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MTI Interim / Quarterly Report 2021

Nov 12, 2021

52003_rns_2021-11-12_9e5ea1fe-8ac6-4fc7-8769-7403aed28350.pdf

Interim / Quarterly Report

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MICROELECTRONICS TECHNOLOGY, INC. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

INDEPENDENT AUDITORS’ REVIEW REPORT MARCH 31, 2021 AND 2020

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.

~1~

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 March 31, 2021 and 2020, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the three 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 the 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.

~2~

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 March 31, 2021 and 2020, and of its consolidated financial performance and its consolidated cash flows for the three months then ended in accordance with the 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.

Li, Tien-Yi Lin, Yu-Kuan For and on behalf of PricewaterhouseCoopers, Taiwan May 5, 2021

------------------------------------------------------------------------------------------------------------------------------------------------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 independent auditors' review report 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.

~3~

MICROELECTRONICS TECHNOLOGY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS MARCH 31, 2021, DECEMBER 31, 2020 AND MARCH 31, 2020

(Expressed in thousands of New Taiwan dollars) (The balance sheets as of March 31, 2021 and 2020 are reviewed, not audited)

Assets Notes March 31, 2021
AMOUNT
%
$
1,115,930
21
-
-
27,309
1
-
-
1,032,302
19
26,014
-
80,568
1
288
-
1,093,900
20
102,221
2
3,478,532
64
-
-
115,378
2
530,093
10
504,867
9
302,399
6
483,410
9
9,973
-
1,946,120
36
$
5,424,652
100		 December 31, 2020
AMOUNT
%
$
1,324,793
25
5,275
-
27,260
-
4,081
-
939,742
17
29,008
1
37,818
1
340
-
1,008,191
19
74,798
1
3,451,306
64
-
-
114,443
2
522,570
10
520,624
9
304,576
6
481,756
9
4,508
-
1,948,477
36
$
5,399,783
100		 March 31, 2020 March 31, 2020
AMOUNT
$
1,115,930
-
27,309
-
1,032,302
26,014
80,568
288
1,093,900
102,221
3,478,532
-
115,378
530,093
504,867
302,399
483,410
9,973
1,946,120
$
5,424,652		 AMOUNT
$
1,324,793
5,275
27,260
4,081
939,742
29,008
37,818
340
1,008,191
74,798
3,451,306
-
114,443
522,570
520,624
304,576
481,756
4,508
1,948,477
$
5,399,783		 AMOUNT
$
1,168,086
-
28,458
-
868,214
55,338
32,254
222
935,175
65,462
3,153,209
6,045
188,622
517,211
327,096
300,775
407,016
5,129
1,751,894
$
4,905,103		 %
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) and 7
6(9)(10)
6(28)
7		 24
-
-
-
18
1
1
-
19
1
64
-
4
11
7
6
8
-
36
100

(Continued)

~4~

MICROELECTRONICS TECHNOLOGY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

MARCH 31, 2021, DECEMBER 31, 2020 AND MARCH 31, 2020

(Expressed in thousands of New Taiwan dollars) (The balance sheets as of March 31, 2021 and 2020 are reviewed, not audited)

March 31, 2021 December 31, 2020 December 31, 2020 March 31, 2020
Liabilities andEquity Notes AMOUNT % AMOUNT % AMOUNT %
Current Liabilities
2100 Short-term borrowings 6(11) $ 567,922 10 $ 368,098 7 $ 388,850 8
2120 Financial liabilities at fair value 6(12)
through profit or loss - current 1,522 - 876 - 1,826 -
2130 Current contract liabilities 6(21) 35,820 1 81,033 1 26,575 1
2170 Accounts payable 950,905 18 856,353 16 710,664 14
2200 Other payables 6(13) 256,949 5 363,447 7 290,336 6
2250 Provisions for liabilities - current 6(16) 76,137 1 75,744 1 12,927 -
2280 Current lease liabilities 6(8) and 7 57,844 1 81,730 2 31,786 1
2320 Long-term liabilities, current 6(14)
portion 8,182 - 52,340 1 - -
2399 Other current liabilities 7 3,638 - 8,896 - 14,472 -
21XX Total current liabilities 1,958,919 36 1,888,517 35 1,477,436 30
Non-current liabilities
2540 Long-term loans 6(14) 436,991 8 339,089 6 300,125 6
2550 Provisions for liabilities - non- 6(16)
current 1,014 - 2,327 - 1,199 -
2570 Deferred income tax liabilities 6(28) 102,624 2 107,094 2 98,419 2
2580 Non-current lease liabilities 6(8) and 7 425,056 8 439,656 8 271,963 6
2600 Other non-current liabilities 6(15) 196,738 4 203,570 4 156,677 3
25XX Total non-current liabilities 1,162,423 22 1,091,736 20 828,383 17
2XXX Total Liabilities 3,121,342 58 2,980,253 55 2,305,819 47
Equity
Equity attributable to owners of
parent
Share capital 6(17)
3110 Share capital-common stock 2,280,283 42 2,280,283 42 2,280,283 46
Capital Reserves 6(18)
3200 Capital surplus 402,937 7 402,937 8 402,937 8
Retained Earnings 6(19)
3310 Legal reserve 24,972 - 24,972 - 24,972 1
3320 Special reserve 193,426 4 193,426 4 193,426 4
3350 Accumulated deficit ( 229,030) ( 4) ( 117,336) ( 2) ( 14,635) -
Other Equity Interest 6(20)
3400 Other equity interest ( 369,278) ( 7) ( 364,752) ( 7) ( 287,699) ( 6 )
31XX Equity attributable to owners
of the parent 2,303,310 42 2,419,530 45 2,599,284 53
3XXX Total equity 2,303,310 42 2,419,530 45 2,599,284 53
Significant contingent liabilities and 9
unrecognised contract commitments
Significant events after the balance 11
sheet date
3X2X Total Liabilities and Equity $ 5,424,652 100 $ 5,399,783 100 $ 4,905,103 100

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

~5~

MICROELECTRONICS TECHNOLOGY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME THREE MONTHS ENDED MARCH 31, 2021 AND 2020

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

(Reviewed, not audited)

Items Three months ended March 31
2021
2020
Notes
AMOUNT
%
AMOUNT
%
6(21)
$
1,001,216
100
$
903,421
100
6(6)
(
893,389 ) (
89) (
752,468) (
83 )
107,827
11
150,953
17
6(26)(27)
(
29,315 ) (
3) (
38,441) (
4 )
(
32,880 ) (
3) (
32,476) (
4 )
(
164,122 ) (
17) (
88,935) (
10 )
4
- (
271)
-
(
226,313 ) (
23) (
160,123) (
18 )
(
118,486 ) (
12) (
9,170) (
1 )
6(22)
1,154
-
2,036
-
6(23)
6,059
1
1,297
-
6(24)
414
- (
5,757) (
1 )
6(25)
(
4,022 )
- (
3,729)
-
3,605
1 (
6,153) (
1 )
(
114,881 ) (
11) (
15,323) (
2 )
6(28)
3,187
- (
1,725)
-
($
111,694 ) (
11) ($
17,048) (
2 )
6(3)(20)
$
730
- ($
37,207) (
4 )
6(20)
(
6,570 ) (
1) (
2,394)
-
6(28)
1,314
-
478
-
( $
4,526 ) (
1) ($
39,123) (
4 )
( $
116,220 ) (
12) ($
56,171) (
6 )
( $
111,694 ) (
11) ($
17,048) (
2 )
-
-
-
-
( $
111,694 ) (
11) ($
17,048) (
2 )
( $
116,220 ) (
12) ($
56,171) (
6 )
-
-
-
-
( $
116,220 ) (
12) ($
56,171) (
6 )
6(29)
$
0.49 ($
0.07)
$
0.49 ($
0.07)
4000
Operating revenue
5000
Operating costs
5900
Gross profit
Operating expenses
6100
Selling expenses
6200
General and administrative expenses
6300
Research and development expenses
6450
Gain on reversal of expected credit
impairment
6000
Total operating expenses
6900
Operating loss
Non-operating income and expenses
7100
Interest income
7010
Other income
7020
Other gains and losses
7050
Finance costs
7000
Total non-operating income and
expenses
7900
Loss before income tax
7950
Income tax benefit (expense)
8200
Loss for the period
Other comprehensive income (loss)
Components of other comprehensive
loss that will not be reclassified to
profit or loss
8316
Unrealised loss from financial assets
measured at fair value through other
comprehensive income
Components of other comprehensive
income that will be reclassified to
profit or loss
8361
Currency translation differences of
foreign operations
8399
Income tax relating to the
components of other comprehensive
income that will be reclassified to
profit or loss
8300
Total other comprehensive loss for
the period
8500
Total comprehensive loss for the
period
Loss attributable to:
8610
Owners of the parent
8620
Non-controlling interest
Comprehensive loss attributable to:
8710
Owners of the parent
8720
Non-controlling interest
(Loss) earnings per share ( in dollars )
9750
Basic
9850
Diluted

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

~6~

MICROELECTRONICS TECHNOLOGY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY THREE MONTHS ENDED MARCH 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

(Reviewed, not audited)

2020
Balance at January 1, 2020
Loss for the period
Other comprehensive loss for the
period
Total comprehensive loss
Balance at March 31, 2020
2021
Balance at January 1, 2021
Loss for the period
Other comprehensive income
(loss) for the period
Total comprehensive income (loss)
Balance at March 31, 2021		 Notes Equity attributable to owners of the parent Equity attributable to owners of the parent Equity attributable to owners of the parent Equity attributable to owners of the parent Totalequity
Share capital-
commonstock		 Capital surplus,
additional paid-
incapital		 Retained earnings Other equity interest
Legal reserve Special reserve Unappropriated
retained
earnings
(accumulated
deficit)		 Exchange
differences on
translation of
foreign financial
statements		 Unrealised gains
(losses) from
financial assets
measured at fair
value through
other
comprehensive
income

6(3)
6(3)
 $ 2,280,283
-
-
-
$ 2,280,283
$ 2,280,283
-
-
-
$ 2,280,283		 $
402,937
-
-
-
$
402,937
$
402,937
-
-
-
$
402,937		 $
24,972
-
-
-
$
24,972
$
24,972
-
-
-
$
24,972		 $
193,426
-
-
-
$
193,426
$
193,426
-
-
-
$
193,426		 $
2,413
(
17,048)
-
(
17,048)
($
14,635)
($
117,336)
(
111,694)
-
(
111,694)
($
229,030)		 ($
104,070)
-
(
1,916)
(
1,916)
($
105,986)
($
110,123)
-
(
5,256)
(
5,256)
($
115,379)		 ($
144,506)
-
(
37,207)
(
37,207)
($
181,713)
($
254,629)
-
730
730
($
253,899)		 $ 2,655,455
(
17,048 )
(
39,123 )
(
56,171 )
$ 2,599,284
$ 2,419,530
(
111,694 )
(
4,526 )
(
116,220 )
$ 2,303,310

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

~7~

MICROELECTRONICS TECHNOLOGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

THREE MONTHS ENDED MARCH 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

(Reviewed, not audited)

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

Amortization

Net 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

Deferred revenue transferred to other income
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 generated from operations
Interest received
Interest paid
Income taxes paid
Net cash flows used in operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property, plant and equipment

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

Increase 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

Decrease in long-term borrowings

Repayment of principal portion of lease liabilities

Net cash flows from 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		 Three months ended March 31
Notes
2021
2020
( $
114,881 ) ( $
15,323 )
(
4 )
271
6(7)(8)(26)
37,581
29,472
6(9)(26)
8,293
7,243
6(2)(24)
5,240
2,671
6(12)(24)
604
1,553
6(22)
(
1,154 ) (
2,036 )
6(25)
4,022
3,729
6(24)
(
55 ) (
101 )
(
47 )
-
4,081
9,024
(
94,631 )
191,855
(
42,522 )
95,042
(
87,051 ) (
79,936 )
(
27,639 ) (
17,205 )
99,187 (
208,678 )
(
87,011 ) (
76,710 )
(
883 )
1,596
(
45,213 ) (
29,250 )
(
4,178 ) (
2,491 )
(
14,077 ) (
49,945 )
(
360,338 ) (
139,219 )
808
2,053
(
4,201 ) (
4,452 )
(
1,772 ) (
1,892 )
(
365,503 ) (
143,510 )
6(30)
(
50,609 ) (
26,570 )
839
2,411
6(9)
(
6,121 ) (
4,794 )
(
3,793 )
-
(
59,684 ) (
28,953 )
6(31)
533,919
270,326
6(31)
(
333,666 ) (
278,224 )
6(31)
58,380
300,000
6(31)
(
683 )
-
6(31)
(
38,587 ) (
8,006 )
219,363
284,096
(
3,039 ) (
1,280 )
(
208,863 )
110,353
1,324,793
1,057,733
$
1,115,930 $
1,168,086

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

~8~

MICROELECTRONICS TECHNOLOGY, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS THREE MONTHS ENDED MARCH 31, 2021 AND 2020

(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 was 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 May 5, 2021.

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 FSC effective from 2021 are as follows:

New Standards,Interpretations and Amendments Effective date by
International Accounting
Standards Board
Amendments to IFRS 4, ‘Extension of the temporary exemption from
applying IFRS 9’
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16, ‘
Interest Rate Benchmark Reform— Phase 2’
Amendment to IFRS 16, ‘Covid-19-related rent concessions beyond
30 June 2021’
Note：Earlier application from January 1, 2021 is allowed by FSC.		 January 1, 2021
January 1, 2021
April 1, 2021(Note)

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.

(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:

~9~

==> picture [481 x 66] intentionally omitted <==

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

Effective date by
International
Accounting
New Standards, Interpretations and Amendments Standards Board
----- End of picture text -----

New Standards,Interpretations and Amendments Effective date by
International
Accounting
Standards Board
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
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 1, ‘Disclosure of accounting policies’ January 1, 2023
Amendments to IAS 8, ‘Definition of accounting estimates’ January 1, 2023
Amendments to IAS 16, ‘Property, plant and equipment:proceeds before January 1, 2022
intended use’
Amendments to IAS 37, ‘Onerous contracts—cost of fulfilling a contract’ January 1, 2022
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, 2020, except for the compliance statement, basis of preparations and basis of consolidation 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, 2020.

  • (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.

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

~10~

  • 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, 2020.

  • B. Subsidiaries included in the consolidated financial statements:

==> picture [474 x 29] intentionally omitted <==

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

Main business Ownership (%)
Name of investor Name of subsidiary activities March 31, 2021 December 31, 2020 March 31, 2020
----- End of picture text -----

Name of investor Name of subsidiary activities March31,2021 December31,2020 March31,2020
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 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

~11~

one-off events. Also, 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, 2020.

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		 March 31,2021
276
$ 800,613
315,041
1,115,930
$		 December 31,2020
277
$ 839,380
485,136
1,324,793
$		 March 31, 2020
224
$ 697,595
470,267
1,168,086
$

  • 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.

~12~

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

Items March 31,2021 December 31,2020 March 31,2020
Current items:
Financial assets mandatorily
measured at fair value
through profit or loss
Derivative instruments $ -
 $ 5,275
 $ -
Unlisted stocks 105,719
 105,515
 111,980
Valuation adjustments ( 105,719) ( 105,515)
 ( 111,980)
$ -
 $ 5,275
 $ -
Non-current items：
Financial assets mandatorily
measured at fair value
through profit or loss
Convertible bonds $ -
 $ -
 $ 6,045
Valuation adjustments - - -
$ - $ -
 $ 6,045
  • 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 March 31
2021 2020
Financial assets mandatorily measured at fair
value through profit or loss
Derivative instruments 5,240)
($		 ($ 2,671)

~13~

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

==> picture [505 x 446] intentionally omitted <==

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

March 31, 2021 December 31, 2020
Contract amount Contract Contract amount Contract
Derivative instruments (Notional principal) period (Notional principal) period
Current items:
Foreign exchange USD - - USD 3,000 2020.11.12~
swap transactions 2021.01.15
Forward foreign USD - - USD 7,900 2020.11.03~
exchange contracts 2021.04.28
March 31, 2020
Contract amount Contract
Derivative instruments (Notional principal) period
Current items:
Foreign exchange USD - -
swap transactions
Forward foreign USD - -
exchange contracts
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).
Financial assets at fair value through other comprehensive income
Items March 31, 2021 December 31, 2020 March 31, 2020
Non-current items ：
Equity instruments
Unlisted stocks $ 346,760 $ 346,139 $ 359,771
Valuation adjustments ( 253,899) ( 254,629) ( 181,713)
Net exchange differences 22,517 22,933 10,564
$ 115,378 $ 114,443 $ 188,622
----- End of picture text -----

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

  • 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 $115,378, $114,443 and $188,622 as at March 31, 2021, December 31, 2020 and March 31, 2020, respectively.

  • B. For the three months ended March 31, 2020, the Group recognised impairment loss of $37,207 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.

~14~

  • 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:
assets at fair value through other comprehensive income are listed below: assets at fair value through other comprehensive income are listed below:
Financial assets at amortised cost
2021
2020
Equity instruments at fair value through other
comprehensive income
Fair value change recognised in other
comprehensive income (loss)
730
$ 37,207)
($ Three months ended March 31
Items
March 31,2021
December 31,2020
March 31,2020
Current items:
Time deposits
27,309
$ 27,260
$ 28,458
$

Items
Current items:
Time deposits
28,458
$

(4) Financial assets at amortised cost

  • A. Amounts recognised in profit or loss in relation to financial assets at amortised cost are listed below:
Interest income Three months ended March 31 Three months ended March 31
2021
21
$		 2020
150
$

  • B. As of March 31, 2021, December 31, 2020 and March 31, 2020 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 $27,390, $27,260 and $28,458, 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).

(5) Notes and accounts receivable

March 31,2021 December 31,2020 March 31,2020
Notes receivable $ -
 $ 4,081
 $ -
Less: Allowance for
uncollectible accounts - - -
$ - $ 4,081 $ -
Accounts receivable $ 1,032,576
 $ 940,020
 $ 868,530
Accounts receivable - 26,014 29,008 55,338
related party
Less: Allowance for
uncollectible accounts ( 274) ( 278) ( 316)
$ 1,058,316 $ 968,750 $ 923,552

~15~

  • A. The ageing analysis of accounts receivable and notes receivable that were past due but not impaired is as follows:
March 31, 2021 December 31, 2020 31, 2020 March 31, 2020
Accounts receivable Notes receivable Accounts receivable Notes receivable Accounts receivable Notes receivable
Not past due $ 698,410
 $ -
 $ 635,677
 $ 4,081
 $ 811,150
 $ -
Up to 90 days 306,358 -
 315,461 -
 90,191 -
91 to 180 days 38,077 - 15,642 - 2,456 -
Over 180 days 15,745 - 2,248
 - 20,071
 -
$ 1,058,590
 $ -
 $ 969,028
 $ 4,081
 $ 923,868
 $ -

The above ageing analysis was based on past due date. As of March 31, 2021, the subsequent collection of past-due accounts receivable amounted to $138,084.

  • B. As of March 31, 2021, December 31, 2020 and March 31, 2020, accounts receivable and notes receivable were all from contracts with customers. And as of January 1, 2020, the balance of receivables from contracts with customers amounted to $1,125,414.

  • C. As of March 31, 2021, December 31, 2020 and March 31, 2020, 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, $4081 and $0, respectively. As of March 31, 2021, December 31, 2020 and March 31, 2020, the maximum exposure to credit risk in respect of the amount that best represents the Group’s accounts receivable were $1,058,316, $968,750 and $923,552, respectively.

  • D. Information relating to credit risk of accounts and notes receivable is provided in Note 12(2).

  • (6) Inventories

Inventories
Raw materials
Work in progress
Finished goods
Raw materials
Work in progress
Finished goods		 March 31,2021
Allowance for inventory
valuation losses and loss
for obsolete and slow-
Cost
movingintentories
827,631
$ 47,958)
($ 230,963
43,790)
(
136,107
9,053)
(
1,194,701
$ 100,801)
($ December 31,2020		 Book value
779,673
$ 187,173
127,054
1,093,900
$
Allowance for inventory
valuation losses and loss
for obsolete and slow-
Cost
movingintentories
770,725
$ 62,913)
($ 187,431
45,645)
(
167,646
9,053)
(
1,125,802
$ 117,611)
($		 Book value
707,812
$ 141,786
158,593
1,008,191
$

~16~

March 31,2020
Allowance for inventory
valuation losses and loss
for obsolete and slow-
Cost movingintentories Book value
Raw materials $ 648,671
 ($ 99,802)
 $ 548,869
Work in progress 250,299
 ( 51,105)
 199,194
Finished goods 199,329
 ( 12,217)
 187,112
$ 1,098,299 ($ 163,124)
 $ 935,175

The cost of inventories recognised expense for the period:

Cost of goods sold
Loss on decline in market value
Recognised as selling and R&D expenses		 Three months ended March 31
2021
2020
889,244
$ 746,491
$ 4,145
5,977
7,961
2,278
901,350
$ 754,746
$

~17~

(7) Property, plant and equipment

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

Buildings and
Machinery and
Transportation
Leasehold
structures
equipment
Office equipment
equipment
improvements
At January 1
Cost
427,181
$ 986,153
$ 100,371
$ 2,150
$ 18,584
$ Accumulated depreciation
and impairment
102,904)
(
812,584)
(
81,731)
(
2,150)
(
12,500)
(
324,277
$ 173,569
$ 18,640
$ -
$ 6,084
$ At January 1
324,277
$ 173,569
$ 18,640
$ -
$ 6,084
$ Additions
-
14,272
1,688
-
820
Reclassifications
-
2,009
-
-
-
Disposals
-
784)
(
-
-
-
Depreciation expense
4,827)
(
13,992)
(
2,359)
(
-
691)
(
Net exchange differences
1,705)
(
1,134)
(
127)
(
-
-
At March 31
317,745
$ 173,940
$ 17,842
$ -
$ 6,213
$ At March 31
Cost
424,984
$ 987,753
$ 101,083
$ 2,154
$ 19,414
$ Accumulated depreciation
and impairment
107,239)
(
813,813)
(
83,241)
(
2,154)
(
13,201)
(
317,745
$ 173,940
$ 17,842
$ -
$ 6,213
$ 2021		 2021
Unfinished
construction and
equipment under
acceptance
Total
-
$ 1,534,439
$ -
1,011,869)
(
-
$ 522,570
$ -
$ 522,570
$ 14,353
31,133
-
2,009
-
784)
(
-
21,869)
(
-
2,966)
(
14,353
$ 530,093
$ 14,353
$ 1,549,741
$ -
1,019,648)
(
14,353
$ 530,093
$		 Total

~18~

2020

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 - 34,982 1,971 -
 - - 36,953
Reclassifications - 11,964 - - - ( 918)
 11,046
Disposals - ( 2,272)
 ( 38)
 - - - ( 2,310)
Depreciation expense ( 4,783)
 ( 12,810)
 ( 1,880)
 -
 ( 1,178)
 - ( 20,651)
Net exchange differences ( 2,393)
 ( 641)
 ( 21)
 - 2 - ( 3,053)
At March 31 $ 328,955 $ 170,115 $ 13,381 $ - $ 4,760 $ -
 $ 517,211
At March 31
Cost $ 415,487
 $ 999,955
 $ 92,833
 $ 2,266
 $ 15,203
 $ -
 $ 1,525,744
Accumulated depreciation
and impairment ( 86,532)
 ( 829,840)
 ( 79,452)
 ( 2,266)
 ( 10,443)
 - ( 1,008,533)
$ 328,955 $ 170,115 $ 13,381
 $ - $ 4,760 $ - $ 517,211

~19~

－ (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
Land
Buildings		 March 31,2021
Carrying amount
$ 26,740
478,127
504,867
$		 December 31, 2020
March 31, 2020
Carryingamount
Carrying amount
$ 27,057 $ 26,969
493,567

300,127

520,624
$ 327,096
$
Three months ended March 31		 December 31, 2020
March 31, 2020
Carryingamount
Carrying amount
$ 27,057 $ 26,969
493,567

300,127

520,624
$ 327,096
$
Three months ended March 31		 March 31, 2020
Carrying amount
$ 26,969
300,127

327,096
$
2020
Depreciation charge
$ 177
8,644
8,821
$
  • 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		 Three months ended March 31 Three months ended March 31
2021
2,528
$ 4,624
229		 2020
1,617
$ 1,388
702
  • D. For the three months ended March 31, 2021 and 2020, the Group’s total cash outflow for leases was $45,968 and $11,713, respectively.

~20~

(9) Intangible assets

Intangible assets
2021
Acquired special
Goodwill technology Computer sofware Total
At January 1
Cost $ 383,503
 $ 404,895
 $ 518,101
 $ 1,306,499
Accumulated depreciation
and impairment ( 116,272)
 ( 404,895)
 ( 480,756)
 ( 1,001,923)
$ 267,231 $ - $ 37,345
 $ 304,576
At January 1 $ 267,231
 $ -
 $ 37,345
 $ 304,576
Additions - - 6,121
 6,121
Amortisation charge - -
 ( 8,293)
 ( 8,293)
Net exchange differences 239 - ( 244)
 ( 5)
At March 31 $ 267,470
 $ - $ 34,929 $ 302,399
At March 31
Cost $ 383,503
 $ 404,895
 $ 523,636
 $ 1,312,034
Accumulated amortisation
and impairment ( 116,033)
 ( 404,895)
 ( 488,707)
 ( 1,009,635)
$ 267,470 $ - $ 34,929
 $ 302,399
2020
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 - - 4,794 4,794
Amortisation charge - - ( 7,243)
 ( 7,243)
Net exchange differences 1,063 - 41 1,104
At March 31 $ 274,804 $ - $ 25,971 $ 300,775
At March 31
Cost $ 383,503
 $ 404,895
 $ 489,370
 $ 1,277,768
Accumulated amortisation
and impairment ( 108,699)
 ( 404,895)
 ( 463,399)
 ( 976,993)
$ 274,804 $ - $ 25,971 $ 300,775

~21~

A. Details of amortisation on intangible assets are as follows:

Operating costs
General and administrative expenses
Research and development expenses		 Three months ended March 31 Three months ended March 31
2021
1,519
$ 271
6,503
8,293
$		 2020
1,343
$ 167
5,733
7,243
$

B. Impairment information about the intangible assets is provided in Note 6(10).

(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, 2020.

(11) Short-term borrowings

Type of borrowings
Bank borrowings
Export financing
Borrowings for material purchase
Unsecured borrowings
Type of borrowings
Bank borrowings
Export financing
Borrowings for material purchase
Type of borrowings
Bank borrowings
Borrowings for material purchase		 March 31, 2021
71,338
$ 336,584
160,000
567,922
$ December 31,2020
87,718
$ 280,380
368,098
$ March 31,2020
388,850
$		 Interest rate range
Collateral
0.72%
None
0.67%~1.20%
None
0.74%~0.75%
None
Interest rate range
Collateral
0.65%~0.87%
None
0.74%~1.23%
None
Interest rate range
Collateral
1.40%~2.70%
None

For the three months ended March 31, 2021 and 2020, the Group recognised interest expense in profit or loss amounting to $648 and $2,112 respectively, due to the short-term borrowings.

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

Items
Current items:
Financial liabilities held for
trading
Non-hedging derivatives
Valuation adjustments		 March 31,2021
1,522
$ -
1,522
$		 December 31,2020
876
$ -
876
$		 March 31,2020
1,826
$ -
1,826
$

A. For the three months ended March 31, 2021 and 2020, the Group recognised net loss on financial liabilities held for trading amounting to $604 and $1,553, respectively.

~22~

  • 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

Unit: In thousands Unit: In thousands
March 31, 2021 December 31,2020
Non-derivative financial Contract amount Contract amount
liabilities for hedging (Notionalprincipal)
 Contractperiod (Notionalprincipal) Contractperiod
Current items:
Forward foreign USD 4,890
 2021.02.26~ USD 9,560
 2020.10.12~
exchange contracts 2021.05.27 2021.03.26
Foreign exchange swap USD 3,000
 2021.03.11~ - -
transactions 2021.05.14
March 31,2020
Non-derivative financial Contract amount
liabilities for hedging (Notionalprincipal) Contractperiod
Current items:
Forward foreign
exchange contracts		 USD 5,000 2020.03.04~
2020.06.15
Foreign exchange swap
transactions		 USD 3,000 2020.03.12~
2020.05.15
  • 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.

(13) Other payables

Other payables
Employee bonus payable
Payable on miscellaneous purchases
Payables for machinery and equipment
Accrued export expenses
Payables for consulting service fees
Insurance expense payable
Others		 March 31,2021
117,464
$ 48,105
17,027
14,942
9,495
9,328
40,588
256,949
$		 December 31, 2020
199,209
$ 32,170
34,913
17,218
10,843
7,735
61,359
363,447
$		 March 31,2020
126,737
$ 31,141
34,016
27,434
9,458

6,598
54,952
290,336
$

- (14) Long term borrowings

Borrowing period Type of borrowings and repayment term Interest rate range Collateral March 31, 2021 Long-term bank borrowings Land Bank of Borrowing period is 0.800% None $ 40,259 Taiwan from February 05, 2021 to February 15, 2026; interest is repayable monthly.

~23~

Borrowing period
Type of borrowings
and repayment term
Long-term bank
borrowings
The Shanghai
Commercial &
Savings Bank
Borrowing period is
from March 31,
2020 to March 15,
2025; interest is
repayable monthly.
Mega Bank
Borrowing period is
from December 23,
2019 to September 15,
2026; interest is
repayable monthly.
Less: Current portion
Borrowing period
Type of borrowings
and repayment term
Long-term bank
borrowings
The Shanghai
Commercial &
Savings Bank
Borrowing period is
from March 31,
2020 to March 14,
2025; interest is
repayable monthly.
Mega Bank
Borrowing period is
from December 23,
2019 to September 15,
2026; interest is
repayable monthly.
Less: Current portion		 Interest rate range
Collateral
March 31,2021
0.750%
None
281,933
0.845%
None
122,981
445,173
8,182)
(
436,991
$ Interest rate range
Collateral
December 31,2020
0.750%
None
281,933
$ 0.845%
None
109,496
391,429
52,340)
(
339,089
$

~24~

==> picture [485 x 252] intentionally omitted <==

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

Borrowing period
Type of borrowings and repayment term Interest rate range Collateral March 31, 2020
Long-term bank
borrowings
Mega Bank Borrowing period is 0.973% None $ 125
from December 23,
2019 to December 15,
2025; interest is
repayable monthly.
The Shanghai Borrowing period is 0.750% None
Commercial & from March 31,
Savings Bank 2020 to March 14,
2025; interest is
repayable monthly. 300,000
300,125
-
Less: Current portion
$ 300,125
----- End of picture text -----

  • A. For the three months ended March 31, 2021 and 2020, the Group recognised interest expense in profit or loss amounting to $846 and $0, respectively, due to the long-term borrowings.

  • B. On January 1, 2019, Ministry of Economic Affairs, R.O.C. (“MOEA”) implemented the “Action B.Plan for Welcoming Overseas Taiwanese Businesses to Return to Invest in Taiwan” and companies are subsidised with preferential interest loans, 0.5% of loan interest is subsidised by the National Development Fund, Executive Yuan, for qualified investment projects. The Company has obtained the qualification from the MOEA, and signed loan agreements with financial institutions during December 2019 to May 2021 with the line of credit amounting to $1.09 billion and terms from five to six years. As of May 5, 2021, the Company has drawn down $0.633 billion. Funding from these borrowings were used to invest in machineries, equipment and broaden the Company’s working capital.

(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

~25~

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 ended March 31, 2021 and 2020 were $368 and $489, respectively.

  - (c) Expected contributions to the defined benefit pension plans of the Group for the year ending December 31, 2021 amount to $3,433.

  • 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 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 ended March 31, 2021 and 2020 were $12,372 and $5,054, respectively.

  • (16) Provisions

  • A. Warranties on sales-related products

visions
Warranties on sales-related products
2021 2020
Balance at January 1 $ 9,403
 $ 12,600
Additional provisions 529 2,348
Used during the period ( 1,412)
 ( 747)
Exchange difference ( 37) ( 75)
Balance at March 31 $ 8,483 $ 14,126

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.

B. Provision for income tax in the United States

The Company recognised provision for contingent income tax liability in 2020 for the products sold under the incoterms DDP in the previous years. The US Internal Revenue Service preliminarily determined that it suspects that the Company traded within the US. Although the

~26~

Company claimed that those were international trades, considering the case is at the tax negotiation stage, provision for income tax liability amounting to $68,668 was recognised in accordance with IAS 37.

  • C. Analysis of total provisions:
March 31,2021 December 31, 2020 March 31,2020
Current 76,137
$		 75,744
$		 12,927
$
Non-current 1,014
$		 2,327
$		 1,199
$

(17) Share capital

As of March 31, 2021, 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) 2021 2020 At January 1 (At March 31) 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.

(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

~27~

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. The Company incurred operating losses for the year ended December 31, 2020, and thus had no earnings for distribution.

  • F. The appropriations of earnings of year 2019 as resolved by the shareholders at their meetings on June 18, 2020 are as follows:

(20) Other equity items

At January 1
Revaluation
Effects of subsidiaries
Tax effects of subsidiaries
At March 31		 Unrealised gains (losses)
from financial assets
measured at fair value
through other
comprehensive income
Financial statements
translation
differences of
foreign operations
Total
254,629)
($ 110,123)
($ 364,752)
($ 730
-
730
-
6,570)
(
6,570)
(
-
1,314
1,314
253,899)
($ 115,379)
($ 369,278)
($ 2021

~28~

2020

(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
2,853)
(
-

2,853)
(
Effects of subsidiaries
34,354)
(
2,394)
(
36,748)
(
Tax effects of subsidiaries
-

478
478
At March 31
181,713)
($ 105,986)
($ 287,699)
($ 2021
2020
Revenue from contracts with customers
1,001,216
$ 903,421
$ Three months ended March 31

A. Disaggregation of revenue from contracts with customers

The Group derives revenue in the following major geographical regions:

Three months ended March 31,2021 months ended March 31,2021 months ended March 31,2021
USA Mainland China Other areas Total
Total segment revenue $ 395,275
 $ 312,256
 $ 572,251
 $ 1,279,782
Inter-segment revenue - ( 62,937)
 ( 215,629)
 ( 278,566)
Revenue from external customer $ 395,275 $ 249,319 $ 356,622
 $ 1,001,216
contracts
Three months ended March 31,2020
USA Mainland China Other areas Total
Total segment revenue $ 430,202
 $ 178,115
 $ 646,413
 $ 1,254,730
Inter-segment revenue ( 120)
 - ( 351,189)
 ( 351,309)
Revenue from external customer $ 430,082 $ 178,115 $ 295,224 $ 903,421
contracts

B. Contract liabilities from customers

  • (a) The Group has recognised the following revenue-related contract liabilities:
Contract liabilities:
Contract liabilities-
Products sales contracts		 March31,2021
35,820
$		 December31,2020
81,033
$		 March31,2020
26,575
$

~29~

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

period:
Three months ended March 31
2021 2020
Revenue recognised that was included in the
contract liability balance at the beginning
of the period $ 20,889
 $ 38,289

Changes in contract liabilities are mainly from the timing difference between performance obligations satisfied and customers’ payment.

(22) Interest income

(23) Other income
2021
2020
Interest income from bank deposits
1,154
$ 2,036
$
Three months ended March 31
2021
2020
Other income, others
6,059
$ 1,297
$ Three months ended December 31

For the three months ended March 31, 2021 and 2020, the Group recognised government grant income of $3,718 and $0, respectively, for the subsidiaries from the Ministry of Economic Affairs under the ‘Low Earth Orbit (LEO) Radio Frequency Front End (RFFE) Solution Development Plan’.

(24) Other gains and losses

Three months ended months ended March 31
2021 2020
Gains on disposals of property, plant and $ 55
 $ 101
equipment
Currency exchange gains (losses) 6,438 ( 804)
Losses on financial assets (liabilities) at fair value ( 5,844)
 ( 4,224)
through profit or loss
Miscellaneous disbursements ( 235) ( 830)
$ 414 ($ 5,757)

(25) Finance costs

Finance costs
Interest expense
Interest expense of lease liability		 Three months ended March 31
2021
1,494
$ 2,528
4,022
$		 2020
2,112
$ 1,617
3,729
$

~30~

(26) Expenses by nature

Expenses by nature
Employee benefit expense
Depreciation charges on property, plant
and equipment
Amortisation		 Three months ended March 31
2021
231,613
$ 37,581
8,293
277,487
$		 2020
222,777
$ 29,472
7,243
259,492
$

(27) Employee benefit expense

Employee benefit expense
Salary expenses
Labour and health insurance fees
Pension costs
Other personnel expenses		 2021
2020
194,089
$ 195,896
$ 18,731
14,872
12,740
5,543
6,053
6,466
231,613
$ 222,777
$ Three months ended March 31
195,896
$ 14,872
5,543
6,466
222,777
$

  • 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. The employees’ compensation and directors’ and supervisors’ remuneration were estimated and accrued based on 7% and 1% of distributable profit for the three months ended March 31, 2021 and 2020, respectively. However, there were no amounts accrued for both periods as the Company incurred losses before tax.

  • For 2020, the employees’ compensation and directors’ remuneration resolved by the Board of Directors both amounted to $0, which were in agreement with those amounts recognised in the 2020 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.

~31~

(28) Income tax

A. Income tax (benefit) expense

(a) Components of income tax (benefit) expense:

e tax
ome tax (benefit) expense
Components of income tax (benefit) expense:
Three months ended March 31
2021 2020
Current tax:
Current tax on profits for the period ($ 3,187)
 $ 1,725
Deferred tax:
Origination and reversal of deferred tax assets - 9,263
Income tax (benefit) expense ($ 3,187) $ 12,713
  • (b)The income tax (charge)/credit relating to components of other comprehensive income (loss) is as follows:
Three months ended March 31 Three months ended March 31
2021 2020
Currency translation differences 1,314)
($		 478)
($

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

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

(29) Losses per share

Authority.
Losses per share
Three months ended March 31, 2021
Weighted average
number of ordinary
shares outstanding Losses per share
Amount after tax (share in thousands) (in dollars)
Basic losses per share
Loss attributable to the parent ($ 111,694)
 228,028 ($ 0.49)
Diluted losses per share
Loss attributable to the parent ($ 111,694) 228,028 ($ 0.49)

~32~

==> picture [513 x 364] intentionally omitted <==

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

Three months ended March 31, 2020
Weighted average
number of ordinary
shares outstanding Losses per share
Amount after tax (share in thousands) (in dollars)
Basic losses per share
Loss attributable to the parent ($ 17,048) 228,028 ($ 0.07)
Diluted losses per share
Loss attributable to the parent ($ 17,048) 228,028 ($ 0.07)
(30) Supplemental cash flow information
Investing activities with partial cash payments:
Three months ended March 31
2021 2020
Purchase of property, plant and equipment $ 31,133 $ 36,953
Add: Opening balance of payable on equipment 34,913 24,037
Ending balance of prepayment for
1,702 693
equipment
Less: Ending balance of payable on equipment ( 17,027) ( 34,016)
Opening balance of prepayment for -
( 1,123)
equipment
Effect of exchange rate changes ( 112) 26
Cash paid during the period $ 50,609 $ 26,570
----- End of picture text -----

(31) Changes in liabilities from financing activities

January 1, 2021
Changes in cash flow from
financing activities
Impact of changes in
foreign exchange rate
Changes in other
non-cash items
March 31, 2021		 Lease liabilities Short-term
borrowings		 Long-term
borrowings
Total
391,429
$ 1,280,913
$ 57,697
219,363
-
328)
(
3,953)
(
3,953)
(
445,173
$ 1,495,995
$
521,386
$ 38,587)
(
101
-
482,900
$		 368,098
$ 200,253
429)
(
-
567,922
$

~33~

Lease liabilities
January 1, 2020
311,032
$ Changes in cash flow from
financing activities
8,006)
(
Impact of changes in
foreign exchange rate
723

March 31, 2020
303,749
$		 Short-term
borrowings
396,748
$ 7,898)
(
-
388,850
$		 Long-term
borrowings
125
$ 300,000
-
300,125
$		 Total
707,905
$ 284,096
723
992,724
$

7. RELATED PARTY TRANSACTIONS

(1) Names of related parties and relationship

Names of related parties Relationship with the Company Cybertan Technology Inc. Entities with significant influence to the Group

(2) Significant related party transactions

A. Operating revenue

gnificant related party transactions
Operating revenue
Three months ended March31
2021
2020
Sales of goods:
Cybertan Technology Inc.
$		 36,307
75,919
$
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 Receivables from related parties

Receivables from related parties
Accounts receivable:
Entities with significant
influence to the Group
Other receivables:
Entities with significant
influence to the Group		 March 31,2021
26,014
$ 288
26,302
$		 December 31,2020
29,008
$ 340
29,348
$		 March 31, 2020
55,338
$ 222
55,560
$

－ C. 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:

Cybertan Technology Inc. March 31,2021
405,940
$		 December 31,2020
419,034
$		 March 31,2020
213,298
$

~34~

(c) Lease liabilities

(i) Outstanding balance:

March 31, 2021 December 31, 2020 March 31, 2020 Cybertan Technology Inc. $ 408,910 $ 445,225 $ 215,830

(ii) Interest expense

Cybertan Technology Inc.

Three months ended March 31 Three months ended March 31
2021
2,085
$		 2020
1,108
$

(d) As of March 31, 2021, December 31, 2020 and March 31, 2020, guarantee deposits paid (shown as ‘Other non-current assets’) to entities with significant influence to the Group all amounted to $5,765, $1,972 and $1,972, respectively.

(3) Key management compensation

Key management compensation
Salaries and other short-term employee benefits
Post-employment benefits		 2021
2020
13,840
$ 12,937
$ 245
350
14,085
$ 13,287
$ Three months ended March 31
2020
12,937
$ 350
13,287
$

8. PLEDGED ASSETS

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

Pledged asset March 31,2021
543
$		 December 31,2020
546
$
Book value		 March 31,2020
Purpose
533
$ Guarantee for
business card
Time deposits (shown as ‘Financial
assets at amortised cost-current’)

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT

COMMITMENTS

None.

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

None.

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

~35~

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 instruments
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		 March 31,2021
-
$ 115,378
1,115,930
27,309
-
1,058,316
80,856
8,272
2,406,061
$ March 31,2021
1,522
$ 567,922
950,905
256,949
445,173
2,222,471
$ 482,900
$		 December 31,2020
5,275
$ 114,443
1,324,793
27,260

4,081
968,750

38,158
4,508
2,487,268
$ December 31,2020
876
$ 368,098
856,353
363,447
391,429
1,980,203
$ 521,386
$		 March 31,2020
6,045
$ 188,622
1,168,086
28,458
-
923,552
32,476

4,448
2,351,687
$
March 31,2020
1,826
$ 388,850
710,664
290,336
300,125
1,691,801
$
303,749
$

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, 2020.

  • 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

~36~

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:

fluctuations is as follows:
(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		 March 31,2021
Foreign currency
amount
(In thousands)
42,837
$ 6,313
985
8,306
42,590
$ 1,781
754
7,023		 Exchange
rate
28.54
4.34
33.48
6.57
28.54
4.34
33.48
6.57		 Book value
(NTD)
1,222,568
$ 27,398
32,978
237,053
1,215,519
$ 7,730
25,244
200,436




~37~

==> picture [441 x 119] intentionally omitted <==

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

December 31, 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
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		 40,781
$ 5,540
1,152
13,965
41,198
$ 803
765
10,609
 28.48

4.36
35.02

6.52
28.48
4.36
35.02
6.52
March 31,2020		 1,161,443
$ 24,154
40,343
397,723
1,173,319
$ 3,501

26,790

302,144
Foreign currency
amount
(In thousands)
33,648
$ 8,897
491
7,226
28,645
$ 34,032
602
8,312		 Exchange
rate
30.23
4.27
33.24
7.09
30.23
4.27
33.24
7.09		 Book value
(NTD)
1,017,179
$ 37,990
16,321
218,442
865,938
$ 145,317
20,010
251,272




v. The total exchange gain (loss), including realised and unrealized, arising from significant foreign exchange variation on the monetary items held by the Group for the three months ended March 31, 2021 and 2020 amounted to $6,438 and ($804), respectively.

~38~

vi. Analysis of foreign currency market risk arising from significant foreign exchange variation:

i. Analysis of foreign currency
variation:		 market risk arising from significant foreign exchange market risk arising from significant foreign exchange
(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
(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%
12,226
$ -
$ 1%
274
-
1%
330
-
1%
2,371
-
1%
12,155)
($ -
$ 1%
77)
(
-
1%
252)
(
-
1%
2,004)
(
-
Three months ended March 31,2021
Sensitivityanalysis
Three months ended March 31,2020
Sensitivityanalysis
Effect on
Degree of variation
profit or loss
1%
10,172
$ 1%
380
1%
163
1%
2,184
1%
8,659)
($ 1%
1,453)
(
1%
200)
(
1%
2,513)
(		 Effect on other
comprehensive
income
-
$
-
-
-
-
$
-
-
-




~39~

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 three months ended March 31, 2021 and 2020 would have increased/decreased by $0 and $60, 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 $1,154 and $1,886, 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.

~40~

  • (iii) The Group used the forecastability to adjust historical and timely information and 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 March 31, 2021, December 31, 2020 and March 31, 2020, the provision matrix is as follows:

March 31, 2021
Expected loss rate
Total book value
Loss allowance
December 31, 2020
Expected loss rate
Total book value
Loss allowance
March 31, 2020
Expected loss rate
Total book value
Loss allowance		 Notpast due
0%-1%
698,410
$ -
$ Notpast due
0%-1%
639,758
$ -
$ Notpast due
0%-1%
811,150
$ -
$		 90 days
past due
0%-1%
306,358
$ 6
$ 90 days
past due
0%-1%
315,461
$ 3
$ 90 days
past due
0%-1%
90,191
$ -
$		 91-180 days
past due
0%-1%
38,077
$ 5
$ 91-180 days
past due
0%-1%
15,642
$ 2
$ 91-180 days
past due
0%-1%
2,456
$ -
$		 Over 181 days
past due
0%-1%
15,745
$ 263
$ Over 181 days
past due
0%-1%
2,248
$ 273
$ Over 181 days
past due
0%-1%
20,071
$ 316
$		 Total
1,058,590
$ 274
$ Total
973,109
$ 278
$ Total
923,868
$ 316
$
  • (iii)Movements in relation to the Group applying the simplified approach to provide loss allowance for accounts and notes receivable are as follows:
2021 2020
At January 1 $ 278
 $ 1,253
Write-offs of uncollectible receivables - ( 1,212)
(Reversal of) provision for impairment loss ( 4)
 271
Effect of exchange rate changes - 4
At March 31 $ 274 $ 316

~41~

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

  • (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 March 31, 2021, December 31, 2020 and March 31, 2020, the provision matrix is as follows:

March 31, 2021
Expected loss rate
Total book value
Loss allowance
December 31, 2020
Expected loss rate
Total book value
Loss allowance
March 31, 2020
Expected loss rate
Total book value
Loss allowance		 Notpast due
0%
73,213
$ -
$ Notpast due
0%
32,151
$ -
$ Notpast due
0%
32,353
$ -
$		 90 days
past due
0%
3,420
$ -
$ 90 days
past due
0%
5,285
$ -
$ 90 days
past due
0%
123
$ -
$		 91-180 days
past due
0%
3,544
$ -
$ 91-180 days
past due
0%
722
$ -
$ 91-180 days
past due
0%
-
$ -
$		 Over 181 days
past due
0%
679
$ -
$ Over 181 days
past due
0%
-
$ -
$ Over 181 days
past due
0%
-
$ -
$		 Total
80,856
$ -
$ Total
38,158
$ -
$ Total
32,476
$ -
$

(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 non-

~42~

derivative financial liabilities and to the expected maturity date for derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.

==> picture [462 x 151] intentionally omitted <==

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

Less than 3 Between 3 months Between 1 Between 2 Over
March 31, 2021 months and 1 year and 2 years and 5 years 5 years Total
Non-derivative financial
liabilities
Short-term borrowings $ 568,511 $ - $ - $ - $ - $ 568,511
- - -
Accounts payable 747,334 203,571 950,905
- - - -
Other payables 256,949 256,949
Long-term borrowings 3,283 9,924 116,747 423,934 32,512 586,400
Lease liability 17,021 51,064 68,085 204,255 178,921 519,346
Derivative financial Less than 3 Between 3 months Between 1 Between 2 Over
liabilities months and 1 year and 2 years and 5 years 5 years Total
Forward foreign exchange
----- End of picture text -----

transactions and
forward exchange swap
transaction

December 31, 2020
Non-derivative financial
liabilities
Short-term borrowings
Accounts payable
Other payables
Long-term borrowings
Lease liability
Derivative financial

liabilities
Forward foreign
exchange transactions
March 31, 2020
Non-derivative financial
liabilities
Short-term borrowings
Accounts payable
Other payables
Long-term borrowings
Lease liability
Derivative financial
liabilities
Forward foreign exchange
transactions and
forward exchange swap
transaction		 1,522
$ Less than 3
months
319,824
$ 768,871
363,447
800
16,935
Less than 3
months
876
$ Less than 3
months
389,648
$ 650,215
290,336
569
9,634
Less than 3
months
1,826
$		 -
$ Between 3 months
and 1year
48,488
$ 87,482
-
58,541
50,806
Between 3 months
and 1year
-
$ Between 3 months
and 1year
-
$ 60,449
-
1,713
28,902
Between 3 months
and 1year
-
$		 -
$ Between 1
and 2years
-
$ -
-
78,339
67,741
Between 1
and 2years
-
$ Between 1
and 2years
-
$ -
-
77,283
38,536
Between 1
and 2years
-
$		 -
$ Between 2
and 5years
-
$ -
-
264,760
203,224
Between 2
and 5years
-
$ Between 2
and 5years
-
$ -
-
231,949
115,609
Between 2
and 5years
-
$		 -
$ Over
5years
-
$ -
-
25,377
195,169
Over
5years
-
$ Over
5years
-
$ -
-
31
167,035
Over
5years
-
$		 1,522
$ Total
368,312
$ 856,353
363,447
427,817
533,875
Total
876
$ Total
389,648
$ 710,664
290,336
311,545
359,716
Total
1,826
$

~43~

(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 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:

March 31, 2021
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 exchange swap transactions
Forward foreign exchange contracts		 Level 1
-
$ -
-
$ -
$ -
-
$		 Level 2
-
$ -
-
$ 845
$ 677
1,522
$		 Level 3
-
$ 115,378
115,378
$ -
$ -
-
$		 Total
-
$ 115,378
115,378
$
845
$ 677
1,522
$

~44~

December 31, 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
March 31, 2020
Assets
Recurring fair value measurements
Financial assets at fair value through
profit or loss
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
Forward foreign exchange contracts		 Level 1
-
$ -
-
$
-
$ Level 1
-
$ -
-
$ -
$ -
-
$		 Level 2
5,275
$ -
5,275
$
876
$ Level 2
-
$ -
-
$ 110
$ 1,716
1,826
$		 Level 3
-
$ 114,443
114,443
$ -
$ Level 3
6,045
$ 188,622
194,667
$ -
$ -

-
$		 Total
5,275
$ 114,443
119,718
$
876
$
Total
6,045
$ 188,622
194,667
$
110
$ 1,716
1,826
$

  • (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 management policies and relevant control procedures relating to the valuation models used for fair value measurement, management believes adjustment to valuation is

~45~

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 three months ended March 31, 2021 and 2020, 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 preferred shares. The following chart is the movement of Level 3 for the three months ended March 31, 2021 and 2020:

Equitysecurities
At January 1
114,443
$ Gain recognised in other comprehensive
income
730
Net exchange differences
205
At March 31
115,378
$ Equitysecurities
At January 1
224,207
$ Loss recognised in other comprehensive
income
37,207)
(
Net exchange differences
1,622

At March 31
188,622
$		 Equitysecurities
114,443
$ 730
205
115,378
$		 Derivative
instruments
-
$ -

-

-
$ 2021
2020
  • 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.

~46~

  • 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:
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
March 31,2021
technique
input
$ 9,390
Market
comparable
companies
Discount for lack of
marketability
P/B ratio
12,482
Discounted
cash flow
Long-term pre-tax
operating margin
93,506
Net asset value Not applicable
Fair value at
Valuation
Significant
unobservable
December 31,2020
technique
input
$ 8,660
Market
comparable
companies
Discount for lack of
marketability
P/B ratio
12,457
Discounted
cash flow
Long-term pre-tax
operating margin
93,326
Net asset value Not applicable
Fair value at
Valuation
Significant
unobservable
March 31,2020
technique
input
$ 6,422
Market
comparable
companies
Discount for lack of
marketability
P/B ratio
27,301
Discounted
cash flow
Long-term pre-tax
operating margin
154,899
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

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

~47~

changed:

March 31, 2021

changed: March 31
Input
Financial assets
Equity
instruments
Discount for
lack of
marketability
P/B ratio
Long-term
pre-tax
operating
margin
Input
Financial assets
Equity
instruments
Discount for
lack of
marketability
P/B ratio
Long-term
pre-tax
operating
margin
Input
Financial assets
Equity
instruments
Discount for
lack of
marketability
P/B ratio
Long-term
pre-tax
operating
margin		 Change
±10%
±10%
±1%
Change
±10%
±10%
±1%
Change
±10%
±10%
±1%		 Favourable
change
-
$ -
-
-
$ Recognised in		 Unfavourable
change
-
$ -
-
-
$ profit or loss
December
Recognised in
Favourable
change
-
$ -
-
-
$
Recognised in Unfavourable
change
-
$ -
-
-
$ profit or loss
Favourable
change
-
$ -
-
-
$

~48~

(4) Other

Due to the impact of the COVID-19 pandemic in 2021, there were supply problems in raw materials and shortage of workers in the production line of the suppliers in Mainland China and the operating revenue of the Group was therefore affected. However, the Group expects that the impact will be gradually reduced as the pandemic has been stabilised, the suppliers have gradually resumed their production and the Company has rearranged the Group’s resources for the operational adjustments and countermeasures.

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.

~49~

(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

Three months ended March 31 Three months ended March 31
2021 2020
Revenue from external customers $ 1,001,216
 903,421
$
Inter-segment revenue $ 278,566
 351,309
$
Total segment revenue $ 1,279,782
 1,254,730
$
Segment loss ($ 111,694)
 17,048)
($
Segment assets $ 5,424,652 4,905,103
$
Segment liabilities $ 3,121,342
 2,305,819
$

(4) Reconciliation for segment income (loss)

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

~50~

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)

March 31, 2021

(Except as otherwise indicated)

Securities held by
Marketable securities
Relationship with the
securities issuer
General
ledger account		 As of March 31, 2021 As of March 31, 2021 Note
Number of shares Bookvalue Ownership (%)
Fairvalue
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.
Stocks - Kymeta Corporation
None
Financial assets at fair value
through other comprehensive
income		 648,576
16,023
1,333,360
20,000
1,355,663
205,432		 9,390
$ -
-
93,506
12,482
-		 0.48
9,390
$ 5.02
-
2.24
-
Note
93,506
12.5
12,482
0.05
-

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

March 31, 2021

March 31, 2021 March 31, 2021
Table 2
Purchaser/seller		 Counterparty Relationship with
the counterparty		 Transaction Differences in transaction terms
compared to third party
transactions		 Balance
Percentage of
total
notes/accounts
receivable
(payable)
Expressed in thousands of NTD
(Except as otherwise indicated)
Note
Notes/accounts receivable(payable)
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
Parent Company		 Purchases
Sales		 127,073
$ 127,073)
(		 14%
(47%)		 60 days
60 days		 Not applicable
Not applicable		 Not applicable
Not applicable		 163,364)
($ 163,364		 (19%)
87%		 
Table 2, Page1

Microelectronics Technology, Inc. and Subsidiaries

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

March 31, 2021

March 31, 2021
Table 3
Creditor		 Counterparty Relationship with
the counterparty		 Balance as at
March 31,2021		 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 163,364
$		 2.51 -
$		 0 56,218
$		 -
$		 
Table 3, Page1

Microelectronics Technology, Inc. and Subsidiaries

Table 4

Expressed in thousands of NTD (Except as otherwise indicated)

Significant inter-company transactions during the reporting periods

March 31, 2021

Number
(Note 1)		 Companyname Counterparty Relationship
(Note 2)		 Transaction
General ledger account Amount Transaction
terms		 Percentage of consolidated
total operating
revenues or total assets (Note
3)
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.		 JUPITER TECHNOLOGY (WUXI) INC.
JUPITER TECHNOLOGY (WUXI) INC.
JUPITER TECHNOLOGY (WUXI) INC.
MTI Laboratory, INC.
MTI Laboratory, INC.
Radiocomp ApS
Radiocomp ApS		 1
1
1
1
1
1
1		 Purchases and processing
overhead
Accounts payable
Other current liabilities
Research and development
expenses
Accrued expense
Research and development
expenses
Accrued expense		 127,073
$ 163,364
17,503
19,158
19,546
35,134
21,668		 Same as those to the third parties
Payment term is 60 days from invoice
date
Based on the mutual agreement
Same as those to the third parties
Based on the mutual agreement
Same as those to the third parties
Based on the mutual agreement		 12.69%
3.01%
0.32%
1.91%
0.36%
3.51%
0.40%

  • 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

Table 5

Information on investees

March 31, 2021

Expressed in thousands of NTD

(Except as otherwise indicated)

Investor Investee Location Main business
activities		 Initial investment amount Shares held as at March 31,2021 Net profit (loss)
of the investee for
the three months
ended
March 31,2021		 Investment income
(loss)
recognised by the
Company for the
three months
ended March 31,
2021
Note
Balance as at
March 31,2021
Balance as at
December 31,
2020		 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
$ 908,778
$ 223,543
234,863
886,634
931,533
42,803
44,970
134,172
140,966		 3,920
100
1,502,928
$ 7,834,000
100
327,743
31,071,800
100
976,088
1,500,000
100
134,730
1,527,944
100
173,057		 27,500)
($ 3,281
30,879)
(
2,473
808		 20,557)
($ Note 1
3,281
Note 2
30,879)
(
Note 2
2,473
Note 2
808
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

March 31, 2021

==> picture [25 x 7] intentionally omitted <==

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

Table 6
----- End of picture text -----

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
January1,2021		 Amount remitted from Taiwan
to Mainland China / Amount
remitted back to Taiwan for the
three months ended
March 31,2021		 Accumulated
amount
of remittance
from Taiwan
to Mainland
China as of
March 31,2021		 Net income of
investee for the
three months
ended
March 31,2021		 Ownership
held by the
Company
(direct or
indirect)		 Investment income
(loss) recognised by
the Company for
the three months
ended
March 31, 2021
(Note 2)		 Book value of
investments in
Mainland China
as of
March 31,2021		 Note
Accumulated amount
of investment income
remitted back to
Taiwan as of
March 31 2021
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		 884,585
$		 Through investing in an
existing company in the
third area, which then
invested in the investee
in Mainland China.		 884,585
$		 -
$ -
$		 884,585
$		 30,879)
($		 100 30,879)
($		 976,049
$		 -
$ -
Companyname Accumulated
amount of
remittance from
Taiwan to
Mainland China as
of
March 31,2021		 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.		 $ 997,869 $ 1,113,093 $ 1,381,986

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 reviewed by R.O.C. parent company’s CPA. 

Table 6, Page1

Table 7

Microelectronics Technology, Inc. and Subsidiaries

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

March 31, 2021

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
March 31,
2021		 Purpose Maximum balance
during the three months
endedMarch31,2021		 Balance at
March 31,
2021		 Interestrate Interest during the
three months ended
March31,2021
JUPITER TECHNOLOGY
(WUXI) INC
Note: It consisted of current		 $ 127,063
12
liabilities amounting to $17,503.		 $ - - ($ 163,364) 17 $ - - $ - -
$		 - -
$		 $ 17,503 
Table 7, Page1

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Microelectronics Technology, Inc. and Subsidiaries
Major shareholders information
March 31, 2021
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. 60,779,995 26.65%
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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

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