.02% 0.35% 1.37% 12.37% 18.86% 52.20% 100.00% 100.00%
$5,355,904		10,253

The changes in the provisions for notes and accounts receivable of the Consolidated Company are as follows:

Opening balance Recognized impairment loss Foreign currency translation gains and losses Closing balance	2021 Jan. to Mar.	2020 Jan. to Mar. 8,592 1,675 (14)
	$12,049 1,489 3
	$13,541	10,253

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

2. Liquidity risk

The contracts of financial liabilities are sorted by their maturity dates as follows. The estimated interests are included, but the effect of net value agreement is excluded:

Book Value $28,535 22,915 18,121 2,898,675 1,299,638 16,000 268,889	Contract cash flow 28,548 23,305 18,121 2,898,675 1,299,638 16,000 293,994	Within6 months 28,548 2,709 18,121 2,898,675 1,299,638 16,000 67,227	-612 months - 3,511 - - - - 50,601	-12years - 16,270 - - - - 85,744	-25years - 815 - - - - 89,230	More than 5 years - - - - - - 1,192
$4,552,773	4,578,281	4,330,918	54,112	102,014	90,045	1,192
$23,996 3,574 2,501,155 1,206,695 176,250	24,680 3,574 2,501,155 1,206,695 193,213	2,303 3,574 2,501,155 1,206,695 49,038	3,318 - - - 30,274	6,973 - - - 43,091	12,086 - - - 70,810	- - - - -
$3,911,670	3,929,317	3,762,765	33,592	50,064	82,896	-
$14,734 1,655,201 928,668 147,189	14,734 1,655,201 928,668 154,785	14,734 1,655,201 928,668 52,761	- - - 41,907	- - - 31,210	- - - 28,907	- - - -
$2,745,792	2,753,388	2,651,364	41,907	31,210	28,907	-

The Consolidated Company does not expect that the cash flows analyzed at maturity will occur significantly earlier or that the actual amounts will be significantly different.

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

3. market risk - exchange rate risk

(1) Exposure to exchange rate risk

The Consolidated Company's financial assets and liabilities exposed to significant foreign currency exchange rate risk The Consolidated Company's financial assets and liabilities exposed to significant foreign currency exchange rate risk are as follows:

	Financial assets Currency USD RMB HKD JPY EURO INR VND Financial liabilities Currency USD RMB HKD JPY EURO		Mar. 31, 2021
			Foreign currency (Note) $429,848 185,137 2,272 413,677 2,602 4 4,587,073 $232,874 20,574 3,299 45,900 643

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

	Financial assets Currency USD RMB HKD JPY EURO INR VND Financial liabilities Currency USD RMB HKD JPY EURO		Dec. 31, 2020
			~~Foreign~~ ~~currency~~ ~~(Note)~~ $364,728 177,119 7,601 134,465 1,105 4 3,662,009 $200,582 10,899 2,778 75,180 33

	Financial assets Currency USD RMB HKD JPY EURO INR VND Financial liabilities Currency USD RMB HKD JPY		Mar. 31, 2020
			~~Foreign~~ ~~currency~~ ~~(Note)~~ $345,949 148,782 7,701 272,162 1,812 4 17,980 $166,592 48 2,066 23,700

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

Note: Foreign currencies denominated in non-functional currencies of each consolidated entity include items eliminated in the consolidated financial statements for inter-group transactions.

Due to the variety of functional currencies of the Consolidated Company, information on exchange gains and losses on monetary items is presented on a consolidated basis. Foreign currency exchange gains and losses (including realized and unrealized gains and losses) for the years ended March 31, 2021 and 2020 were $4,356 thousand and $42,246 thousand, respectively.

(2) Sensitivity analysis

The Consolidated Company's exchange rate risk arises mainly from foreign currency denominated cash and cash equivalents, accounts receivable and other receivables, other financial assets, short-term borrowings, accounts payable and other payables, which are translated into foreign currency at the time of translation. For the three months ended March 31, 2021 and 2020, if the New Taiwan dollar had weakened or strengthened by 1% against the foreign currencies held by the Consolidated Company, with all other factors held constant, net income after tax would have increased or decreased by $48,032 and $49,656, respectively, from January 1, 2021 and March 31, 2020. The same basis was used in the analysis for both periods.

Market risk - interest rate changes

The Consolidated Company's interest rate risk mainly arises from floating-rate bank deposits and short-term borrowings. Therefore, changes in interest rates will cause the effective interest rates of bank deposits and short-term borrowings to change accordingly, resulting in fluctuations in future cash flows.

The sensitivity analysis below is based on the interest rate risk of the financial instrument at the reporting date. For floating rate liabilities, the analysis assumes that the amount of the liability outstanding at the reporting date is outstanding for the entire year. The rate of change used in reporting interest rates internally to key management is a 1% increase or decrease in interest rates, which also represents management's assessment of the range of reasonably possible changes in interest rates.

As of March 31, 2021, December 31, 2021 and March 31, 2020, the Consolidated Company had financial assets with variable interest rates of $2,109,838 thousand, $2,262,409 thousand and $1,869,837 thousand, respectively, and financial liabilities of $22,915 thousand, $23,996 thousand and $0 thousand, respectively. If interest rates had increased or decreased by 1%, the Consolidated Company's net income would have increased or decreased by $4,174 and $3,740 for the years ended March 31, 2021 and 2020, respectively, with all other variables held constant.

Market risk - fair value
(1) Fair value and carrying amount

The management of the Consolidated Company considers that the fair value of non-derivative short-term financial instruments is estimated at their carrying amounts on the balance sheet because the carrying amounts of such instruments are close to their maturity dates and should be a reasonable basis for estimating fair value. This method is applied to cash and cash equivalents, notes receivable and payable, accounts receivable and payable, other receivables and payables, refundable deposits and short-term borrowings.

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

In addition to the above financial instruments, the fair value and carrying value information of the Consolidated Company's remaining financial instruments and investment properties as of the date of the financial report were as follows

Measured at fair value: Financial assets: Financial assets measured at FVTPL Financial assets measured at FVTOCI Financial liabilities Financial liabilities measured at FVTPL Not measured at fair value: Non-financial assets: Investment property	Mar. 31, 2021	Mar. 31, 2021		Dec. 31, 2020	Dec. 31, 2020		Mar. 31, 2020 Book Value Fair value 13,337 13,337 3,746 3,746 - - 380,219 420,061
	Book Value	Fair value		Book Value	Fair value		Book Value
	$122,237 122,237 22,141 22,141 12,064 12,064 335,387 466,837			122,960 122,960 22,136 22,136 - - 368,019 467,325

(2) The evaluation techniques used to determine fair value are as follows
A. When financial assets are quoted publicly in an active market, this market price is the fair value. When market prices are not available, estimates are made by reference to quoted counterparties or using valuation techniques. The estimates and assumptions used are consistent with the information used by market participants as estimates and assumptions in pricing financial instruments.
B. The fair value of investment properties is based on the evaluations of independent evaluators with recognized professional qualifications and recent experience in the area and type of investment properties evaluated.
(3) Fair value hierarchy
The following table analyzes the fair value hierarchy of financial instruments and
investment property by valuation. Each fair value hierarchy is defined as follows:
A. Level 1: Publicly quoted prices (unadjusted) in an active market for identical assets or liabilities.
B. Level 2: Input parameters for an asset or liability are observable either directly (i.e., prices) or indirectly (i.e., derived from prices), except for publicly quoted prices included in Level 1.
C. Level 3: Input parameters for an asset or liability are not based on observable market information (non-observable parameters).

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

Level 1 $104,795 20,200	Level 2 - -	Level 3 17,442 1,941
$124,995	-	19,383
$-	-	12,064
$-	-	466,837
$116,780 20,120	- -	6,180 2,016
$136,900	-	8,196
$-	-	467,325
$13,337 -	- -	- 3,746
$13,337	-	3,746
$-	-	420,061

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

(4) Schedule of changes in financial assets (liabilities) classified as Level 3 at fair value through profit or loss

Unit: NT$ thousands

Name				2021Q1
	Opening balance $6,180 - 2,016 $8,196	Profit a Recognized in profit or loss 17,442 (12,064) -	nd losses Recognized in other comprehensive income - - (75)	Incr	ease Transferred to level 3 - - - -	Decrease Sales, disposal or clearing (6,180) - -	Closing balance 17,442 (12,064) 1,941
				Purchase - - -
Financial assets measured at FVTPL Financial liabilities measured at FVTPL Financial assets measured at FVTOCI Name
		5,378	(75)	-		(6,180)	7,319
				2020Q1
	Opening balance $219,103 6,438 $225,541	Profit a Recognized in profit or loss 1,231 -	nd losses Recognized in other comprehensive income - (2,692)	Incr	ease Transferred to level 3 - - -	Decrease Sales, disposal or clearing (220,334) -	Closing balance - 3,746
				Purchase - -
Financial assets measured at FVTPL Financial assets measured at FVTOCI
		1,231	(2,692)	-		(220,334)	3,746

The above included gains and losses are reported in "Other gains and losses", which relate to assets and liabilities still held as of March 31, 2021 and 2010 as follows

Recognized in profit (loss)

2021Q1	2020Q1 -
$5,378

(5) Quantitative information on the fair value measurement of significant non-observable input values (level 3)

The Consolidated Company through the profit or loss of fair value as the third level measured at the fair value of financial assets on September 30, 2020, December 31, 2019, and September 30, 2019, are respectively $1,989, $219,103, and $0, and its financial liabilities measured at fair value through profit or losses are respectively $0, $0, and $1,706 on September 30, 2020, December 31, 2019, and September 30, 2019. Because there was no active market public offer reference and counterparties, and because in practice, it can’t fully grasp the major unobservable input value and the fair value of the relationship, so it did not reveal the quantitative information. The quantitative information list of the other significant unobservable input values measured at fair value at third level is as follows:

Item	Valuation technique	Significant unobservable inputs	Relationship between significant unobservable inputs and fair value

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

Financial assets Comparable The multiple of The higher the measured at Company book-to-market multiple, the FVTOCI-invest Analysis ratio: higher the fair ment in equity 0.56~0.61 as of value instruments with Mar. 31, 2020 ‧The higher the no active market ‧Discount for lack of discount for lack marketability: of marketability, 14.8%~16.8% as of the lower the fair Mar. 31, 2020 value

" Net asset value Net asset value ‧Positive method correlation with fair value

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

(6) The fair value is classified in the third level of the evaluation process

The fair value of the Consolidated Company is measured using the unobservable input value, which is classified as the third level. The input value of this level is based on the price provided by the counterparty quotation or the price-to-market ratio multiplier of the market comparable company, etc., and relevant quotation and evaluation data are properly kept. The evaluation results are then checked to ensure consistency with the evaluation sources and to ensure that the evaluation results are reasonable.

(7) The fair value measurement of the third level and the sensitivity analysis of the fair value to the reasonable alternative hypothesis

The fair value measurement of financial instruments by the Consolidated Company is reasonable, but different evaluation models or evaluation parameters may result in different evaluation results. For financial instruments classified as level 3, if the evaluation parameters change, the impact on current profits and losses or other comprehensive income is as follows:

Mar. 31, 2020 Financial assets measured at FVTOCI investment in equity instruments with no active market	Input	Rise or drop	The change of fair value reflected in the profit or loss in the period	The change of fair value reflected in the profit or loss in the period	The change of fair value reflected in other comprehensive income	The change of fair value reflected in other comprehensive income
			Favorable change	Adverse change	Favorable change	Adverse change
	The multiple of book-to-mar ket ratio Discount for lack of marketabilit y	5% 1%	- -	- -	103 29	(97) (23)

Favorable and unfavorable changes in the Consolidated Company represent fluctuations in fair value, which is calculated using valuation techniques based on varying degrees of unobservable input parameters. If the fair value of a financial instrument is affected by more than one input, the above table reflects only the effect of changes in a single input and does not take into account the correlation and variability among the inputs.

(26) Financial risk management

The Consolidated Company's financial risk management objectives and policies are consistent with those disclosed in the consolidated financial statements as of and for the year ended December 31, 2012, please refer to Note 6(27) to the consolidated financial statements for related information.

(27) Capital Management

There were no significant changes in the Consolidated Company's capital management objectives, policies and procedures from those disclosed in the 2010 consolidated financial statements. For related information, please refer to Note 6(28) to the consolidated financial statements for the year ended December 31, 2012.

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

(28) Investment and fund-raising activities for non-cash transactions

Please refer to Notes 6(8) and 6(14) for information on the Consolidated Company's investment in non-cash transactions and capital raising activities for the period from January 1, 2021 and March 1, 2012 to March 31, 2012 for assets acquired under leases with rights to use.

A reconciliation of the Consolidated Company's liabilities for self-financing activities for the years ended January 1, 2021 and March 31, 2021 and 2010 is as follows

Short-term loan Long-term loans (including long-term loans due within one year or one business cycle) Lease liabilities Total liabilities from financing activities Short-term loan Lease liabilities Total liabilities from financing activities	Jan. 1, 2021 Cash flow $- 28,280 23,996 (1,081) 176,250 (31,657)	Non-cash change Other Change in exchange rate Change in fair value Mar. 31, 2021 - 255 - 28,535 - - - 22,915 125,871 (1,575) - 268,889
	$200,246 (4,458)	125,871 (1,320) - 320,339
	Jan. 1, 2020 Cash flow $29,980 (30,465) 155,411 (27,524)	Non-cash change Other Change in exchange rate Change in fair value Mar. 31, 2020 - 485 - - 21,283 (1,981) - 147,189
	$185,391 (57,989)	21,283 (1,496) - 147,189

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

VII. Transactions with related parties

(a) Parent company and ultimate controlling party: The Company is the ultimate controlling party of the Consolidated Company and the Consolidated Company's subsidiaries.
(2) Name and relationship of related parties

The related parties with whom the Company had transactions during the period covered

by these consolidated financial statements are as follows.

Name of Related Party Teckwah Investment Co. Key management personnel	Relationship with the Company
	Substantial Related Party Including the directors, supervisors, managers and their families and spouses

(3) Significant transactions with related parties

1. Lease

The Consolidated Company entered into a one-year lease agreement with a related party for the warehouse with reference to the rental rate of the neighboring warehouses, with a total contract value of $60 thousand. The interest expense recognized from January 1, 2020 to March 1, 2021 was $0. The balance of lease liabilities as of March 31, 2021, December 31, 2020 and March 31, 2020 were $103, $0 and $44, respectively.

Borrowing from related parties

The Consolidated Company borrowed the following amounts from related parties.

Other related parties Main Management Level	Mar. 31, 2021 $4,000 12,000	Dec. 31, 2020 - -	Mar. 31, 2020
			- -
	$16,000	-	-

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

The Consolidated Company's loans to related parties bear interest at 2% per annum

on pledges of fixed deposits with financial institutions in the year in which the funds are allocated by each related party.

(4) Major management personnel transaction

Related compensation includes:

Short-term employee benefits Post-employment benefits	2021 Jan. to Mar. $14,762 316	2020 Jan. to Mar. 14,744 289 15,033
	$15,078

VIII. Pledged assets

The carrying value of the assets pledged as collateral by the Consolidated Company was as follows:

	Name of Asset	Mar. 31, 2021 $43,489		Dec. 31, 2020 66,669		Mar. 31, 2020 44,413
	Property, plant and equipment

XI. Significant contingent liabilities and unrecognized contractual commitments

(1) Significant unrecognized contractual commitments.

As of March 31, 2021, the Consolidated Company had outstanding contracts for the construction of major plants amounting to approximately RMB37,430 thousand.

As of March 31, 2021, the Consolidated Company had outstanding land use rights
purchase contracts amounting to approximately US$7,665 thousand.
As of March 31, 2021, the Consolidated Company had outstanding information
system-related contracts amounting to approximately $20,576.
(2) Guaranteed notes issued in connection with bank loans, financing lines and derivative financial instrument transactions.

Mar. 31, 2021 Dec. 31, 2020 Mar. 31, 2020 Guaranteed notes $1,641,857 1,570,240 2,553,050

X. Major disaster losses: None.

XI. Significant Post-Term Events

On May 13, 2021, the Board of Directors approved the issuance of 2,500,000 shares of common stock with a par value of NT$10 per share and the issuance of 10,000 unsecured domestic convertible bonds with a par value of NT$10,000,000 each and a total par value of NT$1,000,000. The interest rate is 0%.

On May 13, 2021, the Board of Directors resolved to dismantle and rebuild the second plant in Keelung with an estimated capital investment of NT$480,000 thousand.

Lintes Technology Co., Ltd. purchased real estate from a related party of the Consolidated Company for use as a factory for the purpose of future product development and medium- to long-term business development for a total transaction amount of $231,000 thousand on May 7, 2021.

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

XII. Other

(i) Employee benefits, depreciation, depletion and amortization functions are summarized below:

By function By nature	2021Q1	2021Q1	2021Q1	2020Q1	2020Q1	2020Q1
	Operation cost	Operation expense	Total	Operation cost	Operation expense	Total
Employee benefit Salaries expense Labor insurance and health insurance expenses Pension expense Compensation of directors Other employee benefit expenses Depreciation expense Amortization expense	964,152 100,743 743 - 45,397 231,452 374	344,220 31,159 3,089 1,463 34,833 103,252 11,595	1,308,372 131,902 3,832 1,463 80,230 334,704 11,969	342,388 75,809 89 - 25,918 202,421 306	241,568 21,541 2,551 1,355 23,150 90,304 3,268	583,956 97,350 2,640 1,355 49,068 292,725 3,574

(2) Seasonality of operation.

The Company's operations are subject to seasonal fluctuations due to the downstream computer industry.

XIII. Note Disclosure

(1) Information on significant transactions

Information on significant transactions that should be disclosed in accordance with the Guidelines Governing the Preparation of Financial Reports by Securities Issuers from January 1, 2021 to March 31, 2021 is as follows.

Lending of funds to others.

Unit: NT$ thousands/1,000 in foreign currency

No.	Lender	Borrower	Item	Relate d party	Max amount for the period	Closing balance at the end	Actual lending amount	Interest rate	Nature of the lending (Note 1)	Business amount	Purpose f or the lending	Allowance for bad debt	Collateral	Collateral	Individual limit (Note 2)	Overall limit (Note 2)
													Name	Value
0	The Company	Lotes Guangzhou Co., Ltd.	Intercom pany transacti on	Yes	219,365 (RMB50,000)	217,120 (RMB50,000)	86,848	4.5%	2	-	Working capita	-	none	-	2,858,902	5,717,804

Note 1: The funds are lent with the following description.

(1) Those who have business dealings.
(2) Those who have the need for short-term financing funds.

Note 2: The Company's financing to a single party shall not exceed 20% of the Company's net worth.

The total amount of the Company's funds loaned to others shall not exceed 40% of the Company's net worth.

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

2. Endorsement for others.

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

Unit: NT$ thousands/1,000 in foreign currency
Endorsee
Name of Percentage of the
Ceiling on Endorseme
the Balance of Ending accumulated Endorsement Endorsement
amount of Amount of Ceiling on nt made to
company Relatio the ceiling balance of Amount amount of made by made by
endorsement endorsemen amount of any party
that Company nship endorsement the actually endorsement in parent subsidiary to
No. for a t backed by endorsement in
provides the name (Note 1) fee in the endorsement used the net value of company to parent
enterprise assets (Note 2) Mainland
endorsemen period fee current financial subsidiary company
(Note 2) China.
t statement (%)
REKA
The
0 Technology 2 2,858,902 35,000 35,000 - - 0.24% 7,147,255 Yes No No
Company
Co., Ltd.
Lotes
228,280 228,280
0 " Guangzhou 2 2,858,902 - - 1.60% 7,147,255 " " Yes
(USD8,000) (USD8,000)
Co., Ltd.
REKA
85,605 85,605
1 Lotes GuaTechnology 1 1,137,366 - - 1.51% 2,843,416 No " No
(USD3,000) (USD3,000)
Co., Ltd.
Lintes
Lintes
Technology 114,140 114,140 -
2 Technology 2 856,104 - 6.67% 1,712,209 " " Yes
(Suzhou) Co., (USD4,000) (USD4,000)
Co., Ltd.
Ltd.
Genie
Precision 18,045
2 " 2 856,104 101,260 101,260 - 5.91% 1,712,209 " " No
Machining Co.,
Ltd.
----- End of picture text -----

Note 1: There are seven types of relationships between the endorser and the target of the

endorsement, and the types can be indicated as follows

(1) Companies that have business dealings with us.
(2) Companies in which the Company directly and indirectly holds more than 50% of the voting shares.
(3) Companies that directly or indirectly hold more than 50% of the voting shares of the Company.
(4) Intercompany in which the Company directly or indirectly holds more than 90% of the voting shares.
(5) A company that is mutually insured by the contract between peers or co-founders based on the needs of the contracted work.
(6) Companies that are guaranteed by all contributing shareholders in proportion to their shareholdings due to joint investment.
(7) Interbank engagement in the performance guarantee of pre-sale contracts in accordance with the Consumer Protection Act.

Note 2: (1) The Company's endorsement and guarantee for a single enterprise shall be

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

limited to 20% of the Company's net worth.

The total amount of the Company's external endorsement guarantee shall not exceed 50% of the Company's net worth.

(2) The amount of guarantee endorsed by Lotes Guangzhou Co., Ltd. to a single enterprise shall not exceed 20% of the net worth of the company.
Lotes Guangzhou Co., Ltd.'s total amount of external endorsement guarantee shall
not exceed 50% of the net worth of the Company.
(3) The amount of guarantee endorsed by Lintes Technology Co., Ltd. for a single enterprise shall not exceed 50% of the net worth of the company.

Lintes Technology Co., Ltd.'s total amount of external endorsement guarantee shall not exceed 100% of the net worth of the Company.

Marketable securities held at the end of the period (excluding investment in subsidiaries, affiliated enterprises and joint venture interests).

Unit: NT$ thousands

Company which holds securities	Category and name of security	Relationship with the issuer of the security	Listed as	End of the fiscal period	End of the fiscal period	End of the fiscal period	End of the fiscal period	Note
				Shares	Book Value	Shareholdin g proportion	Fair value
Jiayu Investment Co., Ltd. " " " " "	Grand-Tek Technology Co., Ltd. Lian Hong Art Company Limited Sitronix Technology Corp. OTO PHOTONICS INC. LUCEMITEK CO., LTD. RADINET COMMUNICATIO NS INC.	None " " " " "	Financial assets measured at FVTPL - current " " " " "	163,980 1,017,000 30,000 1,368,800 1,169,977 600,000	6,034 91,591 7,170 - - -	0. 67% 2. 98% 0. 02% 4. 57% 17. 33% 26. 25%	6,034 91,591 7,170 - - -	Note Note Note

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

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

Jiayu AICP Technology None Financial assets 400,000 1,941 5. 1,941
Investment Co., Corporation measured at 33%
Ltd. FVTOCI -current
Lintes Class A preferred " Financial assets 202,000 20,200 0. 20,200
Technology shares of Chailease measured at 13%
Co., Ltd. Holding Co. FVTOCI -
non-current
----- End of picture text -----

Note: The loss was fully recognized.

Accumulated purchase or sale of the same marketable securities amounting to at least NT$300 million or 20% of the paid-in capital: None.
Acquisition of real estate amounting to at least NT$300 million or 20 percent of the paid-in capital.

Unit: NT$ thousands

The company which acquired the property	Name of Asset	Date of occurren ce	Amount of Transactio n (Note 2)	Payment conditio n (Note 2)	Counterparty of transaction	Relatio nship	If the counterparty is a related party, the information of its previous transfer shall beprovided	If the counterparty is a related party, the information of its previous transfer shall beprovided	If the counterparty is a related party, the information of its previous transfer shall beprovided	If the counterparty is a related party, the information of its previous transfer shall beprovided	Reference for pricing	Purpose of the acquisitio n and the condition of use	Other agreed matter s
							Owner	Relationshi p with the Issuer	Date of transfer	Amount
Lotes Zhongshan Co., Ltd. Lotes Hengnan Co., Ltd. LOTES CO., LTD Lintes Technology Co., Ltd.	Plant (Note 1) " Land Use Rights Lot 1159, Health Section, Zhonghe District, New Taipei City, Taiwan and the building	106.10 ~ 110.03 108.10 ~ 110.03 110.01.11 109.12.16	885,686 318,783 312,458 237,700	783,829 258,101 93,205 237,700	Chongqing Chuangyou Construction Group, etc " GREEN -iPARK CORPORATION Natural Persons	None " " "	- - - -	- - - -	- - - -	- - - -	Bidding " Mutual Bargainin g Appraisal report issued by a commissi oned appraisal firm	For the constructi on of a plant " " Office use (Note 3)	None " " "

Note 1: Self-contracted factory.

Note 2: Translated into New Taiwan dollars using the exchange rate at the balance sheet date.

Note 3: To be repossessed by the original tenant for its own use upon expiration of the lease.

Disposal of immovable property amounting to at least NT$300 million or 20% of the paid-in capital: None.
If the amount of purchase or sale with related parties reaches NT$100 million or 20% of the paid-in capital or more.

Unit: NT$ thousands

The company which purchases (sells) products	Name of Transaction Counterpart y	Relationshi p	C	ondition of	Transaction	Transaction	Situation and reason for the conditions of transaction to be different from the ordinary ones	Situation and reason for the conditions of transaction to be different from the ordinary ones	Notes and receivable	accounts (payable)	Remark s
			Purchase (sales)	Amount	Percentage in total goods purchased (sold)	Credit period	Unit price	Credit period	Balance	Percentage in the notes and accounts receivable (payable)

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

Xincheng Development Co., Ltd. " REKA Technology Co., Ltd. " " " " " Lotes Guangzhou Co., Ltd. Lintes Technology (Suzhou) Co., Ltd.	The Company Lotes Suzhou Co., Ltd. The Company Lotes Guangzhou Co., Ltd. Lotes Hengnan Co., Ltd. " Lotes Zhongshan Co., Ltd. Guangzhou Leside Technology Co., Ltd. REKA Technology Co., Ltd. Lintes Technology Co.,Ltd.	Subsidiary The surrogate parent companies are the same parent company Subsidiary The surrogate parent companies are the same parent company " " " " " Subsidiary	Net revenue from the goods sold Net amount of purchase Net revenue from the goods sold Net amount of purchase Net amount of purchase Net revenue from the goods sold Net amount of purchase Net revenue from the goods sold Net amount of purchase Net revenue from the goods sold	339,211 365,839 2,352,807 2,375,010 137,788 119,640 411,482 159,969 635,045 488,401	92. 46% 99. 71% 73. 66% 76. 32% 4. 43% 3. 75% 13. 22% 5. 14% 37. 05% 98. 04%	90 days " " " " " " " " "	- - - - - - - - - -	No significant difference " " " " " " " " "	557,932 (568,138) 1,654,056 (976,993) (63,880) 118,839 (178,273) 159,969 (299,185) 424,480	97.14% 97.98% 51.09% 32.84% 2.15% 3.67% 5.99% 4.94% 20.37% 94.90%

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

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

Unit: NT$ thousands

Related party with accounts receivable by the Company	Name of transaction counterparty	Relationship	Balance of receivables from the relatedparty	Turnover ratio	Past due receivables from the related party	Past due receivables from the related party	Subsequent amounts collected from related parties	Amount accounted for as allowance for losses
					Amount	Solution
Xincheng Development Co., Ltd. REKA Technology Co., Ltd. " " " Lotes Suzhou Co., Ltd. Good Hope Investments Limited Lotes Guangzhou Co., Ltd. " Lotes Zhongshan Co., Ltd. Lotes Hengnan Co., Ltd. Guangzhou Leside Technology Co., Ltd. Lintes Technology (Suzhou) Co., Ltd.	The Company The Company Lotes Guangzhou Co., Ltd. Lotes Hengnan Co., Ltd. Lotes Zhongshan Co., Ltd. Guangzhou Leside Technology Co., Ltd. Xincheng Development Co., Ltd. REKA Technology Co., Ltd. " Lotes Zhongshan Co., Ltd. REKA Technology Co., Ltd. Lotes Shenzhen Automation Technology Co., Ltd. Zongka Technology (Shenzhen) Co., Ltd. Lintes Technology Co.,Ltd.	Subsidiary Subsidiary The surrogate parent companies are the same parent company " " " The surrogate parent companies are the same parent company Parent company The surrogate parent companies are the same parent company " " " The surrogate parent companies are the same parent company Subsidiary	557,932 1,654,056 299,185 118,839 214,124 159,969 568,138 880,631 976,993 253,289 178,273 113,263 106,885 424,480	3.20 5.57 8.44 4.81 - 8.00 3.34 - 8.93 - 9.24 2.40 6.95 4.90	- - - - - - - - - - - - - -		213,601 776,406 - - 18,949 19,449 225,029 - 122,449 - 142,612 - 10,542 183,570	- - - - - - - - - - - - - -

Engaged in derivative transactions: Please refer to Notes 6(2) and (23).

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

10. Business relationships and significant transactions between parent and subsidiary.

Business relationships and significant transactions between parent and subsidiary from January 1, 2021 to March 31, 2021.

Unit: NT$ thousands

				Unit: NT$thousands	Unit: NT$thousands	Unit: NT$thousands	Unit: NT$thousands
No.	Name	Transaction with	Relation ship	Transaction in 2021
				Subject	Amount	Term	Operating revenueAccounting for total assets
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0	The Company " " " " " " " " " " " " " " " " " "	Ememe Robot Co., Ltd. Lintes Technology Co., Ltd. " " " " Jiayu Investment Co., Ltd. LOTES USA, INC. " Xincheng Development Co., Ltd. " " " " REKA Technology Co., Ltd. " " " "	1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1	Other receivables Other income Net amount of purchase Accounts receivable Accounts payable Other receivables Other income Management fee Other payables Accounts receivable Accounts payable Net amount of purchase Sales revenue Marketing expenses Accounts receivable Accounts payable Sales revenue Net amount of purchase Marketing expenses	2,272 145 13,573 15 19,850 219 17 10,243 2,113 1,937 557,932 339,211 1,002 454 8,137 1,654,056 5,417 2,352,807 1	Same as common transactions " " " " " " " " " " " " " " " "	0.01% -% 0.29% -% 0.09% -% -% 0.22% 0.01% 0.01% 2.66% 7.15% 0.02% -% 0.04% 7.90% 0.11% 49.60% -%

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

No.	Name	Transaction with	Relation ship		Transa	ction in 2021
				Subject	Amount	Term	Operating revenueAccounting for total assets
0 0 0 0 0 0 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1	The Company " " " " " Lotes Guangzhou Co., Ltd. " " " " " " " " " " " " " " " " " " " " " " " " " " " " " " " " " " " " " " "	Lotes Suzhou Co., Ltd. " Good News Medical Co., Ltd. Lotes Guangzhou Co., Ltd. " Lerain Technology Co., Ltd. REKA Technology Co., Ltd. " " " " " Lotes Suzhou Co., Ltd. " " " Lotes Hengnan Co., Ltd. " " " " " Zongka Technology (Shenzhen) Co., Ltd. " " " " Lotes Shenzhen Automation Technology Co., Ltd. " " " Lintes Technology (Suzhou) Co., Ltd. " Lotes Zhongshan Co., Ltd. " " " " " " Guangzhou Leside Technology Co., Ltd. " Zhongshan Dezhi Metal Surface Treatment Co. " " "	1 1 1 1 1 1 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3	Other income Other receivables Other income Other receivables Interest income Other income Accounts receivable Accounts payable Purchase in the period Sales revenue Purchase of fixed assets Other receivables Sales revenue Purchase in the period Accounts receivable Accounts payable Accounts receivable Accounts payable Sale of fixed assets Other receivables Purchase in the period Sales revenue Management fee Accounts receivable Other receivables Sales revenue Other income Accounts receivable Other receivables Sales revenue Other income Sales revenue Accounts receivable Other payables Accounts receivable Other receivables Sales revenue Purchase in the period Sale of fixed assets Accounts payable Accounts receivable Sales revenue Purchase in the period Accounts receivable Accounts payable Sale of fixed assets	103 28 9 87,174 983 41 976,993 299,185 635,045 2,375,010 13,439 18,605 1,610 417 1,937 1,540 3,729 30,960 1,814 4,388 60,123 386 284 1,564 17 1,117 48 6,892 13 4,706 36 23,567 42,931 9,016 30,750 253,289 7,057 48,121 7,215 74,691 26 1 25,474 542 8,933 471	Same as common transactions " " " " " " " " " " " " " " " " " " " " " " " " " " " " " " " " " " " ' " " " " " " " " "	-% -% -% 0.42% 0.02% -% 4.66% 1.43% 13.39% 50.07% 0.06% 0.09% 0.03% -% 0.01% 0.01% 0.02% 0.15% 0.01% 0.02% 1.27% 0.01% -% 0.01% -% 0.02% -% 0.03% -% 0.10% -% 0.50% 0.20% 0.04% 0.15% 1.21% 0.15% 1.01% 0.03% 0.36% -% -% 0.54% -% 0.04% -%

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

No.	Name	Transaction with	Relation ship		Transa	ction in 2021
				Subject	Amount	Term	Operating revenueAccounting for total assets
2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 4 4 4 4 4 4 4 4 0 5	Lotes Suzhou Co., Ltd. " " " " " " " " " " " " " " REKA Technology Co., Ltd. " " " " " " " " " " " " " " " " " " " Lotes Hengnan Co., Ltd. " " " " " " " " Lintes Technology (Suzhou) Co., Ltd.	Xincheng Development Co., Ltd. " " " Zongka Technology (Shenzhen) Co., Ltd. " Lintes Technology (Suzhou) Co., Ltd. " " " Lotes Shenzhen Automation Technology Co., Ltd. " Lotes Zhongshan Co., Ltd. " " Xincheng Development Co., Ltd. " " Zongka Technology (Shenzhen) Co., Ltd. " Good Hope Investments Limited Ememe Robot Co., Ltd. Lotes Hengnan Co., Ltd. " " " Lotes Shenzhen Automation Technology Co., Ltd. " Zhongshan Dezhi Metal Surface Treatment Co. Lotes Zhongshan Co., Ltd. " " " Guangzhou Leside Technology Co., Ltd. " Lotes Shenzhen Automation Technology Co., Ltd. " Zongka Technology (Shenzhen) Co., Ltd. " Lotes Suzhou Co., Ltd. " Lotes Zhongshan Co., Ltd. " " Lintes Technology Co., Ltd.	3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3	Sales revenue Accounts receivable Accounts payable Purchase in the period Sales revenue Accounts receivable Sales revenue Other receivables Accounts receivable Other income Sales revenue Accounts receivable Purchase in the period Accounts payable Accounts receivable Purchase in the period Accounts receivable Accounts payable Sales revenue Accounts receivable Accounts payable Accounts receivable Sales revenue Accounts receivable Purchase in the period Accounts payable Sales revenue Accounts receivable Accounts receivable Sales revenue Purchase in the period Other receivables Accounts payable Sales revenue Accounts receivable Sales revenue Accounts receivable Sales revenue Accounts receivable Sales revenue Accounts receivable Sales revenue Accounts receivable Sale of fixed assets Sales revenue	365,839 568,138 1,198 1,047 5,542 9,638 2,778 7,369 5,252 4,271 18,670 31,135 13 38 467 12,065 290 16,980 31,987 67,885 880,631 7,800 119,640 118,839 137,788 63,880 24,598 69,767 2,526 1,374 411,482 214,124 178,273 159,969 159,969 65,865 113,263 26,217 40,783 956 1,661 9,215 4,674 - 488,401	Same as common transactions " " " " " " " " " " " " " " " " " " " " " " " " " " " " " " " " " " " " " " " " " " " "	7.71% 2.71% 0.01% 0.02% 0.12% 0.05% 0.06% 0.04% 0.03% 0.09% 0.39% 0.15% -% -% -% 0.25% -% 0.08% 0.67% 0.32% 4.20% 0.04% 2.52% 0.57% 2.90% 0.30% 0.52% 0.33% 0.01% 0.03% 8.67% 1.02% 0.85% 3.37% 0.76% 1.39% 0.54% 0.55% 0.19% 0.02% 0.01% 0.19% 0.02% -% 10.30%

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

No.	Name	Transaction with	Relation ship		Trans	action in 2021
				Subject	Amount	Term	Operating revenueAccounting for total assets
5 5	" "	" "	3 3	Accounts receivable Accounts payable	424,480 5,229	" "	2.03% 0.02%

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

6 6 7 7 7 7 8 8 8 8 8 8 8 8 9 9	Lintes Technology (Suzhou) Co., Ltd. Lintes Technology Co., Ltd. Zongka Technology (Shenzhen) Co., Ltd. " " " Lotes Zhongshan Co., Ltd. " " " " " " " Lotes Shenzhen Automation Technology Co., Ltd. "	Lintes Technology Co., Ltd. Genie Precision Machining Co., Ltd. Lotes Zhongshan Co., Ltd. " Guangzhou Leside Technology Co., Ltd. " Guangzhou Leside Technology Co., Ltd. " Lotes Shenzhen Automation Technology Co., Ltd. " Zhongshan Dezhi Metal Surface Treatment Co. " Lintes Technology (Suzhou) Co., Ltd. " Guangzhou Leside Technology Co., Ltd. "	3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3	Other payables Other payables Purchase in the period Accounts payable Purchase in the period Accounts payable Sales revenue Accounts receivable Sales revenue Accounts receivable Accounts payable Purchase in the period Sales revenue Accounts receivable Purchase in the period Accounts payable	1,707 193 86 99 92,822 106,885 20,500 50,717 4,774 5,556 7,036 12,568 19 44 70,383 81,047	Same as common transactions " " " " " " " " " " " " " " "	0.01% -% -% -% 1.96% 0.51% 0.43% 0.24% 0.10% 0.03% 0.03% 0.26% -% -% 1.48% 0.39%

Note 1: The numbering scheme is as follows.

1.0 represents the parent company.
Subsidiaries are numbered in order by company, starting with the Arabic numeral 1.
Note 2: The types of relationship with the counterparty are indicated as follows.
Parent company to subsidiary.
Subsidiary to parent company.
Subsidiary to Subsidiary

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

(2) Information related to the transfer of investment business.

Information on the Consolidated Company's investees from January 1, 2021 to March 31, 2021 is as follows (excluding Mainland China investees)

Unit: NT$ thousands

Name of the company investing	Name of investee company	Location	Main business	Initial investment amount (Note 1)	Initial investment amount (Note 1)	Shares held at the end of the fiscal period	Shares held at the end of the fiscal period	Shares held at the end of the fiscal period	Gain/loss of investee company in the fiscal period	Gain/loss in the investment recognized in the fiscal period	Remark
				End of this period	End of the previous year	Shares	Percentage	Book Value
The Company " " " " " " " " Lotes Investment Ltd. Good Hope Investments Limited	Lotes Investment Ltd. Good Hope Investments Limited Guansi Development Co., Ltd. Zhaxi Investment Co., Ltd. Jiayu Investment Co., Ltd. Lotes USA, Inc. LOTES EU GmbH Lerain Technology Co., Ltd. Mikronpoint Co., Ltd. Loteson International Investments Limited Xincheng Development Co., Ltd.	Samoa " " Anguilla Taiwan USA Germany Taiwan " Hong Kong Samoa	Holding and investment businesses " " " General investment Market development Market development Design, testing and sale of chips Manufacturing and trading of mechanical equipment, electronic parts and components Holding and investment businesses Telecommunicati on services and sales of connectors for consumer electronics industry	743,337 11,451 571,169 14,268 690,000 71,338 3,348 9,385 5,000 743,337 2,854	741,904 11,428 570,068 14,240 690,000 71,200 3,502 9,385 5,000 741,904 2,848	26,050,000 401,281 20,016,426 500,000 69,000,000 2,500,000 100,000 938,525 500,000 26,050,000 100,000	100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 18.86% 100.00% 100.00% 100.00%	5,479,982 1,566,697 2,337,228 128,076 1,083,651 76,476 3,033 489 4,930 5,686,848 1,619	349,727 31,559 110,604 7,549 40,687 510 (866) (27,434) (6) 349,727 (4)	308,809 31,559 110,546 7,549 40,170 510 (866) (5,173) (6) 349,727 (4)	Note 2 Note 2

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

Good Hope Investments Limited Guansi Development Co., Ltd. Zhaxi Investment Co., Ltd. Jiayu Investment Co., Ltd. " " " Lintes Technology Co., Ltd. " " " Jilong Co., Ltd.	REKA Technology Co., Ltd. Jae You Co., Ltd. Wangden Investments Limited Ememe Robot Co., Ltd. Compertum Microsystems Inc. Good News Medical Co., Ltd. Lintes Technology Co., Ltd. Chia-Chun Investment Co., Ltd. Genie Precision Machining Co., Ltd. Compertum Microsystems Inc. Jilong Co., Ltd. Rihui Co., Ltd.	Hong Kong " " Taiwan " " " " " " Samoa "	Telecommunicati on services and sales of connectors for consumer electronics industry Holding and investment businesses Holding and investment businesses Electric appliance and audiovisual electric products manufacturing Electronic parts and components manufacturing Manufacturing and trading of mechanical equipment, electronic parts and components, optical instruments Electronics components, other electrical engineering and electronic machinery equipment manufacturing General investment Manufacturing and trading of optical molds Electronic parts and components manufacturing Holding and investment businesses Holding and investment businesses	2,890 571,178 14,268 69,600 43,880 250 486,926 15,000 164,833 14,620 141,248 141,248	2,884 570,077 14,240 69,600 43,880 250 486,926 15,000 164,833 14,620 140,976 140,976	101,281 20,016,756 500,000 6,960,000 2,632,800 25,000 29,712,788 1,500,000 14,671,000 877,200 4,950,000 4,950,000	100.00% 100.00% 100.00% 94.37% 35.34% 5.00% 52.13% 100.00% 60.00% 11.77% 100.00% 100.00%	682,723 2,357,051 128,076 (7,804) 29,281 121 892,399 15,001 198,149 9,756 258,505 258,505	31,563 110,604 7,549 (29) (5,294) (1,404) 50,717 - 8,463 (5,294) 8,674 8,674	31,563 110,604 7,549 (28) (1,871) (70) 26,310 - 4,745 (623) (105) (105)	Note 2 Note 2 Note 2

Note 1: The original investment amount was translated into New Taiwan dollars using the exchange rate as of the balance sheet date.

Note 2: The investment income or loss recognized in the current period includes adjustments for unrealized gains or losses from intercompany transactions.

(3) Mainland Investment Information.
Name of the investee company in China, main business items and other related information.

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Unit: NT$ thousands
Amount of investment
remitted or recovered
during the period
Name of investee Mainland China company in Main business Paid-in capital (Note 3) investment (Note Method of 1) amount remitted the beginning of the fiscal period from Taiwan at Accumulated investment (Note 3) Remitted Recovered amount remitted from Taiwan at period (Note 3)the end of the Cumulative investment company in the fiscal period Gain/loss of investee Shareholding Ratio profit or loss period (Note Investment recognized during the 2) remitted as of the end of the Investment income period at the end of investments Book value the period of
Lotes Guangzhou Co., Ltd. Manufacturing connectors for telecommunication industry and for consumer electronics industry 761,885 ( 2 ) 727,643 - - 727,643 349,727 100.00% 308,804 5,479,935 -
Lotes Suzhou Co., Ltd. Manufacturing connectors for telecommunication industry and for consumer electronics industry 570,392 ( 2 ) 570,392 - - 570,392 110,604 100.00% 110,546 2,337,174 -
Zongka Technology (Shenzhen) Co., Ltd. R&D of electronics, import and export of raw materials of plastic products and plastic products 14,268 ( 2 ) 14,268 - - 14,268 7,549 100.00% 7,549 128,076 -
Lotes Hengnan Co., Ltd. Manufacturing connectors for telecommunication industry and for consumer electronics industry 636,162 ( 3 ) - - - - 10,997 100.00% 16,673 886,401 -
Lintes Technology Development and production of 141,248 ( 2 ) 141,248 - - 141,248 10,000 52.13% 636 154,925 -
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LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

(Suzhou) Co., Ltd. Shenzhen Deyi Automation Technology Co., Ltd. Lotes Zhongshan Co., Ltd. Zhongshan Dezhi Metal Surface Treatment Co. Hengnan Deyi Property Development Co. Guangzhou Leside Technology Co., Ltd. Chongqing Fuxinrui Electronic Technology Co.	the measurement instruments for optical communication, optical transceivers of 10GB/s or above and relevant technical support Manufacturing of robotic arms, automation equipment and relevant components Manufacturing connectors for telecommunication industry and for consumer electronics industry, and manufacturing of robotic arms, automation equipment and relevant components Surface treatment of metal products and plastic products Development of real estate, lease of premises, landscape design and interior decorating Research, testing and development R&D and sales of electronic components, automobile components and accessories, computers and accessories, development of molds and the import and export of goods and technologies	108,560 1,432,992 130,272 99,875 16,067 4,342	(3) (3) (3) (3) (3) (3)	- - - - - -	- - - - - -	- - - - - -	- - - - - -	3,276 53,433 (5,453) (78) 6,184 (547)	100.00% 100.00% 100.00% 100.00% 100.00% 51.00%	3,276 53,433 (5,453) (435) 6,184 (279)	113,742 1,534,398 109,537 98,286 19,242 634	- - - - - -

Note 1: Investment methods are divided into the following six categories.

(1) Investment in mainland companies through third-party remittances.
(2) Re-invest in mainland companies through third-party investment.
(3) Reinvest in mainland companies through re-investment in existing companies in third regions.
(d) Direct investment in mainland companies.
(E) other ways.
(vi) Not applicable.

Note 2: The investment gain or loss recognized in the current period is adjusted for the unrealized gain or loss on intercompany transactions.

Note 3: The amount of paid-in capital and remittance of accumulated investments were translated into New Taiwan dollars using the exchange rate at the balance sheet date.

2. Investment in Mainland China.

. Investment in	Mainland China.
Name	Accumulated amount remitted from Taiwan at the end of the fiscal period for investment in Mainland China (Note 1)	Investment amount approved by Investment Commission, MoEA (Note 1)	Investment ceiling in Mainland China according to the regulations made by Investment Commission, MoEA
Lotes Co.,Ltd.	1,312,303,000	1,455,941,000	8,576,705,000
Lintes Technology Co., Ltd.	141,248,000	141,248,000	1,027,325,000

Note 1: Translated into New Taiwan dollars using the exchange rate at the balance sheet date.

3. Significant transactions with the investee companies in China:

Please refer to the “Significant Transactions” and “Business relationship and significant transactions between the Company and its subsidiaries” for details of the direct or indirect significant transactions between the Company and its investee companies from January 1 to Mar. 31, 2021 in Mainland China.

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

(4) Major shareholder information.

r shareholder information.
Share Name of Major Shareholder	Number of Shares Held	Shareholding Ratio
Chin-Ling Investment Co., Ltd.	10,956,237	10.58%
Chia-Ming Investment Co., Ltd.	9,797,037	9.46%

Note: (1) This table summarizes the principal shareholders’ information for the Company, based on the last business day of each calendar quarter, for the common and preferred shares of the Company for which the stockholders hold at least 5% of the Company’s outstanding common shares and treasury shares. The difference between the number of shares recorded in the financial statements and the number of shares for which the Company has completed the dematerialized shares may be due to differences in the basis of calculation.

(2) If the above information is related to a shareholder’s share held in a trust, it is disclosed in the client’s separate account of the trustee’s trust account. For shareholders who apply for declaration of internal shareholdings of more than 10% according to the Securities and Exchange Act, their shareholdings include their own shares plus shares held by them in the trust and have the right to decide on the use of trust property; please refer to Market Observation Post System for more information on the declaration of internal shareholdings.

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

XIV. Segmental Information

(I) General Information

The company’s main business is the trading of various hardware and tool parts, the manufacturing, processing and trading of various terminals and their finished connectors, the import and export trade of the preceding items, and the agency of the preceding items related to domestic and foreign manufacturers’ products in the tender quotation and distribution business.

(ii) Information on reportable segment profit or loss, assets, liabilities and their measurement basis and reconciliation

The Consolidated Company’s major decisions are based on the performance appraisal and resource allocation by the production regions. After analysis, the two regions meet the conditions of consolidation into a single operating segment, therefore the Consolidated Company as a whole is a single operating segment, and the information of segment profit or loss, segment assets and segment liabilities are consistent with the financial statements.

(iii) Product and Labor Provision Information

The Consolidated Company’s revenue information from external customers is as follows:

Product and Labor Provision	2021Q1 $1,328,370 1,178,727 746,304 667,052 476,838 75,002 271,274	2020Q1 907,517 941,125 498,143 350,408 391,470 28,407 19,770
DT Server NB Strategic Projects LINTES(High Speed Cable) Automotive Other Total
	$4,743,567	3,136,840

(iv) Geographical Information

The following information about the Consolidated Company by region is based on the geographical location of the customer.

Area External client revenue: Taiwan Mainland China Other countries Total	2021Q1
	$4,743,567 3,136,840

AI assistant

LOTES — Interim / Quarterly Report 2021

52339_rns_2021-11-15_6babb8df-35ca-4937-858e-00f1db43cfa2.pdf

LOTES CO., LTD. and Subsidiaries

Consolidated Financial Statements and Accountants' Review Report

Notice to Readers

Company Address: No. 15, Wuxun St., Anle Dist., Keelung City 204 Tel: (02)2433 1110

Table of Contents

Accountant's Review Report

Preface

Scope

Conclusion

March 31, 2021 and 2020, reviewed only and not audited in accordance with generally accepted auditing standards (GAAS)

LOTES CO., LTD. and Its Subsidiaries

Consolidated Balance Sheet

Reviewed only and not audited in accordance with generally accepted auditing standards (GAAS) LOTES CO., LTD., and Its Subsidiaries

Consolidated Statements of Comprehensive Income

From January 1 to March 31, 2021 and 2020

Unit: NT$ thousands

Reviewed only and not audited in accordance with generally accepted auditing standards (GAAS) LOTES CO., LTD., and Its Subsidiaries

Consolidated Statement of Changes in Equity

From January 1 to March 31, 2021 and 2020

Unit: NT$ thousands

Reviewed only and not audited in accordance with generally accepted auditing standards (GAAS) LOTES CO., LTD., and Its Subsidiaries

Consolidated Statement of Cash Flows

From January 1 to March 31, 2021 and 2020

Unit: NT$ thousands

Reviewed only and not audited in accordance with generally accepted auditing standards (GAAS)

LOTES CO., LTD., and Its Subsidiaries

Consolidated Financial Statement Notes

First Quarter 2021 and 2020

(Except as otherwise indicated, the unit for all amounts in this document is NT$1,000)

I. Company History

II. Date and Procedures of Approval of Financial Statement

III. Application of New and Revised Standards and Interpretations

IV. Summary of Major Accounting Policies

LOTES CO., LTD., and its Subsidiaries’ Notes to the Consolidated Financial Statements

(Cont’d)

LOTES CO., LTD., and its Subsidiaries’ Notes to the Consolidated Financial Statements

(Cont’d)

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

2. Subsidiary not listed in the Consolidated Financial Statements: None.

V. Primary Sources of Major Accounting Judgment, Estimate and Assumption Uncertainties

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

VI. Descriptions for Important Accounting Items

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

2. financial assets measured at FVTOCI

(4) Inventory

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

1. Comprehensive financial information of Lintes Technology Co., Ltd.:

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

(7) Property, plant and equipment

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

(8) Right-of-use assets

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

(9) Investment property

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

(11) Other financial assets

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

(12) Short-term loans

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

(13) Long-term loans

1. Lease of land, premises, and buildings

2. Other Leases

(17) Operating lease

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

1. Define the benefit plan

1. Capital reserve

2. Retained earnings

(1) Legal reserve

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

(2) Special reserve

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

(21) Earnings per share

LOTES CO., LTD. and its Subsidiaries’ Notes to the Consolidated Financial Statements (Cont’d)

LOTES Interim / Quarterly Report 2021

`Notice to Readers`