OPTO TECH CORPORATION AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

INDEPENDENT AUDITORS’ REVIEW REPORT JUNE 30, 2021 AND 2020

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

~1~

INDEPENDENT AUDITORS’ REVIEW REPORT TRANSLATED FROM CHINESE

To the Board of Directors and Shareholders of Opto Tech Corporation

Introduction

We have reviewed the accompanying consolidated balance sheets of Opto Tech Corporation and subsidiaries (the “Group”) as at June 30, 2021 and 2020, and the related consolidated statements of comprehensive income for the three months and six months then ended, as well as the consolidated statements of changes in equity and of cash flows for the six months then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies. Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and International Accounting Standard 34, “Interim Financial Reporting” as endorsed by the Financial Supervisory Commission. Our responsibility is to express a conclusion on these consolidated financial statements based on our reviews.

Scope of review

Except as explained in the following paragraph, we conducted our reviews in accordance with the Statement of Auditing Standards No. 65, “Review of Financial Information Performed by the Independent Auditor of the Entity” in the Republic of China. A review of consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Basis for qualified conclusion

As explained in Notes 4(3)B and 6(7), the amounts and information of the financial statements of insignificant consolidated subsidiaries and investments accounted for using the equity method were not reviewed by independent auditors. Those statements reflect total assets of NT$845,294 thousand and NT$421,790 thousand, constituting 7.97% and 4.03% of the consolidated total assets, and total liabilities of NT$157,219 thousand and NT$159,849 thousand, constituting 5.00% and 4.68% of the consolidated total liabilities as of June 30, 2021 and 2020, and total comprehensive income (including income and loss of the associates accounted for using the equity method) of NT$18,774 thousand and NT$489

~2~

thousand, for the three months ended June 30, 2021 and 2020, respectively, and NT$29,075 and NT($3,567) for the six months ended June 30, 2021 and 2020, constituting 8.82%, 0.56%, 6.35% and (2.38%) of the consolidated total comprehensive income, respectively.

Qualified conclusion

Except for the adjustments to the consolidated financial statements, if any, as might have been determined to be necessary had the financial statements of the insignificant subsidiaries and equity method investees been reviewed by independent auditors, that we might have become aware of had it not been for the situation described above, based on our reviews, nothing has come to our attention that causes us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of the Group as at June 30, 2021 and 2020, and of its consolidated financial performance for the three months and six months then ended and its consolidated cash flows for the six months then ended in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and International Accounting Standard 34, “Interim Financial Reporting” as endorsed by the Financial Supervisory Commission.

Chiang, Tsai-Yen[Lai, Chung-Hsi ]

For and on behalf of PricewaterhouseCoopers, Taiwan Aug 2, 2021

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

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

~3~

OPTO TECH CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

JUNE 30, 2021, DECEMBER 31, 2020 AND JUNE 30, 2020

(Expressed in thousands of New Taiwan dollars) (The balance sheets as of June 30, 2021 and 2020 are reviewed, not audited)

			June 30, 2021			December 31, 2020			June 30, 2020
Assets	Notes		AMOUNT	%		AMOUNT	%		AMOUNT	%
Current assets
Cash and cash equivalents	6(1)	`$`	`2,583,941`	`25`	`$`	`3,100,161`	`29`	`$`	`2,968,119`	`29`
Financial assets at fair value through	6(2)
profit or loss - current			`669,045`	`6`		`320,419`	`3`		`170,109`	`2`
Current financial assets at amortised	6(3) and 8
cost, net			`517,737`	`5`		`22,810`	`-`		`22,810`	`-`
Notes receivable, net	6(5)		`7,617`	`-`		`8,873`	`-`		`7,357`	`-`
Accounts receivable - net	6(5)		`1,262,803`	`12`		`1,634,913`	`16`		`1,669,737`	`16`
Accounts receivable - related parties	6(5) and 7
- net			`26,082`	`-`		`16,880`	`-`		`22,110`	`-`
Other receivables			`24,646`	`-`		`20,218`	`-`		`20,104`	`-`
Inventories - net	6(6)		`1,118,357`	`11`		`1,155,589`	`11`		`1,377,303`	`13`
Prepayments			`29,606`	`-`		`24,202`	`-`		`35,397`	`-`
Other current assets			`2,257`	`-`		`2,435`	`-`		`1,043`	`-`
Total current assets			`6,242,091`	`59`		`6,306,500`	`59`		`6,294,089`	`60`
Non-current assets
Financial assets at fair value through	6(2)
profit or loss - non-current			`106,990`	`1`		`106,990`	`1`		`106,853`	`1`
Financial assets at fair value through	6(4)
other comprehensive income or loss-
non-current			`810,008`	`8`		`783,998`	`7`		`873,341`	`8`
Investments accounted for using	6(7)
equity method			`5,528`	`-`		`5,394`	`-`		`5,767`	`-`
Property, plant and equipment - net	6(8)		`2,551,768`	`24`		`2,705,133`	`26`		`2,798,782`	`27`
Right-of-use assets	6(9)		`225,544`	`2`		`236,135`	`2`		`242,116`	`2`
Investment property - net	6(10)		`399,307`	`4`		`399,307`	`4`		`-`	`-`
Intangible assets	6(11)		`13,988`	`-`		`14,318`	`-`		`12,452`	`-`
Deferred tax assets			`41,853`	`-`		`48,337`	`1`		`79,642`	`1`
Other non-current assets	6(7)(30)		`214,810`	`2`		`35,315`	`-`		`41,482`	`1`
Total non-current assets			`4,369,796`	`41`		`4,334,927`	`41`		`4,160,435`	`40`
Total assets		`$`	`10,611,887`	`100`	`$`	`10,641,427`	`100`	`$`	`10,454,524`	`100`
			(Continued)

~4~

OPTO TECH CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

JUNE 30, 2021, DECEMBER 31, 2020 AND JUNE 30, 2020

(Expressed in thousands of New Taiwan dollars) (The balance sheets as of June 30, 2021 and 2020 are reviewed, not audited)

				June 30, 2021				December 31, 2020				June 30, 2020
Liabilities andEquity	Notes			AMOUNT	%			AMOUNT	%			AMOUNT	%
Current liabilities
Short-term loans	6(12)		`$`	`183,898`		`2`	`$`	`230,758`		`2`	`$`	`238,085`	`2`
Financial liabilities at fair value	6(2)
through profit or loss - current				`-`		`-`		`799`		`-`		`-`	`-`
Notes payable				`-`		`-`		`1,757`		`-`		`837`	`-`
Accounts payable				`631,310`		`6`		`665,926`		`6`		`634,347`	`6`
Accounts payable - related parties	7			`46,730`		`-`		`51,920`		`1`		`80,174`	`1`
Other payables	6(13)			`1,129,198`	`11`			`619,042`		`6`		`987,154`	`10`
Current income tax liabilities				`91,288`		`1`		`25,969`		`-`		`75,134`	`1`
Provisions for liabilities - current	6(16)			`7,440`		`-`		`4,033`		`-`		`7,319`	`-`
Current lease liabilities	7			`19,369`		`-`		`19,560`		`-`		`18,755`	`-`
Long-term liabilities, current portion	6(14)			`490,379`		`5`		`62,960`		`1`		`31,826`	`-`
Other current liabilities	6(21) and 7			`96,431`		`1`		`50,840`		`-`		`52,003`	`1`
Current liabilities				`2,696,043`	`26`			`1,733,564`	`16`			`2,125,634`	`21`
Non-current liabilities
Long-term loans	6(14)			`-`		`-`		`748,555`		`7`		`776,798`	`7`
Provisions for liabilities - non-	6(16)
current				`18,469`		`-`		`18,808`		`-`		`15,020`	`-`
Deferred tax liabilities				`41,200`		`-`		`42,986`		`1`		`73,324`	`1`
Non-current lease liabilities	7			`207,229`		`2`		`216,706`		`2`		`222,465`	`2`
Other non-current liabilities				`179,301`		`2`		`187,482`		`2`		`201,956`	`2`
Total non-current liabilities				`446,199`		`4`		`1,214,537`	`12`			`1,289,563`	`12`
Total liabilities				`3,142,242`	`30`			`2,948,101`	`28`			`3,415,197`	`33`
Equity attributable to owners of
parent
Capital	6(17)
Common stock				`3,786,228`	`36`			`3,786,228`	`35`			`3,786,228`	`36`
Capital Reserve	6(18)
Capital surplus				`699,003`		`6`		`703,108`		`7`		`702,965`	`7`
Retained Earnings	6(19)
Legal reserve				`729,360`		`7`		`729,360`		`7`		`729,360`	`7`
Special reserve				`3,743`		`-`		`3,743`		`-`		`3,743`	`-`
Unappropriated earnings				`2,275,046`	`21`			`2,361,920`	`22`			`1,599,160`	`15`
Other Equity Adjustments	6(20)
Other equity interest				`217,060`		`2`		`187,351`		`2`		`237,402`	`2`
Treasury stocks	6(17)
Treasury stocks		`(`		`244,429 ) (`		`2) (`		`82,021) (`		`1) (`		`23,172)`	`-`
Equity attributable to owners of
parent				`7,466,011`	`70`			`7,689,689`	`72`			`7,035,686`	`67`
Non-controlling interest				`3,634`		`-`		`3,637`		`-`		`3,641`	`-`
Total equity				`7,469,645`	`70`			`7,693,326`	`72`			`7,039,327`	`67`
Significant contingent liabilites and	9
unrecognised contract commitments
Significant events after the balance	11
sheet date
Total liabilities and equity			`$`	`10,611,887`	`100`		`$`	`10,641,427`	`100`		`$`	`10,454,524`	`100`

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

~5~

OPTO TECH CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2021 AND 2020

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

					Threemonths ended June 30	Threemonths ended June 30	Threemonths ended June 30			Six months ended June 30	Six months ended June 30	Six months ended June 30	Six months ended June 30
					2021		2020			2021			2020
Items		Notes			AMOUNT	%	AMOUNT	%		AMOUNT	%	AMOUNT		%
Operating revenue	6(21) and 7			`$`	`1,383,868`	`100`	`$ 1,377,915`	`100`	`$`	`2,967,279`	`100`	`$`	`2,541,994`	`100`
Operating costs	6(6)(26)(27)
	and	7	`(`		`935,871) (`	`68) (`	`1,016,109) (`	`74) (`		`2,022,729) (`	`68) (`		`1,833,746) (`	`72 )`
Gross profit, net					`447,997`	`32`	`361,806`	`26`		`944,550`	`32`		`708,248`	`28`
Operating expenses	6(26)(27)
Selling expenses			`(`		`27,225) (`	`2) (`	`28,755) (`	`2) (`		`55,075) (`	`2) (`		`60,487) (`		`3 )`
General and administrative expenses			`(`		`177,072) (`	`13) (`	`104,497) (`	`8) (`		`328,754) (`	`11) (`		`212,377) (`		`8 )`
Research and development expenses			`(`		`29,864) (`	`2) (`	`87,578) (`	`6) (`		`56,935) (`	`2) (`		`160,481) (`		`6 )`
Expected credit gain (loss) on financial	12(2)
assets					`5,631`	`1 (`	`6,593)`	`- (`		`2,160)`	`- (`		`7,878)`		`-`
Total operating expenses			`(`		`228,530) (`	`16) (`	`227,423) (`	`16) (`		`442,924) (`	`15) (`		`441,223) (`	`17 )`
Operating profit					`219,467`	`16`	`134,383`	`10`		`501,626`	`17`		`267,025`	`11`
Non-operating income and expenses
Interest income	6(22)				`2,818`	`-`	`3,253`	`-`		`4,824`	`-`		`6,992`		`-`
Other income	6(23)				`1,177`	`-`	`9,194`	`1`		`17,949`	`1`		`27,657`		`1`
Other gains and losses	6(24)				`11,468`	`1 (`	`40,433) (`	`3)`		`11,948`	`- (`		`34,200) (`		`1 )`
Finance costs	6(25)		`(`		`4,478) (`	`1) (`	`6,846) (`	`1) (`		`10,126)`	`- (`		`15,350) (`		`1 )`
Share of profit (loss) of associates and	6(7)
joint ventures accounted for under
equity method			`(`		`3,312)`	`- (`	`1,799)`	`-`		`295`	`-`		`177`		`-`
Total non-operating income and
expenses					`7,673`	`- (`	`36,631) (`	`3)`		`24,890`	`1 (`		`14,724) (`		`1 )`
Profit before income tax					`227,140`	`16`	`97,752`	`7`		`526,516`	`18`		`252,301`	`10`
Income tax expense	6(28)		`(`		`44,146) (`	`3) (`	`27,778) (`	`2) (`		`98,461) (`	`4) (`		`60,780) (`		`2 )`
Net income				`$`	`182,994`	`13`	`$` `69,974`	`5`	`$`	`428,055`	`14`	`$`	`191,521`		`8`

(Continued)

~6~

OPTO TECH CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2021 AND 2020

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

				Three	months ended June 30	months ended June 30	months ended June 30				Six months ended June 30	Six months ended June 30	Six months ended June 30	Six months ended June 30
				2021			2020				2021			2020
Items	Notes			AMOUNT	%	AMOUNT			%		AMOUNT	%	AMOUNT			%
Other comprehensive income (loss)
Items that will not be reclassified to
profit or loss
Unrealised gains (losses) on valuation of	6(4)(20)
fiancial assets at fair value through other
comprehensive (loss) income			`$`	`26,728`	`2`	`$`	`18,286`		`1`	`$`	`26,010`	`1 ($`		`48,252) (`		`2 )`
Income tax related to components of	6(28)
other comprehensive (loss) income that
will not be reclassified to profit or loss				`-`	`-`			`-`	`-`		`-`	`-`		`8,364`		`-`
Total other comprehensive (loss)
income that will not be reclassified to
profit or loss, net of tax				`26,728`	`2`		`18,286`		`1`		`26,010`	`1 (`		`39,888) (`		`2)`
Items that will be reclassified to profit or
loss
Currency translation differences of	6(20)
foreign operations				`3,357`	`- (`		`1,340)`		`-`		`3,855`	`- (`		`2,038)`		`-`
Share of other comprehensive income	6(7)(20)
(loss) of associates and joint ventures
accounted for using equity method		`(`		`155)`	`-`		`222`		`- (`		`161)`	`-`			`39`	`-`
Total other comprehensive income
(loss) that will be reclassified to profit
or loss, net of tax				`3,202`	`- (`		`1,118)`		`-`		`3,694`	`- (`		`1,999)`		`-`
Other comprehensive (loss) income that
will be reclassified to profit or loss, net of
tax			`$`	`29,930`	`2`	`$`	`17,168`		`1`	`$`	`29,704`	`1 ($`		`41,887) (`		`2)`
Total comprehensive income for the
period			`$`	`212,924`	`15`	`$`	`87,142`		`6`	`$`	`457,759`	`15`	`$`	`149,634`		`6`
Profit, attributable to:
Owners of the parent			`$`	`182,994`	`13`	`$`	`69,972`		`5`	`$`	`428,053`	`14`	`$`	`191,521`		`8`
Non-controlling interest				`-`	`-`			`2`	`-`		`2`	`-`			`-`	`-`
			`$`	`182,994`	`13`	`$`	`69,974`		`5`	`$`	`428,055`	`14`	`$`	`191,521`		`8`
Total comprehensive income (loss)
attributable to:
Owners of the parent			`$`	`212,929`	`15`	`$`	`87,140`		`6`	`$`	`457,762`	`15`	`$`	`149,634`		`6`
Non-controlling interest		`(`		`5)`	`-`			`2`	`- (`		`3)`	`-`			`-`	`-`
			`$`	`212,924`	`15`	`$`	`87,142`		`6`	`$`	`457,759`	`15`	`$`	`149,634`		`6`
Earnings per share
Profit for the period	6(29)		`$`		`0.49`	`$`			`0.19`	`$`		`1.16`	`$`			`0.51`
Diluted earnings per share
Profit for the period	6(29)		`$`		`0.49`	`$`			`0.18`	`$`		`1.14`	`$`			`0.50`

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

~7~

OPTO TECH CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY SIX MONTHS ENDED JUNE 30, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

(UNAUDITED)

Note						Equity attr	ibutableto owners	of the parent	of the parent	of the parent				Non-controlling interest
	Common stock		Capital reserve		R	etained earnings		Otherequityinterest			Treasurystocks		Total
				Legal reserve		Special reserve	Unappropriated earnings	Financial statements translation differences of foreign operations		Unrealised gains (losses) from financial assets measured at fair value through other comprehensive income
6(4)(20) 6(19) 6(4) 6(4)(20) 4(3) 6(19) 6(17)	`$ 3,786,228` `-` `-` `-` `-` `-` `-` `-` `$ 3,786,228` `$ 3,786,228` `-` `-` `-` `-` `-` `-` `$ 3,786,228`	`$ 702,965` `-` `-` `-` `-` `-` `-` `-` `$ 702,965` `$ 703,108` `-` `-` `-` `(` `4,105` `)` `-` `-` `$ 699,003`		`$ 669,312` `-` `-` `-` `60,048` `-` `-` `-` `$ 729,360` `$ 729,360` `-` `-` `-` `-` `-` `-` `$ 729,360`	`$` `8,392` `-` `-` `-` `-` `(` `4,649 )` `-` `-` `$` `3,743` `$` `3,743` `-` `-` `-` `-` `-` `-` `$` `3,743`		`$ 1,841,481` `191,521` `-` `191,521` `(` `60,048 )` `4,649` `(` `378,623 )` `180` `$ 1,599,160` `$ 2,361,920` `428,053` `-` `428,053` `-` `(` `514,927 )` `-` `$ 2,275,046`	`($` `9,372` `)` `-` `(` `1,999` `)` `(` `1,999` `)` `-` `-` `-` `-` `($` `11,371` `)` `($` `4,063` `)` `-` `3,699` `3,699` `-` `-` `-` `($` `364` `)`	`$` `288,841` `-` `(` `39,888 )` `(` `39,888 )` `-` `-` `-` `(` `180 )` `$` `248,773` `$` `191,414` `-` `26,010` `26,010` `-` `-` `-` `$` `217,424`		`($` `23,172` `)` `-` `-` `-` `-` `-` `-` `-` `($` `23,172` `)` `($` `82,021` `)` `-` `-` `-` `-` `-` `(` `162,408` `)` `($ 244,429` `)`	`$ 7,264,675` `191,521` `(` `41,887` `)` `149,634` `-` `-` `(` `378,623` `)` `-` `$ 7,035,686` `$ 7,689,689` `428,053` `29,709` `457,762` `(` `4,105` `)` `(` `514,927` `)` `(` `162,408` `)` `$ 7,466,011`		`$` `3,641` `-` `-` `-` `-` `-` `-` `-` `$` `3,641` `$` `3,637` `2` `(` `5` `)` `(` `3` `)` `-` `-` `-` `$` `3,634`	`$ 7,268,316` `191,521` `(` `41,887` `)` `149,634` `-` `-` `(` `378,623` `)` `-` `$ 7,039,327` `$ 7,693,326` `428,055` `29,704` `457,759` `(` `4,105` `)` `(` `514,927` `)` `(` `162,408` `)` `$ 7,469,645`

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

~8~

OPTO TECH CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

SIX MONTHS ENDED JUNE 30, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

(UNAUDITED)

CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax
Adjustments
Income and expenses having no effect on cash flows
Expected credit losses on financial assets

Depreciation

Amortization

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

Interest income

Dividend income

Interest expense

Gain on disposal of property, plant and equipment

Share of profit of associates accounted for using
equity method

Impairment loss on non-financial assets
Changes in assets/liabilities relating to operating
activities
Changes in operating assets
Acquisition of financial assets at fair value through
profit or loss
Notes receivable - net
Accounts receivable - net
Accounts receivable - related parties - net
Other receivables
Inventories - net
Current prepayments
Other current assets
Other non-current assets
Net changes in liabilities relating to operating
activities
Notes payable
Accounts payable
Accounts payable - related parties
Other payables
Other current liabilities
Provisions for liabilities
Net defined benefit liability
Cash inflow generated from operations
Interest received
Dividends received
Interest paid
Income tax paid
Net cash flows from operating activities Six months ended June 30
Notes
2021
2020
$
526,516 $
252,301
12(2)
2,160
7,878
6(8)(9)(26)
228,924
233,536
6(11)(26)
9,054
7,173
6(2)(24)
(
18,553 ) (
826 )
6(22)
(
4,824 ) (
6,992 )
6(23)
(
10,344 ) (
12,443 )
6(25)
9,441
14,677
6(8)(24)
57
-
6(7)
(
295 ) (
177 )
-
35,585
(
330,873 )
-
1,256
5,694
369,950 (
262,452 )
(
9,202 )
10,678
(
4,342 ) (
1,602 )
37,232 (
137,605 )
(
5,404 )
9,705
178
2,406
4,123
1,415
(
1,757 )
831
(
34,616 ) (
16,720 )
(
5,190 )
1,483
(
3,780 )
60,433
45,591
16,497
3,068 (
1,675 )
(
9,186 )
633
799,184
220,433
4,738
7,501
10,344
12,443
(
10,432 ) (
15,566 )
(
28,444 ) (
79,155 )
775,390
145,656

(Continued)

~9~

OPTO TECH CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

SIX MONTHS ENDED JUNE 30, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

(UNAUDITED)

CASH FLOWS FROM INVESTING ACTIVITIES
Increase in prepayments for investments

Acquistion of financial assets at amortised cost

Proceeds from disposal of financial assets at fair value
through other comprehensive income

Increase in prepayments for business facilities

Acquisition of property, plant and equipment

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

(Increase) decrease in deposits-out
Net cash flows used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in short-term loans

Decrease in short-term loans

Decrease in long-term loans

Repayments of principal portion of lease liabilities

Decrease in guarantee deposits

Stock repurchased

Net cash flows used in financing activities
Effect of change in exchange rate
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period Six months ended June 30
Notes
2021
2020
6(7)
($
70,000 ) $
-
6(3)
(
494,927 )
-
6(4)
-
3,780
6(30)
(
110,644 ) (
2,420 )
6(8)(30)
(
65,160 ) (
151,002 )
76
-
6(11)
(
8,724 ) (
5,396 )
(
2,974 )
3,015
(
752,353 ) (
152,023 )
6(31)
322,760
346,636
6(31)
(
369,094 ) (
356,967 )
6(31)
(
317,101 )
-
6(31)
(
9,777 ) (
10,532 )
6(31)
1,006 (
86 )
6(17)
(
162,408 )
-
(
534,614 ) (
20,949 )
(
4,643 ) (
2,030 )
(
516,220 ) (
29,346 )
3,100,161
2,997,465
$
2,583,941 $
2,968,119

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

~10~

OPTO TECH CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 2021 AND 2020

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

(Reviewed, not audited)

1. HISTORY AND ORGANIZATION

Opto Tech Corporation (the “Company”) was incorporated as a company limited by shares under the provisions of the Company Law of the Republic of China (R.O.C.). The shares of the Company have been traded on the Taiwan Stock Exchange since May 2, 1995. The Company and its subsidiaries (collectively referred herein as the “Group”) are primarily engaged in the manufacture and sales of semiconductor components as well as research and development, design, manufacture and sales of systems products.

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

STATEMENTS AND PROCEDURES FOR AUTHORIZATION

These consolidated financial statements were reported to the Board of Directors on August 2, 2021.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

(1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS”) as endorsed by the Financial Supervisory Commission (“FSC”) New standards, interpretations and amendments endorsed by the FSC effective from 2021 are as follows:

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

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

~11~

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

the Group

New standards, interpretations and amendments endorsed by the FSC effective from 2022 are as follows:

	Effective date by
	International Accounting
New Standards, Interpretations and Amendments	Standards Board
Amendments to IFRS 3, ‘Reference to the conceptual framework’	January 1, 2022
Amendments to IAS 16, ‘Property, plant and equipment:proceeds	January 1, 2022
before intended use’
Amendments to IAS 37, ‘Onerous contracts—cost of fulfilling a	January 1, 2022
contract’
Annual improvements to IFRS Standards 2018–2020	January 1, 2022

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

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

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

New Standards,Interpretations and Amendments	Effective date by International Accounting Standards Board
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’ Amendments to IFRS 17, 'Insurance contracts' Amendments to IAS 1, ‘Classification of liabilities as current or non-current’ Amendments to IAS 1, ‘Disclosure of accounting policies’ Amendments to IAS 8, ‘Definition of accounting estimates’ Amendments to IAS 12, ‘Deferred tax related to assets and liabilities arising from a single transaction’	To be determined by International Accounting Standards Board January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023

New Standards,Interpretations and Amendments

Effective date by
International Accounting
Standards Board

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’
Amendments to IFRS 17, 'Insurance contracts'
Amendments to IAS 1, ‘Classification of liabilities as current or
non-current’
Amendments to IAS 1, ‘Disclosure of accounting policies’
Amendments to IAS 8, ‘Definition of accounting estimates’
Amendments to IAS 12, ‘Deferred tax related to assets and liabilities
arising from a single transaction’

To be determined by
International Accounting
Standards Board
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023

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

~12~

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies adopted are consistent with Note 4 in the consolidated financial statements for the year ended December 31, 2020, except for the compliance statement, basis of preparation, basis of consolidation and additional policies as set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

(1) Compliance statement
A. The consolidated financial statements of the Group have been prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and the International Accounting Standard 34, “Interim Financial Reporting” as endorsed by the FSC.
B. These consolidated financial statements are to be read in conjunction with the consolidated financial statements for the year ended December 31, 2020.
(2) Basis of preparation
A. Except for the following items, the consolidated financial statements have been prepared under the historical cost convention:
- (a) Financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.
- (b) Financial assets at fair value through other comprehensive income.
- (c) Defined benefit liabilities recognised based on present value of defined benefit obligation less the net amount of pension fund assets.
B. The preparation of financial statements in conformity with International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the “IFRSs”) requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.

(3) Basis of consolidation

A. The basis for preparation of consolidated financial statements are consistent with those of the year ended December 31, 2020.

~13~

B. Subsidiaries included in the consolidated financial statements:

Name of Investor	Name of Subsidiary	Main Business Activities June 30, 2021 December 31,2020 June 30, 2020 Investment business 100.00 100.00 100.00 Holding company - - 100.00 International trade - - 100.00 Manufacture and sales of LED and electronic products 99.87 99.87 99.87 Holding company 50.00 50.00 - Holding company 100.00 - - Investment business 100.00 100.00 - Holding company - - 100.00 Holding company - - 50.00 Holding company - 100.00 100.00 Holding company 50.00 50.00 50.00 Manufacture and sales of LED and electronic products 100.00 100.00 100.00 Ownership (%)	Description Notes 1&6 Notes 2&6 Notes 3&6 Note 4&6 Note 2&6 Note 4&6 Note 5&6 Note 2&6 Note 2&6 Note 4&6 Note 6 Note 6
Opto Tech Corp. Opto Tech Corp. Opto Tech Corp. Opto Tech Corp. Opto Tech Corp. Opto Tech Corp. Opto Tech Corp. OTIG OTIG CSB Bright Everyung	Ho Chung Investment Co., Ltd. (Ho Chung Investment) Opto Technology International Group Co., Ltd (OTIG) Opto Tech (Macao) Co., Ltd. (Opto Macao) CS Bright Corporation(CSB) Everyung Investment Ltd.( Everyung) Bright Investment International Ltd. (Bright) Dongzhen Asset Co., Ltd Opto Tech (Cayman) Co., Ltd. ( Opto (Cayman) ) Everyung Investment Ltd. (Everyung) Bright Investment International Ltd. (Bright) Everyung Investment Ltd. (Everyung) Opto Plus Technology Co., Ltd. (Opto Plus)

Note 1: Ho Chung Investment has been continuously acquiring the Company’s common stock amounting to 755 thousand shares (after capital reduction amounting to 352 thousand shares) from 1998 to 2000. It holds about 0.2% of the Company’s outstanding common stock.
Note 2: The Board of Directors of the Company resolved the liquidation of foreign subsidiaries, Opto Technology Intenational Group Co., Ltd.(OTIG) and OptoTech (Cayman)Co., Ltd.(Opto(Cayman)), on August 14, 2017.Opto(Cayman) has completed the liquidation process on September 16, 2020 and remitted share capital black to OTIG. OTIG has completed the liquidation process on October 26, 2020. The Company formerly held 50% equity shares of foreign controlling company, Everyung Investment Ltd. (Everyung), through OTIG. After OTIG completed the liquidation process, the Company

~14~

generally accepted its assets and directly held 50% equity shares of Everyung.

Note 3: The Board of Directors of the Company resolved the liquidation of foreign subsidiary, Opto Macao on April 28, 2020. Opto Macao has completed the liquidation process on September 29, 2020 and remitted share capital back to Opto Tech Corporation.
Note 4: The Board of Directors of the Company resolved the liquidation of foreign subsidiary, CS Bright Corporation (CSB), on September 10, 2020. The effective date was set on December 31, 2020, and the liquidation is still in process. The share equity of Bright Investment International Ltd. which was held by CSB had been transferred to the Company on April 22, 2021.
Note 5: The Company was established on November 25, 2020 and acquired 100% equity interests in subsidiary, Dongzhen Asset Co., Ltd., which was included in the consolidated statements starting from the acquisition date.
Note 6: The financial statements of the entity as of and for the six months ended June 30, 2021 and 2020 were not reviewed by independent auditors as the entity did not meet the definition of a significant subsidiary.
C. Subsidiaries not included in the consolidated financial statements ： None.
D. Adjustments for subsidiaries with different balance sheet dates ： None.
E. Nature and extent of significant restrictions on its ability to access or use assets, and settle liabilities of the Group ： None.
F. Subsidiaries that have non-controlling interests that are material to the Group ： None.

(4) Employee benefits

Pension cost for the interim period is calculated on a year-to-date basis by using the pension cost rate derived from the actuarial valuation at the end of the prior financial year, adjusted for significant market fluctuations since that time and for significant curtailments, settlements, or other significant one-off events. And, the related information is disclosed accordingly.

(5) Income tax

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

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

There have been no significant change as of June 30, 2021. Please refer to Note 5 in the consolidated financial statements for the year ended December 31, 2020.

~15~

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

Cash and cash equivalents
		June 30,2021	December 31, 2020			June 30, 2020
Cash on hand	$	169	$	341	$	473
Checking accounts and demand deposits		928,829		677,614		527,457
Time deposits		1,329,943		2,064,206		2,055,189
Cash equivalents - Resale bonds		325,000		358,000		385,000
Total	$	2,583,941	$	3,100,161	$	2,968,119

A. The Group transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.
B. Cash and cash equivalents all amounting to $22,810 were pledged to others as collateral for the leases of land and dormitory as of June 30, 2021, December 31, 2020 and June 30, 2020, and were classified as financial assets at amortised cost. Please refer to Notes 6(3) and 8 for the details.

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

Items		June 30,2021	December	31,2020		June 30,2020
Current items:
Financial assets mandatorily
measured at fair value
through profit or loss
Funds	$	565,000	$	315,000	$	165,000
Listed stocks		95,473		-		-
Valuation adjustment
Funds		5,810		5,248		4,759
Forward exchange contracts		-		171		350
Equity instruments		2,762		-		-
Total	$	669,045	$	320,419	$	170,109
Financial liabilities mandatorily
measured at fair value
fair value through profit and
Forward exchange contracts	$	-	($	799)	$	-

Non-current items:
Financial assets mandatorily
measured at fair value
through profit or loss
Unlisted stocks	$	127,048	$	127,048	$	127,048
Valuation adjustment	(	20,058)	(	20,058)	(	20,195)
Total	$	106,990	$	106,990	$	106,853

~16~

A. The Group recognised net gain of $18,051, $819, $18,553 and $826 on financial assets and financial liabilities held for trading for the three months and six months ended June 30, 2021 and 2020, respectively.
B. The non-hedging derivative instrument transactions and contract information are as follows: June 30, 2021 ： None.

June 30, 2021`：`None.
Derivative Instruments Assets - Current items: Forward exchange contracts Liabilities-Current items: Forward exchange contracts Derivative Instruments Assets-Current items: Forward exchange contracts	Contractperiod USD 2,000 $ (thousands) USD 3,000 $ (thousands) December 31,2020 Contract Amount (Nominal Principal) December 1, 2020~ January 21, 2021 December 21, 2020~ January 26, 2021 Contractperiod USD 1,000 $ (thousands) June 30,2020 Contract Amount (Nominal Principal) May 28, 2020~ July 7, 2020
	USD	May 28, 2020~ July 7, 2020

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

C. The Group has no financial assets at fair value through profit or loss pledged to others.
D. Information relating to credit risk of financial assets at fair value through profit or loss is provided in Note 12(2).

(3) Financial assets at amortised cost

in Note 12(2). Financial assets at amortised cost
Items Current items: Time deposits with maturity over three months Restricted time deposit	June 30,2021 494,927 $ 22,810 517,737 $	December 31,2020 - $ 22,810 22,810 $	June 30,2020
			- $ 22,810
			22,810 $

A. The Group recognised interest income of $359, $24, $391 and $56 for financial assets at amortised cost for the three months and six months ended June 30, 2021 and 2020, respectively.
B. Details of the Group’s financial assets at amortised cost pledged to others as collateral are provided in Note 8.
C. Information relating to credit risk of financial assets at amortised cost is provided in Note 12(2).

~17~

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

Items Non-current items: Equity instruments Listed stocks Unlisted stocks Subtotal Valuation adjustment Total	June 30,2021 December 31,2020 73,574 $ 73,574 $ 477,809 477,809 551,383 551,383 258,625 232,615 810,008 $ 783,998 $	June 30,2020 73,574 $ 477,809 551,383 321,958
		873,341 $

A. The Group sold all its stocks of Guang Xin Vision Co., Ltd. for $3,780 and resulted in transfers of $180 from other equity to retained earnings on disposal during the second quarter of 2020.
B. The Group has elected to classify equity instruments that are considered to be strategic investments as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $810,008, $783,998 and $873,341 as at June 30, 2021, December 31, 2020 and June 30, 2020, respectively.
C. The Group has no financial assets at fair value through other comprehensive income pledged to others as collateral.
D. Amounts recognised in profit or los and other comprehensive income in relation to the financial assets at fair value through other comprehensive income are listed below:

Equity instrument at fair value through other
comprehensive income
Fair value change recognised in other
comprehensive income
Cumulative gains reclassified to retained
earnings due to recognition
Dividend income recognised in profit or loss
Held at end of period
Equity instrument at fair value through other
comprehensive income
Fair value change recognised in other
comprehensive income (loss)
Cumulative gains reclassified to retained
earnings due to recognition
Dividend income recognised in profit or loss
Held at end of period

2021
2020
26,728
$ 18,286
$ -
$ 180
$ -
$ -
$ 2021
2020
26,010
$ 39,888)
($ -
$ 180
$ 10,344
$ 12,443
$ Three months ended June 30
Six months ended June 30

~18~

(5) Notes and accounts receivable

Notes and accounts receivable
		June 30,2021	December 31,2020			June 30,2020
Notes receivable	$	7,617	$	8,873	$	7,357
Accounts receivable		1,271,000		1,642,933		1,699,436
Accounts receivable - related parties		26,082		16,880		22,110
Less : Allowance for uncollectible
accounts	(	8,197)	(	8,020)	(	29,699)
	$	1,296,502	$	1,660,666	$	1,699,204

As of June 30, 2021, December 31, 2020 and June 30, 2020, accounts receivable and notes receivable were all from contracts with customers. And as of January 1, 2020, the balance of receivables from contracts with customers amounted to $ 1,482,823.

A. The ageing analysis of accounts receivable is as follows:

June 30, 2021 Without past due 1,283,719 $ Up to 180 days 5,179 181 to 360 days 6,284 Over 361 days 1,900 1,297,082 $	December 31, 2020 1,618,397 $ 34,823 4,771 1,822 1,659,813 $	June 30,2020
		1,555,989 $ 145,393 1,092 19,072
		1,721,546 $

The ageing analysis was based on past due date.

B. The ageing analysis of notes receivable is as follows:

Without past due	June30,2021 7,617 $	December 31, 2020 8,873 $	June30,2020
			7,357 $

The ageing analysis was based on the maturity date of the promissory note.

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

(6) Inventories

12(2). Inventories
Raw materials Supplies Work in process Semi-finished goods Finished goods Total	June 30,2021 December 31,2020 231,711 $ 196,857 $ 315,923 252,103 309,056 261,112 82,308 88,817 179,359 356,700 1,118,357 $ 1,155,589 $	June 30,2020
		257,531 $ 310,709 366,345 59,653 383,065
		1,377,303 $

~19~

A. The cost of inventories recognised as expense for the period:

			Threemonths	ended June 30	ended June 30
			2021		2020
Cost of goods sold		$	935,736	$	971,638
Loss on decline in
market value			135		44,471
		$	935,871	$	1,016,109
			Six months ended June 30
			2021		2020
Cost of goods sold		$	2,031,337	$	1,773,729
(Gain on reversal ) loss on decline in
market value	(		8,608)		60,017
		$	2,022,729	$	1,833,746

B. For the six months ended June 30, 2021, because of the rise of the Group’s product price, the net realised value was reversed and recognised as reduction of cost of goods sold.
C. During the three months ended June 30, 2021 and 2020, and six months ended June 30, 2020, the Group wrote down inventory from cost to net realisable value accounted for as 'cost of goods sold'.

(7) Investments accounted for using equity method

Investments accounted for using equity method
At January 1 Share of profit of investment accounted for using equity method Earnings distribution of investments accounted for using equity method Change in other equity items (Note 6(20)) At June 30 Associated enterprises June30,2021 VML TECHNOLOGIES B.V. 5,528 $	2021 2020 5,394 $ 8,768 $ 295 177 - 3,217) ( 161) ( 39 5,528 $ 5,767 $ December31,2020 June30,2020 5,394 $ 5,767 $
		5,767 $

The Group prepaid an investment of $70,000 to invest in New Smart Technology Co., Ltd. in May, 2021 and expected that the third quarter of 2021 will complete the transaction and acquire a 25% stake in the company.

~20~

(8) Property, plant and equipment

2021

												2021
																		Construction in
										Pollution								progress and
			Buildings				Utility		prevention		Transportation			Office		Other	prepayment for
At January 1		and structures			Machinery		facilities			facilities		equipment		equipment		equipment			equipment		Total
Cost	$		2,041,199	$	5,444,530	$	1,050,132	$		707,319	$	13,288	$	81,650	$	1,937,717	$		114,523	$	11,390,358
Accumulated depreciation	(		1,193,941)	(	4,277,941)	(	931,593)	(		597,978)	(	8,104)	(	69,172)	(	1,570,993)			-	(	8,649,722)
Accumulated impairment	(		59)	(	35,388)		-			-		-	(	19)	(	37)			-	(	35,503)
	$		847,199	$	1,131,201	$	118,539	$		109,341	$	5,184	$	12,459	$	366,687	$		114,523	$	2,705,133
Six months ended June 30
Opening net book amount	$		847,199	$	1,131,201	$	118,539	$		109,341	$	5,184	$	12,459	$	366,687	$		114,523	$	2,705,133
Additions			241		5,216		3,026			820		-		1,976		4,978			48,903		65,160
Disposals			-		-		-			-		-	(	133)		-			-	(	133)
Reclassifications			-		48,994		10,545			16,472		-		9,335		14,846	(		100,192)		-
Depreciation expense	(		29,420)	(	138,822)	(	9,721)	(		7,881)	(	682)	(	2,482)	(	29,222)			-	(	218,230)
Net exchange differences	(		152)	(	11)		-			-		1		-		-			-	(	162)
Closing net book amount	$		817,868	$	1,046,578	$	122,389	$		118,752	$	4,503	$	21,155	$	357,289	$		63,234	$	2,551,768

At June 30
Cost	$		2,040,979	$	5,459,943	$	1,063,703	$		724,612	$	13,286	$	88,399	$	1,957,542	$		63,234	$	11,411,698
Accumulated depreciation	(		1,223,052)	(	4,377,977)	(	941,314)	(		605,860)	(	8,783)	(	67,225)	(	1,600,216)			-	(	8,824,427)
Accumulated impairment	(		59)	(	35,388)		-			-		-	(	19)	(	37)			-	(	35,503)
	$		817,868	$	1,046,578	$	122,389	$		118,752	$	4,503	$	21,155	$	357,289	$		63,234	$	2,551,768

~21~

2020

										2020
															Construction in
								Pollution							progress and
		Buildings				Utility	prevention		Transportation			Office		Other	prepayment for
At January 1	and structures			Machinery		facilities		facilities		equipment		equipment		equipment		equipment		Total
Cost	$	2,028,554	$	5,625,019	$	1,118,047	$	717,932	$	8,703	$	78,865	$	1,949,344	$	116,824	$	11,643,288
Accumulated depreciation	(	1,135,179)	(	4,381,982)	(	974,309)	(	594,031)	(	7,337)	(	66,858)	(	1,567,562)		-	(	8,727,258)
Accumulated impairment	(	59)	(	6,742)		-		-		-	(	19)	(	83)		-	(	6,903)
	$	893,316	$	1,236,295	$	143,738	$	123,901	$	1,366	$	11,988	$	381,699	$	116,824	$	2,909,127
Six months ended June 30
Opening net book amount	$	893,316	$	1,236,295	$	143,738	$	123,901	$	1,366	$	11,988	$	381,699	$	116,824	$	2,909,127
Additions		1,038		19,863		1,204		1,804		-		2,767		7,828		116,498		151,002
Reclassifications		6,238		74,086		5,131		1,229		-		-		9,894	(	96,578)		-
Depreciation expense	(	29,026)	(	140,359)	(	10,812)	(	8,876)	(	323)	(	1,956)	(	30,598)		-	(	221,950)
Impairment loss		-	(	35,585)		-		-		-		-		-		-	(	35,585)
Net exchange differences	(	2,935)	(	857)		-		-	(	12)	(	8)		-		-	(	3,812)
Closing net book amount	$	868,631	$	1,153,443	$	139,261	$	118,058	$	1,031	$	12,791	$	368,823	$	136,744	$	2,798,782
At June 30
Cost	$	2,029,307	$	5,709,607	$	1,124,381	$	720,965	$	8,666	$	81,222	$	1,967,066	$	136,744	$	11,777,958
Accumulated depreciation	(	1,160,617)	(	4,513,838)	(	985,120)	(	602,907)	(	7,635)	(	68,412)	(	1,598,160)		-	(	8,936,689)
Accumulated impairment	(	59)	(	42,326)		-		-		-	(	19)	(	83)		-	(	42,487)
	$	868,631	$	1,153,443	$	139,261	$	118,058	$	1,031	$	12,791	$	368,823	$	136,744	$	2,798,782

~22~

A. Amount of borrowing costs capitalised as part of property, plant and equipment and the range of the interest rates for such capitalization are as follows:

Amount capitalised Interest rate	2021 2020 139 $ 555 $ 0.1%~0.53% 0.24%~1.15% Six months ended June 30

B. In June 2020, in consideration of its future operation plan, the Group assessed that certain machineries did not meet production requirements and showed an indication of idling. As a result, the Group recognised an impairment loss amounting to $35,585 as the recoverable amounts of these machineries were less than their carrying amounts. The Group used the value-in-use standard recoverable amount and the discount rate used was 9.82%.
－
(9) Leasing arrangements lessee
A. The Group leases various assets including land, buildings and business vehicles. Rental contracts are typically made for periods of 3 to 20 years.
B. The carrying amount of right-of-use assets and the depreciation charge are as follows:

June 30,2021 Carryingamount Land 215,834 $ Buildings 3,476 Transportation equipment (Business Vehicles) 4,249 Office equipment (Internet equipment) 1,985 225,544 $ Land Buildings Transportation equipment (Business Vehicles) Office equipment (Internet equipment)	December 31,2020 June 30,2020 Carryingamount Carryingamount 223,498 $ 231,059 $ 4,635 6,404 5,400 3,114 2,602 1,539 236,135 $ 242,116 $ Three months ended June 30	December 31,2020 June 30,2020 Carryingamount Carryingamount 223,498 $ 231,059 $ 4,635 6,404 5,400 3,114 2,602 1,539 236,135 $ 242,116 $ Three months ended June 30
	2021 Depreciation charge 3,829 $ 579 629 309 5,346 $	2020
		Depreciation charge
		3,828 $ 784 932 231
		5,775 $

~23~

		Six months ended	Six months ended	June 30
		2021		2020
	Depreciation charge		Depreciation charge
Land	$	7,658	$	7,657
Buildings		1,159		1,564
Transportation equipment (Business Vehicles)		1,260		1,903
Office equipment (Internet equipment)		617		462
	$	10,694	$	11,586

C. For the three months and six months ended June 30, 2021 and 2020, the additions to right-of-use assets amounted to $109, $2,240, $109 and $2,263, respectively.
D. The information on income and expense accounts relating to lease contracts is as follows:

Items affecting profit or loss Interest expense on lease liabilities Expense on short-term lease contracts Items affecting profit or loss Interest expense on lease liabilities Expense on short-term lease contracts	Threemonths ended June 30	Threemonths ended June 30
	2021 2020 1,033 $ 1,089 $ 2,639 $ 2,760 $ Six months ended June 30	2020
		1,089 $
		2,760 $
	2021 2020 2,080 $ 2,202 $ 5,029 $ 5,296 $

E. For the three months and six months ended June 30, 2021 and 2020, the Group’s total cash outflow for leases amounted to $8,594, $9,073, $16,886 and $18,030, respectively.

(10) Investment property

At January 1 (June 30) June 30, 2020: None.	2021
	Land
	399,307 $

A. On June 30, 2021, the fair value of investment properties was $410,640, which was based on the market evidence on transaction price of similar property and publicly announced present value. On December 31, 2020, the fair value of investment properties was $410,640, which was based on the valuation results from independent appraisers.
B. The Group has no investment properties pledged to others.

~24~

(11) Intangible assets

==> picture [484 x 239] intentionally omitted <==

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

2021 2020
At January 1 Software Software
Cost $ 40,624 $ 38,298
Accumulated amortisation ( 26,306) ( 24,069)
$ 14,318 $ 14,229
Six months ended June 30
Opening net book amount $ 14,318 $ 14,229
Additions 8,724 5,396
Amortisation expense ( 9,054) ( 7,173)
Closing net book amount $ 13,988 $ 12,452
At June 30
Cost $ 37,756 $ 30,857
Accumulated amortisation ( 23,768) ( 18,405)
$ 13,988 $ 12,452
----- End of picture text -----

Details of amortisation on intangible assets are as follows:

Details of amortisation on intangible assets are as follows:
Operating costs Operating expenses Total Operating costs Operating expenses Total	Three months ended June 30
	2021 2020 2,325 $ 1,058 $ 2,231 2,608 4,556 $ 3,666 $ Six months ended June 30
	2021 4,665 $ 4,389 9,054 $	2020
		2,119 $ 5,054
		7,173 $

(12) Short-term borrowings

Short-term borrowings
Type of borrowings Unsecured bank borrowings Interest rate range	June 30,2021 December 31,2020 183,898 $ 230,758 $ 0.53%~5% 0.51%~5.25%	June 30,2020
		238,085 $
		0.55%~5.25%

~25~

(13) Other payables

		June 30,2021	December	31,2020		June 30,2020
Salaries and bonus payable	$	210,577	$	186,138	$	153,146
Compensation payable to
employees		102,604		115,354		157,561
Remuneration payable to directors		71,260		38,410		52,376
Dividends payable		514,927		-		378,623
Others		229,830		279,140		245,448
Total	$	1,129,198	$	619,042	$	987,154

- (14) Long term borrowings

Long-term borrowings
Interest rate Type of borrowings Credit line Period range Syndicated borrowings with four financial institutions including China Trust Commercial Bank(Unsecured) $ 1,200,000 2019.02.20~ 2022.02.20 1.083%~ 1.1372% Less: Current portion (shown as “Other non-current liabilities”) Interest rate Type of borrowings Credit line Period range Syndicated borrowings with four financial institutions including China Trust Commercial Bank(Unsecured) $ 1,200,000 2019.02.20~ 2022.02.20 1.169%~ 1.797% Less: Current portion (shown as “Other non-current liabilities”) Interest rate Type of borrowings Credit line Period range Syndicated borrowings with four financial institutions including China Trust Commercial Bank (Unsecured) $ 1,200,000 2019.02.20~ 2022.02.20 1.3495%~ 3.0444% Less: Current portion (shown as “Other non-current liabilities”)	June 30, 2021
	490,379 $ (490,379) - $ December 31,2020
	811,515 $ (62,960) 748,555 $ June 30,2020
	808,624 $ (31,826) 776,798 $

~26~

On January 15, 2019, the Company signed a joint credit facility of $1.2 billion with four financial institution including China Trust Commercial Bank. The loan agreement includes the following covenants.

(a) The current ratio should be no less than 100% per share every half year.
(b) The debt ratio should not be higher than 100%.
(c) The interest coverage ratio shall not be less than 300%.
(d) The tangible net value shall be maintained at more than 5 billion yuan (inclusive).

If the Company fails to meet the required financial ratios, the bank will stop the allocation. In case of violation of the contract, the bank has the right to ask the Company to repay in full the unpaid balance of the loan in advance.

(15) Pensions

A. (a) The Company and CS Bright Corporation have a defined benefit pension plan in accordance with the Labor Standards Law, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Law. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company and CS Bright Corporation contribute monthly an amount equal to 2.68% and 3.18% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company would assess the balance in the aforementioned labor pension reserve account by the end of December 31, every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method, to the employees expected to be qualified for retirement next year, the Company will make contributions to cover the deficit.
(b) For the aforementioned pension plan, the Group recognised pension costs of $1,710, $2,409, $3,420 and $4,819 for the three months and six months ended June 30, 2021 and 2020, respectively.
(c) Expected contributions to the defined benefit pension plans of the Group for the year ending December 31, 2021 amount to $8,059.

~27~

B. (a) Effective July 1, 2005, the Company and its CS Bright Corporation established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company and CS Bright Corporation contribute monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.
(b) The Company’s Mainland China subsidiaries Opto Plus Technology Co., Ltd., have defined contribution plans. Monthly contributions to an administered by the government in accordance with the pension regulations in the People’s Republic of China (P.R.C.) are based on certain percentage of employees’ monthly salaries and wages. The above Mainland China subsidiaries’ contribution percentage for both the six months ended June 30, 2021 and 2020 was both 14%. Other than the monthly contributions, the Group has no further obligations.
(c) The pension costs under defined contribution pension plans of the Group for the three months and six months ended June 30, 2021 and 2020 were $8,644, $8,859, $16,916 and $18,388, respectively.

(16) Provisions

Analysis of total provisions: Warranty At January 1 Accrued during the period Used during the period Exchange differences At June 30 Current Non-current	2021 2020 22,841 $ 24,017 $ 6,177 4,554 3,109) ( 6,229) ( - 3) ( 25,909 $ 22,339 $ June 30, 2021 December 31,2020 June 30,2020 7,440 $ 4,033 $ 7,319 $ 18,469 $ 18,808 $ 15,020 $

The Group provides warranties on products sold. Provision for warranties is estimated based on historical warranty date of products.

~28~

(17) Share capital

A. As of June 30, 2021, the Company’s authorized capital was $10,000,000, consisting of 1,000,000 thousand shares of common stock, and the paid-in capital was $3,786,228, consisting of 378,623 thousand shares of common stock with a par value of $10 (in dollars) per share. All proceeds from shares issued have been collected. Movements in the number of the Company’s ordinary shares outstanding for the six months ended June 30, 2021 and 2020.

		(In	thousands of shares)
		2021	2020
At January 1		375,541	377,868
Purchased of treasury shares	(	6,566)	-
At June 30		368,975	377,868

B. In accordance with paragraph 7, Article 43-6 of Securities and Exchange Act, private placements of securities can be conducted subsequently within one year after the date that shareholders made their resolution as approved by the Board of Directors on March 18, 2021, which has not yet been approved at the shareholders’ meeting. Taken into consideration capital market condition, the Company discontinued the private replacement of securities as approved by the shareholders in 2020.
C. The Company was approved by the Board of Directors on April 7, 2021. In order to meet the strategic cooperation needs of the Company’s long-term development and strengthen the Company’s competitiveness, the Company plans to introduce strategic investors and conduct private placements within a quota of no more than 60,000 thousand shares. The cash capital increased due to issuance of ordinary shares. The proposal was approved at the shareholders' meeting on July 1, 2021.
D. Treasury stock
(a) Reason for share reacquisition and movements in the number of the Company’s treasury shares are as follows: (In thousands of shares)

Name of company holding the shares The Company The Company Subsidiary-Ho Chung Investment Co., Ltd.	Reason for reacquisition For transfer of shares to empoyees The Company’s shares held by its subsidiary	June 30,2021	June 30,2021
		Number of Shares 8,893 755 9,648	Carrying amount
			221,257 $ 23,172
			244,429 $

~29~

Name of company holdingthe shares The Company The Company Subsidiary-Ho Chung Investment Co., Ltd. Name of company holdingthe shares The Company Subsidiary-Ho Chung Investment Co., Ltd.	Reason for reacquisition For transfer of shares to empoyees The Company’s shares held by its subsidiary Reason for reacquisition The Company’s shares held by its subsidiary	December	31,2020
		Number of Carrying Shares amount 2,327 58,849 $ 755 23,172 3,082 82,021 $ June 30,2020	Carrying amount
			58,849 $ 23,172
			82,021 $
		Number of Shares 755	Carrying amount
			23,172 $

(b) The Company’s shares held by its subsidiary had no voting rights before being transferred to the third party.
(c) On November 6, 2020, the Board of Directors of the Company approved to repurchase the Company’s common shares and transfer them to employees. The Company expected to repurchase 7,500,000 shares with an upper limit of cash amount of $3,103,739. As of January 8, 2021, the final date of repurchase period, the Company repurchased 4,294 thousand shares for a total consideration of $109,251.
(d) On January 8, 2021, the Board of Directors of the Company approved to repurchase the Company’s common shares and transfer to employees. The Company expected to repurchase 7,500,000 shares with an upper limit of cash amount of $3,482,361. As of March 10, 2021, the final date of repurchase period, the Company repurchased 4,599 thousand shares for a total consideration of $112,006.
(e) The Company passed a resolution at the shareholders’ meeting on July 1, 2021 to transfer treasury shares to employees at a price lower than the average price of the shares actually bought back. The transfer price was set at $12.95 per share and approved by the Board of Directors on the same day, and will buy back shares to transfer to employees. The regulations stipulate that 8,893 thousand shares of treasury shares shall be transferred to employees.
(f) Pursuant to R.O.C Securities and Exchange. Act, the number of shares bought back as treasury shares should not exceed 10% of the number of the Company’s issued and outstanding shares and the amount bought back should not exceed the sum of retained earnings, paid-in capital in excess of par value and raised capital surplus.
(g) Pursuant to the R.O.C Securities and Exchange Act, treasury shares should not be pledged as collateral and is not entitled to dividends before it is reissued.

~30~

(h) Pursuant to the R.O.C Securities and Exchange Act, treasury shares not be reissued to the employees within five years from the reacquisition date and shares not reissued within the five-year period are to be retired.

(18) Capital reserve

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

(19) Retained earnings

A. Under the Company’s Articles of Incorporation, the current year’s earnings, if any, shall first be distributed as follows:
(a) Offset prior years’ operating losses.
(b) 10% of the remaining amount shall be set aside as legal reserve, unless the accumulated legal reserve equals the total capital of the Company.
(c) Special reserve set aside in accordance with relevant laws or regulations or as required for operations.
(d) Aside from some of accumulated unappropriated retained earnings that will be reserved, remaining retained earnings will be allocated to shareholders as dividends. The Board of Directors proposes a dividend distribution plan for approval by resolution at the shareholders’ meeting.
(e) The Company appropriated all or some dividends, bonus, capital surplus or legal reserve in the form of cash, which were resolved by the Board of Directors and reported to the shareholders.
B. The Company operates in the high-tech industry and its business life cycle is in the growth stage. In view of its capital expenditure demand and comprehensive financial plan for continuous development, the Company issues both stock and cash dividends. The proportion of dividends to be distributed in stocks and cash is determined based on the Company’s rate of growth and capital expenditures. However, the amount of cash dividends shall not be lower than 50% of the dividends distributed.
C. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the balance of the reserve is in excess of 25% of the Company’s paid-in capital.

~31~

D. In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.
E. The appropriation of 2020 earnings as resolved by the Board of Directors on July 1, 2021 and the appropriation of 2019 earnings as resolved by the shareholders on June 16, 2020 are as follows:

Legal reserve Provision for (reversal of) special reserve Cash dividends Total	Dividends Dividends per share per share Amount (indollars) Amount (in dollars) 57,584 $ 60,048 $ 1,320 4,649) ( 514,927 1.39 $ - - $ 573,831 $ 55,399 $ 2020 2019

(a) The distribution of cash dividends in 2020 was approved by the Company's Board of Directors on March 18, 2021. The statutory surplus reserve and the special surplus reserve were approved at the general meeting of shareholders on July 1, 2021. There is no difference between the surplus distribution in 2020 and the Company's approval by the Board of Directors on March 18, 2021. For the surplus distribution approved by the Board of Directors and resolutions of the shareholders' meeting, please go to the public information observatory for inquiries.
(b) On March 19, 2020, the Board of Directors of the Company resolved the appropriation of earnings and expected to distribute cash dividends of $378,623 with $1 per share. On June 16, 2020, shareholders proposed an amendment, “shareholders’ bonus – cash” is $0, for the proposed resolution of 2019 earnings appropriation, which means that cash dividends will be distributed at $0 per share. The Board of Directors shall subsequently distribute dividends following the resolution of shareholders. Consequently, the Company’s Board of Directors resolved the amendments to the appropriation of earnings on December 18, 2020 and no cash dividend will be distributed. Please refer to the website of “Market Observation Post System” for information about appropriation of earnings which was approved by the Board of Directors and resolved by shareholders.

~32~

(20) Other equity items

Other equity items
					2021
		Currency translation
	differences of foreign			Unrealized gain (loss) on
			operations		valuation		Total
At January 1	($		4,063)	$	191,414	$	187,351
Financial assets at fair value
through other comprehensive
income(loss)
Revaluation - Group			-		26,010		26,010
Currency translation differences:
-Group			3,860		-		3,860
-Associates	(		161)		-	(	161)
At June 30	($		364)	$	217,424	$	217,060
					2020
		Currency translation
	differences of foreign			Unrealized gain (loss) on
			operations		valuation		Total
At January 1	($		9,372)	$	288,841	$	279,469
Financial assets at fair value
through other comprehensive
income(loss)
Revaluation - Group				(	48,252)	(	48,252)
Tax on revaluation			-		8,364		8,364
Revaluation transferred to retained earnings			-	(	180)	(	180)
Currency translation differences:
-Group	(		2,038)		-	(	2,038)
-Associates			39		-		39
At June 30	($		11,371)	$	248,773	$	237,402

(21) Operating revenue

Operating revenue At June 30 ($	11,371) 248,773 $ 237,402 $	11,371) 248,773 $ 237,402 $
Revenue from contracts with customers Revenue from contracts with customers	Three months ended June 30
	2021 2020 1,383,868 $ 1,377,915 $ Six months ended June 30	2020
		1,377,915 $
	2021 2,967,279 $	2020
		2,541,994 $

~33~

A. The Group derives revenue in the following major product lines:

Three months ended June 30, 2021	LED and Silicon Sensor Chips Group	Displays and Lighting Group 134,324 $ Displays and Lighting Group 231,620 $ Displays and Lighting Group	Packaging Business Group	Other segments	Total
Revenue from external contracts customers Three months ended June 30, 2020	1,183,481 $ LED and Silicon Sensor Chips Group		66,063 $ Packaging Business Group	- $ Other segments	1,383,868 $ Total
Revenue from external contracts customers Six months ended June 30,2021	1,072,126 $ LED and Silicon Sensor Chips Group		70,802 $ Packaging Business Group	3,367 $ Other segments	1,377,915 $ Total
Revenue from external contracts customers Six months ended June 30, 2020	2,535,442 $ LED and Silicon Sensor Chips Group	298,804 $ Displays and Lighting Group	133,033 $ Packaging Business Group	- $ Other segments	2,967,279 $ Total
Revenue from external contracts customers	1,929,812 $	481,973 $	121,991 $	8,218 $	2,541,994 $

B. The Group has recognised the following revenue-related contract liabilities:

June 30,2021 December 31, 2020 Contract liabilities 87,014 $ 44,086 $ Revenue recognised that was included in the contract liability balance at the beginning of the period $ Revenue recognised that was included in the contract liability balance at the beginning of the period $	June 30,2020 January1,2020 47,133 $ 30,360 $ Threemonths ended June 30	June 30,2020 January1,2020 47,133 $ 30,360 $ Threemonths ended June 30	January1,2020
			30,360 $
	2021 2020 3,323 4,079 $ Six months ended June 30	2020
$		4,079 $

	2021 31,894	2020
$		11,325 $

~34~

(22) Interest income

Three months ended June 30

Interest income from bank deposits Interest income from resale bonds Other interest income

==> picture [228 x 181] intentionally omitted <==

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

2021 2020
$ 2,643 $ 2,733
173 416
2 104
$ 2,818 $ 3,253
Six months ended June 30
2021 2020
$ 4,388 $ 6,023
430 864
6 105
$ 4,824 $ 6,992
----- End of picture text -----

(23) Other income

Three months ended June 30

		2021				2020
Rental income	$	20		$		20
Other income		1,157				9,174
	$	1,177		$		9,194
		Six months	ended June 30
		2021				2020
Rental income	$	40		$		40
Dividend income		10,344				12,443
Other income		7,565				15,174
	$	17,949		$		27,657
Other gains and losses
		Three months			ended June 30
		2021				2020
Gain on disposals of property, plant and
equipment	$	12			$	-
Net currency exchange loss	(	6,531)			(	5,642)
Net gain on financial assets and liabilities
at fair value through profit or loss		18,051				819
Loss on disposal of property, plant and
equipment			-		(	35,585)
Others	(	64)			(	25)
Total	$	11,468			($	40,433)

(24) Other gains and losses

~35~

		Six months ended June 30	Six months ended June 30	Six months ended June 30
		2021		2020
Loss on disposals of property, plant and
equipment	($	57)	$	-
Net currency exchange (loss) gain	(	6,112)		620
Net gain on financial assets and liabilities
at fair value through profit or loss		18,553		826
Loss on disposal of property, plant and
equipment		-	(	35,585)
Others	(	436)	(	61)
Total	$	11,948	($	34,200)

(25) Finance costs

Interest expense: Bank borrowings Lease liabilities Less: Capitalisation of qualifying assets

Other financial costs Total

Interest expense: Bank borrowings Lease liabilities Less: Capitalisation of qualifying assets

Other financial costs Total

	Three months	ended June 30	ended June 30
	2021		2020
$	3,265	$	5,752
	1,033		1,089
(	36)	(	204)
	4,262		6,637
	216		209
$	4,478	$	6,846
	Six months ended June 30
	2021		2020
$	7,500	$	13,030
	2,080		2,202
(	139)	(	555)
	9,441		14,677
	685		673
$	10,126	$	15,350

(26) Expenses by nature

Expenses by nature
Employee benefit expense Depreciation on property, plant and equipment Amortisation on intangible assets Total	2021 2020 320,193 $ 308,150 $ 114,678 114,921 4,556 3,666 439,427 $ 426,737 $ Three months ended June 30
	2021 320,193 $ 114,678 4,556 439,427 $

~36~

Six months ended June 30

Employee benefit expense Depreciation on property, plant and equipment Amortisation on intangible assets Total	2021 2020 672,087 $ 620,193 $ 228,924 233,536 9,054 7,173 910,065 $ 860,902 $

(27) Employee benefit expense

Employee benefit expense
Wages and salaries Labor and health insurance fees Pension costs Other personnel expenses Wages and salaries Labor and health insurance fees Pension costs Other personnel expenses	2021 2020 283,717 $ 268,223 $ 21,453 21,686 10,354 11,268 4,669 6,973 320,193 $ 308,150 $ Three months ended June 30 Six months ended June 30
	2021 598,093 $ 42,711 20,336 10,947 672,087 $	2020
		538,976 $ 44,648 23,207 13,362
		620,193 $

A. According to the Articles of Incorporation of the Company, if the Company has profit during the year, the Company shall distribute bonus to the employees that account for 10%~15% and pay remuneration to the directors that shall not be higher than 5%, of the total distributed amount. If the Company has an accumulated deficit, earnings should be used to cover losses. Employees’ compensation can be distributed in the form of shares or in cash. Qualification requirements of employees, including the employees of subsidiaries of the Company meeting certain specific requirements, entitled to receive aforementioned stock or cash may be specified in the Articles of Incorporation. The Company’s shareholders’ meeting on July 1, 2021 approved the amendment to the Company’s Articles of Incorporation, and revised the employee remuneration ratio to 10%-20% based on profitability, and the director’s remuneration ratio to no more than 10%.

~37~

B. For the three months and six months ended June 30 ,2021 and 2020, employees’ compensation was accrued at $42,439, $18,329, $98,604 and $47,082, respectively; directors’ remuneration was accrued at $14,146, $6,109, $32,868 and $15,694, respectively. The aforementioned amounts were recognised in salary expense. The employees’ compensation and directors’ and supervisors’ remuneration were estimated and accrued based both on 15% and 5%.
C. For the three months and six months ended June 30, 2021, the Company’s subsidiary, CS Bright Corporation, was liquidated. For the three months and six months ended June 30, 2020, employees’ compensation of the Company’s subsidiary, CS Bright Corporation, was accrued at $256 and $256, respectively; while directors’ and supervisors’ remuneration was accrued at $64 and $64 and, respectively. The aforementioned amounts were recognised in salary expenses, which were accrued based on distributable profit of current year as of the end of reporting period. And for the six months ended June 30, 2020, the subsidiary accrued employees’ compensation and directors’ remuneration at 12% and 3%, respectively.
D. Employees’ compensation and directors’ remuneration of 2020 as resolved by the Board of Directors are the same as the amount recognised in the consolidated financial statements.
E. Information about employees’ compensation and directors’ remuneration of the Company as resolved at the Board of Directors’ meeting will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

(28) Income tax

A. Income tax expense
(a) Components of income tax expense:

Current tax: Current tax on profits for the period Tax on undistributed surplus earnings Prior year income tax underestimation Total current tax Deferred tax: Origination and reversal of temporary differences Total deferred tax Income tax expense	2021 2020 41,113 $ 37,182 $ - 8,323 1,335 25,336) ( 42,448 20,169 1,698 7,609 1,698 7,609 44,146 $ 27,778 $ Three months ended June 30

~38~

		Six months ended June 30	Six months ended June 30	Six months ended June 30
		2021		2020
Current tax:
Current tax on profits for the period	$	92,428	$	69,600
Tax on undistributed surplus earnings		-		8,323
Prior year income tax underestimation		1,335	(	25,336)
Total current tax		93,763		52,587
Deferred tax:
Origination and reversal of temporary
differences		4,698		8,193
Total deferred tax		4,698		8,193
Income tax expense	$	98,461	$	60,780
The income tax charge relating to components	of other comprehensive income are as follows:
		Three months	ended June 30
		2021		2020
Changes in fair value of financial assets
at fair value through other comprehensive
income	$	-	$	-
		Six months ended June 30
		2021		2020
Changes in fair value of financial assets
at fair value through other comprehensive
income	$	-	$	8,364

(b) The income tax charge relating to components of other comprehensive income are as follows:

B. As of June 30, 2021, the Company’s income tax returns through 2019 have been assessed and approved by the Tax Authority.

~39~

(29) Earnings per share

==> picture [474 x 480] intentionally omitted <==

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

Three months ended June 30, 2021
Weighted-average
outstanding Earnings per
common shares share
Profit after tax (in thousands) (in dollars)
Basic earnings per share
Profit attributable to owners of
the parent $ 182,994 371,302 $ 0.49
Dilutive effect of common stock
equivalents:
Employees’ compensation - 3,859
Diluted earnings per share
Profit attributable to owners of
the parent plus dilutive effect
of common stock equivalents $ 182,994 375,161 $ 0.49
Three months ended June 30, 2020
Weighted-average
outstanding Earnings per
common shares share
Profit after tax (in thousands) (in dollars)
Basic earnings per share
Profit attributable to owners of
the parent $ 69,972 377,868 $ 0.19
Dilutive effect of common stock
equivalents:
-
Employees’ compensation 2,297
Diluted earnings per share
Profit attributable to owners of
the parent plus dilutive effect
of common stock equivalents $ 69,972 380,165 $ 0.18
----- End of picture text -----

~40~

Basic earnings per share Profit attributable to owners of the parent Dilutive effect of common stock equivalents: Employees’ compensation Diluted earnings per share Profit attributable to owners of the parent plus dilutive effect of common stock equivalents Basic earnings per share Profit attributable to owners of the parent Dilutive effect of common stock equivalents: Employees’ compensation Diluted earnings per share Profit attributable to owners of the parent plus dilutive effect of common stock equivalents	Weighted-average outstanding common shares Earnings per share Profit after tax (in thousands) (in dollars) 428,053 $ 369,761 1.16 $ - 5,712 428,053 $ 375,473 1.14 $ Weighted-average outstanding common shares Earnings per share Profit after tax (in thousands) (in dollars) 191,521 $ 377,868 0.51 $ - 5,294 191,521 $ 383,162 0.50 $ Six months ended June 30,2021 Six months ended June 30,2020	Weighted-average outstanding common shares Earnings per share Profit after tax (in thousands) (in dollars) 428,053 $ 369,761 1.16 $ - 5,712 428,053 $ 375,473 1.14 $ Weighted-average outstanding common shares Earnings per share Profit after tax (in thousands) (in dollars) 191,521 $ 377,868 0.51 $ - 5,294 191,521 $ 383,162 0.50 $ Six months ended June 30,2021 Six months ended June 30,2020
		0.50 $

(30) Supplemental cash flow information

Investing activities with partial cash payments ：

		Six months ended June 30	Six months ended June 30
		2021	2020
Purchase of property, plant and equipment	$	65,160	$	151,002
Add：Ending balance of prepayments for business facilities		114,587		9,867
Less:Opening balance of prepayments for business facilities	(	3,943)	(	7,447)
Cash paid during the period	$	175,804	$	153,422

~41~

Financing activities with no cash flow effects

(31)	Changes in liabilities from financing activities 2021 2020 Distribution of cash dividends (shown as "other payables") 514,927 $ 378,623 $ Six months endedJune30

2021

Short-term borrowings	Long-term borrowings ( including current portion)	Long-term borrowings ( including current portion)	Long-term borrowings ( including current portion)	Long-term borrowings ( including current portion)	Lease liabilities	Lease liabilities	Lease liabilities		Guarantee deposits		Dividends payments
230,758 46,334) - - - - 526) 183,898	$ ( ( $		811,515 317,101) - - - - 4,035) 490,379		236,266 $ 9,777) ( 2,080) ( 2,080 - 109 - 226,598 $ 2020				869 $ 1,006 - - - - 1,875 $		- $ - - 514,927 - - 514,927 $
		$

Short-term borrowings			Long-term borrowings ( including current portion)			Lease liabilities		Guarantee deposits		Dividends payments
249,640 $ 10,331) ( - - - - 1,224) ( 238,085 $			814,504 $ - - - - 5,880) ( 808,624 $	249,496 $ 10,532) ( 2,202) ( 2,263 2,202 - 7) ( 241,220 $			1,545 $ 86) ( - - - - 1,459 $			- $ - - - 378,623 - 378,623 $

Note ： See Note 6(19).

~42~

7. RELATED PARTY TRANSACTIONS

(1) Names of related parties and relationship

Names of related parties

Opto Medical Public Welfare Foundation Shin-Etsu Opto Electronic Co., Ltd.

Giga Epitaxy Technology Corp. Nichia Taiwan Corp. Nichia Corp.

Relationship with the Company

Other related parties The Company is the director of this company; this company is the director of the Company.(Note 1) The Company is the director of this company.(Note 3) This company is the director of the Company. This company's subsidiary is the director of the Company.

VML Technologies B.V. This company is an investment of Ho Chung Investment Co., Ltd. accounted for using equity method Shen Zhen Guabg Xin Vision Technology The chairman of this company is an independent director CO., Ltd( Shen Zhen Guang Xin) of the Company.(Note 2) Guang Xin Vision Tech. (HK) CO., Ltd The chairman of this company is an independent director (Hong Kong Guang Xin) of the Company.(Note 2)

Note 1: The shareholders of the Company during their meeting resolved to reelect all its directors on June 16, 2020. The shareholders of Shin-Etsu Opto Electronic Co., Ltd. (Shin-Etsu) also resolved to reelect all its directors on June 18, 2020. After the reelection, the Company is no longer a legal person of Shin-Etsu and has not been a related party of the Company since June 18, 2020.
Note 2: The chairman of this Company was no longer an independent director of the Company after the re-election at the stockholder’s meeting on June 16, 2020. Thereafter, it became a nonrelated party.
Note 3: It was no longer is a related party of the Company after the Company resigned as director on February 28, 2021.

~43~

(2) Significant transactions and balances with related parties

A. Operating revenue:

Operating revenue:
Sales of goods: Associates Other related parties Total Sales of goods: Associates Other related parties Total	Three months ended June 30
	2021 2020 107 $ - $ 98,631 52,312 98,738 $ 52,312 $ Six months ended June 30	2020
		- $ 52,312
		52,312 $
	2021 2,279 $ 182,054 184,333 $	2020
		- $ 130,467
		130,467 $

The selling prices charged to the above related parties are not materially different from those charged to non-related parties. For the six months ended June 30, 2021 and 2020, the credit term was 45 ~ 136 days, some related parties adopt advance payment post-shipment method and 90 ~ 150 days for the non-related parties for both periods.

B. Purchases:

Purchases:
Purchases of goods: Other related parties Purchases of goods: Other related parties	Three months ended June 30
	2021 2020 29,043 $ 54,795 $ Six months ended June 30	2020
		54,795 $
	2021 70,286 $	2020
		111,286 $

The purchase prices charged by the above related parties were not materially different from those charged by non-related parties. For the six months ended June 30, 2021 and 2020, the credit term was 60 ~ 120 days and days for the related parties, respectively, and 90 ~ 120 days for the nonrelated parties for both periods.

C. Accounts receivable:

related parties for both periods. Accounts receivable:
Receivables from related parties: Other related parties	June 30,2021 26,082 $	December 31,2020 16,880 $	June 30,2020
			22,110 $

~44~

D. Accounts payable:

D. Accounts payable:
E. Advance receipt F. Lease (a) Rent expense June 30,2021 Payables to related parties: Other related parties 46,730 $ June 30, 2021 Associates 8,211 $ Other related parties Other related parties	December 31,2020 June 30,2020 51,920 $ 80,174 $ December 31, 2020 June30,2020 942 $ - $ 2021 2020 600 $ 600 $ Three months ended June 30 Six months ended June 30
	2021 1,200 $	2020
		1,200 $

The Company leases plant and machinery from related parties. The monthly rental payments are mutually agreed upon. The payment terms are not materially different from those charged by non-related parties.

(b) Lease liabilities
(i) Outstanding balance:

	June 30,	2021		December 31,2020	December 31,2020	December 31,2020		June 30,2020
Other related parties	$	3,355		$	4,518		$	5,672
(ii) Interest expense
					Threemonths	ended		June 30
					2021			2020
Other related parties		$			17	$		27
					Six months endedJune30
					2021			2020
Other related parties		$			36	$		57
Others
			Three		months ended		Six months ended
				June 30,2021				June 30,2021
Donation expense：
-Opto Medical Public Welfare Foundation		$			50,000		$	50,000
January 1, 2020 to June 30, 2020`：`None.

G. Others

~45~

The purpose of the donation is mainly for the medical emergency relief needed by the society, and the cooperative development of medical technology. In addition, the above-mentioned donation has no major agreement between the Group and the recipient.

(3) Key management compensation

Key management compensation
Salaries and other short-term employee benefits Post-employment benefits Total Salaries and other short-term employee benefits Post-employment benefits Total	2021 2020 26,195 $ 14,001 $ 78 109 26,273 $ 14,110 $ Three months ended June 30 Six months ended June 30
	2021 63,479 $ 181 63,660 $	2020
		33,580 $ 218
		33,798 $

8. PLEDGED ASSETS

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

Pledged assets Restricted assets-Time deposits, (shown as "other current assets)	Book value	June 30, 2020 Creditor Bank Type 22,810 $ Chang Hwa Commercial Bank Far Eastern International Bank Land lease and dormitory lease deposits Purpose ofpledge	June 30, 2020 Creditor Bank Type 22,810 $ Chang Hwa Commercial Bank Far Eastern International Bank Land lease and dormitory lease deposits Purpose ofpledge	June 30, 2020 Creditor Bank Type 22,810 $ Chang Hwa Commercial Bank Far Eastern International Bank Land lease and dormitory lease deposits Purpose ofpledge
	June 30, December 31, 2021 2020 22,810 $ 22,810 $		Creditor Bank
				Land lease and dormitory lease deposits

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT

COMMITMENTS

(1) As of June 30, 2021, the guarantees provided by the Company through banks were as follows:

Guarantor Far Eastern International Bank Chang Hwa Commercial Bank Chang Hwa Commercial Bank Mega International Commercial Bank Taipei Fubon Commercial Bank Taishin International Bank	Nature ofGuarantee Performance guarantee Customs duty Performance guarantee Performance guarantee and warranty Performance guarantee Borrowing	Amount
		19,450 $ 13,000 3,360 18,380 2,055 97,738
		153,983 $

~46~

(2) As of June 30, 2021, the outstanding letters of credit issued for the importation of raw materials and machinery were as follows:

==> picture [150 x 15] intentionally omitted <==

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

Amount (thousands)
----- End of picture text -----

TWD	21,369
JPY	3,201
USD	1,113

(3) Operating lease commitments:

See Note 6(9).
(4) As of June 30, 2021, the promissory notes issued by the Company and CS Bright Corporation for loans, performance guarantee for purchases and loans granted for subsidiaries amounted to $4,240,264.
(5) As of June 30, 2021, the capital expenditure contracted but not yet incurred is $128,236.

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

Please see Notes 6(17) , 6(19) and 6(27).

12. OTHERS

(1) Capital risk management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders or issue new shares to reduce debt. The Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings less cash and cash equivalents. Total capital is calculated as ‘equity’ as shown in the consolidated balance sheet plus net debt. As of June 30, 2021, December 31, 2020 and June 30, 2020, the gearing ratios were (34.35%), (36.52%) and (37.54%), respectively.

~47~

(2) Financial instruments

A. Financial instrument by category.

nancial instruments Financial instrument by category.
Financial assets Financial assets at fair value through profit or loss Financial assets mandatorily measured at fair value through profit or loss Financial assets at fair value through other comprehensive income Financial assets at amortised cost/Loans and receivables Cash and cash equivalents Financial assets at amortised cost Notes receivable Accounts receivable - net (including related parties) Other accounts receivable Guarantee deposits paid Financial assets Financial liabilities mandatorily measured at fair value through profit or loss Financial liabilities at amortised cost Financial assets at fair value through other comprehensive income Short-term borrowings Notes payable Accounts payable (including related parties) Other accounts payable Long-term borrowings (including current portion) Guarantee deposits received Lease liabilities	June 30,2021 December 31,2020 June 30,2020 776,035 $ 427,409 $ 276,962 $ 810,008 783,998 873,341 2,583,941 3,100,161 2,968,119 517,737 22,810 22,810 7,617 8,873 7,357 1,288,885 1,651,793 1,691,847 24,646 20,218 20,104 14,737 11,763 13,532 6,023,606 $ 6,027,025 $ 5,874,072 $ June30,2021 December31,2020 June30,2020 - $ 799 $ - $ 183,898 230,758 238,085 - 1,757 837 678,040 717,846 714,521 1,129,198 619,042 987,154 490,379 811,515 808,624 1,875 869 1,459 2,483,390 $ 2,382,586 $ 2,750,680 $ 226,598 $ 236,266 $ 241,220 $	June 30,2020
		276,962 $ 873,341 2,968,119 22,810 7,357 1,691,847 20,104 13,532
		5,874,072 $

B. Financial risk management policies

There was no significant change in the reporting period. Please refer to Note 12 in the consolidated financial statements for the year ended December 31, 2020.

~48~

C. Significant financial risks and degrees of financial risks
(a) Market risk

Foreign exchange risk

i. The Group operates internationally and is exposed to foreign exchange risk arising from the transactions of the Company and its subsidiaries used in various currency exposures, primarily with respect to the USD and JPY. Exchange rate risk arises from future commercial transactions and recognised assets and liabilities.
ii. To manage their foreign exchange risk arising from future commercial transactions and recognised assets and liabilities, entities in the Group use forward foreign exchange contracts, transacted with Group treasury. The expired dates of these forward foreign exchange contracts are shorter than 6 months and are not accounted for under hedge accounting. Foreign exchange risk arises when future commercial transactions or recognised assets or liabilities are denominated in a currency that is not the entity’s functional currency.
iii. As the foreign operations are strategic investments, the Company does not hedge for them.
iv. The Group’s businesses involve some non-functional currency operations (the Company’s and certain subsidiaries’ functional currency: TWD; other subsidiaries’ functional currency: CNY). The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

Extent of variation Effect on profit or loss Effect on other compre- hensive income Unrealized exchange gain (loss) Six months ended June 30,2021 SensitivityAnalysis	Extent of variation Effect on profit or loss Effect on other compre- hensive income Unrealized exchange gain (loss) Six months ended June 30,2021 SensitivityAnalysis	Extent of variation Effect on profit or loss Effect on other compre- hensive income Unrealized exchange gain (loss) Six months ended June 30,2021 SensitivityAnalysis	Extent of variation Effect on profit or loss Effect on other compre- hensive income Unrealized exchange gain (loss) Six months ended June 30,2021 SensitivityAnalysis
	SensitivityAnalysis
Extent of variation	Effect on profit or loss	Effect on other compre- hensive income
1% 1% 1% 1%	12,196 $ 842 1,010 161	- $ - - -	6,138) ($ 315) ( 765) ( 313) (

~49~

==> picture [463 x 98] intentionally omitted <==

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

Six months ended June 30, 2021
June 30, 2021 Sensitivity Analysis
Foreign Effect
currency on other Unrealized
amount Extent Effect compre- exchange
(in Exchange Book value of on profit hensive gain
thousands) rate (TWD) variation or loss income (loss)
----- End of picture text -----

Foreign currency amount (in thousands) Exchange rate Book value (TWD) Extent of variation Effect on profit or loss Effect on other compre- hensive income Unrealized exchange gain (loss)	Foreign currency amount (in thousands) Exchange rate Book value (TWD) Extent of variation Effect on profit or loss Effect on other compre- hensive income Unrealized exchange gain (loss)	Foreign currency amount (in thousands) Exchange rate Book value (TWD) Extent of variation Effect on profit or loss Effect on other compre- hensive income Unrealized exchange gain (loss)	Foreign currency amount (in thousands) Exchange rate Book value (TWD) Extent of variation Effect on profit or loss Effect on other compre- hensive income Unrealized exchange gain (loss)	Foreign currency amount (in thousands) Exchange rate Book value (TWD) Extent of variation Effect on profit or loss Effect on other compre- hensive income Unrealized exchange gain (loss)	Foreign currency amount (in thousands) Exchange rate Book value (TWD) Extent of variation Effect on profit or loss Effect on other compre- hensive income Unrealized exchange gain (loss)	Foreign currency amount (in thousands) Exchange rate Book value (TWD) Extent of variation Effect on profit or loss Effect on other compre- hensive income Unrealized exchange gain (loss)
Note`：`If the consolidated entities’ functional currency is not TWD, the foreign currency denominated assets and liabilities of the consolidated entities should be disclosed. For example, when the functional currency of a subsidiary is CNY, its USD foreign currency positions should also be disclosed. (Foreign currency: functional currency) Financial liabilities Monetary items USD : TWD 30,584 $ 27.91 853,599 $ 1% 8,536) ($ - $ 11,376 $ JPY : TWD 263,563 0.2541 66,971 1% 670) ( - 732 USD : CNY (Note) 123 6.4655 3,427 1% 34) ( - 124) ( Non-monetary items :None. Foreign currency amount (in thousands) Exchange rate Book value (TWD) Extent of variation Effect on profit or loss Effect on other compre- hensive income Unrealized exchange gain(loss) (Foreign currency: functional currency) Financial assets Monetary items USD : TWD 47,188 $ 28.43 1,341,555 $ 1% 13,416 $ - $ 33,270) ($ JPY : TWD 295,326 0.2743 81,008 1% 810 - 483) ( CNY : TWD 25,061 4.3520 109,065 1% 1,091 - 97) ( USD : CNY (Note) 877 6.5091 26,644 1% 246 - 136 Non-monetary items :None. Financial liabilities Monetary items USD : TWD 32,237 $ 28.53 919,722 $ 1% 9,197) ($ - $ 24,369 $ JPY : TWD 508,001 0.2783 141,377 1% 1,414) ( - 265) ( USD : CNY (Note) 45 6.5091 1,265 1% 13) ( - 51) ( Non-monetary items :None. Year ended December 31,2020 December 31,2020 SensitivityAnalysis
				SensitivityAnalysis
	Exchange rate		Extent of variation	Effect on profit or loss	Effect on other compre- hensive income
	28.43 0.2743 4.3520 6.5091 28.53 0.2783 6.5091	1,341,555 $ 81,008 109,065 26,644 919,722 $ 141,377 1,265	1% 1% 1% 1% 1% 1% 1%	13,416 $ 810 1,091 246 9,197) ($ 1,414) ( 13) (	- $ - - - - $ - -	33,270) ($ 483) ( 97) ( 136 24,369 $ 265) ( 51) (

~50~

Note ： If the consolidated entities’ functional currency is not TWD, the foreign currency denominated assets and liabilities of the consolidated entities should be disclosed. For example, when the functional currency of a subsidiary is CNY, its USD foreign currency positions should also be disclosed.

Exchange rate Book value (TWD) June 30,2020	Exchange rate Book value (TWD) June 30,2020	Extent of variation Effect on profit or loss Effect on other compre- hensive income Unrealized exchange gain or (loss) 1% 14,571 $ - $ 15,508) ($ 1% 440 - 199) ( 1% 1,107 - 1,201) ( 1% 51 - 254) ( 1% 9,003) ($ - $ 14,606 $ 1% 935) ( - 966 1% 10) ( - 3) ( SensitivityAnalysis Six months ended June 30,2020	Extent of variation Effect on profit or loss Effect on other compre- hensive income Unrealized exchange gain or (loss) 1% 14,571 $ - $ 15,508) ($ 1% 440 - 199) ( 1% 1,107 - 1,201) ( 1% 51 - 254) ( 1% 9,003) ($ - $ 14,606 $ 1% 935) ( - 966 1% 10) ( - 3) ( SensitivityAnalysis Six months ended June 30,2020	Extent of variation Effect on profit or loss Effect on other compre- hensive income Unrealized exchange gain or (loss) 1% 14,571 $ - $ 15,508) ($ 1% 440 - 199) ( 1% 1,107 - 1,201) ( 1% 51 - 254) ( 1% 9,003) ($ - $ 14,606 $ 1% 935) ( - 966 1% 10) ( - 3) ( SensitivityAnalysis Six months ended June 30,2020
		Extent of variation	Effect on profit or loss Effect on other compre- hensive income 14,571 $ - $ 440 - 1,107 - 51 - 9,003) ($ - $ 935) ( - 10) ( - SensitivityAnalysis
29.58 0.2731 4.166 7.0699 29.68 0.2771 7.0699	1,457,140 $ 44,015 110,720 5,126 900,343 $ 93,494 978	1% 1% 1% 1% 1% 1% 1%		15,508) ($ 199) ( 1,201) ( 254) ( 14,606 $ 966 3) (

Price risk

i. The Group’s equity securities which are exposed to price risk, are the held financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income. To manage its price risk arising from investments in equity securities, the Group diversifies its portfolio.

~51~

ii. The Group’s investments in equity securities comprise domestic listed and unlisted stocks. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these domestic funds, equity securities of listed company or unlisted company had increased/decreased by 5%, 20% or 10%, respectively, with all other variables held constant, post-tax profit for the six months ended June 30, 2021 and 2020 would have increased/decreased by $58,886 and $19,173 respectively, as a result of gains/losses on equity securities classified as at fair value through profit or loss. Other components of equity would have increased/decreased by $92,181 and $94,749 as a result of gains/losses on equity securities classified as at fair value through other comprehensive income.

Interest rate risk

i. The Group’s interest rate risk arises from long-term and short-term borrowings. Borrowings issued at floating rates expose the Group to cash flow interest rate risk which is partially offset by cash and cash equivalents held at floating rates. During the six months ended June 30, 2021 and 2020, the Group’s borrowings at floating rate were denominated in TWD, USD and JPY.
ii. At June 30, 2021, December 31, 2020 and June 30, 2020, if interest rates on borrowings had been 100 basis point higher/lower with all other variables held constant, post-tax profit for the six months ended June 30, 2021 and 2020 would have been $2,675 and $2,253 lower/higher, respectively, mainly as a result of higher/lower interest expense on floating rate borrowings.
(b) Credit risk
i. Credit risk refers to the risk of financial loss to the Group arising from default by the clients or counterparties of financial instruments on the contract obligations. According to the Group’s credit policy, each local entity in the Group is responsible for managing and analysing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors, the utilisation of credit limits is regularly monitored. Credit risk arises from cash and cash equivalents, derivative financial instruments and deposits with banks and financial institutions, as well as operating activities, including outstanding receivables.
ii. The Group adopts following assumptions under IFRS 9 to assess whether there has been a significant increase in credit risk on that instrument since initial recognition: If the contract payments were past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.
iii. The default occurs when the contract payments are past due over 180 days for distributors and 360 days for other customers, respectively.

~52~

iv. The Group classifies customer’s accounts receivable, in accordance with credit risk on trade and customer types. The Group applies the simplified approach using loss rate methodology to estimate expected credit loss under the provision matrix basis.
v. The following indicators are used to determine whether the credit impairment of debt instruments has occurred:
(i) It becomes probable that the issuer will enter bankruptcy or other financial reorganisation due to their financial difficulties;
(ii) The disappearance of an active market for that financial asset because of financial difficulties;
(iii) Default or delinquency in interest or principal repayments;
(iv) Adverse changes in national or regional economic conditions that are expected to cause a default.
viii. The Group used historical and timely information to assess the default possibility of notes receivable and accounts receivable ( including related parties). As of June 30, 2021, December 31, 2020 and June 30, 2020, the loss rate methodology is as follows :

Individual	Group	Total
100% 6,284 $ 6,284 $ Individual	0.01%~100% 1,298,415 $ 1,913 $ Group	1,304,699 $ 8,197 $ Total
100% 4,997 $ 4,997 $ Individual	0.01%~100% 1,663,689 $ 3,023 $ Group	1,668,686 $ 8,020 $ Total
100% 6,638 $ 6,638 $	0.01%~100% 1,722,265 $ 23,061 $	1,728,903 $ 29,699 $

vi. As at June 30, 2021, December 31, 2020 and June 30, 2020, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the Group’s accounts receivable and notes receivable was $1,296,502, $1,660,666 and $1,699,204, respectively.

~53~

vii. Movements in relation to the Group applying the simplified approach to provided loss allowance for accounts receivable are as follows:

			2021		2020
			Accounts receivable	Accounts receivable
At January 1		$	8,020	$	21,821
Provision for impairment loss			2,160		7,878
Write-offs	(		1,983)		-
At June 30		$	8,197	$	29,699

vii. The Group conducts business with banks and financial institutions with sound reputation, and therefore do not expect the financial assets at amortized cost to have credit risk.
ix. For investments in debt instruments at amortised cost, the credit rating levels are presented below:

below:
Financial assets at amortised cost Financial assets at amortised cost Financial assets at amortised cost	12 months	June 30,2021 Lifetime		Total
		Significant increase in creditrisk	Impairment ofcredit
	517,737 $ 12 months			517,737 $ Total
	22,810 $			22,810 $
	12 months	Lifetime		Total
		Significant increase in credit risk	Impairment of credit
	22,810 $	- $	- $	22,810 $

~54~

(c) Liquidity risk

i. Cash flow forecasting is performed in the operating entities of the Group and aggregated by Group treasury. Group treasury monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times.
ii. The table below analyses the Group’s non-derivative financial liabilities and derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for non-derivative financial liabilities and to the expected maturity date for derivative financial liabilities.

June 30, 2021 Non-derivative financial liabilities ： Short-term borrowings Accounts payable (including related parties) Lease liabilities Other payables Long-term borrowings (including current portion) December 31, 2020 Non-derivative financial liabilities ： Short-term borrowings Notes payable Accounts payable (including related parties) Lease liabilities Other payables Long-term borrowings (including current portion) Derivative financial liabilities ： Forward exchange contracts	Less than 1 year 184,051 $ 678,040 23,283 1,129,198 495,130 Less than 1year 231,089 $ 1,757 717,846 23,642 619,042 74,285 799 $	Between 1 and 2 years - $ - 20,824 - - Between 1 and 2 years - $ - - 22,305 - 751,637 - $	Between 2 and 3 years - $ - 17,997 - - Between 2 and 3 years - $ - 18,933 - - - $	Between 3 and 5 years - $ - 35,621 - - Between 3 and 5 years - $ - 35,782 - - - $	Over 5 years
					- $ - 159,319 - - Over 5 years
					- $ - 168,130 - - - $

~55~

Less than June 30, 2020 1year Non-derivative financial liabilities ： Short-term borrowings 238,817 $ Notes payable 837 Accounts payable 714,521 (including related parties) Lease liabilities 22,929 Other payables 987,154 Long-term borrowings 47,229 (including current portion)	Between Between 1 and 2 2 and 3 years years - $ - $ - - - - 21,545 19,232 - - 771,408 -	Between 3 and 5 Over 5 years years - $ - $ - - - - 35,135 176,887 - - - -

(3) Fair value information

A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis.
Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3: Unobservable inputs for the asset or liability.
B. Fair value information of investment property at cost is provided in Note 6(10).
C. The carrying amounts of cash and cash equivalent, notes receivable, accounts receivable, other receivables, long-term and short-term borrowings, notes payable, accounts payable, other payables and lease liabilities are approximate to their fair value.
D. The related information of financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities at June 30, 2021, December 31, 2020 and June 30, 2020 is as follows:

June 30, 2021 Assets: Recurring fair value measurements Financial assets at fair value through profit or loss Domestic funds Equity securities Financial assets at fair value through other comprehensive income Equity securities Total	Level 1 570,810 $ 98,235 111,799 780,844 $	Level 2 - $ - - - $	Level3 - $ 106,990 698,209 805,199 $	Total
				570,810 $ 205,225 810,008
				1,586,043 $

~56~

==> picture [449 x 350] intentionally omitted <==

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

December 31, 2020 Level 1 Level 2 Level 3 Total
Assets:
Recurring fair value measurements
Financial assets at fair value through
profit or loss
Domestic funds $ 320,248 $ - $ - $ 320,248
- -
Equity securities 106,990 106,990
Forward exchange contract - 171 - 171
Financial assets at fair value through other
comprehensive income
Equity securities 85,789 - 698,209 783,998
Total $ 406,037 $ 171 $ 805,199 $ 1,211,407
Liabilities:
Recurring fair value measurements
Financial liabilities at fair value through
profit or loss
Forward exchange contract $ - $ 799 $ - $ 799
June 30, 2020 Level 1 Level 2 Level 3 Total
Assets:
Recurring fair value measurements
Financial assets at fair value through
profit or loss
Domestic funds $ 169,759 $ - $ - $ 169,759
- -
Equity securities 106,853 106,853
Forward exchange contract - 350 - 350
Financial assets at fair value through other
comprehensive income 74,149 - 799,192 873,341
Total $ 243,908 $ 350 $ 906,045 $ 1,150,303
----- End of picture text -----

E. The methods and assumptions the Group used to measure fair value are as follows:
(a) The instruments the Group used market quoted prices as their fair values (that is, Level 1) are composed of: listed shares using closing price and open-end fund using net asset value at balance sheet date.
(b) Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques or by reference to counterparty quotes.
(c) When assessing non-standard and low-complexity financial instruments, the Group adopts valuation technique that is widely used by market participants. The inputs used in the valuation method to measure these financial instruments are normally observable in the market. Forward exchange contracts are usually valued based on the current forward exchange rate.
(d) The output of valuation model is an estimated value and the valuation technique may not be able to capture all relevant factors of the Group’s financial and non-financial instruments. Therefore, the estimated value derived using valuation model is adjusted accordingly with additional inputs. In accordance with the Group’s management policies and relevant control procedures relating to the valuation models used for fair value measurement, management believes adjustment to valuation is necessary in order to reasonably represent the fair value of financial and non-financial instruments at the consolidated balance sheet. The inputs and

~57~

pricing information used during valuation are carefully assessed and adjusted based on current market conditions.

F. For the six months ended June 30, 2021 and 2020, there was no transfer between Level 1 and Level 2.
G. The following chart is the movement of Level 3 financial instruments of equity securities for the six months ended June 30, 2021 and 2020.

		2021			2020
At January 1	$	805,199		$	951,466
Losses recognised in other
comprehensive income		-	(		41,821)
Sold in the period		-	(		3,600)
At June 30	$	805,199		$	906,045

H. For the six months ended June 30, 2021and 2020, there was no transfer into or out from Level 3.
I. Financial segment is in charge of valuation procedures for fair value measurements being categorized within Level 3, which is to verify independent fair value of financial instruments. Such assessment is to ensure the valuation results are reasonable by applying independent information to make results close to current market conditions and reviewing periodically.
J. The following is the qualitative information of significant unobservable inputs and sensitivity analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair value measurement:

Unlisted shares Unlisted shares Non-derivative equity:	Fair value at June 30,2021 698,209 $ 106,990	Valuation technique Market comparable companies Net asset value	Significant unobservable input Price to earnings ratio multiple Discount for lack of volatility Discount for lack of volatility	Range (weighted average) 0.94~2.3 30%~35% 19.25%	Relationship of inputs to fairvalue The higher the multiple, the higher the fair value. The higher the discount for lack of marketability, the lower the fair value. The higher the discount for lack of marketability, the lower the fair value.

~58~

Unlisted shares Unlisted shares Non-derivative equity: Unlisted shares Unlisted shares Non-derivative equity:	Fair value at December 31,2020 698,209 $ 106,990 Fair value at June 30, 2020 799,192 $ 106,853	Valuation technique Market comparable companies Net asset value Valuation technique Market comparable companies Net asset value		Significant unobservable input	Range (weighted Relationship of inputs to average) fair value 0.94~2.3 The higher the multiple, the higher the fair value. 30%~35% The higher the discount for lack of marketability, the lower the fair value. 19.25% The higher the discount for lack of marketability, the lower the fair value. Range (weighted Relationship of inputs to average) fair value 0.75~1.09 The higher the multiple, the higher the fair value. 25%~35% The higher the discount for lack of marketability, the lower the fair value. 19.25% The higher the discount for lack of marketability, the lower the fair value.

~59~

K. The Group has carefully assessed the valuation models and assumptions used to measure fair value; therefore, the fair value measurement is reasonable. However, use of different valuation models or assumptions may result in difference measurements. The following is the effect of profit or loss or of other comprehensive income from financial assets and liabilities categorised within Level 3 if the inputs used to valuation models have changed:

Input	Change	Favourable Unfavourable Favourable Unfavourable change change change change 1,275 $ 1,275) ($ 15,582 $ 15,582) ($ June30,2021 Recognised in other Recognised inprofit or loss comprehensive income Favourable Unfavourable Favourable Unfavourable change change change change 1,275 $ 1,275) ($ 15,582 $ 15,582) ($ December31,2020 Recognised in other Recognised in profit or loss comprehensive income June30,2020	Favourable Unfavourable Favourable Unfavourable change change change change 1,275 $ 1,275) ($ 15,582 $ 15,582) ($ June30,2021 Recognised in other Recognised inprofit or loss comprehensive income Favourable Unfavourable Favourable Unfavourable change change change change 1,275 $ 1,275) ($ 15,582 $ 15,582) ($ December31,2020 Recognised in other Recognised in profit or loss comprehensive income June30,2020
Discount of lack of volatility Input	±5% Change
Discount of lack of volatility Input	±5% Change
		Favourable Unfavourable change change 1,274 $ 1,274) ($ Recognised inprofit or loss	Favourable Unfavourable change change 13,874 $ 13,874) ($ Recognised in other comprehensive income
Discount of lack of volatility	±5%

’ (4) Explanation of the impact of the COVID 19 pandemic to the Group s operation in the second

quarter of 2021

With the ever-changing situation of the global pandemic, the global supply chains were impacted at different levels by the preventive measures against the pandemic and the stress on shipping. Moreover, the prices of raw materials have risen due to the strong demand to replenish inventories. The Group will continue to follow up the situation and timely adjust the countermeasures.

~60~

13. SUPPLEMENTARY DISCLOSURES

(1) Significant transactions information

A. Loans to others: None.
B. Provision of endorsements and guarantees to others: Please refer to table 1.
C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 2.
D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company’s paid-in capital: None.
E. Acquisition of real estate reaching $300 million or 20% of paid-in capital or more: None.
F. Disposal of real estate reaching $300 million or 20% of paid-in capital or more: None.
G. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 3.
H. Receivables from related parties reaching $100 million or 20% of paid-in capital or more: None.
I. Trading in derivative instruments undertaken during the reporting periods: None.
J. Significant inter-company transactions during the reporting periods: Amounts were insignificant and did not reach the Company’s disclosure threshold of $10,000.

(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China) ： Please refer to table 4.

(3) Information on investments in Mainland China

Basic information: Please refer to table 5.

(4) Information on major shareholders

Please refer to table 6.

14. SEGMENT INFORMATION

(1) General information

There was no significant change in the reporting period. Please refer to Note 14 in the consolidated financial statements for the year ended December 31, 2020.

(2) Segment information

The segment information provided to the Chief Operating Decision-Maker for the reportable segments is as follows:

	Three months ended June 30,2021	Three months ended June 30,2021
LED and Displays and Silicon Sensor Lighting Chips Group Group 1,183,481 $ 134,324 $ 266,818 $ 50,996) ($	Packaging Business Group 66,063 $ 2,595 $	Other segments - $ 8,723 $	Total
			1,383,868 $
			227,140 $

~61~

LED and Displays and Packaging Silicon Sensor Lighting Business Other Chips Group Group Group segments 1,072,126 $ 231,620 $ 70,802 $ 3,367 $ 122,034 $ 11,536) ($ 4,475 $ 17,221) ($ Three months ended June 30,2020 Six months ended June 30,2021	LED and Displays and Packaging Silicon Sensor Lighting Business Other Chips Group Group Group segments 1,072,126 $ 231,620 $ 70,802 $ 3,367 $ 122,034 $ 11,536) ($ 4,475 $ 17,221) ($ Three months ended June 30,2020 Six months ended June 30,2021	LED and Displays and Packaging Silicon Sensor Lighting Business Other Chips Group Group Group segments 1,072,126 $ 231,620 $ 70,802 $ 3,367 $ 122,034 $ 11,536) ($ 4,475 $ 17,221) ($ Three months ended June 30,2020 Six months ended June 30,2021	Total
			1,377,915 $
			97,752 $

LED and Displays and Packaging Silicon Sensor Lighting Business Other Chips Group Group Group segments 2,535,442 $ 298,804 $ 133,033 $ - $ 577,387 $ 77,812) ($ 6,592 $ 20,349 $ Six months ended June 30,2020			Total
			2,967,279 $
			526,516 $

LED and Silicon Sensor Chips Group 1,929,812 $ 250,775 $	Displays and Lighting Group 481,973 $ 6,019 $	Packaging Business Other Group segments 121,991 $ 8,218 $ 2,049 $ 6,542) ($	Total
			2,541,994 $
			252,301 $

(3) Reconciliation for segment income (loss)

A. The revenue from external customers reported to the Chief Operating Decision-Maker is measured in a manner consistent with that in the statement of comprehensive income.
B. A reconciliation of reportable segment income or loss to the income (loss) before tax from continuing operations is measured in a manner consistent with that in the statement of comprehensive income.

~62~

Opto Tech Corporation and subsidiaries

Provision of endorsements and guarantees to others

Table 1

Expressed in thousands of TWD

Six months ended June 30, 2021

Number (Note 1)	Endorser/ guarantor	Party being endorsed/guaranteed	Party being endorsed/guaranteed	Limit on endorsements/ guarantees provided for a single party (Note 3)	Maximum outstanding endorsement/ guarantee amount as of June 30, 2021	Outstanding endorsement/ guarantee amount at June 30, 2021	Actual amount drawn down	Amount of endorsements/ guarantees secured with collateral	Ratio of accumulated endorsement/ guarantee amount to net asset value of the endorser/ guarantor company	Ceiling on total amount of endorsements/ guarantees provided (Note 3)	Provision of endorsements/ guarantees by parent company to subsidiary	Provision of endorsements/ guarantees by subsidiary to parent company	Provision of endorsements/ guarantees to the party in Mainland China	Remark
		Company name	Relationship with the endorser/ guarantor (Note2)
0	Opto Tech Corp.	Opto Plus Technology Co., Ltd.	3	1,493,202 $	100,048 $	97,685 $	88,703 $	-	1.31%	3,733,006	Y	N	Y	-

Note 1: The numbers filled in for the endorsements/guarantees provided by the Company or subsidiaries are as follows:

(1)The Company is “0”.
(2)The subsidiaries are numbered in order starting from “1”.

Note 2: Relationship with the endorser/guarantor is classified into the following categories:

(1) Having business relationship.
(2) The Company owns more than 50% voting shares of the endorsed/guaranteed company.
(3) The Company and its subsidiaries jointly own more than 50% voting shares of the endorsed/guaranteed company.
(4) The endorsed/guaranteed company directly or indirectly owns more than 50% voting shares of the endorser/guarantor.
(5) Mutual guarantees in the same trade due to construction undertaking pursuant to the contracts.
(6) Due to joint venture, each shareholder provides guarantees for the company in proportion to its ownership.
Note 3: The calculation and amount of ceiling on providing endorsement / guarantee to others shall be disclosed. It there was contingent loss recogniSed in the financial statements, the recognised amount shall be disclosed Under the Company’s “Procedures for Provision of Endorsements and Guarantees”
, the Company’s total guarantees and endorsements to others should not exceed 50% of the Company’s net asset value, and total guarantees and
endorsements provided for a single party should not exceed 20% of the Company’s net asset value. The calculation is shown below:
(1) $7,466,011 thousand dollars × 20% ＝ $1,493,202 thousand dollars
(2) $7,466,011 thousand dollars × 50% ＝ $3,733,006 thousand dollars

Table 2

Expressed in thousands of TWD

Opto Tech Corporation and subsidiaries

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

June 30, 2021

Securities held by	Type of marketable securities	Name of marketable securities	Relationship with the securities issuer	General ledger account		As of June	30,2021		Remark
					Number of shares	Book value	Ownership (%)	Fair value
Opto Tech Corp. `〞` `〞` `〞` `〞` `〞` `〞` Ho Chung Investment Co., Ltd. Dongzhen Asset Co., Ltd. Opto Tech Corp. `〞` `〞` `〞` `〞` `〞` `〞`	Stock `〞` `〞` `〞` `〞` `〞` `〞` `〞` `〞` Fund `〞` `〞` `〞` `〞` `〞` `〞`	AXT, Inc. Nichia Corp. Viking Tech Corporation Lu Zhu Development Co., Ltd. Giga Epitaxy Technology Corp. Shin-Etsu Opto Electronic Co., Ltd. Top Increasing Technology Co., Ltd. Opto Tech Corp. United Microelectronics Corp. Jih Sun Money Market fund Taishin 1699 Money Market fund TCB Taiwan Money Market Fund FSITC Taiwan Money Market fund Franklin Templeton Sinoam Money Market Fund Capital Money Market Union Money Market	None. This company is the parent company of Nichia Taiwan Corp. None. None. None. None. None. Parent company None. None. None. None. None. None. None. None.	Financial assets at fair value through profit or loss Financial assests at fair value through other comprehensive income `〞` Financial assets at fair value through profit or loss Financial assests at fair value through other comprehensive income `〞` Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss `〞` `〞` `〞` `〞` `〞` `〞` `〞` `〞`	124,100 10,000 2,873,994 13,808,725 4,950,491 2,000,000 10,000,000 754,543 1,850,000 5,391,133 4,477,862 4,885,150 5,965,267 9,247,290 5,837,819 7,134,275	- $ 585,253 111,799 106,990 16,391 96,565 - 19,279 98,235 80,712 61,183 50,055 92,190 96,562 95,053 95,055	- 0.45 2.45 6.38 15.00 10.00 16.67 0.20 0.14 None None None None None None None	- $ 585,253 111,799 106,990 16,391 96,565 - 19,279 98,235 80,712 61,183 50,055 92,190 96,562 95,053 95,055	Note None None None None None None None None None None None None None None

Note : The 124,000 shares of AXT, Inc. which are owned by the Company, are preferred stocks.

Opto Tech Corporation and subsidiaries

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

Six months ended June 30, 2021

Table 3

Expressed in thousands of TWD

Purchaser/seller	Counterparty	Relationship with the counterparty		Transaction	Transaction		Differences in transaction terms compared to third party transactions	Differences in transaction terms compared to third party transactions	Notes/accounts	receivable(payable)	Remark
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable(payable)
Opto Tech Corp.	Nichia Taiwan Corp.	This company's subsidiary is the director of the Company.	Sales	181,804) ($	(6.13%)	45 days	Equivalent to general transaction	-	25,742 $	1.99%	None

Opto Tech Corporation and subsidiaries

Information on investees

Expressed in thousands of TWD

Six months ended June 30, 2021

Table 4

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at June 30,2021	Shares held as at June 30,2021	Shares held as at June 30,2021	Net income (loss) of the investee	Investment income (loss) recognised by investor	Remark
				Balance as of June 30,2021	Balance as of December 31, 2020	Number of shares	Ownership (%)	Book value
Opto Tech Corp. Opto Tech Corp. Opto Tech Corp. Opto Tech Corp. Opto Tech Corp. Ho Chung Investment Co., Ltd. CS Bright Corporation Bright Investment International Ltd.	Ho Chung Investment Co., Ltd. CS Bright Corporation Bright Investment International Ltd. Everyung Investment Ltd. Dongzhen Asset Co., Ltd. VML TECHNOLOGIES B.V. Bright Investment International Ltd. Everyung Investment Ltd.	Taiwan Taiwan B.V. I. Samoa Taiwan Netherlands B.V. I. Samoa	Investment business Manufacture and Sales of Displays, SMD Lamps a nd other LED related products International business International trading Investment business Manufacture and Design of system products Investment business Investment business	258,348 $ 50,170 171,332 42,343 400,000 37,436 - 168,421	258,348 $ 50,170 - 42,343 29,800 37,436 171,332 168,421	1,298,800 4,993,562 5,100,000 5,000,000 40,000,000 6,000 - 5,000,000	100 99.87 100 50 100 25 100 50	22,342 $ 149,011 47,283 47,388 417,149 5,528 - 47,388	1,957) ($ 67,244 5,164 10,335 17,185 1,178 5,164 10,335	485) ($ 1,579 767 5,168 17,185 295 4,457 5,168	Subsidiary of the Company Subsidiary of the Company (Note) Subsidiary of the Company Subsidiary of the Company Subsidiary of the Company Investment accounted for using equity method Indirect subsidairy Indirect subsidairy

Note: The Board of Directors of the Company resolved to process liquidation through the company on September 10, 2020 . The liquidation was still in process.

Expressed in thousands of TWD

Opto Tech Corporation and subsidiaries

Information on investments in Mainland China

Six months ended June 30, 2021

Table 5

Investee in Mainland China	Main business activities	Paid-in capital	Investment method (Note 1)	Accumulated amount of remittance to Mainland China as of January 1, 2021	Amount remitted to Mainland China during the period	Amount remitted back to Taiwan during the period	Accumulated amount of remittance to Mainland China as of Jume 30, 2021	Net income of investee for the six months ended Jume 30,2021	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the six months Jume 30, 2021 (Note 2)	Book value of investments in Mainland China as of Jume 30, 2021	Accumulated amount of investment income remitted back to Taiwan as of Jume 30,2021	Remark
Opto Plus Technology Co., Ltd.	Manufacture and Sales of LED and Electronic products	317,341	(2)	317,341 $	- $	- $	317,341 $	10,335 $	100%	10,335 $	94,775 $	- $

Note 1: The investment methods are classified into three categories as follows:

(1) Directly investing in the investee company in Mainland China.

(2) Through investing in an existing company in the third area, which then invested in the investee company in Mainland China. (Opto Tech (Cayman) Co., Ltd. invests in Opto Tech (Suzhou) Co., Ltd. and Everyung Investment Ltd. invests in Opto Plus Technology Co., Ltd.)

(3) Others.

Note 2: The investment income or loss was recognised by indirect weighted ownership based on the financial statements of these investees which were not reviewed by the independent auditors of the parent company for the corresponding periods.

Investments in Mainland China for the six months ended June 30, 2021:

Name of company	Accumulated amount of remittance from Taiwan to Mainland China as ofJume30,2021	Investment amount approved by the Investment Commission of the Ministry of Economic Affairs(MOEA)	Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA
Opto Tech Corp.	$ 317,341	$ 317,849	$ 4,479,607

Opto Tech Corporation and its subsidiaries Major shareholders information June 30, 2021

Table 6

Name of major shareholders		Shares
	Number of share held	Ownership (%)
Nichia Taiwan Corp	28,811,822	7.60%

Description: If a company applies to Taiwan Depository & Clearning Corporation for the information of the table, the following can be explained in the notes of the table. (a) The major shareholders information was from the data that the Company issued common shares(including treasury shares) and preference shares in dematerialised form which were registered and held by the shareholders above 5% on the last operating date of each quarter and was calculated by Taiwan Depository & Clearing Corporation.The share capital which was recorded in the financial statements is different form the actual number of shares issued in dematerialised form because of the different calculation basis or the differences.

(b) If the aforementioned data contains shares which were kept at the trust by the shareholders, the data was disclosed as separate account of client which was set by the trustee. As for the shareholder who reports share equity as an insider whose shareholding ratio is greater than 10% in accordance with Securities and Exchange Act, the shareholding ratio includes the self-owned shares and trusted shares, at the same time, and persons who have power to decide how to allocate the trust assets. For the information of reported share equity of insider, please refer to Market Observation Post System.

AI assistant

TASC — Interim / Quarterly Report 2021

52015_rns_2021-12-14_6adb5cfc-3b48-4f5e-ba9d-4e87b7e19d15.pdf

OPTO TECH CORPORATION AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

INDEPENDENT AUDITORS’ REVIEW REPORT TRANSLATED FROM CHINESE

Introduction

Scope of review

Basis for qualified conclusion

Qualified conclusion

OPTO TECH CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

JUNE 30, 2021, DECEMBER 31, 2020 AND JUNE 30, 2020

OPTO TECH CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

JUNE 30, 2021, DECEMBER 31, 2020 AND JUNE 30, 2020

OPTO TECH CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2021 AND 2020

OPTO TECH CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2021 AND 2020

OPTO TECH CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY SIX MONTHS ENDED JUNE 30, 2021 AND 2020

OPTO TECH CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

SIX MONTHS ENDED JUNE 30, 2021 AND 2020

OPTO TECH CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

SIX MONTHS ENDED JUNE 30, 2021 AND 2020

OPTO TECH CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 2021 AND 2020

1. HISTORY AND ORGANIZATION

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

STATEMENTS AND PROCEDURES FOR AUTHORIZATION

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

the Group

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(3) Basis of consolidation

B. Subsidiaries included in the consolidated financial statements:

(4) Employee benefits

(5) Income tax

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

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

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

(3) Financial assets at amortised cost

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

(5) Notes and accounts receivable

(6) Inventories

(7) Investments accounted for using equity method

(8) Property, plant and equipment

2021

(10) Investment property

(11) Intangible assets

(12) Short-term borrowings

(13) Other payables

- (14) Long term borrowings

(15) Pensions

(16) Provisions

(17) Share capital

(18) Capital reserve

(19) Retained earnings

(20) Other equity items

(22) Interest income

Three months ended June 30

(23) Other income

(24) Other gains and losses

(25) Finance costs

(26) Expenses by nature

(27) Employee benefit expense

(28) Income tax

(29) Earnings per share

7. RELATED PARTY TRANSACTIONS

(1) Names of related parties and relationship

(2) Significant transactions and balances with related parties

A. Operating revenue:

B. Purchases:

C. Accounts receivable:

D. Accounts payable:

G. Others

(3) Key management compensation

8. PLEDGED ASSETS

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT

COMMITMENTS

(3) Operating lease commitments:

TASC Interim / Quarterly Report 2021