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TMC Interim / Quarterly Report 2021

Dec 28, 2021

52014_rns_2021-12-28_35e78387-7c79-4627-881c-0c977da31867.pdf

Interim / Quarterly Report

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TAIWAN MASK CORPORATION AND SUBSIDIARIES Consolidated Financial Statements for the Three Months Ended March 31, 2021 and 2020 and Independent Auditors’ Review Report

(Stork code ： 2338)

.

Address ： No. 11, Innovation Rd. I, Science-Based Industrial Park, Hsinchu, Taiwan, R.O.C.

Telephone ： 886-3-563-4370 

~1~

Auditor’s Report

To Taiwan Mask Corporation,

Introduction

We have reviewed the accompanying consolidated balance sheets of TAIWAN MASK CORPORATION and subsidiaries (the “Group”) as of March 31, 2021 and 2020, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the three-month periods ended March 31, 2021 and 2020, 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.

Basis for Qualified Conclusion

As explained in Note 4(3), the accompanying consolidated financial statements included non-significant consolidated subsidiaries, which statements reflect total assets amounting to $763,952 thousand and $620,051 thousand, constituting 7.17% and 10.40% of consolidated total assets as of March 31, 2021 and 2020, respectively, total liabilities amounting to $627,097 thousand and $372,274 thousand, constituting 9.05% and 12.09% of consolidated total liabilities as of March 31, 2021 and 2020, respectively, and total comprehensive income (loss) amounting to ($81,682) thousand and ($55,324) thousand, constituting (29.20%) and 

~2~

20.93% of consolidated total comprehensive income for the three-month periods ended March 31, 2021 and 2020, respectively. As explained in Note 6(7), these amounts and the related information disclosed in the accompanying consolidated financial statements were based on the un-reviewed financial statements of consolidated subsidiaries and investments accounted for under equity method. These investments accounted for under equity method amounted to $382,631 thousand and $92,095 thousand, constituting 3.59% and 1.54% of consolidated total assets as of March 31, 2021 and 2020, respectively, and the share of affiliates and joint venture profits and losses recognized by the equity method amounted to $50,867 thousand and $6,334 thousand, constituting (18.19%) and 2.40% of consolidated total comprehensive income (loss) for the three-month periods ended March 31, 2021 and 2020, respectively.

Qualified Conclusion

Based on our reviews and the reports of other independent auditors, 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 non-significant consolidated subsidiaries and investments accounted for under equity method been reviewed by independent auditors, that we might have become aware of had it not been for the situation described above, 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 of March 31, 2021 and 2020, and of its consolidated financial performance and its consolidated cash flows for the three-month periods ended March 31, 2021 and 2020, 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.

For and on behalf of PricewaterhouseCoopers, Taiwan 

~3~

Daniel Lee

Certified Public Accountants

Tina Cheng

May 5, 2021 

~4~

Taiwan Mask Corporation and Subsidiaries ~~Consolidated Balance Sheets~~ Mar. ~~, 31[st] 2020 and 2019; Dec., 31[st]~~ 2019

(Mar., 31[st] 2020 and 2019 Consolidated Balance Sheets were only reviewed, not audited.)

Assets
Current Assets
1100
Cash and Cash Equivalents
1110
Financial Asset at Fair Value Through Profit or
Loss-Cur.
1136
Financial Assets at Amortized Cost- Cur.
1140
Contract Asset－Cur.
1150
Notes Receivables(Net)
1170
Accounts Receivables(Net)
1180
Accounts Receivables－Related Parties(Net)
1200
Other Receivables
1210
Other Receivables－Related Parties
1220
Tax Assets
130X
Inventories
1410
Prepayments
1470
Other Current Assets
11XX
Total Current Assets
Non-Current Assets
1510
Financial Asset at Fair Value Through Profit or
Loss-Non Cur.
1535
Financial Assets at Amortized Cost-Non Cur.
1550
Investment under Equity Method
1600
Properties, Plants and Equipment
1755
Right-of-use asset
1760
Investment property (Net)
1780
Intangible Assets
1840
Deferred Income Tax Assets
1900
Other Non-Current Assets
15XX
Total Non-Current Assets
1XXX
Total Assets		 Mar.,31st2021

Amount
%
$ 1,880,081
18
500
-
38,337
-
77,505
1
159
-
893,554
9
4,048
-
15,855
-
752
-
9,949
-
220,224
2
39,581
-
7,494
-
3,188,039
30
2,655,033
25
41,422
-
382,631
3
3,376,816
32
502,667
5
311,551
3
132,230
1
1,590
-
65,195
1
7,469,135
70
$ 10,657,174
10
0		 Dec.,31st2020
%
11
-
-
1
-
10
-
1
-
-
2
1
1
27
24
1
4
34
6
3
1
-
-
73
100		 in thousand NTD
Mar.,31st2020
Amount
%
$ 1,169,006
20
500
-
48,178
1
19,167
-
60
-
805,619
14
4,155
-
14,971
-
174,259
3
269
-
257,279
4
67,260
1
3,555
-
2,564,278
43
508,636
8
34,254
1
92,095
1
1,771,388
30
412,011
7
38,517
1
124,287
2
3,562
-
413,621
7
3,398,371
57
$ 5,962,649
100
Amount
$ 1,036,658
500
34,212
93,809
879
894,743
6,599
47,668
3,068
2,490
205,414
59,271
53,982
2,439,293
2,134,913
40,922
361,161
3,116,087
508,467
313,099
124,426
2,332
29,265
6,630,672
$ 9,069,965		 Amount
$ 1,169,006
500
48,178
19,167
60
805,619
4,155
14,971
174,259
269
257,279
67,260
3,555
2,564,278
508,636
34,254
92,095
1,771,388
412,011
38,517
124,287
3,562
413,621
3,398,371
$ 5,962,649

(Continued)

  • 5 -

Taiwan Mask Corporation and Subsidiaries ~~Consolidated Balance Sheets~~ Mar. ~~, 31[st] 2020 and 2019; Dec., 31[st]~~ 2019

(Mar., 31[st] 2020 and 2019 Consolidated Balance Sheets were only reviewed, not audited.)

in thousand NTD in thousand NTD in thousand NTD
Mar.,31st2021 Dec.,31st2020 Mar.,31st2020
Liabilities and Equities Amount % Amount % Amount %
Current Liabilities
2100 Short Term Loans $ 3,266,720 31 $ 2,298,718 25 $ 857,512 14
2130 Contract Liabilities- Current 137,215 1 99,418 1 91,349 2
2150 Notes Payables 66 - 66 - 65 -
2170 Accounts Payables 364,722 3 397,237 4 394,228 7
2200 Other Payables 597,669 6 436,980 5 384,027 6
2220 Other Payables－Related Parties - - - - 1,358 -
2230 Current Income Tax Liabilities 105,570 1 80,722 1 44,498 1
2250 liability reserve－Current 11,708 - 12,917 - - -
2280 Lease liability -Current 230,871 2 244,651 3 33,075 1
2300 Other Current Liabilities 176,249 2 106,707 1 22,832 -
21XX Total Current Liabilities 4,890,790 46 3,677,416 40 1,828,944 31
Non-Current Liabilities
2540 Long-term Loans 1,669,125 16 1,635,872 18 808,572 14
2570 Deferred Income Tax 60,237 - 53,268 1 36,197 1
2580 Lease liability –Non Current 275,906 3 262,275 3 383,232 6
2640 Defined Benefit Liabilities- Non Current 25,857 - 18,213 - 20,277 -
2645 Guarantee deposits received 6,871 - 5,129 - 1,544 -
2670 Other non-Current Liabilities-Other 1,490 - 1,102 - - -
25XX Total Non-Current Liabilities 2,039,486 19 1,975,859 22 1,249,822 21
2XXX Total Liabilities 6,930,276 65 5,653,275 62 3,078,766 52
Equities Attributable to Parent Company
Stock
3110 Common Stock 2,527,136 24 2,527,136 28 2,527,136 42
Additional Paid-in Capital
3200 Additional Paid-in Capital 572,272 5 439,898 5 349,508 6
Retained Earnings
3310 Legal Reserve 587,990 6 587,990 6 544,712 9
3320 Special Reserve 2,666 - 2,666 - - -
3350 Uncompensated Deficit 1,152,593 11 814,617 9 216,855 4
Other Equities
3400 Other Equities ( 2,351 ) - 889 - ( 3,396) -
3500 Treasury Stock ( 942,818 ) ( 9) ( 834,598) ( 9) ( 835,332) ( 14)
31XX Total Equities Attributable to Parent
Company 3,897,488 37 3,538,598 39 2,799,483 47
36XX Non-Controlling Interests ( 170,590 ) ( 2) ( 121,908) ( 1) 84,400 1
3XXX Total Equities 3,726,898 35 3,416,690 38 2,883,883 48
Major Commitments and Contingencies
Major Events after Financial Statement Date
3X2X Total Liabilities and Equities $ 10,657,174 100 $ 9,069,965 100 $ 5,962,649 100

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

~6~

Taiwan Mask Corporation and Subsidiaries Consolidated Comprehensive Income Statements For the first 1 quarter ended Mar., 31st, 2021 and 2020

(Consolidated Comprehensive Income Statements in the period mentioned above were only reviewed, not audited.) in thousand NTD (Except gain (loss) per share is in NTD)

2021/1/1- 2020/1/1- -
2021/3/31 2020/3/31
Items Amount % Amount %
4000 Operating Incomes $ 1,276,063 100 $
1,105,867		 100
5000 Operating Costs ( 941,503) ( 74) ( 922,261) ( 84)
5900 Gross Income from Operations 334,560 26 183,606 16
Operating Expenses
6100 Selling Expenses ( 38,545 ) ( 3) ( 29,001) ( 3)
6200 Administrative Expenses ( 199,361 ) ( 15) ( 49,476) ( 4)
6300 R & D Expenses ( 24,075 ) ( 2) ( 56,563) ( 5)
6450 Expected Credit Impairment (Loss) Benefit ( 90) - 519 -
6000 Total Operating Expenses ( 262,071) ( 20) ( 134,521) ( 12)
6900 Operating Gain 72,489 6 49,085 4
Non-Operating Incomes and Losses
7100 Interest Incomes 681 - 2,614 -
7010 Other Incomes 14,657 1 1,241 -
7020 Other Gains and Losses 320,955 25 ( 269,068) ( 24)
7050 Financial Costs ( 18,625 ) ( 1) ( 5,307) -
7060 The share of affiliates and joint venture profits and losses
recognized by the equity method ( 50,867) ( 4) ( 6,334) ( 1)
7000 Total Non-Operating Incomes and Losses 266,801 21 ( 276,854) ( 25)
7900 Earnings Before Tax 339,290 27 ( 227,769) ( 21)
7950 Income Tax Expense ( 56,355) ( 5) ( 35,013) ( 3)
8200 Net Income (Loss) $ 282,935 22 ($ 262,782) ( 24)
Other Comprehensive Incomes (Net)
8311 Re-measurements of Defined Benefit Plan $ 1,758 - $
-		 -
8361 Financial statement translation differences of foreign
operations ( 3,240) - ( 1,524) -
8360 Total Components of other comprehensive income that will
be reclassified to profit or loss ( 3,240) - ( 1,524) -
8500 Total Comprehensive Incomes $ 281,453 22 ($ 264,306) ( 24)
Net Incomes (Losses) Attributable to：
8610 Parent Company $ 336,218 26 ($
215,946) (		 20)
8620 Non-Controlling Interest ( 53,283) ( 4) ( 46,836) ( 4)
Total $ 282,935 22 ($ 262,782) ( 24)
Total Comprehensive Incomes (Losses) Attributable to：
8710 Parent Company $ 334,736 26 ($
217,470) (		 20)
8720 Non-Controlling Interest ( 53,283) ( 4) ( 46,836) ( 4)
Total $ 281,453 22 ($ 264,306) ( 24)
Basic Gain(Loss) per Share
9750 Net Gain (Loss) $ 1.64 ($ 1.09)
Diluted Gain or Loss per Share
9850 Net Gain (Loss) $ 1.62 ($ 1.09)

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

~7~

in thousand NTD

Taiwan Mask Corporation and Subsidiaries Consolidated Changes of Equities Statements For the First 1 Quarter Ended Mar., 31[st] , 2021 and 2020

(Consolidated Changes of Equities Statements in the period mentioned above were only reviewed, not audited. )

in thousand N
2020/1/1-2020/3/31
Beginning Balance as of 2020/1/1
Net Income
Other Comprehensive Profit or Loss
Total Comprehensive Profit or Loss
Share-based payment transaction
Shareholders do not receive dividends overdue
Ending Balance as of 2020/3/31
2021/1/1-2021/3/31
Beginning Balance as of 2021/1/1
Net Income
Other Comprehensive Profit or Loss
Total Comprehensive Profit or Loss
Changes in shares of affiliates and joint ventures recognized under
the equity method
Share-based payment transaction
Treasury Stock Buyback
Subsidiary's cash capital increase and non-controlling equity
investment
Ending Balance as of 2021/3/31		 Common Stock Equities Attributable to P are nt Company Total Equities
Additional
Paid-in Capital		 Legal
Reserves
$544,712

-
-
-
-
-
$544,712

$587,990

-
-
-
-
-
-
-
$587,990
 Retained Earnings Other Equities
Unrealized Gain
(Loss) on
Financial Assets
at Fair Value
Through Other
Comprehensive
Income
TreasuryStock
($ 2,666 )
($ 835,332 )
-
-
-
-
-
-
-
-
-
-
($ 2,666 )
($ 835,332 )
($ 2,666 )
($ 834,598 )
-
-
-
-
-
-
-
-
-
306,920
-
(
415,140 )
-
-
($ 2,666 )
($ 942,818 )		 Total Non-Control
lingInterest
Special
Reserves		 Uncompensated
Deficit		 Unrealized Gain
(Loss) on
Financial Assets
at Fair Value
Through Other
Comprehensive
Income
$2,527,136
-
-
-
-
-
$2,527,136
$2,527,136
-
-
-
-
-
-
-
$2,527,136		 $ 322,777
-
-
-
26,604
127
$ 349,508
$ 439,898
-
-
-
23,357
109,017
-
-
$ 572,272		 $ -
-
-
-
-
-
$ -
$2,666
-
-
-
-
-
-
-
$2,666		 $ 432,801
(
215,946 )
-
(
215,946 )
-
-
$ 216,855
$ 814,617
336,218
1,758
337,976
-
-
-
-
$ 1,152,593		 $ 794
-
(
1,524 )
(
1,524 )
-
-
($ 730 )
$ 3,555
-
(
3,240 )
(
3,240 )
-
-
-
-
$ 315		 ($ 2,666 )
-
-
-
-
-
($ 2,666 )
($ 2,666 )
-
-
-
-
-
-
-
($ 2,666 )		 ($ 835,332 )
-
-
-
-
-
($ 835,332 )
($ 834,598 )
-
-
-
-
306,920
(
415,140 )
-
($ 942,818 )		 $ 2,990,222
(
215,946 )
(
1,524 )
(
217,470 )
26,604
127
$ 2,799,483
$ 3,538,598
336,218
(
1,482 )
334,736
23,357
415,937
(
415,140 )
-
$ 3,897,488		 $131,236
(
46,836 )
-
(
46,836 )
-
-
$84,400
($121,908 )
(
53,283 )
-
(
53,283 )
(
27,728 )
-
-
32,329
($170,590 )		 $3,121,458
(
262,782 )
(
1,524 )
(
264,306 )
26,604
127
$2,883,883
$3,416,690
282,935
(
1,482 )
281,453
(
4,371 )
415,937
(
415,140 )
32,329
$3,726,898

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

~8~

Taiwan Mask Corporation and Subsidiaries Consolidated Statements of Cash Flow

For the three-month period ended March 31, 2020 and 2019

in thousand NTD

Cash Flow from Operating Activities
Net Income(Loss) Before Tax

Adjustments to Reconcile Net Income to Net Cash Flow from Operating Activities
Revenues and Expenses
Depreciation
Amortization
Expected Credit Impairment Benefit / Bad Debt Expenses
Interest income
(
Interest Expenses
Net Profit of Financial Asset at Fair Value Through Profit or Loss
(
Gain (loss) on disposal of investments
Share-based payment transaction
The Share of Affiliates Profits and Losses Recognized by the Equity Method
Disposal of Property, Plants and Equipment
(
The Changes of Assets/ Liabilities related to Operating Activities
The Changes of Assets related to Operating Activities
Force of Financial Asset at Fair Value Through Profit or Loss
(
Contract Assets
Notes Receivable
Accounts Receivable
Accounts Receivable-related Parties
Other Receivables
Other Receivables-related Parties
Inventories
(
Prepayments
Other Current Assets
Other Non-Current Assets
(
The Changes of Liabilities related to Operating Activities
Contract Liabilities
Accounts Payable
(
Other Payables
Other Payables- related Parties
Liability reserve
(
Other Current Liabilities
Accrued Pension Liability
Other non-Current Liabilities
Net Cash In-Flow from Operating Activities
Interest Received
Interest Paid
(
Income Tax Paid
(
Net Cash In-Flow from Operating Activities		 Cash Flow from Operating Activities
Net Income(Loss) Before Tax

Adjustments to Reconcile Net Income to Net Cash Flow from Operating Activities
Revenues and Expenses
Depreciation
Amortization
Expected Credit Impairment Benefit / Bad Debt Expenses
Interest income
(
Interest Expenses
Net Profit of Financial Asset at Fair Value Through Profit or Loss
(
Gain (loss) on disposal of investments
Share-based payment transaction
The Share of Affiliates Profits and Losses Recognized by the Equity Method
Disposal of Property, Plants and Equipment
(
The Changes of Assets/ Liabilities related to Operating Activities
The Changes of Assets related to Operating Activities
Force of Financial Asset at Fair Value Through Profit or Loss
(
Contract Assets
Notes Receivable
Accounts Receivable
Accounts Receivable-related Parties
Other Receivables
Other Receivables-related Parties
Inventories
(
Prepayments
Other Current Assets
Other Non-Current Assets
(
The Changes of Liabilities related to Operating Activities
Contract Liabilities
Accounts Payable
(
Other Payables
Other Payables- related Parties
Liability reserve
(
Other Current Liabilities
Accrued Pension Liability
Other non-Current Liabilities
Net Cash In-Flow from Operating Activities
Interest Received
Interest Paid
(
Income Tax Paid
(
Net Cash In-Flow from Operating Activities		 2020/1/1-
2020/3/31
$ 339,290 (
99,539
1,514
90 (

681 ) (
18,625

317,262 )
- (
109,017
50,867

10 )

202,858 )
16,304 (
720 (
1,099 (
2,551 (
31,831
2,316

14,810 ) (
19,690 (
46,488

241 )
37,797

32,515 )
39,611
- (

1,209 )
21,389 (
7,644 (
388
277,184
663

18,533 ) (

23,797 ) (
235,517		 2020/1/1-
2020/3/31
$ 339,290 (
99,539
1,514
90 (

681 ) (
18,625

317,262 )
- (
109,017
50,867

10 )

202,858 )
16,304 (
720 (
1,099 (
2,551 (
31,831
2,316

14,810 ) (
19,690 (
46,488

241 )
37,797

32,515 )
39,611
- (

1,209 )
21,389 (
7,644 (
388
277,184
663

18,533 ) (

23,797 ) (
235,517		 2019/1/1-
2019/3/31
$ 227,769 )

106,455

2,525

519 )

2,614 )

5,307

352,092

73,869 )

26,604

6,334

-

205,925

1,046 )

60 )

75,525 )

2,587 )

1,942

-

12,122 )

19,020 )

2,635

1,326

51,493

24,401

40,361

74 )

-

766 )

34 )

-

411,395

4,042

4,968 )

2,650 )

407,819

(Continued)

  • 9 -

Taiwan Mask Corporation and Subsidiaries Consolidated Statements of Cash Flow

For the three-month period ended March 31, 2020 and 2019

in thousand NTD
2020/1/1- 2019/1/1-
2020/3/31 2019/3/31
Cash Flow from Investment Activities
Acquisition of Amortized Cost Financial Assets ( $ 4,625 ) ( $ 7,942 )
Acquisition of investment property by the Equity Method ( 49,000 ) -
Acquisition of Property, Plants and Equipment ( 295,255 ) ( 601,591 )
Disposal of Property, Plants and Equipment 10 -
Acquisition of Intangible Assets ( 9,318 ) ( 36 )
Increase of Refundable Deposits ( 3,093 ) ( 763 )
Other Receivables-related Parties - 30,000
Net Cash In-Flow(Out-Flow) from Investment Activities ( 361,281 ) ( 580,332 )
Cash Flow from Funding Activities
Increase of Short Term Loan 1,878,192 400,000
Redemption of Short Term Loan ( 910,190 ) ( 347,426 )
Increase of Long Term Loan 101,000 416,000
Redemption of Long Term Loan ( 19,594 ) ( 57,018 )
Treasury Stocks Transfer to Employees 306,920 -
Treasury Stock Buyback Cost ( 415,140 ) -
Redemption of Lease Principal ( 10,589 ) ( 15,118 )
Increase of Guarantee Deposits 1,742 -
Shareholders do not receive dividends reclassified as Additional Paid-in Capital - 127
Subsidiary's cash capital increase and non-controlling equity investment 32,329 -
Net Cash In-Flow (Out-Flow) from Funding Activities 964,670 396,565
Adjustments of Exchange Rate 4,517 ( 1,563 )
Increase (Decrease) of Cash and Cash Equivalents 843,423 222,489
Beginning Balance of Cash and Cash Equivalents 1,036,658 946,517
Ending Balance of Cash and Cash Equivalents $ 1,880,081 $ 1,169,006

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

~10~

TAIWAN MASK CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2021 AND 2020 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT AS OTHERWISE INDICATED)

(UNAUDITED)

1、 HISTORY AND ORGANISATION

TAIWAN MASK CORPORATION (TMC or the Company) was established in the Republic of China (R.O.C.) on 1988/10/21 and first operated in March, 1989. Based on the resolution made on 2000/6/12 shareholders‟ meeting, TMC merged Shin -Tai Corporation on 2000/12/1. The Company and the subsidiaries (the Group) is primarily engaged in the research, development, manufacturing and selling of Mask and Circuit, and also provide technology assistance, consultation, inspection and maintenance services for Mask and Circuit. The Group is also manufacturing and selling medical wares.

  • 2 、 THE DATE OF AUTHORIZATION FOR ISSUANCE OF THE CONSOLIDATED FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORIZATION

These consolidated financial statements were reported to the Board of Directors and issued on May 6, 2020.

3 、 APPLICATION OF NEW STANDARDS, AMENDMENTS AND

INTERPRETATIONS

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

New standards, interpretations and amendments endorsed by the FSC effective from 2021 are as follows:

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

Note: Earlier application from January 1, 2021 is allowed by the FSC. 

~11~

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 International Financial Reporting Standards as endorsed by the FSC but not yet adopted by the Group

None.

  • (3) International Financial Reporting Standards 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:

Effective date by International Accounting New Standards, Interpretations and Amendments Standards Board Amendments to IFRS 3, “Reference to the conceptual framework” January 1, 2022 Amendments to IFRS 10 and IAS 28, “ Sale or contribution of assets To be determined by between an investor and its associate or joint venture” International Accounting Standards Board IFRS 17, “Insurance contracts” January 1, 2023 Amendments to IFRS 17, “Insurance contracts” January 1, 2023 Amendments to IAS 1, “ Classification of liabilities as current or nonJanuary 1, 2023 current” Amendments to IAS 1, “Disclosure of accounting policies” January 1, 2023 Amendments to IAS 8, “Definition of accounting estimates” January 1, 2023 Amendments to IAS 16, “Property, plant and equipment: proceeds before January 1, 2022 intended use” Amendments to IAS 37, “Onerous contracts - cost of fulfilling a contract January 1, 2022 Annual improvements to IFRS Standards 2018 - 2020 January 1, 2022

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

  • 4 、 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

~12~

(1) Compliance statement

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

  • B. These consolidated financial statements are to be read in conjunction with the consolidated financial statements for the year ended December 31, 2020.

(2) Basis of preparation

  • A. Except for the following significant 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 measured at fair value.

  • (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 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

  • The principles applied in the preparation of these financial statements are the same as the ones applied in 2020.

  • B. Subsidiaries included in the consolidated financial statements: 

~13~
Investor Subsidiary Main business activities
Investing in communication
business
Investing in communication
business
Electronic component
manufacturing, wholesale of
electronic materials and precision
instruments, power component
design, etc.
Research, design, development,
manufacturing and sales of
display panel control chips and
modules
Medical device manufacturing,
wholesale and trading
Medical device manufacturing,
wholesale and trading
Design, packaging and testing of
NAND flash memory and solid
state hard disk and other related
products
Electronic components
Investing in communication
business
Investing in communication
business
Investing in communication
business
Investing in communication
business
Investing in communication
business
Electronic component
manufacturing, wholesale of
electronic materials and precision
instruments, power component
design, etc.
Electronic component
manufacturing, wholesale of
electronic materials and precision
instruments, power component
design, etc.		 Ownership (%) March 31,2020
100
100
100
100
-
-
38.16
52.19
100
100
100
100
100
100
100		 Remark
March 31,2021
100
100
100
-
91.53
0.23
38.16
52.19
100
100
100
100
-
100
100		 December 31,2020
100
100
100
-
13.00
3.21
38.16
52.19
100
100
100
100
100
100
100
Taiwan Mask
Corporation
Taiwan Mask
Corporation
Taiwan Mask
Corporation
Taiwan Mask
Corporation
Taiwan Mask
Corporation
Youe Chung
Capital
Corporation
Youe Chung
Capital
Corporation
Aptos
Technology INC.
Aptos
Technology INC.
Adl Engineering
INC.
Aptos Global
Holding Corp.
Miracle
Technology CO.,
LTD.
Miracle
Technology CO.,
LTD.
Jingjing
Investment Co.,
Ltd.
Jingjing
Investment Co.,
Ltd.		 SunnyLake
Park
International
Holding, Inc.
Youe Chung
Capital
Corporation
Miracle
Technology CO.,
LTD.
Weida Hi-Tech
CO., LTD.
Innova Vision
INC.
Innova Vision
INC.
Aptos Technology
INC.
Adl Engineering
INC.
New Sunrise
Limited
Aptos Global
Holding Corp.
Aptos Technology
Co.,Limited
Jingjing
Investment Co.,
Ltd.
Miracle
Technology
(Samoa) Co., Ltd.
Miko-China
Enterprise
(Shanghai) Co.,
Ltd.
MIKO Technology
Co., Ltd.		 Note 5
Note 1,5
Note 2,5
Note 2,5
Note 5
Note 5
Note 5
Note 5
Note 5
Note 3		 
~14~
Investor Subsidiary Main business activities
Investing in communication
business
Electronic component
manufacturing, wholesale of
electronic materials and precision
instruments, power component
design, etc.
Electronic component
manufacturing, wholesale of
electronic materials and precision
instruments, power component
design, etc.
IC product design, production and
sales
IC product design, production and
sales
Touch screen system hardware
design and software development
and production
Investing in communication
business
Investing in communication
business
Investing in communication
business
Medical device manufacturing,
wholesale and trading
Investing in communication
business
Medical device manufacturing,
wholesale and trading
Investing in communication
business
Medical device manufacturing,
wholesale and trading		 Ownership (%) March 31,2020
100
100
-
64.29
35.71
100
100
22.30
77.70
-
-
-
-
-		 Remark
March 31,2021
-
-
100
79.17
20.83
-
-
-
-
100
100
9.23
100
90.77		 December 31,2020
100
100
-
64.29
35.71
-
-
-
-
100
100
9.23
100
90.77
Miracle
Technology
(Samoa) Co.,
Ltd.
Misun
Technology Co.,
Ltd.
Miracle
Technology CO.,
LTD.
Miko-China
Enterprise
(Shanghai) Co.,
Ltd.
Miracle
International
Enterprise(Shan
Hai) Co., Ltd.
Weida Hi-Tech
CO., LTD.
Weida Hi-Tech
CO., LTD.
Weida Hi-Tech
CO., LTD.
Smart Touch
Co., Ltd.
Innova Vision
INC.
Innova Vision
INC.
Innova Vision
INC.
Innova Vision
INC.
Innova Vision
(B.V.I.) Inc.		 Misun
Technology Co.,
Ltd.
Miracle
International
Enterprise(ShanH
ai) Co., Ltd.
Miracle
International
Enterprise(ShanH
ai) Co., Ltd.
Sichuan Miracle
Power
Technology Co.,
Ltd.
Sichuan Miracle
Power
Technology Co.,
Ltd.
Touch Hi-Tech
Smart Touch Co.,
Ltd.
Central Star Ltd.
Central Star Ltd.
Innova
Technology
Company
Innova Vision
(B.V.I.) Inc.
Innova Vision
Kabushiki Kaisha
Calaview
International
Holding
Company Limited
Innova Vision
Kabushiki Kaisha		 Note 3
Note 3
Note 3
Note 4
Note 4
Note 1,5
Note 1,5
Note 1,5
Note 1,5
Note 2,5
Note 2,5
Note 2,5
Note 2,5
Note 2,5

Note1 ： Weida Hi-Tech Company issued new stocks for cash capital increase separately on April 10, 2020 and May 15, 2020. The Group did not keep up with the subscription for shareholding, which caused the shareholding to drop to 36.70%. Weida Hi-Tech Company then held an extraordinary 

~15~

general meeting of shareholders on June 2, 2020 to elect new directors. The Company won one seat of director and lost the control of the Weida. Therefore, the Group has stopped including Weida Hi-Tech and its subsidiaries in the consolidated financial statements since June 2, 2020. For cash flow information related to its subsidiaries, please refer to Note 6 (30) for supplementary cash flow information.

  • Note2 ： On December 16, 2020, Innova Vision Inc. held elections for all directors at its extraordinary general meeting. The Company’s subsidiary Youe Chung Capital Corporation won all the director seats, obtaining substantial control of this company. Therefore, it is included in consolidated financial statements as a consolidated entity from that date. TMC in 2021 of the first quarter participation in Innova Vision cash capital increase of the Company, the investment amount is $ 367,671 , increasing its overall stake to 91.76% .

  • Note 3 ： Subsidiary of the Company - Miracle Technology CO., LTD to adjust the organizational structure, on March 3, 2021 of Miracle Technology CO., LTD. directly holds Miracle International Enterprise (Shanghai) Co., Ltd.

  • Note 4 ： Miko-China Enterprise (Shanghai) Co., Ltd. increase investment to Sichuan Miracle Power Technology Co., Ltd. in March, 2021 and the shareholding is 79.17%. ； Miracle International Enterprise (Shanghai) Co., Ltd. shareholding to drop to 20.83%.

  • Note 5 ： The financial statements of the entity as of and for the ended March 31, 2021 and 2020 were not reviewed by the independent accountants as the entity did not meet the definition of a significant subsidiary.

  • C. Subsidiaries not included in the consolidated financial statements: None.

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

  • E. Significant restrictions: None.

  • F. Subsidiaries that have non-controlling interests that are material to the Group:

As of March 31, 2021, December 31, 2020 and March 31, 2020 the non-controlling interest amounted to ($170,590), ($121,908) and $84,400, respectively. The information of non-controlling interest and respective subsidiaries is as follows: 

~16~
subsidiary
Main
business
activities
Amount
Ownership (%)
Amount
Ownership (%)
Aptos
Technology INC.
and
Subsidiaries
Taiwan ($ 111,089)
61.84%
($ 63,630)
61.84%
Non-controllinginterest
March 31,2021
December 31,2020
subsidiary
Main
business
activities
Amount
Ownership (%)
Aptos
Technology INC.
and
Subsidiaries
Taiwan
$ 84,400
61.84%
March 31,2020
Non-controllinginterest		 subsidiary
Main
business
activities
Amount
Ownership (%)
Amount
Ownership (%)
Aptos
Technology INC.
and
Subsidiaries
Taiwan ($ 111,089)
61.84%
($ 63,630)
61.84%
Non-controllinginterest
March 31,2021
December 31,2020
subsidiary
Main
business
activities
Amount
Ownership (%)
Aptos
Technology INC.
and
Subsidiaries
Taiwan
$ 84,400
61.84%
March 31,2020
Non-controllinginterest		 subsidiary
Main
business
activities
Amount
Ownership (%)
Amount
Ownership (%)
Aptos
Technology INC.
and
Subsidiaries
Taiwan ($ 111,089)
61.84%
($ 63,630)
61.84%
Non-controllinginterest
March 31,2021
December 31,2020
subsidiary
Main
business
activities
Amount
Ownership (%)
Aptos
Technology INC.
and
Subsidiaries
Taiwan
$ 84,400
61.84%
March 31,2020
Non-controllinginterest		 Remark
Remark
Amount
$ 84,400		 Ownership (%)
61.84%

Summarized financial information of the subsidiaries: Balance sheets

Balance sheets
Aptos TechnologyINC. and Subsidiaries
March 31,2021 December 31,2020 March 31,2020
Current assets $ 346,892
 $ 227,618
 $ 249,938
Non-current assets 429,568 462,810 218,521
Current liabilities ( 539,895)
 ( 657,891)
 ( 303,285)
Non-current liabilities ( 156,178)
 ( 156,705)
 ( 82,551)
Total net assets $ 80,387 ($ 124,168) $ 82,623

Statements of comprehensive income

~17~
Statements of cash flows
Revenue
Loss before income tax

Income tax expense
Loss for the period from continuing
operations

Loss for the period

Other comprehensive income, net of
tax
Total comprehensive income for the
period

Comprehensive income attributable to
non-controlling interest
Net cash provided by operating
activities
Net cash provided by investing
activities
Net cash provided by financing
activities
Increase (decrease) in cash and cash
equivalents
Cash and cash equivalents, beginning
Cash and cash equivalents, end of		 periods ended March 31,
2021
periods ended March 31,
2020
103,575
$ 141,495
$ 84,891)
(
43,344)
(
-

-
84,891)
(
43,344)
(
84,891)
(
43,344)
(
-
-

84,891)
($ 43,344)
($
-
$ 27,173)
($ Aptos TechnologyINC. and Subsidiaries
For the three-month
periods ended March 31,
2021
For the three-month
periods ended March 31,
2020
Aptos TechnologyINC. and Subsidiaries		 periods ended March 31,
2021
periods ended March 31,
2020
103,575
$ 141,495
$ 84,891)
(
43,344)
(
-

-
84,891)
(
43,344)
(
84,891)
(
43,344)
(
-
-

84,891)
($ 43,344)
($
-
$ 27,173)
($ Aptos TechnologyINC. and Subsidiaries
For the three-month
periods ended March 31,
2021
For the three-month
periods ended March 31,
2020
Aptos TechnologyINC. and Subsidiaries
For the three-month
periods ended March 31,
2021
15,817
$
156

91,920
107,893

39,193
147,086
$		 26,745)
($ 18,484)
(
38,721
6,508)
(
87,602

81,094
$

(4) Employee benefits

Pensions

Defined benefit plans

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

(5) Income tax

The interim period income tax expense is calculated according to pretax income time effective income tax rate, and the related 

~18~

information is disclosed accordingly.

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

No major changes in this period, please see Note 5 in the consolidated financial statements of 2020.

  • 6 、 DETAILS OF SIGNIFICANT ACCOUNTS

  • (1) Cash and cash equivalents

ash and cash equivalents
March 31, 2021
December 31,2020
Cash on hand and petty cash
957
$ 309
$ Checking accounts and demand
1,805,657
905,755

Time deposits
73,467
130,594

Total
1,880,081
$ 1,036,658
$		 March 31, 2020
711
$ 1,103,197
65,098
1,169,006
$

  • 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. The Group has no cash and cash equivalents pledged to others.

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

Items
Current items:
Financial assets mandatorily measured
at fair value through profit or loss
Beneficiary certificate
Valuation adjustment
Non-current items:
Financial assets mandatorily measured
at fair value through profit or loss
Listed stocks
Unlisted stocks
Private Offered Fund
Valuation adjustment		 March 31,2021
December 31,2020
March 31,2020
500
$ 500
$ 500
$ -

-
-
500
$ 500
$ 500
$ 1,505,173
$ 1,302,315
$ 398,956
$ 95,354
102,023
142,636
10,000
10,000
-
1,610,527

1,414,338
541,592
1,044,506
720,575
32,956)
(
2,655,033
$ 2,134,913
$ 508,636
$
  • A. Amounts recognized in profit or loss in relation to financial assets at fair value through profit or loss is listed below: 
~19~
Financial assets mandatorily
measured at fair value through profit
or loss
Listed stocks
Unlisted stocks		 For the three-month
periods ended March 31,
2021
For the three-month
periods ended March 31,
2020
317,262
$ 278,223)
($ 6,048

-

323,310
$
278,223)
($

  • B. Information to financial assets at fair value through profit or loss pledged is provided in Note 8.

  • C. Information relating to price risk and fair value of financial assets at fair value through profit or loss is provided in Note 12(2) and (3).

(3) Financial assets at amortized cost

Items
Current items:
Deposits in banks
Time deposits
Non-current items:
Time deposits		 March 31, 2021
December 31, 2020
15,337
$ 11,111
$ 23,000
23,101
38,337
$ 34,212
$ 41,422
$ 40,922
$ 41,422
$ 40,922
$		 March 31,2020
11,111
$ 37,067
48,178
$
34,254
$
34,254
$
  • A. Amounts recognized in profit or loss in relation to financial assets at amortized cost is listed below:
Interest income For the three-month
periods ended March 31,
2021		 For the three-month
periods ended March 31,
2020
30
$		 37
$

  • B. As of March 31, 2021, December 31, 2020 and March 31, 2020, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the financial assets at amortized cost held by the Group were $79,759, $75,134 and $82,432, respectively.

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

~20~

(4) Notes and accounts receivable

March 31,2021 December December 31,2020 March 31,2020
Notes receivable $ 159
 $ 879
 $ 60
Accounts receivable 905,041 906,142
 812,820
Accounts receivable-related parties 4,048 6,599
 4,155
909,089 912,741
 816,975
Less: Allowance for uncollectible ( 11,487)
 ( 11,399)
 ( 7,201)
accounts
$ 897,602
 $ 901,342 $ 809,774
  • A. The ageing analysis of accounts receivable and notes receivable that were past due but not impaired is as follows:

==> picture [377 x 246] intentionally omitted <==

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

March 31, 2021 December 31, 2020
Accounts receivable Notes receivable Accounts receivable Notes receivable
Not past due $ 806,733 $ 159 $ 723,020 $ 879
- -
Up to 30 days 67,588 149,442
- -
31 to 90 days 22,864 32,507
- -
91 to 180 days 5,642 2,169
Over 180 days 6,262 - 5,603 -
$ 909,089 $ 159 $ 912,741 $ 879
March 31, 2020
Accounts receivable Notes receivable
Not past due $ 701,601 $ 60
-
Up to 30 days 75,085
-
31 to 90 days 35,072
-
91 to 180 days 4,979
Over 180 days 238 -
$ 816,975 $ 60
----- End of picture text -----

The above ageing analysis was based on past due date.

  • B. As of March 31, 2021, December 31, 2020 and March 31, 2020, the balances of receivables (including notes receivable) from contracts with customers. As of January 1, 2020, the balances of receivables amounted to $738,863, respectively.

  • C. As of March 31, 2021, December 31, 2020 and March 31, 2020, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the Group’s accounts receivable were $897,602, $901,342 and $809,774, respectively.

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

~21~

(5) Inventories

March 31, 2021

nventories
March 31,2021		 nventories
March 31,2021		 nventories
March 31,2021
The cost of inventories recognized as expense for the period:
Cost
Allowance for
valuation loss
Book value
Raw materials
227,343
$ 52,396)
($ 174,947
$ Work in progress
32,305
10,452)
(
21,853
Finished goods
19,146
16,229)
(
2,917
Merchandise inventories
21,262
755)
(
20,507
Total
300,056
$ 79,832)
($ 220,224
$ Cost
Allowance for
valuation loss
Book value
Raw materials
236,557
$ 57,847)
($ 178,710
$ Work in progress
16,363
7,257)
(
9,106
Finished goods
27,684
17,653)
(
10,031
Merchandise inventories
8,082

515)
(
7,567
Total
288,686
$ 83,272)
($ 205,414
$ December 31, 2020
Cost
Allowance for
valuation loss
Book value
Raw materials
201,158
$ 52,412)
($ 148,746
$ Work in progress
35,858
7,883)
(
27,975
Finished goods
71,872
17,910)
(
53,962
Merchandise inventories
31,937

5,341)
(
26,596
Total
340,825
$ 83,546)
($ 257,279
$ March 31,2020
For the three-month
periods ended March 31,
2021
For the three-month
periods ended March 31,
2020
Cost of goods sold
946,947
$ 925,138
$ Allowance for valuation and
obsolescence loss
5,444)
(
2,877)
(
941,503
$ 922,261
$
946,947
$ 5,444)
(
941,503
$		 925,138
$ 2,877)
(
922,261
$

The Group's inventory portion prepared for the depreciation loss in the previous period from January 1 to March 31, 2021 has been sold, resulting in a rebound in the net realizable value of the inventory and a reduction in the cost of goods sold. 

~22~

(6) Investments accounted for using equity method

Associates:
Advagene Biopharma Co., Ltd.
Xsense Technology
Corporation
Weida Hi-Tech		 March 31,2021
December 31,2020
107,255
$ 88,915
$ 193,359
186,821
82,017
85,425
382,631
$ 361,161
$		 March 31,2020
92,095
$ -

-
92,095
$

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:

results are summarized below:
For the three-month
periods ended March 31,
2021
Income (Loss) from Continuing Operation
50,867)
($ Other comprehensive income (net after
tax）
-

Total comprehensive income (loss) for
the period
50,867)
($		 For the three-month
periods ended March 31,
2020
17,461)
($ -

17,461)
($

The Group has invested in Advagene Biopharma, Xsense Technology Corporation and Weida Hi-Tech, and held 32.76%, 41.43% and 36.70%, respectively, of their equity, and is there single largest shareholder. However, the Group does not actually participate in the business decisions and operating policies, including strategic decisions (such as financing, acquisitions, personnel and dividend policies) of Advagene Biopharma, Xsense Technology (BVI) and Weida Hi-Tech. The Group's shareholding alone does no reach the statutory attendance percentage of shareholders meetings, indicating that the Group has no actual ability to direct relevant activities. Therefore it is judged that the Group has no control over the companies, and only has a significant influence on them. 

~23~

(7) Property, plant and equipment

At January 1, 2021
Cost
Accumulated
depreciation

2021
January 1
Acquisitions
Disposals-Cost
Disposals-
Accumulated
depreciation
Depreciation

Reclassification-Cost
Net exchange
differences-Cost
Net exchange
differences-
Accumulated
depreciation
March 31
March 31, 2021
Cost
Accumulated
depreciation
 Buildings(Land)
1,840,184
$ 566,920)
(

1,273,264
$ 1,273,264
$ 14,889
-
-
14,476)
(

28,443
-

-
1,302,120
$ 1,883,516
$ 581,396)
(

1,302,120
$		 Machinery and
equipment
2,938,927
$ 1,273,724)
(

1,665,203
$ 1,665,203
$ 1,690
-
-
65,547)
(

57,614
2)
(

-
1,658,958
$ 2,998,229
$ 1,339,271)
(

1,658,958
$		 Office
Equipment
28,540
$ 15,004)
(

13,536
$ 13,536
$ 3,143
-
-
1,449)
(

-
13)
(

3
15,220
$ 31,670
$ 16,450)
(

15,220
$		 Transportation
3,675
$ 2,620)
(

1,055
$ 1,055
$ 810
-
-
133)
(

-
7)
(
5
1,730
$ 4,478
$ 2,748)
(

1,730
$		 Molding
Equipment
10,391
$ 6,390)
(

4,001
$ 4,001
$ -
-

-
895)
(

-
-
-
3,106
$ 10,391
$ 7,285)
(

3,106
$		 Other
Equipment
39,856
$ 17,539)
(
22,317
$ 22,317
$ 288
22)
(
22
2,747)
(
-

-
-
19,858
$ 40,122
$ 20,264)
(
19,858
$		 Construction in
progress and
equipment under
installation
Total
136,711
$ 4,998,284
$ -
1,882,197)
(
136,711
$ 3,116,087
$ 136,711
$ 3,116,087
$ 325,170
345,990
-
22)
(
-
22
-
85,247)
(
86,057)
(
-
-
22)
(
-
8
375,824
$ 3,376,816
$ 375,824
$ 5,344,230
$ -
1,967,414)
(
375,824
$ 3,376,816
$		 
~24~
At January 1, 2020
Cost
Accumulated
depreciation

2020
January 1
Acquisitions
Disposals-Cost
Disposals-
Accumulated
depreciation
Depreciation

Reclassification-Cost
Reclassification-
Accumulated
depreciation
Net exchange
differences-Cost
Net exchange
differences-
Accumulated
depreciation
March 31
March 31, 2020
Cost
Accumulated
depreciation
 Buildings (Land)
1,013,344
$ 529,905)
(

483,439
$ 483,439
$ 2,262
-
-
9,473)
(

9
-
-
-
476,237
$ 1,015,615
$ 539,378)
(

476,237
$		 Machinery and
equipment
1,767,700
$ 1,004,444)
(

763,256
$ 763,256
$ 44,733
-

-
74,548)
(

229,017
-
-

-
962,458
$ 2,041,450
$ 1,078,992)
(

962,458
$		 Office
Equipment
21,509
$ 11,377)
(

10,132
$ 10,132
$ 88
570)
(
570
1,077)
(

-
-
4)
(

3
9,142
$ 21,023
$ 11,881)
(

9,142
$		 Transportation
3,090
$ 2,194)
(

896
$ 896
$ -
-
-
91)
(

-
-
12)
(
11
804
$ 3,078
$ 2,274)
(

804
$		 Molding
Equipment
5,700
$ 2,960)
(

2,740
$ 2,740
$ 2,656
-

-
726)
(

-
-
-
-
4,670
$ 8,356
$ 3,686)
(

4,670
$		 Other
Equipment
52,091
$ 19,279)
(
32,812
$ 32,812
$ 2,946
8,397)
(
8,397
4,618)
(
-

-
-
-
31,140
$ 46,640
$ 15,500)
(
31,140
$		 Construction in
progress and
equipment under
installation
Total
253,644
$ 3,117,078
$ -
1,570,159)
(
253,644
$ 1,546,919
$ 253,644
$ 1,546,919
$ 262,319
315,004
-
8,967)
(
-
8,967
-
90,533)
(
229,026)
(
-
-
-
-
16)
(
-
14
286,937
$ 1,771,388
$ 286,937
$ 3,423,099
$ -
1,651,711)
(
286,937
$ 1,771,388
$		 
~25~

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

llows:
For the three-month For the three-month
periods ended March 31, periods ended March 31,
2021 2020
Amount capitalised $ -
 $ 235
Range of the interest rates for
-
capitalisation 1.797%

  • B. The significant components of buildings include main land, building and factory, which is/are depreciated over 3 and 56 years, respectively.

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

  • D. The property, plant and equipment of the Group are used for their own use.

(8) Leasing arrangements - lessee

  • A. The Group leases various assets including lands, buildings, machinery equipment, transportation equipment, and so on. Rental contracts are typically made for periods of 3 to 20 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 leased assets may not be used as security for borrowing purposes.

  • B. Short-term leases with a lease term of 12 months or less comprise other equipment. Low-value assets comprise other equipment.

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

follows:
Land
Buildings
Machinery and equipment
Transportation		 March 31,2021
December 31,2020
Book value
Book value
389,704
$ 390,879
$ 95,634
107,547
4,039
6,060
13,290
3,981
502,667
$ 508,467
$		 March 31,2020
Book value
311,020
$ 97,966
-
3,025
412,011
$		 
~26~
Land
Buildings
Machinery and equipment
Transportation		 For the three-month
periods ended March 31,
2021
For the three-month
periods ended March 31,
2020
Depreciation
Depreciation
4,318
$ 2,891
$ 4,968

11,986

2,020

-

1,438

875

12,744
$
15,752
$

  • D. For the three-month period ended March 31, 2021 and 2020, the increases to right-of-use assets were $10,440 and $34.

  • E. The information on income and expense accounts relating to lease contracts is as follows:

contracts is as follows:
Items affecting profit or loss
Interest expense of lease liabilities
Expenses of a short-term lease
contract
Expenses of leases of low-value
assets		 For the three-month
periods ended March 31,
2021		 For the three-month
periods ended March 31,
2020
1,359
$ 2,405

42		 946
$ 270
43

  • F. For the three-month period ended March 31, 2021 and 2020, the Group’s total cash outflow for leases were $14,395 and $16,377, respectively.

  • G. Lease extension option and lease termination option

When the Group determines the lease term, it considers all the facts and circumstances in which the exercise of the option is extended or the termination of the option does not result in an economic incentive. The lease period will be re-estimated when a significant event occurs that affects the exercise of the extension option or the non-exercise termination option.

－ (9) Leasing arrangements lessor

  • A. The underlying assets leased by the Group are construction. The duration of the lease contract is usually between 1 and 2 years. The lease contract is negotiated separately and contains various terms and conditions. In order to preserve the use of leased assets, the lessee is usually required not to use the leased assets as a loan guarantee.

  • B. The Group recognized rental income of $6,252 and $831 based on operating lease contracts for the three-month period ended March 31, 2021 and 2020, respectively, and none of the lease contracts were variable 

~27~

lease payments.

  • C. The maturity date of the Group's undiscounted lease payments leased under operating leases is as follows:
March 31, 2021 December 31, 2020 March 31, 2020
2020 $ -
 $ -
 $ 1,486
2021 43,348 46,446 -
2022 35,062 35,062 -
2023 18,177
 24,900 -
$ 96,587
 $ 106,408 $ 1,486

(10) Investment Property

Investment Property
Buildings
At January 1, 2021
Cost $ 319,557
Accumulated depreciation ( 6,458)
$ 313,099
2021
January 1 $ 313,099
Depreciation ( 1,548)
March 31 $ 311,551
110年3月31日
Cost $ 319,557
Accumulated depreciation ( 8,006)
$ 311,551
Buildings
At January 1, 2020
Cost $ 44,007
Accumulated depreciation ( 5,320)
$ 38,687
2020
January 1 $ 38,687
Depreciation ( 170)
March 31 $ 38,517
March 31, 2020
Cost $ 44,007
Accumulated depreciation ( 5,490)
$ 38,517
  • A. Rental income from investment property and direct operating expenses arising from investment property are shown below: 
~28~
For the three-month For the three-month For the three-month
periods ended March 31, periods ended March 31,
2021 2020
Rental income from investment
property 7,940
$		 $ 557
Direct operating expenses arising
from the investment property that
generated rental income during the
period 1,567
$		 $ 191
  • B. The fair value of the investment property held by the Group as of March 31, 2021, December 31, 2020 and March 31, 2020 were $312,114, $314,845 and $4,123, respectively. Valuations were made using the income approach which is categorized within Level 3 in the fair value hierarchy. Key assumptions are as follows:
Discount rate
Rental income Yearly (net)
Years		 March 31,2021
December 31, 2020
March 31, 2020
5.27%
5.03%
5.62%
31,778
$ 31,778
$ 2,237
$ 2~20
2~20
2

  • C. There was no amount of borrowing costs capitalized as part of investment property for the three-month period ended March 31, 2021 and 2020.

  • D. There was investment property that was pledged to others as collaterals for March 31, 2021, December 31, 2020 and March 31, 2020. 

~29~

(11) Short-term borrowings

Type of borrowings
Bank borrowings
Credit borrowings
Secured Loan
Type of borrowings
Bank borrowings
Credit borrowings
Secured Loan
Purchase Borrowings
Type of borrowings
Bank borrowings
Credit borrowings
Secured Loan
Purchase Borrowings		 March 31,2021
2,464,720
$ 802,000

3,266,720
$ December 31,2020
1,660,118
$ 571,000
67,600
2,298,718
$ March 31,2020
828,000
$ 20,000
9,512
857,512
$		 range
Collateral
0.90%~2.60%
NA
1.05%~2.25%
Certificates of
deposit, reserve
accounts, stocks of
listed and OTC
companies and
investment
properties.
range
Collateral
0.90%~2.60%
NA
1.05%~2.25%
Certificates of
deposit, reserve
accounts, stocks of
listed and OTC
companies and
investment
properties.
0.89%~1.06%
NA
range
Collateral
1.01%~2.60%
NA
1.17%
Time deposits,
reserves accounts
1.27%~2.00%
NA

Interest expense recognized in profit or loss amounted to $6,436 and $2,764 for the three-month period ended March 31, 2021 and 2020 , respectively. 

~30~

(12) Other Payables

her Payables
March 31,2021 December 31,2020 March 31,2020
Salary and Wages Payable $ 45,226
 $ 42,582
 $ 30,501
Employee Bonus Payable and 128,114 113,311 78,514
Commensation Due to Directors
Balance Payable-Machinery and 148,246 53,809
 34,662
Equipment
Machine Maintenance Payable 35,489 31,851 72,298
Others 240,594 195,427 168,052
$ 597,669
 $ 436,980 $ 384,027

- (13) Long term borrowings

borrowings repayment term range Collateral March 31, 2021 March 31, 2021
Long-term bank borrowing
Bank 2017.09.27~2022.09.27 1.797%~2.64% Guaranteed $ 963,489
borrowings payable at maturity date buildings, machine
secured equipment, other
borrowings equipment and
reserves accounts
Bank 2020.11.09~2023.08.14 1.070% Buildings 850,000
borrowings payable at maturity date
secured
borrowings
1,813,489
Less: Current portion of long-term borrowings ( 144,364)
$ 1,669,125
borrowings repayment term range Collateral December 31,2020
Long-term bank borrowing
Bank 2017.09.27~2022.09.27 1.797%~2.64% Guaranteed $ 882,083
borrowings payable at maturity date buildings, machine
secured equipment, other
borrowings equipment and
reserves accounts
Bank 2020.11.09~2023.08.14 1.070% Buildings 850,000
borrowings payable at maturity date
secured
borrowings
1,732,083
Less: Current portion of long-term borrowings ( 96,211)
$ 1,635,872 
~31~

==> picture [446 x 145] intentionally omitted <==

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

borrowings repayment term range Collateral March 31, 2020
Long-term bank borrowing
Bank 2017.09.27~2022.09.27 1.797%~2.74% Guaranteed $ 810,598
borrowings payable at maturity date buildings, machine
secured equipment, other
borrowings equipment and
reserves accounts
Less: Current portion of long-term borrowings ( 2,026)
$ 808,572
----- End of picture text -----

For the long-term loan contract of the Group from December 20, 2019 to August 8, 2022, the Group had settled the loan in advance in March 2020, due to financial planning considerations.

Note: According to the loan contract requirements of banks, the Group should maintain a specific net debt ratio and interest solvency every six months during the duration of the loan.

(14) 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 insufficient 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 contributions for the deficit by next March.

  • (B) The pension costs under the defined benefit pension plans of the Group were $537 and $551 for the three-month periods ended March 31, 2021 and 2020, respectively.

  • (C) Expected contributions to the defined benefit pension plans of the Group for the year ending December 31, 2022 amount to $2,133.

  • B.(A) Effective July 1, 2005, the Company and its domestic subsidiaries have 

~32~

established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. 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 pension costs under defined contribution pension plans of the Group for the three-month periods ended March 31, 2021 and 2020 were $4,534 and $5,537, respectively.

  • (15) Share capital

  • A. As of March 31, 2021, the Company’s authorized capital was $5,000,000, consisting of 500,000 thousand shares of ordinary stock (including 20,000 thousand shares reserved for employee stock options issued by the Company), and the paid-in capital was $2,527,136 with a par value of $10 (in dollars) per share. All proceeds from shares issued have been collected.

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

are as follows:
Unit: share in thousands
2021 2020
January 1 205,632 198,400
Treasury stocks transfer to employees 10,000 -
Treasury Stock Buyback ( 10,000)
 -
March 31 205,632 198,400

  • B. Treasury shares

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

Shares held by Reason for reacquisition March 31,2021 March 31,2021
Number
of shares
37,081
10,000
47,081		 Book value
Subsidiary-
Youe Chung Capital
Corporation
Taiwan Mask Corporation		 Subsidiary holds shares of
the company
To be reissued to
employees		 527,678
$ 415,140
942,818
$		 
~33~
Shares held by
Reason for reacquisition
Subsidiary-
Youe Chung Capital
Corporation
Subsidiary holds shares of
the company
Taiwan Mask Corporation
To be reissued to
employees
Shares held by
Reason for reacquisition
Subsidiary-
Youe Chung Capital
Subsidiary holds shares of
the company
Taiwan Mask Corporation
employees		 Number
of shares
Book value
37,081

527,678
$ 10,000
306,920
47,081
834,598
$ December 31,2020
Number
of shares
Book value
37,081
527,678
$ 17,232
307,654
54,313
835,332
$
March 31, 2020		 Book value
31,2020
527,678
$ 306,920
834,598
$
Number
of shares
37,081
17,232
54,313

  • (B) In the third quarter of 2017, TMC bought back a total of 20,000 thousand treasury shares, with a book value of $17.85 per share, 2,768 and 17,232 thousand shares were given to employees in the first quarter of 2019 and 2020, respectively. The transfer of related treasury stocks has been completed

  • (C) The transfer of treasury shares transaction-related compensation costs were for the $109,017 and $26,604 for the three-month periods ended March 31, 2021 and 2020, respectively.

  • (D) 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 realized capital surplus.

  • (E) 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.

  • (F) Pursuant to the R.O.C. Securities and Exchange Act, treasury shares should be reissued to the employees within three years from the reacquisition date and shares not reissued within the three-year period are to be retired. Treasury shares to enhance the Company’s credit rating and the stockholders’ equity should be retired within six months of acquisition.

  • (G) Subsidiary-Youe Chung Company holds TMC stocks as treasury shares processing. AS of March 31, 2021, December 31, 2020 and March 31, 2020, Youe Chung Company held 37,081 thousand shares, with an average book value of $14.23 per share. The fair values per share were 

~34~

$71.5, $40.35 and $24.8. The transfer of treasury stock costs is based on the book value of the shares held by Youe Chung Company in each period, based on the indirect shareholding ratio of the Company .

  • (H) The Ccompany was approved by the board of directors on August 5, 2020, to buy back 10,000 thousand shares of the Company in the centralized trading market and transfer them to employees, and the number of shares repurchased accounted for 3.96% of the total issued shares. The buy-back was completed and executed between August 6 and September 30, 2020.

  • (I) The Ccompany was approved by the board of directors on February 3, 2021, to buy back 10,000 thousand shares of the Company in the centralized trading market and transfer them to employees, and the number of shares repurchased accounted for 3.96% of the total issued shares. The buy-back was completed and executed between February 4 and April 3, 2021.

(16) Capital surplus

Pursuant to the R.O.C. Company Act, capital surplus arising from paid -in capital in excess of par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Act requires that the amount of capital surplus to be 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. Detail of capital surplus as below:

January 1, 2021
Changes in shares
of affiliates
recognized under
the equity method
Share-based
payment transaction
March 31, 2021		 Treasury
shares
411,379
$ -
75,627
487,006
$		 Recognition of
changes in
ownership
interest in
subsidiaries
6,097
$ 5,150
-
11,247
$		 Employee
stock
options
-
$ -
33,390
33,390
$		 Changes in
equity of
affiliated
companies
18,540
$ 18,207
-

36,747
$		 Other
3,882
$ -
-
3,882
$		 Total
439,898
$ 23,357
109,017
572,272
$		 
~35~
January 1, 2020
Share-based payment
transaction
Shareholders failed to
receive dividends
March 31, 2020		 Treasury
shares
187,873
$ -
-
187,873
$		 Recognition of
changes in
ownership
interest in
subsidiaries
27,255
$ -
-
27,255
$		 Employee
stock
options
98,152
$ 26,604

-
124,756
$		 Changes in
equity of
affiliated
companies
9,181
$ -

-

9,181
$		 Other
316
$ -
127
443
$		 Total
322,777
$ 26,604
127
349,508
$

  • (17) Retained earnings

  • A. Under the Company’s Articles of Incorporation, the current year’s earnings, if any, shall first be used to pay all taxes and offset prior years ’ operating losses and then 10% of the remaining amount shall be set aside as legal reserve. When such legal reserve amounts to the total authorized capital, the Company shall not be subject to this requirement. The Company may then appropriate or reverse a certain amount as special reserve according to the demand for the business or relevant regulations. After the distribution of earnings, the remaining earnings and prior years’ undistributed earnings may be appropriated according to a resolution of the Board of Directors adopted in the shareholders ’ meeting.

  • B. To well design a long term financial plan and stabilize the operation, the company chose a residual dividend policy to plan the future capital fund needs based on capital investment budget. First to appropriate the retained earnings to get capital funds fulfilled and residual earnings will be paid off as dividends. The steps are:

    • (A) Define an optimized capital budget.

    • (B) Define the fund needs to fulfill one capital budget.

    • (C) Define how much fund shall be fulfilled by retained earnings. (Unfulfilled part shall be fulfilled by fund raising or bond issuing.)

    • (D) To reserve a certain amount of residual earnings, then dividends shall be paid off to shareholders. According to the dividend policy of the company, cash dividend ratio shall not be lower than 20% of total dividends.

  • C. Except for covering accumulated deficit, increasing capital or payment of cash in proportion to ownership percentage, the legal reserve shall not be used for any other purpose. The amount capitalized or the cash payment shall be limited to the portion of legal reserve which exceeds 25% of the paid-in capital.

  • D. In accordance with the regulations, the Company shall set aside special 

~36~

reserve from the debit balance on other equity items at the end of the financial reporting period before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.

  • E. The Company's board of directors resolved on March 15, 2021 to distribute a cash dividend of NT$1.50 per ordinary share from the 2020 surpluses, with a total dividend of $359,570.The proposal is yet to be resolved by the shareholders' meeting.

  • F. The Company's shareholders meeting resolved on June 10, 2020 to distribute a cash dividend of NT$1.07 per ordinary share from the 2019 surpluses, with a total dividend of $252,714.

(18) Other equity items

her equity items
January 1
Foreign currency conversion
difference:
–Group
March 31
January 1
Foreign currency conversion
difference:
–Group
March 31		 2021
Unrealized
evaluation of profit
and loss
2,666)
($ -
2,666)
($ Unrealized
evaluation of profit
and loss
Unrealized
evaluation of profit
and loss
2,666)
($ -
2,666)
($		 
~37~

(19) Operating revenue

erating revenue
For the three-month For the three-month
periods ended March 31, periods ended March 31,
2021 2020
Revenue from contracts with 1,276,063
$		 1,105,867
$
customers
  • A. Disaggregation of revenue from contracts with 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:

For the three-month
periods ended March 31,
2021
Revenue from external
customer contracts
Timing of revenue
At a point in time
Revenue recognized
gradually over time
For the three-month
periods ended March 31,
2020
Revenue from external
customer contracts
Timing of revenue
At a point in time
Revenue recognized
gradually over time		 Mask and
Semiconductor
division
1,274,513
$ 1,170,938
$ 103,575
1,274,513
$		 Medical division
1,550
$ 1,550
$ -
1,550
$		 Total
1,276,063
$
1,172,488
$ 103,575
1,276,063
$
Mask and
Semiconductor
division
1,105,867
$
964,372
$ 141,495
1,105,867
$

  • B. Contract liabilities

  • (A) The Group has recognized the following revenue-related contract liabilities:

liabilities:
Contract asset
Contract liability		 March 31,2021
December 31,2020
77,505
$ 93,809
$ 137,215
$ 99,418
$		 March 31,2020
19,167
$ 91,349
$		 Juanary1,2020
18,121
$
39,856
$

(B) Initial contract liabilities recognized income in the current period: 

~38~
For the three-month For the three-month
periods ended March 31, periods ended March 31,
2021 2020
The revenue recognized from
the beginning balance of
contract liability 12,331
$		 27,519
$
The revenue recognized from
the beginning balance of
contract liability		 periods ended March 31,
2021
12,331
$		 periods ended March 31,
2021
12,331
$		 periods ended March 31,
2020
27,519
$
(20)
(21)
(22)		 Interest income
Other income
Other gains and losses
Interest income
Financial assets at amortised cost
Interest income
Other interest income
Rent income
Others
Gains(Losses) on disposals of
property, plant and equipment
Gains(Loss) on disposal of
investments
Currency exchange gains(loss)
Gains(Loss) on financial assets at
fair value through profit or loss
Other Non-operating loss-
Investment Property Depreciation
Others		 For the three-month
periods ended March 31,
2021
651
$ 30
-
681
$ For the three-month
periods ended March 31,
2021		 For the three-month
periods ended March 31,
2020
1,489
$ 37

1,088

2,614
$ For the three-month
periods ended March 31,
2020
6,252
$ 8,405
14,657
$ For the three-month
periods ended March 31,
2021		 831
$ 410
1,241
$ For the three-month
periods ended March 31,
2020
10
$ -
3,926
317,262
1,548)
(
1,305
320,955
$		 -
$ 73,869
9,928
352,092)
(
170)
(
603)
(
269,068)
($		 
~39~

(23) Finance costs

ce costs
For the three-month For the three-month
periods ended March 31, periods ended March 31,
2021 2020
Interest expense $ 18,625
 $ 5,542
Less: Qualified assets
Amount capitalised -
 ( 235)
$ 18,625 $ 5,307

(24) Expenses by nature

nses by nature
For the three-month For the three-month
periods ended March 31, periods ended March 31,
2021 2020
Employee benefit expenses $ 320,010
 $ 170,795
Depreciation charges on property, 99,539
 106,455
plant and equipment
Amortisation charges on 1,514
 2,525
intangible assets

(25) Employee benefit expense

oyee benefit expense
Wages and salaries
Employee stock options
Labour and health insurance fees
Pension costs
Other personnel expenses		 For the three-month
periods ended March 31,
2021		 For the three-month
periods ended March 31,
2020
190,056
$ 109,017
10,418
5,071
5,448

320,010
$		 119,826
$ 26,604
11,714
6,088
6,563
170,795
$
  • A. According to the Articles of Incorporation of the Company, the current year’s profit shall be used first to cover accumulated deficit, if any, and then the remaining balance shall be distributed as follows: no less than 10% as employees’ compensation, and no more than 2% as directors’ remuneration. 
~40~
  • B. For the three-month period ended March 31, 2021 and 2020 , employees’ compensation were accrued at $39,086 and $0, respectively; directors’ and supervisors’ remuneration were accrued at $$2,490 and $0, respectively. The aforementioned amounts were recognized in salary expenses.

The remuneration for the three-month period ended March 31, 2020 was a loss, so the employees’ compensation and directors’ remuneration were not estimated; for the three-month period ended March 31, 2021, based on the profit situation as of the current period 10.01% and 0.64% estimated, respectively.

The amount of employees’ remuneration and directors’ remuneration for 2020 were $86,000 and $16,000 as resolved by the Board of Directors, respectively. The amount difference of employees’ remuneration recognized in the 2020 financial statements of $85,723 and directors’ compensation of $16,969 were $277 and ($969), mainly due to changes in estimates , adjusted for profit and loss in 2021. Information about employees’ compensation and directors’ remuneration of the Company as resolved by the Board of Directors during its meeting is available at the Market Observation Post System website.

(26) Income tax

A. Income tax expense

Components of income tax expense:

Current tax:
Current tax on profits for the
year
Total current tax
Deferred tax:
Origination and reversal of
temporary differences
Total deferred tax
Income tax expense		 For the three-month
periods ended March 31,
2021		 For the three-month
periods ended March 31,
2020
50,453
$ 50,453
5,902
5,902
56,355
$		 29,480
$ 29,480
5,533
5,533
35,013
$
  • B. The Company’s income tax returns through 2019 have been assessed and approved by the Tax Authority. 
~41~

(27) Earnings per share

ings per share
Basic earnings per share
Profit attributable to the parent
Diluted earnings per share
Profit attributable to ordinary shareholders of
the parent
Assumed conversion of all dilutive potential
ordinary shares
Employees' bonus
the parent plus assumed conversion of all
dilutive potential ordinary shares
Basic earnings per share
Profit attributable to the parent		 Amount after
tax
Weighted average
number of ordinary
shares outstanding
(share in thousands)
Earnings
per
share
(in dollars)
336,218
$ 205,089
1.64
$ 336,218
$ 205,089
-
2,682
336,218
$ 207,771
1.62
$ For the three-monthperiods ended March 31,2020
For the three-monthperiods ended March 31,2021
Amount after
tax		 Weighted average
number of ordinary
shares outstanding
(share in thousands)		 Earnings
per
share
(in dollars)
215,946)
($		 198,400 1.09)
($

The weighted average number of shares outstanding for the three-month period ended March 31, 2021 and 2020 , which has been deducted from the number of shares held by the subsidiary company, Yu Chuan Investment company, which are regarded as treasury shares of the company (the number of shares is calculated according to the shareholding ratio of the company). In addition, for the three-month period ended March 31, 2020 was a loss, so there is no dilution of potential shares, the diluted loss per share is equal to the basic loss per share.

(28) Business combinations

  • A.The Group originally held 16.21% of Innova Vision. On December 15, 2020, Youe Chung Capital Corporation signed a share purchase with other original shareholders of Innova Vision to acquire another 8,795,795 shares, increasing the Group's shareholding to 60.02%. On December 16, 2020, Innova Vision held elections for all directors at its extraordinary general meeting. The Company’s subsidiary Youe Chung Capital won all the director seats, obtaining substantial control of this company. Therefore, it is included in consolidated financial stateme nts 
~42~

as a consolidated entity from that date.

  • (A) The information on the fair value of the acquired assets and assumed liabilities on the acquisition date and the share of non-controlling interests in the acquiree's identifiable net assets for the acquisiti on of Innova Vision is shown as follows:
of Innova Vision is shown as follows:
December 16,2020
Fair value of equity interest in Innova Vision INC. held before the
business combination		 $ 648
Payment to acquire the equity of Innova Vision INC. again 1,759
Non-controlling interests account for the identifiable net assets
share of the acquiree		 ( 58,278)
( 55,871)
Fair value of the identifiable assets acquired and liabilities
assumed
Cash 12,100
Accounts Receivables 21,213
Other Receivables 2,486
Inventories 12,345
Prepayments 1,804
Other Current Assets 1,688
Property, plant and equipment 20,390
Right-of-use Asset 6,060
Intangible assets 268
Other Non-Current Assets 8,805
Contract Liabilities ( 5,235)
Accounts Payable ( 23,183)
Other Payables ( 191,573)
Provisions ( 12,917)
Other Current Liabilities ( 258)
Deferred Income Tax ( 289)
Other Non-Current Liabilities ( 67)
Total identifiable net assets ( 146,363)
Goodwill $ 90,492

(B) The assessment of the fair value of acquired identifiable assets and assumed liabilities is in progress. At present, it is recorded at the initial valuation, and the relevant acquisition price allocation will be completed within one year. 

~43~
  • (C) Since the acquisition of Innova Vision in December 16, 2020, the contribution to operating income and profit before tax have both been $0. Assuming that Innova Vision has been included in the consolidated reports since January 1, 2020, the operating income and profit before tax of the Group are $4,757,757 and $361,021, respectively.

(29) Supplemental cash flow information

A. Investing activities with partial cash payments:

Purchase of property, plant and
equipment
Add: Opening balance of
payable on equipment
Ending balance of advanced on
equipment
Less: Opening balance of
advanced on equipment
Ending balance of payable on
equipment
Cash paid during the year		 For the three-month
periods ended March 31,
2021
For the three-month
periods ended March 31,
2020
345,990
$ 315,004
$ 53,809
103,845

49,310
404,010
5,608)
(
186,606)
(
148,246)
(
34,662)
(
295,255
$ 601,591
$
  • B. The Group’s subsidiary Weida Hi-Tech Company conducted cash capital increase separately on April 10, 2020 and May 15, 2020. The Group did not keep up with the subscription for shareholding, which caused the shareholding to drop to 36.70%. Weida Hi-Tech Company then held an extraordinary general meeting of shareholders on June 2, 2020 to elect new directors. The Company won one seat of director and lost the control of the Weida (Please see Note 4, (3) 2 and Note 1) for the relevant assets and liabilities of the subsidiary: 
~44~
June 2,2020
Carrying amount of assets and liabilities of Weida Hi-Tech
Cash $ 43,089
Accounts Receivables 41,607
Tax Assets 16
Inventories 33,705
Prepayments 10,783
Other Current Assets 1,856
Property, plant and equipment 6,656
Intangible assets 9,817
Refundable deposit 258
Contract Liabilities ( 2,432)
Accounts Payable ( 20,446)
Other Payables ( 11,818)
Other Current Liabilities ( 1,067)
Total net assets $ 112,024

(30) Changes in liabilities from financing activities

January 1, 2021
Changes in
cash flow from
financing
Interest
Expenses
Interest Paid
Other non-cash
changes
March 31, 2021		 Short-term
borrowings
2,298,718
$ 968,002
-
-
-
3,266,720
$		 Long-term
borrowings
1,732,083
$ 81,406

-
-

-
1,813,489
$		 Lease
obligations
506,926
$ 10,589)
(
1,359
1,359)
(
10,440
506,777
$		 Guarantee
Deposits
Received
5,129
$ 1,742
-
-

-
6,871
$		 Total liabilities
from financing
activities
4,542,856
$ 1,040,561
1,359
1,359)
(
10,440
5,593,857
$		 
~45~
January 1, 2020
Changes in
cash flow from
financing
Interest
Expenses
Interest Paid
Other non-cash
changes
March 31, 2020		 Short-term
borrowings
804,938
$ 52,574

-

-

-
857,512
$		 Long-term
borrowings
451,616
$ 358,982
-
-
-
810,598
$		 Lease
obligations
431,391
$ 15,118)
(
946
946)
(
34

416,307
$		 Guarantee
Deposits
Received
Total liabilities
from financing
activities
1,544
$ 1,689,489
$ -

396,438
-

946

-
946)
(
-
34
1,544
$ 2,085,961
$

7 、 RELATED PARTY TRANSACTIONS

(1) Names of related parties and relationship

Names of related parties Relationship with the Group Innova Vision INC. The Company is a director of the company(Note 1) Advanced Silicon SA The chairman of the Company's subsidiary is a director of the company (Note 2) Maxchip Electronics Corporation The Company's director is a director of the company Image Match Design Inc., The Company's subsidiary is a director of the company Weida Hi-Tech The Company is a director of that company Xsense Technology Corporation The Company's chairman is the director of the company

  • Note1 ： On June 18, 2020, the Company resigned as a legal entity director of Innova Vision, and is no longer a related party of that company.

On December 16, 2020, Innova Vision held elections for all directors at its extraordinary general meeting. The Company’s subsidiary Youe Chung Capital Corporation won all the director seats, obtaining substantial control of this company. Therefore, it has been included as a consolidated entity from that date.

  • Note2 ： The Company's shareholding of Weida Hi-Tech has dropped to 36.70% in May 2020, and there are changes to the number of board seats, thus losing control of the company. Since then, Weida Hi-Tech is no longer a subsidiary of the Company, but is still the Group's related party. 
~46~

(2) Significant related party transactions

A. Operating revenue:

Operating revenue:
For the three-month For the three-month
periods ended March 31, periods ended March 31,
2021 2020
Sales of goods:
Other Related Parties $ 3,809
 $ 7,012
Goods are sold based on the price lists in force and terms that would be
available to third parties.
  • B. Receivables from related parties:
Payables to related parties:
Trade receivables:
Other Related Parties
Other receivables:
Innova Vision INC.
Xsense Technology
Corporation
Total
Accounts payable:
Other Related Parties		 March 31,2021
4,048
$ -
752
752
4,800
$ March 31, 2021
-
$		 December 31,2020
6,599
$ -
3,068
3,068
9,667
$ December 31, 2020

-
$ $		 December 31,2020
6,599
$ -
3,068
3,068
9,667
$ December 31, 2020

-
$ $		 March 31, 2020
4,155
$ 24,259
-
24,259
28,414
$ March 31,2020
1,358
December 31, 2020

-
$
$

  • C. Payables to related parties:

  • 「 －

  • D. Loans to /from related parties: ( Other Receivables Related Parties 」 ) Loans to related parties

  • (A) Outstanding balance

Outstanding balance
Interest income
Innova Vision INC.
Innova Vision INC.		 March 31,2021
December
-
$ $ For the three-month
periods ended March 31,
2021
-
$		 31, 2020
March 31,2020
-
150,000
$ For the three-month
periods ended March 31,
2020
-
$		 1,081
$
  • (B) Interest income

The loans to associates are reimbursement within 1 year and carry interest at 2.0%~2.616% per annum for the three-month period ended March 31, 2020 , respectively. 

~47~

(3) Key management compensation

For the three-month For the three-month For the three-month For the three-month
periods ended March 31, periods ended March 31,
2021 2020
Salaries and short-term employee
benefits $ 8,370
 $ 6,946
Post-employment benefits 79
 3,087
Other long-term employee benefits 9,419 -
Total $ 17,868 $ 10,033
PLEDGED ASSETS
The Group’s assets pledged as collateral are as follows:
Book value
Asset item March 31,2021 December 31, 2020 March 31,2020 Purpose
Cash in Banks(Financial assets at $ 15,337
 $ 11,111
 $ 11,111
 Long (Short)-
amortised cost-Non current) term loan and
reserves
accounts
Time deposits(Financial assets at 41,736 41,236 54,254 Short-term loans,
amortised cost) outbound goods
guarantees and
lease guarantees
Stocks of publicly traded and OTC 2,070,528 1,249,775 -
companies (recognized as
"Financial assets at fair value		 Short-term loan
through profit or loss")
Treasury stocks 246,639 - -
 Short-term loan
Buildings and structures (including 948,238 953,601 196,765 Long-term loan
Machinery and equipment and 1,282,187 1,146,700 590,961 Long (Short)-
equipment under acceptance term loan
Real estate investment 311,551 313,099 -
 Other Long-term
loan
Other equipment 1,072 1,615 3,554 Long (Short)-
term loan
$ 4,917,288 $ 3,717,137 $ 856,645

8 、 PLEDGED ASSETS

Note ： The cost of pledged treasury stock were $246,639, carrying value were $1,239,238 for the three-month period ended March 31, 2021 , respectively.

9 、 SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT

COMMITMENTS

(1) Contingencies

None.

(2) Commitment

  • A. Signed but not yet paid equipment maintenance contracts 
~48~

March 31, 2021 December 31, 2020 March 31, 2020 Machine maintenance $ 35,489 $ 31,851 $ 72,298 B. Capital expenditures have been contracted but have not yet occurred March 31, 2020 December 31, 2019 March 31, 2019 Properties, Plants and Equipment $ 87,463 $ 153,985 $ 47,267

  • C. Lease transactions

Please refer to Note6 (8) and (9).

10 、 SIGNIFICANT DISASTER LOSS

None.

11 、 SIGNIFICANT EVENTS AFTER THE END OF THE FINANCIAL REPORTING PERIOD

None.

12 、 OTHERS

(1) Capital management

No major changes in the period, please see Note 12 in 2020 consolidated financial statements.

  • (2) Financial instruments

  • A. Financial instruments by category 

~49~

March 31, 2020

March 31, 2021

December 31, 2020

March 31,2021 December 31,2020 March 31,2020
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 Amortized Cost
Cash and cash equivalents
Financial assets at amortised cost
Notes receivable
Accounts receivable
Other receivables
Guarantee deposits paid
Financial liabilities
Financial liabilities at amortised cost
Short-term borrowings
Notes payable
Accounts payable
Other accounts payable
Long-term borrowings (including
current portion)
Guarantee deposits received
Lease obligations		 2,655,533
$ 1,880,081
$ 79,759
159
897,602
16,607
15,885
2,890,093
$ 3,266,720
$ 66
364,722
597,669
1,813,489
6,871
6,049,537
$ 506,777
$		 2,135,413
$ 1,036,658
$ 75,134
879
901,342
50,736
12,792
2,077,541
$ 2,298,718
$ 66
397,237
436,980

1,732,083
5,129
4,870,213
$ 506,926
$		 509,136
$
1,169,006
$ 82,432
60

809,774
189,230
9,490

2,259,992
$
857,512
$ 65
394,228
385,385
810,598
1,544
2,449,332
$
416,307
$
  • B. Financial risk management policies

No major changes in the period, please see Note 12 in 2020 consolidated financial statements.

  • C. Significant financial risks and degrees of financial risks

  • (A) Market risks

a. Foreign exchange risk

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, JPY and CNY). The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows: 

~50~

==> picture [391 x 88] intentionally omitted <==

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

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

USD:NTD
USD
28,857

28.535
RMB:NTD
CNY
122,585
4.344

JPY:NTD
JPY
131,271
0.258
Financial liabilities
Monetary items
USD:NTD
USD
5,733
28.535
RMB:NTD
CNY
31,625
4.344

JPY:NTD
JPY
276,601
0.258
(Foreign currency:
functional
currency)
Exchange rate
Financial assets
Monetary items
USD:NTD
USD
27,563
28.480
RMB:NTD
CNY
108,362
4.377
JPY:NTD
JPY
83,532
0.276
Financial liabilities
Monetary items
USD:NTD
USD
5,266
28.480
RMB:NTD
CNY
34,457
4.377
JPY:NTD
JPY
273,112
0.276
Foreign currency
amount
(In thousands)		 823,447
$ 532,509

33,829
163,587
137,380
71,280

Book value
(NTD)
784,994
$ 474,300
23,055
149,976
150,818
75,379		 
~51~

March 31, 2020

The total exchange gain (loss), 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, 2021 and 2020, amounted to $3,926 and $9,928.
Analysis of foreign currency risk arising from significant foreign
exchange variation:
(Foreign currency:
functional
currency)
Exchange rate
Book value
(NTD)
Financial assets
Monetary items
USD:NTD
USD
29,342
30.225
886,876
$ RMB:NTD
CNY
83,018
4.255
353,242
JPY:NTD
JPY
59,666
0.2788
16,635
Financial liabilities
Monetary items
USD:NTD
USD
8,360
30.225
252,692
RMB:NTD
CNY
32,218
4.255
137,088
JPY:NTD
JPY
218,791
0.2788
60,999
Foreign currency
amount
(In thousands)
(Foreign currency:
functional currency)
Degree of
variation
Effect on profit
or loss
Effect on other
comprehensive income
Financial assets
Monetary items
USD:NTD
1%
8,234
$ -
$ RMB:NTD
1%
5,325
-
JPY:NTD
1%
338
-
Financial liabilities
Monetary items
USD:NTD
1%
1,636)
(
-
RMB:NTD
1%
1,374)
(
-
JPY:NTD
1%
713)
(
-
For the three-monthperiods ended March 31,2021
SensitivityAnalysis		 The total exchange gain (loss), 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, 2021 and 2020, amounted to $3,926 and $9,928.
Analysis of foreign currency risk arising from significant foreign
exchange variation:
(Foreign currency:
functional
currency)
Exchange rate
Book value
(NTD)
Financial assets
Monetary items
USD:NTD
USD
29,342
30.225
886,876
$ RMB:NTD
CNY
83,018
4.255
353,242
JPY:NTD
JPY
59,666
0.2788
16,635
Financial liabilities
Monetary items
USD:NTD
USD
8,360
30.225
252,692
RMB:NTD
CNY
32,218
4.255
137,088
JPY:NTD
JPY
218,791
0.2788
60,999
Foreign currency
amount
(In thousands)
(Foreign currency:
functional currency)
Degree of
variation
Effect on profit
or loss
Effect on other
comprehensive income
Financial assets
Monetary items
USD:NTD
1%
8,234
$ -
$ RMB:NTD
1%
5,325
-
JPY:NTD
1%
338
-
Financial liabilities
Monetary items
USD:NTD
1%
1,636)
(
-
RMB:NTD
1%
1,374)
(
-
JPY:NTD
1%
713)
(
-
For the three-monthperiods ended March 31,2021
SensitivityAnalysis		 The total exchange gain (loss), 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, 2021 and 2020, amounted to $3,926 and $9,928.
Analysis of foreign currency risk arising from significant foreign
exchange variation:
(Foreign currency:
functional
currency)
Exchange rate
Book value
(NTD)
Financial assets
Monetary items
USD:NTD
USD
29,342
30.225
886,876
$ RMB:NTD
CNY
83,018
4.255
353,242
JPY:NTD
JPY
59,666
0.2788
16,635
Financial liabilities
Monetary items
USD:NTD
USD
8,360
30.225
252,692
RMB:NTD
CNY
32,218
4.255
137,088
JPY:NTD
JPY
218,791
0.2788
60,999
Foreign currency
amount
(In thousands)
(Foreign currency:
functional currency)
Degree of
variation
Effect on profit
or loss
Effect on other
comprehensive income
Financial assets
Monetary items
USD:NTD
1%
8,234
$ -
$ RMB:NTD
1%
5,325
-
JPY:NTD
1%
338
-
Financial liabilities
Monetary items
USD:NTD
1%
1,636)
(
-
RMB:NTD
1%
1,374)
(
-
JPY:NTD
1%
713)
(
-
For the three-monthperiods ended March 31,2021
SensitivityAnalysis		 The total exchange gain (loss), 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, 2021 and 2020, amounted to $3,926 and $9,928.
Analysis of foreign currency risk arising from significant foreign
exchange variation:
(Foreign currency:
functional
currency)
Exchange rate
Book value
(NTD)
Financial assets
Monetary items
USD:NTD
USD
29,342
30.225
886,876
$ RMB:NTD
CNY
83,018
4.255
353,242
JPY:NTD
JPY
59,666
0.2788
16,635
Financial liabilities
Monetary items
USD:NTD
USD
8,360
30.225
252,692
RMB:NTD
CNY
32,218
4.255
137,088
JPY:NTD
JPY
218,791
0.2788
60,999
Foreign currency
amount
(In thousands)
(Foreign currency:
functional currency)
Degree of
variation
Effect on profit
or loss
Effect on other
comprehensive income
Financial assets
Monetary items
USD:NTD
1%
8,234
$ -
$ RMB:NTD
1%
5,325
-
JPY:NTD
1%
338
-
Financial liabilities
Monetary items
USD:NTD
1%
1,636)
(
-
RMB:NTD
1%
1,374)
(
-
JPY:NTD
1%
713)
(
-
For the three-monthperiods ended March 31,2021
SensitivityAnalysis		 The total exchange gain (loss), 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, 2021 and 2020, amounted to $3,926 and $9,928.
Analysis of foreign currency risk arising from significant foreign
exchange variation:
(Foreign currency:
functional
currency)
Exchange rate
Book value
(NTD)
Financial assets
Monetary items
USD:NTD
USD
29,342
30.225
886,876
$ RMB:NTD
CNY
83,018
4.255
353,242
JPY:NTD
JPY
59,666
0.2788
16,635
Financial liabilities
Monetary items
USD:NTD
USD
8,360
30.225
252,692
RMB:NTD
CNY
32,218
4.255
137,088
JPY:NTD
JPY
218,791
0.2788
60,999
Foreign currency
amount
(In thousands)
(Foreign currency:
functional currency)
Degree of
variation
Effect on profit
or loss
Effect on other
comprehensive income
Financial assets
Monetary items
USD:NTD
1%
8,234
$ -
$ RMB:NTD
1%
5,325
-
JPY:NTD
1%
338
-
Financial liabilities
Monetary items
USD:NTD
1%
1,636)
(
-
RMB:NTD
1%
1,374)
(
-
JPY:NTD
1%
713)
(
-
For the three-monthperiods ended March 31,2021
SensitivityAnalysis		 Book value
(NTD)
Degree of
variation		 Effect on profit
or loss
1%
1%
1%
1%
1%
1%		 8,234
$ 5,325
338
1,636)
(
1,374)
(
713)
(		 -
$ -
-
-
-
-

  • b. The total exchange gain (loss), 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, 2021 and 2020, amounted to $3,926 and $9,928.

  • c. Analysis of foreign currency risk arising from significant foreign exchange variation: 

~52~

For the three-month periods ended March 31, 2020

For the thre e-m onthperiods ended onthperiods ended March 31,2020
SensitivityAnalysis
(Foreign currency: Degree of Effect on profit Effect on other
functional currency) variation or loss comprehensive income
Financial assets
Monetary items
USD:NTD 1% $ 8,869
 $ -
RMB:NTD 1% 3,532 -
JPY:NTD 1% 166 -
Financial liabilities
Monetary items
USD:NTD 1% ( 2,527)
 -
RMB:NTD 1% ( 1,371)
 -
JPY:NTD 1% ( 610)
 -

Price risk

  • a. The Group’s equity securities, which are exposed to price risk, are the held financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income.

  • b. The Group mainly invests in equity instruments comprised of shares and open-end funds. The value of equity instruments are susceptible to market price risk arising from uncertainties about future performance of equity markets. Assuming a hypothetical increa se of 1% in the price of the aforementioned financial assets at fair value through profit or loss while the other conditions remain unchanged could increase/decrease the Group’s net income after tax for the three-month period ended March 31, 2021 and 2020 by $26,555 and $5,091, 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 $0 and $0, 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

  • a. The Group’s main interest rate risk arises from long (short)-term borrowings with variable rates, which expose the Group to cash flow interest rate risk. For the three-month period ended March 31, 2021 and 2020 , the Group’s borrowings at variable rate were mainly denominated in New Taiwan dollars and US Dollars.

  • b. The Group’s borrowings are measured at amortized cost. T he borrowings are periodically contractually reprised and to that extent are also exposed to the risk of future changes in market interest 

~53~

rates.

  • c. If the long (short)-term borrowing short term interest rate had increased/decreased by 0.25% with all other variables held constant, profit, net of tax for the three-month period ended March 31, 2021 and 2020 would have decreased / increased by $2,540 and $834, respectively. The main factor is that changes in interest expense result in floating-rate borrowings.

  • (A) Credit risk

  • a. 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, at fair value through profit or loss and at fair value through other comprehensive income.

  • b. 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.

  • c. When the individual contract payment is not paid according to the expected transaction terms,the default has occurred.

  • d. The Group adopts following assumptions under IFRS 9 to assess whether there has been significant increase in credit risk on that instrument since initial recognition:

    • (a) If the contract payments were past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.

    • (b) For investments in bonds that are traded over the counter, if any external credit rating agency rates these bonds as investment grade, the credit risk of these financial assets is low.

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

    • (a) It becomes probable that the issuer will enter bankruptcy or other financial reorganization due to their financial difficulties;

    • (b) The disappearance of an active market for that financial asset because of financial difficulties;

    • (c) Adverse changes in national or regional economic conditions that 

~54~

are expected to cause;

  • (d) Adverse changes in national or regional economic conditions that are expected to cause a default.

  • f. The Group classifies customer’s accounts receivable in accordance with credit risk on trade. The Group applies the modified approach using provision matrix to estimate expected credit loss under the provision matrix basis.

  • g. The Group wrote-off the financial assets, which cannot be reasonably expected to be recovered, after initiating recourse procedures. However, the Group will continue executing the recourse procedures to secure their rights.

  • h. The Group used the forecast ability to adjust historical and timely information to assess the default possibility of accounts receivable. As of March 31, 2021, December 31, 2020 and March 31, 2020 , the provision matrix is as follows:

Notpast due Notpast due Upto 30 days Upto 30 days 31 to 90 days 31 to 90 days 91 to 180 days 91 to 180 days Over 180 days Over 180 days Total
March 31, 2021
Expected loss rat 0.01~1% 0.01~1.95% 1.37~7.13% 3.88~22.57% 44.08~100%
Total book value $ 806,733
 $ 67,588
 $ 22,864
 $ 5,642
 $ 6,262
 $ 909,089
Loss allowance - ( 1)
 ( 2,649)
 ( 2,770)
 ( 6,067)
 ( 11,487)
Not past due Upto 30 days 31 to 90 days 91 to 180 days Over 180 days Total
December 31, 2020
Expected loss rat 0.01~1% 0.01~1.95% 1.36~7.49% 3.62~23.67% 41.84~100%
Total book value $ 723,020
 $ 149,442
 $ 32,507
 $ 2,169
 $ 5,603
 $ 912,741
Loss allowance - ( 2,191)
 ( 2,725)
 ( 957)
 ( 5,526)
 ( 11,399)
March 31, 2020
Expected loss rat 0.01~1% 0.01~3.52% 0.01~20.75% 0.01~30.16% 1.24~100%
Total book value $ 701,601
 $ 75,085
 $ 35,072
 $ 4,979
 $ 238
 $ 816,975
Loss allowance - ( 1)
 ( 3,040)
 ( 4,086)
 ( 74)
 ( 7,201)
  • i. Movements in relation to the Group applying the modified approach to provide loss allowance for accounts receivable are as follows:
2021
Accounts receivable
January 1 $ 11,399
Provision for impairment 90
Foreign currency conversion difference ( 2)
March 31 $ 11,487 
~55~
2020
Accounts receivable
January 1 $ 7,759
Reversal of impairment loss ( 519)
Foreign currency conversion difference ( 39)
March 31 $ 7,201

  • (A) Liquidity risks

  • a. Cash flow forecasting is performed in the operating entities of the Group and aggregated by the Group financial department. The Group financial department monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs.

  • b. The surplus cash generated by each operating entities of the Group will be gathered back to the Group financial department. The Group financial department then invests surplus cash in demand deposits, time deposits, financial assets at fair value through profit or loss, financial assets at amortized cost and debt investments in no active market (time deposits with 3-12 months period), choosing instruments with appropriate maturities or sufficient liquidity to provide sufficient headroom as determined by the abovementioned forecasts. As of March 31, 2021, December 31, 2020 and March 31, 2020, the Group held financial assets at monetary market of $1,917,961, $1,071,061 and $1,213,973, respectively. Those are expected to readily generate cash inflows for managing liquidity risk.

  • c. The Group has the following undrawn borrowing facilities:

March 31, 2021
December 31,2020
Floating rate
Less than 1 year
698,000
$ 513,400
$ Over 1 year
220,573
363,851
918,573
$ 877,251
$		 March 31,2020
735,360
$ 377,573
1,112,933
$
  • d. 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 maturit y date for no derivative financial liabilities and to the expected maturity date for derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.

Non-derivative financial liabilities 

~56~
Less than 1
year
March 31, 2021
Non-derivative financial liabilities
Short-term borrowings
3,266,720
$ Notes payable
66
Accounts payable
364,722
Other payables
597,669
Lease liability
233,494
Long-term borrowings
91,978
Guarantee Deposits Received
-
Less than 1
year
December 31, 2020
Non-derivative financial liabilities
Short-term borrowings
2,298,718
$ Notes payable
66
Accounts payable
397,237
Other payables
436,980
Lease liability
247,430
Long-term borrowings
100,647
Guarantee Deposits Received
-
Less than 1
year
March 31, 2020
Non-derivative financial liabilities
Short-term borrowings
857,512
$ Notes payable
65
Accounts payable
394,228
Other payables
385,385

Lease liability
33,451
Long-term borrowings
16,576
Guarantee Deposits Received
-		 Between 1 and
2years		 Between 2
and 5years
Over 5years
-
$ -

-
-
68,550
-
-
Over 5years
-
$ -
-
-
-

-

-
Over 5years
-
$ -
-

-
110,050
1,785,353
6,871
Between 1 and
2years		 -
$ -
-
-

173,560
-

-
Between 2
and 5years
-
$ -
-
-
235,857
-
-
Between 2
and 5years
-
$ -
-
-
93,403
690,612
-		 -
$ -
-
-
305,625
-
-

(3) Fair value information

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

Level 1 ： Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a 

~57~

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

  • Level 2 ： Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

  • Level 3 ： Unobservable inputs for the asset or liability, including financial assets available for sale in the Group.

  • B. Financial instruments not measured at fair value

The carrying amounts of cash and cash equivalents, notes and trade receivables, other receivables, short-term borrowings, notes and trade payables, and other payables are reasonably approximate to the fair values.

  • C. The related information on 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:
March 31, 2021
Assets
Recurring fair value
measurements
Financial assets at fair value
through profit or loss
Equity securities
Beneficiary certificate
Total
December 31, 2020
Assets
Recurring fair value
measurements
Financial assets at fair value
through profit or loss
Equity securities
Beneficiary certificate
Total		 Level 1
2,623,325
$ 500
2,623,825
$ Level 1
2,103,205
$ 500
2,103,705
$		 Level 2
-
$ -
-
$ Level 2
-
$ -
-
$		 Level 3
31,708
$ -
31,708
$ Level 3
31,708
$ -
31,708
$		 Total
2,655,033
$ 500
2,655,533
$ Total
2,134,913
$ 500
2,135,413
$		 Total
2,655,033
$ 500
2,655,533
$ Total
2,134,913
$ 500
2,135,413
$
2,134,913
$ 500
2,135,413
$		 
~58~

==> picture [425 x 145] intentionally omitted <==

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

March 31, 2020 Level 1 Level 2 Level 3 Total
Assets
Recurring fair value
measurements
Financial assets at fair value
through profit or loss
-
Equity securities $ 385,890 $ $ 122,746 $ 508,636
Beneficiary certificate 500 - - 500
Total $ 386,390 $ - $ 122,746 $ 509,136
----- End of picture text -----

  • 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 and OTC stocks Open-end fund

Market quoted

price

Closing price Net asset value

  • (B) Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques or by reference to counterparty quotes. The fair value of financial instruments measured by using valuation techniques 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 financial reporting date.

  • (C) 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. 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 sheets. The pricing and inputs information used during valuation are carefully assessed and adjusted based on current market conditions.

  • (D) The Group adjusted credit risks assessment into fair value calculation of financial and non-financial instruments to reflect the credit risk of counterparty and quality of the Group.

  • E. For the three-month period ended March 31, 2021 and 2020, there was no transfer between Level 1 and Level 2. 

~59~
  • F. The following chart is the movement of Level 3 for the three-month period ended March 31, 2021 and 2020 :
ended March 31, 2021 and 2020:
Equitysecurities
2021/01/01,2021/03/31 $ 31,708
Equity securities
January 1, 2020 $ 92,803
Acquired in the period 29,943
March 31, 2020 $ 122,746
  • G. The following is the qualitative information of significant unobservable inputs and sensitivity analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair value measurement:

March 31, 2021

March 31, 2021
Fair value
Unlisted shares
$ 31,708
Nonderivative equity instrument:
December 31,2020
Fair value
Unlisted shares
$ 31,708
Nonderivative equity instrument:
March 31, 2020
Fair value
Unlisted shares
$ 57,746
Unlisted shares
65,000
Nonderivative equity instrument:		 Fair value Valuation
technique		 Significant
unobservable
input		 Range
(weighted
average)		 Relationship of inputs
to fair value
Net asset
value
Valuation
technique		 Net asset value
Significant
unobservable
input		 -
Range
(weighted
average)
-
Range
(weighted
average)		 The higher the net asset
value, the higher the
fair value
Relationship of inputs
to fair value
Net asset
value
Valuation
technique		 Net asset value
Significant
unobservable
input		 The higher the net asset
value, the higher the
fair value
Relationship of inputs
to fair value
Net asset
value
Discounted
cash flow		 Net asset value
Long-term
revenue growth
rate		 -
2.5%		 The higher the net asset
value, the higher the
fair value
the higher the long-
term revenue growth
rate, the higher the fair
value;
  • H. 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 a different outcome. For financial assets and liabilities classified as Level 3, if the factors of assessment changed, then the 
~60~

impact to income or other comprehensive income is:

March 31, 2021

Input
Financial assets
Equity
instrument
Net asset value
Equity
instrument
Long-term
revenue growth
rate
Input
Financial assets
Equity
instrument
Net asset value
Equity
instrument
Long-term
revenue growth
rate		 Change Favourable
change
Unfavourable
change
317
$ 317)
($ -
-

317
$ 317)
($ Recognised in profit or
loss
December		 Favourable
change
Unfavourable
change
-
$ -
$
-
-
-
$ -
$ Recognised in other
comprehensive income
Favourable
change
Unfavourable
change
-
$ -
$ -
-
-
$ -
$ 31,2020
Recognised in other
comprehensive income		 Favourable
change
Unfavourable
change
-
$ -
$
-
-
-
$ -
$ Recognised in other
comprehensive income
Favourable
change
Unfavourable
change
-
$ -
$ -
-
-
$ -
$ 31,2020
Recognised in other
comprehensive income
± 1%
± 1%
Change
Favourable
change
Unfavourable
change
317
$ 317)
($ -
-
317
$ 317)
($ Recognised in profit or
loss
Favourable
change
± 1%
± 1%		 317
$ -
317
$		 -
$ -
-
$		 
~61~
Input
Financial assets
Equity
instrument Net asset value
Equity
instrument
Long-term
revenue growth
rate		 Input Change
± 1%
± 1%		 Favourable
change
Unfavourable
change
Favourable
change
Unfavourable
change
577
$ 577)
($ -
$ -
$ 468
481)
(
-
-
1,045
$ 1,058)
($ -
$ -
$ March 31,2020
Recognised in profit or
loss
Recognised in other
comprehensive income		 Favourable
change
Unfavourable
change
Favourable
change
Unfavourable
change
577
$ 577)
($ -
$ -
$ 468
481)
(
-
-
1,045
$ 1,058)
($ -
$ -
$ March 31,2020
Recognised in profit or
loss
Recognised in other
comprehensive income
-
$ -
-
$

(4) Other

The Company has measured the group operation and financial imformation for COVID-19. There is no significant impact to the Group’s continue operation, asset impairment and financing risk based on the Group’s assessment.

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 NT$300 million or 20% of the Company’s paid-in capital:None.

  • E. Acquisition of individual real estate properties at costs of at least NT$300 million or 20% of the paid-in capital: None.

  • F. Disposal of individual real estate properties at prices of at least NT$300 million or 20% of the paid-in capital: None.

  • G. Total purchases from or sales to related parties of at least $100 million or 20% of the paid-in capital: None.

  • H. Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital: None.

  • I. Information about the derivative financial instruments transaction: None.

  • J. Significant inter-company transactions during the reporting periods: Please refer to table 4. 

~62~

(2) Information on investees

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

(3) Information on investments in Mainland China

  1. Information on investment in mainland China: Please refer to table 6.

  2. Significant transactions, either directly or indirectly through a third area, with investee companies in China: None.

(4) Major shareholders information

Major shareholders information: Please refer to table 7.

14 、 SEGMENT INFORMATION

(1) General information

Management has determined the reportable operating segments based on the reports reviewed by the president operating decision maker that are used to make strategic decisions.

The basis of the Group's corporate composition, divisional basis and departmental information has not changed significantly during the period.

(2) Segment information

The segment information provided to the chief operating decision -maker for the reportable segments is as follows:

For the nine-month period ended September 30, 2021 ：

Revenue from external
customers
Inter-segment revenue
Total segment revenue
Segment income (loss) including:
Depreciation
Amortisation
Financial cost
Interest income
Recognised investment profit or
loss which is adopting equity
method
Segment assets		 Mask and
Semiconductor division
1,274,513
$ 30,451)
($ 367,154
$ 98,178)
($ 1,473)
($ 18,355)
($ 666
$ 50,867)
($ 10,366,097
$

For the nine-month period ended September 30, 2020 ： 

~63~
Mask and
Semiconductor division

Revenue from external
customers
1,105,867
$
Inter-segment revenue
55,585
$
Total segment revenue
227,769)
($
Segment income (loss) including:
Depreciation
106,455)
($
Amortisation
2,525)
($ Financial cost
5,307)
($
Interest income
2,614
$
Recognised investment profit or
loss which is adopting equity
method
6,334)
($ Segment assets
5,962,649
$		 Medical division
Total
-
$
1,105,867
$ -
$
55,585
$ -
$
227,769)
($ -
$
106,455)
($ -
$ 2,525)
($
-
$ 5,307)
($
-
$ 2,614
$ -
$ 6,334)
($ -
$ 5,962,649
$

(3) Reconciliation for segment income (loss)

Inter-department sales are conducted on a fair-trade basis. External income reported to the chief operating decision is measured in a consistent manner with income in the income statement.

The consolidated profit and loss, assets and liabilities of the relevant departments are consistent with the consolidated profit and loss, consolidated assets and consolidated liabilities, so there is no adjustment information. 

~64~

TAIWAN MASK CORPORATION AND SUBSIDIARIES

FINANCINGS PROVIDED

FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2021

Table 1

(Amounts in thousands of new Taiwan dollars and foreign currencies,Unless Specified Otherwise)

No. Financing
Company		 Counterparty Financial Statement
Account		 Related
Party		 Maximum
Balance for the
Period		 EndingBalance Amount
ActuallyDrawn		 Interest
Rate
(%)		 Nature for
Financing		 Transaction
Amounts		 Reason for
Financing		 Ending
Balance
allowance		 Colla teral Financing
Limits for Each
Borrowing		 Financing
Company’s
Total Financing		 Note
Item Value
0
0
0
0
1
2
3
3
3
4		 TAIWAN MASK
CORPORATION
TAIWAN MASK
CORPORATION
TAIWAN MASK
CORPORATION
TAIWAN MASK
CORPORATION
Adl Engineering
INC.
Miracle
Technology CO.,
LTD.
Innova Vision INC.
Innova Vision INC.
Innova Vision INC.
Youe Chung
Capital
Corporation		 Youe Chung Capital
Corporation
Miracle Technology CO.,
LTD.
Aptos Technology INC.
Innova Vision INC.
Aptos Technology INC.
Aptos Technology INC.
Innova Technology
Company
Innova Vision Kabushiki
Kaisha
Innova Vision Kabushiki
Kaisha
Aptos Technology INC.		 Other Accounts
Receivables－Related
Parties
Other Accounts
Receivables－Related
Parties
Other Accounts
Receivables－Related
Parties
Other Accounts
Receivables－Related
Parties
Other Accounts
Receivables－Related
Parties
Other Accounts
Receivables－Related
Parties
Other Accounts
Receivables－Related
Parties
Other Accounts
Receivables－Related
Parties
Other Accounts
Receivables－Related
Parties
Other Accounts
Receivables－Related
Parties		 Y
Y
Y
Y
Y
Y
Y
Y
Y
Y		 300,000
$ 100,000
140,000
180,000
30,000
120,000
10,507
7,817
-
300,000		 -
$ -
-
-
-
120,000
10,507
7,817
-
280,000		 -
$ -
-
-
-
120,000
24,581
15,274
51,698
280,000		 2%
2%
2%
2%
2%
2%
NA
NA
NA
2%		 The need for
short-term
financing
The need for
short-term
financing
The need for
short-term
financing
The need for
short-term
financing
The need for
short-term
financing
The need for
short-term
financing
Transactions
Transactions
The need for
short-term
financing
The need for
short-term
financing		 -
$ -
-
-
-
-
7,691
12,861
-
-		 Ccapital
turnover
Ccapital
turnover
Ccapital
turnover
Ccapital
turnover
Ccapital
turnover
Ccapital
turnover
-
-
Need for
operation
Need for
operation		 -
$ -
-
-
-
-
-
-
-
-		 -
-
-
-
-
-
-
-
-
-		 -
$ -
-
-
-
-
-
-
-
-		 1,558,995
$ 1,558,995
1,558,995
1,558,995
28,831
139,583
97,031
97,031
97,031
1,610,619		 1,558,995
$ 1,558,995
1,558,995
1,558,995
28,831
139,583
97,031
97,031
97,031
1,610,619		 2
2
2
2
3
4
5
5
5
6		 
~65~

TAIWAN MASK CORPORATION AND SUBSIDIARIES

FINANCINGS PROVIDED

FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2021

Note 1: The explanation of the Code column is as follows:

  • (1) Issuer fills in 0.

  • (2). The investee company is numbered in sequence starting from Arabic numeral 1 according to company type.

Note 2: Amendment to the Procedures for Lending Funds to Others:

  • (1) Total amount of loans:The total amount of the Company's loans shall not exceed 40% of the Company's net value.

  • (2) For companies or businesses that have business dealings with the Company, the loan amount of each individual borrowers shall not exceed the amount of transactions between the two parties in the most recent year and not exceed 40% of the Company net value.

  • (3) For companies or businesses that have a short-term financing need, the loan amount of each individual borrowers shall not exceed the amount of transactions between the two parties in the most recent year and not exceed 40% of the Company net value.

  • (4) Inter-company loans of funds between overseas companies in which the Company owns, directly or indirectly, 100% of the voting shares, are not restricted by the abovementioned paragraphs. However, the total amount of loans and the amount of loan to a single party shall not exceed 50% of the Company's net value.

Note 3: Subsidiary - Adl Engineering Inc. Procedures for Lending Funds to Others

  • (1) The total loan amount shall not exceed 50% of the Company’s net value. However, for companies or businesses that have a short-term financing need, the loan amount of each individual borrower shall not exceed 40% of the Company net value.

(2) In addition to the provisions in (1), the loan amount of each individual borrower of companies or businesses that have business dealings with the Company shall not exceed the amount of transactions between the two parties. The amount of business transactions refers to the higher of the amount of goods purchased or sold between the parties. (3) In addition to the provisions in (1), in which companies or businesses have a short-term financing need, and the loan amount of each individual borrowers not exceeding 40% of the Company net value, the financing amount refers to the accumulated balance of of the company's short-term financing.

(4) Inter-company loans of funds between overseas companies in which the Company owns, directly or indirectly, 100% of the voting shares, or loans to the Company from any overseas companies in which the Company holds, directly or indirectly, 100% of the voting shares are not restricted by the abovementioned paragraphs. However, the total loan amount, limits for each individual borrower, and the period of loan should be specified. The total amount of loans lent between the overseas companies or to the parent company and the limit for each limit are specified as follows:

I. The total amount loans to enterprises shall not exceed 50% of the Company’s net value. However, for companies or businesses that have a short-term financing need, the loan amount of each individual borrower shall not exceed 40% of the Company net value. II. For overseas companies that have business dealings with each other, the individual loan amount shall not exceed the amount of transactions between the two parties. The amount of business transactions refers to the higher of the amount of goods purchased or sold between the parties.

III. If there is a need for short-term financing, the loan amount of each individual borrowers shall not exceed 40% of the company's net value, and the financing amount refers to the accumulated balance of the short-term financing between overseas companies. (5) The highest balance for the current period is the amount resolved by the board.

Note 4: Subsidiary - Miracle Technology Procedures for Lending Funds to Others

  • (1) Total amount of loans:The total amount of the Company's loans shall not exceed 40% of the Company's net value.

  • (2) For companies or businesses that have business dealings with the Company, the loan amount of each individual borrowers shall not exceed the amount of transactions between the two parties in the most recent year and not exceed 40% of the Company net value.

  • (3) For companies or businesses that have a short-term financing need, the loan amount of each individual borrowers shall not exceed the amount of transactions between the two parties in the most recent year and not exceed 40% of the Company net value.

  • (4) Inter-company loans of funds between overseas companies in which the Company owns, directly or indirectly, 100% of the voting shares, are not restricted by the abovementioned paragraphs. However, the total amount of loans and the amount of loan to a single party shall not exceed 50% of the Company's net value.

Note 5: Subsidiary - Innova Vision Procedures for Lending Funds to Others

(1) Total amount of loans:The total amount of the Company's loans shall not exceed 40% of the Company's net value.

  • (2) The loan amount of each individual borrower of companies or businesses that have business dealings with the Company shall not exceed the amount of transactions between the two parties in the past year. The amount of business transactions refers to the higher of the amount of goods purchased or sold between the parties, and shall not exceed 20% of the Company's net value.

(3) For companies or businesses that have a short-term financing need, the loan amount of each individual borrowers shall not exceed the amount of transactions between the two parties in the most recent year and not exceed 40% of the Company net value. 

~66~

TAIWAN MASK CORPORATION AND SUBSIDIARIES ENDORSEMENTS/GUARANTEES PROVIDED

FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2021

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Table 2
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(Amounts in thousands of new Taiwan dollars and foreign currencies,Unless Specified Otherwise)

No. Endorsement/
Guarantee Provider		 Guaranteed Party Limits on
Endorsement/
Guarantee Amount
Provided to Each
Guaranteed Party		 Maximum
Balance for the
Period		 EndingBalance Amount
ActuallyDrawn		 Amount of
Endorsement/
Guarantee
Collateralized
byProperties		 Ratio of
Accumulated
Endorsement/
Guarantee to Net
Equity per Latest
Financial
Statements		 Maximum
Endorsement/
Guarantee Amount
Allowable		 Guarantee
Provided by
Parent
Company		 Guarantee
Provided by
A Subsidiary		 Note
Guarantee
Provided to
Subsidiaries in
Mainland China
Name Nature of
Relationship
0
1
2		 Taiwan Mask
Corporation
Adl Engineering INC.
Miko-China Enterprise
(Shanghai) Co., Ltd.		 Miracle Technology
CO., LTD.
Aptos Technology INC.
Miracle Technology
CO., LTD.		 2
3
3		 229,550
$ 20,899
130,320		 171,210
$ 20,000
122,752		 171,210
$ 20,000
121,632		 -
$ 20,000
107,000		 -
$ 20,000
121,632		 4.39%
27.75%
52.90%		 1,558,995
$ 28,831
130,320		 Y
N
N		 N
Y
Y		 N
N
N

Note 1: The explanation of the Code column is as follows:

(1) Issuer fills in 0.

(2). The investee company is numbered in sequence starting from Arabic numeral 1 according to company type. Note 2: The relationship between the guarantor and the guarantee are one of the seven types indicated below:

(1) A company with which it does business.

(2)A company in which the Company directly and indirectly holds more than 50% of the voting shares.

(3) A company that directly and indirectly holds more than 50% of the voting shares in the Company.

(4) Companies in which the Company holds, directly or indirectly, 90%, or more of the voting shares may make endorsements/guarantees for each other.

(5) A company that is mutually insured by a contract between peers or co-founders based on the needs of the contracted work.

(6). A company that is guaranteed by all contributing shareholders in proportion to their shareholdings due to a joint investment relationship.

(7). Companies that are engaged in joint and several guarantees for the performance guarantee of pre-sale housing sales contracts in accordance with the regulations of the Consumer Protection Act. Note 3: The Company's endorsement and guarantee practices for others provide that:

(1). The total amount of the Company's external endorsement guarantee shall not exceed 30% of the Company's paid-in capital.

(2) The amount of business transactions refers to the higher of the amount of goods purchased or sold between the parties.

(3). Companies with which the Company has a parent-child relationship: The amount of endorsement and guarantee for a single enterprise shall not exceed 10% of the Company's paid-in capital and the paid-in capital of the company being endorsed and guaranteed.

(4). The aggregate amount of the endorsement and guarantee of the Company and its subsidiaries as a whole shall not exceed 40% of the net worth of the Company, of which the endorsement and guarantee of a single subsidiary shall not exceed 20% of the net worth of the Company.

Note 4: Subsidiary - Adl Engineering Inc. Endorsement and Guarantee Procedures:

  • (1). The aggregate amount of cumulative external endorsement guarantees shall not exceed 40% of the net value of the Company's most recent audited or reviewed financial statements.

  • (2). The amount of the endorsement guarantee for a single enterprise shall not exceed 30% of the net value of the company's most recent audited or reviewed financial statements.

(3) . The Company and its subsidiaries shall state in the shareholders' meeting the necessity and reasonableness of any endorsement or guarantee of more than 50% of the net value of the Company's most recent audited or reviewed financial statements. Note 5: Miko-China Enterprise (Shanghai) Co., Ltd. Endorsement and Guarantee Procedures:

The total amount of endorsement and guarantee obligation is limited to RMB30 million, while the amount of endorsement and guarantee for a single enterprise shall not exceed RMB30 million. 

~67~

TAIWAN MASK CORPORATION AND SUBSIDIARIES MARKETABLE SECURITIES HELD

(EXCLUDING INVESTMENTS IN SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES) March 31, 2021

Table 3

(Amounts in thousands of new Taiwan dollars and foreign currencies,Unless Specified Otherwise)

Held
Company
Name		 Marketable Securities Type and Name Relationship with the
Company		 Financial Statement Account For the CarryingValue
%
Fair Value
Note
three-month periods ended March 31, 2021		 CarryingValue
%
Fair Value
Note
three-month periods ended March 31, 2021		 CarryingValue
%
Fair Value
Note
three-month periods ended March 31, 2021
Shares CarryingValue %
TAIWAN MASK
CORPORATION
TAIWAN MASK
CORPORATION
TAIWAN MASK
CORPORATION
TAIWAN MASK
TAIWAN MASK
TAIWAN MASK
Youe Chung Capital
Corporation
Youe Chung Capital
Corporation
Youe Chung Capital
Corporation
Youe Chung Capital
Corporation
Youe Chung Capital
Corporation
Youe Chung Capital
Corporation
Youe Chung Capital
Corporation
Youe Chung Capital
Corporation
Youe Chung Capital
Corporation
Youe Chung Capital
Corporation
Jingjing Investment
Co., Ltd.
Jingjing Investment
Co., Ltd.
Aptos Technology
Co.,Limited
Adl Engineering INC.		 Wk Technology Fund-Common Stock
Tech Alliance Corp.-Common Stock
Furun Investment Co., Ltd.-Common Stock
Unicon Optical Co., Ltd.-Common Stock
ACER.-Common Stock
ACER.-call warrant
P-TWO INDUSTRIES INC.-Common Stock
TAIWAN MASK CORPORATION-Common Stock
Image Match Design Inc.-Common Stock
Unicon Optical Co., Ltd.-Common Stock
B Current Impact Investment-Common stocks
United Microelectronics Corporation-
Common stocks
ACER.-Common Stock
Investment fund of IP Venture Investment and
Management Company
Convertible bonds of Fiti Group
ACER.-call warrant
G-TECH ELECTRONICS LTD.-Common Stock
MEMCHIP TECHNOLOGY CO., LTD.-Common
Stock
Athentek Holding Inc.-Common Stock
Franklin Templeton SAm Asia Pac Bal Acc-
Beneficiary Certificate		 None
None
None
None
None
None
None
Parent company
The Company is a director of that
company
None
The Company is a director of that
company
None
None
None
None
None
None
None
None
None		 Financial Asset at Fair Value Through Profit or Loss-Non Cur.
Financial Asset at Fair Value Through Profit or Loss-Non Cur.
Financial Asset at Fair Value Through Profit or Loss-Non Cur.
Financial Asset at Fair Value Through Profit or Loss-Non Cur.
Financial Asset at Fair Value Through Profit or Loss-Non Cur.
Financial Asset at Fair Value Through Profit or Loss-Non Cur.
Financial Asset at Fair Value Through Profit or Loss-Non Cur.
Financial Asset at Fair Value Through Profit or Loss-Non Cur.
Financial Asset at Fair Value Through Profit or Loss-Non Cur.
Financial Asset at Fair Value Through Profit or Loss-Non Cur.
Financial Asset at Fair Value Through Profit or Loss-Non Cur.
Financial Asset at Fair Value Through Profit or Loss-Non Cur.
Financial Asset at Fair Value Through Profit or Loss-Non Cur.
Financial Asset at Fair Value Through Profit or Loss-Non Cur.
Financial Asset at Fair Value Through Profit or Loss-Non Cur.
Financial Asset at Fair Value Through Profit or Loss-Non Cur.
Financial Asset at Fair Value Through Profit or Loss-Non Cur.
Financial Asset at Fair Value Through Profit or Loss-Non Cur.
Financial assets measured at fair value through other
comprehensive income－Non Cur.
Financial Asset at Fair Value Through Profit or Loss-Cur.		 201,600
207,025
713,235
8,020,197
2,000,000
2,060,000
1,280,500
37,801,440
1,300,000
6,319,915
1,000,000
30,000,000
22,150,000
-
25,000
7,190,000
1,097,092
187,915
100,000
50,000		 -
$ -
7,132
151,983
62,900
9,052
46,354
2,651,323
4,576
119,762
10,000
1,506,000
696,618
10,000
3,120
27,536
-
-
-
500		 1.89%
2.07%
10.53%
5.45%
0.07%
-
2.39%
14.67%
3.91%
4.29%
10.00%
0.24%
0.73%
-
-
-
8.08%
3.13%
9.52%
-		 -
$ -
7,132
151,983
62,900
9,052
46,354
2,651,323
4,576
119,762
10,000
1,506,000
696,618
10,000
3,120
27,536
-
-
-
500		 
~68~

TAIWAN MASK CORPORATION AND SUBSIDIARIES

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS

FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2021

Table 4

(Amounts in thousands of new Taiwan dollars and foreign currencies,Unless Specified Otherwise)

Intercompany Transactions

No.
(Note 1)		 CompanyName Related Party Nature of Relationship
(Note 2)		 Financial Statements
Account		 Amount Terms Percentage of
Consolidated Net
Revenue or Total Assets
(Note 3)
0
0
0
0
0
1
1
1
1
2
3
3
4
5		 TAIWAN MASK CORPORATION
TAIWAN MASK CORPORATION
TAIWAN MASK CORPORATION
TAIWAN MASK CORPORATION
TAIWAN MASK CORPORATION
Miracle Technology CO., LTD.
Miracle Technology CO., LTD.
Miracle Technology CO., LTD.
Miracle Technology CO., LTD.
Miko-China Enterprise (Shanghai) Co., Ltd.
Sichuan Miracle Power Technology Co.,
Ltd.
Sichuan Miracle Power Technology Co.,
Ltd.
Youe Chung Capital Corporation
Adl Engineering INC.		 Miracle Technology CO., LTD.
Miracle International Enterprise(ShanHai)
Co., Ltd.
Miracle International Enterprise(ShanHai)
Co., Ltd.
Aptos Technology INC.
Aptos Technology INC.
Aptos Technology INC.
Miracle International Enterprise(ShanHai)
Co., Ltd.
Miracle International Enterprise(ShanHai)
Co., Ltd.
Miko Technology co., Ltd.
Miracle Technology CO., LTD.
Miko-China Enterprise (Shanghai) Co., Ltd.
Miko-China Enterprise (Shanghai) Co., Ltd.
Aptos Technology INC.
Aptos Technology INC.		 1
1
1
1
1
3
3
3
3
3
3
3
3
3		 Endorsements/Guarantees
Sales
Trade receivables
Other receivables
Rental income
Other receivables
Sales
Trade receivables
Other current liabilities
Endorsements/Guarantees
Sales
Trade receivables
Other receivables
Endorsements/Guarantees		 171,210
11,230
11,864
28,525
14,501
120,000
2,451
1,014
19,214
121,632
1,313
1,538
280,000
20,000		 The same with general
customers term
Month-end 60 days
Month-end 60 days
The same with general
customers term
The same with general
customers term
Pay by agreed time
Month-end 30 days
Month-end 30 days
Pay by agreed time
The same with general
customers term
Month-end 30 days
Month-end 30 days
The same with general
The same with general		 1.61%
0.88%
0.11%
0.27%
1.14%
1.13%
0.19%
0.01%
0.18%
1.14%
0.10%
0.01%
2.63%
0.19%

Note 1: TAIWAN MASK CORPORATION and its subsidiaries are coded as follows:

a. TAIWAN MASK CORPORATION is coded 0.

  • b.The subsidiaries are coded consecutively beginning from 1 in the order presented in the table above.

Note 2: Transactions are categorized as follows:

  • a. The parent company to subsidiary.

  • b. Subsidiary to parent company.

c. Subsidiary to subsidiary.

Note 3: The transaction amount accounts for the calculation of the combined total revenue or total assets ratio. In the case of assets and liabilities, the ending balance is calculated as the total assets. If it is a profit or loss item, the Note 4: Only transactions with a total amount of NT$1 million or more will be disclosed, and the transaction will not be disclosed separately. 

~69~

TAIWAN MASK CORPORATION AND SUBSIDIARIES

NAMES, LOCATIONS, AND RELATED INFORMATION OF INVESTEES OVER WHICH THE COMPANY EXERCISES SIGNIFICANT INFLUENCE (EXCLUDING INFORMATION ON INVESTMENT IN MAINLAND CHINA)

FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2021

Table 5

(Amounts in thousands of new Taiwan dollars and foreign currencies,Unless Specified Otherwise)

Investor Company Investee Company Location Main Businesses Original Inves tment Amount Balanc e as of March 3 1,2021 Net Income
(Loss) of the		 Share of
Profit/Loss of Investee		 Note
March 31,2021 December 31, Shares Percentage Carrying
Taiwan Mask Corporation
Taiwan Mask Corporation
Taiwan Mask Corporation
Taiwan Mask Corporation
Taiwan Mask Corporation
Taiwan Mask Corporation
Youe Chung Capital Corporation
Youe Chung Capital Corporation
Youe Chung Capital Corporation
Youe Chung Capital Corporation
Aptos Technology INC.
Aptos Technology INC.
Adl Engineering INC.
Apotos Global Holding Corp.
Miracle Technology CO., LTD.
Miracle Technology CO., LTD.
Miracle (Samoa) Co., Ltd
Jingjing Investment Co., Ltd.
Innova Vision INC.
Innova Vision INC.
Innova Vision INC.
Innova Vision INC.
Innova Vision (B.V.I) Inc.		 SunnyLake Park International Holdings, Inc.
Youe Chung Capital Corporation
ADVAGENE BIOPHARMA CO., LTD.
Miracle Technology CO., LTD.
Weida Hi-Tech CO., LTD.
Innova Vision INC.
ADVAGENE BIOPHARMA CO., LTD.
Xsense Technology Corporation
Aptos Technology INC.
Innova Vision INC.
Adl Engineering INC.
New Sunrise Limited
Aptos Global Holding Corp.
Aptos Technology Co.,Limited
Jingjing Investment Co., Ltd.
Miracle (Samoa) Co., Ltd
Misun Technology Co., Ltd
Miko Technology Co., Ltd
Innova Technology Company
Innova Vision (B.V.I) Inc.
Calaview International Holding Company
Limited
Innova Vision Kabushiki Kaisha
Innova Vision Kabushiki Kaisha		 British Virgin
Islands
Taiwan
Taiwan
Taiwan
Taiwan
Taiwan
Taiwan
British Virgin
Taiwan
Taiwan
Taiwan
Samoa
Seychelles
Hong Kong
Taiwan
Samoa
Mauritius
Hong Kong
Taiwan
British Virgin
Seychelles
Japan
Japan		 Investing in communication business
Investing in communication business
Medical, research and development,
Electronic component manufacturing,
wholesale of electronic materials and
precision instruments, power
component design, etc.
Research, design, development,
manufacturing and sales of display
panel control chips and modules
Manufacturing, retail, wholesale and
international trade of medical
equipment
Medical, research and development,
Precious metal coating
Design, packaging and testing of NAND
flash memory and solid state hard disk
and other related products
Manufacturing, retail, wholesale and
international trade of medical
Electronic components
Investing in communication business
Investing in communication business
Investing in communication business
Investing in communication business
Investing in communication business
Investing in communication business
Electronic component manufacturing,
wholesale of electronic materials and
precision instruments, power
component design, etc.
Sales of contact lens
Investing in communication business
Investing in communication business
Sales of contact lens
Sales of contact lens		 103,045
$ 1,260,000
165,691
252,651
293,371
578,321
65,719
317,965
134,928
151,533
375,809
-
29,795
29,648
10,012
-
-
37
35,000
60,157
-
8,349
56,420		 103,045
$ 1,440,000
165,691
252,651
293,371
210,649
65,719
268,965
134,928
149,774
375,809
-
29,795
29,648
10,012
10,215
10,215
37
35,000
60,157
-
8,349
56,420		 3,120,000
255,567,666
12,549,652
22,955,033
12,176,880
36,793,136
3,550,223
95,818,181
33,732,108
94,371
6,255,069
-
10,000,000
78,000,000
14,316,212
-
-
10,000
3,500,000
1,000,000
1,000,000
600
5,900		 100%
100%
25.54%
100%
36.70%
91.53%
7.22%
41.43%
38.16%
0.23%
52.19%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
9.23%
90.77%		 5,366
$ 1,375,224
83,604
385,066
82,017
358,631
23,651
193,359
88,950)
(
912
36,758
-
-
-
207,647
-
-
24,001
31,966)
(
63,734)
(
18
6,493)
(
63,846)
(		 -
$ 1,342,495
13,379)
(
3,732
9,232)
(
28,453)
(
13,379)
(
102,495)
(
84,891)
(
28,453)
(
1,650)
(
-
-
-
837
11,474
11,474
13,579)
(
941
12,213)
(
-
13,455)
(
13,455)
(		 -
$ 187,408
3,911)
(
3,732
3,389)
(
24,384)
(
1,106)
(
42,463)
(
32,397)
(
1,019)
(
861)
(
-
-
-
837
11,474
11,474
13,579)
(
941
12,213)
(
-
1,242)
(
12,213)
(		 1
2
2

Note: As of March 31, 2021, the funds for shares have not been remitted. 

~70~

TAIWAN MASK CORPORATION AND SUBSIDIARIES

INFORMATION ON INVESTMENT IN MAINLAND CHINA

FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2021

Table 6

(Amounts in thousands of new Taiwan dollars and foreign currencies,Unless Specified Otherwise)

Investee Company
Main Businesses
Total
Amount of
Paid-in
Capital
Method of
Investment
(Note 1)
Beginning
Balance of
Accumulated
Outflow of
Investment		 Investment Flows Ending Balance
Accumulated Outflow
of Investment from
Taiwan		 Net Income
(Loss) of the
Investee
Company		 Percentage of
Ownership (%)		 Investment
Income (Loss)
Recognized in
Current Period
(Note 2)		 Carrying
Amount as of
March 31,
2021		 Note
Ending Balance
of Accumulated
Inward
Remittance of
Earnings
Outflow
Inflow
-
$ -
$ -
-
-
-
Miko-China Enterprise (Shanghai) Co., Ltd. Electronic component manufacturing,
wholesale of electronic materials and
precision instruments, power
component design, etc.
3,283
$ 1
3,283
$ Miracle International
Enterprise(ShanHai) Co., Ltd.
Electronic component manufacturing,
wholesale of electronic materials and
precision instruments, power
component design, etc.
10,215
1
10,215
Sichuan Miracle Power Technology Co.,
IC product design, production and sales
52,128
2
-		 3,283
$ 10,215
-		 18,103
$ 11,789
1,429		 100%
100%
100%		 18,103
$ 11,789
1,429		 229,909
$ 62,026
49,747		 -
$ 2(2)B
-
2(2)B,4
-
2(2)B
Company
Name
Ending Balance of
Accumulated
Investment in Mainland
China		 Investment Amounts
Authorized by
Investment Commission,
MOEA
Upper Limit on Investment
Authorized by
Investment Commission,MOEA
Miko-China Enterprise (Shanghai) Co., Ltd.
3,283
$ Miracle International
Enterprise(ShanHai) Co., Ltd.
10,215
Sichuan Miracle Power Technology Co.,
Ltd.
-		 3,283
$ $ 209,374
10,215
209,374
-
209,374

Note 1 ： The methods for engaging in investment in Mainland China include the following:

a. Direct investment in Mainland China.

b. Indirectly investment in Mainland China through companies registered in a third region (Please specify the name of the company in third region).

c. Other methods.

Note 2 ： The investment income (loss) recognized in current period:Please specify no investment income (loss) has been recognized due to the investment is still during development stage. The investment income (loss) were determined based on the following basis:

a. The financial report was audited and certified by an international accounting firm in cooperation with an R.O.C. accounting firm.

b. The financial statements was audited and certificated by independent auditors of the parent company in Taiwan.

c. Others.

Note 3: The relevant figures in this table should be listed in NTD. 

~71~

TAIWAN MASK CORPORATION AND SUBSIDIARIES INFORMATION ON MAJOR SHAREHOLDERS

March 31, 2021

Shareholders
Youe Chung Capital Corporation
Table 7		 Total Shares Owned
OwnershipPercentage
37,801,440
14.67%
Shares		 
~72~

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