TRI — Interim / Quarterly Report 2021

Dec 16, 2021

TEST RESEARCH, INC. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS’ REVIEW REPORT MARCH 31, 2021 AND 2020

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

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INDEPENDENT AUDITORS’ REVIEW REPORT TRANSLATED FROM CHINESE

PWCR 21000163

To the Board of Directors and Shareholders of Test Research, Inc.

Introduction

We have reviewed the accompanying consolidated balance sheets of Test Research, Inc. and subsidiaries (the “Group”) as at March 31, 2021 and 2020, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the three months then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies. Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, “Interim Financial Reporting” as endorsed by the Financial Supervisory Commission. Our responsibility is to express a conclusion on these consolidated financial statements based on our reviews.

Scope of review

Except as explained in the following paragraph, we conducted our reviews in accordance with the Statement of Auditing Standards No. 65, “Review of Financial Information Performed by the Independent Auditor of the Entity” in the Republic of China. A review of consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Basis for qualified conclusion

As explained in Note 4(3), the financial statements of certain insignificant consolidated subsidiaries were not reviewed by independent auditors. Total assets of these subsidiaries amounted to NT$1,403,062 thousand and NT$1,289,841 thousand, constituting 19% and 18% of the consolidated total assets as at March 31, 2021 and 2020, respectively, total liabilities amounted to NT$169,814 thousand and NT$124,716 thousand, constituting 11% and 9% of the consolidated total liabilities as at March 31, 2021 and 2020, respectively, and total comprehensive income (loss) amounted to NT$80,442 thousand and

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(NT$3,736) thousand, constituting 28% and (1%) of the consolidated total comprehensive income (loss) for the three months then ended, respectively.

Qualified conclusion

Except for the adjustments to the consolidated financial statements, if any, as might have been determined to be necessary had the financial statements of certain consolidated subsidiaries been reviewed by independent auditors as described in the Basis for qualified conclusion section above, based on our reviews, nothing has come to our attention that causes us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of the Group as at March 31, 2021 and 2020, and of its consolidated financial performance and its consolidated cash flows for the three months then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, “Interim Financial Reporting” as endorsed by the Financial Supervisory Commission.

Pan, Hui-Lin Yen, Yu-Fun

For and on behalf of PricewaterhouseCoopers, Taiwan May 5, 2021

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

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

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TEST RESEARCH, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS MARCH 31, 2021, DECEMBER 31, 2020 AND MARCH 31, 2020

(Expressed in thousands of New Taiwan dollars)

(The balance sheets as of March 31, 2021 and 2020 are reviewed, not audited)

Assets	Notes	March 31, 2021 $ 1,897,488 100,530 139,464 2,035,281 23,878 1,043,968 43,279 5,283,888 2,138,040 37,305 26,629 76,821 11,435 2,290,230 $ 7,574,118	December 31, 2020 $ 1,560,909 231,422 72,840 1,846,509 20,850 934,729 28,258 4,695,517 2,131,960 44,109 24,807 90,620 10,290 2,301,786 $ 6,997,303	March 31, 2020
Current assets 1100 Cash and cash equivalents 1136 Current financial assets at amortised cost 1150 Notes receivable, net 1170 Accounts receivable, net 1200 Other receivables 130X Inventory 1470 Other current assets 11XX Total current assets Non-current assets 1600 Property, plant and equipment 1755 Right-of-use assets 1780 Intangible assets 1840 Deferred income tax assets 1900 Other non-current assets 15XX Total non-current assets 1XXX Total assets	6(1) 6(2) 6(3) 6(3) 6(4) 6(5) and 8 6(6)			$ 1,412,870 225,547 21,181 2,141,491 27,814 892,826 41,320
				4,763,049
				2,126,229 60,516 20,321 71,533 9,794
				2,288,393
				$ 7,051,442

(Continued)

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TEST RESEARCH, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS MARCH 31, 2021, DECEMBER 31, 2020 AND MARCH 31, 2020

(Expressed in thousands of New Taiwan dollars)

(The balance sheets as of March 31, 2021 and 2020 are reviewed, not audited)

	Liabilities and Equity	Notes			March 31, 2021		December 31, 2020		March 31, 2020
	Current liabilities
2130	Contract liabilities -	6(12)
	current			$	41,868	$	24,302	$	21,942
2150	Notes payable				25,844		16,782		30,520
2170	Accounts payable				796,054		494,597		719,187
2200	Other payables	6(7)			225,754		300,303		203,956
2230	Current income tax
	liabilities				184,442		143,357		166,723
2280	Current lease liabilities				13,571		17,293		22,446
2300	Other current liabilities				7,684		7,859		6,233
21XX	Total current liabilities				1,295,217		1,004,493		1,171,007
	Non-current liabilities
2550	Provisions for liabilities -
	non-current				39,340		41,343		38,159
2570	Deferred income tax
	liabilities				166,534		160,147		99,221
2580	Non-current lease
	liabilities				23,323		26,215		37,285
2600	Other non-current	6(8)
	liabilities				59,782		62,911		60,900
25XX	Total non-current
	liabilities				288,979		290,616		235,565
2XXX	Total liabilities				1,584,196		1,295,109		1,406,572
	Equity attributable to owners
	of the parent
	Share capital	6(9)
3110	Common stock				2,362,160		2,362,160		2,362,160
	Capital surplus	6(10)
3200	Capital surplus				53,290		53,290		53,290
	Retained earnings	6(11)
3310	Legal reserve				1,306,390		1,306,390		1,213,046
3320	Special reserve				67,270		67,270		41,795
3350	Unappropriated retained
	earnings				2,265,885		1,970,293		2,049,562
	Other equity interest
3400	Other equity interest		(		65,073) (		57,209) (		74,983)
31XX	Equity attributable to
	owners of the parent				5,989,922		5,702,194		5,644,870
3XXX	Total equity				5,989,922		5,702,194		5,644,870
3X2X	Total liabilities and
	equity			$	7,574,118	$	6,997,303	$	7,051,442

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

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TEST RESEARCH, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME THREE MONTHS ENDED MARCH 31, 2021 AND 2020

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

Items

Threemonths endedMarch 31 Notes 2021 2020 6(12) $ 1,347,772 $ 1,162,501 6(4)(15)(16) ( 611,881) ( 516,639) 735,891 645,862 6(15)(16) ( 193,812) ( 169,868) ( 44,594) ( 43,482) ( 115,459) ( 112,476) 12(2) 4,499 ( 1,416) ( 349,366) ( 327,242) 386,525 318,620 2,085 2,100 6(13) 3,010 5,955 6(14) ( 1,553) 7,188 6(6) ( 388) ( 338) 3,154 14,905 389,679 333,525 6(17) ( 94,087) ( 63,374) $ 295,592 $ 270,151 ( $ 9,830) ( $ 9,641) 6(17) 1,966 1,928 ($ 7,864) ($ 7,713) $ 287,728 $ 262,438 $ 295,592 $ 270,151 $ 287,728 $ 262,438 6(18) $ 1.25 $ 1.14 $ 1.25 $ 1.14

4000 Operating revenue 5000 Operating costs 5950 Gross margin Operating expenses 6100 Selling expenses 6200 General and administrative expenses 6300 Research and development expenses 6450 Expected credit impairment gain (loss) 6000 Total operating expenses 6900 Operating profit Non-operating income and expenses 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Finance costs 7000 Total non-operating income and expenses 7900 Profit before income tax 7950 Income tax expense 8200 Profit for the period Other comprehensive income Components of other comprehensive income that will be reclassified to profit or loss 8361 Financial statements translation differences of foreign operations 8399 Income tax relating to the components of other comprehensive (loss) income that will be reclassified to profit or loss 8300 Total other comprehensive loss for the period 8500 Total comprehensive income for the period Profit attributable to: 8610 Owners of the parent Comprehensive income attributable to: 8710 Owners of the parent Earnings per share (in dollars) 9750 Basic earnings per share 9850 Diluted earnings per share

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

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TEST RESEARCH, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY THREE MONTHS ENDED MARCH 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

(UNAUDITED)

2020 Balance at January 1, 2020 Profit for the period Other comprehensive loss for the period Total comprehensive income (loss) Balance at March 31, 2020 2021 Balance at January 1, 2021 Profit for the period Other comprehensive loss for the period Total comprehensive income (loss) Balance at March 31, 2021	Notes			Equity attributable to owners of the parent	Equity attributable to owners of the parent	Equity attributable to owners of the parent	Equity attributable to owners of the parent	Equity attributable to owners of the parent	Equity attributable to owners of the parent	Equity attributable to owners of the parent	Equity attributable to owners of the parent	Equity attributable to owners of the parent	Equity attributable to owners of the parent			Total equity
			Share capital - common stock	Capital Reserves					Retained Earnings					Financial statements translation differences of foreign operations
				Capital surplus, additional paid- in capital			Donated assets received		Legal reserve		Special reserve	Unappropriated retained earnings
			$ 2,362,160 - - - $ 2,362,160 $ 2,362,160 - - - $ 2,362,160		$ 51,874 - - - $ 51,874 $ 51,874 - - - $ 51,874		$ 1,416 - - - $ 1,416 $ 1,416 - - - $ 1,416		$ 1,213,046 - - - $ 1,213,046 $ 1,306,390 - - - $ 1,306,390		$ 41,795 - - - $ 41,795 $ 67,270 - - - $ 67,270		$ 1,779,411 270,151 - 270,151 $ 2,049,562 $ 1,970,293 295,592 - 295,592 $ 2,265,885	($ 67,270) - ( 7,713) ( 7,713) ($ 74,983) ($ 57,209) - ( 7,864) ( 7,864) ($ 65,073)	$ 5,382,432 270,151 ( 7,713 ) 262,438 $ 5,644,870 $ 5,702,194 295,592 ( 7,864 ) 287,728 $ 5,989,922

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

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TEST RESEARCH, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

THREE MONTHS ENDED MARCH 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

(UNAUDITED)

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax Adjustments Adjustments to reconcile profit (loss) Depreciation Amortisation Expected credit impairment (gain) loss Interest income Interest expense (Gain) loss on disposal of property, plant and equipment Changes in operating assets and liabilities Changes in operating assets Notes receivable Accounts receivable Other receivables Inventory Other current assets Changes in operating liabilities Contract liabilities Notes payable Accounts payable Other payables Other current liabilities Provisions for liabilities Other non-current liabilities Cash inflow generated from operations Interest received Interest paid Income taxes paid Net cash flows from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from disposal of financial assets at amortised cost Decrease in other financial assets Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of intangible assets (Increase) decrease in refundable deposits Net cash flows from (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Lease principal repayment Net cash flows used in financing activities Effect due to changes in exchange rate Net increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period

Threemonths endedMarch 31 Notes 2021 2020 $ 389,679 $ 333,525 6(15) 30,067 26,410 6(15) 3,223 2,960 12(2) ( 4,499 ) 1,416 ( 2,085 ) ( 2,100 ) 6(6) 388 338 6(14) ( 1,450 ) 200 ( 66,624 ) 4,162 ( 184,273 ) ( 208,399 ) ( 3,777 ) ( 7,260 ) ( 129,818 ) ( 161,698 ) ( 15,021 ) ( 5,990 ) 17,566 ( 26,752 ) 9,062 4,122 301,457 263,441 ( 74,549 ) ( 72,659 ) ( 175 ) ( 2,710 ) ( 2,003 ) 2,861 ( 3,129 ) ( 458 ) 264,039 151,409 2,834 2,562 ( 388 ) ( 338 ) ( 30,850 ) ( 2,804 ) 235,635 150,829 130,892 ( 20,770 ) - 2,998 6(5) ( 13,506 ) ( 6,767 ) 3,928 116 ( 5,045 ) ( 3,047 ) ( 1,145 ) 1,797 115,124 ( 25,673 ) ( 6,631 ) ( 7,050 ) ( 6,631 ) ( 7,050 ) ( 7,549 ) ( 5,766 ) 336,579 112,340 1,560,909 1,300,530 $ 1,897,488 $ 1,412,870

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

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TEST RESEARCH, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS THREE MONTHS ENDED MARCH 31, 2021 AND 2020

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

(UNAUDITED)

1. HISTORY AND ORGANISATION

Test Research, Inc. (the Company) was incorporated in April 1989 under the provisions of the Company Law of the Republic of China (R.O.C.). The Company and its subsidiaries (collectively referred herein as the “Group”) are primarily engaged in the design, assembly, manufacture, sales, repairs and maintenance of automated inspection and testing equipment.

1. THE DATE OF AUTHORISATION FOR ISSUANCE OF THE CONSOLIDATED FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORISATION

These consolidated financial statements were reported to the Board of Directors on May 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:

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

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

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

the Group

None.

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(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:

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Effective date by
International
Accounting
New Standards, Interpretations and Amendments Standards Board
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New Standards,Interpretations andAmendments	Effective date by International Accounting StandardsBoard
Amendments to IFRS 3, ‘Reference to the conceptual framework’	January 1, 2022
Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets between an investor and its associate or joint venture’	To be determined by International Accounting Standards
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 16, ‘Property, plant and equipment: proceeds before	January 1, 2022
intended use’
Amendments to IAS 37, ‘Onerous contracts - cost of fulfilling a contract’	January 1, 2022
Annual improvements to IFRS Standards 2018 - 2020	January 1, 2022

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

(1) Compliance statement

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

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

(2) Basis of preparation

• A. Except for defined benefit liabilities recognised based on the net amount of pension fund assets less present value of defined benefit obligation, the consolidated financial statements have been prepared under the historical cost convention.

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• 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:

The basis for preparation of consolidated financial statements is consistent with the basis used in the 2020 consolidated financial statements.

B. Subsidiaries included in the consolidated financial statements:

Name of investor	Name of subsidiary	Main business activities	% of Ownership	% of Ownership	Description
			March 31, 2021	December 31, 2020
Test Research, Inc. Test Research, Inc. Test Research, Inc. Test Research, Inc. Test Research, Inc. Test Research, Inc. Test Research, Inc. TRI INVESTMENTS LIMITED (TIL) TRI INVESTMENTS LIMITED (TIL)	DOLI TRADING LIMITED (DOLI) TEST RESEARCH USA INC. (TRU) TRI TEST RESEARCH EUROPE GMBH (TRE) TRI JAPAN CORPORATION (TRJ) TEST RESEARCH INNOVATION MALAYSIA SDN BHD (TRM) TRI KOREA CO., LTD. (TRK) TRI INVESTMENTS LIMITED (TIL) TRI Electronic (Shenzhen) Limited (TRI (SHENZHEN)) TRI Electronic (Suzhou) Limited (TRI (SUZHOU))	Trading Trading Trading Trading Trading Trading Investment holdings Manufacture and sales of test equipment Manufacture and sales of test equipment	- 100 100 100 100 100 100 100 100	- 100 100 100 100 100 100 100 100	Note 1 - - - - - - - -

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Name of investor	Name of subsidiary	Main business activities	% of Ownership	% of Ownership	Description
			March 31, 2021	December 31, 2020
TRI INVESTMENTS LIMITED (TIL) TEST RESEARCH INNOVATION MALAYSIA SDN BHD (TRM) Name of investor	TRI Electronic (Shanghai) Limited (TRI (SHANGHAI)) TEST RESEARCH INNOVATION VIETNAM COMPANY LIMITED Name of subsidiary	Import and export of equipment, consulting and after- sale maintenance service of equipment Trading Main business activities			- Note 2 Description
			March 31,2020
Test Research, Inc. Test Research, Inc. Test Research, Inc. Test Research, Inc. Test Research, Inc. Test Research, Inc. Test Research, Inc. TRI INVESTMENTS LIMITED (TIL) TRI INVESTMENTS LIMITED (TIL) TRI INVESTMENTS LIMITED (TIL)	DOLI TRADING LIMITED (DOLI) TEST RESEARCH USA INC. (TRU) TRI TEST RESEARCH EUROPE GMBH (TRE) TRI JAPAN CORPORATION (TRJ) TEST RESEARCH INNOVATION MALAYSIA SDN BHD (TRM) TRI KOREA CO., LTD. (TRK) TRI INVESTMENTS LIMITED (TIL) TRI Electronic (Shenzhen) Limited (TRI (SHENZHEN)) TRI Electronic (Suzhou) Limited (TRI (SUZHOU)) TRI Electronic (Shanghai) Limited (TRI (SHANGHAI))	Trading Trading Trading Trading Trading Trading Investment holdings Manufacture and sales of test equipment Manufacture and sales of test equipment Import and export of equipment, consulting and after- sale maintenance service of equipment	100 100 100 100 100 100 100 100 100 100		Note 1 - - - - - - - - -

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• Note 1: On September 9, 2020, the Board of Directors of DOLI TRADING LIMITED (DOLI) resolved and approved to dissolve the company and the liquidation was completed on November 5, 2020.

• Note 2: TEST RESEARCH INNOVATION VIETNAM COMPANY LIMITED (TRV) was established on October 30, 2020.

The financial statements of the abovementioned subsidiaries included in the Group’s consolidated financial statements for the three months ended March 31, 2021 and 2020 were not reviewed by independent auditors as these subsidiaries did not meet the definition of a significant subsidiary.

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

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

• E. Significant restrictions: None.

• F. Subsidiaries that have non-controlling interests that are material to the Group: None.

(4) Employee benefits

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

(5) Income tax

The interim period income tax expense is recognised based on the estimated average annual effective income tax rate expected for the full financial year applied to the pretax income of the interim period, and the related information is disclosed accordingly.

are as follows:

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

There have been no significant changes as of March 31, 2021. Please refer to Note 5 in the consolidated financial statements for the year ended December 31, 2020.

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6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

		March 31, 2021	December 31, 2020	December 31, 2020		March 31, 2020
Cash on hand and revolving
funds	$	439	$	1,378	$	1,448
Checking accounts and
demand deposits		683,755		817,104		1,171,422
Time deposits		133,294		2,428		-
Short-term notes and bills		1,080,000		739,999		240,000
	$	1,897,488	$	1,560,909	$	1,412,870

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.

(2) Financial assets at amortised cost

Current items: Time deposits maturing over three months	March31,2021 100,530 $	December31,2020 March 31, 2020 231,422 $ 225,547 $

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

(3) Notes and accounts receivable

			March31,2021		December 31, 2020	December 31, 2020			March 31, 2020
Notes receivable		$	139,464		$	72,840		$	21,181
Accounts receivable		$	2,041,382		$	1,857,149		$	2,150,088
Less: Allowance for
uncollectible
accounts	(		6,101)	(		10,640)	(		8,597)
		$	2,035,281		$	1,846,509		$	2,141,491

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

Not past due Past due Up to 60 days 61 to 90 days 91 to 180 days 181 to 365 days Over 365 days	Accounts Notes receivable receivable 1,677,498 $ 139,464 $ 262,967 - 33,135 - 22,517 - 37,730 - 7,535 - 2,041,382 $ 139,464 $ March31,2021	December	Notes receivable 72,840 $ - - - - - 72,840 $ 31,2020	March31,2020	March31,2020
	Accounts receivable 1,677,498 $ 262,967 33,135 22,517 37,730 7,535 2,041,382 $	Accounts receivable 1,474,156 $ 237,903 33,441 95,778 8,165 7,706 1,857,149 $		Accounts receivable 1,867,773 $ 136,269 94,323 24,774 17,155 9,794 2,150,088 $	Notes receivable
					21,181 $ - - - - -
					21,181 $

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The above ageing analysis was based on past due date.

• B. As at March 31, 2021, December 31, 2020 and March 31, 2020, accounts receivable and notes receivable were all from contracts with customers. As of January 1, 2020, the balance of receivables from contracts (including notes receivable) with customers amounted to $1,967,108.

• C. As at March 31, 2021, December 31, 2020 and March 31, 2020, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the Group’s notes receivable were $139,464, $72,840 and $21,181, and accounts receivable were $2,035,281, $1,846,509 and $2,141,491, respectively.

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

(4) Inventories

Raw materials Work in progress Finished goods Merchandise Raw materials Work in progress Finished goods Merchandise Raw materials Work in progress Finished goods Merchandise		March31,2021
	Allowance for Cost valuation loss 962,392 $ 121,962) ($ 190,184 1) ( 6,175 86) ( 9,784 2,518) ( 1,168,535 $ 124,567) ($ December31,2020		Bookvalue
			840,430 $ 190,183 6,089 7,266
			1,043,968 $
	Allowance for Cost valuation loss 915,509 $ 118,064) ($ 86,240 8) ( 14,293 85) ( 39,393 2,549) ( 1,055,435 $ 120,706) ($ March31,2020		Bookvalue
			797,445 $ 86,232 14,208 36,844
			934,729 $
	Allowance for Cost valuation loss 801,289 $ 103,703) ($ 172,084 104) ( 4,530 - 22,301 3,571) ( 1,000,204 $ 107,378) ($		Bookvalue
			697,586 $ 171,980 4,530 18,730
			892,826 $

The cost of inventories recognised as expense for the period:

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		Threemonths	ended	March31
		2021		2020
Cost of goods sold	$	604,931	$	505,063
Loss on slow-moving inventories		3,930		6,272
	$	608,861	$	511,335

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(5) Property, plant and equipment

At January 1 Cost Accumulated depreciation Opening net book amount as at January 1 Additions Transfers from inventories Disposals Depreciation charge Net exchange differences Closing net book amount as at March 31 At March 31 Cost Accumulated depreciation			2021	2021
	Land 1,166,021 $ - 1,166,021 $ 1,166,021 $ - - - - - 1,166,021 $ 1,166,021 $ - 1,166,021 $	Buildings and structures	Machinery and equipment Transportation equipment 414,098 $ 6,752 $ 238,558) ( 3,358) ( 175,540 $ 3,394 $ 175,540 $ 3,394 $ 1,016 - 12,096 - 2,453) ( - 7,953) ( 214) ( 1,778) ( 64) ( 176,468 $ 3,116 $ 440,413 $ 6,604 $ 263,945) ( 3,488) ( 176,468 $ 3,116 $	Office equipment	Miscellaneous equipment
		921,538 $ 279,696) ( 641,842 $ 641,842 $ - - - 4,525) ( - 637,317 $ 921,538 $ 254,221) ( 667,317 $		222,402 $ 150,498) ( 71,904 $ 71,904 $ 605 7,947 22) ( 6,937) ( 26) ( 73,471 $ 225,747 $ 152,276) ( 73,471 $	164,463 $ 121,244) ( 43,219 $ 43,219 $ 2,266 536 3) ( 3,807) ( 223) ( 41,988 $ 166,712 $ 124,724) ( 41,988 $

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At January 1 Cost Accumulated depreciation Opening net book amount as at January 1 Additions Transfers from inventories Disposals Depreciation charge Net exchange differences Closing net book amount as at March 31 At March 31 Cost Accumulated depreciation				2020
	Land 1,166,021 $ - 1,166,021 $ 1,166,021 $ - - - - - 1,166,021 $ 1,166,021 $ - 1,166,021 $	Buildings and structures	Machinery and equipment	Transportation equipment	Office equipment
		921,538 $ 231,592) ( 689,946 $ 689,946 $ - - - 4,526) ( - 685,420 $ 921,538 $ 236,118) ( 685,420 $	372,789 $ 226,871) ( 145,918 $ 145,918 $ 3,579 5,862 221) ( 4,555) ( 2,440) ( 148,143 $ 399,595 $ 251,452) ( 148,143 $	5,789 $ 3,643) ( 2,146 $ 2,146 $ - - - 120) ( 23) ( 2,003 $ 5,680 $ 3,677) ( 2,003 $	229,006 $ 141,942) ( 87,064 $ 87,064 $ 2,774 723) ( 91) ( 7,205) ( 21) ( 81,798 $ 224,954 $ 143,156) ( 81,798 $

A. Each property, plant and equipment does not include significant components.

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

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－ (6) Leasing arrangements lessee

• A. The Group leases offices and rental contracts are typically made for periods from 2019 to 2025. 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 shall not be used as security for borrowing purposes.

• B. Short-term leases pertain to leases of dormitories and company cars with a lease term of not more than 12 months.

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

Buildings Buildings	March31,2021 Carrying amount 37,305 $	December31,2020 March31,2020 Carryingamount Carryingamount 44,109 $ 60,516 $ 2021 2020 Depreciation charge Depreciation charge 6,631 $ 6,317 $ Threemonths endedMarch31	March31,2020 Carryingamount 60,516 $

• D. For the three months ended March 31, 2021 and 2020, the additions to right-of-use assets were $112 and $5,208, respectively.

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

Items affecting profit or loss Interest expense on lease liabilities Expense on short-term lease contracts Leases expense of low-value assets	Threemonths endedMarch31	Threemonths endedMarch31
	2021 388 $ 2,444 $ 309 $	2020
		338 $
		2,196 $
		- $

• F. For the three months ended March 31, 2021 and 2020, the Group’s total cash outflow for leases were $9,772 and $9,584, respectively.

(7) Other payables

Salaries and bonus payable Employees’ compensation and directors’remuneration payable Others	March31,2021 113,904 $ 41,615 70,235 225,754 $	December31,2020 193,065 $ 32,731 74,507 300,303 $	March31,2020 95,224 $ 35,759 72,973 203,956 $

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(8) 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 pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company contributes monthly an amount equal to 2% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company 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 for the deficit by next March.

• (b) For the aforementioned pension plan, the Group recognised pension costs of $47 and $111 for the three months ended March 31, 2021 and 2020, respectively.

• (c) Expected contributions to the defined benefit pension plan of the Group for the year ending December 31, 2022 amount to $2,353.

B. Defined contribution plans

• (a) Effective July 1, 2005, the Company and its domestic subsidiaries have established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company contributes monthly an amount not lower than 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) Other overseas companies have a defined contribution plan in accordance with the local regulations, and contributions to endowment insurance and pension reserve are based on employees’ salaries and wages. Other than the monthly contributions, the Group has no further obligations.

• (c) For the aforementioned pension plan, the Group recognised pension costs of $6,818 and $6,396 for the three months ended March 31, 2021 and 2020, respectively.

(9) Share capital

The Company’s authorised capital was $2,500,000. As of March 31, 2021, the Company’s issued and outstanding capital was $2,362,160. All proceeds from shares issued have been collected.

(10) 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

~20~

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 capitalised mentioned above should not exceed 10% of the paidin capital each year. Capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient.

(11) Retained earnings

• A. Under the Company’s Articles of Incorporation, the dividend policy of the Company is based on the Company’s future capital expenditure budget and capital requirements. Dividends shall be appropriated from accumulated distributable earnings, and the distribution amount shall not be lower than 60% of accumulated distributable earnings, of which cash dividends shall not be lower than 50% of the total dividends distributed. The current year’s earnings, if any, shall first be used to pay all taxes and offset prior years’ 1osses and then 10% of the remaining amount shall be set aside as legal reserve until the amount of legal reserve is equal to the amount of total capital. After the provision or reversal of special reserve, the remaining earnings constitute the distributable earnings of the current year. The appropriation of the remaining earnings along with the unappropriated earnings of prior years shall be proposed by the Board of Directors and approved by the shareholders at the shareholders’ meeting.

• B. The appropriations of 2020 earnings had been proposed by the Board of Directors on February 24, 2021 and the appropriations of 2019 earnings had been resolved at the stockholders’ meeting on May 27, 2020. Details are summarised below:

Year ended December 31

YearendedD	ecember31
Dividends per Amount share(in dollars) Legal reserve 108,921 $ Special reserve 10,061) ($ Cash dividends 779,513 $ 3.3 $ 2020	2019
	Dividends per Amount share (in dollars) 93,344 $ 25,475 $ 779,513 $ 3.3 $

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

• D. (a) In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.

• (b) The amounts previously set aside by the Company as special reserve on initial application of IFRSs in accordance with Order No. Financial-Supervisory-Securities-Corporate-1010012865,

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dated April 6, 2012, shall be reversed proportionately when the relevant assets are used, disposed of or reclassified subsequently.

(12) Sales revenue

		Three months	ended	March 31
		2021		2020
Revenue from contracts with customers	$	1,347,772	$	1,162,501

A. Disaggregation of revenue from contracts with customers

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

Asia America Europe Others	Three months ended March 31	Three months ended March 31
	2021 1,146,187 $ 57,298 138,473 5,814 1,347,772 $	2020
		1,076,274 $ 20,966 58,280 6,981
		1,162,501 $

B. Contract liabilities

The Group has recognised the following revenue-related contract liabilities:

==> picture [444 x 29] intentionally omitted <==

For the three months ended March 31, 2021 and 2020, the Group’s contract liabilities on January 1, 2021 and 2020 were realised to revenue amounting to $22,359 and $47,814, respectively.

(13) Other income

Other income
Rental income Other income	Three months ended March31
	2021 1,712 $ 1,298 3,010 $	2020
		1,497 $ 4,458
		5,955 $

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(14) Other gains and losses

Other gains and losses
			Threemonths ended			March31
			2021			2020
Gains (losses) on disposal of property, plant and
equipment		$	1,450	($		200)
Net currency exchange (losses) gains	(		2,967)			7,389
Other losses	(		36)	(		1)
	($		1,553)		$	7,188

(15) Expenses by nature

Expenses by nature
Employee benefit expense Depreciation charges on property, plant and equipment and right-of-use assets Amortisation charges on intangible assets	2021 2020 267,673 $ 230,980 $ 30,067 26,410 3,223 2,960 300,963 $ 260,350 $ Threemonths endedMarch31
		260,350 $

(16) Employee benefit expense

Wages and salaries Labour and health insurance fees Pension costs Other personnel expenses	Threemonths endedMarch31	Threemonths endedMarch31
	2021 228,297 $ 21,705 6,865 10,806 267,673 $	2020
		198,404 $ 16,987 6,507 9,082
		230,980 $

• A. In accordance with the amendments of the Articles of Incorporation, which was approved by the shareholders during the shareholders’ meeting on May, 29, 2019, 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 2% for directors’ remuneration.

• B. For the three months ended March 31, 2021 and 2020, employees’ compensation was accrued at $5,864 and $5,212, respectively; while directors’ remuneration was accrued at $3,020 and $2,685, respectively. The aforementioned amounts were recognised in salary expenses. The employees’ compensation and directors’ remuneration were estimated and accrued based on the distributable profit of current year for the three months ended March 31, 2021 and 2020 and the percentage as prescribed in the Company’s Articles of Incorporation.

The employees’ compensation and directors’ remuneration for 2020 as resolved by the Board of Directors on February 24, 2021 were in agreement with those amounts recognised in the 2020 financial statements.

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

(17) Income tax

• A. Income tax expense

• (a) Components of income tax expense:

Current tax: Current tax on profit for the period Prior year income tax underestimation Total current tax Deferred tax: Origination and reversal of temporary differences Income tax expense	2021 2020 64,917 $ 59,691 $ 7,018 - 71,935 59,691 22,152 3,683 94,087 $ 63,374 $ Threemonths endedMarch31	2021 2020 64,917 $ 59,691 $ 7,018 - 71,935 59,691 22,152 3,683 94,087 $ 63,374 $ Threemonths endedMarch31
		59,691
		3,683
		63,374 $

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

as follows:
		Three months ended March31
		2021	2020
Currency translation differences	($	1,966)	1,928) ($

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

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(18) Earnings per share

Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Assumed conversion of all dilutive potential ordinary shares Employees’ compensation Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Assumed conversion of all dilutive potential ordinary shares Employees’ compensation Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares

Weighted average number of ordinary shares outstanding (shares in Earnings per share Amount aftertax thousands) (indollars) 295,592 $ 236,216 1.25 $ - 323 295,592 $ 236,539 1.25 $ Weighted average number of ordinary shares outstanding (shares in Earnings per share Amount after tax thousands) (indollars) 270,151 $ 236,216 1.14 $ - 344 270,151 $ 236,560 1.14 $ Threemonths endedMarch31,2021 Threemonths endedMarch31,2020

Amount after tax 270,151 $ - 270,151 $

As employees’ compensation could be distributed in the form of stock, the diluted EPS computation shall include those estimated shares that would increase from employees’ stock compensation issuance in the calculation of the weighted-average number of common shares outstanding during

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the reporting year, taking into account the dilutive effect of stock compensation on potential common shares.

7. RELATED PARTY TRANSACTIONS

(1) Parent and ultimate controlling party

The Company’s shares are widely held. The Company does not have an ultimate parent and ultimate controlling party.

(2) Key management compensation

Salaries and other short-term employee benefits Post-employment benefits	2021 2020 12,672 $ 9,520 $ 270 193 12,942 $ 9,713 $ Three months ended March 31

• A. Salaries and other short-term employee benefits include regular wages, special responsibility allowances, various bonuses, service execution fees, directors’ and supervisors’ remuneration and employees’ compensation, etc.

• B. Post-employment benefits represent pension costs.

8. PLEDGED ASSETS

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

Pledged asset		March31,2021 388,990 $ 50,143 439,133 $	December31,2020 388,990 $ 50,542 439,532 $ Bookvalue	March31,2020 Purpose 388,990 $ Security for lines of credit 51,736 " 440,726 $
Property, plant and equipment - Land - Buildings

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT COMMITMENTS

None.

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

None.

12. OTHERS

(1) Capital management

The Group’s main objectives when managing capital are to ensure solid and good capital ratio in order to support operations and to provide maximum returns for shareholders. The Group manages and adjusts capital structure based on economic situation and debt ratio, and achieves the purpose

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of maintaining and adjusting capital structure possibly by adjusting dividend payment or shares issuance.

(2) Financial instruments

A. Financial instruments by category

==> picture [448 x 292] intentionally omitted <==

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

0 March 31, 2021 December 31, 2020 March 31, 2020
Financial assets
Financial assets at amortised cost
Cash and cash equivalents $ 1,897,488 $ 1,560,909 $ 1,412,870
Financial assets at amortised cost 100,530 231,422 225,547
Notes receivable 139,464 72,840 21,181
Accounts receivable 2,035,281 1,846,509 2,141,491
Other receivables 23,878 20,850 27,814
Guarantee deposits paid
(shown as “other non-current
assets”) 11,435 10,290 9,794
$ 4,208,076 $ 3,742,820 $ 3,838,697
Financial liabilities
Financial liabilities at amortised cost
Notes payable $ 25,844 $ 16,782 $ 30,520
Accounts payable 796,054 494,597 719,187
Other payables 217,063 287,766 203,956
$ 1,038,961 $ 799,145 $ 953,663
Lease liabilities (including current
$ 36,894 $ 43,508 $ 59,731
portion)
----- End of picture text -----

B. Financial risk management policies

The Group adopts an overall risk management and control system to identify and measure a variety of financial risks including market risk, credit risk, liquidity risk and cash flow interest rate risk. This allows the management of the Group to effectively control and measure market risk, credit risk, liquidity risk and cash flow interest risk.

• C. Significant financial risks and degrees of financial risks

• (a) Market risk

Foreign exchange risk

• i. The Group operates internationally and is exposed to exchange rate risk arising from the transactions of the Company and its subsidiaries used in various functional currency, primarily with respect to the USD, RMB, JPY and EUR. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities.

• ii. The Group’s businesses involve some non-functional currency operations. The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

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(Foreign currency: functional currency) Financial assets Monetary items USD:NTD RMB:NTD Non-monetary items USD:NTD EUR:NTD MYR:NTD KRW:NTD RMB:NTD Financial liabilities Monetary items USD:NTD RMB:NTD EUR:NTD JPY:NTD USD:KRW			March31,2021	March31,2021	March31,2021
	Foreign currency amount (in thousands) 49,315 $ 62,422 1,958 579 4,098 727,651 191,857 4,934 $ 3,029 778 56,921 690	Exchange rate 28.54 4.34 28.54 33.48 6.57 0.03 4.34 28.54 4.34 33.48 0.26 1,121.66	Book value (NTD) 1,407,204 $ 271,161 55,880 19,395 26,932 18,511 833,428 140,792 $ 13,158 26,047 14,669 19,689	SensitivityAnalysis
				Degree of variation 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1%	Effect on profit of loss 14,072 $ 2,712 - - - - - 1,408 $ 132 260 147 197	Effect on other comprehensive income
						- $ - 569 194 267 185 8,334 - $ - - - -

~28~

(Foreign currency: functional currency) Financial assets Monetary items USD:NTD RMB:NTD Non-monetary items USD:NTD EUR:NTD JPY:NTD MYR:NTD KRW:NTD RMB:NTD Financial liabilities Monetary items USD:NTD RMB:NTD USD:KRW			December	31,2020	31,2020
	Foreign currency amount (inthousands) 45,531 $ 68,440 1,997 590 31,179 2,878 537,079 175,678 1,898 $ 6,693 718	Exchangerate 28.48 4.38 28.48 35.02 0.28 6.79 0.03 4.38 28.48 4.38 1,077.16	Book value (NTD) 1,296,723 $ 299,562 56,886 20,650 8,615 19,540 14,200 768,434 54,055 $ 29,995 20,449	SensitivityAnalysis
				Degree of variation 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1%	Effect on profit of loss 12,967 $ 2,996 - - - - - - 541 $ 300 204	Effect on other comprehensive income
						- $ - 569 207 86 195 142 7,684 - $ - -

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(Foreign currency: functional currency) Financial assets Monetary items USD:NTD RMB:NTD JPY:NTD Non-monetary items USD:NTD EUR:NTD JPY:NTD MYR:NTD KRW:NTD RMB:NTD Financial liabilities Monetary items USD:NTD RMB:NTD EUR:NTD			March31,2020	March31,2020	March31,2020
	Foreign currency amount (inthousands) 47,879 $ 130,288 61,235 1,636 846 50,232 2,124 398,956 163,137 1,448 $ 54,220 550	Exchangerate 30.23 4.26 0.28 30.23 33.24 0.28 6.72 0.03 4.26 30.23 4.26 33.24	Book value (NTD) 1,447,143 $ 554,375 17,072 49,441 28,105 14,005 14,266 9,974 694,146 43,766 $ 230,706 18,282	SensitivityAnalysis
				Degree of variation 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1%	Effect on profit of loss 14,471 $ 5,544 171 - - - - - - 438 $ 2,307 183	Effect on other comprehensive income
						- $ - - 494 281 140 143 100 6,941 - $ - -

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• iii. Total exchange (loss) income, including realised and unrealised, arising from significant foreign exchange variation on the monetary items held by the Group for the three months ended March 31, 2021 and 2020 amounted to ($2,967) and $7,389, respectively.

Price risk

The Group has no equity instruments held for trading; thus, the Group has no price risk.

Cash flow and fair value interest rate risk

The Group has no borrowings; thus, the Group has no cash flow and fair value 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’s credit risk management policy is that for banks and financial institutions, only institutions with good credit rating are accepted. According to the Group’s credit policy, each local entity in the Group is responsible for managing and analysing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board of Directors. The utilisation of credit limits is regularly monitored.

• iii. In accordance with the internal management policy of the Group, if the contract payments were past due over 120 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.

• iv. In accordance with the internal management policy of the Group, the default occurs when the contract payments are past due over 365 days.

• v. 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.

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

• vii. The Group writes off the financial assets, which cannot be reasonably expected to be recovered, after initiating recourse procedures. However, the Group will continue

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executing the recourse procedures to secure their rights.

• viii.The Group used the forecastability to adjust historical and timely information to assess the default possibility of accounts receivable. On March 31, 2021, December 31, 2020 and March 31, 2020, the provision matrix based on the loss rate methodology is as follows:

Group A:

Group A:
							91~180		181~365	Over 365
		Not	1~60 days		61~90 days			days	days		days
		past due	past due		past due		past due		past due	past due			Total
March 31, 2021
Expected loss rate	0.03%-0.18%			1.5%		15%		25%	40%		100%
Total book value	$	217,920	$	25,180	$	-	$	937	2,096 $	$	970	$	247,103
Loss allowance		398		378		-		234	838		970			2,818
							91~180		181~365	Over 365
		Not	1~60 days		61~90 days			days	days		days
		past due	past due		past due		past due		past due	past due			Total
December 31, 2020
Expected loss rate	0.03%-0.43%			1.5%		15%		25%	40%	60%-100%
Total book value	$	190,377	$	15,832	$	-	$	-	3,770 $	$	1,091	$	211,070
Loss allowance		821		237		-		-	1,508		987			3,553
							91~180		181~365	Over 365
		Not	1~60 days		61~90 days			days	days		days
		past due	past due		past due		past due		past due	past due			Total
March 31, 2020
Expected loss rate	0.028%~0.03			1.5%		15%		25%	40%	60%-100%
Total book value	$	459,534	$	38,906	$	54,242	$	2,516	1,175 $	$	3,181	$	559,554
Loss allowance		114		418		968		629	470		2,399			4,998
Group B:
		March		31,2021		December 31,			2020	March31,		2020
Expected loss rate			0.03%-0.18%				0.03%-0.43%				0.02%-0.22%
Total book value		$		1,794,279 $				1,646,079 $			1,590,534
Loss allowance				3,283					7,087			3,599

Group B:

Group A: Customers excluding Group B.

Group B: Domestic and foreign clients that have good operating conditions, high degree of financial transparency, proceeds of collections of transaction and are rated with optimised internal credit rating. The default possibility that the Group used the forecastability to adjust historical and timely information to assess was 0.03%, which was used to assess the default possibility of accounts receivable.

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

			2021			2020
At January 1		$	10,640		$	7,257
(Reversal of) provision for impairment	(		4,499)			1,416
Effect of exchange rate changes	(		40)	(		76)
At March 31		$	6,101		$	8,597

(c) Liquidity risk

• i. Cash flow forecasting is performed and aggregated by the Group’s treasury. Surplus cash held by the operating entities over and above balance required for working capital management are invested in interest bearing current accounts and time deposits, choosing instruments with appropriate maturities or sufficient liquidity to provide sufficient headroom as determined by the abovementioned forecasts.

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

March 31, 2021 Notes payable Accounts payable Other payables Lease liabilities December 31, 2020 Notes payable Accounts payable Other payables Lease liabilities March 31, 2020 Notes payable Accounts payable Other payables Lease liabilities Non-derivative financial liabilities: Non-derivative financial liabilities:	Less than 1year $ 25,844 796,054 217,063 17,969 Less than 1year $ 16,782 494,597 300,303 22,187 Less than 1year $ 30,520 719,187 203,956 26,317	Over 1year
		$ - - - 29,217 Over 1year
		$ - - - 32,622 Over 1year
		$ - - - 40,102

(3) Fair value information

• A. The Group has no financial instruments measured at fair value by valuation method.

• B. The carrying amounts of cash and cash equivalents, financial assets at amortised cost, notes receivable, accounts receivable, other receivables, notes payable, accounts payable and other

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payables and guarantee deposits paid are approximate to their fair values.

13. SUPPLEMENTARY DISCLOSURES

(1) Significant transactions information

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

• B. Provisions of endorsements and guarantees to others: None.

• C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): None.

• D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company’s paid-in capital: None.

• E. Acquisition of real estate reaching $300 million or 20% of paid-in capital or more: None.

• F. Disposal of real estate reaching $300 million or 20% of paid-in capital or more: None.

• G. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 2.

• H. Receivables from related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 3.

• I. Trading in derivative instruments undertaken during the reporting periods: None.

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

(2) Information on investees

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

(3) Information on investments in Mainland China

• A. Basic information: Please refer to table 6.

• B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: Please refer to Table 2 to 4.

(4) Major shareholders information

Major shareholders information: Please refer to Table 7.

14. SEGMENT INFORMATION

(1) General information

The Group is primarily engaged in the design, assembly, manufacture, sales, repairs and maintenance of automated inspection and testing equipment. The Group operates business only in a single industry. 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.

~34~

(2) Measurement of segment information

The accounting policies of the operating segments and the Group are the same. The Group uses the operating profit as the measurement for operating segment profit and the basis of performance assessment.

(3) Information about segment profit or loss, assets and liabilities

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

is as follows:
	Threemonths	endedMarch31
	2021	2020
Revenue from external customers	1,347,772 $	1,162,501 $
Segment profit	386,525 $	318,620 $

(4) Reconciliation for segment income (loss)

Net profit (loss) of segments reported to the chief operating decision maker is measured in a manner consistent with revenues and expenses in the income statement. A reconciliation of segment profit (loss) to profit (loss) before tax and discontinued operations is provided as follows:

Reportable segments income Unallocated profit or loss: Non-operating income and expenses Income before tax from continuing operations	Three months ended March 31
	2021 2020 $ 386,525 $ 318,620 3,154 14,905 $ 389,679 $ 333,525

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Test Research, Inc. and Subsidiaries

Loans to others Three months ended March 31, 2021

Table 1

Expressed in thousands of NTD (Except as otherwise indicated)

Maximum outstanding Amount of Collateral General Is a balance during the Balance at Actual transactions Reason for Allowance Limit on loans Ceiling on ledger related three months ended March 31, amount Interest Nature of with the short-term for doubtful granted to a total loans No. Creditor Borrower account party March 31, 2021 2021 drawn down rate loan borrower financing accounts Item Value single party granted Footnote 1 TRI Electronic TRI Electronic Other Yes $ 26,304 $ 26,064 $ 26,064 4.75% Short-term $ - Additional $ - None $ - $ 598,992 $ 1,197,984 Note 1 (Shanghai) Limited (Suzhou) Limited receivables financing operating capital

• Note 1: The Board of Directors resolved to amend TRI Electronic (Shanghai) Limited's policy “Procedures for Provision of Loans” and the policy is as follows:

Ceiling on total loans to others: 50% of the creditor's net worth. For business transactions, if for short-term financing purpose, the ceiling on loans shall not exceed 40% of the creditor's net worth. Limit to a single party is RMB 4 million. However, limit on loans for financing granted by and to subsidiaries with the same ultimate parent which directly or indirectly holds 100% of its voting shares shall not exceed 20% of parent company's net worth. Ceiling to the aforementioned single party shall not exceed 10% of parent company's net worth.

Table 1 Page 1

Test Research, Inc. and Subsidiaries Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paid-in capital or more Three months ended March 31, 2021

Table 2

Expressed in thousands of NTD (Except as otherwise indicated)

Differences in transaction terms compared to third

							Differences in transaction terms compared to third	Differences in transaction terms compared to third
Purchaser/seller	Counterparty	Relationship with the counterparty		Transaction			partytransactions		Notes/accounts receivable(payable)		Footnote
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable(payable)
Test Research, Inc. TRI Electronic (Shenzhen) Limited	TRI Electronic (Shenzhen) Limited Test Research, Inc.	Second-tier subsidiary Parent company	Sales Purchases	125,333 $ 125,333	11% 100%	90-120 days after acceptance and same with the third parties 90-120 days after acceptance	40% to 60% of the standard price offered to third parties Determined by the parent company	90-120 days after acceptance and same with the third parties 90-120 days after acceptance	Accounts receivable $120,762 Accounts payable ($120,762)	7% 80%	None None

Table 2 Page 1

Test Research, Inc. and Subsidiaries

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

Three months ended March 31, 2021

Table 3

Expressed in thousands of NTD (Except as otherwise indicated)

Creditor	Counterparty	Relationship with the counterparty	Balance as at March31,2021	Turnover rate	Overduereceivables	Overduereceivables	Amount collected subsequent to the balance sheet date (Note)	Allowance for doubtfulaccounts
					Amount	Actiontaken
Test Research, Inc. Test Research, Inc.	TRI Electronic (Suzhou) Limited TRI Electronic (Shenzhen) Limited	Second-tier subsidiary Second-tier subsidiary	143,028 $ 120,762	1.85 0.82	10,157 $ -	In the process of collection -	13,929 $ 45,400	- $ -

Note: The subsequent collections were reviewed prior to the review report date.

Table 3 Page 1

Test Research, Inc. and Subsidiaries

Table 4

Significant inter-company transactions during the reporting period

Three months ended March 31, 2021

Expressed in thousands of NTD (Except as otherwise indicated)

Transactions

Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)	General ledger account	Amount(Note 4)	Transaction terms	Percentage of consolidated total operating revenues or total assets
0 0 0 0 0 0 1 2 3	Test Research, Inc. Test Research, Inc. Test Research, Inc. Test Research, Inc. Test Research, Inc. Test Research, Inc. TRI Electronic (Shenzhen) Limited TRI Electronic (Suzhou) Limited TRI Electronic (Shanghai) Limited	TRI Electronic (Suzhou) Limited TRI Electronic (Shenzhen) Limited TRI Electronic (Suzhou) Limited TRI Electronic (Shenzhen) Limited TRI KOREA CO., Ltd. TRI Electronic (Suzhou) Limited Test Research, Inc. Test Research, Inc. TRI Electronic (Suzhou) Limited	1 1 1 1 1 1 2 2 3	Sales revenue Sales revenue Accounts receivable Accounts receivable Accounts receivable Other receivables Service revenue Service revenue Other receivables	93,755 $ 125,333 132,156 120,762 19,016 10,872 32,026 16,072 26,064	Note 3 Note 3 Note 3 Note 3 Note 8 Note 3 Notes 6 and 7 Notes 6 and 7 Note 5	7 9 2 2 - - - - -

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

• (1) Parent company is ‘0’.

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

• Note 2: Relationship between transaction company and counterparty is classified into the following two categories:

• (1) Parent company to subsidiary.

• (2) Subsidiary to parent company.

(3) Subsidiary to subsidiary.

Note 3: Selling prices to the parent company and the Mainland China investees are determined based on 40% to 60% of the standard sales price. The credit term is 90 to 120 days after acceptance and was the same with the third parties.

• Note 4: Only related party transactions in excess of $10,000 are disclosed. Corresponding transactions from the other side are not disclosed.

Note 5: Loans to others.

• Note 6: Companies signed agency agreements with subsidiaries and second-tier subsidiary, and the subsidiaries and second-tier subsidiary act as product sales agent.

Note 7: Commission revenue was based on agency contract, others were based on agreed conditions.

• Note 8: The price is determined based on the mutual agreement.

Table 4 Page 1

Test Research, Inc. and Subsidiaries

Information on investees

Table 5

Expressed in thousands of NTD (Except as otherwise indicated)

Three months ended March 31, 2021

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at March31,2021	Shares held as at March31,2021	Shares held as at March31,2021	Net profit (loss) of the investee for the three months ended March31,2021	Investment income (loss) recognised by the Company for the three months ended March31,2021	Footnote
				Balance as at March31,2021	Balance as at December 31, 2020	Number of shares	Ownership (%)	Bookvalue
Test Research, Inc. Test Research, Inc. Test Research, Inc. Test Research, Inc. Test Research, Inc. Test Research, Inc. TRI MALAYSIA SDN. BHD	TRI INVESTMENTS LIMITED TEST RESEARCH USA, INC. TRI TEST RESEARCH EUROPE GMBH TRI JAPAN CORPORATION TRI MALAYSIA SDN. BHD TRI KOREA CO., Ltd. TEST RESEARCH INNOVATION VIETNAM COMPANY LIMITED	Samoa United States Germany Japan Malaysia South Korea Vietnam	Investment holdings Trading Trading Trading Trading Trading Trading	219,811 $ 61,299 17,679 10,750 2,066 10,591 4,153	219,811 $ 61,299 17,679 10,750 2,066 10,591 4,153	6,724,109 1,518,935 - 720 1,000,000 80,000 -	100 100 100 100 100 100 100	836,174 $ 55,880 19,395 8,646 26,932 18,511 9,830	57,548 $ 1,109) ( 354) ( 635 8,256 4,906 6,015	75,076 $ 1,109) ( 354) ( 635 8,256 4,906 6,015	Note 2 None Note 1 None None None None

Note 1: A limited liability company.

Note 2: The investment loss included the elimination of intercompany transactions.

Table 5 Page 1

Test Research, Inc. and Subsidiaries

Information on investments in Mainland China - Basic information

Three months ended March 31, 2021

Table 6

Expressed in thousands of NTD (Except as otherwise indicated)

Investee in Mainland China	Main business activities	Paid-in capital (Note 3)	Investment method (Note 1)	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2021 (Note 3)	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the three months ended March 31,2021	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the three months ended March 31,2021	Accumulated amount of remittance from Taiwan to Mainland China as of March 31, 2021(Note 3)	Net income of investee for the three months ended March 31, 2021	Ownership held by the Company (direct or indirect)	Investment income recognised by the Company for the three months ended March 31, 2021(Note 2(2)B.)	Book value of investments in Mainland China as of March 31, 2021(Note 5)	Accumulated amount of investment income remitted back to Taiwan as of March 31,2021	Footnote
					Remitted to Mainland China	Remitted back to Taiwan
TRI Electronic (Shenzhen) Limited TRI Electronic (Suzhou) Limited TRI Electronic (Shanghai) Limited Companyname	Manufacture and sales of test equipment $ 87,032 Manufacture and sales of test equipment 73,875 Import and export of equipment, consulting and after-sale maintenance service of equipment 111,287 Accumulated amount of remittance from Taiwan to Mainland China as of March 31,2021(Note 3)		2 $ 21,401 2 57,070 2 111,287 Investment amount approved by the Investment Commission of the Ministry of Economic Affairs(MOEA) (Note 3)		$ - $ - - - - - Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA(Note 4)		$ 21,401 57,070 111,287	$ 43,423 11,063 3,062	100 100 100	$ 43,423 11,063 3,062	$ 656,974 100,818 75,636	$ - - -
Test Research, Inc.	$ 189,758		$ 276,688		$ 3,593,923

Note 1: Investment methods are classified into the following three categories:

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

• (2) Through investing in an existing company in the third area, which then invested in the investee in Mainland China. (Reinvested through TRI INVESTMENTS LIMITED)

• (3) Based on the investees’ financial statements which were not reviewed by audiors.

Note 2: In the ‘Investment income (loss) recognised by the Company for the three months ended March 31, 2021’ column:

• (1) It should be indicated if the investee was still in the incorporation arrangements and had not yet any profit during this period.

• (2) Indicate the basis for investment income (loss) recognition in the number of one of the following three categories:

• A. The financial statements were audited and attested by international accounting firm which has cooperative relationship with accounting firm in R.O.C.

• B. The financial statements were audited and attested by R.O.C. parent company’s CPA.

• C. Based on the investees’ financial statements which were not reviewed by audiors.

Note 3: The amount was originally denominated in USD and was translated to NTD at the exchange rate (1:28.54) prevailing at the balance sheet date.

Note 4: The highest of $80,000, 60% of the stockholder's equity and 60% of consolidated net assets.

Note 5: Including net changes of realised and unrealised profit from sales.

Table 6 Page 1

Test Research, Inc. and Subsidiaries

Major shareholders information March 31, 2021

Table 7

Table 7
Name of major shareholders Shares	Number of shares held	Ownership (%)
Chieh-Yuan, Chen	37,889,235	16.04%
Mei-Hsing, Yeh	17,338,054	7.33%
Der-Hsin Investment Co., Ltd.	13,464,174	5.69%

• Note 1: The major shareholders information was derived from the data that the Company issued common shares (including treasury shares) and preference shares in dematerialised form which were registered and held by the shareholders above 5% on the last operating date of each quarter and was calculated by Taiwan Depository & Clearing Corporation. The share capital reflected in the financial statements may be different from the actual number of shares in dematerialised form due to the difference in the calculation basis.

• Note 2: If the aforementioned data contains shares which were held in trust by the shareholders, the data is disclosed as a separate account of the client which was set by the trustee. As for the shareholder who reports share equity as an insider whose shareholding ratio is greater than 10%, in accordance with the Securities and Exchange Act, the shareholding ratio includes the self-owned shares and shares held in trust, and at the same time, the shareholder has the power to decide how to allocate the trust assets. For the information on reported share equity of insider, please refer to the Market Observation Post System.

Table 7 Page 1