TXC - Annual Report 2020 | FinancialReports.eu

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Vision

To be the best company with commitment to business excellence and sustainability.

Mission

The world’s most trusted provider of electronic components.

Core Value

In line with the founding spirit of "Integrity, Practicality, Innovation, Service", and the organization and management culture of "Harmony, Unity, and High Efficiency", the two are compatible to form the core value of Taiwan Crystal Technology.

Whether it is internally or externally, to people or to things.

Honesty is always our most fundamental and important requirement, mutual trust fulfills every prudent promise; establish comprehensive quality and risk awareness, seek truth from facts, look into the bottom line, and look to the future for healthy development; continuous improvement and excellence, and continuous pursuit of operation, management, technology, and marketing Innovate in all aspects; adhere to high-quality growth, provide services attentively, and achieve every task entrusted to obtain the full trust of employees, customers, shareholders, business partners and the market.

Whether it is employees, customers, shareholders, business partners, or even society or the region. People and the environment are always the important lifeline supporting the survival and development of an enterprise, and we attach great importance to the development and maintenance of sustainable and harmonious relations of interest. We use a kind heart, people-oriented, treat employees kindly, and create a happy corporate culture. We use a responsible heart to implement company management and governance, create value for shareholders and customers, and fulfill our corporate social responsibilities and obligations as a global citizen.

We pay attention to discipline, but not red tape. We are open to communication, but not in a bureaucratic manner.

We respect the individual, but don't follow suit. We value efficiency, but don't compromise quality. We are convinced that only teamwork can be united, go all out to implement effectively, and be unafraid of challenges. Maintaining common values can achieve our mission and move towards our vision.

Chapter 1 Letter to Shareholders
Chapter 2 Company Profile
Chapter 3 Corporate Governance
Chapter 4 Capital Overview
Chapter 5 Business Information
Chapter 6 Financial Information
Chapter 7 Review of Financial Conditions, Operating Results, and Risk Management
Chapter 8 Special Disclosure
Appendix1 Consolidated Financial Statements and Independent Auditors’ Report
Appendix2 Unconsolidated Financial Statements and Independent Auditors’ Report

Chapter 1 Letter to Shareholders

Dear Shareholders,

Under the continuous impact of the new crown virus epidemic and the Sino-US trade war, the global economy and industrial supply chain in 2020 will experience unprecedented challenges and changes. Intense changes in terminal demand, tight supply and shipment of raw materials, fluctuations in market price mechanisms, maintenance of customer relationships, etc., while testing the operational flexibility and decision-making response speed of the chain organization, it also brings a new wave of development opportunities for the company's competitive differences. Benefiting from the proper implementation of the government’s anti-epidemic control, all plant operations have maintained normal operations. The products have been recognized and trusted by customers and the market for a long time, and the production capacity has been continuously expanded to give full play to the benefits of mass production. Through active and effective coordination of production and sales and cost control, the overall operating performance set an exciting new record in 2020.

I. 2020 Operation Results

(I) Consolidated revenue and net profit Unit: NT$1,000

Items \ Year	2020	2019	Increase (Decrease) Amount	Change Rate (%)
Net Revenue	11,048,392	8,430,970	2,617,422	31.05%
Gross Profit	3,332,806	2,007,091	1,325,715	66.05%
Net Profit	1,429,287	671,782	757,505	112.76%

Consolidated statement of income and profitability

Item	Year	2020	2019
Financial Structure (%)	Debt/Assets Ratio	41.84	34.94
	Long-term Capital/ Fixed Assets Ratio	239.33	260.78
Debt-Paying Ability (%)	Current Ratio	196.37	284.10
	Quick Ratio	136.58	205.84
Profitability (%)	Return on Assets	9.65	5.32
	Return on Equity	15.58	7.70
	Earnings Per Share`（`NT$`）`	4.61	2.17

(II)Budget Execution

The internal budget target set by the company each year does not disclose financial forecasts to the outside world. The overall revenue and profit will be affected by industry changes and product structure. The combined operating income and profit of 2020 are reached 100.76% and 99.62% of the budget target.

(III) Research and development

The company continuously developing and optimizing high-stability, high-frequency, wide-temperature, and ultra-miniaturized quartz component products, including Temperature Compensating Control Quartz Oscillator (TCXO) 、 Temperature Sensing Quartz Crystal 、 (TSX) Miniature Constant Temperature Control Quartz Crystal Oscillator (OCXO), Miniature Quartz Crystal (XO) 、 Miniature Mobile Device Crystal(Crystal) 、 Sensors…etc. to accelerate the

deployment and introduction of Tier 1 customers in the three major industries of 5G / automotive / IoT.

(IV) Results from execution of other projects

(1) Green enterprise
In order to comply with the government's energy-saving and carbon-reduction policies and energy regulations, the company has continuously implemented energy-saving and carbon-reduction programs every year. TXC has built a rooftop solar power generation system with a power generation capacity of approximately 65,100 degrees in 2020. It promotes the recycling and reuse of process waste heat and new installations. The heat pump system saves energy, and continues to promote certifications and activities related to green enterprises. In addition to the continuous greenhouse gas inventory (ISO14064-1), TXC also strives to promote the reduction of food waste and the reduction of plastic bags in order to further reduce the pollution of plastic bags. The use of the bag represents ours determination to support green power and energy saving and carbon reduction with actions.
(2) Occupational safety and health
TXC has continued to promote Occupational Health and Safety Assessment Series certification to uphold labor safety under the guidance of the Occupational Safety & Health Committee and Labor-Management Conference. A number of health promotion activities such as Getting to Know Metabolic Syndrome health lecture, pap smear testing, HPV virus awareness lecture, CPR and Heimlick maneuver instruction, workplace quit smoking activity, oral cancer screening activity, individual weight reduction activity, stress relief activity, blood pressure monitoring activity and flu vaccine inoculation activity were held by TXC to help employees take positive steps towards a healthy lifestyle. TXC will continue on working to create of a safe work environment to provide maximum safety to our employees.
(3) System certification
With regard to the maintenance of various operating systems, TXC has received the following certifications: Quality Management System (ISO9001), Automotive Industry Quality Management System (ISO/TS16949), Environmental Management System (ISO14001), Taiwan Occupational Safety and Health Management System (CNS15506), Information Safety Management System (ISO/IEC27001), Hazardous Substance Process Management System (IECQ QC 080000:2012), Occupational Safety and Health Management System (ISO45001). The Ministry of Finance's Customs and Excise Department issues high-quality enterprises with safety certification (AEO), the Ministry of Economic Affairs and Industry Bureau issues the Taiwan Intellectual Property Management Specification (TIPS) Verification Level A, and the Ministry of Health and Welfare issues a healthy workplace certification-health promotion mark and had ISO 14064-1:2006 Greenhouse Gas Inventory. TXC will continue to update its management systems to satisfy and surpass customer requirements
(4) Corporate governance and responsibility
According to the results of previous corporate governance evaluations, TXC continues to be the front-end shift for all listed companies. Adhere to the concept of honest management and actively strengthen corporate governance to protect the rights and interests of stakeholders, and establish a sound and efficient board of directors to strengthen the responsibility of the board of directors for supervision and management. The Volunteer Association and TXC Foundation established by TXC are also engaged in a number of community care and education support activities, which are disclosed in the corporate social responsibility report.

II. 2021 Business Plan Summary

1 、 Strengthening industrial deployment and increasing market share
(1) Consolidate and steadily expand the existing market, continuously improve quality and reduce manufacturing costs.
(2) Actively develop new markets, new industries, new applications, new products, and deploy 5G, Internet of Things and automotive markets.
(3) Invest in the development of advanced and high-end manufacturing processes, accelerate the mass production and launch of new products, and enhance the competitive advantage.
2 、 Optimize cost structure and increase profitability
(1) Improve product mix: Integrate production cost differences, optimize product mix, and expand sales of high-margin products.
(2) Strengthen superior resources: Through group management, effective integration of resources, cross-plant coordination and cooperation, play to the advantages of each plant in different locations, and maintain organizational flexibility and response speed.
(3) Reduce production costs: improve production yield, reduce product bad costs, strengthen production and sales coordination, improve inventory turnover, improve process improvement capabilities, and effectively use data to analyze costs and solve problems.
3 、 Through strategic alliances and integration of internal and external resources, accelerate the transfer of key technologies and professional capabilities, as well as the development speed of new products and new process to effectively manager risks and enters new markets.

Looking forward to the next few years, many uncertainties in the environment and regional power struggles will continue to have an impact on the global economy and industry, and business risks will remain severe. Facing the huge opportunities and challenges at hand, only by cultivating product technology, constantly innovating and breaking through, implementing digital intelligent manufacturing, quickly and flexibly responding to market opportunities, and establishing a competitive advantage that cannot be imitated, can we respond to more intense competition and changes in the future. The management team will uphold the attitude of excellence and the spirit of entrepreneurial hard work, continue to create value for shareholders and create happiness for colleagues more rigorously and professionally, and hope to become a top enterprise with outstanding performance and sustainable operation. Value-added reengineering and new heights!

Chapter 2 Company Profile

I. Date of Incorporation

TXC is a professional frequency control component and sensor component manufacturer. Since the company’s founding in 1983, it has been devoted to research and development, design, production, and sale of quartz component product series. Products include high precision, high quality quartz crystal, automotive crystal, crystal oscillators, and timing modules. Market demand has led TXC to develop multiple kinds of sensors using independent core technology, products that are widely used in mobile communication, data and storage equipment, IoT, and automotive electronics, smart home, AI, medical, 5G…ext.

Over the years, we have upgraded customer value objectives and offered customers a variety of frequency control components for module design-in requirements to provide a total solution to satisfy the overall requirements of customers. TXC performance with regard to price, quality, delivery time and service continues to exceed customer expectations time and time again.

II. Company History

1983 Founded in Taiwan with US$95,000 capital.
1984 Began production on DIP type crystals and oscillators in Peitou factory.
1993 ISO9002 certified.
1995 Winner of the 4[th] National Award of Small and Medium Enterprises.
1997 Began production of SMD type crystals and oscillators in Taoyuan factory. 1998 Began production os SAW devices. Implemented Oracle ERP system. 1999 Established US sales office. 2000 Increased capital to US$25.3 million. 2001 IPO’ed with capital increased to US$37 million.
2002 Listed in the Taiwan Stock Exchange(Code-3042), ISO14001 certified.
Ranked among the top 10 worldwide frequency control product manufacturers.
2003 Began to offer value-added products(HF CXO/VCXO,OCXO,FX,etc.) for the telecom market.
Began production in new factory in NIngbo, China.
2004 Implemented QoS and 6-Sigma management systems. QS9000 certified.
Established US Technology Center.
2005 ISO/TS16949 certified.
Ranked number 6 among the worldwide frequency control product manufacturers.
2006 Expanding Tauouan factory. Adding production lines in Taiwan and China. The capacity reached to 70 million units per month. Authorized Capital: US$57.9 million.
2007 New factory in Pingzhen inaugurated, factory expansion project in Ningbo factory launched, Intel presented the Preferred Quality Supplier, promotion of the Six Sigma project to Ningbo plant green belt training, procurement of the Shenzhen office, implementation of employee stock option, CB conversion, and recapitalization of surplus to NT$2,415,530,000.
2008 Simultaneously expanded factories in Pingzhen, Taiwan and Ningbo, China; won Intel’s Supplier Continuous Quality Improvement (SCQI) Award; won A+ evaluation for information disclosure and top 10 potential golden torch award; continued to promote the 6-Sigma black belt training program at Ningbo and Pingzhen plants. Set up sales operations in Osaka, Japan and Singapore to promote sales. Issued employee options and implement the treasury stock system. Set up subsidiary TXC Hongkong; execute employee option, CB conversion, surplus conversion to increase capitalization to NT$2,716,980,000.
2009 Second phase of Taiwan Pingchen and China Ningbo plant expansion initiated, received A+ ranking and top 10 award at sixth annual Information Disclosure and Transparency Ranking, on-the-job training plan launched for personnel at Ningbo and Pingchen plants, received Preferred Quality Supplier Award recognition again from Intel, strengthen company internal controls to ensure corporate governance

effectiveness, promoted transparency of corporate governance information, exercised employee stock warrants, convertible bonds, capital increase by retained earnings to NT$2,887.27 million.

2010 Issued third convertible bond, received corporate governance system evaluation certification from the Taiwan Corporate Governance Associations, received industry model award for the Technology Industry B group from Commonwealth Magazine, awarded National Quality Award from Executive Yuan, continued to implement 6-Sigma black belt training plan for Ningpo and Pingchen plants, set up sales office in Europe to expand business, purchased offices in Shanghai and Suzhou, started third phase of plant expansion for Taiwan PCF, purchased 5,733 level ground of land, built the factories for new energy business unit, execute employee stock option and increase capital out of earning to 2.971 billion NT dollars.

2011 Completion and launch of Taiwan Pingzhen Third-Stage plant expansion and New Energy Division plant, establishment if TXC (Chongqing) Electronics Co., Ltd. production site, established Chongqing All Suns Company Limited and Ningbo Jingyu Company Limited, expansion of European subsidiary, receives A+ grade and top 10 award at Eighth Annual Information Disclosure and Evaluation, passed CGR report review, received Energy Conservation Elite, Outstanding Innovation Award and Commonwealth Corporate Citizen Award, received Taoyuan County Corporate Innovation Award, received ISO50001 Energy Management System, ISO28000 Supplier Chain Management System, ISO27001 Information Security Management System certification, Oracle ERP system upgraded to R12 version, valid assessment of remuneration fairness combined with performance evaluation, establishment of remuneration committee, exercise of employee stock warrants, NT$3,022,420,000 capital increase by capital surplus.

2012 TXC (Chongqing) Corporation plant construction, awarded Authorized Economic Operator (AEO) by the MOF Customs Administration, passed BSI greenhouse gas (ISO 14064-1), product carbon footprint (PAS 2050) inventory, product carbon neutralization (PAS 2060) inventory, given Corporate Citizenship Award by Commonwealth Magazine, received green sustainable enterprise award from BSI, external certification of CSR Report conformed to GRI G3.1 A+ and AA 1000 standards, passed CNS 15506 TOSHMS, awarded ninth annual Information Disclosure and Transparency A++ and top ten ranking, exercised employee stock options, convertible bond and NT$3,097,579,000 capital increase.

2013 Issued fourth convertible bond, TXC (Chongqing) Corporation begin formal mass production, received Taiwan Mittlestadt Award from the Ministry of Economic Affairs, passed review for R&D subsidy for a leading new product development project from the Industrial Development Bureau, was awarded CG6008 Advanced Corporate Governance certification, 10[th] annual A++ information disclosure assessment rating, passed greenhouse gas inventory (ISO14064-1), product carbon footprint inventory (PAS2050) and product carbon neutrality (PAS2060) verification, named as one of the top 50 Excellence in CSR Award winners by Commonwealth Magazine and a three star 3[rd] annual Happiest Company Award from the Taipei City Government Department of Labor

2014 TXC’s Pingzhen Plant, Ningbo Plant and Chongqing Plant expanded in 2014, new offices in Shenzhen and Beijing were bought, won the A++ award for the Eleventh Information Disclosure Assessment, the Fourth Place in the 8th Global Corporate Citizens Award for Pillar Enterprises of Commonwealth Magazine, the 2nd Excellent Enterprise in Hiring Foreign Workers of Taoyuan County Government, the silver award of Taiwan Top50 Enterprises Sustainability Report Award for large high-tech electronics manufacturing industry of Taiwan’s Sustainable Energy Research Foundation, and passed certification of Greenhouse Gas Inspection (ISO14064-1), Corporation Sustainability Report, Product Carbon Footprint (PAS2050), Product Carbon Neutralization (PAS 2060), Information Security Management System (ISO 27001), Supply Chain Security Management System (ISO 28000) and Water Footprint for Information Security Launching Award and the GRC Management Paradigm Award by the British Standards Institute.

2015 Taiwan Pingzhen factory and TXC (Chongqing) continued production line expansion; successfully renewed “Authorized Economic Operator (AEO)” certification; received 12th “Information Disclosure Evaluation” A++ award; ranked within the top 20% of well-administered companies for the first time; passed “Greenhouse Gas Inspection (ISO14064-1); recognized by Huawei as “2015 Core Supplier”; praised by the British Standards Institution with an “Outstanding Management Model Award”; recognized

by CommonWealth Magazine as a “Commonwealth CSR Corporation”; promoted Industry 4.0 intelligent factory transformations; the company’s LED department officially established itself as a separate entity under the name TXC OPTECH Corporation.; the joint venture, Guangdong Failong Crystal Technology Co. Ltd., was officially listed on the Shenzhen Stock Exchange.

2016 Taiwan Pingzhen factory, Ningbo factory, and Chongqing factories continue expanding production lines; receives subsidies through the Department of Commerce Department of Industry Manufacturing Upgrade and Innovation Optimization Plan (particulate matter sensor development); ranked within the top 5% of well-administered companies; Awarded Authorized Economic Operator (AEO) certification by the Ministry of Finance, received EPA’s Product Carbon Footprint Emission Factor Database Establishment Award, received BSI’s Environment Governance Practice Award, BSI occupational safety and health certificcations and BSI CSR report verification.

2017 Continued expansion of the production lines at Taiwan’s Pingzhen Plant, Ningbo Plant and Chongqing plant. The 3[rd] corporate governance rating ranked within the top 5% of rated companies, received IDB ’’Corporate Volunteer Award’’, passsed Material Flow Cost Accounting (ISO 14051 、 MFCA),passed’’IATF 16949’’ verification awarded’’BSI Sustainability Awards’’,’’BSI Occupational safety and health’’verification,’’BSI CSR AA1000/GRI G4’’ verification,passed Information Security Management System (ISO 27001) verification, established TXC Foundation.

2018 Awarded Authorized Economic Operator (AEO) certification by the Ministry of Finance, established TXC Europe GmbH, Chongqing All Suns Company Limited Real Estate Development Project launched, The 4[th] corporate governance rating ranked within the top 5% of rated companies, Won the international trade 、 bureau's import certificate of excellence the approvel of the Ministry of Economic Affairs, the 、 research and development project of the Ministry of Economics Received the "Perpetual Pilot Award" from the British Standards Association

2019 Taiwan Pingzhen Plant, Ningbo Plant and Chongqing Plant Continue to Plan Production Line Expansion 、 The fifth corporate governance evaluation is the top 6% ~ 20% of listed companies 、 Won the 、、
2019 Huawei Gold Supplier Award 2019 Xiaomi Core Supplier Award RBA Sustainable Development Award 、 Industry Contribution Award from the Ministry of Economic Affairs, INVENTEC Excellent Manufacturer Award 、 Passed the certification of "ISO 45001 Occupational Safety and Health System" 、 Passed the 108-year industrial upgrading and innovation platform counseling plan of the Ministry of Economics' Science and Technology Research and Development Project 、 Obtained Taiwan Intellectual Property Management Specification (TIPS) verification level A
2020 Taiwan's Pingzhen Plant, Ningbo Plant and Chongqing Plant continue to plan for the expansion of production lines. 90% of the Chongqing All Suns Company Limited Real Estate Development Project was completed and Chongqing Dingsen Commercial Management Co., Ltd. was established, GROWING PROFITS TRADING LTD was completed and the liquidation was completed. The 6[th] corporate governance evaluation is among the top 6%-20% of listed companies. It has passed the "BSI Corporate Social Responsibility Report AA1000/GRI" verification and passed the BSI " ISO 9001 Quality Management System", "IATF 16949 Automotive Quality Management System", "ISO 27001 Information Security Management System" and other three-year recertification audits, and passed the second year of the "Taiwan Intellectual Property Management Standard Verification Level A" by the Industrial Bureau of the Ministry of Economic Affairs (2016 (Annual Edition)” verified A-level, continuously passed Sony GP certification to obtain GP certificate, passed the 109-year Ministry of Economic Affairs Science and Technology Research and Development Project Industrial Upgrade Innovation Platform Guidance Program, won the British Standards Institute’s "Sustainable Resilience Outstanding Award", won the economic Ministry of Industry Bureau Pingzhen Industrial Zone Service Center awarded the "Park Green and Beautification Adoption Performance Outstanding Award"

Chapter 3 Company Governance

I. Organization

(I) Organizational Structure As of Dec.31, 2020

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Board of Shareholders
Audit Committee
Board of Directors
Chairman Office
Remuneration Committee
Investment Review Committee
Internal Audit Dept.
President Office
Labor Safety and Hygiene Office
MEMS
Sales & Quality Overseas
Development and Administrator Supply Chain Manufacturing
Marketing Assurance R&D Center Subsidiaries
Manufacturing Center Center Center
Center Center
Center
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(II) Responsibilities and functions of major departments

Department	Responsibilities and Functions
Chairman office	 The formulation of the company's long-term business development strategy  New technology and investment feasibility risk and business opportunity assessment  Overall financial planning and investment management development  Risks and business opportunity assessment on the feasibility of new technology and investment  Supervision over the operations of overseas subsidiary
President office	 The Company's overall operating policies and objectives management, budget planning and setting  All kinds of business supervision and coordination, and management  The advises, modifications and implementation on major business decisions
Internal Audit Dept.	 Planning for the annual audit plan and perform audit operations based on the annual audit plan and present audit reports to CEO, Chairman, independent directors, the Audit Committee and the Board of Directors  Submit periodic reports to the Competent authority  Supervision over the subsidiary’s internal control and audits  Assessment on the management performance of each unit and guidance on improvement

Department	Responsibilities and Functions
	 Modifications on the internal control system and implementation rules  Promote thepractice of corporate ethical management
Sales & Marketing Center	 Product sales, PO processing and customer development & services  Analysis on the competitors, production and sales, product marketing strategies and, products’ marketing strategies and industrial market  Costs, prices and sample development management  Emerging market, new products and sales services development  Services and solution on customer’s product application issues  Formulating product marketing strategy  Set the operational (sales, costs,quality)goals, strategiesplanning
R & D Center	 Formulate short, medium and long-term development directions and plans for product and technology research and development  New product R & D and introduction of mass production  Technology transfer of new products / materials and introduction of mass production  Studying, execution and introduction of the R & D project  New product features assessment and marketing development  Planning, promotion, technology transfer and manufacturing for the development of new miniaturized, high precision and highly reliable products  Developing and improving new product equipment, modules, instruments and jigs  Planning, promotion, technology transfer and manufacturing for the development project of new production processes technology  Studying, execution and introduction of the R & D project  Assist in the trial production and assessment on new product samples from each product-engineering unit  Establish core R&D capabilities andprocess improvement
Manufacturing Center	 Coordinating the use of overall production center (Ping-Zhen Plant, Ning-Bo Plant & Chong-Qing Plant) resources (manpower, equipment, production capacity, budget investment, etc.)  Managing the KPIs (Key Performance Indicators) of each production plant under the production center  Executing the production capacity expansion plan required to achieve the Company’s operating goals  Acknowledge the overall production strategies and trends of the quartz crystal industry  Manufacturing for the products  Planning and improving the production flow  Improving and developing the production process flow  Management and maintenance operations for the production equipment  Supervision and execution on industrial safety & health and environmental management system  Inspection and maintenance onpublic system equipment
MEMS/BLK Development and Manufacturing Center	 Coordinating the use of overall wafer production resources (equipment, production capacity, etc.)  Acknowledge the overall wafer production strategies and trends of the quartz crystal industry  Coordinating various management particulars under the MEMS chip center in terms of equipment, manpower and technology

Department	Responsibilities and Functions
	 Promotion of various managerial policies  Executing the wafer production capacity expansion plan and the product and technical development of micro-electromechanical system (MEMS) chips required to achieve the Company’s operating goals  Wafer production  Development of wafer technology and improvement on oscillator properties  Planning and improving the production flow  Improving and developing the production process flow  Management and maintenance operations for the production equipment  Executing various production and sales coordination, material control and delivery management particulars  Supervision and execution on industrial safety & health and environmental management system
Quality Assurance Center	 Review and set company-wide annual quality / environment, health and safety (EHS) goals  Establishing, auditing and coordinating the company-wide quality, environmental and green product systems to ensure their effective operations  Formulate work plan and implementation of various annual quality-related activities;  Promote quality improvement operations and various quality certification systems  DCC's annual work planning and execution  Planning and execution for the quality control and inspection on purchased-materials feed, production processes of self-made wafers, finished goods and shipments  Products and materials quality management  Response toproduct customer complaints andpromotion of internal improvement
Administrator Center	 Planning and formulating organizational system and departmental responsibilities of the Company  Coordinate the formulation and implementation of the company's business plan  The establishment, implementation and continuous improvement of the company's various management systems and operating procedures  Review on the effectiveness of intended promotion for the Company’s annual budget preparation and review  The generation and analysis of the Company's various accounting processes, costs and financial accounting information  Financial management, capital movement and handling of shares of listed companies  Effectively manage human resources, develop and cultivate talent echelon, establish a good organizational culture and labor-management relations  Implement factory and general administrative tasks to ensure the company’s environmental safety and health  Planning, construction and maintenance management of company network communication and information application systems  The company's smart digital development strategy and information security planning and execution management  Implement corporate social environmental responsibility, integrity management, corporate governance and compliance with laws and regulations  Establish and protect related intellectual property and improve the knowledge management system
Supply Chain	 Product cost and selling price management,product supply plan formulation and

Department	Responsibilities and Functions
Center	execution  Group capacity allocation planning, production scheduling and management, production and sales balance and inventory management  Order delivery approval and delivery management  Supplier development, supplier development plan promotion, supply (cost, delivery, partnership) management  Purchase operation and process management of equipment, raw materials, wip, finished goods and general supplies  Warehousing, incoming and outgoing packaging and logistics, customs declaration operation management  Supply market data (supply and demand, prices, technology, policies, etc.) aggregation and trend analysis  Management and execution of non-finishedproducts trade and foundry projects
Labor Safety and Hygiene Office	 Leading the safety and health review, safety and health risk assessment and other EHS management, as well as being in charge of the planning for the safety and health management system and the enactment of various related procedures  Supervising the safety and health management particulars  Formulating, planning and promoting safety and health management particulars, as well as guiding related departments in the implementation  Responsible for collecting and identifying safety and health related laws and regulations  Responsible for internal and external communication on issues related to safety and health, andprovide related consultations
Remuneration Committee	 Formulate and review the remuneration policies, systems, standards and structures  Regularly evaluate the reasonable basis for the remuneration and performance appraisal of the Company’s directors and managers  Regularlysupervise the implementation of the remuneration system
Audit Committee	 Establishment or modification of the internal control system and the assessment on the effectiveness of internal control system  Establishment or modification of the procedures for material financial business behaviors such as acquisition or disposal of assets, engaging in derivative commodity transactions, capital lending to others, endorsing or providing guarantees for others  Procedures for conduct major financial business activities  Assessment on matters concerning interests of the directors themselves  Assessment on major asset investments, major derivative commodity transactions, capital lending, endorsement or provision of guarantees  Assessment on the offering, issuing or private placement of equity securities  Evaluating the appointment, dismissal or remuneration of a Certified Public Accountant and the appointment or dismissal of a Chief Financial Officer, Chief Accounting Officer or chief audit executive  Review financial reports
Investment Review Committee	 Review the company and its subsidiaries' external strategic investments, mergers and acquisitions (including mergers, acquisitions and divisions, etc.), and joint venture investment projects with others, and submit recommendations to the board of directors for discussion  Review the company's and its subsidiaries' investment in new businesses, mergers and acquisitions(includingmergers,acquisitions and divisions,etc.),andjoint

Department	Responsibilities and Functions
	venture investment projects with others, and submit recommendations to the board of directors for discussion  Review the implementation status of existing investment projects every year  Execute related affairs according to the resolutions of the board of directors, and report the results of execution and other related matters to the board of directors

II. Documents of directors, president, vice presidents, associate vice presidents, and managers of each departments and divisions

(I) Directors

1. Director Information

(I) Directors 1. Director Information	(I) Directors 1. Director Information	(I) Directors 1. Director Information	(I) Directors 1. Director Information	(I) Directors 1. Director Information	(I) Directors 1. Director Information	(I) Directors 1. Director Information
As of April 2,2021
			Date Elected	Date First	Major Academic (professional)	Current Position in the Company
Position and Name	Gender	Nationality
			(Appointed)	Elected	Experience	or Other Companies

Chairman and CEO Lin, Wan-Shing	Male	Republic of China	2019/06/12	1989/11/05	Master in Management, National Taiwan University of Science and Technology Director and President of TXC Corporation Director and CEO of TXC Corporation	Director and CEO of TXC Corporation Chairman of TAIWAN CRYSTAL TECHNOLOGY INTERNATIONAL LIMITED Director of TXC JAPAN CORPORATION LTD Chairman of TAIWAN CRYSTAL TECHNOLOGY(HK) LTD Corporation Director of TXC (NINGBO) CORPORATION Director of TXC (CHONGQING) CORPORATION Director ofChongqing All Suns Company Limited Supervisor of Ningbo Longying Semiconductor Co., Ltd Chairman of Tai-Shing Electronics Components Corporation Chairman of Liang Shing EcLife Corp. Supervisor of Piezoelectric Crystal Industries Association of Taiwan
Director Lin, Jin-Bao	Male	Republic of China	2019/06/12	1989/11/05	MBA, West Texas A&M University, USA Chairman of TXC Corporation Founder of TXC Corporation	Director of TXC Corporation and member Of Investment Review Committee of TXC Corporation Director of Liang Shing EcLife Corp. Director of Tai-Shing Electronics Components Corporation Juristic-person director representative of uPI Semiconductor Corp Juristic-person director representative of Hantic precision technology , Inc Director of Piezoelectric Crystal Industries Association of Taiwan

			Date Elected	Date First	Major Academic (professional)	Current Position in the Company
Position and Name	Gender	Nationality
			(Appointed)	Elected	Experience	or Other Companies

Director Chen Chueh, Shang-Hsin	Male	Republic of China	2019/06/12	2010/06/15	Master of management, Zhejiang University Director and Vice President of TXC Corporation Director and Deputy CEO of TXC Corporation	Director and Deputy CEO of TXC Corporation Chairman of TXC (NINGBO) CORPORATION Chairman of TXC (CHONGQING) CORPORATION Director ofChongqing All Suns Company Limited Supervisor of Ningbo Jingyu Company Limited Vice Chairman and Juristic-person director representative of Ningbo Longying Semiconductor Co., Ltd Chairman of Ningbo Xingmao Electronic Technology Co., Ltd Juristic-person director of Tai-Shing Electronics Components Corporation
Director Kuo, Ya-Ping	Male	Republic of China	2019/06/12	2019/06/12	Boston University ,MBA Executive Deputy General Manager and Deputy General Manager of Management Center of TXC Corporation President of Management Center of TXC Corporation	Director & President of TXC Corporation
Director Huang, Hsiang-Lin	Male	Republic of China	2019/06/12	2019/06/12	State University of New York at Albany, Master of Business Administration (MBA) Sales assistant manager of Marketing Center of TXC Corporation	Sales assistant manager of Marketing Center of TXC Corporation
Director Hsu, Hsing-Hao	Male	Republic of China	2019/06/12	2019/06/12	M.S. degree - Electrical and Computer Engineering, Colorado State University Chairman of Kang-Shuo Investment Corporation R&D Manager of Chan-Yu Corporation	Director of TXC Corporation Member Of Investment Review Committee of TXC Corporation Director of Golden Biotechnology Corporation Chairman of Kang-Shuo Investment Corporation R&D Manager of Chan-Yu Corporation
Director TLC Capital Co.,LTD					Director of TXC Corporation	Director of TXC Corporation Member Of Investment Review Committee of TXC Corporation

			Date Elected	Date First	Major Academic (professional)	Current Position in the Company
Position and Name	Gender	Nationality
			(Appointed)	Elected	Experience	or Other Companies

Representative`：` Peng, Chih-Chiang	Male	Republic of China	2019/06/12	2010/06/15	Ph. D. of National Chiao Tung University Institute of Management of Technology Master of institute of industrial engineering of University of Pittsburgh	Juristic-person director representative of Crystalwise Technology Inc. Juristic-person director representative of Topoint Technology Co., Ltd.
Independent Director Yu, Shang-Wu	Male	Republic of China	2019/06/12	2007/06/13	Ph.D.,Birmingham University Director of business and management college of Jinwen University of Science and Technology	Professor, Ming Chi University of Technology college of management and design Independent Director of Taisun Int’l (Holding) Corp. Independent Director of TXC Corporation Member Of Remuneration Committee,Audit Committee, and Investment Review Committee of TXC Corporation Convenor of Remuneration Committee and Audit Committee of TXC Corporation Supervisor of Taiwan Economy Research Institute
Independent Director Tsai, Song-Qi	Male	Republic of China	2019/06/12	2013/06/19	Finance and Accounting Department of Shanghai University Business Administration, National Chengchi University Certified accountant and Executive Director and CSO of KMPG Taiwan	Adjunct Professor of Accounting, Soochow University Supervisor of Phalanx Biotech Chairman of EMCC Human Capital Solutions Inc Director of Daming Investment Development Co., Ltd. Director of Shangai Management Consulting Co., Ltd. Chairman of DISCOVERY FORMOSA INTERNATIONAL INC. Chairman of Zhishimei co., ltd. Director of e-Force Taiwan Co., Ltd. Independent Director of TXC Corporation Member Of Remuneration Committee, Audit Committee and Investment Review Committee of TXC Corporation

			Date Elected	Date First	Major Academic (professional)	Current Position in the Company
Position and Name	Gender	Nationality
			(Appointed)	Elected	Experience	or Other Companies

Independent Director Su, Yan-Syue	Female	Republic of China	2019/06/12	2016/06/07	Master in Industrial Management of Carnegie Mellon University, USA CIO and senior Senior VP of Pegatron corporation CIO of ASUSTek Computer Manager director of UBS bank Independent Director of Zhong Yang Technology Co., Ltd	Representer of Yongyu Investment Independent Director of AU Optronics Corp. Director of eslite Foundation for Culture and the Arts Independent Director of the eslite spectrum Corporation Juristic-person director representative of Kinsus Interconnect Technology Corp. Juristic-person director representative of SPOTFILMS CO., LTD. Independent Director of Cowell e Holdings Inc Independent Director of TXC Corporation Member Of Remuneration Committee, Audit Committee and Investment Review Committee of TXC Corporation Convenor of Investment Review Committee of TXC Corporation
Independent Director Wang, Chuan -Fen	Female	Republic of China	2019/06/12	2016/06/07	Master in Law of Columbia University, USA Legal Master of Naitonal Taiwan Universtiy International Associate of Simpson Thacher & Bartlett LLP Associate Attorney of Lin & Liu International Law Office	Partner of Chen & Lin Law Firm Independent Director of TXC Corporation Member Of Remuneration Committee, Audit Committee and Investment Review Committee of TXC Corporation

When the chairman of the board of directors and the general manager or equivalent (top manager) are the same person, spouses or relatives of each other, the reasons, rationality, necessity, future improvement measures and other relevant information shall be stated:

The CEO of the company is responsible for the planning and implementation of the company's long-term business development strategy, the overall management of the group's business team and reporting to the board of directors, while the president is responsible for the planning and management of the daily operation of each plant area. The chairman of the board of directors of the company also serves as the CEO. The company is expected to plan and implement the company's long-term business development strategy in the direction of the concept of sustainable operation, and clearly divide the functions and powers of the chairman, the CEO and the president. In addition, the number of independent directors of the company is more than 4, and more than half of the directors are not employees or managers, so as to enhance the independence of the board of directors.

2. Major shareholders of the corporate shareholdersAs of April 2,2021 Name Major Shareholder Share (%) TLC Capital Co., LTD United Microelectronics Corporation 100%	2. Major shareholders of the corporate shareholdersAs of April 2,2021 Name Major Shareholder Share (%) TLC Capital Co., LTD United Microelectronics Corporation 100%	2. Major shareholders of the corporate shareholdersAs of April 2,2021 Name Major Shareholder Share (%) TLC Capital Co., LTD United Microelectronics Corporation 100%

Name	Major Shareholder	Share (%)

TLC Capital Co., LTD	United Microelectronics Corporation	100%

Major shareholders are corporate shareholders

Name	Major Shareholder	Share (%)
United Microelectronics Corporation	JPMorgan Chase Bank, N.A. acting in its capacity as depositary and representative to the holders of ADRs	5.63%
	Hsun Chieh Investment Co.,Ltd.	3.61%
	Nan Shan Life Insurance Company, Ltd.	2.60%
	Silicon Integrated Systems Corp.	2.33%
	Yann Yuan Investment Co., Ltd.	1.64%
	New Labor Pension Fund	1.60%
	CathayLife Insurance Co., Ltd.	1.54%
	JPMorgan Chase Bank N.A., Taipei Branch in custody for Vanguard Total International Stock Index Fund,a series of Vanguard Star Funds	1.46%
	Prudential Assurance CompanyLtd.	1.24%
	JPMorgan Chase Bank, N.A., Taipei Branch in Custody for Stichting Depositary APG Emerging Markets Equity Pool	1.15%

Note1: Names of the major shareholders (who shareholding percentage shall be top 10) of the corporate shareholders and its shareholding percentage.

Note 2: The ex-dividend date of the year is on April 12, 2020.

4. Training of the directors

		Date of	TrainingDate	TrainingDate
Til	N				Oi	C N	H
te	ame	on Board	From	To	rganzer	ourse ame	our

Director	Lin, Wan-Shing	2019/06/12	2020/07/13	2020/07/13	Taiwan Corporate Governance Association	Viewing M&A Cases from the Perspective of Directors and Supervisor	3
			2020/07/13	2020/07/13		Trends and risk management of digital technologyand artificial intelligence	3
Director	Lin, Jin-Bao	2019/06/12	2020/07/13	2020/07/13	Taiwan Corporate Governance Association	Viewing M&A Cases from the Perspective of Directors and Supervisor	3
			2020/07/13	2020/07/13		Trends and risk management of digital technologyand artificial intelligence	3
Director	Chen Chueh, Shang-Hsin	2019/06/12	2020/07/13	2020/07/13	Taiwan Corporate Governance Association	Viewing M&A Cases from the Perspective of Directors and Supervisor	3
			2020/07/13	2020/07/13		Trends and risk management of digital technologyand artificial intelligence	3
Director	Kuo, Ya-Ping	2019/06/12	2020/07/13	2020/07/13	Taiwan Corporate Governance Association	Viewing M&A Cases from the Perspective of Directors and Supervisor	3
			2020/07/13	2020/07/13		Trends and risk management of digital technologyand artificial intelligence	3
			2020/09/22	2020/09/22	Taiwan Stock Exchange Corporation	Corporate Governance 3.0-Blueprint for Sustainable Development	3
Director	Huang, Hsiang-Lin	2019/06/12	2020/07/13	2020/07/13	Taiwan Corporate Governance Association	Viewing M&A Cases from the Perspective of Directors and Supervisor	3
			2020/07/13	2020/07/13		Trends and risk management of digital technologyand artificial intelligence	3
Director	Hsu, Hsing-Hao	2019/06/12	2020/07/13	2020/07/13	Taiwan Corporate Governance Association	Viewing M&A Cases from the Perspective of Directors and Supervisor	3
			2020/07/13	2020/07/13		Trends and risk management of digital technologyand artificial intelligence	3
			2020/09/22	2020/09/22	Securities and Futures Institute	Corporate Governance 3.0-Blueprint for Sustainable Development	3
			2020/10/21	2020/10/21	Securities and Futures Institute	109 Annual Prevention of Insider Trading and Insider Equity Trading Publicity Seminar	3
Director	TLC Capital Co.,LTD (Peng, Chih-Chiang)	2019/06/12	2020/07/13	2020/07/13	Taiwan Corporate Governance Association	Viewing M&A Cases from the Perspective of Directors and Supervisor	3
			2020/07/13	2020/07/13		Trends and risk management of digital technology and artificial intelligence	3
Director	Yu, Shang-Wu	2019/06/12	2020/07/13	2020/07/13	Taiwan Corporate Governance Association	Viewing M&A Cases from the Perspective of Directors and Supervisor	3
			2020/07/13	2020/07/13		Trends and risk management of digital technologyand artificial intelligence	3
Director	Tsai, Song-Qi	2019/06/12	2020/07/13	2020/07/13	Taiwan Corporate Governance Association	Viewing M&A Cases from the Perspective of Directors and Supervisor	3
			2020/07/13	2020/07/13		Trends and risk management of digital technologyand artificial intelligence	3
Director	Su, Yan-Syue	2019/06/12	2020/04/27	2020/04/27	Taiwan Corporate Governance Association	Enterprise M&A Practice and Case Analysis	3
			2020/07/13	2020/07/13		Trends and risk management of digital technologyand artificial intelligence	3
			2020/07/29	2020/07/29	Taiwan Institure of Directors	Enterprise transformation in the era of change	3
			2020/10/27	2020/10/27		Opportunities and Challenges for Enterprises in the U.S.-China Trade Conflict	3
Director	Wang, Chuan -Fen	2019/06/12	2020/07/13	2020/07/13	Taiwan Corporate Governance Association	Viewing M&A Cases from the Perspective of Directors and Supervisor	3
			2020/07/13	2020/07/13		Trends and risk management of digital technologyand artificial intelligence	3
			2020/12/02	2020/12/02		The 16th Corporate Governance Summit Forum	3

5. Information on directors’ independence

Qualification Name	Does he/she have more than 5yrs of	Does he/she have more than 5yrs of	Does he/she have more than 5yrs of
	work experience and the following						Degree of		independence (Note)
	professionalqualifications?
	Public and	Judge,	Work
																Number of
	private	prosecutor,	experience
																independent
	universities	lawyer,	in
																directors
	lecturer (or	accountants or	business,
	above) in	other certified	legal,													serving
	business,	professionals	financial,													concurrently
	legal,	and	accounting	1	2	3	4	5	6	7	8	9	10	11	12	as other
	financial,	technicians in	or fields													public
	accounting or	the fields	related to													companies
	other fields	related to the	the
	related to the	business of the	business
	business of the	Company	of the
	Company		Company
Lin, Wan-Shing			V					V	V			V		V	V	none
Lin, Jin-Bao			V					V	V	V		V		V	V	none
Chen Chueh, Shang-Hsin			V			V		V	V			V	V	V	V	none
Kuo, Ya-Ping			V		V	V		V	V	V	V	V	V	V	V	none
Huang, Hsiang-Lin			V		V			V	V	V	V	V	V	V	V	none
Hsu, Hsing-Hao			V	V	V	V	V	V	V	V	V	V	V	V	V	none
TLC Capital Co.,LTD			V	V	V	V	V	V	V	V	V	V	V	V		none
Yu, Shang-Wu	V		V	V	V	V	V	V	V	V	V	V	V	V	V	1
Tsai, Song-Qi		V	V	V	V	V	V	V	V	V	V	V	V	V	V	none
Su, Yan-Syue			V	V	V	V	V	V	V	V	V	V	V	V	V	3
Wang, Chuan-Fen		V	V	V	V	V	V	V	V	V	V	V	V	V	V	none

Note: Please add " ✓ " in the field under each criteria number if the director meets the criteria two years prior to being elected and during his/her term of service.

(1) Not an employee of the Company or any of its affiliates.

(2) Not a director or supervisor of the Company or any of its affiliates. (Do not apply to independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, the Company and its parent or subsidiary or a subsidiary of the same parent.)

(3) Not a natural-person shareholder who holds shares, together with those held by the person’s spouse, minor children, or held by the person under others’ names, in an aggregate amount of 1% or more of the total number of issued shares of the Company or is ranked in the top 10 in shareholdings.

(4) Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship, of a managerial officer under (1) or any of the persons under (2) and (3).

(5) Not a director, supervisor, or employee of a corporate shareholder that directly holds five percent or more of the total number of issued shares of the company, or that ranks among the top five in shareholdings, or that designates its representative to serve as a director or supervisor of the company under Article 27, paragraph 1 or 2 of the Company Act. (Do not apply to independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, the Company and its parent or subsidiary or a subsidiary of the same parent.).

(6) Not a director, supervisor, or employee of other company if a majority of the company's director seats or voting shares and those of that other company are controlled by the same person. (Do not apply to independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, the Company and its parent or subsidiary or a subsidiary of the same parent.).

(7) Not a director, supervisor, or employee of other company or institution if the chairman, general manager, or person holding an equivalent position of the company and a person in any of those positions at that other company or institution are the same person or are spouses.

(8) Not a director, supervisor, officer, or shareholder holding five percent or more of the shares, of a specified company or institution that has a financial or business relationship with the company. (Do not apply in cases where the specified company or institution holds more than 20 percent but less than 50 percent of the Company’s

issued shares and are the independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, the Company and its parent or subsidiary or a subsidiary of the same parent.)

(9) Not a professional individual who, or an owner, partner, director, supervisor, or officer of a sole proprietorship, partnership, company, or institution that, provides auditing services to the company or any affiliate of the company, or that provides commercial, legal, financial, accounting or related services to the company or any affiliate of the company for which the provider in the past 2 years has received cumulative compensation exceeding NT$500,000, or a spouse thereof; provided, this restriction does not apply to a member of the remuneration committee, public tender offer review committee, or special committee for merger/consolidation and acquisition, who exercises powers pursuant to the Act or to the Business Mergers and Acquisitions Act or related laws or regulations.

(10) Not a spouse or a relative within the second degree of kinship to any director.

(11) Not been involved in any of situations defined in Article 30 of the Company Act.

(12) Not elected on behalf of a government agency or corporate or as a representative of these organizations as defined in Article 27 of the Company Act.

(II) Documents of president, vice president, assistant vice president, and chief of divisions

						As of April 2, 2021 With spouse or second-class relative Relationship manager Title Name Relation None None None	As of April 2, 2021 With spouse or second-class relative Relationship manager Title Name Relation None None None	As of April 2, 2021 With spouse or second-class relative Relationship manager Title Name Relation None None None
						With spouse or
			Date of		Other Part Time Position with Other	second-class relative
Title / Name	Gender	Nationality		Major academic (professional)
			Apointmentt		Companies	Relationship manager

						Title	Name	Relation
Chairman and CEO Lin, Wan-Hsing	Male	Republic of China	1989/11/11	Master in Management, National Taiwan University of Science and Technology President of TXC Corporation Director and CEO of TXC Corporation	Director and CEO of TXC Corporation Chairman of TAIWAN CRYSTAL TECHNOLOGY INTERNATIONAL LIMITED Director of TXC JAPAN CORPORATION LTD Chairman of TAIWAN CRYSTAL TECHNOLOGY(HK) LTD Corporation Director of TXC (NINGBO) CORPORATION Director of TXC (CHONGQING) CORPORATION Director ofChongqing All Suns Company Limited Supervisor of Ningbo Longying Semiconductor Co., Ltd Chairman of Tai-Shing Electronics Components Corporation Chairman of Liang Shing EcLife Corp. Supervisor of Piezoelectric Crystal Industries Association of Taiwan	None	None	None

						With spouse or	With spouse or	With spouse or
			Date of		Other Part Time Position with Other	second-class relative
Title / Name	Gender	Nationality		Major academic (professional)
			Apointmentt		Companies	Relationship manager

						Title	Name	Relation
DeputyCEO Chen Chueh, Shan-hsing	Male	Republic of China	2002/04/01	Master of management, Zhejiang University Vice President of TXC Corporation Director andDeputyCEO of TXC Corporation	Director and Deputy CEO of TXC Corporation Chairman of TXC (NINGBO) CORPORATION Chairman of TXC (CHONGQING) CORPORATION Director ofChongqing All Suns Company Limited Supervisor of Ningbo Jingyu Company Limited Vice Chairman and Juristic-person director representative of Ningbo Longying Semiconductor Co., Ltd Chairman of Ningbo Xingmao Electronic Technology Co., Ltd Juristic-person director of Tai-Shing Electronics Components Corporation	None	None	None
President Kuo, Ya-Ping	Male	Republic of China	2009/08/01	BOSTON UNIVERSITY, MBA Executive Deputy General Manager and Deputy General Manager of Management Center of TXC Corporation President of TXC Corporation	-	None	None	None
TXC(NGB) President Chao, Min-Chiang	Male	Republic of China	2012/01/01	Ph.D., Naval Architecture & Ocean Engineering, National Taiwan University Engineer, Biomedical Engineering Center, ITRI President of TXC (NINGBO) CORPORATION	President of TXC (NINGBO) CORPORATION	None	None	None
TXC(CKG) President Chou, Chien-Fu	Male	Republic of China	2017/04/01	Master of National Taiwan of Science and Technology Vice President of TXC Corporation President of TXC (CHONGQING) CORPORATION	President of TXC (CHONGQING) CORPORATION Chairman ofChongqing All Suns Company Limited	None	None	None

						With spouse or	With spouse or	With spouse or
			Date of		Other Part Time Position with Other	second-class relative
Title / Name	Gender	Nationality		Major academic (professional)
			Apointmentt		Companies	Relationship manager

						Title	Name	Relation
Executive Vice President Yu, Fang-Ming	Male	Republic of China	2012/01/01	Department of Electronic Engineering, Oriental Insitute of Technology Executive Vice President of TXC (CHONGQING)CORPORATION	Executive Vice President of TXC (CHONGQING) CORPORATION	None	None	None
Vice President Lin, Shi-Bo	Male	Republic of China	2011/01/31	Master of Physics, UC, Riverside, USA Vice President of TXC Corporation	-	None	None	None
Vice President Chang, Chien-Tsung	Male	Republic of China	2012/01/01	City University of Macau, MBA Plant Manager, Taitien Electronics Co., Ltd. Vice President of TXC Corporation	Vice President of TXC (NINGBO) CORPORATION	None	None	None
Vice President Cheng, Li-Wei	Male	Republic of China	2018/01/01	Ph D., Materials Science and Engineering of National Tsing Hua University Vice President of TXC Corporation	-	None	None	None
Chief Technology Officer (CTO) / Vice President Chu,Chih-Hsun	Male	Republic of China	2017/12/18	Ph D., Materials Science and Engineering of National Tsing Hua University CTO of TXC Corporation	-	None	None	None
Vice President Kuo, Ya-Han	Female	Republic of China	2009/08/01	West Coast University, MBA Assistant Vice President of TXC Corporation Vice President of TXC Corporation	-	None	None	None
Vice President Su, Jing-Sheng	Male	Republic of China	2015/12/05	Master of Department of Electrical Engineering, National Tsing Hua University Vice President of TXC Corporation	-	None	None	None
Assistant Vice President Lin, Su-fen (Note 1)	Female	Republic of China	2010/07/01	Electrical Department of Kaohsiung Institute Vice President of TXC Corporation	-	None	None	None
Chief Engineer Chang, Qi-Zhong	Male	Republic of China	2006/04/01	Executive Master of Business Administration, EMBA National Chiao Tung University College of Management Chief Engineer of TXC Corporation	-	None	None	None
Assistant Vice President Su, Zhe-Ming	Male	Republic of China	2011/01/31	Department of Electrical Engineering, National Taiwan Ocean University Chief Engineer of TXC Corporation	-	None	None	None

						With spouse or	With spouse or	With spouse or
			Date of		Other Part Time Position with Other	second-class relative
Title / Name	Gender	Nationality		Major academic (professional)
			Apointmentt		Companies	Relationship manager

						Title	Name	Relation
Assistant Vice President Liu,Hsu-Er	Male	Republic of China	2015/06/01	Master of Department of Materials Science and Engineering, National Taiwan University Assistant Vice President of TXC Corporation	Assistant Vice President of TXC (NINGBO) CORPORATION	None	None	None
Deputy CTO Chiu,Chih-Hung	Male	Republic of China	2019/06/01	Master of Executive Master of Business Administration Vico CTO of TXC Corporation	-	None	None	None
Deputy CTO Pao,Shih-Yung	Male	Republic of China	2019/06/01	Ph.D of National Taiwan University Institute of Applied Mechanics Vico CTO of TXC Corporation	-	None	None	None
Assistant Vice President Huang, Hsiang-Lin	Male	Republic of China	2019/09/01	State University of New York at Albany, Master of Business Administration (MBA) Director and Assistant Vice President of TXC Corporation	-	None	None	None
Assistant Vice President Chen,Chiu-Lin (Note 2)	Male	Republic of China	2020/09/14	Master of Department of Industrial Engineering of National Tsing Hua University Assistant Vice President of TXC Corporation
Chief Financial Officer (CFO) / Vice President Hong, Guan-Wen (Note 1)	Female	Republic of China	2003/03/11	MBA, National Taipei University CFO of TXC Corporation	Supervisor of Win win precision technology	None	None	None
When the chairman of the board of directors and the general manager or equivalent (top manager) are the same person, spouses or relatives of each other, the reasons, rationality, necessity, future improvement measures and other relevant information shall be stated: The CEO of the company is responsible for the planning and implementation of the company's long-term business development strategy, the overall management of the group's business team and reporting to the board of directors, while the president is responsible for the planning and management of the daily operation of each plant area. The chairman of the board of directors of the company also serves as the CEO. The company is expected to plan and implement the company's long-term business development strategy in the direction of the concept of sustainable operation, and clearly divide the functions and powers of the chairman, the CEO and the president. In addition, the number of independent directors of the company is more than 4, and more than half of the directors are not employees or managers, so as to enhance the independence of the board of directors.

Note 1: Associate vice president Ms. Lin, Su-fen of supply chain center and Ms. Hong, Guan-Wen of financial division were promoted to vice president on July 13, 2020. Note 2: Mr. Chen, Chiu-Lin is appointed as the assistant vice president of the Administrator center on September 14, 2020.

III. Remuneration and Compensation Paid to Directors, and President and Vice President

(I) Remuneration Paid to Directors

December 31, 2020 Unit: Shares, NT$ 1,000

Title Name				Director’s Remuneration	Director’s Remuneration	Director’s Remuneration			Total Remuneration (A+B+C+D) as a % of	Total Remuneration (A+B+C+D) as a % of	Compensation E	Compensation E	Compensation E	arned bya	Director Who is an Employee	Director Who is an Employee	Director Who is an Employee	Director Who is an Employee	Total Compensation A+B+C+D+E+F+G)as a % of Net Income (Note 10)	Total Compensation A+B+C+D+E+F+G)as a % of Net Income (Note 10)	Compensation Paid to Directors from Non-Consolidated Affiliates (Note 11)
	Base Compensation(A) (Note 2)		Seve	rance Pay	Compensation to		Allowances (D)				Base Compensation, Bonuses and		Severan	ce Pay and	Compensation to Employees (G)
			and P	ensions (B)	Directors (C) (Note 3)		(Note 4)		Net Income (Note 10)		Allowances (E) (Note 5)		Pens	ions (F)		(Note 6)			of Net Incom
	From TXC	From All Consolidated Entities (Note 7)	From TXC	From All Consolidated Entities (Note 7)	From TXC	From All Consolidated Entities (Note 7)	From TXC	From All Consolidated Entities (Note 7)	From TXC	From All Consolidated Entities (Note 7)	From TXC	From All Consolidated Entities (Note 7)	From TXC	From All Consolidated Entities (Note 7)	From	TXC	From All Consolidated Entities		From	From All Consolidated Entities (Note 7)
															Cash	Stock	(Note 7) Cash Stock		TXC

Chairman and CEO Lin,Wan-Shing	0	0	0	0	17,648	17,648	855	855	1.2946	1.2946	11,387	26,025	1,164	1,164	9,212	0	9,212	0	2.8172	3.8413	3,786
Director Lin,Jin-Bao
Director and DeputyCEO Chen Chueh Shang-Hsin
Director Kuo,Ya-Ping
Director Huang, Hsiang-Lin
Director Hsu,Hsing-Hao
Director TLC Capital Co.,LTD
Representative: Peng, Chih-Chiang
Independent Director Yu, Shang-Wu	0	0	0	0	9 ,600	9,600	980	980	0.7402	0.7402	0	0	0	0	0	0	0	0	0.7402	0.7402	0
Independent Director Tsai,Song-Qi
Independent Director Su,Yan-Syue
Independent Director Wang, Chuan -Fen

Title Name	Director’s Remuneration	Director’s Remuneration	Director’s Remuneration	Director’s Remuneration	Director’s Remuneration	Director’s Remuneration	Director’s Remuneration	Director’s Remuneration	Total Remuneration (A+B+C+D) as a % of	Total Remuneration (A+B+C+D) as a % of	Compensation Earned bya Director Who is an Employee	Compensation Earned bya Director Who is an Employee	Compensation Earned bya Director Who is an Employee	Compensation Earned bya Director Who is an Employee	Compensation Earned bya Director Who is an Employee	Compensation Earned bya Director Who is an Employee	Total Compensation A+B+C+D+E+F+G)as a % of Net Income (Note 10)	Total Compensation A+B+C+D+E+F+G)as a % of Net Income (Note 10)
	Base Compensation(A) (Note 2)		Severance Pay		Compensation to		Allowances (D)				Base Compensation, Bonuses and		Severance Pay and		Compensation to Employees (G)
			and Pensions (B)		Directors (C) (Note 3)		(Note 4)		Net Income (Note 10)		Allowances (E) (Note 5)		Pensions (F)		(Note 6)
	From TXC	From All Consolidated Entities (Note 7)	From TXC	From All Consolidated Entities (Note 7)	From TXC	From All Consolidated Entities (Note 7)	From TXC	From All Consolidated Entities (Note 7)	From TXC	From All Consolidated Entities (Note 7)	From TXC	From All Consolidated Entities (Note 7)	From TXC	From All Consolidated Entities (Note 7)	From TXC	From All Consolidated Entities	From	From All Consolidated Entities (Note 7)
															Cash Stock	(Note 7) Cash Stock	TXC

1. Please describe the policy, system, standards and structure of independent directors' remuneration, as well as the connection between the amount of remuneration paid and director’s responsibilities, risks, time investment and other factors: the remuneration of the directors of the Company is determined by the board of directors in accordance with the Articles of Incorporation, issued based on the director's participation in the Company's operations and contribution, with reference to both domestic and foreign market standards. If the Company has a profit, the board of directors will determine the amount of directors' remuneration in accordance with the Company's Articles of Incorporation. Independent directors are ex-officio members of the audit committee. In addition to the general remuneration paid to directors, the Company takes into account of each director’s individual responsibilities, risks and investment time, and also determines different reasonable remunerations. 2. In addition to the information disclosed in the table above, has any Director provided services to TXC Corporation and its subsidiaries and received compensation for such services (e.g. serving as a consultant that is not an employee): None.

Table of Remuneration Scale


	Director Names


Remuneration Paid to Directors	Total Remuneration (A+B+C+D)		Total Compensation	(A+B+C+D+E+F+G)

		From All Consolidated Entities		From All Consolidated Entities
	From TXC (Note 8)		From TXC (Note 8)
		(Note 9)H		(Note 9)I

Less than NT$1,000,000	Peng, Chih-Chiang	Peng, Chih-Chiang	Peng, Chih-Chiang	Peng, Chih-Chiang
NT$1,000,000 –NT$1,999,999
NT$2,000,000 –NT$3,499,999	Lin, Wan-Shing, Lin, Jin-Bao, Chen Chueh Shang-Hsin, Kuo, Ya-Ping, Huang, Hsiang-Lin, Hsu, Hsing-Hao, Yu, Shang-Wu, Tsai, Song-Qi, Su, Yan-Syue, Wang ,Chuan –Fen TLC Capital Co.,LTD	Lin, Wan-Shing, Lin, Jin-Bao, Chen Chueh Shang-Hsin, Kuo, Ya-Ping, Huang, Hsiang-Lin, Hsu, Hsing-Hao, Yu, Shang-Wu, Tsai, Song-Qi, Su, Yan-Syue, Wang ,Chuan –Fen TLC Capital Co.,LTD	Hsu, Hsing-Hao, Shang-Wu, Tsai, Song-Qi, Su, Yan-Syue, Wang ,Chuan-Fen TLC Capital Co., LTD	Hsu, Hsing-Hao, Shang-Wu, Tsai, Song-Qi, Su, Yan-Syue, Wang ,Chuan-Fen TLC Capital Co., LTD
NT$3,500,000 –NT$4,999,999			Lin, Jin-Bao,
NT$5,000,000 - NT$9,999,999			Lin, Wan-Shing, Chen Chueh Shang-Hsin, Kuo, Ya-Ping , Huang, Hsiang-Lin	Lin, Jin-Bao, Huang, Hsiang-Lin
NT$10,000,000 - NT$14,999,999				Lin ,Wan-Shing, Chen Chueh Shang-Hsin Kuo,Ya-Ping
NT$15,000,000 - NT$29,999,999
NT$30,000,000 - NT$49,999,999
NT$50,000,000 - NT$99,999,999
NT$100,000,000 and above
Total	12 persons (included 1 corporate directors)	12 persons (included 1 corporate directors)	12 persons (included 1 corporate directors)	12 persons (included 1 corporate directors)

Note 1: Director names shall be listed separately (the shareholder name and representative shall be listed separately for corporate directors) and each payment amount shall be disclosed as a summary. If directors concurrently serve as president and vice presidents, list in this Table and Tables (3-1) or (3-2) below.
Note 2: 2020 director remuneration (includes director salary, allowances, severance pay, various bonuses and incentives).
Note 3: 2021 compensation to directors passed by the Board of Directors in 2020.
Note 4: Related 2020 director allowances (including travel expenses, special expenses, all kinds of allowances, accomodations, substantive objects offered in the form of vehicles and etc.). If real estate, cars and other transportation or exclusive personal expenses are offered, the asset category and cost, actual rent or rent calculated at fair market value, fuel expenses and other payments shall be disclosed. If a driver is assigned, attach an explanation of the driver’s related compensation but do not include the compensation into the remuneration.
Note 5: 2020 directors who concurrently hold positions in the company (including the president and vice presidents, other managers and employees) receive remunerations including salary, duty differential pay, severance pay, all kinds of bonuses, incentive pays, accomodations, and substantive objects offered in the form of vehicles. If real estate, cars and other transportation or exclusive personal expenses are offered, the asset category and cost, actual rent or rent calculated at fair market value, fuel expenses and other payments shall be disclosed. If a driver is assigned, attach an explanation of the driver’s related compensation but do not include the compensation into the remuneration.
Note 6: 2020 directors concurrently hold positions in the Company (including the president and vice presidents, other managers and employees) who receive employee bonuses (including stock and cash) shall disclose the 2020 employee compensation amounts passed and distributed by the 2021 Board of Directors meeting. If estimation is not possible, calculate this year’s proposed distribution amounts based on the actual percentages distributed for the previous year and list in Table 1-3.
Note 7: The total of all compensation items from all consolidated entities (including the Company) paid to Company directors shall be disclosed.
Note 8: The total of each of the remuneration items paid by the Company to each director are disclosed under the corresponding director name in the scale.
Note 9: The total of each of the remunderation items paid by all consolidated entities to Company directors shall be disclosed under the corresponding director name in the scale.
Note 10: Net Income refers to 2020 net income: Those who have adopted IFRS, net income refers to the net income in individual or separate financial reports for the most recent year.
Note 11: a. This column shall clearly list the related remuneration amounts from reinvested companies other than subsidiaries.
b. If Company directors receive remuneration from reinvested companies other than subsidiaries, the remuneration received by Company directors from reinvested companies other than subsidiaries is included in the Remuneration Scale column and the column is renamed All Reinvested Entities.
c. Compensation and remuneration refers to the compensation and remuneration (employee, director and supervisor remuneration), business execution expenses and other related remuneration received by Company directors as directors, supervisors and managers of reinvested entities other than subsidiaries.

(II) Compensation Paid to President and Vice Presidents

								December 31,2020 Unit: Thousand Shares,NT$1,000	December 31,2020 Unit: Thousand Shares,NT$1,000	December 31,2020 Unit: Thousand Shares,NT$1,000	December 31,2020 Unit: Thousand Shares,NT$1,000	December 31,2020 Unit: Thousand Shares,NT$1,000	December 31,2020 Unit: Thousand Shares,NT$1,000	December 31,2020 Unit: Thousand Shares,NT$1,000
Title	Name	Base Compensation (A) (Note 2)				Bonuses and Allowances						Total Compensation as a % of Net Income (A+B+C+D) (Note 8`）`		Compensation Paid to Directors from Non-Consolidated Affiliates (Note 9)
				Severance Pay and		(C)		Employee Compensation (D)
				Pensions (B)		(Note 3)		(Note 4)
		From TXC	From All
					From All		From All	From TXC		From All Consolidated Entities			From All
			Consolidated	From	Consolidated	From	Consolidated			Nt 5		From	Consolidated
			Entities	TXC	Entities	TXC	Entities			(oe)		TXC	Entities

			(Note 5)		(Note 5)		(Note 5)	Cash	Stock	Cash	Stock		(Note 5)

Chairman &CEO	Lin, Wan-Shing	21,399	31,811	2,521	2,521	9,992	27,257	27,022	0	27,022	0	4.2633	6.1997	3,516
Deputy CEO	Chen Chueh Shang-Hsin
President	Kuo, Ya-Ping
TXC(NGB) President	Chao, Min-Chiang
TXC(CKG) President	Chou, Chien-Fu
Executive Vice President	Yu, Fang-Ming
Vice President	Lin, Shi-Bo
Vice President	Chang, chien-Tsung
Vice President	Cheng, Li-Wei
Chief Technology Officer (CTO) / Vice President	Chu,Chih-Hsun
Vice President	Kuo,Ya Han
Vice President	Su, Jing-Sheng

Title	Name	Base Compensation (A) (Note 2)	Base Compensation (A) (Note 2)			Bonuses and Allowances	Bonuses and Allowances					Total Compensation as a % of Net Income (A+B+C+D) (Note 8`）`	Total Compensation as a % of Net Income (A+B+C+D) (Note 8`）`
				Severance Pay and		(C)		Employee Compensation (D)
				Pensions (B)		(Note 3)		(Note 4)
		From TXC	From All		From All		From All	From TXC		From All Consolidated Entities			From All
			Consolidated	From	Consolidated	From	Consolidated			Nt 5		From	Consolidated
			Entities (Note 5)	TXC	Entities (Note 5)	TXC	Entities (Note 5)			(oe)		TXC	Entities (Note 5)
								Cash
									Stock	Cash	Stock

Vice President	Lin, Su-fen
Chief Financial Officer (CFO) / Vice President	Hong, Guan-Wen

＊ Regardless of the position, those positions equivalent to President and Vice President (i.e.: President, CEO and Director) have all been disclosed.

Compensation Scale


Compensation Paid to	Names of Senior Executives
Senior Executives	The Company(Note 6)	The Company in the financial report`（`Note 7`）`(E)

Less than NT$1,000,000
NT$1,000,000 –NT$1,999,999
NT$2,000,000 –NT$3,499,999	Chou, Chien-Fu, Yu,Fang-Ming, Chang,Chien-Tsung
NT$3,500,000 –NT$4,999,999	Lin, Wan-Shin, Chen Chueh Shang-Hsin, Chao,Min-Chiang, Lin, Shi-Bo, Chu,Chih-Hsun,Lin, Su-fen, Hong, Guan-Wen	Chu,Chih-Hsun, Lin, Shi-Bo, Chang,Chien-Tsung
NT$5,000,000 - NT$9,999,999	Kuo, Ya-Ping, Kuo,Ya Han, Cheng, Li-Wei, Su, Jing-Sheng	Lin, Wan-Shin, Kuo, Ya-Ping, Chao,Min-Chiang, Chou, Chien-Fu,, Yu,Fang-Ming, Kuo,Ya Han, Su, Jing-Sheng, Cheng, Li-Wei,Lin, Su-fen, Hong,Guan-Wen
NT$10,000,000 - NT$14,999,999		Chen Chueh Shang-Hsin,
NT$15,000,000 - NT$29,999,999
NT$30,000,000 - NT$49,999,999
NT$50,000,000 - NT$99,999,999
NT$100,000,000 and above
Total	14persons	14persons

Note 1: The names of president and vice general presidents shall be listed separately (the shareholder name and representative shall be listed separately for corporate directors) and each payment amount shall be disclosed as a summary. If there are directors that concurrently serve as a president and vice general presidents, list in this Table and Tables (1-1) or (1-2) below.
Note 2: Lists 2020 salary, allowances and severance pay for the general and vice general managers.
Note 3: Lists 2020 president and vice general presidents bonuses, incentives, travel expenses, special expenses, all kinds of allowances, accomodations, substantive objects offered in the form of vehicles and other remuneration). If real estate, cars and other transportation or exclusive personal expenses are offered, the asset category and cost, actual rent or rent calculated at fair market value, fuel expenses and other payments shall be disclosed. If a driver is assigned, attach an explanation of the driver’s related compensation but do not include the compensation into the remuneration
Note 4: 2020 directors concurrently hold positions in the Company (including the president and vice general presidents, other managers and employees) who receive employee bonuses (including stock and cash) shall disclose the 2020 general manager and vice general manager employee compensation amounts passed and distributed by the 2021 Board of Directors meeting. If estimation is not possible, calculate this year’s proposed distribution amounts based on the actual percentages distributed for the previous year and list in Table 1-3. Net Income refers to the most recent year’s net income: Those who have adopted IFRS, net income refers to the net income in individual or separate financial reports for the most recent year.
Note 5: The total of all compensation items from all consolidated entities (including the Company) paid to Company president and vice general presidents shall be disclosed.
Note 6: The total of each of the remuneration items paid by the Company to each general and vice general manager shall be disclosed under the corresponding general manager and vice general manager names in the scale.
Note 7: The total of each of the remuneration items paid by all consolidated entities (including the Company) to each general and vice general manager shall be disclosed under the corresponding president and vice general presidents’ name is the scale.
Note 8: Net Income refers to 2020 net income: Those who have adopted IFRS, net income refer to the net income in individual or separate financial reports for the most recent year.
Note 9: a. This column shall clearly list the related remuneration amounts from reinvested companies other than subsidiaries.
b. If Company general and vice general managers receive remuneration from reinvested companies other than subsidiaries, the remuneration received by Company directors from reinvested companies other than subsidiaries is included in Remuneration Scale Column E and the column is renamed All Reinvested Entities.
c. Remuneration refers to the compensation and remuneration (employee, director and supervisor remuneration), business execution expenses and other related remuneration received by Company general and vice general managers serving as directors, supervisors and managers of reinvested entities other than subsidiaries.
＊ There are differences in the income concept in the remuneration information disclosed in this Table and income tax laws so this Table is used for information disclosure and not taxation purposes.
＊ Regardless of the position, those positions equivalent to President and Vice President (i.e.: President, CEO and Director) have all been disclosed.

(III) Profit Sharing Distributed to Managers (Proposed 2020 Employee Profit Sharing Amounts)

December 31, 2020 Unit: Thousand Shares, NT$ 1,000


						% of
	Title	Name	Stock	Cash	Total
						Net Income


Managers	Chairman and CEO	Lin, Wan-Shing	0	35,968	35,968	2.5165
	Deputy CEO	Chen Chueh Shang-Hsin
	President	Kuo, Ya-Ping
	TXC (NGB) President	Chao, Min-Chiang
	TXC (CKG) President	Chou, Chien-Fu
	Executive Vice President	Yu, Fang-Ming
	Vice President	Lin, Shi-Bo
	Vice President	Chang, Chien-Tsung
	Vice President	Cheng, Li-Wei
	Chief Technology Officer (CTO) / Vice President	Chu, Chih-Hsun
	Vice President	Kuo, Ya-Han
	Vice President	Su, Jing-Sheng
	Vice President	Lin, Su-fen
	Chief Engineer	Chang, Qi-Zhong
	Assistant Vice President	Su, Zhe-Ming
	Assistant Vice President	Liu, Hsu-Er
	Deputy CTO	Chiu,Chih-Hung
	Deputy CTO	Pao,Shih-Yung
	Assistant Vice President	Huang, Hsiang-Lin
	Assistant Vice President	Chen,Chiu-Lin
	Chief Financial Officer (CFO) / Vice President	Hong, Guan -Wen

Note 1: Name and title of individuals shall be disclosed but earning distribution shall be disclosed in summarized form.

Note 2: Employee remuneration amounts (including stocks and cash) for managers passed by the 2021 Board of Directors meeting. If estimation is not possible, calculate this year’s proposed distribution amounts based on the actual percentages distributed for the previous year. Net Income refers to 2020 net income: Those who have adopted IFRS, net income refers to the net income in individual or separate financial reports for the most recent year.

Note 3: The scope of application for managers is determined according to the rules set down in the March 27, 2003 Tai-tsai-cheng-san no. 0920001301 letters. The scope is as follows:

(1) President and equivalent level personnel

(2) Vice president and equivalent level personnel

(3) Assistant vice president and equivalent level personnel
(4) Financial department supervisor
(5) Accounting department supervisor
(6) Other persons handling company management affairs and with signature authority.

Note 4: If directors, presidents and vice presidents receive employee compensation (including stocks and cash), the compensation shall be listed in Table 1-2 and additionally in this Table.

Note 5: Remuneration by the Company to individual directors shall be disclosed under the following circumstances:
1. Remuneration to individual directors shall be disclosed if there have been consecutive after-tax losses for the previous three year: Not applicable.
2. Remuneration to individual directors shall be disclosed in the event of insufficient director shareholdings for three consecutive months in the most recent year: Not applicable
3. If there are directors with an average pledged share ratio of over 50% for any three months in the most recent years, the individual director(s) with the average pledged share ratio exceeeding 50% for each of these months shall be disclosed: Not applicable.
4. If all Directors receive the directors' remuneration of all companies in the financial report accounting for more than 2% of the after tax net profit, and individual directors receive the remuneration of more than NT$15 million: None.
5. Where the results of the corporate governance evaluation of a listed or OTC company in the most recent year are at the last level, or where the trading method has been changed, the trading has been stopped, or the listed and OTC company has been terminated in the most recent year and up to the date of printing the annual report, or where the approval of the corporate governance evaluation committee indicates that the company should not be evaluated: None.
6. This restriction shall not apply to full-time employees of a listed or OTC company whose average annual salary for the most recent year is less than NT$500,000: None.
(IV) Individually compare and explain the analysis of the remuneration paid to Company directors, president and vice presidents as a percentage of net income by the Company and all consolidated entities over the past two years and explain the remuneration payment policy, standard and mix, procedure for setting remuneration and operation performance and future risk correlation.
1. Remuneration Paid to Company Directors, President and Vice Presidents as a Percentage of Net Income by the Company over the Past Two Years

Unit: %

Title		Remuneration as Percentage of Net	Remuneration as Percentage of Net	Income
		2020		2019
	From TXC	From All Consolidated Entities	From TXC	From All Consolidated Entities
Director	3.56	4.58	3.92	4.61
President and Vice President	4.26	6.20	5.07	6.72

Note 1 2020 director and president and vice president remuneration amounts are passed and distributed by the 2021 Board of Directors meeeting so the remuneration at percentage of net income calculations in this column are temporary estimates.

Company director remuneration is determined based on the Company’s Articles of Incorporation. Fair remuneration is provided by considering Company operation results and contributions towards company performance. Peesident and vice presidents remuneration payment policy is based on the Company’s Salary Management Rules and salary levels for that job position in the industry market, the scope of authority of that job

position inside the Company and degree of contribution toward operation targets. The procedure for setting remuneration follows evaluation and review procedures in the Company’s Director and Manager Performance Evaluation Rules. In addition to referring to the Company’s overall operational performance, future industry risks and development trends, individual performance achievement rates and contribution towards company performance is considered in order to provide fair compensation. The fairness of related performance evaluations and remuneration are reviewed by the salary and compensation committee and Board of Directors. The remuneration system is discussed at appropriate times based on actual operating conditions and with respect to related laws to achieve a balance between sustainable company operation and risk control.

IV. Implementation of Corporate Governance

(I) Operation of the Board of Directors

In 2020, the Board of Directors had held 6 meetings (A), the attendance of which as as follows:

				December 31, 2020	December 31, 2020
Title	Name	Actual number of attendees (B)	Number of proxy attendees	Actual rate of attendance (%) [B/A]	Remarks
Chairman	Lin, Wan-Shing	6	0	100
Director	Lin, Jin-Bao	6	0	100
Director	Chen Chueh, Shang-Hsin	6	0	100
Director	Kuo, Ya-Ping	6	0	100
Director	Huang, Hsiang-Lin	6	0	100
Director	Hsu, Hsing-Hao		0	100
Director	TLC Capital Co., LTD (Peng,hih-Chiang)	6	0	100
Independent Director	Yu, Shang-Wu	6	0	100
Independent Director	Tsai, Song-Qi	5	1	83
Independent Director	Su, Yan-Syue	6	0	100
Independent Director	Wang, Chuan -Fen	5	1	83

Other items to be recorded:

The date, session, agenda, opinions of all independent directors and the Company’s means of processing the opinions of independent directors shall be specified if one of the following circumstances occurred in the operation of the board of directors:
(1) Matters listed under Article 14-3 of the Securities and Exchange Act: Not applicable, since the Company has established an audit committee; matters listed under Article 14-5 of the Securities and Exchange Act shall be applicable instead;
(2) Other board resolutions recorded and stated in writing with opposing or reserved opinions from independent directors other than those mentioned above: None; there was no opposing or reserved opinions of the period from the independent directors.
Directors' implementation on the avoidance of interest-related motions: (1) Date: 2020/03/23

Agenda: Removal of Directors’ Competition Prohibition

Directors avoiding conflicts of interest: Director Peng, Chih-Chiang, Director Tsai, Song-Qi, Director Su, Yan-Syue

Reasons for the avoidance of conflict of interests and participation in voting: Whereas Director Peng, Chih-Chiang, Director Tsai, Song-Qi, Director Su, Yan-Syue are the parties to the agenda, the parties in question shall avoid conflict of interests by not participating in the discussion and voting pursuant to Item 2, Article 206 of the Company Act.

Resolutions of the Board of Directors: Except for the above-mentioned directors who avoided conflict of interests, the remaining directors have passed the motions without objection.

(2) Date: 2020/03/23

Agenda: The company's reinvestment in ○○ company shares

Directors avoiding conflicts of interest: Chairman Lin, Wan-Shing, Director Lin, Jin-Bao, Director Chen Chueh, Shang-Hsin

Reasons for the avoidance of conflict of interests and participation in voting: Whereas Chairman Lin, Wan-Shing, Director Lin, Jin-Bao, Director Chen Chueh, Shang-Hsin are the Company’s managers, the parties in question shall avoid conflict of interests by not participating in the discussion and voting pursuant to Item 2, Article 206 of the Company Act. Chairman LIN had appointed Independent Director Yu, Shang-Wu to preside in the discussion and voting on behalf of the Chairman.

Resolutions of the Board of Directors: Except for the above-mentioned directors who avoided conflict of interests, the remaining directors have passed the motions without objection.

(3) Date: 2020/08/10

Agenda: Review the 2019 annual payment of employee compensation and directors’ remuneration. Directors avoiding conflicts of interest: Chairman Lin, Wan-Shing, President Kuo, Ya-Ping, Director Chen Chueh, Shang-Hsin, Huang, Hsiang-Lin

Reasons for the avoidance of conflict of interests and participation in voting: Whereas Chairman Lin, Wan-Shing, President Kuo, Ya-Ping, Director Chen Chueh, Shang-Hsin, Huang, Hsiang-Lin are the Company’s managers, the parties in question shall avoid conflict of interests by not participating in the discussion and voting pursuant to Item 2, Article 206 of the Company Act. Chairman LIN had appointed Independent Director Yu, Shang-Wu to preside in the discussion and voting on behalf of the Chairman.

Resolutions of the Board of Directors: Except for the above-mentioned directors who avoided conflict of interests, the remaining directors have passed the motions without objection.

(4) Date: 2020/12/29

Agenda: 2020 performance bonus amount

Directors avoiding conflicts of interest: Chairman Lin, Wan-Shing, President Kuo, Ya-Ping, Director Chen Chueh, Shang-Hsin, Huang, Hsiang-Lin

Resolutions of the Board of Directors: Except for the above-mentioned directors who avoided conflict of interests, the remaining directors have passed the motions without objection.

The interval and period of self-assessment (or peer assessment) made by the Board of Directors of the Company, the assessment scope, method, and content, and the implementation:

Interval	Period	Scope	Method	Content
Annually	January 2020to December 2020	Board of Directors, individual members, and functional Committees	Interal self-assessment	The performance of the Board of Directors and its individual members includes five major aspects: the degree of participation in the Company's operations, the decision-making quality of the Board of Directors, the composition and structure of the Board of Directors, selection and appointment of directors and continuous education and internal control. The performance assessment of the Functional Committees and its individual members includes five major aspects: the degree of participation in the Company's operations, the awareness of duties of theFunctional Committees, the decision-making quality of the Functional Committees, the composition and election of the Functional Committees,and internal control.
Every three years	January 2019 to December 2019	Board of Directors	External professional organizations	With regard to the professional functions of the board of directors, decision-making efficiency, internal control, and corporate social responsibility, as well as 22 indicators, the effectiveness of the board of directors was evaluated by questionnaires and on-site visits.

The goals of the year and the most recent year on the strengthening of the board of directors’ functions (such as establishing an audit committee, improving information transparency, etc.) and performance evaluation:
(1) The Company’s first Audit Committee was duly established on June 19, 2013 consisted by 3 independent directors and convenes meeting at least once every quarter. It is responsible for reviewing the proper presentation of the Company’s financial statements, the selection (dismissal), independence and performance of the Certified Public Accountant, and the effective implementation of the Company’s internal control, the Company’s compliance with relevant laws and regulations and the Company’s control over existing or potential risks. The shareholders’ meeting re-elected in 2016 and in 2019 to increase 1 independent director for the purpose of strengthening corporate governance; there are currently 4 independent directors

in the Audit Committee. Since the date the Audit Committee was established, the Audit Committee has invited Certified Public Accountant and related personnel to attend each meeting and participate in the discussion. The communication meetings were convened as-needed. Please see the Company’s website for the communication records: investors relations / corporate governance / the Board of Directors / independent directors’ information. The second the Audit Committee has convened 6 meetings in 2020 and all carried out successfully.

(2) The Company’s first Remuneration Committee was duly established on December 28, 2011 along with its charter. he second Remuneration Committee was appointed upon the resolution of the Board of Directors on July 10, 2013 to be responsible for formulating and periodically reviewing the performance assessment and remuneration policies, system, standards and structure for the directors and managers, regularly evaluating and setting the remuneration of the directors and managers, as well as completing annual assessment before the first quarter of the following year pursuant to the Company’s “Performance Assessment Method for the Directors and Managers”. The third and the fourth Remuneration Committee were appointed upon the resolution of the Board of Directors which consisted by 4 independent directors. The 2020 annual asssessment was completed on March 11, 2021 and reported to the Remuneration Committee and the Board of Directors. All related personnel have attended and participated in the discussion during the Remuneration Committee’s meetings. There were 5 meetings in 2020 and all carried out successfully.
(3) The Company continued to strengthen its corporate governance. where the “CG6005 general version of corporate governance assessment and authentication” and the “CG6008 advanced corporate governance assessment and authentication” were certified by the Corporate Governance Association in in March 2012 and May 2013, respectively, and the minutes of the Board of Directors, the Audit Committee and the Remuneration Committee and the rules and regulations of the Company are all posted on the Company's website. The Company has always adhered to the principle of information transparency, actively safeguards interests of the shareholders, and discloses important resolutions on Market Observation Post System and the Company’s website upon resolutions of the Board of Directors, which had earned it four consecutive years of A++ in Information Disclosure and Transparency Ranking and has awarded the top 6% ~ 20% of the listed companies since the first session. From the 2[nd] to the 4[th] session, it has been won the top 5% of the listed companies for three consecutive years. The 5-6[th] session was awarded the top 6% ~ 20% of listed companies.

(II) Operation of the Audit Committee

Operations of the Audit Committee
The Company’s first Audit Committee was duly established on June 19, 2013 consisted by 3 independent directors and elected the independent director, YU, SHANG-WU, to serve as the convener. The shareholders’ meeting re-elected in 2016 and in 2019 to increase 1 independent director for the purpose of strengthening corporate governance; therefore, there are currently 4 independent directors in the Audit Committee convening meeting at least once every quarter. It is responsible for reviewing the proper presentation of the Company’s financial statements, the selection (dismissal), independence and performance of the Certified Public Accountant, the effective implementation of the Company’s internal control, the Company’s compliance with relevant laws and regulations and the Company’s control over existing or potential risks. Its primary authorities are as follows:
(1) To establish or modify the internal control system as prescribed in Article 14 of the Securities and Exchange Act;
(2) To evaluate the effectiveness of the internal control system;
(3) To establish or modify the procedures for material financial business behaviors such as acquiring or disposing assets, engaging in derivative commodity transactions, lending capital to others, endorsing or providing guarantees for others as prescribed in Article 36-1 of the Securities and Exchange Act;
(4) Matters concerning the directors’ personal interests;
(5) Material assets or derivative commodities transactions;
(6) Material capital lending, endorsement or provision of guarantees;
(7) Offering, issuance or private placement of equity securities;
(8) Appointment, dismissal or remuneration of Certified Public Accountant;
(9) Appointment or dismissal of chief financial officer, chief accounting officer or chief audit executive;
(10) Annual financial statements and semi-annual financial statements; and
(11) Other matters required by the Company or the competent authority.

In 2020, the Audit Committee had held 6 meetings (A), the attendance of which as as follows:

In 2020, the Audit Committee had held6 meetings (A), the attendance of which as as follows:	In 2020, the Audit Committee had held6 meetings (A), the attendance of which as as follows:	In 2020, the Audit Committee had held6 meetings (A), the attendance of which as as follows:	In 2020, the Audit Committee had held6 meetings (A), the attendance of which as as follows:	In 2020, the Audit Committee had held6 meetings (A), the attendance of which as as follows:	In 2020, the Audit Committee had held6 meetings (A), the attendance of which as as follows:

Job title	Name	Actual number of attendees (B)	Number of proxyattendees	Actual rate of attendance (%) [B/A]	Remark
Independent Director	Yu, Shang-Wu	6	0	100
Independent Director	Tsai, Song-Qi	5	1	83
Independent Director	Su, Yan-Syue	6	0	100
Independent Director	Wang, Chuan -Fen	5	1	83

Other items to be recorded:

The date, session, agenda, resolution of the Audit Committee and the Company’s means of processing the opinions of the Audit Committee shall be specified if one of the following circumstances occurred in the operation of the Audit Committee:

(1) Matters listed under Article 14-5 of the Securities and Exchange Act:

Meeting date (session)	Agenda	Resolutions and opinion of all members
2020/03/23 (4thmeeting of the third session)	1. Undertaking of derivative financial commodities 2. 2019 business report and financial statements 3. 2019 Profit Distribution Proposal 4. Review on the independence and performance appraisal of the accountant 5. Internal audit report 6. Annual internal control self-inspection reports, Statement on Internal Controls and auditing reports 7. Capacityexpansionplan	Approved by all independent director; it was sent to the board of directors for resolution without any approval by the audit committee and more than two-thirds of all directors.
2020/05/07 (5thmeeting of the third session)	1. Undertaking of bank credit extensions and derivative financial commodities 2. Q1 / 2020 financial statements 3. Internal audit report
2020/07/13 (6thmeeting of the third session)	1. Appointment of internal audit supervisor 2. Capacity expansion plan
2020/08/10 (7thmeeting of the third session)	1. Undertaking of bank credit extensions and derivative financial commodities 2. Q2 / 2020 financial statements 3. SubsidiaryChongqing All Suns Company Limitedproject change and progress report 4. Internal audit report
2020/11/09 (8thmeeting of the third session)	1. Undertaking of bank credit extensions and derivative financial commodities 2. Q3 / 2020 financial statements 3. 2020 Annual Budget Revision 4. Capacity expansion plan 5. Advanced technology process development plan 6. Internal audit report
2020/12/29 (9thmeeting of the third session)	1. 2021 annual business plan and annual budget 2. 2021 annual review on the accountant fees 3. Revision of the "Accountant Evaluation and Performance Appraisal Measures" 4. TXC’s subsidiary TXC (NINGBO) CORPORATION plans to establish a 100% subsidiary 5. Internal audit report 6. 2021 annual auditplan

(2) Except for the foregoing, other matters that were not approved by the Audit Committee but were approved by more than two-thirds of all directors: None.

Implementation of the independent directors’ avoidance of motion with conflict of interests (please specify the independent director’s name, content of the motion, reasons for the avoidance of conflict of interests, and participation in voting): None.

Communication between the independent directors and chief audit executive and accountant (include major topics, methods and results relating to the Company’s financial and business status that shall be communicated) ：
(1) There are channels of direct contact between the independent directors and chief audit executive and the Certified Public Accountant and the communication condition is good;
(2) The Company convenes the Audit Committee meeting on regular basis, which will invite accountant, chief auditing executive to attend and invite related supervisors to attend if necessary.
(3) The chief audit executive submits aggregated auditing report to the Audit Committee on monthly basis according to the annual audit plan.
(4) Evaluate the performance and independence of the accountant annually and submit to the Audit Committee for review. The 2020 annual evaluation on the accountant’s performance and independence was approved by the Audit Committee on March 11, 2021 and submitted to the Board of Directors. Please visit the Company’s website for the assessment results.
(5) The company's independent directors, internal audits and accountants have communication meetings at least twice a year. If there is a major abnormality, they may hold meetings at any time. For the record of their communication, please refer to the company's website\investor relations\corporate governance\board of directors\independent directors’ information.
Annual key functions and operations:
(1) Annual Key functions
- a. Communicate results of audit report with the head of internal audit regularly according to the annual audit plan.
- b. Communicate with CPA regularly over financial statement review or audit results in each quarter.
- c. Review financial reports.
- d. Asessment of the effectiveness of internal control system.
- e. Review the hiring, dismissal, compensation and service matters concerning CPAs in advance.
- f. Evaluate the independence of the CPA who provide audit and non-audit services.
- g. Review the Company's operational procedures and material transactions of assets, derivatives, capital lending and endorsement/guarantees.
- h. Legal compliance.
- i. Handle any grievances/reporting incidents submitted to the Audit Committee Mailbox
(2) 2020 operations: Proposals of the Audit Committee meetings have all been reviewed or approved by members of the Audit Committee with no dissent from any of the Independent Directors.

(III) Corporate governance and variations with management principles of publicly-listed companies and reasons

				Discrepancy with
			Operation Status (Note 1)
				best-practice principles
Assessment Items
	Yes	No	Summary	of TWSE/GTSM listed
				companies

1. Comply with General Guideline of publicly-listed companies and disclose company’s practical guideline in corporate governance?	Yes		TXC has formulated the Practical Guideline for Corporate Governance, and set up effective regulations governing corporate governance framework, protection of the rights and benefits of shareholders, strengthening the function of the board of directors, bringing up the function of the Auditing Committee, showing respect for the rights and benefits of the stakeholder, and enhancing the transparency of information. For details refer to the companywebsite	Comply with best-practice principles, no discrepancy
2. Company shareholding Structure and shareholders’ rights
`（`1）Has the Company formulated internal operating procedures for handling proposals, doubts, disputes and litigation of shareholders and follow procedures for implementation.	Yes		TXC has formulated procedures for handling proposals, doubts, disputes and litigation for protection of communication between the stakeholders and the company management, and timely find out and handle the various problems, as well as having dedicated persons for handling relevant matters. TXC also handles proposals and rights and benefits of relevant shareholders for subsidiaries. For details refer to the companywebsite	Comply with best-practice principles, no discrepancy
`（`2`）`Has the Company the list of the major shareholders with de fact control of the Company and the final controllers of the major shareholders?	Yes		In accordance with Article 25 of the Securities Trading Act, requires monthly posting of changes in shareholding of the internal staff including directors, managers and shareholders with over 10% equities, on the open information observation website specified by the Securities and Futures Bureau.	Comply with best-practice principles, no discrepancy
`（`3`）`Has the Company set up a firewall mechanism for executing risk control of affiliated enterprises?	Yes		Aside from formulation of various risk control mechanisms, the Company also has formulated relevant operation methods for the operation, business and finance with the affiliated enterprises. For instance, in the subsidiary operation method TXC has formulated decision making and approval for the subsidiaries, the management of trading by the associates, specific companies, associates and group trading operation procedures, aside from counseling internal control for the subsidiaries in writing. Moreover, similar to that of the parent company, the acquisition or disposal of assets handling procedures, endorsement method, operation method for loaning to other persons, handling procedures for trading of derivative financial commodities so as to implement the risk control mechanism for subsidiaries. Subsidiaries have already formulated respective risk control mechanisms, and set up risk control mechanisms and firewalls with the affiliated enterprises according to the relevant operatingmethods of the Company.	Comply with best-practice principles, no discrepancy

Assessment items					Discrepancy with
			Operation status (Note1)
					best-practice principles
	Yes	No	Summary		of TWSE/GTSM listed
					companies

`（`4`）`Has the Company formulated internal regulations prohibiting internal staff utilizing information not yet open to the market for trading of securities?	Yes		In 2012 the Company formulated the Operating Procedure for Prevention of Insider Trading and`「`Regulations on whistle-blowing of illegal and unethical or dishonest conduct`」`to prohibit the internal staff utilizing information not yet open to the market for trading securities. The company conducts educational advocacy on the prevention of insider transaction management operation procedures and related laws and regulations for current directors, managers and employees at least once a year. The human resources unit will give education and announcement during pre-employment training. The relevant directors, managers and employees have been educated on June 15, 2020 and on July 13, 2020. The content of the course includes laws related to the prevention of insider trading, maintenance of business secrets, etc., and the briefing of the course is placed on internal staff The education and training system provides reference for those who are not present on the day.		Comply with best-practice principles, no discrepancy
3. Members and duties of board of directors
`（`1）Has the Board of Directors drafted policies for a diversified board framework?	Yes		The composition of the Board of Directors shall be determined by taking diversity into consideration. It is advisable that directors concurrently serving as the Company's managers not exceed one-third of the total number of the Board members, and that an appropriate policy on diversity based on the Company's business operations, operating dynamics, and development needs be formulated and include, without being limited to, the following two general standards: 1. General conditions and values: Gender and age. 2. Professional knowledge and skills: Professional background, professional skills and industrial experience. The specific management objectives and achievement of the Company's diversity policy are as follows:		Comply with best-practice principles, no discrepancy
			Management objectives	Progress
			Becomeyounger in Directors’ age	Achieved
			At least two seats of Directors are females	Achieved
			The members of board of directors possess a diverse range of expertise in the fields of industry, law, finance, accounting, investment management and operations management. The relevant fields of expertise are stated in Note 2. The number of directors who concurrently served as company managers exceeded one-third of the number of seats. In consideration of the succession and inheritance plan of the members of the board of directors, the company added the new management team when the shareholders' meetingwas re-elected on June 12,2019.

Assessment items				Discrepancy with
	Operation status (Note1)
				best-practice principles
	Yes	No	Summary	of TWSE/GTSM listed
				companies

`（`2`）`Aside from setting up the Remuneration Committee and the Auding Committee according to the law, is it willing to set up other function committees?	Yes		In addition to establishing a salary and compensation committee and an audit committee in accordance with the law, the company established an investment review committee through a resolution of the board of directors in May 109 to strengthen the company’s investment decision-making quality, implement investment review procedures and performance management, and provide long-term investment strategic planning and Research, review and suggest major investment decisions. The company has also set up a corporate social responsibility management committee and formulated the "Code of Practice for Corporate Social Responsibility". For details on the promotion of corporate social responsibility, please refer to the corporate social responsibilityreport and the company's website.	Comply with best-practice principles, no discrepancy
`（`3`）`Has the company formulate the performance evaluation methods for the Board of Directors, conduct performance evaluations annually and regularly, and report the results of the performance evaluations to the Board of Directors, and use them as a reference for individual directors' remuneration and nomination and renewal?	Yes		The Company has formulated the Directors and General Manager Performance Assessment Method. The performance of the board of directors is regularly evaluated (at least once per year), and regularly carry out performance assessment of the board every year and forward to the Remuneration Committee and the Board of Directors for discussion. Director performance evaluations are performed externally at least once every three years. The evaluation procedure divides the assessment into three sections: 1. Self assessment`：` The Company conducts internal performance evaluations on the "Board of Directors" and "Functional Committee" every year, which are executed by the members of the Board of Directors, members of the functional committee and the deliberative unit. The contents of the board performance evaluation include: the degree of participation in the company's operations, the quality of the board's decisions, the composition and structure of the board, the selection and continuous training of directors, and internal control. The contents of individual directors 'performance evaluation include: grasp of company goals and tasks, recognition of directors' responsibilities, participation in company operations, internal relationship management and communication, professional and continuous education of directors, internal control, etc. The content of the performance evaluation of the functional committee includes: the degree of participation in the company's operations, the recognition of the functional committee's responsibilities, the quality of the functional committee's decision-making, the composition of the functional committee and the selection of members, and internal control. The total score of the evaluation result must be at least 80 points. In 2020, the company's "Board" and "Functional Committee" self-assessment results were 100 and 98 points, and there were no major improvement projects. The results have been reported to the directors on the board at March 11, 2021, and as a member of the board and the functional committee References toperformance,remuneration and nominated	Comply with best-practice principles, no discrepancy

Assessment items				Discrepancy with
	Operation status (Note1)
				best-practice principles
	Yes	No	Summary	of TWSE/GTSM listed
				companies

			performance. 2 External assessment`：` In November 2019, the company commissioned an external organization, a corporate legal person, Taiwan Chengzheng Management and Anti-fraud Forensic Society, to conduct a board effectiveness evaluation for the period from January 2019 to December 2019. The agency appointed three evaluation experts to evaluate the board's effectiveness through questionnaires and field visits on the four major aspects of the board's professional functions, decision-making effectiveness, internal control, and corporate social responsibility. The total number of independent directors who have been rated as the board of directors is 4. With the participation of multiple professional directors, the evaluated companies can get multiple opinions. The members of the board of directors also said that there are full opportunities for discussion in the meeting and that they are in line with the protection of labor rights and environmental protection regulations. They all have high requirements to ensure compliance with relevant laws and regulations and to implement their corporate social responsibility by deeply linking corporate social responsibility with their daily business activities. The company has reported the evaluation results to the board of directors on March.23, 2020. The board of directors will use the recommendations of the society as a reference for continuous improvement of the functions of the board. 3.Article 19 of the Articles of Association of the Company stipulates that the remuneration of directors of the company shall not be higher than 2% of the profit for the year, and the directors ’remuneration will be determined according to the results of the board ’s performance evaluation. For details refer to the companywebsite.
(4) Has the Company regularly assessed the independence of the certified accountant?	Yes		In order to strengthen the independence of the CPA and his /her familiarity with company business, an evaluation of CPA independence, competency and performance is performed by the company each year and an assessment is done based on the CPA Evaluation and Performance Assessment Procedure. The results are submitted to the Audit Committee and board of directors for discussion. The evaluation items include 10 independence indicators including no direct or significant indirect financial interest between the CPA and client, financial statements of the institution serviced may not have been audited within two years, CPA and all audit service team members may not have client shareholdings and other performance indicator items including financial statement completion date, interaction between CPA and the company, did the CPA actively submit recommendations regarding companysystems and internal auditing.	Comply with best-practice principles, no discrepancy

Assessment items				Discrepancy with
	Operation status (Note1)
				best-practice principles
	Yes	No	Summary	of TWSE/GTSM listed
				companies

			The company’s 2020CPA performance evaluation has been completed and it passed review by the audit committee on March 11 2021 and board of directors on March 11, 2021. The results will be used to implement corporate governance and improve the function of the board of directors. The CPA performance evaluation results have been posted on the company website. Refer to the company website. If a situation occurs in which the CPA needs to be replaced, the chairman and general manager shall understand the reason for replacement and hold an interview for the replacement CPA. A profile of the CPA and other related information is submitted to the Review Committee for review and then it is passed to the Board of Directors for discussion. Afterward,the CPA maybe invited to board of director meetings if necessary.
4. Have public listed companies established dedicated (ad-hoc) corporate governance units or personnel responsible for corporate governance matters (including but not limitd to providing information needed by directors and supervisors to perform their duties, handle matters related to the board of directors meeting and shareholders’ meeting, handle company registration and registration of related changes, preparation of the board of directors and shareholders meeting minutes)?	Yes		The company has set up a corporate governance work team. The General Manager was appointed to serve as convenor, on the board of March 22, 2019, the new company secretary was appointed at the Chief Financial Officer Ms. Hong, Guan -Wen (extension: 3230) as the head of corporate governance, who is responsible for the supervision and planning of corporate governance. Her qualifications meet the requirements of more than three years of experience in the management of the company's finance, stock affairs or deliberationsin according to the Taipei Exchange Directions for Compliance Requirements for the Appointment and Exercise of Powers of the Boards of Directors of TWSE/TPEx Listed Companies. The head of corporate governance’s duties include: provide directors and Audit Committee with the information required for the implementation and the latest regulations pertaining to the Company's operations, assist directors and Audit Committee in complying with laws and regulations, report regularly to the Corporate Governance Committee and the Board of Directors on corporate governance operations, handle affairs relating to the board and shareholder meetings in accordance with the law, produce the minutes of the Board of Directors and shareholders' meetings, assist directors and members of Audit Committee in their appointments and continuing education, etc., all are performed by the Board’s secretary unit. The implementation of the corporate governance in the year of 2020 are as follows: 1. 6 board meetings, 6 audit committees, 5 Remuneration Committees,and 1 Investment Review Committee were held. 2. Hold annual shareholders' meeting 3. Board members complete at least 6 credits of refresher courses 4. Insured liability insurance for directors and key staff and reported to the board of directors 5. Conductperformance evaluation of the board of directors and functional committees,	Comply with best-practice principles, no discrepancy

Assessment items				Discrepancy with
	Operation status (Note1)
				best-practice principles
	Yes	No	Summary	of TWSE/GTSM listed
				companies

			the evaluation results reached 100 and 98 points 6. The results of the sixth corporate governance evaluation are the top 6 ~ 20% of listed companies 7. 3 meetings of independent directors and accountants, internal audits, etc. In 2020,the traininghours for the head of corporategovernance totaled 24 hours Date Organizer Course Hours 2020/07/13 Taiwan Corporate Governance Association Viewing M&A Cases from the Perspective of Directors and Supervisor 3 2020/07/13 Trends and risk management of digital technologyand artificial intelligence 3 2020/08/13 Corporate Operation Association Disccution on Taiwanese businessmen's business strategy and M&A strategy from theglobalpolitical and economic situation 3 2020/08/14 Legal due diligence of corporate mergers and acquisitions and an overview of transaction contracts 3 2020/08/18 Practical seminar on personnel integration in corporate mergers and acquisitions 3 2020/08/21 Offense and defense of unconsensual mergers and acquisitions and the responsibility of the person in charge of the company 3 2020/08/24 Due diligence and financial evaluation of M&A transactions 3 2020/08/28 Take biotech companies as an example to discuss legal issues related to corporate listings, mergers and acquisitions, and delistingtransactions 3
5. Any communication channel between the Company and the stakeholders? Any special zone on the website for the stakeholders for properly responding to the topic of corporate social responsibility where the stakeholders are concerned?	Yes		A dedicated CSR area, a dedicated stakeholder area, spokesman system and website has been established to provide communication channels and provide the latest news of the company and its subsidiaries. A dedicated shareholder mailbox and investor relations mailbox have also been established. Corresponding windows have been set up for business management and operation items. If company stakeholders have any relevant recommendations, questions or complaints, the mailbox in the dedicated stakeholder area or the dedicated stakeholder contact window may be used to contact the chairman, general manager,independent director or audit office of the companyformingan effective and	Comply with best-practice principles, no discrepancy

Assessment items				Discrepancy with
			Operation status (Note1)
				best-practice principles
	Yes	No	Summary	of TWSE/GTSM listed
				companies

			free-flowing communication channel.
6. Any assigned professional stock affairs handling agency for shareholders’ affairs?	Yes		The company has appointed Yuanta Securities to serve as the company’s stock affairs agent and assist the company in handling matters related to the shareholders’ meeting.	Comply with best-practice principles, no discrepancy
7. Information Disclosure
（1） Has the company set up website for disclosing finance, business and corporate governance?	Yes		The company and its subsidiaries have set up a website to provide financial and business information. A dedicated person has been assigned to be responsible for the updating of this information. For details refer to the company website	Comply with best-practice principles, no discrepancy
（2） Are there other ways of information disclosure (such as English website, assign dedicated person for collection and disclosure of company information? Any spokesman system for implementation? Full process of briefing by the legal person posted on the companywebsite)?	Yes		In addition to its Chinese language website, the company also provides English and Japanese languages websites. A dedicated person is responsible for collecting information and disclosure of major company information. External communication is handled by a spokesperson. Audio and video files of the company’s institutional investor conferences are posted on the company’s information disclosure website for general reference. Relevant information is posted on the Market Observation Post System designated by the competent authorities.	Comply with best-practice principles, no discrepancy
（3） Has the company announce and report the annual financial report within two months after the end of the fiscal year, and announce and file the first, second and third quarter financial reports and operating conditions of each month as early as possible before the prescribed deadline?	Yes		Although the company's 2019 annual consolidated and individual financial reports were not announced and reported within two months after the end of the fiscal year, they were all completed in accordance with the regulations before the deadline. The financial reports for the first to third quarters of 2020 and the monthly revenue situation are also announced and declared at the MOPS before the stipulated deadline, and the company voluntarily announces and declares the monthly self-financing profit and loss status,and simultaneouslyuploads relevant information to the companywebsite.	Comply with best-practice principles, no discrepancy
8. Are there other important information for helping understand the operation of corporate governance (including but not limited to employee rights and benefits, employee care, investor relations, supplier relations, the rights and benefits of the stakeholders, further studies for directors and supervisors, risk control policy, and execution of risk assessment standard, client policy implementation, purchase of liabilityrisk for directors and supervisors,others)?	Yes		1. Employee rights: Employee rights are handled by the company in accordance with the Labor Standards Act in the company’s annual report for information regarding other employee welfare measures, the pension system, continuing education and other related employee rights. The employee rights at our subsidiaries are handled in accordance with their respective national laws and regulations 2. Employee concern: In addition to setting up medical offices at the company and its subsidiaries that are staffed with professional medical care providers, a labor safety & health committee has been established for safety and health procedures for specialist personnel and personnel assistanceprojects including psychology,medical and health. A wide range of	Comply with best-practice principles, no discrepancy

			Discrepancy with
		Operation status (Note1)
			best-practice principles
Yes	No	Summary	of TWSE/GTSM listed
			companies

		channels have been provided for personnel to express their opinions to create excellent two-way communication channels 3. Supplier relations and stakeholder rights are handled in accordance with the company and subsidiary work procedures and the contracts with cooperating companies to maintain the legal rights of both parties. No related lawsuits have been brought as of today. 4. Investor relations: The company and its subsidiaries are very concerned about investor rights. In addition to posting related information in a timely fashion on the Market Observation Post System and the company website, the company has been awarded an A+ information disclosure assessment rating for the fourth straight year, named a transparent voluntary information disclosure company for eight straight years and received an A++ rating for four straight years, ranked within the top 20% of public listed companies in the 1st corporate governance assessment and within the top 5% of listed companies in the 2nd ~4th assessments. The 5-6th was ranked the top 6-20% of the listed company. 5. Stakeholder rights: In holding the beliefs of integrity and honesty, the company is committed to building long-term relationships with stakeholders based on transparency and sincerity. Related information please refer to the company’s annual report and website for information regarding stakeholder communication. 6. The company’s directors attend financial, business and professional knowledge continuing education courses on an irregular basis. Refer to the director and supervisor education and training table in the company’s annual report. 7. Implemention of the company’s risk management policy and risk measurement standard: In the company’s annual report for information regarding the risk management policy, organization structure and related risk control work of the company and its subsidiaries. In addition, the company and its subsidiaries analyze, track and respond to possible high risk events caused by operation targets to establish a sound risk management system. 8. Protecting consumers or customer policy implementation: Our ‘customer first, mission focused’ philosophy demonstrates our determination and commitment to our customers, our dedication to quality and hard work to earn customer approval over the years. The company has been given best supplier awards from a number of companies as a form of encouragement. 9. The company purchases liability insurance for directors and managers every year. The current insurance coverage is US$ 5,000,000 and it is proposed to report the amount of insurance, insurance coverage and insurance rate during the renewal of the contract. The board of directors and board meetingminutes are detailed on the companywebsite.

Assessment items				Discrepancy with
	Operation status (Note1)
				best-practice principles
	Yes	No	Summary	of TWSE/GTSM listed
				companies

9. Succession Plan and Operations of Members of the Board of Directors and Key Managerial Officers	Yes		The composition of the board of directors of the company considers its own operations, operating types and development needs to formulate appropriate diversification policies. In order to meet the future strategic development and transformation planning, the professional knowledge, technology and experience required by the directors of the company are reviewed regularly. The number of people and the conditions that should be met to plan the succession plan and selection of directors, addeded the new management team members during the re-election of the shareholders' meeting at June 12, 2019 to make the directors younger and familiar with the operation of the board of directors earlier to assist the company's strategic planning. The company's succession planning is based on the premise of constructing an evaluation system, mainly based on personality traits, performance and future potential. In addition to having excellent work performance, the enthusiasm and philosophy of the company must be consistent, and the personality traits must include integrity, commitment, breakthrough thinking, and a keen insight. In order to meet the needs of the management and inheritance of the future management, planning the cultivation mechanism of potential talents and leaders, which mainly includes four major training modules: management ability, professional ability, Individual Development Program (IDP) and job rotation. Encourage potential talents to participate in the master's degree in business management to improve business management capabilities; implement job rotation, task assignment and other work experience to cultivate decision-making judgment, and then achieve the inheritance effect, to ensure the company's sustainable management. The Company will also arrange important management to serve as members of the Board of Directors of the Company or investment enterprise, familiarize them with the operation of the Board of Directors, and have them participated in the planning of the Company's or investment enterprise's long-term strategic direction and vision. No	Comply with best-practice principles, no discrepancy
10. Please provide information on the status of improvement regarding the results of corporate governance evaluation published by the TWSE Corporate Governance Center in the most recent year. For improvements not yet implemented, state the areas and policies the Company has set as priority for improvement: The company has obtained the top 20% of the companies in first corporate governance evaluation, the top 5% of the listed companies from 2ndto 4thevaluations, and the top 6 to 20% of the listed companies from the 5thto 6thevaluation. The efforts to implement corporate governance have been affirmed. The relevant matters are described as follows:

Assessment items				Discrepancy with
	Operation status (Note1)
				best-practice principles
	Yes	No	Summary	of TWSE/GTSM listed
				companies

(1) Improvements`：` 1. Hold a regular shareholder meeting before the end of May: In 2021, it was registered to hold a regular shareholders' meeting on May 31st2021, and the shareholders of Yili attended the meeting. 2. 2. Set up functional committees other than statutory: TXC passed the resolution of the board of directors in May, 2020 to establish an investment review committee to strengthen the company's investment decision-making quality, implement investment review procedures and performance management, and conduct research, review and recommendations on the company's long-term investment strategic planning and major investment decisions. (2) Matters to be improved`：` 1. Among the current 11 directors of the board of directors of the company, there are two female independent directors (one of them is currently a lawyer), in implementation of the gender equality policy and conformance to multiple backgrounds and competency. However, if any gender does not reach more than one third of the number of directors, the plan is to be evaluated continuously. 2. To publish the annual financial report within two months after the end of the fiscal year: to discuss with the accountant as it is the goal of the company. 3. Voluntary disclosure of remuneration of individual directors and supervisors in the annual report: due to the protection of personal data, it is not disclosed temporarily, and it is planned to be evaluated and disclosed in the future. 4. Signing of group agreements between the company and its employees: the company has not established a professional association, and it is not necessary to sign a group agreement in accordance with the group agreement law. If the association is established, it will be implemented in accordance with the laws and regulations.

Hold a regular shareholder meeting before the end of May: In 2021, it was registered to hold a regular shareholders' meeting on May 31[st] 2021, and the shareholders of Yili attended the meeting.
1. Set up functional committees other than statutory: TXC passed the resolution of the board of directors in May, 2020 to establish an investment review committee to strengthen the company's investment decision-making quality, implement investment review procedures and performance management, and conduct research, review and recommendations on the company's long-term investment strategic planning and major investment decisions.

(2) Matters to be improved ： 1. Among the current 11 directors of the board of directors of the company, there are two female independent directors (one of them is currently a lawyer), in implementation of the gender equality policy and conformance to multiple backgrounds and competency. However, if any gender does not reach more than one third of the number of directors, the plan is to be evaluated continuously.

To publish the annual financial report within two months after the end of the fiscal year: to discuss with the accountant as it is the goal of the company. 3. Voluntary disclosure of remuneration of individual directors and supervisors in the annual report: due to the protection of personal data, it is not disclosed temporarily, and it is planned to be evaluated and disclosed in the future.
Signing of group agreements between the company and its employees: the company has not established a professional association, and it is not necessary to sign a group agreement in accordance with the group agreement law. If the association is established, it will be implemented in accordance with the laws and regulations.

Note 1: Explanations should be provided in the summary column regardless of whether ‘yes’ or ‘no’ is checked under operating conditions.

Note 2: Descriptions of directors’ fields of expertise

Diversity items Name of director			Basic Component	Basic Component	Basic Component	Basic Component	Basic Component					Industry	experience		Professional competence	Professional competence	Professional competence	Professional competence

	Nationa lity	Gender	Work in TXC	Age				Indepenedent directors Tenure of tenure			Electronic Technology	R & D hl	business l	Finance and Investment	Accounting and financial analysis	legal	Information Technology	Business management
				41 ~ 50
					51	61	71				Manufacturing	tecnoogy	deveopment	and M & A
					~ 60	~ 70	~ 75	<3	3~9	>9
Lin, Wan-Shing	ROC	Male	v			v					v	v	v		v			v
Lin, Jin-Bao	ROC	Male	v				v				v	v	v		v			v
Chen Chueh, Shang-Hsin	ROC	Male	v			v					v	v	v		v		v	v
Kuo, Ya-Ping	ROC	Male	v		v						v		v		v			v
Huang, Hsiang-Lin	ROC	Male	v	v							v		v		v			v
Hsu, Hsing-Hao	ROC	Male		v							v	v					v	v
TLCCapital Co., LTD (Peng,Chih-Chiang)	ROC	Male			v						v		v	v	v		v	v
Yu, Shang-Wu	ROC	Male			v					v			v	v	v		v	v
Tsai, Song-Qi	ROC	Male				v			v				v	v	v			v
Su, Yan-Syue	ROC	Female			v				v				v	v	v			v
Wang, Chuan -Fen	ROC	Female		v					v				v	v		v		v

(IV) Composition, duties, and operations of the Remuneration committee

The company established the remuneration committee on December 28, 2011. The third and fouth term of the remuneration committee was composed of four independent directors by board resolution. Independent director Yu Shang-Wu was reelected as convenor. The qualification review of this term’s members includes member academic background, member qualification review sheet, statement and related confidentiality agreements. Refer to the company website for more detailed information.

The committee organization is as follows:

==> picture [377 x 123] intentionally omitted <==

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

Board of Directors
Remuneration Committee
Remuneration Committee Team:
Human resources department
Financial department
----- End of picture text -----

Information on the members of the Remuneration Committee

		Meets the Following Professional Qualification Requirements	Meets the Following Professional Qualification Requirements	Meets the Following Professional Qualification Requirements	Meets Indepence Criteria	Meets Indepence Criteria	Meets Indepence Criteria	Meets Indepence Criteria	Meets Indepence Criteria	Meets Indepence Criteria	Meets Indepence Criteria	Meets Indepence Criteria	Meets Indepence Criteria	Meets Indepence Criteria
		and Has at Least Five Years of Work Experience			(Note 2)

			A Judge, Public	Have Work	1	2	3	4	5	6	7	8	9	10	Number of Other
		An Instructor of
		Higher Position in a	Proscutor, Attorney,	Experience in											Public
			CPA or Other Pfil	the Area of C
		Department of													Companies
Position	Name\|Commerce, Law,	roessona or Technical Specialists Who Has Passed a	ommerce, Law, Finance, Accountin or											Concurrently	Note
	Criteria	Finance, Accounting
(Note 1)		or Other Academic Department Related to	National	g Otherwise											Serving as Member of
			Examination and	Necessary for
		the Business Needs of	Been Awarded a	the Business of											Compensation
		the Company in a
			Certificate in a	the Company											Committee
		Public of Private
		Junior College,	Profession Necessary
			for the Business of
		College or University
			the Company

Independent director (Convenor)	Yu, Shang-Wu														1
Independent director	Tsai, Song-Qi														0
Independent director	Su, Yan-Syue														3
Independent director	Wang, Chuan -Fen														0

Note 1: Write director, independent director or other for position.

Note 2: Please check “  ” the corresponding box if the following circumstances apply to the director in the two-year period before being elected and during the term of office.
(1) Not an employee of the Company or any of its affiliates.
(2) Not a director or supervisor of the Company or any of its affiliates. (Do not apply to independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, the Company and its parent or subsidiary or a subsidiary of the same parent.)
(3) Not a natural-person shareholder who holds shares, together with those held by the person’s spouse, minor children, or held by the person under others’ names, in an aggregate amount of 1% or more of the total number of issued shares of the Company or is ranked in the top 10 in shareholdings.

(4) Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship, of a managerial officer under (1) or any of the persons under (2) and (3).
(5) Not a director, supervisor, or employee of a corporate shareholder that directly holds five percent or more of the total number of issued shares of the company, or that ranks among the top five in shareholdings, or that designates its representative to serve as a director or supervisor of the company under Article 27, paragraph 1 or 2 of the Company Act. (Do not apply to independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, the Company and its parent or subsidiary or a subsidiary of the same parent.)
(6) Not a director, supervisor, or employee of other company if a majority of the company's director seats or voting shares and those of that other company are controlled by the same person. (Do not apply to independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, the Company and its parent or subsidiary or a subsidiary of the same parent.)
(7) Not a director, supervisor, or employee of other company or institution if the chairman, general manager, or person holding an equivalent position of the company and a person in any of those positions at that other company or institution are the same person or are spouses.
(8) Not a director, supervisor, officer, or shareholder holding five percent or more of the shares, of a specified company or institution that has a financial or business relationship with the company. (Do not apply in cases where the specified company or institution holds more than 20 percent but less than 50 percent of the Company’s issued shares and are the independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, the Company and its parent or subsidiary or a subsidiary of the same parent.)
(9) Not a professional individual who, or an owner, partner, director, supervisor, or officer of a sole proprietorship, partnership, company, or institution that, provides auditing services to the company or any affiliate of the company, or that provides commercial, legal, financial, accounting or related services to the company or any affiliate of the company for which the provider in the past 2 years has received cumulative compensation exceeding NT$500,000, or a spouse thereof; provided, this restriction does not apply to a member of the remuneration committee, public tender offer review committee, or special committee for merger/consolidation and acquisition, who exercises powers pursuant to the Act or to the Business Mergers and Acquisitions Act or related laws or regulations.
(10) Not been involved in any of situations defined in Article 30 of the Company Act.

3. Remuneration Committee Operation Status

(1) The company’s remuneration committee has 4 members.
(2) The current term of remuneration committee members is: July 11, 2019 to June 11, 2022. The Committee had held 5 meetings (A) in 2020. The member qualifications and attendance status is as follows:

Position	Name	Attendence in Person (B)	By Proxy	Attendence Rate in Person (%) (B/A) (Note)
Independent director (Convenor)	Yu, Shang-Wu	5	0	100%
Independent director	Tsai,Song-Qi	5	0	100%
Independent director	Su,Yan-Syue	5	0	100%
Independent director	Wang,Chuan-Fen	4	1	80%

Other mentionable items:

If the Board of Directors declines to adopt or modifies a recommendation of the remuneration committee, the date of the board of directors meeting, term, content of motions, board resolution results and company handling of remuneration committee opinions (if the resolution passed by the board of directors exceeds the recommendations of the remuneration committee,

the circumstances and cause of the difference shall be specifically stated): No such circumstances.

If any committee member has an objection or qualified opinion together with a record or written statement regarding a remuneration committee resolution, the remuneration committee date, term, content of motions, all member opinions and how member opinions were handled: No such circumstances.
Refer to the company website for more detailed information regarding the company’s remuneration committee operation conditions and meeting minutes.
The discussion of the remuneration committee and the handling of the company's opinions:

Meeting date (session)	Agenda	Resolutions and opinion of all members
2020/03/23 (4thmeeting of the fourth session)	1. Performance appraisal of board of directors (including functional committees) and managers in 2019 2. 2019 annual employee compensation and report on the distribution of directors' compensation	Approved as proposed and reported to the Board of Directors for resolution
2020/05/07 (5thmeeting of the fourth session)	1. Formulate the "Retirement and Dismissal Measures for Company Managers"
2020/07/13 (6thmeeting of the fourth session)	1. First-level supervisor assignment
2020/08/10 (7thmeeting of the fourth session)	1. Review of 2019 employee compensation and directors' compensation
2020/12/29 (8thmeeting of the fourth session)	1. First-level supervisor assignment 2. 2020 performance bonus payment amount 3. 2021 annual employee compensation and directors' compensation ratio

Remuneration committee duties

In accordance with the charter of the company’s remuneration committee, the remuneration

committee has the following duties and its recommendations are submitted to the board of directors for discussion:
(1) Regular review on the charter and submission of amendment recommendations.
(2) Determine and regular review the policies, system, standards and structure for company director and officer performance evaluations and remuneration.
(3) Regularly evaluate the remuneration of company directors and officers.

The following principles must be followed before performance of the above remuneration committee duties:

(1) Ensure the company’s remuneration arrangements conform to related laws and are sufficient to attract talent.
(2) Performance assessments and compensation levels of directors, supervisors and executive officers shall take into account the general pay levels in the industy, the time spent by the individual and their responsibilities, the extent of goal achiecement, their performance in other positions and the compensation paid to employees holding equivalent positions in recent years. The evaluation should also cover the reasonableness of the correlation between the individual’s performance and the company’s operational performance and

future risk exposure, with respect to the achievement of short and long-term business goals and the financial position of the company.

(3) There shall be no incentive for directors or executive officers to pursue compensation by engaging in activities that exceed the tolerable risk level of the company.
(4) The percentage of the bonus to be distributed based on short-term performance and the time for payment of any variable compensation for directors and executive officers shall be determined based on industry characteristics and company business attributes.
(5) A committee member may not enter into discussions or voting when the committee is deciding on that member’s individual remuneration.
(6) The decision making and handling of director and officer remuneration matters for subsidiaries is delegated to the subsidiary but requires the ratification of the company’s board of directors. The company’s remuneration committee is aksed to submit recommendation before the matter is submitted to the board of directors for discussion.

Refer to the company website for more detailed information on the company’s remuneration committee charter. For details refer to the website: http://www.txccorp.com/

(V) Fulfillment of Corporate Social Responsibility and variations with management principles of publicly-listed companies and reasons 1. Discrepancy with best-practice principles of TWSE/GTSM listed companies

				Discrepancy with
			Operation Status (Note 1)	best-practice
Assessment items				principles of
	Yes	No	Summary (Note 2)	TWSE/GTSM listed
				companies

1. Does the company conduct risk assessment on environmental, social and corporate governance issues related to the company's operation in accordance with the principle of materiality, and formulate relevant risk management policies or strategies? (Note 3)	Yes		1. In order to cope with major global economic, social and environmental risks, a systematic risk response policy and process shall be established in accordance with the principle of materiality and ISO 31000 risk management guidelines. The company has a risk response organization. The general manager of the company acts as the convener, coordinates and directs the promotion and operation of the risk management plan, reviews the risk identification work of the company, and has various risk response authority and responsibility units under it. Each year, the company reviews the situation from the perspective of enterprise sustainability, including financial and non-financial risks. In addition to mitigating the risks, it also seeks opportunities for corresponding risks. 2. The risk identification process considers the frequency of occurrence, impact degree and control degree for quantitative evaluation, covering 1. Business/laws/regulations/standards 2. Political environment change 3. Economic/financial environment change 4. Natural disasters (climate change) 5. Technology and information 6. Competitive environment 7. Facilities/equipment 8. Business/market operation 9. Supply chain related 10. Financial operation 11. Community/environmental safety and health 12. Personnel, etc., identify 88 types of risks and prioritize them by matrix analysis. 3. In 2020, 20 risks were assessed. The main risks outside the organization were product competition and market strategy, and the impact of Sino-U.S. trade, while the key risks inside the organization were personnel shortage and supply chain response. The management of risks outside the organization is to continuously focus on the overall strategy, with high-precision products, high-quality technology and origin conversion, strengthen the competitive advantage, create benefits for the company, the management of risks within the organization is to continuously strengthen the company's information security management and control measures and strengthen the management of the supplychain.	Comply with the best-practice principles, no discrepancy

				Discrepancy with
	Operation Status (Note 1)			best-practice
Assessment items				principles of
	Yes	No	Summary (Note 2)	TWSE/GTSM listed
				companies

2. Has the Company established exclusively (or concurrently) dedicated units to implement CSR, and has the board of directors appointed executive-level positions with responsibility for CSR, and to report the status of the handling to the board of directors?	Yes		The company has a "Corporate Social Responsibility Management Committee", and the company management center is responsible for jointly promoting various corporate social responsibility issues with the expertise of various departments. Please refer to the company website for its organizational structure. In addition, the company has established the "Economy" and "Environment and Society" committees in 2013 to effectively implement the decision-making and division of powers and responsibilities of the above-mentioned related issues. After the management representatives are appointed and approved by the board of directors, they are authorized by the general manager representative. The management representative is appointed by the board of directors to appoint the company’s chief financial officer, and the environmental and social management representative is appointed by the board of directors to appoint the company’s current environmental, safety and health system management representative. Related promotion actions include reporting the operation oand the implementation report to the board of directors on December 29th2020,please refer to the board meeting minutes of the company website. We will also report the implementation status and resource requirements to the chairman and the general manager from time to time on weekdays, so as to grasp the progress in time and adjust the implementation strategy and direction in response to current events and emergencies at any time. Due to different local laws and regulations, overseas subsidiaries set up "social responsibility management system" for operation, which is under the overall responsibility of the administration. There are four units under it, namely, "labor and ethics group", "safety and health group", "environmental energy group" and "system management group". The above groups and the company's safety committee, according to the annual plan, include the issues of each stakeholder into the routine work, annual plan and annual management review report, so as to continuously promote the implementation of enterprise responsibility related activities and verification. And the board of directors authorizes the general manager of the company to be the highest person in charge of the system,and regularlyreports the operation of the system to the board of directors every year.	Comply with the best-practice principles, no discrepancy
3. Environmental issues

				Discrepancy with
			Operation Status (Note 1)	best-practice
Assessment items				principles of
	Yes	No	Summary (Note 2)	TWSE/GTSM listed
				companies

`（`1`）`Does the company establish appropriate environmental management system according to its industrial characteristics?			The environmental, safety and health policies of the company and its subsidiaries are as follows: In the process of R & D, manufacturing, testing and sales, it is required to comply with laws and regulations and other relevant requirements, so as to prevent occupational disasters and continuously improve the operation of the management system, thereby to implement the company's sustainable operation policy. We are committed to protecting our employees and protecting the planet: • To ensure the safety and health of employees is the primary responsibility and obligation of the company's supervisors at all levels. • Prevent work-related injuries, ill health, illness and accidents to protect all plant personnel. • Comply with laws and regulations, reduce the impact of environmental pollution, and develop standard operating procedures and methods. • Communicate policies to employees, suppliers, customers, contractors and stakeholders and provide necessary education and training to ensure that they have awareness of environmental safety and health and correct behaviors. • Continuously improve management system operation and performance. •Encourage employees to provide suggestions, establish and maintain a good communication channel between the company's supervisors and employees. •Production of green products, promotion of waste reduction campaign and continuous rectification to create a safe and healthy environment. The company promises to take the most advanced international and domestic environmental safety and health standards as the basis for self-improvement. See the company's website for details.	Comply with the best-practice principles, no discrepancy
`（`2`）`Is the company committed to improving the utilization efficiency of resources and using recycled materials with low impact on environmental load?	Yes		The company and its subsidiaries continue to promote energy-saving and carbon reduction programs, such as solar power generation system installation, the use of energy-saving lighting fixtures throughout the plant, adjustment of public lighting time in the plant along with sunrise/sunset time, adjustment of air conditioning start/stop time and hot water supply time in the living area according to the weather and temperature, recycling of process condensed water for toilet flushing, recycling of scrap products and leftovers to qualified waste metal resources recovery manufacturers extract residual value of precious metals such as gold and silver, and promote process waste heat recovery and reuse and new heat pump system energy saving. Continuously establish and publicize relevant environmental protection knowledge and concepts of employees, so as to fulfill the responsibilityand effort toprotect the earth. See the companywebsite for details.	Comply with the best-practice principles, no discrepancy

				Discrepancy with
	Operation Status (Note 1)			best-practice
Assessment items				principles of
	Yes	No	Summary (Note 2)	TWSE/GTSM listed
				companies

`（`3`）`Does the company assess the potential risks and opportunities of climate change for the enterprise now and in the future, and take measures to deal with climate related issues?	Yes		In response to the important issues of climate change, the company continues to actively promote relevant activities, in addition to "greenhouse gas verification" (ISO 14064-1) to master the company's carbon emissions, and to disclose the data related to natural capital management such as carbon, water, forest, etc. through CDP questionnaire, and to understand the relevant risks and opportunities according to the scoring results, so as to serve as a measurement factor for subsequent related activity decision-making and investment selection. In addition, through the ISO14001 management review meeting, the company reviewed the actual implementation measures of carbon reduction in the previous year and inspected the implementation results, and actively faced the measures of carbon reduction. Taking stock of risks and opportunities arising from climate change, including direct or indirect physical impacts, impacts of regulatory, technological or market demand transformation. Through the identification of relevant units, we can strengthen the climate change governance of the companyto reduce risks andgraspbusiness opportunities.	Comply with the best-practice principles, no discrepancy
`（`4`）`Does the company make statistics of greenhouse gas emissions, water consumption and total weight of waste in the past two years, and formulate policies for energy conservation and carbon reduction, greenhouse gas reduction, water consumption reduction or other waste management?			The company and its subsidiaries have carried out "greenhouse gas verification" (ISO 14064-1) on a regular basis to thoroughly understand the actual production of "greenhouse gases" by the company through inventory, and then to formulate improvement measures to achieve the goal of carbon dioxide emission reduction, so as to demonstrate the company's commitment to environmental protection.See the company website for details. The company established the ISO 14001 system in 2002. Through this system standard, it strengthens the autonomous management, continuously improves the environmental performance, and effectively and properly maintains the overall operation. The company complies with the relevant requirements of government laws, regulations and other applicable international regulations. In terms of pollution control, the company has obtained the "fixed pollution source operation license", "water pollution control license", "enterprise waste cleaning plan" and "toxic chemical substance operation license document" according to law, and regularly carries out spot inspection, maintenance, declaration and testingin accordance with itsprovisions. See the companywebsite for details.	Comply with the best-practice principles, no discrepancy
4 Social issues

				Discrepancy with
			Operation Status (Note 1)	best-practice
Assessment items				principles of
	Yes	No	Summary (Note 2)	TWSE/GTSM listed
				companies

(1) Does the company formulate relevant management policies and procedures in accordance with relevant laws and regulations and international human rights conventions?	Yes		In order to protect the rights and interests of workers, the company and its subsidiaries have formulated "Labor Rights and Ethics Policies", each following the recognized human rights principles such as local labor laws and the Code of Conduct of the Responsible Business Alliance, and formulating "Labor Rights and Ethics and Ethics" to protect the legitimate rights and interests of employees. Policy", and check whether the proposed policy needs to be revised and adjusted in the quarterly labor-management meeting, in order to comply with corporate ethics and fulfill corporate social responsibility, and announce it to the public. Please refer to the company website for details. TXC also through the annual training of corporate social responsibility courses and human rights policy promotion, so that colleagues understand their own rights and corporate social responsibility policies andpractices. A total of 942people completed the trainingin 2020.	Comply with the best-practice principles, no discrepancy
(2) Does the company establish and implement reasonable employee welfare measures (including compensation, vacation and other benefits), and properly reflect the operating performance or results in employee compensation?			The company and its subsidiaries set salary scales according to the relative contribution of their positions, in line with the company's operation and development strategy, and based on the employees' personal performance, future development potential and the company's operation status as the basis for salary adjustment and bonus payment, so as to encourage the employees to make positive efforts to encourage excellent performance and achieve the "internal fairness" and "individual fairness" pursuant to the salary; and to encourage employees to create business results, allocate a certain proportion of profit-making earnings as the basis of employee dividends, share the earnings results with colleagues, consider the benchmark enterprises of the industry, regularly check the rationality of various salary and welfare systems by the "remuneration committee", maintain the company's high level employee welfare, attract outstanding talents to join and stay for a long time. In order to improve the salary level of employees, The average salary adjustment rate is 6% in January, 2020, and the average salary adjustment rate has passed salary adjustment of 5% in April, 2021. In the future, it will be adjusted appropriately according to the company's operating conditions. In order to assist employees’ families to take care of children and reduce the burden of childcare, and to respond to the government’s child reduction plan, it is planned to subsidize employees’ childcare allowances from the second half of 2020. In addition, the company also has an employee welfare committee, which is based on the concept of "work/life balance", to plan and promote diversified employee welfare and activities, and promote a workplace culture that can achieve work/family balance. In the "performance appraisal management measures", the supervisor may give appropriate rewards in performance appraisal depending on the input and cooperation of employees in corporate social responsibilityrelated activities.	Comply with the best-practice principles, no discrepancy

				Discrepancy with
			Operation Status (Note 1)	best-practice
Assessment items				principles of
	Yes	No	Summary (Note 2)	TWSE/GTSM listed
				companies

(3) Does the company provide a safe and healthy working environment for its employees and conduct regular safety and health education for them?	Yes		The company and its subsidiaries set up an Occupational Safety and Health Committee to review the progress of work quarterly, and discuss environmental safety and health issues to ensure the safety and health of the working environment. The company's employees engaged in labor safety and health related work have obtained relevant licenses according to law, and from time to time, they have sent personnel to attend seminars held by government agencies or academic institutions. In addition, a clinic is also set up to provide professional medical consultation services by resident doctors and full-time nurses. Health information (including disease prevention)/lectures are held irregularly. Please refer to the company website for relevant health management activities. The company's Ningbo plant and Chongqing plant respectively set up an environmental health and safety committee and a production safety management committee to review the progress of work once a month, and discuss environmental protection, safety and health issues. A number of new human health education and promotion courses are held regularly every year, and health life is promoted to all colleagues in the form of email every month. Health information is also provided on the company's internal web pages and e-mails from time to time to enhance the health knowledge of employees and their dependents.	Comply with the best-practice principles, no discrepancy
(4) Does the company establish an effective career development training program for its employees?	Yes		The company and its subsidiaries plan employee training courses in accordance with the job/grade system and actual needs, so as to strengthen the professional knowledge, skills and expertise of employees, and further improve their work performance. The training courses include rookie training, professional training, supervisor ability training, general training, self inspired growth, project training and online learning platform. The company has also built a talent echelon for key positions to strengthen the real-time information management with the data managementplatform	Comply with the best-practice principles, no discrepancy

				Discrepancy with
			Operation Status (Note 1)	best-practice
Assessment items				principles of
	Yes	No	Summary (Note 2)	TWSE/GTSM listed
				companies

(5) Does the company comply with relevant laws and regulations and international standards for customer health and safety, customer privacy, marketing and labeling of products and services, and formulate relevant policies and complaint procedures to protect the rights and interests of consumers	Yes		To ensure that the products manufactured by the company can meet international standards, and simultaneously protect the use rights and interests of consumers. Since 2005, we have insured all our products against full product liability insurance from a reputed international insurance company. Since the company's products are mainly active and passive components that generate frequency, even if the product loses function (poor frequency or unable to vibrate), it will not cause physical injury to the agents of the sales channel or the users of the product. Therefore, the company's long-term goal of insuring product liability insurance is to meet its own requirements with the highest ethical standards, so as to share the risks and responsibilities of sales channel partners and improve after-sales service and guarantee. The Corporate Social Responsibility Report of 2019 entrusted a third-party verification unit "British Standards Institute" (BSI) to verify the inclusiveness and significance of information disclosure in accordance with the AA1000 assurance standard and the GRI standard "The Core option" And responsiveness, and issued an independent guarantee statement in the appendix of the report. The company will regularly arrange meetings to communicate with customers, and carry out customer satisfaction surveys every year to identify five aspects of contact with customers. Each aspect has its own unit responsible for the establishment of satisfaction indicators and objectives, and for the implementation of satisfaction monitoring. If the analysis of satisfaction data fails to meet the requirements, the responsible unit shall implement the improvement strategy and conduct an audit at the senior management review meeting. In case of product application and quality related problems, corresponding business representatives are responsible for handling related issues and launching internal response, improvement and tracking platform.	Comply with the best-practice principles, no discrepancy
(6) Does the company have a supplier management policy that requires suppliers to follow relevant specifications and their implementation in environmental protection, occupational safety and health, labor rights and other issues?	Yes		In order to ensure that the requirements and spirit of CSR are implemented to our supplier partners, our suppliers need to regularly sign the "integrity commitment letter", "environment, occupation, safety, health status questionnaire", "industry code commitment letter", "green products and environmental protection statement" and "non conflict financial statement" to enable suppliers to follow the CSR scope. In addition, relevant organizations and units of the company regularly evaluate suppliers to ensure that suppliers can meet the medium and long-term development plan of the company, comply with relevant international standards, and maintain long-term high-quality partnership	Comply with the best-practice principles, no discrepancy

				Discrepancy with
	Operation Status (Note 1)			best-practice
Assessment items				principles of
	Yes	No	Summary (Note 2)	TWSE/GTSM listed
				companies

5. Does the company prepare corporate social responsibility reports and other reports that disclose the company's non-financial information in accordance with the international reporting standards or guidelines? Is the disclosure report confirmed or guaranteed by a third party certification unit?	Yes		Since 2009, the company has issued corporate social responsibility report. In order to fully disclose the practices and achievements in corporate social welfare, corporate operation management and environmental safety and health, we have compiled the report in accordance with the guidelines for global sustainable development report (GRI) and AA1000 norms over the years. Since 2017, we have followed the new version of GRI Standards based on the latest published standards as the basis for continuous improvement of the three aspects of social responsibility. All the data disclosed in the report are in accordance with the corresponding management system specifications, of which the financial related results are calculated in NTD and verified by the accountant; theSince 2009, the company has issued corporate social responsibility report. In order to fully disclose the practices and achievements in corporate social welfare, corporate operation management and environmental safety and health, we have compiled the report in accordance with the guidelines for global sustainable development report (GRI) and AA1000 norms over the years. Since 2017, we have followed the new version of GRI Standards based on the latest published standards as the basis for continuous improvement of the three aspects of social responsibility. environment, safety and health management system is subject to the external audit of ISO 14001 and OHSAS 18001 in addition to the regular internal audit. The greenhouse gas emission data is calculated by using the coefficients used in the "greenhouse gas emission coefficient management table (version 6.0.3)" provided by the Environmental Protection Agency, while the carbon dioxide emission data of the product carbon footprint is obtained by using the coefficients and calculation rulesprovided bythe DoITPro: 2013 database of the Institute of Industrial Technology.	Comply with the best-practice principles, no discrepancy
6. If a company has its own corporate social responsibility code in accordance with the code of practice for corporate social responsibility of listed and OTC companies, please state the difference between its operation and the code`：` The company prepares a corporate social responsibility report every year. The report content and related operations are consistent with the corporate social responsibility code of practice for listed and OTC companies,and there is no significant difference. It has been disclosed at thepublic information observatoryand the companywebsite. Please refer to the companywebsite.
7. Other important information to understand the operation of CSR`：` For information about corporate social responsibility of the company and its subsidiaries, such as corporate governance, environmental safety and health, and social welfare, please refer to the companywebsite.

Note 1: If "yes" is checked in the operation, please indicate the important policies, strategies, measures and implementation; if "no" is checked in the operation, please explain the reasons and explain the plans for adopting relevant policies, strategies and measures in the future. Note 2: If the company has prepared the CSR report, the summary may indicate the way of consulting the CSR report and substitutedby the index page numbers.

Note 3: Materiality principle refers to those issues related to environment, society and corporate governance that have a significant impact on the company's investors and other stakeholders.

Systems and practices adopted for social responsibility The CSR policies launched by the company are as follows:
Combine internal and external resources to launch various corporate social philanthropy activities.
Uphold shareholder rights, implement each corporate governance requirement.
Maintain the Earth’s sustainability; implement environment safety & health procedures.
Form promotional organizations and give them the respective resources to reach CSR goals.
Continue to strengthen promotional functions in accordance with domestic and international CSR-related laws and regulations.

Besides investment of company resources, the implementation of the above policies also depends on the care and effort invested by all employees to ensure the effective promotion of the above policies. A Corporate Social Responsibility Management Committee has been established internally by the company to promote various CSR matters, adhere to laws and regulations, uphold shareholder rights and organize upstream and downstream companies to jointly provide resources to create a harmonious and content society.

The company’s volunteer club has been established for three years now. Adopting the motto of ‘everyone join in for charity and philanthropy, do your part to show that you care’, the club is involved in community concern and year-end loving care donation activities such as nursing home pit barbecue family recreation activities and the Taoyuan spring beach cleaning activity, Refer to company website for more information about these activities. Http://www.txccorp.com/

Corporate social responsibility organization structure

==> picture [521 x 353] intentionally omitted <==

4. Fulfillment of social responsibility

Major activities sponsored by the company

December 31, 2020

4. Fulfillment of social responsibility Major activities sponsored by the company	4. Fulfillment of social responsibility Major activities sponsored by the company	4. Fulfillment of social responsibility Major activities sponsored by the company	4. Fulfillment of social responsibility Major activities sponsored by the company
(included TXC Foundation) December31,2020
Item	Activitytheme	Date	Donee / Cooperatingorganization
A	Community participation, social contribution, service and charity
1	Caring for the children in the hospital, donations for bursaries and dailynecessities	2020/01	Hong-hua Children's Care Center, Yongguang,Yongan,and YongfengVil.
2	"Fun Festival, Enjoy the Food, Help Children Be Happier" FundraisingActivities	2020/05	Andrew Charity Association
3	Public welfare activities of TXC Corp.	2020/06	Holy Love Nursing Home, Longtan Correctional Home Yongguang,
4	Food classification and packaging parent-child education	2020/07	Andrew Charity Association
5	Zhongyuan Purdue Material Donation	2020/09	Lohas Nursery School, Holy Love Nursing Home, Longtan Correctional Home Yongguang, Yongan, and Yongfeng Vil.
6	Corporate Volunteer Day	2020/12	GRAPE KING BIO visit
B	Consumer rights: TXC ’s business model is B2B-oriented. In order to protect the rights and interests of corporate customers, TXC holds a “Customer Satisfaction Survey” every year, reviews customers feedback and responds to their opinions appropriately and effectively. The information obtained from the satisfaction survey has also become one of the references for the company's business performance in the coming year. Our company's products are electronic components, and even if they fail, they will not cause personal injury to the users. However, in order to make the consumers confident of our products, the company still purchases full "product liability insurance" to show that we take the full responsibility of oir products. When our product fails for some reason, we conduct failure analysis and root cause judgment, the company will also resolve the failure problem in accordance with the principle of good faith and the requirements of the contract signed with the customer. We honestly and responsibly perform the warrantyor offer compensation when necessary.
C	Safeguard employees' rights and implement safety and health measures: Refer to the annual report.

Major sponsorships and activities of subsidiaries (Ningbo and Chongqing plants)

			December31,2020
Item	Activitytheme	Date	Donee / Cooperatingorganization
A	Environmentalprotection
1	Annual exhaust emission source testing (NGB)	2020/03	Pony Testing International Group ShanghaiCo.Ltd.
2	Quarterly unorganized exhaust gas inspection (NGB)	2020/03	Zhejiang Zhongtong Testing Technology Co.,Ltd.
3	Monthly wastewater quality testing (NGB)	2020/01-12	Zhejiang Zhongtong Testing Technology Co.,Ltd.
4	Soil testing (NGB)	2020/10	Zhejiang Zhongtong Testing Technology Co.,Ltd.
5	Rain and sewage pipeline rectification (NGB)	2020/03	Ningbo Bangtai Construction Engineering Co.,Ltd.
6	Vertical scrubber replacement (NGB)	2020/11	Zhejiang Shangpin Mechanical and Electrical EngineeringCo.,Ltd.
7	Wastewater station maintenance, mixer replacement (NGB)	2020/11	Suzhou Dengfeng Environmental EngineeringCo.,Ltd.
8	Waste alcohol and IPA combustion recovery heat energy utilization(CKG)	2020/06	Zhejiang Shangpin Mechanical and Electrical EngineeringCo.,Ltd.

9	Annual boiler and generator exhaust emission source inspection(CKG)	2020/07	Chongqing Huatest Testing Technology Co.,Ltd.
10	Grinding oil interception wastewater tank sedimentation tank sludge removal (CKG)	2020/10	Chongqing Pinge Mechanical and Electrical Installation Engineering Co., Ltd.
11	Removal and transportation of sludge in the sedimentation tank of the ground oil interception wastewater tank`（`CKG`）`	2020/06	Chongqing Junquan Water Treatment Equipment Co., Ltd.
12	Rectification of the pipeline of the medicine adding machine in the wastewater treatment station and replacement of the filler in the inclined pipe of the sedimentation tank(CKG)	2020/06	Toyo Boiler Installation and Maintenance Co., Ltd.
13	Waste exhaust thin strip tower and Lasi ring cleaning (CKG)	2020/11	Chongqing Jiulongpo District Environmental Protection Bureau
14	Cleaning of water boiler and furnace in production area(CKG)	2020/10	Chongqing Weizhong Testing Technology Co.,Ltd.
15	Waste exhaust thin strip tower and Lasi ring cleaning (CKG)	2020/01-12	Chongqing Weizhong Testing Technology Co.,Ltd.
B	Environmental inspection for renewal of soiled material disposalpermit (CKG)
1	Employee Hospitalized Medical Mutual Assistance Guarantee Program(NGB)	2020/06	Beilun District Federation of Trade Unions
2	Formation of Taijing Volunteer Team (NGB)	2020/08	Dagang community
3	Dagang Community Blood Donation Campaign (NGB)	2020/09	Dagangcommunity
4	COVID_19 pneumonia epidemic information exchange (CKG)	2020/02	High-tech Zone Electronic Information IndustryAlliance
5	Donation to outstanding students of Xinfeng Experimental School(CKG)	2020/04	High-tech Zone Electronic Information IndustryAlliance
6	New Life-"Ingenuity" Leather Goods Making (CKG)	2020/04	High-tech Zone Electronic Information IndustryAlliance
7	"Common War on the Epidemic, Spring and the Earth" Blood Donation Event(CKG)	2020/05	High-tech Zone Electronic Information IndustryAlliance
8	Normal operation of regional 1492 bus lines (CKG)	2020/09	High-tech Zone Electronic Information IndustryAlliance
9	Improvement of regional traffic congestion (CKG)	2020/09	High-tech Zone Electronic Information IndustryAlliance
10	New Life-"Lewei Model" Garbage Classification (CKG)	2020/10	High-tech Zone Electronic Information IndustryAlliance
11	"Heroes, Alliance Glory" E-sports Competition (CKG)	2020/11	High-tech Zone Electronic Information IndustryAlliance
C	Consumer rights: None
D	Implement safetyand health measures
1	Plant drinking water quality inspection (once every two months, once a year for all drinking water points in theplant) (NGB)	2020/10	Pony Testing International Group Shanghai Co. Ltd.
2	Plant drinking water quality inspection (once every two months, once a year for all drinking water points in theplant) (CKG)	2020/05`、`11	Hengyi Kitchenware Accessories Shop, Xiaogang, Beilun District, Ningbo City
3	Hengyi Kitchenware Accessories Shop, Xiaogang, Beilun District, Ningbo City	2020/11	Pony Testing International Group Shanghai Co. Ltd.
4	Annual oil fume emission concentration test (NGB) in the canteen & Xiaochao area	2020/11	Pony Testing International Group Shanghai Co. Ltd.
5	Assessment of the status quo of occupational hazards in the workplace (including the simultaneous completion of environmental testingof hazardous factors in the	2020/07	Zhejiang Duopu Testing Technology Co., Ltd.

	workplace) (NGB)
6	Septic tank cleaning in the plant area (NGB)	2020/07	Xinqi Xinnuo Cleaning Service Department, Beilun District, Ningbo City
7	Canteen oil fume pipe cleaning (CKG)	2020/03	Chongqing Benniu Environmental Service Co.,Ltd.
8	Annual Canteen Tableware Hygiene Inspection (CKG)	2020/07	Pony Testing International Group Shanghai Co. Ltd.
9	Workplace occupational health and safety evaluation and report (combined with the expansion and occupational evaluation report) (CKG)	2020/11	Chongqing Chemical Research Institute Safety Technology Service Co., Ltd.
10	Plant drinking water quality inspection (once every two months, once a year for all drinking water points in theplant) (CKG)	2020/06	Chongqing Qingze Water Quality Testing Co., Ltd.
E	Uphold employee rights
1	Labor-management meeting (CKG)	2020/12	TXC (Ningbo) Union
2	Workers’ Congress (NGB)	2020/07	TXC (Chongqing) Union

(VI) Implementation of Ethical Corporate Management and variations with management principles of publicly-listed companies and reasons

The company's "integrity operation code" has been adopted by the board of directors and submitted to the general meeting of shareholders on June 19, 2013 and the "integrity operation procedure and code of conduct" adopted by the board of directors on April 24, 2017. Meanwhile, the "internal control system and internal audit implementation rules for integrity" have been formulated, which will be included in the actual audit project. The company will follow this "code of conduct for integrity" in the future. In order to improve the effect of the company's integrity operation, and to implement the integrity operation principle more effectively, the company shall establish an integrity operation corporate culture and sound development, pay attention to the development of relevant domestic and foreign integrity operation norms at any time, and encourage directors, independent directors, managers and employees to put forward suggestions, so as to review and improve the integrity operation rules formulated by the company, and at the end of each year the company's performance of corporate social responsibility shall be reported to the board of directors.

1. Performance of integrity operation and the difference between integrity operation rules of listed and OTC companies and the reasons

				Discrepancy with
			Operation Status (Note 1)
				best-practice principles
Assessment items				of TWSE/GTSM listed
		No
	Yes		Summary	companies

1. Establish integrity business policies and plans
(1) Does the company have an integrity operation policy approved by the board of directors, and clearly state the integrity operation policy and practice in the regulations and external documents, as well as the commitment of the board of directors and senior management to actively implement the operation policy?	Yes		The "code of integrity" adopted by the board of directors and the "code of conduct" handbook in both Chinese and English are adopted by the company. Therefore, all colleagues and board members of the company and its subsidiaries have understood the relevant codes and need to sign the "Declaration of responsibility" attached to the handbook to ensure that all colleagues have "received", "read" and "understood" "Accept" and agree to "maintain" all contents of this handbook as the principle for all colleagues to carry out business, and report the operation and implementation of integrity to the board of directors at least once a year and publish it on the company's website	Comply with the best-practice principles, no discrepancy
(2) Does the company establish an evaluation mechanism for the risk of dishonest behavior, regularly analyze and evaluate the business activities with high dishonest behavior risk within the business scope, and formulate a plan for preventing dishonest behavior based on it, and at least cover the preventive measures for the behaviors in Article 7, paragraph 2, of the code of honest operation for listed and OTC companies?	Yes		The company has formulated a risk assessment mechanism for dishonest behavior, and set out in the business code of corporate integrity the preventive measures for dishonest behavior: 1. Offering and receiving bribes; 2. Providing illegal political contributions; 3. Improper charitable donation or sponsorship; 4. Providing or receiving unreasonable gifts, hospitality or other improper benefits 5. Infringement of business secrets, trademark rights, and patent rights, copyright and other intellectual property rights 6. Engaging in unfair competitive behavior 7. Directly or indirectly damaging the rights and interests, health and safety of consumers or other interested parties when products and services are used in R & D, procurement, manufacturing, supply or sale. In the "information security management measures", "confidential document management measures" and "employment contract", preventive measures are formulated to protect business secrets. The companyregularlyanalyzes and evaluates the business activities with high risk of dishonest	Comply with the best-practice principles, no discrepancy

				Discrepancy with
	Operation Status (Note 1)
				best-practice principles
Assessment items				of TWSE/GTSM listed
		No
	Yes		Summary	companies

			conduct within the business scope, and in 2020, 15 sessions of publicity courses and 26 platform publicity articles were held for the current directors, managers and employees. The contents of the courses include laws and regulations on prevention of insider trading, maintenance of business secrets, intellectual property rights and other legal knowledge. The course briefs were placed in the internal staff education and training system to provide references for those who did not attend on that dayand abide bythe work related business when necessary.
(3) Does the company specify operating procedures, conduct guidelines, disciplinary and grievance systems for violations in the prevention of dishonest conduct plan, implement them, and regularly review and amend the aforementioned scheme?	Yes		The company and its subsidiaries have "guidelines for integrity operation procedures and conduct" and "code of ethical conduct", which encourage employees to report to the board of directors, managers, internal audit directors or other appropriate personnel when they suspect or find any violation of laws, regulations or code of ethical conduct. In order to encourage employees to report violations, the company has established relevant procedures or mechanisms, and let employees know that the company will do its best to protect the safety of the informant from being revenged. In addition, when a director or manager violates the code of ethical conduct, the company shall deal with it in accordance with the disciplinary measures set by the director or manager in the code of ethical conduct, and immediately disclose the information such as the title, name, date of violation, cause of violation, violation and treatment of the person who violates the code of ethical conduct at the public information observatory. The company submits the implementation of honest operation to the board of directors every year, and regularly reviews and revises the previous disclosure scheme to meet the needs of the times. Please refer to the company website.	Comply with the best-practice principles, no discrepancy
2. Implement integrity operation
(1) Does the company assess the integrity records of its counterparties and specify the integrity terms in the contracts it enters into with them?	Yes		The company and its subsidiaries will conduct credit rating on the suppliers and customers of the cooperation, and require the suppliers to sign a letter of commitment of integrity to fulfill the contract of business activities in a fair and ethical manner and in strict accordance with relevant laws, regulations and contract terms. In case of dishonesty, the contract may be terminated or terminatedprovisions of the contract at anytime.	Comply with the best-practice principles, no discrepancy
(2) Does the company set up a dedicated unit under the board of directors to promote the integrity operation of the enterprise, and regularly (at least once a year) report to the board of directors its integrity operation policies, plans to prevent dishonest behavior and supervision of implementation?	Yes		In order to implement and improve the management of the company and its subsidiaries, the management center is the special unit responsible for the integrity management. The top director of the center is responsible for the formulation and implementation of the integrity management policy and prevention plan, and the audit unit is responsible for the supervision. At the end of each year, the company shall regularly report to the board of directors on the implementation of the above-mentioned integrity operation, and report to the board of directors on December 29, 2020. Please refer to the website of the company. In order to practice the integrity management policy, the new employees shall specify the company's relevant specifications and honest moral requirements when they report to the company, and the moral requirements shall be stated in the employment contract. At the same time,in the	Comply with the best-practice principles, no discrepancy

				Discrepancy with
	Operation Status (Note 1)
				best-practice principles
Assessment items				of TWSE/GTSM listed
		No
	Yes		Summary	companies

			regular department meetings, economic management meetings and lectures, the company continued to publicize the corporate integrity policy and elaborated the importance of integrity management. In 2020, 68 publicity and training sessions were held, for a total of 3,838 person/times. Directors and senior management have signed the "statement of compliance with integrity management policy". Please refer to the companywebsite for the implementation of the integrityoperation.
(3) Does the company have a conflict of interest prevention policy, provide appropriate presentation channels and implement them?	Yes		The company and its subsidiaries have established "code of practice for corporate governance", "code of integrity operation", "code of conduct", "Article 15 of the code of procedure of the board of directors", "code of conduct" and "code of integrity operation procedure and code of conduct". In case of any conflict of interest, the company and its subsidiaries shall also avoid the matters that need to be avoided. If a director, supervisor or manager violates the code of ethical conduct, the company shall deal with it in accordance with the disciplinary measures set out in the employee reward and punishment management measures, and disclose the date, cause, code and handling situation of the violation of the code of ethical conduct at the public information observatory in a timely manner. The company has established a special area for stakeholders, and has established "procedures for handling suggestions, doubts, disputes and litigation of stakeholders". See the company website. If any of our colleagues is involved in any illegal circumstances in the trading process, they can be informed by the honest and fair trading mailbox. We shall be fully responsible for confidentiality and investigate and deal with accordingto law.	Comply with the best-practice principles, no discrepancy
(4) Has the company established an effective accounting system and internal control system for the implementation of integrity operation, and the internal audit unit shall, according to the assessment results of the risk of dishonest behavior, draw up relevant audit plans, and according to the compliance of the plan for preventing dishonest behavior, or entrust an accountant to carryout the audit?	Yes		The company and its subsidiaries shall establish an "internal control system" and an audit office and an external accountant audit mechanism. The audit office shall regularly assess risks and draw up an audit plan, and carry out relevant audits in accordance with the plan to ensure the continuous and effective implementation of the internal control system. Report the audit results to the audit committee and the board of directors on a regular basis. There has been no corruption in the company over the years.	Comply with the best-practice principles, no discrepancy
(5) Does the company regularly conduct internal and external education and training for integrity operation?	Yes		The company and its subsidiaries, when each new comer joined the company, provided education and training to remind the colleague of the need to implement the code of conduct, and held education and training of the code of ethics from time to time for the colleague of the company. There were 68 publicity and training sessions in 2020, for a total of 3,838 person/times, to ensure that the colleague did implement and would not be unfamiliar with the relevant content due to time elapsing.	Comply with the best-practice principles, no discrepancy
3. Operation of the company's whistleblowingsystem

				Discrepancy with
	Operation Status (Note 1)
				best-practice principles
Assessment items				of TWSE/GTSM listed
		No
	Yes		Summary	companies

(1) Does the company have a specific reporting and reward system, establish a convenient reporting channel, and assign appropriate personnel to the reported object?	Yes		Integrity is one of the core corporate cultures of the company. It is based on the belief of integrity and honesty when the company and its subsidiary's related enterprises conduct transactions with their partners, and on the basis of transparency and fairness, in order to establish a long-term partnership. For this purpose, the company has set up a special interest area, and has formulated measures for handling cases of illegal, unethical or dishonest conduct. Please refer to the company website. If any of our colleagues is involved in any illegal circumstances in the course of trading, they may be informed by the mailbox of the stakeholding area. We shall be fully responsible for confidentiality and investigate and deal with according to law. In addition, a barrier free e-mail communication channel is set up on the company's website. All interested parties can communicate and appeal to the independent director, chairman and general manager of the company by e-mail at any time, so as to keep the communication and appeal channels with all interested parties unblocked.	Comply with the best-practice principles, no discrepancy
(2) Does the company establish the standard operating procedures for investigation of reported matters, follow-up measures to be taken after investigation and relevant confidentiality mechanisms?	Yes		The company and its subsidiaries have formulated the "social responsibility handbook", "employee handbook", "employee complaint (complaint/report) control procedure", "measures for handling reporting of illegal and unethical or dishonest cases" and "Regulations for employees to participate in industrial safety and health consultation, communication operation specifications" and other reporting, investigation, confidentiality mechanisms and follow-up related measures.	Comply with the best-practice principles, no discrepancy
(3) Does the company take measures to protect whistleblowers from improper handling due to whistleblowing?	Yes		The company and its subsidiaries have clearly defined "employee code of conduct" and "employee complaint (complaint/report) control procedure" documents: during the whole process of complaint/report handling, relevant personnel shall keep secrets, and those who divulge secrets will be punished in accordance with relevant regulations; those who retaliate against the Complainant/whistleblower will bepunished in accordance with relevant regulations.	Comply with the best-practice principles, no discrepancy
4. Enhance information disclosure Does the company disclose the content and promotion effect of its code of conduct for integrity operation on its website and public information observatory?	Yes		The websites of the company and its subsidiaries provide explanations in Chinese, English and Japanese simultaneously. For financial information, stock price and dividend information, organizational structure and business results related to corporate governance, they are fully disclosed in the quarterly report, annual report and the company webpage, so as to quickly and truly reflect all kinds of business information, so as to enable stakeholders to grasp the company's business dynamics in a timely manner. For details of corporate governance, please refer to the companywebsite.	Comply with the best-practice principles, no discrepancy
5. If a company has its own code of conduct for integrity in accordance with the code of conduct for listed and OTC companies, please state the difference between its operation and the code: The company and its subsidiaries have formulated the "code of integrity operation" to continue to promote and cooperate with various publicity and guidance in accordance with the code, and to strengthen the awareness of business level colleagues. Its content and related operations are not significantly different from the "code of integrity operation on the listed and OTC market".

If a company has its own code of conduct for integrity in accordance with the code of conduct for listed and OTC companies, please state the difference between its operation and the code: The company and its subsidiaries have formulated the "code of integrity operation" to continue to promote and cooperate with various publicity and guidance in accordance with the code, and to strengthen the awareness of business level colleagues. Its content and related operations are not significantly different from the "code of integrity operation on the listed and OTC market".

				Discrepancy with
	Operation Status (Note 1)
				best-practice principles
Assessment items				of TWSE/GTSM listed
		No
	Yes		Summary	companies

6. Other important information helpful to understand the company's operation integrity: (such as the company's review and amendment of the integrity operation rules, etc.) The company and its subsidiaries negotiate and perform the contract with customers in good faith and integrity, and strive for, negotiate and perform all contracts in a fair and moral way.

(7) Disclose the inquiry methods if the company has established a Corporate Governance Code of Conduct and other relevant regulations
1. In order to establish sound corporate governance, the company’s board of directors have approved the drafting of the Code of Ethical Conduct and Corporate Governance Best Practice Principles and continue to draft more concrete and detailed regulations and procedures such as Related Party Transaction Management, Specific Company, Related Party and Group Company Transaction Procedure, Scope of Independent Director Duties and Responsibilities, Subsidiary Supervision Procedure, Procedure Governing Financial and Business Matters with Affiliated Enterprises, Risk Control Procedure, Important Internal Information Handling Procedure, Procedure for Handling Stakeholder Recommendations, Questions, Disputes and Litigation Matters, Procedure for Handling the Reporting Cases of Illegal, Unethical or Dishonest Conduct as well as the TXC Code of Conduct, Ethical Corporate Governance Best Practice Principles and Ethical Corporate Management Procedures and Guide of Good Conduct. In addition to their regular announcement, the company also posts this information for public access on the company website to regulate the conduct and ethics of company directors and all subordinate personnel. An ethical management section has been set up on the company website to provide full disclosure and complete explanations of ethical management policy implementation and the drafting and promotion of subsequent preventative programs. The company website also has a dedication section on social responsibility. Refer to the information provided on the company website. The company’s Ningbo and Chongqing plants have established ethical corporate management code best practice principles and continue to draft more concrete and detailed regulations and procedures such as Related Party, Specific Company and Group Company Transaction Procedure, Board of Directors Agenda Procedure, Business Ethics Control Procedure, Subsidiary Operation Management Procedure, Debt Commitment and Contingency Management Procedure, Financial and Non-Financial Information Management Procedure, Derivative Financial Product Transaction Handling Procedure and regular announce this information to regulate the conduct and ethics of company directors and all subordinate personnel.
2. With regard to the announcement of related insider stock transactions, regular education courses are organized for directors and the announcements of competent authorities are posted on the company website for reference by insiders. Refer to the information on the company website.
The Corporate Social Responsibility Best Practice Principles drafted by the company has been approved by the board of directors. The principles are directed at the overall operation activities of the company and group companies including the active fulfillment of corporate social responsibility while performing company operations to conform to the international trends of balancing environmental, social and corporate governance developments and use corporate civic commitment to raise national economic contribution, improve the living quality of employees, communities and society to create competitive advantage based on corporate responsibility. Refer to the company website for information on CSR policy, organization, promotion and results.
```
 - The subsidiary Ningbo and Chongqing plants have drafted Social Responsibility Manuals. The manual is directed at the overall operation activities of the company including the active fulfillment of corporate social responsibility while performing company operations to conform to the international trends of balancing environmental, social and corporate governance developments and use corporate civic commitment to raise national economic contribution, and improve the living
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quality of employees, communities and society to create competitive advantage based on corporate responsibility.

(8) Other important information which is sufficient to understand corporate governance operation status must also be disclosed
Refer to the information in the company website for company director candidate nomination system, director and independent director nomination and selection method, nomination process, candidate information (conformance with qualification criteria), election process and election results.
In order to improve corporate governance, the company communicates with its CPA, independent directors, audit supervisor and accounting supervisors on an ad hoc basis. Refer to the information in the company website for status of communication.
In order to strengthen corporate governance, the company pays special attention to open disclosure of information and posts related financial information on the company website. Important information is concurrently disclosed on the company website and to company directors so related persons can clearly understand the operation status of the company and investors and stakeholders promptly receive important information from the company. Refer to the relevant information on the company website.
The effort invested and results obtained by the company in corporate governance and information disclosure has been widely recognized. The company has been awarded an A++ information disclosure assessment rating for four straight years, named a transparent voluntary information disclosure company for eight straight years, and has awarded the top 6% ~ 20% of the listed companies since the first session. From the 2[nd] to the 4[th] session, it has been won the top 5% of the listed companies for three consecutive years. The 5~6[th] sessions were awarded the top 6% ~ 20% of listed companies.

(IX) Statement on Internal Control

Public Company’s Statement on Internal Control

Represents the effectiveness of both the design and execution

(This statement is applicable when all laws and ordinances are complied herewith)

Where accountant was commissioned to perform ad hoc review on the internal control system, the accountant review report required to be disclosed: N/A.

(X) In the most recent years and as of the date of publication of the annual report, in case its employees were punished by law or punishments were imposed by the company due to employee's violation of the company's internal control rules, and in case such punishments may have great impacts on the owners' equity or the company's stock prices, the company should disclose the content of such punishments, the major misconduct, and improvements: None.
(XI) Important resolutions of the shareholders’ meeting and the Board of Directors during the most recent year and until the publication date of the annual report

Important resolutions of the board of directors

	Board
Date		Important resolution	Resolution result
	meeting

2020/03/23	Board meeting	1. Accountants' internal control evaluation opinions, the company's annual internal control effectiveness self-assessment report and internal control statement 2. 2019 report on the distribution of employees' compensation and directors' compensation 3. 2019 annual business report and financial statements 4. 2019 annual earnings distribution 5. Earnings Planning Project of Subsidiary Investment in Mainland China 6. Repatriation of Earnings from Overseas Companies 7. Extension of bank credit period and undertaking of derivative financial products 8. Review on the independence and performance appraisal of the accountant 9. Capacity expansion plan 10. Matters related to the regular shareholders meeting in 2020 11. At regular shareholders meetings, matters related to shareholders' proposal rights will be addressed 12. Removal of the prohibition and restriction of directors’ competition. 13. Re-enact the "Rules of Procedures for Shareholders' Meetings" of the company and annul the original "Rules of Procedures for Shareholders' Meetings" 14. The company's reinvestment in OO company shares	1. Passed by all attending directors without objection 2. Passed by all attending directors without objection 3. Passed by all attending directors without objection 4. Passed by all attending directors without objection Each share is issued NT2.5 cash dividends. 5. Passed by all attending directors without objection 6. Passed by all attending directors without objection 7. Passed by all attending directors without objection 8. Passed by all attending directors without objection, 9. Passed by all attending directors without objection 10. Passed by all attending directors without objection, and proposed to hold the annual shareholders meeting on Jun. 9, 2020. 11. Passed by all attending directors without objection 12. Passed by all attending directors without objection 13. Passed by all attending directors without objection 14. The chairman is authorized to execute within NTD 30 million and report its execution to the board of directors, and plans to establish an investment evaluation committee thisyear.
2020/05/07	Board meeting	1. Extension of bank credit period and undertaking of derivative financial products 2. Q1 / 2020 financial statements 3. To establish the `Investment Review Committee'' 4. Formulate the "Measures for Retirement and Dismissal of CompanyManagers"	1 Passed by all attending directors without objection 2 Passed by all attending directors without objection 3 In accordance with Article 3 of the Organizational Rules of the Investment Review Committee, the chairman nominates the four independent directors Yu, Shang-Wu, Tsai, Song-Qi, Su, Yan-Syue, Wang, Chuan –Fen as well as the three directors of Lin, Jin-Bao, Hsu, Hsing-Hao, and TLC Capital Co.,LTD Peng, Chih-Chiang .The members of the committee were approved by all the directors present without objection, and the independent director Su, Yan-Syue, was elected by the members as the convener. 4 Passed by all attending directors without objection
2020/07/13	Board meeting	1. Discussion of distribution of 2019 annual surplus and other related matters 2. Appointment of internal audit supervisor 3. Capacity expansion plan 4. Assignment of the first-tier supervisor	1 Passed by all attending directors without objection 2 Passed by all attending directors without objection 3 Passed by all attending directors without objection 4 Passed byall attendingdirectors without objection
2020/08/10	Board meeting	1. Extension of bank credit period and undertaking of derivative financial products 2. Q2 / 2020 financial statements 3. To donate to the TXC Foundation 4. SubsidiaryChongqing All Suns Company Limitedproject change and progress repor 5. Reviewed the distribution plan of employees' compensation and directors' compensation of fiscal year 2019	1. Passed by all attending directors without objection 2. Passed by all attending directors without objection 3. Passed by all attending directors without objection 4. Passed by all attending directors without objection 5. Passed by all attending directors without objection

	Board
Date		Important resolution	Resolution result
	meeting

2020/11/09	Board meeting	1. The case of repatriation of surplus of mainland investment company 2. Extension of bank credit period and undertaking of derivative financial products 3. Q3 / 2020 financial statements 4. 2020 Annual Budget Revision 5. Capacity expansion plan 6. Advanced technology process developmentplan	1 Passed by all attending directors without objection 2 Passed by all attending directors without objection 3 Passed by all attending directors without objection 4 Passed by all attending directors without objection 5 Passed by all attending directors without objection 6 Passed byall attendingdirectors without objection
2020/12/29	Board meeting	1. 2021 audit plan 2. Appointment on the Senior Executive 3. Discussion of 2020 annual performance bonus plan 4. 2021 annual employee compensation and directors' compensation ratio 5. 2021 annual business plan and annual budget 6. 2021 annual review on the accountant fee 7. Revision of the "Accountant Evaluation and Performance Appraisal Measures" 8. Revision of the "Code of Practice on Corporate Governance" 9. TXC’s subsidiary TXC (NINGBO) CORPORATION plans to establish a 100% subsidiary	1. Passed by all attending directors without objection 2. Passed by all attending directors without objection 3. Passed by all attending directors without objection 4. Passed by all attending directors without objection 5. Passed by all attending directors without objection 6. Passed by all attending directors without objection 7. Passed by all attending directors without objection 8. Passed by all attending directors without objection 9. Passed by all attending directors without objection
2021/03/11	Board meeting	1. Accountants' internal control evaluation opinions, the company's annual internal control effectiveness self-assessment report and internal control statement. 2. 2020 Employee Compensation and Director Compensation Distribution Report 3. undertaking of derivative financial products 4. Discussion of 2020 annual business report and financial statements 5. 2020 earnings distribution 6. Accountant's independence, performance evaluation 7. Capacity expansion plan 8. Review the manager's salary adjustment proposal 9. Review the company’s employee shareholding trust's incentive payment adjustment proposal 10. Matters related to the holding of the 2021regular shareholders meeting 11. At regular shareholders meetings, matters related to shareholders' proposal rights will be addressed. 12. Amendments to the "Rules of Procedures for Shareholders' Meetings" 13. Amendment to the "Procedures for the Acquisition or Disposal of Assets"	1 Passed by all attending directors without objection 2 Passed by all attending directors without objection 3 Passed by all attending directors without objection 4 Passed by all attending directors without objection 5 Passed by all attending directors without objection (NT3.8 cash dividends per share) 6 Passed by all attending directors without objection 7 Passed by all attending directors without objection 8 Passed by all attending directors without objection 9 Passed by all attending directors without objection 10 Passed by all attending directors without objection (to be held on May 31, 2021) 11 Passed by all attending directors without objection 12 Passed by all attending directors without objection 13 Passed by all attending directors without objection

2. Important Resolutions of the 2020 annual shareholders' meeting

Time: 9:30 am, June 9, 2020 (Tuesday)

Place: No. 4 Pingzhen Industrial Park 6[th] Rd., Pingzhen City, Taoyuan County

Implementation of major resolutions:

(1) Recognize 2019 business report and financial statement; resolution approved by the 2020 shareholders’ meeting.
(2) Recognize distribution of 2019 profits; 2020 shareholders’ general meeting, cash dividend of NT$2.5 per share, full amount issued on August 27, 2020 in accordance with the shareholders’ meeting resolution.
(3) Lifted the restriction of director's being prohibited from engaging in business that competes with the current company: Such restriction was lifted against board directors Peng, Chih-Chiang, Tsai, Song-Qi and Su, Yan-Syue
(4) Re-enact the "Rules of Procedures for Shareholders' Meetings" of the company and annul the original "Rules of Procedures for Shareholders' Meetings": The resolution of the 2020 shareholders' meeting was passed and announced on the company's website and public information observatory.

(XII) Main content of recorded or written statements of dissenting opinions filed by directors or supervisors in connection with important resolutions passed by the board of directors in recent years up to the publication date of the annual reports: None.
(XIII) Summary of company chairman, general manager, accounting supervisor, finance supervisor, internal audit supervisor and R&D supervisor resignations and dismissals in recent years up to the publication date of the annual report:

Title	Name	Resignation/ Conge Date	Reason
Internal Audit officer	Chiang, Pei-shan	2020/07/13	Job adjustment

V Information on CPA fees

(I) Change of Certified Public Accountant in 2020

Accounting Firm	Accountant’s Name	Accountant’s Name	Audit Period	Remark
Deloitte & Touche	Hsieh, Ming-Chung	Su, Yu-Hsiu	From Jan. 1, 2020 to December 31, 2020

Accountant fees for the year 2020 Unit ： NT$1,000

Items Range of Amount	Items Range of Amount	Auditing Fees	Non-Auditing Fees	Total
1	Less than NT$2,000,000		V
2	NT$2,000,000～NT$3,999,999	V		V
3	NT$4,000,000～NT$5,999,999
4	NT$6,000,000～NT$7,999,999
5	NT$8,000,000～NT$9,999,999
6	NT$10,000,000 and above

(1) If the non-auditing fees for the Certified Public Accountant and his/her firm and its affiliate(s) are more than one quarter of the auditing fees, the auditing and non-auditing fees amount and non-auditing services shall be disclosed.
(2) The Company’s non-auditing fees are discloed as follows:

Unit ： NT$1,000

Name of the Accounting Firm
				Non-auditing Fees
								Accountant’s
	Accountant	Auditin							Remark
	name	g fees	System	Business	Human	Other	Subtotal	audit period

			design	registration	resource	(Note 2)
Deloitte & Touche	Hsieh, Ming-Chung	3,280	0	2	0	253	255	From Jan. 1, 2020	Typing and printing NT$87,000, travel cost NT$161,000 and freight NT$5,000.
	Su, Yu-Hsiu							to December 31,2020

Note 1: If the company changes its accountant or accounting firm in the current year, please list their audit periods separately and explain the reasons for replacement in the “remark” field. Please disclose the auditing and non-auditing fees in sequence.

Note 2: Please list the non-auditing fees separately according to the service items. If the “others” non-auditing fees amount to 25% of the total non-auditing fees, its service content shall be listed in the remark field.

(II) The amount, ratio and reasons for the decrease in auditing fees shall be disclosed if there is a change in accounting firm and the auditing fees in the year of such change is less than the auditing fees in the previous year: None.

(III) The amount, ratio and reasons for the decrease in auditing fees shall be disclosed if the auditing fees was decrease by more than 15% comparing to that of in the previous year: Mainly due to the difference in the service fees of the group master file and the transfer pricing report from Deloitte & Touche.

VI. Information on change of accountant’s information:

(I) Regarding the former accountants

(I) Regarding the former accountants
Date of change

Reasons and explanations of change

Explanation whether it was the appointer or the	the parties situation	accountant	appointer
accountant who called for termination or
declined the appointment	Proactively terminate the appointment

	Declined (discontinued) the appointment
Any issuance of audit report with reserved
opinions within the past two years and the
reasons thereof.
	Y	Accountingtheprinciple orpractice
		Disclosure of financial statements
		Scope or steps of audit
Any different opinion with the issuer?
		Other

	N
	Explanation
Other disclosures (matters to be disclosed	None
pursuant to Sub-paragraph 1.4 to 1.7 Paragraph
6,Section 10 of the Guidelines)

(II) Regarding the new accountant

Name of the firm Accountant name Appointment date Pre-appointment consultations regarding the accounting treatment or accounting principles for specific transactions and opinions on the possible issuance of financial reports and the results thereof. Written opinions of new accountant stating different opinions to that of the previous accountants

(III) Former accountant’s reply to the matters stated in Sub-paragraph 1 and 2.3, Paragraph 6, Session 10 of the Guidelines: N/A

VII. Where the company’s chairman, general manager or any officer in charge of finance or accounting matters has in the most recent year held a position at the accounting firm of is CPA or at an affiliated enterprise of the accounting, the name and position of the person and the period during which the position was held, shall be disclosed: None.

VIII. Any transfer of shareholdings and changed equity pledge from the directors, managers and shareholder(s) holding more than 10% of the shares during the most recent year and as of the publication date of the annual report:

(I) Changes in equity among the directors, manager and large shareholder(s)

Title (Note1)	Name	2020	2020	As of April 2, 2021	As of April 2, 2021
		Increase (decrease) in number of shareholding	Increase (decrease) in number of pledged shares	Increase (decrease) in number of shareholding	Increase (decrease) in number of pledged shares
Chairman / CEO	Lin, Wan-Shing	50,000	0	0	0
Director	Lin, Jin-Bao	(45,000)	0	(19,000)	0
Director / DeputyCEO	Chen Chueh, Shang-Hsin	16,000	0	0	0
Director / President	Kuo, Ya-Ping	50,000	0	0	0
Director /Assistant Manager	Huang, Hsiang-Lin	(1,000,000)	(1,160,000)	0	(1,000,000)
Director	Hsu, Hsing-Hao	0	0	0	0
Corporate Director	TLC Capital Co., LTD	0	0	0	0
	Peng,Chih-Chiang	0	0	0	0
Independent Director	Yu, Shang-Wu	0	0	0	0
Independent Director	Tsai, Song-Qi	0	0	0	0
Independent Director	Su , Yan-Syue	0	0	0	0
Independent Director	Wang, Chuan -Fen	0	0	0	0
TXC(NGB) President	Chao, Min-Chiang	(10,000)	0	0	0
TXC(CKG) President	Chou, Chien-Fu	10,000	0	0	0
Vice President	Chang, Chien-Tsung	16,000	0	0	0
Executive Vice President	Yu, Fang-Ming	10,000	0	0	0
Vice President	Lin, Shi-Bo	0	0	0	0
Chief Technology Officer (CTO) / Vice President	Chu,Chih-Hsun	0	0	0	0
Vice President	Cheng, Li-Wei	0	0	0	0
Vice President	Kuo, Ya-Han	17,000	0	0	0
Vice President	Su, Jing-Sheng	18,000	0	0	0
Assistant Vice President	Lin, Su-Fen (note 2)	(23,000)	0	0	0
Assistant Vice President	Su, Che-Ming	20,000	0	0	0
Assistant Vice President	Liu, Hsu-Er	15,000	0	0	0
Chief Engineer	Chang, Qi-Zhon	0	0	0	0
Deputy CTO	Chiu,Chih-Hung	0	0	0	0
Deputy CTO	Pao,Shih-Yung	0	0	0	0
Assistant Vice President	Chen,Chiu-Lin (note 3)	0	0	0	0
Chief Financial Officer (CFO) / Vice President	Hong, Guan –Wen (note 2)	0	0	0	0

Note 1: The Company has no major shareholders holding more than 10% of the shares. Note 2: Associate vice president Ms. Lin, Su-fen of supply chain center and Ms. Hong, Guan-Wen of financial division were promoted to vice president on July 13, 2020. Note 3: Mr. Chen, Chiu-Lin is appointed as the assistant vice president of the administrator center on September 14, 2020.

(II) Equity transfer information: None.

(III) Information of the counterparty of an equity pledge who is also a related party: None.

IV. Information of relationships between TOP 10 shareholders are related parties:

April 2, 2021 Unit: shares

Name	Own held	shares	Shares held by spouse, children under twenty (20) years of age	Shares held by spouse, children under twenty (20) years of age	Shareholdin g in the name of others	Shareholdin g in the name of others	Where the relationship among the top 10 shareholders is a related party, spouse, and/or a relative by blood or marriage within second degree of kinship or relationship, please specify the name and relationship	Where the relationship among the top 10 shareholders is a related party, spouse, and/or a relative by blood or marriage within second degree of kinship or relationship, please specify the name and relationship
	number of shares	shareholding ratio	number of shares	shareholding ratio	number of shares	shareholding ratio	name	relationship
Labor Pension Fund Entrusted Nomura Investment Account for the first time in 2007	23,096,000	7.46%	0	0%	0	0%	None	None
Cathay Life Insurance Company, Ltd. proxy: HuangTiao-Kuei	15,660,000	5.06%	0	0%	0	0%	None	None
China Life Insurance Co., Ltd. proxy: Huang, Shu-Fen	9,480,000	3.06%	0	0%	0	0%	None	None
Chunghwa Post Co., Ltd. proxy: Wu,Hung-Mou	7,483,000	2.42%	0	0%	0	0%	None	None
Lin, Jin-Bao	6,007,263	1.94%	163	0%	0	0%	Lin, Wan-Shing	Brother
Labor Insurance Fund	5,996,000	1.94%	0	0%	0	0%	None	None
Lin, Wan-Shing	5,030,722	1.62%	103,991	0.03%	0	0%	Lin, Jin-Bao	Brother
Norges Bank Investment Account entrusted in Citibank Taiwan	4,972,032	1.61%	0	0%	0	0%	None	None
American JP Morgan Chase Bank Custodian JP Morgan Securities Co., Ltd. Investment Account	4,832,000	1.56%	0	0%	0	0%	None	None
Bank of Taiwan is entrusted with the trustee of the Sovereign Emerging Market Growth Fund as the Robermore Investment Account	4,344,443	1.40%	0	0%	0	0%	None	None

Note 1: The top ten shareholders shall be listed in full; corporate shareholder shall list its name and the names of its proxy separately.

Note 2: The calculation of the shareholding percentage refers to the percentage of shares held in his/her/its own name, or under the name of his/her/its spouse, children under twenty (20) years of age, or others.

Note 3: The relationship between above-listed juristic person shareholders and natural person shareholders shall be disclosed pursuant to the regulations governing the preparation of financial reports of the issuer.

Top 10 Shareholder	Major Shareholders of the Juristic Person
Cathay Life Insurance Company, Ltd. proxy:HuangTiao-Kuei	Cathay Financial Holding Co. Ltd. (100%)
China Life Insurance Co., Ltd. proxy: Huang, Shu-Fen	China Development Finance Holdings Co., Ltd. (26.16%); KGI Securities Co., Ltd. (8.66%); Lai Television Network Co., Ltd. (2.42%); New Labor Retirement Fund (1.72%); Cathay Pacific Life Insurance Co., Ltd. (1.63%); Fubon Life Insurance Co., Ltd. (1.27%); Zhan Linglang (1.24%); Citi (Taiwan) Commercial Bank is entrusted with the investment account of the Central Bank of Norway (1.23%); Labor Insurance Fund (1.08%); American JPMorgan Chase Bank Taipei Branch entrusted with the custody of the series of funds of the Advanced Star Fund Company Advanced Aggregate International Stock Index Fund Investment Account(1.06%)
Chunghwa Post Co., Ltd. proxy: Wu,Hung-Mou	Ministry of Transportation and Communications (100%)

The number of shares held by the company, the company’s directors, supervisors, managers, and businesses directly or indirectly controlled by the Company in the same joint venture, and the combined shareholding percentage.

December 31, 2020 Unit: shares, %

Investees	Investments of the Company	Investments of the Company	Investments of the directors, supervisors, managers and their investment in business which they have direct or indirect control of.	Investments of the directors, supervisors, managers and their investment in business which they have direct or indirect control of.	Comprehensive investements	Comprehensive investements
	Number of Shares	Share (%)	Number of Shares	Share (%)	Number of Shares	Share (%)
TAIWAN CRYSTAL TECHNOLOGY INTERNATIONAL LIMITED	42,835,294	100	0	0	42,835,294	100
TXC Technology Inc.	300,000	100	0	0	300,000	100
TXC Japan Corporation	2,100	100	0	0	2,100	100
Taiwan Crystal Technology International (HK)Linited	80,000	100	0	0	80,000	100
TXC Europe GmbH	50,000	100	0	0	50,000	100
TAI SHING ELECTRONICS COMPONENTS CORP.	8,435,000	31.95	3,203,500	12.13	11,352,500	44.08
TXC (NINGBO) CORPORATION	0	0	45,835,294	100	45,835,294	100
TXC (CHONGQING) CORPORATION	0	0	247,876,609	100	247,876,609	100
Chongqing All Suns Company Limited	0	0	150,000,000	100	150,000,000	100
Ningbo Jingyu Company Limited	0	0	2,500,000	100	2,500,000	100
NINGBO FREE TRADE ZONE DING KAI INVESTMENT MANAGEMENT COMPANY	0	0	35,050,000	100	35,050,000	100
ChongQing Dingsen Commercial Management Co.,Ltd	0	0	500,000	100	500,000	100
Ningbo Longying Semiconductor Co., Ltd	0	0	2,000,000	40	2,000,000	40

Note: Equity investments of the Company.

Chapter 4 Capital Overview

I. Capital and Shares

(I) Source of Capital

1. Capitalization

April 2, 2021 Unit: Shares, NT$


		Authorized Share Capital		Paid-In	Capital		Remark

							Capital
Year/							Increas
	Issue
Month							e by	Other
	Price
		Shares	Amount	Shares	Amount	Source of Capital	Assets	(Approval document

							Other	no.)
							Than
							Cash
1983.12	10	310,000	3,100,000	310,000	3,100,000	Registered capital	Nil	-
1984.03	10	3,315,200	33,152,000	3,315,200	33,152,000	Capital increase by cash	Nil	-
1989.03	10	8,500,000	85,000,000	8,500,000	85,000,000	Capital increase by cash	Nil	-
1989.10	10	18,000,000	180,000,000	18,000,000	180,000,000	Capital increase by cash	Nil	-
1990.07	10	21,060,000	210,600,000	21,060,000	210,600,000	Capital increase by cash, by capital surplus	Nil	07/10/1990 (79) Tai-Tsai-Cheng(1) no. 01530
1991.08	10	60,000,000	600,000,000	31,590,000	315,900,000	Capital increase by cash, by earnings, by capital surplus	Nil	08/01/1991 (80) Tai-Tsai-Cheng(1) no. 02111
1992.07	10	60,000,000	600,000,000	41,067,000	410,670,000	Capital increase by earnings, by capital surplus	Nil	07/07/1992 (81) Tai-Tsai-Cheng(1) no. 01518
1993.07	10	60,000,000	600,000,000	47,300,000	473,000,000	Capital increase by earnings	Nil	07/14/1993 (82) Tai-Tsai-Cheng(1) no. 30047
1994.07	10	60,000,000	600,000,000	51,557,000	515,570,000	Capital increase by earnings, by capital surplus	Nil	07/07/1994 (83) Tai-Tsai-Cheng(1) no. 31774
1995.06	10	60,000,000	600,000,000	55,681,560	556,815,600	Capital increase by earnings	Nil	06/22/1995 (84) Tai-Tsai-Cheng(1) no. 36958
1996.09	10	100,000,000	1,000,000,000	75,681,560	756,815,600	Capital increase by cash	Nil	09/05/1996 (85) Tai-Tsai-Cheng(1) no. 53631
2000.09	10	100,000,000	1,000,000,000	82,201,820	822,018,200	Capital increase by earnings	Nil	09/06/2000 (89) Tai-Tsai-Cheng(1) no.5237
2001.07	10	260,000,000	2,600,000,000	110,348,515	1,103,485,150	Capital increase by earnings	Nil	05/14/2001 (90) Tai-Tsai-Cheng(1) no. 129296
2001.08	10	260,000,000	2,600,000,000	120,348,515	1,203,485,150	Capital increase by cash	Nil	06/12/2001 (90) Tai-Tsai-Cheng(1) no.135132
2002.09	10	260,000,000	2,600,000,000	137,673,100	1,376,731,000	Capital increase by earnings, by capital increase	Nil	08/21/2002 (91) Tai-Tsai-Cheng(1) no. 0910146351
2003.08	10	260,000,000	2,600,000,000	144,140,534	1,441,405,340	Capital increase by earnings	Nil	08/12/2003 Tai-Tsai-Cheng(1) no. 0920136359
2004.08	10	260,000,000	2,600,000,000	151,810,534	1,518,105,340	Convertible bonds, exercise of employee stock options	Nil	08/18/2004 Ching-Shou-Shang-Zi no. 09301157450
2004.10	10	260,000,000	2,600,000,000	160,779,678	1,607,796,780	Capital increase by earnings	Nil	10/13/2004 Ching-Shou-Shang-Zi no.09301188710
2004.10	10	260,000,000	2,600,000,000	160,784,678	1,607,846,780	Convertible bonds	Nil	10/19/2004 Ching-Shou-Shang-Zi


		Authorized Share Capital		Paid-In	Capital		Remark

							Capital
Year/							Increas
	Issue
Month							e by	Other
	Price
		Shares	Amount	Shares	Amount	Source of Capital	Assets	(Approval document

							Other	no.)
							Than
							Cash
								no. 09301199790
2005.05	10	260,000,000	2,600,000,000	163,133,882	1,631,338,820	Convertible bonds	Nil	05/03/2005 Ching-Shou-Shang-Zi no. 09401077580
2005.07	10	260,000,000	2,600,000,000	168,068,138	1,680,681,380	Convertible bonds. exercise of employee stock options	Nil	07/25/2005 Ching-Shou-Shang-Zi no. 09401135020
2005.09	10	260,000,000	2,600,000,000	178,181,410	1,781,814,100	Capital increase by earnings	Nil	09/23/2005 Ching-Shou-Shang-Zi no. 09401185020
2005.10	10	260,000,000	2,600,000,000	181,557,883	1,815,578,830	Convertible bonds, exercise of employee stock options	Nil	10/20/2005 Ching-Shou-Shang-Zi no. 09401207340
2006.01	10	260,000,000	2,600,000,000	186,198,661	1,861,986,610	Convertible bonds, exercise of employee stock options	Nil	01/23/2006 Ching-Shou-Shang-Zi no. 09501010180
2006.03	10	260,000,000	2,600,000,000	188,908,827	1,889,088,270	Convertible bonds, exercise of employee stock options	Nil	04/17/2006 Ching-Shou-Shang-Zi no. 09501068450
2006.07	10	260,000,000	2,600,000,000	188,942,532	1,889,425,320	Convertible bonds	Nil	07/20/2006 Ching-Shou-Shang-Zi no. 09501152420
2006.09	10	300,000,000	3,000,000,000	203,711,768	2,037,117,680	Capital increase by earnings	Nil	09/04/2006 Ching-Shou-Shang-Zi no. 09501198120
2006.10	10	300,000,000	3,000,000,000	204,815,282	2,048,152,820	Convertible bonds, exercise of employee stock options	Nil	10/16/2006 Ching-Shou-Shang-Zi no.09501232600
2007.01	10	300,000,000	3,000,000,000	205,698,282	2,056,982,820	Exercise of employee stock options	Nil	01/16/2007 Ching-Shou-Shang-Zi no. 09601010470
2007.04	10	300,000,000	3,000,000,000	206,032,282	2,060,322,280	Exercise of employee stock options	Nil	04/14/2007 Ching-Shou-Shang-Zi no. 09601078450
2007.07	10	300,000,000	3,000,000,000	206,624,577	2,066,245,770	Convertible bonds	Nil	07/27/2007 Ching-Shou-Shang-Zi no. 09601180970
2007.08	10	300,000,000	3,000,000,000	230,7397,19	2,307,397,190	Capital increase by earnings	Nil	08/28/2007 Ching-Shou-Shang-Zi no.09601210120
2007.10	10	300,000,000	3,000,000,000	240,243,456	2,402,434,560	Convertible bonds	Nil	10/22/2007 Ching-Shou-Shang-Zi no. 09601258520
2008.01	10	300,000,000	3,000,000,000	241,552,590	2,415,525,900	Convertible bonds	Nil	01/29/2008 Ching-Shou-Shang-Zi no. 09701022010
2008.01	10	300,000,000	3,000,000,000	241,552,590	2,415,525,900	Convertible bonds	Nil	01/29/2008 Ching-Shou-Shang-Zi no. 09701022010
2008.04	10	300,000,000	3,000,000,000	241,627,148	2,416,271,480	Convertible bonds	Nil	04/11/2008 Ching-Shou-Shang-Zi no. 09701087040
2008.08	10	300,000,000	3,000,000,000	242,464,833	2,424,648,330	Convertible bonds	Nil	08/05/2008 Ching-Shou-Shang-Zi no.09701191720
2008.08	10	350,000,000	3,500,000,000	270,395,056	2,703,950,560	Capital increase by earnings	Nil	08/28/2008 Ching-Shou-Shang-Zi no. 09701819210
2008.11	10	350,000,000	3,500,000,000	271,698,090	2,716,980,900	convertible bonds	Nil	11/17/2008 Ching-Shou-Shang-Zi no. 09701293960
2009.09	10	400,000,000	4,000,000,000	287,312,523	2,873,125,230	Capital increase	Nil	09/11/2009


		Authorized Share Capital		Paid-In	Capital		Remark

							Capital
Year/							Increas
	Issue
Month							e by	Other
	Price
		Shares	Amount	Shares	Amount	Source of Capital	Assets	(Approval document

							Other	no.)
							Than
							Cash
						by earnings		Ching-Shou-Shang-Zi no. 0980120690
2009.11	10	400,000,000	4,000,000,000	287,340,930	2,873,409,300	Convertible bonds	Nil	11/11/2009 Ching-Shou-Shang-Zi no. 09801260380
2010.01	10	400,000,000	4,000,000,000	288,727,249	2,887,272,490	Convertible bonds	Nil	01/26/2010 Ching-Shou-Shang-Zi no. 09901016750
2010.04	10	400,000,000	4,000,000,000	290,907,037	2,909,070,370	Employee stock options and convertible bonds	Nil	04/21/2010 Ching-Shou-Shang-Zi no. 09901078530
2010.09	10	400,000,000	4,000,000,000	296,665,178	2,966,651,780	Capital increase by earnings	Nil	09/02/2010 Ching-Shou-Shang-Zi no.09901199850
2010.11	10	400,000,000	4,000,000,000	297,183,178	2,971,831,780	Employee stock options	Nil	11/18/2010 Ching-Shou-Shang-Zi no. 099001257750
2011.04	10	400,000,000	4,000,000,000	296,305,178	2,963,051,780	Employee stock options treasury stock retired	Nil	4/15/2011 Ching-Shou-Shang-Zi no. 100001075170
2011.07	10	400,000,000	4,000,000,000	296,316,207	2,963,162,070	Convertible bonds	Nil	7/26/2011 Ching-Shou-Shang-Zi no. 100001171400
2011.08	10	400,000,000	4,000,000,000	302,242,310	3,022,423,100	Capital increase by earnings	Nil	8/25/2011 Ching-Shou-Shang-Zi no.100001197910
2013.01	10	500,000,000	5,000,000,000	309,757,040	3,097,570,400	Employee stock options and convertible bonds	Nil	1/17/2013 Ching-Shou-Shang-Zi no.10201011600

2. Types of Stock

			April 2,2021Unit: Share	April 2,2021Unit: Share
		Authorized Share Capital		Remarks
Type of Stock
	Listed (Note)	Unlisted	Total

Common Stock	309,757,040	190,242,960	500,000,000

Note ︰ The above stocks are listed company stocks. Statistics from the April 2, 2021 book closure date.

Shelf Registration Related Information: N/A.

(II) Composition of Shareholders

April 2, 2021 Unit: Person/Share/%

			Other		Foreign
	Government	Financial				Total
No.\ Composition			Judicial	Individuals	Institutions and
	Agencise	Institutions				(Note)
			Persons		Individuals

No. of Shareholders	5	22	256	38,933	201	39,417
Shareholding	32,866,197	43,347,396	43,737,125	121,048,746	68,757,576	309,757,040
Shareholding Percentage	10.61%	13.99%	14.13%	39.08%	22.19%	100.00%

Note 1: The above share amount statistics are from the April 2, 2021 book closure date.

Note 2: TSWE primary listed, GTSM primary listed and emerging stock companies shall disclose Chinese capital shareholding percentages: N/A.

(III) Equity Dispersion

April 2, 2021 Unit: Share

Share types	Number of Shareholders	Shares	Shares％
1~999 1,000~5,000 5,001~10,000 10,001~15,000 15,001~20,000 20,001~30,000 30,001~50,000 50,001~100,000 100,001~200,000 200,001~400,000 400,001~600,000 600,001~800,000 800,001~1,000,000 1,000,001 above	17,057 18,770 1,822 549 334 244 228 173 89 57 26 13 9 46	1,181,950 34,176,439 14,265,941 7,039,575 6,232,889 6,211,648 9,267,441 12,504,148 12,418,785 15,995,737 12,996,272 8,820,731 8,242,681 160,402,803	0.38 11.03 4.61 2.27 2.01 2.01 2.99 4.04 4.01 5.16 4.20 2.85 2.66 51.78
Total	39,417	309,757,040	100.00

(IV) List of Major Shareholders

Name(s), amount and proportion of shares held by shareholder(s) with shareholding ratios that accounted for more than 5% of the equity ratio or accounted for the top ten shareholders:

April 2 2021 Unit: Person/Share/%	April 2 2021 Unit: Person/Share/%	April 2 2021 Unit: Person/Share/%
Shares Major Shareholders	Shares	Shares (%)
1`、` Labor Pension Fund Entrusted Nomura Investment Account for the first time in 2007 2`、` Cathay Life Insurance Company, Ltd. 3`、` China Life Insurance Co., Ltd. 4`、` Chunghwa Post Co., Ltd. 5`、` Lin, Jin-Bao 6、 Labor Insurance Fund 7`、` Lin, Wan-Shing 8`、` Norges Bank Investment Account entrusted in Citibank Taiwan 9`、` American JP Morgan Chase Bank Custodian JP Morgan Securities Co., Ltd. Investment Account 10`、` Bank of Taiwan is entrusted with the trustee of the Sovereign Emerging Market Growth Fund as the Robermore Investment Account	23,096,000 15,660,000 9,480,000 7,483,000 6,007,263 5,996,000 5,030,722 4,972,032 4,832,000 4,344,443	7.46% 5.06% 3.06% 2.42% 1.94% 1.94% 1.62% 1.61% 1.56% 1.40%

(V) Data on share price, net value, profit, and dividend of the past two years

Item	Year	Year	2019	2020
Marketprice / share (Note 1)	Highest		49.20	88.00
	Lowest		31.50	36.10
	Average		37.12	64.91
Net value per share (Note 2)	Before distribution		28.08	31.17
	After distribution		25.58	(Note 9)
Earnings Per Share	Weight average number of shares (1000’s share)		309,757	309,757
	Earnings Per Share (Note 3)	Before adjustment	2.17	4.61
		After adjustment	2.17	(Note 9)
Dividend Per share	Cash dividend		2.50	(Note 9)
	Stock dividend without compensation	Earningsper share	-	(Note 9)
		Stock dividend	-	(Note 9)
	Accrued undistributed dividend (Note 4)		-	(Note 9)
Analysis of rate of return	P/E (Note 5)		17.11	14.08
	P/C (Note 6)		14.85	(Note 9)
	C/P(Note 7)		6.74%	(Note 9)

＊ If use profits or capital reserve for raising capital shares appropriate, then it should announce the information of the number of appropriate shares and retroactivlye adjust market price and cash dividend.
Note 1 ： list the hightest and lowest price of the common stocks in that year, and the average market price for that year is calculated based on the transaction values and transaction amounts.
Note 2 ： Use the number of circulated shares at the end of the year as the base, then the dividend distributed determined in the coming year’s stockholders’ meeting.
Note 3 ： If there is any retroactive adjustment from the stock dividend without compensation, then it should list earning per share on before and after adjustment.
Note 4 ： If the equity investment has constraint that limits the undistributed dividend for that year and it is cumulated until to later profitable year. Then it should disclose the cumulative undistributed dividend up to that year.
Note 5 ： P/E ＝ current year average share price at closing ／ earning per share.
Note 6 ： P/C ＝ current year average share price at closing ／ cash dividend per share.
Note 7 ： C/P ＝ cash dividend per share ／ current year average share price.
Note 8 ︰ The financial statements of TXC Corporation were audited or view or certified by CPA.
Note 9 ︰ As of March 11, 2021, the retained earnings of 2020 has not yet admitted by the stockholders’ meeting.

(VI) Company’s dividend policy and its current implementation status

1. Dividend policy as defined in the articles of incorporation `：`

If the company generates annual profit, no less than 3% of that profit will be provided to employees as a bonus in the form of cash or company shares, as determined by the board of directors. Receipients of this bonus will include company employees who fulfill certain conditions. The company must apportion a directors’ bonus of no greater than 2% of posted profit figures, following the board of directors’ decision. Employee and director bonuses are announced at the general meeting of shareholders. However, the company shall retain a portion of funds prior to incurring losses, the amount beyond which will be distributed as bonuses according to the aforementioned proportion.

If there is a profit at the final settling of accounts after paying all taxes and offsetting of losses from previous years, the Company shall first set aside ten percent of the profits as legal reserve. This shall not apply when the legal reserve amounts to the total authorized capital. Director remuneration shall be no more than 2% and employee bonus shall be no lower than 3% of the special reserve allocated from the profits in accordance with the law or after reversal. The remainder together with undistributed earnings from previous periods after an appropriate amount is reserved depending on operating conditions is distributed as shareholder dividends as resolved by the shareholders' meeting. The board of directors is authorized to determine the counterparts for employee stock dividend distribution which include those company employees that conform to certain conditions.

The Company's dividend distribution policy is made in consideration of factors such as industry development being in a growth phase, long-term financial planning and shareholder cashflow requirements. Therefore, the earnings available for distribution for that year, after allocation of the legal reserve and special reserve in accordance with the law, shall be distributed as provided in the previous paragraph. Of this, the cash dividend portion of shareholder dividends shall not be lower than 20% of total dividends.

Specific dividend policy: Dividend payment over the years

		Stock dividend	Stock dividend			Cash dividend	Stock dividend
		Retained
	Cash			X/R	Shareholders’
Year		earnings	Capital surplus	i
	Dividend		fd	transactons	meeting date	payment date	payment date
		transferred to	transerre to	dt
			k	ae
		common stock	common stoc

1999	0	0.8	0	2000/09/14	2000/05/13	N/A	2000/11/16
2000	0	2.9	0	2001/06/05	2001/04/26	N/A	2001/07/31
2001	0.2	0.8	0.5	2002/09/12	2002/05/30	2002/10/17	2002/11/27
2002	0.10222	0.4089	0	2003/09/09	2003/06/16	2003/10/16	2003/11/11
2003	0.2999	0.499901	0	2004/09/13	2004/06/24	2004/10/15	2004/11/12
2004	0.480681	0.480681	0	2005/08/31	2005/06/13	2005/10/21	2005/10/21
2005	0.99982162	0.59989298	0	2006/08/09	2006/06/15	2006/09/20	2006/09/20
2006	1.94210210	0.97105104	0	2007/08/09	2007/06/13	2007/09/20	2007/09/20
2007	1.98486059	0.9924303	0	2008/08/12	2008/06/13	2008/09/18	2008/09/18
2008	2	0.5	0	2009/08/24	2009/06/16	2009/09/30	2009/09/30
2009	1.99640807	0.1996408	0	2010/08/12	2010/06/15	2010/09/21	2010/09/21
2010	2.49990694	0.19999253	0	2011/08/03	2011/06/10	2011/09/09	2011/09/09
2011	2.2	0	0	2012/08/20	2012/06/13	2012/09/13	N/A
2012	2.2	0	0	2013/08/19	2013/06/19	2013/09/17	N/A
2013	2.2	0	0	2014/08/17	2014/06/18	2014/09/05	N/A
2014	2.5	0	0	2015/08/20	2015/06/16	2015/09/18	N/A
2015	2.5	0	0	2016/08/11	2016/06/07	2016/09/13	N/A
2016	2.8	0	0	2017/08/15	2017/06/08	2017/09/15	N/A
2017	2.5	0	0	2018/08/15	2018/06/05	2018/09/18	N/A
2018	2.0	0	0	2019/08/15	2019/06/12	2019/09/11	N/A
2019	2.5	0	0	2020/07/30	2020/06/09	2020/08/27	N/A
2020	3.8	0	0	Undetermined	2021/05/31	Undetermined	N/A

Although the company's articles of association do not specify the distribution ratio of the dividends of the shareholders, the ratio of the distribution of the surplus of the preceding paragraph may be adjusted according to the relevant factors such as the actual pre-tax profit, capital budget and capital status of the year, and shall be handled after the resolution of the shareholders' meeting.

Estimated dividend distribution policy for the next three years

Employee bonus is 9%~12%
Directors' compensation is 1%~2%

The total dividend is based on more than 60% of the current year's profit (net of statutory surplus reserve) or not less than 30% of the total distributable surplus, and the cash dividend shall not be less than 20% of the total cash dividend and stock dividend.

2. Suggested dividend appropriate in this shareholders’ meeting `：`

Profit distribution for 2020

Unit ： NT$

	Amount	Amount
Item
	Sub-total	Sum

Beginning period undistributed profits	1,429,287,114 123,679,204 (56,547) (451,265)	1,678,401,450 1,552,458,506 (155,245,851) 177,611,100 __ 3,253,225,205 (1,177,076,752) ___ 2,076,148,453
Net profit after tax for this year Disposal of equity instruments at fair value through other comprehensive income. Total gain of disposal transferred from other equity to retained earnings Adjusted retained earnings from investments accounted for using equity method Remeasurement of defined employee benefit plans to retained earnings

The amount of undistributed profits Setting aside 10% legal reserve Revise the setting aside special reserve Profits available for distribution Distribution Item: Cash Dividends (NT$3.8 per share) End period of undistributed profits

Note: Allocation of 2020 undistributed profit shall be given priority for the above profit distribution.

Chairman: Peter Lin Manager: Kevin Kuo Accounting Supervisor: Hong Guan-wen

(VII) The effect of the shareholder's proposed stock grants on the Company's business performance and earnings per share: N/A (The Company did not offer stock grants this time).

(VII) Employee bonus and rewards for directors and auditors

The principle of surplus distribution in accordance with company regulations: If the company generates annual profit, no less than 3% of that profit will be provided to employees as a bonus in the form of cash or company shares, as determined by the board of directors. Receipients of this bonus will include company employees who fulfill certain conditions. The company must apportion a directors’ bonus of no greater than 2% of posted profit figures, following the board of directors’ decision. Employee and director bonuses are announced at the general meeting of shareholders. However, the company shall retain a portion of funds prior to incurring losses, the amount beyond which will be distributed as bonuses according to the aforementioned proportion.

Accountant procedures if a current period’s estimated employee dividend, the basis of director/supervisor bonus amounts and calculations for stock dividend figures differ from the amounts that are actually apportioned:
(1) The basis of estimating the current period’s estimated employee bonus and director/sup bonus figures: please see the aforementioned (VI).1. Stock dividend policy.
(2) The basis for calculating stock dividends apportions: if the company has not apportioned stock dividends during this period, please disregard.
(3) Accounting procedures if the current period’s actual apportioned value differs from the estimated figures: when a significant change occurs to the dividend value approved by the board of directors, which adjustment is due to annual expenses. If the figure remains changed by the day of the general meeting of shareholders, the matter will be processed according to the updated accounting estimate, and amounts transferred onto accounts according to general meeting of shareholder decision.
Proposal by the Board of Directors for surplus distribution in 2020: As proposed by the Board of Directors on March 11, 2021 surplus distribution for employee bonus and directors’ compensation are as follows:
(1) Propose to allocate employee bonus in cash amounting to NT$ 163,489,369 and directors’

compensation to NT$27,248,228. There is no difference between the planned allocation amount from expense for employee bonus and surplus in the 2020 financial statement. So, no adjustment for income and loss is required.

(2)Propose to allocate employee bonus and directors’ compensation in accordance with par value setting earnings per share at: NT$4.61.
The Company Board of Directors on surplus allocation in 2019: The actual surplus allocation of employee bonus and directors’ compensation is according to resolution adopted by the shareholders meeting on June 9, 2020.
(1) Actual employee bonus and directors’ compensation in cash are respectively: NT$71,552,151 and NT$11,925,359.
(2) No difference between the proposed allocation adopted by the Board of Directors and the resolution by shareholders meeting.

(IX) Buyback of Common Stock: None

II. Convertible Corporate Bond: None
III. Preferred Shares ： None
V. Issuance of Oversea Depositary Shares ： None
VI. Status of Employee Stock Option Plan ： None
VII. Status of Employee Restricted Stock ： None
VIII. Status of New Share Issuance in Connection with Mergers and Acquisitions: None

VIII. Financing Plans and Implementation: None

Chapter 5 Business Information

I. Business Contents

(I) Business Scope

(1). Major Business Contents

TXC is a professional frequency control component and sensory component manufacturer. Since the company’s founding in December, 1983, it has been devoted to research and development, design, production, and sale of quartz component product series. Products include high precision, high quality quartz crystal, automotive crystal, crystal oscillators, and timing modules. Market demand has led TXC to develop multiple kinds of sensors using independent core technology, products that are widely used in mobile communication, wearable devices, IoT, and automotive electronics markets. Over the years, we have upgraded customer value objectives and offered customers a variety of frequency control components for module design-in requirements to provide a total solution to satisfy the overall requirements of customers. TXC performance with regard to price, quality, delivery time and service continues to exceed customer expectations time and time again.

(2). Business Proportions

==> picture [185 x 149] intentionally omitted <==

2020 Consolidated Revenue NTD 11,048,392 thousands

==> picture [169 x 152] intentionally omitted <==

2019 Consolidated Revenue NTD 8,430,970 thousands

(3). Company’s current products

Product Type	Type	Product Size
Crystals	Metal Can Type Crystals	HC-49S / HC-49S SMD
	SMD Glass Sealing Crystals	5.0 x 3.2mm`，`3.2 x 2.5mm 2.5 x 2.0mm`，`2.0 x 1.6mm
	SMD Seam Sealing Crystals	5.0 x 3.2mm`，`3.2 x 2.5mm 2.5 x 2.0mm`，`2.0 x 1.6mm 1.6 x 1.2mm`，`1.0 x 0.8mm
	SMD AuSn Sealing Crystals	1.6 x 1.2mm`，`1.2 x 1.0mm
	SMD Seam Temperature Sensing Crystals (TSX)	2.5 x 2.0mm`，`2.0 x 1.6mm 1.6 x 1.2mm
	SMD kHzCrystals(TuningFork)	3.2 x 1.5mm`，`2.0 x 1.2mm 1.6 x 1.0mm`，`1.2 x 1.0mm
Oscillators	SMD Crystal Oscillators (CMOS)	7.0 x 5.0mm`，`5.0 x 3.2mm 3.2 x 2.5mm`，`2.5 x 2.0mm 2.0 x 1.6mm`，`1.6 x 1.2mm
	SMD Crystal Oscillators (Differential)	7.0 x 5.0mm`，`5.0 x 3.2mm 3.2 x 2.5mm
	SMD kHz Crystal Oscillators	7.0 x 5.0mm`，`5.0 x 3.2mm 3.2 x 2.5mm
	SMD Voltage Controlled Crystal Oscillators (VCXO)	7.0 x 5.0mm`，`5.0 x 3.2mm 3.2 x 2.5mm
	Oven Controlled Crystal Oscillators (OCXO)	14 x 9 mm(SMD type) 9.7 x 7.5mm (SMD type)
	SMD Temperature Compensated Crystal Oscillators (TCXO)	3.2 x 2.5mm`，`2.5 x 2.0mm 2.0 x 1.6mm`，`1.6 x 1.2mm
	Precise SMD Temperature Compensated Crystal Oscillators (TCXO Stratum-3)	7.0 x 5.0mm (4 Pad) 7.0 x 5.0mm (10Pad) 5.0 x 3.2mm
Sensors	Light Sensors	2.5 x 2.0mm
Automotive	DIP / Glass Sealed Crystal / Seam Sealed Crystal /XO/TCXO /TSX/kHz Crystal Oscillators/ kHz Crystals(Tuning Fork)	HC49S`，`HC-49S SMD 8.0 x 4.5mm`，`5.0 x 3.2mm 3.2 x 2.5mm`，`3.2 x 1.5mm 2.5 x 2.0 mm`，`2.0 x 1.6 mm 1.6 x 1.2 mm

(4). Scheduled new products development
According to the development strategy and market demand, the company will continue to invest in R & D resources, actively develop new technologies, take "miniaturization, high stability, modularization" as the product development policy, and expand the market share of high-end applications and high added value products. Based on the company's core technology, the company has developed horizontally and actively entered the fields of optics, microelectronics, sensors and medical electronics. In the face of rapid changes and fierce competition in domestic and foreign markets, the company plans to focus on the following new product development:
i. Development of miniaturized products After years of taking root in quartz component technology, the company has been synchronized with the world's leading manufacturers. The company successfully mass produced the smallest 1.0x 0.8x0.30mm quartz crystal component on the market, and started the R&D plan of 320 MHz ultra-high frequency quartz crystal components to meet the needs of future product miniaturization and 5G related requirements. as the main force of the next generation of miniaturized products. In order to meet the needs of future product miniaturization and 5G related requirements, the company will continue to develop higher precision process technology, achieve the pre layout of its own engineering technology, and realize product development with high cost-performance ratio, low energy consumption, high vibration resistance and large frequency and wide range.
ii. Development of automotive electronics products
- TXC won the IATF-16949 quality operating system certification and completed the version conversion of ISO 9001/IATF 16949-2016. The products continue to move forward in technology, safety, quality and other aspects to improve to the highest quality reliability of grade 0. Currently, the products developed are small-scale, wide temperature range temperature compensated quartz oscillator (TCXO) and suitable for grade 0 quartz components. We are ready for the growth momentum of automotive electronic products.
iii. Development of advanced crystal vibrator and oscillator and module products Continue to invest in the development of advanced oscillators to meet the high-performance requirements of emerging 5G applications. In 5G mobile phones, we will focus on the miniaturization of temperature compensated quartz oscillator (TCXO) with high stability, low phase noise and low power consumption to meet the technical requirements of new generation millimeter wave. In 5G network equipment, most of the equipment needs to be equipped with optical fiber communication module to complete high-speed data transmission. The miniaturized HFF low jitter XO (more than 400MHz) required by the module is the focus of the company's development investment. In 5G base station, various new application specifications such as low noise, high stability, high temperature resistance, anti vibration, airtightness and miniaturization need to be meTXC's miniaturized high-precision constant temperature controlled oscillator module (Miniature OCXO), wide temperature range high stability temperature compensated quartz oscillator (Stratum-3 TCXO) and high frequency oscillator/voltage controlled oscillator (HFF XO/VCXO) products will continue to be put into use to meet the application and development of 5G or next generation communication technology.

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iv. Development of sensing application products

In the light sensor market, we will continue to develop proximity sensor, ambient light sensor and RGB sensor with miniaturized ceramic packaging technology and evaluate the combination with temperature sensing for Smart Handheld Devices and wearable devices. In the thermal image sensing layout, we are working with partners to develop far-infrared thermal imagers for automatic driving night vision. The developed vacuum ceramic heterojunction packaging technology will be extended to the monitoring and action sensing temperature sensor packaging services.

v. Development trend of future terminal application products

==> picture [418 x 260] intentionally omitted <==

(II) The Industry

(1). Current industry status and development

The current domestic quartz industries are mainly for producing components such as crystals, crystal oscillators, and crystal filters. The basic manufacturing process of making crystals starts from cutting the quartz, and then after grinding and polish to the desired sizes; followed by depositing thin metal film electrodes on its surface under the vaccum, and subsequently, it is connected with condut wires; afterward it is packaged. In addition, by assembling and packaging the crystal components with IC oscillators then it will result the crystal oscillators. Assembling and packaging the crystal components and capacitors, wires, and resistors then it will be the crystal filters.

When you comparing the three crystal technologies: frequency, precision, and size dimension you can see that the European and U.S manufacturers are strong in the frequencies development. It was because of their development of the wireless technology that it gives them an advantage in the design and development; but production efficiency is lower. Japan manufacturers are the technology leaders and they are excellent in the precision and the scale

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size of the products. They have the advantages of products improvement, and can further to make it in mass production and automatic production. To the Taiwanese manufacturers, most of them are buying the material and know-how, machinery equipments, or purchasing the manufacturing process of which usually lead to a faster time in marketing the product. But recently, the manufacturers have improved their manufacturing process, and the manufacturing equipments; also the learning of the manufacturing process further improves it. Presently, the mainland manufacturers mainly produce low-end products wherein 80% of them are for export and their products still have not effectively satisfied the demand of their massive domestic market. In recent years Chinese manufacturers are aggressively to promote their technology abilities and to advance to the middle and high end. Below table is a comparison of advantages/disadvantages of competitions from the major producers.

	European, USA	Japanese	Taiwanese	China
Key element
	manufactures	manufactures	manufactures	manufactures

Frequency	Middle	Veryhigh	Veryhigh -middle	Middle-low
Precision	Middle	Veryhigh	Veryhigh -middle	Middle-low
Size	Middle	Veryhigh	Veryhigh -middle	Middle-low

Currently, in Taiwan the major crystal manufacturers are TXC Corp, Siward Crystal Technology, Taitien Electronics, Tai-Saw Technology, Harmony Electronics, and EChina Technology. Currently TXC Corp has the highest market share in Taiwan.

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(2). Market relationship of up, middle, and down stream companies
Crystal components are our major product and it is also the basic electronics parts. Our upstream industries include crystal growth, material manufacturing, and precision machinery. The downstream applications include information technology, wire and wireless communications, consumer electronics, and network products etc. The relationship between the up, middle, and downstream manufacturers is given in the below diagram:
- Potential entrants
- ‧ Electronics components channels ‧ Other non frequency electronics components manufacturers

Upstream suppliers

‧ Crystal growth－ Manufacturing man-made crystals
‧ Materials manufacturing－ Crystal bar, wafer/crystal disk、metal and cermic package materials(top
cover、base cover)、plastic、 IC…
‧ precision machinary－ cleaning/plating、fine tuning/package、 examing/testing (photo-mask manufacturing、vaccum plating machine、yellowish light plating equipments、 testing instruments、jug & fixture… (3 )

Downstream clients

‧ Mobile computing
Manufacturers of Crystal ‧ Mobile communication
‧ crystal gridding industry
‧ circuit design ‧ Basestation and ‧ crystal/oscillator equipments industry
package ‧ Wireless Module
‧ crystal/oscillator industry
testing ‧ Consumer electronics industry
‧ Automotives electronics industry

Substitutes

． Silicon Timing Devices
．Self-stimulated LC Variable frequency filter,、 oscillator
． Dielectric Resonance (DR Oscillator)
． FilmBody Accoustic (FBAR)
． MEMS technooogy (MEMS)
．Green Clock

(3). Development Trend of Crystal Industry

i. Quartz components industry development trend

Quartz component products are important components of electronic products. In order

to match the vigorous development and trend of future terminal applications, its future product type, product precision and size will develop towards the following trends:

(a). Miniaturization, SMD trend

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The goal of miniaturization will focus on the development of technologies such as single chip IC, chip design and manufacturing, packaging and testing; taking SMD type frequency components as an example, the current length and width dimensions have been developed from 3.2 × 2.5mm, 2.5 × 2.0mm, 2.0 × 1.6mm, and then to 1.6 × 1.2mm, 1.2 × 1.0mm, 1.0 × 0.8mm, or even smaller 0.8 × 0.6mm; the height of the components has also been from 1.2mm, 0.9mm, 0.8mm, 0.7mm, 0.5mm to 0.35mm , 0.30mm, 0.25mm improvement. In addition to the size reduction achieved by SMD packaging, it can also be connected with the industrial chain of downstream customers; including the technology development trend of front-end chipset, product design trend of brand customers and SMT production of related customers, etc., and all can achieve adaptation.

(b). High frequency low noise, high precision and high stability oscillator module 5G wireless communication system is mainly composed of RRU or AAU, front-haul network, BBU or CU/DU, back-haul network, core network and access network.
High frequency and low noise: through the high frequency basic wave crystal matching etching technology autonomously developed by our company, we have completed the development of high frequency (> 200MHz) and low noise crystal oscillator (XO) and voltage controlled crystal oscillator (VCXO) to meet the requirements of 5G communication optical module and RF system.

High precision: the TCXO with high precision (+ / - 100ppb) and high temperature (- 40 ~ 105 ° C) is developed to meet the needs of 5G AAU requirements through the customized dual circuit temperature compensation circuit and low disturbance quartz crystal matching customized temperature compensation algorithm.

High stability: the first constant temperature crystal oscillator (OCXO) in the industry is completed through the innovative patented embedded ceramic heater packaging technology, surface mounted SC-cut crystal and customized temperature control circuit. This product has the advantages of miniaturization (9.7×7.5mm), and is especially suitable for providing the synchronous system of the basic frequency unit.

Based on the evolution of various high-speed transmission systems, the corresponding frequency components move towards the direction of high frequency, modularization, high precision and high stability. We have developed all kinds of oscillator modules through our own packaging, resonators and customized IC technologies, which is conducive to the simplification of customer circuit design to meet the performance requirements of 5G applications.

The products are as the below list

		PKG
No	Projects		Type	Features
		(mm)

		7.0×5.0	CMOS	High Frequency
	High Frequency XO	5.0×3.2	LVPECL	High Precision
1
	(~2GHz)	3.2×2.5	LVDS
				Low Noise
		2.5×2.0	HCSL

				High Frequency
		7.0×5.0	CMOS
	High Frequency VCXO			High Precision
2		5.0×3.2	LVPECL
	(~2GHz)			Low Noise
		3.2×2.5	LVDS
				High Pull

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No	Projects	PKG	Type	Features
	High Frequency SO	7.0×5.0	LVPECL	High Frequency
3
	(above 150MHz)	5.0×3.2	LVDS	Low Noise

		3.2×2.5
		2.5×2.0
4	TCXO		Clipped Sine	High Stability
		2.0×1.6

		1.6×1.2
		7.0×5.0	Clipped Sine
5	Stratum 3 TCXO			Ultra High Stability
		5.0×3.2	CMOS

		36×27
			LVCMOS
		25×25
6	OCXO		HCMOS	Ultra High Stability
		14×90
			Sinewave
		9.7×7.5

ii. Sensor industry development trend

Full screen has become an important feature of smart phones. There are two major development directions to keep part of the bang space and to narrow the frame. The product form, size and characteristics of optical sensor will develop towards the following trends:

(a) Miniaturization

With the increasing popularity of AMOLED applications, the pursuit of the highest screen-to-body ratio has been an important development trend for smartphones in recent years. The frame is extremely narrow while meeting the requirements of IP68 waterproof and dustproof. Traditionally, the rigid light sensor is placed on the frame or bangs. The body space no longer exists, replaced by an under-screen optical sensing element hidden under the screen.

==> picture [382 x 132] intentionally omitted <==

(b) Underneath the screen

COVID-19 has spread throughout the world since the beginning of 2020. With the development of the epidemic, body temperature monitoring has been cited as the fastest and easiest initial screening method. For a while, various public places are vying to set up body temperature monitoring systems. In a short period of time, thermal sensing components from medium and long-distance body temperature measuring devices such as cameras to ear thermometers/forehead thermometers and other short-distance thermal sensing elements were sold out in a short time. According to YOLE’s statistics, thermal sensing elements will be sold in 2020. The year-on-year growth is about 76% compared to 2019, and various mobile devices and wearable devices are also planning to introduce thermal sensing elements as personal

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temperature monitoring devices. The subsequent market demand is expected to grow by more than 30% each year.

(4). Competition Situation

i. Frequency components:
Due to the unreasonable price cutting competition in the frequency component industry for a long time, the Japanese industry has been unable to get rid of the financial deficit for years. With the application trend of 5G, AIoT high stability, high temperature and ultra miniaturization products, the manufacturers are limited by their technical ability, have the capacity and ability to provide the frequency component manufacturers that meet 5G and AIoT products, and have been focused on the top 5 in the market. Therefore, frequency components with the continuous development of 5G and AIoT industries, it is expected that 5G will accelerate the situation favoring big players and promote the transformation of industrial ecology.

However, products with high stability, high temperature and ultra miniaturization are in urgent need of rigorous product design and stringent production conditions, including investment and preparation of special production equipment are a test of the R & D and manufacturing capabilities of manufacturers, especially the ability to optimize cost structure. The marketing team of the company has grasped the trend of production materials, market supply and demand, long-term operation and cultivation of clients, which has made the prices return to a reasonable level, to promote the company to build a reasonable profit, and improve the health of the industrial chain.

ii. Sensors

In the past two years, the appearance design of smart phones has changed rapidly, which has affected the size and functional requirements of the sensor of customers. In addition, the main competitors have launched various customized designs, leading to the company's past competitive advantage in small single hole facing severe challenges, and directly affecting the adoption of new cases in major customers. Secondly, the competitor's product design adopts plastic packaging, which has a comparative advantage in cost, simultaneously impacts the sensor market price, affects the order receiving and faces severe alternative competition.

Technology and Recent Research and Development
(1) Ratio of R&D expense of total revenue during recent years up to December 31, 2020

Units ： NT$ 1,000 ， %

Year	2019	2020
Net Revenue	8,430,970	11,048,392
R&D expense	582,776	769,441
R&D Expense/Net Revenue (%)	6.91	6.96

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(2) Research and Development Results

Products
development -
Crystal 1、 SMD 3.2 x 2.5 mm Crystal for Mobile, Networking, Infra, Automotive
2、 SMD 2.5 x 2.0 mm Crystal for Mobile, Networking, Infra, Automotive
3、 SMD 2.0 x 1.6 mm Crystal for Mobile, Wearable, IOT, Networking, Infra, Automotive
4、 SMD 1.6 x 1.2 mm Crystal for Mobile, Wearable, IOT, Networking, Infra, Automotive
5、 SMD 1.2 x 1.0 mm Crystal for Mobile, Wearable, IOT, Networking
6、 SMD 1.0 x 0.8 mm Crystal for Mobile, Wearable
7、 SMD 2.5 x 2.0 mm TSX for Mobile, Automotive
8、 SMD 2.0 x 1.6 mm TSX for Mobile, Wearable, Automotive
9、 SMD 1.6 x 1.2 mm TSX for Mobile, Wearable
10、 SMD 1.2 x 1.0 mm TSX for Mobile, Wearable

Products
development -
Oscillator 1、 SMD Seam XO 2.0 x 1.6 mm 2~54 MHz
2、 SMD Seam XO 1.6 x 1.2 mm 2~54 MHz
3、 SMD 1.6 x 1.2 mm Oscillator for Automotive
4、 SMD 7.0 x 5.0 mm Oscillator for Differential Output Oscillator for Telecom
5、 SMD 5.0 x 3.2 mm Oscillator for Differential Output Oscillator for Telecom
6、 SMD 2.5 x 2.0 mm Oscillator for Automotive
7、 SMD 2.0 x 1.6 mm Oscillator for Automotive
8、 SMD 7.0mm x 5.0mm High Frequency XO/VCXO (2.1GHz) for Base SMD 3.2 x 2.5 mm
Crystal for Mobile, Networking, Infra, Automotive
9、 SMD 2.5 x 2.0 mm Crystal for Mobile, Networking, Infra, Automotive
10、 SMD 2.0 x 1.6 mm Crystal for Mobile, Wearable, IOT, Networking, Infra, Automotive
11、 SMD 1.6 x 1.2 mm Crystal for Mobile, Wearable, IOT, Networking, Infra, Automotive
12、 SMD 1.2 x 1.0 mm Crystal for Mobile, Wearable, IOT, Networking
13、 SMD 1.0 x 0.8 mm Crystal for Mobile, Wearable
14、 SMD 2.5 x 2.0 mm TSX for Mobile, Automotive
15、 SMD 2.0 x 1.6 mm TSX for Mobile, Wearable, Automotive
16、 SMD 1.6 x 1.2 mm TSX for Mobile, Wearable
17、 SMD 1.2 x 1.0 mm TSX for Mobile, Wearable
18、 SMD 5.0mm x 3.2mm High Frequency XO/VCXO (2.1GHz) for Base Station,
Networking, Infrastructure
19、 SMD 3.2mm x 2.5mm High Frequency XO/VCXO (2.1GHz) for Base Station,
Networking, Infrastructure
20、 SMD 5.0 x 3.2 mm Stratum-3 VC-TCXO for Base Station, Small-cell, Networking,
Infrastructure
21、 SMD 3.2 x 2.5 mm HFF VCXO for Base Station, Networking, Infrastructure
22、 SMD 3.2 x 2.5 mm TCXO for GPS and Mobile
23、 SMD 2.5 x 2.0 mm TCXO for GPS and Mobile
24、 SMD 2.0 x 1.6 mm TCXO for GPS and Mobile
25、 SMD 1.6 x 1.2 mm TCXO for GPS and Mobile
26、 SMD 3.2 x 2.5 mm TCXO for Automotive
27、 SMD 2.5 x 2.0 mm TCXO for Automotive
28、 SMD 2.0 x 1.6 mm TCXO for Automotive
29、 SMD 7.0 x 5.0 mm Stratum-3 TCXO with high temperature and low phase noise for Base
Station
30、 SMD 7.0 x 5.0 mm Stratum-3 TCXO for Base Station, Small-cell, Networking
Infrastructure
31、 RTC 10.1 x 7.4 mm for smart utilities devices, electric meters, gas meters
32、 SMD 1.6 x 1.2 mm 32k TCXO for wearable device
33、 SMD7.0 x5.0mm Miniaturized Oven-Controlled Crystal Oscillator for 5G RRHs, Small
Cells
34、 SMD 9.7 x 7.5mm Miniaturized Oven-Controlled Crystal Oscillator for telecommunication,
stratum-level and base-station
35、 SMD 14x 9 mm OCXO for telecommunication,stratum-level and base-station

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	36、 DIP 25 x 25 mm OCXO for stratum-level and base-station
Products development - Sensor	1、 SMD 4.0 x 2.4mm Ambient Light Sensor and Proximity Sensor with Integrated IR LED for Mobile Phone 2、 SMD 2.5 x 2.0mm Ambient Light Sensor and Proximity Sensor with Integrated IR LED for Mobile Phone 3、 SMD 3 in 1 Light Sensor 2.5 x 2.0 mm for Smartphone, Tablet, DSLR, Smart wearable , Fitness devices 4、 SMD 3 in 1 Light Sensor 4.5 x 0.9 mm for Smartphone, Tablet, Smart wearable , Fitness devices 5、 1.6 x 1.6 mm 3-axis electronic compass for Sensor application
Products development - Blank	1、 Inverted MESA BLK 1.3 x 1.03mm 2、 Inverted MESA BLK 1.6 x 1.14mm 3、 Inverted MESA BLK 2.49 x 1.83mm
Patents and Academic publications	Patents`︰` 1、 Structure and production method of the piezoelectric quartz oscillator chip 2、 The production of piezoelectric quartz oscillator chip 3、 Quartz crystal oscillator 4、 Crystal oscillator with layout structure for the miniaturization of size 5、 Grooved resonator unit packaging structure 6、 Light sensor chip packaging structure 7、 Stacked light sensor chip packaging structure 8、 Thru-hole resonator device wafer level packaging structure 9、 Thru-hole resonator device wafer level packaging structure manufacturing method 10、 Thru-hole resonator device wafer level packaging structure manufacturing method 11、 Improved resonator wafer grade packaging structure 12、 Strengthen hermetic sealing of oscillator wafer grade packaging structure 13、 Partitioned side-by-side photo-sensing chip package structure 14、 Micro aerosol sensing components 15、 Micro aerosol sensing device with self-cleaning function 16、 Quartz oscillator plate 17、 OVEN CONTROLLED CRYSTAL OSCILLATOR CONSISTING OF HEATER-EMBEDDED CERAMIC PACKAGE For the patents or possible patents of TXC, please refer to relative patent database http://www.tipo.gov.tw/ch/ Papers`︰` 1、 A Novel Miniature OCXO Using Hermetically Sealed Ceramic Package (English), 2020 2、 Highly Stable Miniaturized OCXO with HeaterEmbedded Ceramic Package (English), 2018 3、 Development of High-Stability Miniaturized Oven Controlled Crystal Oscillator (English), 2016 4、 Anchor loss reduction of quartz resonators utilizing phononic crystals. (English), 2015 5、 A Perspective for the Quartz Crystal Devices Industry and Technologies in Taiwan and China. (English), 2014 6、 A Study for the Relationship between Drive Level and the Activity Energy in Arrhenius Accelerated Aging Model for the Small Quartz Resonators. (English), 2014 7、 A Study on Raising the Fundamental TS-mode Resistance by Energy Trapping for 3rd Overtone. (English), 2014 8、 Laser Measurement and Identification of Vibration Modes of AT-cut Quartz Crystal Resonators. (English), 2013 9、 The Study of Aging Frequency Drift Mechanism for Quartz Crystal Resonators. (English), 2013 10、 Advanced TSV-Based Crystal Resonator Devices Using 3-D Integration Scheme With Hermetic Sealing. (English), 2013 11、 TSV-basedquartz crystal resonator using3D integration and Si Packagingtechnologies.

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(English), 2013

1 、 A Brief View of the Current State of the Development and Aging Performance of Fixed Frequency Surface Acoustic Wave (SAW) Oscillator (English), 2012
2 、 Properties of Miniature X- and Z’-Elongated Rectangular AT-CUT Quartz Resonators of Different Sizes (English), 2012
3 、 Vibration Mode Identification and Coupling Assessment with the Mindlin Plate Equations and Measurements is a Quartz Crystal Plate (English), 2012
4 、 Aging Performance of Small Size MHz Quartz Crystal Under High Drive (English),2011
5 、 Inharmonic Overtones in Partially Plated AT-cut Quartz Crystal Plates (English),2011
6 、 The Study of Activation Energy (Ea) by Aging and High Temperature Storage for Quartz Resonators' Life Evaluation (English), 2011
7 、 An Efficient AT-cut quartz Crystal Resonator Design Tool for Activity Dip in Working Temperature Range (English), 2011
8 、 Quartz Crystal Industry of China at Crossroads (English), 2011
For relative paper, please refer to the website of TXC: http://txccorp.com/

4. Long and short term sales and marketing plan

(1). Short-term Development Plan

i. Marketing Strategy

Focus on and accelerate the promotion and penetration of 5G Infrastructure/Automotive target customers
Strengthen the 1st Design win of Automotive Tier 1 IC Design House
Expand new customer demand for 1210/1008 miniaturized products to reduce the concentration of customer demand for miniaturized products
Expand new customer demand for 5G Infrastructure XO/AOM products to delay the impact of customer demand decline
Guide customers to switch 3225 Seam/Glass Xtal needs to 2016 Seam/Glass Xtal, reduce the impact of material price increases and increase product ASP
Pay attention to the situation of market competition and the balance of supply and demand, use price strategies flexibly, and strive to optimize the company's profits.
Continue to introduce process automation and customer order requirements B2B (system docking) according to the goals of each stage, streamline the process and manpower, and ultimately improve the response speed of demand scheduling
Through the practice of intelligence, mobilization and big data analysis in information systems (BI), it assists business personnel in the formulation and judgment of sales strategies

ii. SMD Manufacturing Strategy

Focus on improving and reducing manufacturing costs: Strengthen the quality assurance system and cross-departmental collaboration, effectively and balance the use of resources, remove or reduce sluggish, wasteful, and ineffective costs, actively improve the cost of poor quality (COPQ), continue to improve production efficiency, and maintain high gross profit and high-quality competition Advantage
Accelerate the improvement of new product mass production efficiency: In response to the miniaturization of 5G high-frequency products and the small variety of demand characteristics, the New Product Introduction process and performance are implemented to ensure the speed and quality of new product mass production (Time to Volume & Time to

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Market) to meet the needs of customers and the market quickly The changing needs effectively support the company's revenue and gross profit growth goals

Build equipment independent development capabilities: Continue to recruit software and hardware talents related to equipment development, transplant the existing single-point optimized key equipment functions to independently develop new equipment, reduce the dependence of controlled overseas suppliers, gradually realize the goal of intelligent manufacturing, and establish the company's long-term competitive advantage
Complete digital system platform tools: Accelerate the upgrade of the intelligent production information system and the integration of related data platforms, reduce abnormal operations, improve operational efficiency, and strengthen the accuracy, completeness and timeliness of on-site related data collection to improve the speed of problem solving and the quality of operational decision-making analysis

iii. MEMS Strategy

Develop advanced wafer process technology: Accelerate the development of wafer process-related technologies such as quartz etching and yellow light development to meet future market competition and to meet the requirements of miniaturization, high frequency, high stability, and harsh application environment conditions for a large number of products such as 5G, Internet of Things, and automotive electronics Needs
Improve chip design and development capabilities: With the development of advanced wafer process technology, the chip design and development capabilities will be upgraded to a higher level of technology, such as SC-cut, Inverted-MESA, and Photo-AT. At the same time, it combines the two core advanced technologies of wafer process and chip design to innovate the existing process and stabilize the mass production capacity to meet the special needs of the market, and accelerate the expansion of the application layout of 5G and IoT products
Strengthen the ability of crystal design and advanced packaging and testing technology to meet the product market demand of miniaturization, high drive, high frequency, high stability, and harsh application environmental conditions
Combining internal and external resources, adjust the proportion of high- and low-value operations, and concentrate resources to develop core technologies and products.
Complete digital system platform tools: Accelerate the upgrade of the intelligent production information system and the integration of related data platforms, reduce abnormal operations, improve operational efficiency, and strengthen the accuracy, completeness and timeliness of on-site related data collection to improve the speed of problem solving and the quality of operational decision-making analysis

iv. Quality Assurance Strategy

To meet customer expectations and long-term trust as the orientation, pursue the goal of zero risk in the operation process and zero defect in product quality, and continue to promote the quality awareness activities of all employees and the optimization of various operations.
To focus on the process management of the quality, delivery and cost of R&D of highly stable and miniaturized products in the New Product Introduction (NPI, New Product Introduction) process, and optimizes simultaneous engineering operations, reduces the number of design changes and reduces COPQ losses
Gradually build a quality management information system, based on data and digital

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processes, coordinate the resources of various departments, and work together to quickly solve quality problems, and reduce and prevent problems from recurring

Promote the effectiveness of suppliers’ management of products and processes that are free of hazardous substances in compliance with international standards, and promote the formulation of management operations for continuous operations and emergency response to disasters
Strengthen supplier quality management of main raw materials
Continue to promote the quality activities of “three-seeing and four-nothing” to prevent the risk of bad failure in the production process, and through QRQC management, the prevention and detection of production abnormal events can be quickly and effectively introduced to reduce COPQ
Continue to expand product reliability laboratory equipment and analysis energy, introduce automated measurement systems and data integration and analysis capabilities, and improve the estimation and verification of product long-term product quality capabilities in automotive and 5G applications

v. Product R&D Strategy

Crystal oscillator research and development: According to market layout and 5G industry requirements, carry out research and development of XO, VCXO, TCXO and OCXO. In terms of technology, it focuses on customized integrated circuits, special packaging development and temperature compensation algorithm establishment, with patented layout to achieve miniaturization, plastic packaging resistance, high precision, high frequency and wide temperature operation and other specifications. In addition, the next-generation 6G communication technology is also the focus of research, and the pre-research project will be launched for performance requirements such as high seismic resistance, ultra-low noise, ultra-high frequency, and ultra-high stability.
R&D for Sensor: Strengthen the competitiveness and application range of light sensors, develop ultra-small temperature sensors and thermal image sensors, and establish application solutions that integrate multiple sensors, mainly for human body sensing, wearable applications and IoT sensing Focus on testing and application to enhance the added value and profit of the product
R&D for Advanced products: Develop next-generation extremely miniaturized wafer-level packaging and key advanced process technologies. And technology modules such as analog design, chip technology, thin film group, ceramic base and cover, silver glue group, IC group, wafer bonding, quartz dry etching, electroplating group, laser processing technology, yellow light lithography, quartz wet etching, etc. To accelerate product development and stabilize quality.

vi. Supply chain strategy

Capacity allocation: The production capacity will be expanded in stages according to sales demand, and the overall production capacity is expected to increase by about 10% throughout the year. The main increase in production capacity is the demand for applications in the automotive market, miniaturization of the communications market, and Internet-related products. In addition to the increase in self-owned capacity, mature products will cooperate with third-party manufacturers in a timely manner according to the demand situation to make up for the lack of self-owned capacity and avoid excessive capacity expansion

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Supply and demand balance
a. Sales forecasts still have differences in demand during the off-peak and peak seasons, and product supply still needs to be moderately leveled. Appropriate planned production is made in response to rigid demand, to avoid excessive expansion of production capacity and to take into account the demand in the off-peak and peak seasons.
b. In view of the limited supply source or the key raw materials of a single supply source, adopt a moderate increase inventory strategy and monitor the inventory level. In addition, materials with low material supply risk, inventory control within 4 weeks.
c. The group joint procurement and scheduling, and continue to implement the second supply source introduction to obtain the most favorable material costs, enhance product competitiveness and effectively reduce supply risks.
d. Miniaturization and high-end products are still the main sales force in the future. For product development progress, cost management, market pricing strategies, mass production supply allocation, etc., the delivery is completed in the highest priority order to maintain growth momentum.
Group inventory management: By the end of 2021, the target inventory turnover rate of the group is controlled at 5.0 turnover rates, and the individual inventory of the Pingzhen plant is above 7.0 turnover rates. For the HUB warehouse inventory for more than 90 days, effective and timely dispatching and disposal
Improve operation performance: Continue to simplify the operation process and introduce the information system, aiming to increase the per capita operation efficiency by more than 10%. With sales demand forecasting, cost analysis and price management systems, we can accurately grasp market trends, manage product profits, reduce stocking risks, and increase operational efficiency
Production and sales balance and risk management: Carry out the mid-year security warehouse material preparation plan, and continue to monitor the inventory. Through weekly production and sales meetings or emergency meetings to make the best dynamic adjustments, market change messages are connected to various departments, and coordinated to respond in real time.

(2). Long-term Development Plan

i. Pay attention to 5G's business operation schedule in various countries, and the technological development pace of major manufacturers, actively invest resources in R & D of relevant application products, and layout 5G target customers.
ii. We are committed to developing high-precision frequency control components for high-level products applied to infrastructure including: fiber channel, Gigabit Ethernet, SDH-SONET (synchronous optical fiber transmission), small cell (small base station), and office communication.
iii. Continue to develop miniaturized products to meet the application trend of Internet of things modularization, mobile communication and consumer electronic products.
iv. Actively expand the customer base of automotive electronics and deepen the customer base relationship, and continuously develop the frequency control components used in automotive electronics, with the primary goal of meeting the stringent quality and stability requirements.

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v. All sales operations will continue to deepen and actively expand the Korean market, and strengthen the distribution of sales channels in Southeast Asia, India, Vietnam, Israel and other markets, so as to provide localized customer services in line with the customers in various regional markets. Based on the market of Greater China, we will continue to explore the demand of emerging markets to expand market share, and continue to pursue the growth goal of becoming a global leader in quartz crystal industry
vi. We will continue to develop timing and sensor products in line with the market and customer applications. To explore new product applications and diversified product management strategies to open up blue ocean business opportunities.
vii. The project-based leadership organization and the lean team work together to comprehensively improve operational efficiency and combat capabilities.

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II. Marketing & Sales Situation

(I) Market Analysis

(1) Market for our major products

The product trend is toward to small and light. The products that use the SMD crystal will have a higher percentage than others. In the future, Asia still is the major OEM center, and the products from Asia are still very high. TXC would still need to work hard on the market expansion in America, Europe and Japan.

Regional sales distribution of our major products in the past two years ：

Unit: NT$ 1,000

	2019		2020	2020
Rigion \Year
	Amount	%	Amount	%

America	206,637	2.45	196,788	1.78
Europe	123,731	1.47	140,656	1.27
Asia	7,824,156	92.80	10,337,281	93.57
Taiwan	276,446	3.28	367,786	3.33
Others	-	-	5,881	0.05
Total	8,430,970	100.00	11,048,392	100.00

(2) Market share

Due to the impact of the COVID-19 epidemic in 2020, the CS&A report in mid-2020 still has a slight negative growth in the overall output value of 2021-2022. It is expected that the epidemic in 2021 will be moderated due to the possibility of vaccine administration. The company can continue the trend of full orders in 2020. In addition, the surrounding demand of the 5G industry is expected to be still ready in 2021. The TXC marketing team is cautiously optimistic about the overall demand in 2021-2022, but continues to pay attention to the epidemic situation and the Sino-US trade situation The development of 5G, AIoT industry core applications and target customer expansion and new projects are closely followed.

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Globel Timing Market (Millions of Dollars)

==> picture [432 x 199] intentionally omitted <==

Source ： TXC, CS&A, 2020

(3) Product applications

The company's product line is complete and diversified, which is in line with the technological development of electronic products in various application fields. The general trend of Internet of things (IoT) drives the Internet business opportunities of various industries, and the future growth momentum is expected.

==> picture [455 x 199] intentionally omitted <==

i. Market side
According to IoT Analytics analysis, despite the continuous COVID-19 epidemic, which will reduce the global GDP by 5% in 2020, the IoT market is still growing in 2020 (regardless of the scale of expenditure or the total number of connected devices). Although a small number of IoT projects have been stopped or postponed due to various reasons (such as the inability to build infrastructure during the lockdown), most of the IoT projects will continue in 2020.

In fact, 2020 is an inflection point for smart devices-the number of active IoT connections (for example: connected cars, smart home devices, connected industrial equipment), etc.,

115

surpassed the number of non-IoT connections for the first time in history ( For example: smartphones, laptops and desktops). According to IoT Analytics estimates, there are currently 21.7 billion active connected devices in the world, of which 54% (11.7 billion) are connected to IoT devices. By 2025, it is estimated that there will be more than 30 billion IoT connections, that is, almost everyone on the planet has 4 IoT devices.

Internet of things (IOT) continues to drive relevant applications, including the vigorous development of smart home, smart industry, smart car, smart Internet, smart medical and various terminal products, including wearable products, mobile devices, virtual reality and UAVs.

(a) Master the main applications of 5G and lay out the development of 5G full architecture

==> picture [433 x 190] intentionally omitted <==

5G main application development layout

Continuing the focus of the 5G full-architecture application planning, and formulating various industrial developments based on the trend will continue to have a comprehensive layout.

It has been 22 months since the global 5G basic network has been commercialized. According to statistics, the speed promoted is 5 times that of the past 4G LTE era. There are currently 122 5G commercial service licenses, including 35 5G SA independent networking. According to the continuous 3GPP schedule, operators will vigorously start the construction of 5G SA and millimeter wave base station equipment in 2021, which will simultaneously and rapidly drive the growth of demand for high-end products, including OCXO, S3-TCXO, VC-TCXO, VCXO , High frequency CMOS XO and high frequency crystal.

116

For the 5G SA independent networking plan in 2021, it will also require high performance computing (High Performance Computing) and high-speed transmission performance improvement. According to the roadmap of Switch equipment used from the core network to the data center, it will start this year. Large-scale adoption of 25.6 Tbps specifications and plans to increase 51.2 Tbps in 2023, among which these high-end Switch/Server equipment upgrade plans need to be equipped with PAM4 400 Gbps and future 800 Gbps optical communication modules and optical network interfaces (Optical Ethernet Interface Card). ) Support, the development of this key technology will also further promote the growth of new demand for Differential XO and CMOS XO.

In response to the impact of the COVID-19 epidemic, people’s behavioral networks have been accelerated and gradually changed, and this behavioral network will continue to affect people’s interaction patterns, link the development of various fields of 5G in recent years, and will comprehensively drive new application terminal devices. A wave of growth momentum. Simultaneously with the SIP technology of semiconductor packaging to realize the evolution of small-scale modularization, and to further promote the demand for devices required by enterprises and terminal consumer behavior network planning. The related applications required for the above device interconnection will continue to maintain strong demand for Timing products such as TCXO, TSX and Crystal, and the trend of specification requirements is expected to continue to develop in the direction of high frequency, miniaturization, ultra-low jitter and ultra-low phase noise.

(b) Automotive

==> picture [433 x 208] intentionally omitted <==

Development focus of automotive electronics applications

According to estimates, the output value of automobiles in 2035 will reach 6 trillion U.S. dollars, of which the output value of automotive electronics is 4 trillion U.S. dollars. This strong value-added development means that traditional car manufacturers will increase the proportion of digital electronics for each major application design and emerging electric car manufacturers. Policies that cooperate with governments of various countries are also in full swing and accelerate their development. At the same time, complying with 5G low-latency requirements will also promote the demand for in-vehicle communication devices, including in-vehicle 5G NR and V2X. It is estimated that by 2030, 50% of new cars that leave the factory will be equipped with in-vehicle communication-related

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functions. In addition, it is necessary to plan to carry more than 40 sensors to improve the overall ADAS system to assist driving safety in the development towards the level 4/5 of fully automatic driving.

==> picture [388 x 174] intentionally omitted <==

Main application development of automotive electronics

Whether traditional automotive electronics or the field of electric vehicles that boldly use innovative technology is developing towards full digital electronics and then fully evolving into smart cockpits and fully autonomous vehicles. Planning and development, this will increase the level of Crystal, TSX, and CMOS that must comply with vehicle regulations. XO and TCXO have strict specifications and reliability requirements and continue to vigorously promote more opportunities in the automotive field.

(c) Sensors

(a) Light Sensor
The optical sensing elements used in traditional smartphones are used in 15-20% transmittance environments. The under-screen optical sensing elements have to face the ultra-low transmittance of AMOLED <3%. Sensitivity needs to be increased by at least 5~10 times or higher to ensure the same characteristics as traditional optical sensing elements in practical applications. Currently, the newly developed under-screen optical sensing elements have been compared with major smartphone manufacturers. Carry out technical exchanges and test formulas, and plan to mass-produce and go on the market in 2021.
(b) Thermal Sensor Ear thermometers and forehead thermometers that detect the human body or the surface of objects by measuring far infrared rays have been used for many years, but in the past, the packaging of thermal sensing components mostly used the TO can, DIP type ) The device body is huge, it is difficult to put into a smart phone or wearable device. The SMD thermal sensing element under development of our company will be equipped with a complete temperature calibration function to ensure that various mobile devices can also obtain high-precision temperature information in different environment, more implementation of personal temperature management.

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4. Niches competition, the advantages/disadvantages of the future development, and the response strategies.

Strengths	Weaknesses
1. We will further develop the market and provide local services for the design and manufacturing of customers. 2. Global logistics management, high delivery flexibility. 3. Professional manufacturing team, stable quality and mass production cost advantage. 4. High precision and miniaturized products continue to be developed and introduced into mass production, constantly narrowing the technical distance with Japanese manufacturers. 5. Professional marketing and application engineering team to meet the needs of customers, and provide technical support for the design and mass production process of variousproducts.	1. We need to continue to strengthen the capacity of mass production of ultra miniaturized products. 2. Restricted by front-end process automation of chips. 3. The equipment and key raw materials have a long lead time in delivery, so it is difficult to meet the sudden demand of the market. 4. The inadequate sensor components development layout and the lack of early planning lead to the product not being launched in time to meet customer needs.
Opportunities	Threatness
1. Deeply cultivate the technology leaders of various industries in China, and the brand customer management strategy drives TXC to stabilize its capacity. 2. The design centers of automotive electronics supply chain and chipset plant have been moved to the mainland China one after another, which has the same competitive advantage. 3. 5G and the Internet of things industry continue to drive peripheral products and related applications, which will inject future growth momentum. 4. The high-level, high-precision and high stability products and market construction are becoming more and more complete, and seeking niche market and products continue to be the stable profit source of the company. 5. Eliminate US components in Made in China manufacturing, TXC aims to deeply explore the advantages developing China market and increase the opportunities of importingmaterials.	1. Japanese manufacturers have comparative advantages in brand, raw material production and technical ability, and cost structure. 2. Customer design to use cost saving material or integrated material design. 3. Trade disputes between China and the United States remain unresolved, and global economic risks remain. 4. Trade disputes between China and the United States affect the transfer of customer manufacturing location. 5. The demand of Chinese automobile customers is affected by tariff. 6. Countries are afraid of China's 5G technology development and need to diversify regional customer group business risks. 7. The demand of ultra miniaturized products is excessively concentrated in a single customer, and there is a risk of fluctuation.
Respond Strategies

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Strengthen the overseas marketing team and actively develop tier 1 customers in Europe, the United States, Japan, South Korea, etc.
Continue to tap into China's domestic demand market and channels, and actively become China's largest brand.
Strengthen the engineering and technical capabilities of all factories and accelerate the promotion of smart production.
Continue to introduce domestic and foreign professional communication and auto industry component R & D talents.
To create superior products, some products adopt strategic alliance, division of labor and cooperation, and reduce costs.
Strengthen product R & D capability and focus on time to market strategic planning.
Plan the cost structure to optimize roadmap and strive for future profit space.
Accelerate the expansion of sensor products and market layout.
Timely and close confirmation of client demand for flexible deployment, and continuous attention to the development of alternative products.
Strengthen the development of new products, new markets and new customers, and adjust strategies and resources in time.
Lean management, continuous optimization of all management links and improvement of operation efficiency.

II Major products’ important applications and their manufacturing process

(1) Major products’ important applications

Product	Product	Major Application
		Wired/Wireless, Module, Smart phone/Future phone, Bluetooth, Telephone terminal, Automotive,STB, NB/DT, Wearable, AR/VR, Game Console, Storage,Medical equipment
Crystals

		Base station,Wired/Wireless, Fiber optics communication, Mining machine ,Telphony terminal equipments, NB/DT, Server, storage device, Game Console,Automotive
	CXO`、`SO

		Smart phone/Future phone, Base Station, Satellite Communication, Wired/Wireless, Bluetooth, GPS/GNSS, Fiber optics communication, Automotive
	VC-TCXO`、`
Crystal	TCXO
Oscillators
		Base Station, Satellite Communication, Wired/Wireless, Fiber Optics Communication, Phony terminal equipment`、`Counter/Synthesizer
	VCXO`、`

	VCSO

		Base Station, Satellite Communication, GPS/GNSS, Wired/Wireless, Fiber Optics Communication
	OCXO

		Mobile device, Wearable
	Sensor

		Smart phone/Future phone, Smart Home, Wireless Networking, NB/DT, Automotive, Wearable
Tuning Fork

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(2) Manufacturing Process

Steps for crystal components manufacturing are: first we need to manufacture the quartz crysal needed for the electrical material. It involves the cutting, polish, cleaning of the wafer form. Then with the mechanical arms to place the wafer on the base and fixed with the silver based glue. Then package it under vaccum. For oscillators it is necessary to add one more unit of oscillating circuit IC with golden line conduction via amplified output of crystal chip oscillation. It requires more IC placement and wire bonding process compared to the quartz crystal.

－ i. Pre-manufacturing process quartz crystal.

==> picture [423 x 128] intentionally omitted <==

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

Crystal grinding grinding
Crystal cut (machines to bar (crude、medium、
bar or round shape)
fine)
Store Clean Differentiate
frequency
----- End of picture text -----

==> picture [32 x 58] intentionally omitted <==

－ ii. Post-manufacturing process quartz crystal (use silver, gold, nickel for electroplating, and the process would reduce crystal frequency. Fine tuning the electroplating that would reduce frequency error to 3~10ppm)

==> picture [412 x 137] intentionally omitted <==

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

Crystal Electroplating Crude freq Base fixed
cleaning adjustment
Aging/electrical Base, outside Fine tuning Glue and bake
/temperature prebaking/weld frequency, to fix the
testing ing, seal plating with crystal
silver
Final check and
storage
----- End of picture text -----

－ iii. Post manufacturing process crystal oscillator (use silver, gold, nickel for electroplating, and the process would reduce crystal frequency.)

==> picture [435 x 154] intentionally omitted <==

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

IC placement Crystal placement
Crystal Electroplating (Assembly electronic (Assembly crystal)
cleaning component)
Aging/electric Base, shell
Add barcode al/temperature Check for gas prebake/weldi
test barcode testing leaking ng, seal
Final check
and storage
----- End of picture text -----

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(3)Light Sensor manufacturing process

==> picture [417 x 159] intentionally omitted <==

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

Stud Bump IC Wafer Mount Dicing UV Ray
Irradiating
Marking IR-LED IR-LED Plasma
Die Bond Wire Bond
Breaking Encapsulant Underfill Flip Chip
Dispansing Bond
Final Test Tape & Reel
----- End of picture text -----

III. State of the major materials suppliers

The major materials for crystal and crystal oscillators include the base, wire bond, IC package, crystal slice and crystal bars. Major materials in light sensors are ceramic substrate, IC, VCSEL and packaging tape.

(1) All the materials come from the at least two suppliers, and this would minimize the risk of all materials coming from a single supplier. Our company’s procurement depends on the buying terms, state of supply, and specifications; before the materials to be ordered. And, it also depends on some special conditions that we would adjust the ratio of buying materials and this approach would help us not too concentrated the ordering from a single supplier, or running the risks of the orders being interrupted.
(2) All the suppliers have long term relationship with us. And, our friendship is good. With our company is growing strongly, these suppliers would also take highest 。
priority to satisfy our company needs Annually, we also meet with our suppliers on regular or irregular base to review our purchasing terms and any room for the improvement. This also helps a stable and continuous relationship in the materials supply.
(3) In considering the steady material supply, our company will provide the Rolling Forecast ， to the suppliers and the production preparations. This can shorten the delivery time and an assurance of on time delivery. If there is any unusual situation, these suppliers will accommodate our needs to assure a stable supply.

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IV. The suppliers and customers over than 10% of the past two years

(I) Main Suppliers

					Unit`：`NT$1,000	Unit`：`NT$1,000	Unit`：`NT$1,000

	2019				2020

Company	Amount	Percentage of annual procurement (%)	Relations hip with TXC	Company	Amount	Percentage of annual procurement (%)	Relations hip with TXC
K Company	865,929	25.13%	None	K Company	1,023,876	17.58%	None
S Company	378,850	11.00%	None
Others	2,200,650	63.87%	None	Others	4,799,803	82.42%	None
Total	3,445,429	100.00%		Total	5,823,679	100.00%

(II) Main Clients

Unit ： NT$1,000


	2019				2020

Company	Amount	Percentage of annual sales(%)	Relationship with TXC	Company	Amount	Percentage of annual sales(%)	Relationship with TXC
F Company	1,201,028	14.25%	None	F Company	1,768,487	16.01%	None
Others	7,229,942	85.75%	None	Others	9,279,905	83.99%	None
Total	8,430,970	100.00%		Total	11,048,392	100.00%

(III) Reasons for the increase or decrease

A. Purchase

The company’s main products are quartz series products (quartz crystals, quartz crystal oscillators) and light sensors. Its main procurement items in the last two years include IC, bases, wafers, covers, precious metals and other raw materials. Imported from abroad, due to the improvement of self-manufacturing ability and manufacturing process, in recent years, the chips have been gradually transferred to self-manufactured or supplied by mainland factories; in addition, due to the continuous growth of market demand, most of the products sold are self-made from various production bases, and the insufficient quantity is supplied to foreign products. The company has been in contact with various suppliers for many years, and the relationship is good. The relevant guarantee clauses have been specified in the purchase contract for important raw materials, and the materials should be supplied by more than two suppliers as far as possible. There should be no supply interruption or excessive supply. Concentration risk, there is no significant change in substance.

B. Sales

The company's main products are quartz series products (quartz crystals, quartz crystal oscillators) and sensors, and its sales targets are mainly downstream application manufacturers such as information, communications, Netcom, and consumer products. Due to changes in the industrial environment, 5G drives the increase in demand for terminal application products. With the addition of new products and capacity

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expansion, sales and revenue increase. The company’s main customers are all major international manufacturers. In the future, it looks forward to automotive, Internet of Things, and communications. And 5G related application products continue to grow, so there is no excessive concentration of sales and risks.

V. Production and monetary values for the past two years

V. Production and	monetary values for the past two years	monetary values for the past two years	monetary values for the past two years	monetary values for the past two years	monetary values for the past two years	monetary values for the past two years
	Unit: 1000 PCS/NT$1000
Year	2019			2020
Major products\|Capacity	Production	Value	Capacity	Production	Value
DIP Crystal Product	90,000	78,651	84,393	60,000	52,570	55,688
SMD Crystal Product	3,500,000	3,156,922	5,615,880	4,100,000	3,683,232	5,997,427
Others	-	2,435,323	2,106,476	-	2,177,748	4,088,684
Total	3,590,000	5,670,896	7,806,749	4,160,000	5,913,550	10,141,799

VI. Volumes of sales and monetary values of the past two years

Unit: 1000 PCS/NT$1000

	2019	2019	2019	2019	2020	2020	2020	2020
Year	Domestic sales		Export		Domestic sales		Export
Major products\|
	Quantity	Value	Quantity	Value	Quantity	Value	Quantity	Value
DIP Crystal Product	7,773	10,227	87,464	136,685	8,616	11,123	59,970	94,490
SMD Crystal Product	85,100	239,190	3,087,182	7,084,934	147,807	390,684	3,840,447	9,571,808
Others	7,124	7,964	1,460,484	951,970	12,143	13,194	2,177,011	967,093
Total	99,997	257,381	4,635,130	8,173,589	168,566	415,001	6,077,428	10,633,391

III Employees’ average years in service, age, and educational background distribution

Year	Year	2019	2020
	Engineer	598	667
	Administrative	459	489
Total Number
	Sale	115	118
Employees
	Technicians/Operators	1,609	1,899

	Total	2,781	3,173
Average Age		33.52	33.52
Average Years in Service		6.17	6.07
	Ph.D.	0.55%	0.54%
	M.S.	5.55%	5.70%
Distribution of
	B.S.	40.97%	42.38%
Educational Background
	HighSchool	30.84%	29.67%
	Below High School	22.09%	21.71%

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IV Data on our environmental protection expense

(I) Description of environmental punishment

Pingzhen plant, Ningbo plant and Chongqing plant of the company have no relevant environmental penalty issues.

(II) Description of the application, payment or establishment of a pollution facility establishment permit or pollution discharge permit or a pollution prevention and control fee or a person of a special unit for environmental protection that is required by law
(1) Pingzhen factory is responsible for the production of chips and quartz components. According to the regulations, it has applied to the local competent authority for relevant license documents for waste, waste water and fixed pollution sources generated in the production process, and set up relevant environmental protection personnel to operate and maintain according to the requirements of the license documents, so as to maintain the effective operation of relevant treatment facilities. In 2020, we carried out energy-saving measures such as water-saving improvements in washing towers, the purchase of high-efficiency lighting fixtures for replacement, energy-saving improvements in air-conditioning cooling towers, and replacement of air compressors with new ones, which reduced power consumption by approximately 42,000 kWh per month, and continued active follow-up Promote energy-saving work, conduct investigations and identification of energy use efficiency of large energy consumers such as lighting, ice water mainframes, motors, air compressors, and water pumps, so as to implement energy-saving improvement measures, and hope that we can continue to do another distraction to reduce environmental impact. The total amount of expenditure in 2020 was about NT 7 million. The main purpose was the improvement of energy-saving measures, air pollution fees, environmental clean-up, work environment testing, operation and maintenance of pollution prevention equipment, and protective gear.
(2) Ningbo plant continues to maintain the largest production capacity of quartz components in the world. In the process of production and operation, it pays special attention to environmental governance and social contribution, so as to actively respond to the requirements of the newly implemented "environmental protection law", strictly abide by the bottom line and meet and exceed the requirements of local environmental protection law enforcement. In 2020, a total of RMB560,000 was spent on environmental protection, the P4 vertical scrubber was replaced. In order to implement the main responsibility system of solid waste pollution prevention and control, the enterprise has greatly improved its daily environmental protection awareness. In order to implement the main responsibility system of solid waste pollution prevention and control, the 45 key pollutant indicators tested by the enterprise are 100% in line with DB33_T 892-2013 technical guidelines for risk assessment of polluted sites concerning the selected values of soil risk assessment of pollutants, indicating that the environmental protection measures of the enterprise are effective and the soil is not polluted. There are 4 unorganized waste gas sampling points in the

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plant boundary, and the 4 key pollutant indexes tested are 100% in line with the national control air quality standard, with a superior rate of 80%, indicating that the air pollution control measures of the enterprise are effective.

The enterprise actively cooperates with the government to promote the construction of "zero sewage discharge" for industrial enterprises in the region, completes the transformation of rainwater and sewage diversion within the plant area of the enterprise with high quality, and repairs the abnormal rainwater and sewage pipe network.

(3) Chongqing plant has smooth operation of environmental protection facilities, stable product quality, and good operation status of all equipment. In order to meet the "environmental protection law" and local environmental protection requirements, and ensure the hardware requirements of operation, maintenance and management of environmental protection facilities, a total of RMB1,100,000 was spent on environmental protection treatment in 2020, completing the optimization and maintenance of environmental protection facilities prevention and treatment equipment, including the operation and maintenance of wastewater and waste gas treatment facilities, detection and replacement of various environmental monitoring instruments, internal and external cleaning of waste gas and washing tower, capacity expansion and transformation of reaction tank, improvement of sludge filter and replacement facilities, legal disposal of hazardous wastes and disposal cost of RMB550,000, established waste alcohol and IPA combustion equipment, and approved by the High-tech Zone Environmental Protection Bureau in accordance with the law; hazardous waste is legally disposed of, and the disposal cost is about RMB 400,000; Relying on self-monitoring and third-party periodic inspection data, the operation optimization, maintenance and adjustment of processing facilities are carried out to achieve 100% compliance emissions. In November 2020, it successfully passed the local third-party renewal monitoring, and was registered and reviewed with the national pollutant discharge permit in accordance with the law, and passed smoothly and obtained a receipt. Actively study the feasibility of recycling waste isopropanol and waste alcohol, hoping to reduce the impact on the environment

(III)The implementation of safety and health

(1) The Pingzhen factory has established an occupational safety and health committee in accordance with the law. There are currently 11 members, 4 of whom are elected. Occupational safety and health meetings are held every quarter to discuss and deal with occupational safety and health related issues. And completed the certification of the ISO 45001 occupational safety and health management system in 108, looking forward to the establishment of new standards to improve the safety and health technology of the factory, reduce overall operating risks and reduce operating losses. In 2020, through the activities of reducing workplace risks and enhancing safety awareness, AED first aid equipment was built in the factory, and the entire factory personnel were invited to explore the safety hazards that may occur during the operation to make improvements, conduct disaster prevention and evacuation drills, and inspect the proper fire safety equipment in the factory. In order to build

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up personnel’s accident prevention and response capabilities, and jointly protect workplace safety; in addition, it also handles employee health checkups, bone density testing, and provides health promotion activities such as physical and mental health promotion lectures, and continues to create a healthy workplace. For high-risk employees whose abnormal workloads such as shifts, night work, and long hours of work may contribute to disease, on-site physicians and health care staff provide interview guidance and health management measures to prevent employees from suffering from cerebral cardiovascular diseases due to overwork. And to achieve the purpose of early detection and early treatment to ensure the physical and mental health of related employees. For occupational safety and health-related training, we also provide education and training for new recruits and on-the-job retraining in accordance with relevant laws and regulations. For accidents in the factory, we also complete investigations, improvements, and report to the competent authority in accordance with relevant regulations, and continue to manage through e-commerce to simplify the process and implement information communication to make the management procedures of chemicals and contractors more complete. In terms of response to emerging infectious diseases, for the currently threatening COVID-19, occupational safety units have regularly monitored and evaluated the impact on the health and safety of plant personnel, and established "Severe Special Infectious Pneumonia (COVID-19)" through epidemic response members. The Contingency Handbook is a response strategy for the plant’s epidemic prevention and response. The strategy mainly includes: response common sense, preparation of epidemic prevention materials, attendance guidelines and other necessary management matters, etc., and follow the guidelines and epidemic prevention strategies published by the Disease Control Department to make timely amendments to protect employees in the factory.

(2) Ningbo Plant has been guided by local production safety regulations and requirements since 2012. The company's production safety management committee has combined with the social responsibility management system operation team to integrate labor rights, health and safety, environmental energy, business ethics, management systems, etc. Resources related to health and safety includes the establishment of a safety production room and an on-site improvement team to comprehensively manage and promote factory safety production management issues. There are no occupational diseases and EHS violations throughout the year. Minor injuries are controllable and are carried out in accordance with industrial injury management requirements. Incident reporting and compliance handling, overall achieving the goal of zero industrial safety accidents. The company consists of 9 safety management personnel with compliance qualifications, 8 chemical managers, and 25 5S on-site improvement personnel in each production workshop to form a safety production management team. According to the annual safety production target responsibility letter, the workshop conducts mutual inspections every month. Weekly inspections, daily self-inspection of posts, implementation of safety production standardization (light industry level 3) management requirements, 188 internal monthly inspections and 12 external EHS inspections throughout the year, a total of 89 hidden hazards were found in internal and external inspections, and 93.5% rectifications were completed. The annual investment in occupational health and safety management costs is about RMB 1.5206 million (approximately RMB 1,086/year per capita, including occupational health hazard environmental monitoring, occupational health checkups for 94 people, maintenance of fire protection facilities, safety training, industrial injury insurance, occupational safety evaluation,

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and labor protection And other expenses); In 109, the P5 and layout changes and improvements of the whole plant were completed as planned, and the occupational health and safety "three simultaneous" evaluation and qualified acceptance were carried out in accordance with the law; In 2020, full compliance was completed and safety production at the plant, workshop, and team levels was initiated. The number of qualified people in the third-level education is 351 people, the coverage of new recruits is 100%, and the ISO45001: 2018 occupational health and safety management system certification audit has been completed to ensure the systematic implementation and landing of the company's safety and health management activities. The company has initiated the production safety liability insurance for key positions in response to the local government's initiative to be a "model student in production safety".

(3) The Chongqing plant established the "Safety Production Management Committee" in March 2013. It has always followed local safety production regulations and the requirements of the government safety production supervision and management department to carry out safety production management activities, and completed the [Safety Production Standardization Enterprise] according to the requirements of the local government. The recognition of the third-level certificate. In order to achieve the goal of zero industrial accidents, the safety production room organizes each unit to conduct a cross-departmental safety inspection every month. The production units are divided into departments and carry out safety inspections every week, and are divided into teams and groups, and safety inspections are carried out every day; In addition, the safety production room holds monthly meetings to track the lack of improvement to ensure that potential safety hazards are eliminated immediately. At the same time, the safety production room also has a complete mechanism for investigation, reporting and handling of industrial safety incidents, so that no major safety incidents have occurred in the factory so far. The Work Safety Supervision Bureau inspects the factory from time to time every year, and no obvious violations or defects are found. In addition, the safety production room also supervises all departments to do a good job in safety production three-level education, work injury insurance, occupational hazard detection and evaluation, PPE protection, occupational health examination, equipment improvement and other related work. According to statistics related to safety production investmemt in 2020 is about RMB 940,000.

(IV) Description of hazardous substance management system

The protection of the global environment is an important issue in the 21st century. Based on the belief of protecting the earth and benefiting the next generation, as well as the corporate responsibility of environmental protection to jointly maintain the overall ecological environment, the company undertakes the mission of contributing to the society and actively promotes environmental management activities in a prudent manner.

The Company’s zero hazardous substances policies are as follows:

In order to fulfill the goal of green earth citizens, we promise:

(1) According to the most stringent regulations or customer requirements, to be the best green product partner for customers.
(2) Confirm the operation of the organization and provide resources, promote environmental education, and strengthen the environmental awareness and objectives of all staff and supply

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partners.

(3) Design green products, pay attention to products and production process without harmful substances.
(4) Carry out continuous improvement through relevant activities of the company to achieve the goal of sustainable operation of the company.

The company complies with RoHS 2.0 (2011/65/EU), (EU) 2015/863, WEEE (2012/19/EU), PFOS (2006/122/EC), (EU) no 757/2010, REACH(EC) No 1907/2006 Directive requirements that lead (PB), cadmium (CD), mercury (Hg), hexavalent chromium (Cr6 +, PBB, PBDE, DiBP, DEHP, DBP, BBP, PFOS and other substances shall be prohibited in accordance with international standards since July 1, 2006. Based on regulations and customer requirements, in addition to IECQ QC 080000 certification of hazardous substance process management system, and green purchasing activities as the basis for continuous provision of green products to users; in order to ensure product quality in line with green related environmental protection regulations, strictly control the use of environmental management substances in products, and also require the supplier's products to comply with the company's regulations on environmental management substances, so that from design to manufacture of products, all goods can meet the conditions of non use, non mixing and non pollution, in order to reduce the impact of products and services on the environment; in order to strengthen the management of green products in the supply chain, suppliers are encouraged to import IECQ QC 080000 hazardous material system outside the basic ISO 9001 quality system, so as to enforce the implementation of environmental management activities.

(V) Other supplementary briefing

In order to strengthen the fulfillment of corporate social responsibility, TXC is regularly audited to ensure that the code of conduct and procedures in labor, health and safety, environment, ethics and management systems are consistent with the "RBA Responsible Business Alliance Code of Conduct". In addition, the "Greenhouse Gas Inventory Report" in 2020 was verified by the British Standards Institution (BSI) and has been prepared in accordance with the new version of ISO 14064-1: 2018 Greenhouse Gas Inventory Standard. It is expected to be carried out in accordance with the new version of the standard in 2021. Verify the job. The corporate social welfare activities in 2020, please refer to the company's website for detailed activities.

In the future, we will continue to promote various environmental, safety and health-related activities in the factory to ensure the safety and sanitation of the working environment and maximize the safety of colleagues. The company’s detailed information on the promotion and tracking of environmental protection is posted on the company’s website.

Items	Main contents of EHS promotion
1	ISO 14064-1: 2018 Management System Transition Case
2	Stress management, physical and mental relaxation activities

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3	Activities to reduce workplace risks and improve safety awareness
4	Low-energy-consumption lighting (LED) is used for factory lighting
5	Washing tower water saving improvement project
6	Energy saving case for air conditioning cooling tower
7	Air compressor replacement and energy saving case

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V Labor Relations

(II) Employee welfare measures

(1) Employee welfare

Since the establishment of the company, there has been a harmonious relationship between employer and employee. As of the latest year and the date of printing of the annual report, there has been no loss caused by employer/employee disputes. Since the establishment of the company, there has been no major labor and capital disputes. In addition to handling employer/employee meetings, employee opinion surveys, employee symposiums and foreign employee symposiums in accordance with the law, the company has also set up employee opinion boxes and other opinion response channels to protect the rights and interests of employees. We have spared no efforts in preserving employee benefits. The welfare measures of employees are as follows:

Insurance &	Labor, health, group insurance, retirement reserve, housing fund (mainland subsidiary),social insurance(mainland subsidiary)
retirement
	Employee compensation, shareholding trust, Spring Festival bonus, autumn festival bonus andperformance bonus
Profit sharing

	Three festivals gift money, birthday gift money, marriage gift money, childbirthgift money,hospitalizationgift money,funeralgift money
Gift money

	1. Group insurance: life insurance, major disease insurance, accident injury insurance, accident medical treatment, hospitalization medical treatment, occupational disaster insurance 2. Regular health examination: physical examination, blood routine examination, vision examination, hearing examination, liver function examination, blood lipid examination, urine examination, chest X-ray photography, etc 3. Supervisor health examination 4. Old age commercial insurance, serious illness medical insurance and basic medical insurance(mainland subsidiary)
Medical
insurance

	Tourism activities at home and abroad, staff sports meeting, yearly events, various ball games, special store discounts, diversified staff association activities,relief massage station service, health promotion seminars/activities ,family days, various theme activities held according to festivals
Activities

Emergency	Subsidy according to the actual situation of employees
relief
	Buy all kinds of books, magazines, newspapers, VCD/DVD multimedia for employees to read and enjoy
Book reading

	Improve promotion channels, overseas company development opportunities and overseas companytrainingopportunities, pay performance bonus
Other welfare

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according to operation conditions, commendation of senior excellent employees, annual outstanding project commendation, annual outstanding employee commendation, employee proposal award, employee children scholarship, patent award, project award, further education subsidy Staff canteen, staff dormitory, bike/car parking space, billiard room, basketball court, badminton court, gymnasium, nursing (milk collection) Facilities room, infirmary, convenience store, training classroom, library, chess and card room (mainland subsidiary)

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(2) Employee education and training
i. The Company provides employees a multiple learning environment. Colleagues can continually challenge their growth limit through internal ／ external training, OJT, KM （ knowledge management system ） , reading clubs, online ／ physical library, and supervisor ／ peer instruction. At the same time, through the new employees ／ professional technology ／ supervisor coaching ／ general knowledge course ／ self-development education and training system to bring maximun satisfaction for employees! On the other hand, through planning of job category ／ job level, work rotation, project allocation and overseas assignments to integrate their lives with their careers and enable them enjoy the happiness of growth in knowledge and skills and develop a bright future.
ii. The Company has established Education and Training Guidelines and Mandatory Occupational Course Guidelines and our subsidiaries have established Employee Promotion and Reassignment Guidelines to plan related training courses in accordance with occupational and professional requirements in order to improve employee knowledge and skills, overall quality of employees and operation performance. Related education and training performance in 2020 is listed in the table below:

(a) PCF Factory

Item	No. of Class	No. of Sessions	No of Trainees	No. of Hours	Expense(NTD)
1. Management Training	9	12	669	2,463	360,885
2. Job Training	103	154	3,643	6,172	657,485
3. General Training	2	2	2	5	-
4. New employees Training	27	27	260	1,680	-
Total	141	195	4,574	10,318	1,018,370

(b) NGB Factory
Item	No. of Class	No. of Sessions	No of Trainees	No. of Hours	Expense(RMB)
1. Management Training	23	25	201	2,449	69,103
2. Job Training	45	48	1,019	6,703	85,930
3. General Training	41	151	16,621	36,624	2,000
4. Other Training	7	7	94	428	2,400
Total	116	231	17,935	46,203	159,433

(c) CKG Factory

Item	No. of Class	No. of Sessions	No of Trainees	No. of Hours	Expense(RMB)
1. Management Training	4	4	428	3,424	160
2. Job Training	14	27	2,968	7,420	1,080
3. General Training	33	66	5,860	14,840	3,100
4.Project Training	4	4	80	640	160
5. Other Training	2	2	1,600	6,400	80
Total	57	103	10,936	32,724	4,580

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iii. The financial people obtained the relevant license specified by the competent authority

The Company’s three finance supervisor qualified for Professional Certification of Finance and Accounting Supervisor of Publicly-listed Companies sponsored by the R.O.C. Accounting Research Development Fund.
One financial staffs of the Company acquired the Internal Auditor Certificate issued by the Internal Auditing Association.
One financial staff of the Company acquired the Stock Professional Services certification test issued by the Securities and Futures Bureau, Financial Supervisory Commission.
One financial staff of the Company acquired the Certified Public Accountant issued by the Ministry of Examination.
Two financial staff of the Company acquired the Certified Accountant issued by the Ministry of Examination.
One financial staffs of the Company acquired the Certificate of Securities Salespeerson issued by the Ministry of Examination.
Two financial staffs of the Company acquired the Certificate of PMP (Project Management Professional
Two of the Company’s financial officer has obtained the “Certificate of Proficiency Test for Associated Persons of Securities Firms” issued by the Securities and Futures Institute
One of the Company’s financial officer has obtained the “Certificate of Proficiency Test for Elementary Loan Officer” issued by the Securities and Futures Institute
Two financial personnel of the company have obtained the certificate of basic corporate governance aptitude test issued by the Certification Foundation

(3) Pension System Implementation

  - TXC’s employee retirement measures are fixed according to labor standard laws; in accordance with period legal reminders, reseave 9% of monthly salary for retirement preparatory funds are paid into the Bank of Taiwan, and an Occupational Retirement Preparatory Fund Supervisory Committee is then responsible for managing and using the retirement fund. Starting July 1[st] , 2005, in accordance with labor retirement fund regulations, reseave 6% of monthly salary for monthly retirement payments are transferred into special individual retirement accounts established by the department of labor; A separate appointed agent retirement fund was established in January 2007, reseave 8% of monthly salary for employee pension to ensure that retirement plans are managed professionally.

(4) Labor and Management Negotiations and Employee Rights
In addition to handling labor-management meetings in accordance with the law, the company also organizes employee satisfaction surveys, employee discussions, and foreign personnel meetings, and sets up multiple channels of communication such as employee suggestion boxes, and is committed to providing a smooth communication channel so that the company's direction and employees' opinions can be fully realized. Communicate and serve as the basis for improving and providing a better working environment and conditions. Based on the protection of employees' work safety and the protection of the work environment and personal safety of employees, in addition to the establishment of the "Occupational Safety and Health Committee", regular committee meetings are held to review the effectiveness of business promotion and occupational safety and health matters, and various management measures are also in place. And ask their colleagues to fully implement. In addition to insuring group insurance every year, the company

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regularly holds occupational safety and health lectures, and sends people to participate in relevant occupational safety and health courses, and set up "TXC Emergency Response Plan" and "Environmental Safety Management Manual" to ensure the protection of their colleagues. Please refer to our website for safety and calm response to emergencies. In order to achieve the goal of zero disasters, the company will revise the annual emergency contingency plan and the environmental safety management manual from time to time, and then formulate detailed execution operations according to the content of the plan, and the implementation of the project schedule and content by the public institution, and then through the audit system. Exploring the lack of implementation, setting the emergency contingency plan for the next year, the management manual for environmental safety and health, and reviewing the amendments at any time according to the implementation process and auditing, etc., to reduce the risk of damage to the public institutions, in order to achieve the ultimate goal of zero disaster.

(II) The losses suffered in the recent years due to labor disputes, and the estimated current and future estimated amounts and corresponding measures: None.
(III) Ether there is a defined employee behavior or ethical code The company has set a second edition of the "TXC Code of Conduct" in both Chinese and English to regulate the behavioral ethics of all subordinates of the company.

(IV) Fulfillment of social responsibility

There company’s corporate social responsibility has always including three aspects: corporate philanthropy, corporate governance and environmental safety & health. In the future, related resources from external units that have been cooperating over a long period with our company will be fully integrated. This combined with the high level of enthusiasm and caring shown by our volunteer employees and the newly established charity and compassion foundation will show our commitment to displaying a spirit of ‘giving back to society’, making maximum use of limited resources and encouraging the joint participation of neighboring communities and companies. By making a greater impact with our philanthropic activities, TXC will set out a path for sustainable operations and expand the reach of our philanthropy. Please refer to the company’s website.

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VI Important Contracts

				Limitation
Contractual Nature	Contract Party	Start Date-End Date	Main Content		Subsidiary
				Clause

Contracting	China Construction Eighth Engineering Bureau Co., Ltd	2018/07/20~2021/09/30	Zhongyang project construction contract	Nil	Chongqing All Suns Company Limited
Software licensing	American Oracle Co., Ltd.	2002/09~ Permanent licensing	Oracle ERP R12.1.3	Licensing, transfer prohibited	PCF
Software licensing	Hualing Technology Co., Ltd.	2002/09~ Permanent licensing	Signing flow Agentflow	Licensing, transfer prohibited	PCF
Software licensing	American Oracle Co., Ltd.	2011/04~ Permanent licensing	Oracle Agile PLM	Licensing, transfer prohibited	PCF
Software licensing	Zitong Computer Co., Ltd.	2011/08~ Permanent licensing	GUI/VAT Product licensing	Licensing, transfer prohibited	PCF
Software licensing	American Oracle Co., Ltd.	2013/12~ Permanent licensing	Oracle WebLogic & WebCenter Portal	Licensing, transfer prohibited	PCF
Software licensing	Shuowang Information Co., Ltd.	2014/10~ Permanent licensing	(SmartKMS 8)Knowledge Management System	Licensing, transfer prohibited	PCF
Software licensing	XuLian Technology Co., Ltd	2015/03~ Permanent licensing	Training Master (CTMS)	Licensing, transfer prohibited	PCF
Software licensing	XuLian Technology Co., Ltd	2015/03~ Permanent licensing	Power Master (CSAS)	Licensing, transfer prohibited	PCF
Software licensing	Zitong Computer Co., Ltd	2019/11~ Permanent licensing	CiMes Software product licensing	Licensing, transfer prohibited	PCF
Software licensing	Feixunte Technology Co., Ltd	2020/01~ Permanent licensing	EAP SECS Development Tools - Runtime License RMS Site Limited License	Licensing, transfer prohibited	PCF
Software licensing	Hangzhou Jinmai Software Co., Ltd.	2010/07~ Permanent licensing	CAD Internet version software licensing	No transfer without consent	NGB
Software licensing	Hangzhou Yinyang Information Co., Ltd.	2017/05~ Permanent licensing	Office2016 and WinPro Licensing	Licensing, transfer prohibited	NGB
Software licensing	Yanwei Trading (Shanghai) Co., Ltd.	2017/12~ Permanent licensing	SolidWorks standard 2017 package	Licensing, transfer prohibited	NGB
Software licensing	Guangzhou Saiyi Information Technology Co.,Ltd.	2018/06/28~ Permanent licensing	Smart factory	Licensing, transfer prohibited	NGB
Software licensing	Shanghai Ouxin Information Technology Co., Ltd.	2018/07 ~2021/06	F-Secure Antivirus software	Licensing, transfer prohibited	NGB

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Software licensing	Shanghai Chuangsheng Information Technology Co.,Ltd.	2018.10~ Permanent licensing	UG10000-WISD and NX11110	Licensing, transfer prohibited	NGB
Software licensing	Fansoft Software Co., Ltd.	2020.04~ Permanent licensing	Electronic Data Analysis System	Licensing, transfer prohibited	NGB
Software licensing	Shanghai Fanwei Network Technology Co., Ltd.	2020.04~ Permanent licensing	Pan Micro OA	Licensing, transfer prohibited	NGB
Software licensing	Aijia Software (Suzhou) Co., Ltd.	2020.12~ Permanent licensing	HCP System	Licensing, transfer prohibited	NGB
Software licensing	Shanghai Hupu Information Technology Co., Ltd.	2014.08~ Permanent licensing	Intranet security management software	Licensing, transfer prohibited	CKG
Bank financing	China Trust Bank	2020.01.03~2025.01.03	Medium and long term loans	None	PCF
Bank financing	China Trust Bank	2020.05.29-2022.05.28	Medium and long term loans	None	NGB
Bank financing	China Trust Bank	2020.02.27-2022.02.28	Medium and long term loans	None	NGB
Bank financing	China Trust Bank	2020.09.25~2021.09.24	Short-term loans	None	CKG

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Chapter 6 Financial Information

I. Abbreviated Balance Sheets and P/L Statements for the Past 5 Years

(I) Abbreviated Consolidated Balance Sheets (IFRS)

Unit ： NT$ 1,000


		Financial information for the post 5 years (Note1)


		2016	2017	2018	2019	2020


Current assets		8,818,130	7,983,192	7,117,289	7,945,036	10,001,872
		4,277,905	4,369,810	4,110,722	4,054,149	4,808,588
Property, plant and equipment
(Note 2)

Intangible assets		10,798	8,013	21,831	27,816	41,684
Other assets (Note 2)		1,735,135	1,041,784	1,311,884	1,341,769	1,749,567
Total assets		14,841,968	13,402,799	12,561,726	13,368,770	16,601,711
	Before	3,156,105	2,276,802	2,088,860	2,796,519	5,093,290
Current	distribution
liabilities	After distribution	4,023,425	3,051,195	2,708,374	3,570,912	(Note 6)

Long-term liabilities		1,912,681	1,961,406	1,722,026	1,874,500	1,853,415
	Before	5,068,786	4,238,208	3,810,886	4,671,019	6,946,705
Total liabilities	distribution
	After distribution	5,936,106	5,012,601	4,430,400	5,445,412	(Note 6)
		9,719,652	9,122,699	8,750,840	8,697,751	9,655,006
Interests attributable to parent
company

Common stock		3,097,570	3,097,570	3,097,570	3,097,570	3,097,570
Capital surplus		1,665,224	1,665,224	1,665,116	1,666,690	1,668,269
	Before	4,163,101	4,242,994	4,243,060	4,457,863	5,235,929
Retained	distribution
earnings	After distribution	3,295,781	3,468,601	3,623,546	3,683,470	(Note 6)

Other interests		793,757	116,911	(254,906)	(524,372)	(346,762)
Treasury Stock		0	0	0	0	0
Non-controlling	interests	53,530	41,892	0	0	0
Total	Before	9,773,182	9,164,591	8,750,840	8,697,751	9,655,006
stockholders’	distribution
equity	After distribution	8,905,862	8,390,198	8,131,326	7,923,358	(Note 6)

＊ If individual financial reports are prepared, the Company shall also prepare condensed balance sheets and statements of income for the past five years.

＊ For financial data that has used international accounting reporting standards for less than five years, table (2) should be prepared separately with financial data which uses our country’s financial accounting standards. Note 1: The years which have not yet been audited and certified by a CPA should be noted.

Note 3: Listed companies or companies with securities sold by securities firms should list the annual report publishing dates up to the previous quarter. Whether or not the financial data has been certified, audited or both should also be noted.

138

Note 4: For the above amounts after distribution, the amounts listed should be based on the following year’s shareholders meeting resolution.

Note 5: For financial data which requires self-correction or revision as notified by the competent authorities, the corrected or revised amounts should be listed and the circumstances and reasons should be noted.

Note 6: Earnings in 2020 have not yet passed shareholders’ meeting resolution as of March 11, 2021.

139

(II) Abbreviated Balance Sheets (IFRS)

Unit ： NT$ 1,000

		Financial information for thepost 5years(Note1)	Financial information for thepost 5years(Note1)	Financial information for thepost 5years(Note1)	Financial information for thepost 5years(Note1)	Financial information for thepost 5years(Note1)

		2016	2017	2018	2019	2020

Current assets		4,650,756	4,068,933	3,896,214	3,924,645	5,590,850
		2,055,749	2,109,112	1,894,487	1,961,704	2,328,906
Property, plant and
equipment (Note 2)

Intangible assets		2,638	543	170	3,692	8,984
Other assets (Note 2)		7,195,572	6,526,246	6,162,079	6,214,496	6,503,968
Total assets		13,904,715	12,704,834	11,952,950	12,104,537	14,432,708
Current	Before	2,561,647	1,628,509	1,626,245	1,794,064	3,036,340
liabilities	distribution
	After	3,428,967	2,402,902	2,245,759	2,568,457	(Note 6)
	distribution
Long-term liabilities		1,623,416	1,953,626	1,575,865	1,612,722	1,741,362
Total	Before	4,185,063	3,582,135	3,202,110	3,406,786	4,777,702
liabilities	distribution
	After	5,052,383	4,356,528	3,821,624	4,181,179	(Note 6)
	distribution
		9,719,652	9,122,699	8,750,840	8,697,751	9,655,006
Interests attributable to
parent company

Common stock		3,097,570	3,097,570	3,097,570	3,097,570	3,097,570
Capital surplus		1,665,224	1,665,224	1,665,116	1,666,690	1,668,269
Retained	Before	4,163,101	4,242,994	4,243,060	4,457,863	5,235,929
earnings	distribution
	After	3,295,781	3,468,601	3,623,546	3,683,470	(Note 6)
	distribution
Other interests		793,757	116,911	(254,906)	(524,372)	(346,762)
Treasury Stock		0	0	0	0	0
Non-controlling		0	0	0	0	0
interests
Total		9,719,652	9,122,699	8,750,840	8,697,751	9,655,006
	Before
stockholders’
	distribution
equity

	After	8,852,332	8,348,306	8,131,326	7,923,358	(Note 6)
	distribution

＊ If individual financial reports are prepared, the Company shall also prepare condensed balance sheets and statements of income for the past five years.

Note 1: The years which have not yet been audited and certified by a CPA should be noted.

Note 3: Listed companies or companies with securities sold by securities firms should list the annual report publishing dates

up to the previous quarter. Whether or not the financial data has been certified, audited or both should also be noted. Note 4: For the above amounts after distribution, the amounts listed should be based on the following year’s shareholders meeting resolution.

Note 6: Earnings in 2020 have not yet passed shareholders’ meeting resolution as of March 11, 2021.

140

(III) Abbreviated Consolidated P/L Statements (IFRS)

Unit ： NT$ 1,000

Year	Financial information for thepost 5years (Note1)	Financial information for thepost 5years (Note1)	Financial information for thepost 5years (Note1)	Financial information for thepost 5years (Note1)	Financial information for thepost 5years (Note1)

	2016	2017	2018	2019	2020
Item

Net operating revenue	9,637,101	8,781,552	8,156,268	8,430,970	11,048,392
Gross profit	2,554,069	2,186,077	1,827,626	2,007,091	3,332,806
Operating income	1,114,394	802,056	533,301	632,138	1,617,660
Nonoperating gains	77,878	272,877	200,196	132,439	91,057
and losses
Income before income	1,192,272	1,074,933	733,497	764,577	1,708,717
tax
	1,013,692	951,017	644,249	671,782	1,429,287
Continuing operations
net Income

Discontinuing	0	0	0	0	0
operations net Loss
Net income (loss)	1,013,692	951,017	644,249	671,782	1,429,287
Other	(1,264,408)	(692,288)	(246,756)	(106,931)	300,782
comprehensive income
`（`net amount`）`
Total comprehensive	(250,716)	258,729	397,493	564,851	1,730,069
income
Net income	1,016,164	962,655	644,350	671,782	1,429,287
attributable to parent
company
Net income	(2,472)	(11,638)	(101)	0	0
attributable to
non-controlling
interests
Comprehensive	(248,244)	270,367	397,594	564,851	1,730,069
income
attributable to parent
company
Comprehensive	(2,472)	(11,638)	(101)	0	0
income
attributable to
non-controlling
interests
Earnings per share	3.28	3.11	2.08	2.17	4.61

＊ If individual financial reports are prepared, the Company shall also prepare condensed balance sheets and statements of income for the past five years.

Note1: The years which have not yet been audited and certified by a CPA should be noted.

2: Listed companies or companies with securities sold by securities firms should list the annual report publishing dates up to the previous quarter. Whether or not the financial data has been certified, audited or both should also be noted.

141

3: Gains (losses) from discontinued operations are listed as net amounts after income tax deduction.
4: For financial data which requires self-correction or revision as notified by the competent authorities, the corrected or revised amounts should be listed and the circumstances and reasons should be noted.
5: Earnings in 2020 have not yet passed shareholders’ meeting resolution as of March 11, 2021.

142

(IV) Abbreviated P/L Statements (IFRS)

Unit ： NT$ 1,000


Year
	Financial information for the post 5 years (Note1)


Item	2016	2017	2018	2019	2020
Net operating revenue	7,887,769	7,054,964	6,556,906	6,672,071	9,140,414
Gross profit	1,633,015	1,256,789	1,015,820	1,074,968	1,946,727
Operating income	767,750	452,816	324,442	303,472	978,319
Nonoperating gains and	364,143	572,854	362,445	408,074	647,492
losses
Income before income tax	1,131,893	1,025,670	686,887	711,546	1,625,811
	1,016,164	962,655	644,350	671,782	1,429,287
Continuing operations net
Income

Discontinuing operations net	0	0	0	0	0
Loss
Net income (loss)	1,016,164	962,655	644,350	671,782	1,429,287
Other	(1,264,408)	(692,288)	(246,756)	(106,931)	300,782
comprehensive income
`（`net amount`）`
Total comprehensive income	(248,244)	270,367	397,594	564,851	1,730,069
	1,016,164	962,655	644,350	671,782	1,429,287
Net income attributable to
parent company

	0	0	0	0	0
Net income attributable to
non-controlling interests

Comprehensive income	(248,244)	270,367	397,594	564,851	1,730,069
attributable to parent
company
Comprehensive income	0	0	0	0	0
attributable to
non-controllinginterests
Earnings per share	3.28	3.11	2.08	2.17	4.61

＊ If individual financial reports are prepared, the Company shall also prepare condensed balance sheets and statements of income for the past five years.
＊ For financial data that has used international accounting reporting standards for less than five years, table (2) should be prepared separately with financial data which uses our country’s financial accounting standards.

Note1: The years which have not yet been audited and certified by a CPA should be noted.

2: Listed companies or companies with securities sold by securities firms should list the annual report publishing dates up to the previous quarter. Whether or not the financial data has been certified, audited or both should also be noted.
3: Gains (losses) from discontinued operations are listed as net amounts after income tax deduction.
4: For financial data which requires self-correction or revision as notified by the competent authorities, the corrected or revised amounts should be listed and the circumstances and reasons should be noted.
5: Earnings in 2020 have not yet passed shareholders’ meeting resolution as of March 11, 2021.

143

(V) Name and audit opinions of the Certified Public Accountant during the past 5 years

Year	Accounting firm	Certified Public Accountant	Audit opinions
2016	Deloitte & Touche	Lin, I-Hui, Weng, Po-Jen	No reserved opinions
2017	Deloitte & Touche	Lin, I-Hui, Weng, Po-Jen	No reserved opinions
2018	Deloitte & Touche	Lin, I-Hui, Weng, Po-Jen	No reserved opinions
2019	Deloitte & Touche	Hsieh, Ming-Chung, Su, Yu-Hsiu	No reserved opinions
2020	Deloitte & Touche	Hsieh, Ming-Chung, Su, Yu-Hsiu	No reserved opinions

Note: 1. Explanation for the change of accountants during the past five years:

Due to organizational changes, mergers and internal personnel and work arrangements of the accounting firm, as well as to be in line with the corporate governance measures.

144

II Financial Analysis for the past 5 Years

(I) Consolidated Financial Analysis (IFRS) Unit ： NT$ 1,000

	Year	Financial analysis for thepost 5years	Financial analysis for thepost 5years	Financial analysis for thepost 5years	Financial analysis for thepost 5years	Financial analysis for thepost 5years

		2016	2017	2018	2019	2020
Item

	Debt ratio (%)	32.83	31.62	30.34	34.94	41.84
Capital
Structure	Long-term fund to fixed	273.17	254.61	254.77	260.78	239.33
Analysis
	asstes ratio(%)

	Current Ratio (%)	279.40	350.63	340.73	284.10	196.37
Liquidity	Quick Ratio (%)	227.49	277.70	250.96	205.84	136.58
Analysis
	Times interest earned (%)	4,349	5,000	3,696	3,389	8,069
	Average AR turnover(times)	3.18	3.05	3.02	2.99	3.43
	Average AR turnover(days)	114.77	119.67	120.86	122.07	106.41
	Average inventory	4.64	4.36	3.81	3.33	3.18
	turnover(times)
Operating	Average payment	5.64	5.02	4.96	4.30	4.28
performace
	turnover(times)
Analysis
	Average inventory	78.66	83.71	95.80	109.60	114.77
	turnover(days)
	Fixed assets turnover(times)	2.18	2.03	1.92	2.07	2.49
	Total assets turnover(times)	0.63	0.62	0.63	0.65	0.74
	Turn on total assets (%)	6.82	6.86	5.09	5.32	9.65
	Turn on total equity (%)	9.79	10.04	7.19	7.70	15.58
	Paid-in capital ratio(%)	38.49	34.70	23.68	24.68	55.16
Profitability
Analysis	Net margin(%)	10.52	10.83	7.90	7.97	12.94

	Earnings per share(Basic)	3.28	3.11	2.08	2.17	4.61
	Note I
	Cash flow ratio (%)	78.70	73.06	51.15	59.49	37.31
	Cash flow adequacy ratio	123.42	127.04	116.90	113.47	87.85
Cash Flow	(%)
	Cash flow reinvestment	10.87	4.92	1.87	6.29	6.37
	ration(%)
	Operating leverage	1.8273	2.0191	2.5348	2.2142	1.5253
L
everage	Financial Leverage	1.0258	1.0281	1.0398	1.0382	1.0134

Please explain the reasons of changes in financial ratio for the post two years (No needs for analysis if change of financial ratio is less than 20%) 1. The decrease in current ratio and quick ratio was mainly due to the increase in payables, loans and other payables compared with the same period last year. 2. The increase in interest protection multiples was mainly due to the increase in net profit before interest compared to the sameperiod lastyear.

145

The increase in turnover rate of real estate, plant and equipment was mainly due to the increase in net sales compared to the same period last year.
The increase in return on assets, return on equity, ratio of net profit before tax to paid-in capital, net profit ratio, and earnings per share increased, mainly due to the increase in net profit after tax compared with the same period last year
The decrease in cash flow ratio was mainly due to the fact that the increase in current liabilities over the same period last year was greater than the increase in net cash flow from operating activities.
The decrease in the allowable cash flow ratio was mainly due to the increase in capital expenditures, inventories and cash dividends over the same period last year than the increase in net cash flows from operating activities.
The decrease in operating leverage was mainly due to the increase in operating profit over the same period last year greater than the increase in net sales net of variable costs and expenses.

Note `：` Glossary `：`

1. Capital StructureAnalysis

Debt ratio ＝ Total liabilities ／ Total assets

(2) Long-term fund to fixed asstes ratio ＝（ Total stockholders’ equity ＋ Long-term liabilities ）／ Net Fixed Assets
Liquidity Analysis
(1) Current Ratio ＝ current assets ／ current liabilities
－－
(2) Quick Ration ＝（ current assets Inventories Prepaid expenses ）／ current liabilities
＝
(3) Times interest earned Earnings before interest and taxs ／ Interest expenses
Operating performace Analysis
＝

(1) Average collection turnover

 - Net sales `／` Average trade Receivables

(2) Days sales outstanding ＝ 365 ／ Average collection turnover
＝。
(3) Average inventory turnover Cost of good sold ／ Average inventory
＝
(4) Average payment turnover Cost of good sold ／ Average trade Payables
(5) Average inventory turnover(Days) ＝ 365 ／ Average inventory turnover
(6) Fixed assets turnover ＝ Net sales ／ Net Fixed Assets
(7) Total assets turnover ＝ Net sales ／ Total assets
Profitability Analysis
- －
- (1) Turn on total assets ＝〔 Net income ＋ Interest expenses× （ 1 Effective tax rate ）〕／ Average total assets 。
(2) Turn on total equit ＝ Net income ／ Average stockholders’ equit 。
(3) Net margin ＝ Net income ／ net sales 。
－
(4) Earnings per share ＝（ Net income Perferred stock dividend ）／ Weighted average number of shares outstanding
Cash Flow
(1) Cash flow ratio ＝ Net cash provided by operating activities ／ current liabilities
＝
(2) Cash flow adequacy ratio Five-year sum of cash from operations ／ Five-year sum of capital expenditures, inventory additions, and cash dividend.
＝
(3) Cash flow reinvestment ration (Cash provided from operating activities – Cash dividend) ／（ Grosss fixed assets + investment + Other assets + Working capital ）
Leverage
(1) Operating leverage ＝（ Net sales – Variable cost ）／ Income from operations
(2) Financial Leverage ＝ Income from operations ／（ Income from operations － Interest expenses ）

146

(II) Financial Analysis (IFRS) Unit ： NT$ 1,000

	Year
		Financial analysis for the post 5 years



Item		2016	2017	2018	2019	2020

	Debt ratio (%)	28.69	28.20	26.79	28.14	33.10
Capital
Structure	Long-term fund to fixed asstes	551.77	525.17	545.09	525.59	489.34
Analysis	ratio(%)

	Current Ratio (%)	181.55	249.86	239.58	218.76	184.13
Liquidity	Quick Ration(%)	143.09	190.42	177.65	169.02	145.48
Analysis
	Times interest earned(%)	6,630	6,818	5,620	5,805	16,903
	Average AR turnover(times)	3.16	3.01	2.98	2.96	3.45
	Average AR turnover(days)	115.50	121.26	122.48	123.31	105.79
	Average inventoryturnover(times)	6.80	6.16	5.67	5.99	7.40
Operating
performace	Averagepayment turnover(times)	5.18	4.77	4.73	4.45	4.77
Analysis	Average inventoryturnover(days)	53.67	59.25	64.37	60.93	49.32

	Fixed assets turnover(times)	3.92	3.39	3.28	3.46	4.26
	Total assets turnover(times)	0.55	0.53	0.53	0.55	0.69
	Turn on total assets (%)	7.19	7.24	5.31	5.67	10.83
	Turn on total equity (%)	9.84	10.22	7.21	7.70	15.58
Profitability	Paid-in capital ratio (%)	36.54	33.11	22.18	22.97	52.49
Analysis
	Net margin(%)	12.88	13.65	9.83	10.07	15.64
	Earningsper share(Basic)Note I	3.28	3.11	2.08	2.17	4.61
	Cash flow ratio (%)	52.59	38.87	32.50	47.04	22.78
Cash Flow	Cash flow adequacyratio(%)	109.27	98.70	87.45	83.22	66.65
	Cash flow reinvestment ration(%)	4.66	(1.77)	(1.93)	1.68	(0.57)
	Operating leverage	1.5353	1.8095	1.9043	2.0813	1.3841
L
everage	Financial Leverage	1.0231	1.0349	1.0399	1.0429	1.0100

Please explain the reasons of changes in financial ratio for the post two years (No needs for analysis if change of financial ratio is less than 20%) 1. The increase in interest protection multiples was mainly due to the increase in net profit before interest compared to the same period last year. 2. The increase in inventory turnover rate was due to the increase in the cost of goods sold over the same period last year, which was greater than the average increase in inventory. 3. The increase in turnover rate of real estate, plant and equipment, and total asset turnover was mainly due to the increase in net sales compared to the same period last year. 4. The increase in return on assets, return on equity, ratio of net profit before tax to paid-in capital, net profit ratio, and earnings per share was mainly due to the increase in net profit after tax compared with the same period last year. 5. The decrease in cash flow ratio was mainly due to the increase in current liabilities compared with the same period lastyear and the decrease in net cash flow from operatingactivities compared with the sameperiod lastyear;the

147

decrease in cash reinvestment ratio was mainly due to the increase in real estate, plant and equipment and working capital compared with the same period last year and operations Net cash flow from activities decreased compared with the same period last year.

The decrease in the allowable cash flow ratio was mainly due to the increase in capital expenditures, inventories and cash dividends over the same period last year than the increase in net cash flows from operating activities.
The decrease in operating leverage was mainly due to the increase in operating profit over the same period last year greater than the increase in net sales net of variable costs and expenses.

Note `：` Glossary `：`

  1. Capital StructureAnalysis

     - Debt ratio `＝` Total liabilities `／` Total assets

(2) Long-term fund to fixed asstes ratio ＝（ Total stockholders’ equity ＋ Long-term liabilities ）／ Net Fixed Assets
Liquidity Analysis
(1) Current Ratio ＝ current assets ／ current liabilities
－－
(2) Quick Ration ＝（ current assets Inventories Prepaid expenses ）／ current liabilities
＝
(3) Times interest earned Earnings before interest and taxs ／ Interest expenses
Operating performace Analysis
＝
(1) Average collection turnover

Net sales ／ Average trade Receivables

(2) Days sales outstanding ＝ 365 ／ Average collection turnover
＝。
(3) Average inventory turnover Cost of good sold ／ Average inventory
＝
(4) Average payment turnover Cost of good sold ／ Average trade Payables
(5) Average inventory turnover(Days) ＝ 365 ／ Average inventory turnover
(6) Fixed assets turnover ＝ Net sales ／ Net Fixed Assets
(7) Total assets turnover ＝ Net sales ／ Total assets
Profitability Analysis
－
(1) Turn on total assets ＝〔 Net income ＋ Interest expenses× （ 1 Effective tax rate ）〕／ Average total assets 。
(2) Turn on total equit ＝ Net income ／ Average stockholders’ equit 。
(3) Net margin ＝ Net income ／ net sales 。
－
(4) Earnings per share ＝（ Net income Perferred stock dividend ）／ Weighted average number of shares outstanding
Cash Flow
(1) Cash flow ratio ＝ Net cash provided by operating activities ／ current liabilities
＝
(2) Cash flow adequacy ratio Five-year sum of cash from operations ／ Five-year sum of capital expenditures, inventory additions, and cash dividend.
＝
(3) Cash flow reinvestment ration (Cash provided from operating activities – Cash dividend) ／（ Grosss fixed assets + investment + Other assets + Working capital ）
Leverage
(1) Operating leverage ＝（ Net sales – Variable cost ）／ Income from operations
(2) Financial Leverage ＝ Income from operations ／（ Income from operations － Interest expenses ）

III Audit Committee’s Review Report

148

TXC Corporation Audit Committee’s Review Report

The Board of Directors has prepared the Company’s 2020 business report, consolidated financial statements, the individual financial statements and proposal of earnings distribution, of which the consolidated financial statements and the individual financial statements have been audited by independent auditors Mr. Hsieh, Ming-Chung and Ms. Su, Yu-Hsiu of Deloitte & Touche. The business report, consolidated financial statements, the individual financial statements and proposal of earnings distribution have been recognized by Audit Committee according to Article 14-4 of the Securities Exchange Act and Article 219 of the Corporate Act. Pleas examine.

2021 shareholder meeting of the company

Convener of the Audit Committee ： Yu, Shang-Wu

March 11, 2021

149

IV Consolidated Financial statements of the most recent year: Please refer to Appendix 1
V The Company’s unconsolidated financial statements audit by a certified public accountant for the most recent year: Please refer to Appendix 2

VI Where there is any financial difficulty in the Company and affiliates during the most recent year and as of the date the annual report was published, impact thereof on the financial status of the Company:N/A

150

Chapter 7 Review of Financail Conditions, Operating Results, and Risk Managment

I. Financial Statement

I. Financial Statement	I. Financial Statement	I. Financial Statement
			Unit: NT$1,000
Year			Difference
Item	2020	2019	Amount	%
Current Assets	10,001,872	7,945,036	2,056,836	25.89
Non Current Assets	6,599,839	5,423,734	1,176,105	21.68
Total Assets	16,601,711	13,368,770	3,232,941	24.18
Current Liabilities	5,093,290	2,796,519	2,296,771	82.13
Non Current Liabilities	1,853,415	1,874,500	(21,085)	(1.12)
Total Liabilities	6,946,705	4,671,019	2,275,686	48.72
Share Capital	3,097,570	3,097,570	0	0
Capital Surplus	1,668,269	1,666,690	1,579	0.09
Retainded Earnings	5,235,929	4,457,863	778,066	17.45
Other Equity	(346,762)	(524,372)	177,610	(33.87)
Non-ControllingInterests	0	0	0	0
Total Equity	9,655,006	8,697,751	957,255	11.01
Explanation for the analysis on the changes during the past two years. (This analysis can be exempted if the change is less than 20%)Explanation: 1. The increase in current assets and current liabilities was mainly due to the increase in revenue, which resulted in the increase in accounts receivable, inventories and short-term loans, and the increase in cash and cash equivalents. 2. The increase in non-current assets was mainly due to the company's expansion of production lines to increase investment in real estate, plant and equipment, and prepaid equipment. 3. The increase in other equity was mainly due to the increase in unrealized benefits of financial assets measured at fair value through other comprehensivegains and losses.

151

II. Financial Performance

(I) Comparative analysis table for the operating results

Unit: NT$1,000

Year			Increase(Decrease)

Items	2020	2019	Amount	Change`％`

Sales	11,048,392	8,430,970	2,617,422	31.05
Cost of Goods Sold	(7,715,586)	(6,423,879)	(1,291,707)	20.11
Gross Profit	3,332,806	2,007,091	1,325,715	66.05
OperatingExpenses	(1,715,146)	(1,374,953)	(340,193)	24.74
Profit from Operations	1,617,660	632,138	985,522	155.90
Non-Operating Income and	91,057	132,439	(41,382)	(31.25)
Expenses
Profit before Income Tax	1,708,717	764,577	944,140	123.49
Income Tax Expense	(279,430)	(92,795)	(186,635)	201.13
Net Profit for The Year	1,429,287	671,782	757,505	112.76
Other Comprehensive	300,782	(106,931)	407,713	(381.29)
Income(Loss)
Total Comprehensive	1,730,069	564,851	1,165,218	206.29
income(Loss)for The Year
Explanation for the analysis on the changes during the past two years. (This analysis can be exempted if the change is less than 20%)Explanation: 1. The increase in sales revenue, cost of goods sold, operating gross profit, operating expenses, operating net profit, net profit before tax, income tax expense, net profit for the current period, and total comprehensive profit and loss for the current period is mainly due to revenue growth. 2. The decrease in non-operating income and expenditure was mainly due to the increase in net foreign currencyexchange losses.

The increase in sales revenue, cost of goods sold, operating gross profit, operating expenses, operating net profit, net profit before tax, income tax expense, net profit for the current period, and total comprehensive profit and loss for the current period is mainly due to revenue growth.
The decrease in non-operating income and expenditure was mainly due to the increase in net foreign currency exchange losses.

(II) Expected sales quantity and its basis

In 2020, the company will adhere to a cautious and conservative attitude. In addition to the support of existing customer orders, it will still plan to increase the production capacity of new products and optimize the production process of products. As the company gradually obtains customer certification for automotive electronics and high-end precision products And acknowledged that it is expected that revenue will be contributed by the expansion of new products and production lines, and continue to refine precision products with miniaturization, high frequency, and low energy consumption, under the conditions of effective customer relations and product diversification , The total combined sales is expected to reach more than 5 billion, and the global market share can be maintained at about 13%~15%. The estimated target is to become the top two manufacturers in the global quartz industry.

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III. Cash Flow

Unit: NT$1,000

Beginning Cash Balance	Net Cash Provided by (Used in) Operating Activities of the year	Cash Inflow Ofl f h	Cash Over	Cash shortage remedy	Cash shortage remedy
		(utow) o te year	and Short	Investing plan	Financing plan
1,986,235	1,900,191	695,717	2,681,952	NA	NA

(I) Analysis on changes in cash flow of the year:

The Company's net cash inflow for the year 2020 was NT$695,717,000 and the changes in cash flow from various operating activities are as follows:
(1) Operating activities: inflow amount NT$1,900,191,000
(2) Investing activities: outflow amount NT$1,528,405,000
(3) Financing activities: outflow amount NT$305,023,000

(II) Remedy for cash shortage and liquidity analysis: None.

(III) Cash liquidity analysis for the coming year:

Unit: NT$1,000

Beginning Cash Balance	Net Cash Provided by (Used in) Operating Activities of theyear	Cash Inflow (Outflow) of the year	Cash Over and Short	Cash shortage remedy	Cash shortage remedy
				Investment plan	Financing plan
2,681,952	2,250,000	300,000	2,981,952	NA	NA
Expected cash shortage remedy and liquidity analysis: None

IV. Impact of major annual capital expenditure on financial operations

TXC’s major capital expenditures in 2020 were to pay for the expansion of production line equipment and the upgrading of miniaturized products and equipment, in order to respond to market customer demand and optimize the company's product portfolio and technical specifications. On the basis of the consolidated financial statements, the amount paid for the purchase of fixed assets in 2020 was NT$1.568 billion, and the amount of prepaid equipment was NT$135 million, accounting for approximately 15.42% of the net sales, which had no significant impact on the company’s financial business.

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V. The main reasons for the profit or loss resulted from joint venture policies in the most recent year, the improvement plan thereof and the investment plan for the coming year:

Explanations Projects	Amount	Policies	Main reasons for the profit or loss	Improvement plan	Other future investment plan
TAIWAN CRYSTAL TECHNOLOGY INTERNATION AL LIMITED	NT 588,059,000	Investment Ning-Bo Plant, OBU	The main reason for profit this year is the increase in production capacity, yield rate and product quality.	Continue to introduce excellent talents and require to improve yield rate and quality standards.	Other related expansion investment plans are under continuous evaluation.
TAIWAN CRYSTAL TECHNOLOGY (HK) LIMITED	NT 42,562,000	Trading	The main reason for this year’s profit is that the company’s operating activities have begun to expand	Continue to maintain the company's operating performance	None

VI. Risks analysis and assessment

(I) Policies and organizational structure of risk management

The Company's risk management policy is to establish a risk management mechanism for risk identification, measurement, supervision and control, and to configure an integrated risk management system. To conduct risk management, analysis and evaluation on the following issues: 1. Business / Law / Regulations / Standards; 2. Changes in political environment; 3.; Changes in economic / financial environment; 4. Natural disasters (climate change); 5. Technology and information; 6. Competitive environment; 7. Facilities / equipment; 8. Business / market operations; 9. Related Supply chains; 10. Financial operations; 11. Community / Environmental Security and Hygiene; and 12. Personnel etc., total 12 items and 88 indicators, in order to develop mitigation strategies and operational continuity plans to eliminate, reduce, transfer, accept risks, and promote appropriate risk management-oriented business model, achieving operational goals to enhance shareholder value, and major risks such as marketing market, production operation, human resource planning, new product development progress, and financial accounting control faced by various business operations, except in addition to the original system norms and treatments, actively develop advanced and highly sensitive procedures and guidelines for supervision, evaluation, and risk management to balance safety and efficiency, and establish economically effective business operation models, such as strengthening the establishment of information systems, strengthen early warning and monitoring capabilities and promote the ISO22301 and ISO31000 risk management systems related to risk identification and management; and have completed the establishment and certification of ISO27001 Information Security Management Systems and ISO28000 Security Management System for the Supply Chain.

The Company has formulated the measures for key operational risk management for each

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identifiable risk and approved by the board of directors. The framework and guidelines for the Company's key operational risks are provided to all departments for related risk identification and evaluation, and the response is formulated according to the results od the measures and supervision plan, so that the identified potential key operational risks can be minimized by daily supervision, management and control. The Company has established a risk response organization, with the general manager acting as the convener to coordinate the promotion and operation of the risk management plan. Several central authority and responsibility units are organized for the purpose to promote a variety of risk management.

Administrator Center: The roles and responsibilities of the management center: Arrangement and response of human resources, evaluation of financial risks, execution of various insurance operations, maintenance of operating system configuration, establishment and maintenance of environmental safety and health, review and establishment of laws and regulations, and media public relations and external coordination matters etc.
R & D Center: The roles and responsibilities of the R & D Center: Put in place the emergency response measures for R & D operating environment, risk assessment of new product development, and R & D progress control
Marketing Center: The roles and responsibilities of the Marketing Center: Collection and establishment of market information, coordination between the production and marketing departments, establishment and handling of customer relationships, and tracking and collection of account receivable.
Manufacturing Center: The roles and responsibilities of the Manufacturing Center: Put in place the emergency response measures for production operations, production contingency plan and specifications, manpower support and allocation plans, and on-site environmental safety contingency plans..
MEMS Center: The roles and responsibilities of the MEMS Center
(Microelectromechanical Systems Center): Put in place the emergency response measures for production operations, production contingency plan and specifications, manpower support and allocation plans, and on-site environmental safety contingency plans
Supply Chain Center: The roles and responsibilities of the Supply Chain Center: Development of a supplier contingency plan, put in place the emergency response measures for procurement, development of alternative plans for import and export transportation, customs declaration, customs clearance, insurance-related operations and equipment purchase.
Quality Assurance Center: The roles and responsibilities of the Supply Chain Center:

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Development of document data storage plans, control of Disaster-damaged products and quality control, and put in place the emergency response measures for product testing operations

Internal Audit Dept.:

The roles and responsibilities of the Internal Audit Dept.: Regularly check whether the implementation of risk control of each central unit is actually performed according to the Company's internal control and audit plan, and preparing for an audit report based on the actual audit results.

Occupational Safety and Health Management Office: The roles and responsibilities of the Audit Office: Supervision of environmental safety and health management such as environmental safety and health review / risk assessment to ensure safety and health normal operation of the health system.

(II) Impact of recent year interest rates changes, exchange rate fluctuation and inflation on the profit or loss of the Company and the future countermeasures therefor.

(1) Impact of recent year interest rates on the profit or loss of the Company and the future countermeasures therefor:
i Impact of interest rates on the profit or loss of the Company and the subsidiary
- In 2020, the net interest of the Company and its subsidiary was NT$21,442,000 and the Company’s interest expense will be increased by approximately NT$6,504,000 for every 0.25% increment in the market interest rate.
ii Future countermeasures
- Since the Company and its subsidiary have sound financial structure together with the gradual expansion of the Company’s business scale, it has close long-term cooperation with the banks. Through the bank’s assistance, it has been able to obtain better interest rates and terms to improve its financial structure, enrich medium and long-term working capital and reduce the risks of interest rate changes. Its financing costs have been lower than the average market interest rate.
(2) Impact of recent year exchange rate fluctuation on the profit or loss of the Company and the future countermeasures therefor:
i Impact of exchange rate fluctuation on the profit or loss of the Company and subsidiary Due to nature of the industry, the Company’s foreign procurement of raw materials account for about 80% and export income accounted for more than 90%, therefore, exchange rate control is relatively important. In 2020, the sharp fluctuations in exchange rates has made hedging operations relatively difficult. However, the Company and subsidiary have established appropriate risk management mechanisms to avoid risks. In the future, the Company’s gross margin will be affected by approximately 0.5%, for every 1% market exchange rate appreciation.
ii Future countermeasures
- As for the response to exchange rate changes, the Company and subsidiary have established a risk assessment team to adopt dynamic natural hedging. The remaining mainly undertakes hedging instruments such as spot exchange transactions and/or

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foreign exchange forward contract to reduce risks by maintaining a high hedging ratio.

(3) Impact of the recent year inflation on the profit or loss of the Company and the future countermeasures therefor:
i Impact of inflation on the profit or loss of the Company and subsidiary The Company’s expenses will be increased by approximately NT$17,151,000 for every 1% increment in inflation.
ii Future countermeasures
- In recent years, there has been little impact on the costs and prices due to stable inflation data. In the future, the Company will remain on the lookout for the inflation trend for the purpose of costs control and price quotation and make appropriate adjustments.

(III) The main reasons for engaging in high risk and highly leveraged investments, capital lending to others, endorsement, the policies and profit (or loss) of derivative commodity transactions and the future countermeasures therefor:

(1) The Company and subsidiary did not engage in any high risk and highly leveraged investments in 2020.
(2) The Company and subsidiary engaged in capital lending to others and endorsement according to the regulatory statue and performed regular auditing and filing pursuant to the relevant regulations of the competent authority and the Company. The details are as follows:
i Capital lending to others: none.
ii Endorsement: As of the end of the annual report, the company’s subsidiary endorsement is guaranteed to be a 100% owned subsidiary.
iii The policies and profit (or loss) of derivative commodity transactions and the future countermeasures therefor:
- (a) The Company and subsidiary engaged in derivative financial commodity transactions to avoid risks in foreign currency claims, debts and commitments arising from changes in exchange rate and/or interest rate. The hedging strategy is for the purpose of avoiding most of the market price risks.
- (b) In 2020, the Company and its subsidiary recognized foreign exchange losses of NT$93,171,000 due to large fluctuations in exchange rates.
- (c) The Company and subsidiary use derivative financial commodity that are highly correlated with changes in the fair value of the hedged items as hedging instruments to avoid the risks arising from the Company’s business operations and perform periodic assessments to control the risks thereof.

(IV) Future R & D plan and estimated investment in R & D

(1) The Company has systematically introduced the R & D plan into the PLM (Product Lifecycle Management) system and grasped products’ R & D progress through the PLM system. In 2020, the Company has established different R & D projects based on product categories and set goals, progress and timelines in line with market demand. In 2021, R & D expenses are expected to be approximately NT$215 million.

No.	name of the program	current progress	reinvestment in R & D	estimated time of massproduction	Primary factor of success
1	1210 TSX 76.8MHz	40%	NT$ 70M	to be completed byOct. 2021	Master key technology

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2	1409 Non-Hermetic OCXO	70%	NT$ 35M	to be completed bySep. 2021	Master key technology
3	Under Display ProximitySensor	40%	NT$ 60M	to be completed byAug. 2021	Master key technology
4	Four-inch wafer development	30%	NT$ 50M	to be completed byJun. 2021	Master key technology

(2) The new R & D projects in 2021 that has been launched are expected to be introduced into mass production phase in one to two years. The R & D expenditure for the entire year is estimated to be NT$270 million.


		current	reinvestment in	estimated time of	Primary factor of
No.	name of the program
		progress	R & D	mass production	success


1	2020 Waterproof Pressure Sensor	40%	NT$ 35M	to be completed by Dec. 2021	Master key technology
2	1409 S3-TCXO(QCOM MMV)	15%	NT$ 80M	to be completed by Mar. 2022	Master key technology
3	New 5032 S3 TCXO	30%	NT$ 60M	to be completed by Feb. 2022	Master key technology
4	2016 TSX 55.2MHz for ACAP	20%	NT$ 35M	to be completed by Mar. 2022	Master key technology
5	1612 TSX 52MHz development	20%	NT$ 35M	to be completed by Feb. 2022	Master key technology
6	8A40MHz Low Profile development	35%	NT$ 25M	to be completed by Mar. 2022	Master key technology

(3) Factors to R & D’s success: The Company’s competitive edge lies in continuous innovation, and the innovation is reflected on futuristic products. Therefore, in addition to considering the strength of market demand, the control and effective monitoring over the progress of R & D projects to shorten the R & D timeline and continued strengthening of R&D team by developing efficient training and upgrading the overall professional quality are the key factors that directly affects the success of R & D. In addition, whether the production process capability can increase the production yield to reduce the product cost while the product is advanced is another important factor that determines whether the new product can be successfully introduced into the market.

(V) Impact on the Company’s financial operations from the changes in important domestic and foreign policies and laws during the most recent years and the countermeasures therefor:

(1) The five-time increase in basic wages from 2017 to 2021 totaled about 18.59%, and personnel costs increased. The company actively expanded its operating scale and increased its market share, and improved its cost competitiveness by improving its process capabilities and work efficiency.
(2) The company has always paid close attention to and grasped the policies and laws that may affect the company's operations, and cooperated with the enhancement and revision of the company's internal related systems. The legal changes in 2020 have been assessed to have no significant impact on the company’s operations.

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(VI) Impact on the Company’s financial operations from the changes in technologies and the industry during the most recent years and the countermeasures therefor:

(1) With the development of information technology, applications such as automotive frequency components, wireless communication, digital home, mobile video, digital mobile devices, medical and health technology, and Internet of Things (IoT) will have an integral and additive benefit on quartz components, and the global IT industrial application is expected to increase continuously. Overall, the market demand for the quartz component will basically be stable in the coming years. In order to maintain stable profitability and industrial competitiveness, the Company will continue to improve the production processes and technology to maintain its cost advantages.
(2) When the fluctuations in the oil and electricity prices and industrial water restrictions become the norm, the industries and businesses will take the first blow and the operating costs will increase substantially. The Company will continue to promote energy-saving and carbon-saving schemes to reduce energy consumption.

(VII) Impact on the corporate crisis management from the changes in corporate image during the most recent years and the countermeasures therefor:

(1) Based on the humanitarian beliefs of caring for disadvantaged groups, the company prepares a budget every year to give back to the society in many ways and fulfill its corporate social responsibilities. Since the establishment of the "Taiwan Crystal Technology Education Foundation" in 2017, the company has achieved "get it". The feedback concept of "Use in society and use in society" enables limited resources to produce greater synergy, which in turn encourages the surrounding communities and manufacturers to invest together and exert greater public welfare influence, so that the company can continue to operate and make public welfare It can be widely distributed. Aiming at school education, rooting education, senior (inheritance) education, encouraging innovation, improving research, and strengthening the operation of conference affairs for disadvantaged groups and basic education in remote areas, and combining the resources of the company's volunteer community to expand the effectiveness of services, The company's volunteer club was established in 2015. It continues to promote social welfare activities and caring for disadvantaged groups. It has been recognized by the Taoyuan City Government and praised by excellent volunteers to implement the company's mission of caring for public welfare and fulfilling corporate responsibilities.
(2) In order to improve corporate governance and strengthen communication channels with shareholders, in addition to the company's website regularly update the company's latest financial and business information, and organize a corporate briefing every year, investing considerable efforts to improve the transparency of financial information, and will continue to promote corporate governance related matters in the future.
(3) In order to improve customer satisfaction, the company has strengthened its existing “customer relationship management system”, which has been recognized by many manufacturers and affirmed by customers, and continues to strengthen the technology level of the company to meet the application needs of customers.
(4) In order to implement the Company's supply chain security management and information confidentiality management to enhance trade competitiveness; therefore, the related system security control is a top priority for the Company. It was certified “Authorized Economic

159

Operator” (AEO) by the General Administration of Customs, Ministry of Finance, “ISO28000 Supply Chain Safety Management System”, “ISO27001 Information Security Management System”, the British Standards Institute BSI awarded the "Outstanding Resilience Award".

(5) In response to crisis events and external potential risks, if there is any impact on the company's operations and corporate reputation, the crisis management mechanism will be launched immediately, and the emergency response team will conduct risk assessment and take necessary actions.

(VIII) Expected benefits, possible risks and countermeasures for merger: None.

(IX) Expected benefits, possible risks and countermeasures for plant and production line expansions

Production expansion benefits:

The Company continues to expand production capacity of its Ping-Zhen Plant (Taiwan), Ning-Bo Plant and Chong-Qing Plant to expand its economic scale, reduce production costs and upgrade product specification. The production capacity is, according to the production capacity plan, expected to increase to meet market demand and increase market share

Possible risks:

Declined demand, low production capacity, increased production costs.

Countermeasures:

If the target market demand is not as expected and the product development progress is delayed, in order to avoid the imbalance between supply and demand, the product specifications will be flexibly adjusted to increase the utilization rate, and the product process capability will be accelerated, the yield rate and production efficiency will be improved, and the product sales mix will be optimized to enhance the group Overall profit

(X) Risks involved in intensive purchase or sales and the countermeasures therefor:
Each major raw material shall have purchase source of more than two suppliers to avoid risks from intensive purchase. The sales targets are mainly the prestigious domestic and foreign manufactures in communications, information and consumer products industries; except for a customer who accounts for more than 10% of the Company’s total sales ratio due to its scale of operations, continued expansion and growth requirements, there are no risks from intensive sales.
(XI) The impact and risk on the Company from massive transfer or replacement of equity by directors, supervisor or shareholder(s) holding more than 10% of the shares and the countermeasures therefor: No such situation.
(XII) The impact and risk on the Company from changes in the right to operate and the countermeasures therefor: No such situation.
(XIII) Litigation or non-litigation incidents: Major lawsuits, non-litigations or administrative disputes (determined or in-process) involving the Company and the Company’s directors, supervisor, CEO, substantive directors, large shareholder(s) and subsidiary holding more than 10% of the Company’s shares shall, if outcome of the lawsuit may

160

have a material effect on shareholders’ equity or the price of securities, be specified and disclosed of the facts of the dispute, the amount of the subject matter, the commencement date of the lawsuit, the main parties involved in the case, and status of the cases as of the publication date of the annual report: none.

(XIV) Information security risks:

In order to comply with international information security management trends and respond to customer information security requirements, since the introduction of the ISO27001 information security management system in 2011, it has followed the implementation of information security policies, protected customer data and Company smart output, strengthened information security incident response capabilities and reached information security policy measurement indicators.

The Company's information security structure and operation are as follows:

(1) Information Security Committee:
The Company has established an information security management committee and appointed an information security chief (and as convener), who shall be acted by the most senior ranking officer of the management center; a deputy convener, who shall be acted by the most senior ranking officer of the Netcom Information Department; The meeting conveners shall be represented by directors of each department and/or centers, and at least one review meeting shall be held every year, depending on business needs or major changes, and when there is a risk of affecting information security, meetings may be held regularly. In addition, in order to implement information security management, an information security executive team and an information security audit team are established under the information security committee, which are responsible for the promotion, review and maintenance of information security, and to make regularly report to the board of directors.
(2) Information security policy:
"In order to ensure the safe use of internal information, TXC Corporation avoids improper disclosure of information and enables the continuous operation of various business information operations, maintain the effectiveness of internal management systems, and strengthen the confidence and satisfaction of customers and suppliers etc. related parties.”
(3) Information security and network risk control: Cyber attack methods are changing rapidly, and malicious programs are imported into the Company's internal network for destruction or data theft through email, internet fishing, and violent cracking methods. Destructive attacks may lead to the interruption of the Company's production operations, and data theft attacks may cause important operational data or leakage of personal data such as employees and customers. The Company adopts active information security enhancement operations. In addition to establishing firewalls, malicious mail filtering, employee Internet protection, operating system updates, antivirus software deployment, and information security monitoring services, the Company uses quarterly internal risk management systems to assess information system related risk, and regularly report risk control and improvement status in the risk management and control team to control and reduce related network risks.

161

(4) Information security goals, objectives and training: In order to ensure the achievement of information security goals and objectives, the effectiveness of the evaluation will be monitored at ordinary times. The situation should be notified and corrective measures should be taken when any suspected non-compliance event occurs, and the information security goal promotion situation should be reported to the information security management committee. Through information security education and training and promotion activities, and to convey information security-related publicity in the supervisor meeting, in order to promote employees' information security intentions and strengthen their awareness of related responsibilities.
(5) The information supervision, audit and execution results from the fourth quarter of 2019 to the third quarter of 2020 were reported to the board of directors on December 29, 2020.
(6) The Company did not have any major cyber attacks that impacted the Company's operations in 2020.

(XV) Other important risks and corresponding countermeasures

The company has formulated the "Operational Planning and Risk Management Measures" which requires at least two risk assessments per year, and conducts risk inspections for operating risk categories and projects. In 2020, two regular risk management meetings and two temporary risk management meetings will be held. In 2020 a second ad hoc meeting was held in January 2011 to conduct operational risk analysis in response to the impact of the new crown pneumonia epidemic, and fully launched the BCP (Business Contingency Plan, emergency response plan) to analyze the degree of operational risk in accordance with the process risk and determine high, medium and low risks And set up the prevention and control work headquarters of each plant area, formulate prevention and control measures, pay attention to and track management at any time, and hold two regular risk management meetings in March and September 2020; the implementation of operational risk management and reported to the board of directors on December 29, 2020.

VII. Other important matters : None.

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Chapter 8 Special Disclosure

I. Subsidiaries

(I) TXC Subsidiaries Chart

==> picture [512 x 307] intentionally omitted <==

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

December 31, 2020
TXC CORPORATION
(Stock No:3042)
100% 100% 100% 100% 100%
TAIWAN CRYSTAL TAIWAN CRYSTAL
TXC JAPAN
TXC EUROPE GMBH TXC TECHNOLOGY INC TECHNOLOGY TECHNOLOGY (HK)
CORPORATION
INTERNATIONAL LIMITED
LIMITED
100%
TXC (NINGBO)
CORPORATION
100% 100% 100% 100%
NINGBO JINGYU NINGBO FREE TRADE ZONE Chongqing All Suns TXC (CHONGQING)
DING KAI INVESTMENT
COMPANY LIMITED MANAGEMENT COMPANY Company Limited CORPORATION
100%
ChongQing Dingsen
Commercial Management
Co.,Ltd
----- End of picture text -----

163

(II) Basic information of TXC Subsidiaries

				December 31,2020

	Date of
Name		Address	Capital	Business Activities
	Incorporated


Taiwan Crystal Technology International Limited	1998.12.23	WESTERN SAMOA	USD 42,835,294	Investment holding
TXC Technology Inc	2000.12.01	431 Lambert Road,Suite 306 Brea,California 92812, U.S.A.	USD 300,000	Marketing activities
TXC Japan Corporation	2005.09.13	Davinici-shin-yokohama Bldg.,1-3-1, Shin-yokohama, Kohoku-ku,Yokohama,222-00 33 Japan	JPY 21,000,000	Marketing activities
TAIWAN CRYSTAL TECHNOLOGY (HK) LIMITED	2010.07.06	Rm.804, Sino Centre, 582-592 Nathan Rd.,Kln.H.K	USD 80,000	Trading
TXC Europe GmbH	2018.08.17	Sebastian-Kneipp-Straße 41, 60439 Frankfurt am Main	EUR 50,000	Marketing activities
TXC (NINGBO) CORPORATION	1999.03.12	No.189, Huangshan Xi Rd., Economic & Technical Development Zone,Ningbo Zhejiang,China	USD 45,835,294	Manufacture and sales of electronics products
TXC (CHONGQING) CORPORATION	2010.10.11	JinFeng Industrial Region, Jiulongpo District, Chongqing City,China	RMB 247,876,609	Manufacture and sales of electronics products
Chongqing All Suns Company Limited	2011.02.14	Jiulongpo District, Chongqing, China JinfengRoad 108,	RMB 150,000,000	Real estate related
Ningbo Jingyu Company Limited	2011.09.07	No.189, Huangshan Xi Rd., Economic & Technical Development Zone,Ningbo Zhejiang,China	RMB 2,500,000	Trading
Ningbo Free Trade Zon Ding Kai Investment Management Company	2017.05.12	Room 4211, Office Building, 11 Meishan Avenue Business	RMB 35,050,000	Investment
		Center, Beilun District, Ningbo
		City
ChongQing Dingsen Commercial Management Co.,Ltd	2020.12.30		RMB 500,000	Property management
		22 Fengsheng Road, Jiulongpo
		District, Chongqing, China

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(III) Resters of Directors, Supervisors, and General Manager of TXC’s Subsidiaries

December 31, 2020

Number of shares; share (%)


				Share
Name	Title	Name or representive	Shares
				(%)


Taiwan Crystal Technology International Limited	Chairman	TXC Corporation Representive: Lin, Wan-Shing	42,835,294	100%
TXC Technology Inc	Chairman	TXC Corporation Representive: Chen, Li-Wei	300,000	100%
TXC Japan Corporation	Chairman	TXC Corporation Representive: Shih Tien,Tun-Hsiung	2,100	100%
	Director	TXC Corporation Representive: Lin, Wan-Shing	2,100	100%
	Supervisor	TXC Corporation Representive: Tsai,Jung-Hsien	2,100	100%
TAIWAN CRYSTAL TECHNOLOGY (HK) LIMITED	Chairman	TXC Corporation Representive: Lin, Wan-Shing	80,000	100%
TXC Europe GmbH	Chairman	TXC Corporation Representive: Kuo,Ya-Han	50,000	100%
TXC (NINGBO) CORPORATION	Chairman	Taiwan Crystal Technology International Limited Representive: Chen Chueh,Shang-Hsin	45,835,294	100%
	Director/ President	Taiwan Crystal Technology International Limited Representive: Chao,Min-Chiang	45,835,294	100%
	Director	Taiwan Crystal Technology International Limited Representive: Lin,Wan-Shing	45,835,294	100%
	Supervisor	Taiwan Crystal Technology International Limited Representive: Chang,Chien-Tsung	45,835,294	100%
TXC (CHONGQING) CORPORATION	Chairman	TXC (NINGBO) CORPORATION Representive: Chen Chueh, Shang-Hsin	247,876,609	100%
	Director	TXC (NINGBO) CORPORATION Representive: Chang, Chien-Tsung	247,876,609	100%
	Director	TXC (NINGBO) CORPORATION Representive: Lin, Wan-Shing	247,876,609	100%
	Supervisor	TXC (NINGBO) CORPORATION Representive: Lin,Chia-Ching	247,876,609	100%
Chongqing All Suns Company Limited	Chairman	TXC (NINGBO) CORPORATION Representive: Chou,Chien-Fu	150,000,000	100%
	Director	TXC (NINGBO) CORPORATION Representive: Lin, Wan-Shing	150,000,000	100%

165


				Share
Name	Title	Name or representive	Shares
				(%)


	Director	TXC (NINGBO) CORPORATION Representive: Chen Chueh, Shang-Hsin	150,000,000	100%
	Supervisor	TXC (NINGBO) CORPORATION Representive: Lin,Chia-Ching	150,000,000	100%
Ningbo Jingyu Company Limited	Chairman	TXC (NINGBO) CORPORATION Representive: Lin,Chia-Ching	2,500,000	100%
	Supervisor	TXC (NINGBO) CORPORATION Representive: Chen Chueh, Shang-Hsin	2,500,000	100%
Ningbo Free Trade Zon Ding Kai Investment Management Company	Chairman	TXC (NINGBO) CORPORATION Representive: Lin,Chia-Ching	35,050,000	100%
	Supervisor	TXC (NINGBO) CORPORATION Representive: Lin, Hai	35,050,000	100%
	President	TXC (NINGBO) CORPORATION Representive:Chao,Min-Chiang	35,050,000	100%
ChongQing Dingsen Commercial Management Co.,Ltd	Chairman	Chongqing All Suns Company Limited Representive: Chou,Chien-Fu	500,000	100%
	Supervisor	Chongqing All Suns Company Limited Representive: Kuo,Chia-Ching	500,000	100%

166

(IV) Operational Highlights of TXC Subsidiaries

December 31, 2020

	December 31, 2020	December 31, 2020	December 31, 2020	December 31, 2020	December 31, 2020	December 31, 2020	December 31, 2020	December 31, 2020
	Unit: NT$thousands,expect EPS(NT$)
						Operating
		Total	Total	Shareholder	Sales		Net Income	EPS
Name	Capital					Profits
		Assets	Liabilities	Equity	Revenues		(After tax)	(After tax)
						(Loss)

Taiwan Crystal Technology International Limited	1,390,461	5,577,356	-	5,577,356	-	(68)	592,110	13.82
TXC Technology Inc	9,879	26,930	10,559	16,371	59,709	2,562	1,850	6.17
TXC Japan Corporation	6,172	38,621	7,131	31,490	66,141	(2,683)	782	372.45
TAIWAN CRYSTAL TECHNOLOGY (HK) LIMITED	2,371	336,632	212,405	124,227	544,434	36,248	42,562	532.03
TXC Europe GmbH	1,746	5,271	1,693	3,578	17,070	856	682	13.64
TXC (NINGBO) CORPORATION	1,487,211	6,971,030	1,397,930	5,573,100	3,927,723	462,707	564,076	12.31
TXC (CHONGQING) CORPORATION	1,162,074	1,983,227	574,234	1,408,993	1,662,936	172,894	167,052	0.67
Chongqing All Suns Company Limited	684,908	1,703,362	1,117,041	586,321	-	(39,628)	(35,320)	(0.24)
Ningbo Jingyu Company Limited	7,090	6,153	258	5,895	13,082	822	850	0.34
Ningbo Free Trade Zon Ding Kai Investment Management Company	160,043	236,362	-	236,362	-	-	120	-
ChongQing Dingsen Commercial Management Co.,Ltd	2,085	8,493	6,366	2,127	-	(57)	(57)	(0.11)

Note: All related companies were exposed by the number of financial statements audited by CPA in 2020.

167

II. Private Placement Securities in 2020 and as of the Date of this Annaul Report: None
III. Status of TXC’s Common Shares Acquired, Disposed of, and Held by Subsidiares: None
IV. Other Necessary Supplement: None
V. Any Events in 2020 and as of the Date of this Annual Report that Had Significant Impacts on Shareholders’ Right or Security Prices as Stated in Item 3: None

168

Appendix1

TXC Corporation and Subsidiaries

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

DECLARATION OF CONSOLIDATION OF FINANCIAL STATEMENTS OF AFFILIATES

The companies required to be included in the consolidated financial statements of affiliates in accordance with the “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises” for the year ended December 31, 2020 are all the same as the companies required to be included in the consolidated financial statements of parent and subsidiary companies as provided in International Financial Reporting Standards 10 “Consolidated and Separate Financial Statements”. Relevant information that should be disclosed in the consolidated financial statements of affiliates has all been disclosed in the consolidated financial statements of parent and subsidiary companies. Hence, we do not prepare a separate set of consolidated financial statements of affiliates.

Very truly yours,

TXC CORPORATION

PETER LIN Chairman March 11, 2021

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders TXC Corporation

Opinion

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

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

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2020. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

The key audit matter identified in the Group’s consolidated financial statements for the year ended December 31, 2020 is stated as follows:

Revenue of the Group for the year ended December 31, 2020 amounted to NT$11,048,392 thousand, which had an approximate 31% increase compared to revenue of NT$8,430,970 thousand for the year ended December 31, 2019. In comparison with 2019, the revenue derived from specific products increased significantly on average in 2020; therefore, we considered the validity of revenue derived from some specific products as a key audit matter.

The key audit procedures that we performed in respect of revenue derived from some specific products included the following:

We tested and obtained an understanding of the appropriateness of the design and the implementation of internal control system that is related to revenue recognition of these specific products.
We selected samples from revenue details of some specific products, and checked the sales orders and delivery orders to confirm the occurrence of the sales revenue.
We inspected the sales returns details of specific products to check whether there is any abnormal circumstance on the occurrence of the sales returns.

Other Matter

We have audited the accompanying financial statements of TXC Corporation as of December 31, 2020 and 2019 on which we have issued an unmodified opinion.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

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

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

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

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

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

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

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

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2019 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Ming-Chung Hsieh and Yu-shiou Su.

Deloitte & Touche Taipei, Taiwan Republic of China March 11, 2021

Notice to Readers

The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such consolidated financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent auditors’ report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and consolidated financial statements shall prevail.

TXC CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Notes 4 and 6) Financial assets at fair value through profit or loss - current (Notes 4 and 7) Financial assets at amortized cost - current (Notes 4 and 9) Notes receivable (Notes 4 and 10) Trade receivables (Notes 4 and 10) Trade receivables from related parties (Notes 4, 10 and 28) Other receivables (Notes 4 and 10) Other receivables from related parties (Notes 4 and 28) Current tax assets (Notes 4 and 24) Inventories (Notes 4 and 11) Non-current assets held for sale (Notes 4 and 13) Other current assets Total current assets NON-CURRENT ASSETS Financial assets at fair value through profit or loss - non-current (Notes 4 and 7) Financial assets at fair value through other comprehensive income - non-current (Notes 4 and 8) Financial assets measured at cost - non-current (Notes 4 and 9) Investments accounted for using the equity method (Notes 4 and 14) Property, plant and equipment (Notes 4 and 15) Right-of-use assets (Notes 4 and 16) Investment properties (Notes 4 and 17) Other intangible assets (Note 4 ) Deferred tax assets (Notes 4 and 24) Prepayment for equipment Other non-current assets Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term loans (Note 18) Financial liabilities at fair value through profit or loss - current (Notes 4 and 7) Contract liabilities - current (Notes 11 and 22) Trade payables Trade payables to related parties (Note 28) Other payables (Note 19) Other payables to related parties (Note 28) Current tax liabilities (Notes 4 and 24) Lease liabilities - current (Notes 4 and 16) Current portion of long-term borrowings and bonds payable (Note 18) Other current liabilities Total current liabilities NON-CURRENT LIABILITIES Long-term borrowings (Note 18) Deferred income tax liabilities (Notes 4 and 24) Lease liabilities - non-current (Notes 4 and 16) Net defined benefit liabilities - non-current (Notes 4 and 20) Guarantee deposits received Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT (Note 21) Share capital Ordinary shares Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Exchange differences on translating the financial statements of foreign operations Unrealized gain on financial assets at fair value through other comprehensive income Total other equity Total equity TOTAL		2020 Amount % $ 2,681,952 16 534,489 3 161,098 1 21,959 - 3,473,742 21 30,162 - 44,550 1 490 - 8,067 - 2,816,838 17 35,892 - 192,633 1 10,001,872 60 9,255 - 525,304 3 290,224 2 421,512 3 4,808,588 29 92,303 1 48,083 - 41,684 - 39,892 - 304,784 2 18,210 - 6,599,839 40 $ 16,601,711 100 $ 916,250 6 1,455 - 729,079 4 1,947,598 12 3,543 - 961,306 6 1,480 - 117,054 1 1,777 - 385,287 2 28,461 - 5,093,290 31 1,685,524 10 67,032 1 1,172 - 63,560 - 36,127 - 1,853,415 11 6,946,705 42 3,097,570 19 1,668,269 10 1,480,696 9 524,372 3 3,230,861 19 5,235,929 31 (523,275) (3) 176,513 1 (346,762) (2) 9,655,006 58 $ 16,601,711 100		2019
				Amount % $ 1,986,235 15 758,940 6 73,083 - 107,142 1 2,778,155 21 4,038 - 40,587 - 79 - 8,176 - 2,039,498 15 - - 149,103 1 7,945,036 59 9,255 - 422,422 3 86,983 1 447,290 4 4,054,149 30 96,162 1 54,565 1 27,816 - 39,349 - 169,470 1 16,273 - 5,423,734 41 $ 13,368,770 100 $ 63,485 1 3,963 - 68,024 1 1,659,086 12 78 - 724,671 5 2,850 - 48,135 - 3,087 - 209,860 2 13,280 - 2,796,519 21 1,637,635 12 123,400 1 2,949 - 74,031 1 36,485 - 1,874,500 14 4,671,019 35 3,097,570 23 1,666,690 13 1,413,518 10 254,907 2 2,789,438 21 4,457,863 33 (584,617) (4) 60,245 - (524,372) (4) 8,697,751 65 $ 13,368,770 100

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

TXC CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

REVENUE (Note 22) COST OF GOODS SOLD (Note 23) GROSS PROFIT OPERATING EXPENSES (Note 23) Selling and marketing expenses General and administrative expenses Research and development expenses Expected credit loss reversed on trade receivables Total operating expenses PROFIT FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES Interest income (Note 23) Other income (Note 23) Other gains and losses (Note 23) Finance costs (Note 23) Share of profits of associates and joint ventures (Note 14) Total non-operating income and expenses PROFIT BEFORE INCOME TAX INCOME TAX EXPENSE (Note 24) NET PROFIT FOR THE YEAR OTHER COMPREHENSIVE INCOME (LOSS) Item that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans Unrealized (gain) loss on investments in equity instruments at fair value through other comprehensive income Share of the other comprehensive income of associates accounted for using the equity method		2020 Amount % $ 11,048,392 100 (7,715,586) (70) 3,332,806 30 494,737 5 450,999 4 769,441 7 (31) - 1,715,146 16 1,617,660 14 24,330 - 120,058 1 (62,319) - (21,442) - 30,430 - 91,057 1 1,708,717 15 (279,430) (2) 1,429,287 13 (451) - 240,077 2 (186) - 239,440 2		2019
				Amount % $ 8,430,970 100 (6,423,879) (76) 2,007,091 24 433,296 5 358,881 5 582,776 7 - - 1,374,953 17 632,138 7 27,876 - 134,948 2 (21,143) - (23,250) - 14,008 - 132,439 2 764,577 9 (92,795) (1) 671,782 8 (12,331) - 129,437 2 657 - 117,763 2 (Continued)

TXC CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Item that maybe reclassified subsequently to profit or loss: Exchange differences on translating the financial statements of foreign operations Share of the other comprehensive income (loss) of associates accounted for using the equity method Other comprehensive income (loss) for the year, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR EARNINGS PER SHARE (Note 25) From continuing and discounted operations Basic Diluted		2020 Amount % $ 58,311 1 3,031 - 61,342 1 300,782 3 $ 1,730,069 16 $ 4.61 $ 4.58		2019
				Amount % $ (216,643) (3) (8,051) - (224,694) (3) (106,931) (1) $ 564,851 7 $ 2.17 $ 2.16


				$

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

(Concluded)

TXC CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

BALANCE AT JANUARY 1, 2019 Appropriation of 2018 earnings (Note 21) Legal reserve Special reserve Cash dividends distributed by the company Net profit for the year ended December 31, 2019 Other comprehensive income (loss) for the year ended December 31, 2019, net of income tax Total comprehensive income (loss) for the year ended December 31, 2019 Surplus donated Changes in capital surplus from investment in associates and joint ventures accounted for using the equity method Disposal of equity instruments at fair value through other comprehensive income (Note 8) BALANCE AT DECEMBER 31, 2019 Appropriation of 2019 earnings (Note 21) Legal reserve Special reserve Cash dividends distributed by the Company Net profit (loss) for the for the year ended December 31, 2020 Other comprehensive income (loss) for the for the year ended December 31, 2020, net of income tax Total comprehensive income (loss) for the for the year ended December 31, 2020 Disposal of equity instruments at fair value through other comprehensive income (Note 8) Disposal of investments in associates accounted for using the equity method Surplus donated Changes in capital surplus from investment in associates and joint ventures accounted for using the equity method Other changes in capital surplus BALANCE AT DECEMBER 31, 2020	Equity Attributable to Owners of the Parent	Equity Attributable to Owners of the Parent	Others Unrealized Gain (Loss) on Financial Exchange Assets at Fair Differences on Value Through Translating Other Foreign Comprehensive Operations Income $ (359,923) $ 105,017 - - - - - - - - (224,694) 130,033 (224,694) 130,033 - - - - - (174,805) (584,617) 60,245 - - - - - - - - 61,342 239,948 61,342 239,948 - (123,680) - - - - - - - - $ (523,275) $ 176,513	Total Equity $ 8,750,840 - - (619,514) 671,782 (106,931) 564,851 1,617 (43) - 8,697,751 - - (774,393) 1,429,287 300,782 1,730,069 - (1,068) 347 1,219 1,081 $ 9,655,006
	Shares (In Thousands) Share Capital Capital Surplus 309,757 $ 3,097,570 $ 1,665,116 - - - - - - - - - - - - - - - - - - - - 1,617 - - (43) - - - 309,757 3,097,570 1,666,690 - - - - - - - - - - - - - - - - - - - - - - - (1,068) - - 347 - - 1,219 - - 1,081 309,757 $ 3,097,570 $ 1,668,269	Unappropriated Legal Reserve Special Reserve Earnings $ 1,349,083 $ 222,793 $ 2,671,184 64,435 - (64,435) - 32,114 (32,114) - - (619,514) - - 671,782 - - (12,270) - - 659,512 - - - - - - - - 174,805 1,413,518 254,907 2,789,438 67,178 - (67,178) - 269,465 (269,465) - - (774,393) - - 1,429,287 - - (508) - - 1,428,779 - - 123,680 - - - - - - - - - - - - $ 1,480,696 $ 524,372 $ 3,230,861

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

TXC CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Depreciation expenses Amortization expenses Expected credit loss reversed on trade receivables Net gain on fair value change of financial assets and liabilities at fair value through profit or loss Finance costs Interest income Dividend income Share of profit of associates and joint ventures Loss (gain) on disposal of property, plant and equipment Loss on disposal of associates Reversal of impairment loss on property, plant and equipment Gain on disposal of subsidiaries Changes in operating assets and liabilities Notes receivable Trade receivables Trade receivables from related parties Other receivables Other receivables from related parties Inventories Other current assets Contract liabilities-current Trade payables Trade payables to related parties Other payables Other payables to related parties Other current liabilities Net defined benefit liabilities Cash generated from operations Interest paid Income tax paid Net cash generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of financial assets at fair value through profit or loss Purchase of financial assets at fair value through other comprehensive income Proceeds from sale of financial assets at fair value through other comprehensive income Purchase of financial assets at amortized cost	2020 $ 1,708,717 842,687 7,073 (31) (38,124) 21,442 (24,330) (1,755) (30,430) 1,639 6,106 1,584 (27,921) 85,183 (695,500) (26,124) (4,026) (411) (777,290) (43,530) 661,055 288,512 3,465 236,418 (1,370) 15,181 (11,035) 2,197,185 (21,225) (275,769) 1,900,191 267,976 (5,000) 165,952 (398,669)	2019 $ 764,577 760,317 7,241 - (14,680) 23,250 (27,876) (2,385) (14,008) (230) - (2,369) - (21,481) (146,853) 4,957 70,863 717 (222,230) (44,066) 68,024 332,264 (19) 160,985 (267) (8,486) (6,333) 1,681,912 (23,210) (146,866) 1,511,836 151,790 (27,108) 241,715 (163,614) (Continued)

TXC CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

Proceeds from financial assets at amortized cost Purchase of investments accounted for using the equity method Payments for property, plant and equipment Proceeds from disposal of property, plant and equipment Payments for intangible assets Payments for investment properties Increase in other non-current assets Increase in prepayment for equipment Interest received Dividends received Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from short-term borrowings Proceeds from long-term borrowings Repayments of long-term borrowings Proceeds from guarantee deposits received Refund of guarantee deposits received Repayment of the principal portion of lease liabilities Dividends paid to owners of the Company Other changes in capital surplus Net cash generated from (used in) financing activities EFFECTS OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS NET INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	2020 $ 112,087 (9,877) (1,567,995) 22,669 (20,771) (544) (1,937) (135,314) 24,393 18,625 (1,528,405) 853,377 316,181 (88,125) - (358) (3,087) (774,393) 1,428 305,023 18,908 695,717 1,986,235 $ 2,681,952	2019 $ 188,411 (67,083) (684,499) 5,689 (14,070) - (3,700) (82,296) 28,877 22,832 (403,056) 35,257 2,235,661 (1,996,875) 10,328 - (2,857) (619,514) 1,617 (336,383) (91,564) 680,833 1,305,402 $ 1,986,235

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

(Concluded)

Appendix2

TXC Corporation

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

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders TXC Corporation

Opinion

We have audited the accompanying financial statements of TXC Corporation (the “Company”), which comprise the balance sheets as of December 31, 2020 and 2019, and the statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the financial statements, including a summary of significant accounting policies (collectively referred to as the “financial statements”).

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

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for the year ended December 31, 2020. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

The key audit matter identified in the Company’s financial statements for the year ended December 31, 2020 is stated as follows:

Revenue of the Company for the year ended December 31, 2020 amounted to NT$11,048,392 thousand, which had an approximate 31% increase compared to revenue of NT$8,430,970 thousand for the year ended December 31, 2019. In comparison with 2019, the revenue derived from specific products increased significantly on average in 2020; therefore, we considered the validity of revenue derived from specific products as a key audit matter.

The key audit procedures that we performed in respect of sales derived from specific products included the following:

We tested and obtained an understanding of the appropriateness of the design and the implementation of internal control system that is related to revenue recognition of these specific products.
We selected samples from revenue details of specific products, and checked the sales orders and delivery orders to confirm the occurrence of the sales revenue.
We inspected the sales returns details of some specific products to check whether there is any abnormal circumstance on the occurrence of the sales returns.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

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

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

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

Auditors’ Responsibilities for the Audit of the Financial Statements

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements for the year ended December 31, 2020 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Ming-Chung Hsieh and Yu-Shiou Su.

Deloitte & Touche Taipei, Taiwan Republic of China March 11, 2021

Notice to Readers

TXC CORPORATION

BALANCE SHEETS DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Notes 4 and 6) Financial assets at amortized cost - current (Notes 4 and 9) Notes receivable (Notes 4 and 10) Trade receivables (Notes 4 and 10) Trade receivables from related parties (Notes 4, 10 and 27) Other receivables (Notes 4 and 10) Other receivables from related parties (Notes 4 and 27) Current tax assets (Note 23) Inventories (Notes 4 and 11) Non-current assets held for sale (Notes 4 and 12) Other current assets Total current assets NON-CURRENT ASSETS Financial assets at fair value through profit or loss - non-current (Notes 4 and 7) Financial assets at fair value through other comprehensive income - non-current (Notes 4 and 8) Right-of-use assets (Notes 4 and 15) Investments accounted for using equity method (Notes 4 and 13) Property, plant and equipment (Notes 4 and 14) Investment properties (Notes 4 and 16) Other intangible assets (Note 4) Deferred tax assets (Notes 4 and 23) Prepayment for equipment Refundable deposits Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term loans (Note 17) Financial liabilities at fair value through profit or loss - current (Notes 4 and 7) Trade payables Trade payables to related parties (Note 27) Other payables (Note 18) Other payables to related parties (Note 27) Current tax liabilities (Notes 4 and 23) Lease liabilities - current (Notes 4 and 15) Current portion of long-term borrowings and bonds payable (Note 17) Other current liabilities Total current liabilities NON-CURRENT LIABILITIES Long-term borrowings (Note 17) Lease liabilities - non-current (Notes 4 and 15) Deferred tax liabilities (Notes 4 and 23) Net defined benefit liabilities - non-current (Notes 4 and 19) Guarantee deposits received Total non-current liabilities Total liabilities EQUITY (Note 20) Share capital Ordinary shares Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Exchange differences on translating the financial statements of foreign operations Unrealized gain on financial assets at fair value through other comprehensive income Total other equity Total equity TOTAL		2020 Amount % $ 1,300,005 9 66,424 1 162 - 2,959,055 21 72,598 1 19,094 - 9 - - - 1,073,090 7 35,892 - 64,521 - 5,590,850 39 9,255 - 213,736 2 2,931 - 6,107,268 42 2,328,906 16 21,511 - 8,984 - 34,387 - 112,372 1 2,508 - 8,841,858 61 $ 14,432,708 100 $ 526,986 3 1,455 - 699,223 5 1,017,833 7 563,091 4 1,482 - 112,834 1 1,777 - 100,000 1 11,659 - 3,036,340 21 1,600,000 11 1,172 - 67,032 1 63,560 - 9,598 - 1,741,362 12 4,777,702 33 3,097,570 21 1,668,269 12 1,480,696 10 524,372 4 3,230,861 22 5,235,929 36 (523,275) (3) 176,513 1 (346,762) (2) 9,655,006 67 $ 14,432,708 100		2019
				Amount % $ 672,110 6 43,052 - 813 - 2,199,290 18 51,691 1 14,371 - 42,888 - 8,176 - 870,180 7 - - 22,074 - 3,924,645 32 9,255 - 185,477 2 6,024 - 5,862,128 49 1,961,704 16 26,881 - 3,692 - 33,066 - 89,157 1 2,508 - 8,179,892 68 $ 12,104,537 100 $ 3,525 - 3,963 - 503,621 4 797,801 7 431,397 4 4,449 - 38,273 - 3,087 - - - 7,948 - 1,794,064 15 1,400,000 11 2,949 - 123,400 1 74,031 1 12,342 - 1,612,722 13 3,406,786 28 3,097,570 25 1,666,690 14 1,413,518 12 254,907 2 2,789,438 23 4,457,863 37 (584,617) (5) 60,245 1 (524,372) (4) 8,697,751 72 $ 12,104,537 100

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

TXC CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OPERATING REVENUE (Note 21) Sales Less: Sales returns Less: Sales allowances Net operating revenue COST OF GOODS SOLD (Notes 11 and 22) GROSS PROFIT UNREALIZED GAIN ON ASSOCIATES/AND JOINT VENTURES REALIZED GAIN ON TRANSACTIONS WITH ASSOCIATES /AND JOINT VENTURES REALIZED GROSS PROFIT OPERATING EXPENSES (Notes 4 and 22) Selling and marketing expenses General and administrative expenses Research and development expenses Total operating expenses PROFIT FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES Interest income (Note 22) Other income (Notes 4 and 22) Other gains and losses (Note 22) Finance costs (Notes 4 and 22) Share of profit of associates and joint ventures (Note 13) Total non-operating income and expenses PROFIT BEFORE INCOME TAX INCOME TAX EXPENSE (Note 23) NET PROFIT FOR THE YEAR		2020 Amount % $ 9,219,457 101 39,113 - 39,930 1 9,140,414 100 7,193,029 79 1,947,385 21 (2,022) - 1,364 - 1,946,727 21 253,830 2 164,331 2 550,247 6 968,408 10 978,319 11 4,477 - 54,438 1 (74,424) (1) (9,676) - 672,677 7 647,492 7 1,625,811 18 196,524 2 1,429,287 16		2019
				Amount % $ 6,778,865 102 32,011 1 74,783 1 6,672,071 100 5,596,803 84 1,075,268 16 (1,364) - 1,064 - 1,074,968 16 252,422 3 123,024 2 396,050 6 771,496 11 303,472 5 6,506 - 57,162 1 (23,982) (1) (12,472) - 380,860 6 408,074 6 711,546 11 39,764 1 671,782 10 (Continued)

TXC CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OTHER COMPREHENSIVE INCOME (LOSS) Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans Unrealized gain on investments in equity instruments at fair value through other comprehensive income Share of the other comprehensive income of associates accounted for using the equity method Items that may be reclassified subsequently to profit or loss: Exchange differences on translating the financial statements of foreign operations Share of the other comprehensive loss of associates accounted for using the equity method Other comprehensive loss for the year, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR EARNINGS PER SHARE (Note 24) From continuing and discontinued operations Basic Diluted		2020 Amount % $ (451) - 174,625 2 65,266 - 239,440 2 58,311 1 3,031 - 61,342 1 300,782 3 $ 1,730,069 19 $ 4.61 $ 4.58		2019
				Amount % $ (12,331) - 74,642 1 55,452 1 117,763 2 (216,643) (4) (8,051) - (224,694) (4) (106,931) (2) $ 564,851 8 $ 2.17 $ 2.16




		$		$

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

(Concluded)

TXC CORPORATION

STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

BALANCE AT JANUARY 1, 2019 Appropriation of 2018 earnings (Note 20) Legal reserve Special reserve Cash dividends distributed by the Company Net profit for the year ended December 31, 2019 Other comprehensive income (loss) for the year ended December 31, 2019, net of income tax Total comprehensive income (loss) for the year ended December 31, 2019 Disposal of equity instruments at fair value through other comprehensive income (Note 8) Surplus donated Changes in capital surplus from investment in associates and join ventures accounted for using the equity method BALANCE AT DECEMBER 31, 2019 Appropriation of 2019 earnings (Note 20) Legal reserve Special reserve Cash dividends distributed by the Company Net profit for the for the year ended December 31, 2020 Other comprehensive loss for the for the year ended December 31, 2020, net of income tax Total comprehensive income (loss) for the year ended December 31, 2020 Disposal of equity instruments at fair value through other comprehensive income (Note 8) Disposal of investments accounted for using the equity method Surplus donated Changes in capital surplus from investment in associates and joint ventures accounted for using the equity method Other changes in capital surplus BALANCE AT DECEMBER 31, 2020	Shares (In Thousands) Share Capital Capital Surplus 309,757 $ 3,097,570 $ 1,665,116 - - - - - - - - - - - - - - - - - - - - - - - 1,617 - - (43) 309,757 3,097,570 1,666,690 - - - - - - - - - - - - - - - - - - - - - - - (1,068) - - 347 - - 1,219 - - 1,081 309,757 $ 3,097,570 $ 1,668,269	Retained Earnings Unappropriated Legal Reserve Special Reserve Earnings $ 1,349,083 $ 222,793 $ 2,671,184 64,435 - (64,435) - 32,114 (32,114) - - (619,514) - - 671,782 - - (12,270) - - 659,512 - - 174,805 - - - - - - 1,413,518 254,907 2,789,438 67,178 - (67,178) - 269,465 (269,465) - - (774,393) - - 1,429,287 - - (508) - - 1,428,779 - - 123,680 - - - - - - - - - - - - $ 1,480,696 $ 524,372 $ 3,230,861	Others Exchange Differences on Unrealized Gain (Loss) on Financial Assets at Fair Value Through Other Translating Comprehensive Foreign Operations Income $ (359,923) $ 105,017 - - - - - - - - (224,694) 130,033 (224,694) 130,033 - (174,805) - - - - (584,617) 60,245 - - - - - - - - 61,342 239,948 61,342 239,948 - (123,680) - - - - - - - - $ (523,275) $ 176,513	Total Equity $ 8,750,840 - - (619,514) 671,782 (106,931) 564,851 - 1,617 (43) 8,697,751 - - (774,393) 1,429,287 300,782 1,730,069 - (1,068) 347 1,219 1,081 $ 9,655,006

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

TXC CORPORATION

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Depreciation expenses Amortization expenses Net loss on fair value change of financial assets and liabilities designated as at fair value through profit or loss Finance costs Interest income Dividend income Share of profit of associates and joint ventures Gain on disposal of property, plant and equipment Loss on disposal of investments accounted for using the equity method Unrealized gain on the transactions with subsidiaries, associates and joint ventures Realized gain on the transactions with subsidiaries, associates and joint ventures Changes in operating assets and liabilities: Financial assets mandatorily classified as at fair value through profit or loss Notes receivable Trade receivables Trade receivables from related parties Other receivables Other receivables from related parties Inventories Other current assets Decrease in financial liabilities mandatorily classified as at fair value through profit or loss Trade payables Trade payables to related parties Other payables Other payables to related parties Other current liabilities Defined benefit liabilities - non-current Cash generated from operations Interest paid Income taxes paid Net cash generated from operating activities	2020 $ 1,625,811 370,757 4,379 1,455 9,676 (4,477) (1,635) (672,677) (4,584) 6,106 2,022 (1,364) - 651 (759,765) (20,907) (4,786) 42,879 (202,910) (42,447) (3,963) 195,602 220,032 131,799 (2,967) 3,711 (11,035) 881,363 (9,743) (179,982) 691,638	2019 $ 711,546 323,026 4,809 4,055 12,472 (6,506) (2,385) (380,860) (885) - 1,364 (1,064) 21,714 480 (77,463) 58,310 (519) (36,430) 127,600 (12,722) - (73,645) 161,808 77,119 1,228 (538) (6,333) 906,181 (12,721) (49,466) 843,994 (Continued)

TXC CORPORATION

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of financial assets at fair value through other comprehensive income Purchase of financial assets at amortized cost Proceeds from sale of financial assets at amortized cost Acquisition of associates Payments for property, plant and equipment Proceeds from disposal of property, plant and equipment Payments for investment properties Decrease in refundable deposits Payments for intangible assets Increase in prepayment for equipment Interest received Dividend received from associates Other dividends received Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase in short-term borrowings Proceeds from long-term borrowings Repayments of long-term borrowings Proceeds from guarantee deposits received Payments for right-of-use assets Dividends paid to owners of the Company Other changes in capital surplus Net cash generated from (used in) financing activities EFFECTS OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS NET INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	2020 $ 165,952 (66,424) 43,052 (9,877) (730,344) 5,976 (544) - (9,671) (23,215) 4,540 491,890 18,505 (110,160) 523,461 300,000 - (2,744) (3,125) (774,393) 1,428 44,627 1,790 627,895 672,110 $ 1,300,005	2019 $ 241,715 (43,052) 68,946 (67,083) (299,849) 1,923 - (1,500) (8,331) (38,330) 7,507 20,447 2,385 (115,222) 3,525 1,400,000 (1,396,875) - (2,857) (619,514) 1,617 (614,104) - 114,668 557,442 $ 672,110

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

(Concluded)

AI assistant

TXC — Annual Report 2020

52274_rns_2021-08-05_70c917cb-f561-428a-8f29-67198787d419.pdf

Vision

Mission

Core Value

Contents

Chapter 1 Letter to Shareholders

Dear Shareholders,

I. 2020 Operation Results

Consolidated statement of income and profitability

(II)Budget Execution

(III) Research and development

(IV) Results from execution of other projects

II. 2021 Business Plan Summary

Chapter 2 Company Profile

I. Date of Incorporation

II. Company History

Chapter 3 Company Governance

I. Organization

(I) Organizational Structure As of Dec.31, 2020

(II) Responsibilities and functions of major departments

II. Documents of directors, president, vice presidents, associate vice presidents, and managers of each departments and divisions

(I) Directors

1. Director Information

4. Training of the directors

5. Information on directors’ independence

(II) Documents of president, vice president, assistant vice president, and chief of divisions

III. Remuneration and Compensation Paid to Directors, and President and Vice President

(I) Remuneration Paid to Directors

Table of Remuneration Scale

(II) Compensation Paid to President and Vice Presidents

Compensation Scale

(III) Profit Sharing Distributed to Managers (Proposed 2020 Employee Profit Sharing Amounts)

IV. Implementation of Corporate Governance

(I) Operation of the Board of Directors

(2) Date: 2020/03/23

(3) Date: 2020/08/10

(4) Date: 2020/12/29

(II) Operation of the Audit Committee

(III) Corporate governance and variations with management principles of publicly-listed companies and reasons

(IV) Composition, duties, and operations of the Remuneration committee

3. Remuneration Committee Operation Status

(V) Fulfillment of Corporate Social Responsibility and variations with management principles of publicly-listed companies and reasons 1. Discrepancy with best-practice principles of TWSE/GTSM listed companies

4. Fulfillment of social responsibility

Major activities sponsored by the company

(VI) Implementation of Ethical Corporate Management and variations with management principles of publicly-listed companies and reasons

1. Performance of integrity operation and the difference between integrity operation rules of listed and OTC companies and the reasons

(IX) Statement on Internal Control

Important resolutions of the board of directors

2. Important Resolutions of the 2020 annual shareholders' meeting

V Information on CPA fees

(I) Change of Certified Public Accountant in 2020

(II) The amount, ratio and reasons for the decrease in auditing fees shall be disclosed if there is a change in accounting firm and the auditing fees in the year of such change is less than the auditing fees in the previous year: None.

VI. Information on change of accountant’s information:

(I) Regarding the former accountants

(II) Regarding the new accountant

VIII. Any transfer of shareholdings and changed equity pledge from the directors, managers and shareholder(s) holding more than 10% of the shares during the most recent year and as of the publication date of the annual report:

(I) Changes in equity among the directors, manager and large shareholder(s)

(II) Equity transfer information: None.

IV. Information of relationships between TOP 10 shareholders are related parties:

Chapter 4 Capital Overview

I. Capital and Shares

(I) Source of Capital

1. Capitalization

2. Types of Stock

(II) Composition of Shareholders

(III) Equity Dispersion

(IV) List of Major Shareholders

(V) Data on share price, net value, profit, and dividend of the past two years

(VI) Company’s dividend policy and its current implementation status

1. Dividend policy as defined in the articles of incorporation ：

2. Suggested dividend appropriate in this shareholders’ meeting ：

Profit distribution for 2020

Chairman: Peter Lin Manager: Kevin Kuo Accounting Supervisor: Hong Guan-wen

(VII) Employee bonus and rewards for directors and auditors

(IX) Buyback of Common Stock: None

VIII. Financing Plans and Implementation: None

Chapter 5 Business Information

I. Business Contents

TXC Annual Report 2020

1. Dividend policy as defined in the articles of incorporation `：`

2. Suggested dividend appropriate in this shareholders’ meeting `：`

Note `：` Glossary `：`

Note `：` Glossary `：`