TXC - Interim / Quarterly Report 2021

TXC Corporation and Subsidiaries Consolidated Financial Statements for the Six Months Ended June 30, 2021 and 2020

TXC CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Note 6) Financial assets at fair value through profit or loss - current (Note 7) Financial assets at amortized cost - current (Note 9) Notes receivable (Note 10) Trade receivables (Note 10) Trade receivables from related parties (Notes 10 and 29) Other receivables Other receivables from related parties (Note 29) Current tax assets Inventories (Note 11) Non-current assets held for sale (Note 13) Other current assets Total current assets NON-CURRENT ASSETS Financial assets at fair value through profit or loss - non-current (Note 7) Financial assets at fair value through other comprehensive income - non-current (Note 8) Financial assets measured at cost - non-current (Note 9) Investments accounted for using equity method (Note 14) Property, plant and equipment (Note 15) Right-of-use assets (Note 16) Investment properties (Note 17) Other intangible assets Deferred tax assets (Note 24) Prepayment for equipment Other non-current assets Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Note 18) Financial liabilities at fair value through profit or loss - current (Note 7) Contract liabilities - current (Notes 11 and 22) Trade payables Trade payables to related parties (Note 29) Other payables (Note 19) Other payables to related parties (Note 29) Current tax liabilities (Note 24) Lease liabilities - current (Note 16) Current portion of long-term borrowings (Note 18) Other current liabilities Total current liabilities NON-CURRENT LIABILITIES Long-term borrowings (Note 18) Deferred tax liabilities (Note 24) Lease liabilities - non-current (Note 16) Net defined benefit liabilities - non-current (Note 20) Guarantee deposits received Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY (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		June 30, 2021 (Reviewed) Amount % $ 2,857,784 16 597,431 3 229,205 1 1,942 - 3,796,716 21 40,505 - 64,426 - 768 - - - 2,848,936 16 17,946 - 170,126 1 10,625,785 58 - - 813,479 5 133,095 1 424,307 2 5,165,498 28 88,513 1 288,784 2 43,717 - 34,470 - 596,375 3 15,896 - 7,604,134 42 $ 18,229,919 100 $ 1,023,494 6 844 - 117,498 1 2,198,212 12 2,328 - 2,318,382 13 2,759 - 244,784 1 448 - 393,254 2 83,607 - 6,385,610 35 1,415,217 8 69,763 1 947 - 57,706 - 68,484 - 1,612,117 9 7,997,727 44 3,097,570 17 1,668,353 9 1,635,942 9 346,761 2 3,628,254 20 5,610,957 31 (607,980) (3) 463,292 2 (144,688) (1) 10,232,192 56 $ 18,229,919 100		December 31, 2020 (Audited) Amount % $ 2,218,277 14 534,489 3 210,502 1 21,959 - 3,473,742 21 30,162 - 44,550 1 490 - 8,067 - 2,816,838 17 35,892 - 192,633 1 9,587,601 58 9,255 - 525,304 3 704,495 4 421,512 3 4,808,588 29 92,303 1 48,083 - 41,684 - 39,892 - 304,784 2 18,210 - 7,014,110 42 $ 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		June 30, 2020 (Reviewed)
						Amount % $ 1,981,131 14 624,335 4 269,857 2 52,568 - 2,800,416 19 15,454 - 77,951 1 677 - 16,442 - 2,580,132 18 - - 252,686 2 8,671,649 60 9,255 - 303,102 2 204,459 2 474,278 3 4,314,937 30 91,265 1 53,169 - 33,432 - 36,418 - 343,432 2 20,600 - 5,884,347 40 $ 14,555,996 100 $ 564,725 4 871 - 167,784 1 1,764,989 12 230 - 1,605,387 11 2,783 - 93,597 1 3,101 - 88,981 1 25,919 - 4,318,367 30 1,612,547 11 101,496 1 1,395 - 68,526 - 34,555 - 1,818,519 12 6,136,886 42 3,097,570 21 1,667,908 12 1,480,696 10 524,372 3 2,427,028 17 4,432,096 30 (750,604) (5) (27,860) - (778,464) (5) 8,419,110 58 $ 14,555,996 100

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

(With Deloitte & Touche review report dated August 12, 2021)

TXC CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings Per Share) (Reviewed, Not Audited)

SALES (Note 22) COST OF GOODS SOLD (Notes 11 and 23) GROSS PROFIT OPERATING EXPENSES (Note 23) Selling and marketing expenses General and administrative expenses Research and development expenses Expected credit loss recognized 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 profit 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 PERIOD		For the Three Months Ended June 30	For the Three Months Ended June 30	For the Three Months Ended June 30		For the Six Months	For the Six Months	Ended June 30
		2021		2020		2021		2020
		Amount % $ 4,341,126 100 (2,755,045) (63) 1,586,081 37 146,011 3 165,921 4 234,336 6 2 - 546,270 13 1,039,811 24 5,074 - 30,817 1 5,530 - (9,831 ) - 2,956 - 34,546 1 1,074,357 25 (154,051) (4) 920,306 21		Amount % $ 2,523,956 100 (1,768,971) (70) 754,985 30 114,353 5 100,084 4 183,970 7 - - 398,407 16 356,578 14 5,793 1 19,057 1 5,178 - (4,122 ) - 29,686 1 55,592 3 412,170 17 (43,052) (2) 369,118 15		Amount % $ 7,651,835 100 (4,868,947) (64) 2,782,888 36 282,686 3 294,860 4 454,509 6 2 - 1,032,057 13 1,750,831 23 12,656 - 48,775 1 26,048 - (14,873 ) - 4,462 - 77,068 1 1,827,899 24 (275,743) (4) 1,552,156 20		Amount % $ 4,675,138 100 (3,279,462) (70) 1,395,676 30 220,727 5 188,656 4 353,603 8 - - 762,986 17 632,690 13 12,865 - 37,992 1 12,547 - (9,327 ) - 23,386 1 77,463 2 710,153 15 (84,177) (1) 625,976 14 (Continued)

TXC CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings Per Share) (Reviewed, Not Audited)

OTHER COMPREHENSIVE INCOME (LOSS) Items that will not be reclassified subsequently to profit or loss: Unrealized gain on investments in equity instruments at fair value through other comprehensive income Share of the other comprehensive income (loss) of associates and joint ventures 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 income (loss) of associates and joint ventures accounted for using the equity method Other comprehensive income (loss) for the period, net of income tax TOTAL COMPREHENSIVE INCOME (LOSS) FOR THE PERIOD EARNINGS PER SHARE (Note 25) From continuing operations Basic Diluted		For the Three Months Ended June 30	For the Three Months Ended June 30	For the Three Months Ended June 30		For the Six Months Ended June 30	For the Six Months Ended June 30	For the Six Months Ended June 30
		2021		2020		2021		2020
		Amount % $ 52,438 1 (51) - 52,387 1 (42,902 ) (1 ) (1,368) - (44,270) (1) 8,117 - $ 928,423 21 $2.97 $2.96		Amount % $ - - 39 - 39 - (134,339 ) (6 ) (2,470) - (136,809) (6) (136,770) (6) $ 232,348 9 $1.19 $1.19		Amount % $ 286,779 4 (51) - 286,728 4 (82,011 ) (1 ) (2,694) - (84,705) (1) 202,023 3 $ 1,754,179 23 $5.01 $4.98		Amount % $ 34,478 1 67 - 34,545 1 (166,079 ) (4 ) 92 - (165,987) (4) (131,442) (3) $ 494,534 11 $2.02 $2.01

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

(With Deloitte & Touche review report dated August 12, 2021)

(Concluded)

(Reviewed, Not Audited)

TXC CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (In Thousands of New Taiwan Dollars)

BALANCE AT JANUARY 1, 2020 Appropriation of 2019 earnings (Note 21) Legal reserve Special reserve Cash dividends distributed by the Company Net profit for the six months ended June 30, 2020 Other comprehensive income (loss) for the six months ended June 30, 2020, net of income tax Total comprehensive income (loss) for the six months ended June 30, 2020 Disposal of investments in equity instruments designated as at fair value through other comprehensive income Surplus donated Changes in capital surplus from investment in associates and joint ventures accounted for using the equity method BALANCE AT JUNE 30, 2020 BALANCE AT JANUARY 1, 2021 Appropriation of 2020 earnings (Note 21) Legal reserve Special reserve Cash dividends distributed by the Company Net profit for the six months ended June 30, 2021 Other comprehensive income (loss) for the six months ended June 30, 2021, net of income tax Total comprehensive income (loss) for the six months ended June 30, 2021 Other changes in capital surplus BALANCE AT JUNE 30, 2021	Equity Attributable to Owners of the Company	Equity Attributable to Owners of the Company	Other Equity Exchange Differences on Translating the Financial Unrealized Gain (Loss) on Financial Assets at Fair Value Through Other Statements of Comprehensive Foreign Operations Income $ (584,617) $ 60,245 - - - - - - - - (165,987) 34,607 (165,987) 34,607 - (122,086) - - - (626) $ (750,604) $ (27,860) $ (523,275) $ 176,513 - - - - - - - - (84,705) 286,779 (84,705) 286,779 - - $ (607,980) $ 463,292	Total Equity $ 8,697,751 - - (774,393) 625,976 (131,442) 494,534 - (1) 1,219 $ 8,419,110 $ 9,655,006 - - (1,177,077) 1,552,156 202,023 1,754,179 84 $ 10,232,192
	Shares (In Thousands) Share Capital Capital Surplus 309,757 $ 3,097,570 $ 1,666,690 - - - - - - - - - - - - - - - - - - - - - - - (1) - - 1,219 309,757 $ 3,097,570 $ 1,667,908 309,757 $ 3,097,570 $ 1,668,269 - - - - - - - - - - - - - - - - - - - - 84 309,757 $ 3,097,570 $ 1,668,353	Retained Earnings Unappropriated Legal Reserve Special Reserve Earnings $ 1,413,518 $ 254,907 $ 2,789,438 67,178 - (67,178) - 269,465 (269,465) - - (774,393) - - 625,976 - - (62) - - 625,914 - - 122,086 - - - - - 626 $ 1,480,696 $ 524,372 $ 2,427,028 $ 1,480,696 $ 524,372 $ 3,230,861 155,246 - (155,246) - (177,611) 177,611 - - (1,177,077) - - 1,552,156 - - (51) - - 1,552,105 - - - $ 1,635,942 $ 346,761 $ 3,628,254

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

(With Deloitte & Touche review report dated August 12, 2021)

TXC CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) (Reviewed, Not Audited)

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Depreciation expenses Amortization expenses Expected credit loss recognized on trade receivables Net gain on fair value changes of financial assets and liabilities at fair value through profit or loss Finance costs Interest income Share of profit of associates and joint ventures Gain on disposal of property, plant and equipment Impairment losses recognized 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 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 Purchase of financial assets/liabilities at fair value through profit or loss Proceeds from sale of financial assets at fair value through profit or loss		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 1,827,899 506,165 4,591 2 (10,369) 14,873 (12,656) (4,462) (1,221) 5,750 - 20,017 (323,017) (10,344) (19,866) (278) (277,164) 21,541 (611,581) 250,614 (1,215) 179,096 1,279 56,830 (5,854) 1,610,630 (15,654) (131,446) 1,463,530 (134,277) 82,734	2020 $ 710,153 396,426 3,420 - (11,306) 9,327 (12,865) (23,386) (2,299) 3,161 (27,921) 54,574 (22,345) (11,416) (37,426) (598) (540,844) (84,177) 99,760 105,903 152 106,751 (67) 12,639 (5,505) 722,111 (9,733) (93,979) 618,399 (35,058) 160,807 (Continued)

TXC CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) (Reviewed, Not Audited)

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 Proceeds from sale of financial assets at amortized cost Acquisition of investments accounted for using equity method Proceeds from disposal of non-current assets held for sale Payments for property, plant and equipment Proceeds from disposal of property, plant and equipment Payments for intangible assets Payments for investment properties Decrease (increase) in other non-current assets Increase in prepayments for equipment Interest 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 Other changes in capital surplus Net cash (used in) generated from financing activities EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ (5,359) - (93,772) 641,491 (1,658) 17,946 (1,023,934) 123,621 (3,713) - 2,314 (291,591) 12,646 (673,552) 108,531 100,000 (357,420) 32,357 - (1,554) 84 (118,002) (32,469) 639,507 2,218,277 $ 2,857,784	2020 $ - 160,211 (322,737) - (3,539) - (732,187) 20,197 (9,608) (312) (4,327) (173,962) 12,927 (927,588) 102,464 266,103 - - (1,930) (1,562) (1) 365,074 (60,989) (5,104) 1,986,235 $ 1,981,131

The accompanying notes are an integral part of the consolidated financial statements. (With Deloitte & Touche review report dated August 12, 2021)

(Concluded)

TXC CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2021 AND 2020 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise) (Reviewed, Not Audited)

1. GENERAL INFORMATION

TXC Corporation (the “Company”) was incorporated in the Republic of China (ROC) on December 28, 1983.

TXC specializes in producing high quality crystals and crystal oscillator (CXO) as well as develops a variety of sensors by core technology to satisfy the market demand. Sensors are applied to various applications including mobile communication, information and storage device, internet of things, vehicle electronics, telecommunication equipment, smart home, AI, medical care, and 5G, etc.

TXC’s shares have been listed on the Taiwan Stock Exchange since August 26, 2002.

The consolidated financial statements are presented in the Company’s functional currency, the New Taiwan dollar.

To ensure the rights and interests of investors through full disclosure of operational governance, the Company applied for the Corporate Governance Assessment held by the Taiwan Corporate Governance Association (TCGA). The Company received “CG6005 Standard Corporate Governance Assessment Certification” and the “CG6008 Advanced Corporate Governance Assessment Certification” on March 23, 2011, and June 27, 2013, respectively. For the “Corporate Governance Evaluation” jointly held by the Taiwan Stock Exchange Corporation (TWSE) and Taipei Exchange, under the category of listed companies, the company was awarded as the top 20 percent in 2014, top 5 percent from 2015 to 2017, and top 6 to 20 percent in 2018 and 2019. The Company will continue to strengthen corporate governance with the intention to achieve international standards for protection of public interest.

2. APPROVAL OF FINANCIAL STATEMENTS

The consolidated financial statements were approved by the Company’s board of directors on August 12, 2021.

3. APPLICATION OF NEW, AMEND AND REVISED STANDARDS, AND INTERPRETATIONS

a. Initial application of the amendments to the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) (collectively, the “IFRSs”) endorsed and issued into effect by the Financial Supervisory Commission (FSC)

The initial application of the IFRSs endorsed and issued into effect by the FSC did not have material impact on the Group’s accounting policies.

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b. New IFRSs endorsed by the FSC in 2022

New IFRSs

Effective Date Announced by IASB

“Annual Improvements to IFRS Standards 2018-2020” January 1, 2022 (Note 1) Amendments to IFRS 3 “Reference to the Conceptual Framework” January 1, 2022 (Note 2) Amendments to IAS 16 “Property, Plant and Equipment - Proceeds January 1, 2022 (Note 3) before Intended Use”
Amendments to IAS 37 “Onerous Contracts - Cost of Fulfilling a January 1, 2022 (Note 4) Contract”
Note 1: The amendments to IFRS 9 will be applied prospectively to modifications and exchanges of financial liabilities that occur on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IAS 41 “Agriculture” will be applied prospectively to the fair value measurements on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IFRS 1 “First-time Adoptions of IFRSs” will be applied retrospectively for annual reporting periods beginning on or after January 1, 2022.
Note 2: The amendments are applicable to business combinations for which the acquisition date is on or after the beginning of the annual reporting period beginning on or after January 1, 2022.
Note 3: The amendments are applicable to property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after January 1, 2021.
Note 4: The amendments are applicable to contracts for which the entity has not yet fulfilled all its obligations on January 1, 2022.
1) Annual Improvements to IFRS Standards 2018-2020

Several standards, including IFRS 9 “Financial Instruments”, were amended in the annual improvements. IFRS 9 requires the comparison of the discounted present value of the cash flows under the new terms, including any fees paid net of any fees received, with that of the cash flows under the original financial liability when there is an exchange or modification of debt instruments. The new terms and the original terms are substantially different if the difference between those discounted present values is at least 10%. The amendments to IFRS 9 clarify that the only fees that should be included in the above assessment are those fees paid or received between the borrower and the lender.

2) Amendments to IFRS 3 “Reference to the Conceptual Framework”

The amendments replace the references to the Conceptual Framework of IFRS 3 and specify that the acquirer shall apply IFRIC 21 “Levies” to determine whether the event that gives rise to a liability for a levy has occurred at the acquisition date.

3) Amendments to IAS 16 “Property, Plant and Equipment: Proceeds before Intended Use”

The amendments prohibit an entity from deducting from the cost of an item of property, plant and equipment any proceeds from selling items produced while bringing that asset to the location and condition necessary for it to be capable of operating in the manner intended by management. The cost of those items is measured in accordance with IAS 2 “Inventories”. Any proceeds from selling those items and the cost of those items are recognized in profit or loss in accordance with applicable standards.

The amendments are applicable only to items of property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after January 1, 2021. The Group will restate its comparative information when it initially applies the aforementioned amendments.

c. New IFRSs in issue but not yet endorsed and issued into effect by the FSC

New IFRSs Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between An Investor and Its Associate or Joint Venture” IFRS 17 “Insurance Contracts” Amendments to IFRS 17 Amendments to IAS 1 “Classification of Liabilities as Current or Non-current” Amendments to IAS 1 “Disclosure of Accounting Policies” Amendments to IAS 8 “Definition of Accounting Estimates” Amendments to IAS 12 “Deferred Tax related to Assets and Liabilities arising from a Single Transaction”	Effective Date Announced by IASB (Note 1)
	To be determined by IASB January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 (Note 2) January 1, 2023 (Note 3) January 1, 2023 (Note 4)

New IFRSs
Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets
between An Investor and Its Associate or Joint Venture”

IFRS 17 “Insurance Contracts”

Amendments to IFRS 17

Amendments to IAS 1 “Classification of Liabilities as Current or
Non-current”

Amendments to IAS 1 “Disclosure of Accounting Policies”

Amendments to IAS 8 “Definition of Accounting Estimates”

Amendments to IAS 12 “Deferred Tax related to Assets and
Liabilities arising from a Single Transaction”

Effective Date
Announced by IASB (Note 1)

To be determined by IASB
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023 (Note 2)
January 1, 2023 (Note 3)
January 1, 2023 (Note 4)

Note 1: Unless stated otherwise, the above New IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.
Note 2: The amendments will be applied prospectively for annual reporting periods beginning on or after January 1, 2023.
Note 3: The amendments are applicable to changes in accounting estimates and changes in accounting policies that occur on or after the beginning of the annual reporting period beginning on or after January 1, 2023.
Note 4: Except that deferred taxes will be recognized on January 1, 2022 for temporary differences associated with leases and decommissioning obligations, the amendments will be applied prospectively to transactions that occur on or after January 1, 2022.
1) Amendments to IAS 1 “Disclosure of Accounting Policies”

The amendments specify that the Group should refer to the definition of material to determine its material accounting policy information to be disclosed. Accounting policy information is material if it can reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements. The amendments also clarify that:

Accounting policy information that relates to immaterial transactions, other events or conditions is immaterial and need not be disclosed;
The Group may consider the accounting policy information as material because of the nature of the related transactions, other events or conditions, even if the amounts are immaterial; and
Not all accounting policy information relating to material transactions, other events or conditions is itself material.
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The amendments also illustrate that accounting policy information is likely to be considered as material to the financial statements if that information relates to material transactions, other events or conditions and:

a) The Group changed its accounting policy during the reporting period and this change resulted in a material change to the information in the financial statements;
b) The Group chose the accounting policy from options permitted by the standards;
c) The accounting policy was developed in accordance with IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors” in the absence of an IFRS that specifically applies;
d) The accounting policy relates to an area for which the Group is required to make significant judgements or assumptions in applying an accounting policy, and the Group discloses those judgements or assumptions; or
e) The accounting is complex and users of the financial statements would otherwise not understand those material transactions, other events or conditions.
2) Amendments to IAS 8 “Definition of Accounting Estimates”

The amendments define that accounting estimates are monetary amounts in financial statements that are subject to measurement uncertainty. In applying accounting policies, the Group may be required to measure items at monetary amounts that cannot be observed directly and must instead be estimated. In such a case, the Group uses measurement techniques and inputs to develop accounting estimates to achieve the objective. The effects on an accounting estimate of a change in a measurement technique or a change in an input are changes in accounting estimates unless they result from the correction of prior period errors.

Except for the above impact, as of the date the consolidated financial statements were authorized for issue, the Group is continuously assessing the possible impact that the application of other standards and interpretations will have on the Group’s financial position and financial performance and will disclose the relevant impact when the assessment is completed.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Statement of compliance

These interim consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IAS 34 “Interim Financial Reporting” as endorsed and issued into effect by the FSC. Disclosure information included in these interim consolidated financial statements is less than the disclosure information required in a complete set of annual consolidated financial statements.

b. Basis of preparation

The consolidated financial statements have been prepared on the historical cost basis except for financial instruments which are measured at fair value.

The fair value measurements, which are grouped into Levels 1 to 3 based on the degree to which the fair value measurement inputs are observable and based on the significance of the inputs to the fair value measurement in its entirety, are described as follows:

1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;
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2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for an asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and
3) Level 3 inputs are unobservable inputs for an asset or liability.
c. Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and the entities controlled by the Company (i.e., its subsidiaries, including structured entities).

Income and expenses of subsidiaries acquired or disposed of during the period are included in the consolidated statement of profit or loss and other comprehensive income from the effective dates of acquisitions up to the effective dates of disposals, as appropriate.

When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the Company.

All intra-group transactions, balances, income and expenses are eliminated in full upon consolidation.

Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions.

d. Other significant accounting policies

Except for the following, please refer to the consolidated financial statements for the year ended December 31, 2020.

1) Retirement benefits

Pension cost for an interim period is calculated on a year-to-date basis by using the actuarially determined pension cost rate at the end of the prior financial year, adjusted for significant market fluctuations since that time and for significant plan amendments, settlements, or other significant one-off events.

2) Other long-term employee benefits

Other long-term employee benefits are accounted for in the same way as the accounting required for defined benefit plans except that remeasurement is recognized in profit or loss.

3) Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax. Interim period income taxes are assessed on an annual basis and calculated by applying to an interim period’s pre-tax income the tax rate that would be applicable to expected total annual earnings.

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Group’s accounting policies, management is required to make judgments, estimations, and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered relevant. Actual results may differ from these estimates.

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The Group considers the recent development of the COVID-19 in Taiwan and its economic environment implications when making its critical accounting estimates in cash flow projections, growth rate, discount rate, profitability, etc. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised if the revisions affect only that period or in the period of the revisions and future periods if the revisions affect both current and future periods.

The same critical accounting judgments and key sources of estimation uncertainty of consolidated financial statements have been followed in these consolidated financial statements as were applied in the preparation of the consolidated financial statements for the year ended December 31, 2020.

6. CASH AND CASH EQUIVALENTS

June 30,
2021
December 31,
2020
Cash on hand
$ 1,413
$ 1,256

Checking accounts and demand deposits
2,292,943
1,928,922
Cash equivalents (investments with original
maturities of less than three months)
Time deposits
443,428
288,099
Repurchase agreements collateralized by bonds
120,000

-

$ 2,857,784
$ 2,218,277

FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS
June 30,
2021
December 31,
2020
Financial assets at FVTPL-current
Financial assets mandatorily classified as at
FVTPL
Derivative financial instruments (not under
hedge accounting)
Foreign exchange forward contracts and
exchange contracts (b)
$ 474
$ 10,459

Non-derivative financial assets
Mutual funds
191,334
259,333
Hybrid financial assets
Structured deposits (a)

405,623

264,697

596,957

524,030

$ 597,431
$ 534,489

Financial assets at FVTPL-non-current
Financial assets mandatorily classified as at
FVTPL
Non-derivative financial assets
Foreign unlisted shares
$ -
$ 9,255

June 30,
2020
$ 1,252
1,854,191
125,688

-
$ 1,981,131
June 30,
2020
$ 309
416,785
207,241
624,026
$ 624,335
$ 9,255
(Continued)

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

12 -

June 30,	December 31,	June 30,
2021	2020	2020

Financial liabilities at FVTPL - current

Financial liabilities mandatorily classified as at FVTPL Derivative financial instruments (not under hedge accounting) Foreign exchange forward contracts and exchange contracts (b) $ 844 $ 1,455 $ 871 (Concluded)

a. The Group entered into structured time deposit contract with Bank during the six months ended June 30, 2021 and 2020. The structured time deposit contract includes an embedded derivative instrument which is not closely related to the host contract. The entire contract was assessed and mandatorily classified as at FVTPL since it contained a host that is an asset within the scope of IFRS 9.
b. At the end of the reporting period, foreign exchange contracts and exchange contracts not under hedge accounting were as follows:

			Contract Amount
	Currency	Maturity Date	(In Thousands)
June 30, 2021
Knock-out forward	USD/JPY	2021.07.06	USD1,500/JPY166,350
Exchange contracts	USD/NTD	2021.07.23-2021.08.27	USD9,000/NTD250,877
Foreign exchange forward	USD/NTD	2021.08.20-2021.09.17	USD12,000/NTD339,300
contracts
Sell	USD/RMB	2021.07.05-2021.10.22	USD9,000/RMB58,477
Sell	USD/RMB	2021.07.28-2021.11.26	USD11,500/RMB75,012
Sell	USD/JPY	2021.07.08-2021.07.19	USD2,000/JPY220,473
December 31, 2020
Sell	USD/RMB	2021.01.27-2021.06.28	USD15,500/RMB104,369
Knock-out forward	USD/JPY	2021.01.04-2021.01.11	USD2,000/JPY 210,500
Exchange contracts	USD/NTD	2021.01.05-2021.02.17	USD4,000/NTD114,778
Foreign exchange forward	USD/NTD	2021.01.29	USD4,000/JPY 115,560
contracts
June 30, 2020
Sell	USD/JPY	2020.07.06-2020.07.13	USD3,000/JPY 326,600
Exchange contracts	USD/NTD	2020.07.06-2020.08.31	USD9,900/NTD294,944
Foreign exchange forward	USD/NTD	2020.07.20-2020.07.27	USD5,800/NTD174,725
contracts
Sell	USD/RMB	2020.07.28-2020.09.28	USD7,500/RMB53,287
Sell	USD/JPY	2020.07.06-2020.07.13	USD1,000/JPY108,855

The Group entered into foreign exchange forward contracts during the six months ended June 30, 2021 and 2020 to manage exposures due to exchange rate fluctuations of foreign currency denominated assets and liabilities. However, those contracts did not meet the criteria of hedge effectiveness and therefore were not accounted for using hedge accounting.

13 -

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

Non-current Investments in equity instruments at FVTOCI Investments in Equity Instruments at FVTOCI Non-current Domestic investments Emerging market shares UPI Semiconductor Corp. Unlisted shares and emerging market shares Win Precision Technology Co., Ltd. Marson Technology Company Limited. UPI Semiconductor Corp. Godsmith Sensor Inc. Clear Signal Technology Corporation Foreign investments Unlisted shares Zhejiang Bright Semiconductor Technology Company Limited Ningbo SJ Electronics Co., Ltd. Investment QST LLC	June 30, 2021 December 31, 2020 $ 813,479 $ 525,304 June 30, 2021 December 31, 2020 $ 400,224 $ - 89,323 89,323 - - - 113,446 10,967 10,967 5,359 - 505,873 213,736 233,128 236,095 69,743 70,630 4,735 4,843 307,606 311,568 $ 813,479 $ 525,304	June 30, 2020 $ 303,102 June 30, 2020 $ - 18,388 4,773 45,202 - - 68,363 205,860 25,138 3,741 234,739 $ 303,102

These investments in equity instruments are held for medium- to long-term strategic purposes. Accordingly, the management elected to designate these investments in equity instruments as at FVTOCI as they believe that recognizing short-term fluctuations in these investments’ fair value in profit or loss would not be consistent with the Group’s strategy of holding these investments for long-term purposes.

On March 12, 2021, UPI Semiconductor Corp.’s shares were listed on the Taipei Exchange. The transfer of fair value measurement level referred to Note 28.

In the six months ended June 30, 2020, the Group sold its shares in Guandong Failong Crystal Technology Co., Ltd. in order to manage credit concentration risk. The shares sold had a fair value of $160,211 thousand and its related unrealized gain of $122,086 thousand was transferred from other equity to retained earnings.

14 -

9. FINANCIAL ASSETS AT AMORTIZED COST

Current Domestic investments Pledge deposits (a) Time deposits with original maturity of more than three months (b) Restricted deposits (c and d) Non-current Domestic investment Time deposits with original maturities of more than one year (b) Restricted deposits (d)	June 30, 2021 December 31, 2020 $ 61,007 $ 59,504 70,323 87,340 97,875 63,658 $ 229,205 $ 210,502 $ 133,095 $ 290,224 - 414,271 $ 133,095 $ 704,495	June 30, 2020 $ 76,071 193,786 - $ 269,857 $ 204,459 - $ 204,459

a. Refer to Note 30 for information relating to investments in financial assets at amortized cost pledged as security.
b. The ranges of interest rates for time deposits with original maturities of more than 3 months were approximately 3.91%-4.38%, 0.3%-2.6% and 1.40%-4.38% per annum as of June 30, 2021, December 31, 2020 and June 30, 2020, respectively.
c. Restricted deposits are deposits for Chongqing Zhongyang’s presold items of the construction in progress, which should not be used for other purposes before acquiring the real estate registration certificate. The deposits restriction was lifted in May 2021.
d. According to “Regulations Governing the Management, Utilization, and Taxation of Repatriated Offshore Funds”, the Group had submitted an investment proposal and was approved by National Bureau, Ministry of Finance. Based on the regulation, the deposits are restricted only to approved investment project, and should not be used for other purposes.

10. NOTES RECEIVABLE, TRADE RECEIVABLES AND OTHER RECEIVABLES

Notes receivable Notes receivable - operating Less: Allowance for impairment loss	June 30, 2021 December 31, 2020 $ 1,948 $ 21,965 (6) (6) $ 1,942 $ 21,959	June 30, 2020 $ 52,574 (6) $ 52,568 (Continued)

15 -

Trade receivables At amortized cost Gross carrying amount Less: Allowance for impairment loss	June 30, 2021 December 31, 2020 $ 3,850,680 $ 3,517,404 (13,459) (13,500) $ 3,837,221 $ 3,503,904	June 30, 2020 $ 2,829,195 (13,325) $ 2,815,870 (Concluded)

In order to minimize credit risk, the management of the Company has delegated a team responsible for determining credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. In addition, the Group reviews the recoverable amount of each individual trade debt at the end of the period to ensure that adequate allowance is made for possible irrecoverable amounts. In this regard, the management believes the Group’s credit risk was significantly reduced.

The Group measures the loss allowance for trade receivables at an amount equal to lifetime ECLs. The expected credit losses on trade receivables are estimated using a provision matrix prepared by reference to the past default experience of the customer, the customer’s current financial position, economic condition of the industry in which the customer operates, as well as the GDP forecasts and industry outlook. As the Group’s historical credit loss experience does not show significantly different loss patterns for different customer segments, the provision for loss allowance based on past due status is not further distinguished according to the Group’s different customer base.

The Group writes off a trade receivable when there is evidence indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery. For trade receivables that have been written off, the Group continues to engage in enforcement activity to attempt to recover the receivables due. Where recoveries are made, these are recognized in profit or loss.

The following table details the loss allowance of trade receivables based on the Group’s provision matrix.

June 30, 2021

Not Past Due Gross carrying amount $ 3,630,345 Loss allowance (Lifetime ECL) (11,424) Amortized cost $ 3,618,921 December 31, 2020 Not Past Due Gross carrying amount $ 3,381,505 Loss allowance (Lifetime ECL) (12,085) Amortized cost $ 3,369,420	1 to 90 Days $ 222,050 (1,998) $ 220,052 1 to 90 Days $ 157,864 (1,421) $ 156,443	91 to 150 Days $ 200 (10) $ 190 91 to 150 Days $ - - $ -	151 to 180 Days $ - - $ - 151 to 180 Days $ - - $ -	Over 180 Days $ 33 (33) $ - Over 180 Days $ - - $ -	Total $ 3,852,628 (13,465) $ 3,839,163 Total $ 3.539.369 (13,506) $ 3,525,863

16 -

June 30, 2020

Not Past Due Gross carrying amount $ 2,706,242 Loss allowance (Lifetime ECL) (11,717) Amortized cost $ 2,694,525	1 to 90 Days $ 174,661 (1,571) $ 173,090	91 to 150 Days $ 866 (43) $ 823	151 to 180 Days $ - - $ -	Over 180 Days $ - - $ -	Total $ 2,881,769 (13,331) $ 2,868,438

The expected credit loss rate for each above range of the Group is not more than 1% within and within 90 days of the overdue period; 5% or less within the overdue period from 91 to 180 days; and 5%-100% when the overdue period exceeds 180 days.

The movements of the loss allowance of trade receivables were as follows:

Balance at January 1 Add: Impairment losses recognized Foreign exchange gains and losses Balance at June 30		June 30
		2021 $ 13,506 2 (43) $ 13,465	2020 $ 13,415 - (84) $ 13,331

11. INVENTORIES

Finished goods Work in process Raw materials Supplies and spare parts Merchandise Land for development construction in progress Buildings and land held for sale	June 30, 2021 December 31, 2020 $ 419,419 $ 315,454 396,849 378,840 576,129 543,953 124,366 102,011 532,576 295,025 651,375 1,181,555 148,222 - $ 2,848,936 $ 2,816,838	June 30, 2020 $ 403,722 345,474 483,091 100,353 314,799 932,693 - $ 2,580,132

The cost of crystal inventories recognized as cost of goods sold for the three and the six months ended June 30, 2021 and 2020 included $2,216,534 thousand, $1,768,971 thousand, $4,330,436 thousand and $3,279,462 thousand, respectively.

The cost of real estate inventories recognized as cost of goods sold for the three and the six months ended June 30, 2021 included $538,511 thousand and $538,511 thousand, respectively.

The construction in progress is the payment made by Chongqing Zhongyang Properties Co., Ltd. to acquire the land use right in Chongqing Gao-Shing District to develop and sell real estate in 2012. Chongqing Zhongyang Properties Co., Ltd. has acquired real estate certificate issued by Chongqing Association of land and real estate resources during 2013. The construction began in 2018 and continued to recognize revenue after completion in April 2021.

17 -

The details of the land for development site are as follows:

	June 30,	2021
Prepaid Land Rights $ 194,957	Project Cost Total $ 456,418 $ 651,375 December 31, 2020		Contract Liabilities - Current $ -
Prepaid Land Rights $ 197,438	Project Cost $ 984,117 June 30,	Total $ 1,181,555 2020	Contract Liabilities - Current $ 729,079
Prepaid Land Rights $ 189,326	Project Cost $ 743,367	Total $ 932,693	Contract Liabilities - Current $ 167,784

The details of the building and land held for sale are as follows:

Area Jing Yuan	June 30, 2021
	Buildings and Land Held for Sale Contract Liabilities - Current $ 148,222 $ 117,498

The information about transferring from inventories to investment properties are set out in Note 17.

The information about capitalisation of interest are set out in Note 23.

Land for development construction in progress pledged as collateral for bank borrowings are set out in Note 30.

12. SUBSIDIARIES

Subsidiaries Included in the Consolidated Financial Statements

The detail information of the subsidiaries at the end of reporting period was as follows:

Investor Investee Nature of Activities TXC Corporation Taiwan Crystal Technology International Limited Investment management TXC Technology, Inc. Marketing activities TXC Japan Corporation Marketing activities Taiwan Crystal Technology (HK) Limited International trading TXC Europe GmbH Marketing activities	Proportion of Ownership June 30, 2021 December 31, 2020 June 30, 2020 Remark 100 100 100 a and m 100 100 100 b and m 100 100 100 c and m 100 100 100 e and m 100 100 100 j and m (Continued)

18 -

Investor
Investee
Nature of Activities
Taiwan Crystal Technology
International Limited
TXC (Ningbo) Corporation
Research and
development,
manufacture, and sale
of quartz elements and
related electronic
products
TXC (Ningbo) Corporation TXC (Chongqing) Corporation
Research and
development,
manufacture, and sale
of quartz elements and
related electronic
products
Chongqing Zhongyang Properties Co., Ltd. Properties development
Ningbo Beilun Jingyu Trading Corporation International trading
Ningbo Meishan Free Trade Port Area
Ding Kai Investment Management
Company Limited
Investment management
TETC CORP. NINGBO
Research and
development,
manufacture, and sale
of quartz elements and
related electronic
products
Chongqing Zhongyang
Properties Co., Ltd.
ChongQing Dingsen Commercial
Management Co., Ltd
Property management

Proportion of Ownership
June 30,
2021
December 31,
2020
June 30,
2020
Remark
100
100
100
d and m
100
100
100
f and m
100
100
100
g and m
100
100
100
h and m
100
100
100
i and m
100
100
-
l and m
100
100
-
k and m
(Concluded)

a. Taiwan Crystal Technology International Limited was incorporated on December 23, 1998 in Samoa.
b. TXC Technology, Inc. was incorporated on December 1, 2000 in California, U.S.A.
c. TXC Japan Corporation was incorporated on September 13, 2005 in Yokohama, Japan.
d. TXC (Ningbo) Corporation was incorporated on March 12, 1999 in Ningbo, China.
e. Taiwan Crystal Technology (HK) Limited was incorporated on July 6, 2010 in Hong Kong Special Administrative Region, China.
f. TXC (Chongqing) Corporation was incorporated on October 11, 2010 in Chongqing, China.
g. Chongqing Zhongyang Properties Co., Ltd. was incorporated on February 14, 2011 in Chongqing, China.
h. Ningbo Beilun Jingyu Trading Corporation was incorporated on September 7, 2011 in Ningbo, China.
i. Ningbo Meishan Free Trade Port Area Ding Kai Investment Management Company Limited was incorporated on May 12, 2017 in Beilun District, Ningbo, China.
j. TXC Europe GmbH was founded in Germany on August 17, 2018.
k. ChongQing Dingsen Commercial Management Co., Ltd. was incorporated on December 30, 2020 in Chongqing, China.
l. TETC CORP. NINGBO was incorporated on December 30, 2020 in Ningbo, China.
m. Except for the financial statements for the six months ended June 30, 2021 of Taiwan Crystal Technology International Limited, TXC (Ningbo) Corporation, TXC (Chongqing) Corporation, and Chongqing Zhongyang Properties Co., Ltd., all company are immaterial subsidiaries, their financial statements have not been reviewed.
19 -

13. NON-CURRENT ASSETS CLASSIFIED AS HELD FOR SALE

Domestic investments Unlisted shares Godsmith Sensor Inc.	June 30, 2021 December 31 2020 $ 17,946 $ 35,892	June 30, 2020 $ -

In November 2020, the Company’s board of directors approved to dispose of 1,800 thousand shares of the ordinary shares of Godsmith Sensor Inc. held with the expectation to complete the sale within twelve months. Accordingly, the Company has reclassified Godsmith Sensor Inc. as non-current assets held for sale, and were presented separately in the accompanying balance sheets.

The expected sales proceeds substantially lower than the carrying amount of investments accounted for using equity method. Accordingly, the non-current assets held for sale were measured at their fair value $36,000 thousand less costs to sell $108 thousand when reclassified investments accounted for using equity method as non-current assets held for sale. And the differences from the previous carrying amounts were recognized as loss on disposal of investments, which are presented in other gains and losses.

As of June 30, 2021, the Group had sold 900 thousand shares in Godsmith Sensor Inc. at fair value of $17,946 thousand.

14. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

June 30, 2021 December 31, 2020 June 30, 2020 Investments in associates and joint venture $ 424,307 $ 421,512 $ 474,278 a. Investment in associates June 30, 2021 December 31, 2020 June 30, 2020 Associates that are not individually material $ 379,707 $ 373,626 $ 424,697 For the Three Months Ended June 30 For the Six Months Ended June 30 2021 2020 2021 2020 The Group’s share of: Profit from continuing operations $ 4,231 $ 25,420 $ 7,168 $ 27,936 Other comprehensive income (loss) (1,419) (2,431) (2,745) 159 Total comprehensive income for the period $ 2,812 $ 22,989 $ 4,423 $ 28,095	June 30, 2021 December 31, 2020 June 30, 2020 Investments in associates and joint venture $ 424,307 $ 421,512 $ 474,278 a. Investment in associates June 30, 2021 December 31, 2020 June 30, 2020 Associates that are not individually material $ 379,707 $ 373,626 $ 424,697 For the Three Months Ended June 30 For the Six Months Ended June 30 2021 2020 2021 2020 The Group’s share of: Profit from continuing operations $ 4,231 $ 25,420 $ 7,168 $ 27,936 Other comprehensive income (loss) (1,419) (2,431) (2,745) 159 Total comprehensive income for the period $ 2,812 $ 22,989 $ 4,423 $ 28,095	June 30, 2021 December 31, 2020 June 30, 2020 Investments in associates and joint venture $ 424,307 $ 421,512 $ 474,278 a. Investment in associates June 30, 2021 December 31, 2020 June 30, 2020 Associates that are not individually material $ 379,707 $ 373,626 $ 424,697 For the Three Months Ended June 30 For the Six Months Ended June 30 2021 2020 2021 2020 The Group’s share of: Profit from continuing operations $ 4,231 $ 25,420 $ 7,168 $ 27,936 Other comprehensive income (loss) (1,419) (2,431) (2,745) 159 Total comprehensive income for the period $ 2,812 $ 22,989 $ 4,423 $ 28,095	June 30, 2021 December 31, 2020 June 30, 2020 Investments in associates and joint venture $ 424,307 $ 421,512 $ 474,278 a. Investment in associates June 30, 2021 December 31, 2020 June 30, 2020 Associates that are not individually material $ 379,707 $ 373,626 $ 424,697 For the Three Months Ended June 30 For the Six Months Ended June 30 2021 2020 2021 2020 The Group’s share of: Profit from continuing operations $ 4,231 $ 25,420 $ 7,168 $ 27,936 Other comprehensive income (loss) (1,419) (2,431) (2,745) 159 Total comprehensive income for the period $ 2,812 $ 22,989 $ 4,423 $ 28,095	June 30, 2021 December 31, 2020 June 30, 2020 Investments in associates and joint venture $ 424,307 $ 421,512 $ 474,278 a. Investment in associates June 30, 2021 December 31, 2020 June 30, 2020 Associates that are not individually material $ 379,707 $ 373,626 $ 424,697 For the Three Months Ended June 30 For the Six Months Ended June 30 2021 2020 2021 2020 The Group’s share of: Profit from continuing operations $ 4,231 $ 25,420 $ 7,168 $ 27,936 Other comprehensive income (loss) (1,419) (2,431) (2,745) 159 Total comprehensive income for the period $ 2,812 $ 22,989 $ 4,423 $ 28,095

			2021 $ 7,168 (2,745) $ 4,423	2020 $ 27,936 159 $ 28,095

Refer to Table 6 “name, locations, and related information of investees on which the Company exercises significant influence” for the nature of activities, principal place of business and country of incorporation of the associates.

20 -

In 2021 and 2020, the Group subscribed 43 thousand and 97 thousand ordinary shares of Tai-Shing for cash which amount to $1,658 thousand and $3,539 thousand, respectively; after the subscription, the Group’s percentage of ownership in Tai-Shing was 32.11% and 31.35%, respectively. The Group recognized goodwill of $587 thousand and $1,095 thousand as cost of investments in associates.

In 2019, the Group held a 31% interest in Godsmith Sensor Inc. which was accounted for using the equity method. In November 2020, the Group’s board of directors approved to dispose of 24% of the Group’s interest in Godsmith Sensor Inc. and consequently ceased to have significant influence over Godsmith Sensor Inc. The Group retained the remaining 7% interest as financial assets at FVTOCI whose fair value was $10,967 thousand. This transaction resulted in the recognition of a loss in profit or loss, calculated as follows:

Carrying amount of investment on the date of loss of significant influence $ 54,033 Less: Transfer to non-current assets held for sale (35,892) Less: Transfer to financial assets at FVTOCI (10,967) Less: Reversals - share of changes in capital surplus of associates (1,068) Loss recognized $ 6,106 b. Investment joint venture June 30, 2021 December 31, 2020 June 30, 2020 Joint ventures that are not individually material $ 44,600 $ 47,886 $ 49,581 For the Three Months Ended June 30 For the Six Months Ended June 30 2021 2020 2021 2020 The Group’s share of: Profit from continuing operations $ (1,275) $ 2,514 $ (2,706) $ (4,550) Total comprehensive income for the period $ (1,275) $ 2,514 $ (2,706) $ (4,550)	Carrying amount of investment on the date of loss of significant influence $ 54,033 Less: Transfer to non-current assets held for sale (35,892) Less: Transfer to financial assets at FVTOCI (10,967) Less: Reversals - share of changes in capital surplus of associates (1,068) Loss recognized $ 6,106 b. Investment joint venture June 30, 2021 December 31, 2020 June 30, 2020 Joint ventures that are not individually material $ 44,600 $ 47,886 $ 49,581 For the Three Months Ended June 30 For the Six Months Ended June 30 2021 2020 2021 2020 The Group’s share of: Profit from continuing operations $ (1,275) $ 2,514 $ (2,706) $ (4,550) Total comprehensive income for the period $ (1,275) $ 2,514 $ (2,706) $ (4,550)	Carrying amount of investment on the date of loss of significant influence $ 54,033 Less: Transfer to non-current assets held for sale (35,892) Less: Transfer to financial assets at FVTOCI (10,967) Less: Reversals - share of changes in capital surplus of associates (1,068) Loss recognized $ 6,106 b. Investment joint venture June 30, 2021 December 31, 2020 June 30, 2020 Joint ventures that are not individually material $ 44,600 $ 47,886 $ 49,581 For the Three Months Ended June 30 For the Six Months Ended June 30 2021 2020 2021 2020 The Group’s share of: Profit from continuing operations $ (1,275) $ 2,514 $ (2,706) $ (4,550) Total comprehensive income for the period $ (1,275) $ 2,514 $ (2,706) $ (4,550)	Carrying amount of investment on the date of loss of significant influence $ 54,033 Less: Transfer to non-current assets held for sale (35,892) Less: Transfer to financial assets at FVTOCI (10,967) Less: Reversals - share of changes in capital surplus of associates (1,068) Loss recognized $ 6,106 b. Investment joint venture June 30, 2021 December 31, 2020 June 30, 2020 Joint ventures that are not individually material $ 44,600 $ 47,886 $ 49,581 For the Three Months Ended June 30 For the Six Months Ended June 30 2021 2020 2021 2020 The Group’s share of: Profit from continuing operations $ (1,275) $ 2,514 $ (2,706) $ (4,550) Total comprehensive income for the period $ (1,275) $ 2,514 $ (2,706) $ (4,550)
		2021 $ (2,706) $ (2,706)	2020 $ (4,550) $ (4,550)

Refer to Table 6 “name, locations, and related information of investees on which the Company exercises significant influence” and Table 7 “information on investment in mainland China” for the nature of activities, principal place of business and country of incorporation of the joint venture.

Except for investments of Godsmith Sensor Inc. and Ningbo Longying Semiconductor Co., Ltd., which were accounted for using the equity method and the share of profit or loss and other comprehensive income of those investments were calculated based on financial statements which have been reviewed. Management believes there is no material impact on the equity method of accounting or the calculation of the share of profit or loss and other comprehensive income from the financial statements of Godsmith Sensor Inc. and Ningbo Longying Semiconductor Co., Ltd. which have not been reviewed.

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15. PROPERTY, PLANT AND EQUIPMENT

Cost Balance at January 1, 2020 Additions Disposals Transfer to investment properties Reclassification Effect of foreign currency exchange differences Balance at June 30, 2020 Accumulated depreciation and impairment Balance at January 1, 2020 Disposals Depreciation expenses Impairment losses reversed Transfer to investment property Effect of foreign currency exchange differences Balance at June 30, 2020 Carrying value at December 31, 2020 and January 1, 2021 Carrying value at June 30, 2020 Cost Balance at January 1, 2021 Additions Disposals Reclassified as intangible assets Transfer to inventories Effect of foreign currency exchange differences Balance at June 30, 2021 Accumulated depreciation and impairment Balance at January 1, 2021 Disposals Depreciation expenses Impairment losses Transfer to inventories Effect of foreign currency exchange differences Balance at June 30, 2021 Carrying value at June 30, 2021	Freehold Land $ 591,972 - - - - - $ 591,972 $ - - - - - - $ - $ 591,972 $ 593,855 $ 593,855 28,000 - - - - $ 621,855 $ - - - - - - $ - $ 621,855	Land Improvements $ 1,599 - - - - - $ 1,599 $ 656 - 122 - - - $ 778 $ 821 $ 699 $ 1,599 680 - - - - $ 2,279 $ 900 - 139 - - - $ 1,039 $ 1,240	Buildings Machinery and Equipment Transportation Equipment $ 2,520,068 $ 7,446,580 $ 15,268 10,689 682,355 1,224 (3,250 ) (198,993 ) (414 ) (2,014 ) - - 31,922 77,392 1,040 (25,089) (117,241) (376) $ 2,532,326 $ 7,890,093 $ 16,742 $ 1,218,237 $ 5,482,275 $ 11,887 (3,250 ) (181,258 ) (414 ) 65,720 309,999 915 - 3,161 - (937 ) - - (10,500) (77,332) (283) $ 1,269,270 $ 5,536,845 $ 12,105 $ 1,263,056 $ 2,353,248 $ 4,637 $ 1,261,910 $ 2,818,258 $ 6,734 $ 2,607,379 $ 8,734,385 $ 20,583 120,366 813,212 850 (659 ) (389,163 ) (753 ) - - - - - - (13,855) (67,091) (240) $ 2,713,231 $ 9,091,343 $ 20,460 $ 1,345,469 $ 5,916,127 $ 13,849 (659 ) (270,821 ) (733 ) 69,400 413,125 1,231 - 5,750 - - - - (6,043) (41,513) (164) $ 1,408,167 $ 6,022,668 $ 14,183 $ 1,305,064 $ 3,068,675 $ 6,277	Office Equipment Property under Construction $ 371,500 $ 32,196 35,802 2,117 (3,500 ) - - - (78,432 ) (31,922 ) (5,906) (310) $ 319,464 $ 2,081 $ 211,979 $ - (3,337 ) - 14,923 - - - - - (3,223) - $ 220,342 $ - $ 99,122 $ 2,081 $ 124,692 $ 2,440 $ 362,059 $ 2,440 56,850 3,976 (16,595 ) - - (2,429 ) (57 ) - (3,970) (43) $ 398,287 $ 3,944 $ 237,367 $ - (12,537 ) - 17,441 - - - (29 ) - (2,398) - $ 239,844 $ - $ 158,443 $ 3,944	Total $ 10,979,183 732,187 (206,157 ) (2,014 ) - (148,922) $ 11,354,277 $ 6,925,034 (188,259 ) 391,679 3,161 (937 ) (91,338) $ 7,039,340 $ 4,314,937 $ 4,808,588 $ 12,322,300 1,023,934 (407,150 ) (2,429 ) (57 ) (85,199) $ 12,851,399 $ 7,513,712 (284,750 ) 501,336 5,750 (29 ) (50,118) $ 7,685,901 $ 5,165,498

The above items of property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives as follows:

Land improvements 5-7 years Buildings Industrial building 3-51 years Electrical power systems 3-51 years Engineering systems 3-51 years Equipment Major production equipments 3-15 years Temperature control systems 4-7 years Transportation equipments 4-7 years Transportation equipments 4-5 years Office equipment 3-5 years

Property, plant and equipment pledged as collateral for bank borrowings is set out in Note 30.

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16. LEASE ARRANGEMENTS

a. Right-of-use assets

June 30, 2021 December 31, 2020 June 30, 2020 $ 87,129 $ 89,372 $ 86,788 - 1,323 2,644 1,384 1,608 1,833 $ 88,513 $ 92,303 $ 91,265 For the Three Months Ended June 30 For the Six Months Ended June 30 2021 2020 2021 2020 $ 560 $ 545 $ 1,129 $ 1,106 662 661 1,323 1,322 112 113 224 225 $ 1,334 $ 1,319 $ 2,676 $ 2,653	June 30, 2021 December 31, 2020 June 30, 2020 $ 87,129 $ 89,372 $ 86,788 - 1,323 2,644 1,384 1,608 1,833 $ 88,513 $ 92,303 $ 91,265 For the Three Months Ended June 30 For the Six Months Ended June 30 2021 2020 2021 2020 $ 560 $ 545 $ 1,129 $ 1,106 662 661 1,323 1,322 112 113 224 225 $ 1,334 $ 1,319 $ 2,676 $ 2,653	June 30, 2021 December 31, 2020 June 30, 2020 $ 87,129 $ 89,372 $ 86,788 - 1,323 2,644 1,384 1,608 1,833 $ 88,513 $ 92,303 $ 91,265 For the Three Months Ended June 30 For the Six Months Ended June 30 2021 2020 2021 2020 $ 560 $ 545 $ 1,129 $ 1,106 662 661 1,323 1,322 112 113 224 225 $ 1,334 $ 1,319 $ 2,676 $ 2,653	June 30, 2021 December 31, 2020 June 30, 2020 $ 87,129 $ 89,372 $ 86,788 - 1,323 2,644 1,384 1,608 1,833 $ 88,513 $ 92,303 $ 91,265 For the Three Months Ended June 30 For the Six Months Ended June 30 2021 2020 2021 2020 $ 560 $ 545 $ 1,129 $ 1,106 662 661 1,323 1,322 112 113 224 225 $ 1,334 $ 1,319 $ 2,676 $ 2,653
	$

2021 $ 560 662 112 $ 1,334		2021 $ 1,129 1,323 224 $ 2,676	2020 $ 1,106 1,322 225 $ 2,653

Right-of-use assets pledged as collateral for bank borrowings are set out in Note 30.

b. Lease liabilities

June 30, 2021 December 31, 2020 Carrying amounts Current $ 448 $ 1,777 Non-current 947 1,172 $ 1,395 $ 2,949 Range of discount rate for lease liabilities was as follows: June 30, 2021 December 31, 2020 Buildings 0.86% 0.86% Transportation equipment 0.86% 0.86%	June 30, 2020 $ 3,101 1,395 $ 4,496 June 30, 2020 0.86% 0.86%

c. Material lease-in activities and terms

The Group leases certain warehouses in trade zone with lease terms of 3 years from 2019 and leases certain transportation equipment with lease term of 5 years from September 2019. These arrangements do not contain renewal or purchase options.

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The Group also buys land use right for the construction of plants, offices and retail stores with use term of 50 years in mainland China specifies that payments will be paid at the time of contract and can be renewed upon the expiration of the period. The Group does not have purchase options to acquire the land and buildings at the end of the contract.

d. Other lease information

Expenses relating to short-term leases Total cash outflow for leases	For the Three Months Ended June 30 2021 2020 $ 55 $ 46 $ (833) $ (827)	For the Three Months Ended June 30 2021 2020 $ 55 $ 46 $ (833) $ (827)		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 55 $ (833)		2021 $ 109 $ (1,663)	2020 $ 89 $ (1,651)

The Group leases certain building which qualify as short-term leases. The Group has elected to apply the recognition exemption and thus, did not recognize right-of-use assets and lease liabilities for these leases.

17. INVESTMENT PROPERTIES

	Completed	Completed
	Investment
	Properties
Cost
Balance at January 1, 2020	$	92,455
Additions		312
Transferred from property, plant and equipment		2,014
Effect of foreign currency exchange differences		(1,472)
Balance at June 30, 2020	$	93,309
Accumulated depreciation and impairment
Balance at January 1, 2020	$	(37,890)
Transferred from property, plant and equipment		(937)
Depreciation expenses		(2,094)
Effect of foreign currency exchange differences		781
Balance at June 30, 2020	$	(40,140)
Carrying amounts at June 30, 2020	$	53,169
Carrying amounts at December 31, 2020 and January 1, 2021	$	48,083
Cost
Balance at January 1, 2021	$	90,548
Additions		245,157
Effect of foreign currency exchange differences		(2,739)
Balance at June 30, 2021	$	332,966
		(Continued)

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	Completed
	Investment
	Properties
Accumulated depreciation and impairment
Balance at January 1, 2021	$ (42,465)
Depreciation expenses	(2,153)
Effect of foreign currency exchange differences	436
Balance at June 30, 2021	$ (44,182)
Carrying amounts at June 30, 2021	$ 288,784
	(Concluded)

The investment properties held by the Group are depreciated using the straight-line method over their useful lives of 3-60 years.

The fair value of the Group’s investment properties as of June 30, 2021, December 31, 2020 and June 30, 2020 was $940,409 thousand, $528,065 thousand and $589,957 thousand, respectively. The determination of fair value was not performed by independent qualified professional valuers; however, the management of the Group used the valuation model that market participants would use in determining the fair value. The valuation was arrived at by reference to market evidence of transaction prices for similar properties.

The above fair value measurement has taken into consideration the uncertainty on the volatility in the markets due to the evolution of the COVID-19 pandemic.

All of the Group’s investment properties were held under freehold interests. The investment properties pledged as collateral for bank borrowing are set out in Note 30.

18. BORROWINGS

a. Short-term borrowings

Unsecured borrowings Bank loans Letters of credit	June 30, 2021 December 31, 2020 $ 1,023,494 $ 909,260 - 6,990 $ 1,023,494 $ 916,250	June 30, 2020 $ 548,301 16,424 $ 564,725

The interest rate on the letters of credit were 0.65%-3.45%, 0.35%-3.45% and 0.55%-1.10% per annum as of June 30, 2021, December 31, 2020 and June 30, 2020, respectively.

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b. Long-term borrowings

Secured borrowings (Note 30) Bank loans Less: Current portions Unsecured borrowings Bank loans Less: Current portions Long-term borrowings	June 30, 2021 December 31, 2020 $ 225,362 $ 285,287 (225,362) (285,287) - - 1,583,109 1,785,524 (167,892) (100,000) 1,415,217 1,685,524 $ 1,415,217 $ 1,685,524	June 30, 2020 $ 273,566 - 273,566 1,427,962 (88,981) 1,338,981 $ 1,612,547

The borrowings of the Group were as follows:

Maturity Date Floating rate borrowings Secured bank borrowing denominated in RMB 2021.09.04 Unsecured bank borrowing denominated in US$ 2022.02.26 Unsecured bank borrowing denominated in US$ 2022.05.28 Unsecured bank borrowing denominated in US$ 2020.09.01 Unsecured bank borrowing denominated in NT$ 2025.01.03 Unsecured bank borrowing denominated in NT$ 2024.09.15 Unsecured bank borrowing denominated in NT$ 2024.09.15 Unsecured bank borrowing denominated in NT$ 2021.11.04 Unsecured bank borrowing denominated in NT$ 2025.01.03 Unsecured bank borrowing denominated in NT$ 2025.01.03 Unsecured bank borrowing denominated in NT$ 2025.04.01 Unsecured bank borrowing denominated in NT$ 2022.08.19 Unsecured bank borrowing denominated in NT$ 2024.09.15 Unsecured bank borrowing denominated in NT$ 2025.01.03 Unsecured bank borrowing denominated in NT$ 2025.04.15 Less: Current portion	June 30, 2021 December 31, 2020 $ 225,362 $ 285,287 41,805 57,016 - 28,508 - - 131,250 150,000 300,000 300,000 100,000 100,000 - - 87,500 100,000 131,250 150,000 300,000 300,000 - 200,000 200,000 200,000 91,304 - 200,000 200,000 (393,254) (385,287) $ 1,415,217 $ 1,685,524	June 30, 2020 $ 273,566 59,321 29,660 88,981 150,000 300,000 100,000 100,000 100,000 - 300,000 - - - 200,000 (88,981)
		$ 1,612,547

The weighted average effective interest rate of the bank borrowings at June 30, 2021, December 31, 2020 and June 30, 2020 was 0.10%-6.18% per annum, 0.10%-6.18% per annum and 0.10%-6.18% per annum, respectively.

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19. OTHER LIABILITIES

Current Other payables Payables for bonuses to employees and directors Payables for commissions Payables for salaries Payables for bonuses Payables for annual leave Payables for purchases of equipment Payables for dividends Others	June 30, 2021 December 31, 2020 $ 392,797 $ 190,888 26,449 26,199 152,245 142,737 252,841 333,798 37,220 32,295 115,702 83,115 1,177,077 - 164,051 152,274 $ 2,318,382 $ 961,306	June 30, 2020 $ 164,177 20,438 117,751 156,978 28,094 178,896 774,393 164,660 $ 1,605,387

20. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

TXC Corporation of the Group adopted a pension plan under the Labor Pension Act (LPA), which is a state-managed defined contribution plan. Under the LPA, an entity makes monthly contributions to employees’ individual pension accounts at 6% of monthly salaries and wages.

The employees of the Group’s subsidiaries in mainland China are members of a state-managed retirement benefit plan operated by the government of China. The subsidiaries are required to contribute a specified percentage of payroll costs to the retirement benefit scheme to fund the benefits. The only obligation of the Group with respect to the retirement benefit plan is to make the specified contributions.

b. Defined benefit plans

Employee benefit expense for the three and the six months ended June 30, 2021 and 2020 were $438 thousand, $519 thousand, $876 thousand and $1,038 thousand, respectively. Employee benefit expense was calculated on the basis of the actuarial valuations in December 31, 2020 and 2019.

21. EQUITY

a. Share capital

Ordinary shares

Number of shares authorized (in thousands) Shares authorized Number of shares issued and fully paid (in thousands) Shares issued	June 30, 2021 December 31, 2020 500,000 500,000 $ 5,000,000 $ 5,000,000 309,757 309,757 $ 3,097,570 $ 3,097,570	June 30, 2020 500,000 $ 5,000,000 309,757 $ 3,097,570

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Fully paid ordinary shares, which have a par value of $10, carry one vote per share and carry a right to dividends.

The Company’s 30,000 thousand shares authorized were reserved for the issuance of convertible bonds and employee share options.

b. Capital surplus

May be used to offset a deficit, distributed as cash dividends, or transferred to share capital* Issuance of ordinary shares Conversion of bonds Overdue options The difference between consideration received or paid and the carrying amount of the subsidiaries’ net assets during actual disposal or acquisition Donated assets received May only be used to offset a deficit Share of changes in capital surplus of associates or joint venture Others	June 30, 2021 December 31, 2020 $ 611,776 $ 611,776 977,028 977,028 73,377 73,377 331 331 1,964 1,964 2,712 2,712 1,165 1,081 $ 1,668,353 $ 1,668,269	June 30, 2020 $ 611,776 977,028 73,377 331 1,616 3,780 - $ 1,667,908

Such capital surplus may be used to offset a deficit; in addition, when the Company has no deficit, such capital surplus may be distributed as cash dividends or transferred to share capital (limited to a certain percentage of the Company’s capital surplus and once a year).
c. Retained earnings and dividend policy

Under the dividends policy as set forth in the amended Articles, where the Company made profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as legal reserve 10% of the remaining profit, setting aside or reversing a special reserve in accordance with the laws and regulations, and then any remaining profit together with any undistributed retained earnings shall be used by the Company’s board of directors as the basis for proposing a distribution plan, which should be resolved in the shareholders’ meeting for distribution of dividends and bonuses to shareholders. For the policies on distribution of employees’ compensation and remuneration of directors and supervisors before and after amendment, refer to employee benefits expense in Note 23(g).

Dividends are recommended by the board of directors in accordance with the Corporation’s dividend policy. Under this policy, industry trends and growth should be evaluated, investment opportunities should be fully understood, and proper capital adequacy ratios should be considered in determining the dividends to be distributed. In addition, cash dividends should not be less than 20% of the total dividends to be appropriated.

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Appropriation of earnings to the legal reserve shall be made until the legal reserve equals the Company’s paid-in capital. The legal reserve may be used to offset deficits. If the Company has no deficit and the legal reserve has exceeded 25% of the Company’s paid-in capital, the excess may be transferred to capital or distributed in cash.

Items referred to under Rule No. 1010012865, Rule No. 1010047490 and Rule No. 1030006415 issued by the FSC and in the directive titled “Questions and Answers for Special Reserves Appropriated Following Adoption of IFRSs” should be appropriated to or reversed from a special reserve by the Company.

The appropriations of earnings for 2020 and 2019 were approved in the shareholders’ meetings on July 20, 2021 and June 9, 2020, respectively, were as follows:

Legal reserve Special reserve Cash dividends	Appropriation of Earnings For the Year Ended December 31 2020 2019 $ 155,246 $ 67,178 (177,611) 269,465 1,177,077 774,393	Dividends Per Share (NT$)
		For the Year Ended December 31
		2020 2019 $ - $ - - - 3.8 2.5

The Group suspends its originally scheduled shareholders’ meeting in response to the FSC’s announcement: “For pandemic prevention, the FSC demands public companies to postpone their shareholders’ meetings”. The shareholders’ meeting will be held on July 20, 2021. However, the voting result by way of electronic transmission regarding the appropriation of earnings for 2020 reached the legal resolution threshold and the Group adjusted related amount accordingly.

d. Others equity items
1) Exchange differences on translating the financial statements of foreign operations

Balance at January 1 Exchange differences on translating the financial statements of foreign operations Share from associates accounted for using the equity method Balance at June 30		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ (523,275) (82,011) (2,694) $ (607,980)	2020 $ (584,617) (166,079) 92 $ (750,604)

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2) Unrealized gain (loss) on financial assets at FVTOCI

Balance at January 1 Recognized during the period Unrealized loss - equity instruments Share from associates accounted for using the equity method Other comprehensive income recognized in the period Cumulative unrealized gain/(loss) of equity instruments transferred to retained earnings due to disposal Share from associates accounted for using the equity method Balance at June 30		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 176,513 286,779 - 286,779 - - $ 463,292	2020 $ 60,245 34,478 129 34,607 (122,086) (626) $ (27,860)

22. REVENUE

For the Three Months Ended June 30 2021 2020 $ 3,542,264 $ 2,523,956 798,862 - $ 4,341,126 $ 2,523,956 June 30, 2021 $ 3,837,221 $ 117,498 23,470 $ 140,968	For the Three Months Ended June 30 2021 2020 $ 3,542,264 $ 2,523,956 798,862 - $ 4,341,126 $ 2,523,956 June 30, 2021 $ 3,837,221 $ 117,498 23,470 $ 140,968		For the Six Months Ended June 30
2021 $ 3,542,264 798,862 $ 4,341,126	$	2021 $ 6,852,973 798,862 $ 7,651,835 December 31, 2020 $ 3,503,904 $ 729,079 12,730 $ 741,809	2020 $ 4,675,138 - $ 4,675,138 June 30, 2020 $ 2,815,870 $ 167,784 6,003 $ 173,787
	$
	$

The contract liabilities were unearned sales revenue and accounted for other current liabilities.

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23. NET PROFIT (LOSS) AND OTHER COMPREHENSIVE INCOME (LOSS) FROM CONTINUING OPERATIONS

Net Profit (Loss) from Continuing Operations

a. Interest income

For the Three Months Ended June 30 2021 2020 $ 1,828 $ 1,839 2,819 3,595 427 359 $ 5,074 $ 5,793 For the Three Months Ended June 30 2021 2020 $ 12,659 $ 10,232 18,158 8,825 $ 30,817 $ 19,057 For the Three Months Ended June 30 2021 2020 $ 1,248 $ 2,312 - 27,921 17,475 9,262 (9,022) (27,516) (297) (821) (1,072) (1,045) (2,802) (4,935) $ 5,530 $ 5,178	For the Six Months Ended June 30	For the Six Months Ended June 30
	2021 2020 $ 5,400 $ 5,612 6,616 6,255 640 998 $ 12,656 $ 12,865 For the Six Months Ended June 30
	2021 2020 $ 21,048 $ 18,036 27,727 19,956 $ 48,775 $ 37,992 For the Six Months Ended June 30
2021 $ 1,248 - 17,475 (9,022) (297) (1,072) (2,802) $ 5,530	2021 $ 1,221 - 10,369 26,395 (5,750) (2,153) (4,034) $ 26,048	2020 $ 2,299 27,921 11,306 (8,601) (3,161) (2,094) (15,123) $ 12,547

b. Other income

c. Other gains and losses

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d. Finance costs

Interest on bank loans Interest on lease liabilities	For the Three Months Ended June 30 2021 2020 $ 9,827 $ 4,112 4 10 $ 9,831 $ 4,122	For the Three Months Ended June 30 2021 2020 $ 9,827 $ 4,112 4 10 $ 9,831 $ 4,122		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 9,827 4 $ 9,831		2021 $ 14,864 9 $ 14,873	2020 $ 9,305 22 $ 9,327

The detail of capitalisation of interest:

The amount of capitalisation of interest Interest rate of capitalisation of interest e. Depreciation and amortization Property, plant and equipment Investment properties Right-of-use assets Intangible assets An analysis of deprecation by function Operating costs Operating expenses Other expenses An analysis of amortization by function Operating expenses	For the Three Months Ended June 30 2021 2020 $ - $ 4,237 6.18% 6.18% For the Three Months Ended June 30 2021 2020 $ 256,364 $ 198,593 1,072 1,045 1,334 1,319 2,500 1,781 $ 261,270 $ 202,738 $ 218,517 $ 158,813 39,181 41,099 1,072 1,045 $ 258,770 $ 200,957 $ 2,500 $ 1,781	For the Three Months Ended June 30 2021 2020 $ - $ 4,237 6.18% 6.18% For the Three Months Ended June 30 2021 2020 $ 256,364 $ 198,593 1,072 1,045 1,334 1,319 2,500 1,781 $ 261,270 $ 202,738 $ 218,517 $ 158,813 39,181 41,099 1,072 1,045 $ 258,770 $ 200,957 $ 2,500 $ 1,781		For the Six Months Ended June 30	For the Six Months Ended June 30
				2021 2020 $ 4,416 $ 8,536 6.18% 6.18% For the Six Months Ended June 30
		2021 $ 256,364 1,072 1,334 2,500 $ 261,270 $ 218,517 39,181 1,072 $ 258,770 $ 2,500		2021 $ 501,336 2,153 2,676 4,591 $ 510,756 $ 424,584 79,428 2,153 $ 506,165 $ 4,591	2020 $ 391,679 2,094 2,653 3,420 $ 399,846 $ 311,868 82,464 2,094 $ 396,426 $ 3,420

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f. Employee benefits expense

Post-employment benefits (see Note 20) Defined contribution plans Defined benefit plans Other employee benefits Payroll expense Labor and health insurance Others An analysis of employee benefits expense by function Operating costs Operating expenses		For the Three Months Ended June 30 2021 2020 $ 25,323 $ 14,306 438 519 25,761 14,825 618,600 439,535 29,030 21,408 12,834 15,152 660,464 476,095 $ 686,225 $ 490,920 $ 372,783 $ 296,943 313,442 193,977 $ 686,225 $ 490,920		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 25,323 438 25,761 618,600 29,030 12,834 660,464 $ 686,225 $ 372,783 313,442 $ 686,225		2021 $ 46,597 876 47,473 1,220,322 59,360 28,015 1,307,697 $ 1,355,170 $ 774,595 580,575 $ 1,355,170	2020 $ 31,137 1,038 32,175 866,357 45,327 30,876 942,560 $ 974,735 $ 582,111 392,624 $ 974,735

g. Employees’ compensation and remuneration of directors

The Company accrued employees’ compensation and remuneration of directors at the rates no less than 3% and no higher than 2%, respectively, of net profit before income tax, employees’ compensation, and remuneration of directors and supervisors. The employees’ compensation and remuneration of directors for the three months ended March 31, 2021 and 2020, respectively, were as follows:

Accrual rate

Employees’ compensation Remuneration of directors	For the Three Months Ended June 30 2021 2020 9.0% 9.0% 1.5% 1.5%	For the Six Months Ended June 30
		2021 2020 9.0% 9.0% 1.5% 1.5%

Amount

Employees’ compensation Remuneration to directors	For the Three Months Ended June 30 2021 2020 $ 100,786 $ 41,166 $ 16,798 $ 6,861	For the Three Months Ended June 30 2021 2020 $ 100,786 $ 41,166 $ 16,798 $ 6,861		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 100,786 $ 16,798		2021 $ 173,194 $ 28,866	2020 $ 69,299 $ 11,550

If there is a change in the amounts after the annual consolidated financial statements are authorized for issue, the differences are recorded as a change in the accounting estimate.

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The employees’ compensation and remuneration of directors for the years ended December 31, 2020 and 2019 which were approved by the Company’s board of directors on March 11, 2021 and March 23, 2020, respectively, were as follows:

Employees’ compensation Remuneration of directors	For the Year Ended December 31	For the Year Ended December 31
	2020 Cash Share $ 163,489 $ - 27,248 -	2019
		Cash Share $ 71,552 $ - 11,925 -

There was no difference between the actual amounts of employees’ compensation and remuneration of directors paid and the amounts recognized in the consolidated financial statements for the year ended December 31, 2020 and 2019.

Information on the employees’ compensation and remuneration of directors resolved by the Company’s board of directors is available at the Market Observation Post System website of the Taiwan Stock Exchange.

24. INCOME TAXES RELATING TO CONTINUING OPERATIONS

a. Income tax recognized in profit or loss

Major components of tax expense were as follows:

Current tax In respect of the current period Income tax on unappropriated earnings Adjustments for prior periods Deferred tax In respect of the current period Income tax expense recognized in profit or loss	For the Three Months Ended June 30 2021 2020 $ 168,687 $ 55,408 19,887 - (30,778) (9,886) (3,745) (2,470) $ 154,051 $ 43,052	For the Three Months Ended June 30 2021 2020 $ 168,687 $ 55,408 19,887 - (30,778) (9,886) (3,745) (2,470) $ 154,051 $ 43,052		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 168,687 19,887 (30,778) (3,745) $ 154,051		2021 $ 278,551 19,887 (30,778) 8,083 $ 275,743	2020 $ 91,289 - (9,886) 2,774 $ 84,177

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b. Income tax recognized in other comprehensive income

Deferred tax In respect of the current period: Fair value changes of financial assets at FVTOCI Arising from income and expenses reclassified from equity to profit or loss On disposal of investments in equity instruments at FVTOCI	For the Three Months Ended June 30 2021 2020 $ - $ - - - $ - $ -	For the Three Months Ended June 30 2021 2020 $ - $ - - - $ - $ -		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ - - $ -		2021 $ - - $ -	2020 $ 8,619 (30,521) $ (21,902)

c. Income tax assessments

The income tax returns through 2017 have been assessed by the tax authorities.

25. EARNINGS PER SHARE

The earnings and weighted average number of ordinary shares outstanding used in the computation of earnings per share from continuing operations were as follows:

Net Profit for the Period

For the Three Months Ended June 30 For the Six Months Ended June 30 2021 2020 2021 2020 Earnings used in the computation of diluted earnings per share $ 920,306 $ 369,118 $ 1,552,156 $ 625,976 Weighted average number of ordinary shares outstanding (in thousand shares): For the Three Months Ended June 30 For the Six Months Ended June 30 2021 2020 2021 2020 Weighted average number of ordinary shares in the computation of basic earnings per share 309,757 309,757 309,757 309,757 Effect of potentially dilutive ordinary shares: Employees’ compensation or bonuses issued to employees 668 450 2,034 1,928 Weighted average number of ordinary shares used in the computation of diluted earnings per share 310,425 310,207 311,791 311,685		For the Six Months Ended June 30	For the Six Months Ended June 30	For the Six Months Ended June 30
			2021 309,757 2,034 311,791	2020 309,757 1,928 311,685

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The Group may settle the compensation of employees in cash or shares; therefore, the Group assumes that the entire amount of the compensation will be settled in shares, and the resulting potential shares are included in the weighted average number of shares outstanding used in the computation of diluted earnings per share, as the effect is dilutive. Such dilutive effect of the potential shares is included in the computation of diluted earnings per share until the number of shares to be distributed to employees is resolved in the following year.

26. NON-CASH TRANSACTIONS

The Group entered into the following non-cash investing activities which were not reflected in the consolidated statements of cash flows for the six months ended June 30, 2021 and 2020:

a. The Company declared cash dividends for 2020 and 2019 in July 2021 and June 2020 for $1,177,077 thousand and $774,393 thousand, respectively (refer to Note 21). As of June 30, 2021 and 2020, cash dividends are not yet distributed, and accounted for other payables.
b. The Group transferred inventories to investment properties for lease agreements. The inventories decreased and investment properties increased by 245,157 thousand dollars for the six months ended June 30, 2021.

27. CAPITAL MANAGEMENT

The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximizing the return to stakeholders through the optimization of the debt and equity balance.

The capital structure of the Group consists of net debt (borrowings offset by cash and cash equivalents) and equity attributable to owners of the Company (comprising issued capital, reserves, retained earnings and other equity).

The Group is not subject to any externally imposed capital requirements.

28. FINANCIAL INSTRUMENTS

a. Fair value of financial instruments not measured at fair value

The management believes the carrying amounts of financial assets and financial liabilities recognized in the consolidated financial statements approximate their fair values.

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b. Fair value of financial instruments measured at fair value on a recurring basis
1) Fair value hierarchy

June 30, 2021 Financial assets at FVTPL Foreign exchange forward contracts and exchange contracts Beneficiary certificate Structured deposits Financial assets at FVTOCI Investments in equity instruments Domestic emerging shares Domestic unlisted shares Foreign unlisted shares Financial liabilities at FVTPL Foreign exchange forward contracts and exchange contracts December 31, 2020 Financial assets at FVTPL Foreign unlisted shares Foreign exchange forward contracts and exchange contracts Beneficiary certificate Structured deposits	Level 1 $ - 191,334 - $ 191,334 $ 400,224 - - $ 400,224 $ - Level 1 $ - - 259,333 - $ 259,333	Level 2 $ 474 - 405,623 $ 406,097 $ - - - $ - $ 844 Level 2 $ - 10,459 - 264,697 $ 275,156	Level 3 $ - - - $ - $ - 105,649 307,606 $ 413,255 $ - Level 3 $ 9,255 - - - $ 9,255	Total $ 474 191,334 405,623 $ 597,431 $ 400,224 105,649 307,606 $ 813,479 $ 844 Total $ 9,255 10,459 259,333 264,697 $ 543,744 (Continued)

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Financial assets at FVTOCI Investments in equity instruments Domestic unlisted shares Foreign unlisted shares Financial liabilities at FVTPL Foreign exchange forward contracts and exchange contracts June 30, 2020 Financial assets at FVTPL Foreign unlisted shares Foreign exchange forward contracts Beneficiary certificate Structured deposits Financial assets at FVTOCI Investments in equity instruments Domestic unlisted shares Foreign unlisted shares Financial liabilities at FVTPL Foreign exchange forward contracts and exchange contracts	Level 1 $ - - $ - $ - Level 1 $ - - 416,785 - $ 416,785 $ - - $ - $ -	Level 2 $ - - $ - $ 1,455 Level 2 $ - 309 - 207,241 $ 207,550 $ - - $ - $ 871	Level 3 $ 213,736 311,568 $ 525,304 $ - Level 3 $ 9,255 - - - $ 9,255 $ 68,363 234,739 $ 303,102 $ -	Total $ 213,736 311,568 $ 525,304 $ 1,455 (Concluded) Total $ 9,255 309 416,785 207,241 $ 633,590 $ 68,363 234,739 $ 303,102 $ 871

There were no transfers between Levels 1 and 2 between January 1 to June 30, 2021 and 2020.

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2) Reconciliation of Level 3 fair value measurements of financial instruments

June 30, 2021

Financial Assets Balance at January 1, 2021 Purchases Sales Transfer to Level 1 Effect of foreign currency exchange differences Balance at June 30, 2021	Financial Assets at FVTPL Equity Instruments $ 9,255 - (9,255) - - $ -	Financial Assets at FVTOCI
		Equity Instruments $ 525,304 5,359 - (113,445) (3,963) $ 413,255

Since the UPI Semiconductor Corp.’s shares were listed on the Taipei Exchange on March 12, 2021, the fair value hierarchy was transferred from Level 3 to Level 1 when observable market data became available for such equity investment.

June 30, 2020

Financial Assets Balance at January 1, 2020 Effect of foreign currency exchange differences Balance at June 30, 2020	Financial Assets at FVTPL Equity Instruments $ 9,255 - $ 9,255	Financial Assets at FVTOCI
		Equity Instruments $ 305,308 (2,206) $ 303,102

3) Valuation techniques and inputs applied for Level 2 fair value measurement

Financial Instruments
Derivatives - foreign exchange
forward contracts and
exchange contracts

Structured deposits

Valuation Techniques and Inputs

Discounted cash flow
Future cash flows are estimated based on observable forward
exchange rates at the end of the reporting period and contract
forward rates, discounted at a rate that reflects the credit risk
of various counterparties.
Discounted cash flow.
Future cash flows are discounted at a rate that reflects current
borrowing interest rates of the bond issuers at the end of the
reporting period

39 -
4) Valuation techniques and inputs applied for the purpose of measuring Level 3 fair value measurement

The Group uses price-book ratio approach, comparing the net value per share with other public companies among similar industries or evaluating share price based on average price-book ratio of other competitors, to capture the present value of the expected future economic benefits to be derived from the ownership of these investees.

The fair values of unlisted equity securities - ROC were determined using the income approach. In this approach, the discounted cash flow method was used to capture the present value of the expected future economic benefits to be derived from the ownership of these investees. The significant unobservable inputs used are listed in the table below. An increase in long-term revenue growth rates or long-term pre-tax operating margin or a decrease in the WACC or discount for lack of marketability used in isolation would result in an increase in the fair value.

c. Categories of financial instruments

		June 30,	December 31,	December 31,		June 30,
		2021		2020		2020
Financial assets
FVTPL
Mandatorily at FVTPL (1)	$	597,431	$	543,744	$	633,590
Financial assets at amortized cost (2)		7,129,804		6,709,185		5,407,499
Financial assets at FVTOCI
Equity instruments		813,479		525,304		303,102
Financial liabilities
FVTPL
Mandatorily at FVTPL (3)		844		1,455		871
Amortized cost (4)		7,422,130		5,937,115		5,674,197

1) The balances included the carrying amount of beneficiary certificate, foreign exchange forward contracts and exchange contracts, structured deposits and investment with preference shares.
2) The balances included financial assets measured at amortized cost, which comprise cash and cash equivalents, notes receivable, trade receivables, other receivables and refundable deposits.
3) The balances included the carrying amount of foreign exchange forward contract.
4) The balances included financial liabilities measured at amortized cost, which comprise short-term and long-term loans, notes payable, trade payables, other payables and guarantee deposits received.
d. Financial risk management objectives and policies

The Group’s major financial instruments include equity and debt investments, trade receivables, trade payables and borrowings. The Group’s corporate treasury function provides services to the business, coordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Group through internal risk reports which analyze exposures by degree and magnitude of risks. These risks include market risk (including foreign currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

40 -

The Group sought to minimize the effects of these risks by using derivative financial instruments to hedge risk exposures. The use of financial derivatives is governed by the Group’s policies approved by the board of directors, which provided written principles on foreign currency risk, interest rate risk, credit risk, the use of financial derivatives and non-derivative financial instruments, and the investment of excess liquidity. Compliance with policies and exposure limits is reviewed by the internal auditors on a continuous basis. The Group did not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

The corporate treasury function reports quarterly to the Group’s risk management committee, an independent body that monitors risks and policies implemented to mitigate risk exposures.

1) Market risk

The Group’s activities exposed it primarily to the financial risks of changes in foreign currency exchange rates (see (a) below) and interest rates (see (b) below). The Group entered into a variety of derivative financial instruments to manage its exposure to foreign currency risk and interest rate risk, including: Foreign exchange forward contracts to hedge the exchange rate risk arising on the Group’s foreign currency monetary.

There has been no change to the Group’s exposure to market risks or the manner in which these risks were managed and measured.

a) Foreign currency risk

Several subsidiaries of the Company have foreign currency sales and purchases, which exposes the Group to foreign currency risk.

The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities (including those eliminated on consolidation) at the end of the reporting period (see Note 33).

Sensitivity analysis

The Group is mainly exposed to the USD and JPY.

The following table details the Group’s sensitivity to a 1% increase and decrease in the New Taiwan dollar (the functional currency) against the relevant foreign currencies. The sensitivity rate used when reporting foreign currency risk internally to key management personnel and representing management’s assessment of the reasonably possible change in foreign exchange rates is 1%. The sensitivity analysis included only outstanding foreign currency denominated monetary items and foreign exchange forward contracts designated as cash flow hedges, and adjusts their translation at the end of the reporting period for a 1% change in foreign currency rates. The sensitivity analysis included external loans/borrowings as well as loans/borrowings to foreign operations within the Group where the denomination of the loan is in a currency other than the functional currency of the lender or the borrower. A positive number below indicates an increase in post-tax profit and other equity associated with the New Taiwan dollar strengthening 1% against the relevant currency. For a 1% weakening of the New Taiwan dollar against the relevant currency, there would be an equal and opposite impact on post-tax profit and other equity and the balances below would be negative.

Profit or loss	USD Impact For the Six Months Ended June 30 2021 2020 $ 26,350 $ 32,029	JPY Impact
		For the Six Months Ended June 30
		2021 2020 $ (3,706) $ (5,284)

41 -
i. This was mainly attributable to the exposure on outstanding receivables and payables in USD which were not hedged at the end of the reporting period.
ii. This was mainly attributable to the exposure on outstanding payables in JPY which were not hedged at the end of the reporting period.

b) Interest rate risk

The Group is exposed to interest rate risk because entities in the Group deposit and borrow funds at floating interest rates.

The carrying amounts of the Group’s financial assets and financial liabilities with exposure to interest rates at the end of the reporting period were as follows:

		June 30,	December 31,	December 31,		June 30,
		2021		2020		2020
Fair value interest rate risk
Financial assets	$	633,802	$	687,252	$	600,004
Financial liabilities		2,134,921		519,996		-
Cash flow interest rate risk
Financial assets		2,553,499		2,443,257		1,854,192
Financial liabilities		697,044		2,467,065		2,266,253

Sensitivity analysis

The sensitivity analysis below was determined based on the Group’s exposure to interest rates for both derivative and non-derivative instruments at the end of the reporting period. For floating rate liabilities, the analysis was prepared assuming the amount of each liability outstanding at the end of the reporting period was outstanding for the whole year. A 25 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

If interest rates had been 25 basis points higher/lower and all other variables were held constant, the Group’s pre-tax profit for the six months ended June 30, 2021 and 2020 would increase/(decrease) by $2,321 thousand and $(515) thousand, respectively, which was mainly attributable to the Group’s exposure to interest rates on its floating rate bank deposits and bank borrowings.

2) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Group. As at the end of the reporting period, the Group’s maximum exposure to credit risk, which would cause a financial loss to the Group due to the failure of the counterparty to discharge its obligation and due to the financial guarantees provided by the Group, could be equal to the total of the following:

a) The carrying amount of the respective recognized financial assets as stated in the balance sheets; and
b) The maximum amount the entity would have to pay if the financial guarantee is called upon, irrespective of the likelihood of the guarantee being exercised.
42 -

3) Liquidity risk

The Group manages liquidity risk by monitoring and maintaining a level of cash and cash equivalents deemed adequate to finance the Group’s operations and mitigate the effects of fluctuations in cash flows. In addition, management monitors the utilization of bank borrowings and ensures compliance with loan covenants.

The Group relies on bank borrowings as a significant source of liability. As of June 30, 2021, December 31, 2020 and June 30, 2020, the Group had available unutilized short-term bank loan facilities of $5,796,964 thousand, $6,712,627 thousand and $5,329,656 thousand, respectively.

Liquidity and interest rate risk tables for non-derivative financial liabilities

The following table details the Group’s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The table has been drawn up based on the undiscounted cash flows of financial liabilities from the earliest date on which the Group can be required to pay. The table included both interest and principal cash flows. Specifically, bank loans with a repayment on demand clause were included in the earliest time band regardless of the probability of the banks choosing to exercise their rights. The maturity dates for other non-derivative financial liabilities were based on the agreed repayment dates.

To the extent that interest flows are floating rate, the undiscounted amount was derived from the interest rate curve at the end of the reporting period.

June 30, 2021

	Weighted
	Average
	Effective
	Interest Rate	Less than
	(%)	1 Year	2-3 Years	4-5 Years	5+ Years		Total
Non-derivative financial
liabilities
Trade payables	-	$ 2,200,540 $	- $	- $		-	$ 2,200,540
Other payables	-	2,321,141	-	-		-	2,321,141
Other current liabilities	-	201,105	-	-		-	201,105
Lease liabilities	0.86	448	909	38		-	1,395
Variable interest rate
liabilities	0.10-3.44	181,827	372,174	143,043		-	697,044
Fixed interest rate
liabilities	0.30-6.18	1,234,921	720,000	180,000		-	2,134,921
December 31, 2020
	Weighted
	Average
	Effective
	Interest Rate	Less than
	(%)	1 Year	2-3 Years	4-5 Years	5+ Years		Total
Non-derivative financial
liabilities
Trade payables	-	$ 1,951,141 $	- $	- $		-	$ 1,951,141
Other payables	-	962,786	-	-		-	962,786
Other current liabilities	-	757,540	-	-		-	757,540
Lease liabilities	0.86	1,777	905	267		-	2,949
Variable interest rate
liabilities	0.65-0.68	519,996	-	-		-	519,996
Fixed interest rate
liabilities	0.35-6.18	718,541	1,064,524	621,000		-	2,467,065

43 -

June 30, 2020

	Weighted
	Average
	Effective
	Interest Rate	Less than
	(%)	1 Year	2-3 Years	4-5 Years	5+ Years		Total
Non-derivative financial
liabilities
Trade payables	-	$ 1,765,219 $	- $	- $		-	$ 1,765,219
Other payables	-	1,608,170	-	-		-	1,608,170
Other current liabilities	-	193,703	-	-		-	193,703
Lease liabilities	0.86	3,101	901	494		-	4,496
Variable interest rate
liabilities	0.10-6.18	653,706	1,612,547	-		-	2,266,253

The amounts included above for variable interest rate instruments for both non-derivative financial assets and liabilities was subject to change if changes in variable interest rates differ from those estimates of interest rates determined at the end of the reporting period.

Liquidity and interest rate risk tables for derivative financial liabilities

The following table details the Group’s liquidity analysis of its derivative financial instruments. The table is based on the undiscounted contractual net cash inflows and outflows on derivative instruments that settle on a net basis, and the undiscounted gross inflows and outflows on those derivatives that require gross settlement.

June 30, 2021

On Demand or Less than 1 Month 1-3 Months 3 Months to 1 Year Net settled Foreign exchange forward contracts and exchange contracts $ 1,819 $ (1,851) $ (338) December 31, 2020 On Demand or Less than 1 Month 1-3 Months 3 Months to 1 Year Net settled Foreign exchange forward contracts and exchange contracts $ 2,460 $ 5,019 $ 1,525 June 30, 2020 On Demand or Less than 1 Month 1-3 Months 3 Months to 1 Year Net settled Foreign exchange forward contracts and exchange contracts $ 501 $ (1,063) $ -	1-5 Years $ - 1-5 Years $ - 1-5 Years $ -	5+ Years $ -
		5+ Years $ -
		5+ Years $ -

44 -

29. TRANSACTIONS WITH RELATED PARTY

Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this note. Details of transactions between the Group and other related parties are disclosed below.

a. Related party name and category

Related Party Name Tai-shing Electronics Components Corp. TSE Technology (Ningbo) Co., Ltd. Godsmith Sensor Inc. EcLife Co., Ltd. Ningbo Longying Semiconductor Co., Ltd.	Related Party Category
	Associates Associates Associates Other associates Other associates

b. Sales of goods

Related Party Line Items Categories Sales Associates Other associates	For the Three Months Ended June 30 2021 2020 $ 33,555 $ 12,659 2,484 1,949 $ 36,039 $ 14,608	For the Three Months Ended June 30 2021 2020 $ 33,555 $ 12,659 2,484 1,949 $ 36,039 $ 14,608	For the Six Months Ended June 30	For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 33,555 2,484 $ 36,039		2021 $ 60,650 5,848 $ 66,498	2020 $ 17,698 4,126 $ 21,824

Selling prices and payment terms offered to related parties were similar with those offered to third parties.

c. Purchases of goods

Related Party Categories Others associates	For the Three Months Ended June 30 2021 2020 $ 3,446 $ 193	For the Three Months Ended June 30 2021 2020 $ 3,446 $ 193		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 3,446		2021 $ 7,776	2020 $ 237

Purchase prices and payment terms offered by related parties were similar with those offered by third parties.

d. Receivables from related parties (excluding loans to related parties)

Line Items Related Party Categories Trade receivables Associates Other associates Less: Allowance for impairment loss Other receivables Associates Other associates	June 30, 2021 December 31, 2020 $ 37,310 $ 28,006 3,264 2,223 (69) (67) $ 40,505 $ 30,162 $ 768 $ 490 - - $ 768 $ 490	June 30, 2020 $ 13,244 2,279 (69) $ 15,454 $ - 677 $ 677

45 -

The outstanding trade receivables from related parties are unsecured.

e. Payables to related parties (excluding loans from related parties)

Line Items Related Party Categories Trade payables Other associates Other payables Associates Other associates	June 30, 2021 December 31, 2020 $ 2,328 $ 3,543 $ - $ - 2,759 1,480 $ 2,759 $ 1,480	June 30, 2020 $ 230 $ 1,089 1,694 $ 2,783

The outstanding trade payables from related parties are unsecured.

Payment term of the transactions to related parties were similar to those for third parties.

f. Acquisitions of property, plant and equipment

Related Party Categories Others associates g. Rental revenue	For the Three Months Ended June 30 2021 2020 $ 1,879 $ 753	For the Three Months Ended June 30 2021 2020 $ 1,879 $ 753		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 1,879		2021 $ 2,697	2020 $ 1,411

Related Party Location Rent Collection Ningbo Xingmao Electron Technology Co., Ltd. Building P5, 1F., No. 189, Huangshan W. Rd., Beilun Dist., Ningbo City Based on contract, and paid on a monthly basis Ningbo Longying Semiconductor Co., Ltd. Building D4, No. 189, Huangshan W. Rd., Beilun Dist., Ningbo City Based on contract, and paid on a monthly basis Tai-Shing Electronics Components Corporation 6F., No. 4, Gongye 6th Rd., Pingzhen Dist., Taoyuan City 324, Taiwan Based on contract, and paid on a monthly basis Godsmith Sensor Inc. 3F., No. 6, Gongye 6th Rd., Pingzhen Dist., Taoyuan City 324, Taiwan Based on contract, and paid on a monthly basis		For the Three Mon	ths	Ended June 30 2020 Amount % to Total Account Balance $ 758 - 64 - 894 - 147 - $ 1,863 -		For the Six Mont	hs	Ended June 30
		2021 Amount % to Total Account Balance $ 740 - 31 - 893 - - - $ 1,664 -				2021 Amount % to Total Account Balance $ 1,491 - 62 - 1,789 - - - $ 3,342 -		2020
								Amount % to Total Account Balance $ 1,534 - 64 - 1,785 291 - $ 3,674 -

There is no significant difference in transaction terms between related parties and unrelated parties.

46 -

h. Compensation of key management personnel

The remuneration of directors and key executives for the three and the six months ended June 30, 2021 and 2020 were as follows:

Short-term employee benefits Post-employment benefits	For the Three Months Ended June 30 2021 2020 $ 45,010 $ 33,709 878 805 $ 45,888 $ 34,514	For the Three Months Ended June 30 2021 2020 $ 45,010 $ 33,709 878 805 $ 45,888 $ 34,514		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 45,010 878 $ 45,888		2021 $ 94,909 1,894 $ 96,803	2020 $ 60,104 1,772 $ 61,876

The remuneration of directors and key executives was determined by the remuneration committee based on the performance of individuals and market trends.

30. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

The following assets were provided as collateral for bank borrowings, the tariff of imported raw materials guarantees or the deposit for hiring foreign workers:

Land and land improvement Building and equipment, net Investment property Land for development Pledged deposits Right-of-use assets	June 30, 2021 December 31, 2020 $ - $ 570,178 280,808 855,007 234,942 38,120 358,100 1,181,555 61,007 59,504 11,026 11,351 $ 945,883 $ 2,715,715	June 30, 2020 $ 568,417 891,955 42,205 932,693 76,071 11,062 $ 2,522,403

31. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

In addition to those disclosed in other notes, significant commitments and contingencies of the Group were as follows:

a. Unused letters of credit amounted to approximately EUR1,188 thousand and JPY471,236 thousand as of June 30, 2021.
b. As of June 30, 2021, the Group unrecognized commitments were as follows:

Acquisition of machinery and equipment Acquisition of machinery and equipment Acquisition of machinery and equipment Acquisition of machinery and equipment Acquisition of machinery and equipment	Contract Amount $ 474,309 RMB 91,101 JPY 1,346,724 USD 2,420 EUR 1,697	Paid Amount Unpaid Amount $ 202,958 $ 271,351 RMB 34,046 RMB 57,055 JPY 746,458 JPY 600,266 USD 795 USD 1,625 EUR 509 EUR 1,188

47 -

32. SIGNIFICANT EVENTS AFTER REPORTING PERIOD

On May 10, 2021, the Board of Directors approved to the fifth domestic three-year unsecured convertible bonds. The denomination of the bond was $100 thousand and the total value was 1,200,000 thousands with 0% interest rate. The issued date was on July 26, 2021 and the maturity date is on July 26, 2024.

33. OTHER ITEMS

Due to the impact of the COVID-19 pandemic which has evolved globally and currently in Taiwan, some of the Group’s operating locations have enforced crowd controls. After evaluation, it didn’t have significant influences for the Group’s operation.

Based on the information available as of the balance sheet date, the Group considered the economic implications of the epidemic when making its critical accounting estimates.

34. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The Group’s group entities’ significant financial assets and liabilities denominated in foreign currencies aggregated by the foreign currencies other than functional currencies and the related exchange rates between foreign currencies and respective functional currencies were as follows:

June 30, 2021

		Foreign		Carrying
	Currencies		Exchange Rate	Amount
Financial assets
Monetary items
USD	$	129,835	27.87 (USD:NTD)	$ 3,618,501
USD		5,111	6.4601 (USD:RMB)	142,444
JPY		1,441,825	0.2521 (JPY:NTD)	363,484
JPY		290,880	0.0584 (JPY:RMB)	73,331
Financial liabilities
Monetary items
USD		35,487	27.87 (USD:NTD)	989,023
USD		4,912	6.4601 (USD:RMB)	136,897
JPY		1,868,508	0.2521 (JPY:NTD)	471,051
JPY		1,334,243	0.0584 (JPY:RMB)	336,363

48 -

December 31, 2020

		Foreign		Carrying
	Currencies		Exchange Rate	Amount
Financial assets
Monetary items
USD	$	117,525	28.5080 (USD:NTD)	$ 3,350,403
USD		34,107	6.5249 (USD:RMB)	972,322
JPY		91,491	0.2765 (JPY:NTD)	25,297
JPY		444,265	0.0633 (JPY:RMB)	122,839
Financial liabilities
Monetary items
USD		36,683	28.5080 (USD:NTD)	1,045,759
USD		10,465	6.5249 (USD:RMB)	298,336
JPY		1,269,487	0.2765 (JPY:NTD)	351,013
JPY		1,236,936	0.0633 (JPY:RMB)	342,013
June 30, 2020
		Foreign		Carrying
	Currencies		Exchange Rate	Amount
Financial assets
Monetary items
USD	$	84,537	29.66 (USD:NTD)	$ 2,507,367
USD		65,679	7.0794 (USD:RMB)	1,948,039
JPY		366,133	0.2753 (JPY:NTD)	100,796
JPY		67,944	0.0622 (JPY:RMB)	18,705
Financial liabilities
Monetary items
USD		31,654	29.66 (USD:NTD)	938,858
USD		10,576	7.0794 (USD:RMB)	313,684
JPY		1,342,641	0.2753 (JPY:NTD)	369,629
JPY		1,010,698	0.0622 (JPY:RMB)	278,245

For the three and the six months ended June 30, 2021 and 2020, realized and unrealized net foreign exchange gains (losses) were $(9,022) thousand, $(27,516) thousand, $26,395 thousand and $(8,601) thousand, respectively. It is impractical to disclose net foreign exchange gains (losses) by each significant foreign currency due to the variety of the foreign currency transactions and functional currencies of the group entities.

35. SEPARATELY DISCLOSED ITEMS

a. Information about significant transactions and investees:
1) Financing provided to others. (None)
2) Endorsements/guarantees provided. (Table 1)
49 -
3) Marketable securities held (excluding investments in subsidiaries, associates and joint ventures). (Table 2)
4) Marketable securities acquired and disposed of at costs or prices of at least NT$300 million or 20% of the paid-in capital. (Table 3)
5) Acquisition of individual real estate at costs of at least NT$300 million or 20% of the paid-in capital. (None)
6) Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital. (None)
7) Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital. (Table 4)
8) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital. (Table 5)
9) Trading in derivative instruments. (Note 7)
10) Others: Intercompany relationships and significant intercompany transactions. (Table 9)
b. Information on investees. (Table 6)
c. Information on investments in mainland China
1) Information on any investee company in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, net income of investees, investment income or loss, carrying amount of the investment at the end of the period, repatriations of investment income, and limit on the amount of investment in the mainland China area. (Table 7)
2) Any of the following significant transactions with investee companies in mainland China, either directly or indirectly through a third party, and their prices, payment terms, and unrealized gains or losses: (Table 8)
- a) The amount and percentage of purchases and the balance and percentage of the related payables at the end of the period.
- b) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the period.
- c) The amount of property transactions and the amount of the resultant gains or losses.
- d) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the period and the purposes.
- e) The highest balance, the end of period balance, the interest rate range, and total current period interest with respect to financing of funds.
- f) Other transactions that have a material effect on the profit or loss for the period or on the financial position, such as the rendering or receipt of services.
d. Information of major shareholders：List all shareholders with ownership of 5% or greater showing the name of the shareholder, the number of shares owned, and percentage of ownership of each shareholder (None)
50 -

36. SEGMENT INFORMATION

Information reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance focuses on the types of goods or services delivered or provided. Specifically, the Group’s reportable segments under IFRS 8 “Operating Segments” were as follows:

Crystal segment

The crystal (direct sales) segment includes a number of direct sales operations in various cities within Taiwan and China each of which is considered separate operating segment by the chief operating decision maker (CODM). For financial statements presentation purposes, these individual operating segments have been aggregated into a single operating segment taking into account the following factors:

a. These operating segments have similar long-term gross profit margins;
b. The nature of the products and production processes are similar;
c. The methods used to distribute the products to the customers are the same.
Real estate development segment

The development and sales of real estate, along with mall space leasing in Chongqing is considered a separate operating segment by the chief operating decision maker (CODM).

Segment Revenue and Results

Crystal segment Real estate development segment Continuing operations Interest income Other income Other gains and losses Finance costs Share of profit of associates accounted for using the equity method Profit before tax (continuing operations)		Segment Revenue For the Six Months Ended June 30 2021 2020 $ 6,852,973 $ 4,675,138 798,862 - $ 7,651,835 $ 4,675,138		Segment Profit	Segment Profit
				For the Six Months Ended June 30
		2021 $ 6,852,973 798,862 $ 7,651,835		2021 $ 1,526,892 223,939 1,750,831 12,656 48,775 26,048 (14,873) 4,462 $ 1,827,899	2020 $ 632,690 - 632,690 12,865 37,992 12,547 (9,327) 23,386 $ 710,153

Segment revenue reported above represents revenue generated from external customers.

Segment profit represented the profit before tax earned by each segment without allocation of central administration costs and directors’ salaries, share of profit of associates, gains recognized on the disposal of interests in former associates, rental revenue, interest income, gain or loss on disposal of property, plant and equipment, gains or losses on disposal of financial instruments, exchange gains or losses, valuation gain or loss on financial instruments, finance costs and income tax expense. This was the measure reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance.

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TABLE 1

TXC CORPORATION AND SUBSIDIARIES

ENDORSEMENTS/GUARANTEES PROVIDED JUNE 30, 2021

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

No. (Note)	Endorser/Guarantor	Endorsee/Guarantee	Endorsee/Guarantee	Limit on Endorsement/ Guarantee Given on Behalf of Each Party (Note 3)	Maximum Amount Endorsed/ Guaranteed During the Period	Outstanding Endorsement/ Guarantee at the End of the Period	Actual Borrowing Amount	Amount Endorsed/ Guaranteed by Collateral	Ratio of Accumulated Endorsement/ Guarantee to Net Equity in Latest Financial Statements (%)	Aggregate Endorsement/ Guarantee Limit	Note
		Name	Relationship (Note 2)
1	TXC (Ningbo) Corporation	Chongqing Zhongyang Properties Co., Ltd.	Subsidiary with equity method	$ 2,996,093	$ 474,562	$ 474,562	$ 225,362	$ -	7.92	$ 5,992,186

Note: The total amount of TXC (Ningbo) Corporation endorsements and guarantees provided shall not exceed 100% of the amount of the net value of TXC (Ningbo) Corporation; the amount of individual entity endorsements shall not exceed 5% of the amount of the net value of the individual entity. However, the amount of individual entity endorsements is permitted with 50% of net value of subsidiary.

52 -

TABLE 2

TXC CORPORATION AND SUBSIDIARIES

MARKETABLE SECURITIES HELD JUNE 30, 2021

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Holding Company Name	Type and Name of Marketable Securities	Relationship with the Holding Company	Financial Statement Account			June 30, 2021	June 30, 2021			Note
				Shares		Carrying Amount	Percentage of Ownership		Fair Value
TXC Corporation TXC (Ningbo) Corporation TXC (Chongqing) Limited Ningbo Beilun Jingyu Trading Corporation Ningbo Meishan Free Trade Port Area Ding Kai Investment Management Company Limited TXC Technologies Inc.	Stock-unlisted company Godsmith Sensor Inc Clear Signal Technology Corporation Win Precision Technology Co., Ltd. Stock-emerging market shares UPI Semiconductor Corp. Beneficiary certificate CICC Wealth Management 800 Fund Huifeng Zhicheng No. 6 ABS Funds Shares overseas-unlisted company Ningbo SJ Electronics Co., Ltd. Structured deposits China Construction Bank Corporation Beneficiary certificate Southern Cash Fund Shares overseas-unlisted company Zhejiang Bright Semiconductor Technology Co., Ltd. Shares overseas-unlisted company Investment QST LLC	None ″ ″ ″ TXC Corporation is a direct of the Company None ″ None None None None None	Non-current assets held for sale Financial assets at fair value through other comprehensive income - non-current ″ ″ ″ Financial assets at fair value through profit or loss - current ″ Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through other comprehensive income - non current Financial assets at fair value through other comprehensive income - non current	900 550 536 1,365 1,516 RMB 24,287 RMB 20,000 RMB 6,000 RMB 28,536 RMB 63 RMB 7,000 US$ 250		$ 17,946 10,967 5,359 89,323 400,224 $ 523,819 $ 104,778 86,283 $ 191,061 $ 69,743 $ 123,110 $ 273 $ 233,128 $ 4,735	12 7 12 3 2 - - 7 - - 6 -		$ 17,946 10,967 5,359 89,323 400,224 $ 523,819 $ 104,778 86,283 $ 191,061 $ 69,743 $ 123,110 $ 273 $ 233,128 $ 4,735

(Continued)

53 -

Holding Company Name	Type and Name of Marketable Securities	Relationship with the Holding Company	Financial Statement Account			June 30, 2021	June 30, 2021			Note
				Shares		Carrying Amount	Percentage of Ownership		Fair Value
Chongqing Zhongyang Properties Co., Ltd. ChongQing Dingsen Commercial Management Co., Ltd.	Structured deposits Chongqing Rural Commercial Bank China Construction Bank Corporation Agricultural Bank of China Structured deposits China Construction Bank Corporation	None ″ ″ None	Financial assets at fair value through profit or loss - current ″ ″ Financial assets at fair value through profit or loss - current	RMB 40,481 RMB 13,224 RMB 10,058 RMB 1,722		$ 174,643 57,051 43,392 $ 275,086 $ 7,427	- - - -		$ 174,643 57,051 43,392 $ 275,086 $ 7,427

(Concluded)

54 -

TABLE 3

TXC CORPORATION AND SUBSIDIARIES

MARKETABLE SECURITIES ACQUIRED AND DISPOSED OF AT COSTS OR PRICES OF AT LEAST NT$300 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE SIX MONTHS ENDED JUNE 30, 2021

(In Thousands of New Taiwan Dollars)

Company Name	Marketable Securities Type and Name	Financial Statement Account	Counterparty	Relationship	Beginning Balance	Beginning Balance	Acquisition	Acquisition		Disposal	Disposal		Equity in Net Gain (Loss)	Ending	Balance
					Shares	Amount	Shares	Amount	Shares	Amount	Carrying Amount	Gain (Loss) on Disposal		Shares	Amount
TXC (Chongqing) Limited	QianYuan - Hengying (daily) open net wealth management product	Financial instruments at FVTPL - current	China Construction Bank	None	-	$ -	-	$ 714,853	-	$ (591,524)	$ (590,836)	$ 688	$ (907)	-	$ 123,110

55 -

TABLE 4

TXC CORPORATION AND SUBSIDIARIES

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES AMOUNTING TO AT LEAST $100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE SIX MONTHS ENDED JUNE 30, 2021

(In Thousands of New Taiwan Dollars)

Buyer	Related Party	Relationship		Transaction Details	Transaction Details	Transaction Details	Abnormal Transaction	Abnormal Transaction	Notes/Accounts Receivable (Payable)	Notes/Accounts Receivable (Payable)	Note
			Purchase/ Sale	Amount	% to Total	Payment Terms	Unit Price	Payment Terms	Ending Balance	% to Total
TXC Corporation TXC (Ningbo) Corporation	TXC (Ningbo) Corporation TXC (Ningbo) Corporation TXC (Chongqing) Limited TXC (Chongqing) Limited	Subsidiary ″ ″ ″	Purchase Sale Purchase Purchase	$ 1,533,431 182,655 713,476 148,084	39 3 18 11	Payment term of the transactions to related parties were similar to those for third parties ″ ″ ″	Its trading price depends on its function within the Group ″ ″ ″	Payment term of the transactions to related parties were similar to those for third parties ″ ″ ″	$ (838,867) 107,518 (375,338) (87,253)	(43) 3 (19) (10)

56 -

TABLE 5

TXC CORPORATION AND SUBSIDIARIES

RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL JUNE 30, 2021

(In Thousands of New Taiwan Dollars)

Company Name	Related Party	Relationship	Ending Balance	Turnover Rate		Overdue	Amount Received in Subsequent Period	Allowance for Impairment Loss
					Amount	Action Taken
TXC Corporation TXC (Ningbo) Corporation TXC (Chongqing) Corporation TXC (Ningbo) Corporation	TXC (Ningbo) Corporation TXC Corporation TXC Corporation TETC CORP. NINGBO	Subsidiary Parent entity Parent entity Subsidiary	$ 107,518 838,867 375,338 152,691	4.94 4.19 3.89 Note	$ - - - -	- - - -	$ 23,487 204,933 124,312 -	$ - - - -

Note: The ending balance is primarily consisted of other receivables, which is not applicable for the calculation of turnover rate.

57 -

TABLE 6

TXC CORPORATION AND SUBSIDIARIES

NAMES, LOCATIONS, AND RELATED INFORMATION OF INVESTEES ON WHICH THE COMPANY EXERCISES SIGNIFICANT INFLUENCE FOR THE SIX MONTHS ENDED JUNE 30, 2021

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount	Original Investment Amount	As of June 30, 2021	As of June 30, 2021	As of June 30, 2021	Net Income (Losses) of the Investee	Share of Profits (Loss)	Note
				June 30, 2021	December 31, 2020	Shares (In Thousands)	Percentage of Ownership	Carrying Value
TXC Corporation	Taiwan Crystal Technology International Ltd. Taiwan Crystal Technology International (HK) Limited TXC Japan Corporation TXC Technology Inc. Tai-Shing Electronics Components Corporation TXC Europe GmbH	Western Samoa Hong Kong Japan U.S.A. Taiwan Germany	Investment management International trading Marketing activities Marketing activities Manufacture and sales of electronics products Marketing activities	$ 1,390,461 2,371 6,172 9,879 360,924 1,746	$ 1,390,461 2,371 6,127 9,879 359,266 1,746	42,835 80 2 300 8,478 50	100.00 100.00 100.00 100.00 32.11 100.00	$ 6,140,266 150,073 31,656 13,321 379,707 4,853	$ 667,077 28,849 3,134 (2,709) 22,340 1,506	$ 661,751 28,849 3,134 (2,709) 7,168 1,506

58 -

TABLE 7

TXC CORPORATION AND SUBSIDIARIES

INFORMATION ON INVESTMENT IN MAINLAND CHINA FOR THE SIX MONTHS ENDED JUNE 30, 2021 (In Thousands of New Taiwan Dollars or U.S. Dollars)

Name of the investees in mainland China, main businesses and products, paid-in capital, method of investment, information on inflow or outflow of capital, percentage of ownership, investment income or loss, ending balance of investment, dividends remitted by the investee, and the limit of investment in mainland China:

Investee Company	Main Businesses and Products	Main Businesses and Products	Paid-in Capital	Method of Investment	Method of Investment	Accumulated Outflow of Investments from Taiwan as of January 1, 2021	Investment Flows	Investment Flows	Accumulated Outflow of Investments from Taiwan as of June 30, 2021	Net Income (Loss) of the Investee	% Ownership of Direct or Indirect Investment	Investment Gain (Loss)	Carrying Amount as of June 30, 2021	Accumulated Repatriation of Investment Income as of June 30, 2021
							Outflow	Inflow
TXC (Ningbo) Corporation TXC (Chongqing) Corporation TETC CORP. NINGBO Chongqing Zhongyang Properties Co., Ltd. Ningbo Beilun Jingyu Trading Corporation Ningbo Longying Semiconductor Co., Ltd. Ningbo Meishan Free Trade Port Area Ding Kai Investment Management Company Limited ChongQing Dingsen Commercial Management Co., Ltd.	Research and development, manufacture, and sale of quartz elements and related electronic products Research and development, manufacture, and sale of quartz elements and related electronic products Research and development, manufacture, and sale of quartz elements and related electronic products Properties development International trading Research and development in integrated circuit Investment management Property management		$ 2,350,052 1,162,074 260,100 684,908 7,090 183,180 160,043 2,185	Indirect investment of the Corporation in mainland China through the Corporation’s subsidiary in a third region Other investment of the Corporation in mainland China Other investment of the Corporation in mainland China Other investment of the Corporation in mainland China Other investment of the Corporation in mainland China Other investment of the Corporation in mainland China Other investment of the Corporation in mainland China Other investment of the Corporation in mainland China		$ 1,427,630 - - - - - - -	$ - - - - - - - -	$ - - - - - - - -	$ 1,427,630 - - - - - - -	$ 667,068 115,775 3,677 190,070 (6) (6,765) - (412)	100 100 100 100 100 40 100 100	$ 667,068 115,775 3,677 190,070 (6) (2,706) - (412)	$ 5,992,186 1,500,936 262,500 767,489 5,814 44,600 233,391 1,693	$ 566,321 306,500 - - - - - -

Accumulated Outward Remittance for Investments in mainland China as of June 30, 2021		Investment Amounts Authorized by the Investments Commission, MOEA			Upper Limit on the Amount of Investments Stipulated by Investment Commission, MOEA
$1,427,630		$2,350,052			$ -

Note: The investment in mainland China has no maximum limit since the Company has acquired the approval from the Industrial Development Bureau for the establishment of the Company’s operating headquarters in Taiwan.

59 -

TABLE 8

TXC CORPORATION AND SUBSIDIARIES

SIGNIFICANT TRANSACTIONS WITH INVESTEE COMPANIES IN MAINLAND CHINA, EITHER DIRECTLY OR INDIRECTLY THROUGH A THIRD PARTY, AND THEIR PRICES, PAYMENT TERMS, AND UNREALIZED GAINS OR LOSSES

FOR THE SIX MONTHS ENDED JUNE 30, 2021 (In Thousands of New Taiwan Dollars)

Significant direct or indirect transactions with the investees, prices and terms of payment, unrealized gain or loss:

Company Name	Investee Company	Transaction Type	Purchase/Sale	Purchase/Sale	Price	Transaction Details	Transaction Details	Notes/Accounts Receivable (Payable)	Notes/Accounts Receivable (Payable)	Unrealized (Gain) Loss	Note
			Amount	%		Payment Term	Comparison with Normal Transaction	Ending Balance	%
TXC Corporation	TXC (Ningbo) Corporation TXC (Ningbo) Corporation TXC (Chongqing) Limited	Purchase Sale Purchase	$ 1,533,431 182,655 713,476	39 3 18	Its trading price depends on its function within the Group ″ ″	Similar with third parties ″ ″	Its trading price depends on its function within the Group ″ ″	$ (838,867) 107,518 (375,338)	(43) 3 (19)	$ 208 5,543 3,491

The transactions of properties and the profit or loss: None.
Endorsements guarantees or collateral directly or indirectly provided to the investees: None
Financing directly or indirectly provided to the investees: None
Other transactions that significantly impacted the current year’s profit or loss or financial position: None
60 -

TABLE 9

TXC CORPORATION AND SUBSIDIARIES

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS FOR THE SIX MONTHS ENDED JUNE 30, 2021

(In Thousands of New Taiwan Dollars)

No.	Company Name	Counterparty	Nature of Relationship (Note 1)		Intercompany Transactions	Intercompany Transactions
				Accounts	Amount	Terms (Notes 1 and 2)	Percentage of Consolidated Total Gross Sales or Total Assets (%)
0	TXC Corporation	TXC Technology, Inc. TXC Japan Corporation TXC Europe GmbH TXC (Ningbo) Corporation TXC (Chongqing) Limited Taiwan Crystal Technology (HK) Limited	a a a a a a	Other expense - consulting expense Other expense - consulting expense Other expense - consulting expense Sales Purchase Trade receivables Trade payables Purchase Trade payables Purchase Trade payables	$ 20,264 17,490 6,111 182,655 1,533,431 107,518 838,867 713,476 375,338 79,885 44,550	a a a a a a a a a a a	- - - 2 20 1 5 9 2 1 -
1	TXC (Ningbo) Corporation	TXC (Chongqing) Limited TETC CORP. NINGBO Taiwan Crystal Technology (HK) Limited	c c c	Sales Purchase Trade receivables Trade payables Sales Trade receivables Other receivables Purchase Trade payables	13,663 148,084 5,738 87,253 65,615 73,546 152,691 18,684 10,221	c c c c c c c c c	- 2 - - 1 - 1 - -

Note 1: a. Represent the transactions from parent company to subsidiary.

c. Represent the transactions between subsidiaries.
Note 2: For the six months ended June 30, 2021, the selling price and purchasing price were not significantly different from those of third parties, except those for TXC (Ningbo) Corporation, TXC (Chongqing) Limited, TETC CORP. NINGBO and Taiwan Crystal Technology (HK) Limited, which is depending on its function within the Group.
61 -

AI assistant

TXC — Interim / Quarterly Report 2021

52274_rns_2021-12-01_182876a0-a2c3-437a-b7b5-01cb0876a803.pdf

TXC CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

TXC CORPORATION AND SUBSIDIARIES

TXC CORPORATION AND SUBSIDIARIES

TXC CORPORATION AND SUBSIDIARIES

TXC CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) (Reviewed, Not Audited)

TXC CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) (Reviewed, Not Audited)

TXC CORPORATION AND SUBSIDIARIES

1. GENERAL INFORMATION

2. APPROVAL OF FINANCIAL STATEMENTS

3. APPLICATION OF NEW, AMEND AND REVISED STANDARDS, AND INTERPRETATIONS

New IFRSs

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

6. CASH AND CASH EQUIVALENTS

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

9. FINANCIAL ASSETS AT AMORTIZED COST

10. NOTES RECEIVABLE, TRADE RECEIVABLES AND OTHER RECEIVABLES

June 30, 2021

June 30, 2020

11. INVENTORIES

12. SUBSIDIARIES

Subsidiaries Included in the Consolidated Financial Statements

13. NON-CURRENT ASSETS CLASSIFIED AS HELD FOR SALE

14. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

15. PROPERTY, PLANT AND EQUIPMENT

16. LEASE ARRANGEMENTS

a. Right-of-use assets

d. Other lease information

17. INVESTMENT PROPERTIES

18. BORROWINGS

b. Long-term borrowings

19. OTHER LIABILITIES

20. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

b. Defined benefit plans

21. EQUITY

b. Capital surplus

22. REVENUE

23. NET PROFIT (LOSS) AND OTHER COMPREHENSIVE INCOME (LOSS) FROM CONTINUING OPERATIONS

c. Other gains and losses

d. Finance costs

f. Employee benefits expense

g. Employees’ compensation and remuneration of directors

Accrual rate

Amount

24. INCOME TAXES RELATING TO CONTINUING OPERATIONS

b. Income tax recognized in other comprehensive income

c. Income tax assessments

25. EARNINGS PER SHARE

Net Profit for the Period

26. NON-CASH TRANSACTIONS

27. CAPITAL MANAGEMENT

28. FINANCIAL INSTRUMENTS

June 30, 2021

June 30, 2020

1) Market risk

a) Foreign currency risk

Sensitivity analysis

b) Interest rate risk

Sensitivity analysis

2) Credit risk

3) Liquidity risk

Liquidity and interest rate risk tables for derivative financial liabilities

June 30, 2021

29. TRANSACTIONS WITH RELATED PARTY

h. Compensation of key management personnel

30. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

31. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

32. SIGNIFICANT EVENTS AFTER REPORTING PERIOD

33. OTHER ITEMS

34. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

December 31, 2020

TXC Interim / Quarterly Report 2021