MICROELECTRONICS TECHNOLOGY, INC. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

INDEPENDENT AUDITORS’ REVIEW REPORT JUNE 30, 2020 AND 2019

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

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INDEPENDENT AUDITORS' REVIEW REPORT TRANSLATED FROM CHINESE

To the Board of Directors and Shareholders of MICROELECTRONICS TECHNOLOGY, INC.

Introduction

We have reviewed the accompanying consolidated balance sheets of Microelectronics Technology, Inc. and subsidiaries (the “Group”) as at June 30, 2020 and 2019, and the related consolidated statements of comprehensive income for the three months and six months then ended, as well as the consolidated statements of changes in equity and of cash flows for the six months then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies. Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and International Accounting Standard 34, “Interim Financial Reporting” as endorsed by the Financial Supervisory Commission. Our responsibility is to express a conclusion on these consolidated financial statements based on our reviews.

Scope of Review

We conducted our reviews in accordance with the Statement of Auditing Standards No. 65 “Review of Financial Information Performed by the Independent Auditor of the Entity” in the Republic of China. A review of 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 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. Accordingly, we do not express an audit opinion.

Conclusion

Based on our reviews, 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 the Group as at June 30, 2020 and 2019, and of its consolidated financial performance for the three months and six months then ended and its consolidated cash flows for the six months

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then ended in accordance with “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and International Accounting Standard 34, “Interim Financial Reporting” as endorsed by the Financial Supervisory Commission.

Lin, Yu-Kuan Li, Tien-Yi

For and on behalf of PricewaterhouseCoopers, Taiwan August 6, 2020

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

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

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MICROELECTRONICS TECHNOLOGY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS JUNE 30, 2020, DECEMBER 31, 2019 AND JUNE 30, 2019

(Expressed in thousands of New Taiwan dollars) (The balance sheets as of June 30, 2020 and 2019 are reviewed, not audited)

Assets	Notes	June 30, 2020 AMOUNT % `$` `986,763` `20` `2,132` `-` `28,192` `1` `-` `-` `1,115,111` `23` `19,084` `-` `43,237` `1` `144` `-` `944,077` `19` `48,461` `1` `3,187,201` `65` `-` `-` `146,400` `3` `488,255` `10` `316,102` `7` `305,287` `6` `416,829` `9` `5,575` `-` `1,678,448` `35` `$` `4,865,649` `100`	December 31, 2019 AMOUNT % `$` `1,057,733` `21` `2,671` `-` `28,235` `1` `9,024` `-` `1,040,925` `21` `74,209` `1` `126,629` `3` `385` `-` `857,244` `17` `48,217` `1` `3,245,272` `65` `5,996` `-` `224,207` `4` `495,226` `10` `335,400` `7` `302,120` `6` `410,469` `8` `5,534` `-` `1,778,952` `35` `$` `5,024,224` `100`	June 30, 2019	June 30, 2019
		AMOUNT `$` `986,763` `2,132` `28,192` `-` `1,115,111` `19,084` `43,237` `144` `944,077` `48,461` `3,187,201` `-` `146,400` `488,255` `316,102` `305,287` `416,829` `5,575` `1,678,448` `$` `4,865,649`	AMOUNT `$` `1,057,733` `2,671` `28,235` `9,024` `1,040,925` `74,209` `126,629` `385` `857,244` `48,217` `3,245,272` `5,996` `224,207` `495,226` `335,400` `302,120` `410,469` `5,534` `1,778,952` `$` `5,024,224`	AMOUNT `$` `1,097,251` `2,309` `28,905` `-` `1,276,917` `39,396` `105,873` `542` `1,096,289` `83,832` `3,731,314` `6,212` `246,151` `531,554` `361,989` `302,712` `418,861` `10,412` `1,877,891` `$` `5,609,205`	%
Current assets 1100 Cash and cash equivalents 1110 Financial assets at fair value through profit or loss - current 1136 Current financial assets at amortised cost 1150 Notes receivable 1170 Accounts receivable, net 1180 Accounts receivable - related parties 1200 Other receivables 1210 Other receivables - related parties 130X Inventories 1410 Prepayments 11XX Total current assets Non-current assets 1510 Financial assets at fair value through profit or loss-non-current 1517 Financial assets at fair value through other comprehensive income-non-current 1600 Property, plant and equipment 1755 Right-of-use assets 1780 Intangible assets 1840 Deferred income tax assets 1900 Other non-current assets 15XX Tatal non-current assets 1XXX Total Assets	6(1) 6(2) 6(4) 6(5) 6(5) 6(5) and 7 7 6(6) 6(2) 6(3) 6(7) 6(8) 6(9)(10)				`20` `-` `-` `-` `23` `1` `2` `-` `20` `1`
					`67`
					`-` `4` `10` `6` `5` `8` `-`
					`33`
					`100`

(Continued)

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MICROELECTRONICS TECHNOLOGY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

JUNE 30, 2020, DECEMBER 31, 2019 AND JUNE 30, 2019

(Expressed in thousands of New Taiwan dollars) (The balance sheets as of June 30, 2020 and 2019 are reviewed, not audited)

					June 30, 2020				December 31, 2019	December 31, 2019			June 30, 2019
	Liabilities and Equity	Notes			AMOUNT	%			AMOUNT	%			AMOUNT	%
	Current Liabilities
2100	Short-term borrowings	6(11)		`$`	`306,016`		`6`	`$`	`396,748`		`8`	`$`	`517,178`		`9`
2120	Financial liabilities at fair value	6(12)
	through profit or loss - current				`380`		`-`		`273`		`-`		`1,493`		`-`
2130	Current contract liabilities	6(21)			`25,663`		`1`		`55,824`		`1`		`120,967`		`2`
2170	Accounts payable				`803,407`	`17`			`919,456`	`18`			`1,134,957`	`20`
2180	Accounts payable - related parties	7			`-`		`-`		`-`		`-`		`7,039`		`-`
2200	Other payables	6(13)			`294,699`		`6`		`358,092`		`7`		`412,345`		`8`
2250	Provisions for liabilities - current	6(16)			`13,042`		`-`		`10,935`		`-`		`19,408`		`-`
2280	Current lease liabilities				`31,607`		`1`		`31,712`		`1`		`32,227`		`1`
2300	Other current liabilities				`10,715`		`-`		`5,942`		`-`		`7,264`		`-`
21XX	Total current liabilities				`1,485,529`	`31`			`1,778,982`	`35`			`2,252,878`	`40`
	Non-current liabilities
2540	Long-term loans	6(14)			`307,945`		`6`		`125`		`-`		`-`		`-`
2550	Provisions for liabilities - non-	6(16)
	current				`907`		`-`		`1,665`		`-`		`2,790`		`-`
2570	Deferred income tax liabilities				`103,246`		`2`		`102,055`		`2`		`118,478`		`2`
2580	Non-current lease liabilities				`262,443`		`6`		`279,320`		`6`		`302,165`		`5`
2600	Other non-current liabilities				`156,138`		`3`		`206,622`		`4`		`201,019`		`4`
25XX	Total non-current liabilities				`830,679`	`17`			`589,787`	`12`			`624,452`	`11`
2XXX	Total Liabilities				`2,316,208`	`48`			`2,368,769`	`47`			`2,877,330`	`51`
	Equity
	Equity attributable to owners of
	parent
	Share capital	6(17)
3110	Share capital-common stock				`2,280,283`	`47`			`2,280,283`	`45`			`2,280,283`	`41`
	Capital Reserves	6(18)
3200	Capital surplus				`402,937`		`8`		`402,937`		`8`		`402,937`		`7`
	Retained Earnings	6(19)
3310	Legal reserve				`24,972`		`1`		`24,972`		`1`		`24,972`		`1`
3320	Special reserve				`193,426`		`4`		`193,426`		`4`		`193,426`		`3`
3350	Unappropriated retained earnings				`4,023`		`-`		`2,413`		`-`		`8,894`		`-`
	Other Equity Interest
3400	Other equity interest		`(`		`356,200 ) (`		`8) (`		`248,576 ) (`		`5) (`		`178,637) (`		`3)`
31XX	Equity attributable to owners
	of the parent				`2,549,441`	`52`			`2,655,455`	`53`			`2,731,875`	`49`
3XXX	Total equity				`2,549,441`	`52`			`2,655,455`	`53`			`2,731,875`	`49`
	Significant contingent liabilities and	9
	unrecognised contract commitments
	Significant events after the balance	11
	sheet date
3X2X	Total Liabilities and Equity			`$`	`4,865,649`	`100`		`$`	`5,024,224`	`100`		`$`	`5,609,205`	`100`

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

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MICROELECTRONICS TECHNOLOGY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2020 AND 2019

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

(UNAUDITED)

					Three months ended June 30	Three months ended June 30	Three months ended June 30	Three months ended June 30			Six months ended June 30	Six months ended June 30	Six months ended June 30	Six months ended June 30
					2020			2019			2020			2019
	Items	Notes			AMOUNT	%	AMOUNT		%		AMOUNT	%	AMOUNT		%
4000	Operating revenue	6(21)		`$`	`1,104,981`	`100`	`$ 1,488,817`		`100`	`$`	`2,008,402`	`100`	`$`	`3,175,065`	`100`
5000	Operating costs	6(6)	`(`		`866,232 ) (`	`78) (`	`1,187,450 ) (`		`80) (`		`1,618,700 ) (`	`81) (`		`2,631,091) (`	`83 )`
5900	Gross profit				`238,749`	`22`		`301,367`	`20`		`389,702`	`19`		`543,974`	`17`
	Operating expenses	6(26)
6100	Selling expenses		`(`		`37,514 ) (`	`3) (`		`111,778 ) (`	`7) (`		`75,955 ) (`	`4) (`		`191,090) (`	`6 )`
6200	General and administrative
	expenses		`(`		`33,752 ) (`	`3) (`		`30,593 ) (`	`2) (`		`66,228 ) (`	`3) (`		`59,645) (`	`2 )`
6300	Research and development
	expenses		`(`		`186,611 ) (`	`17) (`		`148,989 ) (`	`10) (`		`275,546 ) (`	`14) (`		`274,228) (`	`9 )`
6450	Gain on reversal of expected
	credit impairment		`(`		`392 )`	`-`		`4`	`- (`		`663 )`	`-`		`4`	`-`
6000	Total operating expenses		`(`		`258,269 ) (`	`23) (`		`291,356 ) (`	`19) (`		`418,392 ) (`	`21) (`		`524,959) (`	`17 )`
6900	Operating profit (loss)		`(`		`19,520 ) (`	`1)`		`10,011`	`1 (`		`28,690 ) (`	`2)`		`19,015`	`-`
	Non-operating income and
	expenses
7100	Interest income	6(22)			`1,453`	`-`		`2,167`	`-`		`3,489`	`-`		`4,289`	`-`
7010	Other income	6(23)			`44,055`	`4`		`10,301`	`1`		`45,352`	`2`		`13,039`	`-`
7020	Other gains and losses	6(24)	`(`		`1,010 )`	`- (`		`11,660 ) (`	`1) (`		`6,767 )`	`- (`		`15,351)`	`-`
7050	Finance costs	6(25)	`(`		`3,433 )`	`- (`		`5,930 ) (`	`1) (`		`7,162 )`	`- (`		`12,560)`	`-`
7000	Total non-operating income
	and expenses				`41,065`	`4 (`		`5,122 ) (`	`1)`		`34,912`	`2 (`		`10,583)`	`-`
7900	Profit before income tax				`21,545`	`3`		`4,889`	`-`		`6,222`	`-`		`8,432`	`-`
7950	Income tax expense	6(28)	`(`		`2,887 ) (`	`1) (`		`4,352 )`	`- (`		`4,612 )`	`- (`		`5,297)`	`-`
8200	Profit for the period			`$`	`18,658`	`2`	`$`	`537`	`-`	`$`	`1,610`	`-`	`$`	`3,135`	`-`
	Other comprehensive income
	(loss)
	Components of other
	comprehensive loss that will not
	be reclassified to profit or loss
8316	Unrealised loss from financial	6(3)
	assets measured at fair value
	through other comprehensive
	income		`($`		`45,259 ) (`	`4)`	`$`	`782`	`- ($`		`82,466 ) (`	`4)`	`$`	`1,096`	`-`
	Components of other
	comprehensive income that will
	be reclassified to profit or loss
8361	Currency translation
	differences of foreign
	operations		`(`		`29,053 ) (`	`3) (`		`7,675 )`	`- (`		`31,447 ) (`	`1)`		`17,117`	`1`
8399	Income tax relating to the
	components of other
	comprehensive income that
	will be reclassified to profit or
	loss				`5,811`	`1`		`1,538`	`-`		`6,289`	`- (`		`3,424)`	`-`
8300	Total other comprehensive
	(loss) income for the period		`($`		`68,501 ) (`	`6) ($`		`5,355 )`	`- ($`		`107,624 ) (`	`5)`	`$`	`14,789`	`1`
8500	Total comprehensive (loss)
	income for the period		`($`		`49,843 ) (`	`4) ($`		`4,818 )`	`- ($`		`106,014 ) (`	`5)`	`$`	`17,924`	`1`
	(Loss) profit attributable to:
8610	Owners of the parent			`$`	`18,658`	`2`	`$`	`537`	`-`	`$`	`1,610`	`-`	`$`	`3,135`	`-`
8620	Non-controlling interest				`-`	`-`		`-`	`-`		`-`	`-`		`-`	`-`
				`$`	`18,658`	`2`	`$`	`537`	`-`	`$`	`1,610`	`-`	`$`	`3,135`	`-`
	Comprehensive income (loss)
	attributable to:
8710	Owners of the parent		`($`		`49,843 ) (`	`4) ($`		`4,818 )`	`- ($`		`106,014 ) (`	`5)`	`$`	`17,924`	`1`
8720	Non-controlling interest				`-`	`-`		`-`	`-`		`-`	`-`		`-`	`-`
			`($`		`49,843 ) (`	`4) ($`		`4,818 )`	`- ($`		`106,014 ) (`	`5)`	`$`	`17,924`	`1`
	Earnings per share ( in dollars )	6(29)
9750	Basic			`$`		`0.08`	`$`		`-`	`$`		`0.01`	`$`		`0.01`
9850	Diluted			`$`		`0.08`	`$`		`-`	`$`		`0.01`	`$`		`0.01`

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

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MICROELECTRONICS TECHNOLOGY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY SIX MONTHS ENDED JUNE 30, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

(UNAUDITED)

Equity attributable to owners of the parent

2019 Balance at January 1, 2019 Profit for the period Other comprehensive income for the period Total comprehensive income Appropriation of 2018 earnings Legal reserve Special reserve Cash dividends Balance at June 30, 2019 2020 Balance at January 1, 2020 Profit for the period Other comprehensive loss for the period Total comprehensive loss Balance at June 30, 2020	Notes		Share capital- common stock		Capital surplus, additional paid- in capital			Retained earnings	Retained earnings		Other equity interest	Other equity interest		Total equity
							Legal reserve		Special reserve	Unappropriated retained earnings	Financial statements translation differences of foreign operations	Unrealised gains (losses) from financial assets measured at fair value through other comprehensive income
	6(3) 6(19) 6(19) 6(19) 6(3)		`$ 2,280,283` `-` `-` `-` `-` `-` `-` `$ 2,280,283` `$ 2,280,283` `-` `-` `-` `$ 2,280,283`		`$` `402,937` `-` `-` `-` `-` `-` `-` `$` `402,937` `$` `402,937` `-` `-` `-` `$` `402,937`		`$` `19,761` `-` `-` `-` `5,211` `-` `-` `$` `24,972` `$` `24,972` `-` `-` `-` `$` `24,972`		`$` `83,446` `-` `-` `-` `-` `109,980` `-` `$` `193,426` `$` `193,426` `-` `-` `-` `$` `193,426`	`$` `166,556` `3,135` `-` `3,135` `(` `5,211)` `(` `109,980)` `(` `45,606)` `$` `8,894` `$` `2,413` `1,610` `-` `1,610` `$` `4,023`	`($` `58,934` `)` `-` `13,693` `13,693` `-` `-` `-` `($` `45,241` `)` `($` `104,070` `)` `-` `(` `25,158` `)` `(` `25,158` `)` `($` `129,228` `)`	`($` `134,492)` `-` `1,096` `1,096` `-` `-` `-` `($` `133,396)` `($` `144,506)` `-` `(` `82,466)` `(` `82,466)` `($` `226,972)`	`$ 2,759,557` `3,135` `14,789` `17,924` `-` `-` `(` `45,606` `)` `$ 2,731,875` `$ 2,655,455` `1,610` `(` `107,624` `)` `(` `106,014` `)` `$ 2,549,441`

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

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MICROELECTRONICS TECHNOLOGY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

SIX MONTHS ENDED JUNE 30, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

(UNAUDITED)

CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax
Adjustments
Adjustments to reconcile profit (loss)
Loss (gain) on reversal of expected credit impairment
Depreciation

Amortization

Net (gain) loss on financial assets at fair value through profit
or loss

Net loss on financial liabilities at fair value through profit or
loss

Interest income

Interest expense

Gain on disposal of property, plant and equipment

Changes in operating assets and liabilities
Changes in operating assets
Notes receivable
Accounts receivable
Other receivables
Inventories
Prepayments
Changes in operating liabilities
Accounts payable
Other payables
Provisions for liabilities
Contract liabilities-current
Other current liabilities
Accrued pension liabilities
Cash (outflow) inflow generated from operations
Interest received
Interest paid
Income taxes paid
Net cash flows (used in) from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from disposal of financial assets at amortized cost
Acquisition of property, plant and equipment

Proceeds from disposal of property, plant and equipment
Acquisition of intangible assets

(Increase) decrease in guarantee deposits paid
Net cash flows used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in short-term borrowings
Decrease in short-term borrowings
Increase in long-term borrowings
Repayment of principal portion of lease liabilities
Net cash flows from (used in) financing activities
Effects due to changes in exchange rate
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period Six months ended June 30
Notes
2020
2019
$
6,222 $
8,432
663 (
4 )
6(7)(8)(26)
59,109
56,172
6(9)(26)
14,979
14,426
6(2)(24)
539 (
1,926 )
6(12)(24)
107
1,399
6(22)
(
3,489 ) (
4,289 )
6(25)
7,162
12,560
6(24)
(
65 ) (
8,534 )
9,024
68,362
(
39,526 )
344,389
82,954
27,821
(
95,245 )
235,361
(
719 ) (
8,611 )
(
98,416 ) (
690,528 )
(
55,473 ) (
34,905 )
1,608 (
15,885 )
(
30,161 )
137,749
349 (
28,434 )
(
50,483 ) (
11,720 )
(
190,861 )
101,835
3,548
4,305
(
4,568 ) (
12,598 )
(
4,732 ) (
8,422 )
(
196,613 )
85,120
(
299 )
20,323
6(30)
(
48,063 ) (
34,380 )
2,395
12,082
6(9)
(
19,828 ) (
14,459 )
(
93 )
588
(
65,888 ) (
15,846 )
2,936,081
1,479,874
(
3,025,958 ) (
1,522,230 )
307,820
-
(
19,241 ) (
19,484 )
198,702 (
61,840 )
(
7,171 )
3,318
(
70,970 )
10,752
1,057,733
1,086,499
$
986,763 $
1,097,251

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

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MICROELECTRONICS TECHNOLOGY, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 2020 AND 2019

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

(Reviewed, not audited)

1. HISTORY AND ORGANISATION

Microelectronics Technology Inc. (the “Company”) was incorporated as a company limited by shares under the provisions of the Company Act of the Republic of China (R.O.C.). The Company and its subsidiaries (collectively referred herein as the “Group”) are primarily engaged in the design, manufacture and sales of terrestrial microwave, satellite communication system products, and related customised products.

On January 1, 2011, the Company merged with the subsidiary, Global PCS Inc.. Under the merger, the Company is the surviving company while Global PCS Inc. was the dissolved company

2. THE DATE OF AUTHORISATION FOR ISSUANCE OF THE CONSOLIDATED FINANCIAL

STATEMENTS AND PROCEDURES FOR AUTHORISATION

These consolidated financial statements were authorised for issuance by the Board of Directors on August 6, 2020.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

(1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS”) as endorsed by the Financial Supervisory Commission (“FSC”) New standards, interpretations and amendments endorsed by the FSC effective from 2020 are as follows:

New Standards,Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendments to IAS 1 and IAS 8, ‘Disclosure initiative-definition of material’ Amendments to IFRS 3, ‘Definition of a business’ Amendments to IFRS 9, IAS 39 and IFRS7 ,‘Interest rate benchmark reform’ Amendment to IFRS 16, ‘Covid-19-related rent concessions’	January 1, 2020 January 1, 2020 January 1, 2020 June 1, 2020

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

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

the Group

None.

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

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

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Effective date by
International Accounting
New Standards, Interpretations and Amendments Standards Board
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New Standards,Interpretations andAmendments	Effective date by International Accounting StandardsBoard
Amendments to IFRS 4, ‘Extension of the temporary exemption from	January 1, 2021
applying IFRS 9’
Amendments to IFRS 3, ‘Reference to the conceptual framework’	January 1, 2022
Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets	To be determined by
between an investor and its associate or joint venture’	International Accounting
	Standards Board
IFRS 17, ‘Insurance contracts’	January 1, 2023
Amendments to IFRS 17, ‘Insurance contracts’	January 1, 2023
Amendments to IAS 1, ‘Classification of liabilities as current or non-	January 1, 2023
current’
Amendments to IAS 16, ‘Property, plant and equipment:	January 1, 2022
proceeds before intended use’
Amendments to IAS 37, ‘Onerous contracts—cost of fulfilling a	January 1, 2022
contract’
Annual improvements to IFRS Standards 2018–2020	January 1, 2022

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies adopted are consistent with Note 4 in the consolidated financial statements for the year ended December 31, 2019, except for the compliance statement, basis of preparation, basis of consolidation and additional policies as set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

(1) Compliance statement

A. The consolidated financial statements of the Group have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Accounting Standard 34, ‘Interim financial reporting ’ as endorsed by the FSC.
B. These consolidated financial statements are to be read in conjunction with the consolidated financial statements for the year ended December 31, 2019.

(2) Basis of preparation

A. Except for the following items, the consolidated financial statements have been prepared under the historical cost convention:
(a) Financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.
(b) Financial assets and liabilities at fair value through other comprehensive income.

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  - (c) Defined benefit liabilities recognised based on the net amount of pension fund assets less present value of defined benefit obligation.

B. The preparation of financial statements in conformity with International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the “IFRSs”) requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.
(3) Basis of consolidation
A. Basis for preparation of consolidated financial statements:
- The basis for preparation of consolidated financial statements is consistent with those of the year ended December 31, 2019.
B. Subsidiaries included in the consolidated financial statements:

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Main business Ownership (%)
Name of investor Name of subsidiary activities June 30, 2020 December 31, 2019 June 30, 2019
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Microelectronics	Sasson International	Note 1	100.00	100.00	100.00
Technology, Inc.	Holding, Inc.
Sasson International Holding, Inc.	Welltop Technology Co., Ltd.	Note 1	100.00	100.00	100.00
Sasson International Holding, Inc.	Jupiter Network Corp. (Jupiter)	Note 1	100.00	100.00	100.00
Welltop Technology Co., Ltd.	MTI Laboratory, Inc.	Note 2	100.00	100.00	100.00
Welltop Technology Co., Ltd.	RadioComp ApS	Note 2	100.00	100.00	100.00
Jupiter Network	Jupiter Technology	Note 3	100.00	100.00	100.00
Corp. (Jupiter)	(Wuxi) Inc.

Note 1: Main operating activity is investments in the manufacturing and trading business.
Note 2: Research, development, design, manufacture and sales of personal wireless communication device, components of subsystem and system and wireless microwave communication system and equipment of electronic system.
Note 3: Main operating activities are design of satellite and microwave communication system equipment and its components, sales of self-made products and providing related technical services.
C. Subsidiaries not included in the consolidated financial statements: None.
D. Adjustments for subsidiaries with different balance sheet dates: None.
E. Significant restrictions: None.
F. Subsidiaries that have non-controlling interests that are material to the Group: None.

(4) Employee benefits

Pension cost for the interim period is calculated on a year-to-date basis by using the pension cost rate

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derived from the actuarial valuation at the end of the prior financial year, adjusted for significant market fluctuations since that time and for significant curtailments, settlements, or other significant one-off events. And, the related information is disclosed accordingly.

(5) Income tax
A. The interim period income tax expense is recognised based on the estimated average annual effective income tax rate expected for the full financial year applied to the pretax income of the interim period, and the related information is disclosed accordingly.
B. If a change in tax rate is enacted or substantively enacted in an interim period, the Group recognises the effect of the change immediately in the interim period in which the change occurs. The effect of the change on items recognised outside profit or loss is recognised in other comprehensive income or equity while the effect of the change on items recognised in profit or loss is recognised in profit or loss.

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTION UNCERTAINTY

There have been no significant changes in the reporting period. Please refer to Note 5 in the consolidated financial statements for the year ended December 31, 2019.

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

Cash and cash equivalents
Cash on hand and revolving funds Checking accounts and demand deposits Time deposits	June30,2020 December 31, 2019 280 $ 299 $ 523,084 518,946 463,399 538,488 986,763 $ 1,057,733 $	June30,2019
		352 $ 555,061 541,838
		1,097,251 $

A. The Group transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.
B. Information on restricted cash reclassified as ‘Financial assets at amortised cost’ is provided in Note 8.

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

Items		June 30,2020	December	31,2019		June 30,2019
Current items:
Financial assets mandatorily
measured at fair value through
profit or loss
Derivative instruments	$	2,132	$	2,671	$	2,309
Unlisted stocks		109,776		111,072		115,074
Valuation adjustments	(	109,776)	(	111,072)	(	115,074)
	$	2,132	$	2,671	$	2,309
Non-current items`：`
Financial assets mandatorily
measured at fair value through
profit or loss
Convertible bonds	$	-	$	5,996	$	6,212
Valuation adjustments		-		-		-
	$	-	$	5,996	$	6,212

A. Amounts recognised in profit or loss in relation to financial assets at fair value through profit or loss are listed below:

loss are listed below:
		Three months	ended June 30,
		2020		2019
Financial assets mandatorily measured at fair
value through profit or loss
Derivative instruments	$	2,132	$	1,773
		Six months ended June 30,
		2020		2019
Financial assets mandatorily measured at fair
value through profit or loss
Derivative instruments	($	539)	$	1,926

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

for under hedge accounting. The information is listed below:
Contract amount Contract Derivative instruments (Notionalprincipal) period Current items: Foreign exchange swap transactions 3,000 USD 2020.05.13~ 2020.07.15 Forward foreign exchange contracts 5,000 USD 2020.05.13~ 2020.08.17 Derivative instruments Current items: Foreign exchange swap transactions Forward foreign exchange contracts June 30,2020	Contract amount Contract (Notionalprincipal) period 5,000 USD 2019.12.11~ 2020.01.15 2,000 USD 2019.12.13~ 2020.01.22 December 31,2019 June 30, 2019
	Contract amount Contract (Notionalprincipal) period 11,180 USD 2019.05.13~ 2019.08.15 3,500 USD 2019.05.13~ 2019.07.15

The Group entered into foreign exchange swap transactions and forward foreign exchange contracts to sell forward contracts to hedge exchange rate risk of export proceeds. However, these forward contracts are not accounted for under hedge accounting.

C. Information on financial assets at fair value through profit or loss is provided in Note 12(2).

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

Items		June 30,2020	December	31, 2019		June 30, 2019
Non-current items`：`
Equity instruments
Emerging stocks	$	-	$	-	$	3,060
Unlisted stocks		359,107		357,057		367,819
Valuation adjustments	(	226,971)	(	144,505)	(	133,395)
Net exchange differences		14,264		11,655		8,667
	$	146,400	$	224,207	$	246,151

A. The Group has elected to classify equity instrument investments that are considered to be strategic investments as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $146,400, $224,207 and $246,151 as at June 30, 2020, December 31, 2019 and June 30, 2019, respectively.
B. For the three months and six months ended June 30, 2020, the Group recognised impairment loss of $45,259 and $82,466, respectively, after the assessment, as the global pandemic impacted the operation of investees, causing operational difficulty and operating capital to be insufficient, that resulted in the impairment.

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

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Three months ended June 30,
2020 2019
Equity instruments at fair value through other
comprehensive income
Fair value change recognised in other
comprehensive (loss) income ($ 45,259) $ 782
Six months ended June 30,
2020 2019
Equity instruments at fair value through other
comprehensive income
Fair value change recognised in other
comprehensive (loss) income ($ 82,466) $ 1,096
Financial assets at amortised cost
Items June 30, 2020 December 31, 2019 June 30, 2019
Current items:
Time deposits $ 28,192 $ 28,235 $ 28,905
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(4) Financial assets at amortised cost

A. Amounts recognised in profit or loss in relation to financial assets at amortised cost are listed below:

below:
Interest income Interest income	Three months ended June 30,
	2020 2019 126 $ 207 $ Six months ended June 30,
	2020 276 $	2019
		389 $

B. As of June 30, 2020, December 31, 2019 and June 30, 2019, without taking into account other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the financial assets at amortised cost held by the Group was $28,192, $28,235 and $28,905, respectively.
C. Details of the Group’s financial assets at amortised cost pledged to others as collateral are provided in Note 8.
D. Information relating to credit risk of financial assets at amortised cost is provided in Note 12(2).

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(5) Notes and accounts receivable

Notes and accounts receivable
		June 30,2020	December 31,2019			June 30,2019
Notes receivable	$	-	$	9,024	$	-
Less: Allowance for
uncollectible accounts		-		-		-
	$	-	$	9,024	$	-
Accounts receivable	$	1,134,898	$	1,116,387	$	1,317,566
Less: Allowance for
uncollectible accounts	(	703)	(	1,253)	(	1,253)
	$	1,134,195	$	1,115,134	$	1,316,313

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

is as follows:
Not past due Up to 90 days 91 to 180 days Over 181 days Not past due Up to 90 days 91 to 180 days Over 181 days	June 30,	Notes receivable - $ - - - - $ 2020	December 31,2019
	Accounts receivable 723,881 $ 404,879 5,407 731 1,134,898 $		Accounts receivable 898,114 $ 145,858 20,937 51,478 1,116,387 $ June 30,	Notes receivable
				9,024 $ - - -
				9,024 $
				2019
			Accounts receivable 984,084 $ 320,386 11,846 1,250 1,317,566 $	Notes receivable
				- $ - - -
				- $

The above ageing analysis was based on past due date. As of June 30, 2020, the subsequent collection of past-due accounts receivable amounted to $125,505, of which $3,716 were collected from 91-180 days past due.

B. As of June 30, 2020, December 31, 2019 and June 30, 2019, accounts receivable and notes receivable were all from contracts with customers. And as of January 1, 2019, the balance of receivables from contracts with customers amounted to $1,714,025.
C. As of June 30, 2020, December 31, 2019 and June 30, 2019, without taking into account other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the Group’s notes receivable were $0, $9,024 and $0, respectively. As of June 30, 2020, December 31, 2019 and June 30, 2019, the maximum exposure to credit risk in respect of the amount that best represents the Group’s accounts receivable were $1,134,195, $1,115,134 and $1,316,313, respectively.
D. Information relating to credit risk of accounts and notes receivable is provided in Note 12(2).

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(6) Inventories

Inventories
Raw materials Work in progress Finished goods Raw materials Work in progress Finished goods Raw materials Work in progress Finished goods Inventory in transit	Allowance for inventory valuation losses and loss for obsolete and slow- Cost movingintentories Bookvalue 650,281 $ 70,969) ($ 579,312 $ 261,356 45,852) ( 215,504 151,357 2,096) ( 149,261 1,062,994 $ 118,917) ($ 944,077 $ June 30,2020 Allowance for inventory valuation losses and loss for obsolete and slow- Cost moving intentories Book value 647,184 $ 89,204) ($ 557,980 $ 213,054 48,702) ( 164,352 155,752 20,840) ( 134,912 1,015,990 $ 158,746) ($ 857,244 $ December 31,2019 Allowance for inventory valuation losses and loss for obsolete and slow- Cost movingintentories Bookvalue 709,149 $ 47,968) ($ 661,181 $ 277,666 15,643) ( 262,023 157,061 35,574) ( 121,487 51,598 - 51,598 1,195,474 $ 99,185) ($ 1,096,289 $ June 30,2019
		June 30,2019
	Allowance for inventory valuation losses and loss for obsolete and slow- Cost movingintentories 709,149 $ 47,968) ($ 277,666 15,643) ( 157,061 35,574) ( 51,598 - 1,195,474 $ 99,185) ($

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The cost of inventories recognised expense for the period:

		Three months	ended June 30,	ended June 30,
		2020		2019
Cost of goods sold	$	866,923	$	1,191,374
Gain on reversal of decline in market value	(	691)	(	3,924)
Recognised as selling and R&D expenses		6,341		-
	$	872,573	$	1,187,450
		Six months ended June 30,
		2020		2019
Cost of goods sold	$	1,613,414	$	2,629,786
Loss on decline in market value		5,286		1,305
Recognised as selling and R&D expenses		8,619		3,467
	$	1,627,319	$	2,634,558

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(7) Property, plant and equipment

Details of property, plant and equipment for its own use are as follows:

												2020
																	Unfinished
																construction and
			Buildings and		Machinery and						Transportation				Leasehold	equipment under
			structures			equipment		Office	equipment			equipment			improvements		acceptance			Total
At January 1
Cost		$	418,552		$	962,616		$	91,449		$	2,250		$	15,159	$	918		$	1,490,944
Accumulated depreciation
and impairment	(		82,421)	(		823,724)	(		78,100)	(		2,250)	(		9,223)		-	(		995,718)
		$	336,131		$	138,892		$	13,349		$	-		$	5,936	$	918		$	495,226
At January 1		$	336,131		$	138,892		$	13,349		$	-		$	5,936	$	918		$	495,226
Additions			-			36,927			6,022			-			-		-			42,949
Reclassifications			-			4,928			-			-			-	(	918)			4,010
Disposals			-	(		2,293)	(		37)			-			-		-	(		2,330)
Depreciation expense	(		9,433)	(		25,794)	(		3,892)			-	(		2,357)		-	(		41,476)
Net exchange differences	(		8,551)	(		1,449)	(		121)			-	(		3)		-	(		10,124)
At June 30		$	318,147		$	151,211		$	15,321		$	-		$	3,576	$	-		$	488,255
At June 30
Cost		$	407,630		$	982,679		$	93,290		$	2,226		$	15,097	$	-		$	1,500,922
Accumulated depreciation
and impairment	(		89,483)	(		831,468)	(		77,969)	(		2,226)	(		11,521)		-	(		1,012,667)
		$	318,147		$	151,211		$	15,321		$	-		$	3,576	$	-		$	488,255

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2019

												2019
																	Unfinished
																construction and
			Buildings and		Machinery and						Transportation				Leasehold	equipment under
			structures			equipment		Office	equipment			equipment			improvements		acceptance			Total
At January 1
Cost		$	433,064		$	1,288,116		$	92,094		$	2,299		$	8,382	$	8,072		$	1,832,027
Accumulated depreciation
and impairment	(		67,045)	(		1,140,999)	(		74,846)	(		2,299)	(		5,887)		-	(		1,291,076)
		$	366,019		$	147,117		$	17,248		$	-		$	2,495	$	8,072		$	540,951
At January 1		$	366,019		$	147,117		$	17,248		$	-		$	2,495	$	8,072		$	540,951
Additions			-			15,920			2,996			-			2,786		3,508			25,210
Reclassifications			-			8,110			-			-			-	(	8,110)			-
Disposals			-	(		3,492)	(		56)			-			-		-	(		3,548)
Depreciation expense	(		9,893)	(		19,720)	(		4,500)			-	(		1,672)		-	(		35,785)
Net exchange differences			3,595			1,016			109			-			5		1			4,726
At June 30		$	359,721		$	148,951		$	15,797		$	-		$	3,614	$	3,471		$	531,554
At June 30
Cost		$	437,196		$	1,173,983		$	121,525		$	2,321		$	11,229	$	3,471		$	1,749,725
Accumulated depreciation
and impairment	(		77,475)	(		1,025,032)	(		105,728)	(		2,321)	(		7,615)		-	(		1,218,171)
		$	359,721		$	148,951		$	15,797		$	-		$	3,614	$	3,471		$	531,554

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`－` (8) Leasing arrangements lessee

A. The Group leases various assets including land, buildings, machinery and equipment. Rental contracts are typically made for periods of 1 to 10 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions.
B. The carrying amount of right-of-use assets and the depreciation charge are as follows:

Land Buildings Machinery and equipment Land Buildings Machinery and equipment Land Buildings Machinery and equipment	June30,2020 December31,2019 June30,2019 Carryingamount Carryingamount Carryingamount $ 26,288 $ 27,344 $ 29,117 289,814 308,056 332,872 - - - 316,102 $ 335,400 $ 361,989 $ 2020 2019 Depreciationcharge Depreciation charge $ 174 $ 188 8,638 8,764 - - 8,812 $ 8,952 $ 2020 2019 Depreciationcharge Depreciationcharge $ 351 $ 374 17,282 17,502 - 2,511 17,633 $ 20,387 $ Three months ended June 30, Six months ended June 30,	June30,2020 December31,2019 June30,2019 Carryingamount Carryingamount Carryingamount $ 26,288 $ 27,344 $ 29,117 289,814 308,056 332,872 - - - 316,102 $ 335,400 $ 361,989 $ 2020 2019 Depreciationcharge Depreciation charge $ 174 $ 188 8,638 8,764 - - 8,812 $ 8,952 $ 2020 2019 Depreciationcharge Depreciationcharge $ 351 $ 374 17,282 17,502 - 2,511 17,633 $ 20,387 $ Three months ended June 30, Six months ended June 30,	June30,2019
			Carryingamount
			$ 29,117 332,872 -
			361,989 $

		2020 Depreciationcharge $ 351 17,282 - 17,633 $

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

Items affecting profit or loss Interest expense on lease liabilities Expense on short-term lease contracts Expense on leases of low-value assets Items affecting profit or loss Interest expense on lease liabilities Expense on short-term lease contracts Expense on leases of low-value assets	Three months ended June 30,	Three months ended June 30,
	2020 2019 1,617 $ 1,518 $ 1,998 6,241 294 333 Six months ended June 30,	2019
	2020 3,234 $ 3,386 996	2019
		3,500 $ 12,203 1,081

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D. For the six months ended June 30, 2020 and 2019, the Group’s total cash outflow for leases was $26,857 and $36,268, respectively.

(9) Intangible assets

$26,857 and $36,268, respectively. Intangible assets
Acquired special Goodwill technology Computer sofware Total At January 1 Cost 383,503 $ 404,895 $ 489,740 $ 1,278,138 $ Accumulated depreciation and impairment 109,762) ( 404,895) ( 461,361) ( 976,018) ( 273,741 $ - $ 28,379 $ 302,120 $ At January 1 273,741 $ - $ 28,379 $ 302,120 $ Additions - - 19,828 19,828 Amortisation charge - - 14,979) ( 14,979) ( Net exchange differences 1,519) ( - 163) ( 1,682) ( At June 30 272,222 $ - $ 33,065 $ 305,287 $ At June 30 Cost 383,503 $ 404,895 $ 501,837 $ 1,290,235 $ Accumulated amortisation and impairment 111,281) ( 404,895) ( 468,772) ( 984,948) ( 272,222 $ - $ 33,065 $ 305,287 $ 2020 Acquired special Goodwill technology Computer sofware Total At January 1 Cost 383,503 $ 404,895 $ 461,291 $ 1,249,689 $ Accumulated depreciation and impairment 106,573) ( 404,895) ( 437,161) ( 948,629) ( 276,930 $ - $ 24,130 $ 301,060 $ At January 1 276,930 $ - $ 24,130 $ 301,060 $ Additions - - 14,459 14,459 Amortisation charge - - 14,426) ( 14,426) ( Net exchange differences 1,498 - 121 1,619 At June 30 278,428 $ - $ 24,284 $ 302,712 $ At June 30 Cost 383,503 $ 404,895 $ 477,197 $ 1,265,595 $ Accumulated amortisation and impairment 105,075) ( 404,895) ( 452,913) ( 962,883) ( 278,428 $ - $ 24,284 $ 302,712 $ 2019	2020
		Total
		302,712 $

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Details of amortisation on intangible assets are as follows:

		Three months	ended June 30,	ended June 30,
		2020		2019
Operating costs	$	1,602	$	1,170
General and administrative expenses		231		161
Research and development expenses		5,903		6,012
	$	7,736	$	7,343
		Six months ended June 30,
		2020		2019
Operating costs	$	2,945	$	2,262
General and administrative expenses		398		298
Research and development expenses		11,636		11,866
	$	14,979	$	14,426

(10) Impairment of non-financial assets

There have been no significant changes in the reporting period. Please refer to Note 6(10) in the consolidated financial statements for the year ended December 31, 2019.

(11) Short-term borrowings

Short-term borrowings
Type of borrowings Bank borrowings Export financing Borrowings for material purchase Type of borrowings Bank borrowings Borrowings for material purchase Type of borrowings Bank borrowings Export financing Borrowings for material purchase	June 30,2020 208,892 $ 97,124 306,016 $ December 31,2019 396,748 $ June 30,2019 74,544 $ 442,634 517,178 $	Interest rate range 0.70%~1.35% 0.85%~1.48% Interest rate range 2.39%~2.74% Interest rate range 3.20% 2.99%~3.28%	Collateral None None Collateral
			None Collateral None None

For the three months and six months ended June 30, 2020 and 2019, the Group recognised interest expense in profit or loss amounting to $1,434, $4,412, $3,546 and $9,060, respectively, due to the short-term borrowings.

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

Items June30,2020 December31,2019 Current items: Financial liabilities held for trading Non-hedging derivatives 380 $ 273 $ Valuation adjustments - - 380 $ 273 $	June30,2019
	1,493 $ -
	1,493 $

A. For the three months and six months ended June 30, 2020 and 2019, the Group recognised net gain (loss) on financial liabilities held for trading amounting to $1,446, ($1,368), ($107) and ($1,399), respectively.
B. Explanations of the transactions and contract information in respect of derivative financial liabilities that the Group does not adopt hedge accounting are as follows:

Unit: In thousands

		June 30,	2020		December	31, 2019
Non-derivative financial	Contract amount			Contract amount
liabilities for hedging	(Notionalprincipal)		Contractperiod	(Notionalprincipal)		Contractperiod
Current items:
Forward foreign	USD	2,100	2020.06.23~		-	-
exchange contracts			2020.08.17
Foreign exchange swap		-	-	USD	800	2019.12.11~
transactions						2020.01.15

Unit: In thousands

		June 30,	2019
Non-derivative financial	Contract amount
liabilities for hedging	(Notionalprincipal)		Contractperiod
Current items:
Foreign exchange swap	USD	5,800	2019.06.03~
transactions			2019.08.15

C. The Group entered into forward foreign exchange contracts and foreign exchange swap transactions to sell forward contracts to hedge exchange rate risk of export proceeds. However, these forward contracts are not accounted for under hedge accounting.

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(13) Other payables

Other payables
Employee bonus payable Payable on miscellaneous purchases Accrued export expenses Payables for machinery and equipment Accrued repairs and maintenance expense Accrued commission Payables for consulting service fees Others	June 30,2020 December31,2019 154,249 $ 151,759 $ 32,693 35,935 19,325 30,750 18,912 24,037 18,379 13,617 9,771 8,920 9,670 10,372 31,700 82,702 294,699 $ 358,092 $	June 30,2019 130,157 $ 34,199 86,169 19,484 14,320 11,225 10,357 106,434
		412,345 $

- (14) Long term borrowings

ong-term borrowings
Borrowing period Type of borrowings and repayment term Interest rate range Collateral Long-term bank borrowings Mega Bank Borrowing period is from December 23, 2019 to December 15, 2025; interest is repayable monthly. 0.95% None The Shanghai Commercial & Savings Bank Borrowing period is from March 31, 2020 to March 14, 2025; interest is repayable monthly. 0.75% None Less: Current portion Borrowing period Type of borrowings and repayment term Interest rate range Collateral Long-term bank borrowings Mega Bank Borrowing period is from December 23, 2019 to December 15, 2025; interest is repayable monthly. 1.2% None Less: Current portion	June 30,2020
	7,945 $ 300,000 -
	307,945 $
	December 31,2019
	125 $ -
	125 $

~25~

On June 30, 2019: None.

A. For the three months and six months ended June 30, 2020 and 2019, the Group recognised interest expense in profit or loss amounting to $382, $0, $382 and $0, respectively, due to the long-term borrowings.
B. As of August 6, 2020, the Company received a line of credit of $6.40 billion from the bank, and has drawn down $3.08 billion.

(15) Pensions

A. (a) The Company has a defined benefit pension plan in accordance with the Labor Standards Act, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Law. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company and its domestic subsidiaries contribute monthly an amount equal to 2% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company would assess the balance in the aforementioned labor pension reserve account by December 31, every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method; to the employees expected to be qualify for retirement in the following year, the Company will make contributions for the deficit by next March.
(b) The pension costs under defined contribution pension plans of the Group for the three months and six months ended June 30, 2020 and 2019 were $335, $987, $824 and $1,913, respectively.
(c) Expected contributions to the defined benefit pension plans of the Group for the year ending December 31, 2021 amount to $3,516.
B. (a) Effective July 1, 2005, the Company has established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company contributes monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.
(b) The Company’s mainland China subsidiary, Jupiter Technology (Wuxi) Inc, has a defined contribution plan. Monthly contributions to an independent fund administered by the government in accordance with the pension regulations in the People’s Republic of China (PRC) are based on certain percentage of employees’ monthly salaries and wages. The contribution percentage was 19%. Other than the monthly contributions, the Company has

~26~

no further obligations

(c) The Subsidiary, RadioComp ApS, accrued pension costs based on a certain appropriate rate of total salaries.
(d) The pension costs under defined contribution pension plans of the Group for the three months and six months ended June 30, 2020 and 2019 were $5,259, $12,067, $10,313 and $27,256, respectively.

(16) Provisions

Analysis of total provisions: Balance at January 1 Additional provisions Used during the period Unused amounts reversed Exchange difference Balance at June 30 Current Non-current	2020 12,600 $ $ 3,018 1,405) ( ( - ( 264) ( ( 13,949 $ $ June 30,2020 December 31, 2019 13,042 $ 10,935 $ 907 $ 1,665 $	2019 37,884 2,901 3,528) 14,347) 712) 22,198 June 30,2019 19,408 $ 2,790 $

The Group gives warranties on sales-related products. Provision for warranty is estimated based on historical warranty data of uninterruptible power supply and solar energy products.

(17) Share capital

As of June 30, 2020, the Company’s authorised capital was $7,000,000, consisting of 0.7 billion shares of ordinary stock (including 50 million shares reserved for employee stock options and convertible bonds issued by the Company), and the paid-in capital was $2,280,283 with a par value of $10 (in dollars) per share. All proceeds from shares issued have been collected.

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

(Unit: In thousand shares) 2020 2019 At January 1 (At June 30) 228,028 228,028

(18) Capital surplus

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

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(19) Retained earnings

A. Under the Company's Articles of Incorporation, the current year's earnings, if any, shall first be used to pay all taxes and offset prior year's operating losses, then 10% of the remaining amount shall be set aside as legal reserve until the legal reserve equals the total capital stock balance. After setting aside or reversal of a special reserve in accordance with related laws, the Company shall appropriate dividends to preferred stock. The Board of Directors should present the distribution of the remaining earnings along with accumulated unappropriated earnings for the approval of the shareholders to distribute dividends to shareholders.
B. As the Company is in the growth stage, considered entire environment and nature of industry as well as future capital needs and long-term financial plans in order to subsequent operation and stable development. Based on the Company’s future budget of capital expenditure and demand of capital, the Company appropriated no less than 30% of distributable earnings to shareholders’ dividends, but if the distributable earnings is lower than 5% of paid-in capital, no dividends will be distributed. Cash dividend has a first priority when distributing shareholders’ dividends, and the ratio is 30~100% of current total dividends. Remaining dividend can be distributed in the form of stocks. The appropriation of retained earnings will be proposed by the Board of Directors every year, and will be approved by the shareholders.
C. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company’s paid-in capital.
D. In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.
E. On June 18, 2020, the shareholders during their meeting resolved not to distribute dividends from 2019 earnings.
F. The appropriations of earnings of year 2018 as resolved by the shareholders at their meetings on June 19, 2019 are as follows:

June 19, 2019 are as follows:
Legal reserve Special reserve Cach dividends	Year ended December 31,2018
	Amount 5,211 $ 109,980 45,606 160,797 $	Dividends per share (in dollars)
		0.20 $

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(20) Other equity items

(21)

Operating revenue
Unrealised gains (losses)
from financial assets
measured at fair value
through other
comprehensive income
Financial statements
translation
differences of
foreign operations
Total
At January 1
144,506)
($ 104,070)
($ 248,576)
($ The Company's effect
1,381)
(
-
1,381)
(
Effects of associate accounted for
under equity method
81,085)
(
31,447)
(
112,532)
(
Tax effects of associate accounted
for under equity method
-

6,289
6,289
At June 30
226,972)
($
129,228)
($ 356,200)
($ 2020
Unrealised gains (losses)
from financial assets
measured at fair value
through other
comprehensive income
Financial statements
translation
differences of
foreign operations
Total
At January 1
134,492)
($ 58,934)
($ 193,426)
($ The Company's effect
1,096
-
1,096
Effects of associate accounted for
under equity method
-
17,117
17,117
Tax effects of associate accounted
for under equity method
-
3,424)
(
3,424)
(
At June 30
133,396)
($ 45,241)
($ 178,637)
($ 2019
2020
2019
Revenue from contracts with customers
1,104,981
$ 1,488,817
$ 2020
2019
Revenue from contracts with customers
2,008,402
$ 3,175,065
$ Three months ended June 30,
Six months ended June 30,

A. Disaggregation of revenue from contracts with customers

The Group derives revenue in the following major product lines and geographical regions:

~29~

			Three months ended	Three months ended	Three months ended	June30,2020
		USA	MainlandChina			Other		Total
Total segment revenue	$	591,860	$	304,474	$	649,811	$	1,546,145
Inter-segment revenue	(	58,165)		-	(	382,999)	(	441,164)
Revenue from external customer
contracts	$	533,695	$	304,474	$	266,812	$	1,104,981
			Three months ended			June30,2019
		USA	MainlandChina			Other		Total
Total segment revenue	$	865,791	$	336,693	$	1,263,567	$	2,466,051
Inter-segment revenue	(	308)	(	50,398)	(	926,528)	(	977,234)
Revenue from external customer
contracts	$	865,483	$	286,295	$	337,039	$	1,488,817
			Six months endedJune30,2020
		USA	Mainland China			Other		Total
Total segment revenue	$	1,022,062	$	482,589	$	1,296,224	$	2,800,875
Inter-segment revenue	(	58,285)		-	(	734,188)	(	792,473)
Revenue from external customer
contracts	$	963,777	$	482,589	$	562,036	$	2,008,402
			Six months ended June 30, 2019
		USA	MainlandChina			Other		Total
Total segment revenue	$	1,819,714	$	669,122	$	2,323,353	$	4,812,189
Inter-segment revenue	(	598)	(	50,398)	(	1,586,128)	(	1,637,124)
Revenue from external customer
contracts	$	1,819,116	$	618,724	$	737,225	$	3,175,065

B. Contract liabilities from customers
(a) The Group has recognised the following revenue-related contract liabilities:

Contract liabilities: Contract liabilities- Products sales contracts	June 30, 2020 25,663 $	December31,2019 55,824 $	June30,2019
			120,967 $

(b) Revenue recognised that was included in the contract liability balance at the beginning of the period

period
Revenue recognised that was included in the contract liability balance at the beginning of the period Revenue recognised that was included in the contract liability balance at the beginning of the period	Three months endedJune30,
	2020 2019 2,271 $ 1,511 $ Six months ended June 30,	2019
		1,511 $
	2020 40,560 $	2019
		2,952 $

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(22) Interest income

Interest income
Interest income from bank deposits Interest income from bank deposits	Three months ended June 30,
	2020 2019 1,453 $ 2,167 $ Six months ended June 30,	2019
		2,167 $
	2020 3,489 $	2019
		4,289 $

(23) Other income

Other income
Other income, others Other income, others	Three months ended June 30,
	2020 2019 44,055 $ 10,301 $ Six months ended June 30,
	2020 45,352 $	2019
		13,039 $

A. In the second quarter of 2020, the Group recognised government grant income of $26,921 for salary and working capital subsidies from the Ministry of Economic Affairs under the ‘Salary and Working Capital Subsidies for Businesses Suffered by the COVID-19 Handled by the Ministry of Economic Affairs’.
B. In the second quarter of 2020, the Group recognised government grant income of $13,300 for the subsidiaries from the Ministry of Economic Affairs under the ‘Low Earth Orbit (LEO) Radio Frequency Front End (RFFE) Solution Development Plan’Other gains and losses.

(24) Other gains and losses

Other gains and losses
	Three	months	ended		June 30,
	2020				2019
(Losses) gains on disposals of property, plant and	($	36)		$	7,768
equipment
Currency exchange losses	(	4,262)	(		2,358)
Gains on financial assets (liabilities) at		3,578			405
fair value through profit or loss
Miscellaneous disbursements	(	290)	(		17,475)
	($	1,010)	($		11,660)

~31~

			Six months ended	Six months ended	Six months ended	June 30,
			2020			2019
Gains on disposals of property, plant and		$	65		$	8,534
equipment
Currency exchange losses	(		5,066)	(		2,763)
(Losses) gains on financial assets (liabilities) at	(		646)			527
fair value through profit or loss
Miscellaneous disbursements	(		1,120)	(		21,649)
	($		6,767)	($		15,351)

(25) Finance costs

Finance costs
Expenses by nature Interest expense Interest expense of lease liability Interest expense Interest expense of lease liability Employee benefit expense Depreciation charges on property, plant and equipment Amortisation Employee benefit expense Depreciation charges on property, plant and equipment Amortisation	2020 2019 1,816 $ 4,412 $ 1,617 1,518 3,433 $ 5,930 $ 2020 2019 3,928 $ 9,060 $ 3,234 3,500 7,162 $ 12,560 $ Threemonths ended June 30, Six months ended June 30, 2020 2019 232,834 $ 221,161 $ 29,637 27,913 7,736 7,343 270,207 $ 256,417 $ 2020 2019 455,611 $ 440,532 $ 59,109 56,172 14,979 14,426 529,699 $ 511,130 $ Three months ended June 30, Six months ended June 30,

		2020 2019 232,834 $ 221,161 $ 29,637 27,913 7,736 7,343 270,207 $ 256,417 $ Six months ended June 30,	2019
			221,161 $ 27,913 7,343
			256,417 $
		2020 455,611 $ 59,109 14,979 529,699 $	2019
			440,532 $ 56,172 14,426
			511,130 $

(26) Expenses by nature

~32~

(27) Employee benefit expense

Employee benefit expense
Salary expenses Labour and health insurance fees Pension costs Other personnel expenses Salary expenses Labour and health insurance fees Pension costs Other personnel expenses	2020 2019 206,107 $ 185,919 $ 14,265 13,653 5,594 13,054 6,868 8,535 232,834 $ 221,161 $ 2020 2019 402,003 $ 366,678 $ 29,137 27,264 11,137 29,169 13,334 17,421 455,611 $ 440,532 $ Three months ended June 30, Six months ended June 30,
		366,678 $ 27,264 29,169 17,421 440,532 $

A. According to the Articles of Incorporation of the Company, the ratio of distributable profit of the current year shall not be lower than 7% for employees’ compensation in the form of stocks/cash, and employees must be working for the Company. The current year's earnings, if any, shall not be higher than 1% for directors’ remuneration. Appropriation of employees’ compensation and directors’ remuneration shall be submitted to the shareholders’ meeting. If the Company has accumulated deficit, earnings should be reserved to cover losses and then be appropriated to employees’ compensation and directors’ remuneration based on the abovementioned ratios.
B. For the three months and six months ended June 30, 2020 and 2019, employees’ remuneration was accrued at $123, $26, $123 and $26, respectively; while directors’ remuneration was accrued at $18, $4, $18 and $4, respectively. The aforementioned amounts were recognized in salary expenses.
The employees’ compensation and directors’ and supervisors’ remuneration were estimated and accrued based on 7% and 1% of distributable profit of current year as of the end of reporting period.

For 2019, the employees’ compensation and directors’ remuneration resolved by the Board of Directors amounted to $128 and $0, respectively, which were in agreement with those amounts recognised in the 2019 financial statements.

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

~33~

(28) Income tax

A. Income tax expense

(a) Components of income tax expense:

e tax ome tax expense Components of income tax expense:
			Threemonths	ended June 30,
			2020			2019
Current tax:
Current tax on profits for the period		$	1,841		$	2,867
Tax of foreign source income withheld
at source			1,217			1,485
Prior year income tax overestimation	(		171)			-
Total current tax			2,887			4,352
Deferred tax:
Origination and reversal of temporary			7,579			18,097
differences
Impact of tax losses	(		7,579)	(		18,097)
Total deferred tax			-			-
Income tax expense		$	2,887		$	4,352

			Six months ended June 30,
			2020			2019
Current tax:
Current tax on profits for the period		$	3,566		$	5,483
Tax of foreign source income withheld
at source			1,217			2,614
Prior year income tax overestimation	(		171)			-
Total current tax			4,612			8,097
Deferred tax:
Origination and reversal of temporary			16,842			21,355
differences
Impact of tax losses	(		16,842)	(		24,155)
Total deferred tax			-	(		2,800)
Income tax expense		$	4,612		$	5,297

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

is as follows:
		Three months	ended June 30,
		2020	2019
Currency translation differences	($	5,811)	($	1,538)
		Six months ended June 30,
		2020	2019
Currency translation differences	($	6,289)	$	3,424

(c)The income tax charged/(credited) to equity during the period: None.

~34~

B. The Company’s income tax returns through 2017 have been assessed and approved by the Tax Authority.

(29) Earnings per share

==> picture [468 x 424] intentionally omitted <==

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

Three months ended June 30, 2020
Weighted average
number of ordinary
shares outstanding Earnings per share
Amount after tax (share in thousands) (in dollars)
Basic earnings per share
Profit attributable to the parent $ 18,658 228,028 $ 0.08
Diluted earnings per share
Profit attributable to the parent 18,658 228,028
Assumed conversion of all dilutive
potential ordinary shares
Employees’ compensation - 5
$ 18,658 228,033 $ 0.08
Three months ended June 30, 2019
Weighted average
number of ordinary
shares outstanding Earnings per share
Amount after tax (share in thousands) (in dollars)
Basic earnings per share
Profit attributable to the parent $ 537 228,028 $ 0.002
Diluted earnings per share
Profit attributable to the parent 537 228,028
Assumed conversion of all dilutive
potential ordinary shares
Employees’ compensation - 1
$ 537 228,029 $ 0.002
----- End of picture text -----

~35~

			Six	Six	months ended June 30,2020	months ended June 30,2020	months ended June 30,2020	months ended June 30,2020
					Weighted average
					number of ordinary
					shares outstanding		Earnings per share
	Amount	after	tax		(shareinthousands)			(indollars)
Basic earnings per share
Profit attributable to the parent	$	1,610			228,028		$	0.01
Diluted earnings per share
Profit attributable to the parent		1,610			228,028
Assumed conversion of all dilutive
potential ordinary shares
Employees’ compensation				-	12
	$	1,610			228,040		$	0.01
			Six		months ended June 30, 2019
					Weighted average
					number of ordinary
					shares outstanding		Earnings per share
	Amount	after	tax		(shareinthousands)			(indollars)
Basic earnings per share
Profit attributable to the parent	$	3,135			228,028		$	0.01
Diluted earnings per share
Profit attributable to the parent		3,135			228,028
Assumed conversion of all dilutive
potential ordinary shares
Employees’ compensation				-	179
	$	3,135			228,207		$	0.01
Supplemental cash flow information
A. Investing activities with partial cash payments:
					Six months ended			June 30,
					2020			2019
Purchase of property, plant and equipment			$		42,949		$	25,210
Add: Opening balance of payable	on equipment				24,037			28,881
Ending balance of prepayment for equipment					1,112			-
Less: Ending balance of payable on equipment			(		18,912)	(		19,484)
Opening balance of prepayment for
equipment			(		1,123)	(		227)
Cash paid during the period			$		48,063		$	34,380

(30) Supplemental cash flow information

B. Financing activities with no cash flow effects:

~36~

Changes in liabilities from financing activities Cash dividends payable Payments of lease liabilities January 1, 2020 311,032 $ Changes in cash flow from financing activities 19,241) ( Impact of changes in foreign exchange rate 975) ( Interest expense 3,234 June 30, 2020 294,050 $ Payments of lease liabilities January 1, 2019 378,746 $ Changes in cash flow from financing activities 19,484) ( Impact of changes in foreign exchange rate 1,119 Changes in other non-cash items 29,489) ( Interest expense 3,500 June 30, 2019 334,392 $	Changes in liabilities from financing activities Cash dividends payable Payments of lease liabilities January 1, 2020 311,032 $ Changes in cash flow from financing activities 19,241) ( Impact of changes in foreign exchange rate 975) ( Interest expense 3,234 June 30, 2020 294,050 $ Payments of lease liabilities January 1, 2019 378,746 $ Changes in cash flow from financing activities 19,484) ( Impact of changes in foreign exchange rate 1,119 Changes in other non-cash items 29,489) ( Interest expense 3,500 June 30, 2019 334,392 $	2020 2019 - $ 45,606 $ Six months endedJune30, Short-term borrowings Long-term borrowings Total 396,748 $ 125 $ 707,905 $ 89,877) ( 307,820 198,702 855) ( - 1,830) ( - - 3,234 306,016 $ 307,945 $ 908,011 $ Short-term borrowings Long-term borrowings Total 559,660 $ - $ 938,406 $ 42,356) ( - 61,840) ( 126) ( - 993 - - 29,489) ( - - 3,500 517,178 $ - $ 851,570 $
January 1, 2020 Changes in cash flow from financing activities Impact of changes in foreign exchange rate Interest expense June 30, 2020 January 1, 2019 Changes in cash flow from financing activities Impact of changes in foreign exchange rate Changes in other non-cash items Interest expense June 30, 2019
		396,748 $ 89,877) ( 855) ( - 306,016 $ Short-term borrowings
	378,746 $ 19,484) ( 1,119 29,489) ( 3,500 334,392 $	559,660 $ 42,356) ( 126) ( - - 517,178 $

7. RELATED PARTY TRANSACTIONS

(1) Names of related parties and relationship

Names of related parties Cybertan Technology Inc.

Relationship with the Company Entities with significant influence to the Group

(2) Significant related party transactions

A. Operating revenue

Three months ended June 30, 2020 2019 Sales of goods: Cybertan Technology Inc. $ 18,644 $ 59,260

Sales of goods:

~37~

Sales of goods: Cybertan Technology Inc.	2020 2019 94,563 $ 178,073 $ Six months ended June 30,

The sales prices are based on mutual agreement, and no similar transactions can be compared with. The credit terms are 30 days from invoice date for the related parties. For third parties, credit terms are 30~90 days from invoice date or after monthly billings.

B. Purchases

B. Purchases
C. Receivables from related parties D. Payables to related parties Purchases of goods: Entities with significant influence Purchases of goods: Entities with significant influence Accounts receivable: Entities with significant influence to the Group Other receivables: Entities with significant influence to the Group Accounts payable: Entities with significant influence to the Group	to the Group to the Group June 30,2020	2020 2019 - $ 654 $ Three months ended June 30, Six months ended June 30,
			2019
			1,365 $

`－` E. Lease transactions lessee

(a) The Group leases buildings from Cybertan Technology Inc.. Rental contracts are typically made for periods of 10 years. Rents are paid at the end of year.
(b) Acquisition of right-of-use assets:

made for periods of 10 years. Rents are paid at the end of year. Acquisition of right-of-use assets:
On January 1, 2019 (the date of initial application of IFRS 16), the Group use assets by $248,243. June30,2020 December31,2019 Cybertan Technology Inc. 207,204 $ 219,392 $	June30,2019
	235,831 $
	increased right-of-

~38~

(c) Lease liabilities

(i) Outstanding balance:

Lease liabilities (i) Outstanding balance:
	June30,2020	December31,2019		June30,	2019
Cybertan Technology Inc.	210,153 $	221,507 $		236,907 $
(ii) Interest expense
		Three months	ended June 30,
		2020		2019
Cybertan Technology Inc.	$	1,107	$		1,241
		Six months ended		June 30,
		2020		2019
Cybertan Technology Inc.	$	2,215	$		2,482

(d) As of June 30, 2020, December 31, 2019 and June 30, 2019, guarantee deposits paid (shown as ‘Other non-current assets’) to entities with significant influence to the Group both amounted to $1,972.

(3) Key management compensation

to $1,972. Key management compensation
Salaries and other short-term employee benefits Post-employment benefits Salaries and other short-term employee benefits Post-employment benefits	Three months ended June 30,
	2020 2019 10,222 $ 11,684 $ 423 497 10,645 $ 12,181 $ Six months ended June 30,	2019
		11,684 $ 497
		12,181 $
	2020 23,159 $ 773 23,932 $	2019
		25,159 $ 999
		26,158 $

8. PLEDGED ASSETS

The Group’s assets pledged as collateral are as follows:

Book value

Pledged asset Time deposits (shown as ‘Financial assets at amortised cost-current’)	June 30,2020 December 31,2019 523 $ 537 $	June 30,2019 Purpose 565 $ Guarantee for business card	Purpose

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT

COMMITMENTS

None.

~39~

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

Please refer to 6(14) B for the details.

12. OTHERS

(1) Capital management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, issue new shares or sell assets to reduce debt.

(2) Financial instruments

A. Financial instruments by category

t. ancial instruments Financial instruments by category
Financial assets Financial assets at fair value through profit or loss Financial assets mandatorily measured at fair value through profit or loss Financial assets at fair value through other comprehensive income Designation of equity instrument Financial assets at amortised cost Cash and cash equivalents Financial assets at amortised cost Notes receivable Accounts receivable (including related party transactions) Other receivables (including related party transactions) Guarantee deposits paid Financial liabilities Financial liabilities at fair value through profit or loss Financial liabilities held for trading Financial liabilities at amortised cost Short-term borrowings Accounts payable (including related party transactions) Other payables Long-term borrowings Lease liability	June30,2020 December31,2019 2,132 $ 8,667 $ 146,400 224,207 986,763 1,057,733 28,192 28,235 - 9,024 1,134,195 1,115,134 43,381 127,014 4,521 4,441 2,345,584 $ 2,574,455 $ June30,2020 December31,2019 380 $ 273 $ 306,016 396,748 803,407 919,456 294,699 358,092 307,945 125 1,712,447 $ 1,674,694 $ 294,050 $ 311,032 $	June30,2019 8,521 $ 246,151 1,097,251 28,905 - 1,316,313 106,415 10,412
		2,813,968 $
		June30,2019
		1,493 $ 517,178 1,141,996 412,345 -
		2,073,012 $
		334,392 $

~40~

B. Financial risk management policies
There was no significant change in the reporting period. Please refer to Note 12 in the consolidated financial statements for the year ended December 31, 2019.
C. Significant financial risks and degrees of financial risks
(a) Market risk

Foreign exchange risk

i. The Group operates internationally and is exposed to exchange rate risk arising from the transactions of the Company and its subsidiaries used in various functional currency, primarily with respect to the USD, EUR and RMB. Exchange rate risk arises from future commercial transactions and recognised assets and liabilities.
ii. Management has set up a policy to require group companies to manage their foreign exchange risk against their functional currency. The group companies are required to hedge their entire foreign exchange risk exposure with the Company treasury. To manage their foreign exchange risk arising from future commercial transactions and recognised assets and liabilities, entities in the Group uses forward foreign exchange contracts, transacted with Company treasury.
iii. The Group hedges foreign exchange rate by using forward exchange and cross currency swap contracts. However, the Group does not adopt hedging accounting. Details of financial assets or liabilities at fair value through profit or loss are provided in Notes 6(2) and (12).
iv. The Group’s businesses involve some non-functional currency operations (the Company’s and certain subsidiaries’ functional currency: NTD; other certain subsidiaries’ functional currency: RMB). The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

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

June 30, 2020
Foreign currency
amount Exchange Book value
(In thousands) rate (NTD)
(Foreign currency ：
functional currency)
Financial assets
Monetary items
----- End of picture text -----

(Foreign currency`：` functional currency) Financial assets Monetary items	(In thousands) rate	(In thousands) rate	(NTD)
USD:NTD RMB:NTD EUR:NTD USD:RMB Financial liabilities Monetary items USD:NTD RMB:NTD EUR:NTD USD:RMB (Foreign currency`：` functional currency) Financial assets Monetary items USD:NTD RMB:NTD EUR:NTD USD:RMB Financial liabilities Monetary items USD:NTD RMB:NTD EUR:NTD USD:RMB	37,218 $ 29.63 5,422 4.19 487 33.27 8,750 7.08 27,960 $ 29.63 31,048 4.19 559 33.27 9,722 7.08 December 31,2019		1,102,769 $ 22,718 16,202 259,263 828,455 $ 130,091 18,598 288,063
	Foreign currency amount (In thousands) 55,834 $ 44 1,070 25,058 49,578 $ 5,200 1,125 20,623	Exchange rate 29.98 4.30 33.59 6.98 29.98 4.30 33.59 6.98	Book value (NTD)
			1,673,903 $ 189 35,941 751,239 1,486,348 $ 22,360 37,789 618,278

~42~

June 30, 2019

			June 30,2019
	Foreign currency
		amount	Exchange		Book value
		(In thousands)	rate		(NTD)
(Foreign currency`：`
functional currency)
Financial assets
Monetary items
USD:NTD	$	53,626	31.06	$	1,665,624
RMB:NTD		14,987	4.52		67,741
EUR:NTD		1,052	35.38		37,220
USD:RMB		8,995	6.87		279,385
Financial liabilities
Monetary items
USD:NTD	$	34,316	31.06	$	1,065,855
RMB:NTD		69,918	4.52		316,029
EUR:NTD		1,081	35.38		38,246
USD:RMB		29,861	6.87		927,483

v. The total exchange loss, including realised and unrealised arising from significant foreign exchange variation on the monetary items held by the Group for the three months and six months ended June 30, 2020 and 2019 amounted to $4,262, $2,358, $5,066 and $2,763, respectively.
vi. Analysis of foreign currency market risk arising from significant foreign exchange variation:

~43~

(Foreign currency`：` functional currency) Financial assets Monetary items USD:NTD RMB:NTD EUR:NTD USD:RMB Financial liabilities Monetary items USD:NTD RMB:NTD EUR:NTD USD:RMB	Effect on Effect on other comprehensive Degree of variation profit or loss income 1% 11,028 $ - $ 1% 227 - 1% 162 - 1% 2,593 - 1% 8,285) ($ - $ 1% 1,301) ( - 1% 186) ( - 1% 2,881) ( - Six months ended June 30,2020 Sensitivityanalysis

(Foreign currency`：` functional currency) Financial assets Monetary items USD:NTD RMB:NTD EUR:NTD USD:RMB Financial liabilities Monetary items USD:NTD RMB:NTD EUR:NTD USD:RMB	Six months ended June 30,2019	Six months ended June 30,2019
	Sensitivityanalysis
	Effect on Degree of variation profit or loss `1%` 16,656 $ `1%` 677 `1%` 372 `1%` 2,794 `1%` 10,659) ($ `1%` 3,160) ( `1%` 382) ( `1%` 9,275) (	Effect on other comprehensive income
		`-` `$` `-` `-` `-` `-` `$` `-` `-` `-`

~44~

Price risk

i. The Group’s equity securities, which are exposed to price risk, are the held financial assets at fair value through profit or loss, financial assets at fair value through other comprehensive income and available-for-sale financial assets. To manage its price risk arising from investments in equity securities, the Group diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Group.
ii. The Group’s investments in equity securities comprise shares issued by the overseas and domestic companies. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased/decreased by 1% with all other variables held constant, post-tax profit for the six months ended June 30, 2020 and 2019 would have increased/decreased by $0 and $62, respectively, as a result of gains/losses on equity securities classified as at fair value through profit or loss. Other components of equity would have increased/decreased by $1,464 and $2,462, respectively, as a result of other comprehensive income classified as available-for-sale equity investment and equity investment at fair value through other comprehensive income.
(b) Credit risk
i. Credit risk refers to the risk of financial loss to the Group arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the accounts receivable based on the agreed terms, and the contract cash flows of debt instruments stated at amortised cost and at fair value through profit or loss.
ii. The Group manages their credit risk taking into consideration the entire group’s concern. For banks and financial institutions, only independently rated parties with a optimised credit rating are accepted. According to the Group’s credit policy, each local entity in the Group is responsible for managing and analysing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by management. The utilisation of credit limits is regularly monitored.
iii.Impairment assessment of credit risk on financial assets at amortised cost is as follows:
- (i) The Group adopts following assumptions under IFRS 9, if the contract payments were past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.
- (ii) In line with credit risk management procedure, when the counterparty is unable to pay the past-due payables, the default has occurred.
- (iii) The Group used the forecastability to adjust historical and timely information and

~45~

considered credit rating of issue banks to assess the default possibility of accounts and notes receivable.

(iv) The Group’s financial assets at amortised cost are including time deposits deposited in banks and restricted time deposits. Such banks all have optimised credit rating, no past due has occurred, and no significant changes in the entire economic environment, therefore no credit loss is expected and the impact to the financial statement is remote.
iv. Impairment assessment of credit risk on accounts and notes receivable is as follows:
(i) The Group classifies customers’ accounts and notes receivable in accordance with credit rating of customer. The Group applies the simplified approach using provision matrix to estimate expected credit loss under the provision matrix basis.
(ii) The Group used the forecastability to adjust historical and timely information to assess the default possibility of accounts and notes receivable. As of June 30, 2020, December
- 31, 2019 and June 30, 2019, the provision matrix is as follows:

June 30, 2020 Expected loss rate Total book value Loss allowance December 31, 2019 Expected loss rate Total book value Loss allowance June 30, 2019 Expected loss rate Total book value Loss allowance	Not past due 0%-1% 723,881 $ - $ Not past due 0%-1% 907,138 $ - $ Notpast due 0%-1% 984,084 $ - $	90 days past due 0%-1% 404,879 $ 2 $ 90 days past due 0%-1% 145,858 $ - $ 90 days past due 0%-1% 320,386 $ 2 $	91-180 days past due 0%-1% 5,407 $ 3 $ 91-180 days past due 0%-1% 20,937 $ - $ 91-180 days past due 0%-1% 11,846 $ 1 $	Over 181 days past due 0%-1% 731 $ 698 $ Over 181 days past due 0%-1% 51,478 $ 1,253 $ Over 181 days past due 0%-1% 1,250 $ 1,250 $	Total
					1,134,898 $ 703 $ Total
					1,125,411 $ 1,253 $ Total
					1,317,566 $ 1,253 $

(iii)Movements in relation to the Group applying the simplified approach to provide loss
allowance for accounts and notes receivable are as follows:


At January 1	$	1,253	$	1,242
Write-offs	(	1,212)		-
Provision for (reversal of) impairment loss		663	(	4)
Effect of exchange rate changes	(	1)		15
At June 30	$	703	$	1,253

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

~46~

(i) It becomes probable that the issuer will enter bankruptcy or other financial reorganization due to their financial difficulties;
(ii) The disappearance of an active market for that financial asset because of financial difficulties;
(iii) Default or delinquency in interest or principal repayments;
(iv) Adverse changes in national or regional economic conditions that are expected to cause a default.
vi. The Group used the forecastability to adjust historical and timely information to assess the default possibility of other receivables. As of June 30, 2020, December 31, 2019 and June 30, 2019, the provision matrix is as follows:

June 30, 2020 Expected loss rate Total book value Loss allowance December 31, 2019 Expected loss rate Total book value Loss allowance June 30, 2019 Expected loss rate Total book value Loss allowance	90 days Not past due past due 0% 0% 42,949 $ 432 $ - $ - $ 90 days Notpast due past due 0% 0% 126,650 $ 364 $ - $ - $ 90 days Notpast due past due 0% 0% 106,322 $ 93 $ - $ - $	91-180 days past due 0% - $ - $ 91-180 days past due 0% - $ - $ 91-180 days past due 0% - $ - $	Over 181 days past due 0% - $ - $ Over 181 days past due 0% - $ - $ Over 181 days past due 0%-1% - $ - $	Total
				43,381 $ - $ Total
				127,014 $ - $ Total
				106,415 $ - $

(c) Liquidity risk

i. Cash flow forecasting is performed in the operating entities of the Group and aggregated by Company treasury. Company treasury monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs.
ii. Company treasury invests surplus cash in interest bearing current accounts, time deposits, money market deposits and marketable securities, choosing instruments with appropriate maturities or sufficient liquidity to provide sufficient head-room as determined by the above-mentioned forecasts.
iii.The table below analyses the Group’s non-derivative financial liabilities and net-settled or gross-settled derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for nonderivative financial liabilities and to the expected maturity date for derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.

~47~

Less than 3 Between 3 months June 30, 2020 months and 1year Non-derivative financial liabilities Short-term borrowings 174,369 $ 132,282 $ Accounts payable (including related parties) 754,775 48,632 Other payables 294,699 - Long-term borrowings 586 20,472 Lease liability 9,578 28,734 Derivative financial Less than 3 Between 3 months liabilities months and 1 year Forward foreign exchange transactions 380 $ - $ Less than 3 Between 3 months December 31, 2019 months and 1year Non-derivative financial liabilities Short-term borrowings 397,282 $ - $ Accounts payable (including related parties) 859,017 60,439 Other payables 358,092 - Long-term borrowings - 2 Lease liability 9,529 28,586 Derivative financial Less than 3 Between 3 months liabilities months and 1year Forward exchange swap 273 $ - $ Less than 3 Between 3 months June 30, 2019 months and 1year Non-derivative financial liabilities Short-term borrowings 444,375 $ 75,154 $ Accounts payable (including related parties) 1,121,322 20,674 Other payables 412,345 - Lease liability 9,752 29,256 Derivative financial Less than 3 Between 3 months liabilities months and 1year Forward exchange swap 1,493 $ - $	Between 1 and 2years - $ - - 76,904 38,312 Between 1 and 2 years - $ Between 1 and 2years - $ - - 2 38,115 Between 1 and 2years - $ Between 1 and 2years - $ - - 39,008 Between 1 and 2years - $	Between 2 and5 years - $ - - 215,183 114,935 Between 2 and 5 years - $ Between 2 and5 years - $ - - 127 114,344 Between 2 and5 years - $ Between 2 and5 years - $ - - 117,024 Between 2 and5 years - $	Over 5 years - $ - - 1,291 150,056 Over 5 years - $ Over 5 years - $ - - - 168,620 Over 5 years - $ Over 5 years - $ - - 191,800 Over 5 years - $	Total 306,651 $ 803,407 294,699 314,436 341,615 Total 380 $ Total 397,282 $ 919,456 358,092 131 359,194 Total 273 $ Total 519,529 $ 1,141,996 412,345 386,840 Total 1,493 $

(3) Fair value information

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

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the

entity can access at the measurement date. A market is regarded as active where a

~48~

market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The fair value of the Group’s derivative instruments and emerging stocks are included in Level 2.
Level 3: Unobservable inputs for the asset or liability. The fair value of the Group’s investment in equity investment without active market is included in Level 3.
B. Financial instruments not measured at fair value

The carrying amounts of cash and cash equivalents, notes receivable, accounts receivable, other receivables, financial assets at amortised cost, other financial assets, short-term borrowings, accounts payable and other payables are approximate to their fair values.

C. The related information of financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities are as follows:
(a) The related information of natures of the assets and liabilities is as follows:

June 30, 2020 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Forward exchange swap transactions and forward foreign exchange contracts Financial assets at fair value through other comprehensive income Equity securities Liabilities Recurring fair value measurements Financial liabilities at fair value through profit or loss Forward foreign exchange contracts	Level 1 - $ - - $ - $	Level 2 2,132 $ - 2,132 $ 380 $	Level 3 - $ 146,400 146,400 $ - $	Total
				2,132 $ 146,400
				148,532 $
				380 $

~49~

December 31, 2019 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Forward exchange swap transactions and forward foreign exchange contracts Convertible bonds Financial assets at fair value through other comprehensive income Equity securities Liabilities Recurring fair value measurements Financial liabilities at fair value through profit or loss Forward exchange swap transactions June 30, 2019 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Forward exchange swap transactions and forward foreign exchange contracts Convertible bonds Financial assets at fair value through other comprehensive income Equity securities Liabilities Recurring fair value measurements Financial liabilities at fair value through profit or loss Forward exchange swap transactions	Level 1 - $ - - - $ - $ Level 1 - $ - - - $ - $	Level 2 2,671 $ - - 2,671 $ 273 $ Level 2 2,309 $ - 5,280 7,589 $ 1,493 $	Level 3 - $ 5,996 224,207 230,203 $ - $ Level 3 - $ 6,212 240,871 247,083 $ - $	Total
				2,671 $ 5,996 224,207
				232,874 $
				273 $
				Total
				2,309 $ 6,212 246,151
				254,672 $
				1,493 $

(b) The methods and assumptions the Group used to measure fair value are as follows:
i. When assessing non-standard and low-complexity financial instruments, for example, interest rate swap contracts and foreign exchange swap contracts, the Group adopts valuation technique that is widely used by market participants. The inputs used in the valuation method to measure these financial instruments are normally observable in the market.
ii. The output of valuation model is an estimated value and the valuation technique may not be able to capture all relevant factors of the Group’s financial instruments. Therefore, the estimated value derived using valuation model is adjusted accordingly with additional inputs, for example, model risk or liquidity risk and etc. In accordance with the Group’s

~50~

management policies and relevant control procedures relating to the valuation models used for fair value measurement, management believes adjustment to valuation is necessary in order to reasonably represent the fair value of financial and non-financial instruments at the consolidated balance sheet. The inputs and pricing information used during valuation are carefully assessed and adjusted based on current market conditions.

D. For the six months ended June 30, 2020 and 2019, there was no transfer between Level 1 and Level 2.
E. As of June 30, 2020, convertible bonds amounting to $5,996 were converted into 205,432 common shares. The following chart is the movement of Level 3 for the six months ended June 30, 2020 and 2019:

Derivative Equity securities instruments At January 1 224,207 $ 5,996 $ $ Transfers for the period 5,926 5,926) ( Loss recognised in other comprehensive income 82,466) ( - ( Net exchange differences 1,267) ( 70) ( ( At June 30 146,400 $ - $ $ 2020 Derivative Equitysecurities instruments At January 1 237,134 $ 6,143 $ Gain recognised in other comprehensive income 1 - Net exchange differences 3,736 69 At June 30 240,871 $ 6,212 $ 2019		2020		Total 230,203 - 82,466) 1,337) 146,400 Total

				243,277 $ 1 3,805
				247,083 $

F. Treasury department is in charge of valuation procedures for fair value measurements being categorised within Level 3, which is to verify independent fair value of financial instruments. Such assessment is to ensure the valuation results are reasonable by applying independent information to make results close to current market conditions, confirming the resource of information is independent, reliable and in line with other resources and represented as the exercisable price.
G. The following is the qualitative information of significant unobservable inputs and sensitivity analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair value measurement:

~51~

Unlisted shares Unlisted shares Venture capital shares Non-derivative equity instrument: Unlisted shares Unlisted shares Venture capital shares Non-derivative equity instrument: Unlisted shares Unlisted shares Venture capital shares Non-derivative equity instrument:	Fair value at Valuation Significant unobservable June 30,2020 technique input $ 11,292 Market comparable companies Discount for lack of marketability P/B ratio 12,960 Discounted cash flow Long-term pre-tax operating margin 122,148 Net asset value Not applicable Fair value at Valuation Significant unobservable December 31, 2019 technique input $ 9,276 Market comparable companies Discount for lack of marketability P/B ratio 54,811 Discounted cash flow Long-term pre-tax operating margin 160,120 Net asset value Not applicable Fair value at Valuation Significant unobservable June 30,2019 technique input $ 9,569 Market comparable companies Discount for lack of marketability P/B ratio 62,120 Discounted cash flow Long-term pre-tax operating margin 169,182 Net asset value Not applicable	Range Relationship of (weighted average) inputs to fair value 30% 100% The higher the discount for lack of marketability, the lower the fair value Not applicable The higher the long-term pre-tax operating margin, the higher the fair value Not applicable The higher the net assets value, the higher the fair value Range Relationship of (weighted average) inputs to fair value 30% 100% The higher the discount for lack of marketability, the lower the fair value Not applicable The higher the long-term pre-tax operating margin, the higher the fair value Not applicable The higher the net assets value, the higher the fair value Range Relationship of (weighted average) inputs to fair value 30% 100% The higher the discount for lack of marketability, the lower the fair value Not applicable The higher the long-term pre-tax operating margin, the higher the fair value Not applicable The higher the net assets value, the higher the fair value	Relationship of inputs to fair value

H. The Group has carefully assessed the valuation models and assumptions used to measure fair

value. However, use of different valuation models or assumptions may result in different measurement. The following is the effect of profit or loss or of other comprehensive income from financial assets categorised within Level 3 if the inputs used to valuation models have changed:

~52~

June 30, 2020

Input Financial assets Equity instruments Discount for lack of marketability P/B ratio Long-term pre-tax operating	Change ±10% ±10% ±1%	Favourable change - $ - - - $ Recognised in	Unfavourable change - $ - - - $ profit or loss	Favourable Unfavourable change change 338 $ 338) ($ 1,129 1,129) ( 130 130) ( 1,597 $ 1,597) ($ Recognised in other comprehensive income

Input Financial assets Equity instruments Discount for lack of marketability P/B ratio Long-term pre-tax operating	Change ±10% ±10% ±1%		December	Favourable Unfavourable change change 398 $ 398) ($ 928 928) ( 6,127 6,127) ( 7,453 $ 7,453) ($ 31,2019 comprehensive income Recognised in other
		Recognised in	Unfavourable change - $ - - - $ profit or loss
		Favourable change - $ - - - $

Input Financial assets Equity instruments Discount for lack of marketability P/B ratio Long-term pre-tax operating	Change ±10% ±10% ±10%		June 30,2019	June 30,2019	June 30,2019
		Recognised in	Unfavourable change - $ - - - $ profit or loss	Recognised in other comprehensive income
		Favourable change - $ - - - $		Favourable Unfavourable change change 410 $ 410) ($ 957 957) ( 1,242 1,242) ( 2,609 $ 2,609) ($	Unfavourable change

~53~

(4) Other

Due to the impact of the COVID-19 pandemic in 2020, there were supply problems in raw materials and shortage of workers in the production line of the suppliers in Mainland China. Although the suppliers gradually resumed their production, the operating revenue of the Company in the first half of 2020 was still affected because of the performance during the first quarter. However, the Company has rearranged the Group’s resources in response to the operational adjustments to minimise the impact.

13. SUPPLEMENTARY DISCLOSURES

(1) Significant transactions information

A. Loans to others: None.
B. Provision of endorsements and guarantees to others: None.
C. Holding of marketable securities at the end of the period: Please refer to table 1.
D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company’s paid-in capital: None.
E. Acquisition of real estate reaching $300 million or 20% of paid-in capital or more: None.
F. Disposal of real estate reaching $300 million or 20% of paid-in capital or more: None.
G. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 2.
H. Receivables from related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 3.
I. Trading in derivative financial instruments undertaken during the reporting periods: Please refer to Note 6(2) (12).
J. Significant inter-company transactions during the reporting periods: Please refer to table 4.
(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China): Please refer to table 5.

(3) Information on investments in Mainland China

A. Basic information: Please refer to table 6.
B. Significant transactions, either directly or indirectly through a third areas, with investee companies in the Mainland China: Please refer to table 7.

(4) Major shareholders information

Major shareholders information: Please refer to table 8.

14. SEGMENT INFORMATION

(1) General information

Management has determined the reportable operating segments based on the reports reviewed by the chief operating decision-maker, which is the General Manager, that are used to make strategic decisions and the Group was identified as a single reportable segment.

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(2) Measurement of segment information

The Group’s General Manager assesses the performance of the operating segments based on the pretax net income (loss).

(3) Information about segment profit or loss, assets and liabilities

Revenue from external customers Inter-segment revenue Total segment revenue Segment income Segment assets Segment liabilities	2020 2019 2,008,402 $ 3,175,065 $ 792,473 $ 1,637,124 $ 2,800,875 $ 4,812,189 $ 6,222 $ 8,432 $ 4,865,649 $ 5,609,205 $ 2,316,208 $ 2,877,330 $ Six months ended June 30,	2020 2019 2,008,402 $ 3,175,065 $ 792,473 $ 1,637,124 $ 2,800,875 $ 4,812,189 $ 6,222 $ 8,432 $ 4,865,649 $ 5,609,205 $ 2,316,208 $ 2,877,330 $ Six months ended June 30,
		3,175,065 $ 1,637,124 $
		4,812,189 $ 8,432 $
		5,609,205 $
		2,877,330 $

(4) Reconciliation for segment income (loss)

Total measurement of segment income is consistent with the operating income recorded in the Group’s financial statements, therefore, no reconciliation was needed.

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Table 1

Expressed in thousands of NTD

Microelectronics Technology, Inc. and Subsidiaries

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

June 30, 2020

(Except as otherwise indicated)

Securities held by Marketable securities Relationship with the securities issuer General ledger account		As ofJune 30,2020	As ofJune 30,2020
	Number of shares	Book value	Ownership (%)	Fair value
Microelectronics Technology, Inc. Stocks - TAIWAN AEROSPACE CORPORATION None Financial assets at fair value through other comprehensive income SASSON INTERNATIONAL HOLDING, INC. Stocks - Optical Scientific, Inc. None Financial assets at fair value through profit or loss SASSON INTERNATIONAL HOLDING, INC. Stocks - Firetide, Inc. None Financial assets at fair value through profit or loss SASSON INTERNATIONAL HOLDING, INC. Stocks - Taicom Capital Ltd. None Financial assets at fair value through other comprehensive income SASSON INTERNATIONAL HOLDING, INC. Stocks - New Edge Signal Solutions LCC None Financial assets at fair value through other comprehensive income SASSON INTERNATIONAL HOLDING, INC. Conversion of convertible bonds - Kymeta Corporation None Financial assets at fair value through profit or loss	648,576 16,023 1,333,360 20,000 1,355,663 205,432	7,895 $ - - 122,148 12,960 3,397	0.48 5.02 2.24 Note 12.5 0.05	7,895 $ - - 122,148 12,960 3,397
		146,400 $		146,400 $

Note: Holding of 10,000 ordinary shares and 10,000 preference shares for 11.43% and 16.67% ownership, respectively.

Table 1, Page1

Microelectronics Technology, Inc. and Subsidiaries

Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more

June 30, 2020

Table 2

Expressed in thousands of NTD (Except as otherwise indicated)

Purchaser/seller	Counterparty	Relationship with the counterparty		Transaction	Transaction		Differences in transaction terms compared to third party transactions	Differences in transaction terms compared to third party transactions	Notes/accounts receivable(payable)	Notes/accounts receivable(payable)	Note
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable (payable)
Microelectronics Technology, Inc. JUPITER TECHNOLOGY (WUXI) INC	JUPITER TECHNOLOGY (WUXI) INC Microelectronics Technology, Inc.	Indirect subsidiary of the Company Indirect subsidiary of the Company	Purchases Sales	450,895 $ 450,895) (	31% (41%)	90 days 90 days	Not applicable Not applicable	Not applicable Not applicable	317,122) ($ 317,122	(48%) 56%

Table 2, Page1

Microelectronics Technology, Inc. and Subsidiaries

Receivables from related parties reaching $100 million or 20% of paid-in capital or more

June 30, 2020

			June 30, 2020
Table 3 Creditor	Counterparty	Relationship with the counterparty	Balance as at June 30,2020	Turnover rate	Overdue receivables		Expressed in thousands of NTD (Except as otherwise indicated) Amount collected subsequent to the balance sheet date Allowance for doubtful accounts
					Amount	Action taken
JUPITER TECHNOLOGY (WUXI) INC	Microelectronics Technology, Inc.	Parent company	317,122 $	2.97	- $	-	101,274 $	- $

Table 3, Page1

Table 4

Expressed in thousands of NTD (Except as otherwise indicated)

Microelectronics Technology, Inc. and Subsidiaries

Significant inter-company transactions during the reporting periods

June 30, 2020

Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)			Transaction
				General ledgeraccount	Amount	Transaction terms	Percentage of consolidated total operating revenues ortotalassets
0 0 0 0 0 0 0 0 0	Microelectronics Technology, Inc. Microelectronics Technology, Inc. Microelectronics Technology, Inc. Microelectronics Technology, Inc. Microelectronics Technology, Inc. Microelectronics Technology, Inc. Microelectronics Technology, Inc. Microelectronics Technology, Inc. Microelectronics Technology, Inc.	JUPITER TECHNOLOGY (WUXI) INC. JUPITER TECHNOLOGY (WUXI) INC. JUPITER TECHNOLOGY (WUXI) INC. Radiocomp ApS Radiocomp ApS MTI Laboratory, INC. MTI Laboratory, INC. MTI Laboratory, INC. MTI Laboratory, INC.	1 1 1 1 1 1 1 1 1	Purchases and processing overhead Accounts payable Other current liabilities Research and development expenses Accrued expense Operating revenue Research and development expenses Accounts receivable Accrued expense	450,895 $ 317,122 23,105 45,043 17,231 58,285 40,729 57,374 48,835	Same as those to the third parties Payment term is 60 days from receipt of goods Based on the mutual agreement Same as those to the third parties Payment term is 30 days from receipt of goods Same as those to the third parties Same as those to the third parties Credit term is 30 days from receipt of goods Payment term is 30 days from receipt of goods	22.45% 6.51% 0.47% 2.24% 0.35% 2.90% 2.03% 1.18% 1.00%

Note 1: The information of transactions between the Company and the subsidiaries should be noted in “Number” column.

(1) Number 0 represents the Company.

(2) The consolidated subsidiaries are numbered in order from number 1.
Note 2: The transaction relationship with counterparties are as follows:
(1) The Company to the consolidated subsidiary.
(2) The consolidated subsidiaries to the Company.
(3) The consolidated subsidiaries to other consolidated subsidiaries.

Note 3: In calculating the ratio, the transaction amount is divided by consolidated total assets for balance sheet accounts and is divided by consolidated total revenues for income statement accounts. Note 4: Only transaction amounts over 10 million were disclosed and if transactions between parent company and subsidiaries or between subsidiaries refer to the same transaction, it was not required to be disclosed separately.

Table 4, Page1

Microelectronics Technology, Inc. and Subsidiaries

Information on investees

June 30, 2020

Table 5


Investor Table 5	Investee	Location	Main business activities	Initial investment amount		Shares held as at June 30,2020			Net profit (loss) of the investee for the six months ended June 30, 2020	Investment income (loss) recognised by the Company for the six months ended June 30, 2020 Note Expressed in thousands of NTD (Except as otherwise indicated)
				Balance as at June 30,2020	Balance as at December 31, 2019	Number of shares	Ownership (%)	Book value
Microelectronics Technology, Inc. SASSON INTERNATIONAL HOLDING, INC. SASSON INTERNATIONAL HOLDING, INC. Welltop Technology Co.,Ltd. Welltop Technology Co.,Ltd.	SASSON INTERNATIONAL HOLDING, INC. Welltop Technology Co.,Ltd. Jupiter Network Corp. MTI Laboratory, Inc. Radiocomp ApS	British Virgin IS. British Virgin IS. British Virgin IS. U.S.A DENMARK	Investment management Investment management Investment management Communications Communications	908,778 $ 232,121 920,657 44,445 139,320	908,778 $ 234,863 931,533 44,970 140,966	3,920 7,834,000 31,071,800 1,500,000 1,527,944	100 100 100 100 100	1,519,475 $ 323,513 949,212 128,629 174,088	6,325 $ 9,399 3,864) ( 7,974 1,095	5,782 $ 9,399 3,864) ( 7,974 1,095	Note 1 Note 2 Note 2 Note 2 Note 2

Note 1: Subsidiary of the Company. Note 2: Indirect subsidiary of the Company.

Table 5, Page1

Microelectronics Technology, Inc. and Subsidiaries

Information on investees in Mainland China

June 30, 2020

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Table 6
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Expressed in thousands of NTD (Except as otherwise indicated)

Investee in Mainland China	Main business activities	Paid-in capital	Investment method	Accumulated amount of remittance from Taiwan to Mainland China as of January1, 2020	Amount remitted from Taiwan to Mainland China / Amount remitted back to Taiwan for the six months ended June 30, 2020	Amount remitted from Taiwan to Mainland China / Amount remitted back to Taiwan for the six months ended June 30, 2020	Accumulated amount of remittance from Taiwan to Mainland China as of June 30, 2020	Net income of investee for the six months ended June 30, 2020	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the six months ended June 30, 2020 (Note 2)	Book value of investments in Mainland China as of June 30, 2020	Accumulated amount of investment income remitted back to Taiwan as of June 30, 2020	Note
					Remitted to Mainland China	Remitted back to Taiwan
JUPITER TECHNOLOGY (WUXI) INC (Note 1)	The manufactures and sales of satellite and microwave communication system and related technical and consultation services	918,530 $	Through investing in an existing company in the third area, which then invested in the investee in Mainland China.	918,530 $	$ -	$ -	918,530 $	3,865) ($	100	3,865) ($	949,171 $	$ -	-

Companyname	Accumulated amount of remittance from Taiwan to Mainland China as of June 30,2020	Investment amount approved by the Investment Commission of the Ministry of Economic Affairs (MOEA)	Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA
Microelectronics Technology, Inc.	$ 1,036,161	$ 1,155,807	$ 1,529,665

Note 1: It was indirectly invested through Jupiter Network Corp. Note 2: Investment profit or loss was recognised based on the financial statements that were audited by R.O.C. parent company’s CPA.

Table 6, Page1

Microelectronics Technology, Inc. and Subsidiaries

Significant transactions conducted with investees in Mainland China directly or indirectly through other companies in the third areas

June 30, 2020

Table 7

Expressed in thousands of NTD (Except as otherwise indicated)

Provision of

							Provision of	Provision of
Investee in Mainland China	Sale(purchase)		Propertytransaction		Accounts receivable(payable)		endorsements/guarantees or collaterals			Financing			Others(Note)
	Amount	%	Amount	%	Balance	%	Balance at June 30,2020	Purpose	Maximum balance during the six months ended June 30,2020	Balance at June 30,2020	Interestrate	Interest during the six months ended June 30,2020
JUPITER TECHNOLOGY (WUXI) INC	($ 450,895)	-	$ -	-	($ 317,122)	39	$ -	-	$ -	$ -	-	$ -	($ 23,105)

Note: It consisted of current liabilities amounting to $23,105.

Table 7, Page1

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Microelectronics Technology, Inc. and Subsidiaries
Major shareholders information
June 30, 2020
T able 8 Expressed in thousands of NTD
(Except as otherwise indicated)
Shares
Name of major shareholders No. of shares held Ownership (%)
Cybertan Technology Inc. 60,924,995 26.71%
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Note 1: The major shareholders information was from the data that the Company issued common shares (including treasury shares) and preference shares in dematerialised form which were registered and held by the shareholders above 5% on the last operating date of each quarter and was calculated by Taiwan Depository & Clearing Corporation.
The share capital which was recorded in the financial statements may differ from the actual number of shares issued in dematerialised form because of a different calculation basis
Note 2: If the aforementioned data contains shares which were kept at the trust by the shareholders, the data disclosed was the settlor’s separate account for the fund set by the trustee.
As for the shareholder who reports share equity as an insider whose shareholding ratio is greater than 10% in accordance with Securities and Exchange Act, the shareholding ratio includes the self-owned shares and trusted shares, at the same time, persons who have power to decide how to allocate the trust assets. For the information of reported share equity of insider, please refer to Market Observation Post System.

Table 8, Page1

AI assistant

MTI — Interim / Quarterly Report 2020

52003_rns_2020-11-12_df1c6295-99ec-46f8-94fd-dabbf187d305.pdf

MICROELECTRONICS TECHNOLOGY, INC. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

Introduction

Scope of Review

Conclusion

MICROELECTRONICS TECHNOLOGY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS JUNE 30, 2020, DECEMBER 31, 2019 AND JUNE 30, 2019

MICROELECTRONICS TECHNOLOGY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

JUNE 30, 2020, DECEMBER 31, 2019 AND JUNE 30, 2019

MICROELECTRONICS TECHNOLOGY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2020 AND 2019

MICROELECTRONICS TECHNOLOGY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY SIX MONTHS ENDED JUNE 30, 2020 AND 2019

Equity attributable to owners of the parent

MICROELECTRONICS TECHNOLOGY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

SIX MONTHS ENDED JUNE 30, 2020 AND 2019

MICROELECTRONICS TECHNOLOGY, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 2020 AND 2019

1. HISTORY AND ORGANISATION

2. THE DATE OF AUTHORISATION FOR ISSUANCE OF THE CONSOLIDATED FINANCIAL

STATEMENTS AND PROCEDURES FOR AUTHORISATION

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(1) Compliance statement

(2) Basis of preparation

(4) Employee benefits

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTION UNCERTAINTY

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

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

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

(4) Financial assets at amortised cost

(5) Notes and accounts receivable

(6) Inventories

(7) Property, plant and equipment

Details of property, plant and equipment for its own use are as follows:

－ (8) Leasing arrangements lessee

D. For the six months ended June 30, 2020 and 2019, the Group’s total cash outflow for leases was $26,857 and $36,268, respectively.

(9) Intangible assets

(10) Impairment of non-financial assets

(11) Short-term borrowings

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

(13) Other payables

- (14) Long term borrowings

(15) Pensions

(16) Provisions

(17) Share capital

(18) Capital surplus

(19) Retained earnings

(20) Other equity items

(22) Interest income

(23) Other income

(24) Other gains and losses

(25) Finance costs

(26) Expenses by nature

(27) Employee benefit expense

(28) Income tax

A. Income tax expense

(a) Components of income tax expense:

(30) Supplemental cash flow information

7. RELATED PARTY TRANSACTIONS

(1) Names of related parties and relationship

(2) Significant related party transactions

－ E. Lease transactions lessee

(c) Lease liabilities

(i) Outstanding balance:

(3) Key management compensation

8. PLEDGED ASSETS

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT

COMMITMENTS

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

12. OTHERS

(1) Capital management

(2) Financial instruments

A. Financial instruments by category

Foreign exchange risk

Price risk

(c) Liquidity risk

MTI Interim / Quarterly Report 2020

`－` (8) Leasing arrangements lessee

`－` E. Lease transactions lessee