SPC - Annual Report 2020 | FinancialReports.eu

Stock Symbol: 2496

Success Prime Corporation and Subsidiaries

Consolidated Financial Statements for the Years Ended December 31, 2020 and 2019

and Independent Auditors’ Report

Address: 2F No. 11, Kezhong Road, Zhunan Town, Miaoli County, Science Park, Hsinchu, Taiwan

Phone: (037) 586999

DECLARATION OF CONSOLIDATION OF FINANCIAL STATEMENTS OF AFFILIATES

The entities that are required to be included in the consolidated financial statements of Success Prime Corporation as of and for the year ended December 31, 2020 under the “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises” are all the same as those included in the consolidated financial statements prepared in conformity with the International Financial Reporting Standards 10 “Consolidated Financial Statements”. In addition, all the relevant information required to be disclosed in the consolidated financial statements have been disclosed. Hence, we do not prepare a separate set of consolidated financial statements.

Very truly yours,

Success Prime Corporation

Company Name: Success Prime Corporation Chairman: Min-Chun Chen March 9, 2021

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders Success Prime Corporation

Opinion

We have audited the accompanying consolidated financial statements of Success Prime Corporation and its subsidiaries (collectively referred to as the “Group”), which comprise the consolidated balance sheets as of December 31, 2020 and 2019, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies (collectively referred to as the “consolidated financial statements”).

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2020 and 2019, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that

the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2020. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matters of 2020 Success Prime Corporation consolidated financial statements are described as follow:

Revenue Recognition of Education Services

Success Prime Corporation’s main source of business revenue is from education service, note on its revenue recognition policy please refer to the Consolidated Financial Report Note 4(15). The revenue recognition of the Success Prime Corp. Education Service, collect student prepaid full tuition payment, then calculated and recognized as revenue according to the actual teaching timeline of the course. Due to the wide range of education service revenue from various courses offered, and the large volume of transactions, the auditors believe that the correctness of the revenue calculation from education services may possess potential risks and therefore list it as a key audit matter.

The audit procedure by the Auditors is as follows:

Understand and test the effectiveness of the design and implementation of the main internal control system for the calculation process of education service revenue.
Verify the correctness of the information related to the Education Service Revenue statement used by the Success Prime Corp., including random spot check on the collection of student tuition matches the prepaid account amount, and check on the consistency between the teaching time periods used for revenue amortization and actual class syllabus schedule.
Test the validity of the calculation formulas of the tuition distribution calculation and re- verify the correctness of the calculation spreadsheet.

Assessment of Goodwill and Trademark Impairment

The Goodwill and Trademark rights of the Success Prime Corp. are considered as significant assets, displaying high value amount in the consolidated balance sheet. In accordance with the

IFRS Article 36 regulation on "impairment of assets", Success Prime Corp. shall conduct annual impairment testing of Goodwill and Trademark rights, as well as measure the recoverable amount of Goodwill and Trademark rights. When the Management is deciding future operating cash flows, the consideration will base on future business outlook of the projected sales growth rate and profit margin, and calculate the weighted average capital cost rate as the discount rate. As these estimations and judgments of assumptions and management subjective views might be affected by high uncertainty of future markets or economic conditions, they are classified as key audit matters. The disclosure of relevant accounting policies and information of Goodwill and Trademark rights, please refer to the Consolidated Financial Statements Note 4(10), 5 and 14.

The main verification procedures by the accountant for Management impairment assessment of Goodwill and Trademark rights as follows:

Assess the professional qualifications, suitability and independence of external independent evaluation experts entrusted by Management to assist the impairment tests implementation, identifying items that impose no effect on their objectivity and no limit on the scope of their work, and that the methods used by the evaluators use are in compliance with regulations.
Understand the process and basis of revenue growth rate and profit margin projected by Management to estimate future operational outlook, and whether it takes into account the recent operation results, historical trends and industry profile.
Evaluate the recoverable amount calculated by the management base on the value of use model, the weighted average cost rate used, including the assumptions of risk-free compensation interest rate, volatility and overpayment risk, and whether it is consistent with Company’s current status and its industry conditions, then re-execute and verify the calculations.

Other Matters

Success Prime Corp. has prepared 2020 and 2019 parent company only financial statements and an Audit Report has been issued by the Auditors, for reference.

Responsibility of Management and Governance Units over the Consolidated Financial Statements

The responsibility of the Management is to formulate the Consolidated Financial Statements in accordance to the financial reports preparation guidelines by securities issuer and be approved by the Financial Supervisory Commission; to release Consolidated Financial Statements that is prepared through effective international Financial Reporting Standards, International

accounting standards, and permissible interpretation notices; to maintain the necessary internal controls relating to the preparation of Consolidated Financial Statements, ensuring that the Consolidated Financial Statements do not contain significant false representations of fraud or error.

In preparing the Consolidated Financial Statements, the responsibilities of the management also include assessing the ability of the Success Prime Corp. to sustain its operations, the disclosure of related matters, and the adoption of the accounting basis for sustainable operations, unless the Management intends to liquidate Success Prime Corp. or terminate business, or other options that are not practical besides than liquidation or closure.

The governance unit of the Success Prime Corp. (the Audit Committee included) has the responsibility to supervise financial reporting procedures.

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

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

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2020 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Chin-Chuan Shih and Shu-Lin Liu.

Deloitte & Touche

Taipei, Taiwan Republic of China March 17, 2021

Notice to Readers

The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such consolidated financial statements are those generally applied in the Republic of China. For the convenience of readers, the independent auditors’ report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and consolidated financial statements shall prevail.

Success Prime Corporation

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

ASSETS Current assets Cash and cash equivalents (note 4 and 6) Financial assets measured at amortized cost (note 4, 8 and 34) Notes receivables (note 4 and 9) Accounts receivables (note 4 and 9) Accounts receivables from related parties (note 33) Other receivables Current income tax assets Inventories (note 4 and 10) Other current assets (note 17) Total current assets Non-current assets Financial assets measured at fair value through other comprehensive income (note 4 and 7) Financial assets measured at amortized cost (note 4 and 8) Property, plant and equipment (note 4, 12 and 34) Right-of-use assets (note 4 and 13) Trademarks (note 4 and 14) Goodwill (note 14) Computer softwares (note 4 and 15) Deferred tax assets (note 4 and 25) Cash surrender value of term life insurance (note 4 and 16) Defined benefit assets (note 4 and 21) Other non-current assets (note 17 and 33) Total non-current assets Total assets LIABILITIES AND EQUITY Current liabilities Short-term borrowings (note 4, 18 and 34) Contract liabilities- current (note 23) Notes payables Accounts payables (note 19) Other payables (note 20) Current income tax liabilities Lease liabilities-current (note 4, 13 and 33) Current portion of long-term borrowings (note 4, 18 and 34) Other current liabilities Total current liabilities Non-current liabilities Long-term borrowings (note 4, 18 and 34) Provisions Deferred income tax liabilities (note 4 and 25) Lease liabilities- non-current (note 4, 13 and 33) Total non-current liabilities Total liabilities Equity attributable to shareholders of the Company (note 22) Ordinary shares Capital surplus Retained earnings Legal reserve Special reserve Unappropriated retained earnings Total retained earnings Other equity Treasury shares Total equity attributable to owners of the Company Non-controlling interests (note 22) Total equity Total liabilities and equity		December 31,2020 Amount `％` $ 182,752 14 17,265 1 325 - 6,938 1 5,704 - 2,902 - 6,652 1 2,516 - 6,598 1 231,652 18 4,500 - 4,860 - 294,015 23 105,685 8 404,144 32 81,419 7 9,225 1 30,723 3 83,197 7 - - 14,083 1 1,031,851 82 $ 1,263,503 100 $ - - 239,978 19 29 - 20,946 2 43,119 3 12,806 1 45,184 4 2,430 - 2,199 - 366,691 29 19,440 2 1,620 - 2,397 - 61,908 5 85,365 7 452,056 36 191,854 15 341,190 27 33,966 3 2,600 - 274,945 22 311,511 25 2,392) - 34,362) ( 3) 807,801 64 3,646 - 811,447 64 $ 1,263,503 100	December 31,2020 Amount `％` $ 182,752 14 17,265 1 325 - 6,938 1 5,704 - 2,902 - 6,652 1 2,516 - 6,598 1 231,652 18 4,500 - 4,860 - 294,015 23 105,685 8 404,144 32 81,419 7 9,225 1 30,723 3 83,197 7 - - 14,083 1 1,031,851 82 $ 1,263,503 100 $ - - 239,978 19 29 - 20,946 2 43,119 3 12,806 1 45,184 4 2,430 - 2,199 - 366,691 29 19,440 2 1,620 - 2,397 - 61,908 5 85,365 7 452,056 36 191,854 15 341,190 27 33,966 3 2,600 - 274,945 22 311,511 25 2,392) - 34,362) ( 3) 807,801 64 3,646 - 811,447 64 $ 1,263,503 100		December 31,2019	December 31,2019	December 31,2019
		Amount $ 182,752 17,265 325 6,938 5,704 2,902 6,652 2,516 6,598 231,652 4,500 4,860 294,015 105,685 404,144 81,419 9,225 30,723 83,197 - 14,083 1,031,851 $ 1,263,503 $ - 239,978 29 20,946 43,119 12,806 45,184 2,430 2,199 366,691 19,440 1,620 2,397 61,908 85,365 452,056 191,854 341,190 33,966 2,600 274,945 311,511 2,392) 34,362) 807,801 3,646 811,447 $ 1,263,503			Amount $ 185,533 10,046 546 57,840 - 1,387 6,432 21,316 8,697 291,797 4,500 4,860 309,114 222,391 404,144 81,419 12,297 38,365 83,663 6,662 29,291 1,196,706 $ 1,488,503 $ 80,000 253,119 - 24,211 72,844 9,758 67,702 2,430 3,033 513,097 21,870 1,700 3,710 156,580 183,860 696,957 174,594 367,081 26,354 1,611 240,544 268,509 2,600) 21,956) 785,628 5,918 791,546 $ 1,488,503		`％`
	( (		(	( (		(	13 1 - 4 - - - 1 1 20 - - 21 15 27 5 1 3 6 - 2 80 100 5 17 - 2 5 1 5 - - 35 1 - - 11 12 47 12 25 2 - 16 18 - 2) 53 - 53 100

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

Success Prime Corporation

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Operating revenue (note 4, 23 and 33) Sales revenue Service revenue Total operating revenue Operating costs (note 10, 24 and 33) Cost of sales Cost of services Total operating costs Gross profit Operating expenses (note 21 and 24) Marketing expenses General and administrative expenses Research and development expenses Total operating expenses Net Income from operations Non-operating income and expenses (note 13, 24 and 33) Other income Other gains and losses Finance costs Interest revenue Total non-operating income and expenses		2020		`％` 14 86 100 10 42 52 48 10 27 2 39 9 1 1 - - 2		2019
								`％`
							27 73 100 17 38 55 45 8 24 3 35 10 1 - ( 1 ) - -

(Continued)

Income before income tax Income tax expense (note 25) Net income for the year Other comprehensive income (loss) (note 21 and 25) Items that will not be reclassified subsequently to profit or loss: Remeasurements of defined benefit plans Income tax relating to items that will not be reclassified subsequently to profit or loss Items that may be reclassified subsequently to profit or loss: Exchange differences on translating foreign operations Other comprehensive income (loss) for the year, net of income tax Total comprehensive income for the year Net income (loss) attributable to: Shareholders of the parent Non-controlling interests Total comprehensive income (loss) attributable to: Shareholders of the parent Non-controlling interests Earnings per share (note 26) Basic Diluted		2020		`％` 11 3) 8 - - - - - 8 8 - 8 8 - 8		2019
		Amount $ 83,804 20,891) 62,913 - 650 650 208 858 $ 63,771 $ 62,234 679 $ 62,913 $ 63,092 679 $ 63,771 $ 3.30 $ 3.29						`％`
	(		(				(	10 1) 9 - - - - - 9 9 - 9 9 - 9

The accompanying notes are an integral part of the consolidated financial statements. (Concluded)

Success Prime Corporation

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

		Equity Attributable to Stockholders of the Parent	Equity Attributable to Stockholders of the Parent	Equity Attributable to Stockholders of the Parent	Equity Attributable to Stockholders of the Parent	Equity Attributable to Stockholders of the Parent					Non-controlling Interests $ 6,488 - - - ( 1,429 ) 859 - 859 5,918 - - - - - ( 6,178 ) 3,227 679 - 679 - $ 3,646		Total Equity
Share Capital Shares (Thousands) Amount 17,459 $ 174,594 - - - - - - - - - - - - - - 17,459 174,594 - - - - - - 1,726 17,260 - - - - - - - - - - - - - - 19,185 $ 191,854	Capital Surplus $ 367,081 - - - - - - - 367,081 - - - ( 17,260 ) ( 8,631 ) - - - - - - $ 341,190		Retained Earnings			Total $ 262,216 - - 69,042 ) - 76,118 783) 75,335 268,509 - - 17,260 ) - - 2,622 ) - 62,234 650 62,884 - $ 311,511	Other Equity Exchange differences on translating foreign operations ( $ 1,611 ) - - - - - ( 989) ( 989) ( 2,600 ) - - - - - - - - 208 208 - ($ 2,392)		Treasury Shares $ 21,956 ) - - - - - - - 21,956 ) - - - - - - - - - - 12,406) $ 34,362)
Shares (Thousands) 17,459 - - - - - - - 17,459 - - - 1,726 - - - - - - - 19,185		Legal Reserve $ 13,868 12,486 - - - - - - 26,354 7,612 - - - - - - - - - - $ 33,966	Special Reserve $ 772 - 839 - - - - - 1,611 - 989 - - - - - - - - - $ 2,600	Unappropriated Earnings $ 247,576 ( 12,486 ) ( 839 ) ( 69,042 ) - 76,118 ( 783) 75,335 240,544 ( 7,612 ) ( 989 ) ( 17,260 ) - - ( 2,622 ) - 62,234 650 62,884 - $ 274,945
	( (			( ( ( ( ( ( ( (	( ( ( (		( ( ( ( (	( ( ( (		( ( ( ( ( (	( (	( ( ( ( ( ( (	$ 786,812 - - 69,042 ) 1,429 ) 76,977 1,772) 75,205 791,546 - - 17,260 ) - 8,631 ) 8,800 ) 3,227 62,913 858 63,771 12,406) $ 811,447

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

Success Prime Corporation

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

Cash flows from operating activities Income before income tax Adjustments to reconcile profit (loss) Depreciation expense Amortization expense Finance costs Decrease (increase) in cash surrender value of term life insurance Interest income Loss on disposal of property, plant and equipment Loss on inventory valuation Net loss on foreign exchange Gains from bargain purchases Gain on disposal of subsidiary Gain on lease modification Loss on the settlement of Labor Retirement Reserve Fund (The Old Fund) Changes in operating assets and liabilities: Notes receivables Accounts receivables Accounts receivables- related parties Other receivables Inventories Other current assets Net defined benefit assets Notes payable Accounts payable Other payables Provisions Contract liabilities Other current liabilities Cash generated from operations Interest received	2020 $ 83,804 82,680 3,730 3,647 466 ( 570 ) - 536 842 - ( 9,035 ) ( 588 ) 2,611 221 5,635 ( 5,704 ) ( 1,665 ) ( 13,812 ) ( 3,598 ) 4,051 29 3,415 8,178 ( 80 ) ( 12,024 ) ( 615) 152,154 545	2019
		$ 86,986 90,166 1,536 6,434 ( 108 ) ( 724 ) 143 17,027 2,467 ( 727 ) - - - ( 89 ) 15,318 - ( 1,161 ) 20,258 1,994 ( 86 ) ( 527 ) ( 6,317 ) ( 5,247 ) - ( 5,770 ) ( 3,761) 217,812 691

(Continued)

Interest paid Income taxes paid Net cash generated from operating activities Cash flows from investing activities Acquisition of financial assets at amortized cost Acquisition of financial assets at fair value through other comprehensive income Acquisition of net cash outflow from subsidiary (note 27) Net cash inflow from disposal of subsidiary (note 28) Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Increase in refundable deposits Decrease in refundable deposits Purchases of intangible assets Net cash inflow generated from investing activities Cash flows from financing activities Increase in short-term loans Decrease in short-term loans Long-term debt Payments of long-term debt Payments of lease liabilities Issuance of cash dividends Payments of treasury shares buy-back Acquisition of ownership interests in subsidiaries (note 29) Changes in non-controlling interests Net cash used in financing activities Effect of exchange rate changes on the balance of cash and cash equivalents held in foreign currencies Net decrease in cash and cash equivalents Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year	2020 ( $ 3,647 ) ( 11,084) 137,968 ( 12,800 ) - - 70,618 ( 8,699 ) - ( 5,998 ) 6,349 ( 658) 48,812 146,000 ( 226,000 ) - ( 2,430 ) ( 62,366 ) ( 25,891 ) ( 12,406 ) ( 8,800 ) 3,227 ( 188,666) ( 895) ( 2,781 ) 185,533 $ 182,752	2019
		( $ 6,434 ) ( 13,817) 198,252 ( 6,095 ) ( 4,500 ) ( 9,410 ) - ( 30,968 ) 3 ( 5,194 ) 4,208 ( 903) ( 52,859) 384,300 ( 439,300 ) 24,300 - ( 66,780 ) ( 69,042 ) - - ( 1,429) ( 167,951) ( 1,920) ( 24,478 ) 210,011 $ 185,533

The accompanying notes are an integral part of the consolidated financial statements. (Concluded)

SUCCESS PRIME CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)

1. GENERAL

Success Prime Corporation (hereinafter referred to as the Group) was established in June 15, 1991, the main business operations are production of optical fiber cables, communication components, system, sensors, digital informatics consulting services, and the management of tutorial academy teachers and curriculum education services. On March 2002, the Company’s shares were listed on the Taiwan Stock Exchange (TWSE).

The Group passed the disposal of the optical fiber subsidiary resolution at a board of directors meeting, for the purpose of continuing to focus on the future operations and development of the education businesses, thereby increase the competitiveness and market share of its core businesses.

Subsidiary Chen Li Education Co., Ltd. is mainly engaged in the education service industry targeting primary, middle and high-school curriculums tutorial courses.

The Consolidated Financial Report is expressed in the functional New Taiwan Dollar currency (NT$).

2. THE AUTHORIZATION OF FINANCIAL STATEMENTS

The accompanying consolidated financial statements were approved and authorized for issue by the Board of Directors on March 9, 2021.

3. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERPRETATIONS

(1) Initial application of the amendments to the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), Interpretations of IFRS (IFRIC), and Interpretations of IAS (SIC) (collectively, the IFRSs) endorsed and issued into effect by the FSC.

Except for the following, the initial application of the IFRSs endorsed and issued

into effect by the FSC did not have material impact on the Group’s accounting policies:

i. Amendments to IAS 1 and IAS 8 “Definition of Material”

The Group adopted the amendments starting from January 1, 2020. The threshold of materiality that could influence users has been changed to “could reasonably be expected to influence”. Accordingly, disclosures in the consolidated financial statements do not include immaterial information that may obscure material information.

ii. Amendment to IFRS 16 “Covid-19-Related Rent Concessions”

The Group elected to apply the practical expedient provided in the amendment to IFRS 16 with respect to rent concessions negotiated with the lessor as a direct consequence of the COVID-19. The related accounting policies are stated in Note 4. Prior to the application of the amendment, the Group shall determine whether or not the abovementioned rent concessions need to be accounted for as lease modifications.

The Group applied the amendment from January 1, 2020. Because the abovementioned rent concessions affect only in 2020, retrospective application of the amendment has no impact on the retained earnings as of January 1, 2020.

(2) The IFRSs endorsed by the Financial Supervisory Commission (FSC) for application starting from 2021

New IFRSs 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”	Effective Date Announced byIASB
	Effective immediately upon promulgation by the IASB January 1, 2021

(3) New IFRSs in issue but not yet endorsed and issued into effect by the FSC

New IFRSs “Annual Improvements to IFRS Standards 2018-2020” Amendments to IFRS 3 “Reference to the Conceptual Framework” Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture” IFRS 17 “Insurance Contracts”	Effective Date Announced byIASB(Note 1)
	January 1, 2022 (Note 2) January 1, 2022 (Note 3) To be determined by IASB January 1, 2023

Amendments to IFRS 17	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 (Note 6)
Amendments to IAS 8 “Definition of Accounting Estimates”	January 1, 2023 (Note 7)
Amendments to IAS 16 “Property, Plant and Equipment - Proceeds	January 1, 2022 (Note 4)
before Intended Use”
Amendments to IAS 37 “Onerous Contracts - Cost of Fulfilling a	January 1, 2022 (Note 5)
Contract”

Note 1: Unless stated otherwise, the above New IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.
Note 2: The amendments to IFRS 9 will be applied prospectively to modifications and exchanges of financial liabilities that occur on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IAS 41 “Agriculture” will be applied prospectively to the fair value measurements on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IFRS 1 “First-time Adoptions of IFRSs” will be applied retrospectively for annual reporting periods beginning on or after January 1, 2022.
Note 3: The amendments are applicable to business combinations for which the acquisition date is on or after the beginning of the annual reporting period beginning on or after January 1, 2022.
Note 4: The amendments are applicable to property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after January 1, 2021.
Note 5: The amendments are applicable to contracts for which the entity has not yet fulfilled all its obligations on January 1, 2022.
Note 6: The amendments will be applied prospectively for annual reporting periods beginning on or after January 1, 2023.
Note 7: The amendments are applicable to changes in accounting estimates and changes in accounting policies that occur on or after the beginning of the annual reporting period beginning on or after January 1, 2023.
i. Amendments to IAS 1 “Disclosure of Accounting Policies”

The amendments specify that the Group should refer to the definition of material to determine its material accounting policy information to be disclosed. Accounting policy information is material if it can reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements. The amendments also clarify that:

accounting policy information that relates to immaterial transactions, other events or conditions is immaterial and need not be disclosed;
the Group may consider the accounting policy information as material because of the nature of the related transactions, other events or conditions, even if the amounts are immaterial; and
not all accounting policy information relating to material transactions, other events or conditions is itself material.

The amendments also illustrate that accounting policy information is likely to be considered as material to the financial statements if that information relates to material transactions, other events or conditions and:

(i) the Group changed its accounting policy during the reporting period and this change resulted in a material change to the information in the financial statements;
(ii) the Group chose the accounting policy from options permitted by the standards;
(iii) the accounting policy was developed in accordance with IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors” in the absence of an IFRS that specifically applies;
(iv) the accounting policy relates to an area for which the Group is required to make significant judgements or assumptions in applying an accounting policy, and the Group discloses those judgements or assumptions; or
(v) the accounting is complex and users of the financial statements would otherwise not understand those material transactions, other events or conditions.
ii. Amendments to IAS 8 “Definition of Accounting Estimates”

The amendments define that accounting estimates are monetary amounts in financial statements that are subject to measurement uncertainty. In applying accounting policies, the Group may be required to measure items at monetary amounts that cannot be observed directly and must instead be estimated. In such a case, the Group uses measurement techniques and inputs to develop accounting estimates to achieve the objective. The effects on an accounting estimate of a change in a measurement technique or a change in an input are

changes in accounting estimates unless they result from the correction of prior period errors.

Except for the above impact, as of the date the consolidated financial statements were authorized for issue, the Group is continuously assessing the possible impact that the application of other standards and interpretations will have on the Group’s financial position and financial performance and will disclose the relevant impact when the assessment is completed.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(1) Statement of compliance

The consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRSs as endorsed and issued into effect by the FSC.

(2) Basis of preparation

The consolidated financial statements have been prepared on the historical cost basis except for financial instruments which are measured at fair value and defined benefit liabilities.

The fair value measurements, which are grouped into Levels 1 to 3 based on the degree to which the fair value measurement inputs are observable and based on the significance of the inputs to the fair value measurement in its entirety, are described as follows:

i. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;
ii. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for an asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

iii. Level 3 inputs are unobservable inputs for an asset or liability.

(3) Classification of current and non-current assets and liabilities

Current assets include:

i. Assets held primarily for the purpose of trading;
ii. Assets expected to be realized within 12 months after the reporting period; and
iii. Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period.

Current liabilities include:

i. Liabilities held primarily for the purpose of trading;
ii. Liabilities due to be settled within 12 months after the reporting period; and
iii. Liabilities for which the Group does not have an unconditional right to defer settlement for at least 12 months after the reporting period.

Assets and liabilities that are not classified as current are classified as non-current.

(4) Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Group and the entities controlled by the Group (i.e. its subsidiaries).

Income and expenses of subsidiaries acquired or disposed of during the period are included in the consolidated statement of profit or loss and other comprehensive income from the effective dates of acquisitions up to the effective dates of disposals, as appropriate.

When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the Group.

All intra-group transactions, balances, income and expenses are eliminated in full upon consolidation. Total comprehensive income of subsidiaries is attributed to the owners of the Group and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

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

See Note 11, Table 6 and Table 7 for the detailed information of subsidiaries (including the percentage of ownership and main business).

(5) Merger of Enterprises

The merger of enterprises adopts the acquisition law. The acquisition related cost is listed at the current period as an expense occurred and labor acquisition.

Goodwill is measured by the fair value of the transfer price, the amount of the fair value of the acquirer's non-controlling interest and previously held interest is measured by the net value of the identifiable assets and liabilities after the acquisition date. A merger that is achieved in stages is measured at the fair value of the acquisition date and is re-measured by the Group's previously

held interest from the acquiree, if any profits or losses are incurred shall be recognized. A non-controlling interest of the acquiree's current ownership rights and the right to a proportional entitlement to the acquiree’s net assets of the acquiree at the time of liquidation shall be measured at fair value. Other non-controlling interests are measured at fair value.

(6) Foreign currencies

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

Foreign currency items are converted at the closing exchange rate on each balance sheet date. The exchange difference arising from the delivery of monetary items or the conversion of monetary items is recognized as a profit or loss in the current period of occurrence.

Non-monetary items measured at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Exchange differences arising on the retranslation of non-monetary items are included in profit or loss for the year except for exchange differences arising on the retranslation of non-monetary items in respect of which profit and losses are recognized directly in other comprehensive income, in which case, the exchange differences are also recognized directly in other comprehensive income. Nonmonetary items that are measured in terms of historical cost in foreign currencies are not retranslated.

For the purposes of presenting consolidated financial statements, the assets and liabilities of the Group’s foreign operations are translated into NT$using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period. Exchange differences arising, if any, are recognized in other comprehensive income and accumulated in equity (attributed to non-controlling interests as appropriate).

(7) Life Insurance termination cash value

The life insurance termination cash value is the savings life insurance that the Group insured for the employees and the Group is the beneficiary. If the premium paid is the contract termination cash value part, it is listed as the deduction of the annual insurance expenses, and the carrying amount of life insurance termination cash is added. If the period of the insurance expires or the contract is terminated, the amount received will be fully received, and the carrying amount of the life insurance termination cash value will be reduced.

(8) Inventories

Inventories includes raw materials, manufactured goods, in-process products and commodities. Inventory is measured by the cost and the value of net realization, comparing costs with net

realizable value is based on individual items except for those in same inventory category. Net realizable value means under normal circumstances the balance after the estimated cost required to complete the investment and sale is deducted. The weighted average method is adopted to calculate inventory cost.

(9) Property, plant and equipment

Property, plant and equipment are recognized at cost and subsequently valued by costs minus the amount of accumulated depreciation. Property, plant and equipment’s amortization is measured based on straight-line basis, and each significant depreciation is separately accounted. At each year end, the Group examines the estimated durability, residual value and depreciation methods, and delays the impact of using altered accounting estimates.

In addition to the listing of property, plant and equipment, the difference between the net disposition price and the carrying amount of the asset is recognized as profit and loss.

(10) Goodwill

The goodwill obtained by the merger of enterprises is measured by the amount of goodwill recognized on the date of acquisition as a cost, later valued by the amount after the cost minus the accumulated impairment loss.

For the purpose of the impairment test, goodwill is apportioned among the cash-generating units or groups of cash-generating units ("cash-generating units") that the merger Group expects to benefit from the combined effect.

The cash-generating units of apportioned goodwill carries out the impairment test of that unit each year (and if there are indications that the unit may have already been impaired) by comparing the carrying amount of the unit containing goodwill with its recoverable amount. If the goodwill apportioned to the cash-generating units is obtained by the current merger, the unit shall conduct an impairment test before the end of the year. If the recoverable amount of goodwill’s cash-generating units is less than the carrying amount, the impairment loss reduces the carrying amount of the cash-generating units of apportioned goodwill, and thus should reduce the carrying amount of each assets in proportion to the carrying amount of other assets within the unit. Any impairment losses are directly recognized as current losses. The impairment loss of goodwill may not be rotated during the subsequent period.

When disposing an operation of the apportioned goodwill’s cash-generating units, the goodwill value related to the disposition of the operation is included in the operation’s carrying amount to determine the profit and loss of the disposition.

(11) Intangible assets
i. Acquired separately

Intangible assets with finite useful lives that are acquired separately are initially measured at cost and subsequently measured at cost less accumulated amortization and accumulated impairment loss. Amortization is recognized on a straight-line method basis. The estimated useful lives, residual values, and amortization methods are reviewed by the Group at the end of each reporting period, with the effect of any changes in the estimates accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired separately are measured at cost less accumulated impairment loss.

ii. Acquired by Merger

Goodwill arising on an acquisition of a business is carried at cost as established at the acquisition date, subsequently the valuation method is the same as that of the intangible asset acquired separately.

iii. Derecognition

When derecognizing the intangible assets, the difference between the net disposition price and the asset’s carrying amount is recognized as the profit and loss of the current period.

(12) Impairment of property, plant and equipment, right-of-use asset and intangible assets (except goodwill)

At the end of each reporting period, the Group reviews the carrying amounts of its property, plant and equipment, right-of-use asset and intangible assets, excluding goodwill, to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Corporate assets are allocated to the individual cash-generating units on a reasonable and consistent basis of allocation.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually and whenever there is an indication that the assets may be impaired.

The recoverable amount is the higher of fair value less costs to sell and value in use. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount, with the resulting impairment loss recognized in profit or loss.

When an impairment loss is subsequently reversed, the carrying amount of the corresponding

asset, cash-generating unit or assets related to contract costs is increased to the revised estimate of its recoverable amount, but only to the extent of the carrying amount that would have been determined had no impairment loss been recognized on the asset, cash-generating unit or assets related to contract costs in prior years (less amortization or depreciation). A reversal of an impairment loss is recognized in profit or loss.

(13) Financial instruments

Financial assets and financial liabilities are recognized when the Group becomes a party to the contractual provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.

i. Financial Assets

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis.

(i) Measurement Categories

Financial assets are classified into the following categories: Financial assets measured at amortized cost and investments in equity instruments at FVTOCI.

A. Investments in equity instruments at FVTOCI

On initial recognition, the Group may make an irrevocable election to designate investments in equity instruments as at FVTOCI. Designation at FVTOCI is not permitted if the equity investment is held for trading or if it is contingent consideration recognized by an acquirer in a business combination.

Investments in equity instruments at FVTOCI are subsequently measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in other equity. The cumulative gain or loss will not be reclassified to profit or loss on the disposal of the equity investments; instead, they will be transferred to retained earnings.

Dividends on these investments in equity instruments are recognized in profit or loss when the Group’s right to receive the dividends is established, unless the dividends clearly represent a recovery of part of the cost of the investment.

B. Financial assets measured at amortized cost

Financial assets that meet the following conditions are subsequently measured at amortized cost:

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

Subsequent to initial recognition, financial assets measured at amortized cost, including cash and cash equivalents and trade receivables measured at amortized cost, are measured at amortized cost, which equals the gross carrying amount determined using the effective interest method less any impairment loss. Exchange differences are recognized in profit or loss.

Interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset, except for:

A. Purchased or originated credit-impaired financial assets, for which interest income is calculated by applying the credit-adjusted effective interest rate to the amortized cost of such a financial asset; and
B. Financial asset that is not credit impaired on purchase or origination but has subsequently become credit impaired, for which interest income is calculated by applying the effective interest rate to the amortized cost of such a financial assets in subsequent reporting periods.

Cash equivalents include within 3-month time deposits with original maturities, which are highly liquid, readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These cash equivalents are held for the purpose of meeting short-term cash commitments.

(ii) Impairment of financial assets

The Group recognizes a loss allowance for expected credit losses on financial assets measured at amortized cost (including account receivables).

The Group always recognizes lifetime expected credit losses (i.e. ECLs) for trade receivables and lease receivables. For all other financial instruments, the Group recognizes lifetime ECLs when there has been a significant increase in credit risk

since initial recognition. If, on the other hand, the credit risk on such a financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECLs.

Expected credit losses reflect the weighted average of credit losses with the respective risks of a default occurring as the weights. Lifetime ECLs represent the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECLs represent the portion of lifetime ECLs that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.

(iii) The impairment loss of all financial assets is recognized in profit or loss by a reduction in their carrying amounts through a loss allowance account, except for investments in debt instruments that are measured at FVTOCI, for which the loss allowance is recognized in other comprehensive income and the carrying amounts of such financial assets are not reduced.Derecognition of financial assets

The Group derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. On derecognition of a financial asset at amortized cost in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss.

On derecognition of an investment in an equity instrument at FVTOCI, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss, and the cumulative gain or loss which had been recognized in other comprehensive income is transferred directly to retained earnings, without recycling through profit or loss.

ii. Financial liabilities

(i) Subsequent measurement

All the Group’s financial liabilities are measured at amortized cost using the effective interest method.

(ii) Derecognition of financial liabilities

The difference between the carrying amount of the financial liability derecognized and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

(14) Provision

The amount recognized as a provision (including the contractual obligation that the lease contract should be maintained or restored before returning it to the lessor) is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, it carrying amount is the present value of those cash flows.

Decommissioning cost

The Group shall, within the scope of the duty, rehabilitation or similar obligations of property, plant and equipment, recognize as provision for the costs of the removal or rehabilitation of property, plant and equipment.

(15) Revenue recognition

The Group identifies contracts with customers, allocates the transaction price to the performance obligations and recognizes revenue when performance obligations are satisfied.

i. Revenue from the sale of goods

Goods sales revenue comes from the sale of various types of fiber optic cables, optical fiber communication components, optical communication systems and optical sensor component systems. As the above products arrive at the customer's designated location or at the time of departure, the customer has the right to set the price and use of the goods and has the primary responsibility for re-sales, and bear the risk of obsolescence of the goods, the Group should recognize revenue and accounts receivables at the time.

When the material processing is performed, the control of the ownership of the processed product is not transferred, and the income is not recognized when the material is removed.

ii. Revenue from the rendering of services

Labor revenue comes from digital information consulting services and the education tutorial services consisting primary, middle and high school curriculum courses. The revenue related to the digital information consulting services is recognized when the service is provided. The education service revenue is recognized based on the taught proportion of the course (teaching progress).

(16) Leases

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

i. The Group as lessor

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

Lease payments (less any lease incentives payable) from operating leases are recognized as income on a straight-line basis over the terms of the relevant leases. Lease modification that resulted from a negotiation with a lessee is accounted for as a new lease from the effective date of modification.

Variable lease payments that do not depend on an index or a rate are recognized as income in the periods in which they are incurred.

ii. The Group as lessee

The Group recognizes right-of-use assets and lease liabilities for all leases at the commencement date of a lease, except for short-term leases and low-value asset leases accounted for by applying a recognition exemption where lease payments are recognized as expenses on a straight-line basis over the lease terms.

Right-of-use assets are initially measured at cost, which comprises the initial measurement of lease liabilities adjusted for lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs needed to restore the underlying assets, and less any lease incentives received. Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any remeasurement of the lease liabilities. Right-of-use assets are presented on a separate line in the consolidated balance sheets.

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

Lease liabilities are initially measured at the present value of the lease payments, which comprise fixed payments, in-substance fixed payments, variable lease payments which depend on an index or a rate, residual value guarantees, the exercise price of a purchase option if the Group is reasonably certain to exercise that option, and payments of penalties for terminating a lease if the lease term reflects such termination, less any lease incentives receivable. The lease payments are discounted using the interest rate implicit in a lease, if that rate can be readily determined. If that rate cannot be readily determined, the lessee’s incremental borrowing rate will be used.

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

The Group negotiates with the lessor for rent concessions as a direct consequence of the Covid-19 to change the lease payments originally due by June 30, 2021, that results in the revised consideration for the lease, and there is no substantive change to other terms and conditions. The Group elects to apply the practical expedient to all of these rent concessions for applicable lease contracts and, therefore, does not assess whether the rent concessions are lease modifications. Instead, the Group recognizes the reduction in lease payment in profit or loss as (other operating income and expenses), in the period in which the events or conditions that trigger the concession occur, and makes a corresponding adjustment to the lease liability. Variable lease payments that do not depend on an index or a rate are recognized as expenses in the periods in which they are incurred.

(17) Borrowing costs

Borrowing costs are recognized when incurred as a profit or loss at the current period.

(18) Government grants

Government grants are not recognized until there is reasonable assurance that the Group will comply with the conditions attached to them and that the grants will be received.

(19) Employee benefits

i. Short-term employee benefits

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related services.

ii. Retirement benefits

Payments to defined contribution retirement benefit plans are recognized as expenses when employees have rendered services entitling them to the contributions.

Defined benefit costs (including service cost, net interest and remeasurement) under defined benefit retirement benefit plans are determined using the projected unit credit method. Service cost (including current service cost) and net interest on the net defined benefit

liabilities (assets) are recognized as employee benefits expense in the period in which they occur. Remeasurement (comprising actuarial gains and losses and the return on plan assets excluding interest, is recognized in other comprehensive income in the period in which it occurs, and will not be reclassified to profit or loss afterwards.

Net defined benefit liabilities (assets) represent the actual deficit (surplus) in the Group’s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any refunds from the plans or reductions in future contributions to the plans.

(20) Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

i. Current tax

Income tax payable (recoverable) is based on taxable profit (loss) for the year determined by the Group according to the applicable tax laws of each tax jurisdiction.

According to the Income Tax Law in the ROC, an additional tax on unappropriated earnings is provided for in the year the shareholders approve to retain earnings.

Adjustments of prior years’ tax liabilities are added to or deducted from the current year’s tax provision.

ii. Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities and the corresponding tax bases used in the computation of taxable profit.

Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences, unused loss carry forward and unused tax credits for purchases of machinery, equipment and technology, research and development expenditures and personnel training expenditures to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and associates, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. A previously unrecognized deferred tax asset is also reviewed at the end of each reporting period and recognized to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the year which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

iii. Current and deferred taxes

Current and deferred taxes are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred taxes are also recognized in other comprehensive income or directly in equity, respectively.

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

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

The Group considers the economic implications of the COVID-19 when making its critical accounting estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised if the revisions affect only that period or in the period of the revisions and future periods if the revisions affect both current and future periods.

Key Sources of Estimation Uncertainty

Impairment of goodwill

Determining whether goodwill is impaired requires an estimation of the value in use of the cashgenerating units to which goodwill has been allocated. The calculation of the value in use requires management to estimate the future cash flows expected to arise from the cash-generating units and a suitable discount rate in order to calculate the present value. Where the actual future cash flows are less than expected, a material impairment loss may arise.

6. CASH AND CASH EQUIVALENTS

Cash on hand Checking accounts and demand deposits Cash Equivalents Time deposits within 3 months expiration date	December 31,2020 $ 948 176,904 4,900 $ 182,752	December 31,2019	December 31,2019
			$ 1,309 179,919 4,305 $ 185,533

The market interest rate range on the balance sheet date is as follows:

Term Deposits	December31,2020 0.41%	December31,2019
		1.45%

7. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

December 31, 2020 December 31, 2019

Investments in equity instruments Domestic investments

Unlisted shares

Accuagile Co., Ltd ordinary shares

$ 4,500 $ 4,500

In order to enhance its competitive advantage, the Group seeks a strategic alliance of educational digital training system providers and establishes a long-term cooperative relationship. On September 26, 2019, it participated in the cash increase of Accuagile Co., Ltd, and the Group subscribed 1,500 thousand shares. The investment amount is NT$4,500 thousand in total, and 15% of its equity is acquired.

8. FINANCIAL ASSETS MEASURED AT AMORTIZED COST

Current Performance Security Deposits Time deposits with original maturities exceeding 3 months Interest rate range Non-current Time deposits Interest rate range	December 31,2020 $ - 17,265 $ 17,265 0.56%～1.40% $ 4,860 0.82%~0.87%	December 31,2019
		$ 5,655 4,391 $ 10,046 2.20% $ 4,860 1.09%~1.12%

(1) According to the regulations of the education bureaus of the counties and cities where the branch is located, after the tutorial school’s register has been approved, the time deposit slips in the name of the tutorial school, without governmental approval, should not be put to use.
(2) The Group assesses that the expected credit risk of the financial assets measured by amortization cost is not high, and its credit risk has not increased after the original recognition.
(3) For information on the pledge of financial assets measured at amortization costs, please refer to Note 34.

9. NOTES RECEIVABLES AND ACCOUNTS RECEIVABLES

Notes receivables Measured at amortized costs Gross carrying amount Less: Allowance for impairment loss Accounts receivables Measured at amortized costs Gross carrying amount Less: Allowance for impairment loss	December31,2020 $ 325 - $ 325 $ 6,938 - $ 6,938	December31,2019	December31,2019
			$ 546 - $ 546 $ 57,840 - $ 57,840

The average credit period for sales of goods was 30~90 days. To mitigate credit risk, the Group’s management assigns a dedicated team responsible for the decision of the credit line, credit approval and other monitoring procedures to ensure that the recovery of overdue receivables has taken appropriate action. In addition, the Group reviews the recoverable amounts of receivables on the reporting date to ensure that receivables that cannot be recovered include appropriate impairment losses. As result, the Group’s management believes that the credit risk has been significantly reduced.

The Group measures the loss allowance for accountsreceivables at an amount equal to lifetime ECLs (excluding special individual payments that listed are as 100% loss). The expected credit losses on accountsreceivables are estimated using a provision matrix by reference to past default experience with the respective debtors and an analysis of the debtors’ current financial positions, adjusted for factors that are specific to the debtors,

general economic conditions of the industry in which the debtors operate and an assessment of both the current as well as the forecasted direction of conditions at the reporting date. The Group estimates expected credit losses based on the number of days for which receivables are past due. As the Group’s historical credit loss experience shows significantly different loss patterns for different customer segments, the provision for losses based on past due status of receivables is not further distinguished according to different segments of the Group’s customer base.

The Group writes off a accountsreceivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery. For accountsreceivables that have been written off, the Group continues to engage in enforcement activity to attempt to recover the receivables due. Where recoveries are made, these are recognized in profit or loss.

The Group measures the allowance loss of accounts receivables in accordance with the preparation matrix as follows:

December 31, 2020

ecember 31, 2020
Gross carrying amount Loss allowance (lifetime ECL) Amortized cost	Not Overdue $ 6,938 - $ 6,938		Overdue Within 90 Days $ - - $ -	Overdue 91-180 Days $ - - $ -		Overdue 181-365 Days $ - - $ -		Total
								$ 6,938 - $ 6,938

December 31, 2019

Gross carrying amount Loss allowance (lifetime ECL) Amortized cost	Not Overdue $ 46,252 - $ 46,252		Overdue Within 90 Days $ 11,588 - $ 11,588	Overdue 91-180 Days $ - - $ -		Overdue 181-365 Days $ - - $ -		Total
								$ 57,840 - $ 57,840

The movements of the allowance for doubtful accounts receivables are as follows:

For the Years Ended December 31 2020 2019

Balance at January 1 Less: Amounts actually written off Balance at December 31	$ - - ( $ -	$ 11 11) $ -

As of December 31 2020, and 2019, the Group’s average period of notes receivable is not overdue.

10. INVENTORIES

Products Finished goods Raw materials Work in progress	December 31,2020 $ 2,516 - - - $ 2,516	December 31,2019	December 31,2019
			$ 1,848 8,853 9,858 757 $ 21,316

The cost of inventories sold in 2020 and 2019 were NT$74,499 thousand and NT$153,888 thousand respectively. The cost of goods sold in 2020 and 2019 respectively included a net loss of value of inventory of NT$536 thousand and NT$17,027 thousand. In 2020, the loss of NT$43,757 thousand in price of inventory was offset by the sale.

11. SUBSIDARIES

Listed in Consolidated Financial Statement of Subsidiaries:

The main body of this consolidated financial report is as follows:

Name of Investment Company Success Prime Corp.	Name of Subsidiary Chen Li Education Co., Ltd. (Chen Li Education) Prime Optical Fiber Co., Ltd. (Prime Optical Fiber) Here Enterprise Co., Ltd （Here Enterprise）（Original Prime Education Consulting Services Co,, Ltd (Prime Education) Chen Li ELM Co., Ltd. (Chen Li ELM)	Nature of Business Education services Optical fiber Production Educational advisory services Education services	% of Ownership December 31,2020 December 31,2019 100% 100% - 100% 100% 51% 100% 100%	Note
			December 31,2020 100% - 100% 100%
				- Note 4 Note 5 Note 1

	Li-Ren Education Co., Ltd.	Education services	60%	-	Note 2
	(Li-Ren Education)
	Chen Li Zhiyi Education Co., Ltd.	Education services	60%	-	Note 3
	(Chen Li Zhiyi Education)
Chen Li Education Co., Ltd.	CHEN LI Education Group Limited	Holding Company	100%	100%	-
CHEN LI Education Group	CHEN LI Education Group (HK)	Holding Company	100%	100%	-
Limited	Limited
CHEN LI Education Group	Chen Li (Xiamen) Education	Educational Advisory	100%	100%	-
(HK) Limited	Consulting Co., Ltd.	services

Note 1: In order to expand the market share of education market, the Group acquired 100% equity of Chuang-Si Digital Technology Co., Ltd. from related parties through a resolution agreement by the board of directors on October 24, 2019. The transaction base date was October 31, 2019, and the purchase price was NT$9,900 thousand. After the Group completed the acquisition of Chuang-Si Digital Technology Co., Ltd., the Company name changed to Chen Li ELM, thus the subsidiary’s focuses its operation strategy on primary education products and services.

Note 2: To enhance the diversification of education businesses, the Group passed a resolution at the board meeting to establish a joint venture, Li-Ren Education Co., Ltd., On December 19, 2019. The Group invested NT$3,000 thousand and obtained 60% of its equity, the subsidiary focuses on biology education as its core strategic operations.

Note 3: To expand the tutorial education business to Hsinchu districts, the Group passed a resolution at the board meeting to establish a joint venture, Chen Li Zhiyi Education Co., Ltd., on March 24, 2020. The Group invested NT$3,000 thousand and acquired 60% of joint venture’s equity.

Note 4: In order to achieve specialization of labor and corporate reorganization to improve competitive and operating performances, the board passed a resolution on March 24, 2020 to transfer the optical fiber business (including operations and property) to Prime Optical Fiber Co., Ltd, which is 100% owned by the company. The corporation has obtained the approval letter No. 1090005233 from the Taiwan Stock Exchange. Let its operating value be NT$86,000 thousands and Prime Optical Fiber will issue 5,000 thousand new shares at a premium of NT$17.2 per share, each with a par value of NT$10, as the consideration.

In order to continue to focus on core competences and future operational development of the education businesses, and to grow the market competitiveness and market share of the education industry, hence leveraging existing resources more effectively to bring steady revenue and profit, the Group passed the resolution of disposal of 100% optical fiber

subsidiary’s equity on July 3, 2020 board meeting, from this date on, Prime Optical Fiber is no longer a subsidiary of the Group.

Note 5: The Group passed a resolution to acquire 49% equity of Success Prime Education from its related parties on August 12, 2020, making Success Prime Education a 100% owned subsidiary by the Group. Success Prime Education was renamed to Here Enterprise Co., Ltd. Through a passed resolution at the board meeting on October 30, 2020.

12. PROPERTY, PLANT, EQUIPMENT

Cost January 1, 2019 Balance Addition Disposals Net Exchange Difference December 31, 2019 Balance Accumulated depreciation January 1, 2019 Balance Depreciation expenses Disposals Net Exchange Difference December 31, 2019 Balance December 31, 2019 Net amount Cost January 1, 2020 Balance Addition Disposition Reclassification Net Exchange Difference December 31, 2020 Balance Accumulated depreciation January 1, 2020 Balance Depreciation Fee Disposition Reclassification Net Exchange Difference December 31, 2020 Balance	Own Land	Own Land		Buildings	Machinery Equipment	Leasing of modified items	Office Equipment	Other Equipment	Total
		$ 224,490 - - - $ 224,490 $ - - - - $ - $ 224,490 $ 224,490 - - - - $ 224,490 $ - - - - - $ -		$ 35,075 - - - $ 35,075 $ 2,984 891 - - $ 3,875 $ 31,200 $ 35,075 - - - - $ 35,075 $ 3,875 891 - - - $ 4,766	$ 5,336 1,906 ( 85 ) - $ 7,157 $ 1,087 1,746 ( 78 ) - $ 2,755 $ 4,402 $ 7,157 8,671 ( 15,736 ) ( 92 ) - $ - $ 2,755 2,322 ( 5,044 ) ( 33 ) - $ -	$ 69,552 20,519 ( 9,721 ) ( 760) $ 79,590 $ 42,885 9,863 ( 9,648 ) ( 198) $ 42,902 $ 36,688 $ 79,590 2,752 ( 30,122 ) - 329 $ 52,549 $ 42,902 8,923 ( 30,102 ) 765 161 $ 22,649	$ 30,657 4,669 ( 7,446 ) ( 91) $ 27,789 $ 14,516 8,754 ( 7,380 ) ( 66) $ 15,824 $ 11,965 $ 27,789 2,428 ( 6,236 ) 92 39 $ 24,112 $ 15,824 6,636 ( 6,236 ) ( 732 ) 20 $ 15,512	$ 1,406 - - - $ 1,406 $ 796 241 - - $ 1,037 $ 369 $ 1,406 894 ( 1,088 ) - - $ 1,212 $ 1,037 401 ( 942 ) - - $ 496	$ 366,516 27,094 ( 17,252 ) ( 851) $ 375,507 $ 62,268 21,495 ( 17,106 ) ( 264) $ 66,393 $ 309,114 $ 375,507 14,745 ( 53,182 ) - 368 $ 337,438 $ 66,393 19,173 ( 42,324 ) - 181 $ 43,423

December 31, 2020 Net amount $ 224,490 $ 30,309 $ - $ 29,900 $ 8,600 $ 716 $ 294,015

For the year 2020 and 2019, there was no indication of an impairment loss; therefore, the Group did not perform impairment assessment.

The above items of property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives as follows:

Buildings	25-32 years
Machinery Equipment	3 years
Leasing of Modified Items	3-7 years
Office Equipment	3-7 years
Other Equipment	5 years

Property, plant and equipment pledged as collateral for bank borrowings are set out in Note 34.

13. LEASE ARRANGEMENTS

(1) Rights-of-use assets

December 31, 2020 December 31, 2019 Carrying amounts Buildings $ 105,685 $ 222,391

Additions to right-of-use assets Depreciation charge for right-of- use assets Buildings		For the Years Ended December 31	For the Years Ended December 31	For the Years Ended December 31
		2020 $ 28,879 $ 63,507		2019
				$ 10,656 $ 68,671

Except for the additions and depreciation fee accounted above, the Group’s evaluation did not find any sign of transfer or impairment on 2020 and 2019 right-of-use assets.

(2) Lease liabilities

December 31, 2020 December 31, 2019

Carrying amounts

Current Non-current	December 31,2020 $ 45,184 61,908 $ 107,092	December 31,2019	December 31,2019
			$ 67,702 156,580 $ 224,282

Range of discount rate for lease liabilities was as follows:

Buildings	December 31,2020 1.30%～1.74%	December 31,2019
		1.63%～1.74%

(3) Material lease-in activities and terms

As the market conditions severely affected by COVID-19 in 2020, the Group negotiated with the lessor for rent concessions for land lease, the negotiated conditions are as follow:

i. The Group and the Taipei City Shilin Farmers' Association negotiated the lease of Chen Li Education Shilin Branch. The Taipei City Shilin Farmers' Association agreed to unconditionally reduce the rent for 4 months by 10%.
ii. The Group and the New Taipei City Banqiao Farmers' Association negotiated the lease of Chen Li Education Banqiao Branch. The New Taipei City Banqiao Farmers' Association agreed to unconditionally reduce the rent for 3 months by 5%.
iii. The Group and the lessor negotiated the lease for Chenli Education Xinzhuang Branch, and the lessor agreed to unconditionally reduce the rent for 6 months by 5%.
iv. The Group and Jing Yuan Construction Co., Ltd. negotiated the lease of Chen Li Education Hsinchu Branch, and Jing Yuan Construction Co., Ltd. agreed to unconditionally reduce the rent for 1 month.
v. The Group and the ROC Buddhist Compassion Relief Tzu Chi Foundation negotiated the lease of Chen Li Education Chiayi Branch. The Tzu Chi Foundation agreed to unconditionally reduce the rent for 3 months by 30%.
vi. The Group and First Commercial Bank negotiated the lease of Chen Li Education Tainan Branch. First Commercial Bank agreed to unconditionally reduce the rent for 3 months by 10%.
vii. The Group and Neihu Construction Enterprise Co., Ltd. negotiated the lease of Chen Li Education Neihu branch. Neihu Construction Enterprise Co., Ltd. agreed to unconditionally reduce the rent from July 1, 2020 to June 30, 2021 by 4%.
viii.The Group and Rongyu Co., Ltd. negotiated the lease of Chen Li ELM Taichung office, and Rongyu Co., Ltd. agreed to unconditionally reduce the rent for 3 months by NT$5 thousand

per month.

The Group recognized the impact of the aforementioned rent reduction of NT$575 thousand in 2020 (including other gains and losses).

(4) Other lease information

Total cash outflow for leases		For the Years Ended December 31	For the Years Ended December 31	For the Years Ended December 31
		2020 $ 65,048		2019
				$ 71,166

14. GOODWILL AND TRADEMARKS

DWILL AND TRADEMARKS
Goodwill Trademarks		2020 $ 81,419 $ 404,144		2019
				$ 81,419 $ 404,144

The Goodwill and Trademark value of Group's acquisition of Chen Li Education in March 2017, mainly comes from the expected growth of future revenue from Education enterprise. The intangible asset, trademark, has a legal life of 10 years but is renewable every 10 years at minimal cost. Management believes the Group will renew the trademark continuously and has the ability to do so. Various studies on areas including product life cycles, market, competitive and environmental trends, and brand extension opportunities have been performed by the management of the Group, which supported its opinion that there is no foreseeable limit to the period over which the trademarked products are expected to generate net cash flows. Therefore, the trademark is considered to have an indefinite useful life. The trademark will not be amortized until its useful life is determined to be finite. Instead it will be tested for impairment annually and whenever there is an indication that it may be impaired. The Group conducted an impairment test on goodwill and trademark rights on December 31, 2020. After the assessment, the recoverable amount of the cashgenerating unit was greater than its carrying amount, so no impairment loss was recognized. The recoverable amount of the cash-generating unit is determined on the basis of the valuein-use, and the cash flow estimate of the financial management budget approved by the Group for the next 5 years is calculated, and the annual discount rates of 14.09% and 13.80% are calculated in 2020 and 2019 respectively. The cash flow estimate for the financial budget is based on historical data and estimates of future industry changes. The management believes that any reasonably possible change in the key assumptions

underlying the recoverable amount will not result in the total carrying amount of the cashgenerating unit to exceed the total recoverable amount.

15. COMPUTER SOFTWARE

Computer software	December 31,2020 $ 9,225	December 31,2019	December 31,2019
			$ 12,297

Intangible assets are amortized on a straight-line basis over their estimated useful lives as follows:

Computer Software

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16. LIFE INSURANCE TERMINATION CASH VALUE

Information of changes in the cash value of annuity insurance termination is as follows:

Year-Start Balance Increase (decrease) in the cash value of life insurance termination this year Year-End Balance		For the Years Ended December 31	For the Years Ended December 31	For the Years Ended December 31
		2020 $ 83,663 466) $ 83,197		2019
	(			$ 83,555 108 $ 83,663

17. OTHER ASSETS

Current Prepayments and prepaid fees Refundable Deposit	December31,2020 $ 6,122 -	December31,2019
		$ 6,339 739

Other Non-current Refundable Deposit Prepaid Equipment Payment	476 $ 6,598 $ 13,558 525 $ 14,083	1,619 $ 8,697 $ 18,917 10,374 $ 29,291

18. BORROWINGS

(1) Short-term borrowings

rt-term borrowings
Secured borrowings Bank borrowings	December 31,2020 $ -	December 31,2019
			$ 80,000

The interest rates of bank revolving borrowings were 1.55% at December 31, 2019.

(2) Long-term borrowings

Secured borrowings Bank borrowings- Shanghai Commercial and Savings Bank Less: Current portion Long-term borrowings	December 31,2020 $ 21,870 ( 2,430) $ 19,440	December 31,2019	December 31,2019
	(	(	$ 24,300 2,430) $ 21,870

The aforementioned long-term and short-term bank borrowings are secured by the Group’s freehold land and buildings (see Note 34), in which the long-term bank borrowings maturity date is December 24, 2029. As of December 31, 2020, and 2019, the effective annual interest rate is 1.34% and 1.59% respectively.

19. ACCOUNTS PAYABLE

Hourly fee payables to Teachers Accounts Payables Others	December31,2020 $ 19,381 - 1,565	December31,2019	December31,2019
			$ 14,802 5,085 4,324

$ 20,946

$ 24,211

20. OTHER PAYABLES

Salary and bonus payable Compensation payable to Employees Compensation payable to Directors Other	December 31,2020 $ 23,113 2,785 1,164 16,057 $ 43,119	December 31,2019	December 31,2019
			$ 29,330 2,805 1,369 39,340 $ 72,844

21. RETIREMENT BENEFIT PLANS

(1) Defined contribution plans

The Group, except for its subsidiaries in China, adopted a pension plan under the Labor Pension Act (LPA), which is a state-managed defined contribution plan. Under the LPA, the Group makes monthly contributions to employees’ individual pension accounts at 6% of monthly salaries and wages.

The employees of the Group’s subsidiary in China are members of a state-managed retirement benefit plan operated by the government of China. The subsidiary is required to contribute a specified percentage of payroll costs to the retirement benefit scheme to fund the benefits. The only obligation of the Group with respect to the retirement benefit plan is to make the specified contributions.

(2) Defined benefit plans

The defined benefit plans adopted by only partial employees of the Group in accordance with the Labor Standards Act is operated by the ROC government. Pension benefits are calculated on the basis of the length of service and average monthly salaries of the 6 months before retirement. The Group contributes amounts equal to 2% of total monthly salaries and wages to a pension fund administered by the pension fund monitoring committee. Pension contributions are deposited in the Bank of Taiwan in the committee’s name. Before the end of each year, the Group assesses the balance in the pension fund. If the amount of the balance in the pension fund is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Group is required to fund the

difference in one appropriation that should be made before the end of March of the next year. The pension fund is managed by the Bureau of Labor Funds, Ministry of Labor (the “Bureau”); the Group has no right to influence the investment policy and strategy. The Group has settled the above-mentioned retirement benefit plans in March 2020, retrieved NT$4,051 thousand and recognized settled losses of NT$2,611 thousand.

The amounts in the consolidated balance sheets in respect of the Group’s defined benefit plans were as follows:

Present value of defined benefit obligation Fair value of plan assets Net defined benefit assets	December 31,2019	December 31,2019
	( (	$ 8,676 15,338) $ 6,662)

Movements in net defined benefit assets were as follows:

Balance at January 1, 2019 Net interest expense (revenue) Recognized in profit or loss Remeasurement Return on plan assets (excluding the amount included in net interest) Actuarial loss- demographic assumptions change Actuarial loss - change in financial assumptions Actuarial loss - experience adjustments Recognized in other comprehensive income Balance at December 31, 2019	Present Value of the Defined Benefit Obligation $ 7,110 80 80 - 46 227 1,213 1,486 $ 8,676	Fair Value of the Plan Assets ($ 14,671) ( 166) ( 166) ( 501 ) - - - ( 501) ($ 15,338)		Net Defined Benefit Liabilities (Assets)
		( ( ( ( ( (	( ( ( ( (	$ 7,561) 86) 86) 501 ) 46 227 1,213 985 $ 6,662)

An analysis by function of the amounts recognized in profit or loss in respect of the defined benefit plans is as follows:

General and administration expenses (retirement fund profit)

For the Years Ended December31,2019	For the Years Ended December31,2019
(	$ 86)

Through the defined benefit plans under the Labor Standards Law, the Group is exposed to the following risks:

i. Investment risk: The plan assets are invested in domestic and foreign equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the Bureau or under the mandated management. However, in accordance with relevant regulations, the return generated by plan assets should not be below the interest rate for a 2-year time deposit with local banks.
ii. Interest risk: A decrease in the government/corporate bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the plan’s debt investments.
iii. Salary risk: The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the present value of the defined benefit obligation.

The actuarial valuations of the present value of the defined benefit obligation were carried out by qualified actuaries. The significant assumptions used for the purposes of the actuarial valuations were as follows:

Discount rate Expected rate of salary increase	December31,2019
	0.800% 1.125%

If possible reasonable change in each of the significant actuarial assumptions will occur and all other assumptions will remain constant, the present value of the defined benefit obligation would increase (decrease) as follows:

Discount rate 0.25% increase 0.25% decrease Expected rate of salary increase 0.25% increase 0.25% decrease	December 31,2019	December 31,2019
	( (	$ 178) $ 184 $ 177 $ 172)

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

December 31, 2019

The average duration of the defined benefit obligation

10 years

22. EQUITY

(1) Ordinary shares

Authorized shares (in thousands) Authorized capital Issued and paid shares (in thousands) Issued capital	December 31,2020 200,000 $ 2,000,000 19,185 $ 191,854	December 31,2019	December 31,2019
			200,000 $ 2,000,000 17,459 $ 174,594

The Group has increase cash capital through private financing as follows:

Shareholders ' meeting resolution date Private financing base date Number of shares （in thousands） Par value (NT$) Subscription Price (NT$) Total private financing amount (in thousands NT$)	1st 2008.10.31 2008.11.21 14,103 10.00 1.17 16,500	2nd 2008.10.31 2009.12.31 16,575 10.00 1.81 30,000	3rd 2013.05.03 2013.07.25 3,000 10.00 10.00 30,000	4th 2015.05.12 2015.06.23 7,000 10.00 6.30 44,100	5th
					2016.05.09 2016.08.31 8,200 10.00 73.25 600,650

In 2008, 2009, 2013, 2015 and 2016, private financing capital stocks successively processed capital reductions to make losses in 2010 and 2016, and then transferred capital reserves to capital increase in 2017, 2018 and 2020, resulting in the increase or decrease of capital of the Group. The number of private financing common shares in each of the years were 381 thousand shares, 448 thousand shares, 533 thousand shares, 1,243 thousand shares and 9,040 thousand shares respectively.

The above rights and obligations of private financing of new shares are the same as those of ordinary shares issued by the Group. However, according to the Securities Exchange Law, after 3 years of delivery of private financing ordinary

shares and reapply public issuance, can apply for listing transaction on the market. The first to fourth and fifth private equity common shares mentioned above were completed on November 23, 2018 and October 30, 2019, respectively.

(2) Capital surplus

To make up for losses, issue cash, or stock dividends Stock Issue Premium Only to make up for losses Employees stock options exercised Employees stock options exercised	December 31,2020 $ 334,307 2,591 4,292 $ 341,190	December 31,2019	December 31,2019
			$ 360,198 2,591 4,292 $ 367,081

The changes in the balance of various capital reserves of the Group in 2020 is as follows:

January 1, 2020 Balance Cash distribution Stock distribution December 31, 2020 Balance	Stock issuance premium $ 360,198 ( 8,631 ) ( 17,260) $ 334,307		Employees stock options exercised	Employees stock options expired	( (	Total
	( (		$ 2,591 - - $ 2,591	$ 4,292 - - $ 4,292		$ 367,081 8,631 ) 17,260) $ 341,190

The excess of the capital reserve in excess of the premium amount (including the issuance of common shares with excess in denomination) to cover the losses, when the Group has no loss can be used to issue cash dividends or stock dividends, provided that the amount of share capital is limited to a certain percentage of the collected share capital each year.

(3) Retained Earnings and Dividend Policy

The Group’s Articles of Incorporation provide that, when allocating the net profits for each fiscal year, the Group shall first offset its losses in previous years and then set aside the following items accordingly: Legal capital reserve at 10% of the profits left over, until the accumulated legal

capital reserve equals Group’s paid-in capital; special capital reserve in accordance with relevant laws or regulations or as requested by the authorities in charge; any balance left over shall be allocated according to the resolution of the shareholders’ meeting. The Group’s Articles of Incorporation provide the policy about the profit-sharing bonus to employees, please refer to Note 24 (7).

The dividend policy of the Group shall take into account the environment and surplus status of the industry, the demand for future capital expenditure and the long-term financial planning, and if there is a surplus to distribute dividends, the proportion of cash dividend payment shall not be lower than 10% of the total dividend allocated in the current year, and the rest is distributed in the form of stock dividends.

The appropriation for legal capital reserve shall be made until the reserve equals the Group’s paid-in capital. The reserve may be used to offset a deficit or be distributed as dividends in cash for the portion in excess of 25% of the paid-in capital if the Group incurs no loss.

The Group according to the Financial Commission’s issued letter No. 1010012865, No.1010047490, No.1030006415 and “Adoption of international Financial Reporting Standards (IFRSs), a question and answer on the application of the special surplus reserve” and other provisions to mention and rotate the special surplus reserve.

The appropriation of earnings for 2019 and 2018, which had been proposed by the Group’s general shareholders meeting on June 18, 2020 and May 2, 2019, respectively. The appropriation and dividends per share were as follows:

Legal reserve Special reserve Cash dividends Cash dividends per share (NT$)		For the Years Ended December 31	For the Years Ended December 31	For the Years Ended December 31
		2019 $ 7,612 $ 989 $ 17,260 $ 1.00		2018
				$ 12,486 $ 839 $ 69,042 $ 4.00

According to the resolution of the shareholders' meeting on June 18, 2020, the Group decided to finance capital using its capital reserve of NT$1,726 thousand. It is divided into 1,726 thousand shares, each with a par value of NT$10, all of which are ordinary shares, and a capital reserve of NT$8,631 thousand is distributed in cash, NT$0.50 per share.

The proposed appropriation of earnings for 2020 decided by the board meeting on March 9, 2021 is as follows:

Legal reserve Special reserve Cash dividends Cash dividends per share (NT$)	For the Years Ended December31,2020	For the Years Ended December31,2020
	(	$ 6,026 $ 208) $ 56,425 $ 3.00

According to the resolution of the shareholders' meeting on March 9, 2021, the Group decided to use capital reserve of NT$28,213 thousand to distribute cash, NT$1.50 per share.

The appropriation of earnings for 2020 is to be discussed at the shareholders' meeting scheduled on May 28, 2021.

(4) Non-controlling interests

-controlling interests
Balance at January 1 Increased non-controlling interest in the establishment of subsidiaries Net profit for the year Subsidiaries issue cash dividends to non-controlling equity shareholders Non-controlling interests arising from acquisition of subsidiaries Balance at December 31		For the Years Ended December 31
		2020 $ 5,918 4,000 679 773 ) 6,178) $ 3,646		2019
	( (		(	$ 6,488 - 859 1,429 ) - $ 5,918

(5) Treasury shares

Purpose of Buy-back Number of shares at January 1, 2020

Shares Transferred to Employees (In Thousands of Shares) 199

Increase during the year 178 Number of shares at December 31, 2020 377

The Treasury shares held by the Group shall not be pledged under the Securities Exchange law, nor shall they enjoy the rights of dividend distribution and voting right.

23. REVENUE

Client contracts revenue Educational service and consultancy Optical fiber and cable products Others		For the Years Ended December31	For the Years Ended December31	For the Years Ended December31
		2020 $ 666,545 107,248 2,604 $ 776,397		2019
				$ 645,789 235,366 455 $ 881,610

(1) Explanation on client contracts revenue, please refer to Note 4 (15).
(2) Remaining contracts balance
i. Notes receivable and accounts receivable balance, please refer to Note 9.
ii. Contract liabilities – current

Contract liabilities – current	December 31, 2020 $ 239,978	December 31, 2019	December 31, 2019
			$ 253,119

Receivables received from customers (tuition fee income from tutoring classes), and the monthly income is transferred when the service is provided. The change in contract liabilities is mainly due to the difference between when the performance obligation is fulfilled and when the customer pays.

24. NET PROFIT OF THE YEAR

(1) Other Revenue

For the Years Ended December 31 2020 2019

Subsidy revenue Verification and technical service revenue Other	$ 4,584 - 1,980 $ 6,564	$ 3,984 1,630 2,665 $ 8,279

The subsidy income is mainly the funds subsidized by the Group to implement the A + enterprise innovation research and development plan of the R.O.C Ministry of Economic Affairs.

(2) Other Profit and Loss

er Profit and Loss
Gains on investments disposal (note 28) Gains on lease modification Losses on net foreign currency exchange (note) Losses on disposal of property, plant and equipment Bargain purchase benefits (note 27) Other		For the Years Ended December 31
		2020 $ 9,035 588 662 ) - - 187) $ 8,774		2019
	( (		( ( ( (	$ - - 1,341 ) 143 ) 727 374) $ 1,131)

Note: The Group’s 2020 and 2019 foreign exchange profits and losses are as follows:

Total foreign currency exchange profits Total foreign currency exchange losses Net loss		For the Years Ended December 31	For the Years Ended December 31	For the Years Ended December 31
		2020 $ 1,110 1,772) $ 662)		2019
	( (		( (	$ 1,272 2,613) $ 1,341)

(3) Financial Costs

Interest on bank loans	For the Years Ended December 31	For the Years Ended December 31
	2020 $ 965	2019
		$ 2,048

Interest on rental liabilities	2,682 $ 3,647	4,386
		$ 6,434

(4) Interest revenue

Bank deposits		For the Years Ended December 31	For the Years Ended December 31	For the Years Ended December 31
		2020 $ 570		2019
				$ 724

(5) Depreciation and Amortization

Depreciation- property, plant and equipment Depreciation- Right-of-use assets Amortization- computer software Total An analysis of depreciation by function Operating costs Operating expenses An analysis of amortization by function Operating costs Operating expenses		For the Years Ended December 31	For the Years Ended December 31	For the Years Ended December 31
		2020 $ 19,173 63,507 3,730 $ 86,410 $ 73,433 9,247 $ 82,680 $ 2,648 1,082 $ 3,730		2019
				$ 21,495 68,671 1,536 $ 91,702 $ 76,853 13,313 $ 90,166 $ 189 1,347 $ 1,536

(6) Employee Benefit Expenses

loyee Benefit Expenses
Short term Employee Benefits Post-employment benefits Defined contribution plans Defined benefit plans (note 21) Resignation benefits Other employee benefits Total employee benefits expense An analysis of employee benefits expense by function Operating costs	For the Years Ended December 31
	2020 $ 216,901 11,197 - 34 8,439 $ 236,571 $ 7,372		2019
		(	$ 229,428 8,888 86 ) 1,400 8,841 $ 248,471 $ 22,906

229,199 225,565 $ 236,571 $ 248,471

Operating expenses

(7) Employees’ compensation and remuneration of directors

In accordance with the provisions of the Articles of Incorporation, the employees' compensations are provided at not less than 3% and remuneration of directors are not more than 5% before deducting the pre-tax benefits of the employees and directors. The estimated 2020 and 2019 employees’ compensation and remuneration of directors were decided by the Board on March 9, 2021 and March 24, 2020 respectively as follows:

Employees’ compensation -Estimated ratio -Amount Remuneration of directors -Estimated ratio -Amount		For the Years Ended December 31	For the Years Ended December 31	For the Years Ended December 31
		2020 3% $ 2,327 1.5% $ 1,164		2019
				3% $ 2,468 1.5% $ 1,234

If there is a change in the amounts after the annual consolidated financial statements are authorized for issue, the differences are recorded as a change in the accounting estimate.

There is no difference between the actual amount of employees’ compensation and remuneration of directors paid and the amount recognized in the consolidated financial statements for the years ended December 31, 2019 and 2018.

Information on the employees’ compensation and remuneration of directors resolved by the Group’s board of directors in 2021 and 2020 is available at the Market Observation Post System website of the Taiwan Stock Exchange.

25. INCOME TAXES

(1) Major components of income tax expense recognized in profit or loss:

For the Years Ended December 31 2020 2019

Current tax In respect of the current year Income tax on unappropriated earnings Adjustments for prior year Deferred tax In respect of the current year Adjustments in respect to past year ( Income tax expense recognized in profit or loss	$ 11,438 2,474 - 13,912 7,074 ( 95) 6,979 ( $ 20,891	$ 8,063 2,117 311 10,491 482 ) - 482) $ 10,009

A reconciliation of accounting loss and income tax expenses were as follows:

Income before tax Income tax expense calculated at the statutory rate Surtax on Undistributed Retained Earnings Tax-exempt income Deferred tax effect of earnings of subsidiaries Impact of unrecognized deferred income tax assets Adjustments for prior years’ tax Income tax expense recognized in profit or loss		For the Years Ended December31	For the Years Ended December31	For the Years Ended December31
		2020 $ 83,804 $ 21,457 2,474 1,407 ) 6,580 ) 5,042 95) $ 20,891		2019
	( ( (		( (	$ 86,986 $ 21,540 2,117 - 5,193 ) 8,766 ) 311 $ 10,009

(2) Income tax recognized in other consolidated profits and losses

For the Years Ended December 31
2020 2019

$ 202

Deferred income tax

In respect of the current year

-Remeasured number of defined benefit plan $ 650

(3) Deferred tax assets and liabilities

The movements of deferred tax assets and deferred tax liabilities were as follows:

For the Years Ended December 31, 2020

Deferred tax assets Temporary differences Allowance for inventory loss Use equity law to identify foreign investment losses Other Loss carryforwards Deferred income tax liabilities Temporary differences Land revaluation Defined benefit plans Bargain purchase gains Gains and loss from life insurance evaluation		Opening Balance $ 8,644 2,019 1,087 11,750 26,615 $ 38,365 $ 2,232 1,333 145 - $ 3,710	Recognized in Profit or Loss ( $ 8,644 ) 2,024 ( 235) ( 6,855) ( 787) ($ 7,642) $ - ( 683 ) - 20 ($ 663)	Recognized in other comprehens ive income $ - - - - - $ - $ - ( 650 ) - - ($ 650)		Closing Balance
			( ( ( ( ( ( (	( (		$ - 4,043 852 4,895 25,828 $ 30,723 $ 2,232 - 145 20 $ 2,397

For the Years Ended December 31, 2019

Opening Recognized Recognized Balance in Profit or in other

Deferred tax assets Temporary differences Allowance for inventory loss Use equity law to identify foreign investment losses Other Loss carryforwards Deferred income tax liabilities Temporary differences Land revaluation Defined benefit plans Bargain purchase gains Unrealized net profits of exchange		$ 5,239 1,000 1,255 7,494 30,521 $ 38,015 $ 2,232 1,513 - 299 $ 4,044		Loss $ 3,405 1,019 168) 4,256 3,906) $ 350 $ - 22 145 299) $ 132)	comprehens ive income $ - - - - - $ - $ - ( 202 ) - - ($ 202)		Closing Balance
			( ( ( (		( (		$ 8,644 2,019 1,087 11,750 26,615 $ 38,365 $ 2,232 1,333 145 - $ 3,710

(4) Losses deduction of deferred income tax assets not recognized in the balance sheet

Expire in 2021 Expire in 2022 Expire in 2024 Expire in 2025 Expire in 2027 Expire in 2028 Expire in 2029 Expire in 2030	December 31,2020 $ 25,622 4,779 2,378 - - 3,258 908 3,459 $ 40,404	December 31,2019	December 31,2019
			$ - 4,701 12,191 24,784 3,182 17,369 1,271 - $ 63,498

(5) Related information of unused loss carry-forwards

Expire in 2020 Expire in 2021 Expire in 2022 Expire in 2023 Expire in 2024 Expire in 2025 Expire in 2027 Expire in 2028 Expire in 2029 Expire in 2030	December 31,2020 $ - 62,622 4,779 13,679 56,056 24,784 - 3,258 908 3,459 $ 169,545	December 31,2019	December 31,2019
			$ 15,284 67,323 - 13,679 53,678 24,784 3,182 17,369 1,271 - $ 196,570

(6) Income Tax Assessments

The Group and its subsidiaries operating in the territory of the Republic of China for profit income tax declaration have been approved by the R.O.C tax collection agency as follows:

Company Name Success Prime Corporation Chen Li Education Here Enterprise Chen Li ELM Chen Li Zhiyi Education Li-Ren Education	Approved Year
	2018 2017 2018 2019 Not yet verified Not yet verified

The authorities of the Republic of China will not proactively issue approval notices

to enterprises. Only in the event of a tax dispute, the payment notice of the year will be issued to each Company and the right to impose additional taxation will be retained.

26. EARNINGS PER SHARE

NINGS PER SHARE
Basic earnings per share Diluted earnings per share	Unit : NT$ per share For the Years Ended December 31
	2020 $ 3.30 $ 3.29	2019
		$ 4.01 $ 4.00

The weighted average number of shares outstanding used for the earnings per share computation was adjusted retroactively for the issuance of bonus shares on July 31, 2020. The basic and diluted earnings per share adjusted retrospectively For the Years Ended December 31, 2019 were as follows:

Basic earnings per share Diluted earnings per share	Before Retrospective Adjustment $ 4.41 $ 4.40	Unit : NT$ per share After Retrospective Adjustment	Unit : NT$ per share After Retrospective Adjustment
			$ 4.01 $ 4.00

The income and weighted average number of ordinary shares outstanding in the computation of earnings per share from continuing operations were as follows:

Net Profit for the Year

it for the Year
Profit used in the computation of basic earnings per share for the year attributable to owners of the Company	For the Years Ended December 31
	2020 $ 62,234	2019
		$ 76,118

Unit : in thousands of shares

For the Years Ended December 31

Weighted average number of ordinary shares used in the computation of basic earnings per share Effect of potentially dilutive ordinary shares: Compensation of employees Weighted average number of ordinary shares used in the computation of diluted earnings per share		2020 18,883 54 18,937		2019
				18,986 48 19,034

Since the Group offered to settle compensation or bonuses paid to employees in cash or shares, the Group assumed the entire amount of the compensation or bonus will be settled in shares and the resulting potential shares were included in the weighted average number of shares outstanding used in the computation of diluted earnings per share, as the effect is dilutive. Such dilutive effect of the potential shares is included in the computation of diluted earnings per share until the number of shares to be distributed to employees is resolved in the following year.

27. MERGER OF ENTERPRISES

(1) Subsidiaries acquired

Chuang-Si Technology Co. Ltd.	Main operating activities Education Service	Acquisition Day Oct 31, 2019	Ownership rights with voting rights /Acquisition ratio(%) 100%		Transfer Price	Transfer Price
						$ 9,900

The Group acquired Chuang-Si Technology, later renamed Chen Li ELM Co. Ltd, for the deployment of primary school education business and expansion of the

operation of the Group.

(2) Transfer Price

Chen Li ELM

Cash

$ 9,900

Note: The fair value measured by the acquisition date on Oct 31, 2019.

(3) Assets acquired and liabilities incurred on the date of acquisition

Current assets Cash Accounts receivable and other receivables Inventory Prepaid payments and other current assets Non-current assets Right-of-use assets Other intangible assets Current liabilities Accounts payable and other payables Lease liabilities Other current liabilities	Chen Li ELM	Chen Li ELM
	( ( (	$ 490 1,098 562 457 621 9,942 1,469 ) 621 ) 453) $ 10,627

(4) Bargain purchase benefits arising from acquisitions

Transfer price Less: Fair value of identifiable net assets acquired Bargain purchase benefits arising from acquisitions	Chen Li ELM	Chen Li ELM
	( (	$ 9,900 10,627) $ 727)

(5) Net cash outflow from subsidiaries acquisition

Price of cash payment Less: Cash balance obtained	C h e n L i E L M	C h e n L i E L M
	(	$ 9,900 490) $ 9,410

(6) The impact of merger on business results

Since the date of acquisition, the operating results from the acquired enterprise are as follows:

2019 Operating revenue 2019 Net profit	Chen Li ELM	Chen Li ELM
		$ 2,267 $ 120

If the acquisition date of enterprises merger takes place on the start date of the fiscal year, the proposed 2019 operating revenue of the Group is NT$888,191 thousand and the proposed net income is NT$75,035 thousand, these amounts do not reflect the revenue and operating results that the Group can actually generate if the merger is completed on the acquisition start date, nor should it be used as a forecast of future operating results.

Management has taken into account the following factors in the preparation of the proposed operating income and net profit for the acquisition of Chen Li Education at the beginning of the fiscal year, assuming that the Group has acquired:

The fair value of the computer software at the time of the original accounting of the business combination is used as the basis for amortization calculation, rather than calculating the amortization based on the book amount recognized in the financial statements before the acquisition.

28. DISPOSAL OF SUBSIDIARIES

The Group passed the sale agreement resolution in the board meeting to dispose of Success Prime Optical Fiber Limited subsidiary Prime Optical Fiber to a non-related party Gold Sun Technology Co., Ltd.. The disposal was completed on July 3, 2020, from this date on, the Group has no control over Success Prime Optical Fiber Co., Ltd.

(1) Consideration received from disposals

Prime Optical Fiber

Consideration received in cash and cash equivalents $ 98,000

(2) Analysis of assets and liabilities on the date control was lost

Current assets Cash and cash equivalents Financial assets measured at amortized cost Accounts receivables Other receivables Inventories Other current assets Non-current assets Property, plant and equipment Right-to-use assets Other non-current assets Current liabilities Accounts payables Other payables Lease liabilities Other current labilities Non-current liabilities Lease liabilities Net assets disposed of	Prime Optical Fiber	Prime Optical Fiber
	( ( ( ( (	$ 27,382 5,655 45,267 175 32,076 5,397 10,858 80,753 7,258 6,680 ) 36,050 ) 10,677 ) 1,336 ) 71,113) $ 88,965

(3) Gain on disposal of subsidiaries

Prime Optical Fiber

Consideration received Net assets disposed of Gain on disposals

$ 98,000 ( 88,965 ) $ 9,035

(4) Net cash inflow on disposals of subsidiaries

Consideration received in cash and cash equivalents Less: Cash and cash equivalent balances disposed of

Prime Optical Fiber $ 98,000 ( 27,382 ) $ 70,618

29. EQUITY TRANSACTIONS WITH NON-CONTROLLING INTERESTS

On August 12, 2020, the Group acquired 49% of shares from Success Prime Education subsidiary from its related parties, making Success Prime Education a 100% owned subsidiary by the Group.

The above transactions were accounted for as equity transactions, since the Group did not cease to have control over these subsidiaries.

Consideration paid The proportionate share of the carrying amount of the net assets of the subsidiary transferred to non-controlling interests Differences in equity transactions Line items adjusted for equity transactions Undistributed retained earnings	Success Prime Education	Success Prime Education
	( $ 8,800 ) 6,178 ($ 2,622) Success Prime Education
	(	$ 2,622)

30. CASH FLOW INFORMATION

Purchase property, plant and equipment Increase in property, plant and equipment Increase (decrease) prepaid equipment payments Decrease equipment payables Net cash paid	For the Years Ended December 31	For the Years Ended December 31	For the Years Ended December 31
	2020 $ 14,745 ( 7,899 ) 1,853 $ 8,699		2019
			$ 27,094 3,867 7 $ 30,968

31. CAPITAL MANAGEMENT

The Group manages its capital to ensure that the Group will be able to operate under the premises of going concerns and growth while maximizing the return to shareholders through the optimization of the debt and equity balance.

The capital structure of the Group is composed of the Group’s net debt (ie borrowings less cash) and equity (ie share capital, capital reserve and retained earnings).

The Group does not need to comply with other external capital requirements.

32. FINANCIAL INSTRUMENTS

(1) Fair value of financial instruments not measured at fair value

The management considers that the carrying amounts of financial assets and financial liabilities recognized in the consolidated financial statements approximate their fair values.

(2) Fair value of financial instruments measured at fair value on a recurring basis
i. Fair value hierarchy

December 31, 2020

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

Level 1 Level 2 Level 3 Total
Financial assets at FVTOCI
Investments in equity
instruments
-Unlisted shares in ROC $ - $ - $ 4,500 $ 4,500
Level 1 Level 2 Level 3 Total
Financial assets at FVTOCI
Investments in equity
instruments
-Unlisted shares in ROC $ - $ - $ 4,500 $ 4,500
----- End of picture text -----

December 31, 2019

ii. Valuation technic and input value used in Level 3 fair value measurement

Category of financial instruments Evaluation of technology and input values

Unlisted equity investments Market Method: Assess the fair value of the investment by reference to the recent operating activity of the subject or the market transaction price and market conditions of the investment subject or other similar subjects.

iii. Fair value assessment for Level 3 can reasonably replace assumptions of sensitivity

analysis

The Group's fair value measurement of financial instruments is reasonable, and no self-built evaluation model is used for level 3 fair value measurement, so there is no need to perform a sensitivity analysis that may replace hypotheses.

(3) Categories of financial instruments

Financial assets Measured at amortized costs (note 1) Measured at FVTOCI- equity investment instrument Financial liabilities Measured at amortized cost (Note 2)	December 31,2020 $ 234,304 4,500 85,964	December 31,2019
		$ 279,868 4,500 201,355

Note 1: The balance consists of cash and cash equivalents, notes and accounts receivables, other receivables and refundable deposits (other non-current assets), which are measured at amortized cost.

Note 2: The balances included financial liabilities measured at amortized cost, which comprise, notes payable and trade payables (including payables to related parties), other payables (including other payables to related parties), payable for purchases of equipment and long-term loans (including current portion).

(4) Financial risk management objectives and policies

The main financial instruments of the Group include cash and cash equivalents, financial assets measured at amortized cost, bills receivable, accounts receivable, equity investment instruments, bills payable, accounts payable, borrowings and lease liabilities. The financial management department of the Group provides services for each business unit, coordinates the operation of entering the domestic and international financial markets, and monitors and manages the financial risks related to the operation of the Group by analyzing the risk internal risk report according to the degree of risk and breadth. These risks include market risk (including exchange rate risk and interest rate risk), credit risk and liquidity risk.

i. Market Risk

The Group’s activities exposed it primarily to the financial risks of changes in foreign currency exchange rates (see (1) below), and in interest rates (see (2) below).

(i) Foreign currency risk

For the carrying amount of monetary assets and liabilities denominated in the nonfunctional currency at the balance sheet date, refer to Note 36.

Sensitivity analysis

The Group is mainly affected by fluctuations in the US dollar (USD) and Chinese Yuan (CNY) exchange rates.

The sensitivity analysis only includes foreign currency monetary items that are in circulation and the conversion at the end of the period is adjusted by 1% of the exchange rate change. When the New Taiwan dollar appreciates by 1% against each relevant currency, it reduced the net profit before tax of the Group in 2020 and 2019 by NT$131 thousand and NT$555 thousand respectively. When the New Taiwan dollar depreciates by 1% against each foreign currency, its impact on net profit before tax will be a positive amount of the same amount.

(ii) Interest Rate Risk

The Group is exposed to fluctuating interest rate risk from outstanding bank loans. Changes in interest rates would affect the future cash flows but not the fair value.

The financial assets and liabilities balance for which the Group is subject to interest rate risk on the balance sheet date is as follows:

Interest rate risk with fair value -Financial assets Cash flow interest rate risk -Financial assets -Financial liabilities	December 31,2020 $ - 203,916 21,870	December 31,2019
		$ 5,655 193,444 104,300

Assume that the floating borrowing rate at the end of the reporting period is held during the entire reporting period. When the interest rate increases/decreases by 0.1%, the net profit before tax for the Group’s 2020 and 2019 will increase by NT$182 thousand and NT$89 thousand respectively, while all other variables remain fixed.

ii. Credit Risk

Credit risk refers to the risk that the counterparty defaults on the contractual obligations resulting in financial losses to the Group. As the major trading counterparty are all creditworthy financial institutions and corporate organizations, no significant credit risk is expected.

iii. Liquidity Risk

The Group reduces the impact of cash flow fluctuations by managing and maintaining sufficient cash. The Management supervises the available quotas of bank financing and ensures compliance with the terms of the loan contract. The consolidated liabilities were higher than the current assets on December 31, 2020. However, the current liabilities mainly consisted of advance receipt of tuition fees (accounted as contract liabilities). Non-financial liabilities did not result in the outflow of future cash from the Group. Therefore, the Group evaluates little liquidity risk.

Bank borrowing is an important source of liquidity for the Group. As of December 31, of 2020 and 2019, the unused financing capital was NT$300,000 thousand and NT$239,345 thousand respectively.

Liquidity and interest rate risk statement for non-derivative financial liabilities

The analysis of the remaining contractual maturity of non-derivative financial liabilities is based on the undiscounted cash flows of financial liabilities (including principal and estimated interest) based on the date which the Group is required to repay. Therefore, regardless whether the bank immediately executes its rights, the Group may be required to immediately repay the bank loan by the earliest period in the following table; other nonderivative financial liability maturity analysis is prepared according to the agreed repayment date.

Interest cash flow paid at floating interest rate, its outstanding interest amount is derived from the balance sheet daily interest rate curve.

December 31, 2020

December 31, 2020
Non-derivative financial liabilities Non-interest-bearing liabilities Fluctuating interest rates instruments		1-6months $ 42,658 1,215 $ 43,873	6months - 1year $ 21,436 1,215 $ 22,651	1year above
					$ - 19,440 $ 19,440

Additional information about the maturity analysis for lease liabilities:

Lease liabilities		Less than 1 year $ 47,560		1-5 Years $ 59,411		5-10 Years $ 4,440		Total
								$ 111,411

December 31, 2019 Non-derivative financial liabilities Non-interest-bearing liabilities Fluctuating interest rates instruments		1-6 Months $ 75,346 81,215 $ 156,561	6 months - 1year $ 21,709 1,215 $ 22,924	1year above	1year above

					$ - 21,870 $ 21,870

Additional information about the maturity analysis for lease liabilities:

Lease liabilities		Less than 1 year $ 70,761		1-5 Years $ 119,116	5-10 Years $ 45,265		Total
							$ 235,142

33. TRANSACTION WITH RELATED PARTIES

Balances and transactions between the Group and its subsidiaries, which are related parties of the Group, have been eliminated on consolidation and are not disclosed in this note. Besides information disclosed elsewhere in the other notes, details of transactions between the Group and other related parties are disclosed below.

(1) Related parties and their relationships associated with the Group:

Relatedparties Shu-Ling Tseng Min-Chun Chen Wei-Ru Chen	Relationshipwith the Group
	CEO of the Group Founder of the Subsidiary (Since January 30, 2019, as the Chairman of the Group) Related party

Chuang-Si Technology Co. Ltd.	Related party (Since November 1, 2019
(Chuang-Si Technology)	included in the Group parent
	company)
Kaohsiung City Private Jianjia Art
and Science Short-term Tuition	Related party
Class (Jianjia)
Kaohsiung City Private Yihe Arts and
Science Short-term Tutoring Class	Related party
(Yihe)
Kaohsiung City Private Yihe Arts and
Science Short-term Tuition Class	Related party
Zhongzheng Division (Yihe
Zhongzheng)
Prime Optical Fiber Co., Ltd.	The chairman of the board is a director
`（`Prime Optical Fiber`）`	of the Group (the chairman of the
	board was dismissed as a director of
	the Group on September 30, 2020,
	thus he is not a related party of the
	Group from this date on)

(2) Service revenue

RelatedpartyCategory/ Name Related parties Jianjia Yihe Other		For the Years Ended December 31	For the Years Ended December 31	For the Years Ended December 31
		2020 $ 16,762 10,903 307 $ 27,972		2019
				$ - - - $ -

The Group provides services income from related parties, and its transaction prices and payment conditions are not significantly different from those of non-related parties.

(3) Service cost

vice cost
RelatedpartyCategory/ Name Related party Chuang-Si Technology	For the Years Ended December 31
	2020 $ -	2019
		$ 3,301

The Group provides services cost from related parties, and its transaction prices and payment conditions are not significantly different from those of non-related parties.

(4) Purchases of goods

RelatedpartyCategory/ Name Related party Prime Optical Fiber		For the Years Ended December 31	For the Years Ended December 31	For the Years Ended December 31
		2020 $ 7,991		2019
				$ -

Compared with other manufacturers, there is no significant difference between the

Group’s trading conditions for the purchase of related parties.

(5) Refundable Deposit (other non-current assets included in the account)

RelatedpartyCategory/ Name Main Management Shu-Ling Tseng Min-Chun Chen	December 31,2020 $ 1,960 880 $ 2,840	December 31,2019	December 31,2019
			$ 1,960 880 $ 2,840

As mentioned in (7) below, the Group pays the refundable deposit of the lease to the related party according to the market conditions.

(6) Receivables from related parties

Line Item Accounts receivables	Related party Category / Name Related party Jianjia Yihe Other	December 31, 2020 $ 3,314 2,067 323 $ 5,704	December 31, 2019	December 31, 2019
				$ - - - $ -

(7) Leasing Agreement

Line Item Lease liabilities	Related party Category / Name Main Management Shu-Ling Tseng Min-Chun Chen	December 31, 2020 $ 7,143 7,143 $ 14,286	December 31, 2019	December 31, 2019
				$ 15,531 14,162 $ 29,693

RelatedpartyCategory/ Name Interest fees Main Management Shu-Ling Tseng Min-Chun Chen		For the Years Ended December 31	For the Years Ended December 31	For the Years Ended December 31
		2020 $ 191 181 $ 372		2019
				$ 336 302 $ 638

The Group leases offices and teaching venues from related parties, and the lease conditions are equivalent to those of general non-related parties.

(8) Rental agreement

Leasing revenue summarized as below:

RelatedpartyCategory/ Name Related party Chuang-Si Technology		For the Years Ended December 31	For the Years Ended December 31	For the Years Ended December 31
		2020 $ -		2019
				$ 257

The Group subleases part of the office area to related parties, and the lease conditions are the same as those of non-related parties.

(9) Acquisition of financial assets

For the Years Ended December 31, 2020

Related party Category / Name	Line Item	Number of shares transaction	Transaction subject	Price obtained
Related party

Wei-Ru Chen Investment 490 thousand Success Prime $ 8,800 using equity shares Education method (note)

Note: The number of related subjects in this transaction has been written off when preparing the consolidated financial statements.

The Group passed the resolution in the board meeting to purchase 49% of the equity of Success Prime Education from the related party Wei-Ru Chen in August 2020.

For the Years Ended December 31, 2019

Related party Category/ Name Main Management Shu-Ling Tseng Min-Chun Chen	Line Item	Number of shares transaction 1,000 thousand shares 500 thousand shares	Transaction subject	Price obtained $ 6,600 $ 3,300	Price obtained $ 6,600 $ 3,300
	Investment using equity method Investment using equity method		Chuang-Si Technology Chuang-Si Technology		$ 6,600 $ 3,300

The Group acquired 100% equity of Chuang-Si Technology on October 31, 2019, making it a subsidiary of the Group, please refer to Note 27.

(10) Remuneration of Key Management Levels

For the Years Ended December 31

Short term Employee Benefits Post-employment benefits		2020 $ 13,985 260 $ 14,245		2019
				$ 19,354 376 $ 19,730

The remuneration of directors and other key management levels are determined by the Compensation Committee based on individual performance and market trends.

34. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

The following assets have been provided as collateral for short-term and long-term bank borrowings:

Freehold land and buildings Pledged deposits (classified as financial assets at amortized cost)	December 31,2020 $254,315 -	December 31,2019	December 31,2019
			$ 255,173 5,655

$ 254,315

$ 260,828

35. OTHERS

The management of the Group has assessed that the global pandemic COVID-19 has not had a significant impact on the Group’s ability to continue operations, asset impairment and financing capabilities.

36. INFORMATION ON FOREIGN CURRENCY ASSETS AND LIABILITIES

WITH SIGNIFICANT IMPACT

The following information is aggregated in foreign currencies other than the functional currency of the Group. The exchange rate disclosed is the exchange rate of the foreign currency into the functional currency. The foreign currency assets and liabilities that have significant impact are as follows:

December 31, 2020

Foreign Currency Exchange rate Balance

Foreign currencyassets
Monetary accounts
US Dollars	$	277	28.480	$	7,889
RMB		1,188	4.377		5,200

December 31, 2019

Foreign currencyassets Monetary accounts US Dollars RMB	Foreign Currency $ 2,768 2,223	Exchange rate 29.580 4.208	Balancev
			$ 81,877 9,354

==> picture [408 x 46] intentionally omitted <==

The Group has realized and unrealized the foreign currency exchange gains and losses in the 2020 and 2019. Please combine the consolidated income statement. Due to the large number of foreign currency transactions, it is impossible to disclose the exchange gains and losses according to each significant foreign currency.

37. NOTES DISCLOSURE ITEMS

(1) Main transaction items and
(2) Information related to the transfer of investment business:
i. Loans to others: Table 1.
ii. Endorsement for others: Table 2.
iii. Holding securities at the end of the period (excluding investment in subsidiaries): Table 3.
iv. Accumulatively buy or sell the same marketable securities amounting to NT$300 million or paid-up capital of more than 20%: None.
v. The amount of property acquired is NT$300 million or over 20% of paid-up capital: none.
vi. The disposition of property amounts to NT$300 million or over 20% of paid-up capital: none.
vii. The amount of import and sales with related parties amounts to NT$100 million or over 20% of paid-up capital: Table 4.
viii. The receivables from the related party amounted to NT$100 million or more than 20% of the paid-up capital: none.
ix. Engage in derivatives transactions: None.
x. Others: Business relationship, significant transactions and amounts between parent and subsidiaries and between the subsidiary companies themselves: Table 5.
xi. Information on the investee Company: Table 6.
(3) China Investment Information:
i. The name of the China’s Company as investee, the main business operation, the amount of capital received, the mode of investment, the export of funds, the proportion of shareholding, the profit and loss of investment, the carrying amount of the final investment, the profit and loss of the remitted investment and the investment limit to the mainland region: Table 7.
ii. Any of the significant transactions with investee companies in mainland China, either directly or indirectly through a third area, and their prices, payment terms, and unrealized gains or losses: None
(i) The amount and percentage of the purchase and the closing balance and percentage of the relevant payables.
(ii) The amount and percentage of goods sold and the closing balance and percentage of related receivables.
(iii) The amount of the property transaction and the amount of profit and loss it generates.
(iv) The closing balance of the bill endorsement or the provision of the collateral and its purpose.
(v) The maximum balance, closing balance, interest rate range and total interest in the current period of the facility.
(vi) Other transactions that have a significant impact on the profits and losses or financial position of the current period, such as the provision or receipt of services.
(4) Key shareholders information: The shareholder name, shareholding amount and proportion of shareholders with a shareholding ratio of 5% or more. (Table 8)

38. DEPARTMENTAL INFORMATION

Information provided to key operational decision makers to allocate resources and assess departmental performance, focusing on the types of products or services that are delivered or provided. The Group should report the 2020 and 2019 departments as below:

Optical Fiber Enterprise Division - main fiber manufacturing and sales business. Education Enterprise Division - engaged in primary, middle, high school curriculum tutorial services, and provide customized digital information and consulting business.

(1) Departmental revenue and operating results

Revenue and operating results of the Group based on the reporting department analyses as follows:

For the Years Ended December 31, 2020

Revenue from external customers Consolidated revenue Departmental gains and losses Interest revenue Gain on lease modification Gains on investment disposal Net foreign currency exchange losses Financial cost Other revenue Other losses Net profit before tax	Optical fiber enterprise division $ 107,248 $ 107,248 ($ 1,984)		Education Enterprise Division $ 669,149 $ 669,149 $ 73,527		Total
	(			$ 776,397 $ 776,397 $ 71,543 570 588 9,035 ( 662 ) ( 3,647 ) 6,564 ( 187) $ 83,804

For the Years Ended December 31, 2019

Revenue from external customers Consolidated revenue Departmental gains and losses Interest revenue Bargain purchase gains Disposition of property, plant and equipment losses Net foreign currency exchange losses Financial cost Other revenue Other losses Net profit before tax	Optical fiber enterprise division $ 235,066 $ 235,066 $ 21,590		Education Enterprise Division $ 646,544 $ 646,544 $ 63,958		Total
				$ 881,610 $ 881,610 $ 85,548 724 727 ( 143 ) ( 1,341 ) ( 6,434 ) 8,279 ( 374) $ 86,986

Departmental interests refer to profits earned by various departments and do not include interest revenue, remeasures of original holdings of acquired equity, net foreign currency exchange losses, gains on lease modification, gains on disposal of investment, financial costs, other revenue, other profit and losses, and income tax expenses. This measure is provided to key operational decision makers to allocate resources to departments and evaluate their performance.

(2) Revenue from major products and services

The revenue analysis of the Group's main products and services is as follows:

Education services and information Optical Fiber Cable Other Less: Return and discount of sales Total		For the Years Ended December 31	For the Years Ended December 31	For the Years Ended December 31
		2020 $ 669,149 53,048 54,461 10 776,668 271) $ 776,397		2019
	(		(	$ 646,544 178,078 57,098 385 882,105 495) $ 881,610

(3) Regional Information

The Group's continuing business revenue from external customers is divided according to the operation location and non-current assets information of by asset location is as follows:

Taiwan China United States Other	Revenue from external customers 2020 2019 $ 721,448 $ 722,556 5,092 48,127 31,818 75,685 18,039 35,242 $ 776,397 $ 881,610	Revenue from external customers 2020 2019 $ 721,448 $ 722,556 5,092 48,127 31,818 75,685 18,039 35,242 $ 776,397 $ 881,610	Revenue from external customers 2020 2019 $ 721,448 $ 722,556 5,092 48,127 31,818 75,685 18,039 35,242 $ 776,397 $ 881,610	Non-current assets	Non-current assets	Non-current assets
		2020 $ 721,448 5,092 31,818 18,039 $ 776,397		December 31, 2020 $ 895,734 12,837 - - $ 908,571	December 31, 2019
						$ 1,043,519 15,137 - - $ 1,058,656

Non-current assets do not include financial assets classified as financial assets measured at fair value through other comprehensive income, financial assets measured at amortized cost, life insurance termination cash value, deferred income tax assets and net defined benefit assets.

(4) Main Customer Information

The main customer group of the Company is general public student groups. Therefore, there is not one single customer who accounts for more than 10% of the operating income on the income statement in 2020 and 2019.

TABLE 1

SUCCESS PRIME CORPORATION AND SUBSIDIARIES

FINANCING PROVIDED TO OTHERS FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

No. (Note 1)	Lender	Borrower	Financial Statement Account	Related Party	Highest Balance for the Period	Ending Balance	Actual Amount Borrowed	Interest Rate (%)	Nature of Financing (Note 2)	Business Transaction Amount	Reasons for Short-term Financing	Allowance for Impairment Loss	Collateral	Collateral	Financing Limit for Each Borrower	Aggregate Financing Limit	Note
													Item	Value
0 1	SPC Chen Li Education	Chen Li Education Chen Li (Xiamen) Education Consulting Co., Ltd.	Other receivables `－`related party Other receivables `－`related party	Yes Yes	$ 50,000 8,690	$ 50,000 8,690	$ - 4,377	1.30% 1.40%	(2) (2)	$ - -	Business turnover Business turnover	$ - -	`－` `－`	$ - -	$ 80,780 `（`Note 3`）` 20,167 `（`Note 4`）`	$ 323,120 `（`Note 3`）` 80,669 `（`Note 4`）`	`－` `－`

Note 1 `：` The numbering column is described as follows `：`

(1) Issuer fill in 0 。
(2) Companies as investee are numbered sequentially starting from 1.
Note 2 ： The subject receiving the loan shall be limited to the following circumstances:
(1) Subject companies with business relations with the SPC.
(2) Necessary party with short-term financing capital.
Note 3 ： The total amount of capital loans of the company and the limits of individual objects are as follows:
(1) The total amount of funds loaned by the company to others shall not exceed 40% of the net value of the company's most recent financial statements.
(2) The total limit of the company's short-term financial loans and others shall not exceed 30% of the company's most recent net value of financial statements.
(3) The loan amount of individual target funds shall not exceed 10% of the net value of the company's most recent fin ancial statements.
Note 4 ： The total amount of Chen Li Education's fund loan and the limits of individual objects are as follows:
(1) The total amount of Chen Li Education’s funds loaned to others shall not exceed 40% of the net value of Chen Li Education’s latest financial statements.
(2) The loan amount of individual target funds shall not exceed 10% of the net value of Chen Li Education's latest financial stat ements.

TABLE 2

SUCCESS PRIME CORPORATION AND SUBSIDIARIES

ENDORSEMENTS/GUARANTEES PROVIDED FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

No. (Note 1)	Endorser/Guarantor	Endorsee/Guarantee	Endorsee/Guarantee	Limit on Endorsement/ Guarantee Given on Behalf of Each Party (Note 3)	Maximum Amount Endorsed/ Guaranteed During the Period	Outstanding Endorsement/ Guarantee at the End of the Period	Actual Amount Borrowed	Amount Endorsed/ Guaranteed by Collateral	Ratio of Accumulated Endorsement/ Guarantee to Net Equity in Latest Financial Statements (%)	Aggregate Endorsement/ Guarantee Limit (Note 3)	Endorseme nt/ Guarantee Given by Parent on Behalf of Subsidiarie s	Endorseme nt/ Guarantee Given by Subsidiarie s on Behalf of Parent	Endorseme nt/ Guarantee Given on Behalf of Companies in Mainland China	Note
		Name	Relationship (Note 2)
1	Chen Li Education	SPC	(3)	$ 302,509	$ 288,000	$ 288,000	$ -	$ -	142.81%	$ 302,509	N	Y	N	`－`

Note 1 `：` The numbering column is described as follows:

(1) Issuer fills in 0.
(2) Companies as investee are numbered sequentially starting from 1.
Note 2 ： The relationship between the endorser and guarantor has the following 7 types, just indicate the type:
(1) A company with business dealings.
(2) A company that directly and indirectly holds more than 50% of the voting shares.
(3) Companies that directly and indirectly hold more than 50% of the voting shares of the company.
(4) Inter-company companies where the company directly and indirectly holds more than 90% of the voting shares.
(5) A company that is mutually insured according to the contract between inter-industries or co-founders based on the needs of the contracted project.
(6) A company whose endorsement is guaranteed by all capital shareholders according to their shareholding ratio due to a joint investment relationship.
(7) The inter-industry is engaged in the performance guarantee and joint guarantee of the pre -sale house sales contract regulated by the Consumer Protection Law.
Note 3 ： The limit amount of the foreign endorsement guarantees of Chen Li Education Co., Ltd. are as follows:
(1) For companies that directly and indirectly hold more than 50% of the voting rights of Chen Li Education, the total amount of endorsement guarantees and endorsement guarantees of Chen Li Education for a single object are based on Chen Li Education’s most recent audit or review by an accountant the net value of the financial statements is 150%.
(2) The net value is based on the most recent financial statements (2020) reviewed by Chen Li Education by accountants.

TABLE 3

SUCCESS PRIME CORPORATION AND SUBSIDIARIES

MARKETABLE SECURITIES HELD DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

Holding Company Name	Type and Name of Marketable Securities	Relationship with the Holding Company	Financial Statement Account		December 31, 2020	December 31, 2020	December 31, 2020			Note
				Number of Shares	Carrying Amount		Percentage of Ownership (%)		Fair Value
SPC	Taiwan unlisted shares Accuagile Co., Ltd	None	Financial assets at FVTOCI	1,500,000		$ 4,500	15		$ 4,500	Note

Note ： Fair value is based on the most recent evaluation results.

TABLE 4

SUCCESS PRIME CORPORATION AND SUBSIDIARIES

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Buyer	Related Party	Relationship		Transaction Details	Transaction Details		Abnormal Transaction	Abnormal Transaction	Notes/Accounts Receivable (Payable)	Notes/Accounts Receivable (Payable)	Note
			Purchase/ Sale	Amount	% of Total	Payment Terms	Unit Price	Payment Terms	Ending Balance	% of Total
SPC Chen Li Education	Chen Li Education The Group	Subsidiary Parent Company	Service revenue Service costs	( $ 218,877 ) 218,877	( 68% ) 63%	Month end 30 days Month end 30 days	Note 1 Note 1	- -	$ 22,361 ( 22,361 )	100% ( 93% )	Note 2 Note 2

Note 1 ： There are no other transactions of the same type available for comparison, and the terms of collection are agreed by both par ties.

Note 2 ： It was written off when preparing the consolidated financial report.

TABLE 5

SUCCESS PRIME CORPORATION AND SUBSIDIARIES

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 2020 (Amounts in Thousands of New Taiwan Dollars)

No. (Note 1)	Investee Company	Counterparty	Relationship (Note 2)		Transaction Details	Transaction Details
				Financial Statement Accounts	Amount	Payment Terms	% of Total Sales or Assets (Note 3)
0 `〃` `〃`	SPC `〃` `〃`	Chen Li Education `〃` Success Prime Optical Fiber`（`Note 5`）`	1 1 1	Service revenue and costs Accounts receivables and payables Sales revenue and costs	$ 218,877 22,361 31,581	There are no other transactions of the same type available for comparison, and the terms of payment are agreed by both parties. There are no other transactions of the same type available for comparison, and the terms of payment are agreed by both parties There are no other transactions of the same type available for comparison, and the terms of payment are agreed by both parties	28% 2% 4%

Note 1 ： The business transactions between the parent company and its subsidiaries should be indicated in the number column respective ly. The method of filling in the numbers is as follows:
(1) The parent company fills in 0.
(2) Subsidiaries are numbered sequentially by the Arabic number 1 according to the company.
Note 2 ： There are three types of relationship with the trader. The type of mark can be used. (If it is the same transaction between t he parent company or each subsidiary, there is no need to repeat the disclosure. For example, the parent company’s transaction to the subsidiary, if the parent company it has been revealed that there is no need to repeat the disclosure of the subsidiary part; if the subsidiary's transaction to the subsidiary is disclosed, if another subsidiary has been disclosed, the other subsidiary does not need to disclose it repeatedly):
(1) Parent company to subsidiary.
(2) Subsidiary to parent company.
(3) Subsidiaries to subsidiaries.
Note 3 ： The transaction amount accounts for the calculation of the combined total revenue or total assets ratio. In the case of asset s and liabilities, the ending balance is calculated as the total assets. If it is a profit or loss item, the accumulated amount i n the period accounts for the combined total. The method of receipt is calculated.
Note 4 ： The relevant account amount of the above transaction has been written off when preparing the consolidated financial statement s.
Note 5 ： It is the transaction amount before SPC sold its equity in SPOF.

TABLE 6

SUCCESS PRIME CORPORATION AND SUBSIDIARIES

INFORMATION ON INVESTEES FOR THE YEAR ENDED DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars and Foreign Currencies, Unless Stated Otherwise)

Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount	Original Investment Amount	As of	December 31, 2020	December 31, 2020	Net Income (Loss) of the Investee	Share of Profit (Loss)	Note
				December 31, 2020	December 31, 2019	Number of Shares (in thousands)	%	Carrying Amount
SPC Chen Li Education CHEN LI Education Group Limited	Chen Li Education Prime Optical Fiber Here Enterprise Chen Li ELM Li-Ren Education Chen Li Zhiyi CHEN LI Education Group Limited CHEN LI Education Group (HK) Limited	Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan British Virgin Islands Hong Kong	Education services Wire & Cable Manufacturing Education Consulting Services Education services Education services Education services Holding Company Holding Company	$ 711,369 - 13,900 9,900 3,000 3,000 40,543 ( USD 1,292 ) 30,059 ( USD 952 )	$ 711,369 10,000 5,100 9,900 - - 40,543 ( USD 1,292 ) 30,059 ( USD 952 )	11,200 - 1,000 1,500 300 300 - -	100% - 100% 100% 60% 60% 100% 100%	$ 685,497 14,696 8,295 3,074 2,396 17,786 17,043	$ 32,152 813 4,197 ( 2,452 ) 123 ( 1,007 ) ( 10,122 ) ( 10,031 )	$ 32,113 813 3,165 ( 2,452 ) 74 ( 604 ) Note 1 Note 1	Note 2 Note 3 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2

Note 1 ： The profit and loss of the invest ed company is included in its investment company. To avoid confusion, it will not be expressed here.

Note 2 ： In the preparation of the consolidated financial statements, it has been fully written off.

Note 3 ： The Group passed the resolution at the board mee ting on July 3, 2020 to sell 100% equity of its subsidiary, Prime Optical Fiber. Therefore, from that date, Prime Optical Fib er is no longer a subsidiary of the company. The recognized investment gains and losses are the amount before SPC successfully sold its equity of Prime Optical Fiber.

TABLE 7

SUCCESS PRIME CORPORATION AND SUBSIDIARIES

INFORMATION ON INVESTMENTS IN MAINLAND CHINA FOR THE YEAR ENDED DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars and Foreign Currencies, Unless Stated Otherwise)

Investee Company	Main Businesses and Products	Paid-in Capital	Paid-in Capital	Method of Investment	Accumulated Outward Remittance for Investment from Taiwan as of January 1, 2020	Remittance of Funds	Remittance of Funds	Accumulated Outward Remittance for Investment from Taiwan as of December 31, 2020	Net Income (Loss) of the Investee	% Ownershi p of Direct or Indirect Investme nt by the Group	Investment Gain (Loss) (Note 1)	Carrying Amount as of December 31, 2020	Accumulated Repatriation of Investment Income as of December 31, 2020	Note
						Outward	Inward
Chen Li (Xiamen) Education Consulting Co., Ltd.	Engaged in educational consulting services and other business	RMB	6,000	Through the third regional company CHEN LI Education Group (HK) Limited investment	$ 28,516	$ -	$ -	$ 28,516	( $ 9,850 )	100%	( $ 9,850 )	$ 15,851	$ -	`－`

Accumulated Outward Remittance for Investments in Mainland China as of December 31, 2020			Investment Amount Authorized by the Investment Commission, MOEA			Upper Limit on the Amount of Investments Stipulated by the Investment Commission, MOEA
$28,516`（`RMB 60,000`）`			$28,516`（`RMB 60,000`）`			$121,004`（`Note 2`）`

Note 1 ： Investment gains and losses are recognized based on the financial statements verified by the parent company certified account ant in Taiwan. Note 2 ： It is calculated based on 60% of the net value of Chen Li Education's most recent financial statements.

TABLE 8

SUCCESS PRIME CORPORATION AND SUBSIDIARIES

INFORMATION OF MAJOR SHAREHOLDERS DECEMBER 31, 2020

Name of Major Shareholder	Shares	Shares
	Number of Shares	Percentage of Ownership (%)
Far East International Commercial Bank entrusted custody of Bash Consulting Co., Ltd. Investment Special Account Far East International Commercial Bank entrusted custody of Endow Capital Management Co., Ltd. Investment Special Account Taipei Fubon Commercial Bank entrusted with the custody of Optimistic Forward Investment Account Witty Sino Holdings Co., Ltd. Shu-Cheng Tseng	1,890,039 1,890,039 1,760,177 1,741,020 1,003,564	9.85% 9.85% 9.17% 9.07% 5.23%

Note 1 ： The main shareholder information in this table is based on the last business day of the quarter at the end of the quarter, and the shareholders hold more than 5% of the company’s ordinary shares and special shares that have completed unregistered delivery (including treasury shares). The share capital recorded in the company's consolidated financial report and the actual number of shares delivered without physical registration may be different due to different or different calculation bases.
Note 2 ： In the case of the above information, if a shareholder delivers shares to the trust, it is disclosed in individual accounts by the trustor who opened the trust account by the trustee. As for shareholders’ declarations of insider’s equity holdings exceeding 10% in accordance with the Securities and Exchange Act, their holdings include their own shareholding plus the shares delivered to the trust and have the right to use the trust property. For information on insider’s equity declarations, please refer to the Market Observation Post System.

AI assistant

SPC — Annual Report 2020

52126_rns_2020-11-12_d489ee76-ba33-42b8-99d3-9bf85f1951b6.pdf

Success Prime Corporation and Subsidiaries

DECLARATION OF CONSOLIDATION OF FINANCIAL STATEMENTS OF AFFILIATES

INDEPENDENT AUDITORS’ REPORT

Opinion

Basis for Opinion

Key Audit Matters

Revenue Recognition of Education Services

Assessment of Goodwill and Trademark Impairment

Other Matters

Responsibility of Management and Governance Units over the Consolidated Financial Statements

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Notice to Readers

Success Prime Corporation

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

Success Prime Corporation

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Success Prime Corporation

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

Success Prime Corporation

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

SUCCESS PRIME CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)

1. GENERAL

2. THE AUTHORIZATION OF FINANCIAL STATEMENTS

3. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERPRETATIONS

ii. Amendment to IFRS 16 “Covid-19-Related Rent Concessions”

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(4) Basis of consolidation

(5) Merger of Enterprises

(6) Foreign currencies

(7) Life Insurance termination cash value

(8) Inventories

(9) Property, plant and equipment

(10) Goodwill

iii. Derecognition

(13) Financial instruments

i. Financial Assets

(i) Measurement Categories

ii. Financial liabilities

(14) Provision

Decommissioning cost

(17) Borrowing costs

(18) Government grants

(19) Employee benefits

i. Short-term employee benefits

ii. Retirement benefits

(20) Taxation

i. Current tax

ii. Deferred tax

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

Key Sources of Estimation Uncertainty

Impairment of goodwill

6. CASH AND CASH EQUIVALENTS

7. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

8. FINANCIAL ASSETS MEASURED AT AMORTIZED COST

9. NOTES RECEIVABLES AND ACCOUNTS RECEIVABLES

December 31, 2020

December 31, 2019

10. INVENTORIES

11. SUBSIDARIES

Listed in Consolidated Financial Statement of Subsidiaries:

12. PROPERTY, PLANT, EQUIPMENT

13. LEASE ARRANGEMENTS

Range of discount rate for lease liabilities was as follows:

(4) Other lease information

14. GOODWILL AND TRADEMARKS

15. COMPUTER SOFTWARE

16. LIFE INSURANCE TERMINATION CASH VALUE

17. OTHER ASSETS

18. BORROWINGS

(1) Short-term borrowings

(2) Long-term borrowings

19. ACCOUNTS PAYABLE

20. OTHER PAYABLES

21. RETIREMENT BENEFIT PLANS

(1) Defined contribution plans

SPC Annual Report 2020

Note 1 `：` The numbering column is described as follows `：`

Note 1 `：` The numbering column is described as follows: