MACHVISION - Interim / Quarterly Report 2021

Stock Code:3563

MACHVISION INC. CO., LTD. AND SUBSIDIARIES

Consolidated Financial Statements

With Independent Auditors’ Review Report For the Six Months Ended June 30, 2021 and 2021

Address: No. 2-3, Gongye East 2nd Road, Hsinchu Science Park, Hsinchu 30075, Taiwan, R.O.C Telephone: (03)563-8599

The independent auditors’ report and the accompanying consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors’ report and consolidated financial statements, the Chinese version shall prevail.

Contents 1. Cover Page 2. Table of Contents 3. Independent Auditors’ Review Report 4. Consolidated Balance Sheets 5. Consolidated Statements of Comprehensive Income 6. Consolidated Statements of Changes in Equity 7. Consolidated Statements of Cash Flows 8. Notes to the Consolidated Financial Statements (1) History and organization (2) Approval date and procedures of the consolidated financial statements (3) New standards, amendments and interpretations adopted (4) Summary of significant accounting policies (5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty (6) Explanation of significant accounts (7) Related-party transactions (8) Pledged assets (9) Commitments and contingencies (10) Losses due to major disasters (11) Subsequent Events (12) Other (13) Other disclosures (a) Information on significant transactions (b) Information on investees (c) Information on investment in China (d) Information of major shareholders (14) Segment information	Page
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Contents
1.
Cover Page
2.
Table of Contents
3.
Independent Auditors’ Review Report
4.
Consolidated Balance Sheets
5.
Consolidated Statements of Comprehensive Income
6.
Consolidated Statements of Changes in Equity
7.
Consolidated Statements of Cash Flows
8.
Notes to the Consolidated Financial Statements
(1) History and organization
(2) Approval date and procedures of the consolidated financial statements
(3) New standards, amendments and interpretations adopted
(4) Summary of significant accounting policies
(5) Significant accounting assumptions and judgments, and major sources of
estimation uncertainty
(6) Explanation of significant accounts
(7) Related-party transactions
(8) Pledged assets
(9) Commitments and contingencies
(10) Losses due to major disasters
(11) Subsequent Events
(12) Other
(13) Other disclosures
(a) Information on significant transactions
(b) Information on investees
(c) Information on investment in China
(d) Information of major shareholders
(14) Segment information

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Independent Auditors’ Review Report

To the Board of Directors of Machvision Inc. Co., Ltd.:

Introduction

We have reviewed the accompanying consolidated balance sheets of Machvision Inc. Co., Ltd. and its subsidiaries as of June 30, 2021 and 2020, the related consolidated statements of comprehensive income for the three months ended June 30, 2021 and 2020, and for the six months ended June 30, 2021 and 2020, and the related consolidated statements of changes in equity and cash flows for the six months ended June 30, 2021 and 2020, and notes to the consolidated financial statements (including a summary of significant accounting policies). 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 Accounting Standard 34, "Interim Financial Reporting" endorsed and issued into effect by the Financial Supervisory Commission, R.O.C. Our responsibility is to express a conclusion on the consolidated financial statements base on our review.

Scope of Review

Except as explained in the Basis for Qualified Conclusion paragraph, the review is conducted in accordance with Statement of Auditing Standard 65, "Review of Financial Information Performed by the Independent Auditor of the Entity". A review of the consolidated financial statements consists of making inquiries (primarily of persons responsible for financial and accounting matters), and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with the generally accepted auditing standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Therefore, we do not express an audit opinion.

Basis for Qualified Conclusion

As mentioned in note 4 (b) the non-significant subsidiaries of the consolidated financial reports were recognized solely on the financial statements prepared by these investee companies, but not reviewed by independent auditors; the total amount of assets was $585,666 thousand and $660,122 thousand respectively, accounting for 14% and 16% of the total consolidated assets respectively; the total liabilities were $77,357 thousand and $68,648 thousand respectively, accounting for 5% and 4% of the total consolidated liabilities; the consolidated profits and losses for the three months and the six months ended June 30, 2021 and 2020, were $(15,663) thousand, $(17,708) thousand, $(39,390) thousand, and $(23,524) thousand respectively, accounting for (8)%, (9)%, (10)%, and (5)% of the consolidated profit and loss respectively.

Qualified Conclusion

Except for the adjustments, if any, as might have been determined to be necessary had the financial statements of certain consolidated subsidiaries and equity accounted investee companies described in the Basis for Qualified Conclusion paragraph above been reviewed by independent auditors, based on our review report, nothing has come to our attention that causes us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of Machvision Inc. Co., Ltd. and its subsidiaries as of June 30, 2021 and 2020, and of its consolidated financial performance for the three months ended June 30, 2021 and 2020, and for the six months ended June 30, 2021 and 2020, and its consolidated cash flows for the six months ended June 30, 2021 and 2020 in line with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, "Interim Financial Reporting", as endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

The engagement partners on the reviews resulting in this independent auditors' review report are Po-Shu Huang and Chung Shun Wu.

KPMG

Taipei, Taiwan (Republic of China) Aug 3, 2021

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with the generally accepted auditing standards as of June 30, 2021 and 2020 MACHVISION INC. CO., LTD. AND SUBSIDIARIES

Consolidated Balance Sheets

June 30, 2021 December 31, 2020 and June 30, 2020

(Expressed in Thousands of New Taiwan Dollars)

						June 30, 2020 Amount % 1,665,772 41 15,155 - 1,392,040 34 371,904 9 28,211 1 16,524 - 3,489,606 85 10,744 - 268,702 7 79,483 2 8,843 - 37,460 1 10,886 - 181,718 5 8,987 - 606,823 15 4,096,429 100 Liabilities and Equity Current liabilities: 2130 Current contract liabilities (Note 6(p)) 2150 Notes payable 2170 Accounts payable 2209 Other payables (Note 6(q)) 2216 Dividend payable (Note 6(n)) 2230 Current tax liabilities 2250 Provisions – current (Note 6(j)) 2280 Lease Liabilities – current (Note 6(i)) 2313 Deferred revenue (Note 6(k)) 2322 Current portion of long-term borrowings (Note 6(k)) 2399 Other current liabilities Total current liabilities Non-Current liabilities: 2540 Long-term borrowings (Note 6(k)) 2580 Lease liabilities – Non-current (Note 6(i)) 2630 Long-term deferred revenue (Note 6(k)) 2640 Net defined benefit liabilities – Non-current Total non-current liabilities Totalliabilities Equity attributable to shareholders of the Company (Note 6(n)): 3100 Share capital Capital surplus: 3211 Additional paid-in capital arisingfrom ordinary share 3235 Number of changes in recognition of ownership rights and interests of subsidiaries 3280 Capital surplus, Others Retained earnings: 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings Other equity interest: 3410 Exchange differences on translation of foreign financial statements Equity attributable to the parent Company 36xx Non-controlling interests Total Equity Total liabilities and equity	June 30, 2020 Amount % 1,665,772 41 15,155 - 1,392,040 34 371,904 9 28,211 1 16,524 - 3,489,606 85 10,744 - 268,702 7 79,483 2 8,843 - 37,460 1 10,886 - 181,718 5 8,987 - 606,823 15 4,096,429 100 Liabilities and Equity Current liabilities: 2130 Current contract liabilities (Note 6(p)) 2150 Notes payable 2170 Accounts payable 2209 Other payables (Note 6(q)) 2216 Dividend payable (Note 6(n)) 2230 Current tax liabilities 2250 Provisions – current (Note 6(j)) 2280 Lease Liabilities – current (Note 6(i)) 2313 Deferred revenue (Note 6(k)) 2322 Current portion of long-term borrowings (Note 6(k)) 2399 Other current liabilities Total current liabilities Non-Current liabilities: 2540 Long-term borrowings (Note 6(k)) 2580 Lease liabilities – Non-current (Note 6(i)) 2630 Long-term deferred revenue (Note 6(k)) 2640 Net defined benefit liabilities – Non-current Total non-current liabilities Totalliabilities Equity attributable to shareholders of the Company (Note 6(n)): 3100 Share capital Capital surplus: 3211 Additional paid-in capital arisingfrom ordinary share 3235 Number of changes in recognition of ownership rights and interests of subsidiaries 3280 Capital surplus, Others Retained earnings: 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings Other equity interest: 3410 Exchange differences on translation of foreign financial statements Equity attributable to the parent Company 36xx Non-controlling interests Total Equity Total liabilities and equity	June 30, 2021	June 30, 2021	December	31, 2020	June 30, Amount 18,641 377 266,429 385,542 447,282 107,231 12,875 11,721 1,058 5,625 12,432 1,269,213 210,257 68,912 3,060 10,429 292,658 1,561,871 447,282 568,285 4 23 568,312 395,088 4,543 1,013,682 1,413,313 (3,791)	2020 % - - 8 9 11 3 - - - - - 31 5 2 - - 7 38 11 14 - - 14 9 - 25 34 -
1100 1151 1170 130x 1410 1479 1510 1600 1755 1780 1840 1920 1932 1995	Assets Current assets: Cash and cash equivalents (Note 6(a)) Notes receivable (Note 6(b) and (p)) Accounts receivable, net (Note 6(b) and (p)) Inventories (Note 6(c)) Prepayments Other current assets Total current assets Non-current assets: Financial assets at fair value through profit or loss—Non current (Note 6(e)) Property, plant and equipment (Note 6(f)) Right-of-use assets (Note 6(g)) Intangible assets (Note 6(h)) Deferred income tax assets Refundable deposits Long-term receivables (Note 6(b) and (p)) Other non-current assets (Note 8) Total non-current assets	June 30, 2021		December 31, 2020 Amount % 1,616,607 44 15,284 - 1,110,321 30 363,424 10 7,243 - 10,524 - 3,123,403 84 10,744 - 271,280 7 77,013 2 83 - 57,564 2 11,872 1 141,032 4 16,296 - 585,884 16		June 30, 2020		Amount	%	Amount % 31,885 1 216 - 245,897 7 319,164 9 - - 171,660 5 13,442 - 12,039 - 1,038 - 16,875 - 9,682 - 821,898 22 199,535 5 66,286 2 2,552 - 11,286 - 279,659 7 1,101,557 29 447,282 12 568,285 15 4 - 23 - 568,312 15 438,263 12 3,791 - 1,064,573 29 1,506,627 41 (3,514) -	%
		Amount $ 1,723,766 25,752 1,398,186 372,051 9,124 8,909	%	Amount 1,616,607 15,284 1,110,321 363,424 7,243 10,524		Amount 1,665,772 15,155 1,392,040 371,904 28,211 16,524 3,489,606 10,744 268,702 79,483 8,843 37,460 10,886 181,718 8,987 606,823	%
								$ 37,314 5,849 301,799 332,070 402,554 99,879 14,730 15,983 1,048 24,167 12,516	1 - 7 9 10 2 - - - 1 -
							41 - 34 9 1 - 85 - 7 2 - 1 - 5 - 15
		3,537,788		3,123,403	84
		10,744 263,188 164,173 28 57,564 10,499 144,294 21,822		10,744 271,280 77,013 83 57,564 11,872 141,032 16,296 585,884	- 7 2 - 2 1 4 - 16
								1,247,909	30
								187,235 149,756 1,925 11,286	4 4 - -
								350,202	8
								1,598,111	38
								447,282	11
		672,312	16					165,731 4 28	4 - -
	Total assets	$ 4,210,100	100	3,709,287	100	4,096,429
								165,763	4
								1,910,606 45
								(3,694) -
								2,519,957 60		2,518,707 68		2,425,116	59
								92,032 2		89,023 3		109,442	3
								2,611,989 62		2,607,730 71		2,534,558	62
								$4,210,100 100		3,709,287 100		$4,096,429	100

			June 30, 2021		December 31, 2020	December 31, 2020	June 30,	2020
	Assets		Amount	%	Amount	%	Amount	%
	Current assets:
1100	Cash and cash equivalents (Note 6(a))	$	1,723,766	41	1,616,607	44	1,665,772	41
1151	Notes receivable (Note 6(b) and (p))		25,752	1	15,284	-	15,155	-
1170	Accounts receivable, net (Note 6(b)		1,398,186	33	1,110,321	30
	and (p))						1,392,040	34
130x	Inventories (Note 6(c))		372,051	9	363,424	10	371,904	9
1410	Prepayments		9,124	-	7,243	-	28,211	1
1479	Other current assets		8,909	-	10,524	-	16,524	-
	Total current assets		3,537,788	84	3,123,403	84	3,489,606	85
	Non-current assets:
1510	Financial assets at fair value through
	profit or loss—Non current (Note
	6(e))		10,744	-	10,744	-	10,744	-
1600	Property, plant and equipment (Note
	6(f))		263,188	6	271,280	7	268,702	7
1755	Right-of-use assets (Note 6(g))		164,173	4	77,013	2	79,483	2
1780	Intangible assets (Note 6(h))		28	-	83	-	8,843	-
1840	Deferred income tax assets		57,564	1	57,564	2	37,460	1
1920	Refundable deposits		10,499	-	11,872	1	10,886	-
1932	Long-term receivables (Note 6(b) and
	(p))		144,294	4	141,032	4	181,718	5
1995	Other non-current assets (Note 8)		21,822	1	16,296	-	8,987	-
	Total non-current assets		672,312	16	585,884	16	606,823	15

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with the generally accepted auditing standards MACHVISION INC. CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the three months and six months ended June 30, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars, Except for Earning Per Common Share)

For the three months ended June	For the three months ended June	For the three months ended June	30	For the six	months ended June 30 2020 % Amount % 100 1,363,349 100 38 462,232 34 62 901,117 66 9 138,219 10 4 54,997 4 10 111,329 8 - 32,047 2 23 336,592 24 39 564,525 42 - 1,425 - - 1,147 - (3) (27,360) (2) - (932) - (3) (25,720) (2) 36 538,805 40 8 104,826 8 28 433,979 32 - (785) - - - - - (785) - - (785) - 28 433,194 32 28 431,746 32 - 2,233 - 28 433,979 32 28 432,498 32 - 696 - 28 433,194 32 9.03 10.00 8.99 9.96	months ended June 30 2020 % Amount % 100 1,363,349 100 38 462,232 34 62 901,117 66 9 138,219 10 4 54,997 4 10 111,329 8 - 32,047 2 23 336,592 24 39 564,525 42 - 1,425 - - 1,147 - (3) (27,360) (2) - (932) - (3) (25,720) (2) 36 538,805 40 8 104,826 8 28 433,979 32 - (785) - - - - - (785) - - (785) - 28 433,194 32 28 431,746 32 - 2,233 - 28 433,979 32 28 432,498 32 - 696 - 28 433,194 32 9.03 10.00 8.99 9.96
2021		2020		2021		2020
Amount $ 715,360 285,291	% 100 40	Amount 677,118 220,726	% 100 33	Amount 1,403,993 537,330	% 100 38	Amount 1,363,349 462,232
430,069	60	456,392	67	866,663	62	901,117
65,683 28,032 61,589 475	9 4 9 -	62,292 25,524 63,628 18,281	9 4 9 3	128,719 55,456 138,695 1,350	9 4 10 -	138,219 54,997 111,329 32,047
155,779	22	169,725	25	324,220	23	336,592
274,290	38	286,667	42	542,443	39	564,525
784 1,546 (31,040) (1,022)	- - (4) -	602 893 (32,115) (584)	- - (4) -	1,365 2,427 (34,670) (1,836)	- - (3) -	1,425 1,147 (27,360) (932)
(29,732)	(4)	(31,204)	(4)	(32,714)	(3)	(25,720)
244,558 58,589	34 8	255,463 49,154	38 7	509,729 110,638	36 8	538,805 104,826
185,969	26	206,309	31	399,091	28	433,979
1 -	- -	(46) -	- -	(188) -	- -	(785) -
1	-	(46)	-	(188)	-	(785)
1	-	(46)	-	(188)	-	(785)
$ 185,970	26	206,263	31	398,903	28	433,194
$ 188,941 (2,972)	26 -	205,971 338	31 -	403,979 (4,888)	28 -	431,746 2,233
$ 185,969	26	206,309	31	399,091	28	433,979
$ 188,952 (2,982)	26 -	207,466 (1,203)	31 -	403,799 (4,896)	28 -	432,498 696
$ 185,970	26	206,263	31	398,903	28	433,194
$	4.22		4.71		9.03
,$	4.21		4.70		8.99

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with the generally accepted auditing standards MACHVISION INC. CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Changes in Equity For the six ended June 30, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

		Equity	attributable to own	ers of parent				Non-controlling interests 132,918 - - - 2,233 (1,537) 696 - (29,521) 5,349 109,442 89,023 - - (4,888) (8) (4,896) 7,905
Share capital	Capital surplus 59,512 - - - - -		Retained	earnings		Other equity Exchange differences on translation of foreign financial statements (4,543) - - - - - 752 752 - - - (3,791) (3,514) - - - (180) (180) - (3,694)	Total equity attributable to owners of parent 1,909,900 - - (447,282) 431,746 752 432,498 530,000 - - 2,425,116 2,518,707 (402,554) 5 403,979 (180) 403,799 - 2,519,957
		Legal reserve 309,915 85,173 - - - - - - - - 395,088 438,263 - - - - - - 438,263	Special reserve 2,957 - 1,586 - - - - - - - 4,543 3,791 - - - - - 3,791	Unappropriate earnings 1,115,977 (85,173) (1,586) (447,282) 431,746 - 431,746 - - - 1,013,682 1,064,573 - - 403,979 - 403,979 - 1,468,552	Total 1,428,849 - - (447,282) 431,746 - 431,746 - - - 1,413,313 1,506,627 - 403,979 - 403,979 - 1,910,606
$ 426,082 - - - - -
-	-
21,200 - -	508,800 - -
$ 447,282	568,312
$ 447,282 - - - -	568,312 (402,554) 5 - -
-	-
-	-
$ 447,282	165,763							92,032

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with the generally accepted auditing standards MACHVISION INC. CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Cash Flows For the six months ended June 30, 2021 and 2020

Cash flows from operating activities Profit before tax Adjustments: Adjustments to reconcile profit: Depreciation expense Amortization expense Expected credit impairment loss(gain) Interest expense Interest income Dividend income Loss on disposal of property, plant and equipment Loss on investment Resulting gain from lease modification Total adjustments to reconcile profit Changes in operating assets and liabilities Changes in operating assets, net Notes receivable Accounts receivable(including Long-term accounts receivable) Inventories Prepayments Other current assets Total changes in operating assets, net Changes in operating liabilities, net Contract liabilities Notes payable Accounts payable Other payables Provisions liabilities Other current liabilities Total changes in operating liabilities, net Total changes in operating assets and liabilities, net Total adjustments Cash inflows generated from operations Interest received Income taxes paid Net cash flow from operating activities Cash flow used in investing activities Acquisition of financial assets at fair value through profit or loss Disposal of subsidiaries Acquisition of property, plant and equipment Decrease (increase) in guarantee deposits paid Increase in other non-current assets Dividends received Net cash flows used in investing activities Cash flows from financing activities Proceeds from long-term borrowings Repayment of long-term borrowings Payment of lease liabilities Issuance of ordinary shares for cash Interest paid Changes in non controlling interests Surplus not paid due to overdue Net cash flows used in financing activities Effect of exchange rate changes on cash and cash equivalents Increase in cash and cash equivalents for the period Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period	For the six months ended June 30	For the six months ended June 30
	2021	2020
	$ 509,729 18,570 55 1,350 1,836 (1,365) (171) 26 - (20) 20,281 (10,468) (292,484) (8,582) (1,881) 1,615) (311,800) 5,429 5,633 56,266 12,906 1,288 2,834 84,356 (227,444) (207,163) 302,566 1,372 (182,419) 121,519 - - (5,030) 1,373 (5,526) 171 (9,012) - (5,625) (5,117) - (2,394) 7,905 5 (5,226) (122) 107,159 1,616,607 $ 1,723,766	538,805 16,545 55 32,047 932 (1,425) (170) 6 2,254 (380) 49,864 (1,446) (255,041) 1,818 (8,965) (4,841) (268,475) 16,255 (616) (95,446) (32,918) 750 (1,900) (113,875) (382,350) (332,486) 206,319 1,258 (30,736) 176,841 (1,100) 8,939 (14,175) 5,750 (1,186) 170 (1,602) 220,000 - (4,650) 530,000 (2,307) 5,349 - 748,392 242 923,873 741,899 1,665,772

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with the generally accepted auditing standards

MACHVISION INC. CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements For the six months ended June 30, 2021 and 2020 (Expressed in Thousands of New Taiwan Dollars)

(1) History and organization

MACHVISION INC. CO., LTD. (the Company) was incorporated in June 9, 1998 as a company limited by shares under the laws of (ROC). The address of the Company’s registered office is No. 2-3, Gongye East 2nd Road, Hsinchu Science Park, Hsinchu 30075, Taiwan, R.O.C. The consolidated entities in the consolidated financial statements dated June 30, 2021 include the Company and its subsidiaries (the Group). The Group is mainly engaged in the manufacturing and trading of optical inspection machinery equipment.

(2) Approval date and procedures of the consolidated financial statements

The consolidated financial statements were approved by the Board of Directors and published on Aug 3, 2021.

(3) New standards, amendments and interpretations adopted:

(a) The impact of the International Financial Reporting Standards (“IFRSs”) endorsed by the Financial Supervisory Commission, R.O.C. (“FSC”) which have already been adopted.

The Group has initially adopted the following new amendments, which do not have a significant impact on its consolidated financial statements, from January 1, 2021:

Amendments to IFRS 4 “Extension of the Temporary Exemption from Applying IFRS 9”
Amendments to IFRS 9, IAS39, IFRS7, IFRS 4 and IFRS 16 “Interest Rate Benchmark Reform
－ ” Phase 2

The Group has initially adopted the following new amendments, which do not have a significant impact on its consolidated financial statements, from April 1, 2021:

Amendments to IFRS 16 “Covid-19-Related Rent Concessions beyond 30 June 2021”
(b) The impact of IFRS issued by the FSC but not yet effective

The Group assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2022, would not have a significant impact on its consolidated financial statement:

Amendments to IAS 16 “Property, Plant and Equipment－Proceeds before Intended Use”
Amendments to IAS 37 “Onerous Contract－Cost of Fulfilling a Contract”
Annual Improvements to IFRS Standards 2018－2020
Amendments to IAS 3“Reference to the Conceptual Framework”

(Continued)

The following new and amended standards, which may be relevant to the Group, have been issued by the International Accounting Standards Board (IASB), but have yet to be endorsed by the FSC:

Standards or Interpretations		Content of amendment	Effective date perIASB
Amendments to IAS	1	The amendments aim to promote consistency in applying the	January 1, 2023
“Classification	of	requirements by helping companies determine whether, in the
Liabilities as Current	or	statement of balance sheet, debt and other liabilities with an
Non-current”		uncertain settlement date should be classified as current (due
		or potentially due to be settled within one year) or
		non-current.
		The amendments include clarifying the classification
		requirements for debt a company might settle by converting it
		into equity.

The Group is evaluating the impact of its initial adoption of the abovementioned standards or interpretations on its consolidated financial position and consolidated financial performance. The results thereof will be disclosed when the Group completes its evaluation.

The Group does not expect the other new and amended standards, which have yet to be endorsed by the FSC, to have a significant impact on its consolidated financial statements.

(4) Summary of significant accounting policies

Except as described below, the summary statement of the significant accounting policies for this consolidated financial report is the same as the consolidated financial report for 2020, please refer to the related information 2020 Consolidated Financial Statements Note 4.

(a) Statement of compliance

This consolidated financial report is prepared in line with the guidelines for the preparation of financial reports of issuers of securities (hereinafter referred to as "The Preparation of Guidelines") and the International Accounting Standards 34, about "Interim Financial Reports", which are approved and issued in force by the FSC. This consolidated financial report does not include all the necessary information to be disclosed in the entire annual consolidated financial report prepared in accordance with the international Financial Reporting Standards, International Accounting Standards, Interpretation and Interpretation notices (hereinafter referred to as the "International Financial Reporting Standards approved by the FSC"), which are approved and issued in force by the FSC.

(b) Basis of consolidation

(i) Principles of preparation of consolidated financial statements

The consolidated financial statements comprise the Company and its subsidiaries. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.

(Continued)

Intra-group balances and transactions, and any unrealized income and expenses arising from intra-group transactions are eliminated in preparing the consolidated financial statements.

(ii) List of subsidiaries included in the consolidated financial statements

The subsidiaries included in the consolidated financial statements are as follows:

Investor	Subsidiary	Nature of business	Percentage of ownership June 30, 2021 December 31, 2020 June 30, 2020	Percentage of ownership June 30, 2021 December 31, 2020 June 30, 2020	Percentage of ownership June 30, 2021 December 31, 2020 June 30, 2020	Notes
				December 31, 2020
The Company The Company The Company The Company The Company The Company The Company The Company The Company Machvision Inc. (Samoa) Machvision (Dongguan) Inc. Sigold Optics Inc.	Machvision Inc. (Samoa) Autovision Technology Inc. Sigold Optics Inc. ChipAI Co., LTD. RedPay Co., Ltd. MiM Tech. Inc. Machvision Korea Co., Ltd. Machvision Holding (Samoa) Limited Avountes Inc. Machvision (Dongguan) Inc. Dongguan muxin intelligent equipment Co., Ltd. SISSCA Co.,Ltd.	Investment Manufacturing of computer peripheral products Manufacturing of machinery equipment Manufacturing of computer peripheral products Manufacturing of computer peripheral products Manufacturing of computer peripheral products Maintaining and trading of machinery equipment Investment Electronic Information Supply Services Maintaining and trading of machinery equipment Maintaining and trading of machinery equipment Manufacturing of computer peripheral products	100.00% 45.00% 49.47% 90.00% - - 100.00% - 45.00% 100.00% 51.00% 70.00%	100.00% 45.00% 49.47% 90.00% 50.00% - 100.00% - 40.00% 100.00% 51.00% 70.00%	100.00% 45.00% 49.47% 90.00% 50.00% 40.98% 100.00% 100.00% - 100.00% 51.00% 70.00%	1 2 3 4 5&6

Note 1: The Company holds 45% of the ownership of Autovision Technology Inc. However, it remains to be a subsidiary since the Company retains control of its financial and operational policy decision.

Note 2: The Company holds 49.47% of the ownership of Sigold Optics Inc. However, it remains to be a subsidiary since the Company retains control of its financial and operational policy decision.

Note 3: The Company has disposed all the shares of its subsidiary in December 2020.

Note 4: The subsidiary was liquidated in September 2020.

Note 5: The Company holds 45% of the ownership of Avountes Inc. However, it remains to be a subsidiary since the Company retains control of its financial and operational policy decision.

Note 6: Integrating the Group's resources,lowering costs and improving work efficiency.RedPay has be merge by Avountes in stock swap way. Avountes will generally assume all rights and obligations of RedPay.The merger record date is March 5,2021 and the registration has been changed on April 15,2021.

Note 7: The subsidiaries are not significant subsidiaries, their financial statements have not been reviewed.

(Continued)

(c) Employee benefits

In the interim, the benefit scheme pension department uses the previous year's reporting date to determine the pension cost rate on an actuarial basis, based on the end of the reclassified period at the beginning of the year, and to adjust for major market fluctuations, major downsizing, liquidation or other major one-off matters.

(d) Income tax

The Group is measured and exposed for income tax expenses during the interim period in line with the paragraph B12 of interim financial report of the International Accounting Standards bulletin No. 34.

The income tax fee is in order to multiply the pre-tax net profit by the management during the reporting period by the best estimated street volume of the expected effective tax rate for the whole year, and is fully recognized as the current income tax fee.

The income tax fee, which is directly recognized as an equity item or other consolidated profit and loss item, is a temporary difference between the carrying amount of the relevant assets and liabilities for the purpose of reporting and its tax base, which is measured by the applicable tax rate at the time of expected realization or liquidation.

(5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty

Management shall, in accordance with the preparation criteria and the interim financial report of IAS34 as approved by the FSC, make judgments, estimates and assumptions in the preparation of the consolidated financial reports, which will have an impact on the adoption of accounting policies and the amount of assets, liabilities, benefits and expenses reported. Actual results may differ from estimates·

In the preparation of consolidated financial reports, the management adopts the uncertainty of significant judgment and estimation of the consolidation of corporate accounting policies, the main source of which is consistent with the consolidated Financial Report Note 5 of 2020.

(Continued)

(6) Explanation of significant accounts

(a) Cash and cash equivalents

Cash on hand Saving deposits Checking deposits Foreign currency deposits Time deposits Cash and cash equivalents per statements of cash flow	June 30, 2021	June 30, 2020 991 814,427 - 494,595 355,759
	$ 1,723,766 1,616,607	1,665,772

The expiry date of three months to a year on deposit satisfy the highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value, and are held for the purpose of meeting short term cash commitments rather than for investment or other purposes.

Please refer to note 6(s) for the interest rate risk and the fair value sensitivity analysis of the financial assets and liabilities of the Group.

(b) Notes, accounts and long-term accounts receivable

Notes receivable Accounts receivable Long-term accounts receivable Less: allowance for impairment unrealized interest income	June 30, 2021

The Group applies the simplified approach to provide for its expected credit losses, i.e. the use of lifetime expected credit loss provision for all receivables. To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due, as well as incorporated forward-looking information, including macroeconomic and relevant industry information. The expected credit losses were determined as follows:

Current

1 to 90 days past due 91 to 180 days past due 181 to 270 days past due 271 to 365 days past due Past due over 365 days

	June 30, 2021
Gross carrying amount $ 1,326,443 147,633 43,307 37,617 28,884 58,099	Weighted-average expected credit loss rate	Loss allowance provision 73 616 734 2,310 11,919 58,099
	0.0055% 0.4169% 1.6946% 6.1417% 41.2637% 100.000%
$ 1,641,983		73,751

December 31, 2020

Current

1 to 90 days past due 91 to 180 days past due 181 to 270 days past due 271 to 365 days past due Past due over 365 days

Current 1 to 90 days past due 91 to 180 days past due 181 to 270 days past due 271 to 365 days past due Past due over 365 days

Gross carrying amount $ 1,041,816 134,448 59,927 30,213 7,497 65,177	Weighted-average expected credit loss rate		Loss allowance provision 23 467 632 2,562 3,580 65,177
	0.0022% 0.3475% 1.0536% 8.4800% 47.7466% 100.000%
$ 1,339,078			72,441

	June 30, 2020
Gross carrying amount $ 1,323,572 153,124 39,007 43,706 62,260 6,507	Weighted-average expected credit loss rate	Loss allowance provision - 420 777 2,554 29,005 6,507
	0.0000% 0.2740% 1.9919% 5.8451% 46.5870% 100.000%
$ 1,628,176		39,263

The movement in the allowance for accounts receivable was as follows:

Balance at January 1 Impairment losses recognized Amounts written off Foreign exchange (losses) / gains Balance at June 30		For the six months ended June 30 2021 2020 72,441 7,421 1,350 32,047 - (85) (40) (120) 73,751 39,263	For the six months ended June 30 2021 2020 72,441 7,421 1,350 32,047 - (85) (40) (120) 73,751 39,263
		2021 72,441 1,350 - (40) 73,751
	$
	$

The aforementioned notes and accounts receivables of the Group had not been pledged as collateral.

The carrying amounts of notes and accounts receivable with short maturity are not discounted under the assumption that the carrying amount approximates the fair value.

(c) Inventories

The components of the Group's inventories were as follows:

Merchandise and finished goods Work in process Raw material	June 30, 2021		December 31, 2020 69,251 80,913 213,260	June 30, 2020 86,317 70,516 215,071 371,904
	$ 58,670 83,128 230,253 $ 372,051
			363,424

The Group inventories were not provided as pledged assets.

Except for operating costs arising from the ordinary sale of inventories, other gains and losses directly recorded under operating cost were as follows:

For the three months endedJune 30	For the three months endedJune 30	For the six months endedJune 30 2021 2020 11,366 4,304
2021 $ 4,474	2020	2021 11,366
	(495)

(d) Disposal of subsidiaries
1) Disposal of the shares of Machvision Holding (Samoa) and Guandong Greatsense Intelligent Equipment Co., Ltd.

On December 25, 2019, the Board of Directors of the Company had decided to dispose the entire 51% shares of Guandong Greatsense Intelligent Equipment Co., Ltd. held by Machvision Holding (Samoa) Limited for RMB6,600 thousand. The related equity transfer procedures had been completed on January 7, 2020. The receivables arising from the foregoing transactions have been collected, resulting in the investment loss on disposal of $2,254 thousand, recognized as other gains and losses.

The details of the book amount of assets and liabilities of Guandong Greatsense Intelligent Equipment Co., Ltd. on the disposition date are as follows:

Cash and cash equivalents Accounts receivable Inventory Prepayments and other current assets Property, plant and equipment Right-of-use assets Refundable deposits Current contract liabilities Accounts payable Other payables Lease liabilities Other current liabilities	$ 19,157 61,963 7,947 5,155 2,066 6,140 1,171 (11,208) (19,592) (1,640) (6,230) (4,682) $ 60,247

As a result of the abovementioned transactions, the Company liquidated Machvision Holding (Samoa) Limited in September 2020, resulting in the investment loss on disposal of $2,053 thousand, recognized as other gains and losses.

2) Disposal of the shares of MiM Tech. Inc.

On December 28, 2020, the Board of Directors of the Company had decided to dispose the entire 40.98% shares of MiM Tech. Inc. for $10,574 thousand. The receivables arising from the foregoing transactions have been collected, resulting in the investment gain on disposal of $227 thousand, recognized as other gains and losses.

The details of the book amount of assets and liabilities of MiM Tech. Inc. on the disposition date are as follows:

Cash and cash equivalents Accounts receivable Inventory Prepayments and other current assets Right-of-use assets Intangible assets Refundable deposits Other payables Lease liabilities Other current liabilities	$ 2,116 604 1,689 76 754 8,705 105 (530) (759) (48) $ 12,712

(e) Financial assets at fair value through profit or loss－non-current

Mandatorily measured at fair value through profit or loss: Unlisted stocks (domestic) Yayatech Co., Ltd. For Win Tech Co., Ltd.	June 30, 2021		December 31, 2020		June 30, 2020
	$ 9,644 1,100		9,644 1,100		9,644 1,100
	$ 10,744		10,744		10,744

(f) Property, plant and equipment

The cost, depreciation, and impairment of the property, plant and equipment of the Group were as follows:

Cost: Balance as of January 1, 2021 Additions Reclassfication Disposals Effect of movement in exchange rates Balance as of June 30, 2021 Balance as of January 1, 2020 Disposal of subsidiaries Additions Reclassfication Disposals Effect of movement in exchange rates Balance as of June 30, 2020 Depreciation and impairment losses: Balance as of January 1, 2021 Depreciation Disposals Effect of movement in exchange rates Balance as of June 30, 2021 Balance as of January 1, 2020 Disposal of subsidiaries Depreciation Disposals Effect of movement in exchange rates Balance as of June 30, 2020 Carrying amounts: January 1, 2021 June 30, 2021 January 1, 2020 June 30, 2020	Buildings and structures	Machinery and equipment	Other equipment	Construction inprogress
	$ 305,366 6,766 31,036 440 343,608
	$ 266,183 4,250 19,364 27,995 317,792 - - (2,488) - (2,488) 1,841 1,117 3,193 8,024 14,175 12,774 - - (13,174) (400) - (495) (201) - (696) (976) (1) (86) - (1,063)
	$ 279,822 4,871 19,782 22,845 327,320
	$ 57,416 1,778 8,839 - 68,033 8,987 745 2,885 - 12,617 - - (163) - (163) (60) (1) (6) - (67)
	$ 66,343 2,522 11,555 - 80,420
	$ 42,653 1,318 5,906 - 49,877 - - (422) - (422) 8,173 365 1,723 - 10,261 - (495) (195) - (690) (378) - (30) - (408)
	$ 50,448 1,188 6,982 - 58,618
	$ 247,766 4,487 18,193 834 271,280
	$ 239,023 4,244 19,481 440 263,188
	$ 223,530 2,932 13,458 27,995 267,915
	$ 229,374 3,683 12,800 22,845 268,702

(g) Right-of-use assets

The cost and depreciation of land, building and transportation equipment of the Group were as follows:

Land and buildings $ 73,924 93,951 (476) (156)	Other equipment 22,375 - (1,575) (64)	Total 96,299 93,951 (2,051) (220)
$ 167,243	20,736	187,979
$ 104,356 (7,557) 2,415 (24,414) (160)	15,253 - 4,482 (1,080) (80)	119,609 (7,557) 6,897 (25,494) (240)
$ 74,640	18,575	93,215
$ 8,471 2,885 (483) (61)	10,815 3,068 (854) (35)	19,286 5,953 (1,337) (96)
$ 10,812	12,994	23,806
$ 5,269 (1,417) 3,009 (737) (26)	5,395 - 3,275 (1,017) (19)	10,664 (1,417) 6,284 (1,754) (45)
$ 6,098	7,634	13,732
$ 65,453	11,560	77,013
$ 156,431	7,742	164,173
$ 99,087	9,858	108,945
$ 68,542	10,941	79,483

(h) Intangible assets

There were no significant additions, disposal or recognition and reversal of impairment losses of intangible assets for the six months ended June 30, 2021 and 2020. Information on amortization for the period is discussed in note 12(a). Please refer to note 6(h) of the 2020 annual consolidated financial statements for other related information.

(i) Lease liabilities

The Group's lease liabilities were as follow:

Current Non-current	June 30, 2021	December 31, 2020
	$ 15,983
	$ 149,756	66,286 68,912

For the maturity analysis, please refer to note 6(s).

The amounts recognized in profit or losses were as follows.

For the three months ended June 30 2021 2020 $ 442 283 $ 1,812 1,051 $ 193 51	For the three months ended June 30 2021 2020 $ 442 283 $ 1,812 1,051 $ 193 51	For the six months ended June 30 2021 2020 692 631 4,798 2,161 254 166	For the six months ended June 30 2021 2020 692 631 4,798 2,161 254 166
	2020 283

$ 1,812	1,051	4,798	2,161
$ 193	51	254	166

The amounts recognized in the statement of cash flows for the Group was as follows:

June 30, 2021	For the six months ended June 30 2021 2020 $ 11,419 8,983 December 31, 2020 June 30, 2020 13,442 12,875	For the six months ended June 30 2021 2020 $ 11,419 8,983 December 31, 2020 June 30, 2020 13,442 12,875
		2021 11,419 December 31, 2020
	$

$ 14,730		13,442

There were no significant changes in provisions of the Group for the six months ended June 30, 2021 and 2020, please refer to note 6 (j) of the consolidated financial report of 2020.

(k) Long-term borrowings

The Company obtained government project loans in 2020. The credit lines amount is $960,000 thousand. As of June 30, 2021, the operating working capital $220,000 thousand has been borrowed with the loan recognized and measured by the market rate. The differences between the market rate and the actual rate will be recognized as deferred revenue according to the government grants.

June 30, 2021	June 30, 2021	June 30, 2021
Currency Interest rate Due year			Amount
NTD 1.05~1.1 2021-2027 December 31, 2020			$ 214,375 2,973 $ 211,402 $ 24,167 187,235 $ 211,402
Currency Interest rate Due year			Amount
NTD 1.1 2021-2027 June 30, 2020			$ 220,000 3,590 $ 216,410 $ 16,875 199,535 $ 216,410
Currency Interest rate Due year			Amount
		2020-2027 December 31, 2020

	$ 2,973 3,590 4,118

(l) Employee benefits

(ii) Defined benefit plans

Management believes that there was no material volatility of the market, no material reimbursement and settlement or other material one time events since prior fiscal year. As a result, the pension cost in the accompanying interim period was measured and disclosed according to the actuarial report as of December 31, 2020 and 2019.

The expenses recognized in profit or loss for the Group were as follows:

	For the three months ended June 30	For the six months ended June 30 2021 2020 11 12 20 18	For the six months ended June 30 2021 2020 11 12 20 18
	2020	2021 11 20
	6 9
$ 15	15	31	30

(iii) Defined contribution plans

The Group’s expenses under the pension plan cost to the Bureau of Labor Insurance were as follows:

	For the three months ended June 30	For the six months ended June 30 2021 2020 2,942 2,351 5,723 4,469	For the six months ended June 30 2021 2020 2,942 2,351 5,723 4,469
	2020	2021 2,942 5,723
	878 2,164
$ 4,424	3,042	8,665	6,820

(m) Income tax

The income tax expense is estimated by the profit before tax in the interim financial period multiplied by the best estimated effective interest rate of the whole year of the management.

The Group’s income tax expense is as follows:

	For the three months ended June 30	For the six months ended June 30 2021 2020 100,858 107,750 9,780 (2,924)	For the six months ended June 30 2021 2020 100,858 107,750 9,780 (2,924)
	2020	2021 100,858 9,780
	52,078 (2,924)
$ 58,589	49,154	110,638	104,826

The tax authorities have examined income tax returns of the Company through 2019.

(n) Capital and other equity

Except for the following terms, there is no significant change in capital and other rights for the group for the six months ended June 30, 2021 and 2020. The relevant liability is referred to in note 6 (n) of the consolidated financial report of 2020.

(ii) Ordinary shares

Dividends distributed by capital surplus please refer to the following retained earings.

(iii) Retained earnings

On July 20, 2021 and May 29, 2020, the shareholder's meetings resolved to distribute the 2018 and 2019 earnings. These earnings were appropriated as follows:

Legal reserve Special reserve	2020		2019
	$ 65,924		85,173
	$ (1,029)		1,586

Cash dividends distributed by capital surplus and earnings distribution were as follows:

For the six months eneded June 30,2020 Date resolved by Board of Directors July31,2020 Dividends distributed to common stockholders Cash-Retained earings $ 134,185 Cash-Capital surplus - Total $ 134,185 Dividend rate $ 3.00 Date resolved by Board of Directors Dividends distributed to common stockholders Cash-Retained earings Dividend rate		For the six months eneded June 30,2020		For the six months eneded December 31,2020	Total
		July31,2020		February3,2021 - 402,554 402,554 9.00 2019 March 27,2020 $ 447,282 $ 10.00	134,185 402,554 536,739

(o) Earnings per share

The calculation of the Company's basic and diluted earnings per is as follows:

(i) Basic earnings per share

		For the six months endedJune 30 2021 2020 403,979 431,746	For the six months endedJune 30 2021 2020 403,979 431,746
		2021 403,979
44,728	43,726	44,728	43,167
$ 4.22	4.71	9.03	10.00

(ii) Diluted earnings per share

		For the six months endedJune 30 2021 2020 403,979 431,746	For the six months endedJune 30 2021 2020 403,979 431,746
		2021 403,979
44,728 165	43,726 134	44,728 213	43,167 182
44,893	43,860	44,941	43,349
$ 4.21	4.70	8.99	9.96

(p) Revenue from Contracts with Customers
(i) Disaggregation of revenue

For the three months ended June	For the three months ended June	30, 2021 Total 184,666 498,885 31,809
Taiwan $ 184,666 372,143 31,809	China - 126,742 -
$ 588,618	126,742	715,360
$ 573,805 14,813	108,527 18,215	682,332 33,028
$ 588,618	126,742	715,360

For the three months ended June 30, 2020

Taiwan $ 52,126 478,544 61,076	China	Total 52,126 563,916 61,076
	- 85,372 -
$ 591,746	85,372	677,118
$ 579,978 11,768	68,497 16,875	648,475 28,643
$ 591,746	85,372	677,118

For the six months ended June 30, 2021

Taiwan $ 410,790 751,247 48,435	China	Total 410,790 944,768 48,435 1,403,993 1,343,312 60,681
	- 193,521 -
$ 1,210,472	193,521
$ 1,183,568 26,904	159,744 33,777
$ 1,210,472	193,521	1,403,993

For the six months ended June 30, 2020 Taiwan China Total $ 157,158 - 157,158 964,903 146,014 1,110,917 95,274 - 95,274	For the six months ended June 30, 2020 Taiwan China Total $ 157,158 - 157,158 964,903 146,014 1,110,917 95,274 - 95,274	For the six months ended June 30, 2020 Taiwan China Total $ 157,158 - 157,158 964,903 146,014 1,110,917 95,274 - 95,274
Taiwan $ 157,158 964,903 95,274	China
	- 146,014 -
$ 1,217,335	146,014	1,363,349
$ 1,194,483 22,852	120,499 25,515	1,314,982 48,367
$ 1,217,335	146,014	1,363,349

(ii) Contract Balance

Notes receivable Accounts receivable Long-term accounts receivable Less: allowance loss Contract liabilities--advance receipts	June 30, 2021	June 30, 2020 15,155 1,431,303 181,718 39,263 1,588,913 18,641
	$ 1,568,232 1,266,637
	$ 37,314 31,885

Please refer to note 6(b) for the details on accounts receivables and allowance for impairments.

The contract liability is mainly due to advance receipts, wherein the Company will recognize revenue when the product is delivered to the customer. The amount of revenue recognized for the six months ended June 30, 2021 and 2020 that were included in the contract liability balance at the beginning of the period were $31,884 thousand and $2,386 thousand, respectively.

(q) Remuneration to employees and directors

In accordance with the Company's Articles, the profit for the year should be reserved to offset the deficit, then, should contribute no less than 5% of the profit as employee remuneration, and less than 3% as directors' remuneration.

The remunerations to employees amounted to $20,556 thousand, $16,091 thousand, $42,755 thousand, and $41,711 thousand, respectively, for the three-month period ended June 30, 2021 and 2020, and for the six-month period ended June 30, 2021 and 2020. The remunerations to directors amounted to $3,246 thousand, $732 thousand, $6,751 thousand, and $5,214 thousand, respectively, for the three-month period ended June 30, 2021 and 2020, and for the six-month period ended June 30, 2021 and 2020. These amounts were calculated using the Company's net income before tax without the remunerations to employees and directors for each period, multiplied by the proposed percentage which is stated under the Company's proposed Article of Incorporation. These remunerations were expensed under operating costs or expenses for each period. If there are any subsequent adjustments to the actual remuneration amounts after the annual shareholder’ meeting, the adjustment will be regarded as changes in accounting estimates and will be reflected in profit or loss in the following year.

In 2020 and 2018, the amount of employee remuneration is NT$67,278 thousand and NT$97,368 thousand, respectively, and that of directors and supervisors is NT$10,623 thousand and NT$17,931 thousand, respectively. There is no difference from the distribution of board resolutions. The information is available on the Market Observation Post System website.

(r) Non-operating income and expenses

(i) Interest income

rest income
Bank deposits Others Total		For the three months ended June 30		For the six months ended June 30 2021 2020 1,372 1,239 (7) 186
			2020	2021 1,372 (7)
			591 11
	$ 784		602	1,365	1,425

(ii) Other income

er income
Dividends Others Total		For the three months ended June 30		For the six months ended June 30 2021 2020 171 170 2,256 977
			2020	2021 171 2,256
			170 723
	$ 1,546		893	2,427	1,147

(iii) Other gains and losses

	For the three months ended June 30	For the three months ended June 30	For the six months ended June 30	For the six months ended June 30
	2021	2020	2021	2020
$ (7) - 9 (25,541) (5,501)		(5) 26 380 (32,485) (31)	(26) - 20 (29,051) (5,613)	(6) (2,254) 380 (25,431) (49) (27,360)
$ (31,040)		(32,115)	(34,670)

(iv) Finance costs

Interest expenses		For the three months ended June 30	For the three months ended June 30		For the six months ended June 30	For the six months ended June 30
		2021 $ 1,022	2020		2021 1,836	2020
			584			932

(s) Financial Instruments

Except for the following, there is no significant change in the fair value of the financial instruments and the exposure to credit risks and market risks due to financial instruments. Please refer to note 6 (s) of the consolidated financial report of 2020.

1.Credit risk

The credit receivable account of the credit risk Group in June 30, 2021, December 31, 2020 and June 30, 2020 was concentrated on single customers, accounting for 26%, 26% and 25% of the receivable and accounts receivable (including long-term receivables) respectively.

2.Liquidity risk

The following table shows the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements.

June 30, 2021 Non-derivative financial liabilities Long-term borrowings(including deferred revenue) Notes payable Accounts payable Other payables Dividend payable Lease liabilities (Current and non-current)	Carrying Amount	Contractual cash flows	Within 1 year 25,280 5,849 301,799 332,070 402,554 15,987	1-5years	1-5years
	$ 214,375 5,849 301,799 332,070 402,554 165,739	218,017 5,849 301,799 332,070 402,554 198,318
	$ 1,422,386	1,458,607	1,083,539	210,412	164,656

Carrying Amount	Contractual cash flows	Within 1 year 18,161 216 245,897 319,164 12,039	1-5years 171,731 - - - 20,636	Over 5years 34,513 - - - 64,702
$ 220,000 216 245,897 319,164 78,325	224,405 216 245,897 319,164 97,377 887,059 225,065 377 266,429 385,542 447,282 100,197
$ 863,602		595,477	192,367	99,215
$ 220,000 377 266,429 385,542 447,282 80,633		6,942 377 266,429 385,542 447,282 11,721	169,733 - - - - 24,625	48,390 - - - - 63,851
$ 1,400,263	1,424,892	1,118,293	194,358	112,241

The Group is not expecting the cash flows included in the maturity analysis could occur significantly earlier or at significantly different amounts.

3.Market risk

(1) Currency risk

The Group’s significant exposure to foreign currency risk was as follows:

June 30, 2021 Financial Assets Monetary items USD CNY Financial liabilities Monetary items USD CNY December 31, 2020 Financial Assets Monetary items USD CNY Financial liabilities Monetary items USD CNY	Foreign currency $ 35,728 $ 104,855 $ 1,686 $ 14,107 $ 31,338 $ 105,130 $ 1,774 $ 13,093	Exchange rate 27.8600 4.3090 27.8600 4.3090 28.4800 4.3770 28.4800 4.3770	NTD 995,383 451,820 46,968 60,788 892,516 460,153 50,516 57,307

June 30, 2020 Financial Assets Monetary items USD CNY Financial liabilities Monetary items USD CNY	Foreign currency $ 55,175 $ 93,627 $ 2,006 $ 11,297	Exchange rate 29.568 4.1810 29.568 4.1810	NTD 1,631,417 391,456 59,306 47,231

The exchange rate risk of a Group is mainly derived from foreign currency denominated cash and cash equivalents, receivables and payables and so on, which will generate foreign currency exchange gains and losses in conversion. On June 30, 2021 and 2020 when the NT dollar depreciated or appreciated by 3% compared to the US dollar and CNY exchange rate, and all other factors remained unchanged; the net profit after tax will increase or decrease by $32,147 thousand and $45,992 thousand respectively for the six months ended June 30, 2021 and 2020.

Due to the wide variety of trading currencies of Group, the exchange and profit and loss information of monetary items was disclosed by collecting and consolidation methods. The net loss (including realized and unrealized) of foreign currency exchange for the three months ended June 30, 2021 and 2020, and for the six months ended June 30, 2021 and 2020 were $25,541 thousand, $32,485 thousand, $29,051 thousand and $25,431 thousand, respectively.

(2) Interest rate risk

Please refer to the notes on liquidity risk management and interest rate exposure of the Group's financial assets and liabilities.

The following sensitivity analysis is determined by the interest rate storm risk of derivative and non-derivative instruments in the reporting day. For floating rate liabilities, the way of analysis is to assume that the amount of debt in circulation outside the reporting day is in circulation throughout the year. The rate of change used to report interest rates to key management within the Group is an increase or loss of 1% per cent in interest rates, which also represents an assessment by management of the extent to which interest rates may vary reasonably.

If interest rate had increased or decreased by 1%, in the event that all other variables remain unchanged, the Group of tax net profit will increase or decrease $7,511 thousand and $7,224 thousand, respectively for the six months ended June 30, 2021 and 2020, respectively, with all other variable factors remain constant. This is mainly due from the Group’s cash in bank and borrowing on variable rates.

4.Fair value

(1) Categories and fair value of financial instruments

The carrying amount and fair value of the Group’s financial assets and liabilities, including the information on fair value hierarchy were as follows; however, except as described in the following paragraphs, for financial instruments not measured at fair value whose carrying amount is reasonably close to the fair value, and lease liabilities, disclosure of fair value information is not required:

	June 30, 2021	June 30, 2021	June 30, 2021	Total 10,744
Carrying amounts $ 10,744		Fair value
	Level 1 -	Level 2 -	Level 3 10,744
1,723,766 1,568,232 10,499 21,822	- - - -	- - - -	- - - -	- - - -
3,324,319	-	-	-	-
$ 3,335,063	-	-	10,744	10,744
$ 214,375 5,849 301,799 332,070 402,554 165,739	- - - - - -	- - - - - -	- - - - - -	- - - - - -
$ 1,422,386	-	-	-	-

	December 31, 2020	December 31, 2020	December 31, 2020
Carrying amounts $ 10,744		Fair value		Total 10,744
	Level 1 -	Level 2 -	Level 3 10,744
1,616,607 1,266,637 11,872 16,296	- - - -	- - - -	- - - -	- - - -
2,911,412	-	-	-	-
$ 2,922,156	-	-	10,744	10,744
$ 220,000 216 245,897 319,164 78,325	- - - - -	- - - - -	- - - - -	- - - - -
$ 863,602	-	-	-	-
	June 30, 2020
Carrying amounts $ 10,744		Fair value		Total 10,744
	Level 1 -	Level 2 -	Level 3 10,744
1,665,772 1,588,913 10,886 8,987	- - - -	- - - -	- - - -	- - - -
3,274,558	-	-	-	-
$ 3,285,302	-	-	10,744	10,744
$ 220,000 377 266,429 385,542 447,282 80,633	- - - - - -	- - - - - -	- - - - - -	- - - - - -
$ 1,400,263	-	-	-	-

(2) Valuation techniques for financial instruments measured at fair value – non-derivative financial instruments

A financial instrument is regarded as being quoted in an active market if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency and those prices represent actual and regularly occurring market transactions on an arm’s-length basis. Whether transactions are taking place “regularly” is a matter of judgment and depends on the facts and circumstances of the market for the instrument.

Quoted market price may not be indicative of the fair value of an instrument if the activity in the market is infrequent, the market is not well-established, only small volumes are traded, or bid-ask spreads are very wide. Determining whether a market is active involves judgment.

If the financial instruments have no quoted market price in an active market, the Group shall use the market comparison approach to evaluate the fair value. The main assumption used in computing the market price is based on the investee’s equity and the quoted price from a competitor. The estimated price has been discounted due to the lack of liquidity in the price of securities.

(3) Fair value hierarchy

The Group uses observable market inputs for measuring its assets and liabilities as much as possible. The fair value levels are classified as follows according to the input values for the assessment:

A. Level 1: Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities
B. Level 2: Inputs are inputs other than quoted prices included within Level 1 that are observable for an asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
C. Level 3: Inputs are unobservable inputs for an asset or liability.
No transfers between the Group’s fair value levels.

(4) Reconciliation of leve3 fair values

Reconciliation of leve3 fair values
Balance at June 30, 2021 (Balance at January 1,2021) Balance at January 1, 2020 Purchase Balance at June 30, 20210	Unquoted equity instruments $ 10,744
	$ 9,644 1,100
	$ 10,744

(5) Quantitative information of significant unobservable inputs (Level 3) through fair value

Item Financial assets at fair value through profit or loss – investment of equity instruments without active market	Valuation technique Guideline publicly traded company method	Significant unobservable inputs P/B multiplier (June 30, 2021, December 31, 2020 and June 30, 2020 were 2.44~2.76, 2.44~2.76 and 2.6 respectively) P/E multiplier (June 30, 2021, December 31, 2020 and June 30, 2020 were 19.84~37.81, 19.84~37.81 and 11.77 respectively) Discount for Lack of Market ability (June 30, 2021, December 31, 2020 and June 30, 2021 were 30%)	Relation between significant unobservable inputs and fair value
			Higher P/B multiplier and P/E multiplier will cause an increase in the fair value Higher discount for Lack of Market ability will cause a decrease in fair value.

(6) Fair value measurements in Level 3- sensitivity analysis of reasonably possible alternative assumptions
The Group’s measurement on the fair of financial instruments is deemed reasonable despite different valuation models or assumptions may lead to different results. For fair value measurements in Level 3, changing one or more of the assumptions would have the following effects on profit or loss and other comprehensive income:

June 30, 2021 Financial assets at fair value through profit or loss Equity investments without an active market December 31, 2020 Financial assets at fair value through profit or loss Equity investments without an active market June 30, 2020 Financial assets at fair value through profit or loss Equity investments without an active market	Input	Assumptions	Other comprehensive income Favorable Unfavorable
	Market illiquidity discount rate Market illiquidity discount rate Market illiquidity discount rate	10`％` 10`％` 10`％`	4,664 (4,664) 4,664 (4,664) 4,074 (4,074)

The favorable and unfavorable effects represent the change in fair value, and the fair value is based on a variety of un-observable inputs calculated using a valuation technique.

(Continued)

(t) Financial risk management

Consolidation of corporate financial risk management objectives and policies there were no significant changes in the disclosure of Notes 6 (t) to the 2020 consolidated financial report.

(u) Capital management

The Group’s capital management objectives, policies and procedures are consistent with those revealed in the 2020 consolidated financial report. For further information, please refer to note 6 (u) of the consolidated financial report of 2020.

The Group's debt-to-adjusted-capital ratio at the end of the reporting period was as follows:

Liabilities Less: cash and cash equivalents Net liabilities Total equity Debt-to-capital ratio	June 30, 2021	December 31, 2020 $ 1,101,557 1,616,607 $ (515,050) $ 2,607,730 - %	June 30, 2021
	$ 1,598,111 1,723,766 $ (125,655) $ 2,611,989 - %		$ 1,561,871 1,665,772 $ (103,901) $ 2,534,558 - %

As of June 30, 2021, there was no change in the Group's approach of capital management.

(v) Reconciliation of liabilities arising from financing activities

The Group’s liability adjustment associated with financing activities for the six months ended June 30, 2021 were as follows:

January 1, 2021	Cash flows (5,625) (6,367)	Lease Modification	Non-cash adjustments	Non-cash adjustments	Non-cash adjustments	June 30, 2021 214,375 165,739
			Disposal of Subsidiary Foreign exchange movement Interest expenses - - - - (128) 692 - (128) 692 Non-cash adjustments	Foreign exchange movement - (128)	Interest expenses
$ 220,000 78,325		- (734)			- 692
$ 298,325	(11,992)	(734)		(128)	692	380,114
January 1, 2020	Cash flows 200,000 (6,656)	Lease Modification				June 30, 2020 200,000 80,633
			Disposal of Subsidiary - (6,230) (6,230)	Foreign exchange movement - (199)	Interest expenses - 631
$ - 110,310		- (24,120)
$ 110,310	213,344	(24,120)		(199)	631	300,633

(Continued)

(7) Related-party Transactions

Compensation of key management personnel:

	For the three months endedJune 30	For the six months endedJune 30	For the six months endedJune 30
	2020	2021 25,078 162	2020
	8,628 81		23,349 162
$ 11,080	8,709	25,240	23,511

(8) Pledge assets

The book value of pledged assets was as follows:

Pledged assets Other non-current assets: Time deposits Time deposits Time deposits Time deposits	Object asset Guarantee for customs Guarantee for the Hsinchu Science Park Bureau Guarantee for Sales agreement Guarantee for Project	June 30, 2021 $ 1,513 10,001 2,811 7,497	December 31, 2020		June 30, 2020 1,511 4,460 3,016 - 8,987
			1,511 4,478 2,810 7,497 16,296
		$ 21,822

(9) Commitments and contingencies: None

(10) Losses due to major disasters: None.

(11) Subsequent events: None

(12) Others

(a) The following is a summary statement of employee benefits, depreciation and amortization expensed by function:

Function Item	For the three months ended June 30 2021	For the three months ended June 30 2021	For the three months ended June 30 2021	For the three months ended June 30 2020	For the three months ended June 30 2020	For the three months ended June 30 2020
	Operating costs	Operating expense	Total	Operating costs	Operating expense	Total
Employee benefits Salaries	29,310	87,439	116,749	22,942	56,891	79,833
Labor and health insurance	2,369	5,099	7,468	2,177	4,358	6,535
Pension	1,555	2,884	4,439	884	2,173	3,057
Directors' remuneration	-	3,252	3,252	-	798	798
Other employee benefits	3,020	5,823	8,843	1,213	5,232	6,445
Depreciation	2,674	6,848	9,522	3,489	4,934	8,423
Amortization	-	27	27	-	27	27

(Continued)

Function Item	For the six months ended June 30 2021	For the six months ended June 30 2021	For the six months ended June 30 2021	For the six months ended June 30 2020	For the six months ended June 30 2020	For the six months ended June 30 2020
	Operating costs	Operating expense	Total	Operating costs	Operating expense	Total
Employee benefits Salaries	58,894	177,231	236,125	50,980	130,886	181,866
Labor and health insurance	4,745	10,502	15,247	4,576	8,344	12,920
Pension	2,953	5,743	8,696	2,363	4,487	6,850
Directors' remuneration	-	6,798	6,798	-	5,499	5,499
Other employee benefits	6,198	12,787	18,985	5,867	13,600	19,467
Depreciation	5,490	13,080	18,570	6,895	9,650	16,545
Amortization	-	55	55	-	55	55

(b) Seasonal of operations:

The operation of the Group is not affected by seasonal or cyclical factors.

(13) Other Disclosure

(a) Information on significant transactions:

The following is the information on significant transactions required by the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” for the Group:

Loans to other parties: None.
Guarantees and endorsements for other parties: None.
Securities held as of June 30,2021 (excluding investment in subsidiaries, associates and joint ventures):

					(Amounts in Thousands of New Taiwan Dollar)	(Amounts in Thousands of New Taiwan Dollar)	(Amounts in Thousands of New Taiwan Dollar)	(Amounts in Thousands of New Taiwan Dollar)
Company holding securities	Security type and name	Relationship with the Company	Account	Shares (in thousands)	June 30, 2021			Notes
					Carrying value	Percentage of ownership (%)	Market value
The Company	Yayatech Co. Ltd.	-	Financial assets at fair value through profit or loss	884,000	9,644	5 %	9,644
SISSCA Co.,Ltd.	FOR WIN TECH CO., LTD.	-	Financial assets at fair value through profit or loss	110,000	1,100	10 %	1,100

Individual securities acquired of disposed of with accumulated amount exceeding the lower of NT$300 million or 20% of the capital stock : None.
Acquisitions of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: None.
Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: None.
Related-party transaction for purchases and sales with amounts exceeding the lower of NT$300 million or 20% of the capital stock:
Receivable from related parties with amounts exceeding the lower of NT$100 million or 20% of the capital:

Company Name	Related Party	Nature of relationships	Balance as June 30, 2021	Turnover rate	Overdue	Overdue	Amount Received in Subsequent	Allowance for Impairment Loss
					Amount	Action Taken
The Company	Machvision (Dongguan) Inc.	Subsidiaries	408,189	0.59	122,757	Depends on the end customer's creditperiod	- (As of Aug 3, 2021)	-

(Continued)

Trading in derivative instruments: None.
Business relationships and significant intercompany transactions:

No. Note 1	Name of company	Name of counterparty	Existing relationship with the counter-party		Transaction details	Transaction details	Transaction details
				Account name	Amount	Trading terms	Percentage of the total consolidated revenue or total assets
0	The Company	Machvision (Dongguan) Inc.	1	Operating revenue	120,801	Depends on the Group overall profit allocation	8.60%
0	The Company	Machvision (Dongguan) Inc.	1	Accounts receivable – related parties (including long-term accounts receivable)	408,189	Depends on the Group overall profit allocation	9.70%
0	The Company	Machvision (Dongguan) Inc.	1	Other payables – related parties	66,048	Dependent on capital budgeting	1.57%

Note 1: Company numbering is as follows:

(1) Parent company is 0.
(2) Subsidiary starts from 1.

Note 2: The number of the relationship with the transaction counterparty represents the following:

(1) 1 represents downstream transactions.
(2) 2 represents upstream transaction.

Note 3: For balance sheet items, over 1% of total consolidated assets, and for profit or loss items, over 1% total consolidated revenue were selected for disclosure.

(b) Information On Investees:

The following is the information on investees for the six months ended June 30, 2021 (excluding

information on investees in China):

Name of Investor	Name of investee	Address	Scope of business	Original Cost	Original Cost	Ending balance	Ending balance	Ending balance	Net Income of Investee	Investment income (Losses) (Note 3)	Note
				June 30, 2021	December 31, 2020	Shares	Percentage of ownership	Book value
The Company	Machvision Inc.	Samoa	Investment	105,433	105,433	3,463,650	100.00%	(39,023)	(28,354)	(28,354)	1,2
The Company	Autovision Technology Inc.	Taiwan	Manufacturing of computer peripheral products	9,000	9,000	900,000	45.00%	10,703	381	172	2
The Company	Sigold Optics Inc.	Taiwan	Manufacturing of machinery equipment	49,470	49,470	6,316,330	49.47%	68,442	2,303	1,139	2
The Company	Machvision Korea Co., Ltd.	Korea	Maintaining and trading of machinery equipment	21,542	21,542	10,000	100.00%	7,302	(458)	(458)	2
The Company	ChipAI Co., LTD.	Taiwan	Manufacturing of computer peripheral products	18,000	18,000	1,800,000	90.00%	5,393	(2,505)	(2,255)	2
The Company	RedPay Co., Ltd.	Taiwan	Electronic Information supply Services	-	10,000	-	- %	-	(223)	(111)	2
The Company	Avountes Inc.	Taiwan	Electronic Information supply Services	8,962	5,714	900,000	45.00%	6,453	(9,989)	(4,447)	2
Sigold Optics Inc.	SISSCA Co.,Ltd.	Taiwan	Manufacturing of computer peripheral products	7,700	7,700	770,000	70.00%	3,697	(3,058)	(2,141)	2

Note 1: The company is a limited company.

Note 2: The transactions within the Group were eliminated in the consolidated financial statements.

Note 3: The investment income was recognized under the equity method and based on the financial statements audited by the auditor of the Company.

(Continued)

(c) Information on investments in China
(i) The names of investees in Mainland China, the main businesses and products, and other information:

(c) Information on investments in China (i) The names of investees in Mainland China, the main businesses and products, and other information:	(c) Information on investments in China (i) The names of investees in Mainland China, the main businesses and products, and other information:	(c) Information on investments in China (i) The names of investees in Mainland China, the main businesses and products, and other information:	(c) Information on investments in China (i) The names of investees in Mainland China, the main businesses and products, and other information:	(c) Information on investments in China (i) The names of investees in Mainland China, the main businesses and products, and other information:	(c) Information on investments in China (i) The names of investees in Mainland China, the main businesses and products, and other information:	(c) Information on investments in China (i) The names of investees in Mainland China, the main businesses and products, and other information:	(c) Information on investments in China (i) The names of investees in Mainland China, the main businesses and products, and other information:	(c) Information on investments in China (i) The names of investees in Mainland China, the main businesses and products, and other information:	(c) Information on investments in China (i) The names of investees in Mainland China, the main businesses and products, and other information:	(c) Information on investments in China (i) The names of investees in Mainland China, the main businesses and products, and other information:	(c) Information on investments in China (i) The names of investees in Mainland China, the main businesses and products, and other information:	(c) Information on investments in China (i) The names of investees in Mainland China, the main businesses and products, and other information:
Units: NT$thousand
Name of investment in China	Major operations	Issued capital	Method of Investment (Note 1)	Beginning remittance balance – cumulative investment (amount) from Taiwan	Current remittance / receivable investment (amount)		Ending remittance balance - cumulative investment (amount) from Taiwan	Net income of investee	Direct / indirect shareholdings or investments (%) in the Company	Current investment gains and losses (Note 3)	Book value (Note 2)	Remittance of investment income in current period
					Invested amount	Returned amount
Machvision (Dongguan) Inc.	Maintaining and trading of machinery equipment	105,361	(2)i	105,361	-	-	105,361	(28,354)	100%	(28,354)	(30,749)	-
Dongguan muxin intelligent equipment Co.,Ltd	Maintaining and trading of machinery equipment	4,220	(4)i	-	-	-	-	1,141	51%	582	1,550	-

Note 1: The method of investment is divided into the following four categories:
(1) Remittance from third region companies to invest in Mainland China.
(2) Through the establishment of third region companies then investing in Mainland China.
- i. Through the establishment of Machvision Inc. then investing in Mainland China.
(3) Through transferring the investment to third region existing companies then investing in Mainland China.
(4) Other methods: EX: delegated investments.
- i. Through the establishment of Machvision (Dongguan) Inc. then investing in Mainland China.
Note 2: The transactions within the Group were eliminated in the consolidated financial statements.
Note 3: The recognition of investment gains and losses in this period is based on the same period that the invested company prepares its own financial reports that have not been approved by the accountant, and the evaluation of the rights and interest’s method is adopted.

(ii) Limitation on investment in China:

Company Name	Accumulated investment amount in Mainland China as of End of the Period	Investment (amount) approved by Investment Commission, Ministry of Economic Affairs	Maximum investment amount set by Investment Commission, Ministry of Economic Affairs
The Company	105,361	105,361	1,511,974 (Note 1)

Note 1: It represents 60% of the Company's net equity.

(iii) Significant transactions:

Please refer to details in the “Relationships between Parent Company and Subsidiaries and Significant Transactions” for the significant transactions directly or indirectly related to the investment in China for the six months ended June 30, 2021.

(d) Information of major shareholders: None.

(Continued)

(14) Segment Information

The Corporation’s business operations are focused in a single industry, mainly in the manufacturing, sales and testing of optical inspection machines and equipment. The end use of the Corporation’s products are similar. The operational decision makers evaluate the Corporation’s overall performance and allocate resources for the Corporation’s overall business operations. Hence, there is only one reportable segment for the Corporation.

The Group’s reportable segments and adjustments were as follows:

Taiwan $ 588,618 98,915	China 126,742 8,511	Adjustment and Elimination - (107,426)	Total 715,360 -
$ 687,533	135,253	(107,426)	715,360
$ 282,861	(8,571)	-	274,290
$ 591,746 89,729	85,372 -	- (89,729)	677,118 -
$ 681,475	85,372	(89,729)	677,118
$ 302,221	(15,554)	-	286,667
Taiwan $ 1,210,472 159,429	China 193,521 12,044	Adjustment and Elimination - (171,473)	Total 1,403,993 -
$ 1,369,901	205,565	(171,473)	1,403,993
$ 570,576	(28,133)	-	542,443
$ 1,217,335 152,366	146,014 -	- (152,366)	1,363,349 -
$ 1,369,701	146,014	(152,366)	1,363,349
$ 584,367	(19,842)	-	564,525

For the three months ended June 30, 2021 and 2020 and the six months ended June 30, 2021 and 2020, the total revenue of the reportable segment should exclude the inter-segment revenue of $107,426 thousand, $89,729 thousand, $171,473 thousand and $152,366 thousand, respectively.

AI assistant

MACHVISION — Interim / Quarterly Report 2021

52345_rns_2021-12-06_8308b7da-3793-4abf-96be-de89c827a830.pdf

MACHVISION INC. CO., LTD. AND SUBSIDIARIES

Consolidated Financial Statements

Table of contents

Independent Auditors’ Review Report

Introduction

Scope of Review

Basis for Qualified Conclusion

Qualified Conclusion

KPMG

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with the generally accepted auditing standards as of June 30, 2021 and 2020 MACHVISION INC. CO., LTD. AND SUBSIDIARIES

Consolidated Balance Sheets

June 30, 2021 December 31, 2020 and June 30, 2020

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with the generally accepted auditing standards MACHVISION INC. CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the three months and six months ended June 30, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars, Except for Earning Per Common Share)

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with the generally accepted auditing standards MACHVISION INC. CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Changes in Equity For the six ended June 30, 2021 and 2020

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with the generally accepted auditing standards MACHVISION INC. CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Cash Flows For the six months ended June 30, 2021 and 2020

MACHVISION INC. CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements For the six months ended June 30, 2021 and 2020 (Expressed in Thousands of New Taiwan Dollars)

(1) History and organization

(2) Approval date and procedures of the consolidated financial statements

(3) New standards, amendments and interpretations adopted:

(4) Summary of significant accounting policies

(a) Statement of compliance

(b) Basis of consolidation

(i) Principles of preparation of consolidated financial statements

(c) Employee benefits

(d) Income tax

(5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty

(6) Explanation of significant accounts

Current

December 31, 2020

Current

(c) Inventories

(f) Property, plant and equipment

(g) Right-of-use assets

(h) Intangible assets

(i) Lease liabilities

(k) Long-term borrowings

(l) Employee benefits

(n) Capital and other equity

(ii) Ordinary shares

(iii) Retained earnings

(o) Earnings per share

(i) Basic earnings per share

(ii) Diluted earnings per share

For the six months ended June 30, 2021

(ii) Contract Balance

(q) Remuneration to employees and directors

(r) Non-operating income and expenses

(iv) Finance costs

1.Credit risk

2.Liquidity risk

3.Market risk

(1) Currency risk

(2) Interest rate risk

4.Fair value

(1) Categories and fair value of financial instruments

(t) Financial risk management

(u) Capital management

(v) Reconciliation of liabilities arising from financing activities

(7) Related-party Transactions

(8) Pledge assets

(9) Commitments and contingencies: None

(10) Losses due to major disasters: None.

(11) Subsequent events: None

(12) Others

(b) Seasonal of operations:

(13) Other Disclosure

(a) Information on significant transactions:

(b) Information On Investees:

(ii) Limitation on investment in China:

Note 1: It represents 60% of the Company's net equity.

(iii) Significant transactions:

(14) Segment Information

MACHVISION Interim / Quarterly Report 2021