TYNTEK — Audit Report / Information 2020

Nov 13, 2020

Stock Code: 2426

TYNTEK Corporation

Standalone Financial Statements and Independent Auditors' Report For the Years Ended December 31, 2020 and 2019

Address: No. 15, Kezhong Rd., Zhunan Township, Miaoli County, Hsinchu Science Park TEL: (03)5781616

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

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Table of Content

Item Page I. Cover 1 II. Table of Contents 2 III. Independent Auditors’ Review Report 3～5 IV. parent-only Balance Sheet 6 V. parent-only Statement of Comprehensive Income 7～8 VI. parent-only Statement of Changes in Equity 9 VII. parent-only Statement of Cash Flows 10~11 VIII. Notes to Standalone Financial Statements (I) Organization and operations 12 (II) The Authorization of Financial Statements 12 (III) Application of New and Revised International Financial Reporting Standards 12～14 (IV) Summary of Significant Accounting Policies 14～26 (V) Critical Accounting Judgements and Key Sources of Estimation and Uncertainty 26～27 (VI) Summary of Significant Accounting Items 27～62 (VII) Related party transaction 63～65 (VIII) Pledged Assets 66 (IX) Significant Contingent Liabilities and Unrecognized Commitments 66 (X) Major Disaster Loss - (XI) Material Events After the Balance Sheet Date - (XII) Significant assets and liabilities denominated in foreign currencies 66～67 (XIII) Additional Disclosures 1. Information about significant transactions 67 2. Information about investees 67～68 3. Information on investments in mainland China 68 4. Information on main investors 68 (XIV) Segments Information - IX. Details of Significant Accounting Items 77～99

No. of Notes of Financial Statements

- - - - - - - 1 2 3 4 5. 6~31 32 33 34 - - 35 36 36 36 36 - -

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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

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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:

1. 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.

2. 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.

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:

1. 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.

2. 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.

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4. Evaluate the appropriateness of accounting policies adopted and the reasonableness of accounting estimates and relevant disclosures made by the management.

5. 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 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.

6. 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.

7. 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.

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).

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. The Financial Supervisory Commission R.O.C. Approved No. Approved No. Jing-Guang-Zheng-Liu No. 0940161384 Jing-Guang-Zheng-Liu No. 0930160267

March 25, 2021

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TYNTEK Corporation parent-only Balance Sheet

For the Years Ended December 31, 2020 and 2019

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 FVTPL - current (Notes 7 and 31) Financial assets at FVTOCI - current (Notes 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 FVTPL - current (Notes 7 and 31) Financial assets at FVTOCI - non-current (Notes 8 and 31) Financial assets at amortized cost - non-current (Notes 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 asset- non-current (Notes 18, 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 Additional paid-in capital 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	U	nit: In Thousands of New Dec. 31, 2019	Tai	wan Dollars
			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

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TYNTEK Corporation

parent-only Statement of Comprehensive Income

For the Years Ended December 31, 2020 and 2019

Unit: NTD thousands; EPS in NTD

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		2019
		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		%
	( (		(		( (		( (	100 89 11 2 6 5 - 13 - 2) 1 2 6 1 ) 4 12 10 1 9

(To be Continued)

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(Continued)

(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

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TYNTEK Corporation

parent-only Statement of Changes in Equity

For the Years Ended December 31, 2020 and 2019

Unit: In Thousands of New Taiwan Dollars

Code A1 Balance at January 1, 2019 Earning appropriation and distribution for 2018 B1 Statutory reserves B3 Appropriated as special reserve B5 Cash dividends for shareholders D1 Net income of 2019 D3 Other comprehensive income after tax of 2019 D5 Total comprehensive income of 2019 M5 The difference between the equity price and the book value of acquisition or disposal of subsidiary M7 Changes in ownership interest of subsidiary Z1 Balance at December 31, 2019 Earning appropriation and distribution for 2019 B1 Statutory reserves B3 Appropriated as special reserve B5 Cash dividends for shareholders D1 Net income of 2020 D3 Other comprehensive income after tax of 2020 D5 Total comprehensive income of 2020 F3 Transfer of treasury stock L1 Redemption of treasury stock C7 Changes in associates and joint ventures accounted for using the equity method Z1 Balance at December 31, 2020		Share capital Shares (Thousands) Amount 300,621 $ 3,006,223 - - - - - - - - - - - - - - - - 300,621 3,006,223 - - - - - - - - - - - - - - - - - - 300,621 $ 3,006,223	Share capital Shares (Thousands) Amount 300,621 $ 3,006,223 - - - - - - - - - - - - - - - - 300,621 3,006,223 - - - - - - - - - - - - - - - - - - 300,621 $ 3,006,223		Capitalsurplus $ 223,897 - - - - - - 310 ) 315 223,902 - - - - - - 5,771 - 4,979) $ 224,694				Retained earnings		Undistributed earnings $ 546,433 53,782 ) 7,562 ) 360,746 ) 179,858 3,070) 176,788 - - 301,131 17,679 ) 12,108 ) 90,187 ) 304,498 7,977) 296,521 - - 11,656) $ 466,022	Other items	of equity Unrealized Gain (Loss) on Financial Assets at Fair Value Through Other ComprehensiveIncome ( $ 55,264 ) - - - - ( 3,015) ( 3,015) - - ( 58,279 ) - - - - 16,030 16,030 - - - ($ 42,249)		Treasury stock $ - - - - - - - - - - - - - - - - 30,790 30,790 ) - $ -		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 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

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TYNTEK Corporation

parent-only Statement of Cash Flows

For the Years Ended December 31, 2020 and 2019

Unit: In Thousands of New Taiwan Dollars

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)

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(Continued)

(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

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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 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 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:

1. 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. 2. 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.

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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

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 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.

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

issued into effect by the FSC
New,Revised or Amended Standards andInterpretations “Annual Improvement for the Cycle of 2018-2020” Amended “Updating the Index to the Conceptual Framework” in IFRS 3 Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture” IFRS 17 “Insurance Contracts” Amendments of IFRS 17 Amendments to IAS 1 “Classification of Liabilities as Current or Non-current” Amendments to IAS 1 "Disclosure of Accounting Policies” Amendments to IAS 8 "Definition of Accounting Estimates" Amendments to IAS 16 “Property, Plant and Equipment - Proceeds before Intended Use” Amendments to IAS 37 “Onerous Contracts - Cost of Fulfilling a Contract	Effective Date Issued by IASB (Note1)
	January 1, 2022 (Note 2) January 1, 2022 (Note 3) To be determined January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 (Note 6) January 1, 2023 (Note 7) January 1, 2022 (Note 4) January 1, 2022 (Note 5)

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.

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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.

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

1. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.

2. 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).

3. 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 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:

1. Assets held primarily for the purpose of trading;

2. Assets realized within 12 months after the balance sheet date; and

3. 14 -

4. 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:

5. Liabilities held primarily for the purpose of trading;

6. Liabilities realized within 12 months after the balance sheet date; and

7. 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.

8. (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.

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 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

• 15 -

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.

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

• 16 -

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 long-term 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.

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.

• 17 -

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

• 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.

• 18 -

• Internally generated— research and development (R&D) expenditure

Research expenditure is recognized in expenses when incurred.

1. 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.

1. 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 cash-generating unit to which the asset belongs. Corporate assets are allocated to the smallest group of cash-generating 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 standalone balance sheet when the Company becomes a party to the contractual provisions of the instruments.

• 19 -

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.

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 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:

• 20 -

• 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 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.

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 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.

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

• 21 -

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 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.

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 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.

1. Equity instrument

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.

1. Financial liability

2. (1) Subsequent measurement

3. 22 -

The Company’s 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.

(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 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.

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 Company deals with the contracts separately.

1. 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.

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.

(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.

1. The Company 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.

• 23 -

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-ofuse assets are presented on a separate line in the standalone 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 Company remeasures the lease liabilities with a corresponding adjustment to the right-of-use assets. However, if the carrying amount of the right-of-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 COVID19 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

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.

• 24 -

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) 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.

1. 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.

1. 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.

(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

2. 25 -

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.

2. 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 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.

1. 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

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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

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.

VI. Cash and equivalents

Cash and equivalents
Cash on hand and petty cash Check and demand (current) deposit Cash equivalents (bank time deposits with original maturity date of less than 3 months)	Dec. 31,2020 $ 306 495,583 56,960 $ 552,849	Dec. 31,2019
			$ 281 525,060 43,050 $ 568,391

The interest rate ranges of cash in banks at the balance sheet date are as follows:

VII.

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	Dec. 31,2020 0.001%~1.400% Dec. 31,2020 $ 214,396 15 $ 214,411	Dec. 31,2019	Dec. 31,2019
		0.001%~2.270% Dec. 31,2019
			$ 304,801 15 $ 304,816

(To be Continued)

• 27 -

(Continued)

Financial assets-non-current Financial assets designated as at FVTPL Non-derivative financial assets - Foreign unlisted stocks Financial assets at FVTOCI Equityinvestmentinstruments 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 $ 142,166 Dec. 31, 2020 $ - 6,750 $ 6,750 $ 6,579 26,286 $ 32,865	Dec. 31,2019	Dec. 31,2019
		$142,166 Dec. 31, 2019
			$ 6,071 5,152 $ 11,223 $ 1,617 14,260 $ 15,877

VIII. Financial assets at FVTOCI

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.

• 28 -

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 the original maturity date of less 3 months and the those with more than 3 months were 0.20%–1.50% and 1.60%– 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 33.

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

• 29 -

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 Dec. 31, 2019 Gross carrying amount Loss allowance (lifetime ECLs) Amortized cost	O/A 1–120 days $ 648,090 - $ 648,090 O/A 1–120 days $ 625,817 - $ 625,817		121–180 days $ 145,067 - $ 145,067 121–180 days $ 106,526 305) $ 106,221		181–365 days $ 7,056 3,596) $ 3,460 181–365 days $ 3,980 3,980) $ -	Over 365 days $ 7,838 ( 7,838) $ - Over 365 days $ 729 ( 729) $ -		Total
				(			(	$ 808,051 11,434) $ 796,617 Total
		(		(		(	(	$ 737,052 5,014) $ 732,038

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:
			2020		2019
	Opening balance	$	5,014	$	5,014
	Impairment loss for the current year		6,420		-
	Closing balance	$	11,434	$	5,014
XI.	Inventories
		Dec. 31,2020		Dec. 31,2019
	Finished goods	$	239,707	$	237,843
	Work in process		272,401		225,903
	Raw materials		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.

• 30 -

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

thousand and NT$0, respectively. 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 Name ofSubsidiary TEK Holding Co., Ltd. Long Benefit Investment Co., Ltd. Keeper Technology Xu Qi Co., Ltd.			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 and votingrights
	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.

As stated in Note 32, the Company provides financial guarantees for subsidiaries’ bank loans.

(II) Investments in Associates

• 31 -

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	Dec. 31,2019
	(	(	$ 121,783 5,491 127,274 4,210) $ 123,064

1. Material associates

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

balance sheet date are as follows
Companyname Hsinjing (formerly known as Tynsolar)	Percentage ofownership and votingrights
	Dec. 31,2020 22.79%	Dec. 31,2019
		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 abovementioned 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.

• 32 -

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.

Hsinjing

equity method is adopted. Hsinjing
Current asset non-current assets Current liabilities non-current liabilities Equity Operating income Net loss of the current year Other comprehensive income Total comprehensive income Cash flows Operating activities Investing activities Financing activities Net cash inflow (outflow)	Dec. 31, 2020 $ 715 509,785 ( 16,355 ) - $ 494,145 2020 $ - $ 5,119 ( 219) $ 4,900 ( $ 2,392 ) ( 13,589 ) 14,000 ($ 1,981)	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

1. Aggregate information on associates that are not individually material

The Company’s share of Net income of the continuing operations		2020 $ 500		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.

• 33 -

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-ownedland $ 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

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

se arrangements right-of-use asset
Right-of-use assets amounts Land Buildings Transport Equipment Other Equipment	Dec. 31, 2020 $ 85,643 - - 1,549 $ 87,192	Dec. 31, 2019
			$ 88,147 1,637 191 1,398 $ 91,373

• 34 -

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%		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

Other lease information
Short-term lease expense Total cash outflow for leases		2020 $ 871 $ 6,478)		2019
	(		(	$ 900 $ 7,405)

• 35 -

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	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 $ 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 straight-line basis based on 55 years of useful life. All the Company’s investment property is selfowned 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.

• 36 -

XVII. Intangible asset

Intangible asset
Cost Balance at January 1, 2020 Acquired separately Balance at December 31, 2020 Accumulated amortization Balance at January 1, 2020 Amortization expenses Balance at December 31, 2020 Net amount at December 31, 2020 Cost Balance at January 1, 2019 Acquired separately Balance at December 31, 2019 Accumulated amortization Balance at January 1, 2019 Amortization expenses Balance at December 31, 2019 Net amount at December 31, 2019	Computersoftware $ 35,151 92 $ 35,243 $ 33,964 729 $ 34,693 $ 550 $ 35,015 136 $ 35,151 $ 33,225 739 $ 33,964 $ 1,187	Other intangible assets $ 1,492 - $ 1,492 $ 244 86 $ 330 $ 1,162 $ 1,492 - $ 1,492 $ 158 86 $ 244 $ 1,248		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

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 16 to 18 years

XVIII. Other assets

Other assets
Current Prepayments Restricted bank demand deposits (Note 33) Others	Dec. 31,2020 $ 7,734 87 42 $ 7,863	Dec. 31,2019
			$ 6,047 1 22 $ 6,070

(To be Continued)

• 37 -

(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

1. 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:

2. (1) Current ratio: The ratio of current assets to current liabilities, which shall not be less than 100%;

3. (2) Debt ratio: The ratio of total liabilities to net value of tangible assets, which shall not be higher than 200%;

4. 38 -

5. (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%;

6. (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.

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 2022, 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.

1. 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

Accounts payable
Accounts payable From operations - non-related parties From operations - related parties	Dec. 31,2020 $ 320,899 755 $ 321,654	Dec. 31,2019
			$ 248,092 839 $ 248,931

• 39 -

XXI. Other liabilities

XXI.	Other liabilities
XXII.	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 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 $ 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. 31,2020 $ 15,428	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 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.

• 40 -

XXIII. Post-employment benefit plans

(I) Defined contribution plans

The Company adopted a pension plan under the Labor Pension Act (LPA), which is a statemanaged 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:

benefit plan 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
	(	(	$ 93,136 52,979) $ 40,157

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)	Present value of defined benefit obligation $ 94,541 997 935 1,932	Fair value of plan assets ($ 57,198) - ( 564) ( 564)	Net defined benefit liability	Net defined benefit liability
		( ( (		$ 37,343 997 371 1,368

(To be Continued)

• 41 -

(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:

1. 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.

2. 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.

3. 42 -

4. 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:

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:

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	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.

XXIV. (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.

• 43 -

(II) Additional paid-in capital

Additional paid-in capital
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.

1. 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).

2. 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.

3. (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. When all or a portion of the shareholders’ bonus or legal reserve and capital reserve distributed by the Company are made in the form of cash, the Board of Directors may be authorized to execute the distribution in accordance with the resolution of the Board of Directors’ Meeting attended by more than two thirds of the Directors and the consents of a majority of the attending Directors. In addition, report to the shareholders’ meeting shall also be made.

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

• 44 -

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.

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 JinGuan-Zheng-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.

• 45 -

(IV) Special reserves Opening balance Appropriated as special reserve Amount debited to other equity items Closing balance		2020 $ 76,927 12,108 $ 89,035		2019
				$ 69,365 7,562 $ 76,927

• (V) Other items of equity

• Exchange Differences in Translating the Financial Statements of Foreign Operations

Opening balance Incurred in the current year Share of subsidiaries and associates accounted for using equity method Relevant income taxes Closing balance		2020 $ 30,757 ) 12,285 2,457) $ 20,929)		2019
	( ( (		( ( (	$ 21,662 ) 11,368 ) 2,273 $ 30,757)

1. Unrealized Gain (Loss) on Financial Assets at Fair Value Through Other Comprehensive Income

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)
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		-		-

(VI) Treasury stock

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, 2020, 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.

• 46 -

XXV. Revenue

V.	Revenue
				2020				2019
	Sales revenue		$	2,200,552		$		2,015,660
	Disaggregation of revenue from product	contract revenue
				2020				2019
	Sales revenue is broken down by main
	products
	SI components		$	1,239,199		$		1,030,919
	LED components			923,261				924,626
	Others			38,092				60,115
			$	2,200,552		$		2,015,660
(I)	Contract balance
		Dec.	31,2020	Dec.	31,2019			Jan.1,2019
	Accounts receivable (Note 10)	$	796,386	$	727,829		$	727,718
	Contract liability (listed in Other
	liabilities)
	Sales	$	914	$	-		$	-

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)

income from continuing operations Net income is from the following items: Net amount of other gains (losses)
Losses on disposal of property, plant and equipment Others		2020 $ 3,930 ) 328 $ 3,602 )		2019
	( (			$ - - $ -

• 47 -

(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 (V) Financial costs Interest on bank loans Interest on lease liabilities Less: The amount of the cost of assets included for meeting the criteria		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 2020 $ 19,056 1,500 - $ 20,556		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 2019
			(	$ 19,432 1,543 1,926) $ 19,049

• 48 -

Relevant information on capitalization of interest is as follows:

Amount of capitalized interest Interest rate of capitalized interest (VI) Depreciation and amortization Property, Plant and Equipment right-of-use asset Investment Property Non-current assets held for sale Intangible asset Total An analysis of depreciation by function Operating cost Operating expenses An analysis of amortization by function Operating cost Operating expenses (VII) Direct operating expenses of investment property Direct operating expenses of investment property Property that generates rental income (VIII) Employee benefits expense Short-term employee benefits Long-term employee benefits Post-employment benefits (Note 23) Defined contribution plans Defined benefit plan Total employee benefits expense		2020 $ - - 2020 $ 192,259 4,661 1,418 3 815 $ 199,156 $ 177,100 21,241 $ 198,341 $ 23 792 $ 815 2020 $ - 2020 $ 485,943 1,879 16,512 1,102 $ 505,436		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

(To be Continued)

• 49 -

(Continued)

An analysis by function Operating cost Operating expenses		2020 $ 341,079 164,357 $ 505,436		2019
				$ 298,472 131,307 $ 429,779

(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

below: Ratio
Employee compensation Directors' remuneration	2020 7% 3%	2019
		5% 2%

Amount

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

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.

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)

website of the 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)

• 50 -

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

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

Deferred tax Incurred in the current year - Translation of foreign operations - Unrealized gain (loss) on financial assets at FVTOC Income tax recognized in other comprehensive income		2020 $ 2,457 ) 3,398) $ 5,855)		2019
	( ( (			$ 2,273 235 $ 2,508

• 51 -

(III) Current tax assets and liabilities

Current tax assets and liabilities
Current tax assets Income tax refund receivable Current tax liabilities Income tax payable	Dec. 31, 2020 $ - $ 4,908	Dec. 31, 2019
			$ 15,968 $ -

(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

• 52 -

2019

2019
Deferred tax assets Temporary difference Impairment losses, including loss allowance Financial assets at FVTOCI Provisions 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		Opening balance	Recognized in profit or loss (including effect of change in the tax rate) $ - - 204 ( 107 ) ( 2 ) ( 14,848 ) - ( 14,753 ) 7,018 ($ 7,735) ($ 812)	Recognized in other comprehensive income (including effect of change in the tax rate)			Closing balance
		$ 18,317 905 3,270 4,005 1,376 40,804 5,415 74,092 53,140 $ 127,232 $ 9,151			$ - 235 - - - - 2,273 2,508 - $ 2,508 $ -		$ 18,317 1,140 3,474 3,898 1,374 25,956 7,688 61,847 60,158 $ 122,005 $ 8,339

• (V) Deductible temporary difference of deferred tax assets not recognized in the standalone balance sheet

Deductible temporary difference Impairment losses, including loss allowance Investment losses	Dec. 31, 2020 $ 15,746 - $ 15,746	Dec. 31, 2019	Dec. 31, 2019
			$ 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

Balance of unused loss
carryforwards $ 113,227 84,625 37,747 33,740 $ 269,339	Last valid year
	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.

• 53 -

XXVIII. 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:

per share were as follows:
Net income of the current year Net income in the computation of diluted 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 Weighted average number of ordinary shares used in the computation of diluted earnings per share		2020 $ 304,498 2020 299,849 1,816 301,665

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.

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.

• 54 -

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 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		Level 1 $ 214,396 - 15 $ 214,411 $ 6,750 - $ 6,750		Level 2 $ - - - $ - $ - - $ -		Level 3 $ - 142,166 - $ 142,166 $ - 32,865 $ 32,865	Total
							$ 214,396 142,166 15 $ 356,577 $ 6,750 32,865 $ 39,615

• 55 -

Dec. 31, 2019

Dec. 31, 2019	Dec. 31, 2019	Dec. 31, 2019
Level 1 Level 2 Level 3 Total Financial assets at FVTPL Domestic listed stocks $ 304,801 $ - $ - $ 304,801 Foreign unlisted stocks - - 142,166 142,166 Gold passbook 15 - - 15 Total $ 304,816 $ - $ 142,166 $ 446,982 Financial assets at FVTOCI Investment in equity instruments - Domestic listed stocks $ 11,223 $ - $ - $ 11,223 - Stocks listed in emerging stock markets and unlisted stocks - - 15,877 15,877 Total $ 11,223 $ - $ 15,877 $ 27,100 There were no transfers between Level 1 and Level 2 fair value in 2020 and 2019. Reconciliation of Level 3 fair value measurements of financial instruments 2020 Financial assets at FVTPL Financial assets at FVTOCI Financial asset Equity instrument Equity instrument Opening balance $ 142,166 $ 15,877 Recognized in other comprehensive income (unrealized gain (loss) on financial assets at FVTOC) - 16,988 Closing balance $ 142,166 $ 32,865 2019 Financial assets at FVTPL Financial assets at FVTPL Financial asset Equity instrument Equity instrument Opening balance $ 306,989 $ 17,057 Reclassification ( 302,873 ) - Recognized in profit or loss (other gains or losses) (Note 7) 138,050 - Recognized in other comprehensive income (unrealized gain (loss) on financial assets at FVTOC) - ( 1,180) Closing balance $ 142,166 $ 15,877			Total
	Equity instrument
	$ 15,877 16,988 $ 32,865 Financial assets at FVTPL
	Equity instrument
	(	$ 17,057 - - 1,180) $ 15,877

1. Reconciliation of Level 3 fair value measurements of financial instruments 2020

2. 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.

• (III) Categories of financial instruments

• 56 -

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 short-term 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.

1. 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

• 57 -

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 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

• 58 -

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	Dec. 31, 2020 $ 573,197 316,559 502,067 1,033,440	Dec. 31, 2019
		$ 633,639 558,163 531,422 1,045,200

Sensitivity analysis

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 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.

• 59 -

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.

1. 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.

1. 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.

• 60 -

(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

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

lease liabilities Dec. 31, 2019		Less than One Year		1-5Years $ 14,398	5-10Years		10-15Years		15-20Years		Over 20 Years
		$ 4,571			$ 16,193		$ 16,193		$ 16,193		$ 51,546

Dec. 31, 2019
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 Financial guarantee liability	Less than 1 year $ 248,931 52,753 200,000 558,163 4,672 119,930 $ 1,184,449		Over 1 year
			$ - - 845,200 - 87,301 - $ 932,501

• 61 -

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 nonderivative 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

• 62 -

XXXII. Related party transaction

Details of transactions between the Company and related parties are as follows.

• (I) Related party name and category

Related party name and category
Related Party Name Long Benefit Investment Co., Ltd. (Long Benefit) Keeper Technology Co. Ltd. (Keeper Technology) Xu Qi Co., Ltd. (Xu Qi) Yuanmao Opto-electronic Technology (Wuhan) Co., Ltd. (Yuanmao) Uni Top Optical Corporation (Uni Top Optical) Hsinjing Holding Co. Ltd. (Hsinjing) Tynsolar Corporation (Tynsolar) Dingyu Solar Co., Ltd. (Dingyu) Suncruise Tech Co., Ltd. (Suncruise Tech) Xu Guang Optoelectronics Co., Ltd.(Xu Guang) Summit-tech Resource Corp. (Summit-tech) Megacrystal Co. Ltd. (Megacrystal) Li Zhan Optoelectronics Co., Ltd.(Li Zhan)	Related Party Category
	Subsidiary Subsidiary Subsidiary Sub-subsidiary Associate by investment using the equity method Associate by investment using the equity method Subsidiary of Hsinjing (Note 1) Subsidiary of Hsinjing (Note 1) Subsidiary of Hsinjing (Note 1) Sub-subsidiary of Hsinjing (Note 1) Substantive related party Substantive related party 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

Operating income
Line Item Sale	Category of related party Sub-subsidiary Associate Substantive related party		2020 $ 6,411 2 10,743 $ 17,156		2019
					$ 10,137 13,309 16,685 $ 40,131

• (III) Purchase of goods

Purchase of goods
Category of related party Substantive related party		2020 $ 7,663		2019
				$ 4,266

• 63 -

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

LineItem Accounts receivable - related parties Other receivables - related parties	Category of related party Sub-subsidiary Substantive related party Associate Subsidiary		Dec. 31,2020 $ 260 900 3 1,163 8,016 $ 9,179		Dec. 31,2019
					$ 5,440 - - 5,440 8,016 $ 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.

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

LineItem 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

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

• 64 -

(VIII) Other income

Other income
LineItem Rent income Other income	Category of related party Subsidiary Long Benefit Associate Suncruise Tech Hsinjing Subsidiary Sub-subsidiary		2020 $ 34 $ - - $ - $ 178 16 $ 194		2019
					$ 34 $ 126 253 $ 413 $ 182 22 $ 204

(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.

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.

(X) Maximum endorsement/

Endorsement/guarantee provided

manufacturers for contract processing. Maximum endorsement/ Endorsement/guarantee provided
Category of related party Subsidiary guarantee amount Transaction Amounts	Dec. 31,2020 $ - - $ -	Dec. 31,2019
		(	$ 124,930 119,930) $ 5,000

(XI) Compensation of key management personnel

The total compensation of directors and other key management personnel is as follows:

Short-term employee benefits Post-employment benefits		2020 $ 34,557 650 $ 35,207		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.

• 65 -

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

currencies were as follows: Dec. 31, 2020
Foreigncurrency asset Monetary items USD JPY CNY	Foreigncurrency $ 42,802 2,296 104,382	Exchangerate 28.48 0.28 4.38	Carrying amount
			$ 1,219,009 634 456,880

(To be Continued)

• 66 -

(Continued)

Foreigncurrencyliabilities Monetary items USD JPY CNY Dec. 31, 2019 Foreigncurrency asset Monetary items USD JPY CNY Foreigncurrencyliabilities Monetary items USD JPY CNY	Foreigncurrency $ 1,211 469,577 2,384 Foreigncurrency $ 35,996 2,423 103,701 573 439,794 2,405	Exchangerate 28.48 0.28 4.38 Exchangerate 29.98 0.28 4.31 29.98 0.28 4.31	Carrying amount
			$ 34,495 129,744 10,433 Carrying amount
			$ 1,079,173 669 446,431 17,181 121,383 10,352

The (unrealized) gains and losses on foreign currency exchange with a material impact are as follows:

follows:
Foreign currency USD JPY CNY Others	2020	Net Foreign Exchange Gain (Loss) $ 2,067 ( 1,412 ) 20,553 6 $ 21,214	2019
	Exchange rate 28.48 (USD:NTD) 0.28 (JPY:NTD) 4.38 (CNY:NTD)		Exchange rate 29.98 (USD:NTD) 0.28 (JPY:NTD) 4.31 (CNY:NTD)	Net Foreign Exchange Gain (Loss)
		(		( (	$ 16,888 ) 7,051 3,175 2,603 $ 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.

• 67 -

• Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital: None.

• Trading in derivative instruments: None.

• 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.

• 68 -

TYNTEK Corporation

Financing provided to others

For the Year Ended December 31, 2020

Table 1

Unit: In Thousands of New Taiwan Dollars

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	Coll	ateral	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 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.

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%.

• 69 -

TYNTEK Corporation Endorsement/guarantee provided

For the Year Ended December 31, 2020

Table 2

Unit: In Thousands of New Taiwan Dollars/Foreign Currencies

No. (Note 1)	Company Name	Guaranteed Party	Guaranteed Party	Maximum Endorsement/ Guarantee Amount for Individual Party (Note 3)	Maximum Endorsement/ Guarantee Balance (Note 4)	Endorsement/ Guarantee Balance at the End of Year (Note 5)	Transaction Amounts (Note 6)	Endorsement Amount with Assets Pledged	Ratio of Accumulated Endorsement/ Guarantee to Net Value of the Latest Financial Statements (%)	Maximum Endorsement/ Guarantee 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.

• 70 -

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		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)

• 71 -

(Continued)

(Continued)
Holding Company Name	Type and Name of Marketable Securities	Relationship with the Holding Company	Financial Statement Account		March 31,2020			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.

• 72 -

TYNTEK Corporation

Information on investees (Name and location of Investor)

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	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)

• 73 -

(Continued)

(Continued)
Investor	Investor Company	Location	Main Businesses and Products	Investment Amount		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
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.

• 74 -

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:

(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	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 products manufacturing	$ 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 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:

Limit on investment amount in mainland China:
Accumulated Outward Remittance for Investment in Mainland China as of December 31, 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

• 75 -

TYNTEK Corporation

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

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

Name of Investee	Transaction Type	Amount		Transaction Terms		AccountsReceivable (Payable)	AccountsReceivable (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%	$ -

• 76 -

§Table of Contents of Significant Accounting Statements§

Item	No./Index
Statement of Assets, Liabilities, and Equity Items
Statement of Cash and Cash Equivalents	Statement 1
Statement of Financial Assets at FVTPL - Current	Statement 2
Statement of Financial Assets at FVTOCI - Current	Statement 3
Statement of Financial Assets at Amortized Cost	Statement 4
Statement of Notes Receivable	Statement 5
Statement of Accounts Receivable	Statement 6
Statement of Other Receivables	Statement 7
Statement of Inventories	Statement 8
Statement of Other Current Assets	Note 18
Statement of Financial Assets at FVTPL - Non-current	Statement 9
Statement of Financial Assets at FVTOCI - Non-current	Statement 10
Statement of Changes in Investment Using the Equity Method	Statement 11
Statement of Changes in Property, Plant and Equipment	Note 14
Statement of Changes in Accumulated Depreciation of Property,	Note 14
Plant and Equipment
Statement of Changes in Accumulated Impairment of Property,	Note 14
Plant and Equipment
Statement of Changes in Right-of-use Assets	Statement 12
Statement of Changes in Accumulated Depreciation of Right-of-use	Statement 13
Assets
Statement of Changes in Investment Property	Note 16
Statement of Changes in Accumulated Depreciation of Investment	Note 16
Property
Statement of Changes in Intangible Assets	Note 17
Statement of Deferred Income Tax Assets	Note 27
Statement of Other Financial Assets - Non-current	Note 18
Statement of Other Current Assets	Note 18
Statement of Short-term Borrowings	Statement 14
Statement of Accounts Payable	Statement 15
Statement of Other Payables and Other Current Liabilities	Note 21
Statement of Lease Liabilities	Statement 16
Statement of Long-term Borrowings	Note 19
Statement of Provisions - Non-current	Note 22
Statement of Deferred Income Tax Liabilities	Note 27
Statement of Other Current Liabilities	Note 21
Statement of Gains or Losses
Statement of Operating Income	Statement 17
Statement of Operating Costs	Statement 18
Statement of Production Overheads	Statement 19
Statement of Operating Expenses	Statement 20
Statement of Other Gains or Losses - Net	Note 26
Statement of Financial Costs	Note 26
Table of Aggregate Employee Benefit, Depreciation, and	Statement 21
Amortization Expenses Incurred in Current Period by
Function

• 77 -

TYNTEK Corporation

Statement of Cash and Cash Equivalents

Dec. 31, 2020

TYNTEK Corporation Statement of Cash and Cash Equivalents Dec. 31, 2020	TYNTEK Corporation Statement of Cash and Cash Equivalents Dec. 31, 2020	TYNTEK Corporation Statement of Cash and Cash Equivalents Dec. 31, 2020
Statement 1 Unit: In Thousands of New Taiwan Dollars/Foreign Currencies Item Amount Cash on hand and petty cash $ 306 Cash in banks Check deposit 480 Demand deposits in NTD 92,826 Demand deposits in foreign currencies (Note) 402,277 Cash equivalents (bank time deposits with original maturity date of less than 3 months) 56,960 552,543 $ 552,849
		$ 306 480 92,826 402,277 56,960 552,543 $ 552,849

Note: Including US$9,039,000 (exchange rate US$1=NT$28.48), JJPY 2,284,000 (exchange rate JPY 1=NT$0.2763), HKD (exchange rate HKD 1=NT$3.673), EUR 1,000 (exchange rate EUR 1=NT$35.020), CNY 32,914,000 (exchange rate CNY 1=NT$4.377), and CHF 3,000 (exchange rate CHF 1=NT$32.31)

• 78 -

TYNTEK Corporation

Statement of Financial Assets at FVTPL - Current

Dec. 31, 2020

Statement 2

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

Name of financial instruments Stocks Unity Opto Technology co., Ltd. Para Light Electronics Co., Ltd. Fittech Co., Ltd. Subtotal Gold passbook First Commercial Bank	Number of shares/lots 264 1 1,284 -	Face value (NTD) $ 10 10 10 -		Total $ 2,640 13 12,837 15,490 - $ 15,490	Interest rate - - - -	Cost of acquisition $ 6,978 14 28,685 35,677 15 $ 35,692	Fair value Unit price (NTD) Total $ - $ - 10.85 15 167.00 214,381 214,396 - 15 $ 214,411	Fair value Unit price (NTD) Total $ - $ - 10.85 15 167.00 214,381 214,396 - 15 $ 214,411	Changes in fair value attributable to changes in credit risk $ - - - - - $ -	Remarks
							Unit price (NTD) $ - 10.85 167.00 -
										－ － － －

• 79 -

TYNTEK Corporation

Statement of Financial Assets at FVTOCI - Current

Dec. 31, 2020

Statement 3

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

Name of financial instruments Stocks Unity Opto Technology co., Ltd. Para Light Electronics Co., Ltd.	Number of shares/lots 836 622	Face value $ 10 10		Total $ 8,363 6,222 $ 14,585	Interest rate - -	Cost of acquisition $ 32,192 12,067 $ 44,259	Accumulated impairment $ - -	Fair value Unit Price Total $ - $ - 10.85 6,750 $ 6,750	Fair value Unit Price Total $ - $ - 10.85 6,750 $ 6,750	Remarks
								Unit Price $ - 10.85
										－ －

• 80 -

TYNTEK Corporation

Statement of Financial Assets at Amortized Cost

Dec. 31, 2020

Statement 4

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

Name Current Hsinchu Branch, Cathay United Bank Time deposit of US$1,300,000 Time deposit of US$1,535,000 Time deposit of US$1,000,000 Time deposit of US$1,682,000 Time deposit of US$1,750,000 Hsinchu Branch, Taipei Fubon Bank Time deposit of US$3,487,000 Time deposit of US$1,750,000 Time deposit of US$1,523,000 Time deposit of US$2,422,000 Business Department, O-Bank (in Hsinchu Science Park) Time deposit of US$276,000 Time deposit of US$1,280,000 Non-current Science Based Industrial Park Branch, Bank of Taiwan Time deposit of NT$2,057,000 Time deposit of NT$1,032,000 Time deposit of NT$3,447,000 Subtotal	Summary Time deposits with original maturity date of less than 3 months - pledge Time deposits with original maturity date of less than 3 months - pledge Time deposits with original maturity date of less than 3 months - pledge Time deposits with original maturity date of less than 3 months - pledge Time deposits with original maturity date of more than 3 months Time deposits with original maturity date of more than 3 months - pledge Time deposits with original maturity date of less than 3 months - pledge Time deposits with original maturity date of less than 3 months - pledge Time deposits with original maturity date of less than 3 months - pledge Time deposits with original maturity date of less than 3 months - pledge Time deposits with original maturity date of more than 3 months - pledge Time deposits with original maturity date of more than 1 year Time deposits with original maturity date of more than 1 year Time deposits with original maturity date of more than 1 year		Amount $ 37,024 43,716 28,480 47,903 49,840 99,303 49,830 43,373 68,970 7,867 36,454 512,760 2,057 1,032 3,477 6,566 $ 519,326	Period 109.11.06~110.02.06 109.12.09~110.03.09 109.11.07~110.02.07 109.11.07~110.02.07 109.02.14~110.02.14 109.10.02~110.04.02 109.10.09~110.01.09 109.11.08~110.02.08 109.10.09~110.01.09 109.12.16~110.03.16 109.10.07~110.04.07 106.05.25~112.05.25 106.05.23~112.05.23 106.11.07~112.11.07	Annual interest rate (%) 0.20 0.20 0.20 0.20 1.50 0.35 0.25 0.25 0.25 0.37 0.35 0.815 0.815 0.755	Pledge/Security
						Yes Yes Yes Yes None Yes Yes Yes Yes Yes Yes Yes Yes Yes

Note: The U.S. dollar exchange rate is US$1=NT$28.48.

• 81 -

TYNTEK Corporation

Statement of Notes Receivable

Dec. 31, 2020

Statement 5

Unit: In Thousands of New Taiwan Dollars

Customer name Non-related parties Shina Opto Electronics Co., Ltd. Daina Electronics Co., Ltd. Joinscan Electronics Co., Ltd. Jiann Wa Electronics Co., Ltd.	Summary Payment for purchase Payment for purchase Payment for purchase Payment for purchase		Amount
			$ 104 68 31 28 $ 231

• 82 -

TYNTEK Corporation

Statement of Accounts Receivable

Dec. 31, 2020

Statement 6

Unit: In Thousands of New Taiwan Dollars

Customer name Non-related parties FUSLEY MINERALS GROUP LIMITED LITE ON OPTO TECHNOLOGY (CHANGZHOU) CO., LTD. Long Lake CO., LTD. EVERLIGHT ELECTRONICS (CHINA) CO., LTD. Everlight Electronics Co., Ltd. Others (Note) Less: Allowance for impairment loss	Summary Payment for purchase Payment for purchase Payment for purchase Payment for purchase Payment for purchase		Amount
		(	$ 211,749 134,368 67,810 62,496 51,069 279,165 806,657 11,434) $ 795,223

Note: The balance of each customer did not exceed 5% of the balance of this account.

• 83 -

TYNTEK Corporation

Statement of Other Receivables

Dec. 31, 2020

Statement 7

Unit: In Thousands of New Taiwan Dollars

Item/Name Non-related parties Tax refund receivable Other receivables Related parties Keeper Technology	Summary Business tax refund receivable Interest receivable Loans and interest receivable		Amount
			$ 7,469 211 7,680 8,016 $ 15,696

• 84 -

TYNTEK Corporation

Statement of Inventories

Dec. 31, 2020

Statement 8

Unit: In Thousands of New Taiwan Dollars

Item Raw materials Materials Work in process Finished goods		Amount	Amount
		Cost $ 117,455 21,615 272,401 239,707 $ 651,178	Net	realizable value (Note)
				$ 127,615 21,658 468,477 327,712 $ 945,462

Note: The value of inventories shall be based on the cost and 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 cost of completion and the selling expenses.

• 85 -

TYNTEK Corporation

Statement of Financial Assets at FVTPL - Non-current For the Year Ended December 31, 2020

Statement 9

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

Name of financial instruments Foreign unlisted stocks Fujian Zhaoyuan Photoelectric Co., Ltd.	Opening	balance Fair value $ 142,166	Increase for the current year Shares Fair value - $ -	Increase for the current year Shares Fair value - $ -	Decrease for the current year Shares Fair value - $ -	Decrease for the current year Shares Fair value - $ -	Valuation gains or losses $ -	Closing balance Shares Fair value - $ 142,166	Closing balance Shares Fair value - $ 142,166	Security or pledge None	Remarks
	Shares -		Shares -		Shares -			Shares -
											Note

Note: A limited liability company without issue of stock.

• 86 -

TYNTEK Corporation

Statement of Financial Assets at FVTOCI - Non-current For the Year Ended December 31, 2020

Statement 10

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

Name Stocks listed in emerging stock markets and unlisted stocks Chipwell Tech Corporation Brightek Optoelectronic Co., Ltd.	Opening	balance Fair value $ 1,617 14,260 $ 15,877	Increase for the current year Shares (Thousands) Amount - $ - - - $ -	Increase for the current year Shares (Thousands) Amount - $ - - - $ -	Decrease for the current year Shares (Thousands) Amount - $ - - - $ -	Decrease for the current year Shares (Thousands) Amount - $ - - - $ -	Valuation gains or losses $ 4,963 12,025 $ 16,988	Closing balance Shares (Thousands) Fair value 330 $ 6,580 1,020 26,285 $ 32,865	Closing balance Shares (Thousands) Fair value 330 $ 6,580 1,020 26,285 $ 32,865	Accumulated impairment Not applicable Not applicable	Security or pledge None None	Remarks
	Shares (Thousands) 330 1,020		Shares (Thousands) - -		Shares (Thousands) - -			Shares (Thousands) 330 1,020
												－ －

Note: The decrease in the current year is due to the completion of the liquidation of the investee.

• 87 -

TYNTEK Corporation

Statement of Changes in Investment Using the Equity Method For the Year Ended December 31, 2020

Statement 11 Investor Company Valuation under equity method Unlisted stocks TEK Holding Co., Ltd. Long Benefit Investment Co., Ltd. Coretech Optical Co., Ltd. Keeper Technology Xu Qi Co., Ltd. Publicly listed companies Hsinjing Holding Co., Ltd. Less: Accumulated impairment - Investments accounted for using equity method	Opening	balance Amount $ 290,279 332,431 5,491 30,615 3,231 121,783 783,830 ( 15,746) $ 768,084	Increase for the current year Shares Amount (Note 1) - $ 206,065 11,202 216,383 - 500 - 2,152 - 1 - 2,367 427,468 - $ 427,468	Increase for the current year Shares Amount (Note 1) - $ 206,065 11,202 216,383 - 500 - 2,152 - 1 - 2,367 427,468 - $ 427,468	Decrease for the current year Shares Amount (Note 2) - ( $ 28,182 ) - ( 130,847 ) - - - ( 190 ) - - ( 87 ) ( 1,567) ( 160,786 ) - ($ 160,786)	Decrease for the current year Shares Amount (Note 2) - ( $ 28,182 ) - ( 130,847 ) - - - ( 190 ) - - ( 87 ) ( 1,567) ( 160,786 ) - ($ 160,786)		Closing balance		Amount $ 468,162 417,967 5,991 32,577 3,232 122,583 1,050,512 15,746) $ 1,034,766	Unit: In Thousands of New Taiwan Dollars/Thousand Shares Market price or equity value (Note 3) Unit Price Total Price Pledge $32.29 $ 468,162 None 14.05 417,967 None 29.96 5,991 None 10.82 32,577 None 3.80 3,232 None 43.95 782,050 None 1,709,979 ( 15,746) $ 1,694,233	Unit: In Thousands of New Taiwan Dollars/Thousand Shares Market price or equity value (Note 3) Unit Price Total Price Pledge $32.29 $ 468,162 None 14.05 417,967 None 29.96 5,991 None 10.82 32,577 None 3.80 3,232 None 43.95 782,050 None 1,709,979 ( 15,746) $ 1,694,233	Unit: In Thousands of New Taiwan Dollars/Thousand Shares Market price or equity value (Note 3) Unit Price Total Price Pledge $32.29 $ 468,162 None 14.05 417,967 None 29.96 5,991 None 10.82 32,577 None 3.80 3,232 None 43.95 782,050 None 1,709,979 ( 15,746) $ 1,694,233
	Shares 14,500 18,500 200 3,000 850 17,881		Shares - 11,202 - - - -		Shares - - - - - ( 87 )		Shares 14,500 29,702 200 3,000 850 17,794	Percentage of Ownership % 100 100 2.08 21.43 94.44 22.79			Unit Price $32.29 14.05 29.96 10.82 3.80 43.95
		(				( ( ( ( ( (			(			(	None None None None None None

Note 1: The increase of NT$427,458,000 this year included NT$397,866,000 of investment gains recognized, NT$3,000 of capital surplus - the change in the net value of the equity of associates using the equity method, NT$17,000 of remeasurement of defined benefit plans using the equity method, NT$20,346,000 of exchange differences in translating the financial statements of foreign operations, and NT$9,234,000 of unrealized gains or losses on financial assets of subsidiaries and associates recognized using the equity method.

Note 2: The decrease of NT$160,786,000 this year included NT$133,160,000 of investment losses recognized, NT$2,321,000 of unrealized gains or losses on financial assets of subsidiaries and associates recognized using the equity method, NT$8,062,000 of exchange differences in translating the financial statements of foreign operations, NT$4,982,000 of capital surplus - the change in the net value of the equity of associates using the equity method, NT$17,000 of remeasurement of defined benefit plans using the equity method, NT$588,000 of gains or losses on disposal, and NT$11,656,000 of undistributed earnings adjusted based on the net value of the equity of associates using the equity method.

Note 3: The market price refers to the closing price on December 31, 2020; the net equity value was mainly calculated based on the investees’ financial statements and the Company's ownership.

• 88 -

TYNTEK Corporation

Statement of Changes in Right-of-use Assets For the Year Ended December 31, 2020

Statement 12

Unit: In Thousands of New Taiwan Dollars

Item Land Buildings Other Equipment Transport Equipment		Beginning retained earnings $ 90,878 3,274 1,997 381 $ 96,530		Increase $ 619 - 689 - $ 1,308		Decrease $ 38 3,274 - 381 $ 3,693	Ending balance	Ending balance
								$ 91,459 - 2,686 - $ 94,145

• 89 -

TYNTEK Corporation

Statement of Changes in Accumulated Depreciation of Right-of-use Assets For the Year Ended December 31, 2020

Statement 13

Unit: In Thousands of New Taiwan Dollars

Item Land Buildings Other Equipment Transport Equipment		Beginning retained earnings $ 2,731 1,637 599 191 $ 5,158		Increase $ 3,114 819 538 190 $ 4,661		Decrease $ 29 2,456 - 381 $ 2,866	Ending balance	Ending balance
								$ 5,816 - 1,137 - $ 6,953

• 90 -

TYNTEK Corporation

Statement of Short-term Borrowings

Dec. 31, 2020

Statement 14

Unit: In Thousands of New Taiwan Dollars

Type of borrowings and creditors Borrowings for purchase of materials Bank of Taiwan Taiwan Cooperative Bank First Commercial Bank Chang Hwa Commercial Bank Land Bank of Taiwan Bank revolving borrowings Taipei Fubon Bank Cathay United Bank	Ending balance $ 55,275 5,370 7,545 4,663 12,706 85,559 231,000 139,000 370,000 $ 455,559	Term of contract 2020.07.20~2021.06.28 2020.07.28~2021.03.14 2020.12.14~2020.03.15 2020.11.19~2021.06.26 2020.07.14~2021.06.22 2020.07.09~2021.06.07 2020.10.30~2021.11.01	Interest rate range (%) 0.90~1.09 1.08 1.07 1.02 1.06 0.88~0.90 0.88~0.89	Financing facilities $ 300,000 110,000 25,000 50,000 50,000 535,000 300,000 150,000 450,000 $ 985,000	Pledge/Security
					None None (shared facilities with revolving borrowings) None (shared facilities with revolving borrowings) None (shared facilities with revolving borrowings) None (shared facilities with revolving borrowings) The amount includes NT$300,000,000 as the amount for secured borrowings The amount includes NT$150,000,000 as the amount for secured borrowings

Note: The Company’s short-term borrowing credit line totals approximately NT$2,122,400,000 (including the unused credit line of NT$1,137,400,000 for short-term borrowings). As of December 31, 2020, the Company’s unutilized short-term borrowing credit line amounted to approximately NT$1,666,841,000.

• 91 -

TYNTEK Corporation

Statement of Accounts Payable

Dec. 31, 2020

Statement 15

Unit: In Thousands of New Taiwan Dollars

Name Non-related parties Atecom Technology Co., Ltd. SEI Electronics Materials, Ltd. LandMark Optoelectronics Corporation Matsuda Sangyo Co., Ltd. Others (Note) Related parties Summit-tech Resource Corp.	Summary Payment for purchase Payment for purchase Payment for purchase Payment for purchase Payment for purchase Payment for purchase		Amount
			$ 42,982 25,093 24,181 17,069 211,574 320,899 755 $ 321,654

Note: The balance of each customer did not exceed 5% of the balance of this account.

• 92 -

TYNTEK Corporation Statement of Lease Liabilities

Dec. 31, 2020

Unit: In Thousands of New Taiwan Dollars

Statement 16 Item Land Land Land Other Equipment Other Equipment Other Equipment	Summary No. 15, Kezhong Road Hsiu-Hua Chen-Lin Chi-Chang Chen Lease of phone host equipment Lease of phone host equipment Lease of gas storage tank equipment	U Lease term 2017.11.01~2056.11.30 2019.07.01~2022.06.30 2019.07.01~2022.06.30 107.07.01~112.06.30 107.07.01~112.06.30 109.01.01~113.12.31	nit: In Thousands of Discount rate 1.80% 1.80% 1.80% 1.79% 1.79% 1.80%	New Taiwan Dollars Amount	New Taiwan Dollars Amount
					$ 85,618 571 571 510 510 556 $ 88,336

• 93 -

TYNTEK Corporation

Statement of Operating Income

For the Year Ended December 31, 2020

Statement 17 Unit: In Thousands of New Taiwan Dollars

Item Silicon detector Visible LED Others	Quantity (thousand units) 11,631 8,440 104		Amount
			$ 1,239,199 923,261 38,092 $ 2,200,552

• 94 -

TYNTEK Corporation

Statement of Operating Costs

For the Year Ended December 31, 2020

Statement 18

Unit: In Thousands of New Taiwan Dollars

Item Merchandise inventory at beginning of period Add: Purchase of goods Less: Merchandise inventory at end of period Reclassified to operating expenses Cost of purchase and sales Consumption of raw materials Materials at beginning of period Add: Materials purchased Others Less: Materials at end of period Raw materials sold Reclassified to operating expenses Others Consumption of raw materials Consumption of supplies Supplies at beginning of period Add: Materials purchased Others Less: Supplies at end of period Supplies sold Reclassified to operating expenses Consumption of supplies Direct labor Production overheads Manufacturing cost Add: Work-in-progress at beginning of period Others Less: Work-in-progress at end of period Work-in-progress sold Reclassified to operating expenses Others Cost of finished goods Add: Finished goods at beginning of period Others Less: Finished goods at end of period Reclassified to operating expenses Others Cost of sales of self-made products Cost of raw materials sold Cost of supplies sold Cost of work-in-progress sold Others Cost of production and sales Cost of sales		Amount
	( ( ( ( ( ( ( ( ( ( ( ( ( ( (	$ - 33,007 - 2,603) 30,404 102,020 858,609 62,846 117,455 ) 10,249 ) 17,993 ) 50,835) 826,943 14,243 170,281 63 21,615 ) 996 ) 357) 161,619 238,292 685,367 1,912,221 225,903 231,194 272,401 ) 113,390 ) 8,315 ) 71,921) 1,903,291 237,843 5,897 239,707 ) 1,792 ) 162,372) 1,743,160 10,249 996 113,390 500 1,868,295 $ 1,898,699

• 95 -

TYNTEK Corporation

Statement of Production Overheads

For the Year Ended December 31, 2020

Unit: In Thousands of New Taiwan Dollars

Statement 19 Unit: In Thousand Item Processing expenses Direct labor Depreciation Utilities expense Others (Note)	s of New Taiwan Dollars Amount	s of New Taiwan Dollars Amount
		$ 202,362 114,321 177,100 80,741 83,843 $ 658,367

Note: Each amount did not exceed 5% of the balance of this account.

• 96 -

TYNTEK Corporation

Statement of Operating Expenses

For the Year Ended December 31, 2020

Statement 20

Unit: In Thousands of New Taiwan Dollars

Item Wages and salaries Freight cost Depreciation Material expense Export expense Other expenses (Note)		Amount
	Selling and marketing expenses $ 12,716 4,874 684 - 3,104 5,536 $ 26,914	Administrative expenses $ 92,334 18 16,914 - - 49,145 $ 158,411	Research and development expenses
				$ 43,706 59 3,643 20,816 - 29,023 $ 97,247

Note: Each amount did not exceed 5% of the balance of this account.

• 97 -

TYNTEK Corporation

Table of Aggregate Employee Benefit, Depreciation, and Amortization Expenses Incurred in Current Period by Function For the Years Ended December 31, 2020 and 2019

Statement 21

Unit: In Thousands of New Taiwan Dollars

Employee benefits expense Salaries and wages Pension Meal expense Employee benefit fund Employee insurance premium Remuneration of directors Total Depreciation expense Amortization expenses			2020		Total $ 405,728 17,614 22,379 2,607 41,778 15,330 $ 505,436 $ 198,341 $ 815			2019
	Operating costs $ 277,333 12,583 18,097 1,769 31,297 - $ 341,079 $ 177,100 $ 23		Operating expenses $ 128,395 5,031 4,282 838 10,481 15,330 $ 164,357 $ 21,241 $ 792			Operating costs $ 237,509 12,035 17,702 1,625 29,601 - $ 298,472 $ 148,695 $ 20		Operating expenses $ 103,175 5,031 4,259 759 10,228 7,855 $ 131,307 $ 20,871 $ 805		Total
										$ 340,684 17,066 21,961 2,384 39,829 7,855 $ 429,779 $ 169,566 $ 825

Notes:

1. The number of employees for this year and the previous year were 687 and 70,4 respectively, of which the number of directors who did not serve as employees concurrently was both 8.

2. Companies whose stocks have been listed on the Taiwan Stock Exchange or Taipei Exchange shall additionally disclose the following information:

3. (1) The average employee benefits expense for 2020 was NT$722,000 (Total employee benefits expense for 2020— Total directors’ remuneration/Number of employees for 2020—Number of directors who are not employees concurrently).

The average employee benefits expense for 2019 was NT$606,000 (Total employee benefits expense for 2019— Total directors’ remuneration/Number of

employees for 2019—Number of directors who are not employees concurrently).

(2) The average employee salaries and wages for 2020 was NT$598,000 (Total salaries and wages for 2020 / Number of employees for 2020 - Number of directors who are not employees concurrently).

The average employee salaries and wages for 2019 was NT$489,000 (Total salaries and wages for 2019 / Number of employees for 2019 - Number of directors who are not employees concurrently).

(3) The average employee salary and wage adjustment was 22.29% (Average employee salaries and wages of the current year - Average employee salaries and wages of the previous year / Average employee salaries and wages of the previous year).

• (4) The Company does not engage any supervisor, so it does not intend to disclose the supervisor's compensation, remuneration, and professional service expense.

• (5) The Company’s salary and remuneration policy (including directors, supervisors, managers, and employees)

• A. The Company compensates directors based on their participation and contribution to the Company's operations while honoraria are granted in fixed amounts after taking into consideration the standard in the industry. According to the Articles of Incorporation, profits concluded in a year are subject to director remuneration of no more than 5% and employee compensation of 5%-15%. The amount of remuneration, once resolved by the board of directors, is presented during shareholder meeting.

(To be Continued)

• 98 -

(Continued)

• B. The compensation standards for the President, vice presidents, and managers are determined after their individual performance, contribution to the overall operation of the Company, and the standards in the market are considered, and then deliberated by the remuneration committee before submitted to the board of directors for resolution.

• C. The Company’s employee salary and remuneration policy is based on each employee’s position, contribution to the Company, performance, and other aspects; the overall salary and remuneration package includes monthly salary, quarterly bonuses based on the Company’s operating performance, and employee compensation based on annual profitability. In addition, the Company considers the general standards in the same industry and reviews internal fairness to continuously optimize employees’ salary and remuneration.

• 99 -