TYNTEK - Annual Report 2020 | FinancialReports.eu

Stock Code: 2426

==> picture [57 x 67] intentionally omitted <==

TYNTEK CORPORATION

TYNTEK Corporation

2020 Annual Report

To search for the annual report: (1) Market Observation Post System: HTTP://MOPS.TWSE.COM.TW (2) Company website: WWW.TYNTEK.COM.TW

May 12, 2021

(English translation of consolidated financial statements originally issued in Chinese is unaudited and for information purpose only; The Chinese version shall prevail.)

I. Names, positions, contact numbers and e-mail addresses of spokesperson and acting spokesperson:

Name of Spokesperson: Mei-Ling Chiu

Title: Assistant Vice President of Finance Division

Tel: (037)582997 ext 10162

E-mail: [email protected]

Name of Deputy Spokesperson: Hsiao-Ping Li

Title: Manager of Finance Division Tel: (037)582997 ext 10170

E-mail: [email protected]

II. Address and Tel of Headquarter, branch and plants:

Address of Headquarter: No. 15, Kezhong Rd., Zhunan Township, Miaoli County,

Address of Branch: No. 1387 and 1389, Ren-Ai Rd., Zhunan Science Park, Zhunan Township, Miaoli County Address of Ren-Ai Plant: No. 1387 and 1389, Ren-Ai Rd., Zhunan Township, Miaoli County Address of Kezhong Plant: No. 15, Kezhong Rd., Zhunan Township, Miaoli County, Tel of Headquarter: (037)582-997 Tel of Branch: (037)582-997997

III. Name, Address, Website and Telephone Number of Stock Transfer Agent & Registrar:

Name: Stock Affairs Agency Department, Fubon Securities Co., Ltd

Address: 2F, No. 17, Xuchang St., Zhongzheng District, Taipei Ctiy

Website: www.fbs.com.tw Tel: (02)2361-1300

IV. Name of the certified public accountant who duly audited the annual financial report for the most recent

fiscal year, and the name, address and telephone number of said person's accounting firm:

Name of CPAs: Su-Li Fang, Cheng-Chih Lin

Name of accounting firm: Deloitte Taiwan

Address: 20F, No. 100, Song-Ren Rd., Neighborhood 8, Xitcun Village, Xinyi Rd., Taipei City

Website: www.deloitte.com.tw Tel: (02)2725-9988

V. Name of any exchanges where the company's securities are traded offshore, and the method by which to

access information on said offshore securities: None.

VI. Company website: WWW.TYNTEK.COM.TW

	Table of Contents
One.	Report to Shareholders .................................................................................................................................................................... 1
Two.	Company Profile ............................................................................................................................................................................... 6
Three.	Corporate Governance Report ........................................................................................................................................................ 9
I.	Organization ..................................................................................................................................................................................... 9
	(I) Organizational structure ..................................................................................................................................................... 9
	(II) Background information of directors, independent directors, the President, vice presidents, assistant vice presidents, and
	heads of departments and branch offices ......................................................................................................................... 12
	(III) Compensation paid to non-independent directors, independent directors, the President, and vice presidents in the last
	year .................................................................................................................................................................................. 17
	(IV) Amount of compensation paid in the last 2 years by the Company and all companies included in the consolidated
	financial statements to the Company's non-independent directors, independent directors, President, and vice presidents,
	and their respective proportions to standalone net income, as well as the policies, standards, and packages by which
	they were paid, the procedures through which compensations were determined, and their association with business
	performance and future risks ............................................................................................................................................ 19
II.	Corporate governance ..................................................................................................................................................................... 20
	(I) Functionality of the board of directors and performance evaluation ................................................................................ 20
	(II) Work focus and progress of the Audit Committee ........................................................................................................... 23
	(III) Deviation and causes of deviation from Corporate Governance Best-Practice Principles for TWSE/TPEX Listed
	Companies ....................................................................................................................................................................... 26
	(IV) Composition, responsibilities, and functionality of the Remuneration Committee .......................................................... 36
	(V) Fulfillment of social responsibilities and deviation and causes of deviation from Corporate Social Responsibility Best
	Practice Principles for TWSE/TPEX Listed Companies .................................................................................................. 39
	(VI) Enforcement of business integrity, deviation and causes of deviation from Ethical Corporate Management Best Practice
	Principles for TWSE/TPEX-Listed Companies ............................................................................................................... 48
	(VII) Availability of corporate governance principles and related policies ............................................................................... 53
	(VIII) Other information material to the understanding of corporate governance within the Company ..................................... 53
	(IX) Internal control ................................................................................................................................................................. 55
	1、 Declaration of Internal Control System 55
	2、 CPA's review on internal control system 56
	(X) Penalties imposed against the Company for regulatory violation, or penalties against insiders for violation of internal
	control system in the most recent year up until the publication date of annual report; describe areas of weakness and any
	corrective actions taken .................................................................................................................................................... 56
	(XI) Major resolutions passed in shareholder meetings and board of directors meetings held in the last year up until the
	publication date of this annual report ............................................................................................................................... 56
	(XII) Documented opinions or declarations made by directors or supervisors against board resolutions in the most recent year,
	up until the publication date of annual report ................................................................................................................... 58
	(XIII) Resignation of personnel related to the preparation of financial statements in the most recent year, up until the
	publication date of annual report ...................................................................................................................................... 58
III.	Disclosure of CPA remuneration .................................................................................................................................................... 58
	(I) Non-audit fees to financial statement auditors, accounting firms, and related businesses that amount to one-quarter or
	higher of audit fees........................................................................................................................................................... 58
	(II) Change of accounting firm that resulted in the reduction of audit fee from the previous year; disclose audit fee before
	and after the change and the amount, percentage, and cause of such change ................................................................... 58
	(III) Any reduction in audit remuneration by more than 15% compared to the previous year; state the amount, the
	percentage, and reason of such variation.......................................................................................................................... 58
IV.	Change of CPA ............................................................................................................................................................................... 59
V.	Any of the Company’s Chairman, President, or any manager involved in financial or accounting affairs being employed by the
	accounting firm or any of its affiliated company within the most recent year ................................................................................ 60
VI.	Details of shares transferred or pledged by directors, managers, and shareholders with more than 10% ownership interest in the
	last year, up until the publication date of annual report .................................................................................................................. 60
VII.	Relationships characterized as spouse or second-degree relatives or closer among top-ten shareholders ...................................... 61
VIII. Investments jointly held by the Company's directors, managers, and enterprises directly or indirectly controlled by the Company;
	disclose shareholding in aggregate of the above parties ................................................................................................................. 62
Four.	Capital Overview ............................................................................................................................................................................ 63
I.	Capital and shares ........................................................................................................................................................................... 63
II.	Corporate bonds, preferred shares, overseas depository receipts, employee warrants, and merger/acquisition/divestment through
	exchange of shares .......................................................................................................................................................................... 70
III.	Progress on planned use of capital .................................................................................................................................................. 70
Five.	Operational Overview .................................................................................................................................................................... 71
I.	Business activities .......................................................................................................................................................................... 71
II.	Market, production and sales overview .......................................................................................................................................... 77
III.	Employees ...................................................................................................................................................................................... 86
IV.	Contribution to environmental protection ....................................................................................................................................... 86
V.	Labor-management relations .......................................................................................................................................................... 86
VI.	Major contracts ............................................................................................................................................................................... 91

Six.	Financial Overview ......................................................................................................................................................................... 92
I.	Summary balance sheet and income statement for the last 5 years ................................................................................................. 92
II.	Financial analysis and cause of variation for the last 5 years ......................................................................................................... 96
III.	Audit Committee's report on the review of the latest financial report ............................................................................................ 99
IV.	Latest financial statements ............................................................................................................................................................ 100
V.	Latest audited standalone financial statements ............................................................................................................................. 160
VI.	Any financial distress experienced by the Company or affiliated enterprise and impacts on the Company's financial position .. 216
Seven.	Review of Financial Position, Operating Results, and Risk Management Issues .................................................................... 216
I.	Financial position ......................................................................................................................................................................... 216
II.	Business performance ................................................................................................................................................................... 217
III.	Cash flow ...................................................................................................................................................................................... 218
IV.	Material capital expenditures in the last year and impacts on financial position and business performance ................................ 218
V.	Investment policy in the most recent year, causes of profit or loss incurred, and any improvements or investments planned for the
	next year ....................................................................................................................................................................................... 219
VI.	Analysis of risk issues .................................................................................................................................................................. 221
VII.	Other material issues .................................................................................................................................................................... 225
Eight.	Special Disclosure ......................................................................................................................................................................... 226
I.	Affiliated companies .................................................................................................................................................................... 226
II.	Private placement of securities in the last year up until the publication date of annual report ..................................................... 232
III.	Holding or disposal of the Company's shares by subsidiaries in the last financial year, up until the publication date of annual
	report ............................................................................................................................................................................................ 232
IV.	Other supplementary information ................................................................................................................................................. 232
Nine.	Occurrences Significant to Shareholders' Interests or Securities Price, as Defined in Subparagraph 2, Paragraph 2, Article
	36 of the Securities and Exchange Act, in the Last Year up Until the Publication Date of Annual Report .......................... 233

One.Report to Shareholders

Good day, ladies and gentlemen,

Your coming to the shareholders meeting is highly appreciated, and I would like to express the highest appreciation to your support and encouragement, on behalf of the Company. Hereby the 2020 business results and strategies for the future development are reported as the following:

I. 2020 Annual Business Plan Implementation Outcome

Looking back the year of 2020, the revenue in 2020 was slightly decreased from the revenue in 2019 by 3.62%. Despite that the global market was affected by the COVD-19 pandemic, due to the positive impacts of the increasing terminal application demands for backlight and invisible light LED, etc., the operating profit was increased by NT$ $36,680 thousands in comparison to 2019. Looking to the future, the Company will continue its dedication in the business development based on the initial commitment by providing products and services satisfying customer demands, thereby generating profits and achieving continuous growth for the Company. Business performance and operating status of the Company in 2020 are compared with the ones in 2019 as described in the following respectively:

(I) 2020 Annual Business Plan Implementation Outcome

Unit: NTD thousands

			Unit:	NTD thousands
Item	2019	2020	Percentage	difference %
Net sales amount	2,519,855	2,428,616	(91,239)	(3.62)
Operating profit (loss)	(28,352)	8,328	36,680	(129.37)
Non-operating income and (expense)	259,883	355,661	95,778	36.85
Net income before tax	231,531	363,989	132,458	57.21
Income tax expense	22,141	56,088	33,947	153.32
Net income	209,390	307,901	98,511	47.05
Basic earnings per share after tax (NT$)	0.60	1.02	0.42	70.00

(II) Budget Execution: the actual operation is generally consistent to the business plans formulated internally by the Company.

(III) Financial Revenue/Expenditure and Profitability Analysis

item	item	2020	2019
Financial structure (%)	Debt to total assets ratio	40.28	36.44
	Long-term capital to property, plant & equipmentratio	248.90	284.25
Debt servicing capability (%)	Current ratio	224.72	258.59
	Quick ratio	181.37	203.21
Profitability (%)	Return on asset	3.64	5.26
	Return on shareholders’ equity	5.22	8.03
	Net profit margin	8.31	12.68
	Earnings per share (EPS) (NT$)	0.60	1.02

(IV) R&D Status

The Company has always focused on the product R&D capability and with the continuous efforts over the past years, we have been able to develop and launch numerous outstanding new products, and have also been able to gain support from the public sector and government agencies, All of such achievements demonstrate the Company's commitment and dedication in R&D technologies. After the Company has completed the development and mass production of high luminance LED, our production line becomes more complete. To develop products of greater prospective and marketability, in recent years, the Company is fully dedicated in the research and development of optical communication sensors and sensors for the fields of automobile, medical care and precision control. We have achieved preliminary outcome and the products have entered the mass production stage. In addition, the Company is also active in the investment of relevant product application fields. With the rapid growth of the optoelectronic market, the application scope of various products continues to expand, and the market demand is increasing. To satisfy the market

demand, the Company will continue to focus on the development of the following products:

A. High density 2D/3D semiconductor passive components
B. 6” wafer and 2D/3D sensing PD
C. 6” wafer and high precision and power components
D. High power AlGaInP light emitting diodes
E. High speed communication photodiodes
F. Multiband photo detectors
G. Dark violet (DUV/UVC) sensors
H. Silicon substrates with built-in electrostatic protection components
I. Flip-chip Zener diodes
J. Photo diode integrated circuit (PDIC)
K. Low-capacitance transient voltage suppressors (TVS)
L. High speed optical communication laser diodes
M. Vertical cavity surface emitting laser (VCSEL) diodes
N. New generation semiconductor material components

II. Summary of the 2021 business plan

(I) Operating Guideline

To achieve the business objectives of the present year, the Company will continue to make further improvement on the competitiveness in the marketing, R&D, manufacturing and management aspects. For the year of 2020, the main business guidelines were as follows:

Cope with the overseas market growth, and actively expand the market share.
Enhance new product development, and improve profitability.
Continue to increase production efficiency and to improve product quality in order to reduce cost.
Continue to promote digital computerization and to increase work efficiency.
Increase the sales weight of Si component products, thereby enhancing the profitability.
2 -
Cope with market development demands for semiconductor lighting, and actively expand integrated power and protection components.
Continue the development of optical communication component products and increase their weight in the sales.
Strengthen 6” wafer production capacity and enhance product technologies.

(II) Sales forecast and basis

The forecast sales quantity of the Company is determined based on the environment of the industry and the supply and demand condition of the market along with the consideration of own production capacity and business development. The Company firmly believes that a complete production line is the essential factor supporting the sustainable operation of the Company. Based on such principle, the Company will continue to develop new products and to improve product quality, thereby achieving the goals of increasing customer satisfaction and maintaining excellent relationship with suppliers with best effort.

Forecasted sales volume of TYNTEK in 2021

Name of Product	Volume	Unit
Compound semiconductor- Lighting components and optical communication	12,850	KK
SI	11,300	KK
	148,000	PCS

(III) Important Production and Sale Policies

For the year of 2020, the Company will actively develop new products, new customer sources and will also adjust product structure in order to improve the overall gross margin with best effort, In addition, the Company will also research and develop various products satisfying the market trend, thereby increasing the Company's own technical level and understanding customer demands and market development trend effectively. Furthermore, the Company will also seek cooperation with the upstream raw material suppliers in order to ensure raw material quality and sufficient supply sources while maintaining long term cooperation relationship with customers. Moreover, to cope with the expansion of business, the Company will actively engage in the construction of complete international sales channels and logistics management. The Company also aims to enhance professional trainings of engineers, to improve the product technical support and aftersale service standards, to expand overseas markets continuously and to secure the domestic market, thereby increasing the market share of the Company’s products.

III. The company's future development strategy, and the effect of external competition, the legal environment, and the overall business environment

(I) Future Development Strategy
Short-term strategies:
3 -
(1)Based on the currently existing business, continue to dedicate in the development of high frequency/high power infrared LED products and various Si sensors and protection components. In addition, for different markets, develop sales method suitable to the local markets.
(2)Continue to promote the rationalization and flexibility of production process, in order to achieve harmony between production and sales, as well as to achieve most optimal operating economic scale; implement quality management thoroughly and achieve the goal of Quality First with best effort. Increase automatic production efficiency and product yield rate, engineering research and development process systematization, thereby improving overall management quality.
(3)Establish new wafer fab, and increase the wafer size from 5” to 6”, as well as expand scale and technology.
Long-term plans:
(1) In addition to continue to improve quality and to maintain excellent cooperation relationship with domestic and foreign giants in the industry, the Company aims to expand the market share as well as to establish complete sales channels globally and diverse business strategies.
(2) Integrate various products of the Company and subsidiaries, and establish the operational development model with horizontal expansion and vertical integration, thereby increasing the overall competitiveness of the Company.
(3) Continue research and development, maintain the leading position in manufacturing technologies, and improve OEM capability, thereby exploiting the Company’s advantage in the mass production economic scale.
(II) Effect of external competition, the legal environment, and the overall business environment:
External competition environment:

In 2020, the LED industry was affected by the global COVID-19 pandemic. The public’s awareness of health management has increased significantly, and the demand for various pandemic containmentrelated consumer products has also increased. The price drop and the competitive pressure in the Chinese LED industry have forced many small player into a plight of bankruptcy and exiting market, while medium and large companies have closed part of capacity or ceased positioning the mid-upstream epitaxy/crystal grain market. Therefore, the global LED industry order has significantly improved, prompting the pressure of price competition decreased significantly. In recent years, although the scale of the LED industry in various application markets such as lighting, backlighting, and display, will continue to expand, driving great LED demand potential, but the fierce price competition in the global LED industry, coupled with the rapid penetration of lighting and other application markets, most manufacturers’ production expansions have tended to be conservative, and increase the margings by positioning new markets or new technology development, to avoid falling into the contest of low margins. With the emergence of artificial intelligence (AI) and intelligent lighting, driven by energy saving and intellectualization, in the future, the interdisciplinary integration and intelligent manufacturing are the main development trends.

2. Legal environment:

The “Minamata Convention on Mercury” specifies that the manufacture, import and export of which will be altogether prohibited since 2020. Taiwan’s Environmental Protection Administration has announced the amendments to management items of Toxic Chemical Substance Control Act for Mercury to enhance our control measures with respect to mercury products to comply with the Convention. It means that the application traditional UV mercury lamp has become a history, and the UVC LEDs has replaced the existing UV mercury lamps. The application of sterilizing UVC LEDs have also attracted global attention. Meanwhile, in response to the changes in the coronavirus (COVID-19) pandemic, demands for UV LED and IR LED and other products have grown.

3. Overall business environment:

Other than the basic growth backdrop of the global economy, the growth of the global optoelectronics industry still depends on breakthrough commercialization technologies, effective innovative applications and the infusion of emerging markets. Looking to the future, with the infusion of new applications, the global optoelectronics market looks for the next decade of the LED industry, and explore applications with the possibility of rapid growth in the future. Emerging applications, such as Mini/Micro LED, automotive lighting, high-end health lighting and UV/IR LED are all worthy for market attention. In addition, as Mini LED technology matures, process yields increase, and the development of widely discussed 3D sensing, it is expected to increase the demand for LED lighting, and it will be positively helpful to reduce the production capacity of LED crystal grain manufacturers.

To develop products of greater prospective and marketability, in recent years, the Company is fully dedicated in the research and development of high power IR LED and light-receiving component the fields of automobile, medical care, wearable devices, and precision control. In addition, the Company is also active in the investment of relevant product application fields. With the rapid growth of the optoelectronic market, the application scope of various products continues to expand, and the market demand is increasing. To satisfy the market demand, the Company will continue to focus on the development of the following products:

As the COVID-19 vaccine has been launched, and some countries have begun the vaccination, it is expected that pandemic containment in 2021 to be gradually stabilized. Coupled with the continuous expansion of stimulus by governments of various countries, and the warming of the LED downstream application market, these factors are positive to drive the overall operating environment. For the development of the LED industry, the keys of survival depends on how to choose scale economies and niche market development strategies.

TYNTEK Corporation

Chairman: Bosco Foo

Manager: Will Chou

Accounting Supervisor: Li, Hsiao-Ping

Two.Company Profile

(I) Date of establishment: April 4, 1987
(II) Company history
(1) Mergers and acquisitions in the last financial year up until the publication date of annual report: None.
(2) Impacts following a major transfer of shareholding by directors, independent directors, or shareholders with more than 10% ownership interest, or change of management team or any event capable of affecting shareholders' interests: None.
(3) Other information:
- April 1987: TYNTEK Corporation was founded by Chairman Bosco Foo, President Raymond Sheu, and a team of professional talents with a share capital of Nine Million New Taiwan Dollars.The Company also signed a collaborative project with Industrial Technology Research Institute Industrial Material Lab for IR9400 and the scaling of LED single crystal and epitaxy productions.

April 1987:	TYNTEK Corporation was founded by Chairman Bosco Foo, President Raymond Sheu, and a team of professional talents with a share capital of Nine Million New Taiwan Dollars.The Company also signed a collaborative project with Industrial Technology Research Institute Industrial Material Lab for IR9400 and the scaling of LED single crystal and epitaxy productions.
November 1987:	Park Administration approved the Company’s investment projects.
September 1988:	Relocated to No. 16, Gongye East 4th Road, Hsinchu Science Park.
December 1988:	Constructed new plant at No. 16, Gongye East 4th Road, Hsinchu Science Park.
July 1989:	Obtained work commencement permit and received Park Registration (including plant
	registration and profit-seeking business registration) from Science Park
	Administration.
August 1989:	Raised capital, acquired equipment, commenced operations, and made trial sales on a
	small scale.
January 1990:	Launched GaP and GaAsP crystals in red, orange, and yellow-green colors.
January 1993:	Signed multiple technology transfer contracts with Industrial Technology Research
	Institute.
August 1994:	High-performance and high-efficiency AlGaAs:the Si IR LED epitaxy mass
	production plan received innovative project subsidy from the Park Administration.
September 1994:	Launched AlGaAs-based high luminance red LED crystal.
January 1995:	Continued expansion of primary production equipment, resulting in a significant
	increase in operations and profitability.
June 1995:	One director and one supervisor were added to the management team.
January 1996:	Received approval from Park Administration to acquire factory premise at 1F, No. 10,
	Gongye East 4th Road, Hsinchu Science Park, for new plant construction.
June 1996:	Received approval from Securities and Exchange Commission, Ministry of Finance,
	for public offering.
October 1996:	Purchased land and factory premise located in Zhunan Township, Miaoli County, for
	new plant construction and production capacity expansion.
December 1996:	Completed construction of plant at No. 10 Gongye East 4th Road, and commenced
	production of photo diodes and phototransistors.
February 1997:	Awarded patent for "structural improvement of low-noise phototransistor array."
April 1997:	President Raymond Sheu was elected Vice Chairman by the board of directors,
	whereas Vice President C.H. Wu was promoted to President.
July 1997:	Passed ISO 9001 certification.
November 1998:	Shares were listed for trading on Taipei Exchange (TPEX)
September 2000:	Shares were listed for trading on Taiwan Stock Exchange Corporation (TWSE)
December 2001:	Completed silicon component plant expansion project at Zhunan Branch to increase
	production capacity of phototransistors and photo diodes. Commenced R&D for active
	optical communication components.
May 2002:	Vice President J.R. Deng was promoted to President.
November 2002:	Signed a contract with E-wintek Corp. to develop GPRS/GPS wireless communication
	products and established an EMS (electrical machine service) Division.
November 2003:	Passed QS9000 certification for quality system.
December 2004:	Received certification for ISO14001 - Environmental Management System and

	OHSAS18001 - Occupational Health and Safety Management System.
December 2005:	Signed a contract for “AC LED joint-development” with the Photovoltaic Laboratory
	of ITRI.
July 2006:	Divested Tyntek’s ITS Product Division into a new separate subsidiary named
	Tynsolar Corporation to assume businesses (including assets, liabilities, and
	operations) from TYNTEK Corporation. (July 31, 2006 was set as the baseline date
	for divestment during the shareholder meeting held on June 1, 2006)
November 2006:	Received the “Glittering Black Horse Award” for outstanding smoke-free work
	environment.
November 2007:	Received autonomous healthy workplace accreditation – smoke hazard prevention
	label.
December 2007:	Received QC 080000 IECQ HSPM certification.
December 2007:	Received Green Partner certification from SONY.
November 2008:	Subsidiary - Tynsolar Corporation was listed for trading on TPEX.
April 2009:	Received certification for ISO14064-1:2006 - Greenhouse Gas Inventory.
November 2009:	Won the Safety and Health Role Model Award from the Industrial Development
	Bureau, Ministry of Economic Affairs.
January 2010:	Passed certification for ISO14001 and OHSAS18001.
January 2010:	Passed certification for TOSHMS.
June 2010:	President J.R. Deng was promoted CEO, while Vice President Will Chou was
	promoted President.
November 2010:	Passed ISO14001(2004) and OHSAS18001(2007)38.
March 2010:	Received certification for ISO14064-1:2006 - Greenhouse Gas Inventory.
January 2012:	Passed certification for TOSHMS:2007.
December 2012:	Awarded the MOE’s ABOE Energy Label.
December 2013:	Received certification for ISO14064-1:2006 - Greenhouse Gas Inventory.
January 2014:	Passed certification for ISO14001(2004), OHSAS18001(2007), and CNS15506:2011.
September 2014:	Reduced share capital against cumulative losses; paid-up capital was reduced to
	NT$2,392,453,000.
October 2014:	Retired 3,313,485 common shares held as treasury stock; paid-up capital was reduced
	to NT$2,359,318,000.
October 2014:	Received certification for ISO14064-1:2006 - Greenhouse Gas Inventory.
March 2015:	Issued 40,000,000 new shares for cash, and issued the Company's 8th domestic
	secured convertible bonds totaling NT$300 million.
September 2015:	Invested USD 1,500,000 into Yuanmao Opto-electronic Technology (Wuhan) Co., Ltd.
	through TEK Holding Co., Ltd. and KEYWAY INTERNATIONAL L.L.C.
October 2015:	Invested NTD 8,500,000 into Shu Chi Co., Ltd., an equity-accounted investment.
October 2016:	Received certification for Badge of Accredited Healthy Workplace.
May 2016:	Awarded utility model patent in the Mainland - light-emitting diode and pattern
	formation device.
October 2016:	Received certification for ISO14064-3:2006 - Greenhouse Gas Inventory.
December 2016:	Passed certification for ISO14001(2004), OHSAS18001(2007), and CNS15506:2011.
May 2017:	Acquired factory premise in Jhunan Science Park with a tender bid of
	NT$640,000,000 for capacity expansion and to improve production capacity and
	technology for 6-inch wafers.
October 2017:	Received certification for ISO14064-1:2006 - Greenhouse Gas Inventory.
December 2017:	Passed certification for ISO14001(2015), OHSAS18001(2007), and CNS15506:2011.
June 2018:	Received certification for ISO14064-3:2006 - Greenhouse Gas Inventory.
December 2018:	Passed certification for ISO14001(2015), OHSAS18001(2007), and CNS15506:2011.
December 2018:	Collaborated with ITRI on a chiller pump optimization project.
May 2019:	Received counseling from Industrial Development Bureau to convert existing safety
	and health management system to ISO45001.
August 2019:	The board of directors passed a resolution to relocate the Company to No. 15,
	Kezhong Road, Zhunan Township, Miaoli County (Jhunan Science Park).
October 2019:	Responded to the invitation of Miaoli County Fire Bureau and participated in the
	planning and execution of "chemical hazard rescue" drill.
November 2019:	Received commendation from Industrial Development Bureau for assistance in risk
	technology.
December 2019:	Passed certification for ISO 14001:2015, ISO 45001:2018, and CNS45001:2018.
May 2020:	Awarded invention patent for the production of wide bandgap oxide epitaxy film.
July 2020:	Passed certification for IECQ QC080000:2017.
November 2020:	Passed certification for IATF16949:2016 and ISO9001:2015.

November 2020: Awarded invention patent for LED lighting module. December 2020: Passed certification for ISO 14001:2015, ISO 45001:2018, and CNS45001:2018.

Three.Corporate Governance Report

I. Organization

(I) Organizational structure

==> picture [710 x 384] intentionally omitted <==

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

1. Organizational structure
Organizational Chart of TYNTEK Corporation
Shareholders’ Meeting
Audit Committee Chairman’s Office
Chairman
Remuneration Committee
Chairman's Assistant
Auditing Office
President’s Office
Innovation R&D Secretary Office
Center
Occupational Safety
Legal Office and Health Office
Product Marketing & Planning & Supporting Compound Semiconductor Si Fab1 Operation Center Si Fab2 Operation Center Overseas Manufacturing
Sales Center Center Operation Center Center
Quality Finance HR IT
Management Division Division Division
Division
----- End of picture text -----

9 -
Responsibilities of main departments
(1) President's Office

‧Establishment of corporate strategies, and research, planning, execution, and consultation of special projects. ‧Planning, enforcement, and tracking of operational matters and procedures. ‧Establishment of operational goals.

(2) Secretary Office
‧Organizes meeting and travel arrangements for managers of the President’s Office. ‧Public relations affairs.
(3) Occupational Safety and Health Office

‧Industrial safety and health affairs.

(4) Auditing Office

‧Inspects and evaluates robustness of the internal control system, and provides analyses, assessments, and recommendations.

‧Introduces solutions that facilitate effective management and control, and improve operating efficiency at reasonable cost.

(5) Innovation R&D Center

‧Research, development, and design of new products.

‧Improves product features, reduces production cost, and raises product yield.

‧Acquisition of patents for new products.

‧Technology licensing for new products.

(6) Product Marketing & Sales Center

‧Establishment of product marketing strategies and market development.

‧Gathering and analysis of market/industry information.

‧Product after-sale service.

(7) Planning & Supporting Center ‧Accurate assessment of demands for raw materials and supplies.

‧Arrangement and control of production schedule.

‧Exploration and development of product applications.

‧Procurement and warehousing related matters. ‧Responsible for the planning, maintenance, and maintenance of water purification system, air conditioning system, chiller system, and air compressor. ‧Planning, management, and maintenance of water, power, and gas systems. ‧Coordination and execution of repairs.

(8) Compound Semiconductor Operation Center ‧Research, development, engineering, and improvement of light-emitting components and optical communication components. ‧Production of light-emitting components and optical communication components. ‧Improvement of production procedures. ‧Equipment maintenance-related matters.

(9) Si Fab1 Operation Center

10 -
‧Research, development, engineering, and improvement of light-receiving components. ‧Production of light-receiving components. ‧Improvement of production procedures. ‧Equipment maintenance-related matters.
(10) Si Fab2 Operation Center ‧Research, development, engineering, and improvement of light-receiving components. ‧Production of light-receiving components. ‧Improvement of production procedures. ‧Equipment maintenance-related matters.
(11) Overseas Manufacturing Center ‧Development of new businesses in the Mainland and research and development of green products.
(12) Quality Management Division ‧Establishment of quality control systems and policies. ‧Inspection of raw materials, supplies, and finished goods.
(13) Finance Division ‧Cash disbursement and funding related matters. ‧Accounting and bookkeeping related matters. ‧Tax calculation and filing.
(14) HR Division ‧Personnel recruitment, training, performance management, promotion, reward, and discipline. ‧Management and planning of daily administrative affairs.
(15) IT Division ‧Planning, creation, and management of the management information system (MIS).
‧Spearheads in the planning and implementation of the Company’s electronic communication system. ‧Introduction of computer systems to assist various activities.
11 -
(II) Background information of directors, independent directors, the President, vice presidents, assistant vice presidents, and heads of departments and branch offices 1. Directors' and independents' background

Directors' and independents' background

							Directors' and independents' background	Directors' and independents' background	Directors' and independents' background	Directors' and independents' background	Directors' and independents' background	Directors' and independents' background	Directors' and independents' background	Directors' and independents' background	Directors' and independents' background	Directors' and independents' background	Directors' and independents' background	Directors' and independents' background	Directors' and independents' background
							April 2,2021Unit: shares;%
Title	Nationality or place of registration	Name	Gender	Date elected (appointed) (Note 1)	Tenure	Date first elected	Shareholding when elected		Current shareholding		Current shareholding of spouses and children of minor age		Shareholding by nominee Arrangement		Main career (academic) achievements	Concurrent duties in the Company and in other companies	Spouse or relatives of second degree or closer acting as manager, directororsupervisor
							Shares	Shareholding percentage (%)	Shares	Shareholding percentage (%)	Shares	Shareholding percentage (%)	Shares	Shareholding percentage (%)			Title	Name	Relationship
Chairman	The Republic ofChina	Bosco Foo	Male	2018.06.14	3 years	2003.05.21	8,653,999	2.88	8,918,999	2.97	5,733,997	1.91	0	0	Department of International Business, Tamkang University Chia LongEnterprise - Chairman	(Note 2)	－	－	－
Director	The Republic ofChina	Raymond Sheu	Male	2018.06.14	3 years	2003.05.21	4,208,297	1.40	4,208,297	1.40	1,766,560	0.59	0	0	Department of Library Science, National Taiwan University TOPOLE International - Chairman	(Note 3)	－	－	－
Director	The Republic of China	J.R. Deng	Male	2018.06.14	3 years	2003.05.21	1,519,671	0.51	1,451,671	0.48	1,477	0.00	0	0	Postgraduate Study, National Tsing Hua University EMBA, National Chiao Tung University Industrial Technology Research Institute Photovoltaic Lab - Researcher	The Company Chairman's Assistant (Note 4)	－	－	－
Director	The Republic of China	Ching- Ho Hsu	Male	2018.06.14	3 years	2003.05.21	5,643,530	1.88	5,643,530	1.88	180,455	0.06	0	0	Department of Business Administration, National Chung Hsing University Keeper International - Chairman	Keeper International Corporation - Chairman; Leadsew Industrial Corporation - Chairman; Hanpin Electron Co., Ltd. - Director; Hanchi Development Co., Ltd. - Director; Keeper Technology Co.,Ltd. - Supervisor	－	－	－
Director	The Republic ofChina	Chi-Chao Yeh	Male	2018.06.14	3 years	2018.06.14	2,248,477	0.75	2,248,477	0.75	0	0	0	0	Master’s Degree, University of San Francisco ChungHo Spinning- President	Chung Ho Spinning - Chairman	－	－	－
Director	The Republic of China	Chao- Hsiang Li	Male	2018.06.14	3 years	2018.06.14	93	0.00	150,093	0.05	0	0	0	0	Department of Law, Soochow University Golden Gate University LLM School of Law Taiwan Police College - Full-time Lecturer	None	－	－	－
Independent Director	The Republic of China	Tsung- Yen Lin	Male	2018.06.14	3 years	2018.06.14	0	0	0	0	0	0	0	0	Master of Law, National Chengchi University Master of Business Administration (Accounting), Eastern New Mexico University Deloitte Taiwan - Partnered Accountant Deloitte Taiwan Hsinchu Branch - Director Tunghai University - Part-time Lecturer of Accounting Deloitte & Touche Guam Branch - Assistant Vice President of Audit Department HSBC New York Branch Loan Department - Credit Investigator Cathay Securities Investment Trust Credit Department - Credit Investor National Taxation Bureau of Kaohsiung, Ministry of Finance - Tax Auditor of Audit Section	Tsung-Yen Lin Accounting Firm - Licensed Accountant AES-KY (Advanced Energy Solution Holding Co., Ltd.)	－	－	－
Independent Director	The Republic of China	Ya-Hui Huang	Female	2018.06.14	3 years	2015.06.09	0	0	0	0	0	0	0	0	Department of Law, National Taiwan University	Strategic Alliance Law Firm - Legal Practitioner; The Ambassador Hotel Co., Ltd. - Independent Director;Taipei	－	－	－

12 -

Title	Nationality or place of registration	Name	Gender	Date elected (appointed) (Note 1)	Tenure	Date first elected	Shareholding when elected	Shareholding when elected	Current shareholding	Current shareholding	Current shareholding of spouses and children of minor age	Current shareholding of spouses and children of minor age	Shareholding by nominee Arrangement	Shareholding by nominee Arrangement	Main career (academic) achievements	Concurrent duties in the Company and in other companies	Spouse or relatives of second degree or closer acting as manager, directororsupervisor	Spouse or relatives of second degree or closer acting as manager, directororsupervisor	Spouse or relatives of second degree or closer acting as manager, directororsupervisor
							Shares	Shareholding percentage (%)	Shares	Shareholding percentage (%)	Shares	Shareholding percentage (%)	Shares	Shareholding percentage (%)			Title	Name	Relationship
															Master of Law, National Chung Hsing University (National Taipei University) EMBA, National Taiwan University College of Management District Court and High Court Judge	New Horizon Co., Ltd. - Supervisor
Independent Director	The Republic of China	Yao- Tsung Chiang	Male	2018.06.14	3 years	2015.06.09	0	0	0	0	0	0	0	0	Ph.D. in Mechanical Engineering, University of Wisconsin–Madison China Steel Chemical Corp. - Chairman; China Steel Corporation - Chairman; China Airlines Ltd. - Chairman	Taiwan High Speed Rail Corporation - Chairman; Radiant Opto-Electronics Corporation - Independent Director	－	－	－

Note 1: Directors' and supervisors' term of service ended in June 2018; a re-election was held on June 14, 2018.

Note 2: Chairman: TECH MORE INTERNATIONAL CORP. Chairman representatives: Long Benefit Investment Co., Ltd.; TEK Holding Co., Ltd.; KEYWAY INTERNATIONAL L.L.C. Director representatives: Yuanmao Opto-electronic Technology (Wuhan) Co., Ltd.; Kaixin Technology (Wuhan) Co., Ltd.

Note 3: Chairman: Keeper Technology Co., Ltd. Chairman representatives: Global Unity Int’l Co, Ltd.; Creation New Technology Inc. Director representatives: Yuanmao Opto-electronic Technology (Wuhan) Co., Ltd.; Kaixin Technology (Wuhan) Co., Ltd.; Coretech Optical Co., Ltd.

Note 4: Chairman representative: Yuanmao Opto-electronic Technology (Wuhan) Co., Ltd. Director representatives: Kaixin Technology (Wuhan) Co., Ltd.; Fujian Prima Optoelectronics Co., Ltd.; Uni Top Optical Corporation.

Note 5: In situations where the Company's President or manager of the highest equivalent grade is the same person as or a spouse or first-degree relative of the Chairman, additional explanation will be provided on the reasons, rationality, and necessity of such an arrangement and any response measures taken: None.

Table 1: Major shareholders of corporate shareholders

April 2, 2021 Name of Institutional Shareholder Major shareholders of institutional shareholder Not applicable Table 2: Major shareholders of major corporate shareholders listed in Table 1 April 2, 2021 Name of Institution Major shareholders of institution Not applicable

13 -

Directors' and independents' background

Criteria Name (Note 1)	Having more than 5 years work experience an qualifications listed below	Having more than 5 years work experience an qualifications listed below	d professional				Compliance of independence (Note 2)	Compliance of independence (Note 2)	Compliance of independence (Note 2)	Compliance of independence (Note 2)	Compliance of independence (Note 2)	Compliance of independence (Note 2)				Number of positions as independent director in other public companies
	Lecturer (or above) of commerce, law, finance, accounting, or any subjects relevant to the Company’s operations in a public or private tertiary institution	Judge, prosecutor, lawyer, accountant, or holder of national exam or professional qualification relevant to the Company’s operations	Commercial, legal, financial, accounting or other work experiences required to perform the assigned duties	1	2	3	4	5	6	7	8	9	10	11	12
Bosco Foo	-	-		-	-	-			-	-	-	-				0
Raymond Sheu	-	-			-	-			-	-	-	-				0
Ching-Ho Hsu	-	-			-	-			-	-	-	-				0
J.R. Deng	-	-		-	-				-	-	-	-				0
Chi-Chao Yeh	-	-									-	-				0
Chao-HsiangLi		-	-													0
Tsung-Yen Lin	-															1
Ya-Hui Huang	-															1
Yao-TsungChiang		-														1

Note: A “  ” is placed in the box if the director or independent director met the following conditions during active duty and two years prior to the date elected.

（ 1 ） Not employed by the Company or by any of its affiliated companies.
（ 2 ） Not a director or supervisor of the Company or any of its affiliated companies (this restriction does not apply to concurrent independent director positions in the Company, its parent company, subsidiary, or another subsidiary of the parent that is compliant with the Act or local laws).
（ 3 ） Does not hold more than 1% of the Company's outstanding shares in their own names or under the name of spouse, underage children, or proxy shareholder; nor is a top-10 natural-person shareholder of the Company.
（ 4 ） Not a manager listed in (1), or a spouse, 2nd-degree relative or closer or 3rd-degree direct relative or closer to any personnel listed in (2) or (3).
（ 5 ） Not a director, supervisor, or employee of any corporate shareholder that: 1. holds 5% or more of the Company's outstanding shares; 2. is a top-5 shareholder; or 3. appoints director/supervisor representative in the Company according to Paragraph 1 or 2, Article 27 of The Company Act. (This excludes concurrent independent director positions held within the Company and its parent/subsidiary, or in other subsidiary of the parent company that are compliant with the Act or local laws).
（ 6 ） Not a director, supervisor, or employee of any other company that controls directorship in the Company or where more than half of total voting rights are controlled by a single party (this excludes concurrent independent director positions held within the Company and its parent/subsidiary, or in other subsidiary of the parent company that are compliant with the Act or local laws).
（ 7 ） Does not assume concurrent duty as chairman, president or equivalent role, and is not a director, supervisor, or employee of another company or institution owned by spouse. (This excludes concurrent independent director positions held within the Company and its parent/subsidiary, or in other subsidiary of the parent company that are compliant with the Act or local laws.)
（ 8 ） Not a director, supervisor, manager, or shareholder with more than 5% ownership interest in any company or institution that has financial or business relationship with the Company (however, this excludes concurrent independent director positions held within companies or institutions that hold more than 20% but less than 50% outstanding shares of the Company, or in the Company's parent or subsidiary, or in another subsidiary of the parent that is compliant with the Act or local laws).
（ 9 ） Not a professional who provides audit service, or commercial, legal, financial, accounting or related services for an accumulated sum of less than NT$500,000 in the last 2 years, to the Company or its affiliate, nor is an owner, partner, director, supervisor, or manager, or the spouse of any of the above, of a sole proprietorship, partnership, company, or organization that provides such services to the Company or its affiliated companies. This excludes roles as Remuneration Committee, Public Acquisition Review Committee or M&A Special Committee member appointed in accordance with the Securities and Exchange Act or Business Mergers And Acquisitions Act.
（ 10 ） Not a spouse or relative of second degree or closer to any other directors.
（ 11 ） Does not meet any of the conditions stated in Article 30 of The Company Act.
（ 12 ） Not elected as a government or corporate representative according to Article 27 of the Company Act.
14 -

Implementation of board diversity policy (guidelines):

The Company's 12th board of directors comprises 9 seats, including 3 independent directors. All board members are nationals of the Republic of China aged between 55 and 75. J.R. Deng concurrently serves as Chairman's Assistant, which conforms with the criteria that no more than one-third of directors hold concurrent position as managers in the Company. The Company also places emphasis on maintaining gender equality among board members, and has female directors representing 11% of the board. All members possess the following knowledge, skills, and characters needed to exercise their duties:

Diversity criteria Name of director			Basic	composition	composition	composition					Industry experience/professional capabilities	Industry experience/professional capabilities	Industry experience/professional capabilities	Industry experience/professional capabilities	Industry experience/professional capabilities
	Nationality	Gender	Concurrent position as company employee	Age distribution			Terms and ye independentdi		ars as rector
				51 to 60	61 to 70	71 to 80	Below 3 years	3 to 9 years	9 year and above	Finance/Accounting	Marketing	Corporate management	Industry knowledge	Law	Risk management	Information technology
Bosco Foo	The Republic of China	Male				V				V		V	V		V
Raymond Sheu	The Republic of China	Male				V					V	V	V
J.R. Deng	The Republic of China	Male	V	V							V	V	V			V
Ching-Ho Hsu	The Republic of China	Male				V				V	V				V
Chi-Chao Yeh	The Republic of China	Male			V							V			V
Chao- Hsiang Li	The Republic of China	Male		V										V
Tsung-Yen Lin	The Republic of China	Male			V		V			V				V
Yao-Tsung Chiang	The Republic of China	Male			V			V			V	V
Ya-Hui Huang	The Republic of China	Female		V				V						V

Background information of the President, vice presidents, assistant vice presidents and heads of various departments and branches

April 2, 2021 Unit: shares; %

Title	Nationality	Name	Gender	Date elected (appointed)	Shareholding	Shareholding	Shareholding of spouses and children of minor age	Shareholding of spouses and children of minor age	Shareholding by nominee Arrangement	Shareholding by nominee Arrangement	Main career (academic) achievements	Concurrent positions in other companies	Spouse or relatives of second degree or closer actingas managers	Spouse or relatives of second degree or closer actingas managers	Spouse or relatives of second degree or closer actingas managers
					Shares	Shareholding percentage (%)	Shares	Shareholding percentage (%)	Shares	Shareholding percentage (%)			Title	Name	Relationship
President	The Republic of China	Will Chou	Male	2010.07.01	166,813	0.06	─	─	─	─	Department of Physics, Tamkang University VITELIC (Hong Kong) Limited - Vice President	None	─	─	─
Vice President	The Republic of China	Chao- Kun Peng	Male	2010.07.01	10,020	0.00	─	─	─	─	Graduated from United College of Technology Industrial Technology Research Institute - Researcher	None	─	─	─
Vice President	The Republic of China	Te- Cheng Lin	Male	2010.07.01	466	0.00	─	─	─	─	Postgraduate Institute of Chung Hua University Tacheng Turbines - Engineer	None	─	─	─
Vice President	The Republic of China	Tai- Hsiang Hu	Male	2010.07.01	113,945	0.04	─	─	─	─	Graduated from Tamkang University Everlight - Chief of Manufacturing	Yuanmao Opto- electronic Technology (Wuhan) Co., Ltd. - President and Director	─	─	─
Vice President	The Republic of China	Shao- Rong Lu	Male	2014.08.12	34,330	0.01	─	─	─	─	Graduated from Ta Hwa Institute of Technology Industrial Technology Research Institute - Researcher	None	─	─	─
Assistant Vice President of Finance Division	The Republic of China	Mei- Ling Chiu	Female	2010.07.01	14	0.00	─	─	─	─	Postgraduate Study of Business, Columbia Southern University TYNTEK -	Yuanmao Opto- electronic Technology (Wuhan) Co., Ltd. - Director; Hsinjing HoldingCo.,Ltd. -	─	─	─

15 -

										Assistant Vice President of Finance Division	Director representative
CS R&D 1st Division - Assistant Vice President	The Republic of China	Cheng Kung	Male	2010.07.01	2,000	─	─	─	─	Postgraduate Study of Physics, National Tamkang University Kingmax Optoelectronics - Assistant Vice President	None	─	─	─
Innovation R&D Center - Assistant Vice President	The Republic of China	Chia- Chun Yu	Male	2010.07.01	2,088	─	─	─	─	Institute of Nuclear Engineering and Science, National Tsing Hua University TYNTEK Innovation R&D Center - Assistant Vice President	None	─	─	─
Finance Division - Head of Accounting	The Republic of China	Hsiao- Ping Li	Female	2014.02.14	5,827	─	─	─	─	Graduated from Providence University TYNTEK Finance Division - Manager	Yuanmao Opto- electronic Technology (Wuhan) Co., Ltd. - Supervisor	─	─	─

Note: In situations where the Company's President or manager of the highest equivalent grade is the same person as or a spouse or first-degree relative of the Chairman, additional explanation will be provided on the reasons, rationality, and necessity of such an arrangement and any response measures taken: None.

16 -

(III) Compensation paid to non-independent directors, independent directors, the President, and vice presidents in the last year

Compensation to non-independent and independent directors

																December 31,2020 Unit: NTD thousands;%	December 31,2020 Unit: NTD thousands;%	December 31,2020 Unit: NTD thousands;%	December 31,2020 Unit: NTD thousands;%	December 31,2020 Unit: NTD thousands;%	December 31,2020 Unit: NTD thousands;%	December 31,2020 Unit: NTD thousands;%
Title	Name	Directors'compensation								Sum of A, B, C and D as a percentage of net income (Note 8)		Compensation rec				eivedas employee				The sum of A, B, C, D, E, F and G as a percentage of after tax profit(Note 8)		Compensation from parent company or business investments other than subsidiaries (Note 9)
		Benefits (A) (Note 2)		Severance payment and pension (B)		Director remuneration (C)(Note 3)		Fees for services rendered (D) (Note 4)				Salaries, bonuses, special allowances etc. (E) (Note 5)		Severance payment and pension (B)		Employee remuneration (G) (Note 6)
		The Company	All companies included in the financial statements (Note 7)	The Company	All companies included in the financial statements (Note 7)	The Company	All companies included in the financial statements (Note 7)	The Company	All companies included in the financial statements (Note 7)	The Company	All companies included in the financial statements (Note 7)	The Company	All companies included in the financial statements (Note 7)	The Company	All companies included in the financial statements (Note 7)	The Company		All companies included in the financial statements (Note 7)		The Company	All companies included in the financial statements (Note 7)
																Amount paid in cash	Amount paid in shares	Amount paid in cash	Amount paid in shares
Chairman	BoscoFoo	3,108	3,536	0	0	2,306	2,306	60	65	1.80%	1.94%	0	0	0	0	0	0	0	0	1.80%	1.94%	235
Director	Raymond	S 0	428	0	0	1,153	1,153	60	65	0.40%	0.54%	0	0	0	0	0	0	0	0	0.40%	0.54%	0
Director	J.R.Deng	0	428	0	0	1,153	1,153	60	665	0.40%	0.74%	2,304	2,304	145	145	2,153	0	2,153	0	1.91%	2.25%	5
Director	Ching-Ho	H 0	0	0	0	1,153	1,153	60	65	0.40%	0.40%	0	0	0	0	0	0	0	0	0.40%	0.40%	0
Director	Chi-Chao	Y 0	0	0	0	1,153	1,153	60	60	0.40%	0.40%	0	0	0	0	0	0	0	0	0.40%	0.40%	0
Director	Chao-Hsia	n 0	0	0	0	1,153	1,153	60	60	0.40%	0.40%	0	0	0	0	0	0	0	0	0.40%	0.40%	0
Independent Director	Tsung-Yen	0	0	0	0	1,153	1,153	110	110	0.41%	0.41%	0	0	0	0	0	0	0	0	0.41%	0.41%	0
Independent Director	Ya-Hui Hu	0	0	0	0	1,153	1,153	110	110	0.41%	0.41%	0	0	0	0	0	0	0	0	0.41%	0.41%	0
Independent Director	Yao-Tsung Chiang	0	0	0	0	1,153	1,153	110	110	0.41%	0.41%	0	0	0	0	0	0	0	0	0.41%	0.41%	0
1. Directors' compensation mentioned above includes travel allowances paid to independent directors for assuming concurrent roles as Remuneration Committee and Audit Committee members. 2. Policy, system, standards, and structure by which independent director compensation is paid, and association between the amount paid and independent directors' responsibilities, risks and time committed: Independent directors are compensated according to the levels and values of their participation in business operations, which are assessed based on the Board of Directors Performance Assessment Policy after taking into account the presence of moral hazard or any other risk event that may adversely affect the Company's images. The amount of compensation is determined based on individual directors' participation and contribution and overall performance of the Company, and is reviewed in a timely manner to comply with prevailing laws. 3. Compensation received by director forproviding servicetoany companyincludedin thefinancialstatements (e.g. consultancy service without thetitle of anemployee)in thelastyear, except those disclosedin theabovetable: None.

Note 1: The 12th board of directors were elected during the shareholder meeting held on June 14, 2018.
Note 2: Refers to director's compensation in 2020 (including salary, allowance, severance pay, various bonuses and incentives etc).
Note 3: Represents the amount of 2020 director remuneration that the board has approved in 2021.
Note 4: Refers to compensation paid for services rendered in 2020 (including travel, special allowances, subsidies, accommodation, corporate vehicle, and in-kind benefits). If housing, company car and other means of transportation were provided or the spending is exclusive to particular person,
disclosure the nature of the assets provided and the cost thereof, the amount of rent paid or estimated at fair market value, fuel allowance, and other subsidies. Where personal drivers were allocated, a footnote disclosure explaining the amount of compensations made to drivers is provided; these compensations do not count toward compensations of the above beneficiaries.
Note 5: Refers to any salaries, allowances, severance pay, bonuses, incentives, travel allowances, special allowances, subsidies, accommodation, vehicles, in-kind benefits etc. that the director received in 2020 for assuming the role of a company employee (such as President, vice president, manager, or other employee).
If housing, company car and other means of transportation were provided or the spending is exclusive to particular person, disclosure the nature of the assets provided and the cost thereof, the amount of rent paid or estimated at fair market value, fuel allowance, and other subsidies. Where personal drivers were allocated, a footnote disclosure explaining the amount of compensations made to drivers is provided; these compensations do not count toward compensations of the above beneficiaries. Where salary expense is recognized according to IFRS2 - "Share-based Payment," the amount of which includes employee warrants, restricted employee shares, and subscription to cash issues.
Note 6: Referring to these directors who concurrently serve as employees (including concurrently serving as president, vice president, other managerial officers and employees) and revive employees’ remuneration (including shares and cash) in 2020; the amount of distributed employees’ remuneration approved by the Board of Directors shall be disclosed. On March 25, 2021, the Board of Directors approved to distribute the employees’ remuneration in cash for NT$26,907,259. The detailed cash amount distributed to each employee has not been resolved up to the publication date of the annual report; the distribution amount proposed is calculated based on the actual amount paid in 2019 proportionally.
Note 7: The disclosure includes all companies covered by the consolidated financial statements (including the Company), and represents total amount of compensation paid by all companies above to the Company's directors.
Note 8: Net profit after tax refers to the Company's net profit after tax of NT$304,498 thousand for 2020 (IFRSs were adopted, net profit after tax refers to the net profit after tax of the parent company-only financial report for the most recent year).
Note 9: The amount of compensation a director receives from business investments other than subsidiaries refers to any benefit, remuneration (including remuneration received as an employee, director, and supervisor), and professional service fee that the Company's director receives for serving as director, supervisor, or manager in business investments other than subsidiaries.
Note 10: The amount of pension actually paid to the Company's directors 2020 amounted to NT$0. The amount of severance pay and pension contribution expensed during the year was NT$145,000.
17 -

2. Compensation to the President and vice presidents

										December 31, 2020 Unit: NTD thousands; %	December 31, 2020 Unit: NTD thousands; %	December 31, 2020 Unit: NTD thousands; %	December 31, 2020 Unit: NTD thousands; %	December 31, 2020 Unit: NTD thousands; %
Title	Name	Salary (A) (Note 1)		Severance payment and pension (B)		Bonuses and allowances (C) (Note 2)		Employee remune		ration (D) (Note 3)		Sum of A, B, C and D as a percentage of net income (Note 7)		Compensation from parent company or business investments other than subsidiaries (Note 8)
		The Company	All companies included in the financial statements (Note 4)	The Company	All companies included in the financial statements (Note 4)	The Company	All companies included in the financial statements (Note 4)	The Company		All companies included in the financial statements(Note 4)		The Company	All companies included in the financial statements (Note 4)
								Amount paid in cash	Amount paid in shares	Amount paid in cash	Amount paid in shares
President	Will Chou	9,481	9,972	505	505	1,510	1,510	3,780	0	3,780	0	5.02%	5.18%	None
Vice President	Chao-Kun Peng
Vice President	Te-ChengLin
Vice President	Tai-HsiangHu
Vice President	Shao-RongLu
Vice President	Kuo-Wei Chiang

Compensation bracket table

	Compensation bracket table	Compensation bracket table
Range of remuneration to the Company's President and vice presidents	Name of President and vicepresidents
	The Company (Note 6)	All companies included in the financial statements(Note 7)E
Below NT$1,000,000	Kuo-Wei Chiang (Note 10)	Kuo-Wei Chiang (Note 10)
NT$1,000,000(inclusive)- NT$2,000,000(non-inclusive)	－	－
NT$2,000,000(inclusive)- NT$3,500,000(non-inclusive)	Chao-Kun Peng,Te-ChengLin,Tai-HsiangHu,Shao-RongLu	Chao-Kun Peng,Te-ChengLin,Tai-HsiangHu,Shao-RongLu
NT$3,500,000(inclusive)- NT$5,000,000(non-inclusive)	Will Chou	Will Chou
NT$5,000,000(inclusive)- NT$10,000,000(non-inclusive)	－	－
Total	6	6

Note 1: Refers to salaries, allowances, and severance pay made to the President and vice presidents in 2020.

Note 2: Refers to other compensations such as bonus, incentive, travel allowance, special allowance, subsidy, accommodation, corporate vehicle or other in-kind benefits made to the President and vice presidents in 2020. If housing, company car and other means of transportation were provided or the spending is exclusive to particular person, disclosure the nature of the assets provided and the cost thereof, the amount of rent paid or estimated at fair market value, fuel allowance, and other subsidies. Where personal drivers were allocated, a footnote disclosure explaining the amount of compensations made to drivers is provided; these compensations do not count toward compensations of the above beneficiaries. Where salary expense is recognized according to IFRS2 - "Share-based Payment," the amount of which includes employee warrants, restricted employee shares, and subscription to cash issues.
Note 3: Referring to the employees’ remuneration amount approved by the Board o f Directors to be distributed to the president and vice presidents in 2020 (shares and cash included). On March 25, 2021, the Board of Directors approved to distribute the employees’ remuneration for NT$26,907,259. The detailed remuneration amount distributed to each employee has not been resolved up to the publication date of the annual report; the distribution amount proposed is calculated based on the actual amount distributed in 2019 proportionally.

Note 4: Compensation is presented in aggregate of all amounts paid by all companies covered by the consolidated financial statements (including the Company) to the Company's President and vice presidents. Note 5: The amount of compensation paid by the Company to its President/vice presidents have been disclosed separately in ranges.

Note 6: The disclosure includes the sum of amounts paid by the consolidated entity (including the Company) to the Company's President and vice presidents. The names of President and vice presidents have been disclosed separately in ranges. Note 7: Net profit after tax refers to the Company's net profit after tax of NT$304,498 thousand for 2020 (IFRSs were adopted, net profit after tax refers to the net profit after tax of the parent company-only financial report for the most recent year). Note 8: The amount of compensation the President and vice presidents receive from business investments other than subsidiaries refers to any benefit, remuneration (including remuneration received as an employee, director, and supervisor), and professional service fee that the Company's President and vice presidents receive for serving as director, supervisor, or manager in business investments other than subsidiaries.

Note 9: The amount of pension actually paid to the Company's President and vice presidents in 2020 amounted to NT$0. The amount of pension contribution expensed during the year was NT$505,000. Note 10: Resigned on 2020/2/27.

18 -

3. Names of managers who received employee remuneration, and the amount entitled

December 31, 2020 Unit: NTD thousands; %

	Title	Name	Amount paid in shares	Amount paid in cash	Total	Total as a percentage of net income (%)
Managers	Chairman's Assistant	J.R. Deng	－	5,920	5,920	1.94
	President	Will Chou
	Vice President	Te-Cheng Lin
	Vice President	Chao-Kun Peng
	Vice President	Tai-Hsiang Hu
	Vice President	Shao-Rong Lu
	Assistant Vice President	Mei-Ling Chiu
	Assistant Vice President	Cheng Kung
	Assistant Vice President	Chia-Chun Yu
	Assistant Vice President	Feng-Kuan Chen
	Head of Accounting	Hsiao-Ping Li

Note 1: The Company's 2020 net profit after tax, NT$304,498 thousand yuan (IFRSs were adopted, net profit after tax refers to the net profit after tax of the parent company-only financial report for the most recent year), and the amount of employees’ remuneration distributed to managerial officers (shares and cash included). On March 25, 2021, the Board of Directors approved to distribute the employees’ remuneration for NT$26,907,259. The detailed remuneration amount distributed to each managerial officer has not been resolved up to the publication date of the annual report; the distribution amount proposed is calculated based on the actual amount distributed in 2019 proportionally.

Note 2: Pursuant to Letter No. Tai-Tsai-Cheng-3-0920001301, the role of manager covers the following positions:

(1) President and equivalent rank

(2) Vice president and equivalent rank

(3) Assistant vice president or equivalent rank

(4) Head of finance department

(5) Head of accounting department

(6) Any other authorized signatories involved in the Company's administrative affairs

(IV) Amount of compensation paid in the last 2 years by the Company and all companies included in the consolidated financial statements to the Company's non-independent directors, independent directors, President, and vice presidents, and their respective proportions to standalone net income, as well as the policies, standards, and packages by which they were paid, the procedures through which compensations were determined, and their association with business performance and future risks

Compensation paid to the Company's non-independent directors, independent directors, President, and vice presidents, and percentage relative to standalone net income, are shown below:
19 -

Title	20	20	19	19	20	20	20	20	Description
	Total compensation		Total as a percentage of net income (%)		Total compensation		Total as a percentage of net income (%)
	The Company	All companies included in the consolidated financial statements	The Company	All companies included in the consolidated financial statements	The Company	All companies included in the consolidated financial statements	The Company	All companies included in the consolidated financial statements	The company's net profit after tax for 2020 and 2019 were NT$304,498 thousand and NT$179,858 thousand respectively.
Non- independent directors	11,219	12,110	6.24	6.73	16,141	18,046	5.30	5.93
Independent Director	1,410	1,490	0.78	0.83	3,790	3,790	1.24	1.24
President and vice presidents (Note)	18,536	19,300	10.31	3.59	17,725	18,216	5.82	5.98

Note: For the 2020 distribution of employees’ remuneration, on March 25, 2021, the Board of Directors approved to distribute the employees’ remuneration for NT$26,907,259 (in cash); The detailed remuneration amount distributed to each managerial officer has not been resolved up to the publication date of the annual report; the distribution amount proposed is calculated based on the actual amount distributed in 2019 proportionally.

Compensation policies, standards, packages and procedures, and association with future risks and business performance:

The Company compensates directors based on their participation and contribution to the Company's operations; travel allowances, on the other hand, are granted in fixed amounts after taking into consideration the peer level. Compensation standards for the President, vice presidents, and managers are determined after taking into account their individual performance, contribution, and the market level.

Compensations to non-independent directors, independent directors, President, vice presidents, and managers

are determined in accordance with Articles 16 and 18 of the Articles of Incorporation and "Salary Determination Policy," "Board of Directors Performance Assessment Policy," and "Manager Performance Management Policy" after taking into account their participation in corporate operations. Compensations are subject to Remuneration Committee's review followed by board of directors' resolution. According to the Articles of Incorporation, profits concluded in a year are subject to director remuneration of no more than 5% and employee remuneration of 5%-15%. The amount of remuneration, once resolved by the board of directors, is presented during shareholder meeting.

Compensations to directors and managers are determined in a rational manner after taking into consideration occurrences such as moral risk event, loss of corporate image, improper internal management, fraud etc. as well as individual director’s/manager’s target accomplishments, profitability, efficiency, and contribution. Directors’ and managers’ compensation policy, system, standards, and structures are reviewed from time to time depending on organizational performance and prevailing regulations.

II. Corporate governance

(I) Functionality of the board of directors and performance evaluation

Functionality of the board of directors

A total of 6 (A) board meetings were held in 2020; below are directors' (including independent directors') attendance records:

Title	Name	Attendance in person (B)	In-person attendance rate (%)[B/A]	Remarks
Chairman	Bosco Foo	6	100	Re-elected
Director	Raymond Sheu	6	100	Re-elected
Director	J.R. Deng	5	83.33	Re-elected

20 -

Director	Ching-Ho Hsu	6	0	100	Re-elected
Director	Chi-Chao Yeh	5	0	83.33	June 14, 2018 Newly elected
Director	Chao-Hsiang Li	6	0	100	June 14, 2018 Newly elected
Independent Director	Tsung-Yen Lin	6	0	100	June 14, 2018 Newly elected
Independent Director	Ya-Hui Huang	6	0	100	Re-elected
Independent Director	Yao-Tsung Chiang	6	0	100	Re-elected
Other mandatory disclosures: I. For board of directors meetings that meet any of the following descriptions, state the date, session, the discussed motions, independent directors' opinions and how the Company has responded to such opinions: (I) Conditions described in Article 14-3 of the Securities and Exchange Act: The board of directors held a total of 6 meetings in 2020; details of resolution are explained in (XI) Major resolutions of board of directors meetings. All motions that involved the conditions described in Article 14-3 of the Securities and Exchange Act were passed as proposed without objection from any independent directors. (II) Any other documented objections or reservations raised by independent director against board resolution in relation to matters other than those described above: No objection or reservation was raised. II. Disclosure regarding avoidance of interest-conflicting motions, including the names of directors concerned, the motions, the nature of conflicting interests, and the voting process: 1. Motion: Lending to subsidiary - Keeper Technology, and endorsement/guarantee to subsidiary - Keeper Technology. Voting process:Stakeholders of this particular motion included Director Bosco Foo, Director Raymond Sheu, Director Ching-Ho Hsu, and Director J.R. Deng; all of whom had recused from voting, and the motion was passed as proposed without objection from remaining directors and independent directors present at the meeting upon inquiry by Independent Director Tsung-Yen Lin, who served as chairperson for the motion. Reason for recusal: Bosco Foo, Raymond Sheu, and J.R. Deng concurrently served as directors at Keeper Technology, whereas Ching-Ho Hsu concurrently served as supervisor at Keeper Technology. 2. Motion: Allocation of employee remuneration for managers and managers' annual performance assessment. Voting process:Stakeholders of this particular motion included Director J.R. Deng, President Will Chou,Head of Finance Mei-LingChiu,and Head of AccountingHsiao-PingLi;all of

21 -

whom had recused from voting, and the motion was passed as proposed without objection from attending directors and independent directors upon inquiry by the chairperson. Reason for recusal: The motion concerned the interests of all above members.

Motion: Adjustments to managers' duties, salaries, and compensation.
Voting process:Stakeholder of this particular motion included Director (CEO) J.R. Deng, who had recused from voting, and the motion was passed as proposed without objection from attending directors and independent directors upon inquiry by the chairperson.
Reason for recusal: The motion concerned the interests of the above member.
III. Cycle, duration, scope, method and detail of board performance self (peer) evaluation, and overall execution are explained in the following chart:

		Execution of board performance	Execution of board performance	evaluation
Assessment cycle	Assessment duration	Scope of assessment	Assessment method	Assessment details
Once a year	Performance of the board of directors between January 1 and December 31, 2020, was assessed	The entire board	Board of directors internal self-assessment	Performance assessment of the board of directors covers the five main aspects below 1. Level of participation in the Company's operations. 2. Improvement of board decision quality. 3. Composition of the board of directors. 4. Election and ongoing education of directors. 5. Internal control.
		Individual director members	Director self- assessment	Directors' individual performance assessment covers the following six main aspects 1. Comprehension of the Company's targets and missions. 2. Directors' duty awareness. 3. Level of participation in the Company's operations. 4. Management and communication of internal relations. 5. Professionalism and ongoing education of directors. 6. Internal control.
		Functional committees	Director self- assessment	Assessment of functional committee performance covers the following five main aspects 1. Level of participation in the Company's operations. 2. Awareness towards duties of the functional committee. 3. Improvements to the quality of decisions made by functional committees. 4. Composition of the functional committee and selection of committee members. 5.Internalcontrol.

IV. Enhancements to the functionality of board of directors in the current and most recent year, and progress of such enhancements:
During election of the 12th board of directors held in 2018, the Company elected 3 independent directors and assembled an Audit Committee to replace supervisors for enhanced corporate governance. The Company continues to support the new corporate governance roadmap, and places great emphasis on enforcing stakeholders' interests, board of directors' responsibilities, and information transparency.
In 2020 and up until the publication date of annual report, all decisions that have to be supported by the Audit Committee or resolved by the board of directors under The Company Act or Articles 14-3 and 14-5 of the Securities and Exchange Act have been agreed by the Audit Committee, submitted for board of directors' resolution, and executed accordingly.
The Company amended its "Illegal, Unethical, and Dishonest Conduct Reporting Policy" and "Business Integrity Procedures and Behavioral Guidelines" during the 16th meeting of the 12th board of directors held on March 26, 2020 to conform with the amended version of "Sample Template for XXX Co., Ltd." published by the authority on February 13, 2020.
The Company amended its "Corporate Governance Code of Conduct" during the 16th meeting of the 12th board held on March 26, 2020 to conform with the amended version of "Corporate Governance Best-Practice Principles for TWSE/TPEX Listed Companies" published by the authority on February 13, 2020. This amendment was reported during the 2020 shareholder meeting.
The Company amended its "Regulations Governing Procedure for Board of Directors Meetings" during the 23rd meeting of the 12th board held on March 25, 2021 to conform with the amended version of "Sample Template of Regulations Governing Procedure for Board of Directors Meetings for XXX Co., Ltd." published by the authority on June 3, 2020.

Note: Required attendance rate (%) was calculated based on the number of meetings required to attend during active duty.

22 -
(II) Key Tasks and Operation of the Audit Committee:

The Company assembled an Audit Committee consisting entirely of 3 independent directors following a reelection of its 12th board of directors. The purpose of the Audit Committee is to assist the board of directors in supervising the quality and integrity of the Company's accounting, auditing, financial reporting, and financial control processes.

The Audit Committee convened 5 meetings in 2020. Matters that are subject to review under the

Committee's authority include:

Establishment or amendment of internal control system according to Article 14-1 of the Securities and Exchange Act.
Evaluation over the effectiveness of internal control system.
Establishment or amendment of asset acquisition and disposal procedures, derivative trading procedures, external party lending procedures, external party endorsement and guarantee procedures, and other procedures of major financial or business consequences according to Article 36-1 of the Securities and Exchange Act.
Matters concerning directors' personal interests.
Major asset or derivative transactions.
Major lending, endorsement or guarantee to an external party.
Offering, issuance or private placement of securities with equity characteristics.
Appointment, dismissal, or compensation of financial statement auditors.
Appointment and dismissal of finance, accounting, or internal audit managers.
Business report, earnings appropriation or loss reimbursement proposal.
Other issues deemed material by the Company or the authority.

Review of financial reports

Assessment of effectiveness of the internal control system

The Audit Committee evaluates the effectiveness of the Company's internal control system, policy, and procedures (including control measures on financial, operational, risk management, information security, and compliance aspects), and reviews audit execution reports prepared by internal audit units on a quarterly basis. Audit Committee considers the design and execution of internal control system to be effective and is able to provide assurance with regards to the Company's business results; target accomplishment; reliability, timeliness, and transparency of reported financial information; and compliance with relevant laws.

Appointment of CPAs

The Audit Committee bears the duty to supervise the independence of the certifying accounting firm, to ensure the fairness of the financial statements. Generally, other than tax-related services and itesm

23 -

specifically approved, the certifying accounting firm must not provide other services to the Company. To ensure the independence of the certifying accounting firm, the Company has established the evaluation form of independence by referring the Certified Public Accountants’ Ethical Guideline Journal number 10 – the “integral, fair, objective and independent” to evaluation the independence, professionalism, and competence of CPAs, and if they are related parties of the Company, or in relationship of business or financial interests with the Company, and vice versa. On March 25, 2021, the 23rd meeting of the Board of Directors, 12th Term deliberated and approved that the CPAs, Su-Li Fang and Cheng-Chih Lin, from Deloitte Taiwan, have conformed to the criteria of independence evaluation.

Functionality of the Audit Committee

An Audit Committee was assembled following the director re-election held on June 14, 2018. The Audit Committee convened a total of 5 meetings (A) in 2020; independent directors' attendance records are summarized below:

below:
Title	Name	Attendance in person (B)	Proxy attendance	In-person attendance rate (%)[B/A]	Remarks
Independent Director	Tsung-Yen Lin	5	0	100	June 14, 2018 Newly elected
Independent Director	Ya-Hui Huang	5	0	100	Re-elected
Independent Director	Yao-Tsung Chiang	5	0	100	Re-elected
Other mandatory disclosures: I. For Audit Committee meetings that concern any of the following, state the date and session of board of directors' meeting, the motions discussed, the Audit Committee's resolutions, and how the Company has handled Audit Committee's opinions. (I) Issues listed in Article 14-5 of the Securities and Exchange Act: All motions concerning the issues listed in Article 14-5 of the Securities and Exchange Act were passed by the Audit Committee as proposed without objection; see Chart 1 below for details. (II) Other than those described above, any resolutions unsupported by the Audit Committee but passed by more than two-thirds of directors. Disclosure regarding avoidance of interest-conflicting motions, including the names of directors concerned, the motions, the nature of conflicting interests, and the voting process: None. II. Disclosure regarding avoidance of interest-conflicting motions, including the names of independent directors concerned, the motions, the nature of conflicting interests, and the voting process: None. III. Communication between independent directors and internal/external auditors (e.g. discussions concerning the Company's financial and business affairs, the method of communication used, and the outcome). 1. The chief internal auditor engages independent directors in regular discussions at least once a quarter to report on the implementation of internal audit and internal control systems. Meetings may also be called on an ad-hoc basis in the occurrence of major event. 2. The Company's annual financial reports are subject to approval by more than 50% of Audit Committee members before submitting to the board of directors for final resolution. Prior to reviewing financial reports, the Audit Committee would engage financial statement auditors in productive communication through meetings and other available channels (such as: telephone, fax, e-mail etc.).

Note: In-person attendance rate (%) is calculated based on the number of Audit Committee meetings held and the number of in-person attendances

made during active duty.

24 -

Chart 1

Chart 1
Date	Motion	Resolution	Company's response to Audit Committee's opinions
The 11th meeting of the 1st committee 2020.3.26	1. 2019 "Internal Control System Effectiveness Review" and issuance of the Company's "Declaration of Internal Control System" 2. The Company's 2019 financial statements and consolidated financial statements 3. The Company's 2019 business report 4. The Company's 2019 earnings appropriation	Passed as proposed without objection from attending members when inquired by the chairperson	Passed as proposed without objection from attending independent directors
The 12th meeting of the 1st committee 2020.5.12	1. Review of the Company's 2020 first-quarter consolidated financial statements 2. Lending of NT$10 million from the Company to subsidiary - Keeper Technology Co., Ltd. 3. Adjustment to the size of right-of-use of land to be sold by subsidiary - Yuanmao Opto-electronic Technology (Wuhan) Co., Ltd.
The 13th meeting of the 1st committee 2020.7.16	Extended unpaid leave of the chief internal auditor
The 14th meeting of the 1st committee 2020.8.11	1. Review of the Company's 2020 second-quarter consolidated financial statements 2. Proposal to forgo distribution of the Company's 2020 first- half earnings 3. Proposal to offer endorsements/guarantees for subsidiary - "Keeper Technology Co., Ltd."for a sum of NT$20 million
The 15th meeting of the 1st committee 2020.11.12	1. Review of the Company's 2020 third-quarter consolidated financial statements 2. Establishment of the Company's 2021 internal audit plan 3. Proposal to cancel endorsements/guarantees for subsidiary - "Keeper Technology Co., Ltd." totaling NT$20 million 4. Proposal to cancel endorsements/guarantees for subsidiary - "Yuanmao Opto-electronic Technology (Wuhan) Co., Ltd." totaling US$3.5 million
The 16th meeting of the 1st committee 2021.03.25	1. 2020 "Internal Control System Effectiveness Review" and issuance of the Company's "Declaration of Internal Control System" 2. Amendments to the internal control system 3. Amendments to the Internal Audit Implementation Rules 4. The Company's 2020 financial statements and consolidated financial statements 5. The Company's 2020 business report 6. The Company's 2020 earnings appropriation 7. Evaluation and review of CPA’s professional service fees and independence

25 -

(III) Corporate Governance Status, Deviation with Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies and Reasons

Assess criteria	Operation	Operation	Operation	(III) Deviation and causes of deviation from Corporate Governance Best-Practice Principles for TWSE/TPEX Listed Companies
	Yes	No	Summary
I. Has the Company established and disclosed its corporate governance principles based on "Corporate Governance Best- Practice Principles for TWSE/TPEX Listed Companies"?			The Company has formulated the Corporate Governance Best Practice Principles, and the Company has always respected the rights of shareholders, disclosed major Company information, regularly disclosed financial information as required by relevant regulations, and strengthened the functions of the Board of Directors to promote the operation of corporate governance. Please refer to the Company’s website "Investors Section" or "Corporate Governance Section" of MOPS.	No material deviation is found.
II. Shareholding structure and shareholders' interests (I) Has the Company implemented a set of internal procedures to handle shareholders' suggestions, queries, disputes, and litigations? (II) Is the Company constantly informed of the identities of its major shareholders and the ultimate controller? (III) Has the Company established and implemented risk management practices and firewalls for companies it is affiliated with? (IV) Has the Company established internal policies that prevent insiders from trading securities against non-public information?	   		II. Shareholding structure and shareholders' interests (I) To ensure the interests of shareholders, the Company has appointed the spokesperson, the AVP of Financial Department to handle all shareholder suggestions, doubts and disputes. (II) The related matters of the Company are handled by the AVP of Financial Department serving as the spokesperson, and Fubon Securities' stock affairs agency department, and the stock affairs agency regularly reports the changes in the equity of directors and managerial officers. (III) The Company has established the specific financial operations procedures writing pursuant to the “Operational Procedures of Transaction among the Group Entities, Certain Companies and Related Parties” to regulate business relations with affiliates, and has also established the "Operational Procedures for MonitoringSubsidiaries" to implement the the	No material deviation is found.

26 -

Assess criteria	Operation	Operation	Operation	(III) Deviation and causes of deviation from Corporate Governance Best-Practice Principles for TWSE/TPEX Listed Companies
	Yes	No	Summary
			Company's risk control mechanism and measures specific to the subsidiaries, and approved by the Board of Directors. (IV) The Company has established the "Managerial Operational Procedures for Handling Internal Material Information and Preventing Insider Trading" to prevent insider trading, avoid improper information leakage, protect investors and safeguard the interests of the Company.
III. Composition and responsibilities of the board of directors (I) Has the board devised and implemented policies to ensure diversity of its members?			III. Composition and responsibilities of the board of directors (I)Board diversity policy: According to Corporate Governance Best-Practice Principles, the board of directors of a company shall be structured based on its size and major shareholders' holding position.There should be five director seats or more, adjustable depending on the company's practical requirements. Board members should be diversified in a manner that supports the Company's operations, business activities, and growth requirements, provided that the number of directors who concurrently hold managerial positions do not exceed one-third of the board. The diversification policy should include, but is not limited to, the following two principles: 1. Background and value: Gender, age, nationality, culture etc.	No material deviation is found. No material deviation is found.

27 -

Assess criteria			Operation	(III) Deviation and causes of deviation from Corporate Governance Best-Practice Principles for TWSE/TPEX Listed Companies
	Yes	No	Summary
			2. Knowledge and skills: Career background (e.g. law, accounting, industry, finance, marketing, or technology), professional skill, and industry experience. (II) Management, goals, and implementation of diversity policy: 1. All board members shall possess the knowledge, skills, and characters needed to exercise their duties. For optimal corporate governance, the board of directors as a whole shall possess the following skills: operational judgment, accounting and financial analysis, business administration, crisis management, industry knowledge, global market vision, leadership, and decision-making. 2. The Company adopts diversity goals to ensure that members of the board do comply with legal requirements. The Company does not limit or distinguish directors' eligibility by gender, age, or culture, but instead focuses primarily on whether they possess the professional skills and knowledge needed to perform duties. Possession of professional skills and knowledge accounts for at least 20% of diversity goals. 3. The current board of directors comprises 9 members (including 6 non-independent and 3 independent directors); 11% of whom hold concurrent position as employee and 11% (one) of whom is female. Board members are evenly distributed across 51-60, 61-70, and 71-80 age groups (33% each). In terms of professional capacity, 67% of whom possess expertise in operational management while 33% of whom specialize in areas including law, finance/accounting, and risk management. The board has 3 independent directors that make up 33% of total board members; one of the independent directors has served for 3 years or less, whereas the other 2 independent directors have served for 4-6 years. 4. Members of the board of directors include: Independent Director Ya-Hui Huang - former judge and lawyer; Director Chao-Hsiang Li - full-time lecturer of law; Directors Bosco Foo, J.R. Deng, and Raymond Sheu - with strongleadership,operational,administrative,and	No material deviation is found.

28 -

Assess criteria	Operation	Operation	Operation	(III) Deviation and causes of deviation from Corporate Governance Best-Practice Principles for TWSE/TPEX Listed Companies
	Yes	No	Summary
(II) Apart from the Remuneration Committee and Audit Committee, has the Company assembled other functional committees at its own discretion? (III) Has the Company established a set of policies and assessment tools for evaluating board performance, and conducted performance evaluation on a yearly basis? Are performance evaluation results reported to the board of directors and used as reference for compensation, remuneration, and nomination decisions?	 		crisis management skills and comprehensive industry knowledge, Director Deng in particular worked formerly in R&D in ITRI Materials Lab Optoelectronic Semiconductors Section and currently assumes concurrent position as employee; Director Ching-Ho Hsu - certified financial specialist and former banker, entrepreneur with extraordinary track records of success, winner of the first Yunlin Top 10 Entrepreneurs, founding chairman of Australia-Taiwan Trade Association, winner of Outstanding Entrepreneur of the Republic of China, former consultant for the Ministry of Economic Affairs, an active contributor to charity and Taiwan's international influence, and a person of extraordinary global vision; Director Yao-Tsung Chiang - a veteran in business administration formerly served as head of chief engineer of Department of Rapid Transit Systems, former chairman of China Airlines, Kaohsiung Mass Rapid Transit, China Steel, and China Steel Chemical, and current chairman of Taiwan High Speed Rail; Director Chi-Chao Yeh - chairman of Chung Ho Spinning and founder of Hong Chien Construction with extensive business administration expertise; and Independent Director Tsung-Yen Lin (recently joined in 2018) - founder of Tsung-Yen Lin Accounting Firm, MBA of Eastern New Mexico University, former credit investor in an American bank, licensed accountant in New York State and senior account examiner in a local firm, auditor/chief accountant of an accounting firm in Taiwan, and a trained professional of law and accounting with extensive exposure to computer, IT, semiconductor, and other fields of the electronics industry. Overall, the board of directors offers strong leadership and high levels of professionalism, independence, and diversity. (III) The Company has assembled a Remuneration Committee according to regulations since December 6, 2011. The Remuneration Committee comprises 3 members and convenes meetings on a regular basis. During the election held in 2018, the Company assembled its Audit Committee consisting entirelyof the 3 independent directors,and will assemble other

29 -

Assess criteria	Operation	Operation	Operation	(III) Deviation and causes of deviation from Corporate Governance Best-Practice Principles for TWSE/TPEX Listed Companies
	Yes	No	Summary
(IV) Are external auditors' independence assessed on a regular basis?			functional committees as needed by laws or practical requirements in the future. (IV) The Company's Remuneration Committee will establish board performance evaluation policies in the future, and will be conducting performance self-assessments for the board, functional committees, and individual directors in December each year. 1. Board performance assessment covers several aspects including board's participation in the Company's operations, improvement of board's decision quality, the board's composition, election and ongoing education of board members, and enforcement of internal control. 2. Performance assessment for functional committees covers several aspects including committees' participation in the Company's operations, awareness to duties, improvement of committee's decision quality, composition and member selection, and enforcement of internal control. 3. Director individual performance assessment covers several aspects including director's awareness towards the Company's goals and missions, awareness to duties, level of participation in the Company's operations, maintenance of internal relations and communication, professionalism and ongoing education, and enforcement of internal control. 4. Self performance assessments of the board of directors, functional committees, and individual directors all concluded with an Excellent rating in 2020. Outcome of the assessment was reported during the board of directors meeting held on February 2, 2021. Outcome of performance evaluation shall be taken into consideration when electing or nominating directors. Performance evaluation of individual directors is taken into consideration when determining compensation for individual directors. (V) The Company's CPAs belongs to one of the four major international accounting firms, and these who have directly or indirectlyconflict of interests are avoided, to fullyadhere	No material deviation.

30 -

Assess criteria	Operation	Operation	Operation	(III) Deviation and causes of deviation from Corporate Governance Best-Practice Principles for TWSE/TPEX Listed Companies
	Yes	No	Summary
			respect the spirit of justice, rigor, honesty and independence. 1. The finance usit evaluates the independence of CPAs every year, obtains the independence statement from the CPAs complying with the Certified Public Accountants’ Ethical Guideline Journal number 10 – the “integral, fair, objective and independent,” including the independence, professionalism, and competence evaluation of CPAs, and if they are related parties of the Company, or in relationship of business or financial interests with the Company, and vice versa. The evaluation results has been resolved by the Board of Directors on March 26, 2020 for reference. 2. For the same CPA not to perform the certification service for more than consecutive seven years, and to adapt to the needs of the internal adjustments of Deloitte Taiwan, from the fourth quarter of 2019, the certification CPAs, Cheng-Chih Lin and Ming-Yuan Chung, were replaced by Su-Li Fangand Cheng-Chih Lin.	No material deviation is found.
IV. Has the TWSE/TPEX listed company allocated adequate number of competent corporate governance staff and appointed a corporate governance officer to oversee corporate governance affairs (including but not limited to providing directors/supervisors with the information needed to perform their duties, assisting directors/supervisors with compliance issues, convention of board meetings and shareholder			The Company has assigned one of its departments to concurrently oversee corporate governance affairs and handle matters relating to board of directors meetings, shareholder meetings, change of company registration, and preparation of board/shareholder meeting minutes. Furthermore, the Company expects to appoint a corporate governance officer before June 2021.	No material deviation is found.

31 -

Assess criteria	Operation	Operation	Operation	(III) Deviation and causes of deviation from Corporate Governance Best-Practice Principles for TWSE/TPEX Listed Companies
	Yes	No	Summary
meetings, and preparation of board/shareholder meeting minutes)?
V. Has the Company provided proper communication channels and created dedicated sections on its website to address corporate social responsibility issues that are of significant concern to stakeholders (including but not limited to shareholders, employees, customers and suppliers)?			The Company maintains open communication channel with counterparty banks and other creditors, shareholders, employees, customers, and suppliers, and respects their rightful interests. The Company has created a stakeholders section on its website since October 2015 to help suppliers comply with environmental, safety, and health requirements of relevant laws and policies throughout the procurement process. Customers are able to communicate issues of concern and submit annual satisfaction surveys through customer service mailbox and sales representatives. Other stakeholders such as shareholders, banks, local profit-seeking organizations, and government institutions are able to obtain financial information and major announcements from the Company through the corporate website, Market Observation Post System, and industry news reports. http://www.tyntek.com.tw/responsibility.php	No material deviation is found.
VI. Does the Company engage a share transfer agency to handle shareholder meeting affairs?			The Company has engaged the Share Transfer Department of Fubon Securities Co., Ltd., which carries out share transfer services in accordance with laws and the internal control system.	No material deviation is found.
VII. Information disclosure (I) Has the Company established a website that discloses financial, business, and corporate governance-related information?			VII. Information disclosure (I) The Company has assigned dedicated personnel to maintain and update its website, where financial and corporate governance information is published and made accessible to shareholders and the general public.	No material deviation is found.

32 -

Assess criteria	Operation	Operation	Operation	(III) Deviation and causes of deviation from Corporate Governance Best-Practice Principles for TWSE/TPEX Listed Companies
	Yes	No	Summary
(II) Has the Company adopted other means to disclose information (e.g. English website, assignment of dedicated personnel to collect and disclose corporate information, implementation of a spokesperson system, and broadcasting of investor conferences via the company website)? (III) Does the Company publish and make official filing of annual financial report within two months after the end of an accounting period, and publish/file Q1, Q2 and Q3 financial reports along with monthly business performance before the required due dates?			The Company has set up its own website (http://www.tyntek.com.tw). (II) The Company has assigned dedicated personnel to gather and disclose information relating to the Company, and has implemented a spokesperson system to make sure that any information capable of influencing shareholders' and stakeholders' decisions is disclosed in a timely and adequate manner. The Company holds or is invited to investor seminars on a yearly basis. All information concerning investor seminars is placed on the corporate website. (III) The Company prepares and files financial reports before deadline at the end of each year and quarter; it also makes monthly announcements on sales revenues, derivative transactions, external party lending/endorsement/guarantee, major transactions with related parties, and financial as well as operation-related information in a timelymanner.
VIII. Does the Company have other information that enables a better understanding of the Company's corporate governance practices (including but not limited to employee rights, employee welfare, investor relations, supplier relations, stakeholders' interests, continuing education of directors/supervisors, implementation of risk management policies and risk measurements, implementation of customer policy, and liability insurance for directors and supervisors)?			1. The Company's management values the interests of employees. In addition to the establishment of the Employee Welfare Committee, various activities are held regularly, and employees are encouraged to participate in various trainings, with regular health checks arranged. For details, please refer to the annual report "Labor Relations." Regarding the investor relations, supplier relations, and the rights of stakeholders, the implementation are handled pursuant to the Company’s internal control and management procedures, and the Companyfulfills the corporate social responsibility pursuant	No significant deviation from Corporate Governance Best-Practice Principles for TWSE/TPEX Listed Companies

33 -

Assess criteria	Operation	Operation	Operation
	Yes	No	Summary
			to laws and regulations. 2. The Company honestly disclosed the Company’s information as required by laws, to protect the basic interests of investors and fulfill the company's responsibilities to shareholders. 3. The Company does not mandatorily require directors and independent directors to take courses of professional knowledge. However, directors and independent directors actively participated in relevant courses organized by institutions every year. Please refer to Item 3, (VIII) Other information material to the understanding of corporate governance within the Company. 4. The implementation of risk management policies and risk measurement standards adopts hierarchical responsiblility, and will be reported to the Board of Directors any time in case of special circumstances. 5. The communication channels between the Company and customers and suppliers are smooth with nice interactions. 6. The directors and independent directors of the Company observe the principle of ethical corporate management, and there is no litigation or violation to any laws. The liability insurance has been purchased for the directors and independent directors. On March 26, 2020, it was reported in the 16th meetingof the Board of Directors,12th Term.
IX. Please state the improvements made to the items in the corporate governance evaluation results issued by the Corporate Governance Center of the Taiwan Stock Exchange Co., Ltd., and indicate the enhancement and improvement measures for the items not yet improved 1. The Company will refer to the International Bill of Human Rights, to formulate policies to protect human rights and specific management program, and disclose such on the Company's website.

34 -

Assess criteria	Operation	Operation	Operation	(III) Deviation and causes of deviation from Corporate Governance Best-Practice Principles for TWSE/TPEX Listed Companies
	Yes	No	Summary
2. The Company will upload the agenda handbooks, annual reports for the shareholders meetings and annual financial statements in English on MOPS in 2021. 3. The Company expects to complete the appointment of a corporate governance officer before June 30, 2021, who will be responsible for corporate governance related matters. 4. In the future, the Company will set up functional committees other than the statutory ones depending on laws or practical needs. 5. In the future, the Company will formulate succession plans for board members and important management based on needs, and disclose their operations on the Company's website or in annual reports.

35 -
(IV) Composition, responsibilities, and functionality of the Remuneration Committee:

The Company first assembled its Remuneration Committee on December 6, 2011 according to Paragraph 1, Article 14-6 of the Securities and Exchange Act as a means to enforce corporate governance and support board functions. Service of the 4th committee began June 28, 2018 and ends June 13, 2021; the Committee has convened a total of 13 meetings up until the publication date of annual report.

As of the end of December 2020, the Company's Remuneration Committee consisted of 3 independent directors. The Remuneration Committee Charter can be found on Market Observation Post System, under Corporate Governance section.

Information of Remuneration Committee members

Designation (Note 1)	Criteria Name	Having more than 5 years work experience and the following qualifications	Having more than 5 years work experience and the following qualifications	Having more than 5 years work experience and the following qualifications	Compliance of independence (Note 2)	Compliance of independence (Note 2)	Compliance of independence (Note 2)	Compliance of independence (Note 2)	Compliance of independence (Note 2)	Compliance of independence (Note 2)	Compliance of independence (Note 2)	Compliance of independence (Note 2)	Compliance of independence (Note 2)	Compliance of independence (Note 2)	Number of positions as Remuneration Committee member in other public companies	Remarks (Note 3)
		Lecturer (or above) of commerce, law, finance, accounting, or any subjects relevant to the Company’s operations in a public or private tertiary institution	Judge, prosecutor, lawyer, accountant, or holder of national exam or professional qualification relevant to the Company’s operations	Commercial, legal, financial, accounting or other work experiences required to perform the assigned duties	1	2	3	4	5	6	7	8	9	10
Independent Director	Ya-Hui Huang	-	v	v	v	v	v	v	v	v	v	v	v	v	1	Not applicable
Independent Director	Yao-Tsung Chiang	-	-	v	v	v	v	v	v	v	v	v	v	v	1
Independent Director	Tsung-Yen Lin	-	v	v	v	v	v	v	v	v	v	v	v	v	1

Note 1: The 2 persons mentioned above concurrently served as independent directors and remuneration committee members at the Company's subsidiaries.

Note 2: Members who meet the following conditions at any time during active duty and two years prior to the date of appointment will have a "  " placed in the corresponding boxes.

(1) Not employed by the Company or by any of its affiliated companies.
(2) Not a director or supervisor of the Company or any of its affiliated companies (this restriction does not apply to concurrent independent director positions in the Company, its parent company, subsidiary, or another subsidiary of the parent that is compliant with the Act or local laws).
(3) Does not hold more than 1% of the Company's outstanding shares in their own names or under the name of spouse, underage children, or proxy shareholder; nor is a top-10 natural-person shareholder of the Company.
(4) Not a manager listed in (1), or a spouse, 2nd-degree relative or closer or 3rd-degree direct relative or closer to any personnel listed in (2) or (3).
(5) Not a director, supervisor, or employee of any corporate shareholder that: 1. holds 5% or more of the Company's outstanding shares; 2. is a top-5 shareholder; or 3. appoints director/supervisor representative in the Company according to Paragraph 1 or 2, Article 27 of The Company Act. (This excludes concurrent independent director positions held within the Company and its parent/subsidiary, or in other subsidiary of the parent company that are compliant with the Act or local laws).
(6) Not a director, supervisor, or employee of any other company that controls directorship in the Company or where more than half of total voting rights are controlled by a single party (this excludes concurrent independent director positions held within the Company and its parent/subsidiary, or in other subsidiary of the parent company that are compliant with the Act or local laws).
(7) Does not assume concurrent duty as chairman, president or equivalent role, and is not a director, supervisor, or employee of another company or institution owned by spouse. (This excludes concurrent independent director positions held within the Company and its parent/subsidiary, or in other subsidiary of the parent company that are compliant with the Act or local laws.)
(8) Not a director, supervisor, manager, or shareholder with more than 5% ownership interest in any company or institution that has financial or business relationship with the Company (however, this excludes concurrent independent director positions held within companies or institutions that hold more than 20% but less than 50% outstanding shares of the Company, or in the Company's parent or subsidiary, or in another subsidiary of the parent that is compliant with the Act or local laws).
36 -
(9) Not a professional who provides audit service, or commercial, legal, financial, accounting or related services for an accumulated sum of less than NT$500,000 in the last 2 years, to the Company or its affiliate, nor is an owner, partner, director, supervisor, or manager, or the spouse of any of the above, of a sole proprietorship, partnership, company, or organization that provides such services to the Company or its affiliated companies. This excludes roles as Remuneration Committee, Public Acquisition Review Committee or M&A Special Committee member appointed in accordance with the Securities and Exchange Act or Business Mergers And Acquisitions Act.
(10) Does not meet any of the conditions stated in Article 30 of The Company Act.

Note 3: Members who are identified as directors have complied with Paragraph 5, Article 6 of "Regulations Governing the Appointment and Exercise of Powers by the Remuneration Committee of a Company Whose Stock is Listed on the Stock Exchange or Traded Over the Counter."

Functionality of the Remuneration Committee

I. The Company's Remuneration Committee consists of 3 members.

II. Duration of service: from June 28, 2018 until June 13, 2021. The Remuneration Committee held 5 meetings (A) in the last year; details of members' attendance are as follows:

Title Name No. of in-person attendance (B) Proxy	attendance Percentage of in-person attendance (%) (Ｂ/Ａ) Remarks
Convener Ya-Hui Huang 5	0 100 %
Committee Yao-Tsung Chiang 5	Re-elected; date on board: 2018/6/28 0 100 %
member
Committee Tsung-Yen Lin 5	0 100 % Newly elected; date on board: 2018/6/28
member
Other mandatory disclosures:
I. In the event where the Remuneration Committee's proposal is rejected	or amended in a board of directors meeting, please describe the date and session of the
meeting, details of the motion, the board's resolution, and how the Company had handled the Remuneration Committee's opinions (describe the differences and
reasons, if any, should the board of directors approve a solution that was more favorable than the one proposed by the Remuneration Committee): None.
II. Should any committee member object or express reservations to the resolution made by the Remuneration Committee, whether on-record or in writing, please state
the date and session of the meeting, details of the motion, the entire members' opinions, and how their opinions were addressed: None.
III. Discussions and resolutions of the Remuneration Committee in 2020:

III. Discussions and	resolutions of the Remuneration Committee in 2020:
			Company's response to
Remuneration Committee	Motion	Resolution	Remuneration Committee's
			opinions
	1. Review of the Company's 2018 second allocation of employee remuneration for	Passed as proposed without objection	Passed as proposed without
	managers.	from attending members when inquired	objection from attending
	2. Review of the Company's 2019 director and manager performance assessment	by the chairperson.	directors.
The 7th meeting of the	results.
4th committee	3. Proposal to amend the Company's "Manager Year-end Bonus Standards and
(2020.01.14)	Structure."
	4. Review of 2019 year-end bonus standards for managers.
	5. Review of the Company's 2020 salary/compensation for directors and
	managers.
		Passed as proposed without objection	Passed as proposed without
The 8th meeting of the		from attending members when inquired	objection from attending
4th committee	1. Review of 2019 director and employee remuneration.	by the chairperson.	directors. To report in the
2020.03.26			upcoming shareholder meeting
			as required by law.
The 9th meeting of the	1. Review of the Company's 2018 third allocation of employee remuneration for	Passed as proposed without objection	Passed as proposed without

37 -

4th committee 2020.05.08	managers.	from attending members when inquired by the chairperson.	objection from attending directors.
The 10th meeting of the 4th committee 2020.07.16	1. Review of managers' subscription to treasury stock	Passed as proposed without objection from attending members when inquired by the chairperson.	Passed as proposed without objection from attending directors.
The 11th meeting of the 4th committee 2020.08.10	1. Review of the Company's 2019 employee remuneration for managers. 2. Review of the Company's 2020 first-quarter director and manager performance assessment results. 3. Review of adjustments to managers'duties, salaries, and compensation.	Passed as proposed without objection from attending members when inquired by the chairperson.	Passed as proposed without objection from attending directors.
IV. Duties of the Remuneration Committee: The Committee shall exercise the care of a prudent manager to fulfill the following duties, and offer recommendations for discussion by the board of directors. However, issues concerning directors' compensation are to be resolved by the board of directors according to Article 15 of the Articles of Incorporation. 1. Regular review of the Charter and offering of amendment recommendations. 2. Establishment and regular review of annual and long-term performance targets for directors and managers of the Company, as well as their salary/compensation policy, system, standard, and structure. 3. Regular assessment on the accomplishment of performance targets by the Company's directors and managers, and to determine details and amounts of individual compensation. The Committee shall abide by the following principles when performing duties mentioned in the preceding paragraph: 1. Ensure that the Company's compensation arrangements comply with all relevant laws and are capable of attracting top talents. 2. Directors' and managers' performance shall be evaluated and compensated in comparison to industry peers after taking into consideration a number of factors including the time committed by each individual, the responsibilities borne, accomplishment of individual targets, performance in other job roles, level of compensation the Company had paid for roles of equivalent grade in recent years, accomplishment of the Company's short-term and long-term targets, the Company's financial position, effect of individual performance on corporate performance, and association with future risks. 3. The compensation should not entice directors and managers into seeking high returns by acting outside the Company's risk appetite. 4. Short-term performance incentives to directors and senior executives and the timing of variable salary payments/compensations shall be set according to industry characteristics and the Company's business nature. 5. Committee members can not discuss or vote on their own salary/compensation packages. The term "compensation" mentioned in the two paragraphs above includes cash compensations, warrants, share-based profit sharing, retirement benefits, severance pay, allowances of all kinds, and any substantive incentives. This definition should be consistent with the scope of directors' and managers' compensation stated in "Regulations Governing Information to be Published in Annual Reports of Public Companies." In the event that salary/compensation to a subsidiary's directors and managers is subject to the subsidiary's approval and resolution by the Company's board of directors, the compensation proposal will have to be recommended by the Committee first and then presented to the board of directors for discussion.

38 -

(V) Fulfillment of Social Responsibilities and Deviation and Causes of Deviation from Corporate Social Responsibility Best Practice Principles for TWSE/TPEX Listed Companies:

Companies:
Assess criteria	Operation						Deviation and causes of deviation from Corporate Social Responsibility Best- Practice Principles for TWSE/TPEX Listed Companies
	Yes	No	Summary
I. Has the Company conducted risk assessment on environmental, social, and corporate governance issues that are relevant to its operations, and implemented risk management policies or strategies based on principles of materiality? (Note 3) (Note 3) Materiality principle refers to environmental, social and corporate governance issues that are of material impact to the Company's investors and stakeholders.			I. The Company conducts reviews in accordance with ISO 9001/ SGS IATF16949. Relevant departments are instructed to perform yearly assessments on the issue of "risk and opportunity management," and analyze potential or occurred issues as well as stakeholders' demands and expectations. These findings help devise response strategies and set goals for the future. The Company complies with relevant laws, rules, systems, and policies, and is dedicated to fulfilling corporate social responsibilities by participating in community rebuild. It organizes charitable events from time to time as a means to give back to the local community.				No material deviation is found.
II. Does the Company have a unit that specializes (or is involved) in CSR practices? Is the CSR unit run by senior management and does the unit report its progress to the board of directors?			II. The Company has assigned internal departments to take part in corporate social responsibilities that are relevant to their duties/functions, and coordinates and supervises fulfillment of social responsibilities at the organizational level.				The Company will also adopt practices in line with "Corporate Social Responsibility Best Practice Principles for TWSE or TPEx Listed Companies" and relevant laws if legally or practically required to do so in the future.
III. Environmental issues (I) Has the Company developed an appropriate environmental management system, given its distinctive characteristics?			III. Environmental issues (I) The Company has obtained certification for international quality standards (ISO9001, IATF16949), environmental management system (ISO14001), occupational safety and health systems (ISO45001 and QC080000 IECQ HSPM), and SONY Green Partner. It implements practices strictly in accordance with the abovementioned quality and environmental management systems. Name of certification Date acquired (year/month/day) Expiry (year/month/day) ISO9001：2015 2020/10/25 2023/10/24 IATF 16949：2016 2020/12/25 2023/12/24 QC080000 2019/7/26 2022/7/25 SONY Green Partner 2019/7/4 2021/6/30 ISO14001:2015 2020/1/6 2023/1/6				No material deviation is found.
				Name of certification	Date acquired (year/month/day)	Expiry (year/month/day)
				ISO9001：2015	2020/10/25	2023/10/24
				IATF 16949：2016	2020/12/25	2023/12/24
				QC080000	2019/7/26	2022/7/25
				SONY Green Partner	2019/7/4	2021/6/30
				ISO14001:2015	2020/1/6	2023/1/6

39 -

Assess criteria				Operation	Operation		Deviation and causes of deviation from Corporate Social Responsibility Best- Practice Principles for TWSE/TPEX Listed Companies
	Yes	No			Summary
(II) Is the Company committed to achieving efficient use of resources, and using renewable materials that produce less impact on the environment? (III) Does the Company assess potential risks and opportunities associated with climate change, and undertake measures in response to climate issues? (IV) Does the Company maintain statistics on greenhouse gas emission, water usage, and total waste volume in the last two years, and implement policies aimed at reducing energy, carbon, greenhouse gas, water and waste?	  		ISO45001:2018 2018/12/15 2022/12/14 CNS45001:2018 2018/12/15 2022/12/14 (II) The Company enforces waste reduction, waste sorting, and waste recycling policies as means to increase resource utilization and mitigate environmental impacts, and thereby preserve Earth's resources. (III) The Company has been conducting preliminary assessments to identify the risks and opportunities of climate change since 2018. Given the impacts climate change has on business operations, the Company will systematically adopt climate actions in the following directions: (1) Implement carbon reduction plans from a life cycle perspective. Adopt practices including: green manufacturing and green procurement. (2) Climate change management: A carbon and energy task force spearhead by the President will be assembled to implement climate change policies and practices. (3) Risks and opportunities: The Company defines transition risks and physical risks in accordance with guidelines of TCFD (Task Force on Climate-related Financial Disclosures); it examines the materiality of risks and opportunities on a yearly basis, and evaluates financial impacts and explores operational strategies at appropriate times. (IV) The Company pays constant attention to how climate change affects its operations, and devises greenhouse gas reduction, energy conservation, carbon reduction, and water conservation strategies to minimize impacts of its operational activities on the natural environment. As a member of TOSIA, the Company is committed to mitigating global warming, satisfying customers'	ISO45001:2018	2018/12/15	2022/12/14	No material deviation is found.
				CNS45001:2018	2018/12/15	2022/12/14

40 -

Assess criteria	Operation	Operation	Operation	Deviation and causes of deviation from Corporate Social Responsibility Best- Practice Principles for TWSE/TPEX Listed Companies
	Yes	No	Summary
			environmental protection requirements, and acting in line with global trends as part of its corporate social responsibilities. 1、 Outcomes of the 2018 and 2019 greenhouse gas survey are as follows: The Company reported total green house gas emission of 22,261.13 (ton CO2e) in 2018; emission from FCs used in production (including CF4, C2F6, and SF6 greenhouse gases) totaled 8,789.2 (ton CO2e) in 2018. The Company reported total green house gas emission of 19,427 (ton CO2e) in 2019; emission from FCs used in production (including CF4, C2F6, and SF6 greenhouse gases) totaled 6,414 (ton CO2e) in 2019. 2、 Statistics on water usage and total waste volume for 2018, 2019, 2020 is shown below: Comparison of water usage: (unit: tonnes) 2020 2019 2018 695,789 589,987 644,090 Total waste volume: (unit: tonnes) 2020 2019 2018 357.685 234.70 333.74 3、 RTO system for air pollution control - The Company has switched from using activated carbon-based equipment to using RTO system for more efficient treatment of VOC, which in turn reduces emission of pollutants and lessens impact on the environment. 4、 Use of energy not only depletes Earth's resources, but also generates carbon dioxide that causes the greenhouse effect. For this reason, the Company has set its goals to reduce energy usage by 1% in the hope of reducing greenhouse gas emission and its impact on the environment. In addition to exploring and introducing energy-conservation technologies, the Company also adopts energy conservation plans for its	No material deviation is found.

41 -

Assess criteria	Operation	Operation	Operation	Deviation and causes of deviation from Corporate Social Responsibility Best- Practice Principles for TWSE/TPEX Listed Companies
	Yes	No	Summary
			production facilities to more directly reduce the volume of energy consumed. Furthermore, the Company implements energy conservation measures in office and common areas and promotes them through awareness and training campaigns to help employees develop proper awareness and habits toward energy conservation and greenhouse gas reduction. Energy conservation measures taken in 2021: a. Servicing and maintenance of chillers continued at plant premises, which are expected to save 369,700kWh of power per year b. The number of regional air handling units in operation was reduced, saving 1,368.75kWh of power per year. c. Inverters were installed at cooling towers, saving 220,000kwh of power per year d. The Company applied for ESPC subsidy in 2021, and will invest NT$60 million into replacing outdated equipment for a 20% energy-saving yield. 5、 The Company closely monitors water usage and implements water conservation measures to ensure more efficient use of limited water resources. Reuse of water resource also lessens the strain on fresh water supply in Miaoli and Hsinchu areas. The Company has made water conservation, energy conservation, and carbon reduction a part of its environment, safety, and health policies. Plant administration and safety/environmental protection units have been assigned to explore water and energy conservation solutions and outline feasible solutions. Posters, signs, and announcements are used to promote energy and water conservation awareness in production activities as well as office spaces. Water conservation measures taken in 2021: a. The watering system has been reconfigured to operate manuallyinstead of automaticallyto reduce water usage.	No material deviation is found.

42 -

Assess criteria	Operation	Operation	Operation	Deviation and causes of deviation from Corporate Social Responsibility Best- Practice Principles for TWSE/TPEX Listed Companies
	Yes	No	Summary
			(8.4CMD365=3,066m3/year) b. Conductivity of water discharged from cooling towers has been adjusted from 1,200us/cm to 1,500us/cm to reduce water usage of the cooling tower. (21.5CMD365=7,847.5m3/year) c. Volume of water dispensed from wash basins has been reduced to cut down on water usage. (2.5CMD365=912m3/year) d. Conductivity of water discharged from alkali scrubber has been adjusted from 1,100us/cm to 1,200us/cm to reduce water usage. (6.9CMD365=2,518.5m3/year) 6、 The Company enforces waste management in accordance with the "Waste Disposal Act" and "Businesses Subject to Submission of Industrial Waste Disposal Plan." The Industrial Waste Disposal Plan submitted by the Company is subject to the authority's approval and has to be published according to the government's rules. Furthermore, a dedicated waste disposal unit has been created specifically to handle waste disposal according to relevant laws and rules of the Environmental Protection Bureau, and to make online reports on the volume of waste produced, stored, disposed, and treated. The Company also engages contractors certified by the Environmental Protection Administration to dispose and treat waste in the manners outlined in its disposal plan. In the future, the Company will continue exploring ways to conserve resources, reduce waste, promote recycling/reuse, and thereby lessen its impact on the environment. Through waste reduction and resource recycling and reuse, the Company hopes to contribute its part towards sustainability of the Earth's environment.
IV. Social issues (I) Has the Company developed its policies and procedures in accordance with laws and International Bill of Human Rights?			IV. Social issues (I) The Company complies with Labor Standards Act and obeys "The United Nations Global Compact," "Universal Declaration of Human Rights," and human rights conventions throughout	No material deviation is found.

43 -

Assess criteria	Operation	Operation	Operation	Deviation and causes of deviation from Corporate Social Responsibility Best- Practice Principles for TWSE/TPEX Listed Companies
	Yes	No	Summary
(II) Has the Company developed and implemented reasonable employee welfare measures (including compensation, leave of absence and other benefits), and appropriately reflected business performance or outcome in employees' compensations? (III) Does the Company provide employees with a safe and healthy work environment? Are employees trained regularly on safety and health issues? (IV) Has the Company implemented an effective training program that helps employees develop skills over their career? (V) Has the Company complied with laws and international standards with respect to customers' health, safety, and privacy, marketing, and labeling in all products and services offered, and implemented consumer protection policies and complaint procedures?	   		the world. It has a "Human Rights Policy" in place to enforce various principles such as prohibition against child labor, prohibition against forced labor, creation of healthy and safe workplace, respect for workplace human rights, implementation of diverse communication channels, information security, and maintenance of mental-physical health and work-life balance among employees. All human rights issues and practices have been disclosed on the Company's website. (II) The Company has work rules and personnel management policies in place to outline terms of employment from basic salary, work hours, leave of absence, pension benefits, Labor/National Health Insurance benefits, to occupational hazard remedies. All of which are compliant with the Labor Standards Act. An Employee Welfare Committee consisting of employee-elected members has been assembled to oversee matters concerning employee welfare. The Company compensates each employee for the responsibilities undertaken, their contributions to the Company, and overall performance. Level of compensation is positively correlated with operational performance, and details such as employees' average salary adjustment are disclosed on Market Observation Post System. (III) In addition to providing employees with a safe and healthy work environment complete with protective gears, the Company also organizes unscheduled safety and health training and arranges complimentary checkups on general healthy and special hazards on a regular basis. The Company held a series of safety training in 2020 covering: fire safety, use of fire extinguishers, first aid, automated server room fire extinction, and general knowledge on dangerous and hazardous substances. (IV) The Company conducts annual surveys on employees' training requirements, and designs training programs in line with corporate strategies that help employees develop the knowledge andprofessional skills needed to advance through their careers.	No material deviation is found.

44 -

Assess criteria	Operation	Operation	Operation	Deviation and causes of deviation from Corporate Social Responsibility Best- Practice Principles for TWSE/TPEX Listed Companies
	Yes	No	Summary
(VI) Has the Company implemented a supplier management policy that regulates suppliers' conducts with respect to environmental protection, occupational safety and health or work rights/human rights issues, and tracked suppliers' performance on a regular basis?			Employees are able to check their training progress online using the HR system. (V) The Company maintains productive communication with customers, and has a customer service department in place to handle customers' complaints and grievances in a transparent and effective manner. (VI) The Company's supplier management policy specifies a number of environment/safety/health management evaluations that have to be performed as part of supply chain management. Details on the implementation progress have been disclosed on the Company's website under the "Investor" -> "Supplier Management Policy" section. 1. The Company selects its business (supply) partners depending on the location of work activity, the raw materials involved for production, and serviceability of the underlying work. Each partner has to pass the Company's review to ensure that they are capable of delivering top-quality products and services to customers. 2. The Company communicates with suppliers and contractors regularly on environmental, safety, and health issues, during which suppliers and contractors are encouraged to take steps toward improving environmental protection, safety, and health performance. The Company adopts a focused and voluntary approach with respect to the management of its contractors. By allowing certain degree of autonomy, the Company hopes to raise contractors' sense of responsibility and promote the safety culture as well as respect for skills and characters across the industry. 3. As described above, the Company requires all contractors involved in high-risk operations to have workers undergo 6 hours of safety and health training in addition to a "hazard awareness" course before commencing work at plant premise. All contractors are required to wearprotectivegears	No material deviation is found.

45 -

Assess criteria	Operation	Operation	Operation	Deviation and causes of deviation from Corporate Social Responsibility Best- Practice Principles for TWSE/TPEX Listed Companies
	Yes	No	Summary
			and take precautionary measures when entering plant premise. 4. The Company makes ongoing efforts to improve supply chain management, and requires/encourages suppliers and contractors to adopt more robust practices with respect to environment, safety, and health. Through regular interaction, self-assessment, management audit, and sharing of experiences between management personnel, the Company strengthens its partnership with suppliers and contractors in pursuit of greater contributions to the society through improved environment, safety, and health performance. 5. The Company protects employees' human rights as part of its corporate social responsibilities by adhering to the human rights principles conveyed in "The United Nations Global Compact," "Universal Declaration of Human Rights" and international human rights conventions. The Company requires all business partners to issue declarations not to engage in any action that violates human rights, so that insiders and outsiders are equally entitled to fair and dignified treatment. Outcomes of the 2020 supplier worker human rights assessment have been disclosed on the Company’s website.
V. Does the Company prepare corporate social responsibility report or any report of non-financial information based on international reporting standards or guidelines? Are the abovementioned reports supported by assurance or opinion of a third-party certifier?			V. (I) The Company has not prepared a corporate social responsibility report, but is still actively involved in the enforcement of sound corporate governance, sustainable practices, and charity. (II) The Company complies with laws by disclosing corporate information as well as material information over Market Observation Post System, and makes them available on the corporate website(http://www.tyntek.com.tw)forpublic access.	No material deviation is found.
VI. If the Company has established CSR principles in accordance with "Corporate Social Responsibility Best Practice Principles for TWSE/TPEX Listed Companies," please describe its current practices and any deviations from the Best Practice Principles: Not applicable.
VII. Other information useful to the understandingof corporate social responsibilities:

46 -

Assess criteria	Operation	Operation	Operation	Deviation and causes of deviation from Corporate Social Responsibility Best- Practice Principles for TWSE/TPEX Listed Companies
	Yes	No	Summary
Below is an explanation of the Company's social services and charity involvements (1) On April 22, 2020, the Company donated NT$500,000 to Taiwan Centers for Disease Control, Ministry of Health and Welfare, as a gesture of gratitude to frontline medical workers for their contribution in preventing the global spread of COVID-19. Furthermore, the Company assisted in the implementation of disease control measures and promotion of protective measures as part of its social responsibilities. (2) On May 6, 2020, the Company donated face masks and medical supplies to disease control workers of "Miaoli County Government Health Department," and was awarded a certificate of appreciation. (3) On May 11, 2020, the Company donated face masks and supplies to "Ching Tsao Hu Elementary School, East District, Hsinchu City," and was awarded a certificate of appreciation. (4) On June 4, 2020, the Company participated in an event organized by "Hsinchu Blood Center," which the employees supported by donating blood and were awarded a certificate of appreciation. (5) On August 26, 2020, the Company purchased Mid-autumn gift boxes prepared by "Saint Joseph Social Welfare Foundation," and in doing so created learning opportunities and supported healthylivingforpersons with disability. The Companyreceived a certificate of appreciation for thisgesture.

47 -

(VI) Enforcement of ethical Corporate Management, Deviation and Causes of Deviation from Ethical Corporate Management Best Practice Principles for TWSE/TPEX-Listed Companies:

Companies:
Assess criteria	Operation(Note 1)				(III) Deviation and causes of deviation from Ethical Corporate Management Best-Practice Principles for TWSE/TPEX Listed Companies
	Yes	No		Summary
I. Establish the ethical corporate management policies and programs (1) Does the company set the policy of ethical corporate management approved by the board of directors and express its commitment to the policies and practices of ethical corporate management in its regulations and in the external documents, and do the board of directors and the management actively implement the management policies? (2) Has the company set up a program for the prevention of unethical conducts as well as analyzing and assessing the business activities with high unethical risk, and include conducts specified in Article 7, paragraph 2 of the “Ethical Corporate Management Best Practice Principles for for TWSE/TPEx Listed Companies”? (3) Has the company set up procedures, conduct guidelines and a disciplinary and complaint-filing system for violations for implementation and reviewed and amended such programs periodically?	  		I. Establish the ethical corporate management policies and programs (I) The Company observes "Ethical Corporate Management Best Practice Principles" and "Code of Ethical Conduct," approved by the Board of Directors, and insists the principle of integrity and honesty, and complies with various laws and regulations. The management team has established a code of ethical conduct for directors, independent directors and managerial officers, as a basis for implementing ethical corporate management. (II) In order to prevent any unethical conduct, the Company requires all employees to declare conflicts of interest or possible conflicts of interest with business ethics concerns. The Company also requires suppliers/partners to provide written commitments that they will not engage in any illegal business activities and will not provide improper benefits or bribes to Company’s personnel. The Company provides an integrity mailbox as a channel for complaints from suppliers, partners and customers, which are handled impartially by the dedicated unit. (III) The company has established the "Ethical Management and Guidelines for Conduct" and "Employee’s Working Rules" for self-disciplining based on the principle of integrity and honesty, to prevent the occurrence of unethical conducts, while strictly prohibiting employees from accepting any improper gifts and entertainment. These are communicated to new recruits. If there is any violation of the law, it shall be handled in accordance with the employee rewards and punishment measures, and shall be reviewed and amended based on the actual situation		No material deviation is found.

48 -

Assess criteria	Operation(Note 1)	Operation(Note 1)	Operation(Note 1)	Operation(Note 1)	(III) Deviation and causes of deviation from Ethical Corporate Management Best-Practice Principles for TWSE/TPEX Listed Companies
	Yes	No		Summary
			from time to time.
II. Implementation of ethical corporate management (I) Does the company assess the ethical record of its business partner, and stipulate the terms of ethical conduct in the contract with the business partner? (II) Has the company set up a dedicated (or concurrent) corporate ethical promotion unit under the board of directors which regularly reports to the board on its work(at least once a year)? (III) Has the company formulated policies to prevent conflicts of interest, provided appropriate channels for statements and implemented them? (IV) Has the Company established an effective accounting system and internal control system for the implementation of ethical corporate, which is checked by the internal auditing unit on a regular basis or audited by external auditors? (V) Does the company hold regular internal and external training on ethical corporate management?	    		II. Implementation of ethical corporate management (I) The Company’s business activities are in compliance with the Company Act, the Securities Exchange Act, the Political Donations Act, the Anti-Corruption Act, and other relevant laws and regulations. The Company clearly specifies the authorization management measures to restrict the transaction authority, supervise and manage. The regular reports are made to the Board of Directors. (II) The Company has set up a dedicated unit under the Board of Directors to promote ethical corporate management, for promoting a sound management policy of ethical corporate management, and report to the Board of Directors on a regular basis every year. (III) In order to avoid damages to the Company's interests, the Employee’s Working Rules and corporate governance principles clearly stipulate the related policies to prevent the transmission of benefits and conflicts of interest; employees may express their opinions to the Company through the management unit. The company also formulates the "Employee’s Code of Conduct" and regularly conducts education and promotion for them to understand the regulations to be followed and prevent unethical conducts. Directors are also prohibited from participating in discussions and voting on matters to be resolved pursuant to the "Regulations Governing Procedure for Board of Directors Meetings," and are not allowed to exercise other directors’ voting rights as a proxy. (IV) The Company has established an effective accounting and internal control system,and fullyadopts digitized		No material deviation is found. No material deviation is found.

49 -

Assess criteria	Operation(Note 1)	Operation(Note 1)	Operation(Note 1)	Operation(Note 1)	(III) Deviation and causes of deviation from Ethical Corporate Management Best-Practice Principles for TWSE/TPEX Listed Companies
	Yes	No		Summary
			operations, management functions be articulated level by level, for the internal audit unit to regularly implement the effective operation of the Company's internal system in accordance with the audit plan. The CPAs review the implementation of the Company's internal control system every year. (V) In order to implement ethical corporate management, the Company discloses the "Ethical Corporate Management Best Practice Principles" and the "Ethical Management and Guidelines for Conduct" on its website, and provides internal and external trainings on ethical corporate management issues for directors, managerial officers and employees. All efforts are made for the protection of trade secrets, intellectual property rights, and information security, to avoid the leakage of the Company’s important information. Related trainings in 2020 are as following: There were 131 employees in the "Employee ‘s Code of Conduct/Personal Information Protection," for total 65.5 hours. There were 34 employees in "Introduction to the Legal System of Enterprise Trade Secrets" for total 68 hours. There were two employees in the "Continuing Education Course for Accounting Officer of the Issuers, Securities Firms, and Stock Exchanges" for total 24 hours. There were six employees in "The latest IFRS Q&A and the analysis for common deficiencies of financial statements, the latest profit-seeking enterprise income tax reform and review practice analysis" for 18 hours. There were eight employees in "IFRS 9 Financial Instruments & Enhancement of Self-Preparation Ability of Financial Statements," for 24 hours.

50 -

Assess criteria	Operation(Note 1)	Operation(Note 1)	Operation(Note 1)	Operation(Note 1)	(III) Deviation and causes of deviation from Ethical Corporate Management Best-Practice Principles for TWSE/TPEX Listed Companies
	Yes	No		Summary
			There was one employee in "Audit Skills and Practice" for total six hours. There was one employee in "Practical operation after the implementation of the Company Act, and analysis of the latest interpretation letter" for total six hours There was one employee in "How to detect and prevent concealed fraud signs and discussion of real cases" for total six hours. There was one employee in "Analysis of the latest domestic corporate governance trends and the analysis for implementation of the control environment" for total six hours. There were three employees in the "Information SecurityCourse" for total 33.5 hours.
III. The operation status of reporting system (I) Has the company set up specific reporting and reward systems and a convenient reporting channel, and does the company assign appropriate personnel to investigate the person being reported? (II) Has the company set up standard investigation procedures and a related confidentiality mechanism for the matter being reported?	 		III. The operation status of reporting system (I) The Company has regulations for handling reports of illegal and immoral or unethical conducts, and employees may report any illegal conducts or infringement of the Company's interests to the dedicated unit at any time to prevent the occurrence of unethical conducts. An "anti- corruption reporting mailbox" channel has been established to accept reports from employees, suppliers, partners, and customers through this mailbox. The reporting letter may be with name or anonymous, but at least the address, phone number, and e-mail address through which the whistleblower may be contacted, and must contain clear facts, evidence, or clues. The whistleblowing letter will be solely responsible for the ethical corporate management team and the audit officer to investigate in a confidential manner. After the facts are fully investigated, the investigator will prepare an investigation report and carryout internal disciplinary		No material deviation is found.

51 -

Assess criteria	Operation(Note 1)	Operation(Note 1)	Operation(Note 1)	Operation(Note 1)	(III) Deviation and causes of deviation from Ethical Corporate Management Best-Practice Principles for TWSE/TPEX Listed Companies
	Yes	No		Summary
(III) Does the company take measures to protect the informant from improper treatment?			actions or prosecution. (II) The Company implements confidential operations in accordance with the established procedures for the handling of reports of illegal, immoral or unethical conducts and the provisions of rewards and punishments regulations, as well as the cases. (III) The Company has the measures to protect whistleblowers’ confidentiality through the procedures for handling of reports of illegal, immoral or unethical conducts and rewards andpunishments regulations
IV. Enhance information disclosure Does the company disclose the contents of its Ethical Corporate Management Best Practice Principles and the effectiveness on its website and MOPS?			The Company discloses the ethical corporate management philosophy, code of conducts, and related principles of corporate governance.		No material deviation is found.
V. If the company has its own Ethical Corporate Management Best Practice Principles in accordance with the "Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies", please describe the difference between them: The Company has established the Ethical Corporate Management Best Practice Principles, and conducting the operating activities based on the following principles: 1. Avoid engaging in acts that violate unfair competition; 2. Truly fulfill tax obligations; 3. Anti-bribery and corruption, and establish an appropriate management system; 4. Enterprise donations must comply with internal management regulations,as the basis for implementingthe ethical corporate management.
VI. Other important information that helps to understand the company's ethical corporate management operation (such as the company's review and revision of the company's Ethical Corporate Management Best Practice Principles, etc.): Manufacturers in business relationships are required to sign a letter of commitment to ethics, integrity and confidentiality, and the promise note of code of conducts for the Company’s personnel engaged in various businesses, to comply with the Company’s employees’ code of conducts. An unethical conducts by the Company’s personnel may be reported to the dedicated of the Company anytime,so that the employees fullyunderstand the Company’s determination to ethical corporate management and to strengthen trainings.

52 -
(VII) If the Company has established corporate governance principles or other relevant guidelines, references to such principles must be disclosed:
The Company has implemented the following policies in accordance with "Corporate Governance Best-Practice Principles for TWSE/TPEX Listed Companies":
- (1) Corporate Governance Code of Conduct
- (2) Shareholder Meeting Conference Rules
- (3) Regulations Governing Procedure for Board of Directors Meetings
- (4) Directors Election Policy
- (5) Asset Acquisition and Disposal Procedures
- (6) Endorsement and Guarantee Procedures
- (7) External Party Lending Procedures

(8) Subsidiary Supervision and Management Policy

(9) Related Party and Group Affiliate Transaction Procedures

(10) Seal Management Policy

(11) Acting Duty Policy
(12) Manager Authority Division Rules
(13) Financial and Non-financial Information Management Policy
(14) Material Insider Information Procedures
(15) Director, Supervisor, and Manager Ethical Behavior Guidelines
(16) Business Integrity Code of Conduct
(17) Business Integrity Procedures and Behavioral Guidelines
(18) Ethical Behavior Guidelines
(19) Standard Operating Procedures for Resolving Directors' Requests
(20) Illegal, Unethical, and Dishonest Conduct Reporting Policy
(21) Board of Directors Performance Assessment Policy
Methods of inquiry: The Company's financial, business, and corporate governance information has been disclosed on corporate website http://www.tyntek.com.tw/; corporate governance-related policies and rules can be found on Market Observation Post System http://mops.twse.com.tw/.

(VIII) Other information material to the understanding of corporate governance within the Company:

The Company has notified all directors, managers, and employees of its "Material Insider Information Procedures" to facilitate proper handling of material insider information. These procedures have also been published on the Intranet to ensure compliance from all employees, and thereby avoid violation and occurrence of insider trading.
To ensure compliance, all new directors, managers, and insiders are given a copy of "Director Handbook" and "Notes on Insider Shareholding and Related
53 -

Regulations" when reporting to duty.

3. Directors', supervisors', and managers' participation in corporate governance-related training in 2020:

Title	Name	Name of course/hours	Organizer
Chairman	Bosco Foo	Sustainable Corporate Management - ESG/3 hours Insider Trading Prevention and Insider Regulations/3 hours	Taiwan Corporate Governance Association Taiwan Corporate Governance Association
Director	Raymond Sheu	Sustainable Corporate Management - ESG/3 hours Insider Trading Prevention and Insider Regulations/3 hours	Taiwan Corporate Governance Association Taiwan Corporate Governance Association
Director	J.R. Deng	Sustainable Corporate Management - ESG/3 hours Insider Trading Prevention and Insider Regulations/3 hours	Taiwan Corporate Governance Association Taiwan Corporate Governance Association
Director	Chi-Chao Yeh	Sustainable Corporate Management - ESG/3 hours Insider Trading Prevention and Insider Regulations/3 hours	Taiwan Corporate Governance Association Taiwan Corporate Governance Association
Director	Ching- Ho Hsu	Sustainable Corporate Management - ESG/3 hours Insider Trading Prevention and Insider Regulations/3 hours	Taiwan Corporate Governance Association Taiwan Corporate Governance Association
Director	Chao- Hsiang Li	Sustainable Corporate Management - ESG/3 hours Insider Trading Prevention and Insider Regulations/3 hours	Taiwan Corporate Governance Association Taiwan Corporate Governance Association
Independent Director	Tsung- Yen Lin	2020 Insider Trading Prevention and Insider Share Trading Seminar/3 hours Corporate Governance 3.0 Sustainability Roadmap Summit for Listed Companies/3 hours Sustainable Corporate Management - ESG/3 hours Insider Trading Prevention and Insider Regulations/3 hours	Securities & Futures Institute Taiwan Stock Exchange Corporation Taiwan Corporate Governance Association Taiwan Corporate Governance Association
Independent Director	Ya-Hui Huang	Sustainable Corporate Management - ESG/3 hours Insider Trading Prevention and Insider Regulations/3 hours	Taiwan Corporate Governance Association Taiwan Corporate Governance Association
Independent Director	Yao- Tsung Chiang	Directors' Responsibilities and Risk Management under the Latest Corporate Governance Roadmap/3 hours Corporate Governance in Taiwan/3 hours Intellectual Property Management from Board of Directors' Perspective/3 hours	Securities & Futures Institute Taiwan Corporate Governance Association Securities & Futures Institute

Attainment of mandatory certification by personnel involved in financial information transparency:

Name of certification	Count
Certified Internal Auditor (CIA)	2
Certification in Control Self- Assessment (CCSA)	2

54 -

(IX) Implementation of the internal control system

Declaration of Internal Control System

TYNTEK Corporation Declaration of Internal Control System

Date: March 25, 2021

The internal control system of the year 2020, according to the result of self-assessment is thus stated as follows:

I. The Company acknowledges that the implementation and maintenance of internal control system is the responsibility of Board of Directors and management, and the Company has established such system. The internal control system is aimed to reasonably assure that the goals such as the effectiveness and the efficiency of operations (including profitability, performance and protection of assets), the reliability of financial reporting and the compliance of applicable law and regulations are achieved.
II. The internal control system has its innate restriction. An effective internal control system can only ensure the foregoing three goals are achieved; nevertheless, due to the change of environment and conditions, the effectiveness of internal control system will be changed accordingly. However, the internal control system of the Company has self-monitoring function and the Company will take corrective action once any defect is identified.
III. The Company judges the effectiveness of design and implementation for the internal control system, pursuant to criteria of effectiveness for the internal system specified in the “Regulations Governing Establishment of Internal Control Systems by Public Companies” (hereinafter “the Regulations”). The criteria for internal control adopted by “Regulations” are, based on the process of management control, for classifying the internal control into five elements: 1. Control environment; 2. Risk assessments; 3. Control activities; 4. Information and communication; and 5. Monitoring activities Each element also includes a certain number of items. For the foregoing items, refer to “Regulations”.
IV. The Company has adopted the aforesaid criteria for internal control to evaluate the effectiveness of design and execution of internal control system.
V. Based on the above-mentioned result of evaluation, the company suggests that the internal control system, including the design and execution of internal control relating to the effectiveness and efficiency of operation, the reliability of financial reporting the compliance of applicable law and regulations has been effective on December 31, 2020, and they can reasonably assure the aforesaid goals have been achieved.
VI. The Declaration will be the main content for annual report and prospectus and will be disclosed publicly. If the above contents have any falsehood and concealment, it will involve in the liability as mentioned in Article 20, 32, 171 and 174 of Securities and Exchange Act.
VII. This Declaration has been approved by the meeting of Board of Directors on March 25, 2021, and those nine directors in presence all agreed at the contents of this statement, with no one had dissent.

TYNTEK Corporation

Chairman: Bosco Foo

President: Will Chou

55 -
CPA's review on internal control system: None.
(X) Penalties imposed against the Company for regulatory violation, or penalties against insiders for violation of internal control system in the most recent year up until the publication date of annual report; describe areas of weakness and any corrective actions taken: None.
(XI) Major resolutions passed in shareholder meetings and board of directors meetings held in the last year up until the publication date of this annual report:
Major resolutions passed in shareholder meetings and the execution progress

Date of meeting	Major resolutions	Execution progress
2020/6/23	(1) Acknowledgment of 2019 year-end accounts. (2) Passed amendments to "Shareholder Meeting Conference Rules."	(1) Resolution passed during the 2020 shareholder meeting. (2) Resolution passed during the 2020 shareholder meeting.
2. Major resolutions of board of directors meetings
Date of meeting	Major resolutions and execution
The 12th board The 15th meeting 2020/1/14	Passed the Company's 2018 second allocation of employee remuneration for managers Passed review of the Company's 2019 board of directors and manager performance assessment results. Passed amendments to the Company's "Manager Year-end Bonus Standards and Structure" Passed 2019 year-end bonus standards for the Company's managers Passed 2020 salary/compensation for the Company's directors and managers
The 12th board The 16th meeting 2020/3/26	Passed distribution of 2019 director and employee remuneration Approved the Company's 2019 financial statements and consolidated financial statements Approved the Company's 2019 business report Approved the Company's 2019 earnings appropriation proposal Approved the change of financial statement auditor (due to internal adjustment) starting from the 4th quarter of 2019 Passed assessment of financial statement auditors' independence Passed amendments to the Company's "Shareholder Meeting Conference Rules" Passed amendments to the Company's "Corporate Governance Code of Conduct" Passed amendments to the Company's "Business Integrity Procedures and Behavioral Guidelines" Passed amendments to the Company's "Illegal, Unethical, and Dishonest Conduct Reporting Policy" Passed amendments to the Company's "Policy on Transfer of Repurchased Shares to Employees" Passed the 2019 "Internal Control System Effectiveness Review" and issuance of the Company's "Declaration of Internal Control System" Passed the Company's 2020 operational goals and budget Passed acknowledgment of managers' dismissal Passed the decision to apply for credit facilities with financial institutions Passed to buy back shares of the Company to be transferred to employees Passed the date, time, venue, and agenda of the Company's 2020 shareholder meeting Passed details concerning acceptance of shareholders' proposals for the Company's 2020 annualgeneral meeting
The 12th board The 17th	Approved the Company's 2020 first-quarter consolidated financial statements Passed amendments to the Company's "Policy on Transfer of Repurchased Shares to

56 -

Date of meeting	Major resolutions and execution
meeting 2020/5/12	Employees" Approved issuance of customs endorsement/guarantee Approved lending from the Company to subsidiary - Keeper Technology Co., Ltd. Passed the decision to apply for credit facilities with financial institutions Passed the Company's 2018 third allocation of employee remuneration for managers Passed adjustment to the size of right-of-use of land to be sold by subsidiary - Yuanmao Opto-electronic Technology (Wuhan) Co., Ltd. Set baseline date for the Company's 2020 dividends
The 12th board The 18th meeting 2020/7/16	Passed the transfer of the Company's 2020 6th share buyback to employees Approved managers' subscription to treasury stock
The 12th board The 19th meeting 2020/8/11	Approved the Company's 2020 second-quarter consolidated financial statements Approved to forgo distribution of the Company's 2020 first-half earnings Passed amendments to the Company's "Audit Committee Charter" Passed the decision to apply for credit facilities with financial institutions Passed allocation of 2019 employee remuneration for managers Passed the Company's 2020 first-half manager performance assessment results Passed adjustments to managers' duties, salaries, and compensation Passed appointment of director representative for subsidiary - "Keeper Technology Co., Ltd." Approved endorsement/guarantee from the Company to subsidiary - Keeper Technology Co.,Ltd.
The 12th board The 20th meeting 2020/11/12	Approved the Company's 2020 third-quarter consolidated financial statements Approved the Company's "2021 internal audit plan" Approved cancellation of financing endorsement/guarantee from the Company to subsidiary - "Keeper Technology Co., Ltd." Approved cancellation of financing endorsement/guarantee from the Company to subsidiary - "Yuanmao Opto-electronic Technology (Wuhan) Co., Ltd." Passed the decision to apply for credit facilities with financial institutions Passed the dismissal of manager Feng-Kuan Chen
The 12th board The 21st meeting 2021/2/2	Approved amendments to the Company's "Remuneration Committee Charter" Passed review of the Company's 2020 board of directors and manager performance assessment results. Passed 2020 year-end bonus standards for the Company's managers Passed 2021 salary/compensation for the Company's directors and managers
The 12th board 22nd Meeting 2021/3/16	Approved the election of the Directors, 13th Term Passed the date, time, venue, and agenda of the Company's 2021 shareholder meeting Passed details concerning acceptance of shareholders' proposals for the Company's 2021 annualgeneral meeting
The 12th board 23rd Meeting 2021/3/25	Passed distribution of 2020 director and employee remuneration Approved the Company's 2020 financial statements and consolidated financial statements Approved the Company's 2020 business report Approved the Company's 2020 earnings appropriation Approved the evaluation and review of CPA’s professional service fees and independence

57 -

Date of
meeting

Major resolutions and execution

Approved the amendments to the Company's "Regulations Governing Procedure for
Board of Directors Meetings"
Approved the 2020 "Internal Control System Effectiveness Review" and issuance of the
Company's "Declaration of Internal Control System"
Approved the amendments to the internal control system
Approved the amendments to the Internal Audit Implementation Rules
Approved the Company's 2020 operationalgoals and budget

(XII) Documented opinions or declarations made by directors against board resolutions in the most recent year, up until the publication date of annual report: None.

(XIII) Resignation or dismissal of personnel related to financial statement preparation (including the Chairman, President, head of accounting, head of finance, chief internal auditor, corporate governance officer, and head of R&D): None.

III. Disclosure of CPA remuneration

closure of CPA remuneration
				Unit: NTD thousands Remarks
Name of accounting firm	Name	of CPA	Audit period	Remarks
Deloitte Taiwan	Su-Li Fang	Cheng-Chih Lin	2020.01.01~2020.12.31

				Unit: NTD thousands
				Total ― 3,560 ― ― ― ―
Fee category Amount range		Auditing fee	Non-auditing fee (Note 1)	Total
1	Below NT$2,000,000	―	―	―
2	NT$2,000,000 (inclusive)-NT$4,000,000	3,320	240	3,560
3	NT$4,000,000 (inclusive)-NT$6,000,000	―	―	―
4	NT$6,000,000 (inclusive)-NT$8,000,000	―	―	―
5	NT$8,000,000 (inclusive)-NT$10,000,000	―	―	―
6	NT$10,000,000 and above	―	―	―

Note 1. Non-auditing fee includes service fees for the preparation of transfer pricing report totaling NT$240,000.

(I) Disclosure of audit fees, non-audit fees, and details of non-audit services, if the sum of non-audit fees paid to the CPA, accounting firm, and affiliated companies amount to more than one-quarter of total CPA remuneration: None.

(II) Change of accounting firm that resulted in a reduction of audit fee from the previous year; disclose audit fee before and after the change and the amount, percentage, and cause of such change: Not applicable.

(III) Any reduction in audit remuneration by more than 15% compared to the previous year; state the amount, the percentage, and reason of such variation: None.

58 -

IV. Change of CPA

(I) Information relating to the former auditor

Date of reappointment	Date of reappointment	Date of reappointment	Passed during the board of directors meeting dated March 26, 2020	Passed during the board of directors meeting dated March 26, 2020	Passed during the board of directors meeting dated March 26, 2020	Passed during the board of directors meeting dated March 26, 2020
Reasons and details of the reappointment			Adjustment of duties within Deloitte Taiwan
Whether the termination of audit service was initiated by the client or by the auditor	Parties involved Situation				CPA	Principal
	Service terminated by				Not applicable	Not applicable
	Service no longer accepted (continued)by				Not applicable	Not applicable
Reasons for issuing opinions other than unqualified opinion in the last 2years	None
Any disagreement with the issuer	Yes			Accounting policyorpractice
				Disclosure of financial statements
				Audit coverage orprocedures
				Others
	None	ˇ
	Description
Other disclosures	None

59 -

(II) Information relating to the succeeding CPAs

Information relating to the succeeding CPAs
Name of firm	Deloitte Taiwan
Name of CPA	Su-Li Fang, Cheng-Chih Lin
Date of appointment	Passed during the board of directors meeting dated March 26, 2020
Inquiries and replies regarding accounting practices or principles on certain transactions, or any audit opinions the CPAs were likely to issue on the financial reports prior to reappointment	None
Written disagreements from the succeeding CPA against opinions of the former CPA	None

(III) Former auditors' reply with regards to Item 1 and Item 2-3, Subparagraph 5, Article 10 of Regulations Governing Information to be Published in Annual Reports of Public Companies: None.
V. Any of the Company’s Chairman, President, or any manager involved in financial or accounting affairs being employed by the accounting firm or any of its affiliated company within the most recent year: None.
VI. Details of shares transferred or pledged by directors, managers, and shareholders with more than 10% ownership interest in the last year, up until the publication date of annual report: Changes in shareholdings of directors, managerial officers and major shareholders:

VI. Details of shares transferred or pledged by directors, managers, and shareholders with more than 10% ownership interest in the last year, up until the publication date of annual report: Changes in shareholdings of directors, managerial officers and major shareholders:	VI. Details of shares transferred or pledged by directors, managers, and shareholders with more than 10% ownership interest in the last year, up until the publication date of annual report: Changes in shareholdings of directors, managerial officers and major shareholders:	VI. Details of shares transferred or pledged by directors, managers, and shareholders with more than 10% ownership interest in the last year, up until the publication date of annual report: Changes in shareholdings of directors, managerial officers and major shareholders:	VI. Details of shares transferred or pledged by directors, managers, and shareholders with more than 10% ownership interest in the last year, up until the publication date of annual report: Changes in shareholdings of directors, managerial officers and major shareholders:	VI. Details of shares transferred or pledged by directors, managers, and shareholders with more than 10% ownership interest in the last year, up until the publication date of annual report: Changes in shareholdings of directors, managerial officers and major shareholders:	VI. Details of shares transferred or pledged by directors, managers, and shareholders with more than 10% ownership interest in the last year, up until the publication date of annual report: Changes in shareholdings of directors, managerial officers and major shareholders:
Unit: shares
Title	Name	2020		2021,upto April 2,2021
		Number of shares held Increased(decreased)	Pledged shares Increased (decreased)	Number of shares held Increased(decreased)	Pledged shares Increased(decreased)
Chairman	Bosco Foo	265,000	─	─	─
Director	RaymondSheu	─	─	─	─
Director andChairman's Assistant	J.R. Deng	(64,000)	─	─	─
Director	Ching-Ho Hsu	─	─	─	─
Director	Chi-Chao Yeh	─	─	─	─
Director	Chao-HsiangLi	─	─	─	─
Independent Director	Tsung-Yen Lin	─	─	─	─
Independent Director	Ya-Hui Huang	─	─	─	─
Independent Director	Yao-Tsung Chiang	─	─	─	─
President	WillChou	143,000	─	─	─
Vice President	Chao-Kun Peng	─	─	─	─
Vice President	Te-ChengLin	(7,000)	─	─	─
Vice President	Tai-HsiangHu	(10,000)	─	─	─
Vice President	Shao-RongLu	50,000	─	(18,000)	─
Assistant Vice President of Finance Division	Mei-Ling Chiu	(30,668)	─	─	─
CS R&D 1st Division - Assistant Vice President	Cheng Kung	7,000	─	(8,000)	─
Innovation R&D Center - Assistant Vice President	Chia-Chun Yu	30,000	─	(30,000)	─
AssistantVice President,	Feng-KuanChen	─	─	─	─
Finance Division - Head of Accounting	Hsiao-Ping Li	─	─	─	─

Information of equity transfer

Name	Reason of equity transfer	Transaction date	Counterparty of transaction	Relationship between counterparties of transactions with the Company, director, supervisor, managerial officer, or shareholder with a stake of more than 10percent	No. of shares	Transaction price
None

60 -

Information of equity pledge

Name Reason of pledge Change date Counterparty of transaction Relationship between counterparties of transactions with the Company, director, supervisor, managerial officer, or shareholder with a stake of more than 10percent No. of shares Sharehold ing percentag e (%) Pledg e perce ntage (%) Amount of pledge (redemption) None	Reason of pledge	Change date	Counterparty of transaction	Relationship between counterparties of transactions with the Company, director, supervisor, managerial officer, or shareholder with a stake of more than 10percent	No. of shares	Sharehold ing percentag e (%)	Pledg e perce ntage (%)	Amount of pledge (redemption)

VII. Relationships characterized as spouse or relatives within 2nd degree of kinship among top-ten shareholders

Relation among top ten shareholders in terms of shareholding percentage

April 2, 2021 Unit: shares; %

							April 2, 2021 Unit:	April 2, 2021 Unit:	shares; %
Name Epistar Corporation Representative: Li, Bin-Jie	One’s self Shareholding		Shareholding of spouses and children of minor age		Shareholding by nominee arrangement		Among the top ten shareholders, who are related parties as defined in IFRS and IAS, or spouses or relatives within 2nd degree of kinship, their names and relationships.		Remarks
	Shares	Shareholding percentage (%)	Shares	Shareholding percentage (%)	Shares	Shareholding percentage (%)	Name	Relationship
	10,218,000	3.40
	0	0
Lextar Electronics Corporation Representative: Feng- ChengSu	9,423,000	3.13
	0	0
Ennostar Inc. Representative: Li, Bin-Jie	8,935,000	2.97
	0	0
Bosco Foo	8,918,999	2.97	5,733,997	1.91	－	－	Yan-Kang Fu- Li	Spouse	－
Yan-KangFu-Li	5,733,997	1.91	8,918,999	2.97	－	－	Bosco Foo	Spouse	－
Ching-Ho Hsu	5,643,530	1.88	180,455	0.06	－	－	－	－	－
Raymond Sheu	4,208,297	1.40	1,766,560	0.59	－	－	－	－	－
Chia Long Enterprise Co., Ltd. Representative: Yan-Kang Fu-Li	3,998,479	1.33	－	－	－	－	Yan-Kang Fu- Li	Chairman	－
	5,733,997	1.91	8,918,999	2.97	－	－	Bosco Foo	Spouse	－
Vanguard Emerging Market Equity Fund Special Account, under custody of JPMorgan Chase Bank Taipei Branch	3,436,000	1.14	－	－	－	－	－	－	－
Shi-Chiang,Hsiung	3,333,729	1.11	－	－	－	－	－	－	－

VIII. Investments jointly held by the Company's directors, managers, and enterprises directly or indirectly controlled by the Company; disclose shareholding in aggregate of the above parties

Total shareholding percentage March 31, 2021

Unit: shares, %

Investment by the Company	Investment by the Company	Directors, supervisors, managerial officers and investments directly or indirectly controlling the business	Directors, supervisors, managerial officers and investments directly or indirectly controlling the business	Total investment	Total investment
No. ofshares	SharesRatio	No. ofshares	SharesRatio	No. ofshares	SharesRatio
14,500,000	100.00	－	－	14,500,000	100.00

61 -

Keeper Technology	3,000,000	21.43	6,662,891	47.59	9,662,891	69.02
Long Benefit Investment Co., Ltd.	18,500,000	100.00	－	－	18,500,000	100.00
Hsinjing Holding Co., Ltd. (Note 2)	17,794,077	22.79	579,808	0.74	18,373,885	23.53
Xu Qi Co., Ltd.	850,000	94.44	50,000	－	900,000	100.00
Keyway International L.L.C.	－	－	－	100.00	－	100.00
Yuanmao Opto-electronic Technology (Wuhan) Co.,Ltd.	－	－	－	100.00	－	100.00
Global Unity Int’l Co, Ltd.	－	－	1,000,000	100.00	1,000,000	100.00
Greation New Technology Inc.	－	－	1,000,000	100.00	1,000,000	100.00
Kaishin Technology (Wuhan) Corporation	－	－	－	100.00	－	100.00

Note 1: Disposal of long-term investments in equity using equity method.

Note 2: On February 27, 2020, Tynsolar’s board of directors passed a resolution to suspend the trading of stocks on Taipei Exchange, and established

Hsinjing by means of share swap, and all Tynsolar’s shares had been converted to Hsinjing’s shares, with the ownership percentage remaining unchanged.

62 -

Four.Capital Overview

I. Capital and shares

(I) Share category

I. Capital and shares (I) Share category	I. Capital and shares (I) Share category	I. Capital and shares (I) Share category	I. Capital and shares (I) Share category	I. Capital and shares (I) Share category	I. Capital and shares (I) Share category
April 2,2021 Unit: shares Share category Authorized capital Remarks Outstanding shares (TWSE-listed shares) Treasury stock Unissued shares Total Common shares 300,622,252 0 199,377,748 500,000,000 －
Share category	Authorized capital				Remarks
	Outstanding shares (TWSE-listed shares)	Treasury stock	Unissued shares	Total
Common shares	300,622,252	0	199,377,748	500,000,000	－

(II) Sources of share capital

Unit: shares; NTD

								Unit: shares;NTD
Year / month	Issued price	Authorized capital		Paid-upcapital		Remark	s
		No. of shares	Amount	No. of shares	Amount	Sources of share capital	Paid in properties other than cash	Others
1987.04	10,000	3,600	36,000,000	900	9,000,000	Founded with initial cash capital of NT$9,000,000	-	-
1988.09	10,000	5,000	50,000,000	5,000	50,000,000	Cash issue NT$ 41,000,000	-	-
1989.09	10	10,000,000	100,000,000	7,000,000	70,000,000	Cash issue NT$ 20,000,000	-	-
1992.03	10	10,000,000	100,000,000	10,000,000	100,000,000	Cash issue NT$ 30,000,000	-	-
1994.01	10	20,000,000	200,000,000	13,000,000	130,000,000	Cash issue NT$ 30,000,000	-	-
1995.05	10	20,000,000	200,000,000	18,000,000	180,000,000	Cash issue NT$ 50,000,000	-	-
1996.09	10	32,000,000	320,000,000	30,000,000	300,000,000	Cash issue NT$ 120,000,000	-	Letter No. (85)-Tai- Tsai-Cheng-(I)- 39772 dated 1996.6.27
1997.10	10	60,000,000	600,000,000	43,000,000	430,000,000	Cash issue NT$ 100,000,000 Capitalization of earnings NT$ 15,000,000 Capitalization of capital reserves NT$ 15,000,000	-	Letter No. (86)-Tai- Tsai-Cheng-(I)- 52245 dated 1997.7.7
1998.06	10	60,000,000	600,000,000	52,410,000	524,100,000	Capitalization of earnings NT$ 51,100,000 Capitalization of capital reserves NT$ 43,000,000	-	Letter No. (87)-Tai- Tsai-Cheng-(I)- 44690 dated 1998.5.21
1999.04	10	100,000,000	1,000,000,000	72,410,000	724,100,000	Cash issue NT$ 200,000,000	-	Letter No. (88)-Tai- Tsai-Cheng-(I)- 13796 dated 1999.2.44
1999.08	10	100,000,000	1,000,000,000	85,071,600	850,716,000	Capitalization of earnings NT$ 75,929,000 Capitalization of capital reserves NT$ 50,687,000	-	Letter No. (88)-Tai- Tsai-Cheng-(I)- 61314 dated 1999.7.6
2000.08	10	200,000,000	2,000,000,000	98,862,340	988,623,400	Capitalization of earnings NT$ 52,835,800 Capitalization of capital reserves NT$ 85,071,600	-	Letter No. (89)-Tai- Tsai-Cheng-(I)- 60740 dated 2000.7.13
2001.10	10	200,000,000	2,000,000,000	115,429,691	1,154,296,910	Capitalization of earnings NT$ 76,697,404 Capitalization of capital reserves NT$ 88,976,106	-	Letter No. (90)-Tai- Tsai-Cheng-(I)- 142328 dated 2001.7.3
2002.04	10	200,000,000	2,000,000,000	115,861,341	1,158,613,410	Conversion of convertible bond CB1 NT$4,316,500	-	Letter No. Yuan- Shang-0910007392 dated 2002.3.26
2002.10	10	200,000,000	2,000,000,000	129,178,733	1,291,787,330	Capitalization of earnings NT$ 38,168,410 Capitalization of capital reserves NT$ 23,172,270 Conversion of convertible bond CB1 NT$71,833,240	-	Letter No. Yuan- Shang-0910023372 dated 2002.10.11
2002.10	10	200,000,000	2,000,000,000	129,728,841	1,297,288,410	Conversion of convertible bond CB1 NT$ 5,501,080	-	Letter No. Yuan- Shang-0910024714 dated 2002.10.17

63 -

Year / month	Issued price	Authorized capital	Authorized capital	Paid-upcapital	Paid-upcapital	Remark	s
		No. of shares	Amount	No. of shares	Amount	Sources of share capital	Paid in properties other than cash	Others
2002.12	10	200,000,000	2,000,000,000	154,728,841	1,547,288,410	Cash issue NT$ 250,000,000	-	Letter No. Yuan- Shang-0910029230 dated 2002.12.09
2003.01	10	200,000,000	2,000,000,000	154,916,272	1,549,162,720	Conversion of convertible bond CB1 NT$ 1,874,310	-	Letter No. Yuan- Shang-09200011812 dated 2003.01.07
2003.09	10	200,000,000	2,000,000,000	163,705,086	1,637,050,860	Capitalization of earnings NT$ 41,413,250 Capitalization of capital reserves NT$ 46,474,890	-	Letter No. Yuan- Shang-0920025316 dated 2003.09.15
2004.03	10	200,000,000	2,000,000,000	164,116,265	1,641,162,650	Conversion of convertible bond CB2 NT$ 4,111,790	-	Letter No. Yuan- Shang-0930006808 dated 2004.03.19
2004.07	10	200,000,000	2,000,000,000	177,644,181	1,776,441,810	Conversion of convertible bond CB2 NT$ 135,279,160	-	Letter No. Yuan- Shang-0930018916 dated 2004.07.14
2004.08	10	300,000,000	3,000,000,000	188,247,373	1,882,473,730	Capitalization of earnings NT$ 70,623,150 Capitalization of capital reserves NT$ 35,408,770	-	Letter No. Yuan- Shang-0930022125 dated 2004.08.19
2004.10	10	300,000,000	3,000,000,000	188,489,539	1,884,895,390	Conversion of convertible bond CB2 NT$ 2,421,660	-	Letter No. Yuan- Shang-0930028697 dated 2004.10.13
2005.01	10	300,000,000	3,000,000,000	189,547,230	1,895,472,300	Conversion of convertible bond CB2 NT$ 10,576,910	-	Letter No. Yuan- Shang-0940000703 dated 2005.01.11
2005.08	10	300,000,000	3,000,000,000	200,243,069	2,002,430,690	Capitalization of earnings NT$ 106,094,200 Conversion of convertible bond CB1 NT$864,190	-	Letter No. Yuan- Shang-0940022258 dated 2005.08.17
2005.10	10	300,000,000	3,000,000,000	231,378,729	2,313,787,290	Conversion of convertible bond CB1 NT$ 588,220 Conversion of convertible bond CB2 NT$ 81,560,810 Conversion of convertible bond CB3 NT$229,207,570	-	Letter No. Yuan- Shang-0940027948 dated 2005.10.14
2006.01	10	300,000,000	3,000,000,000	234,974,967	2,349,749,670	Conversion of convertible bond CB1 NT$ 8,300,630 Conversion of convertible bond CB2 NT$ 185,180 Conversion of convertible bond CB3 NT$27,476,570	-	Letter No. Yuan- Shang-0950000596 dated 2006.01.11
2006.03	10	300,000,000	3,000,000,000	237,628,159	2,376,281,590	Conversion of convertible bond CB1 NT$ 1,895,410 Conversion of convertible bond CB2 NT$ 13,888,860 Conversion of convertible bond CB3 NT$10,747,650	-	Letter No. Yuan- Shang-0950006225 dated 2006.03.17
2006.07	10	300,000,000	3,000,000,000	239,656,020	2,396,560,200	Conversion of convertible bond CB2 NT$ 10,185,170 Conversion of convertible bond CB3 NT$10,093,440	-	Letter No. Yuan- Shang-0950018501 dated 2006.07.17
2006.10	10	350,000,000	3,500,000,000	239,665,279	2,396,652,790	Conversion of convertible bond CB2 NT$ 92,590	-	Letter No. Yuan- Shang-0950026886 dated 2006.10.14
2006.11	10	350,000,000	3,500,000,000	254,110,360	2,541,103,600	Capitalization of capital reserves NT$ 33,553,140 Capitalization of earnings NT$ 110,897,670	-	Letter No. Yuan- Shang-0950030189 dated 2006.11.14
2007.08	10	350,000,000	3,500,000,000	272,081,609	2,720,816,090	Capitalization of capital reserves NT$ 50,822,080 Capitalization of earnings NT$ 124,872,590 Conversion of convertible bond CB4 NT$4,017,820	-	Letter No. Yuan- Shang-0960023280 dated 2007.08.30
2007.12	10	350,000,000	3,500,000,000	283,557,706	2,835,577,060	Conversion of convertible bond CB4 NT$ 68,340,920 Conversion of convertible bond CB5 NT$46,420,050	-	Letter No. Yuan- Shang-0960035258 dated 2007.12.26
2008.03	10	350,000,000	3,500,000,000	283,645,142	2,836,451,420	Conversion of convertible bond CB4 NT$ 635,890 Conversion of convertible bond CB5 NT$238,470	-	Letter No. Yuan- Shang-0970005681 dated 2008.03.03
2008.08	10	350,000,000	3,500,000,000	307,856,236	3,078,562,360	Capitalization of capital reserves NT$ 83,593,540 Capitalization of earnings NT$ 151,681,250 Conversion of convertible bondCB4	-	Letter No. Yuan- Shang-0970023975 dated 2008.08.28

64 -

Year / month	Issued price	Authorized capital	Authorized capital	Paid-upcapital	Paid-upcapital	Remark	s
		No. of shares	Amount	No. of shares	Amount	Sources of share capital	Paid in properties other than cash	Others
						NT$ 6,677,180 Conversion of convertible bond CB5 NT$ 158,970
2009.09	10	500,000,000	5,000,000,000	316,791,923	3,167,919,230	Capitalization of capital reserves NT$ 89,356,870	-	Letter No. Yuan- Shang-0980024798 dated 2009.09.07
2009.12	10	500,000,000	5,000,000,000	341,823,741	3,418,237,410	Cash issue NT$ 250,000,000 Conversion of convertible bond CB5 NT$ 318,180	-	Letter No. Yuan- Shang-0980036547 dated 2009.12.29
2010.04	10	500,000,000	5,000,000,000	342,062,264	3,420,622,640	Conversion of convertible bond CB5 NT$ 2,343,290 Conversion of convertible bond CB7 NT$41,940	-	Letter No. Yuan- Shang-0990009101 dated 2010.04.08
2010.05	10	500,000,000	5,000,000,000	342,110,472	3,421,104,720	Conversion of convertible bond CB5 NT$ 230,410 Conversion of convertible bond CB6 NT$251,670	-	Letter No. Yuan- Shang-0990012293 dated 2010.05.05
2010.11	10	500,000,000	5,000,000,000	342,408,288	3,424,082,880	Conversion of convertible bond CB6 NT$ 1,719,780 Conversion of convertible bond CB7 NT$1,258,380	-	Letter No. Yuan- Shang-0990032936 dated 2010.11.04
2011.03	10	500,000,000	5,000,000,000	342,551,144	3,425,511,440	Conversion of convertible bond CB5 NT$ 1,428,560	-	Letter No. Yuan- Shang-1000008703 dated 2011.03.29
2011.05	10	500,000,000	5,000,000,000	343,826,311	3,438,263,110	Conversion of convertible bond CB6 NT$ 2,265,100 Conversion of convertible bond CB7 NT$10,486,570	-	Letter No. Yuan- Shang-1000013650 dated 2011.05.13
2012.08	10	500,000,000	5,000,000,000	361,017,627	3,610,176,270	Capitalization of capital reserves NT$ 171,913,160	-	Letter No. Yuan- Shang-1010027503 dated 2012.08.31
2014.09	10	500,000,000	5,000,000,000	239,245,327	2,392,453,270	Reduction of share capital against cumulative losses NT$ 1,217,723,000	-	Letter No. Zhu- Shang-1030026129 dated 2014.09.09
2014.10	10	500,000,000	5,000,000,000	235,931,842	2,359,318,420	Retirement of treasury stock NT$ 33,134,850	-	Letter No. Zhu- Shang-1030031390 dated 2014.10.28
2015.03	10	500,000,000	5,000,000,000	275,931,842	2,759,318,420	Cash issue NT$ 400,000,000	-	Letter No. Zhu- Shang-1040007390 dated 2015.03.18
2016.04	10	500,000,000	5,000,000,000	290,547,127	2,905,471,270	Conversion of convertible bond CB8 NT$ 146,152,850	-	Letter No. Zhu- Shang-1050009280 dated 2016.4.11
2016.05	10	500,000,000	5,000,000,000	292,783,440	2,927,834,400	Conversion of convertible bond CB8 NT$ 22,363,130	-	Letter No. Zhu- Shang-1050013747 dated 2016.5.20
2017.05	10	500,000,000	5,000,000,000	293,658,971	2,936,589,710	Conversion of convertible bond CB8 NT$ 8,755,310	-	Letter No. Zhu- Shang-1060013443 dated 2017.5.19
2017.07	10	500,000,000	5,000,000,000	295,238,361	2,952,383,610	Conversion of convertible bond CB8 NT$ 15,793,900		Letter No. Zhu- Shang-1060020109 dated 2017.7.24
2017.11	10	500,000,000	5,000,000,000	299,077,472	2,990,774,720	Conversion of convertible bond CB8 NT$ 38,391,110		Letter No. Zhu- Shang-1060032106 dated 2017.11.24
2018.02	10	500,000,000	5,000,000,000	299,817,868	2,998,178,680	Conversion of convertible bond CB8 NT$ 7,403,960		Letter No. Zhu- Shang-1070005867 dated 2018.2.12
2018.04	10	500,000,000	5,000,000,000	300,622,252	3,006,222,520	Conversion of convertible bond CB8 NT$ 8,043,840		Letter No. Zhu- Shang-1070011201 dated 2018.4.16

Note 1: Face value has been changed from NT$10,000 per share to NT$10 per share since September 1989

Note 2: CB1 converted a total of 9,517,358 shares, CB2 converted a total of 25,830,213 shares, CB3 converted a total of 27,752,523 shares, CB4 converted a total of 7,967,181 shares, CB5 converted a total of 5,113,793 shares, CB6 converted a total of 423,655 shares, CB7 converted a total of 1,178,689 shares, and CB8 converted a total of 24,690,410 shares.

65 -

(III) Shareholder structure

(III) Shareholder structure	(III) Shareholder structure	(III) Shareholder structure	(III) Shareholder structure	(III) Shareholder structure	(III) Shareholder structure	(III) Shareholder structure	(III) Shareholder structure
Base date: April 2,2021 Unit: shares Shareholder structure Volume Government agencies Financial institution Other institutions Foreign Institutions and foreigners Individual Treasury stock Total Count 1 0 259 114 61604 0 59,852 No. of shares held 2 0 38,973,272 26,358,906 235,290,072 0 300,622,252 Shareholding percentage (%) 0.00 0 12.96 8.77 78.27 0 100.00
Shareholder structure Volume	Government agencies	Financial institution	Other institutions	Foreign Institutions and foreigners	Individual	Treasury stock	Total
Count	1	0	259	114	61604	0	59,852
No. of shares held	2	0	38,973,272	26,358,906	235,290,072	0	300,622,252
Shareholding percentage (%)	0.00	0	12.96	8.77	78.27	0	100.00

Note: The first TWSE/TPEx and emerging stock market listing companies shall disclose the shareholding percentage of Chinese capitals, defined as the individuals, institutions, groups, other institutions, or their invested companies in any third areas set for in Article 3, the Regulations Governing Permission of Investments Made in Taiwan by People from Mainland China.

(IV) Shareholding Distribution

April 2, 2021 Unit: shares

Shareholding Tiers	Number of Shareholders	No. of shares held	Shareholding percentage %
1 to 999	34,039	4,277,503	1.42
1,000 to 5,000	21,446	46,631,700	15.51
5,001 to 10,000	3,471	27,989,779	9.31
10,001 to 15,000	921	11,828,761	3.94
15,001 to 20,000	684	12,814,587	4.26
20,001 to 30,000	482	12,641,361	4.21
30,001 to 50,000	424	17,266,728	5.74
50,001 to 100,000	277	20,172,459	6.71
100,001 to 200,000	124	17,077,780	5.68
200,001 to 400,000	54	14,879,910	4.95
400,001 to 600,000	11	5,442,774	1.81
600,001 to 800,000	7	4,905,188	1.63
800,001 to1,000,000	7	6,193,312	2.06
More than 1,000,001, may be tiered based on the actual needs	31	98,500,410	32.77
Total	61,978	300,622,252	100.00

66 -

(5) Names of major shareholders

(5) Names of major shareholders	(5) Names of major shareholders	(5) Names of major shareholders
April 2,2021 Unit: shares;
Shares Name of major shareholder	Shares held	Shareholding percentage %
Epistar Corporation	10,218,000	3.40
Lextar Electronics Corporation	9,423,000	3.13
Ennostar Inc.	8,935,000	2.97
Bosco Foo	8,918,999	2.97
Yan-Kang Fu-Li	5,733,997	1.91
Ching-Ho Hsu	5,643,530	1.88
Raymond Sheu	4,208,297	1.40
Chia Long Enterprise Co., Ltd.	3,998,479	1.33
Vanguard Emerging Market Equity Fund Special Account, under custody of JPMorgan Chase Bank Taipei Branch	3,436,000	1.14
Shi-Chiang, Hsiung	3,333,729	1.11

(VI) Market Price, Net Worth, Earnings, and Dividends per Share for the Past 2 Years

Year Item	Year Item	Year Item	Year Item	2019	2020	2021 up to March 31, 2021 (Note 8)
Market price per share (Note 1)	Highest			18.55	18.90	31.70
	Lowest			13.05	8.10	16.35
	Average			16.24	14.28	21.81
Net worth per share (Note 2)	Before distribution			12.27	13.00	12.56
	After distribution			11.97	12.25	－
Earnings per share (EPS)	Weighted average amount of shares (thousand shares)			300,622	300,622	300,621
	Earnings per share (Note 3 and 9)		Before dividend	0.60	1.02	0.25
			After dividend	0.60	1.02	－
Dividends per share	Cash dividends			0.30	0.75	－
	Bonus shares	Shares from earnings		－	－	－
		Shares from capital reserve		－	－	－
	Accumulated unpaid dividend (note 4)			－	－	－
Analysis of ROI	Price earnings ratios(Note 5)			27.07	14.00	87.24
	Price to dividend ratio(Note 6)			54.13	19.04	－
	Dividend Yield(Note 7)%			1.85	5.25	－

*Where stock dividends were paid from earnings or capital reserves, market price and cash dividends per share are adjusted retrospectively for the number of new shares issued.

Note 1: The table shows the highest and lowest market price of common shares in each year; average market price is calculated by weighing transacted prices against transacted volumes in the respective years.

Note 2: Calculated based on the number of outstanding shares at year-end; amount of distribution resolved in next year's shareholders meeting is presented in the table.

Note 3: Where stock dividends were issued, EPS are disclosed in amounts before and after retrospective adjustments.

Note 4: If equity securities are issued with terms that allow dividends to be accrued and accumulated until the year the Company makes profit, the amount of cumulative undistributed dividends up until the current year is disclosed separately.

67 -

Note 5: P/E ratio = average closing price per share for the year / earnings per share.

Note 6: Price to dividends ratio = average closing price per share for the year / cash dividends per share.
Note 7: Cash dividend yield = cash dividends per share / average closing price per share for the current year.
Note 8: Net worth per share and earnings per share are based on auditor-reviewed data as of the first quarter of 2021. For all other fields, calculations are based on data as at the end of their respective years.
Note 9: The 2020 earnings appropriation will be distributed in cash. The board of directors has been authorized under the Articles of Incorporation to approve the decision, provided that the decision is resolved in a board of directors meeting with at least two-thirds of directors present, voted in favor by more than half of attending directors, and reported in the upcoming shareholder meeting.

(VII) Dividend policy and execution:

1. Dividend policy:

Annual surpluses concluded by the Company are first subject taxation and reimbursement of previous losses, followed by a 10% provision for statutory reserves; however, no further provision is needed when statutory reserves have accumulated to the same amount as the Company's paid-up capital. Any surpluses remaining shall then be subject to provision or reversal of special reserves, as the laws may require. The residual balance is then added to unappropriated earnings carried from previous years (including adjustments), which the board of directors may propose to distribute or withhold to reimburse losses. Shareholders' resolution is required if the appropriation involves issuance of new shares.

The Company adopts a dividend policy that allows the board of directors to propose dividends after taking into consideration the Company's future capital requirements, long-term financial plans, and shareholders' needs for cash inflow. Profit sharing to shareholders can be paid in cash or shares, provided that the cash portion does not amount to less than 10% of total profit sharing.

Any cash distribution of dividend, profit, legal reserve or capital reserve, whether in whole or in part, must be resolved in a board meeting with more than two-thirds of the board present, voted in favor by more than half of attending directors, and reported in the upcoming shareholder meeting.

Earnings distribution proposed to this AGM:

On June 24, 2019, The shareholders' meeting approved the amendment to Article 18-1 of the Company's Articles of Incorporation, authorizing the Board of Directors to resolve the distribution of cash dividends every six months. The cash dividends approved by the Company's Board of Directors for 2020 are shown in the following table.

own in the followingtable.
Period	Approval Date	Cash Dividend Per Share	Total amount of earnings distribution (NTD)
First half of the fiscalyear, 2020	August 11, 2020	No distribution	0
Second half of the fiscalyear, 2020	March 25, 2021	NT$0.75	225,466,689

Explanation when the dividend policy is expected to change materially: none

(VIII) The Impact of Bonus Shares on Business Performance and EPS: not applicable

(IX) Employees’ and directors’ remunerations
Employees’ and directors’ remuneration percentage or ranges stated in the Articles of Incorporation: Pursuant to the Articles of Incorporation, for the current profit before tax for a fiscal year of the Company before deduction of the remuneration of employees and the remuneration of Directors, an amount equivalent to 5% to 15% of such profit before tax shall be appropriated as the remuneration of employees and an amount not greater than 5% of such profit before tax shall be appropriated as the remuneration of the Directors. The Board of Directors resolves to distribute remunerations in shares or cash, and the employee subject to such distribution include employees of subordinate companies who meet certain conditions. Employees’ and directors’ remuneration distribution proposals shall be submitted to the shareholders' meeting for reporting.

However, if the Company still has accumulated losses (including adjustment of undistributed earnings

68 -

amount), an amount shall be reserved for making up the accumulated loss first.

The estimation basis of the estimated employees’ and directors’ remuneration; the share calculation basis for the employees’ remuneration distributed in shares, and the accounting treatment if any difference between the actual distributed amount and estimations:
(1) The estimation basis of the estimated employees’ and directors’ remuneration: The remuneration of employees and directors is based on the amount that may be paid based on past experience, and is calculated based on approximately 5% and 2% of the net profit before tax.
(2) The share calculation basis for the employees’ remuneration distributed in shares: there is no share distribution for the period, so this is not applicable.
(3) The accounting treatment if any difference between the actual distributed amount and estimations: After the end of the year, if there is a material change in the amount of distribution resolved by the Board of Directors, the change shall be adjusted to the expenses at the year of recognition; if the distributed amount resolved by the Board of Directors differs from the actual distributed amount, it shall be treated as accounting estimate changes, and adjusted in the year of distribution.
Information regarding the employees’ remuneration distribution approved by the Board of Directors:
(1) Employees’ and directors’ remunerations distributed in cash or shares. If the amount is different from the estimated expenses recognized for the year, the difference, reasons, and treatment shall be disclosed. It was approved to distribute the employee’s remuneration for NT$26,907 thousand and the directors’ remuneration for NT$11,532 thousand, both in cash; and there is no difference between the recognized expense of 2020 as NT$26,907 thousand for the employees’ remuneration, and NT$11,532 thousand for the directors’ remuneration.
(2) Employee remuneration paid in shares (NT$ 0) as a percentage of current net profit after tax and the total employee remuneration: not applicable.
(3) EPS after distribution of employees’ and directors’ remunerations: NT$0.75 per share.
Actual distribution of employees’ and directors’ remunerations (including distributed cash, shares, and share prices) in the previous year, and difference, treatments and explanations if any difference from the recognized employees’ and directors’ remunerations exists:
The Company’s 2019 business generated a net profit after tax of NT$179,858 thousand. After a resolution of the Board of Directors in 2020, the employees’ remuneration was NT$10,282 thousand, and the directors’ remuneration of was NT$3,500 thousand. The actual distribution is consistent with the original resolution adopted by the Board of Directors.
(X) Shares repurchased by the Company:

Shares repurchased by the Company up until the publication date of annual report:

Shares repurchased by the Company: (completed)

Buyback attempt	Sixth Time
Purpose of Repurchase	For transfer of shares to employees
Buyback period	2020/3/27~2020/5/25
Buyback price range	NT$ 8-13
Types and number of shares bought back	2,656,000 common shares
Amount of shares bought back	NT$ 30,789,863
Quantity bought back as a percentage of planned buyback (%)	53.12%
Number of shares retired and transferred (Note)	2,656,000

69 -

Cumulative number of company shares held	0
Cumulative holding of own shares as a percentage to total outstanding shares (%)	0%

Note: The board of directors passed a resolution on 2020/7/16 to transfer repurchased shares to employees, and completed the transfer on 2020/8/6.

II. Corporate bonds, preferred shares, overseas depository receipts, employee warrants, and

merger/acquisition/divestment through exchange of shares

(I) Corporate bonds:
Convertible corporate bonds: None
Exchangeable corporate bonds: None
Corporate bond information relevant to aggregate reporting: None
Corporate bonds with warrants: None
(II) Preferred shares: None
(III) Disclosure relating to global depository receipts: None
(IV) Employee warrants: None
(V) New issuance of employee restricted shares: None
(VI) Issuance of new shares for business acquisition or share exchange: None

III. Progress on planned use of capital: Not applicable.

70 -

Five. Operational Overview

I. Business activities

(I) Business scope
Major lines of business:
- A. Research, development, production, manufacturing and sale of the following products:
  - (1) Gallium arsenide, infrared, light emitting diode, laser diode, phototransistor, photodiode, single crystal epitaxy and crystal grain.
  - (2) Optoelectronic system, software/hardware of computers and peripheral equipment, electronic final products, semi-products, various wireless/wired telecommunication equipment and various wireless anti-burglary equipment. (Limited to business operation by branch offices outside the science park).
  - (3) Radio transmitter, radio transceiver, radio receiver and other electrical machineries capable of generating radio radiant energy. (Limited to business operation by branch offices outside the science park)
  - (4) Mechanical installation, retail and wholesale of electronic materials, automobile and scooter parts and lighting accessories, traffic sign equipment and other machinery.
- B. Export and import businesses of the aforementioned products.
Major product (service) and the business weight

Majorproducts	Keyusage or function	Weight of business in 2020
Compound semiconductor components (Silicon detector)	Visible LED products Applications: Small light bulbs, digital displays, dot matrix displays, light source displays for fax machines, home appliances, communications, computers, automobiles and other consumer products indicating components, traffic signs, outdoor display screens, and automotive dashboards. Infrared light LED products Applications: Transmitting components such as mouse, remote control, electronic toll collection system, wireless transmission products, among other things. Optical communication products Applications: fiber optical communication module.	48.45%
SI component (Sensing component)	Photo-transistor componets (PT) Applications: Optical coupler, optical interrupter, proximity sensor (non-contact sensor), infrared monitor control, and other components for monitoring. Photo-Diode (PD) Applications: Components for remote control reception of consumer products such as home appliances, communications, computers, and automobiles,medical care (oximeter and pregnancy test), fire and smoke detection, mechanical positioning, motor speed measurement, and panel touch. Zener Diode (ZD) Applications: Application components for LED packaging (stabilization, rectification, electrostatic protection, bridging, leakage detection). Transient voltage suppressors (TVS) Applications: Electrostatic protection components for consumer products (mobile phones, computers, handheld devices, etc.). Chip resistance (CR) Applications: LED packaging, application components of various circuit boards(voltage adjustment,and current control).	51.55%

71 -
New products (services) in development in plan (1) High power GaN blue LED (2) Flip chip GaN blue LED (3) 6” wafer and 2D/3D sensing PD (4) 6” wafer and high precision and power components (5) High power AlGaInP light emitting diodes (6) High speed communication photodiodes (7) SI power transistor and diode (8) ACLED (9) Ambient light source sensing components (10) Shortwave blue light sensing components (11) Red light and infrared LED for wearable and medical care (12) Wearable sensing elements (blood oxygen, heartbeat monitoring) (13) Si substrate capacitance (14) Monitor PD for optical communication light source intensity monitoring (15) Silicon sub-mount (16) VCSEL/UV/PD integrated components (17) Polycrystalline photoelectric components (18) New generation semiconductor material components

In the future, the consolidated company will continue to accelerate the development of various new products based on refined R&D technology, and aim to pursue the product quality and cost competitiveness in order to lead the peers.

(II) Industry Overview

1. Industry status and overview

In 2020, the global LED component industry production value reached USD 14.3 billion, a sharp decline of 9%. All regions have also experienced recession: Europe was -5%, South Korea was -14%, Taiwan was -8%, China was -13%, the United States was -8%, and Japan was -7%. From the perspective of the change in the market share of production value, China still ranks first in terms of the global LED component production value, with a market share of 27%, followed by Japan at 21%, Taiwan at 18%, and South Korea at 15%. However, if we only look at the production value of global LED packages and modules, it declined by 8% in 2020, reaching about USD12.1 billion. For the production value of each region, the Japanese market is ranked first with 25% of market share, closedly followed by China, with 20%, and Europe, South Korea, and Taiwan are all 16%. In terms of the production value of application fields, lighting applications will be the largest in 2020 with 30%, followed by LCD backlights at 25%, automotive at 20%, mobile devices at 10%, outdoor billboards/signs/indicators at 5%, and electronic equipment/others at 10%.

Looking forward to 2021, due to the diversification of LED applications, the industrial recovery of each application category is also different. From the view of traditional backlight applications, remote working and teaching derived from the 2020 pandemic have become the norms in lives, driving the demand for consumer electronic products such as tablets and laptops. Benefited from the strong demand for panels, LED backlight-related companies have performed well. However, they are worried about that most consumers had consumed in advance this year, so they have been conservative about whether the strong market demand in 2020 will continue in 2021.

From the perspective of general lighting, LED lighting applications have declined sharply due to the impact of the pandemic. The decline in the number of commercial activities has led to the most obvious decline in the demand for commercial lighting and outdoor landscape lighting. In contrast, demand in the field of plant lighting has risen sharply, as the gradual legalization of marijuana cultivation in North America, and the pandemic has resulted in the medical and entertainment marijuana market to soar; in addition, the impact of the pandemic on the food supply chain is gradually showing, and the investment and construction of indoor planting agriculture has been heating up again. It is expected that some lighting applications in 2021 will begin to bottom out and rebound.

Linkages among the industry’s up-, mid-, and downstream

LED is a kind of semiconductor electronic component; the current drives the conversion of electric energy into light output. It is one of the main modern light sources and is commonly used in lightings, screen backlighting or display purposes.

72 -

The links of LED lighting industry are summarized as follows:

==> picture [415 x 121] intentionally omitted <==

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

Production process and
testing equipment
• Sapphire wafer and materials (such as FitTech manufacturers, and raw • Suppliers of LED
packages, modules
Upstream substrate suppliers (such as Crystalwise Technology, Rubicon, Midstream source/epitaxial/crystal and Topco Scientific)Light Downstream and LED lamps (such as Everlight, Para Light, Harvatek...
etc.) grain (e.g. Epistar, etc.)
TYNTEK, Optotech.. etc.)
----- End of picture text -----

The upstream of the LED lighting industry chain is the suppliers of sapphire wafers and substrates; the midstream is the suppliers of production process and testing equipment, including suppliers of epitaxy generation equipment, LED wafer testing, picking equipment, and epitaxial wafers and crystal grains; and the downstream is suppliers of LED packaging, modules and LED lamps.

The key upstream LED materials are sapphire wafers and substrates. The substrates have become the key materials for making ultrahigh-luminance blue, green, blue-green and white light LED crystal grains. At present, 4-inch and 6-inch specifications are the mainstream in the market. Suppliers mostly work towards 6 inches or differentiation-oriented. After the rise of LED applications, Japanese, Korean, Taiwanese, and Chinese manufacturers have engaged in this material field. The larger companies become larger, and the first-tier manufacturers own 80% of market share. The key products of LED midstream are single chip/crystal grain and epitaxial wafer/crystal grain. Depending on the needs of different LED components, LED epitaxial wafer electrodes are produced through processes such as diffusion, metal film deposition, etching, and heat treatment, and then the epitaxial substrate is thinned and polished and then diced into single crystal grains. In the past few years, Chinese manufacturers have actively expanded their factories, causing product prices to fall, and some application markets are saturated. Therefore, the wavelength and electrical characteristics of LED epitaxy are highly discrete. Hence, the reliance on detection and sorting is required, and the market scale growth is limted, leading to global overcapacity. Consequently, the global epitaxy companies have been moving towards consolidation or strengthening R&D of niche products, in order to reduce costs and enhance product competitiveness. The downstream of LED is the crystal grain packaging, modules, and lights and lighting application industries. According to different packaging technologies, there are various types of components such as shell type, display type, dot matrix type, surface mount type...etc.

3. Various development trends and competitive situations of products

In recent years, the European lighting giants have spun off their lighting business, for independent listing or reselling to other mainland Chinese companies, to focus on solidification of high-margin automotive LEDs, invisible lights, special lighting, and expanding emerging Micro LED applications. Korean manufacturers have led the exit from the LCD industry, focusing on the development of OLED displays or engaging in next-generation Micro LED or quantum dot displays. Although the Chinese LED lighting industry has achieved global manufacturing status and cultivated international lighting companies, it still has not been able to stop the cutthroat competition of LED lighting components. Facing the recession after the wave of display expansion in mainland China, the LED component manufacturers in both Taiwan and China were impacted and adjusted the proportion of operations, to include four-element, automotive, invisible light, Mini LED, and development of non-LED products such as VCSEL and GaN HEMT components.

After the bloody competition of mobile phones, display backlights, and lighting, automotive LEDs still hold on to good profits, and Mini/Micro LEDs will undoubtedly be the focus of the next wave of global LED components competition. In 2020, the global LED component industry still have had imbalance demand-supply and destocking due to the expansion of production by Chinese companies. Among them, LED chips and crystal grains are the most challenged. The production value of Taiwan's LED epitaxial wafers and crystal grains has fallen sharply by more than 10% for two consecutive years. In 2020, the production value has fallen to NT$20 billion.

In recent years, general backlight and lighting applications have entered the oversupplied Red Sea

73 -

market. Taiwan’s LED epitaxial wafer and crystal grain industry has experienced a huge decline in production value over the past two years, and the capacity utilization rate has been generally poor, and a lot of resources have been invested in Mini LED and expansion of the application of the III-V group semiconductors, the Company's operating still have great pressure of operating loss. Although LED packaging and module companies have more diversified application fields and profit-making companies are more, they still cannot escape the plight of a sharp decline in earnings as a whole. Taiwan's LED epitaxial wafer and crystal grain industry manufacturers have reduced the market weight of display backlights and lighting components with cutthrough price competition, and some manufacturers have expanded silicon sensing components to the earnings. And the technology continues to evolve to shrink the crystal grain size to the Mini LED/Micro LED level, in order to create a better market demand for display backlights and display billboard applications. In addition, the reach is also extended to the III-V group semiconductor VCSEL (3D sensors and VR/AR), GaN/Si (electricity and electronic components) and other non-LED component applications.

In 2020, Taiwan’s top ten LED epitaxy companies have witness a 10% decline in revenue; almost all of the major crystal grain players entered recession decline industry competition. The Company has been actively transforming and expanding non-LED silicon sensing components to secure the earnings. In 2020, the production value of Taiwan’s LED packaging and modules is about NT$58.7 billion, the decline expanded to nearly 8%. Taiwan’s LED packaging component companies have been gradually withdrawing from the fields of general LED backlights, LED lighting components, and bulbs/lamps, continuing to shift to invisible light for smart home applications and display billboards, CSP Flash of wearable devices, lighting of Internet of Things, automotive LED components of Internet of Vehicles, and Mini LED for display backlighting.

The Company is actively expanding into non-LED fields including sensors as a means to satisfy demand for applications such as wearable device, automobile, consumer electronics, and medicine.

(III) Technologies and R&D:

(1) Technical level of the business operated

The LED production technology of the consolidated company in the early stage mainly came from the technology transfer of the Optoelectronics Laboratory of the Industrial Technology Research Institute. However, the Company has continued to develop new products, new technologies and improve the manufacturing process on its own afterwards. Currently, there are the consolidated company, and Optotech owning the R&D and manufacturing capabilities of infrared LEDs and light-receiving elements, and the consolidated company has successfully developed and sold high-speed infrared LEDs and highspeed detection elements for infrared wireless data transmission modules. Also the consolidated company possesses many patents of key components. Since infrared LEDs and light-receiving components are the future development trend of security surveillance and automation, the consolidated company will have more competitive edges due to its multiple patents on gallium arsenide (GaAs) infrared crystal grain process technology and light-receiving components, and extend the technology to optical communication components.

(2) R&D

The consolidated company has engaged in the R&D capability for LED compound semiconductor and light receiving components, and with the continuous efforts over the past years, we have been able to develop and launch numerous outstanding new products, and have also been able to gain support from the public sector and government agencies, All of such achievements demonstrate the consolidated company's commitment and dedication in R&D technologies. After the consolidated company has completed the development and mass production of VCSEL surface emitting laser diodes, our production line becomes more complete. To develop products of greater prospectivity and marketability, in recent years, the consolidated company is fully dedicated in the research and development of optical communication sensors and sensors for the fields of automobile, medical care and precision control. We have received orders from various international major manufacturers in Europe, Americas, Japan and Taiwan. In addition, the consolidated company is also active in the investment of relevant product application fields. With the rapid growth of the optoelectronic market, the application scope of various products continues to expand, and the market demand is increasing. To satisfy the market demand, the consolidated company will continue to focus on the development of the following products:

A. High density 2D/3D semiconductor passive components
B. Flip chip GaN blue LED
C. High power AlGaInP light emitting diodes
D. High speed optical communication laser diodes
E. Multiband photo detectors
74 -
- F. Dark violet (DUV/UVC) sensors
- G. Silicon substrates with built-in electrostatic protection components
- H. Flip-chip Zener diodes
- I. Photo diode integrated circuit (PDIC)
- J. Low-capacitance transient voltage suppressors (TVS)
- K. High speed optical communication laser diodes
- L. Vertical cavity surface emitting laser (VCSEL) diodes
- M.Chip Scale Package (CSP)
- N. New generation semiconductor material components
(3) R&D expenditures input in the recent year and up to the publication date of the annual report:
- (1) 2020: NT$128,112 thousand.
- (2) 2019: NT$34,695 thousand.
(4) Recently developed technologies or products in the last year and up until the publication date of annual
report:

Year	Project	Main benefits
2004	Metal-attached 4-color LED, Power Chip Infrared LED	High luminance red LED, a high-performance component different from AS AlinGap used in optical mouse, traffic signal, tail light, full-color sign board, lighting module, and CCD surveillance system
2005	Zener diode, Ambient Light Sensor	Statics protection component, used in the packaging of blue/white lightingcomponents and ambient light sensors
2006	High luminance InGaN LED	Used in cellphone back lighting
2007	High reliabilityInGaN LED	Used in small LCD back lighting
2008	AC LED InGaAsphotodiode	5W AC LED, used in table lamps and interior lighting Light sensor for bio-medicine instruments
2009	Small wattage AC LED	AC LED of 0.5W and below, can be used as interior lighting and indicator
2010	AR111 socket-type side LED	Satisfies multiple commercial and indoor lighting requirements; can be used with reflectors and covers of different angles to achieve different lightingeffects
2011	High power IR LED	High-current design reduces masked area, shortens gold wiring, shortens light path, and increases lighting area for improved efficiencyand cost saving
2012	850nm IR LED for optical communication	LED designed with 850nm LPE (Liquid Phase Epitoxy) to operate at high speed (Tr/Tf< 8nS), while using current limiting to generate light signals of high directionality and low noise
2013	Development of production procedures for high power IR LED	By incorporating designs such as metal organic chemical vapor deposition (MOCVD), metal reflection, current spreading, and chip-bonding technology on IR chips, IR components can be optimized to serve as high directional LED for smartphones
2014	Development of production procedures for visible light LED	Through bonding of visible light IC, WB visible light LED components can be developed at lower cost.
	Development of production procedures for UV Enhanced light-sensitive diode	Improved UV wavelength (350nm) sensitivity
	High power zener diode	Statics protection component, combined with high power LED component
	Development of small size light-sensitive diode	Used in cellphones
2015	Productionprocess for high heat resistance LED vapor	A LED vapor deposition coating process that is simplified,

75 -

Year	Project	Main benefits
	deposition coating	highly heat-resistant, cost effective, and suitable for rapid and special welding lines
2016	A method of metal bonding for attaching IC to LED	A low-cost method of metal bonding for attaching IC to LED
2017	Development of chip scale package (CSP) for LED	A CSP LED that is different from other packaged LEDs; awardedpatents in multiple countries.
	SI power diode	Can be used as over voltage protection, voltage regulator, and referencepotential for small signals.
2018	Development of high-speed, thin-type IR products	Customers need not replace other components and can achieveproduct upgrade simplybyreplacingthe IC.
	SI high-speed, small-size, and multi-wave length light- sensitive diode	Used for smartphone 3D TOF applications such as facial recognition and smart headphone, and as sensors for automobile applications such as automated windshield wipingand automated head lamp.
	Side photodiode components for COB packaging	A side photodiode design unlike conventional TO-Can packaging that can be applied to COB packaging for high- speed transmission;awardedpatents in multiple countries.
	Development of VCSEL packaging and laser packaging	Used for face, object, and package detection.
2019	Development of long wavelength IR LED	Used in next-generation under-display fingerprint scanner andproximityswitch
	High/low CAF,4-color LED components	Used in smart medical lighting systems
	Smart ergonomic lightingequipment
	Multi-crystal wide-color light source	High image resolution, enhanced product identification
2020	Wearable sensing component	Monitoring application for blood oxgen and heart beats
	Ambient light source sensing components	Applied to detect the ambient light sources for switch on/off.

(IV) Long- and short-term business development plans:
Short-term Business Development Plan:
- (1)Based on the currently existing business, continue to dedicate in the development of high frequency/high power infrared LED/infrared VCSEL products and various Si sensors and protection components. In addition, for different markets, develop sales method suitable to the local markets.
- (2)Continue to promote the rationalization and flexibility of production process, in order to achieve harmony between production and sales, as well as to achieve most optimal operating economic scale; implement quality management thoroughly and achieve the goal of Quality First with best effort. Increase automatic production efficiency and product yield rate, engineering research and development process systematization, thereby improving overall management quality.
- (3)Establish new wafer fab, and increase the wafer size from 5” to 6”, as well as expand scale and technology.
Long-term Business Development Plan:
- (1) In addition to continue to improve quality and to maintain excellent cooperation relationship with domestic and foreign giants in the industry, the Company aims to expand the market share as well as to establish complete sales channels globally and diverse business strategies.
- (2) Integrate various products of the Company and subsidiaries, and establish the operational development model with horizontal expansion and vertical integration, thereby increasing the overall competitiveness of the Company.
76 -
(3) Continue research and development, maintain the leading position in manufacturing technologies, and improve OEM capability, thereby exploiting the Company’s advantage in the mass production economic scale.

II. Market, production and sales overview

(I) Market analysis:
Table of geographic areas where the main products sold in the recent two years

Unit: NTD thousands

				Unit: NTD thousands	Unit: NTD thousands
Year Product		2019		2020
		Amount	%	Amount	%
Domestic sale		869,973	34.52	556,076	22.90
Export	Asia	1,581,253	62.75	1,804,954	74.31
	Americas	67,918	2.70	67,395	2.78
	Europe	711	0.03	191	0.01
Total		2,519,855	100.00	2,428,616	100.00

Market share:

Market share:	Market share:
			Unit: NTD thousands
Item Year	Domestic sales income of TYNTEK	Sales value of the LED (crystal grain) (Note1)	Market share
109	344,973	48,886,635	0.71%

Note 1: source:

Demand and supply conditions for the market in the future and the market's growth potential (1) Market demands

In the past, visible light LEDs were only required to be used as micro light sources for indication applications, using gallium phosphide (GaP), gallium arsenide phosphide (GaAsP) and other secondary and ternary low-power LED products. As LED technology continues to move towards the development of high luminance, high power, and high luminous efficiency, and the application market to be covered is getting bigger and bigger.

For example, high-luminance four-element AlGaInP is made to red and yellow LEDs, which are commonly used in outdoor billboards, automobiles, displays and other products, and highpower four-element products are used in auxiliary lighting with changeable colors. As for highluminance blue and green LEDs, InGaN is used as the luminescent material. Blue LED crystal grains are often made into white-light LED packaging products, and the product application has expanded to huge markets such as display backlights and lighting. High-power lasers exhibit packaging technologies for different heat dissipation requirements, such as TO-CAN packaging, and direct welding of laser particles to metal blocks to meet the integration of C/CT-mount packaging and modules for high-power laser heat dissipation. Observing the overall visible light LED products, widely used in mobile devices, electronic equipment, outdoor billboards, automotive, lighting, display backlights, traffic signs, projector light sources, and wearable device applications.

Infrared LEDs, which belong to the invisible light LED products, mainly use GaAlAs, GaAs, InGaAsP as luminescent materials, and are applied in remote control, wireless mouse, communication module, IrDA, optical coupler, short-distance optical fiber, infrared lighting and other markets, and then expand the applications to potential markets such as mobile phones, automotive, surveillance, and biomedicine, enabling remote control of TV, music systems and lighting equipment by infrared technologies. Infrared LED is a product with relatively mature technology and low-cost, and its applications are gradually becoming diversified with continuing development. With the rise of various emerging applications, such as security industrial surveillance, mobile device biometrics, virtual reality devices, and digital medical (heartbeat, blood oxygen, blood glucose sensing), spectral sensing, in-vehicle sensing (face recognition, gesture recognition) and applications such as LiDAR, drones, unmanned conveying vehicles, distance sensors, and optical communications in the market, the development focuses on enhancing IR LED products specific for automotive applications, which will create huge growth opportunities in the next few years. 850nm IR LEDs are used in outdoor applications such as pedestrian protection, lane recognition, apron detection and night vision, while 940nm IR LEDs

77 -

are suitable for indoor vehicle applications including gesture recognition, seat occupancy and driver monitoring, and thus driving the market growth growing up.

In recent years, infrared lasers (VCSEL / EEL) have gradually attracted the attention of the market. With the advantages of resonant cavity design, small light divergence angle, high photoelectric conversion efficiency and fast data transmission speed, it has gradually been applied to the consumer market, including distance sensing, automatic focus, mobile phone's 3D face recognition and LiDAR, iris recognition and air and water quality detection, and even provide high-resolution picture quality for car night vision lighting. The recent 5G topic become populr, and the requirements for components in the optical communications field, such as the data transmission capacity, bandwidth and distance of optical fibers, will also be the focus of subsequent development; in the face recognition system of smart phones and the space recognition system of tablet, VCSEL has been being used as a laser light source, and its application penetrates rapidly. 3D sensing is an important indicator in the specifications competition for the flagship phones of mobile phone brands. It is mainly used in the rear camera, and the functions include ranging, image blurring, 3D object recognition, spatial modeling and augmented reality, and are further equipped with 5G transmission functions, it has become the standard equipment for highend models. Research institutes predict that the total production value of 3D sensing VCSELs in 2021 will increase to USD1.842 billion, with an annual growth rate of 53%.

Micro LED is currently the most valued by all aspects of LED industry. Due to its excellent performance, it can be used in a wide range of applications, including mobile phones, wearable watches, car displays, TVs, virtual reality (VR), and augmented reality (AR). And mixed reality (MR) and other fields, as well as AR micro-projection devices with high luminance requirements, automotive HUD projection applications, and even super-large display billboards. Coupled with the recovery of the global automobile market, Micro LED is more widely used in AR, MR devices and the application of automotive panels. According to data from research institutions, it is estimated that in 2024, Micro LED TV and large-scale display applications will have a chip production value of US$2.3 billion.

Ultraviolet LEDs use AlGaN and AlInGaN as materials, which are used in banknote recognition, photoresin hardening, insect trapping, and printing, and are further developed toward higher-level deep ultraviolet sterilization function, 3D printing and other applications. In 2020, the new coronavirus (COVID-19) outbroke globally. UVC, a kind of short-wave ultraviolet rays with a wavelength of 100 nm to 280 nm and the highest energy and the strongest bactericidal power; the principle of sterilization is to directly destroy the structure of DNA and RNA in the center of pathogenic life by exposing them under UVC, so that the formation of the protein that constitutes the microorganism is prevented, resulting in death and loss of reproduction ability. As UVC functions for surface sterilization, static water sterilization, and flowing water sterilization, it can be applied to medical appliances, maternal and child products, surfaces of facilities frequently contacted, such as escalator handrails, and automatic ticket machine buttons, water tanks of fountains, mobile water sterilization modules, consumer home appliances such as water dispensers, air purifiers, and air conditioners, or portable disinfection products; therefore, demands for various pandemic prevention products have risen sharply. According to reports, a manufacturer has developed a portable ultraviolet irradiator with deep ultraviolet LEDs, featuring an emission wavelength of 280 nanometers and a light output of 70 milliwatts. Experiments have confirmed that the product eliminates 99.99% of the virus particles by irradiating the new coronavirus for 30 seconds from 5 cm away.

Looking forward to 2021, as the COVID-19 vaccine has begun to be on the market, and some countries have begun vaccination, it is expected that the pandemic control in the first half of 2021 is expected to gradually stabilize. Together with the continuous expansion of the revitalization policy by the governments of various countries, it is conducive to the strengthening of the domestic and international economic recovery and the downstream application of LED The warming of the market is conducive to driving the overall business environment and the development of the LED industry. In addition, in response to the development trend of emerging technologies such as AI and big data, the demand for LED sensing components and LED interactive display signs has increased. In addition, Taiwan’s LED industry is actively deploying niche markets and making successful transitions. In addition, as the operating contribution from niche market increased in weights, it has promoted the improvement of the industry's prosperity.

78 -

The order of the global LED industry has improved significantly, and the mass production of new Mini LED products has gradually expanded. At the same time, the pandemic has led to an increase in the demand for UV LEDs. It has also benefited from the at-home economy, longdistance business opportunities, and the subsidies provided by Japanese government to promote students to purchase laptop and other positive factors, driving the global demand for notebook, LCD monitors, and tablets to stay stable, supporting the demand for the backlight market. As governments of various countries have gradually relaxed control measures due to the slowdown of the pandemic, the economies in these countries have recovered gradually, and prompted the consumer market rebound.

(2) Supplies

As domestic manufacturers have mature traditional visible light LED production technology, and Chinese manufacturers have joined the LED crystal grain production when the domestic LED crystal grain producers has expanded capacity as the same time, the price competition of traditional visible light LEDs has intensified. In other words, the market was oversupplied. Since the raw materials for upstream epitaxial wafers for the production of high-luminance visible light LEDs are still under Japan’s control, some domestic manufacturers have successively engaged in the development of upstream epitaxy growth technology in recent years, and mainland China local governments subsidized MOCVD equipment procurement led to the rapid development of China’s LED chip market in 2013-2017, growing from CNY8.25 billion to CNY18.80 billion. The market size increased by CNY10.55 billion in five years, with an average annual compound growth rate of 22.9%; with the penetration of LED lighting products, the demand for the LED chip market has climbed. In 2018, the scale of China's LED chip market exceeded CNY20 billion, resulting in an imbalance supply and demand in the industry.

After the global LED industry has gone through many cycles of economy, coupled with the continuous trade disputes between the United States and China, and the reduced Chinese government subsidy policies, China’s LED industry has undergone many reshuffles; in particular, in the second half of 2019, some major manufacturers have withdrawn partially one after another. Meanwhile, since 2020, the COVID-19 pandemic has hit the world, which also affected the expansion of various industries. In addition, when all industries see the long-term development potential of Mini LED, active engagement of LED manufacturers from all over the world have been witnessed. Not only quite a lot of Taiwanese manufacturer launched mass production, the Chinese LED players have also been engaged in. According to statistics from other companies, China has invested CNY38.2 billion since 2019. However, under the influence of the COVID-19 pandemic, the mass production schedules of the Chinese plyaer have been delayed. It is expected that after 2021, mass production would be more obvious within China's Mini LED capacity. Therefore, it is expected that the global LED industry order will continue to maintain a good situation from the view of suppy, especially amid the US-China trade conflict, to avoid disputes over the place of origin, it is getting apparent that LED companies tend to procure from nonChinese supply chain, and which is positive for the growth of Taiwanese companies.

The demand for sensing components used in medical products has risen sharply. However, due to the impact of the pandemic, the demand for LEDs is poor. However, the market demand for invisible light products in LED products has increased significantly, including invisible light products and optical coupling are preparing for price hike. With the continuous expansion of LED downstream applications and the gradual increase in market penetration, emerging markets such as high-value-added lighting, small-pitch displays, and automotive LEDs will bring incremental space to the industry. After industry consolidation, capacity clearing, and industrial automation upgrading, the LED industry is expected to gradually improve under the push of supply and demand improvement. With the most eye-catching Mini LED technology gradually overcoming bottlenecks and reducing overall costs, research institutions estimate that the production value of Mini LED chips in backlight TV applications in 2021 will be USD270 million, demonstrating the opportunities not to be underestimated.

The consolidated company has the ability to produce infrared LEDs, and the infrared wireless data transmission module (IrDA module) manufactured in accordance with the communication standards set by the Infrared Data Transmission Association (IrDA) in the U.S. uses infrared data for data transmission. As this may replace the function of data transmission cables between computers and peripherals, or PDAs, with the low cost, and the frequency range used out of the scope of national laws and regulations, it is expected that the application of infrared LEDs in this area will continue to grow considerably in the future. Although the major applications of infrared LED are still remote control or security control applications, the infrared LED market applications are very wide, including image sensing, body sensing/motion detection, light blocking sensing, proximity switches, position sensing, biometrics, pulse oximetry detection. In the future, the application of infrared LEDs in handheld application devices, including information security and

79 -

health management, and their added values, have a promising margin and it is expected to drive the growth of infrared LED revenues. With the rise of VR devices, iris/face recognition applications, IR LEDs also emerge, and infrared (IR) lighting applications in medical equipment and solid-state lasers continue to increase. On the other hand, from the demand side, IR LEDs and UV LEDs are gradually gaining business opportunities in the sensor and medical markets, respectively. However, this type of application belongs to a more customized market, depending on the different customer use occasions and environments, quite different demand characteristics are generated. It is expected to bring higher margins and competitiveness. In 2020, although the COVID-19 pandemic has affected the application market of industrial curing, plant lighting, and photocatalyst, and thus the market size of UVA and UVB declined, but the global market scale of UVC LEDs in 2020 will perform with a higher growth from 2019, driven by the substantial growth of the market with many sterilization and purification products launched. It is expected that the Company will continue to develop into a higher technological level or a niche market.

Competition niches

The reason why the consolidated company is able to stabilize in the highly competitive LED market and maintain a certain market share, its competitive niche roughly are analyzed as follows: (1) Industry aspect Because LED products have the advantages of energy saving, less heat generation, compact, long life and fast response rate, they have long been widely used in consumer electronics, computer information/OA products, communication products, automobiles, signs/display billboards, industrial instrumentation/equipment and other fields. The new application fields are still being explored and developed, such as medical treatment, security monitoring, wearable devices, and smart lighting applications. Besides, the technology-intensive industrial characteristic of the LED industry drives the upgrading of traditional industries, and supports the development of other key technology industries. LED may be regarded as the star industry of the 21st century, so the overall industry prospects should be optimistic.

Because the domestic LED industry has been developing in Taiwan for more than 40 years since 1972, the technical capabilities of the middle and lower reaches are mature and stable, and the division of labor between the upper, middle and lower reaches is complete, and it can be integrated with related industries such as information, electronics, and semiconductors. Therefore, the overall industrial environment has a competitive advantage. (2) Company aspect A. The capacity has reached the economic scale

In recent years, the consolidated company has expanded its capacity and established a new 6-inch wafer fab. It is one of the top ten local crystal grain manufacturers in Taiwan. After the consolidated company’s factories officially launched mass-production, the active improvement of yield will help reduce costs and increase product competitiveness. B. Good and stable product quality

The products of the consolidated company have been awarded with ISO 9001, IATF16949, ISO14001, ISO45001, CNS45001, QC080000 and IECQ HSPM international quality certifications. Its products are of high quality and stable, trusted by customers, and have a good reputation in the industry.

C. Strong R&D and manufacturing capacity of IR LED and light-receiving components The production technology of the consolidated company in the early stage mainly came from the technology transfer of the Optoelectronics Laboratory of the Industrial Technology Research Institute. However, the Company has continued to develop new products, new technologies and improve the manufacturing process on its own afterwards. The consolidated company owns the R&D and manufacturing capabilities of infrared LEDs and light-receiving elements, and the consolidated company has successfully developed and sold high-speed infrared LEDs and high-speed detection elements for infrared wireless data transmission modules. Also the consolidated company possesses patents of low-noise components. Since infrared LEDs and light-receiving components are the future development trend, the consolidated company will have more competitive edges due to its patents on gallium arsenide (GaAs) infrared expitaxy growing technology and low-noise light-receiving components. D. Successful research and development of optical communication components

The consolidated company completed the development of photodetectors (PD) and laser power monitoring components (Monitor PD) required in optical communication devices in 2014. In 2015, we completed the development of high-speed optical detectors (PD) required for 10G GPON, and cooperated with an major American optical communication laser manufacturers to expand into 10G GPON applications. The continuous LTE infrastructure construction will push up the demand, and 10G products applied in the field of cloud

80 -

computing, will continue to be benefited from the growth of customer shipments. PD products from 155M~10G single chip and 40G~100G array chip both enable customers to meet various application requirements of optical communication (EPON; GPON; regional Ethernet, etc.). Regardless it is analog or digital communication applications, the laser monitoring power PD has been expanded into the market for stable supply. In 2018, it has successfully developed side inspection diode components for COB package applications. With the development of communication systems, 4G and 5G mobile communications have become popular year by year. The new generation of communication systems must provide higher transmission rates and bandwidth services to meet the needs of users, which also makes the optical communication component industry promising.

E. Complete product lines and high value-added application products created

Since infrared LEDs are often used in conjunction with light-receiving elements, the consolidated company has products of various specifications such as visible light LEDs, infrared LEDs, and light-receiving elements, fully meeting the diverse needs of customers and provide a one-stop procurement to customers, so it is easier to grasp the source of customers. In addition, it has stepped into the professional production of high value-added application products, and is developing toward the direction of solutions and internationalization, including high-current applications of stage lights and related lighting applications, while providing a complete stage lighting system supporting related technologies, with complete supplementary technologies of stage lighting, mainly the lighting application fields and related flip chip applications are the main focus, and products geared towards, toward high-power, multicrystal, and versatile applications as the focuses of development.

Positive and negative factors for future development, and the company's response to such factors (1) Positive factors
A. The products have many advantages and a wide range of applications

LEDs have the advantages of low heat generation, low power consumption, compact size, long life, and fast response rate. They have been widely used in consumer electronics, signs, communications, information, automotive, medical, and plant lighting. Since the new products and new usages are developed continuously, the demand continues to expand and the market outlook is very good.

B. Good quality and diversified products

The consolidated company has the manufacturing and development capabilities of visible light, infrared LEDs and light-receiving elements, fully meeting customer needs, and the consolidated company's products are of high quality, recognized by customers and certified with number of international quality certifications including ISO 9001, IATF16949, ISO14001, ISO45001, and CNS45001.

C. Strong R&D and manufacturing capacity of IR and light-receiving components

The consolidated company has the ability to manufacture infrared LEDs and lightreceiving components, and possesses patents for low-noise components in the regard of lightreceiving components, making the consolidated company more competitive in the control component market.

D. Because the domestic LED industry has been developing in Taiwan for more than 40 years since 1972, the technical capabilities of the mid- and downstream are mature and stable, with the complete specialty division among the up-, mid- and downstream, and incorporation with the information, electronics and semiconductor industries, the overall industrial environment has competitive advantages. In addition, the consolidated company has expanded its capacity in recent years, becoming one of the top ten local crystal grain manufacturers in Taiwan. After the consolidated company’s factories officially launched mass-production, the costs have been reduced and product competitiveness has been increased.

(2) Negative factors and responses

A. The source of raw materials is mainly concentrated in Japan, to which the dependence is high. At present, in the regard of LED upstream raw materials, especially epitaxial wafers, Japan has the advanced technologies and economic scale, and thus domestic LED midstream chip manufacturers mostly imported the raw materials from Japan with the consideration of quality and costs; which leads the risk of concentration of raw material sources. Countermeasures:

1.Japan's Shin-Etsu Semiconductor has cooperated with Taiwan to set up a factory in Hsinchu Science Industrial Park in 1996 to manufacture gallium phosphide (GaP) epitaxial wafers. The direct supply from here may satisfy part of the company's demand for raw materials, thereby reducing its dependence on Japan.
2.Actively purchase epitaxial wafers from regions other than Japan to diversify the risk of procurement concentration.
81 -
3.Cooperate with domestic GaP wafer fabs to reduce dependence on Japan.
4.Establish long-term cooperative relations with major raw material suppliers to stabilize the source of raw materials.
5.Continue to develop and improve the production technology capabilities of epitaxial wafers on our own, such as the quality and quantity of GaAs epitaxial wafers, to reduce dependence on foreign epitaxial wafers.
B. Risk of exchange rate changes

Most of the main raw materials of the consolidated company are imported from abroad, leading to the risk of exchange rate fluctuations. Faced with exchange rate risks, the countermeasures of the consolidated company are as follows:

  - 1.Sale or purchase of forward foreign exchange in advance.

  - 2.Strengthen procurement capabilities, reduce costs of raw material purchase, and negotiate sharing exchange rate risks with suppliers. If the magnitude exchange rate changes increases, transaction price will be renegotiated with the supplier.

  - 3.Strengthen the ability to develop sources of incoming materials and avoid excessive influence from a single currency exchange rate.

  - 4.The quotation system with customers include the consideration of selling price adjustment due to exchange rate changes to protect the Company's existing profits.

  - 5.Pay the expenditure in foreign currency generated from importation with the export revenue in same currency, to shift partial FX risks.

  - 6.Adjust foreign currency positions based on exchange rate changes.

(II) Key usages and manufacturing processes for main products
Key usages of main products

The products of the combined company are mainly divided into two categories: compound semiconductor devices (light-emitting devices) and silicon (SI) devices (light-receiving devices) according to their functions. The important uses of the main products are as follows:

(1) Compound semiconductor components
Visible LED products
- Key usages: Small light bulbs, digital displays, dot matrix displays, light source displays for fax machines, home appliances, communications, computers, automobiles and other consumer products indicating components, traffic signs, outdoor display screens, and automotive dashboards.
Infrared light LED products
- Key usages: Transmitting components such as mouse, remote control, electronic toll collection system, wireless transmission products, among other things.
Optical communication products

Key usages: fiber optical communication module.

(2) SI components
Photo-transistor components (PT)

Key usages: Optical coupler, optical interrupter, proximity sensor (non-contact sensor), infrared monitor control, and other components for monitoring.

Photo-Diode (PD)

Key usages: Components for remote control reception of consumer products such as home appliances, communications, computers, and automobiles, medical care (oximeter and pregnancy test), fire and smoke detection, mechanical positioning, motor speed measurement, and panel touch.

Zener Diode (ZD)

Key usages: Application components for LED packaging (stabilization, rectification, electrostatic protection, bridging, leakage detection).

Transient voltage suppressors (TVS) Key usages: Electrostatic protection components for consumer products (mobile phones, computers, handheld devices, etc.).
Chip resistance (CR) Key usages: LED packaging, application components of various circuit boards (voltage adjustment, and current control).
82 -

2. Production process

(1) Compound semiconductor components

Epitaxy wafer Silicon wafer (2) SI components	Diffusion Lapping Deposition Photo Chemistry Alloy sintering Dicing Testing and classification Stock-in IQC Diffusion Photo Metal Alloy Lapping Testing and classification Dicing Quality control Stock-in

83 -

(III) Supplies of key materials

The main raw material of the consolidated company is epitaxy wafers (mainly containing GaP, GaAs/GaAlAs, GaP/GaAsP, InGaAs/InP, Epi wafer and Si wafer). As the upstream manufacturers of LEDs in Japan, China, Germany, Europe and Americas have almost covered the world's upstream raw material market for LEDs with their advanced technology and economic scale, based on product quality and cost considerations and industry characteristics, and the effects of industrial natures, the source of raw materials of the consolidated company is concentrated in a few large foreign factories.

Due to the long-term relationship between the consolidated company and the aforementioned large factories, even there is a concentration of raw materials, there should be no shortage of materials; and in recent years, the consolidated company has actively sought other sources of supply and domestic manufacturers, while foreign manufacturers have also come to Taiwan for establishing factories, the risk of concentration of raw material sources shall be reduced. (IV) Major customers and suppliers in the latest 2 years

Major clients (accounted for 10% or more of the net sales amount)

Due to the long-term relationship between the consolidated company and the aforementioned large factories, even there is a concentration of raw materials, there should be no shortage of materials; and in recent years, the consolidated company has actively sought other sources of supply and domestic manufacturers, while foreign manufacturers have also come to Taiwan for establishing factories, the risk of concentration of raw material sources shall be reduced. (IV) Major customers and suppliers in the latest 2 years 1. Major clients (accounted for 10% or more of the net sales amount)	Due to the long-term relationship between the consolidated company and the aforementioned large factories, even there is a concentration of raw materials, there should be no shortage of materials; and in recent years, the consolidated company has actively sought other sources of supply and domestic manufacturers, while foreign manufacturers have also come to Taiwan for establishing factories, the risk of concentration of raw material sources shall be reduced. (IV) Major customers and suppliers in the latest 2 years 1. Major clients (accounted for 10% or more of the net sales amount)	Due to the long-term relationship between the consolidated company and the aforementioned large factories, even there is a concentration of raw materials, there should be no shortage of materials; and in recent years, the consolidated company has actively sought other sources of supply and domestic manufacturers, while foreign manufacturers have also come to Taiwan for establishing factories, the risk of concentration of raw material sources shall be reduced. (IV) Major customers and suppliers in the latest 2 years 1. Major clients (accounted for 10% or more of the net sales amount)	Due to the long-term relationship between the consolidated company and the aforementioned large factories, even there is a concentration of raw materials, there should be no shortage of materials; and in recent years, the consolidated company has actively sought other sources of supply and domestic manufacturers, while foreign manufacturers have also come to Taiwan for establishing factories, the risk of concentration of raw material sources shall be reduced. (IV) Major customers and suppliers in the latest 2 years 1. Major clients (accounted for 10% or more of the net sales amount)	Due to the long-term relationship between the consolidated company and the aforementioned large factories, even there is a concentration of raw materials, there should be no shortage of materials; and in recent years, the consolidated company has actively sought other sources of supply and domestic manufacturers, while foreign manufacturers have also come to Taiwan for establishing factories, the risk of concentration of raw material sources shall be reduced. (IV) Major customers and suppliers in the latest 2 years 1. Major clients (accounted for 10% or more of the net sales amount)	Due to the long-term relationship between the consolidated company and the aforementioned large factories, even there is a concentration of raw materials, there should be no shortage of materials; and in recent years, the consolidated company has actively sought other sources of supply and domestic manufacturers, while foreign manufacturers have also come to Taiwan for establishing factories, the risk of concentration of raw material sources shall be reduced. (IV) Major customers and suppliers in the latest 2 years 1. Major clients (accounted for 10% or more of the net sales amount)	Due to the long-term relationship between the consolidated company and the aforementioned large factories, even there is a concentration of raw materials, there should be no shortage of materials; and in recent years, the consolidated company has actively sought other sources of supply and domestic manufacturers, while foreign manufacturers have also come to Taiwan for establishing factories, the risk of concentration of raw material sources shall be reduced. (IV) Major customers and suppliers in the latest 2 years 1. Major clients (accounted for 10% or more of the net sales amount)	Due to the long-term relationship between the consolidated company and the aforementioned large factories, even there is a concentration of raw materials, there should be no shortage of materials; and in recent years, the consolidated company has actively sought other sources of supply and domestic manufacturers, while foreign manufacturers have also come to Taiwan for establishing factories, the risk of concentration of raw material sources shall be reduced. (IV) Major customers and suppliers in the latest 2 years 1. Major clients (accounted for 10% or more of the net sales amount)	Due to the long-term relationship between the consolidated company and the aforementioned large factories, even there is a concentration of raw materials, there should be no shortage of materials; and in recent years, the consolidated company has actively sought other sources of supply and domestic manufacturers, while foreign manufacturers have also come to Taiwan for establishing factories, the risk of concentration of raw material sources shall be reduced. (IV) Major customers and suppliers in the latest 2 years 1. Major clients (accounted for 10% or more of the net sales amount)	Due to the long-term relationship between the consolidated company and the aforementioned large factories, even there is a concentration of raw materials, there should be no shortage of materials; and in recent years, the consolidated company has actively sought other sources of supply and domestic manufacturers, while foreign manufacturers have also come to Taiwan for establishing factories, the risk of concentration of raw material sources shall be reduced. (IV) Major customers and suppliers in the latest 2 years 1. Major clients (accounted for 10% or more of the net sales amount)	Due to the long-term relationship between the consolidated company and the aforementioned large factories, even there is a concentration of raw materials, there should be no shortage of materials; and in recent years, the consolidated company has actively sought other sources of supply and domestic manufacturers, while foreign manufacturers have also come to Taiwan for establishing factories, the risk of concentration of raw material sources shall be reduced. (IV) Major customers and suppliers in the latest 2 years 1. Major clients (accounted for 10% or more of the net sales amount)	Due to the long-term relationship between the consolidated company and the aforementioned large factories, even there is a concentration of raw materials, there should be no shortage of materials; and in recent years, the consolidated company has actively sought other sources of supply and domestic manufacturers, while foreign manufacturers have also come to Taiwan for establishing factories, the risk of concentration of raw material sources shall be reduced. (IV) Major customers and suppliers in the latest 2 years 1. Major clients (accounted for 10% or more of the net sales amount)	Due to the long-term relationship between the consolidated company and the aforementioned large factories, even there is a concentration of raw materials, there should be no shortage of materials; and in recent years, the consolidated company has actively sought other sources of supply and domestic manufacturers, while foreign manufacturers have also come to Taiwan for establishing factories, the risk of concentration of raw material sources shall be reduced. (IV) Major customers and suppliers in the latest 2 years 1. Major clients (accounted for 10% or more of the net sales amount)
Unit: NTD thousands;%
Year	2019				2020				Q1 2021
Item	Name	Amount	Percentage to the whole-year net sales amount (%)	Relationship with the issuer	Name	Amount	Percentage to the whole-year net sales amount (%)	Relationship with the issuer	Name	Amount	Percentage to net sales amount of the current year up to the previous quarter (%)	Relationship with the issuer
1	CustomerC	297,628	11.81	None	Customer A	411,112	16.93	None	Customer A	137,325	18.08	None
2	-	-	-	-	Customer B	261,307	10.76	None	Customer B	99,238	13.07	None
3	Others	2,222,227	88.19	-		1,756,197	72.31		Others	522,871	68.85	-
		2,519,855	100.00			2,428,616	100.00			759,434	100.00

Reason of changes: the demanded quantity of the end user increased

2. Major suppliers (accounted for 10% or more of the net purchase amount)

No manufacturer of the consolidated company accounted for more than 10% of the net purchases in 2019 and 2020, and the first quarter of 2021, so the amount of the largest supplier was also disclosed.

2. Major suppliers (accounted for 10% or more of the net purchase amount) No manufacturer of the consolidated company accounted for more than 10% of the net purchases in 2019 and 2020, and the first quarter of 2021, so the amount of the largest supplier was also disclosed.	2. Major suppliers (accounted for 10% or more of the net purchase amount) No manufacturer of the consolidated company accounted for more than 10% of the net purchases in 2019 and 2020, and the first quarter of 2021, so the amount of the largest supplier was also disclosed.	2. Major suppliers (accounted for 10% or more of the net purchase amount) No manufacturer of the consolidated company accounted for more than 10% of the net purchases in 2019 and 2020, and the first quarter of 2021, so the amount of the largest supplier was also disclosed.	2. Major suppliers (accounted for 10% or more of the net purchase amount) No manufacturer of the consolidated company accounted for more than 10% of the net purchases in 2019 and 2020, and the first quarter of 2021, so the amount of the largest supplier was also disclosed.	2. Major suppliers (accounted for 10% or more of the net purchase amount) No manufacturer of the consolidated company accounted for more than 10% of the net purchases in 2019 and 2020, and the first quarter of 2021, so the amount of the largest supplier was also disclosed.	2. Major suppliers (accounted for 10% or more of the net purchase amount) No manufacturer of the consolidated company accounted for more than 10% of the net purchases in 2019 and 2020, and the first quarter of 2021, so the amount of the largest supplier was also disclosed.	2. Major suppliers (accounted for 10% or more of the net purchase amount) No manufacturer of the consolidated company accounted for more than 10% of the net purchases in 2019 and 2020, and the first quarter of 2021, so the amount of the largest supplier was also disclosed.	2. Major suppliers (accounted for 10% or more of the net purchase amount) No manufacturer of the consolidated company accounted for more than 10% of the net purchases in 2019 and 2020, and the first quarter of 2021, so the amount of the largest supplier was also disclosed.	2. Major suppliers (accounted for 10% or more of the net purchase amount) No manufacturer of the consolidated company accounted for more than 10% of the net purchases in 2019 and 2020, and the first quarter of 2021, so the amount of the largest supplier was also disclosed.	2. Major suppliers (accounted for 10% or more of the net purchase amount) No manufacturer of the consolidated company accounted for more than 10% of the net purchases in 2019 and 2020, and the first quarter of 2021, so the amount of the largest supplier was also disclosed.	2. Major suppliers (accounted for 10% or more of the net purchase amount) No manufacturer of the consolidated company accounted for more than 10% of the net purchases in 2019 and 2020, and the first quarter of 2021, so the amount of the largest supplier was also disclosed.	2. Major suppliers (accounted for 10% or more of the net purchase amount) No manufacturer of the consolidated company accounted for more than 10% of the net purchases in 2019 and 2020, and the first quarter of 2021, so the amount of the largest supplier was also disclosed.	2. Major suppliers (accounted for 10% or more of the net purchase amount) No manufacturer of the consolidated company accounted for more than 10% of the net purchases in 2019 and 2020, and the first quarter of 2021, so the amount of the largest supplier was also disclosed.
Unit: NTD thousands;%
Year	2019				2020				Q1 2021
Item	Name	Amount	Percentage to the whole-year net purchase amount (%)	Relationship with the issuer	Name	Amount	Percentage to the whole- year net purchase amount (%)	Relationship with the issuer	Name	Amount	Percentage to net purchase amount of the current year up to the previous quarter (%)	Relationship with the issuer
1	CompanyA	78,584	6.75	None	CompanyA	117,578	9.96	None	CompanyA	39,696	11.11	None
2	Others	1,084,894	93.25	－	Others	1,062,843	90.04	－	Others	317,574	88.89	－
	Net purchase amount	1,163,478	100.00	－	Net purchase amount	1,180,421	100.00	－	Net purchase amount	357,270	100.00	－

Reason of changes: no material deviation

84 -

(V) Table of Production and Sales Volume and Value in the Recent Two Years

Table of Production Volume and Value in the Recent Two Years

Unit: NT$ thousand

Year Production Volume and Value Main products (orby segment)	Year Production Volume and Value Main products (orby segment)	2019	2019	2019	2020	2020	2020
		Capacity	Production Volume	Production Value	Capacity	Production Volume	Production Value
Light emittingcomponent- thousandpieces		11,000,000	7,788,272	802,003	11,000,000	8,665,631	827,979
Light-receiving components	thousand pieces	13,500,000	9,288,526	676,368	13,500,000	11,783,099	797,325
	Pieces	144,000	89,534	130,667	174,000	101,615	137,939
LED lightingdevice(piece)		2,100,000	2,057,601	224,538	1,800,000	1,641,252	164,826
Others(Note 1)		－	－	4,532	－	－	7,477
Total		26,744,000	19,223,933	1,838,108	26,744,000	22,191,597	1,935,546

Note 1: Other products measured at different units, and thus capacity and production volume are not listed.

Table of Sales Volume and Value in the Recent Two Years

Table of Sales Volume and Value	Table of Sales Volume and Value	Table of Sales Volume and Value	Table of Sales Volume and Value	Table of Sales Volume and Value	Table of Sales Volume and Value	in the Recent Two Years	in the Recent Two Years	in the Recent Two Years	in the Recent Two Years
						Unit: NT$ thousand 2020 Domestic sales Export Volume Value Volume Value 633,899 122,879 7,806,529 800,382 2,540,588 184,869 8,976,726 872,433 4,319 11,616 99,515 164,927 1,601,024 211,103 90,960 23,372 － 25,608 － 11,427 4,779,830 556,075 16,973,730 1,872,541
Year Sales volume and value Main products (or by segment)		2019				2020
		Domestic sales		Export		Domestic sales		Export
		Volume	Value	Volume	Value	Volume	Value	Volume	Value
Light emitting component- thousand pieces		729,473	147,061	7,032,093	777,565	633,899	122,879	7,806,529	800,382
Light- receiving components	thousand pieces	2,259,987	174,324	7,574,660	696,213	2,540,588	184,869	8,976,726	872,433
	Pieces	5,318	14,147	81,973	146,235	4,319	11,616	99,515	164,927
LED lighting device (piece)		1,947,041	285,508	65,352	19,571	1,601,024	211,103	90,960	23,372
Others (Note1)		－	27,457	－	10,298	－	25,608	－	11,427
Total		4,941,819	648,497	14,754,078	1,649,882	4,779,830	556,075	16,973,730	1,872,541

Note 1: Other products measured at different units, and thus sales volume are not listed.

85 -

III. Number of Employees, Average Years of Service, Average Age, and Education Background Distribution in the Two Most Recent Fiscal Years

Employees’ Information in the Two Most Recent Fiscal Years up to the Date of Publication of the Annual Report

Employees’Information in the Two Most Recent Fiscal Years up to the Date of Publication of the Annual Report	Employees’Information in the Two Most Recent Fiscal Years up to the Date of Publication of the Annual Report	Employees’Information in the Two Most Recent Fiscal Years up to the Date of Publication of the Annual Report	Employees’Information in the Two Most Recent Fiscal Years up to the Date of Publication of the Annual Report	Employees’Information in the Two Most Recent Fiscal Years up to the Date of Publication of the Annual Report
March 31,2021
Year		2019	2020	2021 up to March 31, 2021
Number of employees	Technicians	196	197	196
	Administrative clers	200	157	158
	Operators	609	588	609
	Total	1005	942	963
Average age		37.81	38.48	38.38
Average years ofservice		7.60	8.24	8.15
Educational background distribution	Doctoral Degree	0.20	0.11	0.10
	Master degree	5.77	5.94	5.71
	College	56.81	53.93	56.49
	Senior highschool	23.78	26.22	24.61
	Below senior high school	13.44	13.80	13.09

IV. Contribution to environmental protection

(I) Losses (including damage compensations) and fines incurred due to pollution of environment in the last year up till the publication date of this annual report:

Renai Plant violated Paragraph 1, Article 20 of the Air Pollution Control Act on September 15, 2020, and was fined NT$135,000 under Subparagraph 1, Paragraph 1, Article 62 of the Air Pollution Control Act.

(II) Response strategies, improvements and possible expenses:

The Company expects to incur NT$200,000 for the improvement of acid emissions monitoring system to facilitate more timely response.

V. Labor-management relations

(I) Availability and execution of employee welfare, education, training and retirement policies; elaborate on the agreements between employers and employees, and protection of employees' rights:

Employee welfare measures

Employees are entitled to Labor Insurance, National Health Insurance, group insurance, and dependents' group insurance coverage.
Employees may receive rewards for successful registration of patents; the Company pays quarterly bonuses depending on operational performance.
The Company offers facilities such as canteen, gym, massage room, carpark, and nursery room for its employees. Employees are also entitled to rental subsidies.
Employees may enjoy benefits such as wedding subsidy, funeral subsidy, childbirth subsidy, festive vouchers, and birthday vouchers.
Domestic/foreign trip subsidies, year-end banquet, and lottery draw.
Gathering events (Family Day, Mid-autumn barbecue etc.)
Discount at partnered merchants (about 100 merchants covering every lifestyle aspect)
The Company subsidizes inter-department gatherings as a means to unite employees, promote open communication, and build up productive working relationship across departments.
The Employee Welfare Committee arranges welfare measures and organizes labor-management meetings on a quarterly basis to promote productive working relationship and improve employment terms as well as workers' living and working environment. By promoting assistance and co-dependence, the committee helps ensure mutual benefit and harmony between labor and the management.
In addition to offering statutory minimum protections, the Company contributes 0.115% of monthly revenues and 40% of scrap income to employee welfare fund.
The Company is dedicated to promoting healthy workplace, and has been awarded "Badge of Accredited Healthy Workplace" by the Health Promotion Administration, Ministry of Health and Welfare, since 2012. The Company organizes employee health checkup, special hazard checkup, and new recruit checkup on a regular basis, and adopts a risk-based approach towards managing and promoting employees' health.
Health promotion and fitness events such as: weight loss challenge, eye sight protection, vaccination, healthy diet course, and complimentary massage service are organized on a yearly basis.
Specialized practices are adopted to control sudden outbreaks of diseases such as: COVID-19, seasonal
86 -

flu, dengue fever, and tuberculosis.

Workplace health risk assessment: workload assessment and management, ergonomic hazard prevention, feminine health assessment and protection, and violence prevention and control.
The Company has stationed physicians available to provide employees with health information, consultation, assessment, and recommendation at plant premise.

Continuing education and trainings of employees

For talent cultivation, the consolidated company upholds the concept of training for career development, and strives to improve the quality of human resources and future management talents, in order to shape a good culture and create higher operating performance of the Company. In order to cultivate the talents needed for the company's business development, the annual training planning is formulated based on the business conditions, to strengthen talent development and professional skills through the talent cultivation system.

After the employees of the consolidated company report to onboard, the orientation will be conducted for new recruits. New recruits will be given quality concepts and company quality policy courses in accordance with the new recruits’ orientation regulations, so that they will have quality awareness during the work process and always monitor the quality of work. Arrange general safety, health and hazard general knowledge courses, to ensure the safety and health of employees and prevent occupational disasters.

Certain employees need to be certified and regularly assessed to ensure that their abilities meet the qualifications.

The number of hours of training held in 2020 was about 3,656.5 hours, the total number of attendanees was about 1,018, and the total training expense was about NT$228,110. The training results are as follows:

ows:
Category	Attendees	Training hours	Training expense
Management courses	35	140	228,110
General knowledge courses	106	132
Qualitycourses	81	387
Environmental, safety, and health courses	432	1,254.5
Professional courses specific to segments	202	783.5
Intellectual properties/trade secrets/ethical corporate management	56	164.5
Orientation for new recruits	106	795
Total	1,018	3,656.5

Retirement system

The consolidated entity has implemented an employee retirement policy in accordance with the Labor Standards Act that outlines the retirement condition, pension payment standards, and application procedures. A Labor Pension Supervisory Committee has been assembled to oversee uses of the labor pension fund. The Company makes monthly pension contributions equivalent to 2% of employees' gross salaries. These sums are deposited into a separate account held under Bank of Taiwan in the name of Labor Pension Supervisory Committee to protect workers' interests. Since July 1, 2005, the Company has been complying with the Labor Pension Act and making contributions equal to 6% of employees' monthly salary into their individual pension accounts held under the Bureau of Labor Insurance. For employees who opt to make voluntary contributions, the Company deducts voluntary contributions from their monthly salaries and credits these amounts into their individual pension accounts held under the Bureau of Labor Insurance.

87 -

Applicable laws	Labor Standards Act	Labor Pension Act
Method of contribution	The Company makes monthly pension contributions equivalent to 2% of employees' gross salaries. These sums are deposited into a separate account held under Bank of Taiwan in the name of Labor Pension Supervisory Committee.	The Company makes monthly pension contributions equivalent to 6% of employees' gross salaries to their individual accounts held with the Bureau of Labor Insurance.
Amount of contribution	The labor pension fund as of December 2020 had a balance of NT$54,005,000	Pension fund expenses recognized in 2020 amounted to NT$19,124,000.

The consolidated entity is subject to the following rules of Labor Pension Act:

Voluntary retirement:
Workers that meet any of the following conditions may apply for voluntary retirement: (for employees who have opted for the Labor Pension Act, the corresponding rules shall apply)
(1) Aged 55 or above with at least 15 years of service.
(2) Having completed at least 25 years of service.
(3) Aged 60 or above at least 10 years of service.
Mandatory retirement:
The consolidated entity many not force employees to retire except in any of the following circumstances:
(1) Aged 65 or above.
(2) Physical or mental disability that renders the employee unfit to work.

The age criteria mentioned in Subparagraph 1 of the preceding Paragraph can be adjusted for positions that involve danger, physical strength, or special requirements, subject to the authority's approval. However, the age criteria must be no less than 55.

Pension payment standards:
(1) For employees who opted to continue adopting pension rules of the Labor Standards Act after the Labor Pension Act came into effect and those who opted to have years of service carried forward from the Labor Standards Act to the Labor Pension Act, pension benefits are calculated according to the rules and standards outlined in Articles 84-2 and 55 of the Labor Standards Act.
(2) Employees who have accumulated years of service in the manner described in the preceding Paragraph and are subject to the mandatory retirement rules specified in Subparagraph 2, Paragraph 1, Article 54 of the Labor Standards Act are entitled to 20% additional benefits under Subparagraph 2, Paragraph 1, Article 55 of the Labor Standards Act if the physical/mental disability is caused as a result of the duties performed.
(3) For employees who are subject to the pension scheme specified under the Labor Pension Act, the consolidated entity makes contributions equal to 6% of their monthly salary to their personal pension accounts.
Pension benefit payment: The amount of pension benefits payable to employees shall be paid within 30 days after the day of employee's retirement.

Enforcement of labor agreements and employee rights

Labor agreement: The consolidated entity is governed by the Labor Standards Act and all labor-related policies and employee manuals are established in compliance with the Labor Standards Act. The consolidated entity places great emphasis on employees' benefits and communication, and therefore has been able to maintain harmonic employment relations. Nevertheless, the consolidated entity will continue promoting communication and eliminate possible disputes for more harmonic employment relations.
Protection of employees' interests: The consolidated entity has an employee opinion box in place to collect complaints and opinions from employees, which provide reference for future improvements. Furthermore, a "sexual harassment" hotline has been set up for employees to report misconducts.
Employees' behaviors and moral principles
The consolidated entity has outlined employee code of conduct as part of its work rules, which requires employees to comply with the following principles over the course of service:
(1) Obey all rules of the Company.
(2) Follow the command and supervision of managers.
(3) Devote full attention to the tasks assigned.
(4) Be loyal and act in the Company’s best interests.
(5) Refrain from revealing or inquiring salary package of other employees.
88 -
(6) Refrain from exploiting the vested authority for acceptance of gift, fraud, or any other action against the Company’s interests.
(7) Wear and maintain proper custody of ID badges according to the Company's policies.
(8) Maintain appropriate appearance and treat customers and colleagues with respect.
(9) Act and speak with discretion, and accomplish the work duties assigned.
(10) Refrain from bringing firearms, blades, hazardous items, contrabands, or items unrelated to work activities into the workplace; refrain from removing Company properties off plant premise without permission.
(11) Comply with worker safety and health regulations, maintain safety, health, and cleanliness of the workplace and nearby environment, and take actions to prevent burglary, fire, and natural disasters.
(12) Refrain from downloading or copying software without permission, and refrain from transmitting data and information via e-mail or the Internet that may cause harm to others.
(13) Employees are bound by their duty of loyalty and integrity to maintain confidentiality of all business or technological secrets gained from work, whether during or after their employment, and shall refrain from revealing, informing, handing, transferring, publishing, or releasing the above information to others.

Work environment and employees’ safety

The consolidated entity recognizes employees as the pillar that supports a business, and is therefore dedicated to creating a safe, healthy, and comfortable work environment and encourages employees to participate actively in work safety programs and emergency response drills for improved work safety awareness. Regular tests are also conducted in areas where special gases are used. As the world enters a green era, pollution prevention has emerged to become a key issue in business management. Through introduction of various initiatives and improvement measures, the Company aims to effectively reduce industrial waste, reuse resources, raise workers' safety awareness, promote safety and comfort of the operating environment, and contribute to environmental protection as part of its corporate social responsibilities.

The Company makes plans, takes samples, conducts monitoring and tests, and performs analyses to gain full understanding of the state and condition of workers' work environment. These actions are taken to protect workers from the harm of hazardous substances present in the workplace, and to provide workers with a safety and comfortable work environment.
The Company tests its operating environment twice a year to gather information on the work condition that employees are exposed to, so that effective precautionary measures can be taken.
The Company has established its own safety self-inspection rules to serve as guidance for selfinspection tasks. Through division of responsibility, total participation, regular inspection, key area inspection, operational inspection, and security patrol, the Company ensures that safety and health self-inspections are duly performed to keep machinery and equipment operating at a safe state, and that the operating environment is maintained properly to be free of hazard. These practices help secure safety of personnel and integrity of the Company's equipment and property. The Company conducts four different types of self-inspection, namely: regular inspection (including overall inspection and operating environment test), key area inspection, operational inspection, and security patrol. Both the scope and frequency of inspection have complied with laws.

pe and frequency of inspection have complied with laws.	pe and frequency of inspection have complied with laws.
Frequency of safety inspections
Chairman and President	Unscheduled - once to twice a month
Grade 1 manager	Twice a month
Grade 2 manager	Four times a month
Safety/environment personnel	Daily

89 -
All dangerous machinery and equipment used in the Company are being managed in a manner that complies with laws. All equipment that have been designated to be highly dangerous, whether by law or by the Company, are subjected to inspections before, during, and after use. Establishment (amendment) of safety/health self-inspection policies and equipment self-inspection checklists for all machinery, equipment, tools, operating environment, and personnel within plant premise.
(1) Inspection and reporting of new machinery, equipment, tools, and workplace within plant premise.
(2) General inspection of machinery, equipment, tools, and workplace within plant premise, and the

handling, response, and follow up of abnormal findings.

Item	Regular inspection	Key area inspection	Operational inspection
Electric bike	Every 3 years	Yearly	Daily
Ordinary vehicle	Every 3 months	--	Daily
Car jack	Every 3 months	--	Daily
Aerial work platform	Yearly	Monthly	Daily
Construction vehicle	Yearly	Monthly	Daily
Forklift	Yearly	Monthly	Daily
Powered centrifugal machinery	Yearly	--	--
Stationary crane	Yearly	Monthly	Daily

Evacuation drill (FAB: twice a year; Office: once a year) This drill is organized to help employees familiarize with the evacuation route and process. By conveying key points and promoting proper awareness on evacuation, the Company hopes to minimize losses and ensure the safety of its personnel in the event of emergency. Basis: To proceed according to "Emergency Response Rules."
Fire safety and special operation safety promotion (once a quarter)

This course was created to raise employees' awareness towards safety, health, and protection.

Below are more detailed descriptions of the consolidated entity’s management goals, measures, and solutions regarding the work environment, personnel safety, and protection:

Serial No.	Management goal	Description of issues or requirements	Solutions executed
1	Waste reduction, recycling, and reuse	Waste from production activities is commonly disposed as general waste, which results in the increase of industrial waste.	Waste from production activities is duly sorted; recyclable and reusable waste is handed over to qualified service providers for further treatment.
2	Reduction of waste pallets	All incoming materials are shipped with wooden pallets. These wooden pallets take up much space and are utilized at such a low rate that the Company has to incur additional costs just to remove them.	Pallets are given to business partners in need or sent to waste wood treatment facilities approved by the Environmental Protection Administration. By reducing the number of waste pallets, the Company incurred lower expenses on waste disposal.
3	Effective prevention against leakage of waste motor oil or solvent	Production and equipment maintenance activities produce small volumes of waste motor oil or solvent that can be found in various units.	A temporary storage area has been set up to collect waste motor oil and solvent into a large container. Contents of the container are labeled "recyclable" and are recycled/reused after accumulating to a certain volume.
4	Installation of circuit breaker and protective circuit	Electrical wiring and equipment in certain parts of the plant premise are outdated, which pose risk of power leakage and spark.	Protective devices and shields have been installed to prevent power leakage.
5	Inspection and	To ensure that fire safety	Fire safety facilities are inspected on

90 -

Serial No.	Management goal	Description of issues or requirements	Solutions executed
	repair of fire safety equipment	equipment functions properly in the work environment.	a yearly basis and counted each month. All malfunctioned fire equipment is repaired immediately.
6	Worker health checkup and management	To organize annual health checkup and management for workers.	Health checkups are being arranged according to worker health protection rules. Health checkup results are disseminated to workers as soon as they are ready; findings are consolidated and compiled into health manuals to serve as guidance.
7	Operating environment monitoring	To provide a work environment free of safety and health concerns.	Chemicals and substances in the operating environment are monitored and tested every six months in compliance with laws. Concentration levels above the legal limit will have to be rectified or labeled as soon as possible.
8	Hazardous chemicals labeling and management	Hazardous substances are used in plant premise, and require enhanced management.	A list of hazardous and dangerous items has been created and updates are being made to labels and the substance safety sheet. Workers are trained regularly on the labeling and general knowledge of hazardous chemicals.

(II) Actual or estimated losses arising as a result of employment dispute in the last year up until the publication date of annual report, and any response measures taken: None.

VI. Major contracts

Nature of contract	Parties involved	Contract start/end date	Main contents	Restrictive clauses
Joint development contract	Industrial Technology Research Institute (ITRI)	2018.10.01-2020.03.31	ITRI Technical Service Outsourcing Contract	None
Procurement contract	Tong Yang Mechanical Engineering Co.,Ltd.	2019.08.23~2020.08.23	Kejung Plant - HFD wastewater system expansion work	None
Procurement contract	Tong Yang Mechanical Engineering Co., Ltd.	2019.08.23~2020.08.23	Kejung Plant - Outsourced expansion and improvement of disposal system for HFC organic waste fluid	None
Joint development contract	HIWIN Mikrosystem Corp.	2020.01.06-2025.01.06	Confidentiality agreement for design and production of photodiodes	None
Procurement contract	Yeu Chern Environment Technology Co., Ltd.	2020.05.06-2021.05.06	Kejung Plant - construction of underground tank for recycling of organic waste fluid	None
Joint development contract	Advanced Analog Technology, Inc.	2020.06.18-2023-06.18	Outsourcing contract for development of special integrated circuitry	None
Joint development contract	PlayNitride Display Co., Ltd.	2020.07.01-2023.07.01	Confidentiality agreement for collaborative development of micro photodiode sensor technology	None
Joint development contract	National Chiao Tung University	2020.11.01-2021.10.31	Industry-academia collaboration for development of UV sensor using gallium(III)oxide materials	None

91 -

Six. Financial Overview

I. Summary balance sheet and statement of comprehensive income for the last 5 years

- Summary balance sheet (consolidated) IFRS-compliant

I. Summary balance sheet and statement of comprehensive income for the last 5 years Summary balance sheet (consolidated)- IFRS-compliant	I. Summary balance sheet and statement of comprehensive income for the last 5 years Summary balance sheet (consolidated)- IFRS-compliant	I. Summary balance sheet and statement of comprehensive income for the last 5 years Summary balance sheet (consolidated)- IFRS-compliant	I. Summary balance sheet and statement of comprehensive income for the last 5 years Summary balance sheet (consolidated)- IFRS-compliant	I. Summary balance sheet and statement of comprehensive income for the last 5 years Summary balance sheet (consolidated)- IFRS-compliant	I. Summary balance sheet and statement of comprehensive income for the last 5 years Summary balance sheet (consolidated)- IFRS-compliant	I. Summary balance sheet and statement of comprehensive income for the last 5 years Summary balance sheet (consolidated)- IFRS-compliant	I. Summary balance sheet and statement of comprehensive income for the last 5 years Summary balance sheet (consolidated)- IFRS-compliant
Unit: NTD thousands Year Account 2016 (Note 1) 2017 (Note 1) 2018 (Note 1) 2019 (Note 1) 2020 (Note 1) Financial Information of the current year up to March 31, 2021 (Note2) Current assets 3,316,507 4,330,893 3,390,553 3,501,197 3,452,024 3,494,775 Property, plant, and equipment 1,009,174 1,784,620 1,844,801 1,877,724 1,714,593 1,690,329 Intangible asset 5,952 4,534 4,424 3,286 2,172 1,942 Other assets 657,598 541,374 1,191,624 849,510 1,039,979 1,097,066 Total assets 4,989,231 6,661,421 6,431,402 6,231,717 6,208,768 6,284,112 Current liabilities Before dividend 1,397,911 2,311,769 1,254,738 1,558,060 1,334,961 1,587,455 After dividend 1,661,416 2,522,204 1,615,485 1,648,247 1,560,428 (Note 3) - non-current liabilities 69,605 557,465 869,238 952,283 927,645 883,256 Total liabilities Before dividend 1,467,516 2,869,234 2,123,976 2,510,343 2,262,606 2,470,711 After dividend 1,731,021 3,079,669 2,484,723 2,600,530 2,488,073 (Note 3) - Equity attributable to parent company shareholders 3,499,570 3,535,780 3,883,613 3,687,550 3,908,878 3,775,583 Share capital 2,927,834 2,998,179 3,006,223 3,006,223 3,006,223 3,006,223 Capital reserves 261,034 246,780 223,897 223,902 224,694 227,999 Retained earnings Before dividend 393,012 367,547 730,419 546,461 741,139 590,626 After dividend 179,280 193,187 369,672 456,274 515,672 (Note 3) - Other equities (82,310) (76,726) (76,926) (89,036) (63,178) (49,265) Treasury stock - - - - - (1,042) Non-controlling interests 22,145 256,407 423,813 33,824 37,284 37,818 Total amount of equity Before dividend 3,521,715 3,792,187 4,307,426 3,721,374 3,946,162 3,813,401 After dividend 3,258,210 3,581,752 3,946,679 3,631,187 3,720,695 (Note 3) -
Year Account		2016 (Note 1)	2017 (Note 1)	2018 (Note 1)	2019 (Note 1)	2020 (Note 1)	Financial Information of the current year up to March 31, 2021 (Note2)
Current assets		3,316,507	4,330,893	3,390,553	3,501,197	3,452,024	3,494,775
Property, plant, and equipment		1,009,174	1,784,620	1,844,801	1,877,724	1,714,593	1,690,329
Intangible asset		5,952	4,534	4,424	3,286	2,172	1,942
Other assets		657,598	541,374	1,191,624	849,510	1,039,979	1,097,066
Total assets		4,989,231	6,661,421	6,431,402	6,231,717	6,208,768	6,284,112
Current liabilities	Before dividend	1,397,911	2,311,769	1,254,738	1,558,060	1,334,961	1,587,455
	After dividend	1,661,416	2,522,204	1,615,485	1,648,247	1,560,428 (Note 3)	-
non-current liabilities		69,605	557,465	869,238	952,283	927,645	883,256
Total liabilities	Before dividend	1,467,516	2,869,234	2,123,976	2,510,343	2,262,606	2,470,711
	After dividend	1,731,021	3,079,669	2,484,723	2,600,530	2,488,073 (Note 3)	-
Equity attributable to parent company shareholders		3,499,570	3,535,780	3,883,613	3,687,550	3,908,878	3,775,583
Share capital		2,927,834	2,998,179	3,006,223	3,006,223	3,006,223	3,006,223
Capital reserves		261,034	246,780	223,897	223,902	224,694	227,999
Retained earnings	Before dividend	393,012	367,547	730,419	546,461	741,139	590,626
	After dividend	179,280	193,187	369,672	456,274	515,672 (Note 3)	-
Other equities		(82,310)	(76,726)	(76,926)	(89,036)	(63,178)	(49,265)
Treasury stock		-	-	-	-	-	(1,042)
Non-controlling interests		22,145	256,407	423,813	33,824	37,284	37,818
Total amount of equity	Before dividend	3,521,715	3,792,187	4,307,426	3,721,374	3,946,162	3,813,401
	After dividend	3,258,210	3,581,752	3,946,679	3,631,187	3,720,695 (Note 3)	-

Note 1: All financial information between 2016 and 2020 has been audited.

Note 2: Financial information for the first quarter of 2021 was auditor-reviewed. Note 3: the amount resolved in the Board meeting on March 25, 2021

92 -

Summary statement of comprehensive income (consolidated) - IFRS-compliant

Unit: NTD thousands	Unit: NTD thousands	Unit: NTD thousands	Unit: NTD thousands	Unit: NTD thousands	Unit: NTD thousands	Unit: NTD thousands
Year Item	2016 (Note 1)	2017 (Note 1)	2018 (Note 1)	2019 (Note 1)	2020 (Note 1)	Financial Information of the current year up to March 31, 2021 (Note 2)
Operatingincome	3,123,899	3,124,520	3,028,131	2,519,855	2,428,616	759,434
Gross income from operations	713,716	732,400	614,486	385,072	360,742	144,095
Operatingincome	343,491	325,887	139,669	(28,352)	8,328	54,814
Non-operating income and expense	(105,271)	(182,851)	381,112	259,883	355,661	30,075
Net income before tax	238,220	143,036	520,781	231,531	363,989	84,889
Net income of the continuing operations for the period	238,220	143,038	488,151	209,390	307,901	75,514
Loss from discontinued operation	－	－	－	－	－	－
Net income(loss)	238,220	143,038	488,151	209,390	307,901	75,514
Other comprehensive income recognized for the period (Net amount after tax)	(56,580)	(3,229)	(186)	(15,317)	17,938	13,887
Total comprehensive income in the current period	181,640	139,809	487,965	194,073	325,839	89,401
Net income attributable to stockholders of the parent	265,503	196,542	537,824	179,858	304,498	74,954
Net income attributable to non- controllinginterests	(27,283)	(53,504)	(49,673)	29,532	3,403	506
Total comprehensive income attributable to stockholders of the parent	209,400	193,851	537,032	164,678	322,379	88,867
Total comprehensive income attributable to non-controlling interests	(27,760)	(54,042)	(49,067)	29,395	3,460	534
Earnings per share (EPS)	0.91	0.66	1.79	0.60	1.02	0.25

Note 1: All financial information between 2016 and 2020 has been audited. Note 2: Financial information for the first quarter of 2021 was auditor-reviewed.

93 -

- Condense Parent Company-Only Balance Sheet IFRS-compliant

Condense Parent Company-Only Balance Sheet -IF	Condense Parent Company-Only Balance Sheet -IF	Condense Parent Company-Only Balance Sheet -IF	Condense Parent Company-Only Balance Sheet -IF	Condense Parent Company-Only Balance Sheet -IF	RS-compliant	RS-compliant
					Unit: NTD thousands
Year Item		2016	2017	2018	2019	2020
Current assets		2,710,776	3,495,463	2,499,497	2,827,571	2,758,124
Property, plant, and equipment		424,366	1,095,112	1,188,122	1,641,571	1,537,444
Intangible asset		3,621	2,837	3,124	2,435	1,712
Other assets		1,266,636	1,295,310	1,849,160	1,396,624	1,660,966
Total assets		4,405,399	5,888,722	5,539,903	5,868,201	5,958,246
Current liabilities	Before dividend	846,718	1,818,319	806,310	1,253,158	1,135,383
	After dividend	1,110,223	2,028,754	1,167,057	1,343,345 (Note2)	1,360,850 (Note2)
non-current liabilities		59,111	534,623	849,980	927,493	913,985
Total liabilities	Before dividend	905,829	2,352,942	1,656,290	2,180,651	2,049,368
	After dividend	1,169,334	2,563,377	2,017,037	2,270,838	2,274,835
Equity attributable to parent company shareholders		3,499,570	3,535,780	3,883,613	3,687,550	3,908,878
Share capital		2,927,834	2,998,179	3,006,223	3,006,223	3,006,223
Capital reserves		261,034	246,780	223,897	223,902	224,694
Retained earnings	Before dividend	393,012	367,547	730,419	546,461	741,139
	After dividend	179,280	193,187	369,672	456,274 (Note2)	515,672 (Note2)
Other equities		(82,310)	(76,726)	(76,926)	(89,036)	(63,178)
Treasury stock		－	－	－	－	－
Total amount of equity	Before dividend	3,499,570	3,535,780	3,883,613	3,687,550	3,908,878
	After dividend	3,236,065	3,325,345	3,522,866	3,597,363	3,683,411

Note 1: All financial information between 2016 and 2020 has been audited.

Note 2: the amount resolved in the Board meeting on March 25, 2021

94 -

Statement of comprehensive income (standalone) - IFRS-compliant

				Unit: NTD thousands 2019 2020 2,015,660 2,200,552 229,677 301,853 (36,325) 9,259 228,184 333,919 191,859 343,178 179,858 304,498 －－ 179,858 304,498 (15,180) 17,881 164,678 322,379 0.60 1.02	Unit: NTD thousands 2019 2020 2,015,660 2,200,552 229,677 301,853 (36,325) 9,259 228,184 333,919 191,859 343,178 179,858 304,498 －－ 179,858 304,498 (15,180) 17,881 164,678 322,379 0.60 1.02
Year Account	2016	2017	2018	2019	2020
Operating income	2,582,626	2,538,675	2,392,390	2,015,660	2,200,552
Gross income from operations	637,369	641,074	534,399	229,677	301,853
Operating income	400,160	393,375	240,567	(36,325)	9,259
Non-operating income and expense	(134,657)	(196,833)	329,199	228,184	333,919
Net income before tax	265,503	196,542	569,766	191,859	343,178
Net income of the continuing operations for the period	265,503	196,542	537,824	179,858	304,498
Loss from discontinued operation	－	－	－	－	－
Net income (loss)	265,503	196,542	537,824	179,858	304,498
Other comprehensive income recognized for the period (Net amount aftertax)	(56,103)	(2,691)	(792)	(15,180)	17,881
Total comprehensive income in the current period	209,400	193,851	537,032	164,678	322,379
Earnings per share (EPS)	0.91	0.66	1.79	0.60	1.02

Note: All financial information between 2016 and 2020 has been audited.

Names of financial statement auditors in the last 5 years and audit opinions

Name of accounting firm	Name of CPA	Audit opinion
Deloitte Taiwan	Mei-Chen Tsai, Cheng- Chih Lin	Unqualified opinion
Deloitte Taiwan	Mei-Chen Tsai, Cheng- Chih Lin	Unqualified opinion
Deloitte Taiwan	Mei-Chen Tsai, Cheng- Chih Lin	Unqualified opinion with emphasis-of-matter paragraph - uncertain outcome of major litigations or supervisorymeasures
Deloitte Taiwan	Su-Li Fang, Cheng-Chih Lin	Unqualified opinion
Deloitte Taiwan	Su-Li Fang, Cheng-Chih Lin	No qualified conclusion/opinion (matters addressed or other matters)--other matters--application of reports audited by other CPAs and the responsibility desired to be divided.

95 -

Financial analysis for the last 5 years

(I) Consolidated financial analysis - IFRS-compliant

Analysis	Year (Note 1)	2016	2017	2018	2019	2020	2021 up to March 31, 2021
Financial position (%)	Debt to assets ratio	29.41	43.07	33.03	40.28	36.44	39.32
	Long-term capital to property, plant & equipmentratio	355.87	243.73	280.61	248.90	284.25	277.85
Solvency %	Current ratio	237.25	187.34	270.22	224.72	258.59	220.15
	Quick ratio	186.22	150.55	186.33	181.37	203.21	172.56
	Interest coverage ratio	18.29	8.69	18.26	9.88	16.06	16.43
Operating efficiency	Accounts receivable turnover(times)	3.11	3.10	3.29	3.03	2.86	3.21
	Average cash collection days	118	118	111	120	128	114
	Inventory turnover(times)	2.78	2.67	2.26	2.11	2.61	2.93
	Accounts payable turnover (times)	7.23	5.86	5.77	6.12	6.41	6.70
	Average inventory turnover days	131	137	162	173	140	125
	Property, plant and equipment turnover(times)	2.88	2.24	1.67	1.35	1.35	1.78
	Total asset turnover(times)	0.62	0.54	0.46	0.40	0.39	0.49
Profitability	Returnon assets (%)	4.99	2.72	7.83	3.64	5.26	5.12
	Returnonequity (%)	6.68	3.91	12.05	5.22	8.03	7.79
	Pre-tax profit to paid-up capital (%)	8.14	4.77	17.32	7.70	12.11	11.30
	Netprofit margin(%)	7.63	4.58	16.12	8.31	12.68	9.94
	Earnings pershare (NTD)	0.91	0.66	1.79	0.60	1.02	0.25
Cash flows	Cash flow ratio (%)	53.81	15.17	32.48	22.88	12.85	(3.01)
	Cash flow adequacy ratio (%)	135.37	110.55	2010.03	84.11	69.74	43.29
	Cash reinvestment ratio (%)	7.59	1.38	3.69	(0.07)	1.29	(4.46)
Degree of leverage	Operating leverage	1.51	1.38	2.69	(12.72)	29.09	2.11
	Financial leverage	1.04	1.06	1.28	0.52	(0.53)	1.11

Note: All yearly financial information presented above has been audited.

96 -

(II) Standalone financial analysis - IFRS-compliant

Year Analysis	Year Analysis	2016	2017	2018	2019	2020
Financial position (%)	Debt to assets ratio	20.56	39.96	29.90	37.16	34.40
	Long-term capital to property, plant and equipment	838.59	371.69	398.41	281.14	313.69
Solvency %	Current ratio	320.15	192.24	309.99	225.64	242.92
	Quick ratio	252.87	159.76	220.88	178.61	185.12
	Interest coverage ratio	43.86	18.70	27.16	11.07	17.69
Operating efficiency	Accounts receivable turnover (times)	2.84	2.80	2.95	2.74	2.85
	Average cashcollectiondays	128	130	124	133	128
	Inventory turnover(times)	2.86	2.89	2.53	2.44	2.67
	Accounts payable turnover (times)	7.99	6.18	6.29	7.20	6.66
	Average inventory turnover days	128	126	144	150	137
	Property, plant and equipment turnover(times)	5.5	3.34	2.10	1.42	1.38
	Totalasset turnover(times)	0.59	0.49	0.42	0.35	0.37
Profitability	Returnonassets (%)	6.15	4.00	9.72	3.42	5.43
	Returnonequity (%)	7.52	5.59	14.50	4.75	8.02
	Pre-tax profit to paid-up capital(%)	13.67	6.56	18.95	6.38	11.42
	Net profitmargin(%)	10.28	7.74	22.48	8.92	13.84
	Earnings pershare (NTD)	0.91	0.66	1.79	0.60	1.02
Cash flows	Cash flow ratio (%)	87.14	26.93	60.28	18.88	9.14
	Cash flow adequacy ratio (%)	130.44	90.70	112.97	90.16	81.89
	Cash reinvestment ratio (%)	8.58	4.29	5.95	(2.16)	0.22
Degree of leverage	Operating leverage	1.32	1.28	1.49	(3.69)	22.90
	Financial leverage	1.02	1.03	1.10	0.66	(0.82)
Reasons of changes in each finance ratios during the recent two years 1. Financial structure: the decrease in liability ratio decreased due to the decrease in short-term liquidity loans. 2. Solvency: mainly due to the decrease in short-term liquidity loans. 3. Operating efficiency: mainly due to the decrease in short-term liquidity loans. 4. Profitability: due to the increase in non-industry income resulting in an increase in profit after-tax in the year. 5. Cash flow: The cash reinvestment ratio increased due to the decrease in cash dividends. 6. Leverage: The financial leverage is negative because operating profit is lower than financial cost.

Note: All yearly financial information presented above has been audited.

97 -

Formula for financial analyses (IFRS):

Financial position
(1) Debt to asset ratio = total liabilities/ total assets.
(2) Long-term capital to property, plant and equipment = (total equity + non-current liabilities) / net property, plant and equipment.
Solvency
(1) Current ratio = current assets / current liabilities.
(2) Quick ratio = (current assets - inventory - prepayments) / current liabilities.
(3) Interest coverage ratio = earnings before interest and tax / interest expenses for the current period.
Operating efficiency
(1) Receivables turnover (including accounts receivable and notes receivable from business activities) = net sales / average

receivables balance (including accounts receivable and notes receivable from business activities).

(2) Average cash collection days = 365 / receivables turnover.
(3) Inventory turnover = cost of sales/average inventory balance.
(4) Payables turnover (including accounts payable and notes payable for business activities) = cost of sales / average payables balance (including accounts payable and notes payable for business activities).
(5) Average inventory turnover days = 365 / inventory turnover.
(6) Property, plant and equipment turnover = net sales / average net property, plant and equipment balance.
(7) Total asset turnover = net sales / average total assets.
Profitability
(1) Return on assets = (net income + interest expenses x (1- tax rate)) / average asset balance.
(2) Return on equity = net income / average shareholders' equity.
(3) Net profit margin = net income / net sales.
(4) Earnings per share = (net income attributable to parent company shareholders - preferred share dividends) / weighted average outstanding shares.
Cash flow
(1) Cash flow ratio = net cash flow from operating activities / current liabilities.
(2) Cash flow adequacy ratio = net cash flow from operating activities for the previous 5 years / (capital expenditure + increase in inventory + cash dividends) for the previous 5 years.
(3) Cash reinvestment ratio = (net cash flow from operating activities - cash dividends) / (gross property, plant and equipment + long-term investments + other non-current assets + working capital).
Degree of leverage:

(1) Degree of operating leverage = (net operating revenues - variable operating costs and expenses) / operating profit.

(2) Degree of financial leverage = operating profit / (operating profit - interest expense).
98 -

III. Audit Committee's report on the review of the latest financial report

TYNTEK Corporation Audit Committee’s Review Report

We have reviewed the Company's 2020 business report, financial statements and earnings appropriation proposal prepared by the board of directors. The financial statements have been audited by CPA Su-Li Fang and CPA Cheng-Chih Lin of Deloitte Taiwan, to which the firm issued an independent auditor's report. The aforementioned Business Report, Financial Statements and Earnings Distribution Proposal have been reviewed and considered to be complied with relevant rules by the undersigned, the Audit Committee of TYNTEK Corporation. Pursuant to Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act, we hereby submit this report.

Submitted to

2020 Annual General Shareholders’ Meeting

TYNTEK Corporation

Audit Committee

Convener of Audit Committee: Lin, Tsung-Yen

March 25, 2021

99 -

IV. Latest financial statements

Declaration for Consolidated Financial Statements of Affiliates

The entities that are required to be included in the 2020 consolidated financial statements of the Company (from January 1 2020, to December 31, 2020), under the Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises are the same as those included in the consolidated financial statements prepared in conformity with the International Financial Reporting Standard 10. In addition, the information required to be disclosed in the combined financial statements is included in the consolidated financial statements. Consequently, a separate set of combined financial statements will not be prepared.

Name of the Company: TYNTEK Corporation

Chairman: Bosco Foo

March 25, 2021

100 -

Independent Auditors’ Review Report

To TYNTEK Corporation,

Audit opinion

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

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

Basis for audit opinion

We conducted our audits in accordance with the Regulations Governing the Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China for 2020. Our responsibility under those standards is further described in the section of "Auditor's Responsibilities for the Audit of the Consolidated Financial Statements". We are independent of the Group in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We are convinced that we have acquired enough and appropriate audit evidence to serve as the basis of audit opinion.

Key audit matters

Key audit matters refer to the most vital matters in our audit of the consolidated financial statements of the Group for the year ended December 31, 20 2020 based on our professional judgment. These matters were addressed in our audit of the consolidated financial statements as a whole, and in forming our audit opinion. We do not express a separate opinion on these matters.

Key audit matters of the consolidated financial statements of the Group for the year ended December 31, 2020 are stated as follows:

Revenue recognition

Due to some sales customers’ needs, the Group places inventory in the domestic and overseas warehouses or overseas shipping warehouses designated by the sales customers. The recognition of sales revenue is based on the receipt details provided by the customers’ designated warehouse custodians, which were checked by the dedicated personnel of the Group. As domestic and overseas warehouses and overseas shipping warehouses are not directly managed by the Group, we listed the authenticity of the sales related to the domestic and overseas warehouses and overseas shipping warehouses a key audit matter for this year. For the accounting policies and information disclosed related to revenue recognition, please refer to Notes 4 and 26 to the parent-only financial statements.

The main audit procedures that we have implemented include:

Understand and test the effectiveness of the main internal control design and implementation related to the sales revenue of domestic and overseas warehouses and overseas shipping warehouses.
Select samples randomly to check the receipts and payment status related to the sales revenue of domestic and overseas warehouses and overseas shipping warehouses, and inquire the existence of the transaction counterparties to verify the actual occurrence of the sales, and check whether there is any anomaly existing in the sales counterparties and the payment recipients.
101 -

Other Matters

The Company has also prepared the parent company’s only financial statements for the years ended December 31, 2020 and 2019, for which we have issued an unqualified opinion.

Included in the aforementioned consolidated financial statements, some of the financial statements of the investees measured using the equity method have not been audited by us but by other CPAs. Therefore, in our opinions on the aforementioned consolidated financial statements, the above-mentioned investment balance of the investees using the equity method and the relevant share of profit and loss on the investees are recognized based on the audit report of other CPAs. As of December 31, 2020, the balance of investment in the aforementioned investees using the equity method was NT$122,583,000, accounting for 1.97% of the total consolidated assets, and the share of profit or loss on associates recognized using the equity method for the year ended December 31, 2020 was NT$1,165,000, accounting for 0.32% of the consolidated net income before tax.

Responsibilities of the management and the governing body for the consolidated financial statements

The responsibilities of the management are to prepare the consolidated financial statements with fair presentation in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRS and IAS, as well as IFRIC and SIC interpretations endorsed and entered into effect by the FSC, and to maintain necessary internal control associated with the preparation in order to ensure that the financial statements are free from material misstatement arising from fraud or error.

In preparing the consolidated financial statements, the management is responsible for assessing the ability of the Group in continuing as a going concern, disclosing relevant matters, and adopting the going concern basis of accounting unless the management intends to liquidate the Group or cease the operations without other viable alternatives. The governing body of the Group (including the Audit Committee) is responsible for supervising the financial reporting process.

Auditor's responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance on whether the consolidated financial statements as a whole are free from material misstatement arising from fraud or error, and to issue an independent auditors' report. Reasonable assurance is a high-level assurance but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatement may arise from frauds or errors. If the amounts of misstatements, either separately or in aggregate, could reasonably be expected to influence the economic decisions of the users of the consolidated financial statements, they are considered material.

We have utilized our professional judgment and maintained professional doubt when performing the audit work in accordance with the auditing standards generally accepted in the Republic of China. We also perform the following tasks:

Identify and assess the risks of material misstatement arising from fraud or error within the consolidated financial statements; design and execute countermeasures in response to said risks, and obtain sufficient and appropriate audit evidence to provide a basis of our opinion. Fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Therefore, the risk of not detecting a material misstatement resulting from fraud is higher than the one resulting from error.
Understand the internal control related to the audit in order to design appropriate audit procedures under the circumstances, while not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.
Evaluate the appropriateness of accounting policies adopted and the reasonableness of accounting estimates and relevant disclosures made by the management.
Conclude on the appropriateness of the management's adoption of the going concern basis of accounting based on the audit evidence obtained and whether a material uncertainty exists for events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we are of the opinion that a material uncertainty exists, we shall remind users of the consolidated financial statements to pay attention to relevant disclosures in said statements within our audit report. If such disclosures are inadequate, we need to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure, and content of the consolidated financial statements (including relevant notes), and whether the consolidated financial statements adequately present the relevant transactions and events.
Obtain sufficient and appropriate audit evidence concerning the financial information of entities within the Group, to express an opinion on the consolidated financial statements. We are responsible for guiding, supervising, and performing the audit and forming an audit opinion on the Group.

The matters communicated between us and the governing body include the planned scope and times of the audit and significant audit findings (including any significant deficiencies in internal control identified during the audit). We also provided the governing body with a declaration that we have complied with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China regarding independence, and communicated with them all relationships and other matters that may possibly be regarded as detrimental to our independence (including relevant protective measures).

102 -

From the matters communicated with the governing body, we determined the key audit matters for the audit of the Group's consolidated financial statements for the year ended December 31, 2020. We have clearly indicated such matters in the auditors' report unless legal regulations prohibit the public disclosure of specific matters, or in extremely rare cases, we decided not to communicate over specific items in the auditors' report, for it could be reasonably anticipated that the negative effects of such disclosure would be greater than the public interest it brings forth.

Deloitte Taiwan CPA Su-Li Fang CPA Cheng-Chih Lin

The Financial Supervisory Commission R.O.C. Approved No. Jing-Guang-Zheng-Liu No. 0940161384

The Financial Supervisory Commission R.O.C. Approved No. Jing-Guang-Zheng-Liu No. 0930160267

March 25, 2021

103 -

TYNTEK Corporation and Its Subsidiaries Consolidated balance sheet For the Years Ended December 31, 2020 and 2019

Unit: NTD thousands

Code 1100 1110 1120 1136 1150 1170 1180 1200 1220 130X 1410 1460 1476 1479 11XX 1510 1517 1535 1550 1600 1755 1760 1780 1840 1915 1920 1980 1990 15XX 1XXX	Asset Current assets Cash and cash equivalents (Notes 6 and 33) Financial assets at FVTPL - Current (Notes 7 and 33) Financial assets at FVTOCI - current (Notes 8 and 33) Financial assets at amortized cost - current (Note 9 33, and 35) Notes receivable, net (Notes 10 and 33) Accounts receivable, net (Notes 10 and 33) Accounts receivable - related parties, net (Notes 10, 33, and 34) Other receivables (Notes 10 and 33) Current tax assets (Note 28) Inventories (Note 11) Prepayments (Notes 18 and 38) Non-current assets held for sale (Note 12) Other financial assets (Notes 19, 33, and 35) Other current assets (Note 19) Total current assets Non-current assets Financial assets at FVTPL - Non-current (Notes 7 and 33) Financial assets at FVTOCI -non-current (Note 8 and 33) Financial assets at amortized cost - non-current (Note 9, 33, and 35) Investments accounted for using equity method (Note 14) Property, plant and equipment (Notes 15, 35, and 36) Right-of-use assets (Note 16) Investment property (Note 15) Other intangible assets (Note 17) Deferred tax assets (Note 28) Prepayments for equipment (Note 36) Refundable deposits (Note 33) Other financial assets - non-current (Notes 19, 33, and 35) Other non-current assets - others (Note 19) Total non-current assets Total assets		Dec. 31, 2020 Amount % $ 655,749 11 522,790 9 20,579 - 558,932 9 9,224 - 856,173 14 903 - 66,253 1 - - 728,725 12 15,874 - - - 12,475 - 4,347 - 3,452,024 56 364,103 6 41,754 1 6,566 - 153,115 2 1,714,593 28 109,827 2 220,964 3 2,172 - 91,825 1 41,725 1 2,176 - 3,788 - 4,136 - 2,756,744 44 $ 6,208,768 100		Dec. 31, 2019 Amount % $ 763,092 12 529,585 9 21,776 1 643,381 10 17,284 - 797,755 13 - - 11,898 - 16,733 - 662,898 11 15,393 - 2,833 - 13,728 - 4,841 - 3,501,197 56 142,166 2 21,129 1 6,505 - 162,784 3 1,877,724 30 136,671 2 222,382 4 3,286 - 122,005 2 20,997 - 2,637 - 6,285 - 5,949 - 2,730,520 44 $ 6,231,717 100	Code 2100 2130 2150 2170 2180 2200 2230 2280 2320 2399 21XX 2540 2550 2570 2580 2640 2645 25XX 2XXX 3110 3200 3310 3320 3350 3300 3400 31XX 36XX 3XXX	LIABILITIESAND EQUITY Current liabilities Short-term borrowings (Notes 20 and 33) Contract liabilities - Current (Note 26) Notes payable (Notes 21 and 33) Accounts payable (Notes 21 and 33) Accounts payable - related parties (Notes 21, 33, and 34) Other payables (Notes 22, 33, and 34) Current tax liabilities (Note 28) Lease liabilities - current (Notes 16 and 33) Current portion of long-term borrowings and bonds payable (Notes 2 and 33) Other current liabilities (Note 22) Total current liabilities non-current liabilities Long-term borrowings (Notes 20 and 33) Provisions - non-current (Note 23) Deferred tax liabilities (Note 28) Lease liabilities - non-current (Notes 16 and 33) Defined benefit liability - non-current (Note 24) Guarantee deposits received (Note 33) Total non-current liabilities Total liabilities Equity attributable to owners of the company (Note 25) Ordinary shares Capital reserves Retained earnings Statutory reserves Special reserves undistributed earnings Total retained earnings Other equities Total equity attributable to owners of the company Non-controlling interests (Notes 13, 25, and 31) Total equity Total liabilities and equity		Dec. 31, 2020 Amount % $ 523,318 8 2,222 - 6,251 - 346,044 6 755 - 206,168 3 20,170 - 43,430 1 160,707 3 25,896 - 1,334,961 21 735,400 12 15,428 - 15,044 - 98,335 2 47,258 1 16,180 - 927,645 15 2,262,606 36 3,006,223 48 224,694 4 186,082 3 89,035 1 466,022 8 741,139 12 63,178) ( 1) 3,908,878 63 37,284 1 3,946,162 64 $ 6,208,768 100		Dec. 31, 2019	Dec. 31, 2019
			Amount $ 655,749 522,790 20,579 558,932 9,224 856,173 903 66,253 - 728,725 15,874 - 12,475 4,347 3,452,024 364,103 41,754 6,566 153,115 1,714,593 109,827 220,964 2,172 91,825 41,725 2,176 3,788 4,136 2,756,744 $ 6,208,768		Amount $ 763,092 529,585 21,776 643,381 17,284 797,755 - 11,898 16,733 662,898 15,393 2,833 13,728 4,841 3,501,197 142,166 21,129 6,505 162,784 1,877,724 136,671 222,382 3,286 122,005 20,997 2,637 6,285 5,949 2,730,520 $ 6,231,717				Amount $ 523,318 2,222 6,251 346,044 755 206,168 20,170 43,430 160,707 25,896 1,334,961 735,400 15,428 15,044 98,335 47,258 16,180 927,645 2,262,606 3,006,223 224,694 186,082 89,035 466,022 741,139 63,178) 3,908,878 37,284 3,946,162 $ 6,208,768		Amount $ 945,477 10,246 7,531 283,974 839 179,604 - 44,657 81,593 4,139 1,558,060 774,162 14,760 8,339 106,575 44,747 3,700 952,283 2,510,343 3,006,223 223,902 168,403 76,927 301,131 546,461 89,036) 3,687,550 33,824 3,721,374 $ 6,231,717	%
								(		(		15 - - 5 - 3 - 1 1 - 25 12 - - 2 1 - 15 40 48 4 3 1 5 9 ( 2) 59 1 60 100

The accompanying notes are an integral part of the consolidated financial statements (With Deloitte & Touche review report dated March 25, 2021)

Chairman: Bosco Foo

Manager: Will Chou

Accounting Supervisor: Li, Hsiao-Ping

104 -

TYNTEK Corporation and Its Subsidiaries Consolidated Statements of Comprehensive Income For the Years Ended December 31, 2020 and 2019

Unit: NTD thousands; EPS in NTD

Code 4000 Operating revenue (Notes 26 and 34) 5000 Operating costs (Notes 11, 27, and 34) 5900 Gross income from operations Operating expenses 6100 Selling and marketing expenses (Notes 24 and 27) 6200 Administrative expenses (Notes 24 and 27) 6300 Research and development expense (Notes 24 and 27) 6450 Expected credit impairment loss (Note 10) 6000 Total operating expenses 6500 Other income and expenses, net (Note 27) 6900 Operating profit (loss) Non-operating income and expense 7100 Interest revenue (Note 27) 7010 Other income (Notes 27 and 34) 7020 Other gains or losses (Notes 27 and 37) 7050 Financial costs (Note 27) 7060 Share of losses on associates using the equity method 7000 Total non-operating income and expenses 7900 Net income before tax 7950 Income tax expense (Note 28) 8200 Net income of the current year		2020		% 100 85 15 2 8 5 - 15 - - - 2 14 1 ) - 15 15 3 12		2019
		Amount $ 2,428,616 2,067,874 360,742 36,506 195,828 128,112 6,406 366,852 14,438 8,328 9,120 42,192 340,899 24,163 ) 12,387) 355,661 363,989 56,088 307,901				Amount $ 2,519,855 2,134,783 385,072 46,870 196,719 144,950 - 388,539 24,885) 28,352) 26,762 52,347 232,204 26,078 ) 25,352) 259,883 231,531 22,141 209,390		%
	( (		(		( ( ( (		( ( ( (	100 85 15 2 8 5 - 15 1) 1) 1 2 9 1 ) 1) 10 9 1 8

(To be Continued)

105 -

(Continued)

Code Other comprehensive income (Note 25) 8310 Items that will not be reclassified subsequently to profit or loss: 8311 Remeasurement of defined benefit plans 8316 Unrealized gains (losses) on investments in equity instruments at FVTOCI 8349 Income tax relating to items that will not be reclassified subsequently to profit or loss (Note 28) 8360 Items that may be reclassified subsequently to profit or loss: 8361 Exchange Differences in Translating the Financial Statements of Foreign Operations 8399 Income tax (expense) income related to the components of other comprehensive income (Note 28) 8300 Other comprehensive income of the current year (net amount after tax) 8500 Total comprehensive income of the current year 8600 NET PROFIT ATTRIBUTABLE TO: 8610 Owners of the company 8620 Non-controlling interests 8700 Total comprehensive income attributable to: 8710 Owners of the company 8720 Non-controlling interests Earnings per share (Note 29) 9710 Basic 9810 Diluted		2020		% 1 ) 1 - 1 - 1 13 13 - 13 13 - 13		2019
		Amount $ 7,977 ) 19,428 3,398 ) 12,342 2,457) 17,938 $ 325,839 $ 304,498 3,403 $ 307,901 $ 322,379 3,460 $ 325,839 $ 1.02 $ 1.01				Amount $ 3,070 ) 3,250 ) 235 11,505 ) 2,273 15,317) $ 194,073 $ 179,858 29,532 $ 209,390 $ 164,678 29,395 $ 194,073 $ 0.60 $ 0.60		%
	( ( (		(		( ( ( (			- - - - - - 8 7 1 8 7 1 8

The accompanying notes are an integral part of the consolidated financial statements (With Deloitte & Touche review report dated March 25, 2021) Chairman: Bosco Foo Manager: Will Chou Accounting Supervisor: Li, Hsiao-Ping

106 -

TYNTEK Corporation and Its Subsidiaries Consolidated Statements of Changes Equity For the Years Ended December 31, 2020 and 2019

Unit: In Thousands of New Taiwan Dollars, Unless Stated Otherwise

Equity attributable to owners of the company

Share capital Shares (Thousands) Amount 300,621 $ 3,006,223 - - - - - - - - - - - - - - - - - - 300,621 3,006,223 - - - - - - - - - - - - - - - - - - 300,621 $ 3,006,223			Retained earnings		Otherequities Exchange Differences in Translating the Financial Statements of Foreign Operations Unrealized Gain (Loss) on Financial Assets at Fair Value Through Other ComprehensiveIncome ( $ 21,662 ) ( $ 55,264 ) - - - - - - - - ( 9,095) ( 3,015) ( 9,095) ( 3,015) - - - - - - ( 30,757 ) ( 58,279 ) - - - - - - - - 9,828 16,030 9,828 16,030 - - - - - - ($ 20,929) ($ 42,249)	Otherequities Exchange Differences in Translating the Financial Statements of Foreign Operations Unrealized Gain (Loss) on Financial Assets at Fair Value Through Other ComprehensiveIncome ( $ 21,662 ) ( $ 55,264 ) - - - - - - - - ( 9,095) ( 3,015) ( 9,095) ( 3,015) - - - - - - ( 30,757 ) ( 58,279 ) - - - - - - - - 9,828 16,030 9,828 16,030 - - - - - - ($ 20,929) ($ 42,249)			Non-controllinginterests $ 423,813 - - - 29,532 ( 137) 29,395 ( 422,223 ) 2,839 - 33,824 - - - 3,403 57 3,460 - - - $ 37,284		Totalequity
					Exchange Differences in Translating the Financial Statements of Foreign Operations ( $ 21,662 ) - - - - ( 9,095) ( 9,095) - - - ( 30,757 ) - - - - 9,828 9,828 - - - ($ 20,929)
Shares (Thousands) 300,621 - - - - - - - - - 300,621 - - - - - - - - - 300,621		Statutoryreserves $ 114,621 53,782 - - - - - - - - 168,403 17,679 - - - - - - - - $ 186,082	Special reserves $ 69,365 - 7,562 - - - - - - - 76,927 - 12,108 - - - - - - - $ 89,035	u
	( (			( ( ( ( ( ( ( ( (	( ( ( ( (	( ( ( ( (	(	( ( ( ( ( (	( (	( ( ( ( ( (	$ 4,307,426 - - 360,746 ) 209,390 15,317) 194,073 422,223 ) 2,529 315 3,721,374 - - 90,187 ) 307,901 17,938 325,839 36,561 30,790 ) 16,635) $ 3,946,162

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

(With Deloitte & Touche review report dated March 25, 2021)

Chairman: Bosco Foo

Manager: Will Chou

Accounting Supervisor: Li, Hsiao-Ping

107 -

TYNTEK Corporation and Its Subsidiaries Consolidated Statements of Cash Flows For the Years Ended December 31, 2020 and 2019

Unit: NTD thousands

Code CASH FLOWS FROM OPERATING ACTIVITIES A10000 Net income before tax of the current year A20010 Adjustments for: A20100 Depreciation expense A20200 Amortization expenses A20300 Expected credit impairment loss A20400 Net gains on financial assets and liabilities at FVTPL A20900 Financial costs A21200 Interest income A21300 Dividend revenue A21900 Share-based compensation A22300 Share of profit or loss of associates accounted for using equity method A22500 Gains on disposal of property, plant and equipment A22900 Gains on disposal of subsidiary A23000 Gains on disposal of non-current assets held for sale A23200 Gains on disposal of investments accounted for using equity method A23700 Impairment losses on property, plant and equipment A23800 Loss on inventory valuation falling and obsolescence (gain on recovery) A24100 Unrealized losses on foreign currency exchange A29900 Gains on disposal of right-of-use assets A29900 Gains on lease modification A30000 Changes in operating assets and liabilities A31125 contract asset A31130 Note receivable A31150 Trade receivable A31180 Other receivables A31200 Inventories A31230 Prepayments A31240 Other current assets A32125 contract liability A32130 Note payable A32150 Accounts payable A32180 Other payables A32200 Provisions A32230 Other current liabilities A32240 Net defined benefit liability A33000 Cash from operations A33300 Interest paid A33500 Income tax refunded (paid) AAAA Net cash inflow from operating activities		2020 $ 363,989 247,200 1,211 6,406 212,528 ) ( 24,163 9,120 ) ( 18,385 ) ( 5,771 12,387 14,110 ) ( - ( 614 ) ( 17,475 ) - 14,250 ( 22,238 ) 174,980 ) 10 ) ( - 8,060 55,436 ) ( 3,031 ( 80,077 ) 1,332 494 8,024 ) ( 1,280 ) 60,525 ( 25,038 ( 668 21,757 ( 2,511 ( 184,516 24,851 ) ( 11,845 ( 171,510	2019
	( ( ( ( ( ( ( ( ( ( ( ( ( (		$ 231,531 232,412 1,241 - 250,310 ) 26,078 26,762 ) 19,144 ) - 25,352 41 ) 8,030 ) 6,791 ) - 24,926 9,181 ) 4,059 - 1 ) 1,350 29,108 74,047 ) 3,849 ) 222,954 30,324 3,883 21,842 ) 176 21,279 ) 9,565 ) 1,036 763 ) 587) 382,238 25,787 ) 508) 355,943

(To be Continued)

108 -

(Continued)

Code Cash flows from investing activities B00100 Purchase of financial assets at fair value through profit or loss B00200 Disposal of financial assets at FVTPL B00040 Acquisition of financial assets at amortized cost B00050 Disposal of financial assets at amortized cost B01800 Acquisition of long-term investments in equity using equity method B01900 Disposal of long-term investments in equity using equity method B02300 Proceeds from disposal of subsidiary B02600 Proceeds from disposal of non-current assets held for sale B02700 Acquisition of property, plant and equipment B02800 Proceeds from disposal of property, plant and equipment B03700 Decrease (increase) in refundable deposits B04500 Acquisition of intangible assets B06500 Increase (decrease) in other financial assets B07100 Increase in prepayments for equipment B07500 Interest received B07600 Dividends received B09900 Proceeds from disposal of right-of-use assets BBBB Net cash inflows from investing activities Cash flows from financing activities C00100 Increase in short-term borrowings C00200 Decrease in short-term borrowings C01600 Proceeds from long-term borrowings C01700 Repayments of long-term borrowings C03000 Decrease in guarantee deposits received C04020 Repayment of the principal portion of leases C04500 Cash dividends distributed C04900 Cost of redemption of treasury stock C05000 Proceeds from disposal of treasury stock C05800 Changes in non-controlling interests CCCC Net cash inflow (outflow) from financing activities DDDD Effects of exchange rate changes on the balance of cash held in foreign currencies EEEE Increase (decrease) in cash and equivalents E00100 Balance of cash and cash equivalents at the beginning of the year E00200 Balance of cash and cash equivalents at the end of the year		2020 $ 263,609 ) ( 260,995 - ( 91,368 36,153 ) ( 34,659 - ( 3,444 54,368 ) ( 46,843 461 ( 92 ) ( 3,750 ( 66,368 ) ( 9,692 18,385 134,140 183,147 ( 1,569,234 1,994,450 ) ( 128,500 88,148 ) ( 12,480 10,499 ) ( 90,187 ) ( 30,790 ) 30,790 - 473,070) 11,070 107,343 ) 763,092 $ 655,749	2019
	( ( ( ( ( ( ( ( ( ( ( (		$ 9,898 ) 6,003 164,078 ) 7,790 10,062 ) - 10,150 ) 3,839 163,943 ) 2,012 796 ) 136 ) 24,131 ) 110,127 ) 26,493 19,144 - 428,040) 2,423,552 2,027,334 ) 67,000 29,529 ) 5,750 13,807 ) 360,746 ) - - 2,732 67,618 8,055 3,576 759,516 $ 763,092

The accompanying notes are an integral part of the consolidated financial statements (With Deloitte & Touche review report dated March 25, 2021)

Chairman: Bosco Foo

Manager: Will Chou

Accounting Supervisor: Li, Hsiao-Ping

109 -

TYNTEK Corporation and Its Subsidiaries Notes to consolidated financial statements For the Years Ended December 31, 2020 and 2019

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

I. Organization and operations

TYNTEK Corporation (hereinafter referred to as the "Company") was incorporated on April 4, 1987 in accordance with the Company Act of R.O.C. The main businesses are research and development, manufacturing, and sales of relevant products, including gallium arsenide, infrared, light-emitting diodes, laser diodes, phototransistors, photodiodes, single crystal and epitaxy, crystal grains, optoelectronic systems, radio transmitters, and other electrical devices that can generate radio radiant energy.

The Company’s shares had been listed for trading in Taipei Exchange (TEPx) since November 1998, and were approved by the Securities and Futures Commission, Ministry of Finance (currently known as the Securities and Futures Bureau, Financial Supervisory Commission) to be listed on the Taiwan Stock Exchange for trading instead since September 2000.

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

II. The Authorization of Financial Statements

The consolidated financial statements were approved by the board of directors and authorized for issue on March 25, 2021.

III. Application of New and Revised International Financial Reporting Standards (I) Initial application of the amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and 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)

Except for the following, the application of the amendments to the IFRSs endorsed and issued into effect by the FSC does not have material impact on the Group’s accounting policies:

Amendments to IAS 1 and IAS 8 "Definition of Materiality"

The Group adopted the amendments on January 1, 2020. The threshold for materiality was amended to be "can be reasonably expected to influence users", and the disclosures in the consolidated financial statements were adjusted by removing immaterial information which may obscure material information.

Amendment to IFRS 16 "COVID-19-Related Rent Concessions"

The Group has chosen to apply the practical expedient of the amendment to deal with rent negotiations directly related to the COVID-19 between it and the lessor. Please refer to Note 4 for the relevant accounting policies. Before applying the amendment, the Group shall judge whether the provisions of the lease modification should apply to the aforementioned rent negotiation. The Group began to apply the amendment on January 1, 2020. Since the aforementioned rent negotiation only affected the year of 2020, the retrospective application of the amendment did not affect the retained earnings as of January 1, 2020.

(II) IFRSs endorsed by FSC that are applicable from 2021 onwards

Effective Date Announced by New, Revised or Amended Standards and Interpretations IASB Amended “Extension of the Temporary Exemption from Effective on the published date Applying IFRS 9” in IFRS 4 Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4, and IFRS 16 - Effective for the annual “Interest Rate Benchmark Reform - Phase 2” reporting periods beginning on or after January 1, 2021

As of the publication date of the consolidated financial statements, the Group has assessed that the above-mentioned standards and amendments to the interpretations will not have a significant influence on the Group’s financial position and financial performance.

110 -
(III) The IFRSs issued by the International Accounting Standards Board (IASB) but not yet endorsed and issued into effect by the FSC

Effective Date Issued by IASB New, Revised or Amended Standards and Interpretations (Note 1) “Annual Improvement for the Cycle of 2018-2020” January 1, 2022 (Note 2) Amended “Updating the Index to the Conceptual Framework” January 1, 2022 (Note 3) in IFRS 3 Amendments to IFRS 10 and IAS 28 “Sale or Contribution of To be determined Assets between an Investor and its Associate or Joint Venture” IFRS 17 “Insurance Contracts” January 1, 2023 Amendments of IFRS 17 January 1, 2023 Amendments to IAS 1 “Classification of Liabilities as Current January 1, 2023 or Non-current” Amendments to IAS 1 "Disclosure of Accounting Policies” January 1, 2023 (Note 6) Amendments to IAS 8 "Definition of Accounting Estimates" January 1, 2023 (Note 7) Amendments to IAS 16 “Property, Plant and Equipment - January 1, 2022 (Note 4) Proceeds before Intended Use” Amendments to IAS 37 “ Onerous Contracts - Cost of Fulfilling January 1, 2022 (Note 5) a Contract

Note 1: Unless stated otherwise, the above New IFRSs are effective for annual periods beginning on or after their respective effective dates.
Note 2: The amendment of IFRS 9 applies to the exchange of financial liabilities or modified terms incurring in the annual reported periods since January 1, 2022; the amendment of “Agriculture” in IAS 41 applies to the measurement at fair value in the annual reported periods since January 1, 2022; The amendment of “Initial application of IFRSs” in IFRS 1 applies the annual reported periods since January 1, 2022 retrospectively.
Note 3: The amendment applies to the merges whose acquisition dates after the annual reported periods since January 1, 2022.
Note 4: The amendment applies to the property, plant and equipment achieving the expected operations by the management after January 1, 2021.
Note 5: The amendment applies to the contracts yet performing all obligations as of January 1, 2022. Note 6: The amendments apply to the annual reporting periods beginning on or after January 1, 2023 prospectively.
Note 7: The amendments apply to changes in accounting estimates and changes in accounting policies that occur during the annual reporting periods beginning on or after January 1, 2023.

As of the publication date of the consolidated financial statements, the Group is continuing to assess the impact of amendments to the aforementioned standards and interpretations on the Group’s financial position and financial performance, and will disclose relevant impacts when the assessment is completed.

IV. Summary of Significant Accounting Policies

(I) Statement of compliance

The consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and IFRSs as endorsed and issued into effect by the FSC.

(II) Basis of preparation

The consolidated financial statements have been prepared on the historical cost basis except for the financial instruments measured at fair value and the net defined liabilities recognized at the present value of the defined benefit obligation less the fair value of plan assets.

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:

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).
Level 3 inputs are unobservable inputs for the asset or liability.
(III) Classification of current and non-current assets and liabilities
Current assets include:
Assets held primarily for the purpose of trading;
Assets realized within 12 months after the balance sheet date; and
111 -
Cash or cash equivalents (excluding assets restricted from being exchanged or used to settle a liability for at least 12 months after the balance sheet date).
Current liabilities include:
Liabilities held primarily for the purpose of trading;
Liabilities realized within 12 months after the balance sheet date; and
Liabilities with a repayment deadline that cannot be unconditionally deferred for at least 12 months after the balance sheet date.
Assets and liabilities that are not classified as current are classified as non-current.
(IV) Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and the entities controlled by the Company (subsidiaries). Income and expenses of subsidiaries acquired or disposed of during the period are included in the consolidated statements of comprehensive income from the effective dates of acquisition up to the effective dates of disposal. 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. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance. 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. The carrying amounts of the interests of the Group and the non-controlling interests have been adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to the owners of the Company.

When the Group loses control over a subsidiary, the gains or losses on the disposal are the differences between the following two: (1) The sum of the fair value of the consideration received and the fair value of the remaining investment in the former subsidiary on the date of loss of control, and ( 2) the sum of the carrying amounts of the assets (including goodwill), liabilities, and non-controlling interests of the former subsidiary on the day of loss of control. All amounts recognized in other comprehensive income related to said subsidiary are accounted for on the same basis as the one adopted for the Group's direct disposal of the relevant assets or liabilities.

The remaining investment in the former subsidiary is adopted as the amount of financial assets initially recognized at FVTPL based on the fair value at the date of loss of control.

For details of subsidiaries, ownership percentage, and businesses, please refer to Note 13 and Table
(V) Foreign currencies

In preparing the financial statements of each entity, transactions in currencies other than the entity’s functional currency (i.e. foreign currencies) are recognized at the rates of exchange prevailing on the transaction dates.

At each balance sheet date, monetary items denominated in foreign currencies are translated at the rates prevailing on that date. Exchange differences on monetary items arising from settlement or translation are recognized in profit or loss in the period in which they arise.

Non-monetary items measured at fair value that are denominated in foreign currencies are translated at the rates prevailing on the date when the fair value was determined. The resulting exchange difference is recognized in profit or loss. For items whose changes in fair value are recognized in other comprehensive income, the resulting exchange difference is recognized in other comprehensive income. Non-monetary items measured at historical cost that are denominated in foreign currencies are translated at the rates of exchange prevailing on the transaction dates and are not retranslated. When preparing the consolidated financial statements, the assets and liabilities of the Company’s foreign operations (including subsidiaries, associates, joint ventures, or branches that operate in countries or adopt the functional currencies different from the Company) are translated into New Taiwan dollar. Income and expense items are translated at the average exchange rates for the period. The resulting currency exchange differences are recognized in other comprehensive income (and attributable to the owners of the Company and non-controlling interests, respectively).

If the Group disposes of the ownership interest of a foreign operation, or disposes of part of the equity of a foreign operation’s subsidiary and loses control, or disposes of a foreign operation’s joint agreement or associate, and the retained equity is a financial asset and is treated based on the accounting policies adopted for financial instruments, then all accumulated exchange differences attributable to the owners of the Company and related to the foreign operation will be reclassified to profit or loss. If the partial disposal of a subsidiary of a foreign operation does not result in the loss of control, the accumulated exchange differences are attributable to the non-controlling interest of the subsidiary proportionally again but are not recognized in profit or loss. In the case of any other partial disposal of

112 -

foreign operations, the accumulated exchange differences will be reclassified to profit or loss according to the proportion of the disposal.

(VI) Inventories

Inventories include merchandise, raw materials, work-in-progress, and finished goods. The value of inventories shall be determined based on the cost and net realizable value (NRV), whichever is lower. The comparison of the cost and NRV is based on individual items except for inventories of the same category. The NRV is the estimated selling price in the ordinary course of business, less the estimated cost of completion and the estimated costs necessary to make the sale. The cost of inventories is calculated using the weighted average method.

(VII) Investments in Associates An associate is an entity over which the Group has significant influence and is not a subsidiary nor a
joint venture.

The Group adopts the equity method to account for its investments in associates.

Under the equity method, investments in an associate are initially recognized at cost and adjusted thereafter to recognize the Group’s share of the profit or loss and other comprehensive income of the associate. The Company also recognizes the changes in its share of the equity of associates based on the percentage of ownership.

The amount of the acquisition cost in excess of the Group’s share of the net fair value of the identifiable assets and liabilities of an associate that constitutes the business on the acquisition date is classified as goodwill, which is included in the book value of the investment and cannot be amortized. The amount of the Group’s share of the net fair value of the identifiable assets and liabilities of an associate that constitutes the business on the acquisition date in excess of the amount of the acquisition cost is classified as profit or loss.

When an associate issues new shares, if the Group does not subscribe according to the ownership percentage, which causes the ownership percentage to change, and, thus, the net equity value of the investment increases or decreases, capital surplus - the changes in the net equity value of associates accounted for using the equity method and the investment accounted for using the equity method are adjusted for the increase or decrease. However, if the new shares is not subscribed to or acquired according to the ownership percentage, which results in a decrease in the ownership interests of the associate, the amount recognized in the other comprehensive income related to the associate is reclassified according to the percentage of the decrease, and the basis of the accounting treatment adopted is the same as the basis that the associate must follow in the case of direct disposal of relevant assets or liabilities. Where the adjustment in the preceding paragraph shall be debited to the capital surplus, and the balance of the capital surplus generated by the investment under the equity method is insufficient, the difference is debited to the retained earnings.

When the Group’s share of losses on an associate equals or exceeds its interest in the associate (including any carrying amount of the investment accounted for using the equity method and other longterm interests that, in substance, form part of the Group’s net investment in the associate), the Group discontinues recognizing its share of further losses. Additional losses and liabilities are recognized only to the extent that the Group has incurred legal obligations, or constructive obligations, or made payments on behalf of said associate.

The entire carrying amount of an investment (including goodwill) is tested for impairment as a single asset by comparing its recoverable amount with its carrying amount. Any impairment loss recognized is not allocated to any asset, including goodwill that forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognized only to the extent that the recoverable amount of the investment subsequently increases.

The Group ceases to adopt the equity method on the day when its investment ceases to be an associate, and its retained equity in the original associate is measured at fair value. The differences between the fair value, the proceeds from the disposal, and the carrying amount of the investment on the day when the equity method ceases to be adopted are recognized in profit or loss. In addition, all amounts recognized in other comprehensive income related to said associate are accounted for on the same basis as the one adopted for the associate's direct disposal of the relevant assets or liabilities. If an investment in an associate becomes an investment in a joint venture, or an investment in a joint venture becomes an investment in an associate, the Group will continue to adopt the equity method without remeasuring the retained equity.

Profit or loss on upstream, downstream, and lateral transactions between the Group and its associates is recognized in the consolidated financial statements only to the extent that it does not affect the Group's interests in the associates.

(VIII) Property, plant, and equipment

Property, plant and equipment are recognized at cost less accumulated depreciation and accumulated impairment loss.

113 -

Property, plant and equipment are depreciated using the straight-line method over their useful lives. Each significant part is depreciated separately. The Group conducts at least one annual review at the end of each year to assess the estimated useful life, residual value, and depreciation methods, while applying the effect of changes in accounting estimates prospectively.

When derecognizing property, plant and equipment, the difference between the net disposal proceeds and the carrying amount of the asset is recognized in loss or profit.

(IX) Investment Property

Investment property refers to property held for the purpose of earning rent or capital appreciation or both (including the assets that meet the definition of investment property and the right-of-use assets). Investment property also includes land held, in which the future use has not yet been determined. Self-owned investment property is initially measured at cost (including transaction costs), and subsequently measured at cost less accumulated depreciation and accumulated impairment loss. The investment property is depreciated on a straight-line basis.

When investment property is derecognized, the difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss.

(X) Intangible asset
Acquired separately

Intangible assets with finite useful lives that are acquired separately are initially measured at cost and subsequently measured at cost less accumulated amortization and accumulated impairment loss. Intangible assets are amortized using straight-line method over the useful lives. The Group conducts at least one annual review at the end of each year to assess the estimated useful life, residual value, and amortization methods, while applying the effects of changes in accounting estimates prospectively. Intangible assets with indefinite useful lives are recognized at cost less accumulated impairment loss.

Internally generated— research and development (R&D) expenditure Research expenditure is recognized in expenses when incurred.
Derecognition When an intangible asset is derecognized, the difference between the net disposal proceeds

and the carrying amount of the asset is recognized in profit or loss.

(XI) Impairment of assets related to property, plant and equipment, right-of-use assets, intangible assets (excluding goodwill), and assets related to contract costs

The Group assesses if there are any signs of possible impairment in property, plant, and equipment as well as right-of-use and intangible assets (excluding goodwill) at each balance sheet date. If there is any sign of impairment, an estimate is made of its recoverable amount. If it is not possible to determine the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cashgenerating unit to which the asset belongs. Corporate assets are allocated to the smallest group of cashgenerating units on a reasonable and consistent basis.

Intangible assets with indefinite useful lives and not yet available for use are tested for impairment at least annually and whenever there is a sign that the assets may be impaired.

The recoverable amount is the fair value less cost of sales or its value in use, whichever is higher. If the recoverable amount of individual asset or the cash-generating unit is lower than its carrying amount, the carrying amount is reduced to the recoverable amount, and the impairment loss is recognized in profit and loss.

The inventory, property, plant and equipment, and intangible assets related to customer contracts are first recognized as impairment in accordance with the inventory impairment regulations and the regulations above. Then, the carrying amount of the assets related to contract cost in excess of the expected amount of consideration received for the provision of the relevant goods or services less the direct relevant costs is recognized as an impairment loss. Subsequently, the carrying amount of the assets related to contract cost is included in the cash-generating unit to which they belong to perform impairment assessment of the cash-generating unit.

When the impairment loss is subsequently reversed, the carrying amount of the asset, the cashgenerating unit, or the asset related to contract cost is increased to the revised recoverable amount, provided that the increased carrying amount shall not exceed the carrying amount (less amortization or depreciation) of the asset, cash-generating unit, or the asset related to contract cost which was not recognized as impairment loss in prior years. The reversal of the impairment loss is recognized in profit or loss.

(XII) Financial instruments

Financial assets and financial liabilities shall be recognized in the consolidated balance sheet when the Group becomes a party to the contractual provisions of the instruments.

114 -

financial liabilities. The transaction costs directly attributable to the acquisition or issuance of financial assets or financial liabilities at fair value through profit or loss is immediately recognized in profit or loss. 1. Financial asset Regular trading of financial assets shall be recognized and derecognized in accordance with trade date accounting.

(1) Measurement types

Financial assets held by the Group are those measured at fair value through profit or loss (FVTPL) and at amortized cost, as well as investments in equity instruments measured at fair value through other comprehensive income (FVTOCI).

A. Disposal of financial assets at FVTPL

Financial assets measured at FVTPL include those mandatorily measured at FVTPL and those designated as at FVTPL. Financial assets mandatorily measured at FVTPL include investments in equity instrument that the Group has not designated to measure at FVTOCI, and debt instruments that are not classified as measured at amortized cost or at FVTOCI.

Financial assets measured at FVTPL are measured at fair value, and the gains or losses arising from remeasurement (not including any dividends or interest generated by the financial asset) are recognized in other gains or losses. Please refer to Note 33 for the method of determining the fair value.

B. Financial assets at amortized cost

When the Group's investments in financial assets meet the following two conditions simultaneously, they are classified as financial assets measured at amortized cost:

a. Held under a certain business model, of which the objective is to collect contractual cash flows by holding the financial assets; and

b. The cash flows on specific dates specified in the contractual terms are solely payments of the principal and interest on the principal amount outstanding. After initial recognition, such assets (including cash and cash equivalents, accounts receivable measured at amortized cost, and time deposits with the original maturity date of more than 3 months) are measured at the amortized cost of the total carrying amount determined by the effective interest method less any impairment loss, and any foreign currency exchange differences are recognized in profit or loss. Except for the following two cases, interest revenue is calculated by multiplying the effective interest rate by the total carrying amount of financial assets:

a. For purchased or originated credit-impaired financial asset, interest revenue is calculated by multiplying the credit-adjusted effective interest rate by the amortized cost of the financial asset.
b. For financial asset that is not purchased or originated credit-impaired but subsequently becomes credit impaired, interest income is calculated by multiplying the effective interest rate from the next reporting period after the credit impairment by the amortized cost of the financial asset.

Credit-impaired financial assets refer to the fact that

when an issuer or debtor has experienced major financial difficulties or default, the debtor is likely to apply for bankruptcy or other financial restructuring,

or the active market for the financial assets disappears due to financial difficulties. Equivalent cash includes time deposits that are highly liquid, convertible into imprest cash at any time with little risk of value changes within 3 months from the date of acquisition, and is used to meet short-term cash commitments.

C. Investments in equity instruments measured at FVTOCI

The Group may, upon initial recognition, make an irrevocable election to designate as at FVTOCI the investments in equity instruments that are not held for trading and the ones that are not recognized by an acquirer in a business combination or with the contingent consideration.

Investments in an equity instrument measured at FVTOCI are measured at fair value, and any subsequent fair value changes are recognized in other comprehensive income and accumulated in other equity. Upon disposal of investments, cumulative gain or loss is directly transferred to retained earnings and are not reclassified to profit or loss.

Dividends of investments in equity instruments measured at FVTOCI are recognized in profit or loss when the Group's right to receive dividends is established unless such dividends clearly represent the recovery of a part of the investment cost. (2) Impairment of financial assets

115 -

The Group assesses the impairment loss of financial assets measured at amortized cost (including accounts receivable) based on the expected credit loss on each balance sheet date.

Accounts receivable are recognized in allowance loss based on the lifetime expected credit losses (ECLs). Other financial assets are first assessed based on whether the credit risk has increased significantly since the initial recognition. If there is no significant increase in the risk, a loss allowance is recognized at an amount equal to 12-month ECLs. If the risks have increased significantly, a loss allowance is recognized at an amount equal to lifetime ECLs.

The ECLs refer to the weighted average credit loss with the risk of default as the weight. The 12-month ECLs represent the ECLs from possible defaults of a financial instrument within 12 months after the reporting date. The lifetime ECLs represent the ECLs from all possible defaults in a financial instrument over the expected life of a financial instrument.

For the purpose of internal credit risk management, the Group, without considering the collateral held,

determines that the following situations represent defaults in the financial assets:

A. Internal or external information indicates that it is impossible for the debtor to settle the debt.
B. B. It is overdue for more than 90 days, unless there is reasonable and corroborative information showing that a default date postponed is more appropriate.

The Company recognizes an impairment loss for all financial assets with a corresponding downward adjustment to their carrying amount through a loss allowance account. However, the loss allowance for investment in debt instruments measured at FVTOCI is recognized in other comprehensive income without a downward adjustment to the carrying amount.

(3) Derecognition of financial assets

The Group derecognizes a financial asset when the contractual rights to the cash inflow from the financial asset expire or when it transfers the financial assets and substantially all the risks and rewards of ownership of the asset to another party.

comprehensive income is recognized in profit or loss When derecognizing an investment in equity instrument at FVTOC in its entirety, the cumulative profit or loss is transferred directly to retained earnings and is not reclassified to profit or loss.

Equity instrument

Debt and equity instruments issued by the Group are classified as either financial liabilities or equity in accordance with the substance of the contractual arrangements and the definitions of financial liabilities and equity instruments.

Equity instruments issued by the Group are recognized at the proceeds received, net of the cost of direct issue.

The repurchase of the Group’s own equity instruments is recognized in and deducted directly from equity. The purchase, sale, issuance, or cancellation of the Group’s own equity instruments is not recognized in profit or loss.

Financial liability (1) Subsequent measurement

All financial liabilities are measured at amortized cost in the effective interest method.

(2) Derecognition of financial liabilities

The difference between the carrying amount of the financial liability derecognized and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

116 -

(XIII) Provisions

The amount recognized in provision is based on the risk and uncertainty of the obligation, and is the best estimate of the expenditure required to settle the obligation on the balance sheet date. The provisions are measured at the discounted value of the cash flow estimated to settle the obligation.

(XIV) Revenue recognition
After the Group identifies its performance obligations in contracts with customers, it allocates the
transaction costs to each obligation in the contracts and recognizes revenue upon completion of performance obligations.

If several contracts are signed with the same customer (or the customer's related party) almost at the same time, as the goods or services promised in these contracts are single performance obligations, the Group deals with the contracts separately.

Sales revenue
Sales revenue comes from the sales of products. As when a product reaches the transaction
conditions signed with a customer, the customer already has the right to set the price and the way the product is used while bearing the main responsibility for resale and the risk of obsolescence, at which the Group recognizes such revenue and reclassifies it to accounts receivable after fulfilling the remaining obligations. Advance receipts from sales are recognized as contract liabilities before a product reaches the transaction conditions signed with a customer.

In the case of export of raw materials overseas for processing, the control of the ownership of the processed product has not been transferred, so the income is not recognized when said materials are exported.

Electricity sales income

The electricity sold is recognized and based on the actual kWh and rate.

Sales revenue of the power plant The sales revenue of the power plant is the revenue from the sales of solar power. The sales of the power plant are recognized as revenue when each customer obtains control over the asset promised, that is, when the power plant completes the contractual agreement and meets the performance obligation.
(XV) Leasing
At the inception of a contract, the Group assesses whether the contract is, or contains, a lease.
1. The Group as lessor Where almost all the risks and rewards attached to the ownership of an asset are transferred to
the lessee in lease terms, such leases are classified as finance leases. All other leases are classified as operating leases.
The Group as lessee

The Group recognizes right-of-use assets and lease liabilities for all leases at the commencement date of each lease, except for low value asset leases and short-term leases accounted for by applying a recognition exemption where lease payments are recognized as expenses on a straight-line basis over the lease terms.

A right-of-use asset is initially measured at cost (including the initial measured amount of lease liabilities, the amount of lease payments made to the lessor less lease incentives received prior to the inception of a lease, initial direct costs, and the estimated costs of restoring underlying assets), and subsequently measured at cost less accumulated depreciation and accumulated impairment and adjusted for any remeasurement of the lease liabilities. Right-of-use assets are presented on a separate line in the consolidated balance sheets.

A right-of-use asset is depreciated on a straight-line basis over the period from the lease commencement date to the end of its useful life, or to the end of the lease term, whichever is earlier. Lease liabilities are initially measured at the present value of lease payments. If the interest rate implicit in a lease can be easily determined, the lease payment is discounted at such an interest rate. If the interest rate cannot be easily determined, the lessee's incremental borrowing rate applies.

Subsequently, lease liabilities are measured at the amortized cost using the effective interest rate method, and interest expense is amortized over the lease term. If changes in the lease term, the expected payment under the residual value guarantee, the evaluation of the underlying asset purchase options, or the index or rate used to determine the lease payment over the lease term lead to changes in future lease payments, the Group remeasures the lease liabilities with a corresponding adjustment to the right-of-use assets. However, if the carrying amount of the rightof-use assets has been reduced to zero, the remaining remeasurement amount is recognized in profit or loss. For lease modifications that are not treated as a separate lease, remeasurement of the lease liabilities due to the reduced scope of the lease is to reduce the right-of-use assets, and to recognize the profit or loss of the partial or full termination of the lease; the remeasurement of the

117 -

lease liabilities due to other modifications is to adjust the right-of-use assets. Lease liabilities are presented on a separate line in the consolidated balance sheets.

The Group and the lessor engaged in rent negotiations directly related to the COVID-19 pandemic, and adjusted the rents due before June 30, 2021, resulting in a decrease in the rents before the negotiation. These negotiations did not materially change other lease terms. The Group has elected to adopt practical expedients to treat rent negotiations that meet the aforementioned conditions without evaluating whether the negotiation is about a lease modification, and

recognizes the reduction in lease payments in profit or loss, and makes a corresponding downward adjustment to the lease liabilities.

(XVI) Borrowing costs

Borrowing costs directly attributable to an acquisition, construction, or production of qualifying assets are added to the cost of said assets, until such time as the assets are substantially ready for their intended use or sale.

For specific borrowings, if the investment income earned by making a temporary investment before the capital expenditure that meets the requirements is incurred, it is deducted from the borrowing costs that meet the capitalization conditions.

Other than that which is stated above, all other borrowing costs are recognized in profit or loss in the period in which they are incurred.

(XVII) Government grants

Government grants are not recognized until there is reasonable assurance that the Group will comply with the conditions attached to them and that the grants will be received.

Government grants related to income are recognized in profit or loss on a systematic basis over the periods, in which the Group recognizes as expenses the relevant costs for which the grants are intended to compensate. Government grants whose primary condition is that the Group should purchase, construct, or otherwise acquire non-current assets are recognized as deferred income and reclassified to profit or loss during the useful life of said assets on a reasonable and systematic basis. Government grants whose primary condition is that the Group should purchase, construct, or otherwise acquire non-current assets are debited to the carrying amount of said assets and recognized in profit or loss over the useful lives of said assets by reducing the depreciation or amortization expenses of said assets.

If government grants are used to compensate expenses or losses incurred, or are given to the Group for the purpose of immediate financial support without relevant future costs, they can be recognized in profit or loss in the period, during which the Group can receive said grants.

(XVIII) Employee benefits

Short-term employee benefits

Relevant liabilities for short-term employee benefits are measured by the non-discounted amount expected to be paid in exchange for employee services.

Post-employment benefits

For pension under the defined contribution plan, the amount of pension contributed is recognized as expenses during employees' service period.

The defined benefit cost under the defined benefit pension plan (including service cost, net interest, and remeasurement ) is calculated based on the projected unit credit method. The service cost (including the service cost for the current period) and the net interest of net defined benefit liabilities (assets) are recognized as employee benefit expenses as they occur. The remeasurement (including actuarial gains and losses and the return on plan assets, net of interest) is recognized in other comprehensive income and presented in retained earnings when it occurs, and will not be reclassified to profit or loss.

The net defined benefit liabilities (assets) are the deficit (surplus) of the defined benefit pension plan. The net defined benefit assets may not exceed the present value of any refunds from the plan or reductions in future contributions to the plan.

Other long-term employee benefits

The accounting treatment of other long-term employee benefits is the same as that of the defined benefit pension plan, but the relevant remeasurement is recognized in profit or loss. (XIX) Share-based payment arrangement Share-based payment arrangement for granting shares to employees and employee stock options The share-based payment arrangement for equity delivery and employee stock options are based on the fair value of the equity instrument on the grant date and the best estimated number expected to be vested, and is recognized as expenses on a straight-line basis during the vesting period, while the capital surplus - employee share options is adjusted at the same time. If it is immediately vested on the grant date, the full amount of the shares shall be recognized in expenses on the grant date. The Company transfers treasury shares to employees, so the record date for the transfer is the grant date.

The Group revises the estimated number of expected vested employee share options at each balance sheet date. If there is a revision to the original estimated number, the effect is recognized as profit or loss,

118 -

so that the accumulated expenses will reflect the revised estimate, and the capital surplus - employee share options is adjusted accordingly.

(XX)

Income tax

The income tax expense represents the sum of the tax currently payable and deferred tax.
1. Tax currently payable

The Group determines the income (loss) of the current year in accordance with the laws and regulations in each jurisdiction area for income tax filings, and calculates the income tax payable (recoverable) accordingly.

A surtax imposed on the undistributed earnings pursuant to the Income Tax Act of R.O.C. is recognized via a resolution at the annual shareholders' meeting.

Adjustments to income tax payable from prior years are recognized in the current income tax.
1. Deferred tax

Deferred income tax is calculated based on the temporary differences between the carrying amount of assets and liabilities and the corresponding tax bases used in the computation of taxable income.

Deferred income tax liabilities are generally recognized for all taxable temporary differences, and deferred tax assets are recognized when there are likely to be taxable income to deduct temporary differences, loss carryforwards, equipment purchase, research and development, as well as talent training expenditure.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and associates, except where the Group is able to control the reversal of the temporary difference and it is probable that said temporary difference will not be reversed in the foreseeable future. The deductible temporary differences related to said investments are recognized as deferred income tax only if it is probable that there will be sufficient taxable income to realize the temporary differences, and they are expected to be reversed in the foreseeable future. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable income will be available to allow all or part of the asset to be recovered. A previously unrecognized deferred tax asset is also reviewed at each balance sheet date, and its carrying amount will be increased as it has become probable that future taxable income will allow all or part of the asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates in the period in which the liabilities are expected to be settled or assets realized, based on tax rates and tax laws that have been enacted or substantively enacted at the balance sheet date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the balance sheet date, to recover or settle the carrying amount of its assets and liabilities.

Current and deferred income tax

Current and deferred taxes are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity; in which case, the current and deferred taxes are recognized in other comprehensive income or directly in equity, respectively.

V. Critical Accounting Judgements and Key Sources of Estimation and Uncertainty

In the application of the Group’s accounting policies, the management is required to make judgments, estimations, and assumptions about the relevant information that is not readily accessible from other sources based on historical experience and other relevant factors. Actual results may differ from these estimates. The Group takes into account the economic impact of the COVID-19 pandemic in its critical accounting estimates, and the management will constantly review the estimates and basic assumptions. If an amendment to estimates only affects the current period, it shall be recognized in the period of said amendment; if an amendment to accounting estimates affects the current year and future periods, it shall be recognized in the period of said amendment and future periods. Key Sources of Estimation and Assumption Uncertainty

(I) Inventory impairment

The NRV of inventories is the estimated selling price in the ordinary course of business, less the estimated cost of completion and the estimated costs necessary to make the sale. These estimates are based on current market conditions and historical and historical sales experience in similar products. Changes in market conditions may materially affect the results of these estimates.

119 -

VI. VII.	Cash and equivalents Cash on hand and petty cash Check and demand (current) deposit Cash equivalents (investments with original maturity date of less than 3 months) Time deposits The interest rate ranges of bank demand deposits Cash in banks Financial instruments at FVTPL Financial assets-current Financial assets designated as at FVTPL Non-derivative financial assets - Domestic listed stocks - Gold passbook Hybrid financial assets - structured deposit (Note) Subtotal Financial assets-non-current Financial assets designated as at FVTPL Non-derivative financial assets - Foreign unlisted stocks Hybrid financial assets - wealth management products (Note)	Dec. 31, 2020 Dec. 31, 2019 $ 832 $ 845 597,957 597,662 56,960 164,585 $ 655,749 $ 763,092 and time deposits at the balance sheet date are as follows: Dec. 31, 2020 Dec. 31, 2019 0.001%~1.40% 0.001%~2.27% Dec. 31, 2020 Dec. 31, 2019 $ 522,687 $ 529,570 15 15 88 - $ 522,790 $ 529,585 $ 142,166 $ 142,166 221,937 - $ 364,103 $ 142,166

Note: The structured deposit and wealth management product contracts signed between the Group and the banks. The structured deposits and wealth management products include an embedded derivative that is not closely related to the host contract. Since the host contract included in the hybrid contract is an asset within the scope of IFRS 9, the hybrid contract is mandatorily classified as at FVTPL.

VIII. Financial assets at FVTOCI

Financial assets at FVTOCI
Equity investment instruments Current Domestic investment Listed stocks Unity Opto Technology co., Ltd. (Note) Para Light Electronics Co., Ltd. Non-current Domestic investment Stocks listed in emerging stock markets and unlisted stocks Chipwell Tech Corporation Chipstar Tech Corporation Brightek Optoelectronic Co., Ltd.	Dec. 31, 2020 $ - 20,579 $ 20,579 $ 9,369 6,099 26,286 $ 41,754	Dec. 31, 2019
			$ 6,071 15,705 $ 21,776 $ 2,078 4,791 14,260 $ 21,129

120 -

Note: Because the public company Unity Opto Technology co., Ltd. (hereinafter referred to as Unity Opto) failed to publish its financial statements for 2019 within the specified time limit, it was sanctioned by the Taiwan Stock Exchange on April 1, 2020, and it stock was stopped to be traded starting from April 7, 2020. After prudent evaluation, the Group recognized all shares of Unity Opto held as financial asset valuation losses on March 31, 2020.

The Group has invested in the common stocks of the above-mentioned companies in accordance with medium and long-term strategic purposes, and expects to make profits through long-term investments. The management of the Group believes that if the short-term fair value fluctuations of these investments are recognized in profit or loss, it is inconsistent with the aforementioned long-term investment plan, so it has elected to designate these investments as at FVTOCI.

IX. Financial assets at amortized cost

Financial assets at amortized cost
Current Time deposits with original maturity date of more than 3 months Time deposits with original maturity date of less than 3 months - pledge Non-current Time deposits with original maturity date of more than 1 year	Dec. 31, 2020 $ 229,367 329,565 $ 558,932 $ 6,566	Dec. 31, 2019
			$ 295,054 348,327 $ 643,381 $ 6,505

As of December 31, 2020 and 2019, the interest rate range of the pledged time deposits with the original maturity date of less 3 months and the those with more than 3 months were 0.20%–1.50% and 0.66%– 2.40% per annum, respectively.

As of December 31, 2020 and 2019, the interest rate range of the pledged time deposits with original maturity date of over one year was 0.755%–0.815% and 1.035%–1.065%, respectively. For information on pledged financial assets measured at amortized cost, please refer to Note 35.

X. Notes receivable, accounts receivable, and other receivables

Note receivable From operations Trade receivable At amortized cost Gross carrying amount Less: Allowance for impairment loss Accounts receivable - related parties Other receivables-current Business tax refund receivable Proceeds from disposal of right-of-use assets receivable (Note) Others	Dec. 31, 2020 $ 9,224 $ 868,128 ( 11,955) 856,173 903 $ 857,076 $ 7,469 58,019 765 $ 66,253	Dec. 31, 2019	Dec. 31, 2019
	(	(	$ 17,284 $ 803,304 5,549) 797,755 - $ 797,755 $ 9,814 - 2,084 $ 11,898

Note: As for the proceeds from disposal of right-of-use assets receivable, the Group signed a state-owned land use right recovery agreement with the sub-center of the Donghu New Technology Development Zone, Wuhan Land Consolidation and Reserve Center, China, in the first half of 2020. The total price is CNY 61,624,000 (approximately NT$269,729,000) to recover part of the land use rights of Yuanmao Opto-electronic Technology (Wuhan) Co., Ltd. located in Wuhan, mainland China. As of December 31, 2020, the relevant transfer procedures had been completed, and the amount of NT$174,980,000 was recognized as gains on disposal of assets (detailed in Notes 16 and 27), and the balance of said proceeds of NT$58,019,000 has not been recovered.

121 -

(I) Notes and accounts receivable

The average credit period for customers is open account with net 30 to 180 days. In addition to the loss allowance for individual customers’ actual credit impairment loss, the Group refers to historical experience, considers individual customers’ financial status, industries, competitive advantages, and prospects, and divides them into different risk groups and recognizes loss allowances for each group based on their expected loss rates. In addition, a 100% loss allowance is recognized for accounts receivable with an account opened for over 365 days and no other credit guarantee provided.

In order to reduce credit risk, the management of the Group is responsible for the determination of credit limit, credit approval, and other monitoring procedures to ensure that appropriate actions have been taken in the recovery of overdue receivables. In addition, the Group reviews the recoverable amount of the receivables one by one at the balance sheet date to ensure that the appropriate impairment loss is recognized for uncollectible receivables. In this regard, the management of the Group believes the Group’s credit risk was significantly reduced.

The Group applies the simplified approach to providing for expected credit losses prescribed by IFRS 9, which permits the use of lifetime expected loss provision for all trade receivables.

If there is evidence that the counterparty is facing serious financial difficulties and the Group cannot reasonably expect to recover the amount, e.g., the counterparty is in liquidation, the Group directly writes off the relevant accounts receivable, but will continue to try to collect the receivable. The recovered amount is recognized in profit or loss.

The aging analysis of notes and accounts receivable is as follows:

Dec. 31, 2020

Dec. 31, 2020
Gross carrying amount Loss allowance (lifetime ECLs) Amortized cost Dec. 31, 2019 Gross carrying amount Loss allowance (lifetime ECLs) Amortized cost	O/A 1–120 days $ 717,030 - $ 717,030 O/A 1–120 days $ 707,084 $ 707,084		121–180 days $ 145,801 - $ 145,801 121–180 days $ 108,274 319) $ 107,955		181–365 days $ 7,065 3,596) $ 3,469 181–365 days $ 3,980 3,980) $ -		Over 365 days $ 8,359 8,359) ( $ - Over 365 days $ 1,250 1,250) ( $ -	Total
				(		(		$ 878,255 11,955) $ 866,300 Total
		(		(		(		$ 820,588 5,549) $ 815,039

The above is an aging analysis based on the account opening date.

The information on the movements in the loss allowance for notes and accounts receivable is as follows:

follows:
Beginning retained earnings Impairment loss for the current year Effects of disposal of subsidiary Ending balance		2020 $ 5,549 6,406 - $ 11,955		2019
			(	$ 14,636 - 9,087) $ 5,549

(II) Other receivables

In order to reduce credit risk, the management of the Group will consider the publicly available financial information to give appropriate internal ratings for items without external information on ratings.

The Group considers the historical default loss rate and the debtor's current financial position to measure the 12-month ECLs or lifetime ECLs of other receivables.

XI. Inventories

Inventories
Finished goods Work in process Raw materials	Dec. 31, 2020 $ 263,236 282,773 182,716 $ 728,725	Dec. 31, 2019
			$ 271,433 236,469 154,996 $ 662,898

The inventory-related costs of sales in 2020 and 2019 were NT$2,067,874,000 and NT$2,134,783,000, respectively.

The cost of sales for 2020 and 2019 included the inventory valuation losses of NT$14,250,000 thousand and gains on recovery of NT$9,181,000, respectively.

XII. Non-current assets held for sale

Dec. 31, 2020 Dec. 31, 2019 Land and buildings held for sale $ - $ 2,833

122 -

The actual selling price exceeded the carrying amount of the relevant net assets, so when these units were classified as non-current assets held for sale, there was no impairment loss that shall be recognized. The Group signed a property sale and purchase agreement with a non-related party in December 2019 to dispose of the Company’s land and buildings at Linsen Road, Hsinchu City, at a price of NT$3,700,000 (without deduction of business tax and other disposal costs of NT$256,000), and disposal procedure was completed in February 2020. The land and buildings were originally accounted for under investment property, and were reclassified as non-current assets held for sale on December 31, 2019, and presented on a separate line in the consolidated balance sheet, and there was no impairment loss that shall be recognized during the reclassification. From January 1, 2020 to December 31, 2020, the Group recognized the depreciation expense of the non-current assets held for sale of NT$3,000 and the gains on disposal of the non-current assets held for sale of NT$614,000. Please refer to Note 27.

XIII. Subsidiary (I) Subsidiaries included in consolidated financial statements The detailed information of the subsidiaries at the end of the reporting period was as follows:

Investor	Investee	Main Business	Ownership (%)	Ownership (%)	Description
			Dec. 31, 2020	Dec. 31, 2019
The Company Long Benefit TEK Holding Co., Ltd. Keyway International L.L.C. Keeper Technology Global Unity Int’l Co., Ltd. Creation New Technology Inc.	TEK Holding Co., Ltd. Long Benefit Investment Co., Ltd. (Long Benefit) Keeper Technology Co. Ltd. (Keeper Technology) Xu Qi Co., Ltd. (Xu Qi) Keeper Technology Keyway International L.L.C. Yuanmao Opto-electronic Technology (Wuhan) Co., Ltd. Global Unity Int’l Co., Ltd. Creation New Technology Inc. Kaishin Technology (Wuhan) Corporation	Investment in various overseas businesses General investment Mechanical installation, retail and wholesale of electronic materials, automobile and scooter parts and accessories, traffic sign equipment and other machinery, as well as manufacturing of lighting equipment and other machinery. Manufacturing of lighting equipment Mechanical installation, retail and wholesale of electronic materials, automobile and scooter parts and accessories, traffic sign equipment and other machinery, as well as manufacturing of lighting equipment and other machinery. Investment in various overseas businesses Other light-emitting diode production and sales business Investment in various overseas businesses Investment in various overseas businesses R&D and manufacturing of LED lighting equipment products, electronic component manufacturing, automobile parts manufacturing, as well as electrical appliances and audiovisual electronic products manufacturing	100.00 100.00 21.43 94.44 40.79 100.00 100.00 100.00 100.00 100.00	100.00 100.00 21.43 94.44 40.79 100.00 100.00 100.00 100.00 100.00	－－－－－ Note － Note Note Note

123 -

Note: It is a non-significant subsidiary, and its financial statements have not been audited by CPAs; however, the management of the Group believes that the financial statements of the aforementioned non-significant subsidiary would not be materially different if audited by CPAs.

XIV.		Investments accounted for using equity method Investments in Associates Material associates Hsinjing Holding Co. Ltd. (Hsinjing) (Note) Associates that are not individually material Less: Accumulated impairment	Dec. 31, 2020 $ 122,583 38,031 160,614 ( 7,499) $ 153,115	Dec. 31, 2019	Dec. 31, 2019

			(	(	$ 143,312 26,971 170,283 7,499) $ 162,784

Note: The Group originally held the shares of Tynsolar Corporation (hereinafter referred to as "Tynsolar"). On February 27, 2020, Tynsolar’s board of directors passed a resolution to suspend the trading of stocks on Taipei Exchange, and established Hsinjing by means of share swap. The Group received Hsinjing’s shares swapped from Tynsolar’s on March 2, 2020, with the ownership percentage remaining unchanged.
(I) Material associates

The Group's percentages of ownership interests and voting rights in associates at the balance sheet date are as follows:

date are as follows:
Company name Hsinjing (formerly known as Tynsolar)	Percentage of ownership and voting rights
	Dec. 31, 2020 22.79%	Dec. 31, 2019
		26.95%

The Group had substantive control over Hsinjing before June 20, 2019, and was classified as a subsidiary; it later judged that the Group had no substantive ability to dominate relevant activities of Hsinjing’s board of directors and management regarding important decisions since June 20, 2019. As a result, the Group lost control, and from the date of loss of control (regarded as the date of disposal), it ceased to include Hsinjing in the consolidated statements, and the fair value of its remaining investment was reclassified to the cost of investment in the associates. See Note 30 for details.

The Group continued to dispose of Hsinjing’s shares in 2020, resulting in a decrease in the ownership to 22.79%, but it still had a significant influence over the company.

The Group’s investment in Hsinjing using the equity method and its share of profit and loss and other comprehensive income of Hsinjing were recognized based on financial statements audited by other CPAs in 2020; and in 2019 they were calculated based on financial statements audited by CPAs. The information on Level 1 fair value of associate with open market quotes is as follows:

Company name Dec. 31, 2020 Dec. 31, 2019 Hsinjing $ 782,050 $ 201,585 (II) Aggregate information on associates that are not individually material 2020 2019

The Group’s share of Net income (loss) of the

continuing operations ( $ 13,800 ) ( $ 968 ) Refer to Table 4 in Note 38. “Information on Investees” for the nature of business, principal places of business, and countries of incorporation of the associates above.

The Group adopts the equity method to measure the above-mentioned associates that are not individually material, and its share of profits and losses and other comprehensive income is calculated based on financial statements that have not been audited by CPAs. However, the management of the Group believes that the financial statements of the aforementioned subsidiaries will not have a material impact if audited by CPAs.

124 -

XV. Property, plant, and equipment (I) Self-use

Self-use
Cost Balance at January 1, 2020 Additions Disposal Reclassification Net exchange differences Balance at December 31, 2020 Accumulated depreciation and impairment Balance at January 1, 2020 Depreciation expense Disposal Reclassification Net exchange differences Balance at December 31, 2020 Net amount at December 31, 2020 Cost Balance at January 1, 2019 Additions Disposal Reclassification Reclassified to investment property Effects of disposal of subsidiary Net exchange differences Balance at December 31, 2019 Accumulated depreciation and impairment Balance at January 1, 2019 Depreciation expense Disposal Recognized as impairment loss Reclassification Reclassified to investment property Effects of disposal of subsidiary Net exchange differences Balance at December 31, 2019 Net amount at December 31, 2019	S (	elf-owned land $ 62,273 - - - - $ 62,273 $ - - - - - $ - $ 62,273 $ 279,909 - - - 217,636 ) - - $ 62,273 $ - - - - - - - - $ - $ 62,273		Building $ 1,782,930 21,502 55,002 ) 24,032 3,779 $ 1,777,241 $ 490,729 101,177 26,307 ) 7 ) 2,861 $ 568,453 $ 1,208,788 $ 1,484,695 58,426 1,793 ) 279,162 24,484 ) - 13,076) $ 1,782,930 $ 424,687 92,115 1,663 ) - 9 ) 16,905 ) - 7,496) $ 490,729 $ 1,292,201		Equipment $ 2,039,573 24,097 35,402 ) 10,575 3,605 $ 2,042,448 $ 1,572,431 122,903 34,658 ) 29,393 ) 2,983 $ 1,634,266 $ 408,182 $ 2,151,658 92,046 84,114 ) 289,601 - 401,243 ) 8,375) $ 2,039,573 $ 1,720,810 115,925 82,305 ) 19,649 7 - 195,471 ) 6,184) $ 1,572,431 $ 467,142		Leased Improvements $ 63,155 - 39,362 ) - - $ 23,793 $ 32,271 484 36,327 ) 27,076 - $ 23,504 $ 289 $ 126,766 547 - 255 - 64,413 ) - $ 63,155 $ 87,527 1,549 - 5,277 - - 62,082 ) - $ 32,271 $ 30,884	O	ther Equipment $ 110,434 6,080 6,990 ) 11,030 63 $ 120,617 $ 85,435 9,713 6,731 ) 2,322 57 $ 90,796 $ 29,821 $ 122,944 6,475 3,059 ) 1,307 ) - 14,373 ) 246) $ 110,434 $ 92,988 8,985 3,027 ) - 199 ) - 13,092 ) 220) $ 85,435 $ 24,999	c	Unfinished onstruction and asset to be checked and accepted $ 225 4,902 - - 113 $ 5,240 $ - - - - - $ - $ 5,240 $ 4,841 581 - 5,188 ) - - 9) $ 225 $ - - - - - - - - $ - $ 225		Total
			( ( ( ( ( ( ( ( ( (		( ( ( ( ( ( ( ( (		( ( ( (		( ( ( ( ( ( ( ( ( (		( (		( ( ( ( ( ( ( ( ( ( ( (	$ 4,058,590 56,581 136,756 ) 45,637 7,560 $ 4,031,612 $ 2,180,866 234,277 104,023 ) 2 ) 5,901 $ 2,317,019 $ 1,714,593 $ 4,170,813 158,075 88,966 ) 562,523 242,120 ) 480,029 ) 21,706) $ 4,058,590 $ 2,326,012 218,574 86,995 ) 24,926 201 ) 16,905 ) 270,645 ) 13,900) $ 2,180,866 $ 1,877,724

Depreciation expenses of the property, plant and equipment are calculated on a straight-line basis over their estimated useful lives as shown in the following:

Buildings
Main buildings	15 to 55 years
Electromechanical
power equipment	8 years
Engineering systems	1.5 to 15 years
Equipment	1 to 20 years
Leased Improvements	3 to 17 years
Other Equipment	1 to 31 years

Please refer to Note 27 for the amounts of capitalized interest required by the Group in 2020 and 2019 due to borrowing costs.

Please refer to Note 35 for the amount of property, plant and equipment pledged for loans.

125 -

(II) Investment Property

Investment Property
Cost Six months ended Dec. 31, 2020 Accumulated depreciation and impairment Six months ended Depreciation expense Dec. 31, 2020 Net amount at December 31, 2020 Cost Jan. 1, 2019 Transferred in for reclassification Reclassified to held for sale Dec. 31, 2019 Accumulated depreciation and impairment Jan. 1, 2019 Transferred in for reclassification Reclassified to held for sale Dec. 31, 2019 Net amount at December 31, 2019		Investment property that has been		completed
		Land $ 216,119 $ 216,119 $ - - $ - $ 216,119 $ - 217,636 1,517) ( $ 216,119 $ - - - ( $ - $ 216,119	Building $ 22,314 $ 22,314 $ 16,051 1,418 $ 17,469 $ 4,845 $ - 24,484 2,170) $ 22,314 $ - 16,905 854) $ 16,051 $ 6,263		Total
	(			( (	$ 238,433 $ 238,433 $ 16,051 1,418 $ 17,469 $ 220,964 $ - 242,120 3,687) $ 238,433 $ - 16,905 854) $ 16,051 $ 222,382

Investment property includes land and buildings, of which buildings are depreciated on a straightline basis based on 55 years of useful life.

Due to the infrequent transactions in the comparable market and the inability to obtain reliable alternative fair value estimates for the Company’s investment property, the fair value cannot be determined reliably.

All the Company’s investment property is self-owned equity.

For the amount of investment property pledged for loans, please refer to Note 35.

XVI. Lease arrangements (I) right-of-use asset

se arrangements right-of-use asset
Right-of-use assets amounts Land Buildings Transport Equipment Other Equipment	Dec. 31, 2020 $ 89,336 18,262 679 1,550 $ 109,827	Dec. 31, 2019
			$ 107,938 25,667 1,668 1,398 $ 136,671

126 -

The additions of the right-of-use assets Depreciation charge for right-of-use assets Land Buildings Transport Equipment Other Equipment		2020 $ 1,308 $ 3,390 6,586 989 537 $ 11,502		2019
				$ 9,958 $ 3,664 8,367 1,194 613 $ 13,838

Note: The Group signed a state-owned land use right recovery agreement with the sub-center of the Donghu New Technology Development Zone, Wuhan Land Consolidation and Reserve Center, China, in April 2020. The total price is CNY 61,624,000 (approximately NT$190,439,000) to recover part of the land use rights of Yuanmao Opto-electronic Technology (Wuhan) Co., Ltd. located in Wuhan, mainland China. Please refer to Notes 10 and 27 (4).

Except for the additions and depreciation listed above, the Group did not have significant subleases and impairment for the years ended December 31, 2020 and 2019.

(II) lease liabilities

lease liabilities
Lease liabilities amounts Current Non-current	Dec. 31, 2020 $ 43,430 $ 98,335	Dec. 31, 2019
			$ 44,657 $ 106,575

Range of discount rate for lease liabilities is as follows:

Land Buildings Transport Equipment Other Equipment	Dec. 31, 2020 1.80% 1.80%~2.50% 1.90%~2.50% 1.79%~1.90%	Dec. 31, 2019
		1.80% 1.80%~2.50% 1.90%~2.50% 1.79%~1.90%

(III) Material lease-in activities and terms

The Group has leased land and built buildings for offices. The lease term is 37 years. Upon the termination of the lease term, the Group does not have preferential rights to acquire the land and buildings leased, and it is agreed that the Group shall not lease, sublease, or transfer all (including the right to use the parking space) or part of the asset leased, or in other methods in disguise, to third parties without the consent of the lessor.

(IV) Other lease information

consent of the lessor. Other lease information
		2020		2019
Short-term lease expense	$	937	$	1,447
Variable lease payments not included
in the lease liability measurement	$	-	$	630
Total cash outflow for leases	($	13,504)	($	18,997)
All the commitments that begin after the balance		sheet date during the term are as		follows:
	Dec. 31, 2020		Dec. 31, 2019
Lease commitment	$	172,522	$	184,756

127 -

XVII. Other intangible assets

Other intangible assets
				Other intangible
	Computer software				assets			Total
Cost
Balance at January 1, 2020		$	31,156	$	10,822		$	41,978
Acquired separately			92		-			92
Net exchange differences			90		-			90
Balance at December 31, 2020		$	31,338	$	10,822		$	42,160
Accumulated amortization and
impairment
Balance at January 1, 2020		$	29,118	$	9,574		$	38,692
Amortization expenses			1,126		85			1,211
Net exchange differences			85		-			85
Balance at December 31, 2020		$	30,329	$	9,659		$	39,988
Net amount at December 31, 2020		$	1,009	$	1,163		$	2,172
Cost
Balance at January 1, 2019		$	31,229	$	10,822		$	42,051
Acquired separately			136		-			136
Net exchange differences	(		209)		-	(		209)
Balance at December 31, 2019		$	31,156	$	10,822		$	41,978
Accumulated amortization and
impairment
Balance at January 1, 2019		$	28,139	$	9,488		$	37,627
Amortization expenses			1,155		86			1,241
Net exchange differences	(		176)		-	(		176)
Balance at December 31, 2019		$	29,118	$	9,574		$	38,692
Net amount at December 31, 2019		$	2,038	$	1,248		$	3,286
Amortization expenses of the property, plant and equipment are					calculated on a straight-line basis over
their estimated useful lives as shown in the following:
Computer software					1 to 6 years
Other intangible assets					1 to 18 years

XVIII. Prepayments

Prepayments
Current Input VAT Prepayment for purchases Offset against value-added tax payable Others	Dec. 31, 2020 Dec. 31, 2019 $ 3,454 $ 1,005 641 726 147 147 11,632 13,515 $ 15,874 $ 15,393
		$ 1,005 726 147 13,515 $ 15,393

128 -

XIX.	Other assets Other financial assets-current Restricted demand deposits Other financial assets-non-current Restricted demand deposits Current Payments for others Other current assets Non-current Long-term prepayments	Dec. 31, 2020 $ 12,475 $ 3,788 $ 3,235 1,112 $ 4,347 $ 4,136	Dec. 31, 2019	Dec. 31, 2019
				$ 13,728 $ 6,285 $ 3,887 954 $ 4,841 $ 5,949

For other information on financial assets pledged or mortgaged, please refer to Note 35.

XX. Loan

(I) Short-term borrowings

n Short-term borrowings
Secured borrowings Bank loans Unsecured borrowings Credit borrowings and borrowings for purchase of materials	Dec. 31, 2020 $ 437,759 85,559 $ 523,318	Dec. 31, 2019
			$ 532,200 413,277 $ 945,477

The interest rates of bank borrowings were 0.88%–2.12% and 0.92%–2.94% as of December 31, 2020 and 2019, respectively. Please refer to Note 35 for details of pledge and security for borrowings. (II) Long-term borrowings

Long-term borrowings
Secured borrowings Syndicated loan (1) Loan project for return to Taiwan for investment (2) Bank revolving borrowings (3) Unsecured borrowings Loan project for return to Taiwan for investment (2) Bank revolving borrowings (3) Less: Current portion Long-term borrowings	Dec. 31, 2020 $ 765,940 112,100 1,667 16,400 - ( 160,707) $ 735,400	Dec. 31, 2019
	(	(	$ 845,200 - 10,555 - - 81,593) $ 774,162

The syndicated loan is a syndicated credit agreement signed between the Company and five participating banks including Bank of Taiwan. In accordance with the relevant terms of the loan agreement, it is stated in the first supplementary agreement for the syndicated loan that the review shall be conducted every six months during the term of the agreement (from November 2017 to November 2022), and the following financial ratios and regulations shall be maintained:
(1) Current ratio: The ratio of current assets to current liabilities, which shall not be less than 100%;
(2) Debt ratio: The ratio of total liabilities to net value of tangible assets, which shall not be higher than 200%;
(3) Interest coverage ratio: The ratio of pre-tax net income plus interest expense and the sum of depreciation and amortization to interest expense, which shall not be less than 300%;
(4) Net value of tangible assets: The net value less the amount of intangible assets, which shall be maintained at NT$3,000,000,000 thousand or more.

The aforementioned financial ratios and regulations shall be calculated based on the annual and semi-annual consolidated financial statements audited/reviewed by CPAs. If the above agreed

129 -

financial ratios and regulations are not met, adjustments and improvements shall be made before the date of the next issue of the consolidated financial report. The adjustment period shall not be regarded as a breach of the agreement for the time being. The Company and the loan facility management bank may renegotiate the relevant financial ratios, but the renegotiated financial ratios and standards must be approved as resolved by the majority of the participating banks in the agreement.

The Company takes out a medium-to-long-term bank loan. According to the agreement, the expiry date of 24 months from the date of taking out the loan is the first period, and every three months thereafter is a period. The principal shall be amortized and repaid on the expiry date of each period. The maturity date is November 2020, and the interest rate was 1.79% as of December 31, 2020 and 2019.

Please refer to Note 35 for details of pledge and security for borrowings.

The loan project for return to Taiwan for investment is based on the program of "Loan for Welcoming Overseas Taiwanese Businesspeople to Return to Taiwan for Investment" launched by the National Development Fund, Executive Yuan. Since March 2020, the Group has successively taken out medium-term bank loans from domestic banks with maturity dates between October 14, 2024 and December 25, 2026, and the Company shall repay the principal and interest in an amortized manner on a monthly basis. The interest rate of bank loans was 0.37% to 1.00% as of December 31, 2020.
The bank revolving loans are new bank loans of NT$10,000,000 and NT$5,000,000 obtained by the Group on November 15, 2018 and May 20, 2019, respectively, with the maturity dates of November 15, 2021 and August 12, 2021, respectively, and the principal and interest are amortized and repaid on a monthly basis. The interest rates of bank borrowings were 1.55% and 2.30% as of December 31, 2020 and 2019, respectively.

XXI. Accounts payable and notes payable

XXII.

Accounts payable and notes payable
Note payable From operations Accounts payable From operations - related parties From operations - non-related parties Other liabilities Current Other payables Wages, salaries, and bonuses payable Employee compensation and remuneration of directors payable Labor and health insurance premium and pension payable Plant and equipment payable Utility bills payable Processing expense payable Services expense payable Expenses payable Others Other current liabilities Refund liabilities Custodial receipts Temporary credit Others	Dec. 31, 2020 $ 6,251 $ 735 346,044 $ 346,799 Dec. 31, 2020 $ 77,564 38,722 16,794 5,124 6,921 10,872 1,369 26,225 22,577 $ 206,168 $ 17,053 5,090 682 3,071 $ 25,896	Dec. 31, 2019
		$ 7,531 $ 839 283,974 $ 284,813 Dec. 31, 2019
			$ 70,603 43,485 12,399 2,910 7,244 7,074 999 30,376 4,514 $ 179,604 $ - 3,478 661 - $ 4,139

130 -

XXIII. Provisions

Provisions
Non-current Warranty (I) Employee benefits (II) Balance at January 1, 2019 Increase for the current year Used in the current year Effects of disposal of subsidiary Balance at December 31, 2019 Increase for the current year Used in the current year Balance at December 31, 2020		Dec. 31, 2020 $ - 15,428 $ 15,428 Warranty Employee benefits $ 5,393 $ 14,708 16 2,410 - ( 1,390 ) 5,409) ( 968) - 14,760 - 1,879 - ( 1,211) $ - $ 15,428	Dec. 31, 2019
				$ - 14,760 $ 14,760 Total
	(		( ( (	$ 20,101 2,426 1,390 ) 6,377) 14,760 1,879 1,211) $ 15,428

(I) The provision for warranty liabilities is the present value of the best estimate of the future outflow of economic benefits caused by warranty obligations by the management of the Group as agreed in the sales contract. This estimate is based on historical warranty experience.

(II) Provision for employee benefits liability is the estimate of employee long-term service bonuses.

XXIV. Post-employment benefit plans

(I) Defined contribution plans

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

The employees of the Group's subsidiary in mainland China are members of the retirement benefit plan managed by the mainland China government. The subsidiary must contribute a specific proportion of the salary cost to the retirement benefit plan to provide funding for the plan. The Group’s obligation for this government-managed retirement benefit plan is only to contribute a specific amount. (II) Defined benefit plan

The defined benefit plan adopted by the Group in accordance with the Labor Standards Act is the defined benefit plan under the management of the government of R.O.C. Pension benefits are calculated on the basis of the length of service and average monthly salaries of the 6 months before retirement. The Group contributes an amount, which equals to 2% of each employee’ total monthly salary and wage, which is deposited by the Pension Fund Monitoring Committee in the pension account with the Bank of Taiwan in the name of the committee. Before the end of each year, if the balance in the pension account assessed is inadequate to pay for the retirement benefits for employees who meet the retirement requirements in the following year, the Company will contributes an amount to make up for the difference in a lump sum by the end of March of the following year. The pension account is managed by the Bureau of Labor Funds, Ministry of Labor; the Group has no right to influence the investment management strategy.

The amounts included in the consolidated balance sheets in respect of the Company’s defined benefit plan are as follows:

are as follows:
Present value of defined benefit obligation Fair value of plan assets Net defined benefit liability	Dec. 31, 2020 $101,097 ( 53,839) $ 47,258	Dec. 31, 2019
	(	(	$ 98,333 53,586) $ 44,747

131 -

The changes in net defined benefit liability:

Jan. 1, 2019 servicing costs Service cost for the current year Interest expense (income) Recognized in loss (profit) Remeasurement Return on plan assets (except for the amount included in the net interest) Actuarial gains (losses) - Changes in financial assumptions - Experience adjustments Recognized in other comprehensive (income) loss Contributions from the employer Benefits paid Effects of disposal of subsidiary Dec. 31, 2019 servicing costs Service cost for the current year Interest expense (income) Recognized in loss (profit) Remeasurement Return on plan assets (except for the amount included in the net interest) Actuarial gains (losses) - Changes in financial assumptions - Experience adjustments Recognized in other comprehensive (income) loss Contributions from the employer Benefits paid Settlement Effects of disposal of subsidiary Dec. 31, 2020	Present value of defined benefit obligation $ 100,550 1,056 935 1,991 - 2,138 3,197 5,335 - ( 8,672) ( 871) 98,333 812 664 1,476 - 3,073 6,820 9,893 - ( 3,408) ( 5,197) - $ 101,097	Fair value of plan assets ($ 57,752) - ( 607) ( 607) ( 2,265 ) - - ( 2,265) ( 1,944) 8,672 310 ( 53,586) - ( 374) ( 374) ( 1,916 ) - - ( 1,916) ( 1,978) 3,408 607 - ($ 53,839)	Net defined benefit liability	Net defined benefit liability
	( ( ( (	( ( ( ( ( ( ( ( ( ( ( ( (	( ( ( ( ( (	$ 42,798 1,056 328 1,384 2,265 ) 2,138 3,197 3,070 1,944) - 561) 44,747 812 290 1,102 1,916 ) 3,073 6,820 7,977 1,978) - 4,590) - $ 47,258

Due to the pension plans under the Labor Standards Act, the Group is exposed to the following risks:

Investment risk: The Bureau invests labor pension funds in domestic (foreign) equity securities, debt securities, and bank deposits on its own use and through agencies entrusted. However, the Group’s amount allocated to plan assets is calculated based on the interest rate not lower than the local bank's interest rate for 2-year time deposits.
Interest risk: A decrease in the interest rate in the government bonds will increase the present value of the defined benefit obligation; however, the return on the debt investment through the plan
132 -

assets will also increase, and the increases will partially offset the effect of the net defined benefit liability.

Salary risk: The present value of the defined benefit obligation is calculated with reference to the future salaries of the participants in the plan. As such, an increase in the salary of the participants in the plan will increase the present value of the defined benefit obligation.

The actuarial valuations of the present value of the defined benefit obligation were carried out by

qualified actuaries. The critical assumptions made on the measurement date are as follows:

	Dec. 31, 2020	Dec. 31, 2019
Discount rate	0.36%	0.74%
Salary adjustment rate	2.50%	2.50%
If each of the critical actuarial assumptions is subject to reasonably possible changes, when all other
assumptions remain unchanged, the amounts by which the present value of the defined benefit obligation
would increase (decrease) are as follows:

would increase (decrease) are as follows:
	Dec. 31, 2020		Dec. 31, 2019
Discount rate
0.25% increase	($	2,022)	($	3,725)
0.25% decrease	$	2,022	$	3,912
Salary adjustment rate
0.5% increase	$	3,943	$	3,725
0.5% decrease	($	3,741)	($	3,539)
As actuarial assumptions may be correlated, it is unlikely that only a			single assumption would occur
in isolation of one another, so the sensitivity analysis above may not reflect the actual changes in the
present value of the defined benefit obligation.

XXV. (I)	The expected contributions to the plan for the following year The weighted average duration of the defined benefit obligation Equity Ordinary shares Authorized shares (in thousands) Authorized capital Issued and paid shares (in thousands) Issued capital		Dec. 31, 2020 $ 1,943 10.8 years Dec. 31, 2020 500,000 $ 5,000,000 300,621 $ 3,006,223		Dec. 31, 2019
					$ 1,870 11 years Dec. 31, 2019
					500,000 $ 5,000,000 300,621 $ 3,006,223

The ordinary shares issued, with a par value of NT$10 per share, are entitled to one voting right per share and to the right to receive dividends.

133 -

(II)

Capital reserves May be used to offset a deficit, distributed as cash dividends, or transferred to share capital (1) Shares premium from issuance Premium of corporate bond conversion The difference between the equity price and the book value of acquisition or disposal of subsidiary May be used to offset a deficit only Changes in the net equity of subsidiaries and associates accounted for using equity method (2) Treasury stock transaction Expired employees share option Others (Note)	Dec. 31, 2020 $ 6 28,983 ( 3,064 ) 63,055 37,403 16,410 81,901 $ 224,694	Dec. 31, 2019	Dec. 31, 2019
	(	(	$ 6 28,983 3,064 ) 68,034 31,632 16,410 81,901 $ 223,902

Note: Reclassified from the difference in the repurchase of the convertible corporate bonds.

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).
This type of capital surplus is the effect of equity transactions recognized due to changes in the Company’s equity or the adjustment to the capital surplus of the subsidiary accounted for using the equity method by the Company when the Company has not actually acquired or disposed of the equity of the subsidiary.

(III) Retained earnings and dividends policy

The Company’s shareholders’ meeting passed a resolution on June 24, 2019, to amend the Articles of Incorporation. According to the Company’s amended Articles of Incorporation, the Company’s earnings distribution policy stipulates that the Company's earnings distribution or loss compensation shall be proposed by the board of directors after the end of each semi-annual fiscal period. In the case of issue of new shares, it shall be submitted to the shareholders’ meeting for a resolution. Any cash distribution of dividend, profit, legal reserve or capital reserve, whether in whole or in part, must be resolved in a board meeting with more than two-thirds of the board present, voted in favor by more than half of attending directors, and reported in the upcoming shareholder meeting.

According to the earnings distribution policy of the Company’s Articles of Incorporation, if there is a net income after tax at the end of the year, the Company shall pay all taxes in accordance with the law and compensate accumulated losses first, and then allocate 10% as a statutory reserve in accordance with the law unless the statutory reserve has reached the same amount of the Company paid-in capital. Where there are any earnings left, the Company allocates or reverses the special reserve according to laws or regulations or regulations of the competent authority. If there are any earnings remaining, together with the undistributed earnings at the beginning of the same period (including adjustments to the amount of undistributed earnings), the board of directors shall draft an earnings distribution proposal and submit it to the shareholders’ meeting to resolve the distribution of shareholders’ dividends. For information on the policy of the employee compensation and remuneration of directors and supervisors as in the Company's Articles of Incorporation, refer to Note 27 (9) regarding employee compensation and remuneration of directors.

In addition according to the Company's Articles of Incorporation, the Company adopts a dividend policy that allows the board of directors to propose dividends after taking into consideration its future capital requirements, long-term financial plans, and shareholders' needs for cash inflow. Profit sharing to shareholders can be paid in cash or shares, provided that the cash portion does not amount to less than 10% of total profit sharing.

Appropriation of earnings to legal reserve shall be made until the reserve equals the Company’s paid-in capital. Legal reserves may be used to offset the deficit. 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.

The Company set aside and reversed a special reserve in accordance with the FSC Letters Jin-GuanZheng-Fa No. 1010012865, Jin-Guan-Zheng-Fa No. 1010047490, and Jin-Guan-Zheng-Fa No.

134 -

1030006415, as well as the directive, entitled “Questions and Answers for Special Reserves Appropriated Following Adoption of IFRSs”.

The earnings distribution for 2019 and 2018 were approved in the shareholders’ meetings on June 23, 2020, and June 20, 2019, respectively, and the distribution was as follows:

Statutory reserves Appropriated as special reserve Cash dividends	Appropriation of Earnings 2019 2018 $ 17,679 $ 53,782 12,108 7,562 90,187 360,746	Dividends Per Share (NT$)	Dividends Per Share (NT$)
	2019	2019	2018 $ - - 1.20
	$ 17,679 12,108 90,187	$ - - 0.30

The Company's board of directors resolved the 2020 earnings distribution on March 25, 2021 as follows:

follows:
Statutory reserves Reversed special reserve Cash dividends Cash dividend per share (NTD)		2020
		$ 28,486 $ 33,220 $ 225,467 $ 0.75

The earnings distribution proposal for 2020 is to be reported at the annual meeting of shareholders that is expected to be held on May 31, 2021.

(IV)

(V)

Special reserves

			2020		2019
Opening balance		$	76,927	$	69,365
Appropriated as special reserve
	Amount debited to other equity
items			12,108		7,562
Closing balance		$	89,035	$	76,927
Other items of equity
1.	Exchange Differences in Translating the	Financial Statements of Foreign Operations
			2020		2019
	Opening balance	( $	30,757 )	( $	21,662 )
	Effect of change in the tax rate				-
	Incurred in the current year
	Exchange differences on
	translating the financial
	statements of foreign
	operations		12,285	(	11,368 )
	Relevant income taxes	(	2,457)		2,273
	Closing balance	($	20,929)	($	30,757)
2.	Unrealized Gain (Loss) on Financial Assets at Fair Value Through Other Comprehensive Income
			2020		2019
	Opening balance	($	58,279)	($	55,264)
	Incurred in the current year
	through other comprehensive
	income		19,428	(	3,250 )
	Relevant income taxes	(	3,398)		235
	Other comprehensive income for
	the current year		16,030	(	3,015)
	Closing balance	($	42,249)	($	58,279)

135 -

(VI) Non-controlling interests

(VI)	Non-controlling interests
			2020			2019
	Opening balance	$	33,824		$	423,813
	Share attributable to non-controlling
	interests
	Net loss of the current year		3,403			29,532
	Exchange Differences in
	Translating the Financial
	Statements of Foreign
	Operations			57	(	137 )
	The difference between the
	equity price and the book
	value of acquisition or
	disposal of subsidiary					2,839
	Decrease in non-controlling
	interests for loss of control
	of Hsinjing (Note 30)			-	(	422,223)
	Closing balance	$	37,284		$	33,824
(VII)	Treasury stock
		Shares	(Thousands)		Shares	(Thousands)
	Reason for redemption		2020			2019
	Opening balance			-			-
	Increase for the current year		2,656				-
	Decrease for the current year	(	2,565)				-
	Closing balance			-			-

The Company's board of directors resolved on March 26, 2020 to transfer and buy back 2,656,000 treasury shares at a transfer price of NT$11.59 per share on the record date of July 17, 202, to motivate employees and enhance their commitment.

The treasury shares held by the Company shall not be pledged nor shall be entitled to the rights to dividends and voting rights in accordance with the provisions of the Securities and Exchange Act.

XXVI.

VI. (I)	Revenue Sales revenue Revenue from power plant Electricity sales income Others Contract balance Notes and accounts receivable (Note 10) Lease liabilities - current		2020 $ 2,390,524 - - 38,092 $ 2,428,616 Dec. 31, 2020 $ 866,300 $ 2,222		2019	2019
					$ 2,289,617 155,906 14,217 60,115 $ 2,519,855 Dec. 31, 2019
						$ 815,039 $ 10,246

The change in contract assets and liabilities is mainly due to the difference between the point of meeting the performance obligation and the time of payment by the customer. The contract liabilities at the beginning of the year and the performance obligations that have been satisfied in the prior years recognized as revenue in the current period is as follows:

Contract liabilities at the beginning of year Sales		2020 $ 8,024		2019
				$ 4,844

(II) Disaggregation of revenue from customer contracts Please refer to Note 40 for revenue disaggregation information.

136 -

XXVII. Net income from continuing operations (I) Net amount of other gains (losses)

VII.Net income from continuing operations (I) Net amount of other gains (losses)
2020 Gains on disposal of property, plant and equipment $ 14,110 Impairment losses on property, plant and equipment - Others 328 $ 14,438 (II) Interest income 2020 Cash in banks $ 5,184 Financial assets at amortized cost 3,936 $ 9,120 (III) Other income 2020 Dividend revenue $ 18,385 Insurance claim income 7,470 Subsidy income 3,427 Rent income 1,208 Gains on write-off of accounts payable 13 Others 11,689 $ 42,192 (IV) Other gains (losses) 2020 Net foreign exchange losses ( $ 36,006 ) Net gains on financial assets at FVTPL 212,528 Gains on disposal of right-of-use assets 174,980 Gains on disposals of investments 17,475 Gains on disposal of non-current assets held for sale 614 Gains on lease modification 10 Gains on disposal of subsidiary (Note 30) - Indemnify losses ( 17,053 ) Miscellaneous expenditure ( 11,649) $ 340,899 (V) Financial costs 2020 Interest on bank loans $ 22,095 Interest on lease liabilities 2,068 Less: The amount of the cost of assets included for meeting the criteria - $ 24,163 Relevant information on capitalization of interest is as follows: 2020 Amount of capitalized interest $ - Interest rate of capitalized interest - (VI) Impairment loss on financial assets (gain on reversal) 2020 Inventories (including operating costs) $ 14,250		2019
	( (	$ 41 24,926 ) - $ 24,885) 2019
		$ 13,863 12,899 $ 26,762 2019
		$ 19,144 - 5,131 2,069 14,744 11,259 $ 52,347 2019
	( (	$ 28,460 ) 250,310 - - 6,791 1 8,030 - 4,468) $ 232,204 2019
	(	$ 25,667 2,337 1,926) $ 26,078 2019
		$ 1,926 1.79% 2019
	(	$ 9,181)

137 -

(VII) Depreciation and amortization

(VII) Depreciation and amortization
An analysis of depreciation by function Operating cost Operating expenses An analysis of intangible asset amortization expenses by function Operating cost Administrative expenses R&D expenses (VIII) Employee benefits expense Short-term employee benefits Post-employment benefits (Note 25) Defined contribution plans Defined benefit plan Total employee benefits expense An analysis by function Operating cost Operating expenses	2020 $ 214,403 32,797 $ 247,200 $ 23 1,104 84 $ 1,211 2020 $ 609,275 19,121 1,102 $ 629,498 $ 429,902 199,596 $ 629,498	2019
		$ 198,703 33,709 $ 232,412 $ 20 1,121 100 $ 1,241 2019
		$ 551,382 18,787 1,384 $ 571,553 $ 383,356 188,197 $ 571,553

(IX) Employees’ compensation and remuneration of directors The Articles of Incorporation of the Company stipulate that the employees’ compensation and remuneration of directors shall be appropriated at the rates from 5%–15% and no higher than 5%, respectively, of net income before tax and net of employees’ compensation and remuneration of directors. The employees’ compensation and remuneration of directors for 2020 and 2019 were approved by the board of directors on March 25, 2021 and March 26, 2020, respectively, were as below: Ratio

Ratio
Employee compensation Directors' remuneration Amount Employee compensation Directors' remuneration		2020		2019
				5% 2%
				2019
	Cash		Cash		Stocks $ - -
	$ 26,907 11,532		$ 10,282 3,500

If there is a change in the proposed amounts after the annual consolidated financial statements were authorized for issue, the differences are recorded as a change in accounting estimate and will be reflected in the following year.

There is 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 years ended December 31, 2019 and 2018.

Information on the 2020 and 2019 employees’ compensation and remuneration of directors resolved by the Company’s board of directors is available on the Market Observation Post System website of the Taiwan Stock Exchange.

(X) Foreign exchange gains (losses)

Taiwan Stock Exchange. Foreign exchange gains (losses)
Foreign exchange gains Total foreign exchange losses Net gains (losses)		2020 $ 109,263 145,269) $ 36,006)		2019
	( (		( (	$ 125,315 153,775) $ 28,460)

138 -

XXVIII. Income tax

(I) Income tax recognized in profit or loss Major components of tax expense were as follows:

ome tax Income tax recognized in profit or loss Major components of tax expense were as follows:
2020 Tax currently payable Incurred in the current year $ 23,391 Prior years adjustment 1,667 Levied on unappropriated earnings - 25,058 Deferred tax Incurred in the current year 31,030 Income tax expense recognized in profit or loss $ 56,088 The adjustment to accounting income and income tax expenses is as follows: 2020 Net income before tax $ 363,989 Income tax expense calculated based on statutory tax rate for net income tax before tax $ 104,075 Permanent difference ( 64,134 ) ( Levied on unappropriated earnings - Basic tax difference payable 7,650 Unrecognized loss carryforwards and deductible temporary difference (including the unrecognized amounts in prior years recognized in the current year) 6,830 Adjustments to income tax expenses of prior years 1,667 Income tax expense recognized in profit or loss $ 56,088		2019
		$ - 4,420 658 5,078 17,063 $ 22,141 2019
	(	$ 231,531 $ 46,306 182,090 ) 658 - 152,847 4,420 $ 22,141

In July 2019, the President of R.O.C. announced the amendment to the Statute for Industrial Innovation, which clearly stipulates that the construction or purchase of specific assets or technologies based on the undistributed earnings from the fiscal year of 2018 may be included as an item debited to the undistributed earnings. When calculating the tax on the undistributed earnings, the Group only deducted the amount of capital expenditure that has actually been used for reinvestment. (II) Income tax recognized in other comprehensive income

				2020			2019
	Deferred tax
	Incurred in the current year
	- Translation of foreign
	operations	(	$	2,457 )		$	2,273
	- Unrealized gain (loss) on
	financial assets at FVTOC	(		3,398)			235
	Income tax recognized in other
	comprehensive income	(	$	5,855)		$	2,508
(III)	Current tax assets and liabilities
		Dec. 31, 2020				Dec. 31, 2019
	Current tax assets
	Income tax refund receivable		$		-	$	16,733
	Current tax liabilities
	Income tax payable		$	20,170		$		-

139 -

(IV) Deferred tax assets and liabilities The changes in the deferred tax assets and liabilities are as follows: 2020

2020
Deferred tax assets Temporary difference Impairment losses, including loss allowance Property, plant, and equipment Financial assets at FVTOCI Provisions Refund liabilities Defined benefit pension plan Investment losses Exchange differences on translating the financial statements of foreign operations Temporary difference Loss carryforwards Deferred tax liabilities Temporary difference Unrealized foreign exchange gains Financial assets at FVTOCI 2019 Deferred tax assets Temporary difference Impairment losses, including loss allowance Property, plant, and equipment Financial assets at FVTOCI Provisions Defined benefit pension plan Investment losses Exchange differences on translating the financial statements of foreign operations Temporary difference Loss carryforwards Deferred tax liabilities Temporary difference Unrealized foreign exchange gains	Opening balance $ 18,317 1,374 1,140 3,474 - 3,898 25,956 7,688 61,847 60,158 $ 122,005 $ 8,339 - $ 8,339 Opening balance $ 18,317 14,274 905 3,270 4,004 42,605 5,415 88,790 84,582 $ 173,372 $ 9,151	Recognized in profit or loss $ 4,420 ( 10 ) - ( 388 ) 3,410 ( 175 ) ( 25,292 ) - ( 18,035 ) ( 6,290) ($ 24,325) ( $ 4,096 ) 10,801 $ 6,705 Recognized in income (including effects of disposal of subsidiary) $ - ( 12,900 ) - 204 ( 106 ) ( 16,649 ) - ( 29,451 ) ( 24,424) ($ 53,875) ($ 812)	Recognized in other comprehensive income $ - - ( 3,398 ) - - - - ( 2,457) ( 5,855 ) - ($ 5,855) $ - - $ - Recognized in other comprehensive income (including effects of disposal of subsidiary) $ - - 235 - - - 2,273 2,508 - $ 2,508 $ -		Closing balance
				(	$ 22,737 1,364 2,258 ) 3,086 3,410 3,723 664 5,231 37,957 53,868 $ 91,825 $ 4,243 10,801 $ 15,044 Closing balance
		( ( ( ( ( ( (			$ 18,317 1,374 1,140 3,474 3,898 25,956 7,688 61,847 60,158 $ 122,005 $ 8,339

140 -

(V) Deductible temporary difference of deferred tax assets and unused loss carryforwards not recognized in the consolidated balance sheet

the consolidated balance sheet
Loss carryforwards Due in 2020 Due in 2023 Due in 2025 Due in 2026 Due in 2027 Due in 2028 Deductible temporary difference Unrealized foreign exchange losses Impairment losses, including loss allowance Investment losses Net defined benefit liability	Dec. 31, 2020 $ - 19,597 - 1,871 - - $ 21,468 $ 311 7,499 - - $ 7,810	Dec. 31, 2019
			$ 6,352 27,848 528 5,526 1,232 33 $ 41,519 $ 637 12,408 17,454 1,536 $ 32,035

(VI) Information on unused loss carryforwards

As of December 31, 2020, the information on loss carryforwards is as follows: Balance of unused loss

Balance of unused loss
carryforwards $ 19,597 115,098 84,625 37,747 33,740 $ 290,807	Last valid year
	2023 2026 2028 2029 2030

(VII) Income tax assessments

The Company’s profit-seeking enterprise income tax returns up to 2018 had been examined and approved by the tax authorities.

XXIX. Earnings per share (EPS)

Earnings per share (EPS)
Basic earnings per share Diluted earnings per share		2020 $ 1.02 $ 1.01	Unit: NT$ Per Share 2019 $ 0.60 $ 0.60

The net income and weighted average number of ordinary shares outstanding in calculating earnings per share were as follows:

share were as follows:
Net income of the current year Net income in the computation of basic earnings per share Number of shares Weighted average number of ordinary shares in computation of basic earnings per share Effect of potentially dilutive ordinary shares: Employee compensation	2020 $ 304,498 2020 299,849 1,816		2019
		$ 179,858 Unit: Thousand Shares 2019
			300,622 1,173

141 -

Weighted average number of ordinary shares used in the computation of diluted earnings per share 301,665 301,795

If the Company can settle the compensation to employees in cash or shares, the Company assumes the entire amount of the compensation would 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 if the effect is dilutive. Such a dilutive effect of the potential shares is included in the computation of diluted earnings per share until the shareholders resolve the number of shares to be distributed to employees at their meeting in the following year.

XXX. Disposal of subsidiary

The Group lost control of Hsinjing (formerly known as Tynsolar) on June 20, 2019; please refer to Note 14.

(I) Analysis of assets and liabilities over which control is lost

14. (I) Analysis of assets and liabilities over which control is lost
Current assets Cash and equivalents Accounts receivable and notes Inventories Other current assets non-current assets Property, plant, and equipment Other non-current assets Current liabilities Short-term borrowings Payables Other current liabilities non-current liabilities Other current liabilities Net assets disposed of (II) Gains on disposal of subsidiary Fair value of investment retained Net assets disposed of Non-controlling interests Gain on disposal		Hsinjing
	( ( ( (	$ 10,150 136,687 158,626 55,121 209,384 129,434 8,000 ) 47,904 ) 39,043 ) 22,555) $ 581,900 Hsinjing
	(	$ 167,707 581,900 ) 422,223 $ 8,030

In 2019, the gain on disposal of Hsinjing (formerly known as Tynsolar) of NT$8,030,000 recognized were an unrealized gain (the fair value of the investment retained less the carrying amount). (III) Net cash outflow from disposal of subsidiary

Net cash outflow from disposal of subsidiary
Balance of cash and cash equivalents of the disposal		Hsinjing
	(	$ 10,150)

XXXI. Non-controlling interests and equity transaction

The Group successively disposed of the shares of Hsinjing in the open market from January to June 2019, in a decrease in the ownership to 26.95% as of June 20, 2019 (the date of loss of control). Since the transaction above did not change the control of the Group over the subsidiary, the Group treated it as an equity transaction.

142 -

Jan. 1, 2019 to Jun. 30, 2019

Jan. 1, 2019 to Jun. 30, 2019
Cash consideration (paid) received The portion of the book value of the subsidiary’s net assets that should be reclassified from (reclassified to) the non-controlling interests is calculate based on the relative changes in equity. Difference in equity transaction Equity transaction balance adjustment account Capital surplus - the difference between the equity price and the book value of acquisition or disposal of subsidiary	Hsinjing (formerly known as Tynsolar)
	Not subscribed to in proportion to ownership
	( ( (	$ 2,529 2,839) $ 310) $ 310)

XXXII. Capital risk management

In accordance with the overall business environment and the Group’s future development, the Group’s capital structure is regularly reviewed by the main management personnel in consideration of external competition, changes in the environment, and other factors. The review includes consideration for various types of capital costs and relevant risks to determine an appropriate capital structure of the Group. The purpose is to satisfy the Group’s requirements for working capital, research and development expenses, and dividend expenditures in the future, while ensuring that the Group can continue to operate, give back to shareholders, and take into account the interests of other stakeholders, and maintaining the best capital structure to enhance shareholders’ value on a long term.

The capital structure of the Group consists of net debt (borrowings less cash and cash equivalents) and equity attributable to owners of the Company (comprising share capital, capital surplus, retained earnings, and other equity items), as well as non-controlling interests.

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

Key management personnel of the Group reviews the capital structure annually. As part of this review, the key management personnel considers the cost of capital and the risks associated with each class of capital. Under the suggestions of the key management personnel, the Group may pay dividends, issue new shares, buy back shares, and issue new debts or repay old debts to balance the overall capital structure.

XXXI. Financial instruments

(I) Fair value—financial instruments not at fair value

The carrying amount of the Group’s financial assets and liabilities measured at amortized cost was close to their fair value in the financial statements at the end of the financial reporting period.

(II) Fair value—financial instruments at fair value on a recurring basis
Degree of fair value measurements
143 -

Dec. 31, 2020

	Dec. 31, 2020	Dec. 31, 2020
2.	Level 1 Level 2 Level 3 Total Financial assets at FVTPL Domestic listed stocks $ 522,687 $ - $ - $ 522,687 Foreign unlisted stocks - - 142,166 142,166 Wealth management products - 221,937 - 221,937 Structured deposit - 88 - 88 Gold passbook 15 - - 15 Total $ 522,702 $ 222,025 $ 142,166 $ 886,893 Financial assets at FVTOCI Investment in equity instruments - Domestic listed stocks $ 20,579 $ - $ - $ 20,579 - Stocks listed in emerging stock markets and unlisted stocks - - 41,754 41,754 Total $ 20,579 $ - $ 41,754 $ 62,333 Dec. 31, 2019 Level 1 Level 2 Level 3 Total Financial assets at FVTPL Domestic listed stocks $ 529,570 $ - $ - $ 529,570 Foreign unlisted stocks - - 142,166 142,166 Gold passbook 15 - - 15 Total $ 529,585 $ - $ 142,166 $ 671,751 Financial assets at FVTOCI Investment in equity instruments - Domestic listed stocks $ 21,776 $ - $ - $ 21,776 - Stocks listed in emerging stock markets and unlisted stocks - - 21,129 21,129 Total $ 21,776 $ - $ 21,129 $ 42,905 There were no transfers between Level 1 and Level 2 fair value in 2020 and 2019. Valuation techniques and inputs applied for Level 2 fair value measurement Class of financial instruments Valuation technique and inputs Structured deposits and wealth management products Discounted cash flow method: Discounted at a discount rate that reflects the current interest rate of a financial product at the end of the period.		Total
			$ 522,687 142,166 221,937 88 15 $ 886,893 $ 20,579 41,754 $ 62,333 Total
		Discounted cash flow method: Discounted at a discount rate that reflects the current interest rate of a financial product at the end of the period.

Reconciliation of Level 3 fair value measurements of financial assets 2020

2020
Financial asset Opening balance Recognized in other comprehensive income (unrealized gain (loss) on financial assets at FVTOC) Closing balance	Equity instruments as financial assets at fair value through profit or loss $ 142,166 - $ 142,166	Equity instruments as financial assets at FVTOCI
			$ 21,129 20,625 $ 41,754

144 -

2019

2019
Financial asset Opening balance Disposal Reclassification Recognized in profit or loss (other gains or losses) (Note 7) Recognized in other comprehensive income (unrealized gain (loss) on financial assets at FVTOC) Closing balance	Equity instruments as financial assets at fair value through profit or loss $ 392,890 ( 2,268 ) ( 499,579 ) 251,123 - $ 142,166	Equity instruments as financial assets at FVTOCI
	( (	(	$ 21,759 - - - 630) $ 21,129

Valuation techniques and inputs applied for Level 3 fair value measurement

The fair value of domestic stocks traded on emerging stock markets is estimated based on the closing prices of the stocks in the emerging stock markets and the liquidity. Investments in domestic and foreign unlisted equity are estimated by the market approach based on the transaction price of comparable targets, and the difference between the evaluation target and the comparable target is considered to estimate the value of the target evaluated using an appropriate multiplier.

Dec. 31, 2020 Dec. 31, 2019 Price-book ratio 1.22~13.19 1.40~2.39 Liquidity Discounts 30% 30% (III) Categories of financial instruments Dec. 31, 2020 Dec. 31, 2019 Financial asset Financial assets as at FVTPL Financial assets designated as at FVTPL $ 886,893 $ 671,751 Financial assets at amortized cost (Note 1) 2,172,238 2,262,565 Financial assets at FVTOCI Investment in equity instruments 62,333 42,905

Financial liability At amortized cost (Note 2) 1,994,823 2,276,880

Note 1: The balances include financial assets measured at amortized cost, which comprise cash and cash equivalents, notes receivable, accounts receivable, other receivables, other financial assets, and refundable deposits.

Note 2: The balances included financial liabilities measured at amortized cost, which comprise shortterm borrowings, notes payable, other payables, current portion of long-term borrowings, longterm borrowings, and guarantee deposits received.
(IV) Financial risk management objective and policies

The Group's main financial instruments include equity investment, accounts receivable, accounts payable, borrowings, and lease liabilities. The Group's financial management department provides services to various business units, coordinates the operations in the domestic and international financial markets, and supervises and manages the financial risks related to the Group's operations by analyzing internal risk reports based on the degree and breadth of risks. These risks include market risk (including currency risk, interest rate risk, and other price risks), credit risk, and liquidity risk.

The Group uses derivative financial instruments to avoid risk exposure to mitigate the impact of these risks. The use of derivative financial instruments is regulated by the policies adopted by the Group's board of directors, which are written principles for exchange rate risk, interest rate risk, credit risk, the use of derivative financial instruments and non-derivative financial instruments, and the investment of remaining working capital. Compliance with policies and exposure limits is being reviewed by the

145 -

internal auditors continuously. The Group does not trade financial instruments (including derivative financial instruments) for speculative purposes.

Market risk

The main financial risks for the Group’s operating activities are the risk of changes in foreign currency exchange rates (see (1) below) and the risk of changes in interest rates (see (2) below). The Group engages in various derivative financial instruments to manage foreign currency exchange rate risk and interest rate risk.

The Group's exposure to the market risk of financial instruments and its management and measurement methods for the risk exposure have remained unchanged.

(1) Exchange rate risk

The Group is engaged in sale and purchase transactions denominated in foreign currencies, which has caused the Group to be exposed to the risk of exchange rate fluctuations. Approximately 78.13% of the Group's sales are not denominated in the functional currency, and approximately 61.22% of the cost is not denominated in the functional currency. The Group's management of the exposure to the exchange rate risk is to use foreign currency options to manage risks within the scope permitted by the policy. The carrying amounts of the Group’s foreign currency-denominated monetary assets and monetary liabilities (including those eliminated on consolidation) at the balance sheet date are set out in Note 37.

Sensitivity analysis

The Group was mainly affected by the fluctuations in the exchange rates of USD, JPY, and CNY.

The following table details the Group’s sensitivity analysis when the New Taiwan dollar (functional currency) increases and decreases by 1% against each relevant foreign currency. The sensitivity to a 1% change in New Taiwan dollars is used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis only included monetary items in foreign currencies in circulation, and the year-end translation was adjusted with a 1% change in the exchange rates. The positive numbers in the table below indicate the amount by which the net income before tax will be reduced when the New Taiwan dollar appreciates by 1% against the relevant currencies; when the New Taiwan dollar depreciates by 1% against the relevant foreign currencies, the net income before tax will be the negative number of the same amount.

Impact of USD Impact of JPY Impact of CNY 2020 2019 2020 2019 2020 2019 Gains (losses) $ 12,006(i) $ 10,316(i) ( $ 1,288)(ii) ( $ 1,205)(ii) $ 4,465(iii) $ 4,361(iii)

(i) Mainly derived from the Group's USD-denominated receivables and payables still outstanding at the balance sheet date, against which a cash flow hedge has not been conducted.
(ii) Mainly derived from the Group's JPY-denominated payables still outstanding at the balance sheet date, against which a cash flow hedge has not been conducted.
(iii) Mainly derived from the Group's CNY-denominated receivables and payables still outstanding at the balance sheet date, against which a cash flow hedge has not been conducted.

Sales denominated in USD are seasonal, so the exposure to the foreign currency risk at the balance sheet date cannot reflect the risk exposure throughout the year.

(2) Interest rate risk Because individual entities within the Group borrow funds at fixed and floating interest rates at the same time, the exposure to the interest rate risk arises. The Group manages the interest rate risk by maintaining an appropriate combination of fixed and floating interest rates.

The carrying amounts of the Group’s financial assets and financial liabilities with exposure to the interest rate risk at the balance sheet date are as follows:

Fair value interest rate risk -Financial assets -Financial liabilities Cash flow interest rate risk -Financial assets -Financial liabilities Sensitivity analysis	Dec. 31,2020 $ 619,369 345,318 616,814 1,074,107	Dec. 31,2019
		$ 811,411 581,163 620,239 1,220,069

146 -

The sensitivity analysis below is determined based on the exposure to the interest rate risk of derivative and non-derivative instruments at the balance sheet date. For liabilities with floating interest rates, the analysis method is based on the assumption that the amount of liabilities outstanding at the balance sheet date is in outstanding throughout the reporting period. The sensitivity to a 1% change in interest rate is used when reporting the interest rate risk internally to key management personnel and also represents the management’s assessment of the reasonably possible change in interest rates.

If the interest rate increased/decreased by 1% and all other variables remain unchanged, the Group’s net income before tax for 2020 and 2019 would have decreased/increased by NT$192,000 and NT$253,000, respectively.

(3) Other price risk

The Group's exposure to the equity price risk is due to the investment in the listed equity securities. The management of the Group manages the risk by holding investment portfolios with different risk factors. The Group's equity price risk is mainly concentrated on Taiwan Stock Exchange’s equity instruments in specific industries. Sensitivity analysis

The sensitivity analysis below is based on the equity price risk exposure at the balance sheet date.

If the equity price increased/decreased by 1%, the profit or loss before tax for 2020 and 2019 would have increased/decreased by NT$5,227,000 and NT$5,296,000 due to the increase/decrease in the fair value of financial assets at FVTPL. Other comprehensive income before tax for 2020 and 2019 would have increased/decreased by NT$206,000 and NT$218,000 due to the increase/decrease in the fair value of financial assets at FVTOCI. The Group's sensitivity to the price risk decreased in 2020 because of the decrease in investment in equity securities held.

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. At the balance sheet date, the Group’s maximum exposure to credit risk which will cause a financial loss to the Group due to failure of counterparties to perform an obligation and financial guarantees provided by the Company could arise from:

(1) The carrying amount of the financial assets recognized in the consolidated balance sheet. (2) The amount of contingent liabilities arising from the financial guarantee provided by the Group.

The policy adopted by the Group is to conduct transactions only with reputable counterparties, and obtain sufficient guarantees under necessary circumstances to reduce the risk of financial losses due to defaults. The Group only conducts transactions with companies whose ratings are equal to or higher than the investment grade Such information is provided by independent rating agencies; if such information is not available, the Group will refer to other publicly available financial information and mutual transaction records to rate its major customers. The Group continuously monitors credit risk and the credit rating of its counterparties, and distributes the total transaction amount to customers with qualified credit ratings, and controls the exposure to credit risk through the counterparty credit limits that are reviewed and approved by the financial management department every year.

In order to mitigate the credit risk, the management of the Group assigns a dedicated team responsible for the determination of credit limits, credit approval, and other monitoring procedures to ensure that appropriate actions have been taken in the recovery of overdue receivables. In addition, the Group reviews the recoverable amount of the receivables one by one at the balance sheet date to ensure that the appropriate impairment loss is recognized for uncollectible receivables. In this regard, the management of the Group believes the Group’s credit risk was significantly reduced.

The credit risk on liquid funds and derivatives is not high because the counterparties are banks with high credit ratings assigned by international credit-rating agencies.

The Group's customer base is large and unrelated, so the concentration of credit risk is not high.

Liquidity risk

The Group manages and maintains sufficient cash and cash equivalents to support its operations and mitigate the impact of cash flow fluctuations. The management of the Group monitors the use of the bank financing facilities and ensures compliance with the terms of the borrowing terms.

147 -

Bank borrowings were an important source of liquidity for the Group. As of December 31, 2020 and 2019, for the Group’s unutilized credit facilities, please refer to (2) below for description of financing facilities.

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

The remaining contractual maturity analysis of non-derivative financial liabilities was based on the earliest date at which the Group might be required to repay and was compiled based on the undiscounted cash flows of financial liabilities (including principal and estimated interest). Therefore, the bank borrowings with a repayment on demand clause were included in the earliest time period, regardless of the probability of exercise of the right by banks. The maturity analysis of other non-derivative financial liabilities was compiled in accordance with the agreed repayment date.

Dec. 31, 2020

Dec. 31, 2020
Non-derivative financial liabilities Non-interest-bearing liabilities Note payable and accounts payable Other payables (Note) Floating interest rate instruments Fixed interest rate instruments lease liabilities	Less than 1 year $ 353,050 73,847 338,707 345,318 44,993 $ 1,155,915		Over 1 year
			$ - - 735,400 - 127,529 $ 862,929

Further information on the analysis of lease liabilities maturity dates is as follows: (Undiscounted total amount)

1-5Years	1-5Years		10-15Years	15-20Years	15-20Years
$ 27,403 Less $ $		$ 16,193 than 1 year	$ 16,193	$

	$	292,344 51,781 445,907 581,163 46,841 1,418,036			$ - - 774,162 - 137,915 $ 912,077
	$

Further information on the analysis of lease liabilities maturity dates is as follows: (Undiscounted total amount)

Less than OneYear 1-5Years 5-10Years10-15Years15-20Years Over 20 Years lease liabilities $ 46,841 $ 35,129 $ 16,102 $ 16,102 $ 16,102 $ 54,480 Note: The other payables mentioned above do not include salaries, employee compensation payable, directors' remuneration payable, and pensions payable.		Less than OneYear		1-5Years		5-10Years	10-15Years	15-20Years		Over 20 Years

148 -
(2) Financing facilities

Financing facilities
Unsecured bank borrowings facility (review every year) - Amount used - Amount unused Secured bank borrowings facility - Amount used - Amount unused		Dec. 31, 2020 $ 101,959 1,100,441 $ 1,202,400 $ 1,317,466 1,437,464 $ 2,754,930		Dec. 31, 2019
				$ 413,277 821,737 $ 1,235,014 $ 1,387,955 1,115,545 $ 2,503,500

XXXIV. Related party transaction

Balances and transactions between the Company and its subsidiaries have all been eliminated on consolidation and are not disclosed in this note. The transactions between the Group and other related parties are as follows.

(I) Related party name and category

Related Party Name Related Party Category Uni Top Optical Corporation Associate by investment using the equity method Hsinjing Holding Co. Ltd. (Hsinjing) Associate by investment using the equity method Tynsolar Corporation (Tynsolar) Subsidiary of Hsinjing (Note 1) Dingyu Solar Co., Ltd. (Dingyu) Subsidiary of Hsinjing (Note 1) Suncruise Tech Co., Ltd. (Suncruise Tech) Subsidiary of Hsinjing (Note 1) Xu Guang Optoelectronics Co., Ltd.(Xu Guang) Sub-subsidiary of Hsinjing (Note 1) Summit-tech Resource Corp. (Summit-tech) Substantive related party Megacrystal Co. Ltd. (Megacrystal) Substantive related party (Note 2) Li Zhan Optoelectronics Co., Ltd.(Li Zhan) Substantive related party (Note 2) Hsinking Construction Co., Ltd. (Hsinking Construction) Substantive related party (Note 2) Hsinking Engergy Co., Ltd. (Hsinking Energy) Substantive related party (Note 2) Hsinking Co., Ltd. (Hsinking) Substantive related party (Note 2) Bosco Foo Substantive related party San-Te Tzu Substantive related party Raymond Sheu Substantive related party Wen-Hu Wang Substantive related party Note 1: The Group judged that it has had no substantive ability to dominate relevant activities of Hsinjing since June 20, 2019, and therefore it lost control over Hsinjing, making Hsinjing no longer an entity included in the consolidated financial statements, and Hsinjing was terminated from included in the consolidated statements on the date of disposal. Therefore, the subsidiaries and sub-subsidiaries of Hsinjing are listed as related parties of an associate. Note 2: The Group judged that it has had no substantive ability to dominate relevant activities of Hsinjing Since June 20, 2019, and therefore it lost control over Hsinjing, making Hsinjing no longer an entity included in the consolidated financial statements, and Hsinjing was terminated from included in the consolidated statements on the date of disposal, and the balance of relevant assets/liabilities of its relevant subsidiaries will no longer be disclosed as of December 31, 2019.

(II) Operating income

31, 2019. Operating income
Line Item Sale	Category of related party/Name Substantive related party Associate		2020 $ 10,743 2 $ 10,745		2019
					$ 45,227 1,085 $ 46,312

The selling prices to related parties are equivalent to those to ordinary customers, and the payment terms are implemented in accordance with the Group's payment policy.

149 -

(III) Purchase of goods

Purchase of goods
Line Item Inventories - raw materials Inventories - power plant in construction	Category of related party/Name Substantive related party Substantive related party		2020 $ 7,663 - $ 7,663		2019
					$ 5,229 31,257 $ 36,486

The selling prices to related parties are equivalent to those to ordinary customers, and the payment terms are implemented in accordance with the Group's payment policy.

(IV) Receivables from related parties (excluding loans to related parties)

Line Item Accounts receivable - related parties	Category of related party/Name Substantive related party Associate		Dec. 31, 2020 $ 900 3 $ 903		Dec. 31, 2019
					$ - - $ -

The Group's selling prices to related parties are equivalent to those to ordinary customers, and the payment terms are implemented in accordance with the Group's payment policy. No guarantee is received for the accounts receivable from related parties still outstanding. No loss allowance was provided for accounts receivable from related parties in 2020 and 2019.

(V) Payables to related parties (excluding loans from related parties)

Line Item Notes and accounts payable - related parties Other receivables - related parties	Category of related party/Name Substantive related party Substantive related party		Dec. 31, 2020 $ 755 $ 1,052		Dec. 31, 2019
					$ 839 $ 848

The Group's purchase price from and processing contracted to related parties are handled in accordance with the general purchase terms; the payment period to related parties and non-related parties is implemented in accordance with the Company's payment policy.

No guarantee is provided for the balance of the outstanding accounts payable to related parties. (VI) Other income

Line Item Category of related party/Name Dec. 31, 2020 Dec. 31, 2019 Rent income[Associate][$ ] -[$ ] 126

The rent between the Group and its related parties is calculated based on the local rent level and collected in one lump sum.

(VII) Acquisition of property, plant, and equipment

Category of related party Associate		Price of acquisition	Price of acquisition
		2020 $ 9,537		2019
				$ -

(VIII) Contract processing

The processing fees to the Group's substantive related parties contracted to process products for the Company in 2020 and 2019 were NT$10,404,000 and NT$7,794,000, respectively. As of December 31, 2020 and 2019, the outstanding balance was NT$1,052,000 and NT$848,000, respectively, accounted for under the processing expense payable.

The pricing of the contract processing expenses is not able to be compared with other manufacturers' OEM prices and conditions because the Company did not commission other manufacturers for contract processing.

(IX) The joint guarantor of the Group’s borrowings and actual amount used is as follows:

(X)	Category of related party Key management personnel Compensation of key management personnel Short-term employee benefits Post-employment benefits		2020 $ 61,426 2020 $ 40,292 650 $ 40,942		2019
					$ 84,756 2019
					$ 30,405 702 $ 31,107

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

150 -

XXXV. Pledged Assets

The following assets have been provided as collateral for financing loans and security for tariff of imported raw materials:

Restricted time deposits (accounted for in financial assets at amortized cost) Restricted demand deposits (accounted for in financial assets) Land (including investment property) Buildings (including investment property)		Dec. 31, 2020 $ 565,498 16,262 216,119 611,529 $ 1,409,408		Dec. 31, 2019
				$ 637,295 20,013 216,119 658,715 $ 1,532,142

Significant Contingent Liabilities and Unrecognized Commitments

Except for those already mentioned in other notes, the Group's significant commitments as of the balance sheet date are as follows:

(I) As of December 31, 2020 and 2019, the balance of unused letters of credit issued by the Group for imported raw materials and machinery and equipment was equivalent to NT$17,849,000 and NT$25,736,000, respectively.
(II) As of December 31, 2020, the total price of the uncompleted important equipment and engineering procurement contracts of the Group was equivalent to NT$91,656,000; NT$39,699,000 had been paid, which was recognized in prepayments for equipment, and the remaining NT$51,957,000 had not been paid.

XXXVII. Significant assets and liabilities denominated in foreign currencies

The following information was aggregated by the foreign currencies other than functional currencies of the Group and the exchange rates between foreign currencies and respective functional currencies were disclosed. The significant assets and liabilities denominated in foreign currencies were as follows: Dec. 31, 2020

Dec. 31, 2020
Foreign currency asset Monetary items USD CNY JPY Foreign currency liabilities Monetary items JPY USD CNY Dec. 31, 2019 Foreign currency asset Monetary items USD JPY CNY Foreign currency liabilities Monetary items USD JPY CNY	Foreign currency $ 43,374 104,419 3,413 469,577 1,218 2,415 Foreign currency $ 38,663 3,318 103,704 4,254 439,794 2,411	Exchange rate 28.48 4.38 0.28 0.28 28.48 4.38 Exchange rate 29.98 0.28 4.31 29.98 0.28 4.31	Carrying amount
			$ 1,235,291 457,042 943 129,744 34,688 10,570 Carrying amount
			$ 1,159,116 916 446,445 127,535 121,383 10,379

151 -

The amount of foreign currency exchange losses of the Group in 2020 and 2019 was NT$(36,006,000) and NT$(28,460,000), respectively. Due to the wide variety of foreign currency transactions and the functional currencies of the entities of the Group, it is impossible to disclose the foreign currency exchange gains and losses based on each foreign currency of significance.

XXXVIII Additional Disclosures

(I) Information on significant transactions and (II) investees:
Financing provided to others. (Table 1)
Endorsements/guarantees provided. (Table 2)
Marketable securities held (excluding investment in subsidiaries, associates, and joint venture equity): Table 3
Marketable securities acquired or sold at costs or prices at least NT$300 million or 20% of the paid-in capital: None.
Acquisition of individual property at costs of at least NT$300 million or 20% of the paid-in capital: None.
Disposal of individual property at costs of at least NT$300 million or 20% of the paid-in capital: None.
Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital: None.
Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital: None.
Trading in derivative instruments: None.
Significant transactions between the parent company and its subsidiaries: Table 7.
Information on investees: Table 4.
(III) Information on investments in mainland China:
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 5.
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 6.
- (1) The amount and percentage of purchase.
- (2) The amount and percentage of sales.
(IV) Information on major shareholders: List of all shareholders with ownership of 5 percent or greater showing the names and the number of shares and percentage of ownership held by each shareholder: None.

XXXIX Segments Information

Information reported to the chief operating decision-maker for resource allocation and segment performance assessment focuses on types of goods or services delivered or provided. The Group’s segments to be reported are as follows:

LED Operation Center
Si Component Operation Center
Solar Power Operation Center
(I) Segment revenues and results
152 -

The following was an analysis of the Group’s revenue and results by the reporting department:

LED Operation Center Si Component Operation Center Solar Power Operation Center Others Total revenue of continuing operations Share of losses on associates using the equity method Losses on disposal of property, plant and equipment Gains on disposal of investments accounted for using equity method Net foreign exchange gains (losses) Net gains on financial assets and liabilities at FVTPL Financial costs Financial costs Dividend revenue Other (losses) income Net income before tax		Segment	Rev	enue 2019 $ 1,232,034 1,039,621 221,477 26,723 $ 2,519,855		segment profit	segment profit	or loss
		2020				2020 $ 37,075 ) 35,200 - 10,203 8,328 12,387 ) 14,110 17,475 36,006 ) 209,493 24,163 ) 174,980 18,385 6,226) $ 363,989		2019
		$ 1,159,604 1,252,030 - 16,982 $ 2,248,616			( ( ( ( (		( ( ( ( ( (	$ 27,052 ) 28,648 ) 19,023 8,325 28,352 ) 25,352 ) 41 - 28,460 ) 250,310 26,078 ) - 19,144 70,278 $ 231,531

The segment revenue above is all generated from transactions with external customers. There were sales between segments in 2020 and 2019.

Segment gains refer to the profits earned by each segment, excluding the headquarters’

administrative costs and directors’ remuneration to be allocated, share of profits and losses on associates using the equity method, gains or losses on disposal of investment using the equity method, net (gains) losses on foreign currency exchange, rental income, gains and losses on disposal of property, plant and equipment, gains and losses on valuation of financial instruments, financial costs, penalty losses, fire losses, disaster loss claim income, and income tax expenses. This is the measure reported to the chief operating decision-maker for resource allocation and assessment of segment performance. (II) Segment assets and liabilities Since the measured amount of assets and liabilities has not been provided to the operating decision makers, the undisclosed measured amount of assets and liabilities is zero.

(III) Income from main products and services

The income analysis of the main products and services of the Group is as follows:

LED SI components Solar power modules Power plant Solar photovoltaic power Others		2020 $ 1,159,604 1,252,030 - - - 16,982 $ 2,428,616		2019
				$ 1,232,034 1,039,622 19,867 187,392 14,217 26,723 $ 2,519,855

(IV) Segment by geographical location

The Group mainly operates in two regions: Taiwan and China.

The information on the Group’s revenue of continuing operations from external customers based on operating location and non-current assets based on asset location is listed below:

Taiwan China		Revenue from external customers 2020 2019 $ 2,428,616 $ 2,519,855 - - $ 2428616 $ 2519855	Revenue from external customers 2020 2019 $ 2,428,616 $ 2,519,855 - - $ 2428616 $ 2519855		non-curre	nt	assets
		2020			Dec. 31, 2020 $ 1,941,346 152,071 $ 2,093,417		Dec. 31, 2019
		$ 2,428,616 - $ 2428616					$ 3,008,238 221,861 $ 3,230,099

Non-current assets do not include financial instruments, investments using the equity method, guarantee deposits paid, and deferred income tax assets.

(V) Information on major customers Single customers contributing at least 10% of the Group's total income are as follows:

Customer A Customer B Customer C (Note)	2020 $ 411,112 261,307 218,817	2019
		$ 154,090 213,766 297,268

Customer did not contribute at least 10% of the Group's total revenue in 2020.

153 -

TYNTEK Corporation and Its Subsidiaries Financing provided to others For the Year Ended December 31, 2020

Table 1

Unit: NTD thousands

Serial No.	Lender	Borrower	Financial Statement Account	Related Party Status	Maximum Balance for the Period	Ending balance	Transaction Amounts	Interest Rate Range (Note 3)	Category of Financing Provided	Business Transaction Amounts	Reasons for Necessity of Short- term Financing	Loss Allowance	Collateral	Collateral	Limit of Financing to Individual Borrower(Note1)	Total Limit of Financing Provided (Note2)	Remarks
													Name	Value
0	TYNTEK Corporation	Keeper Technology	Other receivables - related parties	Yes	$ 20,000	$ 10,000	$ 8,000	Floating interest rate	Need for short- term financing	$ -	Working capital	$ -	－	$ -	$ 390,888	$ 781,776

Note 1: TYNTEK Corporation's limit of financing to individual borrowers does not exceed 10% of the net value stated in the most recent financial statements reviewed/audited by CPAs.

Note 2: TYNTEK Corporation's total limit of financing to borrowers does not exceed 20% of the net value stated in the most recent financial statements reviewed/audited by CPAs. Note 3: TYNTEK Corporation's interest rate ranges of financing to others are based on the borrowing interest rate of financial institutions plus 5%. The interest rate as of December 31, 2020, was 2.30%.

TYNTEK Corporation and Its Subsidiaries Endorsement/guarantee provided For the Year Ended December 31, 2020

Table 2										Unit: In Thousands of New Taiwan Dollars/Foreign Currencies	Unit: In Thousands of New Taiwan Dollars/Foreign Currencies	Unit: In Thousands of New Taiwan Dollars/Foreign Currencies	Unit: In Thousands of New Taiwan Dollars/Foreign Currencies	Unit: In Thousands of New Taiwan Dollars/Foreign Currencies
Number (Note 1)	Company Name	Guaranteed Party		Maximum Endorsement/Guarant ee Amount to single entity (Note 3)	Maximum Endorsement/Guarant ee Balance during the Period (Note 4)	Endorsement/Guarant ee Balance at the End of Year (Note 5)	Transaction Amounts (Note 6)	Endorsement Amount with Assets Pledged	Ratio of Accumulated Endorsement/Guara ntee to Net Value of the Latest Financial Statements (%)	Maximum Endorsement/Guarant ee Amount	Endorsement /Guarantee form Parent to Subsidiary (Note 7)	Endorsement /Guarantee form Subsidiary to Parent (Note 7)	Endorsement /Guarantee to Entity in Mainland China (Note 7)	Remarks
		Company name	Relation (Note 2)
0	TYNTEK Corporation	Yuanmao Opto-electronic Technology (Wuhan) Co., Ltd. Keeper Technology	2 2	$ 781,776 781,776	$ 99,680 (US$ 3,500,000) 20,000	$ - -	$ - -	$ - -	- -	$ 1,954,439 1,954,439	Y Y	N N	Y N	Note 3 Note 3

Note 1: The description of the code column is as follows: (1) The Company is coded “0”.

(2) The investees are coded sequentially beginning from “1” by each individual company.

Note 2: There are 7 types of relationships between the endorser/guarantor and the endorsed/guaranteed party as follows, just indicate the type:

(1) Companies with business dealings.

(2) A company in which the Company directly or indirectly holds more than 50% of the voting shares.

(3) A company directly or indirectly holds more than 50% of the voting shares of the Company.

(4) A company in which the Company directly or indirectly holds more than 90% of the voting shares.

(5) Companies that need to purchase insurance for each other in the same industry or as co-builders in accordance with contractual provisions based on the needs for contracting construction projects.

(6) A company that is endorsed and guaranteed by all shareholders of the Company based on their ownership percentage due to a joint investment relationship.

(7) The companies that are engaged in joint and several guarantees for the performance of a pre-sale property contract in accordance with the Consumer Protection Act.

Note 3: The limit of the endorsement/guarantee for a single enterprise shall not exceed 20% of the net value of the most recent financial statements reviewed/audited by the CPAs; the maximum limit of the endorsement/guarantee shall not exceed 50% of the net value of the most recent financial statements checked/audited by the CPAs.

Note 4: The maximum balance of the endorsement/guarantee provided to others in the current year.

Note 5: The amount approved by the board of directors shall be entered. However, it refers to the amount approved by the Chairman if the board of directors authorizes the Chairman to make a decision in accordance with Subparagraph 8, Article 12 of the Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies.

Note 6: The actual drawdown amount by the endorsed/guaranteed company within the range of the endorsement/guarantee balance shall be entered.

Note 7: “Y” shall only be entered for those that belong to endorsement/guarantee from publicly listed parent company to subsidiary, from subsidiary to publicly listed parent company, or to entity in mainland China.

154 -

TYNTEK Corporation and Its Subsidiaries

Marketable Securities Held at the End of Year

Table 3

Unit: In Thousands of New Taiwan Dollars/Thousand Units/Thousand Shares

Dec. 31, 2020

Holding Company Name	Type and Name of Marketable Securities	Relationship with the Holding Company	Financial Statement Account		March 31,2020	March 31,2020		Remarks
				Number of Shares/Units	Carrying amount	Percentage of Ownership	Market price
TYNTEK Corporation Long Benefit Investment Co., Ltd. TEK Holdings Co., Ltd. Yuanmao Opto- electronic Technology (Wuhan) Co., Ltd.	Unity Opto/stock/common stock First Commercial Bank/gold passbook Para Light Electronics Co., Ltd./stock/common stock Fittech Co., Ltd./stock/common stock Fujian Zhaoyuan Photoelectric Co., Ltd. Unity Opto/stock/common stock Para Light Electronics Co., Ltd./stock/common stock Chipwell Tech Corporation/stock/common stock Brightek Optoelectronic Co., Ltd./stock/common stock Para Light Electronics Co., Ltd./stock/common stock Hanpin Electron Co., Ltd./stock/common stock Elite Advanced Laser Corporation/stock/common stock ITEQ Corporation/stock/common stock Fittech Co., Ltd./stock/common stock TAI-TECH Advanced Electronics Co., Ltd./stock/common stock Lite-On Technology Corp./stock/common stock Para Light Electronics Co., Ltd./stock/common stock Chipwell Tech Corporation/stock/common stock Chipstar Tech Corporation/stock/common stock First Commercial Bank/structured deposit Industrial Bank/wealth management products	None None None Investee with 1.91% of shares held Investee with 4.28% of shares held None None Investee with 2.20% of shares held Investee with 1.68% of shares held None None None None Investee with 2.48% of shares held None None None Investee with 0.63% of shares held Investee with 10.95% of shares held None None	Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Non- current Financial assets at FVTOCI - current Financial assets at FVTOCI - current Financial assets at FVTOCI - non- current Financial assets at FVTOCI - non- current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTOCI - current Financial assets at FVTOCI - non- current Financial assets at FVTOCI - non- current Financial assets at FVTPL - Current Financial assets at FVTPL - Non- current	264 - 1 1,284 - 836 622 330 1,020 1,194 220 70 11 1,667 23 30 1,275 94 698 - -	$ - 15 15 214,381 142,166 - 6,750 6,580 26,286 12,950 6,853 4,879 1,489 278,389 2,237 1,494 13,829 2,789 6,099 88 221,937	- - - 1.91 4.28 - - 2.2 1.68 - - - - 2.48 - - - 0.63 10.95 - -	$ - 15 15 214,381 142,166 - 6,750 6,580 26,286 12,950 6,853 4,879 1,489 278,389 2,237 1,494 13,829 2,789 6,099 88 221,937	Note 1 Note 1
Note 1: Because the public company Unity Opto Technology co., Ltd. (hereinafter referred to as Unity Opto) failed to publish its financial statements for 2019 within the specified time limit, it was sanctioned by the Taiwan Stock April 1, 2020, and it stock was stopped to be traded starting from April 7, 2020. After prudent evaluation, the Group recognized all shares of Unity Opto held as financial asset valuation losses. Note 2: Refer to Table 4 for the information on subsidiaries and associates.								Exchange on

155 -

TYNTEK Corporation and Its Subsidiaries

Information on Investees

For the Year Ended December 31, 2020

Table 4

Unit: In Thousands of New Taiwan Dollars/Thousand Shares

Investor	Investor Company	Location	Main Businesses and Products	Investment Amount	Investment Amount	As of March 31, 2020	As of March 31, 2020	As of March 31, 2020	Gain (loss) on the invested companies	Gains (losses) on investment recognized by the Company	Remarks
				March 31, 2020	March 31, 2019	Shares	Percentage (%)	Carrying amount
TYNTEK Corporation TYNTEK Corporation TYNTEK Corporation TYNTEK Corporation TYNTEK Corporation TYNTEK Corporation TEK Holding Co., Ltd. Keyway International L.L.C. Long Benefit Investment Co., Ltd. Long Benefit Investment Co., Ltd. Long Benefit Investment Co., Ltd. Long Benefit Investment Co., Ltd.	TEK Holding Co., Ltd. Long Benefit Investment Co., Ltd. Hsinjing Holding Co., Ltd. Coretech Optical Co., Ltd. Keeper Technology Xu Qi Co., Ltd. Keyway International L.L.C. Yuanmao Opto-electronic Technology (Wuhan) Co., Ltd. Coretech Optical Co., Ltd. Keeper Technology Hsinjing Holding Co., Ltd. BLACKSTONE GREEN ENERGY SDN. BHD	Jipfa Building, 3rd Floor 142 Main Street, Road Town, Tortola, British Virgin Islands No. 15, Kezhong Road, Zhunan Township, Miaoli County 3F-1, No. 193, Fuxing 2nd Road, Zhubei City, Hsinchu County 7F-6, No. 35, Xintai Road, Zhubei City, Hsinchu County No. 29, Wuquan 7th Road, Wugu Industrial Park, Wugu District, New Taipei City No. 1387, Renai Road, Zhunan Township, Miaoli County 3500 South Dupont Highway, Dover, Delaware 19901,U.S.A. No. 17, Binhu Road, Donghu New Technology Development Zone, Wuhan 7F-6, No. 35, Xintai Road, Zhubei City, Hsinchu County No. 29, Wuquan 7th Road, Wugu Industrial Park, Wugu District, New Taipei City 3F-1, No. 193, Fuxing 2nd Road, Zhubei City, Hsinchu County 1, Lorong Jermal Indah, Taman Jermal Indah, 12300, Butterworth, Penang, Malaysia	Investment in various overseas businesses General investment General investment Machinery, electronic components, power generation, transmission, and distribution machinery, as well as precision equipment manufacturing Mechanical installation, retail and wholesale of electronic materials, automobile and scooter parts and accessories, traffic sign equipment and other machinery, as well as manufacturing of lighting equipment and other machinery. Manufacturing of lighting equipment Investment in various overseas businesses Other light-emitting diode production and sales business Machinery, electronic components, power generation, transmission, and distribution machinery, as well as precision equipment manufacturing Mechanical installation, retail and wholesale of electronic materials, automobile and scooter parts and accessories, traffic sign equipment and other machinery, as well as manufacturing of lighting equipment and other machinery. General investment Renewable energy	$ 475,208 185,000 591,218 5,000 30,000 8,500 475,686 475,208 25,228 48,977 - 33,765	$ 475,208 185,000 594,072 5,000 30,000 8,500 475,686 475,208 25,228 48,977 37,370 5,062	14,500 29,702 17,794 200 3,000 850 - - 2,000 5,711 - -	100.00 100.00 22.79 2.08 21.43 94.44 100.00 100.00 20.81 40.79 - 47.24	$ 468,162 417,967 122,583 1,781 21,040 3,232 465,283 465,266 17,816 40,049 - 27	$ 166,105 94,786 8,315 24,022 9,006 1 166,194 166,195 24,022 9,006 - ( 37,024 )	$ 166,105 94,786 1,165 500 1,930 1 166,194 166,195 4,999 3,674 - ( 17,767 )	Note 1 Notes 1 and 2

(To be Continued)

156 -

(Continued)

Investor	Investor Company	Location	Main Businesses and Products	Investment Amount	Investment Amount	As	of March 31, 2020	of March 31, 2020	Gain (loss) on the invested companies	Gains (losses) on investment recognized by the Company	Remarks
				March 31, 2020	March 31, 2019	Shares	Percentage (%)	Carrying amount
Long Benefit Investment Co., Ltd. Long Benefit Investment Co., Ltd. Long Benefit Investment Co., Ltd. Keeper Technology Global Unity Int’l Co., Ltd. Creation New Technology Inc.	Heng Huei Energy Consulting Co., Ltd. Uni Top Optical Corporation Shih Kwang Lighting & Electric Co., Ltd. Global Unity Int’l Co., Ltd. Creation New Technology Inc. Kaishin Technology (Wuhan) Corporation	3F, No. 41, Lane 57, Dachang Road, Pingzhen District, Taoyuan City 11F, No. 6, Jiankang Road, Zhonghe District, New Taipei City 3F-1, No. 193, Fuxing 2nd Road, Zhubei City, Hsinchu County Level 3, Alexander House, 35 Cybercity, Ebene, Mauritius Vistra Corporate Services Centre, Ground Floor NPF Building, Beach Road. Apia Samoa No. 17, Binhu Road, Donghu New Technology Development Zone, Wuhan, Hubei Province	Self-usage power generation equipment utilizing renewable energy industry Optical instrument and general instrument manufacturing Self-usage power generation equipment utilizing renewable energy industry Investment in various overseas businesses Investment in various overseas businesses R&D and manufacturing of LED lighting equipment products, electronic component manufacturing, automobile parts manufacturing, as well as electrical appliances and audiovisual electronic products manufacturing	$ 5,000 5,000 2,450 32,376 32,376 32,376	$ 5,000 - - 32,376 32,376 32,376	500 500 245 1,000 1,000 -	14.29 25.00 49.00 100.00 100.00 100.00	$ 5,057 3,420 2,431 9,346 9,346 9,346	$ 367 ( 6,319 ) ( 263 ) ( 220 ) ( 220 ) ( 220 )	$ 57 ( 1,580 ) ( 10 ) ( 220 ) ( 220 ) ( 220 )

Note 1: On February 27, 2020, Tynsolar’s board of directors passed a resolution to suspend the trading of stocks on Taipei Exchange, and established Hsinjing by means of share swap. The Group has swapped all Tynsolar’s shares for Hsinjing’s ones, with the ownership percentage remaining unchanged. The Group continued to dispose of Hsinjing’s shares in 2020, resulting in a decrease in the ownership from 22.90% to 22.79%.

Note 2:

Long Benefit had sold all the shares of Hsinjing before January 17, 2020.

157 -

Information on investments in mainland China

Unit: Unless otherwise indicated, In Thousands of New Taiwan Dollars

TYNTEK Corporation and Its Subsidiaries

For the Year Ended December 31, 2020

Table 5

I. Information on investments in mainland China:

(I) 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, gains or losses on investment, carrying amount of the investment, and repatriations of investment income:

income:
Name of Investee	Main Businesses and Products	Paid-in Capital	Method of Investments	Accumulated Investment Amount from Taiwan at Beginning of Period	InvestmentFlows		Accumulated Investment Amount from Taiwan at End of Period	% Ownership of Direct or Indirect Investment	Gains (losses) on Investment	Carrying Amount of Investments at End of Period	The Repatriated Proceeds of Investments as of This Period
					Outward	Inward
Yuanmao Opto-electronic Technology (Wuhan) Co., Ltd. Fujian Zhaoyuan Photoelectric Co., Ltd. Kaishin Technology (Wuhan) Corporation	Other light-emitting diode production and sales business Other light-emitting diode production and sales business R&D and manufacturing of LED lighting equipment products, electronic parts manufacturing, automobile parts manufacturing, as well as electrical appliances and audiovisual electronic productsmanufacturing	$ 475,208 (US $14,500,000) ) 6,692,823 (CNY $1,437,000,000) ) 32,376 (US $1,000,000 )	Investment in China via a company set up in a third region Direct investment in companies in China Investment in China via a company set up in a third region	$ 475,208 ( US$ $14,500,000) ) 468,523 ( US$ 8,565,000 and CNY 45,890,000 thousand) 32,376 ( US$ $1,000,000 )	$ - - -	$ - - -	$ 475,208 ( US$ $14,500,000) ) 468,523 ( US$ 8,565,000 and CNY 45,890,000) 32,376 ( US$ $1,000,000 )	100% 4.28% (Note) 62.22%	$ 166,195 - ( 137 )	$ 465,266 142,166 5,815	$ - - -

Note: The Group failed to subscribe to shares arising from capital increase in the proportion of the ownership and disposed of a portion of its investment equity in the company in June 2018, and thus lost significant influence. Therefore, it was reclassified as financial assets measured at FVTPL. (II) Limit on investment amount in mainland China:

Aggregated amount remitted for investment in Mainland China

Aggregated amount remitted for investment in Mainland China Approved amount of investment by The limit of investment in Mainland China from Taiwan at the end of the period Investment Commission, MOEA stipulated by Investment Commission, MOEA $959,242 $959,288 $2,345,327 (US$23,549,000 and CNY 45,890,000) (US$30,842,000)

158 -

TYNTEK Corporation and Its Subsidiaries

Significant Transactions with Investee Companies in Mainland China, Either Directly or Indirectly Through a Third Party, and Their Prices, Payment Terms, Unrealized Gains Or Losses, and Relevant Information For the Year Ended December 31, 2020

Table 6

Unit: Unless otherwise indicated, In Thousands of New Taiwan Dollars

Name of Investee	Transaction Type	Amount		Transaction Terms		Accounts Receivable (Payable)	Accounts Receivable (Payable)	Unrealized Gains or Losses
			Price	Payment Term	Comparison with General Transaction	Balance	Percentage
Yuanmao Opto-electronic Technology (Wuhan) Co., Ltd.	Contract processing	$ 112,030 (Processing expense)	By negotiation	T/T	O/A with net 120 days	Processing expense payable $ 11,184	5.42%	$ -

TYNTEK Corporation and Its Subsidiaries Significant Transactions Between the Parent Company and Its Subsidiaries For the Year Ended December 31, 2020

Table 7

Unit: NTD thousands

Serial No. (Note 1)	Transaction Company	Counterparty	Relationship with Counterparty (Note 2)	Transaction	Transaction	Transaction	Transaction
				Account	Amount (Note 4)	Transaction Terms	Percentage in Consolidated Total Revenue or Total Assets (Note 3)
0	TYNTEK Corporation	Yuanmao Opto-electronic Technology (Wuhan) Co., Ltd. Long Benefit Investment Co., Ltd. Keeper Technology	1 1 1	Processing expense Expenses payable Sale Trade receivable Other income Rent income Other receivables Interest income	$ 112,030 11,184 6,411 260 16 34 8,016 178	The Company's selling prices to related parties are equivalent to those to general customers Same as general payment terms The Company's selling prices to related parties are equivalent to those to general customers Same as general payment collection terms －－－－	4.61% 0.18% 0.26% - - - 0.13% -

Note 1: The types of business transactions are indicated by the following numbers shown in the No. column:

0 - ITEQ (parent company).
The subsidiaries are coded sequentially beginning from “1” by each individual company.

Note 2: The transaction relationships are as follows. Please indicate the type:

1 Parent to subsidiary

2 Subsidiary to parent

3 Subsidiary to subsidiary

Note 3: For the calculation of the ratio of the transaction amount to the consolidated total revenue or total assets, if it is an asset-liability account, it is calculated based on the ending balance as a percentage of the consolidated total assets; if it is a profit-loss account, it is calculated based on the accumulated amount throughout the year as a percentage of the consolidated total revenue.

Note 4: The transactions between the parent and subsidiaries have been eliminated when the consolidated financial statements are prepared.

159 -

V. Latest audited standalone financial statements

Independent Auditors’ Review Report

To TYNTEK Corporation,

Audit opinion

We have reviewed the standalone balance sheet of TYNTEK Corporation (the “Company”) for the years ended December 31, 2020 and 2019 and the related standalone statements of comprehensive income, changes in equity and cash flows for the years then ended, and relevant notes, including a summary of significant accounting policies “(collectively referred to as the standalone financial statements)”.

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

Basis for audit opinion

We conducted our audits in accordance with the Regulations Governing the Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China for 2020. Our responsibility under those standards is further described in the section of "Auditor's Responsibilities for the Audit of the Parent-only Financial Statements". We are independent of the Company in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We are convinced that we have acquired enough and appropriate audit evidence to serve as the basis of audit opinion.

Key audit matters

Key audit matters refer to the most vital matters in our audit of the standalone financial statements of the Company for the year ended December 31, 20 2020 based on our professional judgment. These matters were addressed in our audit of the parent-only financial statements as a whole, and in forming our audit opinion. We do not express a separate opinion on these matters.

Key audit matters of the standalone financial statements of the Company for the year ended December 31, 2020 are stated as follows

Revenue recognition

Due to some sales customers’ needs, the Company places inventory in the domestic and overseas warehouses or overseas shipping warehouses designated by the sales customers. The recognition of sales revenue is based on the receipt details provided by the customers’ designated warehouse custodians, which were checked by the dedicated personnel of the Company. As domestic and overseas warehouses and overseas shipping warehouses are not directly managed by the Company, we listed the authenticity of the sales related to the domestic and overseas warehouses and overseas shipping warehouses a key audit matter for this year. For the accounting policies and information disclosed related to revenue recognition, please refer to Notes 4 and 25 to the parent-only financial statements.

The main audit procedures that we have implemented include:

160 -
Understand and test the effectiveness of the main internal control design and implementation related to the sales revenue of domestic and overseas warehouses and overseas shipping warehouses.
Select samples randomly to check the receipts and payment status related to the sales revenue of domestic and overseas warehouses and overseas shipping warehouses, and inquire the existence of the transaction counterparties to verify the actual occurrence of the sales, and check whether there is any anomaly existing in the sales counterparties and the payment recipients.

Responsibilities of the management and the governing body for the parent-only financial statements

The responsibilities of the management are to prepare the parent-only financial statements with fair presentation in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and to maintain necessary internal control associated with the preparation in order to ensure that the financial statements are free from material misstatement arising from fraud or error.

In preparing the standalone financial statements, the management is responsible for assessing the ability of the Company in continuing as a going concern, disclosing relevant matters, and adopting the going concern basis of accounting unless the management intends to liquidate the Company or cease the operations without other viable alternatives.

The governing body of the Company (including the Audit Committee) is responsible for supervising the financial reporting process.

Auditor's responsibilities for the audit of the parent-only financial statements

Our objectives are to obtain reasonable assurance on whether the parent-only financial statements as a whole are free from material misstatement arising from fraud or error, and to issue an independent auditors' report. Reasonable assurance is a high-level assurance but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatement may arise from frauds or errors. If the amounts of misstatements, either separately or in aggregate, could reasonably be expected to influence the economic decisions of the users of the parent-only financial statements, they are considered material.

Identify and assess the risks of material misstatement arising from fraud or error within the parent-only financial statements; design and execute countermeasures in response to said risks, and obtain sufficient and appropriate audit evidence to provide a basis of our opinion. Fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Therefore, the risk of not detecting a material misstatement resulting from fraud is higher than the one resulting from error.
Understand the internal control related to the audit in order to design appropriate audit procedures under the circumstances, while not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
Evaluate the appropriateness of accounting policies adopted and the reasonableness of accounting estimates and relevant disclosures made by the management.
Conclude on the appropriateness of the management's adoption of the going concern basis of accounting based on the audit evidence obtained and whether a material uncertainty exists for events or conditions that may cast
161 -

significant doubt on the Company's ability to continue as a going concern. If we are of the opinion that a material uncertainty exists, we shall remind users of the parent-only financial statements to pay attention to relevant disclosures in said statements within our audit report. If such disclosures are inadequate, we need to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.

Evaluate the overall presentation, structure, and content of the parent-only financial statements (including relevant notes), and whether the parent-only financial statements adequately present the relevant transactions and events.
Obtain sufficient and appropriate audit evidence concerning the financial information of entities within the Company, to express an opinion on the standalone financial statements. We are responsible for guiding, supervising, and performing the audit and forming an audit opinion on the Company.

We also provided the governing body with a declaration that we have complied with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China regarding independence, and communicated with them all relationships and other matters that may possibly be regarded as detrimental to our independence (including relevant protective measures).

From the matters communicated with the governing body, we determined the key audit matters for the audit of the Company's standalone financial statements for the year ended December 31, 2020. We have clearly indicated such matters in the auditors' report unless legal regulations prohibit the public disclosure of specific matters, or in extremely rare cases, we decided not to communicate over specific items in the auditors' report, for it could be reasonably anticipated that the negative effects of such disclosure would be greater than the public interest it brings forth.

Deloitte Taiwan CPA Su-Li Fang CPA Cheng-Chih Lin

The Financial Supervisory Commission R.O.C. Approved No. Jing-Guang-Zheng-Liu No. 0940161384

The Financial Supervisory Commission R.O.C. Approved No. Jing-Guang-Zheng-Liu No. 0930160267

March 25, 2021

162 -

TYNTEK Corporation

parent-only Balance Sheet

For the Years Ended December 31, 2020 and 2019

Unit: NTD thousands

Code 1100 1110 1120 1136 1150 1170 1180 1200 1210 1220 130X 1460 1479 11XX 1510 1517 1535 1550 1600 1755 1760 1780 1840 1915 1980 1990 15XX 1XXX	Asset CURRENT ASSETS Cash and cash equivalents (Notes 6 and 31) Financial assets at fair value through profit or loss - current (Note 7 and 31) Financial assets at fair value through profit or loss - current (Note 8 and 31) Financial assets at amortized cost - current (Notes 9, 31, and 33) Notes receivable, net (Note 10, 31) Accounts receivable, net (Notes 10 and 31) Accounts receivable - related parties, net (Notes 10, 31, and 32) Other receivables (Notes 10 and 31) Other receivables - related parties (Notes 10, 31 and 32) Current tax assets (Note 27) Inventories (Note 11) Non-current assets held for sale, net (Note 12) Other current assets (Note 18) Total current assets non-current assets Financial assets at fair value through profit or loss - non-current (Note 7 and 31) Financial assets at fair value through profit or loss - non-current (Note 8 and 31) Financial assets at amortized cost - non-current (Note 9, 31 and 33) Investments accounted for using equity method (Note 13) Property, plant and equipment (Notes 14, 33 and 34) Right-of-use assets (Note 15) Investment property (Note 16, 33) Intangible assets (Note 17) Deferred tax assets (Note 27) Prepayments for equipment (Note 34) Other financial assets - non-current (Notes 19, 31 and 33) Other non-current assets (Note 18) Total non-current assets Total assets		Dec. 31, 2020		% 9 4 - 9 - 13 - - - - 11 - - 46 2 1 - 17 26 1 4 - 2 1 - - 54 100		Dec. 31, 2019		% 10 5 - 10 - 13 - - - - 10 - - 48 3 - - 13 28 2 4 - 2 - - - 52 100	Code 2100 2170 2180 2200 2230 2280 2320 2300 21XX 2540 2550 2570 2580 2640 2670 25XX 2XXX 3110 3200 3310 3320 3350 3300 3400 3XXX	LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Notes 19 and 31) Accounts payable (Note 20) Accounts payable to related parties (Notes 20, 31 and 32) Other payables (Notes 21 and 31) Current tax liabilities (Note 27) Lease liabilities - current (Notes 15 and 31) Current portion of long-term borrowings (Notes 19 and 31) Other current liabilities (Note 21) Total current liabilities non-current liabilities Long-term borrowings (Notes 19 and 31) Provisions - non-current (Note 22) Deferred tax liabilities (Note 27) Lease liabilities - non-current (Notes 15 and 31) Defined benefit liability - non-current (Note 23 Other non-current liabilities (Note 21) Total non-current liabilities Total liabilities Equity (Note 24) Ordinary shares Capital reserves Retained earnings Statutory reserves Special reserves undistributed earnings Total retained earnings Other equities Total equity TOTAL LIABILITIES AND EQUITY		Dec. 31, 2020		% 8 5 - 3 - - 3 - 19 12 - - 2 1 - 15 34 51 4 3 1 8 12 1) 66 100		Dec. 31, 2019
			Amount $ 552,849 214,411 6,750 512,760 231 795,223 1,163 7,680 8,016 - 651,178 - 7,863 2,758,124 142,166 32,865 6,566 1,034,766 1,537,444 87,192 220,964 1,712 91,825 39,699 3,788 1,135 3,200,122 $ 5,958,246				Amount $ 568,391 304,816 11,223 587,144 4,209 722,389 5,440 11,063 8,016 15,968 580,009 2,833 6,070 2,827,571 142,166 15,877 6,505 768,084 1,641,571 91,373 222,382 2,435 122,005 20,580 3,783 3,869 3,040,630 $ 5,868,201						Amount $ 455,559 320,899 755 167,481 4,908 3,007 159,040 23,734 1,135,383 735,400 15,428 15,044 85,329 47,258 15,526 913,985 2,049,368 3,006,223 224,694 186,082 89,035 466,022 741,139 63,178) 3,908,878 $ 5,958,246				Amount $ 758,163 248,092 839 161,540 - 4,672 75,760 4,092 1,253,158 769,440 14,760 8,339 87,301 40,157 7,496 927,493 2,180,651 3,006,223 223,902 168,403 76,927 301,131 546,461 89,036) 3,687,550 $ 5,868,201		%
												(		(		(		(	13 4 - 3 - - 1 - 21 13 - - 2 1 - 16 37 51 4 3 1 5 9 1) 63 100

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

Chairman: Bosco Foo

Manager: Will Chou

Head of Accounting: Hsiao-Ping Li

163 -

TYNTEK Corporation

parent-only Statement of Comprehensive Income

For the Years Ended December 31, 2020 and 2019

Code 4000 Operating revenue (Notes 25 and 32) 5000 Operating costs (Notes 11, 26, and 32) 5900 Gross income from operations Operating expenses 6100 Selling and marketing expenses (Notes 22 and 26) 6200 Administrative expenses (Notes 22 and 26) 6300 Research and development expense (Notes 22 and 26) 6450 Expected credit impairment loss (Note 10) 6000 Total operating expenses 6550 Other income and expenses, net (Note 26) 6900 Operating profit (loss) Non-operating income and expense 7100 Interest revenue (Note 26 and 31) 7010 Interest revenue (Note 26 and 31) 7020 Other gains or losses (Note 26) 7050 Financial costs (Note 26) 7070 Share of profit or loss of subsidiaries and associates accounted for using equity method (Note 13) 7000 Total non-operating income and expenses 7900 Net income before tax 7950 Income tax expense (Note 27) 8200 Net income of the current year		2020		% 100 86 14 1 7 5 - 13 - 1 - 1 3 1 ) 12 15 16 2 14		Unit: NTD thousands; EPS in NTD 2019 Amount % $ 2,015,660 100 1,785,983 89 229,677 11 30,820 2 126,313 6 108,869 5 - - 266,002 13 - - 36,325) ( 2) 20,281 1 25,396 2 116,288 6 19,049 ) ( 1 ) 85,268 4 228,184 12 191,859 10 12,001 1 179,858 9	Unit: NTD thousands; EPS in NTD 2019 Amount % $ 2,015,660 100 1,785,983 89 229,677 11 30,820 2 126,313 6 108,869 5 - - 266,002 13 - - 36,325) ( 2) 20,281 1 25,396 2 116,288 6 19,049 ) ( 1 ) 85,268 4 228,184 12 191,859 10 12,001 1 179,858 9
		Amount $ 2,200,552 1,898,699 301,853 26,914 158,411 97,247 6,420 288,992 3,602) 9,259 6,093 22,195 61,480 20,556 ) 264,707 333,919 343,178 38,680 304,498				Amount $ 2,015,660 1,785,983 229,677 30,820 126,313 108,869 - 266,002 - 36,325) 20,281 25,396 116,288 19,049 ) 85,268 228,184 191,859 12,001 179,858
	( (		(		( (		( (

(To be Continued)

164 -

(Continued)

Code Other comprehensive income (net amount) 8310 Items that will not be reclassified subsequently to profit or loss: 8311 Remeasurement of defined benefit plans (Note 23) 8316 Unrealized gains (losses) on investments in equity instruments at FVTOCI (Note 24) 8331 Remeasurement of defined benefit plans of subsidiaries accounted for using the equity method 8336 Unrealized gains (losses) on equity instruments of subsidiaries, associates, and joint ventures at FVOCI accounted for using the equity method (Note 24) 8349 Income tax relating to items that will not be reclassified subsequently to profit or loss (Note 24) 8360 Items that may be reclassified subsequently to profit or loss (Note 24): 8380 Share of other comprehensive income of subsidiaries accounted for using the equity method 8399 Income tax relating to items that may be reclassified subsequently to profit or loss 8300 Other comprehensive income of the current year (net amount after tax) 8500 Total comprehensive income of the current year Earnings per share (Note 28) 9710 Basic 9810 Diluted		2020		% - - - - - 1 - 1 15		2019
		Amount $ 7,977 ) 12,515 - 6,913 3,398 ) 12,285 2,457) 17,881 $ 322,379 $ 1.02 $ 1.01				Amount $ 3,354 ) 3,073 ) 284 177 ) 235 11,368 ) 2,273 15,180) $ 164,678 $ 0.60 $ 0.60		%
	( ( (				( ( ( ( (		( (	- - - - - 1 ) - 1) 8

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

Chairman: Bosco Foo

Manager: Will Chou

Accounting Supervisor: Li, Hsiao-Ping

165 -

TYNTEK Corporation

parent-only Statement of Changes in Equity

For the Years Ended December 31, 2020 and 2019

Unit: NTD thousands

Share capital Shares (Thousands) Amount 300,621 $ 3,006,223 - - - - - - - - - - - - - - - - 300,621 3,006,223 - - - - - - - - - - - - - - - - - - 300,621 $ 3,006,223			Retained earnings		Other items	of equity Unrealized Gain (Loss) on Financial Assets at Fair Value Through Other Comprehensive Income ( $ 55,264 ) - - - - ( 3,015) ( 3,015) - - ( 58,279 ) - - - - 16,030 16,030 - - - ($ 42,249)			Total equity
					Exchange Differences in Translating the Financial Statements of Foreign Operations ( $ 21,662 ) - - - - ( 9,095) ( 9,095) - - ( 30,757 ) - - - - 9,828 9,828 - - - ($ 20,929)
Shares (Thousands) 300,621 - - - - - - - - 300,621 - - - - - - - - - 300,621		Statutory reserves $ 114,621 53,782 - - - - - - - 168,403 17,679 - - - - - - - - $ 186,082	Special reserve $ 69,365 - 7,562 - - - - - - 76,927 - 12,108 - - - - - - - $ 89,035
	( (			( ( ( ( ( ( ( ( (	( ( ( ( (	( ( ( ( (	(	( ( ( ( ( (	$ 3,883,613 - - 360,746 ) 179,858 15,180) 164,678 310 ) 315 3,687,550 - - 90,187 ) 304,498 17,881 322,379 36,561 30,790 ) 16,635) $ 3,908,878

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

Chairman: Bosco Foo

Manager: Will Chou

Accounting Supervisor: Li, Hsiao-Ping

166 -

TYNTEK Corporation

parent-only Statement of Cash Flows

For the Years Ended December 31, 2020 and 2019

Unit: NTD thousands

Code CASH FLOWS FROM OPERATING ACTIVITIES A10000 Net income before tax of the current year A20010 Adjustments for: A20100 Depreciation expense A20200 Amortization expenses A20300 Expected credit impairment loss A20400 Net gains on financial assets at FVTPL A20900 Financial costs A21200 Interest income A21300 Dividend revenue A21900 Share-based compensation A22400 Share of profit or loss of subsidiaries and associates accounted for using equity method A22900 Gains on disposal of subsidiary A23000 Gains on disposal of non-current assets held for sale A23200 Gains on disposal of investments accounted for using equity method A23700 Losses on inventory valuation and obsolescence losses A22500 Losses on disposal of property, plant and equipment A24100 Unrealized net (gains) losses on foreign currency exchange A29900 Gains on lease modification A30000 Changes in operating assets and liabilities A31130 Note receivable A31150 Trade receivable A31180 Other receivables A31200 Inventories A31230 Prepayments A31240 Other current assets A32150 Accounts payable A32180 Other payables A32200 Provisions A32230 Other current liabilities A32240 Net defined benefit liability - non-current A33000 Cash from operations A33300 Interest paid A33500 Income tax returned AAAA Net cash inflow from operating activities		2020 $ 343,178 198,341 815 6,420 123,203 ) 20,556 6,093 ) 10,027 ) 5,771 264,707 ) - 614 ) 5,257 ) 14,250 3,930 21,214 ) 10 ) 3,978 64,686 ) 2,389 85,419 ) 1,687 ) 20 ) 71,262 3,931 668 19,643 876) 111,319 20,760 ) 13,225 103,784		2019
	( ( ( ( ( ( ( ( ( ( ( ( ( (		( ( ( ( ( ( ( ( ( ( ( (	$ 191,859 169,566 825 - 137,564 ) 19,049 20,281 ) 11,290 ) - 85,268 ) 8,333 ) - - - - 4,059 - 1,068 ) 9,730 ) 3,279 ) 130,654 23,855 179 2,714 9,183 ) 1,020 1,970 ) 540) 255,274 18,745 ) 124 236,653

(To be Continued)

167 -

(Continued)

Code Net cash flows of investing activities B00040 Acquisition of financial assets at amortized cost B00050 Disposal of financial assets at amortized cost B00100 Purchase of financial assets at fair value through profit or loss B00200 Disposal of financial assets at FVTPL B01900 Disposal of long-term investments in equity using equity method B02600 Proceeds from disposal of non-current assets held for sale B02700 Acquisition of property, plant, and equipment B02800 Proceeds from disposal of property, plant and equipment B03700 Decrease (increase) in refundable deposits B04100 Decrease in other receivables B04500 Acquisition of intangible assets B06500 Increase in other financial assets B07100 Increase in prepayments for equipment B07500 Interest received B07600 Dividends received B09900 Other investing activities BBBB Net cash inflows from investing activities Cash flows from financing activities C00100 Increase in short-term borrowings C00200 Decrease in short-term borrowings C01600 Proceeds from long-term borrowings C01700 Repayments of long-term borrowings C03000 Increase in guarantee deposits received C04020 Repayment of the principal portion of leases C04500 Cash dividends distributed C04900 Cost of redemption of treasury stock C05000 Proceeds from disposal of treasury stock CCCC Net cash inflow (outflow) from financing activities DDDD Effects of exchange rate changes on the balance of cash held in foreign currencies EEEE Increase (decrease) in cash and equivalents E00100 Balance of cash and cash equivalents at the beginning of the year E00200 Balance of cash and cash equivalents at the end of the year		2020 $ - 81,302 41,468 ) 255,076 5,845 3,444 47,794 ) 10 62 - 92 ) 91 ) 61,183 ) 7,026 10,027 2,672 214,836 1,357,823 1,663,484 ) 128,500 79,260 ) 8,030 4,107 ) 90,187 ) 30,790 ) 30,790 342,685) 8,523 15,542 ) 568,391 $ 552,849		2019
	( ( ( ( ( ( ( ( ( ( ( (		( ( ( ( ( ( ( ( ( ( (	$ 164,078 ) - - - - - 126,652 ) 1,780 122 ) 955 136 ) 13,159 ) 47,920 ) 20,012 11,290 200 317,830) 2,090,983 1,692,582 ) 62,000 12,000 ) 2,752 4,962 ) 360,746 ) - - 85,445 12,581 16,849 551,542 $ 568,391

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

Chairman: Bosco Foo

Manager: Will Chou

Accounting Supervisor: Li, Hsiao-Ping

168 -

TYNTEK Corporation Notes to Standalone Financial Statements For the Years Ended December 31, 2020 and 2019

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

I. Organization and operations

TYNTEK Corporation (hereinafter referred to as the "Company") was incorporated on April 4, 1987 in accordance with the Company Act of R.O.C. The main businesses are research and development,

manufacturing, and sales of relevant products, including gallium arsenide, infrared, light-emitting diodes, laser diodes, phototransistors, photodiodes, single crystal and epitaxy, crystal grains, optoelectronic systems, radio transmitters, and other electrical devices that can generate radio radiant energy.

The standalone financial statements of the Company are presented in the Company’s functional currency, i.e. the New Taiwan dollar.

II. The Authorization of Financial Statements The standalone financial statements were approved by the board of directors and authorized for issue on March 25, 2021.

III. Application of New and Revised International Financial Reporting Standards

(I) Initial application of the amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and 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) Except for the following, the application of the amendments to the IFRSs endorsed and issued into
effect by the FSC does not have material impact on the Company’s accounting policies:
Amendments to IAS 1 and IAS 8 "Definition of Materiality"

The Company adopted the amendments on January 1, 2020. The threshold for materiality was amended to be "can be reasonably expected to influence users", and the disclosures in the standalone financial statements were adjusted by removing immaterial information which may obscure material information.

Amendment to IFRS 16 "COVID-19-Related Rent Concessions"

The Company has chosen to apply the practical expedient of the amendment to deal with rent negotiations directly related to the COVID-19 between it and the lessor. Please refer to Note 4 for the relevant accounting policies. Before applying the amendment, the Company shall judge whether the provisions of the lease modification should apply to the aforementioned rent negotiation.

The Company began to apply the amendment on January 1, 2020. Since the aforementioned rent negotiation only affected the year of 2020, the retrospective application of the amendment did not affect the retained earnings as of January 1, 2020.

(II) IFRSs endorsed by FSC that are applicable from 2021 onwards

not affect the retained earnings as of January 1, 2020. IFRSs endorsed by FSC that are applicable from 2021 onwards
New, Revised or Amended Standards and Interpretations Amended “Extension of the Temporary Exemption from Applying IFRS 9” in IFRS 4 Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4, and IFRS 16 - “Interest Rate Benchmark Reform - Phase 2”	Effective Date Announced by IASB
	Effective on the published date Effective for the annual reporting periods beginning on or after January 1, 2021

As of the publication date of the standalone financial statements, the Company has assessed that the above-mentioned standards and amendments to the interpretations will not have a significant influence on the Company’s financial position and financial performance.

169 -
(III) The IFRSs issued by the International Accounting Standards Board (IASB) but not yet endorsed and issued into effect by the FSC

Note 1: Unless stated otherwise, the above New IFRSs are effective for annual periods beginning on or after their respective effective dates.
Note 2: The amendment of IFRS 9 applies to the exchange of financial liabilities or modified terms incurring in the annual reported periods since January 1, 2022; the amendment of “Agriculture” in IAS 41 applies to the measurement at fair value in the annual reported periods since January 1, 2022; The amendment of “Initial application of IFRSs” in IFRS 1 applies the annual reported periods since January 1, 2022 retrospectively.
Note 3: The amendment applies to the merges whose acquisition dates after the annual reported periods since January 1, 2022.
Note 4: The amendment applies to the property, plant and equipment achieving the expected operations by the management after January 1, 2021.
Note 5: The amendment applies to the contracts yet performing all obligations as of January 1, 2022. Note 6: The amendments apply to the annual reporting periods beginning on or after January 1, 2023 prospectively.

Note 7: The amendments apply to changes in accounting estimates and changes in accounting policies that occur during the annual reporting periods beginning on or after January 1, 2023.

As of the publication date of the standalone financial statements, the Company is continuing to assess the impact of amendments to the aforementioned standards and interpretations on the Company’s financial position and financial performance, and will disclose relevant impacts when the assessment is completed.

IV. Summary of Significant Accounting Policies (I) Statement of compliance
- The standalone financial statements have been prepared in accordance with the Regulations
- Governing the Preparation of Financial Reports by Securities Issuers.
(II) Basis of preparation

The standalone financial statements have been prepared on the historical cost basis except for the financial instruments measured at fair value and the net defined liabilities recognized at the present value of the defined benefit obligation less the fair value of plan assets.

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).
Level 3 inputs are unobservable inputs for the asset or liability. When preparing the standalone financial statements, the Company adopted the equity method to

account for its investments in subsidiaries and associates. In order to enable the amounts of the profit or loss for the year and other comprehensive income and equity for the year in the standalone financial statements to be the same as the ones attributable to the owners of the Company in its consolidated financial statements, regarding the differences arising from accounting treatments between the parent

170 -

company only basis and the consolidation basis, adjustments were made to the investments accounted for using the equity method, the share of profit or loss of subsidiaries, associates, and joint ventures using the equity method, the share of other comprehensive income of subsidiaries and associates using the equity method, as well as relevant equity items, as appropriate, in the standalone financial statements.

(III) Classification of current and non-current assets and liabilities
Current assets include:
Assets held primarily for the purpose of trading;
Assets realized within 12 months after the balance sheet date; and
Cash or cash equivalents (excluding assets restricted from being exchanged or used to settle a liability for at least 12 months after the balance sheet date).
Current liabilities include:
Liabilities held primarily for the purpose of trading;
Liabilities realized within 12 months after the balance sheet date; and
Liabilities with a repayment deadline that cannot be unconditionally deferred for at least 12 months after the balance sheet date.
Assets and liabilities that are not classified as current are classified as non-current.
(IV) Foreign currencies In preparing the Company’s financial statements, transactions in currencies other than the
Company’s functional currency (i.e. foreign currencies) are recognized at the rates of exchange prevailing on the transaction dates.

Non-monetary items measured at fair value that are denominated in foreign currencies are translated at the rates prevailing on the date when the fair value was determined. The resulting exchange difference is recognized in profit or loss. For items whose changes in fair value are recognized in other comprehensive income, the resulting exchange difference is recognized in other comprehensive income. Non-monetary items measured at historical cost that are denominated in foreign currencies are translated at the rates of exchange prevailing on the transaction dates and are not retranslated. When preparing the standalone financial statements, the assets and liabilities of the Company’s foreign operations (including subsidiaries, associates, joint ventures, or branches that operate in countries or adopt the functional currencies different from the Company) are translated into New Taiwan dollar. Income and expense items are translated at the average exchange rates for the period. The resulting currency exchange differences are recognized in other comprehensive income.

If the Company disposes of the ownership interest of a foreign operation, or disposes of part of the equity of a foreign operation’s subsidiary and loses control, or disposes of a foreign operation’s joint agreement or associate, and the retained equity is a financial asset and is treated based on the accounting policies adopted for financial instruments, then all accumulated exchange differences related to the foreign operation will be reclassified to profit or loss.

If the partial disposal of a subsidiary of a foreign operation does not result in the loss of control, the accumulated exchange differences are included in the calculation of the equity transaction proportionally but are not recognized in profit or loss. In the case of any other partial disposal of foreign operations, the accumulated exchange differences will be reclassified to profit or loss according to the proportion of the disposal.

(V) Inventories Inventories include merchandise, raw materials, work-in-progress, and finished goods. The value of inventories shall be determined based on the cost and net realizable value (NRV), whichever is lower. The comparison of the cost and NRV is based on individual items except for inventories of the same category. The NRV is the estimated selling price in the ordinary course of business, less the estimated cost of completion and the estimated costs necessary to make the sale. The cost of inventories is calculated using the weighted average method.

(VI) Investment in subsidiaries

The Company adopts the equity method to account for its investments in subsidiaries. A subsidiary is an entity (including structured entity) that is controlled by the Company. Under the equity method, investments are initially recognized at cost and adjusted thereafter to recognize the Company’s share of the profit or loss and other comprehensive income of its subsidiaries. In addition, changes in the Company's other equity interest of its subsidiaries are recognized based on its ownership percentage.

Changes in the Company’s ownership interests in subsidiaries that do not result in the Company losing control over the subsidiaries are accounted for as equity transactions. Any difference between the carrying amount of an investment and the fair value of the consideration paid or received is recognized directly in equity.

171 -

When the Company’s share of losses of a subsidiary exceeds its equity in said subsidiary (which includes any carrying amount of the investment accounted for by the equity method and long-term equity that, in substance, forms part of the Company’s net investment in said subsidiary), the Company continues recognizing its share of further losses.

The amount of the acquisition cost in excess of the Company’s share of the net fair value of the identifiable assets and liabilities of a subsidiary that constitutes the business on the acquisition date is classified as goodwill, which is included in the book value of the investment and cannot be amortized. The amount of the Company’s share of the net fair value of the identifiable assets and liabilities of a subsidiary that constitutes the business on the acquisition date in excess of the amount of the acquisition cost is classified as current income.

When the Company assesses the impairment, it considers the cash-generating unit as a whole in the financial statements and compares its recoverable amount with the carrying amount. If the recoverable amount of an asset increases subsequently, the reversal of the impairment loss shall be recognized in gains, but the carrying amount of the asset after the reversal of the impairment loss shall not exceed the carrying amount of the asset less amortization without impairment loss recognized. The impairment loss attributable to goodwill shall not be reversed in subsequent periods.

When the Company loses control over a subsidiary, it measures its remaining investment in said subsidiary based on the fair value on the day when the control is lost. The fair value of the remaining investment and the difference between any disposal price and the carrying amount of the investment on the day when the control is lost are recognized in profit or loss for the period. In addition, all amounts recognized in other comprehensive income related to said subsidiary are accounted for on the same basis as the one adopted for the Company's direct disposal of the relevant assets or liabilities.

The unrealized profit or loss on downstream transactions between the Company and its subsidiaries are eliminated in the standalone financial statements. Profit or loss on downstream and lateral transactions between the Company and its subsidiaries is recognized in the standalone financial statements only to the extent that it does not affect the Company's interests in the subsidiaries.

(VII)

Investments in Associates

An associate is an entity over which the Company has significant influence and is not a subsidiary nor a joint venture.

The Company adopts the equity method to account for its investments in associates.

Under the equity method, investments in an associate are initially recognized at cost and adjusted thereafter to recognize the Company’s share of the profit or loss and other comprehensive income of the associate. The Company also recognizes the changes in its share of the equity of associates based on the percentage of ownership.

The amount of the acquisition cost in excess of the Company’s share of the net fair value of the identifiable assets and liabilities of an associate that constitutes the business on the acquisition date is classified as goodwill, which is included in the book value of the investment and cannot be amortized. The amount of the Company’s share of the net fair value of the identifiable assets and liabilities of an associate that constitutes the business on the acquisition date in excess of the amount of the acquisition cost is classified as profit or loss.

When an associate issues new shares, if the Company does not subscribe according to the ownership percentage, which causes the ownership percentage to change, and, thus, the net equity value of the investment increases or decreases, capital surplus - the changes in the net equity value of associates and joint ventures accounted for using the equity method and the investment accounted for using the equity method are adjusted for the increase or decrease. However, if the new shares is not subscribed to or acquired according to the ownership percentage, which results in a decrease in the ownership interests of the associate, the amount recognized in the other comprehensive income related to the associate is reclassified according to the percentage of the decrease, and the basis of the accounting treatment adopted is the same as the basis that the associate must follow in the case of direct disposal of relevant assets or liabilities. Where the adjustment in the preceding paragraph shall be debited to the capital surplus, and the balance of the capital surplus generated by the investment under the equity method is insufficient, the difference is debited to the retained earnings.

When the Company’s share of losses on an associate equals or exceeds its interest in the associate (including any carrying amount of the investment accounted for using the equity method and other longterm interests that, in substance, form part of the Company’s net investment in the associate), the Company discontinues recognizing its share of further losses. Additional losses and liabilities are recognized only to the extent that the Company has incurred legal obligations, or constructive obligations, or made payments on behalf of said associate.

172 -

Any reversal of that impairment loss is recognized only to the extent that the recoverable amount of the investment subsequently increases.

The Company ceases to adopt the equity method on the day when its investment ceases to be an associate, and its retained equity in the original associate is measured at fair value. The differences between the fair value, the proceeds from the disposal, and the carrying amount of the investment on the day when the equity method ceases to be adopted are recognized in profit or loss. In addition, all amounts recognized in other comprehensive income related to said associate are accounted for on the same basis as the one adopted for the associate's direct disposal of the relevant assets or liabilities. If an investment in an associate becomes an investment in a joint venture, or an investment in a joint venture becomes an investment in an associate, the Company will continue to adopt the equity method without remeasuring the retained equity.

Profit or loss on upstream, downstream, and lateral transactions between the Company and its associates is recognized in the standalone financial statements only to the extent that it does not affect the Company's interests in the associates.

(VIII) Property, plant, and equipment Property, plant and equipment are recognized at cost less accumulated depreciation and accumulated impairment loss.

Property, plant and equipment are depreciated using the straight-line method over their useful lives. Each significant part is depreciated separately. The Company conducts at least one annual review at the end of each year to assess the estimated useful life, residual value, and depreciation methods, while applying the effect of changes in accounting estimates prospectively.

When derecognizing property, plant and equipment, the difference between the net disposal proceeds and the carrying amount of the asset is recognized in loss or profit. (IX) Investment Property Investment property refers to property held for the purpose of earning rent or capital appreciation or both. (Including the assets that meet the definition of investment property and the right-of-use assets). Investment property also includes land held, in which the future use has not yet been determined. Self-owned investment property is initially measured at cost (including transaction costs), and subsequently measured at cost less accumulated depreciation and accumulated impairment loss. The investment property is depreciated on a straight-line basis. When investment property is derecognized, the difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss. (X) Intangible asset 1. Acquired separately Intangible assets with finite useful lives that are acquired separately are initially measured at cost and subsequently measured at cost less accumulated amortization and accumulated impairment loss. Intangible assets are amortized using straight-line method over the useful lives. The Company conducts at least one annual review at the end of each year to assess the estimated useful life, residual value, and amortization methods, while applying the effects of changes in accounting estimates prospectively. Intangible assets with indefinite useful lives are recognized at cost less accumulated impairment loss. 2. Internally generated— research and development (R&D) expenditure Research expenditure is recognized in expenses when incurred. 3. Acquired in a business combination The intangible assets obtained in a business combination are recognized at the fair value on the acquisition date and recognized separately from goodwill, and subsequently measured in the same method for the intangible assets acquired separately. 4. Derecognition When an intangible asset is derecognized, the difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss.

(XI) Impairment of assets related to property, plant and equipment, right-of-use assets, intangible assets, and assets related to contract costs

The Company assesses if there are any signs of possible impairment in property, plant, and equipment as well as right-of-use and intangible assets at each balance sheet date. If there is any sign of impairment, an estimate is made of its recoverable amount. If it is not possible to determine the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cashgenerating unit to which the asset belongs. Corporate assets are allocated to the smallest group of cashgenerating units on a reasonable and consistent basis.

Intangible assets with indefinite useful lives and not yet available for use are tested for impairment at least annually and whenever there is a sign that the assets may be impaired.

173 -

the carrying amount is reduced to the recoverable amount, and the impairment loss is recognized in profit and loss.

(XII) Financial instruments

Financial assets and financial liabilities shall be recognized in the standalone balance sheet when the Company becomes a party to the contractual provisions of the instruments.

Financial assets and financial liabilities not at fair value through profit or loss are measured at fair value plus transaction costs directly attributable to the acquisition or issuance of financial assets or financial liabilities. The transaction costs directly attributable to the acquisition or issuance of financial assets or financial liabilities at fair value through profit or loss is immediately recognized in profit or loss.

Financial asset Regular trading of financial assets shall be recognized and derecognized in accordance with

trade date accounting.

(1) Measurement types

Financial assets held by the Company are those measured at fair value through profit or loss (FVTPL) and at amortized cost, as well as investments in equity instruments measured at fair value through other comprehensive income (FVTOCI).

A. Disposal of financial assets at FVTPL

Financial assets measured at FVTPL include those mandatorily measured at FVTPL and those designated as at FVTPL. Financial assets mandatorily measured at FVTPL include investments in equity instrument that the Company has not designated to measure at FVTOCI, and debt instruments that are not classified as measured at amortized cost or at FVTOCI.

Financial assets measured at FVTPL are measured at fair value, and the gains or losses arising from remeasurement (not including any dividends or interest generated by the financial asset) are recognized in other gains and losses. Please refer to Note 31 for the method of determining the fair value.

B. Financial assets at amortized cost

When the Company's investments in financial assets meet the following two conditions simultaneously, they are classified as financial assets measured at amortized cost:

a. Held under a certain business model, of which the objective is to collect contractual cash flows by holding the financial assets; and
b. The cash flows on specific dates specified in the contractual terms are solely payments of the principal and interest on the principal amount outstanding. After initial recognition, such assets (including cash and cash equivalents, notes
and accounts receivable measured at amortized cost, other receivables, other financial assets, guarantee deposits paid, and time deposits with the original maturity date of more than 3 months) are measured at the amortized cost of the total carrying amount determined by the effective interest method less any impairment loss, and any foreign currency exchange differences are recognized in profit or loss.

Except for the following two cases, interest revenue is calculated by multiplying the effective interest rate by the total carrying amount of financial assets:

a. For purchased or originated credit-impaired financial asset, interest revenue is calculated by multiplying the credit-adjusted effective interest rate by the amortized cost of the financial asset.
b. For financial asset that is not purchased or originated credit-impaired but subsequently becomes credit impaired, interest income is calculated by multiplying the effective interest rate from the next reporting period after the credit impairment by the amortized cost of the financial asset.
174 -

Credit-impaired financial assets refer to the fact that when an issuer or debtor has experienced major financial difficulties or default, the debtor is likely to apply for bankruptcy or other financial restructuring, or the active market for the financial assets disappears due to financial difficulties. Equivalent cash includes time deposits that are highly liquid, convertible into imprest cash at any time with little risk of value changes within 3 months from the date of acquisition, and is used to meet short-term cash commitments.

C. Investments in equity instruments measured at FVTOCI

The Company may, upon initial recognition, make an irrevocable election to designate as at FVTOCI the investments in equity instruments that are not held for trading and the ones that are not recognized by an acquirer in a business combination or with the contingent consideration.

Dividends of investments in equity instruments measured at FVTOCI are recognized in profit or loss when the Company's right to receive dividends is established unless such dividends clearly represent the recovery of a part of the investment cost.

(2) Impairment of financial assets

The Company assesses the impairment loss of financial assets measured at amortized cost (including accounts receivable) based on the expected credit loss on each balance sheet date.

For the purpose of internal credit risk management, the Company, without considering the collateral held, determines that the following situations represent defaults in the financial assets:

A. Internal or external information indicates that it is impossible for the debtor to settle the debt.
B. B. It is overdue for more than 90 days, unless there is reasonable and corroborative information showing that a default date postponed is more appropriate.

(3) Derecognition of financial assets

The Company derecognizes a financial asset when the contractual rights to the cash inflow from the financial asset expire or when it transfers the financial assets and substantially all the risks and rewards of ownership of the asset to another party.

On derecognition of a financial asset at amortized cost in its entirety, the difference between the asset’s carrying amount and the consideration received is recognized in profit or loss. When the investment in debt instruments measured at FVTOCI is derecognized in its entirety, the difference between its carrying amount and the consideration received plus the sum of any accumulated gains or losses that have been recognized in other comprehensive income is recognized in profit or loss When derecognizing an investment in equity instrument at FVTOC in its entirety, the cumulative profit or loss is transferred directly to retained earnings and is not reclassified to profit or loss.

Equity instrument
175 -

Debt and equity instruments issued by the Company are classified as either financial liabilities or equity in accordance with the substance of the contractual arrangements and the definitions of financial liabilities and equity instruments.

Equity instruments issued by the Company are recognized at the proceeds received, net of the cost of direct issue.

The repurchase of the Company’s own equity instruments is recognized in and deducted directly from equity. The purchase, sale, issuance, or cancellation of the Company’s own equity instruments is not recognized in profit or loss.

Financial liability
(1) Subsequent measurement The Company’s all financial liabilities are measured at amortized cost in the effective
interest method.
(2) Derecognition of financial liabilities

(XIII) Provisions

(XIV) Revenue recognition After the Company identifies its performance obligations in contracts with customers, it allocates the transaction costs to each obligation in the contracts and recognizes revenue upon completion of performance obligations.

Sales revenue

Sales revenue comes from the sales of products. As when a product reaches the transaction conditions signed with a customer, the customer already has the right to set the price and the way the product is used while bearing the main responsibility for resale and the risk of obsolescence, at which the Company recognizes such revenue and reclassifies it to accounts receivable after fulfilling the remaining obligations. Advance receipts from sales are recognized as contract liabilities before a product reaches the transaction conditions signed with a customer.

(XV) Leasing
At the inception of a contract, the Company assesses whether the contract is, or contains, a lease.
1. The Company as lessor

Where almost all the risks and rewards attached to the ownership of an asset are transferred to the lessee in lease terms, such leases are classified as finance leases. All other leases are classified as operating leases.

The Company as lessee

A right-of-use asset is depreciated on a straight-line basis over the period from the lease commencement date to the end of its useful life, or to the end of the lease term, whichever is earlier.

Lease liabilities are initially measured at the present value of lease payments. If the interest rate implicit in a lease can be easily determined, the lease payment is discounted at such an interest rate. If the interest rate cannot be easily determined, the lessee's incremental borrowing rate applies.

176 -

Subsequently, lease liabilities are measured at the amortized cost using the effective interest rate method, and interest expense is amortized over the lease term. If changes in the lease term, the expected payment under the residual value guarantee, the evaluation of the underlying asset purchase options, or the index or rate used to determine the lease payment over the lease term lead to changes in future lease payments, the Company remeasures the lease liabilities with a corresponding adjustment to the right-of-use assets. However, if the carrying amount of the rightof-use assets has been reduced to zero, the remaining remeasurement amount is recognized in profit or loss. For lease modifications that are not treated as a separate lease, remeasurement of the lease liabilities due to the reduced scope of the lease is to reduce the right-of-use assets, and to recognize the profit or loss of the partial or full termination of the lease; the remeasurement of the lease liabilities due to other modifications is to adjust the right-of-use assets. Lease liabilities are presented on a separate line in the standalone balance sheets.

The Company and the lessor engaged in rent negotiations directly related to the COVID-19 pandemic, and adjusted the rents due before June 30, 2021, resulting in a decrease in the rents before the negotiation. These negotiations did not materially change other lease terms. The Company has elected to adopt practical expedients to treat rent negotiations that meet the aforementioned conditions without evaluating whether the negotiation is about a lease

modification, and recognizes the reduction in lease payments in profit or loss under other income and expenses when a concession occurs, and makes a corresponding downward adjustment to the lease liabilities.

(XVI) Borrowing costs

Other than that which is stated above, all other borrowing costs are recognized in profit or loss in the period in which they are incurred.

(XVII) Employee benefits

Short-term employee benefits Relevant liabilities for short-term employee benefits are measured by the non-discounted

amount expected to be paid in exchange for employee services.

Post-employment benefits

For pension under the defined contribution plan, the amount of pension contributed is recognized as expenses during employees' service period.

Other long-term employee benefits

The accounting treatment of other long-term employee benefits is the same as that of postemployment benefits, but the relevant remeasurement is recognized in profit or loss.

177 -

(XVIII) Share-based payment arrangement

Share-based payment arrangement for granting shares to employees

The share-based payment arrangement for equity delivery is based on the fair value of the equity instrument on the grant date and the best estimated number expected to be vested, and is recognized as expenses on a straight-line basis during the vesting period, while the capital surplus - employee share options is adjusted at the same time. If it is immediately vested on the grant date, the full amount of the shares shall be recognized in expenses on the grant date. The Company transfers treasury shares to employees, so the record date for the transfer is the grant date.

The Company revises the estimated number of expected vested employee share options at each

balance sheet date. If there is a revision to the original estimated number, the effect is recognized as profit or loss, so that the accumulated expenses will reflect the revised estimate, and the capital surplus - employee share options is adjusted accordingly.

(XIX) Income tax

The income tax expense represents the sum of the tax currently payable and deferred tax.
1. Tax currently payable

The Company determines the income (loss) of the current year in accordance with the laws and regulations in each jurisdiction area for income tax filings, and calculates the income tax payable (recoverable) accordingly.

A surtax imposed on the undistributed earnings pursuant to the Income Tax Act of R.O.C. is recognized via a resolution at the annual shareholders' meeting.

Adjustments to income tax payable from prior years are recognized in the current income tax.
1. Deferred tax

Deferred income tax is calculated based on the temporary differences between the carrying amount of assets and liabilities and the corresponding tax bases used in the computation of taxable income.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and associates, except where the Company is able to control the reversal of the temporary difference and it is probable that said temporary difference will not be reversed in the foreseeable future. The deductible temporary differences related to said investments and equity are recognized as deferred income tax only if it is probable that there will be sufficient taxable income to realize the temporary differences, and they are expected to be reversed in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable income will be available to allow all or part of the asset to be recovered. A previously unrecognized deferred tax asset is also reviewed at each balance sheet date, and its carrying amount will be increased as it has become probable that future taxable income will allow all or part of the asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates in the period in which the liabilities are expected to be settled or assets realized, based on tax rates and tax laws that have been enacted or substantively enacted at the balance sheet date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the balance sheet date, to recover or settle the carrying amount of its assets and liabilities.

Current and deferred income tax

178 -

V. Critical Accounting Judgements and Key Sources of Estimation and Uncertainty

In the application of the Company’s accounting policies, the management is required to make judgments, estimations, and assumptions about the relevant information that is not readily accessible from other sources based on historical experience and other relevant factors. Actual results may differ from these estimates.

The Company takes into account the economic impact of the COVID-19 pandemic in its critical accounting estimates, and the management will constantly review the estimates and basic assumptions. If an amendment to estimates only affects the current period, it shall be recognized in the period of said amendment; if an amendment to accounting estimates affects the current year and future periods, it shall be recognized in the period of said amendment and future periods.

Key Sources of Estimation and Assumption Uncertainty

(I) Inventory impairment

Cash and equivalents

VI.	Cash and equivalents
VII.	Dec. 31, 2020 Dec. 31, 2019 Cash on hand and petty cash $ 306 $ 281 Check and demand (current) deposit 495,583 525,060 Cash equivalents (bank time deposits with original maturity date of less than 3 months) 56,960 43,050 $ 552,849 $ 568,391 The interest rate ranges of cash in banks at the balance sheet date are as follows: Dec. 31, 2020 Dec. 31, 2019 Cash in banks 0.001%~1.400% 0.001%~2.270% Financial instruments at FVTPL Dec. 31, 2020 Dec. 31, 2019 Financial assets-current Financial assets designated as at FVTPL Non-derivative financial assets - Domestic listed stocks $ 214,396 $ 304,801 - Gold passbook 15 15 $ 214,411 $ 304,816 Financial assets-non-current Financial assets designated as at FVTPL Non-derivative financial assets - Foreign unlisted stocks $ 142,166 $142,166	Dec. 31, 2019
		0.001%~2.270% Dec. 31, 2019
			$ 304,801 15 $ 304,816 $142,166

179 -

VIII. Financial assets at FVTOCI

Financial assets at FVTOCI
Equity investment instruments Current Domestic investment Listed stocks Unity Opto Technology co., Ltd. (Note) Para Light Electronics Co., Ltd. Non-current Domestic investment Stocks listed in emerging stock markets and unlisted stocks Chipwell Tech Corporation Brightek Optoelectronic Co., Ltd.	Dec. 31, 2020 $ - 6,750 $ 6,750 $ 6,579 26,286 $ 32,865	Dec. 31, 2019
			$ 6,071 5,152 $ 11,223 $ 1,617 14,260 $ 15,877

Note: Because the public company Unity Opto Technology co., Ltd. (hereinafter referred to as Unity Opto) failed to publish its financial statements for 2019 within the specified time limit, it was sanctioned by the Taiwan Stock Exchange on April 1, 2020, and it stock was stopped to be traded starting from April 7, 2020. After prudent evaluation, the Company recognized all shares of Unity Opto held as financial asset valuation losses on March 31, 2020.

The Company has invested in the common stocks of the above-mentioned companies in accordance with medium and long-term strategic purposes, and expects to make profits through long-term investments. The management of the Company believes that if the short-term fair value fluctuations of these investments are recognized in profit or loss, it is inconsistent with the aforementioned long-term investment plan, so it has elected to designate these investments as at FVTOCI.

IX. Financial assets at amortized cost

Financial assets at amortized cost
Current Time deposits with original maturity date of more than 3 months - pledge Time deposits with original maturity date of less than 3 months - pledge Non-current Time deposits with original maturity date of more than 1 year - pledge	Dec. 31, 2020 $ 185,597 327,163 $ 512,760 $ 6,566	Dec. 31, 2019
			$ 240,218 346,926 $ 587,144 $ 6,505

As of December 31, 2020 and 2019, the interest rate range of the pledged time deposits with original maturity date of over one year was 0.755%–0.815% and 1.035%–1.065%, respectively.

For information on pledged financial assets measured at amortized cost, please refer to Note 33.

180 -

X. Notes receivable, accounts receivable, and other receivables

Note receivable From operations Trade receivable At amortized cost Gross carrying amount Less: Allowance for impairment loss Accounts receivable - related parties Other receivables Loans receivable - related parties Other receivables - related parties Business tax refund receivable Others	Dec. 31, 2020 $ 231 $ 806,657 ( 11,434) 795,223 1,163 $ 796,386 $ 8,000 16 8,016 7,469 211 7,680 $ 15,696	Dec. 31, 2019	Dec. 31, 2019
	(	(	$ 4,209 $ 727,403 5,014) 722,389 5,440 $ 727,829 $ 8,000 16 8,016 9,814 1,249 11,063 $ 19,079

Notes and accounts receivable

The average credit period for customers is open account with net 30 to 180 days. In addition to the loss allowance for individual customers’ actual credit impairment loss, the Company refers to historical experience, considers individual customers’ financial status, industries, competitive advantages, and prospects, and divides them into different risk groups and recognizes loss allowances for each group based on their expected loss rates. In addition, a 100% loss allowance is recognized for accounts receivable with an account opened for over 365 days and no other credit guarantee provided.

In order to reduce credit risk, the management of the Company is responsible for the determination of credit limit, credit approval, and other monitoring procedures to ensure that appropriate actions have been taken in the recovery of overdue receivables. In addition, the Company reviews the recoverable amount of the receivables one by one at the balance sheet date to ensure that the appropriate impairment loss is recognized for uncollectible receivables. With that, the management believes the Company’s credit risk has been significantly reduced.

The Company adopts the simplified approach of IFRS 9 to recognize the loss allowance for accounts receivable based on the lifetime ECLs.

If there is evidence that the counterparty is facing serious financial difficulties and the Company cannot reasonably expect to recover the amount, e.g., the counterparty is in liquidation, the Company directly writes off the relevant accounts receivable, but will continue to try to collect the receivable. The recovered amount is recognized in profit or loss.

The aging analysis of notes and accounts receivable is as follows: Dec. 31, 2020

Dec. 31, 2020
Gross carrying amount Loss allowance (lifetime ECLs) Amortized cost	O/A 1–120 days $ 648,090 - $ 648,090		121–180 days $ 145,067 - $ 145,067		181–365 days $ 7,056 3,596) $ 3,460	Over 365 days $ 7,838 ( 7,838) $ -		Total
				(		(	(	$ 808,051 11,434) $ 796,617

181 -

Dec. 31, 2019

XI.

O/A 1–120 days Gross carrying amount $ 625,817 Loss allowance (lifetime ECLs) - ( Amortized cost $ 625,817 The above is an aging analysis based o The information on the movements in Opening balance Impairment loss for the current year Closing balance Inventories Finished goods Work in process Raw materials		121–180 days 181–365 days Over 365 days Total $ 106,526 $ 3,980 $ 729 $ 737,052 305) ( 3,980) ( 729) ( 5,014) $ 106,221 $ - $ - $ 732,038 n the account opening date. the loss allowance for notes and accounts receivable is as follows: 2020 2019 $ 5,014 $ 5,014 6,420 - $ 11,434 $ 5,014 Dec. 31, 2020 Dec. 31, 2019 $ 239,707 $ 237,843 272,401 225,903 139,070 116,263 $ 651,178 $ 580,009

The inventory-related costs of sales in 2020 and 2019 were NT$1,898,699,000 and NT$1,785,983,000, respectively.

The cost of sales for 2020 and 2019 included the inventory valuation losses of NT$14,250,000 thousand and NT$0, respectively.

XII.

Non-current assets held for sale

Non-current assets held for sale
Non-current assets held for sale	Dec. 31, 2020 $ -	Dec. 31, 2019
		$ 2,833

The actual selling price exceeded the carrying amount of the relevant net assets, so when these units were classified as non-current assets held for sale, there was no impairment loss that shall be recognized. The Company signed a property sale and purchase agreement with a non-related party in December 2019 to dispose of the Company’s land and buildings at Linsen Road, Hsinchu City, at a price of NT$3,700,000 (without deduction of business tax and other disposal costs of NT$256,000), and disposal procedure was completed in February 2020. The land and buildings were originally accounted for under investment property, and were reclassified as non-current assets held for sale on December 31, 2019, and presented on a separate line in the consolidated balance sheet, and there was no impairment loss that shall be recognized during the reclassification. From January 1, 2020 to December 31, 2020, the Company recognized the depreciation expense of the non-current assets held for sale of NT$3,000 and the gains on disposal of the non-current assets held for sale of NT$614,000. Please refer to Note 26.

XIII. Investments accounted for using equity method

I. Investments accounted for using equity method
Investment in subsidiaries (I) Investments in associates (II) (I) Investment in subsidiaries TEK Holding Co., Ltd. Long Benefit Investment Co., Ltd. Keeper Technology Xu Qi Co., Ltd. Less: Accumulated impairment	Dec. 31, 2020 $ 910,402 124,364 $ 1,034,766 Dec. 31, 2020 $ 468,162 417,967 32,577 3,232 921,938 ( 11,536) $ 910,402	Dec. 31, 2019
		$ 645,020 123,064 $ 768,084 Dec. 31, 2019
	(	(	$ 290,279 332,431 30,615 3,231 656,556 11,536) $ 645,020

182 -

Percentage of ownership interests and voting rights

Name of Subsidiary TEK Holding Co., Ltd. Long Benefit Investment Co., Ltd. Keeper Technology Xu Qi Co., Ltd.	Dec. 31, 2020 100.00% 100.00% 21.43% 94.44%	Dec. 31, 2019
		100.00% 100.00% 21.43% 94.44%

Please refer to Note 36 for the details of the investment in subsidiaries indirectly held by the Company.

(II)

As stated in Note 32, the Company provides financial guarantees for subsidiaries’ bank loans. Investments in Associates

Investments in Associates
Material associates Hsinjing Holding Co. Ltd. (Hsinjing) Associates that are not individually material Less: Accumulated impairment	Dec. 31, 2020 $ 122,583 5,991 128,574 ( 4,210) $ 124,364	Dec. 31, 2019
	(	(	$ 121,783 5,491 127,274 4,210) $ 123,064

Material associates The Company's percentages of ownership interests and voting rights in associates at the balance sheet date are as follows:

Percentage of ownership and voting rights Company name Dec. 31, 2020 Dec. 31, 2019 Hsinjing (formerly known as

Tynsolar) 22.79% 22.90%

The Company had substantive control over Hsinjing before June 20, 2019, and was classified as a subsidiary; it later judged that the Company had no substantive ability to dominate relevant activities of Hsinjing’s board of directors and management regarding important decisions since June 20, 2019. As a result, the Company lost control, and from the date of loss of control (regarded as the date of disposal), it ceased to include Hsinjing in the consolidated statements, and the fair value of its remaining investment was reclassified to the cost of investment in the associates. See Note 29 for details.

The Company continued to dispose of Hsinjing’s shares in 2020, resulting in a decrease in the ownership to 22.79%, but it still had a significant influence over the company.

Refer to Table 4 in Note 36. “Information on Investees” for the nature of business, principal places of business, and countries of incorporation of the associates above.

The Company adopts the equity method to measure the above-mentioned associate. For investments using the equity method and the Company's share of profits and losses and other comprehensive income on the associate, with the exception of associates that are not individually material that are calculated based on financial statements that have not been audited by CPAs, the rest are calculated based on financial statements that have been audited by CPAs. However, the management of the Company believes that the fact that the above-mentioned investee has not been audited by CPAs does not have a significant impact.

The information on Level 1 fair value of associate with open market quotes is as follows:

Company name Dec. 31, 2020 Dec. 31, 2019 Hsinjing $ 782,050 $ 171,301

On February 27, 2020, Tynsolar’s board of directors passed a resolution to suspend the trading of stocks on Taipei Exchange, and established Hsinjing by means of share swap. The Company received Hsinjing’s shares swapped from Tynsolar’s on March 2, 2020, with the ownership percentage remaining unchanged.

The following aggregate financial information on the material associate in 2020 and 2019 is prepared on the basis of IFRSs and has already reflected the adjustments made when the equity method is adopted.

183 -

Hsinjing Dec. 31, 2020 Current assets $ 715 non-current assets 509,785 Current liabilities ( 16,355 ) non-current liabilities - Equity $ 494,145 2020 Operating income $ - Net loss of the current year $ 5,119 Other comprehensive income ( 219) Total comprehensive income $ 4,900 Cash flows Operating activities ( $ 2,392 ) Investing activities ( 13,589 ) Financing activities 14,000 Net cash inflow (outflow) ($ 1,981) Aggregate information on associates that are not individually material 2020 The Company’s share of Net income of the continuing operations $ 500	Dec. 31, 2019	Dec. 31, 2019
	( (	$ 327,043 252,756 78,427 ) 12,131) $ 489,241 2019
	( ( ( (	$ 205,634 $ 59,970 ) 979 $ 58,991) $ 5,393 1,230 ) 2,115) $ 2,048 2019
		$ 338

Refer to Table 4 in Note 36. “Information on Investees” for the nature of business, principal places of business, and countries of incorporation of the associates above.

The Company adopts the equity method to measure the above-mentioned associates that are not individually material, and its share of profits and losses and other comprehensive income is calculated based on financial statements that have not been audited by CPAs.

XIV. Property, plant, and equipment (I) Self-use

Self-use
Cost Balance at January 1, 2020 Additions Disposal Reclassification Balance at December 31, 2020 Accumulated depreciation and impairment Balance at January 1, 2020 Depreciation expense Disposal Reclassification Balance at December 31, 2020 Net amount at December 31, 2020 Cost Balance at January 1, 2019 Additions Disposal Reclassification Balance at December 31, 2019 Accumulated depreciation and impairment Balance at January 1, 2019 Depreciation expense Disposal Reclassification Balance at December 31, 2019 Net amount at December 31, 2019	S	elf-owned land $ 62,273 - - - $ 62,273 $ - - - - $ - $ 62,273 $ 62,273 - - $ 62,273 $ - - - - $ - $ 62,273		Building $ 1,446,006 20,639 7,135 ) 24,032 $ 1,483,542 $ 297,606 83,972 7,135 ) 2) $ 374,441 $ 1,109,101 $ 1,112,513 55,730 1,400 ) 279,163 $ 1,446,006 $ 227,535 71,471 1,400 ) - $ 297,606 $ 1,148,400		Equipment $ 1,764,332 23,891 34,113 ) 8,922 $ 1,763,032 $ 1,351,651 101,325 33,412 ) - $ 1,419,564 $ 343,468 $ 1,548,402 59,252 62,921 ) 219,599 $ 1,764,332 $ 1,327,778 85,014 61,141 ) - $ 1,351,651 $ 412,681		Leased Improvements $ 60,229 - 39,362 ) - $ 20,867 $ 56,828 283 36,327 ) - $ 20,784 $ 83 $ 60,229 - - - $ 60,229 $ 55,957 871 - - $ 56,828 $ 3,401	O	ther Equipment $ 73,629 5,478 5,090 ) 9,108 $ 83,125 $ 58,813 6,679 4,886 ) - $ 60,606 $ 22,519 $ 71,450 5,807 1,659 ) 1,969) $ 73,629 $ 55,475 5,196 1,659 ) 199) $ 58,813 $ 14,816		Total
			( ( ( ( (		( ( ( (		( (		( ( ( ( ( (		( ( ( ( ( (	$ 3,406,469 50,008 85,700 ) 42,062 $ 3,412,839 $ 1,764,898 192,259 81,760 ) 2) $ 1,875,395 $ 1,537,444 $ 2,854,867 120,789 65,980 ) 496,793 $ 3,406,469 $ 1,666,745 162,552 64,200 ) 199) $ 1,764,898 $ 1,641,571

184 -

Depreciation expenses of the property, plant and equipment are calculated on a straight-line basis over their estimated useful lives as shown in the following:

Buildings

Main buildings 15 to 55 years Electromechanical power equipment 8 years Engineering systems 1.5 to 15 years Equipment 1 to 20 years Leased Improvements 9 to 15 years Other Equipment 1 to 17 years

Please refer to Note 33 for the amount of property, plant and equipment pledged for loans.

XV. Lease arrangements

(I) right-of-use asset

. Lease arrangements (I) right-of-use asset
Dec. 31,2020 Right-of-use assets amounts Land $ 85,643 Buildings - Transport Equipment - Other Equipment 1,549 $ 87,192 2020 The additions of the right-of-use assets $ 1,308 Depreciation charge for right-of-use assets Land $ 3,114 Buildings 819 Transport Equipment 190 Other Equipment 538 $ 4,661 (II) lease liabilities Dec. 31,2020 Lease liabilities amounts Current $ 3,007 Non-current $ 85,329 Range of discount rate for lease liabilities is as follows: Dec. 31,2020 Land 1.80% Buildings - Transport Equipment - Other Equipment 1.79%~1.80%	Dec. 31,2019
		$ 88,147 1,637 191 1,398 $ 91,373 2019
	$ 2,254 $ 3,115 1,637 191 614 $ 5,557 Dec. 31,2019
	$ 4,672 $ 87,301 Dec. 31,2019
	1.80% 1.80% 1.90% 1.79%

(III) Material lease-in activities and terms

The Company has leased land and built buildings for offices. The lease term is 37 years. Upon the termination of the lease term, the Company does not have preferential rights to acquire the land and buildings leased, and it is agreed that the Company shall not lease, sublease, or transfer all (including the right to use the parking space) or part of the asset leased, or in other methods in disguise, to third parties without the consent of the lessor.

(IV) Other lease information

without the consent of the lessor. Other lease information
Short-term lease expense Total cash outflow for leases		2020 $ 871 $ 6,478)		2019
	(		(	$ 900 $ 7,405)

185 -

XVI. Investment Property (I) Investment Property

estment Property Investment Property
Cost Balance at January 1, 2020 Balance at December 31, 2020 accumulated depreciation Balance at January 1, 2020 Depreciation expense Balance at December 31, 2020 Net amount at December 31, 2020 Cost Balance at January 1, 2019 Reclassified to held for sale Balance at December 31, 2019 accumulated depreciation Balance at January 1, 2019 Depreciation expense Reclassified to held for sale Balance at December 31, 2019 Net amount at December 31, 2019		Investment	propertythat has been		completed
		Land $ 216,119 $ 216,119 $ - - $ - $ 216,119 $ 217,636 1,517) $ 216,119 $ - - - $ - $ 216,119		Building $ 22,314 $ 22,314 $ 16,051 1,418 $ 17,469 $ 4,845 $ 24,484 2,170) $ 22,314 $ 15,448 1,457 854) $ 16,051 $ 6,263		Total
	(		( (		( (	$ 238,433 $ 238,433 $ 16,051 1,418 $ 17,469 $ 220,964 $ 242,120 3,687) $ 238,433 $ 15,448 1,457 854) $ 16,051 $ 222,382

Investment property includes land and buildings, of which buildings are depreciated on a straightline basis based on 55 years of useful life. All the Company’s investment property is self-owned equity. Due to the infrequent transactions in the comparable market and the inability to obtain reliable alternative fair value estimates for the Company’s investment property, the fair value cannot be determined reliably.

For the amount of investment property pledged for loans, please refer to Note 33.

186 -

XVII. Intangible asset

XVII.	Intangible asset
XVIII.	Computer software Other intangible assets Cost Balance at January 1, 2020 $ 35,151 $ 1,492 Acquired separately 92 - Balance at December 31, 2020 $ 35,243 $ 1,492 Accumulated amortization Balance at January 1, 2020 $ 33,964 $ 244 Amortization expenses 729 86 Balance at December 31, 2020 $ 34,693 $ 330 Net amount at December 31, 2020 $ 550 $ 1,162 Cost Balance at January 1, 2019 $ 35,015 $ 1,492 Acquired separately 136 - Balance at December 31, 2019 $ 35,151 $ 1,492 Accumulated amortization Balance at January 1, 2019 $ 33,225 $ 158 Amortization expenses 739 86 Balance at December 31, 2019 $ 33,964 $ 244 Net amount at December 31, 2019 $ 1,187 $ 1,248 Amortization expenses of the property, plant and equipment are calculated o their estimated useful lives as shown in the following: Computer software Other intangible assets Other assets Dec. 31, 2020 Current Prepayments $ 7,734 Restricted bank demand deposits (Note 33) 87 Others 42 $ 7,863	Other intangible assets	Total $ 36,643 92 $ 36,735 $ 34,208 815 $ 35,023 $ 1,712 $ 36,507 136 $ 36,643 $ 33,383 825 $ 34,208 $ 2,435 n a straight-line basis over 1 to 6 years 16 to 18 years Dec. 31, 2019 $ 6,047 1 22 $ 6,070

(To be Continued)

187 -

(Continued)

XIX. (I)	Non-current Long-term prepayments Refundable deposits Other financial assets-non-current Restricted demand deposits (Note 33) Loan Short-term borrowings Secured borrowings Bank revolving borrowings Unsecured borrowings Credit borrowings (for purchase of materials)	Dec. 31, 2020 $ 624 511 $ 1,135 $ 3,788 Dec. 31, 2020 $ 370,000 85,559 $455,559	Dec. 31, 2019	Dec. 31, 2019
			$ 3,296 573 $ 3,869 $ 3,783 Dec. 31, 2019

				$ 677,000 81,163 $ 758,163

The interest rates of bank borrowings were 0.88%–1.09% and 0.96%–2.94% as of December 31, 2020 and 2019, respectively.

Please refer to Note 33 for details of pledge and security for borrowings.

(II) Long-term borrowings

Long-term borrowings
Unsecured borrowings Loan project for return to Taiwan for investment (2) Secured borrowings Syndicated loan (1) Loan project for return to Taiwan for investment (2) Less: Current portion Long-term borrowings	Dec. 31, 2020 $ 16,400 765,940 112,100 ( 159,040) $ 735,400	Dec. 31, 2019
	(	(	$ - 845,200 - 75,760) $ 769,440

The syndicated loan is a syndicated credit agreement signed between the Company and five participating banks including Bank of Taiwan. In accordance with the relevant terms of the loan agreement, it is stated in the first supplementary agreement for the syndicated loan that the review shall be conducted every six months during the term of the agreement (from November 2017 to November 2022), and the following financial ratios and regulations shall be maintained:
(1) Current ratio: The ratio of current assets to current liabilities, which shall not be less than 100%;
(2) Debt ratio: The ratio of total liabilities to net value of tangible assets, which shall not be higher than 200%;
(3) Interest coverage ratio: The ratio of pre-tax net income plus interest expense and the sum of depreciation and amortization to interest expense, which shall not be less than 300%;
(4) Net value of tangible assets: The net value less the amount of intangible assets, which shall be maintained at NT$3,000,000,000 thousand or more.

The aforementioned financial ratios and regulations shall be calculated based on the annual and semi-annual consolidated financial statements audited/reviewed by CPAs. If the above agreed financial ratios and regulations are not met, adjustments and improvements shall be made before the date of the next issue of the consolidated financial report. The adjustment period shall not be regarded as a breach of the agreement for the time being. The Company and the loan facility management bank may renegotiate the relevant financial ratios, but the renegotiated financial ratios and standards must be approved as resolved by the majority of the participating banks in the agreement.

188 -

each period. The maturity date is November 2020, and the interest rate was 1.79% as of December 31, 2020 and 2019. Please refer to Note 33 for details of pledge and security for borrowings.

The loan project for return to Taiwan for investment is based on the program of "Loan for Welcoming Overseas Taiwanese Businesspeople to Return to Taiwan for Investment" launched by the National Development Fund, Executive Yuan. Since March 2020, the Company has successively taken out medium-term bank loans from domestic banks with maturity dates between October 14, 2024 and December 6, 2036, and the Company shall repay the principal and interest in an amortized manner on a monthly basis. The interest rate of bank loans was 0.37% to 1.00% as of December 31, 2020.

XX. Accounts payable

XXI.

Accounts payable
Accounts payable From operations - non-related parties From operations - related parties Other liabilities Current Other payables Wages, salaries, and bonuses payable Employee remuneration payable Processing expense payable Director remuneration payable Utility bills payable Insurance premium payable Equipment payment payable Pension payable Others Other current liabilities Refund liabilities Custodial receipts contract liability Others Non-current Other liabilities Deferred credits- unrealized gross profit from the sale of long-term investment Guarantee deposits received	Dec. 31, 2020 $ 320,899 755 $ 321,654 Dec. 31,2020 $ 58,596 26,907 22,056 11,532 6,921 6,777 5,124 4,556 25,012 $ 167,481 $ 17,053 5,086 914 681 $ 23,734 $ 3,834 11,692 $ 15,526	Dec. 31, 2019
		$ 248,092 839 $ 248,931 Dec. 31,2019
			$ 52,029 39,985 18,725 3,500 7,244 6,195 2,910 4,208 26,744 $ 161,540 $ - 3,431 - 661 $ 4,092 $ 3,834 3,662 $ 7,496

189 -

XXII. Provisions

Provisions
Non-current Employee benefits (I) Balance at January 1, 2019 Increase for the current year Used in the current year Balance at December 31, 2019 Increase for the current year Used in the current year Balance at December 31, 2020	Dec. 31, 2020 $ 15,428	Dec. 31, 2019
		$ 14,760 Employee benefits
		( (	$ 13,740 2,410 1,390) 14,760 1,879 1,211) $ 15,428

(I) The provisions for employee benefits include the estimates of the employees’ vested long service leave rights and the estimates of the employees’ long service bonuses.

XXIII. Post-employment benefit plans

(I) Defined contribution plans

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

(II) Defined benefit plan

The defined benefit plan adopted by the Company in accordance with the Labor Standards Act is the defined benefit plan under the management of the government of R.O.C. Pension benefits are calculated on the basis of the length of service and average monthly salaries of the 6 months before retirement. The Company contributes an amount, which equals to 2% of each employee’ total monthly salary and wage, which is deposited by the Pension Fund Monitoring Committee in the pension account with the Bank of Taiwan in the name of the committee. Before the end of each year, if the balance in the pension account assessed is inadequate to pay for the retirement benefits for employees who meet the retirement requirements in the following year, the Company will contributes an amount to make up for the difference in a lump sum by the end of March of the following year. The pension account is managed by the Bureau of Labor Funds, Ministry of Labor; the Company has no right to influence the investment management strategy.

The amounts included in the standalone balance sheets in respect of the Company’s defined benefit plan are as follows:

plan are as follows:
Dec. 31, 2020 Present value of defined benefit obligation $ 101,097 Fair value of plan assets ( 53,839) Net defined benefit liability $ 47,258 The changes in net defined benefit liability: Present value of defined benefit obligation Fair value of plan assets Jan. 1, 2019 $ 94,541 ($ 57,198) servicing costs Service cost for the current year 997 - Interest expense (income) 935 ( 564) Recognized in loss (profit) 1,932 ( 564)	Dec. 31, 2019
	$ 93,136 ( 52,979) $ 40,157 Net defined benefit liability
		$ 37,343 997 371 1,368

(To be Continued)

190 -

(Continued)

Remeasurement Return on plan assets (except for the amount included in the net interest) Actuarial losses - Changes in financial assumptions - Experience adjustments Recognized in other comprehensive income Contributions from the employer Benefits paid Dec. 31, 2019 servicing costs Service cost for the current year Interest expense (income) Recognized in loss (profit) Remeasurement Return on plan assets (except for the amount included in the net interest) Actuarial losses - Changes in financial assumptions - Experience adjustments Recognized in other comprehensive income Contributions from the employer Benefits paid Dec. 31, 2020	Present value of defined benefit obligation $ - 2,138 3,197 5,335 - ( 8,672) 93,136 812 664 1,476 - 3,073 6,820 9,893 - ( 3,408) $ 101,097	Fair value of plan assets ( $ 1,981 ) - - ( 1,981) ( 1,908) 8,672 ( 52,979) - ( 374) ( 374) ( 1,916 ) - - ( 1,916) ( 1,978) 3,408 ($ 53,839)	Net defined benefit liability	Net defined benefit liability
	( (	( ( ( ( ( ( ( ( ( (	( ( ( (	$ 1,981 ) 2,138 3,197 3,354 1,908) - 40,157 812 290 1,102 1,916 ) 3,073 6,820 7,977 1,978) - $ 47,258

Due to the pension plans under the Labor Standards Act, the Company is exposed to the following
risks:
Investment risk: The Bureau invests labor pension funds in domestic (foreign) equity securities, debt securities, and bank deposits on its own use and through agencies entrusted. However, the Company’s amount allocated to plan assets is calculated based on the interest rate not lower than the local bank's interest rate for 2-year time deposits.
Interest risk: A decrease in the interest rate in the government bonds will increase the present value of the defined benefit obligation; however, the return on the debt investment through the plan assets will also increase, and the increases will partially offset the effect of the net defined benefit liability.
Salary risk: The present value of the defined benefit obligation is calculated with reference to the future salaries of the participants in the plan. As such, an increase in the salary of the participants in the plan will increase the present value of the defined benefit obligation.
191 -

The actuarial valuations of the present value of the defined benefit obligation were carried out by qualified actuaries. The critical assumptions made on the measurement date are as follows:

Discount rate Salary adjustment rate	Dec. 31, 2020 0.36% 2.50%	Dec. 31, 2019
		0.74% 2.50%

If each of the critical actuarial assumptions is subject to reasonably possible changes, when all other assumptions remain unchanged, the amounts by which the present value of the defined benefit obligation would increase (decrease) are as follows:

would increase (decrease) are as follows:
Discount rate 0.25% increase 0.25% decrease Salary adjustment rate 0.5% increase 0.5% decrease	Dec. 31, 2020 ($ 2,022) $ 2,022 $ 3,943 ($ 3,741)	Dec. 31, 2019
	( (	( (	$ 3,725) $ 3,912 $ 3,725 $ 3,539)

As actuarial assumptions may be correlated, it is unlikely that only a single assumption would occur in isolation of one another, so the sensitivity analysis above may not reflect the actual changes in the present value of the defined benefit obligation.

The expected contributions to the plan for the following year The weighted average duration of the defined benefit obligation	Dec. 31, 2020 $ 1,943 10.8 years	Dec. 31, 2019	Dec. 31, 2019
			$ 1,870 11 years

XXIV. Equity (I) Ordinary shares

ity Ordinary shares
Authorized shares (in thousands) Authorized capital Issued and paid shares (in thousands) Issued capital		Dec. 31, 2020 500,000 $ 5,000,000 300,621 $ 3,006,223		Dec. 31, 2019
				500,000 $ 5,000,000 300,621 $ 3,006,223

The ordinary shares issued, with a par value of NT$10 per share, are entitled to one voting right per share and to the right to receive dividends.

(II) Capital reserves

share and to the right to receive dividends. Capital reserves
May be used to offset a deficit, distributed as cash dividends, or transferred to share capital (1) Shares premium from issuance Premium of corporate bond conversion The difference between the equity price and the book value of acquisition or disposal of subsidiary May be used to offset a deficit only Changes in the net equity of subsidiaries and associates accounted for using equity method (2) Treasury stock transaction Expired employees share option Others (Note)	Dec. 31, 2020 $ 6 28,983 ( 3,064 ) 63,055 37,403 16,410 81,901 $ 224,694	Dec. 31, 2019
	(	(	$ 6 28,983 3,064 ) 68,034 31,632 16,410 81,901 $ 223,902

Note: Reclassified from the difference in the repurchase of the convertible corporate bonds.

192 -
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).
This type of capital surplus is the effect of equity transactions recognized due to changes in the Company’s equity or the adjustment to the capital surplus of the subsidiary accounted for using the equity method by the Company when the Company has not actually acquired or disposed of the equity of the subsidiary.
(III) Retained earnings and dividends policy

According to the earnings distribution policy of the Company’s Articles of Incorporation, if there is a net income after tax at the end of the year, the Company shall pay all taxes in accordance with the law and compensate accumulated losses first, and then allocate 10% as a statutory reserve in accordance with the law unless the statutory reserve has reached the same amount of the Company paid-in capital. Where there are any earnings left, the Company allocates or reverses the special reserve according to laws or regulations or regulations of the competent authority. If there are any earnings remaining, together with the undistributed earnings at the beginning of the same period (including adjustments to the amount of undistributed earnings), the board of directors shall draft an earnings distribution proposal and submit it to the shareholders’ meeting to resolve the distribution of shareholders’ dividends. For information on the policy of the employee compensation and remuneration of directors and supervisors as in the Company's Articles of Incorporation, refer to Note 26 (9) regarding employee compensation and remuneration of directors.

The Company set aside and reversed a special reserve in accordance with the FSC Letters Jin-GuanZheng-Fa No. 1010012865, Jin-Guan-Zheng-Fa No. 1010047490, and Jin-Guan-Zheng-Fa No. 1030006415, as well as the directive, entitled “Questions and Answers for Special Reserves Appropriated Following Adoption of IFRSs”.

The earnings distribution for 2019 and 2018 were approved in the shareholders’ meetings on June 23, 2020, and June 20, 2019, respectively, and the distribution was as follows:

Statutory reserves Appropriated as special reserve Cash dividends Cash dividend per share (NTD)	2019 $ 17,679 12,108 90,187 0.30	2018
		$ 53,782 7,562 360,746 1.20

The Company's board of directors resolved the 2020 earnings distribution on March 25, 2021 as follows:

follows:
Statutory reserves Special reserves Cash dividends Cash dividend per share (NTD)		2020
		$ 28,486 $ 33,220 $ 225,467 $ 0.75

The earnings distribution proposal for 2020 is to be reported at the annual meeting of shareholders that is expected to be held on May 31, 2021.

193 -

(IV) Special reserves

2020 2019 Opening balance $ 76,927 $ 69,365 Appropriated as special reserve Amount debited to other equity items 12,108 7,562 Closing balance $ 89,035 $ 76,927 (V) Other items of equity 1. Exchange Differences in Translating the Financial Statements of Foreign Operations		2019

				2020		2019
		Opening balance	( $	30,757 )	( $	21,662 )
		Incurred in the current year
		Share of subsidiaries and
		associates accounted for
		using equity method		12,285	(	11,368 )
		Relevant income taxes	(	2,457)		2,273
		Closing balance	($	20,929)	($	30,757)
	2.	Unrealized Gain (Loss) on Financial	Assets at Fair Value Through Other Comprehensive Income
				2020		2019
		Opening balance	($	58,279)	($	55,264)
		Incurred in the current year
		through other comprehensive
		income		12,515	(	3,073 )
		Share of subsidiaries
		accounted for using
		equity method		6,913	(	177 )
		Relevant income taxes	(	3,398)		235
		Other comprehensive income for
		the current year		16,030	(	3,015)
		Closing balance	($	42,249)	($	58,279)
(VI)	Treasury stock
			Shares	(Thousands)	Shares	(Thousands)
				2020		2019
	Opening balance			-		-
	Increase for the current year			2,656		-
	Decrease for the current year		(	2,656)		-
	Closing balance			-		-

The treasury shares held by the Company shall not be pledged nor shall be entitled to the rights to dividends and voting rights in accordance with the provisions of the Securities and Exchange Act.

XXV. Revenue

Revenue
Sales revenue		2020 $ 2,200,552		2019
				$ 2,015,660

194 -

Disaggregation of revenue from product contract revenue

Sales revenue is broken down by main products SI components LED components Others Contract balance Accounts receivable (Note 10) Contract liability (listed in Other liabilities) Sales	2020 $ 1,239,199 923,261 38,092 $ 2,200,552 Dec. 31, 2020 Dec. 31, 2019 $ 796,386 $ 727,829 $ 914 $ -	2019	2019
		$ 1,030,919 924,626 60,115 $ 2,015,660 Jan. 1, 2019
products SI components LED components Others Contract balance Accounts receivable (Note 10) Contract liability (listed in Other liabilities) Sales

	$ 727,829 $ -		$ 727,718 $ -

The change in contract liabilities is mainly due to the difference between the point of meeting the performance obligation and the time of payment by the customer.

XXVI. Net income from continuing operations

Net income is from the following items:

(I) Net amount of other gains (losses)

VI. Net income from continuing operations Net income is from the following items: (I) Net amount of other gains (losses)
Losses on disposal of property, plant and equipment Others (II) Interest income Cash in banks Financial assets at amortized cost imputed interest on financing (III) Other income Dividend revenue Insurance claim income Rent income Subsidy income Others (IV) Other gains or losses Net gains on financial assets at FVTPL Gains on disposal of investments accounted for using equity method (Note 29) Gains on disposal of non-current assets held for sale Net foreign exchange losses Indemnify losses Miscellaneous expenditure		2020 $ 3,930 ) 328 $ 3,602 ) 2020 $ 1,978 3,936 179 $ 6,093 2020 $ 10,027 7,470 820 939 2,939 $ 22,195 2020 $ 123,203 5,257 614 38,943 ) 17,053 ) 11,599) $ 61,479		2019
	( (			$ - - $ - 2019
				$ 7,243 12,899 183 $ 20,281 2019
				$ 11,290 - 1,742 5,131 7,233 $ 25,396 2019
	( ( (		( (	$ 137,564 8,333 - 27,921 ) - 1,688) $ 116,288

195 -

(V) Financial costs 2020 Interest on bank loans $ 19,056 Interest on lease liabilities 1,500 Less: The amount of the cost of assets included for meeting the criteria - $ 20,556 Relevant information on capitalization of interest is as follows: 2020 Amount of capitalized interest $ - Interest rate of capitalized interest - (VI) Depreciation and amortization 2020 Property, plant, and equipment $ 192,259 right-of-use asset 4,661 Investment Property 1,418 Non-current assets held for sale 3 Intangible asset 815 Total $ 199,156 An analysis of depreciation by function Operating cost $ 177,100 Operating expenses 21,241 $ 198,341 An analysis of amortization by function Operating cost $ 23 Operating expenses 792 $ 815 (VII) Direct operating expenses of investment property 2020 Direct operating expenses of investment property Property that generates rental income $ - (VIII) Employee benefits expense 2020 Short-term employee benefits $ 485,943 Long-term employee benefits 1,879 Post-employment benefits (Note 23) Defined contribution plans 16,512 Defined benefit plan 1,102 Total employee benefits expense $ 505,436 An analysis by function Operating cost $ 341,079 Operating expenses 164,357 $ 505,436		2019
	(	$ 19,432 1,543 1,926) $ 19,049 2019
		$ 1,926 1.79% 2019
		$ 162,552 5,557 1,457 - 825 $ 170,391 $ 148,695 20,871 $ 169,566 $ 20 805 $ 825 2019
		$ 839 2019
		$ 410,303 2,410 15,698 1,368 $ 429,779 $ 298,472 131,307 $ 429,779

196 -

The employees’ compensation and remuneration of directors for 2020 and 2019 were approved by the board of directors on March 25, 2021 and March 26, 2020, respectively, were as below: Ratio

Ratio
Employee compensation Directors' remuneration Amount		2020		2019
		7% 3%		5% 2%
	2020			2019
	Cash	Stocks $ - -	Cash		Stocks
Employee compensation	$ 26,907 11,532		$ 10,282 3,500		$ - -
Directors' remuneration

If there is a change in the proposed amounts after the annual standalone financial statements were authorized for issue, the differences are recorded as a change in accounting estimate and will be reflected in the following year.

There is no difference between the actual amounts of employees’ compensation and remuneration of directors paid and the amounts recognized in the standalone financial statements for the years ended December 31, 2019 and 2018.

(X)

Foreign exchange gains (losses)

Taiwan Stock Exchange. Foreign exchange gains (losses)
Foreign exchange gains Total foreign exchange losses Net gains (losses)		2020 $ 98,717 137,660) $ 38,943)		2019
	( (		( (	$ 111,664 139,585) $ 27,921)

XXVII. Income tax

(I) Income tax recognized in profit or loss

Major components of tax expense were as follows:

ome tax Income tax recognized in profit or loss Major components of tax expense were as follows:
2020 Tax currently payable Incurred in the current year $ 7,650 Prior years adjustment - Levied on unappropriated earnings - 7,650 Deferred tax Incurred in the current year 31,030 Income tax expense recognized in profit or loss $ 38,680 The adjustment to accounting income and income tax expenses is as follows: 2020 Net income before tax of the current year $ 343,178 Income tax expense calculated based on statutory tax rate for net income tax before tax $ 68,636 Permanent difference ( 47,418 ) ( Levied on unappropriated earnings - Basic tax difference payable 7,650 Unrecognized deductible temporary difference 9,812 Adjustments to income tax expenses of prior years - Income tax expense recognized in profit or loss $ 38,680		2019
		$ - 4,420 658 5,078 6,923 $ 12,001 2019
	(	$ 191,859 $ 38,372 55,538 ) 658 - 24,089 4,420 $ 12,001

197 -

In July 2019, the President of R.O.C. announced the amendment to the Statute for Industrial Innovation, which clearly stipulates that the construction or purchase of specific assets or technologies based on the undistributed earnings from the fiscal year of 2018 may be included as an item debited to the undistributed earnings. When calculating the tax on the undistributed earnings, the Company only deducted the amount of capital expenditure that has actually been used for reinvestment. (II) Income tax recognized in other comprehensive income

(III)

			2020			2019
Deferred tax
Incurred in the current year
- Translation of foreign operations	(	$	2,457 )		$	2,273
- Unrealized gain (loss) on
financial assets at FVTOC	(		3,398)			235
Income tax recognized in other
comprehensive income	(	$	5,855)		$	2,508
Current tax assets and liabilities
	Dec. 31, 2020				Dec. 31, 2019
Current tax assets
Income tax refund receivable		$		-	$	15,968
Current tax liabilities
Income tax payable		$	4,908		$		-

(IV) Deferred tax assets and liabilities

The changes in the deferred tax assets and liabilities are as follows: 2020

2020
Deferred tax assets Temporary difference Impairment losses, including loss allowance Financial assets at FVTOCI Provisions Refund liabilities Defined benefit pension plan Property, plant, and equipment Associate Exchange differences on translating the financial statements of foreign operations Loss carryforwards Deferred tax liabilities Unrealized foreign exchange gains Financial assets at FVTPL		Opening balance	Recognized in profit or loss $ 4,420 - ( 388 ) 3,410 ( 175 ) ( 10 ) ( 25,292 ) - ( 18,035 ) ( 6,290) ($ 24,325) ( $ 4,096 ) 10,801 $ 6,705	Recognized in other comprehensive income		(	Closing balance
		$ 18,317 1,140 3,474 - 3,898 1,374 25,956 7,688 61,847 60,158 $ 122,005 $ 8,339 - $ 8,339		( ( ( (	$ - 3,398 ) - - - - - 2,457) 5,855 ) - $ 5,855) $ - - $ -		$ 22,737 2,258 ) 3,086 3,410 3,723 1,364 664 5,232 37,957 53,868 $ 91,825 $ 4,243 10,801 $ 15,044

198 -

2019

	2019	2019	2019
(V)	Opening balance Recognized in profit or loss (Effect of change in the tax rate included) Recognized in other comprehensive income (including effect of change in the tax rate) Closing balance Deferred tax assets Temporary difference Impairment losses, including loss allowance $ 18,317 $ - $ - $ 18,317 Financial assets at FVTOCI 905 - 235 1,140 Provisions 3,270 204 - 3,474 Defined benefit pension plan 4,005 ( 107 ) - 3,898 Property, plant, and equipment 1,376 ( 2 ) - 1,374 Associate 40,804 ( 14,848 ) - 25,956 Exchange differences on translating the financial statements of foreign operations 5,415 - 2,273 7,688 74,092 ( 14,753 ) 2,508 61,847 Loss carryforwards 53,140 7,018 - 60,158 $ 127,232 ($ 7,735) $ 2,508 $ 122,005 Deferred tax liabilities Unrealized foreign exchange gains $ 9,151 ($ 812) $ - $ 8,339 Deductible temporary difference of deferred tax assets not recognized in the standalone balance sheet Dec. 31, 2020 Dec. 31, 2019 Deductible temporary difference Impairment losses, including loss allowance $ 15,746 $ 21,095 Investment losses - 87,271 $ 15,746 $ 108,366			Closing balance
			$ 21,095 87,271 $ 108,366
(VI) Information on unused loss carryforwards As of December 31, 2020, the information on loss carryforwards is as follows: Balance of unused loss carryforwards Last valid year $ 113,227 2026 84,625 2028 37,747 2029 33,740 2030 $ 269,339
		2026 2028 2029 2030

	Deductible temporary difference Impairment losses, including loss allowance Investment losses	$ 15,746 $ - $ 15,746 $ 1
(VI)	Information on unused loss carryforwards
	As of December 31, 2020, the information on loss carryforwards is as follows:
	Balance of unused loss
	carryforwards	Last valid year
	$ 113,227	2026
	84,625	2028
	37,747	2029
	33,740	2030
	$ 269,339

(VII) Income tax assessments The Company’s profit-seeking enterprise income tax returns up to 2018 had been examined and approved by the tax authorities.

199 -

XXVIII. Earnings per share (EPS)

Earnings per share (EPS)
			Unit:	NT$ Per Share
		2020		2019
Basic earnings per share	$	1.02	$	0.60
Diluted earnings per share	$	1.01	$	0.60
The net income and weighted average number of ordinary shares outstanding in calculating earnings per
share were as follows:
Net income of the current year
		2020		2019
Net income in the computation of diluted
earnings per share	$	304,498	$	179,858
Number of shares			Unit: Thousand Shares
		2020		2019
Weighted average number of ordinary
shares in computation of basic
earnings per share		299,849		300,621
Effect of potentially dilutive ordinary
shares:
Employee compensation		1,816		1,173
Weighted average number of ordinary
shares used in the computation of
diluted earnings per share		301,665		301,794

XXIX. Disposal of investment in subsidiary—loss of control

The Company has lost control of Hsinjing since June 20, 2019 because it no longer had substantive ability to dominate relevant activities of its board of directors and management, and since the date of loss of control (regarded as the day of disposal), it has been reclassified as investment in associates, the remaining fair value is regarded as the cost of the investment in associates upon initial recognition, and a gain of NT$8,333,000 was generated from disposal of the former subsidiary.

XXX. Capital risk management

In accordance with the overall business environment and the Company’s future development, the Company’s capital structure is regularly reviewed by the main management personnel in consideration of external competition, changes in the environment, and other factors. The review includes consideration for various types of capital costs and relevant risks to determine an appropriate capital structure of the Company. The purpose is to satisfy the Company’s requirements for working capital, research and development expenses, and dividend expenditures in the future, while ensuring that the Company can continue to operate, give back to shareholders, and take into account the interests of other stakeholders, and maintaining the best capital structure to enhance shareholders’ value on a long term.

The capital structure of the Company consists of net debt (borrowings less cash and cash equivalents) and equity of the Company (comprising share capital, capital surplus, retained earnings, and other equity items).

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

The key management personnel of the Company reviews the capital structure annually. As part of this review, the key management personnel considers the cost of capital and the risks associated with each class of capital. Under the suggestions of the key management personnel, the Company may pay dividends, issue new shares, buy back shares, and issue new debts or repay old debts to balance the overall capital structure.

XXXI. Financial instruments

(I) Fair value—financial instruments not at fair value

The carrying amount of the Company’s financial assets and liabilities and lease payables measured at amortized cost was close to their fair value in the financial statements at the end of the financial reporting period.

(II) Fair value—financial instruments at fair value on a recurring basis
Degree of fair value measurements
200 -

Dec. 31, 2020

Dec. 31, 2020
Financial assets at FVTPL Domestic listed stocks Foreign unlisted stocks Gold passbook Total Financial assets at FVTOCI Investment in equity instruments - Domestic listed stocks - Stocks listed in emerging stock markets and unlisted stocks Total Dec. 31, 2019 Financial assets at FVTPL Domestic listed stocks Foreign unlisted stocks Gold passbook Total Financial assets at FVTOCI Investment in equity instruments - Domestic listed stocks - Stocks listed in emerging stock markets and unlisted stocks Total	Level 1	Level 2 $ - - - $ - $ - - $ - Level 2 $ - - - $ - $ - - $ -	Level 3 $ - 142,166 - $ 142,166 $ - 32,865 $ 32,865 Level 3 $ - 142,166 - $ 142,166 $ - 15,877 $ 15,877	Total
	$ 214,396 - 15 $ 214,411 $ 6,750 - $ 6,750 Level 1			$ 214,396 142,166 15 $ 356,577 $ 6,750 32,865 $ 39,615 Total
	$ 304,801 - 15 $ 304,816 $ 11,223 - $ 11,223			$ 304,801 142,166 15 $ 446,982 $ 11,223 15,877 $ 27,100

There were no transfers between Level 1 and Level 2 fair value in 2020 and 2019. 2. Reconciliation of Level 3 fair value measurements of financial instruments 2020

2020
Financial asset Opening balance Recognized in other comprehensive income (unrealized gain (loss) on financial assets at FVTOC) Closing balance 2019 Financial asset Opening balance Reclassification Recognized in profit or loss (other gains or losses) (Note 7) Recognized in other comprehensive income (unrealized gain (loss) on financial assets at FVTOC) Closing balance	Financial assetsat FVTPL Equityinstrument $ 142,166 - $ 142,166 Financialassets atFVTPL Equityinstrument $ 306,989 ( 302,873 ) 138,050 - $ 142,166	Financial assets at FVTOCI
		Equityinstrument
		$ 15,877 16,988 $ 32,865 Financial assets at FVTOCI
		Equityinstrument
	(	(	$ 17,057 - - 1,180) $ 15,877

Valuation techniques and inputs applied for Level 3 fair value measurement Investments in domestic and foreign unlisted equity are estimated by the market approach based on the transaction price of comparable targets, and the difference between the evaluation target and the comparable target is considered to estimate the value of the target evaluated using an appropriate multiplier.
201 -
(III) Categories of financial instruments

Categories of financial instruments
Financial asset Financial assets as at FVTPL Financial assets designated as at FVTPL Financial assets at amortized cost (Note 1) Financial assets at FVTOCI Investment in equity instruments Financial liability Amortized cost (Note 2)	Dec. 31, 2020 $ 356,577 1,888,874 39,615 1,850,826	Dec. 31, 2019
		$ 446,982 1,917,513 27,100 2,017,496

Note 1: The balances include financial assets measured at amortized cost, which comprise cash and cash equivalents, notes receivable, accounts receivable, other receivables, other financial assets, and refundable deposits.
Note 2: The balances included financial liabilities measured at amortized cost, which comprise shortterm borrowings, notes payable, other payables, current portion of long-term borrowings, bonds payable, long-term borrowings, and guarantee deposits received.
(IV) Financial risk management objective and policies

The Company's main financial instruments include equity and debt instrument investment, accounts receivable, accounts payable, bonds payable, and borrowings. The Company's financial management department provides services to various business units, coordinates the operations in the domestic and international financial markets, and supervises and manages the financial risks related to the Company's operations by analyzing internal risk reports based on the degree and breadth of risks. These risks include market risk (including currency risk, interest rate risk, and other price risks), credit risk, and liquidity risk. The Company uses derivative financial instruments to avoid risk exposure to mitigate the impact of these risks. The use of derivative financial instruments is regulated by the policies adopted by the Company's board of directors, which are written principles for exchange rate risk, interest rate risk, credit risk, the use of derivative financial instruments and non-derivative financial instruments, and the investment of remaining working capital. Compliance with policies and exposure limits is being reviewed by the internal auditors continuously. The Company does not trade financial instruments (including derivative financial instruments) for speculative purposes.

Market risk

The main financial risks for the Company’s operating activities are the risk of changes in foreign currency exchange rates (see (1) below) and the risk of changes in interest rates (see (2) below). The Company engages in various derivative financial instruments to manage foreign currency exchange rate risk, interest rate risk, and other price risks.

The Company's exposure to the market risk of financial instruments and its management and measurement methods for the risk exposure have remained unchanged.

(1) Exchange rate risk

The Company is engaged in sale and purchase transactions denominated in foreign currencies, which has caused the Company to be exposed to the risk of exchange rate fluctuations. Approximately 85.46% of the Company's sales are not denominated in the functional currency, and approximately 67.07% of the cost is not denominated in the functional currency. The Company's management of the exposure to the exchange rate risk is to use foreign currency options contracts to manage risks within the scope permitted by the policy.

For the carrying amount of monetary assets and monetary liabilities denominated in non-functional currencies at the balance sheet date, please refer to Note 35. Sensitivity analysis

The Company was mainly affected by the fluctuations in the exchange rates of USD, JPY, and CNY.

The following table details the Company’s sensitivity analysis when the New Taiwan dollar (functional currency) increases and decreases by 1% against each relevant foreign currency. The sensitivity to a 1% change in New Taiwan dollars is used when reporting foreign currency risk internally to key management personnel and also represents the management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis only included monetary items in foreign currencies in circulation, and the year-end translation was adjusted with a 1% change in the exchange rates. The positive numbers in the table below indicate the amount by which the net income before tax will be

202 -

reduced when the New Taiwan dollar appreciates by 1% against the relevant currencies; when the New Taiwan dollar depreciates by 1% against the relevant foreign currencies, the net income before tax will be the negative number of the same amount.

Impact of USD Impact of JPY Impact of CNY 2020 2019 2020 2019 2020 2019 Gains (losses) $ 11,845(i) $ 10,620(i) ( $ 1,291)(ii) ( $ 1,207)(ii) $ 4,464(iii) $ 4,361(iii) (i) Mainly derived from the Company's USD-denominated receivables and payables still outstanding at the balance sheet date, against which a cash flow hedge has not been conducted.

(ii) Mainly derived from the Company's JPY-denominated payables still outstanding at the balance sheet date, against which a cash flow hedge has not been conducted.
(iii) Mainly derived from the Company's CNY-denominated receivables and payables still outstanding at the balance sheet date, against which a cash flow hedge has not been conducted.

Sales denominated in US dollars are seasonal. With the higher sales in the fourth quarter, the balance of accounts receivable denominated in USD increased at the end of the year. Therefore, the exposure to the foreign currency risk at the balance sheet date cannot reflect the risk exposure throughout the year.

(2) Interest rate risk Because individual entities within the Company borrow funds at fixed and floating interest rates at the same time, the interest rate risk risks arise. The Company manages the interest rate risk by maintaining an appropriate combination of fixed and floating interest rates.

The carrying amounts of the Company’s financial assets and financial liabilities with exposure to the interest rate risk at the balance sheet date are as follows:

Fair value interest rate risk -Financial assets -Financial liabilities Cash flow interest rate risk -Financial assets -Financial liabilities Sensitivity analysis	Dec. 31, 2020 $ 573,197 316,559 502,067 1,033,440	Dec. 31, 2019
		$ 633,639 558,163 531,422 1,045,200

If the interest rate increased/decreased by 1% and all other variables remain unchanged, the Company’s net income before tax for 2020 and 2019 would have decreased/increased by NT$187,000 and NT$235,000, respectively, mainly due to the Company’s borrowings with variable interest rates. (3) Other price risk

The Company's exposure to the equity price risk is due to the investment in the listed equity securities. The management of the Company manages the risk by holding investment portfolios with different risk factors. The Company's equity price risk is mainly concentrated on Taiwan Stock Exchange’s equity instruments in specific industries. Sensitivity analysis

The sensitivity analysis below is based on the equity price risk exposure at the balance sheet date.

If the equity price increased/decreased by 1%, the profit or loss before tax for 2020 and 2019 would have increased/decreased by NT$2,144,000 and NT$3,048,000 due to the increase in the fair value of financial assets at FVTPL.

Other comprehensive income before tax for 2020 and 2019 would have increased/decreased by NT$68,000 and NT$112,000 due to changes in the fair value of financial assets at FVTOCI.

The Company's sensitivity to price risks decreased for the current year, mainly due to the decrease in the positions exposed to other price risks.

203 -

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 Company. At the balance sheet date, the Company’s maximum exposure to credit risk which will cause a financial loss to the Company due to failure of counterparties to perform an obligation and financial guarantees provided by the Company could arise from:

(1) The carrying amount of the financial assets recognized in the standalone balance sheet.
(2) The amount of contingent liabilities arising from the financial guarantee provided by the Company.

The policy adopted by the Company is to conduct transactions only with reputable counterparties, and obtain sufficient guarantees under necessary circumstances to reduce the risk of financial losses due to defaults. The Company only conducts transactions with companies whose ratings are equal to or higher than the investment grade Such information is provided by independent rating agencies; if such information is not available, the Company will refer to other publicly available financial information and mutual transaction records to rate its major customers. The Company continuously monitors credit risk and the credit rating of its counterparties, and distributes the total transaction amount to customers with qualified credit ratings, and controls the exposure to credit risk through the counterparty credit limits that are reviewed and approved by the financial management department every year.

In order to mitigate the credit risk, the management of the Company assigns a dedicated team responsible for the determination of credit limits, credit approval, and other monitoring procedures to ensure that appropriate actions have been taken in the recovery of overdue receivables. In addition, the Company reviews the recoverable amount of the receivables one by one at the balance sheet date to ensure that the appropriate impairment loss is recognized for uncollectible receivables. With that, the management believes the Company’s credit risk has been significantly reduced.

The credit risk on liquid funds and derivatives is not high because the counterparties are banks with high credit ratings assigned by international credit-rating agencies.

The Company's customer base is large and unrelated, so the concentration of credit risk is not
high.
Liquidity risk

The Company manages and maintains sufficient cash and cash equivalents to support its operations and mitigate the impact of cash flow fluctuations. The management of the Company monitors the use of the bank financing facilities and ensures compliance with the terms of the borrowing terms.

Bank borrowings were an important source of liquidity for the Company. As of December 31, 2020 and 2019, for the Company’s unutilized credit facilities, please refer to (2) below for description of financing facilities.

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

The remaining contractual maturity analysis of non-derivative financial liabilities was based on the earliest date at which the Company might be required to repay and was compiled based on the undiscounted cash flows of financial liabilities (including principal and estimated interest). Therefore, the bank borrowings with a repayment on demand clause were included in the earliest time period, regardless of the probability of exercise of the right by banks. The maturity analysis of other non-derivative financial liabilities was compiled in accordance with the agreed repayment date. Dec. 31, 2020

Dec. 31, 2020
Non-derivative financial liabilities Non-interest-bearing liabilities Note payable and accounts payable Other payables (Note) Floating interest rate instruments Fixed interest rate instruments lease liabilities	Less than 1 year $ 321,654 56,241 298,040 316,559 4,571 $ 997,065		Over 1 year
			$ - - 735,400 - 114,523 $ 849,923

204 -

Further information on the analysis of lease liabilities maturity is as follows (undiscounted total amount):

Less than One Year	1-5	Years	5-10Years 10-15Years	5-10Years 10-15Years	5-10Years 10-15Years	15-20Years	15-20Years	Over 20 Years	Over 20 Years
lease liabilities $ 4,571	$	14,398	$	16,193 $	16,193	$	16,193	$	51,546
Dec. 31, 2019
			Less	than 1 year			Over 1 year
Non-derivative financial
liabilities
Non-interest-bearing liabilities
Note payable and
accounts payable			$	248,931			$		-
Other payables (Note)				52,753					-
Floating interest rate
instruments				200,000				845,200
Fixed interest rate instruments				558,163					-
lease liabilities				4,672				87,301
Financial guarantee liability				119,930					-
			$	1,184,449			$	932,501

Further information on the analysis of lease liabilities maturity is as follows (undiscounted total amount):

Less than One[Over 20 Years ] Year 1-5 Years 5-10 Years 10-15 Years 15-20 Years lease liabilities $ 6,288 $ 15,081 $ 16,102 $ 16,102 $ 16,102[$ ] 54,480 Note: The other payables mentioned above do not include salaries and bonuses payable, pensions payable, insurance premiums payable, directors' remuneration payable, and employee compensation payable.

The amount of floating interest rate instruments for the aforementioned non-derivative financial assets and liabilities will change due to the difference between the floating interest rate and the interest rate estimated at the balance sheet date.

The financial guarantee contract amount above is the maximum amount that the Company may have to pay to fulfill the guarantee obligation if the holder of the financial guarantee contract asks the guarantor to pay for the full guarantee amount. However, based on the expectations at the balance sheet date, the Company believes that it is unlikely that such contract payments will be paid.

(2) Financing facilities

Financing facilities
Unsecured bank borrowings facility (review every year) - Amount used - Amount unused Secured bank borrowings facility - Amount used - Amount unused		Dec. 31, 2020 $ 101,959 1,100,441 $ 1,202,400 $ 1,248,040 1,402,460 $ 2,650,500		Dec. 31, 2019
				$ 308,163 721,737 $ 1,029,900 $ 1,295,200 1,078,300 $ 2,373,500

205 -

XXXII. Related party transaction

Details of transactions between the Company and related parties are as follows. (I) Related party name and category

Related PartyName Related PartyCategory
Long Benefit Investment Co., Ltd. (Long Benefit) Subsidiary
Keeper Technology Co. Ltd. (Keeper Technology) Subsidiary
Xu Qi Co., Ltd. (Xu Qi) Subsidiary
Yuanmao Opto-electronic Technology (Wuhan) Co., Ltd. Sub-subsidiary
(Yuanmao)
Uni Top Optical Corporation (Uni Top Optical) Associate by investment using the
equity method
Hsinjing Holding Co. Ltd. (Hsinjing) Associate by investment using the
equity method
Tynsolar Corporation (Tynsolar) Subsidiary of Hsinjing (Note 1)
Dingyu Solar Co., Ltd. (Dingyu) Subsidiary of Hsinjing (Note 1)
Suncruise Tech Co., Ltd. (Suncruise Tech) Subsidiary of Hsinjing (Note 1)
Xu Guang Optoelectronics Co., Ltd.(Xu Guang) Sub-subsidiary of Hsinjing (Note 1)
Summit-tech Resource Corp. (Summit-tech) Substantive related party
Megacrystal Co. Ltd. (Megacrystal) Substantive related party
Li Zhan Optoelectronics Co., Ltd.(Li Zhan) Substantive related party
Note 1: The Company judged that it has had no substantive ability to dominate relevant activities of
Hsinjing since June 20, 2019, and therefore it lost control over Hsinjing, making Hsinjing no
longer an entity included in the consolidated financial statements, and Hsinjing was terminated
from included in the consolidated statements on the date of disposal. Therefore, the
subsidiaries and sub-subsidiaries of Hsinjing are listed as related parties of an associate.
Note 2: The Company judged that it has had no substantive ability to dominate relevant activities of
Hsinjing Since June 20, 2019, and therefore it lost control over Hsinjing, making Hsinjing no
longer an entity included in the consolidated financial statements, and Hsinjing was terminated
from included in the consolidated statements on the date of disposal, and the balance of
relevant assets/liabilities of its relevant subsidiaries will no longer be disclosed.

(II)	Operating income
	Line Item	Category of related party			2020			2019
	Sale	Sub-subsidiary		$		6,411	$	10,137
		Associate				2		13,309
		Substantive related party				10,743		16,685
				$		17,156	$	40,131
(III)	Purchase of goods
	Category of related party		2020					2019
	Substantive related party		$	7,663			$	4,266
(IV)	Receivables from related parties (excluding loans to		related parties)
	Line Item	Category of related party		Dec.		31, 2020	Dec. 31, 2019
	Accounts receivable -	Sub-subsidiary
	related parties			$		260	$	5,440
		Substantive related party				900		-
		Associate				3		-
						1,163		5,440
	Other receivables - related
	parties	Subsidiary				8,016		8,016
				$		9,179	$	13,456

The Company's selling prices to related parties are equivalent to those to ordinary customers, and the payment terms are implemented in accordance with the Company's payment policy. No guarantee is received for the accounts receivable from related parties still outstanding. No loss allowance was provided for accounts receivable from related parties in 2020 and 2019.

206 -
(V) Payables to related parties (excluding loans from related parties)

Line Item Accounts payable - related parties Other payables	Category of related party Substantive related party Sub-subsidiary Substantive related party		Dec. 31, 2020 $ 755 $ 11,184 1,052 $ 12,236		Dec. 31, 2019
					$ 839 $ - - $ -

The Company's purchase price from and processing contracted to related parties are handled in accordance with the general purchase terms; the payment period to related parties and non-related parties is implemented in accordance with the Company's payment policy.

No guarantee is provided for the balance of the outstanding accounts payable to related parties. (VI) Loans to related parties

Loans to related parties
Category of related party Other receivables Subsidiary Keeper Technology Category of related party Interest income Subsidiary	Dec. 31, 2020 $ 8,000 2020 $ 179	Dec. 31, 2019
			$ 8,000 2019
			$ 183

The Company provides loans to subsidiaries, at interest rates similar to the market interest rates. As of December 31, 2020 and 2019, there had been interest uncollected, both in the amount of NT$16,000, accounted for under other receivables.

(VII) Acquisition of property, plant, and equipment

accounted for under other receivables. Acquisition of property, plant, and equipment
Price of acquisition Category of related party 2020 Associate $ 9,537 Other income Line Item Category of related party 2020 Rent income Subsidiary Long Benefit $ 34 Associate Suncruise Tech $ - Hsinjing - $ - Other income Subsidiary $ 178 Sub-subsidiary 16 $ 194	Price of acquisition
			2019
Associate Other income Line Item Rent income Other income	$		$ - 2019

		$ 34	$ 34 $ 126 253 $ 413 $ 182 22 $ 204
		$ - -
		$ -
		$ 178 16
		$ 194

(VIII) Other income
(IX) Contract processing

The processing fees to the Company's sub-subsidiary Yuanmao contracted to process products for the Company in 2020 and 2019 were NT$112,030,000 and NT$120,797,000, respectively. As of December 31, 2020 and 2019, the outstanding balance was NT$11,184,000 and NT$11,650,000, respectively, accounted for under the processing expense payable.

The processing fees to the Company's other related party Summit-tech contracted to process products for the Company in 2020 and 2019 were NT$10,404,000 and NT$7,794,000, respectively. As of December 31, 2020 and 2019, the outstanding balance was NT$1,052,000 and NT$848,000, respectively, accounted for under the processing expense payable.

(X) Maximum endorsement/

207 -

(XI)	Endorsement/guarantee provided Category of related party Dec. 31, 2020 Dec. 31, 2019 Subsidiary guarantee amount $ - $ 124,930 Transaction Amounts - ( 119,930) $ - $ 5,000 Compensation of key management personnel The total compensation of directors and other key management personnel is as follows: 2020 2019 Short-term employee benefits $ 34,557 $ 25,724 Post-employment benefits 650 667 $ 35,207 $ 26,391	Dec. 31, 2019	Dec. 31, 2019
			$ 25,724 667 $ 26,391

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

XXXIII. Pledged Assets

The following assets have been provided as collateral for financing loans and security for long-term and short-term loans for purchase of raw materials, bonds payable, and tariff of imported raw materials:

Financial assets at amortized cost - current Financial assets at amortized cost - non- current Restricted demand deposits (recognized in other current assets and other financial assets - non-current) Land (including investment property) Buildings (including investment property)		Dec. 31, 2020 $ 512,760 6,566 3,875 216,118 611,529 $ 1,350,848		Dec. 31, 2019
				$ 587,144 6,505 3,784 216,118 629,839 $ 1,443,390

XXXIV. Significant Contingent Liabilities and Unrecognized Commitments

Except for those already mentioned in other notes, the Company's significant commitments as of the
balance sheet date are as follows:
(I) As of December 31, 2020 and 2019, the amount of unused letters of credit issued by the Company for imported raw materials and machinery and equipment was equivalent to NT$17,849,000 and NT$25,736,000, respectively.
(II) As of December 31, 2020, the total price of the uncompleted important equipment and engineering procurement contracts of the Company was equivalent to NT$91,656,000; NT$39,699,000 had been paid (recognized in prepayments for equipment), and the remaining NT$51,957,000 had not been paid.

XXXV. Significant assets and liabilities denominated in foreign currencies

The following information is aggregated in foreign currencies other than the Company’s functional currency. The disclosed exchange rates refer to the exchange rates at which the foreign currencies were converted into functional currencies. The significant assets and liabilities denominated in foreign currencies were as follows:

Dec. 31, 2020

were as follows: Dec. 31, 2020
Foreign currency asset Monetary items USD JPY CNY Foreign currency liabilities Monetary items USD JPY CNY	Foreign currency $ 42,802 2,296 104,382 $ 1,211 469,577 2,384	Exchange rate 28.48 0.28 4.38 28.48 0.28 4.38	Carrying amount
			$ 1,219,009 634 456,880 $ 34,495 129,744 10,433

208 -

Dec. 31, 2019

Dec. 31, 2019
	Foreign currency			Exchange rate	Carrying amount
Foreign currency asset
Monetary items
USD	$	35,996		29.98	$	1,079,173
JPY		2,423		0.28			669
CNY		103,701		4.31			446,431
Foreign currency liabilities
Monetary items
USD			573	29.98			17,181
JPY		439,794		0.28			121,383
CNY		2,405		4.31			10,352
The (unrealized) gains and losses on		foreign	currency exchange with a material impact are as follows:
	2020				2019
		Net Foreign Exchange Gain			Net	Foreign Exchange Gain
Foreigncurrency	Exchangerate		(Loss)	Exchangerate			(Loss)
USD	28.48 (USD:NTD)	$	2,067	29.98 (USD:NTD)		( $	16,888 )
JPY	0.28 (JPY:NTD)	(	1,412 )	0.28 (JPY:NTD)			7,051
CNY	4.38 (CNY:NTD)		20,553	4.31 (CNY:NTD)			3,175
Others			6				2,603
		$	21,214			($	4,059)

XXXVI. Additional Disclosures

(I) Information on significant transactions and (II) investees:
Financing provided to others. (Table 1)
Endorsements/guarantees provided. (Table 2)
Marketable securities held (excluding investment in subsidiaries, associates, and jointly controlled entities): Table 3
Marketable securities acquired or sold at costs or prices at least NT$300 million or 20% of the paid-in capital: None.
Acquisition of individual property at costs of at least NT$300 million or 20% of the paid-in capital: None.
Disposal of individual property at costs of at least NT$300 million or 20% of the paid-in capital: None.
Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital: None.
Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital: None.
Trading in derivative instruments: None. 10. Information on investees: Table 4.
(III) Information on investments in mainland China:
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, current profit or loss and investment gains and losses recognized, 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 5.
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 6.
- (1) The amount and percentage of purchase.
- (2) The amount and percentage of sales.
(IV) Information on major shareholders: List of all shareholders with ownership of 5 percent or greater showing the names and the number of shares and percentage of ownership held by each shareholder: None.
209 -

TYNTEK Corporation Financing provided to others For the Year Ended December 31, 2020

TYNTEK Corporation Financing provided to others For the Year Ended December 31, 2020	TYNTEK Corporation Financing provided to others For the Year Ended December 31, 2020	TYNTEK Corporation Financing provided to others For the Year Ended December 31, 2020	TYNTEK Corporation Financing provided to others For the Year Ended December 31, 2020	TYNTEK Corporation Financing provided to others For the Year Ended December 31, 2020	TYNTEK Corporation Financing provided to others For the Year Ended December 31, 2020	TYNTEK Corporation Financing provided to others For the Year Ended December 31, 2020	TYNTEK Corporation Financing provided to others For the Year Ended December 31, 2020	TYNTEK Corporation Financing provided to others For the Year Ended December 31, 2020	TYNTEK Corporation Financing provided to others For the Year Ended December 31, 2020	TYNTEK Corporation Financing provided to others For the Year Ended December 31, 2020	TYNTEK Corporation Financing provided to others For the Year Ended December 31, 2020	TYNTEK Corporation Financing provided to others For the Year Ended December 31, 2020
Table 1													Unit: NTD thousands
Serial No.	Lender	Borrower	Financial Statement Account	Related Party Status	Maximum Balance for the Period	Ending balance	Transaction Amounts	Interest Rate (Note 3)	Category of Financing Provided	Business Transaction Amounts	Reasons for Necessity of Short- term Financing	Loss Allowance	Collateral		Limit of Financing to Individual Borrower (Note 1)	Total Limit of Financing Provided (Note 2)	Remarks
													Name	Value
0	TYNTEK Corporation	Keeper Technology	Other receivables - related parties	Yes	$ 20,000	$ 10,000	$ 8,000	Floating interest rate	Need for short- term financing	$ -	Working capital, and repayment of borrowings	$ -	－	$ -	$ 390,888	$ 781,776

Note 1: TYNTEK Corporation's limit of financing to individual borrowers does not exceed 10% of the net value stated in the most recent financial statements reviewed/audited by CPAs.

TYNTEK Corporation Endorsement/guarantee provided For the Year Ended December 31, 2020

		TYNTEK Corporation Endorsement/guarantee provided For the Year Ended December 31, 2020	TYNTEK Corporation Endorsement/guarantee provided For the Year Ended December 31, 2020	TYNTEK Corporation Endorsement/guarantee provided For the Year Ended December 31, 2020	TYNTEK Corporation Endorsement/guarantee provided For the Year Ended December 31, 2020	TYNTEK Corporation Endorsement/guarantee provided For the Year Ended December 31, 2020	TYNTEK Corporation Endorsement/guarantee provided For the Year Ended December 31, 2020	TYNTEK Corporation Endorsement/guarantee provided For the Year Ended December 31, 2020	TYNTEK Corporation Endorsement/guarantee provided For the Year Ended December 31, 2020	TYNTEK Corporation Endorsement/guarantee provided For the Year Ended December 31, 2020	TYNTEK Corporation Endorsement/guarantee provided For the Year Ended December 31, 2020	TYNTEK Corporation Endorsement/guarantee provided For the Year Ended December 31, 2020	TYNTEK Corporation Endorsement/guarantee provided For the Year Ended December 31, 2020	TYNTEK Corporation Endorsement/guarantee provided For the Year Ended December 31, 2020
Table 2		Unit: In Thousands of New Taiwan Dollars/Foreign Currencies
Serial No. (Note 1)	Company Name	Guaranteed Party		Maximum Endorsement/Guarant ee Amount for Individual Party (Note 3)	Maximum Endorsement/Guarant ee Balance (Note 4)	Endorsement/Guarant ee Balance at the End of Year (Note 5)	Transaction Amounts (Note 6)	Endorsement Amount with Assets Pledged	Ratio of Accumulated Endorsement/Guara ntee to Net Value of the Latest Financial Statements (%)	Maximum Endorsement/Guarant ee Amount	Endorsement /Guarantee form Parent to Subsidiary (Note 7)	Endorsement /Guarantee form Subsidiary to Parent (Note 7)	Endorsement /Guarantee to Entity in Mainland China (Note 7)	Remarks
		Company name	Relationship (Note 2)
0	TYNTEK Corporation	Yuanmao Opto-electronic Technology (Wuhan) Co., Ltd. Keeper Technology	2 2	$ 781,776 781,776	$ 99,680 (US$ 3,500,000) 20,000	$ - -	$ - -	$ - -	- -	$ 1,954,439 1,954,439	Y Y	N N	Y N	Note 3 Note 3

Note 1: The description of the code column is as follows:

(1) The Company is coded “0”.

(2) The investees are coded sequentially beginning from “1” by each individual company.

Note 2: There are 7 types of relationships between the endorser/guarantor and the endorsed/guaranteed party as follows, just indicate the type: (1) Companies with business dealings.

(2) A company in which the Company directly or indirectly holds more than 50% of the voting shares.

(3) A company directly or indirectly holds more than 50% of the voting shares of the Company.

(4) A company in which the Company directly or indirectly holds more than 90% of the voting shares.

(5) Companies that need to purchase insurance for each other in the same industry or as co-builders in accordance with contractual provisions based on the needs for contracting construction projects.

(6) A company that is endorsed and guaranteed by all shareholders of the Company based on their ownership percentage due to a joint investment relationship.

(7) The companies that are engaged in joint and several guarantees for the performance of a pre-sale property contract in accordance with the Consumer Protection Act.

Note 4: The maximum balance of the endorsement/guarantee provided to others in the current year.

Note 6: The actual drawdown amount by the endorsed/guaranteed company within the range of the endorsement/guarantee balance shall be entered. Note 7: “Y” shall only be entered for those that belong to endorsement/guarantee from publicly listed parent company to subsidiary, from subsidiary to publicly listed parent company, or to entity in mainland China.

210 -

Table 3

TYNTEK Corporation

Marketable Securities Held at the End of Year

Dec. 31, 2020

Unit: In Thousands of New Taiwan Dollars/Thousand Units/Thousand Shares

Holding Company Name	Type and Name of Marketable Securities	Relationship with the Holding Company	Financial Statement Account	March31,2020	March31,2020	March31,2020	March31,2020	Remarks
				Number of Shares/Units	Carrying amount	Percentage of Ownership	Market price
TYNTEK Corporation Long Benefit Investment Co., Ltd.	Unity Opto/stock/common stock First Commercial Bank/gold passbook Para Light Electronics Co., Ltd./stock/common stock Fittech Co., Ltd./stock/common stock Fujian Zhaoyuan Photoelectric Co., Ltd. Unity Opto/stock/common stock Para Light Electronics Co., Ltd./stock/common stock Chipwell Tech Corporation/stock/common stock Brightek Optoelectronic Co., Ltd./stock/common stock Para Light Electronics Co., Ltd./stock/common stock Hanpin Electron Co., Ltd./stock/common stock Elite Advanced Laser Corporation/stock/common stock ITEQ Corporation/stock/common stock Fittech Co., Ltd./stock/common stock TAI-TECH Advanced Electronics Co., Ltd./stock/common stock Lite-On Technology Corporation/stock/common stock Para Light Electronics Co., Ltd./stock/common stock Chipwell Tech Corporation/stock/common stock	None None None Investee with 1.91% of shares held Investee with 4.28% of shares held None None Investee with 2.20% of shares held Investee with 1.68% of shares held None None None None Investee with 2.48% of shares held None None None Investee with 0.63% of shares held	Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Non- current Financial assets at FVTOCI - current Financial assets at FVTOCI - current Financial assets at FVTOCI - non- current Financial assets at FVTOCI - non- current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTOCI - current Financial assets at FVTOCI - non- current	264 - 1 1,284 - 836 622 330 1,020 1,194 220 70 11 1,667 23 30 1,275 94	$ - 15 15 214,381 142,166 - 6,750 6,580 26,285 12,950 6,853 4,879 1,489 278,389 2,237 1,494 13,829 2,789	- - - 1.91 4.28 - - 2.2 1.68 - - - - 2.48 - - - 0.63	$ - 15 15 214,381 142,166 - 6,750 6,580 26,285 12,950 6,853 4,879 1,489 278,389 2,237 1,494 13,829 2,789	Note 1 Note 1

(To be Continued)

211 -

(Continued)

Holding Company Name	Type and Name of Marketable Securities	Relationship with the Holding Company	Financial Statement Account		March31,2020	March31,2020		Remarks
				Number of Shares/Units	Carrying amount	Percentage of Ownership	Market price
Long Benefit Investment Co., Ltd.	Chipstar Tech Corporation/stock/common stock TEK Holding Co., Ltd. Yuanmao Opto-electronic Technology (Wuhan) Co., Ltd.	Investee with 10.95% of shares held First Commercial Bank/structured deposit Industrial Bank/wealth management products	Financial assets at FVTOCI - non- current Financial assets at FVTPL - Current Financial assets at FVTPL - Non- current	698 - -	$ 6,099 88 221,937	10.95 - -	$ 6,099 88 221,937

Note 1: Because the public company Unity Opto Technology co., Ltd. (hereinafter referred to as Unity Opto) failed to publish its financial statements for 2019 within the specified time limit, it was sanctioned by the Taiwan Stock Exchange on April 1, 2020, and it stock was stopped to be traded starting from April 7, 2020. After prudent evaluation, the Company recognized all shares of Unity Opto held as financial asset valuation losses.

Note 2: Long Benefit had sold all the shares of Hsinjing before January 17, 2020.

212 -

Table 4

TYNTEK Corporation

Information on Investees

For the Year Ended December 31, 2020

Unit: In Thousands of New Taiwan Dollars/Thousand Shares

Investor	Investor Company	Location	Main Businesses and Products	Investment Amount	Investment Amount	As of March 31, 2020	As of March 31, 2020	As of March 31, 2020	Gains (losses) on investee	Gains (losses) on investment recognized by the Company	Remarks
				March 31, 2020	March 31, 2019	Shares	Percentage (%)	Carrying amount
TYNTEK Corporation TEK Holding Co., Ltd. Keyway International L.L.C. Long Benefit Investment Co., Ltd.	TEK Holding Co., Ltd. Long Benefit Investment Co., Ltd. Hsinjing Holding Co., Ltd. Coretech Optical Co., Ltd. Keeper Technology Xu Qi Co., Ltd. Keyway International L.L.C. Yuanmao Opto-electronic Technology (Wuhan) Co., Ltd. Coretech Optical Co., Ltd. Keeper Technology Hsinjing Holding Co., Ltd. BLACKSTONE GREEN ENERGY SDN.BHD	Jipfa Building, 3rd Floor 142 Main Street, Road Town, Tortola, British Virgin Islands No. 15, Kezhong Road, Zhunan Township, Miaoli County 3F-1, No. 193, Fuxing 2nd Road, Zhubei City, Hsinchu County 7F-6, No. 35, Xintai Road, Zhubei City, Hsinchu County No. 29, Wuquan 7th Road, Wugu Industrial Park, Wugu District, New Taipei City No. 1387, Renai Road, Zhunan Township, Miaoli County 3500 South Dupont Highway, Dover, Delaware 19901, U.S.A. No. 17, Binhu Road, Donghu New Technology Development Zone, Wuhan 7F-6, No. 35, Xintai Road, Zhubei City, Hsinchu County No. 29, Wuquan 7th Road, Wugu Industrial Park, Wugu District, New Taipei City 3F-1, No. 193, Fuxing 2nd Road, Zhubei City, Hsinchu County 1, Lorong Jermal Indah, Taman Jermal Indah, 12300, Butterworth, Penang, Malaysia	Investment in various overseas businesses General investment General investment Machinery, electronic components, power generation, transmission, and distribution machinery, as well as precision equipment manufacturing Mechanical installation, retail and wholesale of electronic materials, automobile and scooter parts and accessories, traffic sign equipment and other machinery, as well as manufacturing of lighting equipment and other machinery. Manufacturing of lighting equipment Investment in various overseas businesses Other light-emitting diode production and sales business Machinery, electronic components, power generation, transmission, and distribution machinery, as well as precision equipment manufacturing Mechanical installation, retail and wholesale of electronic materials, automobile and scooter parts and accessories, traffic sign equipment and other machinery, as well as manufacturing of lighting equipment and other machinery. General investment Renewable energy	$ 475,208 185,000 591,218 5,000 30,000 8,500 475,686 475,208 25,228 48,977 - 33,765	$ 475,208 185,000 594,072 5,000 30,000 8,500 475,686 475,208 25,228 48,977 37,370 5,062	14,500 29,702 17,794 200 3,000 850 - - 2,000 5,711 - -	100.00 100.00 22.79 2.08 21.43 94.44 100.00 100.00 20.81 40.79 - 47.24	$ 468,162 417,967 122,583 1,781 21,040 3,232 465,283 465,266 17,816 40,049 - 27	$ 166,105 94,786 8,315 24,022 9,006 1 166,194 166,195 24,022 9,006 - ( 37,024 )	$ 166,105 94,786 1,165 500 1,930 1 166,194 166,195 4,999 3,674 - ( 17,767 )	Note 1 Notes 1 and 2

(To be Continued)

213 -

(Continued)

Investor	Investor Company	Location	Main Businesses and Products	Investment Amount	Investment Amount	As	of March 31, 2020	of March 31, 2020	Gains (losses) on investee	Gains (losses) on investment recognized by the Company	Remarks
				March 31, 2020	March 31, 2019	Shares	Percentage (%)	Carrying amount
Long Benefit Investment Co., Ltd. Keeper Technology Global Unity Int’l Co., Ltd. Creation New Technology Inc.	Heng Huei Energy Consulting Co., Ltd. Uni Top Optical Corporation Shih Kwang Lighting & Electric Co., Ltd. Global Unity Int’l Co., Ltd. Creation New Technology Inc. Kaishin Technology (Wuhan) Corporation	3F, No. 41, Lane 57, Dachang Road, Pingzhen District, Taoyuan City 11F, No. 6, Jiankang Road, Zhonghe District, New Taipei City 3F-1, No. 193, Fuxing 2nd Road, Zhubei City, Hsinchu County Level 3, Alexander House, 35 Cybercity, Ebene, Mauritius Vistra Corporate Services Centre, Ground Floor NPF Building, Beach Road. Apia Samoa No. 17, Binhu Road, Donghu New Technology Development Zone, Wuhan, Hubei Province	Self-usage power generation equipment utilizing renewable energy industry Optical instrument and general instrument manufacturing Self-usage power generation equipment utilizing renewable energy industry Investment in various overseas businesses Investment in various overseas businesses R&D and manufacturing of LED lighting equipment products, electronic component manufacturing, automobile parts manufacturing, as well as electrical appliances and audiovisual electronic productsmanufacturing	$ 5,000 5,000 2,450 32,376 32,376 32,376	$ 5,000 - - 32,376 32,376 32,376	500 500 245 1,000 1,000 -	14.29 25.00 49.00 100.00 100.00 100.00	$ 5,057 3,420 2,431 9,346 9,346 9,346	$ 367 ( 6,319 ) ( 263 ) ( 220 ) ( 220 ) ( 220 )	$ 57 ( 1,580 ) ( 10 ) ( 220 ) ( 220 ) ( 220 )

Note 1: On February 27, 2020, Tynsolar’s board of directors passed a resolution to suspend the trading of stocks on Taipei Exchange, and established Hsinjing by means of share swap. The Company has swapped all Tynsolar’s shares for Hsinjing’s ones, with the ownership percentage remaining unchanged. The Company continued to dispose of Hsinjing’s shares in 2020, resulting in a decrease in the ownership from 22.90% to 22.79%.

Note 2: Long Benefit had sold all the shares of Hsinjing before January 17, 2020.

214 -

Unite: In Thousands of New Taiwan Dollars, Unless Stated Otherwise

TYNTEK Corporation

Information on investments in mainland China

For the Year Ended December 31, 2020

Table 5

I. Information on investments in mainland China:

	income:
(II) Table 6	Name of Investee	Main Businesses and Products	Paid-in Capital			Method of Investments		Accumulated Investment Amount from Taiwan at Beginning of Period			Investment Flows			Accumulated Investment Amount from Taiwan at End of Period		% Ownership of Direct or Indirect Investment		Gains (losses) on Investment	Carrying Amount of Investments at End of Period		The Repatriated Proceeds of Investments as of This Period
											Outward	Inward
	Yuanmao Opto-electronic Technology (Wuhan) Co., Ltd. Fujian Zhaoyuan Photoelectric Co., Ltd. Kaishin Technology (Wuhan) Corporation	Other light-emitting diode production and sales business Other light-emitting diode production and sales business R&D and manufacturing of LED lighting equipment products, electronic component manufacturing, automobile parts manufacturing, as well as electrical appliances and audiovisual electronic productsmanufacturing	$ 475,208 ( US$ $14,500,000) ) 6,692,823 (CNY 1,437,000,000) 32,376 ( US$ $1,000,000 )			Investment in China via a company set up in a third region Direct investment in companies in China Investment in China via a company set up in a third region		$ 475,208 ( US$ $14,500,000) ) 468,523 ( US$ 8,565,000 and CNY 45,890,000 ) 32,376 ( US$ $1,000,000 )			$ - - -	$ - - -		$ 475,208 ( US$ $14,500,000) ) 468,523 ( US$ 8,565,000 and CNY 45,890,000 ) 32,376 ( US$ $1,000,000 )		100% 4.28% (Note) 62.22%		$ 166,195 - ( 137 )	$ 465,266 142,166 5,815		$ - - -
	Note: The Company failed Limit on investment amoun
	Accumulated Outward Remittance for Investment in Mainland China as of December31,2020				Investment Amount Authorized by Investment Commission, MOEA				Limit on Investment Amount Stipulated by Investment Commission,MOEA
	$959,242 (US$23,549,000 and CNY 45,890,000)				$959,288 (US$30,842,000)				$2,345,327
	Name of Investee			Transaction Type			Amount						Transaction Terms				Accounts Receivable (Payable)			Unrealized Gains or Losses
										Price			Payment Term		Comparison with General Transaction		Balance		Percentage
Yuanmao	Opto-electronic Technology (Wuhan) Co., Ltd.			Contract processing			$ 112,030 (Processing expense)			By negotiation			T/T		O/A with net 120 days		Processing expense payable $ 11,184		6.68%	$ -

215 -

VI. Any financial distress experienced by the Company or affiliated enterprise and impacts on the Company's financial position in the last year up until the publication date of annual report: None.

Seven.Review of Financial Position, Operating Results, and Risk Management Issues

I. Financial position:

Comparative statement of financial position

Unit: NTD thousands Year Item December 31, 2020 December 31, 2019 Difference Amount % Current assets 3,452,024 3,501,197 (49,173) (1.40) Financial asset 405,857 163,295 242,562 148.54 Financial assets at amortized cost - non- current 6,566 6,505 61 0.94 Investments accounted for usingequitymethod 153,115 162,784 (9,669) ( 5.94) Property, plant, and equipment 1,714,593 1,877,724 (163,131) ( 8.69) Other intangible assets 2,172 3,286 (1,114) (33.90) Other assets 474,441 516,926 (42,485) (8.22) Total assets 6,208,768 6,231,717 (22,949) (0.37) Current liabilities 1,334,961 1,558,060 (223,099) (14.32) Long-term liabilities 735,400 774,162 (38,762) (5.01) Other liabilities 192,245 178,121 14,124 7.93 Total liabilities 2,262,606 2,510,343 (247,737) (9.87) Share capital 3,006,223 3,006,223 －－ Capital reserves 224,694 223,902 792 0.35 Retained earnings 741,139 546,461 194,678 35.63 Other equities (63,178) (89,036) 25,858 (29.04) Treasurystock －－－－ Non-controllinginterests 37,284 33,824 3,460 10.23 Total shareholders’ equity 3,946,162 3,721,374 224,788 6.04 Reasons for increased/decreased proportion analysis: explanation provided for these changes of NT$100 million or 20% or more. 1. Financial assets: Mainly due to the purchase of wealth management products measured at fair value through profit and loss. 2. Property, Plant and Equipment: Mainly are depreciation expenses and a subsidiary cooperated with the government to recover the right-of-use land to dispose the buildings on the ground 3. Current liabilities: mainly due to repayment of short-term borrowings. 4. Retained earnings: It was mainlydue to the decrease in net cash dividends for NT$270,559 from thepreviousyear.	Unit: NTD thousands Year Item December 31, 2020 December 31, 2019 Difference Amount % Current assets 3,452,024 3,501,197 (49,173) (1.40) Financial asset 405,857 163,295 242,562 148.54 Financial assets at amortized cost - non- current 6,566 6,505 61 0.94 Investments accounted for usingequitymethod 153,115 162,784 (9,669) ( 5.94) Property, plant, and equipment 1,714,593 1,877,724 (163,131) ( 8.69) Other intangible assets 2,172 3,286 (1,114) (33.90) Other assets 474,441 516,926 (42,485) (8.22) Total assets 6,208,768 6,231,717 (22,949) (0.37) Current liabilities 1,334,961 1,558,060 (223,099) (14.32) Long-term liabilities 735,400 774,162 (38,762) (5.01) Other liabilities 192,245 178,121 14,124 7.93 Total liabilities 2,262,606 2,510,343 (247,737) (9.87) Share capital 3,006,223 3,006,223 －－ Capital reserves 224,694 223,902 792 0.35 Retained earnings 741,139 546,461 194,678 35.63 Other equities (63,178) (89,036) 25,858 (29.04) Treasurystock －－－－ Non-controllinginterests 37,284 33,824 3,460 10.23 Total shareholders’ equity 3,946,162 3,721,374 224,788 6.04 Reasons for increased/decreased proportion analysis: explanation provided for these changes of NT$100 million or 20% or more. 1. Financial assets: Mainly due to the purchase of wealth management products measured at fair value through profit and loss. 2. Property, Plant and Equipment: Mainly are depreciation expenses and a subsidiary cooperated with the government to recover the right-of-use land to dispose the buildings on the ground 3. Current liabilities: mainly due to repayment of short-term borrowings. 4. Retained earnings: It was mainlydue to the decrease in net cash dividends for NT$270,559 from thepreviousyear.	Unit: NTD thousands Year Item December 31, 2020 December 31, 2019 Difference Amount % Current assets 3,452,024 3,501,197 (49,173) (1.40) Financial asset 405,857 163,295 242,562 148.54 Financial assets at amortized cost - non- current 6,566 6,505 61 0.94 Investments accounted for usingequitymethod 153,115 162,784 (9,669) ( 5.94) Property, plant, and equipment 1,714,593 1,877,724 (163,131) ( 8.69) Other intangible assets 2,172 3,286 (1,114) (33.90) Other assets 474,441 516,926 (42,485) (8.22) Total assets 6,208,768 6,231,717 (22,949) (0.37) Current liabilities 1,334,961 1,558,060 (223,099) (14.32) Long-term liabilities 735,400 774,162 (38,762) (5.01) Other liabilities 192,245 178,121 14,124 7.93 Total liabilities 2,262,606 2,510,343 (247,737) (9.87) Share capital 3,006,223 3,006,223 －－ Capital reserves 224,694 223,902 792 0.35 Retained earnings 741,139 546,461 194,678 35.63 Other equities (63,178) (89,036) 25,858 (29.04) Treasurystock －－－－ Non-controllinginterests 37,284 33,824 3,460 10.23 Total shareholders’ equity 3,946,162 3,721,374 224,788 6.04 Reasons for increased/decreased proportion analysis: explanation provided for these changes of NT$100 million or 20% or more. 1. Financial assets: Mainly due to the purchase of wealth management products measured at fair value through profit and loss. 2. Property, Plant and Equipment: Mainly are depreciation expenses and a subsidiary cooperated with the government to recover the right-of-use land to dispose the buildings on the ground 3. Current liabilities: mainly due to repayment of short-term borrowings. 4. Retained earnings: It was mainlydue to the decrease in net cash dividends for NT$270,559 from thepreviousyear.	Unit: NTD thousands Year Item December 31, 2020 December 31, 2019 Difference Amount % Current assets 3,452,024 3,501,197 (49,173) (1.40) Financial asset 405,857 163,295 242,562 148.54 Financial assets at amortized cost - non- current 6,566 6,505 61 0.94 Investments accounted for usingequitymethod 153,115 162,784 (9,669) ( 5.94) Property, plant, and equipment 1,714,593 1,877,724 (163,131) ( 8.69) Other intangible assets 2,172 3,286 (1,114) (33.90) Other assets 474,441 516,926 (42,485) (8.22) Total assets 6,208,768 6,231,717 (22,949) (0.37) Current liabilities 1,334,961 1,558,060 (223,099) (14.32) Long-term liabilities 735,400 774,162 (38,762) (5.01) Other liabilities 192,245 178,121 14,124 7.93 Total liabilities 2,262,606 2,510,343 (247,737) (9.87) Share capital 3,006,223 3,006,223 －－ Capital reserves 224,694 223,902 792 0.35 Retained earnings 741,139 546,461 194,678 35.63 Other equities (63,178) (89,036) 25,858 (29.04) Treasurystock －－－－ Non-controllinginterests 37,284 33,824 3,460 10.23 Total shareholders’ equity 3,946,162 3,721,374 224,788 6.04 Reasons for increased/decreased proportion analysis: explanation provided for these changes of NT$100 million or 20% or more. 1. Financial assets: Mainly due to the purchase of wealth management products measured at fair value through profit and loss. 2. Property, Plant and Equipment: Mainly are depreciation expenses and a subsidiary cooperated with the government to recover the right-of-use land to dispose the buildings on the ground 3. Current liabilities: mainly due to repayment of short-term borrowings. 4. Retained earnings: It was mainlydue to the decrease in net cash dividends for NT$270,559 from thepreviousyear.	Unit: NTD thousands Year Item December 31, 2020 December 31, 2019 Difference Amount % Current assets 3,452,024 3,501,197 (49,173) (1.40) Financial asset 405,857 163,295 242,562 148.54 Financial assets at amortized cost - non- current 6,566 6,505 61 0.94 Investments accounted for usingequitymethod 153,115 162,784 (9,669) ( 5.94) Property, plant, and equipment 1,714,593 1,877,724 (163,131) ( 8.69) Other intangible assets 2,172 3,286 (1,114) (33.90) Other assets 474,441 516,926 (42,485) (8.22) Total assets 6,208,768 6,231,717 (22,949) (0.37) Current liabilities 1,334,961 1,558,060 (223,099) (14.32) Long-term liabilities 735,400 774,162 (38,762) (5.01) Other liabilities 192,245 178,121 14,124 7.93 Total liabilities 2,262,606 2,510,343 (247,737) (9.87) Share capital 3,006,223 3,006,223 －－ Capital reserves 224,694 223,902 792 0.35 Retained earnings 741,139 546,461 194,678 35.63 Other equities (63,178) (89,036) 25,858 (29.04) Treasurystock －－－－ Non-controllinginterests 37,284 33,824 3,460 10.23 Total shareholders’ equity 3,946,162 3,721,374 224,788 6.04 Reasons for increased/decreased proportion analysis: explanation provided for these changes of NT$100 million or 20% or more. 1. Financial assets: Mainly due to the purchase of wealth management products measured at fair value through profit and loss. 2. Property, Plant and Equipment: Mainly are depreciation expenses and a subsidiary cooperated with the government to recover the right-of-use land to dispose the buildings on the ground 3. Current liabilities: mainly due to repayment of short-term borrowings. 4. Retained earnings: It was mainlydue to the decrease in net cash dividends for NT$270,559 from thepreviousyear.
Year Item	December 31, 2020	December 31, 2019	Difference
			Amount	%
Current assets	3,452,024	3,501,197	(49,173)	(1.40)
Financial asset	405,857	163,295	242,562	148.54
Financial assets at amortized cost - non- current	6,566	6,505	61	0.94
Investments accounted for usingequitymethod	153,115	162,784	(9,669)	( 5.94)
Property, plant, and equipment	1,714,593	1,877,724	(163,131)	( 8.69)
Other intangible assets	2,172	3,286	(1,114)	(33.90)
Other assets	474,441	516,926	(42,485)	(8.22)
Total assets	6,208,768	6,231,717	(22,949)	(0.37)
Current liabilities	1,334,961	1,558,060	(223,099)	(14.32)
Long-term liabilities	735,400	774,162	(38,762)	(5.01)
Other liabilities	192,245	178,121	14,124	7.93
Total liabilities	2,262,606	2,510,343	(247,737)	(9.87)
Share capital	3,006,223	3,006,223	－	－
Capital reserves	224,694	223,902	792	0.35
Retained earnings	741,139	546,461	194,678	35.63
Other equities	(63,178)	(89,036)	25,858	(29.04)
Treasurystock	－	－	－	－
Non-controllinginterests	37,284	33,824	3,460	10.23
Total shareholders’ equity	3,946,162	3,721,374	224,788	6.04
Reasons for increased/decreased proportion analysis: explanation provided for these changes of NT$100 million or 20% or more. 1. Financial assets: Mainly due to the purchase of wealth management products measured at fair value through profit and loss. 2. Property, Plant and Equipment: Mainly are depreciation expenses and a subsidiary cooperated with the government to recover the right-of-use land to dispose the buildings on the ground 3. Current liabilities: mainly due to repayment of short-term borrowings. 4. Retained earnings: It was mainlydue to the decrease in net cash dividends for NT$270,559 from thepreviousyear.

216 -

II. Financial performance

(I) Key reasons of material changes in the operating revenue, operating net income, and net income before tax during the recent two years

II. Financial performance (I) Key reasons of material changes in the operating revenue, operating net income, and net income before tax during the recent two years	II. Financial performance (I) Key reasons of material changes in the operating revenue, operating net income, and net income before tax during the recent two years	II. Financial performance (I) Key reasons of material changes in the operating revenue, operating net income, and net income before tax during the recent two years	II. Financial performance (I) Key reasons of material changes in the operating revenue, operating net income, and net income before tax during the recent two years	II. Financial performance (I) Key reasons of material changes in the operating revenue, operating net income, and net income before tax during the recent two years
Unit: NTD thousands
Year Account	2019	2020	Increased/decreased amount	Percentage of change (%)
	Total	Total
Operating revenue, net	2,428,616	2,519,855	(91,239)	( 3.62)
Operating cost	2,067,874	2,134,783	(66,909)	( 3.13)
Gross income from operations	360,742	385,072	(24,330)	( 6.32)
Operating expenses	366,852	388,539	( 21,687)	( 5.58)
Other income and expenses, net	14,438	(24,885)	39,323	(158.02)
Operating income (loss)	8,328	(28,352)	36,680	(127.37)
Non-operating income and expense	355,661	259,883	95,778	36.85
Net income before tax for the period	363,989	231,531	132,458	57.21
Income tax income (expense)	(56,088)	(22,141)	(33,947)	153.32
Net income for theperiod	307,901	209,390	98,511	47.05
Analysis of changes in proportion: the key reasons of changes of NT$100 million and 20% or more between two consecutive period, and their impact, as following: 1. Other income and expenses, net: mainly because the subsidiary accommodated the government to recover the lands and disposed the right-of-use for income 2. Non-operating income and expense: mainly because the subsidiary accommodated the government to recover the lands and disposed the right-of-use for income of NT$174,980 thousand. 3. Income tax expense: mainly due to the increase in profits and profit from the disposal of the right-of-use and building by a subsidiary,resultingin an increase in income tax.

(II) Sales forecast and basis

The consolidated entity expects higher sales volume in 2021 compared to 2020. This forecast has been made mainly based upon changes in the macro environment, industry trends, and the Company's prospects, operational overview, and goals.

(III) Possible financial impacts and response plans
The COVID-19 pandemic has had direct impact on production and consumption activities in 2020. Despite the negative impact on global demand, the supply chain remained largely unaffected and the ongoing detachment from China actually benefited Taiwanese businesses. Furthermore, increased demand for back lighting, MinLED, and niche products are all expected to benefit and contribute to the growth of Taiwan's LED industry in 2021. Meanwhile, support for energy-efficient lighting from prominent nations around the world combined with growth of special lighting applications such as Mini LED display, Mini LED back lighting, UV-C LED, automobile lighting, and high efficiency LED lighting will all fuel growth of the LED industry. In particular, Micro LED offers excellent characteristics and the potential to be used in conjunction with different types of display panel through mass transfer technology to deliver luminance, contrast, responsiveness, and power efficiency at levels that exceed LCD and OLED. Future applications of this technology include wristwatch, cellphone, automobile display, AR, VR, Monitor, TV, and large-size display. Application of IoT relies significantly on the use of sensors. Only when adequate number of sensors has been deployed can data be gathered and updated in real time to support AI algorithms and machine learning. The consolidated entity is actively expanding into non-LED fields including sensors as a means to satisfy demand for applications such as wearable device, automobile, consumer electronics, and medicine.
217 -

III. Cash flow

(I) Liquidity analysis in the recent two years

Year item	2020	2019	Percentage of increase (decrease) %
Cash flow ratio	12.85	22.88	(43.84)
Cash flow adequacy ratio	69.74	84.11	(17.08)
Cash reinvestment ratio	1.29	( 0.07)	(1942.86)
Analysis of changes in proportion: (analysis of these changes of 20% or more) Cash flow ratio: mainly due to the decreased cash inflow from operating activities. Cash reinvestment ratio: mainly due to the decrease in working capital and the decrease in cash dividends distributedin 2020fromthe previous year.

0(II) Improvement plans for illiquidity: The funds of the consolidated company are adequately filled through financing activities and available for use flexibly, without the problem of insufficient liquidity. (III) Liquidity analysis for the next year

III) Liquidity analysis for the next year	III) Liquidity analysis for the next year	III) Liquidity analysis for the next year	III) Liquidity analysis for the next year
				Unit: NTD thousands
Beginning cash balance 1	Net cash flow form operating activities for the wholeyear 2	Cash outflow for the whole year 3	Anticipated cash surplus (deficit) amount 1＋2－3	Remedies for cash deficits
				Investment plan	Financing plan
655,749	2,750,767	2,765,964	640,552	-	-
Changes of cash flows for the next year are analyzed as following: Operating activities: The cash outflow for the whole year is mainly due to the expected decrease in accounts receivable and payment of accounts payable in 2021. Investing activities: The cash outflow for the whole year is due to the expected replacement of old equipment, improvement projects and additional purchases of production equipment in 2021 Financing activities: The cash inflow for the whole year is the expected outflow of 2021, including the distributionofcashdividends and therepayment ofthe principalofthe syndication.

IV. Material capital expenditures in the last year and impacts on financial position and business performance:

(I) Utilization of major capital expenditures and source of funds, and nature of capital expenditure expected to be invested in the future:

vested in the future:
				Unit: NTD thousands
Project	Actual or expected source of funds	Actual or expected date of completion	Total required fund	Actualorexpected utilizationof funds
				2021
Purchase or improvement of mahcines, equipment, and production operation environment	Self-owned fund/ Syndication of banks	Q1-Q4, 2021	10,300	10,300
Improvement of bulk gas, air conditioning system and exhaust system	Self-owned fund	Q2-Q4, 2021	46,500	46,500
New installation and calibration of VOC treatment facilities, concentration monitoring equipment and special gas monitoring system	Self-owned fund	Q2, 2021 Q4, 2021	19,800	19,800
InGaAs Camera Hot Spot Analyzer, Energy Dispersive Spectrometer (EDS)	Self-owned fund	Q1-Q2, 2021	5,500	5,500
Virtualization equipment of enterprise servers	Self-owned fund	Q1, 2021	6,000	6,000

218 -

(II) Expected effects generated:

1. Purchase of machines and equipment:

In 2021, It is estimated that the total benefits that may be generated by purchasing machinery and equipment with the self-owned funds are as follows:

			Unit: million pieces/PCS; NT$ thousand	Unit: million pieces/PCS; NT$ thousand	Unit: million pieces/PCS; NT$ thousand
Year	Item	Production Volume	Sales Volume	Sales Value	Gross Profit
2021	Compound Semiconductor	11,000	12,850	1,145,000	138,000
	Light-receiving components	13,500	11,300	1,315,000	220,000
	Light-receiving components (PCS)	144,000	148,000

Purchase of R&D equipment:

The major benefits are continuous research and development of new products, maintaining the leading position in manufacturing technologies, and improve OEM capability, thereby exploiting the Company’s advantage in the mass production economic scale.

Improvement of environmental protection treatment system, equipment and waste water and waste gas facilities:
- a. Reduces the waste water treatment fee, the risk of overflowing water quality exceeding the standards, and the cost of sludge treatment.
- b. The detection value of acid discharge complies with regulatory standards and avoids environmental pollution, reducing potential costs of the Company.
- c. The advanced zeolite runner is improved by the active carbon adsorption machine to increase the reduction rate and the dual machine alternate system. 。
- d. Purchase hand-held integrated detectors to detect abnormal areas immediately for avoiding the risk of personnel entering accidentally.
Improvement of air conditioning and monitoring system:
- a. Replace old or malfunctioning power-consuming equipment such as local ice machines/pumps/air compressors, to reduce energy consumption, and increase the overall energy-saving rate of the equipment by about 25-30%.
- b. Save electricity and comply with temperature and humidity control specifications, reduce process product abnormalities and improve product yield.
- c. Maintain system performance, comply with on-site environmental temperature and humidity and PCW temperature and pressure control specifications, to reduce process product abnormalities and improve process product yield.
- d. The operation status of various pollution prevention equipment is monitored by the central system, and is strictly controlled by the personnel of each shift, to ensure the quality of their emissions.
- e. Improve and integrate disaster prevention efficiency as point, line, and plane.
InGaAs Camera Hot Spot Analyzer, Energy Dispersive Spectrometer (EDS): Improve the effects of product electrical testing, appearance inspection, and reliability testing, while strengthening the accuracy of analysis and supporting data.
Enterprise server virtualization equipment:
- a. Mail security and efficiency are improved holistically.
- b. Improve the audit and screening management mechanism.
- c. Complete mail history, backup and restoration.
- d. It is possible to increase the defense and expand the diversification of functions in response to new types of mail threats, while considering the future mail protection and processing capabilities when facing huge mail traffic and potential threats, such as complete protection mechanisms including virus mail isolation, Sandstorm malware screening, and detection of abnormal traffic caused by spams.
V. Reinvestment policy in the most recent year, causes of profit or loss incurred, and any improvements or reinvestments planned for the next year:
219 -

Re-invested business	Main Businesses	Original invested amount	Book value	Investment policy	Main reason of profit or loss	Improvemen t plans	Investment plans in the next year
TEK Holding Co., Ltd.	Investment in various overseas businesses	475,208	468,162	In order to enhance the Group's overall market competitiveness and take into account of the the domestic market demand grow in Mainland China, the reinvestment is made to Yuanmao in China.	Profit from disposal of the right-of-use of land, and the buildings on the ground by a subsidiary.	Continuous cost and expense control.	None
Long Benefit Investment Co., Ltd.	General investment	185,000	417,967	Profit is obtained from underlying investments.	The operating profits of the invested projects are good and generates favorable evaluation.	Pay attention to the industry status.	None
Hsinjing Holding Co., Ltd. (Note 1)	General investment	591,218	122,583	The future prospects of the solar industry are promising and the climate change in recent years has led to the active development of green power around the world, as well as the promotion of green energy policies by various governments vigorously.	In order to improve operational performance and industrial competitivenes s, it transformed into a solar system provider and reduced losses.	Draw up budget and control costs and expenses.	None
Coretech Optical Co., Ltd.	Machinery, electronic components, power generation, transmission, and distribution machinery, as well as precision equipment manufacturing	30,228	19,597	Expand the business scope of the Group and use resources more effectively	Cost control is appropriate and profits increase.	Continuous cost and expense control.	None
Keeper Technology Co. Ltd.	Mechanical installation, retail and wholesale of electronic materials, automobile and scooter parts and accessories, traffic sign equipment and other machinery, as well as manufacturing of lighting equipment and other machinery.	78,977	61,089	Expand the business scope of the Group and use resources more effectively	Stable revenue and profit.	Obtain monthly financial reports and make continuous analysis of financial reports.	None
Xu Qi Co., Ltd. (Note 2)	Lighting Equipment Manufacturing	8,500	3,232	Expand the business scope of the Group and advance to the LED product applications.	Due to the Company's overall operation adjustment, it is now in the process of liquidation.	―	None

Note 1: On February 27, 2020, Tynsolar’s board of directors passed a resolution to suspend the trading of stocks on Taipei Exchange, and established Hsinjing by means of share swap, and all Tynsolar’s shares had been converted to Hsinjing’s shares, with the ownership percentage remaining unchanged. Note 2: In the extraordinary shareholders’ meeting on July 30, 2018, it was resolved to dissolve Xu Qi Co., Ltd., and the dissolution date was set on July 10, 2018. Currently it is under liquidation.

Whether the investments in China conform to the required limit

Unit: NTD thousands

investments in China conform to the required limit	Unit: NTD thousands
Item	Amount
Net value up toMarch31,2021	3,775,583
Limit of investmentsinChina (60% of net value) (1)	2,265,350
Accumulatedinvestment amountinChina as of March,2021(2)	959,288
Investment amount expected to be executed (3)	0
Forecasted total amount of investments in China(4)=(2)+(3)	959,288

220 -

Based on the financial statements of TYNTEK Optoelectronics Co., Ltd., as of March 31, 2021, reviewed by CPAs, the net value was NT$3,775,583 thousand. Investment Board, Ministry of Economic Affairs stipulates that the investment limit in mainland China was NT$2,265,350 thousand. As of March 2021, the accumulated investment in China is NT$959,288 thousand, complying with the relevant regulations of the China reinvestment limit.

VI. Risks in the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report:

(I) The impact of interest and exchange rate changes and inflation on the Company's profit and loss and future countermeasures

(1) The impacts of interest collection/payment and foreign exchange gains/losses on the Company's profit and loss

			Unit: NTD thousands; %
Item		2020
	Interest income	Interest expense	Foreign exchange gains (losses)
Amount	9,120	24,163	(36,006)
Percentage to the net operating revenue	0.38	0.99	(1.48)
Percentage to the net profit before tax	2.51	6.64	(9.89)

The interest income, interest expense, and exchange gains and losses accounted for approximately 0.38%, 0.99%, and (1.48)% of operating income of the consolidated company in 2020. The interest income, interest expenses, and exchange gains and losses accounted for approximately 2.51%, 6.64%, and (9.89)% in the net profit before tax, which are no significant impact on the Company's profit and loss. The exchange gains and losses are affected to a certain extent by the appreciation/depreciation of the US dollar and CNY exchange rate, and thus impact on the consolidated company’s export revenue.

(2) Specific measures of the consolidated company in response to changes in interest rates and exchange rates

The consolidated company always monitor the fluctuation of interest rate and exchange rate, and formulate the "Procedure for Acquiring or Disposing Assets" as a control, to avoid interest rate and foreign exchange risks arising from operations.

○1 Interest rate:

In addition to the company’s own profits and shareholder capital contributions, the working capital of the consolidated company also comes from bank financing, and the interest expense mainly comes from bank financing for material procurement, syndicated loans, and short-term borrowings. The consolidated company ontinues to maintain good relations with banks, proactively apply for the Taiwanese Companyies Returned Investment Action Program, and the approved has be granted. The company also monitors changes in market interest rates to obtain more favorable interest rates and reduce interest expenses. Therefore, the changes in market interest rates have no material impact on the consolidated company.

○2 Foreign exchange rate:

77% of sales of the consolidated company are exportation, leading to the risk of exchange rate fluctuations. Faced with exchange rate risks, the countermeasures of the consolidated company are as follows:

A. Buy or sell foreign exchange forwards.
B. Strengthen procurement capabilities, reduce costs of raw material purchase, and negotiate sharing exchange rate risks with suppliers. If the magnitude exchange rate changes increases, transaction price will be renegotiated with the supplier.
C. Strengthen the ability to develop sources of incoming materials and avoid excessive influence from a single currency exchange rate.
D. The quotation system with customers include the consideration of selling price adjustment due to
221 -

exchange rate changes to protect the Company's existing profits.

E. Pay the expenditure in foreign currency generated from importation with the export revenue in same currency, to shift partial FX risks.
F. Adjust foreign currency positions based on exchange rate changes.
(3) Inflation:

At present, the monetary policies of various powerful economies are still under control, and there is no concern of inflation for the time being. As of the publication date of the annual report, the consolidated company has not had any significant impact on the company’s profit and loss due to inflation. Sales prices are adjusted any time in response to market fluctuations to reduce the impact of changes in inflation.

(II) Policies of engagement in high-risk and highly leveraged investments, loans to others, endorsements and guarantees and derivative trading, main reasons for profit or loss and future countermeasures:
Engagement in high-risk and highly leveraged investments: none.
Loaning of funds to others, endorsements and guarantees:

The consolidated company loans of funds and provides external endorsement/guarantee are mainly for the operating liquidity of subsidiaries, or repayment of bank loans. Such are handled pursuant to TYNTEK’s “Operating Procedures for Loaning of Funds to Others” and “Operational Procedures for Endorsement/Guarantee.” As of the end of 2020, the amount of loaning of funds and external endorsement/guarantee of the consolidated company was NT$10,000 thousands and NT$0, respectively.

Policy, and gains or loss of derivative transactions, and the response in the future:

No derivative transaction was conducted in 2020. If the consolidated company engages in derivatives transactions, the counterparties are are limited to creditworthy correspondent banks with no expectation of default, so the possibility of credit risk is extremely low. Secondly, the above-mentioned transactions are of a hedging nature, and gains and losses due to exchange rate changes will be offset with the hedged items, so the market risk is usually low. Meanwhile, the consolidated company controls the transaction risk of financial products by limiting the information and trading capabilities of the trading counterparties, and also uses the financing tools in the money market and foreign exchange markets, as well as the appropriate current assets to plan future cash requirements. Therefore, the management of the consolidated company expects that the above-mentioned financial product transactions should not cause major losses.

(III) Future R&D projects and estimated R&D expenses
Future R&D projects

The Company has always focused on the product R&D capability and with the continuous efforts over the past years, we have been able to develop and launch numerous outstanding new products, and have also been able to gain support from the public sector and government agencies, All of such achievements demonstrate the Company's commitment and dedication in R&D technologies. After the Company has completed the development and mass production of high luminance LED, our production line becomes more complete. To develop products of greater prospective and marketability, in recent years, the Company is fully dedicated in the research and development of high power IR LED and light-receiving component the fields of automobile, medical care and precision control, for actively transforming to the non-LED sensing component business, where the preliminary results have been achieved with official mass production. We have achieved preliminary outcome and the products have entered the mass production stage. In addition, the Company is also active in the investment of relevant product application fields. With the rapid growth of the optoelectronic market, the application scope of various products continues to expand, and the market demand is increasing. To satisfy the market demand, the Company will continue to focus on the development of the following products:

A. High power IR LED
B. 6” wafer and 2D/3D sensing PD
C. 6” wafer and high precision and power components
D. High power AlGaInP light emitting diodes
E. High speed communication photodiodes
222 -
- F. Multiband photo detectors
- G. Dark violet (DUC/UVC) sensors
- H. Silicon substrates with built-in electrostatic protection components
- I. Flip-chip Zener diodes
- J. Photo diode integrated circuit (PDIC)
- K. Low-capacitance transient voltage suppressors (TVS)
- L. High speed optical communication laser diodes
- M. Vertical cavity surface emitting laser (VCSEL) diodes
- N. Development of high-speed, thin-type IR products (950nm MO Type)
- O. Long-wavelength 1300nm LED, and Long-wavelength 1450nm LED
- P. Polycrystalline/PD integrated components and wide gamut components
- Q. Flip chip sensing components
- R. New generation semiconductor material components
The estimated R&D expenses of LED optoelectronics: NT$130,000 thousand.
(IV) The impact of important domestic and overseas policy and regulation changes on the financial status of the Company and countermeasures:

With the requirements of relevant laws and regulations and the increasing awareness of energy-saving, the demand for LED lighting is increasing. The government subsidies to LED manufacturers will also stimulate the LED lighting market. The consolidated company has been aware of important domestic and foreign policy and legal changes in the most recent years through various information channels, and adopted appropriate response measures, so that it will not have a significant impact on the consolidated company's finance and business.

(V) The impact of technological and industrial changes on the financial status of the Company and countermeasures:

The consolidated company will improve product quality and develop new products in response to changes in technology. The consolidated company will maintain good cooperative relations with upstream and downstream suppliers and customers, grasp the pulse of the market, and engage in research and development and improvement processes related to cope with customers’ needs and market changes, with continuous expansion of production, to enhance the competitiveness of the consolidated company. With the development of communication systems, 4G and 5G mobile communications have become popular year by year. Among them, 5G is more closely connected to the Internet, from the Internet of Things, the Internet of Vehicles to the cloud; the connection of different platforms is through the connection among large, small, and micro base stations. It is expected that in 2021, 5G infrastructure construction will rebound. In addition to base stations, the demands for backhaul optical fiber networks of base stations, and small base stations are also expected to increase significantly. The Chinese market will act as the locomotive of 5G construction, and Taiwan will subsidize construction to encourage the purchase of domestic products. The recovery of the optical communication market has become the most eye-catching industry in recent years. The demands for wireless and wired transmission capacity and bandwidth are increasing. The new generation of communication systems must provide higher transmission rates and bandwidth services to meet the needs of users. In wired transmission, optical fiber has become the backbone of the communication system. Affected by the COVID-19 pandemic since 2020, we have actively developed pandemic containment technical applications. Among them, deep UV LED is the focus of current anti-pandemic technical applications. Taiwanese manufacturers have actively positioned the UVC LED products, applied lamps, flashlights, air purifiiers, and cleaning robots, or portable disinfection products sterilizing the daily necessities such as masks, glasses, or electronic devices such as mobile phones and tablets, to strengthen personal protection and improve the health and safety of public areas. As of the publication date of the annual report, the consolidated company has not had a significant adverse effect on the company's finance and business due to technological changes and industrial changes.

(VI) The impact of corporate image change on the Company’s crisis management and countermeasures: Merger The company has been committed to maintaining its corporate image for many years and complying with laws and regulations. If there is a situation that affects the corporate image or violates laws and regulations, a special team will be formed to formulate countermeasures. However, once a corporate crisis occurs, it may cause considerable damage to the Company. Therefore, the consolidated company will continue to comply with and mak the best efforts to implement various corporate governance requirements, while consulting relevant experts in a timely manner, to reduce the occurrence of such risks and the impact of these risks on the finance and business of the consolidated company. As of the pubication date of the annual report, there has not been anything that could affect the corporate image.

(VII) Expected benefits and possible risks of M&A: none.
(VIII) Expected benefits and possible risks of plant expansion:

As required by TYNTEK’s short- and medium-term product development plan, a plant in the Zhunan Science Park was purchased in 2017 to expand its production scale to 6”, and conduct equipment testing

223 -

runs in 2018. From Q3 2019, the trial mass production was commenced and samples were delivered for customers’ verification. It is expected to increase revenue growth, increase the company's gross profit and market share; the source of funds needs to borrow from banks, which increases the interest expenses.

(IX) The impact of concentration of purchase or sales:

The sales and purchase clients of the consolidated company in 2020 were quite scattered. The Company continues to maintain good cooperative relationships with various vendors and actively expand new customer sources, so it does not faces the huge risk of purchase or sales concentration.

(X) The impact of mass share transfer or change of Directors, Supervisors or shareholders holding more than 10% of the Company's shares, the risks and countermeasures: none.
(XI) The impact of the change of management on the Company, the risks and countermeasures: none.

(XII) Litigations and non-litigations:

Any material litigation, non-litigation or administrative litigation of the Company and its subordinate companies, with its judgment already made or pending in the recent year and as of the publication of the annual report, whose result may have a significant impact on the shareholders' equity or the price of the Company’s shares: the Company has no material litigation, non-litigation or administrative litigation with with its judgment already made or pending whose result may have a significant impact on the shareholders' equity or the share price.
Any material litigation, non-litigation or administrative litigation with its judgment already made or pending which is related to the Company’s Directors, Supervisors, General Manager, actual person in charge, shareholders holding more than 10% of the Company's shares or affiliates for the past two years and as of the publication of the annual report, which result may have a significant impact on the shareholders' equity or the price of the Company’s shares: the consolidated company has has no material litigation, non-litigation or administrative litigation with with its judgment already made or pending whose result may have a significant impact on the shareholders' equity or the share price
(XIII) Other important risks and countermeasures:

To strengthen information security management, ensure the security of corporate data, systems, equipment and network, and the confidentiality, integrity and availability of core business-related information assets, so as to provide an information security environment for the continuous operation of information systems, and comply with requirements of relevant laws and regulations, for avoiding the risks of deliberately internal or external threats or improper management and use by the internal personnel, resulting in tampering, disclosure, destruction or loss of data, the consolidated company regulates the specific information security policy. This policy is evaluated at least once a year, to comply with the latest developments in relevant laws, technology and business, for ensuring the effectiveness of information security practices, and implementing the following management policies to prevent the possibility of information security risks.

1.1 Ensure the data security of the core business, the integrity of the service and data, and the continuous operation of the services.
1.2 Implement management measures and standard operating procedures for user platform development and maintenance, computer room management, and outsourcing management.
1.3 The panorama and scope of information security should correspond to the requirements of the company's important business processes and the continuation of maintenance and operations.
1.4 Regularly implement information security education and promotion, to enhance the concept of information security among employees and the awareness of related information security responsibilities.
1.5 Employees conduct business pursuant to various management measures and operational procedures, to maintain the normal operation of the Company.
1.6 The execution of information business activities must comply with the requirements of relevant laws or regulations.
1.7 Implement regular monitoring and information security internal audit system, to ensure that information security management is implemented in daily maintenance, operation and business activities.
1.8 This policy is evaluated by the "Information Security Committee" at least once a year to comply with the latest developments in relevant laws, technology, and business, for ensuring the effectiveness of information security practices.
224 -

VII. Other material issues:

Method and basis of evaluation for balance sheet reserve accounts

Item No.	Balance sheet reserve account	Method of evaluation	Basis of evaluation
1	Expected credit loss	The Company adopts doubtful debt provisioning principles published by International Accounting Standards Board (IASB) (including interpretations of IFRS, IAS, and IASB and interpretations of relevant authorities of the Republic of China), and evaluates reserves based on the recoverability principles and impairment assessment methodologies defined in IFRS.	The Company assesses accounts receivable for signs of impairment on each balance sheet date. A receivable account is treated as impaired if there is objective evidence to suggest that the estimated future cash flow may have been impaired due to single or multiple events since initial recognition. Objective evidence of impairment may include the following situations: 1. A debtor encounters serious financial distress; or 2. A receivable account becomes overdue; or 3. A debtor is very likely to undergo bankruptcy or financial restructuring. For certain accounts receivable that show no signs of impairment on a standalone basis, the Company would also assess impairment on an aggregate basis. Objective evidence of impairment on a group of accounts receivable may be identified based on the Company's past collection experience, signs of delayed payments in a particular group of receivables, and nationwide or regional change of economic circumstances that are relevant to the default of accounts receivable. The amount of impairment is the difference between the asset's book value and the amount of expected future cash flows discounted using effective interest rate (that reflects collaterals or guarantees) at the time of initiation. The book value of accounts receivable is reduced by the presence of an allowance account. Receivable balances that are deemed unrecoverable are charged against the allowance account. Amounts charged off but recovered in subsequent periods are credited to the allowance account. Changes in the book value of the allowance account are recognized as expected credit loss.
2	Allowance for losses on slow-moving inventory	The Company adopts inventory- related principles published by International Accounting Standards Board (IASB) (including interpretations of IFRS, IAS, and IASB and interpretations of relevant authorities of the Republic of China), and values inventory at the lower of cost, net realizable value, or market price as defined in IFRS.	(I) For raw materials, devaluation losses are recognized by comparing price of replacement to cost (except in the case of substitutable materials or other circumstances supported by evidence). (II) For supplies, devaluation losses are recognized by comparing price of replacement to cost. (III) For finished goods and merchandise, devaluation losses are recognized by comparing the most recent price of sales receivable or order price to cost in the last year. (IV) Reworks 1. Reworks that are estimated to be of no market value upon completion will be subject to 100% loss provision. 2. For other reworks, the Company assesses whether the finished work has lost in value and recognizes devaluation losses by comparing net realizable value. (V) Work-in-progress 1. For works-in-progress, the Company estimates net realizable value by taking into account additional costs to completion and selling expenses, and compares net realizable value to cost to provide for devaluation loss. 2. Works-in-progress that are estimated to be of no market value upon completion will be subject to 100% loss provision. Other inventory items that are not subject to devaluation loss are carried at the lower of cost and net realizable value. Inventory level is monitored constantly and allowances on devaluation are recognized at appropriate timing.

225 -

Eight.Special Disclosure

I. Affiliated companies

(I) Consolidated Business Report of Affiliates:

Organization Chart of Affiliates Dec. 31, 2020

TYNTEK Corporation

==> picture [461 x 381] intentionally omitted <==

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

40.79%
100% 100% 21.43% 94.44%
TEK Long Keeper Xu Qi Co.,
Holding Co., Benefit Technology Ltd. (under
Ltd. Investment liquidation)
Co., Ltd.
100%
KEYWAY 100%
Inernational Global Unity
L.L.C. Int’l Co, Ltd
100%
100%
Creation New
Yuanmao Opto-
Technology Inc
electronic
Technology
100%
Kaishin
Technology
(Wuhan)
Corporation
----- End of picture text -----

226 -

2. Basic Information of Affiliates

Dec. 31, 2020 Unit: NTD thousands

Name of Affiliate	Date of Establishment	Address	Paid-in Capital	Major Business or Production
TEK Holding Co., Ltd.	2000.04	Jipfa Building, 3rd Floor 142 Main Street, Road Town, Tortola, British Virgin Islands	475,208	International investment
Keeper Technology	2000.05	No. 29, Wuquan 7th Road, Wugu District, New Taipei City	140,000	Mechanical installation, retail and wholesale of electronic materials, automobile and scooter parts and accessories, traffic sign equipment and other machinery, as well as manufacturing of lighting equipment and other machinery.
Long Benefit Investment Co., Ltd.	2005.05	No. 15, Kezhong Road, Zhunan Township, Miaoli County	297,022	Domestic investment
KEYWAY INTERNATIONAL L.L.C.	2000.07	3500 South Dupont Highway,Dover,Delaware 19901,U.S.A.	475,686	International investment
Yuanmao Opto-electronic Technology (Wuhan)Co., Ltd.	2005.12	No. 17, Binhu Road, Donghu New Technology Development Zone, Wuhan	475,208	Other light-emitting diode production and sales business
Global Unity Int’l Co, Ltd.	2007.01	Level 3, Alexander House, 35 Cybercity, Ebene, Mauritius	32,376	International investment
Creation New Technology Inc.	2007.06	Vistra Corporate Services Centre, Ground Floor NPF Building, Beach Road. Apia Samoa	32,376	International investment
Kaishin Technology (Wuhan) Corporation	2007.12	No. 17, Binhu Road, Donghu New Technology Development Zone, Wuhan, Hubei Province	32,376	R&D and manufacturing of LED lighting equipment products, electronic component manufacturing, automobile parts manufacturing, as well as electrical appliances and audiovisual electronic products manufacturing
Xu Qi Co., Ltd.	2015.10	No. 1387, Renai Road, Qiding Village, Zhunan Township, Miaoli County	9,000	Lighting Equipment Manufacturing

227 -

3.Information of Directors, Supervisors, and Presidents of Each Affiliate

		December 31, 2020 Unit: NTD thousands; %	December 31, 2020 Unit: NTD thousands; %	December 31, 2020 Unit: NTD thousands; %
Name of Affiliate	Title	Name or Representative	Shares	Shares Ratio
TEK HoldingCo.,Ltd.	Chairman	TYNTEK Corporation- Bosco Foo	14,500	100.00%
Keeper Technology	Chairman	Raymond Sheu	425	3.04%
	Director	LongBenefit Investment Co., Ltd.	5,711	40.79%
	Director	Chien-Li Wu	638	4.55%
	Director	TYNTEK Corporation	3,000	21.43%
	Director	Wen-Hu Wang	262	1,87%
	Supervisor	Ching-Ho Hsu	189	1.35%
	President	Wen-Hu Wang	262	1.87%
Long Benefit Investment Co.,Ltd.	Chairman, President	TYNTEK Corporation- Bosco Foo	29,702	100.00%
KEYWAY INTERNATIONAL L.L.C.	Chairman	TEK Holding Co., Ltd.- Bosco Foo	－	100.00%
Yuanmao Opto-electronic Technology (Wuhan) Co., Ltd.	Chairman	KEYWAY INTERNATIONAL L.L.C.- J.R. Deng	－	100.00%
	Director	KEYWAY INTERNATIONAL L.L.C.- Bosco Foo
	Director	KEYWAY INTERNATIONAL L.L.C.- Raymond Sheu
	Director	KEYWAY INTERNATIONAL L.L.C.- Tai-HsiangHu
	Director	KEYWAY INTERNATIONAL L.L.C.- Mei-LingChiu
	Supervisor	KEYWAY INTERNATIONAL L.L.C.- Hsiao-PingLi
Global Unity Int’l Co,Ltd.	Chairman	Keeper Technology -Raymond Sheu	1,000	100.00%
Creation New Technology Inc.	Chairman	Global Unity Int’l Co,Ltd- Raymond Sheu	1,000	100.00%
Kaishin Technology (Wuhan) Corporation	Chairman	Creation New Technology Inc- Wen-Hu Wang	－	100.00%
	Director	Creation New TechnologyInc-J.R. Deng
	Director	Creation New TechnologyInc-Bosco Foo
	Director	Creation New Technology Inc-Chien-Li Wu
	Director	Creation New Technology Inc-Raymond Sheu
	Director	Creation New Technology Inc-Ching-Ho Hsu
Xu Qi Co., Ltd. (Note)	Supervisor	Mei-Ling Chiu	－	－

Note: In the extraordinary shareholders’ meeting on July 30, 2018, it was resolved to dissolve the company, and the dissolution date was set on July 10, 2018. Currently it is under liquidation.

228 -

4.Operation Overview of Each Affiliate

					Dec. 31, 2020 Unit: NTD thousands	Dec. 31, 2020 Unit: NTD thousands	Dec. 31, 2020 Unit: NTD thousands	Dec. 31, 2020 Unit: NTD thousands
Name of Affiliate	Capital	Total Assets	Total Liabilities	Net Value	Operating income	Operating profit	Income of the Period	Earnings per share (EPS)
TEK HoldingCo., Ltd.	475,208	465,531	0	465,531	0	(80)	166,105	11.46
Keeper Technology	140,000	248,107	149,923	98,184	234,475	5,864	9,006	0.64
Long Benefit Investment Co., Ltd.	297,022	416,141	328	415,813	0	(2,097)	94,786	3.19
KEYWAY INTERNATIONAL L.L.C.	475,686	465,283	0	465,283	0	0	166,194	-
Yuanmao Opto- electronic Technology (Wuhan)Co., Ltd.	475,208	551,365	86,099	465,266	111,407	(22,472)	166,195	-
Global Unity Int’l Co, Ltd.	32,376	9,361	0	9,361	0	0	(220)	(0.22)
Creation New TechnologyInc.	32,376	9,361	0	9,361	0	0	(220)	(0.22)
Kaishin Technology (Wuhan)Corporation	32,376	9,361	16	9,345	0	(221)	(220)	-
Xu Qi Co., Ltd.	9,000	3,422	0	3,422	0	0	1	0.00

229 -

5. Relationship between the Subordinate Company and the Controlling Company

Dec. 31, 2020

Name of the controlling company	Reasons for the control	Shareholding and pledges	Shareholding and pledges	Shareholding and pledges	Directors or supervisors appointed to the subordinate company by the controlling company, or controlling company appointees engaged as managerial officers of the subordinate company	Directors or supervisors appointed to the subordinate company by the controlling company, or controlling company appointees engaged as managerial officers of the subordinate company
		Shares held (thousand shares)	Shares Ratio	Shares pledged	Title	Name
TEK Holding Co., Ltd.	Direct shareholding over 50%	14,500	100.00%	_	Chairman	Bosco Foo
Keeper Technology	Direct/indirect shareholding over 50%	8,711	62.22%	_	Chairman Director	Raymond Sheu
Long Benefit Investment Co., Ltd.	Direct shareholding over 50%	29,702	100.00%	_	Chairman/President	Bosco Foo
KEYWAY INTERNATIONAL L.L.C.	Indirect shareholding over 50%	_	100.00%	_	Chairman	Bosco Foo
Yuanmao Opto-electronic Technology (Wuhan) Co., Ltd.	Indirect shareholding over 50%	_	100.00%	_	Chairman Director Director Director/President Director Supervisor	J.R. Deng Bosco Foo Raymond Sheu Tai-Hsiang Hu Mei-Ling Chiu Hsiao-PingLi
Global Unity Int’l Co, Ltd.	Indirect shareholding over 50%	1,000	100.00%	_	Chairman	Raymond Sheu
Creation New Technology Inc.	Indirect shareholding over 50%	1,000	100.00%	_	Chairman	Raymond Sheu
Kaishin Technology (Wuhan) Corporation	Indirect shareholding over 50%	_	100.00%	_	Chairman	Wen-Hu Wang
Xu Qi Co., Ltd. (Note)	Direct shareholding over 50%	850	94.44%	_	_	_

Note: In the extraordinary shareholders’ meeting on July 30, 2018, it was resolved to dissolve the company, and the dissolution date was set on July 10, 2018. Currently it is under liquidation.

230 -

6.Endorsements and guarantees

Dec. 31, 2020 Unit: NTD thousands

Counterparty of endorsements and guarantees	Guaranteed Party	Maximum Balance	Ending balance	Ending balance	Relationship	Provider of collateral	Provider of collateral	Provider of collateral	Terms and conditions or dates for rescinding the endorsement or guarantee obligation or withdrawing the collateral.	Ratio of contingency loss amounts recognized	Endorsement or guarantee operations breach applicable operational rules
			Amount	In the financial statements		Name	Volume	Value
TYNTEK	Yuanmao Opto- electronic	99,680	－	－	Parent and sub- subsidiray	－	－	－	2020/11/12	－	－
	Keeper Technology	20,000	－	－	Parent- subsidiary	－	－	－	2020/11/12	－	－

7. Financing

	7. Financing	7. Financing	7. Financing	7. Financing	7. Financing
									Dec. 31, 2020 Unit: NTD thousands
Lender	Borrower	Relationship	Maximum balance	Ending balance	Interest Rate	Total interest for the current period	Financing period	Reason for the financing	Collateral obtained or provided		Method by which the transaction was decided upon	Allowances set aside for bad debt
									Name	Amount
TYNTEK	Keeper Technology	Parent- subsidiary	20,000	10,000	2.3% (floating interest rate applied)	178	One year	Working capital	－		Pursuant to regulations of FSC	－

8. Asset leasing

Dec. 31, 2020 Unit: NTD thousands

Lessor/Lessee	Relationship	Objectleased	Objectleased	Lease term	Nature of the leasing	Method by which the leasing price was determined	Payment collection method	Comparison with ordinary leasing price levels	Total leasing price for the current period and collection/paymen	t Collection/payment for the current period	Other agreements
		Name	Location
TYNTEK Long Benefit	Parent- subsidiary	Office- No. 15, Kezhong Rd., Zhunan Township, Miaoli County		2020.01~2020.12	Operating lease	Negotiated according to the market price	One-time off	－	34	Normal	－

231 -

(II) Consolidated Financial Statements of Affiliates:

Declaration for Consolidated Financial Statements of Affiliates

Name of the Company: TYNTEK Corporation

Chairman: Bosco Foo

March 25, 2021

(III) Affiliation report: None

II. Private placement of securities in the last year up until the publication date of annual report: None.

III. Holding or disposal of the Company's shares by subsidiaries in the last financial year, up until the publication date of annual report: None.

IV. Other supplementary information: None.
232 -

Nine.Occurrences Significant to Shareholders' Interests or Securities Price, as Defined in Subparagraph 2, Paragraph 2, Article 36 of the Securities and Exchange Act, in the Last Year up Until the Publication Date of Annual Report: None.

233 -

TYNTEK Corporation

Chairman: Bosco Foo

Address of Headquarter: No. 15, Kezhong Rd., Zhunan Township, Miaoli County, Hsinchu Science Park

Address of Branch: No. 1387 and 1389, Ren-Ai Rd., Zhunan Science Park, Zhunan Township, Miaoli County

Tel of Headquarter: (037)582997

Tel of Branch: (037)582997

Publication Date: May 12, 2021

234 -

AI assistant

TYNTEK — Annual Report 2020

52074_rns_2021-07-12_80b1b9d5-e846-4ddf-80ab-4b1b722f4ccb.pdf

TYNTEK CORPORATION

TYNTEK Corporation

2020 Annual Report

May 12, 2021

I. Names, positions, contact numbers and e-mail addresses of spokesperson and acting spokesperson:

II. Address and Tel of Headquarter, branch and plants:

III. Name, Address, Website and Telephone Number of Stock Transfer Agent & Registrar:

IV. Name of the certified public accountant who duly audited the annual financial report for the most recent

fiscal year, and the name, address and telephone number of said person's accounting firm:

V. Name of any exchanges where the company's securities are traded offshore, and the method by which to

VI. Company website: WWW.TYNTEK.COM.TW

Table of Contents

One.Report to Shareholders

I. 2020 Annual Business Plan Implementation Outcome

(IV) R&D Status

II. Summary of the 2021 business plan

(I) Operating Guideline

(II) Sales forecast and basis

(III) Important Production and Sale Policies

III. The company's future development strategy, and the effect of external competition, the legal environment, and the overall business environment

2. Legal environment:

3. Overall business environment:

Two.Company Profile

Three.Corporate Governance Report

I. Organization

(5) Innovation R&D Center

Directors' and independents' background

Directors' and independents' background

Implementation of board diversity policy (guidelines):

2. Compensation to the President and vice presidents

Compensation bracket table

3. Names of managers who received employee remuneration, and the amount entitled

II. Corporate governance

Functionality of the board of directors

Review of financial reports

Assessment of effectiveness of the internal control system

Appointment of CPAs

Functionality of the Audit Committee

Information of Remuneration Committee members

Functionality of the Remuneration Committee

I. The Company's Remuneration Committee consists of 3 members.

II. Duration of service: from June 28, 2018 until June 13, 2021. The Remuneration Committee held 5 meetings (A) in the last year; details of members' attendance are as follows:

3. Directors', supervisors', and managers' participation in corporate governance-related training in 2020:

(IX) Implementation of the internal control system

TYNTEK Corporation Declaration of Internal Control System

Date: March 25, 2021

TYNTEK Corporation

III. Disclosure of CPA remuneration

IV. Change of CPA

(II) Information relating to the succeeding CPAs

VII. Relationships characterized as spouse or relatives within 2nd degree of kinship among top-ten shareholders

Relation among top ten shareholders in terms of shareholding percentage

Four.Capital Overview

I. Capital and shares

(I) Share category

(II) Sources of share capital

(III) Shareholder structure

(IV) Shareholding Distribution

(VI) Market Price, Net Worth, Earnings, and Dividends per Share for the Past 2 Years

(VII) Dividend policy and execution:

1. Dividend policy:

II. Corporate bonds, preferred shares, overseas depository receipts, employee warrants, and

merger/acquisition/divestment through exchange of shares

III. Progress on planned use of capital: Not applicable.

Five. Operational Overview

I. Business activities

(II) Industry Overview

1. Industry status and overview

3. Various development trends and competitive situations of products

(III) Technologies and R&D:

(2) R&D

II. Market, production and sales overview

2. Production process

(III) Supplies of key materials

2. Major suppliers (accounted for 10% or more of the net purchase amount)

(V) Table of Production and Sales Volume and Value in the Recent Two Years

Table of Production Volume and Value in the Recent Two Years

TYNTEK Annual Report 2020