TSE: 2451

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Transcend Information, Inc. Annual Report 2020

Notice to readers

This English-version annual report is a summary translation of the Chinese version and is not an official document of the shareholders’ meeting. If there is any discrepancy between the English and Chinese versions, the Chinese version shall prevail.

Printed on May 14, 2021

Transcend Information, Inc. annual report is available at https://tw.transcend-info.com/about/stockholders Taiwan Stock Exchange Market Observation Post System: http://mops.twse.com.tw/mops/web/t57sb01_q5

Spokesperson

Name: Hsiao, Sheng-Yin

Title: Financial and Accounting Officer

Tel: (02) 2792-8000 #7533 E-mail: [email protected]

Deputy Spokesperson

Name: Jenny Lin Title: Director of Brand Marketing Tel: (02) 2792-8000 #7533 E-mail: [email protected]

Headquarters and Plant

Headquarters: No. 70, XingZhong Rd., NeiHu Dist., Taipei 114, Taiwan Plant: No. 70, XingShan Rd., NeiHu Dist., Taipei 114, Taiwan Tel: (02) 2792-8000 Fax: (02) 2792-3375 (Headquarters) (02) 2792-0517 (Plant)

Stock Transfer Agent

CTBC Bank Transfer Agency Department Address: 5F., No.83, Sec. 1, Chongqing S. Rd., Zhongzheng Dist., Taipei 100, Taiwan (R.O.C.)

Tel: (02) 6636-5566 Website: http://www.ctbcbank.com

Auditors

PricewaterhouseCoopers Taiwan Auditors: Lin,Chun-Yao, Chen,Chin-Chang Address: 27F, No. 333, Sec. 1, Keelung Rd., Xinyi Dist., Taipei 110, Taiwan Tel: (02) 2729-6666 Website: http://www.pwc.com/tw

Corporate Website : https://tw.transcend-info.com/

1.		LETTER TO SHAREHOLDERS ------------------------------------------------------------------------------------------ 1	LETTER TO SHAREHOLDERS ------------------------------------------------------------------------------------------ 1	LETTER TO SHAREHOLDERS ------------------------------------------------------------------------------------------ 1	LETTER TO SHAREHOLDERS ------------------------------------------------------------------------------------------ 1
2.		COMPANY PROFILE ------------------------------------------------------------------------------------------------------- 2
	2.1.	DATE OFINCORPORATION-------------------------------------------------------------------------------------------------------- 2
	2.2.	COMPANYHISTORY--------------------------------------------------------------------------------------------------------------- 2
3.		CORPORATE GOVERNANCE REPORT ------------------------------------------------------------------------------ 7
	3.1.	ORGANIZATION-------------------------------------------------------------------------------------------------------------------- 7
	3.2.	BACKGROUNDINFORMATION ONDIRECTORS, GENERALMANAGERS, VICEGENERALMANAGERS,
		ASSISTANTMANAGERS ANDHEADS OFVARIOUSDEPARTMENT ANDBRANCHES--------------------------------------- 9
	3.3.	IMPLEMENTATION OFCORPORATEGOVERNANCE---------------------------------------------------------------------------22
	3.4.	INFORMATION ON	CPAFEES----------------------------------------------------------------------------------------------------59
	3.5.	REPLACEMENT OFCPA ----------------------------------------------------------------------------------------------------------59
	3.6.	WHERE THE COMPANY'S CHAIRMAN,GENERAL MANAGER,OR ANY MANAGERIAL OFFICER IN CHARGE OF
		FINANCE OR ACCOUNTING MATTERS HAS IN THE MOST RECENT YEAR HELD A POSITION AT THE ACCOUNTING
		FIRM OF ITS CERTIFIED PUBLIC		ACCOUNTANT OR AT AN AFFILIATED ENTERPRISE OF SUCH ACCOUNTING FIRM,
		THE NAME AND POSITION OF THE PERSON,AND THE PERIOD DURING WHICH THE POSITION WAS HELD,SHALL
		BE DISCLOSED. --------------------------------------------------------------------------------------------------------------------59
	3.7.	ANY TRANSFER OF EQUITY INTERESTS AND/OR PLEDGE OF OR CHANGE IN EQUITY INTERESTS BY A DIRECTOR,
		MANAGERIAL OFFICER,OR SHAREHOLDER WITH A STAKE OF MORE THAN10PERCENT DURING THE MOST
		RECENT FISCAL YEAR AND DURING THE CURRENT FISCAL YEAR UP TO THE DATE OF PUBLICATION OF THIS
		ANNUALREPORT.	-----------------------------------------------------------------------------------------------------------------60
	3.8.	RELATIONSHIP INFORMATION,IF AMONG THE COMPANY'STOP10SHAREHOLDERS ANY ONE IS A RELATED
		PARTY,SPOUSE OR A RELATIVE		WITHIN THE SECOND DEGREE OF KINSHIP OF ANOTHER	--------------------------------61
	3.9.	THE TOTAL NUMBER OF SHARES AND TOTAL EQUITY STAKE HELD IN ANY SINGLE ENTERPRISE BY THE
		COMPANY,ITS DIRECTORS,MANAGERIAL OFFICERS,AND ANY COMPANIES CONTROLLED EITHER DIRECTLY OR
		INDIRECTLY BY THE COMPANY.		-------------------------------------------------------------------------------------------------70
4.		CAPITAL OVERVIEW ----------------------------------------------------------------------------------------------------- 71
	4.1.	CAPITAL ANDSHARES------------------------------------------------------------------------------------------------------------71
	4.2.	STATUS OFCORPORATEBONDS------------------------------------------------------------------------------------------------75
	4.3.	STATUS OFPREFERREDSHARES------------------------------------------------------------------------------------------------75
	4.4.	STAUTS OFOVERSEASDEPOSITARYRECEIPTS-------------------------------------------------------------------------------75
	4.5.	STATUS OFEMPLOYEESTOCK		OPTION----------------------------------------------------------------------------------------75
	4.6.	STATUS OFNEWRESTRICTEDEMPLOYEESHARES--------------------------------------------------------------------------75
	4.7.	STATUS OFNEWSHARESISSUANCE INCONNECTION WITHMERGERS ORACQUISITIONS----------------------------75
	4.8.	IMPLEMENTATION OF THECAPITALALLOCATIONPLANS------------------------------------------------------------------75
5.		OPERATIONAL HIGHLIGHTS ----------------------------------------------------------------------------------------- 76
	5.1.	BUSINESSACTIVITIES------------------------------------------------------------------------------------------------------------76
	5.2.	MARKETS ANDOVERVIEW OFPRODUCTION ANDSALES-------------------------------------------------------------------86
	5.3.	THENUMBER OFEMPLOYEES,		AVERAGESERVICEYEAR, AVERAGEAGE ANDEDUCATIONALLEVEL
		DISTRIBUTIONRATIO INLASTTWOYEARS AND UP TO THEPUBLICATIONDATE OF THISANNUALREPORT--------96
	5.4.	ENVIRONMENTAL	PROTECTIONEXPENDITURES-----------------------------------------------------------------------------97
	5.5.	LABORRELATIONS---------------------------------------------------------------------------------------------------------------97
	5.6.	IMPORTANTCONTRACTS--------------------------------------------------------------------------------------------------------98
6.		FINANCIAL INFORMATION -------------------------------------------------------------------------------------------- 99
	6.1.	CONDENSEDBALANCESHEET		ANDSTATEMENT OFCOMPREHENSIVEINCOME FOR THEMOSTRECENTFIVE
		YEARS– BASED ONIFRS -------------------------------------------------------------------------------------------------------99
	6.2.	FINANCIALANALYSIS FOR THEMOSTRECENTFIVEYEARS– BASED ONIFRS -------------------------------------- 103
	6.3.	AUDITCOMMITTEE’SREVIEW		REPORT FOR THEMOSTRECENTYEAR------------------------------------------------ 107
	6.4.	CONSOLIDATEDFINANCIALSTATEMENTS FOR THEYEARSENDEDDECEMBER31, 2020AND2019,AND
		INDEPENDENTAUDITORS’ REPORT------------------------------------------------------------------------------------------- 108
	6.5.	FINANCIALSTATEMENTS OFPARENTCOMPANYONLY FOR THEYEARSENDEDDECEMBER31, 2020AND
		2019,ANDINDEPENDENTAUDITORS’ REPORT----------------------------------------------------------------------------- 177
	6.6.	THECOMPANY SHOULD DISCLOSE THE FINANCIAL IMPACT TO THECOMPANY IF THECOMPANY AND ITS
		AFFILIATED COMPANIES HAVE INCURRED ANY FINANCIAL OR CASH FLOW DIFFICULTIES IN2020AND AS OF
		THE DATE OF THIS	ANNUALREPORT. ---------------------------------------------------------------------------------------- 244

7.		REVIEW AND ANALYSIS OF FINANCIAL POSITION, FINANCIAL PERFORMANCE, AND
		RISK MANAGEMENT --------------------------------------------------------------------------------------------------- 244
	7.1.	ANALYSIS OFFINANCIALPOSITION------------------------------------------------------------------------------------------ 244
	7.2.	ANALYSIS OFFINANCIALPERFORMANCE----------------------------------------------------------------------------------- 245
	7.3.	ANALYSIS OFCASHFLOW----------------------------------------------------------------------------------------------------- 247
	7.4.	THEEFFECTUPONFINANCIALOPERATIONS OFANYMAJORCAPITALEXPENDITURESDURING THEMOST
		RECENTFISCALYEAR--------------------------------------------------------------------------------------------------------- 247
	7.5.	REINVESTMENTPOLICY FOR THEMOSTRECENTFISCALYEAR,THEMAINREASONS FORPROFITS OR
		LOSSESGENERATEDTHEREBY, IMPROVEMENTPLANS,ANDINVESTMENTPLANS FOR THECOMINGYEAR------ 247
	7.6.	ANALYSIS OFRISKMANAGEMENT------------------------------------------------------------------------------------------- 248
	7.7.	OTHERMATERIALMATTERS-------------------------------------------------------------------------------------------------- 252
8.		SPECIAL DISCLOSURE ------------------------------------------------------------------------------------------------ 254
	8.1.	INFORMATION OFAFFILIATEDCOMPANIES--------------------------------------------------------------------------------- 254
	8.2.	PRIVATEPLACEMENT OFSECURITIES IN2020AND AS OF THE DATE OF THISANNUALREPORT--------------------- 257
	8.3.	STATUS OF THECOMPANY’SCOMMONSHARESHELD ANDDISPOSED BYSUBSIDIARIES IN2020AND AS OF
		THE DATE OF THISANNUALREPORT----------------------------------------------------------------------------------------- 257
	8.4.	OTHERNECESSARYSUPPLEMENT-------------------------------------------------------------------------------------------- 257
9.		LATEST MATTERS WITH MATERIAL IMPACTS ON SHAREHOLDERS’ INTERESTS OR
		SECURITY PRICES INDICATED IN PARAGRAPH 3 SUBPARAGRAPH 2 OF ARTICLE 36 OF
		THE SECURITIES AND EXCHANGE ACT IN 2020 AND AS OF THE DATE OF THIS ANNUAL
		REPORT --------------------------------------------------------------------------------------------------------------------- 257

1. Letter to Shareholders

Dear Shareholders,

Last year, the world seemed to come to a complete standstill thanks to COVID-19. End user demand and the industrial supply chain both faced disruptions. However, Transcend deployed its R&D and manufacturing in Taiwan to keep a sense of corporate continuity even in the face of these headwinds. During the first half of last year, strict border control policies implemented by many countries were a fundamental challenge to our efforts at channel marketing. In the latter half of the year, sales recovered globally, but raw material prices continued to fluctuate. Transcend has remained steadfast throughout, trying to mitigate the downsides with its strengths in pricing and service, and its long-term partnership with clients. I want to express my profound gratitude to our shareholders, clients, business partners, and employees, who have shown their commitment to Transcend in this difficult time.

Transcend’s consolidated revenue totaled NT$11.4 billion in 2020. Consolidated gross profit totaled NT$2.47 billion, with a gross profit rate of 21.6 percent. Operating income totaled NT$1.21 billion. Income before tax totaled NT$1.50 billion. Net income totaled NT$1.20 billion. EPS was NT$2.79 calculated at the weighted average of outstanding share capital of NT$4.3 billion.

5G connectivity continues to push forward server demand. Edge computing, meanwhile, has come into the mainstream as a building block for AIoT applications including smart manufacturing, smart monitoring, and smart cities. Transcend’s focus on embedded storage solutions and strategic product development motivated us to release high-endurance, high-speed products for industrial applications that operate stably across a wide temperature range (-40℃~85℃). We introduced 96-layer 3D NAND flash in our industrial SSDs and launched DDR4-3200 memory modules to support a wide variety of applications. In the consumer market, Transcend grew its strategic product lines with high added value, including the DrivePro 620 dual camera dashcam, the ESD370C ruggedized portable SSD, the JetFlash 920 and JetFlash 930C high-speed USB flash drives, and the CFexpress 820 Type B memory card tailor-made for professional photographers and videographers. Products like these are meeting the diversified demands of our consumers.

Transcend has long honed its industrial brand image by placing digital advertisements around the world. In the consumer market, we have invested heavily in e-commerce platforms to create a closer connection between consumers and the Transcend brand. Through e-commerce, virtual trade shows, and social media, Transcend has maintained a positive brand image despite interruptions to our traditional campaigns brought on by the pandemic. These efforts proved their merit when Transcend was listed as one of Interbrand’s Top 25 Best Taiwan Global Brands in 2020 for the 14[th] year in a row, and its cutting-edge devices earned the 2021 Taiwan Excellence Award for the 17[th] consecutive year. Transcend is also active in social engagement in Taiwan. We support youth athletic activities such as the High School Basketball League and High School Volleyball League, demonstrating our commitment to corporate social responsibility.

In 2021, we will continue to accelerate product development and expand our manufacturing capacity while maintaining a stable product supply. We will continue to pursue greater client value by delivering competitive storage products. Thank you for your investment and continued interest in Transcend. We look forward to growing together into a better tomorrow.

Chairman: Shu, Chung-Won

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2. Company Profile

2.1. Date of Incorporation

Date of Incorporation: August 30, 1989.

2.2. Company History

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Year Milestones
-
Transcend Information, Inc. is founded by Peter Shu in Taipei,
Taiwan.
1989 - The first products offered are the “JetMate” laser printer driver
and the “KeyPro” software protection system.
- Authorized and paid-in capital: NT$ 10,000,000
-
Transcend USA opens in Los Angeles, California.
1990 - Transcend begins manufacturing Taiwan's earliest laser printer
controller for producing Chinese characters.
-
Transcend begins to offer PCRAM expansion cards for desktops.
1991
- Authorized and paid-in capital: increased to NT$ 20,000,000
-
Transcend opens its Hamburg, Germany office.
1992 - Transcend begins manufacturing software security solutions.
- Authorized and paid-in capital: increased to NT$ 60,000,000
-
Transcend is recognized as one of Taiwan's remarkable Small
1993 and Medium Enterprises (SMEs) for outstanding performance in
information application.
-
Transcend begins to offer PCMCIA expansion products for
laptop computers.
1994
- Transcend's annual revenue totaled NT$1.5 billion, up 135%.
- Authorized and paid-in capital: increased to NT$ 102,000,000
-
Transcend begins to offer PCMCIA flash card products.
1995 - Transcend's annual revenue totaled NT$2.4 billion, up 62%.
- Authorized and paid-in capital: increased to NT$ 162,000,000
-
Transcend expands its European operations by opening an office
in Rotterdam, the Netherlands.
- Transcend launches proprietary memory products for fax
1996
machines and video game consoles.
- Transcend opens distribution centers and bonded factories,
facilitating foreign trade.
-
Transcend opens a branch office in Tokyo, Japan.
- Transcend launches its first digital still camera memory
products.
- Transcend is awarded ISO-9001 Certification.
- Transcend merged Won Deng Co., Ltd. Authorized and paid-in
1997
capital: increased to NT$ 182,000,000.
- Executed capital increase through capitalization of retained earnings of NT$
182,000,000 and cash capital increase of NT$ 60,700,000. The authorized
and paid-in capital was increased to NT$ 424,700,000. In addition, the
retroactive handling of public offering was performed.
-
Transcend receives the National Award of Outstanding SMEs.
1998 - Executed capital increase through capitalization of retained earnings of NT$
84,940,000 and capital increase through capitalization of capital reserves of
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NT$ 42,470,000. The authorized and the paid-in capital was increased to
NT$ 552,110,000.
-
Transcend begins offering PC133 and Rambus memory modules.
- Transcend receives Taiwan's 2nd annual Rising Star Award for
outstanding performance in foreign trade.
- Transcend opens its first two retail stores in Taipei.
1999 - Transcend's annual revenue totaled NT$4.3 billion, up 34%.
- Executed capital increase through capitalization of retained earnings of NT$
331,266,000 and capital increase through capitalization of capital reserves of
NT$ 55,211,000. The authorized capital was NT$ 2,000,000,000 and the
paid-in capital was increased to NT$ 938,587,000.
- Transcend opens its retail store in Hong Kong.
- Transcend launches its first DDR memory products.
- Transcend moves into E-commerce by offering on-line direct B2C sales of
Transcend-brand products in Taiwan.
- Transcend's annual revenue totaled NT$5.74 billion, up 42%.
2000
- Executed capital increase through capitalization of retained earnings of NT$
328,505,450, capital increase through capitalization of capital reserves of
NT$ 46,929,350 and the cash capital increase of NT$ 10,978,200. The
authorized capital remains NT$ 2,000,000,000, and the paid-in capital was
increased to NT$ 1,325,000,000.
-
Transcend holds its Initial Public Offering on the Taiwan Stock
Exchange.on May 3, 2001.
- Executed capital increase through capitalization of retained earnings of NT$
2001
331,250,000 and capital increase out of employee bonus of NT$ 8,870,000.
The authorized capital was increased to NT$ 2,500,000,000 and the paid-in
capital was increased to NT$ 1,665,120,000.
-
Transcend expands its product line to include JetFlash USB flash
drives and card readers.
2002 - Executed capital increase through capitalization of retained earnings of NT$
340,880,000. The authorized capital was NT$ 2,500,000,000 and the paid-in
capital was increased to NT$ 2,006,000,000.
- Transcend company headquarter is relocated to its large new
facility in Taipei's Neihu Technology District.
- Transcend launches its StoreJet line of flash memory storage
products.
2003
- Transcend expands product line to include disk storage and
display systems.
- Issuance of Euro-Convertible Bonds US$35,000,000.
'
- Transcend s annual revenue totaled NT$9.52 billion, up 47%.
- Transcend begins offering DDR2 memory modules and
2004 introduces a number of multimedia products to the market.
- Transcend's annual revenue totaled NT$14.59 billion, up 53%.
-
Transcend opens branch offices in Hertfordshire, England and
Maryland, USA.
- Transcend diversifies its range of flash products to include MP3
2005
music players.
- Transcend receives the 13th National Quality Award.
- Transcend wins iF Design Award 2005.
2006 - Transcend unveils its Operation Facilit y in Shanghai, China.
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-
Transcend becomes the first company in the world to receive ISO 9001, ISO
14001 and HSPM (QC 080000) certifications.
- Transcend is honored with 2006 Taiwan Superior Brands award from the
Bureau of Foreign Trade, commissioned by the Ministry of Economics
Affairs (MOEA) of Taiwan.
-
Transcend celebrates its 20th anniversary as it opens its
Shanghai factory.
2007 - Transcend opens office in Osaka, Japan.
- Transcend is named by GfK the No.1 brand of Memory Devices (Memory
Cards and USB drive) in 2006 in Taiwan's retail market.
-
Transcend Korea opens in Seoul, South Korea.
- Transcend wins Best Taiwan Global Brands commissioned by the MOEA of
Taiwan with a brand value of USD $244 million.
- Transcend wins Taiwan Excellence Award for 5 consecutive years with a
2008 total of 19 products being awarded.
- Transcend is ranked 62nd place as "Top 100 IT Brands o 2008"
by Bloomberg Businessweek.
- Transcend wins Germany's Red Dot award for its product design.
- Transcend wins Japan's Good Design award.
-
Transcend is the first memory module manufacturer in the world to garner
five Quality Management System certificates issued by the International
Organization for Standardization.
- Transcend's patented non-volatile memory technology wins the silver prize
of National Invention and Creation Award from the Taiwan Intellectual
2009 Property Office (IPO).
- Transcend's StoreJet 25M and StoreJet 25C external hard drives wins
Germany's Red Dot award for their design.
- Transcend's JetFlash T5 USB flash drive wins Japan's Good Design award.
- Transcend is the world's third-largest flash drive manufacturer with a global
market share of 11.6%, according to a Gartner survey in 2008.
-
Transcend launches a complete series of USB 3.0 flash solutions.
2010 - Transcend's patented flash memory technology wins the golden prize of
National Invention and Creation Award from the Taiwan IPO.
- Transcend completes its Neihu factory in Taipei, Taiwan.
- Transcend opens its third US office in Miami, Florida.
- Transcend wins for the 5th consecutive year Best Taiwan Global Brands
commissioned by the MOEA of Taiwan.
- Transcend's patented non-volatile memory technology wins the silver prize
2011
of National Invention and Creation Award from the Taiwan IPO.
- Transcend extends its corporate social responsibility by sponsoring youth
sports activities, such as the HBL.
- Transcend organizes its first Working Holiday program, aiming to attract
young talents from all over the globe.
- Transcend expands its product line with wireless storage products.
- Transcend wins the award for best companies to work for commissioned by
Taipei City Government Labor Affairs Bureau.
2012 - Transcend is named the third-largest manufacturer of USB flash drives and
the fourth-largest manufacturer of memory cards in the world, according to a
Gartner survey in 2012.
- Transcend continues to expand its sponsorship of all youth sports events,
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including basketball, volleyball, cheerleading, soccer, and softball
tournaments.
- Transcend opens office in Silicone Valley, USA.
- Transcend expands its product line to include DrivePro dashcams.
- Transcend receives the ISO/TS 16949:2009 Quality Management System
Certification by SGS, demonstrating Transcend’s continuous improvement in
quality management to meet the needs of the automotive industry.
2013 - Transcend wins Taiwan Excellence Award for the 10th consecutive year with
a total of 48 products being awarded.
- Transcend's patented memory block management technology wins the silver
prize of National Invention and Creation Award from the Taiwan IPO.
- Transcend wins the award for best companies to work for commissioned by
Taipei City Government Labor Affairs Bureau.
- Transcend expands its product line to include Mac-compatible upgrade
solutions.
- Transcend expands its DrivePro dashcam product line and is honored with
2014
ICT Month 100 I.T. Innovative Elite Award.
- Transcend begins to sponsor the 2nd Black Panther High School Baseball
Tournament.
- Transcend expands its product line to include DrivePro Body wearable
cameras.
- Transcend wins Good Design Award 2015 for the design of its DrivePro 520
2015 dashcam and JetDrive Lite expansion cards for Mac.
- Transcend initiates its long-term Baseball Mentoring Program aimed at
underprivileged school baseball teams, aspiring to help young promising
athletes fulfill their dreams.
- Transcend expands its product line to include StoreJet Cloud personal cloud
storage.
- Transcend wins for the 10th consecutive year Best Taiwan Global Brands
2016 commissioned by the MOEA of Taiwan.
- Transcend's DrivePro 50 dashcam wins Japan's Good Design Award 2016.
- Transcend's embedded SSDs are in fourth place in global market share,
according to a Gartner survey in 2015.
- Transcend launches its first PCIe M.2 SSD series.
- Transcend wins Good Design Award 2017 for its CM42 M.2 SSD enclosure
kit.
2017 - Transcend is honored by Taiwan's Ministry of Education for the first time in
2017 for actively promoting sports activities.
- Transcend continues to sponsor youth sports events, winning the silver prize
of Sports Activist Awards and the Long-Term Sponsorship Award in 2017.
- Transcend launches a dual lens dashcam and a body camera with a tethered
camera unit, and is honored with ICT Month 100 I.T. Innovative Elite
Award.
- Transcend wins Taiwan Excellence Award for the 15th consecutive year with
2018 a total of 77 products being awarded.
- Transcend's JetDrive 855 SSD Upgrade Kits for Mac wins Japan's Good
Design award.
- Transcend is honored with the golden prize of Sports Activist Awards for its
continuous efforts in sponsoring youth sports events.
2019 - Transcend unveils its cutting-edge Portable SSD product series.
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	- Transcend is granted 2019 Badge of Accredited Healthy Workplace by Taiwan's Ministry of Health and Welfare for health promotion at the workplace.
2020	- Transcend wins Taiwan Excellence Award for the 17th consecutive year. - Transcend expands its product line to include 3D NAND SSDs with Extended Temperature Tolerance. - Transcend launches its first CFExpress Type B memory card. - Transcend launches its firstQLC NAND SSD.

-6-

Corporate Governance Report

3.1. Organization

3.1.1. Organizational Chart

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-7-

3.1.2. Major Corporate Functions

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Department Functions
Responsible for the establishment of the sales plan for all markets worldwide, including
physical/virtual channels, direct stores and project brands of the Company, industry grade,
Sales network communication/POS/medical/military application/automobile application and OEM
customers, as well as the development and maintenance of customers, business management
and promotion, collection and response to new business opportunities.
Responsible for the research, development and design related matters for memory products,
R & D
computers and mobile phone peripheral products and vehicle continuous video recording (CVR)
Tech Support
and wearable cameras.
Responsible for product production, testing, repair and production schedule control, product
Production shipping operation, production technologies, manufacturing quality improvement and related
matters.
Responsible for the management of reasonable pricing and fair distribution of the Company’s
products, summarization and analysis of product information and pros/cons of products of each
product line, and also provide assistance to customization demands. Responsible for matters
PM &
related to the brand marketing activities, strengthening of brand image, product and market
Marketing
information collection, establishment and execution of marketing plans, contact and application
of broadcast media, planning of the Company’s website and assistance to sales activity
arrangement and design, etc.
Responsible for the Company’s financial analysis, accounting affairs, statements preparation,
FAD difference analysis, fund management, planning of the Company’s taxes, finance, stock affairs
and investments as well as monitoring of the cash flow of all subsidiaries.
Responsible for understanding the quality condition and price trend of raw materials,
component parts, machine equipment and office supplies necessary for the products and
PUR operation of the Company in order to perform price negotiation and purchase. It is also
responsible for maintaining the safety stock of the purchase items and assisting the handling of
slow-moving materials.
Information Responsible for matters related to the Company’s software and hardware constructions for
System systems, networks and computers.
Responsible for coordinating the Company’s administrative management, human resource,
legal, patent and trademark related affairs, in order to ensure that all administrative affairs of the
ADM Company comply with the laws and regulations, and also responsible for establishing internal
regulations according to laws in order to ensure the compliance of all employees in the
organization.
Responsible for the establishment of the Company’s quality assurance system, promotion of
Quality ISO system and QA management system, direct internal audit and external certification, and
Assurance communication with other departments to achieve objectives of the organization, customer audit
and subsequent follow-up management.
Responsible for the monitoring and assessment of the design of internal control systems of the
Audit Office parent company and its subsidiaries and also determine whether their executions are effective,
and propose improvement recommendations.
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3.2. Background Information on Directors, General Managers, Vice General Managers, Assistant Managers and Heads of Various Department and Branches 3.2.1. Directors

3.2.1. Directors	3.2.1. Directors	3.2.1. Directors	3.2.1. Directors	3.2.1. Directors	3.2.1. Directors	3.2.1. Directors
																	April 19, 2021
Title	Nationality/ Place of Incorporation	Name	Gender	Date Elected	Term (Years)	Date First Elected	Shareholding when Elected		Current Shareholding		Spouse & Minor Shareholding		Shareholding by Nominee Arrangement		Experience `（`Education`）`	Other Position	Executives, Directors or Supervisors Who are Spouses or within Two Degrees of Kinship			Remark (Note)
							Shares	%	Shares	%	Shares	%	Shares	%			Title	Name	Relation
Chairman	R.O.C	SHU, CHUNG-WON	Male	2018.06.14	3	2003.06.03	9,990,453	2.32%	9,990,453	2.33%	-	0.00%	-	0.00%	Department of Electrical Engineering, National Cheng Kung University Project Manager of Hewlett- Packard Development Company, L.P.	CEO of Transcend Information Inc. Chairman of Taiwan IC Packaging Corporation Director of C-Tech Corporation and Transcend Information Trading GmbH Representative Director of WK Technology Fund VI Ltd.; WK Technology Fund VII Ltd.; WK Technology Fund VIII Ltd. Supervisor of Wan An Technology Inc. President of Transcend Information Trading GmbH	Director	SHU, CHUNG- CHENG	Brother	-
																	Director	CHUI, LI-CHU	Spouse
Director	R.O.C	SHU, CHUNG-CHENG	Male	2018.06.14	3	2004.06.11	6,244,098	1.45%	6,244,098	1.46%	-	0.00%	-	0.00%	Department of Civil Engineering, National Taipei Institute of Technology	Chairman of C-Tech Corporation, Cheng Chuan Technology Development Inc. and Shu Min Investment Inc. Executive Director of Transcend Information (Shanghai), Ltd. and Transtech Trading (Shanghai) Co., Ltd. Director of Wan An Technology Inc., Won Chin Investment Inc., Wan Min Investment Inc., Wan Chuan Investment Inc., Saffire Investment Ltd., Memhiro Pte. Ltd. and Transcend Information (H.K.) Limited. Consultant of Transcend Information Inc. and Taiwan IC Packaging Corporation	Chairman and CEO	SHU, CHUNG- WON	Brother	-
																	Director	CHUI, LI-CHU	Second- degree Relatives
Director	R.O.C	CHUI, LI-CHU	Female	2018.06.14	3	2015.06.12	-	0.00%	-	0.00%	9,990,453	2.33%	-	0.00%	Department of French, Tamkang University Administrative officer of Ho Cheng Investment Inc.	Supervisor of Won Chin Investment Inc.	Chairman and CEO	SHU, CHUNG- WON	Spouse	-
																	Director	SHU, CHUNG- CHENG	Second- degree Relatives
Director	R.O.C	HSU, CHIA-HSIAN	Male	2018.06.14	3	2003.06.03 (discharged on 2009.6.13 after expiration of two terms of office)	674,244	0.16%	487,244	0.11%	6,744	0.00%	-	0.00%	Department of Automatic Control Engineering, Feng Chia University President of China area of Transcend Information Inc.	Consultant of Transtech Trading (Shanghai) Co., Ltd.	None	None	None	-
Director	R.O.C	WANG, JEN-MING	Male	2018.06.14	3	2018.06.14	-	0.00%	-	0.00%	-	0.00%	-	0.00%	University of Illinois MBA Sales director of Transcend Information, Inc.	Sales Vice General Manager of Transcend Information, Inc.	None	None	None	-

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Title	Nationality/ Place of Incorporation	Name	Gender	Date Elected	Term (Years)	Date First Elected	Shareholding when Elected	Shareholding when Elected	Current Shareholding	Current Shareholding	Spouse & Minor Shareholding	Spouse & Minor Shareholding	Shareholding by Nominee Arrangement	Shareholding by Nominee Arrangement	Experience `（`Education`）`	Other Position	Executives, Directors or Supervisors Who are Spouses or within Two Degrees of Kinship	Executives, Directors or Supervisors Who are Spouses or within Two Degrees of Kinship	Executives, Directors or Supervisors Who are Spouses or within Two Degrees of Kinship	Remark (Note)
							Shares	%	Shares	%	Shares	%	Shares	%			Title	Name	Relation
Director	R.O.C	LI, TSENG-HO	Male	107.06.14	3	2018.06.14	-	0.00%	-	0.00%	4,000	0.00%	-	0.00%	Master of Information Management of National Taiwan University of Science and Technology R&D Director of Transcend Information, Inc. Factory Chief of Transcend Information, Inc.	R&D Vice General Manager of Transcend Information, Inc.	None	None	None	-
Indeoendent Director	R.O.C	WANG, YI-HSIN	Female	2018.06.14	3	2012.06.15	-	0.00%	-	0.00%	-	0.00%	-	0.00%	Ph.D, Accounting, University of Kentucky Professor of Department of Accounting, National Chung Hsing University Vice President of National Taipei University, Library Director Independent Director of Bestcom Infotech Corp. Independent Director of United BioPharma Inc. President and Professional Development Committee Chairperson, Institute of Internal Auditors-Chinese Taiwan Director and Member of Professional Ethics Committee and International Relationship Committee, International Internal Audit Association Financial Officer of Asian Alliance, International Internal Audit Association Committee Member of “Park Operation Fund Supervisory Management Committee,” National Science Council, Executive Yuan Committee Member of “Committee for Government Accounting Standards,” Directorate-General of Budget, Accounting and Statistics, Executive Yuan	Professor of Department of Accounting, National Taipei University Director of First Financial Holding Co., Ltd. Chairman of Accounting Research and Development Foundation Chairman of Taipei Trend Research Foundation Supervisor of Telecom Technology Center Committee Member of “Telecommunications Universal Services Fund Management Committee, ” National Communications Commission, Executive Yuan Director of Yu Da University of Science and Technology	None	None	None	-

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Title	Nationality/ Place of Incorporation	Name	Gender	Date Elected	Term (Years)	Date First Elected	Shareholding when Elected	Shareholding when Elected	Current Shareholding	Current Shareholding	Spouse & Minor Shareholding	Spouse & Minor Shareholding	Shareholding by Nominee Arrangement	Shareholding by Nominee Arrangement	Experience `（`Education`）`	Other Position	Executives, Directors or Supervisors Who are Spouses or within Two Degrees of Kinship	Executives, Directors or Supervisors Who are Spouses or within Two Degrees of Kinship	Executives, Directors or Supervisors Who are Spouses or within Two Degrees of Kinship	Remark (Note)
							Shares	%	Shares	%	Shares	%	Shares	%			Title	Name	Relation
Indeoendent Director	R.O.C	CHEN, YI-LIANG	Male	2018.06.14	3	2012.06.15	-	0.00%	-	0.00%	-	0.00%	-	0.00%	MBA, University of California, Los Angeles President of Symphox Information Co., Ltd. President of China area of Hewlett- Packard Development Company, L.P. CFO of China area of Hewlett-Packard Development Company, L.P. Business Development President of Asia area of Hewlett-Packard Development Company, L.P. Financial Vice President of Taiwan area of Hewlett-Packard Development Company, L.P. Financial Manager of Taiwan area and Sales manager of Southern area of Hewlett-Packard Development Company L.P. Independent Director of Nano-Op Co., Ltd.	Director of Homeyen Networks Co., Ltd. Director of Tai Hwa Oil Industrial Co., Ltd. Independent Director of Lextar Electronics Corp.	None	None	None	-
Indeoendent Director	R.O.C	CHEN, LO-MIN	Male	2018.06.14	3	2012.06.15	-	0.00%	-	0.00%	-	0.00%	-	0.00%	Department of Business Administration of National ChengChi University Global Executive Vice President of Diebold Inc. President of Asia-Pacific area of Diebold Inc. President of Great China Business division of Royal Phlips President of NCR China Co., Ltd. Vice President of Taiwan branch of NCR Corp.	Indeoendent Director of Hitron Technologies Inc.	None	None	None	-

3.2.2. Disclose the name of the Institutional Shareholders if the Company’s Direcor is a representative of an Institutional Shareholder: None.

3.2.3. Top 10 Shareholders’ Names and Shareholding Ratio of the Institutional Shareholders: Not applicable.

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3.2.4. Professional Qualifications and Independence Analysis of the Directors:

Criteria Name	Meet One of the Following Professional Qualification Requirements, Together with at Least Five Years Work Experience	Meet One of the Following Professional Qualification Requirements, Together with at Least Five Years Work Experience	Meet One of the Following Professional Qualification Requirements, Together with at Least Five Years Work Experience	Independence Criteria	Independence Criteria	Independence Criteria	Independence Criteria	Independence Criteria	Independence Criteria	Independence Criteria	Independence Criteria	Independence Criteria	Independence Criteria	Independence Criteria	Independence Criteria	Number of Other Public Companies in Which the Individual is Concurrently Serving as an Independent Director
	An Instructor or Higher Position in a Department of Commerce, Law, Finance, Accounting, or Other Academic Department Related to the Business Needs of the Company in a Public or Private Junior College,College or University	A Judge, Public Prosecutor, Attorney, Certified Public Accountant, or Other Professional or Technical Specialist Who has Passed a National Examination and been Awarded a Certificate in a Profession Necessaryfor the Business of the Company	Have Work Experience in the Areas of Commerce, Law, Finance, or Accounting, or Otherwise Necessary for the Business of the Company	1	2	3	4	5	6	7	8	9	10	11	12
SHU, CHUNG-WON			v					v				v		v	v	0
SHU, CHUNG-CHENG (Note)			v	v				v	v	v		v		v	v	0
CHUI, LI-CHU			v	v				v	v			v		v	v	0
HSU, CHIA-HSIAN			v	v	v	v	v	v	v	v	v	v	v	v	v	0
WANG, JEN-MING			v		v	v		v	v	v	v	v	v	v	v	0
LI, TSENG-HO			v		v	v		v	v	v	v	v	v	v	v	0
CHEN, YI-LIANG			v	v	v	v	v	v	v	v	v	v	v	v	v	1
CHEN, LO-MIN			v	v	v	v	v	v	v	v	v	v	v	v	v	1
WANG, YI-HSIN	v			v	v	v	v	v	v	v	v	v	v	v	v	0

Note: Dismissal of general manager and retired on March 5, 2020.

Independence Criteria-

Not an employee of the company or any of its affiliates.
Not a director or supervisor of the company or any of its affiliates. Not apply to independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, a public company and its parent or subsidiary or a subsidiary of the same parent. 3. Not a natural-person shareholder who holds shares, together with those held by the person's spouse, minor children, or held by the person under others' names, in an aggregate of one percent or more of the total number of issued shares of the company or ranking in the top 10 in holdings.
Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship, of a managerial officer under subparagraph 1 or any of the persons in the preceding two subparagraphs.
Not a director, supervisor, or employee of a corporate shareholder that directly holds five percent or more of the total number of issued shares of the company, or that ranks among the top five in shareholdings, or that designates its representative to serve as a director or supervisor of the company under Article 27, paragraph 1 or 2 of the Company Act. Not apply to independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, a public company and its parent or subsidiary or a subsidiary of the same parent.
If a majority of the company's director seats or voting shares and those of any other company are controlled by the same person: not a director, supervisor, or employee of that other company. Not apply to independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, a public company and its parent or subsidiary or a subsidiary of the same parent.
If the chairperson, general manager, or person holding an equivalent position of the company and a person in any of those positions at another company or institution are the same person or are spouses: not a director (or governor), supervisor, or employee of that other company or institution. Not apply to independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, a public company and its parent or subsidiary or a subsidiary of the same parent.
Not a director, supervisor, officer, or shareholder holding five percent or more of the shares, of a specified company or institution that has a financial or business relationship with the company. Not apply to independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, a public company and its parent or subsidiary or a subsidiary of the same parent, if the specified company or institution holds 20 percent or more and no more than 50 percent of the total number of issued shares of the public company.

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Not a professional individual who, or an owner, partner, director, supervisor, or officer of a sole proprietorship, partnership, company, or institution that, provides auditing services to the company or any affiliate of the company, or that provides commercial, legal, financial, accounting or related services to the company or any affiliate of the company for which the provider in the past 2 years has received cumulative compensation exceeding NT$500,000, or a spouse thereof; provided, this restriction does not apply to a member of the remuneration committee, public tender offer review committee, or special committee for merger/consolidation and acquisition, who exercises powers pursuant to the Act or to the Business Mergers and Acquisitions Act or related laws or regulations.
Not having a marital relationship, or a relative within the second degree of kinship to any other director of the Company.
Not been a person of any conditions defined in Article 30 of the Company Law.
Not a governmental, juridical person or its representative as defined in Article 27 of the Company Law.

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3.2.5. Management Team

April 19, 2021

Title	Nationality	Name	Gender	Date Effective	Shareholding	Shareholding	Spouse & Minor Shareholding	Spouse & Minor Shareholding	Shareholding by Nominee Arrangement	Shareholding by Nominee Arrangement	Experience (Education)	Other Position	Managers who are Spouses or Within Two Degrees of Kinship	Managers who are Spouses or Within Two Degrees of Kinship	Managers who are Spouses or Within Two Degrees of Kinship	Remark(s)
					Shares	%	Shares	%	Shares	%			Title	Name	Relation
Chairman & CEO (Note 1)	R.O.C	Shu, Chun-Won	Male	1991.06.01	9,990,453	2.33%	-	0.00%	-	0.00%	 Department of Electrical Engineering, National Cheng Kung University  Project Manager of Hewlett-Packard Development Company, L.P.  Chairman of Transcend Information,Inc.	(Note 2)	None	None	None	-
General Manager	Korea	Hong, Wan-Hoon	Male	2020.03.05	-	0.00%	-	0.00%	-	0.00%	 Department of Electronic Engineering, Inha University  Chairman of Samsung Electronics Taiwan Co., Ltd.  General Manager of Transcend Information, Inc.	None	None	None	None	-
Director & Vice General Manager	R.O.C	Wang, Jen-Ming	Male	2017.07.01	-	0.00%	-	0.00%	-	0.00%	 University of Illinois MBA  Sales Vice General Manager of Transcend Information,Inc.	None	None	None	None	-
Director & Vice General Manager	R.O.C	LI, TSENG-HO	Male	2020.10.01	-	0.00%	4,000	0.00%	-	0.00%	 Master of Information Management, National Taiwan University of Science and Technology  R&D Vice General Manager of Transcend Information,Inc.	None	None	None	None	-

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April 19, 2021

Title	Nationality	Name	Gender	Date Effective	Shareholding	Shareholding	Spouse & Minor Shareholding	Spouse & Minor Shareholding	Shareholding by Nominee Arrangement	Shareholding by Nominee Arrangement	Experience (Education)	Other Position	Managers who are Spouses or Within Two Degrees of Kinship	Managers who are Spouses or Within Two Degrees of Kinship	Managers who are Spouses or Within Two Degrees of Kinship	Remark(s)
					Shares	%	Shares	%	Shares	%			Title	Name	Relation
Vice General Manager	R.O.C	Fang, Wen-Jeng	Male	2019.09.01	-	0.00%	25,967	0.01%	-	0.00%	 University of Southern California Electrical Engineering  Administration Vice General Manager of Transcend Information, Inc.	None	None	None	None	-
Vice General Manager	R.O.C	Chen, Po-Shou	Male	2019.07.01	-	0.00%	-	0.00%	-	0.00%	 San Jose State University Economics  Sales Vice General Manager of Transcend Information,Inc.	None	None	None	None	-
CFO	R.O.C	Hsiao, Sheng-Yin	Male	2019.08.01	-	0.00%	-	0.00%	-	0.00%	 Master of Accounting, National Taiwan University  Financial and Accounting Manager of Transcend Information, Inc.	None	None	None	None	-

Note 1: Due to the needs of the Company’s operation and business development, presently, the Chairman and CEO refer to the same person. However, a majority of the directors are not concurrently assuming the positions of employees or managerial officers. The supervisory function of the board of directors is still complete. In the future, to cope with the regulatory requirements, the structure of the board of directors is planned to be adjusted (such as the increase of the number of independent directors).

Note 2: Chairman of Taiwan IC Packaging Corporation

Director of C-Tech Corporation and Transcend Information Trading GmbH

Representative Director of WK Technology Fund VI Ltd., WK Technology Fund VII Ltd., and WK Technology Fund VIII Ltd. Supervisor of Wan An Technology Inc.

General Manager of Transcend Information Trading GmbH

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3.2.6. Remuneration of Directors, Independent Directors, General Manager and Vice General Managers 1. Remuneration of Directors and Independent Directors

Dec.31,2020; Unit:NT$ thousands

==> picture [757 x 332] intentionally omitted <==

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

Remuneration Ratio of Total Relevant Remuneration Received by Directors Who are Also Employees Compensation Ratio of Total Remune
Remuneration ration
Base Severance Pay Directors Allowances (D) (A+B+C+D) to Net Salary, Bonuses, Severance Pay Employee Compensation (G) (A+B+C+D+E+F+G) to Net Income ventures from
Compensation (A) (B) Compensation (C) Income (%) and Allowances (E) (F) (Note)
(%) other
than
Title Name All Compan Compan Companies in subsidia
compani ies in the Compan ies in the Compan ies in ies in the Compan ies in ies in the Compan the Companies in the ries or
The es in the The consolid The consolid The the The consolid The the The consolid The company consolidated The consolid from the
company financial consolidated pany com statemenfinancial ated company statemenfinancial ated pany com financial consolidated company statemenfinancial ated company financial consolidated panycom statemenfinancial ated statements financial company statemenfinancial ated companparent y
statemen statemen statemen Cash Stock Cash Stock
ts ts ts ts ts
ts ts ts
Chairman Shu,
Chung-Won
Shu,
Director
Chung-Cheng
Director Chui, Li-Chu
3,600 3,600 - - 1,440 1,440 190 190 0.44% 0.44% 13,601 13,601 - - 451 - 451 - 1.61% 1.61% 4,566
Director Hsu,
Chia-Hsian
Director Wang,
Jen-Ming
Director Li, Tseng-Ho
Independent Chen,
Director Yi-Liang
Independent Chen, 1,800 1,800 - - 720 720 280 280 0.23% 0.23% - - - - - - - - 0.23% 0.23% -
Director Lo-Min
Independent Wang,
Director Yi-Hsin
1. Please describe the policy, system, standard, and structure of remuneration to independent directors, and the correlation between duties, risk, and time input with the amount of remuneration:
Transportation allowance is issued according to the attending status of the independent directors of the Company in the board of directors’ meetings and functional committees. The determination of the remuneration of directors is made based on the consideration
of the overall business performance of the Company, future operational risk and development trend of the industry, along with the consideration of the contribution of each director on the operation of the Company and the annual performance evaluation result by
the board of directors (including individual director), in order to issue reasonable remuneration. According to Article 22 of the Articles of Incorporation of the Company, where the Company has a profit for each fiscal year, the Company shall set aside no more
than 0.2% of the profit for distribution to directors as remuneration.
2. In addition to the above remuneration, director remuneration shall be disclosed as follows when received from companies included in the consolidated financial statements in the most recent year to compensate directors for their services, such as being independent
contractors: NT$2,318 thousands.
----- End of picture text -----

Note: The compensation of employees approved by the Board of Directors for the year ended December 31, 2020 is NT$14,786,482.

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

Name of Directors
Total of (A+B+C+D) Total of (A+B+C+D+E+F+G)
Range of Remuneration
Companies in the consolidated Companies in the consolidated
The company The company
financial statements financial statements
Shu, Chung-Won, Shu, Chung-Won,
Chui, Li-Chu, Chui, Li-Chu,
Shu, Chung-Cheng, Chui, Li-Chu, Shu, Chung-Cheng, Chui, Li-Chu,
Hsu, Chia-Hsian, Hsu, Chia-Hsian,
Hsu, Chia-Hsian, Hsu, Chia-Hsian,
Less thanNT$ 1,000,000 Chen, Yi-Liang, Chen, Yi-Liang,
Wang, Jen-Ming, Li, Tseng-Ho, Wang, Jen-Ming, Li, Tseng-Ho,
Chen, Lo-Min, Chen, Lo-Min,
Chen,Yi-Liang, Chen, Lo-Min, Chen,Yi-Liang, Chen, Lo-Min,
Wang,Yi-Hsin Wang,Yi-Hsin
Wang, Yi-Hsin Wang, Yi-Hsin
NT$1,000,000 ~ NT$1,999,999 Shu, Chung-Cheng
NT$2,000,000 ~ NT$3,499,999
Wang, Jen-Ming, Wang, Jen-Ming,
NT$3,500,000 ~ NT$4,999,999
Li, Tseng-Ho Li, Tseng-Ho
Shu, Chung-Won,
NT$5,000,000 ~ NT$9,999,999 Shu, Chung-Won
Shu, Chung-Cheng
NT$10,000,000 ~ NT$14,999,999
NT$15,000,000 ~ NT$29,999,999
NT$30,000,000 ~ NT$49,999,999
NT$50,000,000 ~ NT$99,999,999
Greater than or equal to NT$100,000,000
Total 9 9 9 9
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2. Remuneration of the General Manager and Vice General Managers

Dec. 31, 2020; Unit: NT$ thousands

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

Remuneration
Employee Compensation (D) Ratio of total compensation
Salary (A) Severance Pay (B) Bonuses and Allowances (C) from ventures
(Note 1) (A+B+C+D) to net income (%)
other than
Title Name Companies in Companies in Companies in Companies in the subsidiaries
The the consolidated The the consolidated The the consolidated The company consolidated The Companies in the or from the
consolidated
company financial company financial company financial financial statements company parent
financial statements
statements statements statements Cash Stock Cash Stock company
Chairman and Shu,
CEO Chung-Won
Shu,
Director and
Chung-Cheng
General Manager
(Note 2)
Hong,
General Manager Wan-Hoon
(Note 3)
Director and 25,579 25,579 - - 5,746 5,746 736 - 736 - 2.68% 2.68% 4,566
Wang,
Vice General
Jen-Ming
Manager
Director and Li,
Vice General Tseng-Ho
Manager (Note 4)
Vice General Fang,
Manager Wen-Jeng
Vice General Chen,
Manager Po-Shou
----- End of picture text -----

Note 1: The compensation of employees approved by the Board of Directors for the year ended December 31, 2020 is NT$14,786,482. Note 2: Dismissal of General Manager on March 5, 2020.

Note 3: New appointment of General Manager on March 5, 2020. Note 4: New appointment of Vice General Manager on October 1, 2020.

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

Name of General Manager and Vice General Managers
Range of Remuneration Companies in the consolidated
The company
financial statements
Less than NT$ 1,000,000
NT$1,000,000 ~ NT$1,999,999 Shu, Chung-Cheng
NT$2,000,000 ~ NT$3,499,999 Fang, Wen-Jeng, Chen, Po-Shou Fang, Wen-Jeng, Chen, Po-Shou
NT$3,500,000 ~ NT$4,999,999 Wang, Jen-Ming, Li, Tseng-Ho Wang, Jen-Ming, Li, Tseng-Ho
NT$5,000,000 ~ NT$9,999,999 Shu, Chung-Won Shu, Chung-Won, Shu, Chung-Cheng
NT$10,000,000 ~ NT$14,999,999 Hong, Wan-Hoon Hong, Wan-Hoon
NT$15,000,000 ~ NT$29,999,999
NT$30,000,000 ~ NT$49,999,999
NT$50,000,000 ~ NT$99,999,999
Greater than or equal to NT$100,000,000
Total 7 7
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3. Employee Compensation for Managerial Officers

Dec. 31, 2020; Unit: NT$ thousands

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

Ratio of Total
Employee Compensation
Title Name Total Amount to Net
in Stock in Cash Income (%)
Chairman and CEO Shu, Chung-Won
Director and General Manager
Shu, Chung-Cheng
(Note 1)
General Manager (Note 2) Hong, Wan-Hoon
Director and Vice General
Managerial Wang, Jen-Ming
Manager - 856 856 0.07
Officers
Director and Vice General
Li, Tseng-Ho
Manager (Note 3)
Vice General Manager Fang, Wen-Jeng
Vice General Manager Chen, Po-Shou
CFO Hsiao, Sheng-Yin
----- End of picture text -----

Note 1: Dismissal of General Manager on March 5, 2020. Note 2: New appointment of General Manager on March 5, 2020. Note 3: New appointment of Vice General Manager on October 1, 2020.

3.2.7. The ratio of total remuneration paid by the Company and by all companies included in the consolidated financial statements for the two most recent fiscal years to Directors, General Manager and Vice General Managers of the Company, to the net income:

Year Title	Ratio of total remuneration paid to Directors, General Manager and Vice General Manager to net income(%)	Ratio of total remuneration paid to Directors, General Manager and Vice General Manager to net income(%)	Ratio of total remuneration paid to Directors, General Manager and Vice General Manager to net income(%)	Ratio of total remuneration paid to Directors, General Manager and Vice General Manager to net income(%)
	2020		2019
	The company	Companies in the consolidated financial statements	The company	Companies in the consolidated financial statements
Directors	1.84%	1.84%	1.64%	1.64%
General Manager and Vice General Managers	2.68%	2.68%	1.29%	1.29%

3.2.8. The policies, standards, and portfolios for the payment of remuneration, the procedures for determining remuneration, and the correlation with risks and business performance:

Transportation allowance is issued according to the attending status (listed for attendance) of the directors and independent directors of the Company in the board of directors’ meetings and functional committees. The determination of the remuneration of directors is made based on the consideration of the overall business performance of the Company, future operational risk and development trend of the industry, along with the consideration of the contribution of each director on the operation of the Company and the annual performance evaluation result by the board of directors (including individual director), in order to issue reasonable remuneration. Furthermore, according to Article 22 of the Articles of Incorporation of the Company, when the Company has a profit for each fiscal year, an amount no more than 0.2% of the profit shall be appropriated as the remuneration of directors, and after the resolutions of the Remuneration Committee and the Board of Directors, the remuneration is then issued to each director.

The salaries of the CEO, General Manager, Vice General Managers and other managerial officers, etc., are issued based on the consideration of the standard adopted in the same industry, market status, professional competence and job duties. According to Article 22 of the Articles of Incorporation of the Company, when the Company has a profit for each fiscal year, an amount not less than 1% of the profit shall be appropriated as the remuneration of employees, and the personal annual work performance, including the achievement rate of revenue and profit of the

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entire company and his/her in-charge department, personal goal achievement rate, operational management capability, and whether there is any special contribution or negative events, etc., such that the amount of distribution is determined after comprehensive evaluation of all aspects. Remuneration performance evaluation and reasonableness for directors and managerial officers are reviewed and approved by the Remuneration Committee and Board of Directors. The remuneration system is also reviewed according to the actual condition of business and relevant laws and regulations appropriately at all times.

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3.3. Implementation of Corporate Governance

3.3.1. Operations of the Board of Directors

A total of 4 meetings of the Board of Directors were held in the previous period. The attendance of directors were as follows:

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

Attendance
Title Name By Proxy Attendance Rate (%) Remarks
in Person
Chairman Shu, Chung-Won 4 0 100
Director Shu, Chung-Cheng 4 0 100
Director Chui, Li-Chu 2 0 50
Director Hsu, Chia-Hsian 1 0 25
Director Wang, Jen-Ming 4 0 100
Director Li, Tseng-Ho 4 0 100
Independent
Chen, Yi-Liang 3 1 75
Director
Independent
Chen, Lo-Min 4 0 100
Director
Independent
Wang, Yi-Hsin 4 0 100
Director
----- End of picture text -----

Other	mentionable items:
1.	If any of the following circumstances occur, the dates of the meetings, sessions, contents of motion, all
	independent directors’ opinions and the company’s response should be specified:
	(1) Matters referred to in Article 14-3 of the Securities and Exchange Act.
	(2) Other matters involving objections or expressed reservations by independent directors that were recorded or
	stated in writing that require a resolution by the board of directors.
	None. Please refer to “3.3.12 Major resolutions of Shareholders’ Meeting, Board of Directors Meetings, Audit
	Committee meetings and Remuneration Committee meetings in the most recent year and up to the publication
	date of this Annual Report” for major resolutions of Board of Directors Meetings in the most recent year and up
	to the publication date of this Annual Report.
2.	If there are directors’ avoidance of motions in conflict of interest, the directors’ names, contents of motion,
	causes for avoidance and voting should be specified:
	None.
3.	TWSE/TPEx-listed companies are required to disclose the evaluation cycle and period, scope of evaluation,
	evaluation method, and evaluation items of the self evaluations conducted by the Board of Directors:
	Evaluation cycle Evaluation period Scope of evaluation Evaluation method Evaluation items
	Once a January 1, Board of Self-assessment (1) Board performance evaluation: level of
	year 2020 to Directors, by directors, participation in company operations, the
	December individual internal quality of Board decisions, Board
	31, 2020 directors, self-evaluation composition and structure, appointment of
	and by the Board of directors and their continued development,
	functional Directors and and internal controls.

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4.			committees	functional committees	(2) Individual director performance evaluation: grasp of company targets and missions, understanding of the director's role and responsibilities, level of participation in company operations, internal relationship management and communication, director's specialty and continued development, and internal controls. (3) Audit committee performance evaluation: Participation in company operations, understanding of the responsibilities of Audit committees, improvement of the decision-making quality of Audit committees, composition of Audit committees, and member selection and internal control. (4) Remuneration committee performance evaluation: Participation in company operations, understanding of the responsibilities of Remuneration committees, improvement of the decision-making quality of Remuneration committees, and composition of Remuneration committees, and member selection.

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goals are established in order to enhance the operational efficiency of the board of directors. The Company’s board of directors approved the “Rules for Performance Evaluation of Board of Directors” on March 5, 2020, and the first evaluation period was from January 1, 2020 to December 31, 2020, and the evaluation result was reported to the board of directors on March 4, 2021. Please refer to the aforementioned Point 3 for the evaluation content and result.

Note: Attendance of each independent directors during Board of Director meetings held in 2020.

Independent Directors	The First Meeting	The Second Meeting	The Third Meeting	The Forth Meeting
Chen, Yi-Liang	Attendance in Person	By Proxy	Attendance in Person	Attendance in Person
Chen, Lo-Min	Attendance in Person	Attendance in Person	Attendance in Person	Attendance in Person
Wang, Yi-Hsin	Attendance in Person	Attendance in Person	Attendance in Person	Attendance in Person

3.3.2. Operations of the Audit Committee
The Company established Audit Committee on June 2012. The Committee composed of the entire number of independent directors, which are three persons in total. The Committee operations by the Company’s Audit Committee Charter, and the main function of the Audit Committee is to supervise the following matters:
- (1) Fair presentation of the financial reports of this Corporation.
- (2) The hiring (and dismissal), independence, and performance of certificated public accountants of this Corporation.
- (3) The effective implementation of the internal control system of this Corporation.
- (4) Compliance with relevant laws and regulations by this Corporation.
- (5) Management of the existing or potential risks of this Corporation.
The powers of the Committee are as follows:
- (1) The adoption of or amendments to the internal control system pursuant to Article 14-1 of the Securities and Exchange Act.
- (2) Assessment of the effectiveness of the internal control system.
- (3) The adoption or amendment, pursuant to Article 36-1 of the Securities and Exchange Act, of the procedures for handling financial or business activities of a material nature, such as acquisition or disposal of assets, derivatives trading, loaning of funds to others, and endorsements or guarantees for others.
- (4) Matters in which a director is an interested party.
- (5) Asset transactions or derivatives trading of a material nature.
- (6) Loans of funds, endorsements, or provision of guarantees of a material nature.
- (7) The offering, issuance, or private placement of equity-type securities.
- (8) The hiring or dismissal of a certified public accountant, or their compensation.
- (9) The appointment or discharge of a financial, accounting, or internal audit officer.
- (10) Annual financial reports and second quarter financial reports that must be audited and attested by a CPA, which are signed or sealed by the chairman, managerial officer, and accounting officer.
- (11) Other material matters as may be required by this Corporation or by the competent authority.
The key tasks of the Audit Committee of the Company for the year of 2020 includes: Review of all quarterly and annual financial statements, review of annual earning distribution proposal,

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examine the effectiveness of the internal control system, establishment and revision of the internal control system, review of material asset transactions, corporate governance related affairs, risk management matters, appointment and compensation of CPAs, etc. Please refer to “3.3.12 Major resolutions of Shareholders’ Meeting, Board of Directors Meetings, Audit Committee meetings and Remuneration Committee meetings in the most recent year and up to the publication date of this Annual Report” for major resolutions of Audit Committee meetings in the most recent year and up to the publication date of this Annual Report.

A total of 4 Audit Committee meetings were held in the previous period. The attendance of the independent directors was as follows:

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

Attendance
Title Name By Proxy Attendance Rate (%) Remarks
in Person
Independent
Chen, Yi-Liang 3 1 75
Director
Independent
Chen, Lo-Min 4 0 100
Director
Independent
Wang, Yi-Hsin 4 0 100
Director
----- End of picture text -----

Independent Director Chen, Lo-Min 4 0 100 Independent Director Wang, Yi-Hsin 4 0 100	Independent Director Chen, Lo-Min 4 0 100 Independent Director Wang, Yi-Hsin 4 0 100
Other mentionable items:
1.	If any of the following circumstances occur, the dates of meetings, sessions, contents of motion,
	resolutions of the Audit Committee and the Company’s response to the Audit Committee’s opinion should
	be specified:
	(1) Matters referred to in Article 14-5 of the Securities and Exchange Act.
	(2) Other matters which were not approved by the Audit Committee but were approved by two-thirds or
	more of all directors.
	None. Please refer to “3.3.12 Major resolutions of Shareholders’ Meeting, Board of Directors Meetings,
	Audit Committee meetings and Remuneration Committee meetings in the most recent year and up to the
	publication date of this Annual Report” for major resolutions of Audit Committee meetings in the most
	recent year and up to the publication date of this Annual Report.
2.	If there are independent directors’ avoidance of motions in conflict of interest, the directors’ names,
	contents of motion, causes for avoidance and voting should be specified:
	None.
3.	Communications between the independent directors, the Company's chief internal auditor and CPAs (e.g.
	the material items, methods and results of audits of corporate finance or operations, etc.):
	(1) The internal auditors have communicated the result of the audit reports to the members of the Audit
	Committee periodically, and have presented the findings of all audit reports in the quarterly meetings
	of the Audit Committee. The internal auditors report the next Annual Audit Plan and get the approval
	of the Audit Committee in the last Audit Committee meeting every year. Should the urgency of the
	matter require it, the Company's chief internal auditor will inform the members of the Audit Committee
	outside of the regular reporting. There was no such special situation in 2020. The communication
	channel between the Audit Committee and the internal auditor has been functioning well.
	(2) The Company’s CPAs have presented the findings or the comments for the quarterly corporate
	financial reports,as well as those matters communication of which is required bylaw,in the regular

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quarterly meetings of the Audit Committee. Under applicable laws and regulations, the CPAs are required to communicate to the Audit Committee any material matters that they have discovered. There was no such special situation in 2020. The communication channel between the Audit Committee and the CPAs has been functioning well.

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3.3.3. Corporate Governance Implementation Status and Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies”

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

Implementation Status Deviations from
“the Corporate
Governance
Best-Practice
Evaluation Item Principles for
Yes No Abstract Illustration
TWSE/TPEx
Listed
Companies” and
Reasons
1. Does the company establish v The Company has established the Corporate None
and disclose the Corporate Governance Best-Practice Principles based on the
Governance Best-Practice “Corporate Governance Best-Practice Principles
Principles based on for TWSE/TPEx Listed Companies”. The
“Corporate Governance information has been disclosed on the Company’s
Best-Practice Principles for website.
TWSE/TPEx Listed http://tw.transcend-info.com/about/policies
Companies”?
2. Shareholding structure &
shareholders’ rights
(1) Does the company establish v The Company has established spokesperson and None
an internal operating investor relationship unit to handle issues of
procedure to deal with shareholders’ suggestions or disputes.
shareholders’ suggestions,
doubts, disputes and
litigations, and implement
based on the procedure?
(2) Does the company possess v The Company reports the shareholding change None
the list of its major status of insiders (directors, managerial officers
shareholders as well as the and shareholders with shareholding over 10% of
ultimate owners of those the total number of shares) in time, and also
shares? discloses the top 10 shareholders’ information in
the shareholders’ meeting annual report every
year. Furthermore, the financial statements also
disclose the information of major shareholders
with the shareholding over 5% on a quarterly
basis.
(3) Does the company establish v The Company has established the related party None
and execute the risk transaction control operation in order to
management and firewall implement the risk control mechanism
system within its thoroughly.
conglomerate structure?
(4) Does the company establish v The Company has established and disclosed None
internal rules against insiders the ”Codes of Ethical Conduct for
trading with undisclosed Employees”, ”Codes of Ethical Conduct for
information? Directors and Managerial Officers”
and ”Procedures for Handling Material Inside
Information” on the Company’s website, in order
to prohibit employees to allow themselves or any
third party to gain personal benefits through the
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----- Start of picture text -----

Implementation Status Deviations from
“the Corporate
Governance
Best-Practice
Evaluation Item Principles for
Yes No Abstract Illustration
TWSE/TPEx
Listed
Companies” and
Reasons
use of the Company’s assets, information of
through one’s job duties.
----- End of picture text -----

Evaluation Item Principles for TWSE/TPEx Listed Companies” and Reasons Yes No Abstract Illustration	Evaluation Item Principles for TWSE/TPEx Listed Companies” and Reasons Yes No Abstract Illustration	Evaluation Item Principles for TWSE/TPEx Listed Companies” and Reasons Yes No Abstract Illustration	Evaluation Item Principles for TWSE/TPEx Listed Companies” and Reasons Yes No Abstract Illustration
use of the Company’s assets, information of through one’s job duties.

3. Composition and Responsibilities of the Board of Directors (1) Does the Board develop and implement a diversified policy for the composition of its members?	v	1. The nomination and election of board members of the Company comply with the ”Procedures for Election of Directors” and ”Corporate Governance Best-Practice Principles” , in order to ensure the diversity and independence of board members. According to Article 20 of the”Corporate Governance Best-Practice Principles” of the Company, all directors are preferably required to possess knowledge, skills and literacy necessary for performing duties, and diversity directives have been established. 2. All directors are equipped with extensive experience in leadership, operation determination, business management, crisis handling, and are also equipped with industrial knowledge and international market view such that they are equipped with various capabilities necessary to execute the corporate governance. Independent directors, Mr. CHEN, YI-LIANG, Mr. CHEN, LO-MIN and Ms. WANG, YI-HSIN, are equipped with the professional backgrounds in accounting and financial analysis, such they are able to provide professional recommendations to the Company from different viewpoints and aspects. 3. The ratio of directors equipped with the identity of employees of the Company accounts for 33% of all directors, the ratio of independent directors accounts for 33% of all directors, and the female director ratio accounts for 22%. Three independent directors have the term of office seniority between 8–9 years, one director at the age above 70 years old, five directors at the age between 61–70 years old, and three directors at the age under 60 years old. The Company emphasizes the diversity of the composition of the board of directors,and thegoal for the ratio of directors	None

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Evaluation Item	Yes	No	Abstract Illustration	Principles for TWSE/TPEx Listed Companies” and Reasons

(2) Does the company voluntarily establish other functional committees in addition to the Remuneration Committee and the Audit Committee? (3) Does the company establish a standard to measure the performance of the Board and implement it annually, and are performance evaluation results submitted to the Board of Directors and referenced when determining the remuneration of individual directors and nominations for reelection? (4) Does the company regularly evaluate the independence of CPAs?	v v v		equipped with financial professional expertise is to be above 40%. It is expected that after the expiration of the current term of office of directors, one additional director equipped with such expertise will join the board of directors in order to achieve the goal. 4. The board of directors has disclosed the policy for the formation of diverse board members on the Company’s website and the Market Observation Post System (MOPS).`。` Presently, the Company has established the Remuneration Committee and Audit Committee, and these two committees are composed of all of the independent directors. Other types of functional committees are continuously being assessed. The Company has established and disclosed the ”Rules for Performance Evaluation of Board of Directors” on the Company’s website, and the evaluation period is from January 1 to December 31 of each year. The result is reported to the board of directors before the end of March of the following year in order to be used as a reference for review and improvement. The evaluation result on the performance of the board of directors of the Company will be used as a reference for election or nomination of directors. The result of 2020 board of directors performance evaluation has been reported to the board of directors’ meeting on March 4, 2021. Please refer to `“`3.3.1 Operations of the Board of Directors”. The Company periodically evaluates the independence of the CPAs on an annual basis, and the result has been approval by the board of directors on March 5, 2020. After examination of the CPAs’ independence evaluation checklist, and the evaluation items include that the CPAs have no direct or material indirect financial benefit relationships with the Company, not assuming the position of director, managerial officer or any job position that has material impack on the audit work of the Company,not engagingin any	None None None

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Evaluation Item	Implementation Status Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons Yes No Abstract Illustration	Implementation Status Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons Yes No Abstract Illustration	Implementation Status Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons Yes No Abstract Illustration	Implementation Status Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons Yes No Abstract Illustration
			financing or guarantee activities with the Company or directors of the Company, not acting or representing as an agent of the Company, or involving any defense or coordination for the Company, not providing non-audit services other than certification and financial tax services to the Company that may have direct impact on the audit word, and not relatives to all of the aforementioned personnel, etc. Accordingly, the independence of the CPAs of the Company has been evaluated properly and confirmed to comply with the requirements
4. Does the company appoint a suitable number of competent personnel and a supervisor responsible for corporate governance matters (including but not limited to providing information for directors and supervisors to perform their functions, assisting directors and supervisors with compliance, handling work related to meetings of the board of directors and the shareholders' meetings, and producing minutes of board meetings and shareholders' meetings)?	v		The Company assigns FAD as the main promotional unit for corporate governance. On May 6, 2021, the board of directors appointed the CFO of the Company to act as the Chief Corporate Governance Officer to be in charge of corporate governance related affairs. The officer is equipped with the experience of the supervisor role in the financial, stock affairs and corporate governance related affairs units of publicly listed companies for more than three years. The main responsibilities and authorities of the corporate governance unit are to provide documents and information necessary for directors to perform duties, to assist the Company and directors in the compliance with the laws and regulations, and to handle affairs for board of directors’ meetings and shareholders’ meetings. The key operational tasks for the current year are as follows: 1. Organize 2020 board of directors’ meetings, functional committees’ meetings, and shareholders’ meetings, including planning and establishment of agenda, mailing of meeting notice within the statutory time-limit, providing all documents and data necessary for the meetings, and also prepare meeting minutes after such meetings. 2. Assist and organize continuing educational courses for directors. 3. Perform 2020 board of directors’ performance evaluation. 4. Summarize amendments of latest laws of the	None

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

Implementation Status Deviations from
“the Corporate
Governance
Best-Practice
Evaluation Item Principles for
Yes No Abstract Illustration
TWSE/TPEx
Listed
Companies” and
Reasons
competent authority, and revise internal
regulations of the Company accordingly.
5. Make public announcements on all material
resolutions reached by the Company and
material information of the Company
according to the laws.
6. Handle registration alternation related affairs.
7. Update and disclose all corporate governance
information, including the composition of
board of directors and functional committees,
audit plan of each year, organization and
management team of the Company, important
internal regulations of the Company and
interested party section, etc.
8. Other matters related to corporate governance.
5. Does the company establish v The definition of interested parties of the None
a communication channel Company includes employees, suppliers,
and build a designated shareholders and customers. The Company has
section on its website for established various communication and compliant
stakeholders (including but channels, such as the spokesperson system,
not limited to shareholders, contact mailbox and website, etc., and feedback
employees, customers, and information of the aforementioned interested
suppliers), as well as handle parties are collected, in order to provide the latest
all the issues they care for in information and communication channels of the
terms of corporate social Company. In addition, international trend and
responsibilities? regulations, customer demands and methods
adopted in the same industry are also considered,
and issues concerned by all interested parties are
identified, in order to list out the responsiveness
and communication method for each issue.
The Company has established the Interested Party
section on the Company’s website, please refer to:
https://tw.transcend-info.com/about/stakeholders
6. Does the company appoint a v The Company has appointed Transfer Agency None
professional shareholder Department of CTBC Bank to handle stock affairs
service agency to deal with of the Company.
shareholder affairs?
7. Information Disclosure
(1) Does the company have a v 1. The Company has established official None
corporate website to disclose corporate website to disclose relevant
both financial standings and information timely. The website address is:
the status of corporate http://tw.transcend-info.com/
governance? 2. Financial information disclosure status:
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			Implementation Status Deviations from
Evaluation Item	Yes No		“the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons Abstract Illustration
	3.		The Chinese and English versions of the Company’s website are established with the Investor Information section, disclosing financial information, and the information is updated periodically for investors’ reference. https://tw.transcend-info.com/about/month_sales https://us.transcend-info.com/about/month_sales Corporate governance information disclosure status: The Company has disclosed the information on the composition of the committees, including board of directors, annual audit plan, company organization and management team, important internal regulations and interested party section of the Company on the Company’s website. http://tw.transcend-info.com/about/board_of_directors

(2) Does the company have other information disclosure channels (e.g. building an English website, appointing designated people to handle information collection and disclosure, creating a spokesman system, webcasting investor conferences)?	v 1. The Company has assigned dedicated personnel to be responsible for the collection and disclosure of the Company’s information, and spokesperson system is implemented according to the regulations. The procedure and presentation files of institutional investors’ conferences are also published on the Company’s website. http://tw.transcend-info.com/about/conference 2. The Company has set up the English website to provide investors from all countries to make inquiries and to understand relevant information. Please refer to: https://us.transcend-info.com/ None v The Company convened the board of directors’ meeting on March 4, 2021 to approve the annual financial statements for 2020, and the annual financial statements were publicly announced and reported on the same day. And financial statements for Q1, Q2 and Q3 of the fiscal year were reported to the board of directors’ meetings on May 7, 2020, August 6, 2020 and November 10, 2020 respectively. And they were also publicly announced and reported on the same day. The Company makes public announcement and reports the annual and quarterly financial statements according to the time limits specified in Article 36 of the Securities and Exchange Act.
(3) Does the company announce and report annual financial statements within two months after the end of each fiscal year, and announce and report Q1, Q2, and Q3 financial statements, as well as monthly operation results, before the prescribed time limit?		v

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Evaluation Item	Yes	Abstract Illustration	Principles for TWSE/TPEx Listed Companies” and Reasons

8. Is there any other important information to facilitate a better understanding of the company’s corporate governance practices (e.g., including but not limited to employee rights, employee wellness, investor relations, supplier relations, rights of stakeholders, directors’ and supervisors’ training records, the implementation of risk management policies and risk evaluation measures, the implementation of customer relations policies, and purchasing insurance for directors and supervisors)?	v	1. Employees’ rights and interests, employee care execution status: Please refer to ”5.5 Labor Relations” of this Annual Report. 2. Investor relationship, supplier relationship, interested parties’ rights and customer policy execution status: The Company has set up the Interested Party section on the Company’s website. https://tw.transcend-info.com/about/stakeholders 3. Continuing education status of directors and supervisors: Please refer to ”3.3.5.Continuing Education/Training of Directors in 2020” of this Annual Report. 4. Risk Management Policies and risk evaluation measures execution status: Please refer to ”7.6 Analysis of Risk Management” of this Annual Report and the Company’s website: https://tw.transcend-info.com/about/riskmanagementpolicy	None
		__ 5. Customer policy execution status: The Company rigorously complies with the customer confidentiality rules and the Ethical Corporate Management Best-Practice Principles. In addition, the Company maintains excellent supply relationship with customers and has established different internal teams to service customers. 6. Status on the Company’s purchase of liability insurance for directors and supervisors: The Company has purchased directors’ and officers liability insurance, which has been approved by the board of directors on November 10, 2020 and has been publicly announced on MOPS. 7. The Company emphasizes the cultivation of senior management talents and promotes R&D Vice General Manager, Sales Vice General Manager and Directors of all divisions. The Company also focuses on the management capability and professional competence of senior managers, and through the transfer of different duties, senior managers are able to develop different attributes and capabilities, thereby achieving integration and utilization to enhance decision making and understanding of management principles. Accordingly, candidates for board of directors and CEO can

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Please explain the improvements which have been made in accordance with the results of the Corporate Governance Evaluation System released by the Corporate Governance Center, Taiwan Stock Exchange, and provide the priority enhancement measures.
(1) Status of improvement:
- A. The Company has revised the intellectual property management plan associated with the operation objectives, and intellectual property related matters will be reported to the board of directors at the fourth quarter of each year. The last report date was November 10, 2020. The execution status of the current year is also disclosed on the Company’s website. -
- https://tw.transcend info.com/about/intellectual_property
- B. The Company has established the structure of information security risk management, and information security policy and specific management plans have been published on the Company’s website. The information of security governance status is also reported to the board of directors periodically. The last report date was November 10, 2020. -
- https://tw.transcend info.com/about/information_security_management
- B. The Company has established the structure of information security risk management, and information security policy and specific management plans have been published on the Company’s website. The information of security governance status is also reported to the board of directors periodically. The last report date was November 10, 2020. -
- https://tw.transcend info.com/about/information_security_management
(2) For the two items without scores, explanations are provided in the following:
- A. Protect shareholders’ interests and fair treatment to shareholders: Starting from the second half of 2020, the Company has performed the preparation of the English version of 2020 Annual report of the Annual Regular Shareholders’ Meeting, and the annual report will be uploaded onto MOPS seven days before the convention of the 2021 Annual Regular Shareholders’ Meeting.
- B. Enhancing information transparency: The Company has started the preparation of the English version of the parent company only financial statements since 2020, and the financial statements will be uploaded onto the MPOS seven days before the convention of the 2021 Annual Regular Shareholders’ Meeting.

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3.3.4. Composition, Responsibilities and Operations of the Remuneration Committee

To achieve sound corporate governance and to enhance remuneration management function, the Company has established the Remuneration Committee in accordance with the ”Regulations Governing the Appointment and Exercise of Powers by the Remuneration Committee of a Company Whose Stock is Listed on the Taiwan Stock Exchange or the Taipei Exchange”. The number of members of the Remuneration Committee of the Company is three, and the members are to be appointed in accordance with the resolution of the board of directors. The committee is formed by three external experts satisfying the professional qualification and independence requirements. For the Remuneration Committee meetings of the Company, at least two regular meetings are convened annually in order to periodically review the remuneration regulations of the Company and to provide recommendations on amendments, to periodically review the performance evaluation of directors and managerial officers and the policy, system, standard and structure for the salary and remuneration, as well as to periodically evaluate and establish salary and remuneration of directors and managerial officers of the Company. For the content of the performance evaluation standards for directors and managerial officers, please refer to ”3.2.7. The ratio of total remuneration paid by the Company and by all companies included in the consolidated financial statements for the two most recent fiscal years to Directors, General Manager and Vice General Managers of the Company, to the net income” and ”3.2.8. The policies, standards, and portfolios for the payment of remuneration, the procedures for determining remuneration, and the correlation with risks and business performance”.

1. Information on the members of the Remuneration Committee

Title	Criteria Name	Meets One of the Following Professional Qualification equirements, Together with at Least Five Years’ Work Experience	Meets One of the Following Professional Qualification equirements, Together with at Least Five Years’ Work Experience	Meets One of the Following Professional Qualification equirements, Together with at Least Five Years’ Work Experience	Independence Criteria	Independence Criteria	Independence Criteria	Independence Criteria	Independence Criteria	Independence Criteria	Independence Criteria	Independence Criteria	Independence Criteria	Independence Criteria	Number of Other Public Companies in Which the Individual is Concurrently Serving as an Remuneration Committee Member
		An instructor or higher position in a department of commerce, law, finance,accounting, or other academic department related to the business needs of the Company in a public or private junior college, college or university	A judge, public prosecutor, attorney, Certified Public Accountant, or other professional or technical specialist who has passed a national examination and been awarded a certificate in a profession necessary for the business of the Compan	Has work experience in the areas of commerce, law, finance, or accounting, or otherwise necessary for the business of the Company	1	2	3	4	5	6	7	8	9	10
Independent Director	Chen,Yi-Liang			v	v	v	v	v	v	v	v	v	v	v	1
Independent Director	Chen,Lo-Min			v	v	v	v	v	v	v	v	v	v	v	1
Independent Director	Wang,Yi-Hsin	v			v	v	v	v	v	v	v	v	v	v	0

Independence Criteria:

Not an employee of the company or any of its affiliates.
Not a director or supervisor of the company or any of its affiliates. Not apply to independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, a public company and its parent or subsidiary or a subsidiary of the same parent.
Not a natural-person shareholder who holds shares, together with those held by the person's spouse, minor children, or held by the person under others' names, in an aggregate of one percent or more of the total number of issued shares of the company or ranking in the top 10 in holdings.

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Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship, of a managerial officer under subparagraph 1 or any of the persons in the preceding subparagraph 2.
Not a director, supervisor, or employee of a corporate shareholder that directly holds five percent or more of the total number of issued shares of the company, or that ranks among the top five in shareholdings, or that designates its representative to serve as a director or supervisor of the company under Article 27, paragraph 1 or 2 of the Company Act. Not apply to independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, a public company and its parent or subsidiary or a subsidiary of the same parent.
If a majority of the company's director seats or voting shares and those of any other company are controlled by the same person: not a director, supervisor, or employee of that other company. Not apply to independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, a public company and its parent or subsidiary or a subsidiary of the same parent.
If the chairperson, general manager, or person holding an equivalent position of the company and a person in any of those positions at another company or institution are the same person or are spouses: not a director (or governor), supervisor, or employee of that other company or institution. Not apply to independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, a public company and its parent or subsidiary or a subsidiary of the same parent.
Not a director, supervisor, officer, or shareholder holding five percent or more of the shares, of a specified company or institution that has a financial or business relationship with the company. Not apply to independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, a public company and its parent or subsidiary or a subsidiary of the same parent, if the specified company or institution holds 20 percent or more and no more than 50 percent of the total number of issued shares of the public company.
Not a professional individual who, or an owner, partner, director, supervisor, or officer of a sole proprietorship, partnership, company, or institution that, provides auditing services to the company or any affiliate of the company, or that provides commercial, legal, financial, accounting or related services to the company or any affiliate of the company for which the provider in the past 2 years has received cumulative compensation exceeding NT$500,000, or a spouse thereof; provided, this restriction does not apply to a member of the remuneration committee, public tender offer review committee, or special committee for merger/consolidation and acquisition, who exercises powers pursuant to the Act or to the Business Mergers and Acquisitions Act or related laws or regulations.
Not been a person of any conditions defined in Article 30 of the Company Law.

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2. Operation of Remuneration Committee:

(1) There are three members in the Remuneration Committee.
(2) Term of service: June 14, 2018 to June 13, 2021.

A total of two Remuneration Committee meetings were held in the previous period. The attendance record of the Remuneration Committee members was as follows:

Title Name Attendance in Person By Proxy Attendance Rate (%) Remarks
Convener Chen,Yi-Liang 2 0 100%
Member Wang,Yi-Hsin 2 0 100%
Member Chen,Lo-Min 2 0 100%
Other mentionable items: 1. If the board of directors declines to adopt or modifies a recommendation of the remuneration committee, it should specify the date of the meeting, session, content of the motion, resolution by the board of directors, and the Company’s response to the remuneration committee’s opinion: None. Please refer to “3.3.12 Major resolutions of Shareholders’ Meeting, Board of Directors Meetings, Audit Committee meetings and Remuneration Committee meetings in the most recent year and up to the publication date of this Annual Report” for major resolutions of Remuneration Committee meetings in the most recent year and up to the publication date of this Annual Report. 2. Resolutions of the remuneration committee objected to by members or expressed
reservations and recorded or declared in writing, the date of the meeting, session,
content of the motion, all members’ opinions and the response to members’ opinion
should be specified:
None.

If the board of directors declines to adopt or modifies a recommendation of the remuneration committee, it should specify the date of the meeting, session, content of the motion, resolution by the board of directors, and the Company’s response to the remuneration committee’s opinion:
None. Please refer to “3.3.12 Major resolutions of Shareholders’ Meeting, Board of Directors Meetings, Audit Committee meetings and Remuneration Committee meetings in the most recent year and up to the publication date of this Annual Report” for major resolutions of Remuneration Committee meetings in the most recent year and up to the publication date of this Annual Report.
Resolutions of the remuneration committee objected to by members or expressed reservations and recorded or declared in writing, the date of the meeting, session, content of the motion, all members’ opinions and the response to members’ opinion should be specified:

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3.3.5. Continuing Education/Training of Directors in 2020

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

Title/Name Date Host by Training/Speech Title Hours
Insider Trading Prevention and
2020/09/30 [Securities and Futures ] Insider Equity Trading Information 3
Institute
Director/ Seminar
Shu, Chung-Won The Impact of the Latest Tax Law
Taiwan Corporate
2020/08/06 Changes on Business Operations 3
Governance Association
and Its Response
Insider Trading Prevention and
2020/09/24 [Securities and Futures ] Insider Equity Trading Information 3
Institute
Director/ Seminar
Shu, Chung-Cheng The Impact of the Latest Tax Law
Taiwan Corporate
2020/08/06 Changes on Business Operations 3
Governance Association
and Its Response
Insider Trading Prevention and
2020/09/30 [Securities and Futures ] Insider Equity Trading Information 3
Institute
Director/ Seminar
Chui, Li-Chu The Impact of the Latest Tax Law
Taiwan Corporate
2020/08/06 Changes on Business Operations 3
Governance Association
and Its Response
Financial Statements Fraud Case
2020/11/24 [Accounting Research and ] Study and Discussion on How to 3
Development Foundation Discover Financial Statements
Director/
Critical Information
Hsu, Chia-Hsian
The Impact of the Latest Tax Law
Taiwan Corporate
2020/08/06 Changes on Business Operations 3
Governance Association
and Its Response
Insider Trading Prevention and
2020/09/24 [Securities and Futures ] Insider Equity Trading Information 3
Institute
Director/ Seminar
Wang, Jen-Ming The Impact of the Latest Tax Law
Taiwan Corporate
2020/08/06 Changes on Business Operations 3
Governance Association
and Its Response
Insider Trading Prevention and
2020/09/24 [Securities and Futures ] Insider Equity Trading Information 3
Institute
Director/ Seminar
Li, Tseng-Ho The Impact of the Latest Tax Law
Taiwan Corporate
2020/08/06 Changes on Business Operations 3
Governance Association
and Its Response
How Companies Should Perform
Taiwan Corporate Fraud Detection Properly and
2020/08/21 3
Independent Governance Association Enforce Whistleblowing for
Director/ Enhanced Corporate Governance
Chen, Lo-Min The Impact of the Latest Tax Law
Taiwan Corporate
2020/08/06 Changes on Business Operations 3
Governance Association
and Its Response
Discussion on Anti-Money
Independent 2020/11/12 [Securities and Futures ] Laundering and Counter-Terrorism 3
Institute
Director/ Financing in Practice
Wang, Yi-Hsin 2020/10/30 [The Institute of Internal ] 2020 Seminar: Understand Trend 8
Auditors-Chinese and Improve Innovation Energy
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Title/Name	Date	Hostby	Training/Speech Title	Hours
Independent Director/ Chen, Yi-Liang	2020/08/21	Accounting Research and Development Foundation	“Faked Foreign Investment and Illegal Securities Trading” Case Study and Discussion on Legal Liabilities	3
	2020/08/06	Taiwan Corporate Governance Association	The Impact of the Latest Tax Law Changes on Business Operations andItsResponse	3

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3.3.6. Fulfillment of CSR and Deviations from the "Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies"

			Implementation Status Deviations from “the	Implementation Status Deviations from “the
Evaluation Item	Yes No		Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons Abstract Explanation
1. Does the company assess ESG risks associated with its operations based on the principle of materiality, and establish related risk management policies or strategies?	v 1. 2.		During the pursuit of sustainable operation and profit, the Company also conducts relevant risk assessment on environment, society and corporate governance related to the company operation in accordance with the materiality principle. The Company actively implements corporate social responsibility in order to comply with the international trend of environment balance, society and corporate governance development and also values the rights and interests of the interested parties, as well as incorporates such matters into the management directives and operating activities of the Company, thereby achieving the goal of sustainable operation. To enhance the corporate governance and to establish sound risk management operation, the board of directors has approved the Risk Management Policies on November 10, 2020, in order to provide guidance on effective identification, measurement, supervision and control of all kinds of risks to all units of the Company during the performance of duties, and to also control the possible risks within the acceptable level, thereby achieving the goal of reasonable risk and compensation as well as the objective of sustainable operation of the Company. Please refer to the Company’s website: https://tw.transcend-info.com/about/risk_management_ policy None
2. Does the company establish exclusively (or concurrently) dedicated first-line managers authorized by the board to be in charge of proposing the corporate social responsibility policies and reporting to the board?	v	Transcend Information appoints the Brand Marketing division to be the main unit for promoting the corporate social responsibility, and the directors of other divisions assume the positions of team leader according to the nature of business. The director of the Brand Marketing division uniformly manages and is dedicated in the social participation and feedback activities in addition to the promotion of corporate social responsibility. The Brand Marketing division also discusses routine business promotion affairs and performs information collection and summarization as well as reviews the execution status of the corporate social responsibility with the Chairman. Furthermore, the division also provides report to the board of directors on important		None

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Implementation Status Deviations from “the
Corporate Social
Responsibility
Best-Practice
Evaluation Item
Yes No Abstract Explanation Principles for
TWSE/TPEx Listed
Companies” and
Reasons
promotion items once annually. Please refer to the
Company’s website for detailed information:
-
https://tw.transcend info.com/about/social_responsibility
3. Environmental issues Transcend adopts the product life cycle notion and
(1) Does the company v performs planning based on the characteristics of our None
establish proper industry and also obtains the ISO14001:2015
environmental environmental management system certification.
management systems Accordingly, we continue to reduce negative impacts
based on the characteristics on the environment and improve our environmental
of their industries? performance.
(2) Does the company v 1. Products: During the product manufacturing None
endeavor to utilize all process, the Company uses parts complying with
resources more efficiently RoHS EU environmental protection standards,
and use renewable and all of the Company’s products qualify for the
materials which have low QC080000 certification in order to reduce
impact on the negative impacts on the environment.
environment? 2. Energy saving:
i. The factory replaced the old eco-friendly trucks
in 2020, and purchased new eco-friendly diesel
trucks. In the future, the Company will
continue to replace obsolete trucks, and it is
expected that all of the trucks will be replaced
to new eco-friendly trucks in 2021, in order to
comply with the environmental protection laws
and regulations and to reduce emission of air
pollution.
ii. During 2020–2021 the factory will implement
the manufacturing process equipment – reflow
oven replacement project, and it is expected to
reduce the power consumption by
approximately 223,520 degrees per year. In
2021, the Company will also comprehensively
review the internal documents and forms and
will be dedicated in the promotion of document
digitization, in order to achieve the effects of
sustainable environment, energy saving and
carbon reduction.
3. Resource recycling: The wastepaper, waste
plastics, waste metals and lighting fixtures
generated by the Company daily are recycled by
qualified recycling vendor periodically.
(3) Does the company v 1. The mitigation and adaption of climate change are None
evaluate the potential risks the main issues for sustainable development
and opportunities in concerned by the corporates nowadays. The
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			Implementation Status Deviations from “the	Implementation Status Deviations from “the
Evaluation Item	Yes No		Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons Abstract Explanation
climate change with regard to the present and future of its business, and take appropriate action to counter climate change issues?	2. 3.		climate change generally causes the temperature to rise, which indirectly affects the loading of the air conditioning equipment of companies. To cope with the impact on the company operation, the Company performs machine equipment maintenance and also replaces relatively older equipment in order to prevent relatively higher carbon emission, thereby reducing the generation of greenhouse gas. While facing potential impacts on the caused by climate change, the Company also understands the opportunities for operation improvement associated with relevant responsive measure. For example, during the replacement of old machines with new ones, the Company cooperates with the government subsidy policy and applies for relevant energy-saving subsidy and incentives. To create a friendly environment, the Company enhances green manufacturing and develops technologies beneficial to the environment, including semi-high PCB and new packaging materials, etc. The Company also develops relevant manufacturing processes to reduce energy consumption in order to achieve a low-carbon future. Please refer to the Company’s website for details: https://tw.transcend-info.com/about/energysaving https://tw.transcend-info.com/about/green Presently, the Company has passed environment related certifications, including ISO 14001, with valid period: 2018.09.15–2021.11.28; and QC080000, with valid period: 2019.09.04– 2021.10.24.
(4) Does the company take inventory of its greenhouse gas emissions, water consumption, and total weight of waste in the last two years, and implement policies on energy efficiency and carbon dioxide reduction, greenhouse gas reduction, water reduction, or waste management?	v	1.	The Company evaluates the risks and opportunities of all units in order to establish environmental objective plans and to execute follow-up appropriately every year. Some of the environmental objective plans are described in the following: 2018: Replacement project of air conditioning cooled water chiller unit at office and factory buildings 2019: Replacement project of factory warehouse lighting fixture 2020: Replacement project of road lamp power consumption reduction at office and factory	None

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		Implementation Status Deviations from “the
Evaluation Item	Yes No	Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons Abstract Explanation
		buildings 2021: Complete eco-friendly vehicle replacements for all existing vehicles The Company establishes environmental objective plans and executes follow-up appropriately every year. For relevant objective plans and specific execution measures, please refer to the Company’s website for details: https://tw.transcend-info.com/about/energysaving 2. The carbon dioxide emission quantities of the Company in 2020 and 2019 were 4,261 tons and 4,203 tons respectively; the water consumption was 30,685 degrees and 27,921 degrees respectively. Also, the primary source of waste generated by the Company was living waste, and the total weight of resource recycled in these two years was157,511 kg and 224,447 kg respectively; for the general waste, the total weights were both 120,000 kg for these two years.
4. Social issues (1) Does the company formulate appropriate management policies and procedures according to relevant regulations and the International Bill of Human Rights?	v	The Company is committed to complying with the national labor laws, “RBA Responsible Business Alliance Code of Conduct” and other applicable industrial standards and international conventions. The Company also continues to improve the working environment and employee welfare for all employees. To achieve such commitment, the Company periodically identifies employee occupational safety and health risks, material environmental concerns, and entrusts a third-party authentication institution to perform audit periodically. Please refer to the Company’s website for detailed information: https://tw.transcend-info.com/about/human None The Company has established management regulations for employee welfare measures and employee bonus system that are linked to the profit status of the Company. Each quarter, the Company shares the business outcome with employees and provides rewards to employees for their efforts in routine works. In addition, to help employees achieve work-life balance, the Company has set up recreation facilities and gym at 1stfloor and B1 floor of the building in order to allow employees to relax andrelieve pressure.Furthermore,the Company None
(2) Does the company have reasonable employee benefit measures (including salaries, leave, and other benefits), and do business performance or results reflect on employee salaries?	v	The Company has established management regulations for employee welfare measures and employee bonus system that are linked to the profit status of the Company. Each quarter, the Company shares the business outcome with employees and provides rewards to employees for their efforts in routine works. In addition, to help employees achieve work-life balance, the Company has set up recreation facilities and gym at 1stfloor and B1 floor of the building in order to allow employees to relax andrelieve pressure.Furthermore,the Company

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(3) Does the company provide a healthy and safe working environment and organize training on health and safety for its employees on a regular basis?	v		implements annual health examinations and arranges physician to provide on-site periodic consultation in order to care for and protect the employees’ health properly. Please refer to ”5.5.1 Employee benefit plans, continuing education, training, retirement systems, the status of their implementation, and the status of labor agreements and measures for preserving employees' rights and interests” and corporate website: https://tw.transcend-info.com/about/employee_benifit 1. The Company implements operating environment monitoring and testing semi-annually in order to confirm the working environment in the factory. (Executed in accordance with the “Regulations for Implementing Labor Working Environment Monitoring and Testing”). 2. Plans implemented by the Company in the factory: Human-factor engineering, abnormal workload, illegal infringement, health protection and maternity protection. (Comply with the requirements specified in the “Occupational Safety and Health Act”). 3. For the safety and health education, the Company implements one hour of safety and health on-job educational training annually (comply with the requirement of three hours in three years specified in the “Occupational Safety and Health Education and Training Rules”). 4. The Company sets up the health management room and also employs full-time nursing personnel according to the provisions of health protection laws in order to handle on-site worker health service affairs. The Company also contracts a specialized physician for labor health service in order to provide the monthly on-site service in the office and factory. 5. The Company provides regular physical examination for all newly on-board employees, and the expenses are borne by the Company. Please refer to the Company’s website for detailed information: https://tw.transcend-info.com/about/healthy_safety	None

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Evaluation Item			Implementation Status Deviations from “the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons Abstract Explanation	Implementation Status Deviations from “the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons Abstract Explanation
	Yes No
(4) Does the company provide its employees with career development and training sessions?	v		The Company establishes annual education and training plan to provide knowledge necessary for employees to perform works. Supervisors of all units also provide training planning necessary for the career and competence development of their department staff. None
(5) Do the company's products and services comply with relevant laws and international standards in relation to customer health and safety, customer privacy, and marketing and labeling of products and services, and are relevant consumer protection and grievance procedure policies implemented? (6) Does the company implement supplier management policies, requiring suppliers to observe relevant regulations on environmental protection, occupational health and safety, or labor and human rights? If so, describe the results.	v v		Transcend is a global leading manufacturer in consumer electronics and industrial products, and recommendations on products provided by end-users are the most important basis for the Company’s product improvement. The Company has established the Technical-Support Division in charge of the handling of product related issues for customers and has also established the customers’ feedback handling operation procedure, in order to provide timely problem solving and professional service to customers. None When adding a new supplier, the Company requests the supplier to sign the environmental protection regulations compliance guarantee, supplier ethics undertaking and supplier social responsibility undertaking, or the supplier is requested to provide relevant responsibility statements. The Company also conducts supplier evaluation procedure on an annual basis. Please refer to the Company’s website for detailed information: https://tw.transcend-info.com/about/vendor_management None
5. Does the company reference internationally accepted reporting standards or guidelines, and prepare reports that disclose non-financial information of the company, such as corporate social responsibility reports? Do the reports above obtain assurance from a third party verification unit?		v	The Company has not yet prepared the Corporate Social Responsibility Report (CSR or ESG Report).	In accordance with relevant laws and regulations, the Company will prepare and publicly announce the 2022 ESG Report in 2023.

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Describe the difference, if any, between actual practice and the corporate social responsibility principles, if the company has implemented such principles based on the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies:

The Company has established the “Corporate Social Responsibility Best-Practice Principles” in 2014, having no major difference from the “Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies”, and there have been no major abnormalities in the actual operation.

Other useful information for explaining the status of corporate social responsibility practices: (1) Environmental protection: Please refer to “5.4. Environmental Protection Expenditures”.
(2) Consumers’ rights and interests: The Company has established the dedicated Customer Service Center to handle customer complaint issues. The direct-sale stores of the Company also provide the service of product return and exchange to consumers.
(3) Employees’ rights and interests: Please refer to “5.5.1 Employee benefit plans, continuing education, training, retirement systems, the status of their implementation, and the status of labor agreements and measures for preserving employees' rights and interests”.
(4) Safety and health: The Company has obtained the OHSAS18001:2007/TOSHMS occupational safety and health management system certification for the workplace, and has also qualified the TOSHMS certification standard (CNS 15506).
(5) Products: In terms of the quality management, the Company has obtained the ISO 9001 quality management system certification. With outstanding product design and research and development strength, the Company has received the honor of Taiwan Excellence Award for consecutive years, thereby establishing a quality brand image.
(6) Specific promotion plan and implementation outcome for corporate social responsibility: The Company upholds the value of creating a better future for the society and actively engages in social participation. Through long-term support in sports related sponsorship and numerous domestic and overseas youth cultivation events, the Company is active in promoting the development of youth and sports in Taiwan. The Company collaborates with the Chinese Taipei School Sport Federation and provides schematic supports in sports events, such as HTV and HBL contests, etc., through monetary sponsorship and product sponsorship. In addition, to further promote the junior league baseball in Taiwan, the Company launches the remote baseball seed project and sponsors remote elementary schools with hardware equipment and materials, in order to fulfill the corporates responsibility and to return to the society. The youth sports development outcome achieved by the Company has been well recognized, and the Company has received the honor of Sports Promoter Award for seven consecutive years. The Company has further received the “Bronze Medal in Sponsorship Category” for the Sports Promoter Award in 2020.

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3.3.7. Fulfillment of Ethical Corporate Management and Deviations from the "Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies"

Evaluation Item Implementation Status
Deviations from the
“Ethical Corporate
Management Best
Practice Principles
for TWSE/GTSM
Listed Companies”
and Reasons
Yes No
Abstract Illustration

1. Establishment of ethical
corporate management
policies and programs
(1) Does the company have a
Board-approved ethical
corporate management
policy and stated in its
regulations and external
correspondence the
ethical corporate
management policy and
practices, as well as the
active commitment of the
Board of Directors and
management towards
enforcement of such
policy?
(2) Does the company have
mechanisms in place to
assess the risk of
unethical conduct, and
perform regular analysis
and assessment of
business activities with
higher risk of unethical
conduct within the scope
of business? Does the
company implement
programs to prevent
unethical conduct based
on the above and ensure
the programs cover at
least the matters described
in Paragraph 2, Article 7
of the Ethical Corporate
Management Best
Practice Principles for
TWSE/TPEx Listed
Companies? v
The “Ethical Corporate Management Best-Practice
Principles” of the Company has been approved in the
board of directors’ meeting in 2014, and the
regulations of the “Codes of Ethical Conduct for
Directors and Managerial Officers” and“Codes of
Ethical Conduct for Employees” , etc. have also been
approved in the board of directors’ meeting in 2013.
The Company requests directors and all employees to
comply with such provisions accordingly. Please refer
to the Company’s website:
https://tw.transcend-info.com/about/policies
None

v
The Company has established the “Ethical Corporate
Management Best-Practice Principles”, “Codes of
Ethical Conduct for Directors and Managerial
Officers” and “Codes of Ethical Conduct for
Employees”, and all of these provisions have covered
the operating activities of relatively higher risk of
unethical conduct described in the content of all
subparagraphs of Paragraph 2 of Article 7 of the
“Ethical
Corporate
Management
Best-Practice
Principles for TWSE/GTSM Listed Companies” and
other operating scope.
Ethical corporate management and ethical code of
conduct are the core guidelines for the Company. The
contents of these provisions are published on the
Company’s website for relevant personnel’s review at
any time.
The Company provides internal and external
reporting channels. In case where a violation is found
to be true, different level of disciplinary action is
imposed depending upon the severity of the violation.
None

Evaluation Item	Implementation Status Deviations from the “Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies” and Reasons Yes No Abstract Illustration
1. Establishment of ethical corporate management policies and programs (1) Does the company have a Board-approved ethical corporate management policy and stated in its regulations and external correspondence the ethical corporate management policy and practices, as well as the active commitment of the Board of Directors and management towards enforcement of such policy? (2) Does the company have mechanisms in place to assess the risk of unethical conduct, and perform regular analysis and assessment of business activities with higher risk of unethical conduct within the scope of business? Does the company implement programs to prevent unethical conduct based on the above and ensure the programs cover at least the matters described in Paragraph 2, Article 7 of the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies?	v The “Ethical Corporate Management Best-Practice Principles” of the Company has been approved in the board of directors’ meeting in 2014, and the regulations of the “Codes of Ethical Conduct for Directors and Managerial Officers” and`“`Codes of Ethical Conduct for Employees” , etc. have also been approved in the board of directors’ meeting in 2013. The Company requests directors and all employees to comply with such provisions accordingly. Please refer to the Company’s website: https://tw.transcend-info.com/about/policies None v The Company has established the “Ethical Corporate Management Best-Practice Principles”, “Codes of Ethical Conduct for Directors and Managerial Officers” and “Codes of Ethical Conduct for Employees”, and all of these provisions have covered the operating activities of relatively higher risk of unethical conduct described in the content of all subparagraphs of Paragraph 2 of Article 7 of the “Ethical Corporate Management Best-Practice Principles for TWSE/GTSM Listed Companies” and other operating scope. Ethical corporate management and ethical code of conduct are the core guidelines for the Company. The contents of these provisions are published on the Company’s website for relevant personnel’s review at any time. The Company provides internal and external reporting channels. In case where a violation is found to be true, different level of disciplinary action is imposed depending upon the severity of the violation. None

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Implementation Status Deviations from the
“Ethical Corporate
Management Best
Evaluation Item Practice Principles
Yes No Abstract Illustration
for TWSE/GTSM
Listed Companies”
and Reasons
(3) Does the company v The Company has established the “Ethical Corporate None
provide clearly the Management Best-Practice Principles”, “Codes of
operating procedures, Ethical Conduct for Directors and Managerial
code of conduct, Officers” and ”Codes of Ethical Conduct for
disciplinary actions, and Employees” . All of these provisions are published on
appeal procedures in the the Company’s website for relevant personnel’s
programs against review. The Company also requests all employees
unethical conduct? Does and directors to comply with these provisions
the company enforce the accordingly.
programs above
effectively and perform
regular reviews and
amendments?
2. Fulfill operations integrity
policy
(1) Does the company v Prior to engaging in business dealings with suppliers, None
evaluate business the Company conducts evaluation and review process
partners’ ethical records on all aspects of the suppliers, and requests the
and include ethics-related suppliers to provide the “Supplier Ethics
clauses in business Undertaking.” Prior to engaging in business dealings
contracts? with customers, the Company evaluates the financial
and credit status according to the credit investigation
policy of the Company. In case where transaction
counterparty involves in unethical conducts, the
Company may terminate or rescind contracts at any
time.
(2) Does the company have a v The Company assigns the Financial and Accounting None
unit responsible for Department and the Administration Department to be
ethical corporate the concurrent units responsible for the establishment
management on a of ethical corporate management policies and
full-time basis under the execution of supervision, and according to the job
Board of Directors which duties and scope of each unit, including the
reports the ethical establishment and revision of the “Ethical Corporate
corporate management Management Best-Practice Principles,” organizing
policy and programs ethical corporate management related propaganda and
against unethical conduct educational training, etc., in order to ensure the
regularly (at least once a thorough implementation of ethical corporate
year) to the Board of management principles. Important items and relevant
Directors while affairs promotion status are reported to the board of
overseeing such directors once annually.
operations?
(3) Does the company v The Company has established the “Codes of Ethical None
establish policies to Conduct for Directors and Managerial Officers”,
prevent conflicts of “Codes of Ethical Conduct for Employees”,
interest and provide “Employee Code of Conduct and Reward and
appropriate Discipline Management Regulations”, “Regulations
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	Implementation Status Deviations from the
Evaluation Item	“Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies” and Reasons Yes No Abstract Illustration
communication channels, and implement it?	Governing Procedure for Board of Directors Meetings” and “Audit Committee Charter.” All of these provisions have clearly specified matters requiring recusal in case of encountering the situation of conflict of interest. The Company provides complaint channel, such that in case where any director, managerial officer or employee is verified to have violated the code of ethical conduct, then such violator shall be punished in accordance with the disciplinary measures specified in the code of ethical conduct.
(4) Does the company have effective accounting and internal control systems in place to implement ethical corporate management? Does the internal audit unit follow the results of unethical conduct risk assessments and devise audit plans to audit the systems accordingly to prevent unethical conduct, or hire outside accountants to perform the audits? v The Company prepares the financial statements in accordance with the International Financial Reporting Standards (IFRSs), International Accounting Standards (IAS) and interpretations. For the 2020 consolidated financial statements, the PwC Taiwan has issued the audit report with unqualified opinion. The Company establishes an internal control system for all operating activities. The internal audit unit performs audit work according to the audit plan and also reports to the Audit Committee and board of directors periodically. None (5) Does the company regularly hold internal and external educational trainings on operational integrity? v To establish the corporate culture of ethical management and sound development, the Company has constructed a proper business operation structure and has established the “Ethical Corporate Management Best-Practice Principles,” and these principles are implemented in the daily operation. The new employees’ orientation training includes ethical management related education courses, and the content mainly covers the courses employee ethical conduct, employee code of conduct, ethics and fair trade and duty of confidentiality, etc. In 2020, four orientation training sessions were held, and a total of 69 people participated in these sessions. The period of each training session is five hours. The course materials are provided to employees after the orientation training. The Company also places the course contents related to internal material information handling operation and insider trading related courses in the Company’s system and website as references for directors,managerial officers and None

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Implementation Status Deviations from the
“Ethical Corporate
Management Best
Evaluation Item Practice Principles
Yes No Abstract Illustration
for TWSE/GTSM
Listed Companies”
and Reasons
employees.
3. Operation of the integrity
channel
(1) Does the company v The Company has established the “Regulations for None
establish both a Company’s Whistleblowing Reports on Illegal and
reward/punishment Unethical Conducts” and has also set up specific
system and an integrity whistleblowing mailbox and employee suggestion
hotline? Can the accused box in order to allow internal and external personnel
be reached by an to file complaint or whistleblowing reports to the
appropriate person for Company. After the receiving unit clarifies relevant
follow-up? facts and evidence, it is reported to the management
level for handling.
(2) Does the company have v The content of the “Regulations for Company’s None
in place standard Whistleblowing Reports on Illegal and Unethical
operating procedures for Conducts” established by the Company specifies the
investigating accusation handling procedures related to the filing of
cases, as well as complaints, investigation and post-investigation
follow-up actions and measures, and the whistleblower’s identity is kept
relevant ost-investigation strictly confidential.
confidentiality measures?
(3) Does the company v The “Regulations for Company’s Whistleblowing None
provide proper Reports on Illegal and Unethical Conducts” of the
whistleblower protection? Company also specifies that the whistleblower shall
not be subject to unfavorable disposal due to the
whistleblowing report, and the Company shall
provide sufficient protection to all whistleblowers.
4. Strengthening information
disclosure
(1) Does the company v The Company has disclosed relevant ethical None
disclose its ethical management principles on the Company’s website
corporate management and MOPS. The Company has also set up the Ethical
policies and the results of Management section on the Company’s website and
its implementation on the has disclosed ethical management related information
company’s website and in the annual report.
MOPS? https://tw.transcend-info.com/about/integrity
5. If the company has established the ethical corporate management policies based on the Ethical Corporate
Management Best-Practice Principles for TWSE/TPEx Listed Companies, please describe any discrepancy
between the policies and their implementation:
The Company has established the “Ethical Corporate Management Best-Practice Principles” in 2014, having no
major difference from the “”Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed
Companies,” and there have been no major abnormalities in the actual operation.
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If the company has established the ethical corporate management policies based on the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies, please describe any discrepancy between the policies and their implementation:

The Company has established the “Ethical Corporate Management Best-Practice Principles” in 2014, having no major difference from the “”Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies,” and there have been no major abnormalities in the actual operation.

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Other important information to facilitate a better understanding of the company’s ethical corporate management policies (e.g., review and amend its policies)
(1) The Company periodically reviews the update status of the “Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies” and timely reviews and conducts evaluation to determine necessary amendments.
(2) In the provisions of the “Codes of Ethical Conduct for Directors and Managerial Officers”, “Codes of Ethical Conduct for Employees” and the “Employee Code of Conduct and Reward and Discipline Management Regulations,” the Company has specified that unethical conducts are prohibited, conflict of interests shall be avoided and obtaining of improper personal benefits and interests shall be prevented.
(3) In the “Audit Committee Charter” and “Regulations Governing Procedure for Board of Directors Meetings,” the Company has specified the directors’ recusal system for conflict of interest.
(4) To implement the education on ethical management, the Company includes the ethical management in the course content of new employees’ orientation training, thereby allowing new employees to understand the Company’s policy and direction on ethical management.
(5) The Company has established the “Patent Management Regulations” and “Intellectual Property Right Management Control Operation” in order to serve as the basis for the obtaining, protection and management of intangible assets.

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3.3.8. Corporate Governance Guidelines and Regulations
Please refer to the Company’s website at http://tw.transcend info.com/about/policies
3.3.9. Other Important Information Regarding Corporate Governance

The Company has established the “Procedures for Handling Material Inside Information”. The Company informs all employees via e-mail when newly establishment of the procedures and subsequent amendments, and also makes public announcement through the intranet of the Company for employees’ review and use. All departments and employees handling possible material information and disclosure of such information are required to comply with these procedures as well as laws and regulations. “Procedures for Handling Material Inside Information” has been disclosed on the Company’s website.

Please refer to: http://tw.transcend-info.com/about/policies

To improve the information security management system, the Company establishes the information security policy according to the ISMS information security management system, and the objective is to reduce information risk to the acceptable level through control methods. In 2018, the Company has established the Information Security Task Force and also stipulated the “Information Security Management System Work Instructions.” The Company continues to enhance the internal personnel training. In case of discovery or observation of any abnormal events, the discovering personnel are required to report to the information system unit immediately, and important details shall be recorded. The information system unit personnel shall determine whether the case is classified as a core business incident depending upon the actual condition and shall complete the repair within 24 hours. In case where the case involves civil or criminal liabilities, it is also reported to prosecution unit for handling.

The information system unit also integrates the current information system abnormality recovery drill and periodically summarizes information security information in a monthly report or publishes on the intranet for announcement and education purposes. The reporting record for the current year is summarized annually and submitted to the audit management review committee for review, such that the information security management system is reviewed and continuously improved. The Company will continue to improve the information security system management and will also conduct information security evaluation in order to achieve a sound information security protection capability and to establish awareness for the Company. Information security management related information has been disclosed on the Company’s website.

Please refer to: https://tw.transcend-info.com/about/information_security_management

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3.3.10. Implementation of Internal Control Systems

1. Statement of Internal Control Systems

Transcend Information, Inc. Statement of Internal Control Systems

March 4, 2021

Based on the findings of a self-assessment, Transcend Information, Inc. (Transcend) states the following with regard to its internal control system during the year 2020:

Transcend’s Board of Directors and management are responsible for establishing, implementing, and maintaining an adequate internal control system. Our internal control is a process designed to provide reasonable assurance over the effectiveness and efficiency of our operations (including profitability, performance and safeguarding of assets), reliability, timeliness, transparency of our reporting, and compliance with applicable rulings, laws and regulations.
An internal control system has inherent limitations. No matter how perfectly designed, an effective internal control system can provide only reasonable assurance of accomplishing its stated objectives. Moreover, the effectiveness of an internal control system may be subject to changes due to extenuating circumstances beyond our control. Nevertheless, our internal control system contains self-monitoring mechanisms, and Transcend takes immediate remedial actions in response to any identified deficiencies.
Transcend evaluates the design and operating effectiveness of its internal control system based on the criteria provided in the Regulations Governing the Establishment of Internal Control Systems by Public Companies (herein below, the“Regulations”). The criteria adopted by the Regulations identify five key components of managerial internal control: (1) control environment, (2) risk assessment, (3) control activities, (4) information and communication, and (5) monitoring activities.
Transcend has evaluated the design and operating effectiveness of its internal control system according to the aforesaid Regulations.
Based on the findings of such evaluation, Transcend believes that, on December 31, 2020, it has maintained, in all material respects, an effective internal control system (that includes the supervision and management of our subsidiaries), to provide reasonable assurance over our operational effectiveness and efficiency, reliability, timeliness, transparency of reporting, and compliance with applicable rulings, laws and regulations.
This Statement is an integral part of Transcend’s annual report and prospectus, and will be made public. Any falsehood, concealment, or other illegality in the content made public will entail legal liability under Articles 20, 32, 171, and 174 of the Securities and Exchange Law.
This Statement was passed by the Board of Directors in their meeting held on March 4, 2021, with none of the eight attending directors expressing dissenting opinions, and the remainder all affirming the content of this Statement.

Transcend Information, Inc.

Chairman: Shu, Chung-Won

General Manager: Hong, Wan-Hoon

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If CPA was Engaged to Conduct a Special Audit of Internal Control System, Provide Its Audit Report: None.
3.3.11. If there has been any legal penalty against the company and its internal personnel, or any disciplinary penalty by the company against its internal personnel for violation of the internal control system, during the most recent fiscal year or during the current fiscal year up to the publication date of the annual report, where the result of such penalty could have a material effect on shareholder interests or securities prices, the annual report shall disclose the penalty, the main shortcomings, and condition of improvement: None.
3.3.12. Major resolutions of Shareholders’ Meeting, Board of Directors Meetings, Audit Committee meetings and Remuneration Committee meetings in the most recent year and up to the publication date of this Annual Report:
Major resolutions of Shareholders’ Meeting

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Date Material Decisions Resolutions and Implementation Status
(1) [Adoption of 2019 Business Report and ] Approved after voting.
Financial Statements.
Approved after voting. To appropriate legal
(2) [Adoption of the proposal for distribution of ] reserve NT$172,896,689 and special reserve
2019 earnings. NT$69,329,826 from 2019 earnings in
accordance with the regulations.
(3) Amendments to “Articles of Incorporation”. Approved after voting.
2020.06.19
(4) [Amendments to “Procedures for ] Approved after voting.
Acquisition and Disposal of Assets”.
(5) [Amendments to “Procedures for Lending ] ” Approved after voting.
Funds to other Parties .
(6) [Amendments to “Procedures for ] ” Approved after voting.
Endorsements and Guarantees .
(7) [Issuance of New Restricted Employee ] Approved after voting.
Shares.
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2. Material resolutions of Board of Directors Meetings

Date	Material Decisions	Resolutions and Implementation Status
2020.03.05 (The First Time in 2020)	(1) 2019 Business Report and Financial Statements.	Approved by all presented directors and proposed to Shareholders’ meeting for ratification.
	(2) Proposal for distribution of 2019 earnings.	Approved by all presented directors.
	(3) Cash distribution from 2019 retained earnings.	Approved by all presented directors. To appropriate cash dividend NT$1,544,622,030 (NT$3.60 per share) from 2019 earnings and submit a report to Shareholders’ meeting.
	(4) Cash distribution from capital surplus.	Approved by all presented directors. The capital surplus derived from the issuance of new shares at a premium totaling NT$386,155,508 will be distributed in cash of NT$0.90 per share. And submit a report to Shareholders’ meeting.

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Approved by all presented directors. The original
CPA in charge of the audit of the Company has
serviced the Company for seven years, therefore
(5) Change of CPA
starting from the 2020 Q1 financial statements,
CPA for auditing the Company have been
changed.
(6) CPA Independence Assessment Approved by all presented directors.
Approved by all presented directors and
(7) Amendments to “Articles of Incorporation”. proposed to Shareholders’ meeting for
discussion.
Approved by all presented directors and
(8) [Amendments to “Procedures for ] proposed to Shareholders’ meeting for
Acquisition and Disposal of Assets”.
discussion.
Approved by all presented directors and
(9) [Amendments to “Procedures for Lending ] proposed to Shareholders’ meeting for
Funds to other Parties”.
discussion.
Approved by all presented directors and
(10) [Amendments to “Procedures for ] proposed to Shareholders’ meeting for
Endorsements and Guarantees”.
discussion.
(11) [Adoption to “Rules for Performance ] Approved by all presented directors.
Evaluation of Board of Directors”
Extension of the period of endorsement and Approved by all presented directors. The
(12)guarantee to subsidiary Transcend Japan handling department has executed such matter
Inc. according to the regulations.
(13) [Treasury Stock Cancellation and Capital ] Approved by all presented directors.
Reduction
Approved by all presented directors and
(14) [Issuance of New Restricted Employee ] proposed to Shareholders’ meeting for
Shares.
discussion.
(15) [Subscription for Yuanta Taiwan High-yield ] Approved by all presented directors.
Leading Company Fund.
Approved by all presented directors. Former
General Manager, Mr. Shu, Chung-Cheng has
retired on March 5, 2020, and has been dismissed
(16) [Dismissal and New Appointment of ]
General Manager from the role of General Manager of the
Company. Mr. Hong, Wan-Hoon is appointed to
be the new General Manager at the same day.
2020.05.07
(The Approved by all presented directors and
Second Proposal for distribution of 2019 earnings proposed to Shareholders’ meeting for
Time in ratification.
2020)
Extension of the period of endorsement and Approved by all presented directors. The
(1) guarantee to subsidiary Transcend Japan handling department has executed such matter
Inc. according to the regulations.
Approved by all presented directors and
2020.08.06 (2) [Amendments to “Rules and Procedures of ] proposed to Shareholders’ meeting for
(The Third Shareholders’ Meeting”
discussion.
Time in
Approved by all presented directors and
2020) (3) [Amendments to “Procedures for Election of ] proposed to Shareholders’ meeting for
Directors”
discussion.
(4) [Amendments to “Regulations Governing ] Procedure for Board of Directors Meetings” [Approved by all presented directors. ]
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(5) [Amendments to “Audit Committee ] Approved by all presented directors.
Charter”
(6) [Amendments to “Remuneration Committee ] Approved by all presented directors.
Charter”
Approved by all presented directors. The Audit
(1) 2021 Annual Internal Audit Plan Office is requested to execute such matter
2020.11.10 according to the regulations.
Approved by all presented directors. The
Fourth (The (2) [Renewal of Directors and Officers’ Liability ] Insurance. handling department has executed such matter
Time in according to the regulations.
2020) (3) Adoption to “Risk Manamement Policies” Approved by all presented directors.
(4) [Ratification of the Appointment of the ] Approved by all presented directors.
Managerial Officer
Approved by all presented directors and
(1) [2020 Business Report and Financial ] proposed to Shareholders’ meeting for
Statements.
ratification.
Approved by all presented directors and
(2) Proposal for distribution of 2020 earnings. proposed to Shareholders’ meeting for
ratification.
Approved by all presented directors. To
(3) [Cash distribution from 2020 retained ] appropriate cash dividend NT$1,094,107,271
earnings. (NT$2.55 per share) from 2020 earnings and
2021.03.04 submit a report to Shareholders’ meeting.
(The First Approved by all presented directors. The capital
Time in surplus derived from the issuance of new shares
2021) (4) Cash distribution from capital surplus. at a premium totaling NT$214,530,838 will be
distributed in cash of NT$0.50 per share. And
submit a report to Shareholders’ meeting.
(5) CPA Independence Assessment Approved by all presented directors.
Extension of the period of endorsement and Approved by all presented directors. The
(6) guarantee to subsidiary Transcend Japan handling department has executed such matter
Inc. according to the regulations.
Approved by all presented directors and
(7) Election of directors.
proposed to Shareholders’ meeting for election.
Approved by all presented directors and
(1) [Amendments to “Rules and Procedures of ] proposed to Shareholders’ meeting for
Shareholders’ Meeting”.
ratification.
2021.05.06 (2) [Appointment of Chief Corporate ] Approved by all presented directors.
Governance Officer.
(The
The Qualification Review of the Elected
Second
Directors and Independent Directors Approved by all presented directors and
Time in (3)
Candidate for the 2021 Annual Regular proposed to Shareholders’ meeting for election.
2021)
Shareholders’ Meeting.
Approved by all presented directors and
(4) [To release the prohibition on directors from ] proposed to Shareholders’ meeting for
participation in competing business.
ratification.
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3. Material resolutions of Audit Committee Meetings

Date	Material Decisions	Resolutions and Implementation Status
2020.03.05 (The First Time in	(1) 2019 Business Report and Financial Statements.	Approved by all presented committee members and proposed to Board of directors’ meeting for discussion.

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2020) Approved by all presented committee members
(2) Proposal for distribution of 2019 earnings. and proposed to Board of directors’ meeting for
discussion.
Approved by all presented committee members
and proposed to Board of directors’ meeting for
(3) [Cash distribution from 2019 retained ] discussion. To appropriate cash dividend
earnings.
NT$1,544,622,030 (NT$3.60 per share) from
2019 earning.
Approved by all presented committee members
and proposed to Board of directors’ meeting for
discussion. The capital surplus derived from the
(4) Cash distribution from capital surplus.
issuance of new shares at a premium totaling
NT$386,155,508 will be distributed in cash of
NT$0.90 per share.
Approved by all presented committee members
(5) Change of CPA and proposed to Board of directors’ meeting for
discussion.
Approved by all presented committee members
(6) [Amendments to “Procedures for ] and proposed to Board of directors’ meeting for
Acquisition and Disposal of Assets”
discussion.
Approved by all presented committee members
(7) [Amendments to “Procedures for Lending ] and proposed to Board of directors’ meeting for
Funds to other Parties”.
discussion.
Approved by all presented committee members
(8) [Amendments to “Procedures for ] and proposed to Board of directors’ meeting for
Endorsements and Guarantees”.
discussion.
Extension of the period of endorsement and Approved by all presented committee members
(9) guarantee to subsidiary Transcend Japan and proposed to Board of directors’ meeting for
Inc. discussion.
Approved by all presented committee members
(10) [Issuance of New Restricted Employee ] and proposed to Board of directors’ meeting for
Shares.
discussion.
Approved by all presented committee members
(11) [Subscription for Yuanta Taiwan High-yield ] and proposed to Board of directors’ meeting for
Leading Company Fund.
discussion.
2020.05.07
(The
Second Report Items only -
Time in
2020)
2020.08.06
Approved by all presented committee members
(The Third Extension of the period of endorsement and
and proposed to Board of directors’ meeting for
Time in guarantee to subsidiary Transcend Japan Inc.
discussion.
2020)
2020.11.10
(The Approved by all presented committee members
Fourth 2021 Annual Internal Audit Plan and proposed to Board of directors’ meeting for
Time in discussion.
2020)
Approved by all presented committee members
2021.03.04 (1) [2020 Business Report and Financial ] and proposed to Board of directors’ meeting for
Statements.
(The First discussion.
Time in Approved by all presented committee members
2021) (2) Proposal for distribution of 2020 earnings. and proposed to Board of directors’ meeting for
discussion.
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	(3) Cash distribution from 2020 retained earnings.	Approved by all presented committee members and proposed to Board of directors’ meeting for discussion. To appropriate cash dividend NT$1,094,107,271 (NT$2.55 per share) from 2020 earnings.
	(4) Cash distribution from capital surplus.	Approved by all presented committee members and proposed to Board of directors’ meeting for discussion. The capital surplus derived from the issuance of new shares at a premium totaling NT$214,530,838 will be distributed in cash of NT$0.50per share.
	(5) Extension of the period of endorsement and guarantee to subsidiary Transcend Japan Inc.	Approved by all presented committee members and proposed to Board of directors’ meeting for discussion.
2021.05.06 (The Second Time in 2021)	To release the prohibition on directors from participation in competing business.	Approved by all presented committee members and proposed to Board of directors’ meeting for discussion.

4. Material resolutions of Remuneration Committee Meetings

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Date Material Decisions Resolutions and Implementation Status
(1) [Distribution of 2019 employees’ profit ]
sharing bonus and directors’ compensation.
2020.03.05 (2) [Remuneration of managerial officers in ] Approved by all presented committee members
(The First 2020.
and proposed to Board of directors’ meeting for
Time in
(3) Remuneration of directors in 2020. discussion.
2020)
(4) [Adoption to “Rules for Performance ]
Evaluation of Board of Directors”
2020.11.10 (1) [Remuneration of managerial officers in ]
(The 2020. Approved by all presented committee members
Second and proposed to Board of directors’ meeting for
Time in (2) Remuneration of directors in 2020. discussion.
2020)
2021.03.04 (1) [Distribution of 2020 employees’ profit ] sharing bonus and directors’ compensation. Approved by all presented committee members
(The First
Time in (2) [Remuneration of managerial officers in ] 2021. and proposed to Board of directors’ meeting for discussion.
2021)
(3) Remuneration of directors in 2021.
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3.3.13. Major Issues of Record or Written Statements Made by Any Director Dissenting to Important Resolutions Passed by the Board of Directors in the Most Recent Year up to the Publication Date of this Annual Report: None.

3.3.14. Resignation or Dismissal of the Company’s Key Individuals, Including the Chairman, CEO, and Heads of Accounting, Finance, Internal Audit, Corporate Governance and R&D in the Most Recent Year and up to the Publication Date of this Annual Report:

				May14,2021 Reasons for Resignation or Dismissal Retirement
Title	Name	Date of Appointment	Date of Termination	Reasons for Resignation or Dismissal
General Manager	Shu,Chung-Cheng	1991.06.01	2020.03.05	Retirement

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3.4. Information on CPA fees

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Accounting Firm Name of CPA Audit Period Note
Pricewaterhouse Coopers Lin, Chun-Yao Chen, Chin-Chang 2020.01.01-2020.12.31 -
Unit: NT$ thousands
Fee Items
Audit Fee Non-audit Fee Total
Fee Range
1 Under NT$ 1,999,999
2 NT$2,000,000 ~ NT$3,999,999 2,547 2,547
3 NT$4,000,000 ~ NT$5,999,999 4,500 4,500
4 NT$6,000,000 ~ NT$7,999,999
5 NT$8,000,000 ~ NT$9,999,999
6 Over NT$10,000,000
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					Unit: NT$thousands	Unit: NT$thousands	Unit: NT$thousands
	Name of Audit		Non-audit Fee				Period
Accounting Firm	CPA Fee	System of Design	Company Registration Human Resource		Others Subtotal		Covered by CPA’s Audit
Pricewaterhouse Coopers	Lin,Chun-Y ao 4,500 Chen, Chin-Chang	-	-	-	2,547	2,547	2020.01.01- 2020.12.31
	Chen, Chin-Chang

3.4.1. When non-audit fees paid to the certified public accountant, to the accounting firm of the certified public accountant, and/or to any affiliated enterprise of such accounting firm are one quarter or more of the audit fees paid thereto, the amounts of both audit and non-audit fees as well as details of non-audit services shall be disclosed.
Please refer to the above table. The non-audit services are for Transfer Pricing Report and other Tax Consulting services.
3.4.2. When the company changes its accounting firm and the audit fees paid for the fiscal year in which such change took place are lower than those for the previous fiscal year, the amounts of the audit fees before and after the change and the reasons shall be disclosed. Not applicable.
3.4.3. When the audit fees paid for the current fiscal year are lower than those for the previous fiscal year by 10 percent or more, the reduction in the amount of audit fees, reduction percentage, and reason(s) therefor shall be disclosed. None.
3.5. Replacement of CPA Not applicable.
3.6. Where the company's chairman, general manager, or any managerial officer in charge of finance or accounting matters has in the most recent year held a position at the accounting firm of its certified public accountant or at an affiliated enterprise of such accounting firm, the name and position of the person, and the period during which the position was held, shall be disclosed.
None.

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3.7. Any transfer of equity interests and/or pledge of or change in equity interests by a director, managerial officer, or shareholder with a stake of more than 10 percent during the most recent fiscal year and during the current fiscal year up to the date of publication of this Annual Report.
3.7.1. Changes in shares held by Directors, Managerial Officers and Major Shareholders

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

2020 As of April 19, 2021
Increase Increase
Increase Increase
Title Name (decrease) (decrease)
(decrease) of (decrease) of
of shares of shares
shares held shares held
pledged pledged
Chairman and CEO Shu, Chung-Won - - - -
Director Shu, Chung-Cheng (Note 2) - - - -
Director Chui, Li-Chu - - - -
Director Hsu, Chia-Hsian (52,000) - - -
Director & Sales Vice
- - - -
Wang, Jen-Ming
General Manager
Director & R&D Vice
- - - -
Li, Tseng-Ho (Note 3)
General Manager
Independent Director Chen, Yi-Liang - - - -
Independent Director Chen, Lo-Min - - - -
Independent Director Wang, Yi-Hsin - - - -
General Manager Hong, Wan-Hoon (Note 4) - - - -
Administration Vice
- - - -
Fang, Wen-Jeng
General Manager
Sales Vice General
- - - -
Chen, Po-Shou
Manager
Financial and
- - - -
Hsiao, Sheng-Yin
Accounting Officer
Shareholder holding 10% or more of shares [Won Chin Investment Inc. ] - - - -
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Note 1: The status of the increase/decrease of shares held and pledged shall be based on the period of the directors and managerial officers’ term of office.

Note 2: Dismissal of General Manager on March 5, 2020. Note 3: New appointment of Vice General Manager on October 1, 2020. Note 4: New appointment of General Manager on March 5, 2020.

3.7.2. Shares Trading with Related Parties

Not applicable.

3.7.3. Shares Pledge with Related Parties

Not applicable.

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3.8. Relationship information, if among the company's Top 10 shareholders any one is a related party, spouse or a relative within the second degree of kinship of another

==> picture [497 x 646] intentionally omitted <==

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Shareholding Name and Relationship Between the
Current Shareholding [Spouse’s/minor’s] by Nominee Company’s Top Ten Shareholders, or Spouses
Name Shareholding
Arrangement or Relatives Within Two Degrees
Shares % Shares % Shares % Name Relationship
Wan An Technology Same person as the
Inc. Chairman
Wan Min Investment Same person as the
Inc. Chairman
Wan Chuan Investment Same person as the
Inc. Chairman
The Chairman of the
company listed here is
Cheng Chuan
a relative within two
Technology
degrees of kinship of
Development Inc.
the Chairman of Won
Chin
The Chairman of the
company listed here is
Ho Cheng Investment a relative within two
Inc. degrees of kinship of
the Chairman of Won
Won Chin
Chin
Investment Inc.
74,783,600 17.43% - - - - The Chairman of the
Representative:
company listed here is
Shu, Chung-Yu
Shin Chuang a relative within two
Investment Inc. degrees of kinship of
the Chairman of Won
Chin
This shareholder is a
relative within two
Shu, Chung-Won degrees of kinship of
the Chairman of Won
Chin
The Chairman of the
company listed here is
Shu Min Investment a relative within two
Inc. degrees of kinship of
the Chairman of Won
Chin
This shareholder is a
relative within two
Shu, Chung-Cheng degrees of kinship of
the Chairman of Won
Chin
Won Chin Investment Same person as the
Inc. Chairman
Wan An
Technology Inc.
34,142,854 7.96% - - - - Same person as the
Representative:
Chairman; Investment
Shu, Chung-Yu Wan Min Investment of Wan An on Wan
Inc.
Min is evaluated
under equity method
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----- Start of picture text -----

Shareholding Name and Relationship Between the
Current Shareholding [Spouse’s/minor’s] by Nominee Company’s Top Ten Shareholders, or Spouses
Name Shareholding
Arrangement or Relatives Within Two Degrees
Shares % Shares % Shares % Name Relationship
Same person as the
Chairman; Investment
Wan Chuan Investment
of Wan An on Wan
Inc.
Chuan is evaluated
under equity method
The Chairman of the
company listed here is
Cheng Chuan
a relative within two
Technology
degrees of kinship of
Development Inc.
the Chairman of Wan
An
The Chairman of the
company listed here is
a relative within two
degrees of kinship of
Ho Cheng Investment
the Chairman of Wan
Inc.
An; Investment of
Wan An on He Cheng
is evaluated under
equity method
The Chairman of the
company listed here is
Shin Chuang a relative within two
Investment Inc. degrees of kinship of
the Chairman of Wan
An
This shareholder is a
relative within two
Shu, Chung-Won degrees of kinship of
the Chairman of Wan
An
The Chairman of the
company listed here is
Shu Min Investment a relative within two
Inc. degrees of kinship of
the Chairman of Wan
An
This shareholder is a
relative within two
Shu, Chung-Cheng degrees of kinship of
the Chairman of Wan
An
The Chairman of the
company listed here is
Won Chin Investment a relative within two
Cheng Chuan Inc. degrees of kinship of
Technology the Chairman of
Development Inc. Cheng Chuan
32,971,701 7.68% - - - -
Representative: The Chairman of the
Shu, company listed here is
Chung-Cheng Wan An Technology a relative within two
Inc. degrees of kinship of
the Chairman of
Cheng Chuan
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----- Start of picture text -----

Shareholding Name and Relationship Between the
Current Shareholding [Spouse’s/minor’s] by Nominee Company’s Top Ten Shareholders, or Spouses
Name Shareholding
Arrangement or Relatives Within Two Degrees
Shares % Shares % Shares % Name Relationship
The Chairman of the
company listed here is
Wan Min Investment a relative within two
Inc. degrees of kinship of
the Chairman of
Cheng Chuan
The Chairman of the
company listed here is
Wan Chuan Investment a relative within two
Inc. degrees of kinship of
the Chairman of
Cheng Chuan
The Chairman of the
company listed here is
Ho Cheng Investment a relative within two
Inc. degrees of kinship of
the Chairman of
Cheng Chuan
The Chairman of the
company listed here is
Shin Chuang a relative within two
Investment Inc. degrees of kinship of
the Chairman of
Cheng Chuan
This shareholder is a
relative within two
Shu, Chung-Won degrees of kinship of
the Chairman of
Cheng Chuan
Same person as the
Chairman; Investment
Shu Min Investment
of Cheng Chuan on
Inc.
Shu Min is evaluated
under equity method
Chairman of Cheng
Shu, Chung-Cheng
Chuan
Won Chin Investment Same person as the
Inc. Chairman
Same person as the
Chairman; Wan Min
Wan An Technology
is an investee of Wan
Inc.
An under equity
Wan Min
method
Investment Inc.
29,726,397 6.93% - - - -
Representative: Wan Chuan Investment Same person as the
Shu, Chung-Yu Inc. Chairman
The Chairman of the
company listed here is
Cheng Chuan
a relative within two
Technology
degrees of kinship of
Development Inc.
the Chairman of Wan
Min
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----- Start of picture text -----

Shareholding Name and Relationship Between the
Current Shareholding [Spouse’s/minor’s] by Nominee Company’s Top Ten Shareholders, or Spouses
Name Shareholding
Arrangement or Relatives Within Two Degrees
Shares % Shares % Shares % Name Relationship
The Chairman of the
company listed here is
Ho Cheng Investment a relative within two
Inc. degrees of kinship of
the Chairman of Wan
Min
The Chairman of the
company listed here is
Shin Chuang a relative within two
Investment Inc. degrees of kinship of
the Chairman of Wan
Min
This shareholder is a
relative within two
Shu, Chung-Won degrees of kinship of
the Chairman of Wan
Min
The Chairman of the
company listed here is
Shu Min Investment a relative within two
Inc. degrees of kinship of
the Chairman of Wan
Min
This shareholder is a
relative within two
Shu, Chung-Cheng degrees of kinship of
the Chairman of Wan
Min
Won Chin Investment Same person as the
Inc. Chairman
Same person as the
Chairman; Wan
Wan An Technology
Chuan is an investee
Inc.
of Wan An under
equity method
Wan Min Investment Same person as the
Inc. Chairman
The Chairman of the
company listed here is
Wan Chuan
Ho Cheng Investment a relative within two
Investment Inc.
29,505,896 6.88% - - - - Inc. degrees of kinship of
Representative: the Chairman of Wan
Shu, Chung-Yu Chuan
The Chairman of the
company listed here is
Shin Chuang a relative within two
Investment Inc. degrees of kinship of
the Chairman of Wan
Chuan
The Chairman of the
company listed here is
Cheng Chuan
a relative within two
Technology
degrees of kinship of
Development Inc.
the Chairman of Wan
Chuan
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----- Start of picture text -----

Shareholding Name and Relationship Between the
Current Shareholding [Spouse’s/minor’s] by Nominee Company’s Top Ten Shareholders, or Spouses
Name Shareholding
Arrangement or Relatives Within Two Degrees
Shares % Shares % Shares % Name Relationship
This shareholder is a
relative within two
Shu, Chung-Won degrees of kinship of
the Chairman of Wan
Chuan
The Chairman of the
company listed here is
Shu Min Investment a relative within two
Inc. degrees of kinship of
the Chairman of Wan
Chuan
This shareholder is a
relative within two
Shu, Chung-Cheng degrees of kinship of
the Chairman of Wan
Chuan
Ho Cheng Investment Same person as the
Inc. Chairman
The Chairman of the
company listed here is
Won Chin Investment a relative within two
Inc. degrees of kinship of
the Chairman of Shin
Chuang
The Chairman of the
company listed here is
Cheng Chuan
a relative within two
Technology
degrees of kinship of
Development Inc.
the Chairman of Shin
Chuang
The Chairman of the
company listed here is
Shin Chuang Wan An Technology a relative within two
Investment Inc.
14,008,294 3.26% - - - - Inc. degrees of kinship of
Representative: the Chairman of Shin
Shu, Chung-Mei Chuang
The Chairman of the
company listed here is
Wan Min Investment a relative within two
Inc. degrees of kinship of
the Chairman of Shin
Chuang
The Chairman of the
company listed here is
Wan Chuan Investment a relative within two
Inc. degrees of kinship of
the Chairman of Shin
Chuang
This shareholder is a
relative within two
Shu, Chung-Won degrees of kinship of
the Chairman of Shin
Chuang
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Shareholding Name and Relationship Between the
Current Shareholding [Spouse’s/minor’s] by Nominee Company’s Top Ten Shareholders, or Spouses
Name Shareholding
Arrangement or Relatives Within Two Degrees
Shares % Shares % Shares % Name Relationship
The Chairman of the
company listed here is
Shu Min Investment a relative within two
Inc. degrees of kinship of
the Chairman of Shin
Chuang
This shareholder is a
relative within two
Shu, Chung-Cheng degrees of kinship of
the Chairman of Shin
Chuang
Shin Chuang Same person as the
Investment Inc. Chairman
The Chairman of the
company listed here is
Won Chin Investment a relative within two
Inc. degrees of kinship of
the Chairman of Ho
Cheng
The Chairman of the
company listed here is
a relative within two
Wan An Technology degrees of kinship of
Inc. the Chairman of Ho
Cheng; He Cheng is
an investee of Wan An
under equity method
The Chairman of the
company listed here is
Wan Min Investment a relative within two
Inc. degrees of kinship of
Ho Cheng the Chairman of Ho
Investment Inc. Cheng
Representative: 13,899,462 3.24% - - - - The Chairman of the
Shu, Chung-Mei company listed here is
Wan Chuan Investment a relative within two
Inc. degrees of kinship of
the Chairman of Ho
Cheng
The Chairman of the
company listed here is
Cheng Chuan
a relative within two
Technology
degrees of kinship of
Development Inc.
the Chairman of Ho
Cheng
This shareholder is a
relative within two
Shu, Chung-Won degrees of kinship of
the Chairman of Ho
Cheng
The Chairman of the
company listed here is
Shu Min Investment a relative within two
Inc. degrees of kinship of
the Chairman of Ho
Cheng
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----- Start of picture text -----

Shareholding Name and Relationship Between the
Current Shareholding [Spouse’s/minor’s] by Nominee Company’s Top Ten Shareholders, or Spouses
Name Shareholding
Arrangement or Relatives Within Two Degrees
Shares % Shares % Shares % Name Relationship
This shareholder is a
relative within two
Shu, Chung-Cheng degrees of kinship of
the Chairman of Ho
Cheng
This shareholder is a
relative within two
Wan An Technology
degrees of kinship of
Inc.
the Chairman of the
company listed here
This shareholder is a
relative within two
Wan Min Investment
degrees of kinship of
Inc.
the Chairman of the
company listed here
This shareholder is a
relative within two
Wan Chuan Investment
degrees of kinship of
Inc.
the Chairman of the
company listed here
This shareholder is a
Cheng Chuan relative within two
Technology degrees of kinship of
Development Inc. the Chairman of the
company listed here
This shareholder is a
relative within two
Shu, Chung-Won 9,990,453 2.33% - - - - Ho Cheng Investment
degrees of kinship of
Inc.
the Chairman of the
company listed here
This shareholder is a
relative within two
Shin Chuang
degrees of kinship of
Investment Inc.
the Chairman of the
company listed here
This shareholder is a
relative within two
Won Chin Investment
degrees of kinship of
Inc.
the Chairman of the
company listed here
This shareholder is a
relative within two
Shu Min Investment
degrees of kinship of
Inc.
the Chairman of the
company listed here
The two shareholders
are relatives within
Shu, Chung-Cheng
two degrees of
kinship
The Chairman of the
Shu Min
company listed here is
Investment Inc.
Wan An Technology a relative within two
Representative: 6,437,842 1.50% - - - -
Inc. degrees of kinship of
Shu,
the Chairman of Shu
Chung-Cheng
Min
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----- Start of picture text -----

Shareholding Name and Relationship Between the
Current Shareholding [Spouse’s/minor’s] by Nominee Company’s Top Ten Shareholders, or Spouses
Name Shareholding
Arrangement or Relatives Within Two Degrees
Shares % Shares % Shares % Name Relationship
The Chairman of the
company listed here is
Wan Min Investment a relative within two
Inc. degrees of kinship of
the Chairman of Shu
Min
The Chairman of the
company listed here is
Wan Chuan Investment a relative within two
Inc. degrees of kinship of
the Chairman of Shu
Min
Same person as the
Cheng Chuan Chairman; Shu Min is
Technology an investee of Cheng
Development Inc. Chuan under equity
method
The Chairman of the
company listed here is
Ho Cheng Investment a relative within two
Inc. degrees of kinship of
the Chairman of Shu
Min
The Chairman of the
company listed here is
Shin Chuang a relative within two
Investment Inc. degrees of kinship of
the Chairman of Shu
Min
The Chairman of the
company listed here is
Won Chin Investment a relative within two
Inc. degrees of kinship of
the Chairman of Shu
Min
This shareholder is a
relative within two
Shu, Chung-Won degrees of kinship of
the Chairman of Shu
Min
Shu, Chung-Cheng Chairman of Shu Min
This shareholder is a
relative within two
Wan An Technology
degrees of kinship of
Inc.
the Chairman of the
Shu, company listed here
6,244,098 1.46% - - - -
Chung-Cheng This shareholder is a
relative within two
Wan Min Investment
degrees of kinship of
Inc.
the Chairman of the
company listed here
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3.9. The total number of shares and total equity stake held in any single enterprise by the company, its directors, managerial officers, and any companies controlled either directly or indirectly by the company.

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April 19, 2021; Unit: Shares
Direct or Indirect Ownership
Affiliated
Ownership by the Company by Directors/ Total Ownership
Enterprises
Managerial officers
(Note)
Shares % Shares % Shares %
Taiwan IC Packaging
21,928,036 12.74% 4,894,611 2.84% 26,822,647 15.59%
Corporation
Saffire Investment Ltd. 36,600,000 100% - - 36,600,000 100%
Transcend Information
625,000 100% - - 625,000 100%
Inc. (USA)
Transcend Japan Inc. 6,400 100% - - 6,400 100%
Transcend Korea Inc. 40,000 100% - - 40,000 100%
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Note: Invested by the consolidated company using the equity method.

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4. Capital Overview

4.1. Capital and Shares

4.1.1. Source of Capital

								As of April 19,2021	As of April 19,2021	As of April 19,2021	As of April 19,2021
Month/ Year Per Value (NT$)		Authorized Capital			Paid-in Capital			Remark
		Shares	Amount (NT$ thousands)		Shares	Amount (NT$ thousands)		Sources of Capital		Capital Increase by Assets Other than Cash	Others
04/2020	10	500,000,000	5,000,000		429,061,675	4,290,617		Retiring treasury shares NT$ 17,000 thousands

T f				Authorized Capital
ype o Stock		Shares Outstanding (Note)		Un-issued Shares			Total Shares			Remark
Common Stock		429,061,675		70,938,325			500,000,000		25,000,000 shares are reserved for employee options.		stock

Note: Listed Shares.

Information for Shelf Registration: None.

4.1.2. Shareholder Structure

4.1.2. Shareholder Structure	4.1.2. Shareholder Structure	4.1.2. Shareholder Structure	4.1.2. Shareholder Structure	4.1.2. Shareholder Structure	4.1.2. Shareholder Structure	4.1.2. Shareholder Structure
As of April 19, 2021
Shareholders Structure Quantity Government Agencies Financial Institutions Other Juridical Persons Domestic Natural Persons Foreign Institutions and Natural Persons Total
Number of Shareholders	- 11 109 26,485 206 26,811
Shareholding (Shares)	- 5,784,000 247,445,011 134,253,378 41,579,286 429,061,675
Holding Percentage	0.00%	1.35%	57.67%	31.29%	9.69%	100.00%

4.1.3. Shareholding Distribution Status

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As of April 19, 2021 (Note 1)
Class of shareholding
Number of shareholders Shareholding (Shares) Shareholding percentage (%)
(Shares)
1~999 4,058 653,279 0.15%
1,000~5,000 18,435 36,624,463 8.54%
5,001~10,000 2,377 18,811,941 4.38%
10,001~15,000 625 8,023,292 1.87%
15,001~20,000 366 6,733,916 1.57%
20,001~30,000 326 8,419,336 1.96%
30,001~40,000 171 6,136,388 1.43%
40,001~50,000 92 4,276,265 1.00%
50,001~100,000 181 13,078,996 3.05%
100,001~200,000 83 11,687,346 2.72%
200,001~400,000 41 12,119,948 2.82%
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400,001~600,000 17 8,651,237 2.02%
600,001~800,000 6 4,164,933 0.97%
800,001~1,000,000 6 5,574,813 1.30%
1,000,001 or over 27 284,105,522 66.22%
Total 26,811 429,061,675 100.00%
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Note 1: It refers to the most recent shareholding dispersal base date provided by the stock affairs agent. Note 2: The Company does not issue preferred shares.

4.1.4. List of Major Shareholders

4.1.4. List of Major Shareholders
Shares Name of major shareholders	Shareholding (Shares)	Percentage (%)
Won Chin Investment Inc.	74,783,600	17.43%
Wan An TechnologyInc.	34,142,854	7.96%
ChengChuan TechnologyDevelopment Inc.	32,971,701	7.68%
Wan Min Investment Inc.	29,726,397	6.93%
Wan Chuan Investment Inc.	29,505,896	6.88%
Shin ChuangInvestment Inc.	14,008,294	3.26%
Ho ChengInvestment Inc.	13,899,462	3.24%
Shu,Chung-Won	9,990,453	2.33%
Shu Min Investment Inc.	6,437,842	1.50%
Shu,Chung-Cheng	6,244,098	1.46%
Total	251,710,597	58.67%

4.1.5. Market Price, Net Worth, Earnings, and Dividends per Share in the Past Two Years

Unit: NT$; Thousand shares

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As of March 31,
Year
2019 2020 2021
Item
(Note 1)
Market Highest 79.70 84.00 67.40
Price per Lowest 64.00 61.80 61.40
Share Average 68.94 69.40 64.08
Net Worth Before distribution 45.06 43.52 41.68
per Share After distribution 40.57 40.47 41.68
Earnings Weighted Average Shares 430,718 429,064 429,062
per Share
Earnings per Share (EPS) 4.01 2.79 5.21 (Note 2)
(EPS)
Dividend Cash dividend 4.50 3.05 Not applicable
per Share Cumulative unpaid dividends - - -
Return on Price-to-earning ratio 17.19 24.87 12.30 (Note 2)
Investment Price-dividend ratio 15.32 22.75 Not applicable
(ROI)
Cash dividend yield rate 6.53 4.39 Not applicable
Analysis
----- End of picture text -----

Note 1: The consolidated financial statements of 2021 Q1 have been prepared in accordance to the IFRS and have been reviewed by the CPAs.

Note 2: The calculation of Earnings per Share (EPS) and Price-to-Earnings Ratio for 2021 Q1 have been annualized.

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4.1.6. Dividend Policy and Implementation Status
Dividend Policy
- According to Article 22-1 of the Company’s Articles of Incorporation, if the Company has earnings after the annual final accounting, it shall be allocated in the following order:
- (1) To pay taxes.
- (2) To cover accumulated losses, if any.
- (3) To appropriate 10% legal reserve unless the total legal reserve accumulated has already reached the amount of the Company’s authorized capital.
- (4) To appropriate or reverse special reserve in accordance with the regulations.
- (5) To reserve certain amount, on the premise that there is no effect on the Company’s normal operations and no violation of regulations, for maintaining stability of dividends.
- (6) For any remainder, adding on accumulated unappropriated retained earnings, the board of directors shall propose the earnings distribution proposal and shall handle in accordance with the following provision: the board of directors is authorized to distribute dividends and bonuses or legal reserve and capital reserve in whole or in part which be paid in cash after a resolution has been adopted by a majority vote at a meeting of the board of directors attended by two-thirds of the total number of directors; and in addition thereto a report of such distribution shall be submitted to the shareholders’ meeting in accordance with Section 5 of Article 240 and Section 1 of Article 241 of the Company Act. In case of the dividends and bonuses or legal reserve and capital reserve in whole or in part be distributed in the form of new shares to be issued by the company, shall be proposed to the shareholders' meeting for review and approval by a resolution in accordance with Article 240 of the Company Act.

The Company distributes dividends taking into consideration the Company's economic environment and growth phases, future demands of funds, long-term financial planning, and the cash flows that the stockholders desire. Under the circumstances of no material investment plans and other special situation, the proportion of dividend distributed shall not be less than 80% of after-tax profit, and cash dividends shall account for at least 5% of the total dividend distributed. The Company currently distributes dividend all in cash, and there is no consideration for the distribution of stock dividends.

Proposed Distribution of Dividend:
The appropriation for cash dividends from 2020 earnings and cash payment from capital surplus have been approved by the Board of Directors during its meeting on March 4, 2021.

Unit: NT$

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year
2020
Dividends per Share
Cash Retained Earnings 2.55
Dividend Capital surplus 0.50
Free Share Retained Earnings 0.00
Assignment Capital surplus 0.00
Total 3.05
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Major Change Expected in the Dividend Policy: None.
4.1.7. Impacts of free share assignment intended through the current shareholders meeting on the Company's operational performance and earnings per share: Not applicable.

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4.1.8. Compensation for Employees and Directors
The percentage or range of compensation for employees and directors based on the Article of Incorporation:
- Bases on Article 22 of the Article of Incorporation, where the Company has a profit before tax for each fiscal year, the Company shall first reserve certain amount of the profit to recover losses for preceding years, and then set aside no less than 1% of the remaining profit for distribution to employees as compensation and no more than 0.2% of the remaining profit for distribution to directors as compensation.
- The compensation may be paid in stock or cash. For remuneration in the form of shares, the employees of subsidiaries meeting specific condition are also entitled to the payment. The Board is authorized to decide such qualifications and allocation.
Basis for estimating the amount of compensation for employees and directors, basis for calculating the number of shares to be distributed as employee compensation, and the accounting treatment of the discrepancy, if any, between the actual distributed amount and the estimated amount, for the current period:
- If the actual amounts approved by board of directors differ from the estimated amount, the difference will be recorded in the year when board of directors makes the resolution as a change in accounting estimate.
Distribution of Compensation of Employees and Directors for 2020 Approved in the Board of Directors Meeting:
- The compensation of employees and directors for the year ended December 31, 2020 has been approved by the Board of Directors during its meeting on March 4, 2021.

Unit: NT$

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Compensation of Employees and Approved in the Board of
Estimated Amount
Directors for 2020 Directors Meeting
Employee Compensation – in Cash 14,786,482 15,224,586
Directors’ Compensation – in Cash 2,160,000 2,131,442
----- End of picture text -----

Note 1: The difference between the actual amounts approved by board of directors and the estimated amount will be taken as a change in accounting estimate and adjusted in profit or loss for 2021.

Note 2: The Company did not distribute the compensation of employees and directors in stocks.

The actual distribution of employee and director compensation for the previous fiscal year (with an indication of the number of shares, monetary amount, and stock price, of the shares distributed), and, if there is any discrepancy between the actual distribution and the recognized employee and director compensation, additionally the discrepancy, cause, and how it is treated:

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Unit: NT$
Approved in the Board of
Compensation of Employees and
Directors Meeting Estimated Amount
Directors for 2019
(Actual distribution Amount)
Employee Compensation – in Cash 20,684,330 21,398,216
Directors’ Compensation – in Cash 2,790,000 2,995,750
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Note: The above-mentioned actual distribution of compensation of employees and directors was in line with the resolution of the Board of Directors. The difference between the actual distribution amounts and the estimated amount was taken as a change in accounting estimate and adjusted in profit or loss for 2020.

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4.1.9. Buy-back of Treasury Stock

May 14, 2021

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Batch Order of Repurchase The First Time (batch)
Maintain the Company's good will and
Purpose of Repurchase
stockholders' rights.
Repurchase for Period November 8, 2019 – January 7, 2020
Repurchase Price Range NT$ 49-NT $97
Share Types and Quantities of Repurchased 1,700,000 common shares
Amount of the Share Repurchased NT$130,621,100
Ratio of Bought-back Quantity to Planned
56.67%
Repurchased Quantity (%)
Number of Cancelled and Transferred Shares 1,700,000 shares
Accumulated Quantity of the Company's Share
0 share
Held
Percentage of accumulated Quantity of the
0%
Company's Share Held (%)
----- End of picture text -----

4.2. Status of Corporate Bonds None.

4.3. Status of Preferred Shares

None.

4.4. Stauts of Overseas Depositary Receipts None.

4.5. Status of Employee Stock Option

None.

4.6. Status of New Restricted Employee Shares

The shares have not been issued after reporting to the FSC (Financial Supervisory Commission) and obtaining the approval letter thereof on July 17, 2020; therefore, this is not applicable.

4.7. Status of New Shares Issuance in Connection with Mergers or Acquisitions None.
4.8. Implementation of the Capital Allocation Plans Any uncompleted public issue or private placement of securities, or issues and placements that were completed but have not yet fully yielded the planned benefits: None.

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Operational Highlights

5.1. Business Activities

5.1.1. Business Scope

Main areas of business operations

The main areas of business operations of the Company registered on the registration alternation form issued by the Ministry of Economic Affairs are as follows:

(1) Computers and Peripheral Equipment Manufacturing.
(2) Data Storage Media Manufacturing and Duplicating.
(3) Wholesale of Computers and Clerical Machinery Equipment.
(4) Wholesale of Computer Software.
(5) Wholesale of Electronic Materials.
(6) International Trade.
(7) Information Software Services.
(8) Electronics Components Manufacturing.
(9) Restrained Telecom Radio Frequency Equipment and Materials Import.
(10) Restrained Telecom Radio Frequency Equipment and Materials Manufacturing.
(11) All business items that are not prohibited or restricted by law, except those that are subject to special approval.
Revenue distribution in the Most Recent Two Fiscal Years

	Unit: NT$ thousands	Unit: NT$ thousands	Unit: NT$ thousands	Unit: NT$ thousands
Item	2020 2019
	Amount % Amount %
FLASH+DRAM products	9,041,918 78.99 10,533,282 78.05
Others	2,404,778 21.01 2,962,904 21.95
Total	11,446,696	100.00	13,496,186	100.00

(1) Main Products

A. DRAM Modules

UDIMM, SODIMM, ECC UDIMM, ECC SODIMM, RDIMM, and the application scope includes memory modules for desktop/notebook computers, memory modules for servers/workstations, memory modules for routers, and memory modules for laser printers and fax machines, etc.

B. Flash Products

SSD with the interface of PATA/SATA/PCIe, form factor including 2.5", M.2, mSATA, mSATA mini. Type of memory cards includes CF Card, CFast Card, SD Card and microSD Card, flash memory modules with the interface of PATA/SATA/USB for special industrial application platform, and portable disks complying with the standards of USB 2.0, USB3.0 & USB3.1 specifications.

C. Multimedia Products

Dash Cam, body camera, and external DVD burners, etc.

D. Hard Disk Products

Various types of portable hard disk storage devices, and NAS cloud hard disks, etc.

E. Card Readers and Accessories

Various types of card readers, hubs and adapter cards, etc.

(2) New products development
A. DRAM Modules

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DRAM modules of higher frequency, DRAM modules of higher capacity, DRAM modules for gaming sports, wide temperature DRAM modules for industrial purposes, and memory modules for servers / workstations / desktop computers / notebook, etc.

B. Flash Products
i. SSD: Capacity expansion, higher transmission speed, various form factors, high speed USB portable disks, SSD with high Read/Write numbers, wide temperature SSD for embedded products, and SSD for special purposes such as power failure protector and encryption function.
ii. Memory cards: Memory cards for surveillance cameras, high speed memory cards, memory cards with high Read/Write numbers, wide temperature memory cards for embedded products.
iii. USB portable disks: Type-C series of portable disks, flash memory portable disks built-in with multiple functions, flash memory portable disks with stylish appearance, and flash memory portable disks with ultra-high capacity. Compact and lightweight flash memory portable disks, and flash portable disks equipped with encryption specification, etc.

C. Multimedia Products

Multi-lens Dash Cam, body camera, and NAS cloud storage products, etc.

D. Hard Disk Products
2.5,” various types of high capacity SSD (Solid State Disk), various 2.5”/3.5” large capacity portable hard disks of stylish appearance and different functions, Network Attached Storages (NAS) and external DVD, BD burners, etc.
E. Card Readers and Accessories

Type-C interface related peripheral products, such as Hub, card reader, and Docking Station, etc. Card readers equipped with stylish appearance and support the latest memory card specification, and card readers equipped with encryption function. Card readers which are applicable to OTG portable disks, etc.

5.1.2. Industry Overview

The Current Status and Development of the Industry
(1) DRAM Memory Industry Overview

In the field of industrial application, with the broad applications of Internet of Things (IoT) and the increasing quantity of industrial computers, cloud computers and servers, in conjunction with increase of the applications in the fields of the edge computing, media streaming and auto electronics, etc. derived from the AI technologies, DDR4 has certainly become the main stream specification in the market, and the capacity of memory modules continues to increase. Transcend will continue to develop modules of higher frequency and larger capacity, and the business development of the memory modules is expected to continue to expand in the industrial market.

(2) Flash Memory Industry Overview

Consumer memory cards are typically used in the applications of smart phones and digital cameras. The growth of digital camera products is slowing down in recent years. Nevertheless, the popularity of surveillance cameras, network cameras, home care cameras and game applications have increased in recent years such that memory cards are maintained with a certain sales volume; however, the demand for USB portable disks has also slowed down due to the development of cloud storage.

Consumer SSDs have greater Read/Write speed than traditional hard disks, and they

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are also equipped with the advantages of compact, lightweight, energy saving and shock resistant, etc., such that the number of users is increasing gradually. Consumers are also starting to accept the replacement of traditional hard disks with SSDs in the after-market, and presently most of the new Ultrabook/Notebooks launched in the markets also start to be equipped with SSD. Accordingly, the demand for SSDs is expected to continue to grow significantly. Such growth will also drive the demand for NAND Flash.

Generally, in terms of the supply of the flash memories in recent years, under the continuous transformation of manufacturing process of the main suppliers and the rapid development of TLC and 3D Nand, the production costs of suppliers have decreased gradually, which is beneficial to the continuous growth of the demand for Nand flash. In 2020, the applications that mainly consumed the Nand Flash were the two products of mobile phone built-in Nand flash and SSD products. After 2021, with various emerging applications associated with the industries of 5G and AI, etc., along with all kinds of business opportunities in the future, it is expected that the Nand flash growth in 2021 will surpass the performance in 2020. Accordingly, for flash products, Transcend will focus on the development of two fields of SSD and industrial applications as the main targets.

2. The Links Between Upstream, Midstream and Downstream of the Industry Supply Chain

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

Upstream Middle Stream Downstream
Dynamic Random Access
Memory (DRAM) System
Manufacturer Integrator
Static Random Access
Memory (SRAM)
Manufacturer
Flash Memory (FLASH)
End User
Manufacturer
DRAM Module/
PCB
Flash Memory
Manufacturer
Manufacturer
Chipset
Manufacturer
Retailer
Connecter
Manufacturer
Electronic Component
(Resistor, Capacitor, Plate,
Lens, Display, & Power Distributor
Adapter, etc) Supplier
----- End of picture text -----

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Development Trends and Competition status of Products
The main application of DRAM is for general personal computers and enterprise applications. The growth of personal computer market has been slow in recent years; however, under the development of the enterprise application in two major trends of cloud and automation, a lot of DRAM chip suppliers adopt the countermeasure of transportation and reduction of production to cope with the trends. The module industry adjusts the strategy according to the upstream industry and has also shifted the main product development focus to niche products, such as AI edge computing, 5G products, data center, servers or industrial applications.

Flash demand also faces similar problem. The greatest consumption of memory cards is from the smart phone market, however, the market competition is severe, and growth of the market clearly indicates a slowing down trend. For other sources with use of large quantity of memory cards, such as digital camera market, such sources have been suppressed due to the rapid development of smart phones. As for USB portable disks, due to the development of new tools of cloud storage, etc., the market is facing the challenge of decreasing demand.

Nevertheless, for the upcoming era of 5G, 5G network will be widely applied to AI technology and other new technologies of IoT platform, etc., data quantity will be driven to expand rapidly, and to meet such rapid expansion, the market demand for real-time computation and massive storage is expected to grow significantly, and such plentiful use scenarios will certainly be associated with massive amount of use of data. Consequently, the application aspects of DRAM and Flash will continue to increase. For example, the market of industrial computer or enterprise application is expanding, and it will continue to drive the demand for DRAM and Flash, such that the down time of the flash market in 2020 will be improved.

In general, consumer products are affected by the decrease of ASP and the reduction of market scale, and since products are of low differentiation and the entry barrier is relatively lower, the competition becomes more severe. Nevertheless, for the industrial application market, with the rapid development of industrial computers, relevant component markets are also driven to grow. Industrial applications are equipped with the characteristics of stable quality, large investment in research and development, capability for customization and flexibility in operation as well as stable supply, etc., the entry barrier is relatively higher. Transcend has deep-rooted in the management of the market in this field; therefore, the company has certain competitive advantages.

Under the industrial environment of extremely severe competition, the Company has been able to achieve continuous growth. In addition to the original consumer market, the Company also actively expands the embedded market and strategy products. The Company has not only been ranked 62[nd] by the U.S. Bloomberg Businessweek among Top 100 Technology Company Worldwide but also been ranked by Ministry of Economic Affairs as Top 20 International Brand in Taiwan for the 14[th] consecutive year, indicating that under such severe international market, the Company has been able to demonstrate its management strength in stable brand development.

The competitive advantages of the Company are well demonstrated in the following four aspects:

(1) Supply and Logistics

A. Rigorous supply chain management
B. Global timely logistics: virtual warehouse
C. Excellent inventory management

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(2) Innovation and Production

A. Professional internal research, development and design teams
B. Own factory manufacturing and rigorous quality control
(3) Product and Inventory
A. Diverse product lines offering a wide range of products
B. Complete after-sale service
C. Global inventory real-time management
(4) Comprehensive Backend Support
A. Rigorous financial and accounting management
B. Brand reputation and global marketing support
C. Product return and exchange management and repair technical service

As a leading manufacturing well-known for its professional storage media, all employees of the Company continue to pursuit greater achievements. To active development of channel service, we also establish a broader vision: with our technology advantages in the products of memory cards, flash memory products, storage equipment products, multimedia products and industrial products, along with the global logistics and marketing network providing quality and professional services, we have been able to successfully establish a sound brand image and has become the leading manufacturer in global consumer electronics and embedded products.

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5.1.3. Technologies, Research and Development Overview

A Listing of Research and Development Expenditures as well as Technologies and/or Products Successfully Developed in 2020 and as of the date of this Annual Report

Unit: NT$ thousands

==> picture [450 x 640] intentionally omitted <==

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Year R&D Expenses R&D Achievements
[Memory Card] TS256GUSD330S aims at mobile phone games and palm
gaming devices. Transcend’s high performance memory cards satisfy the
latest generation of A2 speed grade and have excellent random R/W
performance.
[SSD] SSD452K2 2.5” SSD is equipped with SATA3 transmission
interface and is also equipped with the durability level of 3K program/erase
cycles as well as the Corner Bond technique. SSD452K2 is equipped with
the characteristic of quasi-wide temperature (-20℃–75℃), such that it is
able to satisfy demands of task intense applications completely.
[SSD] MTS952T2/552T2 M.2 SSD is equipped with the SATA3
transmission interface. It is equipped with 30µ” gold finger coating layer
PCB and the reinforcement technology of Corner Bond of in order to
provide excellent durability, and it is also built-in with DRAM flash
memory. Furthermore, MTS952T2 SSD is equipped with the characteristic
of quasi-wide temperature (-20°C – 75°C), and it is also equipped with the
durability level of 3K program/erase cycles.
[SSD] MTE452/T2652T2/662T2 PCIe Gen 3 x4 interface, complying with
the specification of NVMe 1.3. It is equipped with 30µ” gold finger coating
layer PCB and the reinforcement technology of Corner Bond of in order to
provide excellent durability, and it is also built-in with DRAM flash
memory. Furthermore, MTE652T2 SSD is equipped with the characteristic
of wide temperature (-20°C – 75°C), and it is also equipped with the
durability level of 3K program/erase cycles.
[SSD] MSA452T2 mSATA SSD uses Serial ATA interface and is built-in
2020 133,355 with powerful controller, such that it is able to provide fast transmission
speed. It is equipped with 30µ” gold finger coating layer PCB and the edge
reinforcement technology of Corner Bond of in order to provide excellent
durability, and it is also built-in with DRAM flash memory. Furthermore,
MSA452T2 is equipped with the characteristic of quasi-wide temperature
(-20°C – 75°C) and the durability level of 3K program/erase cycles. Its size
is only 1/8 of conventional 2.5” SSD, and it is most suitable to Ultrabook,
tablet computers and thin servers with confined space.
[SSD] 220Q SSD uses the latest QLC NAND flash memory technology,
and also increases the unit storage density to expand the capacity. The
memory chip is selected and the firmware algorithm is enhanced to
improve its reliability.
[SSD] MTE240S uses the latest PCIe Gen4 x4 high speed interface, and is
equipped with graphene heat sink, thereby providing nonstop user
experience for consumers.
[Memory Card] For TS256/512GCFE820, to cope with various newly
developed high-end digital camera equipment, Transcend launches the
CFexpress 820 Type B memory card, and it is able to provide the
outstanding transmission performance of 1700MB/s and it also reaches the
high storage capacity of 512GB. Transcend CFexpress memory card is
downward compatible with specific XQD® camera equipment.
[Card Reader] TS-RDC3 is used for Android handheld device and iPad Pro
models equipped with Type-C port. With Type-C transmission cable, USB
3.2 Gen 1 transmission interface, and equipped with SD card slot and
microSD card slot, it is able to access memory card content on Type-C
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==> picture [450 x 678] intentionally omitted <==

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Year R&D Expenses R&D Achievements
device swiftly, making data transmission and file sharing simpler. By
downloading the exclusive mobile APP of Transcend Elite, users are able to
browse, store, duplicate and share any digital files on mobile phones and
tablets freely and conveniently.
[Card Reader] TS-RDE2 is exclusively designed for CFexpress memory
card used by camera professionals, and it is equipped with the USB 3.2
Gen 2x2 transmission interface with a transmission rate reaching as high as
20 Gbps, thereby satisfying the high speed transmission demand of
professionals. RDE2 card reader is able to support devices equipped with
USB Type-A and Type-C ports at the same time, thereby sufficiently
demonstrating the convenience and flexibility of the device.
[Dash Cam] TS-DP10A-32G adopts a simple and compact design, and it is
equipped with the top grade of STARVIS™ photosensing element, thereby
enhancing nighttime shooting effect, and it is also able to precisely present
rich color and high resolution video quality. It also includes an ultra-wide
lens of 140° in order to provide an omni-directional view without blind
spots; it records 1080P high quality video at 60 frames per second, and is
equipped with WI-FI function to achieve mobile streaming; it is also
equipped with the emergency recording function in order to prevent abrupt
interruption of recording, thereby achieving secured protection for safety.
[USB Portable Disk] JF280T portable disk uses the latest generation of 3D
NAND technology, and it is able to stack as many as 96 layers of 3D flash
memories, thereby significantly breaking through the upper limit of unit
density, and achieving higher storage performance. It is equipped with high
speed USB 3.1 Gen 1 transmission interface, and it provides a large
capacity storage solution with a compact size.
[Memory Card] The uSD230I series of memory card uses the SLC mode
technology and is equipped with excellent durability and stability, and the
specification of 8GB-64GB are further provided, thereby providing a
solution more competitive than SLC memory card.
[Memory Card] The uSD430Ts series of memory card is equipped with
high quality 3D stacked flash memories, achieving outstanding continuous
program speed, and it is also equipped with 3K program/erase cycles,
thereby providing durability equivalent to MLC chip, and it also supports
the SMART function.
[Memory Card] The uSD340S series of product aims at mobile phone
games and palm gaming devices. Through advanced technology, it is able
to achieve a transmission speed exceeding UHS-I 104MB/s. Transcend’s
high performance memory cards satisfy the latest generation of A2 speed
grade and have excellent random R/W performance.
[Memory Module] DDR4 3200 U-DIMM / SO-DIMM / ECC-DRMM/
R-DIMM memory modules are suitable to industrial desktop computers
and notebook computers.
[SSD] SSD530K is equipped with the SATA III 6Gb/s transmission
interface, and it is built-in with DRAM flash memory. With the use of the
3D NAND flash memory in conjunction with Transcend’s SLC mode
technology, the durability is able to achieve 100K program/erase cycles
(P/E cycles) such that its performance is competitive to SLC. It complies
with the quasi-wide temperature specification, and it is able to operate
under the working environment of -20℃ to 75℃. It is suitable to industrial
equipment of embedded system, automated machinery and fanless system,
etc.
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Year R&D Expenses R&D Achievements
[SSD] SSD452P 2.5" SSD is equipped with SATA3 transmission interface
and is also equipped with the durability level of 3K program/erase cycles as
well as the Corner Bond technique. SSD452P is equipped with the
characteristic of quasi-wide temperature (-20℃–75℃), and it also supports
the intelligent power protection (IPS) function in order to ensure the
integrity of data and to satisfy demands of task intense applications
completely.
[SSD] MTE662P PCIe Gen 3 x4 interface, complying with the latest
specification of NVMe 1.3. It is equipped with DRAM flash memory in
order to provide excellent random access speed and to achieve the
durability level of 3K program/erase cycles It is equipped with 30µ" gold
finger coating layer PCB and the edge reinforcement technology of Corner
Bond. MTE662T2 is equipped with the characteristic of quasi-wide
temperature (-20℃–75℃), and it also supports the intelligent power
protection (IPS) function in order to ensure the integrity of data and to
satisfy demands of task intense applications completely.
[SSD] MTS952P M.2 SSD is equipped with the SATA3 transmission
interface. It is equipped with 30µ” gold finger coating layer PCB and the
reinforcement technology of Corner Bond of in order to provide excellent
durability, and it is also built-in with DRAM flash memory. Furthermore, it
is equipped with the characteristic of quasi-wide temperature (-20°C–75°C)
and supports the intelligent power protection (IPS) function in order to
ensure the data integrity. It is also equipped with the durability level of 3K
program/erase cycles.
[SSD] MSA452P mSATA SSD uses Serial ATA interface and is built-in
with powerful controller, such that it is able to provide fast transmission
speed. It is equipped with 30µ” gold finger coating layer PCB and the edge
reinforcement technology of Corner Bond of in order to provide excellent
durability, and it is also built-in with DRAM flash memory. Furthermore,
MSA452T2 is equipped with the characteristic of quasi-wide temperature
(-20°C–75°C) and supports the intelligent power protection (IPS) function
in order to ensure the data integrity. It is also equipped with the durability
level of 3K program/erase cycles. Its size is only 1/8 of conventional 2.5”
SSD, and it is most suitable to Ultrabook, tablet computers and thin servers
with confined space.
[SSD] SSD432K 2.5" industrial SSD is equipped with the SATA III 6Gb/s
transmission interface, and it has also qualified rigorous factory test while
being able to achieve the durability level of 3K program/erase cycles. It’s
outstanding and reliable performance is able to satisfy the demands of task
intense applications completely.
[SSD] MTE632T M.2 industrial SSD is equipped with the PCIe Gen 3 x4
interface, and complies with the latest specifications of NVMe 1.3 and M.2.
2021
42,059 Its size is more compact and is suitable to thin and lightweight portable
Q1
devices. It is equipped with outstanding and reliable performance while
reaching the durability level of 3K program/erase cycles.
[SSD] MTS532T/932T M.2 industrial SSD is equipped with the SATA III
6Gb/s transmission interface, and complies with the M.2 specification. Its
size is more compact and is suitable to thin and lightweight portable
devices. It is equipped with outstanding and reliable performance while
reaching the durability level of 3K program/erase cycles.
The above information for the year 2020 has been summarized for the period from January 1 to
December 31, 2020. The information for year 2021 has been summarized for the period from
January 1 to March 31, 2021.
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2. Ongoing R&D Projects

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Product Current Expected Mass
Ongoing Projects Key Success Factors
Line Progress Production Time
DRAM modules of Some products have (1) Specialized
higher frequency, entered the mass specification for
DRAM modules of production stage, different fields
higher capacity, and others under (2) Increase of data
DRAM DRAM modules for Development development transmission speed
Products gaming sports, and in progress progress are (3) Increase of product
wide temperature expected to enter reliability and
DRAM modules for the mass production compatibility, increase
embedded products, stage starting from of operating
etc. Q2, 2021. temperature
Capacity expansion,
higher transmission
(1) Increase of access
speed, various form Some products have
capacity and R/W
factors, high speed entered the mass
speed
USB portable disks, production stage,
(2) Increase of data
SSD with high R/W and others under
security and
Flash numbers, wide Development development
encryption level
Products temperature SSD for in progress progress are
(3) Compact and light
embedded products, expected to enter
with great portability
SSD for special the mass production
(4) Implementation of
purposes such as stage starting from
new memory
power failure protector Q2, 2021.
manufacturing process
and encryption
function.
(1) Product specifications
and functions with
unique characteristics
in comparison to other
Storage devices with products in the market
Some products have
various new (2) Proper control of
entered the mass
specifications/interface product mass
production stage,
s, dual lens Dash Cam, production and market
and others under
body camera launch schedule
Strategy Development development
equipment and (3) Completeness of
Products in progress progress are
accessories, personal accessories
expected to enter
cloud storage (4) Exclusive functions
the mass production
equipment and other for regional market
stage starting from
peripheral application and special groups
Q2, 2021.
products. (5) Increase of data
security and
encryption level
(6) Simplify product
complexity
The R&D budget for the ongoing projects accounts for approximately 80% of the total R&D budget in
2021. And the R&D budget is estimated to account for 1.0%–1.5% of the whole-year revenue in 2021.
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5.1.4. Long-term and Short-term Business Development Plans

1. Short-term Business Development Plan

(1) Embedded Business Management

The Company has invested a great amount of resources in the management of embedded products for a long period of time, and the Company has always adopted the business philosophy of excellent quality and customer-oriented approach; consequently, the Company has been able to successfully gain customers’ trust and support and became the leading brand in the embedded field. Transcend further actively invests in the embedded products business and copes with the development trend of industrial computer and automation, etc., thereby expanding the business performance in the embedded field.

(2) Expansion of R&D Department

The Company is equipped with a complete R&D team, and in the future, the Company will continue to actively recruit outstanding R&D talents in order to continuously develop and launch comprehensive and multi-function product series based on the attitude of pursuit for excellence and perfection, in order to provide quality products to consumers and to establish brand loyalty, to satisfy the market consumer trend and to meet consumer demands, as well as to effectively reduce cost and improve production efficiency at the same time.

2. Long-term Business Development Plan

(1)Brand Management and Channel Planning

A. Global Comprehensive Planning

Transcend establishes its headquarters in Taipei, and subsidiaries or service centers are also established in Germany, the Netherlands, United Kingdom, United States, Japan, Hong Kong, Beijing, Shanghai, Shenzhen and South Korea. The Company’s products are sold in more than 130 countries, and more than 80% of the Company’s customers are from markets outside Taiwan. To continue to enhance the planning and establishment of sales channel, the Company collaborates with global channel distributors/retailers closely, and will continue to establish sales points at all major areas worldwide, thereby allowing the brand image and visibility of the Company to be deep-rooted in the global market.

B. Investment in Marketing Activities

The Company mainly develops the market with the own brand of “Transcend.” Accordingly, the Company has always been active in the development of marketing activities. Through collaboration with local channel distributors/retailers in different regions, the Company provides the marketing budget and organizes various marketing activities, such as advertisement, new product launch, new product media testing, distributor training and contest and road show, etc., while matching with the local customs and culture, thereby achieving effective market development and establish the brand of Transcend swiftly. Consequently, maximum marketing effect through effective resources can be achieved.

C. Deep-rooted in Local Market

To develop marketing channels and engage in close collaboration with global channel distributors/retailers, the Company recruits outstanding talents at overseas subsidiaries and implements the strategy of recruiting local sales specialists and management personnel in order to develop the market in depth and to enhance management performance through the local talent’s language advantages and cultural understanding.

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(2)Continue to Optimize Operational System

A. Completeness and Diversity of Product Lines

The greatest advantage of the Company lies in the diversity of products capable of satisfying the one-stop shopping demand of customers. The product lines of the Company include special and standard memories, various types of small flash memory cards, portable disks, portable hard disks, Dash Cam, body cameras, personal cloud storage devices and SSDs, with the number of product types reaching more than 1,000.
B. Product Customization Service and Comprehensive Embedded Solution
The Company provides complete product customization service to satisfy demands of different customer groups. Plentiful embedded product lines demonstrating diverse solutions for embedded purposes. In addition, the Company upholds the principle of excellence and perfection to continuously optimize the quality control system. The Company will continue to collaborate with outsourcing wafer packaging vendors equipped with ISO/TS16949 certification, in order to ensure the maximum protection for customers and to push the Company’s products to the global automotive market.

For diverse and comprehensive product functions, the Company aims to satisfy the purchase characteristics of different consumer groups through various sales channels in order to further expand the depth and breadth of the sales level, thereby achieving the benefit of economics of scale and increasing the global market share.

(3)Complete After-Sale service

Since customers emphasize the after-sale service and product quality, rather than mere price difference, brand value becomes apparent when products are of excellent quality. The function and performance differences among memory products are reducing; therefore, the Company aims to demonstrate the strength and to differentiate from the competitors through complete product consultation and after-sale service while continuously improving the product quality, thereby establishing the brand recognition and trust among distributors and users.

5.2. Markets and Overview of Production and Sales

5.2.1. Market Analysis
Main Products and Sales Region

The product lines of the Company cover channel memory products and embedded products, including special and standard memories, various types of small flash memory cards, portable disks, portable hard disks, SSDs, Dash Cam, body camera and personal cloud storage devices, etc. Under the complete global planning, the Company has 13 business locations worldwide and Taiwan as the main production base, and the region of sales further includes all global markets. Through comprehensive sales strategy and excellent quality, the brand of Transcend is promoted worldwide.

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Sales region in the last two years:

Unit: NT$ thousands

==> picture [439 x 133] intentionally omitted <==

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2020 2019
Area
Amount % Amount %
Taiwan 2,521,695 22.03 2,794,634 20.71
Asia 4,075,807 35.61 4,724,037 35.00
Americas 1,163,131 10.16 1,200,675 8.90
Europe 2,822,582 24.66 3,799,177 28.15
Others 863,481 7.54 977,663 7.24
Total 11,446,696 100.00 13,496,186 100.00
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Market Share
Regarding the DRAM memory industry and the flash memory industry, due to the fine product categories (SDRAM, DDR, DDR2, DDR3, DDR4, flash memory card, portable disk, Dash Cam, body camera, personal cloud storage device, and SSD, etc.), and due to the difference between the contract market and spot market, the market share cannot be estimated precisely. According to the results of various market survey institutions, the global market share of Transcend continues to increase. Looking into the future, the Company will continue to increase the market share and achieve the goal of reasonable profit through continuous effort.
Future Market Demand/Supply Conditions and Growth Potential
(1) DRAM Module
- DRAM module carrying rate continues to increase, the shipping ratio for the mainstream 4GB/8GB/16GB modules continue to reach new highs. As the quantity of cloud computers, servers and data centers increases, the shipping volume of 16GB/32GB module is expected to grow rapidly this year.
(2) Flash Products

As the application of SSD becomes more popular, including broad applications in portable hard disks and built-in storage devices of handheld video recorders, the consumption volume of SSD will continue to increase. Regarding the field of embedded products, applications related to 5G, AI and data center in 2021 are expected to continue to grow, and the demand for workstation and server will increase. All of these applications require massive data storage; therefore, the data storage demand will continue to increase, which will further drive the shipping volume of SSD significantly.

For memory cards, the applications will continue to be widely used as storage medium for channel products, such as 3C consumer electronics of smart phones, digital video recorders, tablet computers, Notebook, Ultrabook, multimedia players, gaming devices, surveillance cameras, home care cameras and automobile navigators, etc. In addition, with the continuous emerging of new applications, memory card demand is expected to maintain the same level or show certain level of growth.

The Company’s Competitive Niche
(1) Internationalization of sales network, distribution of market channels Since the establishment, the Company has been committed to the own brand management and channel planning and continuously exerts efforts in differentiating

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the Company from traditional domestic professional OEM manufacturer. In terms of the sales and marketing strategies, the Company aims to establish the brand image of high quality for the brand of “Transcend,” and in the professional memory card field, the Company targets the “End Customers,” supply distributors, system operators and retail market, thereby reducing the channel gap and allowing both the Company and customers to obtain greater profits. In addition, with the continuous improvement of the Company’s position in the industry and through providing comprehensive product lines and complete after-sale service system, the Company is able to increase customer sales continuously, including strategic collaboration with international front line channel operators. Presently, the Company has over 5,000 loyal customers worldwide and has established a solid and stable sales network with cooperation of subsidiaries in various countries.

(2) Establish brand image, deep-rooted in local market “Transcend” is one of the few successful domestic brands that have received high praise internationally. For both domestic and international memory product markets, Transcend is the brand representing stability and high quality, and such brand image has been deep-rooted in the mind of consumers. Through media advertisements of magazines, newspapers, outdoor large signboards and internet network, as well as marketing activities of news release, etc., the Company expands the brand image of Transcend, which is beneficial to the improvement of the brand awareness; nevertheless, the Company still values excellent product and quality service as the most essential factors to achieve high brand value. Furthermore, the Company also establishes the Transcend online shopping website in order to further expand and develop the channel structure of the Company while strengthening the brand image of Transcend. Moreover, the Company is able to obtain the comments and feedback from the end consumers directly, thereby using such comments and feedback as the reference for product and service improvement.
(3) Utilize purchase advantage effectively, expand product competitiveness The Company has been established for more than thirty years, and the type and quantity of purchase items are enormous and continue to increase. Through excellent partnership with upstream vendors of DRAM and NAND Flash established for a long period of time over the past years, the Company is able to achieve the best cost structure, thereby increasing the product price competitiveness. In addition, through the in-depth collaboration with the upstream vendors, the Company is able to introduce new products in the market faster than competitors, in order to seize the business opportunities in the market effectively and to become the leading brand in the market.
(4) Continue to develop strategy products, strengthen brand value The Company started the business based on the niche memory modules, following which the Company then entered the standard memory module and flash memory market. As the Company’s planning in the global traditional sales channel becomes more complete, the Company actively engages in the development of strategic products of Dash Cam, body camera, external portable hard disks, card readers, personal cloud storage device and SSDs, etc., such that through diverse product series along with the addition of other sales channels, the Company is able to satisfy the purchase characteristics of different consumer groups and to further expand the depth and breadth of sales level.
Favorable and Unfavorable Factors for Future Development and Response to Such Factors

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Favorable Factors

(1) Complete product lines, diverse product types
With more than thirty years of development, the Company invests great research and development budget and human resource for the establishment of complete product lines, and the main products include various memories, digital memory cards, USB portable disks, external hard disks, card readers, personal cloud storage devices, Dash Cam, body camera and SSDs, etc. There are more than 1000 types of products available for all kinds of electronic product applications, thereby satisfying the customers’ demand of “one-stop shopping.” The R&D team of the Company also synchronizes with the market trend, and will continue to develop and launch innovative products satisfying the market demands.
(2) Establish brand image, deep-rooted in local market
Over the past years, the Company has invested important resources in both product appearance design and product packaging continuously, in order to design and provide products meeting the global trend. In addition, the Company has received great recognition with numerous international industrial design awards, and also provides multi-language instruction manuals and product catalogues for various countries in order to be deep-rooted in the local market. Accordingly, the Company has successfully obtained great support from consumers on the Company’s products.
(3) Internationalization of sales network, distribution of market channels The Company is devoted to the own brand management and marketing, and customers around the globe are considered to be the market for the Company. Through the establishment of international market channels and after extensive years of market development and deep-rooted in new emerging markets and countries, the Company has accumulated more than 5,000 loyal customers worldwide, and through the cooperation of branch offices in various countries, the Company has established a solid and stable sales network. The export sales of the Company accounts for nearly 80% of the total sales, demonstrating the solid international sales network of the Company.
(4) Equipped with comprehensive global logistics management capability The memory expansion cards of the Company are the key products with diverse models and limited quantity. The Company has also established subsidiaries or sales offices at Germany, the Netherlands, the United Kingdom, the United States, Japan, Hong Kong, Beijing, Shanghai, Shenzhen and South Korea. Due to the great number of product types, customers are widely distributed worldwide. To effectively control inventory and to manage the sales targets, the Company and all overseas sales offices are established with computer information system with complete functions. Accordingly, the headquarters is able to sufficiently and promptly understand the order receipt and inventory status of all overseas sales offices through network, in order to reduce the cost associated with overstock and to successful delivery, thereby improving product image and competitiveness.
(5) Increase product value with outstanding industrial design The functions of electronic products have shown minor variations all manufacturers and operators. Since several years ago, Transcend has already realized the importance of industrial design, and the Company is staffed with a professional industrial design team in pursuit of outstanding industrial design in order to improve product value. In recent years, the Company has received numerous important industrial grant awards of Germany iF design award, reddot design award, and Japan Good Design award, etc. In

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2020, Transcend received the honor of “Taiwan Excellence Award” for the seventeenth consecutive year, a remarkable record achieved by the Company.

(6) Professional and dedicated R&D team
The Company has established a professional and dedicated R&D team for each product, and the Company’s own R&D team is able to promptly solve issues and satisfy demands of customers in terms of the product compatibility, reliability and yield rate, etc., thereby establishing a high barrier that cannot be overcome or surpassed by operators in the same industry.

Unfavorable Factors and Actions

(1) Violent price fluctuation of critical raw materials, affecting operational stability The prices of the critical raw materials of DRAM, NAND Flash chips of the Company fluctuate violently, and if a downstream operator cannot effectively manage the chip supply sources and control the inventory, then under the situation where the demand for chips is higher than supply and the market price surges, such operator would not be able to handle customers’ strong demand and to provide sufficient products. Furthermore, when the chips are under the condition of supply over demand and the market price plunges, then the production cost and overstock cost would become overly high due to the high purchase price of the original raw materials. Consequently, market price fluctuation often results in the control difficulty of the sales price and cost, such that the stability of the operation is affected in certain extend.

 Action

The Company has constructed a complete information system, and the inventory level can be reasonably controlled and enhanced through the assistance of such system. Furthermore, the Company focuses on the operation and long-term collaboration relationship with the suppliers and customers, and the Company also appropriately controls risks and adjusts strategies according to the market condition periodically, thereby ensuring reasonable price and maintaining a health inventory level.

(2) Low entrance barrier for standard memory card products and flash memory card products, leading to price war
Most of the operators in the same industry expand production capacity to seek high revenue; however, the market demand is not as optimistic as expected. To fill up the production capacity gap newly created, a lot of the operators are lowering their prices for competition, or even selling products for minimum profit or no profit, leading to the situation of chaotic market prices that is unfavorable to the product development and promotion. Unless a company is able to manage niche products and channels, or is equipped with brand value, it would be difficult to achieve stable development. Transcend is equipped with both of these characteristics and values them as the long-term goal.

 Action

In addition to standard products, for DRAM and NAND Flash related products, the Company also offers special products at a certain ratio. The Company also develops numerous industrial control products and strategic products in order to increase the difference from the competitors and to improve profitability while providing the one-stop shop service to customers.

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5.2.2. Main Usage and Manufacturing Processes of Main Products
Main Products and Their Main Usage
- (1) Digital memory card/USB portable disk products

For flash memory card/USB portable disk, the main application is to increase the data storage memory capacity of various digital equipment, such as multimedia mobile phones, digital cameras, tablets, PC/NB, surveillance cameras, gaming devices and smart phones.

(2) Solid State Drive (SSD)

SSD is equipped with the characteristics that are absent in traditional hard disks, and such characteristics include shock resistant, high Read/Write speed, quiet and low power consumption, etc. Presently, for both notebook computers and desktop computers, the ratio of SSD has increased significantly, and the individual upgrades with SSD made by consumers on computer equipment also indicate great popularity. As the price of SSD becomes widely accepted by consumers, flash memories are expected to have the greatest popularity and application in the future.

(3) Memory products

The function of memory modules is to expand the computer data processing capacity and to increase the processing speed, and the main applications include personal computer system, network system, industrial computers, as well as equipment, such as desktop computers, notebook computers, laser printers, servers, workstations, routers and fax machines.

(4) Dash Cam

As the global automotive market continues to grow, consumers focus more on the personal driving safety. In the years of 2020/2021, Transcend continues to launch Dash Cam of greater performance, demonstrating Transcend’s determination in the development of the global Dash Cam.

(5) Body Camera

In addition to the automotive market, in 2015, Transcend has also launched Body Camera, and its main purpose is for military and police security. For the years of 2020/2021, the Company continuously launches new models and achieves further growth in the security and surveillance market.

(6) Storage equipment

To satisfy the demand for information and personnel mobility, portable hard disks are equipped with the characteristics of compact size, high capacity and portability. The personal data portability and the design of confidentiality and security are increased in order to provide a comprehensive portable data solution for professionals in various sectors. As the industrial control application demand increases, Transcend launches numerous storage products satisfying different industrial applications, such as SSD, flash memory modules and industrial grade CF/SD memory cards.

(7) Accessories and card readers

As the popularity of digital camera, camera phones and multimedia devices increase, the demand for transmitting and exchanging videos, music and various multimedia data effectively and swiftly among personal computers and other portable devices are increasing. Transcend launches various types of portable card readers and adapters, providing direct and convenient access interfaces, such that they offer the best choices to users having the preference of using high speed memory cards for transmission of digital data, music and photos. In addition, in view of the great popularity of

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smartphones and tablets nowadays, for the upcoming USB 3.2 era, Transcend further launches high speed products and OTG/Type-C flash drives products, allowing users to enjoy faster transmission speed and achieving greater convenience in cross-platform data transmission.

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2. Main Products and Their Manufacturing Processes

Flow Chart of Manufacturing Processes

==> picture [468 x 644] intentionally omitted <==

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

Sales Finished goods
Department Warehouse
N N
Manufacturing
Y
Production Schedule W/O
Material Preparation
SMT
Y
Second
Stage
Outsourced Processing In-plant Processing N
Incoming Quality
Testing
Control (IQC)
Packaging
Final Quality Control
(FQC)
Warehouse Receiving
----- End of picture text -----

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5.2.3. Supply Status of Major Raw Materials

==> picture [471 x 608] intentionally omitted <==

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

Major Raw Materials Purchasing Strategy and Supply Situation
The Company maintains excellent and long-term relationship with
all main suppliers in the industry. Accordingly, even under the
DRAM condition of tight supply, the Company is still able to obtain stable
supply with an advantageous price, thereby ensuring sufficient
supply of products to downstream customers.
The Company maintains excellent relationship with leading
operators in the industry. In addition to obtaining stable supply
source and cost advantages through purchase strategy, the Company
Nand Flash
has established long-term technical collaboration relationship with
suppliers in order to maintain strong competitiveness for, NAND
FLASH related products of the Company.
As the hard disk market supply is considered stable, after the
strategic adjustment, the prices of suppliers are maintained at a
decreasing trend. The Company will continue to control inventory in
Hard Drive order to prevent the risk of price dropping. The Company will also
maintain close relationship with the key suppliers in order to
achieve clear advantages in terms of material supply, quality and
cost.
The Company selects cooperating partners carefully, and all of the
cooperating partners are well-known operators with excellent
Controller
company structure, thereby ensuring the product quality and cost
advantages.
All of the cooperating partners of the Company are global top
hundred PCB suppliers, and the Company also places orders
PCB according to the capacity and expertise of suppliers, such that the
effects of quality and cost can be achieved at the same time while
maintaining stable product supply.
The overall market for optical drive indicates continuous decline,
and the price of optical drives continues to drop. The suppliers of
the Company are top two suppliers in the industry and their
Optical Disk Device
corporate structures are sound. In addition, the Company adopts the
strategic collaboration method to ensure the quality, stable supply
and price competitiveness.
Most of the designs of mechanical parts are customized. The
Company is able to select limited long-term cooperating partners
Mechanical Part through detailed cost structure analysis and comparison in order to
maintain stable quality and to continue to contact new suppliers for
cost comparison, thereby ensuring price competitiveness.
----- End of picture text -----

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5.2.4. Company Names, Amount and Percentage of Major Suppliers and Customers which were commanding 10%-plus Share of annual order volume in the Last Two Years
Major Suppliers

Unit: NT$ thousands

Item	2019	2019	2019	2019	2020	2020	2020	2020	2021(as of March 31,2021) (Note 3)	2021(as of March 31,2021) (Note 3)	2021(as of March 31,2021) (Note 3)	2021(as of March 31,2021) (Note 3)
	Company Name	Amount	Ratio to Annual Net Supplies (%)	Relation with Transcend	Company Name	Amount	Ratio to Annual Net Supplies (%)	Relation with Transcend	Company Name	Amount	Ratio to Quarterly Net Supplies (%)	Relation with Transcend
1	A	2,616,590	30.47	None	A	2,950,652	31.45	None	B	588,305	22.68	None
2	C	1,949,855	22.71	None	C	2,631,361	28.04	None	C	586,513	22.62	None
3									A	464,438	17.91	None
4									D	331,052	12.76	None
	Others	4,020,715	46.82		Others	3,800,943	40.51		Others	623,094	24.03
	Net Total Supplies	8,587,160	100.00		Net Total Supplies	9,382,956	100.00		Net Total Supplies	2,593,402	100.00

Note 1: Due to the restrictions of commercial confidentiality and non-disclosure of contracts, the names of suppliers are shown by codes. Note 2: Changes of increase/decrease were due to the business needs.

Note 3: The financial statements of 2021Q1 have already been reviewed by the CPAs.

2. Major Customers

Unit: NT$ thousands

	2. Major Customers	2. Major Customers	2. Major Customers	2. Major Customers					Unit: NT$thousands	Unit: NT$thousands	Unit: NT$thousands	Unit: NT$thousands
Item	2019				2020				2021(as of March 31,2021) (Note 3)
	Company Name	Amount	Ratio to Annual Net Sales(%)	Relation with Transcend	Company Name	Amount	Ratio to Annual Net Sales(%)	Relation with Transcend	Company Name	Amount	Ratio to Quarterly Net Sales(%)	Relation with Transcend
1	D	1,088,967	8.07	None	D	701,149	6.13	None	D	285,452	8.16	None
	Others	12,407,219	91.93		Others	10,745,547	93.87		Others	3,213,168	91.84
	Net Sales	13,496,186	100.00		Net Sales	11,446,696	100.00		Net Sales	3,498,620	100.00

Note 1: Due to the restrictions of commercial confidentiality and non-disclosure of contracts, the names of customers are shown by codes. Note 2: Changes of increase/decrease were due to the business needs.

Note 3: The financial statements of 2021Q1 have already been reviewed by the CPAs.

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5.2.5. Production in the Last Two Years

Unit: 1,000 pieces; NT$ thousands

Major Products		2020			2019
	Capacity	Quantity	Amount	Capacity	Quantity	Amount
FLASH+DRAM Products	22,479	18,682	6,951,685	25,939	23,616	7,742,083
Others	2,563	2,048	1,911,124	2,545	2,267	2,143,116
Total	25,042	20,730	8,862,809	28,484	25,883	9,885,199

5.2.6. Sales in the Last Two Years

5.2.6. Sales in the	Last Two Years	Last Two Years	Last Two Years	Last Two Years
					Unit: 1,000pieces;NT$thousands
Major Products	2020				2019
	Local		Export		Local		Export
	Qty	Amount	Qty	Amount	Qty	Amount	Qty	Amount
FLASH+DRAM Products	12,586	2,197,359	15,553	6,844,559	10,574	2,456,218	19,159	8,077,064
Others	250	324,336	1,827	2,080,442	285	338,416	2,197	2,624,488
Total	12,836	2,521,695	17,380	8,925,001	10,859	2,794,634	21,356	10,701,552

5.3. The Number of Employees, Average Service Year, Average Age and Educational Level Distribution Ratio in Last Two Years and up to the Publication Date of this Annual Report

Year	Year	2019	2020	As of April 19,2021
Number of Employee	Direct	688	670	653
	Indirect	654	640	628
	Total	1,342	1,310	1,281
Average Age		36.8	37.6	38.0
Average Years of		7.9	8.7	9.0
Education	Ph.D.	0.0%	0.0%	0.0%
	Masters	16.5%	15.2%	14.8%
	Bachelor’s Degree	58.2%	59.6%	59.7%
	Senior High	21.9%	22.0%	22.3%
	Below Senior	3.4%	3.2%	3.2%

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5.4. Environmental Protection Expenditures
During the product design process of the Company, for the selection of raw materials, auxiliary materials and packaging materials, internal professional personnel has performed product compliance inspection according to the international environmental protection laws and regulations reviewed and identified in order to ensure that the products sold comply with the international environmental protection laws and regulations.

The main manufacturing processes of the Company’s products include component mounting, board cutting, assembly, testing, packaging and sales to the customer end. During the manufacturing process, no waste gas or wastewater is discharged, and only industrial wastes are generated from the process. The industrial wastes are collected and classified according to their properties, and qualified supplier approved by the Environmental Protection Administration is entrusted to handle the cleaning and disposal of the wastes. The qualification certificate of the supplier entrusted is reviewed rigorously, and testing and reporting are performed in accordance with the laws and regulations in order to ensure that the industrial wastes are properly handled.

Any losses and disposition suffered by the company in the most recent fiscal year and up to this Annual Report publication date due to environmental pollution incidents: None.
Material Environmental Protection Expenditures: None.

5.5. Labor Relations

5.5.1. Employee benefit plans, continuing education, training, retirement systems, the status of their implementation, and the status of labor agreements and measures for preserving employees' rights and interests:
Employee benefit plans:
- (1) Insurance: To provide greater living protection to employees, in addition to the enrollment of labor and health insurances for employees according to the laws, the Company plans the group insurance for employees, and it covers term life insurance, accident insurance, hospitalization and medical insurance, and cancer health insurance, etc. For employees traveling on business trips, additional business travel safety insurance is applied in order to provide greater protection to employees.
- (2) Entertainment activities: The Company has established the Employees’ Welfare Committee according to the laws, and the activities of year-end party, family day and sports contest, etc., are organized annually in order to achieve physical and mental relaxation and to achieve coherence. Furthermore, the activity center is also installed with various fitness and recreation facilities, such as, table football, table tennis, snooker, fitness room and other equipment for employees’ use during their free time. Employees are also encouraged to participate in club activities and to establish friendship and communication through club activities.
- (3) Other benefits: Employees’ health is considered a fundamental aspect for the Company’s development. In addition to providing annual health examination to employees, the Company also sets up basketball courts and fitness room to provide diverse sports and recreation facilities. Employees are offered with the employee discount prices for the purchase of the Company’s products for own use. The employee cafeteria and café also offer meals at discount prices to employees. The Company irregularly provides gifts and issues marriage and maternity cash gift and funeral consolation money. Furthermore, through cross-industry alliance with other vendors, the Company provides greater benefits to the living of employees.

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Emoloyee continuing education and training:
As the Company is in the highly competitive technology industry, talents are the key factors determining the success of a corporate. Transcend has also valued talents as the most powerful and significant backup to the company. Through various learning methods of professional competence improvement courses, work transfer, overseas business trips and trade shows, etc., arranged by the Company, Transcend is able to cultivate employees equipped with functions of greater diversity and depth, thereby achieving the goals of the organization.

In terms of the training courses, each year, the Company organizes orientation training for new employees and also organizes competence improvement courses for sales, purchase and R&D personnel, as well as organizes or assigns personnel to participate in relevant external trainings according to laws and regulations.

Retirement systems:
- To meet the requirements specified by the laws and regulations, the Company contributes 6% of the insured monthly salary and deposits into the pension personal account at the Bureau of Labor Insurance monthly for new employees on-board since 2005 and existing employees who chose the new retirement pension system. For existing employees who chose the old retirement pension system and maintained their service years under the old system, the Company appropriates an appropriate pension reserve and deposits in the dedicated account at Bank of Taiwan, and the Supervisory Committee members are responsible for the supervision of the reserve fund.
Other labor agreements:
- The agreements between the labor and management of the Company are handled in accordance with the Labor Standards Act, and are explained in conjunction with the personnel management regulations upon the time when employees joining the Company for service. Relevant regulations are added or revised depending upon the operational needs of the Company.
5.5.2. Any Losses due to Labor Disputes and Any Estimated Losses and Countermeasures
Any losses and disposition suffered by the company in the most recent fiscal year and up to this Annual Report publication date due to labor disputes: None.
Any estimanted losses and countermeasures: None.

5.6. Important Contracts

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

Agreement Counterparty Contract Period Major Contents Restrictions
Lease Won Chin Investment Inc. 2019.6.12-2022.6.11 Land Lease Contract None
Cheng Chuan Technology
Lease 2019.6.12-2022.6.11 Land Lease Contract None
Development Inc.
Thunderbolt Technology
License Intel Corporation 2014.4.18- None
License Agreement
License [Memory Technologies ] 2019.12.26-2024.12.31 [MEMORY PATENT ] None
LLC LICENSE AGREEMENT
----- End of picture text -----

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6. Financial Information

6.1. Condensed Balance Sheet and Statement of Comprehensive Income for the Most Recent Five Years – Based on IFRS

6.1.1. Consolidated Condensed Balance Sheet

Unit: NT$ thousands

Year Item	Year Item	Financial Summary for The Last Five Years (Note 1)	Financial Summary for The Last Five Years (Note 1)	Financial Summary for The Last Five Years (Note 1)	Financial Summary for The Last Five Years (Note 1)	Financial Summary for The Last Five Years (Note 1)	As of March 31, 2021 (Note 2)
		2016	2017	2018	2019	2020 (Note 3)
Current assets		19,129,329	19,189,793	16,115,783	15,411,700	14,615,264	15,067,150
Property,Plant and Equipment		2,740,210	2,706,923	2,599,493	2,438,154	2,282,324	2,224,339
Intangible assets		-	-	-	-	-	-
Other assets		1,021,515	873,765	3,149,236	3,350,936	3,840,034	4,155,927
Total assets		22,891,054	22,770,481	21,864,512	21,200,790	20,737,622	21,447,416
Current liabilities	Before distribution	2,319,570	2,066,617	1,649,287	1,501,579	1,837,754	3,344,239
	After distribution	4,904,140	4,651,187	3,803,096	3,432,357	3,146,392	3,344,239
Non-current liabilities		244,550	205,569	234,923	292,363	227,842	220,924
Total liabilities	Before distribution	2,564,120	2,272,186	1,884,210	1,793,942	2,065,596	3,565,163
	After distribution	5,148,690	4,856,756	4,038,019	3,724,720	3,374,234	3,565,163
Equity attributable to shareholders of the parent		20,326,934	20,498,295	19,980,302	19,406,848	18,672,026	17,882,253
Capital stock		4,307,617	4,307,617	4,307,617	4,307,617	4,290,617	4,290,617
Capital surplus	Before distribution	4,799,075	4,691,385	4,605,233	4,346,854	3,945,369	3,730,838
	After distribution	4,691,385	4,605,233	4,346,775	3,960,698	3,730,838	3,730,838
Retained earnings	Before distribution	11,365,931	11,546,540	11,129,024	10,999,853	10,553,284	10,022,906
	After distribution	8,889,051	9,048,122	9,233,673	9,455,231	9,459,177	10,022,906
Other equityinterest		(145,689)	(47,247)	(61,572)	(130,902)	(117,244)	(162,108)
Treasurystock		-	-	-	(116,574)	-	-
Non-controllinginterest		-	-	-	-	-	-
Total equity	Before distribution	20,326,934	20,498,295	19,980,302	19,406,848	18,672,026	17,882,253
	After distribution	17,742,364	17,913,725	17,826,493	17,476,070	17,363,388	17,882,253

Note 1: 2016–2020 financial statements have been audited and certified by CPAs.

Note 2: The financial statements of 2021 Q1 have been reviewed by the CPAs.

Note 3: For the proposal for distribution of 2020 earnings, in accordance with the provisions of the Articles of Incorporation, the proposal on the distribution of earnings in cash and the proposal on the cash distribution from capital surplus have been approved by the board of directors’ meeting through special resolution. The remaining distribution items have not been approved through the resolution of the shareholders’ meeting; therefore, no adjustment has been made.

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6.1.2. Condensed Consolidated Balance Sheet - Parent Company Only

Unit: NT$ thousands

Year Item	Year Item	Financial Summary for The Last Five Years (Note 1)	Financial Summary for The Last Five Years (Note 1)	Financial Summary for The Last Five Years (Note 1)	Financial Summary for The Last Five Years (Note 1)	Financial Summary for The Last Five Years (Note 1)	As of March 31, 2021 (Note 2)
		2016	2017	2018	2019	2020 (Note 3)
Current assets		18,543,822	18,502,683	15,269,713	14,532,387	13,722,813	Not Applicable
Property,Plant and Equipment		1,653,180	1,724,494	1,712,699	1,644,401	1,540,175
Intangible assets		-	-	-	-	-
Other assets		3,021,883	2,927,401	5,229,958	5,256,311	5,686,690
Total assets		23,218,885	23,154,578	22,212,370	21,433,099	20,949,678
Current liabilities	Before distribution	2,702,978	2,480,264	2,027,568	1,810,735	2,114,521
	After distribution	5,287,548	5,064,834	4,181,377	3,741,513	3,423,159
Non-current liabilities		188,973	176,019	204,500	215,516	163,131
Total liabilities	Before distribution	2,891,951	2,656,283	2,232,068	2,026,251	2,277,652
	After distribution	5,476,521	5,240,853	4,385,877	3,957,029	3,586,290
Equity attributable to shareholders of the parent		20,326,934	20,498,295	19,980,302	19,406,848	18,672,026
Capital stock		4,307,617	4,307,617	4,307,617	4,307,617	4,290,617
Capital surplus	Before distribution	4,799,075	4,691,385	4,605,233	4,346,854	3,945,369
	After distribution	4,691,385	4,605,233	4,346,775	3,960,698	3,730,838
Retained earnings	Before distribution	11,365,931	11,546,540	11,129,024	10,999,853	10,553,284
	After distribution	8,889,051	9,048,122	9,233,673	9,455,231	9,459,177
Other equityinterest		(145,689)	(47,247)	(61,572)	(130,902)	(117,244)
Treasurystock		-	-	-	(116,574)	-
Non-controllinginterest		-	-	-	-	-
Total equity	Before distribution	20,326,934	20,498,295	19,980,302	19,406,848	18,672,026
	After distribution	17,742,364	17,913,725	17,826,493	17,476,070	17,363,388

Note 1: 2016–2020 financial statements have been audited and certified by CPAs.

Note 2: Pursuant to Article 7 of the Regulations Governing the Preparation of Financial Reports by Securities Issuers (adopting the International Financial Reporting Standards), the Company is not required to prepare the parent company only financial statements of 2021 Q1; therefore, the Company provides no financial information for 2021 Q1.

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6.1.3. Consolidated Condensed Statement of Comprehensive Income

Unit: NT$ thousands

Year Item	Financial Summary for The Last Five Years (Note 1)	Financial Summary for The Last Five Years (Note 1)	Financial Summary for The Last Five Years (Note 1)	Financial Summary for The Last Five Years (Note 1)	Financial Summary for The Last Five Years (Note 1)	As of March 31, 2021 (Note 2)
	2016	2017	2018	2019	2020
Operatingrevenue	22,104,915	20,964,853	17,615,965	13,496,186	11,446,696	3,498,620
Grossprofit	4,951,693	5,526,844	3,530,250	3,087,531	2,470,096	852,848
Profit from operations	3,307,745	3,997,648	2,139,754	1,781,010	1,211,936	518,455
Non-operatingincome(expenses)	(64,378)	(685,066)	513,793	308,733	290,445	143,348
Profit before income tax	3,243,367	3,312,582	2,653,547	2,089,743	1,502,381	661,803
Profit from continuingoperations	2,882,637	2,655,717	2,081,995	1,728,967	1,197,735	559,386
Loss from discontinued	-	-	-	-	-	-
Profit for theyear	2,882,637	2,655,717	2,081,995	1,728,967	1,197,735	559,386
Other comprehensive income (loss), net of taxes	(128,605)	100,214	(15,418)	(32,117)	12,175	(40,521)
Total comprehensive income for theyear	2,754,032	2,755,931	2,066,577	1,696,850	1,209,910	518,865
Profit attributable to shareholders of theparent	2,882,637	2,655,717	2,081,995	1,728,967	1,197,735	559,386
Profit attributable to non- controllinginterest	-	-	-	-	-	-
Total Comprehensive income attributable to Shareholders of the parent	2,754,032	2,755,931	2,066,577	1,696,850	1,209,910	518,865
Total Comprehensive income attributable to non-controlling interest	-	-	-	-	-	-
Earningsper share(Note 3)	6.69	6.17	4.83	4.01	2.79	1.30
Earningsper share(Note 4)	6.68	6.16	4.83	4.01	2.79	1.30

Note 1: 2016–2020 financial statements have been audited and certified by CPAs.

Note 2: The financial statements of 2021Q1 have been reviewed by the CPAs.

Note 3: It is calculated based on the outstanding weighted average number of shares.

Note 4: It is calculated based on number of shares after retroactive adjustment.

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6.1.4. Condensed Statement of Comprehensive Income - Parent Company Only

Unit: NT$ thousands

Year Item	Financial Summary for The Last Five Years (Note 1)	Financial Summary for The Last Five Years (Note 1)	Financial Summary for The Last Five Years (Note 1)	Financial Summary for The Last Five Years (Note 1)	Financial Summary for The Last Five Years (Note 1)	As of March 31, 2021 (Note 2)
	2016	2017	2018	2019	2020
Operatingrevenue	21,324,583	20,007,792	16,809,530	12,860,887	10,937,519	Not Applicable
Grossprofit	4,044,442	4,752,426	2,862,617	2,521,479	1,982,871
Profit from operations	3,179,234	3,958,066	2,140,740	1,871,034	1,315,135
Non-operatingincome(expenses)	(13,119)	(669,836)	490,139	173,005	146,157
Profit before income tax	3,166,115	3,288,230	2,630,879	2,044,039	1,461,292
Profit from continuingoperations	2,882,637	2,655,717	2,081,995	1,728,967	1,197,735
Loss from discontinued operations	-	-	-		-
Profit for theyear	2,882,637	2,655,717	2,081,995	1,728,967	1,197,735
Other comprehensive income (loss), net of taxes	(128,605)	100,214	(15,418)	(32,117)	12,175
Toal comprehensive income for theyear	2,754,032	2,755,931	2,066,577	1,696,850	1,209,910
Profit attributable to shareholders of theparent	2,882,637	2,655,717	2,081,995	1,728,967	1,197,735
Profit attributable to non- controllinginterest	-	-	-	-	-
Total Comprehensive income attributable to Shareholders of the parent	2,754,032	2,755,931	2,066,577	1,696,850	1,209,910
Total Comprehensive income attributable to non-controlling interest	-	-	-	-	-
Earningsper share(Note 3)	6.69	6.17	4.83	4.01	2.79
Earningsper share(Note 4)	6.68	6.16	4.83	4.01	2.79

Note 1: 2016–2020 financial statements have been audited and certified by CPAs. Note 2: Pursuant to Article 7 of the Regulations Governing the Preparation of Financial Reports by Securities Issuers (adopting the International Financial Reporting Standards), the Company is not required to prepare the parent company only financial statements of 2021 Q1; therefore, the Company provides no financial information for 2021 Q1.

Note 3: It is calculated based on the outstanding weighted average number of shares. Note 4: It is calculated based on number of shares after retroactive adjustment.

6.1.5. Auditors’ Opinions from 2016 to 2020

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Year CPA Firm CPA Audit Opinion
2016 Pricewaterhouse Coopers Lin Chun-Yao, Chou Chien-Hung Unqualified Opinion
2017 Pricewaterhouse Coopers Lin Chun-Yao, Chou Chien-Hung Unqualified Opinion
2018 Pricewaterhouse Coopers Lin Chun-Yao, Chou Chien-Hung Unqualified Opinion
2019 Pricewaterhouse Coopers Lin Chun-Yao, Chou Chien-Hung Unqualified Opinion
2020 Pricewaterhouse Coopers Lin Chun-Yao, Chen Chin-Chang Unqualified Opinion
----- End of picture text -----

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6.2. Financial Analysis for the Most Recent Five Years – Based on IFRS 6.2.1. Consolidated Financial Analysis

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

Financial Analysis for the Last Five Years (Note 2) As of
Year March 31,
Item 2021
2016 2017 2018 2019 2020
(Note 3)
Debt Ratio (%) 11.20 9.98 8.62 8.46 9.96 16.62
Financial
Ratio of long-term capital to
structure 750.73 764.85 777.66 807.96 828.10 813.87
property, plant and equipment (%)
Current ratio (%) 824.69 928.56 977.14 1026.37 795.28 450.54
Solvency Quick ratio (%) 225.19 338.95 261.44 432.06 313.12 195.05
Interest earned ratio (times) 1,297.31 11,154.47 - 1,121.51 738.18 1,780.04
Accounts receivable turnover
7.27 7.80 7.57 7.44 7.85 8.87
(times)
Average collection period 50 47 48 49 47 41
Inventory turnover (times) 3.54 2.96 3.34 3.96 3.41 3.23
Operating
performance Accounts payable turnover (times) 9.98 10.08 11.26 9.11 8.05 8.36
Average days in sales 103 123 109 92 107 113
Property, plant and equipment
7.71 7.70 6.64 5.36 4.85 6.21
turnover (times)
Total assets turnover (times) 0.94 0.92 0.79 0.63 0.55 0.66
Return on total assets (%) 12.29 11.63 9.33 8.04 5.72 10.61
Return on stockholders' equity (%) 14.12 13.01 10.29 8.78 6.29 12.24
Pre-tax Profit from
76.79 92.80 49.67 41.35 28.25 48.33
income to operations
Profitability
paid-in capital Profit before
75.29 76.90 61.60 48.51 35.02 61.70
(%) income tax
Profit ratio (%) 13.04 12.67 11.82 12.81 10.46 15.99
Earnings per share (NT$) (Note 1) 6.69 6.17 4.83 4.01 2.79 5.21
Cash flow ratio (%) 119.99 147.10 265.71 69.36 (13.52) 2.06
Cash flow Cash flow adequacy ratio (%) 85.75 93.80 86.36 84.50 65.18 61.77
Cash reinvestment ratio (%) (0.68) 2.11 9.62 (6.19) (12.99) 0.44
Operating leverage 1.46 1.36 1.61 1.69 1.98 1.60
Leverage
Financial leverage 1.00 1.00 1.00 1.00 1.00 1.00
Analysis of financial ratio differences for the last two years: (Not required if the difference does not exceed 20%)
1.Current ratio and quick ratio: Since the exemption from provisional income tax payment was applied in 2020,
the accrual income tax liabilities increased at the end of the period. Accordingly, the current ratio and quick ratio
decreased from last year.
2.Interest earned ratio: Since the gross profit decreased in 2020, the income before tax decreased correspondingly
such that the interest earned ratio was reduced.
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3.Profitability: Since the revenue and gross profit decreased in 2020, operating profit, profit before tax and net income after tax also decreased correspondingly. Accordingly, the profitability related financial ratios dropped from last year.

4.Cash flow: It was mainly due to the adjustment of the inventory to cope with the market condition in 2020, and the inventory level increased significantly, leading to net cash outflow from operating activities. Consequently, the cash flow related financial ratios dropped from last year.

Note 1: It was calculated based on the outstanding weighted average number of shares. Note 2: 2016–2020 financial statements have been audited and certified by CPAs.

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Note 3: The financial statements of 2021Q1 have been reviewed by the CPAs.

Financial Structure
(1) DebtrRatio=total liabilities/total assets
(2) Ratio of long-term capital to property, plant and equipment=(total shareholders’ equity ＋ non-current liabilities)/ net value of property, plant and equipment
Liquidity
(1) Current ratio=current assets/current liabilities

(2) Quick ratio=(current assets-inventory-pre-paid expense)/ current liabilities

(3) Interest earned ratio =earning before income tax and interest expense/interest expense of the term
Operating Performance
(1) Accoutns receivables(including accounts receivables and notes receivables due to business) turnover =Net sales/ average balance of accounts receivables(including accounts receivables and notes receivables due to business)
(2) Average collection period =365/ accounts receivables turnover
(3) Inventory turnover =Cost of goods sold/average inventory
(4) Accounts payable (including accounts payables and notes payables due to business) turnover =cost of goos sold/ average balance of accounts payables(including accounts payables and notes payables due to business)
(5) Average days in sales =365/ inventory turnover

(6) Property, plant and equipment turnover=net sales/average net value of property, plant and equipment

(7) Total assets turnover =net sales/average total assets

Profitability
(1) Return on Assets=[profit(loss) for the year+interest expense×(1-tax rate)]/average total assets

(2) Return on stockholders' equity = profit(loss) for the year /average total stockholders' equity

(3) Profit ratio= profit(loss) for the year /net sales
(4) Earnings per share=( Profit(loss) attributable to shareholders of the parent –preferred stock dividends)/ weighted average share outstanding
Cash Flow
(1) Cash flow ratio = Cash inflow generated from operations / current liabilities
(2) Cash flow adequacy ratio = Cash inflow generated from operations of the most recent five years / (capital expenditure+increased amount of inventory+cash dividends) of the most recent five years
(3) Cash reinvestment ratio =( Cash inflow generated from operations –cash dividends)/( gross value of property, plant and equipment +long-term investment+other assets+working capital)
Leverage

(1) Operating leverage=(net sales-variable business costs and expenses)/ Profit(loss) from operations

(2) Financial leverage= Profit from operations /( Profit from operations –interest expense)

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6.2.2. Parent Conpany Only Financial Analysis

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Financial Analysis for the Last Five Years (Note 2) As of
Year March 31,
Item 2021
2016 2017 2018 2019 2020
(Note 3)
Debt Ratio (%) 12.46 11.47 10.05 9.45 10.87
Financial
Ratio of long-term capital to
structure 1,241.00 1,198.86 1,178.54 1,193.28 1,222.92
property, plant and equipment (%)
Current ratio (%) 686.05 746.00 753.10 802.57 648.98
Solvency Quick ratio (%) 187.71 266.16 181.78 325.76 245.75
Interest earned ratio (times) 1,942.21 11,072.48 - 3,024.73 1,776.57
Accounts receivable turnover
7.20 7.24 7.44 7.67 8.50
(times)
Average collection period 51 50 49 48 43
Inventory turnover (times) 3.81 3.10 3.45 4.12 3.55
Operating Accounts payable turnover (times) 7.95 7.58 8.21 6.66 5.89
performance
Average days in sales 96 118 106 89 103
Property, plant and equipment
12.65 11.85 9.78 7.66 6.87
turnover (times) Not
Total assets turnover (times) 0.91 0.86 0.74 0.59 0.52 appicable
Return on total assets (%) 12.24 11.45 9.18 7.93 5.66
Return on stockholders' equity (%) 14.12 13.01 10.29 8.78 6.29
Pre-tax Profit from
73.80 91.89 49.70 43.44 30.65
income to operations
Profitability
paid-in capital Profit before
73.50 76.34 61.08 47.45 34.06
(%) income tax
Profit ratio (%) 13.52 13.27 12.39 13.44 10.95
Earnings per share (NT$) (Note 1) 6.69 6.17 4.83 4.01 2.79
Cash flow ratio (%) 96.65 117.59 218.43 47.98 (11.99)
Cash flow Cash flow adequacy ratio (%) 89.45 97.36 85.80 82.60 62.32
Cash reinvestment ratio (%) (1.53) 1.60 10.26 (7.42) (13.61)
Operating leverage 1.24 1.18 1.29 1.30 1.45
Leverage
Financial leverage 1.00 1.00 1.00 1.00 1.00
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Analysis of financial ratio differences for the last two years: (Not required if the difference does not exceed 20%) 1.Quick Ratio: Since the exemption from provisional income tax payment was applied in 2020, the accrual income tax liabilities increased at the end of the period. Accordingly,the quick ratio decreased from last year. 2.Interest earned ratio: Since the gross profit decreased in 2020, the income before tax decreased correspondingly, such that the interest earned ratio was reduced.

3.Profitability: Since the revenue and gross profit decreased in 2020, operating profit, profit before tax and net income after tax decreased correspondingly. Accordingly, the profitability related financial ratios dropped from last year. 4.Cash flow: It was mainly due to the adjustment of the inventory to cope with the market condition in 2020, and the inventory level increased significantly, leading to net cash outflow from operating activities. Consequently, the cash flow related financial ratios dropped from last year.

Note 1: It was calculated based on the outstanding weighted average number of shares.

Note 2: 2016–2020 financial statements have been audited and certified by CPAs.

Note 3: Pursuant to Article 7 of the Regulations Governing the Preparation of Financial Reports by Securities Issuers (adopting the International Financial Reporting Standards), the Company is not required to prepare the parent company only financial statements of 2021 Q1; therefore, the Company provides no financial

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information for 2021 Q1.

Financial Structure
(1) DebtrRatio=total liabilities/total assets
(2) Ratio of long-term capital to property, plant and equipment=(total shareholders’ equity ＋ non-current liabilities)/ net value of property, plant and equipment
Liquidity
(1) Current ratio=current assets/current liabilities
(2) Quick ratio=(current assets-inventory-pre-paid expense)/ current liabilities
(3) Interest earned ratio =earning before income tax and interest expense/interest expense of the term
Operating Performance
(1) Accoutns receivables(including accounts receivables and notes receivables due to business) turnover =Net sales/ average balance of accounts receivables(including accounts receivables and notes receivables due to business)
(2) Average collection period =365/ accounts receivables turnover
(3) Inventory turnover =Cost of goods sold/average inventory
(4) Accounts payable (including accounts payables and notes payables due to business) turnover =cost of goos sold/ average balance of accounts payables(including accounts payables and notes payables due to business)
(5) Average days in sales =365/ inventory turnover
(6) Property, plant and equipment turnover=net sales/average net value of property, plant and equipment
(7) Total assets turnover =net sales/average total assets
Profitability
(1) Return on Assets=[profit(loss) for the year+interest expense×(1-tax rate)]/average total assets
(2) Return on stockholders' equity = profit(loss) for the year /average total stockholders' equity
(3) Profit ratio= profit(loss) for the year /net sales
(4) Earnings per share=( Profit(loss) attributable to shareholders of the parent –preferred stock dividends)/ weighted average share outstanding
Cash Flow
(1) Cash flow ratio = Cash inflow generated from operations / current liabilities
(2) Cash flow adequacy ratio = Cash inflow generated from operations of the most recent five years / (capital expenditure+increased amount of inventory+cash dividends) of the most recent five years
(3) Cash reinvestment ratio =( Cash inflow generated from operations –cash dividends)/( gross value of property, plant and equipment +long-term investment+other assets+working capital)
Leverage

(1) Operating leverage=(net sales-variable business costs and expenses)/ Profit(loss) from operations

(2) Financial leverage= Profit from operations /( Profit from operations –interest expense)

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6.3. Audit Committee’s Review Report for the Most Recent Year

Audit Committee’s Review Report

The Board of Directors has prepared the Company’s 2020 Business Report, Financial Statements and Earnings Distribution Proposal. Transcend Corporation’s Financial Statements have been audited and certified by Mr. Chun-Yao Lin and Mr. Chin-Chang Chen, the CPA of the Pricewaterhouse Coopers. The Business Report, Financial Statements and Earnings Distribution Proposal have been reviewed and considered to be complied with relevant rules by the undersigned, the audit committee of Transcend Corporation. Pursuant to Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act, we hereby submit this report.

The Audit Committee of Transcend Information, Inc.

Chairman of the Audit Committee: WANG, YI-HSIN

March 04, 2021

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6.4. Consolidated Financial Statements for the Years Ended December 31, 2020 and 2019, and Independent Auditors’ Report

TRANSCEND INFORMATION, INC. AND SUBSIDIARIES REPRESENTATION LETTER

The entities that are required to be included in the combined financial statements of Transcend Information, Inc. as of and for the year ended December 31, 2020, under the Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises are the same as those included in the consolidated financial statements prepared in conformity with the International Financial Reporting Standard 10, “Consolidated Financial Statements.” In addition, the information required to be disclosed in the combined financial statements is included in the consolidated financial statements. Consequently, Transcend Information, Inc. and Subsidiaries do not prepare a separate set of combined financial statements.

Very truly yours,

TRANSCEND INFORMATION, INC. Chairman: SHU, CHUNG-WON

March 4, 2021

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INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

PWCR20000143

To the Board of Directors and Shareholders of Transcend Information, Inc.

Opinion

We have audited the accompanying consolidated balance sheets of Transcend Information, Inc. and its subsidiaries (the “Group”) as at December 31, 2020 and 2019, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

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

Basis for opinion

We conducted our audit of the consolidated financial statements as at and for the year ended December 31, 2020 in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and generally accepted auditing standards in the Republic of China; and in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants, Rule No. Financial-Supervisory-Securities-Auditing-1090360805 issued by the Financial Supervisory Commission on February 25, 2020 and generally accepted auditing standards in the Republic of China for our audit of the consolidated financial statements as at and for the year ended December 31, 2019. Our responsibilities under those standards are further described in the Auditors’ responsibilities for the audit of the consolidated financial statements section of our report. We are independent of the Group in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

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Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the Group’s 2020 consolidated financial statements. These matters were addressed in the context of our audit of the consolidated financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

Key audit matters for the Group’s 2020 consolidated financial statements are stated as follows:

Evaluation of inventories

Description

Refer to Notes 4(13), 5(2) and 6(5) to the consolidated financial statements for the information on the Group’s inventory accounting policy, estimates and assumptions and allowance for inventory valuation losses.

The percentage of the Group’s inventories to total assets is material and the Group applies judgements and estimates in determining the net realizable value of inventories at the balance sheet date. The Group mainly produces DRAM and flash memory. As these products have a short life cycle and belong to a highly competitive industry, the market prices change frequently. Since the Group’s inventories and the allowance for inventory valuation losses are material to the financial statements, the evaluation of inventories has been identified as a key audit matter.

How our audit addressed the matter

We performed the following audit procedures in respect of the above key audit matter:

A. Obtained an understanding of the Group’s operations and industry. Assessed the reasonableness of the policy and procedures to recognize allowance for inventory valuation losses.
B. Obtained an understanding of the Group’s inventory control procedures. Reviewed annual inventory count plan and observed the annual physical count of inventory in order to assess the effectiveness of internal controls over inventory.
C. Obtained relevant evaluation reports of inventory and tested the logic and accuracy of information to assess the reasonableness of allowance for inventory valuation losses.

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Estimation of allowance for sales discount

Description

In consideration of business volume, the Group provides a variety of business incentives to specific customers or products, and based on that, the Group can estimate the allowance for sales discount monthly. Refer to Notes 4(24) and 6(4) to the consolidated financial statements for the information on the estimation of allowance for sales discount.

Since the contracts are numerous and the result could affect the net revenue in the consolidated financial statements, the estimation of allowance for sales discount has been identified as a key audit matter.

How our audit addressed the matter

We performed the following audit procedures in respect of the above key audit matter:

A. Obtained an understanding of the Group’s operations, industry and the procedures to recognize allowance for sales discount.
B. Obtained an understanding of the Group’s sales procedures and interviewed management to assess the appropriateness of sales allowance contracts and internal control over estimation of allowance.
C. Obtained the evaluation list of allowance for sales discount, and tested material sales allowance contracts and recalculated it to assess the reasonableness of allowance determined by the Group.

Other matter –Parent company only financial reports

We have audited and expressed an unqualified opinion on the parent company only financial statements of Transcend Information, Inc. as at and for the years ended December 31, 2020 and 2019.

Responsibilities of management and those charged with governance for the consolidated financial statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group’s

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using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including the audit committee, are responsible for overseeing the Group’s financial reporting process.

Auditors’ responsibilities for the audit of the consolidated financial statements

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

As part of an audit in accordance with the generally accepted auditing standards in the Republic of China, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:

A. Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
B. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
C. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
D. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.

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E. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
F. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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

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

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

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For and on behalf of PricewaterhouseCoopers, Taiwan

March 4, 2021

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

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

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TRANSCEND INFORMATION, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan Dollars)

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December 31, 2020 December 31, 2019
Assets Notes AMOUNT % AMOUNT %
Current assets
Cash and cash equivalents 6(1) $ 736,852 4 $ 1,233,407 6
Financial assets at fair value through profit or 6(2)
loss - current 3,510,998 17 2,581,509 12
Current financial assets at amortised cost, net 6(3) 5,659,889 27 7,910,482 37
Notes receivable, net 6(4) 759 - 3,054 -
Accounts receivable, net 6(4) 1,434,454 7 1,478,531 7
Accounts receivable due from related parties, 7
net - - 8 -
Other receivables 71,351 - 124,077 1
Inventories, net 6(5) 3,190,466 15 2,062,659 10
Other current assets 10,495 - 17,973 -
Total Current Assets 14,615,264 70 15,411,700 73
Non-current assets
Non-current financial assets at fair value 6(2)
through profit or loss 744,922 4 - -
Non-current financial assets at fair value 6(6)
through other comprehensive income 111,000 1 114,164 1
Non-current financial assets at amortised cost 6(3) - - 148,527 1
- -
Investments accounted for using equity method 6(7) 95,724 97,434
Property, plant and equipment, net 6(8) and 8 2,282,324 11 2,438,154 12
Right-of-use assets 6(9) and 7 187,079 1 241,050 1
Investment property, net 6(11) 2,612,426 13 2,610,292 12
Deferred tax assets 6(23) 41,472 - 75,859 -
Other non-current assets 6(12) 47,411 - 63,610 -
Total Non-current Assets 6,122,358 30 5,789,090 27
Total Assets $ 20,737,622 100 $ 21,200,790 100
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(Continued)

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TRANSCEND INFORMATION, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan Dollars)

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December 31, 2020 December 31, 2019
Liabilities and Equity Notes AMOUNT % AMOUNT %
Current liabilities
Accounts payable $ 1,134,266 6 $ 1,005,350 5
Accounts payable - related parties 7 37,416 - 52,828 -
Other payables 246,635 1 267,116 1
Current tax liabilities 295,381 2 83,705 1
Current lease liabilities 7 51,010 - 53,945 -
Other current liabilities 73,046 - 38,635 -
Total Current Liabilities 1,837,754 9 1,501,579 7
Non-current liabilities
Deferred tax liabilities 6(23) 139,700 1 155,482 1
Non-current lease liabilities 7 34,705 - 83,697 -
Other non-current liabilities 6(13) 53,437 - 53,184 -
Total Non-current Liabilities 227,842 1 292,363 1
Total Liabilities 2,065,596 10 1,793,942 8
Equity attributable to owners of parent
Share capital 6(14)
Common stock 4,290,617 21 4,307,617 21
Capital surplus 6(15)
Capital surplus 3,945,369 19 4,346,854 20
Retained earnings 6(16)
Legal reserve 4,683,878 22 4,510,981 21
Special reserve 130,902 1 61,572 -
Unappropriated retained earnings 5,738,504 28 6,427,300 30
Other equity interest 6(17)
-
Other equity interest ( 117,244) ( 1) ( 130,902)
- - -
Treasury shares 6(14) ( 116,574)
Total Equity 18,672,026 90 19,406,848 92
Significant contingent liabilities and 9
unrecognized contract commitments
Significant events after the balance sheet date 11
Total Liabilities and Equity $ 20,737,622 100 $ 21,200,790 100
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The accompanying notes are an integral part of these consolidated financial statements.

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TRANSCEND INFORMATION, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan Dollars, except for earnings per share amount)

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Year ended December 31
2020 2019
Items Notes AMOUNT % AMOUNT %
Operating Revenue 6(18) and 7 $ 11,446,696 100 $ 13,496,186 100
Operating Costs 6(5)(22) and 7 ( 8,976,600) ( 78) ( 10,408,655) ( 77)
Gross Profit 2,470,096 22 3,087,531 23
Operating Expenses 6(22)
Sales and marketing expenses ( 692,592) ( 6) ( 770,784) ( 6)
Administrative expenses ( 431,320) ( 4) ( 395,057) ( 3)
Research and development expenses ( 133,355) ( 1) ( 142,601) ( 1)
(Impairment loss) reversal of impairment loss 6(4)
determined in accordance with IFRS 9 ( 893) - 1,921 -
Total operating expenses ( 1,258,160) ( 11) ( 1,306,521) ( 10)
Operating Profit 1,211,936 11 1,781,010 13
Non-operating Income and Expenses
Interest income 6(19) 73,952 1 191,612 2
Other income 6(20) 38,721 - 39,490 -
Other gains and losses 6(21) 163,899 1 67,311 1
Net gain from derecognizing financial assets 6(3)
measured at amortised cost 17,210 - 20,552 -
Finance costs 6(9) ( 2,038) - ( 1,865) -
Share of loss of associates and joint ventures 6(7)
- -
accounted for using the equity method ( 1,299) ( 8,367)
Total non-operating income and expenses 290,445 2 308,733 3
Profit before Income Tax 1,502,381 13 2,089,743 16
Income tax expense 6(23) ( 304,646) ( 2) ( 360,776) ( 3)
Profit for the Year $ 1,197,735 11 $ 1,728,967 13
Other Comprehensive Income (Loss)
Components of other comprehensive
income (loss) that will not be reclassified to
profit or loss
(Losses) gains on remeasurements of defined 6(13)
benefit plans ($ 1,072) - $ 724 -
Unrealized (loss) gain on financial assets at 6(6)(17)
fair value through other comprehensive
income ( 3,164) - 27,976 -
Share of other comprehensive (loss) income of
associates and joint ventures accounted for
using the equity method ( 411) - 479 -
Components of other comprehensive
income (loss) that will be reclassified to
profit or loss
Exchange differences on translation of foreign 6(17)
financial statements 21,027 - ( 76,620) -
Income tax related to components of other 6(17)(23)
comprehensive income that will be
- -
reclassified to profit or loss ( 4,205) 15,324
Other comprehensive income (loss) for the
year $ 12,175 - ($ 32,117) -
Total Comprehensive Income $ 1,209,910 11 $ 1,696,850 13
Net profit attributable to:
Owners of parent $ 1,197,735 11 $ 1,728,967 13
Comprehensive income attributable to:
Owners of parent $ 1,209,910 11 $ 1,696,850 13
Earnings Per Share (in dollars) 6(24)
Basic earnings per share $ 2.79 $ 4.01
Diluted earnings per share $ 2.79 $ 4.01
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The accompanying notes are an integral part of these consolidated financial statements.

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TRANSCEND INFORMATION, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan Dollars)

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Equity attributable to owners of the parent
Capital Reserves Retained Earnings Other Equity Interest
Unrealized gain or
loss on financial
Exchange differences assets at fair value
on translation of through other
Additional paid-in Donated assets Net assets from Unappropriated foreign financial comprehensive
Notes Common stock capital received merger Legal reserve Special reserve retained earnings statements income Treasury shares Total equity
Year ended December 31, 2019
Balance at January 1, 2019 $ 4,307,617 $ 4,565,999 $ 4,106 $ 35,128 $ 4,302,782 $ 47,247 $ 6,778,995 ($ 77,165 ) $ 15,593 $ - $ 19,980,302
Net income for the year - - - - - - 1,728,967 - - - 1,728,967
Other comprehensive income (loss) 6(6)(17) - - - - - - 1,203 ( 61,296 ) 27,976 - ( 32,117 )
Total comprehensive income (loss) - - - - - - 1,730,170 ( 61,296 ) 27,976 - 1,696,850
Appropriation and distribution of 2018 6(16)
earnings
Legal reserve - - - - 208,199 - ( 208,199 ) - - - -
Cash dividends - - - - - - ( 1,895,351 ) - - - ( 1,895,351 )
Special reserve - - - - - 14,325 ( 14,325 ) - - - -
Cash payment from capital surplus 6(16) - ( 258,458 ) - - - - - - - - ( 258,458 )
Net gain on disposal of financial assets at fair
value through other comprehensive income - - - - - - 36,010 - ( 36,010 ) - -
Expired unclaimed dividends recognized as
capital surplus - - 79 - - - - - - - 79
Purchase of treasury stock - - - - - - - - - ( 116,574 ) ( 116,574 )
Balance at December 31, 2019 $ 4,307,617 $ 4,307,541 $ 4,185 $ 35,128 $ 4,510,981 $ 61,572 $ 6,427,300 ($ 138,461 ) $ 7,559 ($ 116,574 ) $ 19,406,848
Year ended December 31, 2020
Balance at January 1, 2020 $ 4,307,617 $ 4,307,541 $ 4,185 $ 35,128 $ 4,510,981 $ 61,572 $ 6,427,300 ($ 138,461 ) $ 7,559 ($ 116,574 ) $ 19,406,848
Net income for the year - - - - - - 1,197,735 - - - 1,197,735
Other comprehensive income (loss) 6(6)(17) - - - - - - ( 1,483 ) 16,822 ( 3,164 ) - 12,175
Total comprehensive income (loss) - - - - - - 1,196,252 16,822 ( 3,164 ) - 1,209,910
Appropriation and distribution of 2019 6(16)
earnings
Legal reserve - - - - 172,897 - ( 172,897 ) - - - -
Cash dividends - - - - - - ( 1,544,622 ) - - - ( 1,544,622 )
Special reserve - - - - - 69,330 ( 69,330 ) - - - -
Cash payment from capital surplus 6(16) - ( 386,156 ) - - - - - - - - ( 386,156 )
Expired unclaimed dividends recognized as
capital surplus - - 93 - - - - - - - 93
Purchase of treasury stock 6(14) - - - - - - - - - ( 14,047 ) ( 14,047 )
Cancellation of treasury stock ( 17,000 ) ( 15,422 ) - - - - ( 98,199 ) - - 130,621 -
Balance at December 31, 2020 $ 4,290,617 $ 3,905,963 $ 4,278 $ 35,128 $ 4,683,878 $ 130,902 $ 5,738,504 ($ 121,639 ) $ 4,395 $ - $ 18,672,026
----- End of picture text -----

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

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TRANSCEND INFORMATION, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax
Adjustments
Adjustments to reconcile profit (loss)
Net (gain) loss on financial assets at fair value through profit
or loss
Share of loss of associates and joint ventures accounted for
using the equity method
Expected credit loss/ (Gain on reversal of expected credit loss)
Loss on disposal of property, plant and equipment
Depreciation
Interest income
Interest expense
Dividend income
Changes in operating assets and liabilities
Changes in operating assets
Financial assets mandatorily measured at fair value through
profit or loss
Notes receivable
Accounts receivable
Accounts receivable - related parties
Other receivables
Inventories
Other current assets
Changes in operating liabilities
Accounts payable
Accounts payable - related parties
Other payables
Other current liabilities
Other non-current liabilities
Cash (outflow) inflow generated from operations
Dividends received
Interest received
Income tax paid
Net cash flows (used in) from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of non-current financial assets at fair value through
profit or loss
Proceeds from disposal of financial assets at amortised cost
Acquisition of financial assets at amortised cost
Proceeds from disposal of financial assets at fair value through
other comprehensive income
Proceeds from disposal of property, plant and equipment
Acquisition of property, plant and equipment
Acquisition of investment property
Decrease in other non-current financial assets
Net cash flows from investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Cash dividends paid (including cash payment from capital
surplus )
Repayment of lease liabilities
Expired unclaimed dividends recognized as capital surplus
Purchase of treasury stock
Net cash flows used in financing activities
Effect of exchange rate changes
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

Year ended December 31
Notes
2020
2019
$ 1,502,381
$ 2,089,743
6(2)(21)
(
147,742 )
5,604
6(7)
1,299
8,367
6(4)
893
(
1,921 )
6(21)
2,098
(
123 )
6(22)
257,272
262,471
6(19)
(
73,952 )
(
191,612 )
6(9)
2,038
1,865
6(6)(21)
(
3,834 )
(
5,019 )
(
916,025 )
(
2,500,633 )
2,295
(
2,182 )
43,310
670,788
8
(
8 )
43,684
(
52,573 )
(
1,127,807 )
1,121,529
7,478
4,240
128,916
(
181,950 )
(
15,412 )
12,954
(
20,481 )
1,887
57,735
(
8,065 )
(
819 )
(
1,384 )
(
256,665 )
1,233,978
3,834
5,019
82,994
207,403
(
78,570 )
(
404,962 )
(
248,407 )
1,041,438
(
611,063 )
-
6,287,094
6,457,566
(
3,884,624 )
(
5,380,646 )
6(6)
-
76,967
-
2,460
6(8)
(
29,700 )
(
67,992 )
(
1,082 )
-
3,783
9,967
1,764,408
1,098,322
6(16)
(
1,930,778 )
(
2,153,809 )
(
54,459 )
(
60,032 )
93
79
(
37,371 )
(
93,250 )
(
2,022,515 )
(
2,307,012 )
9,959
(
29,078 )
(
496,555 )
(
196,330 )
1,233,407
1,429,737
$ 736,852
$ 1,233,407

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

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TRANSCEND INFORMATION, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2020 AND 2019

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

1. HISTORY AND ORGANIZATION

Transcend Information, Inc. (the “Company”) was incorporated under the provisions of the Company Law of the Republic of China (R.O.C.) in August 1989. The main activities of the Company and its subsidiaries (collectively referred herein as the “Group”) are manufacturing, processing and sales of computer software and hardware, peripheral equipment and other computer components. The Securities and Futures Commission of the Republic of China had approved the Company’s shares to be listed on the Taiwan Stock Exchange and the shares started trading on May 3, 2001.

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

These consolidated financial statements were authorized for issuance by the Board of Directors on March 4, 2021.

APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

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

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

	New Standards,InterpretationsandAmendments Amendments to IAS 1 and IAS 8, ‘Disclosure initiative-definition of material’ Amendments to IFRS 3, ‘Definition of a business’ Amendments to IFRS 9, IAS 39 and IFRS 7, ‘Interest rate benchmark reform’ Amendments to IFRS 16, ‘Covid-19-related rent concessions’	Effective date by International Accounting StandardsBoard
		January 1, 2020 January 1, 2020 January 1, 2020 June 1, 2020 (Note)

Note: Earlier application from January 1, 2020 is allowed by the FSC.

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

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

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

	New Standards,InterpretationsandAmendments Amendments to IFRS 4, ‘Extension of the temporary exemption from applying IFRS 9’ Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16, ‘Interest Rate Benchmark Reform— Phase 2’	Effective date by International Accounting StandardsBoard
		January 1, 2021 January 1, 2021

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

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

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

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

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

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4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

(1) Compliance statement

The consolidated financial statements of the Group have been prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”, International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the “IFRSs”).

(2) Basis of preparation

A. Except for the following items, the consolidated financial statements have been prepared under the historical cost convention:
(a) Financial assets at fair value through profit or loss.
(b) Financial assets at fair value through other comprehensive income.
(c) Defined benefit liabilities recognized based on the net amount of pension fund assets less present value of defined benefit obligations.
B. The preparation of financial statements in conformity with requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.

(3) Basis of consolidation

A. Basis for preparation of consolidated financial statements:
(a) All subsidiaries are included in the Group’s consolidated financial statements. Subsidiaries are all entities (including structured entities) controlled by the Group. The Group controls an entity when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Consolidation of subsidiaries begins from the date the Group obtains control of the subsidiaries and ceases when the Group loses control of the subsidiaries.
(b) Inter-company transactions, balances and unrealized gains or losses on transactions between companies within the Group are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.

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(c) Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to the owners of the parent and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.
(d) Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity.
(e) When the Group loses control of a subsidiary, the Group remeasures any investment retained in the former subsidiary at its fair value. That fair value is regarded as the fair value on initial recognition of a financial asset or the cost on initial recognition of the associate or joint venture. Any difference between fair value and carrying amount is recognized in profit or loss. All amounts previously recognized in other comprehensive income in relation to the subsidiary are reclassified to profit or loss on the same basis as would be required if the related assets or liabilities were disposed of. That is, when the Group loses control of a subsidiary, all gains or losses previously recognized in other comprehensive income in relation to the subsidiary should be reclassified from equity to profit or loss, if such gains or losses would be reclassified to profit or loss when the related assets or liabilities are disposed of.
B. Subsidiaries included in the consolidated financial statements:

Name of Name of Investor Subsidiary Transcend Taiwan Saffire Investment Ltd. (Saffire) 〞 Transcend Japan Inc. (Transcend Japan) 〞 Transcend Information Inc. (Transcend USA) 〞 Transcend Korea Inc. (Transcend Korea)	Main Business Activities Investment holding company Wholesale and import of computer memory modules and peripheral products Wholesale and import of computer memory modules and peripheral products Wholesale and import of computer memory modules and peripheral products	December December 31,2020 31,2019 Description 100 100 100 100 100 100 100 100 Ownership (%)
		December 31,2020 100 100 100 100

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Name of Name of Investor Subsidiary Saffire Investment Ltd. Memhiro Pte. Ltd. (Memhiro) Memhiro Pte. Ltd. Transcend Information Europe B.V. (Transcend Europe) 〞 Transcend Information Trading GmbH, Hamburg (Transcend Germany) 〞 Transcend Information (Shanghai), Ltd. (Transcend Shanghai) 〞 Transtech Trading (Shanghai) Co., Ltd. (Transtech Shanghai) 〞 Transcend Information (Hong Kong), Ltd. (Transcend Hong Kong)	Main Business Activities Investment holding company Wholesale and import of computer memory modules and peripheral products Wholesale and import of computer memory modules and peripheral products Manufacture and sales of computer memory modules, storage products and disks Wholesale, agent, import and export and retail of computer memory modules, storage products and computer components Wholesale and import of computer memory modules and peripheral products	December December 31,2020 31,2019 Description Ownership (%) 100 100 100 100 100 100 100 100 100 100 100 100
		December 31,2020 100 100 100 100 100 100

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

(4) Foreign currency translation

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The consolidated financial statements are presented in New Taiwan dollars, which is the Company’s functional and the Group’s presentation currency.

~123~

A. Foreign currency transactions and balances
(a) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognized in profit or loss in the period in which they arise.
(b) Monetary assets and liabilities denominated in foreign currencies at the period end are retranslated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognized in profit or loss.
(c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in other comprehensive income. However, nonmonetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.
(d) All other foreign exchange gains and losses based on the nature of those transactions are presented in the statement of comprehensive income within‘other gains and losses’.
B. Translation of foreign operations

The operating results and financial position of all the group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

(a) Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;
(b) Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and

(5) Classification of current and non-current items

A. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:
(a) Assets arising from operating activities that are expected to be realized, or are intended to be sold or consumed within the normal operating cycle;
(b) Assets held mainly for trading purposes;
(c) Assets that are expected to be realized within twelve months from the balance sheet date;
(d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to settle liabilities more than twelve months after the balance sheet date.
B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:
(a) Liabilities that are expected to be settled within the normal operating cycle;
(b) Liabilities arising mainly from trading activities;
(c) Liabilities that are to be settled within twelve months from the balance sheet date;

~124~

(d) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

(6) Cash equivalents

Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

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

A. Financial assets at fair value through profit or loss are financial assets that are not measured at amortised cost or fair value through other comprehensive income.
B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognized and derecognized using trade date accounting.
C. At initial recognition, the Group measures the financial liabilities at fair value. All related transaction costs are recognized in profit or loss. The Group subsequently measures these financial liabilities at fair value with any gain or loss recognized in profit or loss.

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

A. Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Group has made an irrevocable election at initial recognition to recognize changes in fair value in other comprehensive income.
B. On a regular way purchase or sale basis, financial assets at fair value through other comprehensive income are recognized and derecognized using trade date accounting. (Irrevocable election is separately classified, and needs to be disclosed when there is various election).
C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs. The Group subsequently measures the financial assets at fair value:

The changes in fair value of equity investments that were recognized in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the derecognition of the investment. Dividends are recognized as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.

(9) Financial assets at amortised cost

A. Financial assets at amortised cost are those that meet all of the following criteria:
(a) The objective of the Group’s business model is achieved by collecting contractual cash flows.
(b) The assets’ contractual cash flows represent solely payments of principal and interest.
B. On a regular way purchase or sale basis, financial assets at amortised cost are recognized and derecognized using trade date accounting.
C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs. Interest income from these financial assets is included in finance income using the effective interest method. A gain or loss is recognized in profit or loss when the asset is derecognized or impaired.

~125~

(10) Accounts and notes receivable

A. Accounts and notes receivable entitle the Group a legal right to receive consideration in exchange for transferred goods or rendered services.
B. The short-term accounts and notes receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(11) Financial assets impairment

For debt instruments measured at fair value through other comprehensive income and financial assets at amortised cost including accounts receivable that have a significant financing component, at each reporting date, the Group recognizes the impairment provision for 12 months expected credit losses if there has not been a significant increase in credit risk since initial recognition or recognizes the impairment provision for the lifetime expected credit losses (ECLs) if such credit risk has increased since initial recognition after taking into consideration all reasonable and verifiable information that includes forecasts. On the other hand, for accounts receivable or contract assets that do not contain a significant financing component, the Group recognizes the impairment provision for lifetime ECLs.

(12) Derecognition of financial assets

The Group derecognizes a financial asset when the contractual rights to receive the cash flows from the financial asset expire.

(13) Inventories

Inventories are stated at the lower of cost and net realizable value. Cost is determined using the weighted-average method. The cost of finished goods and work in progress comprises raw materials, direct labour, other direct costs and related production overheads (allocated based on actual operating capacity). It excludes borrowing costs. The item by item approach is used in applying the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and applicable variable selling expenses.

(14) Investments accounted for using equity method / associates

A. Associates are all entities over which the Group has significant influence but not control. In general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly 20 percent or more of the voting power of the investee. Investments in associates are accounted for using the equity method and are initially recognized at cost.
B. The Group’s share of its associates’ post-acquisition profits or losses is recognized in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.
C. When changes in an associate’s equity do not arise from profit or loss or other comprehensive income of the associate and such changes do not affect the Group’s ownership percentage of the associate, the Group recognizes change in ownership interests in the associate in ‘capital surplus’ in proportion to its ownership.

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D. Unrealized gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been adjusted where necessary to ensure consistency with the policies adopted by the Group.
E. In the case that an associate issues new shares and the Group does not subscribe or acquire new shares proportionately, which results in a change in the Group’s ownership percentage of the associate but maintains significant influence on the associate, then ‘capital surplus’ and ‘investments accounted for under the equity method’ shall be adjusted for the increase or decrease of its share of equity interest. If the above condition causes a decrease in the Group’s ownership percentage of the associate, in addition to the above adjustment, the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately on the same basis as would be required if the relevant assets or liabilities were disposed of.
F. When the Group disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognized in other comprehensive income in relation to the associate, are reclassified to profit or loss, on the same basis as would be required if the relevant assets or liabilities were disposed of. If it retains significant influence over this associate, the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately in accordance with the aforementioned approach.

(15) Property, plant and equipment

A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalized.
B. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.
C. Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.
D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change. The estimated useful lives of property, plant and equipment are as follows:

~127~

Buildings and structures	8 ~ 50 years
Machinery and equipment	2 ~ 10 years
Transportation equipment	3 ~ 5 years
Office equipment and others	2 ~ 5 years

(16) Leasing arrangements (lessee) - right-of-use assets/ lease liabilities

A. Leases are recognized as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Group. For short-term leases or leases of low-value assets, lease payments are recognized as an expense on a straight-line basis over the lease term.
B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. Lease payments are comprised of the following:
(a) Fixed payments, less any lease incentives receivable; and
(b) Variable lease payments that depend on an index or a rate.

The Group subsequently measures the lease liability at amortized cost using the interest method and recognizes interest expense over the lease term. The lease liability is remeasured and the amount of remeasurement is recognized as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.

C. At the commencement date, the right-of-use asset is stated at cost comprising the amount of the initial measurement of lease liability.

The right-of-use asset is measured subsequently using the cost model and is depreciated from the commencement date to the earlier of the end of the asset’s useful life or the end of the lease term. When the lease liability is remeasured, the amount of remeasurement is recognized as an adjustment to the right-of-use asset.

(17) Investment property

An investment property is stated initially at its cost and measured subsequently using the cost model. Except for land, investment property is depreciated on a straight-line basis over its estimated useful life of 10 ~ 55 years.

(18) Impairment of non-financial assets

The Group assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. When the circumstances or reasons for recognizing impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortised historical cost would have been if the impairment had not been recognized.

~128~

(19) Notes and accounts payable

Notes and accounts payable are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. They are recognized initially at fair value and subsequently measured at amortised cost using the effective interest method. However, short-term accounts payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(20) Employee benefits

A. Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognized as expense in that period when the employees render service.

B. Pensions
(a) Defined contribution plans

For defined contribution plans, the contributions are recognized as pension expenses when they are due on an accrual basis. Prepaid contributions are recognized as an asset to the extent of a cash refund or a reduction in the future payments.

(b) Defined benefit plans
- i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Group in current period or prior periods. The liability recognized in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of government bonds (at the balance sheet date) of a currency and term consistent with the currency and term of the employment benefit obligations.
- ii. Remeasurements arising on defined benefit plans are recognized in other comprehensive income in the period in which they arise and are recorded as retained earnings.
- iii. Past service costs are recognized immediately in profit or loss.
C. Employees’ compensation and directors’ and supervisors’ remuneration

Employees’ compensation and directors’ and supervisors’ remuneration are recognized as expense and liability, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates.

(21) Income tax

A. The tax expense for the period comprises current and deferred tax. Tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or items recognized directly in equity, in which cases the tax is recognized in other comprehensive income or equity.

~129~

B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.
C. Deferred tax is recognized, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated balance sheet. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realized or the deferred tax liability is settled.
D. Deferred tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. At each balance sheet date, unrecognized and recognized deferred tax assets are reassessed.
E. Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. Deferred tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realize the asset and settle the liability simultaneously.
F. A deferred tax asset shall be recognized for the carryforward of unused tax credits resulting from acquisitions of equipment or technology and research and development expenditures to the extent that it is possible that future taxable profit will be available against which the unused tax credits can be utilized.

(22) Share capital

A. Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or stock options are shown in equity as a deduction, net of tax, from the proceeds.
B. Where the Company repurchases the Company’s shares that have been issued, the consideration paid, excluding any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the Company’s equity holders.

(23) Dividends

Dividends are recorded in the Company’s financial statements in the period in which they are resolved by the Company’s shareholders. Cash dividends are recorded as liabilities; stock dividends are recorded as stock dividends to be distributed and are reclassified to ordinary shares on the effective date of new shares issuance.

~130~

(24) Revenue recognition

A. Sales of goods

(a) The Group manufactures and sells computer software and hardware, computer peripheral equipment, and computer component products. When the right of control is transferred to the customer, sales revenue is recognized. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, or the Group has objective evidence that all criteria for acceptance have been satisfied.
(b) Sales revenue is recognized based on contract price, net of sales returns, volume discounts and estimated sales discounts. The goods are often sold with volume discounts based on aggregate sales over a one-month period. Sales discounts and allowances are estimated and provided for based on customer contracts, and revenue is only recognized to the extent that it is highly probable that a significant reversal will not occur. The estimation is subject to an assessment at each reporting date and recognized as allowance for sales discounts. No element of financing is deemed present as the sales are made with a credit term of 30-60 days after monthly billing, which is consistent with market practice.
(c) A receivable is recognized when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.
B. Incremental costs of obtaining a contract

Given that the contractual period lasts less than one year, the Group recognizes the incremental costs of obtaining a contract as an expense when incurred although the Group expects to recover those costs.

(25) Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision-Maker. The Group’s Chief Operating Decision-Maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Chairmen of the Board of Directors that makes strategic decisions.

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

The preparation of these consolidated financial statements requires management to make critical judgements in applying the Group’s accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. Such assumptions and estimates have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year; and the related information is addressed below:

~131~

(1) Critical judgements in applying the Group’s accounting policies

Investment property

The Group uses a portion of the property for its own use and another portion to earn rentals or for capital appreciation. When these portions cannot be sold separately and cannot be leased out separately under a finance lease, the property is classified as investment property only if the own use portion accounts for an insignificant portion of the property.

(2) Critical accounting estimates and assumptions

Evaluation of inventories

As inventories are stated at the lower of cost and net realizable value, the Group must determine the net realizable value of inventories on balance sheet date using judgements and estimates. Due to the rapid technology innovation, the Group evaluates the amounts of normal inventory consumption, obsolete inventories or inventories without market selling value on balance sheet date, and writes down the cost of inventories to the net realizable value. The valuation of inventories is based on recent market price and demand of products in the future specific period, thus there might be significant changes in the valuation. As of December 31, 2020, the carrying amount of inventories is $3,190,466.

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

A. The Group transacts with a variety of financial institutions all with high credit quality to di 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. Financial assets at fair value through profit or loss December31,2020 December31,2019 Cash on hand and petty cash 844 $ 699 $ Checking accounts and demand deposits 736,008 1,232,708 736,852 $ 1,233,407 $ Items December31,2020 December31,2019 Current items: Financial assets mandatorily measured at fair value through profit or loss Beneficiary certificates 3,501,229 $ 2,499,764 $ Financial products - 73,061 Valuation adjustments 9,769 8,684 3,510,998 $ 2,581,509 $ Non-current items: Financial assets mandatorily measured at fair value through profit or loss Beneficiary certificates 611,063 $ - $ Valuation adjustments 133,859 - 744,922 $ - $	A. The Group transacts with a variety of financial institutions all with high credit quality to di 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. Financial assets at fair value through profit or loss December31,2020 December31,2019 Cash on hand and petty cash 844 $ 699 $ Checking accounts and demand deposits 736,008 1,232,708 736,852 $ 1,233,407 $ Items December31,2020 December31,2019 Current items: Financial assets mandatorily measured at fair value through profit or loss Beneficiary certificates 3,501,229 $ 2,499,764 $ Financial products - 73,061 Valuation adjustments 9,769 8,684 3,510,998 $ 2,581,509 $ Non-current items: Financial assets mandatorily measured at fair value through profit or loss Beneficiary certificates 611,063 $ - $ Valuation adjustments 133,859 - 744,922 $ - $
Items Current items: Financial assets mandatorily measured at fair value through profit or loss Beneficiary certificates Financial products Valuation adjustments Non-current items: Financial assets mandatorily measured at fair value through profit or loss Beneficiary certificates Valuation adjustments
	2,499,764 $ 73,061 8,684
	2,581,509 $
	- $ -
	- $

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

~132~

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

Financial assets mandatorily measured at fair value through profit or loss Beneficiary certificates Financial products Non-hedging derivatives	2020 2019 145,108 $ 6,426 $ 859 4,046 1,775 16,076) ( 147,742 $ 5,604) ($ Years endedDecember31,

B. The Group has no financial assets at fair value through profit or loss pledged to others.

(3) Financial assets at amortised cost

	Items Current items: Time deposits with original maturity of more than three months Bonds with repurchase agreement Non-current items: Foreign currency bonds	December31,2020 5,659,889 $ - 5,659,889 $ - $	December31,2019
			6,843,336 $ 1,067,146
			7,910,482 $
			148,527 $

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

below:
Interest income Gain on disposal	Years ended December 31,
	2020 65,622 $ 17,210 82,832 $	2019
		184,213 $ 20,552
		204,765 $

B. The Group has no financial assets at amortised cost pledged to others as collateral.
C. The Group used the forecastability of Taiwan Institute of Economic Research boom observation report to adjust historical and timely information to assess the default possibility of debt instruments on December 31, 2020 and 2019, and considered guarantee for repurchase agreement held by the Group to estimate expected credit loss. The Group does not expect material credit loss after assessment.
D. The Group transacts time deposits with reputable domestic and foreign banks, and the counterparties of the debt instrument investments are Yuanta Asset Management Limited, Yuanta Securities Co., Ltd., International Bills Finance Corporation, Standard Chartered Bank, and BNP Paribas. The Group’s counterparties have good credit quality, and the impairment loss is assessed using a 12-month expected credit loss approach.

~133~

(4) Notes and accounts receivable

Notes receivable Accounts receivable Less: Loss allowance (	December31,2020 759 $ 1,438,764 $ 4,310) ( 1,434,454 $	December31,2019
		3,054 $
		1,484,002 $ 5,471)
		1,478,531 $

A. As of December 31, 2020 and 2019, the estimated sales discounts and allowances were $93,140 and $101,785, respectively. Since the sales discounts and allowances met the requirements for offset of financial liabilities and financial assets, the net amounts were shown under accounts receivable.
B. The ageing analysis of accounts receivable and notes receivable is as follows:

Not past due Up to 30 days 31 to 90 days 91 to 180 days Over 180 days	December	31,2020
	Accountsreceivable 1,177,490 $ 237,151 8,835 406 14,882 1,438,764 $	Notesreceivable
		759 $ - - - -
		759 $

Not past due Up to 30 days 31 to 90 days 91 to 180 days Over 180 days	December	31,2019
	Accounts receivable 1,181,994 $ 271,457 8,521 490 21,540 1,484,002 $	Notes receivable
		3,054 $ - - - -
		3,054 $

The above ageing analysis was based on past due date.

C. The Group has credit insurance that covers accounts receivable from major customers. Should bad debts occur, the Group will receive 90% of the losses resulting from non-payment.
D. As of December 31, 2020 and 2019, notes receivable and accounts receivable were all from contracts with customers. As of January 1, 2019, the balance of notes receivable and accounts receivable from contracts with customers amounted to $2,173,055.
E. As at December 31, 2020 and 2019, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the Group’s notes receivable were $759 and $3,054, respectively; the maximum exposure to credit risk in respect of the amount that best represents the Group’s accounts receivable were $1,434,454 and $1,478,531, respectively.

~134~

F. The Group classifies customers’ accounts receivable in accordance with the credit rating of the customer. The Group applies the simplified approach to estimate expected credit loss under the provision matrix basis.
G. The Group wrote-off the financial assets, which cannot reasonably be expected to be recovered, after initiating recourse procedures. However, the Group will continue executing the recourse procedures to secure their rights. On December 31, 2020 and 2019, the Group has no written-off financial assets that are still under recourse procedures.
H. The Group used forecastability, historical and timely information to assess the loss rate of accounts receivable. On December 31, 2020 and 2019, the provision matrix is as follows:

December 31, 2020 Expected loss rate Total book value December 31, 2019 Expected loss rate Total book value	Not pastdue 0.003%~0.386% 1,177,490 $ Not pastdue 0.011%~0.9% 1,181,994 $	1-180 days pastdue 0.018%~41% 246,392 $ 1-180 days pastdue 0.06%~59% 280,468 $	Over 180 days pastdue 25%~100% 14,882 $ Over 180 days pastdue 25%~100% 21,540 $	Total
				1,438,764 $ Total
				1,484,002 $

I. The balance of allowance for loss and movements are as follows:

			2020	2020
		Accounts	receivable		Notesreceivable
At January 1		$	5,471	$	-
Provision for impairment			893		-
Write-offs	(		616)		-
Reclassified to overdue receivables	(		178)		-
Reclassified to other income	(		1,134)		-
Effect of exchange rate changes	(		126)		-
At December 31		$	4,310	$	-
			2019
		Accounts	receivable		Notesreceivable
At January 1		$	24,627	$	-
Reversal of impairment	(		1,921)		-
Reclassified to overdue receivables	(		17,393)		-
Effect of exchange rate changes			158		-
At December 31		$	5,471	$	-

J. The Group does not hold any collateral as security.

~135~

(5) Inventories

Inventories
Raw materials Work in progress Finished goods Raw materials Work in progress Finished goods		December31,2020
	Allowance for Cost valuation loss 2,161,744 $ 28,593) ($ 487,023 1,023) ( 576,861 5,546) ( 3,225,628 $ 35,162) ($ December 31, 2019		Bookvalue
			2,133,151 $ 486,000 571,315
			3,190,466 $

	Allowance for Cost valuation loss 1,301,090 $ 25,263) ($ 335,478 471) ( 454,874 3,049) ( 2,091,442 $ 28,783) ($		Bookvalue
			1,275,827 $ 335,007 451,825
			2,062,659 $

A. The cost of inventories recognized as expense for the year:

Cost of goods sold Revenue from disposal of scraps Loss on (gain on reversal of) decline in market value of inventory	2020 2019 8,970,221 $ 10,478,804 $ - 19,041) ( 6,379 51,108) ( 8,976,600 $ 10,408,655 $ Years endedDecember31,

The gain on reversal of decline in market value of inventory for the year ended December 31, 2019 was due to the Group’s disposal of slow-moving inventory.

B. No inventories were pledged to others.

(6) Non-current financial assets at fair value through other comprehensive income

	Items Non-current items: Equity instruments Listed stocks Others Valuation adjustments	December31,2020 105,480 $ 1,125 106,605 4,395 111,000 $	December31,2019 105,480 $ 1,125 106,605 7,559 114,164 $

A. The Group has elected to classify equity investments that are considered to be strategic investments as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $111,000 and $114,164 as at December 31, 2020 and 2019, respectively.

~136~

B. For the years ended December 31, 2020 and 2019, the Group disposed equity investments whose fair value was $0 and $76,711, respectively, and accumulated gain on disposal was transferred into retained earnings in the amount of $0 and $36,010, respectively.
C. For the years ended December 31, 2020 and 2019, the Group’s cost recovery of equity instruments were $0 and $256, respectively.
D. Amounts recognized in profit or loss and other comprehensive income in relation to the financial assets at fair value through other comprehensive income are listed below:

Equity instruments at fair value through other comprehensive income Fair value change recognized in other comprehensive (loss) income ( Cumulative gains reclassified to retained earnings due to derecognition Dividend income recognized in profit or loss Held at end of year Derecognized during the year	Years endedDecember31,	Years endedDecember31,
	2020 3,164) $ - $ 3,834 $ - 3,834 $	2019
		27,976 $
		36,010 $
		3,028 $ 1,991
		5,019 $

E. The Group has no financial assets at fair value through other comprehensive income pledged to others as collateral.

(7) Investments accounted for using equity method

	Investee Company Taiwan IC Packaging Corp.	December31,2020 95,724 $	December31,2019 97,434 $

A. The basic information of the associate that is material to the Group is as follows:

Associate name Taiwan IC Packaging Corp.	Principal place of business Taiwan	December December 31,2020 31,2019 12.74% 12.74% Shareholdingratio	Nature of relationship Note	Method of measurement
		December 31,2020 12.74%
				Equity method

Note: Taiwan IC Packaging Corp. is engaged in IC packaging and testing and is the upstream supplier in the IT and semiconductor industries. In order to reach synergy of vertical integration, Taiwan IC Packaging Corp. processes the raw materials provided by the Group into relevant semi-finished goods.
B. The Group held a 12.74% equity interest in Taiwan IC Packaging Corp., and is the company’s largest single shareholder. However, the Group does not hold the majority of the voting power during the shareholders’ meeting of Taiwan IC Packaging Corp. and the Group has no seat in the Board of Directors of Taiwan IC Packaging Corp., which indicate that the Group has no control ability to direct the relevant activities of Taiwan IC Packaging Corp. In addition, the Company’s chairman is the same with Taiwan IC Packaging Corp.; hence, the Group has significant influence over Taiwan IC Packaging Corp.

~137~

C. The summarized financial information of the associate that is material to the Group is as follows:

Balance sheet

			Taiwan ICPackaging Corp.	Taiwan ICPackaging Corp.	Taiwan ICPackaging Corp.
		December31,2020		December31,2019
Current assets		$	942,507	$	902,115
Non-current assets			1,224,429		1,187,726
Current liabilities	(		327,211)	(	237,849)
Non-current liabilities	(		85,765)	(	88,566)
Total net assets		$	1,753,960	$	1,763,426
Share in associate’s net assets		$	223,480	$	224,686
Net equity differences	(		127,756)	(	127,252)
		$	95,724	$	97,434

Statement of comprehensive income

A Revenue Loss for the year from continuing operations ( Total comprehensive loss ( Dividends received from associates	2020 2019 1,210,125 $ 1,181,337 $ 11,040) $ 47,432) ($ 9,466) $ 50,660) ($ - $ - $ Years ended December 31, Taiwan ICPackaging Corp.

D. Share of loss of associates accounted for using the equity method is as follows:

Investee Company Taiwan IC Packaging Corp.	2020 2019 1,299) ($ 8,367) ($ Years endedDecember31,

E. The Group’s investment in Taiwan IC Packaging Corporation has quoted market price. The fair value of Taiwan IC Packaging Corporation was $239,053 and $187,366 as of December 31, 2020 and 2019, respectively.

~138~

(8) Property, plant and equipment

At January 1 Cost Accumulated depreciation Opening net book amount as at January 1 Additions (including transfers) Disposals Depreciation charge Net exchange differences ( Closing net book amount as at December 31 At December 31 Cost Accumulated depreciation				2020

~139~

At January 1 Cost Accumulated depreciation Opening net book amount as at January 1 Additions (including transfers) Disposals Depreciation charge Net exchange differences ( Closing net book amount as at December 31 At December 31 Cost Accumulated depreciation				2019

A. The relevant assets of the Group recognized as property, plant and equipment are all for self-use.

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

~140~

(9) Leasing arrangements-lessee

A. The Group leases various assets including land, buildings, and business vehicles. Rental contracts are typically made for periods of 1 to 11 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. The carrying amounts of right-of-use assets and the depreciation charge are as follows:

Land Buildings Transportation equipment (business vehicles) Land Buildings Transportation equipment (business vehicles)	December31,2020 December31,2019 Carryingamount Carryingamount 138,189 $ 175,858 $ 47,034 63,145 1,856 2,047 187,079 $ 241,050 $ Years endedDecember31,	December31,2019
		Carryingamount
		175,858 $ 63,145 2,047
		241,050 $
	2020 Depreciationcharge 39,080 $ 16,045 726 55,851 $	2019
		Depreciationcharge
		32,836 $ 16,891 1,044
		50,771 $

C. For the years ended December 31, 2020 and 2019, the additions to right-of-use assets were $1,200 and $123,254, respectively.
D. Information on profit or loss in relation to lease contracts is as follows:

Items affecting profit or loss Interest expense on lease liabilities Expense on short-term lease contracts Expense on leases of low-value assets	Years endedDecember31,	Years endedDecember31,
	2020 2,038 $ 11,514 1,510	2019
		1,865 $ 7,401 1,561

E. For the years ended December 31, 2020 and 2019, the Group’s total cash outflow for leases were $67,483 and $69,356, respectively.

(10) Leasing arrangements-lessor

A. The Group leases various assets including land and buildings. Rental contracts are typically made for periods of 1 to 3 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions . To protect the lessor’s ownership rights on the leased assets, leased assets may not be used as security for borrowing purposes.

~141~

B. For the years ended December 31, 2020 and 2019, the Group recognized rent income in the amount of $38,721 and $39,490, respectively, based on the operating lease agreement, which does not include variable lease payments.
C. The maturity analysis of the lease payments under the operating leases is as follows:

2021 2022 2023	December31,2020 23,725 $ 2020 3,900 2021 400 2022 28,025 $	December31,2019
		36,348 $ 21,828 -
		58,176 $

(11) Investment property

At January 1 Cost Accumulated depreciation Opening net book amount as at January 1 Additions (including transfers) Depreciation charge Net exchange differences Closing net book amount as at December 31 At December 31 Cost Accumulated depreciation		2020
	Buildings and Land structures Total 2,268,726 $ 446,392 $ 2,715,118 $ - 104,826) ( 104,826) ( 2,268,726 $ 341,566 $ 2,610,292 $ 2,268,726 $ 341,566 $ 2,610,292 $ - 13,498 13,498 - 12,107) ( 12,107) ( - 743 743 2,268,726 $ 343,700 $ 2,612,426 $ 2,268,726 $ 459,716 $ 2,728,442 $ - 116,016) ( 116,016) ( 2,268,726 $ 343,700 $ 2,612,426 $		Total
			2,715,118 $ 104,826)
			2,610,292 $
			2,612,426 $
			2,728,442 $ 116,016)
			2,612,426 $

~142~

At January 1 Cost Accumulated depreciation Opening net book amount as at January 1 Depreciation charge Net exchange differences Closing net book amount as at December 31 At December 31 Cost Accumulated depreciation		2019

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

Rental income from investment property Direct operating expenses arising from investment property that generated rental income Direct operating expenses arising from investment property that did not generate rental income	Years endedDecember31,	Years endedDecember31,
	2020 38,721 $ 11,399 $ 708 $	2019
		39,490 $
		10,525 $
		821 $

B. The fair value of the investment property held by the Group was $5,380,484 and $5,107,125 as of December 31, 2020 and 2019, respectively, which was based on the transaction prices of similar properties in the same area.
C. No investment property was pledged to others.

~143~

(12) Other non-current assets

Guarantee deposits paid Prepayments for business facilities Others	December31,2020 32,823 $ - 14,588 47,411 $	December31,2019
		31,543 $ 16,926 15,141
		63,610 $

(13) Pensions

A. Defined benefit plan
(a) The Company has 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 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 contributes monthly an amount equal to 2% of the employees’ monthly salaries and wages to the retirement fund deposited with the Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company would assess the balance in the aforementioned labor pension reserve account by 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 will make contributions to cover the deficit by next March.
(b) The amounts recognized in the balance sheet are as follows:

Present value of defined benefit obligations Fair value of plan assets ( Net defined benefit liability	December31,2020 43,239 $ 26,678) ( 16,561 $	December31,2019 40,765 $ 24,411) 16,354 $

~144~

2020
Balance at January 1
Current service cost
Interest expense (income)
Remeasurements:
Return on plan assets
(excluding amounts included
in interest income or expense)
Change in demographic
assumptions
Change in financial
assumptions
Experience adjustments
Pension fund contribution
Paid pension
(
Balance at December 31
2019
Balance at January 1
Current service cost
Interest expense (income)
Remeasurements:
Return on plan assets
(excluding amounts included
in interest income or expense)
Change in demographic
assumptions
Change in financial
assumptions
Experience adjustments
(
Pension fund contribution
Paid pension
(
Balance at December 31

Present value of
defined benefit
obligations
plan assets
benefit liability
40,765
$ 24,411)
($ 16,354
$ 431
-
431
326
200)
(
126
41,522
24,611)
(
16,911
-
802)
(
802)
(
105
-
105
527
-
527
1,242
-
1,242
1,874
802)
(
1,072
-
1,422)
(
1,422)
(
157)

157
-
43,239
$ 26,678)
($ 16,561
$ Present value of
defined benefit
obligations
plan assets
benefit liability
41,250
$ 23,449)
($ 17,801
$ 500
-
500
464
272)
(
192
42,214
23,721)
(
18,493
-
767)
(
767)
(
329
-
329
1,645
-
1,645
1,931)

-
1,931)
(
43
767)
(
724)
(
-
1,415)
(
1,415)
(
1,492)

1,492
-
40,765
$ 24,411)
($ 16,354
$ Fair value of
Net defined
Fair value of
Net defined

~145~

(d) The Bank of Taiwan was commissioned to manage the Fund of the Company’s defined benefit pension plan in accordance with the Fund’s annual investment and utilisation plan and the “Regulations for Revenues, Expenditures, Safeguard and Utilisation of the Labor Retirement Fund” (Article 6: The scope of utilisation for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-the-counter, or private placement equity securities, investment in domestic or foreign real estate securitisation products, etc.). With regard to the utilisation of the Fund, its minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. If the earnings is less than aforementioned rates, government shall make payment for the deficit after being authorised by the Regulator. The Company has no right to participate in managing and operating that fund and hence the Company is unable to disclose the classification of plan assets fair value in accordance with IAS 19 paragraph 142. The composition of fair value of plan assets as of December 31, 2020 and 2019 is given in the Annual Labor Retirement Fund Utilisation Report announced by the government.
(e) The principal actuarial assumptions used were as follows:

Discount rate Future salary increases	Years ended	December31,
	2020 0.350% 1.625%	2019
		0.800%
		2.000%

Future mortality rate was estimated based on the 5th Taiwan Standard Ordinary Experience Mortality Table.

Because the main actuarial assumption changed, the present value of defined benefit obligation is affected. The analysis was as follows:

December 31, 2020 Effect on present value of defined benefit obligation ( December 31, 2019 Effect on present value of defined benefit obligation (	Increase Decrease 0.25% 0.25% 1,306) $ 1,364 $ 1,276) $ 1,333 $ Discount rate	Increase Decrease 0.25% 0.25% 1,315 $ 1,267) ($ 1,286 $ 1,238) ($ Future salaryincreases
	Increase 0.25% 1,306) $ 1,276) $

The sensitivity analysis above is based on one assumption which changed while the other conditions remain unchanged. In practice, more than one assumption may change all at once. The method of analysing sensitivity and the method of calculating net pension liability in the balance sheet are the same.

~146~

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous period.

(f) Expected contributions to the defined benefit pension plan of the Company for the year ending December 31, 2021 amount to $1,422.
(g) As of December 31, 2020, the weighted average duration of the retirement plan is 13.7 years.
B. Defined contribution plans
(a) Effective July 1, 2005, the Company has established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company contributes 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) Transcend Shanghai, Transtech Shanghai and Transcend Hong Kong have defined contribution plans. Monthly contributions to an independent fund administered by the government in accordance with the pension regulations in the People’s Republic of China (PRC) are based on a certain percentage of employees' monthly salaries and wages, ranging from 12.5% to 20%. Other than the monthly contributions, the Group has no further obligations.
(c) Transcend Japan, Transcend Korea, Transcend USA, Transcend Europe and Transcend Germany have defined contribution plans. Monthly contributions are based on a certain percentage of employees’ monthly salaries and wages and are recognized as pension costs accordingly. Other than the monthly contributions, the Group has no further obligations.
(d) The pension costs under the defined contribution pension plans of the Group for the years ended December 31, 2020 and 2019 were $41,061 and $41,729, respectively.

(14) Share capital

A. As of December 31, 2020, the Company’s authorized capital was $5,000,000, consisting of 500 million shares of ordinary stock (including 25 million shares reserved for employee stock options), and the paid-in capital was $4,290,617 with par value of $10 per share. All proceeds from shares issued have been collected.

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

At January 1 Purchase of treasury shares (retired) ( At December 31	2020 429,248 186) ( 429,062	2019 430,762 1,514) 429,248

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B. Treasury shares

(a) To enhance the Company’s credit rating and stockholders’ equity, on November 7, 2019, the Board of Directors resolved to repurchase and retire 3 million ordinary shares. The repurchase period is from November 8, 2019 to January 7, 2020, and the price ranged between $49 and $97 in dollars per share. The details are as follows:

Name of company holdingthe shares Reason for reacquisition The Company Enhance the Company’s credit rating and stockholders’ equity	Numbers of shares (in thousands) 1,700	Carryingamount
		$ 130,621

On March 5, 2020, the Board of Directors during its meeting resolved to retire treasury shares for capital reduction with the effective date set on March 31, 2020. The registration was completed on April 15, 2020.

(b) Pursuant to the R.O.C. Securities and Exchange Act, the number of shares bought back as treasury share should not exceed 10% of the number of the Company’s issued and outstanding shares and the amount bought back should not exceed the sum of retained earnings, paid-in capital in excess of par value and realized capital surplus.
(c) Pursuant to the R.O.C. Securities and Exchange Act, treasury shares should not be pledged as collateral and is not entitled to dividends before it is reissued.
(d) Pursuant to the R.O.C. Securities and Exchange Act, treasury shares to enhance the Company’s credit rating and the stockholders’ equity should be retired within six months of acquisition.

(15) 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 shall not be used to cover accumulated deficit unless the legal reserve is insufficient.

(16) Retained earnings

A. In accordance with the Company’s Articles of Incorporation, the current year’s earnings, if any, shall first be used to pay all taxes and to offset prior years’ operating losses and then 10% of the remaining amount shall be set aside as legal reserve. The Company shall also set aside special reserve in accordance with the regulations. On the premise that there is no effect on the Company’s normal operations and no violation of regulations, the Company shall reserve certain

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amount for maintaining stability of dividends. The remainder, if any, is the distributable earnings to be appropriated as resolved by stockholders at the stockholders’ meeting. The Board of Directors is authorized by the shareholders to resolve the appropriation of cash dividends and cash payment from capital surplus by a resolution adopted by a majority vote at its meeting attended by two-thirds of the total number of directors, which will then be reported to the shareholders.

B. The Company distributes dividends taking into consideration the Company’s economic environment, growth phases, future demands for funds, long-term financial planning and the cash flow needs of stockholders. Cash dividends shall account for at least 5% of the total dividends distributed.
C. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company’s 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 balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.
E. (a) The cash appropriation of earnings and cash payment from capital surplus for the years ended December 31, 2019 and 2018 have been resolved at the shareholders’ meeting on June 19, 2020 and June 12, 2019, respectively. Details are summarized below:

Legal reserve Special reserve Cash dividends Cash payment from capital surplus	Amount Dividends per share(in dollars) 172,897 $ 69,330 1,544,622 3.60 $ 1,786,849 $ Cash payment per Amount share (indollars) 386,156 $ 0.90 $ YearendedDecember31,2019	Amount Dividends per share(in dollars) 208,199 $ 14,325 1,895,351 4.40 $ 2,117,875 $ Cash payment per Amount share (indollars) 258,458 $ 0.60 $ YearendedDecember31,2018	Amount Dividends per share(in dollars) 208,199 $ 14,325 1,895,351 4.40 $ 2,117,875 $ Cash payment per Amount share (indollars) 258,458 $ 0.60 $ YearendedDecember31,2018
	Amount 172,897 $ 69,330 1,544,622 1,786,849 $ Amount 386,156 $	Amount 208,199 $ 14,325 1,895,351 2,117,875 $ Amount 258,458 $
			4.40 $ Cash payment per share (indollars) 0.60 $

Actual distribution of retained earnings of 2019 and 2018 is in agreement with the amounts resolved at the stockholders’ meeting.

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(b) The appropriation of earnings and capital surplus for the year ended December 31, 2020 as proposed by the Board of Directors on March 4, 2021 is as follows:

Legal surplus Cash dividends Total Capital surplus used to issue cash to shareholders	YearendedDecember31,2020	YearendedDecember31,2020
	Amount 119,625 $ 1,094,107 1,213,732 $ Amount 214,531 $	Dividends per share (indollars)
		2.55 $ Cash dividends pershare (indollars)
		0.50 $

Aforementioned proposal to appropriate 2020 earnings and capital surplus has not yet been resolved by the stockholders.

(17) Other equity items

					2020
					Exchange
					differences
			Unrealized		on translation of
			gain or loss		foreign financial
			onvaluation		statements		Total
At January 1		$	7,559	($	138,461)	($	130,902)
Revaluation - gross	(		3,164)		-	(	3,164)
Currency translation differences			-		21,027		21,027
Effect from income tax			-	(	4,205)	(	4,205)
At December 31		$	4,395	($	121,639)	($	117,244)

					2019
					Exchange
					differences
			Unrealized		on translation of
			gain or loss		foreign financial
			onvaluation		statements		Total
At January 1		$	15,593	($	77,165)	($	61,572)
Revaluation - gross			27,976		-		27,976
Revaluation transferred to
retained earnings - gross	(		36,010)		-	(	36,010)
Currency translation differences			-	(	76,620)	(	76,620)
Effect from income tax			-		15,324		15,324
At December 31		$	7,559	($	138,461)	($	130,902)

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(18) Operating revenue

Sales revenue	Years endedDecember31,	Years endedDecember31,
	2020 11,446,696 $	2019
		13,496,186 $

A. Disaggregation of revenue from contracts with customers

The Group derives revenue from the transfer of goods at a point in time in the following geographical regions:

	Electronicproducts	Electronicproducts	Electronicproducts	Total
Taiwan 2,521,695 $	Asia America Europe 4,075,807 $ 1,163,131 $ 2,822,582 $ Electronicproducts
				11,446,696 $
				Total
Taiwan 2,794,634 $	Asia 4,724,037 $	America 1,200,675 $	Europe 3,799,177 $
				13,496,186 $

B. The delay of the Group’s sales orders has a knock-on effect on the overall revenue due to Covid-19 in the first half of 2020. However, there is no significant impact to the scope and price of the service contracts as the Group negotiated with customers and continuously invests in the manufacture of products for the subsequent shipments.
C. Contract assets and liabilities

The Group has no revenue-related contract assets and liabilities.

(19) Interest income

Interest income from bank deposits Interest income from financial assets measured at amortised cost Other interest income	Years endedDecember31,	Years endedDecember31,
	2020 3,114 $ 65,622 5,216 73,952 $	2019
		7,266 $ 184,213 133
		191,612 $

(20) Other income

Rental income	Years endedDecember31,	Years endedDecember31,
	2020 38,721 $	2019
		39,490 $

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(21) Other gains and losses

Other gains and losses
	0			Years ended	December31,
				2020	2019
(Loss) gain on disposal of property, plant and
equipment		($		2,098)	$	123
Net currency exchange loss		(		54,016)	(	22,690)
Net gain (loss) on financial assets and
liabilities at fair value through profit or loss				147,742	(	5,604)
Dividend income				3,834		5,019
Royalty refund				62,738		68,750
Others				5,699		21,713
			$	163,899	$	67,311

(22) Expenses by nature

Expenses by nature
Wages and salaries Labor and health insurance fees Pension costs Other personnel expenses Depreciation on property, plant and equipment (including investment property and right-of-use assets)	Years endedDecember31,
	2020 1,104,801 $ 114,392 41,618 53,914 257,272	2019
		1,139,344 $ 122,057 42,421 57,908 262,471

A. In accordance with the Articles of Incorporation of the Company, a ratio of distributable profit of the current year, after covering accumulated losses, shall be distributed as employees’ compensation and directors’ remuneration. The ratio shall not be lower than 1% for employees’ compensation and shall not be higher than 0.2% for directors’ and supervisors’ remuneration.
B. For the years ended December 31, 2020 and 2019, employees’ compensation was accrued at $15,225 and $21,398, respectively; while directors’ remuneration was accrued at $2,131 and $2,996, respectively. The aforementioned amounts were recognized in salary expenses.

The employees’ compensation and directors’ remuneration were estimated and accrued based on 1% and 0.2% of distributable profit of current period for the year ended December 31, 2020.

The employees’ compensation and directors’ remuneration resolved by the Board of Directors were $14,786 and $2,160, respectively, and the employees’ compensation will be distributed in the form of cash.

The difference between employees’ compensation and directors’ remuneration as resolved by the Board of Directors and the amounts recognized in the 2019 financial statements by $714 and $206, respectively, were adjusted in profit or loss for 2020.

Information about employees’ compensation and directors’ remuneration of the Company as approved at the meeting of Board of Directors and resolved by the stockholders at their meeting will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

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(23) Income tax

A. Income tax expense

(a) Components of income tax expense:

Current tax: Current tax on profits for the year Prior year income tax underestimation Total current tax Deferred tax: Origination and reversal of temporary differences Total deferred tax Income tax expense	Years endedDecember31,	Years endedDecember31,
	2020 261,380 $ 28,866 290,246 14,400 14,400 304,646 $	2019
		329,605 $ 25,554
		355,159
		5,617
		5,617
		360,776 $

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

Exchange differences on translation of foreign financial statements	Years endedDecember31,	Years endedDecember31,
	2020 2019 4,205 $ 15,324) ($	2019

B. Reconciliation between income tax expense and accounting profit

			Years ended	December31,	December31,
			2020		2019
Income tax calculated by applying statutory
rate to the profit before tax		$	296,358	$	427,410
Effects from items disallowed by tax
regulation (including effects from tax
exemption)	(		19,985)	(	90,734)
Prior year income tax underestimation			28,866		25,554
Effect from investment tax credits	(		593)	(	1,454)
Income tax expenses		$	304,646	$	360,776

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C. Amounts of deferred tax assets or liabilities as a result of temporary differences are as follows:

					2020	2020	2020
							Recognised in
								other
				Recognised in			comprehensive
		At January1			profit or loss			income	At	December 31
Deferred income tax assets
Amount of allowance for bad	$	2,740	($		458)	$		-	$	2,282
debts that exceed the limit for
tax purpose
Unrealized exchange loss		30,166	(		30,166)			-		-
Pension provision amount		5,310	(		173)			-		5,137
in excess of appropriation
amount
Royalty fees		-			4,342			-		4,342
Unused compensated absences		2,025	(		689)			-		1,336
Unrealized sales discounts and		19,982	(		3,874)			-		16,108
allowances
Unrealized gross profit from		6,138	(		3,446)			-		2,692
sales
Unrealized loss on market		5,805			1,287			-		7,092
value decline and obsolete
and slow-moving inventories
Others		3,693	(		1,210)			-		2,483
Total	$	75,859	($		34,387)	$		-	$	41,472
Deferred income tax liabilities
Unrealized exchange gain	$	-	($		2,774)	$		-	($	2,774)
Currency translation	(	3,802)			-	(		4,205)	(	8,007)
differences
Net gain on investment	(	151,574)			22,753			-	(	128,821)
accounted for using equity
method
Others	(	106)			8			-	(	98)
Total	($	155,482)	$		19,987	($		4,205)	($	139,700)

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2019

Recognised in At January1 profit or loss Deferred income tax assets Amount of allowance for bad debts that exceed the limit for tax purpose 1,005 $ 1,735 $ Unrealized exchange loss 36,890 6,724) ( Pension provision amount in excess of appropriation amount 5,455 145) ( Unused compensated absences 1,862 163 Unrealized sales discounts and allowances 21,797 1,815) ( Unrealized gross profit from sales 5,182 956 Unrealized loss on market value decline and obsolete and slow-moving inventories 15,872 10,067) ( Others 2,238 1,455 Total 90,301 $ 14,442) ($ Deferred income tax liabilities Currency translation differences 19,126) ($ - $ Net gain on investment accounted for using equity method 160,387) ( 8,813 Others 118) ( 12 Total 179,631) ($ 8,825 $	Recognised in other comprehensive income At December 31 - $ 2,740 $ - 30,166 - 5,310 - 2,025 - 19,982 - 6,138 - 5,805 - 3,693 - $ 75,859 $ 15,324 $ 3,802) ($ - 151,574) ( - 106) ( 15,324 $ 155,482) ($	At December 31
		2,740 $ 30,166 5,310 2,025 19,982 6,138 5,805 3,693
		75,859 $

D. The amounts of deductible temporary differences that were not recognized as deferred tax assets are as follows:

Deductible temporary differences	December 31,2020 73,173 $	December 31,2019
		73,173 $

E. The Company’s income tax returns through 2018 have been assessed and approved by the Tax Authority.

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(24) Earnings per share

YearendedDecember31,2020	YearendedDecember31,2020	YearendedDecember31,2020
Weighted-average common shares Earnings outstanding per share Profit after tax (in thousands) (indollars) 1,197,735 $ 429,064 2.79 $ 1,197,735 $ 429,064 - 366 1,197,735 $ 429,430 2.79 $ YearendedDecember31,2019		Earnings per share (indollars)
		2.79 $
		2.79 $
Profit after tax 1,728,967 $ 1,728,967 $ - 1,728,967 $	Weighted-average common shares outstanding (in thousands) 430,718 430,718 441 431,159	Earnings per share (indollars)
		4.01 $
		4.01 $

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7. RELATED PARTY TRANSACTIONS

(1) Names of related parties and relationship

Names of related parties

Relationship with the Group

Taiwan IC Packaging Corporation Associate accounted for using equity method Won Chin Investment Inc. (Won Chin) Major stockholder Cheng Chuan Technology Development Inc. Major stockholder (Cheng Chuan)

(2) Significant transactions and balances with related parties

A. Operating revenue

Sales of goods Associates accounted for using the equity method	Years endedDecember31,	Years endedDecember31,
	2020 2,016 $	2019
		1,828 $

The sales prices charged to related parties are approximate to those charged to third parties. The credit term to Taiwan IC Packaging Corporation is 30 days after receipt of goods. The credit term to third parties is 30 to 60 days after monthly billings.

B. Purchases

Purchases of goods Associates accounted for using the equity method	Years endedDecember31,	Years endedDecember31,
	2020 231,335 $	2019
		273,949 $

The purchase prices charged by related parties are approximate to those charged by third parties. The payment term from Taiwan IC Packaging Corporation is 30 days after monthly billings. The payment term from third parties is 30 to 45 days after monthly billings.

C. Receivables from related parties

December 31, 2020 December 31, 2019 Accounts receivable: Associates accounted for using equity method $ - $ 8

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The receivables from related parties arise mainly from sale transactions. The credit term to Taiwan IC Packaging Corporation is 30 days after receipt of goods. The receivables are unsecured in nature and bear no interest. There are no allowances for uncollectible accounts held against receivables from related parties.

D. Payables to related parties

Accounts payable: Associates accounted for using equity method	December31,2020 $ 37,416	December31,2019
		$ 52,828

The payables to related parties arise mainly from purchase transactions and are due 30 days after the date of purchase. The payables bear no interest.

E. Leasing arrangements - lessee

The Company signed a land lease contract with its major stockholders, Won Chin and Cheng Chuan, to build a new plant on the leased land with a lease term of 3 years from June 12, 2019 to June 11, 2022. The annual rental payment is $37,058 (excluding tax), which was determined based on the average rent of land near the leased land shown in the appraisal report issued by Sinyi Real Estate Appraisers Firm. Rent was paid on the contract date and becomes payable on the same date each following year until the end of the lease. As of December 31, 2020 and 2019, the balance of related right-of-use assets amounted to $51,893 and $88,521 while lease liabilities amounted to $36,815 and $73,050, respectively.

(3) Key management compensation

Salaries and other employee benefits	Years endedDecember31,	Years endedDecember31,
	2020 35,811 $	2019
		27,859 $

8. PLEDGED ASSETS

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

Pledged assets Property, plant and equipment	December 31,2020 December 31,2019 $ 148,671 $ 150,499 Bookvalue	Pledgepurpose
	December 31,2020 $ 148,671
		Collateral for general credit limit granted by financial institutions

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT COMMITMENTS

As of December 31, 2020, except for the provision of endorsements and guarantees mentioned in Note 13(1) B, there are no other significant commitments.

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10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT SUBSEQUENT EVENTS

Information on distribution of 2020 earnings and cash dividends from capital surplus is provided in Note 6(16) E(b).

12. OTHERS

(1)Capital risk management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. The Group’s own funds are currently sufficient, daily operations can create stable cash inflows, and there are no significant capital expenditure plans in the short term. Except for obtaining loans to reduce the exchange rate exposure, the Group has sufficient funds to cover its own needs. Debt financing is not necessary.

(2)Financial instruments

A. Financial instruments by category

Financial assets Financial assets mandatorily measured at fair value through profit or loss Financial assets at fair value through other comprehensive income Financial assets at amortised cost Cash and cash equivalents Financial assets at amortised cost Notes receivable Accounts receivable (including related parties) Other receivables Refundable deposits	December31,2020 4,255,920 $ 111,000 736,852 5,659,889 759 1,434,454 71,351 32,823 12,303,048 $	December31,2019
		2,581,509 $ 114,164 1,233,407 8,059,009 3,054 1,478,539 124,077 31,543
		13,625,302 $

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Financial liabilities Financial liabilities at amortised cost Accounts payable (including related parties) Other payables Lease liabilities	December31,2020 1,171,682 $ 246,635 1,418,317 $ 85,715 $	December31,2019
		1,058,178 $ 267,116
		1,325,294 $
		137,642 $

B. Financial risk management policies

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

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

Foreign exchange risk

i. The Group operates internationally and is exposed to exchange rate risk arising from the transactions of the Company and its subsidiaries used in various functional currency, primarily with respect to the USD. Exchange rate risk arises from future commercial transactions and recognized assets and liabilities.
ii. The Group’s businesses involve some non-functional currency operations (the Company’s functional currency: NTD; the subsidiaries’ functional currencies: JPY, KRW, USD, EUR, GBP and RMB, etc.). The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

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Financial assets Financial liabilities Financial assets Financial liabilities		December31,2020	December31,2020
	Foreign Currency USD`：`NTD EUR`：`NTD RMB`：`NTD JPY`：`NTD USD`：`EUR USD`：`HKD USD`：`JPY GBP`：`EUR USD`：`NTD	Foreign Currency Amount Exchangerate Bookvalue 24,579 $ 28.48 700,010 $ 3,551 35.02 124,356 9,070 4.3770 39,699 122,026 0.2763 33,716 4,859 0.8132 138,384 817 7.7539 23,268 395 103.0764 11,250 972 1.1108 37,811 35,425 $ 28.48 1,008,904 $ December31,2019
	Foreign Currency USD`：`NTD JPY`：`NTD EUR`：`NTD GBP`：`NTD HKD`：`NTD USD`：`EUR USD`：`HKD USD`：`JPY USD`：`NTD	Foreign Currency Amount 129,528 $ 1,051,209 4,963 1,045 6,000 4,319 971 759 27,029 $	Exchangerate Bookvalue 29.98 3,883,249 $ 0.2760 290,134 33.59 166,707 39.36 41,131 3.849 23,094 0.8925 129,484 7.7890 29,111 108.6232 22,755 29.98 810,329 $

The information on total exchange (loss) gain, including realized and unrealized arising from significant foreign exchange variation on the monetary items held by the Group for the years ended December 31, 2020 and 2019 is provided in Note 6(21).

Sensitivity analysis relating to foreign exchange rate risks is primarily for financial reporting period-end date of foreign currency monetary item. If the New Taiwan dollar exchange rate to the U.S. dollar increases or decreases by 1%, the Group’s net income will decrease or increase by $3,089 and $30,729 for the years ended December 31, 2020 and 2019, respectively.

Price risk

i. The Group is exposed to equity securities price risk because of investments held by the Group and classified on the balance sheet as financial assets at fair value through profit or loss and other comprehensive income. The Group is not exposed to commodity price risk. To manage its price risk arising from investments in equity securities, the Group diversifies its portfolio.
ii. The Group’s investments in listed and unlisted equity securities and financial instruments

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by the domestic companies. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased/decreased by 1% with all other variables held constant, post-tax profit for the years ended December 31, 2020 and 2019 would have increased/decreased by $42,559 and $25,815, respectively, as a result of gains/losses on equity securities classified as at fair value through profit or loss. Other components of equity would have increased/decreased by $1,110 and $1,142, 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 principal interest-bearing assets are cash and cash equivalents and financial assets at amortised cost. Cash and cash equivalents are due within twelve months. Financial assets at amortised cost are maintained at fixed rates. Therefore, it is assessed that there is no significant cash flow interest rate risk.
ii. The Group has not used any financial instruments to hedge its interest rate risk.
(b) Credit risk
i. Credit risk refers to the risk of financial loss to the Group arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the accounts receivable based on the agreed terms, and the contract cash flows of debt instruments stated at amortised cost.
ii. The Group manages its credit risk taking into consideration the entire group’s concern. According to the Group’s credit policy, each local entity in the Group is responsible for managing and analyzing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. To control internal risk, the Group assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board of Directors. The utilisation of credit limits is regularly monitored.
iii. The Group determines that the default occurs when the contract payments are past due over 180 days.
iv. The Group adopts the following assumptions under IFRS 9 to assess whether there has been a 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.

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(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. If the credit rating grade of an investment target degrades two scales, there has been a significant increase in credit risk on that instrument since initial recognition.
vi. The following indicators are used to determine whether the credit impairment of debt instruments has occurred:
(i) It becomes probable that the issuer will enter bankruptcy or other financial reorganization due to their financial difficulties;
(ii) The disappearance of an active market for that financial asset because of financial difficulties;
(iii) Default or delinquency in interest or principal repayments;
(iv) Adverse changes in national or regional economic conditions that are expected to cause a default.
vii. For details of credit risk in relation to accounts receivable and notes receivable, please refer to Note 6(4).
viii. For details of credit risk in relation to debt instrument investments measured at amortised cost, please refer to Note 6(3).

(c) Liquidity risk

i. Cash flow forecasting is performed in the operating entities of the Group and aggregated by Group treasury. Group treasury monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs.
ii. Surplus cash held by the operating entities over and above balance required for working capital management are transferred to the Group treasury. Group treasury invests surplus cash in interest bearing current accounts, time deposits, monetary funds, financial instruments and bonds sold under repurchase agreements, choosing instruments with appropriate maturities or sufficient liquidity to provide sufficient headroom as determined by the abovementioned forecasts. As at December 31, 2020 and 2019, the Group held money market position of $9,907,739 and $11,725,398, respectively, that are expected to readily generate cash inflows for managing liquidity risk.
iii. The Group’s non-derivative financial liabilities are analysed based on the remaining period at the balance sheet date to the contractual maturity date and all the Group’s financial liabilities expire within one year.

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(3)Fair value information

A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Group’s investment in listed stocks and beneficiary certificates is included in Level 1.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The fair value of the Group’s investment in non-hedging derivatives is included in Level 2.
Level 3: Unobservable inputs for the asset or liability. The fair value of the Group’s investment in equity investment without active market, financial products and investment property is included in Level 3.
B. Fair value information of investment property at cost is provided in Note 6(11).
C. Financial instruments not measured at fair value
Except for those listed in the table below, the carrying amounts of cash and cash equivalents, financial assets at amortised cost, notes receivable, accounts receivable, other receivables, accounts payable and other payables are approximate to their fair values.
D. 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 are as follows:

December 31, 2020 Level 1 Level 2 Level 3 Total Assets Recurring fair value measurements Financial assets at fair value through profit or loss Beneficiary certificates $ 4,255,920 $ - $ - $ 4,255,920 Financial assets at fair value through other comprehensive income Equity securities 109,875 - 1,125 111,000 $ 4,365,795 $ - $ 1,125 $ 4,366,920

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December 31, 2019 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Beneficiary certificates Financial products Financial assets at fair value through other comprehensive income Equity securities	Level 1 2,505,073 $ - 113,039 2,618,112 $	Level 2 - $ - - - $	Level 3 - $ 76,436 1,125 77,561 $	Total
				2,505,073 $ 76,436 114,164
				2,695,673 $

E. The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s length basis. The quoted market price used for financial assets held by the Group is the closing price. These instruments are included in Level 1. Instruments included in Level 1 comprise primarily listed stocks classified as financial assets at fair value through other comprehensive income and beneficiary certificates classified as financial assets at fair value through profit or loss.
F. For the years ended December 31, 2020 and 2019, there was no transfer between Level 1 and Level 2.
G. The valuation of derivative financial instruments is based on valuation model widely accepted by market participants. Forward exchange contracts are usually valued based on the current forward exchange rate.
H. If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
I. The financial products purchased for the years ended December 31, 2020 and 2019 were categorised to Level 3.
J. Finance segment is in charge of valuation procedures for fair value measurements being categorised within Level 3, which is to verify independent fair value of financial instruments. Such assessment is to ensure the valuation results are reasonable by applying independent information to make results close to current market conditions and frequently review the fair value.
K. The qualitative information of significant unobservable inputs to valuation model used in Level 3 fair value measurement is as follows: financial products are income investments, and the judgements of their valuation technique and significant unobservable inputs are based on the cash flow of individual contract.

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13. SUPPLEMENTARY DISCLOSURES

(1)Significant transactions information

A. Loans to others: None.
B. Provision of endorsements and guarantees to others: Please refer to table 1.
C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 2.
D. Acquisition or sale of the same security with the accumulated cost exceeding NT$300 million or 20% of the Company’s paid-in capital: Please refer to table 3.
E. Acquisition of real estate reaching NT$300 million or 20% of paid-in capital or more: None.
F. Disposal of real estate reaching NT$300 million or 20% of paid-in capital or more: None.
G. Purchases or sales of goods from or to relate parties reaching NT$100 million or 20% of the Company’s paid-in capital or more: Please refer to table 4.
H. Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more: Please refer to table 5.
I. Trading in derivative instruments undertaken during the reporting periods: Please refer to Note 6(2).
J. Significant inter-company transactions during the reporting periods: Please refer to table 6.

(2)Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China) : Please refer to table 7.

(3)Information on investments in Mainland China

A. Basic information: Please refer to table 8.
B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: Please refer to table 6.

(4)Major shareholders information

Major shareholders information: Please refer to table 9.

14. SEGMENT INFORMATION

(1)General information

The Group operates business only in a single industry. The Chairman of the Board of Directors who allocates resources and assesses performance of the Group as a whole, has identified that the Group has only one reportable operating segment.

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(2)Segment information

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

Segment revenue Segment income	Years endedDecember31,	Years endedDecember31,
	2020 11,446,696 $ 1,197,735 $	2019
		13,496,186 $
		1,728,967 $

(3)Reconciliation for segment income (loss)

Sales between segments are carried out at arm’s length. The revenue from external customers reported to the Chief Operating Decision-Maker is measured in a manner consistent with that in the statement of comprehensive income.

(4)Information on products and services

All external customer revenue comes from sale of electronic products. Please refer to Note 6(18)A for details.

(5)Geographical information

For details of geographical information of the Group’s revenue, please refer to Note6(18)A. The information on the Group’s non-current assets is as follows:

Taiwan Asia America Europe Total	December31,2020 Non-current assets 4,185,560 $ 812,348 78,320 53,012 5,129,240 $	December31,2019
		Non-current assets
		4,337,359 $ 859,926 95,690 60,131
		5,353,106 $

(6)Major customer information

Major customer information of the Group for the years ended December 31, 2020 and 2019 is as follows:

Years endedDecember31,	Years endedDecember31,
2020 701,149 $	2019
	1,088,967 $

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Transcend Information, Inc. and Subsidiaries

Provision of endorsements and guarantees to others Year ended December 31, 2020

Table 1 Number (Note 1)	Endorser/ guarantor	Party being endorsed/guaranteed	Party being endorsed/guaranteed	Limit on endorsements/ guarantees provided for a single party (Note 3)	Maximum outstanding endorsement/ guarantee amount as of December 31, 2020 (Note 4)	Outstanding endorsement/ guarantee amount at December 31, 2020 (Note 5)	Actual amount drawn down (Note 6)	Amount of endorsements/ guarantees secured with collateral	Ratio of accumulated endorsement/ guarantee amount to net asset value of the endorser/ guarantor company	Ceiling on total amount of endorsements /guarantees provided (Note 7)	Provision of endorsements/ guarantees by parent company to subsidiary (Note 8)	- - - Expressed in thousands of NTD (Except as otherwise indicated) Provision of endorsements/ guarantees to the party in Mainland China Footnote Provision of endorsements/ guarantees by subsidiary to parent company	- - - Expressed in thousands of NTD (Except as otherwise indicated) Provision of endorsements/ guarantees to the party in Mainland China Footnote Provision of endorsements/ guarantees by subsidiary to parent company	- - - Expressed in thousands of NTD (Except as otherwise indicated) Provision of endorsements/ guarantees to the party in Mainland China Footnote Provision of endorsements/ guarantees by subsidiary to parent company
		Company name	Relationship with the endorser/ guarantor (Note 2)
0	Transcend Taiwan	Transcend Japan Inc.	2	3,734,405 $	$ 564,600 (JPY $2,000,000) (In thousands)	$ 552,600 (JPY $2,000,000) (In thousands)	- $	-	3	7,468,810 $	Y	-	-	-

Note 1: The numbers filled in for the endorsements/guarantees provided by the Company or subsidiaries are as follows:
(a) The Company is ‘0’.
(b) The subsidiaries are numbered in order starting from ‘1’.
Note 2: Relationship between the endorser/guarantor and the party being endorsed/guaranteed is classified into the following seven categories; fill in the number of category each case belongs to:
(a) Having business relationship
(b) The endorser/guarantor parent company owns directly and indirectly more than 50% voting shares of the endorsed/guaranteed subsidiary.
(c) The endorsed/guaranteed company owns directly and indirectly more than 50% voting shares of the endorser/guarantor parent company.
(d) The endorser/guarantor parent company owns directly and indirectly more than 90% voting shares of the endorsed/guaranteed company.
(e) Mutual guarantee of the trade made by the endorsed/guaranteed company or joint contractor as required under the construction contract.
(f) Due to joint venture, all shareholders provide endorsements/guarantees to the endorsed/guaranteed company in proportion to its ownership.
(g) Joint guarantee of the performance guarantee for pre-sold home sales contract as required under the Consumer Protection Act.
Note 3: Not exceeding 20% of the Company's net asset value. ($18,672,026 *20%=$3,734,405)
Note 4: The maximum outstanding endorsement/guarantee amount during and as of December 31, 2020 is JPY$2,000,000 (In thousands).
Note 5: The amount was approved by the Board of Directors.
Note 6: The actual amount of endorsement drawn down is $0.
Note 7: Not exceeding 40% of the Company's net asset value. ($18,672,026*40%=$7,468,810)
Note 8: Fill in ‘Y’ for those cases of provision of endorsements/guarantees by listed parent company to subsidiary.

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Transcend Information, Inc. and Subsidiaries

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

December 31, 2020

			December 31, 2020
Table 2 Securities held by	Marketable securities (Note 1)	Relationship with the securities issuer (Note 2)	General ledger account		As of December 31, 2020			Footnote (Note 4) Expressed in thousands of NTD (Except as otherwise indicated)
				Number of shares 60,816 1,758,000 257,293,248 50,000,000 914,000 290,000	Book value (Note 3)	Ownership (%)	Fair value
Transcend Taiwan	Stocks Dramexchange Tech Inc. Fubon Financial Holding Co., Ltd. Preferred Shares B Beneficiary certificates Taishin 1699 Money Market Fund Yuanta Taiwan High-yield Leading Company Fund B Yuanta Taiwan Top 50 ETF Yuanta Taiwan Dividend Plus ETF	- - - - - -	Non-current financial assets at fair value through other comprehensive income " Current financial assets at fair value through profit or loss Non-current financial assets at fair value through profit or loss 〞〞		1,125 $ 109,875 111,000 $ 3,510,998 $ 624,500 $ 111,736 8,686 744,922 $	1 - - - - -	1,125 $ 109,875 3,510,998 $ 624,500 $ 111,736 8,686	- - - - - -

Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities within the scope of IFRS 9 ‘Financial instruments’. Note 2: Leave the column blank if the issuer of marketable securities is non-related party.

Note 3: Fill in the amount after adjusted at fair value and deducted by accumulated impairment for the marketable securities measured at fair value; fill in the acquisition cost or amortised cost deducted by accumulated impairment for the marketable securities not measured at fair value.

Note 4: The number of shares of securities and their amounts pledged as security or pledged for loans and their restrictions on use under some agreements should be stated in the footnote if the securities presented herein have such conditions.

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Transcend Information, Inc. and Subsidiaries

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

Year ended December 31, 2020

Table 3 Investor	Marketable securities `（`Note 1`）`	General ledger account	Counterparty `（`Note 2`）`	Relationship with the investor `（`Note 2`）`	January 1, 2020	January 1, 2020	`（`Note 3`）`	`（`Note 3`）`		`（`Note 3`）`	`（`Note 3`）`	Gain on disposal Number of shares Amount $ 6,340 257,293,248 $ 3,501,229 448 - - - 50,000,000 500,000 December 31, 2020 Expressed in thousands of NTD (Except as otherwise indicated)	Gain on disposal Number of shares Amount $ 6,340 257,293,248 $ 3,501,229 448 - - - 50,000,000 500,000 December 31, 2020 Expressed in thousands of NTD (Except as otherwise indicated)	Gain on disposal Number of shares Amount $ 6,340 257,293,248 $ 3,501,229 448 - - - 50,000,000 500,000 December 31, 2020 Expressed in thousands of NTD (Except as otherwise indicated)
					Number of shares	Amount	Number of shares	Amount	Number of shares	Selling price	Book value	Gain on disposal	Number of shares	Amount
Transcend Taiwan	Taishin 1699 Money Market Fund Capital Money Market Fund Yuanta Taiwan High-yield Leading Company Fund B	Current financial assets at fair value through profit or loss " Non-current financial assets at fair value through profit or loss	- - -	- - -	184,410,796 - -	$ 2,499,764 - -	220,144,215 30,841,673 50,000,000	$ 3,000,000 500,000 500,000	147,261,763 30,841,673 -	$ 2,004,875 500,448 -	$ 1,998,535 500,000 -	$ 6,340 448 -	257,293,248 - 50,000,000	$ 3,501,229 - 500,000

Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities.

Note 2: Fill in the columns the counterparty and relationship if securities are accounted for under the equity method; otherwise leave the columns blank.

Note 3: Aggregate purchases and sales amounts should be calculated separately at their market values to verify whether they individually reach NT$300 million or 20% of paid-in capital or more.

Note 4: Paid-in capital referred to herein is the paid-in capital of parent company. In the case that shares were issued with no par value or a par value other than NT$10 per share, the 20 % of paid-in capital shall be replaced by 10% of equity attributable to owners of the parent in the calculation.

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Table 4

Transcend Information, Inc. and Subsidiaries

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

Year ended December 31, 2020

Expressed in thousands of NTD (Except as otherwise indicated)

Purchaser/seller	Counterparty	Relationship with the counterparty		Transaction	Transaction		third party transactions (Note 1)	third party transactions (Note 1)	Notes/accounts receivable (payable)	Notes/accounts receivable (payable)	Footnote
			Sales (purchases)	Amount	Percentage of total sales (purchases)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable(payable)
Transcend Taiwan " " " " " " Transcend Information Europe B.V. Transcend Taiwan	Transcend Japan Inc. Transcend Information Europe B.V. Transcend Information, Inc. Transcend Korea Inc. Transtech Trading (Shanghai) Co., Ltd. Transcend Information (H.K) Ltd. Transcend Information Trading GmbH, Hamburg Transcend Information Trading GmbH, Hamburg Taiwan IC Packaging Corporation	The Company's subsidiary Subsidiary of Memhiro The Company's subsidiary The Company’s subsidiary Subsidiary of Memhiro Subsidiary of Memhiro Subsidiary of Memhiro Controlled by the same ultimate parent company Associate accounted for using equity method	Sales " " " " " " " (Purchase)	$ 733,397 507,995 508,954 270,427 707,893 235,845 427,917 158,418 (231,335)	7 5 5 2 6 2 4 25 (2)	120 days after monthly billings " " " " " " 30 days after delivery 30 days after monthly billings	No significant difference " " " " " " " No significant difference	30 to 60 days after monthly billings to third parties " " " " " " 7 to 60 days after delivery to third parties 30 to 45 days after monthly billings to third parties	$ 139,509 22,762 25,393 20,163 171,902 8,919 15,712 12,477 ( 37,416)	11 2 2 2 14 1 1 18 (2)	- - - - - - - - -

Note 1:The Company’s sales to subsidiaries were equivalent to subsidiaries' purchases from the Company; accordingly, the Company did not disclose the information on subsidiaries’ purchases from the Company.

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Transcend Information, Inc. and Subsidiaries

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

Year ended December 31, 2020

Table 5 Creditor	Counterparty	Relationship with the counterparty	Balance as at December 31, 2020	Turnover rate	Overdue receivables	Overdue receivables	Amount collected subsequent to the balance sheet date Expressed (Except a	Allowance for doubtful accounts in thousands of NTD s otherwise indicated)
					Amount	Action taken
Transcend Taiwan " Transcend Information (Shanghai), Ltd.	Transcend Japan Inc. Transtech Trading (Shanghai) Co., Ltd. Transcend Taiwan	Subsidiary of the Company Subsidiary of Memhiro Ultimate parent company	$ 139,509 171,902 411,299	4.31 4.88 -	$ - - 411,299	- - -	$ 139,509 137,788 -	- - -

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Transcend Information, Inc. and Subsidiaries

Significant inter-company transactions during the reporting year

Year ended December 31, 2020

Table 6

Expressed in thousands of NTD

Table 6						Expressed in thousands of NTD	Expressed in thousands of NTD
Number (Note 1)	Company name	Counterparty	Relationship (Note 2)			(Except as otherwise indicated) Transaction
				General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets(Note 3)
0 " " " " " " " " " 1	Transcend Taiwan " " " " " " " " " Transcend Information Europe B. V.	Transcend Japan Inc. Transcend Information Europe B. V. Transcend Information, Inc. Transcend Korea Inc. Transtech Trading (Shanghai) Co., Ltd. Transcend Information (H.K) Ltd. Transcend Information Trading GmbH, Hamburg Transcend Japan Inc. Transtech Trading (Shanghai) Co., Ltd. Transcend Information (Shanghai), Ltd. Transcend Information Trading GmbH, Hamburg	1 〞〞〞 `〞` 〞〞〞〞〞 3	Sales " " " " " " Accounts Receivable " Accounts Payable Sales	$ 733,397 507,995 508,954 270,427 707,893 235,845 427,917 139,509 171,902 411,299) ( 158,418	There is no significant difference in unit price from those to third parties. " " " " " " 120 days after monthly billings " " There is no significant difference in unit price from those to third parties.	`6` `4` `4` `2` `6` `2` `4` `1` `1` `2)` `(` `1`

(Individual transactions not exceeding 1% of the consolidated total revenue and total assets are not disclosed.)

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

(a) Parent company is "0".
(b) Subsidiaries were numbered from 1.

Note 2: Relationship between transaction company and counterparty is classified into the following three categories; fill in the number of category each case belongs to (If transactions between parent company and subsidiaries

or between subsidiaries refer to the same transaction, it is not required to disclose twice. For example, if the parent company has already disclosed its transaction with a subsidiary, then the subsidiary is not required to disclose the transaction; for transactions between two subsidiaries, if one of the subsidiaries has disclosed the transaction, then the other is not required to disclose the transaction.):

(a) Parent company to subsidiary.
(b) Subsidiary to parent company.
(c) Subsidiary to subsidiaries.

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

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Transcend Information, Inc. and Subsidiaries

Information on investees

Year ended December 31, 2020

Table 7

Expressed in thousands of NTD

(Except as otherwise indicated)

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held a	s at December 31, 2020	s at December 31, 2020	Net profit (loss) of the investee for the year ended December 31, 2020	Investment income (loss) recognized by the Company for the year ended December 31, 2020 `（`Note 1`）`	Footnote
				Balance as at December 31, 2020	Balance as at December 31, 2019	Number of shares	Ownership (%)	Book value
Transcend Taiwan Saffire Investment Ltd. Memhiro Pte Ltd.	Saffire Investment Ltd. Transcend Japan Inc. Transcend Information, Inc. Transcend Korea Inc. Taiwan IC Packaging Corp. Memhiro Pte Ltd. Transcend Information Europe B.V. Transcend Information Trading GmbH, Hamburg Transcend Information (H.K.) Ltd.	B.V.I. Japan United States of America Korea Taiwan Singapore Netherlands Germany Hong Kong	Investment holdings Wholesale of computer memory modules and peripheral Wholesale of computer memory modules and peripheral Wholesale of computer memory modules and peripheral Packaging of Semi-conductors Investment holdings Wholesale of computer memory modules and peripheral Wholesale of computer memory modules and peripheral Wholesale of computer memory modules and peripheral	$ 1,202,418 89,103 38,592 6,132 354,666 1,156,920 1,693 2,288 7,636	$ 1,202,418 89,103 38,592 6,132 354,666 1,156,920 1,693 2,288 7,636	36,600,000 6,400 625,000 40,000 21,928,036 55,132,000 100 - 2,000,000	100 100 100 100 12.74 100 100 100 100	1,563,437 $ 257,211 180,982 58,904 95,724 1,535,447 237,494 112,767 25,901	115,707) ($ 3,818 639 2,513) ( 11,040) ( 116,331) ( 3,399 6,983) ( 4,903	115,707) ($ 3,818 639 2,513) ( 1,299) ( 116,331) ( 3,401 6,983) ( 4,903	Note 2 Note 2 Note 2 Note 2 Note 5 Note 3 Note 4 Note 4 Note 4

Note 1: The Company does not directly recognize the investment income (loss) except for the subsidiaries directly held. Note 2: Subsidiary of the Company.

Note 3: Subsidiary of Saffire.

Note 4: Subsidiary of Memhiro.

Note 5: Please refer to Note 6 (7).

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Table 8 Investee in Mainland China	Main business activities	Paid-in capital	Investment method `（`Note 1`）`	Remitted to Mainland China Remitted back to Taiwan $ 1,134,178 - - $ 1,134,178 16,310 - - 16,310 Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2020 Transcend Information, Inc. and Subsidiaries Information on investments in Mainland China Accumulated amount of remittance from Taiwan to Mainland China as of December 31, 2020 Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the year ended December 31, 2020 Year ended December 31, 2020	Remitted to Mainland China Remitted back to Taiwan $ 1,134,178 - - $ 1,134,178 16,310 - - 16,310 Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2020 Transcend Information, Inc. and Subsidiaries Information on investments in Mainland China Accumulated amount of remittance from Taiwan to Mainland China as of December 31, 2020 Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the year ended December 31, 2020 Year ended December 31, 2020	Remitted to Mainland China Remitted back to Taiwan $ 1,134,178 - - $ 1,134,178 16,310 - - 16,310 Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2020 Transcend Information, Inc. and Subsidiaries Information on investments in Mainland China Accumulated amount of remittance from Taiwan to Mainland China as of December 31, 2020 Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the year ended December 31, 2020 Year ended December 31, 2020	Remitted to Mainland China Remitted back to Taiwan $ 1,134,178 - - $ 1,134,178 16,310 - - 16,310 Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2020 Transcend Information, Inc. and Subsidiaries Information on investments in Mainland China Accumulated amount of remittance from Taiwan to Mainland China as of December 31, 2020 Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the year ended December 31, 2020 Year ended December 31, 2020	Net income (loss) of investee for the year ended December 31, 2020	Ownership held by the Company (direct or indirect)	Investment income (loss) recognized by the Company for the year ended December 31, 2020 (Note 2)	Book value of investments in Mainland China as of December 31, 2020	$ 1,464,028 - - - Footnote Accumulated amount of investment income remitted back to Taiwan as of December 31, 2020 Expressed in thousands of NTD (Except as otherwise indicated)	$ 1,464,028 - - - Footnote Accumulated amount of investment income remitted back to Taiwan as of December 31, 2020 Expressed in thousands of NTD (Except as otherwise indicated)
					Remitted to Mainland China	Remitted back to Taiwan
Transcend Information (Shanghai), Ltd. Transtech Trading (Shanghai) Co., Ltd. Companyname	Manufacture and sales of computer memory modules, storage products and disks Wholesale, agent, import and export and retail of computer memory modules, storage products and computer components Accumulated amount of remittance from Taiwan to Mainland China as of December 31, 2020	$ 1,134,178 16,310 Investment amount approved by the Investment Commission of the Ministry of Economic Affairs (MOEA)	2 2 Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA	$ 1,134,178 16,310	- -	- -	$ 1,134,178 16,310	($ 89,936) 4,783	100 100	($ 89,936) 4,783	$ 1,132,669 37,098	$ 1,464,028 -	- -
Transcend Information (Shanghai), Ltd. Transtech Trading (Shanghai) Co., Ltd.	1,134,178 $ 16,310 1,150,488 $	1,134,178 $ 16,310 1,150,488 $	- $ - 11,203,216 $

Note 1: Investment methods are classified into the following three categories; fill in the number of category each case belongs to:

(1) Directly invest in a company in Mainland China.

(2) Through investing in an existing company in the third area (Memhiro Pte Ltd.), which then invested in Mainland China.

(3) Others.

Note 2: The financial statements were audited by R.O.C. parent company's CPA.

Note 3: The numbers in this table are expressed in New Taiwan Dollars.

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Transcend Information, Inc. and Subsidiaries

Major shareholders information

December 31, 2020

Table 9

Name of major shareholders	Number of shares held	Shareholdingratio
Won Chin Investment Inc. Wan An Technology Inc. Cheng Chuan Technology Development Inc. Wan Min Investment Inc. Wan Chuan Investment Inc.	74,783,600 33,480,854 32,971,701 29,711,397 29,505,896	17.42 7.80 7.68 6.92 6.87

~176~

6.5. Financial Statements of Parent Company Only for the Years Ended December 31, 2020 and 2019, and Independent Auditors’ Report

INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

PWCR20000144

To the Board of Directors and Shareholders of Transcend Information, Inc.

Opinion

We have audited the accompanying parent company only balance sheets of Transcend Information, Inc. as at December 31, 2020 and 2019, and the related parent company only statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the parent company only financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2020 and 2019, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for opinion

We conducted our audit of the parent company only financial statements as at and for the year ended December 31, 2020 in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and generally accepted auditing standards in the Republic of China; and in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants, Rule No. Financial-Supervisory-Securities-Auditing1090360805 issued by the Financial Supervisory Commission on February 25, 2020 and generally accepted auditing standards in the Republic of China for our audit of the parent company only financial statements as at and for the year ended December 31, 2019. Our responsibilities under those standards are further described in the Auditors’ responsibilities for the audit of the parent company only financial statements section of our report. We are independent of the Company in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

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Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the Company’s 2020 parent company only financial statements. These matters were addressed in the context of our audit of the parent company only financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

Key audit matters for the Company’s 2020 parent company only financial statements are stated as follows:

Evaluation of inventories

Description

Refer to Notes 4(12), 5(2) and 6(5) to the financial statements for the information on the Company’s inventory accounting policy, estimates and assumptions and allowance for inventory valuation losses.

The percentage of the Company’s inventories to total assets is material and the Company applies judgements and estimates in determining the net realizable value of inventories at the balance sheet date. The Company mainly produces DRAM and flash memory. As these products have a short life cycle and belong to a highly competitive industry, the market prices change frequently. Since the Company’s inventories and the allowance for inventory valuation losses are material to the financial statements, the evaluation of inventories has been identified as a key audit matter.

How our audit addressed the matter

We performed the following audit procedures in respect of the above key audit matter:

A. Obtained an understanding of the Company’s operations and industry. Assessed the reasonableness of the policy and procedures to recognize allowance for inventory valuation losses.
B. Obtained an understanding of the Company’s inventory control procedures. Reviewed annual inventory count plan and observed the annual physical count of inventory in order to assess the effectiveness of internal controls over inventory.
C. Obtained relevant evaluation reports of inventory and tested the logic and accuracy of information to assess the reasonableness of allowance for inventory valuation losses.

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Estimation of allowance for sales discount

Description

In consideration of business volume, the Company provides a variety of business incentives to specific customers or products, and based on that, the Company can estimate the allowance for sales discount monthly. Refer to Notes 4(23) and 6(4) to the parent company only financial statements for the information on the estimation of allowance for sales discount.

Since the contracts are numerous and the result could affect the net revenue in the parent company only financial statements, the estimation of allowance for sales discount has been identified as a key audit matter.

How our audit addressed the matter

We performed the following audit procedures in respect of the above key audit matter:

A. Obtained an understanding of the Company’s operations, industry and the procedures to recognize allowance for sales discount.
B. Obtained an understanding of the Company’s sales procedures and interviewed management to assess the appropriateness of sales allowance contracts and internal control over estimation of allowance.
C. Obtained the evaluation list of allowance for sales discount, and tested material sales allowance contracts and recalculated it to assess the reasonableness of allowance determined by the Company.

Responsibilities of management and those charged with governance for the parent company only financial statements

Management is responsible for the preparation and fair presentation of the parent company only financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and for such internal control as management determines is necessary to enable the preparation of parent company only financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the parent company only financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including the audit committee, are responsible for overseeing the Company’s financial reporting process.

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Auditors’ responsibilities for the audit of the parent company only financial statements

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

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

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F. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the parent company only financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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

==> picture [499 x 56] intentionally omitted <==

For and on behalf of PricewaterhouseCoopers, Taiwan

March 4, 2021

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

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TRANSCEND INFORMATION, INC.

PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan Dollars)

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December 31, 2020 December 31, 2019
Assets Notes AMOUNT % AMOUNT %
Current assets
Cash and cash equivalents 6(1) $ 399,574 2 $ 863,583 4
Financial assets at fair value through profit or 6(2)
loss - current 3,510,998 17 2,505,073 12
Current financial assets at amortised cost, net 6(3) 5,450,000 26 7,727,826 36
Notes receivable, net 6(4) 759 - 3,054 -
Accounts receivable, net 6(4) 810,648 4 898,707 4
Accounts receivable due from related parties, 7
net 404,360 2 454,776 2
Other receivables 70,135 - 106,252 1
Inventories, net 6(5) 3,075,423 14 1,967,896 9
Other current assets 916 - 5,220 -
Total Current Assets 13,722,813 65 14,532,387 68
Non-current assets
Non-current financial assets at fair value 6(2)
through profit or loss 744,922 4 - -
Non-current financial assets at fair value 6(6)
through other comprehensive income 111,000 1 114,164 1
Non-current financial assets at amortised cost 6(3) - - 148,527 1
Investments accounted for using equity method 6(7) 2,156,258 10 2,241,388 10
Property, plant and equipment, net 6(8) and 7 1,540,175 8 1,644,401 8
- -
Right-of-use assets 6(9) and 7 51,893 88,521
Investment property, net 6(11) 2,566,019 12 2,560,460 12
Deferred tax assets 6(23) 29,125 - 59,274 -
Other non-current assets 6(12) 27,473 - 43,977 -
Total Non-current Assets 7,226,865 35 6,900,712 32
Total Assets $ 20,949,678 100 $ 21,433,099 100
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(Continued)

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TRANSCEND INFORMATION, INC.

PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan Dollars)

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December 31, 2020 December 31, 2019
Liabilities and Equity Notes AMOUNT % AMOUNT %
Current liabilities
Accounts payable $ 1,132,016 6 $ 1,002,314 5
Accounts payable - related parties 7 450,706 2 457,364 2
Other payables 206,964 1 211,467 1
Other payables - related parties 7 17,564 - 17,308 -
Current tax liabilities 245,884 1 59,293 -
Current lease liabilities 7 36,815 - 36,235 -
Other current liabilities 24,572 - 26,754 -
Total Current Liabilities 2,114,521 10 1,810,735 8
Non-current liabilities
Deferred tax liabilities 6(23) 139,689 1 155,463 1
Non-current lease liabilities 7 - - 36,815 -
Other non-current liabilities 6(13) 23,442 - 23,238 -
Total Non-current Liabilities 163,131 1 215,516 1
Total Liabilities 2,277,652 11 2,026,251 9
Equity
Share capital 6(14)
Common stock 4,290,617 21 4,307,617 20
Capital surplus 6(15)
Capital surplus 3,945,369 19 4,346,854 20
Retained earnings 6(16)
Legal reserve 4,683,878 22 4,510,981 21
Special reserve 130,902 1 61,572 -
Unappropriated retained earnings 5,738,504 27 6,427,300 30
Other equity interest 6(17)
-
Other equity interest ( 117,244) ( 1) ( 130,902)
- - -
Treasury shares 6(14) ( 116,574)
Total Equity 18,672,026 89 19,406,848 91
Significant contingent liabilities and 9
unrecognized contract commitments
Significant events after the balance sheet date 11
Total Liabilities and Equity $ 20,949,678 100 $ 21,433,099 100
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The accompanying notes are an integral part of these parent company only financial statements.

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TRANSCEND INFORMATION, INC.

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan Dollars, except for earnings per share amount)

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Year ended December 31
2020 2019
Items Notes AMOUNT % AMOUNT %
Operating Revenue 6(18) and 7 $ 10,937,519 100 $ 12,860,887 100
Operating Costs 6(5)(22) and 7 ( 8,963,964) ( 82) ( 10,334,582) ( 80)
Gross Profit 1,973,555 18 2,526,305 20
- -
Unrealized profit from sales ( 16,106) ( 25,422)
- -
Realized profit from sales 25,422 20,596
Realized Gross Profit 1,982,871 18 2,521,479 20
Operating Expenses 6(22)
Sales and marketing expenses ( 296,598) ( 3) ( 318,545) ( 3)
Administrative expenses ( 236,753) ( 2) ( 189,031) ( 1)
Research and development expenses ( 133,356) ( 1) ( 142,601) ( 1)
Impairment loss determined in accordance 6(4)
with IFRS 9 ( 1,029) - ( 268) -
Total operating expenses ( 667,736) ( 6) ( 650,445) ( 5)
Operating Profit 1,315,135 12 1,871,034 15
Non-operating Income and Expenses
Interest income 6(19) 71,174 1 189,470 1
Other income 6(20) 38,721 - 35,352 -
Other gains and losses 6(21) and 7 134,937 1 ( 19,261) -
Net gain from derecognizing financial assets 6(3)
measured at amortized cost 17,210 - 20,552 -
Finance costs 6(9) ( 823) - ( 676) -
Share of loss of associates and joint ventures 6(7)
-
accounted for using equity method ( 115,062) ( 1) ( 52,432)
Total non-operating income and expenses 146,157 1 173,005 1
Profit before Income Tax 1,461,292 13 2,044,039 16
Income tax expense 6(23) ( 263,557) ( 2) ( 315,072) ( 3)
Profit for the Year $ 1,197,735 11 $ 1,728,967 13
Other Comprehensive Income (Loss)
Components of other comprehensive
income (loss) that will not be reclassified to
profit or loss
(Losses) gains on remeasurements of defined 6(13)
benefit plans ($ 1,072) - $ 724 -
Unrealized (loss) gain on financial assets at 6(6)(17)
fair value through other comprehensive
income ( 3,164) - 27,976 -
Share of other comprehensive (loss) income of
associates and joint ventures accounted for
using equity method ( 411) - 479 -
Components of other comprehensive
income (loss) that will be reclassified to
profit or loss
Exchange differences on translation of foreign 6(7)(17)
financial statements 21,027 - ( 76,620) -
Income tax related to components of other 6(17)(23)
comprehensive income that will be
- -
reclassified to profit or loss ( 4,205) 15,324
Other comprehensive income (loss) for the
year $ 12,175 - ($ 32,117) -
Total Comprehensive Income $ 1,209,910 11 $ 1,696,850 13
Earnings Per Share (in dollars) 6(23)
Basic earnings per share $ 2.79 $ 4.01
Diluted earnings per share $ 2.79 $ 4.01
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The accompanying notes are an integral part of these parent company only financial statements.

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TRANSCEND INFORMATION, INC. PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan Dollars)

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Capital Surplus Retained Earnings Other Equity Interest
Unrealized gain or
Exchange loss on financial
differences on assets at fair value
translation of through other
Additional paid-in Donated assets Net assets from Unappropriated foreign financial comprehensive
Notes Common stock capital received merger Legal reserve Special reserve retained earnings statements income Treasury shares Total equity
Year ended December 31, 2019
Balance at January 1, 2019 $ 4,307,617 $ 4,565,999 $ 4,106 $ 35,128 $ 4,302,782 $ 47,247 $ 6,778,995 ($ 77,165 ) $ 15,593 $ - $ 19,980,302
Net income for the year - - - - - - 1,728,967 - - - 1,728,967
Other comprehensive income (loss) 6(6)(17) - - - - - - 1,203 ( 61,296 ) 27,976 - ( 32,117 )
Total comprehensive income (loss) - - - - - - 1,730,170 ( 61,296 ) 27,976 - 1,696,850
Appropriation and distribution of 2018 6(16)
earnings
Legal reserve - - - - 208,199 - ( 208,199 ) - - - -
Cash dividends - - - - - - ( 1,895,351 ) - - - ( 1,895,351 )
Special reserve - - - - - 14,325 ( 14,325 ) - - - -
Cash payment from capital surplus 6(16) - ( 258,458 ) - - - - - - - - ( 258,458 )
Net gain on disposal of financial assets at 6(6)(17)
fair value through other comprehensive
income - - - - - - 36,010 - ( 36,010 ) - -
Expired unclaimed dividends recognized
as capital surplus - - 79 - - - - - - - 79
Purchase of treasury stock - - - - - - - - - ( 116,574 ) ( 116,574 )
Balance at December 31, 2019 $ 4,307,617 $ 4,307,541 $ 4,185 $ 35,128 $ 4,510,981 $ 61,572 $ 6,427,300 ($ 138,461 ) $ 7,559 ($ 116,574 ) $ 19,406,848
Year ended December 31, 2020
Balance at January 1, 2020 $ 4,307,617 $ 4,307,541 $ 4,185 $ 35,128 $ 4,510,981 $ 61,572 $ 6,427,300 ($ 138,461 ) $ 7,559 ($ 116,574 ) $ 19,406,848
Net income for the year - - - - - - 1,197,735 - - - 1,197,735
Other comprehensive income (loss) 6(6)(17) - - - - - - ( 1,483 ) 16,822 ( 3,164 ) - 12,175
Total comprehensive income (loss) - - - - - - 1,196,252 16,822 ( 3,164 ) - 1,209,910
Appropriation and distribution of 2019 6(16)
earnings
Legal reserve - - - - 172,897 - ( 172,897 ) - - - -
Cash dividends - - - - - - ( 1,544,622 ) - - - ( 1,544,622 )
Special reserve - - - - - 69,330 ( 69,330 ) - - - -
Cash payment from capital surplus 6(16) - ( 386,156 ) - - - - - - - - ( 386,156 )
Expired unclaimed dividends recognized
as capital surplus - - 93 - - - - - - - 93
Purchase of treasury stock - - - - - - - - - ( 14,047 ) ( 14,047 )
Cancellation of treasury stock 6(14) ( 17,000 ) ( 15,422 ) - - - - ( 98,199 ) - - 130,621 -
Balance at December 31, 2020 $ 4,290,617 $ 3,905,963 $ 4,278 $ 35,128 $ 4,683,878 $ 130,902 $ 5,738,504 ($ 121,639 ) $ 4,395 $ - $ 18,672,026
----- End of picture text -----

The accompanying notes are an integral part of these parent company only financial statements.

~185~

TRANSCEND INFORMATION, INC. PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax
Adjustments
Adjustments to reconcile profit (loss)
Unrealized profit from sales
Realized profit from sales
Net (gain) loss on financial assets at fair value through profit or loss
Share of loss of associates and joint ventures accounted for using equity
method
Expected credit loss
Depreciation
Interest income
Interest expense
Dividend income
Loss on disposal of property, plant and equipment
Changes in operating assets and liabilities
Changes in operating assets
Financial assets mandatorily measured at fair value through profit or
loss
Notes receivable
Accounts receivable
Accounts receivable - related parties
Other receivables
Inventories
Other current assets
Changes in operating liabilities
Accounts payable
Accounts payable - related parties
Other payables
Other payables - related parties
Other current liabilities
Other non-current liabilities
Cash (outflow) inflow generated from operations
Dividends received
Interest received
Income tax paid
Net cash flows (used in) from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of non-current financial assets at fair value through profit or loss
Proceeds from disposal of financial assets at amortised cost
Acquisition of financial assets at amortised cost
Proceeds from disposal of financial assets at fair value through other
comprehensive income
Proceeds from disposal of property, plant and equipment
Acquisition of property, plant and equipment
Acquisition of investment property
Decrease in other non-current financial assets
Net cash flows from investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Cash dividends paid (including cash payment from capital surplus)
Repayment of lease liabilities
Expired unclaimed dividends recognized as capital surplus
Purchase of treasury stock
Net cash flows used in financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

Year ended December 31
Notes
2020
2019
$ 1,461,292
$ 2,044,039
16,106
25,422
(
25,422 )
(
20,596 )
6(2)(21)
(
146,883 )
9,650
6(7)
115,062
52,432
6(4)
1,029
268
6(22)
170,349
170,840
6(19)
(
71,174 )
(
189,470 )
6(9)
823
676
6(6)(20)
(
3,834 )
(
5,019 )
6(21)
2,098
113
(
992,901 )
(
2,514,723 )
2,295
(
2,182 )
87,030
538,256
50,416
105,059
27,074
(
43,764 )
(
1,107,527 )
1,077,844
4,304
(
3,454 )
129,702
(
178,642 )
(
6,658 )
(
3,942 )
(
4,503 )
(
23,399 )
256
433
21,142
(
262 )
(
868 )
(
938 )
(
270,792 )
1,038,641
3,834
5,019
80,217
205,261
(
66,796 )
(
380,069 )
(
253,537 )
868,852
(
611,063 )
-
6,226,353
6,457,566
(
3,800,000 )
(
5,249,188 )
6(6)
-
76,967
-
1,600
6(8)
(
23,654 )
(
66,990 )
(
1,082 )
-
4,088
6,918
1,794,642
1,226,873
6(16)
(
1,930,778 )
(
2,153,809 )
(
37,058 )
(
37,512 )
93
79
(
37,371 )
(
93,250 )
(
2,005,114 )
(
2,284,492 )
(
464,009 )
(
188,767 )
863,583
1,052,350
$ 399,574
$ 863,583

The accompanying notes are an integral part of these parent company only financial statements.

~186~

TRANSCEND INFORMATION, INC.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS DECEMBER 31, 2020 AND 2019

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

1. HISTORY AND ORGANIZATION

Transcend Information, Inc. (the “Company”) was incorporated under the provisions of the Company Law of the Republic of China (R.O.C.) in August 1989. The main activities of the Company are manufacturing, processing and sales of computer software and hardware, peripheral equipment and other computer components. The Securities and Futures Commission of the Republic of China had approved the Company’s shares to be listed on the Taiwan Stock Exchange and the shares started trading on May 3, 2001.

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

STATEMENTS AND PROCEDURES FOR AUTHORIZATION

These parent company only financial statements were authorized for issuance by the Board of Directors on March 4, 2021.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

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

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

	New Standards,InterpretationsandAmendments Amendments to IAS 1 and IAS 8, ‘Disclosure initiative-definition of material’ Amendments to IFRS 3, ‘Definition of a business’ Amendments to IFRS 9, IAS 39 and IFRS 7, ‘Interest rate benchmark reform’ Amendment to IFRS 16, ‘Covid-19-related rent concessions’	Effective date by International Accounting StandardsBoard
		January 1, 2020 January 1, 2020 January 1, 2020 June 1, 2020 (Note)

Note: Earlier application from January 1, 2020 is allowed by the FSC.

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

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

the Company

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

follows:
NewStandards,Interpretations and Amendments Amendments to IFRS 4, ‘Extension of the temporary exemption from applying IFRS 9’ Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16, ‘Interest Rate Benchmark Reform— Phase 2’	Effective date by International Accounting Standards Board
	January 1, 2021 January 1, 2021

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

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

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

endorsed by the FSC are as follows:

New Standards,Interpretations and Amendments
Amendments to IFRS 3, ‘Reference to the conceptual framework’
Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets
between an investor and its associate or joint venture’
IFRS 17, ‘Insurance contracts’
Amendments to IFRS 17, ‘Insurance contracts’
Amendments to IAS 1, ‘Classification of liabilities as current or non-
current’
Amendments to IAS 1, ‘Disclosure of accounting policies’
Amendments to IAS 8, ‘Definition of accounting estimates’
Amendments to IAS 16, ‘Property, plant and equipment:
proceeds before intended use’
Amendments to IAS 37, ‘Onerous contracts - cost of fulfilling a contract’
Annual improvements to IFRS Standards 2018-2020

Effective date
by International
Accounting
Standards Board

January 1, 2022
To be determined
by International
Accounting
Standards Board
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2022
January 1, 2022
January 1, 2022

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

~188~

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these parent company only financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

(1)Compliance statement

The parent company only financial statements of the Company have been prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”.

(2)Basis of preparation
A. Except for the following items, the financial statements have been prepared under the historical cost convention:
- (a) Financial assets at fair value through profit or loss.
- (b) Financial assets at fair value through other comprehensive income.
- (c) Defined benefit liabilities recognized based on the net amount of pension fund assets less present value of defined benefit obligations.
B. The preparation of financial statements in conformity with International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the “IFRSs”) requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 5.

(3)Foreign currency translation

The financial statements are presented in New Taiwan dollars, which is the Company’s functional and the Company’s presentation currency.

A. Foreign currency transactions and balances
(a) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognized in profit or loss in the period in which they arise.
(b) Monetary assets and liabilities denominated in foreign currencies at the period end are retranslated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognized in profit or loss.
(c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in other comprehensive income. However, nonmonetary assets and liabilities denominated in foreign currencies that are not measured at fair

~189~

value are translated using the historical exchange rates at the dates of the initial transactions.

(d) All other foreign exchange gains and losses based on the nature of those transactions are presented in the statement of comprehensive income within‘other gains and losses’.
B. Translation of foreign operations
The operating results and financial position of all the group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
(a) Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;
(b) Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and
(c) All resulting exchange differences are recognized in other comprehensive income.

(4)Classification of current and non-current items

A. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:
(a) Assets arising from operating activities that are expected to be realized, or are intended to be sold or consumed within the normal operating cycle;
(b) Assets held mainly for trading purposes;
(c) Assets that are expected to be realized within twelve months from the balance sheet date;
(d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to settle liabilities more than twelve months after the balance sheet date.
B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:
(a) Liabilities that are expected to be settled within the normal operating cycle;
(b) Liabilities arising mainly from trading activities;
(c) Liabilities that are to be settled within twelve months from the balance sheet date;
(d) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

(5)Cash equivalents

Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

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

A. Financial assets at fair value through profit or loss are financial assets that are not measured at amortised cost or fair value through other comprehensive income.

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B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognized and derecognized using trade date accounting.
C. At initial recognition, the Company measures the financial liabilities at fair value. All related transaction costs are recognized in profit or loss. The Company subsequently measures these financial liabilities at fair value with any gain or loss recognized in profit or loss.
(7)Financial assets at fair value through other comprehensive income
A. Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Company has made an irrevocable election at initial recognition to recognize changes in fair value in other comprehensive income.
B. On a regular way purchase or sale basis, financial assets at fair value through other comprehensive income are recognized and derecognized using trade date accounting. (Irrevocable election is separately classified, and needs to be disclosed when there is various election).
C. At initial recognition, the Company measures the financial assets at fair value plus transaction costs. The Company subsequently measures the financial assets at fair value: The changes in fair value of equity investments that were recognized in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the derecognition of the investment. Dividends are recognized as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Company and the amount of the dividend can be measured reliably.

(8)Financial assets at amortised cost

A. Financial assets at amortised cost are those that meet all of the following criteria:
(a) The objective of the Company’s business model is achieved by collecting contractual cash flows.
(b) The assets’ contractual cash flows represent solely payments of principal and interest.
B. On a regular way purchase or sale basis, financial assets at amortised cost are recognized and derecognized using trade date accounting.
C. At initial recognition, the Company measures the financial assets at fair value plus transaction costs. Interest income from these financial assets is included in finance income using the effective interest method. A gain or loss is recognized in profit or loss when the asset is derecognized or impaired.

(9)Accounts and notes receivable

A. Accounts and notes receivable entitle the Company a legal right to receive consideration in exchange for transferred goods or rendered services.
B. The short-term accounts and notes receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

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(10)Financial assets impairment

For debt instruments measured at fair value through other comprehensive income and financial assets at amortised cost including accounts receivable that have a significant financing component, at each reporting date, the Company recognizes the impairment provision for 12 months expected credit losses if there has not been a significant increase in credit risk since initial recognition or recognizes the impairment provision for the lifetime expected credit losses (ECLs) if such credit risk has increased since initial recognition after taking into consideration all reasonable and verifiable information that includes forecasts. On the other hand, for accounts receivable or contract assets that do not contain a significant financing component, the Company recognizes the impairment provision for lifetime ECLs.

(11)Derecognition of financial assets

The Company derecognizes a financial asset when the contractual rights to receive the cash flows from the financial asset expire.

(12)Inventories

(13)Investments accounted for using equity method-subsidiaries and associates

A. Subsidiaries are all entities (including structured entities) controlled by the Company. The Company controls an entity when the Company is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
B. Unrealized gains on transactions between the Company and its subsidiaries are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Company.
C. The Company’s share of its subsidiaries’ post-acquisition profits or losses is recognized in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income. When the Company’s share of losses in a subsidiary equals or exceeds its interest in the subsidiary, the Company continues to recognize losses proportionate to its ownership.
D. Associates are all entities over which the Company has significant influence but not control. In general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly 20 percent or more of the voting power of the investee. Investments in associates are accounted for using the equity method and are initially recognized at cost.

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E. The Company’s share of its associates’ post-acquisition profits or losses is recognized in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income. When the Company’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Company does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.
F. When changes in an associate’s equity do not arise from profit or loss or other comprehensive income of the associate and such changes do not affect the Company’s ownership percentage of the associate, the Company recognizes change in ownership interests in the associate in ‘capital surplus’ in proportion to its ownership.
G. Unrealized gains on transactions between the Company and its associates are eliminated to the extent of the Company’s interest in the associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been adjusted where necessary to ensure consistency with the policies adopted by the Company.
H. In the case that an associate issues new shares and the Company does not subscribe or acquire new shares proportionately, which results in a change in the Company’s ownership percentage of the associate but maintains significant influence on the associate, then ‘capital surplus’ and ‘investments accounted for under the equity method’ shall be adjusted for the increase or decrease of its share of equity interest. If the above condition causes a decrease in the Company’s ownership percentage of the associate, in addition to the above adjustment, the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately on the same basis as would be required if the relevant assets or liabilities were disposed of.
I. When the Company disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognized in other comprehensive income in relation to the associate, are reclassified to profit or loss, on the same basis as would be required if the relevant assets or liabilities were disposed of. If it retains significant influence over this associate, the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately in accordance with the aforementioned approach.
J. Pursuant to the “Regulations Governing the Preparation of Financial Reports by Securities Issuers,” profit (loss) of the current period and other comprehensive income in the nonconsolidated financial statements shall equal to the amount attributable to owners of the parent in the financial statements prepared with basis for consolidation. Owners’ equity in the nonconsolidated financial statements shall equal to equity attributable to owners of the parent in the financial statements prepared with basis for consolidation.

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(14)Property, plant and equipment

A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalized.
B. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.
C. Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.
D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change. The estimated useful lives of property, plant and equipment are as follows:

Buildings and structures 8 ~ 50 years Machinery and equipment 2 ~ 10 years Transportation equipment 3 ~ 5 years Office equipment and others 2 ~ 5 years

(15)Leasing arrangements (lessee) - right-of-use assets/ lease liabilities

A. Leases are recognized as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Company. For short-term leases or leases of low-value assets, lease payments are recognized as an expense on a straight-line basis over the lease term.
B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. Lease payments are comprised of the following:
(a) Fixed payments, less any lease incentives receivable; and
(b) Variable lease payments that depend on an index or a rate.
The Company subsequently measures the lease liability at amortized cost using the interest method and recognizes interest expense over the lease term. The lease liability is remeasured and the amount of remeasurement is recognized as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.

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C. At the commencement date, the right-of-use asset is stated at cost comprising the amount of the initial measurement of lease liability.

(16)Investment property

(17)Impairment of non-financial assets

The Company assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. When the circumstances or reasons for recognizing impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortised historical cost would have been if the impairment had not been recognized.

(18)Notes and accounts payable

(19)Employee benefits

A. Short-term employee benefits

B. Pensions

(a) Defined contribution plan

For the defined contribution plan, the contributions are recognized as pension expenses when they are due on an accrual basis. Prepaid contributions are recognized as an asset to the extent of a cash refund or a reduction in the future payments.

(b) Defined benefit plan

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i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Company in current period or prior periods. The liability recognized in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of government bonds (at the balance sheet date) of a currency and term consistent with the currency and term of the employment benefit obligations.
ii. Remeasurements arising on defined benefit plan are recognized in other comprehensive income in the period in which they arise and are recorded as retained earnings.
iii. Past service costs are recognized immediately in profit or loss.
C. Employees’ compensation and directors’ and supervisors’ remuneration Employees’ compensation and directors’ and supervisors’ remuneration are recognized as expense and liability, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates.

(20)Income tax

A. The tax expense for the period comprises current and deferred tax. Tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or items recognized directly in equity, in which cases the tax is recognized in other comprehensive income or equity.
B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.
C. Deferred tax is recognized, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated balance sheet. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realized or the deferred tax liability is settled.
D. Deferred tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. At each balance sheet date, unrecognized and recognized deferred tax assets are reassessed.

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E. A deferred tax asset shall be recognized for the carryforward of unused tax credits resulting from acquisitions of equipment or technology and research and development expenditures to the extent that it is possible that future taxable profit will be available against which the unused tax credits can be utilized.
(21)Share capital
A. Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or stock options are shown in equity as a deduction, net of tax, from the proceeds.
B. Where the Company repurchases the Company’s shares that have been issued, the consideration paid, excluding any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the Company’s equity holders.
(22)Dividends

(23)Revenue recognition

A. Sales of goods
(a) The Company manufactures and sells computer software and hardware, computer peripheral equipment, and computer component products. When the right of control is transferred to the customer, sales revenue is recognized. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, or the Company has objective evidence that all criteria for acceptance have been satisfied.
(b) Sales revenue is recognized based on the contract price, net of sales returns, volume discounts and estimated sales discount and allowances. The goods are often sold with volume discounts based on aggregate sales over a one-month period. Sales discounts and allowances are estimated and provided for based on customer contracts, and revenue is only recognized to the extent that it is highly probable that a significant reversal will not occur. The estimation is subject to an assessment at each reporting date and recognized as allowance for sales discounts. No element of financing is deemed present as the sales are made with a credit term of 30-60 days after monthly billing, which is consistent with market practice.
(c) A receivable is recognized when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.
B. Incremental costs of obtaining a contract

Given that the contractual period lasts less than one year, the Company recognizes the incremental costs of obtaining a contract as an expense when incurred although the Company expects to recover those costs.

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5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF

ASSUMPTION UNCERTAINTY

The preparation of these parent company only financial statements requires management to make critical judgements in applying the Company’s accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. Such assumptions and estimates have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year; and the related information is addressed below:

(1)Critical judgements in applying the Company’s accounting policies

Investment property
The Company uses a portion of the property for its own use and another portion to earn rentals or for capital appreciation. When these portions cannot be sold separately and cannot be leased out separately under a finance lease, the property is classified as investment property only if the own use portion accounts for an insignificant portion of the property.

(2)Critical accounting estimates and assumptions

Evaluation of inventories
As inventories are stated at the lower of cost and net realizable value, the Company must determine the net realizable value of inventories on balance sheet date using judgements and estimates. Due to the rapid technology innovation, the Company evaluates the amounts of normal inventory consumption, obsolete inventories or inventories without market selling value on balance sheet date, and writes down the cost of inventories to the net realizable value. The valuation of inventories is based on recent market price and demand of products in the future specific period, thus there might be significant changes in the valuation. As of December 31, 2020, the carrying amount of inventories is $3,075,423.

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1)Cash and cash equivalents

Cash on hand and petty cash Checking accounts and demand deposits	December 31,2020 677 $ 398,897 399,574 $	December 31,2019
		520 $ 863,063
		863,583 $

A. The Company 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 Company has no cash and cash equivalents pledged to others.

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(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 certificates Valuation adjustments Non-current items: Financial assets mandatorily measured at fair value through profit or loss Beneficiary certificates Valuation adjustments	December 31,2020 3,501,229 $ 9,769 3,510,998 $ 611,063 $ 133,859 744,922 $	December 31,2019
		2,499,764 $ 5,309
		2,505,073 $
		- $ -
		- $

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

Beneficiary certificates Non-hedging derivatives	Years ended December 31,	Years ended December 31,
	2020 145,108 $ 1,775 146,883 $	2019
		6,426 $ 16,076) (
		9,650) ($

B. The Company has no financial assets at fair value through profit or loss pledged to others.

(3)Financial assets at amortised cost

Items Current items: Time deposits with original maturity of more than three months Bonds with repurchase agreement Non-current items: Foreign currency bonds	December 31,2020 5,450,000 $ - 5,450,000 $ - $	December 31,2019
		6,660,680 $ 1,067,146
		7,727,826 $
		148,527 $

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

below:
Interest income Gain on disposal	Years endedDecember31,
	2020 63,217 $ 17,210 80,427 $	2019
		182,539 $ 20,552
		203,091 $

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B. The Company has no financial assets at amortised cost pledged to others as collateral.
C. The Company used the forecastability of Taiwan Institute of Economic Research boom observation report to adjust historical and timely information to assess the default possibility of debt instruments on December 31, 2020 and 2019, and considered guarantee for repurchase agreement held by the Company to estimate expected credit loss. The Company does not expect material credit loss after assessment.
D. The Company transacts time deposits with reputable domestic and foreign banks, and the counterparties of the debt instrument investments are Yuanta Asset Management Limited, Yuanta Securities Co., Ltd., International Bills Finance Corporation, Standard Chartered Bank, and BNP Paribas. The Company’s counterparties have good credit quality, and the impairment loss is assessed using a 12-month expected credit loss approach.

(4)Notes and accounts receivable

Notes receivable Accounts receivable Less: Loss allowance (	December 31,2020 759 $ December31,2020 812,398 $ 1,750) ( 810,648 $	December 31,2019
		3,054 $
		December31,2019
		900,740 $ 2,033)
		898,707 $

A. As of December 31, 2020 and 2019, the estimated sales discounts and allowances were $41,562 and $50,440, re spectively. Since the sales discounts and allowances met the requirements for offset of financial liabilities and financial assets, the net amounts were shown under accounts receivable.
B. The ageing analysis of accounts receivable and notes receivable is as follows:

Not past due Up to 30 days 31 to 90 days 91 to 180 days Over 180 days	December	31,2020
	Accounts receivable 678,549 $ 126,678 4,114 - 3,057 812,398 $	Notes receivable
		759 $ - - - -
		759 $

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Not past due Up to 30 days 31 to 90 days 91 to 180 days Over 180 days	December	31,2019
	Accounts receivable 719,946 $ 167,707 5,038 - 8,049 900,740 $	Notes receivable
		3,054 $ - - - -
		3,054 $

The above ageing analysis was based on past due date.

C. The Company has credit insurance that covers accounts receivable from major customers. Should bad debts occur, the Company will receive 90% of the losses resulting from non-payment.
D. As of December 31, 2020 and 2019, notes receivable and accounts receivable were all from contracts with customers. As of January 1, 2019, the balance of notes receivable and accounts receivable from contracts with customers amounted to $1,457,261.
E. As at December 31, 2020 and 2019, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the Company’s notes receivable were $759 and $3,054, respectively; the maximum exposure to credit risk in respect of the amount that best represents the Company’s accounts receivable were $810,648 and $898,707, respectively.
F. The Company classifies customers’ accounts receivable in accordance with the credit rating of the customer. The Company applies the simplified approach to estimate expected credit loss under the provision matrix basis.
G. The Company wrote-off the financial assets, which cannot reasonably be expected to be recovered, after initiating recourse procedures. However, the Company will continue executing the recourse procedures to secure their rights. On December 31, 2020 and 2019, the Company has no written-off financial assets that are still under recourse procedures.
H. The Company used forecastability, historical and timely information to assess the loss rate of accounts receivable. On December 31, 2020 and 2019, the provision matrix is as follows:

December 31, 2020 Expected loss rate Total book value December 31, 2019 Expected loss rate Total book value	Not past due 0.008% 678,549 $ Not past due 0.011% 719,946 $	1-180 days past due 0.04%~14.60% 130,792 $ 1-180 days past due 0.06%~17.43% 172,745 $	Over 180 days past due 25%~100% 3,057 $ Over 180 days past due 25%~100% 8,049 $	Total
				812,398 $ Total
				900,740 $

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I. The balance of allowance for loss and movements are as follows:

			2020	2020
		Accounts	receivable		Notesreceivable
At January 1		$	2,033	$	-
Provision for impairment			1,134		-
Reclassified to overdue receivables	(		178)		-
Reclassified to other income	(		1,134)		-
Effect of exchange rate changes	(		105)		-
At December 31		$	1,750	$	-
			2019
		Accounts	receivable		Notesreceivable
At January 1		$	19,158	$	-
Reclassified to overdue receivables	(		17,393)		-
Effect of exchange rate changes			268		-
At December 31		$	2,033	$	-

J. The Company does not hold any collateral as security.

(5)Inventories

Raw materials Work in progress Finished goods Raw materials Work in progress Finished goods		December 31,2020
	Allowance for Cost valuation loss 2,161,744 $ 28,593) ($ 487,023 1,023) ( 461,818 5,546) ( 3,110,585 $ 35,162) ($ December 31,2019		Book value
			2,133,151 $ 486,000 456,272
			3,075,423 $

	Allowance for Cost valuation loss 1,301,090 $ 25,263) ($ 335,478 471) ( 359,901 2,839) ( 1,996,469 $ 28,573) ($		Book value
			1,275,827 $ 335,007 357,062
			1,967,896 $

A. The cost of inventories recognized as expense for the year:

Cost of goods sold Revenue from disposal of scraps Loss on (gain on reversal of) decline in market value of inventory	2020 2019 8,957,375 $ 10,403,949 $ - 19,041) ( 6,589 50,326) ( 8,963,964 $ 10,334,582 $ Years endedDecember31,

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The gain on reversal of decline in market value of inventory for the year ended December 31, 2019 was due to the Company’s disposal of slow-moving inventory.

B. No inventories were pledged to others.
(6)Non-current financial assets at fair value through other comprehensive income

Items Non-current items: Equity instruments Listed stocks Others Valuation adjustments	December 31,2020 105,480 $ 1,125 106,605 4,395 111,000 $	December 31,2019
		105,480 $ 1,125
		106,605 7,559
		114,164 $

A. The Company has elected to classify equity investments that are considered to be strategic investments as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $111,000 and $114,164 as at December 31, 2020 and 2019, respectively.
B. For the years ended December 31, 2020 and 2019, the Company disposed equity investments whose fair value was $0 and $76,711, respectively, and accumulated gain on disposal was transferred into retained earnings in the amount of $0 and $36,010, respectively.
C. For the years ended December 31, 2020 and 2019, the Company’s cost recovery of equity instruments were $0 and $256, respectively.
D. Amounts recognized in profit or loss and other comprehensive income in relation to the financial assets at fair value through other comprehensive income are listed below:

Equity instruments at fair value through other comprehensive income Fair value change recognized in other comprehensive (loss) income ( Cumulative gains reclassified to retained earnings due to derecognition Dividend income recognized in profit or loss Held at end of year Derecognized during the year	Years ended December 31,	Years ended December 31,
	2020 3,164) $ - $ 3,834 $ - 3,834 $	2019
		27,976 $

		36,010 $
		3,028 $ 1,991
		5,019 $

E. The Company has no financial assets at fair value through other comprehensive income pledged to others as collateral.

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(7)Investments accounted for using equity method

			2020			2019
At January 1		$	2,241,388		$	2,374,787
Share of profit or loss of investments accounted	(		115,062)	(		52,432)
for using equity method
Decrease (increase) in unrealised profit from			9,316	(		4,826)
sales
Other comprehensive income	(		411)			479
Changes in other equity items (Note 6(17))			21,027	(		76,620)
At December 31		$	2,156,258		$	2,241,388
Investees		December31,2020			December31,2019
Subsidiaries:
Saffire Investment Ltd.		$	1,563,437		$	1,650,675
Transcend Japan Inc.			257,211			244,165
Transcend Information Inc.			180,982			188,523
Transcend Korea Inc.			58,904			60,591
Associates:
Taiwan IC Packaging Corp.			95,724			97,434
		$	2,156,258		$	2,241,388

A. Subsidiaries

Please refer to Note 4(3) in the consolidated financial statements for the year ended December 31, 2020 for the information regarding the Company’s subsidiaries.

B. Associates

(a) The basic information of the associate that is material to the Company is as follows:

Associate name Taiwan IC Packaging Corp.	Principal place of business Taiwan	December December 31,2020 31,2019 12.74% 12.74% Shareholdingratio	Nature of relationship Note	Method of measurement
		December 31,2020 12.74%
				Equity method

Note: Taiwan IC Packaging Corp. is engaged in IC packaging and testing and is the upstream supplier in the IT and semiconductor industries. In order to reach synergy of vertical integration, Taiwan IC Packaging Corp. processes the raw materials provided by the Company into relevant semi-finished goods.
(b) The Company held a 12.74% equity interest in Taiwan IC Packaging Corp., and is the company’s largest single shareholder. However, the Company does not hold the majority of the voting power during the shareholders’ meeting of Taiwan IC Packaging Corp. and the Company has no seat in the Board of Directors of Taiwan IC Packaging Corp., which indicate that the Company has no control ability to direct the relevant activities of Taiwan IC Packaging Corp. In addition, the Company’s chairman is the same with Taiwan IC Packaging Corp.;

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hence, the Company has significant influence over Taiwan IC Packaging Corp.

Balance sheet

follows: Balance sheet
		Taiwan ICPackaging Corp.
	December31,2020		December31,2019
Current assets	$	942,507	$	902,115
Non-current assets		1,224,429		1,187,726
Current liabilities	(	327,211)	(	237,849)
Non-current liabilities	(	85,765)	(	88,566)
Total net assets	$	1,753,960	$	1,763,426
Share in associate’s net assets	$	223,480	$	224,686
Net equity differences	(	127,756)	(	127,252)
	$	95,724	$	97,434

Statement of comprehensive income

Statement of comprehensive income
A Revenue Loss for the year from continuing operations ( Total comprehensive loss ( Dividends received from associates	2020 2019 1,210,125 $ 1,181,337 $ 11,040) $ 47,432) ($ 9,466) $ 50,660) ($ - $ - $ Taiwan ICPackaging Corp. Years ended December 31,
	2020 1,210,125 $ 11,040) $ ( 9,466) $ ( - $

(d) Share of loss of associates accounted for using the equity method is as follows:

Investee Company Taiwan IC Packaging Corp.	2020 2019 1,299) ($ 8,367) ($ Years endedDecember31,
	2020 1,299) ($

(e) The Company’s investment in Taiwan IC Packaging Corporation has quoted market price. The fair value of Taiwan IC Packaging Corporation was $239,053 and $187,366 as of December 31, 2020 and 2019, respectively.

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(8)Property, plant and equipment

At January 1 Cost Accumulated depreciation Opening net book amount as at January 1 Additions (including transfers) Disposals Depreciation charge Closing net book amount as at December 31 At December 31 Cost Accumulated depreciation				2020
	Land 601,268 $ - ( 601,268 $ 601,268 $ - - - ( 601,268 $ 601,268 $ - ( 601,268 $	Buildings and structures Machinery 1,209,742 $ 449,670 $ 424,360) 221,364) ( ( 785,382 $ 228,306 $ 785,382 $ 228,306 $ 890 13,616 - 2,098) ( 45,706) 68,740) ( ( 740,566 $ 171,084 $ 1,207,688 $ 389,642 $ 467,122) 218,558) ( ( 740,566 $ 171,084 $		Vehicles 20,761 $ 5,734) ( 15,027 $ 15,027 $ 1,348 - 3,581) ( 12,794 $ 22,109 $ 9,315) ( 12,794 $	Office equipment 4,802 $ 3,346) ( 1,456 $ 1,456 $ 1,290 - 867) ( 1,879 $ 4,691 $ 2,812) ( 1,879 $

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2019

At January 1 Cost Accumulated depreciation Opening net book amount as at January 1 Additions (including transfers) Disposals Depreciation charge Closing net book amount as at December 31 At December 31 Cost Accumulated depreciation	Land 601,268 $ - 601,268 $ 601,268 $ - - - 601,268 $ $ 601,268 - 601,268 $	Buildings and structures Machinery 1,203,530 $ 435,384 $ 381,942) ( 179,657) ( 821,588 $ 255,727 $ 821,588 $ 255,727 $ 9,197 50,051 - 1,713) ( 45,403) ( 75,759) ( 785,382 $ 228,306 $ $ 1,209,742 $ 449,670 424,360) ( 221,364) ( 785,382 $ 228,306 $	Vehicles 17,980 $ 2,699) ( 15,281 $ 15,281 $ 2,781 - 3,035) ( 15,027 $ $ 20,761 5,734) ( 15,027 $	Office equipment 5,752 $ 3,321) ( 2,431 $ 2,431 $ - - 975) ( 1,456 $ $ 4,802 3,346) ( 1,456 $	Others Total 35,081 $ 2,298,995 $ 18,677) ( 586,296) ( 16,404 $ 1,712,699 $ 16,404 $ 1,712,699 $ 4,961 66,990 - 1,713) ( 8,403) ( 133,575) ( 12,962 $ 1,644,401 $ $ 34,373 $ 2,320,616 21,411) ( 676,215) ( 12,962 $ 1,644,401 $

The relevant assets of the Company recognized as property, plant and equipment are all for self-use.

~207~

(9)Leasing arrangements-lessee

A. The Company’s lease asset is land. Rental contracts are typically made for 3 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. The carrying amounts of right-of-use assets and the depreciation charge are as follows:

Land Land	December31,2020 December31,2019 Carryingamount Carryingamount 51,893 $ 88,521 $ Years endedDecember31,	December31,2019
		Carryingamount
		88,521 $
	2020 Depreciationcharge 36,628 $	2019
		Depreciationcharge
		30,274 $

C. For the years ended December 31, 2020 and 2019, the additions to right-of-use assets were $0 and $109,887, respectively.
D. Information on profit or loss in relation to lease contracts is as follows:

Items affecting profit or loss Interest expense on lease liabilities Expense on short-term lease contracts Expense on leases of low-value assets	Years ended December 31,	Years ended December 31,
	2020 823 $ 5,207 847	2019
		676 $ 3,836 916

E. For the years ended December 31, 2020 and 2019, the Company’s total cash outflow for leases were $43,112 and $44,457, respectively.

(10)Leasing arrangements-lessor

A. The Company leases various assets including land and buildings. Rental contracts are typically made for periods of 1 to 3 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions . To protect the lessor’s ownership rights on the leased assets, leased assets may not be used as security for borrowing purposes, or a residual value guarantee was required.
B. For the years ended December 31, 2020 and 2019, the Company recognized rent income in the amount of $38,721 and $35,352, respectively, based on the operating lease agreement, which does not include variable lease payments.
C. The maturity analysis of the lease payments under the operating leases is as follows:

2021 2022 2023	December 31,2020 23,725 $ 2020 3,900 2021 400 2022 28,025 $	December 31,2019
		36,348 $ 21,828 -
		58,176 $

~208~

(11)Investment property

At January 1 Cost Accumulated depreciation Opening net book amount as at January 1 Additions Depreciation charge Closing net book amount as at December 31 At December 31 Cost Accumulated depreciation At January 1 Cost Accumulated depreciation Opening net book amount as at January 1 Depreciation charge Closing net book amount as at December 31 At December 31 Cost Accumulated depreciation		2020	Total 2,621,973 $ 61,513) 2,560,460 $ 2,560,460 $ 13,498 7,939) 2,566,019 $ 2,633,735 $ 67,716) 2,566,019 $ Total 2,624,334 $ 56,883) 2,567,451 $ 2,567,451 $ 6,991) 2,560,460 $ 2,621,973 $ 61,513) 2,560,460 $
	Land 2,268,726 $ - ( 2,268,726 $ 2,268,726 $ - - ( 2,268,726 $ 2,268,726 $ - ( 2,268,726 $	Buildings and structures 353,247 $ 61,513) ( 291,734 $ 291,734 $ 13,498 7,939) ( 297,293 $ 365,009 $ 67,716) ( 297,293 $ 2019
	Land 2,268,726 $ - ( 2,268,726 $ 2,268,726 $ - ( 2,268,726 $ 2,268,726 $ - ( 2,268,726 $	Buildings and structures 355,608 $ 56,883) ( 298,725 $ 298,725 $ 6,991) ( 291,734 $ 353,247 $ 61,513) ( 291,734 $

~209~

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

Rental income from investment property Direct operating expenses arising from investment property that generated rental income Direct operating expenses arising from investment property that did not generate rental income	Years endedDecember31,	Years endedDecember31,
	2020 38,721 $ 7,231 $ 708 $	2019
		35,352 $
		6,170 $
		821 $

B. The fair value of the investment property held by the Company was $5,146,932 and $4,942,639 as of December 31, 2020 and 2019, respectively, which was based on the transaction prices of similar properties in the same area.
C. No investment property was pledged to others.
(12)Other non-current assets

similar properties in the same area. C. No investment property was pledged to others. Other non-current assets
Guarantee deposits paid Prepayments for business facilities Others	December 31,2020 14,549 $ - 12,924 27,473 $	December 31,2019
		14,163 $ 16,926 12,888
		43,977 $

(13)Pensions

A. Defined benefit plan
(a) The Company has 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 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 contributes monthly an amount equal to 2% of the employees’ monthly salaries and wages to the retirement fund deposited with the Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company would assess the balance in the aforementioned labor pension reserve account by 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 will make contributions to cover the deficit by next March.

~210~

(b) The amounts recognized in the balance sheet are as follows:

Present value of defined benefit obligations Fair value of plan assets Net defined benefit liability	December 31,2020 43,239 $ 26,678) ( 16,561 $	December 31,2019 40,765 $ 24,411) ( 16,354 $

2020 Balance at January 1 Current service cost Interest expense (income) Remeasurements: Return on plan assets (excluding amounts included in interest income or expense) Change in demographic assumptions Change in financial assumptions Experience adjustments Pension fund contribution Paid pension ( Balance at December 31	Present value of defined benefit obligations plan assets benefit liability 40,765 $ 24,411) ($ 16,354 $ 431 - 431 326 200) ( 126 41,522 24,611) ( 16,911 - 802) ( 802) ( 105 - 105 527 - 527 1,242 - 1,242 1,874 802) ( 1,072 - 1,422) ( 1,422) ( 157) 157 - 43,239 $ 26,678) ($ 16,561 $ Fair value of Net defined

~211~

2019 Balance at January 1 Current service cost Interest expense (income) Remeasurements: Return on plan assets (excluding amounts included in interest income or expense) Change in demographic assumptions Change in financial assumptions Experience adjustments ( Pension fund contribution Paid pension ( Balance at December 31	Present value of defined benefit obligations plan assets benefit liability 41,250 $ 23,449) ($ 17,801 $ 500 - 500 464 272) ( 192 42,214 23,721) ( 18,493 - 767) ( 767) ( 329 - 329 1,645 - 1,645 1,931) - 1,931) ( 43 767) ( 724) ( - 1,415) ( 1,415) ( 1,492) 1,492 - 40,765 $ 24,411) ($ 16,354 $ Fair value of Net defined

(d) The Bank of Taiwan was commissioned to manage the Fund of the Company’s defined benefit pension plan in accordance with the Fund’s annual investment and utilisation plan and the “Regulations for Revenues, Expenditures, Safeguard and Utilisation of the Labor Retirement Fund” (Article 6: The scope of utilisation for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-thecounter, or private placement equity securities, investment in domestic or foreign real estate securitisation products, etc.). With regard to the utilisation of the Fund, its minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. If the earnings is less than aforementioned rates, government shall make payment for the deficit after being authorised by the Regulator. The Company has no right to participate in managing and operating that fund and hence the Company is unable to disclose the classification of plan assets fair value in accordance with IAS 19 paragraph 142. The composition of fair value of plan assets as of December 31, 2020 and 2019 is given in the Annual Labor Retirement Fund Utilisation Report announced by the government.

~212~

(e) The principal actuarial assumptions used were as follows:

Discount rate Future salary increases	Years ended	December31,
	2020 0.350% 1.625%	2019
		0.800%
		2.000%

Future mortality rate was estimated based on the 5th Taiwan Standard Ordinary Experience Mortality Table.

Because the main actuarial assumption changed, the present value of defined benefit obligation is affected. The analysis was as follows:

December 31, 2020 Effect on present value of defined benefit obligation ( December 31, 2019 Effect on present value of defined benefit obligation (	Increase Decrease 0.25% 0.25% 1,306) $ 1,364 $ 1,276) $ 1,333 $ Discount rate	Increase Decrease 0.25% 0.25% 1,315 $ 1,267) ($ 1,286 $ 1,238) ($ Future salaryincreases
	Increase 0.25% 1,306) $ 1,276) $

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous period.

(f) Expected contributions to the defined benefit pension plan of the Company for the year ending December 31, 2021 amount to $1,422.
(g) As of December 31, 2020, the weighted average duration of the retirement plan is 13.7 years.
B. Defined contribution plan

Effective July 1, 2005, the Company has established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company contributes 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.

The pension costs under the defined contribution pension plan of the Company for the years ended December 31, 2020 and 2019 were $34,696 and $35,154, respectively.

~213~

(14)Share capital

A. As of December 31, 2020, the Company’s authorized capital was $5,000,000, consisting of 500 million shares of ordinary stock (including 25 million shares reserved for employee stock options), and the paid-in capital was $4,290,617 with par value of $10 per share. All proceeds from shares issued have been collected.

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

At January 1 Purchase of treasury shares (retired) ( At December 31	2020 429,248 186) ( 429,062	2019 430,762 1,514) 429,248

B. Treasury shares

(a) To enhance the Company’s credit rating and stockholders’ equity, on November 7, 2019, the Board of Directors resolved to repurchase and retire 3 million ordinary shares. The repurchase period is from November 8, 2019 to January 7, 2020, and the price ranged between $49 and $97 in dollars per share. The details are as follows:

Name of company holdingthe shares Reason for reacquisition The Company Enhance the Company’s credit rating and stockholders’ equity	Numbers of shares (in thousands) 1,700	Carryingamount
		$ 130,621

(b) Pursuant to the R.O.C. Securities and Exchange Act, the number of shares bought back as treasury share should not exceed 10% of the number of the Company’s issued and outstanding shares and the amount bought back should not exceed the sum of retained earnings, paid-in capital in excess of par value and realized capital surplus.
(c) Pursuant to the R.O.C. Securities and Exchange Act, treasury shares should not be pledged as collateral and is not entitled to dividends before it is reissued.
(d) Pursuant to the R.O.C. Securities and Exchange Act, treasury shares to enhance the Company’s credit rating and the stockholders’ equity should be retired within six months of acquisition.

(15)Capital surplus

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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 shall not be used to cover accumulated deficit unless the legal reserve is insufficient.

(16)Retained earnings
A. In accordance with the Company’s Articles of Incorporation, the current year’s earnings, if any, shall first be used to pay all taxes and to offset prior years’ operating losses and then 10% of the remaining amount shall be set aside as legal reserve. The Company shall also set aside special reserve in accordance with the regulations. On the premise that there is no effect on the Company’s normal operations and no violation of regulations, the Company shall reserve certain amount for maintaining stability of dividends. The remainder, if any, is the distributable earnings to be appropriated as resolved by stockholders at the stockholders’ meeting. The Board of Directors is authorized by the shareholders to resolve the appropriation of cash dividends and cash payment from capital surplus by a resolution adopted by a majority vote at its meeting attended by two-thirds of the total number of directors, which will then be reported to the shareholders.
B. The Company distributes dividends taking into consideration the Company’s economic environment, growth phases, future demands for funds, long-term financial planning and the cash flow needs of stockholders. Cash dividends shall account for at least 5% of the total dividends distributed.
C. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company’s 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 balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.
E. (a) The cash appropriation of earnings and cash payment from capital surplus for the years ended December 31, 2019 and 2018 have been resolved at the shareholders’ meeting on June 19, 2020 and June 12, 2019, respectively. Details are summarized below:

~215~

Year ended December 31, 2019 Year ended December 31, 2018

Legal reserve Special reserve Cash dividends Cash payment from capital surplus	Amount 172,897 $ 69,330 1,544,622 1,786,849 $ Amount 386,156 $	Dividends per share (indollars) 3.60 $ Cash payment per share (indollars) 0.90 $	Amount 208,199 $ 14,325 1,895,351 2,117,875 $ Amount 258,458 $	Dividends per share (indollars)
				4.40 $ Cash payment per share (indollars) 0.60 $

Actual distribution of retained earnings of 2019 and 2018 is in agreement with the amounts resolved at the stockholders’ meeting.

(b) The appropriation of earnings and capital surplus for the year ended December 31, 2020 as proposed by the Board of Directors on March 4, 2021 is as follows:

Legal surplus Cash dividends Total Capital surplus used to issue cash to shareholders	YearendedDecember31,2020	YearendedDecember31,2020
	Amount 119,625 $ 1,094,107 1,213,732 $ Amount 214,531 $	Dividends per share (indollars)
		2.55 $ Cash dividends pershare (indollars)
		0.50 $

Aforementioned proposal to appropriate 2020 earnings and capital surplus has not yet been resolved by the stockholders.

~216~

(17)Other equity items

Exchange differences Unrealized on translation of gain or loss foreign financial on valuation statements Total At January 1 7,559 $ 138,461) ($ 130,902) ($ Revaluation - gross 3,164) ( - 3,164) ( Currency translation differences - 21,027 21,027 Effect from income tax - 4,205) ( 4,205) ( At December 31 4,395 $ 121,639) ($ 117,244) ($ 2020		2020
			Total
			117,244) ($

Exchange differences Unrealized on translation of gain or loss foreign financial on valuation statements Total At January 1 15,593 $ 77,165) ($ 61,572) ($ Revaluation - gross 27,976 - 27,976 Revaluation transferred to retained earnings - gross 36,010) ( - 36,010) ( Currency translation differences - 76,620) ( 76,620) ( Effect from income tax - 15,324 15,324 At December 31 7,559 $ 138,461) ($ 130,902) ($ 2019		2019
			Total
			130,902) ($

(18)Operating revenue

Sales revenue

Years ended December 31,	Years ended December 31,
2020 10,937,519 $	2019
	12,860,887 $

A. Disaggregation of revenue from contracts with customers

The Company derives revenue from the transfer of goods at a point in time in the following geographical regions:

~217~

	Electronicproducts	Electronicproducts	Electronicproducts	Total
Taiwan 2,521,695 $	Asia America Europe 3,853,319 $ 1,032,850 $ 2,666,174 $ Electronicproducts
				10,937,519 $
				Total
Taiwan 2,794,634 $	Asia 4,439,071 $	America 1,021,685 $	Europe 3,627,834 $
				12,860,887 $

B. The delay of the Company’s sales orders has a knock-on effect on the overall revenue due to Covid-19 in the first half of 2020. However, there is no significant impact to the scope and price of the service contracts as the Company negotiated with customers and continuously invests in the manufacture of products for the subsequent shipments.
C. Contract assets and liabilities

The Company has no revenue-related contract assets and liabilities.

(19)Interest income

Interest income from bank deposits Interest income from financial assets measured at amortised cost Other interest income	Years ended December 31,	Years ended December 31,
	2020 2,741 $ 63,217 5,216 71,174 $	2019
		6,798 $ 182,539 133
		189,470 $

(20)Other income

Other income
Rental income	Years endedDecember31,
	2020 38,721 $	2019
		35,352 $

(21)Other gains and losses

Other income Other gains and losses Rental income		$	2020 38,721 Years ended	2019 35,352 $ December31,	2019 35,352 $ December31,
	0		Years ended	December 31,
			2020		2019
Loss on disposal of property, plant and equipment		($	2,098)	($	113)
Net gain (loss) on financial assets and liabilities at fair value through profit or loss			146,883	(	9,650)
Net currency exchange loss		(	34,871)	(	26,134)
Dividend income			3,834		5,019
Others			21,189		11,617
		$	134,937	($	19,261)

~218~

(22)Expenses by nature

Expenses by nature
Wages and salaries Labor and health insurance fees Pension costs Other personnel expenses Directors’ remuneration Depreciation on property, plant and equipment (including investment property)	Years ended December 31,
	2020 767,838 $ 69,488 35,253 41,598 7,626 170,349	2019
		764,734 $ 69,967 35,846 42,441 8,282 170,840

A. In accordance with the Articles of Incorporation of the Company, a ratio of distributable profit of the current year, after covering accumulated losses, shall be distributed as employees’ compensation and directors’ remuneration. The ratio shall not be lower than 1% for employees’ compensation and shall not be higher than 0.2% for directors’ and supervisors’ remuneration.
B. For the years ended December 31, 2020 and 2019, employees’ compensation was accrued at $15,225 and $21,398, respectively; while directors’ remuneration was accrued at $2,131 and $2,996, respectively. The aforementioned amounts were recognized in salary expenses. The employees’ compensation and directors’ remuneration were estimated and accrued based on 1% and 0.2% of distributable profit of current period for the year ended December 31, 2020. The employees’ compensation and directors’ remuneration resolved by the Board of Directors were $14,786 and $2,160, respectively, and the employees’ compensation will be distributed in the form of cash.

~219~

(23)Income tax

A. Income tax expense

(a) Components of income tax expense:

Current tax: Current tax on profits for the year Prior year income tax underestimation (overestimation) Total current tax Deferred tax: Origination and reversal of temporary differences Total deferred tax Income tax expense	2020 2019 252,898 $ 315,313 $ 489 5,824) ( 253,387 309,489 10,170 5,583 10,170 5,583 263,557 $ 315,072 $ Years ended December 31,
	2020 252,898 $ 489 ( 253,387 10,170 10,170 263,557 $

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

Exchange differences on translation of foreign financial statements	2020 2019 4,205 $ 15,324) ($ Years ended December 31,
	2020 4,205 $

B. Reconciliation between income tax expense and accounting profit

			Years ended	December31,	December31,
			2020		2019
Income tax calculated by applying statutory
rate to the profit before tax		$	292,258	$	408,808
Effects from items disallowed by tax
regulation (including effects from tax
exemption)	(		28,597)	(	86,458)
Prior year income tax underestimation
(overestimation)			489	(	5,824)
Effect from investment tax credits	(		593)	(	1,454)
Income tax expenses		$	263,557	$	315,072

~220~

C. Amounts of deferred tax assets or liabilities as a result of temporary differences are as follows:

					2020	2020	2020
							Recognized in
								other
				Recognized in			comprehensive
		At January1			profit or loss			income	At	December 31
Deferred income tax assets
Amount of allowance for bad	$	1,857	($		248)	$		-	$	1,609
debts that exceed the limit for
tax purpose
Unrealized exchange loss		30,166	(		30,166)			-		-
Pension provision amount		5,310	(		173)			-		5,137
in excess of appropriation
amount
Royalty fees		-			4,342			-		4,342
Unrealized sales discounts and		10,088	(		1,775)			-		8,313
allowances
Unrealized gross profit from		6,138	(		3,446)			-		2,692
sales
Unrealized loss on market		5,715			1,317			-		7,032
value decline and obsolete
and slow-moving inventories
Total	$	59,274	($		30,149)	$		-	$	29,125
Deferred income tax liabilities
Unrealized exchange gain	$	-	($		2,774)	$		-	($	2,774)
Currency translation	(	3,802)			-	(		4,205)	(	8,007)
differences
Net gain on investment	(	151,575)			22,753			-	(	128,822)
accounted for using equity
method
Others	(	86)			-			-	(	86)
Total	($	155,463)	$		19,979	($		4,205)	($	139,689)

~221~

2019

Recognized in
At January1
profit or loss
Deferred income tax assets
Amount of allowance for bad
debts that exceed the limit for
tax purpose
521
$ 1,336
$ Unrealized exchange loss
36,890
6,724)
(
Pension provision amount
in excess of appropriation
amount
5,455
145)
(
Unrealized sales discounts and
allowances
9,842
246
Unrealized gross profit from
sales
5,182
956
Unrealized loss on market
value decline and obsolete
and slow-moving inventories
15,780
10,065)
(
Total
73,670
$ 14,396)
($ Deferred income tax liabilities
Currency translation
differences
19,126)
($ -
$ Net gain on investment
accounted for using equity
method
160,388)
(
8,813
Others
86)
(
-
Total
179,600)
($ 8,813
$

Recognized in
other
comprehensive
income
At December 31
-
$ 1,857
$ -
30,166
-
5,310
-
10,088
-
6,138
-
5,715
-
$ 59,274
$ 15,324
$ 3,802)
($ -
151,575)
(
-
86)
(
15,324
$ 155,463)
($

D. The amounts of deductible temporary differences that were not recognized as deferred tax assets are as follows:

Deductible temporary differences	December 31,2020 73,173 $	December 31,2019
		73,173 $

E. The Company’s income tax returns through 2018 have been assessed and approved by the Tax Authority.

~222~

(24)Earnings per share

YearendedDecember31,2020	YearendedDecember31,2020	YearendedDecember31,2020
Weighted-average common shares Earnings outstanding per share Profit after tax (in thousands) (indollars) 1,197,735 $ 429,064 2.79 $ 1,197,735 $ 429,064 - 366 1,197,735 $ 429,430 2.79 $ YearendedDecember31,2019		Earnings per share (indollars)
		2.79 $
		2.79 $
Profitafter tax 1,728,967 $ 1,728,967 $ - 1,728,967 $	Weighted-average common shares outstanding (in thousands) 430,718 430,718 441 431,159	Earnings per share (indollars)
		4.01 $
		4.01 $

~223~

7. RELATED PARTY TRANSACTIONS

(1)Names of related parties and relationship

Names of related parties
Transcend Japan Inc.

Transcend Information Inc.

Transcend Korea Inc.

Transcend Information Europe B.V.

Transcend Information Trading GmbH, Hamburg
Transcend Information (H.K.) Ltd.

Transcend Information (Shanghai), Ltd.
(Transcend Shanghai)

Transtech Trading (Shanghai) Co., Ltd.

Transcend Information (Hong Kong), Ltd.

Taiwan IC Packaging Corporation

Won Chin Investment Inc. (Won Chin)

Cheng Chuan Technology Development Inc.
(Cheng Chuan)

Relationship with the Group

Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Associate accounted for using equity method
Major stockholder
Major stockholder

(2)Significant transactions and balances with related parties

A. Operating revenue

Sales of goods `－`Subsidiary `－`Associates accounted for using the equity method	Years ended December 31,	Years ended December 31,
	2020 3,392,429 $ 2,016 3,394,445 $	2019
		3,880,128 $ 1,828
		3,881,956 $

The sales prices charged to related parties are approximate to those charged to third parties. The credit term to related parties was 120 days after monthly billings, excluding the credit term of 30 days after delivery to Taiwan IC Packaging Corporation, and the credit term to general customers was 30 to 60 days after monthly billings.

B. Purchases

Purchases of goods `－`Subsidiary `－`Associates accounted for using the equity method	Years ended December 31,	Years ended December 31,
	2020 - $ 231,335 231,335 $	2019
		1,194 $ 273,949
		275,143 $

~224~

The purchase prices charged by related parties are approximate to those charged by third parties. The payment term to the Company’s associate accounted for using equity method, Taiwan IC Packaging Corporation, is 30 days after monthly billings.

C. Accounts receivable

Receivables from related parties `－`Subsidiary-Transcend Japan Inc. `－`Subsidiary-Others `－`Associates accounted for using the equity method	December31,2020 139,509 $ 264,851 - 404,360 $	December31,2019
		200,862 $ 253,906 8
		454,776 $

The receivables from related parties arise mainly from sale transactions. The credit term to the Company’s associate accounted for using equity method, Taiwan IC Packaging Corporation, is 30 days after delivery. The credit term to subsidiaries are 120 days after monthly billings. The receivables are unsecured in nature and bear no interest. There are no allowances for uncollectible accounts held against receivables from related parties.

D. Accounts payable

Payables to related parties `－`Subsidiary-Transcend Shanghai `－`Subsidiary-Others `－`Associates accounted for using the equity method	December31,2020 411,299 $ 1,991 37,416 450,706 $	December31,2019
		404,533 $ 3 52,828
		457,364 $

The payables to related parties arise mainly from purchase transactions, and information on the payment term is provided in Note 7(2) B. The payables bear no interest.

E. Other payables

Other payables `－`Subsidiary	December 31,2020 17,564 $	December 31,2019
		17,308 $

Other payables to related parties arise mainly from purchase of fixed assets and miscellaneous transactions. The other payables bear no interest.

F. Property transactions

For the years ended December 31, 2020 and 2019, the Company acquired fixed assets from Transcend Shanghai amounting to $0 and $213, respectively.

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G. Miscellaneous income

For the years ended December 31, 2020 and 2019, the expendables sold to related parties, which were recognized in non-operating income, amounted to $1,572 and $1,935, respectively.

H. Leasing arrangements - lessee

I. Endorsements and guarantees:

As of December 31, 2020 and 2019, information on the Company providing endorsements and

guarantees to associates is provided in Note 13(1) B.

(3)Key management compensation

Key management compensation
Salaries and other employee benefits	Years endedDecember31,
	2020 35,811 $	2019
		27,859 $

8. PLEDGED ASSETS

None.

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT

COMMITMENTS

As of December 31, 2020, except for the provision of endorsements and guarantees mentioned in Note 7 and 13(1) B, there are no other significant commitments.

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT SUBSEQUENT EVENTS

Information on distribution of 2020 earnings and cash dividends from capital surplus is provided in Note 6(16) E(b).

12. OTHERS

(1)Capital risk management

The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to

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shareholders, issue new shares or sell assets to reduce debt. The Company’s own funds are currently sufficient, daily operations can create stable cash inflows, and there are no significant capital expenditure plans in the short term. Except for obtaining loans to reduce the exchange rate exposure, the Company has sufficient funds to cover its own needs. Debt financing is not necessary.

(2)Financial instruments

A. Financial instruments by category

Financial assets Financial assets mandatorily measured at fair value through profit or loss Financial assets at fair value through other comprehensive income Financial assets at amortised cost Cash and cash equivalents Financial assets at amortised cost Notes receivable Accounts receivable (including related parties) Other receivables Refundable deposits Financial liabilities Financial liabilities at amortised cost Accounts payable (including related parties) Other payables (including related parties) Lease liabilities	December31,2020 4,255,920 $ 111,000 399,574 5,450,000 759 1,215,008 70,135 14,549 11,516,945 $ December31,2020 1,582,722 $ 224,528 1,807,250 $ 36,815 $	December31,2019
		2,505,073 $ 114,164 863,583 7,876,353 3,054 1,353,483 106,252 14,163
		12,836,125 $
		December31,2019
		1,459,678 $ 228,775
		1,688,453 $
		73,050 $

B. Financial risk management policies
(a) The objective of the Company’s risk management is to identify and analyse all the risks (including market risk, credit risk, liquidity risk and cash flow risk) by examining the impact of the macroeconomics, industrial developments, market competition and the Company’s business development so as to achieve the optimized risk position, to maintain adequate liquidity position and to centralize the management of all market risks.
(b) To manage the Company’s assets, liabilities and expenditures efficiently and reach the risk management target in relation to decreasing the risk of exchange rate changes, the

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Company’s hedging strategy is using forward foreign currency transaction or foreign currency options. The Company operates hedging transaction based on the Company’s net position of assets, liabilities and future cash flows estimations in order to efficiently decrease the market price risk arising from foreign currency fluctuation.

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

Foreign exchange risk

i. The Company operates internationally and is exposed to exchange rate risk arising from the transactions of the Company used in various functional currency, primarily with respect to the USD. Exchange rate risk arises from future commercial transactions and recognized assets and liabilities.
ii. The Company’s businesses involve some non-functional currency operations. The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

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	December 31,2020
Foreign Currency Amount 25,784 $ 626,946 4,649 48,343 763,739 61,251 $ 930,912 2,231,212 35,425 $ 97,981	Exchange rate 28.4800 0.2763 35.0200 4.3770 0.0264 28.4800 0.2763 0.0264 28.4800 4.3770 December 31,2019	Book value (NTD)
		734,328 173,225 162,808 211,597 20,163 1,744,419 257,211 58,904 1,008,904 428,863
Foreign Currency Amount 131,495 $ 1,804,898 6,569 27,721 1,045 6,000 866,442 61,347 $ 884,656 2,312,710 27,030 $ 97,981	Exchange rate 29.9800 0.2760 33.5900 4.3050 39.3600 3.8490 0.0262 29.9800 0.2760 0.0262 29.9800 4.3050	Book value (NTD)
		3,942,220 498,152 220,653 119,339 41,131 23,094 22,701 1,839,183 244,165 60,593 810,359 421,808

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iii. The information on total exchange (loss) gain, including realized and unrealized arising from significant foreign exchange variation on the monetary items held by the Company for the years ended December 31, 2020 and 2019 is provided in Note 6(21).
iv. Sensitivity analysis relating to foreign exchange rate risks is primarily for financial reporting period-end date of foreign currency monetary item. If the New Taiwan dollar exchange rate to the U.S. dollar increases or decreases by 1%, the Company’s net income will decrease or increase by $2,746 and $31,319 for the years ended December 31, 2020 and 2019, respectively.

Price risk

i. The Company is exposed to equity securities price risk because of investments held by the Company and classified on the balance sheet as financial assets at fair value through profit or loss and other comprehensive income. The Company is not exposed to commodity price risk. To manage its price risk arising from investments in equity securities, the Company diversifies its portfolio.
ii. The Company’s investments in listed and unlisted equity securities by the domestic companies. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased/decreased by 1% with all other variables held constant, post-tax profit for the years ended December 31, 2020 and 2019 would have increased/decreased by $42,559 and $25,051, respectively, as a result of gains/losses on equity securities classified as at fair value through profit or loss. Other components of equity would have increased/decreased by $1,110 and $1,142, 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 Company’s principal interest-bearing assets are cash and cash equivalents and financial assets at amortised cost. Cash and cash equivalents are due within twelve months. Financial assets at amortised cost are maintained at fixed rates. Therefore, it is assessed that there is no significant cash flow interest rate risk.
ii. The Company has not used any financial instruments to hedge its interest rate risk.

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(b) Credit risk

i. Credit risk refers to the risk of financial loss to the Company arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the accounts receivable based on the agreed terms, and the contract cash flows of debt instruments stated at amortised cost.
ii. The Company manages its credit risk taking into consideration the entire group’s concern. According to the Company’s credit policy, each local entity in the Company is responsible for managing and analyzing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. To control internal risk, the Company assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board of Directors. The utilisation of credit limits is regularly monitored.
iii. The Company determines that the default occurs when the contract payments are past due over 180 days.
iv. The Company adopts the following assumptions under IFRS 9 to assess whether there has been a 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. If the credit rating grade of an investment target degrades two scales, there has been a significant increase in credit risk on that instrument since initial recognition.
vi. The following indicators are used to determine whether the credit impairment of debt instruments has occurred:
(i) It becomes probable that the issuer will enter bankruptcy or other financial reorganization due to their financial difficulties;
(ii) The disappearance of an active market for that financial asset because of financial difficulties;
(iii) Default or delinquency in interest or principal repayments;
(iv) Adverse changes in national or regional economic conditions that are expected to cause a default.
vii. For details of credit risk in relation to accounts receivable and notes receivable, please refer to Note 6(4).
viii. For details of credit risk in relation to debt instrument investments measured at amortised cost, please refer to Note 6(3).

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(c) Liquidity risk

i. Cash flow forecasting is performed in the operating entities of the Company and aggregated by Company treasury. Company treasury monitors rolling forecasts of the Company’s liquidity requirements to ensure it has sufficient cash to meet operational needs.
ii. Surplus cash held by the operating entities over and above balance required for working capital management are transferred to the Company treasury. Company treasury invests surplus cash in interest bearing current accounts, time deposits, monetary funds and bonds sold under repurchase agreements, choosing instruments with appropriate maturities or sufficient liquidity to provide sufficient headroom as determined by the abovementioned forecasts. As at December 31, 2020 and 2019, the Company held money market position of $9,360,572 and $11,096,482, respectively, that are expected to readily generate cash inflows for managing liquidity risk.
iii. The Company’s non-derivative financial liabilities are analysed based on the remaining period at the balance sheet date to the contractual maturity date and all the Company’s financial liabilities expire within one year.

(3)Fair value information

A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Company’s investment in listed stocks and beneficiary certificates is included in Level 1.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The fair value of the Company’s investment in non-hedging derivatives is included in Level 2.
Level 3: Unobservable inputs for the asset or liability. The fair value of the Company’s investment in equity investment without active market, financial products and investment property is included in Level 3.
B. Fair value information of investment property at cost is provided in Note 6(11).
C. Financial instruments not measured at fair value
Except for those listed in the table below, the carrying amounts of cash and cash equivalents, financial assets at amortised cost, notes receivable, accounts receivable, other receivables, accounts payable and other payables are approximate to their fair values.
D. 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 are as follows:

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December 31, 2020 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Beneficiary certificates Financial assets at fair value through other comprehensive income Equity securities December 31, 2019 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Beneficiary certificates Financial assets at fair value through other comprehensive income Equity securities	Level 1 4,255,920 $ 109,875 4,365,795 $ Level 1 2,505,073 $ 113,039 2,618,112 $	Level 2 - $ - - $ Level 2 - $ - - $	Level 3 - $ 1,125 1,125 $ Level 3 - $ 1,125 1,125 $	Total
				4,255,920 $ 111,000
				4,366,920 $
				Total
				2,505,073 $ 114,164
				2,619,237 $

E. The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s length basis. The quoted market price used for financial assets held by the Company is the closing price. These instruments are included in Level 1. Instruments included in Level 1 comprise primarily listed stocks classified as financial assets at fair value through other comprehensive income
F. If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
G. There was no change in Level 3 financial instruments for the years ended December 31, 2020 and 2019.

13. SUPPLEMENTARY DISCLOSURES

(1)Significant transactions information

A. Loans to others: None.
B. Provision of endorsements and guarantees to others: Please refer to table 1.
C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 2.
D. Acquisition or sale of the same security with the accumulated cost exceeding NT$300 million or 20% of the Company’s paid-in capital: Please refer to table 3.

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E. Acquisition of real estate reaching NT$300 million or 20% of paid-in capital or more: None.
F. Disposal of real estate reaching NT$300 million or 20% of paid-in capital or more: None.
G. Purchases or sales of goods from or to relate parties reaching NT$100 million or 20% of the Company’s paid-in capital or more: Please refer to table 4.
H. Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more: Please refer to table 5.
I. Trading in derivative instruments undertaken during the reporting periods: Please refer to Note 6(2).
J. Significant inter-company transactions during the reporting periods: Please refer to table 6.
(2)Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China): Please refer to table 7.

(3)Information on investments in Mainland China

A. Basic information: Please refer to table 8.
B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: Please refer to table 6.

(4)Major shareholders information

Major shareholders information: Please refer to table 9.

14. SEGMENT INFORMATION

None.

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Transcend Information, Inc.

Provision of endorsements and guarantees to others Year ended December 31, 2020

Table 1 Number (Note 1)	Endorser/ guarantor	Party being endorsed/guaranteed	Party being endorsed/guaranteed	Limit on endorsements/ guarantees provided for a single party (Note 3)	Maximum outstanding endorsement/ guarantee amount as of December 31, 2020 (Note 4)	Outstanding endorsement/ guarantee amount at December 31, 2020 (Note 5)	Actual amount drawn down (Note 6)	Amount of endorsements/ guarantees secured with collateral	Ratio of accumulated endorsement/ guarantee amount to net asset value of the endorser/ guarantor company	Ceiling on total amount of endorsements /guarantees provided (Note 7)	Provision of endorsements/ guarantees by parent company to subsidiary (Note 8)	- - - Expressed in thousands of NTD (Except as otherwise indicated) Provision of endorsements/ guarantees to the party in Mainland China Footnote Provision of endorsements/ guarantees by subsidiary to parent company	- - - Expressed in thousands of NTD (Except as otherwise indicated) Provision of endorsements/ guarantees to the party in Mainland China Footnote Provision of endorsements/ guarantees by subsidiary to parent company	- - - Expressed in thousands of NTD (Except as otherwise indicated) Provision of endorsements/ guarantees to the party in Mainland China Footnote Provision of endorsements/ guarantees by subsidiary to parent company
		Company name	Relationship with the endorser/ guarantor (Note 2)
0	Transcend Taiwan	Transcend Japan Inc.	2	3,734,405 $	$ 564,600 (JPY $2,000,000) (In thousands)	$ 552,600 (JPY $2,000,000) (In thousands)	- $	-	3	7,468,810 $	Y	-	-	-

Note 1: The numbers filled in for the endorsements/guarantees provided by the Company or subsidiaries are as follows:
(a) The Company is ‘0’.
(b) The subsidiaries are numbered in order starting from ‘1’.
Note 2: Relationship between the endorser/guarantor and the party being endorsed/guaranteed is classified into the following seven categories; fill in the number of category each case belongs to:
(a) Having business relationship
(b) The endorser/guarantor parent company owns directly and indirectly more than 50% voting shares of the endorsed/guaranteed subsidiary.
(c) The endorsed/guaranteed company owns directly and indirectly more than 50% voting shares of the endorser/guarantor parent company.
(d) The endorser/guarantor parent company owns directly and indirectly more than 90% voting shares of the endorsed/guaranteed company.
(e) Mutual guarantee of the trade made by the endorsed/guaranteed company or joint contractor as required under the construction contract.
(f) Due to joint venture, all shareholders provide endorsements/guarantees to the endorsed/guaranteed company in proportion to its ownership.
(g) Joint guarantee of the performance guarantee for pre-sold home sales contract as required under the Consumer Protection Act.
Note 3: Not exceeding 20% of the Company's net asset value. ($18,672,026 *20%=$3,734,405)
Note 4: The maximum outstanding endorsement/guarantee amount during and as of December 31, 2020 is JPY$2,000,000 (In thousands).
Note 5: The amount was approved by the Board of Directors.
Note 6: The actual amount of endorsement drawn down is $0.
Note 7: Not exceeding 40% of the Company's net asset value. ($18,672,026*40%=$7,468,810)
Note 8: Fill in ‘Y’ for those cases of provision of endorsements/guarantees by listed parent company to subsidiary.

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Transcend Information, Inc.

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

December 31, 2020

			December 31, 2020
Table 2 Securities held by	Marketable securities (Note 1)	Relationship with the securities issuer (Note 2)	General ledger account		As of December 31, 2020			Footnote (Note 4) Expressed in thousands of NTD (Except as otherwise indicated)
				Number of shares 60,816 1,758,000 257,293,248 50,000,000 914,000 290,000	Book value (Note 3)	Ownership (%)	Fair value
Transcend Taiwan	Stocks Dramexchange Tech Inc. Fubon Financial Holding Co., Ltd. Preferred Shares B Beneficiary certificates Taishin 1699 Money Market Fund Yuanta Taiwan High-yield Leading Company Fund B Yuanta Taiwan Top 50 ETF Yuanta Taiwan Dividend Plus ETF	- - - - - -	Non-current financial assets at fair value through other comprehensive income " Current financial assets at fair value through profit or loss Non-current financial assets at fair value through profit or loss 〞〞		1,125 $ 109,875 111,000 $ 3,510,998 $ 624,500 $ 111,736 8,686 744,922 $	1 - - - - -	1,125 $ 109,875 3,510,998 $ 624,500 $ 111,736 8,686	- - - - - -

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Transcend Information, Inc.

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

Year ended December 31, 2020

Table 3 Investor	Marketable securities `（`Note 1`）`	General ledger account	Counterparty `（`Note 2`）`	Relationship with the investor `（`Note 2`）`	January 1, 2020	January 1, 2020	`（`Note 3`）`	`（`Note 3`）`		`（`Note 3`）`	`（`Note 3`）`	Gain on disposal Number of shares Amount $ 6,340 257,293,248 $ 3,501,229 448 - - - 50,000,000 500,000 December 31, 2020 Expressed in thousands of NTD (Except as otherwise indicated)	Gain on disposal Number of shares Amount $ 6,340 257,293,248 $ 3,501,229 448 - - - 50,000,000 500,000 December 31, 2020 Expressed in thousands of NTD (Except as otherwise indicated)	Gain on disposal Number of shares Amount $ 6,340 257,293,248 $ 3,501,229 448 - - - 50,000,000 500,000 December 31, 2020 Expressed in thousands of NTD (Except as otherwise indicated)
					Number of shares	Amount	Number of shares	Amount	Number of shares	Selling price	Book value	Gain on disposal	Number of shares	Amount
Transcend Taiwan	Taishin 1699 Money Market Fund Capital Money Market Fund Yuanta Taiwan High-yield Leading Company Fund B	Current financial assets at fair value through profit or loss " Non-current financial assets at fair value through profit or loss	- - -	- - -	184,410,796 - -	$ 2,499,764 - -	220,144,215 30,841,673 50,000,000	$ 3,000,000 500,000 500,000	147,261,763 30,841,673 -	$ 2,004,875 500,448 -	$ 1,998,535 500,000 -	$ 6,340 448 -	257,293,248 - 50,000,000	$ 3,501,229 - 500,000

Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities.

Note 2: Fill in the columns the counterparty and relationship if securities are accounted for under the equity method; otherwise leave the columns blank.

Note 3: Aggregate purchases and sales amounts should be calculated separately at their market values to verify whether they individually reach NT$300 million or 20% of paid-in capital or more.

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Transcend Information, Inc.

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

Year ended December 31, 2020

Table 4

Expressed in thousands of NTD (Except as otherwise indicated)

Purchaser/seller	Counterparty	Relationship with the counterparty		Transaction	Transaction		third party transactions (Note 1)	third party transactions (Note 1)	Notes/accounts receivable (payable)	Notes/accounts receivable (payable)	Footnote
			Sales (purchases)	Amount	Percentage of total sales (purchases)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable(payable)
Transcend Taiwan " " " " " " Transcend Information Europe B.V. Transcend Taiwan	Transcend Japan Inc. Transcend Information Europe B.V. Transcend Information, Inc. Transcend Korea Inc. Transtech Trading (Shanghai) Co., Ltd. Transcend Information (H.K) Ltd. Transcend Information Trading GmbH, Hamburg Transcend Information Trading GmbH, Hamburg Taiwan IC Packaging Corporation	The Company's subsidiary Subsidiary of Memhiro The Company's subsidiary The Company’s subsidiary Subsidiary of Memhiro Subsidiary of Memhiro Subsidiary of Memhiro Controlled by the same ultimate parent company Associate accounted for using equity method	Sales " " " " " " " (Purchase)	$ 733,397 507,995 508,954 270,427 707,893 235,845 427,917 158,418 (231,335)	7 5 5 2 6 2 4 25 (2)	120 days after monthly billings " " " " " " 30 days after delivery 30 days after monthly billings	No significant difference " " " " " " " No significant difference	30 to 60 days after monthly billings to third parties " " " " " " 7 to 60 days after delivery to third parties 30 to 45 days after monthly billings to third parties	$ 139,509 22,762 25,393 20,163 171,902 8,919 15,712 12,477 ( 37,416)	11 2 2 2 14 1 1 18 (2)	- - - - - - - - -

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Transcend Information, Inc

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

Year ended December 31, 2020

Table 5 Creditor	Counterparty	Relationship with the counterparty	Balance as at December 31, 2020	Turnover rate	Overdue receivables	Overdue receivables	Amount collected subsequent to the balance sheet date Expressed (Except a	Allowance for doubtful accounts in thousands of NTD s otherwise indicated)
					Amount	Action taken
Transcend Taiwan " Transcend Information (Shanghai), Ltd.	Transcend Japan Inc. Transtech Trading (Shanghai) Co., Ltd. Transcend Taiwan	Subsidiary of the Company Subsidiary of Memhiro Ultimate parent company	$ 139,509 171,902 411,299	4.31 4.88 -	$ - - 411,299	- - -	$ 139,509 137,788 -	- - -

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Transcend Information, Inc.

Significant inter-company transactions during the reporting year

Year ended December 31, 2020

Table 6

Expressed in thousands of NTD

Table 6						Expressed in thousands of NTD	Expressed in thousands of NTD
Number (Note 1)	Company name	Counterparty	Relationship (Note 2)			Transaction (Except as otherwise indicated)
				General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets(Note 3)
0 " " " " " " " " " 1	Transcend Taiwan " " " " " " " " " Transcend Information Europe B. V.	Transcend Japan Inc. Transcend Information Europe B. V. Transcend Information, Inc. Transcend Korea Inc. Transtech Trading (Shanghai) Co., Ltd. Transcend Information (H.K) Ltd. Transcend Information Trading GmbH, Hamburg Transcend Japan Inc. Transtech Trading (Shanghai) Co., Ltd. Transcend Information (Shanghai), Ltd. Transcend Information Trading GmbH, Hamburg	1 〞〞〞 `〞` 〞〞〞〞〞 3	Sales " " " " " " Accounts Receivable " Accounts Payable Sales	$ 733,397 507,995 508,954 270,427 707,893 235,845 427,917 139,509 171,902 411,299) ( 158,418	There is no significant difference in unit price from those to third parties. " " " " " " 120 days after monthly billings " " There is no significant difference in unit price from those to third parties.	`6` `4` `4` `2` `6` `2` `4` `1` `1` `2)` `(` `1`

(Individual transactions not exceeding 1% of the consolidated total revenue and total assets are not disclosed.)

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

(a) Parent company is "0".
(b) Subsidiaries were numbered from 1.

(a) Parent company to subsidiary.
(b) Subsidiary to parent company.
(c) Subsidiary to subsidiaries.

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Transcend Information, Inc.

Information on investees Year ended December 31, 2020

Table 7

Expressed in thousands of NTD

(Except as otherwise indicated)

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held a	s at December 31, 2020	s at December 31, 2020	Net profit (loss) of the investee for the year ended December 31, 2020	Investment income (loss) recognized by the Company for the year ended December 31, 2020 `（`Note 1`）`	Footnote
				Balance as at December 31, 2020	Balance as at December 31, 2019	Number of shares	Ownership (%)	Book value
Transcend Taiwan Saffire Investment Ltd. Memhiro Pte Ltd.	Saffire Investment Ltd. Transcend Japan Inc. Transcend Information, Inc. Transcend Korea Inc. Taiwan IC Packaging Corp. Memhiro Pte Ltd. Transcend Information Europe B.V. Transcend Information Trading GmbH, Hamburg Transcend Information (H.K.) Ltd.	B.V.I. Japan United States of America Korea Taiwan Singapore Netherlands Germany Hong Kong	Investment holdings Wholesale of computer memory modules and peripheral Wholesale of computer memory modules and peripheral Wholesale of computer memory modules and peripheral Packaging of Semi-conductors Investment holdings Wholesale of computer memory modules and peripheral Wholesale of computer memory modules and peripheral Wholesale of computer memory modules and peripheral	$ 1,202,418 89,103 38,592 6,132 354,666 1,156,920 1,693 2,288 7,636	$ 1,202,418 89,103 38,592 6,132 354,666 1,156,920 1,693 2,288 7,636	36,600,000 6,400 625,000 40,000 21,928,036 55,132,000 100 - 2,000,000	100 100 100 100 12.74 100 100 100 100	1,563,437 $ 257,211 180,982 58,904 95,724 1,535,447 237,494 112,767 25,901	115,707) ($ 3,818 639 2,513) ( 11,040) ( 116,331) ( 3,399 6,983) ( 4,903	115,707) ($ 3,818 639 2,513) ( 1,299) ( 116,331) ( 3,401 6,983) ( 4,903	Note 2 Note 2 Note 2 Note 2 Note 5 Note 3 Note 4 Note 4 Note 4

Note 1: The Company does not directly recognize the investment income (loss) except for the subsidiaries directly held. Note 2: Subsidiary of the Company.

Note 3: Subsidiary of Saffire.

Note 4: Subsidiary of Memhiro.

Note 5: Please refer to Note 6 (7).

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Table 8 Investee in Mainland China	Main business activities	Paid-in capital	Investment method `（`Note 1`）`	Remitted to Mainland China Remitted back to Taiwan $ 1,134,178 - - $ 1,134,178 16,310 - - 16,310 Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2020 Transcend Information, Inc. Information on investments in Mainland China Accumulated amount of remittance from Taiwan to Mainland China as of December 31, 2020 Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the year ended December 31, 2020 Year ended December 31, 2020	Remitted to Mainland China Remitted back to Taiwan $ 1,134,178 - - $ 1,134,178 16,310 - - 16,310 Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2020 Transcend Information, Inc. Information on investments in Mainland China Accumulated amount of remittance from Taiwan to Mainland China as of December 31, 2020 Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the year ended December 31, 2020 Year ended December 31, 2020	Remitted to Mainland China Remitted back to Taiwan $ 1,134,178 - - $ 1,134,178 16,310 - - 16,310 Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2020 Transcend Information, Inc. Information on investments in Mainland China Accumulated amount of remittance from Taiwan to Mainland China as of December 31, 2020 Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the year ended December 31, 2020 Year ended December 31, 2020	Remitted to Mainland China Remitted back to Taiwan $ 1,134,178 - - $ 1,134,178 16,310 - - 16,310 Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2020 Transcend Information, Inc. Information on investments in Mainland China Accumulated amount of remittance from Taiwan to Mainland China as of December 31, 2020 Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the year ended December 31, 2020 Year ended December 31, 2020	Net income (loss) of investee for the year ended December 31, 2020	Ownership held by the Company (direct or indirect)	Investment income (loss) recognized by the Company for the year ended December 31, 2020 (Note 2)	Book value of investments in Mainland China as of December 31, 2020	$ 1,464,028 - - - Footnote Accumulated amount of investment income remitted back to Taiwan as of December 31, 2020 Expressed in thousands of NTD (Except as otherwise indicated)	$ 1,464,028 - - - Footnote Accumulated amount of investment income remitted back to Taiwan as of December 31, 2020 Expressed in thousands of NTD (Except as otherwise indicated)
					Remitted to Mainland China	Remitted back to Taiwan
Transcend Information (Shanghai), Ltd. Transtech Trading (Shanghai) Co., Ltd. Companyname	Manufacture and sales of computer memory modules, storage products and disks Wholesale, agent, import and export and retail of computer memory modules, storage products and computer components Accumulated amount of remittance from Taiwan to Mainland China as of December 31, 2020	$ 1,134,178 16,310 Investment amount approved by the Investment Commission of the Ministry of Economic Affairs (MOEA)	2 2 Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA	$ 1,134,178 16,310	- -	- -	$ 1,134,178 16,310	($ 89,936) 4,783	100 100	($ 89,936) 4,783	$ 1,132,669 37,098	$ 1,464,028 -	- -
Transcend Information (Shanghai), Ltd. Transtech Trading (Shanghai) Co., Ltd.	1,134,178 $ 16,310 1,150,488 $	1,134,178 $ 16,310 1,150,488 $	- $ - 11,203,216 $

Note 1: Investment methods are classified into the following three categories; fill in the number of category each case belongs to:

(1) Directly invest in a company in Mainland China.

(2) Through investing in an existing company in the third area (Memhiro Pte Ltd.), which then invested in Mainland China.

(3) Others.

Note 2: The financial statements were audited by R.O.C. parent company's CPA.

Note 3: The numbers in this table are expressed in New Taiwan Dollars.

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Major shareholders information

Transcend Information, Inc.

December 31, 2020

Table 9

Name of major shareholders	Number of shares held	Shareholdingratio
Won Chin Investment Inc. Wan An Technology Inc. Cheng Chuan Technology Development Inc. Wan Min Investment Inc. Wan Chuan Investment Inc.	74,783,600 33,480,854 32,971,701 29,711,397 29,505,896	17.42 7.80 7.68 6.92 6.87

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6.6. The Company should disclose the financial impact to the Company if the Company and its affiliated companies have incurred any financial or cash flow difficulties in 2020 and as of the date of this Annual Report.
None.
Review and Analysis of Financial Position, Financial Performance, and Risk Management
7.1. Analysis of Financial Position

Unit: NT$ thousands

Year Item	2020	2019	Amount % Difference	Amount % Difference	Analysis
Current Assets	14,615,264	15,411,700	(796,436)	(5.17)
Funds and Investments(Note 1)	951,646	360,125	591,521	164.25	(1)
Property,Plant and Equipment	2,282,324	2,438,154	(155,830)	(6.39)
Intangible Assets	-	-
Other Assets(Note 2)	2,888,388	2,990,811	(102,423)	(3.42)
Total Assets	20,737,622	21,200,790	(463,168)	(2.18)
Current Liabilities	1,837,754	1,501,579	336,175	22.39	(2)
Non-current Liabilities	227,842	292,363	(64,521)	(22.07)	(3)
Total Liabilities	2,065,596	1,793,942	271,654	15.14
Capital Stock	4,290,617	4,307,617	(17,000)	(0.39)
Capital surplus	3,945,369	4,346,854	(401,485)	(9.24)
Retained Earnings	10,553,284	10,999,853	(446,569)	(4.06)
Other Adjustments	(117,244)	(130,902)	13,658	(10.43)
TreasuryStock	-	(116,574)	116,574	(100.00)	(4)
Total Stockholders' Equity	18,672,026	19,406,848	(734,822)	(3.79)

Analysis of Deviation over 20%:

(1) It was mainly due to that in 2020, in order to increase the capital utilization effect, the board of directors approved the subscription of the Yuanta Taiwan High-yield Leading Company Fund of NT$ 500,000 thousand on March 5, 2020.
(2) It was mainly due to the relief program offered by the Ministry of Finance in 2020, the Company applied for the exemption from provisional payment of income tax, such that the accrual income tax liabilities increased at the end of the period.
(3) It was mainly due to the payment of right-of-use assets – second term rent for land in 2020, such that the non-current liabilities amount decreased.
(4) It was mainly due to that for the purpose of protecting the credit of the Company and the interests of the shareholders, the board of directors approved the proposal on the repurchase of common shares on November 7, 2019, and up to the date of December 31, 2019, the Company has repurchased 1,154 thousand common shares. The repurchase of shares was executed completely on January 7, 2020, and the Company repurchased a total of 1,700 thousand shares, for a total amount of NT$ 130,621 thousand. In addition, on March 5, 2020, the board of directors also approved the cancellation of treasury shares.
Note 1: Including Investments accounted for using equity method, Non-current financial assets at amortized cost, and Non-current financial assets at fair value through other comprehensive income in 2019. And including Investments accounted for using equity method, Non-current financial assets at fair value through profit or loss, and Non-current financial assets at fair value through other comprehensive income in 2020.

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Note 2: Including Deferred tax assets, Investment property, Right-of-use assets and Other non-current assets.
7.2. Analysis of Financial Performance
7.2.1. Main reasons for any material change in operating revenue, operating income and income before tax in the most recent two years

		Unit: NT$ thousands	Unit: NT$ thousands	Unit: NT$ thousands	Unit: NT$ thousands
Year Item	2020	2019	Difference Amounts	%	Analysis
Operating Revenue Operating Costs Gross profit Operating Expenses Operating Profit Non-operating income (expenses) Other income Other gains and losses Net gain from derecognizing financial assets measured at amortised cost Financial cost Share of loss of associates and joint ventures accounted for using the equity method Total non-operating income (expenses) Profit before income tax Income tax expense Profit for the year	11,446,696 (8,976,600) 2,470,096 (1,258,160) 1,211,936 112,673 163,899 17,210 (2,038) (1,299) 290,445 1,502,381 (304,646) 1,197,735	13,496,186 (2,049,490) (15.19) (10,408,655) 1,432,055 (13.76) 3,087,531 (617,435) (20.00) (1) (1,306,521) 48,361 (3.70) 1,781,010 (569,074) (31.95) (1) 231,102 (118,429) (51.25) (2) 67,311 96,588 143.50 (3) 20,552 (3,342) (16.26) (1,865) (173) 9.28 (8,367) 7,068 (84.47) (4) 308,733 (18,288) (5.92) 2,089,743 (587,362) (28.11) (1) (360,776) 56,130 (15.56) 1,728,967 (531,232) (30.73) (1)
Analysis of Deviation over 20%: (2) It was mainly due to the impact of the capital utilization and reduction of interest rates worldwide, consequently, the interest income decreased. (1) It was mainly due to that the operating revenud dropped in 2020, consequently, the gross profit, operating profit, profit before income tax and profit for the year decreased. (4) It was mainly due to that the loss of the associate, that the investments accounted for using equity method, Taiwan IC Packaging Corporation, Inc. in 2020 was significantly reduced in comparison to 2019, such that the investment lost recognized decreased. (3) It was mainly due to the increase of investment fund (financial assets at fair value through profit or loss) in 2020, and the net worth at the end of period increased for valuation gain.

Analysis of Deviation over 20%:

(1) It was mainly due to that the operating revenud dropped in 2020, consequently, the gross profit, operating profit, profit before income tax and profit for the year decreased.
(2) It was mainly due to the impact of the capital utilization and reduction of interest rates worldwide, consequently, the interest income decreased.
(3) It was mainly due to the increase of investment fund (financial assets at fair value through profit or loss) in 2020, and the net worth at the end of period increased for valuation gain.
(4) It was mainly due to that the loss of the associate, that the investments accounted for using equity method, Taiwan IC Packaging Corporation, Inc. in 2020 was significantly reduced in comparison to 2019, such that the investment lost recognized decreased.

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7.2.2. Sales Volume Forecast and Basis for 2021

Item	Sales Volume Forecast in 2021/Unit: thousands
FLASH+DRAMproducts	25,000
Others	2,600

The Company established the forecast for the possible sales volume of each type of product based on the industry economic condition in 2021, market research and future orders. At the end of 2020, the price drop cycle for DRAM and NAND came to an end, and starting from the end of 2020 Q4, due to the continuous growth of home economy under the COVID-19 pandemic and the new data centers invested by customers, the demand for server product increased significantly, and the increase of 5G mobile phones also drove the demand for memory. Last year, due to the global pandemic, the memory giant manufacturers slowed down their investments in new production equipment. However, the DRAM market has recovered since the first half of the 2021 and the price has increased. Consequently, the industry is currently at the recovery stage and under the condition of demand over supply.

Furthermore, the market originally expected the condition of supply over demand for NAND Flash market at 2021 Q1 and the contract price was expected to drop. Nevertheless, due to the increasing utilization rate of SSDs in notebook computers and tablets and the increasing demands for 5G smartphones and servers in the market, the pull-in dynamics were driven to grow. As the inventory levels of the manufacturers were at the low level, the price quotation for NAND Flash stopped dropping and became stable.

Looking into the year of 2021, the operator demand continues to increase, and the supply will remain tight. The price of memories will continue to increase, and the supplier is able to control the pricing. Under the living style derived from the pandemic, the demand for data centers will continue to increase after the 1st quarter of this year, and the demand is expected to continue to the second half of the year. The overall memory export volume surges and price is increasing as the market is under the cycle of price increase; therefore, it is expected that the revenue and profit of this year will show significant growth.

Transcend will promptly adjust the purchase and inventory stragegy in order to gain advantageous supply sources. Despite the PC market downsizes in scale, the 5G, AI and data center related applications are growing, the workstation server demand is increasing and the industrial application field grows relatively fast; therefore, the niche DRAM market share is expected to continue to increase. In addition, all of these applications require massive data storage, therefore the SSD product demand will also continue to increase.

Moreover, consumer flash products, such as USB and memory cards, etc., are expected to head toward the mature market. In 2021, the Company will continue to enhance the development and market expansion for SSDs, external storage devices, dashcam, wearable multimedia devices and various types of industrial flash memory products. Accordingly, the revenue from strategic products and SSD series of products is expected to increase and show growth.

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7.3. Analysis of Cash Flow

7.3.1. Cash Flow Analysis for the Current Year

nalysis of Cash Flow Cash Flow Analysis for the Current Year
2020 Net cash flows from operating activities (248,407) Net cash flows from investing activities 1,764,408 Net cash flows from financing activities (2,022,515) (506,514)	2020	Unit:NT$ thousands 2019 Increase(Decrease) 1,041,438 (1,289,845) 1,098,322 666,086 (2,307,012) 284,497 (167,252) (339,262)
	(506,514)

Regarding the change of cash flow from operating activities, the amount in 2020 decreased by approximately NT$ 1.29 billion from the amount in 2019, and this was mainly due to the adjustment of inventory to cope with the market condition in 2020, such that the inventory level was significantly increased.

7.3.2. Liquidity Analysis for the Coming Year and Remedy for Cash Deficit
Operating activities: The overall gross profit is expected to grow stably and the operating activities will generate net cash inflow.
Investing activities: The Company will continue to perform appropriate investment with idle funds in order to gain stable investment profit, and it is expected to generate net cash inflow.
Financing activities: Net cash outflow primarily from cash dividend payment.

Remedy for Liquidity Shortfall: Not applicable.

7.4. The Effect Upon Financial Operations of Any Major Capital Expenditures During the Most Recent Fiscal Year
In 2020, the Company had no major capital expenditure. Up to the end of March 2021, the consolidated cash and short-term investment position were approximately NT$ 9.9 billion. After the deduction of relevant cash outflow items, the capital was still sufficient; therefore, there was no risk of capital shortage.
7.5. Reinvestment Policy for the Most Recent Fiscal Year, the Main Reasons for Profits or Losses Generated Thereby, Improvement Plans, and Investment Plans for the Coming Year None.

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7.6. Analysis of Risk Management

7.6.1. The Organization Structure of Risk Management

The organizational structure of risk management of the Company is as follows:

Organization name	Scope of responsibility
Board of Directors (including the Audit Committee & Remuneration Committee)	1. Establish risk management policy, structure and culture 2. Ensure the effectiveness of risk management mechanism
Senior management level	1. Execute risk management decision making 2. Cross-department risk management interaction and communication 3. Material risk early warning, assess potential loss, handle follow-up strategy or report of risk mitigation and summarize material risk event handlingresult
Audit Office	1. Monitor and periodically assess whether the risk control of all departments is performed properly 2. Issue an audit report according to the audit result, and propose improvementsuggestionsandfollow upimprovementprogress
All departments of headquarters (Note)	1. Execute daily risk management activities 2. Execution of corporate management and risk decision making 3. Perform risk control activity assessment

Note: The authorities and responsibilities of all departments of headquarters are as follows:

(1) FAD: Responsible for the Company’s financial analysis, accounting affairs, statements preparation, difference analysis, fund management, planning of the Company’s taxes, finance, stock affairs and investments as well as monitoring of the cash flow of all subsidiaries, in order to reduce financial risks.
(2) PUR: Responsible for understanding the quality condition and price trend of raw materials, component parts, machine equipments and office supplies necessary for the products and operation of the Company in order to perform price negotiation and purchase. It is also responsible for maintaining the safety stock of the purchase items and assisting the handling of slow-moving materials, in order to reduce risks of purchase management and slow-moving inventory.
(3) PM & Marketing: Responsible for the Company’s reasonable pricing and fair distribution of products, summarizing and analyzing the product information and pros/cons of each product line, and assisting the management of demands for customization, in order to reduce the risk of product planning management; responsible for matters related to the brand marketing activities, strengthening of brand image, product and market information collection, establishment and execution of marketing plans, contact and application of broadcast media, planning of the Company’s website and assistance to sales activity arrangement and design, etc., in order to reduce risks related to brand marketing.
(4) Sales: Responsible for the establishment of market sales plan, development and maintenance of customers, business management and promotion, collection and response to new business opportunities, in order to reduce the market risks of new customer development, etc.
(5) R&D / Tech Support: Responsible for the research, development and design related matters for various products, research and development target estimation and management, new product research and development, handling and tracking of abnormalities, in order to reduce risks related to research, development and design.

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(6) Production: Responsible for relevant works of production schedule control, product packaging, repair and shipping operation, etc., in order to reduce risk of production capacity and shipping, etc.; responsible for the manufacturing, testing, repair of products and production technologies, improvement of manufacturing quality etc., in order to reduce risks related to production and manufacturing.
(7) ADM: Responsible for the management of corporate legal affairs, contracts, patents and intellectual property rights, human resource management and organization development, etc., in order to reduce risks of legal, administration and human resource management.
(8) Information System: Responsible for planning of information system, network establishment and maintenance and various computer software and hardware installation and configuration management related matters, in order to reduce risks of information security.
(9) Quality Assurance: Responsible for the establishment of the Company’s quality assurance system, promotion of ISO system and QA management system, direct internal and external audit and certifications, in order to reduce quality management related risks.
7.6.2. Effects of Changes in Interest Rates, Foreign Exchange Rates and Inflation on Corporate Finance, and Future Response Measures
Interest rate

Interest rate
			Unit: NT$thousands
	2020		2019
Item	Amount	%	Amount	%
Interest income	73,952	6.10%	191,612	10.76%
Profit from operations	1,211,936	100.00%	1,781,010	100.00%

The interest income in 2020 decreased, which was mainly due to the impact of the capital utilization and reduction of interest rates worldwide.

The Company has a sound financial system. If there is any bank borrowing, the Company enhances the close contact with the bank with respect to the loan interest rate in order to understand the interest rate trend, thereby obtaining the most preferable loan and reference for asset allocation. Regarding the short-term idle capital utilization, the Company mostly uses the NTD time deposits, money market fund and financial instruments with low risk as the investment targets.

Foreign exchange rates

Foreign exchange rates
			Unit: NT$thousands
I	2020		2019
tem	Amount	%	Amount	%
Exchange loss	(54,016)	(4.46%)	(22,690)	(1.27%)
Profit from operations	1,211,936	100.00%	1,781,010	100.00%

The exchange lost in 2020 increased, which was mainly due to the impact of the significant appreciation of NTD to USD.

Due to the impact on the Company’s profit of changes in exchange rate, the Company establishes the following countermeasures:

(1) The export ratio of the Company is approximately 78%, and the main currencies are USD, EUR and JPY. On the other hand, the main currency for purchase is USD. Through appropriate proportion among these three types of currencies and through the offsets between accounts receivable and accounts payable, the exchange rate fluctuation among different currencies could be canceled out, such that the exchange

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rate change would then achieve a certain level of natural hedging effect for the Company.

(2) The Company will adjust the foreign exchange position depending on the exchange rate trend, and use appropriate financial tools to perform reasonable hedging operation.
(3) The Company also considers the exchange rate factor during the sales order quotation in order to ensure the reasonable profit of the Company.
(4) The Company maintains close contact with the foreign exchange department of the financial institution, understands the exchange rate trend and promptly adjusts the foreign exchange position in order to hedge the foreign exchange risk.
(5) The Company complies with the provisions of the “Procedures for Acquisition and Disposal of Assets” and determines the reasonable hedge ratio and hedging tool according to the foreign exchange market trend.

3. Inflation

The main businesses of the Company refer to the manufacturing and sales of computer peripherals and storage application products, and there have been no material impacts due to inflation. The Company periodically adjusts the pricing strategy and pays attention to the market price change in order to prevent possible risks associated with inflation.

7.6.3. Policies, Main Causes of Gain or Loss and Future Response Measures with Respect to High-risk, High-leveraged Investments, Lending or Endorsement Guarantees, and Derivatives Transactions
The Company did not engage in any high-risk or high-leveraged investments in 2020.
In 2020, the financial derivatives transactions performed by the Company were mainly for the purpose of hedging exchange rate risk rather than for trading or speculative operation. In the future, the Company will perform periodic assessment depending upon the operation status of the Company and the change of the market trend in order to flexibly adjust relevant hedging strategies.
Status of the Company’s loaning of funds to others in 2020: None.
Status of the Company’s endorsements and guarantees in 2020: The Company provides a guarantee for Transcend Japan Inc. amounting to JPY 2,000,000 thousands. Pursuant to the Company’s ”Procedures for Endorsement and Guarantee,” the maximum limit of guarantee up to the end of 2020 was NT$ 7,468,810 thousands.
7.6.4. Future Research & Development Projects and Corresponding Budget
R&D projects and current status of pending R&D projects in the most recent year Please refer to “5.1.3. Research and Development Overview.”
R&D budget for further investment
- Please refer to “5.1.3. Research and Development Overview.”
Main factors affecting success of R&D
- Since the entrance barrier for consumer products is relatively low, for new product development, product launch must be made at the right time in order to seize the business opportunity. Accordingly, for R&D, it is necessary to shorten the schedule, and the product function must be able to satisfy the fast and diverse demands from end-users at the same time. The Company will cultivate more senior and specialized R&D talents. In addition, the embedded products require stable quality, and customization must be

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performed according to the customer demands. The Company has established a dedicated unit for such product lines in order to enhance the R&D strength.

7.6.5. Effects of and Response to Changes on Important Domestic and Foreign Policies and Laws Relating to Corporate Finance and Business

During 2020 and as of the date of publication of this annual report, changes in related laws have not had a significant impact on our finance and operations. The Company consistently pays close attention to any changes in local and foreign policies and makes appropriate amendments to our systems when necessary.

7.6.6. Effects of and Response to Changes in Technology and the Industry Relating to Corporate Finance and Business

At the end of 2020, DRAM and NAND approached the end of the price drop cycle. The memory market has started to recover in 2021 and the condition of demand over supply has also occurred. While facing the rapid change of the industrial environment, Transcend will continue to expedite the product research and development, to expand and increase production efficiency and to seek stable supply sources, thereby achieving stable profit for the Company through reasonable pricing strategy and outstanding customer service.

7.6.7. The Impact of Changes on Corporate Image on Corporate Crisis Management, and the Company’s Response Measures

Looking forward into the future, in the era of severe competition in the industry, the top priority for companies is to establish differential competitive advantages. Transcend is equipped with complete fundamental facilities, complete product lines and sound financial structure. In the future, the Company will transform from the traditional production and sales-oriented model to the customer value-oriented model. The three key factors for the transformation include: (1) Enhance service quality to satisfy customer demands; (2) Increase the frequency of video conference with agency to control the overseas markets; and (3) Engage in long-term collaboration with key customers and to achieve win-win situation with customers. In the future, the Company will focus on improving the quality of product and service and will convert customer satisfaction and loyalty into stable profit of the Company.

In addition, to cooperate with the Corporate Governance 3.0 – Sustainable Development Blueprint promoted by the government, Transcend will also actively engage in the corporate governance and is committed to the corporate sustainable operation, enhancement of functions of board of directors and increase of information transparency, etc., in order to improve international competitiveness of the Company and to fulfill the obligations for all shareholders.

In 2020 and as of the date of this Annual Report, there have been no material risk matters affecting the corporate image.

7.6.8. Expected Benefits from, Possible Risks Relating to and Response to Merger and Acquisition Plans None.
7.6.9. Expected Benefits from, Possible Risks Relating to and Response to Factory Expansion Plans

None.

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7.6.10. Risks Relating to and Response to Excessive Concentration of Purchasing or Sales Operations None.
7.6.11. Effects of, Risks Relating to and Response to Large Share Transfers or Changes in Shareholdings by Directors or Shareholders with over 10% Shareholdings None.
7.6.12. Effects of, Risks Relating to and Response to the Changes in Management Rights None.

7.6.13. Litigation or Non-litigation Matters

None.

7.6.14. Other Major Risks and Response Measures

None.

7.7. Other Material Matters

The valuation accounts on the Company’s assets and liabilities include Allowance for loss on accounts receivable, Allowance for loss on decline in market value of inventory, and Financial assets impairment, etc. And the accounting policies adopted are as follows:

Allowance for loss on accounts receivable

The Company classifies customers’ accounts receivable in accordance with the credit rating of the customer. The Group applies the simplified approach to estimate expected credit loss under the provision matrix basis. The Company used historical and timely information to assess the loss rate of accounts receivable.

Allowance for loss on decline in market value of inventory
(1) Inventories are stated at the lower of cost and net realizable value. The item by item approach is used in applying the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and applicable variable selling expenses. When the net realizable value is lower than cost, the difference is recognized as loss on decline in market value of inventory.
(2) When the ending inventory has not changed for more than six months, it is deemed as slow-moving inventory and is listed in the slow-moving inventory report. And loss for slow-moving inventory will be 100% recognized.
(3) When the ending inventory refers to products that the Company no longer manufactured and sold, those products are deemed as slow-moving inventory and are listed in the slow-moving inventory report. And loss for slow-moving inventory will be 100% recognized.

3. Financial assets impairment

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recognition after taking into consideration all reasonable and verifiable information that includes forecasts. On the other hand, for accounts receivable or contract assets that do not contain a significant financing component, the Group recognizes the impairment provision for lifetime ECLs.

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Special Disclosure
8.1. Information of Affiliated Companies
8.1.1. Organizational Chart of Affiliated Companies

==> picture [715 x 239] intentionally omitted <==

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8.1.2. Summary of Affiliated Companies

Name	Date of incorporatio	Address	Paid-in capital	Main scope of operation orproduction
Saffire Investment Ltd.	12/18/1997	Citco Building, Wickhams Cay, P.O.BOX 662, Road Town, Tortola,B.V.I.	1,202,418	Investment holding company
Memhiro Pte. Ltd.	03/14/1998	60 Albert Street, #14-01 OG Albert Complex,189969 Singapore	1,156,920	Investment holding company
Transcend Japan Inc.	12/11/1996	1-8-5,Kuramae, Taito-Ku, Tokyo, 111-0051, Japan	89,103	Wholesale and import of computer memory modules and peripheral
Transcend Information Europe B.V.	06/28/1995	Cairostraat 40, 3047 BC, Rotterdam,The Netherlands	1,693	Wholesale and import of computer memory modules and peripheral
Transcend Information Inc.	03/28/1990	1645 North Brian St. Orange, CA 92867, U.S.A.	38,592	Wholesale and import of computer memory modules and peripheral
Transcend Information Trading GmbH	09/29/1992	Flughafenstrasse 52b(Airport- Center), 22335 Hamburg, Germany	2,288	Wholesale and import of computer memory modules and peripheral
Transcend Korea Inc.	07/09/2008	12F, CBS Bldg., 159-1, Mokdongseo-ro, Yangcheon-gu, Seoul,Korea	6,132	Wholesale and import of computer memory modules and peripheral
Transcend Information (Shanghai), Ltd.	03/25/2005	No.1, Central Avenue, Shanghai Minhang Export Processing Zone,Fengxian District, Shanghai, China.	1,134,178	Manufacture and sales of computer memory modules, storage products and disks. Owned real estate lease.
Transtech Trading (Shanghai) Co., Ltd.	09/21/2006	Room403, Floor 4 ,No. 1010, Kaishiuan Road, Changning District, Shanghai, China	16,310	Wholesale, agent, import and export and retail of computer memory modules, storage products and computer components
Transcend Information (H.K.) Limited	01/08/2013	Unit 17-18, 10/F, Nan Fung Comm Centre, 19 Lam Lok Street, Kowloon Bay,HongKong	7,636	Wholesale and import of computer memory modules and peripheral

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8.1.3. Profile of Directors, Supervisors and General Managers of Affiliated Companies

Name	Title	Name of Represnetative	Number of Shares	Number of Shares
			Shares	%
Memhiro Pte. Ltd.	Director	Shu, Chung-Cheng	55,132,000	100%
	Director	Wang,LiWei
SaffireInvestmentLtd.	Director	Shu, Chung-Cheng	36,600,000	100%
Transcend Japan Inc.	Director	Lin,Taikin	6,400	100%
Transcend Information Europe B.V.	Director	Tellier, Yoann RogerJean	100	100%
TranscendInformation Inc.	Director	Clarence Chan	625,000	100%
Transcend Information Trading GmbH	Director	Shu, Chung-Won	-	100%
	General Manager	Shu, Chung-Won
Transcend Information (Shanghai), Ltd.	Executive Director	Shu, Chung-Cheng	-	100%
Transtech Trading (Shanghai) Co., Ltd.	Executive Director	Shu, Chung-Cheng	-	100%
Transcend Korea Inc.	Director	Shim DongHoon	40,000	100%
	General Manager	Shim Dong Hoon
TranscendInformation(H.K.)Limited	Director	Shu, Chung-Cheng	2,000,000	100%

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8.1.4. Overview of Affiliated Companies’ Operations for 2020

8.1.4. Overview of Affiliated Companies’ Operations for 2020	8.1.4. Overview of Affiliated Companies’ Operations for 2020	8.1.4. Overview of Affiliated Companies’ Operations for 2020	8.1.4. Overview of Affiliated Companies’ Operations for 2020	8.1.4. Overview of Affiliated Companies’ Operations for 2020	8.1.4. Overview of Affiliated Companies’ Operations for 2020	8.1.4. Overview of Affiliated Companies’ Operations for 2020	8.1.4. Overview of Affiliated Companies’ Operations for 2020	8.1.4. Overview of Affiliated Companies’ Operations for 2020
Unit: NT$ thousands
Name	Capital	Total Assets	Total Liabilities	Net Worth	Net Sales	Profit (Loss) from Operations	Profit (Loss) for the year	Earnings per share (NT$)
Transcend Japan Inc.	89,103	445,898	185,198	260,700	871,472	5,756	3,818	596.52
Saffire Investment Ltd.	1,202,418	1,575,207	-	1,575,207	-	(62)	(115,707)	(3.16)
Memhiro Pte Ltd.	1,156,920	1,566,831	31,385	1,535,447	-	(32,856)	(116,331)	(2.11)
Transcend Information Inc.	38,592	236,608	54,979	181,629	639,337	6,971	639	1.02
Trnascend Information Europe B.V.	1,693	263,418	25,924	237,494	634,161	(5,564)	3,399	33,987.74
Transcend Information TradingGmbH	2,288	169,907	57,140	112,767	613,159	(48,783)	(6,983)	-
Transcend Information(Shanghai),Ltd.	1,134,178	1,178,891	46,222	1,132,669	-	(62,453)	(89,936)	-
Transtech Trading (Shanghai)Co.,Ltd.	16,310	226,944	189,846	37,098	753,376	13,257	4,783	-
Transcend Korea Inc.	6,132	78,276	19,172	59,105	289,585	(2,621)	(2,513)	(62.83)
Transcend Information(H.K.)Limited	7,636	36,074	10,173	25,901	258,932	5,126	4,903	2.45

8.1.5. Consolidated Financial Statement of Affiliated Enterprises

Please refer to page 108~176 of this Annual Report.

8.1.6. Affiliation Reports

Not applicable.
8.2. Private Placement of Securities in 2020 and as of the date of this Annual Report None.
8.3. Status of the Company’s Common Shares Held and Disposed by Subsidiaries in 2020 and as of the date of this Annual Report None.

8.4. Other Necessary Supplement

None.

Latest Matters with Material Impacts on Shareholders’ Interests or Security Prices Indicated in Paragraph 3 Subparagraph 2 of Article 36 of the Securities and Exchange Act in 2020 and as of the date of this Annual Report

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Transcend Information, Inc. No. 70, XingZhong Rd., NeiHu Dist., Taipei 114, Taiwan Tel:886-2-2792-8000 Fax:886-2-2792-3375 https://tw.transcend-info.com

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Transcend Information, Inc.

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Chairman: Shu, Chung-Won

AI assistant

Transcend — Annual Report 2020

52092_rns_2021-09-08_77045ec6-5481-4bae-9475-3e945b2137d6.pdf

Transcend Information, Inc. Annual Report 2020

Notice to readers

Spokesperson

Deputy Spokesperson

Headquarters and Plant

Stock Transfer Agent

Auditors

1. Letter to Shareholders

Dear Shareholders,

2. Company Profile

2.1. Date of Incorporation

2.2. Company History

3.2. Background Information on Directors, General Managers, Vice General Managers, Assistant Managers and Heads of Various Department and Branches 3.2.1. Directors

3.2.3. Top 10 Shareholders’ Names and Shareholding Ratio of the Institutional Shareholders: Not applicable.

3.2.4. Professional Qualifications and Independence Analysis of the Directors:

3.2.5. Management Team

2. Remuneration of the General Manager and Vice General Managers

3. Employee Compensation for Managerial Officers

3.3. Implementation of Corporate Governance

3.3.1. Operations of the Board of Directors

3.3.4. Composition, Responsibilities and Operations of the Remuneration Committee

1. Information on the members of the Remuneration Committee

2. Operation of Remuneration Committee:

3.3.6. Fulfillment of CSR and Deviations from the "Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies"

3.3.10. Implementation of Internal Control Systems

1. Statement of Internal Control Systems

Transcend Information, Inc. Statement of Internal Control Systems

March 4, 2021

2. Material resolutions of Board of Directors Meetings

3. Material resolutions of Audit Committee Meetings

4. Material resolutions of Remuneration Committee Meetings

3.4. Information on CPA fees

3.7.2. Shares Trading with Related Parties

3.7.3. Shares Pledge with Related Parties

4. Capital Overview

4.1. Capital and Shares

4.1.1. Source of Capital

Information for Shelf Registration: None.

4.1.2. Shareholder Structure

4.1.3. Shareholding Distribution Status

4.1.4. List of Major Shareholders

4.1.5. Market Price, Net Worth, Earnings, and Dividends per Share in the Past Two Years

4.1.9. Buy-back of Treasury Stock

4.3. Status of Preferred Shares

4.5. Status of Employee Stock Option

None.

4.6. Status of New Restricted Employee Shares

5.1. Business Activities

5.1.1. Business Scope

(1) Main Products

A. DRAM Modules

B. Flash Products

C. Multimedia Products

C. Multimedia Products

5.1.2. Industry Overview

(2) Flash Memory Industry Overview

2. The Links Between Upstream, Midstream and Downstream of the Industry Supply Chain

(1) Supply and Logistics

(2) Innovation and Production

5.1.3. Technologies, Research and Development Overview

2. Ongoing R&D Projects

5.1.4. Long-term and Short-term Business Development Plans

1. Short-term Business Development Plan

(1) Embedded Business Management

(2) Expansion of R&D Department

2. Long-term Business Development Plan

A. Global Comprehensive Planning

B. Investment in Marketing Activities

C. Deep-rooted in Local Market

A. Completeness and Diversity of Product Lines

5.2. Markets and Overview of Production and Sales

Favorable Factors

Unfavorable Factors and Actions

 Action

 Action

2. Main Products and Their Manufacturing Processes

5.2.3. Supply Status of Major Raw Materials

Transcend Annual Report 2020