TECO — Interim / Quarterly Report 2020

Dec 25, 2020

TECO ELECTRIC & MACHINERY CO., LTD. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

REVIEW REPORT OF INDEPENDENT

ACCOUNTANTS

MARCH 31, 2020 AND 2019

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

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REVIEW REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE

To TECO Electric & Machinery Co., Ltd.

Introduction

We have reviewed the accompanying consolidated balance sheets of Teco Electric & Machinery Co., Ltd. and subsidiaries (the “Group”) as at March 31, 2020 and 2019, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the three-month periods then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies. Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and International Accounting Standard 34, “Interim Financial Reporting” as endorsed by the Financial Supervisory Commission. Our responsibility is to express a conclusion on these consolidated financial statements based on our reviews.

Scope of Review

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.

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Basis for Qualified Conclusion

As described in Notes 4(3) and 6(7) to the consolidated financial statements, the financial statements of certain consolidated subsidiaries and investees accounted for under equity method were not reviewed by independent accountants. Those statements reflect total assets (including investments accounted for under the equity method) of NT$31,732,992 thousand and NT$31,371,579 thousand, constituting 31% and 32% of consolidated total assets as of March 31, 2020 and 2019, respectively, total liabilities (including credit balance of investments accounted for under equity method) of NT$3,906,870 thousand and NT$4,305,633 thousand, constituting 9% and 11% of consolidated total liabilities as of March 31, 2020 and 2019, respectively, and comprehensive income (including share of profit or loss and share of other comprehensive income of associates and joint ventures accounted for under the equity method) of NT$90,074 thousand and NT$198,374 thousand, constituting (11%) and 6% of the consolidated total comprehensive income for the three-month periods then ended, respectively. These amounts and the related information disclosed in Note 13 were based on the unreviewed financial statements of such consolidated subsidiaries and investee companies.

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 certain consolidated subsidiaries and investees accounted for using equity method been reviewed by independent accountants, 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 March 31, 2020 and 2019, and of its consolidated financial performance and its consolidated cash flows for the three-month periods then ended in accordance with “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and International Accounting Standard 34, “Interim Financial Reporting” as endorsed by the Financial Supervisory Commission.

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Wu, Yu-Lung

[Chou, Chien-Hung ]

For and on behalf of PricewaterhouseCoopers, Taiwan May 7, 2020

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

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

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TECO ELECTRIC & MACHINERY CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS MARCH 31, 2020, DECEMBER 31, 2019 AND MARCH 31, 2019

(Expressed in thousands of New Taiwan dollars) (The consolidated balance sheets as of March 31, 2020 and 2019 are reviewed, not audited)

Assets	Notes	March31,2020	% 23 - 1 1 1 - 8 - 1 - 10 1 1 47 3 13 - 4 16 7 3 5 1 1 53 100	December31,2019 AMOUNT % $ 19,111,371 19 126,945 - 1,065,729 1 1,521,080 2 1,118,731 1 1,457 - 8,780,047 9 232,293 - 497,877 - 81,369 - 9,853,585 10 662,456 1 893,636 1 43,946,576 44 2,291,217 2 14,473,017 15 377,256 1 3,897,316 4 16,742,830 17 7,119,164 7 2,762,570 3 5,200,634 5 1,346,817 1 937,007 1 55,147,828 56 $ 99,094,404 100	March31,2019
		AMOUNT $ 23,759,597 162,823 914,780 1,542,135 942,396 9,092 8,037,643 298,559 538,726 115,376 9,832,914 634,774 873,576 47,662,391 2,767,075 13,648,482 409,410 3,912,089 16,269,800 7,017,042 2,897,371 5,098,123 1,352,394 989,605 54,361,391 $ 102,023,782		AMOUNT $ 19,111,371 126,945 1,065,729 1,521,080 1,118,731 1,457 8,780,047 232,293 497,877 81,369 9,853,585 662,456 893,636 43,946,576 2,291,217 14,473,017 377,256 3,897,316 16,742,830 7,119,164 2,762,570 5,200,634 1,346,817 937,007 55,147,828 $ 99,094,404	AMOUNT $ 17,519,287 323,631 1,119,460 1,326,622 1,016,665 10,898 8,937,506 226,644 419,726 94,148 11,492,629 557,939 1,075,959 44,121,114 2,229,874 13,517,552 183,428 3,896,048 17,162,909 7,394,241 2,799,482 5,333,841 1,344,429 890,131 54,751,935 $ 98,873,049	%
Current assets 1100 Cash and cash equivalents 1110 Financial assets at fair value through profit or loss - current 1120 Current financial assets at fair value through other comprehensive income 1140 Current contract assets 1150 Notes receivable, net 1160 Notes receivable - related parties 1170 Accounts receivable, net 1180 Accounts receivable - related parties 1200 Other receivables 1210 Other receivables - related parties 130X Inventories, net 1410 Prepayments 1470 Other current assets 11XX Total current assets Total Non-current assets 1510 Financial assets at fair value through profit or loss - non- current 1517 Non-current financial assets at fair value through other comprehensive income 1535 Non-current financial assets at amortised cost, net 1550 Investments accounted for under the equity method 1600 Property, plant and equipment, net 1755 Right-of-use assets 1760 Investment property, net 1780 Intangible assets 1840 Deferred income tax assets 1900 Other non-current assets 15XX Non-current assets 1XXX Total assets	6(1) and 8 6(2) 6(3) 6(5) and 8 7 6(5) 7 7 6(6) 6(1) and 8 6(2) 6(3) and 8 6(4) and 8 6(7) 6(8) and 8 6(9) and 8 6(10) 6(11) 6(28) 6(12) and 8					18 - 1 1 1 - 9 - 1 - 12 1 1
						45
						2 14 - 4 17 8 3 5 1 1
						55
						100

(Continued)

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TECO ELECTRIC & MACHINERY CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS MARCH 31, 2020, DECEMBER 31, 2019 AND MARCH 31, 2019

(Expressed in thousands of New Taiwan dollars) (The consolidated balance sheets as of March 31, 2020 and 2019 are reviewed, not audited)

Liabilities andEquity	Notes	March31,2020	% 6 - 1 - - 6 - 6 1 - 1 3 1 25 1 7 - 2 5 2 17 42 19 7 7 4 14 2 - 53 5 58 100	December31,2019 AMOUNT % $ 1,857,637 2 50 - 1,001,440 1 284,661 - 81,176 - 6,783,872 7 128,569 - 4,676,588 5 584,071 1 273,575 - 475,786 1 3,410,798 3 735,603 1 20,293,826 21 1,000,000 1 6,673,954 7 125,014 - 2,400,752 2 4,743,306 5 2,152,762 2 17,095,788 17 37,389,614 38 19,676,929 20 7,389,577 7 6,702,463 7 3,640,779 4 16,047,563 16 3,570,756 3 ( 321,563) - 56,706,504 57 4,998,286 5 61,704,790 62 $ 99,094,404 100	March31,2019	% 2 - 1 - - 7 - 4 1 - 1 1 1 18 4 8 - 2 5 2 21 39 20 7 7 4 16 3 ( 1 ) 56 5 61 100
		AMOUNT $ 6,083,959 1,600 1,367,761 246,532 75,335 6,010,726 88,697 6,087,122 606,640 277,167 472,466 3,310,836 757,845 25,386,686 1,000,000 7,116,574 139,448 2,432,736 4,599,188 1,972,929 17,260,875 42,647,561 19,676,929 7,430,304 6,702,463 3,640,779 14,537,874 2,206,410 ( 511,710 ) 53,683,049 5,693,172 59,376,221 $ 102,023,782		AMOUNT $ 1,857,637 50 1,001,440 284,661 81,176 6,783,872 128,569 4,676,588 584,071 273,575 475,786 3,410,798 735,603 20,293,826 1,000,000 6,673,954 125,014 2,400,752 4,743,306 2,152,762 17,095,788 37,389,614 19,676,929 7,389,577 6,702,463 3,640,779 16,047,563 3,570,756 ( 321,563) 56,706,504 4,998,286 61,704,790 $ 99,094,404	AMOUNT $ 1,947,764 - 1,007,853 60,094 88,880 6,714,585 72,280 4,368,642 774,787 247,754 460,782 1,146,799 834,871 17,725,091 4,000,000 7,286,112 110,208 2,275,239 4,856,007 2,083,323 20,610,889 38,335,980 20,026,929 7,647,223 6,387,454 3,640,779 15,579,424 3,514,348 ( 997,403) 55,798,754 4,738,315 60,537,069 $ 98,873,049
Current liabilities 2100 Short-term borrowings 2120 Financial liabilities at fair value through profit or loss - current 2130 Current contract liabilities 2150 Notes payable 2160 Notes payable - related parties 2170 Accounts payable 2180 Accounts payable - related parties 2200 Other payables 2230 Current income tax liabilities 2250 Provisions for liabilities - current 2280 Current lease liabilities 2320 Long-term liabilities, current portion 2399 Other current liabilities, others 21XX Total current liabilities Non-current liabilities 2530 Corporate bonds payable 2540 Long-term borrowings 2550 Provisions for liabilities - non- current 2570 Deferred income tax liabilities 2580 Non-current lease liabilities 2600 Other non-current liabilities 25XX Total non-current liabilities 2XXX Total liabilities Equity attributable to owners of parent Share capital 3110 Common stock Capital surplus 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings Other equity interest 3400 Other equity interest 3500 Treasury stocks 31XX Equity attributable to owners of the parent 36XX Non-controlling interest 3XXX Total equity Significant contingent liabilities and unrecognized contract commitments Significant events after the balance sheet date 3X2X Total liabilities and equity	6(13) and 8 6(14) 6(23) 7 7 6(15) 6(28) 6(16)(17) and 8 6(16) 6(17) and 8 6(28) 6(7)(18) 6(19) 6(20) 6(21) 6(22) 6(19) and 8 6(32) 9 11

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

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TECO ELECTRIC & MACHINERY CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2020 AND 2019 (Expressed in thousands of New Taiwan dollars, except earnings per share) (REVIEWED, NOT AUDITED)

Items

Three-month periods ended March 31 2020 2019 Notes AMOUNT % AMOUNT % 6(10)(23) and 7 $ 10,664,930 100 $ 11,707,047 100 6(6)(8)(9)(18)(27 ) and 7 ( 8,017,290) ( 75) ( 8,803,191 ) ( 75) 2,647,640 25 2,903,856 25 ( 8,801 ) - ( 8,305 ) - 8,263 - 9,160 - 2,647,102 25 2,904,711 25 6(8)(9)(18)(27) ( 1,005,914 ) ( 10) ( 1,099,614 ) ( 10 ) ( 575,355 ) ( 5) ( 603,410 ) ( 5 ) ( 253,336 ) ( 2) ( 275,751 ) ( 2 ) 12(2) ( 3,767) - 142 - ( 1,838,372) ( 17) ( 1,978,633 ) ( 17) 808,730 8 926,078 8 6(3)(4)(10)(24) 161,407 1 180,897 2 6(2)(14)(25) and 7 ( 238,062 ) ( 2) ( 73,642 ) ( 1 ) 6(9)(26) ( 65,673 ) ( 1) ( 72,031 ) ( 1 ) 6(7) ( 28,184) - 8,130 - ( 170,512) ( 2) 43,354 - 638,218 6 969,432 8 6(28) ( 99,013) ( 1) ( 263,010 ) ( 2) $ 539,205 5 $ 706,422 6

4000 Sales revenue 5000 Operating costs 5900 Net operating margin 5910 Unrealized loss from sales 5920 Realized profit from sales 5950 Net operating margin Operating expenses 6100 Selling expenses 6200 General and administrative expenses 6300 Research and development expenses 6450 Impairment loss (impairment gain and reversal of impairment loss) determined in accordance with IFRS 9 6000 Total operating expenses 6900 Operating profit Non-operating income and expenses 7010 Other income 7020 Other gains and losses 7050 Finance costs 7060 Share of profit of associates and joint ventures accounted for under the equity method 7000 Total non-operating income and expenses 7900 Profit before income tax 7950 Income tax expense 8200 Profit for the period

(Continued)

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TECO ELECTRIC & MACHINERY CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2020 AND 2019 (Expressed in thousands of New Taiwan dollars, except earnings per share) (REVIEWED, NOT AUDITED)

Items	Three-month periods ended March 31 2020 2019 Notes AMOUNT % AMOUNT ( $ 8,868 ) - $ - 6(3) ( 960,270 ) ( 9) 2,282,569 ( 4,651 ) - 7,113 ( 973,789 ) ( 9) 2,289,682 6(22) ( 424,101 ) ( 4) 200,309 6(28) 21,126 - ( 1,773) ( 402,975 ) ( 4) 198,536 ( $ 1,376,764 ) ( 13) $ 2,488,218 ( $ 837,559 ) ( 8) $ 3,194,640 $ 446,995 4 $ 634,584 92,210 1 71,838 $ 539,205 5 $ 706,422 ( $ 926,019 ) ( 9) $ 3,065,154 88,460 1 129,486 ( $ 837,559 ) ( 8) $ 3,194,640 6(29) $ 0.23 $ $ 0.23 $	Three-month periods ended March 31	Three-month periods ended March 31	% - 19 - 19 2 - 2 21 27 5 1 6 26 1 27 0.32 0.32
		2020	2019
			AMOUNT $ - 2,282,569 7,113 2,289,682 200,309 1,773) 198,536 $ 2,488,218 $ 3,194,640 $ 634,584 71,838 $ 706,422 $ 3,065,154 129,486 $ 3,194,640 $
Other comprehensive income Other comprehensive income that will not be reclassified to profit or loss 8311 Other comprehensive loss, before tax, actuarial losses on defined benefit plans 8316 Total expenses, by nature 8320 Share of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that will not be reclassified to profit or loss 8310 Components of other comprehensive (loss) income that will not be reclassified to profit or loss Other comprehensive income that will be reclassified to profit or loss 8361 Currency translation differences of foreign operations 8399 Income tax relating to the components of other comprehensive income that will be reclassified 8360 Components of other comprehensive (loss) income that will be reclassified to profit or loss 8300 Other comprehensive (loss) income for the period 8500 Total comprehensive (loss) income for the period Profit attributable to: 8610 Owners of the parent 8620 Non-controlling interest Comprehensive (loss) income attributable to: 8710 Owners of the parent 8720 Non-controlling interest Earnings per share (in dollars) 9750 Basic earnings per share 9850 Diluted earnings per share
			$

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

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TECO ELECTRIC & MACHINERY CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY THREE-MONTH PERIODS ENDED MARCH 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

(REVIEWED, NOT AUDITED)

For the three-month period ended March 31, 2019 Balance at January 1, 2019 Effect of retrospective application Balance at 1 January after adjustments Profit for the period Other comprehensive income for the period Total comprehensive income Reacquisition of treasury shares Effect of changes in net equity of associates and joint ventures accounted for under the equity method Changes in non-controlling interests Disposal of investment in equity instrument at fair value through other comprehensive income Balance at March 31, 2019 For the three-month period ended March 31, 2020 Balance at January 1, 2020 Profit for the period Other comprehensive loss for the period Total comprehensive income (loss) Appropriations of 2019 earnings Cash dividents declared Acquisition of parent company's share by subsidiaries recognized as treasury share Transactions with non-controlling interest Changes in other non-controlling equity Proceeds from capital increase of non-controlling interests Disposal of investment in equity instrument at fair value through other comprehensive income Balance at March 31, 2020	Notes								Equityatt	rib	utable to owners of t	heparent	heparent	heparent	heparent						Non-controlling interest		Total equity
			Share capital - common stock		Capital surplus				Retained earnings			Otherequityinterest				Treasurystocks			Total
							Legal reserve		Special reserve		Unappropriated retained earnings	Financial statements translation differences of foreign operations			Unrealised gains (losses) from financial assets measured at fair value through other comprehensive income
	6(22) 6(3)(22) 6(22) 6(21) 6(19) 6(32) 6(32) 6(3)(22)		$ 20,026,929 - 20,026,929 - - - - - - - $ 20,026,929 $ 19,676,929 - - - - - - - - - $ 19,676,929		$ 7,647,215 - 7,647,215 - - - - 8 - - $ 7,647,223 $ 7,389,577 - - - - - 40,727 - - - $ 7,430,304		$ 6,387,454 - 6,387,454 - - - - - - - $ 6,387,454 $ 6,702,463 - - - - - - - - - $ 6,702,463		$ 3,640,779 - 3,640,779 - - - - - - - $ 3,640,779 $ 3,640,779 - - - - - - - - - $ 3,640,779		$ 15,192,788 ( 269,228 ) 14,923,560 634,584 - 634,584 - - - 21,280 $ 15,579,424 $ 16,047,563 446,995 ( 8,917 ) 438,078 ( 1,948,016 ) - - - - 249 $ 14,537,874		($ 1,901,724 ) - ( 1,901,724 ) - 196,003 196,003 - - - - ($ 1,705,721 ) ($ 2,676,725 ) - ( 398,075 ) ( 398,075 ) - - - - - - ($ 3,074,800 )		$ 3,006,782 - 3,006,782 - 2,234,567 2,234,567 - - - ( 21,280 ) $ 5,220,069 $ 6,247,481 - ( 966,022 ) ( 966,022 ) - - - - - ( 249 ) $ 5,281,210		($ 321,563 ) - ( 321,563 ) - - - ( 675,840 ) - - - ($ 997,403 ) ($ 321,563 ) - - - - ( 190,147 ) - - - - ($ 511,710 )		$ 53,678,660 ( 269,228 ) 53,409,432 634,584 2,430,570 3,065,154 ( 675,840 ) 8 - - $ 55,798,754 $ 56,706,504 446,995 ( 1,373,014 ) ( 926,019 ) ( 1,948,016 ) ( 190,147 ) 40,727 - - - $ 53,683,049		$ 4,812,255 ( 208,421 ) 4,603,834 71,838 57,648 129,486 - - 4,995 - $ 4,738,315 $ 4,998,286 92,210 ( 3,750 ) 88,460 - - ( 40,727 ) ( 52,847 ) 700,000 - $ 5,693,172		$ 58,490,915 ( 477,649 ) 58,013,266 706,422 2,488,218 3,194,640 ( 675,840 ) 8 4,995 - $ 60,537,069 $ 61,704,790 539,205 ( 1,376,764 ) ( 837,559 ) ( 1,948,016 ) ( 190,147 ) - ( 52,847 ) 700,000 - $ 59,376,221

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

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TECO ELECTRIC & MACHINERY CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

(REVIEWED, NOT AUDITED)

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax Adjustments Adjustments to reconcile profit (loss) Net loss (gain) on financial assets at fair value through profit or loss Expected credit loss (gain) Net loss on financial liabilities at fair value through profit or loss Provision for decline in value of inventories Interest income Dividend income Interest expense Depreciation and amortization (Gain) loss on disposal of property, plant and equipment Share of loss (profit) of associates and joint ventures accounted for under the equity method Changes in operating assets and liabilities Changes in operating assets Financial assets at fair value through profit or loss - current Contract assets - current Notes receivable Notes receivable - related parties Accounts receivable Accounts receivable - related parties Other receivables Other receivables - related parties Inventories Prepayments Other current assets Changes in operating liabilities Contract liabilities - non-current Notes payable Notes payable - related parties Accounts payable Accounts payable - related parties Other payables Provisions for liabilities Other current liabilities Other non-current liabilities Cash inflow (outflow) generated from operations Interest received Interest paid Income tax paid Net cash flows from (used in) operating activities

Three-monthperiods ended March 31 Notes 2020 2019 $ 638,218 $ 969,432 6(2)(23)(25) 65,424 ( 93,455 ) 12(2) 3,767 ( 142 ) 6(14)(25) 1,616 - 6(6) 58,775 44,356 6(24) ( 70,738 ) ( 68,487 ) 6(24) ( 1,015 ) ( 124 ) 6(26) 65,673 72,031 6(8)(9)(10)(27) 484,803 513,299 6(25) ( 2,075 ) 551 6(7) 28,184 ( 8,130 ) ( 39,233 ) ( 117,798 ) ( 21,055 ) 23,616 176,388 47,290 ( 7,635 ) ( 8,257 ) 737,784 165,100 ( 66,266 ) 14,628 ( 40,849 ) ( 59,120 ) ( 34,007 ) ( 23,169 ) ( 38,104 ) ( 107,300 ) 27,682 ( 125,520 ) ( 13,017 ) ( 74,065 ) 366,321 108,125 ( 38,129 ) ( 13,011 ) ( 5,841 ) ( 47,994 ) ( 773,146 ) ( 803,239 ) ( 39,872 ) ( 17,767 ) ( 637,172 ) ( 428,514 ) 18,026 ( 25,239 ) 22,242 ( 9,612 ) ( 162,096 ) ( 154,535 ) 704,653 ( 227,050 ) 6(24) 70,738 68,487 6(26) ( 45,397 ) ( 46,471 ) 6(28) ( 28,911 ) ( 60,531 ) 701,083 ( 265,565 )

(Continued)

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TECO ELECTRIC & MACHINERY CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

(REVIEWED, NOT AUDITED)

CASH FLOWS FROM INVESTING ACTIVITIES Increase in current financial assets at fair value through other comprehensive income Decrease (increase) in pledged demand and fixed deposits Increase in non-current financial assets at fair value through profit or loss Increase in financial assets at fair value through other comprehensive income - non-current Disposal of non-current financial assets at fair value through other comprehensive income Increase in non-current financial assets at amortized cost Increase in investments accounted for under the equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of intangible assets Increase in other non-current assets Dividend received Net cash flows used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase (decrease) in short-term loans Increase in long-term loans Lease liabilities paid Treasury shares purchased Acquisition of the Company’s share by subsidiaries recognized as treasury share Proceeds from capital increase of non-controlling interests Net cash flows from (used in) financing activities Exchange rate effect Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period

Three-monthperiods ended March 31 Notes 2020 2019 ($ 54,059 ) ($ 5,494 ) 6(1) and 8 33,077 ( 21,254 ) ( 537,927 ) ( 8,094 ) ( 20,800 ) - 2,180 63,217 6(4) ( 32,154 ) ( 703 ) ( 5,109 ) - 6(8)(30) ( 87,606 ) ( 83,347 ) 3,981 6,537 - ( 15,147 ) ( 52,598 ) ( 41,802 ) 1,015 124 ( 750,000 ) ( 105,963 ) 6(31) 4,226,322 ( 46,596 ) 6(31) 342,658 782,065 6(9)(31) ( 134,743 ) ( 134,265 ) 6(19) - ( 675,840 ) 6(19) ( 190,147 ) - 6(32) 700,000 - 4,944,090 ( 74,636 ) ( 246,947 ) 429,885 4,648,226 ( 16,279 ) 19,111,371 17,535,566 $ 23,759,597 $ 17,519,287

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

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TECO ELECTRIC & MACHINERY CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2020 AND 2019

(REVIEWED, NOT AUDITED)

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

1. History and Organization

Teco Electric & Machinery Co., Ltd. (the “Company”) was incorporated as a company limited by shares under the provisions of the Company Act of the Republic of China (R.O.C.). The Company and its subsidiaries (collectively referred herein as the “Group”) are primarily engaged in the manufacture, installation, wholesale, retail of various types of electronic equipment, telecommunication equipment, office equipment, and home appliances.

1. The Date of Authorization for Issuance of the Financial Statements and Procedures for Authorization

These consolidated financial statements were reported to the Board of Directors on May 7, 2020.

3. Application of New Standards, Amendments and Interpretations

(1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS”) as endorsed by the Financial Supervisory Commission (“FSC”)

New standards, interpretations and amendments endorsed by the FSC effective from 2020 are as follows:

follows:
	Effective date by
	International Accounting
New Standards, Interpretations and Amendments	Standards Board
Amendment to IAS 1 and IAS 8, ‘Disclosure initiative-definition	January 1, 2020
of material’
Amendments to IFRS 3, ‘Definition of a business’	January 1, 2020
Amendments to IFRS 9, IAS 39 and IFRS 7, ‘Interest rate	January 1, 2020
benchmark reform’

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

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

None.

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

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

he Group None. FRSs issued by IASB but not yet endorsed by the FSC New standards, interpretations and amendments issued by IASB but not as endorsed by the FSC are as follows:	yet included in the IFRSs
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 IAS 1, ‘Classification of liabilities as current or noncurrent’	To be determined by International Accounting Standards Board January 1, 2021 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.

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4. Summary of Significant Accounting Policies

These consolidated financial statements adopt a simplified disclosure in accordance with the International Accounting Standard 34, “Interim financial reporting”. The principal accounting policies adopted are consistent with Note 4 in the consolidated financial statements for the year ended December 31, 2019, except for the compliance statement, basis of preparation, basis of consolidation and additional policies as set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

• (1) Compliance statement

• A. The consolidated financial statements of the Group have been prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and the International Accounting Standard 34, “Interim financial reporting” as endorsed by the FSC.

• B. These consolidated financial statements are to be read in conjunction with the consolidated financial statements for the year ended December 31, 2019.

• (2) Basis of preparation

• A. Except for the following items, these 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 recognized based on the net amount of pension fund assets less present value of defined benefit obligation.

• B. The preparation of financial statements in conformity with International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission (collectively referred herein as the “IFRSs”) requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.

• (3) Basis of consolidation

• A. Basis for preparation of consolidated financial statements:

  • Basis for preparation of these consolidated financial statements is the same as that for the preparation of the consolidated financial statements as of and for the year ended December 31, 2019.

~13~

B. Subsidiaries included in the consolidated financial statements:

Name of Investor	Name of Subsidiary	Main Business Activities		March 31,2020 December 31,2019 March 31,2019 100 100 100 100 100 100 60 60 60 100 100 100 100 100 100 100 100 100 100 100 100 83.53 83.53 92.63 - - 60 64.08 64.08 64.08 64.95 64.95 64.95 100 100 100 76.7 76.7 76.7 Ownership (%)	March 31,2020 December 31,2019 March 31,2019 100 100 100 100 100 100 60 60 60 100 100 100 100 100 100 100 100 100 100 100 100 83.53 83.53 92.63 - - 60 64.08 64.08 64.08 64.95 64.95 64.95 100 100 100 76.7 76.7 76.7 Ownership (%)	March 31,2020 December 31,2019 March 31,2019 100 100 100 100 100 100 60 60 60 100 100 100 100 100 100 100 100 100 100 100 100 83.53 83.53 92.63 - - 60 64.08 64.08 64.08 64.95 64.95 64.95 100 100 100 76.7 76.7 76.7 Ownership (%)	Description
				March 31,2020	December 31,2019
Teco Electric & Machinery Co., Ltd. Teco Electric & Machinery Co., Ltd. Teco Electric & Machinery Co., Ltd. Teco Electric & Machinery Co., Ltd. Teco Electric & Machinery Co., Ltd. Teco Electric & Machinery Co., Ltd. Teco Electric & Machinery Co., Ltd. Teco Electric & Machinery Co., Ltd. Teco Electric & Machinery Co., Ltd. Teco Electric & Machinery Co., Ltd. Teco Electric & Machinery Co., Ltd. Yatec Engineering Corporation Teco Electric & Machinery Co., Ltd.	Teco Holding USA Inc. United View Global Investment Co., Ltd. Temico International Pte.Ltd. Tesen Electric & Machinery Co., Ltd. Tong-An Assets Management & Development Co., Ltd. Teco Electric Europe Limited Teco Electric & Machinery (Pte) Ltd. Tong Dai Co., Ltd. Tong Tai Jung Co., Ltd. Teco Electro Devices Co., Ltd. Yatec Engineering Corporation Yatec Engineering (VN) Company Limited Taian (Subic) Electric Co., Inc.	Holding company Holding company Holding company Manufacturing and sales of home appliances Real estate business Distribution of motors Distribution of motors Distribution of motors Expanding the distribution of motors Manufacturing and sales of step-servo motor Development and maintenance of various electric appliances Development of various electric appliances Manufacturing and sales of switches		100 100 60 100 100 100 100 83.53 - 64.08 64.95 100 76.7	100 100 60 100 100 100 100 83.53 - 64.08 64.95 100 76.7	100 100 60 100 100 100 100 92.63 60 64.08 64.95 100 76.7	Note 1 Note 1 Note 1 Note 1 Note 1 Notes 1 and 2 Notes 1 and 2 Note 1 Note 1 Note 1 Note 1

~14~

Name of Investor	Name of Subsidiary	Main Business Activities		March 31,2020 December 31,2019 March 31,2019 84.73 84.73 84.73 66.85 66.85 66.85 100 100 100 98.53 98.53 98.5 86.67 86.67 86.67 63.52 63.52 63.52 49.01 49.01 67.11 100 100 100 100 100 100 100 100 100 73.54 73.54 73.54 100 100 100 Ownership (%)	March 31,2020 December 31,2019 March 31,2019 84.73 84.73 84.73 66.85 66.85 66.85 100 100 100 98.53 98.53 98.5 86.67 86.67 86.67 63.52 63.52 63.52 49.01 49.01 67.11 100 100 100 100 100 100 100 100 100 73.54 73.54 73.54 100 100 100 Ownership (%)	March 31,2020 December 31,2019 March 31,2019 84.73 84.73 84.73 66.85 66.85 66.85 100 100 100 98.53 98.53 98.5 86.67 86.67 86.67 63.52 63.52 63.52 49.01 49.01 67.11 100 100 100 100 100 100 100 100 100 73.54 73.54 73.54 100 100 100 Ownership (%)	Description
				March 31,2020	December 31,2019
Teco Electric & Machinery Co., Ltd. Teco Electric & Machinery Co., Ltd. Teco Electric & Machinery Co., Ltd. Teco Electric & Machinery Co., Ltd. Teco Electric & Machinery Co., Ltd. Teco Electric & Machinery Co., Ltd. Teco Electric & Machinery Co., Ltd. Teco Electric & Machinery Co., Ltd. Teco Electric & Machinery Co., Ltd. Teco Electric & Machinery Co., Ltd. Teco Electric & Machinery Co., Ltd. Teco Electric & Machinery Co., Ltd.	Taian-Etacom Technology Co., Ltd. Taian (Malaysia) Electric Sdn. Bhd. Micropac Worldwide (BVI) E-Joy International Co., Ltd. A-Ok Technical Co., Ltd. Tecom Co., Ltd. Information Technology Total Services Co., Ltd. Teco Smart Technologies Co., Ltd. Teco International Investment Co., Ltd. Tong-An Investment Co., Ltd. Tecnos International Consultant Co., Ltd. An-Tai International Investment Co., Ltd.	Manufacturing of busway and related components Manufacturing of switches International trading Wholesale and retail of electric appliances Repair of electric appliances Manufacturing and sales of touch-tone phone system and billing box Import sales, leases of franking machines and mail processing and delivery Commissioned sales of phone cards and IC cards, and production of data storage and processing equipment Various productions, investments in securities and construction of commercial buildings Various investments Business management consulting Various investments		84.73 66.85 100 98.53 86.67 63.52 49.01 100 100 100 73.54 100	84.73 66.85 100 98.53 86.67 63.52 49.01 100 100 100 73.54 100	84.73 66.85 100 98.5 86.67 63.52 67.11 100 100 100 73.54 100	Note 1 Note 1 Note 1 Note 1 Note 1 Note 6 Note 1 Note 1 Note 1 Note 1 Note 1

~15~

Name of Investor	Name of Subsidiary	Main Business Activities		March 31,2019 December 31,2019 March 31,2018 32.15 32.15 32.15 100 100 100 - - 86.83 100 100 100 52.75 52.75 52.75 60 60 60 100 100 100 100 100 100 Ownership (%)	March 31,2019 December 31,2019 March 31,2018 32.15 32.15 32.15 100 100 100 - - 86.83 100 100 100 52.75 52.75 52.75 60 60 60 100 100 100 100 100 100 Ownership (%)	March 31,2019 December 31,2019 March 31,2018 32.15 32.15 32.15 100 100 100 - - 86.83 100 100 100 52.75 52.75 52.75 60 60 60 100 100 100 100 100 100 Ownership (%)	Description
				March 31,2019	December 31,2019
Teco Electric & Machinery Co., Ltd. Teco Electric & Machinery Co., Ltd. Teco Electric & Machinery Co., Ltd. Teco Electric & Machinery Co., Ltd. Teco Electric & Machinery Co., Ltd. Teco Electric & Machinery Co., Ltd. Century Development Corporation Century Development Corporation	Taiwan Pelican Express Co., Ltd. Teco Technology (Vietnam) Co., Ltd. Teco Nanotech Co., Ltd. Eagle Holding Co. Century Development Corporation Teco.Sun Energy Co., Ltd. Century Tech. C&M Corp. United Development Corporation	Delivery and logistics services Manufacturing and sales of motors Manufacturing and sales of nanotech material products Holding company Real estate and industrial park management and development Energy technical services Construction industry as well as trades and related operation and investment of materials and sandstone used in construction and machinery Investment consultancy service for domestic and foreign industrial parks and land		32.15 100 - 100 52.75 60 100 100	32.15 100 - 100 52.75 60 100 100	32.15 100 86.83 100 52.75 60 100 100	Note 3 Note 1 Notes 1 and 4 Note 1 Note 12

~16~

Name of Investor	Name of Subsidiary	Main Business Activities		March 31,2019 December 31,2019 March 31,2018 72 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 75 75 75 100 100 100 100 100 100 100 100 100 Ownership (%)	March 31,2019 December 31,2019 March 31,2018 72 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 75 75 75 100 100 100 100 100 100 100 100 100 Ownership (%)	March 31,2019 December 31,2019 March 31,2018 72 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 75 75 75 100 100 100 100 100 100 100 100 100 Ownership (%)	Description
				March 31,2019	December 31,2019
Century Development Corporation Century Development Corporation Century Real Estate (International) Pte Ltd. Eagle Holding Co. TECO MOTOR B.V. Motovario S.p.A. Motovario S.p.A. Motovario S.p.A. Motovario S.p.A. Motovario S.p.A. Motovario S.p.A. Motovario S.p.A.	Century Biotech Development Corp. Century Real Estate (International) Pet. Ltd. CDC Development India Private Limited TECO MOTOR B.V. Motovario S.p.A. Motovario S.A (Spain) Motovario Ltd. Motovario GMBH Motovario Corp. Motovario S.A (France) Motovario Int. Trading Co. Ltd. Motovario Power Transmission Co. Ltd.	Investment consultancy service for domestic industrial parks and land Investments in other areas Investment consultancy service for domestic and foreign industrial parks and land Holding company Sales of motors and reducers Sales of motors and reducers Sales of motors and reducers Sales of motors and reducers Sales of motors and reducers Sales of motors and reducers Sales of motors and reducers Sales of motors and reducers		72 100 100 100 100 100 100 100 75 100 100 100	100 100 100 100 100 100 100 100 75 100 100 100	100 100 100 100 100 100 100 100 75 100 100 100	Note 12

~17~

Name of Investor	Name of Subsidiary	Main Business Activities		March 31,2019 December 31,2019 March 31,2018 100 100 100 100 100 100 100 100 100 60 - - 100 100 100 100 100 100 99.99 99.99 99.99 100 100 100 100 100 100 - - 100 Ownership (%)	March 31,2019 December 31,2019 March 31,2018 100 100 100 100 100 100 100 100 100 60 - - 100 100 100 100 100 100 99.99 99.99 99.99 100 100 100 100 100 100 - - 100 Ownership (%)	March 31,2019 December 31,2019 March 31,2018 100 100 100 100 100 100 100 100 100 60 - - 100 100 100 100 100 100 99.99 99.99 99.99 100 100 100 100 100 100 - - 100 Ownership (%)	Description
				March 31,2019	December 31,2019
Motovario S.p.A. Teco Holding USA Inc. Teco Holding USA Inc. Temico International Pte. Ltd. United View Global Investment Co., Ltd. United View Global Investment Co., Ltd. United View Global Investment Co., Ltd. United View Global Investment Co., Ltd. United View Global Investment Co., Ltd. United View Global Investment Co., Ltd.	Motovario Gear Solution Private Ltd. Teco Westinghouse Motor Company Company Teco Westinghouse Motor Industrial Canada Industrial Canada Temico Motor India Private Limited Great Teco Motor (Pte) Ltd. Asia Air Tech Industrial (Pte) Ltd. Teco Australia Pty. Ltd. P.T Teco Elektro Indonesia Teco Industrial (Malaysia) Sdn. Bhd. Tecoson Industrial Development (Pte) Ltd.	Sales of motors and reducers Manufacturing and sales of motors and generators Manufacturing and sales of motors and generators Sales of motors Holding company Holding company Manufacturing and sales of motors and home appliances Manufacturing and sales of motors and home appliances Manufacturing and sales of motors Investment in Southeast Asia and Hong Kong		100 100 100 60 100 100 99.99 100 100 -	100 100 100 - 100 100 99.99 100 100 -	100 100 100 - 100 100 99.99 100 100 100	Notes 1 and 11 Note 1 Note 1 Note 1 Note 1 Notes 1 and 5

~18~

Name of Investor	Name of Subsidiary	Main Business Activities		March 31,2020 December 31,2019 March 31,2019 100 100 100 100 100 100 100 100 100 100 100 100 80 80 80 87.5 87.5 87.5 55 55 55 100 100 100 100 100 100 100 100 100 Ownership (%)	March 31,2020 December 31,2019 March 31,2019 100 100 100 100 100 100 100 100 100 100 100 100 80 80 80 87.5 87.5 87.5 55 55 55 100 100 100 100 100 100 100 100 100 Ownership (%)	March 31,2020 December 31,2019 March 31,2019 100 100 100 100 100 100 100 100 100 100 100 100 80 80 80 87.5 87.5 87.5 55 55 55 100 100 100 100 100 100 100 100 100 Ownership (%)	Description
				March 31,2020	December 31,2019
United View Global Investment Co., Ltd. United View Global Investment Co., Ltd. United View Global Investment Co., Ltd. United View Global Investment Co., Ltd. Teco Industrial (Malaysia) Sdn. Bhd. Teco Electric & Machinery (Pte) Ltd. Teco Electric & Machinery (Pte) Ltd. Teco Electric & Machinery (Pte) Ltd. Teco Electric & Machinery (Pte.) Ltd. Teco Electric & Machinery (Pte.) Ltd.	Asia Electric & Machinery (Pte) Ltd. Great Teco, S.L. Teco Electric & Machinery B.V. Teco Elektrik Turkey A. S. Teco (Vietnam) Electric & Machinery Company Ltd. P.T Teco Multiguna Electro Teco (Thai) Co. Teco Electric & Machinery Sdn. Bhd. Teco Industrial System Private Limited Teco Electrical Industries Private Limited	Holding company Sales of motors Sales of motors, green power and electric control products Sales of motors and home appliances Manufacturing of motors Sales of motors in Singapore and neighbouring countries Sales of motors in Singapore and neighbouring countries Sales of motors in Singapore and neighbouring countries Sales of motors in India and neighbouring countries Manufacturing of motors		100 100 100 100 80 87.5 55 100 100 100	100 100 100 100 80 87.5 55 100 100 100	100 100 100 100 80 87.5 55 100 100 100	Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1

~19~

Name of Investor	Name of Subsidiary	Main Business Activities		March 31,2020 December 31,2019 March 31,2019 100 100 100 40 40 40 80 80 80 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 Ownership (%)	March 31,2020 December 31,2019 March 31,2019 100 100 100 40 40 40 80 80 80 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 Ownership (%)	March 31,2020 December 31,2019 March 31,2019 100 100 100 40 40 40 80 80 80 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 Ownership (%)	Description
				March 31,2020	December 31,2019
Teco Electric & Machinery (Pte) Ltd. Tong Dai Co., Ltd. Tong Dai Co., Ltd. Teco Electro Devices Co., Ltd. Micropac Worldwide (BVI) Teco International Investment Co., Ltd. Tong-An Investment Co., Ltd. Tong-An Investment Co., Ltd. Tong-An Investment Co., Ltd. Taiwan Pelican Express Co., Ltd. Teco Westinghouse Motor Company	TYM Electric and Machinery Sdn. Bhd. Top-Tower Enterprises Co., Ltd. AM SMART Technology CO.,LTD. Teco Electro Devices Co., Ltd. An-Tai International Investment (Singapore) Co., Ltd. Tasia (Pte) Ltd. Jie-Zheng Property Service & Management Co., Ltd. Tecocapital Investment (Samoa) Co., Ltd. Tecocapital Investment Co., Ltd. Pelecanus Express Pte. Ltd. Teco Westinghouse Motor Company S. A. de C.V.	Distribution of motors Sales of motors Sales of motors Trading and various investments Investment holdings Various investments Building management servicing Holding company Holding company Holding company of overseas companies Manufacturing and sales of motors and generators		100 40 80 100 100 100 100 100 100 100 100	100 40 80 100 100 100 100 100 100 100 100	100 40 80 100 100 100 100 100 100 100 100	Note 1 Notes 1 and 6 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1

~20~

Name of Investor	Name of Subsidiary	Main Business Activities		March 31,2020 December 31,2019 March 31,2019 100 100 100 51.19 51.19 51.19 100 100 100 100 100 100 100 100 100 82.35 82.35 82.35 98.07 98.07 98.07 87.60 87.60 87.60 100 100 100 Ownership (%)	March 31,2020 December 31,2019 March 31,2019 100 100 100 51.19 51.19 51.19 100 100 100 100 100 100 100 100 100 82.35 82.35 82.35 98.07 98.07 98.07 87.60 87.60 87.60 100 100 100 Ownership (%)	March 31,2020 December 31,2019 March 31,2019 100 100 100 51.19 51.19 51.19 100 100 100 100 100 100 100 100 100 82.35 82.35 82.35 98.07 98.07 98.07 87.60 87.60 87.60 100 100 100 Ownership (%)	Description
				March 31,2020	December 31,2019
Tecom Co., Ltd. Tecom Co., Ltd. Tecom Co., Ltd. Tecom Co., Ltd. Tecom Co., Ltd. Great Teco Motor (Pte) Ltd. Great Teco Motor (Pte) Ltd. Great Teco Motor (Pte) Ltd. Great Teco Motor (Pte) Ltd.	Tecom International Investment Co., Ltd. Baycom Opto-Electronics Technology Co., Ltd. Tecom Global Tech Investment (B.V.I.) Limited Tecom Global Tech Investment Pte Limited Tecom Tech Investment (B.V.I.) Limited Wuxi Teco Electric & Machinery Co., Ltd. Jiangxi Teco Electric & Machinery Co., Ltd. Qingdao Teco Precision Mechatronics Co., Ltd. Fujian Teco Precision Co., Ltd.	Investments in various undertakings Manufacture of fiber optic communications products, providing a full range of fiber optical cables, interconnect, Transceiver/Media converter, patch cord, LC connectors & adapter Investments in various undertakings Investments in various undertakings Investments in various undertakings Manufacturing and sales of motors and generators Coil-wound motors and hydroelectric power Manufacturing and sales of motors Manufacturing and sales of electric components		100 51.19 100 100 100 82.35 98.07 87.60 100	100 51.19 100 100 100 82.35 98.07 87.60 100	100 51.19 100 100 100 82.35 98.07 87.60 100	Note 9 Note 1

~21~

Name of Investor	Name of Subsidiary	Main Business Activities		March 31,2020 December 31,2019 March 31,2019 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 60 60 60 100 100 100 100 100 100 - - 100 100 100 100 Ownership (%)	March 31,2020 December 31,2019 March 31,2019 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 60 60 60 100 100 100 100 100 100 - - 100 100 100 100 Ownership (%)	March 31,2020 December 31,2019 March 31,2019 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 60 60 60 100 100 100 100 100 100 - - 100 100 100 100 Ownership (%)	Description
				March 31,2020	December 31,2019
Great Teco Motor (Pte) Ltd. Great Teco Motor (Pte) Ltd. Asia Air Tech Industrial (Pte) Ltd. Teco Australia Pty. Ltd. Teco Australia Pty. Ltd. Ejoy Australia Holdings Pty. Ltd. Teco Australia Pty. Ltd. Teco Australia Pty. Ltd. Tecoson Industrial Development (Pte) Ltd. Asia Electric & Machinery (Pte) Ltd.	Shanghai Teco Electric & Machinery Co., Ltd. Wuxi Teco Precision Machinery Co., Ltd. Teco (Dong Guang) Air Conditioning Equipment Co., Ltd. Teco (New Zealand) Limited Ejoy Australia Holdings Pty. Ltd. Ejoy Australia Pty. Ltd. Motovario Australia Pty. Ltd. Teco Electric Motors Africa Pty. Ltd. Tecoson HK Co., Ltd. Nanchang Teco Electric & Machinery Co., Ltd.	Agents and sales of motors and electrical appliances Manufacturing and sales of motors and components Manufacturing and sales of air- conditioning mechanical equipment Manufacturing and sales of motors and home appliances Various investments Sales of home appliances Various investments Agents and sales of motors and electrical appliances Various investments Manufacturing and sales of air-conditioning equipment		100 100 100 100 100 60 100 100 - 100	100 100 100 100 100 60 100 100 - 100	100 100 100 100 100 60 100 100 100 100	Note 1 Notes 1 and 7 Note 1

~22~

Name of Investor	Name of Subsidiary	Main Business Activities		March 31,2020 December 31,2019 March 31,2019 - - 100 100 100 100 - - 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 Ownership (%)	March 31,2020 December 31,2019 March 31,2019 - - 100 100 100 100 - - 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 Ownership (%)	March 31,2020 December 31,2019 March 31,2019 - - 100 100 100 100 - - 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 Ownership (%)	Description
				March 31,2020	December 31,2019
Asia Electric & Machinery (Pte) Ltd. Asia Electric & Machinery (Pte) Ltd. Asia Electric & Machinery (Pte) Ltd. Asia Electric & Machinery (Pte) Ltd. Teco Electric & Machinery B.V. Teco Electro Devices Co., Ltd. Teco Westinghouse Motor Company An-Tai International Investment (Singapore) Co., Ltd. An-Tai International Investment (Singapore) Co., Ltd.	Xiamen Teco Technology Co., Ltd. Asia Innovative Technology Co., Ltd. Tianjin Teco Technology Co., Ltd. Jiangxi TECO Air Conditioning Equipment Co., Ltd. Teco Electric & Machinery GmbH. Wuxi TECO Precision Industry Co., Ltd. Jiangxi TECO Westinghouse Motor Coil Co., Ltd. Tai-An Technology (Wuxi) Co., Ltd. Hunan TECO Wind Energy Limited	Distribution and research of motors and home appliances Research, development, manufacturing and sales of home appliances Operations center in Central China Manufacturing and sales of various air-conditioning units Manufacturing and sales of motors Manufacturing and sales of motors Manufacturing and sales of motors, winding and related parts Manufacturing and sales of fiber electric equipment Manufacturing, sales and technical services of 2.0 megawatt and above aerogenerator, wheel bay and other		- 100 - 100 100 100 100 100 100	- 100 - 100 100 100 100 100 100	100 100 100 100 100 100 100 100 100	Notes 1 and 4 Note 1 Notes 1 and 4 Note 1 Note 1 Note 1 Note 1 Notes 1 and 8

~23~

Name of Investor	Name of Subsidiary	Main Business Activities		March 31,2020 December 31,2019 March 31,2019 - - 68.08 100 100 100 100 100 100 - - 100 100 100 100 Ownership (%)	March 31,2020 December 31,2019 March 31,2019 - - 68.08 100 100 100 100 100 100 - - 100 100 100 100 Ownership (%)	March 31,2020 December 31,2019 March 31,2019 - - 68.08 100 100 100 100 100 100 - - 100 100 100 100 Ownership (%)	Description
				March 31,2020	December 31,2019
Tecom International Investment Co., Ltd. Tecom Global Tech Investment (B.V.I.) Limited Tecom Global Tech Investment Pte Limited Tecom Investment (B.V.I.) Limited Tasia (Pte) Ltd.	WondaLink Inc. Wuhan Tecom Co., Ltd. Tecom Tech (Wuxi) Co., Ltd. Beijing Tecom Innovation Technology Co., Ltd. Sankyo Co., Ltd.	Wired communication equipment and apparatus, manufacturing of telecommunication equipment and apparatus, manufacturing of electronic parts and design of products Communication network information technology development, sales and technology services business R & D, manufacture of broadband access network communication system equipment, asynchronous transfer mode, IP data communication systems, mobile communication handsets, base stations, switching equipment and digital trunking system equipment, high-end routers, Gigabit switch than the above network, program-controlled switchboards; sale of products to provide technology services Wireless network communication system hardware and software, provide technical advice, technical training and technical services Sales of home appliances		- 100 100 - 100	- 100 100 - 100	68.08 100 100 100 100	Note 10 Note 4 Note 1

~24~

Name of Investor	Name of Subsidiary	Main Business Activities		March 31,2020 December 31,2019 March 31,2019 100 100 100 70 70 70 100 100 100 100 100 100 - - 100 100 100 100 100 100 100 100 100 100 - - 100 Ownership (%)	March 31,2020 December 31,2019 March 31,2019 100 100 100 70 70 70 100 100 100 100 100 100 - - 100 100 100 100 100 100 100 100 100 100 - - 100 Ownership (%)	March 31,2020 December 31,2019 March 31,2019 100 100 100 70 70 70 100 100 100 100 100 100 - - 100 100 100 100 100 100 100 100 100 100 - - 100 Ownership (%)	Description
				March 31,2020	December 31,2019
Tecocapital Investment (Samoa) Co., Ltd. Tecocapital Investment Co., Ltd. Pelecanus Express Pte. Ltd. Teco Westinghouse Motor Company S.A. de C.V. Tai-An Technology (Wuxi) Co., Ltd. Information Technology Total Services Co., Ltd. Information Technology Total Services Co., Ltd. Information Technology Total Services Co., Ltd. Information Technology Total Service (BVI) Co., Ltd.	Qingdao TECO Innovation Co., Ltd. Technical Information International Co., Ltd. Beijing Pelican Express Co., Ltd. Teco Westinghouse Colombia S.A.S. Teco Sichuan Trading Co., Ltd. Information Technology Total Service (BVI) Co., Ltd. Universal Mail Service Ltd. Unison Service Corporation Information Technology Total Service (Hang Zhou) Co., Ltd.	Science Park development and business operations consulting services Development and sales of software Storage services Manufacturing and sales of motors and generators Distribution of motors and home appliances Holding company Engaged in various business documents management, printing and other mail services Engaged in services related to information software, data processing and electronic information supply Engaged in services related to information software, data processing and electronic information supply		100 70 100 100 - 100 100 100 -	100 70 100 100 - 100 100 100 -	100 70 100 100 100 100 100 100 100	Note 1 Note 1 Note 1 Notes 1 and 4 Note 4

~25~

==> picture [472 x 48] intentionally omitted <==

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

Ownership (%)
Name of Name of Main Business March December March
Investor Subsidiary Activities 31, 2020 31, 2019 31, 2019 Description
----- End of picture text -----

Name of Investor	Name of Subsidiary	Main Business Activities	March 31,2020	December 31,2019	March 31,2019 Description
Information	Information	Engaged in	100	100	100
Technology	Technology (Wuxi)	services related
Total Service	Co., Ltd.	to information
(BVI) Co.,		software, data
Ltd.		processing and
		electronic
		information supply
Information	Information	Engaged in services	100	100	100
Technology	Technology Total	related to
(Wuxi) Co.,	Service (Xiamen)	information
Ltd.	Co, Ltd.	software, data
		processing and
		electronic
		information supply

• Note 1: The financial statements of the entity as of and for the three-month periods ended March 31, 2020 and 2019 were not reviewed by the independent accountants as the entity did not meet the definition of a significant subsidiary.

• Note 2: Tong Dai Co., Ltd. acquired Tong Tai Jung Co., Ltd. with newly issued shares through a share swap for the year ended December 31, 2019 and the effective date of the merger was set on December 31, 2019. Tong Tai Jung Co., Ltd. was the dissolved company and the Group held 83.53% equity interest in the surviving company after the merger.

• Note 3: The Company sold part of its ownership in Taiwan Pelican Express Co., Ltd. in August, 2012, and accordingly, its ownership fell below 50% of the voting shares of Taiwan Pelican Express Co., Ltd.. However, the Company still has control over the finance, operations and personnel affairs of Taiwan Pelican Express Co., Ltd., thus Taiwan Pelican Express Co., Ltd. continues to be included in the consolidated financial statements.

• Note 4: This company was liquidated in 2019.

• Note 5: The Group sold 100% of share in this company on July 25, 2019. Therefore, the company is no longer included in the Group’s consolidated financial statements.

• Note 6: The Company has control over the Board of Directors of the subsidiary, and has absolute control over the subsidiary. Thus, the subsidiary was included in the consolidated financial statements.

• Note 7: The Group sold 100% of shares in the parent company on July 25, 2019, and the Group lost control over the company at the same time.

• Note 8: The subsidiary was in the process of dissolution for the year December 31, 2019. However, the process has not yet been completed as of March 31, 2020.

• Note 9: The non-material subsidiary - Baycom Opto-Electronics Technology Co., Ltd. ceased to be publicly traded as resolved by the shareholders on June 12, 2019, and it was approved by the Financial Supervisory Commission on June 24, 2019.

• Note 10: Tecom International Investment Co., Ltd. disposed its subsidiary - WondaLink Inc. in November 2019.

~26~

Note 11: Newly established subsidiary this year.

Note 12: Century Biotech Development Corp. increased its cash capital in March 2020. The Group did not acquire shares proportionally to its interest, and therefore, its ownership interest decreased.

Consolidated financial statements of certain consolidated subsidiaries and investees accounted for under equity method, which statements reflect total assets (including investments accounted for under the equity method) of NT$31,732,992 and $31,371,579 as of March 31, 2020 and 2019, respectively, total liabilities (including credit balance of investments accounted for under equity method) of NT$3,906,870 and $4,305,633 as of March 31, 2020 and 2019, respectively, and comprehensive income (including share of profit or loss and share of other comprehensive income of associates and joint ventures accounted for under the equity method) of NT$90,074 and $198,374 for the three-month periods then ended, respectively. These amounts were based on the unreviewed financial statements of such consolidated subsidiaries and investee companies.

C. Subsidiaries not included in the consolidated financial statements:

Name of Investor	Name of Subsidiary	Main Business Activities		March 31,2020 December 31,2019 March 31,2019 99.99 99.99 99.99 100 100 100 96 96 96 95 95 95 60 60 60 100 100 100 100 100 100 Ownership (%)	March 31,2020 December 31,2019 March 31,2019 99.99 99.99 99.99 100 100 100 96 96 96 95 95 95 60 60 60 100 100 100 100 100 100 Ownership (%)	March 31,2020 December 31,2019 March 31,2019 99.99 99.99 99.99 100 100 100 96 96 96 95 95 95 60 60 60 100 100 100 100 100 100 Ownership (%)	Description
				March 31,2020	December 31,2019
Teco Electric & Machinery Co., Ltd. Teco Electric & Machinery Co., Ltd. Teco Electric & Machinery Co., Ltd. Teco Electric & Machinery Co., Ltd. Teco Electric & Machinery Co., Ltd. Teco Electric & Machinery Co., Ltd. Great Teco Motor (Pte) Ltd.	Teco Appliance (HK) Co., Ltd. Taian Electric Co., Ltd. An-Sheng Travel Co., Ltd. Taian-Jaya Electric Sdn. Bhd. Teco (Philippines) 3C & Appliances, Inc. Teco EV Philippines Corporation Teco Group Science- Technology (Hang Zhou) Co., Ltd.	Sales of home appliances Manufacturing and sales of switches Travel agency services Manufacturing and sales of air- conditioning equipment Sales of air conditioning and electrical appliances Sales of vehicles Electrical machinery electric and automatic control technology development and consultation service		99.99 100 96 95 60 100 100	99.99 100 96 95 60 100 100	99.99 100 96 95 60 100 100	Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1

~27~

			Ownership (%)	Ownership (%)
Name of	Name of	Main Business	March	December	March
Investor	Subsidiary	Activities	31,2020	31,2019	31,2019	Description
An-Tai	Hubbell-Taian Co.,	Import, export and	49.99	49.99	49.99	Notes 1、
International	Ltd.	sales of electric				2 and 3
Investment		wiring devices,
Co., Ltd.		lighting, explosion
		proofing and other
		accessory products
Hubbell-Taian	Hubbell-Anmex	Distribution of	100	100	100	Note 1
Co., Ltd.	International(s) Pte.	electronic
	Ltd.	products
Tong-An	Grey Back	Real estate	100	100	100	Note 1
Assets	International	management and
Management	Property Inc.	development
&
Development
Co., Ltd.
Tasia (Pte)	TECO Technology	Engaged in a	100	100	100	Note 1
Ltd.	& Marketing Center	variety
	Co., Ltd.	of investment
		businesses
Jack Property	Qingdao Jie Zheng	Property	100	100	100	Note 1
Service &	Property Service &	management and
Management	Management	related services
Company	Company
Tong-An	Eurasia Food	Restaurant chain	100	100	100	Note 1
Investment	Service Co., Ltd.
Co., Ltd.
Tong-An	Xianlaoman		48.33	48.33	48.33	Notes 1
Investment	Restaurant Co., Ltd.	Restaurant chain				and 2
Co., Ltd.
Note 1：The	above subsidiaries were not included in the consolidated financial statements
as their respective total assets and operating revenues did not exceed the materiality
threshold of the Company’s total assets and			operating revenues.
Note 2：The	Company has control over the personnel affairs, finance and business of the
subsidiary. Thus, the Company has absolute control over the subsidiary.
Note 3: The	subsidiary was dissolved during the year ended December 31,				2019 as	resolved
by the Board of Directors, and is in the process of liquidation after the approval the
competent authority on April 14, 2020.

D. Adjustments for subsidiaries with different balance sheet dates: None.

E. Significant restrictions: None.

~28~

F. Details of significant non-controlling interests: Please refer to Note 6(32). (4) Dividends

• Cash dividends for the year ended December 31, 2018 are recorded as liabilities in the financial statements in the period in which they are resolved by the shareholders. However, pursuant to amended Article 240 of Company Act, cash dividends for the year ended December 31, 2019 are recorded as liabilities in the financial statements after a special resolution adopted by the Board of Directors.

5. Critical Accounting Judgements, Estimates and Key Sources of Assumption Uncertainty

• There have been no significant changes as of March 31, 2020. Please refer to Note 5 in the consolidated financial statements for the year ended December 31, 2019.

6. Details of Significant Accounts

(1) Cash and cash equivalents

tails of Significant Accounts Cash and cash equivalents
Cash on hand and revolving funds Checking accounts and demand deposits Time deposits and notes issued under repurchase agreement	March 31,2020 $ 18,246 13,091,804 10,649,547 $23,759,597	December 31,2019 $ 19,451 6,694,245 12,397,675 $19,111,371	March	31,2019
			$	23,876 8,707,959 8,787,452
			17,519,287 $

• 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. As of March 31, 2020, December 31, 2019 and March 31, 2019, cash and cash equivalents amounting to $407,135, $440,212 and $491,583, respectively, were pledged to others as collateral for loans (listed as‘1470 Other current assets’). Please refer to Note 8 for details.

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

Financial assets at fair value through profit or loss
Items March 31,2020 Current items: Financial assets mandatorily measured at fair value through profit or loss Listed and OTC stocks 63,651 $ Emerging stocks 12,957 Money market fund 114,768 Derivative instruments 458 191,834 Valuation adjustments 29,011) ( 162,823 $	December 31,2019 March 31,2019 17,328 $ 112,339 $ 22,268 17,136 112,769 207,645 236 - 152,601 337,120 25,656) ( 13,489) ( 126,945 $ 323,631 $	March 31,2019
		112,339 $ 17,136 207,645 -
		323,631 $

~29~

==> picture [475 x 159] intentionally omitted <==

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

Items March 31, 2020 December 31, 2019 March 31, 2019
Non-current items:
Financial assets mandatorily
measured at fair value through
profit or loss
Listed and OTC stocks $ 902,868 $ 902,868 $ 910,270
Non-listed and OTC stocks 810,394 810,394 811,774
Fund beneficiary certificate 799,921 269,397 223,858
2,513,183 1,982,659 1,945,902
Valuation adjustments 253,892 308,558 283,972
$ 2,767,075 $ 2,291,217 $ 2,229,874
----- End of picture text -----

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

Amounts recognized in profit or loss in relation to financial assets at fair value through profit or loss are listed below:	Amounts recognized in profit or loss in relation to financial assets at fair value through profit or loss are listed below:	Amounts recognized in profit or loss in relation to financial assets at fair value through profit or loss are listed below:	Amounts recognized in profit or loss in relation to financial assets at fair value through profit or loss are listed below:	Amounts recognized in profit or loss in relation to financial assets at fair value through profit or loss are listed below:
The non-hedging derivative instrument transactions and contract information are as follows: For the three-month period ended For the three-month period ended March 31,2020 March 31,2019 Financial assets mandatorily measured at fair value through profit or loss Equity instruments ($ 65,424) 93,455 $ Derivative instrument Contractperiod Contract amount (Notionalprincipal) Fair value Forward foreign exchange contracts SELL USD/BUY RMB February 18, 2020 ~ May 22, 2020 USD 500,000 181 $ SELL USD/BUY RMB February 21, 2020 ~ May 22, 2020 USD 500,000 96 SELL USD/BUY RMB March 13, 2020 ~ June 23, 2020 USD 500,000 181 458 $ Derivative instrument Contractperiod Contract amount (Notionalprincipal) Fair value Forward foreign exchange contracts SELL USD/BUY RMB November 26, 2019 ~ January 21, 2020 USD 500,000 128 $ SELL USD/BUY RMB November 26, 2019 ~ January 21, 2020 USD 500,000 108 236 $ March 31,2020 December 31,2019
	Contractperiod	Contract amount (Notionalprincipal)
				181 $ 96 181 458 $ Fair value
		USD 500,000 USD 500,000		128 $ 108 236 $

• B. The non-hedging derivative instrument transactions and contract information are as follows:

• C. As of March 31, 2019, the Group had no non-hedging derivative financial instrument transactions.

• D. The Group entered into forward foreign exchange contracts to sell to hedge exchange rate

~30~

risk of export proceeds. However, these forward foreign exchange contracts and foreign currency loan are not accounted for under hedge accounting.

• E. 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 fair value through other comprehensive income

==> picture [475 x 215] intentionally omitted <==

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

Items March 31, 2020 December 31, 2019 March 31, 2019
Current items:
Listed and OTC stocks $ 1,089,277 $ 1,036,488 $ 1,099,449
Emerging stocks 6,672 6,672 -
1,095,949 1,043,160 1,099,449
Valuation adjustments ( 181,169) 22,569 20,011
$ 914,780 $ 1,065,729 $ 1,119,460
Non-current items:
Listed and OTC stocks $ 7,985,714 $ 7,975,067 $ 8,022,280
Non-listed and OTC stocks 312,016 341,739 299,806
8,297,730 8,316,806 8,322,086
Valuation adjustments 5,350,752 6,156,211 5,195,466
$ 13,648,482 $ 14,473,017 $ 13,517,552
----- End of picture text -----

• A. The Group has elected to classify Taiwan High Speed Rail’s stocks that are considered to be steady dividend income as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $14,563,262, $15,538,746 and $14,637,012 as at March 31, 2020, December 31, 2019 and March 31, 2019, respectively.

• B. For the three-month periods ended March 31, 2020 and 2019, the Group sold stocks with fair values of $2,180 and $63,627, respectively, to raise the capital for operations; the cumulative gains (losses) on disposal are $249 and $21,280, respectively, and the realized profits were carried forward from other equity to retained earnings.

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

value through other comprehensive income are listed below:
For the three-month period ended March 31,2020 Equity instruments at fair value through other comprehensive income Fair value change recognised in other comprehensive income 960,270) ($ Cumulative gains reclassified to retained earnings due to derecognition 249 $ 1,015 $ Derecognised during the period - $1,015 Dividend income recognised in profit or loss held at end of period	For the three-month period ended March 31,2019
	2,282,569 $
	21,280 $
	- $ -
	- $

~31~

• D. Details of the Group’s financial assets at fair value through other comprehensive income pledged to others as collateral are provided in Note 8.

• E. Information relating to credit risk of financial assets at fair value through other comprehensive income is provided in Note 12(2).

(4) Financial assets at amortised cost

Items March 31, 2020 December 31, 2019 March 31, 2019 Non-current items: Time deposits $ 409,410 $ 377,256 $ 183,428

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

For the three-month For the three-month period ended period ended March 31, 2020 March 31, 2019 Interest income $ 1,680 $ 423

• B. As at March 31, 2020, December 31, 2019 and March 31, 2019, 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 financial assets at amortised cost held by the Group were $409,410, $377,256 and $183,428, respectively.

• C. Details of the Group’s financial assets at amortised cost pledged to others as collateral are provided in Note 8.

• D. Information relating to credit risk of financial assets at amortised cost is provided in Note 12(2).

(5) Notes and accounts receivable

Notes receivable Less: Allowance for bad debts Accounts receivable Less: Allowance for bad debts	March 31,2020 December 31,2019 March 31, 2019 944,411 $ 1,120,799 $ 1,019,194 $ ( 2,015) (2,068) (2,529) 942,396 $ 1,118,731 $ 1,016,665 $ 8,209,202 $ 8,944,405 $ 9,116,844 $ (171,559) (164,358) (179,338) 8,037,643 $ 8,780,047 $ 8,937,506 $

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

as follows:
Not past due Up to 30 days 31 to 90 days 91 to 180 days Over 180 days		March 31,2020 6,763,486 $ 922,588 743,868 251,544 298,553 8,980,039 $	December 31,2019 7,562,797 $ 1,097,040 658,164 143,162 437,615 9,898,778 $	March 31,2019
				6,623,933 $ 1,522,130 1,052,845 206,589 548,674 9,954,171 $

The above ageing analysis was based on past due date.

• B. As of March 31, 2020, December 31, 2019 and March 31, 2019, the balances of receivables (including notes receivable) from contracts with customers amounted to $8,870,047,

~32~

$9,879,488 and $9,923,586, respectively.

• C. As at March 31, 2020, December 31, 2019 and March 31, 2019, 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 notes receivable were $942,396, $1,118,731 and $1,016,665, and accounts receivable were $8,037,643 $8,780,047 and $8,937,506, respectively.

• D. Details of the Group’s notes receivable pledged to others are provided in Note 8.

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

(6) Inventories

in Note 12(2). Inventories
Raw materials Work in progress Finished goods Inventory in transit Merchandise inventories Raw materials Work in progress Finished goods Inventory in transit Merchandise inventories Raw materials Work in progress Finished goods Inventory in transit Merchandise inventories		March 31,2020
	Cost 2,779,793 $ 1,089,204 5,296,225 608,113 705,819 $10,479,154	Allowance for valuation loss 150,717) ($ 10,428) ( 474,565) ( - 10,530) ( ($646,240) December 31,2019	Book value
			2,629,076 $ 1,078,776 4,821,660 608,113 695,289
			$9,832,914
	Cost 2,703,745 $ 1,004,142 5,476,656 417,960 920,284 10,522,787 $	Allowance for valuation loss 184,324) ($ 13,430) ( 460,089) ( - 11,359) ( ($669,202) March 31,2019	Book value
			2,519,421 $ 990,712 5,016,567 417,960 908,925
			9,853,585 $
	Cost 2,883,549 $ 1,796,971 6,031,434 618,058 942,852 12,272,864 $	Allowance for valuation loss 140,692) ($ 52,047) ( 563,239) ( - 24,257) ( ($780,235)	Book value
			2,742,857 $ 1,744,924 5,468,195 618,058 918,595
			11,492,629 $

• A. The cost of inventories recognized as expense for the three-month periods ended March 31, 2020 and 2019 were $5,436,822 and $6,602,561, respectively, including $58,775 and $44,356 that the Group wrote down from cost to the net realizable value accounted for as cost of goods sold for the three-month periods ended March 31, 2020 and 2019, respectively.

• B. The Group has no inventory pledged to others.

~33~

(7) Investments accounted for under the equity method

		March 31,2020	December 31,2019	December 31,2019		March 31,2019
Associates:
1. Tung Pei Industrial Co., Ltd.	$	2,096,567	$	2,086,821	$	2,116,423
2. Creative Sensor Inc.		397,885		398,472		397,344
3. Lien Chang Electronic		445,771		445,494		440,254
Enterprise Co., Ltd.
4. Kuen Ling Machinery		288,272		286,363		313,119
Refrigerating Co., Ltd.
5. Others		683,594		680,166		628,908
		3,912,089		3,897,316		3,896,048
Less: Credit balance of
investments accounted
for under the equity
method such as Teco
Middle East Electrical
& Machinery Co.,
Ltd. and Le-Li Co., Ltd.
(shown as deductions on
notes receivable-related
parties, accounts
receivable- related
parties as well as
other receivables-related
parties, and other non-
current liabilities)	(	128,063)	(	110,326)	(	90,170)
	$	3,784,026	$	3,786,990	$	3,805,878

The share of profit/loss of associates and joint ventures accounted for under equity method for the three-month periods ended March 31, 2020 and 2019 are as follows:

Associates: 1. Tung Pei Industrial Co., Ltd. 2. Creative Sensor Inc. 3. Lien Chang Electronic Enterprise Co., Ltd. 4. Kuen Ling Machinery Refrigerating Co., Ltd. 5. Others	For the three- month peiod ended March 31,2020	For the three- month peiod ended March 31,2019
	9,746 $ 734 5,612 1,908 46,184) ( ($28,184)	28,841 $ 4,108 11,205) ( 3,262 16,876) ( $8,130

~34~

A. Associates

(a) The basic information of the associates that are material to the Group is as follows:

Shareholding ratio

==> picture [463 x 45] intentionally omitted <==

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

Principal
Company place of March December March Nature of Method of
name business 31, 2020 31, 2019 31, 2019 relationship measurement
----- End of picture text -----

Company name	Principal place of business	March 31,2020	December 31,2019	March 31,2019	Nature of relationship	Method of measurement
Tung Pei	R.O.C	31.14%	31.14%	31.14%	Financial	Equity method
Industrial					investment
Co., Ltd.
Creative	R.O.C	11.50%	11.50%	11.50%	″	Equity method
Sensor
Inc.
Lien Chang	R.O.C	33.84%	33.84%	33.84%	″	Equity method
Electronic
Enterprise
Co., Ltd.
Kuen Ling	R.O.C	14.62%	14.62%	15.63%	″	Equity method
Machinery
Refrigerating
Co., Ltd.

• (b) The summarized financial information of the associates that are material to the Group is shown below:

Balance sheet

shown below: Balance sheet
		TungPei Industrial Co.,Ltd.
		March 31,2020	December 31,2019			March 31,2019
Current assets	$	3,497,222	$	4,672,289	$	3,889,113
Non-current assets		7,209,009		7,805,002		7,423,528
Current liabilities	(	2,073,825)	(	3,128,742)	(	2,409,586)
Non-current liabilities	(	1,898,722)	(	1,927,696)	(	2,105,581)
Total assets	$	6,733,684	$	7,420,853	$	6,797,474
Share in associate’s net
assets	$	2,096,567	$	2,086,821	$	2,116,423
Goodwill		-		-		-
Carrying amount of the
associate	$	2,096,567	$	2,086,821	$	2,116,423

~35~

			Creative Sensor Inc.	Creative Sensor Inc.
		March 31,2020	December 31,2019			March	31,2019
Current assets	$	3,286,232	$	3,220,429		$	3,301,789
Non-current assets		1,060,694		1,152,753			1,211,395
Current liabilities	(	992,434)	(	920,458)	(		1,028,751)
Non-current liabilities	(	146,211)	(	155,141)	(		112,908)
Total net assets	$	3,208,281	$	3,297,583		$	3,371,525
Share in associate’s
net assets	$	397,885	$	398,472		$	397,344
Goodwill		-		-			-
Carrying amount of the
associate	$	397,885	$	398,472		$	397,344
		Lien ChangElectronic Enterprise Co.,Ltd.
		March 31,2020	December 31,2019			March	31,2019
Current assets	$	1,529,392	$	1,583,967		$	1,753,188
Non-current assets		604,268		625,742			653,542
Current liabilities	(	766,805)	(	841,291)	(		1,037,971)
Non-current liabilities	(	49,723)	(	52,103)	(		67,925)
Total net assets	$	1,317,132	$	1,316,315		$	1,300,834
Share in associate’s net
assets	$	445,771	$	445,494		$	440,254
Goodwill		-		-			-
Carrying amount of the
associate	$	445,771	$	445,494		$	440,254
		Kuen Ling	MachineryRefrigeratingCo.,Ltd.
		March 31,2020	December 31,2019			March	31,2019
Current assets	$	1,889,959	$	1,892,416		$	1,827,741
Non-current assets		715,292		711,800			699,103
Current liabilities	(	858,599)	(	862,521)	(		796,440)
Non-current liabilities	(	282,108)	(	290,893)	(		228,548)
Total net assets	$	1,464,544	$	1,450,802		$	1,501,856
Share in associate’s net
assets	$	200,203	$	198,294		$	313,119
Goodwill		88,069		88,069			-
Carrying amount of the
associate	$	288,272	$	286,363		$	313,119

~36~

Statement of comprehensive income

Statement of comprehensive income
		TungPei Industrial Co.,Ltd.
		For the three-month		For the three-month
		period ended		period ended
		March 31,2020		March 31,2019
Revenue	$	1,070,351	$	1,208,230
Profit for the period from
continuing operations	$	31,297	$	92,527
Other comprehensive loss, net
of tax		-		-
Total comprehensive income	$	31,297	$	92,527
Dividends received from associates	$	-	$	-
		Creative Sensor Inc.
		For the three-month		For the three-month
		period ended		period ended
		March 31,2020		March 31,2019
Revenue	$	571,419	$	1,020,669
(Loss) profit for the period from
continuing operations	($	10,759)	$	38,779
Other comprehensive income (loss),
net of tax	(	78,543)		94,587
Total comprehensive (loss) income	($	89,302)	$	133,366
Dividends received from associates	$	-	$	-
		Lien ChangElectronic Enterprise Co.,Ltd.
		For the three-month		For the three-month
		period ended		period ended
		March 31,2020		March 31,2019
Revenue	$	619,110	$	711,789
Profit (loss) for the period
from continuing operations	$	16,582	($	33,108)
Other comprehensive income (loss),
net of tax	(	15,765)		33,860
Total comprehensive income	$	817	$	752
Dividends received from associates	$	-	$	-

~37~

		Kuen LingMachinery	RefrigeratingCo.,Ltd.	RefrigeratingCo.,Ltd.
		For the three-month		For the three-month
		period ended		period ended
		March 31,2020		March 31,2019
Revenue	$	475,681	$	561,181
Profit for the period from
continuing operations	$	17,278	$	18,725
Other comprehensive (loss)
income, net of tax	(	3,536)		13,029
Total comprehensive income	$	13,742	$	31,754
Dividends received from associates	$	-	$	-

• (c) The carrying amount of the Group’s interests in all individually immaterial associates and the Group’s share of the operating results are summarized below: As of March 31, 2020, December 31, 2019 and March 31, 2019, the carrying amount of the Group’s individually immaterial associates amounted to $683,594, $680,166 and $628,908, respectively.

$628,908, respectively.
		For the three-month For			the three-month
		period ended			period ended
		March 31, 2020 March 31,2019
Loss for the year from
continuing operations		($		46,184) ($		16,876)
Total comprehensive loss		($		46,184) ($		16,876)
(d) The fair values of the Group’s		material associates with quoted market				prices are as
follows:
	March 31, 2020		December 31, 2019		March 31,2019
1.Lien Chang Electronic
Enterprise Co., Ltd.	$	254,536	$	427,981	$	427,981
2.Creative Sensor Inc.		248,841		343,708		324,734
3.Kuen Ling Machinery
Refrigerating Co., Ltd.		247,679		270,499		359,994
	$	751,056	$	1,042,188	$	1,112,709

• B. Details on unreviewed investments accounted for under equity method are provided in Note 4(3).

• C. Details of the Group’s investments accounted for under equity method pledged to others as collateral are provided in Note 8.

~38~

(8) Property, plant and equipment

Property, plant and equipment
Land Cost 5,538,032 $ Accumulated depreciation and impairment 34,697) ( 5,503,335 $ 2020 Opening net book amount 5,503,335 $ Additions - Disposals - Reclassifications 81,002) ( Depreciation charge - Net exchange differences 5,089) ( Closing net book amount 5,417,244 $ At March 31, 2020 Cost 5,451,941 $ Accumulated depreciation and impairment 34,697) ( 5,417,244 $ At January 1, 2020	Buildings and structures	Leased assets - buildings and structures	Machinery and equipment	Leased assets - machinery and equipment	Transportation equipment	Leasehold improvements	Miscellaneous equipment Total 7,640,264 $ 42,622,482 $ 6,374,365) ( 25,879,652) ( 1,265,899 $ 16,742,830 $ 1,265,899 $ 16,742,830 $ 33,690 81,702 143) ( 1,906) ( 14,189) ( 169,145) ( 99,089) ( 313,239) ( 9,075) ( 70,442) ( 1,177,093 $ 16,269,800 $ 7,608,534 $ 42,263,937 $ 6,431,441) ( 25,994,137) ( 1,177,093 $ 16,269,800 $	Total
	8,606,403 $ 4,310,726) ( 4,295,677 $ 4,295,677 $ 13,904 197) ( 50,582) ( 53,507) ( 41,979) ( 4,163,316 $ 8,491,766 $ 4,328,450) ( 4,163,316 $	5,318,033 $ 2,052,629) ( 3,265,404 $ 3,265,404 $ - - 4,149) ( 43,165) ( 400) ( 3,217,690 $ 6,067,973 $ 2,850,283) ( 3,217,690 $	13,141,338 $ 11,324,271) ( 1,817,067 $ 1,817,067 $ 19,117 725) ( 3,381 84,466) ( 10,071) ( 1,744,303 $ 12,326,302 $ 10,581,999) ( 1,744,303 $	662,367 $ 611,419) ( 50,948 $ 50,948 $ - - 806 3,576) ( - 48,178 $ 662,780 $ 614,602) ( 48,178 $	1,143,954 $ 725,825) ( 418,129 $ 418,129 $ 13,185 841) ( - 20,899) ( 2,450) ( 407,124 $ 1,129,684 $ 722,560) ( 407,124 $	572,091 $ 445,720) ( 126,371 $ 126,371 $ 1,806 - 23,410) ( 8,537) ( 1,378) ( 94,852 $ 524,957 $ 430,105) ( 94,852 $
								16,269,800 $

~39~

Land At January 1, 2019 (after adjustment) Cost 5,557,179 $ Accumulated depreciation and impairment 34,697) ( 5,522,482 $ 2019 Opening net book amount 5,522,482 $ Additions - Disposals - Reclassifications 12,545) ( Depreciation charge - Net exchange differences 21) ( Closing net book amount 5,509,916 $ At March 31, 2019 Cost 5,544,613 $ Accumulated depreciation and impairment 34,697) ( 5,509,916 $	Buildings and structures	Leased assets - buildings and structures	Machinery and equipment	Leased assets - machinery and equipment	Transportation equipment	Leasehold improvements	Miscellaneous equipment Total 7,828,161 $ 43,197,047 $ 6,388,132) ( 25,833,504) ( 1,440,029 $ 17,363,543 $ 1,440,029 $ 17,363,543 $ 40,001 71,939 470) ( 7,088) ( 1,171 18,174) ( 101,567) ( 318,550) ( 8,550 71,239 1,387,714 $ 17,162,909 $ 7,894,756 $ 43,273,062 $ 6,507,042) ( 26,110,153) ( 1,387,714 $ 17,162,909 $	Total
	8,602,994 $ 4,170,145) ( 4,432,849 $ 4,432,849 $ 4,209 - 5,629) ( 53,179) ( 39,570 4,417,820 $ 8,668,819 $ 4,250,999) ( 4,417,820 $	5,283,793 $ 1,873,902) ( 3,409,891 $ 3,409,891 $ - - - 45,979) ( 9) ( 3,363,903 $ 5,283,601 $ 1,919,698) ( 3,363,903 $	13,572,413 $ 11,595,220) ( 1,977,193 $ 1,977,193 $ 17,841 6,534) ( 2,401) ( 86,689) ( 21,429 1,920,839 $ 13,556,464 $ 11,635,625) ( 1,920,839 $	656,849 $ 617,430) ( 39,419 $ 39,419 $ - - 2,597 3,568) ( - 38,448 $ 659,446 $ 620,998) ( 38,448 $	1,116,937 $ 711,455) ( 405,482 $ 405,482 $ 4,489 84) ( 1,372) ( 18,591) ( 849 390,773 $ 1,087,966 $ 697,193) ( 390,773 $	578,721 $ 442,523) ( 136,198 $ 136,198 $ 5,399 - 5 8,977) ( 871 133,496 $ 577,397 $ 443,901) ( 133,496 $
								17,162,909 $

• A. For the three-month periods ended March 31, 2020 and 2019, no borrowing cost was capitalized as part of property, plant and equipment.

B. Information about the property, plant and equipment that were pledged to others as collateral is provided in Note 8.

• C. The Company was unable to transfer the title of certain farmland to the Company’s name due to legal restrictions. The land title was registered under an individual’s name. Accordingly, the Company entered into an agreement with the said individual to secure the title and the first mortgage right.

~40~

• (9) Leasing arrangements - lessee

• A. The Group leases various assets including land, buildings, machinery and equipment as well as business vehicles. Rental contracts are typically made for periods of 2 to 50 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants, but certain leased assets may not be used as security for borrowing purposes.

• B. On January 14, 2005, the Group’s subsidiary, Century Development Corporation, completed the registration of right of superficies and paid royalties to Taipei City Government for acquiring land used for construction of the Nankang Software Park. The right of superficies is available for 50 years from the registration date. Land and building shall be returned to Taipei City Government unconditionally upon expiry of the right of superficies. Century Development Corporation’s right-of -use-assets are amortized over the useful life of right of superficies of 50 years.

• C. On July 4, 2018, the Group’s subsidiary, Century Biotech Development Corp., completed the registration of right of superficies and paid royalties to the Taipei City Government for acquiring land used for the construction of the Taipei City Nangang Biotechnology Industry Cluster Development BOT Project. The right of superficies is available for 50 years from the registration date. Land and building shall be returned to the Taipei City Government unconditionally upon expiry of the right of superficies. Century Biotech Development Corp.’s prepaid rents are amortized over the useful life of right of superficies of 50 years.

• D. The Group’s subsidiary, CDC Development India Private Limited, acquired the land use right from the local government agency, KIADB, for India industrial park development. The total amount remitted for the land use right was INR $1,750,350 and acquired land ownership of certificate.

• E. For the three-month periods ended March 31, 2020 and 2019, the additions to right-of-use assets were $16,895 and $52,847 and the sublease income were $188,719 and $190,102, respectively.

• F. The carrying amount of right-of-use assets and the depreciation charge are as follows:

Land (including royalties) Buildings Machinery and equipment Transportation equipment (Business vehicles) Land (including royalties) Buildings Machinery and equipment Transportation equipment (Business vehicles)	Carryingamount Carrying amount Carryingamount March 31,2020 December 31,2019 March 31,2019 4,925,893 $ 4,840,702 $ 4,925,404 $ 2,023,570 2,211,882 2,448,847 36,859 40,476 18,168 30,720 26,104 1,822 7,017,042 $ 7,119,164 $ 7,394,241 $ Depreciation charge Depreciation charge For the three-month For the three-month period ended period ended March 31,2020 March 31,2019 34,165 $ 46,509 $ 89,682 97,066 3,485 1,204 3,404 187 130,736 $ 144,966 $	Carryingamount Carrying amount Carryingamount March 31,2020 December 31,2019 March 31,2019 4,925,893 $ 4,840,702 $ 4,925,404 $ 2,023,570 2,211,882 2,448,847 36,859 40,476 18,168 30,720 26,104 1,822 7,017,042 $ 7,119,164 $ 7,394,241 $ Depreciation charge Depreciation charge For the three-month For the three-month period ended period ended March 31,2020 March 31,2019 34,165 $ 46,509 $ 89,682 97,066 3,485 1,204 3,404 187 130,736 $ 144,966 $	Carryingamount
			March 31,2019
			4,925,404 $ 2,448,847 18,168 1,822
			7,394,241 $
		For the three-month period ended March 31,2019
		46,509 $ 97,066 1,204 187
		144,966 $

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• G. Interest expenses on lease liabilities for the three-month periods ended March 31, 2020 and 2019 were $20,276 and $25,660 and the cash outflows were $134,743 and $134,265, respectively.

• H. Expenses on short-term leases and leases of low-value assets which are not subject to IFRS 16 for the three-month periods ended March 31, 2020 and 2019 were $85,151 and $61,519; $4,916 and $1,655, respectively.

(10) Investment property

At January 1, 2020 Cost Accumulated depreciation and impairment 2020 Opening net book amount Reclassifications (transfer during the period) Depreciation charge Net exchange differences Closing net book amount At March 31, 2020 Cost Accumulated depreciation and impairment	Land Buildings and structures 1,443,225 $ 2,712,555 $ - 1,393,210) ( 1,443,225 $ 1,319,345 $ 1,443,225 $ 1,319,345 $ 71,413 64,837 - 16,551) ( 1,499 1,364) ( 1,516,137 $ 1,366,267 $ 1,516,137 $ 2,784,305 $ - 1,418,038) ( 1,516,137 $ 1,366,267 $

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					Buildings and	Buildings and
		Land			structures				Total
At January 1, 2019
Cost	$	1,435,178		$	2,705,183			$	4,140,361
Accumulated depreciation and
impairment			-	(	1,356,587)			(	1,356,587)
	$	1,435,178		$	1,348,596			$	2,783,774
2019
Opening net book amount	$	1,435,178		$	1,348,596			$	2,783,774
Reclassifications			12,545			5,629			18,174
(transfers during the period)
Depreciation charge			-	(		16,866)		(	16,866)
Net exchange differences			642			13,758			14,400
Closing net book amount	$	1,448,365		$	1,351,117			$	2,799,482
At March 31, 2019
Cost	$	1,448,365		$	2,722,992			$	4,171,357
Accumulated depreciation and
impairment			-	(	1,371,875)			(	1,371,875)
	$	1,448,365		$	1,351,117			$	2,799,482
A. Rental income from the lease of	the investment property				and direct operating expenses arising
from the investment property are shown below:
			For the three-month			For the three-month
			period ended					period ended
			March 31,		2020		March 31,2019
Rental income from
investment property		$			46,336	$			44,604
Direct operating expenses
arising from the investment
property that generated rental
income during the year		$			11,211	$			7,075
Direct operating expenses
arising from the investment
property that did not generate
rental income during the year		$			-	$			-

B. The fair value of the investment property held by the Group as at March 31, 2020, December 31, 2019 and March 31, 2019 were $4,996,199, $4,850,243 and $4,457,047, respectively, which is categorized within Level 3 in the fair value hierarchy.

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(11) Goodwill (listed as‘1780 Intangible assets’)

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2020 2019
At January 1
Cost $ 5,039,455 $ 5,233,626
Accumulated amortization and
- -
impairment
$ 5,039,455 $ 5,233,626
Opening net book amount $ 5,039,455 $ 5,233,626
Net exchange differences ( 95,859) ( 87,280)
Closing net book amount $ 4,943,596 $ 5,146,346
At March 31
Cost $ 4,943,596 $ 5,146,346
Accumulated amortization and
- -
impairment
$ 4,943,596 $ 5,146,346
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impairment	- - 4,943,596 $ 5,146,346 $	- - 4,943,596 $ 5,146,346 $	- - 4,943,596 $ 5,146,346 $
Goodwill is allocated as	follows to the Group’s cash-generating units identified according to
operating segment:
	March 31,2020	December 31,2019	March 31,2019
Heavy industrial products
division	$4,943,596	$5,039,455	$5,146,346

On October 15, 2015, the Group acquired 100% equity and obtained control over Motovario S.p.A., which is headquartered in Italy and is primarily engaged in manufacturing and sales of power transmission equipment such as motors and gear reducers, and its subsidiaries for a cash consideration of $3,989,850 (EUR 108,214 thousand). As of March 31, 2020, the goodwill arising from the merger amounted to $4,917,775.

(12) Other non-current assets

Prepayment for equipment Refundable deposits Long-term notes and accounts receivable Deferred expenses Other assets	March 31,2020 437,045 $ 291,757 160,122 34,536 66,145 989,605 $	December 31, 2019 March 31, 2019 335,714 $ 244,290 $ 305,771 238,648 170,309 240,381 65,289 89,305 59,924 77,507 937,007 $ 890,131 $

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(13) Short-term borrowings
Type of borrowings March 31, 2020 Interest rate range Collateral
Bank borrowings $ 6,083,959 0.63%~3.92% Financial assets at fair value
through other comprehensive
income, notes receivable,
land, buildings and structures
and right-of-use assets
Type of borrowings December 31, 2019 Interest rate range Collateral
Bank borrowings $ 1,857,637 0.63%~3.22% Financial assets at fair value
through other
comprehensive income,
notes receivable,
investments accounted for
under the equity method,
land, buildings and
structures, right-of-use
assets, treasury stocks
Type of borrowings March 31, 2019 Interest rate range Collateral
Bank borrowings $ 1,947,764 0.65%~3.53% Financial assets at fair value
through other
comprehensive income,
notes receivable,
investments accounted for
under the equity method,
land, buildings and
structures, right-of-use
assets, treasury stocks
(14) Financial liabilities at fair value through profit or loss
Items March 31, 2020 December 31, 2019 March 31, 2019
Current items:
Financial liabilities held
for trading
Non-hedging derivatives $ 1,600 $ 50 $ -
A. The Group recognized net (loss) income of ($1,616) and $0 on financial liabilities held for
trading for the three-month periods ended March 31, 2020 and 2019, respectively.
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• B. Explanations of the transactions and contract information in respect of non-hedged derivative financial liabilities are as follows:

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March 31, 2020

Derivative instrument	Contractperiod	Contract amount (Notionalprincipal)		Fair value
		USD 500,000 USD 500,000 USD 500,000 USD 500,000 USD 500,000 USD 500,000 USD 500,000 USD 500,000 USD 500,000 USD 500,000		257 $ 214 129 216 198 163 78 160 153 32 1,600 $

Financial instrument		December 31,2019	December 31,2019	Fair value
		Contractperiod	Contract amount (notionalprincipal)
Forward exchange contract SELL USD/BUY RMB		2019.11.26~2020.01.21	USD 500,000	$50

• C. As of March 31, 2019, the Group had no non-hedging derivative financial instrument transactions.

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

(15) Other payables

Other payables
Salary and wages payable Employees’compensation payable Dealers’ bonus commission payable Directors’ and supervisors’ remuneration payable Equipment payable Dividends payable Others	March 31,2020 1,488,509 $ 584,782 216,576 162,851 69,510 1,973,592 1,591,302 6,087,122 $	December 31,2019 1,839,455 $ 548,749 189,286 139,813 75,414 25,612 1,858,259 4,676,588 $	March 31,2019
			1,416,182 $ 613,425 205,490 162,351 169,784 25,701 1,775,709
			4,368,642 $

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(16) Bonds payable

Bonds payable
		March 31,2020	December 31,2019			March 31,2019
Issuance of bonds payable	$	4,000,000	$	4,000,000	$	4,000,000
Less: Current portion of bonds
payable (listed as ‘2320
Long-term liabilities,
current portion’)	(	3,000,000)	(	3,000,000)		-
	$	1,000,000	$	1,000,000	$	4,000,000

• A. The terms of the first domestic unsecured ordinary corporate bonds issued by the Company in 2015 are as follows:

• The Company issued $3,000,000, 1.45% first domestic unsecured ordinary corporation bonds, as approved by the regulatory authority on June 18, 2015. The bonds mature 5 years from the issue date (June 18, 2015 ~ June 18, 2020) and will be redeemed at face value at the maturity date.

• B. The terms of the first domestic unsecured ordinary corporate bonds issued by the Company in 2017 are as follows:

• The Company issued $1,000,000, 1.02% first domestic unsecured ordinary corporation bonds, as approved by the regulatory authority on September 15, 2017. The bonds mature 5 years from the issue date (September 15, 2017 ~ September 15, 2022) and will be redeemed at face value at the maturity date.

• C. On March 20, 2020, the Board of Directors resolved to issue maximum amount of $5,000,000 of unsecured ordinary corporate bonds. As of March 31, 2020, it has yet to be issued and reported to the competent authority.

- (17) Long term borrowings

Long-term borrowings
Type of borrowings	Borrowing period and repayment term	Interest rate range	Collateral	March 31, 2020
Long-term bank borrowings and commercial papers payable Less: Current portion (listed Type of borrowings	Both borrowing periods are from Aug. 4, 2016 to Dec. 31, 2035; payable based on the agreed terms. 0.8%~1.75% as ‘2320 Long-term liabilities, current portion’) Borrowing period and Interest repayment term rate range		Note Collateral	7,427,410 $ 310,836) ( 7,116,574 $ December 31, 2019
Long-term bank borrowings and commercial papers payable Less: Current portion (listed Type of borrowings	Both borrowing periods are from Aug. 4, 2016 to Dec. 31, 2021; payable based on the agreed terms. 0.48%~3.92% as ‘2320 Long-term liabilities, current portion’) Borrowing period and Interest repayment term rate range		Note Collateral	7,084,752 $ 410,798) ( 6,673,954 $ March 31, 2019
Long-term bank borrowings and commercial papers payable Less: Current portion (listed	Both borrowing periods are from Aug. 4, 2016 to Aug. 4, 2021; payable based on the agreed terms. 0.49%~2.27% as ‘2320 Long-term liabilities, current portion’)		Note	8,432,911 $ 1,146,799) ( 7,286,112 $

~47~

• Note: Details of the Group’s assets pledged to others as collateral for borrowings are provided in Note 8.

• A. Under the long-term contracts with certain financial institutions, the Group is required to maintain certain financial ratios and capital requirements as well as meet certain restrictions relative to significant asset acquisitions or disposals.

• B. As of March 31, 2020, December 31, 2019 and March 31, 2019, the Group has undrawn borrowing facilities of $22,918,781, $20,190,686 and $20,015,954, respectively.

• (18) Pensions

• A.(a) The Company and its domestic subsidiaries have a defined benefit pension plan in accordance with the Labor Standards Act, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Act. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company and its domestic subsidiaries contribute monthly an amount equal to 2% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company and its domestic subsidiaries would assess the balance in the aforementioned labor pension reserve account by December 31, every year. If the account balance is not sufficient to pay the pension calculated by the aforementioned method to the employees expected to qualify for retirement in the following year, the Company and its domestic subsidiaries will make contribution to cover the deficit by next March.

• (b) The pension costs under the defined contribution pension plans of the Group for the threemonth periods ended March 31, 2020 and 2019 were $5,878 and $8,797, respectively.

• (c) Expected contributions to the defined benefit pension plans of the Group for the year ending December 31, 2021 is $37,892.

• B.(a) Effective July 1, 2005, the Company and its domestic subsidiaries have 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 its domestic subsidiaries 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 Group’s mainland China subsidiaries have a defined contribution plan. Monthly contributions to an independent fund administered by the government in accordance with the pension regulations in the People’s Republic of China (PRC) are based on certain percentage of employees’ monthly salaries and wages. The contribution percentage for the three-month periods ended March 31, 2020 and 2019 ranged from 13%~20%. Other than the monthly contributions, the Group has no further obligations.

• (c) Monthly contributions to an independent fund administered by the local pension managing agency are based on a certain percentage of monthly salaries and wages of the Group’s other overseas subsidiaries’ employees.

• (d) The pension costs under the defined contribution pension plans of the Group for the threemonth periods ended March 31, 2020 and 2019 were $95,999 and $108,053, respectively.

~48~

(19) Share capital

• A. As of March 31, 2020, the Company’s authorized capital was $30,305,500, consisting of 3,030,550 thousand shares of ordinary stock, including 100 million shares reserved for employee stock options, and the paid-in capital was $19,676,929 with a par value of $10 (in dollars) per share. All proceeds from shares issued have been collected.

		2020		2019
At January 1	$	1,967,693	$	2,002,693
Share repurchased and retired		-	(	35,000)
At March 31	$	1,967,693	$	1,967,693

Note: Shares in thousands.

• B. Treasury shares

• (a) Reason for share reacquisition and movements in the number of the Company’s treasury shares are as follows:

shares are as follows:
Name of company holding the shares The Company Enhance the Company’s credit rating and the stockholders’s equity Reason for reacquisition	35,000 675,840 $ March 31, 2019 Number of shares Carrying amount
	35,000 Number of shares
		675,840 $

• (b) Pursuant to the R.O.C. Securities and Exchange Act, the number of shares bought back as treasury share 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 realised capital surplus.

• (c) 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.

• (d) Pursuant to the R.O.C. Securities and Exchange Act, treasury shares to enhance the Company’s credit rating and the stockholders’ equity should be retired within six months of acquisition.

• (e) The abovementioned treasury shares were retired for the capital reduction as resolved by the Board of Directors on May 13, 2019.

• C. All of the shares of the Company held by the Company’s subsidiaries-Tong-An Investment Co., Ltd. and An-Tai International Investment Co., Ltd. were acquired in or before 2000 for the purpose of general investment. After a regulation of the Company Act was amended in 2000 wherein the shares of the holding company shall not be purchased nor be accepted as a security or pledge by its subsidiary, the two subsidiaries did not acquire additional shares of the Company. In addition, Top-Tower Enterprises Co., Ltd. also held the Company’s shares before the Company obtained control of Top-Tower Enterprises Co., Ltd. in August, 2013, and did not acquire additional shares of the Company again after the Company obtained its control. Also, the subsidiary - Taiwan Pelican Express Co., Ltd. is a subsidiary over which the Company has substantial control. The Company, however, holds less than 50% of the subsidiary’s shares. Therefore, the shares of the Company acquired by the subsidiary are free from the restrictions of Article 167 of Company Act and such investment on the Company’s shares is a general investment. As of March 31, 2020, December 31, 2019 and March 31, 2019, book value of the shares of the Company held by the three subsidiaries amounted to $511,710, 321,563 and $321,563, respectively.

Details are as follows:

~49~

Tong-An Investment Co., Ltd. Taiwan Pelican Express Co., Ltd An-Tai International Investment Co., Ltd. Top-Tower Enterprises Co., Ltd. Tong-An Investment Co., Ltd. An-Tai International Investment Co., Ltd. Top-Tower Enterprises Co., Ltd. Tong-An Investment Co., Ltd. An-Tai International Investment Co., Ltd. Top-Tower Enterprises Co., Ltd.		Shares Cost Market value (in thousands) (in dollars) (in dollars) 19,540 14.92 $ 24.10 $ 7,070 26.89 24.10 2,826 10.37 24.10 77 9.37 24.10 29,513 Shares Cost Market value (in thousands) (in dollars) (in dollars) 19,540 14.92 $ 26.20 $ 2,826 10.37 26.20 77 9.37 26.20 22,443 March 31,2020 December 31,2019 March 31,2019	Shares Cost Market value (in thousands) (in dollars) (in dollars) 19,540 14.92 $ 24.10 $ 7,070 26.89 24.10 2,826 10.37 24.10 77 9.37 24.10 29,513 Shares Cost Market value (in thousands) (in dollars) (in dollars) 19,540 14.92 $ 26.20 $ 2,826 10.37 26.20 77 9.37 26.20 22,443 March 31,2020 December 31,2019 March 31,2019
		Shares (in thousands) 19,540 2,826 77 22,443	Cost Market value (in dollars) (in dollars) 14.92 $ 21.00 $ 10.37 21.00 9.37 21.00

(20) Capital surplus

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

(21) Retained earnings and legal reserve

• A. As stipulated in the Company’s Articles of Incorporation, the current earnings, if any, shall be distributed in the following order:

• (a) Payment of taxes and duties.

• (b) Covering prior years’ accumulated deficit, if any.

• (c) After deducting items (a) and (b), set aside 10% of the remaining amount as legal reserve.

• (d) Set aside a certain amount as special reserve, if any.

• (e) Distributing the remaining amount plus prior years’ retained earnings to shareholders according to their shareholding percentage. The distribution rate is principally 80%, of which cash dividend shall account for 5% ~ 50% of the distributed amount.

• B. The Company’s dividend policy is summarized below:

• The Company’s operating environment is in the stable growth stage. However, investee companies are still in the growth stage. In view of the future plant expansion and investment plans, the appropriations of earnings are based on the distributable earnings and appropriate principally 80% to shareholders as dividends. Cash dividends shall account for at least 5% up to maximum of 50% of total dividends distributed.

~50~

• C. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company’s paid-in capital.

  • D. (a) 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.

• (b) The amounts previously set aside by the Company as special reserve on initial application of IFRSs in accordance with Jin-Guan-Zheng-Fa-Zi Letter No. 1010012865, dated April 6, 2012, shall be reversed proportionately when the relevant assets are used, disposed of or reclassified subsequently. Such amounts are reversed upon disposal or reclassified if the assets are investment property of land, and reversed over the use period if the assets are investment property other than land. As of March 31, 2020, the amount previously set aside as special reserve on initial application of IFRSs and yet to be reversed amounted to $3,640,779.

• E. The appropriations of the 2019 net income was proposed by the Board of Directors on March 17, 2020 while the appropriations of the 2018 net income was resolved by the stockholders on June 14, 2019 as follows:

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For the year ended December 31, 2019 For the year ended December 31, 2018
Dividend per share Dividend per share
Amount (in dollars) Amount (in dollars)
----- End of picture text -----

(22)

Other equity items Legal reserve 322,172 $ 315,009 $ Cash dividends 1,948,016 0.99 $ 1,770,924 0.9 $ Unrealized gains Currency on valuation translation Total At January 1, 2020 6,247,481 $ 2,676,725) ($ 3,570,756 $ Unrealized gains and losses on financial assets: –Group 961,371) ( - 961,371) ( –Associates 4,651) ( - 4,651) ( Revaluation transferred to retained earnings 249) ( - 249) ( Currency translation differences: –Group - 398,075) ( 398,075) ( At March 31, 2020 5,281,210 $ 3,074,800) ($ 2,206,410 $

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(23)

Operating revenue Unrealized gains Currency on valuation translation Total At January 1, 2019 3,006,782 $ 1,901,724) ($ 1,105,058 $ Unrealized gains and losses on financial assets: –Group 2,227,454 - 2,227,454 –Associates 7,113 - 7,113 Revaluation transferred to retained earnings 21,280) ( - 21,280) ( Currency translation differences: –Group - 196,003 196,003 At March 31, 2019 5,220,069 $ 1,705,721) ($ 3,514,348 $ For the three-month For the three-month period ended period ended March 31,2020 March 31,2019 Revenue from customers 10,373,192 $ 11,419,146 $ Others-rental revenue 210,742 199,957 Others-gain on financial assets at fair value through profit or loss 80,996 87,944 10,664,930 $ 11,707,047 $

A. Disaggregation of revenue from customers

The Group derives revenue from the transfer of goods and services over time and at a point in time in the following major product lines:

Sales of heavy industrial products Sales of home appliances Others Service revenue Construction contract		For the three-month period ended March 31,2020 Revenue from external customer contracts		For the three-month period ended March 31,2019 Revenue from external customer contracts
		$ 6,071,648 1,138,749 372,625 1,940,089 850,081 10,373,192 $		$ 7,288,877 1,217,546 656,025 1,770,494 486,204 11,419,146 $

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• B. The Group has recognized the following revenue-related contract assets and liabilities: Revenue recognized that was included in the contract liability balance at the beginning of the period

	period
(24) (25)	Other income Other gains and losses For the three-month For the three-month period ended period ended March 31,2020 March 31,2019 Revenue recognized that was included in the contract liability balance at the beginning of the period Electromechanical engineering contracts - $ - $ Advance sales receipts 292,464 287,909 Royalty received in advance - 484 292,464 $ 288,393 $ For the three-month For the three-month period ended period ended March 31, 2020 March 31, 2019 Interest income from bank deposits 70,738 $ 68,487 $ Rental revenue 43,534 46,011 Dividend income 1,015 124 Other non-operating income 46,120 66,275 161,407 $ 180,897 $ For the three-month For the three-month period ended period ended March 31,2020 March 31,2019 (Gain) loss on disposal of property, plant and equipment 2,075 $ 551) ($ Gain on disposal of investments - 5,491 Net currency exchange (loss) gain 7,910) ( 6,664 (Loss) gain on financial assets at fair value through profit or loss 146,420) ( 5,511 Loss on financial liabilities at fair value through profit or loss 1,616) ( - Miscellaneous disbursements 84,191) ( 90,757) ( ($238,062) ($73,642)		For the three-month period ended March 31,2019 - $ 287,909 484
			288,393 $

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(26) Finance costs

(26)	Finance costs
(27)	Expenses by nature (including employee benefit expense) For the three-month For the three-month period ended period ended March 31,2020 March 31,2019 Interest expense 64,729 $ 70,612 $ Other finance expenses 944 1,419 65,673 $ 72,031 $ For the three-month For the three-month period ended period ended March 31,2020 March 31, 2019 Wages and salaries 2,010,739 $ $ 2,086,357 Employees’ compensation and directors’ remuneration 104,694 112,206 Labor and health insurance fees 243,341 245,323 Pension costs 101,877 116,850 Other personnel expenses 106,976 103,389 Depreciation charges on property, plant and equipment as well as investment property 329,790 335,416 Depreciation charges on right-of -use assets and amortization charges on intangible assets 155,013 177,883
	Wages and salaries Employees’ compensation and directors’ remuneration Labor and health insurance fees Pension costs Other personnel expenses Depreciation charges on property, plant and equipment as well as investment property Depreciation charges on right-of -use assets and amortization charges on intangible assets

• A. According to the Articles of Incorporation of the Company, a ratio of distributable profit of the current year, after covering accumulated losses, shall be distributed as employees’ compensation and directors’ remuneration. The ratio shall be 1%~10% for employees’ compensation and shall not be higher than 5% for directors’ remuneration.

• B. For the three-month periods ended March 31, 2020 and 2019, employees’ compensation was accrued at $34,523 and $51,380, respectively; while directors’ remuneration was accrued at $15,345 and $23,109, respectively. The aforementioned amounts were recognized in salary expenses.

• C. For the three-month periods ended March 31, 2020 and 2019, after considering each year’s earnings, the employee benefit expenses were accrued based on past experience and ratio. The employees’ compensation and directors’ remuneration for 2019 as resolved by the Board of Directors were in agreement with those amounts recognised in the 2019 financial statements. As of March 31, 2020, abovementioned earnings of prior year have not yet been distributed. Information about employees’ compensation and directors’ remuneration of the Company as resolved by the Board of Directors will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

~54~

(28) Income tax

A. Income tax expense

(a) Components of income tax expense:

come tax Income tax expense (a) Components of income tax expense:
		For the three-month		For the three-month
		period ended		period ended
		March 31,2020		March 31,2019
Current tax:
Current tax on profits for the
period	$	156,386	$	232,669
Prior year income tax
overestimation	(	104,906)		-
Total current tax		51,480		232,669
Deferred tax:
Origination and reversal of
temporary differences		47,533		30,341
Total deferred tax		47,533		30,341
Income tax expense	$	99,013	$	263,010
(b) The income tax (charge)/credit relating	to components of other comprehensive income is as
follows:
		For the three-month		For the three-month
		period ended		period ended
		March 31,2020		March 31,2019
Currency translation differences	($	21,126)	$	1,773

B. As of March 31, 2020, the Company and its subsidiaries’ income tax returns through various years between 2014 and 2018, respectively, have been assessed and approved by the Tax Authority.

(29) Earnings per share

Authority. Earnings per share
Basic (Diluted) earnings per share Profit attributable to ordinary shareholders of the parent Basic (Diluted) earnings per share Profit attributable to ordinary shareholders of the parent	For the three-monthperiod ended March 31,2020
	Weighted average number of ordinary shares outstanding Earnings per Amount after tax (in thousands) share(in dollars) $446,995 1,943,275 $0.23 For the three-monthperiod ended March 31,2019		Earnings per share(in dollars)
			$0.23
	Amount after tax $634,584	Weighted average number of ordinary shares outstanding (in thousands) 1,964,298	Earnings per share(in dollars)
			$0.32

~55~

(30) Supplemental cash flow information

A. Investing activities with partial cash payments:

	A. Investing activities with partial cash payments:	A. Investing activities with partial cash payments:	A. Investing activities with partial cash payments:	A. Investing activities with partial cash payments:
(31	B. Financing activities with no cash flow effects )Changes in liabilities from financing activities For the three-month For the three-month period ended period ended March 31, 2020 March 31, 2019 Acquisition of property, plant and equipment 81,702 $ 71,939 $ Add: Payables at beginning of the period 75,414 181,192 Less: Payables at end of the period 69,510) ( 169,784) ( Cash paid 87,606 $ 83,347 $ For the three-month For the three-month period ended period ended March 31,2020 March 31,2019 Cash dividends declared 1,948,016 $ - $ Dividends Long-term Liabilities from Short-term payable borrowings Lease financing borrowings (Note 1) (Note 2) liabilities activities -gross January 1, 2020 1,857,637 $ 25,612 $ 7,084,752 $ 5,219,092 $ 14,187,093 $ Interest expenses on lease liabilities - - - 20,276 20,276 Remeasurement - - - 5,172) ( 5,172) ( Changes in cash flow from financing activities 4,226,322 36) ( 342,658 134,743) ( 4,434,201 Cash dividends declared - 1,948,016 - - 1,948,016 Effect of foreign exchange - - - 27,799) ( 27,799) ( March 31, 2020 6,083,959 $ 1,973,592 $ 7,427,410 $ 5,071,654 $ 20,556,615 $ Dividends Long-term Liabilities from Short-term payable borrowings Lease financing borrowings (Note 1) (Note 2) liabilities activities -gross January 1, 2019 1,994,360 $ 25,711 $ 7,650,846 $ - $ 9,670,917 $ Effect of retrospective application - - - 5,367,109 5,367,109 Interest expenses on lease liabilities - - - 25,660 25,660 Recognised in right-of-use assets - - - 52,847 52,847 Changes in cash flow from financing activities 46,596) ( 10) ( 782,065 134,265) ( 601,194 Effect of foreign exchange - - - 5,438 5,438 March 31, 2019 1,947,764 $ 25,701 $ 8,432,911 $ 5,316,789 $ 15,723,165 $
		5,071,654 $ Lease liabilities - $ 5,367,109 25,660 52,847 134,265) ( 5,438 5,316,789 $		20,556,615 $ Liabilities from financing activities -gross 9,670,917 $ 5,367,109 25,660 52,847 601,194 5,438 15,723,165 $

~56~

Note 1: Shown as ‘other payables’.

Note 2: Including current portion, except for bonds payable.

• (32) Details of significant non controlling interests

• A. As of March 31, 2020, December 31, 2019 and March 31, 2019, the non-controlling interest amounted to $5,693,172, $4,998,286 and $4,738,315, respectively. The information on noncontrolling interest and respective subsidiaries is as follows:

te 2: Including current portion, except for bonds payable. tails of significant non-controlling interests As of March 31, 2020, December 31, 2019 and March 31, 2019, the non-controlling interest amounted to $5,693,172, $4,998,286 and $4,738,315, respectively. The information on non- controlling interest and respective subsidiaries is as follows:	te 2: Including current portion, except for bonds payable. tails of significant non-controlling interests As of March 31, 2020, December 31, 2019 and March 31, 2019, the non-controlling interest amounted to $5,693,172, $4,998,286 and $4,738,315, respectively. The information on non- controlling interest and respective subsidiaries is as follows:	te 2: Including current portion, except for bonds payable. tails of significant non-controlling interests As of March 31, 2020, December 31, 2019 and March 31, 2019, the non-controlling interest amounted to $5,693,172, $4,998,286 and $4,738,315, respectively. The information on non- controlling interest and respective subsidiaries is as follows:
Name of subsidiary Principal place of business Amount Ownership Amount Ownership Tecom Co., Ltd. R.O.C $ 276,443 36.48% $ 351,444 36.48% Taiwan Pelican Express Co., Ltd. R.O.C 1,225,841 67.85% 1,173,296 67.85% Century Development Corporation R.O.C 2,703,840 47.25% 2,004,888 47.25% Information Technology Total Services Co., Ltd. R.O.C 278,702 50.99% 268,520 50.99% Non-controllinginterest March 31,2020 December 31,2019 Name of subsidiary Principal place of business Amount Ownership Tecom Co., Ltd. R.O.C $ 362,519 36.48% Taiwan Pelican Express Co., Ltd. R.O.C 1,117,986 67.85% Information Technology Total Services Co., Ltd. R.O.C 95,210 32.89% Century Development Corporation R.O.C 1,891,013 47.25% Non-controllinginterest March 31,2019
	Amount $ 362,519 1,117,986 95,210 1,891,013
		36.48% 67.85% 32.89% 47.25%

• B. The Group’s subsidiary - Information Technology Total Services Co., Ltd. raised additional capital amounting to $147,444 by issuing 5,084 thousand common shares through private placement at an issuance price of $29 (in dollars) per share with the effective date set on May 15, 2019. Additionally, the subsidiary received the proceeds, less any necessary issuance costs, of $79,342 from issuing 1,902 thousand common shares with the effective date set on December 24, 2019. The aggregate capital increase raised by the subsidiary during the year ended December 31, 2019 resulted in an increase in the Group’s non-controlling interest by $226,786.

~57~

• C. The Group’s subsidiary - Century Biotech Development Corp. increased its cash capital amounting to $1,800,000 with the effective date set on March 31, 2020. The Group did not acquire shares proportionally to its interest. The transactions with non-controlling interest resulted in an increase in capital surplus by $9,789 and the increase in capital contributed by non-controlling interest was $700,000.

• D. Summarized financial information of the subsidiaries: Balance sheets

Balance sheets
					Tecom Co.,Ltd.
			March 31,2020	December 31,2019			March 31,2019
Current assets	$		1,001,131	$	1,121,509	$	1,291,748
Non-current assets			938,661		1,109,649		1,110,190
Current liabilities	(		931,200)	(	1,013,097)	(	1,214,898)
Non-current liabilities	(		599,745)	(	604,596)	(	531,139)
Total net assets		$	408,847	$	613,465	$	655,901
			Taiwan		Pelican Express Co.,	Ltd.
			March 31, 2020	December 31,2019			March 31,2019
Current assets	$		1,562,710	$	1,749,165	$	1,675,476
Non-current assets			1,995,172		1,830,120		1,866,426
Current liabilities	(		798,151)	(	871,696)	(	857,818)
Non-current liabilities	(		953,038)	(	978,339)	(	1,035,965)
Total net assets	$		1,806,693	$	1,729,250	$	1,648,119
			Century		Development Corporation
			March 31,2020	December 31,2019			March 31,2019
Current assets	$		2,450,129	$	1,005,500	$	811,388
Non-current assets			7,757,027		7,693,801		7,817,031
Current liabilities	(		856,998)	(	696,540)	(	585,661)
Non-current liabilities	(		2,938,175)	(	2,955,297)	(	3,016,916)
Total net assets	$		6,411,983	$	5,047,464	$	5,025,842
			Information	Technology Total Services			Co., Ltd.
			March 31,2020	December 31,2019			March 31,2019
Current assets		$	632,200	$	635,761	$	400,915
Non-current assets			295,757		311,364		381,562
Current liabilities	(		365,136)	(	229,859)	(	362,116)
Non-current liabilities	(		21,056)	(	195,782)	(	128,148)
Total net assets	$		541,765	$	521,484	$	292,213

~58~

Statements of comprehensive income

			Tecom Co.,Ltd.	Tecom Co.,Ltd.	Tecom Co.,Ltd.
		For the three-month			For the three-month
		period ended			period ended
		March 31,2020			March 31,2019
Revenue		$	251,103		446,327 $
Loss before income tax	(		27,580)	(		34,905)
Income tax expense			-	(		137)
Loss for the period	(		27,580)	(		35,042)
Other comprehensive (loss)
income (net of tax)	(		177,038)			94,352
Total comprehensive (loss)
income for the period	($		204,618)		$	59,310
Comprehensive income
attributable to non-
controlling interest		$	10,361		$	19,940
		Taiwan Pelican Express Co.,Ltd.
		For the three-month			For the three-month
		period ended			period ended
		March 31,2020			March 31,2019
Revenue	$		967,253	895,500 $
Profit before income tax			67,522			48,852
Income tax expense	(		12,978)	(		11,118)
Profit for the period			54,544			37,734
Other comprehensive income
(net of tax)			22,899			30,576
Total comprehensive income
for the period	$		77,443	$		68,310
Comprehensive income
attributable to non-controlling
interest	$		37,656	$		25,651

~59~

		CenturyDevelopment Corporation	CenturyDevelopment Corporation	CenturyDevelopment Corporation
		For the three-month		For the three-month
		period ended		period ended
		March 31,2020		March 31,2019
Revenue	$	223,053	$	215,984
Profit before income tax		84,954		77,761
Income tax expense	(	18,115)	(	17,495)
Profit for the period		66,839		60,266
Other comprehensive (loss)
income (net of tax)	(	30,861)		11,131
Total comprehensive income
for the period	$	35,978	$	71,397
Comprehensive income
attributable to non-controlling
interest	$	36,572	$	34,902
		Information Technology	Total Services Co.,Ltd.
		For the three-month		For the three-month
		period ended		period ended
		March 31,2020		March 31,2019
Revenue	$	426,673	$	323,270
Profit before income tax		24,058		18,413
Income tax expense	(	3,703)	(	3,291)
Profit for the period		20,355		15,122
Other comprehensive (loss)
income (net of tax)	(	74)		509
Total comprehensive income
for the period	$	20,281	$	15,631
Comprehensive income
attributable to non-controlling	$	10,133	$	3,374
interest

~60~

Statements of cash flows

Statements of cash flows
		Tecom Co.,		Ltd.
		For the three-month		For the three-month
		period ended		period ended
		March 31,2020		March 31,2019
Net cash provided by
(used in) operating activities	$	9,906	($	86,647)
Net cash (used in) provided
by investing activities	(	23,430)		13,667
Net cash (used in) provided by
financing activities	(	30,166)		71,225
Decrease in cash and cash
equivalents	(	43,690)	(	1,755)
Cash and cash equivalents,
beginning of period		191,761		181,889
Cash and cash equivalents, end
of period	$	148,071	$	180,134
		Taiwan Pelican Express Co.,Ltd.
		For the three-month		For the three-month
		period ended		period ended
		March 31,2020		March 31,2019
Net cash provided by operating
activities	$	75,282	$	88,218
Net cash used in investing
activities	(	208,224)	(	14,859)
Net cash used in financing
activities	(	36,574)	(	34,775)
Effect of exchange rates on
cash and cash equivalents	(	31)		63
(Decrease) increase in cash
and cash equivalents	(	169,547)		38,647
Cash and cash equivalents,
beginning of period		1,056,827		888,268
Cash and cash equivalents,
end of period	$	887,280	$	926,915

~61~

For the three-month For the three-month period ended period ended March 31,2020 March 31,2019 Net cash provided by operating activities 164,378 $ 124,608 $ Net cash used in investing activities ( 36,329) 889) ( Net cash provided by (used in) financing activities 1,390,125 ( 185,580) Effect of exchange rates on cash and cash equivalents 4,803) ( (4,355) Increase (decrease) in cash and cash equivalents 1,513,371 66,216) ( Cash and cash equivalents, beginning of period 555,324 550,896 Cash and cash equivalents, end of period 2,068,695 $ 484,680 $ For the three-month For the three-month period ended period ended March 31,2020 March 31,2019 Net cash provided by operating activities 262,444 $ 267,253 $ Net cash provided by (used in) investing activities 10,658 76,957) ( Net cash used in financing activities 182,151) ( 281,715) ( Effect of exchange rates on cash and cash equivalents 100) ( 367 Increase (decrease) in cash and cash equivalents 90,851 91,052) ( Cash and cash equivalents, beginning of period 70,474 155,225 Cash and cash equivalents, end of period 161,325 $ 64,173 $ CenturyDevelopment Corporation Information TechnologyTotal Services Co.,Ltd.	For the three-month For the three-month period ended period ended March 31,2020 March 31,2019 Net cash provided by operating activities 164,378 $ 124,608 $ Net cash used in investing activities ( 36,329) 889) ( Net cash provided by (used in) financing activities 1,390,125 ( 185,580) Effect of exchange rates on cash and cash equivalents 4,803) ( (4,355) Increase (decrease) in cash and cash equivalents 1,513,371 66,216) ( Cash and cash equivalents, beginning of period 555,324 550,896 Cash and cash equivalents, end of period 2,068,695 $ 484,680 $ For the three-month For the three-month period ended period ended March 31,2020 March 31,2019 Net cash provided by operating activities 262,444 $ 267,253 $ Net cash provided by (used in) investing activities 10,658 76,957) ( Net cash used in financing activities 182,151) ( 281,715) ( Effect of exchange rates on cash and cash equivalents 100) ( 367 Increase (decrease) in cash and cash equivalents 90,851 91,052) ( Cash and cash equivalents, beginning of period 70,474 155,225 Cash and cash equivalents, end of period 161,325 $ 64,173 $ CenturyDevelopment Corporation Information TechnologyTotal Services Co.,Ltd.	For the three-month For the three-month period ended period ended March 31,2020 March 31,2019 Net cash provided by operating activities 164,378 $ 124,608 $ Net cash used in investing activities ( 36,329) 889) ( Net cash provided by (used in) financing activities 1,390,125 ( 185,580) Effect of exchange rates on cash and cash equivalents 4,803) ( (4,355) Increase (decrease) in cash and cash equivalents 1,513,371 66,216) ( Cash and cash equivalents, beginning of period 555,324 550,896 Cash and cash equivalents, end of period 2,068,695 $ 484,680 $ For the three-month For the three-month period ended period ended March 31,2020 March 31,2019 Net cash provided by operating activities 262,444 $ 267,253 $ Net cash provided by (used in) investing activities 10,658 76,957) ( Net cash used in financing activities 182,151) ( 281,715) ( Effect of exchange rates on cash and cash equivalents 100) ( 367 Increase (decrease) in cash and cash equivalents 90,851 91,052) ( Cash and cash equivalents, beginning of period 70,474 155,225 Cash and cash equivalents, end of period 161,325 $ 64,173 $ CenturyDevelopment Corporation Information TechnologyTotal Services Co.,Ltd.
		484,680 $ For the three-month period ended March 31,2019 267,253 $ 76,957) ( 281,715) ( 367 91,052) ( 155,225 64,173 $ Total Services Co.,Ltd.
	For the three-month period ended March 31,2020 262,444 $ 10,658 182,151) ( 100) ( 90,851 70,474 161,325 $

~62~

7. Related Party Transactions

(1) Names of related parties and relationship

Names of relatedparties	Relationship with the Group Names of relatedparties Associates Xianlaoman Food Services Co., Ltd. (Xianlaoman ) 〃 Teco Group Science Techology (Han Zou) Co., Ltd. (Teco Group) 〃 Shanghai Tungpei Enterprise Co., Ltd. (Shanghai Tungpei) 〃 Greyback International Property,Inc. (Greyback) 〃 ABC Cooking Studio Taiwan Co., Ltd. 〃 Qingdao Teco Century Advanced HighTech Mechatronics Co., Ltd. (Teco Century) 〃 〃 Teco EV Philippines Corporation (Teco EV) 〃 Fujio Food System Taiwan Co., Ltd. (Fujio Food) 〃 Foremost International Food & Beverage Co., Ltd. (Foremost Food) 〃 Teco Technology & Marketing Center Co., Ltd. (TTMC) 〃 An-shin Food Service Co., Ltd. (An-shin) 〃 Teco Image System Co., Ltd. (Teco Image) 〃 Ming Full Ltd. (Ming Food) 〃 Taiwan Art & Business Interdisciplinary Foundation (Taiwan Art ) 〃 Xia Men An-Shin Food ManagementCo., Ltd. (Xia Men An-Shin) 〃 Teco Technology Foundation (Teco Found) 〃 Koryo Electronics Co., Ltd. (Koryo) 〃 YUBAN & COMPANY	Relationship with the Group
Teco Middle East Electrical & Machinery Co., Ltd. (TME) Teco (PHILIPPINES) 3C & Appliances, Inc. (Teco 3C) Jiangxi Teco - Lead PM Generator (Jiangxi Teco - Lead) (Note 1) Taian-Jaya Electric Sdn. Bhd. (Taian-Jaya) Hubbell-Taian Co., Ltd. (Hubbell) (Note 2) An-Sheng Travel Co., Ltd. Le-Li Co., Ltd. (Le-Li) Lien Chang Electronic Enterprise Co., Ltd. (Lien Chang) Tung Pei Industrial Co., Ltd. (Tung Pei) Taian Electric Co., Ltd. (Taian Electric) Royal Host Taiwan Co., Ltd. (Royal Host) Taisan Electric Co.,Ltd. (Taisan Electric) Tension Envelope Taiwan Co., Ltd. (Tension) Creative Sensor Inc. (Creative Senso) Kogle Foods Co., Ltd. (Kogle) TG Teco Vacuum Insulated Glass (TG Teco Vacuum Insulated Glass) Teco-Motech Co., Ltd. (Teco-Motech) Kuen Ling Co., Ltd. (Kuen Ling) Shanghai Xiangseng Mechanical and Electrical Trading Co., Ltd. (Shanghai Xiangseng)		Associates 〃 〃 〃 〃 〃 〃 〃 〃 〃 Other related parties 〃 〃 〃 〃 〃 〃 〃

Note 1: The Company has been liquidated in 2019. Note 2: The investee was dissolved on April 14, 2020.

~63~

(2) Significant related party transactions

A. Operating revenue:

gnificant related party transactions Operating revenue:
		For the three-month		For the three-month
		period ended		period ended
		March 31, 2020		March 31, 2019
Sales of goods and services:
Associates	$	107,142	$	83,884
Other related parties		87,119		87,466
	$	194,261	$	171,350

The Group sells commodities and services to related parties based on mutually agreed selling price and terms as there is no similar transaction to be compared with. B. Purchases of goods:

Purchases of goods:
Purchases of goods: Associates Other related parties	For the three-month period ended March 31,2020 78,190 $ 35 78,225 $	For the three-month period ended March 31,2019
		67,656 $ 54
		67,710 $

The purchase terms, including pricing and payments, were based on mutual agreement and have no similar transaction to be compared with.

C. Receivables from related parties:

Receivables from related parties: Associates Other related parties Less: Reclassified to other receivables Other receivables - transfer of accounts receivable that were past due Associates Associates TTMC Others Other related parties Other receivables - others	March 31,2020	December 31,2019	March 31,2019	March 31,2019
	$ 258,092 60,476 (10,917) 307,651 10,917 51,424 47,486 5,549 104,459 115,376 $423,027	$ 185,931 53,432 (5,613) 233,750 5,613 50,798 19,706 5,252 75,756 81,369 $315,119	$ 147,810 95,602 (5,870) 237,542 5,870 51,834 30,466 5,978 88,278 94,148 $331,690
				5,870
				51,834 30,466 5,978
				88,278
				94,148
				$331,690

(a) The receivables from related parties arise mainly from sale transactions. The receivables are

~64~

due 30 to 90 days after the date of sale, unsecured in nature and bear no interest. There are no provisions held against receivables from related parties.

• (b) The aforementioned accounts receivable that were past due were $10,917, $5,613 and $5,870 as of March 31, 2020, December 31, 2019 and March 31, 2019, respectively. The ageing of the past due accounts receivable is beyond 90 days.

• (c) The other receivables arise mainly from other receivables for rental.

D. Payables to related parties:

the past due accounts receivable is beyond 90 days. (c) The other receivables arise mainly from other receivables for rental. Payables to related parties:
March 31, 2020 December 31,2019 Payables to related parties: Associates $ 164,032 $ 209,719 Other related parties - 26 $ 164,032 $ 209,745	March 31, 2019
	$ 160,121 1,039 $161,160

The payables to related parties arise mainly from purchase transactions and are due 180 days after the date of purchase. The payables bear no interest.

E. Rent income

E. Rent income	E. Rent income
F. Endorsements and guarantees (3) Key management compensation Associates Other related parties Associates Salaries and other short-term employee benefits Post-employment benefits	F. Endorsements and guarantees Key management compensation Associates Other related parties Associates	provided to related parties: For the three-month For the three-month period ended period ended March 31,2020 March 31,2019 7,852 $ 7,156 $ 6,521 6,361 14,373 $ 13,517 $ March 31, 2020 December31,2019 March31,2019 $471 $ 43,477 $ 42,405 For the three-month For the three-month period ended period ended March 31,2020 March 31,2019 121,642 $ 146,808 $ 8,125 2,671 129,767 $ 149,479 $	For the three-month period ended March 31,2019
			$ $		7,156 6,361
				13,517
				March31,2019
		$

~65~

8. Pledged Assets

Pledged Assets
Pledged asset		March 31,2020 248,165 $ 142,456 264,679 388,125 160,000 83,342 3,201,159 891,062 28,429 - 5,407,417 $ -	December 31,2019 344,369 $ 176,735 263,477 460,800 150,000 110,299 3,287,115 897,465 26,155 247,091 6,179,806 $ 216,300	Purpose
Notes receivable Other current assets Demand deposits Time deposits Financial assets at fair value through other comprehensive income - non-current Far Eastone Telecommunications Co., Ltd. Taiwan High Speed Rail Corporation Non-current financial assets at amortised cost Property, plant, and equipment Land Buildings and structures Right-of-use assets Other non-current assets Refundable deposits Treasury stock				Short-term borrowings, merchandise loans, deposits for acceptance bill Short-term borrowings, deposits for renting warehouses, deposits for acceptance bill, provisional seizure guarantee of compensation, exercise guarantee for construction, warranty margin, engineering bond, tariff guarantee, merchandise loans and seizure guarantee Engineering bond, merchandise loans, taniff guaranttees, long-term and short-term borrowings, engineering guarantees, customs security deposit, warranty margin, exercise guarantee for construction and quality assurance for product sales Long-term borrowings Performance guarantee Long-term borrowings, short-term borrowings 〞 〞 Exercise guarantee or warranty for construction and exercise guarantee for tender Short-term borrowings Short-term borrowings and commercial papers payable

~66~

Pledged asset		March 31,2019	Purpose
Notes receivable Other current assets Demand deposits Time deposits Financial assets at fair value through other comprehensive income - non-current Teco Image System Co., Ltd. Far Eastone Telecommunications Co., Ltd. Innolux Corporation Taiwan High Speed Rail Corporation Non-current financial assets at amortised cost Investments accounted for under the equity method Creative Sensor Inc. Property, plant, and equipment Land Buildings and structures Right-of-use assets Other non-current assets Refundable deposits Treasury stock		97,899 $ 65,580 426,003 18,720 219,900 21,753 583,995 150,000 123,784 112,765 3,372,473 916,674 12,223 247,091 6,368,860 $	Short-term borrowings, merchandise loans, deposits for acceptance bill Short-term borrowings, deposits for renting warehouses, deposits for acceptance bill, provisional seizure guarantee of compensation, exercise guarantee for construction, warranty margin, engineering bond, tariff guarantee, merchandise loans and seizure guarantee Engineering bond, merchandise loans, taniff quarattce, long-term and short-term borrowings, engineering guarantees, customs security deposit, warranty margin, exercise guarantee for construction and quality assurance for product sales Short-term borrowings and commercial papers payable 〞 Long-term borrowings 〞 Performance guarantee Short-term borrowings Long-term borrowings, short-term borrowings 〞 〞 Exercise guarantee or warranty for construction and exercise guarantee for tender Short-term borrowings

~67~

9. Significant Contingent Liabilities and Unrecognized Contract Commitments

• (1) Contingencies

None.

(2) Commitments

• A. Capital expenditures contracted for at the balance sheet date but not yet incurred are as follows:

		March 31, 2020	December 31, 2019	December 31, 2019		March 31, 2019
Property, plant and equipment	$	1,910,170	$	1,769,644	$	344,875
Intangible assets		-		1,443		18,974
	$	1,910,170	$	1,771,087	$	363,849

• C. As of March 31, 2020, the outstanding usance L/C used for acquiring raw materials and equipment was $571,347.

10. Significant Disaster Loss

None.

11. Significant Events after the Balance Sheet Date

The Group is a multinational corporation and the production and sales in some countries were impacted by the outbreak of the new coronavirus (COVID 19) due to the preventive measures, including the reduction in working days and business activities, taken by the governments of some countries such as India, Malaysia and Italy to control the pandemic. The Group has taken countermeasures by keeping close contacts with clients and suppliers, strengthening employee health management and continually focusing on the situation of the pandemic to mitigate the impact on its operations. However, the extent of actual impact would depend on the subsequent development of the pandemic.

12. Others

(1) Capital management

The Group’s objectives when managing capital are based on the industrial scale, considering industrial future growth and product development, and setting appropriate market share, as well as plan of corresponding capital expenditure, calculation of operating capital needed for financial operations, and considering operating profit and cash inflows arising from product competitiveness, to determine appropriate capital structure.

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(2) Financial instruments A. Financial instruments by category Financial assets Financial assets at fair value through profit or loss Financial assets mandatorily measured at fair value through profit or loss Financial assets at fair value through other comprehensive income Designation of equity instrument Financial assets at amortised cost /Loans and receivables Cash and cash equivalents Financial assets at amortised cost Notes receivable Accounts receivable Other receivables Guarantee deposits paid Financial liabilities Financial liabilities at fair value through profit or loss Financial liabilities held for trading Financial liabilities at amortised cost Short-term borrowings Notes payable Accounts payable Other payables Lease liabilites Bonds payable (including current portion) Long-term borrowings (including current portion)	March 31,2020 2,929,898 $ 14,563,262 $ 23,759,597 $ 409,410 951,488 8,336,202 654,102 291,757 34,402,556 $ $1,600 6,083,959 $ 321,867 6,099,423 6,087,122 5,071,654 4,000,000 7,427,410 35,091,435 $	December 31,2019 2,418,162 $ 15,538,746 $ 19,111,371 $ 377,256 1,120,188 9,012,340 579,246 305,771 30,506,172 $ $50 1,857,637 $ 365,837 6,912,441 4,676,588 5,219,092 4,000,000 7,084,752 30,116,347 $		March 31,2019 2,553,505 $ 14,637,012 $ 17,519,287 $ 183,428 1,027,563 9,164,150 513,874 238,648 28,646,950 $ $-
				1,947,764 $ 148,974 6,786,865 4,368,642 5,316,790 4,000,000 8,432,911 31,001,946 $

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• B. Financial risk management policies

• (a) The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. To minimise any adverse effects on the financial performance of the Group, derivative financial instruments, such as foreign exchange forward contracts are used to hedge certain exchange rate risk. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments.

• (b) Risk management is carried out by a central treasury department (Group treasury) under policies approved by the Board of Directors. Group treasury identifies, evaluates and hedges financial risks in close cooperation with the Group’s operating units. The Board provides written principles for overall risk management, as well as written policies covering specific areas and matters, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

• (c) Information about derivative financial instruments that are used to hedge certain exchange rate risk are provided in Note 6(2) and Note 6(14).

• 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 functional currency, primarily with respect to the USD and RMB. Foreign exchange risk arises from recognized assets and liabilities.

• ii. Management has set up a policy to require group companies to manage their foreign exchange risk against their functional currency. The companies are required to hedge their entire foreign exchange risk exposure with the Group treasury. Exchange rate risk is measured through a forecast of highly probable USD and RMB expenditures. Forward foreign exchange contracts are adopted to minimise the volatility of the exchange rate affecting cost of forecast inventory purchases.

• iii. The Group hedges foreign exchange rate by using forward exchange contracts. However, the Group does not adopt hedging accounting. Details of financial assets or liabilities at fair value through profit or loss are provided in Note 6(14).

• iv. The Group’s businesses involve some non-functional currency operations (the Company’s and certain subsidiaries’ functional currency: NTD; other certain subsidiaries’ functional currency: USD and RMB). The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

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March 31, 2020

Financial assets Monetary items USD:NTD USD EUR:NTD EUR USD:RMB USD JPY:NTD JPY RMB:NTD RMB USD:MYR USD AUD:NTD AUD CAD:USD CAD Non-monetary items USD:NTD USD EUR:NTD EUR SGD:NTD SGD VND:NTD VND MYR:NTD MYR Financial liabilities Monetary items USD:NTD USD USD:RMB USD (Foreign currency: functional currency)	Foreign currency amount (In thousands)	Exchange rate	Book value(NTD)		SensitivityAnalysis	SensitivityAnalysis	Effect on other comprehensive income
					Degree of variation	Effect on profit or loss
	106,687 $ 13,086 34,430 983,621 96,566 26,761 5,910 7,077 649,492 126,855 156,479 221,101,538 14,309 54,298 4,733	30.2250 33.2400 7.1034 0.2788 4.2550 4.2898 18.6350 0.7050 30.2250 33.2400 21.2300 0.0013 7.0458 30.2250 33.2400	3,224,615 $ 434,979 1,040,647 274,234 410,888 808,851 110,133 150,811 19,630,897 4,216,647 3,322,053 287,432 100,820 1,641,157 143,055		1% 1% 1% 1% 1% 1% 1% 1% 1% 1%	32,246 $ 4,350 10,406 2,742 4,109 8,089 1,101 1,508 16,412 1,431	$ - - - - - - - - - -

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December 31, 2019
Sensitivity Analysis
Foreign currency Effect on other
amount Effect on profit comprehensive
(In thousands) Exchange rate Book value (NTD) Degree of variation or loss income
(Foreign currency: functional currency)
Financial assets
Monetary items
USD:NTD USD $ 82,388 29.98 $ 2,469,992 1% $ 24,700 $ -
EUR:NTD EUR 13,693 33.59 459,948 1% 4,599 -
USD:RMB USD 39,912 6.9640 1,196,562 1% 11,966 -
JPY:NTD JPY 924,972 0.2760 255,292 1% 2,553 -
RMB:NTD RMB 91,800 4.3050 395,199 1% 3,952 -
USD:MYR USD 24,272 4.0978 727,675 1% 7,277 -
USD:SGD USD 9,308 1.3456 279,054 1% 2,791 -
AUD:NTD AUD 5,930 21.0050 124,560 1% 1,246
CAD:USD CAD 5,065 0.7668 116,444 1% 1,164
Non-monetary items
USD:NTD USD 658,303 29.98 19,735,935
EUR:NTD EUR 125,250 33.59 4,207,132
SGD:NTD SGD 150,929 22.28 3,362,698
VND:NTD VND 242,922,038 0.0013 315,799
MYR:NTD MYR 14,387 7.3161 105,260
Financial liabilities
Monetary items
USD:NTD USD 49,274 29.98 1,477,235 1% 14,772 -
USD:RMB USD 4,896 6.9640 146,782 1% 1,468 -
USD:MYR USD 22,140 4.0978 663,757 1% 6,638 -
USD:SGD USD 3,748 1.3456 112,365 1% 1,124 -
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Financial assets Monetary items USD:NTD USD EUR:USD EUR EUR:NTD EUR USD:RMB USD USD:SGD USD JPY:NTD JPY RMB:NTD RMB USD:MYR USD SGD:MYR MYR AUD:NTD AUD SGD:NTD SGD Non-monetary items USD:NTD USD EUR:NTD EUR SGD:NTD SGD VND:NTD VND MYR:NTD MYR Financial liabilities Monetary items USD:NTD USD USD:RMB USD USD:SGD USD USD:AUD USD SGD:NTD SGD (Foreign currency: functional currency)				March 31,2019	March 31,2019	March 31,2019	March 31,2019	Effect on other comprehensive income
		Foreign currency amount (In thousands)	Exchange rate	Book value(NTD)		SensitivityAnalysis
						Degree of variation	Effect on profit or loss
		425,294 $ 3,619 15,912 32,718 6,284 967,324 81,383 8,457 5,513 5,733 7,581 633,815 122,816 146,215 259,003,846 19,340 46,482 6,904 4,609 3,490 167,413	30.8200 4.5754 34.6100 6.7293 1.3547 0.2783 4.5800 4.0744 3.0075 21.8550 22.7500 30.8200 34.6100 22.7500 0.0013 7.5643 30.8200 6.7293 1.3547 4.0744 22.7500	13,107,561 $ 125,254 550,714 1,008,369 193,673 269,206 372,734 260,645 125,421 125,295 172,468 19,534,187 4,250,661 3,326,392 336,705 146,296 1,432,575 212,781 142,049 107,562 3,808,646		1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1%	131,076 $ 1,253 5,507 10,084 1,937 2,692 3,727 2,606 1,254 1,253 1,725 14,326 2,128 1,420 1,076 38,086	- $ - - - - - - - - - - - - - - -

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• v. Total exchange (loss) gain including realized and unrealized arising from significant foreign exchange variation on the monetary items held by the Group for the three-month periods ended March 31, 2020 and 2019 amounted to ($7,910) and $6,664, respectively.

• Price risk

• i. The Group’s equity securities, which are exposed to price risk, are the held financial assets at fair value through profit or loss, financial assets at fair value through other comprehensive income. To manage its price risk arising from investments in equity securities, the Group diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Group.

• ii. The Group’s investments in equity securities comprise shares and open-end funds issued by domestic companies. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased/decreased by 5% with all other variables held constant, post-tax profit for the three-month periods ended March 31, 2020 and 2019 would have increased/decreased by $146,472 and $127,675, 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 $728,163 and $731,851, respectively, as a result of other comprehensive income classified as equity investment at fair value through other comprehensive income.

• Cash flow and fair value interest rate risk

• i. The Group’s main interest rate risk arises from long-term borrowings with variable rates, which expose the Group to cash flow interest rate risk. Group policy is to maintain at least 30% of its borrowings at fixed rate using interest rate swaps to achieve this when necessary. For the three-month periods ended March 31, 2020 and 2019, the Group’s borrowings at variable rate were mainly denominated in NTD, USD and RMB.

• ii. The Group’s borrowings are measured at amortized cost. The borrowings are periodically contractually repriced and to that extent are also exposed to the risk of future changes in market interest rates.

• iii. At March 31, 2020, December 31, 2019 and March 31, 2019, if interest rates at that date had been 0.25% higher/lower with all other variables held constant, post-tax profit for the three-month periods ended March 31, 2020 and 2019 would have been $6,756 and $5,190 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. The main factor is that counterparties could not repay in full the accounts receivable based on the agreed terms, and the contract cash flows of debt instruments stated at amortized cost.

• ii. The Group manages their credit risk taking into consideration the entire group’s concern. For banks and financial institutions, only independently rated parties with a minimum rating of 'A' are accepted. According to the Group’s credit policy, each local entity in the Group is responsible for managing and analysing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board of Directors. The utilisation of credit limits is regularly monitored.

• iii. The Group adopts the following assumption 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

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• a significant increase in credit risk on that instrument since initial recognition.

• iv. The Group adopts the assumption under IFRS 9, whereby the default occurs when the contract payments are past due over 90 days.

• v. The Group classifies customers’ accounts receivable, contract assets and rents receivable in accordance with credit rating of customer and credit risk on trade. The Group applies the simplified approach using loss rate methodology to estimate expected credit loss under the provision matrix basis.

• vi. The Group uses the forecastability of Taiwan Institute of Economic Research boom observation report to adjust historical and timely information to assess the default possibility of notes and accounts receivable. As of March 31, 2020, December 31, 2019 and March 31, 2019, the loss rate methodology is as follows:

March 31, 2020

	March 31,2020
Not past due Up to 30 days 31 to 90 days 91 to 180 days Over 180 days Not past due Up to 30 days 31 to 90 days 91 to 180 days Over 180 days Not past due Up to 30 days 31 to 90 days 91 to 180 days Over 180 days	Expected credit loss rate Total book value Loss allowance 0%~1% 6,766,023 $ 2,537) ($ 0%~2% 926,762 4,174) ( 1%~20% 770,320 26,452) ( 1%~100% 264,973 13,429) ( 1%~100% 425,535 126,982) ( 9,153,613 $ 173,574) ($ Expected credit loss rate Total book value Loss allowance 0%~1% 7,564,979 $ 2,182) ($ 0%~2% 1,098,500 1,460) ( 1%~20% 676,444 18,280) ( 1%~100% 149,075 5,913) ( 1%~100% 576,206 138,591) ( 10,065,204 $ 166,426) ($ Expected credit loss rate Total book value Loss allowance 0%~1% 6,624,187 $ 254) ($ 0%~2% 1,523,941 1,811) ( 1%~20% 1,062,579 9,734) ( 1%~100% 218,013 11,424) ( 1%~100% 707,318 158,644) ( 10,136,038 $ 181,867) ($ December 31,2019 March 31,2019
	Expected credit loss rate 0%~1% 0%~2% 1%~20% 1%~100% 1%~100%

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Individual Group A Group B Group C Group D Group E Individual Group A Group B Group C Group D Group E Individual Group A Group B Group C Group D Group E	March 31,2020
	Expected credit loss rate 100% 0%~5% 1%~10% 1%~20% 1%~40% 1%~100%

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

At January 1 Provision for impairment Write-offs during the period Effect of foreign exchange At March 31 At January 1 Provision for impairment Effect of foreign exchange At March 31	2020 Notes receivable and accounts receivable 166,426 $ 9,408 1,460) ( 800) ( 173,574 $ 2019 Notes receivable and accounts receivable 183,347 $ 1,509 2,989) ( 181,867 $

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(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 so that the Group does not breach borrowing limits or covenants on any of its borrowing facilities. Such forecasting takes into consideration the Group’s debt financing plans, covenant compliance, compliance with internal balance sheet ratio targets and, if applicable, external regulatory or legal requirements, for example, currency restrictions.

• ii. As of March 31, 2020, December 31, 2019 and March 31, 2019, the undrawn credit amounts are $22,146,270, $20,190,686 and $20,015,454, respectively.

• iii. The table below analyses the Group’s non-derivative financial liabilities and net-settled or gross-settled derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for nonderivative financial liabilities and to the expected maturity date for derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.

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Non-derivative financial liabilities:

Non-derivative financial liabilities:	:
March 31, 2020 Upto 1year Short-term borrowings 6,083,959 $ Notes payable 321,867 Accounts payable 6,099,423 Lease liabilities 498,749 Other payables 6,087,122 Bonds payable (including current portion) 3,000,000 Long-term borrowings (including current portion) 5,286,804 Non-derivative financial liabilities: December 31, 2019 Upto 1year Short-term borrowings 1,857,637 $ Notes payable 365,837 Accounts payable 6,912,441 Lease liabilities 487,454 Other payables 4,676,588 Bonds payable (including current portion) 3,000,000 Long-term borrowings (including current portion) 5,159,554	Upto 1year	Between 1 and 2years	Between 2 and 3years	Between 3 and 5years	Over 5years
		- $ - - 439,190 - - 229,870 Between 1 and 2years	- $ - - 392,708 - 1,000,000 585,905 Between 2 and 3years	- $ - - 460,399 - - 1,227,473 Between 3 and 5years	- $ - - 4,630,137 - - 109,912 Over 5years
December 31, 2019 Short-term borrowings Notes payable Accounts payable Lease liabilities Other payables Bonds payable (including current portion) Long-term borrowings (including current portion)
	1,857,637 $ 365,837 6,912,441 487,454 4,676,588 3,000,000 5,159,554	- $ - - 436,444 - - 1,398,674	- $ - - 490,035 - 1,000,000 382,042	- $ - - 630,513 - - 150,000	- $ - - 4,820,732 - - -

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Non-derivative financial liabilities: March 31, 2019 Upto 1year Short-term borrowings 1,947,764 $ Notes payable 148,974 Accounts payable 6,786,865 Lease liabilities 509,121 Other payables 4,368,642 Bonds payable - Long-term borrowings (including current portion) 6,551,951	Non-derivative financial liabilities: March 31, 2019 Upto 1year Short-term borrowings 1,947,764 $ Notes payable 148,974 Accounts payable 6,786,865 Lease liabilities 509,121 Other payables 4,368,642 Bonds payable - Long-term borrowings (including current portion) 6,551,951	Between 1 and 2years	Between 2 and 3years	Between 3 and 5years	Over 5years
March 31, 2019 Short-term borrowings Notes payable Accounts payable Lease liabilities Other payables Bonds payable Long-term borrowings (including current portion)
	1,947,764 $ 148,974 6,786,865 509,121 4,368,642 - 6,551,951	- $ - - 438,140 - 3,000,000 947,349	- $ - - 420,636 - 1,000,000 908,693	- $ - - 655,294 - - -	- $ - - 4,776,896 - - 30,000

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  - iv. As of March 31, 2020 and December 31, 2019, the derivative financial liabilities which were executed by the Group were all due within one year.

• (3) Fair value information

• A. Details of the fair value of the Group’s financial assets and financial liabilities not measured at fair value are provided in Note 12(2)A. Details of the fair value of the Group’s investment property measured at cost are provided in Note 6(10).

• B. 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. The fair value of the Group’s investment in listed stocks, beneficiary certificates and others is included in Level 1.

  • Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The fair value of the Group’s investment in derivative instruments is included in Level 2.

  • Level 3: Unobservable inputs for the asset or liability. The fair value of the Group’s investment in derivative instruments is included in Level 3.

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

follows:
March 31, 2020 Financial assets at fair value through profit or loss Equity securities Non-hedging derivatives Financial assets at fair value through other comprehensive income Equity securities Liabilities Recurring fair value measurements Financial liabilities at fair value through profit or loss Non-hedging derivatives Assets Recurring fair value measurements	Level 1 1,923,293 $ - 14,358,759 16,282,052 $ - $	Level 2 - $ 458 - 458 $ 1,600 $	Level 3 1,006,147 $ - 204,503 1,210,650 $ - $	Total
				2,929,440 $ 458 14,563,262
				17,493,160 $
				1,600 $

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December 31, 2019 Level 1 Level 2 Level 3 Total
Assets
Recurring fair value measurements
Financial assets at fair value
through profit or loss
-
Equity securities $ 1,409,676 $ $ 1,008,250 $ 2,417,926
Non-hedging derivatives - 236 - 236
Financial assets at fair value
through other comprehensive
income
Equity securities 15,299,211 - 239,535 15,538,746
$ 16,708,887 $ 236 $ 1,247,785 $ 17,956,908
Liabilities
Recurring fair value measurements
Financial liabilities at fair value
through profit or loss
Non-hedging derivatives $ - $ 50 $ - $ 50
March 31, 2019 Level 1 Level 2 Level 3 Total
Assets
Recurring fair value measurements
Financial assets at fair value
through profit or loss
-
Equity securities $ 1,606,016 $ $ 947,489 $ 2,553,505
Financial assets at fair value
through other comprehensive
income
Equity securities 14,490,422 - 146,590 14,637,012
$ 16,096,438 $ - $ 1,094,079 $ 17,190,517
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• D. 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 listed below by characteristics:

Listed shares Open-end fund Market quoted price Closing price Net asset value

• instruments is measured by using valuation techniques or by reference to counterparty quotes. The fair value of financial instruments measured by using valuation techniques method can be referred to current fair value of instruments with similar terms and characteristics in substance, discounted cash flow method or other valuation methods, including calculated by applying model using market information available at the consolidated balance sheet date (i.e. yield curves on the Taipei Exchange, average commercial paper interest rates quoted from Reuters).

• (c) The valuation of derivative financial instruments is based on valuation model widely accepted by market participants, such as present value techniques and option pricing models. Forward exchange contracts are usually valued based on the current forward

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

• (e) The Group takes into account adjustments for credit risks to measure the fair value of financial and non-financial instruments to reflect credit risk of the counterparty and the Group’s credit quality.

• E. For the three-month periods ended March 31, 2020 and 2019, there was no transfer between Level 1 and Level 2.

• F. The following chart is the movement of Level 3 for the three-month periods ended March 31, 2020 and 2019:

31, 2020 and 2019:
	Non-derivative equity
	For the three-month period	For the three-month period
	ended March 31,2020	ended March 31,2019
Beginning balance	$ 1,247,785	$ 1,278,674
Gains and losses recognized in	( 17,616)	-
profit or loss
Gain and loss recognized in
other comprehensive income	( 18,859)	( 184,595)
Sold during the period	(660)	-
Ending balance	$1,210,650	$ 1,094,079

• G. Finance and Accounting Department 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, confirming the source of information is independent, reliable and in line with other resources and represented as the exercisable price, and frequently calibrating valuation model, performing back-testing, updating inputs used to the valuation model and making any other necessary adjustments to the fair value.

• H. 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.

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Non-derivative equity: Unlisted shares Private equity fund Non-derivative equity: Unlisted shares Private equity fund Non-derivative equity: Unlisted shares Private equity fund	Fair value at March 31, 2020	Valuation technique	Significant unobservable input Price to earnings ratio multiple Discount for lack of marketability Significant unobservable input Price to earnings ratio multiple Discount for lack of marketability Significant unobservable input	Range (weighted average)	Relationship of inputs to fair value
	1,210,650 $ Fair value at December 31, 2019	Market comparable companies Valuation technique		0.80~4.69 10%~20% Range (weighted average)	The higher the multiple and control premium, the higher the fair value The higher the discount for lack of marketability, the lower the fair value Relationship of inputs to fair value
	1,247,785 $ Fair value at March 31, 2019 1,125,131 $	Market comparable companies Valuation technique		1.04~3.62 15%~20% Range (weighted average)	The higher the multiple and control premium, the higher the fair value The higher the discount for lack of marketability, the lower the fair value Relationship of inputs to fair value The higher the multiple and control premium, the higher the fair value The higher the discount for lack of marketability, the lower the fair value
		Market comparable companies	Price to earnings ratio multiple Discount for lack of marketability	1.31~3.71 15%~20%

• I. 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 different measurement. The following is the effect of profit or loss or of other comprehensive income from financial assets and liabilities categorized within Level 3 if the inputs used to valuation models have changed:

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March 31, 2020

Recognized in other Recognized in profit or loss comprehensive income Favourable Unfavourable Favourable Unfavourable Input Change change change change change Financial assets Equity Discount for instrument lack of marketability ±5% $ 50,307 ($ 50,307) $ 10,225 ($ 10,225) December 31, 2019 Recognized in other Recognized in profit or loss comprehensive income Favourable Unfavourable Favourable Unfavourable Input Change change change change change Financial assets Equity Discount for instrument lack of marketability ±5% $ 50,413 ($ 50,413) $ 11,977 ($ 11,977) March 31, 2019 Recognized in other Recognized in profit or loss comprehensive income Favourable Unfavourable Favourable Unfavourable Input Change change change change change Financial assets Equity Discount for instrument lack of marketability ±5% $ 47,374 ($ 47,374) $ 7,330 ($ 7,330)

13. Supplementary Disclosures

• (1) Significant transactions information

• A. Loans to others: Please refer to table 1.

• B. Provision of endorsements and guarantees to others: Please refer to table 2.

• C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 3.

• D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company’s paid-in capital: Please refer to table 4.

• 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 5.

• H. Receivables from related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 6.

• I. Trading in derivative financial instruments undertaken during the reporting periods ended: Please refer to Notes 6(2) and 6(14).

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• J. Significant inter-company transactions during the reporting periods: Please refer to table 7.

• (2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China): Please refer to table 8.

• (3) Information on investments in Mainland China

• A. Basic information: Please refer to table 9.

• B. Significant transactions, either directly or indirectly through a third party, transactions with the investee companies in Mainland Area: Please refer to table 10.

• (4) Major shareholders information

Names, number of shares and ownership of shareholders whose equity interest is greater than 5%: Please refer to table 11.

14. Segment Information

(1) General information

The Group operates and makes decisions on the basis of products and service line, which the Group uses to identify reportable segments.

The Group’s reportable segments include motor division and the home appliance division. The motor division primarily engages in the manufacturing and sales of motors and generators. The home appliance division primarily engages in the manufacturing, installation, sales and service of home appliances.

(2) Segment performance

The Group uses the operating income as the basis for segment performance assessment. The operating income excludes non-recurring expenditures, unrealized gain or loss on financial instruments, interest income and interest expense.

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(3) Financial information by industry

The segment information of the reportable segments provided to the chief operating decision-maker for the three-month periods ended March 31, 2020 and 2019 is as follows:

2020 and 2019 is as follows:
Heavy industrial Home appliances Adjustment and products division division elimination Operating revenues Operating revenues from external customers 6,997,052 $ 1,205,402 $ 2,462,476 $ - $ Operating revenues from internal segments 3,764,074 702,572 228,291 4,694,937) ( Total operating revenues 10,761,126 $ 1,907,974 $ 2,690,767 $ 4,694,937) ($ Segment profits and losses 557,398 $ 30,824 $ 220,508 $ - $ Segment profits and losses including: Depreciation and amortization 292,778 $ 48,089 $ 143,936 $ - $ Not included in segment profit, but regularly provided to the chief operating decision-maker: Segment assets Identifiable assets 35,847,057 $ 3,809,204 $ 21,744,318 $ 6,569,168) ($ Capital expenditures 66,600 $ 3,306 $ 11,796 $ - $ Segment liabilities 15,825,565 $ 1,949,345 $ 10,885,671 $ 6,565,364) ($ For the three-monthperiod ended March 31,2020 Others	Total
	10,664,930 $ -
	10,664,930 $
	808,730 $
	484,803 $
	54,831,411 $
	81,702 $
	22,095,217 $

~86~

Heavy industrial Home appliance Adjustment and products division division elimination Operating revenues Operating revenues from external customers 7,869,276 $ 1,281,397 $ 2,556,374 $ - $ Operating revenues from internal segments 4,313,258 667,421 232,933 5,213,612) ( Total operating revenues 12,182,534 $ 1,948,818 $ 2,789,307 $ 5,213,612) ($ Segment profits and losses 732,590 $ 4,967) ($ 198,455 $ - $ Segment profits and losses including: Depreciation and amortization 271,735 $ 69,867 $ 171,697 $ - $ Not included in segment profit, but regularly provided to the chief operating decision-maker: Segment assets Identifiable assets 39,605,012 $ 3,942,664 $ 21,994,191 $ 6,802,527) ($ Capital expenditures 41,661 $ 12,990 $ 17,288 $ - $ Segment liabilities 16,722,033 $ 2,174,537 $ 9,399,766 $ 7,391,056) ($ For the three-monthperiod ended March 31,2019 Others	Total
	11,707,047 $ -
	11,707,047 $
	926,078 $
	513,299 $
	58,739,340 $
	71,939 $
	20,905,280 $

~87~

• (4) Reconciliation for segment profit (loss)

Sales between segments are carried out at arm’s length. The revenue from external parties reported to the chief operating decision-maker is measured in a manner consistent with that in the statement of comprehensive income. A reconciliation of reportable segment profit or loss to the profit before tax and discontinued operations for the three-month periods ended March 31, 2020 and 2019 is provided as follows:

		For the three-month		For the three-month
		period ended		period ended
		March 31,2020		March 31,2019
Adjusted operating income of
reportable segments	$	588,222	$	727,624
Adjusted operating income of other
operating segments		220,508		198,455
Interest income		70,738		68,487
(Losses) gains on financial instruments	(	148,036)		5,511
Financial cost	(	65,673)	(	72,031)
Associates’ and joint ventures’
profit and loss accounted for under
the equity method	(	28,184)		8,130
Losses on disposals of property,
plant and equipment		2,075	(	551)
Others	(	1,432)		33,807
Income before income tax	$	638,218	$	969,432

The total assets amount reported to the chief operating decision-maker is measured in a manner consistent with that in the financial statements.

~88~

Table 1

TECO ELECTRIC & MACHINERY CO., LTD. AND SUBSIDIARIES

Loans to others

For the three-month period ended March 31, 2020

Expressed in thousands of NTD (Except as otherwise indicated)

Number (Note 1)	Creditor	Borrower	General ledger account	Related party	Maximum outstanding balance during the three- month period ended March 31, 2020	Balance at March 31, 2020 (Note 8)	Actual amount drawn down	Interest rate (%)	Nature of loans	Amount of transactions with the borrower	Reason for short-term financing	Allowance for doubtful accounts	Collateral	Collateral	Limit on loans granted to a singleparty	Ceiling on total loans granted	Footnote
													Item	Value
0 0 1 2 2 3 4 5	TECO ELECTRIC & MACHINERY CO., LTD. TECO ELECTRIC & MACHINERY CO., LTD. U.V.G. Teco Westinghouse Teco Westinghouse Tong-An Assets Jiangxi Teco Century Development	Xiamen An-Tai QingDao Teco Teco Netherlands TWMM TECO ELECTRIC & MACHINERY CO., LTD. TECO ELECTRIC & MACHINERY CO., LTD. QingDao Teco Century Tech. C&M Corp.	Other receivables 〃 〃 〃 〃 〃 〃 〃	Yes 〃 〃 〃 〃 〃 〃 〃	78,650 $ 129,158 235,130 66,550 302,500 200,000 54,000 120,000	60,450 $ 127,097 232,680 66,495 302,250 - - 120,000	21,158 $ 127,097 232,680 15,113 302,250 - - 100,000	2.76% 3.50% 0.00% 2.97% 1.96% 1.05% 3.50% 1.5263%	Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing	- $ - - - - - - -	For operating capital For operating capital For operating capital For operating capital For operating capital For operating capital For operating capital For operating capital	- $ - - - - - - -	- - - - - - - -	- $ - - - - - - -	1,610,491 $ 1,610,491 451,410 832,698 832,698 526,086 73,506 125,600	5,368,305 $ 5,368,305 752,350 1,665,395 1,665,395 526,086 147,013 418,668	Note 2 Note 2 Note 3 Note 4 Note 4 Note 5 Note 6 Note 7

Note 1: The numbers filled in for the loans 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: In accordance with the company’s policy, limit on total loans shall not exceed 10% of the Company’s net assets based on the latest financial statements (March 31, 2020), and limit on loans to a single party shall not exceed 3% of the Company’s net assets based on the latest financial statements (March 31, 2020).

Note 3: In accordance with U.V.G.’s policy, limit on total loans shall not exceed 10% of U.V.G.’s net assets based on the latest financial statements (March 31, 2020), and limit on loans to a single party shall not exceed 6% of U.V.G.’s net assets based on the latest financial statements (March 31, 2020).

Note 4: In accordance with Teco Westinghouse’s policy, limit on total loans shall not exceed 20% of Teco Westinghouse’s net assets based on the latest financial statements (March 31, 2020), and limit on loans to a single party shall not 10% of Teco Westinghouse’s net assets based on the latest financial statements (March 31, 2020).

Table 1, Page 1

Note 5: In accordance with Tong-An Assets’ policy, limit on total loans shall not exceed 10% of Tong-An Assets’ net assets based on the latest audited financial statement (March 31, 2020), and limit on loans to a single party shall not exceed 10% of Tong-An Assets’ net assets based on the latest audited financial statement (March 31, 2020).

• Note 6: In accordance with Jiangxi Teco’s policy, limit on total loans shall not exceed 10% of Jiangxi Teco’s net assets based on the latest financial statements (March 31, 2020), and limit on loans to a single party shall not exceed 5% of Jiangxi Teco’s net assets based on the latest financial statements (March 31, 2020).

Note 7: In accordance with Century Development’ policy, limit on total loans shall not exceed 10% of Century Development’ net assets based on the latest audited financial statement (March 31, 2020), and limit

on loans to a single party shall not exceed 3% of Century Development’ net assets based on the latest audited financial statement (March 31, 2020).

Note 8: The credit line approved by the Board of Directors.

Table 1, Page 2

Table 2

Expressed in thousands of NTD

TECO ELECTRIC & MACHINERY CO., LTD. AND SUBSIDIARIES

Provision of endorsements and guarantees to others For the three-month period ended March 31, 2020

(Except as otherwise indicated)

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 March 31, 2020	Outstanding endorsement/ guarantee amount at March 31, 2020	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	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	Footnote
		Companyname	Relationship with the endorser/ guarantor （Note 2）
0 0 0 0 0 1 2 3 4 5	TECO ELECTRIC & MACHINERY CO., LTD. TECO ELECTRIC & MACHINERY CO., LTD. TECO ELECTRIC & MACHINERY CO., LTD. TECO ELECTRIC & MACHINERY CO., LTD. TECO ELECTRIC & MACHINERY CO., LTD. Teco Westinghouse Motovario S.p.A. Century Development Tong-An Assets Tong-an Investment	Teco International An-Tai International Motovario QingDao Teco Others TWMM TECNOFIB SRL CDC DEVELOPMENT INDIA PRIVATE LIMITED 〃 〃	(2) (2) (2) (2) (2)、(6) (4) (1) (6) (6) (6)	10,736,610 $ 10,736,610 10,736,610 10,736,610 10,736,610 832,698 843,329 418,668 526,086 150,934	100,000 $ 110,000 1,542,453 229,710 87,142 10,232 475 211,291 152,824 152,824	100,000 $ 110,000 1,529,040 229,710 46,002 4,198 471 211,291 144,490 144,490	- $ - 1,529,040 - 25,092 4,198 471 - - -	- $ - - - - - - - - -	0.19 0.20 2.85 0.43 0.09 0.05 0.01 5.05 2.75 1.28	32,209,829 $ 32,209,829 32,209,829 32,209,829 32,209,829 1,665,395 2,529,988 837,336 1,052,171 200,000	Y Y Y Y Y Y N Y N N	N N N N N N N N N N	N N N Y N N N N N N	Note 3 〃 〃 〃 〃 Note 4 Note 5 Note 6 Note 7 Note 8

Table 2, Page 1

• Note 1: The numbers filled in for the loans 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 between the endorser/guarantor and the party being endorsed/guaranteed is classified into the following seven categories:

• (1) Having business relationship.

• (2) The endorser/guarantor parent company owns directly and indirectly more than 50% voting shares of the endorsed/guaranteed subsidiary.

• (3) The endorsed/guaranteed company owns directly and indirectly more than 50% voting shares of the endorser/guarantor parent company.

• (4)The endorser/guarantor parent company owns directly and indirectly more than 90% voting shares of the endorsed/guaranteed company.

• (5) Mutual guarantee of the trade as required by the construction contract.

• (6) Due to joint venture, each shareholder provides endorsements/guarantees to the endorsed/guaranteed company in proportion to its ownership.

• (7) Joint guarantee of the performance guarantee for pre-sold home sales contract as required under the Consumer Protection Act.

• Note 3: In accordance with the Company’s policy, the total guarantee amount shall not exceed 60% of Company’s net assets based on the latest financial statements (March 31, 2020), and the guarantee to a single party shall not exceed 20% of the Company’s net assets. If the guarantee amount is denominated in foreign currency, the amount shall be translated at the exchange rate prevailing on the date of approval by the Board of Directors to assess whether the guarantee amount exceeds the limit.

• Note 4: In accordance with the Teco Westinghouse’s policy, the total guarantee amount shall not exceed 20% of Teco Westinghouse’s net assets based on the latest financial statements (March 31, 2020),

• and the guarantee to a single party shall no exceed 10% of Teco Westinghouse’s net assets. If the guarantee amount is denominated in foreign currency, the amount shall be translated at the exchange rate prevailing on the date of approval by the Board of Directors to assess whether the guarantee amount exceeds the limit.

• Note 5: In accordance with Motovario S.p.A.’s policy, the total guarantee amount shall not exceed 60% of Motovario S.p.A.’s net assets based on the latest financial statements (March 31, 2020), and

• the guarantee to a single party shall not exceed 20% of Motovario S.p.A.'s net assets. If the guarantee amount is denominated in foreign currency, the amount shall be translated at the exchange rate prevailing on the date of approval by the Board of Directors to assess whether the guarantee amount exceeds the limit.

• Note 6:In accordance with Century Development’s policy, the total guarantee amount shall not exceed 20% of Century Development’s net assets based on the latest financial statements (March 31, 2020), and the guarantee to a single party shall not exceed 10% of Century Development’s net assets. If the guarantee amount is denominated in foreign currency, the amount shall be translated at the exchange rate prevailing on the date of approval by the Board of Directors to assess whether the guarantee amount exceeds the limit.

• Note 7:In accordance with Tong-An Asset’s policy, the total guarantee amount shall not exceed 20% of Tong-An Asset’s net assets based on the latest financial statements (March 31, 2020), and the guarantee to a single party shall not exceed 10% of Tong-An Asset’s net assets. If the guarantee amount is denominated in foreign currency, the amount shall be translated at the exchange rate prevailing on the date of approval by the Board of Directors to assess whether the guarantee amount exceeds the limit.

• Note 8:In accordance with Tong-An Investment Co., Ltd.’s policy, the total guarantee amount shall not exceed NT$200 million, and the guarantee to a single party shall not exceed NT$50 million. If due to special needs, the guarantee amount exceeds the limit, stockholders’ resolution is required.

Table 2, Page 2

TECO ELECTRIC & MACHINERY CO., LTD. AND SUBSIDIARIES

Table 3

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

March 31, 2020

Expressed in thousands of NTD

(Except as otherwise indicated)

Securities held by	Marketable securities	Relationshipwith the securities issuer	General ledger account		As of March31,2020	As of March31,2020		Footnote
				Number of shares	Book value	Ownership (%)	Fair value
TECO ELECTRIC & MACHINERY CO., LTD. Teco International Tong-an Investment U.V.G An-Tai International Jie-Zheng Property Teco Electro Information Technology Total	Stock 1 Stock 2 Stock 3, etc. Stock 4 Stock 5 Stock 6 Stock 7 Stock 8 Stock 9 Stock 10, etc. Fund 1, etc. Stock 11, etc Stock 12, etc Stock 26, etc Stock 13 Stock 11 Stock 14 Stock 15 Stock 16 Stock 17, etc. Stock 29, etc Stock 18, etc. Stock 16 Fund 2 Fund 3, etc. Stock 19, etc. Stock 13 Stock 11 Stock 20 Stock 21 Stock 28, etc Stock 18, etc. Fund 4, etc. Stock 11 Stock 22, etc.	The Company is a director of the investee None The Company is a director of the investee None The Company is a director of the investee None 〃 The Company is a director of the investee None 〃 〃 〃 〃 〃 An investee company accounted for under the equity method by the Company Related party in substance None 〃 The Company is a director of the investee 〃 〃 〃 〃 None 〃 〃 An investee company accounted for under the equity method by the Company Related party in substance 〃 None 〃 〃 None Related party in substance None	Note 1 〃 〃 Note 4 〃 〃 〃 〃 〃 〃 〃 Note 1 Note 3 Note 2 Note 1 〃 〃 〃 〃 〃 Note 2 Note 3 Note 4 〃 〃 Note 1 〃 〃 〃 〃 Note 2 Note 3 Note 2 Note 1 〃	190,061 9,610 5,098 10,084 11,527 47,839 1,776 32,980 7,500 41,495 - 16,376 3,814 637 19,540 9,197 8,692 1,285 14,050 32,158 623 13,417 1,000 50,000 - 118 2,826 1,270 2,756 195 43 1,534 - 200 3,269	5,464,242 $ 50,261 64,975 137,651 338,907 310,474 10,124 308,552 314,775 190,207 207,788 334,908 172,011 17,906 470,915 118,635 550,201 128,372 5,381,150 373,959 28,696 644,569 383,000 500,000 65,597 3,315 68,101 16,385 174,159 9,904 2,437 76,037 35,862 2,583 32,016	3.38 0.10 - 0.09 1.96 1.76 0.05 10.99 5.00 - - - - - 0.99 8.17 0.27 0.04 10.03 - - - - - - - 0.14 1.13 8.51 - - - - 0.18 -	5,464,242 $ 50,261 64,975 137,651 338,907 310,474 10,124 308,552 314,775 190,207 207,788 334,908 172,011 17,906 470,915 118,635 550,201 128,372 5,381,150 373,959 28,696 644,569 383,000 500,000 65,597 3,315 68,101 16,385 174,159 9,904 2,437 76,037 35,862 2,583 32,016

Table 3, Page 1

As of March 31, 2020

Securities held by	Marketable securities	Relationshipwith the securities issuer	General ledger account	Number of shares	Book value	Ownership (%)	Fair value	Footnote
Teco Singapore Taiwan Pelican express Teco Australia Sankyo Tecom Tecom International Top-Tower	Stock 16, etc. Stock 13 Stock 16 Stock 16 Stock 23 Stock 2 Stock 1 Stock 24 Stock 25, etc. Fund 5, etc. Stock 13 Stock 27, etc.	None An investee company accounted by the Company using None 〃 〃 〃 The Company is a corporate director of the investee None 〃 〃 An investee company accounted for under the equity method by the Company None	Note 1 〃 〃 〃 〃 〃 〃 Note 3 Note 1 Note 2 Note 3 〃	304 7,070 459 460 68 2,175 166,222 3,354 524 1,487 77 3	116,571 $ 170,387 175,797 176,333 6,484 11,377 466,385 22,135 680 14,878 1,861 27	- 0.36 0.32 0.33 - 0.02 0.29 1.69 - - - -	116,571 $ 170,387 175,797 176,333 6,484 11,377 466,385 22,135 680 14,878 1,861 27

Note 1: Financial assets at fair value through other comprehensive income-non-current. Note 2: Financial assets at fair value through profit or loss - current. Note 3: Financial assets at fair value through other comprehensive income-current. Note 4: Financial assets at fair value through profit or loss - non-current.

Table 3, Page 2

TECO ELECTRIC & MACHINERY CO., LTD. AND SUBSIDIARIES

Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company's paid-in capital

For the three-month period ended March 31, 2020

Investor Table 4	Marketable securities	General ledger account	Counterparty	Relationship with the investor	Balance as at January1,2020	Balance as at January1,2020	Addition	Addition		Disposal	Disposal	Expressed in thousands of NTD (Except as otherwise indicated) Balance as at March31,2020	Expressed in thousands of NTD (Except as otherwise indicated) Balance as at March31,2020	Expressed in thousands of NTD (Except as otherwise indicated) Balance as at March31,2020
					Number of shares/units	Amount	Number of shares/units	Amount	Number of shares/units	Selling price	Bookvalue	Gain (loss) on disposal	Number of shares/units	Amount
Tong-An Investment Co., Ltd.	Yuanta Taiwan High- yield Leading Company Fund	Note	Not applicable	Not applicable	-	- $	50,000,000	500,000 $	-	- $	- $	- $	50,000,000	500,000 $

Note: Financial assets at fair value through profit or loss - non-current.

Table 4, Page 1

Table 5

TECO ELECTRIC & MACHINERY CO., LTD. AND SUBSIDIARIES

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

For the three-month period ended March 31, 2020

Expressed in thousands of NTD (Except as otherwise indicated)

Purchaser/seller	Counterparty	Relationship with the counterparty		Transaction	Transaction		Differences in transaction terms compared to third partytransactions	Differences in transaction terms compared to third partytransactions	Notes/accounts receivable(payable)	Notes/accounts receivable(payable)	Footnote
			Purchases (sales)	Amount	Percentage of total purchases(sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable(payable)
TECO ELECTRIC & MACHINERY CO., LTD.	Tesen Tai-An Wuxi Wuxi Teco Tong Tai Teco Singapore Teco Westinghouse Teco Westinghouse Canada Teco Australia	An investee accounted for under the equity method An indirect investee accounted for under the equity method 〃 An investee accounted for under the equity method 〃 An indirect investee accounted for under the equity method 〃 〃	Purchases 〃 〃 Sales 〃 〃 〃 〃	580,218 $ 149,673 246,260 397,635) ( 107,419) ( 796,706) ( 153,056) ( 237,847) (	16% 4% 7% (9%) (2%) (18%) (3%) (5%)	30 days 〃 〃 90 days 〃 〃 〃 〃	Note 1 〃 〃 〃 〃 〃 〃 〃	Note 1 〃 〃 〃 〃 〃 〃 〃	66,826) ($ 108,338) ( 442,296) ( 395,827 78,492 565,798 100,424 144,195	(2%) (3%) (12%) 11% 2% 16% 3% 4%

Note 1: Comparable with other types of transactions, trading conditions are handled in accordance with the agreement of the conditions.

Table 5, Page 1

Table 6

TECO ELECTRIC & MACHINERY CO., LTD. AND SUBSIDIARIES

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

March 31, 2020

Expressed in thousands of NTD

(Except as otherwise indicated)

Creditor	Counterparty	Relationship with the counterparty	Balance as at March 31,2020	Turnover rate	Overdue receivables	Overdue receivables	Amount collected subsequent to the balance sheet date	Allowance for doubtful accounts
					Amount	Action taken
TECO ELECTRIC & MACHINERY CO., LTD. 〃 〃 〃 〃 〃 〃 〃 〃 Teco Westinghouse Wuxi Teco Tai-An Wuxi Qing Dao Teco U.V.G. Century Development	Tong Dai Teco Westinghouse QingDao Teco Wuxi Teco Teco Australia Sankyo Teco Netherlands Teco Westinghouse Canada Motovario S. P. A. TECO ELECTRIC & MACHINERY CO., LTD. 〃 〃 〃 Teco Netherlands Centurytech Construction and Mangement Corp.	An investee accounted for under the equity method An indirect investee accounted for under the equity method 〃 〃 〃 〃 〃 〃 〃 An indirect investee accounted for under the equity method 〃 〃 〃 〃 An investee accounted for under the equity method	396,889 $ 565,798 277,340 100,011 146,601 268,021 317,551 100,424 119,819 302,250 442,296 108,338 111,509 232,680 100,000	3.80 7.71 - 0.36 5.23 0.83 0.12 7.56 1.16 - 2.45 5.74 2.51 - -	- $ - - - - 172,297 249,563 - - - - - - - -	- - - - - In the process of collection 〃 - - - - - - - -	- $ 2,034 - - - - - - 18,945 - 43,007 27,618 63,952 - -	Total cumount was $17,888

Table 6, Page 1

TECO ELECTRIC & MACHINERY CO., LTD. AND SUBSIDIARIES Significant inter-company transactions during the reporting period For the three-month period ended March 31, 2020

Table 7

Expressed in thousands of NTD (Except as otherwise indicated)

Transaction

						Transaction
Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)	General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets (Note3)
0 0 0 0 0 0 0 0 0 1 2 3 4 5 8 0 0 0 0 0	TECO ELECTRIC & MACHINERY CO., LTD. 〃 〃 〃 〃 〃 〃 〃 〃 Wuxi Teco Tai-An Wuxi QingDao Teco Teco Westinghouse Century Development U.V.G TECO ELECTRIC & MACHINERY CO., LTD. 〃 〃 〃 〃	Tong Dai Teco Westinghouse QingDao Teco Teco Australia Teco Netherlands Sankyo Wuxi Teco Motovario S. P. A. Teco Westinghouse Canada TECO ELECTRIC & MACHINERY CO., LTD. 〃 〃 〃 Centurytech Construction and Management Corp. Teco Netherlands Teco Westinghouse Teco Westinghouse Canada Teco Singapore Tong Dai Teco Australia	(1) 〃 〃 〃 〃 〃 〃 〃 〃 (2) 〃 〃 〃 (3) 〃 (1) 〃 〃 〃 〃	Notes receivable, accounts receivable and other receivables Accounts receivable and other receivables 〃 〃 〃 〃 〃 〃 Accounts receivable 〃 〃 〃 Other receivables 〃 〃 Sales 〃 〃 〃 〃	396,889 $ 565,798 277,340 146,601 317,551 268,021 100,011 119,819 100,424 442,296 108,338 111,509 302,250 100,000 232,680 796,706 153,056 107,419 397,635 237,847	Because there is no transaction in same type which can be compared with, it is based on the condition and the period specified in the agreement. 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃	- 1% - - - - - - - - - - - - - 7% 1% 1% 4% 2%

Table 7, Page 1

Table 7

TECO ELECTRIC & MACHINERY CO., LTD. AND SUBSIDIARIES Significant inter-company transactions during the reporting period For the three-month period ended March 31, 2020

Expressed in thousands of NTD (Except as otherwise indicated)

Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)			Transaction
				General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets (Note3)
7 2 1	Tesen Tai-An Wuxi Wuxi Teco	TECO ELECTRIC & MACHINERY CO., LTD. 〃 〃	(2) 〃 〃	Sales 〃 〃	580,218 $ 149,673 246,260	Because there is no transaction in same type which can be compared with, it is based on the condition and the period specified in the agreement. 〃 〃	5% 1% 2%

Note 1: The numbers filled in for the transaction company in respect of inter-company transactions are as follows:

(1) Parent company is ‘0’.

(2) The subsidiaries are numbered in order starting from ‘1’.

Note 2: Relationship with the transaction company:

(1) The parent company to the subsidiary.

(2) The subsidiary to the parent company.

(3)The subsidiary to another subsidiary.

Note 3: Regarding percentage of transaction amount to total operating revenues or total assets, it is computed based on period-end balance of transaction to total assets for balance sheet accounts and based on accumulated transaction amount for the period to total operating revenues for income statement accounts.

Table 7, Page 2

TECO ELECTRIC & MACHINERY CO., LTD. AND SUBSIDIARIES

Information on investees

For the three-month period ended March 31, 2020

Table 8

Expressed in thousands of NTD (Except as otherwise indicated)

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at March31,2020	Shares held as at March31,2020	Shares held as at March31,2020	Net profit (loss) of the investee for the three- month period ended March31,2020	Investment income (loss) recognized by the Company for the three-month period ended March31,2020	Footnote
				Balance as at March31,2020	Balance as at December 31, 2019	Number of shares	Ownership (%)	Bookvalue
TECO ELECTRIC & MACHINERY CO., LTD.	Tung Pei Tecom Teco International Teco Holdings and its subsidiaries Teco Singapore and its subsidiaries Tong-An Teco Electro UVG and its subsidiaries ITTS Tesen	Taiwan Taiwan Taiwan U.S.A Singapore Taiwan Taiwan Cayman Islands Taiwan Taiwan	Manufacturing of bearings Manufacturing of key telephone system and nonkey service unit telephone system Investment holdings, investments in securities and construction of commercial buildings Manufacturing and distribution of motors and generators, and investment and trading in USA Distribution of the Company's motor products in Singapore Investment holdings Manufacturing of Stepping motors Manufacturing and distribution of the Company's motor products and home appliances, and investment holdings E-business service, mailing and data management Manufacturing and sales of home appliance	12,293 $ 431,109 100,013 726,428 112,985 2,490,000 82,335 8,505,434 116,346 200,000	12,293 $ 431,109 100,013 726,428 112,985 2,490,000 82,335 8,505,434 116,346 200,000	39,145,044 200,301,025 67,537,429 1,680 7,200,000 495,724,243 10,770,864 195,416,844 11,467,248 20,000,000	31.14 63.52 100 100 90 99.63 62.57 100 45.11 100	2,096,567 $ 86,021 1,098,507 10,543,721 3,322,053 10,764,467 182,715 7,518,218 227,371 220,944	31,297 $ 27,580) ( 1,795 128,468 23,772 82,021 3,326 31,486 20,355 10,799	9,746 $ 17,386) ( 5,656 128,735 17,556 57,477 2,073 32,902 8,543 6,517	None None None None None None None None None None

Table 8, Page 1

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at March31,2020	Shares held as at March31,2020	Shares held as at March31,2020	Net profit (loss) of the investee for the three- month period ended March31,2020	Investment income (loss) recognized by the Company for the three-month period ended March31,2020	Footnote
				Balance as at March31,2020	Balance as at December 31, 2019	Number of shares	Ownership (%)	Bookvalue
TECO ELECTRIC & MACHINERY CO., LTD. Eagle Holding Co. TECO MOTOR B.V. Tung Pei	Lien Chang Tong Dai Teco Vietnam Yatec Tong-An Assets Taian Subic Micropac (BVI) and its subsidiaries Century Development An-Tai Pelican Kuen Ling Taian-Etacom Technology Co., Ltd. Eagle Holding Co. TECO MOTOR B.V. Motovario S.p.A Tung Pei (SAMOA) Industrial Co., Ltd.	Taiwan Taiwan Vietnam Taiwan Taiwan Philippines British Virgin Islands Taiwan Taiwan Taiwan Taiwan Taiwan Cayman Islands Netherlands Italy Samoa	Manufacturing of color flybacks transformers, mono flyback transformers and mono deflection yokes Distribution of the Company's motor products in Taichung Manufacturing and sales of motors Development and maintenance of various electric appliances Real estate business Manufacturing and sales of switches Manufacturing and distribution of optical fiber apparatus and international trading Development and management of industrial park Investment holdings Logistics and distribution services Manufacturing, installation, repair, domestic and export sales and leasing of condenser, water cooling, watercooled chiller and freezer Bus bar and manufacturing of its components Investment holdings Investment holdings Production and sale of gear reducers and motors Investment holdings and establishment of overseas distribution channel	117,744 $ 22,444 352,252 92,389 2,111,889 165,819 454,923 951,141 150,000 255,116 186,605 70,330 3,691,723 3,691,723 3,989,850 646,343	117,744 $ 22,444 352,252 92,389 2,111,889 165,819 454,923 951,141 150,000 255,116 186,605 70,330 3,691,723 3,691,723 3,989,850 646,343	37,542,159 6,615,234 29,013,668 7,799,996 388,423,711 17,131,155 14,883,591 100,592,884 32,653,581 24,121,700 11,131,642 7,033,000 1 1 18,010,000 23,031,065	33.84 83.53 100 64.95 100 76.70 100 28.67 100 25.27 14.62 84.73 100 100 100 100	445,771 $ 372,508 287,432 147,901 5,260,857 176,371 1,382,977 1,318,074 457,543 285,087 288,272 142,521 4,216,647 4,216,647 4,216,647 1,556,041	16,582 $ 14,136 8,963) ( 2,078 20,279 2,496 6,360) ( 66,839 1,296) ( 54,544 13,056 1,265 3,898) ( 3,898) ( 3,898) ( 9,378) (	5,612 $ 11,808 28,367) ( 1,364 20,279 1,359 7,410) ( 18,186 1,312) ( 13,782 1,908 1,072 3,898) ( 3,898) ( 3,898) ( 9,378) (	None Note None None None None None None None None None None None None None None

Table 8, Page 2

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at March31,2020	Shares held as at March31,2020	Shares held as at March31,2020	Net profit (loss) of the investee for the three- month period ended March31,2020	Investment income (loss) recognized by the Company for the three-month period ended March31,2020	Footnote
				Balance as at March31,2020	Balance as at December 31, 2019	Number of shares	Ownership (%)	Bookvalue
Tecom Tong-An Investment Lien Chang Gen Mao International Corp. Century Development Century Development Century Development Teco Electro	Tecom International Baycom Creative Sensor Century Development Pelican Century Biotech Development Corp. Century Real Estate (International) Pte. Ltd. Gen Mao International Corp. Gen Mao (Singapore) Gen Mao (Singapore) Centurytech Construction and Management Corp. Jack Property Serrice & Management Company United Development Century Biotech Development Corp. Greyback International Property Inc. Century Real Estate (International) Pte. Ltd. Teco Electro Devices Co., Ltd.	Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Singapore Taiwan Singapore Singapore Taiwan Taiwan Taiwan Taiwan Philippines Singapore British Virgin Islands	Investment holdings Manufacturing and sales of optical telecom products Manufacturing and sales of Development and management of industrial park Logistics and distribution services Development and construction of real estate Investing in other areas Investment holdings Investment holdings Investment holdings Construction and sales of related raw materials Building management servicing Investment consultancy service for domestic and foreign industrial parks Development and construction of real estate Housing project in Subic Investing in other areas Trading and investment holdings	100,000 $ 359,656 87,464 420,646 54,874 514,270 274,856 92,000 582,246 91,079 98,170 13,750 25,536 771,600 9,912 365,820 88,108	100,000 $ 359,656 87,464 420,646 54,874 200,000 274,856 92,000 582,246 91,079 98,170 13,750 25,536 300,000 9,912 365,820 88,108	12,000,000 9,619,819 7,913,310 46,235,042 6,474,468 51,427,000 9,120,000 12,553,526 27,502,354 4,866,045 10,000,000 1,512,500 4,432,718 77,160,000 144,600 12,160,000 2,510	100 28.64 6.23 13.18 6.78 20.57 30 100 84.97 15.03 100 50 51.60 30.86 30.11 40 100	205,097 $ 124,153 205,963 646,664 120,337 505,360 241,777 134,380 716,398 126,711 68,485 75,285 70,607 757,044 10,340 308,643 120,310	523 $ 73) ( 10,759) ( 66,839 54,544 3,877) ( 2,990) ( 725 614 614 789) ( 8,700 2,647 3,877) ( 31) ( 2,990) ( 1,009	523 $ 21) ( 581 9,201 3,061 798) ( 1,039) ( 725 5,622 995 480) ( 4,353 1,366 1,662) ( 9) ( 1,196) ( 1,086	None None None None None None None None None None None None None None None None None

Table 8, Page 3

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at March31,2020	Shares held as at March31,2020	Shares held as at March31,2020	Net profit (loss) of the investee for the three- month period ended March31,2020	Investment income (loss) recognized by the Company for the three-month period ended March31,2020	Footnote
				Balance as at March31,2020	Balance as at December 31, 2019	Number of shares	Ownership (%)	Bookvalue
Teco Singapore Teco International Kuen Ling Tong-An Assets	Century Development Creative Sensor Inc. CHING CHI INTERNATIONAL LIMITED Century Development Century Biotech Development Corp. Century Real Estate (International) Pte. Ltd.	Taiwan Taiwan British Virgin Islands Taiwan Taiwan Singapore	Development and management of industrial park Manufacturing and sales of electronic components Investing in other areas Leasing of real estate Development and construction of real estate Investing in other areas	179,222 $ 52,560 201,467 184,893 514,270 274,856	179,222 $ 52,560 201,467 184,893 200,000 274,856	21,264,873 4,326,447 6,200,000 17,018,916 51,427,000 9,120,000	6.06 3.41 83 4.85 20.57 30	253,713 $ 112,607 413,083 203,239 505,050 241,932	66,839 $ 10,759) ( 25,046) ( 66,839 3,877) ( 2,990) (	4,216 $ 318 20,782) ( 3,383 1,108) ( 884) (	None None None None None None

Table 8, Page 4

TECO ELECTRIC & MACHINERY CO., LTD. AND SUBSIDIARIES

Information on investments in Mainland China

For the three-month period ended March 31, 2020

Table 9 Investee in Mainland China	Main business activities	Paid-in capital	Investment method	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2020	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the three-month period ended March 31,2020	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the three-month period ended March 31,2020	Accumulated amount of remittance from Taiwan to Mainland China as of March 31, 2020	Net income of investee for the three-month period ended March 31,2020	Ownership held by the Company (direct or indirect)(%)	Investment income (loss) recognized by the Company for the three- month period ended March 31,2020	Book value of investments in Mainland China as of March 31,2020	(Except as otherwise indicated) Expressed in thousands of NTD Accumulated amount of investment income remitted back to Taiwan as of March 31,2020 Footnote	(Except as otherwise indicated) Expressed in thousands of NTD Accumulated amount of investment income remitted back to Taiwan as of March 31,2020 Footnote
					Remitted to Mainland China	Remitted back to Taiwan
Teco (Dong Guang) Wuxi Teco Taian (Wuxi) Nanchang Teco Jiangxi Teco QingDao Teco Xiamen Teco Xiamen An-Tai Teco Han Zhou Teco Century Fujian Teco	Manufacturing and sales of air conditioners mechanical equipment Manufacturing and sales of motors Manufacturing and sales of optical fiber Manufacturing and sales of home appliances Manufacturing and sales of motors Manufacturing and sales of dyes Sales of motors and home appliances Development, manufacturing and sales of LCD monitors. Plant rentals and related real estate management Development and consulting of device products Manufacturing and sales of compressor Manufacturing and sales of electronic components	268,799 $ 1,697,276 495,213 456,293 1,481,569 947,331 20,590 678,681 9,837 680,938 391,843	Note 2 Note 1 Note 11 Note 3 Note 1 Note 1 Note 3 Note 3 Note 1 Note 3 Note 1	188,139 $ 768,259 205,551 456,293 1,383,653 1,648,510 20,590 467,577 9,837 340,469 391,843	- $ - - - - - - - - - -	- $ - - - - - - - - - -	188,139 $ 768,259 205,551 456,293 1,383,653 1,648,510 20,590 467,577 9,837 340,469 391,843	3,058) ($ 24,947 10,099) ( 101 2,772 4,282 - 400) ( 3,503) ( 2,341 2,188) (	100 82.35 100 100 98.07 87.6 100 100 100 24 100	3,058) ($ 20,544 10,099) ( 101 2,719 3,751 - 400) ( 3,505) ( 525 2,188) (	130,679 $ 1,569,935 1,251,310 5,944) ( 1,441,755 360,607 - 238,717 26,778 25,745 64,359	- $ - - - - - - - - - -	Note 16 Note 15 Note 15 Note 16 Note 15 Note 15 Note 19 Note 15 Note 16 Note 16 Note 16

Table 9, Page 1

Investee in Mainland China	Main business activities	Paid-in capital	Investment method	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2020	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the three-month period ended March 31,2020	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the three-month period ended March 31,2020	Accumulated amount of remittance from Taiwan to Mainland China as of March 31, 2020	Net income of investee for the three-month period ended March 31,2020	Ownership held by the Company (direct or indirect)(%)	Investment income (loss) recognized by the Company for the three- month period ended March 31,2020	Book value of investments in Mainland China as of March 31,2020	Accumulated amount of investment income remitted back to Taiwan as of March 31,2020	Footnote
					Remitted to Mainland China	Remitted back to Taiwan
Ecolectric International Teco (Tianjin) Innovation Teco (Jiang Xi) Teco Sichuan Trading Jiangxi Teco- Lead Qingdao Teco Innovation Shanghai Teco Hunan TECO Wind Energy Limited Jiangxi TECO Westinghouse Motor Coil Co.,Ltd. Wuxi TECO Precision Beijing Pelican Express Fubon Gehua (Beijing) Trading Co., Ltd. Wuhan Tecom Tecom Tech (Wuxi)	Distribution of air conditioner Central China area Operation center Manufacturing and sales of air conditioning mechanical equipment Sales of home appliances Manufacturing and sales of wind generator Science Park development and business operations and consulting services Sales of home appliances Manufacturing, sales and technical services of 2.0 megawatt and above aerogenerator, wheel bay and other components Manufacturing and sales of motors, winding and related parts Production and sale of industrial motors and applications Storage services Merchandise wholesale Communication network information, technology development, sales and technology services business R & D, manufacture of broadband access network communication system equipment; sale of products to provide technology services	24,004 $ 15,990 79,813 26,522 141,079 59,444 23,829 240,818 119,840 656,500 26,422 344,643 6,950 485,455	Note 2 Note 3 Note 3 Note 11 Note 1 Note 13 Note 1 Note 11 Note 12 Note 14 Note 4 Note 5 Note 6 Note 7	- $ 15,990 79,813 - 62,865 59,444 23,829 240,818 - - 26,422 24,746 6,950 485,455	- $ - - - - - - - - - - - - -	- $ - - - - - - - - - - - - -	- $ 15,990 79,813 - 62,865 59,444 23,829 240,818 - - 26,422 24,746 6,950 485,455	4,336) ($ - 4,161) ( - - 411) ( 6,787 - 1,495 5,085 67) ( - 1,259) ( 35) (	39.9 100 100 100 45 100 100 100 100 100 100 1.63 100 100	1,730) ($ - 4,161) ( - - 411) ( 6,787 - 1,495 5,087 67) ( - 820) ( 35) (	5,560) ($ - 119,061 - - 36,180 91,405 - 112,413 776,396 2,114 - 2,414 2,948	- $ - - - - - - - - - - - - -	Note 16 Note 19 Note 16 Note 19 Note 19 Note 16 Note 15 Notes 20 Note 15 Note 16 Note 15 Notes 17 and 18 Note 15 Note 15

Table 9, Page 2

Investee in Mainland China	Main business activities	Paid-in capital	Investment method	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2020	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the three-month period ended March 31,2020	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the three-month period ended March 31,2020	Accumulated amount of remittance from Taiwan to Mainland China as of March 31, 2020	Net income of investee for the three-month period ended March 31,2020	Ownership held by the Company (direct or indirect)(%)	Investment income (loss) recognized by the Company for the three- month period ended March 31,2020	Book value of investments in Mainland China as of March 31,2020	Accumulated amount of investment income remitted back to Taiwan as of March 31,2020	Footnote
					Remitted to Mainland China	Remitted back to Taiwan
Beijing Tecom Innovation Technology Co., Ltd. Information Technology (Wuxi) Information Technology Wuxi TECO Precision Industry Co. Ltd.	Intelligent home systems and spare parts of the Internet of things, wholesale, import and export of goods and technology import and export, import and export agency, to provide technical advice, technical training and technical services ERP building, system maintenance and purchases of information appliance ERP building, system maintenance and purchases of information appliance R&D, manufacturing and sales of motors and provide products sales skills	14,566 10,167 1,000 115,125	Note 8 Note 9 Note 9 Note 10	14,566 10,167 - 86,101	- - - -	- - - -	14,566 10,167 - 86,101	- 1,333 296) ( 1,009	- 100 100 100	- 1,333 296) ( 1,009	- 17,524 388 120,670	- - - 43,266	Note 19 Note 15 Note 15 Note 16

Note 1: Through investing in an existing company in the third area, which then invested in the investee in Mainland China: Invest through United View Global Investment Co., Ltd. and Great Teco Motor (Pte) Ltd. and then invest in Mainland China. Note 2: Through investing in an existing company in the third area, which then invested in the investee in Mainland China: Invest through United View Global Investment Co., Ltd. and Asia Air Tech Industrial (Pte) Ltd. and then invest in Mainland China. Note 3: Through investing in an existing company in the third area, which then invested in the investee in Mainland China: Invest through United View Global Investment Co., Ltd. and Asia Electric & Machinery (Pte) Ltd. and then invest in Mainland China. Note 4: Through investing in an existing company in the third area, which then invested in the investee in Mainland China: Invest through Pelecanus Express Pte. Ltd., and then invest in Mainland China. Note 5: Through investing in an existing company in the third area, which then invested in the investee in Mainland China: Invest through Asian Crown International Co., Ltd. and then invest in Mainland China. Note 6: Through investing in an existing company in the third area, which then invested in the investee in Mainland China: Invest through Tecom Global Tech Investment (B.V.I) Limited and then invest in Mainland China. Note 7: Through investing in an existing company in the third area, which then invested in the investee in Mainland China: Invest through Tecom Global Tech Investment Pte Limited and then invest in Mainland China. Note 8: Through investing in an existing company in the third area, which then invested in the investee in Mainland China: Invest through Tecom Tech Investment (B.V.I) Limited and then invest in Mainland China. Note 9: Through investing in an existing company in the third area, which then invested in the investee in Mainland China: Invest through Information Technology Total Service (BVI) Co., Ltd. and then invest in Mainland China. Note 10: Through investing in an existing company in the third area, which then invested in the investee in Mainland China: Invest through Teco Electro Devices Co., Ltd. and then invest in Mainland China. Note 11: Through investing in investees in the third areas, which then invested in the investee in Mainland China: Invest through Micropac Worldwide (B.V.I) and then invest in Mainland China. Note 12: Through investing in investees in the third areas, which then invested in the investee in Mainland China: Invest through Teco Holding USA Inc. and Teco Westinghouse Motor Company and then invest in Mainland China. Note 13: Through investing in investees in the third areas, which then invested in the investee in Mainland China: Invested through Tecocapital Investment (Samoa) Co., Ltd. and then invest in Mainland China. Note 14: Through investing in an existing company in the third area, which then invested in the investee in Mainland China: Invest through Great Teco Motor (Pte) Ltd., Teco Australia Pty. Ltd. and Teco Electric & Machinery (Pte) Ltd. and then invest in Mainland China. Note 15: The amount recognized was based on the financial statements that were reviewed by R.O.C. parent company's CPA firm. Note 16: The amount recognized was based on the financial statements that were not reviewed by the other CPA firm. Note 17: Financial assets at fair value through other comprehensive income. Note 18: As of March 31, 2020, accumulated impairment of $24,746 was accrued. Note 19: The liquidation was completed in May 2019. Note 20: The liquidation has not been completed.

Table 9, Page 3

Companyname	Accumulated amount of remittance from Taiwan to Mainland China as of March 31, 2020	Investment amount approved by the Investment Commission of the Ministry of Economic Affairs (MOEA)	Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA
TECO Electric & Machinery Co., Ltd. Taiwan Pelican Express Co., Ltd. Tecom Co., Ltd. Information Technology Total Services Co., Ltd. Teco Electro Devices Co., Ltd.	6,487,880 $ 51,168 541,961 10,167 86,101	8,713,487 $ 51,168 754,000 10,167 104,259	35,625,733 $ 1,084,016 254,308 325,059 175,334

Note 1: The accounts of the Company are expressed in New Taiwan dollars. Income statement accounts denominated in foreign currencies are translated into New Taiwan dollars at the weighted average exchange rates prevailing at the transaction dates and balance sheet accounts at spot exchange rates prevailing at the transaction dates.

Note 2: The amount disclosed was based on Investment Commission, MOEA Regulation No. 09704604680 announced on August 29, 2008.

Note 3: Tecom completed the investment in Mainland China in the third quarter of 2010 and the ceiling on investments was $1,760,251 which was calculated based on Tecom's net assets of $2,933,752 in the third quarter of 2010.

Table 9, Page 4

TECO ELECTRIC & MACHINERY CO., LTD. AND SUBSIDIARIES

Significant transactions conducted with investees in Mainland China directly or indirectly through other companies in the third areas For the three-month period ended March 31, 2020

Table 10

Expressed in thousands of NTD (Except as otherwise indicated)

Investee in Mainland China	Sale(purchase)	Sale(purchase)	Property transaction	Property transaction	Accounts receivable (payable)	Accounts receivable (payable)	Provision of endorsements and guarantees	Provision of endorsements and guarantees		Financing	Financing		Others
	Amount	%	Amount	%	Balance at March 31,2020	%	Balance at December 31, 2019	Purpose	Maximum balance during the three-month period ended March 31,2020	Balance at March 31,2020	Interest rate	Interest during the three-month period ended March 31,2020
Wuxi Teco Taian (Wuxi) Jiangxi Teco QingDao Teco Xiamen An-Tai Shanghai Teco Wuxi Teco Precision Wuxi Teco Taian (Wuxi) Jiangxi Teco QingDao Teco Xiamen An-Tai Teco (Jiang Xi) Wuxi Teco Precision	$ 8,503 3,129 4,605 - - 5,747 697 ( 246,260) ( 149,673) ( 29,408) ( 86,344) ( 502) ( 7,399) ( 22,087)	- - - - - - - (7%) (4%) (1%) (2%) - - (1%)	$ - - - - - - - - - - - - - -	- - - - - - - - - - - - - -	12,296 3,940 5,909 2,517 - 5,747 1,697 ( 442,296) ( 108,338) ( 10,941) ( 111,509) - ( 4,099) -	- - - - - - - (12%) (3%) - (3%) - - -	$ - - - - - - - - - - - - - -	- - - - - - - - - - - - - -	$ - - - 129,158 78,650 - - - - - - - - -	$ - - - 127,097 60,450 - - - - - - - - -	- - - 3.50% 2.76% - - - - - - - - -	$ - - - 1,124 171 - - - - - - - - -

Table 10, Page 1

TECO ELECTRIC & MACHINERY CO., LTD. AND SUBSIDIARIES

Major shareholders information

March 31, 2020

Table 11

Name of major shareholders	Shares	Shares
	Number of shares held	Ownership (%)
PJ Asset Management Co., Ltd Jia-Yuan Investment Co., Ltd	273,198,000 127,360,000	13.88% 6.47%

Table 11, Page 1