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Transcend Audit Report / Information 2021

Dec 31, 2021

52092_rns_2021-12-31_a390a811-bb44-4bff-8faf-3814a7541352.pdf

Audit Report / Information

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TRANSCEND INFORMATION, INC. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS' REVIEW REPORT JUNE 30, 2021 AND 2020

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

TRANSCEND INFORMATION, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS JUNE 30, 2021, DECEMBER 31, 2020 AND JUNE 30, 2020 (Expressed in thousands of New Taiwan Dollars) (The balance sheets as of June 30, 2021 and 2020 are reviewed, not audited)

June 30, 2021 December 31, 2020 June 30, 2020
Assets Notes AMOUNT % AMOUNT % AMOUNT %
Current assets
Cash and cash equivalents 6(1) \$
766,594		 3 \$
736,852		 4 \$
1,987,626		 9
Financial assets at fair value through 6(2)
profit or loss - current 4,428,859 20 3,510,998 17 2,225,342 10
Current financial assets at amortised 6(3)
cost, net 5,479,216 25 5,659,889 27 7,051,329 32
Notes receivable, net 6(4) - - 759 - 524 -
Accounts receivable, net 6(4) 1,827,184 8 1,434,454 7 1,315,397 6
Accounts receivable due from 7
related parties, net 21 - - - 6 -
Other receivables 89,180 - 71,351 - 103,600 1
Inventories, net 6(5) 4,257,478 19 3,190,466 15 3,068,658 14
Other current assets 12,373 - 10,495 - 12,228 -
Total Current Assets 16,860,905 75 14,615,264 70 15,764,710 72
Non-current assets
Non-current financial assets at fair 6(2)
value through profit or loss 113,297 - 744,922 4 535,000 2
Non-current financial assets at fair 6(6)
value through other comprehensive
income 272,705 1 111,000 1 115,043 1
Non-current financial assets at 6(3)
amortised cost - - - - 145,781 1
Investments accounted for using 6(7)
equity method 118,587 1 95,724 - 92,091 -
Property, plant and equipment, net 6(8) and 8 2,173,809 10 2,282,324 11 2,341,969 11
Right-of-use assets 6(9) and 7 164,526 1 187,079 1 209,358 1
Investment property, net 6(11) 2,606,644 12 2,612,426 13 2,616,481 12
Deferred tax assets 63,962 - 41,472 - 65,167 -
Other non-current assets 6(12) 46,398 - 47,411 - 46,407 -
Total Non-current Assets 5,559,928 25 6,122,358 30 6,167,297 28
Total Assets \$
22,420,833		 100 \$
20,737,622		 100 \$
21,932,007		 100

(Continued)

TRANSCEND INFORMATION, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS JUNE 30, 2021, DECEMBER 31, 2020 AND JUNE 30, 2020 (Expressed in thousands of New Taiwan Dollars) (The balance sheets as of June 30, 2021 and 2020 are reviewed, not audited)

June 30, 2021 December 31, 2020 June 30, 2020
Liabilities and Equity Notes AMOUNT % AMOUNT % AMOUNT %
Current liabilities
Financial liabilities at fair value 6(2)
through profit or loss - current \$ - - \$
-		 - \$
68		 -
Accounts payable 1,538,344 7 1,134,266 6 1,049,870 5
Accounts payable - related parties 7 38,310 - 37,416 - 40,396 -
Other payables 6(16) 1,580,822 7 246,635 1 2,145,191 10
Current tax liabilities 302,654 2 295,381 2 177,033 1
Current lease liabilities 7 16,670 - 51,010 - 52,267 -
Other current liabilities 38,893 - 73,046 - 64,297 -
Total Current Liabilities 3,515,693 16 1,837,754 9 3,529,122 16
Non-current liabilities
Deferred tax liabilities 133,990 1 139,700 1 150,530 1
Non-current lease liabilities 7 30,578 - 34,705 - 39,284 -
Other non-current liabilities 51,065 - 53,437 - 56,140 -
Total Non-current Liabilities 215,633 1 227,842 1 245,954 1
Total Liabilities 3,731,326 17 2,065,596 10 3,775,076 17
Equity attributable to owners of
parent
Share capital 6(14)
Common stock 4,290,617 19 4,290,617 21 4,290,617 20
Capital surplus 6(15)
Capital surplus 3,730,838 17 3,945,369 19 3,945,276 18
Retained earnings 6(16)
Legal reserve 4,803,503 21 4,683,878 22 4,683,878 21
Special reserve 117,244 1 130,902 1 130,902 1
Unappropriated retained earnings 5,927,184 26 5,738,504 28 5,270,568 24
Other equity interest 6(17)
Other equity interest ( 179,879)( 1)( 117,244)( 1)( 164,310)( 1)
Total Equity 18,689,507 83 18,672,026 90 18,156,931 83
Significant contingent liabilities and 9
unrecognized contract commitments
Total Liabilities and Equity \$ 22,420,833 100 \$
20,737,622		 100 \$
21,932,007		 100

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

TRANSCEND INFORMATION, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME SIX MONTHS ENDED JUNE 30, 2021 AND 2020

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

(UNAUDITED)

Three months ended June 30 Six months ended June 30
2021 2020 2021 2020
Items Notes AMOUNT % AMOUNT % AMOUNT % AMOUNT %
Operating Revenue 6(18) and 7 \$ 3,794,184 100 \$ 2,485,718 100 \$ 7,292,804 100 \$ 5,706,128 100
Operating Costs 6(5)(22) and 7 ( 2,477,186) ( 66) ( 1,897,993) ( 77) ( 5,122,958) ( 70) ( 4,295,037) ( 75)
Gross Profit 1,316,998 34 587,725 23 2,169,846 30 1,411,091 25
Operating Expenses
Sales and marketing expenses		 6(22) ( 218,284) ( 6) ( 174,681) ( 7) ( 435,003) ( 6) ( 384,742) ( 7)
Administrative expenses ( 80,597) ( 2) ( 70,082) ( 3) ( 152,832) ( 2) ( 224,864) ( 4)
Research and development expenses ( 39,838) ( 1) ( 33,042) ( 1) ( 81,897) ( 1) ( 74,108) ( 1)
Reversal of impairment loss determined 6(4)
in accordance with IFRS 9 3,541 - 88 - 161 - 139 -
Total operating expenses ( 335,178) ( 9) ( 277,717) ( 11) ( 669,571) ( 9) ( 683,575) ( 12)
Operating Profit 981,820 25 310,008 12 1,500,275 21 727,516 13
Non-operating Income and Expenses
Interest income 6(19) 8,837 - 21,243 1 66,039 1 45,468 1
Other income 6(20) 9,462 - 9,866 - 18,196 - 19,364 -
Other gains and losses
Net gain from derecognizing financial		 6(21) 2,770 - ( 14,089) - 71,797 1 110,338 2
assets measured at amortised cost - - 3,196 - - - 8,995 -
Finance costs
Share of profit (loss) of associates and		 6(9)
6(7)		 ( 346) - ( 505) - ( 718) - ( 1,022) -
joint ventures accounted for using the
equity method 13,905 1 ( 3,850) - 22,662 - ( 4,932) -
Total non-operating income and
expenses 34,628 1 15,861 1 177,976 2 178,211 3
Profit before Income Tax 1,016,448 26 325,869 13 1,678,251 23 905,727 16
Income tax expense 6(23) ( 196,084) ( 5) ( 61,262) ( 2) ( 298,501) ( 4) ( 177,000) ( 3)
Profit for the Period \$ 820,364 21 \$ 264,607 11 \$ 1,379,750 19 \$ 728,727 13
Other Comprehensive Income (Loss)
Components of other comprehensive
income (loss) that will not be
reclassified to profit or loss
Unrealized gain on financial assets at		 6(6)(17)
fair value through other comprehensive
income
Share of other comprehensive income		 \$ 6,379 - \$ 7,032 - \$ 1,167 - \$ 879 -
(loss) of associates and joint ventures
accounted for using the equity method		 - - - - 200 - ( 411) -
Components of other comprehensive
income (loss) that will be reclassified
to profit or loss
Exchange differences on translation of
foreign financial statements
Income tax related to components of		 6(17)
6(17)(23)		 ( 24,362) - ( 27,664) ( 1) ( 68,747) ( 1) ( 42,859) ( 1)
other comprehensive income that will be
reclassified to profit or loss		 4,873 - 5,533 - 13,749 - 8,572 -
Other Comprehensive Loss for the
Period (\$ 13,110) - (\$ 15,099) ( 1) (\$ 53,631) ( 1) (\$ 33,819) ( 1)
Total Comprehensive Income \$ 807,254 21 \$ 249,508 10 \$ 1,326,119 18 \$ 694,908 12
Net profit attributable to:
Owners of parent		 \$ 820,364 21 \$ 264,607 11 \$ 1,379,750 19 \$ 728,727 13
Comprehensive income attributable to:
Owners of parent \$ 807,254 21 \$ 249,508 10 \$ 1,326,119 18 \$ 694,908 12
Earnings Per Share (in dollars) 6(24)
Basic earnings per share \$ 1.91 \$ 0.62 \$ 3.22 \$ 1.70
Diluted earnings per share \$ 1.91 \$ 0.62 \$ 3.21 \$ 1.70

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

TRANSCEND INFORMATION, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY SIX MONTHS ENDED JUNE 30, 2021 AND 2020 (Expressed in thousands of New Taiwan Dollars) (UNAUDITED)

Equity attributable to owners of the parent
Capital Reserves Retained Earnings Other Equity Interest
Notes Common stock Additional paid-in
capital		 Donated assets
received		 Net assets from
merger		 Legal reserve Special reserve Unappropriated
retained earnings		 Exchange
differences on
translation of
foreign financial
statements		 Unrealized gain or
loss on financial
assets at fair value
through other
comprehensive
income		 Treasury shares Total equity
Six months ended June 30, 2020
Balance at January 1, 2020
Net income for the period
Other comprehensive income (loss) 6(6)(17)
Total comprehensive income (loss)		 \$ 4,307,617
-
-
-		 \$ 4,307,541
-
-
-		 \$
4,185
-
-
-		 \$
35,128
-
-
-		 \$ 4,510,981
-
-
-		 \$ 61,572
-
-
-		 \$ 6,427,300
728,727
(
411 ) (
728,316		 (\$
(		 138,461 )
-
34,287 )
34,287 )		 \$ 7,559
-
879
879		 (\$ 116,574 )
-
-
-		 ( \$ 19,406,848
728,727
33,819 )
694,908
Appropriations and distribution of 2019
6(16)
earnings
Legal reserve
Cash dividends		 -
-		 -
-		 -
-		 -
-		 172,897
-		 -
-		 (
172,897 )
(
1,544,622 )		 -
-		 -
-		 -
-		 ( -
1,544,622 )
Special reserve
Cash payment from capital surplus
6(16)		 -
-		 -
(
386,156 )		 -
-		 -
-		 -
-		 69,330
-		 (
69,330 )
-		 -
-		 -
-		 -
-		 ( -
386,156 )
Purchase of treasury stock
6(14)
Cancellation of treasury stock
6(14)		 -
(
17,000 ) (		 -
15,422 )		 -
-		 -
-		 -
-		 -
-		 -
(
98,199 )		 -
-		 -
-		 ( 14,047 ) (
130,621		 14,047 )
-
Balance at June 30, 2020
Six months ended June 30, 2021		 \$ 4,290,617 \$ 3,905,963 \$
4,185		 \$
35,128		 \$ 4,683,878 \$ 130,902 \$ 5,270,568 (\$ 172,748 ) \$ 8,438 \$ - \$ 18,156,931
Balance at January 1, 2021
Net income for the period
Other comprehensive income (loss) 6(6)(17)
Total comprehensive income (loss)		 \$ 4,290,617
-
-
-		 \$ 3,905,963
-
-
-		 \$
4,278
-
-
-		 \$
35,128
-
-
-		 \$ 4,683,878
-
-
-		 \$ 130,902
-
-
-		 \$ 5,738,504
1,379,750
200
1,379,950		 (\$
(
(		 121,639 )
-
54,998 )
54,998 )		 \$ 4,395
-
1,167
1,167		 \$ -
-
-
-		 ( \$ 18,672,026
1,379,750
53,631 )
1,326,119
Appropriations and distribution of 2020
6(16)
earnings
Legal reserve		 - - - - 119,625 - (
119,625 )		 - - - -
Cash dividends
Reversal of special reserve		 -
-		 -
-		 -
-		 -
-		 -
-		 ( -
13,658 )		 (
1,094,107 )
13,658		 -
-		 -
-		 -
-		 ( 1,094,107 )
-
Cash payment from capital surplus
6(16)
Net gain on disposal of financial assets
at fair value through other
comprehensive income		 6(6)(17) -
-		 (
214,531 )
-		 -
-		 -
-		 -
-		 -
-		 -
8,804		 -
-		 ( -
8,804 )		 -
-		 ( 214,531 )
-
Balance at June 30, 2021 \$ 4,290,617 \$ 3,691,432 \$
4,278		 \$
35,128		 \$ 4,803,503 \$ 117,244 \$ 5,927,184 (\$ 176,637 ) (\$ 3,242 ) \$ - \$ 18,689,507

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

TRANSCEND INFORMATION, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS SIX MONTHS ENDED JUNE 30, 2021 AND 2020 (Expressed in thousands of New Taiwan Dollars) (UNAUDITED)

Six months ended June 30
Notes 2021 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax
Adjustments		 \$ 1,678,251 \$ 905,727
Adjustments to reconcile profit (loss)
Net gain on financial assets at fair value through profit or loss 6(2)(21) ( 79,549 ) ( 40,965 )
Share of profit or loss of associates and joint ventures 6(7)
accounted for using the equity method ( 22,662 ) 4,932
Gain on reversal of expected credit loss 6(4) ( 161 ) ( 139 )
Loss on disposal of property, plant and equipment 6(21) - 38
Depreciation 6(22) 128,063 130,508
Interest income 6(19) ( 66,039 ) ( 45,468 )
Interest expense 6(9) 718 1,022
Dividend income 6(6)(21) ( 1,300 ) -
Changes in operating assets and liabilities
Changes in operating assets
Financial assets mandatorily measured at fair value through
profit or loss
Notes receivable		 ( 912,700 )
759		 361,114
2,530
Accounts receivable ( 392,391 ) 163,333
Accounts receivable - related parties ( 21 ) 2
Other receivables ( 21,967 ) 15,530
Inventories ( 1,067,012 ) ( 1,005,999 )
Other current assets ( 1,878 ) 5,745
Changes in operating liabilities
Accounts payable 404,078 44,520
Accounts payable - related parties 894 ( 12,432 )
Other payables 25,549 ( 52,702 )
Other current liabilities ( 34,153 ) 48,985
Other non-current liabilities ( 2,372 ) 2,956
Cash (outflow) inflow generated from operations ( 363,893 ) 529,237
Dividends received
Interest received		 1,300 -
Income tax paid ( 70,177
305,679 )		 ( 50,415
69,360 )
Net cash flows (used in) from operating activities ( 598,095 ) 510,292
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from disposal of non-current financial assets at fair
value through profit or loss 773,971 -
Acquisition of non-current financial assets at fair value through
profit or loss ( 68,088 ) ( 500,000 )
Proceeds from disposal of financial assets at amortised cost 2,162,810 3,736,828
Acquisition of financial assets at amortised cost ( 1,984,472 ) ( 2,880,958 )
Proceeds from disposal of financial assets at fair value through 6(6)
other comprehensive income 54,426 -
Acquisition of non-current financial assets at fair value through
other comprehensive income
Acquisition of property, plant and equipment		 6(8) (
(		 214,964 )
8,099 )		 ( -
15,926 )
Acquisition of investment property 6(11) ( 1,072 ) ( 1,082 )
Decrease in other non-current financial assets 1,013 4,787
Net cash flows from investing activities 715,525 343,649
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of lease liabilities ( 47,259 ) ( 45,998 )
Purchase of treasury stock - ( 37,371 )
Net cash flows used in financing activities ( 47,259 ) ( 83,369 )
Effect of exchange rate changes ( 40,429 ) ( 16,353 )
Net increase in cash and cash equivalents 29,742 754,219
Cash and cash equivalents at beginning of period 736,852 1,233,407
Cash and cash equivalents at end of period \$ 766,594 \$ 1,987,626

TRANSCEND INFORMATION, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 2021 AND 2020 (Expressed in thousands of New Taiwan Dollars, except as otherwise indicated)

(UNAUDITED)

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.

2. 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 August 5, 2021.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

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

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

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

Note: Earlier application from January 1, 2021 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.

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

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

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

(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:

Effective date
by International
Accounting
New Standards, Interpretations and Amendments Standards Board
Amendments to IFRS 10 and IAS 28, 'Sale or contribution of assets To be determined
between an investor and its associate or joint venture' by International
Accounting
Standards Board
IFRS 17, 'Insurance contracts' January 1, 2023
Amendments to IFRS 17, 'Insurance contracts' January 1, 2023
Amendments to IAS 1, 'Classification of liabilities as current or non January 1, 2023
current'
Amendments to IAS 1, 'Disclosure of accounting policies' January 1, 2023
Amendments to IAS 8, 'Definition of accounting estimates' January 1, 2023
Amendments to IAS 12, 'Deferred tax related to assets and liabilities January 1, 2023
arising from a single transaction'

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

(1) Compliance statement

  • A. The consolidated financial statements of the Group have been prepared in accordance with the "Regulations Governing the Preparation of Financial Reports by Securities Issuers" and the International Accounting Standard 34, 'Interim financial reporting' as endorsed by the FSC.
  • B. These consolidated financial statements are to be read in conjunction with the consolidated financial statements for the year ended December 31, 2020.

(2) Basis of preparation

  • A. Except for the following items, the consolidated financial statements have been prepared under the historical cost convention:
  • (a) Financial assets 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 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:

Basis for preparation of these consolidated financial statements is the same as that for the preparation of the consolidated financial statements as of and for the year ended December 31, 2020.

Ownership (%)
Name of
Investor		 Name of
Subsidiary		 Main Business
Activities		 June
30, 2021		 December
31, 2020		 June
30, 2020		 Description
Transcend
Taiwan		 Saffire Investment Ltd.
(Saffire)		 Investment holding
company		 100 100 100
〞 Transcend Japan Inc.
(Transcend Japan)		 Wholesale and import
of computer memory
modules and peripheral
products		 100 100 100
〞 Transcend Information
Inc. (Transcend USA)		 Wholesale and import
of computer memory
modules and peripheral
products		 100 100 100 Note
〞 Transcend Korea Inc.
(Transcend Korea)		 Wholesale and import
of computer memory
modules and peripheral
products		 100 100 100 "
Saffire
Investment Ltd.		 Memhiro Pte. Ltd.
(Memhiro)		 Investment holding
company		 100 100 100
Memhiro
Pte. Ltd.		 Transcend Information
Europe B.V.
(Transcend Europe)		 Wholesale and import
of computer memory
modules and peripheral
products		 100 100 100 Note
〞 Transcend Information
Trading GmbH
(Transcend Germany)		 Wholesale and import
of computer memory
modules and peripheral
products		 100 100 100 "
〞 Transcend Information
(Shanghai), Ltd.
(Transcend Shanghai)		 Manufacture and sales
of computer memory
modules, storage
products and disks		 100 100 100 "
〞 Transtech Trading
(Shanghai) Co., Ltd.
(Transtech Shanghai)		 Wholesale, agent, import
and export and retail of
computer memory
modules, storage products
and computer components		 100 100 100 "
〞 Transcend Information
(Hong Kong), Ltd.
(Transcend Hong
Kong)		 Wholesale and import
of computer memory
modules and peripheral
products		 100 100 100 "

B. Subsidiaries included in the consolidated financial statements:

Note: The financial statements of insignificant subsidiary as of and for the six months ended June 30, 2021 and 2020 were not reviewed by independent auditors.

  • 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.

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

There was no significant change during this period. Please refer to Note 5 in the consolidated financial statements for the year ended December 31, 2020 for related information.

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

June 30, 2021 December 31, 2020 June 30, 2020
Cash on hand and petty cash \$
667		 \$
844		 \$
725
Checking accounts and
demand deposits 765,927 736,008 1,986,901
\$
766,594		 \$
736,852		 \$
1,987,626

A. The Group transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.

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

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

Items June 30, 2021 December 31, 2020 June 30, 2020
Current items:
Financial assets
mandatorily measured at
fair value through profit
or loss
Beneficiary certificates \$
4,401,465		 \$
3,501,229		 \$
2,199,435
Financial products 12,928 - 17,093
Valuation adjustments 14,466 9,769 8,814
\$
4,428,859		 \$
3,510,998		 \$
2,225,342
Financial liabilities
mandatorily measured at
fair value through profit
or loss
Non-hedging derivatives \$
-		 \$
-		 \$
68
Items June 30, 2021 December 31, 2020 June 30, 2020
Non-current items:
Financial assets
mandatorily measured at
fair value through profit
or loss
Beneficiary certificates \$
88,278		 \$
611,063		 \$
500,000
Valuation adjustments 25,019 133,859 35,000
\$
113,297		 \$
744,922		 \$
535,000

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

Three months ended June 30,
2021 2020
Financial assets and liabilities mandatorily
measured at fair value through profit or loss
Beneficiary certificates \$ 6,741 \$ 37,453
Financial products 149 234
Non-hedging derivatives - ( 68)
\$ 6,890 \$ 37,619
Six months ended June 30,
2021		 2020
Financial assets mandatorily measured at fair
value through profit or loss
Beneficiary certificates \$ 79,256 \$ 40,680
Financial products 293 353
Non-hedging derivatives - ( 68)
\$ 79,549 \$ 40,965
  • B. The Group has no financial assets at fair value through profit or loss pledged to others.
  • C. The Group entered into contracts relating to derivative financial liabilities which were not accounted for under hedge accounting. The information is listed below:
June 30, 2020
Contract amount
Derivative financial liabilities (Notional principal) (In thousands) Contract period
Forward foreign exchange
contracts
-Sell USD / Buy NTD		 USD \$
2,000		 2020/6/18~2020/7/30

There were no such transactions on June 30, 2021 and December 31, 2020.

(3) Financial assets at amortised cost

Items June 30, 2021 December 31, 2020 June 30, 2020
Current items:
Time deposits with \$
5,479,216		 \$
5,659,889		 \$
6,636,509
original maturity of more
than three months
Bonds with repurchase
agreement - - 414,820
\$
5,479,216		 \$
5,659,889		 \$
7,051,329
Non-current items:
Foreign currency bonds \$
-		 \$
-		 \$
145,781

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

Three months ended June 30,
2021 2020
Interest income \$
5,767		 \$
20,115
Gain on disposal - 3,196
\$
5,767		 \$
23,311
Six months ended June 30,
2021 2020
Interest income \$
13,802		 \$
43,166
Gain on disposal - 8,995
\$
13,802		 \$
52,161
  • 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 June 30, 2021, December 31, 2020 and June 30, 2020, 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 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.

(4) Notes and accounts receivable

June 30, 2021 December 31, 2020 June 30, 2020
Notes receivable \$ - \$
759		 \$
524
Accounts receivable \$ 1,831,112 \$
1,438,764		 \$
1,320,269
Less: Loss allowance ( 3,928) ( 4,310) ( 4,872)
\$ 1,827,184 \$
1,434,454		 \$
1,315,397

A. As of June 30, 2021, December 31, 2020 and June 30, 2020, the estimated sales discounts and allowances were \$77,162, \$93,140 and \$61,544, 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:

June 30, 2021
Accounts receivable Notes receivable
Not past due \$
1,630,779		 \$ -
Up to 30 days 182,864 -
31 to 90 days 3,306 -
91 to 180 days 2,798 -
Over 180 days 11,365 -
\$
1,831,112		 \$ -
December 31, 2020
Accounts receivable Notes receivable
Not past due \$
1,177,490		 \$ 759
Up to 30 days 237,151 -
31 to 90 days 8,835 -
91 to 180 days 406 -
Over 180 days 14,882 -
\$
1,438,764		 \$ 759
June 30, 2020
Accounts receivable Notes receivable
Not past due \$
1,186,204		 \$ 524
Up to 30 days 115,293 -
31 to 90 days 4,166 -
91 to 180 days 321 -
Over 180 days 14,285 -
\$
1,320,269		 \$ 524

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 June 30, 2021, December 31, 2020 and June 30, 2020, notes receivable and accounts receivable were all from contracts with customers. As of January 1, 2020, the balance of notes receivable and accounts receivable from contracts with customers amounted to \$1,487,056.
  • E. As at June 30, 2021, December 31, 2020 and June 30, 2020, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the Group's notes receivable were \$0, \$759 and \$524, respectively; the maximum exposure to credit risk in respect of the amount that best represents the Group's accounts receivable were \$1,827,184, \$1,434,454 and \$1,315,397, respectively.
  • 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 June 30, 2021, December 31, 2020 and June 30, 2020, 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 June 30, 2021, December 31, 2020 and June 30, 2020, the provision matrix is as follows:
Not 1-180 days Over 180 days
past due past due past due Total
June 30, 2021
Expected loss rate 0.003%~0.440% 0.016%~35% 25%~100%
Total book value \$
1,630,779		 \$
188,968		 \$
11,365		 \$
1,831,112
Not 1-180 days Over 180 days
past due past due past due Total
December 31, 2020
Expected loss rate 0.003%~0.386% 0.018%~41% 25%~100%
Total book value \$
1,177,490		 \$
246,392		 \$
14,882		 \$
1,438,764
Not 1-180 days Over 180 days
past due past due past due Total
June 30, 2020
Expected loss rate 0.009%~0.5% 0.05%~62% 25%~100%
Total book value \$
1,186,204		 \$
119,780		 \$
14,285		 \$
1,320,269

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

2021
Accounts receivable Notes receivable
At January 1 \$
4,310		 \$
-
Reversal of impairment (
161)		 -
Write-offs (
42)		 -
Effect of exchange rate changes (
179)		 -
At June 30 \$
3,928		 \$
-
2020
Accounts receivable Notes receivable
At January 1 \$ 5,471 \$
-
Reversal of impairment ( 139) -
Reclassified to overdue receivables ( 178) -
Write-offs ( 222) -
Effect of exchange rate changes ( 60) -
At June 30 \$ 4,872 \$
-

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

(5) Inventories

June 30, 2021
Allowance for
Cost valuation loss Book value
Raw materials \$
2,836,590		 (\$ 37,918) \$
2,798,672
Work in progress 684,364 ( 699) 683,665
Finished goods 777,626 ( 2,485) 775,141
\$
4,298,580		 (\$ 41,102) \$
4,257,478
December 31, 2020
Allowance for
Cost valuation loss Book value
Raw materials \$
2,161,744		 (\$ 28,593) \$
2,133,151
Work in progress 487,023 ( 1,023) 486,000
Finished goods 576,861 ( 5,546) 571,315
\$
3,225,628		 (\$ 35,162) \$
3,190,466
June 30, 2020
Allowance for
Cost valuation loss Book value
Raw materials \$
2,149,708		 (\$ 35,459) 2,114,249
Work in progress 579,883 ( 1,637) 578,246
Finished goods 380,430 ( 4,267) 376,163
\$ 3,110,021 (\$ 41,363) \$ 3,068,658

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

Three months ended June 30,
2021 2020
Cost of goods sold \$
2,464,595		 \$
1,887,744
Loss on decline in market value of inventory 12,591 10,249
\$
2,477,186		 \$
1,897,993
Six months ended June 30,
2021 2020
Cost of goods sold \$
5,117,018		 \$
4,282,457
Loss on decline in market value of inventory 5,940 12,580
\$
5,122,958		 \$
4,295,037

B. No inventories were pledged to others.

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

Items June 30, 2021
December 31, 2020		 June 30, 2020
Non-current items:
Equity instruments
Listed stocks \$ 274,822 \$ 105,480 \$
105,480
Others 1,125 1,125 1,125
275,947 106,605 106,605
Valuation adjustments ( 3,242) 4,395 8,438
\$ 272,705 \$ 111,000 \$
115,043
  • 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 \$272,705, \$111,000 and \$115,043 as at June 30, 2021, December 31, 2020 and June 30, 2020, respectively.
  • B. For the six months ended June 30, 2021, the Group disposed equity investments whose fair value was \$54,426, and accumulated gain on disposal was transferred into retained earnings in the amount of \$8,804. There was no such transaction for the six months ended June 30, 2020.

C. 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:

Three months ended June 30,
2021 2020
Equity instruments at fair value through
other comprehensive income
Fair value change recognized in other
comprehensive income \$
6,379		 \$
7,032
Cumulative gains reclassified to
retained earnings due to derecognition \$
4,661		 \$
-
Dividend income recognized in profit or loss
Held at end of period \$
1,300		 \$
-
Derecognized during the period - -
\$
1,300		 \$
-
Six months ended June 30,
2021 2020
Equity instruments at fair value through
other comprehensive income
Fair value change recognized in other
comprehensive income \$
1,167		 \$
879
Cumulative gains reclassified to
retained earnings due to derecognition \$
8,804		 \$
-
Dividend income recognized in profit or loss
Held at end of period \$
1,300		 \$
-
Derecognized during the period - -
\$
1,300		 \$
-

D. 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 June 30, 2021 December 31, 2020 June 30, 2020
Taiwan IC Packaging Corp. \$
118,587		 \$ 95,724 \$ 92,091

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

Principal Shareholding ratio
Associate place of June December June Nature of Method of
name business 30, 2021 31, 2020 30, 2020 relationship measurement
Taiwan IC Taiwan 12.74% 12.74% 12.74% Note Equity method
Packaging Corp.
  • 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.
  • C. The summarized financial information of the associate that is material to the Group is as follows:

Balance sheet

Taiwan IC Packaging Corp.
June 30, 2021 December 31, 2020 June 30, 2020
Current assets \$ 1,081,565 \$
942,507		 \$
914,025
Non-current assets 1,245,724 1,224,429 1,168,033
Current liabilities ( 310,963) ( 327,211) ( 272,079)
Non-current liabilities ( 84,896) ( 85,765) ( 86,505)
Total net assets \$ 1,931,430 \$
1,753,960		 \$
1,723,474
Share in associate's net
assets		 \$ 246,092 \$
223,480		 \$
219,596
Net equity differences ( 127,505) ( 127,756) ( 127,505)
\$ 118,587 \$
95,724		 \$
92,091

Statement of comprehensive income

Taiwan IC Packaging Corp.
Three months ended June 30,
A 2021 2020
Revenue \$ 498,653 \$ 258,605
Gain (loss) for the period from continuing
operations		 \$ 109,135 (\$ 29,966)
Total comprehensive income (loss) \$ 109,135 (\$ 29,966)
Dividends received from associates \$ - \$ -
Taiwan IC Packaging Corp.
Six months ended June 30,
A 2021 2020
Revenue \$ 909,836 \$ 532,519
Gain (loss) for the period from continuing
operations		 \$ 177,470 (\$ 39,952)
Total comprehensive income (loss) \$ 177,470 (\$ 39,952)
Dividends received from associates \$ - \$ -

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

Three months ended June 30,
Investee Company 2021 2020
Taiwan IC Packaging Corp. \$
(\$
13,905		 3,850)
Six months ended June 30,
Investee Company 2021 2020
Taiwan IC Packaging Corp. \$
(\$
22,662		 4,932)

E. The Group's investment in Taiwan IC Packaging Corporation has quoted market price. The fair value of Taiwan IC Packaging Corporation was \$355,349, \$239,053 and \$169,829 as of June 30, 2021, December 31, 2020 and June 30, 2020, respectively.

(8) Property, plant and equipment

2021
Buildings
and		 Office
Land structures Machinery Vehicles equipment Others Total
At
1
January
Cost \$ 725
983
,		 \$
2
601
967
,
,		 \$ 418
357
,		 \$ 26
892
,		 \$ 28
116
,		 \$ 52
518
,		 \$ 3
853
833
,
,
Accumulated
depreciation		 - ( 1
257
196)
,
,		 ( 243
085)
,		 ( 12
767)
,		 ( 21
134)
,		 ( 37
327)
,		 ( 1
571
509)
,
,
\$ 725
983
,		 \$
1
344
771
,
,		 \$ 175
272
,		 \$ 14
125
,		 \$ 982
6
,		 \$ 15
191
,		 \$ 2
282
324
,
,
Opening
book
January
1
net
amount
as at		 \$ 725
983
,		 \$
1
344
771
,
,		 \$ 175
272
,		 \$ 14
125
,		 \$ 982
6
,		 \$ 15
191
,		 \$ 2
282
324
,
,
Additions
(including
transfers)		 - - 1
793
,		 - 5
631
,		 675 8
099
,
Depreciation
charge		 - ( 53
223)
,		 ( 32
704)
,		 ( 2
143)
,		 ( 1
539)
,		 ( 2
958)
,		 ( 92
567)
,
exchange
differences
Net		 ( 9
424)
,		 (
14
245)
,		 ( 69) ( 46) ( 223) ( 40) ( 24
047)
,
Closing
book
June
30
net
amount
as at		 \$ 716
559
,		 \$
1
277
303
,
,		 \$ 144
292
,		 \$ 11
936
,		 \$ 10
851
,		 \$ 12
868
,		 \$ 2
173
809
,
,
At
30
June
Cost \$ 716
559
,		 \$
2
570
540
,
,		 \$ 400
021
,		 \$ 26
738
,		 \$ 30
933
,		 \$ 47
640
,		 \$ 3
792
431
,
,
Accumulated
depreciation		 - ( 1
293
237)
,
,		 ( 255
729)
,		 ( 14
802)
,		 ( 20
082)
,		 ( 34
772)
,		 ( 1
618
622)
,
,
\$ 716
559
,		 \$
1
277
303
,
,		 \$ 144
292
,		 \$ 11
936
,		 \$ 10
851
,		 \$ 12
868
,		 \$ 2
173
809
,
,
2020
Buildings
and		 Office
Land structures Machinery Vehicles equipment Others Total
At
1
January
Cost \$ 727
072
,		 \$ 2
582
168
,
,		 \$ 479
560
,		 \$
25
696
,		 \$ \$
30
700
,		 58
042
,		 \$ 3
903
238
,
,
Accumulated
depreciation		 - ( 1
144
423)
,
,		 ( 245
826)
(
,		 8
675)
,		 ( 23
730)
(
,		 42
430)
,		 ( 1
465
084)
,
,
\$ 727
072
,		 \$ 1
437
745
,
,		 \$ 233
734
,		 \$
17
021
,		 \$ \$
6
970
,		 15
612
,		 \$ 2
438
154
,
,
Opening
book
January
1
net
amount
as at		 \$ 727
072
,		 \$ 1
437
745
,
,		 \$ 233
734
,		 \$
17
021
,		 \$ \$
970
6
,		 15
612
,		 \$ 2
438
154
,
,
Additions
(including
transfers)		 - 5
564
,		 3
187
,		 675 1
417
,		 5
083
,		 15
926
,
Disposals - - ( 38) - - - ( 38)
Depreciation
charge		 - ( 52
753)
,		 ( 36
654)
(
,		 2
057)
,		 ( 1
259)
(
,		 3
595)
,		 ( 96
318)
,
exchange
differences
Net		 ( 612) ( 14
834)
,		 ( 98)
(		 54) ( 89)
(		 68) ( 15
755)
,
Closing
book
30
June
net
amount
as at		 \$ 726
460
,		 \$ 1
375
722
,
,		 \$ 200
131
,		 \$
15
585
,		 \$ \$
039
7
,		 17
032
,		 \$ 2
341
969
,
,
At
June
30
Cost \$ 726
460
,		 \$ 2
554
297
,
,		 \$ 427
237
,		 \$
26
257
,		 \$ \$
31
191
,		 55
104
,		 \$ 3
820
546
,
,
Accumulated
depreciation		 - ( 1
178
575)
,
,		 ( 227
106)
(
,		 10
672)
,		 ( 24
152)
(
,		 38
072)
,		 ( 1
478
577)
,
,
\$ 726
460
,		 \$ 1
375
722
,
,		 \$ 200
131
,		 \$
15
585
,		 \$ \$
039
7
,		 17
032
,		 \$ 2
341
969
,
,

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.

(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:
June 30, 2021 December 31, 2020 June 30, 2020
Carrying amount Carrying amount Carrying amount
Land \$
117,310		 \$
138,189		 \$
154,003
Buildings 45,873 47,034 54,119
Transportation equipment
(business vehicles) 1,343 1,856 1,236
\$
164,526		 \$
187,079		 \$
209,358
Three months ended June 30,
2021 2020
Depreciation charge Depreciation charge
Land \$
9,778		 \$
9,760
Buildings 4,643 4,085
Transportation equipment (business vehicles) 219 154
\$
14,640		 \$
13,999
Six months ended June 30,
2021 2020
Depreciation charge Depreciation charge
Land \$
19,562		 \$
19,534
Buildings 9,334 8,272
Transportation equipment (business vehicles) 441 377
\$
29,337		 \$
28,183

C. For the three months and six months ended June 30, 2021 and 2020, the additions to right-of-use assets were \$0, \$0, \$9,917 and \$313, respectively.

D. Information on profit or loss in relation to lease contracts is as follows:
---- -- -- -- -- ----------------------------------------------------------------------------- --
Three months ended June 30,
2021 2020
Items affecting profit or loss
Interest expense on lease liabilities \$
346		 \$
505
Expense on short-term lease contracts 2,211 3,119
Expense on leases of low-value assets 356 375
Six months ended June 30,
2021 2020
Items affecting profit or loss
Interest expense on lease liabilities \$
718		 \$
1,022
Expense on short-term lease contracts 4,419 5,470
Expense on leases of low-value assets 720 758

E. For the six months ended June 30, 2021 and 2020, the Group's total cash outflow for leases were \$52,398 and \$52,226, 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.
  • B. For the three months and six months ended June 30, 2021 and 2020, the Group recognized rent income in the amount of \$9,462, \$9,866, \$18,196 and \$19,364, 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:
June 30, 2021 December 31, 2020 June 30, 2020
2021 \$
20,696		 2021 \$
23,725		 2020 \$
20,459
2022 27,630 2022 3,900 2021 26,028
2023 15,039 2023 400 2022 3,900
2024 6,156 2024 - 2023 -
\$
69,521		 \$
28,025		 \$
50,387

(11) Investment property

2021
Buildings and
Land structures Total
At January 1
Cost \$
2,268,726		 \$ 459,716 \$
2,728,442
Accumulated depreciation - ( 116,016) ( 116,016)
\$
2,268,726		 \$ 343,700 \$
2,612,426
Opening net book amount as at
January 1 \$
2,268,726		 \$ 343,700 \$
2,612,426
Additions (including transfers) - 1,072 1,072
Depreciation charge - ( 6,159) ( 6,159)
Net exchange differences - ( 695) ( 695)
Closing net book amount as at
June 30		 \$
2,268,726		 \$ 337,918 \$
2,606,644
At June 30
Cost		 \$
2,268,726		 \$ 459,328 \$
2,728,054
Accumulated depreciation - ( 121,410) ( 121,410)
\$
2,268,726		 \$ 337,918 \$
2,606,644
2020
Buildings and
Land structures Total
At January 1
Cost \$
2,268,726		 \$ 446,392 \$
2,715,118
Accumulated depreciation \$
-		 (
\$		 104,826) ( \$
104,826)
2,268,726 341,566 2,610,292
Opening net book amount as at
January 1 \$
2,268,726		 \$ 341,566 \$
2,610,292
Additions (including transfers) - 13,498 13,498
Depreciation charge - ( 6,007) ( 6,007)
Net exchange differences
Closing net book amount as at		 - ( 1,302) ( 1,302)
June 30 \$
2,268,726		 \$ 347,755 \$
2,616,481
At June 30
Cost \$
2,268,726		 \$ 455,655 \$
2,724,381
Accumulated depreciation - ( 107,900) ( 107,900)

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

Three months ended June 30,
2021 2020
Rental income from investment property \$ 9,462 \$ 9,866
Direct operating expenses arising from
investment property that generated rental
income \$ 2,909 \$ 2,864
Direct operating expenses arising from
investment property that did not generate
rental income \$ 175 \$ 175
Six months ended June 30,
Rental income from investment property \$ 2021
18,196		 \$ 2020
19,364
Direct operating expenses arising from
investment property that generated rental
income		 \$ 5,809 \$ 5,650
Direct operating expenses arising from
investment property that did not generate
  • B. The fair value of the investment property held by the Group was \$5,622,205, \$5,380,484 and \$5,102,769 as of June 30, 2021, December 31, 2020 and June 30, 2020, 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

June 30, 2021 December 31, 2020 June 30, 2020
Guarantee deposits paid \$
31,566		 \$
32,823		 \$
31,851
Others 14,832 14,588 14,556
\$
46,398		 \$
47,411		 \$
46,407

(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) For the aforementioned pension plan, the Group recognized pension costs of \$166, \$136, \$332 and \$284 for the three months and six months ended June 30, 2021 and 2020, respectively.
  • (c) Expected contributions to the defined benefit pension plan of the Company for the year ending December 31, 2021 amount to \$1,422.
  • 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 three months and six months ended June 30, 2021 and 2020 were \$10,274, \$10,022, \$20,753 and \$20,650, respectively.

(14) Share capital

A. As of June 30, 2021, 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:

2021 2020
429,062 429,248
(
-		 186)
429,062 429,062
  • 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 Numbers of shares
holding the shares Reason for reacquisition (in thousands) Carrying amount
The Company Enhance the Company's
credit rating and
stockholders' equity		 1,700 \$
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 paidin 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. The cash appropriation of earnings and cash payment from capital surplus for the year ended December 31, 2020 have been proposed by the Board of Directors on March 4, 2021 and the cash appropriation of earnings and cash payment from capital surplus for the year ended December 31, 2019 have been resolved at the shareholders' meeting on June 19, 2020. Details are summarized below:

Year ended December 31, 2020 Year ended December 31, 2019
Dividends per Dividends per
Amount share (in dollars) Amount share (in dollars)
Legal reserve \$ 119,625 \$ 172,897
Special reserve ( 13,658) 69,330
Cash dividends 1,094,107 \$ 2.55 1,544,622 \$
3.60
\$ 1,200,074 \$ 1,786,849
Cash payment per Cash payment per
Amount share (in dollars) Amount share (in dollars)
Cash payment from
capital surplus \$ 214,531 \$ 0.50 \$ 386,156 \$
0.90

Actual distribution of retained earnings for 2019 was in agreement with the amounts resolved at the stockholders' meeting. The appropriation for cash dividends from 2020 earnings and cash payment from capital surplus have been resolved by the Board of Directors during its meeting on March 4, 2021, but have not yet been reported to the shareholders. Related liabilities were shown as other payables. The appropriations for legal reserve and special reserve from 2020 earnings have been resolved after meeting the statutory voting threshold via the electronic voting platform for shareholders' meeting, although the shareholder's meeting has not been held physically.

(17) Other equity items

2021
Exchange
differences
Unrealized
gain or loss
on valuation		 on translation of
foreign financial
statements		 Total
At January 1 \$ 4,395 (\$ 121,639) (\$ 117,244)
Revaluation - gross 1,167 - 1,167
Revaluation transferred to
retained earnings - gross ( 8,804) - ( 8,804)
Currency translation
differences - ( 68,747) ( 68,747)
Effect from income tax - 13,749 13,749
At June 30 (\$ 3,242) (\$ 176,637) (\$ 179,879)
2020
Exchange
Unrealized differences
on translation of
gain or loss foreign financial
on valuation statements Total
At January 1 \$ 7,559 (\$ 138,461) (\$ 130,902)
Revaluation - gross 879 - 879
Currency translation
differences
Effect from income tax		 -
-		 ( 42,859) (
8,572		 42,859)
8,572
At June 30 \$ 8,438 (\$ 172,748) (\$ 164,310)
(18) Operating
revenue
Three months ended June 30,
2021 2020
Sales revenue \$ 3,794,184 \$ 2,485,718
Six months ended June 30,
2021 2020
Sales revenue \$ 7,292,804 \$ 5,706,128

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:

Electronic products
Three months ended
June 30, 2021		 Taiwan Asia America Europe Others Total
Revenue from external
customer contracts		 \$ 1,007,696 \$ 1,363,467 \$
464,742		 \$
777,031		 \$
181,248		 \$
3,794,184
Electronic products
Six months ended Taiwan Asia America Europe Others Total
June 30, 2021
Revenue from external
customer contracts		 \$ 1,854,217 \$ 2,582,533 \$
753,158		 \$ 1,702,623 \$
400,273		 \$
7,292,804
Electronic products
Three months ended
June 30, 2020		 Taiwan Asia America Europe Others Total
Revenue from external
customer contracts		 \$
564,201		 \$
978,455		 \$
304,433		 \$
523,811		 \$
114,818		 \$
2,485,718
Electronic products
Six months ended
June 30, 2020		 Taiwan Asia America Europe Others Total
Revenue from external
customer contracts		 \$ 1,403,768 \$ 2,031,555 \$
611,636		 \$ 1,306,024 \$
353,145		 \$
5,706,128
  • 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

Three months ended June 30,
2021 2020
Interest income from bank deposits
Interest income from financial assets measured		 \$ 332 \$
1,088
at amortised cost 5,767 20,115
Other interest income 2,738 40
\$ 8,837 \$
21,243
Six months ended June 30,
2021 2020
Interest income from bank deposits
Interest income from financial assets measured		 \$ 434 \$
2,222
at amortised cost 13,802 43,166
Other interest income 51,803 80
\$ 66,039 \$
45,468
(20) Other income Three months ended June 30,
2021 2020
Rental income \$ 9,462 \$
9,866
Six months ended June 30,
2021 2020
Rental income \$ 18,196 \$
19,364
(21) Other gains and losses
0 Three months ended June 30,
2021 2020
Loss on disposal of property, plant and equipment \$ - \$
-
Net currency exchange loss ( 3,247) ( 39,688)
Net gain on financial assets and liabilities at fair
value through profit or loss
Dividend income		 6,890
1,300		 37,619
-

~35~

Others ( 2,173) ( 12,020)

\$ 2,770 (\$ 14,089)

Six months ended June 30,
2021 2020
Loss on disposal of property, plant and equipment \$ (\$
-		 38)
Net currency exchange (loss) gain ( 13,649) 226
Net gain on financial assets and liabilities at fair
value through profit or loss 79,549 40,965
Dividend income 1,300 -
Royalty refund - 62,738
Others 4,597 6,447
\$ \$
71,797		 110,338

(22) Expenses by nature

Three months ended June 30,
2021 2020
Wages and salaries \$ 301,436 \$ 264,451
Labor and health insurance fees 32,964 28,849
Pension costs 10,440 10,158
Other personnel expenses
Depreciation on property, plant and equipment
(including investment property and right-of-use		 12,776 11,579
assets) 63,703 64,253
Six months ended June 30,
2021 2020
Wages and salaries \$
630,958		 \$
602,488
Labor and health insurance fees 63,076 58,095
Pension costs 21,085 20,934
Other personnel expenses
Depreciation on property, plant and equipment		 26,092 25,812
(including investment property and right-of-use
assets)		 128,063 130,508
  • 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 three months and six months ended June 30, 2021 and 2020, employees' compensation was accrued at \$10,642, \$3,421, \$17,660 and \$9,457, respectively; while directors' remuneration was accrued at \$1,490, \$479, \$2,472 and \$1,324, 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 six months ended June 30, 2021.

The difference between employees' compensation and directors' remuneration as resolved by the Board of Directors and the amounts recognized in the 2020 financial statements by \$438 and \$29, respectively, has been adjusted in profit or loss for 2021. As of June 30, 2021, the directors' remuneration for 2020 has yet to be paid.

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.

(23) Income tax

  • A. Income tax expense
  • (a) Components of income tax expense:
Three months ended June 30,
2021 2020
\$ 208,661 \$ 78,333
311 1,576
208,972 79,909
( 18,647)
( 18,647)
\$ 196,084 \$ 61,262
Six months ended June 30,
2021 2020
\$ 318,071 \$ 160,737
( 5,119) 1,951
312,952 162,688
( 14,451) 14,312
( 14,451) 14,312
12,888) (
12,888) (

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

Three months ended June 30,
2021 2020
Exchange differences on translation of
foreign financial statements		 (\$ 4,873) (\$ 5,533)
Six months ended June 30,
2021 2020
Exchange differences on translation of
foreign financial statements (\$ 13,749) (\$ 8,572)

B. The Company's income tax returns through 2019 have been assessed and approved by the Tax Authority.

(24) Earnings per share

Three months ended June 30, 2021
Profit after tax Weighted-average
common shares
outstanding
(in thousands)		 Earnings
per share
(in dollars)
Basic earnings per share
Profit attributable to ordinary
shareholders of the parent \$ 820,364 429,062 \$ 1.91
Diluted earnings per share
Profit attributable to ordinary
shareholders of the parent \$ 820,364 429,062
Assumed conversion of all
dilutive potential ordinary
shares
Employees' compensation - 239
Profit attributable to ordinary
shareholders of the parent plus
assumed conversion of all
dilutive potential ordinary
shares \$ 820,364 429,301 \$ 1.91
Six months ended June 30, 2021
Profit after tax Weighted-average
common shares
outstanding
(in thousands)		 Earnings
per share
(in dollars)
Basic earnings per share
Profit attributable to ordinary
shareholders of the parent \$ 1,379,750 429,062 \$ 3.22
Diluted earnings per share
Profit attributable to ordinary
shareholders of the parent
Assumed conversion of all		 \$ 1,379,750 429,062
dilutive potential ordinary
shares
Employees' compensation - 315
Profit attributable to ordinary
shareholders of the parent plus
assumed conversion of all
dilutive potential ordinary
shares \$ 1,379,750 429,377 \$ 3.21
Three months ended June 30, 2020
Weighted-average
common shares Earnings
outstanding per share
Profit after tax (in thousands) (in dollars)
Basic earnings per share
Profit attributable to ordinary
shareholders of the parent		 \$ 264,607 429,062 \$ 0.62
Diluted earnings per share
Profit attributable to ordinary
shareholders of the parent \$ 264,607 429,062
Assumed conversion of all
dilutive potential ordinary
shares
Employees' compensation - 379
Profit attributable to ordinary
shareholders of the parent plus
assumed conversion of all
dilutive potential ordinary
shares \$ 264,607 429,441 \$ 0.62
Six months ended June 30, 2020
Profit after tax Weighted-average
common shares
outstanding
(in thousands)		 Earnings
per share
(in dollars)
Basic earnings per share
Profit attributable to ordinary
shareholders of the parent		 \$ 728,727 429,066 \$ 1.70
Diluted earnings per share
Profit attributable to ordinary
shareholders of the parent		 \$ 728,727 429,066
Assumed conversion of all
dilutive potential ordinary
shares
Employees' compensation - 397
Profit attributable to ordinary
shareholders of the parent plus
assumed conversion of all
dilutive potential ordinary
shares \$ 728,727 429,463 \$ 1.70

(25) Supplemental cash flow information

Financing activities with no cash flow effects:

Six months ended June 30,
2021 2020
Cash dividends \$ \$
1,094,107		 1,544,622
Cash payment from capital surplus 214,531 386,156
Less: Shown as other payables ( 1,308,638) ( 1,930,778)
Financing cash flows \$ \$
-		 -

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) Other related party
Cheng Chuan Technology Development Inc.
(Cheng Chuan)		 Other related party

(2) Significant transactions and balances with related parties

A. Operating revenue

Three months ended June 30,
2021 2020
Sales of goods
Associates accounted for using the equity
method \$ \$
20		 544
Six months ended June 30,
2021 2020
Sales of goods
Associates accounted for using the equity
method \$ \$
402		 1,175

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

Three months ended June 30,
2021 2020
Purchases of goods
Associates accounted for using the equity
method		 \$ 57,203 \$ 61,402
Six months ended June 30,
2021 2020
Purchases of goods
Associates accounted for using the equity
method \$ 114,401 \$ 119,035

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

June 30, 2021 December 31, 2020 June 30, 2020
Accounts receivable:
Associates accounted
for using equity method \$ 21 \$ - \$ 6

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

June 30, 2021 December 31, 2020 June 30, 2020
Accounts payable:
Associates accounted for
using equity method \$
38,310		 \$
37,416		 \$
40,396

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 related party, 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 June 30, 2021, December 31, 2020 and June 30, 2020, the balance of related right-of-use assets amounted to \$33,578, \$51,893 and \$70,207 while lease liabilities amounted to \$0, \$36,815 and \$36,404, respectively.

(3) Key management compensation

Three months ended June 30,
2021 2020
Salaries and other employee benefits \$
11,660		 \$
11,064
Six months ended June 30,
2021 2020
Salaries and other employee benefits \$
23,028		 \$
19,694

8. PLEDGED ASSETS

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

Book value
June 30, December 31, June 30,
Pledged assets 2021 2020 2020 Pledge purpose
Property, plant and
equipment		 \$
134,741		 \$
148,671		 \$
149,017		 Collateral for general
credit limit granted by
financial institutions

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT COMMITMENTS

As of June 30, 2021, except for the provision of endorsements and guarantees mentioned in Note 13(1) B, there are no other significant commitments.

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT SUBSEQUENT EVENTS

None.

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
4,542,156
4,255,920		 2,760,342
measured at fair value
through profit or loss
Financial assets at fair
value through other
272,705
111,000
comprehensive income		 115,043
Financial assets at
amortised cost
766,594
736,852
Cash and cash equivalents		 1,987,626
Financial assets at
5,479,216
5,659,889
amortised cost		 7,197,110
Notes receivable
759
-		 524
Accounts receivable
1,827,205
1,434,454
(including related parties)		 1,315,403
Other receivables
89,180
71,351		 103,600
Refundable deposits
31,566
32,823		 31,851
\$
\$
\$
13,008,622
12,303,048		 13,511,499
June 30, 2021 December 31, 2020 June 30, 2020
Financial liabilities
Financial liabilities \$
-		 \$
-		 \$
68
mandatorily measured
at fair value through
profit or loss
Financial liabilities at
amortised cost
Accounts payable 1,576,654 1,171,682 1,090,266
(including related parties)
Other payables 1,580,822 246,635 2,145,191
\$
3,157,476		 \$
1,418,317		 \$
3,235,525
Lease liabilities \$
47,248		 \$
85,715		 \$
91,551

B. Financial risk management policies

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

C. Significant financial risks and degrees of financial risks

There is no significant change except for the following information. Please refer to Note 12 in the consolidated financial statements for the year ended December 31, 2020 for the related information.

(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:
June 30, 2021
Foreign Foreign Currency
Currency Amount Exchange rate Book value
Financial assets USD:NTD \$
42,734		 27.86 \$
1,190,569
EUR:NTD 2,319 33.15 76,875
RMB:NTD 11,967 4.3090 51,566
GBP:NTD 466 38.54 17,960
USD:EUR 2,917 0.8404 81,268
USD:HKD 1,169 7.7669 32,568
USD:JPY 1,226 110.5117 34,156
GBP:EUR 1,445 1.1626 55,690
Financial liabilities USD:NTD \$
44,388		 27.86 \$
1,236,650
December 31, 2020
Foreign Foreign Currency
Currency Amount Exchange rate Book value
Financial assets USD:NTD \$
24,579		 28.48 \$
700,010
EUR:NTD 3,551 35.02 124,356
RMB:NTD 9,070 4.3770 39,699
JPY:NTD 122,026 0.2763 33,716
USD:EUR 4,859 0.8132 138,384
USD:HKD 817 7.7539 23,268
USD:JPY 395 103.0764 11,250
GBP:EUR 972 1.1108 37,811
Financial liabilities USD:NTD \$
35,425		 28.48 \$
1,008,904
June 30, 2020
Foreign Foreign Currency
Currency Amount Exchange rate Book value
Financial assets USD:NTD \$
95,187		 29.63 \$
2,820,391
EUR:NTD 2,610 33.27 86,835
JPY:NTD 128,380 0.2751 35,317
USD:EUR 5,906 0.8906 174,995
USD:JPY 1,011 107.7063 29,956
USD:HKD 732 7.7505 21,689
GBP:EUR 1,201 1.0950 43,752
Financial liabilities USD:NTD \$
28,398		 29.63 \$
841,433

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 three months and six months ended June 30, 2021 and 2020 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 \$461 and \$19,790 for the six months ended June 30, 2021 and 2020, respectively.

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.
  • (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).

(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.

June 30, 2021 Level 1 Level 2 Level 3 Total
Assets
Recurring fair value measurements
Financial assets at fair value through
profit or loss
Beneficiary certificates \$
4,529,078		 \$
-		 \$
-		 \$
4,529,078
Financial products - - 13,078 13,078
Financial assets at fair value through
other comprehensive income
Equity securities 271,580 - 1,125 272,705
\$
4,800,658		 \$
-		 \$
14,203		 \$
4,814,861
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
June 30, 2020 Level 1 Level 2 Level 3 Total
Assets
Recurring fair value measurements
Financial assets at fair value through
profit or loss
Beneficiary certificates \$
2,743,179		 \$
-		 \$
-		 \$
2,743,179
Financial products - - 17,163 17,163
Financial assets at fair value through
other comprehensive income
Equity securities 113,918 - 1,125 115,043
\$
2,857,097		 \$
-		 \$
18,288		 \$
2,875,385

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:

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 six months ended June 30, 2021 and 2020, there was no transfer between Level 1 and Level 2.
  • G. If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
  • H. The financial products purchased for the six months ended June 30, 2021 and 2020 were categorised to Level 3.
  • I. 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.
  • J. 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.
  • (4) Other matter

Due to the strong demand in the industrial chain and the use of its products in diverse applications this year, the Group's orders from domestic and foreign customers were not impacted by the COVID-19 pandemic. The operation and production headquarters in Taiwan have activated the relevant contingency mechanisms and adopted high-standard COVID-19 preventive measures since May 2021, including taking turns to come into the office and work from home (work off-site), dividing factories into areas to restrict cross-area movement, and monitoring employees' health condition on a daily basis. Overall, in the second quarter of 2021, the pandemic had no significant impact on the Group's operations and financial performance and did not cause any suspension of work and production. Also, the Group has delivered good sales and profit performance.

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.

(2) Segment information

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

Three months ended June 30,
2021 2020
Segment revenue \$
3,794,184		 \$
2,485,718
Segment income \$
820,364		 \$
264,607
Six months ended June 30,
2021 2020
Segment revenue \$
7,292,804		 \$
5,706,128
Segment income \$
1,379,750		 \$
728,727

(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.

Provision of endorsements and guarantees to others

Six months ended June 30, 2021

Expressed in thousands of NTD

(Except as otherwise indicated)

Party being Maximum Ratio of Provision of
endorsed/guaranteed Limit on outstanding Outstanding accumulated endorsements/ Provision of Provision of
endorsements/ endorsement/ endorsement/ Amount of endorsement/ Ceiling on total guarantees by endorsements/ endorsements/
Relationship with guarantees guarantee guarantee Actual endorsements/ guarantee amount amount of parent guarantees by guarantees to
the endorser/ provided for a amount as of amount at amount guarantees to net asset value endorsements company to subsidiary to the party in
Number Endorser/ Company guarantor single party June 30, June 30, drawn down secured with of the endorser/ /guarantees subsidiary parent Mainland
(Note 1) guarantor name (Note 2) (Note 3) 2021 (Note 4) 2021 (Note 5) (Note 6) collateral guarantor company provided (Note 7) (Note 8) company China Footnote
0 Transcend Transcend 2 \$ 3,737,901 \$
543,200		 \$
504,200		 \$
-		 - 3 \$
7,475,803		 Y - - -
Taiwan Japan Inc. (JPY \$2,000,000) (JPY \$2,000,000)
(In thousands) (In thousands)

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. (\$18,689,507*20%=\$3,737,901)

Note 4: The maximum outstanding endorsement/guarantee amount during and as of June 30, 2021 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.( \$18,689,507*40%=\$7,475,803)

Note 8: Fill in 'Y' for those cases of provision of endorsements/guarantees by listed parent company to subsidiary.

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

June 30, 2021

Table 2 Expressed in thousands of NTD

(Except as otherwise indicated)

As of June 30, 2021
Marketable securities Relationship with the General Book value Footnote
Securities held by (Note 1) securities issuer (Note 2) ledger account Number of shares (Note 3) Ownership (%) Fair value (Note 4)
Transcend Taiwan Stocks
Dramexchange Tech Inc. - Non-current financial
assets at fair value through other
comprehensive income		 60,816 \$
1,125		 1 \$
1,125		 -
Fubon Financial Holding
Co., Ltd. Preferred Shares B		 - " 1,758,000 110,930 - 110,930 -
Taiwan Semiconductor Manufacturing
Co., Ltd.		 - " 270,000 160,650
\$
272,705		 - 160,650 -
Beneficiary certificates
Taishin 1699 Money Market Fund - Current financial assets
at fair value through
profit or loss		 323,180,814 \$ 4,415,781 - \$
4,415,781		 -
Yuanta Taiwan High-yield Leading
Company Fund B		 - Non-current financial assets at
fair value through
profit or loss		 5,000,000 \$
69,250		 - \$
69,250		 -
Yuanta Taiwan Top 50 ETF - " 317,000 44,047 - 44,047 -
\$
113,297
Transcend Information (Shanghai), Ltd. Financial products
Financial products of Industrial and
Commercial Bank of China		 - Current financial assets
at fair value through
profit or loss		 - \$
13,078		 - \$
13,078		 -

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.

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

Six months ended June 30, 2021
Table 3 Expressed in thousands of NTD
(Except as otherwise indicated)
Marketable General Relationship
with		 Balance as at
January 1, 2021		 Addition
(Note 3)		 Disposal
(Note 3)		 Balance as at
June 30, 2021
securities ledger Counterparty the investor Number Number Number Gain on Number
Investor (Note 1) account (Note 2) (Note 2) of shares Amount of shares Amount of shares Selling price Book value disposal of shares Amount
Transcend Taiwan Taishin 1699 Money
Market Fund		 Current financial
assets at fair value
through profit or
loss		 -
-		 257,293,248 \$ 3,501,229 76,890,147 \$ 1,050,000 11,002,581 \$ 150,214 \$ 149,764 \$ 450 323,180,814 \$ 4,401,465
Yuanta Taiwan
High-yield Leading
Company Fund B		 Non-current
financial assets at
fair value through
profit or loss		 50,000,000 500,000 - - 45,000,000 613,300 450,000 163,300 5,000,000 50,000

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.

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

Six months ended June 30, 2021

Expressed in thousands of NTD

(Except as otherwise indicated)

Differences in transaction terms compared to
Transaction third party transactions (Note 1) Notes/accounts receivable (payable)
Purchaser/seller Counterparty Relationship with the
counterparty		 Sales
(purchases)		 Amount Percentage
of total sales
(purchases)		 Credit term Unit price Credit term Balance Percentage of
total notes/accounts
receivable (payable)		 Footnote
Transcend Taiwan Transcend Japan Inc. The Company's subsidiary Sales
\$		 415,254 6 120 days after
monthly billings		 No significant
difference		 30 to 60 days after monthly
billings to third parties		 \$ 149,692 8 -
" Transcend Information
Europe B.V.		 Subsidiary of Memhiro " 324,273 5 " " " 30,401 2 -
" Transcend Information, Inc. The Company's subsidiary " 301,293 4 " " " 23,881 1 -
" Transcend Korea Inc. The Company's subsidiary " 193,091 3 " " " 17,994 1 -
" Transtech Trading (Shanghai)
Co., Ltd.		 Subsidiary of Memhiro " 702,430 10 " " " 336,101 19 -
" Transcend Information (H.K)
Ltd.		 Subsidiary of Memhiro 〞 171,179 2 〞 〞 〞 29,381 2 -
" Transcend Information
Trading GmbH		 Subsidiary of Memhiro " 215,847 3 " " " 14,618 1 -
" Taiwan IC Packaging
Corporation		 Associate accounted for
using equity method		 (Purchase) (114,401) (2) 30 days after
monthly billings		 " 30 to 45 days after monthly
billings to third parties		 ( 38,310) (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.

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

Six months ended June 30, 2021

Table 5

Expressed in thousands of NTD

(Except as otherwise indicated)

Balance as at Amount collected
Relationship June 30, Overdue receivables subsequent to the Allowance for
Creditor Counterparty with the counterparty 2021 Turnover rate Amount Action taken balance sheet date doubtful accounts
Transcend Taiwan Transcend Japan Inc. Subsidiary of the Company \$
149,692		 5.74 \$
-		 - \$ 93,144 -
" Transtech Trading (Shanghai) Co., Ltd. Subsidiary of Memhiro 336,101 5.53 - - 115,050 -
Transcend Information
(Shanghai), Ltd.		 Transcend Taiwan Ultimate parent company 404,909 - 404,909 - -
-

Significant inter-company transactions during the period

Six months ended June 30, 2021

Expressed in thousands of NTD

(Except as otherwise indicated)

Transaction
Number
(Note 1)		 Company name Counterparty Relationship
(Note 2)		 General ledger account Amount Transaction terms Percentage of consolidated total operating
revenues or total assets (Note 3)
0 Transcend Taiwan Transcend Japan Inc. 1 Sales \$
415,254		 There is no significant
difference in unit price
from those to third parties.		 6
" " Transcend Information Europe B. V. 〞 " 324,273 " 4
" " Transcend Information, Inc. 〞 " 301,293 " 4
" " Transcend Korea Inc. 〞 " 193,091 " 3
" " Transtech Trading (Shanghai) Co., Ltd. 〞 " 702,430 " 10
" " Transcend Information (H.K) Ltd. 〞 " 171,179 " 2
" " Transcend Information Trading GmbH 〞 " 215,847 " 3
" 〞 Transtech Trading (Shanghai) Co., Ltd. 〞 Accounts Receivable 336,101 120 days after monthly billings 2
" " Transcend Information (Shanghai), Ltd. 〞 Accounts Payable (
404,909)		 " (
2)
1 Transcend Information Europe B. V. Transcend Information Trading GmbH 3 Sales 82,301
There is no significant
difference in unit price
from those to third parties.		 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.

Table 6

Information on investees

Six months ended June 30, 2021

Investment

income
Initial investment amount Shares held as at June 30, 2021 Net profit (loss) (loss) recognized
Balance as at
June 30,		 Balance as at
December 31,		 of the investee
for the six months
ended June 30,		 by the Company
for the six months
ended June 30,
Investor Investee Location Main business activities 2021 2020 Number of shares Ownership (%) Book value 2021 2021 (Note 1) Footnote
Transcend Taiwan Saffire Investment Ltd. B.V.I. Investment holdings \$
1,202,418 \$		 1,202,418 36,600,000 100 \$ 1,483,913 (\$ 1,716) (\$
1,716)		 Note 2
Transcend Japan Inc. Japan Wholesale of computer memory
modules and peripheral products		 89,103 89,103 6,400 100 241,106 13,549 13,549 Note 2
Transcend Information, Inc. United States
of America		 Wholesale of computer memory
modules and peripheral products		 38,592 38,592 625,000 100 168,371 ( 5,638) (
5,638)		 Note 2
Transcend Korea Inc. Korea Wholesale of computer memory
modules and peripheral products		 6,132 6,132 40,000 100 61,021 8,024 8,024 Note 2
Taiwan IC Packaging Corp. Taiwan Packaging of Semi-conductors 354,666 354,666 21,928,036 12.74 118,587 177,470 22,662 Note 5
Saffire Investment
Ltd.		 Memhiro Pte Ltd. Singapore Investment holdings 1,156,920 1,156,920 55,132,000 100 1,496,530 ( 1,779) (
1,779)		 Note 3
Memhiro Pte Ltd. Transcend Information
Europe B.V.		 Netherlands Wholesale of computer memory
modules and peripheral products		 1,693 1,693 100 100 225,895 1,099 1,099 Note 4
Transcend Information
Trading GmbH		 Germany Wholesale of computer memory
modules and peripheral products		 2,288 2,288 - 100 108,963 2,267 2,267 Note 4
Transcend Information
(H.K.) Ltd.		 Hong Kong Wholesale of computer memory
modules and peripheral products		 7,636 7,636 2,000,000 100 29,046 3,790 3,790 Note 4

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

Note 4: Subsidiary of Memhiro.

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

Note 2: Subsidiary of the Company.

Note 3: Subsidiary of Saffire.

Information on investments in Mainland China

Six months ended June 30, 2021

Table 8 Expressed in thousands of NTD

(Except as otherwise indicated)

Amount remitted from
Taiwan to Mainland
China/Amount remitted
back to Taiwan for Investment income
Accumulated amount the six months ended (loss) recognized
of remittance from
Taiwan to		 June 30, 2021 Accumulated
amount of remittance		 Net income (loss)
of investee for		 Ownership
held by		 by the Company
for the six		 Book value of
investments in		 Accumulated amount
of investment income
Investment Mainland China Remitted to Remitted from Taiwan to the six months the Company months ended Mainland China remitted back to
Investee in method as of January 1, Mainland back to Mainland China as of ended June 30, (direct or June 30, as of June 30, Taiwan as of June 30,
Mainland China Main business activities Paid-in capital (Note 1) 2021 China Taiwan June 30, 2021 2021 indirect) 2021 (Note 2) 2021 2021 Footnote
Transcend
Information
(Shanghai), Ltd.		 Manufacture and sales of
computer memory modules,
storage products and disks		 \$
1,134,178		 2 \$
1,134,178		 - - \$
1,134,178 (\$		 30,795) 100 (\$
30,795) \$		 1,084,726 \$ 1,464,028 -
Transtech
Trading
(Shanghai) Co.,
Ltd.		 Wholesale, agent, import and
export and retail of computer
memory modules, storage
products and computer
components		 16,310 2 16,310 - - 16,310 6,422 100 6,422 42,886 - -
Company name Accumulated amount of
remittance from Taiwan to
Mainland China as of
June 30, 2021		 Investment
amount approved
by the Investment
Commission of
the Ministry of
Economic Affairs
(MOEA)		 Ceiling on
investments in
Mainland China
imposed by the
Investment
Commission of
MOEA
Transcend
Information		 \$
1,134,178 \$		 1,134,178 \$
-
(Shanghai), Ltd.
Transtech
Trading
(Shanghai) Co.,
Ltd. 16,310 16,310 -
\$
1,150,488 \$		 1,150,488 \$ 11,213,704

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 recognition basis of gain and loss on investment was the financial statements which were not reviewed by independent auditors. Note 3: The numbers in this table are expressed in New Taiwan Dollars.

Transcend Information, Inc. and Subsidiaries Major shareholders information June 30, 2021

Table 9

Shares
Name of major shareholders Number of shares held Shareholding ratio
Won Chin Investment Inc. 74,783,600 17.42
Wan An Technology Inc. 34,142,854 7.95
Cheng Chuan Technology Development Inc. 32,971,701 7.68
Wan Min Investment Inc. 29,726,397 6.92
Wan Chuan Investment Inc. 29,505,896 6.87

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