LPI - Annual Report 2020 | FinancialReports.eu

Stock code: 2369

Lingsen Precision Industries, LTD. And Subsidiaries

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

Address: No. 5-1, S. 2nd Rd., Tanzi Dist., Taichung City 427058, Taiwan (R.O.C.) TEL: (04)25335120

				Financial reports
	Item		Page	No. of Note
1. Cover Page			1	-
2. Table of Contents			2	-
3. Representation letter			3	-
4. Independent Auditor's Report			4`～`7	-
5. Consolidated Balance sheet			8	-
6. Consolidated Statements of Comprehensive Income			9`～`11	-
7. Consolidated Statements of Changes in Equity			12	-
8. Consolidated of Statements of Cash Flows			13`～`14	-
9. Notes to Consolidated Financial Statements
(1)	Company History		15	(1)
(2)	Approval Date and Procedures of The Financial		15	(2)
	Statements
(3)	New Standards, Amendments	and	15`～`18	(3)
	Interpretations Adopted
(4)	Summary of Significant Accounting Policies		18`～`30	(4)
(5)	Significant Accounting Assumptions	and	30	(5)
	Judgement, and Major Sources of Estimation
	Uncertainty
(6)	Explanation of Significant Accounts		30`～`59	(6)~(26)
(7)	Related-Party Transactions		59`～`60	(27)
(8)	Pledged Assets		60	(28)
(9)	Significant Commitments and Contingencies		60	(29)
(10)	Losses Due to Major Disasters		-	-
(11)	Subsequent Events		-	-
(12)	Information on Foreign-currency-denominated		60~61	(30)
	Assets And Liabilities
(13)	Other Disclosures
	1. Information on Significant Transactions		61~62	(31)
	2. Information on Investees		62	(31)
	3. Information on Investment in Mainland		62	(31)
	China
	4. Information on Major Shareholders		62	(31)
(14)	Information on Department		62`～`64	(32)

Representation Letter

We hereby declare that we have confirmed the companies which shall be included in the consolidated financial statements of the affiliates and the ones which shall be included in the consolidated financial statements in accordance with IFRS 10 are identical; the related information has been disclosed in consolidated financial statements and will hence not be included in consolidated financial statements of the affiliates for the year ended in 2020, in accordance with "Criteria Governing Preparation of Affiliation Reports" and "Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises."

Company name: Lingsen Precision Industries, LTD.

Owner: Shu-Chyuan Yeh

March 18, 2021

---Notice to Readers---

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

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

Independent Auditors' Report

To Lingsen Precision Industries, LTD.

Opinion

We have reviewed the accompanying consolidated balance sheets of Lingsen Precision Industries, LTD. (the "Group") as at December 31, 2019 and 2020, and the related consolidated statements of comprehensive income as at 2020 and 2019, as well as the related statements of changes in equity and of cash flows for, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2020 and 2019, and its consolidated financial performance and consolidated cash flows at 2020 and 2019 in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission.

Basis for Opinion

We conducted our audits in accordance with the “Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants” and generally accepted auditing standards in the Republic of China (“ROC GAAS”). Our responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the consolidated financial statements section of our report. We are independent of the Group in accordance with the Code of Professional Ethics for Certified Public Accountants in the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significant in our audit of the consolidated financial statements of 2020. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Key audit matters of consolidated financial statements of 2020 are described below: Revenue Recognition

The group's main revenue is from service income of wafer fabrication as well as packaging and final testing of the integrated circuit (IC), which is an index of business performance for the management. The authenticity of recognition is of most significance to the financial statements, for the authenticity of revenue recognition is a key audit matter. Refer to note 4 and 21 in the consolidated financial statements to see accounting policies related to revenue recognition. Our audit procedures on the matters mentioned above mainly include:

understanding the selling model, evaluating the appropriateness of revenue recognition policy, evaluating and testing the effectiveness of the relevant internal control to the timing of revenue recognition in the sales cycle.
conducting detailed testing by sampling the sales receipts, reviewing delivery order, sales invoice and other related documents, further ascertaining whether the object is consistent, and sending a letter regarding to service income to that customer, in order to confirm the authenticity of service income.

Other Matters

We have audited and expressed an unqualified opinion with other matter section on the consolidated financial statements of Lingsen Precision Industries, LTD. as of and for the years ended December 31, 2020 and 2019.

Responsibilities of the management and those charged with governance for the consolidated financial statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers" and "International Financial Reporting Standards," "International Accounting Standards," "International Financial Reporting Interpretations Committee," and "International Accounting Standards" accepted and effectively published by Financial Supervisory Commission, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

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

Those charged with governance in the Group, including the audit committee, are responsible for overseeing the financial reporting process.

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ROC GASS will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, consolidatedly or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements. As part of an audit in accordance with ROC GASS, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the individual financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our

report. However, future events or conditions may cause the Group to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the instruction, supervision and performance of the audit, and the presentation of the Group's audit opinion.

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

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

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

Deloitte & Touche

Auditor Shu-Chin, Chiang

Auditor Ting-Chien, Su

Auditing and Attestation No FSC No. 1000028068

Auditing and Attestation No FSC No. 1070323246

March 18, 2021

Lingsen Precision Industries, LTD. and its subsidiaries Consolidated Balanced Sheet For the years ended December 31, 2020 and 2019

Amounts expressed in thousands of New Taiwan Dollars

December31,2020 Amount % $ 1,373,024 18 126,485 2 9,386 - 1,311,023 17 304,193 4 3,081 - 336,114 4 224,834 3 3,688,140 48 38,981 1 - - 3,491,550 46 164,801 2 91,305 1 935 - 169,548 2 3,957,120 52 $ 7,645,260 100 $ 248,679 3 332,380 4 582,873 8 807 - 19,450 - 5,494 - 486,287 7 48,716 1 1,724,686 23 577,589 7 1,156 - 152,251 2 54,241 1 1,822 - 787,059 10 2,511,745 33 3,801,023 50 1,384,604 18 - - 192,020 2 ( 166,267 ) ( 2 ) ( 64,644 ) ( 1 ) ( 199,828 ) ( 2 ) 4,946,908 65 186,607 2 5,133,515 67 $ 7,645,260 100	December31,2019	December31,2019
Amount $ 1,373,024 126,485 9,386 1,311,023 304,193 3,081 336,114 224,834 3,688,140 38,981 - 3,491,550 164,801 91,305 935 169,548 3,957,120 $ 7,645,260 $ 248,679 332,380 582,873 807 19,450 5,494 486,287 48,716 1,724,686 577,589 1,156 152,251 54,241 1,822 787,059 2,511,745 3,801,023 1,384,604 - 192,020 ( 166,267 ) ( 64,644 ) ( 199,828 ) 4,946,908 186,607 5,133,515 $ 7,645,260	Amount $ 1,704,790 90,702 6,968 1,083,869 371,287 18,622 345,377 184,580 3,806,195 31,527 - 4,074,626 180,433 107,228 924 47,601 4,442,339 $ 8,248,534 $ 427,989 281,000 556,570 43 12,378 5,510 399,043 105,234 1,787,767 903,267 893 167,111 77,356 913 1,149,540 2,937,307 3,801,023 1,451,696 359,085 226,856 ( 461,077 ) ( 74,458 ) ( 176,415 ) 5,126,710 184,517 5,311,227 $ 8,248,534	%

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

Lingsen Precision Industries, LTD. and its subsidiaries Consolidated Statements of Comprehensive Income For the years ended December 31, 2020 and 2019

	Lingsen Precision Industries, LTD. and its subsidiaries Consolidated Statements of Comprehensive Income For the years ended December 31, 2020 and 2019	Lingsen Precision Industries, LTD. and its subsidiaries Consolidated Statements of Comprehensive Income For the years ended December 31, 2020 and 2019	Lingsen Precision Industries, LTD. and its subsidiaries Consolidated Statements of Comprehensive Income For the years ended December 31, 2020 and 2019	Lingsen Precision Industries, LTD. and its subsidiaries Consolidated Statements of Comprehensive Income For the years ended December 31, 2020 and 2019	Lingsen Precision Industries, LTD. and its subsidiaries Consolidated Statements of Comprehensive Income For the years ended December 31, 2020 and 2019	Lingsen Precision Industries, LTD. and its subsidiaries Consolidated Statements of Comprehensive Income For the years ended December 31, 2020 and 2019	Lingsen Precision Industries, LTD. and its subsidiaries Consolidated Statements of Comprehensive Income For the years ended December 31, 2020 and 2019	Lingsen Precision Industries, LTD. and its subsidiaries Consolidated Statements of Comprehensive Income For the years ended December 31, 2020 and 2019	Lingsen Precision Industries, LTD. and its subsidiaries Consolidated Statements of Comprehensive Income For the years ended December 31, 2020 and 2019	Lingsen Precision Industries, LTD. and its subsidiaries Consolidated Statements of Comprehensive Income For the years ended December 31, 2020 and 2019	Lingsen Precision Industries, LTD. and its subsidiaries Consolidated Statements of Comprehensive Income For the years ended December 31, 2020 and 2019
	Amounts expressed in thousands of New Taiwan Dollars, only
								except for loss per		share
			2020					2019
Code			Amount		%			Amount		%
4000	Operating revenue (Note 4
	and 21)		$ 5,457,586		100			$ 4,719,390		100
5000	Operating costs (Note 10 and
	22)		5,158,502		95			4,783,009		101
5900	Gross profit (Loss)		299,084		5		(	63,619	) (	1	)
	Operating expenses (Note 22)
6100	Selling expenses		54,894		1			56,408		1
6200	Administrative expenses		240,974		4			262,313		6
6300	Research and
	development expenses		166,697		3			184,672		4
6450	Expected credit losses
	(including reversals of
	impairment losses or
	impairment gains)
	(Note 4 and 8)
			49		-			12,556		-
6000	Total operating
	expenses		462,614		8			515,949		11
6900	Net operating income (loss)	(	163,530	) (	3	)	(	579,568	) (	12	)
	Non-operating income and
	expenses
7100	Interest revenue		6,821		-			10,178		-
7110	Rent Income (Note 4 and
	14)		18,906		-			7,254		-
7130	Dividend income		1,165		-			4,731		-
7190	Other income		52,855		1			31,089		1
7510	Interest expense (note 4)	(	18,563	)	-		(	19,578	) (	1	)
7590	Miscellaneous expenses	(	459	)	-		(	1,808	)	-
7610	Interest of disposal of
	property, plant, and
	equipment (Note 4)		484		-		(	47	)	-
7670	Impairment loss	(	47,456	) (	1	)		-		-
7630	Exchange gains or losses
	(note 4)		3,361		-		(	1,167	)	-
7000	Total non-operating
	income and
	expenses		17,114		-			30,652		-
(Continued)

(Continued)

(Continued)
Code 7900 Loss from continuing operations before income tax 7950 Total tax expense (Note 4 and 23) 8200 Net loss Other comprehensive income and loss (Note 4) 8310 Items that will not be reclassified to profit or loss 8311 Remeasurements of the defined benefit plan (Note 19) 8316 Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss (Note 23) 8360 Components of other comprehensive income that will be reclassified to profit or loss 8361 Exchange differences on translation 8300 Other comprehensive income, net 8500 Total comprehensive income Net income (loss) is attributed to: 8610 Owners of the Company 8620 Non-controlling interests 8600 The total comprehensive income is attributed to: 8710 Owners of the Company 8720 Non-controlling interests 8700 (Continued)	2020	% ( 3 ) - ( 3 ) - - - - - - ( 3 ) ( 3 ) - ( 3 ) ( 3 ) - ( 3 )	2019
	Amount ( $ 146,416 ) ( 16,724 ) ( 163,140 ) 1,828 7,454 ( 366 ) 8,916 ( 139 ) 8,777 ($ 154,363 ) ( $ 164,343 ) 1,203 ($ 163,140 ) ( $ 155,566 ) 1,203 ($ 154,363 )		Amount ( $ 548,916 ) ( 3,215 ) ( 552,131 ) 12,139 ( 3,373 ) ( 2,428 ) 6,338 ( 7,906 ) ( 1,568 ) ($ 553,699 ) ( $ 552,011 ) ( 120 ) ($ 552,131 ) ( $ 553,579 ) ( 120 ) ($ 553,699 )	%
				( 12 ) - ( 12 ) - - - - - - ( 12 ) ( 12 ) - ( 12 ) ( 12 ) - ( 12 )
	(

(Continued)

C o d e Loss per share (Note 24) 9750 Basic earnings per share 9850 Diluted earnings per share	2020	%	2019
	A m o u n t ($ 0.44 ) ($ 0.44 )		A m o u n t ($ 1.47 ) ($ 1.47 )	%
	( (		( (

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

Lingsen Precision Industries, LTD. and its subsidiaries Consolidated Statements of Changes in Equity For the years ended December 31, 2020 and 2019

Amounts expressed in thousands of New Taiwan Dollars

Attributed to the owners of the Company

Capital surplus (Note 20) $ 1,526,473 - 92 ( 76,000 ) 1,131 - - - - 1,451,696 - - - 64 ( 67,156 ) - - - - - - $ 1,384,604		Retained earnings(Note 20) Unappropriated earnings (Unappropriated retained earnings) Legal reserve Appropriated retained earnings (Note 4 and 7) $ 359,085 $ 127,687 $ 218,641 - 99,169 ( 99,169 ) - - - - - - - - - - - ( 552,011 ) - - 9,711 - - ( 542,300 ) - - ( 38,249 ) 359,085 226,856 ( 461,077 ) 359,085 ) - 359,085 - ( 34,836 ) 34,836 - - - - - - - - 67,156 - - ( 164,343 ) - - 1,462 - - ( 162,881 ) - - - - - ( 887 ) - - ( 2,499 ) $ - $ 192,020 ($ 166,267 )	Retained earnings(Note 20) Unappropriated earnings (Unappropriated retained earnings) Legal reserve Appropriated retained earnings (Note 4 and 7) $ 359,085 $ 127,687 $ 218,641 - 99,169 ( 99,169 ) - - - - - - - - - - - ( 552,011 ) - - 9,711 - - ( 542,300 ) - - ( 38,249 ) 359,085 226,856 ( 461,077 ) 359,085 ) - 359,085 - ( 34,836 ) 34,836 - - - - - - - - 67,156 - - ( 164,343 ) - - 1,462 - - ( 162,881 ) - - - - - ( 887 ) - - ( 2,499 ) $ - $ 192,020 ($ 166,267 )	Retained earnings(Note 20) Unappropriated earnings (Unappropriated retained earnings) Legal reserve Appropriated retained earnings (Note 4 and 7) $ 359,085 $ 127,687 $ 218,641 - 99,169 ( 99,169 ) - - - - - - - - - - - ( 552,011 ) - - 9,711 - - ( 542,300 ) - - ( 38,249 ) 359,085 226,856 ( 461,077 ) 359,085 ) - 359,085 - ( 34,836 ) 34,836 - - - - - - - - 67,156 - - ( 164,343 ) - - 1,462 - - ( 162,881 ) - - - - - ( 887 ) - - ( 2,499 ) $ - $ 192,020 ($ 166,267 )	Other equity (Note 4) Transaction difference on translation of financial statements of foreign operation Unrealized gains or losses of financial assets through other comprehensive income At fair value ($ 14,127 ) ($ 87,301 ) - - - - - - - - - - ( 7,906 ) ( 3,373 ) ( 7,906 ) ( 3,373 ) - 38,249 ( 22,033 ) ( 52,425 ) - - - - - - - - - - - - ( 139 ) 7,454 ( 139 ) 7,454 - - - - - 2,499 ($ 22,172 ) ($ 42,472 )	Other equity (Note 4) Transaction difference on translation of financial statements of foreign operation Unrealized gains or losses of financial assets through other comprehensive income At fair value ($ 14,127 ) ($ 87,301 ) - - - - - - - - - - ( 7,906 ) ( 3,373 ) ( 7,906 ) ( 3,373 ) - 38,249 ( 22,033 ) ( 52,425 ) - - - - - - - - - - - - ( 139 ) 7,454 ( 139 ) 7,454 - - - - - 2,499 ($ 22,172 ) ($ 42,472 )	Treasury stocks (Note 20) ($ 176,415 ) - - - - - - - - ( 176,415 ) - - - - - - - - ( 23,413 ) - - ($ 199,828 )		Non-controlling interests (Note 20) $ 184,637 - - - - ( 120 ) - ( 120 ) - 184,517 - - - - - 1,203 - 1,203 - 887 - $ 186,607		Total equity
					Transaction difference on translation of financial statements of foreign operation ($ 14,127 ) - - - - - ( 7,906 ) ( 7,906 ) - ( 22,033 ) - - - - - - ( 139 ) ( 139 ) - - - ($ 22,172 )
		Legal reserve $ 359,085 - - - - - - - - 359,085 359,085 ) - - - - - - - - - - $ -	Appropriated retained earnings $ 127,687 99,169 - - - - - - - 226,856 - ( 34,836 ) - - - - - - - - - $ 192,020
					( ( ( ( ( ( (	( ( (	( ( ( (				$ 5,939,703 - 92 76,000 ) 1,131 552,131 ) 1,568 ) 553,699 ) - 5,311,227 - - - 64 - 163,140 ) 8,777 154,363 ) 23,413 ) - - $ 5,133,515
				( (					( (

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

Lingsen Precision Industries, LTD. and its subsidiaries

Consolidated of Statements of Cash Flows

For the years ended December 31, 2020 and 2019

Amounts expressed in thousands of New Taiwan Dollars

C o d e Cash flows from operating activities A10000 Net loss before tax Adjustment items A20100 Depreciation expenses A20300 Expected credit losses A20900 Interest expenses A21200 Interest revenue A21300 Dividend Income A22500 Disposal of loss of property, plant, and equipment A23700 Inventory falling price loss A23700 Loss of property, plant, and equipment A24100 Net unrealized foreign exchange loss A29900 Amortization of prepayments A32200 Provision A30000 Net changes in operating assets and liabilities A31125 Contract Assets A31130 Notes receivable A31150 Accounts receivable A31180 Other receivables A31200 Inventories A31240 Other current assets A32150 Accounts payable A32180 Other payables A32230 Other current liabilities A32240 Net defined benefit liabilities A33000 Cash generated from operations A33100 Interest received A33300 Interest paid A33500 Income tax paid AAAA Net cash provided by (used in) operating activities	2020 ( $ 146,416 ) 824,680 49 18,563 ( 6,821 ) ( 1,165 ) ( 484 ) 44,673 47,456 ( 7,850 ) 4,941 7,072 ( 35,593 ) ( 2,377 ) ( 229,426 ) 64,099 ( 35,065 ) ( 40,177 ) 53,064 55,985 ( 56,518 ) ( 21,287 ) 537,403 7,388 ( 17,919 ) 15,394 542,266	2019
		( $ 548,916 ) 902,324 12,556 19,578 ( 10,178 ) ( 4,731 ) 47 1,799 - 1,508 4,401 292 ( 2,992 ) 3,928 ( 11,182 ) 139,762 ( 40 ) 11,534 79,137 2,525 79,555 ( 46,163 ) 634,744 10,305 ( 18,515 ) ( 15,310 ) 611,224

(Continued)

C o d e Cash flows from investing activities B00020 Disposal of financial assets at fair value through other comprehensive income B02700 Acquisition of property, plant, and equipment B02800 Disposal of property, plant, and equipment B03700 Increases in refundable deposits B03800 Decreases in refundable deposits B06700 Increases in other non-current assets B07100 Increase in prepayments for business facilities B07600 Dividends received BBBB Net cash provided by (used in) investing activities Cash flow from financing activities C00100 Increases in short-term loans C00200 Decreases in short-term loans C01600 Long-term borrowings C01700 Repayments of long-term debt C03000 Increases in guarantee deposits received C03100 Decreases in guarantee deposits received C04020 Payments of lease liabilities C04500 Cash dividends paid C04900 Treasury stocks acquired C09900 Unclaimed dividend CCCC Net cash provided by (used in) financing activities DDDD Effect of Exchange Rate Changes on Cash and Cash Equivalents EEEE Net increase (decrease) in cash and cash equivalents E00100 Cash and cash equivalents at beginning of period E00200 Cash and cash equivalents at end of period	2020 $ - ( 307,696 ) 5,901 ( 7 ) - ( 9,835 ) ( 123,707 ) 1,165 ( 434,179 ) 1,561,937 ( 1,734,745 ) 169,500 ( 407,934 ) 909 - ( 6,831 ) - ( 23,413 ) 64 ( 440,513 ) 660 ( 331,766 ) 1,704,790 $1,373,024	2019
		$ 11,751 ( 462,324 ) 10 - 1,047 ( 4,347 ) ( 17,840 ) 4,731 ( 466,972 ) 1,115,005 ( 831,244 ) 548,000 ( 405,882 ) - ( 11 ) ( 8,156 ) ( 74,869 ) - 92 342,935 ( 1,841 ) 485,346 1,219,444 $1,704,790

		(

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

Lingsen Precision Industries, LTD. and its subsidiaries

Notes to Consolidated Financial Statements

For the years ended December 31, 2020 and 2019

(Amounts Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

(1) Company History

Lingsen Precision Industries, LTD. (the Company) was established in Taichung Export Processing Zone in April 1973 and began its operation in July 1973. The main business is IC packing and testing as well as optoelectronic devices.

In April 1998, the company's shares were listed on the Taiwan Stock Exchange (TWSE). The consolidated financial statements were expressed in New Taiwan dollars, which is the Company's functional currency.

(2) Approval Date and Procedures of the Consolidated Financial Statements

These consolidated financial statements were approved by the Board of Directors on March 18, 2021.

(3) Application of New Standards, Amendments and Interpretations

a. Initial application of the amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) (collectively, “IFRSs”) endorsed and issued into effect by the Financial Supervisory Commission (FSC)
Application of aforementioned amendments will not have a significant effect on the Company and controlled entities (the Group)'s accounting policies.
b. IFRSs endorsed by FSC applicable in 2021

Effective date issued by New standards, amendments, and interpretations I A S B Amendments to IFRS 4, 'Extension of the Temporary effect on the date of Exemption from Applying IFRS 9' issuance Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and Effective for annual IFRS 16 'Interest rate benchmark reform - Phase periods beginning on or II' after January 1, 2021 Amendments to IFRS 16'COVID-19-Related Rent Effective for annual Concessions' periods beginning on or after June 1, 2020

15 -
c. The IFRSs issued by IASB but not yet endorsed and issued into effect by FSC

New standards,amendments,and interpretations 'Annual Improvements 2018-2020' Amendments to IFRS 3 'Reference to the Conceptual Framework' Amendments to IFRS 10 and IAS 28 'dealing with the sale or contribution of assets between an investor and its joint venture or associate' IFRS 17, ‘Insurance contracts’ Amendments to IFRS 17 Amendments to IAS 1 'Classification of Liabilities as Current or Non-current' Amendments to IAS 1 'Disclosure of Accounting Policies' Amendments to IAS 8 'Definition of Accounting Estimates' Amendments to IAS 16 'Property, Plant and Equipment: Proceeds before Intended Use' Amendments to IAS 37 'Onerous Contracts—Cost of Fulfilling a Contract'	Effective date issued by I A S B ( N o t e 1 )
	January 1, 2022 (Note 2) January 1, 2022 (Note 3) Not yet determined January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 (Note 6) January 1, 2023 (Note 7) January 1, 2022 (Note 4) January 1, 2022 (Note 5)

New standards,amendments,and interpretations
'Annual Improvements 2018-2020'
Amendments to IFRS 3 'Reference to the Conceptual
Framework'
Amendments to IFRS 10 and IAS 28 'dealing with
the sale or contribution of assets between an
investor and its joint venture or associate'
IFRS 17, ‘Insurance contracts’
Amendments to IFRS 17
Amendments to IAS 1 'Classification of Liabilities as
Current or Non-current'
Amendments to IAS 1 'Disclosure of Accounting
Policies'
Amendments to IAS 8 'Definition of Accounting
Estimates'
Amendments to IAS 16 'Property, Plant and
Equipment: Proceeds before Intended Use'
Amendments to IAS 37 'Onerous Contracts—Cost of
Fulfilling a Contract'

Effective date issued by
I A S B ( N o t e 1 )

January 1, 2022 (Note 2)
January 1, 2022 (Note 3)
Not yet determined
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023 (Note 6)
January 1, 2023 (Note 7)
January 1, 2022 (Note 4)
January 1, 2022 (Note 5)

Note 1: Unless stated otherwise, the above New IFRSs are effective for annual periods beginning on or after their respective effective dates.
Note 2: Amendments to IFRS 9 are applicable to the exchange of financial liabilities or revision of agreements during the periods beginning on or after January 1, 2022. Amendments to IAS 41, 'Agriculture' are applicable to the fair value at the periods beginning on or after January 1, 2022. Amendments to IFRS 1 'First-time Adoption of International Financial Reporting Standards' are applicable at the periods beginning on or after January 1, 2022.
Note 3: Amendments are applicable to the merge and acquisition at the periods beginning on or after January 1, 2022.
Note 4: Amendments are applicable to plant, property and equipment in and under necessary places and conditions which meet the operation way expected from the management at the periods beginning on or after January 1, 2021.
Note 5: The Amendments are applicable to all contracts which have not fulfilled obligations on January 1, 2022.
Note 6: The amendments are applicable for annual periods beginning on or after January 1, 2023.
Note 7: The amendments are applicable to the changes on accounting estimates and accounting policies for annual periods beginning on or after January 1, 2023.
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1) Amendments to IAS 1 'Disclosure of Accounting Policies'

The amendments state that the Group shall follow the definition of significance and the information on significant accounting policies to be disclosed. The information on accounting policies is of big significance If it is expected that the information is able to affect policies made on the basis of such financial statements by the major user of general financial statements. The amendments declare that:

It is unnecessary that the Group discloses the information on insignificant transactions, other events or conditions which is of no significance to accounting policies.
The Entities may judge that the related information is significant due to the nature of transactions, other events or conditions, even if the amount is not material.
Not all accounting policies regarding to material transactions, other events or conditions are themselves material to the financial statements.

Additionally, those amendments explain that if the information relates to significant transactions, other events or conditions and meets the following matters, it may be of big significance:

(1) is changed during the period and affect the significance of financial statements,
(2) is chosen from alternatives permitted by IFRS Standards,
(3) is developed in accordance with IAS 8, 'Accounting Policies, Changes in Accounting Estimates and Errors' in the absence of an IFRS Standard that specifically applies,
(4) requires to be determined by preliminary judgement or assumptions, or (5) relates to complex accounting, and users of the financial statements would otherwise not understand the relating transactions, other events or conditions.
2) Amendments to IAS 8 'Definition of Accounting Estimates'
- The amendments state that accounting estimates are amount affected by

measurement uncertainty in financial statements. The Entities may have to measure the figures in financial statements using the amount which cannot be observed directly and need to be estimated when it applies the accounting policies. Hence, valuation techniques and the inputs are used in the estimates for this purpose. Changes on valuation techniques and the inputs are changes on accounting estimates if they are not corrections of prior period errors.

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Addition to the aforementioned influences, up to the reporting date, the Group will continue evaluating other influences on financial status and performance resulting from amendments to rules or explanations. The related influences are to be disclosed once the evaluation is accomplished.

(4) Summary of Significant Accounting Policies
a. Compliance statement
The preparation of the consolidated financial statements is based on the “Regulations Governing the Preparation of Financial Reports by Securities Issuers" and IFRSs accepted and effectively published by Financial Supervisory Commission.
b. Basis of preparation

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

The fair value measurement is categorized into different levels hierarchy based on the observability and significance of inputs:

1) Level 1 inputs: quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date.
2) Level 2 inputs: inputs other than quoted market prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
3) Level 3 inputs: unobservable inputs for the asset or liability
c. Criteria for classifying assets and liabilities into current and non-current
Current assets include:
the asset primarily for the purpose of trading,
the asset expected to be realized within twelve months after the date of statement of financial position, and
cash and cash equivalent, unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the date of statement of financial position.

Current liabilities include:

the liability primarily for the purpose of trading,
liabilities expected to be settled within twelve months after the maturity of the debt, even if the liability at the date of statement of financial position to complete the long-term refinancing prior to the financial statements or reschedule payment agreement, and
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liabilities not having an unconditional right to defer settlement for at least twelve months after the date of statement of financial position.

d.

If none of the above criteria is met, the liability or asset is classified as non-current. Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and the entities controlled by the Company (subsidiaries). Adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the Company. All intragroup transactions, balances, income and expenses are eliminated in full on consolidation. Subsidiaries' total amount of comprehensive income are attributed to the Company's owner interests and non-controlling interests, even the non-controlling interests are made as loss in balance.

Changes in the Company’s ownership interests in subsidiaries that do not result in the Company losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Company’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value paid or received is recognized directly in equity and attributed to shareholders of the Company.

See Note 11 and Table 4 and 5 for details of subsidiaries, percentage of ownership and business.

e.

Foreign currency

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

Foreign currency monetary amount is translated at the closing rate at each date of the balance sheet. Exchange differences arising from settlement or translation are recognized as profit or loss at the period.

Non-monetary foreign currencies held at fair value at the exchange rates prevailing at the date of transaction; however, non-monetary foreign currencies held at fair value through other comprehensive income are recognized in other comprehensive income.

Non-monetary items carried at historical cost is reported using the exchange rate at the date of the transaction and will not calculated again.

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In preparing the consolidated financial statements, assets and liabilities from foreign operations, including subsidiaries whose location or currency are different from the Company, are translated into the presentation currency, the New Taiwan dollar, at the exchange rates prevailing at the end of the reporting period. Income and expense items are translated at the average exchange rates at the period. The resulting currency translation differences are recognized in other comprehensive income and attributed to the owner and non-controlling interests, respectively.

If the Group disposes all equity in foreign operations, parts of equity in foreign operations' subsidiaries but loses its control, or retained equity in foreign operations' associates are financial assets and treated under accounting policies relating to financial instruments, all accumulated exchange differences attributed to the Company' owner and associated with foreign operations are reclassified to profit or loss.

If a partial disposal of foreign operations' subsidiaries do not result in a loss of control, accumulated exchange differences are reclassified to the subsidiary's controlling interests and not recognized as profit or loss. Under any disposal of foreign operations, accumulated exchange differences are reclassified to profit or loss in disposal proportion.

f.

Inventories

Inventories include raw materials, work in process, finished good Inventory and products. Inventories are stated at the lower of cost or net realizable value. The lower of cost and net realizable value is based on the individual inventory items. Net realized value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and the estimated costs necessary to make the sale. The inventory cost is measured by using First In, First Out.

g.

Investments in associates

The associates are entities which are material to the Group, but not subsidiaries or joint venture companies.

Investments in the associates are accounted for using the equity method.

Under the equity method, an investment is initially recognized in the statements of financial positional cost and adjusted thereafter to recognize the Group's share of profit or loss and other comprehensive income of the associates as well as the distribution received. The Company also recognizes its share in the changes in equities of associates.

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The Entities discontinue recognizing its share of further losses if its share of losses of the associate equals or exceeds its interest in the associate. The Entities recognizes the additional losses and liabilities which occur in the scope of legal obligation, constructive obligation or payment on behalf of the associates only.

The entire carrying amount of the investment is tested for impairment as a single asset by comparing its recoverable amount with its carrying amount. Any impairment loss does not amortized to any assets as part of the carrying amount of the investment. Any reversal of that impairment loss is recognized to the extent that the recoverable amount of the investment subsequently increases.

h.

Property, plant, and equipment

The property, plant and equipment are recognized at costs and subsequently measured at costs of the amount less accumulated depreciation and accumulated impairment losses.

Property, plant and equipment in the course of construction for production are recognized as the cost, which includes professional service fees and borrowing costs eligible for capitalization. When completed and ready for intended use, such assets are classified to the appropriate categories of property, plant and equipment, and depreciation of these assets commences.

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

When the derecognition of property, plant and equipment commences, the difference between and the net disposal proceeds and the carrying amount is recognized as the gain or loss.

i.

Impairments of related assets including property, plant and equipment, right-of-use assets and contract cost

At the end of each reporting period, the Group reviews whether there is any indication that its property, plant and equipment, right-of-use assets have suffered an impairment loss. If any indication exists, the recoverable amount of the asset is estimated. When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher one of which the fair value less costs to sell

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and its use value. If the recoverable amount of individual assets or cash-generating units is lower than its carrying amount, it would be decreased to its recoverable amount and the impairment loss is recognized in profit or loss.

Inventories recognized in customers' contracts are recognized as impairment loss in accordance with Inventory write off policy and the aforementioned regulations. Subsequently, the excess of carrying amount of assets associated with contract cost over the price received from providing relevant products or service, less direct relevant costs, is recognized as impairment loss. Then the carrying amount of assets associated with contract cost is computed to its cash-generating unit to evaluate the impairment losses on cash-generating unit.

When impairment loss subsequently reverses, the carrying amounts of the asset, cash-generating units or contract cost and related assets are increased to the revised recoverable amounts. However, the increased carrying amounts shall not exceed the carrying amounts of the asset, cash-generating units or contract cost and related assets which were not recognized as impairment loss at the past period (less amortization or depreciation). The reversal of impairment loss is recognized as profit or loss.

j.

Financial instruments

Financial assets and liabilities shall be recognized in the consolidated financial statements when the Company becomes a party to the contractual provisions of the instruments.

At initial recognition, the financial assets and liabilities are measured at its fair value. In the case of the financial assets and liabilities not at fair value through profit or loss, transaction costs are directly attributable to the acquisition or issue of financial assets and financial liabilities. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.

Financial assets

Regular way purchase and sale of financial assets are recognized and derecognized using trade date accounting.

1) Classification of measurement

Financial assets held by the Group are classified to financial assets measured at amortized cost and investments in equity instruments measured through other comprehensive income at fair value.

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(1) Financial assets measured at amortized cost

The Entities' financial assets are measured at amortized cost if both of the following conditions are met:

a) the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and
b) the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Financial assets measured at amortized cost include cash and cash equivalent, contract assets, note receivables, account receivables, other receivables, other current assets and refundable deposits. When the recognition commences, effective interest method is used to determine the carrying amount less any amortized cost of depreciation. Any exchange gains and losses are recognized as gains and losses.

Credit losses on financial assets are significant financial difficulty of the issuer or borrower, a breach of contract, it becoming probable that the borrower will enter bankruptcy or other financial reorganization, or the disappearance of an active market for the financial asset because of financial difficulties.

Cash equivalents, for the purpose of meeting short-term cash commitments, consist of highly liquid time deposits and investments that are readily convertible to known amounts of cash, which are subject to an insignificant risk of changes in value and acquired within three months.

(2) Investments in equity instruments measured at fair value through other comprehensive income

On initial recognition, the Group may irrevocably designate investments in equity instruments that is not held for trading and not recognized as contingent consideration as at FVTOCI.

Investments in equity instruments measured at fair value through other comprehensive income are measured at fair value. Subsequently the changes in fair value are reported in other comprehensive income and accumulated in other equity. on disposal of investments, the accumulated profit or loss is directly transferred to retained earnings and no reclassified to profit or loss.

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The dividend from investments in equity instruments measured at fair value through other comprehensive income are recognized in profit or loss upon the Group's right to receive payment is established, except for apparently the dividend representing the recovery of the partial investment cost.

2) Impairments of financial assets and contract assets

At the date of each balance sheet, the Group reviews expected credit losses to estimate the impairment loss of financial assets, including notes receivable, and contract assets measured at amortized cost.

The loss allowance for accounts receivable is measured at an amount equal to useful lives expected credit losses. Other financial assets shall be evaluated if credit risk increases significantly after recognition. When the credit risk has not increased, a loss allowance is recognized at an amount equal to expected credit loss within 12 months. If, on the other hand, there has been a significant increase in credit risk since initial recognition, a loss allowance is recognized at an amount equal to expected credit loss resulting from all possible default events over the expected life of a financial instrument.

Expected credit losses are weighted average credit losses with the probability of default events. 12-month expected credit losses are expected credit losses that result from default events possible within 12 months after the reporting date. Lifetime expected credit losses result from all possible default events over the expected life of the financial instruments.

For the purpose of internal controls on credit risk, without considering the collaterals it holds, the Company determines the following events as a breach of contract:

(1) There is internal or outside information prevails that it is not possible the borrower pays off the debt.
(2) The overdue exceeds the average credit period, unless there is reasonable and evidencable information prevails the extent of a breach of contract is more appropriate.

All impairment losses on financial assets is decreased its carrying amount through contra accounts.

3) Derecognition of financial assets

The Entities derecognize the financial assets only when the contractual

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rights to the cash flows from the financial assets expire, or when they transfer the financial assets and substantially all the risks and rewards of ownership of the financial assets to another entity.

On derecognition of financial assets at amortized cost in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss. On derecognition of Investments in equity instruments measured at fair value through other comprehensive income, the cumulative gain or loss that had been recognized in other comprehensive income is transferred directly to retained earnings, without recycling through profit or loss.

Financial Liabilities

Follow-up measurement
Financial liabilities are measured at amortized cost using effective interest method.
Derecognition of financial liabilities

On the derecognition of financial liabilities, the difference between their carrying amount and the consideration paid and payable , including any transfer of non-cash assets or liabilities, is recognized as profit or loss.

k. Provision

The amount recognized as a provision is, taking risk and uncertainty of obligation into consideration, the best estimate of the expenditure required to settle the obligation at the date of balance sheet.

l. Revenue recognition

The Entities allocate the transaction price to each performance obligation and recognizes the revenue when each of the obligation is satisfied after the customer has identified it.

1) Sales revenue

Sales revenue comes from the sale of semiconductor materials. Since the clients are eligible for pricing and using the products as well as responsible for reselling and taking the risk of depreciation upon the delivery of semiconductor materials, the Company shall recognize the revenue and accounts receivable upon the sale.

2) Service Income

Service Income comes from packaging and final testing.

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When the customer simultaneously receives and consumes the benefits provided by the Group's performance of packaging and final testing service, or the customer controls an asset which the Group's performance has created or enhanced, the related revenue is recognized. Packing and final testing of products counts on involvement of technicians. The Entities measure the work in progress by the percentage of completion. The contract with customer states that the customer will be billed after the packing and final testing or the delivery is completed. A contract asset is thus recognized when the Group renders the service and transfers to accounts receivable when the packing and final testing or delivery is completed. Final testing counts on the involvement of technicians. The Company measures the work in progress by the percentage of completion. Contract customer will be billed after the completion of service, and the Group will recognize accounts receivable when rendering the service.

m. Lease

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

a. The Entities as lessor

Leases are classified as finance lease whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

The sublease of right-of-use assets is classified by reference to right-of-use assets, instead of underlying assets. However, if the main lease is short-term lease applicable to recognition exemption, such sublease is classified as operating leases.

Under the operating lease, lease payments less lease incentives granted are recognized as revenue on a straight-line basis. The initial direct cost which occurs on granting operating leases is the carrying amount accumulated to the underlying assets and is recognized as expense on a straight of line basis. b. The Entities as lessee

Except for payments for low-value asset leases and short-term leases applicable to exemption of recognition are recognized as expenses on a straight-line basis, the Company recognizes right-of-use assets and lease liabilities for all leases at the commencement date of the lease.

Right-of-use assets are initially measured at cost, which comprises the

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initial measurement of lease liabilities, lease payments made before commencement date less lease incentives granted, initial direct costs as well as estimated costs to restore the underlying assets. Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any remeasurement of the lease liabilities. Right-of-use assets are presented on a separate line in the consolidated balance sheets.

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

Lease liabilities are initially measured at the present value of the lease payments, which comprise fixed payments and the default fine arises from lease termination. The lease payments are discounted using the interest rate in a lease if that rate can be readily determined. If that rate cannot be readily determined, the Company uses the incremental borrowing rate.

n.

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. When there is a change in a lease term, the Group remeasures the lease liabilities with a corresponding adjustment to the right-of-use-assets. However, if the carrying amount of the right-of-use assets is reduced to zero, any remaining amount of the remeasurement is recognized as profit or loss. Lease liabilities are presented on a separate line in the consolidated balance sheets. Borrowing Costs

Borrowing Costs requires that borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset, that necessarily takes a substantial period of time to get ready for its intended use or sale, are included in the cost of the asset.

Where funds are borrowed specifically, costs eligible for capitalization are the actual costs incurred less any income earned on the temporary investment of such borrowings.

Other borrowing costs at the period are recognized as profit or loss.

Government grants

A government grant is recognized only when there is reasonable assurance that the Group will comply with any conditions attached to the grant and the grant will be received.

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The grant receivable as compensation for costs already incurred or for immediate financial support, with no future related costs, shall be recognized as profit or loss in the period in which it is receivable.

p.

Employee benefits

a. Short-term employee benefits

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

b. Pensions

For defined contribution plans, the amount of contribution payable in respect of service rendered by employees in that period should be recognized as expenses.

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

Net defined benefit liability represents the actual deficit in the Group’s defined benefit plan. Net defined benefit liability shall not exceed the present value of refunds from the plan or reductions in future contributions to the plan.

q.

Income tax

The provision for income tax recognized in profit or loss comprises current and deferred tax.

a. Current tax

The Group has determined the current income (losses) and calculated taxes payable (receivable) in accordance with regulations established by the jurisdiction for tax return.

According to Income Tax Act in Republic of China, an additional income tax leived at undistributed surplus earnings are recognized in shareholders'

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annual meeting.

Income tax payable for prior period is adjusted to the current income tax b. Deferred tax

Deferred tax is accounted for temporary differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax basis used in the computation of taxable profit or loss.

Deferred tax liability is generally recognized for all taxable temporary differences. Deferred tax asset is recognized for deductible temporary differences or loss carryforwards to the extent that taxable profit is probably available.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and associates, except where the Group can control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deductible temporary differences associated with such investments are only recognized to the extent that it is probable that there will be sufficient taxable profits to realize the temporary differences and they are expected to reverse in the foreseeable future.

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

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the year in which the liability is settled or the asset is recovered, based on tax rates and laws that have been enacted or substantively enacted by the date of balanced sheet. The measurement of deferred tax liabilities and assets reflects the tax consequences that arise from the manner in which the Group expects, at the date of balance sheet, to recover or settle the carrying amount of its assets and liabilities.

Current and deferred tax for the year

Current and deferred tax are recognized in profit or loss, except the

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current and deferred tax that relates to items recognized in other comprehensive income or directly in equity are recognized respectively in other comprehensive income or directly in equity.

(5) Significant Accounting Assumptions and Judgement, And Major Sources ff Estimation

Uncertainty

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

The Group has taken COVID-19 into consideration on significant accounting estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period when the estimates are revised if the revisions affect only that period. If revisions affect both current and future periods, the accounting estimates are recognized in the current and future periods.

Major source of estimates and assumption uncertainty

a. Loss of property, plant, and equipment

Equipment relevant to semiconductor manufacturing is evaluated in accordance with the recoverable amount of such equipment (equal to the fair value of such asset less cost to sell and the higher amount of its use value). Market value or future changes in cash flow will affect the recoverable amount, resulting in the Group recognizing addition impairment losses or reversing impairment losses recognized. b. Income tax

Upon the end of 2020, the balance of unused loss carryforwards is NT$2,132,209,000. The carrying amount of deferred tax assets related to unused tax losses is NT$55,999,000 and the carrying amount of deferred tax assets related to temporary differences is NT$35,306,000. The realization of the deferred tax asset depends mainly on its future profitability or the taxable temporary difference. A significant reversal of deferred tax assets will be recognized as gain or loss if the real profits in the future are less than expected.

(6) Cash and cash equivalent

and cash equivalent
Cash on Hand and Petty Cash Check and Demand deposit Cash equivalent	December 31,2020 $ 541 722,557	December 31,2019
		$ 550 788,736

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Time deposits Short-Term Notes and Bills Annual percentage rate(%) Cash in Banks Time deposits Short-Term Notes and Bills	499,000 150,926 $ 1,373,024 0.001-0.05 0.34-2.1 0.23	764,996 150,508 $ 1,704,790 0.001-0.38 0.22-2.1 0.45

(7)	Financial assets at fair value through other comprehensive income-non-current December 31,2020 December 31,2019 Listed and OTC stocks ETREND Hightech Corp. $ 6,795 $ 5,232 Emerging stocks Enrich Tech Co., Ltd. 25,994 20,297 Amtek Semiconductors Co., Ltd. 6,192 5,362 Anwell Semiconductor Co., Ltd. - 636 Perfect Source Technology Corp. - - Xpert Semiconductor Inc. - - $ 38,981 $ 31,527	Financial assets at fair value through other comprehensive income-non-current December 31,2020 December 31,2019 Listed and OTC stocks ETREND Hightech Corp. $ 6,795 $ 5,232 Emerging stocks Enrich Tech Co., Ltd. 25,994 20,297 Amtek Semiconductors Co., Ltd. 6,192 5,362 Anwell Semiconductor Co., Ltd. - 636 Perfect Source Technology Corp. - - Xpert Semiconductor Inc. - - $ 38,981 $ 31,527	Financial assets at fair value through other comprehensive income-non-current December 31,2020 December 31,2019 Listed and OTC stocks ETREND Hightech Corp. $ 6,795 $ 5,232 Emerging stocks Enrich Tech Co., Ltd. 25,994 20,297 Amtek Semiconductors Co., Ltd. 6,192 5,362 Anwell Semiconductor Co., Ltd. - 636 Perfect Source Technology Corp. - - Xpert Semiconductor Inc. - - $ 38,981 $ 31,527	Financial assets at fair value through other comprehensive income-non-current December 31,2020 December 31,2019 Listed and OTC stocks ETREND Hightech Corp. $ 6,795 $ 5,232 Emerging stocks Enrich Tech Co., Ltd. 25,994 20,297 Amtek Semiconductors Co., Ltd. 6,192 5,362 Anwell Semiconductor Co., Ltd. - 636 Perfect Source Technology Corp. - - Xpert Semiconductor Inc. - - $ 38,981 $ 31,527	Financial assets at fair value through other comprehensive income-non-current December 31,2020 December 31,2019 Listed and OTC stocks ETREND Hightech Corp. $ 6,795 $ 5,232 Emerging stocks Enrich Tech Co., Ltd. 25,994 20,297 Amtek Semiconductors Co., Ltd. 6,192 5,362 Anwell Semiconductor Co., Ltd. - 636 Perfect Source Technology Corp. - - Xpert Semiconductor Inc. - - $ 38,981 $ 31,527
		Listed and OTC stocks ETREND Hightech Corp. Emerging stocks Enrich Tech Co., Ltd. Amtek Semiconductors Co., Ltd. Anwell Semiconductor Co., Ltd. Perfect Source Technology Corp. Xpert Semiconductor Inc.	December 31,2020 $ 6,795 25,994 6,192 - - - $ 38,981
					$ 5,232 20,297 5,362 636 - - $ 31,527

The Group invests the aforementioned common stocks in accordance with long-term strategic objectives and expects to profit from long-term investments. The management of the Group considers if the short-term volatility at fair value of such investments recognized in profit or loss is not consistent with the aforementioned long-term investment plan, it will be determined that such investments are measured through other comprehensive income at fair value.

Anwell Semiconductor Co., Ltd. had discontinued business in October 2020.

Perfect Source Technology Corp. had been liquidated and cancelled the registration in May 2020. The Group had received liquidating distribution of NT$2,000 in October 2020 and will dispose financial assets measured at fair value through other comprehensive income. The realized loss of NT$2,499,000 will be transferred to the retained earnings.

(8) Accounts receivable

unts receivable
Amortized cost Total carrying amount Less: Allowance for bad debts	December 31,2020 $ 1,330,691 ( 19,668 ) $ 1,311,023	December 31,2019
	(	(	$ 1,103,474 19,605 ) $ 1,083,869

The average collection period for selling products and rendering service is 60 to 90

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days, excluding accounts receivable. Credit of key customers is rated by using other public available financial information and historic transaction records. The Group continues supervising credit risk exposure and credit rating of the counterparty, as well as distributing the total transaction amount into different qualified customers. In addition, the management shall review and approve counterparty's line of credit for the purpose of managing credit risk exposure.

To mitigate credit risk, the management of the Group has designated functional working group responsible for decision on line of credit, credit approval and other supervision to ensure proper action has been taken to collect overdue accounts receivable. In addition, the collectible amount of accounts receivable shall be reviewed individually at the date of balance sheet to ensure the uncollectible accounts receivable has been listed to appropriate impairment loss. According these, the management considers the Group's credit risk has significantly decreased.

The loss allowance for accounts receivable is measured at an amount equal to useful lives expected credit losses. For the useful lives expected credit losses, customers' default on records and present financial position, economic trends, as well as GDP expectation and industry outlook are considered. The experience on the Group's credit losses presents that types of loss on different customer groups do not bring obvious differences. Thus the rate of expected credit losses is set based on accounts receivable aging, without further grouping customers.

If any evidence shows the counterparty faces significant financial difficulty and the collectible amount cannot be reasonably expected, the Group will directly offset the relevant accounts receivable but keep track of the receivables. The recovered amount is recognized in profit or loss.

The loss allowance for accounts receivable is measured as follows:

December 31, 2020 Expected credit loss(%) Total carrying amount Allowance for loss Amortized cost December 31, 2019 Expected credit loss(%) Total carrying amount Allowance for loss Amortized cost		0-90 days	Aging 91-180 days 2-3.1 $ 29,242 ( 535 ) $ 28,707 2-3.1 $ 23,289 ( 427 ) $ 22,862	Aging 181-365 days 10-15.5 $ - - $ - 10-15.5 $ 1,031 ( 95 ) $ 936	Aging over 365 days 100 $ 17,958 ( 17,958 ) $ - 100 $ 18,108 ( 18,108 ) $ -		Total
	(	0.1-0.2 $ 1,283,491 1,175 ) $ 1,282,316 0.1-0.2 $ 1,061,046 975 ) $ 1,060,071	(		(	(	$ 1,330,691 19,668 ) $ 1,311,023 $ 1,103,474 19,605 ) $ 1,083,869
	(		(	(	(	(

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Changes on allowance for accounts receivable loss are as below:

		2020		2019
Balance at the beginning of the
year	$	19,605	$	7,096
Current impairment losses		49		12,556
Exchange differences on
translation		14	(	47	)
Balance at the end of the year	$	19,668	$	19,605
r receivables
	December 31,2020		December 31,2019
Time deposits with an initial
maturity of more than three
months
	$	280,679	$	355,228
Tax Refund Receivable		13,586		10,901
Others		9,928		5,158
	$	304,193	$	371,287
Annual percentage rate of time
deposits with an initial maturity
of more than three months (%)
		0.3-0.815		0.45-1.07

(9) Other receivables

(10) Inventories

ntories
			December 31,2020				December 31,2019
Raw materials				$	312,582		$	299,116
Finished good Inventory					18,649			38,115
Work in process					4,883			6,401
Products					-			1,745
				$	336,114		$	345,377
Inventory-related	operating	costs	as	of	2020 and	2019	are	respectively
NT$5,158,502,000	and NT$4,783,009,000.

Operating costs include the following items:

Unamortized fixed production overheads Revenue from sale of scraps Inventory Valuation Losses	2020 $ 347 ( 35,485 ) 44,673	2019
		$ 6,107 ( 30,588 ) 1,799

33 -

(11) Subsidiaries

a. Subsidiaries incorporated in the consolidated financial statements

The basis for the consolidated financial statements is as follows:

Investor Parent Company Investor Parent Company Lee Shin Investment Co., Ltd. Lingsen Holding (Samoa) Inc. Li Yuan Investments Co., Ltd.	CompanyName Lingsen Holding (Samoa) Inc. Panther Technology Co., Ltd. Sooner Power Semiconductor Co., Ltd. CompanyName Lee Shin Investment Co., Ltd. Lingsen America Inc. Nexus Material Corporation Sooner Power Semiconductor Co., Ltd. Nexus Material Corporation Li Yuan Investments Co., Ltd. Ningbo Liyuan Technology Co., Ltd.	Equityholding (%)	Equityholding (%)
		2020 December 31 2019 December 31
		100 100 64 64 99 99 Equityholding (%)
		2020 December 31 100 100 78 1 21 100 100	2019 December 31
			100 100 78 1 21 100 100

See Table 4 and 5 for the location and business of aforementioned subsidiaries

b. Significant information on subsidiaries of non-controlling interests

CompanyName Panther Technology Co., Ltd.	Percentage of Ownership (%)	Percentage of Ownership (%)
	December 31,2020 36	December 31,2019
		36

The following summary of financial information of Panther Technology Co., Ltd. is prepared in accordance with the amount prior to elimination of intragroup transactions:

transactions:
Current assets	December 31,2020 $ 279,424	December 31,2019
		$ 235,594

34 -

Non-current assets 670,781 Current liabilities ( 172,596 ) Non-current liabilities ( 266,386 ) Equity $ 511,223 Interests attributed to: Owners of the Company $ 325,496 non-controlling interests of Panther Technology Co., Ltd. 185,727 $ 511,223 2020 Operating income $ 569,793 Current net profit $ 6,032 Other comprehensive income - Total comprehensive income $ 6,032 Net income is attributed to: Owners of the Company $ 3,840 Non-controlling interests of Panther Technology Co., Ltd. 2,192 $ 6,032 The total comprehensive income is attributed to: Owners of the Company $ 3,840 Non-controlling interests of Panther Technology Co., Ltd. 2,192 $ 6,032 Cash flow From operating activities $ 106,161 From investing activities ( 190,301 ) From financing activities 105,893 New cash inflow $ 21,753 estments accounted for using the equity method December 31,2020 Investees Amount Shares Common stock that has never been listed on the TWSE or TPEx Qi Feng Technology Co., Ltd. $ 11,417 30% Less: accumulated impairment ( 11,417 ) $ -	Non-current assets 670,781 Current liabilities ( 172,596 ) Non-current liabilities ( 266,386 ) Equity $ 511,223 Interests attributed to: Owners of the Company $ 325,496 non-controlling interests of Panther Technology Co., Ltd. 185,727 $ 511,223 2020 Operating income $ 569,793 Current net profit $ 6,032 Other comprehensive income - Total comprehensive income $ 6,032 Net income is attributed to: Owners of the Company $ 3,840 Non-controlling interests of Panther Technology Co., Ltd. 2,192 $ 6,032 The total comprehensive income is attributed to: Owners of the Company $ 3,840 Non-controlling interests of Panther Technology Co., Ltd. 2,192 $ 6,032 Cash flow From operating activities $ 106,161 From investing activities ( 190,301 ) From financing activities 105,893 New cash inflow $ 21,753 estments accounted for using the equity method December 31,2020 Investees Amount Shares Common stock that has never been listed on the TWSE or TPEx Qi Feng Technology Co., Ltd. $ 11,417 30% Less: accumulated impairment ( 11,417 ) $ -	Non-current assets 670,781 Current liabilities ( 172,596 ) Non-current liabilities ( 266,386 ) Equity $ 511,223 Interests attributed to: Owners of the Company $ 325,496 non-controlling interests of Panther Technology Co., Ltd. 185,727 $ 511,223 2020 Operating income $ 569,793 Current net profit $ 6,032 Other comprehensive income - Total comprehensive income $ 6,032 Net income is attributed to: Owners of the Company $ 3,840 Non-controlling interests of Panther Technology Co., Ltd. 2,192 $ 6,032 The total comprehensive income is attributed to: Owners of the Company $ 3,840 Non-controlling interests of Panther Technology Co., Ltd. 2,192 $ 6,032 Cash flow From operating activities $ 106,161 From investing activities ( 190,301 ) From financing activities 105,893 New cash inflow $ 21,753 estments accounted for using the equity method December 31,2020 Investees Amount Shares Common stock that has never been listed on the TWSE or TPEx Qi Feng Technology Co., Ltd. $ 11,417 30% Less: accumulated impairment ( 11,417 ) $ -		591,649 ( 148,054 ) ( 173,998 ) $ 505,191 $ 321,655 183,536 $ 505,191 2019 $ 567,302 $ 2,068 - $ 2,068 $ 1,317 751 $ 2,068 $ 1,317 751 $ 2,068 $ 133,947 ( 184,601 ) 67,163 $ 16,509 December 31,2019	591,649 ( 148,054 ) ( 173,998 ) $ 505,191 $ 321,655 183,536 $ 505,191 2019 $ 567,302 $ 2,068 - $ 2,068 $ 1,317 751 $ 2,068 $ 1,317 751 $ 2,068 $ 133,947 ( 184,601 ) 67,163 $ 16,509 December 31,2019
Investees Common stock that has never been listed on the TWSE or TPEx Qi Feng Technology Co., Ltd. Less: accumulated impairment
		Amount $ 11,417 11,417 ) $ -		Amount $ 11,417 11,417 ) $ -	Shares
	(		(		30%

(12) Investments accounted for using the equity method

Investments accounted for using the equity method as well as the Group's share of profit or loss and other comprehensive income are not calculated in accordance with

35 -

auditors' reports. However, the management of the Group determines that it shall have little influence if financial statements of Qi Feng Technology Co., Ltd.are not audited.

(13) Property, Plant and Equipment

perty, Plant and Equipment
Assets used by the Company Assets subject to operating leases	December 31,2020 $ 3,291,413 200,137 $ 3,491,550	December 31,2019
		$ 3,874,167 200,459 $ 4,074,626

a. Assets used by the Company

Assets used by the Company	Assets used by the Company	Assets used by the Company
2020 Balance at the beginning of t h e y e a r I n Cost Land $ 127,534 $ Buildings 3,147,941 Machinery and equipment 5,368,285 Transportation equipment 23,191 Office equipment 75,982 Other facilities 314,612 Total costs 9,057,545 $ Accumulated depreciation Buildings 1,240,194 $ Machinery and equipment 3,571,423 Transportation equipment 19,889 Office equipment 45,660 Other facilities 188,471 Total accumulated depreciation 5,065,637 $ Accumulated impairment Land 59,787 $ Buildings 57,954 Machinery and equipment - Office equipment - Other facilities - Accumulated impairment loss 117,741 $ $ 3,874,167 2019 Balance at the beginning of t h e y e a r E ff e c t s o f retrospectivel y applying I F R S 1 6 Cost Land $ 127,534 $ - Buildings 3,570,455 ( 277,992 ) Machinery and equipment 5,705,696 ( 1,300 ) Transportation equipment 24,997 - Office equipment 72,801 - Other facilities 288,567 - Unfinished construction 6,140 - Total costs 9,796,190 ($ 279,292 ) Accumulated depreciation Buildings 1,327,064 ( $ 74,292 )			I n	c r e a s e - 6,840 208,384 2,271 4,603 56,398 278,496 127,211 614,805 1,609 11,658 58,076 813,359 - 2,851 40,943 708 2,954 47,456 Balance at the beginning of t h e y e a r (r e s t a t e d)	D e c r e a s e				Reclassificati o n			E x c d i f f		h a n g e e r e n c e - 7,013 1,223 51 ) 11 584 8,780 5,224 771 21 ) 4 251 6,229 - - - - - - E x c h a n g d i f f e r e n	Balance at the end of the y e a r
			$			$ - 85,309 754,934 2,382 4,289 64,659						$ (			$ 127,534 3,076,485 4,813,925 23,029 76,307 306,935
			$			$ 911,573						$			8,424,215
			$			$ 85,309 749,523 2,382 4,289 64,653						$ (			1,287,320 3,426,012 19,095 53,033 182,145
			$			$ 906,156							$		4,967,605
			$			$	- - - - -	D		$			$
			$			$	-			$			$
					I	n c r e a s e			e c	r e a s e	o	if	icati n
															e c e	e y
Cost Land Buildings Machinery and equipment Transportation equipment Office equipment Other facilities Unfinished construction Total costs Accumulated depreciation Buildings	$ 127,534 3,570,455 5,705,696 24,997 72,801 288,567 6,140 9,796,190 1,327,064	$ - ( 277,992 ) ( 1,300 ) - - - - ($ 279,292 ) ( $ 74,292 )		$ 127,534 3,292,463 5,704,396 24,997 72,801 288,567 6,140 9,516,898 1,252,772		$ - 7,277 434,240 - 5,604 50,115 670 $ 497,906 $ 141,274		$	- 140,899 796,304 1,782 2,384 25,954 - 967,323 140,899					$ - ( 18,523 ) ( 2,805 ) ( 24 ) ( 39 ) ( 1,281 ) - ($ 22,672 ) ( $ 12,864 )			$ 127,534 3,147,941 5,368,285 23,191 75,982 314,612 - 9,057,545 1,240,194
								$
								$

36 -

Balance at the beginning of t h e y e a r	Balance at the beginning of t h e y e a r (r e s t a t e d)	n c r e a s e	D e c r e a s e	Reclassificati n	Balance at the end of the y e a r
3,698,082 19,786 36,695 151,136 5,232,763 59,787 57,954 117,741 $ 4,445,686	3,697,943 19,786 36,695 151,136 5,158,332 59,787 57,954 117,741 $ 4,240,825	671,213 1,892 11,367 63,877 $ 889,623 $ - - $ -	796,247 1,782 2,384 25,954 $ 967,266 $ - - $ -	186 - - - $ 97 $ - - $ -	3,571,423 19,889 45,660 188,471
					5,065,637
					59,787 57,954
					117,741
					$ 3,874,167

For the slow sales for parts of the Group's product, the Group expects that economical benefit on such machinery equipment has decreased, resulting in the recoverable amount is less than carrying amount. The impairment loss of NT$47,456,000 was recognized in 2020, which has been listed in consolidated statement of comprehensive income.

Depreciation is computed on a straight-line basis over the following estimated useful live:

Buildings
Plant building	45-50 year
Hydropower air-conditioning
engineering	3-20 years
Machinery and equipment	3-10 year
Transportation equipment	4-7 years
Office equipment	3-7 years
Other facilities	3-7 years

See note 28 for the amount of property, plant, and equipment used by the Company pledged as collaterals.

b. Assets subject to operating leases

Assets subject to operating	leases	leases
2020 Cost Buildings Machinery and equipment Accumulated depreciation Buildings	Balance at t h e beginning of t h eye a r		I n c r e a s e $ - - $ - $ 4,791	Reclassificat i o n $ - 15,933 $ 15,933 $ -	Balance at the end of t h eye a r
		$ 279,629 - 279,629			$ 279,629 15,933
					295,562
		79,170			83,961

37 -

Machinery and
equipment							-			-			11,464				11,464
Interest expenses						79,170		$ 4,791			$		11,464				95,425
						$ 200,459											$ 200,137
					Effects of
					retrospectiv		Balance at
	Balance at				e	l y	t	h e
	t		h	e	a	p p l y i n g	beginning										Balance at
	beginning				I	F R S 1 6	of the year						Reclassific				the end of
2019	of		theyear				(restated)		I n	c	r e a s e		a	t	i o n		t h eye a r
Cost
Buildings		$		-		$ 277,992		$ 277,992	$			-		$	1,637		$ 279,629
Machinery and
equipment				-		1,300		1,300				-	(		1,300	)	-
				-		$ 279,292		$ 279,292	$			-		$	337		279,629
Accumulated
depreciation
Buildings				-		$ 74,292		$ 74,292	$		4,789			$	89		79,170
Machinery and
equipment				-		139		139			47		(		186	)	-
				-		$ 74,431		$ 74,431	$		4,836		(	$	97	)	79,170
		$		-													$ 200,459

The Group has used buildings based on operating leases with a lease term of 1 to 18 years. All operating lease contracts include the clause where the lessee shall adjust the lease payment according to market rent when a right of renewal is exercised.

The operating lease payments receivable for the buildings is as follows:

Year 1 Year 2 Year 3 Year 4 Year 5 Over 5 Years	December 31,2020 $ 12,255 9,690 4,530 4,530 4,530 20,888 $ 56,423	December 31,2019
		$ 9,579 9,121 9,121 3,961 3,961 16,505 $ 52,248

Depreciation is computed on a straight-line basis over the following estimated useful live:

Buildings 45-50 year Machinery and equipment 5-7 years

38 -

(14) Lease agreements

)Lease agreements
a. Right-of-use assets December 31,2020 Carrying amount of right-of-use assets Land $ 161,942 Buildings 2,859 $ 164,801 2020 Addition to right-of-use assets $ 2,211 Depreciation expense of right-of-use assets Land $ 4,628 Buildings 1,902 Machinery and equipment - Transportation equipment - $ 6,530 Sublease income of right-of-use assets (Rent Income from sublease) ($ 1,464 ) b. Lease liabilities December 31,2020 Carrying amount of lease liabilities Current $ 5,494 Non-current $ 152,251 Ranges of discount rates for lease liabilities are as follows: December 31,2020 Land 0.67%-0.91% Buildings 0.67%-1.65% Machinery and equipment - Transportation equipment -	December 31,2019
		$ 177,883 2,550 $ 180,433 2019





	$ 5,510 $ 167,111 December 31,2019
	0.67% 0.67%-1.65% 1.54% 0.67%

39 -

c. Material leases and terms

The Group leases several transportation for the use of business with a lease term of 1 to 3 years. Upon the termination of the contract, such contract does not contain a bargain purchase option for the Group.

The Group leases several lands and buildings for the use of plants, office buildings and employee dormitories with a lease term of 1 to 10 years. Upon the termination of the contract, the lands and buildings do not contain a bargain purchase option for the Group.

d. Sublease

The Group subleases right-of-use of land as operating lease, with a lease term of 20 years. The lessee shall adjust the lease payment according to market rent when a right of renewal is exercised

right of renewal is exercised
Year 1 Year 2 Year 3 Year 4 Year 5 Over 5 Years	December 31,2020 $ 1,464 1,464 1,464 1,464 1,464 16,470 $ 23,790	December 31,2019
		$ 1,464 1,464 1,464 1,464 1,464 17,934 $ 25,254

e. Information on other lease

See Note 13 for agreements that the Group sells property, plant and equipment used by the Group under operating leases.

Expenses relating to short-term leases Total cash outflow for leases		2020 $ 54,387 $ 62,398 )		2019
				$ 66,405 $ 75,754 )
	(		(

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

40 -

(15) Other assets

er assets
Current Supply inventory Time Deposit Pledge (Note 28) Tax Overpaid Retained for Offsetting the Future Tax Payable Prepayments Payments on behalf of others Input Tax Others Non-current Prepayments for business facilities Others	December 31,2020 $ 105,225 71,888 25,305 13,993 5,086 2,733 604 $ 224,834 $ 157,529 12,019 $ 169,548	December 31,2019
		$ 69,131 71,884 22,789 14,889 3,902 1,246 739 $ 184,580 $ 40,490 7,111 $ 47,601

(16) Borrowings

a. b.	Short-term bank loans Credit loan Import and export financing Annual percentage rate(%) Credit loan Import and export financing Long-term bank loans Collateralized borrowings Credit loan Less: amount falling due in one year Amount falling due after one year Annual percentage rate(%) Collateralized borrowings Credit loan Maturity Collateralized borrowings Credit loan	December 31,2020 $ 163,920 84,759 $ 248,679 0.8-4.98 0.90-1.32 December 31,2020 $ 965,876 98,000 1,063,876 ( 486,287 ) $ 577,589 0.42-1.54 0.42-1.6 2021.11-2027.03 2021.11-2022.04	December 31,2019
			$ 389,921 38,068 $ 427,989 0.96-4.98 2.48-2.8 December 31,2019

			(

41 -

(17) Other payables

er payables
Wages payable Accounts payable, factory supplies Vacation pay payable Accounts payable, equipment Employees' compensation and remuneration of directors payable Others	December 31,2020 $ 208,859 178,822 56,561 23,488 1,062 114,081 $ 582,873	December 31,2019
		$ 195,713 144,532 54,864 52,749 91 108,621 $ 556,570

(18) Provisions - Current

Provisions for sales returns and allowances are, estimated under experiences, judgement of the management and other known reasons for the probable sales returns and allowances, and recognized as the subtraction of operating revenue upon the related service is provided and products are sold at the current year.

Changes on provisions are as below:

Changes on provisions are as below:
Balance at the beginning of the year Current recognition Balance at the end of the year	2020 $ 12,378 7,072 $ 19,450	2019
		$ 12,086 292 $ 12,378

(19) Retirement benefits Plan

a. Defined contribution plans

The labor pension system under Labor Pension Act applicable to the Company, Panther Technology Co., Ltd., Nexus Material Corporation, and Sooner Power Semiconductor Co., Ltd. is defined contribution retirement benefit plans managed by the government. The employer shall contribute labor pension funds equal to six percent of an employee's monthly salary to individual labor pension accounts at the Bureau of Labor Insurance (the Bureau) for employees.

Ningbo Liyuan Technology Co., Ltd. participated in social insurance plan managed and planned by government of China, which is a defined contribution plan. The endowment insurance paid for the government is recognized as current expense upon withdrawal.

The retirement procedure and system has not established for Lingsen America Inc.

As investment companies or no employees hired, there is no retirement procedure or

42 -

system established for Lee Shin Investment Co., Ltd., Lingsen Holding (Samoa) Inc., Li Yuan Investments Co., Ltd.

b. Defined benefit plans

The Group has labor pension system as defined benefit plans under the R.O.C. Labor Standards Law that provide benefits based on an employee’s length of service and average monthly salary for the six-month period prior to retirement approved. The Company contributes an amount equal to 3% of salaries paid each month to their respective pension funds (the Funds), which are administered by the Labor Pension Fund Supervisory Committee (the Committee) and deposited in the Committee’s name in the Bank of Taiwan. Before the end of each year, the the balance in the Funds is assessed. If the amount of the balance in the Funds is inadequate to pay retirement benefits for employees qualified with retirement requirements in the next year, the Company is required to fund the difference in one appropriation that should be made before the end of March of the next year. The Funds are operated and managed by the government’s designated authorities; as such, the Group does not have any right to intervene in the investments of the Funds.

The amount of defined benefit plans recognized in the consolidated balance sheets is as follows:

as follows:
Present value of defined benefit obligation Fair value of plan assets Net defined benefit liabilities	December 31,2020 $ 788,843 ( 734,602 ) $ 54,241	December 31,2019
	(	(	$ 786,506 709,150 ) $ 77,356

Movements the net defined benefit liabilities are as follows:

Balance as of January 1, 2019 Service cost Current service cost Interest expense Defined benefit costs recognized in profit or loss Remeasurement of the net defined benefit liability/asset Return on plan assets (excluding amounts	Present value of defined benefit o b l i g a t i o n $ 803,059 8,564 7,848 16,412 -	Fair value of p l a n a s s e t s ($ 667,401 ) - ( 6,541 ) ( 6,541 ) ( 36,134 )	N e t d e f i n e d b e n e f i t l i a b i l i t i e s
			$ 135,658 8,564 1,307 9,871 ( 36,134 )

43 -

included in net interest
expense)
Actuarial loss
- changes in
demographic
assumptions		238			-				238
- changes in financial
assumptions		21,079			-				21,079
- experience adjustments		2,678			-				2,678
Defined benefit costs
recognized in other
comprehensive income		23,995		(	36,134	)	(		12,139	)
Contributions from employer		-		(	30,000	)	(		30,000	)
Benefits paid	(	56,960	)		30,926		(		26,034	)
Balance as of December 31,
2019		786,506		(	709,150	)			77,356
	Present value of
	defined benefit			Fair	value of		N	e t	d e f i n e	d
	o b l	i g a t i o	n	p l a n a s s e t		s	b	e	n e f i	t
							l i	a b i l i t i e		s
Service cost
Current service cost	$	8,246		$	-			$	8,246
Interest expense		5,764		(	5,297	)			467
Defined benefit costs
recognized in profit or loss		14,010		(	5,297	)			8,713
Remeasurement of the net
defined benefit
liability/asset
Return on plan assets
(excluding amounts
included in net interest
expense)		-		(	30,383	)	(		30,383	)
Actuarial loss
- changes in
demographic
assumptions		1,460			-				1,460
- changes in financial
assumptions		36,809			-				36,809
- experience adjustments	(	9,714	)		-		(		9,714	)
Defined benefit costs
recognized in other
comprehensive income		28,555		(	30,383	)	(		1,828	)
Contributions from employer		-		(	30,000	)	(		30,000	)
Benefits paid	(	40,228	)		40,228				-
Balance as of December 31,
2020	$	788,843		($	734,602	)		$	54,241

44 -

Due to the defined benefit plans under the R.O.C. Labor Standards Law, the Group is exposed to the following risks:

Investment risk: The pension funds are invested in domestic and foreign equity securities, debt securities, bank deposits, etc. The investment is conducted at the discretion of the Bureau of Labor Funds’ designated authorities or under the mandated management. However, the distributions on plan assets shall not be less than the return calculated by the average interest rate on a two-year time deposit published by the local banks.
Interest risk: A decrease in the government bond interest rate will increase the present value of the defined benefit obligation. However, the return on the debt investments of the plan assets will increase as well. These will be partially offset on net defined benefit liabilities.
Salary risk: The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the present value of the defined benefit obligation.

The actuarial valuations of the present value of the defined benefit obligation

are carried out by qualified actuaries. The principal assumptions are as follows:

Discount rate Expected salary increase rate	December 31,2020 0.30% 2.00%	December 31,2019
		0.75% 2.00%

If reasonably likely changes respectively occur in the principal assumptions and all other assumptions are held constant, the amount of present value of the defined benefit obligation is increased or decreased as follows:

December 31,2020 ($ 20,822 ) $ 21,640 $ 21,219 ($ 20,531 )	December 31,2019	December 31,2019
(	(	$ 21,089 ) $ 21,937 $ 21,609 $ 20,886 )

(	(

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

45 -

)	Contributions expected in one year Average maturity of defined benefit obligation Equity a. Common Stock Authorized shares (in thousands) Authorized capital Issued and paid shares (in thousands) Issued capital	December 31,2020 $ 30,000 10 years December 31,2020 500,000 $ 5,000,000 380,102 $ 3,801,023	December 31,2019
			$ 30,000 10 years December 31,2019
			500,000 $ 5,000,000 380,102 $ 3,801,023

(20) Equity

A holder of issued common shares with par value of NT$10 per share is entitled to vote and to receive dividends.

b. Capital surplus

Capital surplus
Additional paid-in capital From convertible bonds Treasury stock transactions Donations Interest premium payable on convertible bonds	December 31,2020 $ 1,123,151 252,910 8,190 353 - $ 1,384,604	December 31,2019
		$ 1,123,151 252,910 62,061 289 13,285 $ 1,451,696

The capital surplus generated from donations and the excess of the issuance price over the par value of capital stock (including the stock issued for new capital, convertible bonds, treasury stocks and difference between the price of acquisition or disposal of subsidiaries' equity and the book value) may be used to offset a deficit. In addition, when the Group has no deficit, such capital surplus may be distributed as cash dividends or stock dividends to the paid-in capital. However, stock dividends may not exceed a certain percent of the paid-in capital. Retained earnings and dividend policy

Surplus earning distribution policy under the Company's Articles of Incorporation states that when allocating earnings, the Group shall pay the tax, offset its losses, set aside its legal capital reserve at ten percent of the retained earnings, and then set aside or reverse special capital reserve in accordance with relevant laws or regulations; if here are earnings left, along with accumulated unappropriated surplus, the Board of Directors shall propose the surplus earning distribution for shareholders'

46 -

meeting to determine the allocation of dividends and bonus. See Note 22 for distribution policy for employees’ compensation, and remuneration of directors under the Company's Articles of Incorporation.

Legal capital reserve shall be set aside until its balance equals to full amount of the paid-in capital. The reserve may be used to offset a deficit. When the Group has no deficit, the portion in excess of 25% of the paid-in capital may be used to distributed as dividends in stocks or cash.

The Company regulates to set aside and reverse special capital reserve in compliance with FSC No. 1010012865, FSC No. 1010047490 and 'Common Questions on Special Capital Reserve Appropriation in Adoption of International Financial Reporting Standards (IFRSs).'

The Company approved loss make-up proposal of 2018 in the shareholders' meeting in June 2019. Due to losses in 2018, the earnings were not allocated after deficit was offset and special capital reserve at NT$99,169,000 was set aside. In addition, the capital surplus is distributed in cash at NT$76,000,000, as NT$0.1999 per share.

The Company has approved loss make-up proposal of 2019 in the shareholders' meeting in June 2020. Due to losses in 2019, the earnings were not allocated after special capital reserve at NT$34,836,000 was reversed and deficit was offset respectively by legal capital reserve at NT$359,085,000 and capital surplus at NT$67,156,000.

The Board of Directors in the Company has made the loss make-up proposal of 2020 on March 18, 2021. Due to losses in 2020, the earnings were not allocated after the special capital reserve at NT$31,601,000 and a deficit of capital surplus at NT$134,666,000 were offset.

Loss make-up proposal of 2020 is expected to be determined in the shareholders' meeting in June 2021.

d.

Non-controlling interests

Sooner Power Semiconductor Co., Ltd. has conducted the capital increase of NT$250,000,000 in December 2020, which was all subscribed by the Company to maintain its share at 99%.

e.

The aforementioned transaction which does not change the Group's controlling the subsidiary are accounted for as equity transactions Treasury stocks

On June 16, 2020, in the purpose of transferring stocks to employees, the Board of Directors has determined, from of June 17, 2020 to August 14, 2020, to repurchase 2,000,000 shares to increase treasury stocks at a centralized securities exchange market, at the price of NT$7.28 to NT$13; however, when the stock price is lower

47 -

than the floor price, the Company can continue the repurchase with the ceiling of total amount of repurchase of NT$26,000,000. Upon December 31, 2020, the Company has repurchased 2,000,000 shares and NT$23,413,000 respectively.

The treasury stocks held by the Company, in accordance with Securities and Exchange Act, shall not be pledged and the Company is not entitle to distribute dividends and to vote.

The relevant information on the Company's shares held by Li Xin Investment Co., Ltd. is as follows:

Ltd. is as follows:
December 31, 2020 December 31, 2019	Total Shares O w n e d 5,658,911 5,658,911	C a r r y i n g a m o u n t $ 80,639 $ 58,853	Market value
			$ 80,639 $ 58,853

the shares of the Company held by a subsidiary shall be regarded as treasury stocks. It is given the same rights as the common shareholders, except for cash increase from the Company and voting.

(21) Revenue

enue
Revenue from Contracts with Customers Service Income Sales revenue	2020 $ 5,405,885 51,701 $ 5,457,586	2019
		$ 4,650,979 68,411 $ 4,719,390

a. Contract balances

Contract balances
Contract assets - current Notes receivable Accounts receivable	December 31, 2020 $ 126,485 9,386 1,311,023 $ 1,446,894	December 31, 2019 $ 90,702 6,968 1,083,869 $ 1,181,539	January1,2019
			$ 88,130 10,896 1,092,065 $ 1,191,091

b. Details of revenue from contracts with customers

See Note 32 for the information on details of revenue from contracts with

customers

c. Timing of revenue recognition

Timing of revenue recognition
Performance obligation satisfied over time Performance obligation satisfied at a point in time	2020 $ 5,405,885 51,701 $ 5,457,586	2019
		$ 4,650,979 68,411 $ 4,719,390

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(22) Labor cost and depreciation

C l a s s i f i c a t i o n 2020 Employee labor cost Short-term employee benefits Pensions Defined contribution plans Defined benefit plans Other labor cost Depreciation expenses 2019 Employee labor cost Short-term employee benefits Pensions Defined contribution plans Defined benefit plans Other labor cost Depreciation expenses	Classified as operatingcosts $ 1,272,351 41,743 7,525 104,409 759,937 1,110,963 43,224 8,399 204,535 831,369	Classified as o p e r a t i n g e x p e n s e s $ 246,325 8,816 1,188 18,217 64,743 249,777 10,307 1,472 35,027 70,955	T o t a l
			$ 1,518,676 50,559 8,713 122,626 824,680 1,360,740 53,531 9,871 239,562 902,324

Under the Company's Articles of Incorporation, the Company shall accrue employees’ compensation and remuneration of directors at the rates of no less than 10% and no higher than 2% respectively, of net profit before income tax, of employees’ compensation, and remuneration of directors. Due to a deficit in 2020 and 2019, the employees' compensation and remuneration of directors have not been estimated yet.

If the amount in the annual consolidated financial statements still has any changes after the date it is approved and published, it is regarded as changes on accounting estimates and will be adjusted to the next year.

Please see 'Market Observation Post System' under the Taiwan Stock Exchange for the information on the employees' compensation and remuneration of directors determined by the Board of Directors.

49 -

(23) Income Tax

a. Main components of income tax expense recognized in profit or loss

Current tax Income tax expense generated in the current year Adjustment on prior years Deferred tax Income tax expense generated in the current year Adjustment on prior years Income tax expense recognized in profit or loss		2020 $ 954 43 ) 911 15,703 110 $ 16,724	2019
	(		$ 309 3,851 4,160 ( 945 ) $ 3,215

A reconciliation of accounting income and income tax expense is as follows:

Tax benefit at the statutory rate Permanent differences Temporary differences Current loss carryforward Unrecognized loss carryforward Effect of Exchange Rate Changes applicable to the consolidated entities Deferred tax Income tax expense generated in the current year Adjustment on prior years Adjustment on prior years Income tax expense recognized in profit or loss	2020 ( $ 29,283 ) 45,193 18,191 ( 17,598 ) 20,682 ( 36,231 ) 15,703 110 ( 43 ) $ 16,724	2019
		( $ 109,783 ) 30,390 3,174 - 121,111 ( 44,583 ) ( 945 ) - 3,851 $ 3,215

The President of R.O.C. has announced the amendments to 'Statute for Industrial Innovation' in July 2019, which stating that the undistributed earnings to construct or purchase a certain asset or technology as of or after 2018 may be deducted from the undistributed earnings in calculation. The Group only deducts the amount of capital expenditure which has actually been processed in calculation of undistributed surplus earnings.

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b. Deferred tax assets and liabilities

2020 Deferred tax income assets Temporary differences Defined benefit retirement plans Inventory falling price reserves Vacation pay payable Provision Right-of-use assets Others Loss carryforwards Deferred tax liabilities Temporary differences Difference on depreciation methods Others 2019 Deferred tax income assets Temporary differences Defined benefit retirement plans Inventory falling price reserves Vacation pay payable Provision Right-of-use assets Others Loss carryforwards Deferred tax liabilities Temporary differences Difference on depreciation methods Others	Balance at t h e beginning of t h eye a r $ 15,084 5,154 10,723 2,476 110 558 34,105 73,123 $ 107,228 $ 633 260 $ 893 $ 17,512 4,971 9,450 2,417 - 600 34,950 73,767 $ 108,717 $ 807 91 $ 898	D e f i n e d benefit costs recognized in profit or l o s s $ - 331 338 1,414 ( 110 ) ( 399 ) 1,574 ( 17,124 ) ($ 15,550 ) ( $ 185 ) 448 $ 263 $ - 183 1,273 59 110 ( 41 ) 1,584 ( 644 ) $ 940 ( $ 174 ) 169 ($ 5 )	D e f i n e d benefit costs recognized i n o t h e r comprehens ive income ( $ 366) - - - - - ( 366 ) - ($ 366 ) $ - - $ - ( $ 2,428 ) - - - - - ( 2,428 ) - ($ 2,428 ) $ - - $ -	transaction differences $ - - - - - ( 7 ) ( 7 ) - ($ 7 ) $ - - $ - $ - - - - - ( 1 ) ( 1 ) - ($ 1 ) $ - - $ -	Balance at the end of t h eye a r
					$ 14,718 5,485 11,061 3,890 - 152 35,306 55,999 $ 91,305 $ 448 708 $ 1,156 $ 15,084 5,154 10,723 2,476 110 558 34,105 73,123 $ 107,228 $ 633 260 $ 893
		(

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c. Amount of unused loss carryforwards of deferred income tax assets which was not recognized in the consolidated balance sheet

Y e a r 2020 2021 2022 2023 2024 2025 2026 2027 Y e a r 2028 2029 2030	December 31,2020 $ - 228,296 208,391 136,913 143,636 127,855 119,192 122,573 December 31,2020 $ 104,397 507,703 103,475 $ 1,802,431	December 31,2019	December 31,2019
		$ 264,930 228,296 208,391 136,913 143,636 127,855 119,192 122,573 December 31,2019
			$ 104,397 507,584 - $ 1,963,767

d. Relevant information on unused loss carryforwards

L a s t t a xye a r 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030	P a r e n t C o m p a n y	P a r e n t C o m p a n y	Sooner Power Semiconduct or Co.,Ltd. $ 134,711 105,558 116,449 112,206 127,847 119,180 122,548 104,373 117,998 103,410 $1,164,280	N e x u s M a t e r i a l Corporation $ 24,810 26,386 20,464 31,430 8 12 25 24 25 65 $ 103,249	N i n g b o L i y u a n Technology C o .,L t d .	N i n g b o L i y u a n Technology C o .,L t d .
		$ - - - - - - - 329,778 389,680 - $ 719,458				$ 68,775 76,447 - - - - - - - - $ 145,222

e. The total amount of deductible temporary differences for which is relevant to invested subsidiaries and no deferred tax assets have been recognized is as follows:

December 31,2020 $ 2,514,376	December 31,2019
	$ 2,266,368

f. Income tax examination The tax authorities have examined income tax returns of the Company and domestic subsidiaries through 2018.

52 -

g. Relevant information on income tax of foreign subsidiaries

The profit-seeking enterprise income tax of Ningbo Liyuan Technology Co., Ltd. is calculated in accordance with the tax law in China. As of the end of 2020, there are accumulated losses and no income tax payable.

As locally registered companies, Lingsen Holding (Samoa) Inc. and Li Yuan Investments Co., Ltd. are, under the regulation of the local law, exempt for income from offshore.

The profit-seeking enterprise income tax of Lingsen America Inc. is calculated in accordance with the tax law in America.

(24) Loss per Share

N e t l o s s belonging to c o m m o n stockholders N u m b e r o f Owners of the S h a r e s C o m p a n y (Denominator) Loss per share (in thousand) ( N T $ )

2020

Basic and diluted loss per share Net loss attributed to the owners of the Company

==> picture [245 x 12] intentionally omitted <==

2019

Basic and diluted loss per share Net loss attributed to the owners of the Company

==> picture [245 x 12] intentionally omitted <==

It is assumed the Group is able to elect to pay employees' compensation in stocks or cash. Then if the compensation is given in stocks, and the weighted average number of ordinary shares outstanding shall be computed to the dilutive potential ordinary shares to calculate diluted EPS. On the calculation of diluted EPS before the decision on issuing shares in the next year, the consideration on the effect of such dilutive potential ordinary shares will continue.

(25) Capital Management

The Group manages its capital to ensure that it will be able to maximize shareholders return as a going concern through the optimization of the debt and equity balance. The overall strategy has not changed.

The Group's capital structure is consist of net debt (leases less cash and cash equivalent) and equity attributed to the Company's owner (common stocks, capital

53 -

surplus, retained earnings and other equity).

The Group is allowed not to follow other external laws or regulations on capitals. The key management of the Group reviews its capital structure for each season, including the consideration on costs of every types of capitals and relevant risks. Based on the key management's advice, the Group balances its overall capital structure by paying dividend payments, new shares issuance, share repurchase and new debt issuance or debt repayment, etc.

(26) Financial instruments

a. Information on fair value
1) Financial instruments that are not measured at fair value

The management of the Group considers that the carrying amounts of financial assets and liabilities that are not measured at fair value approximates its fair value or its fair value cannot be reliably measured.

2) Financial instruments that are measured at fair value on a recurring basis
(1) Fair value hierarchy

Fair value hierarchy
December31,2020 Financial assets at fair value through other comprehensive income Emerging stocks Listed and OTC stocks December 31,2019 Financial assets at fair value through other comprehensive income Emerging stocks Listed and OTC stocks	L eve l 1 $ - 6,795 $ 6,795 $ - 5,232 $ 5,232	L eve l 2 $ - - $ - $ - - $ -	L eve l3 $ 32,186 - $ 32,186 $ 26,295 - $ 26,295	T o t a l
				$ 32,186 6,795 $ 38,981 $ 26,295 5,232 $ 31,527

Transfer between level 1 and level 2 fair value measurements in 2020 and 2019.

(2) Reconciliation of Level 3 fair value measurements on financial instruments
54 -

F i n a n c i a l a s s e t s a t f a i r v a l u e t h r o u gh o t h e r c o m p r e h e n s i v e i n c o m e	F i n a n c i a l a s s e t s a t f a i r v a l u e t h r o u gh o t h e r c o m p r e h e n s i v e i n c o m e	F i n a n c i a l a s s e t s a t f a i r v a l u e t h r o u gh o t h e r c o m p r e h e n s i v e i n c o m e
E	q u i t y i n s	t r u m e n t s
	2020 $ 26,295 5,891 - $ 32,186	2019
		$ 40,801 ( 2,755 ) ( 11,751 ) $ 26,295

(3) Valuation techniques and input value used in Level 3 fair value
measurement

The securities of emerging stocks held by the Group have no market price reference and thus are evaluated under the cost approach. Its fair value is computed in reference to investment assets.

b. Categories of financial instruments

Categories of financial instruments
Financial assets Financial assets measured at amortized cost Financial assets at fair value through other comprehensive income Financial Liabilities Amortized cost	December 31,2020 $ 3,196,934 38,981 1,963,148	December 31,2019
		$ 3,330,424 31,527 2,318,114

Balance of financial assets measured at amortized cost includes cash and cash equivalent. contract assets, notes and accounts receivable, other receivables, pledged time deposit and refundable deposits, and other financial assets measured at amortized cost.

Balance of financial liabilities measured at amortized cost includes shor-term bank loans, accounts payable, other payables, long-term bank loans (including amount falling due in one year) and guarantee deposits received and other financial liabilities measured at amortized cost.

Financial risk management objectives and policies

The majority of financial instruments include equity instrument investments,

55 -

accounts receivable, accounts payable, borrowings and lease liabilities, etc. The financial management department provides service for each unit by organizing and coordinating the market operation nationally and internationally, supervising and reporting the internal risks by analyzing risk exposure according to the extent and breadth of risk, and managing financial risks associated with the Group's operation. Such risks include market risk (including foreign currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

1) Market risk

The Group is exposed to the financial market risks, primarily changes in foreign currency exchange rates and interest rates, due to its operation.

The Group is exposed to market risk associated with financial instruments and the management and measurement of such exposure have not changed.

(1) Foreign currency risk

The Group's sales and purchase transactions are denominated in foreign currency, which exposes the Group to foreign currency risk. Approximately 20%~24% of sales revenue is not denominated in functional currency and approximately 45%~49% of the cost is not denominated in functional currency.

See Note 30 for the carrying amount of monetary assets and liabilities denominated in non-functional currency at the date of balance sheet.

Sensitivity analysis

The Group is mainly affected by fluctuations in U.S. dollar and Japanese yen.

The following table details the Group’s sensitivity analysis to a 1% increase and decrease in NT dollar against the relevant foreign currency. The rate of 1% is the sensitivity rate used when reporting foreign currency risk internally to the key management and represents the management’s assessment of the reasonably likely change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and the end-of-year exchange rate is adjusted to 1% increase and decrease. The following table details the amount resulting in changes in net loss before tax to a 1% increase and decrease in NT dollar against the relevant foreign currency.

56 -

C a t e g o r i e s o f c u r r e n c y U.S. Dollar Japanese yen

The impact of fluctuations in exchange rate on p r o f i t o r l o s s 2020 2019 $ 254 $ 1,299 79 197

(2) Interest rate risk

The Group is exposed to interest rate risk for the reason that it has borrowed money at both fixed and variable rate. The Group maintains an appropriate fixed and floating rate for portfolio to manage interest rate risk. The hedge is evaluated on a regular basis, which makes its point of view and the established risk preference identical, to ensure the most efficient hedging strategy is adopted.

The carrying accounts of financial assets and liabilities exposed to interest rate risk at the date of balance sheet are as follows:

December 31, 2020 December 31, 2019

Fair value interest rate
risk
Financial assets	$	531,493	$	736,616
Financial Liabilities		260,130		392,621
Cash flows Interest rate
risk
Financial assets		1,188,672		1,389,199
Financial Liabilities		1,210,170		1,510,299

Sensitivity analysis

The following sensitivity analysis is determined in accordance with interest rate risk of non-derivative instruments at the date of balance sheet. For the floating rate liabilities, the analysis is to assume that the amount of liablilities outstanding at the date of balance sheet is all outstanding at the reporting period. The rate of change used to report interest rate to the key management of the Group is 1% increase and decrease in interest rate and represents the management's assessment of reasonable likely changes in interest rate.

For floating-rate financial assets and liabilities, when interest rate is increase by 1% and other conditions remain unchanged, the net loss before tax in 2020 and 2019 are NT$215,000 and NT$1,211,000

57 -

respectively.

The Group's sensitivity of interest decreases in 2020, arising from an approximation of financial assets and liabilities with cash flow risk.

(3) Other price risk

The Group is exposed to price risk due to investments in equity securies. The management manage the risk by investing in portfolio with different risks.

Sensitivity analysis

The following sensitivity is analyzed according to the exposure to equity price risk at the date of balance sheet.

If the equity price changes by 1%, the other comprehensive income in 2020 and 2019 will increase and decrease NT$68,000 and NT$52,000 respectively due to changes in fair value of financial assets measured at fair value through profit or loss.

2) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Group. The maximum credit risk exposure due to the financial loss arising from the counterparty not performing its obligation and the Group's financial guarantee primarily results from:

(1) The carrying amount of financial assets recognized in the consolidated balance sheet.
(2) The Group has given financial guarantee and not taken the maximum amount to be paid into consideration.

The Group's credit risk is mainly resulted from its five largest customers. As of December 31, 2020 and 2019, the aforementioned customers are accounted for 45% and 48% of accounts receivable and contract assets, respectively.

3) Liquidity risk management

The Group manages and maintains a level of cash and cash equivalents adequate to finance the Group’s operations and mitigate the effects of fluctuations in cash flows. In addition, the management monitors the utilization of borrowings and ensures compliance with loan conditions.

The bank borrowing is a material source of liquidity to the Group. As of

58 -

December 31, 2020 and 2019, the undrawn loan amounts are as follows:

December 31, 2020 December 31, 2019 Undrawn loan amounts $ 2,181,311 $ 1,692,262

Liquidity and interest risks of non-derivative financial liabilities

The funds are adequate to the Group's operations and thus the Group is not exposed to liquidity risk and financing to meet the contractual obligations.

The maturity of the Group’s non-derivative financial liabilities which the repayment period has been committed is as follows:

December 31,2020 Non-interest bearing liabilities Lease liabilities Floating-rate liabilities Fixed-rate liabilities December 31,2019 Non-interest bearing liabilities Lease liabilities Floating-rate liabilities Fixed-rate liabilities	Within 1year $ 648,771 6,637 632,581 102,385 $ 1,390,374 Within 1year $ 586,902 7,362 607,032 220,000 $ 1,421,296		1 to 3years $ - 10,771 428,864 - $ 439,635 1 to 3years $ - 12,071 826,816 - $ 838,887		more that 3 years
					$ - 165,944 148,725 - $ 314,669 more that 3 years

					$ - 180,340 76,451 - $ 256,791

The further information on a maturity analysis of lease liability is below:

December 31, 2020 Lease liabilities December 31, 2019 Lease liabilities	With in 1 y e a r $ 6,637 $ 7,362	1-5years $ 20,302 $ 22,630	5-10years	10-15years	10-15years	15-20years	15-20years	O v e r 2 0 y e a r s	O v e r 2 0 y e a r s
			$156,413 $ 169,781		$ - $ -		$ - $ -		$ - $ -

The amount of the aforementioned floating rate instrument of non-derivative liabilities will change resulting from the floating rate is different from the interest rate estimated at the date of balance sheet.

(27) Related-party transactions

Transactions, balances, income and expenses between the Company and subsidiaries (related parties of the Company) may be all eliminated in consolidation,

59 -

which are thus not disclosed in the note. Except for other notes disclosed, transactions between the Group and other related parties are as follows.

Compensation of key management personnel

Short-term employee benefits Pensions	2020 $ 40,186 917 $ 41,103	2019
		$ 48,318 1,168 $ 49,486

The compensation to directors and other key management personnel were determined by the Compensation Committee in accordance with the individual performance and the market trends.

(28) Pledged Assets

The following assets are provided as collaterals and import duty payable for maximum loan amount:

maximum loan amount:
Property, plant, and equipment Pledged time deposits (recognized in other current assets)	December 31,2020 $ 1,823,785 71,888 $ 1,895,673	December 31,2019
		$ 2,151,999 71,884 $ 2,223,883

(29) Significant Contingent Liabilities and Unrecognized Commitments

Significant contingent commitments of the Group at the end of balance sheet, excluding those disclosed in other notes, are as follows:

a. For customs duties guarantee and other objectives, the financial institution has provided guarantee details as follows:

December 31,2020 $ 33,950	December 31,2019
	$ 41,150

b. Unrecognized commitments are as follows:

Purchases of property, plant, and equipment	December 31,2020 $ 429,517	December 31,2019
		$ 107,367

(30) Significant information on exchange rate of foreign currency financial assets and liabilities

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

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Foreign currency assets Monetary items U.S. Dollar Japanese yen Foreign currency liabilities Monetary items U.S. Dollar Japanese yen	December 31,2020 F o r e i g n currency Exchange r a t e N T D $ 16,668 28.48 $ 474,705 86,438 0.2763 23,883 17,561 28.48 500,137 57,930 0.2763 16,006	December 31,2020 F o r e i g n currency Exchange r a t e N T D $ 16,668 28.48 $ 474,705 86,438 0.2763 23,883 17,561 28.48 500,137 57,930 0.2763 16,006	December 31,2019	December 31,2019	December 31,2019
	F o r e i g n currency $ 16,668 86,438 17,561 57,930	Exchange r a t e 28.48 0.2763 28.48 0.2763	F o r e i g n currency $ 17,131 109,847 12,797 38,649	Exchange r a t e 29.98 0.276 29.98 0.276	N T D
					$ 513,587 30,318 383,654 10,667

Significant unrealized exchange gains or losses are as follows:

F o r e i g n c u r r e n cy U.S. Dollar U.S. Dollar Japanese yen Japanese yen	2020	Exchange g a i n s ( l o s s e s ) $ 2,459 ( 6,906 ) 104 - ($ 4,343 )	2019	Exchange g a i n s ( l o s s e s ) ( $ 182 ) 2,103 ( 616 ) ( 3 ) $ 1,302
	E x c h a n g e r a t e 28.48`（`USD`：`NTD`）` 6.5249`（`USD`：`CNY`）` 0.2763`（`JPY`：`NTD`）` 0.0634`（`JPY`：`CNY`）`		E x c h a n g e r a t e 29.98`（`USD`：`NTD`）` 6.9762`（`USD`：`CNY`）` 0.276`（`JPY`：`NTD`）` 0.0644`（`JPY`：`CNY`）`

(31) Other disclosures

a. Information about significant transactions and b. investees
1) Financing provided to others: None
2) Endorsements/guarantees provided: Table 1
3) Marketable securities held (excluding investment in subsidiaries, associates): Table 2
4) Marketable securities acquired and disposed at costs or prices at least NT$300 million or 20% of the paid-in capital: None
5) Acquisition of individual real estate at costs of at least NT$300 million or 20% of the paid-in capital: None
6) Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital: None
7) Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital: None
8) Receivables from related parties amounting to at least NT$100 million or 20%
61 -

of the paid-in capital: None

9) Trading in derivative instruments: None
10) Others: The business relationship between the parent and the subsidiaries and significant transactions between them: Table 3
11) Information on investees: Table 4
c. Information on investment in Mainland China
1) The name of the investee in mainland China, the main businesses and products, its issued capital, method of investment, information on inflow or outflow of capital, percentage of ownership, income (losses) of the investee, share of profits/losses of investee, ending balance, amount received as dividends from the investee, and the limitation on investee: Table 5
2) Significant direct or indirect transactions through a third area with the investee in the Mainland Area, and its prices and terms of payment, unrealized gain or loss are as follows:
- (1) The amount and percentage of purchases and the balance and percentage of the related payables at the end of the period: None
- (2) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the period: None
- (3) The amount of property transactions and the amount of the resultant gains or losses: None
- (4) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the period and the purposes: Table 1
- (5) The highest balance, the end of period balance, the interest rate range, and total current period interest with respect to financing of funds: None
- (6) Other transactions that have a material effect on the profit or loss for the period or on the financial position, such as the rendering or receiving of services: Table 3
d. Information on major shareholders: names, numbers of shares held, and shareholding percentages of shareholders who hold 5 percent or more of the equity: Table 6

(32) Information on department

Information provided the key operating decision maker for resources allocation and performance evaluation of department focuses on each classification of products provided or service rendered. The department which shall be reported is IC packing and testing and others.

62 -

a. Departmental Income and Operation Results

D epa r t m e n t a l I n c o m e 2020 2019 $ 5,405,885 $ 4,650,979 51,701 68,411 $ 5,457,586 $ 4,719,390	Departmental Profits or L o s s e s	Departmental Profits or L o s s e s
2020 $ 5,405,885 51,701 $ 5,457,586	2020 ( $ 35,080 ) ( 128,450 ) ( 163,530 ) 6,821 18,906 1,165 52,855 ( 18,563 ) ( 459 ) 484 ( 47,456 ) 3,361 ($ 146,416 )	2019
		( $ 460,644 ) ( 118,924 ) ( 579,568 ) 10,178 7,254 4,731 31,089 ( 19,578 ) ( 1,808 ) ( 47 ) - ( 1,167 ) ($ 548,916 )
	(

The reported departmental income are generated from transactions with external customers. No intragroup sales occurred in 2020 and 2019.

Departmental interest refers to profits made by each department, excluding interest revenue, rental income, dividend income, disposal of income of property, plant and equipment, exchange gain or loss, financial cost and income tax expense. The amount of measurement provided to the key operating decision maker for resource allocation and performance evaluation of departments.

b. Total assets and liabilities of department

The Group did not provide reportable information on departments' asset to the operating decision maker, and thus the measurement of assets is zero.

Major income from products and service

The main business of the Group is IC packing and testing as well as optoelectronic devices, both as single category.

d. Information by Regions

The Group is located mainly in Asia, Americas and Europe.

Information on the Group’s income from continuing operations by locations of operation and non-current assets by location of assets, from external customers, are as follows:

63 -

Asia Americas Europe Africa	Incom e from ex t ernal c u s t o m e r s 2020 2019 $ 4,874,706 $ 4,215,174 308,519 350,274 274,218 153,942 143 - $ 5,457,586 $ 4,719,390	N o n - c u r r e	n t a s s e t s
	2020 $ 4,874,706 308,519 274,218 143 $ 5,457,586	December 31, 2020 $ 3,826,276 558 - - $ 3,826,834	December 31, 2019
			$ 4,302,784 800 - - $ 4,303,584

Non-current assets exclude financial assets and deferred income tax assets. Information on major customers

Income from a single customer which exceed ten percent of total income of the Group is as follows:

Group is as follows:
C u s t o m e r ' s N a m e A customer B customer	2020	% 16 -	2019
	A m o u n t $ 862,649 (Note)		A m o u n t $ 732,205 (Note)	%
				16 -

Note: The income does not exceed ten percent of the total income of the Group.

64 -

Amounts expressed in New Taiwan Dollars and in thousands of foreign currency

Lingsen Precision Industries, LTD. and its subsidiaries

Endorsements/guarantees provided

For the year ended December 31, 2020

Table 1

N o .	Endorsement/g u a r a n t e e p r o v i d e r	G u a r a n t e e d p a r t y	G u a r a n t e e d p a r t y	L i m i t s o n endorsement/gu arantee amount provided to each guaranteed party ( N o t e )	M a x i m u m balance for the p e r i o d	Ending balance	Amount actually d r a w n	A m o u n t o f Endorsement/ G u a r a n t e e Collateralized by Properties	R a t i o o f a c c u m u l a t e d endorsement/gu arantee to net equity per latest f i n a n c i a l statements(%)	M a x i m u m a m o u n t o f endorsement/gu a r a n t e e a l l o w a n c e ( N o t e )	G u a r a n t e e p r o v i d e d b y parent company	G u a r a n t e e p r o v i d e d b y s u b s i d i a r y	G u a r a n t e e p r o v i d e d t o subsidiaries in Mainland China
		Company Name	R e l a t i o n s h i p
0	Parent Company	Sooner Power Semiconductor Co., Ltd. Ningbo Liyuan Technology Co., Ltd.	Subsidiary Third-tier subsidiary	$ 742,036 742,036	$ 210,000 142,400 ( US$ 5,000 )	$ 210,000 142,400 ( US$ 5,000)	$ - 113,920 (US$ 4,000 )	$ - 71,000	4 3	$ 1,484,072 1,484,072	Y Y	`－` `－`	`－` Y

Note: Limits on endorsement/guarantee amount provided to each guaranteed party shall not exceed 15% of the net worth and maximum amount allowance shall not exceed 30% of the net worth.

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Lingsen Precision Industries, LTD. and its subsidiaries

Marketable securities held

December 31, 2020

Table 2

Amounts expressed in thousands of New Taiwan Dollars/thousands of shares

Held company name	Marketable securities t y p e s a n d n a m e	Relationship with the issuers	F i n a n c i a l s t a t e m e n t a c c o u n t	D e c e m b e r 3 1 , 2 0 2 0	D e c e m b e r 3 1 , 2 0 2 0	D e c e m b e r 3 1 , 2 0 2 0	D e c e m b e r 3 1 , 2 0 2 0
				S h a r e / U n i t s	Carrying amount	S h a r e s %	F a i r v a l u e ( N o t e 3 )
Parent Company Lee Shin Investment Co., Ltd.	Stock Amtek Semiconductors Co., Ltd. ETREND Hightech Corp. Xpert Semiconductor Inc. Stock The Company (Note 2) Enrich Tech CO., Ltd. ETREND Hightech Corp. Anwell Semiconductor Co., Ltd.	None None None Parent Company None None None	Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current	527 75 45 5,659 1,898 150 155	$ 6,192 2,265 - 80,639 25,994 4,530 -	2 - - 1 19 - 11	$ 6,192 2,265 - 80,639 25,994 4,530 -

Note 1: See Table 4 and 5 for related information on investment in subsidiaries. Note 2: The amount has been written-off in preparation of the consolidated financial statements

Note 3: Fair value of investment in emerging stocks is computed in reference to investment assets under the cost approach.

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Lingsen Precision Industries, LTD. and its subsidiaries

The business relationship between the parent and the subsidiaries and significant transactions between them.

For the year ended December 31, 2020

Table 3

Amounts expressed in thousands of New Taiwan Dollars

N o .	N a m e	T r a n s a c t i o n P a r t y	Relationship with the transaction party ( N o t e 1 )	T r a n s a c t i o n S t a t u s	T r a n s a c t i o n S t a t u s	T r a n s a c t i o n S t a t u s	T r a n s a c t i o n S t a t u s
				I t e m	A m o u n t`（`N o t e 2`）`	Transaction Condition	Percentage of total revenue or total assets the the consolidation(%)
0 1 2	Parent Company Sooner Power Semiconductor Co., Ltd. Panther Technology Co., Ltd.	Lingsen America Inc. Lee Shin Investment Co., Ltd. Panther Technology Co., Ltd. Sooner Power Semiconductor Co., Ltd. Ningbo Liyuan Technology Co., Ltd. Panther Technology Co., Ltd. Ningbo Liyuan Technology Co., Ltd. Nexus Material Corporation	1 1 1 1 1 2 2 2	Commissions Expense Expense Payable Rent Income Rent Income Advance Receipts Operating Income Rent Income Accounts receivable Sales Revenue Other income Other income Other receivables Refundable Deposits Operating Income Purchase Accounts receivable Accounts payable Rent Income	$ 5,793 1,979 36 1,556 67 2,818 2,160 32 58 122 451 30 2,330 13,393 9,590 1,445 1,677 36	60 days 60 days `－` `－` 60 days 60 days 60 days 60 days 30 days 30 days `－` `－` `－` 60 days 60 days 60 days 60 days 60 days	- - - - - - - - - - - - - - - - - -

Note 1 ： (1) Parent company to subsidiary

(2) Subsidiary to parent company

Note 2: The amount has been written-off in preparation of the consolidated financial statements

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Lingsen Precision Industries, LTD. and its subsidiaries

Information on investees

For the year ended December 31, 2020

Table 4

Amounts expressed in thousands of New Taiwan Dollars/thousands of shares

I n v e s t o r	I n v e s t e e s	L o c a t i o n	M a i n B u s i n e s s	Initial investment amount	Initial investment amount	Bal ance at Decem ber 31,20 20	Bal ance at Decem ber 31,20 20	Bal ance at Decem ber 31,20 20	Current income (losses) of the i n v e s t e e	Share of income (losses) recognized
				D e c e m b e r 3 1 , 2 0 2 0	D e c e m b e r 3 1 , 2 0 1 9	S h a r e s	R a t i o %	Carrying amount
Parent Company Lee Shin Investment Co., Ltd. Lingsen Holding (Samoa) Inc.	Lingsen Holding (Samoa) Inc. (Note 3) Panther Technology Co., Ltd. (Note 3) Sooner Power Semiconductor Co., Ltd. (Note 3) Lee Shin Investment Co., Ltd. (Note 1 and 3) Nexus Material Corporation (Note 2 and 3) Lingsen America Inc. (Note 3) Qi Feng Technology Co., Ltd. (Note 2) Sooner Power Semiconductor Co., Ltd. (Note 3) Nexus Material Corporation (Note 3) Li Yuan Investments Co., Ltd. (Note 3)	Samoan Islands Hsinchu County, Taiwan Hsinchu County, Taiwan Taichung City Hsinchu County, Taiwan California, America Taichung City Hsinchu County, Taiwan Hsinchu County, Taiwan Cayman Islands	Investment activities IC testing Electronic Parts and Components Manufacturing Investment activities Wholesale of electronic materials and electronic parts and components manufacturing Intermediary Electronic parts and components production and processing Electronic Parts and Components Manufacturing Wholesale of electronic materials and electronic parts and components manufacturing Investment activities	$ 1,660,738 230,146 604,223 300,000 53,483 32,311 24,000 2,561 14,192 1,660,738	$ 1,602,568 230,146 354,223 300,000 53,483 32,311 24,000 2,561 14,192 1,602,568	52,000 22,923 60,422 30,000 5,348 1,000 2,400 277 1,419 52,000	100 64 99 100 78 100 30 1 21 100	$ 175,821 325,495 188,779 58,800 20,848 60,192 - 866 5,532 175,821	( $ 65,992 ) 6,032 ( 187,094 ) ( 959 ) ( 65 ) 122 - ( 187,094 ) ( 65 ) ( 65,992 )	( $ 65,992 ) 3,840 ( 184,968 ) ( 959 ) ( 51 ) 122 - ( 1,137 ) ( 14 ) ( 65,992 )

Note 1: Treasury stocks have been deducted from the carrying amount of Lee Shin Investment Co., Ltd.

Note 2: Accumulated impairment loss has been deducted from the carrying amount of Nexus Material Corporation and Qi Feng Technology Co., Ltd.

Note 3: The amount has been written-off in preparation of the consolidated financial statements

Note 4: See Table 5 for relevant information on the investee in mainland China.

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Lingsen Precision Industries, LTD. and its subsidiaries Information on investment in Mainland China For the year ended December 31, 2020 Table 5 Amounts expressed in New Taiwan Dollars and in thousands of foreign currency Accumulated Current inflow and outflow of i n v e s t m e n t c a p i t a l[Accumulated ] S h a r e o f i n v e s t m e n t I n f l o w o f a m o u n t o f income (losses) a m o u n t o f Current income C u r r e n t Book value of i n v e s t m e n t I n v e s t e e i n outflow from of direct or outflow from (losses) of the r e c o g n i t i o n investment at r e v e n u e t o mainland China M a i n B u s i n e s s Issued capital[Method of ] Taiwan at the i n d i r e c t investment Taiwan at the i n v e s t e e the end of year Taiwan upon Company Name beginning of O u t f l o w I n f l o w i n v e s t e e s end of the year ( N o t e 2 ) the end of the t h e y e a r O w n e r s h i p y e a r P e r c e n t a g e Ningbo Liyuan IC packing and testing US$ 52,000 (Note 1) $ 1,602,568 $ 58,170 $ - $ 1,660,738 ( $ 65,992 ) 100% ( $ 65,992 ) $ 175,821 $ - Technology Co., as well as ( US$ 50,000 ) ( US$ 2,000 ) ( US$ 52,000 ) Ltd. (Note 4) optoelectronic devices

Accumulated investment amount of outflow in China mainland from Taiwan at the end o f t h e y e a r	Investment amount approved by Investment C o m m i s s i o n , M O E A	limitation on investee regulated under Investment Commission, MOEA (Note 3)
$ 1,660,738 ( U.S. Dollar52,000 )	U.S. Dollar55,000	$ 2,968,145

Note 1: Investment in Mainland China companies through a company invested and established in a third region.

Note 2: Investment in profit or loss in accordance with reports audited by the CPA from the parent company.

Note 3: Limitation is calculated under 'Regulations Governing the Examination of Investment or Technical Cooperation in Mainland China.' Note 4: The amount has been written-off in preparation of the consolidated financial statements.

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Lingsen Precision Industries, LTD. Information on major shareholders December 31, 2020

Table 6

S h a r e h o l d e r s	S h a r e s	S h a r e s
	Total Shares Owned	O w n e r s h i p P e r c e n t a g e
Trust account in CTBC Bank for ESOP committee of Lingsen Precision Industries, LTD. RUBYTOP Investment Co., Ltd (British Virgin Islands)	25,442,792 19,239,854	6.69% 5.06%

Note 1:This table is based on the information provided by the Taiwan Depository & Clearing Corporation for shareholders holding greater than five percent of the shares completed the process of registration and book-entry delivery in dematerialized form, including treasury stocks, at the last business date of current quarter. There may be a discrepancy in the number of shares recorded on the consolidated financial statements and its dematerialized securities arising from the difference in basis of preparation.
Note 2: As table above, the shareholder who delivers the shares to the trust is disclosed by the individual trustee who opened the trust account. In accordance with the Security Exchange Act, the shareholders have to disclose the insider equity more than ten percent of the shares, including their own shares and their delivery to the trust, and have the right to make decisions on the trust property. Information on insider equity is available on the Market Observation Post System website.
70 -

AI assistant

LPI — Annual Report 2020

52036_rns_2020-11-12_c5731833-85a6-4d04-984d-38f7e0d39110.pdf

Table of Contents

Representation Letter

---Notice to Readers---

Independent Auditors' Report

Opinion

Basis for Opinion

Key Audit Matters

Other Matters

Responsibilities of the management and those charged with governance for the consolidated financial statements

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Lingsen Precision Industries, LTD. and its subsidiaries Consolidated Balanced Sheet For the years ended December 31, 2020 and 2019

Lingsen Precision Industries, LTD. and its subsidiaries Consolidated Statements of Changes in Equity For the years ended December 31, 2020 and 2019

Lingsen Precision Industries, LTD. and its subsidiaries

Consolidated of Statements of Cash Flows

Notes to Consolidated Financial Statements

(1) Company History

(2) Approval Date and Procedures of the Consolidated Financial Statements

(3) Application of New Standards, Amendments and Interpretations

d.

e.

f.

g.

h.

i.

j.

Financial Liabilities

m. Lease

n.

p.

q.

annual meeting.

Uncertainty

Major source of estimates and assumption uncertainty

(8) Accounts receivable

(9) Other receivables

(10) Inventories

(11) Subsidiaries

(13) Property, Plant and Equipment

(14) Lease agreements

c. Material leases and terms

d. Sublease

e. Information on other lease

(15) Other assets

(16) Borrowings

(17) Other payables

(18) Provisions - Current

(19) Retirement benefits Plan

a. Defined contribution plans

b. Defined benefit plans

Movements the net defined benefit liabilities are as follows:

(20) Equity

d.

e.

(21) Revenue

customers

(22) Labor cost and depreciation

(23) Income Tax

b. Deferred tax assets and liabilities

(24) Loss per Share

2020

2019

(25) Capital Management

(26) Financial instruments

Sensitivity analysis

(2) Interest rate risk

Sensitivity analysis

Sensitivity analysis

2) Credit risk

(27) Related-party transactions

Compensation of key management personnel

(28) Pledged Assets

(29) Significant Contingent Liabilities and Unrecognized Commitments

Significant unrealized exchange gains or losses are as follows:

(31) Other disclosures

(32) Information on department

a. Departmental Income and Operation Results

Lingsen Precision Industries, LTD. and its subsidiaries

LPI Annual Report 2020