TMC - Interim / Quarterly Report 2021

TAIWAN MASK CORPORATION AND SUBSIDIARIES

Consolidated Financial Statements

With Independent Auditors’ Review Report

Thereon

June 30, 2021 and 2020 (Stock code: 2338)

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

Telephone ： 886-3-563-4370

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Independent Auditors’ Review Report

To the Board of Directors and Shareholders of ： TAIWAN MASK CORPORATION

Introduction

We have reviewed the accompanying consolidated balance sheets of TAIWAN MASK CORPORATION and subsidiaries (the “Group”) as of June 30, 2021 and 2020, and the related consolidated statements of comprehensive income for the three-month periods ended June 30, 2021 and 2020, and for the six-month periods ended June 30, 2021 and 2020, as well as the consolidated statements of changes in equity and of cash flows for the six-month periods ended June 30, 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 Preparations 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 financial statements of certain insignificant consolidated

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subsidiaries were not reviewed by independent auditors. Those statements reflect total assets of $993,709 thousand and $5,634 thousand, constituting 8.99% and 0.09% of the consolidated total assets, and total liabilities of $858,625 thousand and $0 thousand, constituting 11.85% and 0.00% of the consolidated total liabilities as at June 30, 2021 and 2020, and total comprehensive income of ($158,895) thousand, $55,325 thousand, ($240,577) thousand and $1 thousand, constituting 145.40%, 79.64%, (139.73%) and (0.00%) of the consolidated total comprehensive income for the three months and six months then ended. 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 $176,142 thousand and $517,605 thousand, constituting 1.59% and 7.96% of consolidated total assets as of June 30, 2021 and 2020, respectively, and the share of affiliates and joint venture profits and losses recognized by the equity method amounted to ($11,006) thousand, ($13,594) thousand, ($61,873) thousand and, ($19,928) thousand constituting 10.07%, (19.57%), (35.94%) and 10.23% of consolidated total comprehensive income (loss) for the three months and six months then ended, respectively.

Qualified Conclusion

Based on our reviews and the reports of other independent auditors (please refer to other matter), 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 June 30, 2021 and 2020, and of its consolidated financial performance for the three-month periods ended June 30, 2021 and 2020, and for the six-month periods ended June 30, 2021 and 2020 and its consolidated cash flows for the sixmonth periods ended June 30, 2021 and 2020 in accordance with “Regulations Governing the Preparations of Financial Reports by Securities Issuers” and International Accounting Standard 34, “Interim Financial Reporting” as endorsed by the

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Financial Supervisory Commission.

For and on behalf of PricewaterhouseCoopers, Taiwan

Daniel Lee Certified Public Accountants

Tina Cheng

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Taiwan Mask Corporation and Subsidiaries Consolidated Balance Sheets

Jun., 30[th] 2020 and 2019; Dec., 31[st] 2019

(Jun., 30[th] 2020 and 2019 Consolidated Balance Sheets were only reviewed, not audited.)

in thousand NTD

Jun.,30th2021	Dec.,31st2020	Jun.,30th2020
Amount $ 1,585,164 500 38,338 120,360 - 1,043,945 11,620 21,443 - 21,562 283,138 172,022 43,777 3,341,869 2,595,421 44,422 176,142 3,813,720 519,142 37,668 264,958 792 262,740 7,715,005 $ 11,056,874	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 $ 759,925 500 165,404 19,434 578 843,839 282 186,518 232 183 237,136 147,685 2,516 2,364,232 853,231 35,253 517,605 2,148,363 433,236 38,347 35,041 3,039 71,046 4,135,161 $ 6,499,393	%
			12 - 2 - - 13 - 3 - - 4 2 -
			36
			13 - 8 33 7 1 1 - 1
			64
			100

(Continued)

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Taiwan Mask Corporation and Subsidiaries Consolidated Balance Sheets

Jun., 30[th] 2020 and 2019; Dec., 31[st] 2019

(Jun., 30[th] 2020 and 2019 Consolidated Balance Sheets were only reviewed, not audited.)

Liabilities and Equities Current Liabilities 2100 Short Term Loans 2130 Contract Liabilities- Current 2150 Notes Payables 2170 Accounts Payables 2200 Other Payables 2230 Current Income Tax Liabilities 2250 Liability reserve`－`Current 2280 Lease liability -Current 2300 Other Current Liabilities 21XX Total Current Liabilities Non-Current Liabilities 2540 Long-term Loans 2570 Deferred Income Tax 2580 Lease liability –Non Current 2640 Defined Benefit Liabilities- Non Current 2645 Guarantee deposits received 2670 Other non-Current Liabilities- Other 25XX Total Non-Current Liabilities 2XXX Total Liabilities Equities Attributable to Parent Company Stock 3110 Common Stock Additional Paid-in Capital 3200 Additional Paid-in Capital Retained Earnings 3310 Legal Reserve 3320 Special Reserve 3350 Uncompensated Deficit Other Equities 3400 Other Equities 3500 Treasury Stock 31XX Total Equities Attributable to Parent Company 36XX Non-Controlling Interests 3XXX Total Equities Major Commitments and Contingencies Major Events after Financial Statement Date 3X2X Total Liabilities and Equities	Jun., 30th2021	% 31 1 - 4 6 1 - 2 2 47 15 1 3 - - - 19 66 23 5 5 - 10 - ( 8) 35 ( 1) 34 100	Dec., 31st2020	in Jun., 30th2020 % Amount 25 $ 877,387 1 103,131 - 1,814 4 466,408 5 729,450 1 18,275 - - 3 43,112 1 17,086 40 2,256,663 18 812,055 1 40,278 3 394,523 - 90 - 1,467 - - 22 1,248,413 62 3,505,076 28 2,527,136 5 339,383 6 587,990 - 2,666 9 49,326 - ( 7,712 ) ( 9) ( 527,678 ) 39 2,971,111 ( 1) 23,206 38 2,994,317 100 $ 6,499,393	in Jun., 30th2020	thousand NTD % 14 2 - 7 11 - - 1 - 35 12 1 6 - - - 19 54 39 5 9 - 1 - ( 8) 46 - 46 100
	Amount $ 3,404,254 139,574 66 476,971 619,871 81,269 11,471 246,710 235,875 5,216,061 1,620,474 65,632 284,390 18,213 6,871 37,039 2,032,619 7,248,680 2,527,136 630,722 587,990 2,666 1,084,074 ( 2,901) ( 942,818) 3,886,869 ( 78,675) 3,808,194 $ 11,056,874		Amount $ 2,298,718 99,418 66 397,237 436,980 80,722 12,917 244,651 106,707 3,677,416 1,635,872 53,268 262,275 18,213 5,129 1,102 1,975,859 5,653,275 2,527,136 439,898 587,990 2,666 814,617 889 ( 834,598) 3,538,598 ( 121,908) 3,416,690 $ 9,069,965

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

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Taiwan Mask Corporation and Subsidiaries Consolidated Comprehensive Income Statements

For the six-month periods ended June 30, 2021 and 2020

(Jun., 30[th] 2020 and 2019 Consolidated Balance Sheets were only reviewed, not audited.)

Items 4000 Operating Incomes 5000 Operating Costs 5900 Gross Income from Operations Operating Expenses 6100 Selling Expenses 6200 Administrative Expenses 6300 R & D Expenses 6450 Expected Credit Impairment (Loss) Benefit 6000 Total Operating Expense 6900 Operating Gain Non-Operating Incomes and Losses 7100 Interest Incomes 7010 Other Incomes 7020 Other Gains and Losses 7050 Financial Costs 7060 The share of affiliates and joint venture profits and losses recognized by the equity method 7000 Total Non-Operating Incomes and Losses 7900 Earnings Before Tax 7950 Income Tax Expense (Benefit) 8200 Net Income (Loss) Other Comprehensive Incomes (Net) 8311 Re-measurements of Defined Benefit Plan 8361 Financial statement translation differences of foreign operations 8360 Total Components of other comprehensive income that will be reclassified to profit or loss 8500 Total Comprehensive Incomes Net Incomes (Losses) Attributable to`：` 8610 Parent Company 8620 Non-Controlling Interest Total Total Comprehensive Incomes (Losses) Attributable to`：` 8710 Parent Company 8720 Non-Controlling Interest Total Basic Gain(Loss) per Share 9750 Net Gain (Loss) Diluted Gain or Loss per Share 9850 Net Gain(Loss)	2021/4/1- 2021/6/30 Amount % $ 1,492,111 100 ( 1,195,730)( 80) 296,381 20 ( 40,989) ( 3) ( 187,691) ( 12) ( 38,969) ( 3) 2,150 - ( 265,499)( 18) 30,882 2 1,109 - 9,300 1 ( 60,767) ( 4) ( 19,108) ( 1) ( 11,006)( 1) ( 80,472)( 5) ( 49,590) ( 3) ( 57,386)( 4) ($ 106,976) ( 7) ($ 1,758) - ( 550) - ( 550) - ($ 109,284) ( 7) ($ 20,642) ( 1) ( 86,334)( 6) ($ 106,976) ( 7) ($ 22,950) ( 1) ( 86,334)( 6) ($ 109,284) ( 7) ($ 0.10) ($ 0.10)	2020/04/01- 2020/06/30 Amount % $ 1,098,675 100 ( 931,101) ( 85) 167,574 15 ( 27,649 ) ( 3) ( 32,697 ) ( 3) ( 36,435 ) ( 3) ( 3,747) - ( 100,528) ( 9) 67,046 6 1,136 - 5,237 1 13,411 1 ( 5,964 ) ( 1) ( 13,594) ( 1) 226 - 67,272 6 6,511 1 $ 73,783 7 $ - - ( 4,316) ( 1) ( 4,316) ( 1) $ 69,467 6 $ 134,977 13 ( 61,194) ( 6) $ 73,783 7 $ 130,661 12 ( 61,194) ( 6) $ 69,467 6 $ 0.66 $ 0.66	in thousand NTD 2021/01/01- 2021/06/30 2020/01/01- 2020/06/30 Amount % Amount % $ 2,768,174 100 $ 2,204,542 100 ( 2,137,233) ( 78)( 1,853,362) ( 84) 630,941 22 351,180 16 ( 79,534) ( 3) ( 56,650 ) ( 3) ( 387,052) ( 14) ( 82,173 ) ( 4) ( 63,044) ( 2) ( 92,998 ) ( 4) 2,060 - ( 3,228) - ( 527,570) ( 19)( 235,049) ( 11) 103,371 3 116,131 5 1,790 - 3,751 - 23,957 1 6,477 - 260,188 9 ( 255,657 ) ( 11) ( 37,733) ( 1) ( 11,271 ) - ( 61,873) ( 2)( 19,928) ( 1) 186,329 7 ( 276,628) ( 12) 289,700 10 ( 160,497 ) ( 7) ( 113,741) ( 4)( 28,502) ( 2) $ 175,959 6 ($ 188,999) ( 9) $ - - $ - - ( 3,790) - ( 5,840) - ( 3,790) - ( 5,840) - $ 172,169 6 ($ 194,839) ( 9) $ 315,576 11 ($ 80,969 ) ( 4) ( 139,617) ( 5)( 108,030) ( 5) $ 175,959 6 ($ 188,999) ( 9) $ 311,786 11 ($ 86,809 ) ( 4) ( 139,617) ( 5)( 108,030) ( 5) $ 172,169 6 ($ 194,839) ( 9) $ 1.54 ($ 0.40) $ 1.52 ($ 0.40)

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

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in thousand NTD

Taiwan Mask Corporation and Subsidiaries Consolidated Changes of Equities Statements For the Second 2 Quarter Ended Jun., 30[th] , 2021 and 2020

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

																		in t
2020/1/1-2020/6/30 Beginning Balance as of 2020/1/1 Net Income Other Comprehensive Profit or Loss Total Comprehensive Profit or Loss Year 2019 appropriations of earnings Legal capital reserve Reversal of Special capital Cash dividends to shareholders Adjustments to share of changes in equities of associates Share-based payment transaction Shareholders do not receive dividends Ending Balance as of 2020/6/30 2021/1/1-2021/6/30 Beginning Balance as of 2021/1/1 Net Income Other Comprehensive Profit or Loss Total Comprehensive Profit or Loss Adjustments to share of changes in equities of associates Share-based payment transaction Treasury stock buyback Subsidiary's cash capital increase and non-controlling equity investment Ending Balance as of 2021/6/30					Equities Attributable to P				a	rent Company						Non- Controlling Interest		Total Equities
	C	ommon Stock	Additional Paid- in Capital		Retained Earnings					Other Equities			TreasuryStock		Total
					Legal Reserves	Special Reserves	Uncompensated Deficit			Conversion balance of financial statement translation of foreign operating agencies	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 - - - - - - ( 10,125 ) 26,604 127 $ 339,383 $ 439,898 - - - 21,650 169,174 - - $ 630,722	$544,712 - - - 43,278 - - - - - $587,990 $587,990 - - - - - - - $ 587,990	$ - - - - - 2,666 - - - - $2,666 $2,666 - - - - - - - $ 2,666		$ 432,801 ( 80,969 ) - ( 80,969 ) ( 43,278 ) ( 2,666 ) ( 252,714 ) ( 3,848 ) - - $ 49,326 $ 814,617 315,576 - 315,576 ( 46,119 ) - - - $ 1,084,074		$ 794 - ( 5,840 ) ( 5,840 ) - - - - - - ($ 5,046 ) $ 3,555 - ( 3,790 ) ( 3,790 ) - - - - ($ 235 )		($ 2,666 ) - - - - - - - - - ($ 2,666 ) ($ 2,666 ) - - - - - - - ($ 2,666 )		($ 835,332 ) - - - - - - - 307,654 - ($ 527,678 ) ($ 834,598 ) - - - - 306,920 ( 415,140 ) - ($ 942,818 )	$ 2,990,222 ( 80,969 ) ( 5,840 ) ( 86,809 ) - - ( 252,714 ) ( 13,973 ) 334,258 127 $ 2,971,111 $ 3,538,598 315,576 ( 3,790 ) 311,786 ( 24,469 ) 476,094 ( 415,140 ) - $ 3,886,869	$131,236 ( 108,030 ) - ( 108,030 ) - - - - - - $23,206 ($121,908 ) ( 139,617 ) - ( 139,617 ) 142,715 7,806 - 32,329 ($ 78,675 )	$3,121,458 ( 188,999 ) ( 5,840 ) ( 194,839 ) - - ( 252,714 ) ( 13,973 ) 334,258 127 $2,994,317 $3,416,690 175,959 ( 3,790 ) 172,169 118,246 483,900 ( 415,140 ) 32,329 $ 3,808,194

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

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Taiwan Mask Corporation and Subsidiaries Consolidated Statements of Cash Flow

in thousand NTD

For the three-month period ended June 31, 2021 and 2020

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 Dividends Income Interest Income Interest Expenses Net Profit of Financial Asset at Fair Value Through Profit or Loss Share-based payment transaction The Share of Affiliates Profits and Losses Recognized by the Equity Method Disposal of Property, Plants and Equipment Gain (loss) on disposal of investments 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 Notes Payables 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 Interest Paid Income Tax Paid Net Cash In-Flow from Operating Activities	2021/1/1- 2021/6/30 $ 289,700 229,740 3,894 ( 2,060 ) ( 593 ) ( 1,790 ) 37,733 ( 247,232 ) 176,980 61,873 987 ( 26,859 ) ( 203,779 ) ( 26,551 ) 879 ( 128,455 ) ( 5,021 ) 32,900 3,068 ( 30,299 ) ( 85,602 ) 25,812 21,018 39,806 ( 4,257 ) 65,117 116,215 - ( 1,446 ) 14,713 - ( 6,037 ) 350,454 1,805 593 ( 37,576 ) ( 99,290 ) 215,986	2020/1/1- 2021/6/30 ( $ 160,497 ) 210,780 4,611 3,228 - ( 3,751 ) 11,271 318,427 26,604 19,928 - ( 67,862 ) ( 103,850 ) ( 1,313 ) ( 578 ) ( 158,955 ) 1,286 463 ( 232 ) ( 25,684 ) ( 110,228 ) 1,818 2,643 65,707 1,749 117,027 123,968 ( 1,432 ) - ( 11,459 ) ( 20,221 ) - 243,448 9,370 - ( 10,867 ) ( 17,688 ) 224,263

(Continued)

Taiwan Mask Corporation and Subsidiaries Consolidated Statements of Cash Flow

For the three-month period ended June 31, 2021 and 2020

Cash Flow from Investment Activities
Acquisition of Amortized Cost Financial Assets

Acquisition of investment property by the Equity Method

Consolidation of individual changes in cash inflows
Consolidation of individual changes in cash outflows
Acquisition of Property, Plants and Equipment

Disposal of Property, Plants and Equipment
Acquisition of Intangible Assets

Increase of Refundable Deposits

Other Receivables-Related Parties
Net Cash Out-Flow from Investment Activities

Cash Flow from Funding Activities
Increase of Short Term Loan
Redemption of Short Term Loan

Increase of Long Term Loan
Redemption of Long Term Loan

Treasury stocks transfer to employees
Treasury Stock Buyback Cost

Redemption of Lease Principal

Reduction of Guarantee Deposits
Shareholders do not receive dividends reclassified as Additional Paid-in Capital
Subsidiary's cash capital increase and non-controlling equity investment
Net Cash In-Flow (Out-Flow) from Funding Activities
Adjustments of Exchange Rate

Increase (Decrease) of Cash and Cash Equivalents
Beginning Balance of Cash and Cash Equivalents
Ending Balance of Cash and Cash Equivalents

in thousand NTD
2021/1/1-
2021/6/30
2020/1/1-
2021/6/30
( $ 7,626 ) ( $ 126,167 )
(
49,000 ) (
268,965 )
22,508
-
- (
43,089 )
(
670,323 ) (
716,474 )
2,810
62
(
11,329 ) (
2,245 )
(
3,035 ) (
730 )
-
30,000
(
715,995 ) (
1,127,608 )
2,439,417
460,000
(
1,373,881 ) (
387,551 )
107,096
426,000
(
20,124 ) (
57,520 )
306,920
307,591
(
415,140 )
-
(
23,769 ) (
25,465 )
1,742 (
77 )
-
127
32,329
-
1,054,590
723,105
(
6,075 ) (
6,352 )
548,506 (
186,592 )
1,036,658
946,517
$ 1,585,164 $ 759,925

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

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TAIWAN MASK CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 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 Auguest 4, 2021.

3 `、` APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATION

(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 to IFRSs as endorsed by the FSC effective from 2021 are as follows:

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 and IFRS7 ,‘Interest rate benchmark reform’ Amendment to IFRS 16, ‘Covid-19-related rent concessions’ Note`：`Earlier application from January 1, 2021 is allowed by FSC.	January 1, 2021 January 1, 2021 April 1, 2021 (Note)

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

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(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

==> picture [405 x 137] intentionally omitted <==

The above standards and interpretations have no significant impac t to the Group’s financial condition and financial performance based on the Group’s assessment.

`(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:

==> picture [453 x 50] intentionally omitted <==

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

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

New Standards, Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendments to IFRS 10 and IAS 28 “ Sale or Contribution of Assets	To be determined by IASB
between an Investor and its Associate or Joint Venture”
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	January 1, 2023
noncurrent’
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 12 “Deferred Tax related to Assets and Liabilities	January 1, 2023
arising from a Single Transaction”

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, 20 20, 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.

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`(1)` Compliance statement

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.
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:

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.		Ownership (%)	June 30,2020 100 100 100	Remark
			June 30,2021 100 100 100	December 31,2020 100 100 100
Taiwan Mask Corporation Taiwan Mask Corporation Taiwan Mask Corporation	SunnyLake Park International Holding, Inc. Youe Chung Capital C ti Miracle Technology CO., LTD.					Note5

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Investor	Subsidiary	Main business activities 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 Metal coating service 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. Investing in communication business		Ownership (%)	June 30,2020 - - - 38.16 - 52.19 100 100 100 100 100 100 100 100	Remark
			June 30,2021 - 91.53 0.23 38.16 41.43 100 100 100 100 100 - 100 100 -	December 31,2020 - 13.00 3.21 38.16 - 52.19 100 100 100 100 100 100 100 100
Taiwan Mask Corporation Taiwan Mask Corporation Youe Chung Capital 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. Miracle Technology (Samoa) Co., Ltd.	Weida Hi-Tech CO., LTD. Innova Vision INC. Innova Vision INC. Aptos Technology INC. Xense Technology Corporation 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. Misun Technology Co., Ltd.					Note1 `、`5 Note2 `、`5 Note2 `、`5 Note5 Note5 Note5 Note5 Note5 Note5 Note3 Note3

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Investor	Subsidiary	Main business activities June 30,2021 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. 100 IC product design, production and sales 79.17 IC product design, production and sales 20.83 Medical device manufacturing, wholesale and trading 100 Investing in communication business 100 Medical device manufacturing, wholesale and trading 52.03 Investing in communication business 100 Medical device manufacturing, wholesale and trading 47.97	December 31,2020 100 - 64.29 35.71 100 100 9.23 100 90.77 Ownership (%)	June 30,2020 100 - 64.29 35.71 - - - - -	Remark
Misun Technology Co., Ltd. Miracle Technology CO., LTD. Miko-China Enterprise (Shanghai) Co., Ltd. Miracle International Enterprise(Shan Hai) Co., Ltd. Innova Vision INC. Innova Vision INC. Innova Vision INC. Innova Vision INC. Innova Vision (B.V.I.) Inc.	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. Innova Technology Company Innova Vision (B.V.I.) Inc. Innova Vision Kabushiki Kaisha Calaview International Holding Company Limited Innova Vision Kabushiki Kaisha				Note3 Note3 Note4 Note4 Note2 `、`5 Note2 `、`5 Note2 `、`5 Note2 `、`5 Note2 `、`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 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 (29) 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

~15~

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% .

Note3: 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.
Note4 ： 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% .
Note5: The financial statements of the entity as of and for the ended June 30, 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 June 30, 2021, December 31, 2020 and June 30, 2020 the noncontrolling interest amounted to ($78,675), ($121,908) and $23,206, respectively. The information of non-controlling interest and respective subsidiaries is as follows:

~16~

subsidiary	Main business activities Amount Ownership (%) Amount Ownership (%) Remark Taiwan ($ 153,965) 61.84% ($ 63,630) 61.84% Main business activities Amount Ownership (%) Remark Taiwan $ 23,206 61.84% Non-controllinginterest June 30,2021 December 31,2020 June 30,2020 Non-controlling interest	Main business activities Amount Ownership (%) Amount Ownership (%) Remark Taiwan ($ 153,965) 61.84% ($ 63,630) 61.84% Main business activities Amount Ownership (%) Remark Taiwan $ 23,206 61.84% Non-controllinginterest June 30,2021 December 31,2020 June 30,2020 Non-controlling interest
Aptos Technology INC. and Subsidiaries subsidiary
Aptos Technology INC. and Subsidiaries

Summarized financial information of the subsidiaries: Balance sheets

Balance sheets
			Aptos TechnologyINC. and Subsidiaries
			June 30,2021	December 31,2020				June 30,2020
Current assets		$	390,360	$	227,618		$	204,778
Non-current assets			403,487		462,810			229,078
Current liabilities	(		907,458)	(	657,891)	(		317,497)
Non-current liabilities	(		155,649)	(	156,705)	(		99,386)
Total net assets	($		269,260)	($	124,168)		$	16,973

Statements of comprehensive income

~17~

Aptos Technology INC. and Subsidiaries

				For the three-month					For the three-month
	periods ended June 30,2021				periods ended June 30,2020
Revenue		$		135,622		$			100,947
Loss before income tax	(			68,020)	(				65,649)
Income tax expense				-					-
Loss for the period from continuing	(			68,020)	(				65,649)
operations
Loss for the period	(			68,020)	(				65,649)
Other comprehensive income, net of				-					-
tax
Total comprehensive income for the	($			68,020)	($				65,649)
period
Comprehensive income attributable to
non-controlling interest		$		-	($				40,228)
Statements of cash flows
				Aptos Technology	INC. and Subsidiaries
				For the six-month periods					For the six-month periods
				ended June 30,2021					ended June 30,2020
Revenue			$	239,197				$	242,442
Loss before income tax		(		152,911)			(		108,993)
Income tax expense					-				-
Loss for the period from continuing		(		152,911)			(		108,993)
operations
Loss for the period		(		152,911)			(		108,993)
Other comprehensive income, net of					-				-
tax
Total comprehensive income for the		($		152,911)			($		108,993)
period
Comprehensive income attributable to
non-controlling interest			$		-		($		67,401)

~18~

		Aptos TechnologyINC. and Subsidiaries	Aptos TechnologyINC. and Subsidiaries	Aptos TechnologyINC. and Subsidiaries	Aptos TechnologyINC. and Subsidiaries
		For the six-month periods			For the six-month periods
		ended June 30,2021			ended June 30,2020
Net cash provided by operating	($	105,643)	($		73,959)
activities
Net cash provided by investing		3,156	(		26,179)
activities
Net cash provided by financing		159,943			45,056
activities
Increase (decrease) in cash and cash		57,456	(		55,082)
equivalents
Cash and cash equivalents, beginning
of period		39,193			87,602
Cash and cash equivalents, end of
period	$	96,649		$	32,520

`(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 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 f inancial statements of 2020.

6 `、` DETAILS OF SIGNIFICANT ACCOUNTS

`(1)` Cash and cash equivalents

and cash equivalents
Cash on hand and petty cash Checking accounts and demand Time deposits Total	June 30,2021 December 31,2020 2,826 $ 309 $ 1,511,973 905,755 70,365 130,594 1,585,164 $ 1,036,658 $	June 30,2020
		717 $ 697,225 61,983
		759,925 $

~19~

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	June 30,2021 December 31,2020 500 $ 500 $ - - 500 $ 500 $ 1,515,591 $ 1,302,315 $ 95,354 102,023 10,000 10,000 1,620,945 1,414,338 974,476 720,575 2,595,421 $ 2,134,913 $	June 30,2020
		500 $ -
		500 $
		709,886 $ 142,636 -
		852,522 709
		853,231 $

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

~20~

For the three-month For the three-month periods ended June 30, 2021 periods ended June 30, 2020

Financial assets mandatorily
measured at fair value through profit
or loss
Listed stocks	($	60,533)	$	34,820
Unlisted stocks		-		-
	($	60,533)	$	34,820
		For the six-month periods		For the six-month periods
		ended June 30, 2021		ended June 30, 2020
Financial assets mandatorily
measured at fair value through profit
or loss
Listed stocks	$	256,729	($	243,403)
Unlisted stocks		6,048		-
	$	262,777	($	243,403)

B. Information to financial assets at fair value through profit or loss pl edged 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 cos

inancial assets at amortized cos
Items Current items: Deposits in banks Time deposits Non-current items: Deposits in banks Time deposits	June 30, 2021 December 31,2020 18,338 $ 11,111 $ 20,000 23,101 38,338 $ 34,212 $ - $ - $ 44,422 40,922 44,422 $ 40,922 $	June 30,2020
		11,112 $ 154,292
		165,404 $
		1,000 $ 34,253
		35,253 $

A. Amounts recognized in profit or loss in relation to financial assets at amortized cost is listed below:

~21~

For the three-month For the three-month periods ended June 30, 2021 periods ended June 30, 2020 Interest income $ 28 $ 37 For the six-month periods For the six-month periods ended June 30, 2021 ended June 30, 2020 Interest income $ 58 $ 74

B. As of June 30, 2021, December 31, 2020 and June 30, 2020, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the financial assets at amortized cost held by the Group were $82,760, $75,134 and $200,657, respectively.
C. Details of the Group’s financial assets at amortized cost pledged to others as collateral are provided in Note 8.
(4) Notes and accounts receivable

			June 30,2021	December	31,2020			June 30,2020
Notes receivable		$	-	$	879		$	578
Accounts receivable			1,053,270		906,142			854,644
Accounts receivable-related parties			11,620		6,599			282
			1,064,890		912,741			854,926
Less: Allowance for uncollectible	(		9,325)	(	11,399)	(		10,805)
accounts
		$	1,055,565	$	901,342		$	844,121

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

Accounts receivable Notes receivable 917,253 $ - $ 103,578 - 34,961 - 1,193 - 7,905 - 1,064,890 $ - $ June 30, 2021	December 31,2020	December 31,2020
Accounts receivable 917,253 $ 103,578 34,961 1,193 7,905 1,064,890 $	Accounts receivable 723,020 $ 149,442 32,507 2,169 5,603 912,741 $	Notes receivable
		879 $ - - - -
		879 $

~22~

		June 30,2020	June 30,2020	June 30,2020
	Accounts	receivable		Notes receivable
Not past due	$	713,065	$	578
Up to 30 days		96,783		-
31 to 90 days		25,043		-
91 to 180 days		19,227		-
Over 180 days		808		-
	$	854,926	$	578

The above ageing analysis was based on past due date.

B. As of June 30, 2021, December 31, 2020 and June 30, 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 June 30, 2021, December 31, 2020 and June 30, 2020, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the Group’s accounts receivable were $1,055,565, $901,342 and $844,121, respectively.
D. Information about credit risk of notes and accounts receivable is provided in Note 12(2).
(5) Inventories

Raw materials Work in progress Finished goods Merchandise inventories Total	June 30, 2021
	Cost Allowance for valuation loss 222,152 $ 27,027) ($ 43,420 10,424) ( 53,268 17,536) ( 20,551 1,266) ( 339,391 $ 56,253) ($	Book value
		195,125 $ 32,996 35,732 19,285
		283,138 $

	December 31,2020
Cost 236,557 $ 16,363 27,684 8,082 288,686 $	Allowance for valuation loss 57,847) ($ 7,257) ( 17,653) ( 515) ( 83,272) ($	Book value
		178,710 $ 9,106 10,031 7,567
		205,414 $

~23~

Raw materials Work in progress Finished goods Merchandise inventories Total	Cost 223,570 $ 23,308 53,375 19,599 319,852 $	Allowance for valuation loss Book value 52,762) ($ 170,808 $ 6,793) ( 16,515 21,355) ( 32,020 1,806) ( 17,793 82,716) ($ 237,136 $ June 30,2020

The cost of inventories recognized as expense for the period:

Cost of goods sold Inventory losses (reversal of write- down of inventories) Cost of goods sold Inventory losses (reversal of write- down of inventories)	periods ended June 30,2021 periods ended June 30, 2020 1,217,233 $ 931,931 $ 21,503) ( 830) ( 1,195,730 $ 931,101 $ ended June 30,2021 ended June 30, 2020 2,164,180 $ 1,857,069 $ 26,947) ( 3,707) ( 2,137,233 $ 1,853,362 $

The Group's inventory portion prepared for the depreciation loss in the previous period for the three-month periods ended June 30, 2021 and 2020, for the six-month periods ended June 30, 2021 and 2020 has been sold, resulting in a rebound in the net realizable value of the inventory and a reduction in the cost of goods sold.

`(6)` Investments accounted for using equity method

Associates: Advagene Biopharma Co., Ltd. Xsense Technology Corporation Weida Hi-Tech	June 30,2021 December 31,2020 96,573 $ 88,915 $ - 186,821 79,569 85,425 176,142 $ 361,161 $	June 30,2020
		87,072 $ 260,057 170,476
		517,605 $

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:

~24~

Income (Loss) from Continuing Operation Other comprehensive income (net after tax`）` Total comprehensive income (loss) for the period Income (Loss) from Continuing Operation Other comprehensive income (net after tax`）` Total comprehensive income (loss) for the period	For the three-month periods ended June 30,2021	For the three-month periods ended June 30,2020
	11,006) ($ - 11,006) ($ For the six-month periods ended June 30,2021	58,921) ($ - 58,921) ($ For the six-month periods ended June 30,2020
	61,873) ($ - 61,873) ($	76,382) ($ - 76,382) ($

The Group has invested in Advagene Biopharma and Weida Hi-Tech, and held 32.09% 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 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.

~25~

`(7)` Property, plant and equipment

At January 1, 2021 Cost Accumulated depreciation 2021 January 1 Acquisitions Disposals-Cost Disposals- Accumulated depreciation Depreciation Reclassification-Cost Reclassification- Accumulated depreciation Consolidated transfer in Net exchange differences-Cost Net exchange differences- Accumulated depreciation June 30 June 30, 2021 Cost Accumulated depreciation	Buildings (Land) 1,840,184 $ 566,920) ( 1,273,264 $ 1,273,264 $ 164,230 - - 37,438) ( 303,534 - - - - 1,703,590 $ 2,307,948 $ 604,358) ( 1,703,590 $	Machinery and equipment 2,938,927 $ 1,273,724) ( 1,665,203 $ 1,665,203 $ 142,717 5,186) ( 5,186 138,284) ( 85,893 25,586) ( 62,433 12 - 1,792,388 $ 3,224,796 $ 1,432,408) ( 1,792,388 $	Office Equipment 28,540 $ 15,004) ( 13,536 $ 13,536 $ 5,520 300) ( 71 3,392) ( - - 5,770 26) ( 6 21,185 $ 39,504 $ 18,319) ( 21,185 $	Transportation 3,675 $ 2,620) ( 1,055 $ 1,055 $ 2,290 - - 343) ( - - - 14) ( 13 3,001 $ 5,951 $ 2,950) ( 3,001 $	Molding Equipment 10,391 $ 6,390) ( 4,001 $ 4,001 $ 3,263 3,224) ( 3,224 2,696) ( - - - - - 4,568 $ 10,430 $ 5,862) ( 4,568 $	Other Equipment 39,856 $ 17,539) ( 22,317 $ 22,317 $ 12,649 26,551) ( 22,983 11,808) ( 660) ( - 31,653 - - 50,583 $ 56,947 $ 6,364) ( 50,583 $	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 $ 187,751 518,420 - 35,261) ( - 31,464 - 193,961) ( 86,057) ( 302,710 - 25,586) ( - 99,856 - 28) ( - 19 238,405 $ 3,813,720 $ 238,405 $ 5,883,981 $ - 2,070,261) ( 238,405 $ 3,813,720 $

~26~

At January 1, 2020 Cost Accumulated depreciation 2020 January 1 Acquisitions Disposals-Cost Disposals- Accumulated depreciation Depreciation Reclassification-Cost Merging individuals to reduce the number of transfers-cost Merging individuals to reduce the number of transfers- Accumulated depreciation Net exchange differences-Cost Net exchange differences- Accumulated depreciation June 30 June 30,2020 Cost Accumulated depreciation and impairment	Buildings (Land) 1,013,344 $ 529,905) ( 483,439 $ 483,439 $ 9,873 - - 18,358) ( 9 - - - - 474,963 $ 1,023,226 $ 548,263) ( 474,963 $	Machinery and equipment 1,767,700 $ 1,004,444) ( 763,256 $ 763,256 $ 91,296 5,134) ( 5,072 152,541) ( 229,017 - - - - 930,966 $ 2,082,879 $ 1,151,913) ( 930,966 $	Office Equipment 21,509 $ 11,377) ( 10,132 $ 10,132 $ 2,118 570) ( 570 2,230) ( - 1,215) ( 645 9) ( 6 9,447 $ 21,833 $ 12,386) ( 9,447 $	Transportation 3,090 $ 2,194) ( 896 $ 896 $ - - - 182) ( - - - 24) ( 23 713 $ 3,066 $ 2,353) ( 713 $	Molding Equipment 5,700 $ 2,960) ( 2,740 $ 2,740 $ 2,766 - - 1,746) ( - - - - - 3,760 $ 8,466 $ 4,706) ( 3,760 $	Other Equipment 52,091 $ 19,279) ( 32,812 $ 32,812 $ 5,336 8,397) ( 8,397 8,483) ( - 13,160) ( 7,074 - - 23,579 $ 35,870 $ 12,291) ( 23,579 $	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 $ 680,317 791,706 - 14,101) ( - 14,039 - 183,540) ( 229,026) ( - - 14,375) ( - 7,719 - 33) ( - 29 704,935 $ 2,148,363 $ 704,935 $ 3,880,275 $ - 1,731,912) ( 704,935 $ 2,148,363 $

~27~

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:

For the six-month periods For the six-month periods ended June 30, 2021 ended June 30, 2020 - Amount capitalised $ $ 1,017 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	June 30,2021 December 31,2020 Book value Book value 385,386 $ 390,879 $ 112,095 107,547 - 6,060 21,661 3,981 519,142 $ 508,467 $	June 30,2020
		Book value
		308,129 $ 122,392 - 2,715
		433,236 $

~28~

		For the three-month		For the three-month
	periods ended June 30,2021		periods ended June 30,2020
		Depreciation		Depreciation
Land	$	6,340	$	2,891
Buildings		9,232		7,195
Machinery and equipment		4,040		-
Transportation		1,705		1,062
	$	21,317	$	11,148
		For the six-month periods		For the six-month periods
		ended June 30,2021		ended June 30, 2020
		Depreciation		Depreciation
Land	$	10,658	$	5,782
Buildings		14,200		19,181
Machinery and equipment		6,060		-
Transportation		3,143		1,937
	$	34,061	$	26,900

D. For the three months and six months ended June 30, 2021 and 2020, the increases to right-of-use assets were $37,503, $33,550, $47,943 and $33,584.
E. The information on income and expense accounts relating to lease contracts is as follows:

is as follows:
Items affecting profit or loss Interest expense of lease liabilities Cost of short-term lease contract Expenses of leases of low-value assets Items affecting profit or loss Interest expense of lease liabilities Cost of short-term lease contract Expenses of leases of low-value assets	For the three-month periods ended June 30,2021	For the three-month periods ended June 30,2020
	1,363 $ 260 42 For the six-month periods ended June 30,2021	935 $ 843 55 For the six-month periods ended June 30, 2020
	2,722 $ 2,665 84	1,881 $ 1,113 98

F. For the three months and six months ended June 30, 202 1 and 2020, the Group’s total cash outflow for leases were $14,845, $12,180, $29,240 and $28,557, respectively.
G. Lease extension option and lease termination option

When the Group determines the lease term, it considers all the facts and

~29~

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 $5,005, $1,965, $11,257 and $2,796 based on operating lease contracts for the three months and six months ended June 30, 2021 and 2020, respectively, and none of the lease contracts were variable lease payments.
C. The maturity date of the Group's undiscounted lease payments leased under operating leases is as follows:

2020 2021 2022 2023	June 30,2021 December 31, 2020 - $ - $ 7,318 46,446 5,529 35,062 4,793 24,900 17,640 $ 106,408 $	June 30, 2020
		2,579 $ 3,300 3,300 2,750
		11,929 $

~30~

`(10)` Investment Property

Buildings

			Buildings
At January 1, 2021
Cost		$	319,557
Accumulated depreciation	(		6,458)
		$	313,099
2021
January 1		$	313,099
Business combination transfer out	(		273,713)
Depreciation	(		1,718)
June 30		$	37,668
At June 30, 2021
Cost		$	45,844
Accumulated depreciation	(		8,176)
		$	37,668
			Buildings
At January 1, 2020
Cost	$		44,007
Accumulated depreciation	(		5,320)
	$		38,687
2020
January 1	$		38,687
Depreciation	(		340)
June 30	$		38,347
At June 30, 2020
Cost	$		44,007
Accumulated depreciation	(		5,660)
	$		38,347

A. Rental income from investment property and direct operating expenses arising from investment property are shown below:

~31~

Rental income from investment property Direct operating expenses arising from the investment property that generated rental income during the period Rental income from investment property Direct operating expenses arising from the investment property that generated rental income during the period	For the three-month periods ended June 30,2021	For the three-month periods ended June 30,2021	For the three-month periods ended June 30,2020	For the three-month periods ended June 30,2020
		558 $ 189 $ For the six-month periods ended June 30,2021		557 $ 362 $ For the six-month periods ended June 30,2020
		8,498 $ 1,756 $		1,114 $ 553 $

B. The fair value of the investment property held by the Group as of June 30, 2021, December 31, 2020 and June 30, 2020 were $40,043, $314,845 and $4,127, 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	June 30,2021 December 31, 2020 4.98% 5.03% 2,246 $ 31,778 $ 45 2~20	June 30,2020 5.56% 2,237 $ 2

C. There was no amount of borrowing costs capitalized as part of investment property for the six-month period ended June 30, 2021 and 2020.
D. There was investment property that was pledged to others as collaterals for June 30, 2021, December 31, 2019 and June 30, 2020.
(11) Short-term borrowings

ort-term borrowings
Type of borrowings Bank borrowings Credit borrowings Secured loan	June 30,2021 1,402,254 $ 2,002,000 3,404,254 $	Interest rate range	Collateral
		0.90%~2.60% 1.04%~2.25%	NA Certificates of deposit, reserve accounts, stocks of listed and OTC

~32~

Type of borrowings Bank borrowings Credit borrowings Secured Loan Purchase Borrowings Type of borrowings Bank borrowings Credit borrowings Secured loan Purchase Borrowings Other short-term loans	December 31,2020 1,660,118 $ 571,000 67,600 2,298,718 $ June 30, 2020 788,000 $ 20,000 9,387 60,000 877,387 $	range	Collateral
		0.90%~2.60% 1.05%~2.25% 0.89%~1.06% Interest rate range	NA Certificates of deposit, reserve accounts, stocks of listed and OTC companies and investment properties. NA Collateral
		0.98%~2.60% 1.17% 1.28%~2.00% 0.45%	N/A Time deposits, Reserves accounts N/A Investment property

Interest expense recognized in profit or loss amounted to $ 5,956, $3,635, $12,392 and $6,399 for the three months and six months ended June 30, 2021 and 2020, respectively.

`(12)` Other Payables

her Payables
Salary and Wages Payable Employee Bonus Payable and Commensation Due to Directors Balance Payable-Machinery and Equipment Machine Maintenance Payable Dividend payable Others	June 30,2021 December 31,2020 57,912 $ 42,582 $ 176,105 113,311 56,820 53,809 23,813 31,851 - - 305,221 195,427 619,871 $ 436,980 $	June 30,2020
		29,075 $ 67,345 55,515 62,008 252,714 262,793
		729,450 $

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- `(13)` Long term borrowings

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borrowings repayment term range Collateral June 30, 2021
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Long-term bank borrowing	Long-term bank borrowing
Bank	2017.09.27~2022.09.27	1.797%~2.64%	Guaranteed	$	969,055
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
					1,819,055
Less: Current portion of long-term borrowings				(	198,581)
				$	1,620,474

Type of	Borrowing period and	Interest rate
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
borrowings	repayment term	range	Collateral		June 30,2020
Long-term bank borrowing
Bank	2017.09.27~2022.09.27	1.797%~2.74%	Guaranteed	$	820,096
borrowings	payable at maturity date		buildings, machine
secured			equipment, other
borrowings			equipment and
			reserves accounts
Less: Current portion of long-term borrowings				(	8,041)
				$	812,055

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For the long-term loan contract of the Group from December 20, 2019 to Auguest 12, 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 $536, ( $18,447), $1,073 and ($17,896) for the three months and six months ended June 30, 2021 and 2020, respectively.
(C) Expected contributions to the defined benefit pension plans of the Group for the year ending December 31, 2022 amount to $2,133.
B.(A) Effective July 1, 2005, the Company and its domestic subsidiaries have established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. 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 months and six months ended June 30, 2021 and 2020 were $8,154, $5,078, $12,688 and $10,615, respectively.

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`(15)` Share capital

A. As of June 30, 2021, the Company’s authorized capital was $5,000,000, consisting of 500,000 thousand shares of ordinary stock (includi ng 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:

Unit: share in thousands

as follows:		Unit:	share in thousands
		2021	2020
January 1		205,632	198,400
Treasury stocks transfer to employees		10,000	17,232
Treasury Stock Buyback	(	10,000)	-
June 30		205,632	215,632

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	June 30,2021	June 30,2021
	Number of shares	Book value
Subsidiary- Youe Chung Capital Corporation Taiwan Mask Corporation Shares held by	37,081 10,000	527,678 $ 415,140
	47,081	942,818 $
	December
Subsidiary- Youe Chung Capital Corporation Taiwan Mask Corporation Shares held by
	Number of shares 37,081
Subsidiary- Youe Chung Capital

~36~

(B) The Company's remuneration costs incurred for the transfer of treasury shares from January 1 to June 30, 2021 and 2020 were $176,980 and $26,604.
(C) 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.
(D) 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.
(E) Pursuant to the R.O.C. Securities and Exchange Act, treasury sha res should be reissued to the employees within three years from the reacquisition date and shares not reissued within the five -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.
(F) Subsidiary-Youe Chung Company holds TMC stocks as treasury shares processing. AS of June 30, 2021, December 31, 2020 and June 30, 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 $83.6, $40.35 and $27.4. 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 .
(G) 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.
(H) 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:

~37~

January 1, 2021 Changes in shares of affiliates Share-based June 30, 2021 January 1, 2020 Changes in shares of affiliates recognized under the equity method Share-based payment transaction Shareholders have not received dividends overdue June 30, 2020	Treasury shares	Recognition of changes in ownership interest in subsidiaries	Employee stock options	Changes in equity of affiliated companies 18,540 $ 18,207 - 36,747 $ Changes in equity of affiliated companies 9,181 $ 123 - - 9,304 $	Other Total 3,882 $ 439,898 $ - 21,650 - 169,174 3,882 $ 630,722 $ Other Total 316 $ 322,777 $ - 10,125) ( - 26,604 127 127 443 $ 339,383 $
	411,379 $ - 75,627 487,006 $ Treasury shares 187,873 $ - 124,756 - 312,629 $	6,097 $ 3,443 - 9,540 $ Recognition of changes in ownership interest in subsidiaries 27,255 $ 10,248) ( - - 17,007 $	- $ - 93,547 93,547 $ Employee stock options 98,152 $ - 98,152) ( - - $

`(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:

~38~

(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 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. On March 15, 2021, the Shareholders resolved to distribute cash dividends amounting to $359,570 ($1.50 (in dollars) per share) for the appropriation of 2020 earnings.
F. On June 10, 2020, the Shareholders resolved to distribute cash dividends amounting to $252,714 ($1.07 (in dollars) per share) for the appropriation of 2019 earnings.

`(18)` Other equity items

January 1 Foreign currency conversion difference: –Group June 30			2021
		Unrealized evaluation of profit and loss
	2,666) ($ - 2,666) ($

~39~

2020

			2020
	Unrealized
	evaluation of	profit	Foreign currency
	and loss		translation		Total
January 1	($	2,666)	794 $	($	1,872)
Foreign currency conversion
difference:
–Group		-	5,840) (	(	5,840)
June 30	($	2,666)	5,046) ($	($	7,712)

`(19)` Operating revenue

Revenue from contracts with customers Revenue from contracts with customers	For the three-month periods ended June 30, 2021 For the three-month periods ended June 30, 2020 1,492,111 $ 1,098,675 $ For the six-month periods ended June 30,2021 For the six-month periods ended June 30, 2020 2,768,174 $ 2,204,542 $	For the three-month periods ended June 30, 2021 For the three-month periods ended June 30, 2020 1,492,111 $ 1,098,675 $ For the six-month periods ended June 30,2021 For the six-month periods ended June 30, 2020 2,768,174 $ 2,204,542 $
		1,098,675 $
		For the six-month periods ended June 30, 2020
		2,204,542 $

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 June 30,2021 Revenue from external customer contracts Timing of revenue recognition At a point in time Revenue recognized gradually over time For the three-month periods ended June 30,2020 Revenue from external customer contracts Timing of revenue recognition At a point in time Revenue recognized gradually over time	Mask and Semiconductor division Medical division 1,492,143 $ 32) ($ 1,356,521 $ 32) ($ 135,622 - 1,492,143 $ 32) ($	Total 1,492,111 $ 1,356,489 $ 135,622 1,492,111 $ Mask and Semiconductor division
		1,098,675 $ 997,728 $ 100,947 1,098,675 $

~40~

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

For the six-month periods ended Mask and
June 30, 2021 Semiconductor division Medical division Total
Revenue from external customer
contracts $ 2,766,656 $ 1,518 $ 2,768,174
Timing of revenue recognition
At a point in time $ 2,527,459 $ 1,518 $ 2,528,977
Revenue recognized gradually
over time 239,197 - 239,197
$ 2,766,656 $ 1,518 $ 2,768,174
For the six-month periods ended Mask and
June 30, 2020 Semiconductor division
Revenue from external customer
contracts $ 2,204,542
Timing of revenue recognition
At a point in time $ 1,962,100
Revenue recognized gradually
over time 242,442
$ 2,204,542
----- End of picture text -----

B. Contract liabilities

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

liabilities:
Contract asset Contract liability	June 30, 2021 December 31,2020 120,360 $ 93,809 $ 139,574 $ 99,418 $	June 30,2020 19,434 $ 103,131 $	January1,2020
			18,121 $
			39,856 $

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

For the three-month For the three-month periods ended June 30, 2021 periods ended June 30, 2020

The revenue recognized from the beginning balance of contract liability The revenue recognized from the beginning balance of contract liability		5,642 $ For the six-month periods ended June 30,2021 17,973 $	4,743 $ For the six-month periods ended June 30, 2020
			32,262 $

`(20)` Interest income

~41~

		For the three-month			For the three-month
	periods ended June 30,2021		periods ended June 30,2020
Interest income	$	1,081		$	1,212
Financial assets at amortised cost		28			37
Interest income
Other interest income		-	(		113)
	$	1,109		$	1,136
		For the six-month periods			For the six-month periods
		ended June 30, 2021			ended June 30, 2020
Interest income	$	1,732		$	2,701
Financial assets at amortised cost		58			74
Interest income
Other interest income		-			976
	$	1,790		$	3,751

`(21)` Other income

Rent income Dividend income Others Rent income Dividend income Others	For the six-month periods ended June 30,2021 11,257 $ 593 12,107 23,957 $ For the three-month periods ended June 30,2021 5,005 $ 593 3,702 9,300 $	For the six-month periods ended June 30,2020 For the three-month periods ended June 30,2020 1,965 $ - 3,272 5,237 $
		2,796 $ - 3,681 6,477 $

(22) Other gains and losses

~42~

Gains(Losses) on disposals of property, plant and equipment Gains(Loss) on disposal of investments Lease modification benefits Currency exchange gains(loss) Gains(Loss) on financial assets at fair value through profit or loss Other Non-operating loss- Investment Property Depreciation Other expenses Gains(Losses) on disposals of property, plant and equipment Gains(Loss) on disposal of investments Lease modification benefits Currency exchange gains(loss) Gains(Loss) on financial assets at fair value through profit or loss Other Non-operating loss- Investment Property Depreciation Other expenses	For the three-month periods ended June 30,2021	For the three-month periods ended June 30,2020 - $ 6,007) ( 696 13,129) ( 33,665 170) ( 1,644) ( 13,411 $ For the six-month periods ended June 30,2020 - $ 67,862 696 3,201) ( 318,427) ( 340) ( 2,247) ( 255,657) ($
	997) ($ 26,859 - 9,573) ( 70,030) ( 170) ( 6,856) ( 60,767) ($ For the six-month periods ended June 30,2021
	987) ($ 26,859 - 5,647) ( 247,232 1,718) ( 5,551) ( 260,188 $

`(23)` Finance costs

Interest expense Interest expense	For the three-month periods ended June 30,2021 19,108 $ For the six-month periods ended June 30,2021	For the three-month periods ended June 30,2020
		5,964 $ For the six-month periods ended June 30,2020
	37,733 $	11,271 $

`(24)` Expenses by nature

~43~

Employee benefit expenses Depreciation charges on property, plant and equipment Amortisation charges on intangible assets Employee benefit expenses Depreciation charges on property, plant and equipment Amortisation charges on intangible assets	For the three-month periods ended June 30,2021	For the three-month periods ended June 30,2020
	345,323 $ 130,201 2,380 For the six-month periods ended June 30,2021	144,453 $ 104,325 2,086 For the six-month periods ended June 30,2020
	665,333 $ 229,740 3,894	315,248 $ 210,780 4,611

(25) Employee benefit expense

Wages and salaries Employee stock options Labour and health insurance fees Pension costs Other personnel expenses Wages and salaries Employee stock options Labour and health insurance fees Pension costs Other personnel expenses	For the three-month periods ended June 30,2021	For the three-month periods ended June 30,2021	For the three-month periods ended June 30,2020
		250,738 $ 60,157 16,721 8,690 9,017 345,323 $ For the six-month periods ended June 30,2021	116,261 $ - 9,499 13,369) ( 5,458 117,849 $ For the six-month periods ended June 30,2020
		440,794 $ 169,174 27,139 13,761 14,465 665,333 $	236,087 $ 26,604 21,213 7,281) ( 12,021 288,644 $

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.
B. For the three months and six months ended June 30, 202 1 and 2020, employees’ compensation were accrued at $11,985, $0, $51,071 and $0, respectively; directors’ and supervisors’ remuneration were accrued at

~44~

$6,428, $0, $8,918 and $0, respectively. The aforementioned amounts were recognized in salary expenses.

The remuneration for the six-month period ended June 30, 2020 was a loss, so the employees’ compensation and directors’ remuneration were not estimated; for the six-month period ended June 30, 2021, based on the profit situation as of the current period 11.39% and 1.99% 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:

~45~

For the three-month For the three-month periods ended June 30, 2021 periods ended June 30, 2020

		periods ended June 30,2021 periods ended June 30,2020
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 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		50,747 $ 215 $ 50,747 215 6,639 6,726) ( 6,639 6,726) ( 57,386 $ 6,511) ($ For the six-month periods ended June 30,2021 For the six-month periods ended June 30, 2020 101,200 $ 29,695 $ 101,200 29,695 12,541 1,193) ( 12,541 1,193) ( 113,741 $ 28,502 $

B. The Company’s income tax returns through 2019 have been assessed and approved by the Tax Authority.
(27) Earnings per share

~46~

Basic earnings per share Profit attributable to the parent Basic earnings per share Profit attributable to the parent 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
		Amount after tax	Weighted average number of ordinary shares outstanding (share in thousands)
		Amount after tax	Weighted average number of ordinary shares outstanding (share in thousands)

		Amount after tax	Weighted average number of ordinary shares outstanding (share in thousands)

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)
	80,969) ($	201,241	0.40) ($

~47~

The weighted average number of shares outstanding for the three months and six months ended June 30, 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 June 30, 2021 and 2020 were 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 holds 41.43% of Xsense Technology Corporation. Xsense Technology Corporation’s subsidiary, Xsense Technology Co., Ltd., held a board of directors to re-elect the chairman on March 25, 2010. The general manager of TMC was elected by the company’s general manager. The general manager of the company led the new operating team to participate in the business decision-making and operating policies of Xsense Technology Corporation and its subsidiary, Xsense Technology Co., Ltd., including strategic decisions. Therefore, the company was included in the consolidated financial statements of the consolidated entity.
(A) The following table summarizes the consideration paid for Xsense Technology Corporation. and the fair values of the assets acquired and liabilities assumed at the acquisition date, as well as the non - controlling interest’s proportionate share of the recognized amounts of acquiree’s identifiable net assets at the acquisition date:

~48~

			April 1,2021
Fair value of equity interest in Xsense Technology Corporation held before the business combination		$	193,359
Non-controlling interests account for the identifiable net			97,319
			290,678
Fair value of the identifiable assets acquired and liabilities
assumed
Cash			22,508
Accounts Receivables			18,687
Other Receivables			6,690
Inventories			47,425
Prepayments			27,149
Other Current Assets			15,607
Properties, Plants and Equipment			99,856
Intangible Assets			8,574
Other non-Current Assets			96,544
Short-term loan	(		40,000)
Contract Liabilities	(		350)
Notes Payables	(		4,257)
Accounts Payables	(		14,617)
Other Payables	(		63,602)
Other Current Liabilities	(		12,085)
Other non-Current Liabilities	(		41,974)
Identifiable net assets			166,155
Goodwell		$	124,523

(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.
(C) Since the acquisition of Xsense Technology Corporation in April 1, 2021, the contribution to operating income and profit before tax were $37,788 and ($66,677). Assuming that Xsense Technology Corporation has been included in the consolidated reports since January 1, 202 1, the operating income and profit before tax of the Group are $2,789,271 and $229,667, respectively.
B. 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 statements

~49~

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 acquisition 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.
(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.

~50~

`(29)` Supplemental cash flow information

A. Investing activities with partial cash payments:

		For the six-month periods				For the six-month periods
		ended June 30,2021				ended June 30,2020
Purchase of property, plant and		518,420 $			$	791,706
equipment
Add: Opening balance of		53,809				103,845
payable on equipment
Ending balance of advanced on		160,522				63,044
equipment
Less: Opening balance of	(	5,608)		(		186,606)
advanced on equipment
Ending balance of payable on
equipment	(	56,820)		(		55,515)
Cash paid during the year		670,323 $			$	716,474
Financing activities that do		not affect cash flow：
		For the six-month periods				For the six-month periods
		ended June 30,2021				ended June 30, 2020
Dividend payable		$	-			252,714 $

B. Financing activities that do not affect cash flow ：

C. Weida Hi-Tech Co., Ltd.issued of new shares in Arpil 10, 2020 and May 15, 2020, the Group did not invest based on shareholding ratio , caused shareholding ratio reduced to 36.70% ; Weida Hi-Tech Co., Ltd held stockholder meeting in June 2, 2020,the Group noly have one the company's board of directors and loss of control over the company. (Please refer to Note 4(3) B. (Note 1)). The details of the consideration received from the transaction and assets and liabilities relating to the subsidiary are as follows:

~51~

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 June 30, 2021	Short-term borrowings 2,298,718 $ 1,065,536 - - 40,000 3,404,254 $	Long-term borrowings 1,732,083 $ 86,972 - - - 1,819,055 $	Lease obligations 506,926 $ 23,769) ( 2,722 2,722) ( 47,943 531,100 $	Guarantee Deposits Received Total liabilities from financing activities 5,129 $ 4,542,856 $ 1,742 1,130,481 - 2,722 - 2,722) ( - 87,943 6,871 $ 5,761,280 $	Guarantee Deposits Received Total liabilities from financing activities 5,129 $ 4,542,856 $ 1,742 1,130,481 - 2,722 - 2,722) ( - 87,943 6,871 $ 5,761,280 $
					5,761,280 $

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January 1, 2020 Changes in cash flow from financing Interest Expenses Interest Paid Issue dividend Other non-cash Change June 30, 2020	Short-term borrowings 804,938 $ 72,449 - - - - 877,387 $	Long-term borrowings 451,616 $ 368,480 - - - - 820,096 $	Lease obligations Guarantee Deposits Received 431,391 $ 1,544 $ 25,465) ( 77) ( 1,881 - 1,881) ( - - - 31,709 - 437,635 $ 1,467 $	Dividend payable Total liabilities from financing activities - $ 1,689,489 $ - 415,387 - 1,881 - 1,881) ( 252,714 252,714 - 31,709 252,714 $ 2,389,299 $

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 BKS TEC Corp. The chairman of the company’s subsidiary is the company’s chairman

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.

`(2)` Significant related party transactions

A. Operating revenue:

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For the three-month For the three-month periods ended June 30, 2021 periods ended June 30, 2020

Sales of goods: Other Related Parties $ 12,438 $ 13,481 For the six-month periods For the six-month periods ended June 30, 2021 ended June 30, 2020 Sales of goods: Other Related Parties $ 16,247 $ 20,493

Goods are sold based on the price lists in force and terms that would be available to third parties.

B. Receivables from related parties:

Trade receivables: Other Related Parties Other receivables: Xsense Technology Corporation Other Related Parties Total	June 30,2021 December 31,2020 June 30,2020 11,620 $ 6,599 $ 282 $ - 3,068 - - - 232 - 3,068 232 11,620 $ 9,667 $ 514 $

「 －
C. 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. Innova Vision INC.	June 30,2021 December - $ $ periods ended June 30,2021 - $ ended June 30, 2021 - $		31,2020 June 30,2020 - - $ periods ended June 30,2020 - $ ended June 30,2020 1,081 $

		- $ ended June 30, 2021		- $ ended June 30,2020
		- $		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 six-month period ended June 30, 2020, respectively.

D.Other asset

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Affiliated company	2021 2020 Account item Amount Amount Intangible assets 8,926 $ - $

`(3)` Key management compensation

Salaries and short-term employee benefits Post-employment benefits Other long-term employee benefits Share-based payment transaction Total Salaries and short-term employee benefits Post-employment benefits Other long-term employee benefits Share-based payment transaction Total		For the three-month periods ended June 30, 2021 5,889 $ 31 - - 5,920 $ For the six-month periods ended June 30,2021 14,259 $ 110 9,419 - 23,788 $	For the three-month periods ended June 30, 2021 5,889 $ 31 - - 5,920 $ For the six-month periods ended June 30,2021 14,259 $ 110 9,419 - 23,788 $	For the three-month periods ended June 30, 2020
				6,102 $ 107 - 5,200 11,409 $ For the six-month periods ended June 30,2020 13,048 $ 3,194 - 5,200 21,442 $
		5,920 $
		For the six-month periods ended June 30,2021
		14,259 $ 110 9,419 - 23,788 $

8 `、` PLEDGED ASSETS

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

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

Book value
Asset item June 30, 2021 December 31, 2020 June 30, 2020
Cash in Banks(Financial assets at $ 15,337 $ 11,111 $ 11,112
amortised cost-Non current)
Time deposits(Financial assets at 44,736 41,236 54,254
amortised cost)
Stocks of publicly traded and OTC 2,118,935 1,249,775 318,000
companies (recognized as
"Financial assets at fair value
through profit or loss")
- -
Treasury stocks 607,331
Buildings and structures (including 1,216,579 953,601 195,215
land)
Machinery and equipment and 1,274,259 1,146,700 1,132,969
Real estate investment 37,668 313,099 38,347
Other equipment 1,050 1,615 7,841
$ 5,315,895 $ 3,717,137 $ 1,757,738
----- End of picture text -----

Note ： The cost of pledged treasury stock were $607,331, carrying value were $1,908,755 for the six-month period ended June 30, 2021, respectively.

9 、 SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT COMMITMENTS

`(1)` Contingencies

None.

(2) Commitment
A. Signed but not yet paid equipment maintenance contracts

Capital expenditures have been contracted but have not yet June 30,2021 December 31, 2020 Machine maintenance 23,813 $ 31,851 $ June 30,2021 December 31,2020 Properties, Plants and Equipment 66,098 $ 153,985 $	occurred June 30,2020 62,008 $ June 30,2020 66,908 $

B. Capital expenditures have been contracted but have not yet occurred
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

The company passed the resolution of the board of directors on March 15, 2011 and approved the issuance of the third domestic unsecured conversion corporate

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bonds, which has been declared effective by the competent authority. The list ed issue raised NT$2,000,000 thousand on August 3, 2011. The purpose of this capital increase is to purchase machinery and equipment.

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

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	June 30,2021 December 31,2020 2,595,921 $ 2,135,413 $ 1,585,164 $ 1,036,658 $ 82,760 75,134 - 879 1,055,565 901,342 21,443 50,736 15,827 12,792 2,760,759 $ 2,077,541 $ 3,404,254 $ 2,298,718 $ 66 66 476,971 397,237 619,871 436,980 1,819,055 1,732,083 6,871 5,129 6,327,088 $ 4,870,213 $ 531,100 $ 506,926 $	June 30,2020
		853,731 $
		759,925 $ 200,657 578 844,121 186,750 9,199
		2,001,230 $
		877,387 $ 1,814 466,408 729,450 820,096 1,467
		2,896,622 $
		437,635 $

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

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(A) Market risks

i. 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:

June 30, 2021

(Foreign currency: functional currency) Financial assets Monetary items USD:NTD RMB:NTD JPY:NTD Financial liabilities Monetary items USD:NTD RMB:NTD JPY:NTD (Foreign currency: functional currency) Financial assets Monetary items USD:NTD RMB:NTD JPY:NTD Financial liabilities Monetary items USD:NTD RMB:NTD JPY:NTD	Exchange rate Book value (NTD) USD 29,443 27.865 820,429 $ CNY 144,019 4.310 620,722 JPY 86,782 0.252 21,869 USD 11,522 27.865 321,061 CNY 32,364 4.310 139,489 JPY 171,335 0.252 43,176 Foreign currency amount (In thousands) Exchange rate Book value (NTD) USD 27,563 28.480 784,994 $ CNY 108,362 4.377 474,300 JPY 83,532 0.276 23,055 USD 5,266 28.480 149,976 CNY 34,457 4.377 150,818 JPY 273,112 0.276 75,379 December 31,2020 Foreign currency amount (In thousands)	Exchange rate Book value (NTD) USD 29,443 27.865 820,429 $ CNY 144,019 4.310 620,722 JPY 86,782 0.252 21,869 USD 11,522 27.865 321,061 CNY 32,364 4.310 139,489 JPY 171,335 0.252 43,176 Foreign currency amount (In thousands) Exchange rate Book value (NTD) USD 27,563 28.480 784,994 $ CNY 108,362 4.377 474,300 JPY 83,532 0.276 23,055 USD 5,266 28.480 149,976 CNY 34,457 4.377 150,818 JPY 273,112 0.276 75,379 December 31,2020 Foreign currency amount (In thousands)
		784,994 $ 474,300 23,055 149,976 150,818 75,379

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June 30, 2020

(Foreign currency: functional currency) Financial assets Monetary items USD:NTD RMB:NTD JPY:NTD Financial liabilities Monetary items USD:NTD RMB:NTD JPY:NTD	USD 27,245 CNY 90,791 JPY 69,306 USD 7,925 CNY 50,683 JPY 161,393 Foreign currency amount (In thousands)	Exchange rate 29.630 4.191 0.2750 29.630 4.191 0.2750	Book value (NTD)
			807,273 $ 380,504 19,066 234,825 212,413 44,399

ii. 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 months and six months ended June 30, 2021 and 2020, amounted to ($9,573), ($13,129), ($5,647) and ($3,201).
iii. Analysis of foreign currency risk arising from significant foreign exchange variation:

Degree of variation Effect on profit or loss Effect on other comprehensive income 1% 8,204 $ - $ 1% 6,207 - 1% 219 - 1% 3,211) ( - 1% 1,395) ( - 1% 432) ( - For the six-monthperiods ended June 30,2021 Sensitivity Analysis	Degree of variation Effect on profit or loss Effect on other comprehensive income 1% 8,204 $ - $ 1% 6,207 - 1% 219 - 1% 3,211) ( - 1% 1,395) ( - 1% 432) ( - For the six-monthperiods ended June 30,2021 Sensitivity Analysis	Degree of variation Effect on profit or loss Effect on other comprehensive income 1% 8,204 $ - $ 1% 6,207 - 1% 219 - 1% 3,211) ( - 1% 1,395) ( - 1% 432) ( - For the six-monthperiods ended June 30,2021 Sensitivity Analysis

Degree of variation	Effect on profit or loss
1% 1% 1% 1% 1% 1%	8,204 $ 6,207 219 3,211) ( 1,395) ( 432) (	- $ - - - - -

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For the six-month periods ended June 30, 2020

	Effect on profit or loss Effect on other comprehensive income 8,073 $ - $ 3,805 - 191 - 2,348) ( - 2,124) ( - 444) ( - SensitivityAnalysis	Effect on profit or loss Effect on other comprehensive income 8,073 $ - $ 3,805 - 191 - 2,348) ( - 2,124) ( - 444) ( - SensitivityAnalysis
Degree of variation	Effect on profit or loss
1% 1% 1% 1% 1% 1%	8,073 $ 3,805 191 2,348) ( 2,124) ( 444) (	- $ - - - - -

Price risk

i. The Group’s equity securities, which are exposed to price risk, are the held financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income.
ii. 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 increase 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 sixmonth period ended June 30, 2021 and 2020 by $25,959 and $8,537, respectively, as a result of gains/losses on equity securities cla ssified 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

i. 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 six-month period ended June 30, 2021 and 2020, the Group’s borrowings at variable rate were mainly denominated in New Taiwan dollars and US Dollars.
ii. The Group’s borrowings are measured at amortized cost. The borrowings are periodically contractually reprised and to that extent are also exposed to the risk of future changes in market interest rates.

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iii. 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 six-month period ended June 30, 2021 and 2020 would have decreased / increased by $2,612 and $1,637, respectively. The main factor is that changes in interest expense result in floating-rate borrowings.
(B) Credit risk
i. Credit risk refers to the risk of financial loss to the Group arising f rom default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the accounts receivable based on the agreed terms, and the contract cash flows of debt instruments stated at amortised cost, at fair value through profit or loss and at fair value through other comprehensive income.
ii. The Group manages their credit risk taking into consideration the entire group’s concern. For banks and financial institutions, onl y independently rated parties with a minimum rating of 'A' are accepted. According to the Group’s credit policy, each local entity in the Group is responsible for managing and analysing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board of Directors. The utilisation of credit limits is regularly monitored.
iii. When the individual contract payment is not paid according to the expected transaction terms, the default has occurred.
iv. 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:
- (i) If the contract payments were past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.
- (ii) 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.
v. The following indicators are used to determine whether the credit impairment of debt instruments has occurred:
- (i) The issuer has suffered significant financial difficulties or is likely to enter bankruptcy or other financial restructuring.
- (ii) The disappearance of an active market for that financial asset because of financial difficulties;
- (iii) The issuer delays or does not pay for the interest or principal.
- (iv) Adverse changes in national or regional economic conditions that

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are expected to cause a default.

vi. 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.
vii. 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.
viii. The Group used the forecast ability to adjust historical and timely information to assess the default possibility of accounts receivable. As of June 30, 2021, December 31, 2020 and June 30, 2020, the provision matrix is as follows:

	Not past due	Not past due	Not past due		Up to 30 days	Up to 30 days	31 to	31 to	90 days	91	to 180 days Over 180 days	to 180 days Over 180 days	to 180 days Over 180 days	to 180 days Over 180 days	to 180 days Over 180 days			`Total`
June 30,2021
Expected loss rat			0.01~1%		0.01~1.95%			1.37~6.82%		4.52~21.60% 50.75~100%
Total book value	$		917,253		$	103,578	$		34,961	$		1,193 $			7,905 $			1,064,890
Loss allowance			-	(		1)	(		995)	(		535) (			7,794) (			9,325)
		Notpast 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)
June 30, 2020
Expected loss rat			0.01~1%			0.01~0.16%		1.52~8.95%			3.96~28.1%			48.62~100%
Total book value		$	713,065		$	96,783		$	25,043		$	19,227		$	808		$	854,926
Loss allowance			-		(	1)		(	1,756)		(	8,316)	(		732)	(		10,805)

viii. 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
Reversal of impairment loss	(	2,060)
Foreign currency conversion difference	(	14)
June 30	$	9,325
		2020
	Accounts receivable
January 1	$	7,759
Provision for impairment		3,228
Foreign currency conversion difference	(	182)
June 30	$	10,805

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i. 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.
ii. 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 June 30, 2021, December 31, 2020 and June 30, 2020, the Group held financial assets at monetary market of $1,621,175, $1,071,061 and $925,112, respectively. Those are expected to readily generate cash inflows for managing liquidity risk.
iii. The Group has the following undrawn borrowing facilities:

Floating rate Less than 1 year Over 1 year	June 30,2021 December 31,2020 319,190 $ 513,400 $ 220,573 363,851 539,763 $ 877,251 $	June 30,2020
		488,613 $ 377,573
		866,186 $

iv. The table below analyses the Group’s non-derivative financial liabilities and net-settled or gross-settled derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for 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:

Non-derivative financial liabilities:	abilities:
Less than 1 year June 30, 2021 Non-derivative financial liabilities Short-term borrowings 3,404,254 $ Notes payable 66 Accounts payable 476,971 Other payables 619,871 Lease liability 273,887 Long-term borrowings 193,176 Guarantee Deposits Received -	Less than 1 year	Between 1 and 2years	Between 2 and 5years	Over 5years
		- $ - - - 119,383 1,674,675 6,871	- $ - - - 206,844 - -	- $ - - - - - -

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

Less than 1 Between 1 and Between 2
year 2 years and 5 years Over 5 years
December 31, 2020
Non-derivative financial liabilities
----- End of picture text -----

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 June 30, 2020 Non-derivative financial liabilities Short-term borrowings 877,387 $ Notes payable 1,814 Accounts payable 466,408 Other payables 729,450 Lease liability 43,901 Long-term borrowings 22,781 Guarantee Deposits Received -	2,298,718 $ 66 397,237 436,980 247,430 100,647 - Less than 1 year	- $ - $ - $ - - - - - - - - - 106,921 235,857 - 1,698,976 - - 5,129 - - Between 1 and 2years Between 2 and 5years Over 5years - $ - $ - $ - - - - - - - - - 42,619 101,053 299,235 180,406 646,807 - 1,467 - -
		- $ - - - 42,619 180,406 1,467	- $ - - - 101,053 646,807 -	- $ - - - 299,235 - -

`(3)` Fair value information

A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability 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

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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:

Level 1 2,563,713 $ 500 2,564,213 $ Level 1 2,103,205 $ 500 2,103,705 $ Level 1 730,485 $ 500 730,985 $	Level 2 - $ - - $ Level 2 - $ - - $ Level 2 - $ - - $	$	Total 2,595,421 500 2,595,921 Total
		$

2,103,205 $ 500	- $ -		2,134,913 $ 500
2,103,705 $	- $		2,135,413 $
Level 1	Level 2 - $ -		Total
730,485 $ 500			853,231 $ 500
730,985 $	- $		853,731 $

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

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(B) Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniq ues 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 six-month period ended June 30, 2021 and 2020, there was no transfer between Level 1 and Level 2.
F. The following chart is the movement of Level 3 for the six-month period ended June 30, 2021 and 2020:

The following chart is the movement of Level 3for ended June 30, 2021 and 2020:	the six-month period
2021/01/01,2021/06/30 January 1, 2020 Acquired in the period June 30, 2020	Equitysecurities
	31,708 $
	Equitysecurities
	92,803 $ 29,943
	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:

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June 30, 2021

June 30, 2021
Fair value Unlisted shares $ 31,708 Nonderivative equity instrument: December 31,2020 Fair value Unlisted shares $ 31,708 Nonderivative equity instrument: June 30, 2020 Fair value Unlisted shares $ 57,746 Unlisted shares 65,000 Nonderivative equity instrument:	Valuation technique	Significant unobservable input Range (weighted average) Relationship of inputs to fair value Net asset value - The higher the net asset value, the higher the fair value unobservable input (weighted average) Relationship of inputs to fair value Net asset value - The higher the net asset value, the higher the fair value unobservable input (weighted average) Relationship of inputs to fair value Net asset value - The higher the net asset value, the higher the fair value Long-term revenue growth rate 2.5% the higher the long- term revenue growth rate, the higher the fair value
	Net asset value Valuation technique
	Net asset value Valuation technique
	Net asset value Discounted cash flow		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 impact to income or other comprehensive income is:

June 30, 2021

Input Financial assets Equity instrument Net asset value Equity instrument Long-term revenue growth	Input	Change		Recognised inprofit or loss	Recognised inprofit or loss		Recognised in other comprehensive income	Recognised in other comprehensive income	Recognised in other comprehensive income
				Favourable change	Unfavourable change		Favourable change		Unfavourable change
		± 1% ± 1%		317 $ - 317 $	317) ($ - 317) ($		- $ - - $		- $ - - $

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		Recognised
	Favourable change		Unfavourable change	Favourable change
± 1% ± 1%	577 $ 468 1,045 $		577) ($ 481) ( 1,058) ($	- $ - - $

`(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 co st exceeding NT$300 million or 20% of the Company’s paid-in capital: Please refer to table 4.

~68~

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.

`(2)` Information on investees

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

`(3)` Information on investments in Mainland China

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

~69~

`(2)` Segment information

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

For the six-month period ended June 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
	2,766,656 $ 62,489) ($ 334,510 $ 220,012) ($ 3,823) ($ 37,328) ($ 1,779 $ 61,873) ($ 10,736,267 $

For the six-month period ended June 30, 2020 ：

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 2,204,542 $ 67,749 $ 160,497) ($ 210,780) ($ 4,611) ($ 11,271) ($ 3,751 $ 19,928) ($ 6,499,393 $	Mask and Semiconductor division		Medical division Total - $ 2,204,542 $ - $ 67,749 $ - $ 160,497) ($ - $ 210,780) ($ - $ 4,611) ($ - $ 11,271) ($ - $ 3,751 $ - $ 19,928) ($ - $ 6,499,393 $

`(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

~70~

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

~71~

`TAIWAN MASK CORPORATION AND SUBSIDIARIES`

`FINANCINGS PROVIDED`

FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 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` `4` `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. Youe Chung Capital Corporation Youe Chung Capital Corporation	Youe Chung Capital Corporation Other Accounts Receivables`－`Related Parties Miracle Technology CO., LTD. Other Accounts Receivables`－`Related Parties Aptos Technology INC. Other Accounts Receivables`－`Related Parties Innova Vision INC. Other Accounts Receivables`－`Related Parties Aptos Technology INC. Other Accounts Receivables`－`Related Parties Aptos Technology INC. Other Accounts Receivables`－`Related Parties Innova Technology Company Other Accounts Receivables`－`Related Parties `Innova Vision` `Kabushiki Kaisha` Other Accounts Receivables`－`Related Parties Aptos Technology INC. Other Accounts Receivables`－`Related Parties `Xsense Technology C`Other Accounts Receivables`－`Related Parties		`Y` `Y` `Y` `Y` `Y` `Y` `Y` `Y` `Y` `Y`	`300,000` `$` `100,000` `140,000` `180,000` `30,000` `120,000` `10,507` `7,817` `370,000` `100,000`	`-` `$` `-` `-` `-` `-` `120,000` `-` `-` `350,000` `100,000`	`-` `$` `-` `-` `-` `-` `120,000` `-` `-` `350,000` `100,000`	`2%` `2%` `2%` `2%` `2%` `2%` `NA` `NA` `2%` `2%`	The need for short-term financing The need for short-term financing The need for short-term financing The need for short-term financing The need for short-term financing The need for short-term financing Transactions Transactions The need for short-term financing The need for short-term financing	`-` `$` `-` `-` `-` `-` `-` `-` `-` `-`	Ccapital turnover Ccapital turnover Ccapital turnover Ccapital turnover Ccapital turnover Ccapital turnover `-` `-` Ccapital turnover Ccapital turnover	`-` `$` `-` `-` `-` `-` `-` `-` `-` `-`	`-` `-` `-` `-` `-` `-` `-` `-` `-`	`-` `$` `-` `-` `-` `-` `-` `-` `-` `-`	`1,554,748` `$` `1,554,748` `1,554,748` `1,554,748` `28,831` `148,770` `90,898` `90,898` `1,766,504` `1,766,504`	`1,554,748` `$` `1,554,748` `1,554,748` `1,554,748` `28,831` `148,770` `-` `-` `1,766,504` `1,766,504`	`註2` `註2` `註2` `Note2` `Note3` `Note4` `Note5` `Note5` `Note6` `Note6`

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.
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
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.

Note 6: Subsidiary - Youe Chung Capital Corporation 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 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.

`TAIWAN MASK CORPORATION AND SUBSIDIARIES`

ENDORSEMENTS/GUARANTEES PROVIDED

`FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2021`

Table 2

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

Ratio of

									Ratio of
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	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	Guarantee Provided to Subsidiaries in Mainland China	Note
		Name	Nature of Relationship
`0` `1` `2`	Taiwan Mask C i Adl Engineering INC. Miko-China Enterprise (Shanghai) Co., Ltd.	Miracle Technology CO Aptos Technology INC. Miracle Technology CO., LTD.	`2` `3` `3`	`229,550` `$` `20,899` `129,300`	`171,210` `$` `20,000` `122,752`	`167,190` `$` `20,000` `120,680`	`-` `$` `20,000` `107,000`	`-` `$` `20,000` `120,680`	`4.30%` `27.75%` `48.27%`	`1,554,748` `$` `28,831` `100,008`	`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.

Table 3

TAIWAN MASK CORPORATION AND SUBSIDIARIES

MARKETABLE SECURITIES HELD

(EXCLUDING INVESTMENTS IN SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES) June 30, 2021

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

Held Company	Marketable Securities Type and Name	Relationship with the Company	Financial Statement Account	For th	e six-monthperiods ended June 30,	e six-monthperiods ended June 30,	2021	Note
				Shares	CarryingValue	%	Fair Value
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 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 Taiwan Calsonic Co.,Ltd 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 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 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 60,000 1,280,500 37,081,440 1,300,000 6,319,914 1,000,000 30,000,000 22,150,000 - 25,000 2,150,000 860,000 1,097,092 187,915 100,000 50,000	- $ - 7,132 105,145 58,600 227 39,632 3,100,008 4,576 82,854 10,000 1,593,000 648,995 10,000 3,225 8,127 23,908 - - - 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% - - - 1.34% 8.08% 3.13% 9.52% -	- $ - 7,132 105,145 58,600 227 39,632 3,100,008 4,576 82,854 10,000 1,593,000 648,995 10,000 3,225 8,127 23,908 - - - 500

TAIWAN MASK CORPORATION AND SUBSIDIARIES

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS

FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2021

Table 4

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

Intercompany Transactions

No.

Nature of Relationship Financial Statements

Percentage of Consolidated Net Revenue or Total Assets

No.			Nature of Relationship	Financial Statements			Revenue or Total Assets
(Note 1)	CompanyName	Related Party	(Note 2)	Account	Amount	Terms	(Note 3)
0 0 0 0 0 1 1 1 1 2 3 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 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 Miko Technology co., Ltd. Miko Technology co., Ltd. Miracle 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 3	Endorsements/Guarantees Sales Trade receivables Other receivables Rental income Other receivables Sales Other current liabilities Sales Endorsements/Guarantees Sales Sales Trade receivables Other receivables Endorsements/Guarantees	167,190 19,300 9,982 14,931 33,184 120,000 4,390 4,376 25,715 120,680 2,998 2,612 2,085 350,000 20,000	The same with general Month-end 60 days Month-end 60 days The same with general The same with general Pay by agreed time Month-end 30 days Month-end 30 days Pay by agreed time The same with general Month-end 30 days Month-end 30 days Month-end 30 days The same with general The same with general	1.51% 0.70% 0.09% 0.14% 1.20% 1.09% 0.16% 0.04% 0.93% 1.09% 0.11% 0.09% 0.02% 3.17% 0.18%

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.

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 SIX-MONTH PERIOD ENDED JUNE 30, 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	Balan	ce as of June 3	0,2021	Net Income (Loss) of the Investee	Share of Profit/Loss of Investee	Note
				March 31,2021	December 31,2020	Shares	of Ownership	Carrying Value
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, manufacturing 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, manufacturing 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 equipment 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 59,629 317,965 134,928 151,533 375,809 - 29,795 29,648 10,012 - - 37 64,650 60,157 - 84,204 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 3,221,223 95,818,181 33,732,108 94,371 6,255,069 - 10,000,000 78,000,000 14,316,212 - - 10,000 3,000,000 1,000,000 1,000,000 6,400 5,900	100% 100% 25.54% 100% 36.70% 91.53% 6.55% 41.43% 38.16% 0.23% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 52.03% 47.97%	5,240 $ 1,316,252 76,847 408,034 79,570 297,838 19,725 164,532 114,908) ( 877 35,869 - - - 209,877 - - 10,063 2,400) ( 1,596 157 1,564 1,442	1 $ 1,733,407 39,835) ( 20,550 15,858) ( 45,333) ( 39,835) ( 169,172) ( 152,911) ( 45,333) ( 3,353) ( - - - 5,503 23,239 23,239 27,008) ( 857 13,175) ( 1) ( 14,497) ( 14,497) (	1 $ 129,635 10,667) ( 20,550 5,820) ( 39,869) ( 2,923) ( 70,086) ( 58,355) ( 1,058) ( 1,750) ( - - - 5,503 23,239 23,239 27,008) ( 857 13,175) ( 1) ( 1,876) ( 12,844) (	Note1 Note2 Note2

Note: As of June 30, 2021, the funds for shares have not been remitted.

TAIWAN MASK CORPORATION AND SUBSIDIARIES

INFORMATION ON INVESTMENT IN MAINLAND CHINA

FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 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	Investme	nt 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	Ending Balance of Accumulated Inward Remittance of Earnings	Note
					Outflow	Inflow
Miko-China Enterprise (Shanghai) Co., Ltd. Miracle International Enterprise(ShanHai) Co., Ltd. Sichuan Miracle Power Technology Co.,	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	3,283 $ 10,215 51,720	1 1 2	3,283 $ 10,215 -	- $ - -	- $ - -	3,283 $ 10,215 -	40,143 $ 23,554 4,119	100% 100% 100%	40,143 $ 23,554 4,119	250,021 $ 73,248 52,028	- $ - -	2(2)B 2(2)B,4 2(2)B

Company Name Ending Balance of Accumulated Investment in Mainland China Miko-China Enterprise (Shanghai) Co., Ltd. 3,283 $ Miracle International Enterprise(ShanHai) Co., Ltd. 10,215 Sichuan Miracle Power Technology Co., Ltd. -	Investment Amounts Authorized by Investment Commission, MOEA Upper Limit on Investment Authorized by Investment Commission,MOEA
	3,283 $ $ 223,155 10,215 223,155 - 223,155

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.

TAIWAN MASK CORPORATION AND SUBSIDIARIES

INFORMATION ON MAJOR SHAREHOLDERS

June 30, 2021

Table 7

Shareholders

Total Shares Owned Ownership Percentage

Youe Chung Capital Corporation

14.67%

37,801,440

AI assistant

TMC — Interim / Quarterly Report 2021

52014_rns_2021-12-28_8c5d3f79-29cb-479f-95a8-8b95fe86b19c.pdf

TAIWAN MASK CORPORATION AND SUBSIDIARIES

Consolidated Financial Statements

Independent Auditors’ Review Report

Introduction

Scope of Review

Basis for Qualified Conclusion

Qualified Conclusion

Financial Supervisory Commission.

Taiwan Mask Corporation and Subsidiaries Consolidated Balance Sheets

Jun., 30[th] 2020 and 2019; Dec., 31[st] 2019

Taiwan Mask Corporation and Subsidiaries Consolidated Balance Sheets

Jun., 30[th] 2020 and 2019; Dec., 31[st] 2019

Taiwan Mask Corporation and Subsidiaries Consolidated Comprehensive Income Statements

For the six-month periods ended June 30, 2021 and 2020

Taiwan Mask Corporation and Subsidiaries Consolidated Changes of Equities Statements For the Second 2 Quarter Ended Jun., 30[th] , 2021 and 2020

For the three-month period ended June 31, 2021 and 2020

Taiwan Mask Corporation and Subsidiaries Consolidated Statements of Cash Flow

For the three-month period ended June 31, 2021 and 2020

TAIWAN MASK CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1、 HISTORY AND ORGANISATION

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

3 、 APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATION

(3) International Financial Reporting Standards issued by IASB but not yet endorsed by the FSC

4 、 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(1) Compliance statement

(3) Basis of consolidation

Statements of comprehensive income

(4) Employee benefits

Pensions

Defined benefit plans

(5) Income tax

5 、 CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF

ASSUMPTION UNCERTAINTY

6 、 DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

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

(3) Financial assets at amortized cos

(6) Investments accounted for using equity method

(7) Property, plant and equipment

(8) Leasing arrangements - lessee

－ (9) Leasing arrangements lessor

(10) Investment Property

Buildings

(12) Other Payables

- (13) Long term borrowings

(14) Pensions

(15) Share capital

(16) Capital surplus

(17) Retained earnings

(18) Other equity items

(19) Operating revenue

A. Disaggregation of revenue from contracts with customers

B. Contract liabilities

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

(20) Interest income

(21) Other income

(23) Finance costs

(24) Expenses by nature

(26) Income tax

(28) Business combinations

(29) Supplemental cash flow information

A. Investing activities with partial cash payments:

B. Financing activities that do not affect cash flow ：

7 、 RELATED PARTY TRANSACTIONS

(1) Names of related parties and relationship

(2) Significant related party transactions

A. Operating revenue:

(3) Key management compensation

8 、 PLEDGED ASSETS

(1) Contingencies

10 、 SIGNIFICANT DISASTER LOSS

None.

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

12 、 OTHERS

(1)Capital management

(2) Financial instruments

TMC Interim / Quarterly Report 2021

`1、 HISTORY AND ORGANISATION`

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

3 `、` APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATION

`(3)` International Financial Reporting Standards issued by IASB but not yet endorsed by the FSC

4 `、` SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

`(1)` Compliance statement

`(3)` Basis of consolidation

`(4)` Employee benefits

`(5)` Income tax

5 `、` CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF

6 `、` DETAILS OF SIGNIFICANT ACCOUNTS

`(1)` Cash and cash equivalents

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

`(3)` Financial assets at amortized cos

`(6)` Investments accounted for using equity method

`(7)` Property, plant and equipment

`(8)` Leasing arrangements - lessee

`－ (9)` Leasing arrangements lessor

`(10)` Investment Property

`(12)` Other Payables

- `(13)` Long term borrowings

`(14)` Pensions

`(15)` Share capital

`(16)` Capital surplus

`(17)` Retained earnings

`(18)` Other equity items

`(19)` Operating revenue

`(20)` Interest income

`(21)` Other income

`(23)` Finance costs

`(24)` Expenses by nature

`(26)` Income tax

`(28)` Business combinations

`(29)` Supplemental cash flow information

7 `、` RELATED PARTY TRANSACTIONS

`(1)` Names of related parties and relationship

`(2)` Significant related party transactions

`(3)` Key management compensation

8 `、` PLEDGED ASSETS

`(1)` Contingencies

10 `、` SIGNIFICANT DISASTER LOSS

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

12 `、` OTHERS

`(1)Capital management`

`(2)` Financial instruments

`(3)` Fair value information

`(4)` Other

13 `、` SUPPLEMENTARY DISCLOSURES

`(1)` Significant transactions information

`(2)` Information on investees

`(3)` Information on investments in Mainland China

`(4)` Major shareholders information

14 `、` SEGMENT INFORMATION

`(1)` General information

`(2)` Segment information

`(3)` Reconciliation for segment income (loss)

`TAIWAN MASK CORPORATION AND SUBSIDIARIES`

`FINANCINGS PROVIDED`

`TAIWAN MASK CORPORATION AND SUBSIDIARIES`

`FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2021`